L-3 COMMUNICATIONS CORPORATION; L-3 APPLIED TECHNOLOGIES, INC., Plaintiffs - Appellants,
SERCO, INC., Defendant-Appellee.
Argued: March 20, 2019
from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, Senior
District Judge. (1:15-cv-00701-TSE-JFA)
Nicholas Drian, MANATT PHELPS & PHILLIPS, LLP,
Washington, D.C., for Appellants.
David Wilburn, MCGUIREWOODS LLP, Tysons Corner, Virginia, for
L. Wilkinson, Andrew Zimmitti, MANATT PHELPS & PHILLIPS,
LLP, Washington, D.C.; Steven L. Levitt, Karen L. Weiss,
LEVITT LLP, Mineola, New York, for Appellants.
D. Frei, Matthew A. Fitzgerald, Ashley P. Peterson,
MCGUIREWOODS LLP, Richmond, Virginia; Amy Miller, Martin J.
Amundson, BUCHANAN INGERSOLL & ROONEY PC, Washington,
D.C., for Appellee.
Keenan wrote the opinion, in which Judge Diaz and Senior
Judge Duncan joined.
KEENAN and DIAZ, Circuit Judges, and DUNCAN, Senior Circuit
BARBARA MILANO KEENAN, CIRCUIT JUDGE
case comes before us for the second time. Plaintiffs L-3
Communications Corporation and L-3 Applied Technologies, Inc.
(L-3 ATI) (collectively, the plaintiffs) appeal from the
district court's award of summary judgment to Serco, Inc.
in the plaintiffs' action alleging numerous claims
arising out of a failed business relationship. The plaintiffs
contend that Serco conspired with another company, Jaxon
Engineering & Maintenance, Inc. (Jaxon), to
"rig" a bidding process related to work for the
United States Air Force Space Command (the Air Force),
thereby interfering with the plaintiffs' reasonable
business expectancy in that work. The plaintiffs assert that
Serco's conduct amounted to tortious interference with
the plaintiffs' business expectancy, common law
conspiracy and statutory business conspiracy under Virginia
law, and violations of the Colorado Organized Crime Control
Act (COCCA), Colo. Rev. Stat. § 18-17-104.
our review, we conclude that the district court properly
awarded summary judgment to Serco on the claims of tortious
interference with business expectancy, because those claims
fail as a matter of law. However, for the reasons discussed
below, we conclude that the district court erred in awarding
summary judgment to Serco with respect to the plaintiffs'
conspiracy claims and COCCA claims. We therefore affirm in part,
and vacate in part, the district court's judgment and
remand for further proceedings.
detailed factual background of this case is included in our
prior opinion. L-3 Commc'ns Corp. v. Serco,
Inc., 673 Fed.Appx. 284, 285-87 (4th Cir. 2016). We
restate those facts as necessary here. In 2004, the Air Force
awarded an indefinite delivery indefinite quantity contract
to Serco (the prime contract). The prime contract required
that Serco provide testing and upgrading services to certain
Air Force facilities to protect those sites from high
altitude electromagnetic pulse (HEMP) events.
the prime contract, the Air Force periodically would provide
Serco with a statement of work that outlined the requirements
for a specific HEMP-related project. If Serco could not
complete the work itself, Serco would issue a request for
proposal (RFP), which invited certain qualified companies to
bid on the identified work as a subcontractor.
months after being awarded the prime contract, Serco entered
into a subcontract for HEMP-related work (the subcontract)
with the Titan Corporation, a predecessor to plaintiff L-3
The subcontract provided, in relevant part, that
"[Serco] has no obligation to issue and there is no
guaranty to [the plaintiffs] that [they] will receive any
work under the terms of this Subcontract." Instead, the
plaintiffs still were required to submit proposals to bid on
HEMP-related work, which was issued in the form of individual
December 2004 and June 2009, Serco awarded every task order
issued under the prime contract to the plaintiffs or their
predecessors. And although Serco was required by the prime
contract to select subcontractors on a competitive basis to
the maximum extent practicable, the plaintiffs were the only
subcontractors that Serco considered for HEMP-related work
during this time period.
2009, Serco began to award HEMP-related task orders to
another company, Jaxon, which was formed by a longtime L-3
employee. The plaintiffs allege that Jaxon was not qualified
to perform this work, and that Serco's decision to award
HEMP-related work to Jaxon was based on a "fraudulent
scheme" between Serco and Jaxon in which Serco actively
prevented the plaintiffs from fairly competing for work under
the task orders. The plaintiffs allege that Serco facilitated
this scheme (1) by encouraging and assisting former L-3
employees, now working for Jaxon, to use the plaintiffs'
confidential information when bidding on HEMP-related
projects for Jaxon, and (2) by providing Jaxon with inside
information about government costs and requirements for such
projects. Based on this purported scheme, the plaintiffs
claim that between July 2009 and November 2014, Serco awarded
32 HEMP-related task orders to Jaxon that otherwise would
have been awarded to the plaintiffs. During that same period,
Serco awarded 11 other HEMP-related task orders to the
plaintiffs and 13 such task orders to other contractors.
2015, the plaintiffs initiated the present action. The
plaintiffs asserted claims of: (1) tortious interference with
the plaintiffs' business expectancy in HEMP-related task
orders from July 2009 to the time of filing (Counts 1-34)
(the tortious interference claims); (2) aiding and abetting
Jaxon to tortiously interfere with this business expectancy
(Counts 35-68) (the aiding and abetting claims); (3) civil
conspiracy in violation of Virginia common law, and statutory
business conspiracy in violation of Virginia Code
§§ 18.2-499 and 18.2-500 (Counts 69-70) (the
conspiracy claims); and (4) violations of the Colorado
Organized Crime Control Act, Colo. Rev. Stat. §
18-17-104 (Counts 71-73) (the COCCA claims).
district court initially dismissed the plaintiffs' action
under Federal Rule of Civil Procedure 12(b)(1), holding that
the plaintiffs lacked standing because they did not have a
business expectancy in the losses alleged. We reversed,
concluding that the plaintiffs had standing, and that the
question whether the plaintiffs plausibly had alleged a
business expectancy was one properly considered under Federal