United States Court of Appeals
for the Federal Circuit
__________________________
TRUSTED INTEGRATION, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-5142
__________________________
Appeal from the United States Court of Federal
Claims in Case No. 09-CV-759, Judge Lynn J. Bush.
_________________________
Decided: October 14, 2011
_________________________
JOHN A. BONELLO, David, Brody & Dondershine, LLP,
of Reston, Virginia, argued for plaintiff-appellant. With
him on the brief was THOMAS K. DAVID.
JAMES R. SWEET, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were TONY WEST, Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
and DEBORAH A. BYNUM, Assistant Director.
__________________________
TRUSTED INTEGRATION v. US 2
Before BRYSON, MOORE, and O’MALLEY, Circuit Judges.
O’MALLEY, Circuit Judge.
This case involves the application of 28 U.S.C. § 1500,
which precludes the United States Court of Federal
Claims (“CFC”) from exercising subject matter jurisdic-
tion over “any claim for or in respect to which the plaintiff
or his assignee has pending in any other court any suit or
process against the United States.” Applying § 1500, the
CFC dismissed Trusted Integration, Inc.’s (“Trusted
Integration”) three count complaint against the United
States. Because we conclude that Count II, but only
Count II, of Trusted Integration’s complaint is not barred
by § 1500, we affirm-in-part and reverse-in-part.
BACKGROUND
A. Factual Background 1
In 2002, Congress enacted the Federal Information
Security Management Act (“FISMA”), Pub. L. No. 107-
347, 116 Stat. 2946–2955 (2002) (codified at 44 U.S.C. §§
3541–49 (2006)). FISMA created a comprehensive
framework for the management and oversight of informa-
tion security in the federal government. Trusted Integra-
tion, Inc. v. United States, 93 Fed. Cl. 94, 95 (Fed. Cl.
2010). Under FISMA, federal agencies must meet certain
security standards, compliance with which is monitored
by the Office of Management and Budget (“OMB”). Im-
portantly, FISMA allows agencies to use commercial
products in order to achieve compliance.
Trusted Integration is a commercial supplier of
FISMA compliance solutions. Its primary product, Trust-
1 Because we review the CFC’s ruling on a motion
to dismiss, these facts are gleaned from Trusted Integra-
tion’s complaint and are assumed to be true for purposes
of this appeal.
3 TRUSTED INTEGRATION v. US
edAgent, is the leading FISMA compliance product util-
ized by federal agencies. In December 2003, the United
States Department of Justice (“DOJ”) and Trusted Inte-
gration began a pilot program using TrustedAgent to
meet DOJ’s FISMA obligations. Based on the results of
the pilot program, in June 2004, DOJ purchased a license
to use TrustedAgent as part of its FISMA solution, known
as Cyber Security Assessment Management (“CSAM”). In
accordance with this agreement, DOJ was licensed to use
TrustedAgent for “internal business use.” Joint Appendix
(“J.A.”) 25. The license also required DOJ to maintain the
confidentiality of the TrustedAgent product and related
documentation.
In the summer of 2006, OMB launched a new pro-
gram called Information System Security Lines of Busi-
ness for FISMA reporting. Under this program, every
federal agency was invited to submit its FISMA compli-
ance solution to be considered as a “Center of Excellence”
(“COE”). After receipt of these solutions, OMB would
designate a limited number of agencies as COEs, and all
other federal agencies would be required to purchase their
FISMA compliance solution from one of the designated
COE agencies.
Although Trusted Integration could have partnered
with other agencies that utilized TrustedAgent, Trusted
Integration agreed to participate only in DOJ’s submis-
sion for COE consideration. Because of limitations in its
license agreement with Trusted Integration, however,
DOJ needed to enter into a separate agreement with
Trusted Integration to allow it to submit its CSAM solu-
tion for consideration as a COE. Trusted Integration and
DOJ, thus, entered into to an agreement to utilize Trust-
edAgent as part of the CSAM solution it submitted to
OMB. The limitations of the license agreement between
TRUSTED INTEGRATION v. US 4
Trusted Integration and DOJ otherwise remained un-
changed and in force.
In September 2006, Trusted Integration and DOJ
submitted a joint statement of capabilities for CSAM in
response to OMB’s request for COE proposals. Between
September and December 2006, Trusted Integration and
DOJ conducted a series of demonstrations of the CSAM
product in support of DOJ’s bid for COE status. All of
those demonstrations included TrustedAgent. In October
2006, moreover, DOJ presented CSAM to the COE selec-
tion committee, representing that TrustedAgent would be
an integral part of its CSAM proposal. Trusted Integra-
tion, 93 Fed. Cl. at 96.
Despite these representations, and without providing
notice to Trusted Integration, near the end of 2006, DOJ
began developing its own alternative to the TrustedAgent
component of CSAM. While developing an alternative to
TrustedAgent, DOJ developers accessed the TrustedAgent
Oracle database for the purpose of learning about the
system’s architecture. DOJ developed this alternative to
increase revenue from sales of CSAM in the event DOJ
was selected as a COE.
In February 2007, OMB selected DOJ as one of two
FISMA COEs. In accordance with OMB directives, agen-
cies were required to purchase a FISMA solution from one
of the COEs by April 2007, implementing the purchased
solution by no later than fiscal year 2009.
Shortly after its selection as a COE, DOJ began offer-
ing agencies a modified version of CSAM that substituted
its newly developed alternative for the TrustedAgent
software. During several presentations to agency custom-
ers, DOJ made disparaging comments about the quality of
TrustedAgent. Despite these statements, however, DOJ
continued to indicate to potential customers that Truste-
5 TRUSTED INTEGRATION v. US
dAgent was in fact an integral component of the CSAM it
would provide. These representations were made as late
as March 13, 2007.
In April 2007, DOJ informed Trusted Integration that
it would no longer offer TrustedAgent as part of its
CSAM. DOJ indicated it had decided to use its own
alternative because some of its users experienced data
loss and adverse performance issues with TrustedAgent.
B. Procedural History
On May 13, 2009, Trusted Integration filed a com-
plaint (“district court complaint”) in the United States
District Court for the District of Columbia, seeking recov-
ery against the United States, asserting three counts: (1)
a Lanham Act claim for false designation of origin; (2) a
common law unfair competition claim; and (3) a breach of
fiduciary duty claim. Id. Trusted Integration sought $15
million in damages. Id.
On November 6, 2009, Trusted Integration filed a
complaint in the CFC (“CFC complaint”), which gave rise
to the present appeal. In the CFC, Trusted Integration
sought relief against the United States, asserting three
counts: (1) breach of an oral or implied-in-fact contract; (2)
breach of the TrustedAgent license agreement; and (3)
breach of the duty of good faith and fair dealing. Id. As
with its district court complaint, Trusted Integration
sought $15 million in damages.
After the CFC suit was filed, the United States sought
dismissal of the district court action in its entirety.
Specifically, the DOJ asserted that Trusted Integration’s
claims were either within the exclusive jurisdiction of the
CFC or the United States had not waived its sovereign
immunity. The district court agreed, in part, with the
government’s arguments. On January 20, 2010, the
TRUSTED INTEGRATION v. US 6
district court dismissed without prejudice Trusted Inte-
gration’s common law unfair competition claim and
breach of fiduciary duty claim for lack of subject matter
jurisdiction. Trusted Integration, Inc. v. United States,
679 F. Supp. 2d 70, 84 (D.D.C. 2010). The court held that
DOJ’s alleged breach of fiduciary duty to Trusted Integra-
tion was based on an agreement between the parties and,
thus, sounded in contract. Id. Because Trusted Integra-
tion sought more than $10,000 in damages, the claim was
governed by the Tucker Act and fell within the exclusive
jurisdiction of the CFC. Id. With respect to Trusted
Integration’s unfair competition claim, the court held that
it was similarly beyond the court’s jurisdiction because
the claim was based upon an alleged misrepresentation,
which is outside of the Federal Tort Claims Act’s waiver
of sovereign immunity. Id. at 82-83. The district court,
however, denied the United States’ motion to dismiss the
Lanham Act claim. Id. at 81.
The United States then sought dismissal of Trusted
Integration’s claims in the CFC. In its motion to dismiss,
the United States argued that the CFC lacked subject
matter jurisdiction because Trusted Integration’s claims
were barred by § 1500, which generally prohibits simul-
taneous actions against the government in separate
forums. Trusted Integration, 93 Fed. Cl. at 97. After
reviewing the party’s motions, the CFC held that it lacked
subject matter jurisdiction because both suits sought the
same relief and were “based upon the same dispute be-
tween the same parties: defendant’s allegedly wrongful
development of an alternative to the TrustedAgent prod-
uct in contravention of its agreement to cooperate with
plaintiff in the submission and promotion of its CSAM
offering.” Id. at 101. Accordingly, the CFC dismissed the
action without prejudice for lack of subject matter juris-
diction.
7 TRUSTED INTEGRATION v. US
Trusted Integration timely appealed the CFC’s deci-
sion. We have jurisdiction pursuant to 28 U.S.C. §
1295(a)(3).
DISCUSSION
We review de novo the CFC’s decision to dismiss a
case for lack of subject matter jurisdiction. Bianchi v.
United States, 475 F.3d 1268, 1273 (Fed. Cir. 2007).
Trusted Integration, as the plaintiff, bears the burden of
establishing the court’s jurisdiction over its claims by a
preponderance of the evidence. See Reynolds v. Army &
Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988).
In determining jurisdiction, a court must accept as true
all undisputed facts asserted in the plaintiff’s complaint
and draw all reasonable inferences in favor of the plain-
tiff. Henke v. United States, 60 F.3d 795, 797 (Fed. Cir.
1995).
I.
Shortly after the end of the civil war, Congress en-
acted the predecessor to the jurisdictional bar now codi-
fied in § 1500. United States v. Tohono O’dham Nation,
131 S. Ct. 1723, 1728 (2011). The statute was enacted to
prevent duplicative lawsuits brought by residents of the
former Confederacy. See generally UNR Indus., Inc. v.
United States, 962 F.3d 1013, 1017–19 (Fed. Cir. 1992)
(discussing the historic background of § 1500 and its
predecessor). As the Supreme Court recently explained,
these residents,
so-called “cotton claimants”—named for their
suits to recover for cotton taken by the Federal
Government—sued the United States in the Court
of Claims under the Abandoned Property Collec-
tion Act, 12 Stat. 820, while at the same time su-
TRUSTED INTEGRATION v. US 8
ing federal officials in other courts, seeking relief
under tort law for the same alleged actions.
Tohono, 131 S. Ct. at 1728. In other words, the statute
was enacted to prevent a claimant from seeking recovery
in district court and the Court of Claims for the same
conduct pleaded under different legal theories.
Pursuant to § 1500, the CFC does not have jurisdic-
tion over a claim if the plaintiff has “another suit for or in
respect to that claim pending against the United States or
its agents.” Id. at 1727. The Supreme Court has ex-
plained that two suits are “for or in respect to” the same
claim if “the plaintiff’s other suit was based on substan-
tially the same operative facts as the Court of Claims
action, at least if there was some overlap in the relief
requested.” Keene Corp. v. United States, 508 U.S. 200,
212 (1993). Determining whether two suits are based on
substantially the same operative facts “requires a com-
parison between the claims raised in the Court of Federal
Claims and in the other lawsuit.” Id. at 210. Impor-
tantly, the legal theories underlying the asserted claims
are not relevant to this inquiry. Id. (“That the two actions
were based on different legal theories [does] not matter.”).
After Keene, because the issue was not before the Su-
preme Court, it remained unclear whether two suits
needed to seek some overlapping relief to fall within the
strictures of § 1500. See Keene Corp., 508 U.S. at 212 n.6
(“Because the issue is not presented on the facts of this
case, we need not decide whether two actions based on the
same operative facts, but seeking completely different
relief, would implicate § 1500.”). Shortly after Keene was
decided, we held that “[f]or the Court of Federal Claims to
be precluded from hearing a claim under § 1500, the claim
pending in another court must arise from the same opera-
tive facts, and must seek the same relief.” Loveladies
9 TRUSTED INTEGRATION v. US
Harbor, Inc. v. United States, 27 F.3d 1545, 1551 (Fed.
Cir. 1994) (en banc) (original emphasis omitted and
emphasis added).
In Tohono, the Supreme Court recently clarified that
“[t]wo suits are for or in respect to the same claim, pre-
cluding jurisdiction in the CFC, if they are based on
substantially the same operative facts, regardless of the
relief sought in each suit.” Tohono, 131 S. Ct. at 1731. In
reaching this decision, the Court explained that:
An interpretation of § 1500 focused on the facts
rather than the relief a party seeks preserves the
provision as it was meant to function, and it keeps
the provision from becoming a mere pleading rule,
to be circumvented by carving up a single transac-
tion into overlapping pieces seeking different re-
lief.
Id. at 1730. The Supreme Court noted that, by focusing
only on the operative facts, its holding was generally
consistent with the doctrine of res judicata, and, therefore
gave “effect to the principles of preclusion law embodied
in [§ 1500].” Id.
The Supreme Court reiterated that the statute “
‘make[s] it clear that Congress did not intend the statute
to be rendered useless by a narrow concept of identity.’ ”
Id. at 1728 (quoting Keene Corp., 508 U.S. at 213). In-
deed, § 1500 “suggests a broad prohibition, regardless of
whether ‘claim’ carries a special or limited meaning.”
Tohono, 131 S. Ct. at 1728. The Supreme Court observed,
moreover, that because § 1500 embodies principles of res
judicata, determining whether two suits arise from sub-
stantially the same operative facts for purposes of that
provision can be informed by how claims are defined for
res judicata purposes. Id. at 1730.
TRUSTED INTEGRATION v. US 10
After Tohono, it is clear that we must: (1) not view §
1500 narrowly; (2) focus only on whether two claims share
the same operative facts and not on the relief requested;
and (3) determine whether two suits share substantially
the same operative facts by applying the test developed in
Keene Corp. It is clear, moreover, that our analysis
should consider the principles of res judicata to which the
Supreme Court pointed. Applying these guiding princi-
ples to the claims asserted by Trusted Integration, we
conclude that the CFC correctly concluded that Counts I
and III of the CFC complaint arose from the same opera-
tive facts upon which the claims in the district court were
predicated and are, thus, barred by § 1500. We conclude,
however, that Trusted Integration’s breach of license
agreement claim—Count II—arises from different opera-
tive facts than the claims in the district court action and
that the CFC erred in dismissing that claim under § 1500.
II.
Because determining whether claims arise from sub-
stantially the same operative facts requires a comparison
of the relevant claims, we address each claim in Trusted
Integration’s CFC complaint, albeit in an alternative
order.
A. Count I of the CFC Complaint is Barred by § 1500
Count I of Trusted Integration’s CFC complaint al-
leges that DOJ’s failure to include TrustedAgent in its
CSAM offering breached an implied agreement between
the parties to engage in a joint venture. The district court
complaint contained a claim alleging that the same con-
duct constituted a breach of a fiduciary duty by DOJ
premised on the parties’ roles as joint venturers. Trusted
Integration argues that because the district court com-
plaint does not allege the existence of a contract, Count I
of the CFC complaint cannot arise from substantially the
11 TRUSTED INTEGRATION v. US
same operative facts pleaded in the district court com-
plaint. DOJ argues that the only difference between
Count I and the claims in the district court complaint are
the legal theories supporting the claims, which, according
to DOJ, are insufficient to place Count I outside § 1500’s
prohibition. We agree with DOJ.
Count I of the CFC complaint alleges that DOJ
breached an oral or implied-in-fact contract, which re-
quired DOJ to use the TrustedAgent product in the CSAM
offering. The CFC complaint alleges that DOJ breached
this contract by
(a) failing to adequately offer or promote Truste-
dAgent as part of DOJ’s Center of Excellence of-
fering; (b) developing a competing product and
replacing TrustedAgent with the competing prod-
uct in DOJ’s Center for Excellence offering; and
(c) replacing TrustedAgent with DOJ’s alternative
solution in the DOJ Center of Excellence Offering.
J.A. 34. In the district court complaint, Trusted Integra-
tion alleged that DOJ owed it a fiduciary duty based on
their relationship. Trusted Integration alleged that DOJ
breached this duty by, among other conduct: (a) “replacing
TrustedAgent with DOJ’s alternative solution in the DOJ
center of Excellence offering”; and (b) “failing to ade-
quately offer or promote TrustedAgent as part of DOJ’s
Center of Excellence offering.” J.A. 48–49.
Comparing the conduct pleaded in these counts, it is
apparent that each count involves nearly identical con-
duct. The only difference between these claims is Trusted
Integration’s characterization of the relationship it claims
gave rise to the legal duty it asserts DOJ breached. As
the district court concluded, Trusted Integration’s breach
of fiduciary duty claim, although sounding in tort, is
essentially a contract claim because it appears to be
TRUSTED INTEGRATION v. US 12
based entirely upon breach by the government of a
promise made to offer, promote, and use Truste-
dAgent’s product in its FISMA solution. The only
way the DOJ could have breached its fiduciary
duties was to violate the terms of the implied or
express agreement it had with [Trusted Integra-
tion].
Trusted Integration, Inc. v. United States, 679 F. Supp. 2d
70, 84 (D.D.C. 2010). In essence, the breach of fiduciary
duty claim asserted in the district court complaint is
based upon the underlying agreement between DOJ and
Trusted Integration that also serves as the basis for
Count I of the CFC complaint. Trusted Integration was,
therefore, alleging that the same conduct gave rise to
different claims based upon purportedly distinct legal
theories.
As previously discussed, since Keene, it has been clear
that the legal theories asserted before the district court
and the CFC are irrelevant to whether the claims arise
from substantially the same operative facts. See Keene
Corp., 508 U.S. at 212 (noting that § 1500 bars a subse-
quent suit even if “the two actions were based on different
legal theories . . . .”). Because the same operative facts
gave rise to both Count I of the CFC complaint and at
least one of the counts in the district court complaint, the
CFC correctly concluded that it lacked subject matter
jurisdiction over Count I under § 1500. 2
2 We hold that the fact that the district court dis-
missed some of the counts of Trusted Integration’s district
court complaint has no effect on our analysis of each of
the counts of the CFC complaint. We apply § 1500’s
jurisdictional bar “by looking to the facts existing when
[Trusted Integration] filed each of its complaints, . . .
follow[ing] the longstanding principle that the jurisdiction
of the Court depends upon the state of things at the time
13 TRUSTED INTEGRATION v. US
B. Count III of the CFC Complaint is Barred by § 1500
In Count III of its CFC complaint, Trusted Integration
asserts that the DOJ breached the duty of good faith and
fair dealing it owed Trusted Integration. On appeal,
Trusted Integration asserts that the CFC erred in finding
this Count barred by § 1500.
The CFC’s determination that § 1500 barred Count III
was correct. As with Count I of the CFC complaint, Count
III is premised on the same operative facts as the district
court complaint pleaded under different legal theories.
Count III of the CFC complaint alleges that DOJ
breached the duty of good faith and fair dealing by:
(a) failing to advise [Trusted Integration] that
DOJ was developing an alternative solution to
TrustedAgent . . .; (b) failing to advise [Trusted
Integration] that DOJ intended to replace Truste-
dAgent with DOJ’s alternative solution . . .; (c) re-
placing TrustedAgent with DOJ’s alternative
solution . . .; (d) failing to adequately offer or pro-
mote TrustedAgent as part of DOJ’s Center of Ex-
cellence offering; (e) denying [Trusted Integration]
of the action brought.” Keene Corp., 508 U.S. at 207
(internal quotation marks omitted); see also Tohono, 131
S. Ct. at 1731 (“Should the Nation choose to dismiss the
latter action, or upon that action’s completion, the Nation
is free to file suit again in the CFC if the statute of limita-
tions is no bar.”). Tohono clarifies that any suggestion in
Loveladies Harbor that the CFC can retroactively acquire
jurisdiction after a co-pending district court suit is dis-
missed is wrong: The CFC suit must be dismissed and re-
filed to avoid § 1500. Tohono, 131 S. Ct. at 1731. At the
time the CFC complaint was filed, all of Trusted Integra-
tion’s claims were still pending before the district court.
Trusted Integration, 93 Fed. Cl. at 96–97.
TRUSTED INTEGRATION v. US 14
access to potential customers of TrustedAgent;
and (f) disparaging TrustedAgent product.
J.A. 35.
Count III of the district court complaint similarly al-
leged that DOJ owed Trusted Integration a fiduciary duty
based on their relationship. Trusted Integration alleges
that the same conduct quoted above also breached the
fiduciary duty that arose from their relationship.
As with Count I, the only difference between Count
III in the district court complaint and Count III in the
CFC complaint is that, in the district court complaint, the
fiduciary duty arose from Trusted Integration and DOJ’s
relationship in a joint venture, while in the CFC com-
plaint, the fiduciary duty allegedly arose from an oral or
implied-in-fact contract. This characterization, however,
is not relevant to whether the claims arose from the same
operative facts. See Keene Corp., 508 U.S. at 212.
Trusted Integration alleges that the same conduct
breached both DOJ’s fiduciary duty to it and a contract
between them. The same operative facts, therefore, gave
rise to Count III before the CFC and Count III before the
district court.
C. Count II of the CFC Complaint is not Barred by §1500
In Count II of the CFC complaint, Trusted Integration
alleges that DOJ breached the TrustedAgent licensing
agreement. The CFC held that this count also arose from
the same operative facts as the claims Trusted Integra-
tion brought in the district court. Trusted Integration, 93
Fed. Cl. at 104. Trusted Integration argues this was error
because Count II is premised upon completely different
conduct, and the district court complaint alleges no claims
based on breach of the licensing agreement. Specifically,
Trusted Integration contends that “the breach of the
15 TRUSTED INTEGRATION v. US
License Agreement claim and the material facts support-
ing the claim have no relationship to a breach by DOJ of
an agreement ‘to include TrustedAgent as part of [DOJ’s]
. . . CSAM offering.’ ” Appellant’s Br. 16. On appeal, DOJ
asserts that the CFC properly concluded that § 1500
barred Count II because the district court complaint
contained claims based on breach of the license agree-
ment. 3 Significantly, DOJ does not argue that, if this
court concludes that the district court complaint did not
contain claims based on the breach of the license agree-
ment or conduct that would have breached the license
agreement, § 1500 still bars Count II. For the reasons
discussed below, we agree with Trusted Integration.
Count II of Trusted Integration’s CFC complaint al-
leges that DOJ breached its license agreement for the
TrustedAgent product by: “(a) failing to limit its use of
TrustedAgent product to internal use; (b) using the Trust-
edAgent product to develop a competing product; and (c)
failing to maintain the confidentiality of [Trusted Integra-
tion’s] confidential information.” J.A. 34. More specifi-
cally, Trusted Integration claims that DOJ breached the
license agreement when “DOJ CSAM developers, during
routine maintenance, accessed the TrustedAgent Oracle
3 In Trusted Integration’s reply brief, it argued that
DOJ should be collaterally estopped from arguing that the
license agreement gave rise to the fiduciary duties at
issue in the district court complaint. In response, DOJ
moved to strike this portion of Trusted Integration’s reply
brief because Trusted Integration did not raise the argu-
ment in its opening brief. As discussed below, we con-
clude that DOJ’s argument that Trusted Integration’s
district court complaint contained claims based on the
breach of the licensing agreement is not well-taken be-
cause it is wrong, not because collateral estoppel prevents
us from considering the argument. Its motion to strike
these portions of Trusted Integration’s reply brief is,
therefore, moot.
TRUSTED INTEGRATION v. US 16
database for data migration . . . to assess how the Truste-
dAgent FISMA software tools were designed . . . .” J.A.
32–33. The CFC concluded that this Count arose from
substantially the same operative facts as the claims
alleged in the district court complaint because it was
related to DOJ’s allegedly wrongful development of an
alternative to TrustedAgent. Trusted Integration, 93 Fed.
Cl. at 101. While this is a close question, for the reasons
articulated below, we conclude that the CFC erred by
dismissing this count of the CFC complaint because it
does not arise from substantially the same operative facts
as Trusted Integration’s district court complaint.
The basis of Trusted Integration’s district court com-
plaint was DOJ’s creation of an alternative to Trusted
Integration’s product and promotion of that alternative in
contravention of its promise to utilize TrustedAgent—the
very promise that convinced Trusted Integration to part-
ner with DOJ in its bid for COE status. Allegations
regarding that activity provide the support for claims I
and III of the CFC complaint and for all of the counts of
the district court complaint. The basis of Count II of the
CFC complaint, however, was a distinct contract: the
license agreement which restricted DOJ’s access to and
use of TrustedAgent. The district court complaint and
Count II are, therefore, premised on independent con-
tracts.
Contrary to DOJ’s assertion, moreover, the district
court complaint does not contain a claim based upon the
license agreement, nor does it allege that the license
agreement gave rise to the fiduciary duty Trusted Inte-
gration alleges DOJ breached. Instead, the district court
complaint alleges that DOJ and Trusted Integration
agreed to jointly offer a solution as a COE, and this deci-
sion gave rise to the joint business enterprise. This joint
enterprise is the relationship Trusted Integration argues
17 TRUSTED INTEGRATION v. US
gave rise to the fiduciary duty discussed in the district
court complaint. The district court recognized this fact.
Trusted Integration, 679 F. Supp. 2d at 77 n.1 (“Defen-
dant suggests that . . . the license agreement . . . is the
‘exclusive basis’ of the relationship between plaintiff and
defendant. But plaintiff makes no allegations about the
license, other than that it existed. . . . [P]laintiff's opposi-
tion brief argues that the source of its rights are ‘not
contractual’ and that it entered into a joint venture with
defendant ‘separate from a contract.’ ”).
Not only are these distinct contracts, but their breach
requires different conduct. The DOJ allegedly breached
the license agreement by accessing TrustedAgent for the
purpose of copying the program to aid DOJ’s development
of an alternative to TrustedAgent. In contrast, breach of
the agreement to use TrustedAgent as part of CSAM
required removal of TrustedAgent from CSAM and the
promotion of CSAM without TrustedAgent.
Importantly, the facts that would give rise to breach
of either of these agreements are not legally operative for
establishing breach of the other. Because the district
court complaint is based on the fact that DOJ developed
an alternative and promoted it, how the alternative was
developed is not a legally operative fact. Similarly, the
fact that DOJ had a separate agreement to utilize Truste-
dAgent in CSAM is not relevant to whether DOJ breached
the license agreement by accessing Trusted Integration’s
database to facilitate development of an alternative to
TrustedAgent. The license agreement is not just an
additional legal basis supporting Trusted Integration’s
claim to relief due to DOJ’s development and promotion of
CSAM without TrustedAgent; it is the source, and the
only asserted source, for Trusted Integration’s claim that
DOJ was unlawfully using its property. Accordingly, we
find that Count II and the counts of the district court
TRUSTED INTEGRATION v. US 18
complaint are not based upon substantially the same
operative facts.
We believe that this conclusion is consistent with the
principles of res judicata the Supreme Court emphasized
in Tohono. In drawing its analogy to the preclusion
principles of res judicata, the Supreme Court pointed to
the principles which were in force at the time the prede-
cessor to § 1500 was enacted. 4 Specifically the Supreme
Court explained, that when the predecessor to § 1500 was
enacted, there were two governing tests for determining
whether claims were precluded by their assertion in
earlier litigation: the act or contract test, and the evidence
test. Tohono, 131 S. Ct. at 1730. Summarizing the first
test, the act or contract test, the Supreme Court explained
that “[t]he true distinction between demands or rights of
4 While the Supreme Court made passing reference
to the modern transaction test of the Restatement Second
of Judgments, Tohono, 131 S. Ct. at 1730, it made clear
that it is the tests in place at the time the predecessor to §
1500 was enacted by which we must be guided. Id.; see
also Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238,
2245 (2011) (quoting Safeco Ins. Co. of Am. v. Burr, 551
U.S. 47, 58 (2007)) (citing Beck v. Prupis, 529 U.S. 494,
500–501 (2000)) (“[W]here Congress uses a common-law
term in a statute, we assume the ‘term . . . comes with a
common law meaning, absent anything pointing another
way.’ ”); Neder v. United States, 527 U.S. 1, 21 (1999) (“
‘Where Congress uses terms that have accumulated
settled meaning under . . . the common law, [we] must
infer, unless the statute otherwise dictates, that Congress
means to incorporate the established meaning of those
terms.’ ” (quoting Nationwide Mut. Ins. Co. v. Darden, 503
U.S. 318, 322 (1992))). Here, Congress’ interchangeable
use of the terms “cause of action” and “claim” in § 1500
and its predecessor establishes that it intended those
terms to carry their then-established common law mean-
ing. See Tohono, 131 S. Ct. at 1730 (noting that “princi-
ples of preclusion law [are] embodied in the statute”).
19 TRUSTED INTEGRATION v. US
action which are single and entire, and those which are
several and distinct, is, that the former immediately arise
out of one and the same act or contract, and the latter out
of different acts or contracts.” Id. (quoting J. Wells, Res
Adjudicata and Stare Decisis § 241, p. 208 (1878)). Under
the second test, the evidence test, two suits involve the
same claim if: “the same evidence support[s] and estab-
lish[es] both the present and the former cause of action?”
Id. (quoting 2 H. Black, Law of Judgments § 726, p. 866
(1891)).
We conclude that neither the act or contract test, nor
the evidence test, mandates the conclusion that Count II
and the counts of the district court complaint be consid-
ered the same claim. As discussed above, Count II and
the district court complaint arose out of different con-
tracts. The act or contract test, therefore, indicates that
Count II and the district court complaint do not involve
the same claim. See, e.g., Cromwell v. Cnty. of Sac, 94
U.S. 351, 358–59 (1876) (holding for the purpose of res
judicata that, because the two suits involved separate
contracts, a prior suit for recovery of coupons attached to
bonds did not involve the same claim as a later suit for
recovery of later maturing coupons attached to the same
bonds).
The evidence test similarly does not warrant the con-
clusion that Count II and the counts in the district court
complaint are based on the same claim. While evidence
relating to how the DOJ developed its TrustedAgent
alternative would support the claims asserted in the
district court complaint, this evidence would not both
support and establish the district court counts, which was
a prerequisite for application of the evidence test. See,
e.g., Stone v. United States, 64 F. 667, 670–71 (9th Cir.
1894) (holding that a prior suit and a subsequent suit
between the same parties did not involve the same claim
TRUSTED INTEGRATION v. US 20
because the evidence necessary to sustain the subsequent
suit was insufficient to entitle the plaintiff to relief in the
prior suit), aff’d, 167 U.S. 178 (1897); Stowell v. Chamber-
lain, 60 N.Y. 272, 276 (1875) (“The question is whether
the same evidence will maintain both actions. If the
evidence which will sustain the second would have au-
thorized a recovery in the first, under the allegations of
the complaint, the first judgment is an absolute bar to the
second.” (citation omitted)); Gayer v. Parker, 39 N.W. 845,
846 (Neb. 1888) (“If different proofs are required to sus-
tain the two actions, a judgment in one of them is no bar
to the other.”); Gates v. Goreham, 5 Vt. 317, 1833 WL
2359, at *3 (1833) (“In the case at bar, it cannot be said,
that the evidence, which was sufficient to support the first
action, was sufficient to support the second. It did not
tend, at all, to prove a conversion of the sheep by the
defendant.”).
Thus, under the evidence test as it then existed, the
overlapping evidence needed to be both relevant to and
legally operative to prove the prior claim before res judi-
cata would act as a bar to the subsequent claim. The
evidence necessary to sustain Count II is insufficient to
have entitled Trusted Integration to relief under any of
the claims alleged in the district court complaint. To be
entitled to relief under Count II, Trusted Integration
must establish that DOJ exceeded the scope of the license
agreement. But, to establish the claims alleged in the
district court complaint, Trusted Integration would have
to present evidence that it had a joint venture with DOJ,
and DOJ promoted and sold a product that violated the
fiduciary duty that arose from the joint venture. Evidence
related to the license agreement, while relevant as part of
the res gestae of DOJ’s wrongful acts, would not establish
that Trusted Integration and DOJ had a joint venture,
nor that DOJ’s conduct violated a fiduciary duty it owed
21 TRUSTED INTEGRATION v. US
Trusted Integration. This evidence, therefore, would be
insufficient to establish the claims alleged in the district
court complaint, and vice versa.
Accordingly, our conclusion that Count II and the dis-
trict court complaint do not arise from substantially the
same operative facts is not at odds with the preclusion
principles incorporated in § 1500 when passed. 5
Finally, our conclusion that Count II and the district
court complaint are not for or in respect to the same
claim, is consistent with the purpose of the predecessor to
§ 1500, which was to prevent claimants from seeking
double recovery by maintaining two suits arising from the
same factual foundation, but pleaded under different legal
theories. See Keene Corp., 508 U.S. at 206–07 (“Congress
did not intend the [§ 1500] to be rendered useless by a
narrow concept of identity providing a correspondingly
liberal opportunity to maintain two suits arising from the
same factual foundation.”). This is not a case where
Trusted Integration is simply repackaging the same
conduct into two distinct legal theories. Instead, Trusted
Integration has asserted two distinct claims, that involve
distinct agreements, whose breaches give rise to distinct
5 We do not adopt these 19th century tests as the
standard by which to measure whether two claims arise
from substantially the same set of operative facts, nor do
we believe Tohono directs us to do so. Rather, we test our
conclusion that the claim in Count II is not barred by §
1500 by reference to these tests simply to confirm that our
conclusion remains true to the principles encompassed in
that statutory provision. Thus, the fact that two suits
arise from different claims under the 19th century tests
does not compel the conclusion that the suits do not arise
from substantially the same operative facts. If two suits
are determined to arise from the same claim under either
of these res judicata tests, however, application of the bar
of § 1500 is likely compelled.
TRUSTED INTEGRATION v. US 22
damages, and which require distinct proofs. For these
reasons, the CFC erred when it concluded that Count II in
the CFC complaint arose from the same operative facts as
Trusted Integration’s district court claims.
CONCLUSION
Because Count I and Count III arise from the same
operative facts, as the claims previously asserted by
Trusted Integration in federal district court, the CFC
properly held that these claims are barred by § 1500. The
CFC erred, however, by dismissing Count II because it
does not arise from substantially the same operative facts
as the district court claims. Accordingly, § 1500 does not
apply to Count II and the CFC has subject matter juris-
diction over that claim.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
REMANDED
COSTS
Each party shall bear its own costs.