author: DYK, Circuit Judge.

text:
    Phyllis E. BANKS, Petitioner v. MERIT SYSTEMS PROTECTION BOARD, Respondent
    2017-1242
    United States Court of Appeals, Federal Circuit.
    Decided: April 18, 2017

      Phyllis E. Banks, Inglewood, CA, pro se.
    Katrina Lederer, Office of the General Counsel, Merit Systems Protection Board, Washington, DC, for respondent. Also represented by Bryan G. Polisuk, Katherine M. Smith.
    Before PROST, Chief Judge, NEWMAN, and DYK, Circuit Judges.
   DYK, Circuit Judge.

Phyllis E. Banks petitions for review of a decision by the Merit Systems Protection Board (“Board”) dismissing her appeal for lack of jurisdiction. We affirm.

Background

Banks was hired by the Department of Veterans Affairs (“VA”) on July 26, 2015, as a Medical Support Assistant. Her appointment was in the excepted service and was subject to a one-year probationary period. On March 2, 2016, within the one-year period, the VA notified Banks that the agency planned to terminate her due to performance issues. Rather than wait for the agency to terminate her, Banks chose to resign her position, effective March 15, 2016.

Banks appealed to the Board, asserting that her resignation was involuntary and therefore constituted a constructive removal. See, e.g., Cruz v. Dep’t of Navy, 934 F.2d 1240, 1244 (Fed. Cir. 1991) (en banc). In an initial decision dismissing Banks’s appeal for lack of jurisdiction, the administrative judge (“AJ”) found that Banks was not preference eligible and that the record contained no evidence of prior federal service. Given these facts and that Banks was still within her probationary period at the time of her alleged removal, the AJ concluded that Banks was not an “employee” under 5 U.S.C. § 7511(a)(1) with the right to appeal adverse actions to the Board. The Board therefore lacked jurisdiction. The AJ further noted Banks’s allegations of a hostile work environment and retaliation, but concluded that these claims did not provide the Board with jurisdiction under 5 U.S.C. § 7702(a) in the absence of non-frivolous allegations of an agency action independently appealable to the Board. See Garcia v. Dep’t of Homeland Sec., 437 F.3d 1322, 1335 (Fed. Cir. 2006) (en banc). Banks petitioned the Board for review.

The Board upheld the AJ’s dismissal of Banks’s appeal for lack of jurisdiction. In doing so, the Board addressed evidence not considered by the AJ indicating that, prior to being hired by the VA, Banks had been currently and continuously employed by the U.S. Postal Service for approximately three years as a Mail Handler. The Board concluded that this prior federal service did not give Banks a right to appeal because the' Postal Service is not an “Executive agency” under 5 U.S.C. § 7511(a)(l)(C)(ii). The Board issued a final order dismissing Banks’s appeal for lack of jurisdiction.

Banks petitioned for review of the Board’s final order. We have jurisdiction under 28 U.S.C. § 1295(a)(9).

Discussion

We review the Board’s jurisdictional determinations de novo and its factual findings for substantial evidence. See Bolton v. Merit Sys. Prot. Bd., 154 F.3d 1313, 1316 (Fed. Cir. 1998). “The Board’s statutory interpretations are reviewed for correctness as a matter of law.” Ellison v. Merit Sys. Prot. Bd., 7 F.3d 1031, 1034 (Fed. Cir. 1993).

The Board’s jurisdiction is limited and extends only to actions “appealable to the Board under any law, rule, or regulation.” 5 U.S.C. § 7701(a). As relevant here, 5 U.S.C. § 7513(d) permits an “employee” to appeal certain adverse actions to the Board, including involuntary resignations that are deemed constructive removals. See, e.g., Cruz, 934 F.2d at 1244. For the purpose of § 7513(d), however, the term “employee” is defined — in relevant part— as “an individual in the excepted service (other than a preference eligible)” who is either “not serving a probationary or trial period,” 5 U.S.C. § 7511(a)(l)(C)(i), or “has completed 2 years of current continuous service ... in an Executive agency,” id. § 7511(a)(l)(C)(ii). An individual may qualify as an “employee” under either § 7511(a)(1)(C)® or (ii). See, e.g., Van Wersch v. Dep’t of Health & Human Servs., 197 F.3d 1144, 1151 (Fed. Cir. 1999).

Because Banks was still serving her one-year probationary period with the VA when she resigned, her only claim to the status of an “employee” turns on whether her three years with the Postal Service qualify as “current continuous service ... in an Executive agency” under § 7511(a)(l)(C)(ii). In this regard, 5 U.S.C. § 105 provides that “[f]or the purpose of [Title 5], ‘Executive agency’ means an Executive department, a Government corporation, and an independent establishment.” The Postal Service is not an “Exee-utive department” or a “Government corporation” as defined in relevant part under 5 U.S.C. §§ 101 and 103. Instead the Postal Service is an “independent establishment of the executive branch of the Government of the United States.” 39 U.S.C. § 201; U.S. Postal Serv. v. Flamingo Indus. (USA) Ltd., 540 U.S. 736, 746, 124 S.Ct. 1321, 158 L.Ed.2d 19 (2004) (“Congress, however, declined to create the Postal Service as a Government corporation, opting instead for an independent establishment.”).

Despite 39 U.S.C. § 201, 5 U.S.C. § 104 provides that the Postal Service is not an “independent establishment” — and therefore not an “Executive agency” — for the purpose of Title 5. Section 104 states that “[f]or the purpose of this title, ‘independent establishment’ means ... an establishment in the executive branch (other than the United States Postal Service ...).” (emphasis added).

Both the designation of the Postal Service as an “independent establishment” in § 201 and the parenthetical exclusion of the Postal Service as an “independent establishment” in § 104 were enacted by Congress in the Postal Reorganization Act (“PRA”). See Pub. L. No. 91-375 § 2, 84 Stat. 719, 720 (1970); id. § 6(c)(2), 84 Stat. at 775. In the PRA, Congress sought to recast “the operation of the [Pjostal [S]er-vice in ‘a business-like way,’” ie., “to make the delivery of the mail a self-supporting enterprise.” Standard Oil Div., Am. Oil Co. v. Starks, 528 F.2d 201, 202 (7th Cir. 1975). In addition to insulating the Postal Service “from the political arena,” the PRA farthered this goal by broadly exempting the Postal Service from federal laws “dealing with the public or [fjederal contracts, property, works, officers, employees, budgets or funds,” subject to certain enumerated exceptions. Id. (quoting 39 U.S.C. § 410(a)); see also, e.g., Beneficial Fin. Co. of N.Y. v. Dallas, 571 F.2d 125, 128 (2d Cir. 1978).

The legislative history of the PRA makes clear that civil service provisions governing personnel at other federal agencies would not apply wholesale to employees of the reorganized Postal Service. See S. Rep. No. 91-912, at 5-7 (1970) (“Senate Report”) (“Employees who have competitive status under the Civil Service Act of 1883 shall automatically achieve career tenure under the postal career system, but thereafter the provisions of title 5 ... shall not apply to officers and employees of the Postal Service.”). In keeping with this goal, the PRA as amended omits the provisions governing adverse-action appeals to the Board from the listing of Title 5 provisions that remain applicable to the Postal Service. See 39 U.S.C. § 410(b)(1). This omission accords with, inter alia, 39 U.S.C. § 1005(a)(1)(A), which makes the adverse-action provisions applicable only to the extent that they are consistent with collective-bargaining agreements that the Postal Service may make with its employees. See id. (referring to “the provisions of chapter 75 of title 5”); see also Senate Report at 5-7 (recommending the “enactment” of collective bargaining agreements).

The exclusion of the Postal Service as an “independent establishment” in § 104 is consistent with the statutory framework of the PRA that makes Title 5 applicable to the Postal Service only in piecemeal fashion. Relying in part on § 104’s exclusion, we have held that preference-eligible Postal Service employees may not seek attorneys’ fees under the fee-shifting provision of the Back Pay Act, 5 U.S.C. § 5596(b)(l)(A)(ii). See Erickson v. U.S. Postal Serv., 759 F.3d 1341, 1347 (Fed. Cir. 2014). In Erickson, we held that the Back Pay Act does not apply to the Postal Service “by its own terms ... because the Postal Service is not an ‘executive agency,’ the term ... used to define the scope of the [Back Pay] Act’s coverage.” Id. We reasoned that although § 105 defines an “executive agency” as encompassing independent establishments, that term “is further defined to mean ‘an establishment in the executive branch (other than the United States Postal Service ...).’ ” Id. at 1348 (quoting 5 U.S.C. § 104). We therefore concluded that “[t]he Postal Service is ... not an ‘executive agency’ within the meaning of title 5 in general and the Back Pay Act in particular.” Id.

We see no reason to depart from our conclusion in Erickson, which held that the provisions of § 104 displace, for the purpose of Title 5, the general characterization of the Postal Service as an “independent establishment” set forth in § 201. Id.; see also, e.g., RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 132 S.Ct. 2065, 2070-71, 182 L.Ed.2d 967 (2012). Accordingly, the Postal Service does not fall into any of the categories that define an “Executive agency” under Title 5, which renders Banks’s service as a Mail Handler not “service ... in an Executive agency” under § 7511(a)(l)(C)(ii). As a consequence, Banks does not qualify as an “employee” with a right to appeal adverse actions to the Board. See Van Wersch, 197 F.3d at 1151.

There being no action appealable to the Board under § 7701, the remaining issues raised in Banks’s appeal — her claims of retaliation and a hostile work environment — lie outside the Board’s jurisdiction. See Garcia, 437 F.3d at 1335. The Board’s final order dismissing Banks’s appeal for lack of jurisdiction is

AFFIRMED

Costs

No costs.

      . The Office of Personnel Management has exercised its authority under 5 U.S.C. § 7514 to promulgate regulations implementing § 7511. Under these regulations, “current continuous employment” is defined as "a period of employment or service immediately preceding an adverse action without a break in Federal civilian employment of a workday.” 5 C.F.R. § 752.402. We have held that this regulation governs the interpretation of the term "current continuous service” under § 7511, see Wilder v. Merit Systems Protection Board, 675 F.3d 1319, 1322-23 (Fed. Cir. 2012), and there is no contention that Banks’s employment with the Postal Service does not qualify as “current continuous service” under the statute.


source: Caselaw Access Project

author: Reyna, Circuit Judge.

license: Public Domain

text:
    FAIRCHILD (TAIWAN) CORPORATION, Appellant v. POWER INTEGRATIONS, INC., Appellee
    2017-1002
    United States Court of Appeals, Federal Circuit.
    April 21, 2017

      Before Lourie, Moore, and Reyna, Circuit Judges.
   ON MOTION

Reyna, Circuit Judge.

ORDER

Fairchild (Taiwan) Corporation moves the court to remand this case to the Patent Trial and Appeal Board with instructions to vacate certain aspects of its final decision in the underlying inter partes reexamination and issue a reexamination certificate. Power Integrations, Inc. opposes the motion. We agree with Fairchild and grant the motion.

Fairchild is the owner of U.S. Patent No. 7,259,972 (“the ’972 patent”). In 2008, Fairchild charged Power Integrations with infringement of three patents, including claims 6, 7, 18, and 19 of the ’972 patent. The jury’s verdict rejected Power Integrations’s argument that the ’972 patent claims were invalid under 35 U.S.C. § 103 in view of Majid and Balakrishnan and found that the patent claims had been infringed. On appeal, this court upheld the jury’s obviousness determination but reversed its findings on infringement, and remanded for further proceedings unrelated to the ’972 patent claims. Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843 F.3d 1315, 1340-42 (Fed. Cir. 2016).

In June 2012, Power Integrations requested inter partes reexamination of claims 1, 2, 5-7, 11, 12, 15, 17-19, 22, 32, 34, and 52-66 of the ’972 patent. The examiner rejected all of the claims in the reexamination, including claims 6, 7, 18, and 19, finding those claims unpatentable under § 103(a) in view of TEA1401T and Balakrishnan. In December 2015, the Board issued a decision affirming the examiner’s rejection of the claims. After the Board denied Fairchild’s request for rehearing, Fairchild appealed to this court in October 2016. Fairchild brought this motion to vacate and remand following the issuance of this court’s mandate in Power Integrations.

Under the version of 35 U.S.C. § 317(b) (2006) that governs this case, no inter partes reexamination proceeding can be brought or “maintained” on “issues” that a party “raised or could have raised” in a civil action arising in whole or in part under 28 U.S.C. § 1338 once “a final decision has been entered” in the civil action that “the party has not sustained its burden of proving the invalidity” of the patent claim. Put simply, “[i]f a defendant brought an invalidity challenge in a district court litigation and was unsuccessful, it is not permitted to bring the same challenge in an inter partes reexamination.” Function Media, L.L.C. v. Kappos, 508 Fed. Appx. 953, 955-56 (Fed. Cir. 2013) (holding that there was no basis for continuing an appeal in light of § 317(b)).

We have held that this restriction applies when “all appeals have terminated.” Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 646 (Fed. Cir. 2011). That is precisely the situation here. The district court entered judgment against Power Integrations, holding that it failed to prove claims 6, 7, 18, and 19 were obvious over Majid and Balakrishnan. This court affirmed the holding, and the time to petition for a writ of certiorari has passed. Moreover, Power Integrations does not dispute that these obviousness grounds could have been raised in the civil action in which it failed to meet its burden.

While it is true that in Power Integrations this court vacated and remanded for additional proceedings, we cannot agree with Power Integrations that this renders the decision not “final” for § 317(b) purposes. Critically, those proceedings are unrelated to the ’972 patent. By its terms, § 317(b) is concerned with a final decision “that the party has not sustained its burden of proving the invalidity of any patent claim.” And here, Power Integrations does not suggest, nor is there any reason to believe, that any unresolved issue on remand would have any effect on the now-final ’972 patent validity determinations.

Nor are we persuaded by Power Integrations’s argument concerning the remaining claims that Fairchild appealed. Fairchild has asked the court to consider its appeal concerning the remaining claims abandoned and to remand only those claims at issue in Power Integrations. Power Integrations fails to offer any persuasive reason why such request should not be granted. While Fairchild is abandoning independent claims 1 and 15, that has no bearing on the application of § 317(b) here.

On remand, the Board is ordered to dismiss the reexamination of claims 6, 7, 18, and 19 of the ’972 patent. Fairchild has abandoned its appeal of the decision affirming the rejection of claims 1, 2, 5, 11, 12, 15, 17, 22, 32, 34, and 52-66, and therefore the Board is further ordered to enter a reexamination certificate invalidating those claims.

Accordingly,

It Is Ordered That:

(1) The motion is granted. The case is remanded for further proceedings consistent with this order.

(2) Each side shall bear its own costs.

(3) Pursuant to Federal Circuit Rule 41, this order shall constitute the mandate.


author: CHEN, Circuit Judge.

text:
    Victoria SNYDER, Petitioner v. DEPARTMENT OF the NAVY, Respondent
    2016-1940
    United States Court of Appeals, Federal Circuit.
    Decided: April 26, 2017

      Michael Graham, Fredericksburg, VA, argued for petitioner.
    Hillary Stern, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Benjamin C. Mizer, Robert E. Kirschman, Jr., Allison Kidb-Miller.
    Before REYNA, LINN, and CHEN, Circuit Judges.
   CHEN, Circuit Judge.

Victoria Snyder appeals the Final Decision of the Merit Systems Protection Board (Board) affirming the decision of the Department of the Navy (Navy) to furlough her for six days between July and September of 2013 as a result of the federal government sequestration of 2013. Because we find no reversible error in the Board’s decision, we affirm.

Background

I.

This case is one of many that arise from the sequestration legislation adopted by Congress (i.e., the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012). See, e.g., Calhoun v. Dep’t of the Army, 845 F.3d 1176, 1177 (Fed. Cir. 2017); Nat’l Fed’n of Fed. Emps., Local 1442 v. Dep’t of the Army, 810 F.3d 1272, 1273-75 (Fed. Cir. 2015) (NFFE); Einboden v. Dep’t of the Navy, 802 F.3d 1321, 1323 (Fed. Cir. 2015). As a result of this legislation, the 2013 budget of the Department of Defense (DOD) was cut by $37 billion approximately halfway through Fiscal Year 2013. DOD took a number of steps to address the dramatic budgetary shortfall for the fiscal year, including'reprogramming funds, reducing facility maintenance, and eliminating some military training exercises.

On May 14, 2013, the Secretary of Defense (SECDEF) issued a memorandum directing DOD managers to pre-pare to furlough most DOD civilian employees for up to eleven workdays in fiscal year 2013. As explained in the SECDEF memorandum, sequestration reduced DOD operation and maintenance (O & M) accounts that pay many civilian DOD employees, and although DOD considered and implemented various actions to reduce the budgetary shortfall, a shortfall nevertheless remained which would be addressed through furloughs of civilian employees. The memorandum provided that “[f]ur-loughs will be imposed in every military department as well as almost every agency and in our working capital funds.” J.A. 183. In an attachment to the memorandum, the SECDEF provided a list of approved furlough exceptions, which included employees deployed to a combat zone, those whose jobs are necessary to protect safety of life and property, Navy Shipyard employees, National Intelligence Program employees, Foreign Military Sales employees, political appointees, non-appropriated fund instrumentality (NAF) employees, foreign national employees, and various types of employees not paid directly by DOD-Military accounts.

Subsequently, on June 21, 2013, a bipartisan group of thirty-one members of Congress sent a letter to the Secretary of Defense expressing concern about the determination that civilian workers at entities funded through Defense working capital funds (WCFs) would also be subject to furlough. WCFs are created and controlled by the Office of the SECDEF. 10 U.S.C. § 2208(a), (b), (e). They function “entirely from the fees charged for the services [provided] consistent with [its] statutory authority.” Einboden, 802 F.3d at 1323 (citing U.S. Gov’t Accountability Office, GAO-05-734SP, A Glossary of Terms Used in the Federal Budget Process 101 (2005)). After receiving initial working capital through appropriation, WCF entities are self-supporting and function from the fees charged for the services they provide to their customers. NFFE, 810 F.3d at 1274. The primary customers of WCF entities are other DOD entities that transfer their own congressionally-appropriated funds to make “purchases” from WCFs. Id. Robert Hale, Under Secretary of Defense (Comptroller), on behalf of the SEC-DEF, responded to the congressional inquiry regarding WCFs in a July 2013 statement to Congress, explaining that “furloughs of all DOD civilians will save about $2 billion in fiscal year 2013, including more than $500 million associated with reduced personnel costs in working capital fund activities. These working capital fund personnel savings provide us the flexibility to adjust maintenance funding downward to meet higher-priority needs.” J.A. 85-86. Thus, in accordance with the SECDEF directive, implementation of the furloughs generally proceeded across DOD, including WCF entities.

II.

Ms. Snyder was a civilian mechanical engineer at the Naval Surface Warfare Center, Dahlgren Division (Dahlgren) at the time of the sequestration. Dahlgren is a Navy WCF entity. See Einboden, 802 F.3d at 1323. On May 28, 2013, Ms. Snyder — as well as numerous other Dahlgren employees — received a Notice of Proposed Furlough indicating that the Navy planned to furlough her for a period of up to eleven workdays days because of “the extraordinary and serious budgetary challenges^] ... the most serious of which is the sequester.” J.A. 834.

At that time, Ms. Snyder worked full-time on a Lockheed Martin Advanced Shipboard Weapons Control (ASWC) project to modify existing weapons control software. The ASWC project was governed by a Cooperative Research and Development Agreement (CRADA) between Dahlgren and Lockheed Martin, signed in September 2012. Pursuant to the ASWC CRADA, both parties would provide expertise and engineering support. Lockheed Martin was solely responsible for funding the project, providing $2.6 million in 2012, paid to the Treasurer of the United States. According to the CRADA’s terms, any unused funds remaining at the completion of the project in 2015 were to be remitted to Lockheed Martin following Dahlgren’s submission of a final fiscal report.

On May 30, 2013, Lockheed Martin sent a letter to the Navy requesting that the Dahlgren employees supporting the ASWC CRADA — including Ms. Snyder — be exempt from furlough. The letter argued that the project was fully funded by Lockheed Martin Independent and Research Development (IRAD) funds and not Federal appropriations, and therefore, it “should be viewed as third-party funding like Foreign Military Sales (FMS) funding [one of the express exceptions identified in the SECDEF memorandum].” J.A. 933. Ms. Snyder filed a written reply on June 10, 2013, to the proposed furlough, echoing Lockheed Martin’s view that her work for the Lockheed Martin-funded ASWC CRA-DA should be exempted from furlough like the listed SECDEF exceptions. In a letter dated June 24, 2013, the Navy deciding official responded to Ms. Snyder, denying her request.

III.

Ms. Snyder petitioned the Board for review, asserting that the Navy had improperly furloughed her. Her case was consolidated with thirty-nine other furloughed Dahlgren employees. An administrative judge (AJ) conducted a consolidated hearing on July 8, 2015.

For her part, Ms. Snyder argued that, because she was working full-time in support of the Lockheed Martin-funded ASWC CRADA, her situation was akin to those exceptions identified by the SEC-DEF. In support of her argument, Ms. Snyder requested the AJ take official notice of the Federal Technology Transfer Act of 1986, codified at 15 U.S.C. §§ 3701 et seq., as well as DOD Instruction 5535.8, “DOD Technology Transfer (T2) Program,” May 14, 1999, which prescribes procedures for implementing technology transfer programs, including CRADAs. She argued that these provisions collectively (i) prohibit the federal government from providing funds to a non-government CRADA participant; and (ii) obligate the government to maintain separate and distinct accounts to track CRADA funds. Thus, she argued that she was not paid out of government-appropriated funds, like typical WCF employees, and her work should have been exempted from the furlough because her furlough could not have assisted in reducing DOD’s budgetary shortfall.

Ms. Snyder also argued that the Navy improperly provided some, but not all, furloughed employees assigned to work on the ASWC CRADA with an opportunity to earn overtime pay to mitigate the economic impact of the furlough. In support, she offered the testimony of Mr. Larry Fonte-not, a fellow ASWC CRADA employee. Mr. Fontenot testified that he and others working on the project were permitted to work overtime during the furlough time period and that he believed this was a result of a compromise struck by management to make up for the furlough days. This “compromise,” Ms. Snyder argued, demonstrates that the Navy did not apply the furlough in a fair and even manner.

For its part, the Navy explained that all Dahlgren employee salaries — regardless of funding source — are paid directly from the WCF. Ms. Kathy Clark, Deputy Comptroller for Dahlgren, testified that when a WCF employee like Ms. Snyder performs work on a job requested by a customer, the customer does not directly pay the employee’s salary; rather, the WCF employee’s salary is paid from the WCF..The Navy argued that by not paying Ms. Snyder’s salary for six days, it realized a savings in the WCF at the time of the furlough, just as with every other employee paid from the WCF. Thus, the Navy explained, even if it would be required to pay back Lockheed Martin certain monies in a later, subsequent fiscal year — upon the completion of the project — the Navy still realized an immediate benefit at that specific point in time in 2013 in responding to the sequestration.

IV.

On September 11, 2015, the AJ issued an Initial Decision in the consolidated case and found Snyder’s furlough was a reasonable management solution to the shortage of funds caused by sequestration and therefore promoted the efficiency of the service. The AJ acknowledged that Ms. Snyder cited “numerous agency regulations concerning the proper administration of CRADA funds,” J.A. 23, but credited the testimony of the Navy witnesses that all Dahlgren employees, including CRADA employees, are paid from the WCF. Thus, in that relevant sense, the AJ concluded, “she is no different from other employees who were furloughed.” Id.

The AJ also concluded that there was no evidence to support Ms. Snyder’s claim that the furlough was unfairly applied. The AJ found that Mr. Fontenot’s testimony established only that he “assumed” the Navy paid him and others the requested overtime to mitigate the effects of the furlough. J.A. 24. The AJ also found there was no evidence that Ms. Snyder even requested overtime pay, further undercutting her claim that similarly situated employees were treated differently. Id.

Ms. Snyder filed a petition for review with the Board. On March 18, 2016, the Board issued a Split Vote Order, indicating that the two members of the Board could not agree upon a disposition. As a result, the AJ’s Initial Decision became the Final Decision of the Board. 5 C.F.R. § 1200.8(b). Ms. Snyder now seeks review of the Board’s Final Decision. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).

Discussion

I.

Our authority to review a decision of the Board is limited by statute. We may set aside the Board’s decision only if it is “(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence.” 5 U.S.C. § 7703(c); Whitmore v. Dep’t of Labor, 680 F.3d 1353, 1366 (Fed. Cir. 2012). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Berlin v. Dep’t of Labor, 772 F.3d 890, 894 (Fed. Cir. 2014).

An agency may furlough an employee for lack of work or funds or other non-disciplinary reasons. 5 U.S.C. §§ 7511(a)(5), 7512(5). Because furloughs of thirty days or less are deemed adverse employment actions, the agency must demonstrate that the furlough “will promote the efficiency of the service.” NFFE, 810 F.3d at 1277 (quoting 35 U.S.C. § 7513(a)). This means that the agency’s decision must “be a reasonable management solution to the financial restrictions placed on the agency” and that the agency must “determine which employees to furlough in a fair and even manner.” Einboden, 802 F.3d at 1325; 5 U.S.C. § 7513(a); 5 C.F.R. § 1201.56(a)(1)(ii) (2015).

II.

Ms. Snyder first takes aim at the Board’s “reasonable management solution” analysis.

A.

She contends, as an initial matter, that the AJ’s decision faded to discuss the controlling law and facts and, therefore, did not constitute a reasoned opinion providing an adequate basis for review under the Board’s regulations. 5 C.F.R. § 1201.111(b)(1); Spithaler v. Office of Pers. Mgmt., 2 MSPB 2, 1 M.S.P.R. 587, 588-89 (1980). Ms. Snyder argues that the Initial Decision “devoted a negligible 359 words concerning the facts and the law pertaining to the CRADA.” Brief of Petitioner at 27. Moreover, she asserts the decision also “fails to summarize [Ms. Snyder’s] Post-Hearing Brief that thoroughly discusses .the Federal Technology Transfer Act.” Id. at 28.

We reject Ms. Snyder’s argument regarding the sufficiency of the AJ’s analysis for multiple reasons. In Spithaler, on which Ms. Snyder relies, the Board held that a three-sentence initial decision, which simply announced the administrative judge’s disposition of the case without any analysis, failed to satisfy the regulatory requirement of 5 C.F.R. § 1201.111(b)(1). 1 M.S.P.R. at 588-89. The Initial Decision’s analysis in this case was qualitatively more meaningful compared to the complained-of analysis in Spithaler. Within the 26-page opinion, the AJ dedicated multiple pages to addressing Ms. Snyder’s specific claims and its reasoning for upholding Ms. Snyder’s furlough.

We also reject Ms. Snyder’s argument that the AJ was required to summarize all of the arguments raised in her briefing. The mere fact that the AJ did not recount these arguments as thoroughly as Ms. Snyder would like does not mean that the AJ did not sufficiently consider them. See, e.g., Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016) (noting that an agency is “not require[d] ... to address every argument raised by a party or explain every possible reason supporting its conclusion”); Gonzales v. West, 218 F.3d 1378, 1381 (Fed. Cir. 2000) (“[AJbsent specific evidence indicating otherwise, all evidence contained in the record ... must be presumed to have been reviewed by [the agency].”); Medtronic, Inc. v. Daig Corp., 789 F.2d 903, 906 (Fed. Cir. 1986) (‘We presume that a fact finder reviews all the evidence presented unless [the fact finder] explicitly expresses otherwise.”).

Here, the AJ identified the principal legal issue, summarized the facts material to resolving that issue, and made clear the reasoning that led the AJ to reject Ms. Snyder’s claim. The Initial Decision recognized that the funding source for the CRADA originated from a non-government entity, i.e., Lockheed Martin. It also acknowledged the regulations concerning the proper administration of CRADA funds. The AJ, however, found these considerations were not dispositive, because the Navy’s unrebutted evidence showed that Ms. Snyder’s salary, like all other WCF employees’ salaries, was paid directly from the WCF, regardless of funding source for the project to which she was presently assigned. The AJ therefore reasoned that, for reasons of responding to the sequestration, Ms. Snyder, as a WCF employee, was no different from other WCF employees who were furloughed. We conclude that the AJ’s analysis sufficiently articulates its rationale and the factual underpinnings supporting its decision to affirm Ms. Snyder’s furlough.

B.

Ms. Snyder next argues that the decision to affirm her furlough is nevertheless unsupported by substantial evidence. According to Ms. Snyder, the above-cited statutory and regulatory authority and the plain terms of the CRADA establish that the funds used to pay her salary did not involve an appropriation of the United States, but rather, they originated from non-Federal funds that cannot be spent for a non-CRADA purpose. Further, Ms. Snyder argues the Navy was required to return to Lockheed Martin any excess funds at the end of the CRADA project, which underscores that the funds belong to Lockheed Martin, not the government. Ms. Snyder therefore contends that, just as with the already recognized SECDEF exceptions, neither Dahlgren nor the Navy nor DOD could save any money by furloughing her.

Even accepting that the ASWC CRADA was funded solely with non-appropriations monies, we disagree that the funding source is dispositive of the question on appeal. Rather, we agree with the AJ that the fact Ms. Snyder was a WCF employee directly paid from the WCF, bears considerable weight on the reasonableness of the agency’s furlough decision.

Agencies have broad discretion to take actions to control spending, preserve flexibility, and adjust priorities in response to sequestration. “We give wide berth to agency decisions as to what type of adverse action is necessary to ‘promote the efficiency of the service,’ provided that the agency’s decision bears some nexus to the reason for the adverse action.” Einboden, 802 F.3d at 1325-26 (quoting 5 U.S.C. § 7513(a)). We have also previously explained that, when faced with sequestration, it is reasonable for an agency “to consider its budget situation holistically,” rather than isolating the situation of each individual organization or component. Id. at 1324-25; NFFE, 810 F.3d at 1282.

In both Einboden and NFFE, this court upheld the decision to furlough WCF employees who, like Ms. Snyder, worked at WCF entities and were furloughed in accordance with the SECDEF’s direction to furlough WCF employees. In both cases, endorsing the holistic view of budget management, we explained that the decision to furlough employees paid by a WCF was a reasonable management solution to the budget shortfall because, among other reasons, preserving money in the WCFs generally provided DOD with the flexibility to meet higher priority needs during that critical time period. See Einboden, 802 F.3d at 1325; NFFE, 810 F.3d at 1282.

Here too there is a sufficient nexus between the decision to furlough Ms. Snyder and the sequestration. DOD was faced with a sudden, dramatic, agency-wide funding shortfall. As part of the measures to adapt to this shortfall, DOD implemented agency-wide furloughs of civilian employees with only limited exceptions, which DOD estimated would save it about $2 billion. The Navy’s decision to furlough WCF employees was a reasonable management solution consistent with the SEC-DEF’s direction. Even though Ms. Snyder was working at the time of her furlough on a project based on funds that originated from a non-government entity, she, like the other employees at Dahlgren, was a WCF employee and, critically, her salary was paid from the WCF, just like the other furloughed Dahlgren employees. Not paying Ms. Snyder’s salary on those six days in 2013 thus preserved money in the WCF, which in turn provided DOD with added flexibility to manage its budget shortfall that year, just as with the furlough of every other WCF employee.

We find unpersuasive Ms. Snyder’s argument that the government would not realize any savings from her furlough. While it is true that, at the completion of the CRADA project in 2015, any unused monies would return to Lockheed Martin, not the Navy, that does not change our conclusion. “We ... must base our review of the agency’s decision on the circumstances it faced when the furlough deei-sions were made, and not on events that did or did not occur at a later date.” NFFE, 810 F.3d at 1281. During the relevant time period in May 2013, it was reasonable for the Navy to determine that savings from furloughing all WCF employees — including those currently working on CRADA projects — would be part of an overall effort to reduce expenditures in the face of de-creased funding resulting from budget reductions during that fiscal year. And even if the savings realized by the WCF were only temporary (because the Navy could potentially have to return unused monies to Lockheed two years later in 2015), the Navy still derived a benefit by not having to pay Ms. Snyder’s salary during that critical time period.

Finally, we reject Ms. Snyder’s additional argument, raised for the first time in her reply brief, that her situation fits within the definition of exception (i) from the SECDEF memorandum, pertaining to funding sources outside of the DOD-military budget. This argument was waived. It is well-established that an agency is not required to respond to arguments that were never made to the agency. For example, in Department of Transportation v. Public Citizen, 541 U.S. 752, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004), the Supreme Court declined to consider a challenge to an agency action on the basis that the agency “fail[ed] properly to consider possible alternatives,” where the challengers “did not raise these particular objections” to the agency. Id. at 764-65,124 S.Ct. 2204 (“Respondents have therefore forfeited any objection to the [action] on the ground that it failed adequately to discuss potential alternatives to the proposed action.”). Ms. Snyder argued below only that her situation was similar in kind to those SEC-DEF exceptions with funding sources from outside of the government, including exceptions (e) (Foreign Military Sales) and (g) (nonappropriated funds), because furloughing her would similarly not assist DOD in reducing its budgetary shortfall. For the reasons explained above, the AJ correctly rejected that argument and concluded it was reasonable to treat Ms. Snyder like the other WCF employees, and doing so would in fact help DOD respond to its budget shortfall.

We find the argument lacking in any event. SECDEF exception (i) pertains only to “employees who are not paid directly by accounts included in the Department of Defense-Military (subfunction 051) budget.” J.A. 186. The evidence presented below established that Ms. Snyder, as a WCF employee, was paid directly from the WCF. And Ms. Snyder presents no e\d-dence to support the conclusion that the Navy WCF is outside of the DOD (sub-function 051) budget. Nor could she, as the various DOD WCFs were expressly targeted for furloughs by the very same SECDEF memorandum that established exception (i). Thus, the AJ did not err in failing to find Ms. Snyder should have been excepted from the furlough pursuant to SECDEF exception (i).

We therefore conclude that substantial evidence supports the AJ’s decision that the furlough of Ms. Snyder was a reasonable management solution to the financial restrictions placed on the Navy due to sequestration and thus promoted the efficiency of the service.

III.

Ms. Snyder argues that the Board also misevaluated the evidence demonstrating that the Navy failed to apply the furlough in a fair and even manner. According to Ms. Snyder, her testimony and Mr. Fontenot’s testimony that some ASWC CRADA employees received overtime was both unrebutted and dispositive. She argues that the AJ found against her only because the Navy was permitted to introduce additional evidence on this score after the record was closed, in violation of Board regulation 5 C.F.R. § 1201.58(c) (2015).

As an initial matter, we see no error in the AJ’s finding that Mr. Fontenot’s testimony amounted to nothing more than speculation that the approval of specific overtime requests was somehow related to employee furloughs. Moreover, Ms. Snyder presented no evidence that any of the furloughed ASWC CRADA employees had overtime requests denied and she admitted to never actually requesting overtime during the relevant time period. Thus, as the AJ recognized, Ms. Snyder’s proffered testimony that those ASWC CRADA employees received overtime when requested does not, without more, establish that similarly treated employees were treated differently.

We also ascertain no reversible error in the Board’s admission of the Navy’s rebuttal evidence. “Procedural matters relative to discovery and evidentiary issues fall within the sound discretion of the board and its officials.” Curtin v. Office of Pers. Mgmt., 846 F.2d 1373, 1378 (Fed. Cir. 1988). We “will not overturn the board on such matters unless an abuse of discretion is clear and is harmful.” Id. Ms. Snyder does not attempt to explain how the Board’s admission of this evidence over her objection resulted in a clear and harmful abuse of discretion. And, in any event, the AJ explained “even if the [Navy] had not provided this evidence, my finding would be no different due to the testimony, provided by [Ms. Snyder] and Mr. Fonte-not at the hearing.” J.A. 24 n.9. Thus, even if the AJ erred in admitting the evidence, any such error would be harmless. Substantial evidence supports the AJ’s dismissal of Ms. Snyder’s claim without regard to the Navy’s rebuttal evidence. Thus, we conclude the Board did not commit reversible error in affirming Ms. Snyder’s furlough.

Conclusion

For the foregoing reasons, we affirm the judgment of the Board upholding Ms. Snyder’s furlough.

AFFIRMED

Costs

No costs.

      . The Budget Control Act of 2011, Pub. L. No. 112-25, §§ 101-103, 125 Stat. 240, 241-46, and the American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, § 901, 126 Stat. 2313, 2370, made amendments to the Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L. No. 99-177, 99 Stat. 1038, which is codified in pertinent part at 2 U.S.C. §§ 901 et seq. The amendments established spending limits for agencies of the federal government and required automatic "sequestration” under certain statutory conditions. See generally 2 U.S.C. §§ 901-03. The American Taxpayer Relief Act required the President to issue a sequestration order on March 1, 2013, in the middle of Fiscal Year 2013. 126 Stat. at 2370. On that date, President Obama issued a sequestration order requiring reductions in spending from most federal budget accounts for Fiscal Year 2013. Sequestration Order, 78 Fed. Reg. 14,-633 (Mar. 1, 2013).

      . " '[F]urlough' means the placing of an employee in a temporary status without duties and pay because of lack of work or funds or other nondisciplinary reasons.” 5 U.S.C. § 7511(a)(5).

      . Because of other cost-cutting measures and reprogramming requests approved by Congress, DOD was able to close the budget gaps more easily than it had initially anticipated. On August 6, 2013, the SECDEF announced that the furlough of civilian defense employees would be reduced from eleven to six days.

      . Ms. Snyder also takes issue with the reliability of Ms. Clark’s testimony that all Dahl-gren employees are paid directly from the WCF, regardless of funding source. Credibility determinations made by the Board are “virtually unreviewable.” Hambach v. Dep’t of Treasury, 796 F.2d 430, 436 (Fed. Cir. 1986). Because Ms. Snyder's proffered evidence regarding the treatment of CRADA funds does not directly contradict Ms. Clark’s testimony that all Dahlgren employees are paid from the WCF, the AJ’s decision to credit Ms. Clark’s testimony is supported by substantial evidence.

      . That regulation provides, in pertinent part:
      (c) Once the record closes, additional evidence or argument will ordinarily not be accepted unless:
      (1) The party submitting it shows that the evidence or argument was not readily available before the record closed; or
      (2) It is in rebuttal to new evidence or argument submitted by the other party just before the record closed. .


author: WALLACH, Circuit Judge.

text:
    8X8, INC., Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
    2016-1959
    United States Court of Appeals, Federal Circuit.
    Decided: April 27, 2017

      H. Christopher Bartolomucci, Kirkland & Ellis LLP, Washington, DC, argued for plaintiff-appellant. Also represented by Christopher George Michel.
    Judith Ann Hagley, Tax Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Teresa E. McLaughlin, Caroline D. Ciraolo.
    Before WALLACH, CHEN, and HUGHES, Circuit Judges.
   WALLACH, Circuit Judge.

Appellant 8x8, Inc. (“8x8”) sued Appel-lee the United States (“Government”) in the U.S. Court of Federal Claims, seeking a refund of more than $1 million in Federal Communications Excise Tax (“FCET” or “excise tax”). The parties subsequently filed cross-motions for summary judgment, and the Court of Federal Claims denied 8x8’s Motion and granted the Government’s Cross-Motion, thereby denying 8x8’s claim for a refund of the FCET remitted. See 8x8, Inc. v. United States, 125 Fed.Cl. 322, 331 (2016).

8x8 appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (2012). We affirm.

Background

I. 8x8’s VoIP Services

8x8 is a provider of local and long-distance telephone services over a broadband internet connection via Voice over Internet Protocol (“VoIP”). This service allows customers to make and receive calls over the internet via a digital terminal adapter (“DTA”), which contains 8x8’s proprietary firmware and software. J.A. 246. Part of 8x8’s VoIP service included the use of other transmission services from Level(3) and Global Crossing — i.e., traditional telecommunications carriers. J.A. 246. The customer’s call would be switched over to Level(3)’s or Global Crossing’s traditional lines and circuits when necessary. J.A. 365-66. However, 8x8 did not pay any FCET to Level(3) or Global Crossing because it provided them with an “exemption certificate[ ],” which “represented] that [8x8] was a provider of telephone service and was exempt from the excise tax in [I.R.C.] § 4253 [ (2006) ].” J.A. 246.

Subscribing to a plan offered by 8x8 included several steps. First, customers seeking access to 8x8’s VoIP service needed to purchase a DTA. J.A. 246. After making the necessary physical connections to the DTA, the customer then “went to 8x8’s website and signed up for a subscription plan,” which included “accept[ing] 8x8’s Terms and Conditions of Service.” J.A. 247. These Terms and Conditions provided that 8x8 would collect the FCET from its customers and remit the FCET to the Internal Revenue Service (“IRS”) for the customers’ use of 8x8’s VoIP domestic telephone service. See J.A. 259 (“8x8 will ... bill all charges invoiced to End User’s account.... Such charges shall include ... monthly service fees, ... toll charges, taxes and any other applicable charges.”), 260 (“Prices for the Services do not include any ... sales, use, value added, excise, federal, state, local, public utility or other similar taxes. All such taxes shall be paid by the End User and will be added to any amounts otherwise charged[,] unless [the] End User provides 8x8 with an appropriate exemption certifícate.”). The subscription plans included (1) an unlimited local and long distance plan permitting calls that were within “reasonable personal use” for a set fee, J.A, 247; or (2) plans for a set amount of minutes at a set price, J.A. 246. After selecting a subscription plan, “the customer would provide 8x8 with a credit card which would be used to pay all charges, fees, and taxes for the 8x8 service.” J.A. 247. Finally, “the customer would be provided with a 10 digit code that would be used to activate the 8x8 service.” J.A. 247.

II. Relevant History of the FCET

8x8’s VoIP services were subject to the FCET. J.A. 246; see I.R.C. § 4251(a)(1) (imposing the FCET on “communications services”); id. § 4251(b)(1) (defining “communications services”). Beginning in 2005, several appellate courts held that § 4251 did not permit the IRS to tax telephone services that billed customers based on a fixed per-minute, non-distance-sensitive rate. See, e.g., Reese Bros., Inc. v. United States, 447 F.3d 229, 234 & n.2 (3d Cir. 2006) (collecting cases).

In response to these rulings, the IRS ceased collecting the FCET on “amounts paid for time-only service.” I.R.S. Notice 2006-50, § 1(a), 2006-25 I.R.B. 1141 (“2006 Notice”); see I.R.S. Notice 2007-11, 2007-5 I.R.B. 405 (clarifying and modifying the 2006 Notice). The IRS also stated that VoIP services were non-taxable, 2006 Notice, § 3(a), (d), and established a process for taxpayers to seek a refund of the FCET that had been exacted on non-taxable services during the period between February 2003 and August 2006, id. § 5(d). Finally, the 2006 Notice stated that a “collector” can request a refund of the FCET collected from customers during the relevant period if the collector either (1) “establishes that it repaid the amount of the tax to the person from whom the tax was collected”; or (2) “obtains the written consent of such person to the allowance of such credit or refund.” Id. § 5(d)(4)(i); see I.R.C. § 6415(a) (similar).

8x8 subsequently filed a refund claim with the IRS for the FCET imposed between March 2003 to July 2006. J.A. 245-46. After its refund claim was denied in part, 8x8 exhausted its administrative remedies with the IRS. J.A. 232-42. 8x8 then sued the Government in the Court of Federal Claims, seeking a refund of more than $1 million for the FCET remitted to the IRS. J.A. 19-29. The Court of Federal Claims concluded that 8x8 lacked standing and granted the Government’s motion for summary judgment. 8x8, 125 Fed.Cl. at 330-31.

Discussion

The parties have stipulated to the material facts of this case. See J.A. 245-48. The legal issue in this appeal is whether 8x8 is entitled to claim a refund of the FCET. After articulating the applicable standard of review and legal framework, we address this issue.below.

I. Standard of Review and Legal Framework

We review the Court of Federal Claims’s “grant of summary judgment de novo.” Frankel v. United States, 842 F.3d 1246, 1249 (Fed. Cir. 2016) (citation omitted). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Court of Federal Claims Rule 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine dispute exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A material fact is one that “might affect the outcome” of the case. Id. The party seeking summary judgment has the initial burden of establishing that there is no genuine dispute as to any material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

II. The Court of Federal Claims Did Not Err in Granting Summary Judgment in Favor of the Government

The Court of Federal Claims stated that “the material facts have been stipulated by the parties and are not in dispute” and that the “sole issues before the [c]ourt are legal ones.” 8x8, 125 Fed.Cl. at 327. The Court of Federal Claims then moved to the legal issue and concluded that 8x8 lacked standing to seek a refund because it did not pay the FCET; it only collected the FCET from paying customers and then remitted that money to the IRS. See id. at 327-28. In reaching this conclusion, the Court of Federal Claims noted “the undisputed facts establish that 8x8 did not bear the economic burden of the taxes it remitted to IRS.” Id. at 328; see J.A. 247 (stipulating to the language of the “TAXES” provision included in the Terms and Conditions).

8x8 argues that “under the special statutory rules governing prepaid arrangements, 8x8 is not a collector.” Appellant’s Br. 45. It contends that “the excise tax was ‘treated as paid,’ when 8x8 received the transfer of services from Level[ (3) ] and Global Crossing, and 8x8 was ‘the person paying for such services.’ ” Id. at 46 (quoting I.R.C. § 4251(a)(2), (d)(1)(B)). According to 8x8, it “was the ‘transferee’ ] and thus the ‘person liable for the tax.’ ” Id. (quoting 26 C.F.R. § 49.4251-4(d)(l)). 8x8 further argues that I.R.C. § 6415 does not bar its refund because “8x8 is not a ‘person who collected’ excise tax,” id. at 49; instead, 8x8 “paid the tax” and “pass[ed] along and separately state[d] the amount of accrued federal excise tax on its customers’ bills,” id. at 51. Thus, it contends that this passing along is “an utterly commonplace economic transaction in which a retailer subjected by the [GJovernment to higher costs of doing business raises customer prices.” Id.

“[T]he ultimate question presented for decision, upon a claim for refund, is whether the taxpayer has overpaid his tax.” Lewis v. Reynolds, 284 U.S. 281, 283, 52 S.Ct. 145, 76 L.Ed. 293 (1932), modified, 284 U.S. 599, 52 S.Ct. 264, 76 L.Ed. 514 (1932) (internal quotation marks and citation omitted). To sue for a refund, “it is incumbent upon the claimant to show that the United States has money which belongs to him.” Id. (internal quotation marks and citation omitted). I.R.C. § 6415 allows a “person who collected the tax and paid it” to the IRS to seek a refund only if “such person establishes ... that he has repaid the amount of such tax to the person from whom he collected it[ ] or obtains the consent of such person to the allowance of such credit or refund.” I.R.C. § 6415(a).

We agree with the Court of Federal Claims that 8x8 is a collector of the FCET and, as a collector, 8x8 has failed to fulfill the necessary requirements of I.R.C. § 6415(a). The overwhelming weight of the record demonstrates 8x8’s role as a collector and refutes 8x8’s argument to the contrary. See J.A. 139 n.l (IRS stating in the Notice of Proposed Adjustment that “8x8 admitted ... that it collected an additional 3% [excise tax] from its [customers] in addition to the monthly service fee” and that 8x8’s Fiscal Year 2006 Form 10-K filing with the U.S. Securities and Exchange Commission stated “that it ceased ‘collecting and remitting’ Federal Excise Taxes in June 2006 pursuant to the [U.S.] Treasury Department’s news release addressing collection of the [excise tax]”), 348 (Form 10-K filing stating that 8x8 “do[es] not collect state and federal telecommunications taxes, other than federal excise tax” (emphasis added)), 389 (8x8’s Chief Financial Officer admitting the same). The Terms and Conditions to which customers agreed also states that “[p]rices for the Services do not include any ... excise ... or other similar taxes. All such taxes shall be paid by End User and will be added to any amounts otherwise charged to End User....” J.A. 247; see J.A. 248 (“Each of the monthly invoices separately stated the [excise tax] applicable to the telephone service used by the customer that month.”).

The record also demonstrates that 8x8 failed to fulfill the requirements of I.R.C. § 6415(a) because 8x8 neither refunded its customers the FCET nor obtained their consent to seek the refund. First, the record shows that 8x8 did not refund the FCET that it collected from its customers. See J.A. 247 (“[A]pplicable taxes may not be refundable.”). The only discussion of refunding money to customers appears when 8x8 addresses its obligations to customers when services are terminated. Yet, this only covers refunding money used to purchase a DTA and any money paid for services provided by 8x8; it does not cover the FCET. See J.A. 247 (“In the event a customer terminated its 8x8 service within the first 30 days, 8x8 would refund the purchase price of the DTA to the customer and the customer would return the DTA to 8x8.”), 247-48 (“If a customer decided to terminate its prepaid service during the month, it was 8x8’s policy to continue the service for the remainder of the month which had already been prepaid. Occasionally, if a customer requested a refund, 8x8 would refund the monthly charge to the customer, to avoid arguing over the service fee.”). Second, 8x8 does not dispute that it did not obtain its customer’s consent to seek a refund. See generally Appellant’s Br.

Moreover, 8x8 confirmed its intention to keep any FCET it may be refunded. See Oral Arg. at 0:32-0:53, http:// oralarguments.cafc.uscourts.gov/default. aspx?fl=2016-1959.mp3. In fact, 8x8 and the Government stipulated “[a] majority of 8x8’s customers probably received refunds from the IRS of the [excise tax] that 8x8 collected from them during the period.” J.A. 248. This stipulation supports the conclusion that 8x8 did not obtain consent from its customers to seek the FCET. The record unquestionably demonstrates that 8x8 failed to comply with the requirements of I.R.C. § 6415(a) and, thus, may not seek a refund pursuant to § 6415(a). See Lewis, 284 U.S. at 283, 52 S.Ct. 145.

Although 8x8 fails to meet the requirements of I.R.C. § 6415(a), it may nevertheless obtain a refund if it had “borne the economic burden of the taxes by paying them out of [its] own pocket and had not collected them from members.” Epstein v. United States, 174 Ct.Cl. 1158, 1174, 357 F.2d 928 (1966) (footnote omitted). The question that must be answered here is whether 8x8 passed the expense on to its customers or bore the burden of the tax by paying it. See Gumpert v. United States, 155 Ct.Cl. 721, 725, 296 F.2d 927 (1961) (“If [the collector] has passed this expense on to [its] customers, then [the collector] does not have the proper standing to maintain” its refund suit.); see also United States v. Jefferson Elec. Mfg. Co., 291 U.S. 386, 402, 54 S.Ct. 443, 78 L.Ed. 859 (1934) (“If [the taxpayer] has shifted the burden to the purchasers, they and not he have been the actual sufferers and are the real parties in interest; and in such a situation[,] there is nothing arbitrary in requiring, as a condition to refunding the tax to him, that he give a bond to use the refunded money in reimbursing them.”).

8x8 contends that it paid the excise tax by “raising] customer prices.” Appellant’s Br. 51. Whether an increase in pricing is tantamount to the payment of a tax generally presents a question of fact, see Worthington Pump & Mach. Corp. v. United States, 129 Ct.Cl. 87, 93, 122 F.Supp. 843 (1954), and the parties stipulated to the facts relevant here. Our predecessor court in Worthington, the seminal case on this question, laid out several factors to consider. For example, “[c]ourts have laid great stress on an increase in price associated with the imposition of tax as indicating a shift of the tax burden” to the customers. Id. at 93-94, 122 F.Supp. 843 (citations omitted). “In some cases the price increase was explained by other causes, such as a rise in other costs, and the tax was held not to have been passed on.” Id. at 94, 122 F.Supp. 843 (citations omitted). “Where there was no increase in prices and there were other facts indicating that the seller had absorbed the tak, it was held that the tax was absorbed.” Id. (citations omitted). Finally, an intent or attempt “to pass on the tax” can be “taken as some evidence of its actual occurrence” when better evidence is absent. Id.

A comparison of these principles against the undisputed record reveals that 8x8 did not bear the economic burden of the FCET. Rather, the record demonstrates that “[pjrices for the Services do not include ... any excise, federal, ... or other similar taxes.” J.A. 247. The customer “would first have to accept 8x8’s Terms and Conditions of Service” and “[tjhen the customer would provide 8x8 with a credit card which would be used to pay all charges, fees, and taxes for the 8x8 service.” J.A. 247 (emphases added). Additionally, “[ejach of the monthly invoices separately stated the [FCET] applicable to the telephone service used by the customer that month.” J.A. 248. These stipulated facts demonstrate that 8x8 passed the FCET on to its customers. The FCET was' a separate line item on the monthly bill, and the Terms and Conditions explicitly stated the customers were responsible for the FCET. This leaves no room for doubt that 8x8 did not bear the economic burden of the FCET. Rather, 8x8 is seeking to recover costs borne by its customers, in direct contradiction of the Internal Revenue Code.- There is no genuine issue of material fact, and 8x8, a collector of the FCET, does not have standing as a matter of law to seek a refund of the FCET paid by its customers.

Conclusion

We have considered 8x8’s remaining arguments and find them unpersuasive. Accordingly, the decision of the U.S. Court of Federal Claims is

AFFIRMED

Costs

Costs to Appellee.

      . 8x8 purchased service from Level® or Global Crossing in order to hand over the VoIP signal, "which would then convert the digital signal back to a voice signal (if necessary) and deliver the signal to the recipient of the call." Appellant's Br. 17.

      . Relevant here, § 4253 provides "[c]ommon carriers and communications companies” an exemption from the FCET "for any toll telephone service ... to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such.” I.R.C. § 4253(f).

      . "In order for a customer’s VoIP bundled domestic service to be active, the customer’s account had to be prepaid in advance." J.A. 247. However, any other applicable charges were billed to the subscriber’s account at the end of the month, along with the next month’s fee. See J.A. 259.

      . The 2006 Notice was “prospectively vacated” on April 9, 2012. 8x8, 125 Fed.Cl. at 324 n.l. "Because this vacatur was not retroactive, it does not affect the outcome of this case." Id.

      .According to the 2006 Notice, I.R.C. § 4291 defines a "collector” as “the person receiving the payment,” 2006 Notice, § 2(a)(3), and § 4291 states that "every person receiving any payment for facilities or services on which a tax is imposed upon the payor thereof under this chapter shall collect the amount of the tax from the person making such payment,” I.R.C. § 4291.

      . “Transferee” is defined as "the first person that is not a carrier to whom a [prepaid telephone card] is transferred by a carrier.” 26 C.F.R. § 49.425l-4(b) (2006).

      . 8x8 makes vague references to unjust enrichment. See Appellant’s Br. 49, 54-56 (arguing that barring a refund to 8x8 would mean that no one could collect a FCET refund and, therefore, the Government would be unjustly enriched). To the extent 8x8 alleges a separate equitable claim for unjust enrichment, this argument fares no better. 8x8 did not allege a claim for unjust enrichment in its Complaint, see J.A. 19-29, and the Court of Federal Claims does not have jurisdiction over such unjust enrichment claims, see Brown v. United States, 105 F.3d 621, 624 (Fed. Cir. 1997) (explaining that the Tucker Act generally does not provide jurisdiction over claims for equitable relief); Cleveland Chair Co. v. United States, 214 Ct.Cl. 360, 364, 557 F.2d 244 (1977) (“Unjust enrichment cannot in itself be the basis for a recovery here, for it lacks the consensual element needed to find a contract implied in fact, and only provides support for the remedial device known as a contract implied in law, over which this court has no jurisdiction.” (citation omitted)).


author: LIPEZ, Circuit Judge.

text:
    ARABIAN SUPPORT & SERVICES CO., LTD., Plaintiff, Appellant, v. TEXTRON SYSTEMS CORP., Defendant, Appellee.
    No. 16-1309
    United States Court of Appeals, First Circuit.
    April 19, 2017

      Haig Y. Kalbian, with whom D. Michelle Douglas, Kalbian Hagerty LLP, Washington, DC, Martin F. Gaynor III, Nicholas D. Stellakis, and Manion Gaynor & Manning LLP, Boston, MA, were on brief, for appellant.
    Edwin John U, Washington, DC, with whom John A. Tarantino, Providence, RI, Brian R. Birke, Adler Pollock & Sheehan P.C., Boston, MA, Eugene F. Assaf, Erin C. Johnston, Ronald K. Anguas, Jr., and Kirkland & Ellis LLP, Washington, DC, were on brief, for appellee.
    Before LYNCH, LIPEZ, and THOMPSON, Circuit Judges.
   LIPEZ, Circuit Judge.

In this diversity action, Arabian Support & Services Co. (“ASASCO”), a Saudi Arabian business, seeks compensation for assisting Textron Systems Corporation in its efforts, over a number of years, to complete a deal to sell sensor fuzed weapons (“SFWs”) to the Saudi government. ASAS-CO claims that Textron failed to abide by a promise to supplement the modest fees paid under the parties’ written consulting agreements through an “offset” arrangement linked to the weapons sale. The district court granted summary judgment for Textron on all of ASASCO’s claims after allowing limited discovery and declining to provide ASASCO an opportunity to amend its complaint.

Although we agree that ASASCO’s contract and tort claims are not viable, we conclude that the district court erroneously dismissed ASASCO’s Chapter 93A misrepresentation claim based solely on the failure of the contract claim. See Mass. Gen. Laws Ann.' ch. 93A, § 11. Textron offers no persuasive alternative rationale to support the court’s ruling. Hence, ASASCO is entitled to proceed with its claim that Textron engaged in an unfair business practice by procuring ASASCO’s agreement to low-fee consulting contracts with the promise of a future offset benefit and then, after successfully signing the weapons deal, disclaiming any additional financial obligation to the Saudi company. Accordingly, we vacate the summary judgment in part and remand for further proceedings on ASASCO’s misrepresentation theory.

I.

We will not review in full the parties’ lengthy relationship, which developed largely through interactions between Mansour Al-Tassan, ASASCO’s president, and Avedis Boyamian, Textron’s Director of Middle East Business Development. As the history is well known to both parties, we choose here to recount only those facts pertinent to our decision.

A. The Consulting Agreements

For three-plus years — from March 2005 through August 2008 — Textron and ASAS-CO signed successive consulting contracts providing ASASCO with a monthly retainer of $10,000. Beginning September 1, 2008, the consulting contract was extended in increments of one to three months on a no-fee basis. That arrangement continued for a year, until a new two-year agreement was signed that set ASASCO’s monthly retainer at $500. The $500 fee remained in place through subsequent contract extensions until August 31, 2013, at which point Textron terminated the consulting arrangement. In the email sent on August 29 notifying ASASCO that Textron had elected to end the relationship, the company spokesperson stated that Textron was “not aware of any outstanding obligations between the parties.”

Each of the consulting contracts between 2005 and 2011 contained a provision stating that the parties agreed that “any and all services rendered by CONSULTANT to the COMPANY shall be deemed to have been given pursuant to this Agreement and no additional payments [other than for approved travel expenses] shall be due to or paid to CONSULTANT.” However, the 2011 agreement for the first time contained an expanded version of this no-other-payments statement, providing that the specified compensation was “the exclusive remuneration to be paid by the COMPANY” for “the services provide[d] by CONSULTANT.” The 2011 agreement also, featured an integration provision:

This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral. Each party hereby waives the right to assert any claim against the other, its employees, customers or assigns, based on any oral representations, statement, promise or agreement whether made before or after the date of this Agreement.

B. - The Offset Dialogue

Through the years of their consulting relationship, beginning no later than May 2006, Textron and ASASCO regularly discussed the opportunity for additional compensation to ASASCO through its involvement in offset projects that were an anticipated requirement of the Saudi weapons deal. The record also contains internal Textron emails indicating that ASASCO’s anticipated offset activity — and compensation — would be independent of the consulting agreement. This correspondence includes a draft “Offset Services Agreement” prepared by Textron in June 2006, an email from Boyamian to Al-Tas-san that month stating that Textron was “in the process of getting the Offset Provider Agreement approved,” and, on the same day, an internal Textron email asking that “two books” be started for the company’s business with ASASCO (“one for a new offset agreement with Asasco, and one for a renewal of the consultant agreement”).

Textron and ASASCO never entered into a written offset agreement. Instead, in February 2008, Textron and Blenheim Capital Partners Limited signed an Offset Services Agreement (“OSA”) that permitted but did not require Blenheim to subcontract with ASASCO — although no other subcontractor could be used without Tex-tron’s “prior written consent.” Six months later, in an internal email dated September 8, Boyamian told colleagues at Textron that, “Effective September 1st, 2008, [Tex-tron] stopped paying ASASCO the monthly consultancy fee because, [Textron] through Blenheim, an offset service provider company based in UK, has an offset service providing agreement with ASAS-CO for [Textron] business offset requirements in Saudi Arabia.” The email also reported that a two-year renewal of ASAS-CO’s consulting agreement was in the works, “with a nominal monthly fee of $500/month.” Boyamian forwarded this email to Al-Tassan.

The Textron-Blenheim-ASASCO association was further formalized in April 2009, when Blenheim and ASASCO entered into a subcontracting agreement under which ASASCO was entitled to 75 percent of the fees paid by Textron to Blenheim under the OSA. The Blenheim-ASASCO contract anticipated that these fees would be deposited into an escrow account, which was to be created “as soon as practicable,” and, indeed, ASASCO’s right to payment under that contract was contingent on “the full amount of the applicable fee under the Offset Services Agreement being paid to the Escrow Account.” Although Textron’s agreement with Blenheim did not by its terms provide for an escrow account, Bo-yamian appeared to believe that such an account would exist. In a November 2008 email to Al-Tassan, Boyamian stated his understanding “that Textron will be paying 8% of the contract value to the escrow account for offset.” So far as it appears from the record, no escrow account was ever created.

From the time of Blenheim’s appearance on the scene (in 2008) through early 2011, all three businesses — Textron, ASASCO, and Blenheim — were involved in discussions about offset projects. Among the later emails exchanged was one sent to Al-Tassan on March 2, 2011 from Steven Ca-hall of Blenheim, which reviewed the possible fee arrangements among Textron, Blenheim, and ASASCO depending upon whether Textron was required to make offset investments. The three-way dialogue formally ended in November of that year, however, when Textron sent Blenheim a letter stating that the companies were mutually ending the OSA. By its terms, the Blenheim-ASASCO agreement also terminated when the OSA terminated. ASASCO claims that it was not told, and did not know, that Textron and Blenheim had ended the OSA until September 2013.

C. The Weapons Deal

On January 3, 2012, roughly a month after Textron sent Blenheim the termination letter, Boyamian sent Al-Tassan an email reporting that Saudi officials had, on December 24, signed a “Letter of Offer and Acceptance” (“LOA”) — essentially a statement of intent to make a deal — “as a Christmas gift to us.” Boyamian concluded his message with “CONGRATULATIONS to all of us.” Through 2012, allegedly without knowledge that its subcontract with Blenheim had ended (upon termination of the OSA), ASASCO continued to work with Textron to set up meetings with Saudi government officials. The correspondence between the two companies included reference to the offset requirement. In an email to Boyamian in November 2012, Al-Tassan noted an effort to set up a meeting for Textron’s chairman with the Saudi Minister of Economy and Planning, who “is also the Head of the Saudi Economic Offset which Textron might want to explore with the minister.”

Textron and Saudi Arabia finalized an agreement for the weapons deal in late August 2013. About a week later, ASASCO received the notification that Textron was terminating their consulting relationship. In a deposition conducted on December 16, 2015, a Textron representative testified that, as of that date, the company had not yet reached an offset agreement with the Saudi Arabian government, but he reported that Saudi officials had confirmed that such an agreement was required.

II.

In its lawsuit, ASASCO claims that, over an extended period of time, it provided essential support at minimal cost for Tex-tron’s pursuit of a weapons deal in Saudi Arabia based on assurances from Textron that ASASCO would have a large financial stake in any offset activity related to that deal. When the weapons deal was finally made, ASASCO asserts, Textron backed away from its promises. ASASCO’s complaint presented this claim through three theories of liability: (1) breach of contract, specifically the OSA, based on a third-party beneficiary theory; (2) tortious interference with ASASCO’s business and contractual relationship with Blenheim; and (3) violations of Chapter 93A, the Massachusetts Deceptive Trade Practices Act, Mass. Gen. Laws Ann. ch. 93A, § 11.

When Textron moved to dismiss the complaint,,ASASCO sought leave to amend it to address any deficiencies and, possibly, to add new claims, including fraudulent inducement, breach of the covenant of good faith and fair dealing, and tortious interference with prospective business advantage. No discovery had yet taken place. Shortly thereafter, the district court entered an electronic order notifying the parties that (1) it was reserving ruling on the motion to dismiss, (2) it intended to convert that motion into one for summary judgment, and (3) it would permit limited discovery on two issues. Textron later moved for summary judgment and renewed its motion for dismissal, and ASAS-CO again asked for the opportunity to amend its complaint before the district court’s final disposition of the case. ASAS-CO also sought additional discovery pursuant to Federal Rule of Civil Procedure 56(d), asserting that Textron’s motions encompassed issues beyond the scope of the limited discovery the court previously had allowed.

In its Memorandum and Order granting summary judgment for Textron, the district court rejected ASASCO’s third-party-beneficiary contract theory based on the OSA between Textron and Blenheim because “Textron did all that it was contractually obligated to do.” Arabian Support & Servs. Co. v. Textron Sys. Corp., No. 1:15-cv-12951-RGS, 2016 WL 1048868, at *4 n.9 (D. Mass. Mar. 11, 2016). The court also stated that, given the absence of a contractual breach, “there is no viable allegation of tortious interference or violations of Chapter 93A.” Id. The court did not address ASASCO’s requests for leave to amend or additional discovery.

We review the district court’s grant of summary judgment de novo, taking the facts and all reasonable inferences therefrom in the light most favorable to ASAS-CO as the non-moving party. Rando v. Leonard, 826 F.3d 553, 556 (1st Cir. 2016). “Summary judgment is warranted where ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ ” Id. (quoting Fed. R. Civ. P. 56(a)).

We detect no error in the district court’s conclusions on two of ASASCO’s three theories of liability. With respect to the contract claim, even if ASASCO was an intended third-party beneficiary of certain provisions of the OSA, Textron did not violate any of the terms of that agreement. As permitted by the contract, Textron and Blenheim ended the OSA by mutual agreement. In addition, the OSA did not require Textron to pay the fees that were intended to reach ASASCO through Blenheim into an escrow account. Only the subcontract between Blenheim and ASASCO required the escrow arrangement. Thus, even if Textron made a payment directly to Blenheim — as ASASCO alleges and Textron disputes — Textron would not have violated any contractual provision. Hence, ASASCO is without a breach on which to hang its third-party-beneficiary contract claim.

Nor do we see a basis for relief from Textron for tortious interference with ASASCO’s business or contractual relationship with Blenheim. ASASCO voluntarily entered into an agreement that expressly made its continued relationship with Blenheim contingent on Textron’s voluntary relationship with Blenheim. In the definitions section of the ASASCO-Blen-heim contract, “Termination Date” is defined as “the earlier of [] the date on which the Offset Services Agreement is terminated for any reason,” or the date on which termination occurs for other specified reasons. Moreover, the OSA did not even require Blenheim to hire ASASCO as its offset subcontractor, although Textron secured that relationship by stipulating that no other subcontractor could be hired without Textron’s permission. To say that Textron then improperly interfered in ASASCO’s association with Blenheim when it ended the OSA disregards the limited commitments made by the three businesses in the two Blenheim agreements.

Put another way, the harm ASASCO seeks to vindicate is not the elimination of the ASASCO-Blenheim collaboration per se, but the elimination of its own participation in potential offset activity — as allegedly promised by Textron. The Blenheim-ASASCO agreement was, for a time, the means by which ASASCO was to obtain such involvement. With Textron’s termination of the OSA, ASASCO automatically lost its contractual right to offset business via its own agreement with Blenheim — but ASASCO has not presented a supportable rationale for finding that Tex-tron owed it a duty to protect the ASAS-CO-Blenheim agreement by maintaining the OSA.

On the other hand, if Textron did promise ASASCO offset-related remuneration, but then terminated the OSA without providing ASASCO an alternative means to obtain it, we see room for a viable Chapter 93A claim premised on Textron’s misrepresentations. As we have described, the gist of ASASCO’s complaint is that it was induced into providing ongoing consulting services to Textron for both no fee and — in Boyamian’s words — “a nominal monthly fee” by Textron’s assurance of future offset activity and compensation. See Compl. at ¶ 34 (alleging that, after Blenheim “ceased its communications with ASASCO” in 2011, Textron “assur[ed] ASASCO that its role in the offset arrangement was secure”); ¶ 37 (alleging that, by December 2011 or shortly thereafter, Textron knew that “it did not intend to follow through on its commitment to compensate ASASCO through the [Textron]-Blenheim-ASASCO offset arrangement,” yet failed to inform ASASCO and “persisted in its offset-related discussions with ASASCO”); ¶ 44 (alleging that Boyamian promised Al-Tassan that Textron “would ‘find another way’ ” to provide “ASASCO’s anticipated offset-related compensation”).

Textron points to the integration provision in the 2011 consulting contract as a barrier to any such claim based on verbal representations. However, the clear division that was established early on between ASASCO’s consultant role and its future offset role could mean that the integration provision was understood — or represented by Textron — to apply .to the former but not the latter. Moreover, such a provision does not always bar a misrepresentation claim. See Kenda Corp. v. Pot O’Gold Money Leagues, Inc., 329 F.3d 216, 226 (1st Cir. 2003) (“[I]t is well settled in Massachusetts that ‘[a]n integration clause in a contract does not insulate automatically a party from liability where he induced another person to enter into a contract by misrepresentation.’ ” (quoting Starr v. Fordham, 420 Mass. 178, 648 N.E.2d 1261, 1268 (1995)) (second alteration in original)); Bates v. Southgate, 308 Mass. 170, 31 N.E.2d 551, 558 (1941) (“[I]t is entirely possible for a party knowingly to agree that no representations have been made to him, while at the same time believing and relying upon representations which in fact have been made and in fact are false but for which he would not have made the agreement.”). Particularly where there has been a longstanding “history of performance” between the parties, “reliance on the complained-of duping conduct” could be found reasonable. HSBC Realty Corp. (USA) v. O’Neill, 745 F.3d 564, 573 (1st Cir. 2014).

Hence, the integration clause does not necessarily exclude the Chapter 93Aa claim, and the record contains facts that, depending on the surrounding circumstances, could support an inference of deception. The two actions by which Textron eliminated its connection with ASASCO (first, indirectly, by terminating the OSA and, second, by declining to renew the consulting agreement) coincide with significant developments in Textron’s efforts to win the Saudi weapons contract. The end of the OSA overlapped with the signing of the LOA for the weapons deal, and ASAS-CO’s consulting agreement ended right after the weapons deal came to fruition. If Textron knew at the time it signed the 2011 consulting agreement that it would soon end the OSA, but did not tell ASAS-CO because it wanted to keep the Saudi company on board at a low fee to help finalize the weapons deal, Textron’s silence could be found consequential. See, e.g., Incase Inc. v. Timex Corp., 488 F.3d 46, 57 (1st Cir. 2007) (noting that “[s]ome cases have held that an act or practice is deceptive ‘if it could reasonably be found to have caused a person to act differently from the way he or she otherwise would have acted’” (quoting Aspinall v. Philip Morris Cos., 442 Mass. 381, 813 N.E.2d 476, 486 (2004))); Lambert v. Fleet Nat’l Bank, 449 Mass. 119, 865 N.E.2d 1091, 1098 (2007) (observing that “ ‘stringing along’ that induces detrimental reliance can, in some cases, constitute a [Chapter] 93A violation”); McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 563 N.E.2d 188, 192 (1990) (“Massachusetts law clearly states that statements of present intention as to future conduct may be the basis for a fraud action if ... the statements misrepresent the actual intention of the speaker and were relied upon by the recipient to his damage.”).

Such a deliberate failure to disclose the impending termination of the OSA would be even more significant if Textron also was planning by that time to end any relationship with ASASCO as soon as the weapons deal was finalized. Why Textron substantially reduced the consulting fee— and why ASASCO acquiesced to the reduction — also seem relevant, and potentially revealing, for ASASCO’s claim that it was promised offset-related compensation outside of the consulting agreements. Likewise, the Offset Services Framework Agreement between Textron and Blenheim, which the district court described as “intended to replace the OSA,” may have significance, but the court (like the parties on appeal) did not discuss the contents of that contract. Arabian Support & Servs. Co, 2016 WL 1048868, at *2.

In sum, we disagree with the district court that ASASCO’s Chapter 93A claim— or, indeed, other potential claims resting on alleged misrepresentations by Tex-tron — necessarily fail because Textron did not breach the OSA. To the contrary, as described above, ASASCO has identified evidence that raises sufficient doubts concerning Textron’s actions and motivations that a violation of Chapter 93A is viable. We therefore must vacate the summary judgment on that claim and remand the case for further proceedings on the misrepresentation theory.

Relatedly, the district court denied ASASCO further discovery and the opportunity to amend its complaint in apparent reliance on its view that such efforts would be futile because ASASCO did not have a viable misrepresentation-based claim. In light of this decision, ASASCO should be given the opportunity to amend its complaint to supplement its Chapter 93A claim with any common-law misrepresentation claims supported by the record. See, e.g., Grant v. News Group Bos., Inc., 55 F.3d 1, 5 (1st Cir. 1995) (stating that, “unless there appears to be an adequate reason for the denial [of leave to amend] (e.g., undue delay, bad faith, dilatory motive on the part of the movant, futility of the amendment), we will not affirm the denial”). We leave to the district court the decision whether further discovery is appropriate. We also leave to its discretion whether to allow a renewed motion for summary judgment in light of any new theories presented and the possibility of an expanded record on remand.

Vacated and remanded. No costs.

      . The U.S. Department of Commerce describes "offsets” as "the practice by which the award of defense contracts by foreign governments or companies is conditioned upon commitments from the defense contractor to provide some form of compensation to the purchaser.” U.S. Dep't of Commerce, Bureau of Indus. & Sec., Guidance for Complying with the Bureau of Industry and Security's Procedures for Reporting on Offsets Agreements Associated with the Sales of Weapon Systems or Defense-Related Items to Foreign Countries or Foreign Firms, https:// www.bis.doc.gov/index.php/other-areas/ strategic-industries-and-economic-security-sies/contact-the-office-of-strategic-industries-a-economic-security/guidance-for-reporting-on-offset-agreements (last visited March 16, 2017). That compensation can be directly related to the purchase, perhaps through subcontracting within the purchasing country, or may take the form of other types of investments made in the purchasing country. Id.

      . Although Al-Tassan's declaration describes earlier discussions between him and Boyami-an on potential offset business, we use this date because it is supported in the record by emails between the two men.

      . In response to a question concerning the connection between ASASCO’s reduced consulting fee and its offset role, Boyamian testified during his deposition that the "consultancy services and offset providing services” were “two separate things.”

      . The companies had been discussing the possibility that the offset obligation would be waived for the Textron weapons deal. Cahall’s email stated: "If there is an offset obligation then ASASCO MUST INVEST ITS FEES ENTIRELY INTO THE OFFSET PROJECTS. If there is a waiver of the offset obligation then ASASCO does not have to invest the fees.”

      . The termination letter sent from Textron to Blenheim, dated November 28, 2011, was ‘‘[ajgreed to and accepted” by Blenheim by means of a signature dated January 12, 2012. The letter attributed the termination to "recent changes to the offset guidelines in Saudi Arabia.” The letter also stated that "[t]he Offset Services Framework Agreement between [Textron] and [Blenheim], dated January 18, 2011 will remain in force for the duration of its term and will cover all future offset activity for Saudi Arabia.” The parties do not explain this latter agreement in their briefs.

      .Stephen Fogarty, whose job duties at Tex-tron included review of offset agreements, testified as follows:
      [T]here is no question we will have an offset obligation and there will be an offset program.
      The only thing that is in question at this moment, is when will this offset agreement be signed, when will this program begin, and what will be the period of performance for this offset program.

      . The court described the two issues as follows:
      (1) the authenticity of, and plaintiff Arabian Support & Services Company (ASASCO)'s knowledge of, the Termination Letter [from Textron to Blenheim], ...; and (2) the authenticity of the [2011-13] Consulting Agreement [between Textron and ASASCO], as well as the preclusive effect, if any, of its terms, particularly with respect to the operation of the integration clause.

      . The OSA stated that the fees specified therein "will be paid to the account of BLENHEIM notified to fTextron]. Fees may not be paid to BLENHEIM by way of cash or bearer instrument.'’

      . Textron asserts in its brief on appeal that “ASASCO cannot now claim a right to be paid for separate ‘offset services’ when it is undisputed that ASASCO never provided any such services.” However, ASASCO’s contention is that it was denied a promised opportunity to perform offset services. As noted above, Textron's representative reported that “there is no question we will have an offset obligation and there will be an offset program.” See supra note 6.

      .Boyamian testified in deposition that Tex-tron in 2008 sought to eliminate all consultant fees to reduce the company’s expenses. In addition, when asked if ASASCO was “doing a great deal of work for Textron” while it was receiving the $500 monthly stipend, he responded, "I don't think so.” By contrast, Al-Tassan, while acknowledging that he signed agreements with the reduced fees, stated that "there were some representations on the other side, so that’s why.”

      . As Textron points out, the district court did allow some discovery by ASASCO beyond the express limits of the original discovery order. The topics permitted included communications between Textron and ASASCO "regarding changes in any monthly fees paid to ASASCO,” and “representations or statements made to Plaintiff to encourage Plaintiff to enter into” the consulting agreements with Textron. Hence, ASASCO already has had some opportunity to obtain evidence related to the alleged misrepresentations.

      . If the district court allows another round of summary judgment motions on remand, it should also reconsider its order striking parts of the Al-Tassan declaration and specify the portions, if any, it strikes.