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Keywords

contractlawsuitbreach of contractdamagesliabilityappealsummary judgmentlimitation of liability
contractbreach of contractliabilitylimitation of liability

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Frankel v. United States, 842 F.3d 1246, 2016-2 Trade Cases P 79,841

Facts

The case arose from the FTC's 'Robocall Challenge,' a competition inviting public submissions for solutions to block illegal robocalls. Frankel submitted a 'trace-back' solution, which was not selected as a winner. After the FTC announced the winners, Frankel sought to have the submissions rescored and claimed damages, leading to his lawsuit against the government. The Court of Federal Claims dismissed his request for injunctive relief and later granted summary judgment in favor of the government after determining that the contest did not create a procurement contract.

By the end of the competition, the FTC received close to 800 submissions. After a preliminary review, of these, 266 were forwarded to the judges for consideration.

Issue

Did the FTC's announcement of the contest and Frankel's entry constitute a binding contract, and did Frankel have standing to bring a breach of contract claim under the bid protest provisions?

Did the FTC's announcement of the contest and Frankel's entry constitute a binding contract, and did Frankel have standing to bring a breach of contract claim under the bid protest provisions?

Rule

The court held that the announcement of a contest constitutes an offer and the entry into the contest constitutes acceptance, but such a contract is not a procurement contract under 28 U.S.C. § 1491(b).

In the contest context, the majority of courts have long interpreted announcement of a contest as a contractual offer by a sponsor and entry into the contest by a contestant as acceptance of that offer.

Analysis

The court determined that while a contract was formed between Frankel and the FTC when he submitted his entry, it was not a procurement contract. Therefore, Frankel lacked standing to challenge the prize award under the bid protest provisions. Additionally, the court found that the judges' decisions did not constitute fraud or gross mistake, and thus the limitation of liability clause in the contest rules barred Frankel's breach of contract claim.

The court determined that while a contract was formed between Frankel and the FTC when he submitted his entry, it was not a procurement contract.

Conclusion

The Court of Appeals affirmed the decision of the Court of Federal Claims, concluding that Frankel's claims were without merit and that the contest's limitation of liability clause precluded his breach of contract claim.

For the foregoing reasons, the judgment of the Court of Federal Claims is affirmed.

Who won?

The United States prevailed in the case because the court found that the contest did not create a procurement contract and that Frankel's claims were barred by the contest's limitation of liability clause.

The United States prevailed in the case because the court found that the contest did not create a procurement contract and that Frankel's claims were barred by the contest's limitation of liability clause.

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