COMMONWEALTH
OF PUERTO RICO, DEPARTMENT OF LABOR AND HUMAN RESOURCES,
Plaintiff,
v.
UNITED STATES,
Defendant.
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Jurisdiction; Motion to Dismiss; Contract; Settlement Agreement.
Steven D. Cundra, O'Rourke
& Cundra, Washington, D.C.
Reginald T. Blades, Jr.,
Senior Trial Counsel, Commercial Litigation Branch, Civil Division, David M.
Cohen, Director, United States Department of Justice, Washington, D.C.,
attorneys of record for the defendant. Vincent C. Costantino,
Assistant Counsel for Litigation, Department of Labor, Washington D.C., of counsel.
O P I N I O N
HORN, J.
FACTS
Plaintiff, the Commonwealth of Puerto Rico,
Department of Labor and Human Resources (DLHR), claims the defendant, the United States,
owes it monies for a migrant and seasonal farmworker training program, established under
the Job Training Partnership Act (JTPA), 29 U.S.C. 1501-1792b (1994). The United
States Department of Labor (DOL) selects one recipient for the award in each service area
or jurisdiction. The JTPA provides for administrative review "[w]henever any
applicant for financial assistance under this chapter is dissatisfied because the
Secretary has made a determination not to award financial assistance." 29 U.S.C.
1576(a) (1994). Dissatisfied applicants may appeal first to an administrative law judge
(ALJ), then to the Secretary of DOL, then directly to the United States Court of Appeals
for the service areas's Circuit. 29 U.S.C. 1576(b), 1578(a). The remedy for a
successful appeal is limited by the regulations to "the right to be designated [as a
grant recipient] in the future, rather than a retroactive or immediately effective
selection status." 20 C.F.R. 633.205(e) (1997).
On August 8, 1997, both DLHR and Rural Opportunities,
Inc. (ROI) submitted final applications to DOL to receive the grant for the Puerto Rico
service area for the years 1997 and 1998. In response to a decision to award the grant to
ROI, DLHR complained that the award was improper and appealed the decision to an ALJ,
pursuant to 29 U.S.C. 1576(a). Before a decision was reached on the merits, the DOL and
DLHR reached a settlement stipulating that DOL would unconditionally designate and fund
DLHR as the only service provider for the program in Puerto Rico and award DLHR the
balance of funds for 1997 and all of the funds for 1998. The designation agreement was
reduced to writing on December 8, 1997. On December 10, 1997, the ALJ approved the
settlement agreement, incorporated the December 8, 1997 written agreement into the
contract and dismissed the appeal. The settlement agreement stated:
The Department hereby agrees to unconditionally
designate and fund DLHR as the only service provider for the Job Training Partnership Act
Section 402 Migrant and Seasonal Farmworker Program for the service area of the
Commonwealth of Puerto Rico for the balance of Program Year 1997 as well as Program Year
1998, ending on June 30, 1999.
The funds allocated for 1997 totaled $2,867,153.00,
of which DLHR expected ,433,576.50 (50 percent). Plaintiff, however, was advised by DOL
that no funds were available for transfer and that approximately $533,000.00 would be used
to cover ROI's close out costs. DLHR returned to the ALJ to enforce the settlement
agreement under section 1576(a). The ALJ dismissed the case for lack of jurisdiction
stating that he had statutory authority, under 29 C.F.R. Part 18, only to affirm or remand
decisions of the grant officer, but not to enforce them. During this time, however, DOL
released $900,000.00 to DLHR. DLHR, therefore, filed an amended claim seeking monetary
damages in the amount of $533,577.00, as well as interest, costs and attorney's fees.
DLHR then filed suit in the District Court for the
District of Columbia under the Administrative Procedure Act (APA). 5 U.S.C. 702 (1994).
The DOL filed a motion to dismiss for lack of jurisdiction, arguing that the case properly
should be before the appropriate Court of Appeals pursuant to section 1578(a) of the JTPA
or before the United States Court of Federal Claims under the Tucker Act, 28 U.S.C.
1491(a)(1) (1994 & Supp. III 1997).
On June 1, 1998, the District Court granted the
motion to dismiss, concluding in accordance with the statute that the APA precludes
jurisdiction, "if any other statute that grants consent to suit expressly or
impliedly forbids the relief which is sought," 5 U.S.C. 702, and stating,
"[t]hus, if plaintiff can seek relief under another statute that vests exclusive
jurisdiction in a court other than this one, then plaintiff cannot seek relief under the
APA." Commonwealth of Puerto Rico, Dept. of Labor and Human Resources v. Herman,
No. 98-0532, slip op. at 7 (D.D.C. June 12, 1998). The District Court pointed out that the
plaintiff's claim was not appropriate for adjudication under the JTPA because it was not
an appeal of an award to provide financial assistance, but rather an attempt "to
enforce the award that it has already won" and that "[t]here is no doubt that
plaintiff's claims arise out of its contract with the government, and not out of a
separate statutory authority." Id. at 8-9. The District Court found the
dispute to fall under the exclusive jurisdiction of the United States Court of Federal
Claims under the Tucker Act as a demand for monetary damages greater than $10,000.00
arising out of an express contract with the United States.
On July 21, 1998, the District Court's order was
amended to transfer DLHR's claim to the Court of Federal Claims, pursuant to 28 U.S.C.
1631(1994). The DOL now moves again in this court to dismiss for lack of subject matter
jurisdiction.
DISCUSSION
The defendant has filed a motion to dismiss pursuant
to Rules 12(b)(1) and 12(b)(4) of the United States Court of Federal Claims for lack of
subject matter jurisdiction and for failure to state a claim upon which relief can be
granted. Subject matter jurisdiction may be challenged at any time by the parties, by the
court sua sponte, or on appeal. Booth v. United States, 990 F.2d 617, 620
(Fed. Cir. 1993); United States v. Newport News Shipbuilding & Dry Dock Co.,
933 F.2d 996, 998 n.1 (Fed. Cir. 1991).
Once jurisdiction is challenged by the court or the
opposing party, the plaintiff bears the burden of establishing jurisdiction. McNutt v.
General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189 (1936). A plaintiff must
establish jurisdiction by a preponderance of the evidence. Reynolds v. Army & Air
Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988); Alaska v. United States,
32 Fed. Cl. 689, 695 (1995), appeal dismissed, 86 F.3d 1178 (Fed. Cir. 1996).
When construing the pleadings pursuant to a motion to dismiss, the court should not grant
the motion "unless it appears beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to relief." Son
Broadcasting, Inc. v. United States, 42 Fed. Cl. 532, 537 (1998) (quoting Conley v.
Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted)). Pursuant to RCFC 8(a)(1) and
the Federal Rules of Civil Procedure 8(a)(1),(1) a
plaintiff need only state in the complaint "a short and plain statement of the
grounds upon which the court's jurisdiction depends." However, "[d]etermination
of jurisdiction starts with the complaint, which must be well-pleaded in that it must
state the necessary elements of the plaintiff's claim, independent of any defense that may
be interposed." Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir. 1997).
"[C]onclusory allegations unsupported by any factual assertions will not withstand a
motion to dismiss." Brisco v. LaHue, 663 F.2d 713, 723 (7th Cir.
1981), aff'd, 460 U.S. 325 (1983).
When deciding on a motion to dismiss based on either
lack of subject matter jurisdiction or failure to state a claim, this court must assume
that all undisputed facts alleged in the complaint are true and must draw all reasonable
inferences in the plaintiff's favor. Scheuer v. Rhodes, 416 U.S. 232, 236, (1974); see
alsoHenke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995) cert. denied,
435 U.S.924 (1975); Hamlet v. United States, 873 F.2d 1414, 1416 (Fed. Cir. 1989) cert.
denied, 517 U.S. 1155 (1996). If a defendant challenges jurisdiction or plaintiff's
claim for relief, however, the plaintiff cannot rely merely on allegations in the
complaint but must instead bring forth relevant, competent proof to establish
jurisdiction. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. at
189; see alsoLand, Chairman, United States Maritime Comm'n v. Dollar, 330
U.S. 731, 735 n.4 (1947); Reynolds Army & Air Force Exch. Serv., 846 F.2d at
747; Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 404-05 (1994). The
court may consider all relevant evidence in order to resolve the factual dispute,
including evidentiary matters outside the pleadings. Indium Corp. of America v.
Semi-Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985) cert. denied, 479 U.S.
820 (1986).
In order for this court to have jurisdiction over a
plaintiff's complaint, the Tucker Act requires that the plaintiff identify an independent
substantive right enforceable against the United States for money damages. 28 U.S.C.
1491. The Tucker Act states:
The United States Court of Federal Claims shall have
jurisdiction to render judgment upon any claim against the United States founded either
upon the Constitution, or any Act of Congress or any regulation of an executive
department, or upon any express or implied contract with the United States, or for
liquidated or unliquidated damages in cases not sounding in tort.
28 U.S.C. 1491(a)(1). As interpreted by the United
States Supreme Court, this Act waives sovereign immunity to allow jurisdiction over claims
(1) founded on an express or implied contract with the United States; (2) for a refund
from a prior payment made to the government; or (3) based on federal constitutional,
statutory, or regulatory law. United States v. Testan, 424 U.S. 392, 400 (1976))
(quoting Eastport Steamship Corp. v. United States, 178 Ct. Cl. 599, 605-06, 372
F.2d 1002, 1009 (1967)); see alsoPalmer v. United States, 168 F.3d 1310,
1314 (Fed. Cir. 1999); Stinton Lyons & Bustamante, P.A. v. United States, 33
Fed. Cl. 474, 478 (1995), aff'd, 79 F.3d 136 (Fed. Cir. 1996). A waiver of
traditional sovereign immunity "cannot be implied but must be unequivocally
expressed." Saraco v. United States, 61 F.3d 863, 864 (Fed. Cir. 1995)
(quoting United States v. King, 395 U.S. 1, 4 (1969) cert. denied, 517 U.S.
1166 (1996)).
The Tucker Act, however, merely confers jurisdiction
on the United States Court of Federal Claims; "it does not create any substantive
right enforceable against the United States for money damages." United States v.
Mitchell, 445 U.S. 535, 538, reh'g denied, 446 U.S. 992 (1980) (quoting United
States v. Testan, 424 U.S. at 398-99 (1976)); see alsoSaraco v. United
States, 61 F.3d at 865 (citing In Zumerling v. Devine, 769 F.2d 745, 749 (Fed.
Cir. 1985)) (citing United States v. Testan, 424 U.S. at 398 (1976))); see alsoUnited States v. Connolly, 716 F.2d 882, 845 (Fed. Cir. 1983) (en banc), cert.
denied, 465 U.S. 1065 (1985). Individual claimants, therefore, must look beyond the
jurisdictional statute for a waiver of sovereign immunity. United States v. Mitchell,
445 U.S. at 538. For claims founded on a statute or regulation to be successful, "the
provisions relied upon must contain language which could fairly be interpreted as
mandating recovery of compensation from the government." United States v. Testan,
424 U.S. at 400 (quoting Eastport Steamship Corp. v. United States, 178 Ct. Cl.
599, 607, 372 F.2d 1002, 1009 (1967)); see alsoJohn Doe v.
United States, 100 F.3d 1576, 1579 (Fed. Cir. 1996).
In its motion to dismiss, DOL asserts that the United
States Court of Federal Claims lacks jurisdiction to hear DLHR's claim due to the
exclusive nature of jurisdiction created by sections 29 U.S.C. 1576, 1578 and 20
C.F.R. 627. 800 etseq. Defendant argues before this court that
plaintiff's claim is precisely the type of claim for which the JTPA provides a mandatory
scheme for administrative adjudication and judicial review in the courts of appeals and
that the decision by the ALJ dismissing DLHR's claim for lack of jurisdiction constituted
a final order by the Secretary which is reviewable under 29 U.S.C. 1578. According to
the defendant, DLHR erred in failing to follow the process provided by the statute and
should not be allowed to bring suit in this court. Defendant argues that "[t]he
parties' informal resolution of DLHR's appeal, by agreeing that DLHR would be designated
grantee for the balance of program year 1997 and for program year 1998, did not change the
nature of the action and did not alter the fora that possessed jurisdiction to adjudicate
the dispute and to provide judicial review."
The plaintiff, DLHR, opposes defendant's motion to
dismiss, arguing that the United States Court of Federal Claims should not relitigate the
issue of jurisdiction because it has already been decided by the District Court for the
District of Columbia, and the law of the case and issue preclusion should govern the
result. DLHR also argues that even if the jurisdictional issue is considered on the
merits, the court should find that the Court of Appeals does not have exclusive
jurisdiction. According to the plaintiff, review under sections 1576 and 1578 of the JTPA
is not a comprehensive and exclusive means of administrative review of DOL's action given
the facts presented in the instant case in which DLHR is not contesting denial of
financial assistance by the DOL, but is seeking to enforce a settlement agreement. DLHR
contends that the Court of Federal Claims has proper jurisdiction of the above captioned
case under the Tucker Act for money damages over $10,000.00 based on breach of an express
contract. Moreover, plaintiff argues that the defendant successfully argued to the
District Court that the matter should be transferred to the Court of Federal Claims and,
the defendant, therefore, should be judicially estopped from denying Tucker Act
jurisdiction. According to the plaintiff, this court should refrain from even considering
whether it has jurisdiction over the claim under the doctrines of issue preclusion and
"law of the case."
"A court's lack of jurisdiction over a case may
be considered at any time, even for the first time on appeal and can be considered suasponte by the court." Wood-Ivey Sys. Corp. v. United States, 4 F.3d
961, 967 (Fed. Cir.1993) citing Arctic Corner, Inc. v. United States, 845 F.2d 999,
1000 (Fed. Cir. 1988). "[T]he court always has the right -- indeed, the obligation --
to consider its own jurisdiction." Clark v. United States, 229 Ct. Cl. 570,
576 (1981) (Harlan, J., concurring). See alsoUnited States v. Storer
Broadcasting Co., 351 U.S. 192, 206 n.1 (1956) (stating that courts have the power to
consider jurisdictional issues suasponte). "Jurisdiction is conferred
by Congress, not by defendant's arguments in the district court proceeding and not by the
district court's transfer of the case to the Court of Federal Claims." Son
Broadcasting, Inc. v. United States, 42 Fed. Cl. 532, 535-6 (1998). "Absent
[c]ongressional delegation of jurisdiction, the court simply cannot hear plaintiff's
claims." Id. at 536. See alsoSynernet Corp. v. United States,
41 Fed. Cl. 375, 382-3 (1998) (in which this court discussed the unavailability of the
estoppel doctrine in matters of jurisdiction), aff'd, Synernet Corp. v. United
States, -- F.3d --, 1999 WL 6000406 (Fed. Cir. Aug. 10, 1999).
Plaintiff also cites to language in the decision
issued by the United States Supreme Court in Christianson v. Colt Industries Operating
Corporation, 486 U.S. 800, 815-16 (1988), which plaintiff argues supports the
application of "law of the case" doctrine to transfer cases. The Supreme Court
wrote the "[law of the case] doctrine applies as much to the decisions of a
coordinate court in the same case as to a court's own decisions" Christianson v.
Colt Indus. Operating Corp., 486 U.S. at 815-16" and "[i]ndeed, the policies
supporting the doctrine apply with even greater force to transfer decisions than to
decisions of substantive law . . . ." Id. The plaintiff, however, misconstrues
this language as a bar to review by the transferee court. The Christianson Court
also wrote that the "law of the case doctrine 'merely expresses the practice of
courts generally to refuse to reopen what has been decided, not a limit to their
power.'" Id. at 817 (quoting Messinger v. Anderson, 225 U.S. 436, 444
(1912)). "A court has the power to revisit prior decisions of its own or of a
coordinate court in any circumstance, although as a rule courts should be loathe to do so
in the absence of extraordinary circumstances such as where the initial decision was
'clearly erroneous and would work a manifest injustice.'" Christianson v. Colt
Indus. Operating Corp., 486 U.S. at 817 (quoting Arizona v. California, 460
U.S. 605, 618 (1983)).(2)
In the instant case, the issue is whether DOL's
failure to distribute the funds pursuant to the settlement agreement entered into by the
parties constitutes "a determination not to award financial assistance" and,
therefore, falls under the language of section 1576 (in which case, DLHR would be
compelled to bring its claim through the JTPA statutorily prescribed channels) or whether
a challenge to the settlement agreement entered into by the plaintiff and defendant
constitutes an action for breach of contract under the Tucker Act.
The Tucker Act grants the United States Court of
Federal Claims jurisdiction over actions "founded either upon the Constitution, or
any Act of Congress or any regulation of an executive department, or upon any express or
implied contract with the United States, or for liquidated or unliquidated damages in
cases not sounding in tort." 28 U.S.C. 1491. A valid express contract requires
that the following criteria have been met: "a mutual intent to contract including
offer, acceptance, and consideration; and authority on the part of the government
representative who entered or ratified the agreement to bind the United States in
contract." Total Medical Management, Inc. v. United States, 104 F.3d 1314,
1319 (Fed. Cir. 1997), cert. denied, 118 S. Ct. 156 (1997) (citing Thermalon
Indus., Ltd. v. United States, 34 Fed. Cl. 411, 414 (1995) (citing City of El
Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990), cert. denied, 501
U.S. 1230 (1991); Fincke v. United States, 230 Ct. Cl. 233, 244, 675 F.2d 289,
295 (1982))).
In the case at bar, all of the elements of a contract
necessary for jurisdiction under the Tucker Act are present. The settlement agreement
entered into by DOL and DLHR, prior to the issuance of a decision on the merits by the
ALJ, was entered into freely by both parties. The parties also stipulated that DOL agreed
to "unconditionally designate and fund DLHR as the only service provider for the
[JTPA]" for the balance of 1997 and all of 1998 in consideration for which DLHR
agreed to withdraw the appeal, and the parties agreed to release and discharge each other
from all liabilities, obligations and claims arising from the grant award process.
Moreover, the authority of those who entered into the settlement agreement has not been
challenged. Thus, the decision to award or not to award assistance was made and the
opportunity to appeal that decision pursuant to the JTPA was relinguished when the parties
entered into the settlement agreement. Plaintiff's claim is not a challenge of a decision
within the scope of the grant officer's discretion of whether or not to award funds.
Rather, it is a challenge of a decision not to deliver funds to the plaintiff pursuant to
the settlement agreement, in which the plaintiff alleges a violation of the settlement
agreement and breach of a contract. SeeFausto v. United States, 16 Cl. Ct.
750, 754 (1989) ("A settlement agreement is a contract.").(3)
Consequently, this court finds that jurisdiction in this court is properly vested under
the Tucker Act, which provides that "[t]he United States Court of Federal Claims
shall have jurisdiction to render judgment upon any claim against the United States
founded . . . upon any express or implied contract with the United States . . . ."
CONCLUSION
For the foregoing reasons, the defendant's motion to
dismiss is, hereby, DENIED.
IT IS SO ORDERED.
MARIAN BLANK HORN
Judge
1. In general, the rules of this court are patterned on the Federal
Rules of Civil Procedure. Therefore, precedent under the Federal Rules of Civil Procedure
is relevant to interpreting the rules of this court. Kraft, Inc. v. United States,
85 F.3d 602, 605 n.6 (Fed. Cir. 1996); Patton v. Secretary of Dep't of Health &
Human Resources, 25 F.3d 1021, 1025 [n.4] (Fed. Cir. 1994).
2. The United States Court of Appeals for the Federal Circuit also
has interpreted the Supreme Court's decision in Christianson v. Colt as allowing
consideration of the jurisdictional issue by the transferee court. SeeRodriguez
v. United States, 862 F.2d 1558, 1560 (Fed. Cir. 1988) (holding that the Claims Court
erred under Christianson v. Colt in refusing to consider the jurisdictional issue
out of deference to the "law of the case" doctrine when the transferring court's
determination on the issue was "clearly erroneous"); Texas American Oil
Corp., v. United States Dept. of Energy, 44 F.3d 1557, 1561-62 (Fed. Cir. 1995)
(holding that under Christianson v. Colt the transferee court must consider the
jurisdictional issue to determine if the transferee court's decision was
"plausible" in which case the determination should be followed, although, in
exceptional cases, if the determination is "clearly erroneous," the decision
must be rejected); see alsoPhoenix Petroleum Co. v. United States Federal
Energy Regulatory Comm'n, 95 F.3d 1555, 1563 (Fed. Cir. 1996).
3. The United States District Court for the District of Columbia
also found that the plaintiff "is not appealing an award of financial assistance. . .
. Plaintiff is seeking to enforce the award that it has already won, not to challenge the
award itself." Commonwealth of Puerto Rico, Dept. of Labor and Human Resources v.
Herman, No. 98-0532, slip op. at 7 (D.D.C. June 12, 1998). The District Court based
this holding on its assertion that "[t]he JTPA does not grant exclusive jurisdiction
to the Courts of Appeals to hear enforcement actions; it only confers jurisdiction to hear
challenges of award decisions," id. at 8, and that "[t]here is no doubt
that plaintiff's claims arise out of its contract with the government . . . ." Id.