KING et al v. USA

Filing 18

PUBLISHED OPINION and ORDER denying 6 Motion to Dismiss - Rule 12(b)(1) Signed by Judge Emily C. Hewitt. (jh4) Modified on 5/16/2008 (mb2).

KIN G et al v. USA

Do c. 18

In the United States Court of Federal Claims
N o . 07-589 C (E -F ile d : May 15, 2008) ) J E F F R E Y B. KING, SCOTT A. AUSTIN, KEVIN J. HARRIS, AND JOHN J. HAYS, P la in tif f s , v. T H E UNITED STATES, Defendant. ) ) ) M o tio n to Dismiss; RCFC 1 2 (b )(1 ); 28 U.S.C. § 540C; FBI ) P o lice ; Back Pay Act of 1996; 5 ) U .S .C . § 5596(b)(1); Civil Service ) Reform Act (CSRA) ) ) ) ) ) S a n d ra Mazliah, Washington, DC, for plaintiffs. Debra D'Agostino and Joanna F rie d m a n , Washington, DC, of counsel. Carrie A. Dunsmore, with whom were Jeffrey S. Bucholtz, Acting Assistant Attorney G en era l, Jeanne E. Davidson, Director, Martin F. Hockey, Jr., Assistant Director, C o m m e rc ia l Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D C , for defendant. OPINION H E W IT T , Judge B ef o re the court are Defendant's Motion to Dismiss (defendant's Motion or Def.'s M o tio n ), Plaintiffs' Opposition to Defendant's Motion to Dismiss For Lack of Subject M a tter Jurisdiction (plaintiffs' Response or Pls.' Resp.), and Defendant's Reply to P lain tiff s' Response to Defendant's Motion to Dismiss (defendant's Reply or Def.'s R e p l y) . P la in tif f s, Federal Bureau of Investigation (FBI) Police Officers nationwide, filed a complaint with this court on August 2, 2007, alleging that the United States failed to

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in c re a s e their salaries as required by section 540C of title 28 of the United States Code. Class Complaint For Just Compensation and Damages (plaintiffs' Complaint or Compl.) ¶ 1 . Defendant moves to dismiss plaintiffs' Complaint pursuant to Rule 12(b)(1) of the R u le s of the United States Court of Federal Claims (RCFC). Def.'s Mot. 1. Because the c o u rt concludes that 28 U.S.C. § 540C is money-mandating and that the court has ju ris d ic tio n over plaintiffs' claim, defendant's Motion is DENIED. I. B a c k g ro u n d

P la in tif f s assert that they are FBI police as defined in 28 U.S.C. § 540C, Compl. ¶ 1 5 , and that "since January 1, 2003, and continuing to the present, [they have] been paid le s s than 28 [U.S.C.] § 540C affords them," id. at ¶ 21. Plaintiffs contend that 28 U.S.C. § 540C "increased [p]laintiffs' salaries effective January 1, 2003." Id. at 1. According to p l a in t if f s , "pursuant to the Back Pay Act of 1996, [they] are entitled to recover just c o m p e n sa tio n , back pay, attorney's fees, and any other necessary restitution owed to th e m ." Id. Plaintiffs assert that "28 [U.S.C.] § 540C confers a substantive right for m o n e y damages against the United States by specifying a salary to be paid to individuals f o r their work." Id. at ¶ 22. Defendant counters that "[p]laintiffs are not . . . FBI Police a s defined by 28 U.S.C. § 540C," Def.'s Mot. 3, and that this court does not possess s u b je c t matter jurisdiction over this action because 28 U.S.C. § 540C is not moneym a n d a tin g , id. at 1. Defendant also argues that "the [c]ourt lacks subject matter ju ris d ic tio n to consider the [FBI's] employment-related decisions." Id. S e c tio n 540C of title 28 of the United States Code became effective on November 2 , 2002. 28 U.S.C. § 540C. Under § 540C, "[s]ubject to the supervision of the Attorney G e n e ra l, the Director [of the FBI] may establish a permanent police force, to be known as th e FBI police." 28 U.S.C. § 540C(b)(1). Subsection (b)(5) of section 540C provides: (A) In general.­ The rates of basic pay, salary schedule, pay provisions, a n d benefits for members of the FBI police shall be equivalent to the rates o f basic pay, salary schedule, pay provisions, and benefits applicable to m e m b e rs of the United States Secret Service Uniformed Division. (B) Application.­ Pay and benefits for the FBI police under subparagraph (A )­ (i) shall be established by regulation; (ii) shall apply with respect to pay periods beginning after January 1, 2 0 0 3 ; and (iii) shall not result in any decrease in the rates of pay or benefits of a n y individual. 2

2 8 U.S.C. § 540C(b)(5). The parties' briefing discusses the history of the FBI police program at length. See D e f .'s Mot. 3-9; Pls.' Resp. 2-10. The court need not address at this time the history of th e FBI police. In this Opinion, the court is asked only to decide whether the court has su b ject matter jurisdiction over plaintiffs' claim. Def.'s Mot. 1. The court will therefore lim it its discussion to whether 28 U.S.C. § 540C is money-mandating or whether ju ris d ic tio n in the Court of Federal Claims is precluded. II. L e g a l Standards

T h e jurisdiction of the United States Court of Federal Claims is set forth in the T u c k e r Act, 28 U.S.C. § 1491 (2006). This court "shall have jurisdiction to render ju d g m e n t upon any claim against the United States founded either upon the Constitution, o r any Act of Congress or any regulation of an executive department, or upon any express o r implied contract with the United States, or for liquidated or unliquidated damages in c a s e s not sounding in tort." 28 U.S.C. § 1491(a)(1). Subject matter jurisdiction is a thresh o ld issue that must be determined at the outset of a case. Steel Co. v. Citizens for a B e tte r Env't, 523 U.S. 83, 94-95 (1998); Pods, Inc. v. Porta Stor, Inc., 484 F.3d 1359, 1 3 6 5 (Fed. Cir. 2007). "If the court finds that it lacks jurisdiction over the subject matter, it must dismiss the claim." Matthews v. United States, 72 Fed. Cl. 274, 278 (2006); see R C F C 12(h)(3). Plaintiff has the burden of establishing subject matter jurisdiction. Reynolds v. Army & Air Force Exch. Serv. (Reynolds), 846 F.2d 746, 748 (Fed. Cir. 1 9 8 8 ) (citing Zunamon v. Brown, 418 F.2d 883, 886 (8th Cir. 1969); McNutt v. Gen. M o to rs Acceptance Corp., 298 U.S. 178, 189 (1936)); Garrett v. United States, 78 Fed. C l. 668, 670 (2007). The Tucker Act "constitutes a waiver of sovereign immunity with regard to claims o v e r which the Court of Federal Claims had jurisdiction," but "the Tucker Act alone `d o e s not create any substantive right enforceable against the United States for money d a m a g e s .'" Agwiak v. United States, 347 F.3d 1375, 1379 (Fed. Cir. 2003) (quoting U n ited States v. Testan (Testan), 424 U.S. 392, 398 (1976)). "Instead, . . . another statute o r regulation must be money-mandating to create such a substantive right against the g o v e rn m e n t." Id. (citations omitted). "When a complaint is filed alleging a Tucker Act c la im based on a Constitutional provision, statute, or regulation, see 28 U.S.C. § 1 4 9 1 (a )(1 ), the trial court at the outset shall determine, . . . whether the Constitutional p ro v is io n , statute, or regulation is one that is money-mandating. If the court's conclusion is that the Constitutional provision, statute, or regulation meets the money-mandating test, th e court shall declare that it has jurisdiction over the cause, and shall then proceed with th e case in the normal course." Fisher v. United States (Fisher), 402 F.3d 1167, 1173 3

(F e d . Cir. 2005); see Adair v. United States (Adair), 497 F.3d 1244, 1251 (Fed. Cir. 2007) (c ita tio n omitted) ("If a trial court concludes that the particular statute simply is not m o n e y-m a n d a tin g , then the court shall dismiss the claim for lack of subject matter ju ris d ic tio n under Rule 12(b)(1)."). "`The determination that the source is moneym a n d a tin g shall be determinative both as to the question of the court's jurisdiction and th e re a fte r as to the question of whether, on the merits, plaintiff has a money-mandating so u rce on which to base his cause of action.'" Adair, 497 F.3d at 1251 (quoting Fisher, 4 0 2 F.3d at 1173). "If . . . the court concludes that the facts as pled do not fit within the sc o p e of a statute that is money-mandating, the court shall dismiss the claim on the merits u n d e r Rule 12(b)(6) for failing to state a claim upon which relief can be granted." Id.; see a lso Doe v. United States (Doe), 463 F.3d 1314, 1324 (Fed. Cir. 2006) ("[A] party b rin g in g suit under the Tucker Act may then lose on the merits if he or she is not one of th e persons entitled to pay under the statute or regulation."). A statute is money-mandating "if, but only if, it `can fairly be interpreted as m a n d a tin g compensation by the Federal Government for the damage sustained.'" United S ta te s v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003) (quoting Testan, 424 U .S . at 400). "It is enough, then, that a statute creating a Tucker Act right be reasonably a m e n a b le to the reading that it mandates a right of recovery in damages. While the p re m is e to a Tucker Act claim will not be `lightly inferred,' a fair inference will do." Id. (in terna l citation omitted). In Agwiak, the Federal Circuit stated that "the use of the word `s h a ll' generally makes a statute money-mandating." Agwiak, 347 F.3d at 1380 (citations o m itte d ). "A statute is not money-mandating when it gives the government complete d is c re tio n over the decision whether or not to pay an individual or group." Doe, 463 F.3d a t 1324 (citations omitted). However, the Federal Circuit has "found that a statute is not w h o lly discretionary, even if it uses the word `may' when an analysis of congressional in te n t or the structure and purpose of the statute reveal one of the following: (1) the s ta tu e has `clear standards for paying' money to recipients, (2) the statute specifies `p re c is e amounts' to be paid, or (3) the statute compels payment once certain conditions p re c e d e n t are met." Id. (citations omitted). III. D is c u ss io n A. P la in tif f s' Claims Under 28 U.S.C. § 540C

D e f en d a n t moves to dismiss plaintiffs' Complaint for lack of subject matter ju ris d ic tio n because, according to defendant, the statute on which plaintiffs rely, 28 U .S .C . § 540C, is not money-mandating. Def.'s Mot. 1. Defendant argues that, because th e statute states that "the Director may establish a permanent police force," 28 U.S.C. § 5 4 0 C (b )(1 ) (emphasis added), the statute "gives the government complete discretion over 4

th e decision whether or not to pay an individual or group," Def.'s Mot. 11. According to d e f en d a n t, "Because 28 U.S.C. § 540C is a discretionary statute, it does not create a s u b s ta n tiv e right to money damages within the meaning of the Tucker Act." Id. at 12. Defendant notes that "the condition precedent to the purported mandatory pay provision is th a t the Director establish a permanent FBI police force under the authority of the s ta tu te ." Id. at 11. Defendant argues that "[p]laintiffs' complaint fails to allege that the D ire c to r has exercised his discretion under the statute or implemented its authority in estab lish ing such an FBI police force." Id. at 12. According to defendant, defendant's " a rg u m e n t is not that plaintiffs' complaint fails to establish jurisdiction because it c o n ta in s a condition precedent, but rather that the plaintiffs' complaint lack[s] jurisdiction b e c au s e the Director of the FBI did not establish the FBI police, and as such, no one c o u ld be entitled to money damages under the statute." Def.'s Reply 3. Plaintiffs argue that 28 U.S.C. § 540C is money-mandating. Pls.' Resp. 13 ("28 U .S .C . § 540C(5)(A) both uses `shall[,]' which demonstrates that the pay is not d is c re tio n a ry, and specifies a certain sum owed to Plaintiffs (the salary paid to the Secret S e rv ic e Uniformed Division)."). According to plaintiffs, defendant's "`condition p re c ed e n t' argument" has already been rejected. Id. at 15 (citing Doe, 463 F.3d at 13242 5 ). Plaintiffs argue that, "while the statute [28 U.S.C. § 540C] gives the Director d i sc r e tio n to establish the FBI Police, the statute mandates that once he does, those d e f in e d as FBI Police receive pay equivalent to the Uniformed Division of the Secret S e rv ic e ." Id. at 16. Plaintiffs state ­ correctly ­ that "the presence of a condition itself does not defeat a claim that a statute is money-mandating, although whether the condition is met bears on th e merits of a claim." Id. Doe involved a statute that provided that "once the [ D e p a rtm e n t of Justice] makes a determination that a particular position is entitled to [ a d m in is tra tiv e ly uncontrollable overtime (AUO)] pay, the employee `shall' receive p re m iu m pay under the statute." Doe, 463 F.3d at 1325. The Federal Circuit held that " th e statute is money-mandating because once a condition is met, namely that the head of a n agency states that a position meets the criteria listed . . . , the statute requires payment to employees with that position." Id. (citations omitted). In In re United States, the F e d e ra l Circuit held that a statute "clearly is a money-mandating statute, . . . [where] it p ro v id e s that a bankruptcy judge `shall receive as full compensation for his services, a s a la ry at an annual rate that is equal to 92 percent of the salary of a judge of the district co u rt of the United States . . . .'" In re United States, 463 F. 3d 1328, 1334 (Fed. Cir. 2 0 0 6 ) (quoting 28 U.S.C. § 153(a)). The Federal Circuit further noted, however, that " [ th e statute's] money-mandating command only benefits an individual who actually h o lds the position of bankruptcy judge," id. at 1334 (citation omitted), and that "the Court

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o f Federal Claims should have dismissed . . . [the] claim under its Rule 12(b)(6) for f a ilu re to state a claim upon which relief could be granted," id. at 1335. Defendant distinguishes Doe and In re United States from plaintiffs' case "because th e `FBI Police' contemplated by section 540C has never been established and, a c c o rd in g ly, section 540C has not been implemented into law." Def.'s Reply 4 ("While th e relevant statutes in Doe and In re United States both contained conditional language, it was clear that the statutes at issue provided for the payment of money to some e m p lo ye e s - in Doe it was other Department of Justice attorneys, in In [r]e United States it w a s active bankruptcy judges - just not to the particular plaintiffs in the lawsuit."). According to defendant, "[p]laintiffs have the burden to show that this [c]ourt has ju ris d ic tio n , and as such must show that the statute was actually implemented." Id. at 5. Defendant is correct that plaintiffs have the burden of establishing subject matter ju ris d ic tio n , Reynolds, 846 F.2d at 748, but defendant cites to no case, and the court is not a w a re of any, that supports the proposition that plaintiffs must show that 28 U.S.C. § 5 4 0 C was actually implemented in order to establish jurisdiction.1 Section 540C "has `c le a r standards for paying' money to recipients," "specifies `precise amounts' to be p a id ," and "compels payment once certain conditions precedent are met." Doe, 463 F.3d a t 1324; see 28 U.S.C. § 540C(b) (providing standards for the payment of money to FBI p o lic e and payment equivalent to that of the Secret Service Uniformed Division once an F B I police is established). Section 540C is money-mandating and, therefore, the Court of F e d e ra l Claims has jurisdiction over plaintiffs' Complaint. B. P la in tif f s' Claims Under the Back Pay Act

D e f en d a n t further argues that plaintiffs do not satisfy the Back Pay Act and, th e re f o re , that "this [c]ourt lacks jurisdiction to consider plaintiffs' back pay claim." Def.'s Mot. 13. The Back Pay Act requires that an employee be "found by appropriate a u th o rity under applicable law, rule, regulation, or collective bargaining agreement, to h a v e been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the e m p lo ye e ." 5 U.S.C. § 5596(b)(1). Defendant argues that "plaintiffs have failed to allege an y unwarranted personnel action prohibited by statute, regulation, or law which in turn a u th o riz e s suit in [the Court of Federal Claims]." Def.'s Mot. 13. As discussed above, th e court has determined that 28 U.S.C. § 540C is a money-mandating statute covered by th e Tucker Act. See supra Part III.A. Therefore, a back pay claim based on 28 U.S.C. § 5 4 0 C falls within the jurisdiction of the Court of Federal Claims. See Worthington v. The question of implementation of 28 U.S.C. § 540C appears to the court to implicate the merits issue of whether plaintiffs are persons in fact entitled to pay under that statute. 6
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U n ite d States, 168 F.3d 24, 26 (Fed. Cir. 1999) ("The Back Pay Act is such a `moneym a n d a tin g ' statute when based on violations of statutes or regulations covered by the T u c k e r Act." (citing United States v. Connolly, 716 F.2d 882, 887 (Fed. Cir. 1983))). C. W h e th e r Jurisdiction is Precluded by the CSRA

D e f en d a n t also argues that "the Court lacks subject matter jurisdiction to consider th e [FBI's] employment-related decisions." Def.'s Mot. 1. According to defendant, thro u g h the Civil Service Reform Act (CSRA), "Congress intended to shield the FBI's e m p lo ym e n t-re la te d decisions from this [c]ourt's review," id. at 14 (citing United States v . Fausto (Fausto), 484 U.S. 439, 454 (1988)), and "the appropriate authority [for review] in c lu d e s the Federal agency engaged in the alleged prohibited action, or the Merit S yste m s Protection Board," id. Defendant cites to Fausto, 484 U.S. at 454, and to Roberts v . U.S. Department of Justice (Roberts), 366 F. Supp. 2d 13, 21 (D.D.C. 2005), to support its argument that FBI employees have been precluded from seeking judicial review at the C o u rt of Federal Claims for personnel actions, Def.'s Mot. 14. The types of personnel actions encompassed by the CSRA are those based on u n a c ce p ta b le job performance, 5 U.S.C. § 4303; see Fausto, 484 U.S. at 445-46, p ro h ib ite d personnel practices such as "unlawful discrimination, coercion of political a c tiv ity, nepotism, and reprisal against so-called whistleblowers," Fausto, 484 U.S. at 446 ( c itin g 5 U.S.C. § 2302); 5 U.S.C. §§ 2301-02, minor adverse personnel actions such as a s u s p e n sio n for 14 days or less, 5 U.S.C. § 7502; see Fausto, 484 U.S. at 446, and major a d v e rse personnel actions such as "a removal; a suspension for more than 14 days; a re d u c tio n in grade; a reduction in pay; and a furlough of 30 days or less," 5 U.S.C. § 7 5 1 2 ; see Fausto, 484 U.S. at 447. In Fausto, the United States Supreme Court held that th e CSRA precluded judicial review in the Claims Court under the Back Pay Act of p e rs o n n e l actions taken against federal employees when those actions were covered by th e CSRA. Fausto, 484 U.S. at 454-55. The Federal Circuit discussed Fausto in W o rth in g to n . Worthington, 168 F.3d at 26-27. The Worthington court reiterated that " F a u sto deprives the Court of Federal Claims of jurisdiction over personnel actions c o v e re d by the CSRA." Id. at 26 (citations omitted). The court also noted, however, that th e CSRA "does not encompass every adverse personnel action against a federal e m p lo ye e ." Id. (citation omitted); see also id. at 27 ("Being forced to work a compressed w o rk schedule does not, for example, constitute a removal, a suspension, a reduction in g rad e or pay, a furlough, or a reduction-in-force, as enumerated in those provisions."). In W o rth in g to n , the Federal Circuit held that, because the plaintiff's claim was "not within th e coverage of the CSRA and because it otherwise f[ell] within the jurisdictional grant of th e Tucker Act, the Court of Federal Claims ha[d] jurisdiction to adjudicate th[e] d is p u te ." Id. Like Worthington, and unlike Fausto, this case does not involve a personnel 7

a c tio n governed by the CSRA because plaintiffs' claim for back pay is not based on p e rs o n n e l actions for unacceptable job performance, prohibited personnel practices, or a d v e rs e personnel actions. See Compl. passim; see also Worthington, 168 F.3d at 27; F a u s to , 484 U.S. at 445-47, 454-55. In Roberts, the District Court for the District of Columbia discussed the final rule a d o p te d by the Department of Justice (DOJ) "establishing procedures under which FBI e m p lo ye e s may make disclosures of information protected by the CSRA." Roberts, 366 F . Supp. 2d at 19. The court stated that "[t]he Rule . . . does not permit a complainant to s e e k judicial review or otherwise pursue a reprisal case through entities external to and in d e p e n d en t of the DOJ." Id. at 20 (citation omitted). The court in Roberts noted that " th e CSRA prohibits specified minor personnel actions whose motivation is the violation o f `any law, rule, or regulation implementing, or directly concerning, the merit system p rin c ip le s contained in section 2301.'" Id. at 21 (quoting 5 U.S.C. § 2302(b)(11)). "That C o n g re ss deliberately excluded FBI employees from the provisions establishing a d m in is tra tiv e and judicial review for personnel actions involving violations of CSRA im p le m e n tin g regulations suggests that Congress meant to preclude judicial review for s u c h actions." Id. (citing Fausto, 484 U.S. at 439). Unlike Roberts, this case does not in v o lv e employment-based reprisals for whistleblowing. See Roberts, 366 F. Supp. 2d at 1 9 -2 1 . Instead, this case concerns plaintiffs' entitlement to back pay for the failure of d e f en d a n t to "increase[] [p]laintiffs' salaries in accordance with [28 U.S.C. § 540C]." Compl. 1. Even if Roberts were applicable to plaintiffs' case, which the court finds it is n o t, its holding would be persuasive ­ not binding ­ authority on this court. Because p la in tif f s' claims do not fall within the purview of the CSRA, the Court of Federal C la im 's jurisdiction over plaintiffs' Complaint is not precluded. IV. C o n c lu s io n

F o r the foregoing reasons, the court has jurisdiction to decide the merits of this c a se and defendant's Motion is DENIED.2 Defendant shall file its answer or responsive p le a d in g in accordance with RCFC 12(a)(2)(A).

In Defendant's Reply to Plaintiffs' Response to Defendant's Motion to Dismiss (defendant's Reply or Def.'s Reply), defendant asserts that "even if the Court finds section 540C to be money-mandating, plaintiffs' complaint should nevertheless be dismissed for failure to state a claim upon which relief could be granted, as the plaintiffs are not employed under this statute." Def.'s Reply 4 n.2. The court does not regard an assertion made for the first time in a footnote in a reply as a motion to dismiss under Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (RCFC). 8

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IT IS SO ORDERED. s/ Emily C. Hewitt EMILY C. HEWITT Judge

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