MONZO v. USA

Filing 14

UNPUBLISHED OPINION denying 4 Motion to Dismiss - Rule 12(b)(1). Signed by Senior Judge Eric G. Bruggink. (dls) Copy to parties.

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No. l2-724C
(Filed: November 27, 2013)

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CHARLES J. MONZO,

7

2013

U.S. COURT OF
FEDERAL CLAIMS

Plaintffi

THE UNITED STATES,
Defendant.

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OPINION

BRUGGINK, Judge
Plaintiff claims he is owed a cash award for a suggestion he made to his
employer, the Social Security Administration, pursuant to its Employee
Suggestion Program. Defendant has moved to dismiss the complaint for lack
ofjurisdiction. The motion is fully briefed, and oral argument is unnecessary'
For the reasons explained below, we deny the motion to dismiss.
BACKGROUND.
Federal agencies are authorized by 5 U.S.C. $ 4503 to award cash
bonuses and/ or honorary recognition to employees who, "by [their]
contribute[] to the
suggestion, invention, superior accomplishment
efficiency, economy, or other improvement of Govemment operations or
achieve[] a significant reduction in paper work." 5 U.S.C. $ 4503 (2012). To
that end, the Social Security Administration ("SSA") established its Employee

.

rThese background facts are drawn from plaintiffls complaint, attachments to
his complaint, and the attachments to defendant's motion to dismiss. The facts
are mostly undisputed.

Suggestion Program'(ESP') and promulgated rules for the program in its
Personnel Manual for Supervisors.

Plaintiff, Mr. Monzo, worked for the SSA for thirty years until he
retired in 2006. During the relevant time period, he worked at the Philadelphia
Regional Office for Quality Assurance. He suggested to SSA that it develop
an automated telephone system for beneficiaries to report wages to the SSA's
Supplemental Security Income Program.2 Prior to an automated system,
program recipients had to deliver wage reports in hard format or via fax. The
data then had to be manually entered into each beneficiary's record. Plaintiff
alleges that he first presented his idea to his supervisors orally in the summer
of 1998 and then again in September of 1998. He followed up the oral
suggestion with a formal written suggestion in March of 1999 to the Central
Suggestion Team in SSA's Baltimore, Maryland Central Office. PX 3.r SSA
designated the official suggestion as No. 9900789.
SSA denied the first written suggestion in April 1999 in a report, stating
that prior work teams had twice previously suggested the same thing. PX 4
(Suggestion Evaluation Report, Apr. 27, 1999). Plaintiff requested
reconsideration two years later on April 27,2001, arguing that his oral
suggestion predated either ofthe cited team suggestions. SSA first deemed the
request to be a new suggestion and denied it in September 2001 because, at
that time, "SSA ha[d] made no commitment to implement" the automated
reporting system suggestion. PX 6 (Suggestion Evaluation Report, Sep. 21,
2001). The second denial did not mention the reason given in the first denial.

Plaintiff requested reconsideration of the September 2001 denial and
asked that his suggestion remain pending because SSA had undertaken a pilot
program to test an automated telephone reporting system in 2002. PX 7 (Apr.
22,2002). That request was met by a denial on May 16,2002. The reason
given by SSA was that plaintiffls suggestion had already been "thoroughly
evaluated" and plaintiff had not submitted any new material "that wanantIed]
an additional review." PX 8. Plaintiff requested reconsideration once again
in June 2002, see PX 9, and enclosed a copy ofa SSA document that contained
zRecipients of supplemental social security income must report actual wages
on a monthly basis.

3"PX" refers to those exhibits attached to plaintiff s complaint. "DX" refers
to exhibits attached to defendant's motion to dismiss.

a conective action plan in which SSA detailed a pilot program employing
"touchtone telephone technology for reporting purposes." PX 10 at 8. This
was met with a denial on July 9,2002. PX 11. This fourth decision gave as
a reason that there had been prior management consideration, citing the two
prior suggestions referenced in the first denial. It also stated that an additional
prior consideration of the idea had taken place in a July 1998 management
meeting. See id.
On November 29,2002, apparently in response to an email sent by
plaintiff after the fourth denial, SSA informed Mr. Monzo that his suggestion
would remain pending while the pilot program was completed and a final
decision made on whether to implement. PX 13 (Letter from Phil Young,
Director, Office ofAssistance and Insurance Program Quality, N ov .29,2002).

Finally, in 2008, plaintiff received the fifth denial of his suggestion.
The SSA Central Office again cited the July 10, 1998 management
consideration of the idea and stated that, because that consideration predated
plaintiff s September 1998 oral suggestion, plaintiff was not eligible for an
award. In the interim, SSA concluded the pilot program and implemented a
telephonic wage reporting system after approval by the Office of Management
and Budget. Plaintiff continues to maintain that his suggestion predated any
management consideration and that he is thus owed an award for the
substantial savings resulting from the automated system.

DISCUSSION

In deciding a motion to dismiss, we construe the allegations in the
complaint in the light most favorable to plaintiff and assume all unchallenged
factual allegations to be true. See, e.g., Henke v. United States, 60 F'3d 795,
797 (Fed. Cir. 1995). Plaintiff has the bwden of establishing subject matter
jurisdiction. McNutty v. Gen. Motors Acceptance Corp. Oflnd.,298 U'S. 178,
I 89 ( I 93 6). Defendant may challenge plaintiff s allegations, and the court is
free to consider materials outside of the pleadings in deciding the question of
jurisdiction. Shoshone Indian Tribe ofthe Wind River Reservation v. United
States,672 F.3d 1021, 1030 (Fed. Cir.2012).

The Court of Federal Claims' jurisdiction lies primarily in cases in
which a plaintiff can identiS a source of law giving him the right to demand
the payment of money. The court's principle jurisdictional statute allows the
court to "render judgment 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 .
. . in cases not sounding in tort." 28 U.S.C. $ 1a91(a)(l) (2006). This means
claimant must be able to identifo a "money-mandating" provision of law,
regulation, or contract "affording it a right to money damages." Terran v.
Sec'y ofHeath and Human Servs., 195 F.3d 1302, 1309 (Fed. Cir. 1999).
that

a

Defendant contends that neither 5 U.S.C. $ 4503 nor SSA's Employee
Suggestion Program guidelines are money-mandating. Defendant also argues
that plaintiff has not alleged the necessary elements of an implied-in-fact
contract with SSA. The result, for defendant, is that plaintiffhas not alleged
a substantive source of law giving rise to jurisdiction under the Tucker Act.

Plaintiff s response is first that, although 5 U.S.C. $ 4503 read alone
may not be money-mandating, in combination with the agency's program
guidelines, the agency has relinquished the discretion afforded by the statute
and created a regulatory framework under which a reward payment is
mandated if certain conditions are met. Plaintiff also argues that he has
alleged the existence ofa valid implied-in-fact contract.

I.

SSA Has Obligated Itself To Pay Money Under The Employee Suggestion
Program Under Certain Conditions

There is no dispute between the parties that the statute, in isolation,
does not mandate the payment of money. This court has held likewise.
^See,
e.g., Cooley v. United States, 76 Fed. CL.549,556-57 (2007) (discussion of
section 4503). Where the agency is vested with unfettered discretion, we have
held that employee suggestion programs do not provide a basis forjurisdiction
in this court. See, e.g., Anderson v. United States,73 Fed. Cl. 199,2001
(2006); Rosano v. United States, 9 Cl. Ct. 137,1445-45 (1985). Those cases
cite the Court of Claims' decision in Adair v. United States, in which the court
held that, "a statue providing for solely discretionary payment of money does
not give rise to a'right to recover money damages from the United States."'
648F.2d 1318, 1322 (1981) (quoting United States v. Testan,424U.S.392,
396 (197 6)). In that case, a statute authorizing special incentive pay to
physicians in the Public Health Service and the military was not moneymandating because it gave discretion to award the pay under certain
circumstances but did not require it. Id. at 1322-23. This case does not end
there, however.

Part 451 of Title 5 of the Code of Federal Regulations instructs
agencies to "develop one or more award programs for employees covered by
this subpart." 5 C.F.R. $ 451.103 (2013). Subpart 104 states that an agency
"may grant a cash, honorary, or informal recognition award . . . on the basis
of-(l) a suggestion, invention, superior accomplishment . . . that contributes
to efficiency, economy, or other improvement of Govemment operations." /d
$ 451.104. At this multi-agency level of regulation, agencies clearly retain
discretion whether to award payments. Our inquiry goes further, however.

Subchapter 3 ofChapter S45l ofthe SSA's Personnel Manual for
Supervisors goes into great detail in providing guidelines for determining
whether to reward employee suggestions. The program guidelines detail who
is covered, definitions for various terms used, how employees submit a
suggestion, how a suggestion is to be evaluated, who evaluates it, limitations
on what factors may be considered, a time frame for decision, conditions for
award, amounts of award, reopening consideration ofpreviously considered
suggestions, and reconsideration of previous suggestions. See DX 1 at l-2
(Employee Suggestion Program Table of Contents).

In the section entitled "Awards," the guidelines lay out the conditions
for granting an award and how to determine the amount of the award. The
conditions are listed as (a) "Adoption of the suggestion in full or in part, or if
the actual idea is not adopted but stimulates a better solution to an existing
problem; and [(b)] Management's commitment to implement; no suggestion
is eligible for adoption unless it can and will be implemented." DX I at 15.
The next subsection goes on to instruct how to calculate the award and points
to Exhibit 4 at end ofthe subchapter for further guidance. This subsection also
states that the "contribution must save $1,000 or more."
The Federal Circuit has recognized that "a statute or regulation that
provides for payment of money can qualifr as money-mandating if the
plaintiff s claim is that the statute or regulation creates aright to payment upon
a showing that the plaintiff qualifies for that payment by satisffing designated
statutory or regulatory requirements." Pricev. Panetta,674F.3d 1335, 1339
(Fed. Cir. 2012). The statute or regulation "may grant the claimant a right to
recover damages either expressly or by implication." Navaio Nationv. United
States, 537 U.S. 488, 506 (2003). If a statute or regulation does mandate the
payment of money, it is sufficient to trigger jurisdiction if plaintiff shows that
"he is within the class of plaintiffs entitled to recover under the moneymandating source." Jan's Helicopter Serv. v. United States,525 F.3d 1299,

1307 (Fed. Cir. 2008). The question of whether the claimant actually "'falls
within the terms of the statute"' or regulation is a merits issue. Greenlee
County v. United States,487 F.3d 87l, 876 (Fed. Cir. 2007) (quoting Fisher
v. United States, 402 F.3d 1167 , ll72 (Fed. Cir. 2005).

The program guidelines lay out two conditions for award. One is that
the suggestion is adopted in full or in part, or stimulates a better solution, and
the other condition is a commitment by the agency to implement the
suggestion. The guidelines define the term "Adopted Suggestion" to mean an
"idea evaluated by the office with primary functional responsibility, benefitting
the govemment and receiving a written commitment from management to
implement." DX 1 at 3. "Implementation" occurs when "actions substantially
the same as those proposed by the suggester are effected by management, even
if minor modifications or improvements in the original proposal have been
made." Id. These sections and definitions, read together, clearly suggest that
SSA wil/ grant a cash award when the suggestion is evaluated by the office
with responsibility over the covered section, that office commits to implement
the suggestion, is actually or will be actually implemented, and the
suggestion saves over $1000 dollars.

it

Defendant would have the court read language elsewhere in the
guidelines as preserving agency discretion as to whether to award. In section
D, "Evaluating Suggestions," various factors are listed for evaluators to
consider. The second directs the agency to "[d]ecide whether or not to adopt
the suggestion and ifthe suggestion is adopted, consider granting an award."
DX I at 12. This defendant avers is a clear statement that awards are not
mandatory even if all conditions are met. We disagree. That statement, read
in context with the rest ofthat section and surrounding sections, provides only
that evaluators are to decide whether the suggester is eligible for an award.
The fifth factor listed in the same section indicates this is the correct
understanding:
Evaluate each suggestion on its merits. Evaluators
should be careful not to disprove a suggestion just because the
idea appears to bejob-related, an existing directive precludes the
use of the idea suggested or the suggested idea is already
covered by an existing directive. In certain situations,
suggestions of these types may be adopted. CSS should be
contacted for additional instructions.

Id.

This paragraph references, in part, the next section in the subchapter,
section G, "Special Considerations," in which evaluators are required to
consider whether an adopted suggestion is 'Vithin the suggester's job
responsibilities." DX I at 13. If it is, "normally, . . . he/she will not be eligible
for an award" unless "the scope and magnitude ofapplication ofthe suggestion
far exceed what would reasonably be expected of the employee." 1d In this

special circumstance, even though an idea is to be adopted, the suggester will
not be paid an award. The implication is that, if that circumstance does not
apply, the suggester will be paid.

Section G also instructs evaluators to complete the whole adoption
package, which includes the evaluation report, signed SSA- l7 I -U5 form, and
a "brief explanation ofhow the idea submitted falls within the suggester'sjob
responsibilities ." Id. The SSA-171-U5 form is the form for processing a cash
award. The package is then sent to the final decision maker(s) at the Central
Suggestion Section ("CSS"). This suggests that, unless ineligible, adopted
suggestions come with cash awards if the benefit to the agency exceeds the
$1000 threshold.

Further buttressing this reading are the duties of the evaluators,
managers of evaluators, and the CSS. Evaluators are instructed to, among
other things, "[p]repare a Form SSA-171-U5, Recommendation for Cash
Award, if the suggestion is adopted and a cash award is applicable." DX I at
5. Along with that form, the evaluator is to send a worksheet "to support
tangible benefits." Id. That sheet is a form for calculating tangible benefits
in determining the award amount. See DX I at 16-17 ,Ex. 4. Among the duties
listed for supervisors or managers of evaluators is to "sign the appropriate
line(s) of the SSA-171-U5, Recommendation for Cash Award" if the

DX I at 6. They are also instructed to assist the
CSS in determining "whether a suggestion falls within a suggester's job
responsibilities." .Id CSS's duty list contains an instruction to "[e]nsure that
suggestion awards meet the guidelines, including ( I ) Attempting to determine,
if necessary, if a suggestion falls within the suggester's expected job
responsibilities. (2) Reviewing and approving SSA- 1 71-U5, Recommendations
for Cash Award, and award computations prior to authorization of funds." DX
I at 7. All of this suggests that, if a suggestion meets the criteria and the
suggester is eligible, an award should be forthcoming.
suggestion is to be adopted.

In the section dealing with how to compute award amounts, there is a
subsection called "Adoption With No Cash Award." It provides that, "[i]f a

suggestion is within the employee's job responsibility or when the benefits
from an adopted employee suggestion have a value ofless than $1000, no cash
award is payable." DX I at 17. The subsection goes on to state that a thank
you letter may be sent anyway. No other scenario for adoption with no
payment is contemplated.

SSA has bound itself to these guidelines. Although it still has
discretion over how much to award, see DX I at 16-17, Exs. 4-5, the decision
whether to award a payment has been made. If the conditions are met, there
should be a payment. Cf. Ridenour v. United States, 44 Fed. Cl. 202,208
(1999) (stating that a prior version of SSA's ESP guidelines required the
payment of money if the employee was eligible and going on to hold that this
created an implied-in-fact contract between suggesters and SSA).

Plaintiff has alleged that he submitted a written suggestion, that the
suggestion was implemented, and that SSA nevertheless declined to pay him
an award. Plaintiff is within the class of claimants potentially entitled to
recover under the regulation. Nothing more is required by the Tucker Act to
trigger jurisdiction. Whether Mr. Monzo is entitled to an award-that is to say
whether there was prior agency consideration of the idea or whether some
special exception applies-is a merits question for another day. We have
jurisdiction over the complaint.

II.

Whether Plaintiff Has Alleged the Existence Of
Contract Suffi cient For Jurisdiction

An Implied-In-Fact

Plaintiffalso contends that he has plead the existence ofan implied-infact contract, which he alleges was formed when the agency implemented his
suggestion. Defendant denies that such a contract could have been formed
because the agency repeatedly told plaintiffthat it was not adopting plaintiff s
suggestion or that he was not eligible for award due to prior management
consideration. Plaintiffresponds that, in essence, the agency accepted his offer
by performance when it implemented the telephone wage reporting system.
We need not reach the question of whether an implied-in-fact contract
was formed. As explained above, the guidelines themselves mandate payment
if certain conditions are met. In deciding whether SSA accepted plaintiffs
offer (suggestion) by performance (implementing the automated system) we
would be confronted with the same issues. "Acceptance of an offer can be
manifested by parties' conduct, and conduct alone can create an implied-in-

fact contract." Scott Timber Co. v. United States, 97 Fed. Cl. 685, 696 (2011),
rev'd on other grounds, 692 F.3d 1365 (Fed. Cir, 2012). Defendant's
contention that it did not implement his suggestion is thus misplaced at this
iuncture.

CONCLUSION
We have jurisdiction over the complaint. Whether plaintiff is entitled
to an award under the ESP is a separate question. Accordingly, defendant's
motion to dismiss is denied.

ERIC G. BRUGGI