MAKOWIEC v. USA

Filing 42

denying 39 Plaintiff's Motion for Summary Judgment and granting Defendant's motion for summary judgment; REPORTED OPINION. The Clerk is directed to enter judgment. Signed by Senior Judge Edward J. Damich. (CF) Service on parties made.

In the United States Court of Federal Claims
No. 16-747
(Filed: April 12, 2018)
FOR PUBLICATION

************************************
* Motion for Summary Judgment; RCFC 56;
SARA MAKOWIEC,
* Government Employees Training Act;
* 5 U.S.C. § 4103; 5 U.S.C. § 4107;
Petitioner,
* 5 U.S.C. § 4101(4); 5 U.S.C. § 4108;
* 5 C.F.R. § 410.309; Aerolineas Argentinas v.
v.
* United States, 77 F.3d 1564 (Fed. Cir. 1996);
* Clapp v. United States, 127 Ct. Cl. 505 (1954);
THE UNITED STATES,
* Am. Tel. & Tel. Co. v. United States, 177 F.3d
* 1368 (Fed. Cir. 1999); Illegal Exaction; Training;
Respondent.
* Continue-in-Service Obligations; Untimeliness;
* ARDEC; Void Ab Initio; Contract; Agreement
*************************************
Ryan P. Avery, Mirageas & Avery, Milford, MA, for Plaintiff.
Alison S. Vicks, Trial Attorney, Chad A. Readler, Acting Assistant Attorney General,
Robert E Kirschman, Jr., Director, Franklin E. White, Assistant Director, United States
Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, for
Defendant; of counsel, Leslie A. Beuttell, Litigation Attorney, Agency Litigation Division,
Civilian Personnel Litigation Branch, United States Army Legal Services, Fort Belvoir, VA.
ORDER AND OPINION
Damich, Senior Judge:
On May 18, 2015, Plaintiff filed a complaint in the United States District Court for the
District of Massachusetts alleging that Defendant wrongfully required her to repay tuition
assistance she received in order to attend graduate school. See Makowiec v. United States Dep’t
of Defense, 2016 WL 1611434 (D. Mass. 2016). On April 21, 2016, the district court transferred
the action to the Court of Federal Claims. Id.
On June 27, 2016, Plaintiff filed an amended transfer complaint in this Court. She sought
monetary damages under an express contract with Defendant and the return of money allegedly
illegally exacted by it. She further asked for declaratory and permanent injunctive relief. See
generally Am. Compl. On October 3, 2016, Defendant moved to dismiss Plaintiff’s requests for
declaratory and injunctive relief; Senior Judge Firestone granted this motion on October 12,
2016. See ECF No. 12.

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On May 1, 2017, Chief Judge Braden ordered the Clerk to randomly reassign the case
from Senior Judge Firestone; Senior Judge Futey was assigned to the case. A scheduling order
was then issued for summary judgment motions. On September 27, 2017, Chief Judge Braden
again ordered the Clerk to randomly reassign the case from Senior Judge Futey. On the same
day, this Court was assigned to the case. In accordance with this Court’s scheduling order,
Plaintiff timely filed her motion for summary judgment and, thereafter, Defendant filed its crossmotion for summary judgment.
Most of the parties’ summary judgment briefs were aimed at the contractual issue, not
illegal exaction. It was not until Defendant’s reply brief that it challenged this Court’s
jurisdiction to hear a case based on a contract theory of recovery, arguing that there was no
contract or, in the alternative, the contract is unenforceable because an appointed government
employee cannot sue the U.S. for breach of contract related to employment. Defendant also
challenged this Court’s jurisdiction regarding the illegal exaction claim alleging that Plaintiff
failed to identify any statutes or regulations that would allow her to recover money allegedly
illegally exacted by the Government. In her surreply, she agreed that an appointed government
employee cannot sue the U.S. for breach of contract related to employment but maintained that
she identified particular money mandating statutes giving this Court jurisdiction.
On January 30, 2018, this Court issued its Order and Opinion on the summary judgment
motions. Therein, it held that despite retaining jurisdiction on contract claims when the United
States is a party, it nonetheless found that the arguments based on contract were withdrawn. This
left illegal exaction as the only theory of recovery. However, because illegal exaction was only
treated cursorily in prior submissions, the Court ordered further briefing on this sole remaining
issue.
Both parties timely filed their renewed motions for summary judgment in accordance
with the Court’s scheduling order. The matter is fully briefed and ripe for decision.
For the reasons stated below, the Court DENIES Plaintiff’s renewed motion for summary
judgment and GRANTS Defendant’s motion for summary judgment.
I.

Statement of Facts

The Court’s January 30, 2018 Order includes a complete recitation of the facts, but the
Court believes that it is worthwhile to review here the pertinent facts relevant to the illegal
exaction issue:
1. Plaintiff began taking her Master’s classes at Rensselear Polytechnic Institute (“RPI”)
on January 23, 2012, the first day of the spring 2012 semester.1

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The class Plaintiff attended on this date (Math 4500), however, neither counted toward
the Master’s degree nor was completed by Plaintiff. Def.’s Renewed Mot. at 4.
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2. She signed an Employee and Training Agreement (“E&T Agreement”) with her
government employer, Benet,2 on January 24, 2012.
3. In relevant part, the E&T Agreement provided: “If the intern accepts funding
assistance for educational expenses, a service obligation is created. The obligation to
the intern is that they agree to remain with the Department of Defense (preferably
RDECOM) for the period of time required by regulations. If the intern breaks the
service agreement, the Government will recover any un-liquidated obligations by
taking any legal means allowed by statute and/or regulation.” Appx69.
4. ARDEC paid all of Plaintiff’s $41,432.70 graduate school tuition.
5. Plaintiff resigned from Benet on September 6, 2013, 22 weeks before her service
obligation ended.
6. On demand, she eventually paid the entire cost of her tuition back to the
government.
II.

Standard of Review

The Rules of the Court of Federal Claims (“RCFC”) provide that summary judgment is
appropriate “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.” RCFC 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48
(1986). A dispute is “genuine” only if the evidence is such that a reasonable jury could return a
verdict for the non-moving party. Anderson, 477 U.S. at 248. A fact is only “material” if it
might “affect the outcome of the suit under the governing law.” Id. “Contract interpretation is a
question of law generally amenable to summary judgment,” for questions of law do not turn on
factual disputes. Varilease Tech. Group, Inc. v. United States, 289 F.3d 795, 798 (Fed. Cir.
2002). There are no genuine disputes of material fact and, therefore, this matter is ripe for
review.
III.

Discussion
A. The Basic Law of Illegal Exaction Claims

The Tucker Act provides jurisdiction to recover on an illegal exaction claim. To plead
illegal exaction, a plaintiff must demonstrate that he or she, “‘has paid money over to the
Government, directly or in effect, and seeks return of all or part of that sum’ that ‘was
improperly paid, exacted, or taken from the claimant in contravention of the Constitution, a
statute, or a regulation.’” Fireman v. United States, 44 Fed. Cl. 528, 534 (1999) (quoting
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Benet is a subordinate organization of the Weapons & Software Engineering Center,
which is a subordinate of the United States Development and Engineering Center (“ARDEC”),
which is a subordinate of the US Army Research, Development, and Engineering Command
(“RDECOM”). Dkt. No. 38 at 2 n.2.
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Aerolineas Argentinas v. United States, 77 F.3d 1564, 1572-73 (Fed. Cir. 1996). To put it
bluntly, “an illegal exaction has occurred when the Government has the citizen’s money in its
pocket.” Clapp v. United States, 127 Ct. Cl. 505, 512 (1954).
B. The Government Employees Training Act
The relevant statutes and regulations at the center of this dispute are those promulgated
under the Government Employees Training Act (“GETA”), 5 U.S.C. §§ 4100 et seq.
Congress enacted GETA “in order to assist in achieving an agency's mission and
performance goals by improving employee and organizational performance[.]” 5 U.S.C. §
4103(a). In doing so, Congress authorized the heads of agencies to select and assign an
employee to training and pay or reimburse the costs of academic training so long as the training
“contributes significantly to—meeting an identified agency training need; resolving an identified
agency staffing problem; or accomplishing goals in the strategic plan of the agency[.]” 5 U.S.C.
§ 4107(a)(1)(A)-(C). Further, Congress specifically withheld an agency’s ability to pay for
academic programs that are “for the sole purpose of providing an employee an opportunity to
obtain an academic degree.” 5 U.S.C. § 4107(b)(2).
Training for the purposes of the act means:
the process of providing for and making available to an employee, and placing or
enrolling the employee in, a planned, prepared, and coordinated program, course,
curriculum, subject, system, or routine of instruction or education, in scientific,
professional, technical, mechanical, trade, clerical, fiscal, administrative, or other
fields which will improve individual and organizational performance and assist in
achieving the agency's mission and performance goals.
5 U.S.C. § 4101(4). Employees selected for training “shall agree in writing with the Government
before assignment to training” to:
(1) continue in the service of his agency after the end of the training period for a
period at least equal to three times the length of the training period unless he
is involuntarily separated from the service of his agency.
5 U.S.C. § 4108(a)(1). The Code of Federal Regulations (“C.F.R.”) also provide that “[a]n
employee selected for training subject to an agency continued service agreement must sign an
agreement to continue in service after training prior to starting the training. The period of
service will equal at least three times the length of the training.” 5 C.F.R. § 410.309(b)(2).
C. The Parties’ Renewed Motions for Summary Judgment
In her renewed motion for summary judgement, Plaintiff explains her illegal exaction
claim in more detail. In the supplemental brief, she argues that this Court possesses jurisdiction
to hear her illegal exaction claim, and then explains why her claim should prevail on the merits.

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In its response, Defendant does not specifically contest this Court’s jurisdiction to hear
Plaintiff’s illegal exaction claim as it did in its first summary judgment motion. Rather, all of its
arguments here relate to the claim failing on the merits. Therefore, the Court exercises its
jurisdiction and turns to Plaintiff’s argument that her payments to the government were made in
contravention of GETA.
Plaintiff’s case for illegal exaction is simply put: the requirement that she pay back the
tuition is “in contravention of . . . a statute, or a regulation.” Aerolineas Argentinas, 77 F.3d at
1572-73. Specifically, she argues that the continue-in-service obligation is conditioned on her
having signed an agreement before she began her training, that is, before she began taking
classes for her Master’s. Pl.’s Renewed Mot. at 14. Since she signed the E&T Agreement after
she began the training, imposing a continue-in-service obligation is in violation of 5 U.S.C. §
4108, as well as 5 C.F.R. § 410.309(b)(2) (both quoted above), and Defendant had no right to
pursue the money under that authority.
Defendant argues (1) that her training did not begin on the date that she began taking
classes and (2) that even if the E&T agreement was signed after training began, this defect did
not invalidate the entire agreement.
1.

When Did Plaintiff’s Training Begin?

Both Plaintiff and Defendant look to the definition of training in 5 U.S.C. § 4101(4) to
establish the date of when Plaintiff’s training began. The full definition is quoted above, but the
Court feels that the operative language is: “the process of providing for and making available to
an employee, and placing or enrolling the employee in, a . . . course [or] curriculum.” 5 U.S.C. §
4101(4).
It is not disputed that Plaintiff attended her first class on January 23, 2012 and that she
signed the E&T Agreement on January 24, 2012. Defendant, however, points out that she
dropped the course (Math 4500) on February 27, 2012, which was the subject of the first class
that she attended, and that “the agency did not record the cost of that course in the calculation of
what [Plaintiff] owed.” Def.’s Mot. at 18. Thus, Defendant concludes that “she nevertheless
signed [the continue-in-service obligation] before attending any classes that constituted her
training.” Def.’s Mot. at 18. Given the ambiguity of the definition of training, this argument is
plausible.
2.

The Validity of the E&T Agreement

Defendant further argues that, even if the E&T Agreement was signed after training
began, the entire agreement is not invalid for failure to comply with the statute. It bolsters this
argument by recourse to Am. Tel. & Tel. Co. v. United States [“AT&T”], 177 F.3d 1368, 1374
(Fed. Cir. 1999) (citing United States v. Mississippi Valley Generating Co., 364 U.S. 520, 563
(1961)), for the proposition that when a statute “does not specifically provide for the invalidation
of contracts which are made in violation of [its provisions],” the Court “shall inquire ‘whether
the sanction of nonenforcement is consistent with and essential to effectuating the public policy
embodied in [the statute].’” Defendant also reinforces its non-invalidation argument by citing
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the maxim that “invalidation of a contract after it has been fully performed is not favored.”
AT&T, 177 F.3d at 1375.
In AT&T, the U.S. Navy and AT&T had entered into a fixed-price contract for a major
weapon system in contravention of a federal statute prohibiting this kind of contract. AT&T
fully performed the contract but sued the U.S. for more money due to “technical problems and
unknowns” that arose during performance. AT&T, 177 F.3d at 1370. The U.S. Court of Appeals
for the Federal Circuit held that the federal statute prohibited the contract but that the contract
was not void ab initio. AT&T, 177 F.3d at 1374. The court held that “[i]nvalidation of the
contract is not a necessary consequence when a statute or regulation has been contravened, but
must be considered in light of the statutory or regulatory purpose, with recognition of the strong
policy of supporting the integrity of contracts made by and with the United States.” AT&T, 177
F.3d at 1374.
3.

The Role of the E&T Agreement in Illegal Exaction Analysis

The illegal exaction claim in this case is complicated by the fact that there was an
agreement made between Defendant, through ARDEC, and Plaintiff. The seminal case of
Aerolineas Argentinas was more straightforward: the U.S. Government imposed a duty on
airlines (which cost them money) for which there was no statutory authority. In this case, the
parties agree that Plaintiff, as a government employee, cannot sue to enforce the E&T
Agreement, but this neither indicates that the agreement was not a contract nor does it mean that
the agreement is irrelevant to the Court’s analysis as to whether an illegal exaction has occurred.
See Dkt. No. 38 at 4-5. The Court finds it significant that—despite (arguendo) the untimeliness
of the signing—the E&T Agreement informed Plaintiff that ARDEC would pay for her
education in return for service after the degree was earned, and, by signing it, she agreed to these
terms. See Appx69. Therefore, the Court’s illegal exaction analysis must take the E&T
Agreement into consideration. In other words, in the circumstances of this case, Plaintiff must
do more than prove that Defendant exacted money from her and that there was a failure on the
part of ARDEC to comply with a statute or a regulation, especially when this statute and
regulation had to do merely with timeliness in the context of an ambiguous definition of
“training.” Despite her late discovery that a timeliness statute and regulation had been violated,
Plaintiff knew early on ARDEC’s expectations in the grant of money for her education.
The existence of the contract (albeit one unenforceable by Plaintiff as a government
employee) brings this case within the purview of AT&T. Thus, the contract is not automatically
void ab initio as being contrary to law. The Court must now inquire about “the statutory or
regulatory purpose” of the statute, and in this case, the regulation as well. AT&T, 177 F.3d at
1374.
There is nothing to indicate that the statute and regulation pertinent to this case require
invalidation of the E&T Agreement due to untimeliness. As stated above, heads of agencies are
authorized to reimburse the costs of academic training so long as the training “contributes
significantly to—meeting an identified agency training need; resolving an identified agency
staffing problem; or accomplishing goals in the strategic plan of the agency[.]” 5 U.S.C. §
4107(a)(1)(A)-(C). Pointedly for this case, Congress specifically withheld an agency’s ability to
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pay for academic programs that are “for the sole purpose of providing an employee an
opportunity to obtain an academic degree.” 5 U.S.C. § 4107(b)(2).
Clearly, the statutory or regulatory purpose of providing education in this case is directed
at fulfilling the needs of the agency. There is no indication that ARDEC did not have this kind
of goal in mind when it agreed to pay for Plaintiff’s education. ARDEC indeed paid for the
education and entered into the E&T Agreement with Plaintiff that required her to continue on the
job for a period of time established by statute; otherwise, Plaintiff would have to reimburse the
agency. Plaintiff earned the degree, ARDEC paid for her schooling, and Plaintiff departed
ARDEC’s employ before the time that she had agreed to. To reimburse Plaintiff now for the cost
of her degree would amount to paying for an academic program “for the sole purpose of
providing an employee an opportunity to obtain an academic degree” in contravention of 5
U.S.C. § 4107(b)(2).
The Court’s examination of the statutory or regulatory purpose leads the Court to the
conclusion that the E&T Agreement was not void ab initio despite the alleged violation of the
timeliness statute and regulation, as per AT&T. Therefore, Plaintiff is bound by the E&T
Agreement; that is, it may figure in the Court’s illegal exaction analysis. Furthermore, the E&T
Agreement was fully performed by ARDEC and by Plaintiff at least until she ceased its ongoing
performance by leaving the ARDEC’s employ. This fact calls into play the Federal Circuit’s
maxim in AT&T: “[t]he invalidation of a contract after it has been fully performed is not
favored.” AT&T, 177 F.3d at 1375.
In sum, regardless of the fact that the E&T Agreement was signed in an untimely manner
in contravention of a statute/regulation, the agreement was not void ab initio. Plaintiff knew that
she had agreed to get the degree, that ARDEC would pay for it, and that she would have to
continue to work for ARDEC for a certain period of time. Given this obligation, the Court
cannot see how the requirement that Plaintiff reimburse ARDEC when she left its employ
prematurely is an illegal exaction. To find an illegal exaction on the basis of a one-day violation
of the timeliness statute and regulation in the context of an ambiguous definition of “training”
would be to exalt form over substance. Indeed, if Plaintiff had not been compelled to reimburse
ARDEC for the cost of her academic training, ARDEC would have been in violation of 5 U.S.C.
§ 4107(b)(2).3
4.

The Timeliness of the E&T Agreement

Finally, there is the question of when the training actually began. The Court is inclined to
agree with Defendant that the training did not begin until after the agreement had been signed.
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Additionally, Plaintiff contends that because she remained employed with ARDEC
throughout her graduate schooling, she could not possibly have been in training for the “sole
purpose of obtaining an academic degree.” Pl.’s Renewed Mot. at 20. However, maintaining her
employment is not a condition of the payment; the term of service afterwards is that. The
underlying regulations contemplate that the employee must agree to serve three times the length
of the training after the end of training. Even though ARDEC received something in exchange
for the financial assistance, it did not receive all that the law required.
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Therefore, the E&T Agreement was not untimely and in contravention of a statute or regulation.
The course that Plaintiff took the day before signing the agreement was not part of her degree
program; that is, it was not part of her academic training. Def.’s Mot. at 18. She dropped it, and
ARDEC did not require reimbursement for this course—and Plaintiff did not pay ARDEC for it.
But even if the E&T Agreement was not signed in a timely manner and thus violated a statute
and a regulation, the Court holds that requiring Plaintiff to reimburse Defendant for her academic
training under these circumstances was not an illegal exaction, as explained above.
IV.

Conclusion

For the reasons above, the Court holds that Defendant has not illegally exacted Plaintiff’s
money, either because the E&T Agreement was signed in a timely matter and thus did not
contravene a statute or regulation, or, even if the agreement contravened a statute or regulation,
its validity negates the claim of illegal exaction.
Therefore, the Court GRANTS Defendant’s motion for summary judgment and DENIES
Plaintiff’s renewed motion for summary judgment.
The Clerk is directed to enter judgment accordingly.

IT IS SO ORDERED.

s/ Edward J. Damich___
EDWARD J. DAMICH
Senior Judge

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