Shore Bank et al v. Harvard

Filing 11

ORDER Granting 5 Motion to Dismiss for Lack of Jurisdiction Harvard's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) is GRANTED. Harvard's request for attorneys' fees is DENIED. Plaintiffs' Complaint for Declaratory Judgment is DISMISSED. IT IS SO ORDERED. Signed by District Judge Mark S. Davis and filed on 3/8/13. Copies distributed to all parties 3/8/13. (ldab, )

UNITED

STATES DISTRICT COURT

EASTERN DISTRICT

OF VIRGINIA

Norfolk Division

SHORE BANK,
and

HAMPTON ROADS BANKSHARES,

INC.,

Plaintiffs,
Civil Action No.

v.

SCOTT C.

2:12cv336

HARVARD,

Defendant.

OPINION AND ORDER

This
Scott

C.

Federal

matter

is

Harvard's
Rule

of

currently

before

the

Court

motion

to

dismiss

("Harvard")

Civil

matter jurisdiction.

Procedure

12(b)(1)

for

the

facts

and

After examining the Complaint,

legal

contentions

are

Defendant

pursuant

lack

motion to dismiss and the associated memoranda,

that

on

of

subject

Harvard's

the Court finds

adequately presented

and oral argument would not aid in the decisional process.
R.

Civ.

P.

78(b);

therefore ripe
the

Court

12(b)(1).

E.D.

Va.

for decision.

GRANTS

Harvard's

Loc.

Civ.

R.

7 (J) .

to

dismiss

Fed.

The matter

For the reasons set
motion

to

is

forth below,

pursuant

to

Rule

I.

Plaintiffs
Bankshares,

Inc.

of

place

the

of

("Shore

financial

Commonwealth

business

Bankshares's
Virginia.

Bank

("Hampton

are

"Plaintiffs")
laws

Shore

FACTUAL HISTORY1

is

of

in

principal

Roads

Bank")

Bankshares")

institutions
Virginia.

Olney,

place

of

and

Hampton

(collectively,

organized

Shore

under

Bank's

Virginia.

business

Roads

principal

Hampton

is

the

in

Roads

Norfolk,

Shore Bank is a wholly owned subsidiary of Hampton

Roads Bankshares.

Defendant

Harvard

President

and

Chief

Executive

Vice

is

resident

Executive

President

Roads Bankshares.

a

of

of

Officer

Virginia

of

DelMarVa

Shore

and

the

past

Bank

and

past

Operations

for

Harvard entered into an Employment Agreement

("Employment Agreement") with Plaintiffs on January 8,
which

he

Hampton

accepted

both

of

the

above

positions.

2008 in
Harvard's

Employment Agreement contains several provisions concerning his
compensation

provides

and

for a

benefits,

including

"severance allowance"

Paragraph

upon

4(b),

which

"termination

for a

1 The facts recited here are drawn from the Complaint and are assumed
true for the purpose of deciding the motion currently before the
Court. They are not to be considered factual findings for any purpose
other than consideration of the pending motion. See Clatterbuck v.
City of Charlottesville, 841 F. Supp. 2d 943, 948 n.3 (W.D. Va. Jan.
18, 2012) (citing Warth v. Seldin, 422 U.S. 490, 501 (1975)) ("As with
a motion to dismiss pursuant to 12(b)(6), in considering a motion to
dismiss pursuant to Rule 12(b) (1) a court must accept as true all
material factual allegations in the complaint and must construe the
complaint in favor of the plaintiff.")

change

in

control

event."

Compl.

Ex.

1,

ECF

No.

1-4.

Specifically, Paragraph 4(b) provides:
If [Harvard's] employment is terminated by the Bank in
accordance

with

terminates
3(b) (iii)

Section

his
hereof,

3(a) (iii)

employment

or

pursuant

[Harvard]

to

Section

then:

(b)
The Employer shall pay [Harvard]
a
allowance
in
sixty
(60)
equal
monthly

severance
payments
commencing on the last day of the month in which the
Date of Termination occurs,

the

total amount of which

will equal 2.99 times (2.99x) the base amount.

Id.

Paragraph

3(b)(iii)

entitles

employment pursuant to th[e]
(6)

months after the

respect
assigns,

to

[Employment]

occurrence of a

[Hampton

(Employer's

Harvard

Roads

"to

terminate

Agreement within six

'Change in Control'

Bankshares],

'Parent Company')."

his

its

with

successor's

Id.

or

Such paragraph

goes on to define what constitutes a "Change in Control" under
the Employment Agreement.

Id.

During the course of Harvard's employment,

Plaintiffs began

participating in the United States Department of the Treasury's
Troubled

Asset

established

on

Relief

Program

October

3,

2008

pursuant

to

("EESA"),

12

program
the

was

Emergency

Stabilization Act

et seq.

Hampton Roads Bankshares began receiving TARP funds on

December

31,

In

2008

which

Economic

2008.

of

("TARP"),

preparation

for

its

U.S.C.

§§

5201

participation

in

TARP, Hampton Roads Bankshares executed a letter with Harvard on
December

31,

2008

("Letter")

concerning

its

intent

to

participate in TARP's Capital Purchase Program ("CPP").

In that

Letter, Hampton Roads Bankshares stated that, as a condition of

its participation, it was "required to make changes to existing

compensation agreements" and that it "intend[ed] to apply [such]
standards to all of its executive officers."

No.

1-5.

The Letter then set

Compl.

Ex.

forth five paragraphs,

2, ECF

including

the following:
No

(1)

Golden

Parachute

Payments.

The

Company

is

prohibited from engaging in any golden parachute
payment to you during any "CPP Covered Period."
A
"CPP

Covered Period"

is

any period

during

which

(A)

you are an executive officer and (B) the [Department]
holds
an equity or debt
position acquired from
[Hampton Roads Bankshares] during the CPP.

(3)
Compensation Program Amendments.
Each of the
Company's compensation, bonus, incentive, and other
benefit plans, arrangements and agreements (including
golden parachute, severance, and employment agreements
(collectively, "Benefit Plans") with respect to you is
hereby amended to the extent necessary to give effect
to provisions (1) and (2) above and you agree to
execute

any

such

amendments

as

maybe

necessary

to

implement the agreements contained in this letter.
Id.

At the bottom of the three-page Letter,

name

in a block containing the following statement:

to be legally bound,
on

the

date

apparently

set

began

Harvard signed his

"Intending

I agree with and accept the foregoing terms

forth below."

receiving

TARP

Id.

Hampton Roads

benefits

on

that

Bankshares

same

date,

December 31,

2008.2

See Compl.

H 12,

ECF No.

1.

Harvard's

employment with both Plaintiffs continued until he submitted his
resignation to Shore Bank on June 24, 2009.
The instant action concerns a dispute between the

regarding

Harvard's

provided

for

in

("Allowance").
2012,

Paragraph
See

Harvard sent

Allowance.

entitlement

Ex.

Plaintiffs

See Compl.

to

severance

allowance

the

Employment

Agreement

1,
a

Ex. 3,

the

of

4 (b)

Compl.

parties

ECF No.

letter

1-4.

On March 13,

seeking payment

ECF No. 1-6.

of

the

Since this demand,

Plaintiffs have consistently denied Harvard's request for three
reasons.
occurred

First,
that

Plaintiffs assert that no

would

entitle

Plaintiffs claim that,

Harvard

to

"Change in Control"

the

Allowance.

Second,

as recipients of TARP benefits,

they are

barred from paying Harvard the Allowance, because such Allowance
is

a

"golden

parachute

payment"

support of this position,

prohibited

under

TARP.

In

Plaintiffs apparently sought guidance

from the United States Department of

concerning

the

Allowance,

Plaintiffs'

inquiry is unclear.3

the

although

Treasury

the

exact

("Treasury")

timing

of

According to Plaintiffs,

the

2 "Pursuant to the governing regulations, both Hampton Roads Bankshares
... and its wholly owned subsidiary,

'TARP recipients.'"

Compl.

% 13,

Shore Bank,

ECF No.

1

are considered to be

(citing the governing

regulations).

3 Plaintiffs allege no facts concerning this inquiry in their
Complaint. Instead, Plaintiffs extensively quote letters, attached as

exhibits to the Complaint, that reference the inquiry.
24.

One

such

letter,

sent

from

Plaintiffs'

attorneys

Compl. HH 23to

Harvard's

Department advised them that an Interim Final Rule codified at
31

C.F.R.

Part

prohibits

30,

which

Plaintiffs

became

from

effective

paying

on

Harvard

June

15,

2009,

the

Allowance.

Finally, Plaintiffs contend that Harvard is not entitled to the
Allowance

because,

Employment

by

Agreement

signing the Letter,

to include

Harvard amended his

TARP's prohibition of golden

parachute payments.
II.

Prior

to

the

PROCEDURAL HISTORY

commencement

of

this

action,

Harvard filed a

Complaint for Declaratory Judgment in the Norfolk Circuit Court
on May 22,

2012 seeking a declaratory judgment that Plaintiffs

must pay the legal fees and costs that Harvard has incurred and
will

incur as

a

result of

the parties'

disagreement

about

the

Allowance, pursuant to Paragraph 11 of the Employment Agreement.

See

Compl.

Ex.

5,

represented that he

ECF

No.

1-8.

In

his

complaint,

Harvard

"intends to file a claim for breach of the

Employment Agreement...."

Id.

H 15.

However,

there are no

facts before the Court suggesting that any such action has been

attorneys, describes the inquiry as follows:
"As the Bank informed
Mr. Harvard more than two years ago, [the] Treasury has advised the
Bank that, because Mr. Harvard resigned after June 15, 2009, the date
on which [the] Treasury's Interim Final Rule entitled 'TARP Standards
for Compensation and Corporate Governance' became effective, the Bank
is not legally permitted to pay 'golden parachute' payments including
severance or insurance benefits."
Compl. Ex. 4, ECF 1-7.
Thus, it
appears that Plaintiffs contacted the Treasury shortly after Harvard's
resignation.

filed.
this

Instead,

Plaintiffs

have preemptively sought relief

in

Court.

Plaintiffs filed the instant action on June 14,

single-count

Complaint

seeks

declaratory

judgment

2012.

that

The

(1)

the

Allowance is a golden parachute payment prohibited by TARP and

its corresponding regulations; and (2)
from paying the Allowance,
were

recipients

of

TARP

Plaintiffs are prohibited

now or in the

funds

at

the

future,

time

because

Harvard

they

resigned.

Harvard filed the instant motion to dismiss pursuant to Federal
Rule of

Civil Procedure 12(b)(1)

on July 3,

2012.

ECF No.

5.

Harvard asks the Court to dismiss the single-count Complaint for

want of subject matter jurisdiction and to award him attorney's
fees

pursuant

Plaintiffs

to

filed

ECF No.

2012.

memorandum.

Paragraph

their

8.

11

of

memorandum

On July 23,

ECF No.

9.

the

in

opposition

2012,

Therefore,

Employment

Agreement.

on

July

Harvard filed his

16,

reply

the motion is fully briefed

and ripe for this Court's consideration.
III.

LEGAL

STANDARD

Harvard seeks to dismiss Plaintiffs'
Federal

Rule

defendant

lack of

move

Civil
for

Procedure

dismissal

of

subject matter jurisdiction.

see also,

Supp.

to

of

A.W.

2d 219,

ex rel.

221

(E.D.

Wilson v.

Va.

Complaint pursuant to

12(b)(1),
a

claim

Fed.

which
due

R.

Fairfax Cnty.

2008) .

to

Civ.
Sch.

permits
the

P.

a

court' s

12(b)(1);

Bd.,

548 F.

Federal district courts are

courts of limited subject matter jurisdiction.

United States ex

rel.

(4th

Vuyyuru

v.

Jadhav,

555

F.3d

337,

347

(citing Exxon Mobile Corp. v. Allapattah Servs.,
546,

552

(2005)).

They

may

exercise

"only

Cir.

2009)

Inc., 545 U.S.

the

jurisdiction

authorized them by the United States Constitution and by federal
statute."

Id.

Accordingly,
outside

(citing Bowles v. Russell,

the

its

Court

must

"presume

263,

Co.

274

(4th Cir.

of Am.,

Having

filed

this

the

of

has

&

district

a

and until

(1994))

(emphasis

action—thereby

jurisdiction

to

R.R.

matter

531 F.3d

invoke

Co.

jurisdiction.

v.

United

States,

F.2d

for

lack

1991).

court

in

945

can

resolve

a

motion

to

dismiss

(1)

"[t]he court

the

light

most

favorable

to

viewing the

the

plaintiff,

similar to an evaluation pursuant to Rule 12(b) (6)"; or (2)
court

may

evidence

conduct
to

jurisdictional

the

Richmond,

may find insufficient allegations in the pleadings,

facts

lies

in original).

seeking

subject matter jurisdiction in two ways:

alleged

case

United States v. Poole,

377

subject

Potomac

768 (4th Cir.
A

that

(2007)).

(citing Kokkenen v. Guardian Life Ins.

375,

instant

205

the Court—Plaintiffs bear the burden of proving

Court

Fredericksburg
765,

2008)

511 U.S.

jurisdiction of
that

...

limited jurisdiction unless

has been shown to be proper."

551 U.S.

an

evidentiary

determine

allegations.

whether

hearing

and

the

facts

Lovern v.
8

Edwards,

then

weigh

support

190

F.3d

the
the
the

648,

654

(4th

Cir.

1999) .

If

the

Court

determines

that

it

lacks

subject matter jurisdiction, it must dismiss the action in its
entirety.
also Fed.

Arbaugh v.
R.

Civ.

P.

Y&H Corp.,

DISCUSSION

Subject Matter Jurisdiction Generally

Plaintiffs'

declaratory

Complaint

judgment

alleges

pursuant

Declaratory Judgment Act

to

a

single

count

28

U.S.C.

§

("Act") provides that

actual controversy within its jurisdiction,
United

States,

upon

filing

of

an

seeking such declaration,
could be sought."
for

requirements
properly

the

Fourth

that

exercise

must

§ 2201.

Circuit
be

met

jurisdiction

has

2201.4

The

... any court of the

of

pleading,

may

any interested party

whether or not

28 U.S.C.

seeking

"[i]n a case of

appropriate

declare the rights and legal relations

Appeals

514 (2006); see

12(h)(3).
IV.

A.

546 U.S. 500,

further relief

is or

The United States Court of
set

before
over

forth
a

a

three

federal

declaratory

essential
court

may

judgment

action:

(1)
the
complaint
[must]
allege
controversy"
between
the
parties
immediacy
and
reality
to
warrant
declaratory judgment;" (2) the court

[]
an
"actual
"of
sufficient
issuance
of
a
[must] possess!]

4 Although Plaintiffs' purport to bring the instant action pursuant to
various federal statutes (including TARP), the Complaint is styled as
a "Complaint for Declaratory Judgment" and asserts one count seeking
such judgment.
Accordingly, the Court views the Complaint as alleging
a claim under the Act and not under the summarily listed federal
statutes.

an independent basis for jurisdiction over the parties
(e.g., federal question or diversity jurisdiction);
and (3) the court [must] not abuse its discretion in
its exercise of jurisdiction.
Volvo Constr.
F.3d

581,

Equip.

592

(4th

N. Am.,
Cir.

Inc.

v.

2004).

CLM Equip.

Harvard's

Co.,

motion

Inc.,
to

386

dismiss

challenges the presence of an independent basis for jurisdiction
of Plaintiffs'

Complaint.

Such an independent basis is required

because the Act is procedural only.

See Vaden v. Discover Bank,

556

operates

U.S.

49,

70

n.19

(2009).

It

to

range of remedies available in federal courts"
way,

extending federal

Phillips Petroleum Co.,

court

jurisdiction.

339 U.S.

667,

671

(1950);

386 F.3d at 592.

Accordingly,

jurisdictional

requirements

met

in

without,

Skelly Oil

Constr. Equip.,

are

"enlargeU

this

the

in any
Co.

v.

see also Volvo

to prove that the

case,

Plaintiffs

must set forth a separate basis for jurisdiction of the action.
Skelly Oil,

339 U.S.

F.3d at 592.

at 671;

see also Volvo Constr.

In the Complaint,

Equip.,

386

Plaintiffs cite original federal

question jurisdiction pursuant to 28 U.S.C.

§ 1331 as the sole

basis for the Court's jurisdiction.
District
U.S.C.

§ 1331

Constitution,
U.S.C.

no

§ 1331.

courts

have

"of

all

laws,

or

original
civil

jurisdiction pursuant
actions

treaties

of

the

arising
United

28

under

the

States."

28

The Fourth Circuit has observed that

'single, precise definition'

to

"[t]here is

of what it means for an action

10

to

'arise

Naps,

under'

Inc. , 377

federal

law."

F.3d 355,

362

Verizon

(4th Cir.

Md.,

2004)

Dow Pharm. Inc. v. Thompson, 478 U.S. 804,

Inc.

v.

Global

(quoting Merrell

808 (1986)).

Indeed:

The Supreme Court has recognized § 1331 jurisdiction
in a variety of cases, such as (1) when a federal
right or immunity forms an essential element of the
plaintiff's claim; (2) when a plaintiff's right to
relief depends upon the construction or application of
federal law,

upon

a

and the federal nature of the claim rests

reasonable

creates

the

foundation;

cause

of

(3)

action;

when

and

federal

(4)

law

when

the

plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal law.
Id.

(internal

citations

and

quotations

omitted).

Ultimately,

whether a claim arises under Federal law is a nuanced question,

one

that

requires

congressional
Merrell

Dow

must

court

intent,
Pharms.,

emphasized that,
courts

a

to

make

"sensitive

judicial power,
487

U.S.

at

and the

810.

The

judgments

federal
Supreme

system."
Court

in conducting the jurisdictional inquiry,

exercise

"prudence

practicality and necessity."

and

Id.

Constr. Laborers Vacation Trust,

restraint"

with

about

has

lower

"an eye

to

(quoting Franchise Tax Bd. v.

478 U.S.

1,

20

(1983)).

The well-pleaded complaint rule governs a district court's
determination

Specifically,

of

its

such

jurisdiction

rule

"requires

under

that

28

U.S.C.

federal

§ 1331.

question

jurisdiction does not exist unless a federal question appears on
the face of a plaintiff's properly pleaded complaint."
Gas

Transmission

Corp.

v.

Drain,

11

237

F.3d

366,

370

Columbia
(4th

Cir.

2001)

(citing

declaratory
"operates

Merrell

Dow

judgment
no

Pharms.,

action,

U.S.

at

well-pleaded

the

differently"

478

when

the

808) .

In

complaint

declaratory

a

rule

judgment

plaintiff is alleging an affirmative claim arising under federal
law

against

the

declaratory

absent such a claim,
face

of

the

judgment

defendant.

Id.

But,

the jurisdictional inquiry shifts from the

declaratory

judgment

complaint to the nature of

plaintiff's

well-pleaded

the coercive action that would have

been brought absent the availability of declaratory relief.
13D C.A.

Wright et

at 275-76

(3d ed.

In such a case,

al.,

Federal

Practice and Procedure

2008); see also Columbia Gas,

See

§ 3566,

237 F.3d at 370.

"the proper jurisdictional question is whether

the complaint alleges a claim arising under federal law that the
declaratory judgment defendant could affirmatively bring against
the declaratory judgment plaintiff."
370; see also Franchise Tax Bd.,

A

federal

court

lacks

Columbia Gas,

237 F.3d at

463 U.S. at 19 & n.19.

jurisdiction

of

a

declaratory

judgment action "if, but for the availability of the declaratory
judgment

procedure,

the

federal

claim

would

arise

only

defense to a state created action."

Franchise Tax Bd.,

at

al.,

16

(quoting

Procedure

10A

§ 2757,

well-settled that

complaint

rule

by

C.

at

Wright

744-45

"[a]

et

(2d

plaintiff

using

the

ed.

Federal

1983)).

cannot

declaratory
12

the

a

463 U.S.

Practice

Therefore,

evade

as

it

and
is

well-pleaded

judgment

remedy

to

recast

what

federal

law."

are

defenses

in
as

essence

merely

affirmative

claims

Morgan Cnty. War Mem'l Hosp.

Mem'l Hosp.

v.

Baker,

314

anticipated

Fed.

of

329

relief

ex rel.

potential

under

federal

Bd. of Dirs.

App'x 529,

(quoting New Orleans & Gulf Coast Ry.
321,

for

or

533

Co. v.

Of War

(4th Cir.

2008)

Barrois, 533 F.3d

2008)).

In such a case,

"it is the character

threatened

the

(5th Cir.

action,

and

defense,

not

of

the

which

will

determine whether there is federal question jurisdiction."
Serv.

Comm'n

v.

Wycoff,

will

not

seize

courts
because

one,

normally

344

U.S.

237,

248

(1952) .

litigations

from

state

defendant,

goes

to

a

Pub.

"Federal

courts

federal

merely

court

to

begin his federal-law defense before the state court begins the
case under state law."

Harvard claims

appropriate

Harvard's

that dismissal

because

declaration

that

Id.

for lack of

Plaintiffs'

they

threatened

have
state

a

Complaint

valid

law

seeks

federal

breach

of

jurisdiction is

a

defense

law

only

to

contract

action.

Plaintiffs disagree and assert two bases upon which they claim
the

Court

instant

that

may

exercise

declaratory

their

of

because
a

question

action.

"undoubtedly

substantial

jurisdiction"
application

judgment

Complaint

sufficiently

federal

to

First,

raises
justify

it seeks this

federal

law—namely,
13

jurisdiction

Court's
TARP.

a

of

Plaintiffs

federal
federal

the

argue

question
question

interpretation and
ECF

No.

8

at

7.

Second,

Plaintiffs

against

them

also

Specifically,

contend

support

Plaintiffs

state law breach of

to

TARP's

Harvard's

pursuant

to

Treasury's

12

a

Harvard's

finding

assert

of

(1)

on

"golden

potential

U.S.C.

decision

§

to

parachute payment.

for

jurisdiction.

Harvard's

at its core,

threatened
a challenge

payments,"

include

federal

review

prohibit

claims

parachute

claims

5229

potential

federal

that

contract suit is,

prohibition

(2) that

that

the

a

of

the

and

lawsuit

Secretary of

Allowance

as

a

golden

The Court addresses each alleged basis for

its exercise of jurisdiction in turn.
B.

Substantial Federal Question in the Complaint

Plaintiffs

Declaratory
federal

first

Judgment

question,

contend

that

presents

namely

regulations

bar

Plaintiffs

Plaintiffs

are

correct

the

Court

whether

from

that,

their

TARP

paying
as

jurisdiction

"will

implicate

significant

federal
Eng'g

Mfg.,

Indeed,

the

v.

Darue

Court

considers

further detail below.

question

before

&

the

over

this

However,

its

and

substantial
associated

the

Grable

basis

U.S.

for

Allowance.

matter,

state-law

545

for

a

Harvard

issues."

Inc.

with

general

question

Prods.,

lie

a

Complaint

federal

claims

that

Sons

Metal

&

308,

312

(2005) .

jurisdiction

in

Plaintiffs overlook the initial

Court:

the

jurisdictional inquiry.

14

proper

focus

of

the

Unless

Plaintiffs'

Complaint

states

against

Harvard arising under

inquiry

focuses

Harvard,

affirmative

the declaratory judgment defendant,

on

the

federal

an

nature

of

law,

the

the

Wright et al.,

Columbia Gas,

supra,

§ 2767,

at

jurisdictional

coercive

237 F. at 370;

654-58.

do

not

seek

a

at

281;

807-08
question

see

also

(4th

Ormet

Cir.

doctrine

1996)
to

that

Specifically,
they

13D Wright et al.,

Corp.

v.

Ohio

(applying

support

see also 10B

The Court finds that

declaration

affirmative federal right."

that

the declaratory

the Complaint states no such affirmative claim.
Plaintiffs

action

could have brought

against Shore Bank and Hampton Roads Bankshares,
judgment plaintiffs.

claim

Power

the

have

supra,

Co.,

98

jurisdiction

of

an

§ 3566,

F.3d

substantial

"an

799,

federal

action

for

declaratory and injunctive relief when the plaintiff claimed an

affirmative

right

based

on

various

forth in the Clean Air Act).

statutory

definitions

set

Nor do Plaintiffs ask the Court to

declare that Harvard "does not have a right under federal law"
that

he

§ 3566.

n.19

is
at

otherwise
282;

see

(noting that

claiming.

also

Franchise

judgment

enforce

its

federal

question,"

Tax

Wright
Bd.,

et

463

al.,
U.S.

supra,
at

19

&

"Federal courts have regularly taken original

jurisdiction over declaratory
declaratory

13D

rights,

as

judgment

defendant
that

is

suit

brought
would

consistently
15

suits
a

in which,

coercive

necessarily

the

case

in

if

the

action

to

present

a

"suits

by

alleged

patent

infringers

Rather,

Plaintiffs

immune,

under

seeks,

as

ask

TARP,

the

from

provided

Accordingly,

to

declare

Court

paying

for

Plaintiffs'

in

[Harvard's

contract."5

threatened]

common-law

13D Wright et al.,

(TARP's

"arise [s]

are

Harvard

Agreement.

prohibition

only as a defense

action

supra,

they

that

Employment

claim

invalid").

that

Allowance

the

federal

patent

declare

the

against golden parachute payments)
to

to

a

for

§ 3566,

breach

at 283.

of

The

Complaint simply does not "alleg[e] an affirmative claim arising
under

federal

law

defendant."

Court

Columbia

does

Complaint
"whether
federal

against

not

to

look

law

Gas,

to

determine

[such]

237

F.3d

at

declaratory
370.

face

its

jurisdiction.

[Harvard]

of

the

the

[C]omplaint

that

[Plaintiffs]."

[Harvard,]

alleges
could

Therefore,

Plaintiffs'

a

judgment

well-pleaded

Instead
claim

affirmatively

the

it

arising
bring

asks
under

against

Id.
C. Potential Coercive Actions

Plaintiffs

cite

two

potential

bring that they argue support the

5 To be clear,
claim is

of

claims

that

Harvard

Court's jurisdiction of

could

this

the relevance of TARP to Harvard's breach of contract

no significance to the Court's determination of

where to
properly focus the jurisdictional inquiry.
Such question is only
presented once the Court has determined that it should focus on
Harvard's potential coercive action and not on the face of Plaintiffs'

well-pleaded declaratory judgment Complaint.
Then, the question is
relevant only in deciding whether the breach of contract action raises
a federal issue sufficient to support jurisdiction of this action.
16

matter:

(1)

against

Shore

pursuant

to

Treasury's

Harvard's

Bank;
12

threatened

and

(2)

U.S.C.

a

breach

claim

of

that

contract

Harvard

for

judicial

concerning

position

§ 5229

the

claim

could bring

review

Allowance.

of

The

the
Court

addresses each in turn.
i.

In

his

alleged

state

that

he

Breach of Contract

court

declaratory

"intends

to

file

a

judgment

claim

Employment Agreement against Shore Bank."
1-8.

action,

for

Harvard

breach

Compl. Ex. 5,

of

the

ECF No.

This breach of contract claim is the only cause of action

Harvard has threatened to assert against Plaintiffs.
argue that,

at its core,

Plaintiffs

the threatened breach of contract claim

is nothing more than a challenge to TARP's prohibition on golden
parachute

payments

and,

because

amending the Employment Agreement
"Harvard must prove,

prohibit
first,

claim does
whether

question

his

not

such

stated

give

Court

considers

the

include

file

a

Letter

such prohibition,
that TARP does not

8 at 9.

to

the

Harvard responds,
breach

of

contract

Court enough information to determine

claim

therefore,

judgment is premature.

ECF No.

intention

the

future

and,

to

signed

as a part of his claim,

[the Allowance] ."

that

Harvard

will

that

raise

substantial

declaratory

Harvard further argues that,

even if the

action,

action

federal

for

threatened

this

a

such

action

does

not

present a substantial federal question because neither the TARP
17

prohibition nor any subsequent waiver of the Allowance based on
such prohibition are essential elements of a state law breach of
contract claim.
waiver are
cannot

Harvard argues that the alleged prohibition and

instead defenses

serve

as

the

to

basis

such a

for

claim and,

this

Court's

accordingly,

jurisdiction

of

Plaintiffs' declaratory judgment action.
a.

Nature of Harvard's Claim

As noted above,
that

must

be

there are three jurisdictional requirements

met

before

a

federal

court

may

jurisdiction over a declaratory judgment action.
Equip.,

386

F.3d

at

592.

First,

the

justiciable controversy under Article
Constitution.

Id.

Second,

case

III of

Court's

constitute

exercise

an

abuse

motion to dismiss
wanting,
basis

ability
contract

its

consider

action,

requirement—that

the

Harvard
of

a

must

the

present

a

United States

discretion.

Id.
must

Id.

at

However,

nature
appears

justiciable

lacking.

18

in

of

And,

finally,

not

otherwise

594.

Harvard's

the second requirement is

the court does not possess

jurisdiction.

to

jurisdiction

contends only that

namely that

for

of

of

Volvo Constr.

the Court must have an independent

basis for jurisdiction of such controversy.
the

exercise

disputing

his

to
case

an independent
the

threatened

suggest
or

that

Court's

breach
the

controversy—is

of

first
also

When determining whether an actual controversy exists in a
declaratory

judgment

action,

the

Court

must

facts alleged, under all the circumstances,
substantial

controversy

interests,
issuance

of

Co.

v.

also

sufficient

of

Genentech,

Pacific

549 U.S.
Coal

Const.

&

Art.

plaintiff

context)

must

that

"controversy

118,

Oil

Article

3d

at

III of

592.

127

Co.,

Ill,

312

§

270,

(setting

possess

standing

to

threatened

qualifies

as

an

the Constitution."

For

to

legal

warrant

the

Inc.

v.

(quoting Maryland Cas.

U.S.

2

adverse

Medlmmune,

(2007)

the

273

forth

(1941));

the

see

case

or

In order to satisfy this requirement,

Harvard's

that

having

judgment."

controversy requirement).

a

parties

"whether

show that there is a

immediacy and reality

declaratory

Inc.,

U.S.

between

ask

standing

to

sue,

meaning

action

actual

must

"(1)

present

controversy

Volvo Constr.

exist:

(in this

the

Equip.,

a

under
386

plaintiff

F.

must

allege that he or she suffered an actual or threatened injury
that is not conjectural or hypothetical,

(2)

the injury must be

fairly traceable to the challenged conduct, and
decision
Brown,

must

462

be

F.3d

likely
312,

Defenders of Wildlife,

to

316

redress
(4th

504 U.S.

Cir.

555,

19

the

(3)

a favorable

injury."

2006)

(citing

560-61 (1992)).

Miller

v.

Lu jan

v.

There

Harvard

had,

argues
and,

is no doubt

that

in

that

fact,

it is

if he does,

this

filed

standard would have been met

the

"uncertain"

threatened action.6

whether he

will

whether he will proceed in

file

if

Harvard

any action

state or federal

court and,

similarly,

whether he will assert only the state law

claim

breach

contract

for

Court's

inquiry,

of

however,

is

or

other,

not

governed

posture of Harvard's threatened claim.

been filed,

by

claims.

the

The

procedural

Even when no lawsuit has

a dispute can be sufficiently concrete to create a

justiciable
Armstrong,

related

controversy.
No.

3:12cvl81,

See

Standard

Fire

Ins.

Co.

2012 WL 3730644,

at *3

(E.D.

Va.

v.
Aug.

28, 2012).

The Fourth Circuit has expressly recognized that,

some cases,

"the threat of future litigation may give rise to an

actual controversy."
at

593

n.12).

declaratory

Id. (citing Volvo Constr. Equip.,

Where

judgment

"real

and

substantial

plaintiff

has

disputed

judgment defendant's contractual rights,
in

a

position

maintained

such

legally

position),

controversy between
reality

to

adverse

warrant

there

such parties
the

to

"of
of

386 F.3d

show

a

that

a

declaratory

thereby putting itself

that
is

issuance

facts"

in

defendant

clearly

sufficient

a

(and

has

substantial

immediacy and

declaratory

judgment."

6 Harvard could establish an actual injury based on the nonpayment of
the Allowance, which injury is fairly traceable to Plaintiffs' ongoing
refusal to pay the Allowance, as provided for in the Employment
Agreement.
Furthermore, a favorable decision would certainly redress
such injury because it would entitle Harvard to receive the Allowance.
20

Medlmmune,
at

549 U.S.

273) ; see also

at 127

(quoting Maryland Cas.

Standard Fire

Ins.

Co.,

2012

Co.,
WL

312 U.S.

3730644,

at

*3.

Here,

Plaintiffs

have

Paragraph

4(b)

expressly disputing his right to such payment on two

the Allowance

"Change in Control"

never

and

occurred;

(2)

the

the

Agreement,

that the

of

Harvard

provided

(1)

in

denied

Allowance

grounds:

for

repeatedly

Employment

entitling Harvard to

that

TARP prohibits

the

Allowance regardless of whether Harvard would otherwise qualify
for it, both as a general matter and because Harvard signed the
December

31,

2008

Letter.

Accordingly,

a

substantial

controversy exists between the parties, who clearly have adverse

legal

interests.

neither

speculative

threatened,
action,

Further,

in

his

nor

the nature

of

uncertain.

pending

state

such controversy is

Harvard

court

has

expressly

declaratory

judgment

to file a breach of contract claim against at least one

Plaintiff

(Shore Bank).

Although jurisdiction of a declaratory

judgment action may be

lacking "[w]here a declaratory judgment

plaintiff offers
threatened

'no evidence whatever of any past, pending, or

action, '"

that

is

not

the

Franchise Tax Bd., 463 U.S. at 16 n.14
at

248)

(emphasis

concerning

the

positions

with

added).

Given

threatened

claim

respect

to

such
21

case

before

the

(quoting Wycoff,

the

and

claim,

facts

the

this

before

344 U.S.
the

parties'

is

Court.

not

Court

stated

a

case

involving a dispute that has "'not yet matured to a point where

[the

Court]

can

see

what,

develop.'"

U.S.

any,

Tax

Bd.,

463

Franchise

Wycoff,

if

344

underlying

at

dispute

240-41).

will

threatened action.

concrete

controversy

U.S.

16

Rather,

it

is

progress

likely

Accordingly,

at

n.14

clear

to

at

will

(quoting
that

the

least

the

the Court finds that the first

jurisdictional requirement—a justiciable controversy between the
parties—is satisfied.
threatened

breach

necessarily
Vaden,
bd.,

396

of

presents
F.3d 366,

463 U.S.

The Court will,
contract

a

claim

federal

371

therefore,
to

determine

question.

(4th Cir.

2005)

consider the
whether

Discover

it

Bank

v.

(citing Franchise Tax

at 19).

b. Federal Question Jurisdiction of Harvard's Claim

Jurisdiction of a claim exists pursuant to 28 U.S.C.
when

such

claim

"aris[es]

under

treaties of the United States."

majority" of cases,

Dixon v.

Cir.

Accordingly,

a

or

claim

arises

state

Inc. , 402

under

law creates
F.3d

Columbia Organic

430,

Constitution,

28 U.S.C.

§ 1331.

laws,

or

In the "vast

a cause of action arises under the law that

creates it.

2004).

the

§ 1331

Coburg Dairy,

the

Chems.

369 F.3d 811,

816

(4th

the first step in determining whether

federal

442

Inc.,

law

cause
(4th

Co.,

is

of

Cir.
Inc.,

22

to

"discern

action."
2005)
29

whether

Pinney v.

(quoting

F.3d

148,

federal

Nokia,

Mulcahey

151

v.

(4th Cir.

1994).

Here,

neither

party

disputes

that

state

law

creates

Harvard's threatened breach of contract claim.

Where

state

law

jurisdiction over
issue

is

(1)

and

(4)

20,

2013);

Franchise Tax Bd.,

only

in a

Healthchoice

some

Gunn,

see also Pinney,

jurisdiction.

issue

of

No.

(2)

is

a

federal

disputed,

in

& Sons,

However,

small

"federal

federal

approved

545 U.S.

*5

McVeigh,

at

by

*6

at 314;

such jurisdiction

category'

at

(3)
court

2013 WL 610193,

of

cases,"

as

(quoting Empire

547

402 F.3d at 442.

not

if

balance

2013 WL 610193,
v.

lie

actually

11-1118,

and

Inc.

action,

resolution

at 13.

"'special

of

law claim will

see also Grable

Assurance,

federal

cause

federal-state

463 U.S.

discussed below.

(2006));

the

the

raised,

Gunn v. Minton,

Feb.

exists

state

capable

disrupting

Congress."
(U.S.

[the]

necessarily

substantial,
without

creates

U.S.

677,

699

The mere presence of

sufficient

to

support

federal

See Grable & Sons, 545 U.S. at 314.

A state law claim necessarily raises a federal issue if a
question of

federal

law "is a necessary element of one of

well-pleaded state claims."
Christianson v.
(1988));

see

Colt

also

Indus.

Franchise

Pinney,

402

F.3d at

Operating Corp.,
Tax

Bd. ,

463

442

486 U.S.
U.S.

at

the

(quoting
800,
13.

808
The

presence of a federal law defense to a state law cause of action
will not
See

support

Franchise

federal question jurisdiction of such action.

Tax

Bd.,

463

U.S.
23

at

10-11.

"[The]

right

or

immunity
States

created
must

plaintiff's
299 U.S.
without

the

an

be

element,

[claim]."

109,
the

essential

by

112

Constitution

Id.

elements

of

"If
an

his

an

laws

[the]

issue

state

of

the

essential

(quoting Gully v.

(1936)).

resolution of

and

or

United

one

of

the

First Nat'l Bank,

plaintiff can establish,

of

federal

law claim,

law,

all

then the

the

claim does

not necessarily depend on a question of federal law."
402 F.3d at 442 (citing Franchise Tax Bd.,

of

Pinney,

463 U.S. at 13-14).

The elements of a breach of contract under Virginia law7 are
"(1)

a

legally

plaintiff;

enforceable

(2)

the

obligation; and (3)
the

breach

Wright,
Va.

of

277

612,

619

existence

defendant's

148,

of

154

violation

Sunrise

(2009)
The

a

obligation

legal

Plaintiffs

participants

from making

amended

a

defendant

or

breach

the

Continuing

to

of

parties

contend

a

that

to

that,

pay

to

267
the

Allowance.

TARP

payments

Agreement

v.

George,

the

because

LLC

dispute

apparently

golden parachute

Employment

Care,

(quoting Filak v.

(2004)).

Specifically,

Harvard

of

injury or damage to the plaintiff caused by

obligation."

Va.

obligation

prohibits

and because

acknowledge

the

7 The Court looks to Virginia law because the parties do not dispute
that

breach

Employment
performance
Ltd. , No.

of

contract

Agreement

in Virginia

I:10cvl273,

is

was

a

state-created

executed

only.

See

in
Best

2011 WL 5843627,

at

action,

Virginia
Med.
*4

Intern.

(E.D.

nor

and
Va.

that

the

contemplated
V.

Nov.

Tata

Elxsi

21,

2011)

(describing the application of Virginia choice of law rules to actions
involving
contracts).
Additionally,
the
Employment
Agreement
specifically provides that it "shall be governed and construed in
accordance with the Laws of the Commonwealth of Virginia."
Compl. Ex.
1,

ECF No.

1-4.

24

applicability

of

TARP's

prohibition

to

Plaintiffs,

Plaintiffs

were under no legal obligation to pay Harvard the Allowance and
their failure to do so cannot,

therefore,

constitute a breach of

the Employment Agreement unless or until Harvard shows that the
Allowance

is

not

a

prohibited

argues that Paragraph 4(b)

legal

obligation

in

payment

under

TARP.

Harvard

of the Employment Agreement created a

Plaintiffs

to

pay

him

the

Allowance

upon

termination of his employment within six months of a "Change in
Control"

when

and that

they

failed

Plaintiffs

to

breached

pay him

the

the

Employment Agreement

Allowance.

Harvard

that the existence of TARP's prohibition and the
he

characterizes

as

a

waiver,

are

defenses

to,

contends

Letter,
as

which

opposed

to

essential elements of, a Virginia breach of contract action.
Harvard is correct that the mere existence of a regulation

under TARP generally prohibiting golden parachute payments would

not be enough to create
matter.

See

2:12cv567,

Campbell

2013

("Defendants'

WL

federal question jurisdiction of this

v.

Hampton

652427,

at

argument—that

Roads

*3

they

Bankshares,

(E.D.

are

Va.

Inc.,

Feb.

prohibited

19,

by

No.
2013)

federal

regulations from fulfilling their alleged obligations under the
contract—is

best

seen as

an assertion of

impossibility....

[A]ny other allocation of

case

contrary

would

be

to

Virginia

law,

the

defense

the
and

burdens

of

legal

in this

unsupported

by

federal law: to require a plaintiff to prove an exception to a
25

federal

defense

contract

would

defense

of

in

order

invert

an

to

the

succeed
burden

intervening

in

a

state

allocation

federal

law

of

breach

a

state

illegality,

and

of
law

would

obliterate the prohibition against creating federal jurisdiction
with a defense.").

Here,

if

the Employment Agreement provided

for the Allowance in Paragraph 4(b)

without
could

any

further

establish

limitation

Plaintiffs'

after a

on

legal

its

"Change in Control"

availability,

obligation

to

Harvard

pay

him

the

Allowance by simply citing to the language in Paragraph 4(b) and
then setting forth facts sufficient to show that such a "Change
in

Control"

prima

facie

had

occurred.

breach

of

Harvard

contract

could

case

thereafter

by

alleging

plead

a

Plaintiffs'

refusal to pay the Allowance and any injury he has suffered as a
result of such refusal.

154

(quoting Filak,

reference
breach

TARP at

of

267 Va.

all

contract.

Franchise

Tax

circumstances,

See Sunrise Continuing Care,

463

Pinney,
U.S.

existence

of

pleading obligations

4 02
at

support

breach

the

of

contract

TARP's

exercise

Franchise Tax Bd.,

Standard Oil Co.

463

of

federal

U.S.

of N.J.,

claim,

67

at

F.2d 644

at

442

a

defense

which

16;

is

to

for

(citing

Under

prohibition

question

10-11,

26

F.3d

13-14) .

parachute payments would arise only as
well-pled

at

Harvard would not have to

satisfy his

See

Bd.,

the

to

at 619) .

277 Va.

of

such

golden

Harvard's

insufficient

jurisdiction.

to
See

see also Thompson v.

(4th Cir.

1933)

("[W]here

a federal question is involved only by way of defense to a cause
of

action

passed

arising

upon

Campbell,

in

2013

the
WL

rely solely on
Plaintiffs

first

law

at

*3.

of

that,

TARP's

by

that

by

However,

TARP's

cannot

into

question

the

state

must

be

courts.");

Plaintiffs

do

not

prohibition.

Rather,

the

Harvard

signing

prohibition

Harvard

...

instance

existence

the

therefore,

state

652427,

contend

incorporated
and,

under

the

Letter,

Employment

establish

that

Agreement

Plaintiffs

were

under a legal obligation to pay him the Allowance without first
showing that the Allowance is not a golden parachute payment as
defined by TARP.

It is apparent from all of the relevant briefings before
the Court that the parties hotly contest the significance of the
December

31,

2008

constitutes

an

Letter.

amendment

Plaintiffs

to

the

maintain

Employment

suggested in Paragraph 3 of such Letter.

that

the

Letter

Agreement,

See Compl.

as

Ex. 2, ECF

No. 1-5 (amending benefit plans to the extent necessary to give
effect

to

parachute

various
payments).

Letter constitutes,
provided
operates

action.

provisions,

for
as

in
a

interpretation

Meanwhile,

at
the

defense

The
of

including

best,

to

his

resolution
the

Harvard

a waiver of

Employment

Letter

and
27

this
its

ban

on

contends

golden

that

the

certain compensation

Agreement

threatened

of

the

and,

breach

therefore,
of

dispute—the
scope—will

contract

proper
determine

whether TARP arises as
of

contract

question

a necessary element of

claim or merely

is

governed

by

as

a

state

defense

Harvard's breach

to

The

law.

contract

such claim.
See

v.

Circuit City Stores,

Inc.,

370 F.3d 417,

421-22

(citing

Sci.,

Inc.

v.

of

U.S.

486,

474

Volt

Stanford

Info.

Univ.,

489

Bd.

James

(4th Cir.

Trustees

(1989)

2004)

of

Leland

(interpretation

of

private contracts is a question of state law)).

Where a dispute—even one
of

federal

dismissal

law—turns
for

appropriate.

Auth.,
lack of

lack

on
of

a

involving a
question

federal

of

federal

question

687

state

question

N. Jefferson Square Assocs,

32 Fed. App'x 684,

substantial question
contract

jurisdiction

L.P.

v. VA Hous.

(2002)

(affirming dismissal

jurisdiction in a

breach of

law,
is
Dev.

for

contract

action by the owner of low income housing apartments against the

state housing authority because the dispute
interpretation of the Mortgage Deed of Trust,

"turn[ed]

upon the

the HAP Contract,

and related documents,

a question of state contract law").

a

law

question

of

Commonwealth of

threshold

state

Virginia

dispute

Harvard's

between

threatened

is
to

best

left

resolve.

the

breach

to
Given

parties,
of

contract

necessarily raise a stated federal issue.
at

*5;

see also Franchise Tax Bd.,

F.3d at 442

(quoting Christianson,
28

the

the

courts

this

Court
claim

Gunn,

of

Such

the

significant,

finds

that

does

not

2013 WL 610193,

463 U.S.

at 13;

Pinney,

402

486 U.S.

at 808). This case

does not fall within the "'special and small category' of cases"
that arise under state law but nevertheless support the exercise

of federal jurisdiction.
Empire

Healthchoice

Gunn,

2013 WL 610193,

Assurance,

547

U.S.

at *5

at

699);

(quoting
see

also

Pinney, 402 F.3d at 442.

The mere

enough

to

threshold

entice

that TARP is

this

questions

prohibition
Harvard's
and

fact

may

Court

of

at

issue,

parties concerning the
Letter

does

not

concerning

through

contract

law.

point

interpretation of

at

the

Court

this

to

time

Gunn,

&

at

Sons,

545

Therefore,

U.S.

the

Court

action—Harvard's

support

this

2013 WL 610193,

314;

Franchise

finds

threatened

that
breach

Court

courts

later

observes

in

the
of

requires

that

deciding

between

the

the

2008

question

upsetting

the

and state judicial

Bd. ,

first

see also Grable
463

U.S.

alleged

contract

Court's jurisdiction over the

judgment action under 28 U.S.C.
prohibition

resolve

of

an actual

the December 31,

at *6;

Tax

TARP's

resolution

dispute

federal

not

significant,

time be

without

congressionally approved balance of
responsibilities.

the

that

significant

the

Although

in

and may at

the

permit

TARP

wade

some

threatened claim,

substantial

to

state

arise

implicated in the case is

at

cause

claim—does

13.

of
not

instant declaratory

§ 1331.

To the extent TARP's

interpretation and

application,

state

courts

federal

and
29

are

as

capable

constitutional

as

issues.

the

federal

See

Employers

(4 th

Res.

Cir.

Mgmt.

1995)

competence

of

Co.,

Inc.

("There

the

is

state

v.

no

Shannon,

concern

courts

to

65

on

F.3d

our

decide

1126,

part

issues

1135

with

of

the

federal

law.").
ii.
The

Judicial Review Pursuant to 12 U.S.C.
Court

next

considers

the

second

cause

§ 5229
of

action

Plaintiffs argue Harvard "could affirmatively bring"

support federal jurisdiction of this action:
pursuant

to

Treasury's

payment

12

U.S.C.

position

§

that

prohibited under

Columbia Gas,

5229

the

for

TARP.

ECF

is

No.

that would

a potential action

judicial

Allowance

that

a

8

review
golden

at

of

the

parachute

11-12

(quoting

237 F.3d at 370).

Plaintiffs assert that the Court would have jurisdiction of

a review action pursuant to 12 U.S.C.

§ 5229 and that Plaintiffs

would be a necessary party to such action under Federal Rule of
Civil

Procedure

federal

claim under

under federal

bring

19(a)(1).

against

therefore

action.

12

law that

the

Harvard responds

U.S.C.

§ 5229

not

"a

the proffered

claim arising

the declaratory judgment defendant could

declaratory

insufficient

is

that

to

judgment

support

plaintiff,"

jurisdiction

ECF No. 9 at 7 (quoting Columbia Gas,

of

the

and

is

instant

237 F.3 at 370)

(emphasis added).

When
sufficient

determining
to

support

whether

a

federal

potential
jurisdiction

30

coercive
of

a

action

is

declaratory

judgment

action,

the

Courts

looks

to

the

complaint

for

declaratory judgment to determine "whether it seeks declaratory
relief

on

defendant]

a

matter

for

[the

declaratory

judgment

could bring a coercive action arising under federal

law

against

Gas,

237 F.3d at 370.

that

which

TARP

Although

[the

judgment

Plaintiffs'

prohibits

the

Plaintiffs

declaratory

them

from

Complaint

requested

guidance

Harvard's resignation,

Columbia

Complaint seeks a declaration

paying

briefly

plaintiff]."

Harvard

references

from

the

the

the

Allowance.

fact

Treasury

that

following

the Bank alleges no facts concerning the

nature of its communications with the Treasury nor the finality

of the Treasury's decision concerning the Allowance.

12 U.S.C.

§ 5229 makes agency actions under TARP reviewable according to
the

Administrative

seq.

Procedures

Act

("APA"),

5

U.S.C.

§

701

et

The APA limits judicial review of agency actions to those

actions

"made

reviewable

by

statute

and

[to]

final

agency

actions for which there is no other adequate remedy in a court."
5 U.S.C.

§ 704.
the

Plaintiffs'
Court

to

Complaint sets forth no facts that

would

enable

fact,

seek judicial review of the Treasury's alleged "guidance"

concerning the Allowance.
action,

determine

Thus,

whether

unlike the

Harvard

could,

in

breach of contract

about which the parties have argued extensively in their

briefs,

a

potential

largely

speculative

action

and

not

pursuant

clearly
31

to

12

U.S.C.

cognizable

§

based

5229

is

on

the

facts set forth in the Complaint.
facts

alleged

controversy
solely

on

...
the

warrant the
U.S.

at

to

show

of

the

existence

issuance of

12

of

immediacy

sufficient

suggested

There are simply not enough

and

U.S.C.

§

5229

"a

substantial

reality,"

review

"to

Medlmmune,

declaratory judgment."

action,

549

127.

Alternatively,

even if facts sufficient to establish such a

controversy were properly before the Court,

they would not show

the existence of a controversy between these parties.
As

Harvard

action
when

notes,

supports

the

the

declaratory

judicial

"reverse"

the

Harvard argues,
prohibited

by

Circuit

relief

a

pursuant

sought

relief

to

has

is

the

from

12

Plaintiffs

paying

that

15 U.S.C.

a

"reverse"

U.S.C.

§

now

seek.

the

action

of

such

An action

5229

is

not

the

Instead,

as

claim that

Allowance

id.

coercive

judgment

is

contract claim for failure to pay the Allowance.
the Court finds

See

237 F.3d at 370.

the reverse of Plaintiffs'
TARP

held

declaratory

See Columbia Gas,

review

of

Fourth

jurisdiction of

coercive action.

for

based

a

they are
breach

of

Accordingly,

the alleged judicial review action pursuant

to

§ 5229 is insufficient to support federal jurisdiction

of the instant action for the reasons stated above.

Because

neither

this

Court's

exercise

finds

that

lacks

it

of

of
an

the

alleged

coercive

jurisdiction in this
independent
32

basis

for

actions

case,

support

the

Court

jurisdiction of

this

declaratory

judgment

DISMISSES the action.

action.

Arbaugh,

Accordingly,

546 U.S.

at 514;

the

Fed.

Court

R. Civ.

P.

12(h) (3) .
V.

ATTORNEYS'

In addition to dismissal of
asks

the

Paragraph

Court

11

previously

of

to

award

the

Employment

noted,

Harvard

him

filed

FEES

Plaintiffs'

Complaint,

attorneys'

fees

Agreement.

his

own

As

Harvard

pursuant

the

Court

declaratory

to

has

judgment

action in the Norfolk Circuit Court on May 22,

2012

seeking a

declaration

fees

and

that

he

is

entitled

to

attorneys'

litigation expenses under Paragraph 11.
remains

pending before

other

This action apparently

the Norfolk Circuit

Court.

Thus,

the

relief Harvard seeks is the same relief initially sought in (and

still pending before)

a state court.

Accordingly,

this Court

declines to reach the question of Harvard's entitlement to such
fees in advance of the Norfolk Circuit Court's interpretation of

Paragraph

11.

Harvard's

therefore,

DENIED.
VI.

For

all

of

the

request

for

attorneys'

fees

Harvard's

motion

is,

CONCLUSION

foregoing

reasons,

to

dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) is
GRANTED.

Harvard's

request

for

attorneys'

fees

is

DENIED.

Plaintiffs' Complaint for Declaratory Judgment is DISMISSED.

33

The Clerk is REQUESTED

to

send a copy of

this Opinion and

Order to counsel of record for the parties.

IT

IS

SO

ORDERED,

m&

/S/I
Mark S.

Davis

United States District Judge

Norfolk, Virginia

March S

, 2013

34