Free Memorandum - District Court of Federal Claims - federal

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 1 of 78

IN THE UNITED STATES COURT OF FEDERAL CLAIMS LAND GRANTORS IN HENDERSON, UNION and WEBSTER COUNTIES, KENTUCKY and THEIR HEIRS, ) ) ) ) Claimants, ) ) v. ) ) THE UNITED STATES ) ) Defendant. ) ___________________________________ )

No. 93-648-1L Judge Susan G. Braden

UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, MOTION FOR JUDGMENT ON THE RECORD

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 2 of 78

TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv MEMORANDUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. PROCEDURAL BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. B. Pre-Trial Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Court's Sua Sponte Document Requests and the First Interim Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Events Subsequent to the Issuance of the First Interim Report . . . . . . . . . . . 4

C. II. III.

STANDARDS OF REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 A. This is a Congressional Reference Proceeding, and the Court Lacks Jurisdiction to Enter Final Judgment Under the Tucker Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Claimants Lack Standing to Bring a Tucker Act Claim . . . . . . . . . . . . . . . . 13 Claimants' Tucker Act Claim Is Barred by the Six-Year Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1. Claimants' Mutual Mistake Claim Accrued No Later Than September 1967, and Is Therefore Barred by the Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 The Doctrine of Equitable Tolling Is Not Available . . . . . . . . . . . . . . 18 i. Even if Equitable Tolling Is "Available in a Sufficiently Analogous Private Suit," this Claim Would Still Be Time Barred . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Congress Has Expressed a Clear Intent that Equitable Tolling Should Not Apply in Section 2501 . . . . . . . 21

B. C.

2.

ii.

i

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 3 of 78

3.

Even if Equitable Tolling Is Permitted Under Section 2501, the Facts of this Case Do Not Warrant Application of the Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . 25 i. Claimants Did Not Diligently Pursue Their Legal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 No Extraordinary Circumstance Stood in the Way of Any Claimant Asserting His or Her Legal Right . . . 31 a. "The record evidences that numerous requests/petitions were made by the former landowners to repurchase their land after World War II ended." Land Grantors I, 64 Fed. Cl. at 713. . . . . . . . . . . . . . . 33 "The record also evidences that there was considerable confusion about what federal office was responsible for decisions about disposal of Camp Breckinridge that was caused by the Government." Land Grantors I, 64 Fed. Cl. at 713. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 "The record evidences no public notice or local news article[s] about the 1957 lease to Felmont Oil or [the] 1959 lease to Kingwood Oil at the time they were entered." Land Grantors I, 64 Fed. Cl. at 714. . . . . . . . . . . . . . . 37 "Landowners living in the Henderson, Union, and Webster County areas may have assumed, albeit erroneously, that sufficient efforts were made to preserve their legal rights to benefit from the doctrine of equitable tolling by the filing of the Higginson complaint." Land Grantors I, 64 Fed. Cl. at 715. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ii.

b.

c.

d.

ii

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 4 of 78

e.

"Plaintiffs did not have the ability to compel the Government to obtain and release information about the 1957 and 1959 leases and 1965 sales" because the "Freedom of Information Act, 5 U.S.C. § 552, et seq., ("FOIA") was not enacted until 1966." Land Grantors I, 64 Fed. Cl. at 715. . . . . . . . . . . . . . . 40

iii.

The United States is Significantly Prejudiced by Application of the Doctrine of Equitable Tolling . . . . . . . . . . 41

4. D. E.

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Count I is Barred by the Doctrine of Laches . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Count I Must be Dismissed for Failure to State a Claim Upon Which Relief Can Be Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 1. Claimants' Right to Avoid the Contracts Are Barred for Failure to Act Within a Reasonable Time . . . . . . . . . . . . . . . . . . . . . . 44 Subsequent Discovery of Commercially Valuable Mineral Deposits Cannot Retroactively Create a Mistake of Fact . . . . . . . . . 45 The Alleged Mistake of Fact Did Not Have a Material Effect on the Parties' Bargain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 The Former Landowners Bore the Risk of Mistake . . . . . . . . . . . . . . 48

2.

3.

4. F.

In the Alternative, Count I Cannot Be Supported Under the Trial Record Generated in Land Grantors v. United States, No. 94-643X (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 1. 2. 3. The Parties Were Not Mistaken About Any Fact . . . . . . . . . . . . . . . . 52 There Was No Subsequent Discovery of Any Mistake of Fact . . . . . 58 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

G.

Claimants Failed to Prove Damages Caused by the Alleged Mutual Mistake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

IV.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

iii

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 5 of 78

TABLE OF AUTHORITIES FEDERAL CASES Aetna Casualty & Surety v. United States, 228 Ct. Cl. 146 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Alder Terrace, Inc. v. United States, 161 F.3d 1372 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Allen v. Wright, 468 U.S. 737 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Anderson v. United States, 344 F.3d 1343 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Anderson v. United States, 73 Fed. Cl. 199 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Bailey v. West, 160 F.3d 1360 (Fed. Cir. 1998) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Baldwin County Welcome Center v. Brown, 466 U.S. 147 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 41 Bowen v. City of New York, 476 U.S. 467 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Brice v. Sec'y of Health & Human Servs., 240 F.3d 1367 (Fed. Cir. 2001), cert. denied, 534 U.S. 1040 (2001) . . . . . . . . . . . . . . . 19 Burger King Corp. v. Mason, 710 F.2d 1480 (11th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Campbell v. Potter, 2004 WL 2861871 (E.D. Pa. Dec. 9, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Colorado Coal & Iron Co. v. United States, 123 U.S. 307 (1887) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44-46 Dairyland Power Coop. v. United States, 16 F.3d 1197 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43, 46

iv

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 6 of 78

Drew v. Dep't of Corrections, 297 F.3d 1278 (11th Cir. 2002), cert. denied, 537 U.S. 1237 (2003) . . . . . . . . . . . . . . . 28 DuMarce v. Scarlett, 446 F.3d 1294 (Fed. Cir. 2006), cert. denied, _ U.S. _, 127 S.Ct. 1335 (2007) . . . . 19, 26 Emerald Maint., Inc. v. United States, 925 F.2d 1425 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Entines v. United States, 39 Fed. Cl. 673 (1997), aff'd, 185 F.3d 881 (Fed. Cir. 1999), cert. denied, 526 U.S. 1117 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Erickson Air Crane Co. v. United States, 731 F.2d 810 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Eurell v. United States, 566 F.2d 1146 (Ct. Cl. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Fallini v. United States, 56 F.3d 1378 (Fed. Cir. 1995), cert. denied, 517 U.S. 1243 (1996) . . . . . . . . . . . . . . . . 17 Figueroa v. United States, 57 Fed. Cl. 488 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Firestone & Parson, Inc. v. Union League of Philadelphia, 672 F.Supp. 819 (E.D. Pa. 1987), aff'd, 833 F.2d 304 (3rd. Cir. 1987) . . . . . . . . . . . . . 20 Flippin Materials Co. v. United States, 160 Ct. Cl. 357 (1963) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 52 Frazer v. United States, 288 F.3d 1347 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19 Friends of Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Godley v. United States, 5 F.3d 1473 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Grymes v. Sanders, 93 U.S. 55 (1876) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 44, 45

v

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 7 of 78

Hansen Bancorp, Inc. v. United States, 367 F.3d 1297 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Higginson v. United States, Case No. 2074 (W.D. Ky. Sept. 7, 1965) (unpublished), aff'd, 384 F.2d 504 (6th Cir. 1967), cert. denied, 390 U.S. 947 (1968), reh'g denied, 391 U.S. 961 (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 48 Hopland Band of Pomo Indians v. United States, 855 F.2d 1573 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Irwin v. Dep't of Veterans Affairs, 498 U.S. 89 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 25-31 John R. Sand & Gravel Co. v. United States, 457 F.3d 1345 (Fed. Cir. 2006), reh'g en banc denied (Nov. 30, 2006), cert. granted in part, _ U.S. _, 127 S.Ct. 2877 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Kanehl v. United States, 38 Fed. Cl. 89 (1997), adopted by Kanehl v. United States, 40 Fed. Cl. 762 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Kirkendall v. Dep't of Army, 479 F.3d 830 (Fed. Cir. 2007) (en banc), petition for cert. filed, 76 USLW 3009 (July 5, 2007) . . . . . . . . . . . . . . . . . . . . . 19, 22-24 Lampf v. Gilbertson, 501 U.S. 350 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Land Grantors v. United States, 64 Fed. Cl. 661 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Land Grantors v. United States, 69 Fed. Cl. 435 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 11, 42 Land Grantors v. United States, 71 Fed. Cl. 614 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 29, 37, 42 Land Grantors v. United States, 74 Fed. Cl. 518 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 5, 27, 37, 39, 59, 60 Land Grantors v. United States, 77 Fed. Cl. 686 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9, 11

vi

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 8 of 78

Landmark Land Co. v. FDIC, 256 F.3d 1365 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 MacLean v. United States, 454 F.3d 1334 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Martinez v. United States, 333 F.3d 1295 (Fed. Cir. 2003) (en banc), cert. denied, 540 U.S. 1177 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-19, 25-27 Miller v. Albright, 523 U.S. 420 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Mobil Oil Exploration & Producing Southeast, Inc. v. United States, 530 U.S. 604 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 N.Y. Life Ins. Co. v. United States, 190 F.3d 1372 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8 Nat'l Austl. Bank v. United States, 452 F.3d 1321 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 43, 44 Northrop Grumman Corp. v. United States, 47 Fed. Cl. 20 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Pace v. DiGuglielmo, 544 U.S. 408 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 27, 31 Paine Webber Real Estate Sec., Inc. v. D.G. Meyer & Co., 835 F.Supp. 116 (S.D.N.Y. 1993), aff'd, 9 F.3d 242 (2nd Cir. 1993) . . . . . . . . . . . . . . . 20 Palumbo v. Ewing, 540 F. Supp. 388 (D. Del. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Philippine Sugar Estates Dev. Co. v. Government of Philippine Islands, 247 U.S. 358 (1918) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Powers v. Ohio, 499 U.S. 400 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

vii

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 9 of 78

Price v. Symsek, 988 F.2d 1187 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Principal Life Ins. Co. v. United States, 70 Fed. Cl. 144 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ransom v. United States, 900 F.2d 242 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Santana-Venegas v. Principi, 314 F.3d 1293 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 School Dist. of City of Allentown v. Marshall, 657 F.2d 16 (3rd Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Singleton v. Wulff, 428 U.S. 106 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-16 Southwest Welding & Mfg. Co. v. United States, 179 Ct. Cl. 39, 373 F.2d 982 (Ct. Cl. 1967) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Truckee-Carson Irrigation Dist. v. United States, 14 Cl. Ct. 361 (1988), aff'd, 864 F.2d 149 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . 7 United States v. Beggerly, 524 U.S. 38 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 United States v. Brockamp, 519 U.S. 347 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 23 Virginia v. Am. Booksellers Ass'n, 484 U.S. 383 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Wallace v. Kato, _ U.S. _, 127 S.Ct. 1091 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

viii

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 10 of 78

Warren v. United States, 74 Fed. Cl. 723 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 STATE CASES Allied Chem. Corp. v. Union County Bd. of Supervisors, 511 S.W.2d 196 (Ct. App. Ky. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 City of New Bedford v. Lloyd Inv. Ass'n, 363 Mass. 112, 292 N.E.2d 688 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Developers Three v. Nationwide Ins. Co., 582 N.E.2d 1130 (Ohio App. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Haag v. State Bd. of Univ. & School Lands, 219 N.W.2d 121 (N.D. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Hollifield v. Blackburn, 294 Ky. 74, 170 S.W.2d 910 (1943) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Krahmer v. Christie's Inc., 903 A.2d 773 (Del. Ch. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 McNeely v. Philadelphia Nat'l Bank, 314 Pa. 334 (1934) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 FEDERAL STATUTES Freedom of Information Act, 5 U.S.C. § 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 40 28 U.S.C. § 1346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 28 U.S.C. § 1491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 5 28 U.S.C. § 1492 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 6, 8, 13 28 U.S.C. § 2501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 28 U.S.C. § 2509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-10 40 U.S.C. § 471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 40 U.S.C. § 751 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ix

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 11 of 78

FEDERAL RULES RCFC 12(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7 RCFC 12(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8, 45, 61 RCFC 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 RCFC 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 TREATISES Corbin on Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43, 49 2 E. Allan Farnsworth, FARNSWORTH ON CONTRACTS (3d ed. 2004) . . . . . . . . . . . . . . . . . . . . . 50 RESTATEMENTS RESTATEMENT (SECOND) OF CONTRACTS § 152 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 RESTATEMENT (SECOND) OF CONTRACTS § 154 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 RESTATEMENT (SECOND) OF CONTRACTS § 155 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . 45, 49, 50 OTHER LEGISLATIVE MATERIALS Senate Bill 794, 103d Cong. (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3 Senate Resolution 98, 103d Cong. (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 13 OTHER AUTHORITIES Frona M. Powell, Mistake of Fact in the Sale of Real Property, 40 Drake L. Rev. 91 (1990/1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Daniel Yergin, The Prize: The Epic Quest for Oil, Money & Power (Simon & Schuster 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

x

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 12 of 78

I.

PROCEDURAL BACKGROUND A. Pre-Trial Proceedings

Claimants filed this Congressional Reference matter pursuant to 28 U.S.C. section 1492, after the Senate transmitted Senate Bill 794, 103d Cong. (1993) ("S. 794"), and Senate Resolution 98, 103d Cong. (1993) ("S. Res. 98"), to this Court. See Comp. ¶ 1 (Docket No. 2); First Am. Compl. ¶ 1 (Docket No. 25). S. 794 limits relief to those former landowners, or heirs of former landowners, who can prove that they were: (1) (2) promised they would be given priority to repurchase land sold by them if sold by the United States Government; and paid less than reasonable value due in part to the refusal of the United States Government to compensate the owners for mineral, oil and gas rights.

S. 794, Sec. 2. The Senate directed the Chief Judge to "proceed . . . in accordance with the provisions of sections 1492 and 2509 of title 28, United States Code, and report back to the Senate, at the earliest practicable date, giving such findings of fact and conclusions that are sufficient to inform Congress of the amount, if any, legally or equitably due from the United States to the claimants individually." S. Res. 98. The Court notified potential claimants of the filing and gave them an opportunity to join. See Order, dated Jan. 24, 1995 (Docket No. 22). Claimants filed a First Amended Complaint on September 22, 1995, listing approximately 1,000 individuals who wished to participate in these proceedings. (Docket No. 25). On the same date, Claimants filed a Motion to Certify a Class (Docket No. 26), which the Court denied in December 1997. See Order, dated Dec. 23, 1997 (Docket No. 42). Claimants' First Amended Complaint, like Claimants' original complaint, alleged eight

1

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 13 of 78

counts.1/ In November 1998, the Court issued an order, which accomplished two things: (1) the Court dismissed Claims 2 and 5 in their entirety as well as the pertinent allegations of Claim 7; and (2) the Court dismissed any individual whose claims related to properties that the United States had acquired by direct condemnation. See Order, dated Nov. 24, 1998, at 9 (Docket No. 65). Claimants requested a stay on February 26, 1999, in order to determine which individuals remained in this litigation after the Court's November 1998 Order, and to develop a settlement position. (Docket No. 69). After Claimants developed their settlement position and the parties were unable to resolve their differences of opinion, the Court conducted a trial on September 8-10 and November 22-23, 2004. B. The Court's Sua Sponte Document Requests and the First Interim Report

After trial, the Court sua sponte asked the parties to submit information about the disposal of the Breckinridge properties in the mid-1960s. The government provided responsive documents to the Court on March 7, 2005. (Docket No. 162). These documents, which Claimants had access to prior to trial but had chosen not to introduce, included news releases about public auctions and advertisements for public auctions. The government argued at that time that the requested information was not relevant to any issues involved in this case: Claimants have never alleged any wrongdoing with respect to the public auction in the late 1960s and did not present any evidence with respect to that issue

The eight counts were: (1) Condemnation of Real Property Interests ­ Just Compensation Claim; (2) Condemnation of Real Property Interests ­ Alternative Claims; (3) Condemnation of Sub-surface Mineral Interests ­ Just Compensation Claim; (4) Condemnation of Sub-surface Mineral Interests ­ Due Process Claim; (5) Vested Right of Re-purchase ­ Due Process Claim; (6) Loss of Agricultural Products ­ Just Compensation Claim; (7) Loss of Agricultural Products ­ Due Process Claim; and (8) General Equity Claim. 2

1/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 14 of 78

during trial. As a consequence, there is limited evidence in the record pertaining to the auction and sale in the late 1960s. The government believes that the lack of evidence on this point is appropriate given that the congressional reference bill focuses on the government's acquisition of these properties, not the later sale. Def.'s Resp. to the Court's March 3, 2005 Email Correspondence at Ex. A (Docket No. 162). On March 23, 2005, the Court sua sponte requested additional information from the United States related to the amount the "Government was paid in 1967 for coal rights on Tracts 1, 7A, and 7B." Land Grantors v. United States, 64 Fed. Cl. 661, 695 (2005) ("Land Grantors I"). The United States filed a motion to limit review to the trial record (Docket No. 164), which the Court denied (Docket No. 165). The United States provided the requested information on March 31, 2005. (Docket No. 169). The Court issued an Interim Report Regarding S. 794 "A Bill For the Relief of Land Grantors in Henderson, Union, and Webster Counties, Kentucky, and Their Heirs" and Memorandum Opinion on April 1, 2005. See Land Grantors I, 64 Fed. Cl. 661. Among other conclusions, Land Grantors I dismissed Counts 6 and 7 of the First Amended Complaint for failure to prosecute, and held that "Plaintiffs' constitutional claims are not ripe for adjudication." See id. at 717. Although the title of Land Grantors I indicates that it is "Regarding S. 794," the Court expressed reluctance to issue a final report. Rather, the Court directed the parties to "show cause why the court should not enter a final judgment, pursuant to 28 U.S.C. § 1491(a)(1), and stay issuance of a Final Report, pursuant to S. 794." Id. at 718. The Court has since stated that Land Grantors I "dismissed all claims arising under S. 794, Section 2(1), 103d Cong. (1993)." Land Grantors v. United States, 74 Fed. Cl. 518, 521 (2006) ("Land Grantors IV"). The parties responded to the Court's show cause order in October 2005. See Def.'s Resp. to the Court's 3

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 15 of 78

Show Cause Order (Docket No. 181); Pls.' Memo. on Order to Show Cause Regarding Entry of Final Judgment (Docket No. 182). In Land Grantors I, the Court articulated a new basis for liability ­ mutual mistake ­ which was not mentioned in Claimants' First Amended Complaint. See Land Grantors v. United States, 69 Fed. Cl. 435, 437 n.1 (2005) ("Land Grantors II") ("As the Government correctly observed, `the doctrine of mutual mistake was identified sua sponte by the Court for the first time after post-trial briefing has been completed.'") (citation omitted). According to the Court, the 1942-1944 sales Contracts2/ were void because they were based on a mutual mistake that "no coal, gas, oil, or other mineral deposits existed under the condemned properties that would support exploration or operations at the time of sale." Land Grantors I, 64 Fed. Cl. at 703. C. Events Subsequent to the Issuance of the First Interim Report

On October 3, 2005, approximately thirteen months after trial, Claimants ­ for the first time ever in this litigation ­ asserted jurisdiction under 28 U.S.C. section 1491 and alleged a new claim of mutual mistake (Count I). See Second Am. Compl. at ¶¶ 32-40 (Docket No. 183). In Count I, Claimants repeat, as allegations, the Court's preliminary findings regarding mutual mistake in Land Grantors I. The United States opposed the filing. See Def.'s Opp'n to Filing of Claimants' Proposed Second Am. Compl., filed Oct. 18, 2005 (Docket No. 185). In December 2005, the Court requested additional briefing on whether it should sua

The Court defined "Contracts" to be "an option for purchase of land; a certificate of inspection and possession; an affidavit of the vendor; a warranty deed; and a receipt for the United States Treasurer's check." Land Grantors I, 64 Fed. Cl. at 702 n.38. 4

2/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 16 of 78

sponte reconsider the 1997 decision on class certification. (Docket No. 192).3/ In June 2006, the Court reconsidered the 1997 decision, certified an opt-in class, and requested additional briefing on the form of class notice. (Docket No. 211). The parties submitted proposed notices in August 2006.4/ On December 14, 2006, the Court issued a Second Interim Report, Memorandum Opinion, and Order. Land Grantors v. United States, 74 Fed. Cl. 518 (2006) ("Land Grantors IV"). In Land Grantors IV, the Court stated its intention to sua sponte defer "final disposition in this case until the en banc decision in Kirkendall[ v. Dep't of the Army] is issued and final." Land Grantors IV, 74 Fed. Cl. at 525. The Court also directed the parties to consider whether this case could be resolved by mediation. See id.; see also Order, dated Jan. 26, 2007 (Docket No. 217). The parties agreed to participate in mediation. See Pls.' Resp. to Order, dated Jan. 29, 2007 (Docket No. 218); Def.'s Resp. to Order, dated Feb. 15, 2007 (Docket No. 220). On February 28, 2007, the Court sua sponte severed any "claims asserted under 28 U.S.C. § 1491" and assigned the severed claims a new docket number ­ Case No. 93-648-1L. See Order, dated Feb. 28, 2007 (Docket No. 225). The United States objected to the Court's sua sponte severance order. See Def.'s Objection to Court's Feb. 28, 2007 Order (Docket No. 228). The Court's severance order resulted in the creation of this case ­ Land Grantors v. United

The United States opposed reconsideration. See Def.'s Resp. to Court's Dec. 29, 2005 Order (Docket No. 194); see also Def.'s Mot. to Strike Mot. for Reconsideration (Docket No. 197); Def.'s Reply in Support of Def.'s Mot. to Strike (Docket No. 199); Def.'s Opp'n to Claimants' Mot. to Reconsider Class Cert. (Docket No. 207).
4/

3/

See Def.'s Mot. to Approve Proposed Class Notice and Proposed Request to Join, dated Aug. 25, 2006 (Docket No. 214); Pls.' Status Report, dated Aug. 25, 2006 (Docket No. 213). The government's motion remains pending. 5

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 17 of 78

States, No. 93-648-1L (Fed. Cl.). As the government understands the Court's severance order, this case only includes Count I of the Second Amended Complaint. All other counts, which the government understands are asserted under 28 U.S.C. sections 1492 and 2509, are pending in Land Grantors v. United States, No. 93-648X.5/ Claimants withdrew from mediation on May 18, 2007, and asked the Court to stay their Tucker Act claim until final resolution of the Congressional Reference claims. See Pls.' Notice of Withdrawal (Docket No. 231). The United States responded on May 29, 2007. See United States' Resp. to Claimants' Notice of Withdrawal (Docket No. 232). On July 6, 2007, Claimants withdrew their earlier request and instead asked the Court to stay the Congressional Reference case and first resolve the Tucker Act claim. See Pls.' Resp. to Status Conference of June 27, 2007 (Docket No. 233). The Court's Third Interim Report, denying the government's Opposition to the Filing of Claimants' Proposed Second Amended Complaint and directing the filing of this motion, followed. See Land Grantors V, 77 Fed. Cl. 686. II. STANDARDS OF REVIEW In this motion, the United States raises both jurisdictional and non-jurisdictional defenses. The Court should dismiss Count I for lack of jurisdiction for three reasons: (1) this is a Congressional Reference matter only; (2) the majority of Claimants lack standing under the Tucker Act to pursue a claim of mutual mistake; and (3) a claim of mutual mistake is barred by the six-year statute of limitations, 28 U.S.C. section 2501. In addressing these defenses, it would be appropriate for the Court to apply the standards set forth in Rule 12(b)(1) of the Rules of the

5/

Consequently, this motion and memorandum does not focus on the verbal repurchase promises, which some Claimants have alleged were made in the 1940s. 6

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 18 of 78

Court of Federal Claims. Under this standard, "the court must accept as true the complaint's undisputed factual allegations and construe the facts in the light most favorable to plaintiff." Figueroa v. United States, 57 Fed. Cl. 488, 492 (2003) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). The plaintiff bears the burden of establishing subject matter jurisdiction, which must be done by a preponderance of the evidence. Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936)); Entines v. United States, 39 Fed. Cl. 673, 678 (1997) ("Plaintiff bears the burden of establishing all jurisdictional requirements, including compliance with the six-year statute of limitations, and must do so by a preponderance of the evidence."), aff'd, 185 F.3d 881 (Fed. Cir. 1999), cert. denied, 526 U.S. 1117 (1999). Where, as here, the Court lacks jurisdiction over subject matter of the complaint, the correct remedy is dismissal of the action. See TruckeeCarson Irrigation Dist. v. United States, 14 Cl. Ct. 361, 368 (1988) ("[U]nder [Court of Federal Claims] Rule 12(h)(3), this court is mandated to . . . dismiss the action `[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter. . . .'") (alteration in original), aff'd, 864 F.2d 149 (Fed. Cir. 1988). Accordingly, the Court should dismiss the complaint in its entirety pursuant to Rule 12(b)(1). If the Court determines it has jurisdiction to hear Count I, the Court should dismiss that claim for failure to state a claim upon which relief can be granted. Under this argument, Count I should be dismissed pursuant to Rule 12(b)(6). "The Court of Federal Claims may grant a motion to dismiss for failure to state a claim upon which relief may be granted where the plaintiff can prove no set of facts that would support its claim." N.Y. Life Ins. Co. v. United

7

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 19 of 78

States, 190 F.3d 1372, 1377-78 (Fed. Cir. 1999). Dismissal is proper under Rule 12(b)(6) when "the facts as alleged in the complaint do not entitle the plaintiff to a legal remedy." Holland v. United States, 59 Fed. Co. 735, 738 (2004) (citing N.Y. Life Ins. Co., 190 F.3d at 1377). If the Court determines it has jurisdiction to hear Count I and declines to dismiss the claim pursuant to Rule 12(b)(6), the United States is entitled to judgment because this claim is barred by the doctrine of laches. In addition, the United States is entitled to judgment based on the trial record generated in Land Grantors v. United States, No. 94-638X. In order to succeed on this claim, Claimants must satisfy each element of mutual mistake by "clear and convincing evidence." Nat'l Austl. Bank v. United States, 452 F.3d 1321, 1329-30 (Fed. Cir. 2006); see also Price v. Symsek, 988 F.2d 1187, 1191 (Fed. Cir. 1993) ("A requirement of proof by clear and convincing evidence imposes a heavier burden upon a litigant than that imposed by requiring proof by preponderant evidence but a somewhat lighter burden than that imposed by requiring proof beyond a reasonable doubt."). As discussed below, Claimants fail to meet this burden of proof, and Count I must be rejected. III. ARGUMENT A. This is a Congressional Reference Proceeding, and the Court Lacks Jurisdiction to Enter Final Judgment Under the Tucker Act

Claimants originally filed this matter pursuant to 28 U.S.C. sections 1492 and 2509 only, not the Tucker Act. See Compl. ¶ 1; First Am. Compl. ¶ 1. Claimants sought only the issuance of a report that could be transmitted to Congress in accordance with 28 U.S.C. section 2509, not entry of final judgment. See First Am. Compl. at 59-60 (request for relief, which seeks only a recommendation to the Senate); Compl. (unnumbered) (same). The parties litigated this matter as a Congressional Reference matter, and the Court treated it as such, from its initial filing in 8

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 20 of 78

January 1994, to October 2005. E.g., Trial Transcript ("Tr. Tr.") at 177:12-14 (Court permitting Claimants' expert witness to submit an amended expert report after testifying on direct and stating "[i]f this was not a Congressional Reference case, we wouldn't be doing this at all, quite candidly"). In October 2005, thirteen months after trial and six months after the Court issued Land Grantors I, Claimants submitted a proposed Second Amended Complaint, which added a claim of mutual mistake and alleged jurisdiction under the Tucker Act. See Second Amended Complaint, Count I. The United States opposed the filing. However, the Court allowed the amended complaint to be filed on July 31, 2007. See Land Grantors V, 77 Fed. Cl. at 687. As discussed in more detail in the Defendant's Response to the Court's Show Cause Order (filed Oct. 3, 2005) (Docket No. 181), which the United States incorporates herein by reference, this Court lacks jurisdiction to enter final judgment in this Congressional Reference matter. The Court's powers under 28 U.S.C. section 2509 are wholly advisory; the statute does not permit the Court to issue a final judgment against the United States. If the Court believes Claimants have a viable legal claim (or a viable equitable claim), the statutorily-prescribed course of action is for the Court to inform the Senate in a report. See 28 U.S.C. § 2509(c) (stating that a hearing officer must inform Congress "whether the demand is a legal or equitable claim or a gratuity, and the amount, if any, legally or equitably due from the United States to the claimant"); Appendix D ¶ 6 to the Rules of the Court of Federal Claims (same); see also Def.'s Resp. to the Court's Show Cause Order at 1-4 (Docket No. 181) (discussing the legislative history of 28 U.S.C. section 2509). Even if 28 U.S.C. section 2509 allowed for entry of final judgment in Congressional

9

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 21 of 78

Reference cases, that option would be foreclosed here because Claimants explicitly waived all legal claims before, during and after trial. See, e.g., Pls.' Pre-Trial Memo. (Docket No. 124) at 23 ("This Congressional Reference action presents an equitable claim for resolution by the Court."); Pls.' Objections to the Def.'s Pre-Trial Filings (Docket No. 135) at 3 ("The Claimants will not seek to establish a `legal claim' at trial."); Tr. Tr. at 164:17 (Claimants' Counsel: "We do not have a legal claim in this case."); Tr. Tr. at 165:21-22 (Claimants' Counsel: "We are not claiming, Your Honor, that there is a breach of contract. . . ."); Pls.' Post-Trial Br. (Docket No. 156) at 65 ("This is not a contract case."). The parties' pre-trial pleadings and post-trial memoranda are devoid of any mention of the doctrine of mutual mistake. See Def.'s Response to Court's Show Cause Order at 4-9. Claimants did not assert any claim under the Tucker Act in their complaint, pre-trial filings or their post-trial brief. Claimants, therefore, waived any and all legal claims, and cannot assert them now in a new complaint, filed well after trial ended. See Principal Life Ins. Co. v. United States, 70 Fed. Cl. 144, 157 (2006) ("Under Rule 16 of the Federal Rules of Civil Procedure, which is virtually identical to RCFC 16, legal[] and . . . factual theories not raised in pretrial filings generally are considered to be waived or abandoned."). The Court acknowledged that the "First Amended Complaint did not set forth a separate claim for alleged mutual mistake," but asserted in Land Grantors I that "the requisite elements are set forth in [several enumerated paragraphs in the First Amended Complaint]." Land Grantors I, 64 Fed. Cl. at 707.6/ The Court subsequently acknowledged, however, that it sua

The United States considered each of the paragraphs identified in Land Grantors I in its Response to the Court's Show Cause Order at 4-9, dated Oct. 3, 2005 (Doc. No. 181). As discussed there, it is the government's position that none of the elements of a mutual mistake claim are alleged in the paragraphs enumerated in Land Grantors I. 10

6/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 22 of 78

sponte identified the doctrine of mutual mistake after trial, but asserted that "[t]his basis for liability, in large part, only became apparent after post-trial briefing was completed when the court required the Government to supplement the record with documents relevant to S. 794 that previously were not produced." Land Grantors II, 69 Fed. Cl. at 437 n.1 (emphasis in original). According to the Court, then, although Claimants asserted a claim of mutual mistake in 1994, that claim only became apparent after the Court required the United States to submit certain documents after trial. And although Claimants' First Amended Complaint (and both parties' pre- and post-trial memoranda) did not mention "mutual mistake" or the Tucker Act (and despite the fact that Claimants' counsel explicitly waived all legal claims on multiple occasions before, during, and after trial), Claimants were allowed to amend their complaint more than a year after trial to add such a claim because, the Court concluded, these issues were tried by express or implied consent of the United States. See Land Grantors V, 77 Fed. Cl. at 687 (citing RCFC 15(b)). The United States submits that these procedures cannot be sustained. It is the United States' position that the documents the Court requested sua sponte after trial ("the disposal-related documents") did not elucidate a theory of mutual mistake. The Court referenced the disposal-related documents (identified as Court Exhibits 3A-3L) three times in its discussion of mutual mistake. These citations do not support a claim of mutual mistake: 1. The Court relied on Court Ex. 3A and Court Ex. 3I to reach a conclusion that "the former landowners' claim arising from the 1967 coal sale accrued on or about September 29, 1967." Land Grantors I, 64 Fed. Cl. at 711. Court Exhibit 3A does not include any documents with a September 1967 date. Court Exhibit 3I, an invitation to bid on certain coal rights, shows that bids for certain coal interests

11

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 23 of 78

would be opened on September 29, 1967. While Court Exhibit 3I certainly shows when the coal rights were sold, the document does not elucidate a claim of mutual mistake (or support a conclusion that the parties shared a mistake as to any fact when the Contracts were signed in the early 1940s). 2. The Court relied on Court Ex. 3A (denoted as "Court Ex. 4A") to conclude that the General Service Administrator's Commissioner accurately informed three individuals in 1978 that the "disposal of Camp Breckinridge was in accordance with existing laws and regulations and has withstood judicial review." Land Grantors I, 64 Fed. Cl. at 711 n.49 (relying on the document to support a conclusion that the government's conduct did not rise to fraudulent concealment). This document does not relate in any fashion to facts supporting a claim of mutual mistake. 3. The Court cites Court Ex. 3A to show that Congressman Carroll Hubbard was afforded an opportunity to examine "any and all correspondence and documents of the General Services Administration relating to the disposition of acquisitions of Camp Breckinridge" in 1978. Land Grantors I, 64 Fed. Cl. at 716 n.54. That letter, too, does not elucidate (or relate to) a claim of mutual mistake. The disposal-related documents, therefore, do not support a claim of mutual mistake under the Tucker Act. This is a Congressional Reference matter only, and the Court lacks jurisdiction to enter final judgment pursuant to the Tucker Act. See also Def.'s Resp. to the Court's Show Cause Order (Docket No. 181). Delaying final resolution of the Congressional Reference matter is

12

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 24 of 78

inconsistent with the rules of this Court and the Senate's explicit direction to proceed with 28 U.S.C. section 1492 and 2509 and report back "at the earliest practicable date." S. Res. 98. Trial was concluded in the Congressional Reference matter nearly three years ago. The Court should, therefore, dismiss Claimants' Tucker Act claim and issue a final report in the Congressional Reference matter. B. Claimants Lack Standing to Bring a Tucker Act Claim

If the Court intends to treat this Congressional Reference matter as a Tucker Act claim, the vast majority of Claimants must be dismissed for lack of standing. In every federal case, a plaintiff must establish standing in order to invoke the court's jurisdiction. See Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 975 (Fed. Cir. 2005). The party invoking federal jurisdiction bears the burden of establishing standing by a preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). Standing stems from Article III's limitation "on `the federal judicial power to the resolution of actual `cases' or `controversies.'" Anderson v. United States, 344 F.3d 1343, 1349 (Fed. Cir. 2003) (quoting U.S. Const. art. III, § 2); id. at 1350 n.1 (standing applies to Article I courts that exercise the judicial power of the United States). Standing also includes prudential limitations, including "the general prohibition on a litigant's raising another person's legal rights. . . ." Allen v. Wright, 468 U.S. 737, 751 (1984). Claimants are unable to overcome two separate standing problems. First, most Claimants are alleged heirs of former landowners, not former landowners themselves. These individuals did not sign any Contracts, and are not in privity of contract with the government. See Ransom v. United States, 900 F.2d 242, 244 (Fed. Cir. 1990) (privity of contract exists when the contract

13

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 25 of 78

is "between the plaintiff and the government and entitle[s] the plaintiff to money damages in the event of the government's breach of that contract"); Erickson Air Crane Co. v. United States, 731 F.2d 810, 813 (Fed. Cir. 1984) ("The government consents to be sued only by those with whom it has privity of contract. . . ."). Where a litigant asserts the injury of another, as here, he or she must overcome a presumption against third-party standing. See Miller v. Albright, 523 U.S. 420, 445 (1998); Singleton v. Wulff, 428 U.S. 106, 113 (1976) ("Federal courts must hesitate before resolving a controversy, even one within their constitutional power to resolve, on the basis of the rights of third persons not parties to the litigation."). The Supreme Court has permitted third-party standing only when the litigant satisfies "three important criteria": The litigant must have suffered an "injury in fact," thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute; the litigant must have a close relation to the third party; and there must exist some hindrance to the third party's ability to protect his or her own interests. Powers v. Ohio, 499 U.S. 400, 411 (1991) (internal citations omitted). Claimants do not satisfy these criteria. First, standing requires "at an irreducible minimum an injury in fact; that is, there must be some `threatened or actual injury resulting from the putatively illegal action.'" Virginia v. Am. Booksellers Ass'n, 484 U.S. 383, 392 (1988). That injury must be "(a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Friends of Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180 (2000). The alleged heirs of the former landowners cannot make such a showing. Any alleged monetary harm to the heirs is purely speculative ­ i.e., if the parties had not made a mutual mistake, perhaps the former landowners would have gone through a condemnation trial rather than voluntarily selling their property; 14

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 26 of 78

perhaps the jury would have awarded more money than the government's offer; perhaps the former landowners would have retained those funds until their death; perhaps the former landowner would have bequeathed those funds to Claimants rather than someone else. This alleged harm is far too speculative to rise to an "injury in fact" for standing purposes.7/ Second, a "close relation" requires that the litigant be "fully, or very nearly, as effective a proponent of the right" as the third party. Singleton, 428 U.S. at 115. The alleged heirs lack such a relationship. Many Claimants are generations removed from a former landowner, and some have apparently never spoken to any former landowners. E.g., CX-64 at 61 (alleging certain Claimants are Great Granddaughters to former landowners). Consequently, almost all of Claimants' discovery responses included no useful information about even the most basic allegations. E.g., DX-669 (showing that none of the discovery respondents named a government agent who allegedly made a verbal repurchase promise, and 117 out of 194 discovery responses did not even allege that a government agent had made such a promise). None of the Claimants have ever presented any evidence to support a theory of mutual mistake, and would have no ability to do so given their lack of first hand knowledge about the signing of the Contracts. Claimants are not "fully, or very nearly" as effective as the former landowners in pursuing these claims, and cannot satisfy third-party standing. Singleton, 428 U.S. at 115. Finally, Claimants have never alleged (much less proven) that any former landowner faced some hindrance that limited his ability to protect his own interests. See id. at 116

In Land Grantors I, the Court stated that "Plaintiffs have `legally protected interests' in their former land, including coal, gas, oil and other mineral rights and the 1942-1944 contracts with the Government, which allegedly were `invaded' or adversely affected." Land Grantors I, 64 Fed. Cl. at 696. The Court's statement appears limited to former landowners, not the majority of Claimants who are heirs of former landowners. 15

7/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 27 of 78

(requiring there to be "some genuine obstacle" to third party's ability to sue). Even if, as Claimants now allege, most former landowners are now deceased, Claimants have not shown any reason why this suit could not have been brought by the former landowners themselves decades ago. The heirs of the former landowners, therefore, lack standing to pursue a Tucker Act claim, and their claims must be dismissed. In addition to the above, a second standing problem exists. A majority of former landowners had leased their mineral rights to third party oil and gas companies well before the United States acquired the Breckinridge properties. The government paid the third party oil and gas companies for their rights under these leases and paid the former landowners for their leases. Claimants lack standing to raise any complaint about the amounts the United States paid the third parties for their mineral interests. The Court should, therefore, dismiss any Claimant whose claim relates to a tract where the former landowner had entered into a mineral lease prior to the government's acquisition. C. Count I Is Barred by the Six-Year Statute of Limitations

As discussed below, the parties did not enter into the Contracts with a mutual mistake, and the doctrine of mutual mistake has no application in this case. See discussion, supra §§ III(E), (F). Even if the doctrine of mutual mistake could potentially apply in this case, that claim is barred by the six-year statute of limitations and, therefore, must be dismissed for lack of jurisdiction. See 28 U.S.C. § 2501.

16

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 28 of 78

1.

Claimants' Mutual Mistake Claim Accrued No Later Than September 1967, and Is Therefore Barred by the Statute of Limitations

"The six-year statute of limitations set forth in Section 2501 is a jurisdictional requirement for a suit in the Court of Federal Claims." John R. Sand & Gravel Co. v. United States, 457 F.3d 1345, 1354 (Fed. Cir. 2006), reh'g en banc denied (Nov. 30, 2006), cert. granted in part, _ U.S. _, 127 S.Ct. 2877 (2007); Martinez v. United States, 333 F.3d 1295, 1316 (Fed. Cir. 2003) (en banc), cert. denied, 540 U.S. 1177 (2004). The six-year time limit for filing claims set forth in Section 2501, therefore, "must be strictly construed." John R. Sand, 457 F.3d at 1355. For purposes of 28 U.S.C. section 2501, a claim accrues "when all the events have occurred which fix the liability of the Government and entitle the claimant to institute an action." Id. at 1355-56; see also Fallini v. United States, 56 F.3d 1378, 1380 (Fed. Cir. 1995) ("Whether the pertinent events have occurred is determined under an objective standard; a plaintiff does not have to possess actual knowledge of all the relevant facts in order for the cause of action to accrue."), cert. denied, 517 U.S. 1243 (1996). The Court concluded that a claim of mutual mistake accrued on various dates between May 1957 and September 1967. See Land Grantors I, 64 Fed. Cl. at 711 (claims arising from the Department of the Interior's ("DOI's") leases to Felmont Oil Corporation accrued on May 1, 1957, when those leases were signed); id. (claims arising from DOI's leases to Kingwood Oil Co. accrued on December 1, 1959, when those leases were signed); id. (claims arising from the sales of certain coal, gas, oil, and other mineral interests accrued on April 15, 1966); id. (claims arising from coal sales accrued on September 29, 1967); but see id. at 714 ("some of the facts of

17

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 29 of 78

mutual mistake could have been ascertained" on April 30, 1964). The filing of a lawsuit in April 1965 against the United States supports the Court's conclusion that any claim would have accrued prior to September 1967. See Higginson v. United States, Case No. 2074 (W.D. Ky. Sept. 7, 1965) (unpublished), aff'd, 384 F.2d 504 (6th Cir. 1967), cert. denied, 390 U.S. 947 (1968), reh'g denied, 391 U.S. 961 (1968). Given these accrual dates, Claimants had to file any Tucker Act claim as early as May 1, 1963 (Felmont Oil Corporation leases), and no later than September 29, 1973 (coal sale leases), six years after the leases were signed. See 28 U.S.C. § 2501. Claimants did not file a Tucker Act claim until October 2005, 42 years and 32 years too late, respectively. Even assuming the filing of Claimants' Tucker Act claim relates back to the filing of Claimants' First Amended Complaint, a conclusion the United States disputes, the claim would be 31 years and 21 years too late, respectively. Claimants' Tucker Act claims, therefore, are barred by Section 2501. 2. The Doctrine of Equitable Tolling Is Not Available

In limited circumstances, the doctrine of equitable tolling may operate to prevent the running a statute of limitations. In regard to suits against the United States, the Supreme Court has stated that the "rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States." Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 95-96 (1990). The Federal Circuit has not yet determined whether equitable tolling is available under Section 2501. Martinez, 333 F.3d at 1318; Frazer v. United States, 288 F.3d 1347, 1353 (Fed. Cir. 2002). As discussed below, even if equitable tolling is potentially available under Section 2501,

18

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 30 of 78

the facts of this case do not justify its application here. See discussion, supra § III(C)(3). Accordingly, the Court should refrain from addressing this unsettled question, and dismiss Claimants' untimely Tucker Act claim for lack of jurisdiction. See Martinez, 333 F.3d at 1318 (declining to decide "whether equitable tolling is generally available under section 2501" because plaintiff could not show any facts in support of its application); DuMarce v. Scarlett, 446 F.3d 1294, 1305 (Fed. Cir. 2006) (same), cert. denied, _ U.S. _, 127 S.Ct. 1335 (2007). If the Court intends to address the applicability of equitable tolling under Section 2501, the Court must consider two questions: (1) Is equitable tolling "available in a sufficiently analogous private suit," and (2) If an analog exists, has Congress expressed a clear intent that equitable tolling should not apply? Kirkendall v. Dep't of Army, 479 F.3d 830, 837 (Fed. Cir. 2007) (en banc), petition for cert. filed, 76 USLW 3009 (July 5, 2007). Both questions should be resolved in the government's favor. i. Even if Equitable Tolling Is "Available in a Sufficiently Analogous Private Suit," this Claim Would Still Be Time Barred

Equitable tolling is available in suits against the United States only when equitable tolling "is available in a sufficiently analogous private suit." Id. at 837 (where plaintiff's claim brought under the Veterans Employment Opportunities Act was deemed "sufficiently analogous to private actions brought under Title VII of the Civil Rights Act of 1964," which does permit equitable tolling in lawsuits brought by private employees against private employers); see also Brice v. Sec'y of Health & Human Servs., 240 F.3d 1367, 1372 (Fed. Cir. 2001) (where plaintiff's Vaccine Act claim was deemed sufficiently analogous to tort claims among private parties, which does permit equitable tolling in lawsuits brought among private parties), cert.

19

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 31 of 78

denied, 534 U.S. 1040 (2001). Claims of mutual mistake between private parties are not entitled to the kind of openended tolling necessary to allow this claim to proceed. If available at all, equitable tolling in the context of mutual mistake claims merely postpones the accrual date from the date of contracting to the date of discovery of the mistake. See, e.g., Paine Webber Real Estate Sec., Inc. v. D.G. Meyer & Co., 835 F.Supp. 116, 119 (S.D.N.Y. 1993) (stating that if the claim is one for mutual mistake, the federal limitations period "recognizes equitable tolling until discovery, [while] the New York statute of limitations . . . bars claims more than six years after the mistake occurred") (emphasis added), aff'd, 9 F.3d 242 (2nd Cir. 1993); Krahmer v. Christie's Inc., 903 A.2d 773, 778-79 (Del. Ch. 2006) (stating that if equitable tolling applied to a claim of mutual mistake, "the statute will begin to run only upon the discovery of facts constituting the basis of the cause of action or the existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery [of the injury]") (emphasis added); accord Corman's Limitation of Actions §8.3 at 9 (when available, tolling will delay accrual of a mutual mistake claim until the mistake "is, or should reasonable by, discovered").8/ If applicable

In these cases, the courts follow a line of cases holding that mutual mistake claims begin to run at the time of the transaction, rather than when the mistake is discovered. See, e.g., City of New Bedford v. Lloyd Inv. Ass'n, 363 Mass. 112, 119, 292 N.E.2d 688, 692 (1973); McNeely v. Philadelphia Nat'l Bank, 314 Pa. 334, 342 (1934) (holding that a suit to recover money allegedly paid under a mistake of fact was barred because it was not made within the limitations period measured from the date of payment, and not from the later date when the mistake was discovered, stating "[t]he time of discovery of the mistake has nothing to do with the cause of action"); Firestone & Parson, Inc. v. Union League of Philadelphia, 672 F.Supp. 819, 822 (E.D. Pa. 1987) (same), aff'd, 833 F.2d 304 (3rd. Cir. 1987). Equitable tolling in these cases, then, would merely extend the accrual date from the time the mistake was made (i.e., the date of contracting) until the mistake was discovered. Other courts reach the same result by holding that claims of mutual mistake accrue in the (continued...) 20

8/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 32 of 78

at all, then, equitable tolling would merely permit Claimants to sue within six years after the date of the discovery of the mistake (or, at the latest, within six years after 1967 for certain claims, according to the Court's findings in Land Grantors I), rather than six years after the date of contracting (approximately 1941). See discussion, infra, § III(C)(1). Since Claimants did not file suit within six years of either date, their claims are barred. In order for this claim to be timely, Claimants would have to argue that open-ended equitable tolling is available. That position, however, is untenable. See, e.g., School Dist. of City of Allentown v. Marshall, 657 F.2d 16, 20 (3rd Cir. 1981) ("The tolling exception is not an open-ended invitation to the courts to disregard limitations periods simply because they bar what may be an otherwise meritorious case."). Accordingly, this claim is time barred. ii. Congress Has Expressed a Clear Intent that Equitable Tolling Should Not Apply in Section 2501

The second part of the Kirkendall test is whether Congress expressed a clear intent that equitable tolling should not apply. See Kirkendall, 479 F.3d at 837. Equitable tolling is not available if the relevant limitations statute provides "good reason to believe that Congress did

(...continued) first instance "when the fraud or mistake becomes discoverable by the exercise of ordinary diligence. . . ." Hollifield v. Blackburn, 294 Ky. 74, 170 S.W.2d 910, 911 (1943); accord Grymes v. Sanders, 93 U.S. 55, 62 (1876) (noting that "[w]here a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose, and adhere to it. . . . Delay and vacillation are fatal to the right which had before subsisted") (emphasis added). Section 2501 already provides that the statute of limitations will not begin to run until the plaintiff knew or should have known of the claim (arguably the date of discovery). This is an additional reason why equitable tolling is not available here. See United States v. Beggerly, 524 U.S. 38, 48-49 (1998) (concluding that equitable tolling was not available under the Quiet Title Act because Congress had already accounted for equitable principles in that statute by "providing that the statute of limitations will not begin to run until the plaintiff `knew or should have known of the claim of the United States'"). 21

8/

Case 1:93-cv-06481-SGB

Document 4

Filed 10/01/2007

Page 33 of 78

not want the . . . doctrine to apply." United States v. Brockamp, 519 U.S. 347, 350 (1997). To make this determination, the Court must look to several factors: "the statute's detail, its technical language, its multiple iterations of the limitations period in procedural and substantive form, its explicit inclusion of exceptions, and its underlying subject matter." Kirkendall, 479 F.3d at 83637 (citing Brice, 240 F.3d at 1372). Since Irwi