Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS MICHAEL W. STOVALL, Plaintiff,
V.

No. 05-400C Judge Allegra

THE UNITED STATES, Defendant. DEFENDANT'S MOTION TO DISMISS Pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), defendmatrespectfully requests that the Court dismiss Mr. Stovall's anaended complaint upon the goundsthat the Court lacks jurisdiction to consider the amended complaint, and the amended complaint fails to state a claim upon whichrelief maybe ganted, ha support of our motion, we rely upon the amended complaint ("Compl."), and the following brie£ STATEMENT OF THE CASE Nature of the Case This action wastransferred to the Court by order of the UnitedStates District Court for the District of Columbia. See Stovall v. Veneman, 04-319 (RMC), No. (D.D.C. January ~ 2005). Mr. Stovall originally filed suit in the district court wherehe asserted claims under the Equal Credit Opportunity Act ("ECOA'), Constitution, the Alabama the Constitution, and for breach of contract. Thedistrict court held that Mr. Stovall's claims pursuant to the ECOA were time-barred and his Constitutional claims were precluded by the doctrine of sovereign immunity. ~ Copies of the district court's order and memorandum decision are contained in defendant's appeudix ("DA'), whichis attached to this motion. The Court mayconsider the evidenceset forth in defendant'sappendixwhendetemaining it lacks jurisdiction to entertain if Mr. Stovall's complaintbecauseit contains relevant evidenceconcerningjurisdictional facts. Re_~molds Army Air Force Exchange v. and Serv., 846 F.2d 746, 747 (Fed. Cir. 1988).

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Finally, the district court determined did not havejurisdiction to entertain Mr.Stovall's breach it of contract claim pursuant to the Tucker Act because Mr. Stovall was seeking dmnages excess in of $10,000.00. Stovall v. Veneman, 04-319 (RMC), No. slip op. at 8, (D.D.C. January 24, 2005). Accordingly, district court transfe~TedMr.Stovatl's breach of contract claim to this Court. the DApp.1, 10. In his amended complaint, Mr. Stovall asserts that he had a contractual relationship with the UnitedStates, and that the UnitedStates is liable for breach. Plaintiff's Amended Complaint ("Compl.")¶¶ at 21-26. Thealleged contractual relationship is based upona "resolution agreement"that Mr. Stovall entered into with the United States Department Agriculture of ("USDA") 1998, to settle all claims for relief containedin Mr. Stovall's January4, 1996 in discrimination complaint. See Compl.Exhibit B. Mr. Stovall contends this Court possesses jurisdiction to entertain his complaintpursuant to the TuckerAct, 28 U.S.C. § 1492, and the Contracts Disputes Act, 42 U.S.C. §§ 601 et se~. Compl.at ¶ 1. II. 2 Statementof Facts Beginningin 1993, Mr. Stovall alleges that he attempted to apply for farm loans from the LawrenceCounty, AlabamaFam~ Service Agency("FSA")office, but he initially was unable

obtain an application. Compl.at ¶ 5. ha 1994, Mr. Stovall submitted applications for a fam~ ownershiploan and a farm operating loan. Compl.at ¶ 12, p. 2.3 Both applications were initially

2 For purposesof this motion,the defendantaccepts as tree the facts alleged in the complaint. However, defendant reserves the right to contest the alleged facts in subsequent the proceedings. ~ Mr. Stovall's complaint contains two paragraphs numbered one on page 2, and 12, another on page 7. -2-

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denied but, after au administrative appeal, the application for an operating loan wasapproved. Id__~. The funds obtained in these loans were disbursed in March1995. Id~ OnJanuary 4, 1996, plaintiff filed an administrative complaintwith USDA alleging discrimination on the basis of race in regard to his loan applications. Id._~. at '~[ 14. TheOffice of Civil Rights ("OCR") USDA at issued a Program ComplaintFinal Decision on plaintiff's administrative complaint. In the decision, OCR found discrimination on the basis of race by FSAagainst plaintiff in the denial of a fam~ownershiploan in 1994 and the denial of a lama operating loan in 1995. OCR not find did discrimination iu the denial of a farmownershiploan in 1995. Compl. 7[ 8. at In about January 1998, Mr. Stovall and OCR reached a Resolution Agreement settle to plaintiff's administrative complaint. Compl.at ~ 10. Uuderthe Resolution Agreement,Mr. Stovall received $145,000in compensatory damages;discharge of all of his debt to FSA; reasonable attorney's fees and costs; priority considerationon certain future applications for FSA inventory property and FSAfarm loans; and other programmaticrelief. See Compl.Exhibit B, Resolution Agreement ~[ 2-3. Mr. Stovall agreed in the Resolution Agreement at that he was waivingany and all rights he had arising from his administrative Colnplaint against both USDA and USDA employees. at '~]*~[ 4-6. Id. In 1998, after several attempts, Mr. Stovall purchasedfamaland from the FSA's inventory property. Compl. ~['][ 10, 11. Mr. Stovall's March at 1998applications for farm ownershipand operating loans were approvedin Marchof 1998, and he received the funds in November 1998. Compl.at ~] 12, p. 7. In applying for these loans, Mr. Stovall sought the assistance of several USDA employees, to include Carolyn Cooksie and SamSnyder in the FSA national office. Compl. '~[ 13. Mr.Snydervisited plaintiffin Alabama assist himwith his at to -3-

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application. Id.._~. In April 1999, Mr. Stovall sought additional funds to build two chicken houses, and he consulted with Ms. Cooksie on this matter. Compl.at ¶ 14. In December 1999, additional funds were addedto plaintiff's loans so that he could build the chicken houses. However, a meeting in with the contractor and USDA employee,Richard ICnouff of the local FSAoffice, it was discovered that construction of the cbicken houses wouldtake additional funds. Compl.at ¶¶ 14, 15. Mr. Stovall asked Mr. Kamuffifthe FSAcould lend him additional money,and Mr. Knouff informedMr. Stovall that he wasat his loan limit. Compl. ¶ 14. Mr. Stovall claims that Mr. at KnoufftoldMr. Stovall's contractor to terminate construction, though the contractor retnmedin three weeks. Compl.at¶ 15. Dueto several difficulties, Mr. Stovall contacted Mr. Snyderabout his concerns. Compl.

at ¶ 16. At somepoint, Mr. Snyder workedwith Mr. Stovall on a Fam~and Home Plan in which Mr. Snyderincluded the funds awardedMr. Stovall in attorney's fees aud costs as incomein the plan (which, according to Mr. Stovall "was improperas those funds were paid to Stovall's attorney pursuant to the 1998Resolution Ageement.").Id__~. According Mr. Stovall, the Fam~ to and Home Plan wasnot able to demonstrate adequate cash flow. Id_~. In October 2001, Mr. I~muffsent Mr. Stovall a notice stating that FSA conld not consider additional loans or loan restructuring due to the non-feasibility of the Farmand Home Plan and because Mr. Stovall had reached the maximum amounts.Id_.~. loan In his complaint, Mr. Stovall asserts a general allegation that USDA employees,Cooksie, Snyder, Faust, aud Knouffcollectively orchestrated a ploy to ensure that Mr. Stovall could not farm aud wouldbe out of business. Compl.at '~116. Mr. Stovall contends that he was denied

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credit in violation of his rights to due process and equal protection under the law as guaranteed by the Fourteenth AJnendment." Compl.at ¶ 18. Mr. Stovall further alleges that unless this Court intercedes, he will continue to "suffer injuries and damages" include, "but not limited to, to injury to his business, his credit reputation as well as standing in the local community." Compl. at ¶ 19. Mr. Stovall did not qum~tifyhis damages his complaint, but contendshis pecuniary in and non-pecuniarydamages "almost incalculable." Id_=. are ARGUMENT I. The Court Lacks Jurisdiction To Entertain Mr, Stovall's Contract Claims, Because Those Claims Are Premised UponPurported Contracts Entered Into By The United States In Its SovereignCapaeitv The Court of Federal Claimsis a court of limited jurisdiction. See Overall Roofin~& Construction. Inc. v. UnitedStates, 929 F.2d 687 (Fed. Cir. 1991); GlobexCorp. v. U.S., 54 Fed. C1. 343,347(2002); Shelhnanv. United States, 9 C1.Ct. 452, 455 (1986). This Court's jurisdiction to adjudicate a claim dependsupon, and is delineated by, the extent to whichthe United States has waivedits sovereiNaimmunity.See United States v. Testan, 424 U.S. 392, 399 (1976); United States v. Sherwood,312 U.S. 584, 586 (1941). The United States' waiver sovereign inmmnitymust be unequivocally expressed, and cannot be implied. See Kania v. United States, 650 F.2d 264, 269 (Ct. C1. 1981), ~, United States v. Testan, 424 U.S. at 399. Thus, any grant of jurisdiction to this Court mustbe strictly construed. See UnitedStates Departmentof Energyv. Ohio, 503 U.S. 607, 615 (1992); McMahon United States, 342 U.S. v. 25, 27 (1951). As the Court has stated, "[a]mbiguities regarding the existence of subject matter jurisdiction mustbe 'resolvedagainst the assumption jurisdiction."' Globe____~x, Fed. C1. at of 54 347, (quoting MarsInc. v. Kabushiki-Kaisha NipponConlux, 24 F.3d 1368, 1373 (Fed. Cir. -5-

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1994)). Moreover, court maynot in any case, even in the interest of justice, extend its "a jurisdiction wherenone exists." Christianson v. Colt hadustries Operatin~Corp., 486 U.S. 800, 818(1988). Althoughtile TuckerAct constitutes an affirmative waiver of sovereign immunity,it is solely jurisdictional in nature, and does not create any substantive right of enforcement against the United States for monetarydamages.See United States v. Mitchell, 463 U.S. 206, 212 (1983). Pursuant to the TuckerAct, 28 U.S.C. § 1941(a)(1), the Court has "jurisdiction to judgmentupon any claim against the United States founded.., upon any express or implied contract with the UnitedStates ..... " TheTuckerAct is not a limitless waiver of sovereign immunity claims based in contract, however.Rather, it is well-settled that the waiverof for sovereignimmunity contract claims is limited to contracts executedby the UnitedStates in its for ~ capacity. See Kania v. United States, 650 F.2d 264, 269 (Ct. C1.), cert. denied, 454 U.S. 895 (1981); Horowitzv. United Statea, 267 U.S. 458, 461 (1925); Sanders v. United States, 252 F.3d 1329, 1335(Fed. Cir. 2001); Silva v. United States, 51 Fed. C1. 374, 377 (2002); Moore v. UnitedStates, 48 Fed. C1. 394, 397(2000); Sadeo_hi UnitedStates, 46 Fed. C1. 660 (2000); v. Doev. UnitedStates, 37 Fed. C1. 74, 77 (1996); Drakesv. United States, 28 Fed. C1. 190 (1993); Commonwealth Kentucky.Natural Res. and Envtl. Protection Cabinet v. United States, 27 of Fed. C1. 173, 179 (1992); Grundy United States, 2 C1. Ct. 596, 598 (1983). As the Court v. Claims has explained, The contract liability whichis enforceable under the TuckerAct consent to suit does not extend to every ageement,understanding, or compactwhichcan semantically be stated in terms of offer and acceptance or meeting of the minds. The Congess undoubtedly had in mindas the principal class of contract case in whichit -6-

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consentedto be sued, the instances wherethe sovereign steps off the tl~a'one and engagesin purchaseand sale of goods, lands, mad services, transactions such as private parties, individuals or corporations also engage in among themselves. Kania v. United States, 650 F.2d at 268. Accordingly,the Court mayexercise jurisdiction over Mr. Stovall's contract claims only if those claims assert the existence of a contract executedby the UnitedStates in its proprietary capacity, and for whichthere is a private sector analogue. This he has not done, and his complaint should be dismissed. II. The Resolution AgreementBet3veen Mr. Stovall AndThe DepartmentOf Agriculture Is Not A ProcurementWithin The Scope Of The Contracts Disputes Act Evenassumingthat Mr. Stovall's breach of contract claim is based upona contract the UnitedStates entered into in its proprietary capacity, his claims for relief pursuantto the Contract Disputes Act of 1978, 41 U.S.C. § 601 et seq:., should be dismissedbecausehis claims as alleged, do not involve a contract claim cognizable under the Contract Disputes Act. Specifically, 41 U.S.C. § 602(a) limits the applicability of the ContractDisputesAct to contracts falling into the followingcategories: (1) the procurement property, other than real property in being; of (2) the procurement services; of (3) the procurement construction, alteration, repair of maintenance real property; or, of (4) the disposal of personal property. 41 U.S.C. § 602(a). The resolution ageementis the contract Mr. Stovall alleges was breached by the Gover~maent, it does not fall into any of these categories. Indeed, if anything, Mr. and Stovatl alleges the Government breachedthe resolution agreementfor failing to provide services

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set forth in the ageement,rather than failing to procure themas the Contract DisputesAct envisions. However, assumingthat this action is within the limitation of section 602(a), Mr. Stovalt must still establish that he has complied with the direct access jurisdictional requirements of section 605 of the CDA. order to bring a direct access action to this Court under the Contract In DisputesAct, the law requires that Mr. Stovall first: (I) present a written and properlycertified claim to the Government contracting officer, and (2) obtain a final decision by that contracting officer on such claim. Thoenv. United States, 765 F.2d 1110, 1116(Fed. Cir. 1985); T.J.D. Services. Inc. v. UnitedStates, 6 C1. Ct. 257, 260 (1984). Mr. Stovall has done neither. Specifically, 41 U.S.C. § 605(c)(1) requires that: For claims of morethan $100,000,the contractor shall certify that the claim is made goodfaith, that the supportingdata are in accurate and completeto the best of his knowledge belief, and and that the amount requested accurately reflects the contract adjustmentfor whichthe contractor believes the govenm~ent is liable. 41 U.S.C. § 605(c)(1). This Court has consistently interpreted this provision of the Contract DisputesAct as requiring the furnishing of such a certificate, by the contractor, in order for this Courtto acquire direct access jurisdiction over a contract claim exceeding$100,000.T.J.D. Services. ia~c. v. UnitedStates, 6 C1.Ct. at 260; Scm~-Tech Securit-¢ v. UnitedStates, 46 Fed. CI. 326, 334 (2000); J.E. Salvaae Co. v. United States, 37 Fed. C1.256, 263 (1997). AlthoughMr. Stovall does not assert a monetaryclaim for a specific amount damages,it is reasonable to assumethat his of claim wouldexceed the $100,000.00threshold because Mr. Stovall's complaint states that he

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"has suffered almost incalculable pecuniary and non-pecuniary damages."Compl.~I 19. Nowhere Mr. Stovall's complaintdoes he identify a "claim" to satisfy this statutory in prerequisite for this Court to entertain his claim pursuant to the Contract DisputesAct. Furthermore,Mr. Stovall's complaintdoes not allege that he requested a contracting officer's final decision. Therefore, the Court lacks jurisdiction to entertain Mr.Stovall's claim. Accordingly,the Court should dismiss the complaint. CONCLUSION For these reasons, werespectfully request that the Court dismiss the anaendedcomplaint. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/Deborah A. Bvnum DEBORAH A. BYNUM Assistant Director

OF COUNSEL: Ron Walkow Office of the General Counsel United States Departmentof Agriculture Washington, D.C.

s/Douglas K. Mickte DOUGLASK. MICI~E Trial Attorney CommercialLitigation Branch Civil Division Departmentof Justice 1100 L Street, N.W. Attn: Classification Unit, 8th Floor Washington, D.C. 20530 Tele: (202) 307-0383 Fax: (202) 353-7988 Attorneys for Defendant

June 16, 2005

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CERTIFICATE OF SERVICE

I herebycertify under penalty of perjury that on June 16, 2005, a copy of the foregoing "DEFENDANT'S MOTION DISMISS" with its accompanying appendix was filed TO electronically. I understand that notice of this filing will be sent to all parties by operationof the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Douglas K. Mickle Douglas K. Mickle