Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-16-01362/USCOURTS-ca13-16-01362-0/pdf.json

Nature of Suit Code: 134
Nature of Suit: 
Cause of Action: 

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NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

CLYDE C. GRADY, II,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2016-1362

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:15-cv-00746-EDK, Judge Elaine Kaplan.

______________________ 

Decided: July 7, 2016

______________________ 

CLYDE C. GRADY, II, Jacksonville, AR, pro se.

SARAH CHOI, Commercial Litigation Branch, United 

States Department of Justice, Washington, DC, for defendant-appellee. Also represented by BENJAMIN C. MIZER, 

ROBERT E. KIRSCHMAN, JR., STEVEN J. GILLINGHAM. 

______________________ 

Before NEWMAN, MOORE, and O’MALLEY, Circuit Judges.

PER CURIAM. 

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2 GRADY v. US

Clyde C. Grady, II appeals a decision from the Court 

of Federal Claims dismissing his claim against the United 

States Congress for lack of jurisdiction. We affirm the 

dismissal of Mr. Grady’s complaint.

BACKGROUND

Between 2:30 and 3:00 p.m. on May 6, 2010, the Dow 

Jones Industrial Average (“Dow”) dropped nearly a thousand points. Mr. Grady lost $106,935.62 in investments. 

The Securities and Exchange Commission (“SEC”) estimates that collectively, individual investors lost more 

than $200 million. An investment tool known as a “stop 

loss order,” which was designed to automatically sell 

stocks when they fell below certain prices, facilitated 

these losses. When the Dow suddenly dropped on May 6, 

2010, a market failure coined the “Flash Crash,” stop loss 

orders triggered the sale of stocks far below their true 

market value. 

On July 16, 2015, Mr. Grady filed a complaint against 

the United States Congress for breach of contract.1 His

complaint alleged that by enacting the Securities Exchange Act of 1934, 15 U.S.C. § 78a, et seq. (“1934 Act”)

and subsequent legislation, Congress created a unilateral 

or implied-in-fact contract with investors like Mr. Grady. 

He alleged that his losses resulted from Congress’ breach

of its obligation under the 1934 Act to ensure the 

“maintenance of a fair and orderly” stock market for the 

“protection of investors.” The Court of Federal Claims 

dismissed Mr. Grady’s complaint for lack of jurisdiction

under the Tucker Act, 28 U.S.C. § 1491(a)(1), concluding 

that Mr. Grady had failed to allege the existence of a 

 

1 Mr. Grady filed a highly similar action against the 

SEC in 2013. We, like the Court of Federal Claims, 

decline to address whether collateral estoppel bars 

Mr. Grady’s instant claim.

Case: 16-1362 Document: 19-2 Page: 2 Filed: 07/07/2016
GRADY v. US 3

contract between himself and Congress. Mr. Grady 

appeals. We have jurisdiction under 28 U.S.C. 

§ 1295(a)(3).

DISCUSSION

We review the Court of Federal Claims’ decision to 

dismiss a case for lack of subject matter jurisdiction de 

novo. Brandt v. United States, 710 F.3d 1369, 1373 (Fed. 

Cir. 2013). Under the Tucker Act, the Court of Federal 

Claims may hear “any claim against the United States 

founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or 

upon any express or implied contract with the United 

States, or for liquidated or unliquidated damages in cases 

not sounding in tort.” 28 U.S.C. § 1491(a)(1). Mr. Grady 

relies on the creation of a unilateral or implied-in-fact 

contract to provide jurisdiction under the Tucker Act. He

is correct that, on a motion to dismiss under the Court of 

Federal Claims Rule 12(b)(1), he does not need to prove 

the existence of a unilateral or implied-in-fact contract; he 

simply must allege one. But Mr. Grady’s complaint fails 

to sufficiently allege the elements of a contract. 

An implied-in-fact contract claim requires allegations 

of a specific “meeting of the minds” between an authorized 

representative of the United States and the claimant. See 

Hercules, Inc. v. United States, 516 U.S. 417, 424 (1996). 

Specifically, it requires (1) mutuality of intent to contract; 

(2) consideration; (3) an unambiguous offer and acceptance; and (4) actual authority of the government’s 

representative to bind the government in contract. Barrett Ref. Corp. v. United States, 242 F.3d 1055, 1060 (Fed. 

Cir. 2001). We agree with the Court of Federal Claims 

that Mr. Grady’s complaint fails to allege a “meeting of 

the minds” between himself and Congress and therefore 

fails to allege an implied-in-fact contract. Mr. Grady

argues that Congress’ conduct in enacting the 1934 Act 

and subsequent legislation, aimed at maintaining a fair 

Case: 16-1362 Document: 19-2 Page: 3 Filed: 07/07/2016
4 GRADY v. US

and orderly stock market for the protection of investors,

evinced Congress’ intent to contract with investors like 

Mr. Grady. Conduct of this sort is legally insufficient to 

demonstrate intent to contract. The 1934 Act’s objective 

of maintaining a fair and orderly stock market simply 

expresses a goal of Congress; it does not show congressional intent to be contractually liable for fulfilling that 

goal. Instead, Mr. Grady’s allegations more closely resemble a contract implied-in-law, being that Congress’ 

conduct imputed a legal duty to maintain a fair and 

orderly stock market. See Grady v. United States, 124 

Fed. Cl. 278, 281 (2015) (citing Hercules, 516 U.S. at 424). 

Even if that were the case, implied-in-law contracts fall 

outside the Tucker Act’s grant of jurisdiction to the Court 

of Federal Claims. Hercules, 516 U.S. at 423.

We also agree with the Court of Federal Claims that 

Mr. Grady has failed to allege a unilateral contract. 

Mr. Grady argues that Congress created a unilateral 

contract by enacting the 1934 Act and subsequent legislation and assuming its obligation to maintain a fair and 

orderly stock market. Congress’ enactment of securities 

laws is insufficient to form a unilateral contract. It is well 

established that the government’s performance of its 

sovereign functions does not give rise to contractual 

obligations. See, e.g., D&N Bank v. United States, 331 

F.3d 1374, 1378–79 (Fed. Cir. 2003). 

CONCLUSION

Because Mr. Grady has not alleged a unilateral or implied-in-fact contract, his claim is not authorized under 

the Tucker Act, and the Court of Federal Claims lacks 

jurisdiction. The decision of the Court of Federal Claims 

is affirmed. 

AFFIRMED

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