Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01538/USCOURTS-cand-3_07-cv-01538-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1331 Fed. Question: Employment Discrimination

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United States District Court

For the Northern District of California

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1

Defendant Astrue is the current Commissioner of the Social Security Administration, replacing Joanne Barnhardt,

the original named defendant in this action. Defendant Astrue is being sued in his official capacity.

2

Plaintiff also has made a motion for a continuance of her hearing date, currently scheduled for October 16, 2007.

(Docket No. 33.) Because the Court resolved this matter on the papers, it was not necessary for Plaintiff to appear, and

therefore the motion is DENIED.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARGIE MCRAE,

 Plaintiff,

 v.

 JOANNE BARNHARDT ET AL,

Defendant. /

No. C07-01538 MJJ

Related to C06-1999 MJJ

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS AND DENYING

PLAINTIFF’S ADMINISTRATIVE

MOTION FOR A CONTINUANCE

INTRODUCTION

Before the Court are Defendants Michael J. Astrue1, Commissioner of the Social Security

Administration, and George W. Bush’s (collectively, “Defendants”) Motion to Dismiss for Lack of

Subject Matter Jurisdiction and Failure to State a Claim. (Docket No. 29.) Plaintiff Margie McRae,

M.D., (“Plaintiff”) does not oppose the motion on substantive grounds, but has requested leave to

amend her pleadings.2

 (Docket No. 30.) For the following reasons, the Court GRANTS

Defendant’s Motion to Dismiss Plaintiff’s Claims for Breach of Contract, Declaratory Relief, and

“Slander Per Se” WITH PREJUDICE. The Court also GRANTS Defendant’s Motion to Dismiss

Plaintiff’s Claims for Employment Discrimination WITH LEAVE TO AMEND.

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 1 of 9
United States District Court

For the Northern District of California

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3

California State Bar No. 132769.

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C 06-1999 MJJ, Docket No. 20.

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Id.

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Id.

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FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff, a licensed attorney in California since 19873

 who also is a physician, filed a civil

action in March 2006 against Defendants, alleging claims for breach of employment contract,

declaratory relief, “slander per se,” and multiple claims of employment discrimination. Plaintiff

alleged that she applied to the Social Security Administration (“SSA”) for a position of employment

as a medical consultant. Plaintiff further alleged that SSA accepted her application on or about June

26, 2001, and that SSA later terminated the employment contract on or about September 27, 2004.

Defendants moved to dismiss the action on January 8, 2007, on the grounds that Plaintiff

failed to exhaust administrative remedies prior to filing suit and that the Court lacked jurisdiction. 

The Court granted Defendants’ motion to dismiss on March 5, 2007.4 In that order, the Court

dismissed Plaintiff’s breach of contract and declaratory relief claims with prejudice.5

 However, the

Court granted Plaintiff leave to amend her other claims within 20 days.6

On March 16, 2007, instead of amending her original complaint, Plaintiff filed this action. 

Plaintiff asserted identical claims for breach of contract, declaratory relief, “slander per se,” and

multiple claims of employment discrimination. (Docket No. 1.) On July 2, 2007, Defendants filed a

motion to relate this action to the earlier case, C 06-1999. (Docket Nos. 13 and 14.) The Court

granted Defendants’ motion to relate cases on July 27, 2007. (Docket No. 24.)

On August 6, 2007, Defendants filed this Motion to Dismiss for Lack of Jurisdiction and

Failure to State a Claim. Specifically, Defendants assert that (1) the Court previously dismissed, and

lacks subject matter jurisdiction over, Plaintiff’s claims for contract damages and declaratory relief

as to her employment status; (2) Plaintiff cannot sustain her multiple claims for employment

discrimination because the Court lacks subject matter jurisdiction and Plaintiff has not exhausted

administrative remedies before filing suit; and (3) Plaintiff cannot sustain a claim for “slander per

se” because of the United States’ limited waiver of sovereign immunity.

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 2 of 9
United States District Court

For the Northern District of California

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LEGAL STANDARD

A. 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) authorizes a party to move to dismiss a claim for

lack of subject matter jurisdiction. Federal courts are courts of limited jurisdiction; thus, the Court

presumes lack of jurisdiction, and the party seeking to invoke the court’s jurisdiction must establish

that subject matter jurisdiction exists. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377

(1994). A party challenging the court’s jurisdiction under Rule 12(b)(1) may do so by raising either

a facial attack or a factual attack. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). 

A facial attack is one where “the challenger asserts that the allegations contained in a

complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone v.

Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In evaluating a facial attack to jurisdiction, the court

must accept the factual allegations in plaintiff’s complaint as true. See Miranda v. Reno, 238 F.3d

1156, 1157 n. 1 (9th Cir. 2001). For a factual attack, in contrast, the Court may consider extrinsic

evidence. See Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987). The court also does not

need to assume the truthfulness of the allegations, and may resolve any factual disputes. See White,

227 F.3d at 1242. Thus, “[o]nce the moving party has converted the motion to dismiss into a factual

motion by presenting affidavits or evidence properly before the court, the party opposing the motion

must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject

matter jurisdiction.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). 

 In the Ninth Circuit, “[j]urisdictional dismissals in cases premised on federal-question

jurisdiction are exceptional, and must satisfy the requirements specific in Bell v. Hood, 327 U.S. 678

[] (1946).” Sun Valley Gas., Inc. v. Ernst Enters., 711 F.2d 138, 140 (9th Cir. 1983); see Safe Air for

Everyone, 373 F.3d at 1039. The Bell standard provides that jurisdictional dismissals are warranted

“where the alleged claim under the [C]onstitution or federal statute clearly appears to be immaterial

and made solely for the purpose of obtaining federal jurisdiction or where such a claim is wholly

insubstantial and frivolous.” Bell, 327 U.S. at 682-83. Additionally, the Ninth Circuit has

admonished that a “[j]urisdictional finding of genuinely disputed facts is inappropriate when ‘the

jurisdictional issue and substantive issues are so intertwined that the question of jurisdiction is

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United States District Court

For the Northern District of California

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7

 Plaintiff also attaches to her complaint a “Notice Of Intent to File A Lawsuit,” dated March 16, 2005, as Exhibit

A, and in that document, Plaintiff alleges the existence, breach, and wrongful termination of a contract with the SSA that

caused her damages of $1,800,000 for “breach of contract.” (Complaint, Exhibit A.) 

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dependent on the resolution of factual issues going to the merits’ of an action.” Sun Valley, 711 F.2d

at 139. The jurisdictional issue and the substantive issues are intertwined where “a statute provides

the basis for both the subject matter jurisdiction of the federal court and the plaintiff’s substantive

claim for relief.” Safe Air for Everyone, 373 F.3d at 1039 (quoting Sun Valley, 711 F.2d at 139).

B. 12(b)(6)

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal

sufficiency of a claim. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Because the focus of a

Rule 12(b)(6) motion is on the legal sufficiency, rather than the substantive merits of a claim, the

Court ordinarily limits its review to the face of the complaint. See Van Buskirk v. Cable News

Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). In considering a Rule 12(b)(6) motion, the Court

accepts the plaintiff’s material allegations in the complaint as true and construes them in the light

most favorable to the plaintiff. See Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). 

Generally, dismissal is proper only when the plaintiff has failed to assert a cognizable legal theory or

failed to allege sufficient facts under a cognizable legal theory. See SmileCare Dental Group v.

Delta Dental Plan of Cal., Inc., 88 F.3d 780, 782 (9th Cir. 1996); Balisteri v. Pacifica Police Dep’t,

901 F.2d 696, 699 (9th Cir. 1988); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th

Cir. 1984). In pleading sufficient facts, however, a plaintiff must suggest his or her right to relief is

more than merely conceivable, but plausible on its face. See Bell Atlantic Corp. v. Twombly, 127

S.Ct. 1955, 1974 (2007).

ANALYSIS

A. Plaintiff’s Claim for Contract Damages

In her fifth cause of action, Plaintiff claims that SSA breached her contract with the agency

when she did not receive payment and other benefits upon termination of employment. (Complaint

¶ 13.)7

 Defendants argue that Plaintiff’s breach of contract claim should be dismissed with prejudice

under res judicata principles because the Court dismissed the same claim as part of Plaintiff’s earlier

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 4 of 9
United States District Court

For the Northern District of California

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8

C 06-1999 MJJ, Docket No. 20, Order at 5.

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Id.

10Id.

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action.8 The Court previously dismissed Plaintiff’s contract claim with prejudice because “any

contract claim Plaintiff may have against Defendants is subject to the [Contract Disputes Act

(‘CDA’)] and Plaintiff is required to comply with the administrative requirements set forth therein.”9

Plaintiff, therefore, “must bring her contract claim in the Federal Circuit or with the Claims Court

after she has exhausted the CDA’s required administrative remedies.”10 Plaintiff does not oppose

dismissal of this claim.

The Ninth Circuit employs a three-part test to determine if a decision in a prior action

precludes a claim in a later action: (1) the same parties, or their privies, were involved in the prior

litigation; (2) the prior litigation involved the same claim as the later suit; and (3) the prior litigation

was terminated by a final judgment on the merits. See Gospel Missions of Am. v. City of Los

Angeles, 328 F.3d 548, 555 (9th Cir. 2003) (citing Blonder-Tongue Labs., Inc. v. Univ. of Ill.

Found., 402 U.S. 313, 323-24 (1971)).

Here, the first factor is satisfied because Plaintiff’s present suit involves substantially the

same parties as in the prior action. Plaintiff’s earlier cause of action also named as a defendant the

Commissioner of the SSA in an official capacity. Additionally, the third factor is satisfied because

the Court dismissed the earlier breach of contract claim for lack of subject matter jurisdiction. “It

has long been the rule that principles of res judicata apply to jurisdictional determinations—both

subject matter and personal.” Ins. Corp. of Ir., Ltd. v. Compagnie Des Bauxites De Guinee, 456 U.S.

694, 702 n. 9 (1982) (citing Stoll v. Gottlieb, 305 U.S. 165, 171, 172 (1938)). A judgment rendered

in a case in which it was concluded that the District Court was without jurisdiction is thus barred by

res judicata on collateral attack made by one of the parties. Willy v. Coastal Corp., 503 U.S. 131,

137 (1992). Here, instead of amending her original complaint, Plaintiff filed this action. This Court

has previously dismissed Plaintiff’s prior claims for lack of subject matter jurisdiction and therefore

the prior litigation was terminated by a final judgment on the merits.

When examining the second factor of the test for claim preclusion, the Court considers four

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11Additionally, even if Plaintiff’s breach of contract claim was not precluded, Defendants correctly assert that the

Court lacks jurisdiction over the claim and that Plaintiff failed to exhaust all administrative remedies prior to filing suit.

The Tucker Act creates a limited waiver of sovereign immunity to permit contract claims against the federal

government. Pursuant to the Act, “[t]he United States Court of Federal Claims shall have jurisdiction to render judgment

upon any claim against the United States founded . . . upon any express or implied contract with the United States . . . in cases

not sounding in tort.” 28 U.S.C. § 1491. Although the Court of Claims and district courts have concurrent jurisdiction over

most civil actions and claims brought against the United States for amounts not exceeding $10,000, the Court of Claims has

exclusive jurisdiction to hear the case when an amount exceeding $10,000 is sought. Denton v. Schlesinger, 605 F.2d 484,

485-86 (9th Cir. 1979) (citing 28 U.S.C. § 1491). In this case, Plaintiff seeks damages of $500,000. The Court, therefore,

lacks subject matter jurisdiction over Plaintiff’s claim for breach of contract.

Additionally, pursuant to the CDA, which applies to any express or implied contract entered into by an executive

agency for the procurement of property or services, “[a]ll claims by a contractor against the government relating to a contract

shall be in writing and submitted to the contracting officer for a decision.” 41 U.S.C. § 605(a). District courts lack subject

matter jurisdiction over suits under the CDA when the plaintiff has failed to exhaust CDA’s administrative remedies. See

Sw. Marine on Behalf of Universal Painting and Sandblasting v. United States, 43 F.3d 420, 423 (9th Cir. 1994). There is

no evidence in this case that Plaintiff has initiated, let alone exhausted, the CDA administrative claims process. Therefore,

Plaintiff must bring her contract claim in the Federal Circuit or with the Claims Court after she has exhausted the CDA’s

required administrative remedies. 

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questions:

(1) whether rights or interests established in the prior judgment would be destroyed or

impaired by prosecution of the second action; (2) whether substantially the same

evidence is presented in the two actions; (3) whether the two suits involve infringement

of the same right; and (4) whether the two suits arise out of the same transactional

nucleus of facts.

Id. (citing Fund for Animals, Inc. v. Lujan, 962 F.2d 1391, 1398 (9th Cir. 1992)). The Ninth Circuit

has noted that the fourth question is the most important. Id. In the present action, the second factor

is satisfied because Plaintiff’s claim for breach of contract arises out of the same transactional

nucleus of facts as the breach of contract claim in the prior action. Additionally, allowing litigation

to proceed would impair the right established by the prior judgment for the Defendants to resolve

this dispute through the administrative remedies under the CDA. Plaintiff also offers substantially

the same evidence in asserting that the SSA breached her employment contract, making the breach

of contract claim in this suit almost exactly the same as the claim in the prior suit.

All three elements of the three-part test for claim preclusion are thus met. The Court

therefore GRANTS Defendants’ Motion to Dismiss the breach of contract claim under res judicata

principles.11 Plaintiff’s claim for breach of contract is DISMISSED WITH PREJUDICE.

B. Plaintiff’s Claim for Declaratory Relief as to Her Employment Status

In her sixth cause of action, Plaintiff asserts a claim for declaratory relief as to her status as

an employee, as opposed to an independent contractor, of the SSA. (Complaint ¶ 14.) Res judicata

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 6 of 9
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28 12C 06-1999 MJJ, Docket No. 20, Order at 8-9.

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principles also bar this claim.12 Plaintiff’s current claim for declaratory relief, when compared with

her prior claim for declaratory relief that the Court dismissed with prejudice on March 6, 2007: (1)

involves substantially the same parties; (2) involves the same claim for declaratory relief; and (3)

was subject to a final judgment on the issue of subject matter jurisdiction. The Court therefore

GRANTS Defendant’s Motion to Dismiss Plaintiff’s declaratory claim under res judicata principles. 

Plaintiff’s claim for declaratory relief is DISMISSED WITH PREJUDICE.

C. Plaintiff’s Claim for Employment Discrimination

Plaintiff’s first, second, and third causes of action are for employment discrimination

pursuant to Title VII. (See Complaint ¶¶ 9-11.) Defendants argue that Plaintiff’s employment

discrimination claims suffer from two defects: (1) Plaintiff offers no evidence that she exhausted her

administrative remedies prior to filing this suit; and (2) Plaintiff offers no evidence conclusively

establishing her status as an employee of the SSA. In Plaintiff’s Opposition to Defendant’s Motion

to Dismiss, Plaintiff stated she was under the mistaken impression that the Court’s order dismissing

her earlier cause of action for employment discrimination only required that she name the proper

defendant. Plaintiff does not otherwise oppose Defendants’ contentions.

A Title VII action against federal government is the exclusive judicial remedy for federal

employment discrimination and for retaliation for filing charges of discrimination. See White v.

Gen. Servs. Admin., 652 F.2d 913, 916 (9th Cir. 1981). Title VII “permits an aggrieved employee to

file a civil action in a federal district court to review his claim of employment discrimination.” 

Brown v. Gen. Servs. Admin., 425 U.S. 820, 832 (1976); see 42 U.S.C. § 2000e-16. The Brown

Court noted, however, that “[a]ttached to that right . . . are certain preconditions,” including the

requirement that “the complainant must seek relief in the agency that has allegedly discriminated

against him.” Brown, 425 U.S. at 832. The Ninth Circuit has held that “[t]he law requires an

aggrieved federal employee to elect one exclusive administrative remedy and to exhaust whatever

remedy he chooses” and “[w]hen a federal employee obstructs the smooth functioning of a properly

elected administrative process and abandons that process to pursue a remedy elsewhere, he fails to

exhaust his chosen remedy and thereby forecloses judicial review.” Vinieratos v. U.S. Dept. of the

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 7 of 9
United States District Court

For the Northern District of California

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13Defendant also asserts that Plaintiff’s claims for employment discrimination depend on her ability to establish her

status as a federal government employee through her claim for declaratory relief. Because the Court lacks subject matter

jurisdiction over the claim for declaratory relief, Defendant asserts that the Court cannot also maintain jurisdiction over

Plaintiff’s employment discrimination claim when that cause of action is bound up with her claim for declaratory relief. The

Court need not reach this issue, however, because Plaintiff failed to exhaust her administrative remedies.

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Air Force, 939 F.2d 762, 772 (9th Cir. 1991). Plaintiff adduces no evidence of compliance with, and

exhaustion of, the required administrative remedies under Title VII.

The Court therefore GRANTS Defendant’s Motion to Dismiss Plaintiff’s employment

discrimination claims for failure to exhaust administrative remedies as required by Title VII.13

D. Plaintiff’s Claim for “Slander Per Se”

Plaintiff’s fourth cause of action is for “slander per se” against Defendant Bush. Defendants

argue that this claim is not recognized as a matter of law and should be dismissed because the

President of the United States is not the proper defendant. Plaintiff does not oppose dismissal of this

claim “[i]f the Federal Tort Claims Act specifically excludes a cause of action for defamation.” 

(Docket No. 30.)

Plaintiff misunderstands Defendants’ objections to her “slander per se” claim. The purpose

of the Federal Tort Claims Act (“FTCA”) is to remove the personal liability of federal employees for

common law torts committed within the scope of their employment, with the exclusive remedy for

such torts being FTCA actions against the United States. See Billings v. United States, 57 F.3d 797,

799-800 (9th Cir. 1995) (citing H.R. Rep. No. 700, 100th Cong., 2d Sess. 4 (1988)). In the Ninth

Circuit, Plaintiff’s claim for slander cannot be maintained for failure to name the United States, the

only proper defendant. See Allen v. Veterans Admin., 749 F.2d 1386, 1388 (9th Cir. 1984). 

Additionally, even if Plaintiff named the correct defendant, Plaintiff’s cause of action for

slander must fail because the United States has not waived its sovereign immunity for the tort of

slander. The United States can be sued only to the extent that it has waived its immunity, and due

regard must be given to the exceptions to such waiver. See United States v. Orleans, 427 U.S. 807,

814 (1976). To this end, the FTCA withholds the waiver of sovereign immunity for certain torts. 28

U.S.C. § 2680(h) states in pertinent part: “The provisions of this chapter and section 1346(b) of this

title shall not apply to . . . (h) Any claim arising out of . . . slander . . . .” Thus, Plaintiff’s claim of

slander is prohibited by the FTCA’s own terms.

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United States District Court

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The Court therefore GRANTS Defendant’s Motion to Dismiss Plaintiff’s “slander per se”

claim. Plaintiff’s claim for “slander per se” is DISMISSED WITH PREJUDICE.

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss Plaintiff’s

breach of contract, declaratory relief, and “slander per se” claims WITH PREJUDICE.

The Court further GRANTS Defendant’s Motion to Dismiss Plaintiff’s employment

discrimination claims. Plaintiff shall have leave to file an Amended Complaint not later than 30

days from the filing date of this Order.

IT IS SO ORDERED.

Dated: October 15, 2007 

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-01538-MJJ Document 36 Filed 10/16/07 Page 9 of 9