Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-05036/USCOURTS-ca13-15-05036-0/pdf.json

Parties Involved:
Fidelity And Guaranty Insurance Underwriters, Inc.
Appellant
United States
Appellee
United States Fidelity And Guaranty Company
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

FIDELITY AND GUARANTY INSURANCE 

UNDERWRITERS, INC., UNITED STATES 

FIDELITY AND GUARANTY COMPANY,

Appellants

v.

UNITED STATES,

Appellee

______________________ 

2015-5036

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 14-00084, Judge Elaine Kaplan.

______________________ 

Decided: November 6, 2015

______________________ 

RICHARD L. MCCONNELL, JR., Wiley Rein, LLP, Washington, DC, argued for appellants. Also represented by

BRENDAN J. MORRISSEY, Bentonville, AR. 

LAUREN MOORE, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, Washington, DC, argued for appellee. Also represented by

BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., DEBORAH 

A. BYNUM. 

______________________ 

Case: 15-5036 Document: 30-2 Page: 1 Filed: 11/06/2015
2 FIDELITY AND GUARANTY v. US

Before LOURIE, SCHALL, and LINN, Circuit Judges.

SCHALL, Circuit Judge. 

Fidelity and Guaranty Insurance Underwriters, Inc. 

and United States Fidelity and Guaranty Co. (collectively 

“USF&G”) appeal the decision of the United States Court 

of Federal Claims granting the government’s motion to 

dismiss their amended complaint for lack of subject 

matter jurisdiction. Fid. & Guar. Ins. Underwriters v. 

United States, 119 Fed. Cl. 195 (2014). USF&G filed suit 

in the Court of Federal Claims under the Tucker Act, 28 

U.S.C. § 1491(a)(1), seeking reimbursement from the 

government for legal expenses and settlement costs it 

allegedly incurred in its capacity as general liability 

insurer for Gibbs Construction, L.L.C. f/k/a Gibbs Construction Co. (“Gibbs”), a government contractor. USF&G 

alleged that, in a contract for renovation work at the main

post office in New Orleans, Louisiana, the United States 

Postal Service (“Postal Service”) agreed to indemnify 

Gibbs and its agents against any liability incurred as a 

result of asbestos removal work under the contract. 

USF&G alleged that the Postal Service breached that 

agreement when it failed to indemnify Gibbs in connection with a lawsuit filed against Gibbs by a former Postal 

Service police officer, in which the officer claimed that he 

contracted mesothelioma as a result of asbestos removal 

during performance of the contract. USF&G further 

alleged that, as Gibbs’s general liability insurer, it had 

been required to litigate and settle the officer’s claim after 

the government failed to indemnify Gibbs. USF&G 

asserted that the Court of Federal Claims had jurisdiction 

because USF&G was Gibbs’s equitable subrogee. In 

granting the government’s motion to dismiss, the court 

disagreed, holding that it lacked jurisdiction under a 

theory of equitable subrogation. We affirm.

Case: 15-5036 Document: 30-2 Page: 2 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 3

BACKGROUND

In deciding the government’s motion to dismiss, the 

Court of Federal Claims was required to “accept as true 

all undisputed facts asserted in [USF&G’s amended] 

complaint and draw all reasonable inferences in favor of 

[USF&G].” Trusted Integration, Inc. v. United States, 659 

F.3d 1159, 1163 (Fed. Cir. 2011). For purposes of its 

motion to dismiss, the government did not dispute the 

facts asserted by USF&G in the amended complaint. 

Thus, the amended complaint sets forth the uncontested 

factual backdrop for this appeal. We recite here the facts 

pertinent to the issue before us.

I.

In 1984, the Postal Service and Gibbs entered into a 

contract for the abatement of asbestos and for fireproofing 

at the main post office in New Orleans, Louisiana. Am. 

Compl. ¶ 5. As general contractor, Gibbs subcontracted 

the asbestos removal portion of the project to LaughlinThyssen, Inc. f/k/a Laughlin Development Co. (“LTI”). Id.

¶ 6. LTI purchased general liability insurance for the 

asbestos removal work under its subcontract with Gibbs. 

Id. ¶ 10.

In 1985, during the course of performance of the contract, and after delays caused by the Postal Service, LTI

attempted to renew its general liability insurance, but the

insurer would not renew the policy. Id. Because the cost 

of liability insurance had significantly increased, Gibbs 

contacted the Postal Service and requested additional 

compensation to cover the increased cost of completing the 

project. Id. ¶ 10–11. Eventually, instead of providing 

additional monetary compensation, the Postal Service

proposed that the contract be amended to indemnify 

Gibbs for liability incurred as a result of any asbestosrelated injury. Id. ¶ 12–14. The indemnification provision, which was set forth in a letter from the Postal Service to Gibbs, stated: 

Case: 15-5036 Document: 30-2 Page: 3 Filed: 11/06/2015
4 FIDELITY AND GUARANTY v. US

ASBESTOS REMOVAL/REPAIR LIABILITY

The Postal Service shall save harmless and indemnify the contractors and its officers, agents, 

representatives, and employees from all claims, 

loss damage, actions, causes of action expense 

and/or liability resulting from brought for or no 

account of any personal injury received or sustained by any person persons attributable to the 

asbestos’ removal work performed under or related to this contract.

Id. ¶ 14 (typographical and grammatical errors in original).1 Gibbs accepted the Postal Service’s proposal by

continuing work pursuant to the contract and finishing

the project in June 1988. Id. ¶ 19. In the meantime, 

USF&G issued three general liability policies to Gibbs. 

The policies covered three consecutive, annual time 

periods, ranging from January 1, 1985, to January 1, 

1988. Id. ¶ 17.

II.

In March 2010, Louis Wilson, a former Postal Service

police officer, sued Gibbs and LTI, alleging that, between 

September 1984 and January 1988, he contracted mesothelioma as a result of asbestos removal work performed

under the contract. Id. ¶ 20. On May 27, 2010, Gibbs 

demanded that the Postal Service defend against the suit 

1 During oral argument, the parties agreed that the

text of the indemnification provision recited in the letter 

should be corrected to read as follows: “The Postal Service 

shall save harmless and indemnify the contractors . . . from all claims . . . resulting from[,] brought for[,] 

or [on] account of any personal injury received . . . by any 

person [or] persons attributable to the asbestos[] removal 

work performed under or related to this contract.” Oral 

Arg. at 0:50–1:50, 15:20–16:10.

 

Case: 15-5036 Document: 30-2 Page: 4 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 5

and indemnify it, pursuant to the amendment to the 

contract. Id. ¶ 21. The Postal Service refused to do so, 

however. Id. ¶ 22. In due course, Gibbs and its insurers, 

including USF&G, settled with Mr. Wilson without the 

Postal Service’s involvement. Id. ¶ 23. USF&G paid 

$1,031,250.00 to settle Mr. Wilson’s claims and incurred

an additional $529,333.34 in legal expenses. Id. 

Gibbs thereafter sought reimbursement from the 

Postal Service for the settlement costs and legal expenses 

incurred by its insurers. Id. ¶ 24. On January 29, 2013, 

the contracting officer denied the claim. Id. ¶ 25. A year 

later, on January 29, 2014, USF&G filed a complaint

against the government in the Court of Federal Claims, 

seeking to recover the settlement costs and legal expenses 

it had incurred in the lawsuit brought by Mr. Wilson. See

Joint Appendix (“J.A.”) 11. Claiming jurisdiction under 

the Tucker Act, USF&G alleged a breach of contract. Am. 

Compl. ¶ 4.

III.

In due course, the government filed a motion to dismiss USF&G’s amended complaint pursuant to Rule 

12(b)(1) of the Court of Federal Claims. Mot. to Dismiss 

Am. Compl., Fid. & Guar. Ins. Underwriters, Inc. v. 

United States, No. 1:14-cv-00084-EDK (Fed. Cl. May 28, 

2014), ECF No. 19. In its motion, the government contended that the Court of Federal Claims lacked jurisdiction to entertain USF&G’s claim under the Tucker Act 

because of the absence of a contract between USF&G and

the United States. Id. at 7. The government also argued 

that USF&G was not equitably subrogated to Gibbs, the 

prime contractor, and that the court therefore lacked 

subject matter jurisdiction under a theory of equitable 

subrogation. Id. at 7–8.

USF&G filed an opposition to the motion to dismiss, 

in which it argued that the Court of Federal Claims had 

jurisdiction because sovereign immunity is waived for 

Case: 15-5036 Document: 30-2 Page: 5 Filed: 11/06/2015
6 FIDELITY AND GUARANTY v. US

suits by insurers as equitable subrogees and that USF&G 

qualified as Gibbs’s equitable subrogee. Opp’n to Mot. to 

Dismiss Am. Compl. at 6–9, Fid. & Guar. Ins. Underwriters, Inc. v. United States, No. 1:14-cv-00084-EDK (Fed. Cl.

July 3, 2014), ECF No. 22. In its opposition, USF&G 

relied on the Supreme Court’s decision in United States v. 

Aetna Casualty & Surety Co., 338 U.S. 366 (1949), and 

our decision in Insurance Co. of the West v. United States, 

243 F.3d 1367 (Fed. Cir. 2001) (“ICW”). Id. In Aetna, the 

Court held that the Federal Tort Claims Act, 28 U.S.C. 

§ 1346(b), authorizes insurers who pay the claims of those 

injured by the negligence of government employees to sue 

the United States as equitable subrogees. 338 U.S. at 

380. USF&G argued that our decision in ICW, which 

involved a Miller Act surety2 suing for breach of contract, 

“extended” the rationale for waiver of sovereign immunity 

articulated in Aetna to claims brought under the Tucker

Act. Opp’n to Mot. to Dismiss at 7.

2 The Miller Act, in pertinent part, provides: “Before any contract of more than $100,000 is awarded for 

the construction, alteration, or repair of any public building . . . of the Federal Government, a person must furnish 

to the Government [a Performance bond and a Payment 

bond].” 40 U.S.C. § 3131(b). Typically, these bonds are 

posted by a surety company. See, e.g., Transamerica Ins. 

Co. v. United States, 989 F.2d 1188, 1189 (Fed. Cir. 1993) 

(“Transamerica, a surety bond company, issued payment 

and performance bonds for both of the contracts on behalf 

of Bodenhamer for the benefit of the government.”); 

Fireman’s Fund Ins. Co. v. United States, 909 F.2d 495, 

496 (Fed. Cir. 1990) (“Fireman’s Fund Insurance Company . . . agreed to be Westech’s surety by issuing both 

payment and performance bonds.”). 

 

Case: 15-5036 Document: 30-2 Page: 6 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 7

IV. 

On November 19, 2014, the Court of Federal Claims 

granted the government’s motion to dismiss. Fid. & 

Guar., 119 Fed. Cl. at 201. The court started from the 

premise that, “as a general matter, ‘[a] plaintiff must be 

in privity with the United States to have standing to sue 

the sovereign on a contract claim.’” Id. at 198 (alteration 

in original) (quoting S. Cal. Fed. Sav. & Loan Ass’n v. 

United States, 422 F.3d 1319, 1328 (Fed. Cir. 2005)). 

Because USF&G was not a party to a contract with the 

government, the court determined that USF&G had to 

demonstrate that its suit fell within one of several “limited exceptions” to the privity requirement. Id. 

The Court of Federal Claims rejected USF&G’s argument that it was entitled to sue under the Tucker Act 

because, while not in privity with the government, it was 

equitably subrogated to the claims of Gibbs against the 

Postal Service. The court stated: 

While it is well established that a surety may 

bring suit against the United States under a theory of equitable subrogation, neither the Court of 

Federal Claims nor the Federal Circuit has ever 

recognized a waiver of sovereign immunity under 

the Tucker Act in a case like the present one, in 

which a general liability insurer invokes the doctrine of equitable subrogation to step into its insured’s shoes for purposes of suing the 

government for breach of contract. 

Id. at 198–99. The court explained that, while USF&G 

“analogize[d] its status to that of a Miller Act surety,” the 

analogy was incomplete because a Miller Act surety 

“step[s] into the shoes” of a contractor and assumes the 

contractor’s performance obligations, whereas a general 

liability insurer does not. Id. at 198. 

Case: 15-5036 Document: 30-2 Page: 7 Filed: 11/06/2015
8 FIDELITY AND GUARANTY v. US

Finally, the Court of Federal Claims rejected 

USF&G’s argument that, in its discussion of Aetna, ICW

pronounced a broad rule recognizing a waiver of sovereign 

immunity for equitable subrogees, even if they do not 

fully step into the shoes of the contractor. Id. at 198–201. 

USF&G timely appealed the dismissal of its amended 

complaint. We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(3). 

DISCUSSION

I.

We review de novo the Court of Federal Claims’ grant 

of a motion to dismiss for lack of subject matter jurisdiction. ICW, 243 F.3d at 1370; see also Banks v. United 

States, 741 F.3d 1268, 1275 (Fed. Cir. 2014). A party 

invoking the jurisdiction of the Court of Federal Claims 

has the burden of establishing jurisdiction by a preponderance of the evidence. Brandt v. United States, 710 

F.3d 1369, 1373 (Fed. Cir. 2013); Reynolds v. Army & Air 

Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988).

The Tucker Act provides, in relevant part, that the 

Court of Federal Claims has jurisdiction to “render judgment upon any claim against the United States founded . . . upon any express or implied contract with the 

United States.” 28 U.S.C. § 1491(a)(1). As a general rule, 

for purposes of Tucker Act jurisdiction, the government 

“consents to be sued only by those with whom it has 

privity of contract.” Erickson Air Crane Co. of Wash. v.

United States, 731 F.2d 810, 813 (Fed. Cir. 1984). In 

other words, if a party is not a signatory to a contract 

with the government, it may not bring a direct suit for 

breach of contract against the government. See Anderson 

v. United States, 344 F.3d 1343, 1351 (Fed. Cir. 2003) 

(“Thus, although the trust might be, if at all, the direct 

signatory to the alleged contract, the Paul sons were 

clearly not signatories of the Application and could not 

therefore be in direct privity with the sovereign.”).

Case: 15-5036 Document: 30-2 Page: 8 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 9

There are, however, certain limited exceptions to the 

rule of privity of contract as a prerequisite to invoking 

jurisdiction under the Tucker Act. S. Cal. Fed. Sav. & 

Loan Ass’n, 422 F.3d at 1328 (“Limited exceptions to that 

general rule have been recognized . . . .”); First Hartford 

Corp. Pension Plan & Tr. v. United States, 194 F.3d 1279, 

1289 (Fed. Cir. 1999) (noting that “[t]here are exceptions 

to this general rule” and enumerating examples). “[T]he 

common thread that unites these exceptions is that the 

party standing outside of privity by contractual obligation 

stands in the shoes of a party within privity.” First 

Hartford, 194 F.3d at 1289. Applicable here, in Balboa 

Insurance Co. v. United States, 775 F.2d 1158, 1160–61

(Fed. Cir. 1985), we held that a Miller Act surety was 

equitably subrogated to the claims of a prime contractor 

and could recover from the United States payments made 

to the prime contractor after the surety had noticed the 

government of the prime contractor’s default. See, e.g., 

Nat’l Sur. Corp. v. United States, 118 F.3d 1542, 1545 

(Fed. Cir. 1997) (following Balboa); Transamerica Ins. Co., 

989 F.2d at 1194–95 (same).

II.

On appeal, USF&G does not contend that it was in 

privity of contract with the Postal Service. Rather, as it 

did in the Court of Federal Claims, it argues that, under

the Tucker Act, sovereign immunity is waived as to “any 

claim” founded upon any contract with the United States

and that the Court of Federal Claims therefore has jurisdiction to hear its suit. USF&G analogizes to Aetna, 338 

U.S. 366, and asserts that ICW, 243 F.3d 1367, adopted 

and applied the reasoning of Aetna to the Tucker Act. 

Specifically, USF&G relies upon the statement in ICW

that “the language of both [the Federal Tort Claims Act 

and the Tucker Act] contains an unequivocal expression 

waiving sovereign immunity as to claims, not particular 

claimants.” 243 F.3d at 1373–74 (emphasis added). 

According to USF&G, the combination of Aetna and ICW

Case: 15-5036 Document: 30-2 Page: 9 Filed: 11/06/2015
10 FIDELITY AND GUARANTY v. US

establishes that it should be considered an equitable 

subrogee of Gibbs for purposes of jurisdiction in the Court 

of Federal Claims. USF&G thus urges that the Court of 

Federal Claims erred in dismissing its amended complaint.

The government responds that the Court of Federal 

Claims correctly held that USF&G does not meet the 

requirements for being able to sue the United States in its 

own name as an equitable subrogee of Gibbs. It argues 

that USF&G had no relationship at all with the Postal 

Service and that USF&G’s payment of settlement monies 

and legal fees satisfied only an obligation to Gibbs, not to 

the government. The government thus distinguishes 

USF&G’s case from those involving sureties. It explains 

that, unlike the situation in which USF&G found itself, 

when a Miller Act surety is required to perform under a 

performance bond, it steps into the shoes of the contractor 

and only then may rely on the Tucker Act’s waiver of 

sovereign immunity. The government contends that in 

ICW we held that the doctrine of equitable subrogation is 

triggered only “when the surety takes over contract 

performance or when it finances completion of the defaulted contract.” Id. at 1370.

III. 

The question before us is whether the Tucker Act’s

waiver of sovereign immunity extends to a general liability insurer seeking to sue as the equitable subrogee of a 

prime contractor. We hold that it does not. The Court of 

Federal Claims did not err in dismissing USF&G’s 

amended complaint for lack of subject matter jurisdiction.

A.

As noted, USF&G rests its claim of equitable subrogation on our decision in ICW. ICW involved a Miller Act 

surety who brought suit against the government under 

the Tucker Act for breach of contract. The surety, InsurCase: 15-5036 Document: 30-2 Page: 10 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 11

ance Company of the West (“ICW”), alleged that, as a 

Miller Act surety that had posted a performance bond for 

a prime contractor with the government, it was entitled to

receive payments from the government once the prime 

contractor failed to fulfill its obligations and ICW assumed responsibility for completion of the contract work. 

ICW, 243 F.3d at 1369. ICW claimed that it was equitably subrogated to the prime contractor and thus had 

standing to sue the government in its own name. Although the Federal Circuit had previously established in 

Balboa and other cases that a surety could recover from 

the United States payments made to a contractor after 

the surety had notified the government of the contractor’s 

default, the government contended in ICW that the Court 

of Federal Claims lacked jurisdiction in light of the Supreme Court’s decision in Department of the Army v. Blue 

Fox, Inc., 525 U.S. 255 (1999). The government argued 

that Blue Fox had effectively overruled Balboa and its 

progeny. According to the government, Blue Fox demonstrated that the “government has not waived sovereign 

immunity for a surety’s claims based on equitable subrogation.” ICW, 243 F.3d at 1370. The ICW court thus was 

called upon to examine Blue Fox. 

B.

In Blue Fox, an insolvent prime contractor failed to 

pay Blue Fox, a subcontractor, for work Blue Fox performed on a construction project for the Department of 

the Army. After the government received notice that Blue 

Fox had not been fully paid, the government nevertheless 

disbursed additional funds to the prime contractor. In 

due course, Blue Fox obtained a default judgment against 

the prime contractor for the amount the prime contractor 

owed it. Seeing, however, that it could not collect from 

the prime contractor, Blue Fox sued the Army in federal 

district court, seeking to recover the balance due on its 

contract with the prime contractor. In its suit, Blue Fox 

also sought an equitable lien on any funds still held by 

Case: 15-5036 Document: 30-2 Page: 11 Filed: 11/06/2015
12 FIDELITY AND GUARANTY v. US

the Army for the project. Blue Fox predicated jurisdiction 

on the Administrative Procedure Act (“APA”), 5 U.S.C. 

§ 702, and 28 U.S.C. § 1331.3 On cross-motions for summary judgment, the district court held that the APA’s 

waiver of sovereign immunity did not extend to Blue Fox’s 

claim against the Army. Concluding that it lacked jurisdiction, the district court granted the government’s motion for summary judgment. Blue Fox, 525 U.S. at 259. 

The Ninth Circuit reversed the decision of the district 

court, however, holding that the APA waived sovereign 

immunity for equitable actions. Id. After granting the 

government’s petition for certiorari, the Supreme Court 

held that the APA did not waive sovereign immunity for a 

suit, such as Blue Fox’s, to enforce an equitable lien. Id.

at 263. In doing so, the Court upheld the “long-settled 

rule” that sovereign immunity bars subcontractors from 

recovering from the government when general contractors 

become insolvent. Id. at 257, 264. 

The Supreme Court concluded its decision by considering Blue Fox’s contention that “in several cases examining a surety’s right of equitable subrogation, [the] Court 

suggested that subcontractors and suppliers can seek 

compensation directly against the [g]overnment.” Id. at 

264 (citing Prairie State Bank v. United States, 164 U.S. 

227, 231 (1896); Henningsen v. U.S. Fid. & Guar. Co., 208 

U.S. 404, 410 (1908); Pearlman v. Reliance Ins. Co., 371 

U.S. 132, 141 (1962)). The Court rejected Blue Fox’s 

3 Section 702 of Title 5 states: “A person suffering 

legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a 

relevant statute, is entitled to judicial review thereof.” 

Section 1331 of Title 28 provides that “[t]he district courts 

shall have original jurisdiction of all civil actions arising 

under the Constitution, laws, or treaties of the United 

States.” 

 

Case: 15-5036 Document: 30-2 Page: 12 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 13

reliance on Prairie State Bank, Henningsen, and Pearlman. Id. at 265. The Court pointed out that none of 

those cases “involved a question of sovereign immunity, 

and, in fact, none involved a subcontractor directly asserting a claim against the [g]overnment.” Id. Accordingly, 

the Supreme Court concluded that Prairie State Bank, 

Henningsen, and Pearlman “do not in any way disturb the 

established rule that, unless waived by Congress, sovereign immunity bars subcontractors and other creditors 

from enforcing liens on [g]overnment property or funds to 

recoup their losses.” Id.

C.

In ICW, the government argued that, because Balboa

and other cases allowing equitable subrogation were 

based directly or indirectly on Prairie State Bank, Henningsen, or Pearlman, the Supreme Court’s discussion of 

those three cases and its rejection of Blue Fox’s reliance 

on them, meant that “Balboa and other similar cases are 

no longer valid because they cannot find the requisite 

waiver of sovereign immunity.” 243 F.3d at 1372. The 

ICW court agreed with the government that “Balboa and 

its progeny relied on Prairie State Bank, Henningsen, or 

Pearlman to find a waiver of sovereign immunity for 

equitable subrogation claims against the government.” 

Id. The court also agreed with the government that, 

“after Blue Fox, we can no longer rely on those three cases 

to find a waiver of sovereign immunity.” Id. Having 

determined that Prairie State Bank, Henningsen, and

Pearlman could no longer be viewed as supporting the 

holding of Balboa, the ICW court turned to ICW’s reliance 

on the Tucker Act as providing the jurisdictional basis for 

its suit, stating: “The issue in this case . . . is whether the 

government’s consent [in the Tucker Act] to suit based on 

a contract includes consent to suit on a contract brought 

by a subrogee.” Id.

Case: 15-5036 Document: 30-2 Page: 13 Filed: 11/06/2015
14 FIDELITY AND GUARANTY v. US

In analyzing the jurisdictional issue in ICW, the court

looked to the Supreme Court’s sovereign immunity analysis in Aetna. Id. at 1369. In Aetna, the Supreme Court 

addressed whether an insurance company could bring suit 

in its own name against the government on a tort claim to 

which it had become subrogated by payment to an insured. 338 U.S. at 370–71. The Court analyzed whether 

the Anti-Assignment Act, now codified at 31 U.S.C. 

§ 3727, precluded such suits. Id. at 374–76. It held that 

it did not. The Court also held that the government had 

waived its sovereign immunity from such suits under the 

Federal Tort Claims Act. Id. at 380 (“The broad sweep of 

[Federal Tort Claims Act] language assuming the liability 

of a private person, the purpose of Congress to relieve 

itself of consideration of private claims, and the fact that 

subrogation claims made up a substantial part of that 

burden are also persuasive that Congress did not intend 

that such claims should be barred.”).4

4 The Federal Tort Claims Act provides, in relevant 

part, that district courts “shall have exclusive jurisdiction 

of civil actions on claims against the United States” for 

“injury or loss of property, or personal injury or death 

caused by the negligent or wrongful act or omission of any 

employee of the [g]overnment while acting within the 

scope of his office or employment, under circumstances 

where the United States, if a private person, would be 

liable to the claimant.” 28 U.S.C. § 1346(b)(1). The 

Supreme Court recently stated that, “compared to other 

waivers of immunity (prominently including the Tucker 

Act), the [Federal Tort Claims Act] treats the United 

States more like a commoner than like the Crown.” 

United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1637 

(2015). The Court further stated that “when defining

substantive liability for torts, the [Federal Tort Claims 

Act] reiterates that the United States is accountable ‘in 

 

Case: 15-5036 Document: 30-2 Page: 14 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 15

We explained in ICW that Aetna “directly held that 

Congress’s waiver of sovereign immunity under the Tort 

Claims Act included suits by subrogees.” 243 F.3d at 

1373. We reasoned, though, that “nothing in Aetna suggested that its holding regarding sovereign immunity was 

based on the Federal Tort Claims Act’s broad language.” 

Id. Rather, we determined that 

Aetna reflects a broader and more generally applicable legal principle: waivers of sovereign immunity applicable to the original claimant are to be 

construed as extending to those who receive assignments, whether voluntary assignments or assignments by operation of law, where the 

statutory waiver of sovereign immunity is not expressly limited to waivers for claims asserted by 

the original claimant.

Id. Finding that “[n]either Federal Tort Claims Act nor 

the Tucker Act is limited to claims asserted by the original claimant,” we stated that “the language of both acts 

contains an unequivocal expression waiving sovereign 

immunity as to claims, not particular claimants.” Id. at 

1373–74 (emphasis added). “Finally,” we stated, “the 

Supreme Court itself has consistently assumed that the 

waiver of sovereign immunity contained in the Tucker Act 

extends to assignees.” Id. at 1374. After noting that the 

Supreme Court’s decision in United States v. Atlantic 

Mutual Insurance Co., 298 U.S. 483 (1936), “demonstrates 

directly that the Tucker Act’s waiver of sovereign immunity extends to a subrogee,” we concluded that “a subrogee, 

after stepping into the shoes of a government contractor, 

may rely on the waiver of sovereign immunity in the 

Tucker Act and bring suit against the United States.” Id.

the same manner and to the same extent as a private 

individual.’” Id. at 1637–38 (quoting 28 U.S.C. § 2674).

 

Case: 15-5036 Document: 30-2 Page: 15 Filed: 11/06/2015
16 FIDELITY AND GUARANTY v. US

at 1374–75. We therefore held that ICW’s suit in the 

Court of Federal Claims could proceed.

IV.

As noted, USF&G rests its argument that a general 

liability insurer can be subrogated to a prime contractor’s 

contract with the government for purposes of establishing 

Tucker Act jurisdiction on our statement in ICW that the 

Tucker Act’s waiver of sovereign immunity applies “to 

claims, not particular claimants.” In USF&G’s view, that 

statement opened the door to claims from all equitable 

subrogees, regardless of the status or nature of the claimant bringing the suit for breach of contract. We do not 

agree. 

ICW does not stand for the broad proposition that 

USF&G assigns it. Rather, in responding to the government’s argument based on Blue Fox, ICW simply reaffirmed the previously “well established” principle that “a 

surety could sue the United States and recover not only 

any retainage but also any amounts paid by the United 

States to the contractor after the surety had notified the 

government of default.” Id. at 1370–71. Indeed, in a 

footnote to our concluding holding in ICW, we expressly 

stated, “[w]e believe that Balboa correctly states the law 

of equitable subrogation.” Id. at 1375 n.3. Thus, in 

National American Insurance Co. v. United States, we 

stated that ICW “did not change the established precedent 

that a payment bond surety that discharges a contractor’s 

obligation to pay a subcontractor may be equitably subrogated to the rights of the contractor.” 498 F.3d 1301, 1307 

(Fed. Cir. 2007). In fact, in reaching our conclusion in 

ICW, and in rejecting the government’s position in the 

case, we distinguished Blue Fox principally because Blue 

Fox was “a subcontractor . . . not a surety.” ICW, 243 F.3d 

at 1371 (emphasis added) (“It is well-established that a 

surety who discharges a contractor’s obligation to pay 

subcontractors is subrogated only to the rights of the 

Case: 15-5036 Document: 30-2 Page: 16 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 17

subcontractor. Such a surety does not step into the shoes 

of the contractor and has no enforceable rights against the 

government.”).5

We held in ICW that, “after stepping into the shoes of 

a government contractor” and assuming its obligations, a 

subrogee may “rely on the waiver of sovereign immunity 

in the Tucker Act.” Id. at 1375. Thus, when viewed in its 

proper context, the statement in ICW that the Tucker 

Act’s waiver of sovereign immunity, like that of the Federal Tort Claims Act, applies “to claims, not particular 

claimants,” cannot bear the weight that USF&G places 

upon it. The statement simply reflects the fact that, in 

their respective waivers of sovereign immunity, both the 

Federal Tort Claims Act and the Tucker Act speak in 

terms of claims against the United States. This is hardly 

surprising given that both statutes are couched in terms 

of the subject matter of the claims. See Kwai Fun Wong, 

135 S. Ct. at 1634, 1637–38 (distinguishing the similar 

5 In ICW, we explicitly recognized the unique nature of Miller Act sureties in contrast to other entities, 

such as general liability insurers. We explained that a 

“surety guarantees that a contract will be completed in 

the event of the principal’s default and that the government will not have to pay more than the contract price.” 

243 F.3d at 1370. That guarantee is in the form of a 

“performance bond,” which “gives the surety the option of 

taking over and completing performance or of assuming 

liability for the government’s costs in completing the 

contract which are in excess of the contract price.” Id. In 

that way, we reasoned, the surety bond “creates a threeparty relationship, in which the surety becomes liable for 

the principal’s debt or duty to the third party obligee.” Id.

(citing Balboa, 775 F.2d at 1160). “If [a] surety fails to 

perform, the [g]overnment can sue it on the bonds.” Id.

(emphasis in original) (quoting Balboa, 775 F.2d at 1160).

 

Case: 15-5036 Document: 30-2 Page: 17 Filed: 11/06/2015
18 FIDELITY AND GUARANTY v. US

language of the Federal Tort Claims Act and the Tucker 

Act based, in part, on the subject matter covered by the 

respective Acts). In short, nothing in ICW undermines 

the well-settled principle that the exceptions to the general jurisdictional rule requiring “privity of contract” are 

based on “the party standing outside of privity by contractual obligation stand[ing] in the shoes of a party within 

privity.” First Hartford, 194 F.3d at 1289. Indeed, in its 

decision dismissing USF&G’s amended complaint, the 

Court of Federal Claims pointed out that none of our 

cases decided after ICW “has suggested that ICW stands 

for the broader proposition urged here, creating an exception to the privity requirement for all equitable subrogees, 

even those like [USF&G] that have not assumed any 

obligations under a contract with the United States.” Fid. 

& Guar., 119 Fed. Cl. at 201 (citing Lumbermens Mut. 

Cas. Co. v. United States, 654 F.3d 1305, 1312–13 (Fed. 

Cir. 2011); Nat’l Am. Ins. Co., 498 F.3d at 1307; Fireman’s 

Fund Ins., 313 F.3d at 1351–52). In this case, by settling 

the tort claim of Mr. Wilson, USF&G, if anything, became 

the equitable subrogee of Gibbs solely with respect to that 

tort claim, the settlement of which Gibbs would have had 

to pay if USF&G had not stepped in. USF&G never 

became an equitable subrogee of Gibbs with respect to 

any contract claims of Gibbs against the Postal Service, 

however. That is because USF&G never stepped into the 

shoes of Gibbs in Gibbs's capacity as general contractor. 

As Gibbs's general liability insurer, USF&G in this case 

had no responsibility for contract performance and had no 

obligations owed to the government. It therefore failed to 

establish jurisdiction under the Tucker Act.

CONCLUSION

For the foregoing reasons, we conclude that the Tucker Act cannot be read to waive sovereign immunity for a 

general liability insurer, such as USF&G, who brings suit 

as an equitable subrogee of a prime contractor. We therefore affirm the decision of the Court of Federal Claims 

Case: 15-5036 Document: 30-2 Page: 18 Filed: 11/06/2015
FIDELITY AND GUARANTY v. US 19

dismissing USF&G’s amended complaint for lack of 

subject matter jurisdiction. 

AFFIRMED

COSTS

Each party shall bear its own costs. 

Case: 15-5036 Document: 30-2 Page: 19 Filed: 11/06/2015