Opinion ID: 3151575
Heading Depth: 2
Heading Rank: 2

Heading: Claim Under the APA

Text: Atterbury brings his second claim under § 702 of the APA, which “permits a party to bring an equitable claim challenging arbitrary and capricious action of an administrative agency in federal district court and waives the government’s sovereign immunity with respect to such claims in that forum.” Up State Fed. Credit Union v. Walker, 198 F.3d 372, 375 (2d Cir. 1999). As a person alleging that he “suffer[ed] legal wrong because of agency action,” 5 U.S.C. § 702, Atterbury was thus presumptively entitled to challenge USMS’s decision to remove him from the Court Security Program. But § 702 further specifies that “[n]othing herein . . . confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.” Id. The government argues that the Tucker Act, 28 U.S.C. § 1491, which waives sovereign immunity with respect to “any 14 claim against the United States founded . . . upon any express or implied contract with the United States,” and grants the Court of Federal Claims exclusive jurisdiction over such claims, is such a statute. “The Tucker Act impliedly forbids relief other than remedies provided by the Court of Federal Claims for actions that arise out of a contract with the United States.” Up State, 198 F.3d at 375 (alteration and internal quotation marks omitted). The defendants argue, and the court below agreed, that Atterbury’s APA claim in fact arises out of Akal’s contract with USMS and is thus “impliedly forbid[den]” by the Tucker Act. Whether a claim is in essence a contract claim over which the Court of Federal Claims has exclusive jurisdiction depends on a two‐pronged analysis: a court must examine both “the source of the rights upon which the plaintiff bases [his] claims, and . . . the type of relief sought.” Up State, 198 F.3d at 375, quoting Megapulse, Inc. v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982). With respect to the first prong, the district court concluded that the source of the rights at issue was the Akal–USMS contract, reasoning that only that contract gave USMS the power to remove Atterbury from CSO duty. The right asserted by Atterbury here, however, is not USMS’s right to dismiss Atterbury, but instead Atterbury’s right to continued employment as a CSO. That right plainly does not arise from the 15 Akal–USMS contract, which instead provides that “[USMS] reserves the right at all times to determine the suitability of any Contractor employee to serve as a CSO,” and that “[a]ny decision to continue a Contractor employee in a CSO capacity will be made solely by the Office of Court Security on a case‐by‐case basis.” J.A. 42. Atterbury does not ground his claim in any provision of Akal’s contract with USMS. Instead, he grounds his alleged right to continued employment as a CSO in the CBA between Akal and its employees and in the Due Process Clause of the Fifth Amendment.3 In Stein v. Board of the City of New York, 792 F.2d 13 (2d Cir. 1986), we recognized that an employee of a government contractor may under certain circumstances have a constitutionally protected property interest in continued employment. The plaintiff in that case was employed as a bus driver by a company that provided bus transportation for handicapped schoolchildren in New York City. Id. at 14. The company’s agreement with the city required it 3 It is true that the CBA allowed Akal to terminate an employee “without recourse” if USMS removed the employee from the Court Security Program. J.A. 11. In his R&R, the Magistrate Judge relied on this fact to conclude that Atterbury did not have a property interest in his continued employment. J.A. 284–89. But the district court did not adopt this reasoning from the R&R, and the defendants did not argue on appeal that this language eliminated the property interest otherwise created by the CBA’s “just cause” provision. We therefore do not address the impact of this language, if any, on Atterbury’s APA claim. 16 to employ only “persons of good moral character,” while the plaintiff’s contract with the company provided that he would not be discharged except for “just cause.” Id. The plaintiff was terminated for falling below the standards of “good moral character,” and brought a claim under 42 U.S.C. § 1983, alleging that he was not given adequate notice or a fair hearing. Id. at 15. We concluded that the “just cause” provision in the plaintiff’s employment contract created a protected property interest or “claim of entitlement,” and that the city had transgressed on that claim of entitlement by disqualifying the plaintiff under the “good moral character” provision. Id. at 16–17. Atterbury’s circumstances parallel those of the plaintiff in Stein. His complaint can fairly be read to allege that the CBA’s just cause provision gave him a protected property interest in continued employment, see Ciambriello v. Cty. of Nassau, 292 F.3d 307, 314 (2d Cir. 2002) (“We have repeatedly recognized that a collective bargaining agreement may give rise to a property interest in continued employment.”), and that USMS deprived him of that property interest without due process by unfairly determining that he had violated its performance standards.4 Atterbury’s insistence that he did not in fact violate the 4 Unlike the employer in Stein, Akal’s business does not flow exclusively from its contract with the government. But the defendants have not argued, nor is there 17 performance standards simply raises factual questions going to the merits of his claim. It does not suggest that the performance standards, and thus the Akal–USMS contract, are themselves the source of the rights he is asserting. Our conclusion is not altered by the fact that Akal’s contract with USMS gives a CSO who is subject to removal fifteen days from the initial removal notice to respond in writing. The defendants argue that the procedural rights Atterbury seeks to assert are thus derived from the contract. As an initial matter, however, Atterbury is not a party to the Akal–USMS contract and has no standing to assert that it was breached. More importantly, the question of APA jurisdiction does not turn on whether the plaintiff could conceivably have based his claim on a government contract. Instead, the appropriate inquiry is whether the claim “is validly based on grounds other than a contractual relationship with the government.” Megapulse, 672 F.2d at 968. Far from basing his claim on the procedural protections provided in the contract, Atterbury argues that those protections were inadequate to constitute due process, since he claims that he was denied due process despite having been accorded the contractual procedures. The Due Process Clause thus provides Atterbury with a basis for his any basis in the record for us to infer, that Akal had any non‐CSO positions open to which Atterbury could have been reassigned. 18 claim that is independent of the Akal–USMS contract.5 In that respect, this case is similar to Megapulse, in which the D.C. Circuit first devised the two‐pronged test for distinguishing APA claims from “disguised” Tucker Act claims. The court in Megapulse held that the district court had APA subject‐matter jurisdiction over a claim by a contractor that sought to enjoin the government from releasing certain confidential technical data. Id. at 969–70. Although a series of agreements between the government and the plaintiff placed limits on the government’s use of those data, the court concluded that the claim was ultimately based “on an alleged governmental infringement of property rights and violation of the Trade Secrets Act.” Id. at 969. In Up State, which involved a real estate dispute between a credit union and the Army, we distinguished Megapulse, on the grounds that the credit union’s right “stem[med] from no independent, non‐contractual source.” Up State, 198 F.3d at 376. The credit union alleged only a vague “‘failure of integrity and regularity of process’ under the APA,” id. at 375, but as the district court here correctly observed, “the APA is not itself a free‐standing source of rights.” J.A. 344. The Due Process Clause supplies Atterbury with the independent source of 5 We express no view on the merits of that claim, which the district court did not reach, since it held that it lacked jurisdiction under the APA even to consider it. 19 rights that was missing from the credit union’s claim in Up State. “[S]o long as an action brought against the United States or an agency thereof is not one that should be classified from the outset as a ‘contract action’ for Tucker Act purposes, its remedies are also not contract‐related . . . .” Megapulse, 672 F.2d at 971. Because Atterbury’s claim is not based on rights derived from a contract with the United States, the first prong of the Megapulse test is determinative in this case. But we further note that the second prong, under which courts examine whether the remedies sought by the plaintiff are fundamentally contractual in nature, also supports our conclusion that the claim is not barred by the Tucker Act. The complaint seeks money damages for lost wages, loss of employment opportunities, and mental anguish and emotional distress, as well as declaratory relief and equitable relief in the form of reinstatement. With the exception of compensation for lost wages – Atterbury’s possible entitlement to which does not derive from the Akal–USMS contract in any event – none of these remedies are generally available in contract actions. Relying on the rule that actions seeking specific performance of a contract with the United States are barred by the Tucker Act, see Presidential Gardens Assocs. v. United States ex rel. Sec’y of Hous. & Urban Dev., 175 F.3d 132, 143 (2d 20 Cir. 1999), USMS suggests that Atterbury’s request for reinstatement should be interpreted as in essence seeking specific performance of the Akal–USMS contract. That argument fails, however, because, as we have discussed, the Akal–USMS contract reserved to USMS’s discretion the decision whether to continue to employ Atterbury as a CSO.6 In sum, because Atterbury’s second claim has a basis independent of any contract with the United States, it does not fall within the scope of the Tucker Act. Accordingly, the district court had subject‐matter jurisdiction under the APA to consider it. We do not reach the merits of Atterbury’s APA claim, however, and leave it to the district court to determine, in the first instance, whether Atterbury has properly alleged that USMS acted arbitrarily and capriciously, or in a manner “contrary to constitutional right, power, privilege, or immunity,” 5 U.S.C. § 706(2)(A), (B), in removing him from the Court Security Program. 6 Further, although reinstatement is usually available as a remedy in statutory employment cases, the common‐law rule is that employment contracts will not be specifically enforced. See Am. Law Inst., Restatement of Employment Law § 9.04(a) & cmts. b, c (2015). Thus, reinstatement cannot be construed as a contractual remedy that the Tucker Act makes unavailable in the federal district courts. 21