Opinion ID: 785675
Heading Depth: 4
Heading Rank: 1

Heading: Deprivation of property interests

Text: 38 In one claim, Plaintiffs assert a deprivation of property interests. Plaintiffs assert that the USPS violated Plaintiffs' freedom to use their bulk fuel tanks for fuel products of their choosing, to limit and exclude products not of their choosing, and to control the use of their tanks and the surrounding property. 7 The Exxon contracts grant Exxon-Mobil and BP Amoco the right to enter certain properties to supply fuel. 39 Plaintiffs' asserted right to protect their property from being entered and used is not a contractual right. Plaintiffs were not parties to any contract with Exxon-Mobil or BP Amoco. The rights upon which this claim is ultimately based 8 arise from these Plaintiffs' title over the property upon which they have installed their own fuel tanks. Plaintiffs' Complaint describes this claim as deprivation ... of Plaintiffs' liberty and property interests, including ... Plaintiffs' freedom to use their bulk fuel tanks for the fuel products of their choosing, to limit and exclude products not of their choosing, and to control the use of their tanks and the surrounding property. The title to the property is not a contractual right. 40 The only contract issues relating to the fuel tanks are Defendant's rebuttal points, which are not the source of the rights upon which the plaintiff bases its claim. RMI Titanium, 78 F.3d at 1136. Perhaps the Fifth Amendment property right claim of Plaintiffs who own fuel tanks has no merit because, by signing Amendment 3, Plaintiffs bargained away their Fifth Amendment rights but this argument speaks to the merits of the claim, not to the jurisdictional issue of the source of the rights upon which the claim is based. 41 It is well-established that the existence of contractual rebuttal points does not render a claim essentially contractual, in CDA analysis. The D.C. Circuit — the very circuit that devised the CDA test adopted by this Court has ruled that a claim is not rendered essentially contractual merely because a contract issue may prove dispositive to the claim. In Commercial Drapery Contractors, Inc. v. United States, 133 F.3d 1 (D.C.Cir.1998), a business, Commercial Drapery Contractors (Commercial), had contracts with the federal government's General Services Administration (GSA). Id. at 3. After a grand jury returned a fraud indictment against Commercial and its president, the GSA terminated its contract with Commercial and suspended future contracting with Milford Acquisition Corporation (Milford), a company that was owned by Commercial's president and his wife. Id. Commercial and Milford brought suit, claiming that GSA's cancellation and suspension decisions violated multiple government procurement statutes and regulations, and constituted `de facto debarment' or `blacklisting,' thereby depriving them of due process. Id. 42 The D.C. Circuit ruled that the CDA did not bar jurisdiction: 43 Among other things, Commercial and Milford complain about the termination clause in their contracts. That sounds like a claim founded on a contract. But classification of a particular action as one which is or is not `at its essence' a contract action depends both on the source of the rights upon which the plaintiff bases its claim, and upon the type of relief sought (or appropriate). Megapulse, Inc. v. Lewis, 672 F.2d 959, 968 (D.C.Cir.1982). The basis of Commercial's and Milford's claim is that GSA's repeated attempts to extricate the government from financial dealings with them constituted unlawful blacklisting. The dispute over the termination clause in their contracts is embedded within this broader claim, and is not an independent cause of action.... The claim and the type of relief requested thus reveal that this is not at its essence a contract action. Accordingly, we have jurisdiction. 44 Id. at 4. This ruling made clear that the mere existence of a contract issue within a broader claim does not make the claim essentially contractual, where the source of the rights claimed and the relief are not contractual. 45 The ruling in Commercial Drapery Contractors cited Megapulse, the very case that defined the applicable legal standard. In Megapulse, the plaintiff, Megapulse, had contracts with the Coast Guard, pursuant to which Megapulse had developed proprietary data. 672 F.2d at 961-62. When, based on the Coast Guard's determination that the data had not been developed solely at Megapulse's expense, the Coast Guard decided to release the data to other parties, Megapulse brought suit for an injunction to prevent the release of data. Id. at 962. The D.C. Circuit made clear that the existence of relevant contractual issues did not render all claims essentially contractual: 46 Contract issues may arise in various types of cases where the action itself is not founded on a contract. A license, for example, may be raised as a defense in an action for trespass, or a purchase contract may be raised to counter an action for conversion. But the mere fact that a court may have to rule on a contract issue does not, by triggering some mystical metamorphosis, automatically transform an action based on trespass or conversion into one on the contract and deprive the court of jurisdiction it might otherwise have. 47 Id. at 968. Applying this general principle, the court determined that the CDA did not bar jurisdiction, because, Appellant's position is ultimately based, not on breach of contract, but on an alleged governmental infringement of property rights and violation of the Trade Secrets Act. It is actually the Government, and not Megapulse, which is relying on the contract.... Id. at 969. As in Megapulse, so too in the present case, it is the government — and not any of the plaintiffs — that is attempting to assert contractual rights (those purportedly in Amendment 3). 48 The rule that a rebuttal issue cannot alter the nature of the claims is analogous to the well-pleaded complaint rule that governs federal question jurisdiction under 28 U.S.C. § 1331. Under the well-pleaded complaint rule, `[W]hether a case is one arising under [federal law], in the sense of the jurisdictional statute, ... must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose.' Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914); Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Okla. Tax Comm'n v. Graham, 489 U.S. 838, 840-41, 109 S.Ct. 1519, 103 L.Ed.2d 924 (1989) (emphasis added). The RMI Titanium/ Megapulse test is similar to the well-pleaded complaint rule in that both tests evaluate jurisdiction by the underlying rights upon which a plaintiff bases its claims, without reference to any rebuttal points. This similarity is logical. Both tests concern the issue of jurisdiction. Jurisdiction is generally established by a plaintiff, through the complaint. E.g., Nichols v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir.2003) (the plaintiff bears the burden of establishing jurisdiction with the court taking the allegations in the complaint as true). 49 In the present case, a well-pleaded complaint would not necessarily even mention the very term of the contract that Defendant considers dispositive, i.e., Amendment 3. A well-pleaded complaint would not refer to the contracts between Plaintiffs and Defendant. Rather, the complaint would only refer to the Exxon contracts — which were made without Plaintiffs' consent, and which Plaintiffs seek to nullify. 9 A complaint would allege that the Exxon contracts had violated Plaintiffs' property rights, by granting Exxon-Mobil and BP Amoco the right to enter Plaintiffs' land. The Exxon contracts are a key part of the factual basis for the complaint. But source of the rights upon which Plaintiffs base their claim is not the Exxon contracts or any other contract. It is undisputed that Plaintiffs were not privy to the Exxon contracts. 10 The property rights claim attempts to void the Exxon contracts due to violation of Plaintiffs' constitutional rights. The contractual relationship between Plaintiffs and Defendant is not the source of the rights upon which Plaintiffs base their property rights claim — this is similar to Commercial Drapery Contractors and Megapulse, in which the rights claimed did not stem from the contractual relationship between the parties. 50 Plaintiffs actual complaint is consistent with this analysis of a well-pleaded complaint. 11 The actual complaint focuses almost entirely on the Exxon contracts, as violating Plaintiffs' property rights, without Plaintiffs' consent. Nowhere in Plaintiffs' actual complaint is there any mention of Plaintiffs' contracts with Defendant 12 — even though Amendment 3 to these contracts might rebut Plaintiffs' claims, on the merits. A well-pleaded complaint does not refute itself. Defendant's rebuttal does not bear on the source of rights upon which Plaintiffs base their property rights claim. 51 Absent the contractual rebuttal points, there are no contractual issues relating to the claim for deprivation of property — the source of the rights asserted in this claim is not found in any contract. The source of the rights asserted is the title to Plaintiffs' land. 52