Opinion ID: 212189
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3 The FLSA provides overtime compensation to certain employees who work more than forty hours per week at a rate not less than one-and-one-half times the employees' regular rate of compensation. This statute originally did not cover federal employees. In 1974, however, Congress extended it to federal employees, but exempted those classified as executive, administrative, or professional. Id. § 213(a)(1). 4 To recover unpaid overtime compensation under the FLSA, a federal employee may file either an action at law or a claim before the General Accounting Office (GAO). Actions at law brought under the FLSA are subject to the statute of limitations provided in the Portal-to-Portal Pay Act, codified at 29 U.S.C. §§ 251-262, which provides for a two-year limitations period for cases in which the FLSA violation is non-willful and a three-year period where the violation is willful. Id. § 255(a). 5 The statute of limitations for administrative claims before the GAO initially was selected, then revised by, the Comptroller General of the United States and twice altered by Congress. The numerous changes in the statute of limitations for claims before the GAO, in part, create the backdrop of the instant takings claim. Therefore, it is important to have a general understanding of the evolution of the limitations periods involved. 6 In 1978, the Comptroller General ruled that the statute of limitations for FLSA claims before the GAO was not the statutory period specific to FLSA claims, but was six years as set forth in the more generally applicable Barring Act, codified at 31 U.S.C. § 3702(b). In re Transp. Sys. Ctr., 57 Comp. Gen. 441 (1978). Sixteen years later, on May 24, 1994, the Comptroller General effectively changed the statute of limitations for FLSA claims before the GAO from six years to two years for non-willful violations and three years for willful violations, essentially recognizing as applicable the limitations period specifically set for FLSA claims in the Portal-to-Portal Pay Act. In re Ford, 73 Comp. Gen. 157 (1994). 7 Shortly thereafter, on September 30, 1994, Congress enacted the Treasury, Postal Service and General Government Appropriations Act of 1995, Pub.L. No. 103-329, 108 Stat. 2383, 2432 (1994). Section 640 of that act mandated that the Comptroller General apply a six-year statute of limitations period to any administrative claim under the FLSA filed prior to June 30, 1994, and a two-year statute of limitations period to any such claim filed after June 30, 1994. 8 On November 19, 1995, Congress enacted the Treasury, Postal Service, and General Government Appropriations Act of 1996, Pub.L. No. 104-52, 109 Stat. 468, 468-69 (1995), which amended Section 640 to further limit the types of FLSA claims that may be decided by the GAO (amended Section 640). Amended Section 640 precluded, among other changes, application of the six-year statute of limitations originally set forth in Section 640 to employees who had received overtime compensation under another provision of law. Thus, those employees were limited to the two-year statute of limitations period.
9 Pursuant to 5 C.F.R. § 551.201, the BATF, the DEA, the IRS, the Customs Service, and the USSS independently determined, as the respective employing agencies, that Appellants were administrative employees exempt from the FLSA and its overtime provisions. In making this determination, the employing agencies evaluated whether Appellants' duties met the administrative exemption criteria set forth in 5 C.F.R. § 551.206. Significantly, Appellants were presumed to be non-exempt under the civil service regulations, thereby requiring the employing agencies to carry the burden of establishing that the Appellants met the criteria of § 551.206. Id. §§ 551.202(a), (c). 10 Dissatisfied with this exemption determination, Appellants filed an action at law under the Tucker Act, codified at 28 U.S.C. § 1491, against the Government in the United States Court of Federal Claims. Simultaneously, Appellants filed identical administrative claims before the GAO. In both proceedings, Appellants alleged that they were improperly ruled exempt from the FLSA and were entitled to damages flowing from this misclassification. In a decision dated October 30, 1992, the Court of Federal Claims concluded that some of the Appellants were exempt, while others were non-exempt. Adams v. United States, 27 Fed.Cl. 5, 28-29 (1992). 11 On September 23, 1998, we partially reversed the Court of Federal Claims' ruling in a non-precedential opinion and remanded the case for further proceedings as to those criminal investigators held exempted from the FLSA. Adams v. United States, No. 98-5011, 1998 WL 804552, 1998 U.S.App. LEXIS 23565 (Fed.Cir. Sept. 23, 1998) (Table). That case remains pending before the Court of Federal Claims. 12
13 On October 27, 1995, prior to the enactment of amended Section 640, Appellants filed suit against the Government in the United States District Court for the District of Columbia, seeking mandamus, injunctive, and declaratory relief against the GAO for its inactivity on their administrative claims. Following the enactment of amended Section 640, Appellants twice supplemented their complaint to challenge the constitutionality of original Section 640 and amended Section 640 under the Due Process and Takings Clauses of the Fifth Amendment. 14 On October 12, 1996, the district court granted summary judgment in favor of the Government. Adams v. Bowsher, 946 F.Supp. 37 (D.D.C.1996). The district court addressed Appellants' due process arguments, ultimately concluding that neither Section 640 nor amended Section 640 violated the Due Process Clause. As to Appellants' takings claim, the district court concluded that a compensable taking did not occur, based upon the three factors set forth for regulatory takings in Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986). Adams, 946 F.Supp. at 44. Appellants appealed that decision to the United States Court of Appeals for the District of Columbia Circuit. 15 On August 28, 1998, the District of Columbia Circuit affirmed the district court's decision on the due process claim, but reversed its decision on Appellants' takings claim. Adams v. Hinchman, 154 F.3d 420 (D.C.Cir.1998). The circuit court noted that takings claims for amounts greater than $10,000 fall within the exclusive jurisdiction of the Court of Federal Claims pursuant to the Tucker Act. Id. at 425-426. Consequently, the circuit court concluded that the district court might lack jurisdiction to entertain Appellants' takings claim and remanded the takings claim to the district court to determine whether jurisdiction was proper under the Little Tucker Act, codified at 28 U.S.C. § 1346(a)(2), for claims of less than $10,000, which lodges concurrent jurisdiction in the district courts. 16 On March 30, 2000, the district court issued an opinion answering the jurisdictional question posed by the circuit court. Adams v. Walker, No. 95-2015 (D.D.C. Mar.30, 2000). The district court noted that Appellants sought to amend their complaint to allege an amount in controversy in excess of $10,000. The district court stated that the circuit court essentially rejected [Appellants'] claim for injunctive relief and viewed it instead as a claim for money damages. Id., slip op. at 5. Hence, the district court concluded that justice required it to allow Appellants to amend their complaint and, therefore, to transfer the case to the Court of Federal Claims. Id., slip. op. at 6. The district court thus vacated its ruling concerning Appellants' takings claim and ordered the case transferred to the Court of Federal Claims pursuant to the transfer provision in 29 U.S.C. § 1631. Id., slip. op. at 9.
17 On August 4, 2000, after transfer from the district court to the Court of Federal Claims, Appellants' complaint claimed that three separate governmental actions effected a taking of their property under the Fifth Amendment: (1) the Comptroller General's Ford decision that retroactively applied a two- or three-year statute of limitations to their administrative claims instead of the six-year statute of limitations; (2) the GAO's failure and refusal in the intervening year to apply the original Section 640 to their administrative claims; and (3) Congress's amendment of Section 640 in late 1995 restricting restoration of the six-year limitations period to situations where no overtime was paid at all. In response, the Government asserted that Appellants' case is merely a standard FLSA entitlement case disguised as a Fifth Amendment takings claim. Put differently, the Government argued that Appellants' claim is one for statutory entitlement under the FLSA because the only property allegedly taken was FLSA overtime compensation. The Government also argued that a claim to FLSA overtime compensation is not property within the meaning of the Takings Clause, and subsequently moved to dismiss the complaint under Court of Federal Claims Rule 12(b)(6) for failure to state a claim upon which relief can be granted and Court of Federal Claims Rule 12(b)(1) for lack of jurisdiction over the subject matter of the case. 18 The trial court distilled the parties' arguments to a single issue: whether Appellants' claim involves property within the meaning of the Takings Clause of the Fifth Amendment. Adams, 2003 U.S. Claims LEXIS 238 at . To address that issue, the trial court considered Appellants' claim for underpaid overtime compensation separate from Appellants' administrative claim. Relying on Commonwealth Edison Co. v. United States, 271 F.3d 1327 (Fed.Cir.2001) (en banc), the trial court held that a governmental obligation to pay money pursuant to a statute is not a protected property interest under the Takings Clause. Adams, 2003 U.S. Claims LEXIS 238 at . In reaching that holding, the trial court focused its analysis on the identification of a true property interest but concluded that [a]ll the [appellants] have identified is a run-of-the-mill claim for liability. Id. at . Additionally, the court reasoned that even if a statutory right to payment could be considered property, the Government had not taken Appellants' money for its own use; it simply did not pay them because it determined after analysis that they were exempt from the FLSA. Id. at . 19 As for Appellants' administrative claim, the court observed that the abolition of a cause of action may rise to the level of a taking, but only if the cause of action secures a legally protected interest. Id. at . For that reason, the court concluded that Appellants' administrative claim also must fail, since the interest underlying this claim is not cognizable as a property right protected by the Takings Clause of the Fifth Amendment. Id. Moreover, the court noted that the district court and District of Columbia Circuit already had rejected Appellants' due process claims. Id. The court concluded, therefore, that no cause of action to protect Appellants' property or procedural rights had been unconstitutionally taken from them. Id. at . Accordingly, the Court of Federal Claims granted the Government's motion to dismiss and ordered entry of final judgment in favor of the Government. 20 Appellants timely appealed, arguing that the Court of Federal Claims erred in deciding that they did not have a property interest in either FLSA overtime compensation, or an administrative claim thereto, cognizable under the Takings Clause. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) because the appeal is from a final judgment of the Court of Federal Claims.