Court Opinion

ID: 2666406
Source: CourtListenerOpinion
Date Created: 2014-04-04 08:55:13.028602+00
Date Added: 2024-06-11T13:02:07.118322
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA

______________________________
                               )
TETON HISTORIC AVIATION        )
FOUNDATION, et al.,            )
                               )
          Plaintiffs,          )
                               )
          v.                   )    Civil Action No. 09-0669 (RWR)
                               )
UNITED STATES DEPARTMENT       )
OF DEFENSE, et al.,            )
                               )
          Defendants.          )
______________________________ )

                   MEMORANDUM OPINION AND ORDER

     Plaintiffs Teton Historic Aviation Foundation and Teton

Avjet LLC (collectively “Teton”) brought this action against the

United States and the U.S. Department of Defense (“DOD”) seeking

injunctive and declaratory relief under the Administrative

Procedure Act, 5 U.S.C. § 706(2)(A), alleging that the defendants

have deprived them of airplane parts due to them under a contract

that they entered into with Government Liquidation, a non-

Governmental agency that sells surplus materials on behalf of the

United States.   Defendants move to dismiss under Federal Rule of

Civil Procedure 12(b)(1), arguing that the United States Court of

Federal Claims has exclusive jurisdiction over this case because

it is a contract action against the United States.   Because no

party asserts that plaintiffs are in privity of contract with the

government, the defendants’ motion to dismiss will be denied.
                                 -2-

                              BACKGROUND

     The United States sells to private parties military aircraft

parts that it determines to be surplus or outdated.      (Second Am.

Compl. (“Compl”) ¶¶ 18-19.)    Materials which are not sold are

destroyed by the Aerospace Maintenance and Regeneration Group

(“AMARG”) operating under the auspices of the United States Air

Force.   (Id. ¶ 17.)   The Defense Reutilization and Marketing

Service (“DRMS”) handles the sales, which are overseen by DOD.

(Id. ¶ 16.)   In order to facilitate sales, DRMS contracts with

Government Liquidation to solicit bids and arrange purchases.

(Id. ¶ 20.)

     In 2008, Government Liquidation solicited bids for parts

from five surplus United States Navy and Marine Aircraft.      (Id.

¶ 25.)   Teton bid on the parts in hopes of either obtaining an

operable aircraft or, alternatively, acquiring parts to restore

aircraft of its own.   (Id. ¶¶ 28-29.)     Teton made the highest

bid, submitted a list of over 5,000 parts that it hoped to

receive, and subsequently paid for the parts.      (Id. ¶¶ 36-41.)

Government Liquidation approved the release of 189 part numbers

for a total of 1,890 parts and subsequently informed Teton that

it was still awaiting AMARG’s final approval of the requested

parts.   (Id. ¶¶ 43, 46.)

     Several months later, Government Liquidation informed Teton

that AMARG would approve only 29 part numbers and that Teton
                                     -3-

would have to pay AMARG an hourly rate of $97.25 for the removal

of the parts.     (Id. ¶¶ 47, 49.)    Government Liquidation then

informed Teton that it would have one business day to decide

whether it wished to proceed with the contract.       (Id. ¶ 51.)   In

the following days, Teton learned that the Government had

destroyed all five of the aircraft covered by the contract.         (Id.

¶ 59.)     Government Liquidation notified Teton that it would

cancel the contract and repay any money Teton had expended under

the agreement.     (Id. ¶ 60.)

     Under the belief that DOD had acted in concert with

Government Liquidation to destroy the planes in question, Teton

brought suit alleging violations of the Administrative Procedure

Act, 5 U.S.C. § 706(2)(A), and seeking in part to require the

defendants to preserve certain aircraft as replacements for those

destroyed.     (Id. ¶¶ 70-71, pp. 15-17.)    Defendants have moved to

dismiss for lack of subject matter jurisdiction contending that

Teton’s claims are contractual in nature and, therefore, that the

Court of Federal Claims has exclusive jurisdiction over this

action.1

     1
       The defendants also assert that courts should “defer to
the exercise of discretion by military agencies in cases such as
these.” (Defs.’ Mem. of P. & A. in Supp. of Mot. to Dismiss
(“Defs.’ Mem.”) at 3.) However, the defendants’ discussion of
this issue is spare and fails to pinpoint the issue as to which
any deference is due. In any event, as the plaintiffs note,
judicial deference plays no role in analyzing a motion to dismiss
for lack of subject matter jurisdiction. See, e.g., Citizens
Awareness Network, Inc. v. United States, 391 F.3d 338, 345-48
                                -4-

                            DISCUSSION

     In reviewing a motion to dismiss for lack of subject matter

jurisdiction, a court “accepts as true all of the factual

allegations contained in the complaint . . . and may also

consider ‘undisputed facts evidenced in the record.’”   Peter B.

v. CIA, 620 F. Supp. 2d 58, 67 (D.D.C. 2009) (quoting Coal. for

Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir.

2003)) (internal citation omitted).   The plaintiff bears the

burden of establishing that the court has jurisdiction over a

claim.   Public Warehousing Co. K.S.C. v. Def. Supply Ctr. Phila.,

489 F. Supp. 2d 30, 35 (D.D.C. 2007) (citing U.S. Ecology, Inc.

v. U.S. Dep’t of Interior, 231 F.3d 20, 24 (D.C. Cir. 2000)).

“[P]laintiff’s factual allegations in the complaint . . . will

bear closer scrutiny in resolving a 12(b)(1) motion than in

resolving a 12(b)(6) motion for failure to state a claim.”    Id.

(internal quotation marks omitted) (alteration in original).

     “[T]he United States may not be sued without its consent[,]”

United States v. Mitchell, 463 U.S. 206, 212 (1983), and

“‘[j]urisdiction over any suit against the Government requires a

clear statement from the United States waiving sovereign immunity

. . . together with a claim falling within the terms of the

(1st Cir. 2004) (addressing judicial deference under the APA only
after establishing that subject matter jurisdiction exists).
Thus, the defendants’ argument on this issue merits no
discussion.
                                -5-

waiver.’”   Cartwright Int’l Van Lines, Inc. v. Doan, 525 F. Supp.

2d 187, 194 (D.D.C. 2007) (quoting United States v. White

Mountain Apache Tribe, 537 U.S. 465, 472 (2003)).

     The APA contains a limited waiver of sovereign immunity.

Under the APA,

     A person suffering legal wrong because of agency action
     . . . is entitled to judicial review thereof. An
     action in a court of the United States seeking relief
     other than money damages and stating a claim that an
     agency or an officer or employee thereof acted or
     failed to act in an official capacity . . . shall not
     be dismissed nor relief therein denied on the ground
     that it is against the United States . . . .

5 U.S.C. § 702.   In other words, the APA gives an individual who

has suffered a legal wrong because of agency action the right to

seek judicial review in federal court.    See id.   Judicial review

of a final agency action is limited to circumstances where there

is no other adequate remedy and where claims seeking relief are

not expressly or impliedly forbidden by another statute.    Public

Warehousing Co. K.S.C., 489 F. Supp. 2d at 36; see 5 U.S.C.

§ 704.

     The Tucker Act is a statute that forbids certain claims from

being brought in district courts.     Albrecht v. Comm. on Employee

Benefits of Fed. Reserve Employee Benefits Sys., 357 F.3d 62, 67

(D.C. Cir. 2004) (citing 28 U.S.C. § 1491 (2000)).    It vests in

the Court of Federal Claims original jurisdiction over civil
                               -6-

actions against the United States founded upon “any express or

implied contract with the United States . . . .”    28 U.S.C.

§ 1491(a)(1).

     [T]he Tucker Act impliedly forbids – in APA terms – not
     only district court awards of money damages, which the
     Claims Court may grant, but also injunctive relief,
     which the Claims Court may not. . . . [T]he APA does
     not waive sovereign immunity for contract actions
     brought against the government in a federal district
     court.

Albrecht, 357 F.3d at 68 (internal quotation marks and citation

omitted).

     However, “[t]o maintain a cause of action pursuant to the

Tucker Act that is based on a contract, the contract must be

between the plaintiff and the government[.]”    Cienega Gardens v.

United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998) (internal

quotation marks omitted) (first alteration in original).    “In

other words, there must be privity of contract between the

plaintiff and the United States.”    Id.   Exceptions to this rule

have included, for example, suits “brought against the government

in the Court of Federal Claims by an intended third-party

beneficiary, . . . by a subcontractor by means of a pass-through

suit when the prime contractor is liable to the subcontractor for

the subcontractor’s damages, . . . and by a Miller Act surety for

funds improperly disbursed to a prime contractor[.]”    First

Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d

1279, 1289 (Fed. Cir. 1999) (internal citations omitted).
                                -7-

“[T]hird party beneficiaries of a Government contract are

generally assumed to be merely incidental [not intended]

beneficiaries, and may not enforce the contract absent clear

intent to the contrary.”   Sealift Bulkers, Inc. v. Rep. of

Armenia, Civil Action No. 95-1293 (PLF), 1996 WL 901091, at * 4

(D.D.C. Nov. 22, 1996) (internal quotations marks omitted)

(second alteration in original).

     Neither side here avers that it entered into an express or

implied contract with the other.     (See Pls.’ Opp’n to Defs.’ Mot.

to Dismiss at 3 (“Plaintiffs never . . . entered into a contract

with any government entity[.]”); Defs.’ Mem. at 2 n.2 (“Defendant

does not admit that it entered into a contract with

Plaintiffs.”).)   Rather, Teton seeks relief declaring that the

defendants’ decision to withhold the aircraft parts from Teton

was “arbitrary, capricious, an abuse of discretion and not in

accordance with law” and enjoining DOD from destroying or

endangering any replacements of the aircraft parts sought under

the contract.   (Compl. at 15-17.)    The defendants, though, argue

that the Court of Federal Claims must hear this case because,

despite the relief sought, this suit is based on a contractual

agreement between Teton and Government Liquidation.    (Defs.’ Mem.

at 4-6.)   However, the defendants have failed to establish that

plaintiffs’ contract with Government Liquidation of itself

satisfies or vitiates the requirement that a party bringing suit
                                 -8-

in the Court of Federal Claims based on contract be in privity of

contract with the government.   See, e.g., First Hartford Corp.

Pension Plan & Trust, 194 F.3d at 1289.   Moreover, the defendants

do not invoke any exception to the general rule of privity that

would place this case within the exclusive jurisdiction of the

Court of Federal Claims.   Therefore, the defendants’ motion to

dismiss will be denied without prejudice.2

                           CONCLUSION AND ORDER

     Because the opposing parties do not allege that they are in

privity of contract with each other and the defendants have

failed to invoke or substantiate one of the exceptions to the

privity of contract requirement which otherwise might place this

     2
       The plaintiffs also have filed a motion for leave to file
a third amended complaint, which the defendants oppose. Under
Rule 15(a), leave to amend shall be freely given “when justice so
requires.” Fed. R. Civ. P. 15(a)(2). Courts may “deny leave to
amend if the proposed [complaint] would not survive a motion to
dismiss . . . , merely restates the same facts as the original
complaint in different terms, reasserts a claim on which the
court previously ruled or fails to state a legal theory.” Morgan
v. F.A.A., 657 F. Supp. 2d 146, 154 (D.D.C. 2009). The
plaintiffs’ proposed complaint does not alter the nature of
plaintiffs’ Second Amended Complaint in any way that would affect
the disposition of defendants’ motion to dismiss, and the
complaint does include additional facts not previously asserted
in the First Amended Complaint. Cf. id. (denying motion to amend
the complaint because the amended complaint would be subject to
dismissal for the same reasons the original complaint was
dismissed). The plaintiffs’ motion for leave to file a third
amended complaint, then, will be granted.
                                -9-

case in the exclusive jurisdiction of the Court of Federal

Claims, the defendants’ motion to dismiss will be denied without

prejudice.   Accordingly, it is hereby

     ORDERED that the defendants’ motion [22] to dismiss be, and

hereby, is DENIED without prejudice.     It is further

     ORDERED that the plaintiffs’ motion [32] for leave to file a

Third Amended Complaint be, and hereby, is GRANTED.      The Clerk is

directed to docket as the Third Amended Complaint the exhibit so

named attached to the plaintiffs’ motion.

     SIGNED this 26th day of February, 2010.

                                              /s/
                                      RICHARD W. ROBERTS
                                      United States District Judge