Court Opinion

ID: 2620260
Source: CourtListenerOpinion
Date Created: 2013-10-30 13:46:31.362892+00
Date Added: 2024-06-11T10:58:23.207938
License: Public Domain

In the United States Court of Federal Claims
                                           No. 12-645C
                                     (Filed: October 29, 2013)

**************************************
PRAIRIE COUNTY, MONTANA and          *
GREENLEE COUNTY, ARIZONA,            *
                                                            Payment in Lieu of Taxes Act, 31
                                      *
                  Plaintiffs,         *                     U.S.C. §§ 6901-6907; Accrual
                                      *                     Suspension; Contract Programs
v.                                    *                     Versus Benefits Programs; RCFC
                                      *                     12(b)(6)
THE UNITED STATES,                    *
                                      *
                  Defendant.          *
**************************************

Alan I. Saltman, Washington, DC, for plaintiffs.

Sharon A. Snyder, United States Department of Justice, Washington, DC, for defendant.

                                    OPINION AND ORDER

SWEENEY, Judge.

        Plaintiffs Prairie County, Montana and Greenlee County, Arizona seek to recover monies
that they claim are due to them under the Payment in Lieu of Taxes Act (“PILT”), 31 U.S.C.
§§ 6901-6907 (2000). Greenlee County previously was unsuccessful in seeking payments under
the statute before the United States Court of Federal Claims (“Court of Federal Claims”) and the
United States Court of Appeals for the Federal Circuit (“Federal Circuit”). Defendant moves to
dismiss this action based on the earlier decision of the Federal Circuit. In this action, plaintiffs
argue that a recent United States Supreme Court (“Supreme Court”) decision changed the law
such that the previous decision of the Federal Circuit no longer remains controlling precedent.
Because the court rejects plaintiffs’ argument, defendant’s motion is granted, and accordingly
plaintiffs’ complaint is dismissed.

                                       I. BACKGROUND

                             A. The Payment in Lieu of Taxes Act

        In 1964, Congress established the Public Land Law Review Commission (“commission”)
to “conduct a comprehensive review of the policies applicable to the use, management, and
disposition of the Federal lands.” S. Rep. No. 94-1262, at 5 (1976). The commission returned
its report four years later, recommending that the federal government no longer continue the
“historic policy of disposal” of public lands but should instead keep federal ownership of the
lands then held. Id. at 6 (citing Public Land Law Review Commission, One Third of the
Nationʼs Land: A Report to the President and the Congress by the Public Land Law Review
Commission (1970) 1). The commission also suggested that, if its recommendation of
maintaining the lands owned by the federal government was followed, then it was “the obligation
of the United States to make certain that the burden of that policy is spread among all the people
of the United States and is not borne only by those states and governments in whose area the
lands are located.” Id.

        Agreeing with this recommendation, Congress enacted the PILT in 1976 “to compensate
local governments for the loss of tax revenues resulting from the tax-immune status of federal
lands located in their jurisdictions, and for the cost of providing services related to those lands.”
Lawrence County v. Lead-Deadwood Sch. Dist. No. 40-1, 469 U.S. 256, 258 (1985). The
Supreme Court explained that the PILT was intended to address a deficiency in the way that
public lands were provided with governmental services:

                Where these lands consisted of wilderness or park areas, they
                attracted thousands of visitors each year. State governments might
                benefit from this federally inspired tourism through the collection
                of income or sales taxes, but these revenues would not accrue to
                local governments, who were often restricted to raising revenue
                from property taxes. Yet it was the local governments that bore
                the brunt of the expenses associated with federal lands, such as law
                enforcement, road maintenance, and the provision of public health
                services.

Id. at 262-63 (citing S. Rep. No. 94-1262 at 8-9).

         Pursuant to the PILT, the United States Department of the Interior (“Interior” or
“agency”) “shall make a payment for each fiscal year to each unit of general local government in
which entitlement land is located as set forth in this chapter.” 31 U.S.C. §6902(a)(1). A “unit of
general local government” includes counties and other municipalities that the Secretary of the
Interior “determines to be the principal provider or providors of governmental services within the
state[.]” Id. § 6901(2)(A). “Entitlement land” includes land owned by the United States in the
National Park System and the National Forest System. Id. § 6901(1).

        To determine the amount of a payment directed by § 6902(a)(1), the agency computes
payment amounts for each unit of general local government under two alternative formulas set
forth in the PILT, and then distributes the higher of the two amounts calculated. Id.
§ 6903(b)(1). The agency receives funding to make the payments directed by § 6902(a)(1)
through congressional appropriations. During all times relevant to this litigation, the PILT
provided: “Necessary amounts may be appropriated to the Secretary of the Interior to carry out
this chapter. Amounts are available only as provided in appropriation laws.” 1 Id. § 6906. In

       1
           In 2008 and 2012, the PILT’s funding provision was amended to read:

                For each of the fiscal years 2008 through 2013 –
                                                  2
2006 and 2007, Congress appropriated less than the amount necessary to pay the full authorized
payment amounts to every qualified unit of general local government. Consistent with the
regulations, Interior proportionally reduced the authorized payment amounts to conform to the
amount of funds actually appropriated.

                                    B. Plaintiffs’ Allegations

        Plaintiffs are political subdivisions of their respective states that qualify as units of
general local government as defined by the PILT and in which entitlement land is located.
Prairie County alleges that it was entitled to receive a payment of $261,987 for fiscal years 2006
and 2007 under the PILT formulas, but that it only received a $173,061 payment, a difference of
$81,500. Greenlee County alleges that it was entitled to receive a payment of $981,310 under
the PILT formulas for fiscal years 2006 and 2007, but that it only received a $645,927 payment,
a difference of $335,383. Plaintiffs allege, in Count II of their complaint, that they remain
entitled to the difference between what was due to them pursuant to the statutory formulas and
the amount actually paid. Plaintiffs also seek, in Count I of the complaint, to certify a class of
similarly situated units of general local governments that, like the two named plaintiffs, allegedly
did not receive all of the monies that were due to them under the PILT.

                                  C. Procedural Background

       Plaintiffs filed their complaint on September 27, 2012. Defendant subsequently moved to
dismiss the complaint for failure to state a claim upon which relief can be granted pursuant to
Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”).

        In its motion, defendant relies primarily on the decision in Greenlee County v. United
States, 487 F.3d 871 (Fed. Cir. 2007), in which the Federal Circuit rejected Greenlee County’s
prior suit for the recovery of the PILT shortfalls. Defendant argues that Greenlee County and the
principle of issue preclusion prevent plaintiffs in this action from stating a cause of action that
would allow the court to rule in plaintiffs’ favor. Oral argument is unnecessary.

                                        II. DISCUSSION

                             A. RCFC 12(b)(6) Motion to Dismiss

         “A complaint must be dismissed under Rule 12(b)(6) when the facts asserted do not give
rise to a legal remedy.” Indian Harbor Ins. Co. v. United States, 704 F.3d 949, 954 (Fed. Cir.

               (1) each county or other eligible unit of local government shall be
               entitled to payment under this chapter; and

               (2) sums shall be made available to the Secretary of the Interior for
               obligation or expenditure in accordance with this chapter.

31 U.S.C. § 6906 (2006), amended by Moving Ahead for Progress in the 21st Century Act, Pub.
L. No. 112-141, § 100111, 126 Stat. 405, 906 (2012); Emergency Economic Stabilization Act of
2008, Pub. L. 110-343, § 601(c)(1), 122 Stat. 3765, 3911 (2008).
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2013) (citing Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002)). “When
considering an RCFC 12(b)(6) motion, the court “must determine ‘whether the claimant is
entitled to offer evidence to support the claims,’ not whether the claimant will ultimately
prevail.” Chapman Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d 934, 938 (Fed. Cir. 2007)
(quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v
Fitzgerald, 457 U.S. 800, 814-19 (1982)). “[T]he consequence of a ruling by the court . . . that
plaintiff’s case does not fit within the scope of the [money-mandating] source . . . is simply this:
plaintiff loses on the merits for failing to state a claim on which relief can be granted.” Jan’s
Helicopter Serv. v. United States, 525 F.3d 1299, 1307 (Fed. Cir. 2008) (alteration in original);
see also RhinoCorps Co. v. United States, 87 Fed. Cl. 481, 492 (2009) (“A motion made under
Rule 12(b)(6) challenges the legal theory of the complaint, not the sufficiency of any evidence
that might be adduced.”).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim of relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2006)).
“Deciding whether a complaint states a plausible claim for relief will . . . be a context-specific
task that requires the reviewing court to draw on its judicial experience and common sense.”
Iqbal, 556 U.S. at 679. “A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. at 678 (citing Twombly, 550 U.S. at 556). Neither allegations “that are
‘merely consistent with’ a defendants liability,” nor “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements” are sufficient. Id.

       “The court assumes all well-pled factual allegations are true and indulges in all
reasonable inferences in favor of the nonmovant.” Terry v. United States, 103 Fed. Cl. 645, 652
(2012) (citing United Pac. Ins. Co. v. United States, 464 F.3d 1325, 1327-28 (Fed. Cir. 2006)).
The court is “not bound to accept as true a legal conclusion couched as a factual allegation.”
Twombly, 550 U.S. at 555.

                     B. Greenlee County Remains Controlling Precedent

        Defendant relies upon Greenlee County to argue that plaintiff cannot state a claim upon
which relief can be granted. Because the court agrees that Greenlee County is controlling, a
fuller discussion of the Federal Circuit’s decision is warranted.

       In 2004, Greenlee County filed suit alleging that it did not receive the full amount of the
PILT monies to which the statutory formulas entitled it because Congress had not appropriated
enough money to fully fund the program. Greenlee County, 487 F.3d at 874-75. The Court of
Federal Claims granted the government’s motion to dismiss, and Greenlee County appealed. Id.

        The Federal Circuit affirmed. It first noted that a line of cases going back as far as 1886
established that Congress’s failure to appropriate funds did not defeat a suit to enforce an
obligation set by statute. Id. at 877. The Federal Circuit explained that this proposition had been
expressed at least as early as 1886, when the Supreme Court held that the United States
Ambassador to Haiti could sue the government to recover his full $7,500 annual salary set by

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statute despite the fact that Congress had only appropriated $5,000 that year. Id. (citing United
States v. Langston, 118 U.S. 389, 390 (1886)). In its Greenlee County decision, the Federal
Circuit also found persuasive the reasoning expressed in a United States Court of Claims’
decision: “ʻIt has long been established that the mere failure of Congress to appropriate funds,
without further words modifying or repealing, expressly or by clear implication, the substantive
law, does not in and of itself defeat a Government obligation created by statute.’” Id. (quoting
N.Y. Airways, Inc. v. United States, 369 F.2d 743, 748 (Ct. Cl. 1966)). According to the Federal
Circuit, in some instances a “failure [of Congress] to appropriate funds to meet statutory
obligations prevents the account officers of the Government from making disbursements, but
such rights [remain] enforceable in the Court of Claims.” Id. (quoting N.Y. Airways, 369 F.2d at
748) (alterations in original).

        The Federal Circuit then turned its inquiry to whether the PILT fit into this template
because “in some instances, the statute creating the right to compensation (or authorizing the
government to contract) may restrict the government’s liability or limit its contractual authority
to the amount appropriated by Congress.” Id. at 878. It concluded that the PILT was so limited,
focusing on the language of § 6906 that “[a]mounts are available only as provided in
appropriation laws.” Id. The court first noted that “the language ‘subject to the availability of
appropriations’ is commonly used to restrict the government’s liability to the amounts
appropriated by Congress for the purpose.” Id. It continued:

               [W]e have stated that “[a]lthough [a plaintiff] may have expected
               to receive full funding . . . based on past experiences, the subject-
               to-availability-of-appropriations language . . . prevents [the
               plaintiff] from asserting that it was entitled to full funding as a
               matter of right.” Thus it is undisputed that if PILT used the phrase
               “subject to the availability of appropriations,” Greenlee County’s
               right to recover would be limited to the amount appropriated.

Id. (citation omitted). The court concluded: “We see little functional difference between saying
that amounts are ‘subject to the availability of appropriations’ and saying that amounts are
‘available only as provided in appropriations laws,’ and we conclude that the language of § 6906
limits the government’s liability under PILT to the amount appropriated by Congress.” Id.

         Importantly, the Federal Circuit’s decision in Greenlee County also characterized the
program authorized by the PILT as a benefits program and not as establishing a contract between
units of general local government and the United States. “PILT . . . involves a benefit program
not a contract, and ‘there is great room’ in benefits programs to find the government’s liability
limited to the amount appropriated.” Id. at 879 (citing Star-Glo Assocs., LP v. United States,
414 F.3d 1349, 1355 (Fed. Cir. 2005)). Therefore, the court concluded “that the government’s
liability for PILT payments was limited to the amounts appropriated by Congress.” Id. at 880.

       Plaintiffs recognize this precedent. Nonetheless, they argue that the Supreme Court’s
decision in Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181 (2012), changed the law

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sufficiently such that the Federal Circuit’s prior Greenlee County decision is no longer
controlling. 2 Plaintiffs contend:

               Ramah holds that once Congress has appropriated sufficient legally
               unrestricted funds to pay an obligation to the plaintiff out of an
               appropriation account from which others are to be paid, the
               government cannot back out of its promise to pay the plaintiff
               upon the exhaustion of funds in that account. This is true even if
               the government’s obligation to pay is subject to the availability of
               appropriations.

Pls.’ Resp. 5 (footnotes and citations omitted). Under Ramah, plaintiffs argue, the PILT must be
read as an obligation to pay the full amount set by the statutory formulas, even if the amount
appropriated has been exhausted.

       Plaintiffs misread Ramah, a decision which involved breach of contract, not a benefits
program. The decision in Ramah, concerned a suit by Indian tribes arising under the Indian Self-
Determination Act (“ISDA”), 25 U.S.C. §§ 450f-450n (1988 & Supp. II). 132 S. Ct. at 2186.
Specifically, the issue before the Supreme Court in Ramah was whether the ISDA requires the
Secretary of the Interior to contract to pay the “contract support costs” related to each self-
determination contract. Id. The ISDA “directs the Secretary of the Interior, ‘upon the request of
any Indian tribe . . . to enter into a self-determination contract . . . to plan, conduct, and
administer’ health, education, economic, and social programs that the Secretary otherwise would
had administered.” Id. (quoting 25 U.S.C. § 450f(a)(1)) (emphasis added). “Congress included a
model contract in ISDA and directed that each tribal self-determination contract ‘shall . . .
contain or incorporate it by reference.’” Id. at 2187 (quoting 25 U.S.C. § 450l) (emphasis
added). The model contract provided for by the ISDA specifies that “ʻ[s]ubject to the
availability of appropriations, the Secretary shall make available to the Contractor the total
amount specified in the annual funding agreement’ between the Secretary and the tribe.” Id.
(quoting 25 U.S.C. § 450l(c)) (emphasis added).

        In Ramah, the Supreme Court explained that between fiscal years 1994 and 2001,
“appropriations covered only between 77% and 92% of tribes’ aggregate contract support costs.
. . . Lacking funds to pay each contractor in full, the Secretary paid tribes’ contract support costs
on a uniform, pro rata basis.” Id. Several Indian tribes sued for breach of contract for the unpaid
sums. Id. at 2188. Relying on its earlier decision in Cherokee Nation of Oklahoma v. Leavitt,
543 U.S. 631 (2005), the Supreme Court held that the tribes could recover despite the language
in the contract making payment “[s]ubject to the availability of appropriations” because the
“Government cannot back out of its contractual promise to pay each Tribe’s full contract support

       2
          Plaintiffs also rely on the Supreme Court’s decision in Arctic Slope Native Ass’n v.
Sebelius, 133 S. Ct. 22 (2012), for the same proposition. The Supreme Court’s decision in
Arctic Slope was a memorandum opinion that vacated the judgment of the Federal Circuit
dismissing an Indian tribe’s suit for contract support costs under the ISDA in light of Ramah, and
remanded for further proceedings. Id. Arctic Slope provides no independent change in the law.
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costs.” Ramah, 132 S. Ct. at 2191. The Supreme Court’s decision in Ramah turned on the
contractual relationship between the parties:

               Our conclusion in Cherokee Nation followed directly from well-
               established principles of Government contracting law. When a
               Government contractor is one of several persons to be paid out of a
               larger appropriation sufficient in itself to pay the contractor, it has
               long been the rule that the Government is responsible to the
               contractor for the full amount due under the contract, even if the
               agency exhausts the appropriation in service of other permissible
               ends. That is so “even if an agency’s total lump-sum appropriation
               is insufficient to a pay all the contracts the agency has made.” In
               such cases, “[t]he United States are as much bound by their
               contracts as are individuals.”

Id. at 2189 (citations omitted). Indeed, it repeatedly emphasized that its decision was
“[c]consistent with longstanding principles of Government contracting law . . . .” Id. at 2186;
see also id. at 2189 (“This principle safeguards both the expectations of Government contractors
and the long-term fiscal interests of the United States.”); id. at 2192 (rejecting the dissent’s
argument as “inconsistent with ordinary principles of Government contracting law”).

        Plaintiffs, in contrast, rely not on an explicit contract between themselves and defendant,
but instead seek payments under the PILT, a program the Federal Circuit has determined is a
benefits program. See Greenlee County, 487 F.3d at 879. Thus, Ramah is inapposite.

        Plaintiffs attempt to minimize the differences between a contractually based program and
a benefits program by arguing that the predictability of payment under the PILT is “critical.”
Pls.’ Resp. 6. The Federal Circuit did not find the “predictability of payment” a reason to depart
from the distinction between a contract and a benefits program and neither will this court.
Indeed, the difference between a benefits program and a contractually based program is
significant, if not determinative, a point plaintiffs recognize:

               It would be equally wrong to do as defendant suggests and apply
               one rule where an obligation is created “subject to the availability
               of appropriations” by contract (particularly one to perform work
               done formerly by the federal government) as in Ramah and Arctic
               Slope and another rule where, as here, an obligation is created
               “subject to the availability of appropriations” by statute intended to
               provide local governments an adequate and predictable level of
               payment for services that they (not the federal government)
               provide with respect to federal lands located within their borders.

Id. at 8. This is the precise distinction made by the Federal Circuit in Greenlee County and Star-
Glo Associates. Unquestionably, the Court of Federal Claims “is bound to follow Federal
Circuit precedent unless ‘the circuit’s precedent is expressly overruled by statute or by a
subsequent Supreme Court decision.’” Red River Coal Co. v. United States, 105 Fed. Cl. 602,

                                                  7
610 (2012) (quoting Strickland v. United States, 423 F.3d 1335, 1338 n.3 (Fed. Cir. 2005)); see
also Coltec Indus, Inc. v. United States, 454 F.3d 1340, 1353 (Fed. Cir. 2006) (“There can be no
question that the Court of Federal Claims is required to follow the precedent of the Supreme
Court, our court, and our predecessor court, the Court of Claims”). A “trial judge, believing that
[prior precedents of a circuit court] contravene a Supreme Court precedent . . . may do no more
than criticize those opinions, urging en banc review.” Strickland, 423 F.3d at 1338 n.3. The
court sees no basis to criticize Greenlee County and thus follows that decision. Additionally, the
court sees no reason why making a distinction between a contractually based remedy and a
benefit program would be, as plaintiffs argue, a “wrong” distinction. Binding precedent holds
the distinction between a contractually based program and qualifying for participation in a
benefits program as not equivalent. Greenlee County, 487 F.3d at 879 (citing Star-Glo Assocs.,
414 F.3d at 1355). Consequently, the “distinction” which defines the parties’ relationship to the
government is not merely a distinction of form. Rather, the distinction is determinative of the
claims a party may bring against the government for money damages.

        Plaintiffs additionally argue that units of general local government are not receiving
“gratuitous benefits,” but are providing public health, safety, and infrastructure services with
respect to federal lands. However, they do not assert that any program or contract, explicit or
implicit, other than the program created by the PILT, entitles them to these funds. At most,
plaintiffs hint that these services constitute an implied-in-fact contract. To establish the
existence of an implied-in-fact contract, plaintiffs must demonstrate the same elements required
to establish the existence of an express contract: mutuality of intent, consideration, unambiguous
offer and acceptance, and authority on the part of the government’s representative to bind the
government. Hanlin v. United States, 316 F.3d 1325, 1328 (Fed. Cir. 2003). However, plaintiffs
failed to allege any of these requirements, except perhaps consideration, have been met in this
case. Consequently, because plaintiffs have not alleged the existence of an implied-in-fact
contract in their complaint, the court need not decide whether the provision of services to federal
lands has created one.

         Plaintiffs finally argue that in Bristol Bay Area Health Corp. v. United States, 110 Fed.
Cl. 251 (2013), the Court of Federal Claims rejected the argument that the holding of Ramah
applies only to the United States’ contractual obligations. Plaintiffs are mistaken. Indeed,
plaintiffs’ selectively quote from that decision to support their argument: “[T]he Supreme Court
in its decision in [Ramah] confirmed the full funding mandate, opining that the [ISDA]
‘mandates that the Secretary shall pay the full amount of contract support costs incurred by tribes
in performing their contracts.’” Id. at 264 (quoting Ramah, 132 S. Ct. at 2186). But, plaintiffs
disregard the language immediately following that which they quote:

               The Supreme Court recognized the model contract and its
               reference to the [annual funding agreements] as a basis for the full
               amount of [contract support costs], and found that, “the
               Government’s contractual promise to pay each tribal contractor the
               ‘full amount of funds to which the contractor [was] entitled,’ was
               therefore binding.”

Id. (citations omitted). Thus, it is plain that the Bristol Bay court acknowledged that the

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contractual relationship between the tribes and the United States in Ramah was fundamental to
the Supreme Court’s decision. The court’s conclusion here – that plaintiffs participate in a
benefits program and are not in privity with the United States – is not therefore inconsistent with
the court’s reasoning in Bristol Bay. Thus, plaintiffs’ complaint fails to state a claim for relief.

       Accordingly, the court dismisses Count II of plaintiffs’ complaint pursuant to RCFC
12(b)(6) for failure to state a claim upon which relief can be granted.

      C. Plaintiff Greenlee County Is Precluded From Relitigating the PILT Payment
                                       Deficiencies

        “A fundamental precept of common-law adjudication . . . is that a ‘right, question or fact
distinctly put in issue and directly determined by a court of competent jurisdiction . . . cannot be
disputed in a subsequent suit between the same parties or their privies.’” Montana v. United
States, 440 U.S. 147, 153 (1979). The doctrines of res judicata and issue preclusion, also called
collateral estoppel, are “central to the purpose for which civil courts have been established, the
conclusive resolution of disputes within their jurisdictions.” Id. “Under res judicata, a final
judgment on the merits bars further claims by parties or their privies based on the same cause of
action.” Id. The doctrine of issue preclusion “serves, in certain circumstances, ‘to bar the
revisiting of “issues” that have already been fully litigated.’” Levi Strauss & Co. v. Abercrombie
& Fitch Trading Co., 719 F.3d 1367, 1371 (Fed. Cir. 2013) (quoting Jet, Inc. v. Sewage Aeration
Sys., 223 F.3d 1360, 1366 (Fed. Cir. 2000)). A party asserting issue preclusion must establish
four elements: “(1) identity of the issues in a prior proceeding; (2) the issues were actually
litigated; (3) the determination of the issues was necessary to the resulting judgment; and (4) the
party defending against preclusion had a full and fair opportunity to litigate the issues.” Id.
(citing Jet, Inc., 223 F.3d at 1366).

        Plaintiffs contend that issue preclusion “does not apply because . . . there has been a
significant change in the law” and they seek recovery for different years than were litigated in
the prior case. Pls.’ Resp. 8. To the contrary, all four factors are met in this proceeding for
plaintiff Greenlee County. The issues are the same as the issues in Greenlee County because
both suits were filed by units of general local government seeking payment for the difference
between the amounts they should have received under PILT and what they were actually paid.
Compare Greenlee County, 487 F.3d at 874, with Compl. ¶¶ 48-56. In addition, the issue in this
case was actually litigated in and the determination was necessary to the Federal Circuit’s
decision in Greenlee County. Indeed, the issue of whether defendant was liable for any PILT
shortfall was the only issue presented and decided in Greenlee County. Finally, one of the
plaintiffs in this case, Greenlee County, was the same plaintiff in the Greenlee County case and
therefore had the opportunity to litigate this issue.

        Plaintiffs are correct that issue preclusion “is subject to exceptions when the
circumstances dictate.” Bingaman v. Dep’t of the Treasury, 127 F.3d 1431, 1437 (Fed. Cir.
1997) (citing Montana, 440 U.S. at 162). In particular, “[c]ourts have crafted an exception to the
collateral estoppel principle when there has been a change in the applicable law between the time
of the original decision and the subsequent litigation in which collateral estoppel is invoked.” Id.
Plaintiffs argue that this exception applies here because Ramah worked a change in the

                                                 9
applicable law. However, as explained above, the court concludes that there has been no change
to the precedential force of Greenlee County, and accordingly this exception does not apply.
Plaintiffs also contend that issue preclusion does not apply because the controversy now before
the court concerns different payment years. Plaintiffs argument lacks merit. Issue preclusion
applies because the factual and legal underpinnings are identical. As the Supreme Court
explained in Montana v. United States: “Because the factual and legal context in which the
issues of this case arise has not materially altered since [the prior decision], normal rules of
preclusion should operate to relieve the parties of “redundant litigation [over] the identical
question of the statute’s application . . . .” 440 U.S. at 162; see also Jet, Inc., 223 F.3d at 1366
(“[T]he ‘identity of issues’ analysis requires inquiry into the actual facts found and presented in
the earlier litigation.”).

         Because all four factors are met with respect to plaintiff Greenlee County and because the
court has found that Ramah has not worked a change in the law such that this action falls within
an exception to the doctrine of issue preclusion, plaintiff Greenlee County must be dismissed
from this case. Moreover, the court need not consider whether plaintiff Prairie County and the
rest of the purported class of units of general local government are barred by issue preclusion
stemming from the Greenlee County decision. Such an analysis would focus on whether the
non-parties to the prior decision were nonetheless privy to or represented in the prior proceeding.
See generally Taylor v. Sturgell, 553 U.S. 880, 892-895 (2008) (discussing when a non-party to a
prior judgment may still be bound by res judicata or issue preclusion). The parties have provided
no background or argument speaking to this point and thus the court need not decide if issue
preclusion applies to any party other than Greenlee County. However, even if Prairie County
and the members of the purported class were not privy to or represented in Greenlee County,
their claims must still be dismissed for failure to state a claim based on the controlling precedent
of that decision.

         D. Plaintiffs’ Request for Class Action Certification Is Dismissed as Moot

        In Greenlee County, the Federal Circuit affirmed the decision of the Court of Federal
Claims finding the issue of class certification moot because the cause of action under PILT had
been dismissed. 487 F.3d at 880-81. The Federal Circuit noted that it had “repeatedly found on
appeal that issues related to class certification were moot in light of [its] resolution against the
plaintiff of a motion to dismiss or for summary judgment” and saw “no reason to apply a
different rule when it is the Court of Federal Claims that finds the issue moot.” Id. at 880.

         Count I of the complaint seeks only to certify a class of similarly situated units of general
local government. Having dismissed Count II of the complaint, the only claim upon which relief
could be granted for any individual plaintiff, the court also dismisses Count I, plaintiffs’ request
to certify a class, as moot.

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                                     III. CONCLUSION

       For the reasons set forth above, the court GRANTS defendant’s motion to dismiss and
DISMISSES plaintiffs’ complaint for failure to state a claim upon which relief can be granted.
The clerk is directed to enter judgment accordingly. No costs.

       IT IS SO ORDERED.

                                                    s/ Margaret M. Sweeney______________
                                                    MARGARET M. SWEENEY
                                                    Judge

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