Court Opinion

ID: 9492184
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:34:22.192657+00
Date Added: 2024-06-11T17:55:09.824024
License: Public Domain

Opinion for the court filed by Senior Circuit Judge FRIEDMAN, in which Judge RADER joins. Dissenting opinion filed by Judge PLAGER.
FRIEDMAN, Senior Circuit Judge:
The sole question in this appeal is whether the Court of Federal Claims correctly dismissed, for want of subject matter jurisdiction, the appellant El-Sheikh’s claim under the Fair Labor Standards Act for overtime that he alleges he did not receive during his employment at the Boll-ing Air Force Base Officers’ Club (Bolling Officers’ Club) in Washington, D.C. We hold that the Court of Federal Claims has jurisdiction over El-Sheikh’s claim, and therefore reverse and remand.
I
Non-appropriated fund instrumentalities (NAFIs) are federal government entities whose “monies do not come from congressional appropriation but rather primarily from [their] own activities, services, and product sales.” Cosme Nieves v. Deshler, 786 F.2d 445, 446 (1st Cir.1986).
El-Sheikh’s complaint alleges that he was employed for six years at the Bolling Officers’ Club (a NAFI) in the food department in positions of increasing responsibility; and that between June 1993 and December 1995 he performed 2,106 hours of overtime for which he did not receive the overtime compensation to which he was entitled under the Fair Labor Standards Act.
El-Sheikh originally filed suit in the United States District Court for the District of Columbia, naming as the defendant “U.S. DEPARTMENT OF THE AIR FORCE, d/b/a Bolling Officers’ Club.” The government moved to dismiss the case for lack of subject matter jurisdiction or, alternatively, to transfer it to the Court of Federal Claims. The government stated that because El-Sheikh sought damages of more than $10,000, “only the United States Court of [Federal] Claims has jurisdiction.” (The Court of Federal Claims is the successor to the trial division of the Court of Claims and we use the two names interchangeably).
The district court transferred the case to the Court of Federal Claims. The court’s order stated that “the parties agree to transfer this case to the ... Court of [Federal] Claims” and that “jurisdiction in this matter properly lies in the ... Court of [Federal] Claims because the claim in this matter is in excess of $10,000,” and “ordered that the parties request is hereby granted and that this case shall be transferred to the ... Court of [Federal] Claims.”
In the Court of Federal Claims El-Sheikh filed a new complaint naming as *1323the defendant “THE UNITED STATES dba Bolling Officers’ Club.” The complaint asserted jurisdiction under the Fair Labor Standards Act, repeated the factual allegations of the earlier complaint, and sought both actual damages of $40,000 and liquidated damages in the same amount.
On the government’s motion to dismiss for lack of subject matter jurisdiction, the court held that it lacked jurisdiction and dismissed. The court held that the non-appropriated funds doctrine, discussed below, barred it from entertaining the suit.
II
A. The issue is whether the Court of Federal Claims had jurisdiction over El-Sheikh’s suit. That court’s jurisdiction is defined by the Tucker Act, which gives it the power to hear “any claim against the United States founded ... upon ... any Act of Congress.” 28 U.S.C. § 1491(a)(1). Because El-Sheikh’s “claim against the United States” is “founded ... upon” the Fail' Labor Standards Act, an “Act of Congress,” the first question is whether the United States waived its sovereign immunity to such suit. See Saraco v. United States, 61 F.3d 863, 864 (Fed.Cir.1995). In this case, the waiver is found in the 1974 amendments to the Fair Labor Standards Act.
In 1974, Congress extended the Act to cover most government employees. See H.R.Rep. No. 93-913, at 26, reprinted in 1974 U.S.C.C.A.N. 2811, 2837. It did so by expanding the definition of “employee” — the touchstone of coverage under the Act — to provide that “[i]n the case of an individual employed by a public agency,” “the term ‘employee’ means”
(A) any individual employed by the Government of the United States—
(i)as a civilian in the military departments (as defined in section 102 of title 5),
(ii) in any executive agency (as defined in section 105 of such title),
(iii) in any unit of the legislative or judicial branch of the Government which has positions in the competitive service,
(iv) in a nonappropriated fund instrumentality under the jurisdiction of the Armed Forces, or
(v) in the Library of Congress[.]
29 U.S.C. § 203(e)(2).
A significant benefit of the extension of the Act to government employees was to give them the right to sue for violations of the Act. Under 29 U.S.C. § 216(b)
Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.... An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.
Reading sections 203(e)(2) and 216(b) together, they permit El-Sheikh, as an “individual employed by the Government of the United States ... in a nonappropriated fund instrumentality” to maintain in any “court of competent jurisdiction” “[a]n action to recover” damages “against [his] employer.” For purposes of the Fair Labor Standards Act, El-Sheikh’s employer is “the government of the United States.” See Cosme Nieves, 786 F.2d at 448; see also United States v. Hopkins, 427 U.S. 123, 128, 96 S.Ct. 2508, 49 L.Ed.2d 361 (1976) (“The House and Senate Reports on Pub.L. 91-350 explicitly recognized that *1324employees of nonappropriated-fund activities, when performing their official duties, are employees of the United States.”). Because the Act thus authorizes El-Sheikh to sue his “employer,” the United States, the Act waives the United States’ sovereign immunity from such suits. See Sara-co, 61 F.3d at 865-66 (stating, in a suit by Customs Service employees for overtime, that under the Fair Labor Standards Act, the United States’ “immunity from suit” by its employees “explicitly” “has been waived”); Cosme Nieves, 786 F.2d at 449 (“the FLSA waives the sovereign immunity of the United States to suit by its employees and ... NAFI employees are described in the FLSA as being employed by the United States government”).
Since the statute waives sovereign immunity, the Court of Federal Claims is a “court of competent jurisdiction” under the Fair Labor Standards Act because the Tucker Act gives that court jurisdiction over claims “against the United States” that are “founded ... upon” an “Act of Congress.” See Saraco, 61 F.3d at 865.
The statutory structure also shows that Congress waived sovereign immunity to suits by NAFI employees. In the 1974 amendments, Congress treated employees of NAFIs the same as employees of the other four government entities. The employees in all five categories are viewed as “individuales] employed by the Government of the United States.” There is no question that an employee in one of the four other categories could maintain an action in the Court of Federal Claims against the United States for alleged violation of the Fair Labor Standards Act. See, e.g., Alexander v. United States, 32 F.3d 1571 (Fed.Cir.1994) (suit by Immigration and Naturalization Service agents for overtime). Nothing in either the statutory language or the legislative history indicates, or even suggests, that Congress intended to limit this waiver of sovereign immunity — and the corresponding Tucker Act jurisdiction — to the four categories other than NAFIs.
B. The next question is whether, as the Court of Federal Claims held, the non-appropriated funds doctrine barred it from entertaining El-Sheikh’s suit. Stated differently, does that doctrine create an exception to the Tucker Act jurisdiction created by the waiver of sovereign immunity in the 1974 amendments? We hold that it does not.
The general rule is that the Court of Federal Claims lacks jurisdiction to grant judgment against the United States on a claim against a NAFI because the United States has not assumed the financial obligations of those entities by appropriating funds to them. See Hopkins, 427 U.S. at 127, 96 S.Ct. 2508. The Court of Claims, which created the principle, explained that “[t]he theory has been that, since our judgments are paid only from appropriated funds, in order to be actionable here the transaction sued upon must be one which, in the contemplation of Congress, can obligate public monies. ‘If Congress has indicated that public funds shall not be involved, we cannot grant 'the relief requested.’ ” Interdent Corp. v. United States, 203 Ct.Cl. 296, 488 F.2d 1011, 1013 (1973) (citation omitted) (no jurisdiction over a suit for patent infringement by a NAFI where, unlike the Fair Labor Standards Act, the statute making the United States liable for patent infringement, 28 U.S.C. § 1498(a), did not waive sovereign immunity for infringement by a NAFI). In other words, the court concluded that if the underlying obligation was unfunded, Congress did not intend to waive sovereign immunity from a suit based upon a breach of that obligation.
The doctrine is inapplicable, however, “where Congress has made special provisions,” Cosme Nieves, 786 F.2d at 449 (footnote omitted), or where Congress has otherwise indicated by “special legislation,” Hopkins, 427 U.S. at 127, 96 S.Ct. *13252508. For in that situation, Congress necessarily intended to waive the bar of sovereign immunity.
The waiver of sovereign immunity that Congress provided in extending the Fan-Labor Standards Act to NAFI employees, thereby permitting them to sue the United States as their employer, met this standard, and the non-appropriated funds doctrine is inapplicable here. That waiver reflects a clear Congressional intent to give all five categories of government employees the same right to sue the United States for violations of the Act. To view the non-appropriated funds doctrine as barring NAFI employees from suing the United States would be inconsistent with that intent and would deny to those employees a right that Congress intended to give all the covered government employees.
C. No discussion of this issue would be complete without reference to the 1970 amendment to the Tucker Act relating to contracts of certain NAFIs. That Act gives the Court of Federal Claims jurisdiction over “any claims against the United States founded ... upon any express or implied contract with the United States.” The 1970 amendment added the following sentence:
For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast Guard Exchanges, or Exchange Councils of the National Aeronautics and Space Administration shall be considered an express or implied contracts with the United States.
The latter provision is irrelevant in this case. It deals with contracts of five specific exchanges, which do not include the Bolling Officer’s Club. Moreover, El-Sheikh’s employment with the Club presumably was pursuant to an appointment, not a contract. See Amy & Air Force Exch. Serv. v. Sheehan, 456 U.S. 728, 735-38, 102 S.Ct. 2118, 72 L.Ed.2d 520 (1982).
Nor can it be said that this provision shows that where Congress intended to waive sovereign immunity to permit suits related to NAFI’s, it did so only through the Tucker Act. The 1970 amendment to that Act was intended to overrule Court of Claims decisions that such contracts were not contracts of the United States under that Act, by expanding the court’s jurisdiction to cover breaches of such contracts. See Hopkins, 427 U.S. at 125-26, 96 S.Ct. 2508. The change was made four years before Congress amended the Fair Labor Standards Act to extend its coverage of government employees, including NAFI employees. The 1970 Tucker Act amendment does not affect or undermine our conclusion that in the 1974 amendments to the Fair Labor Standards Act, Congress authorized suits by NAFI employees against the United States based on violations of the latter Act.
At the same time, Congress also amended the Supplemental Appropriation Act, under which Congress appropriated funds to pay judgments against the United States. See Pub.L. No. 91-350, 84 Stat. 449 (1970), reprinted in 1970 U.S.C.C.A.N. 522. The amendment, currently codified at 31 U.S.C. § 1304(c), requires that where “[a] judgment or compromise settlement against the Government [arising out of a contract by one of the specified exchanges] shall be paid ... [t]he [NAFI] making the contract shall reimburse the Government for the amount paid by the Government.” Reimbursement for payment of those contract claims, however, implicates different policy considerations than payment of a judgment for a government employee based on violation of the Fair Labor Standards Act. This provision cannot be interpreted as indicating that if Congress had intended to waive sovereign immunity for the claim here involved, it similarly would *1326have required the NAFI to reimburse the government.
D. The dissent argues that the United States is not liable for the NAFI’s alleged failure to pay El-Sheikh the overtime the Fair Labor Standards Act requires, and that the Court of Federal Claims therefore properly dismissed the suit. It states that “under the FLSA, a NAFI employee has the right to recover unpaid overtime compensation from his employer” (emphasis in original), and apparently concludes that, for purposes of liability under that Act, the “potentially responsible” employer is not the United States but the NAFI. Although the dissent concludes that the Court of Federal Claims lacked jurisdiction, the contention basically relates to the merits (as the dissent suggests), ie., that El-Sheikh has not stated a claim upon which relief may be granted.
That was not the ground, however, on which the Court of Federal Claims dismissed the suit, or on which the United States urged affirmance. The issue was not briefed or argued before us. Of course, we may affirm a judgment of the trial court on any ground supported by the record, whether or not that basis was given by the court or urged by a party. The decision whether to do so, however, lies within our discretion.
We do not think it would be appropriate for us to follow the course the dissent proposes in this case. Whether or not one agrees with the dissent’s position on the merits, we conclude that that issue should not be adjudicated except after full adversary briefing. We decline to decide the question at this stage of the proceedings, and leave its initial resolution to the Court of Federal Claims on the remand we are ordering.
E. It may be, as the First Circuit held in Cosme Nieves, 786 F.2d at 450, as the Court of Federal Claims suggested in this case, and as the dissent urges, that El-Sheikh could maintain an action against the NAFI in the district court for violation of the Fair Labor Standards Act. We need not decide that issue, however, because of our conclusion that the Court of Federal Claims has jurisdiction over El-Sheikh’s identical suit against the United States.
Ill
This case presents the anomalous situation of the government first moving to transfer a case from the district court to the Court of Federal Claims because “the amount in controversy dictates that only” the latter court “has jurisdiction,” and then, after the case has been transferred, moving to dismiss the suit in the Court of Federal Claims for lack of subject matter jurisdiction.
The same problem arose some years ago when, after the government successfully moved a district court to transfer a case to the Court of Claims, it then moved the latter court to dismiss for lack of jurisdiction. To avoid repetition of that unseemly situation, the Department of Justice adopted the practice of requiring United States attorneys to consult with the Department’s main office in Washington before moving to transfer a case for lack of jurisdiction from the district court to the Court of Claims. Perhaps the practice has fallen into disuse or was overlooked in this ease. In any event, hopefully the Department will take appropriate action to avoid a repetition of this unfortunate incident.
CONCLUSION
The judgment of the Court of Federal Claims dismissing the complaint for lack of subject matter jurisdiction is reversed, and the case is remanded to that court for further proceedings consistent with this opinion.

REVERSED AND REMANDED.