Court Opinion

ID: 2658394
Source: CourtListenerOpinion
Date Created: 2014-03-28 18:23:01.910612+00
Date Added: 2024-06-11T09:35:05.496857
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA
____________________________________
                                    )
NATIONAL MOTOR FREIGHT              )
TRAFFIC ASSOCIATION, INC., et al.,  )
                                    )
                  Plaintiffs,       )
                                    )
      v.                            )               Civil Action No. 13-0429 (ABJ)
                                    )
GENERAL SERVICES                    )
ADMINISTRATION, et al.,             )
                                    )
                  Defendants.       )
____________________________________)

                                 MEMORANDUM OPINION

       Plaintiffs National Motor Freight Association, Inc. and five of its motor carrier members 1

(collectively, “plaintiffs”) filed suit against defendants General Services Administration (“GSA”)

and Daniel M. Tangherlini, in his official capacity as the Acting Administrator, pursuant to 5

U.S.C. § 701 et seq., arguing that GSA exceeded its statutory authority under 31 U.S.C. § 3726

and 49 U.S.C. § 13710 when it conducted post-payment audits and offset alleged overcharges

against amounts due to some of the plaintiffs under their government contracts. Defendants filed

a motion to dismiss the complaint for lack of subject matter jurisdiction pursuant to Federal Rule

of Civil Procedure 12(b)(1) or, in the alternative, for failure to state a claim pursuant to Rule

12(b)(6). See generally Defs.’ Mot. to Dismiss Compl. (“Defs.’ Mot.”) [Dkt. # 11]. Defendants

also argued that plaintiff New England Motor Freight should be dismissed for lack of standing.

Id. at 27–28. Plaintiffs opposed the motion and argued that the Court should enter judgment on

1      The five motor carrier organizations that appear as individual plaintiffs in this case are
ABF Freight System, Inc.; Tri-State Motor; T.F. Boyle Transportation, Inc.; New England Motor
Freight, Inc.; and YRC Inc.
the pleadings in their favor instead pursuant to Rule 12(c). Pls.’ Resp. in Opp. to Defs.’ Mot. to

Dismiss (“Pls.’ Resp.”) at 4 n.3 [Dkt. # 13]. Since the Court finds that it has concurrent subject

matter jurisdiction in this case, and that plaintiffs have alleged sufficient facts to state plausible

claims, the motion to dismiss will be denied. But because the Court also finds that plaintiff New

England Motor Freight has not alleged the necessary injury in fact, the Court will grant

defendants’ motion to dismiss its claims for lack of standing. The rest of plaintiffs’ claims may

proceed, and the Court will address the merits of the dispute in accordance with the schedule set

forth in the order that accompanies this opinion.

                                         BACKGROUND

   I.      Statutory and Regulatory Background

        Five of the plaintiffs in this case are motor carriers that provide government agencies

with transportation services pursuant to negotiable commercial rates. This case concerns GSA’s

authority to conduct post-payment audits of their bills up to three years after the reviewed

charges have been paid. Defendants argue that 31 U.S.C. § 3726(b), (d) provides it with

authority to conduct those audits. Defs.’ Mot. at 18–19. Plaintiffs maintain that section 3726

does not cover transportation contracts performed at negotiable commercial rates, so any

government review must be conducted pursuant to 49 U.S.C. § 13710, which requires that billing

disputes be raised within 180 days. Pls.’ Resp. at 2.

        A. 31 U.S.C. § 3726 and 41 C.F.R. § 102-118.415 et seq.

        Section 3726 of title 31 of the United States Code governs both pre- and post-payment

audits of bills received by the government for transportation services. 31 U.S.C. § 3726(a), (b)

(2006). Most pertinent to this case is subsection (b), which provides that “[t]he Administrator

[of General Services] may conduct pre- or post-payment audits of transportation bills of any

                                                    2
Federal Agency. The number and types of bills audited shall be based on the Administrator’s

judgment.” Id. § 3726(b). If an audit reveals that the government overpaid for the services

provided, the government may,

               [n]ot later than 3 years (excluding time of war) after the time a bill is paid,
               . . . deduct from an amount subsequently due a carrier or freight forwarder
               an amount paid on the bill that was greater than the rate allowed under—
               (1) a lawful tariff under title 49 or on file with the Secretary of
               Transportation with respect to foreign air transportation . . . , the Federal
               Maritime Commission, or a State transportation Authority; (2) a lawfully
               quoted rate subject to the jurisdiction of the Surface Transportation Board;
               or (3) sections 10721, 13712, and 15504 of title 49 or an equivalent
               arrangement or an exemption.

Id. § 3726(d). If the challenged transportation charges are not billed at a rate specified in one of

the three subsections of section 3726(d), then GSA does not have authority under that section to

withhold overcharges.

       The statute does not detail the procedures that GSA must follow when reviewing agency

transportation bills, and GSA has promulgated regulations establishing an audit procedure and

appeals process. See 41 C.F.R. §§ 102-118.435, 102-118.600, 102-118.625, 102-118.650, 102-

118.655 (2009). It also published questions and answers to provide additional guidance to

government agencies that contract with motor carriers. See generally 41 C.F.R. §§ 102-118.5 et

seq. Most pertinent to this case is section 102-118.435(f), which notes that, if the Audit Division

discovers an overcharge, GSA will “[i]ssue a Notice of Overcharge stating that [the motor

carrier] owes a debt to the agency” and include information regarding “the amount paid, the basis

for the proper charge for the document reference number, and cit[ing] applicable tariff or tender

along with other data relied on to support the overcharge.”            Id. § 102-118.435(f).     The

regulations do not require that the Notice of Overcharge (“NOC”) be sent within a specific time

period. See generally id.

                                                 3
         B. 49 U.S.C. § 13710

         There is another statute with potential application to this case. Section 13710 of title 49

of the U.S. Code governs, among other things, billing disputes between motor carriers and

shippers. 49 U.S.C. § 13710(a)(3) (2006). Specifically, it provides that, “[i]f a shipper seeks to

contest the charges originally billed or additional charges subsequently billed, the shipper may

request that the [Surface Transportation] Board determine whether the charges billed must be

paid.” Id. § 13710(a)(3)(B). The Board then reviews the reasonableness of the charged rates

“under section 13701 . . . based on the record before it.” Id. § 13710(a)(2). A shipper must raise

a challenge to the transportation charges “within 180 days of receipt of the bill,” otherwise its

challenge is time-barred. Id. § 13710(a)(3)(B).

         Although the statute does not specifically define “shipper” or elaborate upon the term, the

statute has been applied to government agencies that contract for transportation services. The

statute defines “motor carrier” as a motor carrier of property, “other than a motor carrier

providing transportation in noncontiguous domestic trade.” Id. § 13710(a)(1), (3)(A).

   II.      Factual and Procedural Background

         Plaintiffs are five individual motor carriers and a trade association comprised of motor

carriers. Compl. ¶¶ 4–9 [Dkt. # 1]. The membership organization, NMFTA, is a nonprofit entity

“whose membership consists of motor carriers of freight and transportation companies operating

in interstate, intrastate, and foreign commerce,” many of which “provide cargo transportation

services for the United States government.” Compl. ¶ 4; see also Compl. ¶ 20. The other five

plaintiffs are “motor carrier member[s] of NMFTA.” Compl. ¶¶ 5–9.              Like most NMFTA

members, all five operate “in interstate commerce throughout the United States and Canada,”

Compl. ¶¶ 5–9, and four of the five motor carrier plaintiffs – ABF Freight, Boyle, Tri-State

                                                  4
Motor, and YRC – devote “[a] significant portion of [their] business [to] the provision of general

cargo transportation services for the United States government.” 2 Compl. ¶¶ 5–6, 8–9.

       Recently, NMFTA members raised concerns with the organization regarding a perceived

increase in the number of GSA “post-payment audits of transportation bills for transportation

services provided to Government shippers.” Compl. ¶ 22. The post-payment audits resulted in

the issuance of thousands of NOCs, which demanded refunds of money “between 2 and 3 years

after the Government was billed for the involved transportation services.” Compl. ¶¶ 22–23.

Specifically, the following overcharge notices were received approximately one to three years

after the government received the transportation bills:

       ABF Freight: In 2009, ABF Freight received 1,483 NOCs, totaling more than $401,000
       in overcharges that it must repay. In 2010, it received 2,662 NOCs, amounting to more
       than $507,000 in repayments. And in 2012, it received 347 NOCs, seeking repayment of
       more than $27,000. Compl. ¶ 24.

       Boyle: In 2010, Boyle received 257 NOCs, totaling about $71,000 in overcharges that it
       must repay. In 2011, it received 255 NOCs, amounting to approximately $186,000 in
       repayments. And in 2012, it received 131 NOCs, seeking repayment of about $121,000.
       Compl. ¶ 25.

       Tri-State Motor: In 2009, Tri-State Motor received 27 NOCs, totaling about $71,000 in
       overcharges that it must repay. In 2010, it received 524 NOCs, amounting to
       approximately $160,000 in repayments. And in 2011, it received 181 NOCs, seeking
       repayment of about $62,000. Compl. ¶ 27. Tri-State Motors also assert that “GSA,
       without explanation, has withdrawn some of these Notices on multiple occasions.”
       Compl. ¶ 27.

       YRC: In 2011, YRC received 2,310 NOCs, totaling about $600,000 in overcharges that
       it must repay. And in 2012, it received 1,310 NOCs, seeking repayment of about
       $418,000. Compl. ¶ 28.

2      The Complaint contains contradictory information about plaintiff New England Motor
Freight. In paragraph 7, it states that a significant portion of New England Motor Freight’s
business is connected to the government, Compl. ¶ 7, but in paragraph 26, it notes that New
England Motor Freight stopped working with the government altogether in the mid-1990s and
now only does business with the government on a “very limited level.” Compl. ¶ 26.
                                                 5
       Plaintiff New England Motor Freight does not allege that it has been audited by the GSA

or that it has received a NOC. Compl. ¶ 26. The complaint only notes that the company stopped

contracting with the government in the mid-1990s because “overcharge and payment issues . . .

made the traffic unprofitable.” Compl. ¶ 26. Moreover, New England Motor Freight states that

it now engages in government transport at “a very limited level,” and that “it has been reluctant

to increase that presence because of concerns regarding possible payment issues, including

overcharge issues arising out of GSA’s post-payment audits.” Compl. ¶ 26.

       On April 4, 2013, plaintiffs filed the instant lawsuit to press their claim that GSA acted

unlawfully in issuing NOCs to ABF Freight, Boyle, Tri-State Motor, and YRC, as well as to

NMFTA’s other members. Count I asserts that GSA acted contrary to law and exceeded its

statutory authority under 31 U.S.C. § 3726 when it invoked the post-payment audit procedures in

that provision to issue overcharge notices to the four motor carriers in this case and other

NMFTA members because the shipments covered by the NOCs involve Government freight

moving at negotiated commercial rates and therefore “do not fall into the categories of freight

still subject to GSA post-payment audits and offset pursuant to [section] 3726.” Compl. ¶¶ 30–

31. In Count II, plaintiffs allege that the overcharge notices were issued contrary to 49 U.S.C. §

13710, which requires a “shipper” to contest a transportation bill within 180 days of the bill’s

receipt. Compl. ¶¶ 32–37. And Count III, pled in the alternative, alleges that, to the extent that

section 3726 does apply in this case, GSA acted unlawfully because the 180 day limit in section

13710 also applies, and GSA did not provide the four plaintiffs notice within that time period.

Compl. ¶¶ 38–43.

       Notably, plaintiffs do not dispute the accuracy of the overcharge notices. Pls.’ Resp. at

15 (“[A]s previously explained, Plaintiffs here are not disagreeing with anything contained in

                                                6
any particular notice of overcharge.”). They only challenge GSA’s authority to “audit . . . bills

for services provided under negotiated commercial rates and . . . the long delayed issuance of

overcharge notices.” Pls.’ Resp. at 15. They request a combination of declaratory and injunctive

relief to prevent GSA from conducting post-payment audits under section 3726 and from issuing

overcharge notices outside the 180 day period set by section 13710 in the future. Compl., Prayer

for Relief, ¶¶ 1–4. They also request that this Court “[o]rder GSA to return funds improperly

deducted from carrier compensation.” Compl., Prayer for Relief, ¶ 5.

       Defendants filed a motion to dismiss plaintiffs’ complaint, arguing that this Court lacks

subject matter jurisdiction and that jurisdiction instead lies with either the Civil Board of

Contract Appeals (“CBCA”) or with the Court of Federal Claims, pursuant to the Tucker Act, 28

U.S.C. § 1491 (2012). Defs.’ Mot. at 12–17. They also argue in the alternative that the

complaint fails to state a claim upon which relief may be granted; according to defendants,

GSA’s authority under section 3726 extends to contracts involving negotiated commercial rates,

and under that section and the accompanying regulations, the agency has up to three years after

payment to issue a Notice of Overcharge and offset the overcharged amount. 3 Id. at 17–27.

Defendants also moved to dismiss plaintiff New England Motor Freight’s claim for lack of

standing; it contends that the carrier has failed to allege an injury in fact or to establish causation

and redressability because it does not allege that it received a NOC or that GSA has deducted

overcharges from its current contracts. Defs.’ Mot. at 27–28.

3       For the same reason, defendants argue that, should this Court determine that it does not
have subject matter jurisdiction over this matter, it should not transfer this case to the Court of
Federal Claims because it would be futile as plaintiff’s failed to state a claim upon which relief
may be granted. Defs.’ Reply Mem. in Supp. of Defs.’ Mot. to Dismiss Compl. (“Defs.’ Reply”)
at 11 n.9 [Dkt. # 15].
                                                  7
                                   STANDARD OF REVIEW

         In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court must

“treat the complaint’s factual allegations as true . . . and must grant plaintiff ‘the benefit of all

inferences that can be derived from the facts alleged.’” Sparrow v. United Air Lines, Inc., 216

F.3d 1111, 1113 (D.C. Cir. 2000), quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir.

1979) (citations omitted); see also Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir.

2011).    Nevertheless, the Court need not accept inferences drawn by the plaintiff if those

inferences are unsupported by facts alleged in the complaint, nor must the Court accept

plaintiff’s legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).

         A.     Subject Matter Jurisdiction

         Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a

preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);

Shekoyan v. Sibley Int’l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002). Federal courts are courts

of limited jurisdiction, and the law presumes that “a cause lies outside this limited jurisdiction.”

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Gen. Motors

Corp. v. EPA, 363 F.3d 442, 448 (D.C. Cir. 2004) (“As a court of limited jurisdiction, we begin,

and end, with an examination of our jurisdiction.”). “[B]ecause subject-matter jurisdiction is ‘an

Art[icle] III as well as a statutory requirement . . . no action of the parties can confer subject-

matter jurisdiction upon a federal court.’” Akinseye v. District of Columbia, 339 F.3d 970, 971

(D.C. Cir. 2003), quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S.

694, 702 (1982).

         When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a

motion to dismiss under Rule 12(b)(6), the court “is not limited to the allegations of the

complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other
                                                 8
grounds, 482 U.S. 64 (1987). Rather, “a court may consider such materials outside the pleadings

as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case.”

Scolaro v. D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000), citing Herbert

v. Nat’l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992); see also Jerome Stevens Pharm., Inc.

v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

       B.      Failure to State a Claim

       “To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted); see also Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the pleaded factual

content “allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the

mere possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the

pleader is entitled to relief.’” Id. at 679, quoting Fed. R. Civ. P. 8(a)(2). A pleading must offer

more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of

action,” id. at 678, quoting Twombly, 550 U.S. at 555, and “the tenet that a court must accept as

true all of the allegations contained in a complaint is inapplicable to legal conclusions,” id. In

ruling upon a motion to dismiss, a court may ordinarily consider only “the facts alleged in the

complaint, documents attached as exhibits or incorporated by reference in the complaint, and

matters about which the Court may take judicial notice.” Gustave-Schmidt v. Chao, 226 F. Supp.

                                                   9
2d 191, 196 (D.D.C. 2002), citing EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621,

624–25 (D.C. Cir. 1997).

                                            ANALYSIS

   I.      The Court has subject matter jurisdiction in this case.

        Subject matter jurisdiction is a necessary predicate to an exercise of this Court’s Article

III power. See Kokkonen, 511 U.S. at 377. It is statutory in nature, and the party seeking federal

judicial review must establish that it has satisfied at least one of the statutory bases. See Lujan,

504 U.S. at 561. Additionally, in cases like this one where the defendant is an agency of the

United States of America, the plaintiff also bears the burden of establishing that the federal

government has waived its sovereign immunity. See Roum v. Bush, 461 F. Supp. 2d 40, 46

(D.D.C. 2006).

        Here, plaintiffs aver that the Court has subject matter jurisdiction over their three count

complaint under 28 U.S.C. § 1331, which provides that “[t]he district courts shall have original

jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United

States,” because they are challenging actions taken by a federal government agency pursuant to

two federal statutes: 31 U.S.C. § 3726 and 49 U.S.C. § 13710. Compl. ¶ 2; Pls.’ Resp. at 10–11

& 11 n.5. In the alternative, they contend that, should this Court determine that this case is

contractual in nature and therefore within the jurisdiction of the Court of Federal Claims

pursuant to the Tucker Act, 28 U.S.C. § 1491, this Court retains concurrent jurisdiction over the

claims under the Little Tucker Act, 28 U.S.C. § 1346(a)(2), because the amount of each disputed

overcharge is “for an amount less than $10,000, usually significantly less.” See Pls.’ Resp. at 14.

Plaintiffs point to section 702 of the APA and to the Little Tucker Act itself to establish a waiver

of sovereign immunity. See id. at 11, 14.

                                                10
       A. The Court does not have federal question subject matter jurisdiction under 28
          U.S.C. § 1331 and 5 U.S.C. § 702 in this case because the Tucker Act applies.

       Although all three counts in plaintiffs’ complaint arise under federal law, 28 U.S.C. §

1331 cannot serve as the basis for the Court’s jurisdiction in this case because when a case is

filed against the United States, there must also be a waiver of sovereign immunity. The APA

often serves as the necessary waiver of sovereign immunity, and it waives that immunity for any

claim brought by an individual who “suffer[ed] legal wrong because of agency action, or [was]

adversely affected or aggrieved by agency action.” 5 U.S.C. § 702. But that waiver is not

unlimited. See 5 U.S.C. §§ 702, 704; Spectrum Leasing Corp. v. United States, 764 F.2d 891,

892–93 (D.C. Cir. 1985); Cartwright Int’l Van Lines, Inc. v. Doan, 525 F. Supp. 2d 187, 194

(D.D.C. 2007) (“While it is true that the APA has ‘broadened the avenues for judicial review of

agency action,’ this Court’s jurisdiction is strictly limited by the terms of the APA itself.”),

quoting Bowen v. Massachusetts, 487 U.S. 879, 891–92 (1988). The waiver of immunity under

the APA does not apply to cases where a party seeks monetary damages, 4 and Congress

expressly “restricted section 702’s waiver of sovereign immunity by stating that nothing in the

APA ‘confers authority to grant relief if any other statute that grants consent to suit expressly or

impliedly forbids the relief which is sought.’” Spectrum, 764 F.2d at 892–93, quoting 5 U.S.C. §

702. Moreover, judicial review of an agency action under the APA is only appropriate when

“there is no other adequate remedy in a court.” 5 U.S.C. § 704.

4       The parties dispute whether the APA’s restriction on suits for monetary damages impacts
jurisdiction in this case. But the Court need not reach that issue because, as discussed more fully
below, this is a case “founded upon a contract” within the meaning of the Tucker Act but the
amount in controversy is less than $10,000, which means this Court can grant monetary relief
pursuant to its concurrent jurisdiction under the Little Tucker Act. See Alaska Airlines, Inc. v.
Johnson, 8 F.3d 791, 797 (Fed. Cir. 1993).
                                                11
       The Tucker Act, 28 U.S.C. § 1491, acts as one of the limitations on section 702’s waiver

of sovereign immunity for cases that are “based on contracts with the federal government.”

Spectrum, 764 F.2d at 893; Megapulse, Inc. v. Lewis, 672 F.2d 959, 967 (D.C. Cir. 1982);

Cartwright, 525 F. Supp. 2d at 194. The Tucker Act also provides a limited waiver of sovereign

immunity, but it vests exclusive jurisdiction over contract-based claims in excess of $10,000

against the federal government in the Court of Federal Claims. 28 U.S.C. §§ 1346(a)(2),

1491(a)(1); Cartwright, 525 F. Supp. 2d at 194. Where “an action against the United States . . .

is at its essence a contract claim,” it “lies within the Tucker Act and . . . a district court has no

power to grant injunctive relief in such a case.” Megapulse, 672 F.2d at 967. The APA does not

permit a plaintiff to circumvent the Tucker Act and the jurisdiction of the Court of Federal

Claims. Spectrum, 764 F.2d at 893; Megapulse, 672 F.2d at 967; Cartwright, 525 F. Supp. 2d at

194.

       Here, defendants argue that this Court lacks subject matter jurisdiction because the APA

does not apply and the case falls within the Tucker Act’s grant of exclusive jurisdiction to the

Court of Federal Claims. Plaintiffs argue that their case does not fall within the ambit of the

Tucker Act because their three claims are not based on a contract within the meaning of that Act,

and second, that even if the claims are based on a contract, the Court of Federal Claims cannot

provide an adequate remedy in this case because it cannot grant declaratory or injunctive relief.

The Court finds that the Tucker Act is implicated, but it need not reach the second question since

it concludes that it has concurrent jurisdiction as well.

       A case is not based on a contract within the meaning of the Tucker Act simply because

the case “requir[es] some reference to or incorporation of a contract.” Megapulse, 672 F.2d at

968. Instead, a court must look to “both . . . the source of the rights upon which the plaintiff

                                                  12
bases its claims, and upon the type of relief sought (or appropriate)” in order to determine if a

claim is one “founded upon” a contract. Cartwright, 525 F. Supp. 2d at 194–95, quoting

Megapulse, 672 F.2d at 959 (internal quotation marks omitted); see also Spectrum, 764 F.2d at

893. In conducting this inquiry, “[c]ourts have not hesitated to look beyond the pleadings of a

case brought in district court to determine if it involves a claim over which the Court of [Federal]

Claims has exclusive jurisdiction.” Megapulse, 672 F.2d at 967.

       In Megapulse, Inc. v. Lewis, the plaintiff filed suit to enjoin the U.S. Coast Guard from

releasing technical data in order to protect the company’s claimed proprietary interests in that

data, and the government disputed the district court’s subject matter jurisdiction. 672 F.2d at

962. The D.C. Circuit concluded that there was subject matter jurisdiction because the case was

not based on a contract. The proprietary interests or rights at issue did not arise out of the

contract; they were created by virtue of the company’s work and research, making them wholly

independent of the contract. Id. at 968–70. The contract’s only relevance to the case arose in

connection with one of the government’s defenses, and therefore, the Megapulse court was

“convinced that Megapulse’s claims against the Government [were] not ‘disguised’ contract

claims.’” Id. at 969.

       But in a later case, Spectrum Leasing Corp. v. United States, the D.C. Circuit affirmed

the district court’s determination that it did not have subject matter jurisdiction either to issue an

order declaring that GSA violated the Debt Collection Act when it returned Spectrum’s invoices

unpaid or to enjoin GSA from withholding the money due under the contract. 764 F.2d at 892–

93. The court found that case to be based on a contract – and therefore within the Tucker Act –

because the right to the money withheld was “created in the first instance by the contract, not by

the Debt Collection Act,” and because Spectrum sought an order compelling the government to

                                                 13
pay money owed in exchange for goods procured under a contract. Id. at 894. Thus, the Court

of Appeals found Spectrum to be distinguishable from Megapulse.

       It also focused on the differences between the remedies being requested in the two cases:

               Unlike Megapulse, in which the plaintiff sought an order enjoining the
               dissemination of information in which it had an extra-contractual
               proprietary interest, Spectrum seeks an order compelling the government
               to pay money owed in exchange for goods procured under an executory
               contract. In other words, Spectrum seeks the classic contractual remedy of
               specific performance.

Spectrum, 764 F.2d at 894.

       Here, plaintiffs’ case is more akin to Spectrum than to Megapulse. As in Spectrum, the

plaintiffs’ rights in this case are contractual in origin. All three counts of the complaint allege

that GSA acted unlawfully when it audited bills submitted to the government pursuant to

transportation contracts, and plaintiffs demand a return of money withheld under other contracts.

They also seek an order prohibiting interference with future payments due for services performed

pursuant to shipping contracts. In other words, plaintiffs’ claims – although couched in terms of

GSA’s authority to conduct post-payment audits – are at bottom a request to be made whole

under a series of government contracts, both right now and in the future. See Compl., Prayer for

Relief, ¶¶ 1–5. Neither section 3726 nor some independent act of plaintiffs establishes the right

to payment from the government; instead, that right arises “only upon creation and satisfaction of

                                                14
[their] contract[s] with the government.” 5 Spectrum, 764 F.2d at 894; see also Cartwright, 525

F. Supp. 2d at 195 (“Plaintiffs’ right to any payment from the government at all, whether in full

as charged, or in a lesser amount reduced by offset, is created in the first instance by their

contracts, not by GSA’s regulations.”).

       Moreover, a review of the complaint reveals that, fundamentally, this is an action for

monetary relief. The complaint is replete with references to money withheld by GSA, Compl. ¶¶

22, 24–28, 31, and in their prayer for relief, plaintiffs explicitly request that this Court “[o]rder

GSA to return funds improperly deducted from carrier compensation.” 6 Id., Prayer for Relief, ¶

5.

       The fact that plaintiffs make other requests does not alter the conclusion that this is a case

based on contract. Although plaintiffs describe their claims in declaratory and injunctive terms,

a plaintiff may not “avoid the jurisdictional (and hence remedial) restrictions of the Tucker Act

by casting its pleadings in terms that would enable a district court to exercise jurisdiction under a

separate statute and enlarged waivers of sovereign immunity, as under the APA.” Megapulse,

672 F.2d at 967. Plaintiffs’ request for declaratory and injunctive relief simply asks this Court to

5       Plaintiffs point to Alaska Airlines, Inc. v. Austin, 801 F. Supp. 760 (D.D.C. 1992), in
support of its argument that its claims are not contractual in nature. But, in addition to being not
binding on this Court, that case provides little guidance on whether plaintiffs’ claims are founded
upon a contract. Unlike in this case, the complaint in Austin included separate counts alleging
unlawful government conduct and claims for monetary relief, and the court conducted its
jurisdictional inquiry in the isolated context of each count without looking behind the pleadings
to see what the case was really about. See 801 F. Supp. at 762–64. The court also made only
limited effort to distinguish precedent that is binding on this district, such as Spectrum and
Megapulse. Id. As a result, this Court respectfully declines to follow Austin on the question of
whether the claims in this case are founded upon a contract.

6      For this reason, the Court rejects plaintiffs’ contention that the thrust of their complaint is
about defining GSA’s power under section 3726, and that it is not about recouping withheld
funds or preventing funds from being withheld in the future. See Pls.’ Resp. at 10–11.

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tell GSA that it may not interfere with plaintiffs’ contractually secured rights to payments in the

future, and they are accompanied by an unequivocal request for what has been withheld in the

past. Although the equitable claims are not a request for monetary “damages” as that term is

typically used, see Bowen, 487 U.S. at 893, the underlying implication of the relief obtained is

the protection of a right to money that is secured by contract. See Cartwright, 525 F. Supp. 2d at

195. Thus, plaintiffs seek “contractual remed[ies]” that would prevent an unlawful interference

with plaintiffs’ contractual rights. See Spectrum, 764 F.2d at 894–95 (finding that Spectrum’s

requested relief was contractual in nature even though the company also requested a declaration

that the government had violated the Debt Collector Act); Cartwright, 525 F. Supp. 2d at 195.

For all these reasons, the Court finds this to be a case that is founded upon a contract within the

meaning of the Tucker Act and that jurisdiction lies in the Court of Federal Claims. 7

       B. This Court has concurrent jurisdiction under the Little Tucker Act.

       A finding that the Tucker Act applies does not end this Court’s jurisdictional inquiry.

Although the Tucker Act provides exclusive jurisdiction to the Court of Federal Claims for

claims of monetary relief against the United States in excess of $10,000, the Little Tucker Act,

28 U.S.C. § 1346 (2012), provides federal district courts with original jurisdiction, concurrent

with the Court of Federal Claims, over any “civil action or claim against the United States, not

exceeding $10,000 in amount, founded . . . upon any express or implied contract with the United

States.” 28 U.S.C. § 1346(a)(2). Consequently, a plaintiff’s contract claim against the United

7       Plaintiffs also challenged the adequacy of the relief available in the Court of Federal
Claims, Pls.’ Resp. at 15–16, but at least one other court in this jurisdiction has found the
remedies available in that court to be adequate. See Cartwright, 525 F. Supp. 2d at 196–97. In
this case, the Court need not reach that question because it will exercise its concurrent
jurisdiction to hear the case.
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States may be heard in federal district court so long as the amount of the claim does not exceed

$10,000. Id.; Wright v. Foreign Serv. Grievance Bd., 503 F. Supp. 2d 163, 179 (D.D.C. 2007).

       Here, the Court finds that plaintiffs’ claims fall well within the $10,000 limit. Although

their complaint alleges that hundreds of thousands of dollars have been improperly withheld

from them by GSA, see Compl. ¶¶ 24–25, 27–28, the Court finds it inappropriate to aggregate

the overcharge assessments when calculating the amount in controversy for purposes of

determining whether there is subject matter jurisdiction in this case. See Austin, 801 F. Supp. at

762 (noting that the airline tickets giving rise to the contested overcharges were individual

contracts and that the amount in controversy should be analyzed by viewing each ticket

independently).

       The contracts at issue here – known as bills of lading – are a series of individual contracts

in which motor carriers agreed to provide transportation services for particular shipments to a

government agency. Pls.’ Notice of Filing in Resp. to Jan. 10, 2014 Minute Order (“Pls.’ Not.”)

at 2–3 [Dkt. # 20]; Decl. of George Thomas, Ex. 1 to Defs.’ Notice of Filing ¶¶ 4–5 [Dkt. # 19-

1]. There is no larger, overarching contract at play: each bill of lading covers a specified

transaction, results in its own invoice, and is the product of an offer of tender, which sets the

price at which the carrier is willing to provide the requested transportation services. Decl. of

David Bennett, Ex. 1 to Pls.’ Not. ¶¶ 3, 6–7 [Dkt. # 20-1]; Decl. of Marc Boyle, Ex. 2 to Pls.’

Not. ¶¶ 3, 6–7 [Dkt. # 20-2]; Decl. of Mark Johnson, Ex. 3 to Pls.’ Not. ¶¶ 3, 6–7 [Dkt. # 20-3];

Decl. of Danny Loe, Ex. 4 to Pls.’ Not. ¶¶ 3, 6–7 [Dkt. # 20-4]. It is those individual contracts

that have been subjected to GSA’s post-payment audit.

       Here, plaintiffs claim to have suffered multiple distinct wrongs connected to individual

contracts, and they have filed suit to recover funds that were withheld from those separate

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contracts. Under these circumstances, it is the Court’s view that the aggregate amount sought in

the complaint is not the appropriate measure for deciding whether there is subject matter

jurisdiction under the Little Tucker Act, and that the Court must look to the amount of

overcharge noticed in connection with each of the audited contracts. Austin, 801 F. Supp. at 762.

As plaintiffs’ supplemental filings make clear, none of the individual overcharges that prompted

this action exceed $10,000. Decl. of Bennett ¶ 9 (noting overcharges between $13.72 and

$995.19); Decl. of Boyle ¶ 9 (noting overcharges between $14.42 and $8,144.46); Decl. of

Johnson ¶ 10 (noting overcharges between $4.94 and $7,025.51; Decl. of Loe ¶ 9 (noting

overcharges of $0.73 and $4,085.89). Consequently, this Court has concurrent jurisdiction with

the Court of Federal Claims over this case under the Little Tucker Act, and it finds that dismissal

for lack of subject matter jurisdiction is therefore unwarranted.

   II.      Plaintiffs’ complaint provides sufficient facts to state a claim upon which relief
            may be granted.

         Defendants also argue that plaintiffs’ complaint should be dismissed for failure to state a

claim under Federal Rule of Civil Procedure 12(b)(6) on the grounds that the facts as alleged

demonstrate that plaintiffs are not entitled to relief as a matter of law. Defs.’ Mot. at 17–27.

Specifically, defendants contend that the complaint demonstrates that plaintiffs’ transportation

services fall within the purview of section 3726, and that GSA lawfully notified plaintiffs of

overcharges within the three year statutory period. Id.

         But this is not a case that can properly be resolved under Rule 12(b)(6). The complaint

states a plausible claim for relief that turns on two questions: first, whether section 3726 applies

to contracts of motor carriers that provide transportation under negotiated rates, and second,

whether Congress intended the time limitations contained in section 13710 to apply to section

3726. Both of these issues present questions of law, and neither can be resolved simply by

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referring to the operative statutes and plaintiffs’ complaint, so Federal Rule of Civil Procedure

56 will provide the proper framework. Defendants’ motion to dismiss pursuant to Rule 12(b)(6)

will therefore be denied without prejudice, and for the same reason, the Court will not grant

plaintiffs’ request that these motions be treated as a motion for judgment on the pleadings. See

Longwood Vill. Rest., Ltd. v. Ashcroft, 157 F. Supp. 2d 61, 66 (D.D.C. 2001) (noting that “[t]he

standard of review for . . . a motion [for judgment on the pleadings] is essentially the same as the

standard for a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6)”).

A schedule for further briefing shall be set out in the order that accompanies this memorandum

opinion.

   III.      Plaintiff New England Motor Freight does not have standing in this case.

          Defendants’ final argument in its motion to dismiss is that plaintiff New England Motor

Freight does not have standing in this case. Defs.’ Mot. at 27–28. Specifically, defendants argue

that New England lacks a cognizable injury because it does not identify any alleged untimely

overcharge notice and instead states only that it has been reluctant to increase the amount of

business it conducts with the government because of the potential that it will receive overcharge

notices in the future. Id., citing Compl. ¶ 26. Defendants also argue that plaintiff New England

Motor Freight cannot establish the causation and redressability prongs of standing. Id. at 28.

The Court agrees.

          To establish constitutional standing, a plaintiff must demonstrate that (1) he has suffered

an “injury-in-fact” that is “concrete and particularized” and “actual or imminent”; (2) the injury

is “fairly traceable” to the challenged action of the defendant; and (3) it is “likely, as opposed to

merely speculative, that the injury will be redressed by a favorable decision.”            Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (internal quotation marks omitted); see also

                                                  19
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180–81 (2000). The party

invoking federal jurisdiction bears the burden of establishing standing. Lujan, 504 U.S. at 561.

          Here, plaintiff New England Motor Freight alleges that it has declined to increase the

amount of business it does with government agencies out of fear that future audits could ruin its

business. Compl. ¶ 26; see also Pls.’ Resp. at 30–31. But plaintiff fails to allege facts that

would show that injury to be concrete and particularized or actual or imminent, and the

company’s concern that it could be issued a notice of overcharge is merely speculative at this

time. 8 The fact that plaintiff has engaged in some business with the government over the last

four years and has not yet received a notice of overcharge at the time this case was filed only

strengthens that conclusion. The Court finds that plaintiff New England Motor Freight has not

established that it has suffered a cognizable injury and it therefore does not have standing in this

case. 9

8       For this reason, plaintiffs’ reliance on North Carolina Right to Life Committee Fund for
Independent Political Expenditures v. Leake, 524 F.3d 427 (4th Cir. 2008), is misplaced. That
case dealt with a challenge to North Carolina’s campaign financing law that provided matching
funds to a participating candidate when his or her opponent spent more than the amount specified
in the statute. Id. at 433. Although certain plaintiffs had not actually made payments to political
candidates for fear of triggering the matching funds provision, the court found that they
nonetheless had suffered an injury in fact because “‘conditional statements’ of intent, which
allege that a plaintiff would engage in a course of conduct but for the defendants’ allegedly
illegal action, may be sufficient” to establish the injury prong of standing. Id. at 435. But that
case is distinguishable from the instant case: If the plaintiffs in Leake had funded political
candidates as they intended, the matching funds provision would have automatically been
triggered and their injury would be concrete. But here, one cannot be certain that overcharge
notices and withholdings would necessarily flow from New England’s decision to engage in
government contracting.

9      Because a plaintiff must establish all three prongs of standing to avoid dismissal on that
ground, the Court need to address whether plaintiff New England Motor Freight can satisfy the
second two prongs of the standing inquiry. See Lujan, 504 U.S. at 560–61.
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                                         CONCLUSION

       For the reasons stated above, the Court finds that it has concurrent jurisdiction over this

case pursuant to the Little Tucker Act and that plaintiffs’ complaint states a plausible claim for

relief with respect to GSA’s post-payment audits. Additionally, the Court finds that plaintiff

New England Motor Freight does not have standing in this case, and its claim will be dismissed.

The Court will therefore grant in part and deny in part defendants’ motion to dismiss.

       Furthermore, as the dispute in this case turns on questions of law and statutory

interpretation, the Court’s order accompanying this opinion will set a schedule for the filing of

summary judgment motions. The parties may choose to rely upon the memoranda of points and

authorities that have already been filed in support of those motions. A separate order will issue.

                                             AMY BERMAN JACKSON
                                             United States District Judge

DATE: March 12, 2014

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