Court Opinion

ID: 9492185
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:34:22.196248+00
Date Added: 2024-06-11T17:55:09.827749
License: Public Domain

*1327PLAGER, Circuit Judge,
dissenting.
I respectfully dissent. Though phrased in terms of subject matter jurisdiction, the dispositive issue in this case is, who is the employer potentially responsible for Mr. El-Sheikh’s wages claim? Mr. El-Sheikh was employed by a NAFI, the Bolling Officers’ Club. NAFI’s are not general agencies of the United States Government; the United States Government is not liable for the wage obligations of NAFIs, except in those limited circumstances Congress has declared, of which this is not one. The Tucker Act jurisdiction of the Court of Federal Claims extends only to claims against the United States. Mr. El-Sheikh’s claim is against his employer, the Bolling Officers’ Club, not the United States. The Court of Federal Claims properly dismissed the suit; it should have been transferred back to the district court where it belongs.
A.
The question in this case comes down to whether the Tucker Act — the basic jurisdiction-granting statute for the Court of Federal Claims — provides jurisdiction over a claim against a NAFI based on a violation of the FLSA. Since the Tucker Act is a grant of jurisdiction over the United States as defendant, the answer to that question in turn depends on whether the United States Government is liable for the obligations of the NAFI incurred in the ordinary course of the NAFI’s business.
In Standard Oil Co. v. Johnson, 316 U.S. 481, 486, 62 S.Ct. 1168, 86 L.Ed. 1611 (1942), the Supreme Court opined that, with regard to NAFIs, absent special legislation, the “government assumes none of the financial obligations of the [NAFI].” This observation led to a series of decisions by our predecessor court, the Court of Claims, to the effect that it lacked jurisdiction over claims concerning the activities of NAFIs. See, e.g., Kyer v. United States, 177 Ct.Cl. 747, 369 F.2d 714 (Ct.Cl.1966); Pulaski Cab Co. v. United States, 141 Ct.Cl. 160, 157 F.Supp. 955 (Ct.Cl. 1958). This conclusion is based on the theory that a suit against a NAFI is not a suit against the United States since the Government has assumed no liability for the financial obligations of the NAFI. Thus, without a “claim against the United States,” there is no Tucker Act jurisdiction. See Army & Air Force Exch. Serv. v. Sheehan, 456 U.S. 728, 734, 102 S.Ct. 2118, 72 L.Ed.2d 520 (1982); United States v. Hopkins, 427 U.S. 123, 125, 96 S.Ct. 2508, 49 L.Ed.2d 361 (1976).
As the Supreme Court noted in Hopkins, the Court of Claims had recognized that the limited jurisdictional reach of the Tucker Act with respect to NAFIs created a potential unfairness for persons who contracted with NAFIs, since they could find themselves with no forum for a contract-based dispute with a NAFI. 427 U.S. at 125, 96 S.Ct. 2508. The Court further noted that the Court of Claims acknowledged that the remedy, if there were to be one, lay with Congress. See id. (quoting Keetz v. United States, 168 Ct.Cl. 205, 207 (1964)).
In 1970, Congress addressed this seeming inequity, and provided a federal forum for persons who contract with NAFIs in which the described NAFIs could be sued. See Act of July 23, 1970, Pub.L. No. 91-350, 84 Stat. 449. The Tucker Act was amended to provide jurisdiction over actions involving “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 Aeronautic and Space Administration.” 28 U.S.C. § 1491(a)(1); see also id. § 1346(a)(2).
The Supreme Court, as well as the predecessor to this court, have construed narrowly this 1970 amendment. In Hopkins, *1328the Supreme Court determined that if an employee of a NAFI had an “employment contract” with the NAFI then the Tucker Act gave jurisdiction over a wage claim filed by the employee, but if the employee were “appointed” to his position, the Act would not apply. See 427 U.S. at 126,129-30, 96 S.Ct. 2508. “This statute deals with those who have a contractual relationship with military exchanges rather than with different classes of federal employees.” Id. at 126, 96 S.Ct. 2508; see also Interdent Corp. v. United States, 203 Ct.Cl. 296, 488 F.2d 1011, 1013-14 (Ct.Cl.1973) (noting that Congress was selective both with respect to the NAFIs chosen and “as regards the types of claim to be included under § 1491”). Consistent with Hopkins, the Supreme Court has held that the Tucker Act failed to confer jurisdiction over a plaintiffs claim for money damages because he was an appointed rather than a contractual employee, and because no contract could be implied based on personnel regulations that were not money-mandating. See Sheehan, 456 U.S. at 741, 96 S.Ct. 2508.
Thus, there appears to be little doubt that the Court of Federal Claims does not have jurisdiction over this wages claim under the Tucker Act. For one, the Bolling Officers’ Club is excluded from the NAFIs listed in the Tucker Act. See 28 U.S.C. § 1491(a)(1); cf. McDonald’s Corp. v. United States, 926 F.2d 1126, 1132-33 (Fed.Cir.1991). For another, Mr. El-Sheikh’s claim is not contractually based because his complaint alleges a statutory violation rather than a breach of contract, and because he was an appointed rather than a contract employee of the Club, see Sheehan, 456 U.S. at 735-38, 102 S.Ct. 2118.
The fact that NAFIs have been made generally subject to the requirements of the FLSA does not change this at all. Employees under the FLSA have a right of action against their employers for unpaid overtime compensation, and an additional equal amount as liquidated damages. See 29 U.S.C. § 216(b) (1994). Section 216(b) specifically makes “[a]ny employer who violates the provisions of section 206 or section 207 or this title ... liable to the employee.”
The FLSA includes in its definition of “employee” “any individual employed by the Government of the United States ... in a nonappropriated fund instrumentality under the jurisdiction of the Armed Forces.” 29 U.S.C. § 203(e)(2)(A)(iv) (1994). Thus under the FLSA an employee has the right to recover unpaid overtime compensation from his employer, and this includes an employer who is a private company, a NAFI, or the Government itself. See Saraco v. United States, 61 F.3d 863, 865 (Fed.Cir.1995) (noting that § 216(b) confers the right to recover money from the United States when it is the employer and serves as a waiver of sovereign immunity (citing Zumerling v. Devine, 769 F.2d 745, 749 (Fed.Cir.1985))).
The FLSA further provides that an “[ajction to recover such liability may be maintained in any court of competent jurisdiction,” 29 U.S.C. § 216(b) (1994). This court has held that “the words ‘of competent jurisdiction’ [in § 216(b) ] tell us that the words do not stand alone but require one to look elsewhere to find out what court, if any, has jurisdiction.” Zumerling, 769 F.2d at 749; accord, Saraco, 61 F.3d at 865-66.
Mr. El-Sheikh’s argument that the FLSA is somehow jurisdiction-granting is, under our precedents, without merit. Final judgments rendered by the Court of Federal Claims “shall be paid out of any general appropriation therefor,” 28 U.S.C. § 2517(a) (1994); see also Hopkins, 427 U.S. at 127, 96 S.Ct. 2508; L’Enfant Plaza Properties, Inc. v. United States, 229 Ct. Cl. 278, 668 F.2d 1211, 1212 (Ct.C1.1982). Thus, jurisdiction can only be exercised over cases in which appropriated funds can be obligated. See, e.g., Interdent Corp. v. *1329United States, 203 Ct.Cl. 296, 488 F.2d 1011, 1013 (Ct.C1.1973); Kyer v. United States, 177 Ct.Cl. 747, 369 F.2d 714, 718 (Ct.C1.1966).
There is a general appropriations statute which authorizes “[njecessary amounts” to pay final judgments when “payment is not otherwise provided for.” 31 U.S.C. § 1304(a)(1) (1994). This presumably would be the authority for the Government to pay a judgment rendered against it as a result of a contract claim involving one of the statutorily listed NAF-Is. But section 1304 contains a specific limitation with regard to judgments against the Government arising out of express or implied contracts made by the NAFIs listed in § 1491. See id. § 1304(c)(1) (1994). In this situation, “[t]he Exchange making the contract shall reimburse the Government for the amount paid by the Government.” See id. § 1304(c)(2) (1994).
No similar payback provision exists for judgments against unlisted NAFIs, which tells me that Congress did not intend for appropriated funds to be used for non-exchange NAFIs such as the Bolling Officers’ Club, leaving the Treasury to pay the bill. Because a judgment in his favor cannot be paid out of appropriated funds, I conclude that Mr. El-Sheikh cannot hold the Government liable for any unpaid overtime wages due. One way to describe this would be to say that Mr. El-Sheikh has failed to state a claim upon which the Court of Federal Claims could grant relief, but it has become customary to describe these matters as a lack of jurisdiction.
The majority suggests that the Court of Federal Claims must take jurisdiction over Mr. El-Sheikh’s claim, and sort out the question of who is the proper defendant as a merits question. Under many circumstances it makes sense for a court to take jurisdiction over a cause based on well-pleaded allegations, even when there is a serious question as to whether those factual allegations are provable. Here though, there are no well-pleaded allegations on which jurisdiction can be based. I do not believe that in the FLSA Congress intended to make the United States Government liable for the wages of every employee of every NAFI; the Government’s liability under the FLSA is only to persons who are otherwise Government employees. Thus, when Mr. El-Sheikh names the United States Government as the defendant in his wages claim, his factual allegations establish that he has the wrong defendant. In the Court of Federal Claims that is jurisdictional; the court properly dismissed the claim.
B.
Although I would find that the Court of Federal Claims properly concluded that it lacked jurisdiction over Mr. El-Sheikh’s claim, I disagree with Mr. El-Sheikh’s argument that he is left without a forum for his complaint. This case bears a striking resemblance to a 1986 case decided by the First Circuit, Cosme Nieves v. Deshler, 786 F.2d 445 (1st Cir.1986). In that case, employees of an officers’ mess, a NAFI but not one of the listed exchanges, brought suit for failure to have paid proper wages and overtime against the NAFI, seeking back pay and damages under the FLSA.
The original suit named the NAFI as the defendant, and was filed in the local court; the suit was removed to federal court at the instance of the defendant. Subsequently, the district court dismissed the case for lack of jurisdiction and for failure to state a claim on which relief could be granted. See Cosme Nieves, 786 F.2d at 447. The court reasoned that the proper defendant was the United States and that, since the claims were for more than $10,000, jurisdiction was under the Tucker Act and exclusively in the U.S. Claims Court. See id.
The defendant, the military base that operated the NAFI, was initially repre*1330sented by the Army Judge Advocate General, and on appeal urged the First Circuit to affirm the district court’s ruling. The Army also argued that the appeal properly lay in the Federal Circuit, and not in the First Circuit. The First Circuit panel, apparently somewhat familiar with the law regarding “these arcane jurisdictional issues,” Cosme Nieves, 786 F.2d at 447, was in doubt as to whether the Army reflected the considered views of the United States, and requested the Department of Justice to file a supplemental brief.
The Attorney General’s brief conceded, as the plaintiffs had argued, that the proper defendant was the NAFI, not the United States, and that the district court rather than the Claims Court had jurisdiction over the suit. See Supplemental Brief for the United States at 3, 11, 13-14, Cosme Nieves v. Deshler, 786 F.2d 445 (1st Cir.1986) (No. 85-1095). The Attorney General went on to pronounce that, if the case were transferred to the Claims Court, the Government would take the position that that court was without jurisdiction over the cause. See id. at 11 n. 8.
In a thorough and insightful opinion written by Chief Judge Levin Campbell, the First Circuit analyzed for itself the relevant law, and concluded that the Attorney General was correct. See Cosme Nieves, 786 F.2d at 447-48, 449. NAFIs constitute “a special breed of federal instrumentality, which cannot be fully analogized to the typical federal agency supported by appropriated funds.” Id. at 448. Congress has indicated its intention that no appropriated funds be used to support NAFI activities, and thus their “nonap-propriated” funds constitute a separate fund, subject to claims directly against them, and distinct from claims against the United States and the public fisc. That Congress, in the FLSA, has waived the sovereign immunity of federal agencies, including affected NAFIs, making them subject to suit by their employees, does not alter that fact. See id. at 450; Saraco, 61 F.3d at 865; Zumerling, 769 F.2d at 749.
Once again, as in the First Circuit’s ease, the Government here on appeal abandoned its earlier position. During oral argument, the Government conceded that it erred in arguing for removal to the Court of Federal Claims and admitted that the transfer had been improvidently granted. The Government-created problem is the same; the result should be the same. I would hold, as did the First Circuit, that it was error for the district court to dismiss on the supposed ground that Mr. El-Sheikh was obliged to bring this action in the Court of Federal Claims (formerly the Claims Court) against the United States.
An appellate court must always satisfy itself “not only of its own jurisdiction, but also that of the lower courts in a cause under review.” Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338 (1934). Because I find that the Court of Federal Claims could not have exercised jurisdiction over this case, and because lack of subject matter jurisdiction cannot be waived by the parties, see Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982), I conclude that the transfer from the district court was improper. See 28 U.S.C. § 1631 (1994) (allowing transfer “in the interest of justice” from a court lacking jurisdiction to one in which the “action or appeal could have been brought at the time it was filed or noticed”). It would appear that the district court in which Mr. El-Sheikh filed his claim has jurisdiction over his case under 28 U.S.C. § 1331 (1994), as a civil action arising under a law of the United States, and since there is no jurisdiction under the Tucker Act, it does not stand as a bar to the exercise of jurisdiction by that court.
In my view, the judgment of the Court of Federal Claims dismissing the case *1331should be affirmed, and the case should be remanded to the Court of Federal Claims with instructions to retransfer the case back to the U.S. District Court for the District of Columbia so Mr. El-Sheikh’s claim may be heard on the merits.