Court Opinion

ID: 4013725
Source: CourtListenerOpinion
Date Created: 2016-07-07 15:01:34.124492+00
Date Added: 2024-06-11T14:49:44.601784
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                CLYDE C. GRADY, II,
                  Plaintiff-Appellant

                           v.

                  UNITED STATES,
                  Defendant-Appellee
                ______________________

                      2016-1362
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 1:15-cv-00746-EDK, Judge Elaine Kaplan.
                 ______________________

                 Decided: July 7, 2016
                ______________________

   CLYDE C. GRADY, II, Jacksonville, AR, pro se.

    SARAH CHOI, Commercial Litigation Branch, United
States Department of Justice, Washington, DC, for de-
fendant-appellee. Also represented by BENJAMIN C. MIZER,
ROBERT E. KIRSCHMAN, JR., STEVEN J. GILLINGHAM.
                 ______________________

 Before NEWMAN, MOORE, and O’MALLEY, Circuit Judges.
PER CURIAM.
2                                              GRADY   v. US

    Clyde C. Grady, II appeals a decision from the Court
of Federal Claims dismissing his claim against the United
States Congress for lack of jurisdiction. We affirm the
dismissal of Mr. Grady’s complaint.
                      BACKGROUND
    Between 2:30 and 3:00 p.m. on May 6, 2010, the Dow
Jones Industrial Average (“Dow”) dropped nearly a thou-
sand points. Mr. Grady lost $106,935.62 in investments.
The Securities and Exchange Commission (“SEC”) esti-
mates that collectively, individual investors lost more
than $200 million. An investment tool known as a “stop
loss order,” which was designed to automatically sell
stocks when they fell below certain prices, facilitated
these losses. When the Dow suddenly dropped on May 6,
2010, a market failure coined the “Flash Crash,” stop loss
orders triggered the sale of stocks far below their true
market value.
    On July 16, 2015, Mr. Grady filed a complaint against
the United States Congress for breach of contract. 1 His
complaint alleged that by enacting the Securities Ex-
change Act of 1934, 15 U.S.C. § 78a, et seq. (“1934 Act”)
and subsequent legislation, Congress created a unilateral
or implied-in-fact contract with investors like Mr. Grady.
He alleged that his losses resulted from Congress’ breach
of its obligation under the 1934 Act to ensure the
“maintenance of a fair and orderly” stock market for the
“protection of investors.” The Court of Federal Claims
dismissed Mr. Grady’s complaint for lack of jurisdiction
under the Tucker Act, 28 U.S.C. § 1491(a)(1), concluding
that Mr. Grady had failed to allege the existence of a

    1  Mr. Grady filed a highly similar action against the
SEC in 2013. We, like the Court of Federal Claims,
decline to address whether collateral estoppel bars
Mr. Grady’s instant claim.
GRADY   v. US                                               3

contract between himself and Congress.             Mr. Grady
appeals.      We have jurisdiction under          28 U.S.C.
§ 1295(a)(3).
                        DISCUSSION
    We review the Court of Federal Claims’ decision to
dismiss a case for lack of subject matter jurisdiction de
novo. Brandt v. United States, 710 F.3d 1369, 1373 (Fed.
Cir. 2013). Under the Tucker Act, the Court of Federal
Claims may hear “any claim against the United States
founded either upon the Constitution, or any Act of Con-
gress or any regulation of an executive department, or
upon any express or implied contract with the United
States, or for liquidated or unliquidated damages in cases
not sounding in tort.” 28 U.S.C. § 1491(a)(1). Mr. Grady
relies on the creation of a unilateral or implied-in-fact
contract to provide jurisdiction under the Tucker Act. He
is correct that, on a motion to dismiss under the Court of
Federal Claims Rule 12(b)(1), he does not need to prove
the existence of a unilateral or implied-in-fact contract; he
simply must allege one. But Mr. Grady’s complaint fails
to sufficiently allege the elements of a contract.
     An implied-in-fact contract claim requires allegations
of a specific “meeting of the minds” between an authorized
representative of the United States and the claimant. See
Hercules, Inc. v. United States, 516 U.S. 417, 424 (1996).
Specifically, it requires (1) mutuality of intent to contract;
(2) consideration; (3) an unambiguous offer and ac-
ceptance; and (4) actual authority of the government’s
representative to bind the government in contract. Bar-
rett Ref. Corp. v. United States, 242 F.3d 1055, 1060 (Fed.
Cir. 2001). We agree with the Court of Federal Claims
that Mr. Grady’s complaint fails to allege a “meeting of
the minds” between himself and Congress and therefore
fails to allege an implied-in-fact contract. Mr. Grady
argues that Congress’ conduct in enacting the 1934 Act
and subsequent legislation, aimed at maintaining a fair
4                                                 GRADY   v. US

and orderly stock market for the protection of investors,
evinced Congress’ intent to contract with investors like
Mr. Grady. Conduct of this sort is legally insufficient to
demonstrate intent to contract. The 1934 Act’s objective
of maintaining a fair and orderly stock market simply
expresses a goal of Congress; it does not show congres-
sional intent to be contractually liable for fulfilling that
goal. Instead, Mr. Grady’s allegations more closely re-
semble a contract implied-in-law, being that Congress’
conduct imputed a legal duty to maintain a fair and
orderly stock market. See Grady v. United States, 124
Fed. Cl. 278, 281 (2015) (citing Hercules, 516 U.S. at 424).
Even if that were the case, implied-in-law contracts fall
outside the Tucker Act’s grant of jurisdiction to the Court
of Federal Claims. Hercules, 516 U.S. at 423.
    We also agree with the Court of Federal Claims that
Mr. Grady has failed to allege a unilateral contract.
Mr. Grady argues that Congress created a unilateral
contract by enacting the 1934 Act and subsequent legisla-
tion and assuming its obligation to maintain a fair and
orderly stock market. Congress’ enactment of securities
laws is insufficient to form a unilateral contract. It is well
established that the government’s performance of its
sovereign functions does not give rise to contractual
obligations. See, e.g., D&N Bank v. United States, 331
F.3d 1374, 1378–79 (Fed. Cir. 2003).
                        CONCLUSION
     Because Mr. Grady has not alleged a unilateral or im-
plied-in-fact contract, his claim is not authorized under
the Tucker Act, and the Court of Federal Claims lacks
jurisdiction. The decision of the Court of Federal Claims
is affirmed.
                        AFFIRMED