Court Opinion

ID: 9487837
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:27:38.98321+00
Date Added: 2024-06-11T17:52:30.444061
License: Public Domain

SCHALL, Circuit Judge,
dissenting.
The United States has not filed a proof of claim in this bankruptcy proceeding. Neither does Quality have a substantive right enforceable against the United States that arises from the Bankruptcy Code.1 The issue, therefore, is whether the district court, sitting in bankruptcy, has jurisdiction concurrent with the Court of Federal Claims to hear Quality’s claim, where the claim does not come within the terms of the waiver of sovereign immunity provision of the Bankruptcy Code, 11 U.S.C. § 106,2 and where the Tucker Act, 28 U.S.C. § 1491(a)(1) (1988), in conjunction with § 10(a)(1) of the Contract Disputes Act of 1978 (CDA), 41 U.S.C. § 609(a)(1) (Supp.IV 1992), grants jurisdiction to the Court of Federal Claims to adjudicate the claim. The majority answers in the affirmative. I respectfully dissent.
The majority agrees with Quality’s argument that the Tucker Act’s “waiver of sovereign immunity extends to any court with jurisdiction over a suit on a government contract, in this case the bankruptcy court.” Majority op. at 1575. It is true that the Tucker Act contains both a grant of jurisdiction and a waiver of sovereign immunity. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983).3 I do not believe, however, that that waiver is enough to give the district court jurisdiction over Quality’s CDA claim. I reach this conclusion based upon principles of sovereign immunity and statutory construction.
I
“[T]he traditional principle [is] that the Government’s consent to be sued must be construed strictly in favor of the sovereign, ... and not enlarge[d] ... beyond what the language [of the statute] requires.... ” United States v. Nordic Village, Inc., 503 U.S. 30, 32-36, 112 S.Ct. 1011, 1014-15, 117 L.Ed.2d 181 (1992) (quoted sources omitted). Thus, a waiver must be “unequivocally expressed” in the statute. Id. at 33, 112 S.Ct. at 1014 (quoting Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95, 111 S.Ct. 453, 457, 112 L.Ed.2d 435 (1990) (quoting United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351-52, 63 L.Ed.2d 607 (1980), and United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502-03, 23 L.Ed.2d 52 (1969))). This is a rule of statutory construction, 503 U.S. at 34-36, 112 S.Ct. at 1015, which guides not only the courts, but also Congress. I agree with the majority that Nordic Village is not controlling on the narrow issue before this court; nevertheless, it sets forth the guiding principles upon which this case should be decided.
The concept of a waiver of sovereign immunity being forum specific is not new. In Minnesota v. United States, 305 U.S. 382, 59 5.Ct. 292, 83 L.Ed. 235 (1939), the Supreme Court addressed the issue of whether the courts of the State of Minnesota had jurisdiction over a condemnation proceeding involving Indian lands, when the United States was an indispensable party defendant. Minnesota’s substantive right to obtain a judgment against the United States arose from a statute which provided: “[L]ands allotted in sev-eralty to Indians [in which the United States had an interest] may be condemned for any public purpose under the laws of the State or Territory where located in the same manner as land owned in fee may be condemned, and *1582the money awarded as damages shall be paid to the allottee.” Act of March 3, 1901, ch. 832, § 3, 31 Stat. 1058, 1083-84. Although the Court was of the opinion that this “authorization to condemn confer[red] by implication permission to sue the United States,” 305 U.S. at 388, 59 S.Ct. at 295, it rejected the State’s argument that the permission extended to suits in Minnesota state courts, id. at 389-90, 59 S.Ct. at 295-96. Instead, it held that the waiver of sovereign immunity was limited to suit in federal district court. Id. at 389, 59 S.Ct. at 295-96. The Court stated that “it rests with Congress to determine not only whether the United States may be sued, but in what courts the suit may be brought,” id. at 388, 59 S.Ct. at 295, and it pointed out that the statute at issue related to Indian lands under trust allotments and that the judicial determination of controversies concerning such lands “ha[d] been commonly committed exclusively to federal courts,” id. at 389, 59 S.Ct. at 295-96 (footnote omitted).
The Supreme Court had occasion to consider the waiver of sovereign immunity issue again in United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888 (1940). In that case, the United States filed in Michigan probate court a judgment it had obtained in federal court against the administrator of a decedent’s estate for damages arising from an act of conversion by the decedent. The probate court allowed the claim and denied an attempt by the administrator to set-off against the judgment in favor of the United States a judgment against the decedent for which the United States had assumed liability. On appeal, the county circuit court held that the set-off was proper to the extent of extinguishing the claim of the United States. That decision was affirmed on appeal by the Michigan Supreme Court and the case was remanded to the probate court for further proceedings. In re McLouth’s Estate, 281 Mich. 191, 274 N.W. 759, 766 (1987). On remand, the administrator of the estate petitioned the probate court to allow, as a claim in favor of the estate, the amount by which the judgment for which the United States had assumed liability exceeded the judgment in favor of the United States. The probate court granted the petition and allowed the claim, and the decision was affirmed by the county circuit court. On appeal, the Michigan Supreme Court also affirmed. In re McLouth’s Estate, 290 Mich. 311, 287 N.W. 477, 484 (1939). In so doing, the court rejected the argument of the United States that the probate court lacked jurisdiction to enter an affirmative money judgment against it. The basis for this argument was the contention that the United States could not be sued without the express consent of Congress and that such consents were jurisdictional and were to be strictly construed. Id. 287 N.W. at 481-83.
The Supreme Court granted certiorari. The Court framed the issue before it as follows:
Whether that jurisdiction [jurisdiction in the probate court with respect to an affirmative claim against the United States] exists depends upon the effect of the voluntary submission to the Michigan court by the United States of its claim against the estate. As a foundation for the examination of that question we may lay the postulate that without specific statutory consent, no suit may be brought against the United States. No officer by his action can confer jurisdiction. Even when suits are authorized they must be brought only in designated courts.
309 U.S. at 500-01, 60 S.Ct. at 661 (footnotes omitted). The Court pointed out that, by statute, cross-claims against the United States, up to the amount of the government’s claim, were allowed in cases where the government voluntarily sued. Id. at 501, 60 S.Ct. at 661. It also pointed out that “[specially designated claims against the United States may be sued upon in the Court of Claims or the district courts under the Tucker Act.” Id. (footnote omitted). The Court stated, however, that it was not its “right to extend the waiver of sovereign immunity more broadly than has been directed by the Congress.” Id. at 502, 60 S.Ct. at 662. It concluded: “Against the background of complete immunity we find no Congressional action modifying the immunity rule in favor of cross-actions beyond the amount necessary as a set-off.” Id. Accordingly, the Court reversed the decision of the Michigan Su*1583preme Court. See also Hahn v. United States, 757 F.2d 581, 586 (3d Cir.1985) (“It is uniformly held that, for claims exceeding $10,000, the Tucker Act vests exclusive jurisdiction in the Claims Court ... even if such claims could be brought within the terms of some other jurisdictional grant, such as 28 U.S.C. § 1331_ This is because it is only under the terms of the Tucker Act that the United States waives its sovereign immunity to such claims, and this consent to suit is a jurisdictional prerequisite.” (emphasis in original)); In re Prudential Lines, Inc. (Prudential Lines, Inc. v. United States Maritime Admin.), 79 B.R. 167, 182 (Bankr.S.D.N.Y.1987) (“The Tucker Act’s waiver of sovereign immunity is inextricably tied to its jurisdictional terms.”).
While it is true that the doctrine of sovereign immunity has its critics, see, e.g., Nordic Village, 503 U.S. at 42-46, 112 S.Ct. at 1019-21 (Stevens, J., dissenting), the doctrine still stands. Within this context, I believe that we must continue to follow the principle that the government’s consent to be sued “must be construed strictly in favor of the sovereign, ... and not enlarge[d] ... beyond what the language [of the statute] requires,” Nordic Village, 503 U.S. at 34, 112 S.Ct. at 1015, and the rule that flows from that principle— that “when suits are authorized they must be brought only in designated courts,” Shaw, 309 U.S. at 501, 60 S.Ct. at 661.4 Aceordingly, I believe that we may hold that the district court has jurisdiction in this case only if we are able to conclude that Congress has so provided by statute. For the following reasons, I am unable to reach that conclusion.
II
Congress has specifically limited the government’s exposure to suit in bankruptcy court to the express waivers of immunity contained in 11 U.S.C. § 106. Section 106 effects waivers in three situations. First, as was clarified in the Bankruptcy Reform Act of 1994, § 106(a) waives sovereign immunity where the substantive authority for the cause of action arises from the Bankruptcy Code itself.5 Second, § 106(b) waives sovereign immunity for compulsory counterclaims against government claims.6 Third, § 106(c) waives sovereign immunity for permissive counterclaims capped by a set-off limitation.7
Nowhere in the Bankruptcy Code does one find the language which I believe is necessary in order for one to conclude that Congress has conferred upon the district courts jurisdiction over a contractor’s CDA claim when the government has not asserted a claim in the bankruptcy proceeding. In this regard, the enactment of the 1994 Act is *1584significant. When Congress enacts legislation, it is presumed to know the pertinent law. See Cannon v. University of Chicago, 441 U.S. 677, 699, 99 S.Ct. 1946, 1958, 60 L.Ed.2d 560 (1979) (“[I]t is not only appropriate but also realistic to presume that Congress was thoroughly familiar with these unusually important precedents [regarding implied private rights of action] and that it expected its enactment to be interpreted in conformity with them.”). That means that, when it enacted the amendments to § 106 cited above, Congress is presumed to have known the law relating to sovereign immunity, including the principle that waivers of sovereign immunity are to be strictly construed in favor of the government and not enlarged beyond statutory terms. See H.R.Rep. No. 835, 103d Cong., 2d Sess. 42 (1994) U.S.C.C.A.N. pp. 3350, 3351 (“This amendment [to 11 U.S.C. § 106] expressly provides for a waiver of sovereign immuni-ty_” (emphasis added)). Under these circumstances, I am constrained to conclude that, by not going beyond the point it did in amending § 106, Congress evinced an intent not to confer upon the district courts jurisdiction to adjudicate claims like Quality’s. See United States v. International Business Machs. Corp., 892 F.2d 1006, 1009 (Fed.Cir.1989) (“Had Congress intended to make the exemptions permanent, it knew how; it could and we believe would have used words of futurity....”).
Ill
The majority states that “[t]he Tucker Act waives the government’s immunity from suit on its contracts in any court to which congress grants jurisdiction to hear the claim.” Majority op. at 1575-76. Most respectfully, I disagree for two reasons. First, it seems to me that it is in the language of the Bankruptcy Code that we must find the required waiver of sovereign immunity. As just discussed, I am unable to find such a waiver. In addition, I do not believe that the eases upon which the majority relies support its position. In United States v. Mitchell, 463 U.S. at 212, 103 S.Ct. at 2965, the suit against the government was brought in the forum specified in the statute that effected the waiver of sovereign immunity (Tucker Act ease, brought in the Court of Claims), while Franchise Tax Board of California v. United States Postal Service, 467 U.S. 512, 515, 104 S.Ct. 2549, 2551, 81 L.Ed.2d 446 (1984), and Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 392, 59 S.Ct. 516, 519, 83 L.Ed. 784 (1939), both involved “sue and be sued” clauses that did not limit where the federal government entity could be sued. I do not believe that, in the face of the law of sovereign immunity and the absence of necessary language in the Bankruptcy Code, these eases are adequate to the task of carrying one from Point A (the forum-specific waiver of sovereign immunity in the Tucker Act) to Point B (the conclusion that the district court has concurrent jurisdiction with the Court of Federal Claims over Quality’s CDA claim).
Finally, I believe that one additional point should be noted. In my view, the implications inherent in the majority opinion are also pertinent in seeking to determine whether Congress intended the waiver of sovereign immunity which the majority has found. It seems to me that the conclusion which flows logically from the majority opinion is that, in bankruptcy eases with facts similar to those here, the district courts have concurrent jurisdiction with the Court of Federal Claims over the kinds of claims that are traditionally brought in that court; for example, claims involving an alleged taking of property by the government in violation of the Fifth Amendment of the Constitution, see, e.g., United States v. Causby, 328 U.S. 256, 267, 66 S.Ct. 1062, 1068-69, 90 L.Ed. 1206 (1946); military pay claims, see, e.g., Matias v. United States, 923 F.2d 821, 823 (Fed.Cir.1990); and claims asserting an entitlement to money under a federal statute or regulation, see, e.g., Rogers v. Ink, 766 F.2d 430, 436 (10th Cir.1985) (directing the transfer of a claim of statutory entitlement to federal funds to the United States Claims Court), cert. denied following post-transfer adjudication, 490 U.S. 1034, 109 S.Ct. 1930, 104 L.Ed.2d 403 (1989). When the amount in controversy has exceeded $10,000, pursuant to the Tucker Act, such cases have come under the exclusive jurisdiction of the Court of Federal Claims or its predecessors. Congress certainly could change all this, but the change *1585would be radical. For this reason, I believe that before we effectively hold that there has been such a change, we must find clear and unambiguous language. I am unable to find such language.
IV
For the foregoing reasons, I would hold that the United States District Court for the Northern District of Alabama lacks jurisdiction in this matter. Accordingly, I would reverse the decision below and transfer the case to the Court of Federal Claims.

. Quality's claim is not, for example, a claim under 11 U.S.C. § 549(a), seeking to avoid an unauthorized, post-petition transfer of funds from the estate in bankruptcy to the government.

. Congress amended § 106 in the Bankruptcy Reform Act of 1994, Pub.L. No. 103-394, § 113, 108 Stat. 4106, 4117-18. Unless otherwise noted, references to § 106 .are to the section as amended by the 1994 Act.

. The CDA also contains a waiver of sovereign immunity. Cosmic Constr. Co. v. United States, 697 F.2d 1389, 1390 (Fed.Cir.1982).

. This court has stated that "waivers of sovereign immunity are to be construed in favor of the government," M.A. Mortenson Co. v. United States, 996 F.2d 1177, 1180 (Fed.Cir.1993), and that “great care must be taken not to expand liability [of the United States] beyond that which was explicitly consented to by Congress.” Fidelity Constr. Co. v. United States, 700 F.2d 1379, 1387 (Fed.Cir.), cert. denied, 464 U.S. 826, 104 S.Ct. 97, 78 L.Ed.2d 103 (1983).

. In this regard, the 1994 Act changed the statute so as to compel a result different from the one reached in Nordic Village. In that case, the bankruptcy trustee commenced an action against the United States, contending that an unauthorized, post-petition transfer of funds from the estate to the government could be avoided under 11 U.S.C. § 549(a) and the funds recovered from the government under 11 U.S.C. § 550(a). 503 U.S. at 30-32, 112 S.Ct. at 1013. The Court, however, held that 11 U.S.C. § 106(c) (1988) did not unambiguously waive the government's sovereign immunity from the trustee’s claim. 112 S.Ct. at 1015-16. In the 1994 Act, § 106(c) was recodified at § 106(a) and was amended to provide unambiguously that “sovereign immunity is abrogated as to a governmental unit ... with respect to ... Sections ... 549, 550 ... of this title.” 11 U.S.C. § 106(a)(1); see also H.R.Rep. No. 835, 103d Cong., 2d Sess. 42 (1994) U.S.C.C.A.N. pp. 3350, 3351 (“This section would effectively overrule two Supreme Court cases", one of which was Nordic Village.).

. Section 106(b) provides that "[a] governmental unit that has filed a proof of claim in the case is deemed to have waived sovereign immunity with respect to a claim against such governmental unit that is property of the estate and that arose out of the same transaction or occurrence out of which the claim of such governmental unit arose.”

. Section 106(c) provides that “[n]otwithstand-ing any assertion of sovereign immunity by a governmental unit, there shall be offset against a claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.”