Court Opinion

ID: 2972150
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:45:02.604263+00
Date Added: 2024-06-11T11:34:08.804308
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit Rule 206
                                    File Name: 05a0195p.06

                  UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
                                  _________________

                                                    X
                                                     -
 B&B TRUCKING, INC.; CAUSLEY TRUCKING, INC.;

 BROS., INC.; GEORGE E. CAMPBELL AND SONS, INC.; -
 CLIFF BLACKBURN; FEDRIZZI, INC.; FOREMAN
                                                     -
                                                     -
                                                             No. 02-1562
 L.R. VINCENT TRUCK AND SERVICE, INC.; M.C.
                                                     ,
 EIPPERLE, INC.; MASSMAN TRUCKING, INC.; P-D          >
 TRUCKING, INC.; ROBERT M. NEFF, INC.; ROTH          -
                                                     -
                                                     -
 TRUCKING, INC.; ROYSTER ENTERPRISES, INC.;

                                                     -
 SODREL TRUCK LINES, INC.; TAYLOR POSTAL

                                                     -
 CONTRACTING, INC.; NATIONAL STAR ROUTE MAIL
                                                     -
 CONTRACTORS ASSOCIATION; B&B INDUSTRIES,
 INC.; B&T MAIL SERVICES, INC.; SHEEHY MAIL
                                                     -
                                                     -
                             Plaintiffs-Appellants, -
 CONTRACTORS, INC.,

                                                     -
                                                     -
                                                     -
            v.
                                                     -
 UNITED STATES POSTAL SERVICE,                       -
                              Defendant-Appellee. N

                        Appeal from the United States District Court
                       for the Eastern District of Michigan at Detroit.
                        No. 01-72978—Avern Cohn, District Judge.
                                Argued: December 8, 2004
                            Decided and Filed: April 28, 2005
 Before: BOGGS, Chief Judge; MARTIN, BATCHELDER, DAUGHTREY, MOORE, COLE,
       CLAY, GILMAN, GIBBONS, ROGERS, SUTTON, and COOK, Circuit Judges.
                                    _________________
                                        COUNSEL
ARGUED: Sharon Ambrosia-Walt, HOUGER & WALT, Seattle, Washington, for Appellants.
Brian M. Simkin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Sharon Ambrosia-Walt, HOUGER & WALT, Seattle, Washington, for
Appellants. Brian M. Simkin, David M. Cohen, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee.
     COOK, J., delivered the opinion of the court, in which BOGGS, C. J., BATCHELDER,
GILMAN, GIBBONS, ROGERS, and SUTTON, JJ., joined. COLE, J. (pp. 5-6), delivered a

                                              1
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service               Page 2

separate concurring opinion, in which DAUGHTREY, J., joined. MARTIN, J. (pp. 7-11), delivered
a separate dissenting opinion, in which MOORE and CLAY, JJ., joined.
                                        _________________
                                            OPINION
                                        _________________
        COOK, Circuit Judge. Plaintiffs (collectively “truckers”) appeal the district court’s order
dismissing their claims for lack of subject matter jurisdiction. At issue is whether the truckers’
claims are essentially contractual and therefore must be heard in the Court of Federal Claims under
the Contract Disputes Act. We hold that the claims are essentially contractual and affirm the district
court’s dismissal.
                      I. BACKGROUND AND PROCEDURAL HISTORY
       Plaintiff truckers are independent contractors who transport mail for the United States Postal
Service (“USPS”). Under their contracts, USPS pays the truckers based in part upon their annual
estimates of the cost and amount of fuel they will use. If fuel costs increase, their contracts entitle
them to an adjustment in the contract price.
        In 2000, the USPS introduced a new fuel-purchasing program. Under the plan, USPS uses
its buying power to negotiate fuel prices on behalf of mail transporters such as the Plaintiffs. The
truckers then buy fuel directly from the fuel suppliers at the USPS-negotiated wholesale prices.
USPS implemented this plan by adding “Amendment 3” to its new and renewal mail transportation
contracts. That amendment requires that the truckers purchase fuel from USPS-designated suppliers,
either at USPS-designated facilities or delivered to the truckers’ own fueling facilities.
        In their First Amended Complaint below, the truckers claimed that, by requiring them to
participate in the Amendment 3 fuel plan, USPS breached its contracts with the truckers, breached
an implied covenant of good faith and fair dealing, violated the truckers’ constitutional liberty and
property rights, and violated the Separation of Powers Clauses of the United States Constitution by
engaging in “arbitrary agency action without legal authority.”
        USPS moved to dismiss the First Amended Complaint on lack-of-subject-matter-jurisdiction
grounds. The district court responded by deciding that the truckers failed to adequately plead their
claims, but gave them thirty days to amend their complaint. The truckers’ Second Amended
Complaint dropped the breach of contract and breach of implied covenant claims. It alleged only
that the Plan violated the truckers’ Fifth Amendment liberty and property rights, violated postal
regulations, and constituted “arbitrary agency action without statutory authority.”
        The district court dismissed the case, holding that because the truckers’ constitutional and
regulatory claims were essentially contractual, jurisdiction was properly in the Court of Federal
Claims, not the United States District Court.
                                           II. ANALYSIS
                                     A. The Jurisdictional Test
        Under the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 601-613, the Court of Federal
Claims has exclusive jurisdiction for judicial review over any dispute relating to a contract for goods
and services between an executive agency of the United States government and an independent
contractor. Id. § 609(a)(1). The CDA bars district court jurisdiction if the court determines that a
plaintiff’s claims against a government agency are “essentially contractual” in nature. RMI Titanium
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                 Page 3

Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1136 (6th Cir. 1996). “‘The classification of a
particular action as one which is or is not [essentially contractual] depends both on the source of the
rights upon which the plaintiff bases its claim, and upon the type of relief sought (or appropriate).’”
Id. (quoting Megapulse, Inc. v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982)). “The plaintiff’s title or
characterization of its claims is not controlling. ‘[A] plaintiff may not avoid the jurisdictional bar
of the CDA merely by alleging violations of regulatory or statutory provisions.’” Id. (alteration in
original) (quoting Ingersoll-Rand Co. v. United States, 780 F.2d 74, 77 (D.C. Cir. 1985)).
        Thus if, as USPS argues, the truckers’ claims are essentially contractual, then the Court of
Federal Claims has exclusive subject matter jurisdiction. But if, as the truckers contend, their claims
are genuinely based on constitutional and statutory rights, then the district court has subject matter
jurisdiction. We agree with the district court that all of the claims are essentially contractual, and
therefore affirm its dismissal of the case.
                                  B. The Fifth Amendment Claims
        The truckers argue that by interfering with their right to control their fuel supply, USPS
deprived them of their property without due process or just compensation. But whether the truckers
have a right to control their fuel supply depends upon whether their contracts with USPS afford such
a right—in particular, whether Amendment 3 validly requires the truckers to comply with the fuel
plan. The truckers, in effect, seek specific performance of the contracts as they stood before any
amendment. Their objection to the contract amendments is the essence of their claims; both the
source of the rights upon which the Plaintiffs base their claims (contracts with USPS to transport
mail), and the type of relief appropriate (reformation of the contracts to bar enforcement of
Amendment 3) manifest the claims’ contractual nature. The district court appropriately determined
that the truckers’ characterization of their claims as non-contractual was an effort to obscure the
claims’ true nature.
         Additionally, if the truckers contend correctly that the contracts do not validly restrict their
right to control their fuel supply, and USPS nevertheless abridged that right, then the proper recourse
would be a breach-of-contract claim, not a takings claim. See Hughes Communications Galaxy, Inc.
v. United States, 271 F.3d 1060, 1070 (Fed. Cir. 2001) (“[T]he concept of a taking as a compensable
claim theory has limited application to the relative rights of party litigants when those rights have
been voluntarily created by contract. In such instances, interference with such contractual rights
generally gives rise to a breach claim not a taking claim.” (citations and internal punctuation
omitted)).
                                      C. The Regulatory Claims
        The truckers further argue that USPS lacked authority to develop the fuel plan because USPS
regulations prohibit USPS from interfering with the operation of its contractors’ businesses, and that
in the absence of regulatory authority, USPS’s insistence that the truckers comply with the fuel plan
violates their right to due process. Specifically, the truckers cite two regulations that they contend
render the fuel plan invalid: USPS’s Purchasing Manual (stating that “[t]he objective of any
purchasing action is to meet contract objectives, not control the supplier’s business”) and its
Management Instructions (stating that “[p]urchases of fuel may be made from any source at the
option of the fuel contractor”).
        This argument, however, conflicts with the truckers’ position that the amendments to their
contracts do not obligate them to purchase fuel from the designated suppliers: the amendments
cannot be both contractually invalid (as the truckers contend in advancing their Fifth Amendment
claim, arguing that the amendments do not constitute consent to the fuel plan) and contractually
valid (as the truckers contend when arguing that the amendments are inconsistent with USPS
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                 Page 4

regulations). If the amendments are contractually invalid and therefore do not compel the truckers
to comply with the fuel plan, then the amendments cannot also violate USPS regulations by
compelling the truckers to comply with the fuel plan.
         This inconsistency, although perfectly acceptable as an alternative-pleading strategy,
nevertheless highlights the contractual nature of the truckers’ claims, because their contracts with
USPS are at the core of both sides of the truckers’ argument. Regardless of whether the truckers
argue that the new fuel-purchase requirements violate the contracts, or that the contracts violate
USPS regulations, their claims are contractual. That the fuel plan might violate USPS regulations
does not transform a claim into one that is regulatory and not contractual. See Ingersoll-Rand Co.,
780 F.2d at 78 (“The question presented by the complaint could be phrased as whether the contract
forbids termination under these conditions. That the termination also arguably violates certain other
regulations does not transform the action into one based solely on those regulations.”) Otherwise,
because every government agency is bound to follow some set of regulations, every government
contractor could recast its contract claims as regulatory claims, thereby nullifying the CDA. Cf.
United States v. J & E Salvage Co., 55 F.3d 985, 988 (4th Cir. 1995) (“Effective enforcement of the
jurisdictional limits of the CDA mandates that courts recognize contract actions that are dressed in
tort clothing.”); Melanson v. United Air Lines, Inc., 931 F.2d 558, 561 n.1 (9th Cir. 1991) (“Nearly
any contract claim can be restated as a tort claim. The RLA’s grievance procedure would become
obsolete if it could be circumscribed by artful pleading.”).
                       D. Relief Available from the Court of Federal Claims
        Finally, the truckers contend that the district court has jurisdiction because the Court of
Federal Claims cannot grant the injunctive relief they seek. We initially note that the CDA provides
that “[a]ll claims by a contractor against the government relating to a contract . . . shall be submitted
to the contracting officer for a decision,” 41 U.S.C. § 605(a) (emphasis added), and that the
contractor may seek judicial review only in the Court of Federal Claims. Id. § 609(a)(1).
Thus—because the CDA does not condition that court’s jurisdiction upon the relief sought, but upon
whether claims relate to a contract—the relief available in the Court of Federal Claims is irrelevant.
See Ingersoll-Rand Co., 780 F.2d at 80 (holding that a claim for specific performance of a
government contract “must be resolved by the Claims Court,” even though the Claims Court had no
power to grant specific performance).
         Further, while the truckers correctly assert that the Court of Federal Claims cannot grant the
relief they seek outright, that court can achieve the same result—freedom from compliance with the
fuel plan—if it finds such a result appropriate, by granting a contractual remedy such as reforming
the truckers’ contracts with USPS. See Ho v. United States, 49 Fed. Cl. 96, 100 (2001)
(“Reformation of a contract is an equitable remedy that may be invoked in this court . . . when the
contract contains . . . provisions that are contrary to law.” (citing Am. Tel. & Tel. Co. v. United
States, 177 F.3d 1368, 1376 (Fed. Cir. 1999); McClure Elec. Constructors, Inc. v. Dalton, 132 F.3d
709, 711 (Fed. Cir. 1997); Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202 (Fed. Cir.
1994))).
                                         III. CONCLUSION
       Because all of the truckers’ claims relate to their contracts with USPS, the Court of Federal
Claims has exclusive jurisdiction over this case. Therefore, we affirm the district court’s dismissal.
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                Page 5

                                     ______________________
                                        CONCURRENCE
                                     ______________________
        R. GUY COLE, JR., Circuit Judge, concurring. I concur in the majority’s opinion but write
separately to clarify what I take to be the basis for today’s majority holding: the fact that plaintiffs
have effectively artfully pleaded what are essentially contractual claims, in an attempt to avoid the
jurisdictional bar of the Contracts Dispute Act (“CDA”).
        The CDA establishes exclusive Court of Federal Claims jurisdiction over claims against the
federal government that are “essentially contractual” in nature. See RMI Titanium Co. v.
Westinghouse Elec. Corp., 78 F.3d 1125, 1136 (6th Cir. 1996). Such exclusive jurisdiction would
be meaningless if every claim could be artfully pleaded in such a fashion as to avoid this
jurisdictional bar. As the majority notes, nearly any contract claim can be restated as a tort claim.
Ante at 4 (Maj. Op.); see also Melanson v. United Air Lines, Inc., 931 F.2d 558, 561 n.1 (9th Cir.
1991). Similarly, nearly every contract claim against a federal agency could be restated as a claim
that the agency at issue has violated some internal regulation, or that the agency has acted in an
arbitrary or capricious manner. See, e.g., Ingersoll-Rand Co. v. United States, 780 F.2d 74, 77 (D.C.
Cir. 1985). As a result, along with the majority, I would examine the claims here to determine if
they are actually contractual claims in other claims’ clothing.
        Courts have long applied this sort of “artful pleading” test in many jurisdictional contexts.
See, e.g., Harrow v. Prudential Ins. Co., 279 F.3d 244, 253 (3d Cir. 2002) (“Plaintiffs cannot
circumvent the exhaustion requirement by artfully pleading benefit claims as breach of fiduciary
duty claims.”); Shell v. R.W. Sturge, Ltd., 55 F.3d 1227, 1231 (6th Cir. 1995) (“We refuse to allow
a party’s solemn promise to be defeated by artful pleading.”); Lambert v. Kysar, 983 F.2d 1110,
1121 (1st Cir. 1993) (“We cannot accept the invitation to reward attempts to evade enforcement of
forum selection agreements through artful pleading of tort claims in the context of a contract
dispute.” (internal punctuation and citation omitted); see also B&B Trucking v. USPS, 363 F.3d 404,
425 (6th Cir. 2004) (Op. of Cook, J., dissenting) (citing many of these and other such cases). But
see Rossell-Gonzalez v. Calderon-Serra, 398 F.3d 1, 12 (1st Cir. 2004) (“[W]e are skeptical of the
applicability of the artful pleading doctrine outside of complete federal preemption of a state cause
of action.”). I see no reason why the artful pleading doctrine ought not be applied here.
        In the instant case, I agree with both the majority and the dissent that the proper question as
to whether the CDA prohibits district court jurisdiction under the RMI Titanium / Megapulse test
involves an examination of the “rights and remedies” set forth in the complaint. See RMI Titanium,
78 F.3d at 1136 (quoting Megapulse, Inc. v. Lewis, 672 F.2d 959, 967 (D.C. Cir. 1982). However,
I see the underlying rights presented by the plaintiffs here as contractual in nature, despite the fact
that their complaint appears on its face to discuss only non-contractual rights.
          The truckers first complain that the USPS is interfering with their Fifth Amendment rights.
 However, the types of interference that the truckers describe do not involve any actions other than
instructions to comply with contract provisions. For example, the truckers claim that the USPS is
intruding upon their land, in violation of their Fifth Amendment rights, by requiring fuel suppliers
to fill the fuel tanks at the truckers’ depots. But armed federal officers are not physically intruding
onto the truckers’ land and pumping unwanted fuel into the truckers’ fuel tanks. Rather, the USPS
has merely amended the contracts, in accordance with the terms of those contracts, and instructed
the truckers to comply with the new terms. The truckers, of course, could refuse to comply, and risk
losing their contracts or being in breach, but no actual “trespass” or “taking” is occurring outside
of the bounds of the contract mechanism. Thus these claims are essentially contractual, despite the
truckers’ efforts to cloak them in Fifth Amendment garb; any “taking” or interference with the
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                 Page 6

truckers’ property that has occurred here has only occurred via contractual means, just as any
“rights” with which the USPS is interfering are those resulting from the contracts. And similar
arguments can be made about the truckers’ remaining Fifth Amendment claims. Accordingly, these
claims are “essentially contractual.”
        In reaching this conclusion, it is not important that the USPS’s defense would be based on
the contracts at issue. I agree with the dissent that the existence of a viable contract-based defense
does not render district court jurisdiction inappropriate. See, e.g., Post at 10 (Op. of Martin, J.,
dissenting); Commercial Drapery Contractors, Inc. v. United States, 133 F.3d 1, 4 (D.C. Cir. 1998)
(noting that the existence of relevant contract-related issues does not render a claim “essentially
contractual”). For example, suppose the aforementioned armed federal agents had entered onto the
truckers’ property without permission, asserting “We are only pumping fuel here because the
contracts say we can.” In such a situation, I would have no difficulty finding district court
jurisdiction over the truckers’ Fifth Amendment trespass claims, despite the fact that the
government’s defense would rely exclusively on rights granted by contract. However, the
appropriate inquiry (in which I take the majority opinion to have engaged, and with which I agree)
does not take possible defenses into account. Rather, it examines the claims to determine their
underlying source and whether the claims are merely being artfully pleaded to avoid the CDA’s
jurisdictional bar. In the instant case such an inquiry results in a determination that the truckers’
complaint effectively asserts only contractual causes of action cloaked in non-contractual language.
I reach this conclusion without reference to the USPS’s possible defenses.
        Further, I agree with the majority that the fact that the truckers have claimed that the USPS’s
actions in attempting to enforce its contracts were contrary to its regulations and were arbitrary and
capricious does not automatically render such claims non-contractual. The dissent evaluates these
claims facially without examining the effect that its proposed holding would have on the CDA’s
enforcement scheme. It stretches the imagination to think of a contract dispute that could not be
argued under a “contrary to controlling regulations” or “arbitrary and capricious” theory. See, e.g.,
Int’l Eng’g Co., Div. of A-T-O, Inc. v. Richardson, 512 F.2d 573, 580 (D.C. Cir. 1975) (“[I]t is hard
to conceive of a claim falling no matter how squarely within the [CDA] which could not be urged
to involve as well agency error subject to review under the APA.”); see also Megapulse, 672 F.2d
at 405 (“[A] plaintiff whose claims against the United States are essentially contractual should not
be allowed to avoid the jurisdictional . . . restrictions of the [CDA] 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.”). As a result, mere acceptance of a plaintiff’s
assertion of district court jurisdiction over such “due process”-style claims cannot be proper.
        In such a case, a court should determine whether the underlying claim is essentially
contractual or not. Failure to engage in this sort of artful pleading analysis would result in the
effective evisceration of the jurisdictional bar of the CDA — a state of affairs Congress cannot have
intended. I thus agree with the majority that such an inquiry is required over these sorts of due
process claims, and that the claims at issue in the instant case are essentially contractual for these
purposes.
        Finally, regardless of how one characterizes the remedies requested by the truckers, the
outcomes the truckers expect from their requested remedies could, as the majority notes, just as
easily be gained from a reformation of the contracts at issue. This remedy is well within the power
of the Court of Federal Claims. See, e.g., Beta Sys., Inc. v. United States, 838 F.2d 1179 (Fed. Cir.
1988). As a result, and in contrast to the dissent, I would find that the fact that the specific remedies
requested by the truckers are not within the Court of Federal Claims’s power should not weigh
against exclusive Court of Federal Claims jurisdiction.
        Accordingly, I concur in affirming the judgment of the district court.
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service               Page 7

                                        ________________
                                            DISSENT
                                        ________________
        BOYCE F. MARTIN, JR., Circuit Judge, dissenting. The sole issue presented in this case
is whether the district court properly dismissed the truckers’ claims for lack of subject matter
jurisdiction under the Contract Disputes Act, 41 U.S.C. §§ 601-613. I am convinced that the district
court erred, as has the majority, by misconstruing this Circuit’s precedent. I therefore respectfully
dissent.
                                                  I.
        Given the review of the facts contained in the majority opinion, I see no need to restate them
here. I do, however, take this opportunity to articulate briefly why I am compelled to dissent from
the en banc court’s disposition of this case. I begin by discussing the existing legal framework in
this context, and then consider how the claims presented by the truckers should be decided
consistent with the principles well-established within that framework.
                                                  A.
         The United States Postal Service is an agency of the United States and thus enjoys sovereign
immunity, except to the extent that it is waived. In 1970, Congress generally waived the postal
service’s immunity by enacting the Postal Reorganization Act, which allows the postal service “to
sue and be sued in its official name.” 39 U.S.C. § 401(1). The Act expressly gives the United States
district courts “original but not exclusive jurisdiction over all actions brought by or against the
Postal Service.” 39 U.S.C. § 409(a); see also 28 U.S.C. § 1339 (providing an additional basis for
federal district court jurisdiction over “any civil action arising under any Act of Congress relating
to the postal service”).
         In 1978, Congress enacted the Contract Disputes Act, 41 U.S.C. §§ 601-613, which divests
federal district courts of subject matter jurisdiction over some contractual disputes involving the
federal government. See, e.g., Campanella v. Commerce Exch. Bank, 137 F.3d 885, 891 (6th Cir.
1998) (holding that the Contract Disputes Act divests the district court of subject matter jurisdiction
presumably granted by a “sue-and-be-sued” clause applicable to the Small Business Administration).
The Contract Disputes Act provides that “[a]ll claims by a contractor against the government
relating to a contract shall be in writing and shall be submitted to the contracting officer for a
decision.” 41 U.S.C. § 605(a) (emphasis added). The decision rendered by the contracting officer
is then reviewable only by an agency board of contracting appeals, 41 U.S.C. § 606, or by the Court
of Federal Claims, 41 U.S.C. § 609(a)(1).
        Consequently, if claims against the postal service “relat[e] to a contract” under the Contract
Disputes Act, then sovereign immunity has not been waived and the federal district court lacks
subject matter jurisdiction to hear the claims. In such a case, the claims could only be brought
before the Court of Federal Claims. If, however, the claims do not “relat[e] to a contract,” sovereign
immunity has been waived and the district court would presumably have jurisdiction.
        Fortunately, this Court, along with our sister circuits, has given meaning to the vague
“relat[e] to a contract” language contained in the Contract Disputes Act. In RMI Titanium Co. v.
Westinghouse Electric Corp., 78 F.3d 1125, 1136 (6th Cir. 1996), a panel of this Court, relying on
the District of Columbia Circuit’s decision in Megapulse, Inc. v. Lewis, 672 F.2d 959, 967 (D.C. Cir.
1982), established the test for whether claims “relat[e] to a contract” under the Contract Disputes
Act in this Circuit. There, we held that “for the [Contract Disputes Act] to apply, it must first be
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                 Page 8

determined that the claims asserted are ‘essentially contractual’ in nature.” RMI Titanium Co., 78
F.3d at 1136 (quoting Megapulse, Inc., 672 F.2d at 967) (emphasis added). In so holding, we
adopted the following standard first articulated by the District of Columbia Circuit in Megapulse:
“The classification of a particular action as one which is or is not ‘at its essence’ a contract action
depends both [1] on the source of the rights upon which the plaintiff bases its claim, and [2] upon
the type of relief sought (or appropriate).” Id. (quoting Megapulse, Inc., 672 F.2d at 967). A
number of our sister circuits have also adopted this so-called “rights and remedies” test announced
in Megapulse. See, e.g., Up State Fed. Credit Union v. Walker, 198 F.3d 372, 375-76 (2d Cir.
1999); United States v. J & E Salvage Co., 55 F.3d 985, 988-89 (4th Cir. 1995); N. Star Alaska v.
United States, 14 F.3d 36, 37-38 (9th Cir. 1994).
         The majority purports to follow Megapulse’s “rights and remedies” test in holding that the
federal district court does not have jurisdiction over any of the truckers’ claims. In my view, this
application of the “rights and remedies” test not only denies federal government contractors their
right to bring non-contractual claims in federal district court, but it also misconstrues and contradicts
existing case law in this and other circuits, thus creating an unnecessary split in the circuits.
                                                   B.
       In order to determine whether a claim is “essentially contractual,” we are first required to
consider “the rights upon which the plaintiff bases its claim,” and, second, “the type of relief sought
(or appropriate).” RMI Titanium Co., 78 F.3d at 1136 (quoting Megapulse, Inc., 672 F.2d at 967).
A brief look at each allegation proves instructive in illustrating why all but one of the truckers’
claims are essentially non-contractual.
        The first prong of the “rights and remedies” test requires this Court to consider the nature
of the rights upon which the plaintiffs base their claim. This inquiry does not focus on whether a
contractual relationship exists between the parties, or whether the claims, as a whole, in some way
involve contractual issues. See, e.g., A.E. Finley & Assocs., Inc. v. United States, 898 F.2d 1165,
1168 (6th Cir. 1990) (noting that “it would be improper to classify all claims raising contract issues
as contract actions”) (quoting B.K. Instrument Co. v. United States, 715 F.2d 713, 728 (2d Cir.
1983)). Instead, the relevant question is whether, despite the presence of an underlying contract
between the parties, the rights asserted that form the basis of the claims are founded on the contract
or on another ground, such as the Constitution or a federal statute.
         Moreover, despite the majority’s unsupported claims to the contrary, the relevant inquiry
under this test does not consider the defendant’s grounds for opposing the plaintiff’s claim in
determining whether the claim is “essentially contractual.” In fact, the language of the “rights and
remedies” test makes clear that the inquiry is focused on the “rights upon which the plaintiff bases
its claim.” Id. (emphasis added). The majority points to no legal support for its proposition that a
defendant’s rebuttal grounds are relevant to this inquiry, instead quoting language stating that a
“plaintiff’s title or characterization of its claims is not controlling,” and that “[a] plaintiff may not
avoid the jurisdictional bar of the [Contract Disputes Act] merely by alleging violations of
regulatory or statutory provisions.” B & B Trucking, Inc. v. United States Postal Serv., No. 02-1562,
slip op. at 3 (6th Cir. 2005) (en banc opinion) (quoting RMI Titanium Co., 78 F.3d at 1136) (internal
quotation marks omitted). As the Megapulse court stated in establishing the applicable “rights and
remedies” test:
        Contract issues may arise in various types of cases where the action itself is not
        founded on a contract. A license, for example, may be raised as a defense in an
        action for trespass, or a purchase contract may be raised to counter an action for
        conversion. But the mere fact that a court may have to rule on a contract issue does
        not, by triggering some mystical metamorphosis, automatically transform an action
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                Page 9

       based on trespass or conversion into one on the contract and deprive the court of
       jurisdiction it might otherwise have.
672 F.2d at 968; see also Commercial Drapery Contractors, Inc. v. United States, 133 F.3d 1, 4
(D.C. Cir. 1998) (applying Megapulse’s “rights and remedies” test in concluding that the mere
existence of contractual rebuttal points does not render a claim essentially contractual under the
Contract Disputes Act). Thus, existing case law establishes that a claim does not become
“essentially contractual” merely because the defendant raises the existence of a contract as a
defense.
        The second prong of the “rights and remedies” test requires this Court to consider the type
of relief that the plaintiff is seeking, or the type of relief that is appropriate given the plaintiff’s
claim. The Court of Federal Claims generally does not have the equitable powers to grant
prospective relief, and, thus, any claim for which such relief is suitable is more appropriately
brought before the federal district court. See id. (concluding that plaintiffs’ cause of action against
the General Services Administration seeking only equitable relief, rather than damages for breach
of contract, was not at its essence a contract action).
                                                  II.
        Applying these standards of existing precedent to the instant case, it becomes clear that the
majority’s reasoning in depriving the truckers access to the federal district court is misguided. I
briefly address each of the truckers’ causes of action in turn.
                                                  A.
        The truckers’ first cause of action consists of a number of Fifth Amendment claims alleging
deprivation of liberty and property interests without due process of law. In short, the truckers assert
three types of Fifth Amendment claims. First, they claim a violation of their property right to
control use of their fuel tanks. Second, they assert a claim based on their alleged freedom to contract
with fuel suppliers of their own choosing. Finally, the truckers allege a variety of liberty interests
to control the operation of their businesses.
       These Fifth Amendment claims are essentially non-contractual. The alleged right to protect
property from being entered and used, which is asserted by the truckers here, is clearly not based
on any contract. Rather, the source of the rights upon which the plaintiffs base their claim is the
Fifth Amendment and, more specifically, the truckers’ title to their property. Similarly, the truckers’
claims regarding their freedom to contract with fuel suppliers of their own choosing are not based
on any contractual provision, but are also based on their protected constitutional rights.
         The majority concludes that “whether the truckers have a right to control their fuel supply
depends upon whether their [transportation] contracts with [the postal service] afford such a right”
in light of Amendment 3, which appears to require the truckers to comply with the fuel plan agreed
to between the postal service and the fuel suppliers. B & B Trucking, Inc., No. 02-1562, slip op. at
3 (en banc opinion) (emphasis in original). In so holding, however, the majority mistakenly assumes
that the source of the rights upon which the truckers base their claims is the transportation contract
that each trucker has with the postal service to transport mail. As noted above, the truckers’
complaint clarifies that the source of the rights upon which they base their claims is not any contract
between the truckers and the postal service, but rather their property rights protected independently
of their transportation contracts. In similar cases, courts have refused to conclude, as the majority
seems to do here, that non-contractual claims somehow automatically become “essentially
contractual” for jurisdictional purposes under the Contract Disputes Act if the parties are in a
contractual relationship or if some contractual issue would likely arise in rebuttal. See, e.g.,
Commercial Drapery Contractors, Inc., 133 F.3d at 4 (holding that a business’s claims that the
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service                Page 10

federal government’s General Service Administration violated the Constitution, government
procurement statutes, and federal regulations were not “essentially contractual” merely because the
parties had entered into a contract and its termination provision was relevant to the Administration’s
defense); Megapulse, 672 F.2d at 969 (concluding that a government contractor’s suit against the
Coast Guard to prevent release of proprietary data was not “essentially contractual” despite the
existence of relevant contractual issues) (“[The contractor’s position] is ultimately based, not on
breach of contract, but on an alleged governmental infringement of property rights and violation of
the Trade Secrets Act. It is actually the Government, and not [the contractor], which is relying on
the contract . . . .”).
         The only claim asserted here by the truckers that is based on contractual rights is the claim
that the postal service interfered with the performance of the truckers’ transportation contracts. The
contracts on which this claim is based are, in fact, the original transportation contracts between the
truckers and the postal service. The truckers seek enforcement of the pre-Amendment 3 version of
those contracts. Consequently, because the rights asserted in this claim are based on contract, then
jurisdiction of this claim is properly limited to the Court of Federal Claims. This is in stark contrast
to the other Fifth Amendment claims, each of which is, for the reasons stated above, properly
considered non-contractual given the source of the rights upon which the truckers base those claims.
                                                   B.
        The truckers’ second cause of action claims that the postal service has violated its own
regulations, which allegedly prohibit the postal service from telling a contractor how or when to
purchase supplies and allow contractors to purchase fuel from any source at the contractor’s
discretion. Despite the existence of transportation contracts between the postal service and the
truckers, these allegations are simply not based upon contractual rights; rather, they are based upon
rights established in federal government regulations. As such, they are not “essentially contractual”
under the Megapulse standard discussed above and the district court has subject matter jurisdiction
to hear these claims.
                                                   C.
         The truckers’ final cause of action is based on their claim of “arbitrary and capricious”
agency action. In short, the truckers allege that the postal service obligated the truckers to the fuel
supply contracts between the postal service and the fuel suppliers. The truckers claim that the fuel
supply contracts created third-party obligations, which they argue the postal service does not have
statutory authority to create, and are therefore “arbitrary and capricious” and violate due process.
        In my view, there is simply nothing about this claim that relates to the contractual
relationship between the truckers and the postal service. Granted, the truckers’ transportation
contracts with the postal service may be relevant on the merits, particularly in the postal service’s
rebuttal of the alleged “arbitrary and capricious” action. However, as noted above, the mere
existence of contractual issues, specifically those not related to the rights upon which the plaintiffs
base their claim, does not insulate the postal service from suit in federal district court. Thus, because
the claims presented here in the truckers’ final cause of action are based upon rights not guaranteed
by their transportation contracts with the postal service, but, rather, upon federal guarantees of due
process, the district court properly had subject matter jurisdiction to hear those claims.
                                                  III.
        While a review of the rights upon which the truckers base their claims strongly suggests that
all but one of their claims are non-contractual, we are still required to address the second prong of
Megapulse’s “rights and remedies” test, which involves a consideration of the type of relief sought
or appropriate. See RMI Titanium Co., 78 F.3d at 1136 (quoting Megapulse, Inc., 672 F.2d at 967).
No. 02-1562           B&B Trucking, Inc., et al. v. United States Postal Service              Page 11

In the present case, the truckers are seeking declaratory and injunctive relief, both of which are
forms of non-contractual prospective relief. Moreover, it appears that this prospective relief is the
appropriate form of relief given the fact that the truckers are neither claiming breach of contract nor
seeking monetary damages against the postal service. See, e.g., Commercial Drapery Contractors,
Inc., 133 F.3d at 4 (holding that plaintiffs’ cause of action seeking only equitable relief rather than
damages for breach of contract was not at its essence a contract action).
         Furthermore, despite the majority’s conclusions to the contrary, the truckers’ claims are not
accurately characterized as seeking specific performance of any contract. First, the truckers are not
trying to seek performance of their transportation contracts with the postal service. In fact, the
federal government is the party that is relying on the transportation contracts, particularly
Amendment 3, to defend against the truckers’ claims. Consequently, the truckers’ claims simply
cannot be framed as seeking specific performance of their transportation contracts. Second, the
majority errs in concluding that “[t]he truckers, in effect, seek specific performance of the contracts
as they stood before any amendment.” B & B Trucking, Inc., No. 02-1562, slip op. at 3 (en banc
opinion). Importantly, the pre-amended contracts contained no language guaranteeing truckers’
rights to choose their own fuel suppliers. It is therefore inaccurate to view the plaintiffs’ claims as
merely seeking specific performance of their pre-amended contracts when, in fact, the appropriate
relief for their claims goes beyond the rights provided in the pre-amended contracts. Thus, the non-
contractual relief appropriate for plaintiffs’ claims further supports the conclusion that the federal
district court has subject matter jurisdiction over these claims.
                                                 IV.
         In sum, I dissent from the Court’s decision in this case. In my view, the majority incorrectly
concludes that all of the truckers’ claims are essentially contractual and thus cannot be brought in
federal district court. Under the “rights and remedies” test previously adopted by this Court, the
plaintiffs’ claims all seek non-contractual remedies, and all but one—the alleged liberty right to
perform the transportation contracts—are based on non-contractual rights. Consequently, the federal
district court is not absolved of jurisdiction over these claims. I therefore respectfully dissent from
the majority’s decision, which wrongfully denies the truckers, as well as all others similarly situated
who contract with the federal government either directly or directly, access to bring non-contractual
claims before the federal district court.