Court Opinion

ID: 4247867
Source: CourtListenerOpinion
Date Created: 2018-02-23 16:00:56.528027+00
Date Added: 2024-06-11T14:43:21.718768
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                 MOHD N. REFAEI,
                  Plaintiff-Appellant

                           v.

                  UNITED STATES,
                  Defendant-Appellee
                ______________________

                      2017-1399
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 1:15-cv-01052-MBH, Judge Marian Blank
Horn.
                ______________________

              Decided: February 23, 2018
               ______________________

    MICHAEL TIMOTHY MILLIGAN, Law Office of Mike
Milligan, El Paso, TX, argued for plaintiff-appellant.

    SEAN SIEKKINEN, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-appellee. Also represented
by CHAD A. READLER, ROBERT E. KIRSCHMAN, JR., STEVEN
J. GILLINGHAM, JESSICA COLE.
                 ______________________
2                                  REFAEI   v. UNITED STATES

    Before REYNA, TARANTO, and CHEN, Circuit Judges.
CHEN, Circuit Judge.
    Dr. Mohd N. Refaei was terminated from his position
as a medical resident at William Beaumont Army Medical
Center (WBAMC). He sued the United States (Govern-
ment) in the U.S. Court of Federal Claims (Claims Court),
alleging that WBAMC violated due process protections
guaranteed by contract during the proceedings that led to
his termination. The Government moved to dismiss for
lack of subject matter jurisdiction, arguing, inter alia,
that Dr. Refaei was precluded from suing for breach of
contract because he served as a medical resident by
appointment rather than by contract. The Claims Court
granted the Government’s motion to dismiss, finding that
Dr. Refaei’s employment “was by appointment and not be
contract.” Refaei v. United States, 129 Fed. Cl. 1, 16
(2016). Throughout the proceedings, and in earlier pro-
ceedings related to the same events, Dr. Refaei character-
ized his residency at WBAMC as simply one of
employment by the Government. Accepting that under-
standing for purposes of decision, we affirm the Claims
Court’s dismissal.
                       BACKGROUND
    On July 1, 2008, Dr. Refaei was appointed by the De-
partment of Veterans Affairs (VA) to a position as a
medical resident in the Internal Medicine Residency
Program at WBAMC pursuant to 38 U.S.C. § 7406. [J.A.
97] Section 7406 grants the Secretary of the VA authority
to “appoint qualified persons” to “residencies.” 38 U.S.C.
§ 7406(a)(1). The Secretary also has authority to “pre-
scribe the conditions of employment of persons appointed
under [§ 7406], including necessary training, and the
customary amount and terms of pay for such positions.”
38 U.S.C. § 7406(b). The Standard Form (SF-50) memori-
alizing Dr. Refaei’s appointment notes that his appoint-
ment was for the duration of his training unless sooner
REFAEI   v. UNITED STATES                                  3

terminated and that his employment would be subject to
periodic review. [J.A. 97] The SF-50 also reflects that Dr.
Refaei signed an appointment affidavit the same day.
    That appointment followed a February 13, 2008 letter
to Dr. Refaei from Dr. Kent J. DeZee, Program Director
for WBAMC’s Internal Medicine Residency Program. In
that letter, Dr. DeZee “officially offer[ed Dr. Refeai] a
position in [the] Internal Medicine residency training
program beginning July 1st 2008.” J.A. 435. The letter
stated that the offer was “contingent upon,” among other
things, Dr. Refaei’s “ability to fulfill all requirements for
Veteran’s Administration employment.” Id. Those re-
quirements having evidently been met, the VA made the
employment appointment on July 1, 2008, the date of the
SF-50 appointment document.
     A second document central to the issue now before us
is dated the same day: “WILLIAM BEAUMONT ARMY
MEDICAL        CENTER        RESIDENT      AGREEMENT
GRADUATE MEDICAL EDUCATION” (Resident Agree-
ment). J.A. 91–96. Dr. Refaei signed it on July 9, 2008.
Dr. DeZee, as Internal Medicine Program Director, signed
it on August 2, 2008. [J.A. 96]
    It is important to note what is not at issue about the
Resident Agreement in this case. Dr. Refaei does not
present to us an argument, based on the Resident Agree-
ment and the SF-50 appointment, that he had two dis-
tinct but related relationships with the United States: an
education agreement with an Army medical center
(WBAMC), which controlled admission into and retention
in the residency as a “graduate medical education” pro-
gram (from which WBAMC eventually removed him); and
an employment appointment from the VA, contingent on
Dr. Refaei’s participation in the residency program, such
participation subject to the Army’s, not the VA’s, control.
Dr. Refaei has consistently treated his relationship with
WBAMC as simply one of employment, with the Army
4                                  REFAEI   v. UNITED STATES

functioning “as the residents’ employer,” and the VA
paying the salaries, as his complaint in this case states.
J.A. 35–36. 1 Like the Claims Court, we will therefore
decide this case based on Dr. Refaei’s own treatment of
the Resident Agreement as an employment agreement.
    The Resident Agreement includes a clause that, ac-
cording to Dr. Refaei, incorporates WBAMC’s due process
policy (Due Process Policy) by reference into the Resident
Agreement. [Id.; see also Due Process Policy (J.A. 45–62)]
The clause reads as follows in its entirety: “8. Guarantee
of Fair Procedures: See your Due Process document for
guidance.” J.A. 96 (emphasis added). Dr. Refaei sepa-
rately signed a copy of the Due Process Policy to
acknowledge receipt of it. [J.A. 62]
     WBAMC initiated proceedings to terminate Dr. Refaei
in August 2011, shortly before he was scheduled to com-
plete his residency. [J.A. 36] According to Dr. Refaei,
WBAMC provided only one reason for his termination in
the notice sent to him prior to his termination hearing:
that he improperly transferred a patient to the Intensive
Care Unit instead of leaving the patient in a particular
hospital ward. [J.A. 36–37] Dr. Refaei asserts that such
a discretionary decision regarding patient care is not
listed as a ground for termination in the Due Process
Policy. [J.A. 37]
   WBAMC’s Graduate Medical Education Committee
conducted Dr. Refaei’s termination hearing. [See J.A. 37,

    1   Indeed, Dr, Refaei proceeded on the same charac-
terization in the employment discrimination claims he
brought against the Army in the proceeding that became
this case when (after those claims were rejected on the
merits) the remaining contract claim was transferred to
the Claims Court. See infra, p. 5.
REFAEI   v. UNITED STATES                                5

39–40] After the hearing, the Committee recommended
that Dr. Refaei be terminated. [J.A. 37–40] Dr. Refaei
asserts that he was not permitted to review new evidence
and allegations presented for the first time at the hearing
and alleges that these new allegations were used to
terminate him. [Id.] He appealed to the Commanding
General, who denied the appeal and terminated Dr.
Refaei effective September 26, 2011. [J.A. 40] As noted,
Dr. Refaei treats this as a termination of employment, not
as a termination only of participation in an educational
residency program.
     Dr. Refaei subsequently filed a complaint in the Unit-
ed States District Court for the Western District of Texas,
alleging that the Army breached a contract by violating
the Due Process Policy during his termination hearing.
[J.A. 40] Compl., No. 3:13-CV-196-FM (W.D. Tex. June
18, 2013), ECF No. 1. Dr. Refaei also asserted various
claims of employment discrimination and claims for
intentional infliction of emotional distress and defama-
tion. Id. He named only the Secretary of the Department
of the Army as a defendant and consistently identified the
Army as his employer throughout his district court com-
plaint. Id. The district court granted the Government’s
partial motion to dismiss Dr. Refaei’s breach of contract
claim and granted the Government’s motion for summary
judgment on all remaining issues. See Refaei v. McHugh,
EP-13-CA-00196-FM, 2014 WL 11516372 (W.D. Tex. Aug.
20, 2014). Dr. Refaei appealed to the Fifth Circuit, which
affirmed the rejection of the employment discrimination
claims but vacated the dismissal of Dr. Refaei’s breach of
contract claim. It remanded the case to the district court
with instructions to transfer the contract claim to the
Claims Court because, “[u]nder the Tucker Act, the
[Claims Court] has exclusive jurisdiction over claims
sounding in breach of contract against the United States
that exceed $10,000.” Refaei v. McHugh, 624 F. App’x
142, 148–49 (5th Cir. 2015).
6                                   REFAEI   v. UNITED STATES

     On August 4, 2015, Dr. Refaei filed a transfer com-
plaint in the Claims Court alleging, inter alia, that the
Resident Agreement, which incorporated the Due Process
Policy, constituted an express or implied contract that
was breached by the Army. [J.A. 35–43] In the com-
plaint, Dr. Refaei asserts that WBAMC, in order to main-
tain accreditation with the Accreditation Council for
Graduate Medical Education (ACGME), adopted its Due
Process Policy in accordance with institutional require-
ments set by ACGME. [J.A. 36] For his breach of con-
tract claim, Dr. Refaei alleges that the Due Process Policy
“constitutes an express or alternatively implied contract
that Plaintiff would have the benefit of at least the mini-
mum due process requirements mandated by ACGME,”
and that “WBAMC breached that contract by its multiple
violations of policies, causing Plaintiff monetary damag-
es.”
     The Government filed a motion to dismiss on Febru-
ary 19, 2016, asserting that Dr. Refaei’s complaint should
be dismissed for lack of subject matter jurisdiction. [See
J.A. 63–88] In support of the motion, the Government
argued, inter alia, that (1) Dr. Refaei served as a medical
resident pursuant to an appointment rather than by
contract, (2) his alleged contract was not money-
mandating, and (3) Dr. Refaei failed to allege that Dr.
DeZee had authority to bind the Government by signing
the Resident Agreement. [Id.] Dr. Refaei responded by
arguing that (1) Dr. Refaei had a contract that was ancil-
lary to his employment appointment, (2) the contract
incorporated the Due Process Policy by reference, and
(3) the contract was breached when the Government
failed to provide Dr. Refaei the protections guaranteed in
the Due Process Policy. [See Claims Court Case No. 15-
cv-1052 Dkt. No. 10 at 10 (not in the J.A.)] Dr. Refaei also
requested—in his response brief addressing the motion to
dismiss—that he be permitted to engage in discovery on
REFAEI   v. UNITED STATES                                  7

certain topics and for leave to amend, if any portion of the
motion to dismiss were granted. [J.A. 410–11]
    The Claims Court granted the Government’s motion
to dismiss, concluding that Dr. Refaei had failed to rebut
the presumption that, as a federal employee, he was
employed only by appointment and not (also) by contract.
Refaei, 129 Fed. Cl. at 16. The Claims Court rejected Dr.
Refaei’s argument that he had entered into a contractual
relationship with the Government that was separate from
his “appointment-based” employment relationship. Id. at
15–16. Because Dr. Refaei’s employment at WBAMC was
by appointment and not by contract, the Claims Court
held that his claim for breach of contract “fail[ed] for lack
of jurisdiction.” Id. at 16. The Claims Court did not
address the requests for discovery and leave to amend in
Dr. Refaei’s response brief.
    We have       jurisdiction   pursuant   to   28   U.S.C.
§ 1295(a)(3).
                   STANDARDS OF REVIEW
    We review the Claims Court’s legal conclusion that it
lacked subject matter jurisdiction de novo. See Coast
Prof’l, Inc. v. United States, 828 F.3d 1349, 1354 (Fed. Cir.
2016). “In determining jurisdiction, a court must accept
as true all undisputed facts asserted in the plaintiff’s
complaint and draw all reasonable inferences in favor of
the plaintiff.” Trusted Integration, Inc. v. United States,
659 F.3d 1159, 1163 (Fed. Cir. 2011). However, when a
motion to dismiss challenges the truth of jurisdictional
facts, “[w]e review determinations of the Court of Federal
Claims regarding jurisdictional facts for clear error.”
Ferreiro v. United States, 350 F.3d 1318, 1324 (Fed. Cir.
2003).
    We review the Claims Court’s denial of a request for
jurisdictional discovery and denial of a motion for leave to
amend for abuse of discretion. Rick’s Mushrooms Serv.,
8                                   REFAEI   v. UNITED STATES

Inc. v. United States, 521 F.3d 1338, 1342 (Fed. Cir.
2008); Renda Marine, Inc. v. United States, 509 F.3d
1372, 1379 (Fed. Cir. 2007). “An abuse of discretion
occurs when a court misunderstands or misapplies the
relevant law or makes clearly erroneous findings of fact.”
Renda Marine, 509 F.3d at 1379.
                       DISCUSSION
                      I. Jurisdiction
    The Tucker Act gives the Claims Court jurisdiction
over, inter alia, claims against the United States founded
upon an “express or implied contract with the United
States.” 28 U.S.C. § 1491(a)(1). “The Tucker Act does not
create substantive rights. Rather, it is a jurisdictional
provision ‘that operate[s] to waive sovereign immunity for
claims premised on other sources of law (e.g., statutes or
contracts).’” Holmes v. United States, 657 F.3d 1303, 1309
(Fed. Cir. 2011) (quoting United States v. Navajo Nation,
556 U.S. 287, 291 (2009)). The sole basis for jurisdiction
pressed by Dr. Refaei on appeal is that he had an “express
or implied contract with the United States.” [See general-
ly Open. Br.] The dispositive inquiry in this case is
whether there was an employment contract between Dr.
Refaei and the Government enforceable under the Tucker
Act.
    The question of whether a Government employee
serves by appointment or by contract turns upon an
analysis of the statutes and regulations governing the
employment of the plaintiff and whatever evidence is
adduced as to a plaintiff’s particular status. United
States v. Hopkins, 427 U.S. 123, 130 (1976). We have
stated that there is a “well-established principle that,
absent specific legislation, federal employees derive the
benefits and emoluments of their positions from appoint-
ment rather than from any contractual or quasi-
contractual relationship with the government.” Chu v.
United States, 773 F.2d 1226, 1229 (Fed. Cir. 1985). In
REFAEI   v. UNITED STATES                                9

Kania v. United States, we observed, in dicta, that “[a]
contract between government and one of its employees is
possible, but it must be specifically spelled out as a con-
tract.” 650 F.2d 264, 268 (Ct. Cl. 1981). However, “[t]he
contract must be made by a person having authority.” Id.
    Dr. Refaei admits that he served by appointment.
See, e.g., Open. Br. 3. The question, therefore, is whether
he also had an employment contract enforceable under
the Tucker Act. It is Dr. Refaei’s burden to establish that
the Resident Agreement was such a contract. Reynolds v.
Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed.
Cir. 1988). We have not previously found an appoint-
ment-supplementing, enforceable employment contract.
The decisions in Chu and Kania make clear, at a mini-
mum, the strength of the presumption that federal em-
ployment is by appointment only, not also by contract.
Moreover, the Supreme Court recognized in United States
v. Fausto that Congress, in the Civil Service Reform Act,
broadly (if not completely) displaced Tucker Act remedies
for challenges to federal employment decisions. 484 U.S.
439, 454 (1988). We conclude that, if an appointment-
supplementing, enforceable federal contract could ever be
found (an issue we need not decide), Dr. Refaei has not
shown one here.
    The only statutory basis of employment identified by
Dr. Refaei is limited to VA appointment. The statute
authorizing the VA to establish residency programs and
to appoint qualified persons thereto provides that the
Secretary “may prescribe the conditions of employment of
persons appointed . . . including necessary training” and
that medical schools and other hospitals may participate
in the training of residents. 38 U.S.C. § 7406(b)–(c). Dr.
Refaei cites no authority for Dr. DeZee, WBAMC, or the
Army to enter into a supplemental employment agree-
ment governing the residency.
10                                   REFAEI   v. UNITED STATES

    Moreover, WBAMC’s letter offering Dr. Refaei a resi-
dency position expressly referred to his employment being
governed by the VA, not WBAMC. J.A. 435. And the
Resident Agreement itself points against, not toward,
Army authority to establish enforceable employment
terms. It recognizes that WBAMC’s training programs
“acquire residents through several different sources”
referred to in the Resident Agreement as “Fiscal Agen-
cies.” J.A. 92. These Fiscal Agencies, according to the
Resident Agreement, “provide the financial support and
specific benefits for their respective group[s] of residents”
and have their “own set[s] of formal policies” specific to
employment at the respective Fiscal Agencies. Id. The
Resident Agreement states that it merely “highlights the
various benefits provided to the residents” and “cannot
super[s]ede the specific policies of each agency.” Id.
    In view of the foregoing, we agree with the Claims
Court’s conclusion that Dr. Refaei failed to establish the
existence of Tucker Act contract jurisdiction. 2
         II. Requests for Discovery and Leave to Amend
    Dr. Refaei argues that the Claims Court abused its
discretion by implicitly denying (by not addressing) his
requests for leave to amend and for discovery. [Open. Br.
30–32]     The Government responds that “[n]umerous
circuit courts have held that a trial court does not abuse
its discretion by failing to address a request to amend a
complaint that is merely incorporated into a response to a
motion to dismiss,” Resp. Br. 21 (citing cases), and that
Dr. Refaei did not explain with sufficient specificity how

     2 Because we decide that Dr. Refaei served by ap-
pointment and not by contract, we need not evaluate
whether Dr. Refaei has shown the Residency Agreement
is money-mandating under the Tucker Act.
REFAEI   v. UNITED STATES                                 11

discovery would help him prove jurisdiction, id. at 23. We
agree with the Government.
    Dr. Refaei’s request for leave to amend did not specifi-
cally identify any new facts or arguments that would
overcome his failure to show the existence of an enforcea-
ble employment contract.         Therefore, any proposed
amended complaint would have been futile. Moreover, we
agree with the Government that the Claims Court did not
abuse its discretion by failing to address Dr. Refaei’s
request, because it was merely incorporated into a re-
sponse to a motion to dismiss. See, e.g., Meehan v. United
Consumers Club Franchising Corp., 312 F.3d 909, 913
(8th Cir. 2002) (“A district court does not abuse its discre-
tion in failing to invite an amended complaint when
plaintiff has not moved to amend and submitted a pro-
posed amended pleading.”)
    Similarly, Dr. Refaei’s requested discovery would not
have cured his failures of jurisdictional proof. Dr. Refaei
requested discovery on the relationship between WBAMC,
the Army, and ACGME in relation to the development of
due process requirements and WBAMC’s accreditation by
ACGME. J.A. 411. He also requested a copy of his em-
ployee handbook and certain pages from “WBAMC’s
Graduate Medical Education Handbook.” Id. However,
Dr. Refaei did not explain how or why any of this infor-
mation could be used to cure his failures of proof. Thus,
the Claims Court did not abuse its discretion in denying
his informal request for discovery.
                        CONCLUSION
    For the foregoing reasons, the Claims Court’s decision
granting the Government’s motion to dismiss for lack of
subject matter jurisdiction is
                        AFFIRMED