Kerl v. United States

In the United States Court of Federal Claims

No. 24-2049C

(Filed: September 11, 2025)

)

LUKE KERL, )

)

Plaintiff, )

v. )

)

THE UNITED STATES, )

)

Defendant.

)

)

James Barrett Kelly, Alan Lescht & Associates, P.C., Washington D.C., for Plaintiff. On the

briefs was J. Cathryne Watson, Alan Lescht & Associates, P.C., Washington D.C.

Daniel Bertoni, Trial Attorney, Commercial Litigation Branch, Civil Division, United

States Department of Justice, Washington, D.C., for Defendant. With him on the briefs

were Yaakov M. Roth, Acting Assistant Attorney General, Patricia M. McCarthy, Director,

Eric P. Bruskin, Assistant Director. Of counsel was Wendy A. Harris, Attorney,

Commercial and Appellate Division, United States Postal Service.

OPINION AND ORDER

SOLOMSON, Chief Judge.

Plaintiff, Mr. Luke Kerl, claims that Defendant, the United States, owes him

unpaid salary pursuant to statute — a classic money-mandating claim within this Court’s

Tucker Act jurisdiction. The government moves to dismiss, arguing not that Mr. Kerl

actually received the salary payments at issue — a contention that, in any event, would

be more appropriate for summary judgment or trial — but that the government

nevertheless met its statutory duty to pay Mr. Kerl. How is it possible that the

government met its statutory duty to pay Mr. Kerl his salary even though he did not

receive payment? Third-party fraudsters executed a phishing scheme, and managed to

get the government to pay them instead of Mr. Kerl. According to the government, Mr.

Kerl was effectively paid when the government transmitted his salary to the fraudsters.

The government’s position does have a certain commonsense ring to it insofar as the least

cost avoider rule from the realm of law and economics theory may well counsel in favor

of placing responsibility on Mr. Kerl for falling prey to the phishing scheme and,

ultimately, for the lost salary. But this Court may neither legislate from the bench nor

engineer new rules as if it is engaged in the development of the common law. Instead,

this Court’s only role is to ask whether the government met its statutory obligation to pay

Mr. Kerl. For the reasons explained below, this Court concludes that, at least at this stage

of the case — and construing the alleged facts in the light most favorable to Mr. Kerl —

he has a plausible claim within this Court’s jurisdiction.

I. FACTUAL AND PROCEDURAL BACKGROUND 1

Mr. Kerl was employed by the United States Postal Service (“USPS”) from

sometime in December 2021 to sometime in the summer of 2023. ECF No. 1 (“Compl.”)

¶ 4. 2 As a Postal Service employee, Mr. Kerl earned an hourly wage, plus overtime pay

for work more than 40 hours per week. Id. ¶ 5. The terms of his employment required

that Mr. Kerl be paid every two weeks. Id. ¶ 6.

The Postal Service used an online platform called LiteBlue, both to track Mr. Kerl’s

hours, as well as to process his pay, which the USPS direct deposited into Mr. Kerl’s bank

account. Compl. ¶¶ 7–8. Mr. Kerl’s bank account information, including his account

number and routing number — for direct deposit purposes — were stored on LiteBlue’s

platform. Mr. Kerl maintained the login credentials for the LiteBlue website. Id.

Sometime in late 2022, scammers set up a fake website that mimicked the LiteBlue

website. Compl. ¶ 9. The scammers then lured Mr. Kerl to the fake website, where he

entered his login credentials for the actual LiteBlue website. Id. By doing so, he

unknowingly provided the scammers with his login credentials to the real LiteBlue

website. Id. This is known as a “phishing” scam. 3 The scammers subsequently used

1 For the purposes of deciding a motion pursuant to Rule 12(b)(1) and 12(b)(6) of the Rules of the

United States Court of Federal Claims (“RCFC”), the Court assumes that the facts pled in the

complaint are true. See e.g., Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993).

2 Citations

to specific page numbers within electronic filings are to the ECF-stamped page

numbers in the header of the filed PDF.

3 https://consumer.ftc.gov/articles/how-recognize-avoid-phishing-scams (“Scammers use

email or text messages to trick you into giving them your personal and financial information.”).

2

Mr. Kerl’s login information to access his LiteBlue account, where they replaced

Mr. Kerl’s bank account information with their own. Id. ¶ 10. As a result, the Postal

Service sent Mr. Kerl’s pay to the scammers. Id. This went on for about two pay periods,

during December 2022. Id. ¶¶ 11–13.

In total, Mr. Kerl did not receive approximately $4,000 in salary that he was owed.

Compl. ¶ 14. Mr. Kerl requested the payment of these wages from the Postal Service but

was denied. Id. ¶ 18.

On December 12, 2024, Mr. Kerl filed his complaint in this Court against the

government. Compl. In his complaint, Mr. Kerl sets forth three counts. In Count I,

Mr. Kerl alleges that the Postal Service violated the Fair Labor Standards Act (“FLSA”),

29 U.S.C. §§ 201–219, by failing to pay Mr. Kerl minimum wages during the pay periods

in which his pay was diverted to the scammers. Id. ¶¶ 21–23. Mr. Kerl claims that he is

entitled to unpaid minimum wages, statutory liquated damages, pre- and post-judgment

interest, and attorney’s fees. Id. ¶ 24.

In Count II, Mr. Kerl alleges that the Postal Service violated the FLSA by not

paying Mr. Kerl overtime owed to him during the pay periods in which the government

paid the scammers instead of Mr. Kerl. Compl. ¶¶ 26–29. For that violation as well,

Mr. Kerl claims that he is entitled to unpaid minimum wages, statutory liquated

damages, pre- and post-judgment interest, and attorney’s fees. Id. ¶ 30.

Finally, in Count III, Mr. Kerl alleges that he had an express or implied contract

with the USPS for it to pay Mr. Kerl for the hours that he worked, and that the

government breached that contract when the government failed to pay him properly.

Compl. ¶¶ 32–35. Mr. Kerl claims damages for breach of contract. Id. ¶ 36.

On March 12, 2025, the government filed a motion to dismiss pursuant to RCFC

12(b)(1) and 12(b)(6). ECF No. 6 (“Def. MTD”). On April 10, 2025, Mr. Kerl responded to

the government’s motion to dismiss. ECF No. 9. On April 24, 2025, the government filed

its reply to Mr. Kerl’s response. ECF No. 10 (“Pl. Resp.”). On July 23, 2025, the Court

heard oral argument on the parties’ motions. See ECF No. 15 (“Tr.”).

3

II. STANDARD OF REVIEW

Motions to dismiss for lack of subject-matter jurisdiction under RCFC 12(b)(1) can

be either facial or factual challenges. Perry v. United States, 149 Fed. Cl. 1, 11 (2020), aff’d,

2021 WL 2935075 (Fed. Cir. July 13, 2021). In a factual challenge, the government

“challenges the truth of jurisdictional facts alleged in the complaint,” and “the court

accepts as true [only] all uncontroverted factual allegations in the complaint, and construes

them in the light most favorable to the plaintiff.” Chemehuevi Indian Tribe v. United States,

104 F.4th 1314, 1320 (Fed. Cir. 2024) (cleaned up and emphasis added). A facial challenge,

on the other hand, “simply challenges the court’s subject matter jurisdiction based on the

sufficiency of the pleading’s allegations,” and all of the plaintiff’s non-conclusory factual

“allegations are taken as true and construed in a light most favorable to the complainant.”

Id. at 1320–21 (cleaned up).

Here, the government’s motion to dismiss for lack of standing asserts a facial

challenge to this Court’s jurisdiction to decide Mr. Kerl’s claims. Accordingly, this Court

assumes that all the nonconclusory factual allegations in Mr. Kerl’s complaint are true for

the purposes of resolving the government’s motion.

In deciding a motion to dismiss for failure to state a claim as a matter of law

pursuant to RCFC 12(b)(6), the Court views the facts in the light most favorable to the

plaintiff and accepts as true all factual allegations — but not conclusory legal assertions

— contained in the complaint. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007);

Am. Bankers Ass’n v. United States, 932 F.3d 1375, 1380 (Fed. Cir. 2019). For a plaintiff’s

complaint to survive a motion to dismiss, the Court — viewing the facts in the light most

favorable to the plaintiff — must conclude that “the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “[O]f course, a well-

pleaded complaint may proceed even if it strikes a savvy judge that actual proof of [the

facts alleged] is improbable, and that a recovery is very remote and unlikely.” Twombly,

550 U.S. at 556 (citations and internal quotation marks omitted); Chapman Law Firm Co. v.

Greenleaf Constr. Co., 490 F.3d 934, 938 (Fed. Cir. 2007) (noting that the Court’s duty is not

to determine “whether the claimant will ultimately prevail” when ruling on a 12(b)(6)

motion to dismiss).

On the other hand, a plaintiff may not simply plead “labels and conclusions” or “a

formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555

4

(citations omitted). The Court must dismiss a complaint “when the facts asserted by the

claimant do not entitle him to a legal remedy.” Lindsay v. United States, 295 F.3d 1252,

1257 (Fed. Cir. 2002).

III. SUBJECT-MATTER JURISDICTION

The Tucker Act, 28 U.S.C. § 1491, is this Court’s primary jurisdictional statute. It

provides, in part:

The United States Court of Federal Claims shall have

jurisdiction to render judgment upon any claim against the

United States founded either upon the Constitution, or any

Act of Congress 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). The Tucker Act “both confers jurisdiction on the Court of Federal

Claims and waives the sovereign immunity of the United States for claims for money

damages founded on, inter alia, acts of Congress.” Greenlee Cnty., Ariz. v. United States,

487 F.3d 871, 875 (Fed. Cir. 2007) (citing United States v. White Mountain Apache Tribe, 537

U.S. 465, 472 (2003); and Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en

banc in relevant part)).

More specifically, the Tucker Act contemplates “three types” of “underlying

monetary claims”: (1) contract claims; (2) illegal exaction claims where “the plaintiff has

paid money over to the [g]overnment, directly or in effect, and seeks return of all or part

of that sum” (or that the “[g]overnment has the citizen’s money in its pocket”); and

(3) money-mandating claims. Ontario Power Generation, Inc. v. United States, 369 F.3d 1298,

1301 (Fed. Cir. 2004) (citing United States v. Testan, 424 U.S. 392, 400 (1976), and Martinez

v. United States, 333 F.3d 1295, 1303–03 (Fed. Cir. 2003); and quoting Eastport S.S. Corp. v.

United States, 178 Ct. Cl. 599, 372 F.2d 1002, 1007–08 (1967)).

For money-mandating claims, a plaintiff cannot merely invoke the Tucker Act for

this Court to have jurisdiction; rather, “a plaintiff must identify a separate source of

substantive law that creates the right to money damages.” Greenlee Cnty., 487 F.3d at 875

(quoting Fisher, 402 F.3d at 1172; and citing White Mountain, 537 U.S. at 472). In Fisher,

5

our appellate court — the United States Court of Appeals for the Federal Circuit — held

that money-mandating “jurisdiction under the Tucker Act exists if the statute, regulation,

or constitutional provision that is the basis for the complaint ‘can fairly be interpreted as

mandating compensation by the Federal Government for the damage sustained,’ . . . and

is ‘reasonably amenable to the reading that it mandates a right of recovery in damages[.]’”

Jan’s Helicopter Serv., Inc. v. F.A.A., 525 F.3d 1299, 1307 (Fed. Cir. 2008) (first quoting United

States v. Mitchell, 463 U.S. 206, 217 (1983); then quoting White Mountain, 537 U.S. at 473;

and citing Fisher, 402 F.3d at 1173). “[C]onsistent with the requirement from Mitchell that

a source of law be money-mandating ‘for the damage sustained,’ that source must also

be reasonably amenable to the reading that the plaintiff is ‘within the class of plaintiffs

entitled to recover under the statute if the elements of a cause of action are established.’”

Id. (first quoting Mitchell, 463 U.S. at 217; and then quoting Greenlee, 487 F.3d at 876).

In sum, a plaintiff’s burden at the jurisdictional stage is not particularly onerous

for a money-mandating claim:

In determining whether the Court of Federal Claims has

jurisdiction, all that is required is a determination that the

claim is founded upon a money-mandating source and the

plaintiff has made a nonfrivolous allegation that it is within

the class of plaintiffs entitled to recover under the money-

mandating source. There is no further jurisdictional

requirement that the court determine whether the additional

allegations of the complaint state a nonfrivolous claim on the

merits.

Jan’s Helicopter, 525 F.3d at 1309; see also Brodowy v. United States, 482 F.3d 1370, 1375 (Fed.

Cir. 2007) (“Where plaintiffs have invoked a money-mandating statute and have made a

non-frivolous assertion that they are entitled to relief under the statute, we have held that

the Court of Federal Claims has subject-matter jurisdiction over the case.”). 4

This Court has a duty to verify its jurisdiction even when uncontested. Reoforce,

Inc. v. United States, 853 F.3d 1249, 1263 (Fed. Cir. 2017) (“[B]oth parties agree that

[plaintiff] has satisfied its standing requirements in this case. Nevertheless, because

4On the other hand, where a “plaintiff’s case does not fit within the scope of the [money-

mandating] source . . . plaintiff loses on the merits for failing to state a claim on which relief can

be granted.” Jan’s Helicopter, 525 F.3d at 1307 (quoting Fisher, 402 F.3d at 1175–76).

6

standing is a jurisdictional prerequisite, we must independently determine whether

[plaintiff] has satisfied its Article III standing requirements.”); see RCFC 12(h)(3). As

noted supra, Mr. Kerl’s complaint consists of three counts: the first two for money owed

pursuant to the FLSA, and the last for breach of contract. Putting aside the breach of

contract claim for now, there is no question this Court possesses subject-matter

jurisdiction to decide Mr. Kerl’s FLSA-based claims; they are classic money-mandating

claims.

The FLSA is a money-mandating statute and Mr. Kerl’s complaint contains non-

frivolous factual allegations that, when assumed to be true, demonstrate: (1) he is an

employee covered by the FLSA; and (2) that the government owes him money pursuant

to that statute. That is all that is necessary for Mr. Kerl to establish subject-matter

jurisdiction here, and the government does not assert otherwise. 5 See, e.g., Abbey v. United

States, 745 F.3d 1363, 1369 (Fed. Cir. 2014) (citing cases in support of the conclusion that

“straight-forward logic and 30–year–old, multi-circuit, apparently unbroken precedent”

demonstrates that “the Tucker Act applies to a claim against the government under the

monetary-damages provision of the FLSA”); see also id. at 1370 (“In 1974, Congress

unmistakably provided for judicial imposition of monetary liability on the United States

for FLSA violations.”); Alvarez v. United States, 169 Fed. Cl. 96, 99 (2024) (“FLSA is a

money-mandating source of law[.]” (citing Abbey, 745 F.3d at 1369)); Alston v. United

States, 174 Fed. Cl. 177, 182 (2024) (“The [FLSA] . . . is a money-mandating statute

conferring jurisdiction to the Court.”).6

To the extent the government challenges Mr. Kerl’s standing to pursue an FLSA

claim here, that is not a question of subject-matter jurisdiction. 7 And to the extent that

5 Tr. 5:14-19 (government counsel agreeing that “the Federal Circuit has been clear than an

[alleged] FLSA violation is within this Court’s jurisdiction”).

6 Indeed, our jurisdiction over FLSA claims against the government (exceeding $10,000) is

exclusive. Saraco v. United States, 61 F.3d 863, 866 (Fed. Cir. 1995) (“[T]he Federal Circuit in

Zumerling v. Devine held that jurisdiction of cases under the FLSA was provided only by the

Tucker Act.” (discussing Zumerling, 769 F.2d 745 (Fed. Cir. 1985)).

7 In Superior Waste Mgmt. LLC v. United States, this Court explained the difference between subject-

matter jurisdiction and standing:

In contrast to standing, subject matter jurisdiction “refers to the class of cases that

the court is authorized to hear.” Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d

1041, 1052 (Fed. Cir. 2012) (citing Rhone Poulenc, 880 F.2d at 402–03)); see also Palmer

v. United States, 38 Fed. Cl. 316, 320 (1997) (“Subject matter jurisdiction relates to

7

the government challenges Mr. Kerl’s right to recover pursuant to the terms of the FLSA,

that is a merits question, not a jurisdictional one. The Court next turns to the

government’s arguments in its motion to dismiss.

IV. DISCUSSION

A. Mr. Kerl’s Contract Claim Borders on the Frivolous and, In Any Event,

Was Withdrawn

The Court begins with Mr. Kerl’s breach of contract claim in Count III of his

complaint because it presents the most straightforward issue for resolution. See Compl.

¶ 32 (“A valid contractual agreement existed between Plaintiff and Defendant, either

expressly or impliedly.”). In short, this claim borders on the frivolous, as it “is well-

established that the federal employment relationship is generally governed by statute

rather than contract.” Lee v. United States, 41 Fed. Cl. 36, 39 (1998) (collecting cases). Thus,

“federal employees derive the benefits and emoluments of their positions from

appointment rather than from any contractual or quasi-contractual relationship with the

government.” Chu v. United States, 773 F.2d 1226, 1229 (Fed. Cir. 1985) (citations omitted);

see Doe v. United States, 513 F.3d 1348, 1359 (Fed. Cir. 2008) (“[F]ederal employee benefits

and pay are governed by statute, not by contract.”).

the area of substantive law that Congress has empowered the court to

adjudicate.”), aff’d, 168 F.3d 1310 (Fed. Cir. 1999); CYR Const. Co. v. United States,

27 Fed. Cl. 153, 161 (1992) (“Subject matter jurisdiction relates to the court's general

powers to adjudicate in specific areas of substantive law.”).

...

Because the concepts of standing and subject matter jurisdiction share some

characteristics, and one is considered a prerequisite to the other, they are often at

risk of conflation. But as courts across the nation have recognized, parties and

courts should not “conflate[ ] separate and distinct concepts: standing and subject

matter jurisdiction.” Wendland v. Gutierrez, 580 F. Supp. 2d 151, 153 n.2 (D.D.C.

2008) (rejecting argument that “the court has subject matter jurisdiction because

[plaintiff] satisfies the requirements for standing”); see also Nat’l Health Plan Corp.

v. Teamsters Loc. 469, 585 F. App’x 832, 834 n.2 (3d Cir. 2014) (“The question of

whether the district court had subject-matter jurisdiction is, however, distinct from

the question of whether [a plaintiff] ha[s] ‘standing to invoke the authority of a

federal court.’” (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 2006)).

169 Fed. Cl. 239, 253–54 (2024).

8

As a (former) USPS employee, Mr. Kerl’s employment was governed by the Postal

Reorganization Act of 1970, which specifies, with exceptions not relevant here, that “the

Postal Service shall appoint all officers and employees of the Postal Service.” 39 U.S.C.

§ 1001(a); see McLean v. United States, 538 F.2d 346 (Ct. Cl. 1976) (“[The Postal

Reorganization Act] provides that all officers and employees of the Postal Service are

required to be appointed rather than hired by contract.”); Diaz v. United States, 156 Fed.

Cl. 270, 276 (2021) (“[O]ne can only become a USPS ‘employee’ by ‘appointment.’”).

Mr. Kerl alleged no facts demonstrating that the USPS employed him via a

contract, nor is it likely he could have done so (as a matter of law). In the absence of any

non-conclusory facts in Mr. Kerl’s complaint — as opposed to conclusory statements of

law — supporting the existence of a contract, this Court doubts whether Mr. Kerl’s

contract claim could even survive a motion to dismiss for lack of jurisdiction pursuant to

RCFC 12(b)(1), let alone for failure to state a claim pursuant to RCFC 12(b)(6). The Court

need not decide either of those questions, however, because Mr. Kerl withdrew his

contract claim in the face of the government’s motion to dismiss. Pl. Resp. at 2 n.2 (“Mr.

Kerl does not dispute that his employment was pursuant to appointment, rather than

contract.”). As the Court sees no basis whatsoever for Mr. Kerl’s contract claim, the Court

cautions Mr. Kerl’s counsel to be more careful. Parties may not simply throw claims or

arguments against the judicial wall to see if the opposing party (or this Court) will let

them stick. See RCFC 11. 8

B. Mr. Kerl has Standing to Pursue his Money-Mandating Claim

The government asserts that “Mr. Kerl’s injury was not caused by the Postal

Service” and, therefore, “he lacks standing to bring this action[.]” Def. MTD at 8.

According to the government, Mr. Kerl’s complaint does not establish causation because

he “fails to connect his injury with any action of the Postal Service.” Def. MTD at 14

(emphasis added). The government’s standing argument has about as much merit as

Mr. Kerl’s contract claim.

1. Standing principles

The Supreme Court has developed “specific but overlapping doctrines rooted in

8 During oral argument, counsel for Mr. Kerl could not explain a reasonable basis for asserting

the contract claim. Tr. 38:12–40:6.

9

the [case-or-controversy] Article III inquiry, which must be met for a controversy to be

justiciable, including standing, ripeness, and a lack of mootness.” Prasco, LLC v. Medicis

Pharm. Corp., 537 F.3d 1329, 1336 (Fed. Cir. 2008); see also DaimlerChrysler Corp. v. Cuno,

547 U.S. 332, 352 (2006) (“The doctrines of mootness, ripeness, and political question all

originate in Article III's ‘case’ or ‘controversy’ language, no less than standing does.”).

Although Article III’s requirements, including standing, are jurisdictional in a

broad sense, they are more accurately characterized as prerequisites to subject matter

jurisdiction. See, e.g., Gardner v. Mutz, 962 F.3d 1329, 1337 (11th Cir. 2020) (discussing

“Article III’s jurisdictional prerequisites”); Hochendoner v. Genzyme Corp., 823 F.3d 724,

730 (1st Cir. 2016) “([S]tanding is a prerequisite to a federal court’s subject matter

jurisdiction[.]”); J W by & through Tammy Williams v. Birmingham Bd. of Educ., 904 F.3d

1248, 1264 (11th Cir. 2018) (“Article III standing is a prerequisite to a federal court’s

exercise of subject-matter jurisdiction.”); Rivera v. Internal Revenue Serv., 708 F. App’x 508,

513 (10th Cir. 2017) (“Under Article III of the Constitution, standing is a prerequisite to

subject matter jurisdiction[.]”). 9

In Lujan v. Defenders of Wildlife, the United States Supreme Court summarized the

test for “the irreducible constitutional minimum of standing” as follows:

First, the plaintiff must have suffered an injury in fact—an

invasion of a legally protected interest which is (a) concrete

and particularized and (b) actual or imminent, not conjectural

or hypothetical. Second, there must be a causal connection

between the injury and the conduct complained of — the

injury has to be fairly . . . trace[able] to the challenged action

of the defendant, and not . . . th[e] result [of] the independent

action of some third party not before the court. Third, it must

be likely, as opposed to merely speculative, that the injury

will be redressed by a favorable decision.

504 U.S. 555, 560–61 (1992) (cleaned-up).

9 See also California Valley Miwok Tribe v. Salazar, 281 F.R.D. 43, 46 (D.D.C. 2012) (“[A] party’s

Article III standing is a prerequisite to subject matter jurisdiction.”); Zanotti v. Invention Submission

Corp., 2020 WL 2857304, at *10 (S.D.N.Y. June 2, 2020) (concluding that “Article III standing is a

necessary, non-waiveable prerequisite to subject matter jurisdiction”).

10

The United States Court of Federal Claims, “though an Article I court, applies the

same standing requirements enforced by other federal courts created under Article III.”

Starr Int'l Co. v. United States, 856 F.3d 953, 964 (Fed. Cir. 2017) (quoting Anderson v. United

States, 344 F.3d 1343, 1350 n.1 (Fed. Cir. 2003)) (internal quotation marks omitted).

Indeed, the Federal Circuit has expressly applied Article III justiciability requirements to

Tucker Act claims against the United States. Glass v. United States, 258 F.3d 1349, 1355

(Fed. Cir. 2001). That makes a great deal of sense, as this Court is empowered to enter

final judgments on any “claim, suit, or demand against the United States arising out of

the matters involved in the case or controversy.” 28 U.S.C. § 2519 (emphasis added). That

statute tracks Article III's “case-or-controversy requirement,” Lujan, 504 U.S. at 560, and

thus imports its minimum standards. There are yet more reasons for applying Article III

requirements in this Court. See Emerald Int'l Corp. v. United States, 54 Fed. Cl. 674, 677 n.5

(2002) (explaining how various constitutional and prudential standing arguments apply

to this Court).

2. Mr. Kerl’s complaint establishes Article III standing

The government trains its fire on the causation prong of the standing test, 10 but the

government’s argument fundamentally misunderstands the nature of Mr. Kerl’s money-

mandating claim in two ways. First, a money-mandating claim is, by definition, a claim

based on inaction — the government’s failure to pay — and thus there cannot be an

“action” traceable to the government. That also means Mr. Kerl alleges precisely what

he must: that the USPS was obligated to, but did not, pay him pursuant to a money-

mandating statute. See Aitken v. United States, 162 Fed. Cl. 356, 362 (2022) (“Because

Plaintiffs are government employees seeking backpay and related relief, . . . they have

standing to raise those claims.”). Second, money-mandating claims are ordinarily strict

liability claims — the government’s intent or relative fault does not matter. Indeed,

counsel for the government agreed with this Court that “in every money-mandating

claim, the question of negligence or the question of fault is not a question. [Instead,] the

only question in every money-mandating claim is whether or not the [g]overnment met

its duty to pay, the ‘shall’ pay” language from the money-mandating provision at issue.

Tr. 16:11-18. 11

10 The government concedes both that it is “not disputing the injury-in-fact requirement of the

standing [test],” Tr. 6:13-14, and that it is “not challenging redressability either.” Tr. 8:3.

11 This Court supposes that the language of a putative money-mandating provision itself may

provide for some defense for non-payment based on lack of fault or scienter, but this Court cannot

recall any such language from any context. Neither could the government. Tr. 16:19-22.

11

Ordinarily, then, there are just two questions in a money-mandating case:

(1) whether the plaintiff is, in fact, within the class to whom money must be paid pursuant

to the putatively money-mandating provision, and (2) whether the plaintiff has been paid

already. But those are merits questions, not jurisdictional ones. And in any event,

Mr. Kerl’s allegation that the government owes him money pursuant to statute is an

allegation that the Postal Service injured him directly — i.e., via the inaction of non-

payment. The law requires nothing more of Mr. Kerl at this stage. Accordingly, and at

least for jurisdictional or standing purposes, it makes no difference whether Mr. Kerl

alleges either that the “Postal Service was aware or should have been aware of the

scammer’s activity” or that the “Postal Service systems themselves were compromised

by the scammer.” Def. MTD at 15. Because the FLSA is a money-mandating statute, and

because, during the relevant period, Mr. Kerl was a USPS employee, the only question is

whether the USPS has already paid Mr. Kerl. 12 He alleges the USPS did not pay him and

that suffices for this Court to conclude Mr. Kerl has standing to pursue the government

for such non-payment. In the language of the Supreme Court, Mr. Kerl is “himself the

object of the government . . . inaction he challenges.” Lujan, 504 U.S. at 562.

In sum, this Court rejects the government’s approach to standing here. The

government cannot simply excerpt statements of law from other contexts — e.g., from

Administrative Procedure Act cases, see Def. MTD at 13 — and plop them down in a

money-mandating case without careful analysis about how such principles might apply.

And while the government is generally correct that a plaintiff lacks standing where a

complaint “suggests no substantial likelihood that victory in this suit would” cure the

alleged harm, Simon v. E. Kentucky Welfare Rts. Org., 426 U.S. 26, 45 (1976), if Mr. Kerl

prevails, he would obtain a money judgment against the government. Such a money

judgment, of course, would address the very injury of non-payment about which he

complains. 13

12 See Tr. 17:3-6 (“COURT: …But the question here is just whether or not the Government paid

Mr. Kerl? [GOVERNMENT COUNSEL]: On the merits, yes, Your Honor.”); see also Tr. 15:15-19

(government counsel framing “the merits” question as “whether the Postal Service did satisfy the

FLSA”); Tr. 26:3-8 (government counsel agreeing that “the [merits] question is whether or not the

[g]overnment satisfied the terms of the money-mandating provision”).

13 The government cannot rely here on cases involving plaintiffs challenging the government’s

regulation of a third-party upstream from the plaintiff. Def. MTD at 13. In such cases, the

standing concern is that it is the independent choices or actions of the regulated third-party that

have injured the plaintiff, but not the government’s action. Clapper v. Amnesty Int’l USA, 568 U.S.

398, 414 n.5 (2013) (concluding that plaintiffs cannot show causation by “rely[ing] on speculation

about the unfettered choices made by independent actors not before the court” (quotation marks

12

C. Mr. Kerl’s Complaint States a Proper FLSA Claim

As noted above, the government does not dispute that FLSA-based claims are

generally money-mandating claims within this Court’s subject-matter jurisdiction.

Aitken, 162 Fed. Cl. at 362 (noting that “claims for unpaid overtime and liquidated

damages arise under FLSA, which is a money-mandating source of law” (citing Abbey,

745 F.3d at 1369)). The government nevertheless moves to dismiss Mr. Kerl’s FLSA

claims, for failure to state a claim pursuant to RCFC 12(b)(6), see Def. MTD at 18, on the

ground that the USPS did not violate the FLSA. According to the government, “the Postal

Service’s actions in issuing payment according to the bank information maintained in Mr.

Kerl’s LiteBlue account satisfied its obligations under the FLSA.” Id. In the government’s

view, the mere fact that the USPS “issue[d] payment” to someone, id. at 19, is sufficient.

See Tr. 17:10-17 (government arguing that, “in following its normal payroll procedures,”

the USPS “satisfie[d] the obligation to pay”).

At least at this stage of the case — and construing Mr. Kerl’s alleged facts in the

light most favorable to him — this Court cannot side with the government. 14

We begin with the actual language of the FLSA:

Every employer shall pay to each of his employees who in any

workweek is engaged in commerce or in the production of

goods for commerce, or is employed in an enterprise engaged

in commerce or in the production of goods for commerce,

wages at [specified] rates[.]

29 U.S.C. § 206(a) (emphasis added). Thus, the FLSA does not merely require an

omitted)). But Mr. Kerl’s case does not remotely present such a factual scenario. His complaint

is that the government failed to pay him — in other words, a direct injury the government caused

Mr. Kerl. And, “[w]hile the [government] may not be the only party responsible for the injury

alleged here, a plaintiff does not lack standing merely because the defendant is one of several

persons who caused the harm.” Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Norton,

422 F.3d 490, 500 (7th Cir. 2005) (citing Warth v. Seldin, 422 U.S. 490, 504-05 (1975)); see Drake v.

FirstKey Homes, LLC, 439 F. Supp. 3d 1313, 1323–24 (N.D. Ga. 2020) (“That a third party

contributed to the sequence of events leading to Plaintiff’s injury does not excuse Defendant,

which contributed, from suit based on standing.”).

14 Belizaire v. RAV Investigative & Sec. Servs. Ltd., 61 F. Supp. 3d 336, 353–54 (S.D.N.Y. 2014)

(“drawing all reasonable inferences in favor of Plaintiff” in an FLSA case).

13

employer to cut checks or transmit funds to someone in the ether. Rather, employers must

actually transmit the pay “to each . . . employee[.]” Id. The regulations similarly make

clear that “wages” are not “considered to have been paid” unless they are “received by

the employee” and “are paid finally and unconditionally.” 29 C.F.R. § 531.35; cf. 29 C.F.R.

§ 531.30 (providing that “[t]he reasonable cost of board, lodging, or other facilities may

be considered as part of the wage paid an employee” but only where the employee has

“receive[d] the benefits of the facility for which he is charged”).

When may an employer pay an employee’s salary to a third-party? One case is

“[w]here an employer is legally obliged, as by order of a court of competent and

appropriate jurisdiction, to pay a sum for the benefit or credit of the employee to a

creditor of the employee, trustee, or other third party, under garnishment, wage

attachment, trustee process, or bankruptcy proceeding.” 29 C.F.R. § 531.39(a). But that

is because such “payment to the third person [is] for the benefit and credit of the

employee[.]” Id. Only then is such a payment “considered equivalent, for the purposes

of [FLSA], to payment to the employee.” Id. Another case where an employer may pay

a third-party in lieu of its employee is “[w]here an employer is directed by a voluntary

assignment or order of his employee to pay a sum for the benefit of the employee to a

creditor, donee, or other third party.” 29 C.F.R. § 531.40(a). The latter regulation even

cautions that “[f]or the protection of both employer and employee it is suggested that full

and adequate record of all assignments and orders be kept and preserved and that

provisions of the applicable State law with respect to signing, sealing, witnessing, and

delivery be observed.” Id. § 531.40(b). The government does not argue that the salary

payments it made to the third-party fraudsters were “for the benefit or credit of the

employee” — here, Mr. Kerl. Nor does the government assert that it has an “adequate

record” of Mr. Kerl’s “assignment[]” of his salary to some other individual. Id.

Now, the government would no doubt respond that it is not arguing that the USPS

properly paid a third party, but rather that, in paying someone pursuant to the information

in Mr. Kerl’s LiteBlue account, the government satisfied any obligations to Mr. Kerl. But

that contention is difficult, if not impossible, to square with either 29 C.F.R. § 531.35 or

the case law. See Acosta v. Cent. Laundry, Inc., 2019 WL 3413514, at *6 (E.D. Pa. July 29,

2019) (“Wages are not considered paid for purposes of the FLSA until the employee receives

the wages ‘finally and unconditionally.’” (emphasis added) (quoting 29 C.F.R. § 531.35));

Solis v. A-1 Mortg. Corp., 934 F. Supp. 2d 778, 797–98 (W.D. Pa. 2013) (holding that an

employer’s FLSA obligation is only “met when the employer has paid, and the employee

has received, the wages ‘finally and unconditionally’” and that “[t]he employee must

14

actually receive the minimum wages” (emphasis added) (quoting 29 C.F.R. § 531.35)).

The government further argues that to the extent that Mr. Kerl did not receive his

pay, he is responsible, and not the government. Def. MTD at 21 (arguing that Mr. Kerl

“seeks to assign blame to the Postal Service for the scammer’s trickery” and “his own

submission of his credentials to the scammer”). But that sounds like an estoppel

argument, and “[e]stoppel . . . is an affirmative defense that must be pled[.]” Pei-Herng

Hor v. Ching-Wu Chu, 699 F.3d 1331, 1337 (Fed. Cir. 2012); see RCFC 8(c)(1). As such, it

would be inappropriate, if not error, to decide the issue at the motion to dismiss stage.

See Shropshire v. Fred Rappoport Co., 294 F. Supp. 2d 1085, 1097-98 (N.D. Cal. 2003)

(“Because [the applicability of equitable estoppel] turn[s] on disputed facts, it is improper

for the Court, on a Rule 12(b)(6) motion—the purpose of which is [to] test the sufficiency

of the pleadings—to resolve this issue.”); Go For It, Inc. v. Aircraft Sales Corp., 2003 WL

21504600, at *2 (N.D. Ill. June 27, 2003) (“Generally, equitable estoppel is a question of

fact inappropriate for resolution on a motion to dismiss.”); see also ABB Robotics, Inc. v.

GMFanuc Robotics, Corp., 52 F.3d 1062, 1064 (Fed. Cir. 1995) (“[A] party advancing an

estoppel defense must prove each of the elements thereof.”).

This Court further notes that some “[f]ederal courts have repeatedly rejected

equitable estoppel as an affirmative defense to an FLSA action, even where an employee

is required, but fails to, record overtime hours worked.” Morrison v. Exec. Aircraft

Refinishing, Inc., 434 F. Supp. 2d 1314, 1320 (S.D. Fla. 2005) (citing cases); see Caserta v.

Home Lines Agency, Inc., 273 F.2d 943, 946 (2d Cir. 1959) (Friendly, J.) (“The [FLSA]

obligation [to pay employees accurately] is the employer’s and it is absolute. He cannot

discharge it by attempting to transfer his statutory burdens of accurate record keeping,

29 U.S.C.A. 211(c), and of appropriate payment, to the employee.”).

Moreover, pursuant to the FLSA’s plain terms, factual questions regarding an

employer’s fault are relevant not to whether the employer owes an employee back pay,

but rather only to liquidated damages. 15 The United States District Court for the Eastern

District of New York summarized the law well:

15 See 29 U.S.C. § 260 (“Liquidated damages”) (“[I]f the employer shows to the satisfaction of the

court that the act or omission giving rise to such action was in good faith and that he had

reasonable grounds for believing that his act or omission was not a violation of the Fair Labor

Standards Act of 1938, as amended, the court may, in its sound discretion, award no liquidated

damages. . . .”).

15

“Under § 16(c) of the FLSA, 29 U.S.C. § 216(c), an employer

who violates the compensation provisions of the Act is liable

for unpaid wages ‘and an additional equal amount as

liquidated damages.’” Reich v. S. New Eng. Telecomm. Corp.,

121 F.3d 58, 71 (2d Cir. 1997). “Liquidated damages under the

FLSA are presumed in every case where violation of the

statute is found.” Gayle v. Harry’s Nurses Registry, Inc., No.

07–CV–4672 (NGG)(MDG), 2010 WL 5477727, at *6 (E.D.N.Y.

Dec. 30, 2010) (citing 29 U.S.C. § 260). To rebut the

presumption, defendant must show that it acted in good faith

and had objectively reasonable grounds for believing its

conduct did not violate the FLSA. Brock v. Wilamowsky, 833

F.2d 11, 19 (2d Cir.1987); see 29 U.S.C. § 260. Defendant’s

burden “is a difficult one to meet,” and “double damages are

the norm.” Brock, 833 F.2d at 19[.]

Widjaja v. Kang Yue USA Corp., 2011 WL 4460642, at *8 (E.D.N.Y. Sept. 26, 2011); see also

Solis, 934 F. Supp. 2d at 810 (explaining that “[a] willful [FLSA] violation involves an

employer’s knowledge or ‘reckless disregard’ of, or indifference to[,] the FLSA’s

requirements” (citing Supreme Court cases)); Martin v. Selker Bros., 949 F.2d 1286, 1299

(3d Cir. 1991) (“To avoid liability for liquidated damages, the employer must make a

showing of good faith and reasonable grounds for its conduct. If the employer fails to

carry its burden of demonstrating good faith and reasonable grounds, the award of

liquidated damages is mandatory.”); Chao v. Barbeque Ventures, LLC, 547 F.3d 938, 941–42

(8th Cir. 2008). The FLSA itself thus makes clear that where Congress wanted to make

issues of fault relevant to an FLSA claim, Congress knew how to do so. 16

Even in the context of liquidated damages, at least one circuit court has held that

an employer cannot simply outsource to a payroll management company the duty to pay

employees correctly, and then call it a day:

16 The government, in its briefs, did not identify a single case “that illustrates a money-mandating

claim where fault plays a role in whether the money-mandating claims is viable or not.” Tr. 24:21-

25 — Tr. 25:1; see Tr. 26:9:14 (government agreeing that it has no case law supporting “the

proposition that the Plaintiff’s fault can have some bearing on the [g]overnment’s duty to pay

under a money-mandating theory of recovery”).

16

The employers also contend that they established good faith

by engaging Payroll Management. For purposes of the FLSA,

Payroll Management is an “extension” of the employers.

Copeland v. ABB. Inc., 521 F.3d 1010, 1013 (8th Cir. 2008)

(finding a third-party administrator for worker compensation

claims an “employer” under the FLSA), citing 29 U.S.C.

§ 203(d) (defining the “employer” to include “any person

acting directly or indirectly in the interest of an employer in

relation to an employee”). This court has rejected the

proposition that delegating the payroll function to a

subordinate satisfies the FLSA:

[T]he mandate of the statute is directed to the employer

and he may not escape it by delegating it to others. The

duty rests on the employer to inquire into the conditions

prevailing in his business. He does not rid himself of

that duty because the extent of the business may

preclude his personal supervision, and compel reliance

on subordinates. He must then stand or fall with those

whom he selects to act for him . . . . the duty must be

held personal, or we nullify the statute.

Goldberg v. Kickapoo Prairie Broad. Co., 288 F.2d 778, 781 (8th

Cir. 1961), citing People ex rel. Price v. Sheffield Farms–Slawson–

Decker Co., 225 N.Y. 25, 121 N.E. 474 (N.Y. 1918) (Cardozo, J.).

Chao, 547 F.3d at 942–43. Perhaps, then, when the fraudsters accessed and edited

Mr. Kerl’s LiteBlue account without his permission, they essentially hacked the USPS.

The Court takes no final position on that question for now, but suffice it to say, at this

stage, the government did not address the status of LiteBlue as the government’s putative

agent. In other words, even if the fraudsters’ phishing attack targeted Mr. Kerl, one way

to view the facts pled in the complaint is that, ultimately, the government is responsible

for any erroneous information in LiteBlue. Cf. Perry v. City of New York, 78 F.4th 502, 514

(2d Cir. 2023) (“In any wage-and-hour regulatory scheme, somebody must bear ultimate

responsibility for recording time worked and for ensuring that payment is made. From

Caserta on, we have recognized that the FLSA places the payment obligation on

17

employers[.]”). In that regard, the government agrees that “Mr. Kerl didn’t tell the [USPS]

to send [his] paycheck somewhere else[.]” Tr. 27:22-25.

The district court’s decision in Patterson v. Parallel Emp. Grp., Inc., 2021 WL 9098098,

at *2–3 (S.D. Ind. Sept. 30, 2021), is instructive. In that case, the plaintiff employee alleged

that her employer paid her salary into a paycard account — without her knowledge and

consent — instead of the checking account she had designated. Id. at *1-2. The defendant

employer moved for judgment on the pleadings, arguing that the plaintiff employee

should be estopped from pursuing her claim due to her failure to object to the

mispayments, a practice that had been going on for years. The district court rejected the

estoppel argument: “Taking the allegations as true, as the court must at this stage, there

is an issue of fact as to whether [plaintiff] Patterson authorized [defendant] Parallel to

open the paycard account in her name.” Id. at *3 (noting that “the court must resolve all

reasonable inferences in [the plaintiff employee’s] favor,” and that plaintiff “allege[d] [the

employer] opened the paycard account without her consent or knowledge”).

Notably, the district court in Patterson further ruled the plaintiff lacked a proper

FLSA claim, but Patterson is readily distinguishable from this case in a manner that

supports Mr. Kerl. In Patterson, the plaintiff: (1) “acknowledge[d] that for three years,

Parallel paid all of her wages into the paycard account that was in her name”; (2) “d[id]

not allege that Parallel paid her less than the amount she was owed”; and (3) “d[id] not

allege that Parallel failed to pay her on the proper schedule.” 2021 WL 9098098, at *3. “In

other words,” according to the district court, “it [wa]s undisputed that Parallel paid [the

employee’s] wages on schedule and in full.” Id. Thus, in Patterson, the plaintiff’s “FLSA

claim appear[ed] to be based simply on the fact that the wages that she acknowledges

were paid in full were deposited into the incorrect account[.]” Id. But the plaintiff “ha[d]

not cited to any authority concluding an employer violates the FLSA when it deposits an

employee’s wages into the wrong account.” Id.

To put a finer point on it, there was no dispute in Patterson that the employer had

transmitted its employee’s wages to an account she owned; the employee simply alleged

it was the wrong account. In contrast, Mr. Kerl does not concede that he was paid. Nor

does Mr. Kerl allege that the USPS merely deposited his salary into the incorrect account

(but that he owned). Rather, Mr. Kerl alleges that the USPS, without proper

authorization, paid someone else his salary into an account he did not own. And although

the district court criticized the plaintiff in Patterson for “wait[ing] three years before

approaching [her employer] about her wages[,]” 2021 WL 9098098, at *3, Mr. Kerl’s

18

complaint does not appear to suffer from such an adverse fact.

****

The government is trying to square a circle. On the one hand, it argues that the

FLSA is satisfied merely by “sending or transmitting the money, the act of dispersing [the

pay.]” Tr. 20:5-7. The government then further asserts that all the FLSA requires is the

employer’s “good faith belief” it is paying the correct person. See, e.g., Tr. 33:10-13; Tr.

36:13-17. But that means — and the government agreed to this, in line with common

sense — that an employer cannot just send an employee’s pay “to whomever [it] want[s].”

Tr. 20:8-10. Incredibly, however, the government then also asserts that its payment to

third-party hackers would satisfy the FLSA even if they had hacked the government

payroll system directly. Tr. 46:23—48:9; but see Tr. 50:13-16 (government counsel agreeing

that “[t]he [merits] question is whether or not . . . the employer remitted payment to the

employee” (emphasis added)). And yet all along the government repeatedly suggests that

Mr. Kerl, rather than the government, is responsible for the phishing scheme’s success —

an argument which appears to implicate notions of relative fault, despite the

government’s repeated assertions that it is not making such an argument. The Court is

left thoroughly confused about the government’s precise position.

In any event, the Court is far from convinced that issues of relative fault — i.e., as

between Mr. Kerl and the USPS — are at all relevant to a money-mandating claim,

generally, or to an FLSA claim, in particular (except where provided by statute). Indeed,

the government could not explain how its view could be reconciled with the general rule

that money-mandating claims — and specifically “pay statutes”— are “strict liability”

claims. Tr. 34:19-23. 17 But, at least at this stage of the case — and construing the facts

alleged in the light most favorable to Mr. Kerl — he has properly stated a money-

mandating claim for compensation pursuant to the FLSA. He is therefore entitled to

proceed to discovery. If the government wants to assert some sort of affirmative defense

based on estoppel or on relative fault — assuming the government can convince this

Court that such a defense exists — it is free to pursue the factual predicates for such

17 See, e.g., Turner v. Chipotle Mexican Grill, Inc., 123 F. Supp. 3d 1300, 1308 (D. Colo. 2015) (“The

FLSA, with limited exceptions, is a strict-liability statute. Plaintiffs are not required to

demonstrate invidious intent or any other type of culpable mind.”); Higar v. Task Force of Texas,

LLC, 2018 WL 3849853, at *1 (E.D. Tex. July 12, 2018) (“Generally, however, the FLSA is a ‘strict

liability’ offense, meaning an employer’s intent to comply is not relevant to whether the employer

violated the statute.”), report and recommendation adopted, 2018 WL 3837862 (E.D. Tex. Aug. 11,

2018).

19

theories during discovery. As of yet, however, the government has not provided this

Court with a reason to conclude that Mr. Kerl lacks a viable claim on the facts pled.

V. CONCLUSION

For the forgoing reasons, the government’s motion to dismiss pursuant to

RCFC 12(b)(1) and 12(b)(6) is DENIED.

IT IS SO ORDERED.

s/Matthew H. Solomson

Matthew H. Solomson

Chief Judge

20