Charles J. Monzo v. United States

In the United States Court of Federal Claims

No. 12-724C

(Filed: November 27, 2013)

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CHARLES J. MONZO,

Plaintiff,

v.

THE UNITED STATES,

Defendant.

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OPINION

BRUGGINK, Judge

Plaintiff claims he is owed a cash award for a suggestion he made to his

employer, the Social Security Administration, pursuant to its Employee

Suggestion Program. Defendant has moved to dismiss the complaint for lack

of jurisdiction. The motion is fully briefed, and oral argument is unnecessary.

For the reasons explained below, we deny the motion to dismiss.

BACKGROUND 1

Federal agencies are authorized by 5 U.S.C. § 4503 to award cash

bonuses and/ or honorary recognition to employees who, “by [their]

suggestion, invention, superior accomplishment . . . contribute[] to the

efficiency, economy, or other improvement of Government operations or

achieve[] a significant reduction in paper work.” 5 U.S.C. § 4503 (2012). To

that end, the Social Security Administration (“SSA”) established its Employee

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These background facts are drawn from plaintiff’s complaint, attachments to

his complaint, and the attachments to defendant’s motion to dismiss. The facts

are mostly undisputed.

Suggestion Program “(ESP”) and promulgated rules for the program in its

Personnel Manual for Supervisors.

Plaintiff, Mr. Monzo, worked for the SSA for thirty years until he

retired in 2006. During the relevant time period, he worked at the Philadelphia

Regional Office for Quality Assurance. He suggested to SSA that it develop

an automated telephone system for beneficiaries to report wages to the SSA’s

Supplemental Security Income Program.2 Prior to an automated system,

program recipients had to deliver wage reports in hard format or via fax. The

data then had to be manually entered into each beneficiary’s record. Plaintiff

alleges that he first presented his idea to his supervisors orally in the summer

of 1998 and then again in September of 1998. He followed up the oral

suggestion with a formal written suggestion in March of 1999 to the Central

Suggestion Team in SSA’s Baltimore, Maryland Central Office. PX 3.3 SSA

designated the official suggestion as No. 9900789.

SSA denied the first written suggestion in April 1999 in a report, stating

that prior work teams had twice previously suggested the same thing. PX 4

(Suggestion Evaluation Report, Apr. 27, 1999). Plaintiff requested

reconsideration two years later on April 27, 2001, arguing that his oral

suggestion predated either of the cited team suggestions. SSA first deemed the

request to be a new suggestion and denied it in September 2001 because, at

that time, “SSA ha[d] made no commitment to implement” the automated

reporting system suggestion. PX 6 (Suggestion Evaluation Report, Sep. 21,

2001). The second denial did not mention the reason given in the first denial.

Plaintiff requested reconsideration of the September 2001 denial and

asked that his suggestion remain pending because SSA had undertaken a pilot

program to test an automated telephone reporting system in 2002. PX 7 (Apr.

22, 2002). That request was met by a denial on May 16, 2002. The reason

given by SSA was that plaintiff’s suggestion had already been “thoroughly

evaluated” and plaintiff had not submitted any new material “that warrant[ed]

an additional review.” PX 8. Plaintiff requested reconsideration once again

in June 2002, see PX 9, and enclosed a copy of a SSA document that contained

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Recipients of supplemental social security income must report actual wages

on a monthly basis.

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“PX” refers to those exhibits attached to plaintiff’s complaint. “DX” refers

to exhibits attached to defendant’s motion to dismiss.

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a corrective action plan in which SSA detailed a pilot program employing

“touchtone telephone technology for reporting purposes.” PX 10 at 8. This

was met with a denial on July 9, 2002. PX 11. This fourth decision gave as

a reason that there had been prior management consideration, citing the two

prior suggestions referenced in the first denial. It also stated that an additional

prior consideration of the idea had taken place in a July 1998 management

meeting. See id.

On November 29, 2002, apparently in response to an email sent by

plaintiff after the fourth denial, SSA informed Mr. Monzo that his suggestion

would remain pending while the pilot program was completed and a final

decision made on whether to implement. PX 13 (Letter from Phil Young,

Director, Office of Assistance and Insurance Program Quality, Nov. 29, 2002).

Finally, in 2008, plaintiff received the fifth denial of his suggestion.

The SSA Central Office again cited the July 10, 1998 management

consideration of the idea and stated that, because that consideration predated

plaintiff’s September 1998 oral suggestion, plaintiff was not eligible for an

award. In the interim, SSA concluded the pilot program and implemented a

telephonic wage reporting system after approval by the Office of Management

and Budget. Plaintiff continues to maintain that his suggestion predated any

management consideration and that he is thus owed an award for the

substantial savings resulting from the automated system.

DISCUSSION

In deciding a motion to dismiss, we construe the allegations in the

complaint in the light most favorable to plaintiff and assume all unchallenged

factual allegations to be true. See, e.g., Henke v. United States, 60 F.3d 795,

797 (Fed. Cir. 1995). Plaintiff has the burden of establishing subject matter

jurisdiction. McNutty v. Gen. Motors Acceptance Corp. Of Ind., 298 U.S. 178,

189 (1936). Defendant may challenge plaintiff’s allegations, and the court is

free to consider materials outside of the pleadings in deciding the question of

jurisdiction. Shoshone Indian Tribe of the Wind River Reservation v. United

States, 672 F.3d 1021, 1030 (Fed. Cir. 2012).

The Court of Federal Claims’ jurisdiction lies primarily in cases in

which a plaintiff can identify a source of law giving him the right to demand

the payment of money. The court’s principle jurisdictional statute allows the

court to “render judgment against the United States founded either upon the

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Constitution, or any Act of Congress or any regulation of an executive

department, or upon any express or implied contract with the United States .

. . in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1) (2006). This means

that a claimant must be able to identify a “money-mandating” provision of law,

regulation, or contract “affording it a right to money damages.” Terran v.

Sec’y of Heath and Human Servs., 195 F.3d 1302, 1309 (Fed. Cir. 1999).

Defendant contends that neither 5 U.S.C. § 4503 nor SSA’s Employee

Suggestion Program guidelines are money-mandating. Defendant also argues

that plaintiff has not alleged the necessary elements of an implied-in-fact

contract with SSA. The result, for defendant, is that plaintiff has not alleged

a substantive source of law giving rise to jurisdiction under the Tucker Act.

Plaintiff’s response is first that, although 5 U.S.C. § 4503 read alone

may not be money-mandating, in combination with the agency’s program

guidelines, the agency has relinquished the discretion afforded by the statute

and created a regulatory framework under which a reward payment is

mandated if certain conditions are met. Plaintiff also argues that he has

alleged the existence of a valid implied-in-fact contract.

I. SSA Has Obligated Itself To Pay Money Under The Employee Suggestion

Program Under Certain Conditions

There is no dispute between the parties that the statute, in isolation,

does not mandate the payment of money. This court has held likewise. See,

e.g., Cooley v. United States, 76 Fed. Cl. 549, 556-57 (2007) (discussion of

section 4503). Where the agency is vested with unfettered discretion, we have

held that employee suggestion programs do not provide a basis for jurisdiction

in this court. See, e.g., Anderson v. United States, 73 Fed. Cl. 199, 2001

(2006); Rosano v. United States, 9 Cl. Ct. 137, 1445-45 (1985). Those cases

cite the Court of Claims’ decision in Adair v. United States, in which the court

held that, “a statue providing for solely discretionary payment of money does

not give rise to a ‘right to recover money damages from the United States.’”

648 F.2d 1318, 1322 (1981) (quoting United States v. Testan, 424 U.S. 392,

396 (1976)). In that case, a statute authorizing special incentive pay to

physicians in the Public Health Service and the military was not money-

mandating because it gave discretion to award the pay under certain

circumstances but did not require it. Id. at 1322-23. This case does not end

there, however.

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Part 451 of Title 5 of the Code of Federal Regulations instructs

agencies to “develop one or more award programs for employees covered by

this subpart.” 5 C.F.R. § 451.103 (2013). Subpart 104 states that an agency

“may grant a cash, honorary, or informal recognition award . . . on the basis

of–(1) a suggestion, invention, superior accomplishment . . . that contributes

to efficiency, economy, or other improvement of Government operations.” Id.

§ 451.104. At this multi-agency level of regulation, agencies clearly retain

discretion whether to award payments. Our inquiry goes further, however.

Subchapter 3 of Chapter S451 of the SSA’s Personnel Manual for

Supervisors goes into great detail in providing guidelines for determining

whether to reward employee suggestions. The program guidelines detail who

is covered, definitions for various terms used, how employees submit a

suggestion, how a suggestion is to be evaluated, who evaluates it, limitations

on what factors may be considered, a time frame for decision, conditions for

award, amounts of award, reopening consideration of previously considered

suggestions, and reconsideration of previous suggestions. See DX 1 at 1-2

(Employee Suggestion Program Table of Contents).

In the section entitled “Awards,” the guidelines lay out the conditions

for granting an award and how to determine the amount of the award. The

conditions are listed as (a) “Adoption of the suggestion in full or in part, or if

the actual idea is not adopted but stimulates a better solution to an existing

problem; and [(b)] Management’s commitment to implement; no suggestion

is eligible for adoption unless it can and will be implemented.” DX 1 at 15.

The next subsection goes on to instruct how to calculate the award and points

to Exhibit 4 at end of the subchapter for further guidance. This subsection also

states that the “contribution must save $1,000 or more.”

The Federal Circuit has recognized that “a statute or regulation that

provides for payment of money can qualify as money-mandating if the

plaintiff’s claim is that the statute or regulation creates a right to payment upon

a showing that the plaintiff qualifies for that payment by satisfying designated

statutory or regulatory requirements.” Price v. Panetta, 674 F.3d 1335, 1339

(Fed. Cir. 2012). The statute or regulation “may grant the claimant a right to

recover damages either expressly or by implication.” Navajo Nation v. United

States, 537 U.S. 488, 506 (2003). If a statute or regulation does mandate the

payment of money, it is sufficient to trigger jurisdiction if plaintiff shows that

“he is within the class of plaintiffs entitled to recover under the money-

mandating source.” Jan’s Helicopter Serv. v. United States, 525 F.3d 1299,

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1307 (Fed. Cir. 2008). The question of whether the claimant actually “‘falls

within the terms of the statute’” or regulation is a merits issue. Greenlee

County v. United States, 487 F.3d 871, 876 (Fed. Cir. 2007) (quoting Fisher

v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005).

The program guidelines lay out two conditions for award. One is that

the suggestion is adopted in full or in part, or stimulates a better solution, and

the other condition is a commitment by the agency to implement the

suggestion. The guidelines define the term “Adopted Suggestion” to mean an

“idea evaluated by the office with primary functional responsibility, benefitting

the government and receiving a written commitment from management to

implement.” DX 1 at 3. “Implementation” occurs when “actions substantially

the same as those proposed by the suggester are effected by management, even

if minor modifications or improvements in the original proposal have been

made.” Id. These sections and definitions, read together, clearly suggest that

SSA will grant a cash award when the suggestion is evaluated by the office

with responsibility over the covered section, that office commits to implement

the suggestion, it is actually or will be actually implemented, and the

suggestion saves over $1000 dollars.

Defendant would have the court read language elsewhere in the

guidelines as preserving agency discretion as to whether to award. In section

D, “Evaluating Suggestions,” various factors are listed for evaluators to

consider. The second directs the agency to “[d]ecide whether or not to adopt

the suggestion and if the suggestion is adopted, consider granting an award.”

DX 1 at 12. This defendant avers is a clear statement that awards are not

mandatory even if all conditions are met. We disagree. That statement, read

in context with the rest of that section and surrounding sections, provides only

that evaluators are to decide whether the suggester is eligible for an award.

The fifth factor listed in the same section indicates this is the correct

understanding:

Evaluate each suggestion on its merits. Evaluators

should be careful not to disprove a suggestion just because the

idea appears to be job-related, an existing directive precludes the

use of the idea suggested or the suggested idea is already

covered by an existing directive. In certain situations,

suggestions of these types may be adopted. CSS should be

contacted for additional instructions.

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Id. This paragraph references, in part, the next section in the subchapter,

section G, “Special Considerations,” in which evaluators are required to

consider whether an adopted suggestion is “within the suggester’s job

responsibilities.” DX 1 at 13. If it is, “normally, . . . he/she will not be eligible

for an award” unless “the scope and magnitude of application of the suggestion

far exceed what would reasonably be expected of the employee.” Id. In this

special circumstance, even though an idea is to be adopted, the suggester will

not be paid an award. The implication is that, if that circumstance does not

apply, the suggester will be paid.

Section G also instructs evaluators to complete the whole adoption

package, which includes the evaluation report, signed SSA-171-U5 form, and

a “brief explanation of how the idea submitted falls within the suggester’s job

responsibilities.” Id. The SSA-171-U5 form is the form for processing a cash

award. The package is then sent to the final decision maker(s) at the Central

Suggestion Section (“CSS”). This suggests that, unless ineligible, adopted

suggestions come with cash awards if the benefit to the agency exceeds the

$1000 threshold.

Further buttressing this reading are the duties of the evaluators,

managers of evaluators, and the CSS. Evaluators are instructed to, among

other things, “[p]repare a Form SSA-171-U5, Recommendation for Cash

Award, if the suggestion is adopted and a cash award is applicable.” DX 1 at

5. Along with that form, the evaluator is to send a worksheet “to support

tangible benefits.” Id. That sheet is a form for calculating tangible benefits

in determining the award amount. See DX 1 at 16-17, Ex. 4. Among the duties

listed for supervisors or managers of evaluators is to “sign the appropriate

line(s) of the SSA-171-U5, Recommendation for Cash Award” if the

suggestion is to be adopted. DX 1 at 6. They are also instructed to assist the

CSS in determining “whether a suggestion falls within a suggester’s job

responsibilities.” Id. CSS’s duty list contains an instruction to “[e]nsure that

suggestion awards meet the guidelines, including (1) Attempting to determine,

if necessary, if a suggestion falls within the suggester’s expected job

responsibilities. (2) Reviewing and approving SSA-171-U5, Recommendations

for Cash Award, and award computations prior to authorization of funds.” DX

1 at 7. All of this suggests that, if a suggestion meets the criteria and the

suggester is eligible, an award should be forthcoming.

In the section dealing with how to compute award amounts, there is a

subsection called “Adoption With No Cash Award.” It provides that, “[i]f a

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suggestion is within the employee’s job responsibility or when the benefits

from an adopted employee suggestion have a value of less than $1000, no cash

award is payable.” DX 1 at 17. The subsection goes on to state that a thank

you letter may be sent anyway. No other scenario for adoption with no

payment is contemplated.

SSA has bound itself to these guidelines. Although it still has

discretion over how much to award, see DX 1 at 16-17, Exs. 4-5, the decision

whether to award a payment has been made. If the conditions are met, there

should be a payment. Cf. Ridenour v. United States, 44 Fed. Cl. 202, 208

(1999) (stating that a prior version of SSA’s ESP guidelines required the

payment of money if the employee was eligible and going on to hold that this

created an implied-in-fact contract between suggesters and SSA).

Plaintiff has alleged that he submitted a written suggestion, that the

suggestion was implemented, and that SSA nevertheless declined to pay him

an award. Plaintiff is within the class of claimants potentially entitled to

recover under the regulation. Nothing more is required by the Tucker Act to

trigger jurisdiction. Whether Mr. Monzo is entitled to an award–that is to say

whether there was prior agency consideration of the idea or whether some

special exception applies–is a merits question for another day. We have

jurisdiction over the complaint.

II. Whether Plaintiff Has Alleged the Existence Of An Implied-In-Fact

Contract Sufficient For Jurisdiction

Plaintiff also contends that he has plead the existence of an implied-in-

fact contract, which he alleges was formed when the agency implemented his

suggestion. Defendant denies that such a contract could have been formed

because the agency repeatedly told plaintiff that it was not adopting plaintiff’s

suggestion or that he was not eligible for award due to prior management

consideration. Plaintiff responds that, in essence, the agency accepted his offer

by performance when it implemented the telephone wage reporting system.

We need not reach the question of whether an implied-in-fact contract

was formed. As explained above, the guidelines themselves mandate payment

if certain conditions are met. In deciding whether SSA accepted plaintiff’s

offer (suggestion) by performance (implementing the automated system) we

would be confronted with the same issues. “Acceptance of an offer can be

manifested by parties’ conduct, and conduct alone can create an implied-in-

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fact contract.” Scott Timber Co. v. United States, 97 Fed. Cl. 685, 696 (2011),

rev’d on other grounds, 692 F.3d 1365 (Fed. Cir. 2012). Defendant’s

contention that it did not implement his suggestion is thus misplaced at this

juncture.

CONCLUSION

We have jurisdiction over the complaint. Whether plaintiff is entitled

to an award under the ESP is a separate question. Accordingly, defendant’s

motion to dismiss is denied.

______________________

ERIC G. BRUGGINK

Judge

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