America v. Barreto

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

___________________________________________

)

RICHARD AMERICA, )

)

Plaintiff, )

)

v. ) Civil Action No. 03-1807 (PLF)

)

KAREN G. MILLS, )

Administrator, Small Business Administration, )

)

Defendant.1 )

___________________________________________)

MEMORANDUM OPINION AND ORDER

This matter is before the Court on the defendant’s renewed motion to dismiss the

case on the ground that this Court is without jurisdiction to determine whether the defendant

breached a settlement agreement between plaintiff and defendant — a determination that

defendant maintains must be made before plaintiff may proceed to trial on his underlying Title

VII claims.2 Defendant argues that the question of whether the settlement agreement was

breached is within the exclusive jurisdiction of the Court of Federal Claims. Accordingly,

defendant argues, this Court either must dismiss the case or transfer it to the Claims Court to

determine that contract question before either that Court or this one may consider plaintiff’s Title

VII claims.3

1

Under Rule 25(d)(1) of the Federal Rules of Civil Procedure, Administrator Karen

G. Mills has been substituted for former Administrator Steven Preston. FED . R. CIV . P. 25(d).

2

Defendant also requests a continuance of the trial which is now scheduled to

begin on January 13, 2010.

3

It is quite clear to this Court, however, that the Court of Federal Claims has no

jurisdiction over the Title VII claims. See Hansson v. Norton, 411 F.3d 231, 236 (D.C. Cir.

The Court heard oral argument on the motion to dismiss on December 23, 2009.

Defendant argued in its papers and at oral argument that its position is compelled by the decision

of the D.C. Circuit in Brown v. United States, 389 F.3d 1296 (D.C. Cir. 2004), and its progeny.

At the urging of counsel for the defendant, the Court has re-read the D.C. Circuit’s opinion in

Brown, Judge Collyer’s opinion for the district court in Brown, and every post-Brown decision

cited in defendant’s brief. Upon review of the case law, the Court is more convinced than ever

that — despite the vigor and persistence of defendant’s counsel — the defendant is flat-out

wrong in its reading of the case law.

Defendant argues that this Court lacks jurisdiction to decide whether the

settlement agreement (a contract) was breached, because only the Court of Federal Claims has

jurisdiction to consider suits claiming breach of contract against the government. Defendant

made this same argument in briefing its original motion to dismiss; its Notice of Supplemental

Authority cited Brown for the proposition that “jurisdiction to decide whether an agency

breached a settlement agreement [in a Title VII case where damages sought exceed $10,000] lies

exclusively in the Court of Federal Claims.” Notice of Supplemental Authority at 1. The Court

denied defendant’s motion to dismiss on December 27, 2006, America v. Preston, 468 F. Supp.

2d 118 (D.D.C. 2006), and its motion to reconsider on February 12, 2007. See America v.

Preston, Civil Action No. 03-1807, Order, Dkt. No. 29 (D.D.C. Feb. 12, 2007).

2005) (collecting cases); Munoz v. England, Civil Action No. 05-2472, 2006 WL 3361509 at *5

(D.D.C. Nov. 20, 2006); Westover v. United States, 71 Fed. Cl. 635, 640-41 (Fed. Cl. 2006); id.

at 640 (“This court is unable to reinstate the Title VII claim, let alone evaluate that claim . . .

Reinstatement of the discrimination claim comes within the exclusive jurisdiction of the district

court.”); Schnelle v. United States, 69 Fed. Cl. 463, 466-67 (Fed. Cl. 2006). Therefore, if

defendant’s argument is correct, two separate courts each would have to adjudicate a part of this

case for it to be finally resolved.

2

As defendant correctly points out, the Tucker Act provides that the Court of

Federal Claims has exclusive jurisdiction to render judgment on any claim against the United

States for more than $10,000 that is founded on an express or implied contract with the United

States. 28 U.S.C. §§ 1346(a), 1491(a)(1). See Greenhill v. Spellings, 482 F.3d 569, 575 (D.C.

Cir. 2007); Hansson v. Norton, 411 F.3d at 232. In this case, however, plaintiff has not asserted

any breach of contract claim nor sought money damages for any such breach of contract. The

question whether the settlement agreement was breached arises solely because (as defendant

argues) plaintiff is not entitled to pursue his Title VII claims in the absence of a breach. It is a

predicate question that must be decided either by this Court or by the Court of Federal Claims.

Brown was quite different. It was a case in which the plaintiff expressly alleged a

breach of contract, a settlement agreement of a discrimination claim, as a basis for monetary

relief. As Judge Collyer noted:

It is true that the Settlement Agreement did not contain a total

waiver of Ms. Brown’s right to sue in federal court. In the event of

a breach, it was provided that Ms. Brown may request either

enforcement of the terms of the settlement or reinstatement of the

original EEO charge. Having amended her complaint to allege a

breach of the Settlement Agreement, Ms. Brown has made her

election and cannot reinstate the 1994 allegations.

Brown v. United States, 271 F. Supp. 2d 225, 228-29 (D.D.C. 2003) (emphasis added).4 Since

Ms. Brown elected to add a claim for relief expressly based on an alleged breach of contract and

sought money damages of more than $10,000, the D.C. Circuit concluded that the Court of

4

Contrary to defendant’s assertion, Judge Collyer did not direct or order plaintiff in

Brown to add a breach of contract claim; she “offered Ms. Brown an opportunity to amend her

complaint,” and Ms. Brown accepted the offer by filing an amended complaint. See Brown v.

United States, 271 F. Supp. 2d at 228.

3

Federal Claims had exclusive jurisdiction over that contract claim:

Brown alleges the United States Department of Agriculture

breached the terms of its settlement agreement with her and that its

breach entitles her both to damages in excess of $10,000 and to the

reinstatement of her administrative complaint alleging

discrimination and retaliation in violation of Title VII. The

Government points out, and Brown now agrees with respect to

Count III, this case should have been brought in the Court of

Federal Claims pursuant to the Tucker Act because she advances a

contract claim against the United States in excess of $10,000.

Brown v. United States, 389 F.3d at 1297 (emphasis added).

The court of appeals reached the conclusion that the Court of Federal Claims had

jurisdiction not because Ms. Brown had to first prove that the government breached the

settlement agreement as a predicate to seeking relief under Title VII, but “because the contract

question arises in a suit against the United States for more than $10,000 in damages.” Brown v.

United States, 389 F.3d at 1297; see also Brown v. United States, 84 Fed. Cl. 400, 403 (Fed. Cl.

2008) (jurisdiction in Court of Federal Claims because Brown advanced contract claim against

United States government for more than $10,000). Plaintiff has brought no breach of contract

claim in this case, and so jurisdiction does not lie exclusively in the Court of Federal Claims. Cf.

Greenhill v. Spellings, 482 F.3d at 573 (“Jurisdiction is determined by looking to the complaint.

If Greenhill explicitly or in essence seeks money damages in excess of $10,000, jurisdiction rests

exclusively with the Court of Federal Claims.”); see also Hansson v. Norton, 411 F.3d at 232,

234; Keith v. United States R.R. Ret. Bd., Civil Action No 02-1054, 2006 WL 2085389 at *5

(D.D.C. July 25, 2006).

By contrast, in Saksenasingh v. Secretary of Education, 126 F.3d 347 (D.C. Cir.

1997), the plaintiff did not seek to recover for breach of the Title VII settlement agreement, but

4

— as plaintiff has done here — brought only claims of substantive Title VII violations. It was

the defendant that raised the prior settlement agreement as a defense. The plaintiff in

Saksenasingh argued that she could repudiate the settlement because of the defendant’s breach,

and that if a breach was found, she could pursue her underlying claims in this Court. The court

of appeals agreed, concluding that the district court had jurisdiction to decide the breach issue:

Where a party raises a settlement agreement as a defense,

the District Court must factually determine the issues surrounding

the agreement. See Bowden v. U.S., 323 U.S. App. D.C. 164, 106

F.3d 433, 439 (D.C. Cir. 1997) (District Court resolves factual

issues regarding Title VII settlement agreement). Faced with

Saksenasingh’s assertion of her original discrimination complaint

and the Department’s defense that the settlement agreement barred

the suit, the judge or jury in the District Court, depending upon the

circumstances, should have determined, as a threshold matter,

whether in fact the Department had breached the settlement

agreement. . .

On remand, if it is found that the Department breached,

then the settlement agreement cannot bar Saksenasingh’s original

claim. However, if it is found that the Department did not breach

the agreement, then the settlement will bar Saksenasingh from

proceeding with her original claim.

Saksenasingh v. Secretary of Education, 126 F.3d at 350; see id. at 351 (“The defense that the

settlement agreement bars Saksenasingh’s suit is substantive, not jurisdictional.”). That is

precisely the situation presented here.5 The D.C. Circuit decision in Saksenasingh therefore

controls this case.6

5

While in this case, defendant does not raise the settlement agreement as an

affirmative defense, it does insist that the question of the settlement agreement’s breach must be

resolved before the Title VII claims can proceed to trial.

6

As for questions regarding whether there was a breach of the settlement agreement

because testers were involved or whether the breach of the settlement agreement was material,

5

Accordingly, for the reasons stated above, it is hereby

ORDERED that defendant’s renewed motion to dismiss [Docket 65] is DENIED;

and it is

FURTHER ORDERED that the parties shall, in their Joint Pretrial Statement, due

to be filed on January 8, 2010, address the following questions: (1) how and when to resolve the

breach of contract issue; (2) whether and how to bifurcate the trial of the issues in this case; and

(3) whether to postpone all or a portion of the trial now scheduled to commence on Janaury 13,

2010.

SO ORDERED.

/s/________________________

PAUL L. FRIEDMAN

United States District Judge

DATE: December 30, 2009

the Court has already decided those questions, twice rejecting defendant’s arguments. The Court

will not visit these issues again.

6