Nesselrode v. United States

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No. 16-26C FILED

(Filed: July 13,2016)

JUL I 3 2016

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GREGORYP.NESSELRODE, * U.S. COURT OF

:f FEDERAL CLAIMS

Plaintifl :r

TuckerAct;28 U.S.C. $ 1491; Pro Se

'r Plaintiff; Motion to Dismiss; RCFC

rrf l2(b)(1); RCFC 12(bX6); Res Judicata;

* Civil Fraudl Student Loan Default

THE UNITED STATES, :i

*

Defendant. *

* !t :1. * * * * * * *'t * * :+ * * * * *'1. * * * + * * * * * * * * * * * * *

Gregory P. Nesselrode, Columbus, OH, pfs._sg.

Vito Solitro, United States Department of Justice, Washington, DC, for defendant.

OPINIONAND ORDER

SWEENEY, Judge

Before the court are (l) plaintiff s application to proceed in forma pauperis (.'IFP'),

(2) plaintiff s motion for judgment, (3) defendant's motion to dismiss plaintiffls first amended

complaint, (4) plaintiff s motion to strike defendant's motion to dismiss plaintiff s first amended

complaint, and (5) plaintiff s motion for leave to file a second amended complaint. For the

reasons set forth below, the court grants plaintiff s IFP application and defendant's motion to

dismiss plaintifPs first amended complaint. In addition, the court denies plaintiff s motion for

leave to file a second amended complaint and denies, as moot, the remaining motions.

I. BACKGROUND

A. Factual History

Neither the facts nor the allegations in plaintilfs first amended complaint are clearly

articulated. However, from the appendix to plaintiff s original complaint,t the court gleaned the

following facts: ( I ) ftom 1992 to 2013 , plaintiff bonowed various sums of money from the

I

The court deems the appendix as having been refiled with plaintiffs first amended

comnlaint.

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federal govemment to finance his education at several institutions,2 App., Ex. E; (2) at some

point, plaintifFs student loans were financed by Direct Loans, Sallie Mae, and Navient, id. at

Exs. A-C; (3) according to plaintiffs credit report, as ofNovember 22,2015, he had outstanding

debts of $16,068 and $49,456, id. at Ex. D; and (4) according to plaintiffs federal student aid

summary, as of November 26,2015, he had two outstanding loans-the first, a direct

consolidated unsubsidized loan of$12,844, made on September 18, 2000, and the second, a

direct consolidated subsidized loan of$39,574, made on September 18, 2000, id. at Ex. E.3

Furthermore, it appears that the gravamen of plaintiff s complaint is that the United

States Department of Education erroneously claims that he defaulted on two of his loans. Am.

Compl. 6-7. Finally, it appears that plaintiff alleges various statutory violations by defendant, as

well as fraud and breach ofcontract claims, id. at 6-7, wtd seeks both injunctive and monetary

relief, id. at 19-20.

B. Procedural History

In2013, plaintiff sued the United States Department of Education in the United States

District Court for the Westem District of Washington ("Washington District Court"). App., Ex.

L. On August 6,2014,the Washington District Court granted defendant's motion for summary

judgment, finding that it lacked jurisdiction over plaintifPs claim that defendant wrongfully

accused him of defaulting on two consolidated school loans. Id. at 2. On April l4,20l5,the

United States Court of Appeals for the Ninth Circuit ("Ninth Circuit") held "that the questions

raised in [plaintiffs] appeal are so insubstantial as not to require further argument'" App., Ex. M

at 1. On [:ur;te22,2015, the Ninth Circuit denied plaintiff s motion for reconsideration en banc

and on July l, 2015, it issued a mandate. Id. aI2-3.

Plaintiff filed his original complaint and IFP application on January 7, 201 6. Two

months later, on March 7,2016, defendant frled a motion to dismiss. Shortly thereafter, on

March22,2016, plaintifffiled a motion to amend his complaint. That motion was granted, asof

right, the next day. On April 22,2016, plaintifffiled a motion for judgment and on May 3,2016,

defendant again filed a motion to dismiss. On May 12,2016, plaintiffmoved to strike the

motion to dismiss and on June 17,2016, plaintiff moved, for the second time, to amend his

comolaint.

2 Disbursements of federal loan monies were made to (1) Front Range Community

College-Westminster Campus, (2) Colorado State University, (3) Linn-Benton Community

College, (4) The University of Montan4 and (5) Montana State University Bozeman. App., Ex.

E.

3 In his first amended complaint, plaintiff refers to the two loans as loan number

15 and

loan number 16, presumably because they appear on lines 15 and 16 of his federal student aid

summary.

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II. LEGALSTANDARDS

A. Pro $9 Plaintiffs

The United States Court of Federal Claims ("Court of Federal Claims") holds pleadings

of a nro se plaintiffto less stringent standards than those of litigants represented by counsel.

Haines v. Kemer,404 U.S. 519,520 (1972). Courts have "strained ltheir] proper role in

adversary proceedings to the limit, searching . . . to see ifplaintiffhas a cause ofaction

somewheredisplayed." Rudererv.UnitedStates,4l2F.2dl2SS,1292(Ct.Cl. 1969)' Although

plaintiff s pleadings are held to a less stringent standard, such leniency "witi respect to mere

formalities does not relieve the burden to meet judsdictional requiremcnts." Minehan v. United

States, 75 Fed. Cl. 249, 253 (2007); see also Kelley v. Sec'y. U.S. Deo't of Labor'812F.2d

1378, 1380 (Fed. Cir. 1987) C'tAl court may not similarly take a liberal view of that

jurisdictional requirement and set a different rule for pro se litigants only."); Bemard v. United

States, 59 Fed. Cl. 497,499 (noting that plq re plaintiffs are not excused from sadsrying

jurisdictional requirements), afPd, 98 F. App'x. 860 (Fed. Cir. 2004). As the Court of Federal

Claims stated in Demes v. United States, "[w]hile a court should be receptive to p!Q-!g plaintiffs

and assist them, justice is ill-served when ajurist crosses the line from finder of fact to

advocate." 52 Fed. Cl. 365,369 (2002).

B. Subject Matter Jurisdiction

Whether the court possesses jurisdiction to decide the merits of a case is a threshold

matter. See Steel Co. v. Citizens for a Better Env't, 523 U'S. 83,94-95 (1998); see also

Matthews v. United States,72Fed. C\.274,278 (2006) (stating that subject matter jurisdiction is

"an inflexible matter that must be considered before proceeding to evaluate the merits ofa

case"). "Without jurisdiction the court caffiot proceed at all in any cause. Jurisdiction is power

to declare the law, and when it ceases to exist, the only function remaining to the court is that of

announcing the fact and dismissing the cause." Ex parte Mccardle, 74 U.S. (7 Wall.) 506,514

(1868). The parties or the court sua sponte may challenge the court's subject matter j urisdiction

at any time. Arbaugh v. Y & H Com., 546 U.S. 500, 506 (2006)'

The ability of the Court of Federal Claims to entertain suits against the United States is

limited. "The United States, as sovereign, is immune from suit save as it consents to be sued."

United States v. Sherwood, 3i2 U.S. 584, 586 (1941). The waiver of immunity'tannot be

implied but must be unequivocally expressed." United States v' King, 395 U.S. 1,4 (1969)'

Further, "[w]hen waiver legislation contains a statute of limitations, the limitations provision

constitutea a condition on the waiver of sovereign immunity." Block v. North Dakota ex rel. Bd.

ofUniv. & Sch. Lands,461 U.S. 273,287 (1983).

The Tucker Act, the principal statute goveming the jurisdiction of this court, waives

sovereign immunity for claims against the United States, not sounding in tort, that are founded

upon thi Constitution, a federal statute or regulation, or an express or implied contract with the

United States. 28 U.S.C. $ 1a91(aXl) (2012). However, the Tucker Act is merely a

jurisdictional statute and "does not create any substantive right enforceable against the United

States for money darnages." UnitedStatesv. Testan,424lJ.S.392,398 (1976). Instead, the

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substantive right must appear in another source of law, such as a "money-mandating

constitutional provision, statute or regulation that has been violated, or an expless or implied

contract with the United States.'{ Loveladies Harbor. Inc. v. United States ,27 F .3d' 1545, 1554

(Fed. Cir. 1994) (en banc).

"A statute or regulation is money-mandating for jurisdictional purposes if it can fairly be

interpreted as mandating compensation for damages sustained as a result of the breach ofthe

duties it imposes." Ferreirc v. United States, 501 F.3d 1349, 1351-52 (Fed. Cir. 2007) (citations

and intemal quotation marks omitted). Such a determination is made pwsuant to a two-part test:

First, the court determines whether any substantive law imposes

specific obligations on the Govemment. If that condition is met,

then the court proceeds to the second inquiry, "whether the

relevant source of substantive law can be fairly interpreted as

mandating compensation for damages sustained as a result ofa

breach of the duties the goveming law imposes."

Samish Indian Nation v. United States, 657 F.3d 1330, 1335 (Fed. Cir. 201 1) (quoting United

States v. Navajo Nation, 556 U.S. 287,290-91 (2009) (intemal quotation marks omitted)). In

other words, "to satisfu the jurisdictional requirements of the Tucker Act, the plaintiff must point

to an independent, substantive source of law that mandates payment from the United States for

the injury suffered." Johnson v. United States, 105 Fed. Cl.85,91 Q0I2).

In addition, to fall within the court's jurisdiction, any claim against the United States filed

in the Court of Federal Claims must be "frled within six years after such claim first accrues." 28

U.S.C. $ 2501; see also John R. Sand & Gravel Co. v. United States, 552 U.S' 130' 133-35

(2008) (providing that the limitations period set forth in 28 U.S.C. $ 2501 is an "absolute" limit

on the ability of the Court of Federal Claims to reach the merits of a claim).

C. Motions to Dismiss

In the instant action, defendant seeks the dismissal ofplaintiffs case on two grounds.

First, defendant contends that this court lacks subject matter jurisdiction pursuant to RCFC

12(bX1). Second, defendant contends that plaintiff fails to state a claim upon which relief may

be granted pursuant to RCFC 12(bX6).

In ruling on motions to dismiss, the court assumes that the allegations in the complaint

are true and construes those allegations in the plaintifPs favor. Henke v. United States, 60 F.3d

795,797 (Fed. Cir. 1995). With respect to a motion to dismiss for lack of subject matter

jurisdiction pursuant to RCFC 12(b)(l), the plaintiffbears the burden ofproving, by a

preponderance ofthe evidence, that the court possesses subject matter jurisdiction. McNutt v'

Gen. Motors Acceptance Corp.,298 U.S. 178, 189 (1936); Trusted Inteeration. Inc. v. United

srates, 659 F.3d 1159, 1163 (Fed. Cir. 2011). Although complaints filed by plaintiffs proceeding

a The Rules of the Court of Federal Claims ("RCFc")-plaintiff cites RCFC 8(a)(2)'

9(b), 9(e), and 9(k)-are not a source of substantive rights for money damages.

ple-sg are held to "less stringent standards than formal pleadings drafted by lawyers," Haines,

404 U.S. at 520-21, a plaintiff proceeding p3q Se is not excused from meeting basic jurisdictional

requirements, Henke, 60 F .3d at 799. If the court finds that it lacks subject matter jurisdiction

over a claim, RCFC l2(hX3) requires the court to dismiss that claim.

A claim that survives ajurisdictional challenge remains subject to dismissal under RCFC

12(bX6) if it does not provide a basis for the court to gnnt relief. Lindsav v. United States, 295

F.3d 1252, 1257 (Fed. Cir.2002) ("A motion to dismiss . . . for failure to state a claim upon

which reliefcan be granted is appropriate when the facts asserted by the claimant do not entitle

him to a legal remedy."). To survive a motion to dismiss under RCFC l2(bx6), a plaintiffmust

include in the complaint "enough facts to state a claim to relief that is plausible on its face." Bell

Atl. Corp. v. Twombly, 550 U.S. 544,570 (2007). In other words, a plaintiff must "plead[ ]

factual content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged." Ashcroft v. Iobal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp.,

550 U.S. at 556). "[O]nce a claim has been stated adequately, it may be suppo(ed by showing

any set of facts consistent with the allegations in the complaint." Bell Atl. Corp., 550 U.S. at

563. Indeed, "[t]he issue is not whether a plaintiff will ultimately prevail but whether the

claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232,

236 (1974), ovem-rled on other grounds by Harlow v. Fitzeerald,457 U.S. 800, 814-19 (1982).

III. DISCUSSION

A. Dismissal Is Appropriate Under RCFC 12(bxl)

The court lacks subject matter jurisdiction over plaintiff s statutory claims, over

plaintiff s civil fraud claim, and over plaintiff s claims for equitable relief Dismissal of these

claims is therefore appropriate under RCFC 12(bX1).

1. The Court Lacks Subject Matter Jurisdiction Over Plaintiff s Statutory Claims

In his first amended complaint, plaintiff alleges that defendant violated a number of

provisions of the United States Code. The court addresses each of these provisions in tum.

a. 18 U.S.C. $ 103I

Section 1031 of title l8 of the United States Code is captioned "Major fraud against the

United States."s I 8 U.S.C. $ 103 I (2012). It is a stature that makes it a crime "to defraud the

United States," or "to obtain money or property by means offalse or fraudulent pretenses,

representations, or promises," with respect to "any grant, contract, subcontract, subsidy, loan,

guarantee, insurance, or other form ofFederal assistance" and states the penalties for such a

crime. Id. Not only is the statute not money-mandating, but as a criminal statute, is not

enforceable against the United States. See Joshua v. United States, l7 F.3d 378, 379 (Fed. Cir.

1994) ("[The Court ofFederal Claims] has no jurisdiction to adjudicate any claims whatsoever

under the federal criminal code." (intemal quotation marks omitted)).

5 Plaintiff cites this statute at pages ii, iv,2, 6, and 7 of his first amended complaint.

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b. 20 U.S.C. $ 1092(a)

Section 1092(a) oftitle 20 is captioned "lnformation dissemination activities."6 20

U.S.C. $ 1092(a) (2012). It is a section of the Higher Education Act C'HEA") that lists the tlpes

of information that eligible institutions that participate in certain student financial assistance

programs must have available for production to prospective and effolled students of that

institution. Id. It is not money-mandating. See Johnson, 105 Fed. Cl. at92 (noting that neither

the HEA nor its conesponding regulations are a "money-mandating source of law").

c. 20 U.S.C. S t22t-1

Section 1221- I oftitle 20 is captioned "National policy with respect to equal educational

opportunity."T 20 U.S.C. $ 1221-1. It states that it is "the policy of the United States of America

that every citizen is entitled to an education to meet his or her full potential without financial

barriers." Id. Statutory provisions merely reciting laudable goals are not money-mandating. See

Dziekonski v. United States, 120 Fed. Cl. 806, 810 (noting that a statute describing a "declared

policy" is not money-mandating).

d. 28 U.S.C. S rs00

Section 1500 oftitle 28 is captioned "Pendency of claims in other courts."8 28U.S.C.

$ 1500. It is ajurisdictional statute that simply states that this court lacks jurisdiction over a

claim "ifthe plaintiffhas another suit for or in respect to that claim pending against the United

States or its agents." United States v. Tohono O'Odham Nation, 563 U.S.307,311 (2011). This

jurisdictional limitation, imposed on the court by Congress, is not money-mandating.

e. 31 U.S.C. $ 1304

Section 1304 of title 31 is captioned "Judgments, awards, and compromise settlements."e

31U.S.C. $ 1304(2012). Although it relates to the appropriation of federal firnds for the

payment of"final judgments, awards, compromise settlements, and interest and costs specified in

the judgments or otherwise authorized by law" in suits brought against the United States, id., it,

standing alone, is not money-mandating. See Samish Indian Nation,657 F.3d at 1334 (afftrming

the trial court's determination that an appropriation is "merely a budgetary mechanism . . . [and]

could not impose a money-mandating duty on the Govemment.").

Plaintiffcites this statute at pages 4 and 10 of his first amended complaint.

Plaintiffcites this statute at pages 4 and l0 ofhis first amended complaint.

Plaintiffcites this statute at page 5 of his first amended complaint.

Plaintiff cites this statute at pages ii,v,2,9, and 12 of his first amended complaint.

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f. 44 U.S.C. S 3102

Section 3102 oftitle 44 is captioned "Establishment ofprogram management."ro 44

U.S.C. $ 3102 (2012). Its purpose is to provide for the management offederal agency records

and consequently is not money-mandating.

g. 44 U.S.C. SS 3601-3606

Finally, plaintiff relies on notjust one section but an entire chapter within a title, arguing

that chapter 36 of title 44,11 captioned "Management and Promotion of Electronic Government

Services," 44 U.S.C. $$ 3601-3606, provides a basis for the govemment's liability. The chapter

provides for the "development and enhancement" of"the use by the Government of web-based

Intemet applications and other information technologies [to] enhance the access to and delivery

of Govemment information and services to the public, other agencies, and other Govemment

entities; or . . . bring about improvements in Govemment operations that may include

effectiveness, efficiency, service quality, or transformation." Id. $$ 3601,3605. Clearly, the

chapter is not money-mandating.

2. The Court Lacks Subject Matter Jurisdiction Over Plaintiff s Civil Fraud Claim

In addition to alleging a violation of a criminal fraud statute, plaintiffclaims that

defendant fraudulently or mistakenly stated that he defaulted on two of his loans. Am. Compl.

1 3. In support of his argument, plaintiff relies on RCFC 9(b). Id.

Pursuant to RCFC 9(b), plaintiffmust plead "the circumstances constituting fraud . . .

with particularity." The purpose of pleading fraud with particularity is to allow formulation of a

responsive pleading and guard parties fiom baseless claims. Tyger Constr. Co. v. United States,

28 Fed. CI.35,53 (1993). "Fraud allegations should contain references to time, place, and

manner of the fraud." Id. A "heightened fact pleading of specifics," is not required, "only

enough facts to state a claim to reliefthat is plausible on its face." Bell Atl. Corp.,550U.S.at

570. If a plaintiff fails to meet the requirements of RCFC 9(b), the Court of Federal Claims may

dismiss the complaint without prejudice or allow the deficiency to be "cured by a later

disclosure." Jana. Inc. v. United States,41 Fed. Cl,735,741 (1998).

In the present case, inespective ofwhether plaintiff has met his burden under RCFC 9(b),

his fraud claim would not be remediable in the Court of Federal Claims. A claim of fraud

sounds in tort, Bro\rn v. United States, 105 F.3d 62I,623 (Fed. Cir. 1997), and the Court of

Federal Claims does not possess jurisdiction to entertain claims sounding in tort, 28 U.S.C.

$ 1a9l(aXl). Rather, under the Federal Tort Claims Act, 28 U.S.C. $$ 1346(bX1), 2671-80,

jurisdiction over tort claims lies exclusively in United States disftict courts. See Brown, 105

F .3d at 623 (holding that because the plaintiffs' fraudulent assessment and fraudulent takings

claims sounded in tort, the court lacked jurisdiction). The only exception to that mle is for a tort

t0

Plaintiff cites this statute at pages I 1, 13, and 14 of his first amended complaint.

ll Plaintiff cites this statute at pages 12 and 14 of his first amended complaint.

1

claim that arises from a breach-of-contract claim. See Awad v. United States, 301 F.3d 1367,

1372 (Fed. Cir.2002) ("[W]here a tort claim stems from a breach of contract, the cause ofaction

is ultimately one arising in contract, and thus is properly within the exclusive jurisdiction ofthe

Court of Federal Claims[.]"); Olin Jones Sand Co. v. United States,225 Ct. CI.741,745 (1980)

("Where . . . a claim is based on breach of contract it is properly within the jurisdiction ofthis

court even though it also alleges that defendant engaged in tortious conduct in breaching the

contmct."). As discussed below, plaintiff fails to state claims for breach of contmct. See infra

Sections IILB. 1-2. Thus, to the extent that plaintiff is alleging a claim of fraud based on a

breach of contract, the court lacks jurisdiction to entertain it.

3. The Court Lacks Subject Matter Jurisdiction Over Plaintilfs Claims for Equitable

Relief

Next, plaintiff seeks the following equitable relief from this court: (1) a declaration that

he is not in default on his two federal student loans, (2) the consolidation of all ofhis outstanding

federal student loans, (3) the removal from his credit report ofaay reference to the two defaulted

federal student loans, and (4) removal of two loan amounts-an April25,2013 loan of $ 3,362

and an October 24,2013 loan of 26,870, which total $30,232-from his federal student loan

records. Am. Compl. 20.

Generally, the Court of Federal Claims lacks the ability to award equitable relief. See

Bowen v. Massachusetts, 487 U.S. 879,905 (1988) (holding that the Court of Federal Claims

lacks "the general equitable powers ofa district court to grant prospective relief'); Brown, 105

F.3d at 624 (holding that the Tucker Act does not provide independent reliefthrough declaratory

judgments); Stephanatos v. United States, 8l Fed. Cl. 440,445 (2008) (explaining that the court

"has no authority to grant equitable relief'unless it is tied and subordinate to a money

judgment"' (quoting James v. Caldera, 159F.3d 573,580 (Fed. Cir. 1998))). However, the

Tucker Act does authorize the court to grant equitable relief under limited circumstances:

To provide an entire remedy and to complete the relief afforded by

the judgment, the court may, as an incident ofand collateral to any

such j udgmen! issue orders directing restoration to office or

position, placement in appropriate duty or retirement status, and

conection ofapplicable records, and such orders may be issued to

any appropriate official of the United States. In any case within its

jurisdiction, the court shall have the power to remand appropriate

matters to any administrative or executive body or official with

such direction as it may deem proper andjust.

28 U.S.C. $ 1a9l(a)(2); see also id. $$ 1492(bX2) (providing the court with jurisdiction to award

declaratory and injunctive relief in bid protests), 1507 (providing the court with jurisdiction to

issue a declaratory judgment under 26 U.S.C. S 7428). Here, as explained below, plaintiff fails

to state a breach-of-contract claim upon which relief, in the form ofmoney damages, may be

granted. See infra Sections III.B. 1-2. Thus, the equitable reliefplaintiff seeks does not arise as

"an incident of and collateral to" a money judgment. Accordingly, the Court of Federal Claims

lacks the authority to grant equitable relief in this case.

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As to plaintiff s remaining claims, although they are properly before this court, plaintiff

fails to state claims upon which relief may be granted.

B. Dismissal Is Appropriate Under RCFC 12(bX6)

Plaintiff fails to state a claim under the Contract Disputes Act of 1978 ('CDA"), 41

U.S.C. $$ 7101-09 (2012). Plaintiffalso fails to state a breach-of-contmct claim. Dismissal of

these claims is therefore appropriate under RCFC 12(bX6).

l. Plaintiff Fails to State a CDA Claim

In his first amended complaint, plaintiff cites several sections of the CDA, which is a

money-mandating statute that permits the Court of Federal Claims to entertain suits arising from

govemment procurement contracts.12 See U.S. Sur. Co. v. United States, 83 Fed. Cl. 306, 309

(2008) ("The Contract Disputes Act of1978 . . . is such a money-mandating statute. It

authorizes this Court to adjudicate a claim for monetary damages arising from 'any express or

implied contract . . . entered into by an executive agency for. . . the procurement of construction,

alteration, repair or maintenance ofreal property' filed within twelve months ofa contracting

offrcer's final decision concerning the claim."). However, plaintiff does not claim, nor can he, to

have entered into a procurement contract with the United States, such that recourse in this court

pursuant to the CDA is appropriate. Thus, he fails to state a claim upon which relief can be

granted.

2. Plaintiff tr'ails to State a Breach-of-Contract CIaim

In addition to alleging a violation of the CDA, plaintiff claims that defendant breached

the Master Promissory Note C'MPN'). Am. Compl. 9-13. In support of his breach-of-contract

claim, plaintiff attaches a blank MPN to his first amended complaint. App., Ex. K. The MPN is

a United States Department ofEducation form captioned "Direct Loans."13 It "is used in

connection with many student loans across the country," and "incolporates the [HEA] and its

associated regulations." Bible v. United Student Aid Funds. Inc. ,799 F.3d 633, 638 (7th Cir.

2015). Plaintiff s blank MPN contains the following seven sections: (1) "Section A: Borrower

Information"; (2) "Section B: School Information"; (3) "Section C: Borrower Request,

Certification, Authorizations, and Understandings"; (4) "Section D: Promise to Pay"; (5)

"Section E: MPN Terms and Conditions"; (6) "Section F: Important Notices"; and (7) "Section

G: Instructions for Completing the MPN." App., Ex. K. Id. According to plaintiff, who relies

on a subsection of the MPN captioned "Acceleration and Default," defendant failed to

consolidate plaintiff s loans as mandated under 20 U.S.C. $ 1092(a). Am. Compl. 10.

12

Plaintiff cites to the CDA at pages ii, iv-v, 2, 9- 10, and 12- 13 of his first amended

complaint.

13

The form is also captioned (1) "Federal Direct Stafford/Ford Loan," (2) "Federal

Direct Unsubsidized Stafford/Ford Loan," (3) "Master Promissory Note," and (4) "William D.

Ford Federal Direct Loan Program." App., Ex. K.

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Plaintiff cannot prevail on his breach-of-conFact claim because he has not established

that the United States was obligated to consolidate his loans. There is nothing within the text of

the MPN that imposes a duty on the United States to consolidate a borrower's loans. And, as

noted above, the section of the HEA that plaintiff relies on-20 U.S.C. $ 1092(afmerely lists

the types of information that institutions participating in the United States Department of

Education's financial assistance programs must have available for prospective or enrolled

students. It does not provide that the United States must consolidate borrowers' loans. Indeed,

other sections ofthe HEA provide that loan consolidation is optional. See. e.e., 20 U.S.C. $$

1087i-2(a) ("Temporary loan consolidation authority'); 1099d(bx3XL) ("Consolidation"). In

the absence ofany duty ofthe United States to consolidate plaintiffs loans, plaintiff fails to state

a claim for breach of contract upon which reliefcan be granted.

C. Consideration of PlaintifPs First Amended Complaint Is Barred by the Doctrine of Res

Judicata

Ultimately, the doctrine of res judicata bars this court's consideration of plaintiff s first

amended complaint. See Camoos v. OPM, 636 F. App'x 798,799 (Fed. Cir. 2016) (unpublished

per curiam decision) ("[E]ven though, in a later suit, a party might present the court with new

evidence that calls into question the original judgment, res judicata does not permit the court to

reopen thatjudgment."). Res judicata, as the term is commonly used, encompasses the related

concepts of claim preclusion and issue preclusion. Nasalok Coatine Com. v. Nylok Com., 522

F.3d 1320, 1323 (Fed. Cir. 2008); Sham Kabushiki Kaishav. Thinksharp. Inc.,448 F.3d 1368,

1370 (Fed. Cir. 2006). "Claim preclusion refers to the effect ofajudgment in foreclosing

litigation ofa matter that never has been litigated, because ofa determination that it should have

been advanced in an earlier suit. Claim preclusion therefore encompasses the law of merger and

bar." Miera v. Wanen Citv Sch. Dist. Bd. of Educ., 465 U.S. 75,77 n.l (1984). In contrast,

"[i]ssue preclusion refers to the effect ofajudgment in foreclosing relitigation ofa matter that

has been litigated and decided. This effect also is refened to as direct or collateral estoppel." Id.

(citation omitted).

For claim preclusion to apply, "there must be (1) an identity of parties or their privies, (2)

a final judgment on the merits of the prior claim, and (3) the second claim must be based on the

same transactional facts as the first and should have been litigated in the prior case." Sham

Kabushiki Kaisha,448 F.3d at 1370 (citing Parklane Hosierv Co. v. Shore, 439 U.S. 322,327 n.5

(1979)); see also Nevada v. United States,463 U.S. 110,129-30 (1983) ("[T]he doctrine ofres

judicata provides that when a final judgment has been entered on the merits of a case, '[i]t is a

finality as to the claim or demand in controversy, concluding parties and those in privity with

them, not only as to every matter which was offered and received to sustain or defeat the claim

or demand, but as to any other admissible matter which might have been offered for that

purpose. "' (quoting Cromwell v. County of Sac, 94 U.S. 351,352 (1876))), quoted in

Phillips/May Corp. v. United States, 524 F.3d 1264, 1267 -68 (Fed. Cir. 2008); Do-Well Mach.

Shop. Inc. v. United States ,870 F .2d 637 , 640 (Fed. Cir. 1989) (noting that while a "dismissal on

the merits canies resjudicata effect," a "dismissal for want ofjurisdiction does not").

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For issue preclusion to apply, the following four elements must be satisfied:

(1) the issue is identical to one decided in the first action; (2) the

issue was actually litigated in the first action; (3) resolution of the

issue was essential to a final judgment in the first action; and (4)

plaintiffhad a full and fair opportunity to litigate the issue in the

first action.

In re Freeman,30 F.3d 1459, 1465 (Fed. Cir.1994). "The underlying rationale ofthe doctrine

. . . is that a party who has litigated an issue and lost should be bound by that decision and cannot

demand that the issue be decided over again." Id. The doctrine therefore "protects [the party's]

adversaries from the expense and vexation attending multiple lawsuits, conserves judicial

resources, and fosters reliance onjudicial action by minimizing the possibility of inconsistent

decisions." Montana v. United States, 440 U.S. 147 , 153-54 (1979).

The instant case is plaintiffs second attempt to secure legal redress for alleged wrongs

regarding his student loans. As noted above, plaintifPs first attempt was in Washington District

Court. In that case, the court granted defendant's motion for summary judgment. Specifically,

the court held that (1) 20 U.S.C. $ 1092(c),14 the statute relied upon by plaintiff, "does no1

require disparate and independent entities to coordinate their monthly statements or collection

procedures"; (2) plaintiff failed to present any evidence that reports submitted by defendant to

credit reporting agencies were "fraudulent or even incorrect"; (3) plaintiff failed to present any

evidence that "defendant's gamishment of his 2012 tax refund was unauthorized" in light ofhis

having defaulted on his student loans; (4) it lacked the authority to gant plaintilfs request for

injunctive relief in the form ofan order directing defendant to consolidate loans held by the State

of Colorado Collections Department with defendant's loans; and (5) plaintifffailed to present

any evidence that defendant owed him a fiduciary duty.ls AFp., Ex.Lat2-5.

Here, all three of the claim preclusion factors have been met. First, there is no dispute

that the parties are identical to those in the prior litigation-in both cases, plaintiff sued the

ra ln the instant action, plaintiff relies on subsection (a) rather than subsection (c) of 20

u.s.c. $ 1092.

Is To the extent that plaintiff is seeking this court's review of the decisions ofthe

Washinglon District Court and the Ninth Circuit, this court lacks jurisdiction to do so. See

generally U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18,27 (1994) ("Congress

has prescribed a primary route, by appeal as ofright and certiorari, through which parties may

seek relief from the legal consequences ofjudicial judgments. To allow a party who steps off the

statutory path to employ . . . [a] collateral attack on the judgment would-1uite apart from any

considerations of faimess to the parties--{isturb the orderly operation of the federal judicial

system."); Joshua, 17 F.3d at 380 ("[T]he Court ofFederal Claims does not have jurisdiction to

review the decisions ofdistrict courts . . . relating to proceedings before those courts.").

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United States.16 Second, it cannot be disputed that the claims in both cases are based on the

same transactional facts: plaintiffs application for and receipt of federal student loan monies

between 1992 and 2013, and defendant's declaration that plaintiff was in default on a direct

consolidated unsubsidized loan of$12,844 and a direct consolidated subsidized loan of$39,574,

both made on September 18, 2000. Third, it is undisputed that the prior litigation, wherein the

court resolved a motion for summary judgment, resulted in a judgment on the merits. See

Kunkes v. United States, 78 F.3d 1549, 1550 n.2 (Fed. Cir. 1996) ("Unlike a Rule l2(b)(6)

motion, a summary judgment motion does not simply test the sufficiency of the complaint; it

involves examination of material outside the complaint, and determines whether on the

undisputed facts presented in that material, the movant is entitled to judgment as a matter of law.

. . . Accordingly, for purposes ofthe appeal we treat the matter not as a dismissal but as an entry

ofjudgment . . . ."); Indium Com. of Am. v. Semi-Allovs. Inc.,781F.2d 879, 883 (Fed. Cir.

1985) (noting that a motion for summary judgment pusuant to Rule 56 of the Federal Rules of

Civil Procedure "seeks a judgment on the merits ofa case"). Having determined that plaintiffs

current complaint is baned by the doctrine ofclaim preclusion, the court need not consider the

effect of issue preclusion.

D. PlaintifPs Motion to File a Second Amended Complaint Is Futile

Despite the fatal deficiencies in plaintiffs first amended complaint, the court concludes

that plaintiffls motion to file a second amended complaint is futile. On June I7,2016, after

briefing on defendant's motion to dismiss the first amended complaint was complete, plaintiff

sought leave to file a second amended complaint. In support of his motion, plaintiff claims that

he is now in possession of evidence-tle MPN-that was not previously considered by the

Washington District Court before it rendered its decision.

RCFC 15(a) govems the amendment ofpleadings before trial and states that "[a] party

may amend its pleadings once as a matter of course within . . .21 days after service of tlte

pleading; or. . . if the pleading is one to which a responsive pleading is required,2l days after

service ofa responsive pleading or 21 days after service ofa motion under RCFC l2(b), (e), or

(f), whichever is earlier." Otherwise, "aputy may amend its pleading only with the opposing

party's written consent or the court's leave," which should be freely given "whenjustice so

requires." RCFC l5(a). In Foman v. Davis, the United States Supreme Court explained that the

mandate set forth in RCFC l5(a) "is to be heeded." 371 U.S. 178,182 (1962). It explained:

If the underlying facts or circumstances relied upon by a plaintiff

may be a proper subject ofrelief, he ought to be afforded an

opportunity to test his claim on the merits. In the absence of any

apparent or declared reason-such as undue delay, bad faith or

dilatory motive on the part ofthe movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice

to the opposing party by virtue of allowance of the amendment,

r6 Although defendant in the prior litigation is identified as the "Department of

Education," its full name is the United States Department of Education, which is an agency of

the United States sovernment.

ta

futility of amendment, etc.-the leave sought should, as the rules

require, be "freely given."

Id.

Whether a court grants or denies a motion for leave to amend the complaint falls within

its discretion, id., and a court "ought to exercise liberally its discretion to grant leave to amend,"

Wolfchild v. United States, 101 Fed. C|.54,64 (2011); see also Chitimacha Tribe of La. v. Harry

L. Laws Co., 690 F.2d ll57 , 1163 (5th Cir. 1982) (explaining that Rule 15 ofthe Federal Rules

of Civil Procedure "evinces a bias in favor of granting leave to amend"). Nevertheless, leave to

amend "should not be given automatically." Chitimacha Tribe of La.,609 F.2d at 1163. The

existence of"any one" of the reasons articulated in Foman may justify denial of a motion for

leaveto amend. Spaldine & Son. Inc. v. United States,22 Cl. Ct.678, 680 (1991); accord Hays

v. United States, l6 Cl. Ct. 770,772 (1989) (noting that the criteria set forth in Foman "are in the

disjunctive, i.e., satisfaction ofone is sufficient to deny the motion"); see also Te-Moak Bands of

W. Shoshone Indians of Nev. v. United States,948F.2d 1258,1261-64 (Fed. Cir. 1991)

(disallowing amendment of the pleadings due to delay and failure to cure deficiencies earlier).

Where amendment would be futile, it should not be allowed. See Leider v. United States, 301

F.3d 1290, 1299 n.10 (Fed. Cir. 2002) (holding that where the undisputed facts do not support

the addition of a new claim, amendment of the complaint is futile and should not be allowed);

Mitsui Foods. Inc. v. United States,867 F.2d l40l, 1403-04 (Fed. Cir. 1989) (holding that where

an additional prayer for relief would not change the outcome of the case, amendment of the

complaint is futile and should not be allowed); Ishler v. United States. 115 Fed. Cl. 530, 541

(2014) (holding that where plaintiff"fails to explain how amendment would cure any of the

jurisdictional defects in his complaint," amendment of the complaint is futile and should not be

allowed).

In this case, allowing plaintiff to amend his complaint for a second time is futile.

Plaintiff fails to put forth any new facts or legal argument that would cure the deficiencies in his

first amended complaint. In other words, nothing in plaintiffs proposed second amended

complaint would (1) alter this court's conclusion that it lacks subject matter jurisdiction over

plaintiff s non-money-mandating statutory claims, plaintiff s common law civil fraud claim, or

plaintiff s claims for equitable relief; (2) cure plaintiff s failure to state either a CDA or common

law breach-of-contract claim; or (3) alter this court's ability, under the doctrine of res judicata, to

review the claims already decided by the Washington District Court and the Ninth Circuit. Thus,

in an exercise of its discretion and because the interest ofjustice would not otherwise be served,

plaintiff s motion for leave to file a second amended complaint is denied.

E. Plaintiffs IFP Application Is Granted

Finally, as noted above, plaintiff filed, concurrent with his original complaint, an IFP

application. Pusuant to 28 U.S.C. $ 1915, courts of the United States are permitted to waive

filing fees and security under certain circumstances. See 28 U.S.C. $ 1915(a)(1). Plaintiffs

wishing to proceed IFP must submit an affidavit that (l) lists all oftheir assets, (2) declares that

they are unable to pay the fees or give the security, and (3) states the nature of the action and

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their belief that they are entitled to redress. Id. Here, plaintiff has satisfied all three

requirements. The court therefore grants plaintiffs application and waives his filing fee.

IV. CONCLUSION

As set forth above, the court GRANTS plaintiff s IFP application, DENIES as moot

plaintifFs motion for judgment, GRANTS defendant's motion to dismiss plaintiff s first

amended complaint, DENIES as moot plaintiff s motion to strike defendant's motion to dismiss

plaintiffs first amended complaint, and DENIES plaintiff s motion for leave to file a second

amended complaint. PlaintifPs first amended complaint is DISMISSED. The clerk is directed

to enter judgment accordingly and shall not award costs.

IT IS SO ORDERED.

MAR

1A