Petitioners Reply Brief — Army and Air Force Exchange Service v. Sheehan

Office Supreme Court, U.S.

FILED

No. 80-1437 JUL 80 1981

ALEXANDER L. STEVAS,

- } ——

Inu the Supreme Court of the United States

OctTosper TERM, 1980

ARMY AND AIR FoRCE EXCHANGE SERVICE, PETITIONER

Vv.

ARTHUR EDWARD SHEEHAN

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

REPLY MEMORANDUM FOR THE PETITIONER

LAWRENCE G, WALLACE

Acting Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Page

Cases:

Richardson v. United States, 214 Ct. Cl. 757 .... 3

Spooner v. United States, 211 Ct. Cl. 312 ....... 3

United States v. Hopkins, 427 U.S. 123... 1, 2,3,4

United States v. Testan, 424 U.S. 392 ...... 1,2,4

Statute and regulations:

Tucker Act, 28 U.S.C. 1346(a)(2) «1... cece seen l

AR 60-20 / AFR 147-14 (Mar. 21, 1974) ...+++> 2

AR 60-21 / AFR 147-15 (Nov. 12, 1974) ...... 2,3

In the Supreme Court of the Hnited States

OCTOBER TERM 1980

No. 80-1437

ARMY AND AIR ForCE EXCHANGE SERVICE, PETITIONER

Vv.

ARTHUR EDWARD SHEEHAN

ON PETITION FOR A WRIT OF CERTIO.”-ARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

REPLY MEMORANDUM FOR THE PETITIONER

The narrow question presented by this case and its com-

panion, Army and Air Force Exchange Service v. Gorman,

No. 80-1435 (filed Feb. 23, 1981), is whether an appointed

employee of a military exchange who has been discharged

may file a civil action for monetary damages against the

United States under the Tucker Act (28 U.S.C. 1346(a)(2))

predicated upon an implied-in-fact contract. As we demon-

strated in our petition in this case (at 4-14), the court of

appeals’ holding that Tucker Act jurisdiction may be

invoked in such a situation is inconsistent with the Court's

decisions in United States v. Hopkins, 427 U.S. 123 (1976),

and United States v. Testan, 424 U.S. 392 (1976).

1. Respondent's contention (Br. in Opp. 9-12) that the

decision in Hopkins supports the court of appeals’ decision

in this case is mistaken. In Hopkins, this Court held that the

Court of Claims had erred in concluding “that AAFES

2

employees could never serve by appointment.” 427 U.S. at

130 (emphasis in original). The Court noted (id. at 127-128)

that Congress recognized that exchange service employees

may be appointed to their positions, and that under one set

of AAFES regulations (AR ¢\)-21/ AFR 147-15 (Nov. 12,

1974)) “ordinary” employees hold their positions by appoint-

ment. In addition, the Court pointed to a different set of

AAFES regulations (AR 60-20 / AFR 147-14 (Mar. 21,

1974)) that govern the employment of persons under service

contracts to perform “direct service,” including “janitorial

and window cleaning service,” and it noted that exchange

service employees are specifically prohibited from receiving

service contracts. 427 U.S. at 128-129. The Court in Hop-

kins concluded that resolution of the question whether

Hopkins was employed pursuant to a contract “depends

upon an analysis of the statutes and regulations” governing

the employment of AAFES personnel in light of the evi-

dence to be adduced on remand concerning Hopkins’ par-

ticular status. /d. at 130. Because the regulations cited by

this Court in Hopkins as applying to appointed employees

are the same regulations that govern respondent's employ-

ment with the AAFES (see Pet. App. 7a-8a & n.8), it is clear

that respondent was employed pursuant to “appointment.”

Under Hopkins, therefore, the district court lacked iurisdic-

tion over respondent's claims for monetary relief.

2. Respondent attempts to avoid the implications of the

decisions in Hopkins and in United States v. Testan, supra,

by asserting (Br. in Opp. 6, 12, 13) that, unlike the

employees in those cases, he was employed by contract as

the result of his participation in the AAFES’ Executive

Management Program (“EMP”). This claim is without

merit.

In the first place, the complaint nowhere alleges that

respondent was employed pursuant to a contract with the

AAFES or that “his discharge constituted a breach of a

contract of employment.” United States v. Hopkins, supra,

3

427 U.S. at 130.' To be sure, the complaint states that “[a]s

an EMPemployee, [respondent] had certain special obliga-

tions and special benefits different from other AAFES

employees.” Complaint, para. 5. But the special obligations

and benefits applicable to AAFES employees who are

designated to EMP status are set forth in the regulations

governing appointed AAFES employees (AR 60-21/ AFR

147-151, Chapter 5, Section II (Nov. 12, 1974)) and are

insufficient to convert the status of a government employee

from that of serving pursuant to appointment to that of

serving pursuant to a contract. If the law were otherwise,

the distinction between appointed and contract employees

would disappear, since all government employees, regard-

less of whether they are appointed or are employed by

contract, incur certain obligations and receive certain

benefits in connection with their employment.

Indeed, the court of appeals expressly noted (Pet. App.

8a) that respondent's complaint did not refer to an employ-

ment contract, and the court assumed that the pertinent

AAFES regulations “label the commencement of [respond-

ent’s] employment as pursuant to ‘appointment’ ” (ibid.;

emphasis in original). Thus, the theory of the court below

was not that the AAFES’ regulations governing EMP

employees established a contractual relationship, but that

the regulations concerning discharge procedures “were part

of a collateral implied in-fact contract between [respond-

ent] and the AAFES that the AAFES would adhere to the

'As we noted in the petition (at 9 n.8), subsequent to the decision in

Hopkins, the Court of Claims has, on two occasions, dismissed suits for

back pay brought by discharged exchange service employees under the

Tucker Act on the ground that the complaints failed to allege facts

establishing a contract relationship and that therefore the court was

without subject matter jurisdiction over the action. See Spooner v.

United States, 211 Ct. Cl. 312 (1976); Richardson v. United States, 2\4

Ct. Cl. 757 (1977).

4

regulations in its dealings with him” (ibid.). If the court of

appeals had accepted respondent’s contention that

respondent had entered into an employment contract by

virtue of his status as an EMP employee, it would have been

unnecessary for that court to have resorted to the fiction of

an implied-in-fact contract, a fiction that, as we have dem-

onstrated in the petition, is not tenable in light of Hopkins

and Testan.

For the foregoing reasons and for the reasons stated in

the petition, the petition for a writ of certiorari should be

granted, the judgment of the court of appeals should be

reversed, and the case should be remanded to that court

with directions to dismiss, for iack of jurisdiction, those

portions of the complaint seeking monetary relief.

Respectfully submitted.

LAWRENCE G. WALLACE

Acting Solicitor General

JuLy 1981

DOJ-1981.07