Columbus Regional Hospital v. United States ( 2021 )

Case: 20-1226 Document: 56 Page: 1 Filed: 03/10/2021
United States Court of Appeals
for the Federal Circuit
______________________
COLUMBUS REGIONAL HOSPITAL,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2020-1226
______________________
Appeal from the United States Court of Federal Claims
in No. 1:18-cv-01299-RAH, Judge Richard A. Hertling.
______________________
Decided: March 10, 2021
______________________
DEREK READ MOLTER, Ice Miller LLP, Indianapolis, IN,
argued for plaintiff-appellant. Also represented by BRENT
W. HUBER.
MARIANA TERESA ACEVEDO, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellee. Also
represented by DEBORAH ANN BYNUM, JEFFREY B. CLARK,
ROBERT EDWARD KIRSCHMAN, JR.; RAMONCITO JOSE
DEBORJA, Office of General Counsel, United States Federal
Emergency Management Agency, Washington, DC.
______________________
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2 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
Before TARANTO, BRYSON, and HUGHES, Circuit Judges.
BRYSON, Circuit Judge.
Columbus Regional Hospital (“Columbus”) appeals
from two orders of the United States Court of Federal
Claims (“the Claims Court”) in which the court dismissed
all the claims of Columbus’s complaint against the United
States. The complaint relates to the action of the Federal
Emergency Management Agency (“FEMA”) in recovering
certain disaster-assistance funds that had previously been
distributed to Columbus.
In its complaint, Columbus alleged that FEMA’s recov-
ery of those funds breached Columbus’s contractual rights
and constituted an illegal exaction. The Claims Court dis-
missed Columbus’s illegal exaction claim under Rule
12(b)(6) of the Rules of the Court of Federal Claims. In a
separate order, the court dismissed Columbus’s contract
claims for lack of jurisdiction under Rule 12(b)(1) of those
rules after concluding that Columbus had not established
that it had an express or implied contract with FEMA, or
that it was a third-party beneficiary of an agreement be-
tween FEMA and the State of Indiana.
We affirm the court’s dismissal of the illegal exaction
claim. With regard to the express and implied contract
claims, we agree with the Claims Court that those claims
should be dismissed, but we hold that they should be dis-
missed on the merits under Rule 12(b)(6) rather than for
lack of jurisdiction under Rule 12(b)(1). With regard to the
third-party beneficiary claim, we vacate the court’s dismis-
sal of that claim and remand for further proceedings on
that issue.
I
A
The underlying facts are largely undisputed. In 2008,
severe storms hit the State of Indiana, causing extensive
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 3
flooding in several counties. Columbus Regional Hospital,
a hospital in Bartholomew County south of Indianapolis,
sustained significant damage as a result of the flooding. In
response, President Bush declared a regional disaster un-
der the Stafford Act, 42 U.S.C. §§ 5121–5206, which au-
thorized FEMA to provide assistance to the affected
regions through disaster grants. Indiana; Major Disaster
and Related Determinations, 73 Fed. Reg. 35,146-02 (June
20, 2008).
Pursuant to the disaster declaration, FEMA and the
State of Indiana entered into an agreement for disaster as-
sistance. FEMA agreed to provide federal assistance, and
the State agreed to be the grantee for all grant assistance
provided under the Stafford Act, with the exception of as-
sistance provided to individuals and households. The
agreement required Indiana to comply with all applicable
laws and regulations, including relevant provisions of the
Stafford Act, FEMA regulations, and OMB circulars.
Those sources of law were incorporated into the agreement
by reference. FEMA also reserved the right to recover as-
sistance funds if they were spent inappropriately or if they
were distributed through error, misrepresentation, or
fraud.
Following the execution of the FEMA-Indiana agree-
ment, Columbus submitted its official request for assis-
tance to FEMA pursuant to 44 C.F.R. § 206.202(c). 1
Columbus asserts that it sent the request directly to
FEMA, instead of through the State of Indiana. After re-
ceiving the request, FEMA collaborated with Columbus to
prepare project worksheets in which the two defined the
scope of work and the amount of funding for individual re-
covery projects. FEMA approved more than 75 of the
1 Unless stated otherwise, we cite the current ver-
sions of the statutes and regulations, which are not mate-
rially different from the 2008 versions.
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4 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
project worksheets, totaling approximately $94 million in
recovery funds.
Columbus received assistance funds under the FEMA-
Indiana agreement according to the approved project work-
sheets. The funds were transmitted to Columbus through
the State of Indiana, and Columbus applied the funds to
designated restoration and mitigation contracts.
In 2013, the Inspector General of the Department of
Homeland Security issued an audit report finding that Co-
lumbus had committed procurement violations in connec-
tion with four of those contracts. The report recommended
that FEMA recover $10.9 million of the assistance funds
because of the violations. FEMA adopted the Inspector
General’s recommendations. FEMA initially concluded
that recovery of the full $10.9 million was justified, but it
later reduced that amount to $9,612,831.19.
Columbus appealed FEMA’s decision within the
agency. In 2017, FEMA denied Columbus’s appeal, finding
that the agency had correctly applied 2 C.F.R. § 215.62when recovering the disputed costs. Columbus did not seek
judicial review of the agency’s decision. Columbus repre-
sents that FEMA recovered the disputed costs from Colum-
bus in April 2014.
B
In 2018, Columbus filed its complaint in the Claims
Court, alleging four counts of contract breach and a fifth
count of illegal exaction.
Columbus first alleged that there was an express con-
tract between FEMA and Columbus, and that FEMA’s re-
covery of the disputed costs breached statutes and
regulations incorporated by reference, including section
705 of the Stafford Act. Relatedly, Columbus alleged that
FEMA’s recovery of the disputed costs breached 2 C.F.R.
§ 215.62, a FEMA regulation. In the alternative, Colum-
bus alleged that there was an implied-in-fact contract
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 5
between FEMA and Columbus, and that FEMA breached
the same provisions, section 705 of the Stafford Act and 2
C.F.R. § 215.62. Columbus further alleged that even if
there was no express or implied contract between Colum-
bus and FEMA, Columbus was a third-party beneficiary of
the FEMA-Indiana agreement, and that FEMA breached
Columbus’s third-party rights by recovering the disputed
costs. Lastly, Columbus alleged that FEMA’s recovery of
the disputed costs amounted to an illegal exaction because
it violated section 705 of the Stafford Act.
In response to the government’s motion to dismiss, the
Claims Court issued two dismissal orders. First, the court
dismissed Columbus’s illegal exaction claim for failure to
state a claim on which relief could be granted. Columbus
Reg’l Hosp. v. United States, No. 18-1299C, slip op. at 2
(Fed. Cl. Aug. 14, 2019). The court held that there could be
no illegal exaction because Columbus did not have a prop-
erty interest in the disputed funds and because FEMA’s ap-
peal process protected Columbus’s rights to due process.
Id. at 1–2.
In a second order, the court dismissed Columbus’s con-
tract-based claims for lack of jurisdiction. Columbus Reg’l
Hosp. v. United States, 145 Fed. Cl. 217, 228 (2019). Alt-
hough the court found the FEMA-Indiana agreement to be
a binding contract, the court concluded that Columbus had
no rights against FEMA under that contract or otherwise.
Id. at 223–28. According to the court, Columbus failed to
plead “jurisdictional facts” demonstrating the existence of
a contract over which the court had Tucker Act jurisdiction.
Id. The court therefore dismissed Columbus’s express con-
tract, implied contract, and third-party beneficiary claims
under Rule 12(b)(1). Id.Columbus appealed both orders. The parties raise a
total of seven issues on appeal.
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6 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
II
A
At the outset, we address the government’s argument
that the FEMA-Indiana agreement cannot be treated as a
binding contract, but instead must be regarded as a gratu-
itous contribution, and that all of Columbus’s contract-
based claims should be dismissed for that reason.
The Claims Court held the FEMA-Indiana agreement
to be a binding contract. Columbus, 145 Fed. Cl. at 223.
The court based its ruling on State of Texas v. United
States, 537 F.2d 466 (Ct. Cl. 1967), which the court viewed
as controlling on the question whether the disaster-assis-
tance agreement in this case can qualify as a binding con-
tract. Columbus, 145 Fed. Cl. at 222–23.
The government argues that the FEMA-Indiana agree-
ment constitutes a gratuitous grant from a sovereign, not
a binding contract. According to the government, State of
Texas is distinguishable because the Court of Claims in
that case “did not ‘hold’ the agreement was a contract, but
instead simply accepted that premise for purposes of reach-
ing the merits and finding in the Government’s favor.” Ap-
pellee’s Br. 41. The government also argues that the
FEMA-Indiana agreement lacks consideration, and that
State of Texas is not controlling authority on that question
because the court’s opinion in that case was silent regard-
ing the terms of the pertinent agreement.
We hold that the FEMA-Indiana agreement constitutes
a binding contract between FEMA and Indiana. In prior
cases, we have followed our predecessor court in treating
federal grant agreements as contracts when the standard
conditions for a contract are satisfied, including that the
federal entity agrees to be bound. See, e.g., San Juan City
Coll. v. United States, 391 F.3d 1357, 1360–62 (Fed. Cir.
2004) (treating a “Program Participation Agreement” and
related grants under the Higher Education Act as a
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 7
contract); see also, in addition to the State of Texas case,
Dep’t of Nat. Res. v. United States, 227 Ct. Cl. 552, 554
(1981); Kania v. United States, 650 F.2d 264, 268 (Ct. Cl.
1981); and Arizona v. United States, 494 F.2d 1285, 1287–
88 (Ct. Cl. 1974).
In State of Texas, the Court of Claims applied that prin-
ciple in a decision involving a disaster-assistance grant
agreement under the Federal Disaster Act, 42 U.S.C.
§ 1855 (1950). Following a devastating hurricane, the fed-
eral Office of Emergency Planning (“OEP”) agreed to pro-
vide financial assistance to two Texas counties.
Dissatisfied with the OEP’s disallowance of certain funds
under the agreement, the State filed suit in the Court of
Claims, alleging breach of contract. State of Texas, 537
F.2d at 467–68. The government moved to dismiss, argu-
ing inter alia that the disaster-assistance agreement was
not “a binding contract in the traditional sense.” Id. at 468.
The Court of Claims disagreed. It concluded that OEP’s
agreement to provide assistance on specified terms re-
quired OEP to comply with those terms. Id. at 468–69. In
support, the court cited a Comptroller General opinion
stating that an executed disaster-assistance agreement im-
poses enforceable obligations on both parties to the agree-
ment. Id. at 469 n.2. After concluding that OEP was bound
by the agreement, however, the Court of Claims held that
OEP had performed its obligations. The court therefore
dismissed Texas’s petition. Id. at 469.
The government contends that the Court of Claims’
conclusion that the disaster-assistance agreement in State
of Texas constituted a binding contract was dictum and
should not be followed. It is true that because the court
ruled in favor of the government on the merits, the court’s
characterization of the agreement was not strictly neces-
sary to the result. Nonetheless, the court’s conclusion that
the agreement constituted a binding contract was an im-
portant step in the court’s chain of reasoning, was based on
prior precedent, and has been followed in subsequent
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8 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
cases. 2 We see no justification for disregarding it as prece-
dent, and thus we proceed to analyze whether the FEMA-
Indiana agreement satisfies the standard conditions for a
contract.
To conduct that analysis, we apply the traditional four-
part test for the existence of a government contract: (1) mu-
tuality of intent to contract; (2) offer and acceptance; (3)
consideration; and (4) a government representative having
actual authority to bind the United States. See Hometown
Fin., Inc. v. United States, 409 F.3d 1360, 1364 (Fed. Cir.
2005).
Regarding the first element, mutual intent to contract,
FEMA regulations describe “FEMA-State Agreements” as
“impos[ing] binding obligations on FEMA, States, their lo-
cal governments, and private nonprofit organizations
within the States in the form of conditions for assistance
which are legally enforceable.” 44 C.F.R. § 206.44(a). That
regulation is incorporated by reference in the FEMA-
2 Contrary to the government’s suggestion that the
Court of Claims in State of Texas “simply accepted [the]
premise” that the agreement was a contract (Appellee’s Br.
41), the court noted that “both parties devote[d] considera-
ble argument as to whether their Disaster Assistance
Agreement is . . . a binding contract,” and the court ex-
pressly concluded that the agreement obligated OEP to
provide assistance as called for in the agreement. State of
Texas, 537 F.2d at 468. Significantly, one judge concurred
in the judgment. He explained that he would have as-
sumed, arguendo, that the agreement was a binding con-
tract, instead of “holding flatly that the Federal-State
Disaster Assistance Agreement” was a contract. Id. at
473–74 (Nichols, J., concurring). The concurring opinion
makes clear that the majority addressed, and rejected, the
argument that the disaster agreement was a gratuitous
contribution rather than a binding contract.
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 9
Indiana agreement, and it is objective evidence of the par-
ties’ intent to be bound by the agreement. Furthermore,
the language of the agreement itself speaks in terms of
binding obligations, not aspirations. See, e.g., J.A. 1023
(“FEMA and the State agree to take measures to deliver
assistance to individuals, households, and governments as
expeditiously as possible, consistent with Federal laws and
regulations. To that end, the following terms and condi-
tions apply . . . .”); J.A. 1024 (“The Grantee agrees to com-
ply with all applicable laws and regulations . . . .”).
The second element, offer and acceptance, is easily sat-
isfied in this case. An offer occurred when FEMA drafted
the documents bearing the details of the grant agreement
and presented those documents to the State. Those actions
evinced FEMA’s willingness to enter into a bargain and
justified Indiana’s understanding that its assent would
consummate the bargain. See Restatement (Second) of
Contracts § 24 (1981) (defining “offer”); see also Chattler v.
United States, 632 F.3d 1324, 1330 (Fed. Cir. 2011) (apply-
ing that definition of an offer). Acceptance was effected
when the parties’ authorized agents signed the agreement.
See Total Med. Mgmt., Inc. v. United States, 104 F.3d 1314,
1320 (Fed. Cir. 1997) (“Here, the existence of the negoti-
ated, signed MOUs evidences offer and acceptance.”).
The third element, consideration, turns on the condi-
tions attached to FEMA’s grants. Indiana agreed to comply
with an array of requirements attached to the receipt, use,
and distribution of the grant money. For example, Indiana
agreed to provide “technical advice and assistance to eligi-
ble subrecipients” and to ensure that “all potential appli-
cants are aware of available public assistance.” 44 C.F.R.
§ 206.202(b)(1) and (b)(3). If Indiana used grant money to
repair flood damage in its own buildings, it was required to
“obtain and maintain flood insurance in the amount of eli-
gible disaster assistance.” Id. § 206.252(d). In addition,
Indiana agreed to act on FEMA’s behalf to recover any
funds that were dispensed “through error,
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10 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
misrepresentation, or fraud, or if funds are spent inappro-
priately.” J.A. 1026. If Indiana failed to recover such funds
within a 90-day period, it agreed to reimburse FEMA for
the federal share of those awards. Id.
The conditions attached to the disaster grants consti-
tute consideration because they imposed a variety of duties
on Indiana in implementing the FEMA-Indiana agree-
ment. See Restatement (Second) of Contracts § 71 cmt. d
(1981) (noting that consideration may consist of perfor-
mance or a return promise to perform, and performance
“may be a specified act of forbearance, or any one of several
specified acts or forbearances of which the offeree is given
the choice, or such conduct as will produce a specified re-
sult”); see also McGee v. Mathis, 71 U.S. 143, 155 (1866) (“It
is not doubted that the grant by the United States to the
State upon conditions, and the acceptance of the grant by
the State, constituted a contract. All the elements of a con-
tract met in the transaction,—competent parties, proper
subject-matter, sufficient consideration, and consent of
minds.”).
The government argues that the agreement lacks bar-
gained-for consideration because it is merely a form agree-
ment, without negotiated terms, that implements disaster-
assistance procedures. It is well settled, however, that a
standard-form agreement without negotiated terms can be
a binding contract if it is not unreasonable or fraudulent.
See, e.g., Astra USA, Inc. v. Santa Clara Cty., Cal., 563 U.S.
110, 113 (2011); Carnival Cruise Lines, Inc. v. Shute, 499
U.S. 585, 593–94 (1991); see also Restatement (Second) of
Contracts § 211 (1981). The fact that the parties’ consider-
ation in this case was not subject to haggling does not ren-
der the FEMA-Indiana agreement non-binding.
The government does not argue that the standard-form
agreement used in this case was unreasonable or unfair to
FEMA. It could hardly do so, as the form is FEMA’s own.
Moreover, at least some of the conditions imposed on
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 11
Indiana confer a benefit on the government, such as Indi-
ana’s promises to serve as a collector or reimburser of funds
procured by fraud and to report employees who have com-
mitted drug offenses.
Finally, the government cannot, and does not, dispute
that the fourth element, actual authority, is satisfied.
For those reasons, we reject the government’s argu-
ment that the FEMA-Indiana agreement is not a binding
contract between FEMA and the State of Indiana.
B
Columbus’s first argument on appeal is that the Claims
Court applied the wrong standard when it dismissed Co-
lumbus’s contract-based claims for lack of subject-matter
jurisdiction under Rule 12(b)(1). Columbus contends that
it does not need to prove the existence of a contract with
the government in order to invoke the court’s jurisdiction,
but only needs to plead a non-frivolous allegation of such a
contract. According to Columbus, its allegations easily
clear that bar, and the court therefore erred by dismissing
the contract-based claims on jurisdictional grounds.
We agree that the Claims Court applied the wrong
standard when dismissing under Rule 12(b)(1). 3 In prior
cases, we have cautioned courts to separate the issue of
subject-matter jurisdiction, a Rule 12(b)(1) inquiry, from
the issue of whether a complainant’s allegations state a vi-
able claim for relief, a Rule 12(b)(6) inquiry. See, e.g., En-
gage Learning, Inc. v. Salazar, 660 F.3d 1346, 1353 (Fed.
Cir. 2011). “The former determines whether the plaintiff
3 The differences between the Rules of the Court of
Federal Claims and the Federal Rules of Civil Procedure
are immaterial for the purposes of this opinion. Thus, we
simply refer to the respective rules as Rule 12(b)(1) and
Rule 12(b)(6).
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12 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
has a right to be in the particular court and the latter is an
adjudication as to whether a cognizable legal claim has
been stated.” 5B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1350 (3d ed.).
As a general rule, if a plaintiff alleges breach of a con-
tract with the government, the allegation itself confers
power on the Claims Court to decide whether the claim has
merit. Hanlin v. United States, 214 F.3d 1319, 1321 (Fed.
Cir. 2000); Total Med. Mgmt., 104 F.3d at 1319; Gould, Inc.
v. United States, 62 F.3d 925, 929–30 (Fed. Cir. 1995);
Lewis v. United States, 70 F.3d 597, 602 (Fed. Cir. 1995)
(citing Montana-Dakota Utils. Co. v. Nw. Pub. Serv. Co.,
341 U.S. 246, 249 (1951)). The exception is when the plain-
tiff’s allegations are frivolous, wholly insubstantial, or
made solely for the purpose of obtaining jurisdiction.
Lewis, 70 F.3d at 602 (citing Bell v. Hood, 327 U.S. 678,
682–83 (1946), and The Fair v. Kohler Die & Specialty Co.,
228 U.S. 22, 25 (1913)). Thus, in order to overcome the
government’s motion to dismiss under Rule 12(b)(1), Co-
lumbus was merely required to set forth a non-frivolous al-
legation of breach of a contract with the government. See
Engage Learning, 660 F.3d at 1353. 4
4 That rule is a specific application of a more general
principle regarding allegations of subject-matter jurisdic-
tion. As the Supreme Court explained in Shapiro v.
McManus, 577 U.S. 39, 45 (2015) (citing Bell, 327 U.S. at
682–83), “[w]e have long distinguished between failing to
raise a substantial federal question for jurisdictional pur-
poses . . . and failing to state a claim for relief on the merits;
only ‘wholly insubstantial and frivolous’ claims implicate
the former.” See also Oneida Indian Nation of N.Y. v.
County of Oneida, 414 U.S. 661, 666 (1974) (A dismissal for
lack of subject-matter jurisdiction because of the inade-
quacy of the federal claim is proper only when the claim is
“so insubstantial, implausible, foreclosed by prior decisions
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 13
The Claims Court did not apply that standard. Despite
couching its rulings in jurisdictional terms, the court dis-
posed of Columbus’s contract-based claims on the merits.
The court examined whether there was in fact a contract
between FEMA and Columbus, not whether Columbus’s
contract-based allegations were non-frivolous. See, e.g.,
Columbus, 145 Fed. Cl. at 220 (“[Columbus] has failed to
establish the jurisdictional facts that demonstrate it either
holds a contract with FEMA or is a third-party beneficiary
of the State of Indiana’s contract with FEMA . . . .”); id. at
223 (“The existence of an express contract is a jurisdic-
tional fact, which the Hospital as the plaintiff has the bur-
den to prove in order to maintain its complaint for breach
of contract against FEMA.”); id. at 225 (“The Hospital has
not met its burden of proving this alleged consideration,
and thus has failed to allege a jurisdictional fact.”). 5
Although the Claims Court applied the wrong standard
in dismissing under Rule 12(b)(1), that mistake does not
necessarily give rise to reversible error. The government
moved to dismiss under both Rules 12(b)(1) and 12(b)(6),
and the Claims Court provided a thorough analysis of
whether Columbus’s contract-based allegations state a
claim for relief. If we conclude that Columbus’s contract-
based allegations fail to state a cognizable claim, we can
convert the court’s Rule 12(b)(1) dismissal into a Rule
of this Court, or otherwise completely devoid of merit as not
to involve a federal controversy.”); Boeing Co. v. United
States, 968 F.3d 1371, 1383 (Fed. Cir. 2020) (same principle
applied to an illegal exaction claim in the Court of Federal
Claims).
5 The court’s ruling on the Rule 12(b)(1) motion was
not based on a facial jurisdictional flaw in the complaint,
such as the failure to allege an injury in fact sufficient to
establish standing in Crow Creek Sioux Tribe v. United
States, 900 F.3d 1350, 1354–57 (Fed. Cir. 2018).
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14 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
12(b)(6) dismissal. See Lewis, 70 F.3d at 604. We therefore
proceed to address whether Columbus’s contract-based
claims are truly frivolous and, if not, whether the court’s
order dismissing those claims can be upheld under Rule
12(b)(6).
C
On the merits, Columbus first argues that the Claims
Court should not have dismissed its express contract claim.
The court dismissed that claim on the ground that “by stat-
ute, implementing regulation, and the terms of the [FEMA-
Indiana] Agreement, only the State of Indiana could re-
ceive Stafford Act funds as a grantee.” Columbus, 145 Fed.
Cl. at 223. For that reason, the court concluded that only
FEMA and Indiana could be in a contractual relationship.
Id. at 223–24. Furthermore, the court determined that the
project worksheets shared between FEMA and Columbus
were of no moment in establishing a contractual relation-
ship, contrary to Columbus’s contention, because those
worksheets made clear that Indiana was the sole grantee
for the Stafford Act assistance. Id.
Columbus argues that the court placed undue empha-
sis on the FEMA-Indiana agreement and disregarded the
negotiations and documents exchanged between FEMA
and Columbus. Columbus contends that FEMA and Co-
lumbus entered into an express contract through Colum-
bus’s request for assistance (an offer) and FEMA’s
subsequent approval of the project worksheets (ac-
ceptance), in which FEMA committed to providing Colum-
bus $94 million in disaster-assistance funds. That express
contract, Columbus argues, included the FEMA-Indiana
agreement because the request for assistance and the pro-
ject worksheets incorporated that agreement by reference.
Columbus further contends that the binding obligations
imposed on Columbus pursuant to the Stafford Act, FEMA
regulations, and OMB circulars, constitute consideration
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 15
sufficient to support a finding of an express contract be-
tween FEMA and Columbus.
Columbus’s express contract claim survives the govern-
ment’s motion to dismiss under Rule 12(b)(1). FEMA and
Columbus exchanged signed documents specifying the
scope and funding for Columbus’s recovery projects, and it
is not specious to suggest that Columbus’s obligations un-
der the FEMA-Indiana agreement, see 44 C.F.R.
§ 206.44(a), amount to consideration to FEMA. Colum-
bus’s allegations of an express contract are thus sufficient
to confer jurisdiction on the Claims Court.
While we agree with Columbus’s jurisdictional argu-
ment, we conclude that Columbus’s allegations fall flat
upon analysis under Rule 12(b)(6). That is because Colum-
bus’s allegations do not establish mutual intent to contract
between FEMA and Columbus.
As the government explains, the FEMA-Indiana agree-
ment was the centerpiece in the relationship between
FEMA and Columbus. The agreement served as the pre-
requisite to Columbus’s receipt of disaster assistance. See
44 C.F.R. § 206.44(a) (“FEMA-State Agreements”) (“No
FEMA funding will be authorized or provided to any grant-
ees or other recipients . . . until such time as this Agree-
ment for the Presidential declaration has been signed
. . . .”). It set out a two-tier framework for distributing
funds and obligating grantees in accordance with the Staf-
ford Act. It provided that the State would be the grantee
for all grant assistance provided under the Stafford Act.
And it recited that FEMA and the State agreed to take
measures to deliver assistance to individuals, households,
and governments.
FEMA regulations underscore that states are the di-
rect recipients of Stafford Act funding, thus providing fur-
ther separation between FEMA and Columbus. See 44
C.F.R. § 206.202(a) (“Under this section the State is the re-
cipient. As recipient you are responsible for processing
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16 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
subgrants to applicants . . . .”); id. § 206.201(m) (“Recipient
means the government to which a grant is awarded, and
which is accountable for the use of the funds provided. . . .
Generally, except [for host-state sheltering], the State for
which the emergency or major disaster is declared is the
recipient.”); id. § 206.201(o) (“Subrecipient means the gov-
ernment or other legal entity to which a subgrant is
awarded and which is accountable to the recipient for the
use of the funds provided.”).
Contrary to Columbus’s suggestion, the request for as-
sistance and the project worksheets did not create express
contract rights for Columbus against FEMA. The request
for assistance mandated that “[s]ubmission of this form is
required to obtain or retain benefits under the Public As-
sistance Program,” 6 and expressly referenced Title 44 of
the Code of Federal Regulations. Section 206.202 of Title
44 distinguishes between states, which are “recipients,”
and other entities that receive “subgrants.” Section
206.202(d) characterizes the practice of completing project
worksheets as an administrative task for “identify[ing] the
eligible scope of work” and producing a “quantitative esti-
mate for the eligible work.” Thus, the request for assis-
tance and the project worksheets did not create an express
contract between FEMA and Columbus. Those documents
were inextricably linked with the FEMA-Indiana agree-
ment and FEMA regulations, both of which separate
6 “[The] Public Assistance Program means the
FEMA program establish [sic] under Subchapter IV of the
Robert T. Stafford Disaster Relief and Emergency Assis-
tance Act, as amended, 42 U.S.C. 5121, et seq., which pro-
vides grants to States, local governments, Indian tribes
and private nonprofit organizations for emergency
measures and repair, restoration and replacement of dam-
aged facilities.” 44 C.F.R. § 295.50.
Case: 20-1226 Document: 56 Page: 17 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 17
FEMA from Columbus by establishing a contractual rela-
tionship between FEMA and only the State of Indiana.
Columbus’s claim of an express contract thus fails be-
cause Columbus’s allegations do not establish mutual in-
tent to contract between FEMA and Columbus. For that
reason, we uphold the dismissal of Columbus’s express con-
tract claim, although we do so on the merits rather than for
lack of jurisdiction.
D
Columbus next contends that it had at least an im-
plied-in-fact contract with FEMA and that the Claims
Court should not have dismissed that count of its com-
plaint. The court dismissed Columbus’s claim of an im-
plied-in-fact contract for the same reasons that it dismissed
Columbus’s express contract claim: The FEMA-Indiana
agreement and FEMA regulations established a two-tier
framework for disaster assistance. Columbus, 145 Fed. Cl.
at 225. Under that framework, FEMA entered into a grant
agreement with Indiana, and Indiana in turn provided a
subgrant to Columbus. There was no mutual intent to con-
tract between FEMA and Columbus, according to the court,
because Indiana was the required intermediary and the
only direct recipient of funds. Id. In addition, the court
concluded that Columbus’s allegations failed to establish
consideration that would support a contract between
FEMA and Columbus. Id.
An implied-in-fact contract with the government re-
quires proof of (1) mutuality of intent, (2) consideration, (3)
an unambiguous offer and acceptance, and (4) actual au-
thority on the part of the government’s representative to
bind the government in contract. Hanlin v. United States,
316 F.3d 1325, 1328 (Fed. Cir. 2003).
Like Columbus’s claim of an express contract, Colum-
bus’s implied-in-fact contract claim survives the govern-
ment’s motion to dismiss under Rule 12(b)(1). We do not
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18 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
consider Columbus’s allegations to be pretextual or so friv-
olous as to warrant dismissal on jurisdictional grounds.
As in the case of the express contract claim, however,
mutual intent to contract is the weak link in Columbus’s
argument on the merits of its implied contract claim. Co-
lumbus alleges that the following facts support mutual in-
tent to contract: Columbus and FEMA conferred over the
terms of numerous project worksheets. The State of Indi-
ana played no meaningful role in formulating or adminis-
tering those worksheets. Indiana also played no
meaningful role in preparing Columbus’s request for assis-
tance; instead, Columbus prepared and sent that request
by itself, even though doing so was contrary to the proce-
dures set forth in 44 C.F.R. § 206.202(c). Finally, FEMA
sought to recover the disputed costs from Columbus, not
from Indiana.
Notwithstanding those factual allegations, we conclude
that the parties’ conduct did not establish mutual intent to
contract between FEMA and Columbus. FEMA regula-
tions make clear that the FEMA-Indiana agreement was a
prerequisite to Columbus’s receipt of disaster assistance
and to both the request for assistance and the project work-
sheets. See 44 C.F.R. §§ 206.44(a), 206.202(c)–(d). In turn,
both the FEMA-Indiana agreement and FEMA’s regula-
tions established a two-tier framework for disaster assis-
tance in which Columbus was plainly separated from
FEMA by the State of Indiana. See id. §§ 206.201(m),
206.201(o), 206.202(a). Furthermore, the request for assis-
tance referenced Title 44 of the Code of Federal Regula-
tions, which distinguishes between “recipient” states and
other entities receiving “subgrants” from the states. See id.
§ 206.202(a)–(e). And FEMA’s regulations describe project
worksheets as implementing the FEMA-Indiana agree-
ment, not as creating a separate contractual relationship
between FEMA and Columbus. See id. § 206.202(d). Re-
garding the departure from the prescribed procedure for
submitting the request for assistance, that conduct did not
Case: 20-1226 Document: 56 Page: 19 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 19
change the legal status of the parties’ relationship, a rela-
tionship that was founded on the FEMA-Indiana agree-
ment and FEMA regulations enabling Columbus to receive
disaster assistance in the first instance. The regulations,
which govern the relationships among Columbus, Indiana,
and FEMA, make clear that Columbus did not have a con-
tract with FEMA, express or implied.
For those reasons, we hold that Columbus’s allegations
of an implied-in-fact contract fail to state a cognizable
claim for relief. We therefore affirm the dismissal of Co-
lumbus’s implied contract claim, albeit on Rule 12(b)(6)
grounds.
E
Columbus’s final contract-based claim is that it is enti-
tled to third-party beneficiary status with regard to the
FEMA-Indiana contract.
The test for third-party beneficiary status is whether
the contract reflects the intent of the contracting parties to
benefit a third party. Dewakuku v. Martinez, 271 F.3d
1031, 1041 (Fed. Cir. 2001). The intended benefit must be
direct. Id. The third party need not be specifically identi-
fied but must be in a class clearly intended to be benefited.
Montana v. United States, 124 F.3d 1269, 1273 (Fed. Cir.
1997). “For determination of contractual and beneficial in-
tent when, as here, the contract implements a statutory en-
actment, it is appropriate to inquire into the governing
statute and its purpose.” Roedler v. Dep’t of Energy, 255
F.3d 1347, 1352 (Fed. Cir. 2001).
Columbus asserts that it falls within an identified class
of beneficiaries, namely the agencies and instrumentalities
of the government of Bartholomew County. The FEMA-
Indiana agreement was clearly intended to benefit that
class, Columbus argues, because the ultimate purpose of
the agreement was to provide disaster assistance to
Case: 20-1226 Document: 56 Page: 20 Filed: 03/10/2021
20 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
discrete entities such as Columbus, not merely to the state
government.
The government does not challenge Columbus’s asser-
tions that it was benefited by FEMA funding or that it fell
within a class intended to be benefited. Instead, the gov-
ernment argues that the FEMA-Indiana agreement does
not reflect an intent to directly benefit Columbus or its
class, because the agreement did not identify Columbus by
name and only named the recipient counties. The govern-
ment argues that under Columbus’s logic any entity in the
designated counties that might benefit in any way from the
disaster-recovery assistance would be a third-party benefi-
ciary, thus stretching that doctrine beyond its breaking
point.
Columbus’s showing that the FEMA-Indiana agree-
ment was intended to benefit Columbus is sufficient to sur-
vive the government’s motion to dismiss. To begin with,
the agreement cited and incorporated the Stafford Act,
which is designed to provide an orderly means for the fed-
eral government to assist both states and local governmen-
tal entities. 42 U.S.C. § 5121(b). A “local government” is
defined to include “a county” and its “agency or instrumen-
tality.” Id. § 5122(8). The FEMA-Indiana agreement iden-
tified Bartholomew County as a region intended to receive
disaster assistance, and Columbus alleges it is a unit of lo-
cal government under state and federal law. 7
7 The government states in passing that Columbus
is not “a government,” but is a “nonprofit entity within
one.” Appellee’s Br. 31. However, the government does not
take issue with Columbus’s assertion that it was statuto-
rily eligible for disaster-assistance funds as a component of
a local government. The government also points out that
there are various requirements that grantees and appli-
cants need to satisfy before they may receive Stafford Act
Case: 20-1226 Document: 56 Page: 21 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 21
Contrary to the government’s contention, the class of
potential third-party beneficiaries of the FEMA-Indiana
contract was not unbounded. FEMA’s procedures limit the
class of third-party beneficiaries by requiring potential
subgrantees to submit both a request for assistance and
project worksheets; FEMA must approve both before assis-
tance funds are distributed. See 44 C.F.R. § 206.202; see
also Appellee’s Br. 31.
The agreement was clearly intended to directly benefit
entities in Columbus’s class—the agencies and instrumen-
talities of the Bartholomew County government. The first
general condition of the FEMA-Indiana agreement was
that “FEMA and the State agree to take measures to de-
liver assistance to individuals, households, and govern-
ments.” J.A. 1023. Another general condition was that
“FEMA will give first priority to assistance for individuals
and households, [and] emergency work for protection of
public health and safety.” Id. That condition is further
evidence that the agreement was intended to benefit Co-
lumbus directly, inasmuch as Columbus is the only emer-
gency hospital in a ten-county region in southeastern
Indiana.
In rejecting Columbus’s claim of third-party rights, the
Claims Court relied on the Supreme Court’s decision in As-
tra USA, Inc. v. Santa Clara County, Cal., 563 U.S. 110(2011), and our decision in Sioux Honey Ass’n v. Hartford
Fire Insurance Co., 672 F.3d 1041 (Fed. Cir. 2012). Colum-
bus, 145 Fed. Cl. at 225–228. The Claims Court reasoned
that the contract in this case, like the contracts in those
cases, implements a complex statutory program in which
Congress has not provided subgrantees a private right of
funding. Again, however, the government does not contend
that Columbus failed to satisfy any of those steps.
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22 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
action, and that recognizing third-party claims would in-
terfere with the operation of the statutory program. Id.
The government agrees with the Claims Court that the
Supreme Court’s decision in Astra stands for the proposi-
tion that “permitting a party to sue as a third party bene-
ficiary where the contracts are intertwined with a
statutory scheme that does not grant a private right of ac-
tion would render the absence of that right meaningless.”
Appellee’s Br. 28. For that reason, according to the govern-
ment, the FEMA-Indiana contract cannot be construed to
grant third-party rights to Columbus or other similarly sit-
uated entities. Columbus responds that the alignment of
the parties in this case is fundamentally different than in
Astra, and that, unlike in Astra, Columbus is not seeking
an end-run around the government’s exclusive enforce-
ment authority.
In Astra, the Supreme Court dealt with a statute that
empowered the Department of Health and Human Services
(“HHS”) to enter into standard-form contracts with drug
manufacturers imposing price ceilings on the manufactur-
ers’ sales to certain healthcare facilities. 563 U.S. at 113–
15. Alleging that the drug manufacturers had violated the
terms of those contracts, a plaintiff healthcare provider
sought to enforce the contractual price ceilings as a third-
party beneficiary. Id. at 116.
The Supreme Court rejected the plaintiff’s theory. The
Court explained that the contracts were “not transactional,
bargained-for contracts,” and merely “incorporate[d] statu-
tory obligations.” Id. at 113, 118. As a result, the Court
ruled, a third-party suit to enforce the contracts’ price ceil-
ings was “in essence a suit to enforce the statute itself.” Id.
at 118. That was problematic, the Court explained, be-
cause Congress gave HHS exclusive enforcement rights
against the manufacturers, and “it would make scant
sense” to allow third parties to sue on standard-form con-
tracts parroting statutory obligations when the third
Case: 20-1226 Document: 56 Page: 23 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 23
parties could not sue under the statutes themselves. Id. at
114.
We agree with Columbus that the analysis in Astra
does not apply here. The Court in Astra refused to grant
the plaintiffs third-party beneficiary status because doing
so would have conflicted with a statutory scheme that gave
enforcement power exclusively to the government and not
to private parties.
This case is the converse of Astra. Columbus is not
seeking enforcement powers that would compete with, sup-
plement, or interfere with, the government’s enforcement
powers. Instead, Columbus is seeking enforcement rights
against the government.
Principles of contract law and limitations on private
rights of action both counsel against granting third-party
enforcement rights when those rights would overlap with
the enforcement rights of the government as the contract-
ing party. See Astra, 563 U.S. at 118 (quoting J. Murray,
Corbin on Contracts § 45.6, p. 92 (rev. ed. 2007) (“The dis-
tinction between an intention to benefit a third party and
an intention that the third party should have the right to
enforce that intention is emphasized where the promisee is
a governmental entity.”)). That concern, however, is inap-
plicable where, as here, the third party is not seeking to
supplement or displace the role of the government as the
enforcing party but is seeking to enforce rights against the
government. FEMA’s enforcement powers under the Staf-
ford Act 8 are thus irrelevant because Columbus is attempt-
ing to enforce obligations against FEMA. Permitting
8 By statute and regulation, FEMA has various en-
forcement powers against grantees and subgrantees. See,
e.g., 42 U.S.C. § 5157 (“Penalties”); id. § 5155(c) (“Recovery
of duplicative benefits”); 44 C.F.R. § 206.14 (“Civil enforce-
ment”); id. § 206.116 (“Recovery of funds”).
Case: 20-1226 Document: 56 Page: 24 Filed: 03/10/2021
24 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
Columbus to sue in this case does not raise the concerns
that drove the Court’s decision in Astra, because the Staf-
ford Act does not grant any entity enforcement rights
against the government that would be disrupted by grant-
ing third-party beneficiary status to Columbus. Astra
therefore does not preclude granting third-party rights to
a party in Columbus’s position. 9
Because the FEMA-Indiana agreement evinces a clear
intent to directly benefit a class that includes Columbus,
we hold that Columbus alleges a cognizable claim of third-
party rights. We therefore vacate the Claims Court’s dis-
missal of that claim.
F
Columbus’s final point of error is that the Claims Court
should not have dismissed Columbus’s claim that the gov-
ernment’s recovery of the disputed costs constituted an il-
legal exaction. The court dismissed that claim under Rule
12(b)(6), reasoning that there was no illegal exaction in this
case because Columbus did not have a property interest in
the disputed funds and because Columbus’s due process
rights were satisfied by FEMA’s internal appeals process.
Columbus Reg’l Hosp. v. United States, No. 18-1299C, slip
op. at 1–2 (Fed. Cl. Aug. 14, 2019).
9 Our decision in Sioux Honey is distinguishable on
the same ground. Like the plaintiff in Astra, the Sioux
Honey plaintiffs sought to step into the government’s shoes
to enforce a contractual obligation to collect duties from for-
eign importers violating anti-dumping laws. Sioux Honey,
672 F.3d at 1057–58. We rejected the plaintiffs’ third-party
claims, explaining that Congress vested the government,
not domestic producers, with the authority to enforce anti-
dumping duties, and that a private right of action would
undermine Congress’s chosen enforcement mechanism. Id.at 1058–59 (quoting Astra, 563 U.S. at 118).
Case: 20-1226 Document: 56 Page: 25 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 25
An illegal exaction occurs when the plaintiff has paid
money to the government and seeks return of the money
that was “improperly . . . taken from the claimant in con-
travention of the Constitution, a statute, or a regulation.”
Virgin Islands Port Auth. v. United States, 922 F.3d 1328,
1333 (Fed. Cir. 2019) (quoting Eastport S.S. Corp. v. United
States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)). The essence of
an illegal exaction is when “the government has the citi-
zen’s money in its pocket.” Nat’l Veterans Legal Servs. Pro-
gram v. United States, 968 F.3d 1340, 1348 (Fed. Cir. 2020)
(internal quotation marks omitted). The classic example of
an illegal exaction claim is a tax refund suit. Id. at 1347.
Another example is a suit to recover improper or excessive
fees connected with the provision of government services.
See, e.g., id. at 1348–49; Figueroa v. United States, 466 F.3d
1023, 1029 (Fed. Cir. 2006) (determining whether patent
application fees amount to an illegal exaction).
There was no illegal exaction in this case because Co-
lumbus had only a contingent interest in the disputed
funds. Put differently, FEMA does not have Columbus’s
money in its pocket; instead, FEMA recovered funds that it
had conditionally provided to Columbus and that were still
subject to revocation.
Columbus contends that it acquired a property interest
in the money it received from the government once it ob-
tained possession of those funds, and that the govern-
ment’s recovery of those funds constituted an exaction.
That contention is contrary to our case law, however. We
have required that plaintiffs have a property interest in
funds cognizable under the Fifth Amendment in order to
maintain an illegal exaction claim. See, e.g., Texas State
Bank v. United States, 423 F.3d 1370, 1380 (Fed. Cir.
2005).
In American Bankers Ass’n v. United States, 932 F.3d
1375 (Fed. Cir. 2019), we held that the plaintiffs lacked a
property interest, cognizable under the Fifth Amendment,
Case: 20-1226 Document: 56 Page: 26 Filed: 03/10/2021
26 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
in a higher statutory dividend rate on Federal Reserve
stock. Id. at 1385. The plaintiffs had no property interest
because they had no “vested right” to the higher dividend.
Id. There was no vested right because Congress had “ex-
pressly reserved” its right to alter the dividend rate. Id.;
see also Dames & Moore v. Regan, 453 U.S. 654, 674 n.6
(1981) (President’s nullification of the petitioner’s attach-
ment against foreign banks’ assets did not constitute a tak-
ing, because the President exercised preexisting authority
to prevent or condition attachments, and thus “petitioner
did not acquire any ‘property’ interest in its attachments of
the sort that would support a constitutional claim for com-
pensation”).
Like the plaintiffs in American Banking and Dames &
Moore, Columbus never had an unconditional interest in
the disputed funds in this case, because FEMA expressly
reserved the right to recover those funds for certain rea-
sons within a specific period of time. FEMA reserved that
right through language in the FEMA-Indiana agreement,
which states that FEMA could recover assistance pay-
ments if the funds were distributed through “error, misrep-
resentation, or fraud, or if funds [were] spent
inappropriately.” J.A. 1026. FEMA also reserved that
right through a regulation, 44 C.F.R. § 206.116(b), which
requires an applicant to return funds to FEMA if FEMA
“determines the assistance was provided erroneously, that
the applicant spent the funds inappropriately, or that the
applicant obtained the assistance through fraudulent
means.” In sum, there were strings attached to FEMA’s
funds, and in light of those strings the funds were not “ex-
acted” from Columbus within the meaning of the illegal ex-
action doctrine.
By statute, those strings are cut after a prescribed pe-
riod of time: FEMA is barred from seeking recovery of dis-
aster-assistance funds for a particular recovery project
“after the date that is 3 years after the date of transmission
of the final expenditure report for the disaster or
Case: 20-1226 Document: 56 Page: 27 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 27
emergency.” 42 U.S.C. § 5205(a)(1) (2008) (“Disaster grant
closeout procedures”). Thus, recipients of assistance funds
may develop fully vested property interests in those funds
after the closeout period has expired. But that did not oc-
cur in this case: Columbus does not allege that FEMA ini-
tiated its recovery of the disputed funds after the closeout
period ended. As such, Columbus lacked a vested property
interest in the disputed funds, and the government’s de-
obligation of those funds did not constitute an “exaction”
within the meaning of the “illegal exaction” doctrine.
We therefore affirm the court’s dismissal of Columbus’s
illegal exaction claim under Rule 12(b)(6).
G
Finally, the government asks us to affirm the dismissal
of the complaint on the alternative ground that this case
should have been brought in federal district court under
section 702 of the Administrative Procedure Act (“APA”),
not in the Court of Federal Claims under the Tucker Act,
28 U.S.C. § 1491. 10 Appellee’s Br. 43–51. The government
10 Section 702 of the APA creates a cause of action
giving a person “suffering legal wrong because of agency
action, or adversely affected or aggrieved by agency action
within the meaning of a relevant statute” the right “to re-
view thereof.” 5 U.S.C. § 702. It also waives sovereign im-
munity for “an action in a court of the United States
seeking relief other than money damages” stating a claim
that “an agency or an officer or employee [of the United
States] acted or failed to act in an official capacity or under
color of legal authority.” Id. District courts are accorded
jurisdiction over such a cause of action by the general fed-
eral question jurisdiction statute, 28 U.S.C. § 1331.
The Tucker Act, 28 U.S.C. § 1491(a)(1), does not create
a cause of action, but grants jurisdiction to the Court of
Federal Claims and waives sovereign immunity in that
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28 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
contends that Columbus cannot pursue its claims in the
Court of Federal Claims because those claims are equitable
in nature and the Court of Federal Claims does not have
broad equitable powers. In arguing that the Claims Court
lacks jurisdiction over Columbus’s claims in this case, the
government relies on the Supreme Court’s decision in
Bowen v. Massachusetts, 487 U.S. 879 (1988).
We reject the government’s argument for two reasons.
First, the relief Columbus seeks in this case is quite differ-
ent from the relief sought in Bowen. Unlike in Bowen, Co-
lumbus is seeking only a monetary award, not any form of
equitable relief. Second, unlike in Bowen, the claims in this
case (other than the illegal exaction claim) are predicated
on breach of contract, a cause of action that is exclusively
assigned to the Court of Federal Claims by the Tucker Act
insofar as the claimant seeks damages in excess of $10,000,
see Awad v. United States, 301 F.3d 1367, 1372 (Fed. Cir.
2002). Columbus nonfrivolously invoked that statutory ba-
sis for the Claims Court’s jurisdiction, and the government
has not pointed to any reason that choice should not be re-
spected.
1
In Bowen, Massachusetts filed an action against the
federal government seeking injunctive, declaratory, and
monetary relief relating to the State’s participation in the
Medicaid program. The action was brought as an APA ac-
tion in federal district court. Bowen, 487 U.S. at 887–88.
The government argued that the action should have been
court for “any claim against the United States founded ei-
ther 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 liqui-
dated or unliquidated damages in cases not sounding in
tort.”
Case: 20-1226 Document: 56 Page: 29 Filed: 03/10/2021
COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 29
brought in the Claims Court. The Supreme Court, how-
ever, held that the case was properly before the district
court.
The Bowen Court first rejected the government’s argu-
ment that section 702 of the APA, which allows for review
of agency action “seeking relief other than money dam-
ages,” could not serve as a vehicle for judicial review in the
case. Bowen, 487 U.S. at 891–901. The Court explained
that Massachusetts sought equitable as well as monetary
relief, and that the monetary relief sought by the State was
not for “damages,” i.e., compensation for an injury, but in-
stead was a form of specific relief seeking to enforce a stat-
utory mandate. Id. at 893.
Second, the Court rejected the government’s argument
that bringing the APA action in district court was pre-
cluded by section 704 of the APA, which provides for dis-
trict court review of any “final agency action for which
there is no other adequate remedy in a court.” Bowen, 487
U.S. at 901–08. Section 704 was no bar to jurisdiction in
the case before it, the Court ruled, because in the circum-
stances of that case “the doubtful and limited relief availa-
ble in the Claims Court is not an adequate substitute for
review in the District Court.” Id. at 901. The Court ex-
plained that the interaction between the State’s admin-
istration of its responsibilities under an approved Medicaid
plan and the government’s interpretation of its regulations
“may make it appropriate for judicial review to culminate
in the entry of declaratory or injunctive relief that requires
the [government] to modify future practices.” Id. at 905.
Given that the Claims Court lacks the equitable powers of
a district court, the Supreme Court stated that it was far
from clear that the Claims Court could provide an adequate
remedy for the relief sought by Massachusetts. For that
reason, the Court held, section 704 did not bar Massachu-
setts from bringing an APA action in the district court. Id.at 905–06.
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30 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
The government argues that in light of the discussion
of section 704 of the APA in Bowen, the Claims Court lacks
jurisdiction in this case. We disagree. Unlike the situation
in Bowen, Columbus has not sought equitable relief in this
case; it has sought only an award of money in the form of
contract damages. Moreover, the dispute in this case is not
part of a continuing relationship between the parties, in
which the request for relief will necessarily affect the rights
of the parties in their ongoing dealings with one another,
as was the case in Bowen. Instead, it is a discrete dispute
about whether FEMA breached its contractual obligations
in a relationship that has otherwise ended, and for which
only money is sought as a remedy.
Recent decisions of the Supreme Court and this court
have clarified the distinction drawn in Bowen between the
kinds of requests for relief that can be brought in the Court
of Federal Claims and the kinds that cannot. In Maine
Community Health Options v. United States, 140 S. Ct.
1308 (2020), the Supreme Court characterized that distinc-
tion as between statutes that “attempt to compensate a
particular class of persons for past injuries or labors” and
those that “subsidize future state expenditures.” Id. at
1329. The first group permits Tucker Act suits, the Court
explained, while the second group does not. Id.The Court in that case distinguished Bowen from the
case before it on several grounds. In Bowen, the Court ex-
plained, the State “did not seek money damages, but in-
stead sued for prospective declaratory and injunctive relief
to clarify the extent of the Government’s ongoing obliga-
tions under the Medicaid program.” Maine Community,
140 S. Ct. at 1330. Thus, the suit in Bowen “was not merely
for past due sums, but for an injunction to correct the
method of calculating payments going forward.” Id. More-
over, the Court noted that the State had sought review un-
der the APA in Bowen because of the litigants’ “complex
ongoing relationship,” which made it important that a dis-
trict court with full equitable powers adjudicate future
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 31
disputes. Id. In that regard, the Court noted that the APA
is tailored to “[m]anaging the relationships between States
and the Federal Government that occur over time and that
involve constantly shifting balance sheets,” while the
Tucker Act is suited to “remedy[ing] particular categories
of past injuries or labors for which various federal statutes
provide compensation.” Id.
In view of that distinction, Columbus’s claim is clearly
directed to remedying a past injury, not managing an
ongoing relationship between Columbus and FEMA. Co-
lumbus’s past injury is the monetary loss it suffered by
funding recovery contracts in reliance on the government’s
commitment to provide disaster assistance. While Colum-
bus seeks monetary relief in the form of a request for the
release of funds that FEMA has recovered, nothing about
that request for relief is inconsistent with a contract-based
claim: Columbus’s claim is that FEMA promised to provide
those funds if Columbus complied with the rules governing
their use, and that FEMA breached that obligation.
Similarly, in Great-West Life & Annuity Insurance Co.
v. Knudson, 534 U.S. 204 (2003), the Supreme Court char-
acterized Bowen as a suit for an injunction to correct the
method of calculating payments going forward, not merely
for the payment of past due sums. As the Court explained,
in Bowen “Massachusetts claimed not only that the federal
government failed to reimburse it for past expenses pursu-
ant to a statutory obligation, but that the method the fed-
eral government used to calculate reimbursements would
lead to underpayments in the future.” Id. at 212.
Our recent decisions in Sanford Health Plan v. United
States, 969 F.3d 1370 (Fed. Cir. 2020), and Community
Health Choice, Inc. v. United States, 970 F.3d 1364 (Fed.
Cir. 2020), are to the same effect. In those cases, we fol-
lowed the Supreme Court’s analysis in Maine Community
and Great-West Life and held that the reimbursement
claims sought by the plaintiff insurers could be adjudicated
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32 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
by the Court of Federal Claims. We rejected arguments
that those reimbursement claims were claims for specific
relief in the form of the return of funds rather than com-
pensation for an alleged injury. Instead, we held that the
claims were purely for monetary awards within the Tucker
Act jurisdiction of the Court of Federal Claims; Bowen’s
discussion of section 704 of the APA, we concluded, was not
to the contrary. See Sanford, 969 F.3d at 1382; Community
Health, 970 F.3d at 1374 n.6.
The claim for repayment of the disaster-assistance
funds in this case is indistinguishable in any material way
from the claims for reimbursement in Sanford and Com-
munity Health. As we explained in Community Health,
quoting from Maine Community, the type of relief the in-
surers were seeking is best characterized as “specific sums,
already calculated, past due, and designed to compensate
for completed labors,” and as such the insurers’ claim was
properly within the jurisdiction of the Claims Court. 970
F.3d at 1374 n.6. That same characterization applies to the
request for relief in this case.
This court’s analysis in Suburban Mortgage Associates,
Inc. v. United States Department of Housing & Urban Af-
fairs, 480 F.3d 1116 (Fed. Cir. 2007), is instructive. In that
case, the plaintiff sued in district court, alleging breach of
an insurance contract. Id. at 1119. The plaintiff sought
specific performance of the contract and a declaratory judg-
ment that the government was required to make good on
certain loan guarantees incorporated in the contract. Id.The government argued that despite the plaintiff’s efforts
to couch its claims as requests for equitable relief, the
plaintiff was in essence suing for monetary relief, and the
case therefore belonged in the Court of Federal Claims. Id.
at 1126.
We agreed with the government that, despite the man-
ner in which it was pleaded, the action was actually one for
money. For that reason, we held, an action in the Court of
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 33
Federal Claims would provide an adequate remedy. In
light of section 704 of the APA, which bars an APA action
for judicial review of agency action if there is an adequate
remedy in another court, we directed that the district court
action should be dismissed or transferred to the Court of
Federal Claims. Id. at 1126–29.
In determining whether the plaintiff’s case could be
brought in district court, we found it unnecessary to con-
sider whether, in light of APA section 702, the request for
relief constituted a request for “money damages” that
would bar an APA action. Id. at 1125–26. It was sufficient,
we held, to conclude that APA section 704 prohibited the
action from being brought as an APA review in district
court because the action was, in essence, a claim for money
for which the Court of Federal Claims could provide an ad-
equate remedy. Id. at 1126.
The same analysis applies here, except that this case is
more straightforward. The action in this case is not just
“in essence” one for money, it is explicitly one for money.
No other relief is sought, nor is there any reason to believe
that any equitable remedy will be necessary to give Colum-
bus the full relief requested in its complaint. 11 Accordingly,
Columbus’s action is properly before the Court of Federal
11 In its Bowen-based argument, the government does
not separately analyze Columbus’s illegal exaction claim.
With respect to that claim, it is even clearer than in the
case of the contract-based claims that the cause of action
for an illegal exaction is one purely for money that can be
brought in the Court of Federal Claims. See Consol. Edison
Co. v. United States, 247 F.3d 1378, 1384–85 (Fed. Cir.
2001) (holding that the Claims Court can provide an ade-
quate remedy for a monetary claim through the illegal ex-
action doctrine).
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34 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
Claims, and Columbus would be barred by section 704 of
the APA from bringing this action in district court.
By contrast, when we have concluded that a plaintiff is
seeking equitable relief, we have held that the case is not
properly before the Court of Federal Claims. In Lummi
Tribe of the Lummi Reservation v. United States, 870 F.3d
1313 (Fed. Cir. 2017), for example, we held that the Court
of Federal Claims lacked jurisdiction over an action based
on an asserted statutory right to a block grant under the
Native American Housing Assistance and Self-Determina-
tion Act of 1996. We ruled that the statute was not money
mandating and that the underlying claim was “not for pres-
ently due money damages,” but was for equitable relief. Id.
at 1319. Similarly, in National Center for Manufacturing
Sciences v. United States, 114 F.3d 196 (Fed. Cir. 1997), we
held the suit was properly brought as an APA review action
and not in the Claims Court under the Tucker Act. Id. at
202. Applying the principles of Bowen, we explained that
the plaintiff’s complaint, although partially seeking a mon-
etary award, made clear that the plaintiff “anticipates the
need for injunctive relief, such as an order enjoining the
defendants from obligating and disbursing particular
funds that should be reserved” for the plaintiff and extend-
ing the time of the obligation to preserve the status quo.
Id. at 201. 12
12 Similarly, following an adverse decision by the In-
terior Board of Land Appeals (“IBLA”), the Taylor Energy
Company sought to file an action in the Claims Court for
breach of contract and to reverse the IBLA’s decision. See
Taylor Energy Co. v. Dep’t of the Interior, No. 20-1909 (Fed.
Cir. Mar. 9, 2021). We noted that review of IBLA decisions
lies in district courts and that IBLA decisions are binding
on the Claims Court in related lawsuits. Because the
Claims Court “must accept the IBLA’s decisions,” we held
that the Claims Court could not provide an adequate
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 35
2
A second reason why Columbus’s contract-based claims
are properly before the Court of Federal Claims is that Co-
lumbus seeks monetary relief on a breach of contract the-
ory, a cause of action for which the Tucker Act expressly
vests jurisdiction in the Claims Court, see 28 U.S.C.
§ 1491(a)(1). The government argues that because Colum-
bus has no contract-based rights in this case, it may pro-
ceed only by challenging FEMA’s de-obligation decision as
final agency action reviewable under section 702 of the
APA. For the reasons set forth above, we have rejected the
premise of that argument and held that Columbus can pur-
sue contract rights on a third-party beneficiary theory.
In order for the Claims Court to have jurisdiction over
a breach of contract claim, the action must be solely for
remedy for Taylor’s requested reversal of the IBLA decision
and that jurisdiction therefore lay in the district court, not
the Claims Court. Id., slip op. at 11, 14.
In this case, Columbus seeks only a discrete contract-
based monetary remedy, and the government does not ar-
gue that FEMA’s rejection of Columbus’s internal appeal
barred Columbus’s action in the Claims Court as a matter
of collateral estoppel. Collateral estoppel applies to admin-
istrative determinations when the administrative agency
“is acting in a judicial capacity and resolves disputed issues
of fact properly before it which the parties have had an ad-
equate opportunity to litigate.” B&B Hardware, Inc. v.
Hargis Indus., Inc., 575 U.S. 138, 148 (1975) (citations
omitted). While the IBLA acts in a judicial capacity and
satisfies the standards for adjudicative determinations, see
Taylor Energy Co. v. Dep’t of the Interior, 975 F.3d 1303,
1311 n.6 (Fed. Cir. 2020) (citing Underwood Livestock, Inc.
v. United States, 89 Fed. Cl. 287, 290 (2009)), the govern-
ment has not suggested that FEMA’s internal appeals pro-
cess does so.
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36 COLUMBUS REGIONAL HOSPITAL v. UNITED STATES
money and not for “injunctive relief or specific perfor-
mance, except in narrowly defined, statutorily provided cir-
cumstances.” Kanemoto v. Reno, 41 F.3d 641, 645 (Fed.
Cir. 1994). We look to the substance of the complaint to
determine whether the action is for monetary or equitable
relief. Gonzalez & Gonzalez Bonds & Ins. Agency, Inc. v.
Dep’t of Homeland Sec., 490 F.3d 940, 944 (Fed. Cir. 2007);
Suburban Mortg. Assocs., 480 F.3d at 1124; Nat’l Ctr. for
Mfg. Scis. v. United States, 114 F.3d 196, 198–99 (Fed. Cir.
1997).
For example, in Brazos Electric Power Cooperative v.
United States, 144 F.3d 784 (Fed. Cir. 1998), the plaintiff
sought to recover certain funds that the government had
withheld as a penalty under a contract with the plaintiff.
The plaintiff pleaded its claim as one for specific relief, but
we held that it was actually one for damages. Id. at 786–
87. In substance, Brazos was seeking a refund of money
that was wrongfully paid to the federal government, which
we held was a request for contract damages. “Whether this
refund is paid directly to Brazos or whether it is credited
towards other money Brazos owes to the federal govern-
ment is irrelevant to our analysis. Either way, Brazos
would be receiving monetary damages from the public fisc
of the United States which is the touchstone of Tucker Act
jurisdiction.” Id. at 787.
We have reached the same conclusion in other, similar
cases. See, e.g., Securiforce Int’l Am., LLC v. United States,
879 F.3d 1354, 1360 (Fed. Cir. 2018) (“If the only signifi-
cant consequence of the declaratory relief sought would be
that [the plaintiff] would obtain monetary damages from
the federal government, the claim is in essence a monetary
one” that falls within the contract-based jurisdiction of the
Court of Federal Claims. (internal quotation marks omit-
ted)); Brighton Vill. Assocs. v. United States, 52 F.3d 1056,
1059 n.3 (Fed. Cir. 1995) (noting that Bowen reinforces the
jurisdiction of the Court of Federal Claims in resolving con-
tract disputes).
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COLUMBUS REGIONAL HOSPITAL v. UNITED STATES 37
In this case, Columbus has sought only a money judg-
ment, and its request for relief does not in any way invoke
equitable remedies. Even if it would have been possible for
Columbus to seek some form of equitable relief in this case,
it chose not to do so, but instead elected to pursue a mone-
tary claim in the Court of Federal Claims on a breach of
contract theory. It was therefore proper for the Claims
Court to exercise jurisdiction over Columbus’s breach of
contract claims. 13 For that reason as well, we reject the
government’s alternative ground for dismissing Colum-
bus’s contract-based claims for lack of jurisdiction.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED
Costs
No costs.
13 The government relies in part on the Seventh Cir-
cuit’s decision in Columbus Regional Hospital v. FEMA,
708 F.3d 893 (7th Cir. 2013), which involved an earlier dis-
pute between the parties dealing with the same disaster-
assistance grant. Columbus brought that action in district
court as a challenge to final agency action under section
702 of the APA, seeking an increase of $20 million in grant
assistance. Based on its interpretation of Bowen, the Sev-
enth Circuit held that the action was for specific perfor-
mance rather than damages and was therefore properly
before the district court. Id. at 896–97. Significantly, how-
ever, that case was not brought on a breach of contract the-
ory. In fact, the Seventh Circuit specifically acknowledged
that “compensation for breach of contract is outside the
scope of § 702.” Id. at 896. The Seventh Circuit’s decision
therefore does not support the government’s contention
that an action such as this one, seeking damages for breach
of contract, must be brought in district court instead of in
the Court of Federal Claims.