Augustin S. James v. Louis Caldera, Secretary of the Army and Philip J. Schrock , 159 F.3d 573 ( 1999 )

MICHEL, Circuit Judge,

dissenting.

I write in dissent for two reasons. First, I believe that the majority’s analysis is in direct conflict with the precedent of this court and the Supreme Court. Second, I view the majority’s holding as frustrating the legislative purpose of the Tucker Act as amended and likely to create unnecessary confusion, unpredictability, expense, and delay in the litigation of claims for military pay and benefits.

Section 702 of the APA permits district court review of agency actions provided that the suit is “seeking relief other than money damages.” Even then, however, section 704 prohibits APA review if there is an “adequate remedy” in another court. The majority concludes that relief may be sought in federal district court pursuant to section 702 of the APA with regard to James’s challenge to the imposition of the bar to reenlistment and his request that the bar be removed, but is uncertain as to whether there may be APA relief for James’s claim to extend his last reenlistment. Thus, for those claims that the majority regards as subject to district court jurisdiction, it does not consider that the Court of Federal Claims offers an “adequate remedy” under the Tucker Act.

The majority sets forth its analysis in light of the “background” of Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). Bowen, however, creates only a limited exception to Tucker Act jurisdiction. This case falls within the general rule.

In Bowen the Supreme Court held that a state’s suit seeking reimbursement for certain medical and rehabilitative expenses pursuant to the federal Medicaid scheme was a suit over which only a federal district court, not the United States Claims Court, the predecessor court to the United States Court of Federal Claims, had jurisdiction. As the majority notes, the Supreme Court quoted approvingly the D.C. Circuit’s interpretation of the term “money damages” as used in the APA, 5 U.S.C. § 702:

The term “money damages,” we think, normally refers to a sum of money used as compensatory relief. Damages are given to the plaintiff to substitute for a suffered loss, whereas specific remedies are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he was entitled. Thus, while in many instances an award of money is an award of damages, [occasionally a money award is also a specie remedy. Courts frequently describe equitable actions for monetary relief under a contract in exactly those terms.

Bowen, 487 U.S. at 895, 108 S.Ct. 2722, quoting Maryland Dep’t of Human Resources v. Department of Health & Human Servs., 763 F.2d 1441, 1446 (D.C.Cir.1985) (citations and internal quotation marks omitted). In this context, the Supreme Court concluded that “[t]he fact that a judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the relief as ‘money damages.’” Id. at 893, 108 S.Ct. 2722. However, this conclusion should not be read to suggest that claims for money may be heard under the APA, other than in the most unusual circumstances. Indeed, the Court took particular note of the “complex questions of federal-state interaction” raised in Medicaid disallowance decisions. Id. at 908, 108 S.Ct. 2722. Thus, as the Court explained:

There are, of course, many statutory actions over which the Claims Court has jurisdiction that enforce a statutory mandate for the payment of money rather than obtain compensation for the Government’s failure to so pay. The jurisdiction of the Claims Court, however, is not expressly limited to actions for money damages, whereas that term does define the limits of the exception to § 702. Moreover, such statutes, unlike a complex scheme such as the Medicaid Act that governs a set of intricate, ongoing relationships between the States and the Federal Government, are all statutes that provide compensation for specific instances of past injuries or labors; suits brought under these statutes do not require the type of injunctive and declaratory powers that the district courts can bring to bear in suits under the Medicaid Act. Thus, to the extent that suits to enforce these statutes can be considered suits for specific relief, suits under the Tucker Act in the Claims Court offer precisely the sort of “special and adequate review procedures” that § 70k requires to direct litigation away from the district courts.

Id. at 900 n. 31, 108 S.Ct. 2722 (citations omitted and emphasis added).

Under this Bowen analysis, it seems plain that James’s suit is precisely the type of suit that should be heard in the Court of Federal Claims rather than federal district court. “Complex questions of federal-state interaction” have not been raised. Id. at 908, 108 S.Ct. 2722. This is not the type of dispute “that a district court would be in a better position to understand and evaluate than a single tribunal headquartered in Washington.” Id. The dispute does not “involve the construction of state law.” Id. Moreover, there is no “complex ongoing relationship between the parties” to monitor and referee. Id. at 905, 108 S.Ct. 2722. There is no need for “prospective relief.” Id. Nor is it necessary to “oust a district court of its normal jurisdiction under the APA.” Id. at 904, 108 S.Ct. 2722. In short, James is seeking money damages from the federal government, the touchstone of Tucker Act jurisdiction. The Court of Federal Claims offers James a wholly adequate remedy. See 5 U.S.C. § 704 (1994).

The majority is troubled by the form of James’s complaint and has subdivided it into several claims, some of which, after a careful parsing, it considers should be heard in district court pursuant to the APA and others perhaps in the Court of Federal Claims but only after additional jurisdictional fact-finding. I do not read James’s complaint in so formalistic a manner, but instead read it as simply requesting retirement pay and benefits, the payment of which necessitates a correction of military records. This reading is based upon clear precedent that “[s]ub-stance, not form, is controlling.... It is well-settled that a plaintiff ... should not be allowed to avoid the jurisdictional (and hence remedial) restrictions of the Tucker Act by casting its pleadings in terms that would enable a district court to exercise jurisdiction under a separate statute.” Williams v. Secretary of the Navy, 787 F.2d 552, 557 (Fed.Cir.1986) (internal quotation marks omitted). See also Brazos Elec. Power Coop. v. United States, 144 F.3d 784, 787 (Fed.Cir.1998) (“Court of Federal Claims jurisdiction cannot be circumvented by such artful pleading and, accordingly, we customarily look to the substance of the pleadings rather than their form.”); National Ctr. for Mfg. Sciences v. United States, 114 F.3d 196, 199 (Fed.Cir.1997) (“Notwithstanding the imprecision of the complaint, we therefore look to the true nature of the action in determining the existence or not of jurisdiction.” (internal quotation marks omitted)); Katz v. Cisneros, 16 F.3d 1204, 1207 (Fed.Cir.1994) (“Regardless of the characterization of the case ascribed by Hollywood Associates in its complaint, we look to the true nature of the action in determining the existence or not of jurisdiction.”); Maier v. Orr, 754 F.2d 973, 982 (Fed.Cir.1985) (“We look to the true nature of the action in the district court in determining jurisdiction of an appeal. A civil action for recovery of money from the United States cannot be disguised by couching it in mandamus terms.” (citation omitted)).¹

A fair reading of James’s complaint indicates that he is, at bottom, seeking only retirement pay and benefits. The preamble to the complaint requests that James’s “military record be corrected to reflect that he had 20 years of active duty service and that he be granted retirement pay and benefits accordingly.” (emphasis added). James’s non-eligibility for retirement benefits is then mentioned in nine of the forty-seven paragraphs of the complaint (thirty-six of these forty-seven paragraphs simply allege the “facts”). Following this, two of James’s four claims mention James’s non-eligibility for retirement benefits. Finally, James’s prayer for relief requests that his records be amended “to reflect 20 years active duty service and eligibility for retirement retroactive to the date that plaintiff would have attained 20 years service had his request for extension of enlistment been properly granted” (emphasis added). Consequently, I cannot agree with the majority’s conclusion that “on its face, James’ complaint does not suggest a claim for money damages.” Rather, I read this complaint as signaling that the nature of this action is a request for retirement pay and benefits.

It is true that James has also requested certain types of injunctive relief — he has asked that his records be corrected to reflect twenty years active duty service and that the Bar to Reenlistment be removed. However, this injunctive relief is simply the formality that must be completed before the money payment can be made. Such injunctive relief is entirely within Congress’s contemplation that, under the Tucker Act, the Court of Federal Claims “may, as an incident of and collateral to any such judgment, issue orders directing restoration to office or position, placement in appropriate duty or retirement status, and correction of applicable records, and such orders may be issued to any appropriate official of the United States.” 28 U.S.C. § 1491(a)(2) (1994). Indeed, the legislative history of this statute evidences a clear intent that claims such as James’s, for retirement benefits and correction of military records, would be heard in just one court— the then Court of Claims — and not in two separate actions in the Court of Claims and federal district court. See S.Rep. No. 92-415 at 3 (1972), reprinted in 1972 U.S.C.C.A.N. 3116, 3118 (explaining that the amendment of the Tucker Act to allow such collateral or incidental injunctive relief was, in part, to permit “monetary claims which are based on retirements in an improper status”); Collateral Relief in the Court of Claims; Recall of Retired Commissioners; Hearing Before Subcomm. No. 2 of the Comm, on the Judiciary, House of Representatives, 92nd Cong. 11 (1972) (Statement of Wilson Cowen, Chief Judge, United States Court of Claims)² (“The purpose of the bill is to allow citizens who have monetary claims falling within the jurisdiction of the court to obtain all necessary relief in one action.... The Court of Claims ... has many suits brought by military personnel. These are monetary claims based on retirement in an improper -status, such as failure to award disability retirement pay or retirement pay at a proper rank, and so on. Some of the cases are also based upon an improper dismissal from the service. In such cases, the Court of Claims can grant a monetary judgment but cannot alter the serviceman’s military status as previously determined by a military board. This bill would permit the Court of Claims to grant such military personnel the complete relief which they can now obtain only through subsequent discretionary administrative action, or by filing another suit in district court to obtain a declaratory judgment and a writ of mandamus ordering the restoration of the statutory rights of the serviceman.”); Collateral Relief in the Court of Claims; Recall of Retired Commissioners; Hearing Before Subcomm. No. 2 of the Comm, on the Judiciary, House of Representatives, 92nd Cong. 15 (1972) (Statement of Marion Bennett, Chief Commissioner, United States Court of Claims) (“[W]e know of a few glaring cases where it has been of great expense to people who could ill afford to prosecute their case in more than one forum, where they have had to do this.... It is not so much that we are flooded by this type of case as that we occasionally see plaintiffs who holler their heads off because they have to go to more than one place for relief.”).

The majority holds that James’s challenge to the bar to reenlistment and his demand that the bar be removed should be heard in federal district court under the APA. I am not persuaded by the reasoning behind this conclusion. As an initial matter, as explained above, I believe that this is the type of incidental or collateral relief that Congress intended would be granted pursuant to 28 U.S.C. § 1491(a)(2). Just as significantly, however, I do not agree with the majority’s treatment of James’s claims regarding the bar to reenlistment as constituting distinct claims that may be severed from his action and heard in a separate courthouse. As I read James’s complaint, his claims regarding the bar to reenlistment are entirely intertwined with his other claims regarding retirement benefits. Indeed, paragraph a of James’s prayer for relief requested that an order be issued requiring the correction of James’s military records with respect to both reflecting twenty years of active duty service and removing the bar to reenlistment (albeit in separate sub-paragraphs). Similarly, the claims are entangled throughout the complaint. Thus, for example, the preamble to the complaint states, inter alia, that James seeks an order “deleting from [his] records a Bar to Reenlistment improperly imposed 5 months before [James] would have attained twenty years in service and retirement eligibility.” Paragraph 2 recites, inter alia, that “James was involuntarily discharged from the United States Army ... less than 5 months before he would have attained 20 years in service and full retirement eligibility. This discharge resulted from Army decisions to deny him a 5 month extension of his then-current enlistment, and to impose a Bar to Reenlistment....” The bar to reenlistment and James’s eligibility for retirement benefits are further interwoven in paragraph 23, which alleges that “[due to its late date of approval], [t]he Bar to Reenlistment should therefore not have operated to prevent [James] from serving out the 5 months remaining to obtain retirement eligibility.” Similar such statements linking the bar to reenlistment with James’s ineligibility for retirement benefits are also found in paragraphs 25 and 28. Perhaps even more significantly, the four “Claims” in James’s complaint contain no separate or distinct demands regarding the bar to reenlistment. James’s “First Claim” is that “Defendants’ actions were contrary to law, had no basis in fact, were arbitrary and capricious and an abuse of discretion, all in violation of plaintiffs due process rights under the Fifth Amendment to the United States Constitution.” His “Second Claim” also did not set forth a distinct bar to reenlistment claim, but rather alleged a Due Process violation “by failing and refusing to follow the letter and spirit of the Army regulations governing [James’s] request for extension of enlistment, the Bar to Reenlistment, [James’s] involuntary discharge, and [James’s] eligibility for retirement.” James’s “Third Claim,” alleged a Due Process violation for “failing and refusing to follow the letter and spirit of Department of Defense Directive 1010.4, codified at 32 C.F.R. § 62.4.” Finally, James’s “Fourth Claim” asserted that the allegedly “improper use of the Bar to Reenlistment and denial of [James’s] request for extension to accomplish the same result ([James’s] involuntary discharge and the denial of [James’s] retirement benefits) that had been sought through the prior Administrative Discharge Board ... violated the Double Jeopardy Clause of the Fifth Amendment....” Thus, throughout James’s complaint, there is no distinct claim regarding the bar to reenlistment but, rather, the bar to reenlistment is mentioned wholly in relation to James’s eligibility for retirement benefits. Consequently, “the true nature of the action” is an attempt to obtain retirement benefits — money—and the removal of the bar to reenlistment is merely subsidiary to the pecuniary nature of the action. See National Ctr. for Mfg. Sciences, 114 F.3d at 199; Katz, 16 F.3d at 1207; Maier, 754 F.2d at 982.

Furthermore, viewing the dispute over the bar to reenlistment as a dispute involving injunctive relief ignores the reality of the situation. Despite the statements to the contrary in his brief, it is surely inconceivable that, almost ten years after his discharge, James truly wants to reenlist and once again become a First Sergeant in the Army. Indeed, even if James were permitted to reenlist, he would have to go on full-time active duty for an obligatory five years. While James in his brief offers to “serve out the five months remaining to obtain retirement eligibility,” Appellant's Reply Br. at 3 n.l, he, not surprisingly, makes no offer to serve for five years. Thus, James’s request that the bar to reenlistment be removed is not in his complaint because he wants to reenlist in the Army, rather, James simply wants five months of credit to qualify for his retirement benefits. Treating his references to the bar to reenlistment as constituting a separate, equitable action ignores the context of the complaint and the realities of the situation.

The majority’s decision to permit James to attempt to seek relief in federal district court under the APA also ignores the Court of Federal Claims’s “extensive experience reviewing decisions of corrections boards in military pay eases.” Mitchell v. United States, 930 F.2d 893, 896 (Fed.Cir.1991). As we have noted:

the experience of the [Court of Federal Claims and its predecessor courts] in military pay cases extends back to the nineteenth century origins of the court. See, e.g., Straughan v. United States, 1 Ct.Cl. 324 (1865); Conrad v. United States, 32 Ct.Cl. 139 (1897); Walsh v. United States, 43 Ct.Cl. 225 (1908).

Id. The decision of the court today gives no credence to this lengthy gathering of institutional expertise, but instead permits suits that are essentially military pay cases to be litigated in any one of ninety-four federal judicial districts before federal district court judges who will likely have little or no experience in the arcane law of military pay entitlement and record correction.

I do not believe that James should be permitted to evade the Tucker Act and its cautious waiver of sovereign immunity by merely couching his prayer for relief in partly equitable terms. Moreover, I believe that our precedents have uniformly rejected similar such attempts. In particular, I find Mitchell to be indistinguishable from this case. Mitchell, a reservist, was discharged from the Air Force pursuant to statutory authority some two years before he was eligible for retirement with twenty years service under 10 U.S.C. § 8911 (1956). See Mitchell, 930 F.2d at 894. After exhausting administrative remedies, Mitchell filed suit in the Claims Court and, similarly to James, sought active duty credit toward retirement, active duty pay, reinstatement to active duty until properly retired, attorney fees, and any further just relief. See id. The Claims Court dismissed the suit and Mitchell filed a virtually identical suit in district court under the APA. See id. After the district court denied the Air Force’s motion to dismiss or, alternatively, to transfer the case to the Claims Court, the Air Force appealed to this court. See id. After examining the standard set forth in Bowen, this court reasoned that:

Mitchell’s complaint requests back pay, reinstatement, and correction of records. By statute, the Claims Court may, in appropriate military back pay cases, “provide an entire remedy,” including “restoration to office or position, placement in appropriate duty or retirement status, and correction of applicable records”. 28 U.S.C. § 1491(a)(2). The Claims Court has, in fact, ordered back pay (Skinner v. United States, 594 F.2d 824, 219 Ct.Cl. 322 (1979); Sanders v. United States, 594 F.2d 804, 219 Ct.Cl. 285 (1979); Burd v. United States, 19 Cl.Ct. 515 (1990); Casey v. United States, 8 Cl.Ct. 234 (1985)), restoration to military office, (Skinner; Sanders, Yee v. United States, 512 F.2d 1383, 206 Ct.Cl. 388 (1975); Murphy v. United States, 16 Cl.Ct. 385 (1989)), placement in correct retirement status, (Gant v. United States, 18 Cl.Ct. 442 (1989); Casey) and correction of military records, (Skinner; Sanders, Yee, Burd, Gant, Murphy, Casey). In sum, the Claims Court has explicit statutory authority, which it has exercised, to provide all relief Mitchell requests.

Mitchell, 930 F.2d at 896. Accordingly, because the Claims Court offered an “adequate remedy,” this court concluded that section 704 of the APA mandated that Mitchell’s claim be heard in the Claims Court.

I find James’s claim to be materially indistinguishable from that presented in Mitchell. Both servicemen sought to have their records amended to reflect an extended period of service in order that they would be placed in a different retirement status and receive the attendant retirement pay and benefits. James attempts to distinguish his claim from Mitchell on the grounds that the Mitchell claimant was an officer, whereas he was an enlisted man. Accordingly, because he, as an enlisted man, had no statutory right to reenlist, James contends that he had no right to back pay and that the Court of Federal Claims therefore lacks jurisdiction. I do not find this distinction compelling. James’s claim here, properly read, is for an extension of his enlistment, not to re-enlist. Such a claim for extension of enlistment arises under 10 U.S.C. § 509 (1994) and, if successful, also gives rise to an entitlement to recovery. Thus, I consider James’s jurisdictional question to be controlled by Mitchell.

My concern with today’s decision is not simply that it conflicts with precedent, but also that it adds unnecessary complexity and unpredictability to an area of the law that has been and should continue to be relatively simple and stable.³ This appeal, after all, merely concerns the question of in which courthouse James will have his claim heard. The process of finding the correct courthouse ought to be swift and uncomplicated, especially when the claimants are service members seeking pay and benefits. I find it difficult to accept that Congress intended that the members of our armed forces, simply to receive their due and owing pay and benefits, be required to negotiate such labyrinthine jurisdictional rules. Thus, I disagree with the very approach of the majority. We should not be dissecting complaints so that some parts may end up in a California courthouse and others in Washington, D.C. Not least, when the substance of that complaint has one underlying goal: money. Consequently, I fear that our decision today will not only embolden those who care to forum-shop and evade the Tucker Act’s prudent waiver of sovereign immunity, but also will cause confusion, uncertainty, delay, expense, and inconsistency of results for litigants and their attorneys, not to mention government attorneys paid with tax revenues.

Finally, the most worrisome effect of today’s decision is that it creates a new, easily-utilized escape route from Tucker Act jurisdiction in the Court of Federal Claims for military pay and benefits cases. Plaintiffs from today forward can simply phrase their complaints to seek only the equitable relief of military record correction, when their true goal is to obtain the monetary relief of back pay and benefits. By phrasing their complaints in this pseudo-equitable form, plaintiffs will avoid what to them may seem the less palatable aspects of the Tucker Act’s waiver of sovereign immunity: the relatively short statute of limitations, the nonexistence of jury trials, the possible inconvenience of the Court of Federal Claims’s location in Washington, D.C., and, most significantly, the experience and expertise of the court’s judges in the law of military pay and benefits which may make prevailing harder. Thus, by placing form over substance in contravention of case law, the majority undermines the Court of Federal Claims’s unique, historical role in military pay and benefits cases as well as the delicately delineated waiver of sovereign immunity set forth in the Tucker Act.

As to the APA, I find it inconceivable that the Congress intended that act to negate the historic centralization of military pay cases in an expert court and to be the vehicle for diverting such cases to ninety-four inexpert district courts around the nation. This newly-fashioned and improvident loophole will surely lead to much lawyerly wordplay and judicial handwringing as litigants attempt to formulate James-type complaints to avoid entirely Tucker Act jurisdiction. It may also promote splitting one lawsuit into two: the first in the district court to “correct” records and the second in the Court of Federal Claims for back pay, which the district court cannot order. Because the Court of Federal Claims offers an entirely “adequate remedy” for James and similarly situated litigants the APA does not apply and thus I dissent.

1 . It is also important to note that the above-quoted cases all refer to determining jurisdiction based upon "the true nature of the action,’’ National Ctr. for Mfg. Sciences, 114 F.3d at 199; Katz, 16 F.3d at 1207; Maier, 754 F.2d at 973 (emphasis added to all), or the "substance” or "casting” of the "pleadings," Brazos, 144 F.3d at 787; Williams, 787 F.2d at 557 (emphasis added to both). It is significant that these cases do not refer to examining the substance of each individual claim or sub-claim within the overall action to determine which court has jurisdiction to hear each claim or sub-claim. The majority's approach of carving out each claim or sub-claim for a separate jurisdictional analysis completely negates our prior precedent under which jurisdiction was determined by looking to the "true nature of the action.” The result of this new piecemeal method of jurisdictional analysis will be to encourage many costly and time-consuming disputes regarding what exactly is being claimed and where each of these claims should be heard. Moreover, the majority's approach also will encourage courts to dissect actions that are based on one underlying set of facts, into two cases heard by different courts operating in separate geographic locations and under distinct procedural rules. Our prior precedent, by looking to "the true nature of the action” or the "substance” or "casting” of the "pleadings," avoided the unnecessary creation of such confusion and inefficiency.

2 . Chief Judge Cowen proposed the statutory language at issue here in a letter to Harold D. Donahue, Chairman of Subcommittee No. 2 of the Committee on the Judiciary in a letter dated March 2, 1972. This language was incorporated into H.R. 12392 and remained unchanged when the bill was finally enacted as Public Law 92-415 on August 29, 1972. See generally, Anthony J. Marchetta, Equitable Relief in the United States Court of Claims Under Public Law 92-415, 23 Am. U.L.Rev. 465, 472-73 (1973).

3 . The majority cites the Report of the Committee on Judicial Review of Administrative Military Personnel Actions of the Department of Defense 4-10 (Dec. 15, 1996), for the proposition that "the law in this area is marked by complex and sometimes inconsistent procedural rules." However, the report noted that "[s]ome courts have refused to permit bifurcation [of back pay and reinstatement claims].” Id. at 5. Moreover, the report also found that "[c]omplex, confusing, and at times inconsistent procedural and substantive rules among the federal district courts and the federal courts of appeals are the antithesis of an equitable and efficient system.” Id. at 9. The majority's decision today, which carves up James's complaint into certain previously-unannounced claims and then parses each of these apparent claims for jurisdictional purposes, far from helping to achieve the laudable goal of "an equitable and efficient system," will surely only add to any existing complexity, confusion, and inconsistency.