Bullock v. United States ( 2018 )

In the United States Court of Federal Claims
No. 17-445C
(Filed: January 17, 2018)
)
ELLEN P. BULLOCK, )
) Motion to Dismiss for Lack of Subject
Plaintiff, ) Matter Jurisdiction; RCFC 12(b)(1);
) Lack of authority to bind government;
v. ) Failure to establish enforceable EEO
) Settlement Agreement
THE UNITED STATES, )
)
Defendant. )
)
Jeffrey R. Eilliot, Wyomissing, PA, for plaintiff.
Steven C. Hough, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice, Washington, D.C., with whom were Chad A. Readler, Acting Assistant
Attorney General, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch,
Steven J. Gillingham, Assistant Director, Commercial Litigation Branch, for defendant.
Holly Bryant, U.S. Army Litigation Division, Fort Belvoir, VA, of counsel.
OPINION ON MOTION TO DISMISS
FIRESTONE, Senior Judge.
Pending before the court is a motion filed by the United States (“government”) to
dismiss this action filed by Ellen P. Bullock (“plaintiff”) for a breach of contract pursuant
to Rule 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal Claims
(“RCFC”) for lack of subject matter jurisdiction or in the alternative for failure to state a
claim. Ms. Bullock, an employee of the Department of Defense, U.S. Army Aviation and
Missile Command (“Army”), alleges that the government is in breach of a settlement
agreement she entered into in connection with a Title VII Civil Rights claim. Ms.
Bullock’s Title VII Civil Rights claim was filed before the Equal Employment
Opportunity Commission (“EEOC”). During the Equal Employment Opportunity
(“EEO”) proceedings, Ms. Bullock alleges she entered into an oral settlement agreement
with the Army that the government has failed to honor in full. Specifically, Ms. Bullock
claims she has not been paid the $70,000.00 she contends the government agreed to pay
in back pay, compensatory damages, and attorney’s fees.
In its motion to dismiss, the government argues that Ms. Bullock’s claim must be
dismissed for lack of subject matter jurisdiction. The government argues that the Army
did not enter into a binding agreement to pay $70,000.00 to Ms. Bullock on the grounds
that Claudia Lynch, the Army attorney who represented the Army in the EEO
negotiations, did not have either the express or implied actual authority to bind the Army.
Specifically, the government argues that under Army Regulations 690—600 ¶ 1—13(d)
and ¶ 5—13(g) 1, only the activity commander or his designee may bind the Army. Here,
because Ms. Lynch was not the activity commander or his designee, she could not bind
the Army. The government also argues that the agreement is not binding on the grounds
1
Army Reg. 690—600 ¶ 1—13(d) states the agency representative will “[d]raft and/or
review proposed negotiated settlement agreements and Offers of Resolution.”
Army Reg. 690—600 ¶ 5—13(g) states that the settlement agreement “will be signed by
the complainant and the attorney, if complainant is represented by an attorney, and the activity
commander, or designee.”
In addition to Army Reg. 690—600 ¶ 5—13(g), the court understands from reviewing the
Army Regulations that per Army Reg. 690—600 ¶ 7—11(c) the power to agree to compensatory
damages rests solely with the activity commander.
2
that the Army’s alleged offer was never reduced to writing in contravention of EEOC
regulation, 29 C.F.R. § 1614.603, which states that “[a]ny settlement reached shall be in
writing and signed by both parties and shall identify the claims resolved.” The
government argues for these same reasons that Ms. Bullock has failed to state a claim for
relief.
For the reasons set forth below, the court finds that Ms. Lynch did not have the
authority to bind the government and for this reason the government’s motion to dismiss
for lack of subject matter jurisdiction is GRANTED.
I. Background Facts 2
Ms. Bullock filed her EEO action on August 12, 2013. Pl.’s Compl. ¶ 12. Her EEO
complaint was assigned for mediation before Administrative Law Judge (“ALJ”) Anita
Richardson on June 11, 2015. Id. ¶ 18. The Army was represented by Claudia Lynch, an
attorney for the Army. Id. ¶ 11.
Ms. Bullock alleges that on July 29, 2015, her attorney, Jeffrey Elliot, and Ms. Lynch
reached an agreement as to changes in her working conditions. Id. ¶ 23. Ms. Bullock
further alleges that on that same day, Ms. Lynch presented an offer to pay $50,000.00 to
resolve Ms. Bullock’s demand for over $150,000.00 in back pay, compensatory damages,
and attorney’s fees. Id. ¶ 26.
2
The following jurisdictional facts are taken from the complaint and the declaration of Ms.
Lynch attached to the government’s reply to its motion to dismiss.
3
After further negotiations, Ms. Bullock alleges that after receiving the Army’s
settlement proposal she agreed to lower her demand to $70,000.00. According to an
August 27, 2015 email from ALJ Richardson to Ms. Bullock’s attorney, ALJ Richardson
represented that the “[Army] will agree to pay $70,000.00” and that the payment would
settle the dispute. Id. at ¶¶ 33-35, Ex. I. No final written agreement was ever executed
despite repeated requests from ALJ Richardson for Ms. Lynch to memorialize the
settlement agreement in writing. Id. ¶ 37, Ex. J.
On September 21, 2015, ALJ Richardson sent an email to Ms. Bullock and Ms. Lynch
stating that she had “just learned from Ms. Lynch that the [Army] had rescinded its
settlement offer from August 27th” and that she was notifying the EEOC “that the parties
have reached an impasse.” Compl. ¶ 38, Ex. K.3
II. Positions of the Parties
On July 31, 2017, the government filed the pending motion to dismiss. As noted
above, the government argues that because Ms. Lynch did not have the authority to bind
the Army and because the settlement agreement was not finalized in writing there is no
final settlement agreement between the Army and Ms. Bullock. The government argues
that Ms. Lynch, although authorized to negotiate on behalf of the Army before the
EEOC, did not have the express or implied actual authority to bind the Army to any
3
Ms. Bullock’s EEO complaint is currently before an EEOC administrative law judge, who
stayed the EEOC proceedings on April 19, 2017 pending the resolution of Ms. Bullock’s claim
currently before this court. Def.’s Mot. to Dismiss (Def.’s Mot) at 3, Ex. 5.
4
settlement agreement. Def.’s Reply at 5. The government argues per Army Reg. 690—
600, that only the activity commander or his designee had the authority to bind the Army
to the terms of a settlement and to pay compensatory damages.4 The government, relying
on Ms. Lynch’s sworn declaration, argues that she was not the activity commander or his
designee and thus could not bind the Army. Ms. Lynch states in her sworn declaration
that she “served as the agency representative in Ms. Bullock’s EEOC proceedings . . .
[and] [a]t no time was [she] empowered to enter into a settlement agreement on behalf of
the Army.” Lynch Dec. at ¶ 4. As the Army representative, Ms. Lynch explains that she
only “represents the Army’s interests, as well as advises and assists the management
official in proceedings before the EEOC.” Id. The government also argues that the
settlement agreement is not enforceable because it was not finalized in writing in
accordance with EEOC regulation, 29 C.F.R. § 1614.603.
In response to the government’s motion to dismiss, Ms. Bullock asserts that the Army
should be bound by Ms. Lynch’s representations on the grounds that under “[f]ederal
common law[,]” attorneys are presumed to have the authority to settle on behalf of their
clients. Pl.’s Sur-Reply at 3-4 (citing In re Artha Management Inc., 91 F.3d 326 (2d Cir.
1996); Thomas v. Colorado Trust Deed Funds, Inc., 366 F.2d 136, 139 (10th Cir. 1966);
Garebedian v. Allstates Engineering Co. et al., 811 F.2d 802, 803 (3d. Cir. 1987) (other
citations omitted). Ms. Bullock does not address the Army regulations cited by the
4
Army Reg. 600—690 defines activity commander as an “army commander who has
delegated appointing authority for the civilian work force and has a civilian personnel official, a
labor counselor, and an EEO officer available for advice.”
5
government. With regard to the EEOC regulation, 29 C.F.R. § 1614.603, Ms. Bullock
asserts that courts have upheld oral settlement agreements resolving Title VII Civil
Rights claims. Pl.’s Resp. in Opp’n to Def.’s Mot at 10-11 (citing Greene v. Rumsfeld,
266 F. Supp. 2d 125, 136 (D.D.C. 2003) (holding that an oral agreement reached between
the parties resolving an Title VII Civil Rights complaint, which both parties represented
as an agreement to the presiding Magistrate Judge, was an enforceable agreement.)).
III. Standard of Review on Motion to Dismiss for Lack of Subject Matter
Jurisdiction
Ordinarily, where a plaintiff alleges a breach of contract “[a] well pleaded
allegation of a breach of either an express or implied-in-fact contract is sufficient to
overcome challenges to jurisdiction. Bank of Guam v. United States 578 F.3d 1318, 1325
(Fed. Cir. 2009) (citing Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed.
Cir. 1997)). However, if the government challenges jurisdiction, “‘only uncontroverted
factual allegations are accepted as true.’” Hymas v. United States, 810 F.3d 1312, 1317
(Fed. Cir. 2016) (citation omitted). In order to proceed, the party invoking this court’s
jurisdiction must establish jurisdiction by a preponderance of the evidence. Fid. & Gaur.
Ins. Underwriters, Inc. v. United States, 805 F.3d 1082, 1087 (Fed. Cir. 2015) (citing
Brandt v. United States, 710 F.3d 1369, 1373 (Fed Cir. 2013); Reynolds v. Army & Air
Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988)).
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IV. Ms. Bullock Has Not Established Jurisdiction Over A Contract Claim
The Court of Federal Claims has jurisdiction over a claim founded upon an
express or implied-in-fact contract with the United States pursuant to the Tucker Act. 28
U.S.C. § 1491(a)(1). To hear a breach of contract claims against the government, the
plaintiff must allege all of the elements of a contract. See Trauma Serv. Grp., 104 F.3d at
1325. The elements for an express or an implied-in-fact contract with the government are
the same: “(1) mutuality of intent to contract; (2) lack of ambiguity in offer and
acceptance; (3) consideration; and (4) a government representative having actual
authority to bind the United States in contract.” Anderson v. United States, 344 F.3d
1343, 1353 (Fed. Cir. 2003) (citation omitted) (footnote omitted).
The threshold issue in this case is whether Ms. Lynch had the authority to bind the
Army before the EEOC. A government official “‘possesses express actual authority to
bind the [United States] in contract, only when the Constitution, a statute, or regulation
grants [that power] to that agent in unambiguous terms.’” Jumah v. United States, 90
Fed. Cl. 603, 612 (2009), aff'd 385 Fed. App’x 987 (Fed. Cir. 2010)(citation omitted). If
the government representative does not have actual authority to bind the United States in
contract, the representative may only bind the government if the representative has
implied actual authority. H. Landau & Co. v. United States, 886 F.2d 322, 324 (Fed. Cir.
1989). “Authority to bind the government may be implied when it is an integral part of
the duties assigned to the particular government employee.” Winter v. Cath-Dr/Balti
Joint Venture, 497 F.3d 1339, 1346 (Fed. Cir. 2007) (citing H. Landau & Co., 866 F.2d
7
at 324 quoting J. Cibinic & R. Nash, Formation of Government Contracts 43 (1982)).
Importantly, “anyone entering into an arrangement with the Government takes the risk of
having accurately ascertained that he who purports to act for the Government stays within
the bounds of his authority.” Federal Crop Ins. Corp v. Merrill, 332 U.S. 380, 384
(1947).
The court agrees with the government that Ms. Bullock’s claim must be dismissed
for lack of subject matter jurisdiction because Ms. Lynch lacked the express or implied
actual authority to bind the Army before the EEOC and thus there is no settlement
agreement to enforce. Def.’s Resp. at 5. Under Army Reg. 600—690 ¶5—13(g), only
the activity commander, or his designee, has the authority to bind the Army to EEO
settlement agreements. It is clear from Ms. Lynch’s uncontested declaration that she was
not given settlement authority from the activity commander. Thus she did not have
express settlement authority under the subject regulations. In addition, the court finds
that Ms. Lynch did not have implied actual authority. In her declaration, Ms. Lynch
states that she “served as the agency representative in Ms. Bullock’s EEOC proceeding”
and not as a person with binding settlement authority. Lynch Dec. ¶ 4. As she explains
in her declaration, as the agency representative she “represents the Army’s interests, as
well as advises and assists the management official in proceedings before the EEOC.” Id.
at ¶ 2. Ms. Lynch concludes that “[a]t no time was I empowered to enter into an
agreement on behalf of the Army.” Id. ¶ 4. In view of Ms. Lynch’s declaration it is clear
that settlement authority was not “integral” to Ms. Lynch’s duties.
8
Having concluded that Ms. Lynch did not have express or implied actual authority
to bind the Army before the EEOC, Ms. Bullock’s federal common law argument must
also fail. In Winter, the Federal Circuit held that a government employee, other than the
contracting officer, cannot bind the government, where a regulation expressly states that
only the contracting officer can bind the government. The Circuit stated, that a person
other than the contracting officer, “could not have had the implicit authority to authorize
contract modifications because the contract language and government regulation it
incorporates by reference explicitly state that only the contracting officer had the
authority to modify the contract.” Winter, 497 F.3d at 1346. The same reasoning applies
in this case. Where a regulation expressly provides which government official has the
authority to bind the government, a government attorney, like Ms. Lynch, does not have
“federal common law” authority to bind the government.
Because Ms. Lynch did not have the authority to enter into a binding EEO
settlement agreement with Ms. Bullock, there never was a binding contract between the
Army and Ms. Bullock to pay $70,000.00 and thus Ms. Bullock’s case must be
dismissed.5
5
Having concluded that there was no binding settlement agreement between Ms. Bullock and the
Army, it is not necessary to address the government’s argument that the case must be dismissed
because the alleged agreement was not in writing. Also, because the court does not have
jurisdiction over the case, the court will not address the government’s alternative request for
dismissal under RCFC 12(b)(6) for failure to state a claim upon which relief can be granted.
9
CONCLUSION
For these reasons, the government’s motion to dismiss Ms. Bullock’s complaint
for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1) is GRANTED. The
Clerk is directed to enter judgment accordingly. No costs.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
10