Kenneth Earman v. United States , 2013 U.S. Claims LEXIS 1910 ( 2013 )


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  •            In the United States Court of Federal Claims
    No. 10-617 C
    (Filed December 12, 2013)
    *********************
    KENNETH EARMAN,          *
    *                  Contract; Reformation and
    Plaintiff, *                  Breach; Conservation Security
    *                  Program, 
    16 U.S.C. §§ 3838
    -
    v.              *                  3838c (2012); Incorporation of a
    *                  Statute and Regulations into a
    THE UNITED STATES,       *                  Contract.
    *
    Defendant. *
    *********************
    Alan I. Saltman, Washington, DC, for plaintiff. Richard W. Goeken,
    Washington, DC, and Charles W. Surasky, Atlanta, GA, of counsel.
    Sharon A. Snyder, United States Department of Justice, with whom were
    Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson,
    Director, Bryant G. Snee, Deputy Director, Washington, DC, for defendant.
    Joshua Schnell, Office of General Counsel, United States Department of
    Agriculture, Washington, DC, of counsel.
    _________________________
    OPINION
    _________________________
    BUSH, Senior Judge.
    Now pending before the court are defendant’s motion to dismiss pursuant to
    Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (RCFC),
    and the parties’ cross-motions for summary judgment pursuant to RCFC 56. These
    motions have been fully briefed. Oral argument was held on October 31, 2013.
    For the reasons described below, the court grants defendant’s motion to dismiss
    and motion for summary judgment, and denies plaintiff’s cross-motion for
    summary judgment.
    BACKGROUND 1
    The Conservation Security Program (the CSP or the Program) is a federal
    conservation program administered by the Natural Resources Conservation Service
    (the Service or the agency) within the United States Department of Agriculture (the
    USDA). Under the CSP, potential participants develop and submit for approval
    plans to adopt specified conservation practices on their agricultural property.
    Upon the government’s approval of such a plan, the participant then enters into a
    written contract with the government to implement the approved conservation
    practices in exchange for technical and financial assistance.
    Kenneth Earman, the plaintiff in this case, is the holder of a CSP contract
    seeking damages under the Tucker Act, 
    28 U.S.C. § 1491
    (a)(1) (2006), for
    increased payments pursuant to his CSP contract. Mr. Earman alleges that the
    government has breached his contract – as well as the contracts of a putative class
    of similarly situated CSP participants – by calculating CSP payments in a manner
    inconsistent with the CSP statute and the Service’s implementing regulations. Mr.
    Earman also argues that he and others similarly situated are entitled to reformation
    of their contracts to excise certain provisions on the ground of mutual mistake.
    Further, plaintiff asserts that he and others similarly situated possess a contractual
    right of renewal which was breached when Congress enacted legislation in 2008
    that prohibited the renewal of CSP contracts after September 30, 2008. Finally,
    Mr. Earman alleges that the government’s alleged repudiation of his and similarly
    situated CSP participants’ contractual right of renewal constitutes an
    uncompensated taking in violation of the Fifth Amendment to the United States
    Constitution.
    I.     Factual Background
    A.     The 2002 Farm Bill and the Conservation Security Program
    1
    / The facts recounted in this opinion are taken from the Fourth Amended Complaint and
    the parties’ submissions in connection with the motions currently pending before the court.
    Except where otherwise noted, the facts recounted in this opinion are undisputed.
    2
    In May 2002, Congress enacted the Farm Security and Rural Investment Act
    of 2002 (the 2002 Farm Bill), Pub. L. No. 107-171, 
    116 Stat. 134
    , which is now
    codified as amended at sections 3838 through 3838c in Title 16 of the United
    States Code (the CSP statute). Fourth Am. Compl. ¶ 7. The 2002 Farm Bill
    amended several portions of the Food Security Act of 1985 (the 1985 Farm Bill),
    Pub. L. No. 99-198, 
    99 Stat. 1354
     (codified as amended at 
    16 U.S.C. §§ 3801-3862
    (2012)), and created a voluntary conservation program known as the Conservation
    Security Program. Fourth Am. Compl. ¶ 8. As originally enacted, the legislation
    required the Service to establish and implement the CSP in each of fiscal years
    (FY) 2003 through 2007. 2002 Farm Bill, sec. 2001, § 1238A, 116 Stat. at 225.
    Congress later extended authorization for the CSP through FY 2011. See Deficit
    Reduction Act of 2005, Pub. L. No. 109-171, tit. I, sec. 1202(a), § 1238A(a), 
    120 Stat. 4
    , 5 (2006); Fourth Am. Compl. ¶ 10.
    The CSP statute explains that the purpose of the program is “to assist
    producers of agricultural operations in promoting, as is applicable with respect to
    land to be enrolled in the program, conservation and improvement of the quality of
    soil, water, air, energy, plant and animal life, and any other conservation purposes,
    as determined by the Secretary.” 16 U.S.C. § 3838a(a); see Pl.’s Resp. to Def.’s
    Revised Proposed Findings of Uncontroverted Facts (Pl.’s Resp. to DPFUF) ¶ 8.
    The CSP statute defines “producer” as “an owner, operator, landlord, tenant, or
    sharecropper” who “shares the risk of producing any crop or livestock” and “is
    entitled to share in the crop or livestock available for marketing from a farm (or
    would have shared had the crop or livestock been produced).” 
    16 U.S.C. § 3838
    (9)(A). The statute defines “the Secretary” as “the Secretary of Agriculture,
    acting through the Chief of the Natural Resources Conservation Service.” 
    Id.
     §
    3838(12).
    In order to become eligible for participation in the CSP, an agricultural
    producer must:
    (A) develop and submit to the Secretary, and obtain the
    approval of the Secretary of, a conservation security plan
    that meets the requirements of subsection (c)(1) of this
    section; and
    (B) enter into a conservation security contract with the
    3
    Secretary to carry out the conservation security plan.
    Id. § 3838a(b)(1).
    Under the CSP statute, potential participants in the program must first
    develop a conservation security plan to be approved by the Service. The statute
    provides that all such plans must identify the land and resources to be protected,
    must describe the specific conservation practices to be implemented, must set forth
    a schedule for the implementation and maintenance of those practices during the
    term of the conservation security contract, and must indicate the tier of the
    conservation security contract under which the plan will be implemented. Id. §
    3838a(c)(1).
    Once the Service has approved a producer’s conservation security plan, it
    enters into a conservation security contract with that producer to enroll the land
    covered by the plan in the CSP. Id. § 3838a(e)(1). The CSP statute directs the
    agency to offer eligible producers three tiers of conservation security contracts –
    Tier I, Tier II, and Tier III – pursuant to which CSP payments may be made to such
    producers. Id. § 3838a(d)(1)(A), (d)(5). Although the CSP statute sets forth
    general requirements for the three contract tiers, the statute provides that the
    specific minimum requirements for each contract tier are to be “determined and
    approved by the Secretary.” Id. § 3838a(d)(6).
    The CSP statute provides for two forms of assistance to eligible producers
    who adopt specified conservation practices on eligible land. First, the statute
    provides that “[f]or each of fiscal years 2003 through 2007, the Secretary shall
    provide technical assistance to producers for the development and implementation
    of conservation security contracts, in an amount not to exceed 15 percent of
    amounts expended for the fiscal year.” Id. § 3838c(g). Technical assistance refers
    to conservation planning, design, and implementation assistance that the Service
    provides to producers, including assisting producers to enroll in the CSP. Pl.’s
    Proposed Findings of Uncontroverted Fact (PPFUF) ¶ 4; see also 
    7 C.F.R. §§ 1466.3
     (defining technical assistance as “technical expertise, information, and tools
    necessary for the conservation of natural resources on land active in agricultural,
    forestry, or related uses” and stating that the term includes, inter alia, (1)
    “[t]echnical services provided directly to farmers, . . . such as conservation
    planning, technical consultation, and assistance with design and implementation of
    4
    conservation practices,” and (2) “[t]echnical infrastructure, including activities,
    processes, tools, and agency functions needed to support delivery of technical
    services”), 1469.9(b) (“Technical assistance may include, but is not limited to:
    Assisting applicants during sign-up, processing and assessing applications,
    assisting the participant in developing the conservation stewardship plan;
    conservation practice survey, layout, design, installation, and certification;
    information, education, and training for producers; and quality assurance
    activities.”).
    Second, the statute authorizes the government to make an annual payment to
    each eligible producer who has entered into a conservation security contract with
    the agency. Annual payments under such contracts comprise as many as three
    separate components: (1) a specified percentage of a base payment for the type of
    land covered by the contract (which the court refers to as an adjusted base
    payment);2 (2) a cost-sharing payment; and (3) an enhanced payment. 16 U.S.C. §
    3838c(b)(1).
    Under the CSP statute, the base payment is equal to the 2001 average
    national per-acre rental rate for the particular type of land use covered by the
    contract. Id. § 3838c(b)(1)(A)(i); Fourth Am. Compl. ¶ 15. In the alternative, the
    statute provides that the Service may instead adopt as the base payment “another
    appropriate rate for the 2001 crop year that ensures regional equity.” 16 U.S.C. §
    3838c(b)(1)(A)(ii); see also Fourth Am. Compl. ¶ 15. Once the Service has
    determined the base payment for the enrolled property, the adjusted base payment
    is calculated according to the appropriate contract tier for that property. For Tier I,
    Tier II, and Tier III contracts, the adjusted base payment is equal to five percent,
    ten percent, and fifteen percent of the base payment, respectively. 16 U.S.C. §
    3838c(b)(1)(C)(i), (b)(1)(D)(i), (b)(1)(E)(i); Fourth Am. Compl. ¶ 15.
    2
    / Although the CSP statute uses the term “base payment,” the Service substituted the
    term “stewardship payment” for “base payment” in the implementing regulations. Interim Final
    Rule, 
    69 Fed. Reg. 34502
    , 34509, 34514 (June 21, 2004). The regulations define “stewardship
    payment” as “the CSP base payment component of the payment as described in [7 C.F.R.] §
    1469.23(a).” 
    7 C.F.R. § 1469.3
    . For the sake of consistency with the language of the CSP
    statute and the court’s prior opinion in Meyers v. United States, 
    96 Fed. Cl. 34
     (2010), this
    opinion refers to stewardship payments as base payments.
    5
    The CSP statute also provides for cost-sharing payments, which reimburse
    eligible producers for the cost of adopting new conservation practices and
    maintaining existing conservation practices on their properties. In general, eligible
    producers may receive a cost-sharing payment of up to seventy-five percent of the
    2001 average county cost of approved practices implemented pursuant to a
    conservation security contract. 16 U.S.C. § 3838c(b)(1)(C)(ii), (b)(1)(D)(ii),
    (b)(1)(E)(ii). In addition, “beginning farmers or ranchers” may receive a higher
    cost-sharing payment of up to ninety percent of the 2001 average county cost of
    the conservation practices implemented under their contracts. Id.
    Finally, eligible producers may receive an enhanced payment for the
    adoption or maintenance of certain conservation practices that exceed the
    minimum requirements for the applicable tier of conservation security contract.
    See id. § 3838c(b)(1)(C)(iii), (b)(1)(D)(iii), (b)(1)(E)(iii). Enhanced payments may
    be received for addressing local conservation priorities, participating in a research
    or pilot project, and in other limited circumstances. See id. The CSP statute
    provides that enhanced payments are to be “determined by the Secretary.” Id. §
    3838c(b)(1)(C)(iii).
    The total annual payment to an eligible producer is the sum of the adjusted
    base payment, cost-sharing payment, and enhanced payment (if any) to which a
    producer is entitled under its conservation security contract. The CSP statute
    provides that the total annual payment received by a producer may not exceed
    $20,000 for a Tier I contract, $35,000 for a Tier II contract, or $45,000 for a Tier
    III contract. Id. § 3838c(b)(2)(A). In addition, the adjusted base payment
    component of the total annual payment under a conservation security contract may
    not amount to more than $5000 for a Tier I contract, $10,500 for a Tier II contract,
    or $13,500 for a Tier III contract. Id. § 3838c(b)(2)(B).
    B.     Congressional Limitations on Program Spending
    From its inception, the CSP has not been operated with annually
    appropriated funds. PPFUF ¶ 6. Rather, the 2002 Farm Bill provided that the CSP
    would be funded through borrowing authority funds drawn from the Commodity
    Credit Corporation (CCC). Pub. L. No. 107-171, tit. II, sec. 2701, § 1241, 116
    Stat. at 278; see also PPFUF ¶ 7. The CCC is a federal corporation that was
    created to stabilize, support, and protect farm prices, and provides financing for
    6
    various agricultural programs administered by the USDA. 
    15 U.S.C. § 714
     (2012);
    PPFUF ¶ 8.
    The 2002 Farm Bill initially provided an unlimited source of CCC funds for
    the CSP. Meyers v. United States, 
    96 Fed. Cl. 34
    , 39 (2010); Fourth Am. Compl. ¶
    10. Congress, however, subsequently imposed a number of annual and multi-year
    spending limitations on the Program. In February 2003, Congress enacted the
    Consolidated Appropriations Resolution of 2003, which imposed a multi-year
    limitation on CSP spending of “not more than $3,773,000,000 for the period of
    fiscal years 2003 through 2013.” Pub. L. No. 108-7, div. N, tit. II, sec. 216(c), §
    1241(a)(3), 
    117 Stat. 11
    , 546; Pl.’s Resp. to DPFUF ¶ 12. Congress subsequently
    removed this multi-year limitation in January 2004, when it enacted the
    Consolidated Appropriations Act of 2004, and instead instituted a $41,443,000
    annual spending limitation for FY 2004. Pub. L. No. 108-199, div. A, tit. VII, §
    752, 
    118 Stat. 3
    , 38 (“Not more than $41,443,000 for fiscal year 2004 of the funds
    appropriated or otherwise made available by this or any other Act shall be used to
    carry out the conservation security program . . . .”); Fourth Am. Compl. ¶ 20; Pl.’s
    Resp. to DPFUF ¶¶ 12-13. In October 2004, however, Congress enacted the
    Military Construction Appropriations and Emergency Hurricane Supplemental
    Appropriations Act of 2005, which instituted a new $6,037,000,000 multi-year
    limitation on CSP spending for the period from FY 2005 through FY 2014. Pub.
    L. No. 108-324, div. B, ch. 1, sec. 101(e), § 1241(a)(3), 
    118 Stat. 1220
    , 1235
    (2004); Fourth Am. Compl. ¶ 29; Pl.’s Resp. to DPFUF ¶ 12.
    In December 2004 and November 2005, Congress enacted appropriations
    acts for FY 2005 and FY 2006, respectively, which provided that “[n]one of the
    funds appropriated or otherwise made available by this or any other Act shall be
    used to pay the salaries and expenses of personnel to carry out a Conservation
    Security Program” in excess of $202,411,000 for FY 2005 and $259,000,000 for
    FY 2006. Consolidated Appropriations Act of 2005, Pub. L. No. 108-447, div. A,
    tit. VII, § 749, 
    118 Stat. 2809
    , 2845 (2004); Agriculture, Rural Development, Food
    and Drug Administration, and Related Agencies Appropriations Act of 2006 (2006
    Appropriations Act), Pub. L. No. 109-97, tit. VII, § 741, 
    119 Stat. 2120
    , 2155
    (2005); Fourth Am. Compl. ¶¶ 30, 38; Pl.’s Resp. to DPFUF ¶¶ 14, 16.
    In February 2006, Congress enacted the Deficit Reduction Act of 2005, by
    which it extended the Program through 2011, removed the $6,037,000,000 multi-
    7
    year limitation on CSP spending for the period of FY 2005 through FY 2014, and
    imposed new multi-year limitations of $1,954,000,000 for the period of FY 2006
    through FY 2010 and $5,650,000,000 for the period of FY 2006 through FY 2015.
    Pub. L. No. 109-171, tit. I, sec. 1202(b), § 1241(a)(3), 120 Stat. at 5-6; Fourth Am.
    Compl. ¶¶ 10, 46.
    Congress did not pass an appropriation bill for FY 2007. Fourth Am.
    Compl. ¶ 47; PPFUF ¶¶ 77-79. Instead, it passed a series of continuing
    appropriations resolutions, the culmination of which was the Revised Continuing
    Appropriations Resolution of 2007, which amended the 2006 Appropriations Act
    but continued the $259,000,000 annual limitation on CSP salaries and expenses
    that had been enacted in the 2006 Appropriations Act. Pub. L. No. 110-5, sec. 2, §
    20115, 
    121 Stat. 8
    , 16; see Fourth Am. Compl. ¶ 47; PPFUF ¶¶ 77-80. In May
    2007, however, Congress enacted the U.S. Troop Readiness, Veterans’ Care,
    Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (the
    Katrina Act), which eliminated the $259,000,000 annual limitation on CSP salaries
    and expenses which had been imposed by the 2006 Appropriations Act but left in
    place the multi-year limitations on CSP spending which had been enacted in the
    Deficit Reduction Act of 2005. Pub. L. No. 110-28, tit. IX, sec. 9010, § 20115,
    
    121 Stat. 112
    , 218; Fourth Am. Compl. ¶ 52; Pl.’s Resp. to DPFUF ¶ 20.
    C.     The 2008 Farm Bill
    In 2008, Congress passed the Food, Conservation, and Energy Act of 2008
    (the 2008 Farm Bill), which replaced the CSP with a new Conservation
    Stewardship Program to be carried out in FY 2009 through FY 2012 (codified at
    16 U.S.C. §§ 3838d-3838g), and further provided that the Service was not
    authorized to enter into or renew any CSP contracts after September 30, 2008
    (codified at 16 U.S.C. § 3838a(g)(1)). See Pub. L. No. 110-246, tit. II, subtit. D, §
    2301, 
    122 Stat. 1651
    , 1768. The 2008 Farm Bill further provided that all CSP
    contracts executed on or before September 30, 2008 – as well as those CSP
    contracts executed after that date for which an application was received by the
    Service during the 2008 sign-up period – would continue to receive payments
    under the program. See 16 U.S.C. § 3838a(g)(2); Meyers, 96 Fed. Cl. at 39. The
    2008 Farm Bill also removed the multi-year limitations on CSP spending that had
    been enacted in the Deficit Reduction Act of 2005, and instead directed the Service
    to carry out the Program “using such sums as are necessary to administer contracts
    8
    entered into before September 30, 2008.” Pub. L. No. 110-246, tit. II, subtit. D,
    sec. 2701(c), § 1241(a)(3), 122 Stat. at 1800 (codified at 
    16 U.S.C. § 3841
    (a)(3)(A)).
    D.     The Service’s Implementation of the Program
    The 2002 Farm Bill contained an express delegation of rulemaking authority
    that specifically empowered the Secretary of Agriculture, acting through the
    Service, to adopt regulations necessary to implement the CSP statute. See Pub. L.
    No. 107-171, tit. II, § 2001(b), 116 Stat. at 233 (“Not later than 270 days after the
    date of enactment of this Act, the Secretary of Agriculture shall promulgate
    regulations implementing the amendment made by subsection (a).”); Meyers, 96
    Fed. Cl. at 53; Pl.’s Resp. to DPFUF ¶ 26. Additionally, the CSP statute itself
    requires the Service to promulgate regulations to protect the interests of tenants
    and sharecroppers and to ensure a fair and reasonable application of the payment
    criteria set forth in the statute. See 16 U.S.C. § 3838c(d).
    Pursuant to this statutory grant of authority, the agency promulgated
    regulations for the CSP in June 2004. See Interim Final Rule, 
    69 Fed. Reg. 34502
    (June 21, 2004) (codified as amended at 
    7 C.F.R. §§ 1469.1-1469.36
     (2013)). The
    implementing regulations include a number of provisions that were not contained
    in the CSP statute. Most pertinent to plaintiff’s claims here, the regulations
    establish a mechanism for prioritizing applications by assigning them to enrollment
    categories and subcategories, and set forth a method for calculating base payments
    and adjusted base payments.
    First, the regulations provide that the Service will assign enrollment
    categories and subcategories to each applicant in accordance with various criteria
    specified in the sign-up notice for the applicable fiscal year. 
    7 C.F.R. § 1469.6
    (b).
    At each program sign-up, the agency “will announce the order in which categories
    and subcategories are eligible to be funded.” 
    Id.
     § 1469.6(b)(4). Enrollment
    categories are “funded in the order designated in the sign-up notice until the
    available funding is exhausted.” Id. § 1469.6(d)(1).
    Second, with respect to base payments, the regulations provide that the
    agency “will initially calculate the average 2001 [national per-acre rental] rates
    using the Agriculture Foreign Investment Disclosure Act (AFIDA) Land Value
    9
    Survey, the National Agriculture Statistics Service (NASS) land rental data, and
    Conservation Reserve Program (CRP) rental rates.” 
    7 C.F.R. § 1469.23
    (a)(2)(i).
    Additionally, “[w]here typical rental rates for a given land use vary widely within a
    State or between adjacent States, NRCS will adjust the county-level rates to ensure
    local and regional consistency and equity.” 
    Id.
     § 1469.23(a)(2)(ii); see also
    PPFUF ¶ 28. The regulations further provide that adjusted base payments are to be
    calculated by multiplying the base payment by a tier-specific reduction factor of
    twenty-five percent for Tier I contracts, fifty percent for Tier II contracts, and
    seventy-five percent for Tier III contracts, and then by the tier-specific percentage
    set forth in the CSP statute (five percent for Tier I contracts, ten percent for Tier II
    contracts, and fifteen percent for Tier III contracts). 
    7 C.F.R. § 1469.23
    (a)(2)(iv),
    (a)(3); Fourth Am. Compl. ¶¶ 25-26, 85; PPFUF ¶ 31; Pl.’s Resp. to DPFUF ¶ 43.
    Finally, the regulations provide that “[i]n the event that annual funding is
    insufficient to fund existing contract commitments, the existing contracts will be
    pro-rated in that contract year.” 
    7 C.F.R. § 1469.23
    (h).
    Between FY 2004 and FY 2008, the Service administered the CSP in
    accordance with the regulations. In each published sign-up notice to prospective
    CSP participants, the agency announced that it intended to sort responsive
    applications (i.e., those which met minimum requirements of the Program) into
    enrollment categories and subcategories which would be funded in the order
    specified in the sign-up notice until all available funds were exhausted. 
    69 Fed. Reg. 34533
    , 34533 (June 21, 2004); 
    70 Fed. Reg. 15277
    , 15278 (Mar. 25, 2005);
    
    71 Fed. Reg. 6250
    , 6250 (Feb. 7, 2006); 
    73 Fed. Reg. 16246
    , 16246 (Mar. 27,
    2008). Each sign-up notice further stated that payments would be prorated if a
    category or subcategory could not be fully funded. 69 Fed. Reg. at 34535; 70 Fed.
    Reg. at 15280; 71 Fed. Reg. at 6250; 73 Fed. Reg. at 16246, 16249. Additionally,
    each sign-up notice indicated that adjusted base payments – i.e., stewardship
    payments – would be calculated by applying the tier-specific percentage set forth
    in the CSP statute as well as the additional tier-specific reduction factor specified
    in the implementing regulations. See 69 Fed. Reg. at 34534-35; 70 Fed. Reg. at
    15279; 71 Fed. Reg. at 6252; 73 Fed. Reg. at 16248-49; Pl.’s Resp. to DPFUF ¶
    56.3 Consistent with its sign-up notices, from FY 2004 through FY 2008, the
    3
    / Each sign-up notice also stated that cost-sharing payments for existing practices would
    be calculated as a flat rate of twenty-five percent of the adjusted base payment. 69 Fed. Reg. at
    (continued . . .)
    10
    Service calculated base payments and adjusted base payments pursuant to the
    methodology set forth in 
    7 C.F.R. § 1469.23
    . PPFUF ¶¶ 33, 66, 76, 89, 127.
    In FY 2005, the Service spent a total of $194,592,715 on the Program, of
    which between $25,000,000 and $30,000,000 was spent on technical assistance
    and the remainder was spent on financial assistance. See PPFUF ¶ 64; Pl.’s Resp.
    to DPFUF ¶ 15. In FY 2006, the Service spent approximately $250,000,000 on the
    Program, of which between $34,000,000 and $39,000,000 was spent on technical
    assistance and the remainder was spent on financial assistance. In FY 2007, the
    Service spent between $288,000,000 and $297,000,000 on the Program, of which
    between $22,500,000 and $26,500,000 was spent on technical assistance and the
    remainder was spent on financial assistance. Although the parties dispute the
    precise amounts expended on technical and financial assistance in FY 2005
    through FY 2007, the aforementioned ranges are undisputed and in any event, the
    variances between Mr. Earman’s and defendant’s estimation of the technical and
    financial assistance provided to CSP participants in FY 2005 through FY 2007 are
    immaterial to the court’s resolution of this case.
    E.      Plaintiff’s Contract
    In response to defendant’s sign-up notice for FY 2005, Mr. Earman filed an
    application to enroll in the CSP and, on September 21, 2005, entered into a ten-
    year Tier II CSP contract with the CCC pursuant to which he agreed to utilize
    certain specified conservation practices in the operation of his farm. 4 Fourth Am.
    Compl. ¶ 64; PPFUF ¶¶ 44, 49. On January 16, 2007, Mr. Earman’s contract was
    modified to a Tier III contract because plaintiff had satisfied the additional
    eligibility requirements for Tier III contracts. PPFUF ¶ 49. Plaintiff’s contract, as
    modified, consists of four components: (1) a Conservation Program
    Application/Contract; (2) a Contract Appendix; (3) a Conservation Plan Schedule
    34534-35; 70 Fed. Reg. at 15279; 71 Fed. Reg. at 6252; 73 Fed. Reg. at 16248-49; PPFUF ¶¶ 26,
    42, 72, 121; Pl.’s Resp. to DPFUF ¶ 34.
    4
    / Mr. Earman’s contract, like all CSP contracts, is administered by the Service on behalf
    of the CCC. PPFUF ¶¶ 16, 53; Declaration of Michael Hubbs (Hubbs Decl.) Ex. 1 at A00016
    (“NRCS is administering this Contract on behalf of the CCC. Therefore, where this Contract
    refers to ‘CCC,’ NRCS may act on its behalf for the purposes of administering this Contract.”).
    11
    of Operations (the Schedule of Operations); and (4) a revised Conservation Plan
    Schedule of Operations reflecting plaintiff’s contract modification (the revised
    Schedule of Operations). Pl.’s Resp. to DPFUF ¶ 67; Hubbs Decl. Exs. 1-3
    (Earman Contract).
    Mr. Earman’s contract, as modified, provides for an expiration date of
    September 30, 2014. Pl.’s Resp. to DPFUF ¶ 2; Hubbs Decl. Ex. 3 at A00046.
    Although the contract provides for termination in certain circumstances, see Hubbs
    Decl. Ex. 1 at A00015 (Contract Appendix ¶¶ 10, 12), plaintiff’s contract has not
    been terminated and remains in effect.
    Regarding payments under plaintiff’s contract, paragraph 5A of the Contract
    Appendix provides, in pertinent part:
    Subject to the availability of funds, CCC will make
    stewardship, existing practice, new practice or
    enhancement payments at the rates specified in this
    Contract after a determination by CCC that an eligible
    practice or activity has been established in compliance
    with the conservation stewardship plan of operations and
    in accordance with appropriate standards and
    specifications.
    Hubbs Decl. Ex. 1 at A00012; see also Fourth Am. Compl. ¶ 67. Paragraph 5F of
    the Contract Appendix further provides:
    Payment under this Contract is subject to the availability
    of funds. In the event that annual funding is insufficient
    to fund existing contract requirements, payment on the
    existing contracts will be prorated in that contract year,
    as determined by the Chief.
    Hubbs Decl. Ex. 1 at A00013.
    The Schedule of Operations set forth eight specific conservation activities
    that plaintiff was contractually obligated to perform in 2005, as well as the
    payment amounts corresponding to each item. PPFUF ¶ 59 (citing Hubbs Decl.
    Ex. 1 at A00021-23, A00037). The payment amounts corresponding to these eight
    12
    conservation activities totaled $5091. Id. ¶¶ 59, 61. The Schedule of Operations
    also includes Item No. 88, entitled “[r]eduction due to insufficient annual funding,”
    by which plaintiff’s annual payments have been reduced by $2648. Fourth Am.
    Compl. ¶ 68; PPFUF ¶ 62; Hubbs Decl. Ex. 2 at A00042. 5 As a result of this
    reduction, Mr. Earman received a total payment of $2443 in FY 2005. See Fourth
    Am. Compl. ¶ 65; PPFUF ¶ 62; Hubbs Decl. Ex. 2 at A00044. This payment, as
    well as each subsequent payment made to Mr. Earman under his contract, was
    calculated in accordance with the methodology set forth in the regulations at 
    7 C.F.R. §1469.23
    . See Fourth Am. Compl. ¶¶ 85-89; Pl.’s Mot. at 26 (“Utilizing
    these rates set forth in the regulations, the agency established base payments (and
    consequently calculated adjusted base payments) that were far lower than would
    have been the case had the 2001 national average rental rates been used.” (citing
    PPFUF ¶ 116)), 27 n.34 (noting that 
    7 C.F.R. § 1469.23
     “sets out the further
    mechanism by which adjusted base payments (‘called the stewardship component
    of a participant’s CSP payment’) are computed under the regulations” (citing 
    7 C.F.R. § 1469.23
    (a)(2)(ii)-(v), (a)(3))); 29 n.36 (noting that the regulations “form
    the basis for the improper amounts . . . paid to plaintiff (and each member of the
    yet-to-be certified class)”).
    II.     Procedural History
    A.      Initial Proceedings
    On September 14, 2010, pseudonymous plaintiff John Doe filed his initial
    complaint in this case. In that complaint, Mr. Doe, a CSP contractor, sought to
    recover damages for the government’s alleged failure to make sufficient payments
    to him under his contract. On the same day he filed his complaint, Mr. Doe filed a
    motion to proceed under a pseudonym.
    On September 30, 2010, Mr. Doe filed a motion for class certification, in
    which he requested that the court designate him as the representative of a class of
    similarly situated plaintiffs and appoint his counsel as the attorney of record for the
    5
    / Plaintiff’s revised Schedule of Operations, which reflects plaintiff’s 2007 contract
    modification, also includes a similar “[r]eduction due to insufficient annual funding” proviso.
    Hubbs Decl. Ex. 3 at A00078.
    13
    proposed class. Mr. Doe also filed, by right, his First Amended Complaint for the
    purpose of accommodating potential class members in his proposed class action.
    On November 15, 2010, the government filed an unopposed motion to stay
    the proceedings in this case pending the court’s ruling on the government’s motion
    to dismiss the complaint in the related case of Meyers v. United States, No. 09-538.
    Because the legal and factual issues in this case were closely related to those
    involved in Meyers, the court granted the motion to stay this case on November 17,
    2010.
    On December 23, 2010, the court dismissed the three-count complaint in
    Meyers in its entirety. In reaching that decision, the court held that “the CSP –
    understood as encompassing the CSP statute and its implementing regulations –
    fails to meet any of the three prongs under Samish II [Samish Indian Nation v.
    United States, 
    419 F.3d 1355
     (Fed. Cir. 2005)] and is therefore not a money-
    mandating source of law in this court.” 96 Fed. Cl. at 60. The court also held that
    the government’s denial of benefits under the CSP did not effect a taking of private
    property requiring compensation under the Fifth Amendment because the plaintiffs
    did not possess any compensable property rights in monetary benefits under the
    CSP. Id. at 62-64.
    The plaintiffs in Meyers appealed this court’s decision to the United States
    Court of Appeals for the Federal Circuit on February 18, 2011, but they
    subsequently moved to voluntarily dismiss their appeal. The Federal Circuit
    granted that motion and dismissed the appeal on May 9, 2011.
    On June 21, 2011, following the dismissal of the appeal in Meyers, this court
    lifted the stay of proceedings in this case. In response to a request from the parties,
    the court ordered Mr. Doe to file another amended complaint on or before June 29,
    2011. The court also ordered defendant to respond to Mr. Doe’s motion to proceed
    under a pseudonym. Finally, the court directed the Clerk’s Office to continue the
    stay of proceedings for the pending motion for class certification. 6
    6
    / Pursuant to the court’s order of June 21, 2011, the motion for class certification
    remains suspended.
    14
    Mr. Doe filed his Second Amended Complaint on June 29, 2011, and the
    government moved to dismiss that complaint pursuant to RCFC 12(b)(1) and
    RCFC 12(b)(6) on August 29, 2011.
    B.        Proceedings Involving Mr. Earman
    Mr. Doe did not respond to the government’s motion to dismiss; instead,
    with the consent of the government, he filed a five-count Third Amended
    Complaint on September 30, 2011. The Third Amended Complaint included a
    new named plaintiff, Kenneth Earman, in addition to Mr. Doe. The complaint also
    set forth the RCFC 23 class action requirements that had been omitted from the
    earlier versions of the complaint. The court denied the government’s pending
    motion to dismiss as moot on October 3, 2011. On December 2, 2011, defendant
    filed a motion for summary judgment or, in the alternative, to dismiss the Third
    Amended Complaint.
    On July 30, 2012, the court granted the government’s motion to dismiss
    under RCFC 12(b)(1) with respect to Count I of the Third Amended Complaint,
    but denied the government’s motion with respect to all remaining counts. In
    reaching that decision, the court held that Mr. Doe and Mr. Earman had failed to
    exhaust their administrative remedies as required by law. In a separate order
    issued the same day, the court denied Mr. Doe’s motion to proceed under a
    pseudonym and also ordered Mr. Doe to either reveal his true identity or withdraw
    from the case. On August 8, 2012, Mr. Doe voluntarily withdrew from this suit,
    leaving Mr. Earman as the sole plaintiff in this case. 7
    With permission of the court, Mr. Earman filed a Fourth Amended
    Complaint on November 19, 2012. The Fourth Amended Complaint contains five
    counts. In the first count, Mr. Earman seeks reformation of his contract to excise
    the “[r]eduction due to insufficient annual funding” proviso in Item 88 of the
    Schedule of Operations. Plaintiff contends that Item 88 is contrary to law and
    based on the mistaken belief that sufficient funding was not available to make
    “full” adjusted base payments to CSP participants, i.e., adjusted base payments
    calculated without using an additional reduction factor. Mr. Earman also seeks
    7
    / The court will henceforth refer to Mr. Earman as “plaintiff” or by name.
    15
    reformation on behalf of a putative class of similarly situated CSP participants to
    excise similar provisos in their CSP contracts.
    In the second count, plaintiff alleges that the government breached his and
    similarly situated CSP participants’ contracts in FY 2005 and each year thereafter
    by paying lower base payments than the CSP statute required. In the third count,
    presented as an alternative to Count II, plaintiff alleges that the government has
    breached his and similarly situated CSP participants’ contracts since at least May
    2007 by continuing to pay lower base payments even after Congress had removed
    annual limitations on CSP spending. Mr. Earman further alleges that these alleged
    underpayments have resulted in a reduced existing practice cost-sharing payment.
    In Counts II and III, Mr. Earman seeks damages for amounts he and similarly
    situated CSP participants have allegedly been underpaid.
    In the fourth count, Mr. Earman asserts that he and others similarly situated
    possess a contractual right of renewal and that the government breached this right
    by enacting the 2008 Farm Bill, which prohibited the renewal of any CSP contracts
    after September 30, 2008. In the fifth count, plaintiff alleges, in the alternative to
    Count IV, that the abrogation of his and similarly situated CSP participants’
    alleged right of renewal effected an uncompensated taking in violation of the Fifth
    Amendment to the United States Constitution.
    C.     The Pending Motions
    On February 1, 2013, the government filed a motion to dismiss Counts II
    and III of the Fourth Amended Complaint under RCFC 12(b)(6), as well as a
    motion for summary judgment on Counts I, IV, and V under RCFC 56. On March
    20, 2013, plaintiff filed a response to the government’s motions as well as a cross-
    motion for summary judgment on all counts. The government filed its reply and
    response on June 28, 2013, and plaintiff filed his reply on August 1, 2013.
    Defendant moves to dismiss Counts II and III for failure to state a claim on
    the ground that plaintiff fails to allege any provision of his contract entitling him to
    the additional payments he seeks. Defendant further contends that to the extent
    plaintiff is challenging the agency’s payment methodology without reference to
    specific contractual terms and conditions, the court lacks jurisdiction over Counts
    II and III because, as the court held in Meyers, the CSP is not a money-mandating
    16
    source of law sufficient to confer jurisdiction under the Tucker Act. Additionally,
    defendant argues that the Service’s methodology for calculating payments to CSP
    participants, as set forth in the agency’s regulations, is entitled to deference under
    Chevron, U.S.A., Inc. v. Natural Resource Defense Council, Inc., 
    467 U.S. 837
    (1984).
    In response to the government’s arguments for dismissal of Count II,
    plaintiff contends that deference is inappropriate because the Service’s
    methodology for calculating base payments and adjusted base payments is contrary
    to the CSP statute and its legislative history. With respect to Count III, plaintiff
    argues that the Service violated its own implementing regulations by continuing to
    calculate adjusted base payments using an additional reduction factor after
    Congress had removed annual limitations on CSP spending. Plaintiff contends that
    these alleged violations constitute a breach of his contract because the CSP statute
    and regulations are incorporated into his contract. Furthermore, as an additional
    argument in support of Count II, plaintiff argues that he is entitled to reformation
    of his contract because it is contrary to the CSP statute.
    In reply, defendant argues that the Service’s methodology is consistent with,
    and gives effect to, the plain meaning of the CSP statute and regulations.
    Additionally, defendant contends that, even if the CSP statute and regulations were
    ambiguous, the agency’s methodology reflects a reasonable and permissible
    construction of the statute and regulations.
    Defendant also moves for summary judgment on Counts I, IV, and V.
    Regarding Count I, defendant argues that plaintiff cannot establish that he is
    entitled to contract reformation based on an assertion of mutual mistake. With
    respect to Counts IV and V, defendant asserts that plaintiff’s contract does not
    provide a right of renewal and, thus, plaintiff is unable to demonstrate a specific
    contractual provision that has been breached and has no cognizable property
    interest that could be the subject of a valid takings claim under the Fifth
    Amendment. In response, plaintiff argues that his contract provides a right of
    renewal because it incorporates the CSP statute, including 16 U.S.C. §
    3838a(e)(4)(A), which plaintiff asserts required all CSP contracts to be renewable
    at the option of the contractor.
    17
    Finally, with respect to Count V, defendant contends that plaintiff’s alleged
    right of renewal is not the proper subject of a takings claim because it arises
    exclusively under plaintiff’s contract. In response, plaintiff argues that his takings
    claim is an alternative to his breach of contract claim in Count IV, and asks the
    court to stay the filing of plaintiff’s reply as to Count V, as well as the court’s
    disposition of count V, pending the court’s resolution of Count IV. 8
    DISCUSSION
    I.     Standards of Review
    A.      RCFC 12(b)(6)
    It is well-settled that a complaint should be dismissed under RCFC 12(b)(6)
    “when the facts asserted by the claimant do not entitle him to a legal remedy.”
    Lindsay v. United States, 
    295 F.3d 1252
    , 1257 (Fed. Cir. 2002). When considering
    a motion to dismiss under this rule, “the allegations of the complaint should be
    construed favorably to the pleader.” Scheuer v. Rhodes, 
    416 U.S. 232
    , 236 (1974),
    abrogated on other grounds by Harlow v. Fitzgerald, 
    457 U.S. 800
     (1982).
    “[W]hen the allegations in a complaint, however true, could not raise a claim of
    entitlement to relief,” dismissal is warranted under RCFC 12(b)(6). Bell Atlantic
    Corp. v. Twombly, 
    550 U.S. 544
    , 558 (2007). To survive a motion to dismiss for
    failure to state a claim, a complaint must contain “more than labels and
    conclusions, and a formulaic recitation of the elements of a cause of action will not
    do.” 
    Id. at 555
    . While a complaint is not required to contain detailed factual
    allegations, it must provide “enough facts to state a claim for relief that is plausible
    on its face.” 
    Id. at 570
    . In order to meet the requirement of facial plausibility, the
    plaintiff must plead “factual content that allows the court to draw the reasonable
    inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
    Iqbal, 
    556 U.S. 662
    , 678 (2009).
    B.      RCFC 56
    8
    / No such request for a stay was included in plaintiff’s opening brief. Indeed, in that
    brief, plaintiff requested summary judgment on Count V. Pl.’s Mot. at 3, 65-67.
    18
    The availability of summary judgment helps a federal court “‘to secure the
    just, speedy, and inexpensive determination of every action.’” Celotex Corp. v.
    Catrett, 
    477 U.S. 317
    , 327 (1986) (quoting Fed. R. Civ. P. 1). Summary judgment
    is appropriate where there is no genuine dispute as to any material fact and the
    moving party is entitled to judgment as a matter of law. RCFC 56(a); Anderson v.
    Liberty Lobby, Inc., 
    477 U.S. 242
    , 247 (1986). A fact is material if it would affect
    the outcome of the suit. Anderson, 
    477 U.S. at 248
    . A dispute of material fact is
    genuine if a reasonable trier of fact could return a verdict for the nonmoving party.
    See id.; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 
    475 U.S. 574
    , 587
    (1986) (citation omitted) (stating that there is no genuine issue “[w]here the record
    taken as a whole could not lead a rational trier of fact to find for the non-moving
    party”).
    The moving party bears the burden of showing the absence of any genuine
    issue of material fact. Dairyland Power Coop. v. United States, 
    16 F.3d 1197
    ,
    1202 (Fed. Cir. 1994) (citing Celotex, 
    477 U.S. at 325
    ). All doubt over factual
    issues must be resolved in favor of the party opposing summary judgment. Mingus
    Constructors, Inc. v. United States, 
    812 F.2d 1387
    , 1390 (Fed. Cir. 1987).
    However, the nonmoving party has the burden of producing sufficient evidence to
    show a genuine dispute of material fact which would allow a reasonable finder of
    fact to rule in its favor. Anderson, 
    477 U.S. at 256
    . Such evidence need not be
    admissible at trial; nevertheless, mere denials, conclusory statements or evidence
    that is merely colorable or not significantly probative are not sufficient to preclude
    summary judgment. Celotex, 
    477 U.S. at 324
    ; Anderson, 
    477 U.S. at 249-50, 256
    ;
    Mingus, 
    812 F.2d at 1390-91
    ; see also Barmag Barmer Maschinenfabrik AG v.
    Murata Mach., Ltd., 
    731 F.2d 831
    , 835-36 (Fed. Cir. 1984) (“With respect to
    whether there is a genuine issue, the court may not simply accept a party’s
    statement that a fact is challenged.”) (citation omitted). “The party opposing the
    motion must point to an evidentiary conflict created on the record by at least a
    counter statement of a fact or facts set forth in detail in an affidavit by a
    knowledgeable affiant.” Barmag, 
    731 F.2d at 836
    . Summary judgment must be
    granted against a party who fails to make a showing sufficient to establish the
    existence of an essential element to that party’s case and on which that party bears
    the burden of proof at trial. Dairyland, 
    16 F.3d at
    1202 (citing Celotex, 
    477 U.S. at 323
    ).
    19
    Cross-motions for summary judgment “are not an admission that no material
    facts remain at issue.” Massey v. Del Labs., Inc., 
    118 F.3d 1568
    , 1573 (Fed. Cir.
    1997) (citing United States v. Fred A. Arnold, Inc., 
    573 F.2d 605
    , 606 (9th Cir.
    1978)). The parties may focus on different legal principles and allege as
    undisputed a different set of facts. 
    Id.
     “Each party carries the burden on its own
    motion to show entitlement to judgment as a matter of law after demonstrating the
    absence of any genuine disputes over material facts.” 
    Id.
    II.    Analysis
    A.     Contract Reformation Claim (Count I)
    In Count I, Mr. Earman seeks reformation of his contract to excise the
    “[r]eduction due to insufficient annual funding” proviso in Item 88 of the Schedule
    of Operations by which plaintiff’s annual payment under his contract was reduced
    by $2648 in FY 2005 and each fiscal year thereafter. See Fourth Am. Compl. ¶¶
    34-36, 64-82; PPFUF ¶¶ 62-63. Plaintiff argues that Item 88 must be excised from
    his contract because it was based on the Service’s “mistaken belief that in fiscal
    years (‘FY’) 2005 and 2006 insufficient funds were available to pay all CSP
    contractors in full for work required to be performed under their contracts.” Pl.’s
    Mot. at 4; see also Fourth Am. Compl. ¶¶ 64-82.
    Mr. Earman’s argument in that regard rests on two factual premises. First,
    plaintiff contends that the inclusion of Item 88 in his contract was based on the
    Service’s belief that insufficient funds were available to the Service to make
    financial assistance payments “in full” to CSP participants, i.e., payments
    calculated without using an additional reduction factor. In support of this premise,
    plaintiff refers to the Service’s discussion of its interim final regulations, in which
    the agency stated that it would (1) make payments to CSP participants according to
    enrollment categories and subcategories until CSP funding is exhausted and (2)
    reduce adjusted base payments by applying an additional reduction factor in those
    years in which the CSP is “only partially funded”:
    The CSP statutory provisions were written without a
    specific mechanism for limiting payments if the program
    were only partially funded. With a cap of $41.443
    million for FY 2004, this interim final rule adopts
    20
    provisions of the proposed rule setting forth a mechanism
    for limiting payments for those years when the CSP is
    only partially funded. In this regard, the interim final
    rule includes provisions to:
    • Limit the sign-up periods.
    • Limit participation to priority watersheds.
    • Limit participation to certain enrollment
    categories.
    • Reduce stewardship (base) payments by applying a
    reduction factor.
    • Limit the number and type of existing and new
    practice payments.
    ....
    Once the highest enrollment category’s applications are
    funded within all priority watersheds, the next category
    would be funded, etc. If all the applications in a category
    cannot be funded, then NRCS will fund subcategories in
    the same manner. Subcategories will be announced in
    each sign-up. Funding will be distributed to each
    succeeding category to fund subcategories until funding
    is exhausted.
    69 Fed. Reg. at 34503, 34506; see Pl.’s Mot. at 8; PPFUF ¶¶ 30, 37. Plaintiff also
    refers to the Service’s 2005 and 2006 sign-up notices, which stated that enrollment
    categories would be funded in order until available funding was exhausted, and
    that “[i]f funds are not available to fund an entire category, then the applications
    will fall into subcategories and funded in order until funds are exhausted.” 70 Fed.
    Reg. at 15278; 71 Fed. Reg. at 6250; see Def.’s Mot. at 9-10; PPFUF ¶¶ 43, 71.
    These authorities, plaintiff contends, “demonstrate[] . . . [that] to the extent
    that funds were available, the agency’s intention was to enter into CSP contracts
    pursuant to which it would pay the contractor at the full rates specified therein for
    the work required of him under the contract.” Pl.’s Mot. at 9 (citing PPFUF ¶ 38).
    Based on this alleged intention of the Service to make “full” payment so long as
    21
    sufficient funds were “available” to the agency, plaintiff argues that Item 88 “states
    that his payments for 2005 were being reduced because funds were not available to
    make full payment.” Pl.’s Reply at 2.
    As to plaintiff’s second factual premise in support of his reformation claim,
    plaintiff asserts that because the Service did not spend the full amount of its annual
    or multi-year spending limits for the CSP in FY 2005 or FY 2006, and because the
    Service spent more on technical assistance in those years than the total amount of
    alleged financial assistance underpayment to plaintiff and similarly situated CSP
    participants, sufficient funds were in fact “available” to make “full” payments to
    the contractors:
    [T]here never was any such insufficient funding for CSP
    contracts in FY 2005 (or in FY 2006). Accordingly, even
    if potential CSP participants knew that funding could be
    pro-rated if sufficient funds were not available, that
    knowledge was of no moment where, as here, albeit not
    realized by either party, sufficient funds were, in fact,
    always available to make full payments to all contractors.
    Pl.’s Mot. at 10. In this regard, plaintiff first notes that the Service spent only
    $194,592,715 on the Program in FY 2005 – “$7,818,285 less than the
    [$202,411,000] which Congress allowed it to spend.” Id. at 15. According to
    plaintiff, “[b]ecause there is no evidence that these funds were expended
    elsewhere, all $7,818,285 was available (and in fact more than sufficient) to have
    fully paid plaintiff and those similarly situated the $6,207,298 that they were
    denied in FY 2005 because of an alleged insufficiency of funds to do so.” Id.
    (citing PPFUF ¶ 64).9 Plaintiff also asserts that, of the $194,592,715 spent on the
    CSP in FY 2005, more than $25,000,000 was spent on technical assistance – which
    9
    / Plaintiff makes a similar argument with respect to FY 2006, noting that the Service
    spent only approximately $250,000,000 on the Program in FY 2006 – which plaintiff contends is
    “$8.7 million less than what Congress allowed NRCS to spend.” Pl.’s Mot. at 15 n.24 (citing
    PPFUF ¶ 67). Plaintiff also asserts that “[t]his $8.7 million represents 70% of the amount
    ($12,506,369) that CSP contractors were denied due to an alleged insufficiency of funds in FY
    2006.” Id.
    22
    plaintiff contends is “an amount considerably in excess of the $6,207,298 by which
    Earman and others similarly situated were underpaid in FY 2005.” Id. at 12. 10
    From these two factual premises, plaintiff draws the conclusion that
    “plaintiff’s contract (like that of each person similarly situated) was expressly
    based on the erroneous belief that such funds were not available. . . . [and] [t]his
    mistake as to the amount of funds actually available constituted the basic
    assumption underlying the inclusion in the contract of a Reduction Due to
    Insufficient Funding provision and the 50% reduction in the amount that Mr.
    Earman was paid for his services in 2005.” Pl.’s Mot. at 13-14 (footnotes omitted).
    Accordingly, plaintiff argues, “under the rules governing reformation of
    government contracts, Mr. Earman and all others similarly situated are entitled to
    reformation excising the ‘reduction due to insufficient funding’ provision from
    their contracts and payment for the amounts denied them as a result of the
    inclusion of that provision.” Id. at 14 (citations omitted).
    As defendant correctly notes, reformation of a written agreement on the
    ground of mutual mistake is an “extraordinary remedy” and is available only upon
    satisfactory proof of four elements: (1) the parties to the contract were mistaken in
    their belief regarding a fact; (2) that mistaken belief constituted a basic assumption
    underlying the contract; (3) the mistake had a material effect on the bargain; and
    (4) the contract did not put the risk of the mistake on the party seeking reformation.
    Nat’l Australia Bank v. United States, 
    452 F.3d 1321
    , 1329 (Fed. Cir. 2006); see
    Def.’s Reply at 1-2. “The general rule is that the elements of a claim for
    reformation must be proved by clear and convincing evidence.” Nat’l Australia
    Bank, 
    452 F.3d at
    1329 (citing Philippine Sugar Estates Dev. Co. v. Gov’t of
    Philippine Islands, 
    247 U.S. 385
    , 391 (1918) (stating that reformation will not be
    granted “unless the proof of mutual mistake be of the clearest and most satisfactory
    character”) (citations and internal quotation marks omitted), 27 Williston on
    Contracts § 70.54 (4th ed.), and Restatement (Second) of Contracts § 155 cmt. c, at
    410 (1981)).
    10
    / Again, plaintiff makes a similar argument with respect to FY 2006, noting that of the
    approximately $250,000,000 spent on the CSP in FY 2006, at least $34,000,000 was spent on
    technical assistance – which plaintiff contends is “an amount considerably in excess of the
    amount ($12,506,369) that CSP contractors were underpaid due to an alleged insufficiency of
    funds in FY 2006.” Pl.’s Mot. at 12 n.19.
    23
    The purpose of reformation of a written agreement on the ground of mutual
    mistake is “‘to make [the written agreement] reflect the true agreement of the
    parties on which there was a meeting of the minds.’” Atlas Corp. v. United States,
    
    895 F.2d 745
    , 750 (Fed. Cir. 1990) (quoting Am. President Lines v. United States,
    
    821 F.2d 1571
    , 1582 (Fed. Cir. 1987)); see also Philippine Sugar Estates, 
    247 U.S. at 389
     (noting that “[i]t is well settled that courts of equity will reform a written
    contract where, owing to mutual mistake, the language used therein did not fully or
    accurately express the agreement and intention of the parties”); Nat’l Australia
    Bank, 
    452 F.3d at 1329
     (“[R]eformation is available ‘when the parties, having
    reached an agreement and having attempted to reduce it to writing, fail to express it
    correctly in the writing.’” (quoting Indiana Ins. Co. v. Pana Cmty. Unit Sch. Dist.
    No. 8, 
    314 F.3d 895
    , 903-04 (7th Cir. 2003), and Restatement (Second) of
    Contracts, supra, § 155 cmt. a, at 406)).
    Defendant argues that plaintiff cannot establish the first element of his
    reformation claim because he “cannot demonstrate that the parties were mistaken
    in their belief that limited CSP funding was available at the time of contracting.”
    Def.’s Reply at 3. Defendant asserts that it is undisputed that Congress had
    imposed annual limitations on CSP spending in 2005 and 2006, and, therefore, the
    parties could not have been mistaken in their belief that only limited funding was
    available for the CSP at the time that plaintiff’s contract was executed. Id.
    Additionally, defendant argues that the Service’s failure to exhaust the annual CSP
    spending limitations in FY 2005 and FY 2006 demonstrates, at most, its imprecise
    prediction regarding the “future costs of providing technical and financial
    assistance for the CSP,” not a mistake relating to facts in existence at the time
    plaintiff’s contract was entered. Id. at 5-6.
    In response, plaintiff asserts that his reformation claim is not based on a
    mutual mistake regarding whether there was limited funding for the CSP. Rather,
    plaintiff contends that the mistake allegedly made by the parties was their
    supposedly erroneous belief that insufficient CSP funds were “legally available”
    for the agency to make “full” payments to CSP participants, i.e., without applying
    an additional reduction factor, even taking into account annual spending
    limitations:
    24
    Contrary to defendant’s contention, the mistake here is
    not whether there was limited funding for [the] CSP in
    2005 and 2006, but whether sufficient funds were legally
    available to pay plaintiff and 4,875 other CSP contractors
    for work required by contract. That is, there is no dispute
    that in 2005 and 2006, Congress had imposed limits on
    the ability of the Commodity Credit Corporation
    (“CCC”) to spend money that it possessed on the CSP
    program. However, taking those spending limits into
    account, here the parties mistakenly believed that
    sufficient money was not available at the time of
    contracting for the CCC to pay Earman in full for the
    work to be performed under the contract in 2005.
    Pl.’s Reply at 2 (citations omitted).
    As noted, supra, summary judgment must be granted against a party who
    fails to make a showing sufficient to establish the existence of an essential element
    to that party’s case and on which that party bears the burden of proof at trial.
    Dairyland, 
    16 F.3d at
    1202 (citing Celotex, 
    477 U.S. at 323
    ). Having considered
    all of the parties’ arguments regarding Count I, the court agrees with defendant that
    plaintiff has not produced sufficient evidence to show that a mutual mistake of fact
    occurred in this instance.
    The first and most fundamental flaw with plaintiff’s arguments with respect
    to Count I is the failure to cite any evidence of Mr. Earman’s belief as to the
    unavailability of CSP funds to fully compensate him for his conservation activities.
    Here, neither of plaintiff’s briefs cites any record evidence as to Mr. Earman’s
    beliefs, mistaken or otherwise, as to the availability or unavailability of CSP funds
    to fully compensate him for his conservation activities. Aside from a bare,
    unsupported allegation that a mutual mistake occurred so as to warrant reformation
    of Mr. Earman’s contract, plaintiff’s theory of mutual mistake relies entirely on
    supposition regarding the Service’s alleged mistake of fact regarding the
    unavailability of CSP funds. This is not enough to support a claim of mutual
    mistake, or to survive defendant’s motion for summary judgment as to Count I.
    25
    Second, the mistake plaintiff alleges does not relate to a fact in existence at
    the time plaintiff’s contract was executed. To satisfy the first element of a claim
    for reformation, a plaintiff must demonstrate that the parties held an “erroneous
    belief as to an existing fact.” Atlas Corp., 
    895 F.2d at 750
     (emphasis added). “If
    the existence of a fact is not known to the contracting parties, they cannot have a
    belief concerning that fact; therefore, there can be no ‘mistake.’” 
    Id.
     The
    “availability” of CSP funds in FY 2005 and FY 2006, as plaintiff uses that term, is
    necessarily dependent upon the amount of technical assistance and financial
    assistance ultimately spent by the Service in FY 2005 and FY 2006. Plaintiff
    entered his contract on September 21, 2005, before the end of FY 2005. PPFUF ¶¶
    44, 49. At that time, the Service’s total CSP spending for FY 2005 (let alone for
    FY 2006) was not an “existing fact” but rather a future event which the parties
    could only predict. “‘A party’s prediction or judgment as to events to occur in the
    future, even if erroneous, is not a mistake as that word is defined [under the
    doctrine of mutual mistake of fact].’” Dairyland, 
    16 F.3d at 1203
     (quoting
    Restatement (Second) of Contracts, supra, § 151 cmt. a, at 383); see also Northrop
    Grumman Corp. v. United States, 
    47 Fed. Cl. 20
    , 53-54 (2000) (citing Dairyland,
    
    16 F.3d at 1203
    ). Plaintiff cannot sustain a claim for reformation on the ground of
    mutual mistake with regard to the “availability” of CSP funds in FY 2005 and FY
    2006 when such “availability” could not be determined until after the time of
    contracting.
    Third, plaintiff’s additional argument for reformation, based on the United
    States Supreme Court’s decision in Cherokee Nation of Oklahoma v. Leavitt, 
    543 U.S. 631
     (2005), is similarly without merit. Plaintiff relies on Cherokee for the
    proposition that the amount the Service chose to spend on technical assistance in
    FY 2005 and FY 2006 has no effect on the “legal availability” of sufficient funds
    to make “full” financial assistance payments in those years because the Service
    could have reduced spending on technical assistance and, correspondingly,
    increased spending on financial assistance. In Cherokee, two Indian tribes sued the
    government for breach of contract for failure to make contractually required
    payment of “contract support costs” incurred by the tribes in supplying health
    services normally provided by the Department of Health and Human Services’
    Indian Health Service. 
    543 U.S. at 635-37
    . The government did not deny that it
    promised, but failed, to pay these costs; rather, it argued it was excused from
    having to make these payments because Congress had not appropriated sufficient
    funds for the payments. 
    Id. at 636
    . The Supreme Court ruled in favor of the
    26
    Indian tribes, finding that the government could not avoid its contractual
    obligations on the ground of insufficient appropriations. 
    Id. at 636-47
    .
    Plaintiff erroneously argues that the facts in Cherokee are “quite analogous”
    to the instant case, see Def.’s Reply at 16, and that “[t]he holding in Cherokee has
    direct applicability” to plaintiff’s reformation claim, see id. at 18. As defendant
    correctly notes, Cherokee did not involve a contract reformation claim. See 
    543 U.S. at 631
    ; Def.’s Reply at 6 n.7. Indeed, plaintiff has not cited, and the court has
    not found, any decision of any court citing Cherokee in support of a contract
    reformation claim. Moreover, the contract at issue in Cherokee clearly required
    the government to make the payments demanded; indeed, the government in that
    case conceded it had promised to make such payments but argued that it was
    excused from its contractual obligation because of insufficient appropriations. See
    
    543 U.S. at 636
    . Here, by contrast, plaintiff was paid the full amount he was
    entitled to receive under the terms of his written contract. See Fourth Am. Compl.
    ¶ 65; PPFUF ¶ 62; Hubbs Decl. Ex. 2 at A00044 (Schedule of Operations stating
    that plaintiff’s total payment in FY 2005 would be $2443, i.e., $5091 minus the
    $2648 reduction set forth in Item 88). Thus, plaintiff’s reliance on Cherokee is
    misplaced.
    Finally, in his reply brief, Mr. Earman argues for the first time that
    reformation of his contract is necessary to prevent the government from being
    unjustly enriched by withholding payment for the “full value” of plaintiff’s
    conservation activities in FY 2005 and FY 2006. Pl.’s Reply at 6 (citing United
    Elec. Corp. v. United States, 
    647 F.2d 1082
    , 1087 (Ct. Cl. 1981) (United Electric),
    and Land Grantors in Henderson, Union, & Webster Cntys. v. United States, 
    81 Fed. Cl. 580
    , 609-11 (2008) (Land Grantors)). Because plaintiff raises this
    argument in his reply brief and defendant did not have an opportunity to respond,
    the argument is not properly before the court and the court need not consider it.
    See, e.g., Extreme Coatings, Inc. v. United States, 
    109 Fed. Cl. 450
    , 452 n.1 (2013)
    (stating that an argument raised for the first time in a reply brief is not properly
    before the court) (citations omitted). Moreover, even if plaintiff’s argument were
    properly before the court, it is not persuasive because neither case cited by plaintiff
    involved a contract reformation claim. United Electric involved a subcontractor’s
    breach of contract claim against the government for compensation due under a
    subcontract where both the prime contractor and surety had failed or refused to
    make payment and where the government retained funds owing on the contract.
    27
    The Court of Claims held that the subcontractor lacked standing to sue but noted,
    in dictum, that its holding “is not a happy result if [the subcontractor] ends up
    without payment to which it is entitled and for which contract money is available
    from the Government.” United Electric, 647 F.2d at 1087. Nothing in United
    Electric mandates reformation of a contract on the ground of unjust enrichment.
    Land Grantors involved a restitution claim based on alleged misrepresentations by
    one party to a contract and, accordingly, is completely inapposite to plaintiff’s
    reformation claim based on mutual mistake. 81 Fed. Cl. at 609 (noting that
    “misrepresentations made by Government agents in negotiating the 1942-44
    contracts were a factor in Claimants’ decision to sell [land containing coal, gas, oil,
    and mineral deposits], without further inquiry,” and that “mistake on one side and
    misrepresentation, whether willful or accidental, on the other, constitute a ground
    for reformation where the party misled has relied [on] the misrepresentation of the
    party seeking to bind him”) (citations omitted).
    In summary, plaintiff has not identified sufficient evidence to raise a genuine
    issue of material fact as to the existence of a mutual mistake. Therefore, defendant
    is entitled to summary judgment on plaintiff’s contract reformation claim in Count
    I.
    B.     Breach of Contract Claim Based On Alleged Underpayment of
    Base Payments (Counts II and III)
    As noted previously, Mr. Earman alleges in Counts II and III that the
    government has breached his contract – as well as the contracts of a putative class
    of similarly situated CSP participants – by paying lower base payments than were
    required by his contract. Defendant moves to dismiss Counts II and III for failure
    to state a claim because plaintiff “fails to point to any provision of his contract that
    requires the specific payments he seeks” and even fails to attach a copy of his
    contract to the Fourth Amended Complaint. Def.’s Mot. at 9-11.
    In order to recover for a breach of contract, plaintiff must allege: (1) a valid
    contract between the parties; (2) an obligation or duty arising out of the contract;
    (3) a breach of that duty; and (4) damages caused by the breach. San Carlos
    Irrigation & Drainage Dist. v. United States, 
    877 F.2d 957
    , 959 (Fed. Cir. 1989).
    As stated previously by this court, “‘there is a minimum burden for [a] [p]laintiff,
    in asserting a breach of contract claim, to explicitly identify the provisions and
    28
    terms of the contract that have been breached.’” Gonzalez-McCaulley Inv. Grp.,
    Inc. v. United States, 
    93 Fed. Cl. 710
    , 715 (2010) (quoting Garreaux v. United
    States, 
    77 Fed. Cl. 726
    , 730 (2007)). This requirement is embodied in RCFC 9(k),
    which imposes a special pleading requirement for claims against the United States
    based on a contract:
    In pleading a claim founded on a contract or treaty, a
    party must identify the substantive provisions of the
    contract or treaty on which the party relies. In lieu of a
    description, the party may annex to the complaint a copy
    of the contract or treaty, indicating the relevant
    provisions.
    The rationale for this burden is that “[i]n order for the court to render a decision on
    a breach of contract claim, it must know the relevant terms of the contract.”
    Gonzalez-McCaulley, 93 Fed. Cl. at 715.
    Mr. Earman does not allege that the government has breached any provision
    within the four corners of his or similarly situated CSP participants’ written
    contracts. Indeed, there is no dispute that Mr. Earman and similarly situated CSP
    participants have received payments in accordance with the express terms of their
    contracts. Rather, Mr. Earman alleges that the government has calculated base
    payments and adjusted base payments in a manner inconsistent with the CSP
    statute and the Service’s implementing regulations. Mr. Earman contends that
    these alleged statutory and regulatory violations constitute a breach of his and
    similarly situated CSP participants’ contracts because the CSP statute and
    regulations are incorporated into all CSP contracts, either expressly or by operation
    of law. Therefore, to resolve the parties’ motions with respect to Counts II and III,
    the court must determine whether the disputed provisions of the CSP statute and
    regulations are indeed incorporated into plaintiff’s contract.
    1.     Is the CSP Statute Incorporated into Mr. Earman’s
    Contract? (Count II)
    In Count II, Mr. Earman alleges that the Service’s methodology for
    calculating base payments and adjusted base payments results in a breach of
    plaintiff’s and similarly situated CSP participants’ contracts because the
    methodology is contrary to the CSP statute. See Fourth Am. Compl. ¶¶ 83-92. In
    29
    this regard, plaintiff first contends that the base payment component of his total
    annual payment, which is calculated using the methodology set forth in the
    Service’s implementing regulations, 
    7 C.F.R. § 1469.23
    (a)(2), is lower than the
    2001 average national per-acre rental rate set forth in the CSP statute, see 16
    U.S.C. § 3838c(b)(1)(A)(i), and, thus, is contrary to congressional intent as
    expressed in the CSP statute and its legislative history, see Pl.’s Mot. at 25-29;
    Pl.’s Reply at 7-13.11 Next, plaintiff argues that the agency’s use of an additional
    tier-specific reduction factor to calculate adjusted base payments is contrary to the
    plain language of the CSP statute, specifically 16 U.S.C. § 3838c(b)(1), which
    plaintiff contends contains “mandatory language . . . [which] prevented the agency
    from directly (or indirectly) adopting percentage reduction factors greater (or less)
    than the ones stated in the statute.” Pl.’s Mot. at 30; see also Pl.’s Reply at 13-14.
    Plaintiff argues that the government’s alleged violations of the CSP statute
    constitute a breach of his contract for two reasons. First, relying primarily upon
    the Federal Circuit’s decision in Roedler v. United States Department of Energy,
    
    255 F.3d 1347
     (Fed. Cir. 2001), and this court’s decision in Dalles Irrigation
    District v. United States, 
    82 Fed. Cl. 346
     (2008), plaintiff asserts that where, as
    here, a government contract implements a statute, the contract must be “construed
    in a manner consistent with the intent of the statute which the contract
    implements,” Pl.’s Mot. at 23-24, and is breached to the extent it contradicts
    congressional intent as set forth in the underlying statute, see 
    id. at 28-29
    . Second,
    Mr. Earman argues that the CSP statute is incorporated into his contract via the
    Service’s implementing regulations, specifically 
    7 C.F.R. § 1469.21
    (e)(3). See 
    id.
    at 23 & n.30. This regulation provides that a CSP contract must “[i]ncorporate all
    provisions as required by law or statute,” including provisions requiring CSP
    participants to
    11
    / In his opening brief, Mr. Earman’s argument with respect to base payments (as
    opposed to adjusted base payments) is based solely on the legislative history of the CSP statute.
    See Pl.’s Mot. at 25-29. In his reply brief, plaintiff contends for the first time that the Service’s
    methodology for calculating base payments is also contrary to the plain language of the CSP
    statute. See Pl.’s Reply at 7-11. Plaintiff’s base payments argument premised upon the plain
    language of the CSP statute is not properly before the court because it was presented for the first
    time in plaintiff’s reply brief. See, e.g., Extreme Coatings, 109 Fed. Cl. at 452 n.1.
    30
    (i) Implement and maintain the practices as identified and
    scheduled in the conservation stewardship plan, including
    those needed to be eligible for the specified tier of
    participation and comply with any additional sign-up
    requirements,
    (ii) Not conduct any practices on the farm or ranch that
    tend to defeat the purposes of the contract,
    (iii) Comply with the terms of the contract, or documents
    incorporated by reference into the contract. NRCS will
    give the participant a reasonable time, as determined by
    the State Conservationist, to correct any violation and
    comply with the terms of the contract and attachments
    thereto. If a violation continues, the State
    Conservationist may terminate the conservation
    stewardship contract, and
    (iv) Supply records and information as required by CCC
    to determine compliance with the contract and
    requirements of CSP[.]
    
    7 C.F.R. § 1469.21
    (e)(3). Neither argument is persuasive.
    At the outset, the court observes that plaintiff’s reliance upon Roedler and
    Dalles is unavailing. The plaintiffs in Roedler, a putative class of rate-paying
    customers for electric power produced from nuclear fuel by Northern States Power
    Company (Northern), sued the government for amounts paid by Northern into the
    Nuclear Waste Fund in accordance with the Nuclear Waste Policy Act of 1982, 
    42 U.S.C. §§ 10101-10270
     (2006) (the NWPA), and contracts entered between
    Northern and the Department of Energy (the DOE) pursuant to the NWPA.
    Dismissing the complaint, the district court held, inter alia, that the plaintiffs were
    not third-party beneficiaries of the contracts between the DOE and Northern. On
    appeal, the Federal Circuit considered the issue of whether the contracts between
    the DOE and Northern evinced a mutual intention to afford third-party beneficiary
    status to Northern’s customers. In addressing that issue, the Federal Circuit stated
    that “[f]or determination of contractual and beneficial intent when, as here, the
    contract implements a statutory enactment, it is appropriate to inquire into the
    governing statute and its purpose.” Roedler, 
    255 F.3d at
    1352 (citing Rendleman v.
    Bowen, 
    860 F.2d 1537
    , 1541-42 (9th Cir. 1988), Am. Hosp. Ass’n v. Schweiker,
    31
    
    721 F.2d 170
    , 183 (7th Cir. 1983), and Busby School of N. Cheyenne Tribe v.
    United States, 
    8 Cl. Ct. 596
    , 602 (1985)). The court then considered the NWPA
    and its legislative history to determine whether the plaintiffs’ status as customers
    and users of nuclear-generated power afforded them third-party beneficiary rights
    under Northern’s contracts with the DOE, and answered that question in the
    negative. See 
    id. at 1352-53
    . This court, in Dalles, cited Roedler for the broad
    proposition that “[w]here a contract implements or fulfills a statutory requirement,
    the interpretation of the contract will be guided by the underlying statute,” and
    interpreted a contract for the provision of hydroelectric power by the Department
    of the Interior to the plaintiff for irrigation pumping by considering the statute
    which authorized the contract. See 82 Fed. Cl. at 355.
    Relying upon Roedler and Dalles, Mr. Earman asserts that his contract
    “must be interpreted and applied in light of the underlying [CSP] statute,” Pl.’s
    Mot. at 31, and that “because defendant’s calculation of base payments (due to its
    use of rates lower than average national rental rates for 2001) and adjusted base
    payments . . . were contrary to the manner specified by statute, each constituted a
    separate breach of plaintiff’s CSP contract (and the contract of each and every
    other CSP participant),” id. at 32; see also id. at 29 (“[Dalles] teaches that, where
    Congress intended that adjusted base payments under a resulting contract were to
    be computed using specified factors, the agency wrongfully computed those
    payments when it used other factors.”).
    Plaintiff’s reliance upon Roedler and Dalles for the proposition that his
    contract must be read to include the underlying CSP statute is undermined by the
    Federal Circuit’s decision in St. Christopher Associates, L.P. v. United States, 
    511 F.3d 1376
     (Fed. Cir. 2008), which subsequently distinguished Roedler on its facts
    and rejected the same argument made by Mr. Earman here. In St. Christopher, a
    former owner of an apartment project sued the government for breach of contract
    based on the Department of Housing and Urban Development’s refusal to consider
    the owner’s rent increase request. In support of its contention that the contract
    required the agency to consider the rent increase request, the plaintiff asserted that
    the agreement “inherently includes an obligation to consider a rent increase request
    based on underlying statutes, regulations, and agency guidance.” St. Christopher,
    
    511 F.3d at 1381
    . In that regard, the St. Christopher plaintiff, citing Roedler,
    argued that the contract “should be construed in light of the statutory program that
    it implements and the purpose of that program.” 
    Id. at 1383
    . In addressing that
    32
    argument, the Federal Circuit first noted that “[t]his court has been reluctant to find
    that statutory or regulatory provisions are incorporated into a contract with the
    government unless the contract explicitly provides for their incorporation.” 
    Id.
     at
    1384 (citing Smithson v. United States, 
    847 F.2d 791
    , 794 (Fed. Cir. 1988)). The
    court then rejected the plaintiff’s argument for incorporation by implication, and
    stated that “there is simply no Federal Circuit precedent holding that it is proper to
    read into a contract statutes, regulations, or agency guidance when they are not
    incorporated by reference into the contract.” 
    Id.
     (footnote omitted). In reaching
    this conclusion, the court rejected the plaintiff’s reliance on Roedler, and
    concluded that “Roedler holds only that when it is unclear from the contract
    whether a third party is a beneficiary, the court may look to the governing statute
    to attempt to adduce whether the party is an intended third party beneficiary.” 
    Id.
    at 1384 n.4.
    The Federal Circuit in St. Christopher thus expressly limited Roedler to the
    unique context of determining third-party beneficiary status under a government
    contract. As such, neither Roedler nor this court’s reliance on Roedler in Dalles
    supports plaintiff’s arguments with respect to Count II. Additionally, to the extent
    that Dalles, including its characterization of the Federal Circuit’s decision in
    Roedler, may be read to support plaintiff’s breach of contract claims, Dalles is not
    binding on this court. See AINS, Inc. v. United States, 
    365 F.3d 1333
    , 1336 n.1
    (Fed. Cir. 2004) (stating that holdings of the Court of Federal Claims, “like those
    of federal district courts, are instructive but not precedential, and do not bind future
    court holdings”), abrogated on other grounds by Slattery v. United States, 
    635 F.3d 1298
     (Fed. Cir. 2011).
    The only other binding authority cited by Mr. Earman in support of his
    contention that his contract must be read to include the underlying CSP statute is
    the Federal Circuit’s decision in Nebraska Public Power District v. United States,
    
    590 F.3d 1357
     (Fed. Cir. 2010). See Pl.’s Mot. at 28-29, 31-32. That case is
    readily distinguishable. Nebraska Public Power addressed the issue of whether a
    mandamus order issued by the United States Court of Appeals for the District of
    Columbia was impliedly forbidden by the Tucker Act as invading upon the
    exclusive jurisdiction of this court for the adjudication of certain contract rights.
    See 590 F.3d at 1375-76. The Federal Circuit decided that question in the
    negative, concluding that the D.C. Circuit’s mandamus order “was issued pursuant
    to the D.C. Circuit’s authority to construe the NWPA and to direct DOE to comply
    33
    with its obligations under the statute” and “did not address any issue of contract
    breach, direct the implementation of any remedy, or construe any contract defense,
    except to the extent that the proposed interpretation of the contract would conflict
    with the statutory directive in section 302(a)(5) [to accept and dispose of nuclear
    waste by January 31, 1998].” Id. Here, by contrast, plaintiff’s breach of contract
    claims call upon this court to decide only his contractual rights. As Nebraska
    Public Power says nothing about incorporation of a statute into a contract, it
    provides no support for plaintiff’s claims.
    Accordingly, under binding precedent, this court may not read provisions of
    the CSP statute into plaintiff’s contract unless those provisions are expressly
    incorporated into his contract. See St. Christopher, 
    511 F.3d at
    1384 & n.4; Texas
    v. United States, 
    537 F.2d 466
    , 471 (Ct. Cl. 1976) (“In suing for a breach of
    contract plaintiff must rely on the express terms of the contract and cannot, as it
    has attempted to do here, import into the agreement terms outside of those
    expressly contained in the agreement.”) (citation omitted); see also Precision Pine
    & Timber, Inc. v. United States, 
    596 F.3d 817
    , 826 (Fed. Cir. 2010) (“In the
    absence of explicit contract language incorporating the [Endangered Species Act
    (ESA), 
    16 U.S.C. §§ 1531-1544
     (2012)], we decline to create a whole new set of
    obligations – compliance with the multitude of substantive and procedural
    requirements comprising the ESA – by mere implication.” (citing St. Christopher,
    
    511 F.3d at 1384
    )).
    In its reply brief, the government surprisingly concedes, without discussion,
    that it “does not dispute that the CSP statute is incorporated into Mr. Earman’s
    contract.” Def.’s Reply at 29. The government expanded upon this concession at
    oral argument by asserting that the CSP statute is incorporated into Mr. Earman’s
    contract by paragraph 13B of the Contract Appendix, which provides that the
    contract “shall be carried out in accordance with all applicable Federal statutes and
    regulations.” Tr. at 22. The government also expressed its “understanding that
    because [Mr. Earman’s] contract is a conservation security program contract[, . . .]
    it must comply with the [CSP] statute.” 
    Id.
    Incorporation by reference, however, is a question of law. Northrop
    Grumman Info. Tech., Inc. v. United States, 
    535 F.3d 1339
    , 1343 (Fed. Cir. 2008)
    (Northrop Grumman) (citing Zenon Envtl., Inc. v. U.S. Filter Corp., 
    506 F.3d 1370
    , 1378 (Fed. Cir. 2007), and Advanced Display Sys. v. Kent State Univ., 212
    
    34 F.3d 1272
    , 1283 (Fed. Cir. 2000)). Stipulations on questions of law are not
    binding on the court. Sanford’s Estate v. Comm’r, 
    308 U.S. 39
    , 51 (1939) (“We
    are not bound to accept, as controlling, stipulations as to questions of law.”)
    (citations omitted); Technicon Instruments Corp. v. Alpkem Corp., 
    866 F.2d 417
    ,
    421-22 (Fed. Cir. 1989) (“‘If the stipulation is to be treated as an agreement
    concerning the legal effect of admitted facts, it is obviously inoperative; since the
    court cannot be controlled by agreement of counsel on a subsidiary question of
    law.’” (quoting Swift & Co. v. Hocking Valley Ry. Co., 
    243 U.S. 281
    , 289 (1917))).
    Therefore, it is for the court to decide whether the CSP statute is incorporated into
    plaintiff’s contract.
    The court concludes that the CSP statute is not incorporated into plaintiff’s
    contract. For extrinsic material to be incorporated into a contract by reference, the
    contract “must explicitly, or at least precisely, identify the written material being
    incorporated and must clearly communicate that the purpose of the reference is to
    incorporate the referenced material into the contract (rather than merely to
    acknowledge that the referenced material is relevant to the contract, e.g., as
    background law or negotiating history).” Northrop Grumman, 
    535 F.3d at 1345
    ;
    cf. St. Christopher, 
    511 F.3d at 1384
     (“This court has been reluctant to find that
    statutory or regulatory provisions are incorporated into a contract with the
    government unless the contract explicitly provides for their incorporation.” (citing
    Smithson, 
    847 F.2d at 794
    )). Nothing in plaintiff’s contract explicitly provides for
    the incorporation of the CSP statute. Rather, plaintiff’s contract merely provides
    that it “‘shall be carried out in accordance with all applicable Federal statutes and
    regulations.’” PPFUF ¶ 52 (quoting Hubbs Decl. Ex. 1 at A00016 (Contract
    Appendix ¶ 13B)). This language, which does not refer to any particular statutory
    or regulatory provision, cannot reasonably be read as incorporating the entire
    corpus of the CSP statute into plaintiff’s contract. See Smithson, 
    847 F.2d at 794
    (rejecting plaintiff’s argument that an entire body of regulations promulgated by
    the Farmers Home Administration was incorporated by reference into plaintiff’s
    contract, based on a provision stating that the contract was “subject to” such
    regulations, because “[t]his is hardly the type of clause that should be read as
    incorporating fully into the contract all the FmHA regulations” and “if that were
    the parties’ purpose, they would have explicitly so provided”); cf. S. Cal. Edison
    Co. v. United States, 
    226 F.3d 1349
    , 1353 (Fed. Cir. 2000) (Southern California
    Edison) (concluding that contracts incorporated the terms and conditions of certain
    regulations by specifically referring to the regulations as being made part of the
    35
    contracts “as fully and completely as though set forth herein [i.e., in the contracts]
    in length”).
    With respect to plaintiff’s second argument in support of incorporation of
    the CSP statute into his contract – i.e., that the CSP statute is incorporated into his
    contract via the Service’s implementing regulations, see Pl.’s Mot. at 23 & n.30
    (quoting 
    7 C.F.R. § 1469.21
    (e)(3)) – plaintiff cites no authority supporting the
    proposition that a statutory provision may be incorporated into a government
    contract via an agency regulation. Furthermore, even if the court were to assume
    that an agency regulation could incorporate a statutory provision into a government
    contract, nothing in 
    7 C.F.R. § 1469.21
    (e)(3) explicitly provides for the
    incorporation of 16 U.S.C. § 3838c(b)(1) – the provision of the CSP statute setting
    forth the criteria for determining base payments and adjusted base payments to
    CSP participants – into plaintiff’s contract.
    Because plaintiff’s breach of contract claim in Count II is based solely on §
    3838c(b)(1) of the CSP statute, which the court concludes is not incorporated into
    plaintiff’s contract, plaintiff has failed to identify a contractual provision which
    plausibly entitles him to the additional payments he seeks in Count II.12
    2.      Is the Service’s Discussion of its Interim Final Regulations
    Incorporated into Mr. Earman’s Contract? (Count III)
    In Count III, plaintiff alleges, as an alternative to Count II, that the Service
    violated its implementing regulations by making reduced payments to Mr. Earman
    after Congress removed annual limitations on CSP spending by enacting the
    Katrina Act in May 2007. The specific language upon which plaintiff relies is a
    portion of the Service’s discussion of its interim final regulations in which the
    12
    / In the alternative to his claim for damages, plaintiff also argues that he is entitled to
    reformation of his contract because it is based on regulations which are contrary to the CSP
    statute. Pl.’s Mot. at 32 (citing GHS Health Maint. Org., Inc. v. United States, 
    536 F.3d 1293
    (Fed. Cir. 2008), and LaBarge Prods., Inc. v. West, 
    46 F.3d 1547
     (Fed. Cir. 1995)). Plaintiff’s
    argument is unpersuasive. Here, in contrast to GHS Health and LaBarge, there is no money-
    mandating source of law which would allow the court to reach the predicate issue of whether the
    Service’s methodology for calculating base payments and adjusted base payments, as expressed
    in the implementing regulations and in plaintiff’s contract, violates the CSP statute. See infra
    Part II.B.3. Therefore, GHS Health and LaBarge have no application to this case.
    36
    Service stated that the regulations established a “mechanism for limiting payments
    for those years when the CSP is only partially funded.” Fourth Am. Compl. ¶¶ 93-
    100; Pl.’s Mot. at 33-34 (citing 69 Fed. Reg. at 34503). Although Mr. Earman
    concedes, for the purposes of Count III, that the CSP was “partially funded” in FY
    2004 through FY 2006 as a result of annual spending limitations, plaintiff argues
    that the CSP ceased to be “partially funded” in May 2007 when Congress enacted
    the Katrina Act and removed all annual spending limitations. See Pl.’s Mot. at 34;
    Pl.’s Reply at 17. In addition, plaintiff contends that, by enacting the 2008 Farm
    Bill and removing all multi-year limitations on CSP spending, Congress created an
    “indefinite appropriation” for the CSP, and therefore the Service’s continued use of
    an additional tier-specific reduction factor constitutes a continuing violation of the
    implementing regulations and a breach of Mr. Earman’s contract. See Pl.’s Mot. at
    49-50 & n.59.
    Defendant does not dispute that “[t]he Appendix to each CSP cont[r]act
    incorporates by reference the CSP implementing regulations set forth in 7 C.F.R.
    part 1469.” Def.’s Mot. at 10 (citing Hubbs Decl. Ex. 1 at A00016 (Contract
    Appendix ¶ 13A)). As noted supra, the issue of whether the language quoted
    above is incorporated into plaintiff’s contract is a question of law which the court
    must decide. See, e.g., Northrop Grumman, 
    535 F.3d at 1343
     (citations omitted);
    Technicon Instruments, 
    866 F.2d at 421-22
     (citations omitted).
    Although the court agrees that Mr. Earman’s contract incorporates the
    Service’s implementing regulations, the court does not agree with plaintiff that the
    Service’s discussion of its interim final regulations is so incorporated. Plaintiff’s
    contract incorporates only “[t]he regulations in 7 CFR part 1469.” Hubbs Decl.
    Ex. 1 at A00016 (Contract Appendix ¶ 13A) (“The regulations in 7 CFR part 1469
    for the CSP are incorporated, by reference, herein. In the event of a conflict
    between these regulations and the terms of this Appendix, the provisions of the
    regulations will prevail.”). The language upon which plaintiff relies in Count III is
    not contained in the text of the regulations, but is, instead, within the Service’s
    “[d]iscussion” of the regulations. See 69 Fed. Reg. at 34502 (introducing the
    Service’s “Discussion of the Conservation Security Program Interim Final Rule”).
    Plaintiff excerpts a small portion of this commentary, which appears under a
    heading titled “The Administration’s Response to Legislative Intent” and a
    subheading titled “Limiting Payments,” and attempts to make use of this language
    as a contractual basis for his claim. Plaintiff’s endeavor in that regard is
    37
    convoluted and, ultimately, decidedly unfruitful. Plaintiff cites no authority for the
    remarkable proposition that an agency’s commentary regarding its regulations is
    equivalent to the regulations themselves, and what little pertinent authority the
    court has found appears to undermine plaintiff’s position. Cf. Peterson Builders,
    Inc. v. United States, 
    26 Cl. Ct. 1227
    , 1229 n.3 (1992) (footnote omitted) (noting,
    in connection with defendant’s motion for reconsideration, that “[w]hile the court
    [in its prior order] took guidance from the comments to the interim regulations,
    they are in no way binding upon the court”), aff’d, 
    155 F.3d 566
     (Fed. Cir. 1998).
    Ultimately, plaintiff fails to identify any actual regulation in support of his
    contention that the Service’s regulations precluded its utilization of reduced rates
    after the enactment of the Katrina Act in 2007. Because plaintiff’s breach of
    contract claim in Count III is based solely on the Service’s discussion of its interim
    final regulations, which the court concludes is not incorporated into plaintiff’s
    contract, plaintiff has failed to identify a contractual provision which plausibly
    entitles him to the additional payments he seeks in Count III.
    3.     Are Mr. Earman’s Breach of Contract Claims Reviewable
    in the Absence of Specific Contractual Provisions Allegedly
    Breached? (Counts II and III)
    Because plaintiff has failed to allege an obligation arising out of his contract
    which would entitle him to the additional payments he seeks in Counts II and III,
    the court must determine whether, in the absence of such contractual obligations,
    the CSP statute or its implementing regulations may serve as a money-mandating
    source of law which would permit the court to consider plaintiff’s claims. The
    court has already answered that question in the negative. As the court held in
    Meyers, “the CSP – understood as encompassing the CSP statute and its
    implementing regulations – fails to meet any of the three prongs under Samish II
    and is therefore not a money-mandating source of law in this court.” 96 Fed. Cl. at
    60; see Def.’s Mot. at 11 n.5.
    In apparent recognition of the court’s jurisdictional holding in Meyers,
    plaintiff does not allege that he is entitled to relief in Counts II and III under the
    CSP statute and implementing regulations themselves without reference to specific
    terms of his contract. Nevertheless, plaintiff argues that the court “does have
    jurisdiction to rule on the validity of the agency’s regulation[s]” because those
    38
    regulations “were incorporated into plaintiff’s contract by reference and form the
    basis for the improper amounts both set forth in the contract of and paid to plaintiff
    (and each member of the yet-to-be certified class).” Pl.’s Mot. at 29 n.36. In
    support of this proposition, plaintiff cites the Federal Circuit’s decisions in Texas
    Health Choice v. Office of Personnel Management, 
    400 F.3d 895
     (Fed. Cir. 2005),
    and GHS Health Maintenance Organization, Inc. v. United States, 
    536 F.3d 1293
    (Fed. Cir. 2008), and asserts that these cases “hold[] that, where the Court of
    Federal Claims has jurisdiction with respect to a contract claim it also has
    jurisdiction with regard to the validity of regulations related to it.” Pl.’s Mot. at 29
    n.36.
    The court rejects plaintiff’s alternative basis for jurisdiction over his claims
    in Counts II and III. Despite the incorporation of the CSP regulations into
    plaintiff’s contract, Texas Health and GHS Health do not “hold” that this court has
    jurisdiction to rule on the validity of regulations merely because they are
    incorporated into a contract which is alleged to have been breached.
    Texas Health and GHS Health involved contracts between health benefits
    carriers and the United States Office of Personnel Management (OPM) for health
    care benefits to federal employees pursuant to the Federal Employee Health
    Benefits Act, 
    5 U.S.C. §§ 8901-8914
     (2012). In both cases, the plaintiffs
    challenged the validity of an OPM-promulgated regulation which mirrored the
    language of a provision in their contracts with OPM. See GHS Health, 
    536 F.3d at 1296
    ; Texas Health, 
    400 F.3d at 897-98
    . In both cases, the Court of Federal
    Claims was found to possess exclusive jurisdiction over the plaintiffs’ claims under
    the Contract Disputes Act (CDA), 
    41 U.S.C. §§ 7101-7109
     (Supp. V 2011), which
    is a money-mandating source of law sufficient to confer jurisdiction under the
    Tucker Act. See Salt River Pima-Maricopa Indian Cmty. v. United States, 
    86 Fed. Cl. 607
    , 616 (2009) (citing Rick’s Mushroom Serv., Inc. v. United States, 
    521 F.3d 1338
    , 1343-44 (Fed. Cir. 2008), and United States Sur. Co. v. United States, 
    83 Fed. Cl. 306
    , 309 (2008)). The CDA, however, “applies only to express or implied
    government contracts for procurement of goods or services.” Rick’s Mushroom,
    
    521 F.3d at 1343-44
    . The CDA, therefore, has no application to the instant case,
    which involves a financial assistance agreement, not a procurement contract. See
    Hubbs Decl. Ex. 1 at A00016 (Contract Appendix ¶ 13E) (“This Contract is a
    financial assistance agreement, not a procurement contract and is governed by the
    terms set forth herein.”); cf. Wesleyan Co., Inc. v. Harvey, 
    454 F.3d 1375
    , 1378
    39
    (Fed. Cir. 2006) (“‘Procurement is the acquisition by purchase, lease or barter, of
    property or services for the direct benefit or use of the Federal Government.’”
    (quoting New Era Constr. v. United States, 
    890 F.2d 1152
    , 1157 (Fed. Cir. 1989))).
    Thus, Texas Health and GHS Health provide no authority for plaintiff’s contention
    that this court may review the validity of the CSP implementing regulations.
    4.     Is the Service’s Methodology for Calculating Adjusted Base
    Payments in FY 2007 and Thereafter Entitled to Deference?
    (Count III)
    Even assuming, arguendo, that the Service’s discussion of its interim final
    regulations is equivalent to the regulations themselves, and is therefore
    incorporated into Mr. Earman’s contract by virtue of the incorporation language in
    paragraph 13A of the Contract Appendix, the court concludes that the Service’s
    methodology for calculating adjusted base payments in FY 2007 and thereafter
    represents a reasonable interpretation of any ambiguity in the regulations and is
    entitled to deference.
    Plaintiff contends that such deference is inappropriate because “[t]here is no
    agency interpretation involved with respect to Count III, i.e., there is nothing to
    which deference need be given.” Pl.’s Mot. at 34-35. In plaintiff’s view, “[t]he
    resolution of this alternative count does not turn on the Court giving any deference
    to NRCS’[s] judgment as to how best to administer the CSP. . . . Rather, here
    defendant simply failed to follow the regulations that it adopted to operate the
    CSP.” Pl.’s Reply at 15. Mr. Earman’s argument in this regard is, essentially, that
    the Service, in its discussion of its interim final regulations, unambiguously stated
    that it would apply an additional reduction factor to its calculation of adjusted base
    payments only in fiscal years in which the CSP was “partially funded,” i.e., only in
    fiscal years in which Congress imposed annual or multi-year spending limitations
    on the Program. See Pl.’s Mot. at 33-34 (citing 69 Fed. Reg. at 34503); Pl.’s Reply
    at 18-19. In plaintiff’s view, “contrary to the regulations, defendant continued to
    make such reduced payments even in those fiscal years when CCC was not subject
    to any spending limit and/or payment at the full amounts provided for by statute
    was possible.” Pl.’s Reply at 19.
    The court does not agree that the Service’s discussion of its interim final
    regulations is as clear as plaintiff suggests. The Service stated that the interim final
    40
    regulations “adopt[ed] provisions of the proposed rule setting forth a mechanism
    for limiting payments for those years when the CSP is only partially funded.” 69
    Fed. Reg. at 34503. This “mechanism” included provisions to “[r]educe
    stewardship (base) payments by applying a reduction factor.” Id. Contrary to
    plaintiff’s argument, the Service did not state that it would apply an additional
    reduction factor to its calculation of adjusted base payments only in those years in
    which the CSP is “partially funded.” Therefore, the plain language of the Service’s
    discussion of its interim final regulations does not compel the court to adopt Mr.
    Earman’s interpretation of that discussion.
    Moreover, as the government notes in its reply brief, other portions of the
    regulatory history suggest that the Service’s decision to use an additional reduction
    factor to calculate adjusted base payments was based on multiple factors in
    addition to spending limitations. For instance, the Service stated in its notice of
    proposed rulemaking that applying a consistent reduction factor would result in
    greater Program participation and would incentivize CSP participants to engage in
    enhanced conservation practices:
    NRCS proposes to apply a consistent reduction factor to
    all regional rental rates to scale down the share of
    payments going to base payments (for all tiers of
    participation). The more that program payments are
    made toward aspects directly related to additional
    environmental performance, rather than on base
    payments, more conservation is likely to be obtained.
    The results of the CSP proposed rule economic analysis
    indicates that, all other payment held constant, the lower
    the reduction factor used on regional rental rates, the less
    the effect the base payment has on the overall producer
    payment. This results in more net environmental benefits
    accruing to the program. This will lower payments to
    producers, but does it in an equitable manner and allows
    more producers to participate within the available
    funding. NRCS proposes that the base rate, once
    established, will be fixed over the life of the program.
    ....
    41
    Once local average 2001 rental rates for each land use
    category are established, NRCS will then multiply those
    average rental rates by a consistent reduction factor to
    compute the final base rates. The results of the CSP
    proposed rule economic analysis indicated that, with all
    other payments held constant, the lower the reduction
    factor used on regional land rental rates, the less effect
    the base payment has on the overall producer payment.
    This results in more net environmental benefits accruing
    to the program. NRCS proposes a reduction factor to be
    0.1, meaning that the final base rates will be 10 percent
    of the local average rental rates. NRCS believes this
    discounting approach will help:
    • Minimize the effect of the base payment on land
    rental rates, land values and commodity prices
    • Maximize participation in the program
    • Focus funds toward increased environmental
    performance through additional practices and
    enhancements payments
    • Maximize environmental benefits and reduce
    program costs
    • Continue to provide the participant with fair and
    equitable compensation for the social benefits
    derived from the contract.
    
    69 Fed. Reg. 194
    , 199, 213 (Jan. 2, 2004); see Def.’s Reply at 26-27. Likewise, in
    its discussion of its interim final regulations, the Service again explained that
    applying a consistent reduction factor would result in greater environmental
    benefits:
    NRCS will apply a consistent reduction factor to all
    regional rental rates to scale down the share of payments
    going to base payments (for all tiers of participation).
    The more that total program payments are made toward
    aspects directly related to additional environmental
    performance, rather than on stewardship payments, the
    42
    more positive conservation results are likely to be
    obtained. The results of the CSP proposed rule economic
    analysis indicated that, if all other payment[s] are held
    constant, the lower the reduction factor used on regional
    rental rates, the less the effect the stewardship payment
    has on the overall producer payment. This results in
    more net environmental benefits accruing from the
    program. This will lower payments to producers, but
    does it in an equitable manner and allows more producers
    to participate within the available funding. NRCS
    proposes that the stewardship rate, once established, will
    be fixed over the life of the program.
    69 Fed. Reg. at 34509. In light of this regulatory history, the Service’s discussion
    of its interim final regulations is at least ambiguous with respect to whether an
    additional reduction factor was to be applied only in those fiscal years in which
    Congress had imposed annual or multi-year spending limitations on the Program.
    The court must therefore decide whether the Service’s continued use of an
    additional reduction factor after the enactment of the Katrina Act constitutes a
    reasonable interpretation of its ambiguous discussion of the interim final
    regulations.
    “In situations in which the meaning of [regulatory] language is not free
    from doubt,” an agency’s interpretation of its own regulations must be given effect
    “so long as the interpretation sensibly conforms to the purpose and wording of the
    regulations.” Martin v. Occupational Safety and Health Review Comm’n, 
    499 U.S. 144
    , 150 (1991) (citations and internal quotation marks omitted); accord Thomas
    Jefferson Univ. v. Shalala, 
    512 U.S. 504
    , 512 (1994) (“We must give substantial
    deference to an agency’s interpretation of its own regulations.”) (citations omitted);
    Princess Cruises, Inc. v. United States, 
    201 F.3d 1352
    , 1359-60 (Fed. Cir. 2000).
    “Deference is particularly appropriate when the agency is applying its regulations
    to a complex or changing circumstance, thus requiring the agency to bring to bear
    its unique expertise and policy-making prerogatives.” Southern California Edison,
    226 F.3d at 1357 (citing Martin, 
    499 U.S. at 151
    ). When judicial deference is
    appropriate, a court must accept the agency’s reasonable interpretation of a
    regulation, even if there may be other reasonable interpretations to which the
    regulation is susceptible, and even if the court would have preferred an alternative
    43
    interpretation. 
    Id.
     (citing Sharp Corp. v. United States, 
    63 F.3d 1092
    , 1096 (Fed.
    Cir. 1995)).
    Mr. Earman argues that deference should not be afforded to the Service’s
    methodology for calculating adjusted base payments in FY 2007 and thereafter
    because the government is itself a party to plaintiff’s contract. See Pl.’s Mot. at 35
    n.39 (“Moreover, Chevron deference may be inappropriate in situations such as
    this where the agency is an interested party to the agreement [alleged to have been
    breached].” (citing Nat’l Fuel Gas Supply Corp. v. Fed. Energy Regulatory
    Comm’n, 
    811 F.2d 1563
    , 1571 (D.C. Cir. 1987) (National Fuel), and Chickaloon-
    Moose Creek Native Ass’n v. Norton, 
    360 F.3d 972
    , 980 (9th Cir. 2004))). As the
    Federal Circuit noted in Southern California Edison, “[t]his argument is not
    without force” because a party entering a contract with the government “should
    reasonably expect to be on equal legal footing with the government should a
    dispute over the contract arise,” and “[i]t would be unfair to give the government
    such a distinct advantage during an ordinary breach of contract litigation.” 226
    F.3d at 1357 (citing National Fuel, 
    811 F.2d at 1571
    ). Nevertheless, as in
    Southern California Edison, the court concludes that the government’s status as a
    party to plaintiff’s contract does not preclude the application of deference in this
    instance.
    First, despite the fact that the Service is charged with administering
    plaintiff’s contract, see PPFUF ¶¶ 16, 53 (citing Hubbs Decl. Ex. 1 at A00016), it
    is not a party to the contract. Rather, plaintiff’s contract, like all CSP contracts, is
    with the CCC. See Fourth Am. Compl. ¶ 64; PPFUF ¶ 49 (citing Hubbs Decl. Ex.
    1 at A00008 (“THIS CONTRACT is entered between the Commodity Credit
    Corporation (referred to as ‘CCC’) and the undersigned owners, operators, or
    tenants . . . on the farm identified above.”)). Indeed, as noted above, the CCC, not
    the Service, is the source of funds for the Program. See Fourth Am. Compl. ¶ 10;
    PPFUF ¶¶ 7-8. Therefore, the Service has no direct economic stake in the
    methodology used to calculate adjusted base payments to CSP participants. Cf.
    Southern California Edison, 226 F.3d at 1357 (applying deference to an agency’s
    interpretation of regulations incorporated into contracts with private energy
    customers because, inter alia, “the agency was acting as a neutral arbiter resolving
    the customers’ rights to the over-collected funds, rather than as an interested party
    to a contract” (citing National Fuel, 
    811 F.2d at 1571
    )).
    44
    Second, as in Southern California Edison, “the statutory and regulatory
    framework supports the application of judicial deference in this case.” See 226
    F.3d at 1358 (deferring to an agency’s refund methodology, which involved an
    interpretation of its implementing regulations, because “Congress delegated
    significant responsibility for the administration of these energy contracts to the
    Secretary” and the agency’s regulations “do not provide detailed guidance”
    regarding the specific refund methodology to be used). As noted supra and in the
    court’s previous decision in Meyers, the 2002 Farm Bill and the CSP statute confer
    significant responsibility for the administration of CSP contracts to the Secretary of
    Agriculture, acting through the Service. See 16 U.S.C. § 3838a(a) (authorizing the
    Secretary to “establish” and “carry out” the CSP “as determined by the
    Secretary”); Pub. L. No. 107-171, tit. II, § 2001(b), 116 Stat. at 233 (“Not later
    than 270 days after the date of enactment of this Act, the Secretary of Agriculture
    shall promulgate regulations implementing the amendment made by subsection
    (a).”); Meyers, 96 Fed. Cl. at 53.
    Likewise, the Service’s implementing regulations do not mandate specific
    payment rates or amounts. As noted in Meyers, “while the regulations establish a
    general methodology for calculating adjusted base payments, the actual rates and
    payments are not set forth in the regulations, but are instead determined by the
    [Service] on an annual basis and published each year in the annual sign-up notice.”
    96 Fed. Cl. at 57 (citing 
    7 C.F.R. § 1469.23
    (a)(6)). Furthermore, in addition to
    conferring upon the Service discretion to establish the individual components of an
    annual payment, the implementing regulations provide that the Service “may limit
    the stewardship, practice, and enhancement components of CSP payments in order
    to focus funding toward targeted activities and conservation benefits [it] identifies
    in the sign-up notice and any subsequent addenda.” 
    7 C.F.R. § 1469.23
    (g); see
    Meyers, 96 Fed. Cl. at 58. In sum, “[w]ithin the broad constraints set forth in the
    CSP statute and its regulations, the [Service] enjoys substantial discretion in setting
    the payment amounts under conservation security contracts.” Meyers, 96 Fed. Cl.
    at 58. In light of the substantial discretion afforded the Service by the CSP statute
    and regulations, the role of this court is not to determine which payment
    methodology is most reasonable, but rather to ensure that the payment
    methodology selected by the Service is reasonable.
    The court concludes that the Service’s interpretation of its discussion of the
    interim final regulations, as reflected in its methodology for calculating adjusted
    base payments in FY 2007 and thereafter, is reasonable. As previously noted, the
    45
    implementing regulations and regulatory history contain no language limiting the
    application of additional reduction factors to only those years in which CSP
    spending was limited by Congress. To the contrary, the regulatory history clearly
    indicates that the Service’s decision to apply an additional reduction factor was
    based on a variety of factors, of which only one was spending limitations imposed
    by Congress. See 69 Fed. Reg. at 199, 213, 34509; Def.’s Reply at 26-27. Most
    notably, the regulatory history indicates that the Service concluded, based on the
    “results of the CSP proposed rule economic analysis,” that utilizing a consistent
    reduction factor would incentivize CSP participants to engage in enhanced
    conservation practices and would therefore “result[] in more net environmental
    benefits accruing from the program.” 69 Fed. Reg. at 34509.
    Additionally, even if the court were to assume the correctness of Mr.
    Earman’s interpretation of the Service’s discussion of its interim final regulations,
    the court agrees with defendant that the agency reasonably concluded that it
    remained constrained in its spending authority in FY 2007 and thereafter. See
    Def.’s Reply at 23-25, 27-28. It is undisputed that the CSP remained subject to
    spending limitations after the enactment of the Katrina Act, which left in place the
    multi-year limitations imposed by the Deficit Reduction Act of 2005. See Pub. L.
    No. 110-28, tit. IX, sec. 9010, § 20115, 121 Stat. at 218; Pl.’s Resp. to DPFUF ¶
    20; Def.’s Reply at 23-25. Moreover, the 2008 Farm Bill authorized the Service to
    carry out the CSP using only “such sums as are necessary to administer contracts
    entered into before September 30, 2008.” Pub. L. No. 110-246, tit. II, subtit. D,
    sec. 2701, § 1241(a)(3), 122 Stat. at 1768 (codified at 
    16 U.S.C. § 3841
    (a)(3)(A)).
    As plaintiff’s contract was executed before September 30, 2008, it was entirely
    reasonable for the Service to conclude that the 2008 Farm Bill required it to
    expend only such sums as necessary to pay plaintiff in accordance with the extant
    terms of his contract, which included the $2648 reduction set forth in Item 88 of
    the Schedule of Operations. Therefore, even if the Service had intended to apply
    an additional reduction factor only in fiscal years in which CSP spending was
    subject to limitations, the Service reasonably concluded that it remained subject to
    such limitations in FY 2007 and thereafter.
    Accordingly, even if the Service’s discussion of its interim final regulations
    were incorporated into Mr. Earman’s contract, the Service’s interpretation of that
    discussion, as reflected in its methodology for calculating adjusted base payments
    in FY 2007 and thereafter, is reasonable and must be given effect. For this
    46
    additional reason, plaintiff has failed to allege a plausible entitlement to the relief
    he seeks in Count III. Therefore, both Counts II and III fail to state claims upon
    which relief may be granted, and must be dismissed under RCFC 12(b)(6).
    C.      Breach of Contract Claim Based on Alleged Right of Contract
    Renewal (Count IV)
    In Count IV, plaintiff asserts that his contract provides a right of renewal
    because it incorporates the CSP statute, which plaintiff asserts required all CSP
    contracts to be renewable at the option of the contractor. Fourth Am. Compl. ¶¶
    16, 101-104. In this regard, plaintiff relies upon the following provision in the
    CSP statute:
    Except as provided in subparagraph (B) [applicable to
    Tier I contracts], 13 at the option of a producer, the
    conservation security contract of the producer may be
    renewed for an additional period of not less than 5 nor
    more than 10 years.
    16 U.S.C. § 3838a(e)(4)(A); see Fourth Am. Compl. ¶ 16. Plaintiff alleges
    that the government anticipatorily breached this contractual right of renewal
    when Congress enacted the 2008 Farm Bill. Fourth Am. Compl. ¶¶ 102-
    103. As codified, the 2008 Farm Bill provides, in pertinent part, that “[a]
    conservation security contract may not be entered into or renewed under this
    subpart after September 30, 2008.” 16 U.S.C. § 3838a(g)(1).
    In its motion for summary judgment on Count IV, the government first
    argues that “Mr. Earman points to no provision in his CSP contract that provides
    any right of renewal.” Def.’s Mot. at 29; see also id. at 28 (“There is no right to
    renew the CSP contracts on the face of the contract, in the Appendix that is part of
    the contract[,] or . . . in the [Service’s] implementing regulations.”). In addition,
    although the government “does not dispute that the CSP statute is incorporated into
    Mr. Earman’s contract,” Def.’s Reply at 29, it argues that the CSP statute does not
    confer a right of renewal, but rather provides plaintiff with only an “opportunity”
    13
    / It is undisputed that plaintiff never had a Tier I contract; Mr. Earman had a Tier II
    contract that was later modified to a Tier III contract. PPFUF ¶ 49.
    47
    to renew subject to the agency’s ultimate approval, see id. at 29-32. The
    government also argues that specific provisions in plaintiff’s contract, including
    the implementing regulations which are incorporated by reference into the contract,
    prohibit the contract’s automatic and unconditional renewal. See id. at 31-32.
    Furthermore, the government contends that even if plaintiff’s contract includes a
    right of renewal, other provisions in the contract shield the government from
    liability for any alleged breach of that right. See Def.’s Mot. at 29-30; Def.’s
    Reply at 33-34. Finally, defendant argues that plaintiff is unable to establish the
    damages element of his claim because plaintiff cannot identify what terms and
    conditions would have been included in his renewed contract. See Def.’s Reply at
    34-35 & n.22.
    The court agrees with defendant that there is no specific provision of
    plaintiff’s contract which confers a right of renewal, but not for the reasons offered
    by defendant. As explained supra, the court is not bound to accept the parties’
    stipulation that the CSP statute is incorporated into plaintiff’s contract, and
    concludes as a matter of law that the CSP statute is not incorporated into plaintiff’s
    contract.
    The court has considered all of plaintiff’s arguments to the contrary, and
    does not find them persuasive. Plaintiff offers three arguments in support of his
    assertion that the renewal provision in 16 U.S.C. § 3838a(e)(4)(A) is incorporated
    into his contract. First, plaintiff argues that the Service, during the notice and
    comment process, “publicly confirmed that the CSP contracts provided contractors
    with the right to renew” by stating that it declined to add a renewal provision to the
    implementing regulations because “renewal was fully provided for by the [CSP]
    statute.” Pl.’s Mot. at 54-55 (citing 69 Fed. Reg. at 34519 and 
    70 Fed. Reg. 15201
    ,
    15202 (Mar. 25, 2005)). In this regard, plaintiff asserts that because his contract
    expressly incorporates the implementing regulations, see Hubbs Decl. Ex. 1 at
    A00016 (Contract Appendix ¶ 13A), it also incorporates the Service’s alleged
    “understanding that renewal of CSP contracts was provided for by the CSP
    statute,” Pl.’s Mot. at 55. As explained supra, however, although plaintiff’s
    contract expressly incorporates the Service’s implementing regulations, it does not
    incorporate the Service’s discussion of its interim final regulations.
    Second, plaintiff reiterates his contention – based upon Roedler, Dalles, and
    Nebraska Public Power – that because his contract implements the CSP statute, his
    48
    contract must be interpreted in light of the CSP statute and may not contradict the
    CSP statute. See Pl.’s Mot. at 55. Again, as explained supra, the court finds these
    authorities inapposite and unavailing.
    Finally, plaintiff argues that 16 U.S.C. § 3838a(e)(4)(A) is incorporated by
    implication into his contract under the so-called “Christian Doctrine,” first
    articulated by the Court of Claims in G.L. Christian & Associates v. United States,
    
    312 F.2d 418
     (Ct. Cl. 1963), which provides that parties to a government contract
    are deemed to have agreed to contract terms required by law to be included in the
    contract. See Pl.’s Mot. at 55-56 (citing Coll. Point Boat Corp. v. United States,
    
    267 U.S. 12
     (1925), and Enron Fed. Solutions, Inc. v. United States, 
    80 Fed. Cl. 382
    , 392 n.11 (2008) (citing Christian)). This argument is similarly unpersuasive.
    “[T]he Christian Doctrine does not permit the automatic incorporation of every
    required contract clause.” Gen. Eng’g & Mach. Works v. O’Keefe, 
    991 F.2d 775
    ,
    779 (Fed. Cir. 1993). Rather, it applies only to “mandatory contract clauses which
    express a significant or deeply ingrained strand of public procurement policy.” 
    Id.
    (citations omitted); see also S.J. Amoroso Constr. Co. v. United States, 
    12 F.3d 1072
    , 1075 (Fed. Cir. 1993) (“Under the Christian doctrine, a mandatory contract
    clause that expresses a significant or deeply ingrained strand of public procurement
    policy is considered to be included in a contract by operation of law.”) (citations
    omitted). As explained supra, the CSP involves financial assistance agreements,
    not procurement contracts. Thus, the Christian doctrine is not applicable to this
    case and is of no avail to plaintiff.
    Plaintiff’s breach of contract claim in Count IV is based solely on the
    incorporation of 16 U.S.C. § 3838a(e)(4)(A) into plaintiff’s contract. There are no
    disputed facts regarding this claim. Because the CSP statute is not incorporated
    into plaintiff’s contract, as a matter of law, defendant is entitled to summary
    judgment on Count IV.
    D.    Takings Claim (Count V)
    In Count V, plaintiff alleges, in the alternative to Count IV, that the
    government’s abrogation of his alleged contractual right of renewal effected an
    uncompensated taking in violation of the Fifth Amendment to the United States
    Constitution. See Fourth Am. Compl. ¶¶ 105-110.
    49
    This court has jurisdiction over takings claims brought against the federal
    government under the Tucker Act. See Jan’s Helicopter Serv., Inc. v. Fed.
    Aviation Admin., 
    525 F.3d 1299
    , 1309 (Fed. Cir. 2008) (“It is undisputed that the
    Takings Clause of the Fifth Amendment is a money-mandating source for purposes
    of Tucker Act jurisdiction.”) (citation omitted). However, before determining
    whether a particular governmental action has effected a taking of private property
    requiring the payment of just compensation, “as a threshold matter, the court must
    determine whether the claimant has established a property interest for purposes of
    the Fifth Amendment.” Am. Pelagic Fishing Co. v. United States, 
    379 F.3d 1363
    ,
    1372 (Fed. Cir. 2004); see also Colvin Cattle Co. v. United States, 
    468 F.3d 803
    ,
    806 (Fed. Cir. 2006) (noting that “under our regulatory takings analysis, the
    threshold inquiry is whether the claimant has established a ‘property interest’ for
    purposes of the Fifth Amendment”) (citation and internal quotation marks
    omitted). If the undisputed facts show that the interest alleged to have been taken
    is not a cognizable property right to which the Takings Clause of the Fifth
    Amendment applies, then plaintiff’s takings claim fails as a matter of law.
    Plaintiff asserts that he has a cognizable property interest in his alleged
    contractual right of renewal. See Fourth Am. Compl. ¶ 106; Pl.’s Mot. at 65.
    Although contractual rights are cognizable property interests protected by the
    Takings Clause of the Fifth Amendment, see, e.g., Century Exploration New
    Orleans, Inc. v. United States, 
    103 Fed. Cl. 70
    , 76 (2012), the court has already
    concluded that plaintiff’s contract does not confer a right of renewal because the
    CSP statute is not incorporated into plaintiff’s contract. Moreover, to the extent
    that plaintiff bases his asserted property interest in the CSP statute itself, rather
    than in his contract, plaintiff has not cited a single case in which a court has held
    that the denial of monetary benefits under a government program constitutes a
    taking requiring compensation under the Fifth Amendment. Indeed, in Meyers, the
    court rejected the plaintiffs’ argument that they possessed a property right in
    monetary benefits under the CSP. See 96 Fed. Cl. at 62 (“[T]he court holds that
    plaintiffs do not possess any property rights in monetary benefits under the CSP.”);
    cf. Adams v. United States, 
    391 F.3d 1212
    , 1225 (Fed. Cir. 2004) (“We decline to
    treat a statutory right to be paid money as a legally-recognized property interest, as
    we would real property, physical property, or intellectual property. Instead, we
    view it as nothing more than an allegation that money is owed.”). Because
    50
    plaintiff has failed to identify a cognizable property interest under the Takings
    Clause, defendant is entitled to summary judgment on Count V.14
    E.      Motion for Class Certification
    In Greenlee County v. United States, 
    487 F.3d 871
     (Fed. Cir. 2007), the
    Federal Circuit affirmed the decision of the Court of Federal Claims finding the
    issue of class certification moot because all of the plaintiff’s claims had been
    dismissed. 
    487 F.3d at 880-81
    . The Federal Circuit noted that it had “repeatedly
    found on appeal that issues related to class certification were moot in light of [its]
    resolution against the plaintiff of a motion to dismiss or for summary judgment”
    and saw “no reason to apply a different rule when it is the Court of Federal Claims
    that finds the issue moot.” 
    Id. at 880
    . Having dismissed each count of Mr.
    Earman’s Fourth Amended Complaint, the court also denies as moot plaintiff’s
    pending motion for class certification. See id.; Meyers, 96 Fed. Cl. at 42 n.6
    (“Because plaintiffs’ complaint is dismissed in its entirety, the motions for class
    certification and to amend the pleadings are dismissed as moot.” (citing Greenlee
    County, 
    487 F.3d at 880
    )).
    CONCLUSION
    For all of the foregoing reasons, the court hereby grants defendant’s motion
    to dismiss Counts II and III, grants defendant’s motion for summary judgment on
    Counts I, IV, and V, and denies plaintiff’s cross-motion for summary judgment on
    all counts.
    Accordingly, it is hereby ORDERED that
    (1)     Defendant’s Revised Motion to Dismiss and Motion for Summary
    Judgment, filed February 1, 2013, is GRANTED;
    14
    / In his reply brief, plaintiff “requests that the Court stay the filing of plaintiff’s reply
    brief on Count V and disposition of Count V pending resolution of the issues in Count IV.” Pl.’s
    Reply at 30. Because plaintiff was afforded a full opportunity to brief summary judgment
    arguments regarding his takings claim, and because that claim fails as a matter of law, the court
    denies plaintiff’s request for a “stay.”
    51
    (2)   Plaintiff’s Cross-Motion for Summary Judgment, filed March 20,
    2013, is DENIED;
    (3)   Plaintiff’s Motion for Class Certification, filed September 30, 2010, is
    DENIED as moot;
    (4)   The Clerk’s Office is directed to ENTER final judgment in favor of
    defendant, DISMISSING the Fourth Amended Complaint with
    prejudice; and
    (5)   Each party shall bear its own costs.
    /s/Lynn J. Bush
    LYNN J. BUSH
    Senior Judge
    52
    

Document Info

Docket Number: 10-617C

Citation Numbers: 114 Fed. Cl. 81, 2013 U.S. Claims LEXIS 1910, 2013 WL 6503539

Judges: Bush

Filed Date: 12/12/2013

Precedential Status: Precedential

Modified Date: 10/19/2024

Authorities (46)

national-fuel-gas-supply-corporation-v-federal-energy-regulatory , 811 F.2d 1563 ( 1987 )

Thomas Jefferson University v. Shalala , 114 S. Ct. 2381 ( 1994 )

American Pelagic Fishing Company, L.P. v. United States , 379 F.3d 1363 ( 2004 )

Colvin Cattle Company, Inc. v. United States , 468 F.3d 803 ( 2006 )

Greenlee County, Arizona v. United States , 487 F.3d 871 ( 2007 )

GHS Health Maintenance Organization, Inc. v. United States , 536 F.3d 1293 ( 2008 )

Becky Lynn Massey v. Del Laboratories, Inc. , 118 F.3d 1568 ( 1997 )

Howard Smithson and Maretta Smithson v. The United States , 847 F.2d 791 ( 1988 )

Chevron U. S. A. Inc. v. Natural Resources Defense Council, ... , 104 S. Ct. 2778 ( 1984 )

Scheuer v. Rhodes , 94 S. Ct. 1683 ( 1974 )

American Hospital Association v. Richard S. Schweiker, and ... , 721 F.2d 170 ( 1983 )

Labarge Products, Inc. v. Togo D. West, Jr., Secretary of ... , 46 F.3d 1547 ( 1995 )

St. Christopher Associates, L.P. v. United States , 511 F.3d 1376 ( 2008 )

Celotex Corp. v. Catrett, Administratrix of the Estate of ... , 106 S. Ct. 2548 ( 1986 )

Anderson v. Liberty Lobby, Inc. , 106 S. Ct. 2505 ( 1986 )

Bell Atlantic Corp. v. Twombly , 127 S. Ct. 1955 ( 2007 )

San Carlos Irrigation and Drainage District v. The United ... , 877 F.2d 957 ( 1989 )

Ashcroft v. Iqbal , 129 S. Ct. 1937 ( 2009 )

patrick-roedler-thomas-mcdonough-jeannie-strobel-richard-palmer-noreen , 255 F.3d 1347 ( 2001 )

Adams v. United States , 391 F.3d 1212 ( 2004 )

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