Carter v. United States ( 2021 )

NOT FOR PUBLICATION
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
___________________________________
)
JEREMY MARQUISE CARTER, )
)
Plaintiff, )
)
v. ) No. 17-587C
)
THE UNITED STATES, ) Filed: March 16, 2021
)
Defendant. )
___________________________________ )
MEMORANDUM OPINION AND ORDER
Before the Court is the Government’s Motion to Dismiss Plaintiff Jeremy Marquise
Carter’s Amended Complaint, which seeks compensation for his idea to increase efficiency at a
jailhouse furniture production shop. Because of Mr. Carter’s status as a pro se plaintiff, the Court
liberally construes the allegations in his complaint. Hughes v. Rowe, 449 U.S. 5, 9–10 (1980);
Durr v. Nicholson, 400 F.3d 1375, 1380 (Fed. Cir. 2005). For the reasons discussed below, the
Court DENIES the Government’s Motion.
I. BACKGROUND
At the time Mr. Carter filed his Amended Complaint, he was incarcerated in federal prison
in Estill, South Carolina. Am. Compl. ¶ 2, ECF No. 16. 1 Mr. Carter was previously housed at a
federal corrections facility at Coleman, Florida. Id. ¶ 3. While at Coleman, Mr. Carter participated
in a work program and became a factory management clerk, overseeing operations in the prison’s
furniture factory. Id. ¶¶ 4–5.
1 According to the Federal Bureau of Prisons online database of current and former inmates,
Mr. Carter was released on October 9, 2020. Find an Inmate, FED. BUREAU OF PRISONS,
https://www.bop.gov/inmateloc/ (last visited Mar. 12, 2021).
During his time at the Coleman facility, Mr. Carter alleges that he noticed what he claims
was “excessive waste” in furniture production. Id. ¶¶ 6–8. In response, he “devised a solution by
creating a formula that would streamline production and cut down on waste.” Id. ¶ 8. He named
this idea “The Green Project.” Id. In May 2011, Mr. Carter brought his Green Project idea to the
attention of Factory Manager Tad Schnaufner, Superintendent of Industries (“SOI”) Bryan Moon,
and Acting Factory Manager James Moody. Id. ¶ 9.
Mr. Carter claims he submitted his Green Project proposal in writing through the Federal
Prison Industries’ (“FPI”) incentive awards program, which the parties refer to as the “Ideas for
Dollars Program.” Id. ¶¶ 9, 13. Under the program, an inmate may receive a cash award for ideas
that produce a net savings of at least $250. 28 C.F.R. § 345.72. The regulations provide that
“[c]ash awards shall be one percent of the net estimated savings during the first year,” with a
minimum award of $25 and a maximum award of $1,000. Id. The inmate’s immediate supervisor
begins the consideration process by reviewing the inmate’s suggestion and then forwarding the
idea to the SOI with comments and recommendations. Id. § 345.73(a). The SOI designates a
committee to further review the idea. Id. § 345.73(b). The committee itself can make an award of
up to $100 to an inmate whose money-saving proposal was adopted. Id. § 345.73(b)(1). If the
committee believes that an award exceeding $100 is appropriate, it forwards the recommendation
to the Assistant Director for final decision. Id.
Mr. Schnaufner was Mr. Carter’s immediate supervisor, and Mr. Moon served as the SOI.
ECF No. 16 ¶ 14. Mr. Carter contends that, after he submitted his idea, Mr. Moon convened a
committee comprised of himself, Mr. Schnaufner, and Mr. Moody. Id. ¶ 15. Following their
review, Schnaufner, Moon, and Moody allegedly instructed Mr. Carter to implement his proposal
2
at the Coleman facility. Id. ¶ 18. According to Mr. Carter, the idea saved the facility “more than
$317,000.00 during the first two months of its implementation.” Id. ¶ 26.
As compensation for initiating the Green Project, Mr. Carter requested that he receive one
percent of the total savings realized by the project. Id. ¶ 19. According to Mr. Carter, Schnaufner,
Moon, Moody, and three Assistant Directors (Dan Moore, Dennis Merrion, and Paul Laird) agreed
to compensate him at a rate of one percent of the total savings from his project. Id. ¶ 20. Mr.
Carter contends he was instructed by Schnaufner, Moon, and Moody to keep a ledger of the
savings. Id. ¶ 21. A few months after implementation, Mr. Carter allegedly asked Mr. Moon about
monthly compensation. Id. ¶ 27. Mr. Carter claims that Mr. Moon then told him he would not
receive any payments. Id. ¶ 28.
Mr. Carter contends that he complained to Mr. Laird and the two other Assistant Directors,
Moore and Merrion, about not receiving the agreed-upon compensation. Id. ¶ 30. The Assistant
Directors allegedly instructed Mr. Moon to ensure that Mr. Carter received his award. Id. ¶ 31.
Rather than paying him, however, Mr. Carter asserts that Schnaufner, Moon, and Moody began
harassing him for complaining to Laird, Moore, and Merrion and that the alleged harassment and
retaliation culminated in Mr. Carter being fired. Id. ¶ 32–33.
Mr. Carter alleges he never received compensation. Id. ¶ 35. He asserts that Schnaufner,
Moon, and Moody misled him by promising him payment under the Ideas for Dollars Program
despite never intending to pay him. Id. ¶ 39. Had it not been for the alleged false promise to
compensate him for his idea, Mr. Carter says he would not have disclosed his formula or
implemented the Green Project concept. Id. ¶¶ 41–42.
After lodging several administrative grievances and complaints, Mr. Carter sought review
before the Bureau of Prisons. Op. at 4–5, Carter v. Moon, No. 12-269 (M.D. Fla. Mar. 18, 2015),
3
ECF No. 56. Later, Mr. Carter took his case to the United States District Court for the Middle
District of Florida. Id. at 1. In the district court, Mr. Carter asserted numerous state and federal
claims, including that the Government breached a contractual obligation by failing to compensate
him through the Ideas for Dollars Program after implementing the Green Project. Id. at 13.
Because Mr. Carter’s alleged damages exceeded $10,000, the district court dismissed his contract
claim, finding that the Court of Federal Claims has exclusive jurisdiction over such actions under
the Tucker Act. Id. at 13–14. All other claims were dismissed because the parties reached a
settlement. Order, Carter v. Moon, No. 12-269 (M.D. Fla. July 27, 2015), ECF No. 87.
Mr. Carter also has made several attempts to obtain relief in this court. He first filed a
complaint here in 2015. See generally Compl., Carter v. United States, No. 15-627C (Fed. Cl.
June 18, 2015), ECF No. 1. At the time, however, his claims before the federal district court were
still pending. After noting that both actions relied “on the same body of operative facts,” the court
dismissed his claims for lack of jurisdiction due to the pendency of the district court litigation
when the case was filed. Order, Carter v. United States, 15-627C (Fed. Cl. July 13, 2016)
(Bruggink, J.), ECF No. 23. Mr. Carter filed the present case in May 2017, alleging his breach of
contract claim along with several other claims. See generally Compl., ECF No. 1. On January 31,
2018, the court dismissed all his claims except for the contract claim. See Carter v. United States,
No. 17-587C, 2018 WL 651369, at *8 (Fed. Cl. Jan. 31, 2018) (Wolski, J.). 2
The Government argued that the contract claim should be dismissed because the Ideas for
Dollars Program is nothing more than an illusory promise. United States’ Mot. to Dismiss at 8,
ECF No. 6. Specifically, it said the program allows for “discretionary awards for inmate ideas”
2This case was reassigned from Judge Wolski to the undersigned on December 21, 2020.
Order Reassigning Case, ECF No. 22.
4
and “is not a guarantee of such awards.” Id. at 7. The only promise made to Mr. Carter, according
to the Government, was to consider using his idea. Id. at 8 (citing Ridge Runner Forestry v.
Veneman, 287 F.3d 1058, 1061–62 (Fed. Cir. 2002)). Thus, the Government claimed it had not
obligated itself to award anything to Plaintiff. Id.The court, however, declined to dismiss Mr. Carter’s contract claim. The court understood
Mr. Carter to be alleging the existence of an implied-in-fact contract between Schnaufner, Moon,
and Moody—on behalf of the United States—and Mr. Carter. See 2018 WL 651369, at *6. It
held, however, that Mr. Carter had not sufficiently pled facts showing that Schnaufner, Moon, and
Moody had contractual authority to create a binding implied-in-fact contract. Id. (citing Hanlin v.
United States, 316 F.3d 1325, 1328 (Fed. Cir. 2003)). Accordingly, to avoid having his case
dismissed for failure to state a claim under Rule 12(b)(6) of the Rules of the United States Court
of Federal Claims (“RCFC”), the court ordered Mr. Carter to file an amended complaint. Id. Mr.
Carter filed the Amended Complaint on March 19, 2018, specifying the positions that Schnaufner,
Moon, Moody, and Laird held vis-à-vis the Ideas for Dollars Program. ECF No. 16 ¶¶ 9, 14–16.
On April 2, 2018, the Government moved to dismiss Mr. Carter’s Amended Complaint for
lack of subject matter jurisdiction under RCFC 12(b)(1). Def.’s Mot. to Dismiss Am. Compl. at
1, ECF No. 17. It argues that Mr. Carter has failed to establish that Schnaufner, Moon, and Moody
had the legal authority to bind the United States to an implied-in-fact contract. Id. at 3. To the
extent that Mr. Carter relies on their authority to make an award under the Ideas for Dollars
Program, the Government reasserts that the program is nothing more than an illusory promise and
not the guarantee of an award. Id. In the alternative, the Government also highlights that
Schnaufner, Moon, and Moody had authority to award Mr. Carter only $100 at most and that Mr.
Laird could award him only $1,000 at most. Id. at 3–4. As such, the Government argues there is
5
no way that any of these individuals could bind the United States to the over $500,000 award that
Mr. Carter seeks. Id. at 4.
II. DISCUSSION
A. Standard of Review
This Court must dismiss claims that do not fall within its subject matter jurisdiction. See
RCFC 12(b)(1), 12(h)(3). When ruling on a motion to dismiss for lack of jurisdiction, a court must
accept as true all uncontroverted factual allegations contained in the complaint and construe them
in the light most favorable to the plaintiff. See Stephens v. United States, 884 F.3d 1151, 1155
(Fed. Cir. 2018); see also Creative Mgmt. Servs., LLC v. United States, No. 2020-1449, 2021 WL
745349, at *4 (Fed. Cir. Feb. 26, 2021) (citing Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per
curiam)). In the case of an individual proceeding pro se, a court should hold the plaintiff’s
complaint to “less stringent standards than formal pleadings drafted by lawyers.” Erickson, 551
U.S. at 94; see Jaye v. United States, 781 F. App’x 994, 996 (Fed. Cir. 2019), cert. denied, No. 20-
705, 2021 WL 78216 (U.S. Jan. 11, 2021). However, despite this tradition of leniency, pro se
litigants are not exempt from meeting jurisdictional requirements. See Jaye, 781 F. App’x at 996
(quoting Kelley v. Sec’y, U.S. Dep’t of Labor, 812 F.2d 1378, 1380 (Fed. Cir. 1987)).
B. Jurisdiction over the Breach of Contract Claim
The Tucker Act supplies this Court with jurisdiction over claims against the Federal
Government founded upon the Constitution, an Act of Congress, a regulation of an executive
department, or an express or implied contract. 28 U.S.C. § 1491(a)(1). To survive the
Government’s Motion to Dismiss for lack of subject matter jurisdiction, Mr. Carter has the burden
to show compliance with the Tucker Act. Trauma Serv. Grp. v. United States, 104 F.3d 1321,
1324 (Fed. Cir. 1997); see Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed.
6
Cir. 1988) (a plaintiff bears the burden of establishing subject matter jurisdiction by a
preponderance of the evidence).
Here, Mr. Carter can do so by asserting a “well pleaded allegation of a breach of an express
or implied-in-fact contract.” Bank of Guam v. United States, 578 F.3d 1318, 1325 (Fed. Cir. 2009);
Trauma Serv. Grp., 104 F.3d at 1325 (“To show jurisdiction in the Court of Federal Claims, [the
plaintiff] must show that either an express or implied-in-fact contract underlies its claim.”)).
Alleging an implied-in-fact contract requires “a meeting of [the] minds, which, although not
embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the
light of the surrounding circumstances, their tacit understanding.” Trauma Serv. Grp., 104 F.3d
at 1326 (quoting Hercules, Inc. v. United States, 516 U.S. 417, 424 (1996)). The Federal Circuit
has “held that jurisdiction under this provision requires no more than a non-frivolous allegation of
a contract with the government.” Engage Learning, Inc. v. Salazar, 660 F.3d 1346, 1353 (Fed.
Cir. 2011) (emphasis in original) (citing Lewis v. United States, 70 F.3d 597, 602, 604 (Fed. Cir.
1995)). Whether a contract actually existed—i.e., whether a plaintiff has established all the
elements necessary to the formation of a valid contract—is not a jurisdictional question. 3 See id.at 1354–55; see also Gould, Inc. v. United States, 67 F.3d 925, 929–30 (Fed. Cir. 1995) (holding
that the government mischaracterized lack-of-authority argument as jurisdictional); see Mendez v.
United States, 121 Fed. Cl. 370, 379 (2015) (“Jurisdiction . . . is not defeated . . . by the possibility
that the averments might fail to state a cause of action on which [the plaintiff] could actually
3The elements of an implied-in-fact contract with the Government, as with an express
contract, are: “(1) mutuality of intent, (2) consideration, (3) an unambiguous offer and acceptance,
and (4) ‘actual authority’ on the part of the government’s representative to bind the government in
contract.” Hanlin, 316 F.3d at 1328.
7
recover.”) (quoting Do-Well Mach. Shop, Inc. v. United States, 870 F.2d 637, 639 (Fed. Cir.
1989)).
For the reasons discussed below, Mr. Carter has sufficiently asserted a claim at the pleading
stage that falls within this Court’s jurisdiction because he alleges an implied-in-fact contract with
the Government. While his submission of the Green Project proposal to the Ideas for Dollars
Program would not, by itself, create a binding contract, the fact that the Government allegedly
approved, utilized, and promised to pay him for the implementation of his idea may plausibly give
rise to a implied-in-fact contract. Further, Mr. Carter alleged, based on regulations governing the
program, that the Government’s agents had authority to give him an award as high as $1,000 for
his idea. Thus, the Court cannot dismiss his claim at this juncture.
1. Whether Submission to the Ideas for Dollars Program Created a Contract
In its first motion to dismiss, the Government contended that Mr. Carter’s claim was
meritless because submitting a suggestion through the Ideas for Dollars program does not create a
contract. Carter, 2018 WL 651369, at *6. It argued that the program was nothing more than an
illusory promise. Id. Per the program’s governing regulations, the decision to utilize an inmate’s
idea and give a corresponding award appears discretionary. See 28 C.F.R. § 345.72 (“An inmate
worker may receive a cash bonus or cash award for any suggestion or invention which is adopted
by FPI . . . .”). Thus, the Government asserted that the only promise made to Mr. Carter was to
consider giving him an award for his money-saving idea. Carter, 2018 WL 651369, at *6.
The court, however, understood Mr. Carter’s Complaint to be asserting an implied-in-fact-
contract claim based on the actions and representations of Schnaufner, Moon, and Moody. Id.Rather than alleging that a binding contract formed between him and the United States because he
formally submitted an idea under the program, Mr. Carter’s Complaint alleged that Schnaufner,
8
Moon, and Moody agreed to compensate Mr. Carter through the Ideas for Dollars Program. Id.(citing Compl. ¶ 15). In other words, it appeared from the facts pled that the “Ideas for Dollars
Program was merely the vehicle by which Messrs. Schnaufner, Moon, and Moody would
purportedly compensate Mr. Carter for implementing the Green Project.” Id. Thus, the court
rejected the Government’s position that Mr. Carter was seeking the fulfillment of an illusory
promise through the mere submission of his idea to the Ideas for Dollars Program. Id.The Government renews its arguments regarding Plaintiff’s inability to plead a binding
contract based only on submission of an idea to the program. ECF No. 17 at 3 (“the program is
not a guarantee of award, but only the promise to consider award” and thus “is an illusory
promise”). If Mr. Carter were premising his contract claim solely on his submission of a proposal,
then the Government would likely prevail. A host of cases have affirmed that where a suggestion
is not adopted by the agency, an implied-in-fact contract entitling the employee, or in this case the
inmate, to an award does not arise. Merely volunteering an idea does not bind the United States
in contract. See, e.g., Cooley v. United States, 76 Fed. Cl. 549, 556 (2007) (collecting cases).
Here, however, Mr. Carter has pled facts beyond simple submission of the Green Project
idea to the Ideas for Dollars Program. As shown below, accepting these facts as true and liberally
construing his pleading, Mr. Carter’s Amended Complaint plausibly alleges an implied-in-fact
contract that suffices to confer jurisdiction in this Court.
2. Whether Approval and Use of the Green Project Idea Creates an Implied-
in-Fact Contract
Mr. Carter’s allegation that the Government approved, utilized, and agreed to compensate
him for his Green Project idea after he submitted it through the Ideas for Dollars Program gives
him the grounds needed to allege a claim within this Court’s jurisdiction. The Government does
not dispute that Mr. Carter formally proposed his idea and that prison officials approved and
9
utilized the idea without paying Mr. Carter, despite an alleged agreement to compensate him.
Instead, the Government contends that no contract formed because Schnaufner, Moon, and Moody
had no authority apart from the Ideas for Dollars Program to bind the United States. ECF No. 17
at 2–4. The Government, however, ignores a long line of precedent holding that an implied-in-
fact contract can potentially form when the Government approves and utilizes a suggestion from
a formal awards program.
a. Precedent Regarding Awards Programs
In Martilla v. United States, the Court of Claims first recognized the possibility that the
Government’s failure to pay an award to a civilian employee who submitted a formal, money-
saving suggestion to the Government could be subjected to review. 118 Ct. Cl. 177, 181–82
(1950). Even though the statute implementing the awards program left “considerable discretion
in deciding whether or not an award was justified,” the court left open the possibility that an
official’s failure to fairly consider the merits of the award could be reviewable. Id. at 182. Over
ensuing decades, the Court of Claims held that an abuse of discretion standard of review applied
when reviewing meritorious awards program decisions. See, e.g., Shaller v. United States, 202 Ct.
Cl. 571, 596–97 (1973) (finding no abuse of discretion for an award of $300 based on intangible
benefits from an idea); Serbin v. United States, 168 Ct. Cl. 934, 934–35 (1964) (determining that
there was no abuse of discretion in awarding plaintiffs less than the maximum award permitted).
An important takeaway from these cases was that the Court of Claims found it had
jurisdiction despite permissive and discretionary language in the statutes and regulations governing
awards programs. For example, the governing regulations in Shaller stated: “The program
provides incentive awards (cash and/or honorary) which may be granted” for superior job
performance. 202 Ct. Cl. at 582 (emphasis added). Although this permissive language and other
10
provisions granted government agents a great deal of discretion in determining if an award was
appropriate, the court concluded that it had jurisdiction to review the plaintiff ’s claim that he
should have been awarded more money. Id. at 596–97. Only in a case where the plaintiff ’s
proposal was rejected did the court note, in passing, that decisions about whether to grant an award
might be unreviewable. See Kempinski v. United States, 164 Ct. Cl. 451, 453 (1964). Thus, from
the beginning, the court distinguished between cases where an idea was acted upon from those
where the submission was not acted upon.
Then, in Griffin v. United States, the Court of Claims recognized that an implied-in-fact
contract can form when the Government utilizes a suggestion submitted to it via a formal rewards
program. 215 Ct. Cl. 710, 714 (1978). In Griffin, the plaintiff entered a suggestion to an awards
program and received an award. Id. at 711–12. He claimed that the amount was insufficient. Id.
at 712. The Government contended that because the award was discretionary, the plaintiff had
failed to allege the violation of a money-mandating provision. Id. at 712–13 (citing United States
v. Testan, 424 U.S. 392, 402 (1976)). The Court of Claims acknowledged that a claim for a
monetary allowance which “is wholly discretionary . . . cannot be the subject of a Tucker Act suit.”
Id. at 713 (citing Grismac Corp. v. United States, 556 F.2d 494, 499 (Ct. Cl. 1977)). Nevertheless,
the court found that it had jurisdiction over the claim because implied-in-fact contractual
obligations are cognizable under the Tucker Act. Id.Specifically, the court highlighted how the Government had established guidelines and
procedures for evaluating suggestions. Id. It then appropriated the plaintiff ’s proposed suggestion
based on those guidelines and procedures. Id. at 714. By accepting and acting upon the plaintiff ’s
idea, the Government became “bound by an implied contract” which “at a minimum, required [it]
to establish plaintiff ’s compensation without abuse of discretion and within the guidelines [it] had
11
published.” Id. Thus, the court concluded that while the Government initially had “uncontrolled
and unreviewable discretion” in deciding whether to accept or decline a proposal, once it adopted
and implemented the suggestion according to published procedures and guidelines, it then
obligated itself not to abuse its discretion. Id. As such, because of this essentially contractual
obligation, the court had jurisdiction to review the claim.
Subsequent cases both expound upon but also detract from Griffin’s logic. See, e.g.,
Cooley, 76 Fed. Cl. at 557–58 (discussing “the somewhat murky body of case law” regarding
whether the claim is reviewed as an abuse of agency discretion or a breach of contract); McGee v.
United States, 5 Cl. Ct. 480, 481 (1984) (questioning whether Griffin can be reconciled with
subsequent cases discussing if a law is money mandating). Nevertheless, Griffin and the earlier
cases set an important marker which judges of this court have continued to follow. See, e.g.,
Ridenour v. United States, 44 Fed. Cl. 202, 207 (1999) (reaffirming that an agency’s use of an idea
that was submitted through “a formal program that holds out a commitment to award, gives rise to
enforceable expectations correctly described as an implied-in-fact contract”). Hence, it is possible
for the submission and adoption of an idea through a formal rewards program to create a cognizable
claim under the Tucker Act. The question is whether Mr. Carter has sufficiently pled facts
asserting such a claim.
b. Application to Mr. Carter’s Claim
Alleging an implied-in-fact contract claim within this Court’s jurisdiction requires Mr.
Carter to plead facts showing “a meeting of the minds” between himself and the Government’s
agents, which can be inferred as a matter of fact from their conduct “showing, in the light of the
surrounding circumstances, their tacit understanding.” Hercules, 516 U.S. at 424. Under the prior
case law, “the agency’s adoption of an employee’s suggestion” is what solidifies an implied-in-
12
fact contract. Cooley, 76 Fed. Cl. at 557; see also Ridenour, 44 Fed. Cl. at 207 (explaining that a
formal awards program “is an invitation to submit offers which, if accepted by the agency, entitle
the offeror to recognition that may include a cash award determined in accordance with published
guidelines”). A claim alleging the existence of an implied-in-fact contract through a formal
rewards program therefore requires, at minimum, demonstrating the government’s use of the
proposal. See Anderson, 73 Fed. Cl. at 201–02 (discussing how prior cases have generally held
that “where a suggestion is rejected by the agency, an implied-in-fact contract entitling the
employee to an award does not arise”). Here, Mr. Carter has alleged the Government used his
Green Project idea, and more.
The Government contends that Mr. Carter has failed to allege facts demonstrating that
Schnaufner, Moon, and Moody had general contracting authority—separate and apart from the
Ideas for Dollars Program—to bind the United States. ECF No. 17 at 3. In the alternative, the
Government asserts that any authority the agents had to make awards under the Ideas for Dollars
Program did not include authority for the amount Plaintiff claims (i.e., over $500,000).
Schnaufner, Moon, and Moody could give an award of up to $100. Id. at 3–4; see also 28 C.F.R.
§ 345.73(b)(1). An award greater than $100 requires the permission of the Assistant Director, Mr.
Laird, whose authority is likewise limited. ECF No. 17 at 3–4; see also 28 C.F.R. §§ 345.72,
345.73(b)(1). Either way, the Government argues that no valid contract formed because no one had
contracting authority to bind the United States to the contract Mr. Carter alleges.4 ECF No. 17 at 4.
4 The Government does not assert the alleged implied-in-fact contract is invalid because it
lacked mutuality of intent, consideration, or unambiguous offer and acceptance. Moreover, the
Government does not contend that the contract could not have formed due to some misstep in
following the regulations governing the Ideas for Dollars Program. Since a deficiency in following
the program’s procedures has not been made apparent, the Court shall presume at this stage that
no such irregularities occurred. See Ridenour, 44 Fed. Cl. at 207 (absent allegations of a departure
from the agency’s established protocol the court assumed all actions taken complied with relevant
13
The Government, however, has completely overlooked the line of cases dealing with
implied-in-fact contracts discussed above. Hence, this Court is left without argument as to why
this case should be treated differently from other cases where the Government allegedly approved,
implemented, benefited from, and agreed to give compensation for an idea submitted through a
formal awards program. 5 Likewise, the Government does not contest that Schnaufner, Moon,
Moody, and Laird together possessed the authority to make up to a $1,000 award. See id. at 3–4.
As a result, this Court cannot agree that Mr. Carter’s claim must be dismissed outright for lack of
jurisdiction.
Based on Griffin and the subsequent line of cases discussed above, Mr. Carter sufficiently
pleads a claim that the Government formed a plausible implied-in-fact contract with him. Mr.
Carter asserts that he submitted his Green Project idea through an incentive awards program for
prison inmates. See ECF No. 16 ¶¶ 9–26; see also 28 C.F.R. § 345.70. He alleges that Schnaufner,
Moon, and Moody approved his proposal, instructed him to implement the idea, and directed him
to keep a spreadsheet to monitor savings. See ECF No. 16 ¶¶ 18–21. He contends that the
Government significantly benefited from his idea. Id. ¶¶ 26, 36. Yet, despite his submission
through a formal program and the alleged approval of an award by Schnaufner, Moon, Moody,
Laird, and other Assistant Directors, Mr. Carter has not been compensated. Id. ¶¶ 31, 35. Mr.
Carter’s submission of his Green Project idea through a formal awards program, under the
procedures). In any event, the Government does not move for dismissal of the Amended
Complaint under RCFC 12(b)(6) and thus the Court does not endeavor at this time to determine
whether Mr. Carter has stated a claim upon which relief may be granted.
5 In addition to not addressing the Griffin line of cases, the Government provides no citation
to authority or any substantial argument regarding why a promise to pay through the mechanism
of a specific awards program—even where the agents otherwise have no general contracting
authority—would not state a cognizable contract claim. See ECF No. 17 at 3–4.
14
supervision of government agents with authority to grant an award, and the Government’s alleged
use of his idea and promise of a cash award present sufficient factual allegations at this preliminary
stage to support this Court’s jurisdiction. See Cooley, 76 Fed. Cl. at 557.
Whether Mr. Carter is legally entitled to compensation is another matter. One issue that
has troubled the court and its predecessor is whether it can review, let alone have jurisdiction over,
an apparently discretionary decision to award money. See Anderson, 73 Fed. Cl. at 204 (discussing
how regulations can reserve the agency’s authority to give an award even if the agency
appropriates the proposal). On a macro level, the doctrine has allowed for cases to proceed on the
basis that these claims are implied-in-fact contracts rather than enforcing a money-mandating law.
See, e.g., Griffin, 215 Ct. Cl. at 712–14. This does not mean, however, that a plaintiff can expect
to prevail against an agency that reserves to itself discretion in deciding whether to give an award—
even when it utilizes the idea. See Anderson, 73 Fed. Cl. at 203–04 (holding that to state a viable
claim “a contract must arise based upon an agency’s procedures that hold out some prospect that
an accepted suggestion will be met with an award”); see also McGee, 5 Cl. Ct. at 481–82
(questioning whether the court’s jurisdiction extends to a regulatory regime where “an agency
‘may’ pay a cash award for employee suggestions”). 6 The burden will lie with Mr. Carter to show,
based on the regulations and any other guidelines, that an award payout was wrongfully withheld
from him.
6 Courts in prior cases have pointed to manuals or guidelines as essentially providing the
terms for the implied-in-fact contract. See, e.g., Cooley, 76 Fed. Cl. at 557 (“In all events, adoption
of a suggestion, or provision of information, or other actions taken in accord with and reliance
upon agency procedures may give rise to an implied-in-fact contract that incorporates those
internal procedures.”); Ridenour, 44 Fed. Cl. at 207 (discussing how a formal program with
published guidelines creates “enforceable expectations” that the submission will be judged in
accord with those guidelines). Whether such terms are necessary to the continued vitality of Mr.
Carter’s claim is a question that this Court shall leave for further analysis at a later stage.
15
The parties have not briefed the issue of whether the governing regulations give the
Government discretion to refrain from giving an award, even if it utilized Plaintiff ’s idea and
agreed to compensation. Thus, the Court will not endeavor to decide the merits at this time. But
for the purpose of assuring itself that it has jurisdiction, the Court notes that several cases have
found an implied-in-fact contract was alleged even where the governing provisions used the term
“may.” See, e.g., Merrick, 846 F.2d 725, 726 (Fed. Cir. 1988) (assuming jurisdiction and
determining that the plaintiff stated a claim for relief where the regulation provided that the agency
“may approve such reward as [it] deems suitable” and the parties negotiated and fixed the amount
of the reward). Indeed, recently another judge of this court reviewed a claim alleging the breach
of an implied-in-fact contract by the Social Security Administration (“SSA”), where the governing
incentive awards statute said that the “agency may pay a cash award” to an employee who provides
an idea. Cooley, 76 Fed. Cl. at 556 (emphasis added) (quoting 5 U.S.C. § 4503). Relying on the
several prior decisions discussed above, which involved statutes or regulations with “permissive
language,” id., the court held that the plaintiff-employee could state an implied-in-fact contract
claim falling within the court’s jurisdiction because the SSA appropriated the plaintiff ’s
suggestions and approved an award after submission through a formal awards program. Id. at 557.
This Court is likewise convinced that Mr. Carter has sufficiently pled an implied-in-fact
contract claim due to the Government’s alleged approval of, use of, and agreement to an award for
his Green Project idea, which he submitted through the Ideas for Dollars Program.
3. Whether the Government’s Lack-of-Authority Argument Defeats
Jurisdiction
Previously the court ordered Mr. Carter to plead facts showing what, if any, contractual
authority the various government agents had to bind the United States. Carter, 2018 WL 651369,
16
at *6. Mr. Carter’s Amended Complaint alleges the precise authority Schnaufner, Moon, Moody,
and Laird held under the relevant regulations.
Specifically, the regulation governing the procedure for submitting and reviewing ideas
through the Ideas for Dollars Program provides that inmates shall submit written suggestions to
their “immediate supervisor” who will then “review the suggestion and forward it with comments
and award recommendation to the SOI.” 28 C.F.R. § 345.73(a). Mr. Carter alleges that his
immediate supervisor was Mr. Schnaufner, and the SOI was Mr. Moon. ECF No. 16 ¶ 14. His
proposal was then allegedly considered “by a committee comprised of Industries personnel
designated by the SOI.” 28 C.F.R. § 345.73(b). Under the regulation, the committee “is authorized
to award a cash award up to $100.00.” Id. § 345.73(b)(1). According to the Amended Complaint,
the committee convened included Schnaufner, Moon, and Moody. ECF No. 16 ¶ 15. Mr. Carter
further alleges that Mr. Laird, who has authority to award up to a $1,000, and two other Assistant
Directors directed Mr. Moon to ensure that Mr. Carter was compensated. Id. ¶ 31.
Despite the regulations, the Government contends that this Court lacks jurisdiction over
Mr. Carter’s claim because he has failed to demonstrate that Schnaufner, Moon, Moody, and Laird
had authority to enter into a binding contract. ECF No. 17 at 3–4. As the court previously
indicated, whether Mr. Carter’s allegations, if proven, establish the requisite elements of an
enforceable contract is a matter properly raised under RCFC 12(b)(6), not 12(b)(1). Carter, 2018
WL 651369, at *6; see Gould, 67 F.3d at 930. Moreover, although the Government is correct to
the extent that Mr. Carter has not pled facts showing that any of these agents enjoyed general
contracting authority, the regulations governing the Ideas for Dollars Program provide limited
authority to these agents to give Mr. Carter a cash award for his idea. And as discussed above,
17
prior cases have recognized that such regulatory awards programs can give rise to an implied-in-
fact contract claim under certain circumstances.
The Government also argues that the award limits of the Ideas for Dollars Program are at
odds with Mr. Carter’s allegations. ECF No. 17 at 3–4. The Amended Complaint alleges that
Mr. Carter was offered and accepted compensation “at a rate of 1% of the total savings” resulting
from the Green Project idea, which he alleges is over $500,000. ECF No. 16 ¶¶ 19–20, 45. The
governing regulations similarly provide that cash awards under the Ideas for Dollars Program
“shall be one percent of the net estimated savings during the first year.” 28 C.F.R. § 345.72. The
regulations, however, clearly impose caps on any award. 28 C.F.R. §§ 345.72, 345.73(b)(1).
Based on the facts submitted to the Court, Schnaufner, Moon, Moody, and Laird together had the
authority to grant Mr. Carter a monetary award of only up to $1,000. While this provides factual
basis for Mr. Carter to plead a claim for breach of an implied-in-fact contract, the $1,000 is well
short of the damages he originally alleged. See Compl. ¶ 57.
As a general matter, government agents cannot commit the federal government to implied-
in-fact contracts by agreeing to compensate an individual for an amount above a statutory or
regulatory limit. See Sealey v. United States, 71 Fed. Cl. 278, 282 (2006). In Sealey, two retired
Marines challenged a $25,000 award they received under the Marine Corps’ incentive awards
program for their idea to improve the supply ship loading process. See id. at 279–80. The plaintiffs
claimed that they were entitled to a higher award, notwithstanding governing statutory and
regulatory limits. Id. at 280. Relying on Griffin, the Government argued that the court’s
jurisdiction was limited to claims of up to $25,000 (per the statute’s limit) and thus the court could
not review the plaintiffs’ claim for an award beyond the statutory ceiling. Id. at 281 (citing Griffin,
18
215 Ct. Cl. at 715 n.1). The court in Sealey agreed and, since the plaintiffs had already received
the maximum award, it dismissed their claim. Id. at 282–83.
Here, of course, Mr. Carter has not received the award the Government allegedly promised.
As in Griffin, the $1,000 award limit of the Ideas for Dollars Program does not preclude this
Court’s jurisdiction over Mr. Carter’s contract claim, but it does define the outer limit of his
potential recovery. See Griffin, 215 Ct. Cl. at 715 n.1; see also OAO Corp. v. United States, 17
Cl. Ct. 91, 102–03 (1989) (holding that implied-in-fact contract existed between the Air Force and
contractor for start-up costs, but was limited to the contracting officer’s authority to enter into
agreements up to $250,000). Whether the difference between the unlimited compensation
allegedly promised to Mr. Carter and the limits on the Government’s authority to make awards
under the Ideas for Dollars Program ultimately proves that no contract formed is a question that
can be properly decided at the merits stage. See Mendez, 121 Fed. Cl. at 379.
III. CONCLUSION
Plaintiff has provided this Court with facts that non-frivolously allege an implied-in-fact
contract that may entitle him to an award as high as $1,000. The Government has yet to give the
Court a viable argument that justifies complete dismissal of Mr. Carter’s claims on jurisdictional
grounds. Thus, the Government’s Motion to Dismiss this case for lack of subject matter
jurisdiction is DENIED.
SO ORDERED.
Dated: March 16, 2021 /s/ Kathryn C. Davis
KATHRYN C. DAVIS
Judge
19