Nira Schwartz Woods (Doing Business as Jaffa Optronix) v. United States

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
is not citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
04-5113
NIRA SCHWARTZ WOODS
(doing business as Jaffa Optronix),
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
___________________________
DECIDED: December 8, 2004
___________________________
Before RADER, Circuit Judge, ARCHER, Senior Circuit Judge, and BRYSON, Circuit
Judge.
PER CURIAM.
DECISION
Appellant Nira Schwartz Woods appeals from the judgment of the Court of
Federal Claims dismissing her complaint for lack of subject matter jurisdiction and for
failure to state a claim upon which relief can be granted. Woods v. United States, No.
03-789C (Fed. Cl. Feb. 17, 2004). We affirm.
BACKGROUND
In 1996, Dr. Schwartz (the name by which the appellant refers to herself in the
pleadings in this court and in the Court of Federal Claims) brought a qui tam action on
behalf of herself and the United States in the United States District Court for the Central
District of California under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq. The
complaint alleged that TRW, Inc., and Boeing North America committed fraud in the
process of choosing contractors to develop an Exoatmospheric Kill Vehicle for the
government’s National Missile Defense Program. United States ex rel. Schwartz v.
TRW, Inc., No. CV-96-3065 (C.D. Cal. Apr. 29, 1996). Dr. Schwartz filed a second qui
tam action in the same court in 2001, this time against Raytheon Company. United
States ex rel. Schwartz v. Raytheon Co., No. CV-01-4937 (C.D. Cal. June 4, 2001).
The United States initially declined to intervene in either case, and Dr. Schwartz moved
forward with the litigation on her own. However, the United States eventually moved to
intervene in both cases in order to assert the state secret privilege and to move to
dismiss the FCA claims. The district court granted the government’s motion to
intervene and dismissed both FCA claims. The court, however, allowed Dr. Schwartz’s
wrongful discharge claim against TRW to go forward.
In response to the government’s conduct in the qui tam cases, Dr. Schwartz
initiated the present case in the Court of Federal Claims pro se. Dr. Schwartz alleged
that the government negotiated a settlement with Boeing that it concealed from Dr.
Schwartz, which deprived her of her right to recover from the qui tam litigation. She
also alleged that the government moved to dismiss the TRW litigation because the
government’s cost of litigating the suit would exceed the amount of the settlement offer,
again depriving her of any chance for recovery. Further, Dr. Schwartz alleged that the
failure to pursue the suit against Boeing harmed national security and that the
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government “blackball[ed]” Dr. Schwartz in order to get the qui tam actions dismissed so
as to cover up illegal government activities.
To remedy those abuses, Dr. Schwartz asked the Court of Federal Claims for
several forms of relief. First, she asked for an injunction directing the government to
remove what she referred to as the “fraudulent technologies” being developed by
Boeing and TRW. Second, she asked for damages for the government’s breach of an
implied covenant of good faith and fair dealing and for breach of her rights as relator in
both qui tam actions. Third, she asked for damages for being “black-balled” and for
defamation of character. Fourth, she asked for damages from the government for
endangering national security by permitting what she referred to as false and fraudulent
technology to be used in the National Missile Defense Program. Finally, she asked for
punitive damages.
The court granted the government’s motion to dismiss all claims on February 17,
2004, and entered final judgment on the following day. With regard to the claim of
governmental breach of an implied covenant of good faith and fair dealing, the court
ruled that Dr. Schwartz had not stated a claim upon which relief could be granted. The
court dismissed the rest of the claims for lack of subject matter jurisdiction.
On February 25, 2004, Dr. Schwartz filed a motion for reconsideration. In the
motion, she claimed that she was denied due process because the government did not
file an answer to her complaint, because the court dismissed the suit without giving her
the opportunity to respond, and because the court did not allow her to submit her
response to the government’s motion to dismiss on a compact disk. Additionally, Dr.
Schwartz argued that the court erred in dismissing her claims for lack of jurisdiction and
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for failure to state a claim upon which relief could be granted. The court denied the
motion for reconsideration.
Dr. Schwartz filed a second motion for reconsideration on March 31, 2004. In
that motion, she argued that the Court of Federal Claims erred by not taking into
consideration an earlier ruling by the district court in the TRW case. The Court of
Federal Claims held that the second reconsideration motion was untimely and that even
if the motion had been timely, the district court’s ruling in TRW would have had no effect
on the court’s dismissal order.
DISCUSSION
On appeal, Dr. Schwartz argues that the Court of Federal Claims was wrong in
ruling that it did not have subject matter jurisdiction over several of her claims.
Specifically, she contends that the court had jurisdiction to hear the claims for damages
from the government’s black-balling and defamation, for punitive damages, and for
damages from the government’s endangerment of national security. In doing so, Dr.
Schwartz confuses the evidentiary burden needed to prove each cause of action with
the requirement for subject matter jurisdiction. The Court of Federal Claims is a court of
limited jurisdiction, and claims sounding in tort, such as defamation, are outside the
jurisdiction of the court. Berdick v. United States, 612 F.2d 533, 536 (Ct. Cl. 1979).
Moreover, Dr. Schwartz’s claim against the government for endangering national
security by permitting fraudulent technology to be used in the Nation Missile Defense
Program is directly tied to the qui tam actions in district court, and the Court of Federal
Claims has no jurisdiction to adjudicate substantive issues arising under the FCA.
LeBlanc v. United States, 50 F.3d 1025, 1031 (Fed. Cir. 1995). And even if the trial
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court had jurisdiction over any of her asserted claims, it would not have had the power
to grant punitive damages, as she requested. Vincin v. United States, 468 F.2d 930,
932 (Ct. Cl. 1972). Thus, regardless of what evidence Dr. Schwartz may have, the
Court of Federal Claims is not the proper forum to press those claims.
Dr. Schwartz next argues that the trial court should not have dismissed her claim
against the government for breach of an implied covenant of good faith and fair dealing.
She claims that the court erred in requiring that she demonstrate the existence of a
contract with the government in order for that claim to go forward. Rather, she states
that the filing of a qui tam action creates an implied contract with the government under
which the government is bound by a covenant of good faith and fair dealing. Any such
implied contract, however, does not arise from “a meeting of the minds,” but arises only
from an imputed promise to perform a legal duty. See Hercules, Inc. v. United States,
516 U.S. 417, 424 (1996). As such, it is a contract implied in law and cannot form the
basis for jurisdiction in the Court of Federal Claims under 28 U.S.C. §1491(a)(1).
Trauma Service Group v. United States, 104 F.3d 1321, 1324 (Fed. Cir. 1997).
Dr. Schwartz also argues that the Court of Federal Claims abused its discretion
in denying her second motion for reconsideration because the district court’s grant of
partial summary judgment in TRW directly impacted the present case. That argument
fails for several reasons. First, as the trial court noted, the second motion for
reconsideration was untimely because it was filed more then ten days after the court’s
final judgment on February 18, 2004. Rules of the Court of Federal Claims 59(b).
Moreover, as the trial court also ruled, even if the motion had been timely, Dr. Schwartz
did not show how the district court’s grant of partial summary judgment was relevant to
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the present case. Dr. Schwartz suggests that the district court’s ruling somehow binds
the government to pay her $1.6 million. The district court’s ruling, however, does no
such thing. It states only that the plaintiff has admitted in the wrongful termination suit
against TRW that there are other sources of income the plaintiff could have received
during the relevant time period. We agree with the trial court that this finding does not
appear to be material to this case.
Finally, we have examined Dr. Schwartz’s contentions that she was denied due
process by the Court of Federal Claims, and we find those contentions to be entirely
without merit.
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