United States Court of Appeals, District of Columbia Circuit
February 14, 2014
ROXANN J. FRANKLIN-MASON, APPELLANT
RAYMOND EDWIN MABUS, JR., SECRETARY, DEPARTMENT OF THE NAVY, APPELLEE
Argued September 26, 2013.
Appeal from the United States District Court for the District of Columbia. (No. 1:96-cv-02505).
Lisa Alexis Jones argued the cause and filed the briefs for appellant.
Alan Burch, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Ronald C. Machen, Jr., U.S. Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.
Before: BROWN and KAVANAUGH, Circuit Judges, and WILLIAMS, Senior Circuit Judge.
Brown, Circuit Judge:
This case has so many chapters it makes War and Peace look like a short story. And the saga continues. Fifteen years ago, after Franklin-Mason prevailed in the initial stages of this employment discrimination litigation, the Navy offered a stipulation of Settlement (Settlement Agreement or the Agreement). The Agreement proposed not only reinstatement, restoration of seniority, and retirement credits, but potential for promotion. A key provision anticipated the creation of a Naval Fleet Auxiliary Force (NFAF) Program (PM1), headed by a high level Financial Manager, and proposed to appoint Franklin-Mason as a Senior Financial Analyst, reporting to the Manager of this independent unit. The Agreement also purported to insulate Franklin-Mason from working directly for, or being supervised by, certain employees in the Comptroller's Office who had tormented her in the past. The new unit was never approved. Things fell apart.
Franklin-Mason, convinced she had been deliberately hoodwinked, repeatedly sought to have the terms of the Agreement--terms incorporated into the district court's order of dismissal--enforced. Now, having concluded specific performance is no longer practicable, Franklin-Mason seeks nearly a million dollars in damages and attorney's fees. The Navy pounces on this shift. First, the Navy notes a federal court cannot provide a damages remedy for the government's breach of a settlement agreement absent a waiver of sovereign immunity. Check. Second, a judicial consent decree--like the Settlement Agreement here--is not a contract for purposes of the Tucker Act and falls outside the jurisdiction of the Court of Federal Claims. And mate. Thus, the Navy reasons the government's breach of a court-supervised settlement is a wrong without a remedy. We are not convinced. We hold a settlement agreement embodied in a consent decree is a contract under the
Tucker Act and transfer the case to the Court of Federal Claims.
The tortuous history of this decades-long dispute could fill library shelves, but in the interest of brevity, we commence with a bare-bones procedural pré cis. From 1987 to 1996, Franklin-Mason litigated her Title VII claim before the Equal Employment Opportunity Commission. In 1996, the Administrative Judge (AJ) found Franklin-Mason had established, by a preponderance of the evidence, that the Navy had unlawfully discriminated against her on the basis of race and sex. The Navy disagreed, rejecting the AJ's findings.
Undeterred, Franklin-Mason filed suit against the Navy on October 31, 1996, alleging violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e. The Navy, eager to avoid substantial potential liability, offered a settlement. The matter was referred to a magistrate for settlement discussions, and ultimately, the parties settled and the district court approved the Agreement and entered an order of dismissal. Of particular relevance, the Agreement explicitly permitted a party to seek judicial enforcement and monetary damages for a breach. Franklin-Mason filed three motions to enforce the terms of the Settlement Agreement. Those efforts proved fruitless, however, and on November 19, 2001, she moved, for a fourth time, to enforce the terms of the Agreement. The present dispute arises from this fourth attempt.
The motion was again transferred to the magistrate for a Report and Recommendation. After concluding there were genuine issues of material fact as to two of Franklin-Mason's claims, Franklin-Mason v. England, No. Civ.A. 96-2505JMF, 2005 WL 1804426, at *1 (D.D.C. Aug. 1, 2005), the magistrate scheduled an evidentiary hearing, but in the interim, Franklin-Mason resigned from her position with the Navy--allegedly constructively discharged because of the Navy's failure to abide by the terms of the Agreement. During the hearing, Franklin-Mason asserted that, given the passage of time and her separation from the Navy, she could no longer pursue specific performance, but would instead seek to recover approximately $900,000 in expectation damages and attorney's fees. This prompted the magistrate to request supplemental briefing on whether jurisdiction properly lay in the district court or the Court of Federal Claims. In a rare moment of concord, both parties agreed that, although the Agreement ought be construed as a contract under the Tucker Act, pursuant to Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994), the district court could exercise ancillary jurisdiction over the motion to enforce. The magistrate decided the district court should retain jurisdiction, but concluded that, although there may have been a substantial breach of the Settlement Agreement, Franklin-Mason was entitled only to nominal damages.
Three years after the magistrate issued his order, Judge Roberts rejected the recommendation to retain jurisdiction and transferred the case to the Court of Federal Claims. Upon transfer, Franklin-Mason lodged with the Court of Federal Claims an Amended Complaint, alleging breach of the Settlement Agreement and attempting to revive the employment discrimination claims the Agreement had extinguished. The Court of Federal Claims concluded it lacked jurisdiction over the newly filed Amended Complaint since district courts have exclusive jurisdiction over employment discrimination claims. And relying on Kokkonen, the court held the retention of jurisdiction provision in the
Agreement divested the Court of Federal Claims of jurisdiction and compelled transfer back to the district court.
Considering this motion for the fourth time, Judge Roberts dismissed the employment discrimination claims, noting they were resolved by the Agreement. Recognizing, too, the conflicting opinions issued by the courts, he denied Franklin-Mason's motion to enforce, positioning the case for our consideration. On February 23, 2012, Franklin-Mason filed a timely appeal. Today, following decades of litigation, a veritable decathlon of delay, and the ensuing rounds of jurisdictional ping-pong, we regretfully lob the ball back to the Court of Federal Claims.
We are presented with two questions. First, has the United States waived its sovereign immunity in the district court for breach of a Title VII settlement agreement seeking damages in excess of $10,000? And, if not, does Kokkonen allow us to ignore this lack of waiver? Second, if the district court lacks jurisdiction, does a settlement agreement embodied in a judicial consent decree foreclose jurisdiction by the Court of Federal Claims? We review de novo a district court's order dismissing a motion to enforce for lack of subject matter jurisdiction. See Gen. Elec. Co. v. EPA, 360 F.3d 188, 190-91, 360 U.S. App. D.C. 275 (D.C. Cir. 2004).
To bring a claim against the United States, a plaintiff must identify an unequivocal waiver of sovereign immunity. FAA v. Cooper, 132 S.Ct. 1441, 1448, 182 L.Ed.2d 497 (2012). Courts are required to read waivers of sovereign immunity narrowly and construe any ambiguities in the statutory language in favor of immunity. Id. But " [e]ven when suits are authorized[,] they must be brought only in designated courts." United States v. Shaw, 309 U.S. 495, 501, 60 S.Ct. 659, 84 L.Ed. 888 (1940). This is because " it rests with Congress to determine not only whether the United States may be sued, but in what courts the suit may be brought." Minnesota v. United States, 305 U.S. 382, 388, 59 S.Ct. 292, 83 L.Ed. 235 (1939).
Both sides agree Title VII does not provide a waiver of sovereign immunity for suits alleging breach of a settlement agreement. And invoking the Tucker Act is a non sequitur because where, as here, a suit involves a claim for money damages over $10,000, the Act waives the government's sovereign immunity only in the Court of Federal Claims. See Greenhill v. Spellings, 482 F.3d 569, 572, 375 U.S. App. D.C. 477 (D.C. Cir. 2007)
(" [T]he jurisdiction of the Court of Federal Claims is exclusive when a plaintiff seeks more than $10,000 in damages.); see also 28 U.S.C. § 1346(a)(2).
We have construed the Tucker Act and Little Tucker Act--so called for its grant of concurrent jurisdiction to the district courts and the Court of Federal Claims in any civil action against the United States not exceeding $10,000--to provide for exclusive jurisdiction in the Court of Federal Claims for contract disputes seeking more than $10,000 in damages. But, admittedly, " nothing in the language of the Tucker Act makes its grant of jurisdiction to the Court of Federal Claims exclusive for all contract claims over $10,000." Tritz v. U.S. Postal Serv., 721 F.3d 1133, 1137 (9th Cir. 2013); see also Waters v. Rumsfeld, 320 F.3d 265, 270 n.6, 355 U.S. App. D.C. 137 (D.C. Cir. 2003). " Rather, that court's jurisdiction is 'exclusive' only to the extent that Congress has not granted any other court authority to hear the claims that may be decided by the Claims Court." Bowen v. Massachusetts, 487 U.S. 879, 910 n.48, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). Said differently, while the Tucker Act and Little Tucker Act " create a presumption of exclusive jurisdiction in the Court of Federal Claims,... that presumption can be overcome by an independent statutory grant to another court." Tritz, 721 F.3d at 1137; see also Auction Co. of Am. v. FDIC, 132 F.3d 746, 753 n.4, 328 U.S. App. D.C. 45 (D.C. Cir. 1997) (" If a separate waiver of sovereign immunity and grant of jurisdiction exist, district courts may hear cases over which, under the Tucker Act alone, the Court of Federal Claims would have exclusive jurisdiction." ). In any event, Franklin-Mason identifies no such independent statutory grant of authority.
Franklin-Mason insists, however, the Supreme Court in Kokkonen carved out an exception to the Tucker Act's exclusive jurisdiction. She is mistaken. In Kokkonen, the Supreme Court clarified the power of district courts to exercise jurisdiction over settlement agreements. The Court indicated in dicta, Kokkonen, 511 U.S. at 381, that a federal district court retains jurisdiction to enforce a settlement agreement if it either incorporates the settlement agreement into the dismissal order or specifically includes a clause in the dismissal order retaining jurisdiction. Id. Here, both steps were taken, but this is not enough.
Kokkonen is easily distinguishable because, unlike here, no governmental entity was involved. To permit the logic of Kokkonen to reduce the scope of the Court of Federal Claims' jurisdiction would be to violate the time-honored rule that neither a court nor the parties has the power to alter a federal court's statutory grant of subject matter jurisdiction. See, e.g., Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 818, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (" [A] court may not in any case, even in the interest of justice, extend its jurisdiction where none exists...." ); Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) (" [N]o action of the parties can confer subject-matter jurisdiction upon a federal court. Thus, the consent of the parties is irrelevant...." ); accord Akinseye v. Dist. of Columbia, 339 F.3d 970, 971, 358 U.S. App. D.C. 56 (D.C. Cir. 2003) (same).
Notwithstanding the clear import of these cases, Franklin-Mason argues that the specific reservation of enforcement jurisdiction by another court can divest the Court of Federal Claims of jurisdiction. She is wrong. Similarly misplaced is her reliance on this Court's dicta in Shaffer v. Veneman, 325 F.3d 370, 372-74, 355 U.S. App. D.C. 470 (D.C. Cir. 2003), which suggested a willingness to exercise ancillary jurisdiction over contract
disputes within the exclusive jurisdiction of the Court of Federal Claims. But there, we identified only a necessary condition for a district court's retention of ancillary jurisdiction, not a sufficient one. See Shaffer, 325 F.3d at 373-74 (noting Shaffer's failure to request that the district court retain jurisdiction in its order of dismissal).
For the foregoing reasons, we hold that the Tucker Act does not contain a waiver of sovereign immunity in the district court for breach of a Title VII settlement agreement seeking damages in excess of $10,000. Nor does the holding in Kokkonen compel a different conclusion.
Franklin-Mason has not asked that we consider, in the alternative, a transfer to the Court of Federal Claims. Nevertheless, we must, " if it is in the interest of justice, transfer [an] action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed." 28 U.S.C § 1631. The threshold question, therefore, is whether the present suit might have been brought in the Court of Federal
Claims. The Navy argues not only is jurisdiction preempted in district court, but the nature of the suit forecloses jurisdiction in the Court of Federal Claims, too. The second prong of its heads-I-win-tails-you-lose strategy contends that a judicial consent decree is not a contract for purposes of the Tucker Act and, therefore, outside the subject matter jurisdiction of the Court of Federal Claims. We disagree.
Though the matter appears to be one of first impression in this circuit, it is, thankfully, not without close analogues in other courts. In VanDesande v. United States, 673 F.3d 1342 (Fed. Cir. 2012), the Federal Circuit held that " consent decrees and settlement agreements are not necessarily mutually exclusive, id. at 1350, and, therefore, " a settlement agreement, even one embodied in a decree, 'is a contract within meaning of the Tucker Act.'" Id. at 1351 (quoting Angle v. United States, 709 F.2d 570, 573 (9th Cir. 1983)). Accordingly, it stands to reason that the Court of Federal Claims is a court in which the motion to enforce " could have been brought." 28 U.S.C. § 1631. With scarcely a perfunctory nod to VanDesande, the Navy, in a lone footnote, attempts to distinguish the case by noting the settlement in VanDesande " took the form of an administrative judge's proposed order--not a court order." Appellee's Br. at 23. But this is a distinction without a difference and is made all the more irrelevant given the Federal Circuit's dicta that " settlement agreements, even if they are incorporated into judicial or administrative consent decrees, should be viewed for enforcement purposes as having the attributes of a contract." VanDesande, 673 F.3d at 1350 (emphasis added).
The Navy's other arguments, hardly a model of clarity, are similarly inapposite. First, the Navy argues " Kokkonen illustrates the Supreme Court's distinction between an out-of-court settlement--which is equivalent to a contract--and a consent decree." Appellee's Br. at 23. This is correct, so far as it goes. But this distinction is relevant only to a court's ability to retain ancillary jurisdiction over a settlement agreement, see Kokkonen, 511 U.S. at 381-82, not a determination whether consent decrees are contracts under the Tucker Act. Second, the Navy's appeal to Federal Rules of Civil Procedure 41(a)(2) and 65(d)(1) is tautological. We are interested not in discerning the dividing line between " a court order that merely approves a settlement and one that expressly incorporates its terms into a contract," Appellee's Br. at 24, but, rather, whether the latter can ever be treated as a contract. On this query, the Rules are silent. Lastly, the Navy seeks refuge in a host of distinguishable Supreme Court precedent. Most notably, the Navy cites Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992) and United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932) for the proposition that consent decrees are viewed as judicial acts for purpose of modification and enforcement. But the Rufo court expressly limited its holding to " consent decrees stemming from institutional reform litigation,"
502 U.S. at 393, and the Court's determination in Swift that consent decrees should not be treated as a contract was dicta. See 286 U.S. at 115. Moreover, in relying on these decisions the Navy misses the point. The Supreme Court, in a long line of cases, has since clarified that consent decrees and settlement agreements are not, as a matter of law, mutually exclusive. See Local No. 93, Int'l Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 519, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986) (" The question is not whether we can label a consent decree as a 'contract' or a 'judgment,' for we can do both." ); see also United States v. ITT Cont'l Banking Co., 420 U.S. 223, 236-237 n.10, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975) (" Consent decrees and orders have attributes both of contracts and of judicial decrees...." ); see id. at 236-37 (citing Hughes v. United States, 342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394 (1952), United States v. A. Ref. Co., 360 U.S. 19, 79 S.Ct. 944, 3 L.Ed.2d 1054 (1959), and United States v. Armour & Co., 402 U.S. 673, 91 S.Ct. 1752, 29 L.Ed.2d 256 (1971) for the proposition that " since consent decrees and orders have many of the same attributes of ordinary contracts, they should be construed basically as contracts" ). The Navy thus fails to establish the motion to enforce could not have been brought in the Court of Federal Claims.
We conclude the Court of Federal Claims has jurisdiction over Franklin-Mason's motion to enforce, though, given the wearied and stale nature of this dispute, we are loath to extend its shelf life and retransfer without a sense of finality. But while messy realities often threaten to confound the boundaries of received legal doctrine, within the boundaries we shall remain. The district court's order dismissing the motion to enforce is vacated, and we remand the case with instructions to transfer to the Court of Federal Claims. As previously noted, we affirm the district court's dismissal of the employment discrimination claims.