Kam–Almaz v. United States

• Decision Date: 20 June 2012
• Docket Number: No. 2011–5059.,2011–5059.
• Citation: 682 F.3d 1364
• Parties: Majd KAM–ALMAZ, Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

682 F.3d 1364

Majd KAM–ALMAZ, Plaintiff–Appellant,

v.UNITED STATES, Defendant–Appellee.

No. 2011–5059.

United States Court of Appeals,

Federal Circuit.

June 20, 2012.

Matthew J. Dowd, Wiley Rein LLP, of Washington, DC, argued for plaintiff-appellant. Of counsel on the brief was Bruce W. McLaughlin, Law Offices of Bruce McLaughlin, of Leesburg, VA.

Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Tony West, Assistant Attorney General, Patricia M. McCarthy, Assistant Director, and Sarah A. Murray, Trial Attorney.

Amjad M. Khan, Latham & Watkins LLP, of Los Angeles, CA, for amicus curiae. With him on the brief were Abid Riaz Qureshi, of Washington, DC, Ghaith Mahmood, of Los Angeles, CA, and Yusuf Zakir, of Costa Mesa, CA.

Before NEWMAN, LOURIE, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge LOURIE.

Dissenting opinion filed by Circuit Judge NEWMAN.

LOURIE, Circuit Judge.

Majd Kam–Almaz appeals from the final decision of the United States Court of Federal Claims dismissing his breach of contract and Fifth Amendment taking claims. We affirm.

Background

Kam–Almaz alleged the following facts in his pleadings before the Court of Federal Claims. See Compl., Jan. 5, 2009, ECF No. 1; Am. Compl., Jan. 25, 2010, ECF No. 23. Kam–Almaz is a United States citizen employed in the business of international disaster relief assistance. On April 7, 2006, Kam–Almaz returned home from an overseas business trip. At Dulles International Airport in Loudoun County, Virginia, Agent Craig Muldowan of the United States Immigration and Customs Enforcement (“ICE”) detained Kam–Almaz, informing him that he was a “person of interest to ICE.” Compl. ¶ 8. Muldowan seized Kam–Almaz's laptop and two flash drives for review by ICE. Before Muldowan seized the equipment, however, Kam–Almaz informed him that it contained the only copies of his business files; in response, Muldowan permitted Kam–Almaz to copy and retain one computer file. Upon seizing the equipment, Muldowan provided to Kam–Almaz a signed Customs Form 6051D indicating that the equipment would be detained for up to thirty days. Muldowan also verbally assured Kam–Almaz that the equipment would be held for no more than seven days.

While the laptop was detained, its hard drive failed, destroying much of Kam–Almaz's business software. On May 15, 2006, a representative from the U.S. Customs and Border Protection (“Customs”) sent Kam–Almaz a letter seeking to assure him that a prompt resolution of the issue would be addressed by Muldowan. On June 21, 2006, about ten weeks after its seizure, the laptop was returned to Kam–Almaz. On June 24, 2006, the Director of Investigations for ICE sent Kam–Almaz a letter representing that “ICE has made every attempt to minimize the inconvenience to [Kam–Almaz]. ICE copied the files and provided them to Mr. Kam–Almaz during the initial border stop.” Compl. ¶¶ 18–19.

On January 5, 2009, Kam–Almaz filed suit in the Court of Federal Claims, alleging breach of an implied-in-fact contract. On January 25, 2010, he amended his complaint and included a takings claim. Kam–Almaz alleged damages totaling $469,480.00 due to lost business contracts resulting from his inability to access his computer files as well as replacement hardware, software, and warranty costs. On June 30, 2010, the government moved to dismiss, arguing that the Court of Federal Claims lacked jurisdiction over Kam–Almaz's complaint, and that the complaint failed to state a claim upon which relief could be granted.

In a decision dated January 7, 2011, the Court of Federal Claims granted the government's motion to dismiss. Kam–Almaz v. United States, 96 Fed.Cl. 84, 86 (2011). On the breach of contract claim, the court dismissed under Rule 12(b)(6) of the United States Court of Federal Claims (“RCFC 12(b)(6)”) for failure to state a claim upon which relief can be granted. The court held that the complaint failed in several respects to allege facts sufficient to find a bailment contract. The court found that, because the complaint stated that his property was seized, Kam–Almaz did not “deliver[ ] personalty” to the government as a bailment requires. Id. at 88. The court further found that the complaint failed to allege that the government promised to return the computer in accordance with Kam–Almaz's instructions or to guard or carefully handle the equipment. Again focusing on the fact that the complaint described the government's act as a “seizure,” the court found that the complaint failed to allege facts demonstrating the required mutuality of intent between the parties. Finally, the court held that the complaint lacked the necessary allegations of Muldowan's authority to enter into a bailment contract.

The Court of Federal Claims also dismissed Kam–Almaz's takings claim under RCFC 12(b)(6). The court explained that property seized and retained pursuant to the government's police power is not taken for a public use within the context of the Fifth Amendment's Takings Clause. Noting that border agents do not have authority to seize property without having reasonable cause to suspect a violation of law, the court rejected Kam–Almaz's theory that the laptop was seized, not according to the police power, but according to an administrative border search for security purposes. The court further explained that, if the seizure was unauthorized, then the Court of Federal Claims would lack jurisdiction, because due process and Fourth Amendment claims are reserved for district courts. Finally, the court held that even assuming the government's actions were authorized and that an unreasonable delay in returning the property amounted to a taking, the court lacks jurisdiction over damage claims for due process violations.

Kam–Almaz appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

Discussion

To avoid dismissal for failure to state a claim under RCFC 12(b)(6), “a complaint must allege facts ‘plausibly suggesting (not merely consistent with)’ a showing of entitlement to relief.” Acceptance Ins. Cos., Inc. v. United States, 583 F.3d 849, 853 (Fed.Cir.2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The facts as alleged “must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citations omitted). At the same time, a court is “ ‘not bound to accept as true a legal conclusion couched as a factual allegation.’ ” Id. (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). We review de novo a decision to dismiss a complaint for failure to state a claim under RCFC 12(b)(6). Hearts Bluff Game Ranch, Inc. v. United States, 669 F.3d 1326, 1328 (Fed.Cir.2012). We also review de novo the grant or denial of a motion to dismiss for lack of jurisdiction. See Frazer v. United States, 288 F.3d 1347, 1351 (Fed.Cir.2002).

I

We first address Kam–Almaz's claim for breach of an implied-in-fact bailment contract. “An implied-in-fact contract with the government requires proof of (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 v. United States, 316 F.3d 1325, 1328 (Fed.Cir.2003) (internal quotation marks omitted). An implied-in-fact contract is founded upon a meeting of the minds and “ ‘is inferred, as a fact, from the conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.’ ” Id. (quoting Balt. & Ohio R.R. v. United States, 261 U.S. 592, 597, 58 Ct.Cl. 709, 43 S.Ct. 425, 67 L.Ed. 816 (1923)). “A bailment relationship is said to arise where an owner, while retaining title, delivers personalty to another for some particular purpose upon an express or implied contract. The relationship includes a return of the goods to the owner or a subsequent disposition in accordance with his instructions.” Lionberger v. United States, 371 F.2d 831, 840 (Ct.Cl.1967); see also19 Williston on Contracts § 53:1 (4th ed. 2012) (defining a bailment as “a delivery of personalty for some particular purpose, or on mere deposit, upon a contract, express or implied, that after the purpose has been fulfilled it shall be redelivered to the person who delivered it, or otherwise dealt with according to his directions, or kept until he reclaims it, as the case may be.” (international quotation marks omitted)). Kam–Almaz, as the plaintiff, bears the burden of proving the existence of an implied-in-fact contract. See Hanlin v. United States, 316 F.3d 1325, 1330 (Fed.Cir.2003).

Kam–Almaz contends that the Court of Federal Claims erred by concluding that his complaint failed to allege facts sufficient to assert a plausible claim for breach of an implied bailment contract. Kam–Almaz asserts that his complaint plausibly alleges a bailment because Kam–Almaz “delivered personalty” by transferring possession of his laptop to ICE, and because his computer was expected to be held only for a short period of time and then returned in working condition. Kam–Almaz further contends that his complaint plausibly alleges a breach of an implied-in-fact contract because the facts alleged demonstrate (1) mutuality of intent to contract, (2) a negotiation demonstrating offer, acceptance, and consideration, and (3) actual authority of Muldowan to bind the United States in contract. Finally, he contends that Supreme Court and Federal Circuit cases recognize that a party in Kam–Almaz's shoes may be able to establish a breach of an implied contract when property temporarily detained by the government is damaged.

The government, in response, contends that the Court of...