B & B Trucking, Inc. v. U.S.P.S.
| Decision Date | 02 April 2004 |
| Docket Number | No. 02-1562.,02-1562. |
| Citation | 363 F.3d 404 |
| Parties | B & B TRUCKING, INC.; Causley Trucking, Inc.; Cliff Blackburn; Fedrizzi, Inc.; Foreman Bros., Inc.; George E. Campbell and Sons, Inc.; L.R. Vincent Truck and Service, Inc.; M.C. Eipperle, Inc.; Massman Trucking, Inc.; P-D Trucking, Inc.; Robert M. Neff, Inc.; Roth Trucking, Inc.; Royster Enterprises, Inc.; Sodrel Truck Lines, Inc.; Taylor Postal Contracting, Inc.; National Star Route Mail Contractors Association; B & B Industries, Inc.; B & T Mail Services, Inc.; Sheehy Mail Contractors, Inc., Plaintiffs-Appellants, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Sharon Ambrosia-Walt (argued and briefed), Houger & Walt, Seattle, WA, Larry J. Saylor, Frederick A. Acomb (briefed), Miller, Canfield, Paddock & Stone, P.L.C., Detroit, MI, for Appellants.
Sheila H. Gaskell (argued and briefed), Assistant United States Attorney, Detroit, MI, for Appellee.
Before CLAY and COOK, Circuit Judges; STAFFORD, District Judge.*
CLAY, J., delivered the opinion of the court, in which STAFFORD, D.J., joined. COOK, J. (pp. 424-27), delivered a separate dissenting opinion.
Plaintiffs, B & B Trucking, Inc., et al., appeal from the order of the United States District Court for the Eastern District of Michigan, entered on January 30, 2002, granting the motion of Defendant, United States Postal Service ("USPS"), to dismiss for lack of subject matter jurisdiction, in this action asserting constitutional rights and rights allegedly established by postal regulations. For the reasons set forth below, we REVERSE the district court on all claims, except for the claim for performance of the HCR contracts.
On August 6, 2001, Plaintiffs filed suit to enjoin the USPS from demanding that Plaintiffs, as motor carriers, begin complying with the USPS' national fuel program. Defendant filed a motion to dismiss on grounds that the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 divested the district court of jurisdiction. After hearing oral argument on December 12, 2001, the district court held its ruling in abeyance, to allow Plaintiffs to amend their filings.
On January 9, 2002, Plaintiffs filed a second amended complaint, seeking declaratory and injunctive relief for (1) violation of Plaintiffs' Fifth Amendment rights, (2) violation of postal regulations, and (3) violation of the due process clause by arbitrary agency action without statutory authority.
The district court issued an order, entered on January 30, 2002, granting the motion of Defendant to dismiss for lack of subject matter jurisdiction. On April 1, 2002, the district court issued an order denying Plaintiffs' motion for reconsideration, and Plaintiffs filed a timely appeal.
Plaintiffs are independent contractors who transport the mail on highways for Defendant. Plaintiffs have fixed-rate contracts: the rate that Defendant pays Plaintiffs is determined with reference to Plaintiffs' annual estimates of the cost and amount of fuel that will be needed in transporting the mail. If fuel costs increase during the life of a contract, rendering inaccurate the estimates upon which the contract payments were determined, then Plaintiffs have the contractual right to request an adjustment in the contract price. Per Clause B-65 of the contract, Defendant's contracting officer must accede to a request for an increase in price for it to take effect. Because the fuel prices that Plaintiffs pay are passed on to Defendant in pre-contract estimates and potentially in requests that are granted for adjustments during the life of the contracts, Defendant has an incentive to find methods of limiting Plaintiffs' fuel costs.
To reduce Plaintiffs' fuel costs, Defendant entered into fuel supply contracts with fuel manufacturers Exxon-Mobil and BP Amoco. These contracts are referred to by Plaintiffs as "Exxon contracts." Plaintiffs characterize the Exxon contracts as granting Exxon-Mobil and BP Amoco exclusivity: "[t]he Exxon contracts grant Exxon-Mobil the right to be the sole fuel supplier throughout the eastern seaboard region and central region ... and the right to BP Amoco to be the sole fuel supplier in the central, midwestern and western regions of the United States...." (Petitioners' Br. at 9.) The Exxon contracts designate the material terms of the sale of fuel, including price, fuel grade and quality, quantity, and timing.
In addition, the contracts give Exxon-Mobil and BP Amoco the right to enter certain properties to supply fuel: "[t]he Exxon contracts identify the motor carriers with bulk fuel tanks within the specific geographic location and designate them as `fuel sites' to which the sale and delivery of fuel will be made." (Petitioners' Br. at 9.) This provision appears to give Exxon-Mobil and BP Amoco the right to enter certain Plaintiffs' land to fill certain fuel tanks, since some or all of Plaintiffs have installed their own private "bulk fuel tanks (tanks that are used not just for mail transportation but for all their business needs and that were installed, on their own property, at their expense, and not pursuant to any terms of a USPS contract)." (Petitioners' Br. at 20-21.)
None of Plaintiffs were privy to the Exxon contracts, and none of Plaintiffs were consulted regarding the terms of these contracts. Plaintiffs' original contracts with the USPS did not contain terms governing the choice of fuel suppliers. The fuel-cost-reduction program was expanded to reach Plaintiffs through implementation of the Bulk Fuel Purchase Plan, which, in Defendant's view — through Amendment 3 to Defendant's contracts with Plaintiffs — requires mail transporters to purchase fuel from Exxon-Mobil and BP Amoco. Some but not all of Plaintiffs agreed to Amendment 3 to contracts with the USPS, without overt pressure from the USPS. Then, at some point, those Plaintiffs whose contracts did not yet contain Amendment 3 were pushed to adopt the amendment, inasmuch as they were "flatly told that [their] contracts would not be renewed without the clause." (J.A. at 394) (affidavit of an officer of one of Plaintiffs).
Compliance with the Exxon contracts was problematic for Plaintiffs. Arguably, arranging for their own fuel supply for their vehicles had allowed Plaintiffs to meet their fuel needs most effectively, altering the fuel supplied to their own trucks to reflect climate, terrain, road, and truck-specific conditions and variables. Some or all of Plaintiffs had installed their own fuel tanks at their own expense, as part of the endeavor of arranging for their own fuel supply. The Exxon contracts gave control to Exxon-Mobil and BP Amoco over the fuel to be supplied to these tanks and the pricing of the fuel.
The only issue before this Court is whether the district court properly dismissed for lack of subject matter jurisdiction. A dismissal for lack of subject matter jurisdiction is reviewed de novo, with the plaintiff bearing the burden of establishing jurisdiction and the court taking the allegations in the complaint as true. Nichols v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir.2003). See also Green v. Ameritech Corp., 200 F.3d 967, 972 (6th Cir. 2000) ().
There are two steps to the analysis, each of which is briefly summarized here. The first step is to place this case within the framework of the applicable larger jurisdictional issues and to set forth the appropriate legal standard. Where, as here, the government is the defendant, the Contract Disputes Act bars a district court from exercising jurisdiction over any individual claim that is contractual, when evaluated by the source of the rights claimed and the relief sought (or appropriate). Case law clearly establishes that claims are not necessarily rendered contractual by the presence of a contractual relationship between the parties. In two prominent cases, there was a contractual relationship between plaintiffs and defendants, but nonetheless the claims were held to be non-contractual. Commercial Drapery Contractors, Inc. v. United States, 133 F.3d 1, 3-4 (D.C.Cir.1998); Megapulse, Inc. v. Lewis, 672 F.2d 959, 961-62, 968-69 (D.C.Cir.1982).
The second step is to determine whether the standard for jurisdiction is satisfied. In the present case, much of the determination as to whether the standard is met depends on the relevance of Defendant's arguments that Plaintiffs contractually waived the rights that they assert. Here, it is important to note that the applicable test (as set forth and as clarified in case law) is similar to the well-pleaded complaint rule (which governs the more general jurisdictional issue of whether there is federal question jurisdiction, under 28 U.S.C. § 1331). Under the Contract Disputes Act, the relevant question is whether a claim (measured by the rights claimed and the proper relief) would appear to be contractual on the face of a well-pleaded complaint. As with the well-pleaded complaint rule, the substance of a defense is irrelevant — a well-taken contractual rebuttal argument has no bearing on jurisdiction, if the issue would not appear in a — well-pleaded complaint. Applying these principles, the district court had jurisdiction over all claims, except for the claim for enforcement of the HCR contracts.
Plaintiffs contend, and Defendant does not contest, that if sovereign immunity has been waived, then the district court would have jurisdiction over the claims in this case. Plaintiffs argue that absent sovereign immunity, the district courts would have jurisdiction through at least one of three independent grants of jurisdiction, each of which would be sufficient. First, Plaintiffs cite the Postal Reorganization Act, 39 U.S.C. § 401 et seq., whose...
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B & B Trucking, Inc. v. U.S. Postal Service
...claims in the context of a contract dispute.") (internal punctuation and citation omitted); see also B & B Trucking v. USPS, 363 F.3d 404, 425 (6th Cir.2004) (Op. of Cook, J., dissenting) (citing many of these and other such cases). But see Rossello-Gonzalez v. Calderon-Serra, 398 F.3d 1, 1......
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