Coffey v. US on Behalf of Commodity Credit Corp.
| Decision Date | 29 January 1986 |
| Docket Number | No. 84-1169.,84-1169. |
| Parties | Richard H. COFFEY, Plaintiff, v. UNITED STATES of America on Behalf of COMMODITY CREDIT CORPORATION, Defendant. |
| Court | U.S. District Court — District of Kansas |
Kathleen M. Boelte, Boelte & Boelte, Sublette, Kan., for plaintiff.
Benjamin L. Burgess, Jr., U.S. Atty., Sharon A. Werner, Asst. U.S. Atty., Wichita, Kan., for defendant.
The case is before the court on defendant's motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim for which relief can be granted. The cause of action arises from a grain sale in which plaintiff transferred milo to defendant in exchange for the discharge of a farm loan held by defendant.
Plaintiff alleges that defendant offered a Payment-in-Kind (PIK) program "to encourage the redemption of outstanding corn, sorghum, and wheat loans." (Amended Complaint, Exh. 1). As to the procedures, plaintiff alleges defendant calculated and inserted the total bushels (23,360) on the bid sheet, and then plaintiff inserted his bid of 12%, the amount he would retain for personal use or marketing. (Amended Complaint, Exh. 2). By letter dated May 2, 1983, defendant informed plaintiff that his bid of 12% had been accepted. (Amended Complaint, Exh. 3). On May 10, 1983, defendant mailed a Commodity Delivery Notice to plaintiff requiring delivery of 25,256 bushels of milo, which exceeds the bushels he had bid. (Amended Complaint, ¶ 7). The Grant County ASCS office explained in a letter dated May 18, 1983, that it had "corrected" plaintiff's bid to 28,700 bushel from 23,360 bushel to reflect the entire quantity of grain not required for plaintiff's participation in other PIK programs. (Amended Complaint, Exh. 4).
Plaintiff further alleges his full performance of the contract by the delivery of the milo under the terms of his bid. Plaintiff has demanded defendant to "release all remaining milo which was not required to be retained under loan and ... to retire his loan." (Amended Complaint, ¶ 8).
Plaintiff filed his original complaint March 28, 1984, asserting jurisdiction of this court under 15 U.S.C. § 714b and seeking relief through a declaratory judgment on the contractual rights of the parties, a judgment of specific performance against defendant, and a finding of conversion with actual damages of $16,447.20, consequential damages of $14,690, and punitive damages.
After defendant filed a motion to dismiss, plaintiff amended his complaint to reflect this court's jurisdiction under 28 U.S.C. § 1346(b), alternatively under 28 U.S.C. § 1346(a)(2). Plaintiff now seeks relief for conversion in the amount of $16,447.20 actual damages and $14,690 consequential damages, and for breach of contract in the amount of $9,999 damages.
While defendant advances numerous arguments, the court will restrict its attention to whether plaintiff's conversion claim sounds in contract and whether the Contract Disputes Act of 1978 is applicable.
It is a long-standing rule that the United States may not be sued without its consent. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983); Amalgamated Sugar Co. v. Bergland, 664 F.2d 818, 823 (10th Cir.1981). The consent of the United States is a prerequisite to this court's jurisdiction. Mitchell, 463 U.S. at 212, 103 S.Ct. at 2965; Hefley v. Textron, 713 F.2d 1487, 1494 (10th Cir.1983). Because the jurisdiction of federal courts is limited to that provided by the Constitution or statute, there is a presumption against federal jurisdiction which must be affirmatively overcome by the party invoking jurisdiction. Karlin v. Clayton, 506 F.Supp. 642, 644 (D.Kan.1981).
The federal statute permitting suits against the Commodity Credit Corporation (CCC) is 15 U.S.C. § 714b which places exclusive jurisdiction in United States district courts. 15 U.S.C. § 714b also provides:
Any suit by or against the United States as the real party in interest based upon any claim by or against the Corporation shall be subject to the provisions of subsection (c) of this section to the same extent as though such suit were by or against the Corporation, except that (1) any such suit against the United States based upon any claim of the type enumerated in section 1491 of Title 28, may be brought in the United States Claims Court, and (2) no such suit against the United States may be brought in a district court unless such suit might, without regard to the provisions of sections 714 to 714p of this title, be brought in such court.
If plaintiff's suit is against the United States as the real party in interest, then other significant jurisdiction provisions will come into play.
The United States is the real party in interest in actions where recovery would come from the federal treasury. Anderson v. Occidental Life Ins. Co. of California, 727 F.2d 855, 856 (9th Cir. 1984); see Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963). Plaintiff Coffey seeks monetary damages from the CCC, an agency and instrumentality of the United States within the Department of Agriculture. 15 U.S.C. § 714. The financial operation of the CCC is dependent upon the federal treasury. See 15 U.S.C. §§ 713a-4, 713a-12. The court concludes plaintiff's claim is against the United States, the real party in interest. See Raines v. Block, 599 F.Supp. 196, 198 (D.Colo.1984).
It is now a question of whether plaintiff's suit could be brought in district court without regard to 15 U.S.C. §§ 714 to 714p. Plaintiff alleges jurisdiction pursuant to 28 U.S.C. § 1346(b), alternatively 28 U.S.C. § 1346(a)(2). Plaintiff seeks under § 1346(b) money damages for the alleged wrongful conduct of CCC's agents in altering his bid and thereby converting his milo. The court finds merit in the defendant's argument that plaintiff's action sounds in contract and not tort.
Plaintiff's allegations of wrongful conduct are limited to: "Defendant CCC altered his bid in violation of the terms and conditions of the program," and "Defendant refused to comply with the contract, and refused to release that portion of the collateral in dispute, thereby converting Plaintiff's grain." (Amended Complaint, ¶¶ 7, 8).
Plaintiff concedes an "act or omission" of a government employee or agent "in the execution of a statute or regulation" is not actionable under the Federal Tort Claims Act (FTCA). 28 U.S.C. 2680(a). Nevertheless, plaintiff insists the government has converted 4,699.2 bushels of his grain by retaining it after he delivered, under protest, 25,256 bushels pursuant to the delivery notice which exceeded his bid of 20,556.80 bushels. (Memorandum in Opposition, p. 4). The strained nature of this argument suggests plaintiff's action rests in contract law.
Even though, as plaintiff notes, a breach of contract action and tort action can co-exist, it is settled that claims essentially based upon an alleged failure to carry out contractual duties are not tort claims which confer jurisdiction under the FTCA. Tannenbaum v. Envirodyne Engineers, Inc., 609 F.Supp. 931, 933 (D.Ill.1985), see Blanchard v. St. Paul Fire and Marine Insurance Co., 341 F.2d 351, 357 (5th Cir.) cert. denied 382 U.S. 829, 86 S.Ct. 66, 15 L.Ed.2d 73 (1965). Jurisdiction of this court cannot be invoked by framing the complaint as other than contractual, when in fact "the genesis of any wrongdoing by the United States was breach of contract." Raines v. Block, 599 F.Supp. at 199; see Management Science America, Inc. v. Pierce, 598 F.Supp. 223, 225 (N.D.Ga.1984). The court in Megapulse, Inc. v. Lewis, 672 F.2d 959, 968 (D.C.Cir.1982), stated: "The classification of a particular action as one which is or is not `of its essence' a contract action depends both on the source of the rights upon which plaintiff bases its claims, and upon the type of relief sought (or appropriate)."
Plaintiff brought this action to obtain the CCC's performance under the contract, as he understands the terms, and to receive consequential damages arising from CCC's alleged breach of the same contract. Plaintiff's rights spring from the contract. In such an action, the crucial question is whether the United States had the authority unilaterally to change the terms of the agreement. Because plaintiff's claim of conversion is essentially a claim for breach of contract, the court finds it lacks jurisdiction under 28 U.S.C. § 1346(b) and the FTCA. See Raines v. Block, 599 F.Supp. at 199.
Plaintiff alternatively alleges this court has jurisdiction under the Tucker Act, 28 U.S.C. § 1346(a)(2), which provides in relevant part:
Acknowledging this court's jurisdiction under the Tucker Act is limited to claims not exceeding $10,000, plaintiff has limited his alternative contract claim to $9,999. The waiver of damages in excess of $10,000 is sufficient to permit a district court to exercise its concurrent jurisdiction under the Tucker Act. Professional Managers' Ass'n v. U.S., 761 F.2d 740, 742 (D.C.Cir. 1985). The only remaining hurdle to this court's jurisdiction of plaintiff's claim is whether the contract in question is subject to sections 8(g)(1) and 10(a)(1) of the Contract Disputes Act of 1978 (CDA), 41 U.S.C. § 601 et. seq.
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