Department of Army v. Federal Labor Relations Authority, 93-1655

• Decision Date: 09 August 1995
• Docket Number: No. 93-1655,93-1655
• Citation: 56 F.3d 273
• Parties: 149 L.R.R.M. (BNA) 2513, 312 U.S.App.D.C. 309 DEPARTMENT OF the ARMY, United States Army Commissary, Fort Benjamin Harrison, Indianapolis, Indiana; Department of the Army, Finance and Accounting Office, Fort Sam Houston, Texas, Petitioners v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent. American Federation of Government Employees Local # 1411, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 273

56 F.3d 273

149 L.R.R.M. (BNA) 2513, 312 U.S.App.D.C. 309

DEPARTMENT OF the ARMY, United States Army Commissary, Fort Benjamin Harrison, Indianapolis, Indiana Department of the Army, Finance and Accounting Office, Fort Sam Houston, Texas, Petitioners v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent American Federation of Government Employees Local # 1411, Intervenor.

No. 93-1655.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 18, 1994.

Decided June 9, 1995.

Rehearing and Suggestion for Rehearing

In Banc Denied Aug. 9, 1995.

Petition for Review of a Decision and Order of the Federal Labor Relations Board.

Matthew M. Collette, Atty., U.S. Dept. of Justice, argued the cause for petitioners. With him on the briefs were Frank W. Hunger, Asst. Atty. Gen., and William G. Kanter, Atty., U.S. Dept. of Justice.

William E. Persina, Atty., Federal Labor Relations Authority, argued the cause for respondent. With him on the brief was William R. Tobey, Deputy Sol., Federal Labor Relations Authority. Frederick M. Herrera, Arthur A. Horowitz, and David M. Smith, entered appearances for respondent.

Judith D. Galat and Mark D. Roth, entered appearances for intervenor.

Before: GINSBURG, HENDERSON, and TATEL, Circuit Judges.

GINSBURG, Circuit Judge:

In response to a direction from the Department of the Army, the Army Finance and Accounting Office (FAO) at Fort Sam Houston increased from 10 to 12 days the lag between pay period and payment for certain Army employees. Because this new policy was not announced in advance to the commissary employees at Fort Benjamin Harrison, a number of them had insufficient funds in their bank accounts to cover the checks they had written. The checks were paid by debiting the overdraft lines of credit attached to their checking accounts, for which they incurred interest charges. The commissary employees' union (American Federation of Government Employees, Local # 1411) filed a complaint with the Federal Labor Relations Authority, which held that the commissary and the FAO committed unfair labor practices by implementing the new pay-lag policy without first providing notice to the Union. The FLRA ordered the FAO, inter alia, to "[r]eimburse unit employees for all monies lost or interest charged as a result" of the policy change.

The relevant components of the Department of the Army petition for review of the FLRA's decision, arguing that the sovereign immunity of the United States bars the above-quoted portion of the prescribed remedy. The FLRA cross-applies for enforcement of its order. Because the United States has not clearly waived its immunity from suit for this monetary relief, we grant the petition for review, deny the application for enforcement, and vacate the disputed portion of the order under review.

I. ANALYSIS

The fundamental principle relevant to this case, as all parties agree, is that "[t]he United States, as sovereign, is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769-70, 85 L.Ed. 1058 (1941). The FLRA argues that the doctrine of sovereign immunity does not apply here for three independent reasons: (A) the petitioners waived immunity through their actions before the FLRA; (B) the United States is on both sides of this case; and (C) in the Federal Service Labor-Management Relations Statute the Congress waived the immunity of the United States to the type of monetary remedy imposed here. We find none of these arguments convincing for the reasons set out below.

A. Waiver

The FLRA makes two waiver arguments. First, the Authority argues that the Army waived its claim to sovereign immunity by appearing before the FLRA to defend its position on the merits. While it is true that the sovereign immunity of a State is waived by appearance in a federal court, see, e.g. Clark v. Barnard, 108 U.S. 436, 447, 2 S.Ct. 878, 882-83, 27 L.Ed. 780 (1883), federal sovereign immunity is not waived by appearance in any forum because "officers of the United States possess no power through their actions to waive an immunity of the United States or to confer jurisdiction on a court in the absence of some express provision of Congress." United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 660, 67 S.Ct. 601, 604, 91 L.Ed. 577 (1947); accord United States v. Mitchell, 463 U.S. 206, 215-16, 103 S.Ct. 2961, 2967-68, 77 L.Ed.2d 580 (1983).

The Authority also argues that the Army waived its right to present a sovereign immunity argument to this court by failing to raise it first before the agency. There, the Army made the general argument that the proposed remedy is not authorized by the Statute, but it did not raise the more specific sovereign immunity claim. Although the Statute does provide that except in "extraordinary circumstances" the reviewing court is not to consider an argument that was not raised before the FLRA, 5 U.S.C. Sec. 7123(c), this provision cannot bar a belated claim of sovereign immunity. If it could, then as with a waiver by appearance, a federal official could effectively waive sovereign immunity and confer jurisdiction upon the court without an express authorization from the Congress. See United States v. United States Fidelity and Guaranty Co., 309 U.S. 506, 513, 60 S.Ct. 653, 657, 84 L.Ed. 894 (1940) (rejecting claim that federal government waived sovereign immunity by failing to raise it in district court lest "Government [be subject] to suit in any court in the discretion of its responsible officers [which] is not permissible"). We hold, therefore, that the Army did not waive its sovereign immunity argument by failing to raise it before the Authority.

B. The Government v. The Government

The FLRA next contends that there is no sovereign immunity in "the 'government-against-government' situation" before us because the doctrine of sovereign immunity "was designed for the purpose of protecting the government from litigation initiated by a source outside the government's direct control--its citizens," and not to protect one Government agency from litigation initiated by another. This argument invokes an unduly circumscribed notion of the doctrine of sovereign immunity. Cf. Gray v. Bell, 712 F.2d 490, 511 (D.C.Cir.1983) (setting forth three policy bases of sovereign immunity). Not even the FLRA's account of the doctrine, however, suggests that the sovereign is immune only to lawsuits brought by private parties, and not to a suit such as this, brought by a government official acting for the benefit of private parties. See United States v. Horn, 29 F.3d 754, 761 (1st Cir.1994) (sovereign immunity "stands as an obstacle to virtually all direct assaults against the public fisc, save only those incursions from time to time authorized by Congress"). Hence, the Army enjoys sovereign immunity in this instance unless the Congress has waived it, which is the thrust of the FLRA's final argument.

C. The Statute

The Authority argues that the Congress, in enacting the Statute, waived the Government's immunity to the kind of remedy it ordered in this case. Because the Congress can waive immunity to one type of remedy without waiving immunity to another, see, e.g., United States v. Nordic Village, 503 U.S. 30, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992), it is important, as a threshold matter, to understand the remedy at issue here.

The Authority ordered the Army to compensate its employees for "all monies lost or interest charged as a result" of the change in the Army's pay-lag policy. This is properly understood as "money damages," a legal rather than an equitable remedy. Bowen v. Massachusetts, 487 U.S. 879, 893, 895, 108 S.Ct. 2722, 2731-32, 2732-33, 101 L.Ed.2d 749 (1988) ("money damages" "refers to a sum of money used as compensatory relief ... given to the plaintiff as a substitute for a suffered loss" in an action at law for damages) (quoting Maryland Dept. of Human Resources v. Department of Health and Human Services, 763 F.2d 1441, 1446 (D.C.Cir.1985) (emphasis in original)). Money damages are the "classic remedy" for consequential losses. Hubbard v. EPA, 982 F.2d 531, 533 (D.C.Cir.1992) (in banc ). The remedy in an equitable action for specific relief, on the other hand, does not attempt to provide the injured party with a substitute for a consequential loss, but rather "attempt[s] to give the plaintiff the very thing to which he was entitled." Bowen, 487 U.S. at 895, 108 S.Ct. at 2732; Hubbard, 982 F.2d at 533 (both quoting D. DOBBS, Handbook on the Law of Remedies 135 (1973)). Thus, a monetary award can be either legal or equitable in nature, depending upon whether the money is a substitute for something lost in consequence of the defendant's act or is "the very thing to which [the plaintiff] is entitled." Maryland Dept. of Human Resources, 763 F.2d at 1446.

In this case, proper notice of the pay-lag policy change was the thing to which the commissary employees were entitled. The interest charges for which the employees seek compensation are sums they lost only as a consequence of the Army's failure to give them the notice they were due. Accordingly, any compensation for such interest is properly characterized as "money damages." Hence, the question before the court is whether the Statute waives the immunity of the United States to liability for money damages.

The section of the Statute that sets out the powers and duties of the FLRA provides that the Authority "may require an agency or a labor organization to cease and desist from violations of this chapter and require it to take any remedial action it considers appropriate to carry out the policies of this chapter." 5 U.S.C. Sec. 7105(g)(3). The section that addresses the prevention of unfair labor practices further provides that if the Authority finds that an agency or a labor organization has...