Leider v. U.S., 01-1097.
| Decision Date | 15 August 2002 |
| Docket Number | No. 01-1097.,01-1097. |
| Citation | 301 F.3d 1290 |
| Parties | Richard LEIDER, Plaintiff-Appellant, v. UNITED STATES, United States Treasury Department, and Paul H. O'Neill, Secretary of the Treasury, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
John Glugoski, Righetti & Wynne, of San Francisco, CA, argued for plaintiff-appellant. On the brief was Matthew Righetti.
Katherine M. Kelly, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendants-appellees. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and Mark A. Melnick, Assistant Director. Of counsel on the brief was Marc I. Seldin, Senior Attorney, Financial Management Service, Department of Treasury, of Washington, DC.
Before SCHALL, BRYSON, and DYK, Circuit Judges.
Richard Leider brings this case to us from the United States District Court for the Northern District of California. Mr. Leider brought suit in the district court seeking compensation from the United States under the Fifth Amendment to the Constitution for the alleged taking by the government of interest accumulated in a bankruptcy creditor account. The district court granted the government's motion to dismiss the complaint pursuant to Fed. R.Civ.P. 12(b)(6) for failure to state a claim upon which relief could be granted. See Leider v. United States, No. C-98-3766 MMC (N.D.Cal.1999) (Order Granting Defendant's Motion to Dismiss). Because we conclude that Mr. Leider has failed to assert the taking of a cognizable property interest, we affirm.
The pertinent facts are alleged in Mr. Leider's complaint. For purposes of this appeal, we assume the well-pled allegations in the complaint to be true and draw all reasonable inferences in Mr. Leider's favor. See Roedler v. Dep't of Energy, 255 F.3d 1347, 1354 (Fed.Cir.2001), cert. denied, ___ U.S. ___, 122 S.Ct. 648, 151 L.Ed.2d 565 (2001); Highland Falls-Fort Montgomery Cent. Sch. Dist. v. United States, 48 F.3d 1166, 1169-70 (Fed.Cir. 1995).
In July of 1987, Milton Righetti filed a petition under Chapter 11 of the Bankruptcy Code, see 11 U.S.C. § 301 (1982), in the United States Bankruptcy Court for the Northern District of California. Complaint, ¶ 9. In September of that year, his wife, Hope Righetti, also filed a Chapter 11 petition in the Northern District. Id. On September 29, 1987, their cases were consolidated. Id. Mr. Leider, who was an unsecured creditor of the Righettis, filed a claim for $25,000 in the proceedings. Id.
In March of 1996, the bankruptcy court entered a final decree and order closing the case. Complaint, ¶ 10. At that time, the funds on hand were distributed to the Righettis' creditors pursuant to an order of the bankruptcy court. However, due to a change of address, Mr. Leider did not receive his distributive share of $2,162.67 from the proceeds of the Righetti bankruptcy estate. Mr. Leider alleges that he was unaware of the termination of the Righetti bankruptcy proceedings or the distribution of the funds. Complaint, ¶¶ 10-11.
In a bankruptcy proceeding, after 90 days have elapsed from the time funds are distributed to creditors, any checks to creditors that have not been cashed are canceled and the funds represented by the checks are "paid into the [bankruptcy] court." 11 U.S.C. § 347(a) (2000). All such funds received by the bankruptcy court are "deposited with the Treasurer of the United States or a designated depositary, in the name and to the credit of [the] court." 28 U.S.C. § 2041 (2000). After five years, any funds that are still unclaimed are deposited by the bankruptcy court in the United States Treasury "in the name and to the credit of the United States." 28 U.S.C. § 2042 (2000). Thereafter, a creditor entitled to any of the funds may file a claim with the bankruptcy court, and if the claim is approved, the Treasury Department issues a check to the creditor in the principal amount of his or her distributive share. Id.
In this case, after the 90-day period had passed, John T. Kendall, the trustee in the Righetti bankruptcy proceedings, transferred the funds that remained unclaimed, including those owed to Mr. Leider, to the clerk of the bankruptcy court for deposit with the United States Treasury pending creditors filing petitions claiming their distributive shares. Complaint at ¶ 10. Approximately two years later, after learning of the resolution of the Righettis' bankruptcy action, Mr. Leider petitioned the bankruptcy court for the payment of his distributive share of the estate. In due course, he received from the court the sum of $2,162.67, without interest. Id.
On September 29, 1998, Mr. Leider filed a class action suit in the United States District Court for the Northern District of California against the United States, the Treasury Department, and former Treasury Secretary Robert Rubin, alleging, inter alia, that the government's failure to pay interest on his distributive share of the unclaimed bankruptcy funds constituted a taking of property under the Fifth Amendment.
In due course, the defendants moved to dismiss Mr. Leider's complaint for lack of jurisdiction and for failure to state a claim upon which relief could be granted, pursuant to Rules 12(b)(1) and 12(b)(6), respectively, of the Federal Rules of Civil Procedure. In an April 12, 1999 Order, the district court denied the defendants' motion to dismiss for lack of jurisdiction. The court held that it had jurisdiction under the Little Tucker Act, 28 U.S.C. § 1346(a)(2) (1994), because Mr. Leider, the only plaintiff in the as yet uncertified class, had filed a claim for interest on his distributive share of the bankruptcy proceeds that did not exceed $10,000. Leider, slip. op. at 2.1
At the same time, however, the district court ruled that Mr. Leider had failed to state a viable takings claim under the Fifth Amendment. It therefore granted the motion to dismiss under Rule 12(b)(6). The court determined that the statutes mandating the deposit of unclaimed bankruptcy funds into a Treasury account expressly permitted creditors to request and receive their distributive shares at any time. Accordingly, the court reasoned, the government merely "possessed" Mr. Leider's $2,162.67 share, which, as a matter of law, did not constitute a "taking" without compensation in violation of the Fifth Amendment. Leider, slip. op. at 5-6. The district court viewed the government's possession of Mr. Leider's funds as resulting not from a compensable taking, but from Mr. Leider's own inaction. As for interest on the funds that the government had in its possession, the court declined to find that "the United States committed an unconstitutional taking by failing to pay interest on unclaimed funds that it was obligated by statute to hold for plaintiff due to his own negligence." Id. Finally, while the district court noted that Mr. Leider did not "separately plead a cause of action for breach of fiduciary duty" in support of his claim that interest was taken from him, it ruled that such an alternative basis for recovery was "without merit." Id., slip. op. at 4 n. 2.
Mr. Leider appealed the dismissal to the United States Court of Appeals for the Ninth Circuit. That court sua sponte requested briefing on the question of whether it properly could assert jurisdiction over Mr. Leider's appeal in light of the Supreme Court's decision in United States v. Hohri, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987),2 and the Congressional grant of jurisdiction to this court in 28 U.S.C. § 1295(a)(2) (1994). Thereafter, on November 17, 2000, the Ninth Circuit held that it lacked jurisdiction and ordered a transfer of Mr. Leider's appeal to this court.
The Little Tucker Act confers concurrent jurisdiction upon the Court of Federal Claims and the appropriate United States district court for a "civil action or claim against the United States, not exceeding $ 10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States." 28 U.S.C. § 1346(a)(2). We have exclusive jurisdiction, pursuant to 28 U.S.C. § 1295(a)(2), to review decisions "based, in whole or in part," on the Little Tucker Act. Rothe Dev. Corp. v. United States DOD, 262 F.3d 1306, 1316 (Fed.Cir.2001).
Dismissal for failure to state a claim under Rule 12(b)(6) is proper only when a plaintiff "can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). As indicated above, in reviewing the grant of a Rule 12(b)(6) motion, we assume all well-plead factual allegations in the complaint to be true and draw all reasonable inferences in the plaintiff's favor. Whether the district court properly dismissed Mr. Leider's complaint for failure to state a claim upon which relief could be granted is a question of law, which we review de novo. Boyle v. United States, 200 F.3d 1369, 1372 (Fed.Cir.2000).
The Fifth Amendment provides, in pertinent part, as follows: "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V, cl. 4. In evaluating a takings claim, we first consider whether the plaintiff has identified a property interest cognizable under the Fifth Amendment. See M & J Coal Co. v. United States, 47 F.3d 1148, 1154 (Fed.Cir.1995). If the plaintiff satisfies the prerequisite of identifying a cognizable property interest, which we have labeled a "bedrock requirement," Wyatt v. United States, 271 F.3d 1090, 1097 (Fed.Cir.2001), cert. denied, E. Minerals Int'l, Inc. v. United States, ___ U.S. ___, 122 S.Ct. 1960, 152 L.Ed.2d 1021 (2002), we proceed to consider whether the...
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