Metadure Corp. v. United States

• Citation: 490 F. Supp. 1368
• Decision Date: 11 June 1980
• Docket Number: No. 79 Civ. 4588 (RWS).,79 Civ. 4588 (RWS).
• Parties: METADURE CORPORATION and Samuel Hassine, Plaintiffs, v. UNITED STATES of America, United States Department of Defense, United States Defense Logistics Agency, United States Defense Contract Administration Services Region-New York, Vincent H. Ellis, Robert L. Herriford, Richard W. Miller, Gerald J. Post and Woodrow W. Voughn, Defendants.
• Court: U.S. District Court — Southern District of New York

490 F. Supp. 1368

METADURE CORPORATION and Samuel Hassine, Plaintiffs, v. UNITED STATES of America, United States Department of Defense, United States Defense Logistics Agency, United States Defense Contract Administration Services Region-New York, Vincent H. Ellis, Robert L. Herriford, Richard W. Miller, Gerald J. Post and Woodrow W. Voughn, Defendants.

No. 79 Civ. 4588 (RWS).

United States District Court, S. D. New York.

June 11, 1980.

Stroock & Stroock & Lavan, New York City, for plaintiffs; Andrew B. Schultz, New York City, of counsel.

John S. Martin, Jr., U. S. Atty., Southern District of New York, New York City, for defendants; Jane E. Bloom, Asst. U. S. Atty., New York City, of counsel.

OPINION

SWEET, District Judge.

Metadure Corporation ("Metadure") and Samuel Hassine have filed this action against the United States of America, the United States Department of Defense (the "Defense Department"), the United States Defense Logistics Agency ("DLA"), the United States Defense Contract Administration Services Region—New York ("DCASR-NY") (collectively "the agency defendants") and five individual defendants, Vincent H. Ellis, Robert L. Herriford, Richard W. Miller, Gerald L. Post and Woodrow W. Voughan. Defendants Miller and Voughan have not yet been served.

In the first cause of action, Metadure, the successor corporation to Henry Spen & Co., Inc. ("Spen"), claims that it has been a federal government contractor from 1973 to date. Metadure alleges that at some time after October 1975 the defendants prepared and maintained in their files an unsigned, undated memorandum (the "Memorandum") derogating Metadure's status as a government contractor. The defendants have allegedly refused to disclose the authors of the Memorandum and have failed to remove it from government files. Metadure avers that, at least since promulgation of this Memorandum, the defendants have acted in bad faith and in violation of government regulations in assessing Metadure's status as a government contractor. Metadure claims that the defendants' actions have resulted in irregularities in Metadure's dealings with the defendants on existing contracts and in the improper denial of other contracts. These actions are averred to have caused a deprivation of Metadure's property in violation of its due process rights. Metadure seeks an injunction against continuing due process violations and "requests this Court to determine a fair and reasonable remedy to cure the tainted federal administrative proceedings . . ., said remedy to be determined after plaintiff Metadure has had reasonable discovery in this action and is afforded the opportunity to request a specific remedy."

In its second cause of action, Metadure seeks $2,000,000 in damages for the alleged constitutional violations underlying the first cause. Metadure has moved to withdraw this cause of action.

In the third cause of action, Hassine claims that, by preparing and maintaining the Memorandum which states, allegedly falsely, that Hassine is "skillful in the presentation of half truths" and "views the Government as a cow to be milked," the agency defendants have violated the Privacy Act, 5 U.S.C. § 552a(b), (e) and (g)(1)(A), (C), and (D). Hassine seeks an order directing the agency defendants to cure the violations, and $250,000 in damages and attorney's fees due to defendants' averredly willful conduct.

Hassine, in the fourth cause of action, alleges that the preparation of the Memorandum has violated his due process and privacy rights under the First, Fifth and Ninth Amendments due to the defendants' "wrongfully branding and prejudicing" him "without a full and fair opportunity to be heard." Hassine seeks an injunction against continued violations of his constitutional rights and "at least" $250,000 in damages.

A. Subject Matter Jurisdiction over Counts One and Two.

The defendants have moved to dismiss Metadure's first and second causes of action for lack of subject matter jurisdiction. The defendants contend that the allegations of these counts arise from the contractual relationship between Metadure and the agency defendants, and that exclusive jurisdiction over these claims exists in the Court of Claims. Metadure claims that jurisdiction exists in this court under 28 U.S.C. § 1346 (the Tucker Act), 28 U.S.C. § 1331 (federal question statute), or under 5 U.S.C. § 702 (Administrative Procedure Act). Since the individual defendants are sued not in their individual capacities, but for specific relief arising out of their official duties, see Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949); Estate of Watson v. Blumenthal, 586 F.2d 925 (2d Cir. 1978), the determination of subject matter jurisdiction stands on the same footing for the individual defendants as for the agency defendants.

Metadure argues that it does not wish to litigate specific contract disputes in this court, but rather seeks to enjoin a pattern of unconstitutional governmental conduct which has manifested itself in the contractual relationship between itself and the agency defendants. Metadure has now moved to withdraw its claim for money damages, and urges that only this court has power to grant the injunctive relief essential to cure the wrongs allegedly committed by the agency defendants.

Under the Tucker Act, the Court of Claims has exclusive jurisdiction over claims in excess of $10,000 against the United States and its agencies

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), 1491. For claims arising prior to March 1, 1979, the district courts have concurrent jurisdiction with the Court of Claims to decide cases involving claims less than $10,000. For claims arising after that date, jurisdiction over contract claims covered by the Contract Disputes Act of 1978, 41 U.S.C. §§ 601 et seq., has been removed from the district courts. 28 U.S.C. § 1346(a)(2).

The Tucker Act, by its terms, confers jurisdiction on the Court of Claims to adjudicate constitutional issues, as well as those arising out of contractual disputes. 28 U.S.C. § 1491; South Windsor Convalescent Home, Inc. v. Mathews, 541 F.2d 910, 914 (2d Cir. 1976). However, the Court of Claims has only limited power to grant equitable relief. See United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976); United States v. King, 395 U.S. 1, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969); Estate of Watson v. Blumenthal, supra. Similarly, when exercising jurisdiction under section 1346(a)(2), a district court is limited to awarding damages, and cannot grant injunctive relief. Lee v. Thornton, 420 U.S. 139, 95 S.Ct. 853, 43 L.Ed.2d 85 (1975) (per curiam); Ostrer v. Aronwald, 434 F.Supp. 379, 382 (S.D.N.Y.1977).

Accordingly, this court has no jurisdiction under the Tucker Act over Metadure's first cause of action which seeks an as yet unspecified form of injunctive relief. Bruzzone v. Hampton, 433 F.Supp. 92 (S.D.N.Y. 1977), in which the district court retained jurisdiction over a former government employee's claims for injunctive relief while dismissing his claims for back pay in excess of $10,000, is clearly distinguishable. Unlike this case, the Court of Claims in that case had express power under 28 U.S.C. § 1491 to grant the injunctive relief sought by the plaintiff.

No jurisdiction under the Tucker Act exists over Metadure's second cause of action for $2,000,000, since the damages asserted far exceed the $10,000 limit for concurrent jurisdiction specified in the Tucker Act. TM Systems, Inc. v. United States, 473 F.Supp. 481 (D.Conn.1979).

It has been held that the Tucker Act provides the exclusive basis for assertion of contract claims against the United States, see Polos v. United States, 556 F.2d 903, 905 (8th Cir. 1977); International Engineering Co. v. Richardson, 512 F.2d 573 (D.C.Cir. 1975), cert. denied, 423 U.S. 1048, 96 S.Ct. 774, 46 L.Ed.2d 636 (1976). Therefore, if Metadure's claims in this action are properly classified as contract claims, the availability of a remedy under that Act forecloses assertion of jurisdiction by this court under another jurisdictional statute. Estate of Watson v. Blumenthal, supra at 928. Metadure cannot escape the limitations on relief available in a Tucker Act suit by masquerading its claims as suits for injunctive or declaratory relief. Hoopa Valley Tribe v. United States, 596 F.2d 435, 445 (Ct.Cl. 1979); Warner v. Cox, 487 F.2d 1301 (5th Cir. 1974); Ove Gustavsson Contracting Co. v. Floete, 278 F.2d 912 (2d Cir.), cert. denied, 364 U.S. 894, 81 S.Ct. 225, 5 L.Ed.2d 188 (1960).

In Estate of Watson v. Blumenthal, supra, the plaintiff sought an injunction requiring the Secretary of the Treasury to redeem certain United States Treasury bonds. The plaintiff claimed its action was one to review the actions of a federal agency under the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq., so that jurisdiction existed under 28 U.S.C. § 1331. The court held that § 702 of the APA did not constitute a general waiver of sovereign immunity, a ruling which is not at issue in this case.¹ The court concluded that in amending section 702 of the APA in 1976, Congress did not intend to abrogate the rule that "the Tucker Act impliedly forbids relief other than the remedy provided by the Act," id. at 933, but provided for a claim under the APA "only if a suit in the Court of Claims under its jurisdiction, § 1491, were inadequate." Id. at 934. The court ruled that an action in the Court of Claims did provide an adequate remedy for the plaintiff despite the unavailability of injunctive relief in that forum, "thus precluding APA review." Id. at 934. It was also held that no jurisdiction existed under the mandamus statute, 28 U.S.C. § 1361, since

"Congress never intended § 1361 to be interpreted so as to allow the

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