Nat'l Air Cargo Grp., Inc. v. United States
| Decision Date | 26 June 2014 |
| Docket Number | No. 13-764C,13-764C |
| Court | U.S. Claims Court |
| Parties | NATIONAL AIR CARGO GROUP, INC., d/b/a NATIONAL AIRLINES et al., Plaintiffs, v. THE UNITED STATES, Defendant. |
Motion to Dismiss; Aviation Insurance, 49
U.S.C. ch. 443; Jurisdiction; Joinder;
Jessica C. Abrahams and Mark A. Dombroff, Washington, DC, for plaintiffs.
Sheryl L. Floyd and Barbara E. Thomas, United States Department of Justice, Washington, DC, for defendant.
Plaintiffs in this action seek payment under an insurance policy issued by the government. Defendant moves to dismiss the claims of one of the plaintiffs for lack of jurisdiction pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"). Because some of defendant's arguments touch upon the merits of one of those claims, the court treats that merits discussion as a motion to dismiss for failure to state a claim upon which the court could grant relief pursuant to RCFC 12(b)(6). For the reasons set forth below, the court grants in part and denies in part defendant's motion.
This case concerns an insurance policy issued by the Federal Aviation Administration ("FAA") as part of its aviation insurance program. Under this program, which is set forth in chapter 443 of title 49 of the United States Code ("chapter 443"), the FAA "may provide insurance and reinsurance against loss or damage arising out of any risk from the operation of an" aircraft if the FAA "decides that the insurance cannot be obtained on reasonable terms froman insurance carrier," 49 U.S.C. § 44302(a) (2006 & Supp. V 2012), and if the President has determined that "the continued operation of the . . . aircraft to be insured or reinsured is necessary in the interest of air commerce or national security or to carry out the foreign policy of the United States Government," id. § 44302(c). The FAA may waive the premium for this insurance so long as the Secretary of Defense or another designated official agrees to indemnify the FAA "against all losses covered by the insurance." Id. § 44305(b).
On April 29, 2013, an aircraft operated by plaintiff National Air Cargo Group, Inc. d/b/a National Airlines ("National Air Cargo") crashed at Bagram Air Base, Afghanistan. At the time of the crash, the aircraft was transporting military vehicles and other military cargo pursuant to a contract with the United States Transportation Command ("USTRANSCOM"). The crash resulted in the deaths of the seven individuals on board the flight and the total loss of the aircraft.
As required by its contract with USTRANSCOM, National Air Cargo was a carrier in good standing participating in the Civil Reserve Air Fleet. Pursuant to its Civil Reserve Air Fleet contract, National Air Cargo was required to apply for nonpremium aviation insurance from the FAA. National Air Cargo complied with this provision, and on September 28, 2011, the FAA issued National Air Cargo a nonpremium hull and liability war risk insurance policy ("nonpremium war risk policy"). This policy covered physical loss or damage to the aircraft resulting from a war risk occurrence, up to $40,000,000.
In letters dated May 30, 2013, and June 6, 2013, National Air Cargo notified the FAA that it had a claim under the nonpremium war risk policy arising from the crash at Bagram Air Base. The FAA denied National Air Cargo's claim on June 19, 2013. In the meantime, National Air Cargo and its lenders submitted a claim for their loss under a separate insurance policy issued by plaintiff Commerce and Industry Insurance Company ("Commerce"), which provided coverage for physical damage to the aircraft. Commerce ultimately paid National Air Cargo and its lenders $42,153,003 to settle their claim for the loss of the aircraft. Under the terms of the Commerce policy, Commerce is subrogated to National Air Cargo's rights of recovery against the FAA.
As a result of the FAA's denial of National Air Cargo's claim under the nonpremium war risk policy, National Air Cargo and Commerce filed suit in the United States Court of Federal Claims ("Court of Federal Claims"). Their complaint contains three counts. In the first count, captioned "Breach of Contract - National Air Cargo," National Air Cargo alleges that the FAA's failure to pay it for the loss of its aircraft constitutes a breach of the nonpremium war risk policy. In the second count, captioned "Breach of Contract - Commerce and Industry Insurance Company," Commerce also alleges, in its role as subrogee, that the FAA breached the nonpremium war risk policy by failing to pay for the loss of the aircraft. In the third count, plaintiffs seek a declaratory judgment. Plaintiffs collectively request damages of no more than$45,000,000, interest, attorney's fees and costs, and a declaration of the FAA's obligations under the nonpremium war risk policy.
In response to plaintiffs' complaint, defendant filed a partial answer and a motion to dismiss. With the latter submission, defendant seeks the dismissal of the claims asserted by Commerce for lack of jurisdiction. The motion has been fully briefed, and the court heard argument on June 25, 2014.
Defendant moves to dismiss Commerce's claims for lack of jurisdiction pursuant to RCFC 12(b)(1). In ruling on a motion to dismiss, the court assumes that the allegations in the complaint are true and construes those allegations in the plaintiff's favor. Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995). However, the plaintiff bears the burden of proving, by a preponderance of the evidence, that the court possesses subject matter jurisdiction. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). If the court finds that it lacks subject matter jurisdiction over a claim, RCFC 12(h)(3) requires the court to dismiss that claim.
The ability of the Court of Federal Claims to hear and decide suits against the United States is limited. "The United States, as sovereign, is immune from suit save as it consents to be sued." United States v. Sherwood, 312 U.S. 584, 586 (1941). The waiver of immunity "cannot be implied but must be unequivocally expressed." United States v. King, 395 U.S. 1, 4 (1969).
The Tucker Act, the principal statute governing the jurisdiction of this court, waives sovereign immunity for claims against the United States, not sounding in tort, that are founded upon the Constitution, a federal statute or regulation, or an express or implied contract with the United States. 28 U.S.C. § 1491(a)(1) (2012). However, the Tucker Act is merely a jurisdictional statute and "does not create any substantive right enforceable against the United States for money damages." United States v. Testan, 424 U.S. 392, 398 (1976). Instead, the substantive right must appear in another source of law, such as a "money-mandating constitutional provision, statute or regulation that has been violated, or an express or implied contract with the United States." Loveladies Harbor, Inc. v. United States, 27 F.3d 1545, 1554 (Fed. Cir. 1994) (en banc). In their complaint, plaintiffs assert that the court possesses jurisdiction to entertain Commerce's monetary claim pursuant to 49 U.S.C. § 44309(a), as wellas jurisdiction to entertain Commerce's nonmonetary claim under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202 (2012).1 See Compl. ¶ 6.
In asserting that the court possesses jurisdiction over Commerce's monetary claim, plaintiffs rely on 49 U.S.C. § 44309(a), which provides:
Plaintiffs contend that section 44309(a)(1) provides for jurisdiction in the Court of Federal Claims pursuant to the Tucker Act. Specifically, they argue that the aviation insurance program set forth in chapter 443 is a money-mandating statutory scheme because it expressly authorizes the FAA to pay claims made pursuant to the insurance policies it issues, 49 U.S.C. § 44308(b)(2), and provides for a cause of action against the government in the Court of Federal Claims when an insured loss is in dispute, id. § 44309(a)(1). Defendant disagrees, arguing that no provision in chapter 443 requires the payment of money. Rather, defendant asserts, chapter 443 merely "authorize[s] the payment of claims under insurance polices that may be issued by the Government, but do not establish the criteria that will determine whether such claims will be paid; the policies themselves must define those criteria." Reply 8 ( Roberts v. United States, 745 F.3d 1158 (Fed. Cir. 2014), which addresses when a statute that uses the word "may" mandates the payment of money). Neither party is correct.
Although the Tucker Act is the principal statute governing the jurisdiction of the Court of Federal Claims, it is not the only one. A number of other statutes waive the government's sovereign immunity and provide for jurisdiction in this court. For example, the National Childhood Vaccine Injury Act of 1986 vests the Court of Federal Claims with exclusive jurisdiction over proceedings on certain vaccine-related claims,...
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