North Side Lumber Co. v. Block
| Decision Date | 20 February 1985 |
| Docket Number | 84-3660,Nos. 84-3657,84-3661 and 84-3776,s. 84-3657 |
| Parties | 32 Cont.Cas.Fed. (CCH) 73,261 NORTH SIDE LUMBER CO., Summit Timber Co., Stevenson Co-Ply, Inc., on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, and Bohemia, Inc., Medford Corporation, Southwest Forest Industries, Inc., Boise Cascade Corporation, Crown Zellerbach Corporation, Georgia-Pacific Corporation, Penn Timber, Inc., Louisiana-Pacific Corporation, Publishers Paper Co., and Willamette Industries, Inc., Plaintiffs-Intervenors-Appellees, v. John BLOCK, Secretary of the United States Department of Agriculture; R. Max Peterson, Chief of the United States Forest Service: Jeff M. Sirmon, Regional Forester for Region VI of the United States Forest Service, Defendants-Appellants, and Lane County, Defendant-Intervenor-Appellant. NORTH SIDE LUMBER CO., Summit Timber Co., Stevenson Co-Ply, Inc., on behalf of themselves and all others similarly situated, Plaintiffs, and Bohemia, Inc., Medford Corporation, Southwest Forest Industries, Inc., Boise Cascade Corporation, Crown Zellerbach Corporation, Georgia-Pacific Corporation, Penn Timber, Inc., Louisiana-Pacific Corporation, Publishers Paper Co., and Willamette Industries, Inc., Plaintiffs-Intervenors-Appellants, v. John BLOCK, Secretary of the United States Department of Agriculture; R. Max Peterson, Chief of the United States Forest Service: Jeff M. Sirmon, Regional Forester for Region VI of the United States Forest Service, Defendants-Appellees, and Lane County, Defendant-Intervenor-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Alan I. Saltman, Saltman & Stevens, Washington, D.C., Charles F. Adams, Phillip D. Chadsey, Stoel, Rives, Boley, Fraser & Wyse, Norman J. Wiener, Miller, Nash, Wiener, Hager & Carlsen, Wayne Hilliard, James H. Clarke, Spears, Lubersky, Campbell, Bledsoe, Anderson & Young, Portland, Or., for plaintiffs-appellees.
John E. Hoag, Eugne, Or., Dirk D. Snel, U.S. Dept. of Justice, Washington, D.C., for defendants-appellants.
Appeals from the United States District Court for the District of Oregon.
Before FAIRCHILD *, GOODWIN and BOOCHEVER, Circuit Judges.
The United States appeals from a preliminary injunction restraining it from enforcing contracts for the sale of national forest timber, and plaintiffs-intervenors appeal their exclusion from the benefits of the injunction. We vacate the injunction because the district court did not have jurisdiction of the cause of action on which it was based.
North Side, the class it represents, and plaintiffs-intervenors are timber companies that have contracts to cut and pay for timber in the national forests in Oregon and Washington. 1 They brought this action against the Secretary of Agriculture and several of his subordinates, asking for a judgment declaring the contracts void and restraining the defendants from enforcing them. They did not seek money damages.
Because of a depressed market for lumber and logs, the timber companies can perform their contracts only at a loss. If they do not perform, they will be liable to the government for the difference between the contract price they agreed to pay for the timber and the price the same timber brings when the government resells it to new purchasers, plus interest. Either performance at a loss or default with payment of damages to the government will bankrupt at least some of the timber companies.
The district court preliminarily enjoined the Secretary from enforcing the contracts held by North Side and the class of 109 privately-held timber companies it represents. Several publicly-held timber companies, the "plaintiffs-intervenors," were permitted to intervene in the action but were excluded from the plaintiff class and from the scope of the injunction. The Secretary and Lane County, which intervened as a defendant to protect its interest in the contracts, appeal from the district court's grant of the preliminary injunction. The plaintiffs-intervenors appeal from the district court's refusal to bring them under the protection of the injunction.
The timber companies make two claims for relief. The first, which we will refer to as the impracticability claim, asserts that contingencies unforeseen at the time the contracts were made render the contracts void under the contract law doctrines of commercial impracticability, frustration of purpose, and impossibility of performance. The second, which we will refer to as the statutory claim, asserts that enforcement of the contracts would violate 16 U.S.C. Secs. 473-482 and the Multiple-Use Sustained-Yield Act of 1960, 16 U.S.C. Secs. 528 et seq. 2
The timber companies contend that both claims fall within the district court's federal question jurisdiction, 28 U.S.C. Sec. 1331. It is true that the claims arise under federal law as Sec. 1331 requires. The statutory claim obviously involves federal statutes. The impracticability claim also arises under federal law because federal common law of contracts applies to contracts with the federal government, Saavedra v. Donovan, 700 F.2d 496, 498 (9th Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 236, 78 L.Ed.2d 227 (1983), and federal common law is part of the "laws ... of the United States" for the purpose of Sec. 1331 jurisdiction. Illinois v. Milwaukee, 406 U.S. 91, 100, 92 S.Ct. 1385, 1391, 31 L.Ed.2d 712 (1972).
But the analysis of jurisdiction cannot stop with Sec. 1331, because the claims in this case are in essence against the federal government, and thus are barred by sovereign immunity unless the government has consented to suit. 3 The timber companies contend that the Administrative Procedure Act, 5 U.S.C. Sec. 702, waives the government's sovereign immunity to this action. Section 702 reads in part:
An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.
The waiver of immunity is limited by the proviso of Sec. 702 that
Nothing herein ... confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.
The Tucker Act, 28 U.S.C. Secs. 1346 and 1491, is a "statute that grants consent to suit" on government contracts. We conclude that it impliedly forbids relief on the impracticability claim but not the statutory claim. It thus precludes a Sec. 702 waiver of sovereign immunity on the impracticability claim. Moreover, on the impracticability claim, we have been able to identify from the record in this case no claim of an official action or failure to act within the meaning of 5 U.S.C. Sec. 702. In the absence of such a claim, Sec. 702 does not waive immunity.
The Tucker Act gives the United States Claims Court jurisdiction over "any claim against the United States founded ... upon any express or implied contract with the United States," 28 U.S.C. Sec. 1491(a)(1); it exercises this jurisdiction concurrently with the district courts for actions claiming less than $10,000. 28 U.S.C. Sec. 1346(a)(2). The Act is more than just a grant of jurisdiction over government contract claims; it is also a limited waiver of sovereign immunity and a limitation on the remedies available in actions on government contracts. Megapulse, Inc. v. Lewis, 672 F.2d 959, 967 (D.C.Cir.1982). The Tucker Act has been construed as permitting the Claims Court to grant money damages against the government in contract actions but not injunctive or declaratory relief. United States v. King, 395 U.S. 1, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969) (); United States v. Jones, 131 U.S. 1, 9 S.Ct. 669, 33 L.Ed. 90 (1889) (). 4 These restrictions on the relief that the Claims Court may grant also limit the relief that the district courts may grant when exercising their concurrent Tucker Act jurisdiction under 28 U.S.C. Sec. 1346(a)(2). Richardson v. Morris, 409 U.S. 464, 93 S.Ct. 629, 34 L.Ed.2d 647 (1973). Thus the Tucker Act "impliedly forbids" declaratory and injunctive relief and precludes a Sec. 702 waiver of sovereign immunity in suits on government contracts. In fact, the legislative history of Sec. 702 specifically mentions the Tucker Act as a statute that "impliedly forbids" relief within the meaning of Sec. 702. H.R.Rep. No. 1656, 94th Cong., 2d Sess. 13, reprinted in 1976 U.S.Code Cong. & Ad.News 6121, 6133.
This court twice has said that the Tucker Act "does not preclude review of agency action when the relief sought is other than money damages." Laguna Hermosa Corp. v. Martin, 643 F.2d 1376, 1379 (9th Cir.1981); Rowe v. United States, 633 F.2d 799, 802 (9th Cir.1980) cert. denied, 451 U.S. 970, 101 S.Ct. 2047, 68 L.Ed.2d 349 (1981). Because plaintiffs do not ask for money damages, this statement might seem to indicate that the Tucker Act does not prevent a Sec. 702 waiver in our case. However, we decline to give the statement a broader scope than indicated by the facts of the cases in which it appears. Both Laguna Hermosa and Rowe dealt with claims that were contract-related but that rested at bottom on statutory rights. As we read these cases, the plaintiffs' reliance on statutory rights kept their claims from being "founded ... upon [a] ... contract with the United States" within the meaning of the Tucker Act, with the consequence that the Act did not preclude a Sec. 702 waiver of sovereign immunity. 5
In Laguna Hermosa, the plaintiff claimed that a government official's refusal to honor a contract that the plaintiff had entered into with the government's predecessor in interest violated a...
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