Nuclear Transport & Storage, Inc. v. U.S.

• Decision Date: 17 October 1989
• Docket Number: No. 89-5052,89-5052
• Citation: 890 F.2d 1348
• Parties: NUCLEAR TRANSPORT & STORAGE, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1348

890 F.2d 1348

NUCLEAR TRANSPORT & STORAGE, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 89-5052.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 5, 1989.

Decided Oct. 17, 1989.

Before MARTIN and MILBURN, Circuit Judges, and CONTIE, Senior Circuit judge.

CONTIE, Senior Circuit Judge.

Nuclear Transport & Storage, Inc. (Nuclear Transport), appeals from the order of the district court granting the United States', defendant-appellee's, motion to dismiss for failure to state a claim and lack of subject matter jurisdiction, treating it in part as a motion for summary judgment, and denying plaintiff's motion for a preliminary injunction and declaratory relief 703 F.Supp. 660. For the following reasons, we affirm the order of the district court.

I.

Plaintiff-appellant Nuclear Transport is the holder of a radioactive material license issued by the Cabinet for Human Resources of the Commonwealth of Kentucky. The license is required by and granted pursuant to the Atomic Energy Act ("the Act"), 42 U.S.C. Sec. 2131 (1982), ¹ to store unenriched uranium hexaflouride (nuclear feed material). Nuclear Transport is the operator of a facility which stores unenriched uranium feed material owned by utilities and other private entities until it is ready to be enriched ² by the Department of Energy (DOE) so that it may be used as fuel in nuclear power generators.

Nuclear Transport alleges that DOE, in a change from prior policy and in violation of the Atomic Energy Act, 42 U.S.C. Secs. 2011-2284 (1982), has deprived it of its property interest in its license by providing free storage of unenriched uranium under the guise of feed usage agreements. Nuclear Transport alleges that because it was encouraged by DOE assurances that the federal government did not intend to provide storage services to its enrichment customers, it developed facilities for storage of 2,150 cylinders of feed material, but since 1984 because of DOE's alleged secret activities in negotiating feed usage agreements, its business has declined by approximately 75%.

DOE enters into feed usage agreements with some of its enrichment customers. Under a feed usage agreement, DOE takes title to the nuclear feed material which a customer wishes to deliver to DOE in advance of the date calculated for enrichment and DOE determines that it is to DOE's advantage to accept early delivery. DOE maintains that among the advantages that may arise from early delivery are obtaining a steady supply of unenriched uranium to keep the plants in operation, flexibility in operating the enrichment plants, and increasing the nation's stockpile of enriched uranium. Because of the exigencies of scheduling, the unenriched uranium received by DOE is in many cases not the same enriched uranium ultimately delivered to the customer and, thus, DOE argues, no actual "storage" of a customer's uranium occurs at all.

Nuclear Transport alleges that DOE's motive for entering into feed usage agreements as part of its enrichment contracts is to provide free storage to enrichment customers who otherwise would give their enrichment business to competitors of DOE in foreign countries who provide free storage of unenriched uranium.

Nuclear Transport's complaint in this action sought injunctive and declaratory relief against DOE to prevent future storage and money damages in excess of five million dollars, alleging that DOE had violated the Atomic Energy Act and denied plaintiff the value of its license without due process of law. In addition to the United States, three DOE officials were named as defendants in their official and individual capacities. During the course of argument, Nuclear Transport characterized the alleged statutory violations as Bivens-type constitutional torts.

The district court dismissed plaintiff's claims for lack of subject matter jurisdiction and failure to state a claim. ³ The court held that plaintiff's claims for damages against the United States and the individual defendants in their official capacities were barred by sovereign immunity. It held that plaintiff's Bivens claim against the individual defendants was barred because plaintiff had failed to allege any factual connection between the actions challenged and the named defendants. Finally, the district court held that plaintiff had failed to state a claim for the deprivation of a constitutionally protected property interest. The court stated that because it had considered matters outside the pleadings, ⁴ it was transforming the government's 12(b)(6) motion to a motion for summary judgment. Because the court found that plaintiff had failed to state a claim for relief, it also denied its motion for a preliminary injunction and declaratory relief.

Nuclear Transport timely filed this appeal.

II.

This court must first decide whether the district court committed reversible error by treating the government's motion to dismiss under Rule 12 as a motion for summary judgment under Rule 56 without giving the parties reasonable opportunity to respond.

Fed.R.Civ.P. 12(b) states in relevant part:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Rule 56(c) states: "The motion shall be served at least 10 days before the time fixed for hearing."

Nuclear Transport argues that it was not notified of the court's decision to convert the government's Rule 12(b)(6) motion for failure to state a claim into a Rule 56 motion for summary judgment and was denied an opportunity to present all pertinent material.

This court has held that conversion to summary judgment without usual notice to the parties is ground for reversal only when the conversion results in prejudice. Hoopes v. Equifax, Inc., 611 F.2d 134, 136 (6th Cir.1979). We find that no prejudice can be shown. The district court assumed the allegations of the complaint and ultimately dismissed plaintiff's claim for lack of jurisdiction and failure to state a claim. The district court in essence determined that plaintiff failed to state a claim because it found as a matter of law that there was no statutory violation or violation of policy which resulted in a denial of due process. In Oppenheimer v. Morton Hotel Corp., 324 F.2d 766, 768 (6th Cir.1963), this court held that it would be a useless procedure to reverse the district court for failure to provide ten days to respond to a summary judgment motion if only a substantive law question is involved. Plaintiff in the present case cannot show how the opportunity to submit additional material would have any effect on the court's analysis. Therefore, we hold that the district court did not commit reversible error in granting summary judgment.

III.

Nuclear Transport next argues that the district court erred in holding that its claims for damages and injunctive relief against the United States and the individual defendants in their official capacities were barred by the doctrine of sovereign immunity.

The United States Supreme Court held in United States v. Mitchell, "It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction. 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983). See also United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941); 14 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure Sec. 3654, p. 186 (2d ed. 1985). The doctrine of sovereign immunity acts as a bar to suit against the United States unless there has been an explicit waiver by the government. United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976).

A.

The Tucker Act states in pertinent part The United States Claims Court shall have jurisdiction to render judgment upon any claim against the United States 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, or for liquidated or unliquidated damages in cases not sounding in tort.

28 U.S.C. Sec. 1491. The Supreme Court in Mitchell held that the Tucker Act constitutes a waiver of sovereign immunity with respect to the specified type of claims. 463 U.S. at 212, 103 S.Ct. at 2965.

Nuclear Transport argues that the claim it is making against the government is one sounding in tort and thus the Court of Claims is not the appropriate court for it to pursue its damage claim. It contends that it is bringing a Bivens action against the government and the individual defendants in their official capacities for the commission of a constitutional tort and that Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), constitutes a waiver of sovereign immunity.

We find no merit in this argument. Justice Harlan in his concurrence in Bivens noted, "[h]owever desirable a direct remedy against the Government might be as a substitute for individual official liability, the sovereign still remains immune to suit." 403 U.S. at 410, 91 S.Ct. at 2012 (Harlan, J. concurring). This court in Mid-South Music Corp. v. U.S. Dep't of the Treasury has held, "Since the United States has not waived its sovereign-immunity and consented expressly to be sued in a Bivens-type action, such suits cannot be brought against the United States." 579 F.Supp. 481, 483 (1983), aff'd in part, rev'd in part, 756 F.2d 23 (6th Cir.1984). Other circuits agree. See Holloman v. Watt, 708 F.2d 1399, 1402 (9th Cir.1983), cert. denied, 466 U.S. 958, 104 S.Ct. 2168, 80 L.Ed.2d 552...