Orange Ridge, Inc. v. State of Fla.

• Decision Date: 22 July 1988
• Docket Number: No. 88-0016-CIV.,88-0016-CIV.
• Citation: 696 F. Supp. 600
• Parties: ORANGE RIDGE, INC., etc., Plaintiff, v. STATE OF FLORIDA and United States of America, Defendants.
• Court: U.S. District Court — Southern District of Florida

696 F. Supp. 600

ORANGE RIDGE, INC., etc., Plaintiff, v. STATE OF FLORIDA and United States of America, Defendants.

No. 88-0016-CIV.

United States District Court, S.D. Florida.

July 22, 1988.

Eddie L. Fields, Miami, Fla., for plaintiff.

J. Christopher Kohn, Dept. of Justice— Civil Div., Washington, D.C., Joseph Lewis, Jr., Dept. of Legal Affairs, Tallahassee, Fla., for State of Fla.

ORDER

HASTINGS, District Judge.

THIS CAUSE comes before the Court on Defendants' Motions to Dismiss the complaint for lack of subject-matter jurisdiction. For the reasons discussed below, the Court finds that its limited federal jurisdiction has not been properly invoked and the motions to dismiss are granted.

I. Facts

Orange Ridge, Inc. operates its business under the name of New Frontier Package & Lounge ("NFP"). One of the services offered to patrons is that of check cashing, for which NFP charges a nominal fee. The types of checks cashed by NFP originate from various sources, including the treasury of the State of Florida (for welfare) and the United States Treasury (for social security and income tax refunds) the federal Social Security fund. "A few years after cashing certain federal social security and income tax refund checks", Complaint at par. 8, and "a short period after cashing certain state welfare checks", Complaint at par. 17, the United States and the State of Florida each filed respective claims with the plaintiff's banks and thereafter seized funds from plaintiff's accounts to recover the proceeds from checks allegedly cashed illegally. The seizure of funds occurred after it was discovered that the checks were stolen, signatures forged, and illegally cashed.¹ Plaintiff alleges the United States provided some sort of notice prior to the seizure of funds. Complaint at par. 8. The State of Florida, however, did not provide prior notice of its intention to seize the monies. Complaint at par. 18.

Plaintiff contends the seizures are in violation of its rights under the due process clauses of the Fifth and Fourteenth Amendments. Jurisdiction is asserted under those constitutional amendments and under 28 U.S.C. §§ 1331, 2401(a). Plaintiff seeks damages for its losses, claiming those to have been in excess of $50,000.

II. The Standard Governing a Motion to Dismiss For Lack of Subject-Matter Jurisdiction

The United States and the State of Florida each move to dismiss the complaint on the grounds that sovereign immunity is a jurisdictional bar to this Court.² On a motion to dismiss for lack of subject-matter jurisdiction, the burden is on the plaintiff to show, assuming the allegations of the complaint to be true, that the court's limited federal jurisdiction has been properly invoked. Poirier v. Hodges, 445 F.Supp 838 (M.D.Fla 1978). A complaint may be dismissed for lack of subject-matter jurisdiction on any one of three bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Williamson v. Tucker, 645 F.2d 404 (5th Cir. May 1981).³

Ordinarily, "where the defendant's challenge to the court's jurisdiction is also a challenge to the existence of a federal cause of action, the proper course ... is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of plaintiff's case."⁴ Id. at 415, citing Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1945); Sierra Club v. Shell Oil Co., 817 F.2d 1169, 1172 (5th Cir.1987). Thus, a defendant challenging jurisdiction under Rule 12(b)(1) is forced to proceed under Rule 12(b)(6) (for failure to state a claim) or Rule 56 (summary judgment). Id. Judicial economy is therefore promoted by converting indirect attacks to federal claims into direct challenges, and if no federal claim exists, then dismissing on the merits of the case. Id.

There are, however, exceptions to the Bell requirement that a district court reach the merits of a federal claim. A dismissal for want of jurisdiction may be nonetheless proper when:

the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.

Bell at 682, 66 S.Ct. at 776. These two exceptions to the Bell v. Hood standard are met, and dismissal for want of jurisdiction is appropriate, only where plaintiff's claim "has no plausible foundation" or "is clearly foreclosed by a prior Supreme Court decision." Bell v. Health-Mor, Inc., 549 F.2d 342 (5th Cir.1977).

Of course, if the 12(b)(1) challenge does not implicate a federal claim, the court may find the jurisdictional basis to be lacking and dismiss accordingly, without finding the underlying claim to be "immaterial" or "insubstantial". Williamson at 415 n. 9. This approach is appropriate, for example, where the basis for diversity jurisdiction is absent. Id; Sierra Club at 1172 n. 3. Thus, where the jurisdictional issue is not intertwined with the merits of the claim, the jurisdictional challenge may be separately addressed. Id. at 416 n. 10.

In the present case, defendants challenge the subject-matter jurisdiction of the court, and not whether a sufficient basis for subject-matter jurisdiction has been alleged in the complaint. Simply stated, the issues in this case are whether the United States and the State of Florida have waived sovereign immunity such that they are amenable to suit in this federal district court.⁵ The Court first examines the complaint to determine whether plaintiff's claims have "no plausible foundation" or are "clearly foreclosed by a prior Supreme Court decision." Bell v. Health-Mor, 549 F.2d 342.⁶ If the claims are not within these Bell v. Hood exceptions, then the Court must treat the motions to dismiss as motions for failure to state a claim, and not for want of jurisdiction. Marine Coatings, 792 F.2d 1565.

A. Sovereign Immunity of the United States

The United States, as sovereign, is immune from suit except as it waives its immunity, and the terms of its waiver, as set forth expressly and specifically by Congress, define the parameters of a federal court's subject matter jurisdiction to entertain suits brought against it.

Ware v. United States, 626 F.2d 1278, 1286 (5th Cir.1980), citing United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976); Honda v. Clark, 386 U.S. 484, 87 S.Ct. 1188, 18 L.Ed.2d 244 (1967); Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427 (1952); United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058 (1941). Thus, for NFP to be heard by this Court it must point to an express and specific waiver of immunity by the United States. NFP appears to assert that the United States is amenable to suit under four distinct provisions: (1) the due process clause of the Fifth Amendment to the U.S. Constitution; (2) the due process clause of the Fourteenth Amendment to the U.S. Constitution; (3) 28 U.S.C. § 1331; and (4) 28 U.S.C. § 2401(a).⁷ None of these provisions, however, relinquish the sovereign immunity of the United States, and plaintiff's contentions in this regard can be readily disposed.

First, the Fifth Amendment does not waive the immunity of the United States. United States v. Timmons, 672 F.2d 1373, 1380 (11th Cir.1982), citing Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 410, 91 S.Ct. 1999, 2012, 29 L.Ed.2d 619 (1971) (J. Harlan concurring).

Second, the Fourteenth Amendment is directed at the States and applies only to conduct that can be characterized as "state action." Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 925, 102 S.Ct. 2744, 2747, 73 L.Ed.2d 482 (1982). Thus, "only a State or a private person whose action `may be fairly treated as that of the State itself,' may deprive a person of `an interest encompassed within the Fourteenth Amendment's protection.'" Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 157, 98 S.Ct. 1729, 1734, 56 L.Ed.2d 185 (1978) (citations omitted) (emphasis added). Accordingly, the Fourteenth Amendment does not waive the federal government's immunity because it does not apply to federal action. Taylor v. United States, 320 F.2d 843, 846 (9th Cir.1963).

Third, while 28 U.S.C. § 1331 governs federal question jurisdiction, that provision, however, does not of itself waive the United States' immunity. See, e.g., B.K. Instrument, Inc. v. United States, 715 F.2d 713 (2d Cir.1983); Sheehan v. Army and Air Force Exchange Service, 619 F.2d 1132 (5th Cir.1980), reversed on other grounds 456 U.S. 728, 733 n. 3, 102 S.Ct. 2118, 2121 n. 3, 72 L.Ed.2d 520 (1982) (neither side having sought review, Court declined to address issue); Holloman v. Watt, 708 F.2d 1399 (9th Cir.1983).

Finally, 28 U.S.C. § 2401(a) is the general statute of limitations. These enactments are statutes of repose, representing a legislative judgment that "the right to be free of stale claims in time comes to prevail over the right to prosecute them." United States v. Kubrick, 444 U.S. 111, 119, 100 S.Ct. 352, 358, 62 L.Ed.2d 259 (1979). As such, § 2401(a) is not a waiver of sovereign immunity, but solely a condition upon which the United States may be sued, United States v. Mottaz, 476 U.S. 834, 106 S.Ct. 2224, 2229, 90 L.Ed.2d 841 (1986), to be strictly observed and not easily overridden with exceptions. Soriano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (1956). Section 2401 presents only the terms of a waiver of immunity as expressed by Congress and does not constitute the waiver itself. Ware, 626 F.2d 1278.

Consequently, Plaintiff's claims against the United States have no plausible foundation or have been clearly foreclosed by prior Supreme Court decisions.⁸ Bell v. Health-Mor, Inc., 529 F.2d 342. Because the United States is immune from suit in this instance, the Court lacks subject-matter jurisdiction to...