Silver State Land LLC v. United States
| Decision Date | 06 May 2020 |
| Docket Number | No. 19-688C,19-688C |
| Parties | SILVER STATE LAND LLC, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
CORRECTED
Breach of land sale contract; Federal Land Policy and Management Act; Bureau of Land Management; 43 U.S.C. § 1713; 43 C.F.R. Subparts 2710 - 2711; invitation for bids; auction; land patent; incorporation by reference; RCFC 12(b)(6); issue preclusion; collateral estoppel; damages election.
Seth H. Locke, Perkins Coie, LLP, Washington, DC, for plaintiff.
Isaac B. Rosenberg, United States Department of Justice, Civil Division, Washington, DC, for defendant. With him on the briefs were Joseph H. Hunt, Assistant Attorney General, Civil Division, Robert E. Kirschman, Jr., Director, and Allison Kidd-Miller, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC.
As frequently occurs in this Court, we once again are called upon to address an alleged breach of a government contract "entered into and performed pursuant to a complex statutory and regulatory scheme[,]" as well as the nature of the relationship between that scheme and the contract at issue. Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1373 (Fed. Cir. 1998). The complexity of this matter is compounded by prior Administrative Procedure Act ("APA") litigation between the Plaintiff, Silver State Land, LLC ("Silver State"), and the government before the United States District Court for the District of Columbia, as well as a subsequent appeal from the district court to the United States Court of Appeals for the District of Columbia Circuit.1
Before this Court, the central issue is whether the government must pay damages for its alleged breach of a contract to convey a tract of public land to Silver State. The government, in its motion to dismiss Silver State's first amended complaint ("Complaint") pursuant to Rule 12(b)(6) of the Rules of the Court of Federal Claims ("RCFC"), maintains that Silver State's breach claim is precluded as a matter of law. In the government's view, the Bureau of Land Management ("BLM" or the "Agency")2 properly declined to transfer the land in question pursuant to statutory provisions that, according to the government, were incorporated into the parties' contract. The government further argues that Silver State's contract claim is barred under the doctrine of issue preclusion (also known as collateral estoppel) due to the parties' prior APA litigation, which centered on BLM's alleged statutory and regulatory duty to transfer the land at issue. The government also moves for dismissal on the grounds that Silver State seeks damages of a type that it may not recover as a matter of law, even assuming the government had breached the contract at issue.
The government concedes that it entered into the land sale contract, as Silver State alleges. Because the Court rejects the government's interpretation of the contract at issue and the application of issue preclusion to plaintiff's claims here, as well as the government's damages argument - among other subsidiary and miscellaneous arguments - the Court DENIES the government's motion to dismiss Count I of the Complaint. Because the Court finds that the parties had an express land sale contract, however, the Court GRANTS the government's motion to dismiss Count II of the Complaint, which alleges breach of an implied-in-fact contract.
This case involves a land sale contract - formed pursuant to a process prescribed by statute and regulation - that the Agency allegedly breached when it refused todeliver title to Silver State via a land patent, a document formally transferring public land to a purchaser.4
Silver State first filed a lawsuit in the United States District Court for the District of Columbia challenging, pursuant to the APA, the Agency's "decision not to issue the patent for the Property." Silver State I, 145 F. Supp. 3d at 125. After the district court denied Silver State's motion for summary judgement and entered judgment for the Agency, Silver State appealed. The United States Court of Appeals for the District of Columbia Circuit affirmed the district court's decision. Silver State II, 843 F.3d at 993. Silver State then filed its breach of contract claim in this Court.
The following background section first provides an overview of the statutory and regulatory process that governed the formation of the disputed land sale contract,then discusses the Complaint's factual allegations relevant to the government's motion dismiss, and finally summarizes Silver State's prior APA litigation.
The Federal Land Policy and Management Act of 1976 ("FLPMA") is a complex statute that provides for a nevertheless straightforward process by which BLM may enter into contracts to sell tracts of federally-owned public land. In particular, the FLPMA and its implementing regulations govern the process for the offer, acceptance, consideration, and authority for land sale contracts executed pursuant to that statute.
Prior to 1976, "[i]n various enactments, Congress empowered United States citizens to acquire title to, and rights in, vast portions of federally owned land" by purchasing land from the federal government. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 875 (1990). Congress recognized, however, that the government's "[m]anagement of the public lands under these various laws [was] chaotic." Id. at 876. As a result, and due to "the need to provide guidance and a comprehensive statement of congressional policies concerning the management of the public lands, Congress enacted the [FLPMA]." Rocky Mountain Oil & Gas Ass'n v. Watt, 696 F.2d 734, 737-38 (10th Cir. 1982).
The FLPMA — which BLM today considers its organic statute5 — "contain[s] many interdependent sections in order to provide the BLM with a versatile framework for its management efforts." Id. at 738. Section 203 of the FLPMA, codified at 43 U.S.C. § 1713, is the primary statute at issue in this case and governs BLM's sales of tracts of public land. Pub. L. 94-579, October 21, 1976, 90 Stat. 2743 (codified at 43 U.S.C. § 1713) [hereinafter "Section 1713" or "§ 1713"].
Section 1713 of Title 43 of the United States Code — governing "Sales of public land tracts" — begins by defining the types of tracts of public land BLM may sell. In particular, the FLPMA provides that BLM may sell tracts of public land "where, as a result of land use planning . . . the Secretary determines that the sale of such tractmeets" one of three "disposal criteria."6 43 U.S.C. § 1713(a). After imposing certain additional requirements on BLM's sales of "land of agricultural value and desert in character"7 and "tracts in excess of two thousand five hundred acres,"8 neither of which considerations is applicable in this case, the FLPMA mandates that BLM cannot sell tracts of public land for "less than their fair market value as determined by the Secretary." Id. § 1713(d). The FLPMA further directs BLM to "determine . . . tracts of public lands to be sold on the basis of the land use capabilities and development requirements of the land." Id. § 1713(e).
After BLM identifies a tract of public land for a proposed sale, the FLPMA delineates the procedures that BLM must follow to invite and consider offers to purchase that land. In general, BLM must conduct sales of — and receive offers to purchase — tracts of public land pursuant to "competitive bidding procedures to be established by the Secretary." Id. § 1713(f) (emphasis added). BLM also may employ "modified competitive bidding" procedures — or the Agency may even sell land "without competitive bidding" (called a "direct sale") — when the "Secretary determines it necessary and proper in order (1) to assure equitable distribution among purchasers of lands, or (2) to recognize equitable considerations or public policies, including but not limited to, a preference to users[.]" Id.
In addition to detailing BLM's procedures for seeking and receiving offers to purchase tracts of public land identified for sale, the FLPMA governs the process for BLM's acceptance of an offer. Id. § 1713(g) (). In particular, the FLPMA provides BLM with only three, discrete optionsupon receipt of offers from prospective, qualified land purchasers; BLM: (1) "shall" accept the offer; (2) "shall" reject the offer; or (3) "may refuse to accept any offer or may withdraw any land or interest in land from sale under this section [after] determin[ing] that consummation of the sale would not be consistent with this Act or other applicable law."9 Id. Thus, BLM may decline to accept any particular offer to purchase the land being sold, or it may reverse course and decide not to subject the identified parcel of land to sale at all, but the agency must elect one of those choices "no later than thirty days after the receipt of" a purchase offer. Id.10
In addition to governing BLM land sales, the FLPMA vests the Secretary of the Interior with authority to "promulgate rules and regulations to carry out the purposes of this Act and of other laws applicable to the public lands." 43 U.S.C. § 1740. Consistent with that provision, the Secretary promulgated regulations to "implement the sale authority of [Section 1713]." 43 C.F.R. § 2710.0-1. Those regulations are contained in 43 C.F.R. Subparts 2710 and 2711.
Subpart 2710 specifies "General Provisions" that apply to BLM's public land sales. Those "General Provisions" address, among other topics, the purpose, authority,11 and policy underlying the regulations. In that regard, the regulations' objective - consistent with the FLPMA's terms - is to "provide for the orderlydisposition at not less than fair market value of public lands identified for sale as part of the land use planning process." 43...
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