Spodek v. U.S.

• Decision Date: 01 December 1998
• Docket Number: No. CIV.A. 98-3159.,CIV.A. 98-3159.
• Citation: 26 F.Supp.2d 750
• Parties: Rosalind T. SPODEK, et al., Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

26 F.Supp.2d 750

Rosalind T. SPODEK, et al., Plaintiffs, v. UNITED STATES of America, Defendant.

No. CIV.A. 98-3159.

United States District Court, E.D. Pennsylvania.

December 1, 1998.

COPYRIGHT MATERIAL OMITTED

Axel A. Shield, II, Bensalem, for Plaintiffs.

Cedric D. Bullock, U.S. Attorney's Office, James G. Sheehan, U.S. Attorney's Office, Philadelphia, PA, for U.S.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

I. BACKGROUND

Plaintiffs are the lessors under two (2) leases. The defendant is the United States Postal Service ("USPS" or "defendant"), the lessee under both leases.¹ Plaintiffs claim that defendant remains in possession of the leased premises after the expiration of the leases without paying the full amount of the rent due under the leases. Plaintiffs seek damages equal to $106,390.30 for unpaid post-lease rent as of April 1, 1998, and continuing to the present.

Lease I concerns an office building. The initial term of Lease I ran from January 15, 1962 to January 14, 1977 with four (4) five-year renewals. The renewal options were all exercised, the last one on January 15, 1992. Therefore, under the last renewal option exercised, the lease expired on January 14, 1997. Lease II concerns a parking lot adjacent to the building leased under Lease I. The term of Lease II ran from December 1, 1991 to January 31, 1997.

The issue in this case, as to each of the two (2) leases, is whether jurisdiction to adjudicate these claims lies with either the Agency Board of Contract Appeals or the United States Court of Federal Claims, as claimed by the defendant, or this Court, as claimed by the plaintiffs.

II. LEGAL ANALYSIS

A. 39 U.S.C. § 409(a) Grants Jurisdiction to this Court Over Actions in which the United States Postal Service is a Party.

Plaintiffs rely for its jurisdictional claim on 39 U.S.C. § 409(a) (the Postal Reorganization Act ("PRA")), which provides that "the United States district courts shall have original but not exclusive jurisdiction over all actions brought by or against the Postal Service." Precisely because the USPS is a party, defendant contends that the Court is without jurisdiction to hear the case. Defendant points to 39 U.S.C. § 409(a), which waives sovereign immunity for actions involving the USPS. Defendant explains that that statute is a "sue and be sued" statute rather than a grant of jurisdiction to federal district courts. 39 U.S.C. § 401(1) ("The Postal Service shall have the following general powers: (1) to sue and be sued in its own name ...."). The Third Circuit has addressed this issue directly.

In Licata v. United States Postal Service, 33 F.3d 259 (3d Cir.1994), plaintiff brought a breach of contract action against defendant, the USPS. The district court granted the USPS' motion to dismiss on the grounds that the court did not have subject matter jurisdiction pursuant to 39 U.S.C. § 409(a), and that the Tucker Act barred contract actions against the USPS in the district court.² The Third Circuit reversed, finding that "the words of section 409(a) `are a clear and unequivocal grant of jurisdiction to the district courts ... [and] the words of the first sentence of Section 409(a) convey a meaning as plain as any we can recall seeing.'" Id. at 261 (citing Continental Cablevision v. United States Postal Service, 945 F.2d 1434, 1437 (8th Cir.1991)). While acknowledging a division among federal courts as to the proper interpretation of section 409(a), the Third Circuit concluded that it is section 401(1) that speaks to the USPS' sovereign immunity and ability to sue and be sued, and that "absent some other statutory bar, section 409(a) grants district courts subject matter jurisdiction over actions to which the Postal Service is a party." Licata, 33 F.3d at 262-63. Therefore, in this Circuit, it is settled that 39 U.S.C. § 409(a) granted jurisdiction to the district courts over matters in which the USPS is a party to the action.

B. Does the CDA Divest the District Court of Jurisdiction and Vest Exclusive Jurisdiction Over Certain Procurement Contracts in the Agency Board of Contract Appeals or the United States Court of Federal Claims?

Defendant contends that, even if section 409(a) granted the district court jurisdiction to hear cases where the USPS was a party, the later enacted Contract Disputes Act ("CDA"), 41 U.S.C. §§ 601-613, divested the district court of such jurisdiction. The CDA was enacted on November 1, 1978 and became effective on March 1, 1979. Its sweep is broad, establishing a "comprehensive system for adjudicating particular contract claims against the government."³ Prefab Products, Inc. v. United States Postal Service, 600 F.Supp. 89, 90 (D.Fla.1984). Section 602(a) of the CDA provides that:

Unless otherwise specifically provided herein, this chapter applies to any express or implied contract ... entered into by an executive agency for —

(1) the procurement of property, other than real property in being;

(2) the procurement of services;

(3) the procurement of construction, alteration, repair or maintenance of real property; or

(4) the disposal of personal property.

41 U.S.C. § 602(a); see also Hudome v. United States Postal Service, No. 87-1565, 1988 WL 33926, at *1 (E.D.Pa. Mar.31, 1988). Expressly, the CDA states that the USPS is an executive agency covered under its terms. 41 U.S.C. § 601(2).⁴

The courts are divided as to whether the CDA vests exclusive jurisdiction over certain contract claims against an executive agency, such as the USPS, in either the United States Court of Federal Claims or the Agency Board of Contract Appeals, rather than in the district court. Some courts have concluded that the CDA divests district courts of jurisdiction over certain contract claims, including those in which the USPS is a party. See Campanella v. Commerce Exchange Bank, 137 F.3d 885, 890-91 (6th Cir.1998) (holding that the detailed provisions of the CDA preempted more general jurisdictional provisions, and that even if the Small Business Administration's "sue and be sued" clause was an independent jurisdictional grant, the CDA, in effect, withdrew that grant); A & S Council Oil Co., Inc. v. Lader, 56 F.3d 234, 241-42 (D.C.Cir.1995) ("The Contract Disputes Act, however, appears to be the paradigm of a `precisely drawn, detailed statute' that preempts more general jurisdictional provisions.") (citing Brown v. GSA, 425 U.S. 820, 834, 96 S.Ct. 1961, 48 L.Ed.2d 402 (1976)); United States of America v. J & E Salvage Co., 55 F.3d 985, 987 (4th Cir.1995) ("The review procedures under the CDA are exclusive of jurisdiction in any other forum. Thus, federal district courts lack jurisdiction over government claims against contractors which are subject to the CDA."); Jackson v. United States Postal Service, 799 F.2d 1018, 1022 (5th Cir.1986) (noting that "[w]ith the enactment of the Contract Disputes Act, the Claims Court [currently known as the United States Court of Federal Claims] received exclusive jurisdiction to hear any claim arising from a breach of a USPS procurement contract covered by the Act.").

Other courts hold, rather, that the CDA provides a nonexclusive avenue in which contract disputes against executive agencies can be resolved. See Wright v. United States Postal Service, 29 F.3d 1426, 1428 (9th Cir. 1994) (concluding that the CDA is not the exclusive basis for litigation of claims relating to government contracts, and that the CDA did not eliminate subject matter jurisdiction over subcontractors' actions to establish and foreclose equitable liens against the USPS); Marine Coatings of Alabama, Inc. v. United States of America, 932 F.2d 1370, 1377 (11th Cir.1991) (holding that while the Federal Tort Claims Act and the CDA both waive immunity, "there is no need to apply either if another method of bringing suit is available," and that "the CDA does not supersede admiralty provisions providing for another means of recovery"); Pike, L.P. v. United States Postal Service, 886 F.Supp. 487, 490 (E.D.Pa. 1995) ("Thus, where a contract falls under both the CDA and the PRA, § 409(a) empowers district courts to hear disputes arising out of that contract.").⁵ The Third Circuit expressly reserved deciding this issue in Licata v. United States Postal Service, 33 F.3d 259, 264 n. 6 (3d Cir.1994).

This Court finds that the CDA vests exclusive jurisdiction with either the Agency Board of Contract Appeals or the United States Court of Federal Claims over claims regarding procurement contracts entered into by an executive agency, such as the USPS. See Campanella v. Commerce Exchange Bank, 137 F.3d 885, 890-91 (6th Cir. 1998); A & S Council Oil Co., Inc. v. Lader, 56 F.3d 234, 241-42 (D.C.Cir.1995); United States of America v. J & E Salvage Co., 55 F.3d 985, 987 (4th Cir.1995).

In a very recent decision, Campanella v. Commerce Exchange Bank, 137 F.3d 885 (6th Cir.1998), the Sixth Circuit found that under the CDA, the district court lacked subject matter jurisdiction over a contract action asserted against the Small Business Administration ("SBA"), an executive agency. The Sixth Circuit rejected plaintiff's argument that, irrespective of the CDA, the "sue and be sued" provision in the SBA statute, similar to the one contained in 39 U.S.C. § 409(a), conferred jurisdiction upon district courts. Id. at 890-91. In finding that the CDA preempted the SBA's "sue and be sued statute," and divested the district court of jurisdiction to hear the contract claim against the SBA, the court concluded that the CDA "appears to be the paradigm of a `precisely drawn, detailed statute' that preempts more general jurisdictional provisions [and] purports to provide final and exclusive resolution of all disputes arising from government contracts covered by the statute." Id. at 891 (citing A & S Council Oil Co. Inc. v. Lader, 56 F.3d 234, 241-42 (D.C.Cir.1995)).

Additionally, in United States of America v. J & E Salvage Co., 55 F.3d 985 (4th Cir.1995), the Fourth Circuit held...