Stone v. U.S., 81-1943

• Citation: 683 F.2d 449
• Decision Date: 09 July 1982
• Docket Number: No. 81-1943,81-1943
• Parties: Carl W. STONE, Sr., Appellant v. UNITED STATES of America.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 449

683 F.2d 449

221 U.S.App.D.C. 130

Carl W. STONE, Sr., Appellant v. UNITED STATES of America.

No. 81-1943.

United States Court of Appeals, District of Columbia Circuit.

Argued April 16, 1982.

Decided July 9, 1982.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 81-01278).

Robert A. Prince, with whom William E. Casselman, II, Washington, D. C., was on the brief, for appellant.

John Oliver Birch, Asst. U. S. Atty., with whom Charles F. C. Ruff, U. S. Atty., Washington, D. C., at the time the brief was filed, and Royce C. Lamberth, Kenneth M. Raisler, and Michael J. Ryan, Asst. U. S. Attys., Washington, D. C., were on the brief, for appellee.

Keith A. Rosenberg, Washington, D. C., was on the brief for amici curiae Seventy Army Reserve Officers in support of appellant.

Before WRIGHT and MIKVA, Circuit Judges, and BAZELON, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge J. SKELLY WRIGHT.

J. SKELLY WRIGHT, Circuit Judge:

The Tucker Act, 28 U.S.C. § 1346(a)(2) (1976), gives jurisdiction to the United States District Courts, concurrent with the United States Court of Claims, over back pay claims by government employees not exceeding $10,000 in amount. Cases seeking larger amounts must be brought in the Court of Claims, but plaintiffs may waive all claims in excess of $10,000 in order to remain within the jurisdiction of the District Court. In this case we hold that, when a plaintiff seeks government back pay and other monetary allowances, with a deduction for civilian earnings, a waiver of any net recovery in excess of $10,000 is sufficient to establish the District Court's jurisdiction.

I. THE JURISDICTION OF DISTRICT COURTS UNDER THE TUCKER ACT

The United States Court of Claims ¹ was established by Congress as a specialized tribunal to decide several categories of monetary claims brought by private parties against the United States government. See generally Glidden Co. v. Zdanok, 370 U.S. 530, 552-558, 82 S.Ct. 1459, 8 L.Ed.2d 671 (1962). In 1887 Congress passed the Tucker Act, which extended the jurisdiction of the Court of Claims and gave the regular federal courts concurrent jurisdiction over smaller claims against the federal government. Claims up to $1,000 were made cognizable in the District Courts; causes of action between $1,000 and $10,000 were placed within the jurisdiction of the Circuit Courts. Act of March 3, 1887, ch. 359, § 2, 24 Stat. 505. A person with a relatively small claim was thus given the option of bringing an action in the district of his residence rather than having to pursue it in the Court of Claims in Washington, D. C. See 1 J. Moore, Federal Practice P 0.65(2.-3) (2d ed. 1982).

Over the years Congress has modified the categories of claims cognizable under the Tucker Act in the Court of Claims and in the regular federal courts. ² When the Circuit Courts were abolished in 1911, the District Courts received concurrent jurisdiction with the Court of Claims over Tucker Act claims not exceeding $10,000, with specified exceptions. Act of March 3, 1911, ch. 231, § 24, 36 Stat. 1087, 1093. But the basic structure established in 1887 still exists: the Tucker Act places a monetary ceiling on claims against the United States which may be brought in the District Courts. 28 U.S.C. § 1346(a)(2) (1976).

Shortly after passage of the Tucker Act, Hill v. United States, 40 F. 441 (C.C.D.Mass.1889), established that the amount of a claim, for jurisdictional purposes, depended on the monetary recovery sought by the plaintiff. Even if a litigant's claim was worth more than $10,000, if he voluntarily waived his right to recover more than $10,000 he could remain within the jurisdiction of the regular federal courts, and would not be compelled to litigate in the Court of Claims. Such waivers are now well established in the Tucker Act case law. See, e.g., United States v. Johnson, 153 F.2d 846, 848 (9th Cir. 1946); Sutcliffe Storage & Warehouse Co. v. United States, 162 F.2d 849, 853 (1st Cir. 1947); Perry v. United States, 308 F.Supp. 245, 247 (D.Colo.1970), aff'd on other grounds, 442 F.2d 353 (10th Cir. 1971); Jones v. United States, 127 F.Supp. 31, 33 (E.D.N.C.1954); see generally 1 J. Moore, supra, P 0.65(2.-3) at 700.103 n.3; 14 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3567 at 219 (1976).

II. STATEMENT OF THE CASE

This case requires us to decide, in the specific context of a back pay claim involving deduction of civilian earnings, what constitutes a waiver sufficient to preserve the jurisdiction of the District Court under the Tucker Act. Appellant Stone waived any net recovery over $10,000 after deducting civilian earnings from back pay and other allowances. The government asserted, and the District Court agreed, that this waiver was inadequate because a plaintiff must waive all gross claims in excess of $10,000 without regard to offsets or deductions. ³

On November 20, 1975 appellant Stone, then a captain in the United States Army Reserve, was released from active duty pursuant to Army regulations because he had not been selected for promotion by two successive Promotion Selection Boards. Although 10 U.S.C. § 266 (1976) requires that reserve officers be included on selection boards which consider reserve officers for promotion, in 1974 and 1975 these boards consisted entirely of regular Army officers. Appellant therefore contends that his release from active duty in 1975 was illegal. He further asserts that the Army's subsequent establishment of reconstituted selection boards for 1974 and 1975, which included reserve officers, did not cure the defect. ⁴

Stone filed a complaint in the United States District Court for the District of Columbia on June 4, 1981, seeking reinstatement on active duty, correction of his military records, and monetary relief-active duty pay and allowances, pay for accrued leave, and compensation for actual medical and dental expenses (hereinafter "gross back pay")-with a deduction for his civilian earnings. The complaint waived any net recovery in excess of $9,999.99. Appendix to appellant's brief (App.) at 4. Contending that the District Court lacked jurisdiction over the case under the Tucker Act because the waiver was inadequate, the government moved to dismiss the case or in the alternative to transfer it to the Court of Claims pursuant to 28 U.S.C. § 1406(c) (1976). ⁵

On August 10, 1981 the District Court granted the motion to transfer, stating in a brief memorandum opinion that it lacked jurisdiction over the case because "(p)laintiff's complaint does not properly waive all gross claims in excess of $10,000 against the United States. Instead, it only waives any claim in excess of $10,000 for the amount remaining after deductions of a set-off for his civilian earnings." App. at 6-7.

III. SUFFICIENCY OF APPELLANT'S WAIVER

We conclude that the District Court erred in holding that appellant's waiver was inadequate. In the context of a back pay claim, in which civilian earnings and readjustment pay must be deducted from gross back pay to determine the amount to which a plaintiff is entitled, it is sufficient to waive any net recovery in excess of $10,000. Stone's waiver reduced his claim to a "claim against the United States, not exceeding $10,000 in amount," within the meaning of the Tucker Act. 28 U.S.C. § 1346(a)(2) (1976).

Our determination is based on the nature of a back pay claim brought by a former government employee alleging wrongful discharge. By analogy to the law of contract, he may recover only the amount of his actual monetary loss. Compensation is designed to put him in as good a monetary position as he would have enjoyed if he had not been illegally dismissed from government service. See C. McCormick, Handbook of the Law of Damages § 40 (1935) (remedies for breach of contract); Restatement (Second) of Contracts § 347, comment a (1981). If he had continued in his government job, he would not have been able to earn a salary in another position, because government employees are required to devote their "complete services and undivided attention" to government service during working hours. Craft v. United States, 589 F.2d 1057, 1068 (Ct.Cl.1978). Therefore, any amounts earned in civilian employment during the period of his illegal separation from government service must be deducted from gross back pay. See 5 A. Corbin, Contracts § 1041 (1964) (gains made possible by defendant's breach); C. McCormick, supra, § 40; Restatement (Second) of Contracts, supra, § 347, comment e, illustration 13. ⁶

Deduction of civilian earnings from gross back pay is not a set-off or counterclaim in the traditional sense. ⁷ As the Court of Claims explained in a wrongful discharge case brought by a former military officer, "Although parties, and occasionally courts, sometimes refer to the deduction of civilian earnings in wrongful discharge pay cases as a setoff, traditionally this kind of deduction has been characterized as more analogous to mitigation of damages used as an offset against contracted-for salary." Motto v. United States, 360 F.2d 643, 645 (Ct.Cl.1966); see Craft v. United States, supra, 589 F.2d at 1068; 1 T. Sedgwick, A Treatise on the Measure of Damages § 63 (9th ed. 1920) (allowance for benefits resulting from defendant's wrongful act is not a recoupment or set-off). Unlike a genuine set-off, deduction of civilian earnings does not arise from an independent cause of action that would be maintainable by the government. Even if appellant's civilian earnings exceeded gross back pay in amount, the government is not entitled to an affirmative recovery. Dilley v. Alexander, 627 F.2d 407, 415 (D.C.Cir.1980); Craft v. United States, supra, 589 F.2d at 1068.

The amount of civilian earnings is simply one of the factors that the court must use in calculating appellant's entitlement to monetary compensation. For this reason we hold that, in a back pay...