The Portland Mint v. The United States

• Decision Date: 11 June 2022
• Docket Number: 20-518C
• Parties: THE PORTLAND MINT, Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

THE PORTLAND MINT, Plaintiff, v. THE UNITED STATES, Defendant.

No. 20-518C

United States Court of Federal Claims

June 11, 2022

Reissued for Publication: June 28, 2022 ^[1]

Lee Vartan, Chiesa Shahinian &Giantomasi PC, West Orange N.J., for plaintiff.

Alison S. Vicks, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington D.C., for defendant.

With her were Deborah A. Bynum, Assistant Director, Commercial Litigation Branch, Patricia M. McCarthy, Director, Commercial Litigation Branch, and Brian M. Boynton, Principal Deputy Attorney General, Civil Division. Apryl Whitaker, United States Mint, of counsel.

OPINION

MARIAN BLANK HORN JUDGE

FINDINGS OF FACT

Plaintiff the Portland Mint, filed an initial complaint in the United States Court of Federal Claims, followed by an amended complaint and a second amended complaint. At issue before the court is defendant's motion to dismiss plaintiff's second amended complaint. In the second amended complaint plaintiff claims jurisdiction under the Tucker Act, 28 U.S.C. § 1491(a)(1) (2018). According to plaintiff, the claims in the second amended complaint are "founded upon the Constitution, a regulation of an executive department, and upon an implied contract with the United States." In plaintiff's second amended complaint, plaintiff asserts five counts: (1) a regulatory violation for failure to make payments pursuant to the Redemption Program established in 31 C.F.R. § 100.11; (2) a breach of an implied-in-fact contract between plaintiff and the United States Mint (U.S. Mint); (3) a breach of the implied duty of good faith and fair dealing between plaintiff and the U.S. Mint; (4) a taking without just compensation in violation of the Takings Clause of the Fifth Amendment of the United States Constitution; and (5) a claim for Equal Access to Justice Act (EAJA) payments in the event plaintiff is found to be the prevailing party. Plaintiff seeks $8,510,250.00, according to plaintiff, "for the mutilated coins" the U.S. Mint "accepted and redeemed."

In Count One of plaintiff's second amended complaint, "Violation of Federal Regulation," plaintiff alleges that the U.S. Mint "agreed to accept, and did accept from the Portland Mint, a total of approximately 425,100 pounds of dimes, quarters, and halfdollars, and 1,819 pounds of nickels," with a "total approximate value" of "$8.51 million," an amount less precise than in plaintiff's prayer for relief of $8,510,250.00 in its second amended complaint. Plaintiff further alleges that U.S. Mint employees "accepted the Portland Mint's shipment, redeemed it, and melted it," that the U.S. Mint "used the melted shipment to manufacture new coin roll," that "[t]he shipment contained genuine, mutilated U.S. coins," and that plaintiff "has suffered economic damages" because of the U.S. Mint's refusal to pay for plaintiff's shipment. According to plaintiff's second amended complaint, the failure of the U.S. Mint to pay the Portland Mint after having accepted and melted down the coins, and, according to plaintiff, having "redeemed" the coins, amounts to a violation of the U.S. Mint's regulations, which is actionable in this court.

In Count Two, "Breach of Implied Contract," plaintiff alleges that plaintiff and the U.S. Mint "demonstrated a mutual intent to contract," whereby plaintiff "offered to deliver an agreed-upon number of mutilated coins to the [U.S.] Mint, and the [U.S.] Mint agreed to accept that agreed-upon number of mutilated coins at Olin Brass on August 1 and 2, 2018." (alterations added). Plaintiff further alleges that "the communications and actions" by Anthony Holmes, Jr., the Materials Handler Supervisor at the U.S. Mint, demonstrated that "arranging and contracting for the delivery of mutilated coins was an integral part of Mr. Holmes's duties as a supervisor," and that "the [U.S.] Mint agreed to pay the Portland Mint for the value of the coins" by accepting delivery. (alteration added). According to plaintiff's second amended complaint, the failure by the U.S. Mint to pay following this alleged acceptance of plaintiff's coins constitutes breach of an implied-in-fact contract.

In Count Three, "Breach of Implied Duty of Good Faith and Fair Dealing," plaintiff alleges that the U.S. Mint "refused to pay the Portland Mint for the property the [U.S.] Mint accepted and redeemed," and that "the [U.S.] Mint has attempted to justify its breach of contract by declaring 'counterfeit' what it already determined to be genuine when it redeemed the Portland Mint's shipment and used it to manufacture new coin roll." (alterations added). Plaintiff argues that the U.S. Mint has "destroy[ed] the Portland Mint's reasonable expectations of the fruits of the contract," and, thereby, breached the implied duty of good faith and fair dealing. (alteration added).

In Count Four, "Violation of Fifth Amendment Takings Clause," plaintiff alleges that the U.S. Mint "accepted, redeemed and melted" plaintiff's August 2018 shipment of coins, but has not "paid the Portland Mint for the redeemed and melted coins," "returned the coins to the Portland Mint," or "provided the Portland Mint with anything of value for accepting and taking its property." According to plaintiff's second amended complaint, the U.S. Mint's actions represent a "permanent impairment of the Portland Mint's property" which "constitutes a taking without just compensation in violation of the Fifth Amendment."

In Count Five, "Equal Access to Justice Act," plaintiff argues that the Equal Access to Justice Act, 28 U.S.C. § 2412 (2018), entitles plaintiff to reasonable attorney's fees and expenses if plaintiff is the prevailing party, unless the defendant's position is found to be "'substantially justified.'"

Plaintiff's original and first amended complaints had asserted a number of claims which were not within the jurisdiction of the United States Court of Federal Claims. The successive complaints filed by plaintiff dropped some of those alleged grounds for relief, leaving the allegations in the second amended complaint for consideration by the court after defendant filed its motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) (2020) of the Rules of the United States Court of Federal Claims (RCFC) and for failure to state a claim pursuant to RCFC 12(b)(6).

In its second amended complaint, plaintiff describes itself as an "off-sort coin processor" servicing "banks, armored carriers, and coin kiosk companies," among other businesses, "across several states and countries." According to the second amended complaint, since 2012, plaintiff "has redeemed approximately 21 shipments of mutilated coins through the Redemption Program, and been paid approximately $229,632 by the [U.S.] Mint." (alteration added). As noted above, plaintiff claims $8,510,250.00 as the value of the mutilated coins plaintiff submitted to the U.S. Mint. According to plaintiff's second amended complaint, plaintiff "aggregates mutilated U.S. coins, separates them by alloy, and bulk redeems them through the Redemption Program." Plaintiff indicates that a portion of the coins at issue in this case were "imported," that plaintiff "buys coins from international companies," and that the coins plaintiff "sought to redeem were from both domestic and foreign sources." There is no evidence in the public record currently before the court, however, which specifies the origin of all of the coins plaintiff submitted to the U.S. Mint in the above captioned case.

The parties both agree that the U.S. Mint "is the nation's sole manufacturer of legal tender coinage and is responsible for producing and circulating coinage for the nation to conduct its trade and commerce." According to plaintiff's second amended complaint, the U.S. Mint began operating the Mutilated Coin Redemption Program (the Redemption Program) in 1911, and the parties both agree that the U.S. Mint suspended the Redemption Program in November 2015. The parties both agree that the U.S. Mint resumed operation of the Redemption Program in January 2018. According to defendant's motion to dismiss the second amended complaint, the Redemption Program was suspended for a second time in July 2019 and has remained suspended.^[2] The Redemption Program allowed individuals and businesses to submit "bent and partial U.S. coins" and "redeem" them for payment at a rate established by regulation, at the time of the activity in this case: $4.5359 per pound for nickels and $20.00 per pound for dimes, quarters, and half-dollars. See 31 C.F.R. § 100.11(d) (2021). Plaintiff alleges that "[t]he [U.S.] Mint would melt the redeemed coins and use them to manufacture new coin roll." (alterations added). While for much of the Redemption Program's history only small shipments of coins were accepted, plaintiff alleges that beginning in about 1999, "businesses began to redeem a higher volume of mutilated coins with many of the coins originating from overseas, including China."

According to plaintiff's second amended complaint, in March 2015 the United States brought "a civil asset forfeiture action against three businesses that the government alleged were bulk redeeming counterfeit mutilated coins." Plaintiff was not among the parties to the civil asset forfeiture action, but plaintiff alleges "[i]n a seemingly coordinated response to the civil asset forfeiture complaint, the Department of Homeland Security detained mutilated coin shipments at the ports, including three of the Portland Mint's shipments." (alteration added). The Portland Mint and unidentified "others" brought suit as co-plaintiffs against the United States Department of Homeland Security (DHS) on October 29, 2015, seeking the release of the...