Dobyns v. United States
915 F.3d 733
| Fed. Cir. | 2019Background
- Jay Dobyns, an ATF agent who infiltrated the Hells Angels, settled with ATF in 2007 for past security failures; the settlement included an integration clause and paragraph 10 stating the Agency "will comply with all laws regarding or otherwise affecting the Employee’s employment by the Agency."
- After the settlement, ATF withdrew Dobyns’ and his family’s fictitious identities (completed May 2008) despite prior threat assessments indicating ongoing risk; ATF Internal Affairs later faulted that withdrawal.
- In August 2008 a fire substantially damaged Dobyns’ home; ATF’s response and investigation were later criticized by IAD and ATF review boards.
- Dobyns sued in the Court of Federal Claims alleging breach of the 2007 agreement; at trial the Claims Court found no breach of express terms but awarded $173,000 for breach of the implied duty of good faith and fair dealing (emotional distress damages).
- After judgment, Dobyns sought Rule 60 relief (and related discovery) alleging DOJ misconduct; the Claims Court (via a special master) found no basis for Rule 60 relief. The government appealed the implied-duty ruling; Dobyns cross-appealed the Rule 60 denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 60 relief was warranted for alleged DOJ/agency misconduct and whether relief would permit sanctions discovery | Dobyns sought reopening or further proceedings (and discovery) to pursue sanctions/fees based on alleged misconduct | Government argued Rule 60 cannot be used to seek sanctions and Dobyns offered no non-futile basis to vacate judgment | Denial of Rule 60 relief affirmed: movant failed to show vacating judgment would be non‑futile; Rule 60 not a vehicle for affirmative relief like sanctions |
| Whether the government breached implied duty of good faith and fair dealing in the 2007 settlement | Dobyns argued ATF’s withdrawal of identities, mismanaged arson response, and failure to reform procedures undermined the settlement’s purpose (security) and thus breached the implied covenant | Government argued any implied-duty claim must be tethered to an actual contract term; parol evidence cannot add duties beyond the integrated agreement | Reversed: Claims Court erred. Implied-duty breach must be grounded in and not expand express contract obligations; here no specific contractual promise was undermined |
| Whether paragraph 10 ("comply with all laws regarding or otherwise affecting the Employee’s employment") incorporated ATF orders/regulations so that their breach yields monetary relief | Dobyns argued "all laws" includes ATF orders/regulations; agency practice and witness testimony show parties so understood | Government and Claims Court: contract language differentiates "law, rule or regulation" from "agency practice and procedure," and integration/precludes parol evidence to expand terms | Affirmed that paragraph 10 does not incorporate ATF orders as part of "all laws" for purposes of creating a monetary contract obligation |
| Whether parol evidence (witness testimony/requests for admission) can create contract duties not in integrated agreement | Dobyns relied on negotiator and employee testimony and admissions responses to show parties intended broader duties | Government argued parol evidence cannot add or modify an integrated, fully written agreement; admissions did not establish incorporation | Court held parol evidence cannot be used to vary an integrated contract to impose new duties; the Claims Court erred in relying on parol evidence to infer a broad safety obligation |
Key Cases Cited
- Metcalf Constr. Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014) (limits on implied duty of good faith tied to contract terms)
- Precision Pine & Timber, Inc. v. United States, 596 F.3d 817 (Fed. Cir. 2010) (implied duty cannot create obligations not in contract)
- Centex Corp. v. United States, 395 F.3d 1283 (Fed. Cir. 2005) (government action interfering with contracted benefits can breach implied duty)
- Northrop Grumman Info. Tech., Inc. v. United States, 535 F.3d 1339 (Fed. Cir. 2008) (requirements for incorporating extrinsic material by reference into a contract)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (sanctions and attorney‑conduct as collateral matters)
- Willy v. Coastal Corp., 503 U.S. 131 (1992) (courts retain jurisdiction over collateral issues like fees/sanctions after losing jurisdiction over merits)