106 Fed. Cl. 118
Fed. Cl.2012Background
- Plaintiff John Doe filed a contract breach action in the CSP against the USDA/NRCS on September 14, 2010, seeking damages for underpayments under CSP contracts.
- The CSP is administered by NRCS under the CSP statute (16 U.S.C. §§ 3838-3838c) and CSP regulations (7 C.F.R. §§ 1469.1-1469.36).
- A stay was entered in November 2010 pending the Meyers case; Meyers was dismissed in December 2010 and the stay ended June 29, 2011.
- A third amended complaint (Sept. 30, 2011) added John Earman and alleged five counts related to CSP payments and contract rights.
- Defendant moved to dismiss for lack of subject matter jurisdiction and for failure to state a claim; plaintiff sought discovery, which the court initially denied as to jurisdictional issues.
- The court held Counts II–V are not subject to exhaustion requirements; Count I is subject to exhaustion and was dismissed without prejudice, with Counts II–V remaining viable and discovery limited as to Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether exhaustion of administrative remedies is required for Counts II–V | Earman family: Counts II–V arise from general rates; not subject to exhaustion. | Exhaustion applies to all CSP claims that challenge agency decisions, but general rates are excluded only for certain categories. | Counts II–V not subject to exhaustion; viable counts survive. |
| Whether Count I required administrative exhaustion before suit | Count I involves underpayments to individuals; should be appealable constraints-based. | Count I involves individual breach of contract terms; subject to 1469.31 and contract appendix exhaustion. | Count I required exhaustion; dismissed without prejudice. |
| Whether Part 11/Part 614 appeals were available for Counts I–III | Administrative avenues exist for contracting disputes under parts 11 and 614. | Part 614 excludes matters of general applicability; part 11 provides formal appeals; issues unclear. | Count I appeal was available and required; Counts II–III not subject to such exhaustion because they are general-rate challenges. |
| Whether Counts IV–V are subject to exhaustion | IV–V concern renewal rights and takings; not subject to general rate or exhaustion constraints. | Regulatory and statutory challenges fall within general applicability or required procedures. | Counts IV–V are not subject to exhaustion and survive; defendant withdrew jurisdictional challenges on these counts. |
Key Cases Cited
- Me. Yankee Atomic Power Co. v. United States, 225 F.3d 1336 (Fed. Cir. 2000) (exhaustion prerequisite to suit under government contracts)
- McCarthy v. Madigan, 503 U.S. 140 (U.S. 1992) (administrative remedies must be exhausted to obtain judicial review)
- Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (U.S. 1938) (no judicial relief until prescribed administrative remedy exhausted)
- Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746 (Fed. Cir. 1988) (subject matter jurisdiction and exhausting administrative remedies considerations)
- Alder Terrace, Inc. v. United States, 161 F.3d 1372 (Fed. Cir. 1998) (jurisdictional and exhaustion principles in federal claims)
- Scheuer v. Rhodes, 416 U.S. 232 (U.S. 1974) (presume undisputed facts true for jurisdictional review)