Labatte v. United States, 899 F.3d 1373

Background

In Keepseagle class-action settlement against USDA (Keepseagle Settlement Agreement), the government created a non-judicial two-track claims process: Track A (fixed $50,000 relief, no discrimination proof) and Track B (up to $250,000; required a sworn, non-family witness showing similarly situated white farmers).
LaBatte, a class member, pursued Track B seeking $202,700.52 and identified two proposed witnesses, Russell Hawkins and Tim Lake, whose draft declarations supported his claim.
Hawkins and Lake were instructed by federal officials (both later-affiliated with BIA) not to sign or assist in finalizing the declarations; LaBatte alleges government interference prevented him from submitting finalized sworn statements required by Track B.
The Track B Neutral denied LaBatte’s claim for failure to provide a sworn, personal-knowledge statement naming similarly situated white farmers; LaBatte later filed in the Court of Federal Claims asserting breach of the Settlement Agreement and breach of the covenant of good faith and fair dealing, seeking monetary damages.
The Claims Court dismissed for lack of subject-matter jurisdiction, reasoning the Agreement’s finality clause precluded judicial review of Track B determinations; the Federal Circuit reversed, holding the suit alleges a distinct breach of the settlement and Tucker Act jurisdiction exists for money damages.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Settlement Agreement’s finality clause precludes suit for breach of the Agreement	LaBatte: finality clause bars judicial review of Neutral’s decision but does not bar a separate breach-of-contract suit against the United States for interfering with witnesses	U.S.: finality clause waived judicial review; claimant contracted out of court review of decisions under the Agreement	Court: finality clause does not bar a new suit alleging breach of the settlement; dismissal on that basis was error
Whether Court of Federal Claims has Tucker Act jurisdiction for money damages for alleged breach	LaBatte: breach of contract presumptively entitles him to money damages; Tucker Act jurisdiction therefore exists	U.S.: Agreement does not expressly provide for money damages on breach; no indication funds or remedies exist now	Court: presumption that money damages are available for breach of government contract suffices; jurisdiction exists
Whether LaBatte sufficiently pleaded breach of the Agreement and covenant of good faith and fair dealing	LaBatte: government directly prevented key witnesses from testifying, undermining the claims process and interfering with performance	U.S.: government conduct was consistent with the Agreement or, even if wrongful, harmless because Neutral would have rejected the unsigned declarations as unspecific	Court: complaint plausibly alleges both breach of the Agreement (U.S. ‘‘no role’’ clause) and breach of the implied covenant by interfering with performance; harmless-error defense not resolved at pleadings stage
Whether agency rules (Interior regs) authorize withholding employee testimony and preclude breach claim	LaBatte: regulations permit testimony in personal capacity; preventing testimony may be unjustified	U.S.: BIA/Interior policies counsel against employee testimony; that supports government action	Court: regulations allow voluntary testimony in personal capacity; whether rules bar Hawkins/Lake here is factual and for remand to resolve

Key Cases Cited

Trusted Integration, Inc. v. United States, 659 F.3d 1159 (Fed. Cir. 2011) (standard for accepting factual allegations when deciding jurisdictional motion)
Banks v. United States, 741 F.3d 1268 (Fed. Cir. 2014) (de novo review of legal questions in Court of Federal Claims decisions)
Catullo v. Metzner, 834 F.2d 1075 (1st Cir. 1987) (suit to enforce settlement agreement alleges a new cause of action)
Link v. Department of Treasury, 51 F.3d 1577 (Fed. Cir. 1995) (waiver of appeal rights in litigation does not waive breach-of-settlement claims)
Saksenasingh v. Secretary of Educ., 126 F.3d 347 (D.C. Cir. 1997) (settlement finality provisions do not bar breach claims)
Holmes v. United States, 657 F.3d 1303 (Fed. Cir. 2011) (presumption that money damages are available for government contract breach supports Tucker Act jurisdiction)
Rocky Mountain Helium, LLC v. United States, 841 F.3d 1320 (Fed. Cir. 2016) (same presumption that breach of government contract ordinarily yields money damages)
Sanders v. United States, 252 F.3d 1329 (Fed. Cir. 2001) (discussing remedies for government contract breach)
Stockton E. Water Dist. v. United States, 583 F.3d 1344 (Fed. Cir. 2009) (implied duty of good faith and fair dealing in government contracts)
Metcalf Constr. Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014) (implied duty cannot be applied to contradict explicit contract terms)
Centex Corp. v. United States, 395 F.3d 1283 (Fed. Cir. 2005) (covenant prevents destroying other party’s reasonable expectations under contract)