Turping v. United States
913 F.3d 1060
Fed. Cir.2019Background
- Hanford Nuclear Reservation operations have been run by successive government contractors since WWII; DOE directed creation of the Hanford Multi-Employer Pension Plan (MEPP) in 1987 to provide pension benefits to employees of participating contractors.
- The MEPP is a contract among “Employers” (named contractors/subcontractors) and their “Employees”; the Government is not listed as a party. A Plan Administrator (established by Employers) administers funding and benefits, subject to DOE approval for amendments or financial-impact actions.
- In 1996 DOE transferred the Hanford management contract from Westinghouse Hanford Company (WHC) to Fluor Daniel Hanford (FDH); many employees continued with the same benefits, but some who moved to Lockheed as a subcontractor were told they would not receive prior benefits.
- In October 1996 MEPP was amended (retroactive) so that certain transferred employees remained in the MEPP but their pensions would be calculated under a “high-five” salary rule rather than based on total years of Hanford service; employees were told they could not challenge the change until retirement.
- Plaintiff Turping retired in 2014 and received benefits calculated under the high-five rule; in 2016 Turping and other former Lockheed employees sued the United States in the Court of Federal Claims under the Tucker Act, alleging an implied-in-fact contract with the Government to credit full years of Hanford service.
- The Claims Court dismissed for failure to state an implied-in-fact contract claim; the Federal Circuit affirmed, holding plaintiffs failed to show mutual intent or privity with the Government.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have an implied-in-fact contract with the U.S. | Government promised to fund MEPP obligations and Article 29 guarantees credit for total Hanford service, creating mutual intent to contract with employees | MEPP shows contractual relation only between employers and employees; Government is not a party and did not intend to be bound | No implied-in-fact contract; plaintiffs failed to show mutual intent/privity |
| Whether Government involvement/control creates privity | Government’s direction and approvals over MEPP show it intended to bind itself | Degree of government involvement does not create contractual privity with subcontractors/employees | Government’s involvement insufficient to establish privity |
| Statute of limitations accrual for breach | Plaintiffs: claim accrues at retirement when benefits are payable (2014 for Turping) | Government: some alleged breaches occurred in 1996–97 and could start the limitations period earlier | Court: accrual occurred at retirement (Normal Retirement Date); claims not time-barred for Turping |
| Whether allegations that Government acted "through" MEPP or as agent are plausible | Plaintiffs allege Government statements/agency through MEPP created obligations | Government contends such allegations are not plausibly pleaded and MEPP is not Government’s contract | Allegations fail Iqbal/Twombly plausibility standard; agency/"acting through" MEPP not established |
Key Cases Cited
- Hanlin v. United States, 316 F.3d 1325 (Fed. Cir.) (elements required for implied-in-fact contract with government)
- Cienega Gardens v. United States, 194 F.3d 1231 (Fed. Cir.) (government involvement does not create privity with subcontractors)
- Erickson Air Crane Co. v. United States, 731 F.2d 810 (Fed. Cir.) (subcontractors lack privity to sue government under Tucker Act)
- Marshall N. Dana Constr., Inc. v. United States, 229 Ct. Cl. 862 (Ct. Cl.) (federal funding/regulation does not create contractual obligation by U.S.)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (complaint must plead plausible factual matter to survive dismissal)
- Franconia Associates v. United States, 536 U.S. 129 (U.S.) (rules on repudiation and accrual for breach/anticipatory breach)