Lead Opinion
Richard Higbie appeals the Court of Federal Claims’ dismissal of his claim for money damages against the United States Government for alleged breach of a confidentiality provision in an alternative dispute resolution agreement. The Court of Federal Claims determined that a purely non-monetary form of relief was available for any potential breach and, as a result, required Mr. Higbie to show the agreement could be fairly interpreted to contemplate damages. The Court of Federal Claims found that Mr. Higbie failed to make the required showing and dismissed his case for lack of jurisdiction under the Tucker Act. We agree that Mr. Higbie has not shown that the agreement in question can be fairly interpreted to contemplate money damages in the event of breach. As a result, the Court of Federal Claims lacked jurisdiction under the Tucker Act. We therefore affirm,.
BACKGROUND
-Mr. Higbie was employed as a Senior Criminal Investigator in the Dallas office of the Bureau of Diplomatic Security, a division of the United States State Department (“State Department”). In January 2009, Mr. Higbie contacted an equal employment opportunity (“EEO”) counsel to complain of alleged reprisal by the State Department for activity he had engaged in which he claimed was protected under the Civil Rights Act of 1964. Mr. Higbie filed a formal complaint in April 2009 and submitted a request that his complaint be processed through the State Department’s alternative dispute resolution (“ADR”) program. The Government approved his case for mediation.
During the lead up to the mediation, Mr. Higbie repeatedly inquired whether the mediation proceedings would be confidential. On several occasions, a State Department representative confirmed that they would be. According to Mr. Higbie, he was “purposefully negotiating” for confidentiality of the mediation by his repeated
Three of Mr. Higbie’s supervisors, including Marian Cotter and Jeffrey Thomas, signed the mediation agreement that would govern the proceedings. That agreement included the following confidentiality provision:
Mediation is a confidential process. Any documents submitted to the mediator(s) and statements made during the mediation are for settlement purposes only.
J.A. 127 (underlining in original). The parties did not resolve their dispute through mediation, and the EEO investigation continued. After the mediation, Ms. Cotter and Mr. Thomas provided affidavits to the EEO investigator, which are the basis for Mr. Higbie’s claim for breach of contract. In their affidavits, Ms. Cotter and Mr. Thomas discussed the nature and content of Mr. Higbie’s statements in the mediation proceedings and cast his participation in the proceedings in a negative light.
In October 2011, Mr. Higbie filed suit in the Federal District Court for the Northern District of Texas, asserting numerous causes of action, including claims for retaliation and discrimination. Mr. Higbie’s complaint also included a claim for violation of the Alternative Dispute Resolution Act of 1996 (“ADRA claim”) arising out of the two affidavits, provided by Ms. Cotter and Mr. Thomas, to the EEO-assigned investigator. According to Mr. Higbie, the information obtained through the mediation process was governed by a strict confidentiality provision outlined in the mediation agreement, and the disclosure of the affidavits constituted a breach of that provision.
The State Department moved to dismiss the ADRA claim for failure to state a claim upon which relief can be granted because the ADRA statute does not provide for recovery of money damages for breach of a confidentiality agreement. The district court granted the motion and also granted Mr. Higbie leave to file an amended complaint. Through amendment, Mr. Higbie removed his ADRA claim and, in its stead, alleged a claim sounding in contract for breach of the confidentiality provision. Mr. Higbie moved to transfer the newly added contract claim to the Court of Federal Claims. The district court granted the motion, leaving Mr. Higbie’s other claims pending before the district court. Mr. Higbie then filed a transfer complaint in the Court of Federal Claims.
After the transfer, the Government moved in the Court of Federal Claims to dismiss Mr. Higbie’s complaint for lack of jurisdiction on the grounds that the mediation agreement did not meet the judicially-imposed requirement that the agreement in question be money-mandating. In opposing the motion, Mr. Higbie argued that all mediation agreements contemplate money damages for breach of confidentiality agreements. Mr. Higbie drew support from a single case from California dealing with money damages, a single state statute from Florida discussing money damages for breach of confidentiality in mediation, and a series of other cases having no relation to the award of money damages for breach of a confidentiality provision.
The Court of Federal Claims found Mr. Higbie’s arguments unpersuasive. The court acknowledged the presumption that a damages remedy is available for breach of contract. Where a purely non-monetary remedy exists, however, the court explained that it can require a showing that the contract can be fairly read to contemplate monetary damages before it may ex
Mr. Higbie appeals the dismissal of his complaint. We have jurisdiction under 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review a dismissal by the Court of Federal Claims for lack of jurisdiction de novo. Holmes v. United States,
I
The Tucker Act confers jurisdiction upon the Court of Federal Claims over “any claim against the United States founded ... upon any express or implied contract with the United States.... ” 28 U.S.C. § 1491(a)(1) (2011). This jurisdictional provision operates to waive the sovereign immunity of the United States for claims premised on other sources of law, such as a contract or statute. United States v. Navajo Nation,
Contract law is a separate source of law compensable under the Tucker Act. See id. As with private agreements, when a government contract is breached, there is a presumption that a damages remedy will be available. Sanders v. United States,
The Government, however, has not consented to suit under the Tucker Act for every contract. Rick’s Mushroom Serv., Inc. v. United States,
II
Mr. Higbie argues that he presented sufficient evidence to demonstrate that the mediation agreement can fairly be interpreted as contemplating monetary damages. To support his contention, Mr. Hig-
In response, the Government argues that there is no indication the terms of the mediation agreement contemplated money damages. Regarding Mr. Higbie’s requests that the Government confirm the confidentiality of the proceedings, the Government contends that Mr. Higbie has not shown that he contemplated money damages for a bréach of the confidentiality provision, or that he communicated any such belief to the Government. Rather, according to the Government, the confidentiality provision in question appears to be nothing more than the standard clause that appears in all such mediation agreements. Relying on Rule 408 of the Federal Rules of Evidence, which deems inadmissible as evidenc® the “conduct or statements made in compromise negotiations,” the Government argues the appropriate, non-monetary remedy in such circumstances is exclusion of any improper disclosures from future proceedings.
As a threshold issue, we must decide whether it was appropriate for the Court of Federal Claims to require Mr. Higbie to show that the agreement fairly contemplated monetary damages. While the agreement does not provide a monetary remedy, it does restrict the use of statements made during mediation to “settlement purposes only.” J.A. 27 (emphasis added). In other words, any statements made during the mediation must not be used for any purpose other than settlement. Thus, the agreement itself provides a remedy for the breach of the non-disclosure provision: exclusion of statements made during mediation from proceedings unrelated to the mediation. Per the terms of the agreement, the affidavits of Ms. Cotter and Mr. Thomas could be excluded from the EEO investigation. The appropriateness of this remedy is consistent with Rule 408 of the Federal Rules of Evidence, which excludes the content of parties’ negotiations from other legal proceedings. This provision requiring the exclusion of statements made during the mediation proceeding from any other proceeding is a purely non-monetary remedy provided by the agreement. It follows that the Court of Federal Claims did not err in imposing the requirement to show that the agreement could be fairly interpreted as contemplating money damages. Holmes,
Next, we consider whether Mr. Higbie has shown that the agreement can be fairly interpreted as contemplating money damages. On appeal, Mr. Higbie argues the terms of the agreement itself show that it contemplates money damages, but he does not point to a single provision in the agreement indicating money damages were contemplated. Having reviewed the 'agreement, we perceive no error in the Court of Federal Claims’ finding that it does not expressly contemplate money damages. As such, the terms of the agreement itself do not support the assertion that the agreement can be fairly interpreted to contemplate money dam
Similarly, Mr. Higbie relies on his negotiations with the Government, without pointing to any communication in which it is apparent that either party contemplated the availability of money damages for breach of the agreement. Thus, the confidentiality discussions also do not support the assertion that the agreement contemplated money damages.
Finally, Mr. Higbie’s appeal to non-binding and inapplicable legal authority and governmental policy is unavailing. Mr. Higbie cited only non-controlling state law before the Court of Federal Claims and cites no case law in his appeal brief before this court. The single statute he cites governs breaches in Florida. It is well-settled that state law generally does not govern disputes involving contracts to which the Government is a party. Prudential Ins. Co. of Am. v. United States,
Conclusion
The Court of Federal Claims did not err in requiring Mr. Higbie to show that the mediation agreement could be fairly interpreted to contemplate money damages because non-monetary relief was available. Mr. Higbie has failed to make such a showing. The Court of Federal Claims correctly concluded that it does not have jurisdiction over Mr. Higbie’s case under the Tucker Act and, therefore, properly dismissed his claim for breach.
AFFIRMED
Notes
. In Cunningham v. United States,
Dissenting Opinion
dissenting.
I do not see a sufficient justification for excepting the confidentiality promise in the mediation agreement at issue from the strong general rule that contracts implicitly carry a damages remedy for their breach. In my view, the default damages remedy is available to Mr. Higbie if he proves entitlement to it, and the Court of Federal Claims therefore has jurisdiction under the Tucker Act. I would reverse the jurisdictional dismissal and remand for the parties to address the merits. Accordingly, I dissent from the affirmance of the Court of Federal Claims’ judgment dismissing Mr. Higbie’s case for lack of jurisdiction.
A
This court’s decision in Holmes v. United States, 657 F.3d 1303 (Fed.Cir.2011),
There is good reason to follow, rather than depart from, that well-established and broadly applicable default rule here. For one thing, strong adherence to background rules is especially important with contracts. In contract interpretation, “a court properly takes account of background legal rules — the doctrines that typically or traditionally have governed a given situation when no agreement states otherwise. Indeed, ignoring those rules is likely to frustrate the parties’ intent and produce perverse consequences.” US Airways, Inc. v. McCutchen, 569 U.S. -,
More specifically, money damages are available as a remedy for breach of confidentiality provisions of contracts in a variety of contexts. See, e.g., Youtie v. Macy’s Retail Holding, Inc.,
The limited case law on confidentiality commitments in mediation agreements seems to be in accord. E.g., Bethlehem Area Sch. Dist. v. Zhou, No. 09-03493,
The default rule is not absolute, but I do not see a basis for an exception in this ease.
1. As Holmes noted, one exception applies when “[a] contract expressly disavow[s] money damages.” Holmes,
The confidentiality provision declares that “[mjediation is a confidential process” and that “statements made during the mediation are for settlement purposes only.” J.A. 127 (underlining deleted). The government and the majority view this as providing affirmatively for the “remedy” of exclusion from evidence. Even if that characterization is accepted, however, the provision cannot reasonably be taken to eliminate the default monetary remedy. The specification of the evidentiary “remedy” has a ready explanation that in no way implies ouster of the monetary remedy. After all, one familiar background principle is that the availability of monetary damages, where such damages are adequate, renders ^available equitable relief, such as specific performance of the confidentiality/settlement-use-only promise.
If the new remedy, or other aspects of the contractual context, were somehow inconsistent with preserving the background rule, an implication of override might be warranted. Cf. United States v. Fausto,
Moreover, the government has not shown — it has not even meaningfully contended — that evidentiary exclusion will always, or even regularly, suffice to cure all normally compensable injuries from breach of confidentiality. It is easy to imagine reputational harms and even job-
2. This court has recognized an exception to Tucker Act jurisdiction for a contract claim based on “[a]n agreement ‘entirely concerned with the conduct of parties in a criminal case.’ ” Holmes,
The criminal-case exception traces back to Kania. There, the Court of Claims considered whether an agreement not to prosecute made between an Assistant United States Attorney and a plaintiff was money-mandating. Kania,
In Sanders, this court stressed the narrowness of the criminal exception articulated in Kania, explaining that the Kania exception disrupts the normal presumption of money damages for breach of contract only “where the agreement is entirely concerned with the conduct of parties in a criminal case.” Sanders,
In light of these precedents, the criminal exception has no bearing here. Mr. Hig-bie’s mediation agreement falls entirely outside of criminal law. And because mediation is not a legal setting foreign to this court’s docket, Mr. Higbie’s contract does not give rise to the jurisdictional concern animating Kania and Sanders.
Rick’s involved an agreement between the government and a waste facility: the government was to provide specifications detailing how the facility could be constructed and operated in a conservation-friendly manner; the facility — if it complied — was to be entitled to payments to help defray the facility’s costs. Id. at 1341, 1344. Under the agreement, the government provided specifications and paid the facility for following them. Nevertheless, the facility was sued by a third party for allegedly violating state and federal environmental laws, and the facility eventually settled. Id. at 1341-42. When the facility asked the government for indemnification, the government refused, and the facility then sued the government in the Court of Federal Claims. Id. at 1342. This court affirmed the jurisdictional dismissal of the suit.
The parties, notably, did not contend that the contract itself was a source of substantive law that created a right to money damages. See generally Brief for Plaintiff-Appellant, Rick’s,
The absence of a straight contract-based contention fits with a rationale this court expressed in discussing one of the claims that the facility actually made; namely, the absence of authority to obligate funds in the government official that signed the agreement. The Anti-Deficiency Act prohibits procurement agencies and employees from “entering into a contract for future payment of money in advance of, or in excess of, an existing appropriation.” Hercules Inc. v. United States,
Perhaps a full understanding of the context in Rick’s would make clear the inconsistency of any monetary remedy with the statutory and regulatory regime under which the cost-sharing agreement was made in that case. But whatever the reach of Rick’s, I see no reason for extending its result to this case.
C
It may well be that Mr. Higbie cannot succeed on his damages claim for breach of
. Restatement (Second) of Contracts § 359(1) (1981) (“Specific performance or an injunction will not be ordered if damages would be adequate to protect the expectation interest of the injured party.”); see also Texas v. New Mexico,
. The government has not argued that the jurisdictional issue here turns on whether the officials who entered into the agreement with Mr. Higbie lacked authority to obligate funds in the event of breach. Indeed, when asked at oral argument whether the officials had authority to obligate funds, the government