Written by: Amie Alexander, JD/MPS Candidate, William H. Bowen School of Law

The United States Court of Appeals for the Federal Circuit ruled on May 7, 2018 on an appeal from the United States Court of Federal Claims. The plaintiff appealed the Claims Court’s dismissal of his claim for lack of subject matter jurisdiction and failure to state a claim for which relief could be granted. The Court of Appeals affirmed the Claims Court’s decision.

Background on this Action

The plaintiff in this action was a prevailing claimant in a class action suit brought by a class of African-American farmers against the United States Department of Agriculture (USDA) for discrimination in farm loans, credit, and benefit programs. In resolution of this previous action, parties entered into a consent decree in the District Court for the District of Columbia. This decree established a two-track dispute resolution mechanism. (See Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999)).

The plaintiff filed a claim pursuant to one of those tracks which provided class members who were determined by an adjudicator to have been a victim of race discrimination a cash payment and forgiveness of debt owed to USDA debt in exchange for the class member dismissing their claims with prejudice and waiving rights to contest the decisions of the adjudicator. The monitor could reexamine the claim only if determined that “a clear and manifest error has occurred that is likely to result in a fundamental miscarriage of justice.” (See Pigford, 185 F.R.D. at 107-108).

The plaintiff was awarded a cash payment in 2001 after the adjudicator found discrimination in connection with his ownership loans, but not his operating or emergency loans. However, he was not awarded any debt relief. That year, the USDA mistakenly sent him a 1099-C tax form that indicated his USDA loans had been forgiven. The USDA subsequently sent a letter notifying him of the error. He sought reexamination, and upon reexamination, the adjudicator awarded debt relief for the ownership loans, but operating or emergency loans.

The plaintiff sued the USDA in the Claims Court for breach of the consent decree in April 2015, claiming that he was entitled to full debt relief, not just the operating loan debt. The complaint was dismissed for lack of subject matter jurisdiction and for failure to state a claim upon which relief could be granted.

The Appeals Court’s Review of the Claims Court’s Dismissal

Under the Tucker Act, the Claims Court has jurisdiction of claims against the United States “upon any express or implied contract with the United States.” 28 U.S.C. § 1491(a)(1). The Act carries a statute of limitations of six years, which normally accrues when a breach occurs.

The plaintiff argues that the Claims Court has jurisdiction over his complaint because the consent decree is a contract with the government. In response, the government argues that his claim cannot be based on the consent decree because he did not receive full debt relief as a result of the adjudication. The only basis the government acknowledges might constitute sufficient jurisdiction is the incorrect 1099-C tax forms, but argues that these are not contracts and even if they were, they would be barred by the statute of limitations.

The government also argued that consent decree did not promise any payment or debt relief, but only established a procedural mechanism for resolving the claims of class members. Track A, through which the plaintiff’s claims were resolved, provided debt relief only when the adjudicator found the loans to be tainted with discrimination.

The Court agreed with the government, first pointing out that even if the 1099-C tax forms could have created a contract between the plaintiff and the government, the claim would have had to have been filed within six years of the 2002 notification of error. Because the original complaint was not filed until 2015, the Court determined the Claims Court properly dismissed the complaint for lack of subject matter jurisdiction.

Additionally, the Court stated that the plaintiff’s claim that he was entitled to full debt relief was not actually a remedy provided for by the consent decree. Rather, the consent decree established procedures for class members to petition for debt relief, which the plaintiff followed. Therefore, the Court determined that the Claims Court correctly dismissed the complaint for failure to state a claim upon which relief could be granted.