Griswold v. Potter

Full title: RUTHIE GRISWOLD and IRMA COLEMAN, Plaintiffs, v. JACK POTTER, Postmaster…

Court: United States District Court, W.D. Michigan

Date published: Oct 15, 2003

Case No. 1:03-CV-429 (W.D. Mich. Oct. 15, 2003)

Opinion

Case No. 1:03-CV-429

October 15, 2003

ORDER

GORDON QUIST, District Judge

In accordance with the Opinion filed this date,

IT IS HEREBY ORDERED that Defendants' Motion To Dismiss (docket no. 17) and Plaintiffs' Motion For Leave To File An Amended Complaint (docket no. 23) are DENIED AS MOOT based upon the Court's determination that it lacks jurisdiction over Plaintiffs' claims.

IT IS FURTHER ORDERED that the Clerk is directed to TRANSFER this case back to the United States Court of Federal Claims pursuant to 28 U.S.C. § 1631.

OPINION

Plaintiffs, Ruthie Griswold and Irma Coleman, have sued Defendant, alleging claims for breach of settlement agreements. Defendant has moved the Court to dismiss for lack of jurisdiction, arguing that Plaintiffs have failed to bring their action under the proper statute and that Plaintiffs have failed to name the proper defendant — the United States. In response, Plaintiffs have moved to amend their complaint to allege that their claims arise under 28 U.S.C. § 1331. For the reasons set forth below, the Court concludes that it lacks subject matter jurisdiction over Plaintiffs' claims and will transfer the case back to the Court of Federal Claims pursuant to 28 U.S.C. § 1631.

Background

On August 12, 1998, Plaintiffs, who were former transitional employees of the Postal Service, filed a complaint against Defendant in this Court.¹ In that case, captioned Griswold v. Henderson, No. 4:98-CV-117 (W.D. Mich.) (the "1998 case"), Plaintiffs alleged claims for discrimination in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e to 2000e-17. On or about December 15, 1999, the parties reached an agreement to settle the claims and entered into written settlement agreements. As part of the settlement agreements, Defendant agreed to consider Plaintiffs for future employment with the Postal Service and to notify Plaintiffs' counsel of the date and time of the next Civil Service Exam. (12/15/99 Stipulation Settlement Agreements ¶¶ 5, 6.) On February 29, 2000, the Court entered an Order dismissing the 1998 case with prejudice.

1 The complaint was against William J. Henderson, who was then the United States Postmaster General. Dorothy Johnson, who is not a plaintiff in this case, was the third plaintiff in the previous case.

On February 11, 2002, Plaintiffs filed a complaint in this Court against Defendant alleging breach of contract claims based upon the settlement agreements arising from the 1998 case. That case was assigned Case No. 4:02-CV-19. Plaintiffs alleged in their complaint that Defendant breached the settlement agreements by failing to notify Plaintiffs' counsel of the time and location of the exam, although one and possibly more exams have since been held. Plaintiffs alleged that they have suffered damages as a result of the breach because they would have taken and passed the exam and returned to work for the Postal Service. On May 2, 2002, Defendant filed a motion to dismiss and strike jury demand. In the motion, Defendant asserted that Plaintiffs failed to properly allege jurisdiction because Plaintiffs failed to cite any statute giving this Court jurisdiction over Plaintiffs' breach of contract claims against the United States. Plaintiffs did not respond to the motion, but on June 5, 2002, this Court dismissed the case without prejudice pursuant to a stipulation signed by the parties.

Plaintiffs filed the instant complaint in the United States Court of Federal Claims on February 21, 2003, alleging the same breach of contract claims alleged in Case No. 402-CV-19 before this Court. Thereafter, Defendant filed a motion to dismiss, asserting that the Court of Federal Claims did not have jurisdiction over breach of contract actions premised upon Title VII settlement agreements because such claims arise under Title VII. Plaintiffs did not respond to the motion to dismiss, but they did file a motion to transfer the case to this Court pursuant to 28 U.S.C. § 1631. In their brief in support of their motion to transfer, Plaintiffs stated that they originally filed the case in this Court but agreed to dismissal based upon the representation of an Assistant United States Attorney that federal judges in this district had previously dismissed actions based upon breach of settlement agreements of underlying Title VII actions for lack of jurisdiction. On June 19, 2003, the Court of Claims entered an order granting both motions and ordering that the case be transferred to this Court pursuant to 28 U.S.C. § 1631.

Discussion

"[T]he federal courts are courts of limited jurisdiction and have a continuing obligation to examine their subject matter jurisdiction throughout the pendency of every matter before them." Mich. Employment Sec. Comm'n v. Wolverine Radio Co. (In re Wolverine Radio Co.), 930 F.2d 1132, 1137 (6th Cir. 1991); see also State Oil Co. v. Khan, 839 F. Supp. 543, 545 (N.D. Ill. 1993) (noting federal courts' "genera1 duty to jealously guard [their] limited jurisdiction"). Thus, this Court must "assure that in every case jurisdiction in the federal court is proper, and this is so regardless of whether jurisdiction is challenged by the parties."² Kardules v. City of Columbus, 95 F.3d 1335, 1356 (6th Cir. 1996) (Batchelder, J., concurring); see also Children's Healthcare is a Legal Duty. Inc. v. Deters, 92 F.3d 1412, 1419 (6th Cir. 1996) (stating that "[e]ven when the parties concede jurisdiction, we must satisfy ourselves of our own jurisdiction and that of the lower court").

2 While closely related to the issue of immunity, subject matter jurisdiction is a separate requirement that must be met. First Va. Bank v. Randolph, 110 F.3d 75, 78 (D.CCir. 1997); Arford v. United States, 934 F.2d 229, 231 (9th Cir. 1991).

In Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375, 114 S.Ct. 1673 (1994), the Supreme Court held that "[e]nforcement of [a] settlement agreement . . . whether through award of damages or decree of specific performance, is more than just a continuation or renewal of the dismissed suit, and hence requires its own basis for jurisdiction." Id. at 378, 114 S.Ct. at 1675-76. The Court also held that a federal court's ancillary jurisdiction "to manage its proceedings, vindicate its authority, and effectuate its decrees" is insufficient to provide a basis for jurisdiction to enforce a settlement agreement unless "the parties' obligation to comply with the terms of the settlement agreement [is] made part of the order of dismissal." Id. at 380-81, 114 S.Ct. at 1676-77. The Court further stated that a court's order could provide for continuing jurisdiction by either including a provision "retaining jurisdiction" over the settlement agreement or by incorporating the terms of the settlement agreement into the dismissal order. Id. at 381, 114 S.Ct. at 1677. "Absent such action, however, enforcement of the settlement agreement is for state courts, unless there is some independent basis for federal jurisdiction." Id. at 382, 114 S.Ct. at 1677.

In this case, the Court's Order dismissing the 1998 case did not include a provision retaining jurisdiction over the settlement agreement, nor did the Court's Order incorporate the terms of the settlement agreements. Thus, under Kokkonen, there must be some independent basis for this Court's jurisdiction to enforce the settlement agreements.

Plaintiffs assert that Kokkonen is inapposite to this case because the underlying claims in Kokkonen were state law claims and jurisdiction was based upon diversity of citizenship, whereas the claims in this case were federal law claims based upon Title VII. The Court rejects such an interpretation because courts have interpreted Kokkonen to apply to settlements of claims arising under federal question jurisdiction as well as diversity jurisdiction. See Abbott Labs. v. CVS Pharmacy, Inc., 290 F.3d 854, 857 (7th Cir. 2002) (stating that "[a]lthough the class action that ended in settlement was within federal-question jurisdiction, the settlement is just a contract, so a suit on the settlement needs an independent basis of federal jurisdiction"); Lee v. Runvon, 18 F. Supp.2d 649, 653 (E.D. Tex. 1998) (stating that underKokkonen, in the absence of a court's express intention to retain jurisdiction over an action dismissed pursuant to a settlement agreement, an independent basis for federal jurisdiction is required "even where the underlying suit raised a federal question"); O'Leaw v. Fanghella, 866 F. Supp. 1119, 1120 (N.D. Ill. 1994) ("Hence the fact that the original action was a federal-question case would not confer federal jurisdiction to enforce the settlement agreement (which is simply a breach-of-contract claim) if diversity of citizenship were lacking."). Thus, a settlement agreement does not provide an independent basis for federal jurisdiction merely because the underlying claims were federal question claims. Such a basis does exist, however, where the court will be required to construe and apply federal law in order to enforce the settlement agreement.³ See Bd. of Trs. of the Hotel Rest. Employees Local 25 v. Madison Hotel. Inc., 97 F.3d 1479, 1484 (D.C. Cir. 1996) (finding a basis for federal jurisdiction because enforcement of the settlement agreement would require adjudication of substantive federal law issues under ERISA, over which federal courts have exclusive jurisdiction).

3 This case is distinguishable from Kokkonen in the sense that Plaintiffs' breach of contract claim based upon the settlement would be against the United States, and the Court would therefore have jurisdiction over Plaintiffs' claims under the Little Tucker Act, 28 U.S.C. § 1346(a), 1491, to the extent that each claim seeks recovery of less than $10,000.

Generally, claims based upon settlement agreements with the United States are considered contracts within the jurisdiction of the Court of Federal Claims under the Tucker Act. Shaffer v. Veneman, 325 F.3d 370, 372 (D.C. Cir. 2003). In concluding that it did not have jurisdiction over Plaintiffs' breach of contract claims, the Court of Federal Claims noted that federal district courts have jurisdiction to review complaints under Title VII and cited various cases for the proposition that "the Court of Federal Claims lacks jurisdiction over actions to enforce Title VII settlement agreements." (6/19/03 Order at 1-2.) For the two reasons set forth below, this Court respectfully disagrees with this analysis.

First, while it is true that federal district courts have jurisdiction over Title VII complaints, Plaintiffs' claims are straight breach of contract claims, and nothing in those claims suggests that a court would be required to interpret or apply the provisions of Title VII in determining whether Defendant breached the settlement agreements by not informing Plaintiffs of the time and date of the next Civil Service Exam.Cf. Fender v. Kan. Social Rehab. Sews., 168 F. Supp.2d 1216, 1220 (D. Kan. 2001) (rejecting the defendant's claim that the court lacked subject matter jurisdiction because the plaintiff's claim alleged that the defendant violated Title VII and the prior settlement agreement merely gave rise to a defense against the plaintiff's federal claim). Thus, there is no need for any court to interpret or apply Title VII in order to resolve Plaintiffs' claims.

Second, the cases cited by the Court of Federal Claims are distinguishable based upon the circumstances of the settlement agreements at issue in those cases. In Lee v. United States, 33 Fed. C1.374 (1999), the plaintiff pursued her discrimination complaint through the administrative process and reached an agreement with the employing agency to settle her administrative complaints. Shortly thereafter the plaintiff filed suit in state court alleging claims for breach of contract and discrimination. The defendant removed the case to federal court and moved to dismiss on the alternative bases that the plaintiff had not pursued her discrimination claim to an administrative conclusion prior to filing suit and that the Court of Federal Claims was the only court with jurisdiction at that stage. After the district court granted the motion and dismissed the case, the plaintiff filed a complaint in the Court of Federal Claims asserting the breach of contract claim as well as the discrimination claim. The defendant filed a motion to dismiss for lack of subject matter jurisdiction on the basis that both the discrimination claim and the breach of contract claim constituted statutory actions pursuant to Title VII, over which court lacked jurisdiction. The court granted the motion as to both claims. With regard to the breach of contract claim, the court cited Robles v. United States, No. 84-3635, 1990 WL 155545 (D.D.C. July 20, 1990), for the proposition that an action to enforce a Title VII administrative settlement agreement is properly treated as a statutory Title VII claim. Lee, 33 Fed. C1. at 379. The court quoted the following passage from Robles:

. . . Courts [sic] addressing the issue have pointed to the importance of conciliation to Congress' chosen scheme for redressing unlawful discrimination in the workplace. As a result, the cases conclude that Congress must have wanted rights arising under such an important part of the Title VII scheme to be enforceable as Title VII rights rather than through mere contract actions.

Lee, 33 Fed. C1. at 379 (quoting Robles, 1990 WL 155545, at *6). The Lee court also observed that consistent with Robles, "[s]everal courts have . . . [held] that federal district courts possess jurisdiction over actions to enforce agreements settling discrimination claims brought before administrative agencies." Id. (italics added). As indicated above, the key feature of Lee, for purposes of the jurisdictional analysis in this case, is that the settlement agreement at issue was reached during the administrative process. The settlement agreement inRobles was also reached during the administrative process. See Robles, 1990 WL 155545, at *2. Similarly, the settlement agreement in Taylor v. United States, 54 Fed. C1. 423 (2002), which followed Lee in concluding that there was no jurisdiction to enforce a Title VII settlement agreement, was the product of an administrative process ("an EEO settlement agreement"). Taylor, 54 Fed. C1. at 423. These cases embody the principal recognized by virtually all federal courts that "enforcement of a settlement agreement entered into to resolve a charge of employment discrimination that has been filed with the EEOC is within the subject matter jurisdiction of the federal courts" and that "such action[s] [are] brought directly under Title VII." De La Cruz v. McEntee, No. 01 CIV 6336 FSM, 2002 WL 122936, at *3 (S.D.N.Y. Jan. 29, 2002) (citing cases); see also Eatmon v. Bristol Steel Iron Works, Inc., 769 F.2d 1503, 1508-13 (11th Cir. 1985) (holding that an action brought by employees to enforce a Title VII conciliation agreement was an action brought pursuant to Title VII); EEOC v. Henw Beck Co., 729 F.2d 301, 305 (4th Cir. 1984) (holding that an action to enforce a predetermination settlement agreement is brought directly under Title VII); Owens v. West, 182 F. Supp.2d 180, 189 (D. Mass. 2001) ("Nor does it matter that the enforcer of the predetermination agreement is a private party, rather than the EEOC, so long as the document to be enforced came about under the EEOC's auspices, either pre or post determination.").

The principle distinction between this case and the foregoing cases is that the settlement agreements at issue here were entered into during the course of civil litigation involving Title VII claims, rather than as part of the Title VII administrative conciliation process. The Court has not found any case which has specifically addressed the issue and has held that federal district courts have jurisdiction pursuant to Title VII to enforce settlement agreements reached during litigation of Title VII claims. However, both the Fifth Circuit and the Tenth Circuit have rejected such a notion. In Landey v. Jackson State University, 14 F.3d 1070 (5th Cir. 1994), the plaintiff sought to liken a settlement agreement reached during a Title VII lawsuit to an EEOC conciliation agreement. The court rejected the argument because it found no "indication that Congress has established an administrative structure evidencing its intent to provide a federal forum for private parties to enforce settlement agreements ending discrimination disputes after a lawsuit has been filed." Id. at 1073 stating further that "we have found no authority applying the holding in[EEOC v. Safeway Stores, Inc.] 714 F.2d 567 (5th Cir. 1983)l to non-administrative settlements of Title VII suits"). Similarly, in Morris v. City of Hobart, 39 F.3d 1105 (10th Cir. 1994), the Tenth Circuit stated, "we find no suggestion that Congress intended to confer federal question jurisdiction over contract disputes arising out of private settlements." Id. at 1111. The court recognized the prevailing view, supported by the "elaborate statutory scheme" contained in Title VII for enforcement of such agreements, that suits to enforce conciliation agreements and predetermination settlement agreements negotiated by the EEOC are brought under Title VII, but found "that settlement contracts between private parties do not implicate the same degree of congressional concern." Id. at 1112 n. 4.

This Court also finds support for its conclusion that it does not have jurisdiction over Plaintiffs' breach of contract claims in Jones v. Bentsen, No. C 94-20694-RMW PVT, 1995 WL 125391 (N.D. Cal. Mar. 15, 1995). In Jones, the plaintiff, an Internal Revenue Service employee, filed suit alleging several claims, including a claim for breach of a settlement agreement resulting from a prior federal court suit alleging discrimination claims. The court noted that it would have jurisdiction over the contract action pursuant to the Little Tucker Act, 28 U.S.C. § 1346(a)(2), 1491, if the plaintiff's claim were less than $10,000, but that it would be required to transfer the case to the Court of Claims if the plaintiff's claim exceeded $10,000. Id. at *4 (citingSmith v. Orr, 855 F.2d 1544, 1552-53 (Fed. Cir. 1998)). Because the plaintiff's claim did not exceed $10,000 on its face, the court allowed the plaintiff the opportunity to amend her complaint to indicate whether she was claiming less than $10,000 or waiving her right to a recovery in excess of $10,000 on her breach of contract claim. Id.

Finding Landey and Morris persuasive, the Court concludes that it does not have subject matter jurisdiction under Title VII over Plaintiffs' claims based upon breach of the settlement agreements. The settlement agreements were not reached during the administrative conciliation process, and there is no basis to conclude that Congress intended that federal district courts should possess subject matter jurisdiction under Title VII to enforce a non-administrative settlement of discrimination claims.⁴ Rather, as the Jones court found, because the action is essentially a breach of contract action against the United States, jurisdiction is proper in this Court only if Plaintiffs' claims do not exceed $10,000; otherwise, Plaintiffs' claims may only be heard in the Court of Federal Claims. However, the Court finds it unnecessary to grant Plaintiffs an opportunity to amend their complaint, as the court did inJones, to clarify whether Plaintiffs seek an amount within this Court's jurisdiction under the Little Tucker Act, because Defendant has indicated that Plaintiffs' counsel has stated that Plaintiffs' claims are far in excess of $10,000. (Def.'s Br. Supp. at 2 n. 2.)

4 does not provide a jurisdictional basis for this court to enforce the settlement agreements, Because Title VII Plaintiffs' proposed amendment to allege federal question jurisdiction under 28 U.S.C. § 1331 would be futile.

The final issue is whether the Court should dismiss the case or transfer it back to the Court of Federal Claims. Upon concluding that it lacks jurisdiction, a court must either dismiss the case "or, in the interest of justice,' [I] transfer it to a court . . . that has jurisdiction" pursuant to 28 U.S.C. § 1631. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 818, 108 S.Ct. 2166, 2179 (1988). In Christianson, the Supreme Court counseled that in a case such as this, where two coordinate courts' divergent views could potentially subject the parties to a jurisdictional "ping-pong" match, the transferee court should accept the transferor court's transfer decision under the law of the case doctrine "if the transferee court can find the transfer decision plausible." Id. at 819, 108 S.Ct. at 2179. However, the Court made clear that "[a] court has the power to revisit prior decisions of its own or of a coordinate court," especially in "extraordinary circumstances such as where the initial decision was `clearly erroneous.'" Id. at 817, 108 S.Ct. at 2178 (quoting Arizona v. California. 460 U.S. 605, 618 n. 8, 103 S.Ct. 1382, 1391 n. 8 (1983)).See also Lee, 33 Fed. C1. at 380-81 (disagreeing with the district court's conclusion that the plaintiff's claim for breach of a Title VII administrative settlement agreement was a breach of contract action but finding transfer inappropriate because the plaintiff had not exhausted her Title VII administrative remedies). As set forth above, the Court finds that the dispute in this case is solely one for breach of contract based upon a settlement agreement of underlying Title VII discrimination claims that does not implicate the principles or concerns of Title VII. In other words, the Court does not consider this to be a "marginal jurisdictional dispute." Chstianson, 486 U.S. at 819, 108 S.Ct. at 2179. Moreover, given that Plaintiffs' claims exceed the $10,000 limit on this Court's jurisdiction under the Little Tucker Act, the Court concludes that a transfer would serve the interest of justice.⁵

5 Plaintiffs cannot be faulted for any delay, as they initially filed their breach of contract claims in this Court and agreed to dismiss their complaint based upon representations by an Assistant United States Attorney that the case would be dismissed for lack of jurisdiction. Plaintiffs understandably then attempted to file their complaint in the proper court but were again met with another motion to dismiss arguing that the Court of Federal Claims lacked jurisdiction. Plaintiffs' request to have the case transferred to this Court was thus reasonable. Defendant, on the other hand, has certainly not helped the progress o f this case by taking inconsistent positions before both Courts. Defendant argued to the Court of Federal Claims that this case is really a Title VII case over which that court did not have jurisdiction, but now asserts in this Court that the case must be dismissed because the United States is the only correct defendant in a breach of contract action.

Conclusion

For the foregoing reasons, the Court concludes that it lacks jurisdiction over Plaintiffs' breach of contract claims and that the case should be transferred back to the Court of Federal Claims pursuant to 28 U.S.C. § 1631. For the same reasons, the Court will deny Defendant's motion to dismiss and Plaintiffs' motion to amend.

An Order consistent with this Opinion will be entered.