United States Marine, Inc. v. United States , 722 F.3d 1360 ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
UNITED STATES MARINE, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant/Third Party Plaintiff-Appellee,
v.
VT HALTER MARINE, INC.,
Third Party Defendant/Counterclaimant.
______________________
2012-1678
______________________
Appeal from the United States District Court for the
Eastern District of Louisiana in No. 08-CV-2571, Judge
Carl J. Barbier.
______________________
Decided: July 15, 2013
______________________
CHARLES L. EGAN, Slater & Zeien, L.L.P., of Washing-
ton, DC, argued for plaintiff-appellant. With him on the
brief were MARCUS B. SLATER, JR. and JENNIFER J. ZEIEN.
DOMENIQUE G. KIRCHNER, Senior Trial Counsel,
Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, argued
for defendant/third party plaintiff-appellee. With her on
2 UNITED STATES MARINE, INC. v. US
the brief were STUART F. DELERY, Principal Deputy Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
and STEVEN J. GILLINGHAM, Assistant Director.
______________________
Before LOURIE, PLAGER, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
United States Marine, Inc. (USM) sued the United
States in the United States District Court for the Eastern
District of Louisiana under the Federal Tort Claims Act
(FTCA), 28 U.S.C. §§ 1346(b), 2674. USM alleged that the
United States misappropriated USM’s trade secrets.
Specifically, USM claimed that the United States Navy,
which had lawfully obtained USM’s proprietary technical
drawings under a contract (to which USM was not a
party), owed USM a duty of secrecy that it breached by
disclosing those drawings to a rival private firm for use in
designing military boats for the government.
After the district court found the United States liable
for trade-secret misappropriation and awarded USM
damages, the United States Court of Appeals for the Fifth
Circuit held that the district court lacked jurisdiction over
USM’s claims under the FTCA. The Fifth Circuit rea-
soned that (a) the Navy’s liability and USM’s recovery
depended on the interpretation of a federal-government
contract and (b) therefore the matter lay exclusively
within the jurisdiction of the Court of Federal Claims
under the Tucker Act, 28 U.S.C. § 1491(a)(1). The Fifth
Circuit vacated the district court’s judgment and remand-
ed for transfer of the case to the Claims Court under 28
U.S.C. § 1631. We review the district court’s subsequent
transfer order under 28 U.S.C. § 1292(d)(4)(A).
Given the decision of the transfer question in this case
by the Fifth Circuit, we do not decide the question afresh.
We ask only whether the Fifth Circuit decision was clear-
ly in error. Unable to say that it was, we affirm.
UNITED STATES MARINE, INC. v. US 3
BACKGROUND
USM is a Louisiana corporation that builds military
boats. Sometime before mid-1993, working with VT
Halter Marine, Inc., which was a subsidiary of Trinity
Marine Group and also a shipbuilder, USM developed a
design for a special-operations craft with a hull made out
of composite materials. The companies developed the
design—now called the “Mark V,” a name covering several
versions—for VT Halter to use in competing for the “MK
V Special Operations Craft and Transporter System
Contract” with the United States Navy. Before VT Halter
submitted a bid to the Navy, USM and VT Halter built a
prototype of the special-operations craft, an operational
“parent craft” that they could modify to meet the Navy’s
requirements if VT Halter secured the contract. The
district court in this case found that the design and devel-
opment of the craft did not rely on government funds. VT
Halter also designed a version of the craft with an alumi-
num hull. Although the working relationship between
USM and VT Halter initially was informal, a letter from
Trinity Marine Group to USM in 1995 stated that the
companies shared ownership of the Mark V design, which
was confirmed in a later agreement reached after corpo-
rate changes, bankruptcy, and other proceedings.
As part of its bid for two development contracts with
the Navy in 1993, VT Halter submitted technical draw-
ings of both the aluminum and composite versions of the
Mark V design. VT Halter stamped the drawings with a
“Limited Rights Legend” that invoked a specific provision
of the Defense Federal Acquisition Regulations Supple-
ment (DFARS), namely, Section 252.227-7013(a)(15),
which states limitations on the government’s use and
outside disclosure of certain information. VT Halter’s
proposal also stated that, if it were awarded the contracts,
any design data would be furnished subject to restrictions
on the government’s use and disclosure as provided for in
the contracts.
4 UNITED STATES MARINE, INC. v. US
On August 6, 1993, the Navy, through its Special Op-
erations Command, awarded VT Halter two contracts to
develop prototypes of (respectively) the aluminum- and
composite-hull crafts. The development contracts incor-
porated by reference all of DFARS § 252.227-7013, which
addresses “[r]ights in technical data and computer soft-
ware.” As required, VT Halter marked its submitted
design drawings and technical data with a Limited Rights
Legend as prescribed by the DFARS provision.
On November 30, 1994, after testing and evaluation of
the prototypes, the Navy selected the Mark V aluminum-
hull craft for actual construction and awarded VT Halter
a production contract. VT Halter again submitted design
drawings marked with the legend required by
DFARS § 252.227-7013; but for whatever reason, the
production contract did not incorporate that provision.
Pursuant to the production contract, VT Halter built and
delivered twenty-four Mark V special-operations craft to
the Navy.
In 2004, a division of the Navy awarded a research
grant to the University of Maine to improve the ride and
handling capabilities of the Mark V craft. Between 2004
and late 2006, the Navy provided numerous, detailed
design drawings of the Mark V craft to firms that were
acting as contractors for Maine Marine Manufacturing
LLC, a joint venture between the University of Maine and
a private shipbuilder. Although the design drawings were
stamped with the DFARS Limited Rights Legend, the
Navy did not obtain VT Halter’s consent for the Navy’s
disclosure to the firms. In 2006, the Navy awarded Maine
Marine Manufacturing a contract to design and construct
a prototype special-operations craft, known as the Mark
V.1, intended to be as similar as possible to the Mark V
craft, with only a few changes to improve ride and han-
dling.
When USM discovered that the Navy had disclosed its
Mark V design information outside the government, it
took pre-suit steps prescribed by the FTCA and then sued
UNITED STATES MARINE, INC. v. US 5
the United States for misappropriation of trade secrets in
the federal district court in Louisiana. The FTCA ex-
pressly declares the United States subject to liability on
certain tort claims—using relevant state law to define the
torts—and vests jurisdiction over such claims exclusively
in the district courts, thus waiving sovereign immunity
for such claims. 28 U.S.C. §§ 1346(b)(1), 2674. In its
complaint, USM alleged that the United States owed it a
duty to maintain the secrecy of its Mark V design infor-
mation and to limit its use because of the confidentiality
provisions in the contracts and the legends stamped on
the design drawings. USM requested damages in the
amount of $63,550,000 for the alleged wrongful disclosure
by the Navy.
The government moved to dismiss USM’s claim for
lack of subject matter jurisdiction. Pointing to USM’s
allegation that the Navy’s duty to protect the Mark V
design information and drawings arose from the contracts
between VT Halter and the Navy, the government argued
that USM’s claim should be treated as a claim of tortious
breach of contract, which could be heard only by the
Claims Court under the Tucker Act, 28 U.S.C.
§ 1491(a)(1). The district court denied the government’s
motion, concluding that although the contract “provide[d]
the underpinnings of USM[]’s state law trade secret
claim,” the mere existence of potential non-FTCA claims
did not eliminate the district court’s jurisdiction over the
FTCA claim that USM actually asserted.
After the district court also refused to find that VT
Halter was a necessary party to the case, the government
brought VT Halter into the case through a third-party
complaint seeking to hold it liable for any damages the
government might have to pay for the alleged trade-secret
misappropriation. In response, VT Halter filed a counter-
claim against the United States, adding its own FTCA-
based claim for trade-secret misappropriation to USM’s.
The government moved to dismiss VT Halter’s counter-
claim on the jurisdictional ground that it already had
6 UNITED STATES MARINE, INC. v. US
unsuccessfully invoked against USM’s suit, but the dis-
trict court denied the motion. Despite arguing that
jurisdiction was proper in the Claims Court in both mo-
tions to dismiss, at no point during the litigation did the
government request a transfer of the case to the Claims
Court.
In January 2010, the district court held a two-day
bench trial on liability. On April 1, 2010, the court found
that the Navy misappropriated Mark V design infor-
mation by disclosing it to Maine Marine Manufacturing
(and its contractors) without VT Halter’s or USM’s au-
thorization. U.S. Marine, Inc., v, United States, No. 08-
2571, 2010 WL 1403958, at *6 (E.D. La. Apr. 1, 2010).
Regarding the source of the restriction on the govern-
ment’s use of the design information—a necessary ele-
ment of the tort—the court determined that “[b]oth the
contractual provision and limited rights legends were
sufficient notification to the government that disclosure of
the [Mark V] design would violate a duty to its owners.”
Id. After a separate bench trial on damages, the court
held that, although USM and VT Halter failed to prove
actual losses or unjust enrichment, they were entitled to
approximately $1.45 million in damages as a reasonable
royalty for the government’s use of the trade secrets.
The government appealed, challenging both the dis-
trict court’s jurisdiction over VT Halter’s claim and the
damages award. The government did not challenge the
district court’s jurisdiction over USM’s claim. USM and
VT Halter cross-appealed to challenge the damages
award.
The Fifth Circuit held that the district court lacked
jurisdiction over VT Halter’s counterclaim under the
FTCA. U.S. Marine, Inc. v. United States, 478 F. App’x
106 (5th Cir. May 11, 2012). Although VT Halter styled
its counterclaim as a tort, the Fifth Circuit ruled that the
Navy’s alleged duty not to use or disclose the Mark V
design information without permission “stem[med] direct-
ly from the ‘limited rights’ provisions found in the VT
UNITED STATES MARINE, INC. v. US 7
Halter-Navy contracts,” and the district court had neces-
sarily interpreted those contract provisions in order to
determine the Navy’s duties with respect to using and
disclosing the design information. Id. at 110-11. There-
fore, the Fifth Circuit reasoned, any claims stemming
from the alleged breach of such provisions sounded in
contract, not in tort, and were within the exclusive juris-
diction of the Claims Court. Id. at 107-08.
Although the government did not appeal the district
court’s jurisdiction over USM’s claim, and indeed stated
at oral argument that the Claims Court would not have
jurisdiction over USM’s claim, the Fifth Circuit sua sponte
held USM’s claim barred from district court for the same
reason as VT Halter’s. A majority of the panel held that
USM’s claim, like VT Halter’s, was based on the contract
between VT Halter and the Navy and was therefore
within the exclusive jurisdiction of the Claims Court:
Like VT Halter’s counterclaim, the “limited
rights” provisions of the contracts provide the es-
sential basis for USM[]’s claim. We can find no
basis for the Navy’s potential liability independ-
ent of those terms and the duties of non-disclosure
they placed upon the Navy. . . . The Tucker Act
explicitly forbids such interpretation of federal
contracts by the district courts, and there is no po-
tential liability in this case without it.
Id. at 111. Perhaps reflecting uncertainty fostered by the
changing positions of the government, the majority noted
that the lack of privity between the Navy and USM might
mean that USM would be denied the right to recover in
the Claims Court. Id. at 111 n.3. With no further analy-
sis, the court left it to the Claims Court to consider
whether USM qualified as an implied third-party benefi-
ciary allowed to enforce the contracts’ limited-rights
provisions under the Tucker Act. Id. The Fifth Circuit
vacated the district court’s judgment and remanded with
instructions to transfer the case to the Claims Court
under 28 U.S.C. § 1631. 478 F. App’x at 111.
8 UNITED STATES MARINE, INC. v. US
Judge Elrod dissented in part, disagreeing with the
majority’s holding that the district court lacked jurisdic-
tion over USM’s claim. Id. at 112. According to Judge
Elrod, because USM was neither a contracting party nor
an implied third-party beneficiary to the contract with the
Navy, there was no privity between USM and the United
States and the claim could not sound in contract, but
instead was a tort claim outside the Claims Court’s juris-
diction under the Tucker Act and within the district
court’s jurisdiction under the FTCA. Id.
The district court, acting pursuant to the Fifth Cir-
cuit’s mandate, transferred the case to the Claims Court.
USM appealed. This court has jurisdiction under 28
U.S.C. § 1292(d)(4)(A). 1
DISCUSSION
For the transfer order to be correct under 28 U.S.C.
§ 1631, two conditions must be met, as the government
expressly agrees: the district court must lack jurisdiction
over USM’s action, and the Claims Court must have
jurisdiction over USM’s action. See Appellee United
States Br. at 30; Jan’s Helicopter Serv., Inc. v. Fed. Avia-
tion Admin., 525 F.3d 1299, 1303 (Fed. Cir. 2008) (“A case
may be transferred under [S]ection 1631 only to a court
that has subject matter jurisdiction.”); Christianson v.
Colt Indus. Operating Corp., 486 U.S. 800, 818 (1988)
(understanding that only a court “that has jurisdiction”
can receive a case by Section 1631 transfer); United States
v. U.S. Shoe Corp., 523 U.S. 360, 366 n.3 (1998) (Section
1631 “authorizes intercourt transfers, when ‘in the inter-
est of justice,’ to cure want of jurisdiction”) (emphasis
1 Only USM appeals to this court. USM informed
us, without contradiction from the government, that VT
Halter will not pursue its own claim and has agreed with
USM about how to share any recovery. Appellant USM
Br. at 3 n.2; Oral Argument at 00:46-1:17.
UNITED STATES MARINE, INC. v. US 9
added); S. Rep. No. 97-275, at 30 (1981) (new Section 1631
“would authorize the court in which a case is improperly
filed to transfer it to a court where subject matter jurisdic-
tion is proper”) (emphasis added).
The Fifth Circuit is a coordinate court, not bound by
any ruling this court might independently make on the
question. If we were to disagree with that court’s judg-
ment requiring transfer, the case would seemingly be left
without a forum, unless the Supreme Court intervened.
In these circumstances, under the “law of the case” doc-
trine as explained in Christianson, we think that we must
affirm the transfer order here unless we conclude that the
Fifth Circuit’s judgment requiring transfer was “clearly
erroneous,” i.e., was not even “plausible.” See 486 U.S. at
819. Whatever result we would reach if we were consider-
ing the question de novo, we are not able to draw that
conclusion.
A
If one were to look only at the statutory grants of ju-
risdiction, and start with the statute under which USM
brought its claim, transfer here would be hard to support.
That is so with regard to both requirements for the Sec-
tion 1631 transfer: that the district court lack jurisdiction
and the Claims Court have jurisdiction.
In the liability-imposing section of the FTCA, with ex-
ceptions not applicable here, Congress unequivocally
imposed liability on the United States for torts, using
state law to define the torts. 28 U.S.C. § 2674 (“The
United States shall be liable, respecting the provisions of
this title relating to tort claims, in the same manner and
to the same extent as a private individual under like
circumstances . . . .”). There is no dispute here, and the
Fifth Circuit recognized, that misappropriation of a trade
secret is a form of liability-supporting tort that is recog-
nized in Virginia (the relevant state in this case) and
more generally. See U.S. Marine, 478 F. App’x at 108-09;
RESTATEMENT (FIRST) OF TORTS § 757 (1939);
10 UNITED STATES MARINE, INC. v. US
RESTATEMENT THIRD OF UNFAIR COMPETITION § 40 (1995);
Reingold v. Swiftships Inc., 210 F.3d 320, 322-23 (5th Cir.
2000) (noting widespread adoption of the Uniform Trade
Secrets Act); Kramer v. Sec’y, United States Dep’t of the
Army, 653 F.2d 726, 729-30 (2d Cir. 1980). In 28 U.S.C.
§ 1346(b)(1), Congress expressly granted district courts,
like the Louisiana district court here, jurisdiction to
adjudicate such liability.
In contrast, the Claims Court cannot adjudicate
USM’s claim of tort liability for misappropriation of trade
secrets under Virginia law standards made applicable to
the United States by Section 2674. In Section 1346(b)(1),
Congress committed the adjudication of Section 2674
liability to the “exclusive jurisdiction” of the district
courts. (Emphasis added.) Nothing on the face of the
Claims Court’s jurisdictional statute, 28 U.S.C. § 1491,
overrides that exclusive commitment. Indeed, as a textu-
al matter, one possible reading of the terms of Section
1491(a)(1), though not the only possible reading, might
suggest that the provision does not even apply if a claim
both is founded upon on a contract and “sound[s] in” tort. 2
In short, USM’s expressly stated claim is an FTCA
claim for liability based on the Virginia law of trade-
secret misappropriation. That claim, on its face, is within
2 Section 1491(a)(1) covers “any claim against the
United States founded either upon the Constitution, or
any Act of Congress or any regulation of an executive
department, or upon any express or implied contract with
the United States, or for liquidated or unliquidated dam-
ages in cases not sounding in tort.” The grammatical
reach of the “cases not sounding in tort” phrase is not
immediately apparent. If the phrase were read as attach-
ing to all the enumerated matters (“founded . . . upon any
. . . contract . . . in cases not sounding in tort”), it might
suggest that Section 1491(a)(1) does not extend to claims
with a contract basis if they also “sound[] in tort.”
UNITED STATES MARINE, INC. v. US 11
the district court’s jurisdiction and is not within the
Claims Court’s jurisdiction. Without further analysis,
those conclusions would make the Fifth Circuit’s order to
transfer the case wrong on both of the premises required
for transfer.
B
The basis for the Fifth Circuit’s conclusion can be seen
if one changes the analysis in two ways. The first is to
begin with the Tucker Act, not with the FTCA. The
second is to give prominence to the essential background
principle of sovereign immunity and what it means for
jurisdiction over claims against the United States.
As relevant here, the Tucker Act, in 28 U.S.C.
§ 1491(a)(1), grants the Claims Court jurisdiction over a
claim “founded . . . upon any express or implied contract
with the United States . . . ,” and where the claim is for
$10,000 or more, the Tucker Act grants jurisdiction over
such a claim only to the Claims Court. A similar contract
claim, if for less than $10,000, is within the concurrent
jurisdiction of the Claims Court and district courts under
the Little Tucker Act, 28 U.S.C. § 1346(a)(2). And regard-
less of the amount at issue, the statutes assign appeals
involving such a claim exclusively to this court. 28 U.S.C.
§§ 1295(a)(2), (a)(3); United States v. Hohri, 482 U.S. 64
(1987).
The forum specification has particular significance in
light of the principle of sovereign immunity, which makes
the United States generally not amenable to a suit unless
Congress has authorized the suit, i.e., waived sovereign
immunity. See Dep’t of the Army v. Blue Fox, Inc., 525
U.S. 255, 261 (1999); Block v. North Dakota ex rel. Bd. of
Univ. & School Lands, 461 U.S. 273, 287 (1983). Im-
portantly, the principle of sovereign immunity restricts
adjudication to the particular forums in which the sover-
eign has consented to suit. United States v. Shaw, 309
U.S. 495, 501 (1940); Minnesota v. United States, 305 U.S.
382, 388 (1939); McElrath v. United States, 102 U.S. 426,
12 UNITED STATES MARINE, INC. v. US
440 (1880); cf. Block, 461 U.S. at 287 (“[W]hen Congress
attaches conditions to legislation waiving the sovereign
immunity of the United States, those conditions must be
strictly observed . . . .”); Irwin v. Dep’t of Veterans Affairs,
498 U.S. 89, 94 (1990) (same); see also College Sav. Bank
v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527
U.S. 666, 676 (1999) (forum specificity for state sovereign
immunity waivers). Because of those principles, it is fair
to say that when Congress limits the waiver to a particu-
lar forum, the limitation is an implied, presumptive
commitment of the matter to that forum.
Even when Congress has enacted a statute presump-
tively restricting a matter to a particular forum, Congress
can, of course, enact a second statute that modifies the
effect of the first statute, routing such a matter either
concurrently or exclusively to another forum. Deciding
when that has occurred may require close statutory
analysis, with particular attention, when the statutes
involve sovereign-immunity waivers, to the policies be-
hind the terms defining such waivers. In addition, and of
special relevance here, it is a commonplace that a variety
of legal claims can arise from the same conduct and
involve closely related facts but have different elements
and carry different labels like “contract” and “tort” that
are used by Congress in different statutes. In that situa-
tion, a court may face challenging questions in determin-
ing the boundaries between one or more assertedly
applicable jurisdictional statutes and deciding how to deal
with any overlap of such statutes. When the statutes
involve waivers of sovereign immunity, a court deciding
where a particular claim may or must be litigated must
consider the policies behind the several potentially appli-
cable waivers.
Those principles apply to the Tucker Act, which both
confers jurisdiction on the Claims Court and “waive[s]
sovereign immunity for claims premised on other sources
of law (e.g., statutes and contracts).” United States v.
Navajo Nation, 556 U.S. 287, 290 (2009); see United
UNITED STATES MARINE, INC. v. US 13
States v. Bormes, 133 S. Ct. 12, 16-17 (2012). Courts have
sometimes held that Congress assigned matters otherwise
covered by the Tucker Act to other forums. See, e.g., In re
Liberty Constr., 9 F.3d 800, 801-02 (9th Cir. 1993) (dis-
cussing sue-and-be-sued provisions that might displace
the Tucker Act commitment). But when there is no other
jurisdictional grant covering a contract claim already
covered by the Tucker Act, that Act’s conferral of jurisdic-
tion on the Claims Court is exclusive because no other
grant exists. Bowen v. Massachusetts, 487 U.S. 879, 910
n.48 (1988) (With no express exclusivity language in the
Tucker Act, the Claims Court’s “jurisdiction is ‘exclusive’
only to the extent that Congress has not granted any
other court authority to hear the claims that may be
decided by” the Claims Court.). The Supreme Court has
explained the policy underlying the presumptive exclusiv-
ity: to promote uniformity through forum specification,
notably by providing for a single appellate tribunal. See
Hohri, 482 U.S. at 71-73.
The policy actually at stake has to do with the forum,
not directly with choice of law. The Fifth Circuit quoted
the Tenth Circuit’s recognition of “the strong policy in
favor of construing federal contracts under uniform feder-
al law.” Union Pac. R.R. Co. v. United States, 591 F.3d
1311, 1320 (10th Cir. 2010), quoted at U.S. Marine, 478 F.
App’x at 110. But it is not clear why federal law would
not govern the construction of federal contracts even in an
FTCA case generally governed by state law; indeed,
federal law is deemed a part of state law. See Fidelity
Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141, 157
(1982). It is the tribunal doing the construing, not the law
governing the construction, that clearly distinguishes an
FTCA action—tried in district court, with appeal to the
regional circuit—from a Tucker Act action—tried in the
Claims Court (for claims of at least $10,000), with appeal
to this court (regardless of amount).
Accordingly, if one begins with the Tucker Act grant,
one must ask, in a case like this, whether the matter at
14 UNITED STATES MARINE, INC. v. US
issue falls within that grant and, if so, whether another
statute should be read to grant a district court jurisdiction
over the matter despite the Tucker Act. A court must
consider whether the matter is within the policy underly-
ing the presumptive congressional commitment to Claims
Court/Federal Circuit exclusivity, whether it is within
another congressionally enacted policy (e.g., the FTCA’s
liability-imposing policy, 28 U.S.C. § 2674), and whether
the latter displaces the former if both apply.
The Fifth Circuit in this case started with the Tucker
Act and proceeded down this analytic path. It held that
USM’s claim depends on an adjudication of the govern-
ment’s contract obligation, which the Tucker Act pre-
sumptively limits to the Claims Court for claims of this
magnitude. 3 USM does not dispute that characterization
of its claim, which therefore brings into play the Tucker
Act’s forum policies. The Fifth Circuit must be under-
stood as having then determined that there was no good
enough reason to find a congressional displacement, for
this case, of the Tucker Act’s commitment of major con-
tract-adjudication issues to particular forums.
C
In doing so, the Fifth Circuit followed a number of de-
cisions, going back half a century, involving tort and other
non-contract claims that arose out of conduct that also
3 This view comports with a possible reading of the
text of Section 1491(a)(1), under which “in cases not
sounding in tort” attaches only to the phrase “for liquidat-
ed or unliquidated damages.” See note 2, supra (quoting
text and noting alternative possible textual reading). The
government seems to adopt this reading: in describing
what Section 1491(a)(1) encompasses, it quotes the con-
tract portion with a full stop, without including the “in
cases not sounding in tort” phrase as a limitation. Appel-
lee United States Br. at 11.
UNITED STATES MARINE, INC. v. US 15
gave rise to contract claims. Those decisions hold that
sometimes a party’s tort claim in district court is so rooted
in a contract-breach claim that its adjudication outside
the Tucker Act’s grant of jurisdiction would be an unjusti-
fied incursion on the presumptive commitment of contract
matters to the forums designated in the Tucker Act. In
those cases, any claim of liability under the FTCA, specif-
ically 28 U.S.C. § 2674, was necessarily displaced, because
that claim cannot be heard in the Claims Court.
In Woodbury v. United States, the Ninth Circuit ruled
that a claim against the United States for breach of
fiduciary duty, though styled as a tort, should be treated
as claim for a breach of contract properly within the
jurisdiction of the Claims Court. 313 F.2d 291 (9th Cir.
1963). Mr. Woodbury obtained financing from a federal
agency for the construction of prefabricated housing for
naval and civilian personnel at Kodiak Naval Base in
Alaska. Id. at 292-93. He met with financial difficulties
during the course of the project, and when the agency
filed a foreclosure action in district court, he sued the
United States under the FTCA for breach of fiduciary
duty for failure to arrange for or provide long-term financ-
ing. Id. at 293-94. The district court dismissed the claim
for lack of jurisdiction, and the Ninth Circuit agreed.
According to the Ninth Circuit, where an “action is es-
sentially for breach of a contractual undertaking, and the
liability, if any, depends wholly upon the government’s
alleged promise, the action must be under the Tucker Act,
and cannot be under the [FTCA].” Id. at 296. The court
explained:
Many breaches of contract can also be treated as
torts. But in cases such as this, where the “tort”
complained of is based entirely upon breach by the
government of a promise made by it in a contract,
so that the claim is in substance a breach of con-
tract claim, and only incidentally and conceptual-
ly also a tort claim, we do not think that the
common law or local state law right to “waive the
16 UNITED STATES MARINE, INC. v. US
breach and sue in tort” brings the case within the
Federal Tort Claims Act.
Id. at 295. The Ninth Circuit added that a different
result threatened “the long established policy that gov-
ernment contracts are to be given a uniform interpreta-
tion and application under federal law.” Id. The Ninth
Circuit concluded that Mr. Woodbury’s claim for breach of
fiduciary duty had to be brought under the Tucker Act
because liability depended entirely on the contractual
promise by the federal agency and whether the agency
breached it. Id. at 297.
Other cases followed Woodbury. In Davis v. United
States, 961 F.2d 53, 55-57 (5th Cir. 1991), Mr. Davis
brought several tort claims against the United States
under the FTCA after the Federal Deposit Insurance
Corporation assigned his promissory note in alleged
violation of the note’s non-assignment clause. Id. at 55.
The Fifth Circuit affirmed the district court’s dismissal
for lack of jurisdiction, concluding that each of the claims,
though pleaded in tort, was “predicated upon the breach
of [the] condition in the promissory note.” Id. at 56. In
Wood v. United States, 961 F.2d 195 (Fed. Cir. 1992), this
court considered whether the district court had properly
transferred Mr. Wood’s tort claims to the Claims Court.
We held that, because Mr. Wood’s primary complaint was
that the government had failed to provide an allegedly
promised certificate of airworthiness, and his only viable
claims depended on that contract claim, jurisdiction lay
only in the Claims Court under the Tucker Act. Id. at
198.
Several other cases have reached a similar conclusion.
See Blanchard v. St. Paul Fire & Marine Ins. Co., 341
F.2d 351, 359 (5th Cir. 1965) (holding that the plaintiff’s
claim could not be brought under the FTCA where “the
sole relationship between [plaintiff] and the United States
was wholly contractual in character” and plaintiff’s
claims “relate[d] exclusively to the manner in which
various government officials . . . performed their respon-
UNITED STATES MARINE, INC. v. US 17
sibilities with respect to the execution of the contract”);
Wilkerson v. United States, 67 F.3d 112, 118 (5th Cir.
1995) (claim for a taking under the Fifth Amendment of
the United States Constitution must be brought in the
Claims Court under the Tucker Act, “even though some
other statute conferring jurisdiction would otherwise
allow the district court to hear the case”); Friedman v.
United States, 391 F.3d 1313 (11th Cir. 2004) (affirming a
determination that jurisdiction was proper in the Claims
Court where the plaintiff included claims sounding in
tort, but those tort claims were grounded in or turned on
the interpretation of a settlement agreement with the
United States). Other decisions have found particular
contract connections insufficient to require Claims Court
adjudication of particular matters. E.g., Love v. United
States, 915 F.2d 1242, 1245-47 (9th Cir. 1989) (holding
that a conversion claim sounded in tort, not contract);
Aleutco Corp. v. United States, 244 F.2d 674, 678 (3rd Cir.
1957) (“The fact that the claimant and the United States
were in a contractual relationship does not convert an
otherwise tortious claim into one in contract.”).
This court in Awad v. United States held that certain
tort claims arising out of an alleged agreement with the
United States could be brought only in the Claims Court.
301 F.3d 1367, 1375 (Fed. Cir. 2002). Upon entering the
United States Marshals Service’s Witness Security Pro-
gram, Mr. Awad signed a Memorandum of Understanding
in which the government stated that it would return his
foreign-issued passport if he left the program. Id. at
1369. He also alleged that officials of the government told
him that he would receive United States citizenship and a
United States passport in return for his testimony against
an alleged terrorist. Id. After cooperating with the
government, Mr. Awad withdrew from the witness-
protection program; but the government neither returned
his foreign-issued passport, nor helped him to obtain a
United States passport or United States citizenship. Id.
at 1369-70.
18 UNITED STATES MARINE, INC. v. US
Mr. Awad filed several tort claims against the United
States in district court. The district court, after determin-
ing that his tort claims depended on the government’s
breach of its alleged contractual obligations, concluded
that it lacked jurisdiction and transferred the case to the
Claims Court. Id. at 1370-71. On appeal, we affirmed the
transfer decision under the reasoning in the Woodbury
line of cases. We explained that there was no “statutory
or common law basis for a duty on the part of the govern-
ment to provide [Mr. Awad] with U.S. citizenship and a
passport”; rather, any duty the United States owed to Mr.
Awad was purely contractual. Id. at 1373-74. Because
Mr. Awad’s action sounded in contract, and not in tort,
and was for more than $10,000, jurisdiction could lie only
in the Claims Court. Id. at 1375.
D
As already noted, in those cases the plaintiffs neces-
sarily lost the ability to pursue FTCA tort claims when
the matters were routed to the Claims Court. The fact
that transfer of USM’s case to the Claims Court will cause
it to lose its tort claim as pleaded, therefore, does not
distinguish this case from those. The argument over the
application or distinction of the Woodbury line of cases,
instead, focuses on what claims would be meaningfully
available in the Claims Court upon transfer.
In at least most of the cases in the Woodbury line, the
plaintiffs had the kind of asserted privity of contract with
the United States that readily permits litigation of the
issues of contract breach, injury, and damages under the
Tucker Act (subject to generally applicable requirements
such as timeliness). In that circumstance, transfer to the
Claims Court, while depriving the plaintiff of the ability
to press an FTCA tort claim, seemingly leaves the plain-
tiff with a cause of action that, upon proper proof, permits
recovery of compensation for contract-related harm
caused by the United States. USM’s case is challenging
for application of the Woodbury principle precisely be-
cause of the arguable difference in that respect. But for
UNITED STATES MARINE, INC. v. US 19
two reasons together, we are not prepared to say that the
Fifth Circuit’s reliance on the Woodbury principle is
clearly in error.
1
It is not clear whether a meaningful opportunity for
recovery in the Claims Court is always a necessary re-
quirement for application of the principle implemented in
the Woodbury line of cases. The policy implicit in the
Tucker Act’s presumptive commitment of government-
contract adjudications to the Claims Court (except for
small claims) and to this court (for all claims) conceivably
might be impaired by allowing another forum to construe
a government-contract provision even if the Claims Court
could not do so in the particular case. Such a construction
might impair the government’s interest in uniform con-
struction of a provision, like a standard DFARS provision,
that is widely used in the government’s contracts. Per-
haps, too, if a plaintiff’s non-contract claim depends
essentially on establishing a contract breach, and the
applicable contract law deliberately withholds a right of
enforcement from the particular plaintiff, the congres-
sional policy implicit in the Tucker Act might be thought
to bar that plaintiff’s non-contract claim because allowing
it would circumvent that enforcement limitation. More
broadly, appeals to the idea that wrongs presumptively
have remedies, which often has great force in resolving
genuine uncertainties in statutory interpretation, require
special caution where the wrongdoer is the United States,
which, by virtue of sovereign immunity, generally cannot
be sued even for harm it wrongfully inflicts except where
it consents to suit. See United States v. Testan, 424 U.S.
392, 401-02 (1976). For these reasons, we cannot easily
dismiss (while we need not affirmatively embrace) the
notion that an apparent congressional bar on adjudication
of the United States’ contractual duties outside the Tuck-
er Act forums can prevail even when the result is to
preclude recovery for harm.
20 UNITED STATES MARINE, INC. v. US
In fact, in not all of the Woodbury line of cases is it
truly clear that a remedy was meaningfully available in
the Claims Court. For example, in Wood, we noted the
possibility that the plaintiff could face significant hurdles
to recovery in the Claims Court: “remedies beyond dam-
ages, such as specific performance, are not available,” and
whether jurisdiction ultimately lay in the Claims Court
required inquiry into whether there was “privity be-
tween Wood and the government.” 961 F.2d at 199. And
in Awad, although we affirmed the transfer order, we left
it to the Claims Court to determine in the first instance
whether the contract at issue subjected the government to
monetary liability for a breach, a necessary prerequisite
for Tucker Act jurisdiction. 301 F.3d at 1374-75.
2
This case, however, does not require us to adopt or to
reject the starker potential view of a Tucker-Act-
exclusivity principle, because we cannot say that USM
itself lacks a meaningful remedy under the Tucker Act in
the Claims Court. Unable to exclude the availability of a
meaningful Tucker Act remedy for USM, we are not
prepared to conclude that USM’s position differs material-
ly, in the respect USM rightly features as its strongest
point, from that of most plaintiffs in the Woodbury line.
This is not because we recognize a meaningful possi-
bility that USM can litigate a tort claim in the Claims
Court. If a tort claim is brought under the FTCA, it
plainly cannot be adjudicated in the Claims Court, be-
cause Section 1346(b)(1) gives the district court exclusive
jurisdiction over such claims. But that conclusion does
not itself exclude the possibility of recognizing non-FTCA
tort claims as claims that are “founded . . . upon an ex-
press or implied contract . . . .” Indeed, as a purely
textual matter, it is hardly unreasonable to conclude that,
if the Tucker Act’s “founded . . . upon” language displaces
another court’s jurisdiction over a tort claim because that
tort claim is “founded . . . upon” a contract, that language
must affirmatively embrace tort claims where they are
UNITED STATES MARINE, INC. v. US 21
“founded . . . upon” a contract. In that view, the Tucker
Act’s language would have the same scope for what it
affirmatively embraces as for what it impliedly excludes
from other courts. But history counts strongly against
allowing adjudication of any “tort” claims under the
Tucker Act.
Based on the background principle of sovereign im-
munity, the familiarity of the contract/tort distinction,
and the language of the Tucker Act, this court’s predeces-
sor long ago recognized: “Congress has always withheld
from this court and from the Tucker Act original jurisdic-
tion over tort claims against the government.” Eastport
S.S. Corp. v. United States, 372 F.2d 1002, 1010 (Ct. Cl.
1967) (citing Supreme Court authorities). Ample authori-
ty supports that recognition. See Keene Corp. v. United
States, 508 U.S. 200, 214 (1993) (“tort cases are outside
the jurisdiction of the Court of Federal Claims today”)
(footnote omitted); Hohri, 482 U.S. at 72 n.4 (relying on
Eastport’s discussion of noncontractual liability under the
Tucker Act); Gibbons v. United States, 75 U.S. (8 Wall.)
269, 275 (1868) (“The language of the statutes which
confer jurisdiction upon the Court of Claims, excludes by
the strongest implication demands against the govern-
ment founded on torts.”). 4 That categorical view, limiting
Tucker Act contract-based claims to claims allowed by
contract law, fits the requirement that, for Tucker Act
jurisdiction, “other sources of law (e.g., statutes and
contracts)” must authorize compensation to the plaintiff
upon proof of the specified wrong and injury. Navajo
Nation, 556 U.S. at 290; Bormes, 133 S. Ct. at 16-17.
Whereas a contract implicitly carries that authorization
to the extent of contract-law remedies, see Holmes v.
4 Regardless of its precise grammatical role in Sec-
tion 1491, the presence of the phrase “in cases not sound-
ing in tort” suggests that tort claims are outside the
enumeration of covered claims.
22 UNITED STATES MARINE, INC. v. US
United States, 657 F.3d 1303, 1314 (Fed Cir. 2011), an
additional tort remedy would seem to need separate
congressional authorization outside the Tucker Act. In
any event, we are not prepared to initiate what would be
a sea-change in Tucker Act law to find a tort claim cog-
nizable in the Claims Court.
Instead, we rest our conclusion about the possibility of
a meaningful Tucker Act remedy for USM on other
grounds. The first is that it now appears that USM can
pursue a contract claim, in the specific sense that it can
proceed directly to litigate whether the government
breached a contract-based obligation (regarding USM’s
trade secrets), the harm caused, and the appropriate
quantification of damages. The Fifth Circuit expressly
ruled that “USM[] was a subcontractor to VT Halter with
respect to the VT Halter-Navy contracts,” while noting
that it would ultimately be for the Claims Court to decide
what contract-enforcement rights USM had. U.S. Marine,
478 F. App’x at 111 & n.3. 5 That ruling is subject to the
law-of-the-case doctrine, with its protections and limita-
tions, as to both USM and the government.
In any event, the government’s jurisdictional position
here, together with our acceptance of it, legally settles the
threshold question whether USM is among those author-
ized to recover upon proof of breach of contract, injury,
and amount of damages. As in the district court (but not
in the Fifth Circuit), the government has now affirmative-
ly urged that the Claims Court has jurisdiction under the
5 Although the general rule is that “[a] plaintiff
must be in privity with the United States to have stand-
ing to sue the sovereign on a contract claim,” First An-
napolis Bancorp, Inc. v. United States, 644 F.3d 1367,
1373 (Fed. Cir. 2011) (citing authorities), a third party
sometimes may recover damages for the government’s
breach of a contractual duty, see, e.g., D&H Distrib. Co. v.
United States, 102 F.3d 542, 546-47 (Fed. Cir. 1996).
UNITED STATES MARINE, INC. v. US 23
Tucker Act’s “founded . . . upon an express or implied
contract” provision. 6 Under this court’s precedents, that
position requires—and if the position is now accepted by
this court, as it is, thus legally establishes—the premise
that USM is within the class of those authorized to recov-
er upon proof of breach of contract, injury, and amount of
damages.
Specifically, this court has expressly held that wheth-
er the plaintiff is among those who may recover upon
proof of the asserted wrong is part of the jurisdictional
inquiry for the Tucker Act: there is no jurisdiction unless
the plaintiff is among such persons. Greenlee Cnty. v.
United States, 487 F.3d 871, 876 & n.2 (2007); see Jan’s
Helicopter Serv., 525 F.3d at 1308 (case cited “passim” by
the United States in its brief here). That rule, though
established in cases involving the Constitution-and-laws
clause of the Tucker Act, must apply to the contract
clause, which merely sets forth a source of compensation
authorization parallel to those covered by the Constitu-
tion-and-laws clause. See Navajo Nation, 556 U.S. at 290
(Tucker Act “waives sovereign immunity for claims prem-
ised on other sources of law (e.g., statutes and con-
tracts)”); Bormes, 133 S. Ct. at 16-17 (same); see also
6 In the Fifth Circuit, the United States did not
urge that USM’s action was within the jurisdiction of the
Claims Court or outside the district court’s jurisdiction
(although it had made a motion so arguing in the district
court). Now it has made both arguments. In particular, it
has argued that the Claims Court has “jurisdiction” over a
contract claim by USM (directly under the Tucker Act, the
government clarified at oral argument, not under the
Contract Disputes Act, which applies only to “contrac-
tors”). Appellee United States Br. at 22, 25-26 (defending
“subject matter jurisdiction in the Court of Federal
Claims of this matter”), 27, 33-43; Oral Argument at
24:19-25:00, 26:32-52, 27:56-28:20.
24 UNITED STATES MARINE, INC. v. US
United States v. Mitchell, 463 U.S. 206, 216 (1983) (“[T]he
Act makes absolutely no distinction between claims
founded upon contracts and claims founded upon other
specified sources of law.”). Given those principles, the
government’s assertion that the Claims Court has juris-
diction over USM’s claim entails that USM is among
those entitled to recover upon proof of the wrong at issue
here, namely, the government’s breach of contract, and
proof of injury and amount of damages.
In short, the government’s argument for the Claims
Court’s jurisdiction (made here and in the district court,
but not in the Fifth Circuit) legally acknowledges that
USM is entitled to get to the breach, injury, and damages
questions, having cleared the threshold of being among
those with a right to recover upon satisfactory proof on
those questions. And it follows that this court’s action in
now adopting the government’s argument and affirming
the transfer order, which depends on the Claims Court’s
having jurisdiction, establishes that right, as a matter of
binding precedent and judicial estoppel. See New Hamp-
shire v. Maine, 532 U.S. 742 (2001) (judicial estoppel).
While USM has until now sought to deny its right to
recover in contract in the Claims Court, it may well be
able to do so once the case is transferred to the Claims
Court based on the government’s jurisdictional argument.
The second reason for our conclusion that USM may
have a meaningful remedy in the Claims Court concerns
the possibility that USM has a takings claim. The Su-
preme Court has held that a government use or disclosure
of a trade secret can constitute a taking for which, under
the Fifth Amendment, the United States must pay just
compensation. Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1001-04 (1984) (trade secrets protected by Takings
Clause); id. at 1011-14 (disclosure or use by the govern-
ment contrary to restrictions under which the government
received trade-secret information may be a compensable
taking). The Tucker Act, in 28 U.S.C. § 1491(a)(1), em-
braces takings claims within its coverage of claims
UNITED STATES MARINE, INC. v. US 25
“founded . . . upon the Constitution . . . .” See Preseault v.
I.C.C., 494 U.S. 1, 12 (1990); Ruckelshaus, 467 U.S. at
1016-17; Reg’l Rail Reorganization Act Cases, 419 U.S.
102, 126 (1974); United States v. Causby, 328 U.S. 256,
267 (1946). In a recent non-precedential opinion, this
court has recognized the point, reversing a dismissal of a
takings claim involving trade secrets. Gal-Or v. United
States, 470 F. App’x 879 (Fed. Cir. 2012).
Under that authority, USM may have a claim for
compensation under the Tucker Act, a claim that may,
among other things, relate back to the original complaint
for limitations purposes. We do not say that USM has
such a claim, because the case has not been pled in that
form (the case not having been in a forum where such
pleading was possible), and the issue therefore has not
been explored. Nor do we say anything about the merits
of such a claim if USM can assert it. We say only that
such a claim may be available to USM; if so, the claim
might provide USM a meaningful compensatory remedy
for the wrong and injury it alleges.
If USM has a meaningful remedy in the Claims Court,
USM’s strongest argument for seeking to distinguish the
Woodbury line of cases, and for criticizing the Fifth Cir-
cuit’s resolution of the boundary problem for the FTCA
and Tucker Act in this case, weakens substantially. On
that premise, the transfer question does not depend on
the stark and much more problematic assertion that the
interest in uniform Claims Court (and Federal Circuit)
adjudication of government-contract obligations, an
interest embodied in the Tucker Act, is so strong as to
justify stripping an injured party of any right to compen-
sation, including the right Congress expressly granted in
the FTCA’s Section 2674. If USM has a meaningful
remedy in the Claims Court, both of the congressionally
declared interests—the forum-specificity interest and the
compensation interest—can be meaningfully preserved.
We are not prepared to conclude that this case clearly
requires sacrifice of the compensation interest.
26 UNITED STATES MARINE, INC. v. US
CONCLUSION
We need not say whether we would draw a conclusion
different from that of the Fifth Circuit if we were freshly
conducting the analysis of the interaction of the FTCA
and Tucker Act schemes. When the general Tucker Act’s
reach overlaps with that of another statutory regime, it is
certainly possible that the other regime is the one that
takes precedence. But we cannot say that the Fifth
Circuit’s determination, that in this case it is the FTCA
that gives way, is clearly wrong.
The Fifth Circuit ruling that the case must be trans-
ferred to the Claims Court is law of the case. Applying
that doctrine, we affirm the resulting transfer order. In
doing so, we necessarily hold that the Claims Court has
jurisdiction over USM’s suit, with all that entails under
this court’s precedents about the issues thereby resolved.
At this point, this case presents even more than the usual
reasons for litigation to proceed with expedition and with
minimization of wasteful duplication.
No costs.
AFFIRMED