Wolfing v. United States ( 2019 )

In the United States Court of Federal Claims
No. 18-523C
(Filed: August 29, 2019)
************************** Army Housing Entitlements;
*
Reserve Component; 37 U.S.C.
BRADLEY WOLFING, et al., *
* § 403; Joint Travel Regulations
Plaintiffs, * ¶¶ 10002.A, 10414.A.1-3, 10428.B;
* Rule 12(b)(1); Motion to Dismiss
v. * Rule 52.2; Motion to Remand.
*
THE UNITED STATES, *
*
Defendant. *
*
**************************
Patrick J. Hughes and Michael E. Lyons, Patriots Law Group of Lyons & Hughes, P.C.,
5819 Allentown Road, Suitland, MD 20746, for Plaintiffs.
Joseph H. Hunt, Robert E. Kirschman, Jr., Douglas K. Mickle, and Daniel K. Greene, U.S.
Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box 480, Ben Franklin
Station, Washington, D.C. 20044, for Defendant. Major Michael Townsend, Jr., United States
Army, Of Counsel.
_________________________________________________________
OPINION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND
GRANTING DEFENDANT’S MOTION TO REMAND
_________________________________________________________
WILLIAMS, Senior Judge.
Plaintiffs, a group of seven former and current officers in the reserve component of the
United States Army (“Army”),1 claim entitlement to two allowances for housing while serving on
active-duty tours in Europe from May 2014, to the present, during which they were
“unaccompanied,” i.e., unauthorized to relocate their dependents. Plaintiffs claim entitlement to a
basic allowance for housing in the United States (“BAH”) and outside the United States (“OHA”)
pursuant to 37 U.S.C. § 403 and Chapter 10 of the Department of Defense Joint Travel Regulations
(“JTR”). Plaintiffs allege that the Army denied them a housing allowance to which they were
entitled and acted with gross negligence by willfully misapplying the JTR. Specifically, Plaintiffs
1
Plaintiffs are Colonel Bradley Wolfing, Majors James Copas, Ryan Mirabal, Louis Morelli,
and Captains Alexander Gardiner, Timothy Kibodeaux, and William Schneck.
contend that in 2016, the Army wrongly began subjecting them to JTR provisions that govern
active-duty component pay and housing entitlements, instead of reserve component entitlements,
causing the loss of their second housing entitlement and resulting in substantial financial losses.
Defendant moved to dismiss the complaint for lack of subject-matter jurisdiction
contending that Plaintiffs’ claim sounds in tort because their action is based on the negligent
performance of a noncontractual duty. In the alternative, Defendant moved to remand Plaintiffs’
case to the Secretary of the Army for submission to the Army Board for the Correction of Military
Records (“ABCMR”). Because Plaintiffs seek monetary damages based upon a money-mandating
statute and regulations, this case falls within this Court’s Tucker Act jurisdiction. As such,
Defendant’s motion to dismiss is denied. The Court grants Defendant’s alternative motion for
remand because the ABCMR may grant Plaintiffs complete relief.
Background2
All Plaintiffs voluntarily performed unaccompanied active-duty tours of 365 days or less
as part of the Army’s reserve component in Europe to support contingency operations. Plaintiffs
were not authorized to ship household goods at the expense of the Government to their duty
stations in Europe. While on their individual tours for various time periods between May 2014 to
the present, Plaintiffs were ordered to “live on the economy” - - to utilize their housing allowances
to finance off-base housing, which is required when Government quarters are unavailable at or
near their duty stations. All of the officers, except Major Morelli, have one or more dependents.
The six officers who have dependents were on “unaccompanied orders,” meaning they were not
authorized to relocate their dependents to their duty station at Government expense. Additionally,
the six officers with dependents represented to the Army that their dependents were residing in the
United States during their tours. All Plaintiffs received BAH starting on the first day of their tours,
and the six Plaintiffs with dependents received an additional family separation housing allowance
for overseas housing (“FSH-O”) for part of their tours.3
Plaintiffs allege that the unavailability of Government quarters entitled them each to two
base housing allowances for the duration of their tours, BAH and OHA, citing 37 U.S.C. § 403
and Joint Travel Regulations ¶¶ 10002.A, 10428.B. Plaintiffs allege that sometime in 2016, the
Army changed its official interpretation of the JTR relating to eligibility for reserve component
housing allowances and as a result, began retroactively applying active duty component pay and
housing allowance entitlements to reserve component soldiers. Plaintiffs claim this change
removed their second base housing allowance, denying them and many reserve component soldiers
appropriate BAH benefits. Plaintiffs characterize the Army’s revised interpretation of the
applicable JTR and retroactive application of active duty component pay as a willful and grossly
negligent disregard of 37 U.S.C. § 403 and the applicable JTR.
2
This background is derived from Plaintiffs’ complaint and the appendix to Defendant’s
motion to dismiss.
3
Plaintiffs dispute that they were paid FSH-O allowances and instead claim that the
monies they received were OHAs. Pls.’ Sur-reply 15.
2
Defendant describes the circumstances differently. Defendant submits that pursuant to the
JTR, all seven Plaintiffs were entitled to only one base housing allowance, either BAH or OHA,
depending on the place where the soldier was located when entering active duty, citing JTR ¶
10428.B. Def.’s Mot. 4-5. The regulation provides:
A Reserve Component member called/ordered to active duty in support of a
contingency operation is authorized BAH/OHA for the duration of the tour. If the
Reserve Component member receives a permanent change of station order
authorizing HHG [household goods] transportation, BAH/OHA is based on the new
Primary Duty Station. However, if the member is called or ordered to active duty
and a permanent change of station order is not issued, BAH/OHA rate is based
(paid) on the primary residence location at the time called/ordered to active duty . .
..
JTR ¶ 10428.B.
Members with dependents may also receive an additional housing allowance, FSH-O, as
long as they satisfy three conditions: (1) dependent transportation to the Permanent Duty Station
was not authorized as Government expense under 37 U.S.C. § 476; (2) dependents did not reside
in the permanent duty station vicinity; and (3) Government quarters were not available for
assignment to the member. JTR ¶ 10414.A.1-3. In Defendant’s view, at the time Plaintiffs were
called to active duty, based on their representations in financial processing forms submitted to the
Army, the six Plaintiffs with dependents appeared to be eligible for the FSH-O allowance because
they met these three conditions. Def.’s Mot. App. 113. Plaintiffs received BAH starting on the
first day of their tours, and the six Plaintiffs with dependents received FSH-O for part of their
tours. Major Morelli, however, was erroneously paid an additional OHA allowance for a portion
of his tour.4
Rather than a change in official Army interpretation of the JTR, Defendant points to the
findings of an investigation by the Army’s Wiesbaden Criminal Investigation Command (“CID”)
as the cause of Plaintiffs’ pay changes. In 2016, CID conducted a criminal investigation
concerning representations the six Plaintiffs with dependents made to the Army in order to receive
the FSH-O additional housing allowance. Army CID concluded that the six Plaintiffs moved their
dependents overseas or had their dependents reside with them at their duty stations for more than
90 days, thus rendering them ineligible for FSH-O because they no longer satisfied the second
condition of JTR ¶ 10414.A: that their dependents did not reside in the vicinity of the permanent
duty station. In addition, the Army determined that it inadvertently paid Major Morelli both BAH
and OHA. Def.’s Mot. App. 114. The Army’s Office of the Staff Judge Advocate and
Compensation/Entitlements Branch upheld these findings. Def.’s Mot. App. 109. As a result, the
4
Major Morelli, an officer with no dependents, was authorized to receive only BAH.
Soldiers without dependents or unaccompanied orders overseas who must live on the economy
receive BAH. However, they can obtain a waiver to receive OHA instead of BAH to cover housing
expenses. Major Morelli elected to receive OHA. In error, Major Morelli was paid both OHA
and BAH. Def.’s Mot. App. 113-14.
3
Army concluded that it had overpaid all Plaintiffs by one housing allowance - - FSH-O in the case
of the six officers with dependents, and OHA in the case of Major Morelli. Def.’s Mot. App. 114.
Defendant alleges that the Army equitably sought to recoup the overpayments. Thus,
instead of making the six officers forfeit all of their housing allowances until the debt was repaid,
the Army identified for recoupment the housing allowance that had been paid at the lower rate. In
the case of the six officers with dependents, this was the BAH. In the case of Major Morelli, the
debt for the OHA overpayment was cancelled upon determining that Major Morelli was not at
fault for the overpayment.
After their BAH was recouped, Plaintiffs initiated multiple inquiries in response to the
Army CID’s findings and the claimed misinterpretation of the JTR through their chain of
command, as well as through the Defense Finance and Accounting Service (“DFAS”), the
Inspector General, and Congressional Representatives. See Def.’s Mot. App. 115-25; Pls.’ Resp.
App. 8-20.
On October 18, 2018, the Army’s Financial Management Support Center concluded that
“[a]ll six officers with dependents who have filed suit received the appropriate basic allowance for
housing based on the accurate location of their dependents.” Def.’s Mot. App. 114.
Discussion
Jurisdiction
The Tucker Act, 28 U.S.C. § 1491, grants jurisdiction to the Court of Federal Claims over
“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 damages in cases not sounding in tort.” 28 U.S.C.
§ 1491(a)(1) (2012). “The Tucker Act itself does not create a substantive cause of action . . . .”
Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005). If a claim is to fall within the
Court’s Tucker Act jurisdiction, “a plaintiff must identify a separate source of substantive law that
creates the right to money damages.” Aviation & Gen. Ins. Co., Ltd. v. United States, 121 Fed.
Cl. 357, 361-62 (2015) (citing Fisher, 402 F.3d at 1172). Further, the substantive law the plaintiff
identifies must be “money-mandating.” Id. (citing United States v. Mitchell, 463 U.S. 206, 217
(1983)).
For the purposes of Tucker Act jurisdiction, a statute or regulation is money-mandating if
it “can fairly be interpreted as mandating compensation for damages sustained as a result of the
breach of the duties [it] impose[s].” Fisher, 402 F.3d at 1173 (quoting Mitchell, 463 U.S. at 217).
In determining whether a statute is money-mandating, courts evaluate the extent to which the
statute imposes an obligation on the Government to pay money when statutory conditions are met.
Samish Indian Nation v. United States, 657 F.3d 1330, 1335 (Fed. Cir. 2011). The Federal Circuit
has noted that, in limited situations, the money-mandating requirements may be satisfied even
when the Government reserves discretion over the payment of funds when the statute: “(1)
provides ‘clear standards for paying’ money to recipients; (2) states the ‘precise amounts' that must
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be paid; or (3) as interpreted, compels payment on satisfaction of certain conditions.” Id. (quoting
Perri v. United States, 340 F.3d 1337, 1342-43 (Fed. Cir. 2003)).
Before the Court may proceed to the merits of the action, Plaintiffs must first establish
subject-matter jurisdiction by a preponderance of the evidence. Hardie v. United States, 367 F.3d
1288, 1290 (Fed. Cir. 2004); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed.
Cir. 1988); Tindle v. United States, 56 Fed. Cl. 337, 341 (2003). The Court must dismiss the action
if subject-matter jurisdiction is found to be lacking. Adair v. United States, 497 F.3d 1244, 1251
(Fed. Cir. 2007). When ruling on a motion to dismiss pursuant to Rule 12(b)(1), the Court assumes
that all factual allegations are true, and will construe the complaint in a manner most favorable to
the plaintiff. Pennington Seed, Inc. v. Produce Exch. No. 299, 457 F.3d 1334, 1338 (Fed. Cir.
2006).
In considering a motion to dismiss, the Court primarily considers the allegations contained
in the complaint, but is not limited by its four corners. Dimare Fresh, Inc. v. United States, 808
F.3d 1301, 1306 (Fed. Cir. 2015) (internal citation omitted). The Court may also look to “matters
incorporated by reference or integral to the claim, items subject to judicial notice, [and] matters of
public record.” Id. When a document is not incorporated by reference, the court may “nevertheless
consider it where the complaint relies heavily upon its terms and effect, which renders the
document integral to the complaint.” Bell/Heery v. United States, 106 Fed. Cl. 300, 307 (2012),
aff’d, 739 F.3d 1324 (2014).
A Money-Mandating Statute: 37 U.S.C. § 403
In their complaint, Plaintiffs rely upon 37 U.S.C. § 403 as the money-mandating source of
this Court’s Tucker Act jurisdiction. This provision states:
a member of a uniformed service who is entitled to basic pay is entitled to a basic
allowance for housing at the monthly rates prescribed under this section or another
provision of law with regard to the applicable component of the basic allowance
for housing.
37 U.S.C. § 403(a)(1).
Defendant does not dispute that Section 403(a)(1) is money-mandating because Plaintiffs
were entitled to “a basic allowance for housing” while receiving basic pay during their respective
tours in Europe. Id.; Def.’s Mot. 9-10. Instead, Defendant characterizes Plaintiffs’ claims as the
Government’s negligent performance of a noncontractual duty and relies upon another subsection
of § 403 - - 37 U.S.C. § 403(k)(2) - - to argue that Plaintiff’s claim sounds in tort. Id. Section
403(k)(2) provides:
Any determination made under this section with regard to a member of the
uniformed services is final and is not subject to review by any accounting officer
of the United States or a court, unless there is fraud or gross negligence.
37 U.S.C. § 403(k)(2) (emphasis added).
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That this statutory language permits judicial review of a housing-allowance determination
only when alleged to be grossly negligent, does not convert the cause of action from a Tucker Act
statutory violation claim for monetary damages, into a tort claim for compensatory damages due
to negligence. Plaintiffs allege that the Army interpreted and applied 37 U.S.C. § 403 in a grossly
negligent manner by erroneously determining that active duty component JTR provisions applied
to reserve component soldiers. The conduct complained of is not either the tort of negligence
arising under common law or the Federal Tort Claims Act (“FTCA”), but rather is a gross failure
to follow a statutory mandate to pay reservists housing allowances to which they are entitled.
This claim for housing allowances - - a claim for money that is mandated by statute - - is a
quintessential Tucker Act claim, not a negligence claim for damages for an injury due to a breach
of a duty owed. This Court has routinely exercised its Tucker Act jurisdiction to address monetary
statutory claims in many contexts. See, e.g., Randolph v. United States, 129 Fed. Cl. 301 (2016),
aff’d, 2017 WL 2558256 (Fed. Cir. 2017) (seeking back pay, involuntary and improper discharge);
West v. U.S., 103 Fed. Cl. 55 (2012) (seeking backpay and correction of his status following
alleged illegal discharge); Young v. United States, 57 Fed. Cl. 441 (2003) (seeking backpay for
time spent in confinement serving a sentence that was later set aside); Holley v. United States, 33
Fed. Cl. 454 (1995) (seeking entitlement to overseas housing allowance). The fact that judicial
review of entitlement to a housing allowance is conditioned upon a finding that the Army acted
with gross negligence in denying such allowance does not alter the fundamental character of the
claim. Rather, the claim remains one for entitlement to housing allowances, and the remedy
remains payment of monies owed due to a grossly negligent or fraudulent denial of a statutory
entitlement. The Tucker Act’s jurisdictional requirements have been satisfied because Plaintiffs
have invoked 37 U.S.C. § 403, a money-mandating statute and have sufficiently pleaded a claim
for grossly negligent denial of housing allowances under that statute. See 37 U.S.C. § 403(k)(2).
Motion to Remand
In the alternative, Defendant requests that the Court remand this matter to the Secretary of
the Army for submission to the ABCMR. Defendant argues that remand is in the interest of justice
due to the Army’s mission of fairly treating all soldiers, the Army’s expertise in these types of
claims and access to interpretations of the relevant JTR provisions. In addition, Defendant notes
that the ABCMR would be able to grant all relief that Plaintiffs seek. Plaintiffs contend that
remanding their claim is unnecessary as they have already filed similar complaints through their
chain of command, the Inspector General, Congressional Representatives, and DFAS. Plaintiffs
assert that “because the way their system is designed, the ABCMR will likely seek advisory
opinions from the same people who have already misinterpreted the Army’s legal requirements to
date.” Pls.’ Resp. 27.
The Tucker Act gives the Court of Federal Claims the authority “to remand appropriate
matters to any administrative or executive body or official with such direction as it may deem
proper and just.” 28 U.S.C. § 1491(a)(2) (2012); see R. Ct. Fed. Cl. 52.2; accord Ward v. United
States, 133 Fed. Cl. 418, 427-32 (2017); Reaves v. United States, 128 Fed. Cl. 196, 200-03 (2016);
Stuart v. United States, 123 Fed. Cl. 413, 422-23 (2015). Under Rule 52.2, “[a]n order remanding
a case must (A) include such direction as the Court deems proper and just; (B) establish the
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duration of the remand period, not to exceed 6 months; (C) specify the extent to which court
proceedings will be stayed during the remand period; and (D) designate a party to report to the
court, every 90 days or less, on the status of the remand proceedings. R. Ct. Fed. Cl. 52.2(b)(1).
Here, remand is appropriate to afford the ABCMR an opportunity to grant Plaintiffs the
relief they are seeking - - to correct their military personnel records and award payments resulting
from such corrections if warranted. See 10 U.S.C. § 1552(c)(1); Roth v. United States, 378 F.3d
1371, 1382 (Fed. Cir. 2004) (“[A] correction board may entertain any kind of application for
correction . . . .ranging from changing the terms of a discharge, or the citation of awards received,
to amending records that include officer effectiveness reports passover decisions by selection
boards or special selection boards, and discharge orders.” (citing Porter v. United States, 163 F.3d
1304, 1311 (Fed. Cir. 1998)). Remand will not prejudice Plaintiffs as the ABCMR may award
them complete relief.
Conclusion
Defendant’s Motion to Dismiss Plaintiffs’ complaint for lack of jurisdiction is DENIED.5
Defendant’s Motion to Remand is GRANTED.
The Court REMANDS this matter to the Secretary of the Army for referral to the Army
Board for Correction of Military Records for administrative action pursuant to Rule 52.2 and
orders:
a. The Army Board for Correction of Military Records is directed to compile a
full administrative record and reassess Plaintiffs’ entitlement to their claimed
housing allowances in accordance with 37 U.S.C. § 403 and Chapter 10 of the
DoD Joint Travel Regulations.
b. Defendant shall file a report with the Court on the status of the remand
proceeding 90 days from issuance of this order and every 90 days thereafter.
c. Defendant shall provide the Court with the Army Board for Correction of
Military Records’ decision within 180 days.
The case is STAYED for all purposes for the duration of remand proceedings.
s/Mary Ellen Coster Williams
MARY ELLEN COSTER WILLIAMS
Senior Judge
5
Defendant’s motion to strike pages 1-4 and 6-21 of Plaintiffs’ sur-reply is DENIED.
7