Cruz v. United States

Manuel Q. CRUZ, et al., on behalf of themselves and others similarly situated, Plaintiffs, v. UNITED STATES OF AMERICA, et al., Defendants.

Civ. No. 1:09-79

UNITED STATES DISTRICT COURT DISTRICT OF THE VIRGIN ISLANDS ST. CROIX DIVISION

Date: August 20, 2012

NOT FOR PUBLICATION

OPINION

THOMPSON. U.S.D.J.¹

This matter has come before the Court by a Motion to Dismiss [docket no. 55] for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), or alternatively for lack of venue pursuant to Federal Rule of Civil Procedure 12(bX3), filed by the Defendants, the United States of America ("the Government"), the United States Postal Service (USPS), and John Berry ("Berry"), in his official capacity as the Director of the Office of Personnel Management (OPM) (all collectively, "the Defendants"). Plaintiffs, forty-seven proposed class representatives who are former and current employees of the United States and its agencies, including the Defendant USPS, oppose this motion [61]. The Court has reached a determination after considering the submissions of the parties and without oral arguments in accordance with Federal Rule of Civil Procedure 78(b). For the following reasons, Defendants' Motion will be granted and Plaintiffs' Second Amended Complaint [58] will be dismissed. All other pending motions will be dismissed as moot.

I. BACKGROUND

This case arises out of a dispute over the benefits afforded to certain federal government employees. Employees residing in certain areas outside of the continental United States are able to receive Cost of Living Allowances (COLAs) based upon the living costs associated with a specific locality. See 5 U.S.C. § 5941. The retirement benefits granted to federal civil servants are based, at least in part, on an employee's highest three consecutive years of "basic pay." See 5 U.S.C. §§ 8331(4), 8401(3). Pursuant to 5 C.F.R. § 591.239(b), the OPM does not include COLAs in an employee's "basic pay" when calculating retirement benefits. Although Defendants contend that this is a matter of statutory mandate, Plaintiffs allege that this OPM regulation is improper for numerous reasons.

Plaintiffs allege in the Second Amended Complaint eight separate claims challenging, on various theories, the Defendants' exclusion of COLAs from the calculation of each Plaintiffs "basic pay" for purposes of computing his or her retirement benefits. (2d Am. Compl. ¶¶ 3.2, 4.1-4.8). More specifically, Plaintiffs claim that 5 C.F.R. § 591.239(b) is void because: (1) it is contrary to congressional intent; (2) COLAs are part of "base pay" absent a statutory exclusion not present in this case; (3) it violates the Administrative Procedures Act (APA), 5 U.S.C. § 701, et seq.; (4) it is arbitrary, capricious, and an abuse of OPM's rule-making authority; (5) it violates the Fifth and Fourteenth Amendments to the United States Constitution because it denies Plaintiffs' the equal protection of the law; (6) it has a disparate impact upon proposed class members in violation of 42 U.S.C. § 2000e-16; (7) it deprives proposed class members of property without due process of law in violation of the Fifth Amendment; and (8) it constitutes an unlawful taking without just compensation.

Defendants contend that the first eight claims raised by Plaintiffs must be dismissed because Congress has set up a comprehensive dispute resolution system that deprives this Courtof jurisdiction over these pending claims. According to Defendants, these claims are properly brought before the OPM and then the Merit System Protection Board (MSPB) because the MSPB has exclusive jurisdiction to review retirement claims adjudicated by OPM. In opposition to Defendants' motion, Plaintiffs argue that MSPB does not have proper original or appellate jurisdiction over this case and that this case presents a systernwide challenge to OPM procedure, not to individual retirement-benefit determinations. Furthermore, Plaintiffs argue that because the pending case alleges that OPM's rule-making constitutes employment discrimination in violation of 42 U.S.C. § 2000e-16, it is a "mixed case" that this Court can properly exercise jurisdiction over.

Plaintiffs additionally raise three unrelated claims concerning an interim regulation promulgated by OPM in September 2010 ("the Interim Regulation"). See General Schedule Locality Pay Areas, 75 Fed. Reg. 60,285 (Sept. 30, 2010) (codified at 5 CFJR. § 531.603). The Interim Regulation established separate beneficial locality pay areas for Hawaii and Alaska to the exclusion of Puerto Rico, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands. (2d Am. Compl. ¶¶ 4.9-4.11). The Second Amended Complaint alleges that the Interim Regulation (1) has a disparate adverse impact on the proposed class members in violation of 42 U.S.C. § 2000e-16; (2) violates a previous settlement agreement made by the Defendants; and (3) that promulgation of the Interim Regulation was in violation of the APA. Defendants argue that Plaintiffs' claims concerning the Interim Regulation must be dismissed because Plaintiffs have not exhausted their administrative remedies, there is no case or controversy as to some of these claims, and that the APA affords only a limited judicial review of OPM regulations concerning locality pay.

All of the above arguments will be addressed in turn.

II. ANALYSIS

a. Sovereign Immunity and Consent to Suit

The United States, along with its agencies and employees, is generally immune from suit pursuant to its Status as a sovereign entity. See, e.g., United Stales v. Sherwood, 312 U.S. 584, 586(1941). The Government, however, may consent to being sued in any court, and the terms of that consent "define that court's jurisdiction to entertain that suit." Id. Here, Plaintiffs argue that jurisdiction is established according "to all or some combination of the following: 48 U.S.C. § 1612(a); 28 US.C. §§ 1331, 1339 and 1346(a)(2); 39 US.C §§ 401 and 409; and5 U.S.C. §§ 702 and 5596." (2d Am. Compl. ¶ 2.1).

A plaintiff seeking to establish the consent necessary to bring suit against the United States, its agencies, or its individual agents may not rely on general jurisdictional statutes, but instead a plaintiff "must identify a specific statutory provision that waives the government's sovereign immunity." Clinton Cnty. Comm 'rs v. EPA, 116F.3d 1018,1021 (3d Cir. 1997) (citing United States v. Sherwood, 312 U.S. 584, 586 (1941)). There are three particular statutory provisions that, according to Plaintiffs' Second Amended Complaint, provide a waiver of sovereign immunity in this case. First, the APA waives sovereign immunity in certain cases where a plaintiff seeks equitable relief from administrative agencies. See 5 U.S.C. § 702. Second, Congress has waived sovereign immunity as to Defendant USPS. See 36 U.S.C. § 409. Finally, the Little Tucker Act provides congressional consent for plaintiffs seeking money damages in an amount less than $10,000 lo bring suit against the United States. See 28 U.S.C. § 1346(a)(2).

Despite these waivers of sovereign immunity. Defendants argue that a different federal statute, the Civil Service Retirement Act (CSRA), 5 U.S.C. § 8331, et seq., precludes judicial review of Plaintiff's first eight claims because the CSRA provides an alternative, comprehensiveremedial scheme. Defendants contend that the OPM is the appropriate forum to hear these claims, and if necessary review of that decision should be heard by the MSPB, followed by the Federal Circuit. The Court agrees.

i. Statutory Consent to Suit

Of particular relevance to this pending motion is the waiver of sovereign immunity provided by the APA. Plaintiff's have apparently waived the argument that Defendants have consented to suit under the Little Tucker Act. See (Pls.' Br. at 4 ("Plaintiffs do not rely on jurisdiction under the Little Tucker Act, 28 U.S.C. § 1346(a)(2), except to the extent required by later possible decisions of the Court in mis case."); see also (id. at 20 ("The short answer to this argument is that the present case is brought under 28 U.S.C. § 1331 (primarily) and 5 U.S.C. § 702 (secondarily), and venue is proper in this Court under 28 U.S.C. § 1391(e). Plaintiffs do not rely on jurisdiction under the Little Tucker Act.")). In addition, neither party has addressed the issue of whether consent to sue Defendant USPS may be found in 36 U.S.C. § 409, and therefore the Court considers this argument waived as well.²

The APA provides in relevant part that:

A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and staling a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party. The United States may he named as a defendant in any such action, and a judgment or decree may be entered against the United States: Provided, That any mandatory or injunctive decree shall specify the Federal officer or officers (by name or by title), and their successors in office, personally responsible for compliance.

5 U.S.C. § 702. This waiver of sovereign immunity is not without its limits. For example, § 702 of the APA further provides that "[n]othing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought" Id. Likewise, § 701 of APA excludes administrative determinations from judicial review where another ...