Schneiter v. United States

KARL DAVID SCHNEITER, Plaintiff, v. THE UNITED STATES, Defendant.

No. 21-1876C

United States Court of Federal Claims

April 7, 2022

Pro Se Plaintiff; RCFC 12(b)(1); RCFC 12(b)(6); Tort; Administrative Procedure Act, 5 U.S.C. § 706; Violation of Statutes and Regulations; Breach of Contract; Breach of Fiduciary Duty

Karl David Schneiter, Aiea, HI, pro se.

Sonia M. Orfield and Ann C. Motto, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

MARGARET M. SWEENEY, SENIOR JUDGE

Pro se plaintiff Karl David Schneiter alleges that his employer within the United States Department of Defense ("DoD"), the National Geospatial-Intelligence Agency ("NGA"), provided him with inaccurate tax advice and now owes him, under a variety of legal theories monetary damages in the amount of $3402. Plaintiff presents a thorough factual record in support of his claim. Defendant moves to dismiss plaintiff's complaint for lack of subject-matter jurisdiction and for failure to state a claim upon which this court can grant relief.

The court is not unsympathetic to plaintiff's grievance, but for the reasons explained below, his claims are either beyond the subject-matter jurisdiction of the United States Court of Federal Claims ("Court of Federal Claims") or fail to state a claim upon which relief can be granted. Accordingly, the court grants defendant's motion and dismisses the complaint. The court also denies plaintiff's motion objecting to certain actions taken by agency counsel during the pendency of this litigation.

I. BACKGROUND

At the time he filed his complaint, plaintiff was an employee of the NGA. During his NGA career prior to 2018, plaintiff moved four times to different duty stations through the Permanent Change of Station ("PCS") process.^[1] For each of these moves, plaintiff relied on tax guidance provided by the NGA. In 2017, however, the law regarding the taxation of PCS entitlements, where a federal agency reimburses the employee for certain costs related to moving to a new duty station, changed. The statutory provisions affecting the taxation of PCS entitlements were included in the Tax Cuts and Jobs Act ("TCJA") of 2017, Pub. L. 115-97, 131 Stat. 2054, and took effect on January 1, 2018.

Plaintiff went through the PCS process again in 2018. Unfortunately, the NGA, in the weeks leading up to and throughout plaintiff's change in duty station, provided its employees with outdated and inaccurate guidance as to the taxation of PCS entitlements, as if the TCJA had never been enacted and was not in force. Thus, even though plaintiff relied, as he had in the past, on the most recent PCS guidance from the NGA, which purportedly addressed the taxation of PCS entitlements in 2018, he received misleading information that proved quite costly in terms of the taxes he owed for the PCS entitlements he received in 2018. Plaintiff maintains that if he had timely received accurate tax guidance from the NGA regarding his PCS in 2018, he could have avoided $3402 in tax liabilities and associated expenses. Plaintiff also alleges that he was harmed by the NGA's issuance of inaccurate tax forms concerning his PCS entitlements in 2018. See Compl. 3 (stating that the inaccuracy of the NGA's "W2 and W2C forms" was "another financial cost center" affecting plaintiff); Pl.'s Resp. 9 (stating that plaintiff "filed his family taxes on time but had to file an amended return to account for the final W-2C form he received in August 2019"); Pl.'s Sur-reply 14 (stating that the delay in receiving accurate tax forms caused him "additional . . . expense"). For ease of reference, the court uses the term "tax information" to describe the combination of tax guidance and tax forms provided by the NGA to plaintiff.

Plaintiff sought monetary relief from the NGA through an administrative process that began with him filing a claim for damages in April 2019. In August 2019, plaintiff resubmitted the claim, per instructions from the NGA, to the United States Department of the Army ("Army") for processing. The Army viewed the claim as one brought under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671-2680, and noted, in particular, that it "may consider favorably only those claims resulting from incidents caused by the negligence of agents of the United States Government while acting within the scope of their employment." Compl. App. 68.^[2] Plaintiff's FTCA claim was denied by the Army in decisions dated September 17, 2019, June 29, 2020, and December 31, 2020. The final commentary in this string of decisions provides the Army's rationale for the denial:

Your agency has no duty to ensure that such [helpful] information is put out at all, particularly at any certain time, or for ensuring that every employee has a copy and understands it fully. Each federal taxpayer, not their employer, has a duty to research any and all deductions that might apply to them including deductions that might be applicable to a PCS move. Then the taxpayer prepares their own tax returns or hires professionals to do so. Your agency is not responsible for preparing your tax return or for ensuring that you receive the largest possible tax refund. Your own research or that of a paid tax professional prior to your move and later during the tax filing process is the only way to ensure that you made the most advantageous decisions and had all deductions to which you were entitled. As you have provided no evidence of negligence, I have no choice but to deny your request for reconsideration [of the denial of your claim].

Id. at 84-85. On December 31, 2020, the Army informed plaintiff that he could continue to press his negligence claim by filing suit "in an appropriate District Court no later than six months from the mailing date of this letter," but did not "imply[] that any such suit, if filed, would be successful." Id. at 85.

Plaintiff next filed an FTCA claim asserting negligence on the part of the NGA in the United States District Court for the District of Hawaii ("district court"). See Schneiter v. NGA, No. 21-291 (D. Haw. filed June 30, 2021). On September 27, 2021, the district court dismissed plaintiff's suit pursuant to a joint stipulation of the parties. See Schneiter v. NGA, No. 21-291 (D. Haw. Sept. 27, 2021) (stipulation and order for dismissal without prejudice). Plaintiff's rationale for stipulating to the dismissal of his suit in the district court was that he determined that "a contract case was more appropriate vice a negligence case against NGA." Pl.'s Resp. 9.

On September 20, 2021, plaintiff filed suit in this court seeking monetary relief under "the Little Tucker Act, 28 U.S.C. § 1346," but also relying on this court's jurisdiction under the Tucker Act, 28 U.S.C. § 1491. Compl. 1. Plaintiff's description of his claim before this court includes terms that imply a contractual relationship between the NGA and plaintiff: "liquidated damages," "under contract," "Transportation Agreement," and "bound by contract." Id. Plaintiff also alludes to the equitable remedy of restitution in his prayer for relief. In addition, plaintiff alleges that the NGA was well aware of the tax changes affecting PCS entitlements in 2018 but "withheld information that the Defendant 'had at the ready.'" Id. at 4.

More generally, plaintiff references a number of missteps in the NGA's provision of tax information to its employees in the wake of the TCJA's changes to the tax code. See, e.g., id. at 3 (alleging that the National Security Agency, a "sister" agency of the NGA, provided its employees with "thoughtful" guidance on the taxation of PCS entitlements, but the NGA "provided no such support"); id. (stating that the NGA acknowledged its "poor process management" after it issued inaccurate or delayed tax forms related to PCS entitlements in 2018); id. (characterizing the NGA's provision of inaccurate tax information as a "failure to perform its policies and procedures (as it had always done in the past for this Plaintiff)"); see also Pl.'s Sur-reply 1 (accusing the NGA of "mismanagement of a regulation"); id. at 7 (asserting that the NGA failed "to produce correct W2 travel and W2c forms until after the tax filing deadline for April 2019" and stating that the agency "grossly mis-managed the taxing mechanisms associated with the PCS process"). In its motion to dismiss, defendant addresses the possibility that plaintiff's claim sounds in tort because plaintiff appears to allege that the NGA was negligent when it provided inaccurate tax information to its employees.

In his response to defendant's motion to dismiss, plaintiff avers that his is not a tort claim; instead, he relies on three other legal doctrines.^[3] First, plaintiff asserts that both express and implied-in-fact contracts were breached by the NGA. Second, plaintiff contends that the NGA breached its fiduciary duty as plaintiff's employer. Third, plaintiff argues that the NGA failed to act appropriately in response to the passage of the TCJA, and that his claim in this court may proceed under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 551-559, 701-706.^[4]

Once the briefing of defendant's motion to dismiss was underway, plaintiff filed a motion requesting that the court inquire into certain conduct of agency counsel. See Pl.'s Mot. 4 ("Plaintiff requests the court address his concerns with Defendant agency counsel (NGA), and if warranted, address ABA rule 8.4: Misconduct."). Briefly stated, plaintiff received a communication from the NGA's Counter Insider Threats unit after he filed suit in this court, and the topic of the communication was "the content of . . . documents produced for the court by the Plaintiff in this court and in previous venues." Id. at 2. Plaintiff asserts that...