Bird v. United States

51 Fed. Cl. 536, 2002 U.S. Claims LEXIS 12, 2002 WL 70758
CourtUnited States Court of Federal Claims
DecidedJanuary 18, 2002
DocketNo. 01-291C
StatusPublished
Cited by7 cases

This text of 51 Fed. Cl. 536 (Bird v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bird v. United States, 51 Fed. Cl. 536, 2002 U.S. Claims LEXIS 12, 2002 WL 70758 (uscfc 2002).

Opinion

ORDER

MILLER, Judge.

On August 24, 2001, defendant filed Defendant’s Motion for Notice to a Third Party pursuant to RCFC 14(a)(1), requesting issuance of a notice to Arnie Butler & Co. (“Butler”).1 On August 29, 2001, the court granted defendant’s motion as unopposed, and the Clerk of the Court issued a notice to Butler to appear and “assert any claim or interest you may have in the subject matter of the above-entitled suit.” The notice advised Butler that, “[i]f you fail to appear and assert a claim or interest in the subject matter of the suit, your claim or interest therein will forever be barred.” On October 26, 2001, Butler’s Motion of Butler and Company To Quash Notice was filed. Defendant and Butler filed their response and reply, respectively, after obtaining enlargements of time. Argument is deemed unnecessary.

FACTS

In this case Paul W. Bird, Paul H. Brenner, and Richard A. Pennington (“plaintiffs”) claim that the Government, as grantee, breached a contract for the grant of an easement to extract gravel from real property located in the Colorado River Basin. Prior to the signing of the purported contract, the Government retained Butler to appraise the value of the easement. Relying on the Butler appraisal, the Government set the contract price at $245,000.00 and subsequently executed the contract with plaintiffs. According to plaintiffs, the Government has not paid the contract price.

[538]*538Defendant raises as an affirmative defense that the contract with plaintiffs is voidable due to material misrepresentations made by plaintiffs to Butler concerning the potential for gravel extraction from the property, thereby causing Butler to overstate significantly the value of the easement. Alternatively, defendant contends that Butler’s overstatement of the value of the easement was a result of Butler’s negligence or malpractice. Defendant therefore insists that Butler has an “interest” in this case and that notice is proper under 41 U.S.C. § 114(b) (1994), and RCFC 14(a)(1), reasoning:

If the Court finds that plaintiffs [made misrepresentations], that would support our material misrepresentation affirmative defense. Were the Court to conclude otherwise, and ultimately rule in favor of plaintiffs upon their breach of contract claim, the Government might pursue a claim against Butler for negligence or malpractice with regard to the appraisal Butler performed for [the Government]. The basis for the Butler appraisal, including Butler’s reliance upon any representations by plaintiffs concerning the potential for gravel extraction from the unencumbered property, would likely be among the facts at issue in such a case. Thus, this case falls squarely within the court’s rationale for promoting judicial economy and avoiding numerous proceedings and judicial determinations upon identical sets of facts.

Def.’s Br. filed Aug. 24, 2001, at 4. Should the Government file a future suit against Butler, defendant posits that Butler will be bound by findings of fact and conclusions of law reached in this case.

DISCUSSION

Butler argues that the notice should be quashed because Butler is not an interested party within the meaning of 41 U.S.C. § 114(b) or RCFC 14(a)(1) and because the notice serves no purpose.2 Butler and defendant agree that the only purpose served by the notice is its alleged preclusive effect on subsequent litigation between them. Butler and defendant disagree as to whether Butler is an interested party, whether any such preclusive effect is afforded by statute or the rules of the Court of Federal Claims, and whether any such preclusive effect violates the Fifth Amendment of the United States Constitution.

Butler charges that the notice violates due process insofar as it purports to bind Butler to a judgment without properly joining it as a party. Butler insists that the preclusion sought by defendant runs afoul of the Supreme Court’s holding in Martin v. Wilks, 490 U.S. 755, 762, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989).

Plaintiffs in Martin were white firemen who claimed racial discrimination by their public employer in violation of Title VII of the Civil Rights Act of 1964. The employer raised as a defense the consent decree that it had entered into previously after litigation with certain minority firefighters. This decree approved the promotional plan that plaintiffs claimed was discriminatory. The Court in Martin rejected a rule against “impermissible collateral attacks” on civil rights consent decrees that had been adopted by a majority of the circuits whereby “respondents [that] were aware that the underlying suit might affect them and ... chose to pass up an opportunity to intervene, ... should not be permitted to later litigate the issues in a new action.” 490 U.S. at 762-63 & n. 3, 109 S.Ct. 2180. Butler relies on Martin’s holding that “[a] judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings.” Id. at 762, 109 S.Ct. 2180.

Although a civil rights case involving a consent decree, Martin was based on the general rule of due process that “one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process.” Id. at 761, 109 S.Ct. 2180; accord Ortiz v. Fibreboard Corp., 527 U.S. 815, 846, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999); Richards v. Jefferson County, [539]*539517 U.S. 793, 798-99, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996). The Court found that this “principle of general application in Anglo-American jurisprudence” was incorporated into the Federal Rules of Civil Procedure. Martin, 490 U.S. at 763, 109 S.Ct. 2180 (“[A] party seeking a judgment binding on another cannot obligate that person to intervene; he must be joined.”). Further, “the system of joinder contemplated by the rules best serves the many interests involved in the run of litigated cases.” Id. at 768, 109 S.Ct. 2180.

Defendant responds that Martin also recognized that “where a special remedial scheme exists expressly foreclosing successive litigation by nonlitigants ... legal proceedings may terminate pre-existing rights if the scheme is otherwise consistent with due process.” Id. at 762 n. 2, 109 S.Ct. 2180. According to defendant, 41 U.S.C. § 114(b) and RCFC 14(a)(1), the authority for the notice issued to Butler, have been interpreted by the Court of Claims, the Claims Court, and the Court of Federal Claims as just such a “special remedial scheme,” and due process will not be offended if the Government raises the notice in a future suit against Butler, thereby binding Butler to issues decided in this ease. The Court of Federal Claims currently appears split on whether notice pursuant to section 114(b) and RCFC 14(a)(1) violates Martin’s general rule or falls within its exception.

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Cite This Page — Counsel Stack

Bluebook (online)
51 Fed. Cl. 536, 2002 U.S. Claims LEXIS 12, 2002 WL 70758, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bird-v-united-states-uscfc-2002.