Furash & Co. v. United States

46 Fed. Cl. 518, 2000 U.S. Claims LEXIS 70, 2000 WL 490771
CourtUnited States Court of Federal Claims
DecidedApril 26, 2000
DocketNo. 99-240 C
StatusPublished
Cited by11 cases

This text of 46 Fed. Cl. 518 (Furash & Co. 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
Furash & Co. v. United States, 46 Fed. Cl. 518, 2000 U.S. Claims LEXIS 70, 2000 WL 490771 (uscfc 2000).

Opinion

OPINION

WIESE, Judge.

INTRODUCTION

This case comes before the court on defendant’s motion to dismiss for lack of subject matter jurisdiction. Defendant contends that the present contract claim involves an independent government agency — the Federal Housing Finance Board — whose activities are not supported by congressionally appropriated funds and whose contract disputes therefore cannot be adjudicated in this court. The parties have briefed the issue, and oral argument was heard on April 13, 2000. We now rule in favor of defendant and dismiss the pending action.

BACKGROUND

Facts

Plaintiff, Furash & Co., entered into a professional services contract with the Federal Housing Finance Board1 (the Finance Board) to provide consulting services in connection with the Federal Home Loan Bank system. During the course of contract performance, the Finance Board paid Furash $542,999.87 in progress payments out of a total contract price of $754,155. For reasons unrelated to the present motion, plaintiff failed to submit its final report by the specified deadline, and the Finance Board accordingly terminated the contract for default.

By letter dated April 15,1999, the Finance Board requested the return of $397,999.87, representing the $542,999.87 in contract progress payments that it had paid to plaintiff, less payment for the work that actually was performed (totaling, in the Finance Board’s estimation, $145,000). Plaintiff in turn sued in this court, seeking (i) a conversion of the contract’s default termination to a termination for convenience, (ii) a determination that it is entitled to retain the progress payments remitted by the Finance Board during contract performance, and (iii) a judgment in the amount of $470,580, representing the amount of compensation claimed for additional work allegedly performed at the Finance Board’s direction.

[520]*520Defendant now moves to dismiss this action on the grounds that the court has no jurisdiction over claims arising out of the contract activities of the Finance Board.

Law

It is a fundamental rule of jurisprudence that the United States “as sovereign, is immune from suit save as it consents to be sued.” United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941). The Tucker Act, set forth at 28 U.S.C. § 1491 (1994 & Supp. II 1996), constitutes a partial waiver of the government’s sovereign immunity, conferring jurisdiction on this court over claims “against the United States founded either upon the Constitution, or any Act of Congress or any regulation of the executive department, or upon any express or implied contract with the United States.”

Under 28 U.S.C. § 2517 (1994 & Supp. II 1996), judgments of the Court of Federal Claims are paid from funds appropriated by Congress for that purpose.2 In recognition of the jurisdictional constraint implicit in this payment scheme, earlier decisions of the Court of Claims reflect the adoption of a “non-appropriated funds” exception to the scope of the court’s jurisdiction. See, e.g., Borden v. United States, 126 Ct.Cl. 902, 116 F.Supp. 873 (1953); Pulaski Cab Co. v. United States, 141 Ct.Cl. 160, 157 F.Supp. 955 (1958); Kyer v. United States, 177 Ct.Cl. 747, 369 F.2d 714 (1966), cert. denied, 387 U.S. 929, 87 S.Ct. 2050, 18 L.Ed.2d 990 (1967). This exception provides, in essence, that the court’s Tucker Act jurisdiction may not be invoked with respect to transactions that “involved agencies where the statutory authority for the activities [in suit] specifically limited liability or expenditures to non-appropriated funds.” L’Enfant Plaza Properties, Inc. v. United States, 229 Ct.Cl. 278, 281, 668 F.2d 1211, 1213 (1982). In other words, the exercise of the court’s jurisdiction under the Tucker Act must be confined to cases in which appropriated funds can be obligated.

Defendant’s Motion

It is on this basis — the claimed unavailability of congressionally appropriated funds to support the activity in question — that defendant seeks to have this action dismissed. In defendant’s view, Congress created the Finance Board with the clear intent of establishing a self-funding agency to operate independently of appropriated funds, thereby leaving this court without jurisdiction over the instant dispute.

In support of its position, defendant refers us to 12 U.S.C. § 1438(b) (1994) (current version at 12 U.S.C.A. § 1438(b) (West Supp. 2000)) and 12 U.S.C. § 1422b(c) (1994) which cover, respectively, the Finance Board’s assessment authority and the treatment of its receipts. Section 1438(b) reads, in part, as follows:

(1) In general
The Board may impose a semiannual assessment on the Federal Home Loan Banks, the aggregate amount of which is sufficient to provide for the payment of the Board’s estimated expenses for the period for which such assessment is made.
(2) Deficiencies
If, at any time, amounts available from any assessment for any semiannual period are insufficient to cover the expenses of the Board incurred in carrying out the provisions of this chapter during such period, the Board may make an immediate assessment against the Banks to cover the amount of the deficiency for such semiannual period.

Defendant argues that the above-quoted statute plainly evidences a congressional intent that the Finance Board operate on a self-funding basis. That intent, defendant maintains, is also manifest in the second of the statutory sections relied upon, 12 U.S.C. § 1422b(c). This section, titled “Receipts of Board,” provides as follows:

[521]*521Receipts of the Board derived from assessments levied upon the Federal Home Loan Banks and from other sources (other than receipts from the sale of consolidated Federal Home Loan Bank bonds and debentures ...) shall be deposited in the Treasury of the United States. Salaries of the directors and other employees of the Board and all other expenses thereof may be paid from such assessments or other sources and shall not be construed to be Government Funds or appropriated monies, or subject to apportionment for the purposes of chapter 15 of title 31, or any other authority.

Based on the foregoing statutes, defendant urges us to recognize that the funds available to the Finance Board — including those used in support of the contract at issue — derive only from non-appropriated sources and, moreover, retain their private character even when placed on deposit in an account with the Treasury.

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Cite This Page — Counsel Stack

Bluebook (online)
46 Fed. Cl. 518, 2000 U.S. Claims LEXIS 70, 2000 WL 490771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/furash-co-v-united-states-uscfc-2000.