Hornback v. United States
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Opinion
OPINION and ORDER
HEWITT, Judge.
This is a takings action. Plaintiff alleges that his intellectual property was taken by the government’s imposition of a secrecy order on his patent application.1 Defendant asserts that plaintiffs claim is time-barred and barred by the doctrines of res judicata and collateral estoppel. Before the court is Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4). For reasons of judicial economy and efficiency, the court considers both motions. For the following reasons, defendant’s motions in the alternative are both GRANTED.
1. Background
On April 25, 1986, plaintiff filed a patent application with the Patent and Trademark Office (PTO).2 Complaint (Compl.) at 2. On August 24, 1987, the PTO imposed a secrecy order pursuant to 35 U.S.C. § 181. Id.
On January 25, 1999, plaintiff filed this action seeking just compensation for the taking of his intellectual property. Id. at 1. Plaintiff alleges that defendant effected a Fifth Amendment taking of plaintiffs intellectual property when it imposed a security classification on his patent application, withheld the patent from issue, willfully took physical possession of that application and its subject matter, and denied plaintiff the right to possess a copy of his own patent application when his security clearance was revoked upon retirement. See Compl. at 1-4; Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4) (Def.’s Mot.) at 2.
[376]*376Defendant moves for summary judgment on the ground that plaintiffs takings claim is barred by res judicata. Def.’s Mot. at 6-10. In the alternative, defendant moves to dismiss plaintiffs complaint for lack of subject matter jurisdiction on the ground that the statute of limitations has run on plaintiffs claim. Id. at 11-14. Defendant also moves to dismiss plaintiffs takings claim for failure to state a claim on the ground that the Invention Secrecy Act, 35 U.S.C. §§ 181-188 (1984) (secrecy statute)3 provides the exclusive remedy for plaintiffs alleged damages. See id. at 11.
Because the determination of whether subject matter jurisdiction exists is an inflexible threshold matter, the court first addresses the issue of jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884)); see also Spirit Leveling Contractors v. United States, 19 Cl.Ct. 84, 89 (1989) (citing Hambsch v. United States, 857 F.2d 763, 765 (Fed.Cir.1988)).
II. Discussion
A. Motion to Dismiss
1. Standard of Review
Rule 12(b)(1) of the Court of Federal Claims (RCFC) governs dismissal of a claim based on a “lack of jurisdiction over the subject matter.” RCFC 12(b)(1). The Supreme Court has stated that in evaluating a motion to dismiss, “the allegations of the complaint should be construed favorably to the pleader.” Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Hamlet v. United States, 873 F.2d 1414, 1416 (Fed.Cir.1989). When considering a motion to dismiss, the court must presume that well-pleaded factual allegations in the complaint are true. Miree v. DeKalb County, Ga., 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.Cir.1988). If the jurisdictional facts in the complaint are disputed, however, the court may consider relevant evidence beyond the pleadings to decide the jurisdictional question.4 Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947); Rocovich v. United States, 933 F.2d 991, 993 (Fed.Cir.1991); Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879, 883-84 (Fed.Cir.1985); Reynolds, 846 F.2d at 747.
2. Statute of Limitations
Defendant moves for dismissal on the ground that plaintiffs takings claim is time-barred. Def.’s Mot. at 11. The applicable statute of limitations for filing suit in the Court of Federal Claims is six years. 28 U.S.C. § 2501 (1994) (“Every claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues.”). The six-year limitation is “an ‘express limitation on the Tucker Act’s waiver of sovereign immunity.’” Franconia Assocs. v. United States, 240 F.3d 1358, 1362 (Fed.Cir.2001) (quoting Hart v. United States, 910 F.2d 815, 817 (Fed.Cir.1990)). In Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1576-77 (Fed.Cir.1988), the Federal Circuit observed that the six-year limitations period for actions against the United States “is a jurisdictional requirement attached by Congress” that must be strictly construed. See also Seldovia Native Ass’n v. United States, 144 F.3d 769, 774 (Fed.Cir.1998) (stating that [377]*377“statute of limitations issues ... are jurisdictional”).
To survive defendant’s motion to dismiss this case, plaintiff must establish “jurisdictional timeliness.” Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed.Cir.1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). Plaintiff cannot rely merely on the allegations in the complaint. Reynolds, 846 F.2d at 747. Because plaintiff bears the burden of proof by a preponderance of the evidence, Mr. Horn-back must offer relevant, competent evidence to show that he filed suit within six years of the accrual of his takings claim. See 28 U.S.C. §
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OPINION and ORDER
HEWITT, Judge.
This is a takings action. Plaintiff alleges that his intellectual property was taken by the government’s imposition of a secrecy order on his patent application.1 Defendant asserts that plaintiffs claim is time-barred and barred by the doctrines of res judicata and collateral estoppel. Before the court is Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4). For reasons of judicial economy and efficiency, the court considers both motions. For the following reasons, defendant’s motions in the alternative are both GRANTED.
1. Background
On April 25, 1986, plaintiff filed a patent application with the Patent and Trademark Office (PTO).2 Complaint (Compl.) at 2. On August 24, 1987, the PTO imposed a secrecy order pursuant to 35 U.S.C. § 181. Id.
On January 25, 1999, plaintiff filed this action seeking just compensation for the taking of his intellectual property. Id. at 1. Plaintiff alleges that defendant effected a Fifth Amendment taking of plaintiffs intellectual property when it imposed a security classification on his patent application, withheld the patent from issue, willfully took physical possession of that application and its subject matter, and denied plaintiff the right to possess a copy of his own patent application when his security clearance was revoked upon retirement. See Compl. at 1-4; Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4) (Def.’s Mot.) at 2.
[376]*376Defendant moves for summary judgment on the ground that plaintiffs takings claim is barred by res judicata. Def.’s Mot. at 6-10. In the alternative, defendant moves to dismiss plaintiffs complaint for lack of subject matter jurisdiction on the ground that the statute of limitations has run on plaintiffs claim. Id. at 11-14. Defendant also moves to dismiss plaintiffs takings claim for failure to state a claim on the ground that the Invention Secrecy Act, 35 U.S.C. §§ 181-188 (1984) (secrecy statute)3 provides the exclusive remedy for plaintiffs alleged damages. See id. at 11.
Because the determination of whether subject matter jurisdiction exists is an inflexible threshold matter, the court first addresses the issue of jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884)); see also Spirit Leveling Contractors v. United States, 19 Cl.Ct. 84, 89 (1989) (citing Hambsch v. United States, 857 F.2d 763, 765 (Fed.Cir.1988)).
II. Discussion
A. Motion to Dismiss
1. Standard of Review
Rule 12(b)(1) of the Court of Federal Claims (RCFC) governs dismissal of a claim based on a “lack of jurisdiction over the subject matter.” RCFC 12(b)(1). The Supreme Court has stated that in evaluating a motion to dismiss, “the allegations of the complaint should be construed favorably to the pleader.” Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Hamlet v. United States, 873 F.2d 1414, 1416 (Fed.Cir.1989). When considering a motion to dismiss, the court must presume that well-pleaded factual allegations in the complaint are true. Miree v. DeKalb County, Ga., 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.Cir.1988). If the jurisdictional facts in the complaint are disputed, however, the court may consider relevant evidence beyond the pleadings to decide the jurisdictional question.4 Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947); Rocovich v. United States, 933 F.2d 991, 993 (Fed.Cir.1991); Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879, 883-84 (Fed.Cir.1985); Reynolds, 846 F.2d at 747.
2. Statute of Limitations
Defendant moves for dismissal on the ground that plaintiffs takings claim is time-barred. Def.’s Mot. at 11. The applicable statute of limitations for filing suit in the Court of Federal Claims is six years. 28 U.S.C. § 2501 (1994) (“Every claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues.”). The six-year limitation is “an ‘express limitation on the Tucker Act’s waiver of sovereign immunity.’” Franconia Assocs. v. United States, 240 F.3d 1358, 1362 (Fed.Cir.2001) (quoting Hart v. United States, 910 F.2d 815, 817 (Fed.Cir.1990)). In Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1576-77 (Fed.Cir.1988), the Federal Circuit observed that the six-year limitations period for actions against the United States “is a jurisdictional requirement attached by Congress” that must be strictly construed. See also Seldovia Native Ass’n v. United States, 144 F.3d 769, 774 (Fed.Cir.1998) (stating that [377]*377“statute of limitations issues ... are jurisdictional”).
To survive defendant’s motion to dismiss this case, plaintiff must establish “jurisdictional timeliness.” Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed.Cir.1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). Plaintiff cannot rely merely on the allegations in the complaint. Reynolds, 846 F.2d at 747. Because plaintiff bears the burden of proof by a preponderance of the evidence, Mr. Horn-back must offer relevant, competent evidence to show that he filed suit within six years of the accrual of his takings claim. See 28 U.S.C. § 2501; Reynolds, 846 F.2d at 748; Martinez v. United States, 48 Fed.Cl. 851, 857 (2001).
a. Determining the Date of Accrual
Determining whether plaintiffs takings claim is time-barred requires the court to ascertain when the plaintiffs cause of action first accrued. A plaintiff has a “legal right to maintain his or her action” when the plaintiffs cause of action first accrues. Catawba Indian Tribe of S.C. v. United States, 982 F.2d 1564, 1570 (Fed.Cir.1993) (quoting 1 Calvin W. Corman, Limitations on Actions § 6.1, at 370-71 (1991)). The Federal Circuit instructs that “a claim [against the United States] ‘first accrues’ when all the events have occurred which fix the alleged liability of the defendant.” See Hopland Band, 855 F.2d at 1577. The key date for accrual purposes is that date on which plaintiffs property “has been clearly and permanently taken.” Boling v. United States, 220 F.3d 1365, 1370 (Fed.Cir.2000). The “proper focus, for statute of limitations purposes, ‘is upon the time of the [defendant’s] acts, not upon the time at which the consequences of the acts became most painful____’” Fallini v. United States, 56 F.3d 1378, 1383 (Fed.Cir.1995) (quoting Delaware State College v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980)). “[W]hether the pertinent events have occurred is determined under an objective standard; a plaintiff does not have to possess actual knowledge of all the relevant facts in order for the cause of action to accrue.” Fallini, 56 F.3d at 1380 (citing Menominee Tribe v. United States, 726 F.2d 718, 721 (Fed.Cir.), cert. denied, 469 U.S. 826, 105 S.Ct. 106, 83 L.Ed.2d 50 (1984)).
b. The Secrecy Statute
Section 181 of the secrecy statute, set forth at 35 U.S.C. §§ 181-188 (1952), mandates that the Commissioner of Patents (Commissioner) place a secrecy order on certain inventions for which a patent application is pending.5 35 U.S.C. § 181. While section 181 of the secrecy statute prohibits the imposition of a secrecy order or the withholding of a grant of a patent “for a period of more than one year,” that same statutory provision also compels the Commissioner to “renew the [secrecy] order at the end [of the one year period], or at the end of any renewal period, for additional periods of one year upon notification by the head of the department or the chief officer of the agency who caused the order to be issued that an affirmative determination has been made that the national interest continues so to require.” Id.
On August 24,1987, the PTO first imposed a secrecy order on plaintiff’s patent application (the August 1987 secrecy order or the original secrecy order), sixteen months after Mr. Hornback filed his application with the PTO. Appendix to Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and [378]*37812(b)(4) (Def.’s Mot.App.) at All-12. The August 1987 secrecy order specifically stated that “the above-identified patent application has been found to contain subject matter which discloses classifiable information.” Id. at All. The August 1987 secrecy order also stated that “[t]he subject matter of the above-identified application has been determined to be encompassed by E.O. 10865, entitled ‘Safeguarding of Classified Information Within Industry5 or E.O. 12356, entitled ‘National Security Information’ and thus is subject to the ‘Industrial Security Manual for Safeguarding Classified Information.’ ”6 Id. at A12. The August 1987 secrecy order clearly stated that “[t]he declassification, in whole or in part, of the subject matter of the above-identified application does not modify this Secrecy Order. The requirements of this Secrecy Order remain in effect until the Secrecy Order is rescinded or modified by the Commissioner of Patents and Trademarks.” Id.
c. Summary of the Parties’ Arguments
Defendant argues that plaintiffs alleged taking claim accrued when the PTO imposed the August 1987 secrecy order “because the implementation of this secrecy order prevented the patent from issuing and denied plaintiff access to his application after he no longer possessed a security clearance.” Def.’s Mot. at 12-13. Defendant further argues that “[n]o change in the level of classification or the designation of information as ‘classified’ or ‘classifiable’ altered the implementation of the secrecy order in any respect related to plaintiffs assertion that the government’s taking resulted in prevention of the patent from issuance and denial of his access to his application.”7 Id. at 13.
Defendant states that the August 1987 secrecy order remained in effect until the PTO rescinded it on April 21, 1999. Id. at 12; Def.’s Mot.App. at A13. Because the patent application remained classified and subject to the August 1987 secrecy order until 1999, defendant contends that plaintiffs alleged takings claim resulted from a single government action and therefore cannot be considered under the continuing claim doctrine.8 Def.’s Mot. at 13. Defendant asserts that [379]*379plaintiffs delay in filing this action almost twelve years after the accrual of his claim requires the dismissal of this case. See id. at 13-14.
Quoting from the complaint that he filed in this case, plaintiff asserts:
The “taking” occurred at the time Plaintiffs patent application was first duly classified under Executive Order 12356. This action is, therefore, timely since the subject matter in that application was first duly classified under E:0. 12356 on or after 22 October 1993, and the applicable statute of limitations allows 6 years after that “taking”.
Response to Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4) (Pl.’s Resp.) at 2 (quoting Complaint at 4). Plaintiff contends that when the government originally classified the subject matter of plaintiffs patent application,9 the subject matter was private property, and the Government had no jurisdiction over it. Pl.’s Resp. at 2. Plaintiff states that the original classification was invalid. Id.
Plaintiff cites 32 C.F.R. § 159.26(b) as the regulatory authority that “grants the Government the necessary jurisdiction to classify privately developed information, provided that information is disclosed in a patent application which is under a Secrecy Order.”10 Id. at 3. Plaintiff adds that section 4-105 of the Industrial Security Manual (ISM) for Safeguarding Classified Information, the implementing directive for E.O. 12356, “mandates the acquisition of a ‘proprietary interest’ (ie., a ‘taking’) of privately developed information as a prerequisite for its classifi[380]*380cation.”11 Id. at 4. Based on this regulatory-guidance for classifying information, plaintiff asserts that the secrecy order imposed on his patent application on October 22, 1993 (the October 1993 secrecy order) which expressly stated that “[t]he subject matter is CLASSIFIED at the level of SECRET” was the first duly authorized classification of his patent application and thus, the date of the taking.12 Pl.’s Resp. at 3-4.
The parties dispute the legal effect of the government’s imposition of the August 1987 secrecy order on plaintiffs patent application in the absence of a proper security classification in accordance with E.O. 12356 and in contravention to the guidelines set forth in the Industrial Security Manual for Safeguarding Classified Information. In considering whether the procedurally flawed imposition of the August 1987 secrecy order nonetheless “fix[es] the alleged liability of the defendant,” see Hopland Band, 855 F.2d at 1577, and thereby determines the accrual date of plaintiffs cause of action, see Catawba Indian Tribe of S.C., 982 F.2d at 1570, the court turns now to examine the case law.
d. The Case Law
The court’s analysis of the legal effect of the procedurally flawed imposition of the August 1987 secrecy order is informed by the Federal Circuit’s decisions in Del-Rio Drilling Programs, Inc. v. United States and Rith Energy, Inc. v. United States.
In Del-Rio Drilling Programs, Inc. v. United States, 146 F.3d 1358 (Fed.Cir.1998), the Federal Circuit reviewed a dismissal by the Court of Federal Claims of plaintiffs’ takings claim for failure to state a claim. The Court of Federal Claims found that plaintiffs had refused to concede the validity of the government’s actions in denying drilling permits to the holders of mineral leases on Indian tribal lands.13 Id. at 1361. On appeal, the Federal Circuit addressed the questions: (1) whether the government conduct at issue was authorized, and (2) whether the complaint asserted a takings claim or sought damages for a statutory or regulatory violation by government officials. Id. at 1362.
In its analysis of the governmental authorization issue, the Federal Circuit explained that certain conduct that can be characterized as “invalid” or “illegal” (and therefore “unauthorized”) could, nonetheless, support a takings claim:
While this court has on occasion referred to “invalid” or “illegal” government conduct as “unauthorized” for purposes of determining whether the conduct may give rise to Tucker Act liability, see Short v.
[381]*381United States, 50 F.3d 994, 1000 (Fed.Cir.1995); Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (Fed.Cir.1993), we understand those references to require a showing that the conduct was ultra vires, i.e., it was either explicitly prohibited or was outside the normal scope of the government officials’ duties. Neither the Supreme Court nor this court has held that government conduct is “unauthorized, ” for purposes of takings law, merely because the conduct would have been found legally erroneous if it had been challenged in court. Accordingly, a court’s conclusion that government agents acted unlawfully does not defeat a Tucker Act takings claim if the elements of a taking are otherwise satisfied.
Id. at 1363 (citations omitted) (emphasis added). Explaining why certain legally flawed government action does not preclude absolutely a takings claim, the Federal Circuit stated:
If the government appropriates property without paying just compensation, a plaintiff may sue in the Court of Federal Claims on a takings claim regardless of whether the government’s conduct leading to the taking was wrongful, and regardless of whether the plaintiff could have challenged the government’s conduct as wrongful in another forum.
Id. at 1363. Observing that while “in some circumstances it might be more efficient to cure legal defects in the- contested governmental action rather than forcing the government to pay for appropriated property,” see id., the Federal Circuit reasoned that “if the government has taken property and has done so in a legally improper manner, it has committed two violations of the property-owner’s rights____ giv[ing] rise to two separate causes of action,” more particularly, a claim for just compensation and an action for the improprieties committed in the course of the taking. Id. at 1363-64.
Subsequently, in Rith Energy, Inc. v. United States, 247 F.3d 1355 (Fed.Cir.2001), the Federal Circuit addressed Del-Rio in affirming the dismissal of a plaintiffs takings claim.14 The Federal Circuit stated:
In Delr-Rio, we held that the plaintiff could bring a takings claim without first challenging the lawfulness of the government’s action, or establishing the scope of its property interest, in an administrative proceeding. That is so because a takings claim lies, as long as the government’s action was authorized, even if the government’s action was subject to legal challenge on some other ground.
Rith, 247 F.3d at 1365. The Federal Circuit added that “if the plaintiff claims that its property was taken regardless of whether the agency acted consistently with its statutory and regulatory mandate, Delr-Rio stands for the proposition that the takings claim can be litigated in the Court of Federal Claims without the need first to litigate the issue of lawfulness in administrative proceedings before the agency.” Id. at 1365-66. The Federal Circuit explains, however, that “to the extent that the plaintiff claims it is entitled to prevail because the agency acted in violation of statute or regulation, Delr-Rio does not give the plaintiff a right to litigate that issue in a takings action rather than in the con-gressionally mandated administrative review proceeding.” Id. at 1366.
While neither Rith nor Delr-Rio considered the statute of limitations issue presently before the court, the court finds the reasoning [382]*382of the Federal Circuit in these two cases to be instructive in this circumstance. When a plaintiff alleges that certain government action has effected a taking of property, albeit in a legally improper manner, the Federal Circuit has made clear that a plaintiff may proceed with its takings claim without first resolving in a separate proceeding the issue of whether the government acted lawfully. Rith, 247 F.3d at 1365-66; Del-Rio, 146 F.3d at 1367. To proceed on a takings claim, however, as the Federal Circuit explains in Rith, the gravamen of the plaintiff’s complaint must be that its property was taken, notwithstanding the- government’s wrongful conduct, rather than its claim challenging the government’s wrongful conduct. 247 F.3d at 1366.
By permitting a plaintiff to proceed with its takings claim, notwithstanding the legal error committed in connection with the government’s action, Rith and Del-Rio decide that a plaintiff has a legal right to maintain its takings cause of action once the government has acted to effect a taking even if the government acted in a legally improper manner. The determination that a plaintiff can bring suit for a legally flawed taking speaks to the issue of when a plaintiffs cause of action accrues for statute of limitations purposes. See Catawba Indian Tribe, 982 F.2d at 1570 (when plaintiff has “a legal right to maintain his or her action” determines when plaintiffs claim first accrues).
Here, plaintiff alleges that the government “withheld [his] patent from issue as authorized by 35 U.S.C. 181, ... willfully [took] physical possession of that application and the subject matter contained therein, and ... willfully den[ied] him the right to possess a copy of his own patent application.” Compl. at 3. Plaintiff asserts that these acts constituted a Fifth Amendment “taking.” Id. Although the parties dispute when the taking first occurred, the parties agree that pursuant to section 181 of the secrecy statute, the government first imposed a secrecy order on plaintiffs patent application in August 1987. See Def.’s Mot. at 2; Pl.’s Resp. at 3. The imposition of the August 1987 secrecy order withheld plaintiffs patent from issuing, see Compl. at 3; Def.’s Mot. at 12-13, and plaintiff does not deny the validity of that secrecy order. See Pl.’s Resp. at 4.
Rather, plaintiffs challenge is a technical one. Asserting the invalidity of the original security classification of his patent application in April 1987 because the government had not acquired the proprietary interest in the subject matter as required under E.O. 12356, see Pl.’s Resp. at 4, plaintiff claims no taking occurred until a duly authorized classification occurred as specified in the October 1993 Secrecy Order. Id. at 3-4. Plaintiffs position, however, is unsupportable under the teachings of Del-Rio and Rith. That the government’s action may have been legally erroneous does not defeat a Tucker Act takings claim if the elements of a taking are otherwise satisfied. See Del-Rio, 146 F.3d at 1363; Rith, 247 F.3d at 1365-66.
The basis for plaintiffs takings claim is the withholding of his patent from issuance. The government effected that action by the imposition of the secrecy order in 1987. Plaintiffs reliance on the language of the October 1993 secrecy order classifying the subject matter of his patent application “at the level of SECRET” as the first duly authorized classification and, therefore, as the date of accrual of his takings cause of action, is misplaced. See Pl.’s Resp. at 4. The government’s alleged technical error of improperly classifying the subject matter of plaintiffs patent application in April 1987 did not impair the effect of the August 1987 secrecy order on plaintiffs patent application.15
[383]*383The August 1987 secrecy order stated that plaintiffs patent application contained subject matter “which discloses classifiable information.” Def. Mot.App. at All. Notwithstanding the erroneous security classification of plaintiffs patent application four months prior to the imposition of the original secrecy order, the PTO prevented plaintiffs patent from issuing based on the restrictions imposed by the August 1987 secrecy order until the PTO rescinded the order on April 21, 1999. See id. at A13-A15. As set forth in the August 1987 secrecy order, the requirements of the original secrecy order were to remain in effect until the rescission or modification of the order by the Commissioner of the PTO. Id. at A12. The August 1987 secrecy order further provided that subsequent changes in the security classification of the patent application would not abrogate the effect of the secrecy order. Id. (stating that “declassification, in whole or in part, of the subject matter ... does not modify this Secrecy Order”). In fact, plaintiff acknowledges the taking effected by the imposition of August 1987 secrecy order in his complaint, stating:
On 17 September 1987 the PTO issued a “NOTICE of Allowability” stating that the patent application was in condition for allowance but that: “in view of the secrecy order issued August 24, 1987, under 35 U.S.C. 181 (1952), this application will be withheld from issue during such period as the national interest requires.” After 11 years the patent continues to be so withheld.
PL’s Resp. at 3.
3. Conclusion
The imposition of the August 1987 secrecy order on plaintiffs patent application, the governmental act alleged to have taken plaintiffs property, occurred more than six years prior to the filing of plaintiffs action in January 1999. See Compl. at 1; Fallini, 56 F.3d at 1383. Plaintiffs takings claim accrued at the time of the imposition of the original secrecy order notwithstanding that the government’s action may have been procedurally flawed. See Del-Rio, 146 F.3d at 1367. Accordingly, plaintiffs taking claim is barred by the statute of limitations.
B. Summary Judgment
Plaintiff has filed multiple lawsuits in this court and in the District Court for the Southern District of California against the United States on various theories of recovery, (including a takings claim) seeking damages for the imposition of the August 1987 secrecy order on his patent application. See supra note 4. In January 1999, plaintiff filed this action against the United States seeking compensation for the alleged taking of his intellectual property by the imposition of the August 1987 secrecy order on his patent application. See Compl. at 1-3. Defendant has moved for summary judgment in this matter on the ground that plaintiffs takings claim is barred by the doctrines of res judica-ta and collateral estoppel. Def.’s Mot. at 6-10.
In view of the number of suits filed by plaintiff pertaining to the patent application at issue in this case and in the interest of efficient use of judicial resources, the court turns now to consider whether the doctrines [384]*384of res judicata and collateral estoppel bar plaintiff from further litigation in this case.16
2. Standard of Review
Summary judgment is warranted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. United States Court of Federal Claims Rule 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact that might significantly affect the outcome of the litigation is material. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A movant is entitled to summary judgment if the nonmovant fails to make a showing sufficient to establish an element of its ease on which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must draw all reasonable inferences in favor of the nonmovant. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. That a case “is a takings case does not affect the availability of summary judgment when appropriate to the circumstances.” Avenal v. United States, 100 F.3d 933, 936 (Fed.Cir.1996).
3. The Doctrines of Res Judicata (or Claim Preclusion) and Collateral Es-toppel (or Issue Preclusion)
Under the doctrine of res judicata or claim preclusion, “a final judgment on the merits of an action precludes the parties ... from relitigating issues that were or could have been raised in that action.” Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981); Stearn v. Dept. of the Navy, 280 F.3d 1376, 1380 ( Fed.Cir.2002). See Alyeska Pipeline Serv. Co. v. United States, 231 Ct.Cl. 540, 688 F.2d 765, 769 (1982). The doctrine of res judicata is intended to “relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and ... encourage reliance on adjudication.” Stearn, 280 F.3d at 1380 (quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980)). In determining whether a plaintiffs prior lawsuits bar further litigation under the doctrine of res judicata, this court has applied a three-part test specifically considering: (1) whether the parties are legally identical; (2) whether the transactions or events underlying the claims are substantially related; and (3) whether the non-moving party had a “full and fair opportunity to litigate the original claim.” Worthington v. United States, 50 Fed.Cl. 712, 715 (2001)(intemal citation and quotation omitted). A claim is deemed the same claim for res judicata purposes when it rests on all or part of the transaction or series of connected transactions out of which the original claim arose. Foster v. Hallco Mfg. Co., 947 F.2d 469, 478 (Fed.Cir.1991). “Whether, based on the facts of the case, a claim is barred by res judicata is a question of law____” Faust v. United States, 101 F.3d 675, 677 (Fed.Cir.1996).
The doctrine of collateral estoppel or issue preclusion also serves to bar the revisiting of issues that have been fully litigated previously by the same parties based on the same cause of action. Banner v. United States, 238 F.3d 1348, 1354 (Fed.Cir.2001); Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1365-66 (Fed.Cir.2000). A finding of collateral estoppel requires the satisfaction of four factors: (1) the issues are identical to those in a prior proceeding, (2) the issues were actually litigated, (3) the determination of the issues was necessary to the resulting judgment, and (4) the party defending against preclusion had a full and fair opportunity to litigate the issues. Banner, 238 F.3d at 1354; Jet, 223 F.3d at 1366 (citing Restatement (Second) of Judgments, §§ 27, 39 (1980)). An issue is actually litigated if “it was properly raised by the pleadings, was submitted for determination, and was determined.” Banner, 238 F.3d at 1354. “[Mjere disagreement with a legal ruling does not [385]*385mean that a party has been denied a ‘full and fair’ opportunity to litigate.” Id. at 1355.
a. Summary of the Parties’ Arguments
Defendant argues that Mr. Hornback is barred by the doctrine of res judicata from relitigating his takings claim based on the government’s classification of his patent application as secret and the government’s imposition of a secrecy order on plaintiffs patent application. Def.’s Mot. at 7-8. Defendant asserts that plaintiff filed and fully litigated his takings claim in a prior lawsuit. Id.
Further, defendant explains that the doctrine of collateral estoppel bars Mr. Horn-back from litigating the issue of whether his takings claim is time-barred. Id. at 9-10. Defendant reiterates that plaintiff has litigated the statute of limitations issue with respect to his takings claim in a prior lawsuit. See Hornback, 1996 WL 368135, at *2. Defendant adds that the doctrine of collateral estoppel precludes Mr. Hornback from revisiting another issue that was fully litigated and decided in a prior lawsuit — specifically, whether § 183 of the secrecy statute provides the exclusive remedy for damages and thereby bars a takings claim. Def.’s Mot. at 10.
Plaintiff argues that the res judicata doctrine does not apply to bar his takings claim here because his 1994 takings claim was based on the April 1987 security classification of the subject matter of his patent application, a classification that plaintiff alleges was invalid. Pl.’s Amended Res Judicata Brief at 2. Plaintiff contends that the takings claim he asserts in this case is premised on the “valid reclassification” of the subject matter of his patent application, which was “specified in the Secrecy Order of 17 October 1997 ... but backdated to 10/22/93 with the specification therein.” Id. at 3.
Plaintiff adds that the collateral estoppel doctrine does not apply with respect to the statute of limitations issue because the governmental act on which plaintiff bases his takings claim in this case is different. Id. at. 4-5. Plaintiff explains that, in this case, his takings claim is based on the government’s valid reclassification rather than the original invalid secrecy classification of the subject matter of his patent application. Id. at 5-6.
Plaintiff further argues that the collateral estoppel doctrine does not apply with respect to whether 35 U.S.C. § 183 provides the exclusive remedy for plaintiffs damages. Plaintiff states that his 1989 suit was based on the August 1987 imposition of the original secrecy order on his patent application. Id. at 6. Plaintiff explains that this takings action is premised on the secrecy classification of his property pursuant to Executive Order 12356. Id. Plaintiff contends that the Constant decision “is not applicable here ____ [because] Constant’s patent application was not so classified. And Section 183 of the Invention Secrecy Act of 1952 cannot possibly provide a remedy for a classification under E.O. 12356, which did not exist until 1982” Id.
b. Plaintiffs Takings Claim is Barred by Res Judicata
In 1989, plaintiff filed an action pursuant to 35 U.S.C. § 183 in the United States District Court for the Southern District of California seeking damages caused by the government’s imposition of the 1987 secrecy order on his patent application. See Horn-back, 1993 WL 528066, at *1.17 During the litigation, plaintiff also asserted a Fifth Amendment takings claim. See id. The district court dismissed plaintiffs complaint and granted summary judgment in favor of defendant on the grounds that: (1) plaintiff failed to present a genuine issue of fact regarding his claimed damages, and (2) plaintiff could not-maintain a Fifth Amendment takings claim because § 183 provides the exclusive remedy to inventor-owners for damages claimed as a result of the government’s imposition of a secrecy order. Id.
[386]*386In July 1994, plaintiff filed another suit in the district court in California alleging that his patent application was subject to a taking requiring compensation under the Fifth Amendment. Hornback, 1996 WL 368135, at **1, 2.18 He specifically alleged that his property was taken when the United States, acting through the Department of the Air Force, classified his invention as secret and the PTO imposed a secrecy order on his patent application. Id. at *1. The district court dismissed plaintiffs claim for lack of subject matter jurisdiction and declined to transfer the action under 28 U.S.C. § 1631 to the Court of Federal Claims on the ground that plaintiffs claim was time barred. Id. at *2.
Plaintiff filed this action in January 1999 seeking compensation for a taking of his intellectual property. Plaintiff alleges that the government effected the taking by the imposition of a August 1987 secrecy order on his patent application. See Compl. at 1, 3. In determining whether the doctrine of res judi-cata precludes plaintiff from litigating this claim, the court applies the three-part test most recently articulated in Worthington, 50 Fed.Cl. at 715 and Adams, 51 Fed.Cl. at 59-60.
The court finds that: (1) the parties involved in plaintiffs claims filed in the district court of California in 1989 and 1994 are legally identical to the parties involved in this case; (2) the events underlying plaintiffs takings claim in the 1989 and 1994 actions filed in the district court of California are substantially the same as the events underlying plaintiffs takings claim here; and (3) plaintiff had a “full and fair opportunity to litigate” his takings claim in the lawsuits he filed in 1989 and 1994. Because plaintiff has litigated his takings claim and final judgment has issued on two prior occasions, the doctrine of res judicata precludes plaintiff from relitigating his takings claim. See Federated Dep’t Stores, 452 U.S. at 398, 101 S.Ct. 2424.
c. The Statute of Limitations Issue is Barred by Collateral Estoppel
Plaintiff filed suit in the district court in California in July 1994 seeking just compensation for the taking of his patent application. See Hornback, 1996 WL 368135, at *1. The district court determined that plaintiffs 1994 takings action was time-barred. Id. at *2. Affirming the district court’s decision on appeal, the Ninth Circuit stated:
Hornback’s claims accrued no later than April 1987, when the Air Force notified him by letter that his invention had been classified as secret. Hornback’s contention that his claim accrued much later, when he learned that a “taking” was required to classify his invention as secret is without merit. A cause of action accrues, not when a plaintiff was or should have been aware of potential legal theories, but when a plaintiff was or should have been aware of events giving rise to a cause of action.
Hornback has not demonstrated any fraudulent concealment on the part of the government which would equitably toll the statute of limitations. Because Hornback did not file his complaint until July 15, 1994, more than seven years after the accrual of his cause of action, his claims were time-barred. See 28 U.S.C. § 2501. Accordingly, the district court did not abuse its discretion in refusing to transfer Horn-back’s action to the Court of Federal Claims.
Id. at **1,2 (citations omitted).
In this case, plaintiff seeks compensation from the government for the alleged taking of his patent application by the imposition of the August 1987 secrecy order. See Compl. at 1. Plaintiff argues here that his takings claim did not accrue until he learned of the “duly” authorized classification of his patent application. See Compl. at 3, 4.
Plaintiffs claim requires this court to consider the same statute of limitations issue that was before the district court in California in plaintiffs 1994 takings action.19 See [387]*387Hornback, 1996 WL 368135, at *2. The statute of limitations issue was actually litigated and decided in the proceeding in the district court of California. Id. The issue of whether Mr. Hornback’s claim was time-barred was necessary to the decision of the district court in California to dismiss plaintiffs 1994 takings claim rather than to transfer his claim pursuant to 28 U.S.C. § 163. Moreover, as addressed in the Ninth Circuit’s unpublished opinion, Mr. Hornback argued his position on the timeliness of his takings claim and thereby had an opportunity to fully and fairly litigate the statute of limitations issue. See Hornback, 1996 WL 368135, at *2.
Because the four factors of the collateral estoppel doctrine, as articulated by the Federal Circuit, have been satisfied in this case, the court finds that the plaintiff is precluded from relitigating the issue of whether his takings claim is time-barred. See Banner, 238 F.3d at 1354; Jet, 223 F.3d at 1366.
d. The Issue of the Exclusivity of the Statutory Remedy is Barred by Collateral Estoppel
Defendant draws the court’s attention to a 1989 case filed by plaintiff in which he alleged a Fifth Amendment taking of his patent application. See Def.’s MotApp. at A52-A59 (Hornback v. United States, Civ. No. 89-1914-R (M), slip op. at 1-3 (S.D.Cal. Oct. 2, 1992)). Affirming the decision of the district court in California dismissing plaintiffs case, the Federal Circuit held that Mr. Hornback’s takings claim could not lie “because 35 U.S.C. § 183 provides the exclusive remedy to inventor-owners for damages claimed as the result of a secrecy order imposed by the government.” See Hornback v. United States, 1993 WL 528066, *1 (Fed. Cir. Dec.22,1993).
Defendant argues that plaintiff is precluded from asserting his pleaded takings claim in this case because the secrecy statute provides the exclusive remedy for his damages. Def.’s Mot. at 10, 11. Defendant asserts that because Mr. Hornback litigated this issue in his 1989 takings case, he is precluded by the doctrine of collateral estoppel from litigating the issue again here. Id. at 10.
The court now considers whether the doctrine of collateral estoppel applies to bar plaintiff from litigating this issue.
The secrecy statute provides a right to compensation to a patent applicant whose patent is withheld by the imposition of a secrecy order.20 35 U.S.C. § 183. Section 183 of the secrecy statute provides that an applicant whose patent is withheld in conformance with the secrecy statute “shall have the right ... to apply to the head of any department or agency who caused the order to be issued for compensation for the damage caused by the order of secrecy and/or for the use of the invention by the Government, resulting from his disclosure.” Id. Upon presentation of a claim by an applicant to the responsible agency, the agency “is authored ... to enter into an agreement with the [388]*388applicant ... in full settlement for the damage and/or use,” id., and such settlement “shall be conclusive for all purposes notwithstanding any other provision of law to the contrary.” Id. If full settlement of the patent applicant’s claim cannot be effected, the agency may award and pay to the applicant a sum not exceeding 75% of the amount deemed by the agency to constitute just compensation. Id. The patent applicant may bring suit against the United States either in the United States Court of Federal Claims or in the United States District Court for the district in which the patent applicant is a resident “for an amount which when added to the [agency] award shall constitute just compensation for the damage and/or use of the invention by the Government.” Id.
During briefing in Mr. Hornback’s 1989 case before the district court in California seeking damages in connection with the government’s imposition of a secrecy order on his patent application, defendant argued in its Memorandum of Points and Authorities in Support of Defendant’s Motion for Summary Judgment (Def.’s 7/15/92 Mem.) that plaintiffs takings claim could not lie. Def.’s 7/15/92 Mem. at 19. As authority for the government’s position, defendant relied on the decision of the Claims Court in Constant v. United States, 16 Cl.Ct. 629 (1989), aff'd, 884 F.2d 1398 (Fed.Cir.1989), cert. denied, 493 U.S. 1002, 110 S.Ct. 561, 107 L.Ed.2d 556 (1989).
In Constant, a patent applicant filed suit seeking compensation on the ground that the secrecy order imposed on his patent application constituted a Fifth Amendment taking. 16 Cl.Ct. at 630, 631-632. While acknowledging that “the imposition of the security order ... delayed the issuance of a patent to plaintiff and imposed other restrictions,” id. at 632, the Claims Court held that “the issuance of a secrecy order [pursuant to section 181] is not per se a taking.” Id. at 634. Stating that “[a]n inventor whose patent has been withheld under a secrecy order has a right created by statute ... to obtain compensation from the United States, and the [secrecy] statute sets forth procedures whereby this right may be realized,” id. at 632, the Claims Court observed that “diminution in value of [a patent applicant’s] invention and inability to exploit his invention are compensable elements of a claim under section 183, not under the Fifth Amendment.” Id. at 634. Citing several of its earlier decisions,21 the Constant court further noted that “not every act of the Government which impinges on property rights constitutes a com-pensable taking” under the Fifth Amendment. Id. at 632.
Mr. Hornbaek responded to defendant’s arguments in his Memorandum of Points and Authorities in Support of Plaintiffs Opposition to Motion for Summary Judgement (Pl.’s 7/27/92 Opp.) arguing that by imposing the secrecy order on his patent application, the government infringed upon his right to obtain a patent. Pl.’s 7/27/92 Opp. at 2. Citing Leesona v. United States, 220 Ct.Cl. 234, 599 F.2d 958 (1979), plaintiff asserted that the government owed compensation for infringing upon his right to obtain a patent.22 Pl.’s [389]*3897/27/92 Opp. at 2. Additionally, plaintiff urged that the facts of Constant were distinguishable because the secrecy order in that case was rescinded three months before the complainant’s patent application was in condition for allowance and thus, no taking had occurred. Pl.’s 7/27/92 Opp. at 3, 5. Finally, plaintiff contended that the Franco-Italian Packing Co. case,23 one of the cases cited by the court in the Constant decision, was inapplicable because the case involved a war-time seizure rather than a peace-time act. Pl.’s 7/27/92 Opp. at 16.
The doctrine of collateral estoppel precludes the revisiting of issues if: (1) the issues are identical to those in a prior proceeding, (2) the issues were actually litigated, (3) the determination of the issues was necessary to the resulting judgment, and (4) the party defending against preclusion had a full and fair opportunity to litigate the issues. Banner, 238 F.3d at 1354; Jet, 223 F.3d at 1366 (citing Restatement (Second) of Judgments, §§ 27, 39 (1980)). Defendant contends that plaintiffs takings claim implicates the same issue — whether the secrecy statute provision, 35 U.S.C. § 183, provides the exclusive remedy to an inventor-owner for damages caused by the imposition of a secrecy order — presented in plaintiffs 1989 takings case before the district court of California. See Def.’s Mot. at 10,11.
The court agrees. The issue of whether the secrecy statute provides a complete remedy was not only presented in plaintiffs 1989 takings case, but was actually litigated because, as demonstrated by the parties’ briefing in the 1989 ease, the issue “was properly raised by the pleadings, was submitted for determination, and was determined.” Banner, 238 F.3d at 1354. The determination of the issue was necessary to the district court’s decision dismissing plaintiffs 1989 case on the grounds that: (1) Mr. Hornback failed to present a genuine issue of fact regarding the damages claimed by him under 35 U.S.C. § 183, and (2) Mr. Hornback’s Fifth Amendment claim was inappropriate because the secrecy statute provided the exclusive remedy to an inventor-owner for damages. See Hornback, 1993 WL 528066, at *1; Hornback v. United States, No. 89-1914-R(M), slip op. at 5-6 (S.D.Cal. Oct. 1, 1992). Plaintiff does not dispute that he had a full and fair opportunity to litigate this issue before the district court in California, and the Federal Circuit has observed that “mere disagreement with a legal ruling does not mean that a party has been denied a ‘full and fair’ opportunity to litigate.” Banner, 238 F.3d at 1355.
Finding that the four factors of the collateral estoppel doctrine have been satisfied, the court determines that the collateral es-toppel doctrine applies to preclude plaintiff from relitigating here the issue of whether 35 U.S.C. § 183 provides the exclusive remedy to an inventor-owner for damages caused by the imposition of a secrecy order.
III. Conclusion
For the foregoing reasons, Defendant’s Motion for Summary Judgment Pursuant to RCFC 56(b) for Res Judicata, or in the Alternative, to Dismiss Pursuant to RCFC 12(b)(1) and 12(b)(4), both motions having been considered, is GRANTED as to both motions. The Clerk of Court shall enter judgment for defendant. Each party shall bear its own costs.
IT IS SO ORDERED.
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Cite This Page — Counsel Stack
52 Fed. Cl. 374, 2002 U.S. Claims LEXIS 96, 2002 WL 602738, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hornback-v-united-states-uscfc-2002.