Khairallah v. United States

43 Fed. Cl. 57, 1999 U.S. Claims LEXIS 39, 1999 WL 102248
CourtUnited States Court of Federal Claims
DecidedFebruary 26, 1999
DocketNo. 93-132C
StatusPublished
Cited by16 cases

This text of 43 Fed. Cl. 57 (Khairallah 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
Khairallah v. United States, 43 Fed. Cl. 57, 1999 U.S. Claims LEXIS 39, 1999 WL 102248 (uscfc 1999).

Opinion

OPINION

BRUGGINK, Judge.

Plaintiff in this action, Nagy Khairallah, alleges that he contracted with the United States, acting through the United States Department of Justice Drug Enforcement Administration (DEA), to provide services as a confidential informant in exchange for twenty five percent of the value of assets seized as the result of that information. Pending is defendant’s renewed motion for summary judgment.1 The matter was transferred to this judge on December 10, 1998. It is fully briefed and oral argument is deemed unnecessary. For the reasons set forth below, defendant’s motion is granted.

BACKGROUND

The following facts are drawn from plaintiffs proposed findings of uncontroverted fact2 which are supported in turn by his numerous affidavits and his deposition, and from defendant’s affidavits, to the extent they are uncontested. Defendant’s acquiescence to plaintiffs statement of facts is for the sole purpose of determining whether there is credible evidence that any of the DEA individuals with whom plaintiff dealt had authority to bind the government in contract, or whether any authorized individual ratified the alleged agreement. Such a determination is paramount to resolving the ultimate legal issue involved here — whether an enforceable contract existed between plaintiff and the DEA.3

Plaintiff was born in Lebanon on September 18, 1955, and has been a citizen of the United States since 1984. From 1980 to 1983, plaintiff worked as a confidential informant with the Royal Canadian Mounted Police (Mounted Police). In 1983, the Mounted Police was engaged in a joint operation with the United States. During this joint effort, plaintiff came into contact with DEA agents in Toronto, Canada, and in July 1983, began working as a confidential informant on various DEA investigations.

In late 1983, plaintiff entered into an arrangement with - Harry Hansel. Group Supervisor for the DEA’s Detroit, Michigan, office. Hansel and plaintiff agreed that the DEA would pay plaintiffs expenses, plus $5,000 for each kilogram of heroin seized. In addition, plaintiff would receive $100 a day and rewards of twenty five percent of the value of assets recovered. Plaintiff began working in Detroit and was consistently paid in accordance with this arrangement;

In March or April 1984, while working in Puerto Rico, plaintiff met DEA agents William Kean, field agent, and Frank Panessa, either Group Supervisor or Assistant Special Agent in Charge, both from the New York Field Division Office. Upon the DEA’s request, plaintiff went to work for the DEA in New York. Kean told plaintiff that the DEA would pay plaintiff a salary of $3,100 per month plus $1,000 per week for expenses.4 [59]*59Additionally, the DEA would reimburse plaintiff for extraordinary expenses such as travel costs, unusually high phone bills, and costs associated with entertainment of various targets. The agents agreed that plaintiff would receive twenty five percent of all cash seized by the United States resulting from the cases in which plaintiff was involved. In addition, the DEA would pay plaintiff $5,000 per kilogram of heroin seized and $1,000 per kilogram of cocaine seized. Plaintiff agreed and immediately began working for the New York Field Division.

Plaintiffs agreement with the DEA was again reaffirmed in 1985 by Jack McCreedy, Assistant Special Agent in Charge of the New York Field Division. Supervision of plaintiff was later moved to Group Supervisor James Kibble’s New York Field Division Group 34. Kibble reaffirmed1 plaintiffs agreement with the DEA. In 1989, plaintiff moved to DEA Group 32 under the supervision of Group Supervisor Gloria Woods who also reaffirmed the agreement.

In 1987, plaintiff worked on an investigation of Sholomo Cohen which resulted in the seizure of five pounds of cocaine and $53,-000.5 Plaintiff did not receive a reward from this seizure. Also in 1987, plaintiff worked on an investigation of Sami Ibrahimi which resulted in the seizure of one pound of cocaine and $73,000.6 Again, plaintiff did not receive a reward from this seizure. In 1988, plaintiff worked on the investigation of Joseph Mancini which resulted in the seizure of 113 pounds of cocaine and $480,000.7 Plaintiff received a ten percent reward from this seizure. Plaintiff claims that the DEA refused to reward plaintiff in the Cohen and Ibrahimi cases and rewarded plaintiff only ten percent in the Mancini seizure because of plaintiffs participation in an internal investigation of DEA Group 32 in 1987.

Plaintiff continued working full time for the DEA as a confidential informant until he was deactivated in 1991, when he pled guilty to one count of perjury relating to testimony regarding his failure to declare the compensation received from the DEA on his tax returns. Plaintiffs perjury violated a “Cooperating Individual Agreement”8 he had signed in 1987 in which he agreed not to “violate criminal laws in furtherance of gathering information or providing services to DEA....”

Defendant does not dispute that plaintiff worked on numerous cases up until his deactivation in 1991, and that, with the exception of the three cases that form the basis of this action, the DEA always paid plaintiff in the way he asserts. Beginning in 1991, plaintiff began submitting written requests to the DEA for twenty five percent of the value of the assets seized in the Cohen and Ibrahimi investigations and an additional 15 percent of the value of the assets seized in the Mancini investigation. In his correspondence, plaintiff stated that his requests were “in accordance with Public Law 98-473,” which apparently refers to Act of Oct. 12, 1984, Pub.L. No. 98-473, 98 Stat.1984, now codified at 28 U.S.C. § 524 (1994) (hereafter “Section 524”). Plaintiff consistently framed his administrative requests for payment in terms of Section 524. The DEA denied the requests on the ground that plaintiff had already been adequately compensated for his participation in those investigations and that further rewards under Section 524(c) would not be forthcoming.

PROCEDURAL HISTORY

Plaintiff filed the instant complaint on March 5, 1993. Count I alleges that defendant breached a contract with plaintiff. Plaintiff adds that such a contract would be authorized pursuant to Section 524. Count [60]*60II alleges breach of contract and unjust enrichment. Count III alleges that defendant’s failure to make payments to plaintiff constitutes a deprivation of plaintiffs liberty and property rights under the Fourteenth Amendment to the Constitution in violation of 42 U.S.C. § 1983 (1994). Defendant moved to dismiss all three counts pursuant to RCFC 12(b)(1) for lack of subject matter jurisdiction. In a September 14, 1993, order, Judge Andewelt, to whom this case was previously assigned, granted defendant’s motion to dismiss Count III and that portion of Count II that was not based on a breach of contract theory. See Khairallah v. United States, No. 93-132C, slip op. at 3 (Fed.Cl. Sep. 14, 1993).

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Bluebook (online)
43 Fed. Cl. 57, 1999 U.S. Claims LEXIS 39, 1999 WL 102248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/khairallah-v-united-states-uscfc-1999.