Lion Raisins, Inc. v. United States

54 Fed. Cl. 427, 2002 U.S. Claims LEXIS 321, 2002 WL 31625651
United States Court of Federal Claims·Decided November 20, 2002·No. No. 02-29 C·Published·Cited by 19 cases

Opinion

OPINION AND ORDER

HEWITT, Judge.

This is a claim by a raisin packer for damages resulting from defendant’s conduct of inspections under the statutes and regulations governing raisin processing and packaging. Defendant, acting through the United States Department of Agriculture (USDA), moves to dismiss for lack of subject matter jurisdiction or, alternatively, for failure to state a claim upon which relief may be granted. For the following reasons, the motion to dismiss for lack of subject matter jurisdiction is GRANTED.

I. Background

Plaintiff Lion Raisins, Inc. (Lion Raisins) is a California company that has been marketing raisins since 1903.1 Complaint (Compl.) ¶¶1, 4. Lion Raisins purchases raisins from growers in the Central San Joaquin Valley of California, processes the raisins, and then sells them to various buyers domestically and internationally. Id. at U 4. As a raisin handler,2 Lion Raisins is subject to the Raisin Marketing Order established by USDA in furtherance of The Agricultural Marketing Agreement Act, 7 U.S.C. §§ 601-626 (1999 and West Supp.2002).

[429]*429In accordance with that statute and the applicable regulations, all incoming and outgoing raisins handled by Lion Raisins must be inspected by USDA. Compl. ¶ 6. USDA charges raisin packers an inspection fee to cover the cost of “service rendered.” See id. (citing 7 U.S.C. § 1622(h)).

Plaintiff alleges that “[f]rom and including 1995 through the 2001 crop year, Lion has averaged approximately 50,000 tons of raisins ... [for] which it was required to pay the USDA inspection service fee at an average price of $ 17.00 per ton (includes both incoming and outgoing [raisin inspection] fees, and $18.00 per ton since and including the 2000 crop year).” Compl. ¶ 7. Plaintiff asserts that “[i]mplied in the contract that Lion has with USDA for the inspection services, is USDA’s commitment that it would fairly, accurately, and completely inspect the raisins and give a true and correct accounting as to the quality of the raisins,” Id. at 118, and that such inspections would be conducted in accordance with the applicable regulations. Id. at ¶ 9.

On January 9, 2002, plaintiff filed a two-count complaint. Plaintiff asserts that “[t]his court has jurisdiction pursuant to 28 U.S.C. §§ (sic) 1491(a)(1) in that this complaint involves a contract with the United States, through the USDA, and is also a claim against the United States founded upon a regulation of an Executive Department, that is the United States Department of Agriculture, and an Act of Congress.” Compl. ¶ 3.

In its first count (“Breach of Implied Contract”), plaintiff alleges that USDA breached “an implied-in-fact” contract with Lion Raisins to perform faithful, honest and accurate inspections. Compl. ¶¶12-13. Plaintiff claims that USDA breached its implied contract with Lion Raisins by, inter alia, falsely claiming to have conducted inspections, failing to perform all of the required tests and fabricating test results, and preparing false inspection certificates. See Compl. ¶10. Lion Raisins alleges that, as a result of USDA’s breach, it paid for “inspection services ... which were not faithfully performed, ... or were not earned.” Compl. ¶13. Lion Raisins also alleges that it incurred additional inspection expenses “to have its own inspection done ... to insure the quality of the product that the buyer receives.” Id.

In its second count (“Violation of Statute or Regulation”), plaintiff complains that USDA intentionally and/or negligently failed to faithfully, honestly and accurately provide inspection services to Lion in violation of the regulations and marketing order. Compl. ¶¶14-15. Plaintiff alleges that USDA’s regulatory violations “entitled] Lion to a refund of the [inspection] fees paid.” Compl.¶ 15.

Defendant moved to dismiss the first count of the complaint for failure to state a claim upon which relief could be granted on the ground that plaintiff failed to establish the existence of an implied-in-fact contract.3 Defendant’s Motion to Dismiss (Def.’s Mot.) at 1, 8-15. Defendant moved to dismiss the second count for lack of subject matter jurisdiction because the laws on which plaintiff relies are not money-mandating.4 Id. at 23. Defendant also alleged that both counts sounded in tort and thus, did not fall within the jurisdiction of the court. Def.’s Mot. at 15-18, 21-23.

In opposing defendant’s motion to dismiss, however, plaintiff changed the theory underlying its second cause of action from “a claim founded upon a regulation of an Executive Department [namely USDA] and an act of Congress,” Compl. ¶3, and asserted for the first time that the second count of the complaint is an illegal exaction claim over which the court may exercise jurisdiction. See Plaintiffs Opposition to Defendant’s Motion to Dismiss (Pl.’s Opp.) at 7-9. Defendant replied that plaintiffs second cause of action [430]*430did not support an illegal exaction claim.5 Defendant’s Reply to Plaintiffs Opposition to Defendant’s Motion to Dismiss (Def.’s Reply) at 11-15.

II. Discussion

A. Standard of Review

Defendant moves to dismiss the first count of plaintiffs complaint (“Breach of Implied Contract”) under RCFC 12(b)(6) for failure to state a claim upon which relief can be granted. Def.’s Mot. at 20-21. The Supreme Court has stated that in evaluating a motion to dismiss for failure to state a claim, “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); see also Hamlet v. United States, 873 F.2d 1414, 1416 (Fed.Cir.1989); LaMirage, Inc. v. United States, 44 Fed.Cl. 192, 196 (1999). In rendering a decision on a motion to dismiss, the court must presume that undisputed 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 and Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.Cir.1988); LaMirage, 44 Fed.Cl. at 196.

Defendant moves to dismiss the second count of the complaint (“Violation of Statute or Regulation”) under Rule 12(b)(1) of the United States Court of Federal Claims (RCFC) for lack of subject matter jurisdiction. Def.’s Mot. at 1. The Tucker Act, 28 U.S.C. § 1491

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Lion Raisins, Inc. v. United States, 54 Fed. Cl. 427, 2002 U.S. Claims LEXIS 321, 2002 WL 31625651 (uscfc 2002).

54 Fed. Cl. 427 (Lion Raisins, Inc. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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