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AMERICAN AIRLINES, INC. v. AUSTIN

November 25, 1991

AMERICAN AIRLINES, INC., ALASKA AIRLINES, INC., CONTINENTAL AIRLINES CORP., DELTA AIR LINES, INC., EASTERN AIRLINES, INC., NORTHWEST AIRLINES, INC., PAN AMERICAN WORLD AIRWAYS, INC., UNITED AIR LINES, INC., and USAIR, INC., Plaintiffs,
v.
RICHARD G. AUSTIN, as Acting Administrator of General Services Administration, GENERAL SERVICES ADMINISTRATION, a Federal Agency, and UNITED STATES OF AMERICA, Defendants.



The opinion of the court was delivered by: STANLEY S. HARRIS

 This matter is be fore the Court on defendants' motion to dismiss for lack of subject matter jurisdiction. Upon consideration of the motion, plaintiffs' opposition thereto, and the entire record herein, the Court concludes that defendants' motion should be denied.

 Background

 The following facts are taken from the complaint. On September 28, 1989, the General Services Administration (GSA) requested that plaintiffs, United States commercial airlines, refund money from airline tickets that the Government allegedly purchased and never used. With a few exceptions, the GSA did not identify or return the unused tickets to the airlines.

 On May 15, 1990, GSA modified its demand, limiting the refund request to include only those tickets purportedly purchased by the Department of the Army and the Department of the Air Force during 1985. GSA sent a limited number of unused tickets to the airlines, but the tickets received represented only a small portion of the money that was demanded. *fn1" Instead of returning the remainder of the tickets, GSA calculated the cost of the remaining unused tickets using a "statistical sample" and withheld future payments to the airlines to offset that amount.

 Plaintiffs filed this action on June 14, 1990. They allege that the Government used all of the tickets that it purchased in 1985, other than those already returned and refunded. They maintain, therefore, that the Government illegally offset amounts owed by various federal agencies to the airline carriers.

 Plaintiffs pray for a declaratory judgment that the offsets are unlawful, an injunction forbidding future use of such offsets, and return of the monies withheld. Their complaint sets forth five counts: (1) violation of the Transportation Act Regulation, 41 C.F.R. § 101-41.210-2 and § 101-41.210-3, which requires that unused tickets be "forwarded to the carrier"; (2) violation of the Federal Claims Collection Standards, 4 C.F.R. § 102.3(a), which requires that before an agency can offset any payments, those claims must be "liquidated or certain in amount"; *fn2" (3) violation of the Debt Collection Act of 1982, 31 U.S.C. § 3716 (a)(3), which requires the Government to produce unused airline tickets for plaintiffs' inspection before making any offsets; (4) wrongful withholding of funds by GSA; and (5) recovery under the Prompt Payment Act, 31 U.S.C. § 3901, of interest penalties associated with the monies allegedly unlawfully withheld.

 Discussion

 Defendants have moved to dismiss the case for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. They argue that plaintiffs' claim exceeds $ 10,000 and is "founded upon" a contract with the Government, contending that therefore the Tucker Act confers exclusive jurisdiction in the United States Claims Court. *fn3" Plaintiffs argue that the Administrative Procedure Act (APA), 5 U.S.C. § 701, and 28 U.S.C. § 1331, provide for subject matter jurisdiction in this court.

 Plaintiffs deny that a contract exists but contend that even if one does exist, the Court still has jurisdiction because each ticket creates a separate claim and, thus, no single claim exceeds $ 10,000. Plaintiffs maintain that not only is this Court the appropriate forum for their claim, it is the only one that can grant adequate relief. To determine the proper forum, the Court must first examine the federal question jurisdiction statute, the APA, and the Tucker Act.

 To establish that a court has jurisdiction over a suit against the United States, a plaintiff must show that the court has subject matter jurisdiction over the issues raised by the suit, that the United States has waived its immunity for suits of that kind, and that the United States has consented to be sued in that particular court. See 14 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure Jurisdiction 2d § 3654 (1985).

 Under 28 U.S.C. § 1331, the District Court has original jurisdiction in all civil actions arising under the Constitution, laws, or treaties of the United States. Although § 1331 is not a general waiver of sovereign immunity, it gives the District Court subject matter jurisdiction to review agency action, providing that the suit arises under federal law and there is an express waiver of sovereign immunity by the Government. See New Mexico v. Regan, 745 F.2d 1318, 1321 (10th Cir. 1984), cert. denied, 471 U.S. 1065, 85 L. Ed. 2d 496, 105 S. Ct. 2138 (1985).

 Both criteria are met in this case: plaintiffs are suing a federal agency, the GSA, under federal law and are relying on the APA's waiver of sovereign immunity. The APA provides judicial review of agency action to parties seeking nonmonetary relief. *fn4" See Rowe v. United States, 633 F.2d 799, 801 (9th Cir. 1980), cert. denied, 451 U.S. 970, 68 L. Ed. 2d 349, 101 S. Ct. 2047 (1981). Section 702 of the APA was amended in 1976 "to remove the defense of sovereign immunity as a bar to judicial review of federal administrative action" in a federal court. B.K. Instrument, Inc. v. United States, 715 F.2d 713, 724 (2d Cir. 1983).

 The APA does not create an independent grant of jurisdiction to the federal courts. See Califano v. Sanders, 430 U.S. 99, 51 L. Ed. 2d 192, 97 S. Ct. 980 (1977). Nevertheless, federal jurisdiction could be grounded on 28 U.S.C. § 1331. See Committee for Full Employment v. Blumenthal, 196 App. D.C. 155, 606 F.2d 1062, 1065 n.11 (D.C. Cir. 1979) ("Nothing in Sanders suggests that § 702 does not grant a cause of action to one suffering a legal wrong within the meaning ...


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