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October 12, 1996

STEPHEN S. ADAMS, et al., Plaintiff,
CHARLES A. BOWSHER, Comptroller General of the United States, et al., Defendants.


The opinion of the court was delivered by: GREEN

Before the Court are Plaintiffs' Motion for Summary Judgment and Defendants' Motion for Judgment on the Pleadings, or, in the Alternative, for Summary Judgment. For the reasons stated hereafter, Plaintiffs' motion is denied and Defendants' motion for Summary Judgment is granted.


 Plaintiffs are current or former employees of the United States, employed by one of several agencies as criminal investigators or in some other law enforcement capacity. Those agencies include the Bureau of Alcohol, Tobacco and Firearms ("BATF"), Drug Enforcement Administration ("DEA"), Internal Revenue Service ("IRS"), Customs Service ("Customs"), and the U.S. Secret Service ("Secret Service").

 In February of 1990, Plaintiffs brought actions in the United States Court of Federal Claims ("CFC"), alleging, inter alia, that they improperly had been considered exempt from the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and were entitled to compensation for unpaid overtime wages. *fn1" (Compl. P 16). Identical claims were filed simultaneously with the General Accounting Office (GAO). (Compl. P 20). In a decision dated October 30, 1992, the CFC concluded that some of the Plaintiffs employed by those agencies were exempt from the FLSA's overtime compensation provisions, while others were not exempt. Adams v. United States, 27 Fed. Cl. 5 (1992). Thereafter, in March 1994, the United States reached "partial" settlement agreements with those plaintiffs the CFC had determined to have been non-exempt from the FLSA. See Bernstein Decl., Exhibits 8-10.

 In the wake of the CFC decision, as well as the ensuing settlements, Plaintiffs in this case, on April 12, 1994, attempted to have their previously filed administrative claims resolved by GAO. Def. Mot. Sum. J., Ex. 4. On May 23, 1994, GAO issued a ruling in a case similar to Plaintiffs', concluding that the two or three-year statute of limitations period contained in the Portal-to-Portal Act, 29 U.S.C. § 255(a), rather than the six-year limitations period contained in the Barring Act, 31 U.S.C. § 3702(b)(1), was applicable to all pending and future FLSA administrative claims, and, therefore, the claim was time barred. Matter of: Joseph M. Ford, 1994 U.S. Comp. Gen. LEXIS 446, 1994 WL 201742 (C.G.)(May 23, 1994). This decision reversed the GAO's previous longstanding interpretation that a six-year limitation period applied for filing FLSA claims. *fn2"

 On September 30, 1994, a six-year statute of limitations for FLSA claims filed with GAO was enacted by Congress with the passage of the 1995 Treasury, Postal Service and General Government Appropriations Act, P.L. 103-329, § 640, 108 Stat. 2432 (1994). ("1995 Act.") Section 640 of the 1995 Act ("original Section 640") directed that a six-year statute of limitations be applied for all claims filed prior to June 30, 1994, thereby reversing the GAO's decision in Ford. Id. Notwithstanding, Plaintiffs' claims before GAO were not resolved. Instead, Plaintiffs were told that their claims must first be filed with the Plaintiffs' employing agencies. Def. Mot. Sum. J., Ex. 7.

 As directed, Plaintiffs filed their claims in the form of letters to the employing agencies outlining their claims. *fn3" Def. Mot. Sum. J., Exs. 13, 14.

 On November 19, 1995, Congress amended Section 640 of the 1995 Act, reaffirming the six-year limitation period for FLSA claims filed prior to June 30, 1994, but making the section inapplicable to employees who had previously "received any compensation for overtime hours worked during the period covered by the claim under any other provision of law. . ." and for time spent driving between home and duty station. Treasury, Postal Service, and General Government Appropriations Act of 1996, Pub. L. 104-52, 109 Stat. 468-69 (1995). ("amended Section 640"). GAO has since applied this statute to deny claims for compensation where an employee was paid for administratively uncontrollable overtime ("AUO") and for time spent driving between the claimant's home and office. Matter of: Marvin B. Atkinson, 1996 WL 31212 (C.G.)(January 29, 1996).


 This case presents complex issues of law because it not only requires interpretation of various competing statutes, but raises constitutional questions, as well.

 Plaintiffs argue that Section 640 of the 1995 Act, as well as the subsequent amendment to that section, violate due process because they operate retroactively to divest Plaintiffs of already earned overtime pay. The Government asserts that no property rights are implicated and, even if there were, the government acted properly because its purpose in passing the statute was both reasonable and rational.

 The analytical framework for this case begins with whether Plaintiffs had a vested property interest at stake, see Association of Accredited Cosmetology Schools v. Alexander, 298 U.S. App. D.C. 310, 979 F.2d 859, 864 (1992), and, if so, whether the retroactive effect of such economic legislation had a "legitimate legislative purpose furthered by rational means." General Motors Corp. v. Romein, 503 U.S. 181, 191, 117 L. Ed. 2d 328, 112 S. Ct. 1105 (1992)(quoting Pension Benefit Guar, Corp. v. R.A. Gray & Co., 467 U.S. 717, 730, 81 L. Ed. 2d 601, 104 S. Ct. 2709 (1984)). An examination of the relevant statutes serves as a starting point.

 A. Statute of Limitations Under Fair Labor Standards Act (FLSA)

 The Fair Labor Standards Act, 29 U.S.C. § 201 et. seq., which allows claims for unpaid overtime compensation to employees, was made applicable to federal workers by amendment in 1974. 29 U.S.C. § 207(a)(1974). The Statute of Limitations for FLSA claims is found in the Portal-to-Portal Act and allows for a two-year limitations period in cases where the violation of the FLSA is non-willful and three years where the violation is willful. 29 U.S.C. § 255(a)(1947). Notwithstanding the provisions of the Portal-to-Portal Act, the GAO, pursuant to its authority to settle administrative claims under the Barring Act, 31 U.S.C. § 3702, traditionally has applied the six-year statute found in that section, to administrative FLSA claims. See Transportation Systems Center, 57 Comp. Gen. 441 (1978); Federal Firefighters, 68 Comp. Gen. 681 (1989).

 As stated previously, this policy changed with GAO's decision in Ford when the GAO determined that the two or three-year statute of limitations contained in the Portal-to-Portal Act (which is expressly applicable to the FLSA) trumped the six-year period found in the Barring Act. Ford at 4. In so concluding, the GAO relied on the language of the Barring Act, which establishes a six-year limit on filing claims with GAO "except . . . as provided by . . . another law." 31 U.S.C. § 3702(b)(1)(A). The GAO determined "another law" to be the Portal-to-Portal Act and denied the claims on that basis. Ford at 4.

 Congress, however, extended the two or three-year limitation period to six years by passing Section 640 of the 1995 Act. Although this section effectively reversed the Ford decision, it did so only for those Plaintiffs who filed their claims prior to June 30, 1994. Moreover, the amendment to Section 640, enacted a year later, placed further limitations on even these individuals by making the six-year limitation period applicable only to those who had not received overtime compensation under other specified statutes and circumstances or, whose claims involved commuting time. 1996 Act, § 640.

 As matters now stand, the Plaintiffs can be divided into two distinct groups for purposes of this analysis: 1) those who filed their claims after the June 30, 1994, date, and, therefore, fall under the 2-3 year limitation period GAO applies to FLSA claims, and 2) those who filed their claims prior to June 30, 1994, but received overtime compensation under other provisions of law or claim overtime for time spent commuting, and are, therefore, excluded from coverage under amended Section 640.

 In either instance, the Court, as an initial matter, must decide whether there is a property interest at stake.

 B. Property Interest

 The two alleged property interests advanced here are: 1) "pending and accrued administrative backpay claims" and 2) "earned but unpaid FLSA overtime compensation." Pls'. Mot. Sum. J. at 1, 44. Courts have held that a cause of action, while a "species of property" protected by due process, nonetheless is "inchoate, and affords no definite or enforceable property right until reduced to a final judgment." Austin v. City of Bisbee, Arizona, 855 F.2d 1429, 1435 (9th Cir. 1988), citing In re Consolidated U.S. Atmospheric Testing Litigation, 820 F.2d 982 (9th Cir. 1988). In the Austin case, the Plaintiff was a police officer who had filed his FLSA claim in court. Before the court ruled, however, Congress passed retroactive legislation that effectively extinguished the plaintiff's claim. The appellate court concluded that the Plaintiff had failed to perfect his rights prior to the change in the law, and, therefore, had no property interest in the cause of action. 855 F.2d at 1435. Here, of course, there is no final judgment involving the Plaintiffs' claims and so, the Court reaches a similar conclusion.

 With regard to Plaintiffs' alleged property interest in their "earned but unpaid FLSA overtime compensation," the Court views this as a much closer question. "Property rights to public benefits are defined by the statutes or customs that create the benefits." Jones v. Reagan, 748 F.2d 1331, 1338 (9th Cir. 1984) citing Board of Regents v. Roth, 408 U.S. 564, 577, 33 L. Ed. 2d 548, 92 S. Ct. 2701, (1972). The court in Austin dealt with this issue contritely by relying on the decision in Jones which stated: "When . . . the statute authorizing the benefits is amended or repealed, the property right disappears." Id. Although the outcome essentially is correct, the Court is not inclined to agree with the reasoning in Jones.

 Prior to FLSA being made applicable to federal workers, there was no expectation of overtime compensation under FLSA and, therefore, no due process property interest. Once added to the FLSA, however, federal workers could thereafter expect to receive overtime compensation treatment under FLSA. While this arguably created a property interest, such a conclusion, without looking further, misses the point that the FLSA is a creature of statute and can only confer benefits contained within the statute. The expectation to overtime compensation, therefore, is governed by the provisions of the FLSA and any other applicable statutory provisions. The question then becomes, exactly what rights did the FLSA and relevant statutes confer on the Plaintiffs, e.g., what is the applicable statute of limitations period for the Plaintiffs?

 It is at this juncture of the analysis that the posture of the two groups of Plaintiffs becomes important. For the Plaintiffs who filed their claims after June 30, 1994, or are otherwise excluded under amended Section 640, the question is whether they should have been given the two or three-year limitation period under the Portal-to-Portal Act, or the six-year period under the Barring Act.

 Plaintiffs claim that the Barring Act refers to administrative claims while the Portal-to-Portal Act refers only to "causes of action" filed in court. The Court finds no support for such a position. The Court agrees with the reasoning in Hickman v. United States, 10 Cl. Ct. 550, 552 (1986), in which the CFC concluded that Congress acted deliberately in setting the limitation period at two or three years and that there was nothing in the legislative record indicating congressional intent to impart a more liberal limitations period to federal employees than to employees in the private sector. Accordingly, this Court cannot construct a statutory interpretation contrary to congressional intent. Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984).

 The Court is aware that for many years the GAO applied a six-year statute of limitations to FLSA claims filed administratively. The simple fact is that GAO was wrong to do so. Until the passage of Section 640 in the 1995 Act, GAO had no authority to permit a 6 year limitation period for FLSA claims. Moreover, GAO's error cannot impart an expectation sufficient to create a property interest. As the Defendants correctly point out, GAO is granted its authority by Congress and is subject to any limitations Congress may impose. Chrysler Corp. v. Brown, 441 U.S. 281, 302, 60 L. Ed. 2d 208, 99 S. Ct. 1705 (1979)("The legislative power of the United States is vested in the Congress, and the exercise of quasi-legislative authority by governmental departments and agencies must be rooted in a grant of such power by the Congress and subject to limitations which that body imposes.")). Here, that limitation was a two or three-year limitation period for FLSA claims. The Court concludes, therefore, that Plaintiffs who are not included under the amended Section 640 (because their claims were filed after June 30, 1994) have no property interest in back pay claims or unpaid overtime compensation.

 The remaining Plaintiffs are a different matter. When Congress extended the statute of limitations for FLSA claims to six years by passage of the original Section 640 of the 1995 Act, Plaintiffs suddenly acquired property interests in their unpaid overtime compensation. Although amended Section 640 excludes many of those who otherwise would have fallen within the original Section 640, the Court does not find that these Plaintiffs automatically lose their property interests. The Court disagrees with the reasoning in Jones and Austin that Congress may extinguish an otherwise vested property interest concerning agency action merely by ...

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