John R. Sand & Gravel Co. v. United States (06-1164)
Oral argument: November 6, 2007.
Appealed from: United States Court of Appeals for the Federal Circuit (Aug. 9, 2006).
TUCKER ACT, STATUTE OF LIMITATIONS, SOVEREIGN IMMUNITY, SUBJECT MATTER JURISDICTION, COURT OF CLAIMS, TAKINGS
John R. Sand & Gravel Co. (“JRS”) brought a takings claim against the United States government in the U.S. Court of Federal Claims pursuant to the Tucker Act. The United States filed a motion to dismiss the action, claiming that JRS filed the suit after the Tucker Act’s six-year statute of limitations expired. The United States Court of Federal Claims denied the motion to dismiss. The U.S. Court of Appeals for the Federal Circuit vacated the decision of the lower court because it found that the Court of Claims lacked jurisdiction to hear the claim, even though neither party raised the issue of jurisdiction; it was raised by a group of interested third parties in an amicus brief. The Federal Circuit, agreeing with the amicus brief, dismissed the case, finding that the statute of limitations was a jurisdictional issue that the court could raise sua sponte, or on its own, and that JRS brought the claim too late. JRS argues that the plain language of the statute shows that the statute of limitations is not a jurisdictional issue and the court could not raise the issue sua sponte. JRS relies on the legislative history of the Tucker Act to support its point. Conversely, the United States government argues that because the statute of limitations is part of Congress’s waiver of sovereign immunity, it does limit the jurisdiction of the court. While the issue in this case is narrow, the Court’s decision may help in delineating where the Court draws the line between which issues are jurisdictional and which are not.
The statute of limitations in the Tucker Act, 28 U.S.C. § 2501, provides: “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 question presented is: Whether the statute of limitations in Tucker Act limits the subject matter jurisdiction of the U.S. Court of Federal Claims.
Whether the statute of limitations in the Tucker Act limits the subject matter jurisdiction of the U.S. Court of Federal Claims?
In 1969, John R. Sand & Gravel Co. (“JRS”) signed a 50 year lease for a 158-acre tract of land in Michigan. John R. Sand & Gravel Co. v. United States, 457 F.3d 1345, (Fed. Cir. 2006) at 2. The lease provided JRS with the exclusive rights to mine, excavate, and improve the land. Id. at 2. At the time JRS signed the lease, Russell and Mildred Parrish, the lessors, operated a landfill on the property. The Parishes continued to operate the landfill until 1980. Id. at 3. Prior to 1980, the landfill operators accepted industrial waste in large drums, illegally. Id. In fact, tens of thousands of drums are currently buried at the site. Id.
In 1984, because the illegally accepted waste created a hazardous waste problem, the Environmental Protection Agency (“EPA”) placed the landfill site on the National Priorities List, pursuant to 42 U.S.C. §§ 9601-9675, in an attempt to clean up the site. Id. at 4. As such, in 1986, the EPA excavated the drums, tested the soil for toxins, and installed groundwater monitoring wells and a storage pad on the site. Id. at 4-5. In 1990, the EPA took further action to contain the hazardous waste at the site and to protect the groundwater. Id. at 5.Pursuant to this action, in 1993, the EPA erected a chain link fence—complete with three strands of barbed wire—on JRS’s leasehold. The fence enclosed approximately 60% of the property. Id. In 1994, the EPA constructed a new internal security fence, which further restricted JRS’s access to portions of the property. Id.
Although JRS and the EPA agreed to move the location of the fence on several occasions throughout the 1990s, they continued to disagree on one issue. Id. at 5-6. JRS alleged the EPA interfered with its property rights and owed it “just compensation” pursuant to the Fifth Amendment of the U.S. Constitution. The Fifth Amendment requires the government to pay “just compensation” to anyone from whom it takes property for public use. Id. at 6. In addition to mailing letters to the EPA, JRS physically interfered with the EPA’s work. Id. Indeed, the record shows that JRS cut the locks on the EPA fence, blocked EPA access to the site by obstructing the access road with dirt or water, and threatened to destroy the fence. Id. In 1998, the U.S. District Court for the Eastern District of Michigan enjoined JRS from interfering with EPA actions any further. Id.
On May 20, 2002, JRS filed suit against the United States government in the United States Court of Federal Claims, alleging, among other things, that the EPA’s fence was tantamount to a “permanent physical taking,” which requires “just compensation.” Id. at 7. Shortly thereafter, the United States government filed a motion to dismiss the action, claiming JRS filed the suit after the six-year statute of limitations period expired. Id. Although the Court of Claims denied the government’s motion to dismiss with respect to most of the property that JRS alleged that the EPA took, the intricate procedural details of the suit are not at issue in this case. Id. at 8.
On appeal, the U.S. Court of Appeals for the Federal Circuit vacated the decision of the Court of Claims, finding that the Court of Claims lacked jurisdiction to hear the claim, even though neither party had raised the issue of jurisdiction. Id. at 12-13, 28. In fact, only the Metamora Group, a coalition of twelve corporations that contributed waste to the landfill, raised the issue of jurisdiction in its amicus brief. Id. at 12-13. The Court agreed with the amici that the Tucker Act’s statute of limitations is jurisdictional. The Court also found that because JRS’s claim did not accrue until later than 1994 , the Tucker Act’s six-year statute of limitations barred its 2002 claim. Id. at 19. Thus the Court of Federal Claims lacked jurisdiction to hear the case. Id. at 27-28.
Although JRS presented two questions in its petition for a writ of certiorari to the U.S. Supreme Court, the Court limited its grant of certiorari to the first question: whether the Tucker Act’s statute of limitations is an element of subject matter jurisdiction. The Court declined to certify the second question: “Whether a claim for a permanent physical taking of a portion of real property first accrues upon the government’s temporary exclusion of the property holder from another portion of the property.” See Questions Presented. As a result, the facts of this case are largely irrelevant to the issue in play.
According to Article III of the United States Constitution, the United States government maintains sovereign immunity. This means that the government cannot be sued without its consent. See Annotations to Article III. The case at hand arises under the Tucker Act, codified at 15 U.S.C. § 1491, with its statute of limitations codified at 28 U.S.C. § 2501. Under the Tucker Act, “The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” According to Section 2501, the period specified in the statute of limitations on such claims is six years, meaning that the court can dismiss any suit brought after the six-year time limit has expired.
Subject matter jurisdiction determines whether or not a court has the authority to hear a particular issue in controversy. Generally, a court may raise issues of subject matter sua sponte, that is, they are never waived and can be raised by the court even if the litigants did not present the issue for consideration. According to Finn v. United States, statutes of limitation are not considered to be jurisdictional in most situations. 123 U.S. 227 (1887). The general rule, however, does not apply to suits against the United States in the Court of Claims because the government has not waived its sovereign immunity.
JRS argues that “[t]he text of 28 U.S.C. § 2501, which assumes subject matter jurisdiction, should not simultaneously be read to limit subject matter jurisdiction.” Brief for Petitioner at 10. Specifically, JRS argues that Section 2501 may only bar an action that was filed after the time period in the statute of limitations expired, when the Court of Claims already has jurisdiction. See id. Therefore, according to JRS, the statute of limitations issue cannot be jurisdictional. See id.
In response, the United States government argues that court precedent supports its position. According to the government, the statute of limitations in the Tucker Act is jurisdictional, notwithstanding the traditional rule that statutes of limitations are not jurisdictional. This is due to the fact that Congress has not expressly waived the statute of limitations. Under the doctrine of sovereign immunity, Congress must expressly waive the statute of limitations in order for any party to sue the government. Brief in Opposition at 13. Because there is no waiver, the United States argues the Court of Claims does not have jurisdiction over claims brought beyond the statutory timeframe. Hence, the statute of limitations in the Tucker Act must be jurisdictional.
The question of whether the tolling of a statute of limitations is a jurisdictional issue is a fundamental and noteworthy procedural question. However, the Court will only consider whether the Tucker Act’s statute of limitations is jurisdictional. Therefore, the outcome of the case may only affect those who may consider filing a claim against the federal government in the Court of Claims. The Court may also decide to create a broader rule, encompassing all statutes of limitations. A broader holding by the court is unlikely, however, because the Court declined to address this issue in previous cases. In Bowles v. Russell, for example, the most recent case where the Court considered the issue, the court determined that statutory time limits for filing a notice of appeal are jurisdictional. 551 U.S. ___ (2007).
As of October 24, three amicus briefs were filed in this case, two of which support JRS. The first, filed by the National Association of Home Builders (“NAHB”), largely addresses the timing of the tolling of the statute of limitations in this case, an issue the Court declined to consider. See Amicus Brief by the National Association of Home Builders in Support of Petitioner at 4. The brief does mention, however, that the NAHB agrees with JRS's position that Section 2501 does not institute a jurisdictional limitation. See id.
Those affected by the limitations of sovereign immunity also have a significant interest in this case. The second amicus brief, filed by the Pacific Legal Foundation (“PLF”), addresses the impact of this case on sovereign immunity. PLF claims that the government’s argument based on the doctrine of sovereign immunity presents flawed reasoning. See Amicus Brief by the Pacific Legal Foundation in Support of Petitioner at 2. As the “[t]akings Clause does not require an explicit waiver of sovereign immunity because the Constitutional Framers waived immunity when they adopted the Fifth Amendment,” PLF argues that this case need not address any explicit waiver of sovereign immunity. See id.The statute of limitations in Section 2501, therefore, cannot be a jurisdictional issue because Fifth Amendment claims are inherently exempt from sovereign immunity scrutiny. See id. at 9.
The Metamora Group, a group of companies that disposed of waste in the landfill and first brought the issue of jurisdiction to the attention of the Court of Appeals, filed an amicus brief in support of the United States. Making many similar arguments to the United States, the group argues, as it did in its previous amicus brief to the Court of Appeals, that “Section 2501 is a mandatory, jurisdictional limitation on the filing of suits against the United States.” See Amicus Brief by the Metamora Group in Support of Respondent at *17. In addition, while the group urges the court to affirm the Court of Appeals decision, it questions the need for review at all, noting that there is no disagreement among the circuits, and that the issue presented only arises on rare occasions. In fact, it argues that “the question presented for this Court’s resolution is largely academic and can have no practical impact on the disposition of this case.” See id. at *2. Therefore, the group alternatively urges that the Court dismiss the writ of certiorari as improvidently granted. See id.
JRS: Plain Language of Statute Shows Statute of Limitations Not Jurisdictional
JRS argues that the plain language of Section 2501 supports its position that the statute of limitations is not jurisdictional. See Brief for Petitioner at 13-14. Specifically, JRS contends the unambiguous language of Section 2501 presupposes that the court has jurisdiction to rule on a statute of limitations defense. See id. at 14. Thus, the Court may only reach the statute of limitations issue once it has jurisdiction over the claim, under the jurisdictional grant of the Tucker Act, 28 U.S.C. § 1491(a)(1). See id. JRS supports this view by contrasting the Tucker Act with similar federal statutes; for example, the Indian Tucker Act, 28 U.S.C. 1505, which expressly limits the jurisdiction of the Court of Claims to actions accruing after a certain date. See id. at 17-18. Moreover, JRS argues that Section 2501 is codified in an area of the U.S. Code where procedural statutes are located, evincing a Congressional intent not to treat it as a jurisdictional provision. See id. at 22-23.
Parties Disagree on Effect of History and Precedent
JRS uses the legal and legislative history of Section 2501 to show that it is not a jurisdictional provision. See Brief for Petitioner at 24. JRS traces the origins of the six-year statute of limitations to 1863 and contends that “no participant in the legislative process ascribed jurisdictional status to the statute of limitations . . . .” See Brief for Petitioner, at 26-28. JRS argues the Supreme Court has “consistently reiterated” its belief that statutes of limitations affect a party’s ability to obtain a remedy but not the party’s ability to bring the cause of action in the first place. See Brief for Petitioner at 29. Put another way, since a statute of limitations only eliminates the ability for a party to obtain a remedy but does not affect the jurisdiction of a court to hear the cause of action in the first place, statutes of limitations generally are interpreted by courts as non-jurisdictional. See id. at 29. For instance, the Supreme Court explained in Sun Oil Co. v. Wortman, 486 U.S. 717 (1988), that the traditional American rule is that the “bar of the statute does not extinguish the underlying right but merely causes the remedy to be withheld.” Id. at 725. To the extent Supreme Court dicta exists contrary to the traditional rule, JRS argues, the dicta “has been displaced and superseded.” See Brief for Petitioner at 30-32.
The United States government, on the other hand, believes case precedent is on its side. The Supreme Court repeatedly has stated that the United States cannot be sued without the consent of Congress, and that that consent is a “prerequisite for jurisdiction.” See Brief in Opposition at 8. More specifically, in Block v. North Dakota, 461 U.S. 273, 287 (1983), the court stated that “[w]hen waiver legislation contains a statute of limitations, the limitations provision constitutes a condition on the waiver of sovereign immunity.” Additionally, in United States v. Finn, 123 U.S. 227 (1887), the Court held that while statutes of limitations are generally not jurisdictional, this limitation does not apply to claims against the United States because “the Government has not expressly or by implication conferred authority upon any of its officers to waive the limitation imposed by statute.” Finn, 123 U.S. at 232-33. In sum, the United States argues that the statute of limitations in Section 2501 is a condition of the waiver of sovereign immunity, making the statute of limitations a jurisdictional issue. JRS argues in return that although waivers of sovereign immunity are generally construed in favor of the sovereign, the general rule does not permit the Court in this case to use an interpretive method to “override the plain language and structure of the statute.” Brief for Petitioner at 42. JRS contends “a parsing of theories of statutory interpretation should not be necessary in this case” because the only issue is whether Section 2501 “should be characterized as a jurisdictional statute.” Brief for Petitioner at 44 (emphasis in original).
In support of its position, JRS cites Irwin v. Veterans Administration, 498 U.S. 89 (1990), where the Supreme Court rejected the argument that a statute of limitations on a waiver of sovereign immunity is an absolute jurisdictional limit. See Brief for Petitioner at 33. Relying on Irwin and its progeny, JRS asserts the Tucker Act’s waiver of sovereign immunity gives rise to the presumption that its statute of limitations is not jurisdictional, and that courts should apply the Tucker Act’s statute of limitations “in the same way that is applicable to private suits,” Irwin namely as an affirmative defense. See Brief for Petitioner at 37-38. The United States argues that Irwin does not “speak directly to the question” presented in this case because it does not resolve issues of statutory time limits in suits against the government and, more specifically, does not resolve whether those limits are jurisdictional. See Brief in Opposition at 11.
United States: Even if not Jurisdictional, Court still may raise Statute of Limitations
The United States argues that “[p]etitioner’s argument depends on the proposition that, if the six-year limitations period prescribed by Section 2501 is not jurisdictional, the court of appeals was precluded from inquiring into the timeliness of petitioner’s complaint when the government failed to raise the point on appeal.” Brief in Opposition at 14-15. However, according to the United States, this position is incorrect. In Day v. McDonough, 547 U.S. 198, 209 (2006), the Court said that the fact that statutes of limitations generally are not jurisdictional could mean that a court must raise the issue on its own, “but it does not foreclose the court from doing so.” Id. at 15. JRS interpreted Day to stand for the proposition that statutes of limitations are not jurisdictional, but omitted the above language from Day, ignoring the fact that the Day court left open the question of whether a court may raise a non-jurisdictional issue sua sponte. See Brief for Petitioner at 37-38. In addition, the government argues that since the jurisdictional issue was raised in an amicus brief, JRS had “an adequate opportunity to address the question of its compliance with Section 2501.” Id.
JRS: Policy Favors a Non-Jurisdictional Statute of Limitations
JRS argues that construing Section 2501 to be a non-jurisdictional statute is good public policy. See Brief for Petitioner at 44-46. Because the primary purpose of a statute of limitations is to ensure that the defendant will not have to defend against stale claims, courts cannot justify a “special rule” that would excuse the government from suit when it does not challenge the timeliness of the action. See Id. at 45. Moreover, JRS argues, to impose a duty on the courts to investigate timeliness when the government has conceded that point “adds to the burdens on the judiciary and expands the subjects for litigation.” See id. In addition, denying jurisdictional status to Section 2501 “would not throw the courthouse door wide open to stale and untimely claims,” because the government is capable of raising the statue of limitations defense if is decides to do so. See Id. at 46.
A Broad or Narrow Decision?
According to Vikram David Amar, a professor at the University of California, Davis School of Law, “it is generally a good thing when the Supreme Court wants to clarify which requirements in particular litigations are jurisdictional and which are not.” See Vikram David Amar, How An Upcoming Supreme Court Case Illustrates and Continues the Court's Current Interest in “Jurisdictional” Questions, Sept. 14, 2007. This is due to the fact that, much like the situation here, much rides upon the thin line between jurisdictional and non-jurisdictional issues. See id. Although it is possible that the Court could create an overarching rule that statutes of limitations always are or always are not jurisdictional, it is unlikely that the court will elect to go in this direction because jurisdictional issues are very “context-specific.” See id. As a result, the Court likely will not choose to paint with a broad brush but will fashion another narrow rule, as it did in the recent decision in Bowles v. Russell, 551 U.S. ___ (2007), in which the court determined that statutory time limits for filing a notice of appeal are jurisdictional.
This case fits with the Supreme Court’s current focus on the jurisdictional limits of federal judicial power—specifically what issues courts may raise sua sponte and which issues they may not. Although the outcome of this case will have important implications for the United States government and those with claims arising under the Tucker Act, it may have much broader repercussions. In recent years, the court has attempted to draw a line between jurisdictional and non-jurisdictional issues in a piecemeal fashion. While the law in this area is becoming clearer, there is still much uncertainty. Although the Supreme Court will consider a narrow issue in this case, its decision could be helpful in delineating the location of that jurisdictional/non-jurisdictional line.
Edited by: Tim Birnbaum
The authors would like to thank Professor Kevin Clermont for his insights into this case.