United States v. HopkinsAnnotate this Case
427 U.S. 123 (1976)
U.S. Supreme Court
United States v. Hopkins, 427 U.S. 123 (1976)
United States v. Hopkins
Argued April 19-20, 1976
Decided June 24, 1976
427 U.S. 123
CERTIORARI TO THE UNITED STATES COURT OF CLAIMS
Asserting jurisdiction under the Tucker Act, which provides for suits in the Court of Claims upon any express or implied contract with military exchanges, respondent's decedent brought suit against the United States alleging that his discharge from his position as a civilian employee of the Army and Air Force Exchange Service (AAFES) breached an employment contract. The Government moved to dismiss for lack of jurisdiction, claiming that the Tucker Act was not applicable to employment contracts and alternatively that AAFES employees do not have a contractual relationship with their employer, but serve by "appointment." Denying this motion, the Court of Claims, after determining that AAFES employees could never serve by appointment, held that it had jurisdiction because respondent's decedent's relationship with the AAFES was based upon an implied contract of employment and such contract was covered by the Tucker Act, as amended in 1970.
Held: Since the Tucker Act applies, by its terms, to "any express or implied contract," it is applicable to employment contracts as well as those for goods or other services, and hence respondent's decedent's allegations that his discharge constituted a breach of an employment contract was sufficient, under the Act as amended in 1970, to withstand the Government's motion to dismiss. But in determining whether the decedent was employed by virtue of a contract or by appointment, the Court of Claims gave insufficient attention to applicable administrative regulations relating to the status of AAFES employees, and thus erred in its threshold determination that such employees could never serve by appointment.
206 Ct. l. 303, 513 F.2d 1360, affirmed in part and vacated and remanded in part.
This case involves a suit by respondent's decedent, [Footnote 1] a civilian employee of the Army and Air Force Exchange Service (AAFES), claiming wrongful discharge from his employment. He asserted jurisdiction under the Tucker Act, 28 U.S.C. § 1491, which provides for suits in the Court of Claims upon any express or implied contract with such military exchanges. The Government moved to dismiss for lack of jurisdiction. The Court of Claims concluded that it had jurisdiction because respondent's decedent's relationship with the AAFES was based upon an implied contract of employment and such a contract is covered, since 1970, by the Tucker Act. 206 Ct.Cl. 303, 513 F.2d 1360. We granted certiorari to resolve a conflict between this decision and a contrary holding of the United States Court of Appeals for the Fifth Circuit in Young v. United States, 498 F.2d 1211 (1974). 423 U.S. 821.
The status of claims against military post exchanges has been in some doubt since the decision of this Court in Standard Oil Co. v. Johnson,316 U. S. 481 (1942). There, the Court, in striking down a state tax on the distribution of motor fuel by Army post exchanges, held that such exchanges
"are arms of the Government deemed by it essential for the performance of governmental functions. They are integral parts of the War Department. . . ."
However, the Court also observed that the "Government assumes none of the financial obligations of the exchange." Id. at 316 U. S. 485.
The latter observation was the basis of a series of decisions by the Court of Claims to the effect that it lacked jurisdiction over claims concerning the activities of nonappropriated fund instrumentalities. [Footnote 2] That court held that it could not entertain suits based on a contract for services with such an entity, because, since the Government had assumed no liability for the entity's financial obligations, it could not be said to have consented to a suit designed to vindicate such obligations. Therefore, no "claim against the United States" existed under the Tucker Act, which is the source of Court of Claims jurisdiction, Borden v. United States, 126 Ct.Cl. 902, 116 F.Supp. 873 (1953); Pulaski Cab Co. v. United States, 141 Ct.Cl. 160, 157 F.Supp. 955 (1958); Kyer v. United States, 177 Ct.Cl. 747, 369 F.2d 714 (1966), cert. denied, 387 U.S. 929 (1967).
The Court of Claims, while denying jurisdiction, recognized the harsh consequences of this result, since it could leave claimants against the exchanges with no forum in which to seek relief. However, the court recognized that "it is up to Congress to remedy this apparent harsh result. . . . [T]he courts should refrain from legislating by judicial fiat." Keetz v. United States, 168 Ct.Cl. 205, 207 (1964).
In 1970, Congress amended the Tucker Act and provided:
"For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service . . . shall be considered an express or implied contract with the United States."
Pub.L. 91-350, 84 Stat. 449.
The purpose of this amendment, as the reports of both Houses made clear, was to afford contractors a federal forum in which to sue nonappropriated fund instrumentalities by doing away with the inequitable "loophole" in the Tucker Act. S.Rep. No. 91-268, p. 2 (1969); H.R.Rep. No. 91-933, p. 2 (1970). Borden, supra; Pulaski, supra; Keetz, supra; and Kyer, supra, were cited as examples of the "harsh result" which the amendment would correct. The purpose of the bill was clearly to provide a remedy to "contractors" with nonappropriated fund instrumentalities, e.g., S.Rep. No. 91-268, pp. 4-5, and there is nothing in the legislative history to indicate, as the Government contends, that "contractors" did not include anyone who had formed a contractual employment relationship. Since the statute applies, by its terms, to "any express or implied contract," we hold that it is applicable to employment contracts, as well as those for goods or other services. The fact that Congress has dealt specifically with exchange employees when it wanted to bring them within or leave them without the provisions of a law dealing with federal employees generally (e.g., 5 U.S.C. § 8171(b)) is not of controlling weight here. This statute deals with those who have a contractual relationship with military exchanges, rather than with different classes of federal employees. If employees of military exchanges are within its general language, they are not removed from its effect by congressional practices in enacting other kinds of statutes.
The Government alternatively contends that AAFES employees do not have a contractual relationship with their employer, and that, like orthodox federal employees, they serve by "appointment" to a particular position. While there is some ambiguity in the opinion of the Court of Claims, that court apparently agreed that plaintiff
and others like him did have a contractual employment relationship with the AAFES. We think it would be both unnecessary and unwise for us to decide the question at this stage of the case, and we think that the Court of Claims gave insufficient attention to applicable administrative regulations when it undertook to decide the question.
The exchange services are created and administered pursuant to the general authority granted the Secretary of the Army and the Secretary of the Air Force by 10 U.S.C. §§ 3012 and 8012. The nonappropriated fund status of the exchanges places them in a position whereby the Federal Government, absent special legislation, does not assume the obligations of those exchanges in the manner that contracts entered into by appropriated fund agencies are assumed. Standard Oil Co. v. Johnson, 316 U.S. at 316 U. S. 485. The nonappropriated fund status of the exchanges, however, does not alter the fact that the Secretaries of the Army and the Air Force may engage employees by "appointment," in the same manner as other personnel hired by the Secretaries may be employed. See Standard Oil Co. v. Johnson, supra; Crenshaw v. United States,134 U. S. 99 (1890); Butler v. Pennsylvania, 10 How. 402 (1851).
The regulations governing the AAFES, state that ordinary employees are deemed employees of an instrumentality of the United States, and hold their positions by appointment. AR 60-21/AFR 147-15, c. 1, § I,