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Decision brings jurisdictional clarity to certain contract actions against the government under the Tucker Act


Washington, DC (September 29, 2011) - James Boland, of Venable’s Tysons Corner office, has won a significant appeal before the United States Court of Appeals for the Federal Circuit on behalf of his client, Timothy O. Holmes.  Mr. Holmes, a disabled Navy veteran, appealed the final judgment of the United States Court of Federal Claims, which had dismissed his complaint for lack of jurisdiction under the Tucker Act.  The complaint alleges that the Department of the Navy breached two separate contracts settling Title VII claims and seeks damages.

The Court of Federal Claims had granted the government’s motion to dismiss on the grounds that neither contract can “fairly be interpreted as contemplating damages” in the event of a breach by the government.  The trial court also dismissed the complaint on the basis that the claim was jurisdictionally barred by the six-year statute of limitations. 

In reversing the lower court, the Federal Circuit first held—in an issue of first impression for the circuit and resolving a split within the Court of Federal Claims—that the trial court has jurisdiction over contracts settling Title VII claims.  The Federal Circuit then clarified that, “when a breach of contract claim is brought in the Court of Federal Claims under the Tucker Act, the plaintiff comes armed with the presumption that money damages are available.” Examining the contracts at issue, the Circuit concluded that both can fairly be interpreted as mandating the payment of damages because they “inherently relate to monetary compensation.” The Circuit also rejected the government’s argument that one of the contracts at issue was a “consent decree” subject only to the jurisdiction of the U.S. District Court for the Northern District of California.

With respect to the statute of limitations, the Circuit rejected the lower court’s determination that the suit was time-barred because, under the facts alleged in the complaint, the plaintiff was “entitled to the benefit of the accrual suspension rule” and that Mr. Holmes filed the complaint within six years of when he reasonably should have known of the alleged breach.  The Circuit remanded the matter to the lower court for further adjudication.

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