Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-26-2003

Global Fin Corp v. USA
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-1993




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                                                  NOT PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                 ____________

                     No: 02-1993
                   _______________


        GLOBAL FINANCIAL CORPORATION,
                         Appellant


                            v.

            UNITED STATES OF AMERICA




      Appeal from the United States District Court
               for the District of New Jersey
           (D.C. Civil Action No.00-cv-05577)
     District Judge: Honorable Garrett E. Brown, Jr.
                  ___________________


      Submitted Under Third Circuit LAR 34.1(a)
                 on January 13, 2003


Before: ROTH, FUENTES and ALDISERT, Circuit Judges


             (Opinion filed June 26, 2003)




                      OPINION
ROTH, Circuit Judge.

       The Federal Government moved to dismiss two claims brought by appellant

Global Financial Corporation in the United States District Court for the District of New

Jersey. Global brought claims against the United States for (1) negligence concerning the

assignment of claims and (2) violation of the Assignment of Claims Act (the “Assignment

Act”) under which Global contended it had a private right of action. The District Court

dismissed the claim for negligence because it failed to state a claim upon which relief

could be granted.1 F ED. R. C IV. P. 12(c). The District Court dismissed the claim for a

private right of action because it lacked subject matter jurisdiction. F ED. R. C IV. P.

12(b)(1). Global Financial appealed both decisions.

       We have appellate jurisdiction pursuant to 28 U.S.C. § 1291. The standard of

review for both dismissals is plenary. Gould Electronics, Inc. v. United States, 

, 176 (3d Cir. 2000) (stating that standard of review for Rule 12(b)(1) motion to

dismiss is plenary); Rose v. Bartle, 

, 342 (3d Cir. 1989) (stating that standard

of review for Rule 12(c) motion to dismiss is plenary).

       Both grounds for appeal involve sovereign immunity. The United States is

immune from liability in tort actions, unless clear statutory consent exists to the contrary.

See United States v. Mitchell, 

, 538 (1980), remanded to 

(Ct.


   1
    The United States originally filed a Rule 12(b)(6) motion under the Federal Rules of
Civil Procedure. The District Court correctly noted that procedurally the United States
should have filed a Rule 12(c) motion for a judgment on the pleadings because it had
already filed an answer. The District Court treated the motion as if the correct Rule 12(c)
motion had been filed.
Cl. 1981), cert. granted, 

(1982), aff’d by 

(1983). Plaintiff

“bears the burden of showing an unequivocal waiver of immunity.” Baker v. United

States, 

, 562 (9th Cir. 1988), cert. denied, 

(1988) (citations

omitted). The waiver cannot be implied, see United States v. Nordic Village, Inc., 

, 37 (1987) (insisting upon clarity in statutory text of an “unequivocal expression”

of intent to eliminate sovereign immunity); FMC Corp. v. United States Dept. Of

Commerce, 

, 839 (3d Cir. 1994) (en banc) (citing United States v. Testan, 

, 399 (1976)), and must be strictly construed in favor of the Government. See

Nordic 

; Ardestani v. INS, 

, 137 (1991).

       Global Financial claims that the District Court erred when it (1) did not find that

the Federal Government had a duty not to accept competing assignments under the

Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 1346 and (2) failed to recognize a waiver

of sovereign immunity on the part of the Federal Government through the context of the

Assignment Act, 31 U.S.C. § 3727, in conjunction with the Tucker Act, 28 U.S.C. §

1491. It is not clear whether Global Financial’s negligence claim was based on a duty not

to accept competing assignments or a duty to inform Global Financial of a competing

assignment. The misrepresentation exception 2 to the FTCA only applies to the latter. See

28 U.S.C.A. § 2680(h). Viewing the facts in the light most favorable to the nonmoving

party, the District Court correctly dismissed the latter basis for the claim and addressed



   2
    The misrepresentation exception to the FTCA states that the FTCA is not applicable
to claims that arise out of “misrepresentation.” 28 U.S.C. § 2680(h).
the former.

       The FTCA waives the Government’s sovereign immunity from tort actions. See

Rayonier, Inc. v. United States, 

, 319 (1957). This waiver of immunity is,

however, only for recognized causes of action. See Feres v. United States, 

,

142 (1950). The District Court determined that New Jersey tort law governed this case.3

Therefore, the FTCA would only be applicable against the Government if non-

compliance with the Assignment Act requirements provided a cause of action against a

private individual under New Jersey tort law. See 

, Indian

Towing Co. v. United States, 

, 68 (1955).

       A waiver of sovereign immunity may not be implicitly enlarged or extended to

include causes of action not within the terms of the statute. See Klamath and Moadac

Tribes v. United States, 

, 250 (1935). Global Financial’s claim is based on

the “tort of another” doctrine, an element of which is the commission of a tort by the

defendant. See R ESTATEMENT (S ECOND) T ORTS § 914(2). Under New Jersey tort law, no




   3
    Under the FTCA, the applicable law is “the law of the place where the act or omission
occurred.” 28 U.S.C. § 1346(b); see also United States v. Muniz, 

, 152
(1963) (citing 28 U.S.C. § 1346(b)). The District Court conducted a thorough choice of
law analysis because the parties were in dispute over whether Texas or New Jersey law
applied to Global Financial’s claim. The District Court concluded that the tort law
standard that applied to this case was the tort law of New Jersey. Although the tortious
act was committed in Texas, the District Court determined that Texas choice-of-law rules
employ the“significant relationship” test. R ESTATEMENT (S ECOND) OF C ONFLICTS §§ 6,
145. Under this test, the New Jersey tort laws would be applicable because the injury
suffered and the payment of litigation costs took place in New Jersey. Neither party
disputed this conclusion on appeal.
cause of action for negligence has been established against private individuals for

accepting and acknowledging competing assignments. The breach of contract cases 4

Global Financial cites in its brief are not sufficient to satisfy the FTCA requirements for

Government waiver of sovereign immunity. The FTCA concerns waiver of sovereign

immunity for tortious acts committed by the Government and not for breach of

contractual duties committed by the Government. See Petersburg Borough v. United

States, 

, 162 (3d Cir. 1988) (distinguishing between tort and contract duties).

Because New Jersey case law does not provide an unequivocal cause of action in tort law

against private individuals for violation of the Assignment Act requirements, the United

States did not owe a duty of care to Global Financial. We will affirm the District Court’s

conclusion that the complaint failed to state a claim on which relief could be granted.

       As to the Assignment Act claim, a district court lacks subject matter jurisdiction

for claims against the United States where sovereign immunity has not been waived. The

Assignment Act provides for an assignee to make a claim against the United States “to

recover payment for work performed by the contractor.” Thomas Funding Corp. v.

United States, 

, 502 (1988). It does not, however, provide for recovery of

damages caused by the Government’s violations of the Assignment Act’s provisions.

Neither does the Assignment Act contain an unequivocal waiver of the Government’s

sovereign immunity for failure to comply with its provisions.


   4
     Spilka v. South America Managers, Inc., 

(N.J. 1969); Tirgan v. Mega
Life & Health Ins., 

(N.J. Super. Ct. Law Div. 1997)). These cases
concerned liability of private individuals for breach of contractual duties.
       Global invokes the Tucker Act, 28 U.S.C. § 1491, to create waiver of sovereign

immunity. The Tucker Act is, however, a jurisdictional statute. It does not provide for

any substantive right of recovery. See 28 U.S.C. § 1491(a)(1). Any claim made under the

Tucker Act must be founded in “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.”

Id.; see also United States v. Mitchell, 

, 216 (1983) (citing 28 U.S.C. §

1491(a)(1)). To be cognizable under the Tucker Act, the source of law relied upon must

establish a claim for money damages against the United States. See M 

. Further, a fair interpretation of the law must show that it mandates compensation

from the United States for the damages incurred. See 

Act does not, however, mandate compensatory damages for non-

compliance with its provisions. The Assignment Act’s waiver of sovereign immunity for

claims of wrongful payment of funds under the assignment does not invoke the Tucker

Act’s waiver for damages claims for violations of the Assignment Act. Therefore, the

Tucker Act is not applicable to Assignment Act violations.5 We will affirm the District

Court’s order, dismissing the claim for lack of subject matter jurisdiction, because neither

the Assignment Act nor the Tucker Act in conjunction with the Assignment Act provide



   5
    Moreover, if the Tucker Act were applicable to the current case, the District Court
would have lacked subject matter jurisdiction over the issue because jurisdiction under
the Tucker Act claims belongs to the Untied States Court of Federal Claims. See 28
U.S.C. §§ 1346(a)(2), 1491(a)(1).
for waiver of the Government’s sovereign immunity.

      For the foregoing reasons, we will affirm the judgment of the District Court.




      _______________________

      TO THE CLERK:


             Please file the foregoing Opinion.




                                                  By the Court,




                                                  /s/ Jane R. Roth
                                                  Circuit Judge