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District Court Had Tucker Act Jurisdiction

A district court had jurisdiction over a claim against the government for injunctive and declaratory relief based on regulatory violations, but not based on contractual violations, held the Court of Appeals for the Tenth Circuit, because the Tucker Act's exception to the sovereign immunity waiver is limited to claims which are essentially contractual. The government terminated the contractor's subsidy payments under the Section 8 federal housing program after finding the contractor had failed to comply with a contractual requirement to keep units in satisfactory condition. The contractor brought suit in federal district court for a preliminary and permanent injunction to prevent termination of the payments, alleging the termination was a breach of contract and a violation of various regulations. Appealing the district court's dismissal for lack of jurisdiction, the contractor disputed the court's characterization of its claim as a disguised claim for monetary relief and argued the claim was for "relief other than monetary damages" to which the Administrative Procedure Act's waiver of sovereign immunity (5 USC 702) applied.

"Impliedly Forbids"

The Tenth Circuit first determined the claim implicated the APA's waiver of sovereign immunity because the claim's primary purpose was to obtain equitable relief. The claim was not for monetary relief because its focus was entirely prospective --seeking to preserve the contractor's ongoing relationship with the government rather than enabling a claim for past pecuniary harm. In addition, the claim sought to prevent the government's allegedly premature termination of Section 8 payments, not recovery of compensatory damages. The court then addressed whether another statute might forbid the relief. The Tucker Act "impliedly forbids" federal courts other than the Court of Federal Claims from ordering declaratory or injunctive relief for claims founded on contract, but not for claims founded on the Constitution, statutes, or regulations. Accordingly, the district court correctly declined jurisdiction over the claim for breach of contract, but it erred in dismissing the contractor's regulatory claims. The fact that the regulatory violation could not have been alleged absent the existence of a contract did not convert a claim asserting rights based on federal regulations into one which is "at its essence" a contract claim. The case was reversed and remanded in part, and affirmed in part. (Normandy Apartments, Ltd. v. Dept. of Housing and Urban Development, et al., CA-10, 53 CCF 79,066)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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