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Brunwasser v. United States

December 11, 2008

ALLEN N. BRUNWASSER, PLAINTIFF,
v.
UNITED STATES OF AMERICA, DEFENDANT.



The opinion of the court was delivered by: Judge Nora Barry Fischer

Memorandum Opinion

I. Introduction

Plaintiff Allen N. Brunwasser ("Plaintiff") brought this cause of action against the United States of America*fn1 ("the Government") regarding the disposition of $1,782.00 in interest allegedly due on a certain U.S. Treasury bill. (Docket No. 44). Specifically, Plaintiff, the owner of numerous U.S. Treasury bills, alleges that the Government failed to send him a reinvestment notice regarding one of his Treasury bills in breach of its contractual obligations with him. (Docket No. 44 at 5). Plaintiff asserts that the Government's breach caused a delay in his Treasury bill reinvestment; hence, depriving him of one-month's interest on the bill in the amount of $1,782.00. (Docket No. 44 at 3-4). Presently before the Court is the Government's Motion to Dismiss Plaintiff's Amended Complaint (Docket No. 47) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Based on the following, the Government's Motion is GRANTED IN PART and DENIED IN PART.

II. Procedural Background

Plaintiff originally filed the instant action in the Court of Common Pleas of Allegheny County, Pennsylvania, Case No. GD-07-003811. (Docket No. 1). The United States subsequently removed the case pursuant to 28 U.S.C. §§ 1442 and 1446. (Id.). The facts alleged and the procedural history of this case through March 17, 2008 have been discussed in the Court's earlier Memorandum Opinion and Order on the Government's Motion to Dismiss Plaintiff's Complaint (Docket No. 12), Brunwasser v. United States, Civ. A. No. 07-385, 2008 U.S. Dist. LEXIS 21030 (W.D. Pa. Mar. 17, 2008); (see also Docket No. 41). In that Opinion, the Court granted the Government's motion to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(1) on the ground that the Court lacked jurisdiction under 28 U.S.C. § 1352 and 28 U.S.C. § 1346(b)(1), the Federal Tort Claims Act. Additionally, the Court granted Plaintiff's Motion for Leave to Amend (Docket No. 35) his original Complaint (Docket No. 1-2) in order to add the correct jurisdictional authority, the Little Tucker Act, found at 28 U.S.C. §1346(a)(2). (Docket No. 41 at 14). Thereafter, the Court ordered Plaintiff to file his Amended Complaint on or before April 17, 2008. (Docket No. 43).

On April 14, 2008, Plaintiff filed a Motion for Reconsideration (Docket No. 42) of the Court's Memorandum Opinion and Order (Docket No. 41), which, based on Plaintiff's arguments in said motion, the Court interpreted as a motion for an extension of time in which to file a motion for reconsideration and/or leave to file an amended complaint. Plaintiff's Motion was granted, extending the filing due date for his Amended Complaint or Motion for Reconsideration to May 27, 2008. (Docket No. 43). On May 12, 2008, Plaintiff filed his Amended Complaint. (Docket No. 44). In response, on June 27, 2008, the Government filed a Motion to Dismiss Plaintiff's Amended Complaint and Brief in Support thereof. (Docket Nos. 47 and 48). In turn, on August 7, 2008, Plaintiff filed a Motion to Strike Defendant's Exhibits C and B*fn2 (Docket No. 50), which the Government attached to its Motion to Dismiss. On September 2, 2008, the Government filed its Response to Plaintiff's Motion to Strike arguing that the exhibits were properly before the Court on its Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). (Docket No. 56 at 3).

Thereafter, on September 4, 2008, the Court denied Plaintiff's Motion to Strike Exhibits C and B, finding that when a party factually challenges subject matter jurisdiction, a court may rely upon evidence such as that which is contained in the disputed exhibits. (Docket No. 57). However, on September 18, 2008, Plaintiff filed a Motion to Vacate (Docket No. 58) the Court's September 4, 2008 Order, arguing that the Court "sua sponte overruled the previous orders" regarding the same exhibits. Plaintiff then filed his Response to the Government's Motion to Dismiss, titled "Statement of Questions and of Law," on September 23, 2008.*fn3 (Docket No. 59). The Government then filed its Response to Plaintiff's Motion to Vacate on October 2, 2008. (Docket No. 63). On October 14, 2008, the Court denied Plaintiff's Motion to Vacate, ruling that Plaintiff's motion, which sought reconsideration of its September 4, 2008 Order, failed to raise new evidence or manifest injustice. (Docket No. 65).

Currently pending before the Court is the Government's Motion to Dismiss Plaintiff's Amended Complaint (Docket No. 47), and Plaintiff's response thereto (Docket No. 59). As the motion has been fully briefed, it is now ripe for disposition.

III. Review of Plaintiff's Allegations in his Amended Complaint

In short, Plaintiff claims that the Government breached a contract with him for a particular Treasury bill issued by the Bureau of Public Debt. (Docket No. 44 at 1). A review of the individual paragraphs contained in the Amended Complaint reveals that many of Plaintiff's averments are no more than conclusions of law or to the extent they plead facts, they are conclusory in nature.*fn4 After consideration of the Amended Complaint, the Court gleans the following factual background.

Plaintiff claims that the Government published the treasury direct investor kit (the "kit"), in effect at the time when the circumstances presented by Plaintiff occurred, in order to "clearly and specifically advise all treasury bill investors.of its contract obligations."*fn5 (Id. at 3). He consistently refers to the kit as a "circular,"*fn6 identified as P.D.F. 009. (Id.). The kit provides that about 45 days before a security is to mature, a reinvestment notice will be sent to investors with instructions for reinvestment and a validation number needed to reinvest. (Id. at 3; Docket No. 48-2 at 17). It further states that to schedule a reinvestment, upon receipt of the mailed reinvestment notice, an investor may use a variety of options. (Docket No. 44 at 1; Docket No. 48-2 at 17-18). Plaintiff references 31 C.F.R. § 356.11(d)(1),*fn7 which advises security investors that a maturing security may be invested through the same methods by which it was first invested. (Docket No. 44 at 4). The kit and the regulations, Plaintiff contends, were intended by the Government to be part of "its renewal and 'rollover' mandates and options." (Id.). Plaintiff also claims that he relied upon the kit and the regulations governing marketable securities as part of the contract. (Id.). In particular, he relied on the Government's alleged promise, contained in these documents (including the kit), to send him the "required renewal notice" so that he could timely reinvest his Treasury bill by telephone, one of the available methods for reinvestment. (Id.). However, in direct breach of the contract, Plaintiff maintains that the Government did not send the "mandated" reinvestment notice for his Treasury bill. (Id. at 5). If the notice had been sent, Plaintiff would have reinvested his bill for a new term. (Id.). Instead, Plaintiff was unaware his bill was about to mature because, he claims, the notice was not sent. (Id.). As a direct result, in breach of the contract comprised of the kit and the regulations, Plaintiff lost $1,782.00 in interest the bill would have earned it if had been reinvested before maturity. (Id.).

IV. Discussion

As set forth above, the United States has moved to dismiss Plaintiff's claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). When a movant invokes multiples bases in support of a motion to dismiss, the court should consider the Rule 12(b)(1) challenge first because all other defenses will become moot if the court must dismiss the complaint for lack of subject matter jurisdiction. See In re Corestates Trust Fee Litig., 837 F. Supp. 104, 105 (E.D. Pa. 1993). Accordingly, the Court will first consider the Government's challenge to this Court's subject matter jurisdiction pursuant to Rule 12(b)(1).

A. Rule 12(b)(1) Analysis

1. Legal Standard

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges the lack of subject matter jurisdiction over a plaintiff's claims. See FED. R. CIV. P. 12(b)(1). "At issue in a Rule 12(b)(1) motion is the court's 'very power to hear the case.'" Judkins v. HT Window Fashions Corp., 514 F.Supp.2d 753, 759 (W.D. Pa. 2007) (quoting Mortenson v. First Federal Savings and Loan Association, 549 F.2d 884, 891 (3d Cir.1977)). As it is the party asserting jurisdiction, Plaintiff "bears the burden of showing that its claims are properly before the district court." Development Fin. Corp. v. Alpha Housing & Health Care, 54 F.3d 156, 158 (3d Cir. 1995); see also Kehr Packages, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991), cert. denied, 501 U.S. 1222 (1991) ("[w]hen subject matter jurisdiction is challenged under Rule 12(b)(1), the plaintiff must bear the burden of persuasion"). In reviewing a motion to dismiss pursuant to Rule 12(b)(1), the court must distinguish between facial attacks and factual attacks. Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006).

a. Facial Attack

A facial attack challenges the sufficiency of the pleadings, and the court must accept the plaintiff's allegations as true. Id. When a defendant attacks a complaint on its face, he "[asserts] that considering the allegations of the complaint as true, and drawing all reasonable inferences in favor of [plaintiff], the allegations of the complaint are insufficient to establish a federal cause of action." Mullen v. Thompson, 155 F.Supp.2d 448, 451 (W.D. Pa. 2001). Dismissal is proper under Rule 12(b)(1) only when "the claim clearly appears to be immaterial and made solely for the purpose of obtaining ...


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