Opinion
P-00-CV-288-DB
March 29, 2001
MEMORANDUM OPINION AND ORDER
On this day, the Court considered a "Motion to Dismiss Plaintiffs First Amended Petition" that Defendant the United States Postal Service filed in the above-captioned cause on January 11, 2001. Plaintiff Sheldon Jewelry Co. filed a Response on January 24, 2001.
After due consideration, the Court is of the opinion that Defendant's motion should be granted in part and denied in part, for the reasons that follow.
BACKGROUND
In November 1998, Plaintiff Sheldon Jewelry Co. ("Sheldon" or "Plaintiff") agreed over the telephone to sell a "Cartier" watch to a woman representing herself to be Irene Moreno ("Moreno"). The watch had a market value of $14, 110.00 and a wholesale value of $9, 790.00. Moreno was a good customer of Sheldon and asked Sheldon to mail the watch to her in Denver Colorado. After Sheldon received a $1, 600.00 deposit, Sheldon mailed the watch, pursuant to Moreno's request, through the United States Postal Service ("USPS" or "Defendant") to the following address:
Irene Moreno c/o Carol Lones General Delivery Denver, CO 80211
Sheldon sent the watch by registered mail and insured it at its wholesale value, $9, 790.00, in accordance with USPS regulations contained in Defendant's Domestic Mail Manual ("DMM").
In Denver, a woman representing herself to be Irene Moreno picked up the watch. That woman was not, in fact, Irene Moreno, but Anna Jaramillo ("Jaramillo"). Jaramillo signed as "Irene Moreno." The USPS employee did not ask Jaramillo for identification. Jaramillo left with the watch.
Plaintiff commenced the instant action by filing an "Original Complaint" on September 20, 2000, alleging breach of contract and negligence. After Defendant moved to dismiss that complaint, Plaintiff amended by leave of Court. Plaintiff's "First Amended Original Petition" (the "Amended Complaint") also alleges breach of contract and negligence. Therein, Plaintiff alleges that Defendant violated DMM § S911 with respect to insuring registered mails and payment of claims upon lost insured items. Plaintiff further alleges that Defendant violated § D042 by not requiring Jaramillo to provide identification before releasing the watch to her.
The instant motion followed.
STANDARD
Federal Rule of Civil Procedure 12(b)(1) allows a party to move to dismiss an action for lack of subject matter jurisdiction. On a motion brought under Rule 12(b)(1), which the Court must consider before any other challenge, see Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994), a court must dismiss a cause for lack of subject matter jurisdiction "when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998) (internal quotation marks removed) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996). Further, the Court applies the same familiar standard used in ruling on a motion under Rule 12(b)(6). In that respect, the Court must limit its inquiry to facts stated in the complaint and the documents either attached to or incorporated in the complaint. See Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir. 1996). Further, the Court must accept as time all material allegations in the complaint, as well as any reasonable inferences to be drawn from them, see Kaiser Aluminum Chem. Sales, Inc., v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982), and must review those allegations in a light most favorable to the plaintiff. See Piotrowski v. City of Houston, 51 F.3d 512, 514 (5th Cir. 1995); Garrett v. Commonwealth Mortgage Corp. of Am., 938 F.2d 591, 593 (5th Cir. 1991). The Court also may "consider matters of which [it] may take judicial notice," Lovelace, 78 F.3d at 1017-18, and matters of public record. See 5A CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (2d ed. 1990).
DISCUSSION
Defendant contends that the Court lacks jurisdiction over Plaintiff's claims because the USPS is entitled to sovereign immunity as an entity of the United States. As sovereign, the United States is presumptively immune from suit unless it consents to be sued. See Truman v. United States, 26 F.3d 592, 594 (5th Cir. 1994) ("As the sovereign, the United States is immune from suit unless, and only to the extent that, it has consented to be sued."); Williamson v. United States Dep't of Agric., 815 F.2d 368, 373-74 (5th Cir. 1987). Sovereign immunity is jurisdictional. See United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980). Hence, Plaintiff bears the burden of showing that the United States has waived its immunity in this case. Here, Plaintiff contends thee is jurisdiction in this case under 39 U.S.C. § 409 and 28 U.S.C. § 1346(a)(2), 1339.
First, 28 U.S.C. § 1339, standing alone, cannot be read to provide jurisdiction in this case. Although that section provides that "[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to the postal service," 28 U.S.C.A. § 1339 (West 1993), it cannot provide jurisdiction unless "a separate statute relating to the postal service affords a cause of action." Snapp v. United States Postal Svc. — Texarkana Mgmt. Sectional Ctr., 664 F.2d 1329, 1332 (5th Cir. 1982). Plaintiff does not state any claim that "aris[es] under" any Act of Congress because no "Act of Congress" is an essential element of its claims. Cf Jobs, Training Servs., Inc. v. East Tex. Council of Gov'ts, 50 F.3d 1318, 1326 (5th Cir. 1995) (noting that "arising under" for federal question jurisdiction "does not exist unless a right or immunity created by federal law is an essential element of the plaintiffs cause of action"). Plaintiff states only common law claims for negligence and breach of contract. Hence, section 1339 cannot provide jurisdiction in this case.
With respect to 39 U.S.C. § 409, that section provides, in relevant part, that "the United States district courts shall have original but not exclusive jurisdiction over all actions brought by or against the Postal Service." 39 U.S.C.A. § 409(a) (West 1980). Section 409 is part of the Postal Reorganization Act of 1970 ("PRA"), 84 Stat. 719, codified in Title 39. Through the PRA, the United States has waived sovereign immunity in the broadest fashion by providing that the USPS can "sue and be sued" in its official name. See Franchise Tax Bd. of Cal. v. United States Postal Svc., 467 U.S. 512, 519-20, 104 S.Ct. 2549, 2553-54, 81 L.Ed.2d 446 (1984) (construing effect of PRA and 39 U.S.C. § 401(1) provision that "the Postal Service shall have the general power: (1) to sue and be sued in its official name"). The Supreme Court has interpreted that phrase very broadly:
By launching "the Postal Service into the commercial world," and including a sue-and-be-sued clause in its charter, Congress has cast off the Service's "cloak of sovereignty" and given it the "status of a private commercial enterprise." It follows that Congress is presumed to have waived any otherwise existing immunity of the Postal Service. . . .Loeffler v. Frank, 486 U.S. 549, 556, 108 S.Ct. 1965, 1970, 100 L.Ed.2d 549 (1988) (quoting Library of Cong. v. Shaw, 478 U.S. 310, 317 n. 5, 106 S.Ct. 2957, 2963 n. 5, 92 L.Ed.2d 250 (1986)) (internal citation omitted). However, even a broad waiver of immunity can be limited by demonstrating certain exceptions:
[1] that certain types of suits are not consistent with the statutory or constitutional scheme, [2] that an implied restriction of the general authority is necessary to avoid a grave interference with the performance of a governmental function, or [3] that for other reasons it was plainly the purpose of Congress to use the "sue and be sued" clause in a narrow sense.Franchise Tax Bd., 467 U.S. at 517-18, 104 S.Ct. at 2553 (quoting Federal Hous. Auth v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940)).
With respect to Plaintiff's negligence claim, Congress limited its waiver of immunity as to the USPS by requiring that claims based on tort be subject to the same limitations set forth in the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 1346(b)(2), 267 1-2680. See 39 U.S.C.A. § 409(c) (West 1980) ("The provisions of chapter 171 and all other provisions of title 28 relating to tort claims shall apply to tort claims arising out of activities of the Postal Service."). The FTCA, in turn, specifically excludes "[a]ny claim arising out of the loss, miscarriage, or negligent transmission of letters or postal matter." 28 U.S.C.A. § 2680(b) (West 1994). Hence, the USPS "retains sovereign immunity with respect to claims of negligent handling of the mails." Insurance Co. of N. Am. v. United States Postal Svc., 675 F.2d 756, 759 (5th Cir. 1982).
Here, Plaintiff claims that "Defendant had a duty to deliver the watch to Irene Moreno and breached that duty by negligently delivering the watch into the hands of Anna Jaramillo." (Emphasis added). In other words, Plaintiff alleges that the USPS was negligent in transmitting the package to Jaramillo instead of Moreno. Consequently, that claim is precluded under § 409, the FTCA and Insurance Co. of N Am.
Similarly, with respect to Plaintiff's contract claim, Defendant contends that claim must fail because the USPS is only liable to the extent that it agrees to be liable under USPS laws and regulations. In other words, Defendant contends that Plaintiff has not demonstrated that the USPS has agreed to be liable for the losses alleged herein and, in that sense, that the USPS has not waived its sovereign immunity as to that liability.
First, the Court notes that Defendant challenges the merits of Plaintiff's contract claim to the extent that Defendant attempts to negate any violation of the two regulations Plaintiffs allege were violated — DMM § S911 and DMM § D042. For example, Defendant concludes that "[t]here has been no violation of section D042." To the extent that Defendant argues Plaintiff has failed to state a claim upon which relief can be granted (a Rule 12(b)(6) motion), the Court disagrees.
Moreover, Plaintiff alleges sufficient facts to avoid a Rule 12(b)(6) dismissal: DMM § D045 requires the USPS employee to require identification from any person not known to the employee. The woman representing herself as Irene Moreno to the USPS employee was not "known to the employee" to be Irene Moreno because, obviously, if the woman was not truly Moreno, then she could not be "known" to the employee to be Moreno. Yes, Jaramillo may have fooled that employee in the past into believing her to be Moreno. However, had the employee followed the regulation requiring identification at some point, that employee would have known Jaramillo not to be Moreno and would not have released the package to her. All those facts put together, the Court finds, sufficiently allege a violation of USPS regulations and, consequently, a breach of contract.
In any event, 39 U.S.C. § 409 (set forth above) provides jurisdiction as to Plaintiff's contract claim because the alleged breach of contract is a claim brought against the Postal Service and does not fall into one of the exceptions that Franchise Tax Bd. set out. In particular, it is not inconsistent with the statutory scheme to hold the USPS to its contracts and to do so would not constitute a grave interference with the USPS's performance of a government function.
Finding jurisdiction under § 409, the Court need not determine whether 28 U.S.C. § 1346(a)(2) provides jurisdiction as well. Notwithstanding, the Court notes that it probably does not. That section states as follows:
The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of:
(2) Any other civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon 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. . . .28 U.S.C.A. § 1346(a)(2) (West 1993) (emphasis added). Defendant argues that § 1346(a)(2) does not apply to the USPS because it only applies to suits against the United States and the USPS is not "the United States" for § 1346(a)(2) purposes.
The Court finds that there is jurisdiction for Plaintiff's claim against the USPS based on contract, but not negligence. Thus, after due consideration, the Court is of the opinion that Defendant's motion should be granted in part as to Plaintiff's negligence claim and denied in part as to its breach of contract claim.
Accordingly, IT IS HEREBY ORDERED that Defendant the United States Postal Service's "Motion to Dismiss Plaintiffs First Amended Petition" is GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiff Sheldon Jewelry Co.'s negligence claim is DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION.