Preserving Damage Claims Against the United States The Trap of 28 USC Section 1500

Commercial Litigation Advisor & Alert

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PUBLISHED ON: April 27, 2020

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When one has a claim for money damages against the United States, the judicial forum for that claim is generally the United States Court of Federal Claims. However, litigation with the federal government often seeks results other thancompensation for damages already suffered; in that situation, the proper court for the potential plaintiff is a U.S. District Court. But once such a case is pending in a District Court, the claimant runs the substantial risk that a later damage action will be jurisdictionally barred in the Court of Federal Claims.1

That situation is epitomized in the recent case Nycal Offshore Development Corp. v. The United States.2 In a lengthy and scholarly opinion, Judge Ryan Holte examined the jurisdictional implications of such dual litigation.

The Jurisdictional Issue

28 U.S. Code section 1500 provides: The United States Court of Federal Claims shall not have jurisdiction of any claim for or in respect to which the plaintiff or his assignee has pending in any other court any suit or process against the United States or any person who, at the time when the cause of action alleged in such suit or process arose, was, in respect thereto, acting or professing to act, directly or indirectly under the authority of the United States.....