United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 8, 1997 Decided November 7, 1997
No. 96-5340
J.B. Floyd, et al.,
Plaintiffs/Appellees
v.
District of Columbia,
Defendant
United States of America,
Defendant/Appellant
Appeal from the United States District Court
for the District of Columbia
(No. 95cv02345)
William Kanter, Deputy Director, U.S. Department of
Justice, argued the cause for appellant. With him on the
briefs were Frank W. Hunger, Assistant Attorney General,
Eric H. Holder, Jr., U.S. Attorney at the time the briefs were
filed, and Robert D. Kamenshine, Attorney, U.S. Department
of Justice. R. Craig Lawrence, Assistant U.S. Attorney, and
Charles L. Reischel, Deputy Corporation Counsel, entered
appearances.
Robert E. Deso, Jr. argued the cause and filed the brief for
appellees.
Donald B. Ayer and James E. Gauch were on a brief for
amici curiae D. Paul Sweeney and Douglas Buchholz.
Before: Silberman, Rogers and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge: Retired U.S. Secret Service agents
sued the District of Columbia and the United States, claiming
entitlement to increased retirement benefits administered by
the District of Columbia but funded by the federal govern-
ment. The district court entered summary judgment for the
retirees. Finding that the district court lacked jurisdiction
over the United States, we vacate the entire judgment.
I
To combat rampant counterfeiting during the Civil War,
the Department of the Treasury created the U.S. Secret
Service in 1865. Not until after the assassination of Presi-
dent William McKinley in 1901 was the Secret Service offi-
cially assigned the task of protecting the President. Over the
next seventy years, the Service's protective authority expand-
ed as it took over various tasks from the local police. In
1930, for example, the Secret Service began protecting the
White House and its grounds, a function once performed by a
small force of military and District of Columbia Metropolitan
Police Department officers. Congress later transferred re-
sponsibility for protecting foreign diplomatic missions from
the District police to the Secret Service. See United States
Secret Service, Department of the Treasury, Moments in
History: 1865-1990, 4-15 (1990).
As its history suggests, the Secret Service has close ties to
the D.C. police, with overlapping powers, duties, member-
ships, and employment benefits. See 3 U.S.C. s 202 (1994)
("[Secret Service] members [ ] shall possess privileges and
powers similar to those of the members of the Metropolitan
Police of the District of Columbia."); 3 U.S.C. s 203(b) (1994)
(Secret Service Uniformed Division members may be appoint-
ed from District police ranks); 3 U.S.C. ss 204, 206 (1994)
(Secret Service members to receive the same salary, benefits,
and privileges as District police officers at the same grade).
Because of these historical ties, two very different pension
plans cover Secret Service employees. Some agents partici-
pate in the Federal Employee Retirement System. 5 U.S.C.
s 8401 et seq. (1994). Agents who actively perform noncleri-
cal duties directly related to the protection of the President
for more than ten years may opt into the plan governed by
the District of Columbia Police and Firefighters Retirement
and Disability Act ("DCRA"), 49 Stat. 358 (1935) (codified as
amended at D.C. Code Ann. s 4-601 et seq. (1994)). See D.C.
Code Ann. s 4-609. Under the DCRA, agents pay pension
contributions directly into the D.C. treasury, and every month
the United States reimburses the District for any shortfall
between total agent contributions and total pension costs.
D.C. Code Ann. s 4-632.
The DCRA offers higher benefits than the federal system.
For example, the DCRA pays benefits based on retirees'
highest annual salary for any single year, while the federal
program pays based on retirees' highest average salary over
three consecutive years. Compare Letter from United States
Secret Service to Thomas Farrell (Apr. 26, 1996), with 5
U.S.C. ss 8401(3), 8415(a). The DCRA also contains an
"equalization clause"--the subject of this litigation--that au-
tomatically increases retired agents' pensions each time active
agents receive salary increases. D.C. Code Ann.
s 4-605(a). Not only does the equalization clause assure
DCRA participants the equivalent of a cost of living adjust-
ment, but courts have interpreted the clause to trigger pen-
sion increases based on locality pay increases and collectively
bargained bonuses. See Lanier v. District of Columbia, 871
F. Supp. 20, 22 (D.D.C. 1994); District of Columbia v.
Tarlosky, 675 A.2d 77, 80-81 (D.C. 1996). The federal retire-
ment program contains a specific COLA provision, see 5
U.S.C. s 8462, but no equalization clause.
Responding to the fact that criminal investigators through-
out the federal government were routinely receiving overtime
pay because they routinely worked more than eight hours
each day, Congress passed the Law Enforcement Availability
Pay Act of 1994 ("LEAP"), Pub. L. No. 103-329, 108 Stat.
2425 (1994) (codified at 5 U.S.C. s 5545a (1994 & Supp.
1996)). LEAP increased the work day of federal criminal
investigators by two hours and awarded all investigators
"availability pay" at the rate of 25 percent of their basic pay,
thereby eliminating so-called "administratively uncontrollable
overtime." See 5 U.S.C. ss 5545a(c), (d). In effect, LEAP
requires criminal investigators to be available for two more
hours each day, in return for which they automatically receive
an additional 25 percent of basic pay instead of the overtime
pay they used to get.
Appellees are Secret Service criminal investigators who
retired before the passage of LEAP. They contend that
LEAP amounts to a 25 percent salary increase which triggers
the DCRA equalization clause, entitling them to a 25 percent
increase in pension benefits. When the D.C. Office of Per-
sonnel did not increase their pension benefits, the retirees
sued both the District and the United States in the U.S.
District Court for the District of Columbia.
Agreeing that LEAP constitutes a salary increase under
the DCRA equalization clause, the district court entered
summary judgment for the retirees and ordered the District
and the United States to increase pension benefits by 25
percent. The United States appealed; the District of Colum-
bia did not.
II
The United States argued before the district court--al-
though inexplicably, not before us--that the retired agents
failed to identify a cause of action or waiver of sovereign
immunity permitting the district court to exercise its jurisdic-
tion over the United States. Disagreeing, the district court
held that the Administrative Procedure Act, 5 U.S.C. s 702
(1994), waived sovereign immunity, treating as "final agency
action" the United States' failure to grant the requested
pension increase. Under the DCRA, however, it was the
District of Columbia, not the United States, that did not
increase appellees' pensions. See D.C. Code Ann. s 4-603
(authorizing Mayor to determine pension benefits); D.C.
Code Ann. s 4-605(a) (notwithstanding s 4-603, when active
members receive a salary increase, retirees are entitled to a
commensurate pension increase "without making application
therefor"). Because nothing in the record indicates that the
Treasury Department, the Office of Personnel Management,
or any other federal agency did or decided anything pertain-
ing to the impact of LEAP on appellees' pensions, we asked
counsel for the United States to furnish information about
any and all agency actions taken in this matter. Unable to
point to any such action, the United States nevertheless
maintains that the district court had jurisdiction. But juris-
diction cannot be waived and we have an independent obli-
gation to assure ourselves of jurisdiction, even where the
parties fail to challenge it. See Insurance Corp. of Ireland,
Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702
(1982) (basis for jurisdiction must "affirmatively appear in the
record").
Our jurisdictional inquiry requires that we answer two
questions: Did the district court have subject matter jurisdic-
tion over the case; and does federal law authorize a cause of
action against the United States, the only appellant in this
appeal? Because federal removal jurisdiction would have
been available under 28 U.S.C. s 1442(a)(1) had this case
been filed in the Superior Court of the District of Columbia,
we have no doubt that the district court had subject matter
jurisdiction. See District of Columbia v. Merit Systems
Protection Board, 762 F.2d 129, 132 (D.C. Cir. 1985) ("When
federal parties remove an action under section 1442(a)(1), the
federal court assumes jurisdiction over all the claims and
parties in the case regardless of whether the federal court
could have assumed original jurisdiction over the suit."). The
district court also had federal question jurisdiction under 28
U.S.C. s 1331 because the case " 'necessarily turn[s] on some
construction of federal law.' " Merrell Dow Pharmaceuticals
Inc. v. Thompson, 478 U.S. 804, 808 (1986) (quoting Fran-
chise Tax Bd. v. Construction Laborers Vacation Trust, 463
U.S. 1, 9 (1983)); see Diven v. Amalgamated Transit Union
Int'l and Local 689, 38 F.3d 598, 600 (D.C. Cir. 1994) (unlike
the statute in Merrell Dow, where Congress simply fails to
include a certain group under a statute it does not constitute
an affirmative congressional decision to deny federal jurisdic-
tion) (citing Rogers v. Platt, 814 F.2d 683, 688 (D.C. Cir.
1987)).
Where the United States is the defendant, however, federal
subject matter jurisdiction is not enough; there must also be
a statutory cause of action through which Congress has
waived sovereign immunity. See United States v. Nordic
Village, Inc., 503 U.S. 30, 34 (1992). Under normal circum-
stances, the APA, on which the district court relied, would
indeed waive sovereign immunity for a challenge to a federal
agency's interpretation of a federal pay statute. See 5 U.S.C.
s 702. But as the federal government concedes in its post-
argument submission, no federal agency offered any interpre-
tation or took any reviewable action here, nor does the DCRA
expressly require the United States to take any action prior
to reimbursing the District. Indeed, according to the record,
the District of Columbia has not requested reimbursement
from the United States, nor have the retirees ever asked the
United States whether it would reimburse the District.
Although the United States claims that final agency action
occurred when OPM promulgated LEAP regulations that
made no reference to the DCRA, nothing in LEAP expressly
requires OPM to address the DCRA. See 5 U.S.C.
s 5545a(h)(2)(B) (LEAP to be treated as basic pay for "such
other purposes as may be expressly provided for by law or as
[OPM] may by regulation prescribe") (emphasis added).
Moreover, not only have the retirees never challenged OPM's
actions, but they take the position that the OPM regulation is
irrelevant to the administration of the DCRA. Since the
OPM regulation is not the object of this litigation, the fact
that it fails to mention the DCRA--a statute OPM is not
charged with administering--cannot be invoked at this late
date to trigger APA review. Cf. Hazardous Waste Treat-
ment Council v. U.S. Envtl. Protection Agency, 861 F.2d 277,
287 (D.C. Cir. 1988) (where petitioners failed to file petition
seeking promulgation of regulation, court lacked jurisdiction
over petitioners' claim that existing regulation was not suffi-
ciently comprehensive).
In a post-argument filing, the District of Columbia claims
that the United States makes all substantive decisions about
Secret Service pensions under the DCRA and that the Dis-
trict serves as a mere passive conduit for federal pension
monies. Although we can find nothing in the DCRA or the
record explicitly limiting the District to such a passive role,
we need not determine which government ultimately decides;
the United States has told us that no federal official made any
express decision here.
Without a record of federal agency action, the retirees have
no APA cause of action and therefore no waiver of sovereign
immunity. Nor can we find a cause of action against the
United States or a waiver of its sovereign immunity in either
the DCRA or LEAP. Although courts may sometimes infer
a cause of action, see California v. Sierra Club, 451 U.S. 287,
292-93 (1981), waivers of sovereign immunity must be un-
equivocally expressed in statutory text; we cannot imply a
waiver of sovereign immunity, see Lane v. Pena, 116 S. Ct.
2092, 2098-99 (1996). We have found nothing in the lan-
guage, structure, or legislative history of either Act indicating
that Congress intended the DCRA or LEAP to be privately
enforced against the federal government or that Congress
waived its sovereign immunity under either statute.
Finally, neither the District's actions nor its special consti-
tutional status provides a basis for piercing the veil of federal
sovereign immunity. The District of Columbia is still not a
federal agency. See 5 U.S.C. s 551(1)(D) (excluding the
District of Columbia from APA definition of agency); cf.
D.C. Code Ann. s 47-391.1 (1997) (establishing District of
Columbia Financial Responsibility and Management Assis-
tance Authority). The United States does not exert sufficient
control over the decisions and operations of the D.C. Office of
Personnel to convert that office into a federal agency or
instrumentality. See Cannon v. United States, 645 F.2d 1128,
1136-37 & n.35 (D.C. Cir. 1981) (Lorton Reformatory, created
by federal statute and used to house federal as well as other
prisoners, nevertheless is not a federal agency under Federal
Tort Claims Act because Congress intended District of Co-
lumbia to control its day-to-day operations). Even where, as
here, the federal government promises to pay for state-
administered programs, such promises do not by themselves
constitute waivers of sovereign immunity permitting partici-
pants in those programs to sue the United States. See
United States v. Orleans, 425 U.S. 807, 813-14 (1976) (com-
munity organization that received all its funding from the
federal government not a federal agency for purposes of
FTCA because federal government did not supervise its day-
to-day operations).
In sum, although in this case federal retirees seek federal
money pursuant to a federal statute, the United States has
not yet taken any action that exposes it to suit. To permit a
decision on the merits, the District has asked to be substitut-
ed for the United States, but such a substitution is neither
"necessary" nor appropriate since the United States has not
lost its interest in the underlying matter, transferred its
interest to the District, or otherwise been rendered incapable
of appealing at some later date. See Fed. R. App. P. 43(b);
Jones v. Board of Governors of the Fed. Reserve Sys., 79 F.3d
1168, 1170 (D.C. Cir. 1996) (organization could not be substi-
tuted for its director in order to cure standing defect);
Alabama Power Co. v. ICC, 852 F.2d 1361, 1366-68 (D.C. Cir.
1988) (non-appealing party could not be substituted for appel-
lant where appellant was capable of proceeding with appeal).
Because parties failing to appeal are not usually entitled to
the benefits of a reversal obtained by appealing co-parties,
National Ass'n of Broadcasters v. FCC, 554 F.2d 1118, 1124
(D.C. Cir. 1976), dismissing the United States would normally
leave intact the district court's judgment against the District
of Columbia. Under the unusual circumstances of this case,
however, we think it best to vacate the district court's judg-
ment in its entirety, as the United States has requested. The
District's interests under the DCRA inextricably intertwine
with those of the United States. The agents probably could
not have sued the District without naming the United States
as a necessary party. See Fed. R. Civ. P. 19. Moreover,
removing the United States and its purse from the case
without vacating the district court's decision, thus forcing the
District to make pension payments for which it is not ulti-
mately responsible, is not only illogical and contrary to the
DCRA, but would impose a heavy financial liability on the
already beleaguered city. Vacating the district court's deci-
sion in full will also give Congress, which apparently gave no
consideration whatsoever to the implications of LEAP for
pre-LEAP retirees covered by the DCRA, an opportunity to
resolve this issue. Should Congress fail to act, the parties
can return to court with a properly drawn cause of action
under which a court with jurisdiction may resolve the merits
of this dispute.
The judgment of the district court is vacated and the case
remanded to the district court with instructions to dismiss the
complaint.
So ordered.