author: Justice White Justice Powell,

text:
    INSURANCE CORPORATION OF IRELAND, LTD., et al. v. COMPAGNIE DES BAUXITES DE GUINEE
    No. 81-440.
    Argued March 23, 1982
    Decided June 1, 1982

      White, J., delivered the opinion of the Court, in which BURGER, C. J., and Brennan, Marshall, Blackmun, Rehnquist, Stevens, and O’Connor, JJ., joined. Powell, J., filed an opinion concurring in the judgment, post, p. 709.

      Edmund K. Trent argued the cause for petitioners. With him on the briefs was Thomas P. Lawton III.

      Cloyd R. Mellott argued the cause for respondent. With him on the brief were Dale Hershey, Robert W. Doty, Robert L. Byer, and Jordan S. Weltman.

   Justice White

delivered the opinion of the Court.

Rule 37(b), Federal Rules of Civil Procedure, provides that a district court may impose sanctions for failure to comply with discovery orders. Included among the available sanctions is:

“An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order.” Rule 37(b)(2)(A).

The question presented by this case is whether this Rule is applicable to facts that form the basis for personal jurisdiction over a defendant. May a district court, as a sanction for failure to comply with a discovery order directed at establishing jurisdictional facts, proceed on the basis that personal jurisdiction over the recalcitrant party has been established? Petitioners urge that such an application of the Rule would violate due process: If a court does not have jurisdiction over a party, then it may not create that jurisdiction by judicial fiat. They contend also that until a court has jurisdiction over a party, that party need not comply with orders of the court; failure to comply, therefore, cannot provide the ground for a sanction. In our view, petitioners are attempting to create a logical conundrum out of a fairly straightforward matter.

I

Respondent Compagnie des Bauxites de Guiñee (CBG) is a Delaware corporation, 49% of which is owned by the Republic of Guinea and 51% is owned by Halco (Mining) Inc. CBG’s principal place of business is in the Republic of Guinea, where it operates bauxite mines and processing facilities. Halco, which operates in Pennsylvania, has contracted to perform certain administrative services for CBG. These include the procurement of insurance.

In 1973, Halco instructed an insurance broker, Marsh & McLennan, to obtain $20 million worth of business interruption insurance to cover CBG’s operations in Guinea. The first half of this coverage was provided by the Insurance Company of North America (IÑA). The second half, or what is referred to as the “excess” insurance, was provided by a group of 21 foreign insurance companies,14 of which are petitioners in this action (the excess insurers).

Marsh & McLennan requested Bland Payne to obtain the excess insurance in the London insurance market. Pursuant to normal business practice

“[i]n late January and in February, 1974, Bland Payne presented to the excess insurer [petitioners] a placing slip in the amount of $10,000,000, in excess of the first $10,000,000. [Petitioners] initialed said placing slip, effective February 12, 1974, indicating the part of said $10,000,000 each was willing to insure.” Finding 27 of the District Court, 2 App. 347a.

Once the offering was fully subscribed, Bland Payne issued a cover note indicating the amount of the coverage and specifying the percentage of the coverage that each excess insurer had agreed to insure. No separate policy was issued; the excess insurers adopted the INA policy “as far as applicable.”

Sometime after February 12, CBG allegedly experienced mechanical problems in its Guinea operation, resulting in a business interruption loss in excess of $10 million. Contending that the loss was covered under its policies, CBG brought suit when the insurers refused to indemnify CBG for the loss. Whatever the mechanical problems experienced by CBG, they were perhaps minor compared to the legal difficulties encountered in the courts.

In December 1975, CBG filed a two-count suit in the Western District of Pennsylvania, asserting jurisdiction based on diversity of citizenship. The first count was against INA; the second against the excess insurers. INA did not challenge personal or subject-matter jurisdiction of the District Court. The answer of the excess insurers, however, raised a number of defenses, including lack of in personam jurisdiction. Subsequently, this alleged lack of personal jurisdiction became the basis of a motion for summary judgment filed by the excess insurers. The issue in this case requires an account of respondent’s attempt to use discovery in order to demonstrate the court’s personal jurisdiction over the excess insurers.

Respondent’s first discovery request — asking for “[cjopies of all business interruption insurance policies issued by Defendant during the period from January 1, 1972 to December 31, 1975” — was served on each defendant in August 1976. In January 1977, the excess insurers objected, on grounds of burdensomeness, to producing such policies. Several months later, respondent filed a motion to compel petitioners to produce the requested documents. In June 1978, the court orally overruled petitioners’ objections. This was followed by a second discovery request in which respondent narrowed the files it was seeking to policies which “were delivered in . . . Pennsylvania ... or covered a risk located in . . . Pennsylvania.” Petitioners now objected that these documents were not in their custody or control; rather, they were kept by the brokers in London. The court ordered petitioners to request the information from the brokers, limiting the request to policies covering the period from 1971 to date. That was in July 1978; petitioners were given 90 days to produce the information. On November 8, petitioners were given an additional 30 days to complete discovery. On November 24, petitioners filed an affidavit offering to make their records, allegedly some 4 million files, available at their offices in London for inspection by respondent. Respondent countered with a motion to compel production of the previously requested documents. On December 21, 1978, the court, noting that no conscientious effort had yet been made to produce the requested information and that no objection had been entered to the discovery order in July, gave petitioners 60 more days to produce the requested information. The District Judge also issued the following warning:

“[I]f you don’t get it to him in 60 days, I am going to enter an order saying that because you failed to give the information as requested, that I am going to assume, under Rule of Civil Procedure 37(b), subsection 2(A), that there is jurisdiction.” 1 App. 115a.

A few moments later he restated the warning as follows: “I will assume that jurisdiction is here with this court unless you produce statistics and other information in that regard that would indicate otherwise.” Id., at 116a.

On April 19, 1979, the court, after concluding that the requested material had not been produced, imposed the threatened sanction, finding that “for the purpose of this litigation the Excess Insurers are subject to the in personam jurisdiction of this Court due to their business contacts with Pennsylvania.” Id., at 201a. Independently of the sanction, the District Court found two other grounds for holding that it had personal jurisdiction over petitioners. First, on the record established, it found that petitioners had sufficient business contacts with Pennsylvania to fall within the Pennsylvania long-arm statute. Second, in adopting the terms of the INA contract with CBG — a Pennsylvania insurance contract — the excess insurers implicitly agreed to submit to the jurisdiction of the court.

Except with respect to three excess insurers, the Court of Appeals for the Third Circuit affirmed the jurisdictional holding, relying entirely upon the validity of the sanction. Compagnie des Bauxites de Guinea v. Insurance Co. of North America, 651 F. 2d 877 (1981). That court specifically found that the discovery orders of the District Court did not constitute an abuse of discretion and that imposition of the sanction fell within the limits of trial court discretion under Rule 37(b):

“The purpose and scope of the ordered discovery were directly related to the issue of jurisdiction and the rule 37 sanction was tailored to establish as admitted those jurisdictional facts that, because of the insurers’ failure to comply with discovery orders, CBG was unable to adduce through discovery.” 651 F. 2d, at 885.

Furthermore, it held that the sanction did not violate petitioners’ due process rights, because it was no broader than “reasonably necessary” under the circumstances.

Because the decision below directly conflicts with the decision of the Court of Appeals for the Fifth Circuit in Familia de Boom v. Arosa Mercantil, S.A., 629 F. 2d 1134 (1980), we granted certiorari. 454 U. S. 963 (1981).

H-< ■ 4

In McDonald, v. Mabee, 243 U. S. 90 (1917), another case involving an alleged lack of personal jurisdiction, Justice Holmes wrote for the Court, “great caution should be used not to let fiction deny the fair play that can be secured only by a pretty close adhesion to fact.” Id., at 91. Petitioners’ basic submission is that to apply Rule 37(b)(2) to jurisdictional facts is to allow fiction to get the better of fact and that it is impermissible to use a fiction to establish judicial power, where, as a matter of fact, it does not exist. In our view, this represents a fundamental misunderstanding of the nature of personal jurisdiction.

The validity of an order of a federal court depends upon that court’s having jurisdiction over both the subject matter and the parties. Stoll v. Gottlieb, 305 U. S. 165, 171-172 (1938); Thompson v. Whitman, 18 Wall. 457, 465 (1874). The concepts of subject-matter and personal jurisdiction, however, serve different purposes, and these different purposes affect the legal character of the two requirements. Petitioners fail to recognize the distinction between the two concepts — speaking instead in general terms of “jurisdiction” — although their argument’s strength comes from conceiving of jurisdiction only as subject-matter jurisdiction.

Federal courts are courts of limited jurisdiction. The character of the controversies over which federal judicial authority may extend are delineated in Art. III, § 2, cl. 1. Jurisdiction of the lower federal courts is further limited to those subjects encompassed within a statutory grant of jurisdiction. Again, this reflects the constitutional source of federal judicial power: Apart from this Court, that power only exists “in such inferior Courts as the Congress may from time to time ordain and establish.” Art. III, § 1.

Subject-matter jurisdiction, then, is an Art. Ill as well as a statutory requirement; it functions as a restriction on federal power, and contributes to the characterization of the federal sovereign. Certain legal consequences directly follow from this. For example, no action of the parties can confer subject-matter jurisdiction upon a federal court. Thus, the consent of the parties is irrelevant, California v. LaRue, 409 U. S. 109 (1972), principles of estoppel do not apply, American Fire & Casualty Co. v. Finn, 341 U. S. 6, 17-18 (1951), and a party does not waive the requirement by failing to challenge jurisdiction early in the proceedings. Similarly, a court, including an appellate court, will raise lack of subject-matter jurisdiction on its own motion. “[T]he rule, springing from the nature and limits of the judicial power of the United States is inflexible and without exception, which requires this court, of its own motion, to deny its jurisdiction, and, in the exercise of its appellate power, that of all other courts of the United States, in all cases where such jurisdiction does not affirmatively appear in the record.” Mansfield, C. & L. M. R. Co. v. Swan, 111 U. S. 379, 382 (1884).

None of this is true with respect to personal jurisdiction. The requirement that a court have personal jurisdiction flows not from Art. Ill, but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty. Thus, the test for personal jurisdiction requires that “the maintenance of the suit. . . not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U. S. 310, 316 (1945), quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940).

Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived. In McDonald v. Mabee, supra, the Court indicated that regardless of the power of the State to serve process, an individual may submit to the jurisdiction of the court by appearance. A variety of legal arrangements have been taken to represent express or implied consent to the personal jurisdiction of the court. In National Equipment Rental, Ltd. v. Szukhent, 375 U. S. 311, 316 (1964), we stated that “parties to a contract may agree in advance to submit to the jurisdiction of a given court,” and in Petrowski v. Hawkeye-Security Co., 350 U. S. 495 (1956), the Court upheld the personal jurisdiction of a District Court on the basis of a stipulation entered into by the defendant. In addition, lower federal courts have found such consent implicit in agreements to arbitrate. See Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F. 2d 354 (CA2 1964); 2 J. Moore & J. Lucas, Moore’s Federal Practice ¶ 4.02[3], n. 22 (1982) and cases listed there. Furthermore, the Court has upheld state procedures which find constructive consent to the personal jurisdiction of the state court in the voluntary use of certain state procedures. See Adam v. Saenger, 303 U. S. 59, 67-68 (1938) (“There is nothing in the Fourteenth Amendment to prevent a state from adopting a procedure by which a judgment in personam may be rendered in a cross-action against a plaintiff in its courts .... It is the price which the state may exact as the condition of opening its courts to the plaintiff”); Chicago Life Ins. Co. v. Cherry, 244 U. S. 25, 29-30 (1917) (“[W]hat acts of the defendant shall be deemed a submission to [a court’s] power is a matter upon which States may differ”). Finally, unlike subject-matter jurisdiction, which even an appellate court may review sua sponte, under Rule 12(h), Federal Rules of Civil Procedure, “[a] defense of lack of jurisdiction over the person ... is waived” if not timely raised in the answer or a responsive pleading.

In sum, the requirement of personal jurisdiction may be intentionally waived, or for various reasons a defendant may be estopped from raising the issue. These characteristics portray it for what it is — a legal right protecting the individual. The plaintiff’s demonstration of certain historical facts may make clear to the court that it has personal jurisdiction over the defendant as a matter of law — i. e., certain factual showings will have legal consequences — but this is not the only way in which the personal jurisdiction of the court may arise. The actions of the defendant may amount to a legal submission to the jurisdiction of the court, whether voluntary or not.

The expression of legal rights is often subject to certain procedural rules: The failure to follow those rules may well result in a curtailment of the rights. Thus, the failure to enter a timely objection to personal jurisdiction constitutes, under Rule 12(h)(1), a waiver of the objection. A sanction under Rule 37(b)(2)(A) consisting of a finding of personal jurisdiction has precisely the same effect. As a general proposition, the Rule 37 sanction applied to a finding of personal jurisdiction creates no more of a due process problem than the Rule 12 waiver. Although “a court cannot conclude all persons interested by its mere assertion of its own power,” Chicago Life Ins. Co. v. Cherry, supra, at 29, not all rules that establish legal consequences to a party’s own behavior are “mere assertions” of power.

Rule 37(b)(2)(A) itself embodies the standard established in Hammond Packing Co. v. Arkansas, 212 U. S. 322 (1909), for the due process limits on such rules. There the Court held that it did not violate due process for a state court to strike the answer and render a default judgment against a defendant who failed to comply with a pretrial discovery order. Such a rule was permissible as an expression of “the undoubted right of the lawmaking power to create a presumption of fact as to the bad faith and untruth of an answer begotten from the suppression or failure to produce the proof ordered .... [T]he preservation of due process was secured by the presumption that the refusal to produce evidence material to the administration of due process was but an admission of the want of merit in the asserted defense.” Id., at 350-351.

The situation in Hammond was specifically distinguished from that in Hovey v. Elliott, 167 U. S. 409 (1897), in which the Court held that it did violate due process for a court to take similar action as “punishment” for failure to obey an order to pay into the registry of the court a certain sum of money. Due process is violated only if the behavior of the defendant will not support the Hammond Packing presumption. A proper application of Rule 37(b)(2) will, as a matter of law, support such a presumption. See Societe Internationale v. Rogers, 357 U. S. 197, 209-213 (1958). If there is no abuse of discretion in the application of the Rule 37 sanction, as we find to be the case here (see Part III), then the sanction is nothing more than the invocation of a legal presumption, or what is the same thing, the finding of a constructive waiver.

Petitioners argue that a sanction consisting of a finding of personal jurisdiction differs from all other instances in which a sanction is imposed, including the default judgment in Hammond Packing, because a party need not obey the orders of a court until it is established that the court has personal jurisdiction over that party. If there is no obligation to obey a judicial order, a sanction cannot be applied for the failure to comply. Until the court has established personal jurisdiction, moreover, any assertion of judicial power over the party violates due process.

This argument again assumes that there is something unique about the requirement of personal jurisdiction, which prevents it from being established or waived like other rights. A defendant is always free to ignore the judicial proceedings, risk a default judgment, and then challenge that judgment on jurisdictional grounds in a collateral proceeding. See Baldwin v. Traveling Men’s Assn., 283 U. S. 522, 525 (1931). By submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction, the defendant agrees to abide by that court’s determination on the issue of jurisdiction: That decision will be res judicata on that issue in any further proceedings. Id., at 524; American Surety Co. v. Baldwin, 287 U. S. 156, 166 (1932). As demonstrated above, the manner in which the court determines whether it has personal jurisdiction may include a variety of legal rules and presumptions, as well as straightforward factfinding. A particular rule may offend the due process standard of Hammond Packing, but the mere use of procedural rules does not in itself violate the defendant’s due process rights.

I — I l-H HH

Even if Rule 37(b)(2) may be applied to support a finding of personal jurisdiction, the question remains as to whether it was properly applied under the circumstances of this case. Because the District Court’s decision to invoke the sanction was accompanied by a detailed explanation of the reasons for that order and because that decision was upheld as a proper exercise of the District Court’s discretion by the Court of Appeals, this issue need not detain us for long. What was said in National Hockey League v. Metropolitan Hockey Club, Inc., 427 U. S. 639, 642 (1976), is fully applicable here: “The question, of course, is not whether this Court, or whether the Court of Appeals, would as an original matter have [applied the sanction]; it is whether the District Court abused its discretion in so doing” (citations omitted). For the reasons that follow, we hold that it did not.

Rule 37(b)(2) contains two standards — one general and one specific — that limit a district court’s discretion. First, any sanction must be “just”; second, the sanction must be specifically related to the particular “claim” which was at issue in the order to provide discovery. While the latter requirement reflects the rule of Hammond Packing, supra, the former represents the general due process restrictions on the court’s discretion.

In holding that the sanction in this case was “just,” we rely specifically on the following. First, the initial discovery request was made in July 1977. Despite repeated orders from the court to provide the requested material, on December 21, 1978, the District Court was able to state that the petitioners “haven’t even made any effort to get this information up to this point.” 1 App. 112a. The court then warned petitioners of a possible sanction. Confronted with continued delay and an obvious disregard of its orders, the trial court’s invoking of its powers under Rule 37 was clearly appropriate. Second, petitioners repeatedly agreed to comply with the discovery orders within specified time periods. In each instance, petitioners failed to comply with their agreements. Third, respondent’s allegation that the court had personal jurisdiction over petitioners was not a frivolous claim, and its attempt to use discovery to substantiate this claim was not, therefore, itself a misuse of judicial process. The substantiality of the jurisdictional allegation is demonstrated by the fact that the District Court found, as an alternative ground for its jurisdiction, that petitioners had sufficient contacts with Pennsylvania to fall within the State’s long-arm statute. Supra, at 699. Fourth, petitioners had ample warning that a continued failure to comply with the discovery orders would lead to the imposition of this sanction. Furthermore, the proposed sanction made it clear that, even if there was not compliance with the discovery order, this sanction would not be applied if petitioners were to “produce statistics and other information” that would indicate an absence of personal jurisdiction. 1 App. 116a. In effect, the District Court simply placed the burden of proof upon petitioners on the issue of personal jurisdiction. Petitioners failed to comply with the discovery order; they also failed to make any attempt to meet this burden of proof. This course of behavior, coupled with the ample warnings, demonstrates the “justice” of the trial court’s order.

Neither can there be any doubt that this sanction satisfies the second requirement. CBG was seeking through discovery to respond to petitioners’ contention that the District Court did not have personal jurisdiction. Having put the issue in question, petitioners did not have the option of blocking the reasonable attempt of CBG to meet its burden of proof. It surely did not have this option once the court had overruled petitioners’ objections. Because of petitioners’ failure to comply with the discovery orders, CBG was unable to establish the full extent of the contacts between petitioners and Pennsylvania, the critical issue in proving personal jurisdiction. Petitioners’ failure to supply the requested information as to its contacts with Pennsylvania supports “the presumption that the refusal to produce evidence . . . was but an admission of the want of merit in the asserted defense.” Hammond Packing, 212 U. S., at 351. The sanction took as established the facts — contacts with Pennsylvania — that CBG was seeking to establish through discovery. That a particular legal consequence — personal jurisdiction of the court over the defendants — follows from this, does not in any way affect the appropriateness of the sanction.

> HH

Because the application of a legal presumption to the issue of personal jurisdiction does not in itself violate the Due Process Clause and because there was no abuse of the discretion granted a district court under Rule 37(b)(2), we affirm the judgment of the Court of Appeals.

So ordered.

Justice Powell,

concurring in the judgment.

The Court rests today’s decision on a constitutional distinction between “subject matter” and “in personam” jurisdiction. Under this distinction, subject-matter jurisdiction defines an Art. Ill limitation on the power of federal courts. By contrast, the Court characterizes the limits on in perso-nam jurisdiction solely in terms of waivable personal rights and notions of “fair play.” Having done so, it determines that fundamental questions of judicial power do not arise in this case concerning the personal jurisdiction of a federal district court.

In my view the Court’s broadly theoretical decision misapprehends the issues actually presented for decision. Federal courts are courts of limited jurisdiction. Their personal jurisdiction, no less than their subject-matter jurisdiction, is subject both to constitutional and to statutory definition. When the applicable limitations on federal jurisdiction are identified, it becomes apparent that the Court’s theory could require a sweeping but largely unexplicated revision of jurisdictional doctrine. This revision could encompass not only the personal jurisdiction of federal courts but “sovereign” limitations on state jurisdiction as identified in World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 291-293 (1980). Fair resolution of this case does not require the Court’s broad holding. Accordingly, although I concur in the Court’s judgment, I cannot join its opinion.

I

This lawsuit began when the respondent Compagnie des Bauxites brought a contract action against the petitioner insurance companies in the United States District Court for the Western District of Pennsylvania. Alleging diversity jurisdiction, respondent averred that the District Court had personal jurisdiction of the petitioners, all foreign corporations, under the long-arm statute of the State of Pennsylvania. See Compagnie des Bauxites de Guinea v. Insurance Co. of North America, 651 F. 2d 877, 880-881 (CA3 1981). Petitioners, however, denied that they were subject to the court’s personal jurisdiction under that or any other statute. Viewing the question largely as one of fact, the court ordered discovery to resolve the dispute.

Meantime, while respondent unsuccessfully sought compliance with its discovery requests, petitioners brought a parallel action in England’s High Court of Justice, Queens Bench Division. It was at this juncture that the current issues arose. Seeking to enjoin the English proceedings, respondent sought an injunction in the District Court. Petitioners protested that they were not subject to that court’s personal jurisdiction and thus that they lay beyond its injunctive powers. But the District Court disagreed. As a jurisdictional prerequisite to its entry of the injunction, the court upheld its personal jurisdiction over petitioners. It characterized its finding of jurisdiction partly as a sanction for petitioners’ noncompliance with its discovery orders under Federal Rule of Civil Procedure 37(b).

Rule 37(b) is not, however, a jurisdictional provision. As recognized by the Court of Appeals, the governing jurisdictional statute remains the long-arm statute of the State of Pennsylvania. See 651 F. 2d, at 881. In my view the Court fails to make clear the implications of this central fact: that the District Court in this case relied on state law to obtain personal jurisdiction.

As courts of limited jurisdiction, the federal district courts possess no warrant to create jurisdictional law of their own. Under the Rules of Decision Act, 28 U. S. C. § 1652, they must apply state law “except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide . . . .” See generally Erie R. Co. v. Tompkins, 304 U. S. 64 (1938). Thus, in the absence of a federal rule or statute establishing a federal basis for the assertion of personal jurisdiction, the personal jurisdiction of the district courts is determined in diversity cases by the law of the forum State. See, e. g., Intermeat, Inc. v. American Poultry Co., 575 F. 2d 1017 (CA2 1978); Wilkerson v. Fortuna Corp., 554 F. 2d 745 (CA5), cert. denied, 434 U. S. 939 (1977); Poyner v. Erma Werke Gmbh, 618 F. 2d 1186, 1187 (CA6 1980); Lakeside Bridge & Steel Co. v. Mountain State Constr. Co., 597 F. 2d 596 (CA7 1979), cert. denied, 445 U. S. 907 (1980); Lakota Girl Scout Council, Inc. v. Havey Fundraising Management, Inc., 519 F. 2d 634 (CA8 1975); Arrowsmith v. United Press International, 320 F. 2d 219, 226 (CA2 1963); Forsythe v. Overmyer, 576 F. 2d 779, 782 (CA9), cert. denied, 439 U. S. 864 (1978); Quarles v. Fuqua Industries, Inc., 504 F. 2d 1358 (CA10 1974).

As a result of the District Court’s dependence on the law of Pennsylvania to establish personal jurisdiction — a dependence mandated by Congress under 28 U. S. C. § 1652 — its jurisdiction in this case normally would be subject to the same due process limitations as a state court. See, e. g., Forsythe v. Overmyer, supra, at 782; Washington v. Norton Mfg., Inc., 588 F. 2d 441, 445 (CA5 1979); Fisons Ltd. v. United States, 458 F. 2d 1241, 1250 (CA7 1972). Thus, the question arises how today’s decision is related to cases restricting the personal jurisdiction of the States.

Before today our decisions had established that “minimum contacts” represented a constitutional prerequisite to the exercise of in personam jurisdiction over an unconsenting defendant. See, e. g., World-Wide Volkswagen Corp. v. Wood- son, 444 U. S., at 291-293; Hanson v. Denckla, 357 U. S. 235, 251 (1958); International Shoe Co. v. Washington, 326 U. S. 310, 316 (1945). In the absence of a showing of minimum contacts, a finding of personal jurisdiction over an un-consenting defendant, even as a sanction, therefore would appear to transgress previously established constitutional limitations. The cases cannot be reconciled by a simple distinction between the constitutional limits on state and federal courts. Because of the District Court’s reliance on the Pennsylvania long-arm statute — the applicable jurisdictional provision under the Rules of Decisions Act — the relevant constitutional limits would not be those imposed directly on federal courts by the Due Process Clause of the Fifth Amendment, but those applicable to state jurisdictional law under the Fourteenth.

The Court’s decision apparently must be understood as related to our state jurisdictional cases in one of two ways. Both involve legal theories that fail to justify the doctrine adopted by the Court in this case.

A

Under traditional principles, the due process question in this case is whether “minimum contacts” exist between petitioners and the forum State that would justify the State in exercising personal jurisdiction. See, e. g., World-Wide Volkswagen Corp. v. Woodson, supra, at 291-293; Shaffer v. Heitner, 433 U. S. 186, 216 (1977); Hanson v. Denckla, supra, at 251. By finding that the establishment of minimum contacts is not a prerequisite to the exercise of jurisdiction to impose sanctions under Federal Rule of Civil Procedure 37, the Court may be understood as finding that “minimum contacts” no longer are a constitutional requirement for the exercise by a state court of personal jurisdiction over an unconsenting defendant. Whenever the Court’s notions of fairness are not offended, jurisdiction apparently may be upheld.

Before today, of course, our cases had linked minimum contacts and fair play as jointly defining the “sovereign” limits on state assertions of personal jurisdiction over uncon-senting defendants. See World-Wide Volkswagen Corp. v. Woodson, supra, at 292-293; see Hanson v. Denckla, supra, at 251. The Court appears to abandon the rationale of these cases in a footnote. See ante, at 702-703, n. 10. But it does not address the implications of its action. By eschewing reliance on the concept of minimum contacts as a “sovereign” limitation on the power of States — for, again, it is the State’s long-arm statute that is invoked to obtain personal jurisdiction in the District Court — the Court today effects a potentially substantial change of law. For the first time it defines personal jurisdiction solely by reference to abstract notions of fair play. And, astonishingly to me, it does so in a case in which this rationale for decision was neither argued nor briefed by the parties.

B

Alternatively, it is possible to read the Court opinion, not as affecting state jurisdiction, but simply as asserting that Rule 37 of the Federal Rules of Civil Procedure represents a congressionally approved basis for the exercise of personal jurisdiction by a federal district court. On this view Rule 37 vests the federal district courts with authority to take jurisdiction over persons not in compliance with discovery orders. This of course would be a more limited holding. Yet the Court does not cast its decision in these terms. And it provides no support for such an interpretation, either in the language or in the history of the Federal Rules.

In the absence of such support, I could not join the Court in embracing such a construction of the Rules of Civil Procedure. There is nothing in Rule 37 to suggest that it is intended to confer a grant of personal jurisdiction. Indeed, the clear language of Rule 82 seems to establish that Rule 37 should not be construed as a jurisdictional grant: “These rules shall not be construed to extend . . . the jurisdiction of the United States district courts or the venue of actions therein.” Moreover, assuming that minimum contacts remain a constitutional predicate for the exercise of a State’s in 'personam jurisdiction over an unconsenting defendant, constitutional questions would arise if Rule 37 were read to permit a plaintiff in a diversity action to subject a defendant to a “fishing expedition” in a foreign jurisdiction. A plaintiff is not entitled to discovery to establish essentially speculative allegations necessary to personal jurisdiction. Nor would the use of Rule 37 sanctions to enforce discovery orders constitute a mere abuse of discretion in such a case. For me at least, such a use of discovery would raise serious questions as to the constitutional as well as the statutory authority of a federal court — in a diversity case — to exercise personal jurisdiction absent some showing of minimum contacts between the unconsenting defendant and the forum State.

II

In this case the facts alone — unaided by broad jurisdictional theories — more than amply demonstrate that the District Court possessed personal jurisdiction to impose sanctions under Rule 37 and otherwise to adjudicate this case. I would decide the case on this narrow basis.

As recognized both by the District Court and the Court of Appeals, the respondent adduced substantial support for its jurisdictional assertions. By affidavit and other evidence, it made a prima facie showing of “minimum contacts.” See 651 F. 2d, at 881-882, 886, and n. 9. In the view of the District Court, the evidence adduced actually was sufficient to sustain a finding of personal jurisdiction independently of the Rule 37 sanction. App. to Pet. for Cert. 51a, 53a.

Where the plaintiff has made a prima facie showing of minimum contacts, I have little difficulty in holding that its showing was sufficient to warrant the District Court’s entry of discovery orders. And where a defendant then fails to comply with those orders, I agree that the prima facie showing may be held adequate to sustain the court’s finding that minimum contacts exist, either under Rule 37 or under a theory of “presumption” or “waiver.”

Finding that the decision of the Court of Appeals should be affirmed on this ground, I concur in the judgment of the Court.

       The petition with which we deal in this case was filed as a cross-petition in response to the petition for certiorari filed in No. 81-290, Compagnie des Bauxites de Guinee v. Insurance Corp. of Ireland, Ltd. We granted the cross-petition, limiting the grant to the question of the validity of the Rule 37(b)(2) sanction. 454 U. S. 963 (1981). We shall refer to the cross-petitioners as “petitioners” and to the cross-respondent as “respondent.”

       The District Court described these excess insurers as follows:
      “Of the 21 Excess Insurers, five are English companies representing English domestic interests but insuring risks throughout the world, particularly in Pennsylvania. Seven are English companies which represent non English parents, or affiliates. The United States, Japan and Israel are the nationalities of two each of the Excess Insurer Defendants. Switzerland and the Republic of Ireland are the nationalities of one each of the Excess Insurer Defendants. The remaining Excess Insurer Defendant is a Belgium Company which represents the United States parent.” 1 App. 196a.

       Four of the excess insurers did not contest personal jurisdiction in the District Court. Id., at 105a. The Court of Appeals directed the dismissal of the complaint with respect to three others. Compagnie des Bauxites de Guinee v. Insurance Co. of North America, 651 F. 2d 877, 886 (1981). CBG challenges the latter action in its petition for certiorari in No. 81-290.

       One of the excess insurers, L’Union Atlantique S. A. d’Assurances, does business in Brussels, and was sent a separate placing slip.

       The motion for summary judgment was filed on May 20,1977. In it, 17 of the excess insurers alleged a lack of in personam jurisdiction and all 21 excess insurers sought dismissal on the ground oí forum non conveniens. The District Court denied the motion on April 19, 1979.

       On March 22,1979, the excess insurers instituted a suit against CBG in England, attackingthe validity of the insurance contract. Inits April 19 decision, the District Court found that “the commencement of the separate action in England [was] oppressive, unfair, and an act of bad faith under all of the circumstances.” 1 App. 203a. It, therefore, enjoined the continuation of that suit. This aspect of the District Court decision was reversed by the Court of Appeals. Respondent seeks certiorari review of that decision (see n. 1, supra,).

       It reversed as to three of the excess insurers on the grounds that they had complied with the discovery orders and that their contacts with Pennsylvania were not sufficient to justify exercise of the Pennsylvania long-arm statute. It also held that the District Court had abused its discretion in enjoining the action in England. Judge Gibbons dissented on the propriety of the sanction, arguing that the District Court had abused its discretion. He also expressed some doubt that a Rule 37 sanction could ever be used as the source of personal jurisdiction. 651 F. 2d, at 892, n. 4.

       In Familia de Boom, the Fifth Circuit held that a sanction under Rule 37(b)(2) is valid only if the court has personal jurisdiction over the party that has refused compliance with a court order. Personal jurisdiction must, it held, appear from the record independently of the sanction. The Courts of Appeals for the Fourth and Eighth Circuits, on the other hand, have agreed with the Third Circuit on the appropriateness of a sanction on the issue of personal jurisdiction. Lekkas v. Liberian M/V Caledonia, 443 F. 2d 10, 11 (CA4 1971); English v. 21st Phoenix Corp., 590 F. 2d 723 (CA8 1979).

       A party that has had an opportunity to litigate the question of subject-matter jurisdiction may not, however, reopen that question in a collateral attack upon an adverse judgment. It has long been the rule that principles of res judicata apply to jurisdictional determinations — both subject matter and personal. See Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371 (1940); Stoll v. Gottlieb, 305 U. S. 165 (1938).

       It is true that we have stated that the requirement of personal jurisdiction, as applied to state courts, reflects an element of federalism and the character of state sovereignty vis-a-vis other States. For example, in World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 291-292 (1980), we stated:
      “[A] state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist ‘minimum contacts’ between the defendant and the forum State. The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.” (Citation omitted.)
      Contrary to the suggestion of Justice Powell, post, at 713-714, our holding today does not alter the requirement that there be “minimum contacts” between the nonresident defendant and the forum State. Rather, our holding deals with how the facts needed to show those “minimum contacts” can be established when a defendant fails to comply with court-ordered discovery. The restriction on state sovereign power described in World-Wide Volkswagen Corp., however, must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause. That Clause is the only source of the personal jurisdiction requirement and the Clause itself makes no mention of federalism concerns. Furthermore, if the federalism concept operated as an independent restriction on the sovereign power of the court, it would not be possible to waive the personal jurisdiction requirement: Individual actions cannot change the powers of sovereignty, although the individual can subject himself to powers from which he may otherwise be protected.

       The Advisory Committee Notes to the Rule specifically stated that “the provisions of the rule find support in [Hammond Packing Co. v. Arkansas, 212 U. S. 322 (1909)].” Final Report of Advisory Committee on Rules for Civil Procedure 25 (1937). See also Societe Internationale v. Rogers, 357 U. S. 197, 209 (1958).

       Counsel for petitioners agreed to this characterization of the sanction at oral argument. Tr. of Oral Arg. 47-48.

         A district court must have personal jurisdiction over a party before it can enjoin its actions. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 111-112 (1969).

       The court also found that petitioners in fact had undertaken sufficient business activity in the State to bring them within the reach of the Pennsylvania long-arm statute. See App. to Pet. for Cert. 51a, 53a.

       As Judge Friendly explained in the leading case of Arrowsmith v. United Press International, 320 F. 2d, at 226:
      “State statutes determining what foreign corporations may be sued, for what, and by whom, are not mere whimsy; like most legislation they represent a balancing of various considerations — for example, affording a forum for wrongs connected with the state and conveniencing resident plaintiffs, while avoiding the discouragement of activity within the state by foreign corporations. We see nothing in the concept of diversity jurisdiction that should lead us to read into the governing statutes a Congressional mandate, unexpressed by Congress itself, to disregard the balance thus struck by the states.”

       It is not contended that there is any federal basis for the exercise of personal jurisdiction by the District Court.

       The Court refers to the respondent’s prima facie showing of “minimum contacts” only as one factor indicating that the District Court did not abuse its discretion in entering a finding of personal jurisdiction as a sanction under Rule 37(b). See ante, at 708. Generally it views the requirement of personal jurisdiction as a right that may be “established or waived like other rights.” Ante, at 706.

       Jurisdiction over the person generally is dealt with by Rule 4, governing the methods of service through which personal jurisdiction may be obtained. Although Rule 4 deals expressly only with service of process, not with the underlying jurisdictional prerequisites, jurisdiction may not be obtained unless process is served in compliance with applicable law. See, e. g., Intermeat, Inc. v. American Poultry Co., 575 F. 2d 1017 (CA2 1978); Washington v. Norton Mfg., Inc., 588 F. 2d 441, 445 (CA5 1979); D. Currie, Federal Courts 858 (2d ed. 1975). For this reason Rule 4 frequently has been characterized as a jurisdictional provision. See, e. g., 374 U. S. 869 (1963) (statement of Black and Douglas, JJ., dissenting from adoption of amendments to the Federal Rules of Civil Procedure); Currie, supra, at 858; Foster, Long-Arm Jurisdiction in Federal Courts, 1969 Wis. L. Rev. 9, 11. As applicable here, Rule 4 relies expressly on state law. See Fed. Rules Civ. Proc. 4(d)(7) and (e).

       Compare the Court’s view. Ante, at 707.

       The Court of Appeals deemed it unnecessary to review this alternative basis for the District Court’s finding of jurisdiction. See 651 F. 2d, at 886, and n. 9.


source: Caselaw Access Project

author: Justice Marshall

license: Public Domain

text:
    SUMMIT VALLEY INDUSTRIES, INC. v. LOCAL 112, UNITED BROTHERHOOD OF CARPENTERS & JOINERS OF AMERICA
    No. 81-497.
    Argued April 28, 1982
    Decided June 1, 1982

      Marshall, J., delivered the opinion for a unanimous Court.

      Donald C. Robinson argued the cause and filed briefs for petitioner.

      David S. Pauli argued the cause for respondent. With him on the brief was Paul T. Bailey.

        J. Albert Woll, Laurence Gold, and George Kaufmann filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.

   Justice Marshall

delivered the opinion of the Court.

We granted certiorari to decide whether § 303 of the Labor Management Relations Act (LMRA), 61 Stat. 158, as amended, 29 U. S. C. § 187, authorizes the recovery of attorney’s fees incurred in prior proceedings before the National Labor Relations Board (Board). 454 U. S. 1079 (1981). The Courts of Appeals have divided on this issue. In this case, the Court of Appeals for the Ninth Circuit held that attorney’s fees may not be recovered. We affirm.

r — i

Petitioner Summit Valley Industries, Inc. (Summit Valley), manufactures prefabricated modular homes. These homes are completed at petitioner’s plant and sold directly to home buyers. The buyer then independently obtains the services of a local contractor to install the completed home and to attach ancillary structures. In June 1972, Summit Valley opened a plant in the Butte, Mont., area. Rather than utilizing skilled union carpenters at this plant, petitioner hired unskilled workers. These workers were represented by Butte Teamsters Union, Local No. 2 (Teamsters), under a collective-bargaining agreement between the Teamsters and Summit Valley.

Upon learning that Summit Valley employed no skilled carpenters, respondent Local 112 of the United Brotherhood of Carpenters and Joiners of America (Union) filed unfair labor practice charges against Summit Valley. The Union claimed that Summit Valley had violated a valid work-preservation agreement between the Union and area contractor associations. Although the Union withdrew these charges when it realized that Summit Valley was not a signatory to the agreement, it ordered its members not to work on the installation of petitioner’s homes. On at least two occasions, Summit Valley sent its own employees to complete the installation work that would otherwise have been done by the Union. As a result, respondent began picketing petitioner’s plant.

Summit Valley filed an unfair labor practice charge against the Union, alleging that respondent’s work stoppage and picketing violated the secondary boycott and jurisdictional picketing prohibitions of the National Labor Relations Act (NLRA). §§ 8(b)(4)(B) and (D) of the NLRA, 29 U. S. C. §§ 158(b)(4)(B) and (D). The Regional Director of the Board initiated a § 10(l) proceeding, 29 U. S. C. § 160(l), in the United States District Court for the District of Montana. The District Court imposed a temporary restraining order pending the outcome of the proceeding before the Board. Henderson v. United Brotherhood of Carpenters and Joiners of America, Local 112, Civ. Nos. 2235 & 2239 (1972). The Union ceased picketing in November 1972, and its members resumed the installation of Summit Valley’s homes.

Summit Valley then initiated a § 10(k) proceeding, 29 U. S. C. §160(k), seeking resolution of its claim that the Union had engaged in illegal jurisdictional picketing, prohibited by § 8(b)(4)(D). After a 2-day hearing, the Board found against the Union, holding that Summit Valley had validly assigned the work in question to the Teamsters. Carpenters, Local 112 (Summit Valley Industries), 202 N. L. R. B. 974, 83 LRRM 1013 (1973). The Union agreed not to pressure Summit Valley to reassign work in violation of its collective-bargaining agreement with the Teamsters. However, the Union maintained that it had the right to truthfully advise the public that petitioner did not employ its members in the construction of modular homes.

After the § 10(k) proceeding, an Administrative Law Judge (ALJ) conducted 15 days of hearings on the unfair labor practice charges. The ALJ concluded that the Union had violated §§ 8(b)(4)(B) and (D), but that the Union had sought to enforce the work-preservation clause on the good-faith belief that its actions were lawful. The Board adopted the findings of the ALJ, and it ordered the Union to cease and desist from these unfair labor practices, and to fully comply with the Board’s order obtained as a result of the § 10(k) proceeding. Carpenters, Local 112 (Summit Valley Industries), 217 N. L. R. B. 902, 89 LRRM 1799 (1975). The Court of Appeals for the Ninth Circuit enforced the Board’s order. Chamber of Commerce of United States v. NLRB, 574 F. 2d 457 (1978).

This action was filed pursuant to § 303 of the LMR A in the United States District Court for the District of Montana. Summit Valley sought damages resulting from the Union’s illegal secondary and jurisdictional activity in the amount of $17,279.33: $3,675.00 in business losses, and $13,604.33 in attorney’s fees incurred during the Board proceedings. The District Court found that the Board’s decision that the Union had committed unfair labor practices collaterally estopped the Union from relitigating this issue in the §303 action. Relying on Mead v. Retail Clerks International Assn., 523 F. 2d 1371 (CA9 1975), the District Court concluded that Summit Valley was not entitled to recover attorney’s fees as part of its damages. The court entered judgment for Summit Valley, awarding it an amount that represented its business losses. 475 F. Supp. 665 (1979). The Court of Appeals affirmed in an unpublished per curiam. Civ. No. 79-4663 (CA9 1981); 652 F. 2d 65 (1981) (affirmance order).

r-H HH

Under the American Rule it is well established that attorney’s fees “are not ordinarily recoverable in the absence of a statute or enforceable contract providing therefor.” Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U. S. 714, 717 (1967). This Court has endorsed certain exceptions to this rule where necessary to further the interests of justice. See, e. g., Vaughan v. Atkinson, 369 U. S. 527 (1962) (bad faith); Toledo Scale Co. v. Computing Scale Co., 261 U. S. 399 (1923) (willful disobedience of a court order); Central Railroad & Banking Co. v. Pettus, 113 U. S. 116 (1885) (common fund). In the absence of one of these equitable exceptions, however, the rule has been consistently followed for almost 200 years. See Alyeska Pipeline Co. v. Wilderness Society, 421 U. S. 240, 249-250 (1975); Arcambel v. Wiseman, 3 Dall. 306 (1796). Recognizing this consistent adherence to the American Rule, petitioner contends that § 303 provides express statutory authorization for the recovery of attorney’s fees incurred in prior Board proceedings. We find this contention unsupported by either the language or the legislative history of § 303.

Section 303 authorizes a private damages action for an employer who has been injured by a union’s unfair labor practice. Section 303(a), 29 U. S. C. § 187(a), makes it unlawful for a labor organization to engage in conduct defined as an unfair labor practice under § 8(b)(4) of the NLRA. As a remedy for this conduct § 303(b) provides that “[wjhoever shall be injured in his business or property by reason of any violation of subsection (a) of this section may sue therefor in any district court of the United States . . . and shall recover the damages by him sustained and the cost of the suit.” 29 U. S. C. § 187(b).

Section 303 does not expressly provide for the recovery of attorney’s fees, so we are not presented with a situation where Congress has made “specific and explicit provisions for the allowance of” such fees. Alyeska Pipeline Co. v. Wilderness Society, supra, at 260, and n. 33 (collecting statutes). Nonetheless, Summit Valley argues that § 303 does specifically authorize a district court to award attorney’s fees incurred for the purpose of terminating the Union’s illegal secondary activity by providing for the recovery of “damages” resulting from this activity. Because attorney’s fees expended to compel “‘resumption of work in effect take the place of other compensable damages which would continue to be suffered if work were not resumed,’” petitioner asserts that such fees are part of the damages caused by the Union’s illegal activity. Brief for Petitioner 13, quoting Associated General Contractors v. Construction and General Laborers Local 563, 612 F. 2d 1060, 1064 (CA8 1979).

In assessing petitioner’s interpretation of the word “damages” in § 303(b), we begin with the “fundamental canon of statutory construction . . . that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning.” Perrin v. United States, 444 U. S. 37, 42 (1979); Burns v. Alcala, 420 U. S. 575, 580-581 (1975). Ordinarily a statutory right to “damages” does not include an implicit authorization to award attorney’s fees. Indeed, the American Rule presumes that the word “damages” means damages exclusive of fees. See, e. g., Arcambel v. Wiseman, supra; Day v. Woodworth, 13 How. 363 (1852); cf. Teamsters v. Morton, 377 U. S. 252, 260, n. 15 (1964). Thus, petitioner’s claim can succeed only if an examination of the relevant legislative history demonstrates that Congress intended to give a broader than normal scope to the term “damages.”

Our review of the legislative history of §303 reveals no such intention. To the contrary, the little discussion pertaining to the scope of an employer’s recovery under § 303(b) indicates that Congress did not intend to expand the term “damages” to include attorney’s fees. The following colloquy between Senator Taft and Senator Morse is particularly instructive. In response to Senator Morse’s suggestion that § 303(b) would impose virtually unlimited liability on unions, Senator Taft stated: “Under the Sherman Act the same question of boycott damage is subject to a suit for damages and attorneys’ fees. In this case we simply provide for the amount of the actual damages.” 93 Cong. Rec. 4872-4873 (1947) (emphasis added). We find these remarks persuasive evidence that Congress did not intend attorney’s fees which were expended to stop a union from engaging in illegal activity to be recovered as “damages” under § 303(b).

In this respect, petitioner’s claim is analogous to that presented in Teamsters v. Morton, supra. In Teamsters, this Court reviewed the history and policies underlying § 303 in order to determine whether that provision authorized an award of punitive damages. Relying on the same colloquy quoted above, we concluded that “recovery for an employer’s business losses caused by a union’s peaceful secondary activity proscribed by § 303 should be limited to actual, compensatory damages.” Id., at 260. As we have often noted, one of the primary justifications for the American Rule is that “one should not be penalized for merely defending or prosecuting a lawsuit.” Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U. S., at 718 (emphasis added). See also, F. D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U. S. 116, 129 (1974); Farmer v. Arabian American Oil Co., 379 U. S. 227, 235 (1964). The congressional intention discerned in Teamsters to limit recovery to actual, compensatory damages, counsels against reading the word “damages” to include attorney’s fees incurred during prior Board proceedings.

Nevertheless Summit Valley contends that allowing it to recover reasonable attorney’s fees incurred during Board proceedings furthers the statutory intent to protect employers from the adverse effects of a union’s illegal secondary activity. We agree that Congress was concerned about protecting employers from injury arising out of this type of activity when it enacted §303. See generally S. Rep. No. 105, 80th Cong., 1st Sess., 54-55 (1947), 1 Legislative History of the LMRA 460-461 (1974) (Leg. Hist.); 93 Cong. Rec. 5060 (1947), 2 Leg. Hist. 1371 (remarks of Sen. Taft). However, we fail to see why this interest cannot be adequately protected by the award of compensatory damages for the business losses resulting from the Union’s prohibited conduct.

Ultimately, petitioner’s argument rests on the assumption that “Congress plainly intended Section 303 to be fully remedial and to restore to the victimized employer all . . . losses caused by the illegal activity.” Brief for Petitioner 23 (emphasis added). Even assuming that attorney’s fees are necessary to achieve full compensation, this justification alone is not sufficient to create an exception to the American Rule in the absence of express congressional authority. See F. D. Rich Co. v. United States ex rel. Industrial Lumber Co., supra, at 128-129. In F. D. Rich, this Court rejected the argument that attorney’s fees should be awarded under the Miller Act, 49 Stat. 793, as amended, 80 Stat. 1139, 40 U. S. C. § 270a et seq., because the Act provided for recovery of “sums justly due,” 40 U. S. C. § 270b(a), and, unless fees were awarded, the legislative intent in favor of full compensation would be frustrated. 417 U. S., at 128.

In squarely rejecting this claim, we found it to be nothing more than a “restate[ment] of one of the oft-repeated criticisms of the American Rule.” Ibid. Although this Court acknowledged that “there is some force to the argument that a party who must bear the cost of his attorneys’ fees out of his recovery is not made whole,” we concluded that the countervailing considerations which support the American Rule argue against placing exclusive reliance on the need to provide full compensation. Id., at 129. These considerations include the possible deterrent effect that fee shifting would have on poor litigants with meritorious claims, the time, expense, and difficulty of litigating the fee question, and the possibility that the principle of independent advocacy might be threatened by having “the earnings of the attorney flow from the pen of the judge before whom he argues.” Ibid. These same considerations persuade us not to infer that Congress intended to authorize fee shifting in §303 actions in order to fully compensate an employer for the “damages sustained by him” as a result of a union’s illegal activity.

Furthermore, petitioner’s analysis would authorize the recovery of attorney’s fees in every case where the plaintiff has prevailed against the defendant in prior litigation involving the same issues. See Mead v. Retail Clerks International Assn., 523 F. 2d, at 1380. Quite simply, anytime a plaintiff must resort to litigation to enjoin the defendant from engaging in illegal conduct, arguably the plaintiff has been injured in the amount of its attorney’s fees spent to obtain the injunction. Under petitioner’s analysis, each plaintiff could recover the costs of this prior litigation as part of its damages in any subsequent action involving the same conduct. Such a result, however, is clearly barred by our prior decisions. The American Rule precludes courts from awarding attorney’s fees incurred during prior proceedings in the same case. See Fleischmann Distilling Corp. v. Maier Brewing Co., supra. Similarly, courts have uniformly concluded that “where an action based on the same wrongful act has been prosecuted by the plaintiff against the defendant to a successful issue, he can not in a subsequent action recover, as damages, his costs and expenses in the former action.” Ritter v. Ritter, 381 Ill. 549, 555, 46 N. E. 2d 41, 44 (1943). See also Flanders v. Tweed, 15 Wall. 450 (1873); Mead v. Retail Clerks International Assn., supra, at 1380-1381; Ritter v. Ritter, 381 Ill., at 557, 46 N. E. 2d, at 45 (collecting cases).

This rule is universally followed in order to avoid the endless stream of litigation that might ensue if successful litigants could recover their attorney’s fees in subsequent actions: “immediately upon the entry of judgment the plaintiff would start another action against the defendant for his attorney fees and expenses incurred in obtaining the preceding judgment.” Id., at 555, 46 N. E. 2d, at 44. Under petitioner’s construction of § 303(b) the word “damages” would always encompass attorney’s fees expended in prior litigation. In the absence of clear support for this construction in the language or the legislative history of § 303 we decline to adopt such a broad exception to the American Rule.

) — I HH I — I

Attorney’s fees incurred during prior Board proceedings are not a proper element of damages under § 303(b) of the LMRA. Accordingly, the judgment of the Court of Appeals for the Ninth Circuit is

Affirmed.

       The Fifth, Sixth, and Eighth Circuits have held that attorney’s fees may be recovered. See Texas Distributors, Inc. v. Local Union No. 100, 598 F. 2d 393 (CA5 1979); Local Union No. 984, International Brotherhood of Teamsters v. Humko Co., 287 F. 2d 231 (CA6), cert. denied, 366 U. S. 962 (1961); Associated General Contractors of Minnesota v. Construction and General Laborers Local No. 563, 612 F. 2d 1060 (CA8 1979). The First Circuit has expressed approval of this rule in dicta. See F. F. Instrument Corp. v. Union de Tronquistas de Puerto Rico, 558 F. 2d 607, 611 (1977). The Ninth Circuit alone has reached a contrary conclusion. See Mead v. Retail Clerks International Assn., 523 F. 2d 1371 (1975).

       Of course, these remarks are not conclusive. It is possible that Senator Taft’s remarks may have been confined to a rejection of the recovery of attorney’s fees expended during the § 303 proceeding itself. See Mead v. Retail Clerks International Assn., 523 F. 2d, at 1380.

       The rationale of petitioner’s position would seem to require that fees be awarded whenever a defendant’s wrongful conduct requires a plaintiff to incur more litigation expenses, even if those expenses are incurred in the same action. Furthermore, because the District Court gave the Board’s findings collateral-estoppel effect in the § 303 action, petitioner did not have to relitigate the question whether the Union had committed an unfair labor practice. In effect, Summit Valley is therefore asking for fees that it would have incurred in the § 303 action had it not first litigated the issues before the Board.


author: Justice Blackmun

text:
    ARMY AND AIR FORCE EXCHANGE SERVICE v. SHEEHAN
    No. 80-1437.
    Argued February 23, 1982
    Decided June 1, 1982

      Blackmun, J., delivered the opinion of the Court, in which Brennan, White, Marshall, Powell, Rehnquist, Stevens, and O’Connor, JJ., joined. Burger, C. J., concurred in the judgment.

      Samuel A. Alito, Jr., argued the cause for petitioner. With him on the briefs were Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Geller, and William Kanter.

      Ira E. Tobolowsky argued the cause and filed a brief for respondent.
   Justice Blackmun

delivered the opinion of the Court.

The issue presented by this case is whether the federal courts have jurisdiction over a civil action for monetary damages brought by a former military exchange employee who contests the validity of his discharge. The employee claims that federal jurisdiction exists under the Tucker Act, 28 U. S. C. § 1346(a)(2) (1976 ed., Supp. IV).

I

A

In 1962, respondent, Arthur Edward Sheehan, was selected for a data processing position with petitioner Army and Air Force Exchange Service (AAFES or Service). Five years later, respondent was designated by the AAFES commander for participation in the Service’s Executive Management Program (EMP); this program is “intended to fulfill the continuing requirement of AAFES for highly qualified and dedicated executive employees who will be readily available to meet the worldwide executive personnel requirements of AAFES.” Army Regulation (AR) 60-21/Air Force Regulation (AFR) 147-15, ch. 5, § II, ¶ 5-6 (1 Aug. 1979). Employees in the program enjoy special retention, insurance, and retirement benefits. On the other hand, those employees are subject to certain obligations, a principal one being that EMP personnel must accept transfer to any AAFES facility in this country or abroad. ¶ 5—9(a)(2). EMP status may be withdrawn for, among other things, “conduct off the job reflecting discredit upon AAFES.” ¶ 5-9(c). Pursuant to the regulations governing the EMP, respondent was required to “acknowledge] in writing that he understood] and accepted] the conditions of the EMP as prescribed by the Commander, AAFES.” ¶ 5-7(b).

In 1975, while respondent was serving as a shopping center manager at Fort Jackson, S. C., he was arrested off the base for possession of controlled substances. Pursuant to a plea bargain, respondent pleaded guilty to four misdemeanor counts of violating state drug laws. He was sentenced to 18 months’ probation and a $1,000 fine was imposed.

On March 16, 1976, respondent received advance written notice of separation from the Service for cause. Referring specifically to respondent’s conviction, the notice stated that the reason for the separation was “conduct off the job which reflects discredit on the AAFES and which is of such a nature that your retention in any capacity is incompatible with the best interests of AAFES.” App. 11. James J. Stapleton, the AAFES General Manager for the Piedmont Area Exchange, signed the notice, but, because of respondent’s participation in the EMP, prior approval had been obtained from Major General C. W. Hospelhorn, Commander, AAFES. Following an investigation, Stapleton issued a final notice of separation for cause, effective April 19, 1976. Id., at 17. This notice advised respondent that he was to be dismissed “in view of the entire weight of evidence which resulted in your plea of guilty.” Ibid.

Respondent, in accord with authorized AAFES procedures, filed an administrative appeal. The hearing examiner determined that the Service had acted in compliance with applicable laws and regulations, but concluded that respondent’s conduct off the job did not reflect discredit on the AAFES and that his retention in some capacity was not incompatible with the interests of the Service. The examiner therefore recommended that respondent’s appeal be granted and that he be reinstated with backpay to his former grade but transferred to an assignment in another region. General Hospelhorn, however, acting as the appellate authority, disagreed, and denied respondent’s appeal.

In 1978, respondent, by a letter from counsel addressed to the new AAFES Commander, Major General Bobby W. Presley, requested reconsideration. Id., at 40. Respondent asserted that his separation was contrary to AAFES rules and regulations and that he had been denied due process of law. General Presley reopened the case and referred it to Lieutenant General Charles E. Buckingham, Chairman of the Board of Directors of AAFES. At General Buckingham’s request, the administrative record was reviewed by the Judge Advocate General of the Air Force. He concluded that the record evidence supported the charge that respondent’s conduct reflected discredit upon the AAFES and that his retention was inconsistent with the Service’s best interests. The Judge Advocate General, however, agreed with respondent that General Hospelhorn was disqualified from acting as the appellate authority; he felt that it was appropriate for General Buckingham to act in that capacity, and he recommended that respondent’s appeal be denied. General Buckingham followed that advice and denied respondent’s appeal.

B

While the matter was pending before the Judge Advocate General, respondent filed suit against the AAFES in the United States District Court for the Northern District of Texas. The first count of respondent’s complaint alleged that his rights to due process and to a free and impartial appeal pursuant to AAFES regulations were infringed when General Hospelhorn acted as both the separation authority and the appellate authority. In the second count, respondent claimed that the denial of his appeal was arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence and unwarranted by the facts, and in violation of statutory and constitutional provisions. Respondent sought reinstatement and damages, including backpay.

The District Court, without opinion, dismissed the complaint for want of subject-matter jurisdiction. App. to Pet. for Cert. 17a.

The United States Court of Appeals for the Fifth Circuit reversed. It concluded that the Tucker Act, 28 U. S. C. § 1346(a)(2), which gives the federal courts jurisdiction over certain suits against the United States founded upon express or implied contracts, provided a basis for jurisdiction over respondent’s claims for monetary relief. 619 F. 2d 1132 (1980). Whether respondent’s employment was initiated by appointment or by contract, the court held, the AAFES regulations providing for separation for cause only under certain conditions and guaranteeing an administrative appeal “manifest[ed] the understanding of the parties concerning discharge procedures while Sheehan continued in AAFES employment.” Id., at 1138 (emphasis in original). Accordingly, the court considered those regulations to be “part of a collateral implied-in-fact contract between Sheehan and the AAFES that the AAFES would adhere to the regulations in its dealings with him.” Ibid. In the court’s view, the understanding of the parties was reinforced by the well-established legal principle that a federal agency must comply with its own regulations. The court concluded that respondent’s allegation that his dismissal violated applicable regulations was “equivalent to an allegation of breach of an implied-in-fact contract,” ibid., and that the District Court therefore had erred in ruling that it had no jurisdiction to award respondent monetary relief.

Because this ruling appeared to be in conflict with our precedents, we granted certiorari. 454 U. S. 813 (1981).

I — I l-H

The AAFES, like other military exchanges, is an “ ‘ar[m] of the government deemed by it essential for the performance of governmental functions . . . and partake[s] of whatever immunities it may have under the constitution and federal statutes/” United States v. Mississippi Tax Comm’n, 421 U. S. 599, 606 (1975), quoting, with approval, language of the District Court in the same case, 378 F. Supp. 558, 562-563 (SD Miss. 1974). As a result, the federal courts may entertain actions against the Service only if Congress has consented to suit; “a waiver of the traditional sovereign immunity ‘cannot be implied but must be unequivocally expressed.’” United States v. Testan, 424 U. S. 392, 399 (1976), quoting United States v. King, 395 U. S. 1, 4 (1969).

The Tucker Act effects one such explicit waiver when it provides in pertinent part:

“The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:
“. . . 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. . . . For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service . . . shall be considered an express or implied contract with the United States.” 28 U. S. C. § 1346(a)(2) (1976 ed., Supp. IV) (emphasis added).

Respondent does not assert Tucker Act jurisdiction on the basis of the Constitution or a specific statute or regulation. He claims only that the Tucker Act affords him a remedy because of an “express or implied contract with the United States” agreed to by the parties. Specifically, respondent urges that he became an AAFES employee, or at least entered the EMP, by virtue of an employment contract, not by appointment, and that the AAFES regulations governing dismissal of employees created an implied contract. We must reject both contentions.

A

In determining whether respondent’s employment was the result of appointment or contract, we look to United States v. Hopkins, 427 U. S. 123 (1976), a wrongful-discharge action brought by an AAFES employee who alleged that his separation from the Service constituted a breach of an employment contract. The Court in its per curiam opinion in Hopkins noted that Tucker Act jurisdiction may be premised on an employment contract, as well as on one for goods or other services, id., at 126, and that the AAFES regulations authorize the Service to enter into service contracts. Id., at 127-128. But the Court also observed that many AAFES employees are appointed to their positions, and it remanded the case for consideration of the question whether the plaintiff had been employed by contract or by appointment, a determination dependent upon “an analysis of the statutes and regulations previously described in light of whatever evidence is adduced on remand as to plaintiff’s particular status in this case.” Id., at 130.

Although respondent alleges that he was employed, both initially and upon entering the EMP, by express employment contracts, he points to nothing in the record or in the relevant AAFES regulations that substantiates that claim. In fact, his complaint supports the contrary view. The complaint observes that respondent was first “employed” by the AAFES in 1962, App. 3; the regulations pertaining to “employees” refer to Service personnel as “Federal employees of an instrumentality of the United States” who are appointed to their positions. AR 60-21/AFR 147-15, ch. 1, § I, ¶ 1—6(a); ch. 2, § I, ¶¶ 2-2, 2-3 (1 Aug. 1979). Moreover, if, as respondent alleges, he was “employed” in a data processing position, AAFES regulations prohibit the Service from negotiating a contract with him. See AR 60-20/AFR 147-14, ch. 3, § III, ¶ 3-26(d) (15 Nov. 1978).

Respondent’s selection to the EMP plainly was pursuant to appointment. The regulations governing the EMP appear in the provision entitled “Exchange Service Personnel Policies,” AR 60-21/AFR 147-15, ch. 5, § II, rather than in the regulation providing for service contracts, AR 60-20/AFR 147-14, ch. 3, §§ II, III. And, in language that connotes appointment rather than contract, the EMP regulations refer to one’s “nomination, selection, and designation to EMP status,” AR 60-21/AFR 147-15, ch. 5, § II, ¶ 5-8. Furthermore, respondent complains that he was separated from the EMP in violation of discharge procedures described in the regulation applicable to appointed employees, not to those who have contracted with the AAFES to provide services. App. 4-5, 7; see AR 60-21/AFR 147-15, ch. 3.

Despite these clear indications that respondent was appointed to his position, he maintains, citing United States v. Hopkins, supra, that he is entitled to an evidentiary hearing aimed at ascertaining the nature of his employment status. In Hopkins, however, the plaintiff’s complaint alleged that he had been employed pursuant to contract. The Court of Claims did not examine this allegation because it erroneously assumed that AAFES employees could never be appointed. This Court held that the plaintiff’s allegation was sufficient to withstand the Government’s motion to dismiss for want of jurisdiction and remanded the case because “the question of whether plaintiff was employed by virtue of a contract or by appointment is not susceptible of determination at this time.” 427 U. S., at 130. Resolution of the question, the Court noted, depended upon an analysis of the applicable statutes and regulations “in light of whatever evidence is adduced on remand as to plaintiff’s particular status in this case.” Ibid.

Respondent’s complaint, in contrast, does not claim that he was employed pursuant to a contract. In fact, it supports the Government’s view that he was appointed. Even after the AAFES moved in the District Court to dismiss for want of jurisdiction on the ground that respondent had been “an appointed (non-contract) employee,” Memorandum of Points and Authorities in Support of Defendant’s Motion to Dismiss or in the Alternative for Summary Judgment 8, respondent did not seek to amend his complaint and did not allege any facts indicating the existence of an employment contract. See Memorandum of Authorities in Opposition to Defendants’ (sic) Motion to Dismiss or in the Alternative, for Summary Judgment 5-6; see also id., at 1-3 (referring to respondent’s status as an “employee” and to violations of regulations governing AAFES employees). Moreover, as discussed above, all the evidence in the record is to the effect that respondent was appointed to his positions with the AAFES. Under these circumstances, we conclude that a remand on this question would serve no purpose and that respondent will not now be able to adduce evidence, which he has heretofore declined to present, that he was employed — either initially or upon entering the EMP — pursuant to an express employment contract.

B

The Court of Appeals’ decision rests on a different theory — that, whether or not respondent was initially employed by virtue of a contract or by appointment, the AAFES regulations governing separation procedures created an implied-in-fact contract that the Service would adhere to those regulations while respondent continued in AAFES employment. This approach, however, is foreclosed by our prior decisions.

In United States v. Testan, 424 U. S. 392 (1976), the Court concluded, without dissent, that the Tucker Act did not confer jurisdiction over a complaint filed by civil service employees who claimed that they were entitled to reclassification at a higher grade. The Act, the Court observed, “is itself only a jurisdictional statute; it does not create any substantive right enforceable against the United States for money damages.” Id., at 398. Rather, a plaintiff’s “asserted entitlement to money damages depends upon whether any federal statute ‘can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.’” Id., at 400, quoting Eastport S.S. Corp. v. United States, 178 Ct. Cl. 599, 607, 372 F. 2d 1002, 1009 (1967). The Court explicitly rejected the argument that “the violation of any statute or regulation relating to federal employment automatically creates a cause of action against the United States for money damages.” 424 U. S., at 401; see also United States v. Hopkins, 427 U. S., at 130.

As Testan makes clear, jurisdiction over respondent’s complaint cannot be premised on the asserted violation of regulations that do not specifically authorize awards of money damages. Respondent cannot escape the force of Testan by relying on the Court’s observation that the plaintiffs in that case did not “rest their claims upon a contract,” 424 U. S., at 400, and distinguishing this case on the ground that the regulations effected an implied contract. To accept this reasoning would be to undermine the Court’s ruling in Testan that the Tucker Act provides a remedy only where damages claims against the United States have been authorized explicitly. Admittedly, the Testan plaintiffs did not assert the existence of an employment contract, but neither did respondent until very late in the litigation. And if employment statutes and regulations create an implied-in-fact contract, surely the Court would have so noted in Testan instead of directing that the complaint be dismissed. See id., at 408. Moreover, the plaintiff in Hopkins did claim that he had been employed pursuant to a contract; the Court’s remand for consideration of the plaintiff’s status as an appointed or contract employee, despite a claim that his discharge contravened applicable regulations, clearly suggests that employment regulations do not automatically give rise to an implied-in-fact contract.

In addition to mandating different results in Testan and Hopkins, the Court of Appeals’ approach would “rende[r] superfluous” “many of the federal statutes — such as the Back Pay Act — that expressly provide money damages as a remedy against the United States in carefully limited circumstances.” United States v. Testan, 424 U. S., at 404. The Back Pay Act, which permits an employee to recover lost wages due to “an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part” of the compensation to which he was otherwise entitled, 5 U. S. C. § 5596(b)(1) (1976 ed., Supp. IV), expressly denies that cause of action to AAFES personnel. See 5 U. S. C. § 2105(c)(1) (1976 ed., Supp. IV). Congress’ intent to prohibit a backpay claim by a Service employee would obviously be subverted if the employee could sue under the Tucker Act whenever he asserted a violation of the Service’s regulations governing termination. And the impact of the Court of Appeals’ decision would not be limited to such circumstances: as counsel for respondent appeared to concede at oral argument, the Court of Appeals’ reasoning would extend Tucker Act jurisdiction to reach any complaint filed by a federal employee alleging the violation of a personnel statute or regulation. Tr. of Oral Arg. 20-21.

We therefore conclude that Testan is controlling, and we hold that the Court of Appeals erred in implying a contract based solely on the existence of AAFES personnel regulations and in premising Tucker Act jurisdiction on those regulations, which do not explicitly authorize damages awards. Because the court’s judgment may not be sustained on the ground that respondent was hired pursuant to an express employment contract, we find that the Tucker Act did not confer jurisdiction over respondent’s claims for monetary relief.

The judgment of the Court of Appeals is therefore reversed.

It is so ordered.

The Chief Justice concurs in the judgment.

       AAFES is a nonappropriated fund instrumentality of the United States, that is, one that does not receive funds by congressional appropriation. See 10 U. S. C. §§ 4779(c) and 9779(c). AAFES is under the control of the Secretaries of the Army and Air Force and, like other military post exchanges, is intended “to provide convenient and reliable sources where soldiers can obtain their ordinary needs at the lowest possible prices.” Standard Oil Co. v. Johnson, 316 U. S. 481, 484-485 (1942).

       The regulations cited are those currently in effect. They differ in no material respect from the regulations that were outstanding and applicable while respondent was employed by the AAFES.

       Reasoning that § 1346(a)(2) does not confer federal jurisdiction to award nonmonetary relief, the Court of Appeals looked to the general federal-question jurisdictional provision, 28 U. S. C. § 1331(a), to support its finding of jurisdiction over respondent’s request for reinstatement. Although the court concluded that § 1331(a) does not constitute a waiver of sovereign immunity, it interpreted the 1976 amendment to § 10 of the Administrative Procedure Act, 5 U. S. C. § 702, as effecting a waiver for actions against federal agencies, where the agency conduct is otherwise subject to judicial review. 619 F. 2d, at 1138-1140. Given its determination that the District Court could provide respondent both monetary and nonmonetary relief under alternative statutes, the Court of Appeals held, finally, that the District Court did not have jurisdiction over respondent’s complaint pursuant to the mandamus statute, 28 U. S. C. § 1361. 619 F. 2d, at 1140-1141. Neither side seeks review of those rulings here.

         The last sentence of § 1346(a)(2) was added in 1970 by Pub. L. 91-350, 84 Stat. 449, following this Court’s decision some years before in Standard Oil Co. v. Johnson, 316 U. S. 481 (1942). Relying on the Court’s observation in that case that the “Government assumes none of the financial obligations” of military post exchanges, id., at 485, the Court of Claims, in a series of decisions, had held that it could not entertain contract claims against nonappropriated fund instrumentalities. See United States v. Hopkins, 427 U. S. 123, 125 (1976). In 1970, Congress sought to close this “loophole” by expressly affording contractors a Tucker Act remedy against such instrumentalities. See id., at 126; S. Rep. No. 91-268, p. 2 (1969); H. R. Rep. No. 91-933, p. 2 (1970).

       Section 1346(a)(2) gives the district courts concurrent jurisdiction with the Court of Claims over all civil actions or claims seeking damages of $10,000 or less. The Court of Claims has sole jurisdiction under the Tucker Act, however, for claims greater than $10,000. See 28 U. S. C. § 1491 (1976 ed., Supp. IV). Both jurisdictional provisions are otherwise identical. See Richardson v. Morris, 409 U. S. 464, 466 (1973); United States v. Sherwood, 312 U. S. 584, 590-591 (1941).

       The AAFES regulations define “service contract” as follows:
      “A contract whereby a contractor performs a service for AAFES off a military installation, such as laundry, drycleaning, photo processing, and repair service. This type contract may also include procurement of direct services such as janitorial and window cleaning service.” AR 60-20/AFR 147-14, App. A, ¶ A-8(e) (15 Nov. 1978).

       Respondent points to the portion of the EMP regulations providing that an EMP employee must have “acknowledged in writing that he understands and accepts the conditions of the EMP as prescribed by the Commander, AAFES.” AR 60-21/AFR 147-15, ch. 5, § II, ¶ 5-7(b). An employee’s acknowledgment and acceptance of the conditions of his employment, however, hardly demonstrate that he is employed pursuant to a contract; surely, an employer could require a nominee to acknowledge and accept the conditions of his appointment.

       We are advised that Hopkins’ suit was settled on the remand, and that no further inquiry was made into his employment status. See Brief for Petitioner 16, n. 9; Brief for Respondent 14; Tr. of Oral Arg. 28.

       Respondent did seek to amend his complaint, however, following the Court of Appeals’ decision that the AAFES discharge regulations created an implied-in-fact contract between the parties. The amended complaint alleges that a contract was executed when respondent signed an acknowledgment of the conditions of the EMP, includes a breach-of-contract count, and refers repeatedly to the “employment agreement.” First Amended Complaint 2, 6-7.

       Claims grounded on implied-in-fact contracts may be brought under the Tucker Act, but the Act does not confer jurisdiction with respect to contracts implied in law. See Hatzlachh Supply Co. v. United States, 444 U. S. 460, 465, n. 5 (1980).

       Like Testan, this case does not involve a suit “for money improperly exacted or retained” or a claim based on a regulation that promises money. 424 U. S., at 401, 402. This case is therefore distinguishable from those cited by respondent where contracts were inferred from regulations promising payment. See Griffin v. United States, 215 Ct. Cl. 710, 714-715 (1978); New York Airways, Inc. v. United States, 177 Ct. Cl. 800, 816-817, 369 F. 2d 743, 751-752 (1966); Radium Mines, Inc. v. United States, 139 Ct. Cl. 144, 147-148, 153 F. Supp. 403, 405-406 (1957); Aycock-Lindsey Corp. v. United States, 171 F. 2d 518, 521 (CA5 1948); Augusta Aviation, Inc. v. United States, 500 F. Supp. 785, 786-787 (SD Ga. 1980), rev’d, 671 F. 2d 445 (CA11 1982). Because respondent has not demonstrated that the parties entered into an express contract, this case is also different from those where regulations were considered an implied part of an express contract. See Bodek v. Department of Treasury, Bureau of Public Debt, 532 F. 2d 277, 279, n. 7 (CA2), cert. denied, 429 U. S. 849 (1976); Wolak v. United States, 366 F. Supp. 1106, 1110 (Conn. 1973); Spicer v. United States, 217 F. Supp. 44, 50 (Kan. 1963), aff’d, 332 F. 2d 750 (CA10 1964).

       The Court’s observation in Testan that the case was “not one concerning a wrongful discharge or a wrongful suspension,” 424 U. S., at 402, does not indicate, as respondent urges, that any termination or suspension suit may be brought under the Tucker Act. In Hopkins, the Court relied on Testan in disposing, summarily and adversely, of the contention that “plaintiff’s discharge in violation of executive regulations constituted a claim enforceable under the Tucker Act.” 427 U. S., at 130.