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KRAMER v. SECRETARY

December 10, 1985

ROSE L. KRAMER, 100% STOCKHOLDER, FINAST METAL PRODUCTS, INC., Plaintiff,
v.
SECRETARY, U.S. DEPARTMENT OF THE ARMY & CHIEF, LEGAL DEPARTMENT OF THE U.S. DEPARTMENT OF THE ARMY, Defendants



The opinion of the court was delivered by: WEXLER

MEMORANDUM AND ORDER

WEXLER, District Judge

 On January 8, 1979, Rose L. Kramer, the 100% stockholder of Finast Metal Products, Inc. (Finast), filed suit against the United States Department of the Army. *fn1" Judge Costantino of this Court granted defendant's motion to dismiss for failure to state a claim, and dismissed Mrs. Kramer's action on July 17, 1979. Mrs. Kramer appealed pro se to the United States Court of Appeals for the Second Circuit.

 The Court of Appeals observed that although plaintiff alleged a range of charges so broad as to encompass a variety of actions, that as far as actions maintainable in federal district court, her complaint boiled down to one for misappropriation of a trade secret. Kramer v. Secretary, 653 F.2d 726, 728, 730 (2d Cir. 1980). The Court of Appeals held that under New York law misappropriation of a trade secret is a tort, and that it is a tort action that can be maintained under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-2680. Kramer v. Secretary, 653 F.2d at 729-30. Accordingly, the Court of Appeals reversed the district court and remanded the case for further proceedings.

 At the same time the Court of Appeals refused to decide the jurisdictional issues of exhaustion of administrative remedies and the statute of limitations, declaring that those questions were for the district court, which had not yet heard or decided them. Id. at 730. It is on these grounds that the government now seeks dismissal or summary judgment in its favor. Rules 12(b), 56(b), Fed.R.Civ.P. Specifically, defendant contends that plaintiff has not met the exhaustion requirement of the FTCA, 28 U.S.C. § 2675(a), and that the claim is also time barred under the FTCA's two year statute of limitations, 28 U.S.C.§ 2401(b). Plaintiff opposes.

 I.

 The Court addresses some of the points raised by Mrs. Kramer in her lengthy and wide-ranging brief in opposition to the government's motion. First, the propriety or legality of the government's termination of its contract with plaintiff is not at issue here. That issue is properly before the United States Claims Court in Mrs. Kramer's breach of contract action. The issues now before this Court are solely those of the exhaustion requirement and statute of limitations under the FTCA.

 Second, the questions of time bar and administrative exhaustion have not been previously litigated or decided by any judge on this bench or the Court of Appeals. Consequently, res judicata and related doctrines are inapplicable. Judge Costantino dismissed this action in 1979 for failure to state a claim and did not address the statute of limitations or exhaustion defenses. The Court of Appeals noted that Judge Costantino had not decided the issues, and also declined to decide them, preferring to first let the district court address them. 653 F.2d at 730. After remand, Judge Costantino reassigned the action to newly-appointed Judge Wexler. No determination of these issues has been made since remand or at any point in this case. That the government waited for years to make its motion does not waive the defenses. Accordingly, plaintiff's res judicata argument fails.

 Third, Mrs. Kramer mistakenly believes she has a claim before this Court under 42 U.S.C. § 1983 in the form of a "tort of denial of due process." One cannot sue the United States government, its agencies, or its agents under 42 U.S.C. § 1983. Section 1983 creates a cause of action against persons, or other entities, who violate one's constitutional rights "under color of state law." The federal government does not act under color of state law. One seeks redress for violation of the right to due process by the federal government under the Fifth Amendment to the United States Constitution. Nevertheless, Mrs. Kramer has not made out any factual basis for denial of due process. In fact, she is receiving a great deal of due process before the Armed Services Board of Contract Appeals (ASBCA), the Claims Court, the Second Circuit Court of Appeals, and this Court. That she may not agree with the results does not mean that she has not had due process. Equally so, not every wrong perpetrated by the federal government amounts to a constitutional issue. Even if a court were to find that the government breached its contract with Mrs. Kramer or misappropriated her trade secrets, it would not give rise to a cause of action for denial of due process or violation of civil rights.

 The only cause of action before this Court is one for misappropriation of a trade secret which the Court of Appeals distilled from the complaint. The action for breach of contract is properly before the ASBCA and Claims Court. 653 F.2d at 729. There is no civil rights claim of any sort here.

 II.

 The following chronology of events is not disputed. Plaintiff Rose L. Kramer is the 100% stockholder of Finast. In September 1973 Finast bid on a government contract for manufacture and delivery of 60mm projectiles. Finast expected to manufacture the projectiles from blanks supplied by National Extruded Metal Products Company (NEMPC). In January 1974 Finast learned NEMPC, the only known source of blanks, was going out of business. Mrs. Kramer immediately found an engineer acquaintance who was setting up a foundry and was willing to forge the needed blanks. That company was Canusa Extrusion-Engineering, Inc. (Canusa). When the government asked for the name of the blank supplier, Mrs. Kramer secured an agreement of confidentiality before revealing Canusa's identity. 653 F.2d at 728. Thereafter, Finast was awarded the contract.

 The government terminated the contract with Finast some four months later in October 1974. In January 1975 the government awarded the contract for 60mm projectiles to Stewart-Warner Corporation of Chicago, Illinois. Canusa became Stewart-Warner's supplier of blanks. The gravamen of this suit is that the government violated its confidentiality agreement and revealed Canusa's identity to Stewart-Warner.

 Mrs. Kramer quickly appealed her contract termination, and the ASBCA held a hearing in July 1975. During the hearings there was testimony as to how Canusa and Stewart-Warner became aware of each other in the last quarter of 1974. In January 1976 Mrs. Kramer filed a civil suit in this Court against Canusa and Stewart-Warner alleging among other things that the two companies had conspired together and negotiated with the federal government to take over Finast's contract. *fn2" On January 8, 1979, plaintiff ...


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