as an unconsented suit against the sovereign. Hence it is commonly said that suits against the government for more than $ 10,000 are in the exclusive jurisdiction of the Court of Claims . . . . In fact, the jurisdiction of the Court of Claims is not exclusive; rather, there is rarely any statute available that waives sovereign immunity for suits in the district court, other than the Tucker Act with its $ 10,000 limit."
Id. (quoting Ghent v. Lynn, 392 F. Supp. at 881 (citations omitted)) (emphasis in Sanders), See also Bowen v. Massachusetts, 487 U.S. 879, 910, 101 L. Ed. 2d 749, 108 S. Ct. 2722 n.48 (1988) (Claims Court jurisdiction is exclusive "only to the extent that Congress has not granted any other court authority to hear the claims that may be decided by the Claims Court."); Western Sec. Co. v. Derwinski, 937 F.2d 1276, 1279 (7th Cir. 1991) (same). Thus, a district court's first inquiry is not to determine the source of the funds sought by plaintiff, see supra, but to determine whether statutes outside the Tucker Act can provide plaintiff with an independent grant of subject matter jurisdiction and a waiver of sovereign immunity. Sanders, 903 F.2d at 117. This court will now undertake that inquiry.
Plaintiff seeks subject matter jurisdiction under 28 U.S.C. § 1331, which states: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, law, or treaties of the United States." It claims that this action arises under 42 U.S.C. § 1437f, pursuant to which the HAP contract was formed, and federal common law. The court agrees. "Suits to enforce contracts with federal agencies are governed by federal common law . . . and as a result arise under federal law for purposes of section 1331." Derwinski, 937 F.2d at 1280 (citations omitted). See FHM Constructors, 779 F. Supp. at 680-81 (finding subject matter jurisdiction under § 1437 and other statutes).
Accordingly, the court concludes that it has subject matter jurisdiction over this suit.
That brings me to the question whether HUD has consented to suit in the district court. Plaintiff relies on 42 U.S.C. § 1404a, which states in part: "The Secretary of Housing and Urban Development may sue and be sued only with respect to its functions under the United States Rousing Act of 1937, as amended [ 42 U.S.C.A. § 1437 et seq.]. . . ." (emphasis added). There is little doubt that plaintiff's suit, which is based on its HAP contract with ID, is a suit "with respect to [HUD's] functions under" 42 U.S.C. § 1437 et seq. Accordingly, the court holds that § 1404a provides a waiver of sovereign immunity permitting plaintiff's suit against HUD in this court. At least two courts have drawn an identical conclusion based on § 1404a. FHM Constructors, 779 F. Supp. at 681-82; Lattimore, 1992 WL 118383.
The above holdings do not, however, end the court's analysis. In fact, they merely bring the court to the juncture that distinguishes the Second Circuit's analysis in Sanders from that of most other circuits in the country. In Sanders, the court asked first whether jurisdiction existed. Having concluded that it did, it reversed the district court's contrary conclusion and remanded for a determination on the merits. Sanders, 903 F.2d at 120. The Sanders' court then added this critical instruction on remand:
If the court determines that HUD is liable for the arbitration award, it need not engage in a further analysis of the source of the funds that would be used to satisfy its judgment--i.e., from general Treasury funds or funds within the discretion and control of the Secretary. The court should simply direct the Secretary to satisfy the judgment out of funds that are within his control, assuming, of course, that such funds exist. It is only as to such funds that the Secretary's immunity has been waived. See F.H.A. v. Burr, 309 U.S. 242, 250-51, 84 L. Ed. 724, 60 S. Ct. 488 (1940); Silberblatt, supra, 608 F.2d at 36.
Sanders, 903 F.2d at 120. See also Far West Fed. Bank v. Director, Office of Thrift Supervision, 930 F.2d 883, 890 (Fed. Cir. 1991); Ensign Fin. Corp. v. Federal Deposit Ins. Corp., 785 F. Supp. 391, 401 (S.D.N.Y. 1992); FHM Constructors, 779 F. Supp. at 681. Thus, under Sanders, a district court deciding whether jurisdiction exists need never determine the source of funds sought to be recovered by plaintiff in its action; whereas, in most other circuits, this is the first question that is asked. See, e.g., Amoco Prod. Co., 815 F.2d at 359; Weeks Constr., Inc., 797 F.2d at 675 & n.9; Portsmouth Redevelopment & Hous. Auth., 706 F.2d at 473.
This difference is critical to a determination whether a claim may be brought in district court, or must be brought in the Claims Court. If a court first asks--where are the funds to satisfy judgment likely to come from, the agency or the federal treasury?--and decides the answer is the latter source, then the suit is considered to be against the United States and must be transferred to the Claims Court, because no independent waiver of sovereign immunity exists, outside the Tucker Act, for claims against the United States. This is the approach taken by the circuits cited at the beginning of this discussion. See e.g., Amoco Prod. Co., 815 F.2d at 359; Weeks Constr., Inc., 797 F.2d at 675 & n.9; Portsmouth Redevelopment & Hous. Auth., 706 F.2d at 473.
In Sanders, on the other hand, the Second Circuit proceeded on the assumption that the suit was against the Secretary of HUD, not against the United States, and asked whether HUD had waived its sovereign immunity. The court concluded that HUD had waived its immunity, and thus held that jurisdiction was proper in the district court. Sanders, 903 F.2d at 119-20. The court, however, then noted that the scope of HUD's waiver of immunity was limited by the extent to which the Secretary could satisfy a judgment "out of funds that are within his control, assuming, of course, that such funds exist. " Id. at 120 (emphasis added). See also Silberblatt, 608 F.2d at 36 ("For a claim to be against the Secretary, and therefore within the scope of the 'sue and be sued clause,' as opposed to a suit against the United States, any judgment for plaintiff must be out of funds in the control of the Secretary as distinguished from general Treasury funds."). If HUD has no funds "severed from Treasury funds and Treasury control," F.H.A. v. Burr, 309 U.S. at 250, plaintiff will simply be unable to collect, even if, ultimately, it is successful in winning a judgment against HUD. C.H. Sanders Co., Inc. v. BHAP Hous. Dev. Co., 910 F.2d 33, 33 (2d Cir. 1990); Far West Fed. Bank, 930 F.2d at 890; Ensign Fin. Corp., 785 F. Supp. at 401 n.5.
The distinction offered by Sanders also disposes of language in § 1346(a)(2) which divests jurisdiction from a district court for "any civil action or claim against the United States founded upon any express or implied contract with the United States . . . ." 28 U.S.C. § 1346(a)(2). See Chemung County v. Dole, 781 F.2d 963, 967 (2d Cir. 1986) ("The Contract Disputes Act (CDA) of 1978, 41 U.S.C. § 601 et seq. (1982), amended the Tucker Act, 28 U.S.C. § 1491 (1982), and removed district court jurisdiction over actions or claims against the United States, regardless of the amount in controversy, when founded upon an express or implied in fact contract with the federal government."). Here, the suit is against HUD, not the United States. Recovery may be made only against the former entity, not the latter.
For the foregoing reasons, the court holds that it has subject matter jurisdiction, defendant HUD has waived its sovereign immunity, and, pursuant to plantiff's amended complaint, the suit may proceed in this court.
The court will meet with counsel on August 18, 1992, at 9 a.m. to be advised as to what further steps shall be taken in this litigation.
JOHN T. CURTIN
United States District Judge
Dated: August 10, 1992