Adams v. United States (Federal Circuit Court of Appeals and United States Supreme Court)

This case involves Congress’s attempt to save funds by retroactively altering liability under administrative law for overtime claims by federal employees.  The case involves the overtime claims of about 14,000 non-supervisory federal employees in several federal agencies.  The employees filed administrative claims for their unpaid overtime.  These administrative actions had had a six-year statute of limitations since 1978. The Comptroller General overruled 16 years of administrative law precedent and retroactively applied a two-year statute of limitations to their administrative claims.  In 1994, the employees then successfully lobbied Congress to overrule the administrative retroactivity and recognize their pending administrative overtime claims. In 1995, when it realized that the cost came to approximately $460,000,000, Congress modified the legislation to nullify the 1994 recognition of the employees’ administrative law overtime. The employees then commenced this action against the government for violations of the takings clauses of the Fifth Amendment caused by Congress’s reneging on its 1994 recognition of their first four years of unpaid overtime claims. Ultimately, the lower court denied the takings claims, adopting the government’s argument that the employees’ claims must fail because they are claims for money and money does not constitute property within the Fifth Amendment’s Takings Clause.  In its brief in support of the employees, NELF argued that the overtime claims constitute a “fund of money,” a term of art that includes interest payments and other distinct monetary sums, which the Federal Circuit Court has previously recognized as compensable property.  NELF also argued that permitting the government to negate monetary obligations without the protection of the Takings Clause would be contrary to the historical treatment of monetary obligations as chosen in action, a long recognized form of intangible personal property.  NELF also noted that the government in this case has the same obligations as private employers to pay overtime, which it is seeking to avoid through legislation.  The purpose of the Takings Clause is to keep the government honest by requiring it to pay when it places unfair burdens on a limited number of individuals. By reneging on these employees’ overtime wages, the government places the burden of enriching its general funds on these specific employees, triggering Takings Clause protection. Finally, permitting the government to negate monetary obligations without the protection of the Takings Clause would be poor public policy because the government’s willingness to repay its debts is a major force for social and economic stability. The Court of Appeals disagreed with NELF's arguments and affirmed the decision of the court below, 391 F.3d 1212 (Fed. Cir. 2005). NELF made similar arguments in support of the employees' petition for certiorari. The petition for certiorari to the United Sates Supreme Court is pending.