Julie Chattler v. United States and Department of State

United States Court of Appeals
for the Federal Circuit
__________________________
JULIE CHATTLER,
Plaintiff-Appellant,
v.
UNITED STATES AND DEPARTMENT OF STATE,
Defendants-Appellees.
__________________________
2010-1066
__________________________
Appeal from the United States District Court for the
Northern District of California in case no. 07-CV-04040,
Judge Maxine M. Chesney.
__________________________
Decided: January 10, 2011
__________________________
WALTER H. SARGENT, Walter H. Sargent, P.C., of Colo-
rado Springs, Colorado, argued for plaintiff-appellant. On
the brief were ROBERT B. CAREY, Hagens Berman Sobol
Shapiro LLP of Phoenix, Arizona; S HANA E. SCARLETT, of
Berkeley, California; and MEGAN E. WAPLES , The Carey
Law Firm, of Colorado Springs, Colorado.
M ICHAEL P. ABATE , Trial Attorney, Appellate Staff,
Civil Division, United States Department of Justice, of
Washington, DC, argued for defendants-appellees. With

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CHATTLER v. US 2
him on the brief were TONY WEST, Assistant Attorney
General, and M ICHAEL S. RAAB , Attorney.
__________________________
Before NEWMAN , LINN , and DYK , Circuit Judges.
Opinion for the court filed by Circuit Judge LINN .
Dissenting opinion filed by Circuit Judge NEWMAN .
LINN , Circuit Judge.
Julie Chattler (“Chattler”) appeals the grant of judg-
ment on the pleadings by the United States District Court
for the Northern District of California in favor of defen-
dants, United States and Department of State (collec-
tively, “government” or “Department”), that no implied
contract was formed between the government and Chat-
tler for expedited processing of her passport application in
exchange for a $60 expedite fee. Chattler v. United States,
No. 07-CV-04040 (N.D. Cal. June 5, 2008) (“Contract
Opinion”). Chattler also appeals the grant of summary
judgment in favor of the government that it did not vio-
late 22 C.F.R. § 51.63 (2007)1 in failing to automatically
refund Chattler’s expedite fee. Chattler v. United States,
No. 07-CV-04040 (N.D. Cal. July 10, 2009) (“Summary
Judgment”). Because the district court did not err in
determining that no contract was formed and that no
automatic refund was due, this court affirms.
BACKGROUND
After the events of September 11, Congress enacted
the Intelligence Reform and Terrorism Prevention Act of
2004, Pub. L. No. 108-458, 118 Stat. 3638 (Dec. 17, 2004).
Section 7209(b)(1) of that Act required the State Depart-
1 All citations to 22 C.F.R. §§ 51.63 and 51.66
are to the Regulations in force in 2007.

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CHATTLER v. US 3
ment and the Department of Homeland Security to de-
velop a plan requiring anyone entering into the United
States, including those entering from Canada, Mexico,
and the Caribbean, to present a valid passport. The State
Department issued the Western Hemisphere Travel
Initiative implementing this policy. These developments
greatly increased the demand for passports. In an at-
tempt to accommodate persons with urgent needs for
passports in the face of this demand, the State Depart-
ment established a program for expedited processing of
certain passports, to be funded by expedite fees. The
availability of this service was posted on the State De-
partment’s website and set forth in the passport applica-
tion form.
Chattler applied for a passport on June 11, 2007. The
passport application form she completed included provi-
sion 5(b) relating to expedited processing and stating:
“Expedited requests will be processed in three workdays
from receipt at a passport agency. The additional fee for
expedited services is $60.” Decl. of Ann Barrett in Supp.
of Def.’s Mot. to Dismiss 16, Chattler v. United States, No.
07-CV-04040 (filed Oct. 9, 2007), ECF No. 10-2 (“Barrett
Decl.”). Chattler paid the additional fee. The passport
agency received her application along with the expedite
fee on June 19, 2007, but by August 1, 2007, Chattler had
not yet received her passport. Chattler submitted a
second request in person, and received her passport in
time to fulfill her travel plans. It is undisputed that
Chattler’s first expedite request was not processed within
three days, and that she is entitled to a refund of her
expedite fee. Rather than requesting a refund of the fee,
and in response to the government’s failure to make good
on its expedited service program, Chattler initiated legal
action.

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CHATTLER v. US 4
Specifically, Chattler2 brought an action in district
court asserting a Little Tucker Act claim under 28 U.S.C.
§ 1346(a)(2) for breach of contract. She asserted that
provision 5(b) of the passport application was an offer,
which she accepted by paying the $60 expedite fee, and
that the government breached the resulting contract by
failing to process her passport within three days. She
also asserted that the government made a second offer on
the Department of State’s website that she would receive
her completed passport “in about 3 Weeks.” She con-
tended that this offer, too, was accepted by paying the $60
expedite fee, and that the contract was breached by
failure to deliver her passport within three weeks. Chat-
tler also brought a regulatory claim alleging that the
government had violated 22 C.F.R. § 51.63 in failing to
refund her expedite fee automatically and without a
request on her part, when her passport application did
not receive expedited processing. In her complaint, Chat-
tler originally asked for “all consequential and special
damages . . . not to exceed $10,000 for any individual”
based on both her contract theory and the asserted regu-
latory violation, but later explicitly waived any right to
damages over $60. Reply Br. of Pl.-Appellant 19 (regula-
tory claim), 20-21 (contract claims).
2 Chattler styled her complaint as a “class ac-
tion pursuant to Federal Rule [sic] of Civil Procedure
23(a) and 23(b)(2) and 23(b)(3) on behalf of herself and all
others similarly situated, who paid an extra fee to secure
expedited processing of their passports and whose pass-
ports were not processed within the required three-day
period or were not delivered within the promised time.”
Compl. 1, Chattler v. United States, No. 07-CV-04040
(filed Aug. 7, 2007), ECF No. 1. However, it does not
appear that there was a motion to certify this case as a
class action, and the case has not, in fact, been certified.
Consequently, we do not treat this case as a class action.

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CHATTLER v. US 5
The government answered by denying Chattler’s
claims and indicated its willingness to refund the $60 fee
on request. Chattler refused to make such a request or to
have her complaint treated as a constructive request,
presumably to avoid rendering her claims moot. The
government moved for judgment on the pleadings on
Chattler’s contract claims and for summary judgment on
the regulatory claim. The district court granted both
motions and Chattler appealed.
The district court had jurisdiction under 28 U.S.C. §
1346(a)(2), and this court has jurisdiction under 28 U.S.C.
§ 1295(a)(2).
D ISCUSSION
I. Regulatory Claims
At the time Chattler filed her application, section
51.63(c) of Title 22 of the Code of Federal Regulations
stated: “The passport expedite fee will be refunded if the
Passport Agency does not provide the requested expedite
processing as defined in § 51.66.” Section 51.66(b) defined
expedited processing as “completing processing within 3-
business days commencing when the application reaches
a Passport Agency . . . . The processing will be considered
completed when the passport is ready to be picked up by
the applicant or is mailed to the applicant.” The govern-
ment concedes that Chattler is entitled to a refund of her
$60 expedite fee because the government failed to process
her application within three business days. The issue is
whether Section 51.63 unambiguously requires that the
government automatically provide a refund, or whether
the government can, consistent with the regulations,
require an applicant to make a refund request before it is
obliged to issue the refund.

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CHATTLER v. US 6
We review a grant of summary judgment under the
law of the regional circuit. Serdarevic v. Advanced Med.
Optics, Inc., 532 F.3d 1352, 1362 (Fed. Cir. 2008). The
Ninth Circuit reviews the grant of summary judgment de
novo, “determining whether, viewing all evidence in the
light most favorable to the nonmoving party, there are
genuine issues of material fact and whether the district
court correctly applied the relevant substantive law.”
Kraus v. Presidio Trust Facilities Div., 572 F.3d 1039,
1043-44 (9th Cir. 2009).
We defer to the agency’s interpretation of its own
regulation unless it is “plainly erroneous or inconsistent
with the regulation.” Bowles v. Seminole Rock & Sand
Co., 325 U.S. 410, 414 (1945) (“Seminole Rock”). The
agency “interpretation need not be the best or most natu-
ral one by grammatical or other standards.” Pauley v.
Bethenergy Mines, Inc., 501 U.S. 680, 702 (1991).
The Department of State interprets Section 51.63 as
requiring a request before a refund is issued. A statement
on the Department of State’s website first published on
June 14, 2007 states: “Travelers who: A) Paid the $60 fee
for expedited service and B) Have reason to believe that
they did not receive expedited service should contact the
Department of State to request that the Department
consider a refund of the expedite fee. Customers should
submit a written request with their passport number, if
available, name, date and place of birth, and approximate
date(s) they applied for their passport and received their
passport (if applicable). Mailing address and phone
number should also be included.” Decl. of Florence Fultz
In Supp. Of Def.’s Mot. For Summ. J., Fultz Ex. 14 p. 5,
Chattler v. United States, No. 07-CV-04040 (filed January
30, 2009), ECF No. 111-8 (emphases added). See also Refund
of Expedite Passport Fees, Travel.State.Gov Policy and Announcements,
http://www.travel.state.gov/passport/ppi/refund/refund_3259.html (last

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CHATTLER v. US 7
visited Oct. 27, 2010) (similar statement in current iteration). The
government has represented in its brief and at oral argu-
ment that its long-standing practice has been to require a
request from the applicant before a refund is issued. Br.
of Def.-Appellees 6, 23 (“There is not and has never been
an automated process for identifying which applicants
received the expedite processing within the meaning of
the regulation. Instead, the Department reasonably relies
upon refund requests by unsatisfied applicants to trigger
the [refund] process.”); Oral Arg. 20:55-21:08, 24:30-24:55, avail-
able at http://oralarguments.cafc.uscourts.gov/mp3/2010-1066.mp3
(“[T]he department’s view is that has been its practice [to
require a request] consistently and historically all the way
along.”).
Chattler argues that this interpretation is contra-
dicted by the preamble of the Federal Register Notice
implementing the expedited processing rules: “There will
be situations in which expedited passport processing
cannot be completed within three days. . . . In such
circumstances, the applicant will be notified and the fee
will be refunded.” 59 Fed. Reg. 48,998, 48,999 (Sept. 26,
1994). Chattler’s argument is inapposite. The phrase
“the fee will be refunded” in the preamble sheds no light
on the meaning of the phrase, “[t]he passport expedite fee
will be refunded” in Section 51.63; as discussed below,
“will” does not imply “will automatically.” To the extent
that the preamble suggests that the Department is re-
sponsible for initiating the refund process by notifying the
applicant of the Department’s failure to process her
expedite request within the specified time frames, Chat-
tler has not argued that she failed to receive such notice.
Thus, the preamble does not serve to undermine the
Department’s interpretation of Section 51.63 as requiring
a refund request.

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CHATTLER v. US 8
Chattler next argues that the Department’s interpre-
tation is “plainly erroneous or inconsistent with the
regulation.” See Seminole Rock, 325 U.S. at 414. Chat-
tler argues that the word “will” unambiguously compels
the government to issue a refund automatically to all
passport applicants who requested but failed to receive
expedited processing, without regard to whether a request
was made. The government argues that “will” does not
prescribe the procedure or process by which the refund
will be granted, and that the Department of State’s re-
quirement of a refund request as a condition to the issu-
ance of a refund is consistent with the regulation. The
government’s analogy helps to illustrate this point. A
retail policy could read: “The difference in purchase price
will be refunded if another store advertises this product
for less.” The most natural reading of “will be refunded”
does not presuppose an automatic procedure for adminis-
tering the refund. Instead, it is wholly consistent with a
policy requiring a customer to make a request for a refund
of the difference. To suggest, as Chattler essentially
argues, that these procedural requirements are inconsis-
tent with the word “will” simply because an applicant may
not take the necessary steps to collect a refund is contrary
to the plain meaning and ordinary usage of the word.
This court again agrees with the government. In the
context of Section 51.63, the word “will” simply describes
future action, but does not preclude the imposition of
conditions before such action is due. The possibility that
a request may not be made by an applicant, and as a
consequence, a refund may not be issued, does not make
the withholding of refunds arbitrary. Nor is such gov-
ernment action discretionary; if a request is made (and
the applicant is entitled to a refund) the government
concedes that a refund must and will be issued. The
agency’s interpretation is consistent with the language of

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CHATTLER v. US 9
Section 51.63 and is not “plainly erroneous or inconsistent
with the regulation.” See Seminole Rock, 325 U.S. at 414.
Thousands of refunds have issued to applicants who
initiated the refund process by submitting a refund re-
quest. Chattler argues that only a relatively small per-
centage of applicants who were entitled to a refund for the
Department’s failure to expedite actually received the
refund, and that the refund request requirement is simply
a means for the Department to retain undeserved funds.
The government responds that the statistics underreport
the true percentages, and that the refund request re-
quirement is necessary to ensure that refunds are re-
ceived by the proper parties. Even if we accept the factual
validity of Chattler’s statistics, the failure of some parties
to request a refund may be due to any number of reasons,
and the government’s retention of unrequested refunds
does not compel the conclusion that the Department
imposed the refund request requirement as a means of
improperly retaining the fees rather than as a reasonable
way of assuring that refunds are made to the proper
parties.
For the foregoing reasons, this court holds that the
phrase, “will be refunded” in Section 51.63(c) of the Code
of Federal Regulations Title 22 does not imply “will be
refunded without further action by the applicant,” and
does not require the government to issue an automatic
refund without a request by the applicant. We thus
affirm the district court’s grant of the government’s
summary judgment motion on Chattler’s regulatory
claim.
II. Contract Claims
We review a grant of judgment on the pleadings under
the law of the regional circuit. Imation Corp. v. Koninkli-
jke Philips Elecs. N.V., 586 F.3d 980, 984 (Fed. Cir. 2009).

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CHATTLER v. US 10
The Ninth Circuit reviews the grant of judgment on the
pleadings de novo. Compton Unified School Dist. v.
Addison, 598 F.3d 1181, 1185 (9th Cir. 2010). “A judg-
ment on the pleadings is proper if, taking all of [the
plaintiff’s] allegations in its pleadings as true, [the defen-
dant] is entitled to judgment as a matter of law.” Id.
Because there are no facts in dispute, the question of
whether a contract was formed is a question of law.
Trauma Serv. Group v. United States, 104 F.3d 1321,
1325 (Fed. Cir. 1997).
The government is subject to suit only if it has waived
sovereign immunity. United States v. Testan, 424 U.S.
392, 399 (1976). A waiver “cannot be implied but must be
unequivocally expressed.” Id. (internal quotation omit-
ted). The Tucker Act provides a waiver of sovereign
immunity for “any claim against the United States
founded either upon the Constitution, or any Act of Con-
gress or any regulation of an executive department, or
upon any express or implied contract with the United
States.” 28 U.S.C. § 1491 (emphasis added). An express
contract with the government requires proof of “mutual
intent to contract, including an offer, an acceptance, and
consideration. A contract with the United States also
requires that the Government representative who entered
or ratified the agreement had actual authority to bind the
United States.” Trauma Serv. Group, 104 F.3d at 1325
(internal citations omitted).
In the present case, the district court dismissed Chat-
tler’s contract claims “for the reasons stated by defen-
dants in their papers and at the hearing conducted May
23, 2008.” Contract Opinion at 1, 3. This court agrees
that no contract was formed by the timing provision in the
passport application or by the statements on the Depart-
ment’s website.

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CHATTLER v. US 11
A. Passport Application Provision 5(b)
Chattler argues that provision 5(b) in the passport
application and a statement on the Department of State
website formed the basis of an express contract to process
the application within three days and return it to Chat-
tler within about two weeks. Provision 5(b) in the pass-
port application reads: “For faster processing, you may
request expedited service. Expedited requests will be
processed in three workdays from receipt at a passport
agency. The additional fee for expedited service is $60.”
Barrett Decl. 16.
Passport application provision 5(b) was not an offer.
“An offer is the manifestation of willingness to enter into
a bargain, so made as to justify another person in under-
standing that his assent to that bargain is invited and
will conclude it.” Cutler-Hammer, Inc. v. United States,
441 F.2d 1179, 1183 (Ct. Cl. 1971) (citing Restatement
(Second) of Contracts § 24 (Tentative Draft No. 1) (1964)).
Provision 5(b) was not a manifestation of willingness to
enter into a bargain for at least four reasons.
First, provision 5(b) categorizes the applicant’s initia-
tion of the expedite procedure as a “request,” Barrett Decl.
16 (“For faster processing, you may request expedited
service.”), which belies any obligatory intent, see Cutler-
Hammer, 441 F.2d at 1179 (“[N]owhere is there a promise
on the part of the Government to sell even one ounce of
silver at the price mentioned. Purchasers are simply
invited to make ‘application’ to buy certain quantities of
silver at a price which will be not less than $ 1.29+.”).
Second, “[t]he obligation of the government, if it is to
be held liable, must be stated in the form of an undertak-
ing, not as a mere prediction or statement of opinion or
intention.” Id. at 1182. Likewise statements of informa-
tion or definition are not statements of obligation. The

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CHATTLER v. US 12
expedite provision in the passport application was in-
cluded in furtherance of a regulatory scheme that (1)
allowed applicants to “request expedited processing by a
Passport Agency,” 22 C.F.R. § 51.66(a); (2) defined expe-
dited processing, “[e]xpedited passport processing shall
mean completing processing within 3- business days . . . ,”
22 C.F.R. § 51.66(b); and (3) called for a fee to be collected
“in the amount prescribed in the Schedule of Fees for
Consular Services,” 22 C.F.R. § 51.66(c). Provision 5(b)
substantially mirrors the informational content of the
regulation: (1) it authorizes expedited processing (“For
faster processing, you may request expedited service”);
(2) defines expedited processing (“Expedited requests will
be processed in three workdays from receipt at a passport
agency”); and (3) notes the fee from the Schedule of Fees
for Consular Services (“The additional fee for expedited
service is $60”). Barrett Decl. 16. The use of language
that simply restates obligations created by a regulation
evinces that the government “never intended the lan-
guage [] to be more than a mere expression of intention,
as opposed to words of commitment.” Floyd v. United
States, 26 Cl. Ct. 889, 891 (1992), aff’d on other grounds
996 F.2d 1237 (Fed. Cir. 1993), cert. denied 510 U.S. 925
(1993). See also Clawson v. United States, 24 Cl. Ct. 366,
370 (1991) (“Where rights and obligations are prescribed
by statute and regulations rather than determined
through the mechanics of a bilateral exchange, there is no
contract in the usual sense of that word.”). The word
“will” is often used in this definitional way, without
creating an underlying obligation. See Merriam-Webster’s
Online Dictionary, http://www.merriam-webster.com/dictionary/will
(last visited July 20, 2010) (defining “will” as “3 –used to
express futurity <tomorrow morning I will wake up in
this first-class hotel suite – Tennessee Williams>”). We
also note the use of the passive voice, i.e. “will be proc-
essed,” makes it less likely that the government intended

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CHATTLER v. US 13
to be bound. Cf. Jones v. United States, 526 U.S. 227, 258
(1999) (Kennedy, J., dissenting) (“In addition, there is
some significance in the use of the active voice in the
main paragraph and the passive voice in clauses (2) and
(3) of § 2119.”). Compare Airborne Data, Inc. v. United
States, 702 F.2d 1350 (Fed. Cir. 1983) (per curiam) (“Con-
tracting officers and other Governmental personnel shall
comply with the terms of the legend.”).
Third, as the relevant regulations confirm, an appli-
cant’s assent to the “offer” would not necessarily conclude
the bargain because the Department may decline to
accept the expedite request under certain conditions. See
22 C.F.R. § 51.66(d) (“A request for expedited processing
normally will be accepted only if the applicant can docu-
ment urgent departure with airline tickets showing
confirmed reservation or similar evidence. The Passport
Agency may decline to accept the request if it is apparent
at the time it is made that the request cannot be
granted.”).
Fourth, the form of provision 5(b) informs the sub-
stance; the single sentence of the provision is a far cry
from the comprehensive instruments that typify govern-
ment contracts under the Federal Acquisition Regulations
and in the express contract cases relied on by Chattler.
The Claims Court confronted a similar assertion of a
contract arising out of a statement in an agency publica-
tion in Girling Health Systems, Inc. v. United States, 22
Cl. Ct. 66 (1990). There, an Internal Revenue Service
(“IRS”) publication included a single sentence that was
alleged to constitute an offer to contract: “You should
generally receive determination on your election within 60
days after you have filed form 2553.” Id. at 68. The court
found that no contract was formed, in part because the
basis for the contract was a simple statement in an IRS
publication, and “there has been no negotiation between

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CHATTLER v. US 14
IRS personnel and the plaintiff and no one from the IRS
has assented to anything.” Id. at 70. This court affirmed
because there, like here, the “language manifest[ed] no
intent to be bound.” Girling Health Sys., Inc. v. United
States, 949 F.2d 1145, 1147 (Fed. Cir. 1991).
Chattler relies on two sets of cases to support her con-
tention that provision 5(b) was an offer. First, she relies
on a group of express contract cases in which the suffi-
ciency of the offer was not in dispute. See Me. Yankee
Atomic Power Co. v. United States, 225 F.3d 1336, 1337-
38 (Fed. Cir. 2000) (resolving whether an administrative
exhaustion provision of a contract covered particular
types of inaction by the government); N. States Power Co.
v. United States, 224 F.3d 1361, 1364 (Fed. Cir. 2000)
(same); Hughes Commc’ns Galaxy v. United States, 998
F.2d 953, 954 (Fed. Cir. 1993) (noting that the govern-
ment was bound by a contract to provide its “best efforts”
to launch commercial payloads through the space shuttle
program, in part because “the government did not chal-
lenge the validity of the contract before the Claims Court
and does not do so here”). Wells Fargo Bank, N.A. v.
United States, 88 F.3d 1012 (Fed. Cir. 1996) is closer, in
that it addressed whether a contract was formed. How-
ever, the issues in that case were whether any govern-
ment official had the authority to contract and whether
certain conditions precedent precluded contract forma-
tion, not whether certain governments statements consti-
tuted offers. No similar issues are presented here.
Because none of these cases addressed whether certain
statements of the government constituted offers, they are
inapposite.
Chattler also relies on a second set of cases, which
found that the government entered into implied-in-fact
contracts to keep proprietary information confidential.
See Airborne Data, 702 F.2d 1350; Research, Analysis, &

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CHATTLER v. US 15
Dev., Inc. v. United States, 8 Cl. Ct. 54 (1985). We do not
believe these cases are dispositive.
Moreover, Chattler has failed to cite, and this court
has been unable to find, a single case where the govern-
ment was held to have contracted to perform a service in
furtherance of a regulatory scheme by virtue of a state-
ment in a form application. In the closest case, Girling,
the Claims Court determined that no contract was
formed, 22 Cl. Ct. at 73, and this court affirmed, 949 F.2d
at 1147. The only cases where the government was bound
in contract to perform a service are those in which the
contract was manifested by an express obligation observ-
ing the formalities of typical government contracts, in-
cluding a signature by an authorized agent. See Me.
Yankee, 225 F.3d at 1337-38; N. States Power, 224 F.3d at
1364; Wells Fargo, 88 F.3d at 1019; Hughes Commc’ns,
998 F.2d at 954.
For these reasons, this court holds that the govern-
ment did not manifest an intent to be bound in contract
by provision 5(b) of the passport application.
B. Statements on the Department’s Website
We turn next to Chattler’s assertion that the state-
ments on the Department’s website were an offer to
contract, wherein the government promised to return her
passport to her within two to three weeks in exchange for
payment of the expedite fee. The relevant statement on
the website includes the following table:

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CHATTLER v. US 16
Barrett Decl. 32. The “**” footnote reads:
**Expedite Service: If you apply for your
passport today and request Expedited
Passport Processing, you can expect to re-
ceive your passport in about 3 weeks. The
3 week estimated timeframe for receipt of
your passport takes into consideration the
additional time it may take to receive your
passport application at a Passport
Agency/Center when you apply for Expe-
dited Passport Processing through a des-
ignated Passport Acceptance Facility and
for the passport to be mailed to you. It
may take longer for customers who apply
for a renewal by mail without “Expedite”
marked on the mailing envelope.
Effective August 16, 2007, the Depart-
ment’s standard for expedited passport
processing completion, as defined in 22
C.F.R. 51.66, is ten business days from . . .
receipt of your passport application at a
Passport Agency/Center . . . . Expedited
passport processing is considered complete
when the passport is ready to be picked by
an applicant or when it is put in the mail
to the applicant.

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CHATTLER v. US 17
Id.
These statements do not constitute an offer to con-
tract. The phrase “We will process your application
within about 3 Weeks” is under the heading of “What to
expect,” and the “**” note explicitly says that an applicant
“can expect to receive [her] passport in about 3 weeks.”
Id. (emphases added). The note also explains that three
weeks is merely an “estimated timeframe.” Id. (emphasis
added). These statements use language of intention or
prediction, not obligation, and thus do not constitute
offers to contract. See Cutler-Hammer, 441 F.2d at 1182
(“The obligation of the government, if it is to be held
liable, must be stated in the form of an undertaking, not
as a mere prediction or statement of opinion or inten-
tion.”).
CONCLUSION
For the foregoing reasons, this court affirms the
judgment of the United States District Court for the
Northern District of California.
AFFIRMED

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United States Court of Appeals
for the Federal Circuit
__________________________
JULIE CHATTLER,
Plaintiff-Appellant,
v.
UNITED STATES AND DEPARTMENT OF STATE,
Defendants-Appellees.
__________________________
2010-1066
__________________________
Appeal from the United States District Court for the
Northern District of California in Case No. 07-CV-4040,
Judge Maxine M. Chesney.
__________________________
NEWMAN , Circuit Judge, dissenting.
Ms. Chattler requested the expedited passport service of
the Department of State, whereby for a fee of $60.00 the
passport will be processed within three business days after
receipt of the request. This expedited processing is offered
on the passport application form; the Regulations define
expedited processing as follows:
22 C.F.R. § 51.66. [Expedited processing is] process-
ing within 3-business days commencing when the
application reaches a Passport Agency or, if the ap-
plication is already with a Passport Agency, com-

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CHATTLER v. US 2
mencing when the request for expedited processing
is approved.
The Regulations state that the fee will be refunded if the
expedited processing is not provided within the three busi-
ness days:
22 C.F.R. § 51.63. The passport expedite fee will be
refunded if the Passport Agency does not provide
the requested expedited processing as defined in
51.66.
In the accompanying Federal Register Notice, the State
Department explained:
59 F.R. 48998. There will be situations in which
expedited passport processing cannot be completed
within three days. . . . The Department expects that
these situations will be very rare. In such circum-
stances, the applicant will be notified and the fee
will be refunded.
Fee for Expedited Passport Processing (Sept. 26, 1994).
Ms. Chattler’s passport was not processed within three
business days, or within the fifteen days that the State
Department allocates to include mail and receipt time. Nor
was the $60.00 expedite fee refunded. Her passport was not
processed for six weeks, requiring her to make a personal
visit to the San Francisco Passport Office, where she ob-
tained the passport a day before her scheduled departure.
The fee was never refunded.
At the argument of this appeal, counsel for the govern-
ment agreed that the $60.00 refund is owed to Ms. Chattler
and has not been paid, and stated that it will not be paid
unless Ms. Chattler writes a letter to the Department of

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CHATTLER v. US 3
State requesting the refund “with particulars.” Both sides
have dug in, Ms. Chattler refusing to write another letter,
the government refusing to refund the $60.00.
The record suggests that more is at stake than petu-
lance. The discovery record shows extensive discussion
within the State Department of its use of these fees for
other purposes, with particular mention of information
technology, for the expedite fees are not required to be
turned over to the Treasury. The amounts are not negligi-
ble. The appellant’s brief contains the following chart:
(Appx. Vol.III:1520, 1561-62, 1568; (Def.’s Counterstatement
of Undisputed Material Facts).1
1 The State Department did not track refunds of the
expedite fee separately from other refunds until June 2007,
and these numbers are explained to include refunds in
addition to refunds of expedite fees (e.g., refunds of passport
fees on a no-fee application). In addition, some expedite
requests were not eligible for a refund because the requester
was not required to pay the fee. (See Vol.III:1561-62, 1568.)

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CHATTLER v. US 4
At $60.00 for each expedite request, the arithmetic is
powerful. The parties dispute whether the adoption of the
procedure requiring a special request “with particulars” was
intended to burden the refund process, or to simplify inter-
nal processing. However, the published Regulation requires
both notice to the applicant and refund to the applicant,
neither of which appears to be routinely given when the
expedited service is not provided.
As the Court explained in Christensen v. Harris County,
529 U.S. 576, 588 (2000), it is inappropriate for “the agency,
under the guise of interpreting a regulation, to create de
facto a new regulation.” This unannounced new “policy”
“effect[ed] a change in existing law or policy [and] affect[ed]
individual rights and obligation,” Paralyzed Veterans of Am.
v. West, 138 F.3d 1434, 1436 (Fed. Cir. 1998), and was
improperly engrafted on the Regulation. The original
intention that the refund would be routinely made if the
expedited service failed, without additional formalities, is
apparent from the Regulation, as Ms. Chattler points out,
citing other regulations that are explicit as to refund re-
quest procedures. E.g., 38 C.F.R. § 21.5064(b)(3)(ii) (De-
partment of Veterans Affairs) (“The Department of Veterans
Affairs shall make the refund only if the individual requests
it.”); 43 C.F.R. § 1823.12(b) (Department of the Interior) (“If
you believe you are due a refund, you may request it from
the BLM office where you previously submitted your pay-
ment.”); 37 C.F.R. § 1.296 (Patent and Trademark Office)
(“The request to withdraw may also include a request for a
refund of any amount paid in excess of the application filing
fee.”); 10 C.F.R. § 205.283(a) (Department of Energy) (“Any
person entitled to a refund pursuant to a final Decision and
Order . . . may file an Application for Refund.”); 14 C.F.R. §
(Def.’s Resp. to Pl.’s First Set of Special Interrogs., Interrog.
No. 8.).

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CHATTLER v. US 5
389.27(b) (Department of Transportation) (“Any person may
file an application for refund of a fee paid since April 28,
1977, on the grounds that such fee exceeded the Board’s cost
in providing the service.”) No such provision exists in the
State Department Regulations for expedited passport proc-
essing.
My colleagues on this panel offer an elaborate analysis
of regulatory and contractual abstraction, but no authority
ratifies the procedure of a government offer of a fee-based
service, where the fee is paid and accepted, the service is
refused, and refund is denied despite the explicit promise of
a refund in the offer.
The court today holds that there is no juridical path by
which Ms. Chattler can obtain review of this government
action concerning her unrefunded fee. That ruling is incor-
rect. The statute under which this action was brought, 28
U.S.C. 1346(a)(2), establishes jurisdiction of claims against
the United States “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 . . .”. Whether this claim is perceived as
relating to a regulation or a contract, jurisdiction is pro-
vided. Whether liability may be found on particular facts
does not determine whether there is Tucker Act jurisdiction
of the claim. See Reed Elsevier, Inc. v. Muchnick, 130 S. Ct.
1237, 1244 (2010) (distinguishing subject matter jurisdiction
from the claim for relief).
Ms. Chattler states that she is bringing a contract claim,
citing the contract principles of offer, acceptance, and con-
sideration. Restatement (Second) of Contracts § 24 (1981).
In Mobil Oil Exploration & Producing Southeast, Inc. v.
United States, 530 U.S. 604, 607 (2000), the Court explained
that “[w]hen the United States enters into contract rela-

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CHATTLER v. US 6
tions, its rights and duties therein are governed generally
by the law applicable to contracts between private individu-
als.” See also Franconia Assocs. v. United States, 536 U.S.
129, 141 (2002) (when the United States “does business with
its citizens, it does so much as a party never cloaked with
immunity.”). As in National By-Products, Inc. v. United
States, 405 F.2d 1256, 1264 (Ct. Cl. 1969), the government’s
offer of expedited passport service was made “in the form of
an undertaking rather than a mere prediction or statement
of opinion.” It is not disputed that this undertaking failed,
and that, despite this litigation, no refund has been made.
Entitlement is not disputed. The continuation of this
litigation is not easy to support. In apparent justification of
its failure even to tender Ms. Chattler’s refund, the govern-
ment hints that she is seeking to bring a derivative action,
as if this were somehow unethical. The question, however,
is not the bona fides of motivation, but the merits of the
cause. See Ash v. GAF Corp., 723 F.2d 1090, 1095 (3d Cir.
1983) ("Where a plaintiff has a true cause of action, his
motivation in filing suit is irrelevant"). From the court’s
ruling that Ms. Chattler has no judicial recourse for recov-
ery of her $60.00 fee, I respectfully dissent.

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