Contract – No subject matter jurisdiction over breach of settlement agreement suit

Where a current civilian employee alleged the Navy breached a settlement agreement resolving an employment claim, the court lacked subject matter jurisdiction over this suit.

Background

This case arises from a dispute between plaintiff Edward Emit Kauthen, a federal civilian employee of the Navy, and defendant John Phelan, acting in his official capacity as Secretary of the United States Department of the Navy. This case concerns allegations of breach of a settlement agreement arising from a Title VII claim. Defendant has filed a motion to dismiss.

Sovereign immunity

Courts lack subject-matter jurisdiction over claims against the government and its agencies unless the government has explicitly waived its sovereign immunity by consenting to be sued. Congress has explicitly waived the Government’s sovereign immunity for claims under Title VII of the Civil Rights Act of 1964, where the federal government is the employer.

However in Frahm v. United States, 492 F.3d 258 (4th Cir. 2007), the Fourth Circuit held that this waiver does not extend to actions asserting a breach of a Title VII settlement agreement. Although the plaintiff in Frahm sought money damages, district judges in this district have also applied the holding in Frahm to cases seeking equitable relief.

Because Title VII does not waive the government’s sovereign immunity as to suits to enforce a settlement agreement and there is no allegation or indication that the government has otherwise consented to suit in this case, the court must dismiss the entire action for lack of subject-matter jurisdiction.

Standing

Plaintiff lacks standing to bring this claim. Count One alleges that he is “entitled to specific performance of the Settlement Agreement and to economic relief necessary to remedy the harm caused by the Agency’s breach.” However, plaintiff seems to have abandoned the request for economic damages relating to the breach in his prayer for relief. Additionally, plaintiff has not pleaded any facts that show economic harm from defendant’s breach outside of his constructive denial of a promotion claim.

Therefore, the only relief plaintiff is seeking – or is eligible for – in Count One is specific performance of the terms of the agreement. The EEOC has already ordered that the agency comply with the terms of the agreement. Moreover, defendant had already taken action to comply with the EEOC order before the complaint was filed. When the redress that the plaintiff is seeking has already happened, there is no “case or controversy” for which this court has authority to decide.

Exhaust

Plaintiff did not mention his constructive denial of promotion claim in his appeal of the agency decision. Therefore, plaintiff has not exhausted his administrative remedies for Count Two because he did not raise it in the EEOC appeal this action arises from. Assuming, for argument’s sake only, that plaintiff has included his constructive denial of promotion claim in a subsequent action, that charge is pending before an administrative judge and he must wait until the conclusion of that matter to appeal.

Defendant’s motion to dismiss granted.

Kauthen v. Phelan, Case No. 1:25-cv-1743, July 22, 2026. EDVA at Alexandria (Alston). VLW 026-3-313. 10 pp.

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