The opinion of the court was delivered by: Ruben Castillo, United States District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Harry R. Watkins sued a postal employee under the Federal Torts Claims Act ("FTCA"), 28 U.S.C. § 2671 et seq., for allegedly stealing or tampering with a package he was returning to the sender. Defendant the United States of America*fn1 moves to dismiss Plaintiff's complaint on the basis of res judicata, failure to exhaust administrative remedies and for lack of subject matter jurisdiction. For the following reasons we grant Defendant's motion to dismiss (R. 5-1), and deny Defendant's motion for summary judgment as unnecessary, (R. 5-2).
On June 14, 2002, Watkins sued in state court alleging that a United States Postal Service employee stole or tampered with a package he was returning to a catalogue retailer. The United States removed the action to federal court and substituted itself as Defendant pursuant to 28 U.S.C. § 2679 of the FTCA. On August 20, 2002, this Court sua sponte dismissed the lawsuit without prejudice for failure to exhaust administrative remedies under the FTCA. On August 21, 2002, the United States filed a motion to dismiss the complaint with prejudice for: (1) failure to exhaust under the FTCA; and (2) lack of subject matter jurisdiction over claims for damages arising out of the loss, miscarriage or negligent transmission of mail. See 28 U.S.C. § 2680 (b). Although we initially dismissed the case without prejudice, on September 5, 2002, we granted Defendant's motion and dismissed the case with prejudice.
Rather than appealing this dismissal, Watkins returned to state court to file another, virtually identical complaint on October 2, 2002. The United States timely removed the complaint to this Court, where we again dismissed without prejudice for failure to exhaust administrative remedies. The Government now moves to dismiss or, in the alternative, for summary judgment, this time raising three wounds: (1) Watkins' claims are barred by res judicata stemming from this Court's prior dismissal with prejudice; (2) failure to exhaust; and (3) lack of subject matter jurisdiction. We appointed counsel for Watkins and the parties have submitted briefs supporting their respective positions. Presently before the Court is Defendant's motion to dismiss, or in the alternative, for summary judgment.
In considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), which challenges this Court's subject matter jurisdiction, we must accept the complaint's well-pleaded factual allegations as true and draw reasonable inferences from those allegations in the plaintiffs favor. Transit Express, Inc. v. Ettinger, 246 F.3d 1018. 1023 (7th Cir. 2001). Dismissal is appropriate only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. Kennedy v. Nat'l Juvenile Det. Ass'n., 187 F.3d 690, 694 (7th Cir. 1999); Cortez ex rel. Cortez v. Calumet Pub. Sch. Dist. # 132, No 01 C 8201, 2002 WL 31177378, at *1 (N.D. Ill. Sept. 30, 2002). Furthermore, when a defendant challenges subject matter jurisdiction under Rule 12(b)(1), we may properly look beyond the complaint and consider any evidence submitted on the issue. Meridian Rail Prods. Corp. v. Amsted Indus., Inc., No. 02 C 3708, 2002 WL 31103479, at *2 (N.D. Ill. Sept. 18, 2002).*fn2
The Government raises three grounds on which to dismiss Watkins' suit. First, Defendant argues that Watkins' suit is barred by the doctrine of res judicata because we dismissed his earlier suit with prejudice. Second, Defendant asserts that this Court lacks subject matter jurisdiction over Watkins' suit because his claim of lost mail, whether negligent or intentional, is not cognizable under the FTCA. See 28 U.S.C. § 2680 (b). Finally, Defendant insists that even if the suit is not precluded by res judicata, Watkins failed to exhaust his administrative remedies before filing suit.
First, we agree with the Government that our prior dismissal with prejudice precludes Watkins' present suit, but because we did not issue a memorandum opinion explaining our reasons for dismissal in the prior case, we take the opportunity to do so now. In Watkins' first case, we dismissed the suit without prejudice for failure to exhaust, a ruling that carried no res judicata effect. See Cooter & Gell v. Hartmarx corp., 496 U.S. 384, 396 (1990). We then granted the Government's motion to dismiss with prejudice on the ground that this Court lacked subject matter jurisdiction over Watkins' claim because the FTCA specifically exempts such suits from its waiver of sovereign immunity. This ruling operated as a dismissal on the merits. See Phillips v. Shannon, 445 F.2d 460, 462 (7th Cir. 1971) ("A dismissal with prejudice is a final judgment on the merits which will bar a second suit between the same parties for the same cause of action.") (internal quotations omitted).
If Watkins was dissatisfied with our order disposing of the first case, he should have appealed that decision to the Seventh Circuit Court of Appeals. Miller v. Albright, 523 U.S. 420, 448 (1998) (O'Connor, J. concurring); Elmore v. Henderson, 227 F.3d 1009, 1013 (7th Cir. 2000). Instead Watkins filed a new case in state court, which the Government removed and again moved to dismiss, this time on res judicata grounds, among others. Res judicata operates to bar subsequent litigation in federal court when there is "(1) an identity of the causes of actions; (2) an identity of the parties or their privies; and (3) a final judgment on the merits." See Kratville v. Runyon, 90 F.3d 195, 197-98 (7th Cir. 1996). Generally a dismissal for lack of subject matter jurisdiction is not on the merits, and thus will not bar a later suit "in a court of competent jurisdiction" on res judicata grounds. Magnus Elecs., Inc. v. La Republica Argentina, 830 F.2d 1396, 1400 (7th Cir. 1987). However, it does "preclude relitigation of the issue of whether the first tribunal had jurisdiction," and thus does have collateral estoppel, or issue preclusion, effect in later proceedings. Id. (emphasis and citation omitted); see also Perry v. Sheahan, 222 F.3d 309, 318-19 (7th Cir. 2000); Weber v. cent. Reg'l U.S. Merit Sys. Prot. Bd., No. 98 C 7345, 1999 WL 160365, at *2 n. 1 (ND. Ill. Mar. 17, 1999).
Watkins argues his case is not precluded because he has since exhausted his administrative remedies, thus satisfying any impediments to jurisdiction that warranted dismissal of his first case. This argument misses the mark, however, because this Court's prior dismissal for failure to exhaust was without prejudice and thus without res judicata effect. See Cooter & Gell, 496 U.S. at 395. Watkins fails to address the prior ground for dismissal that does raise preclusion issues-namely, this Court's prior determination that we lack subject matter jurisdiction to entertain a suit falling within the exception carved from the FTCA in 28 U.S.C. § 2680 (b). As noted above, our prior ruling results in preclusion of further litigation regarding our lack of subject matter jurisdiction to hear the suit. See Perry, 222 F.3d at 318-19; Weber, 1999 WL 160365, *2 n. 1. In Perry the Seventh Circuit emphasized:
Although only judgments on the merits preclude parties
from litigating the same cause of action in a
subsequent suit, that does not mean that dismissals
for lack of jurisdiction have no preclusive effect at
all. A dismissal for lack of jurisdiction precludes
relitigation of the issue actually decided, namely the
jurisdictional issue. The difference is in the type of
preclusion, not the fact of preclusion. A judgment on
the merits precludes relitigation of any ground within
the compass of the suit, while a jurisdictional
dismissal precludes only relitigation of the ground of
that dismissal . . . and thus has collateral estoppel
(issue preclusion) effect rather than the broader res
judicata effect that nowadays goes by the name claim
Perry, 222 F.3d at 318 (internal citation and quotations omitted). Watkins' argument that "[w]hen a suit is dismissed for lack of jurisdiction, the same cause of action may still be relitigated in a court of competent jurisdiction," (R. 9, Pl.'s Resp. at 2) (quoting Magnus Elecs., Inc. v. La Republica Argentina, 830 F.2d at 1400), mistakes jurisdictional defects that sometimes can be cured (e.g., failure to exhaust or bringing suit in the wrong forum), which are not necessarily barred by issue or claim preclusion, with those that cannot be cured (e.g., jurisdictional limits based on the government's sovereign immunity), which unfortunately are barred by issue preclusion. In this case, as demonstrated below, there is no "court of competent jurisdiction" for Watkins' suit unless and until the United States amends § 2680 of the FTCA to waive its sovereign immunity for tort suits arising from the "loss, miscarriage or negligent transmission" of postal matter. 28 U.S.C. § 2680 (b). Because Watkins cannot bring a tort suit against the Government except through the FICA, which, as discussed below, bars Watkins' claim, our prior ruling stands and precludes him bringing the claim anew.
That being said, we reiterate that there is no subject matter jurisdiction over Watkins' suit. The FTCA. generally authorizes suits against the United States for damages "for injury or loss of property . . . caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment. . . ." See 28 U.S.C. § 1346 (b); Berkovitz by Berkovitz v. United States, 486 U.S. 531, 535 (1988). However, the FTCA includes a number of exceptions to this broad waiver of sovereign immunity, including as relevant here, no governmental liability for "[a]ny claim arising out of the loss, miscarriage, or negligent transmission of letters or postal matter." 28 U.S.C. § 2680 ...