236 F.3d 756 (D.C. Cir. 2001), 99-5145, Sloan v. US. Dept. of Housing
|Citation:||236 F.3d 756|
|Party Name:||Leon Sloan and Jimmie Lee Furby, Appellants, v. United States Department of Housing and Urban Development, Appellee.|
|Case Date:||February 02, 2001|
|Court:||United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit|
Argued September 11, 2000
Appeal from the United States District Court for the District of Columbia (No. 98cv1201)
James K. Kearney argued the cause for appellants. With him on the briefs were James P. Gallatin, Jr., David T. Hickey, and Andrew J. Hungerman IV.
Scott S. Harris, Assistant United States Attorney, argued the cause for appellee. With him on the brief were Wilma A. Lewis, United States Attorney, and R. Craig Lawrence, Assistant United States Attorney.
Before: Edwards, Chief Judge, Henderson and Garland, Circuit Judges.
Opinion for the court filed by Circuit Judge Garland.
Garland, Circuit Judge:
Plaintiffs Leon Sloan and Jimmie Lee Furby appeal from the dismissal of their Federal Tort Claims Act (FTCA) complaint against the United States Department of Housing and Urban Development (HUD). We find that, in light of the discretionary function exception to the FTCA, the district court properly concluded that it lacked jurisdiction to entertain plaintiffs' complaint.
Sloan and Furby were partners in a contracting business, J&L Renovation Company (J&L). In 1993, J&L won a subcontract for interior demolition as part
of the rehabilitation of Burns Heights, a public housing project located in Duquesne, Pennsylvania, and owned by the Allegheny County Housing Authority (ACHA). HUD provided ACHA with funds for the project.
HUD's Office of Inspector General (OIG) began to investigate the Burns Heights project in late 1994, after another contractor alleged that J&L was not complying with lead based paint abatement requirements. OIG auditor Mark Chandler was assigned to conduct a performance audit of the project. In November 1994, Chandler and HUD attorney Dane Narode visited Burns Heights and observed demolition techniques that would have been unacceptable in a project involving lead-based paint--including the failure to contain dirt, dust, and paint chips. Chandler and Narode also visited a landfill, situated about 300 feet from the Monongahela River, where J&L had been taking plaster debris from Burns Heights. The landfill was not approved for the dumping of plaster, as then-applicable Pennsylvania regulations required; moreover, had the plaster been contaminated with lead paint, its dumping would have created a health hazard. When the operator of the landfill discovered the investigators, he chased them off the site and allegedly threatened to "blow [Narode's] head off." During a subsequent visit to the site, the investigators observed the operator burying the debris.
Chandler then interviewed David McLean, Director of Maintenance and Development for ACHA, who told Chandler that Burns Heights was a lead-based paint abatement project. ACHA's records, however, indicate that McLean was mistaken. Those records reflect that in 1992-93, several tests had been performed to determine the lead content of debris and air at Burns Heights; the tests indicated the absence of hazardous lead levels. The records further reflect that after receiving those test results in 1993, ACHA agreed that there was no need for its contractors and subcontractors to follow hazardous lead-based paint protocols at Burns Heights or to dispose of demolition debris as contaminated waste.
Although ACHA provided Chandler with copies of the lead tests, Chandler was not qualified to interpret the results. Nor did he further inquire as to their meaning or speak with J&L regarding the scope of work under the demolition subcontract. Chandler's final audit report, which was issued by the OIG in October 1995, found that ACHA had not ensured compliance with lead-based paint abatement requirements during the interior demolition of the Burns Heights buildings. The report did not mention any contractors or subcontractors by name. OIG, HUD, Report No. 96-AO-209-1804, Review of Contracted Lead-Based Paint Activities: ACHA, Pittsburgh, PA (1995) [hereinafter Audit Report].
On August 18, 1995, before completing the audit, HUD notified Sloan, Furby, and J&L that it was suspending them from all HUD-related government contracting work, pending further proceedings that might debar them from such work for five years. The notice, issued by HUD's Assistant Secretary for Public and Indian Housing, based the suspension and proposed debarment on three "serious irregularities in [J&L's] business dealings with the government":
1. mproper cleanup of waste from the lead-based paint abatement process;
2. Improper disposal of construction debris from the demolition work; [and]
3. Failure to adhere to contract requirements or HUD guidelines with respect to ... hazardous waste....
Letter from Asst. Sec'y Joseph Shuldiner to Leon Sloan, Sr. (Aug. 18, 1995).
Sloan and Furby invoked their right to an administrative hearing to contest these charges. During the proceeding, the government withdrew the third charge as unsupported by the evidence, and the Administrative Law Judge (ALJ) dismissed the first for the same reason. In re Sloan,
HUDBCA No. 96-C-106-D3, at 11-12 (Aug. 30, 1996), 1996 WL 506267. The ALJ upheld the second charge, although she did so only because J&L had dumped the debris in an unapproved site, and not because it posed an environmental hazard. Because she found no environmental hazard, the ALJ rejected HUD's request for debarment and terminated the suspensions. Id. at 12-13. She declined, however, to grant plaintiffs' request to void the suspensions ab initio. Id. at 14. The Secretary of HUD affirmed the ALJ's decision. In re Sloan, HUDBCA No. 96-C-106-D3 (Dec. 18, 1996).
Thereafter, Sloan and Furby filed complaints in the district court, seeking injunctive and declaratory relief under the Administrative Procedure Act (APA), 5 U.S.C. S S 702-03, and damages for constitutional torts under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). Those actions were consolidated and subsequently dismissed by the district court. On appeal, this court affirmed the dismissal of the Bivens claim (on grounds other than those relied upon by the district judge), but reversed HUD's refusal to void the suspensions ab initio as arbitrary and capricious under the APA. Sloan v. Dep't of Hous. & Urban Dev., 231 F.3d 10, 12 (D.C. Cir. 2000).
On May 13, 1998, Sloan and Furby filed a separate action for money damages under the FTCA, 28 U.S.C. S S 1346(b), 2671 et seq., alleging that HUD had negligently conducted the audit of Burns Heights. According to the complaint, HUD's investigation was conducted in a manner that violated the laws and professional standards governing auditors, and that amounted to negligence and professional malpractice under District of Columbia law. HUD moved to dismiss, asserting that the discretionary function exception to the FTCA, 28 U.S.C. S 2680(a), deprived the court of subject matter jurisdiction. The district court agreed and granted the motion.
On appeal, we review the dismissal of the plaintiffs' FTCA complaint de novo, Moore v. Valder, 65 F.3d 189, 196 (D.C. Cir. 1995), and "accept all of the factual allegations in [the] complaint as true," United States v. Gaubert, 499 U.S. 315, 327 (1991) (quoting Berkovitz v. United States, 486 U.S. 531, 540 (1988)). The FTCA grants federal district courts jurisdiction over claims arising from certain torts committed by federal employees in the scope of their employment, and waives the government's sovereign immunity from such claims. 28 U.S.C. S S 1346(b), 2674. The grant of jurisdiction and waiver of immunity are subject to a number of express exceptions. See 28 U.S.C. S 2680. The exception at issue here, the discretionary function exception, is for "any claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused." 28 U.S.C. S 2680(a). If the discretionary function exception applies, the district court lacks subject matter jurisdiction over the case. See Cope v. Scott, 45 F.3d 445, 448 (D.C. Cir. 1995).
In United States v. Gaubert, the Supreme Court set forth a two-part test for determining whether a challenged government action is protected as a discretionary function. First, the exception "covers only acts that are discretionary in nature, acts that 'involv[e] an element of judgment or choice.' " Gaubert, 499 U.S. at 322 (quoting Berkovitz, 486 U.S. at 536). This "requirement of judgment or choice is not satisfied if a 'federal statute, regulation or policy specifically prescribes a course of action for an employee to follow.' " Gaubert, 499 U.S. at 322 (quoting Berkovitz, 486 U.S. at 536).
Second, even if "the challenged conduct involves an element of judgment," that judgment must be "of the kind that the discretionary function exception was designed to shield." Gaubert, 499 U.S. at 322-23 (quoting Berkovitz, 486 U.S. at 536). Because the exception was designed to " 'prevent judicial "second guessing" of legislative and administrative decisions grounded in social, economic and political policy through the medium of an action in tort,' " the Court concluded that "the exception 'protects only governmental actions and decisions based on considerations of public policy.' " Gaubert, 499 U.S. at 323 (quoting Berkovitz, 486 U.S. at 537).
In the district court, Sloan and Furby argued that neither HUD's investigation, nor its decision to suspend plaintiffs from government contract work, is a discretionary act exempt from challenge under the FTCA. On appeal, plaintiffs no longer press the latter argument, apparently conceding that the...
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