Garling v. U.S. Envtl. Prot. Agency, 16-8028

• Decision Date: 07 March 2017
• Docket Number: No. 16-8028,16-8028
• Citation: 849 F.3d 1289
• Parties: Roger GARLING; Sheryl Garling; R and D Enterprises, Inc., Plaintiffs–Appellants, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

849 F.3d 1289

Roger GARLING; Sheryl Garling; R and D Enterprises, Inc., Plaintiffs–Appellants,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Defendant–Appellee.

No. 16-8028

United States Court of Appeals, Tenth Circuit.

Filed March 7, 2017

Christopher S. Pugsley (Anthony J. Thompson, with him on the briefs), Thompson & Pugsley, Washington, D.C., appearing for Appellants.

C. Levi Martin, Assistant United States Attorney (Christopher A. Crofts, United States Attorney, with him on the brief), Office of the United States Attorney for the District of Wyoming, Cheyenne, Wyoming, appearing for Appellee.

Before MATHESON, McKAY, and MORITZ, Circuit Judges.

MATHESON, Circuit Judge.

Roger Garling, Sheryl Garling, and their business, R and D Enterprises, Inc., (collectively, "the Garlings") sued the United States for damages arising from an Environmental Protection Agency ("EPA") raid and investigation of their laboratory. The district court held the Garlings' action time-barred under the Federal Tort Claims Act ("FTCA"). The Garlings appeal, arguing the EPA's conduct was a continuing tort or, alternatively, that they were entitled to equitable tolling.

Exercising jurisdiction under 28 U.S.C. § 1291, we conclude that sovereign immunity barred the Garlings' claims and the district court thus lacked subject matter jurisdiction. We therefore reverse the district court's judgment and remand with directions to dismiss this action for lack of jurisdiction.

I. BACKGROUND

In reviewing a district court's dismissal under Rule 12(b)(1) or 12(b)(6), "[w]e accept as true all well-pleaded factual allegations in the complaint and view them in the light most favorable to the [plaintiff]." SEC v. Shields , 744 F.3d 633, 640 (10th Cir. 2014) (quotations omitted) (Rule 12(b)(6)); see Ruiz v. McDonnel l , 299 F.3d 1173, 1180 (10th Cir. 2002) (Rule 12(b)(1)). We therefore recite the facts as alleged in the Garlings' Second Amended Complaint, the operative complaint here.

A. Factual Background

Roger and Sheryl Garling owned and operated the Casper, Wyoming branch of Energy Laboratories, Inc. ("ELI"), a commercial laboratory business.¹ The EPA initiated an investigation after an ELI employee told the EPA that ELI was submitting false water quality reports. On October 30, 2007, agents from the EPA's Criminal Investigation Division ("EPA-CID") and other federal officers executed an armed raid of the ELI facilities pursuant to a search warrant.

On February 25, 2008, as a result of the raid, ELI forced the Garlings to resign. In February 2009, the Garlings met with Jack Rychecky, the EPA officer in charge of implementing the Safe Drinking Water Act ("SDWA") program in the region covering Wyoming. He informed them that he had advised EPA-CID, based on his belief that the agency lacked a sufficient factual basis, against conducting the raid. In September 2009, Assistant U.S. Attorney ("AUSA") James Anderson confirmed to the Garlings' attorney that they were the targets of the EPA's investigation.

From June 2011 to March 2013, the Garlings filed several Freedom of Information Act ("FOIA") requests with the EPA

849 F.3d 1293

about the investigation. The EPA terminated its investigation on October 18, 2012, without filing charges.

B. Procedural History

On May 12, 2013, the Garlings filed an FTCA administrative claim with the EPA seeking damages "due to EPA's 2007 raid and subsequent investigation." Aplt. App. at 18. The EPA denied the claim.² The Garlings requested reconsideration, which the EPA denied.

On March 9, 2015, the Garlings filed an FTCA action in the United States District Court for the District of Wyoming. Their Second Amended Complaint alleged injuries as a result of "EPA officials' reckless and grossly negligent conduct." Id . at 8. The Garlings attempted to assert seven claims: (1) "reckless and/or gross negligence in the form of criminal investigation" ("tortious investigation"), (2) false imprisonment, (3) false arrest, (4) abuse of process, (5) defamation, (6) intentional infliction of emotional distress, and (7) conspiracy. Id . at 23.

The United States moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing the Garlings failed to meet the FTCA's two-year statute of limitations to file their administrative claim. See 28 U.S.C. § 2401(b). It also moved to dismiss the tortious investigation and defamation claims under Rule 12(b)(1) for lack of subject matter jurisdiction because the FTCA does not waive the United States' sovereign immunity for those claims.

The district court dismissed the Garlings' entire FTCA action as time-barred. It determined the Garlings' claims accrued on the date of the EPA's armed raid (October 30, 2007) or, at the latest, the date their ELI employment ended (February 25, 2008)—more than five years before they filed their administrative claim. The court did not address subject matter jurisdiction. The Garlings now appeal.

II. JURISDICTION

The district court's ruling that the Garlings' claims were time-barred was a non-jurisdictional basis for dismissal. See United States v. Kwai Fun Wong , ––– U.S. ––––, 135 S.Ct. 1625, 1638, 191 L.Ed.2d 533 (2015) (holding "the FTCA's time bars are nonjurisdictional"). To reach the issue of timeliness, however, the district court needed to have had subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ("Without jurisdiction the court cannot proceed at all in any cause." (quotations omitted)). Thus, although the Garlings do not address this issue on appeal, we must first consider whether the district court had subject matter jurisdiction over their claims. See Bender v. Williamsport Area Sch. Dist. , 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986) (providing that federal appellate courts have an independent obligation to examine subject matter jurisdiction).

Because we resolve this issue based on the complaint, we must accept its factual allegations as true, see Ruiz , 299 F.3d at 1180, but not its legal conclusions, see Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Mere "labels and conclusions" do not count. See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).³

849 F.3d 1294

A. FTCA Waiver of Sovereign Immunity and Exceptions to Waiver

Sovereign immunity precludes federal court jurisdiction. FDIC v. Meyer , 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). "[T]he United States can be sued only to the extent that it has waived its immunity." United States v. Orleans , 425 U.S. 807, 814, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976) ; see United States v. Mitchell , 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) ("It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction."); Aviles v. Lutz , 887 F.2d 1046, 1048 (10th Cir. 1989) (stating that, where Congress had not authorized suit under the FTCA, the district court was "without subject matter jurisdiction").

Through 28 U.S.C. § 1346(b)(1), the FTCA waives sovereign immunity for certain state law tort claims against the United States. This provision is subject to 28 U.S.C. § 2680(h), which lists exceptions to waiver for various intentional torts. But § 2680(h) also includes language that restores waiver for some of those torts. The ensuing overview attempts to make this clearer. We then apply this framework to this case.

1. Waiver of Sovereign Immunity—§ 1346(b)(1)

The FTCA "is a limited waiver of sovereign immunity, making the Federal Government liable to the same extent as a private party for certain torts of federal employees acting within the scope of their employment." Orleans , 425 U.S. at 814, 96 S.Ct. 1971. Subject to the exceptions listed in § 2680, the FTCA permits:

civil actions on claims against the United States, for money damages ... for injury or loss of property, or personal injury or death 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, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. § 1346(b)(1). "State substantive law applies to suits brought against the United States under the FTCA." Hill v. SmithKline Beecham Corp. , 393 F.3d 1111, 1117 (10th Cir. 2004).

2. Exceptions to Waiver—§ 2680

Title 28 U.S.C. § 2680 lists exceptions to the FTCA's waiver of sovereign immunity. Id. § 2680(a) -(n). When an exception applies, sovereign immunity remains, and federal courts lack jurisdiction. Aviles , 887 F.2d at 1048 ; see Franklin v. United States , 992 F.2d 1492, 1495 (10th Cir. 1993) (stating that whether the FTCA exception in § 2680(h) applies was a "question of subject matter jurisdiction"); see also Milligan v. United States , 670 F.3d 686, 692 (6th Cir. 2012) ("Because the FTCA is a jurisdictional statute, if a case falls within the statutory exceptions of 28 U.S.C. § 2680, the court lacks subject matter jurisdiction...." (brackets and quotations omitted)); Hydrogen...