Abbey v. United States
| Docket Number | 23-15170 |
| Decision Date | 20 August 2024 |
| Citation | 112 F.4th 1141 |
| Parties | Kevin ABBEY; et al.*, Plaintiffs-Appellants, v. UNITED STATES of America; United States Department of the Navy, Defendants-Appellees, and Tetra Tech, Inc., Defendant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Appeal from the United States District Court for the Northern District of California, James Donato, District Judge, Presiding, D.C. No. 3:20-cv-06443-JD
Sara M. Peters (argued), Khaldoun A. Baghdadi, Clifton Smoot, and Kelly L. Ganci, Walkup Melodia Kelly & Schoenberger, San Francisco, California; Tiffany J. Gates, Law Offices of Tiffany J. Gates, San Luis Obispo, California; for Plaintiffs-Appellants.
Albert Lai (argued), Kenneth A. Haywood, Heidy L. Gonzalez, and Caroline Stanton, Trial Attorneys; Rosemary Yogiaveetil, Assistant United States Attorney; J. Patrick Glynn, Director, Torts Branch; August Flentje, Special Counsel, Civil Division; Brian M. Boynton, Principal Deputy Assistant Attorney General; United States Department of Justice, Washington, D.C.; for Defendants-Appellees.
Before: Kenneth K. Lee and Daniel A. Bress, Circuit Judges, and Gloria M. Navarro,** District Judge.
This case addresses the scope of the misrepresentation exception to the sovereign immunity waiver under the Federal Tort Claims Act (FTCA). While sovereign immunity generally shields the United States from lawsuits, Congress waived it for most tort claims. But the FTCA also carved out several exceptions to that sovereign immunity waiver, including for claims "arising out of," among other things, "misrepresentation." 28 U.S.C. § 2680(h).
Here, the City of San Francisco leased a former Naval shipyard to use as a facility for San Francisco Police Department (SFPD) employees. The plaintiffs—current and former SFPD employees, along with their family members—sued the United States, claiming that it had misled the City and the SFPD about the safety of the contaminated shipyard. The key question before us is whether the FTCA's misrepresentation exception requires the federal government to have made the alleged misrepresentations directly to the plaintiffs— or if making allegedly false statements to the City or the SFPD is enough to invoke this exception and bar the plaintiffs' claims.
We hold that the FTCA's misrepresentation exception to the sovereign immunity waiver applies because it precludes any claims "arising out of" a misrepresentation. 28 U.S.C. § 2680(h). And in our case, the plaintiffs' claims "arise" out of the Navy's alleged misrepresentations, even if the Navy did not directly make them to the plaintiffs. Our precedent—which directs courts to look at the "gravamen" of the complaint—confirms our reading of the FTCA's misrepresentation exception.
We also reject the plaintiffs' argument that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) has implicitly limited or suspended the misrepresentation exception. 42 U.S.C. § 9620(h)(1). While CERCLA imposes a duty of disclosure about environmental health hazards on federally owned property, neither the statutory text nor canons of statutory construction suggest that Congress intended CERCLA to override the FTCA's misrepresentation exception. We thus affirm the district court's dismissal of the lawsuit for lack of subject matter jurisdiction.
Hunters Point Naval Shipyard is a 965-acre former naval base located along the San Francisco Bay. During the Cold War, the Naval Radiological Defense Laboratory operated there, undertaking research and decontamination of radioactive vessels used in nuclear weapon tests.
In 1989, the Environmental Protection Agency (EPA) determined that the shipyard qualified under CERCLA as a "Superfund" site, requiring the Navy to remediate it before it could be reused. 42 U.S.C. § 9601 et seq. The Navy signed an agreement with EPA and California governmental entities setting a schedule for environmental remediation. The Navy also contracted with Tetra Tech, Inc. to plan and oversee testing, investigation, and cleanup activities.
The plaintiffs allege that the Navy negligently supervised Tetra Tech and that Tetra Tech perpetrated extensive fraud. Despite these alleged failures, the Navy began negotiating a lease of the Building 606 Property at the shipyard to the City for use by the SFPD. According to the plaintiffs, the Navy "negligently performed its inspection, investigation, and record review, and negligently told the City that there was no history of any radioactive substances at the Building 606 Property."
In particular, the plaintiffs assert that the Navy misrepresented the safety of the site in two 1996 lease documents prepared under CERCLA § 120(h)(1)'s disclosure requirement. Relying on these alleged misrepresentations, the City agreed to lease the site for use by the SFPD. The SFPD, too, relied on the Navy's misrepresentations in these two documents. And, as the plaintiffs tell it, the Navy and Tetra Tech continued to misrepresent the safety of the shipyard to the City and the SFPD.
As a result of these misrepresentations, SFPD employees claim that they were exposed to "radiological and non-radiological contamination" at the site, causing health problems and elevating their risk of developing life-threatening diseases.
In 2020, the plaintiffs sued the United States. The government moved to dismiss for lack of subject matter jurisdiction, contending that the claims fall outside the United States' waiver of sovereign immunity. See 28 U.S.C. §§ 1346(b), 2671, 2680(a), 2680(h). The district court dismissed the First Amended Complaint without prejudice and advised the plaintiffs that the FTCA's "misrepresentation exception ... appears likely to bar at least some portion" of their claims.
The plaintiffs then filed their Second Amended Complaint (SAC), asserting, among other things, negligent undertaking, negligent failure to warn, negligent supervision, negligence per se, negligent misrepresentation, and negligent infliction of emotional distress. The government once again moved to dismiss for lack of subject matter jurisdiction. And the district court again dismissed the complaint on that basis. It concluded that the plaintiffs had "doubled down on the misrepresentation theory" in the SAC. The court reasoned that the "alleged misrepresentations in this case are by no means 'collateral to the gravamen' of the SAC." See Esquivel v. United States, 21 F.4th 565, 578 (9th Cir. 2021). Rather, the court stressed, "[m]isrepresentation is at the heart of all of the claims in the SAC."
The district court rejected the plaintiffs' contention that the misrepresentation exception did not apply. The plaintiffs argued that because the misstatements were made to the City and their employer (SFPD)— and not to SFPD employees—they did not detrimentally rely on the false information, as required under the common law tort of misrepresentation. The district court reasoned that the "plain language of 28 U.S.C. § 2680(h) exempts from the FTCA's waiver of sovereign immunity '[a]ny claim arising out of ... misrepresentation.'" The court also rejected the argument that CERCLA has limited or suspended the misrepresentation exception. The district court dismissed the SAC with prejudice, and the plaintiffs timely appealed.
We review de novo a district court's dismissal for lack of subject matter jurisdiction under the FTCA. Leuthauser v. United States, 71 F.4th 1189, 1193 (9th Cir. 2023) (citing Foster v. United States, 522 F.3d 1071, 1074 (9th Cir. 2008)).
Although not explicitly mentioned in the Constitution, the principle of sovereign immunity long predates the American Founding. See Alden v. Maine, 527 U.S. 706, 715-16, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999) (). The Framers accepted this long-held view and thus "considered immunity from private suits central to sovereign dignity." Id. at 715, 119 S.Ct. 2240; see also The Federalist No. 81, p. 511 (B. Wright ed. 1961) (A. Hamilton) . And given this historical backdrop, the Supreme Court has recognized that federal courts lack jurisdiction over suits against the United States unless "it consents to be sued." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941).
Congress, though, enacted the FTCA in 1946, which as amended waives immunity for tort claims alleging:
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.
The FTCA, however, clawed back certain classes of tort suits from its broad sovereign immunity waiver. It excludes from its scope "[a]ny claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights ...." Id. § 2680(h) (emphasis added). The Supreme Court has long held that based on the inclusion of both "misrepresentation" and "deceit," section 2680(h) bars claims "arising out of negligent, as well as willful, misrepresentation." United States v. Neustadt, 366 U.S. 696, 702, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961). And the misrepresentation exception also encompasses omissions. City & Cnty. of S.F. v. United States, 615 F.2d 498, 504-05 (9th Cir. 1980).
The "plaintiff bears the...
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