Appleton v. U.S.
| Decision Date | 31 August 1999 |
| Docket Number | No. Civ.A. 98-344(RMU).,Civ.A. 98-344(RMU). |
| Citation | 69 F.Supp.2d 83 |
| Parties | John M. APPLETON, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Columbia |
Robert G. Nath, Odin, Feldman & Pittleman, Fairfax, VA, for plaintiff, John M. Appleton.
Doris Coles Hough, District Court Civil Division, United States Attorney's Office, Washington, DC, for defendant, United States of America (Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms).
Granting the Motion to Dismiss as to Count 1 and Count 3; Denying the Plaintiff's Motion for Summary Judgment as to Count 1 and Count 3;
This matter is before the court upon the defendant's motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and the plaintiff's motion for summary judgment. The plaintiff, John M. Appleton, filed a three-count complaint alleging negligence and arbitrary and capricious exercise of power on the part of the Treasury Department's Bureau of Alcohol Tobacco and Firearms ("ATF") and the State Department ("State"). Specifically, Mr. Appleton contends that ATF was negligent in its approval and subsequent revocation of his application for permits to import ammunition made in South Africa. Mr. Appleton also alleges that State acted arbitrarily and capriciously by "debarring" the ammunition's manufacturer under the Arms Export Control Act ("AECA"), 22 U.S.C. § 2778 et seq.
Pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b)(1), 2671-2680, the defendant, the United States of America ("the Government"), asks the court to dismiss the complaint for failure to state a claim. Specifically, the Government asserts that the FTCA shields the Government from suit for actions which were taken in the performance of a "discretionary function" or which allegedly interfered with contract rights. Alternatively, the Government argues that Mr. Appleton was contributorily negligent in the approval of the permits. (See Mot. to Dis. at 1-2).
For the reasons which follow, the court concludes that the FTCA's contract interference exception, 28 U.S.C. § 2680(h), bars Mr. Appleton's claim that ATF interfered with his contractual relations with a third party. Accordingly, the court will grant the defendant's motion to dismiss as to counts One and Three and deny the plaintiff's motion for summary judgment on counts One and Three.
The court finds that there remains a genuine issue as to whether or not ATF exercised policy-based discretion in approving Mr. Appleton's import applications. In addition, the court finds that there is a genuine issue as to whether or not ATF acted negligently in approving Mr. Appleton's applications. Accordingly, the court will deny the defendant's motion to dismiss count 2; the court will also deny without prejudice the plaintiff's motion for summary judgment as to count 2. This leaves both parties free to file motions for summary judgment on count 2 as outlined in the attached Order.
Mr. Appleton is a licensed arms dealer under the AECA, 22 U.S.C. § 2778 and 22 C.F.R. §§ 120-130. In 1994, Tony Slatter, an arms broker in England, offered to sell Mr. Appleton ammunition imported from South Africa. Mr. Appleton submitted five "ATF Form 6" import permit applications to ATF listing "State Arsenal" as the manufacturer of the ammunition. (See Appleton Dec. ¶ 6.) ATF approved the import permits over a period of time between October 1994 and January 1995. Mr. Appleton then contracted to resell the ammunition to an arms dealer in Illinois. (See Comp. ¶ 14.) Mr. Appleton alleges that he made every effort to complete the permit applications properly. Specifically, he maintains that he supplied all the information he could obtain about the identity of the manufacturer of the ammunition. Mr. Appleton claims that he asked Mr. Slatter for information about Slatter's supplier and about the original manufacturer. Mr. Slatter professed not to know who the manufacturer was and also indicated that he was unwilling to divulge the identity of his supplier for proprietary reasons. (See Pl.'s Mot. for Summ.J. at 5-6.) Nonetheless, the Government maintains that Mr. Appleton could have asked Mr. Slatter for additional information at the time of their negotiations which would have revealed that the ammunition was in a crate marked "ARMSCOR." ATF was able to determine the manufacturer of the ammunition based on Mr. Appleton's submission of a drawing of the "headstamp" markings on the ammunition during a subsequent investigation. Accordingly, the Government argues that Mr. Appleton could and should have requested the headstamp markings from Mr. Slatter before submitting his applications. (See Opp. to Pl.'s Mot. for Summ.J. at 8-10.)
When the ammunition arrived in the United States in February 1995, ATF initiated an investigation into the identity of the manufacturer. ATF discovered that the ammunition had been manufactured by Pretoria Metal Pressings Ltd. ("PMP"), a different company than the "State Arsenal" Mr. Appleton named in his applications. During the investigation, Mr. Appleton learned that the ammunition was made by PMP in 1983, delivered to the South African Defense Force directly after production and sold at some unspecified date to a British concern called TSF. (See Pl's Mot. for Summ.J., Ex. 20.) Based on a State Department and Treasury Department policy of debarring certain South African arms manufacturers, including PMP, ATF revoked Mr. Appleton's permits in March 1995. See 27 C.F.R. § 47.55.1 Subsequently, Mr. Appleton breached his contract with the domestic arms dealer for the resale of the ammunition. In May 1996, Mr. Appleton filed an administrative claim with ATF and the State Department. ATF denied the claim in August 1997. Mr. Appleton subsequently initiated the instant action.
A motion to dismiss for failure to state a claim upon which relief can be granted tests not whether the plaintiff will prevail on the merits, but instead whether or not he has properly stated a claim. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Fed. R.Civ.P. 12(b)(6). The court may dismiss a complaint for failure to state a claim only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Atchinson v. D.C., 73 F.3d 418, 421 (D.C.Cir.1996). In deciding such a motion, the court must accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff. See Maljack Prods. v. Motion Picture Ass'n, 52 F.3d 373, 375 (D.C.Cir.1995). The court need not, however, accept as true the plaintiff's legal conclusions. See Taylor v. F.D.I.C., 132 F.3d 753, 762 (D.C.Cir.1997).
The Government's motion to dismiss asserts that three factors bar Mr. Appleton from suing: (1) the FTCA's discretionary function exception, 28 U.S.C. § 2680(a); (2) the FTCA's interference with contract rights exception, 28 U.S.C. § 2680(h); and (3) the absence of an actionable duty to use due care in approving and revoking firearms import permits. For the following reasons, Mr. Appleton's claim as to contract interference will be dismissed under the FTCA's contract exception, 28 U.S.C. § 2680(h).
The FTCA provides that the United States retains sovereign immunity for any "claim[s] arising out of assault, battery, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights." 28 U.S.C. § 2680(h) ().
As a preliminary matter, courts in this Circuit have not been reluctant to dismiss claims pursuant to the FTCA's contract exception. See, e.g., United States Information Agency v. Krc, 989 F.2d 1211 (D.C.Cir.1993); Art Metal-U.S.A. v. United States, 753 F.2d 1151 (D.C.Cir.1985); SEC v. The Better Life Club, 995 F.Supp. 167 (D.D.C.1998), aff'd, 1999 WL 236885 (D.C.Cir.1999); Smith v. Pena, 1998 WL 164774 (D.D.C.1998); Claasen v. Brown, 1996 WL 79490 (D.D.C.1996); Shipkovitz v. Mosbacher, 1992 WL 394489 (D.C.Cir. 1992); Taxay v. United States, 345 F.Supp. 1284 (D.D.C.1972), aff'd, 487 F.2d 1214 (D.C.Cir.1973).
The contract exception has been fairly broadly construed by courts in this Circuit. In Art Metal, the plaintiff supplied office furniture to the government through GSA contracts. See Art Metal, 753 F.2d at 1153. In the wake of newspaper articles accusing Art Metal of "serious misdeeds and improprieties" in its relationship with GSA, GSA halted all contracts with Art Metal. See id. Art Metal sued the Government, alleging negligence on the part of GSA, interference with prospective advantage and injurious falsehood. See id. On appeal from an order granting a motion to dismiss, the D.C. Circuit held that interference with prospective economic advantage fell within the purview of the contract exception. See id. at 1154. It was immaterial whether or not Art Metal had an existing contract with a third party; either way, the claim was barred by the contract exception.
Consequently, Mr. Appleton's claims for interference with contract or economic advantage, such as a loss of business reputation, are barred. Even if ATF had a duty not to interfere with Mr. Appleton's economic relationship with his buyer, any breach of that duty is not actionable under the FTCA. See Art Metal, 753 F.2d at 1153. Each count of the...
To continue reading
Request your trial
-
Jerome Stevens Pharms. v. Food and Drug Admin.
...the action is not grounded in public-policy concerns, it is not immunized by the discretionary-function exception. Appleton v. United States, 69 F.Supp.2d 83, 92 (D.D.C.1999). Another FTCA exception is the intentional-torts exception, which provides that the United States retains sovereign ......
-
Ecco Plains, LLC. v. United States
......5 But whatever claim for conversion or negligence ECCO Plains may have had against the government based on FDIC's actions is not before us. The judge concluded ECCO Plains had not filed a notice of claim prior to bringing suit, leaving the district court without jurisdiction over its ...The exception was in question in Coastwise Packet Co. v. United States, 398 F.2d 77 (1st Cir.1968), and Appleton v. United States, 69 F.Supp.2d 83 (D.D.C.1999). In those cases the court held the fact a contract may establish the value of the plaintiff's ......
-
Appleton v. U.S.
...discretion in approving Mr. Appleton's applications and whether or not BATF acted negligently in approving those applications." Appleton, 69 F.Supp.2d at 98. In early 2000, Defendant again argued that Plaintiff's remaining claim was barred by the discretionary function exception, but also a......
-
PW Arms, Inc. v. United States, CASE NO. C15-1990-JCC
..."read the FTCA out of existence." (Dkt. No. 15 at 5.) In so arguing, Plaintiff cites to a precursor to Appleton IV . Appleton v. United States , 69 F.Supp.2d 83 (D.D.C.1999). This is unpersuasive. As Defendants point out, to read the earlier Appleton case cited by Plaintiff as somehow contr......