Appleton v. U.S.

• Decision Date: 10 January 2002
• Docket Number: Civ.A. No. 98-0344.
• Citation: 180 F.Supp.2d 177
• Parties: John M. APPLETON, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Columbia

180 F.Supp.2d 177

John M. APPLETON, Plaintiff, v. UNITED STATES of America, Defendant.

Civ.A. No. 98-0344.

United States District Court, District of Columbia.

January 10, 2002.

COPYRIGHT MATERIAL OMITTED

Robert Gerald Nath, Odin, Feldman & Pittleman, P.C., Fairfax, VA, James Henry Jeffries, III, Greensboro, NC, for plaintiff.

Doris D. Coles-Huff, Jane M. Lyons, U.S. Attorney's Office, Washington, DC, for defendant.

MEMORANDUM OPINION

KAY, United States Magistrate Judge.

At the close of Plaintiff's case during the trial of this matter, Defendant United States of America ("Defendant" or the "Government") orally moved for a directed verdict and renewed its motion to dismiss Count II of the Complaint.¹ Plaintiff John Appleton ("Plaintiff" or "Appleton") orally opposed the Motion for Judgment, and Defendant's Renewed Motion to Dismiss. The Court took the Motion for Judgment ("Motion") and the Renewed Motion to Dismiss ("Renewed Motion") under advisement and the Government presented its case. Upon consideration of Defendant's Motion and Renewed Motion, and the opposition thereto, and a bench trial having been held on January 4 and 5, 2001, for the reasons set forth below, Defendant's Motion is granted and the Renewed Motion is denied as moot.

I. Factual Background

Section 38 of the Arms Export Control Act ("AECA") authorizes the President of the United States to control the importation of defense articles and defense services in furtherance of world peace and the security and foreign policy of the United States. 22 U.S.C. § 2778(a)(1). The statute also provides that no designated defense articles may be imported without a license in accordance with AECA and regulations issued thereunder. 22 U.S.C. § 2778(b)(2); see B-West Imports, Inc. v. United States, 75 F.3d 633 (Fed.Cir.1996). Authority under Section 38 has, in turn, been delegated to the Secretaries of State, Treasury, and Defense. Exec. Order No. 11958, 3 C.F.R. § 79 (1977), reprinted in 22 U.S.C. § 2751. The delegation grants the Secretary of the Treasury primary responsibility for issuing and administering permanent import controls of defense articles and services and further, the Secretary of Treasury has delegated implementation authority to the Bureau of Alcohol, Tobacco, and Firearms ("BATF"). Executive Order No. 11432 (October 22, 1968); 1968-2 C.B. 906; Treasury Department Order No. 120-01 (formerly No. 221), 37 Fed.Reg. 11696 (1972).

From at least March 27, 1987, through mid-1994, all imports from "a[ny] parastatal organization of South Africa" were barred. See 52 Fed.Reg. 9982 (Mar. 27, 1987). The State Department published a list of such organizations, but warned that the list was "not all-inclusive" and advised importers that "[b]efore making a commitment to import from South Africa, importers may wish to seek guidance from the Office of Southern African Affairs ... to ascertain whether a corporation, partnership, or entity has been identified as a parastatal organization." Id.

By mid-1994, imports from South Africa had become generally permissible, yet, the products of certain companies remained banned. On June 30, 1994, and extending through the time when Plaintiff applied for ammunition import permits, the United States Government imposed a specific ban on all export licenses for products to and imports from Armscor (an arms manufacturing company) and its associated entities because of a 1991 indictment of Armscor. See 59 Fed.Reg. 33811 (June 30, 1994).

Under BATF regulations, persons seeking to import defense articles, including ammunition, into the United States must obtain a permit from the agency. See 27 C.F.R. § 47.41(a). BATF requires prospective importers of ammunition to apply for a permit by completing and filing an ATF Form 6, Part I. 27 C.F.R. § 47.42(a). Item 8(a) on the Form 6 requires applicants to provide the name and address of the manufacturer of the ammunition they wish to import.

Plaintiff Appleton was a licensed arms dealer under the AECA. In the fall of 1994, he submitted five applications for import permits expressly designating "State Arsenal Republic of South Africa" as the manufacturer of the ammunition he sought to import. Between October 1994 and January 1995, BATF approved all five permits. Following approval of the first permit, Plaintiff contracted to purchase a quantity of ammunition from an arms dealer in Great Britain and to re-sell the ammunition to a buyer in the United States. After some of the ammunition arrived in the United States in February 1995, BATF learned that it had been manufactured by Pretoria Metal Pressings Ltd. ("PMP"), a company affiliated with Armscor and on a list of proscribed companies whose products were barred from importation into the United States. BATF thereupon revoked all five of Plaintiff's permits because the importation of goods made by PMP violated United States policy.² Plaintiff was thus unable to complete his proposed business transactions. He subsequently brought this claim under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b)(1) and 2671-2680 ("FTCA").

II. Procedural Background

Plaintiff's Complaint initially consisted of three counts. The Court granted Defendant's motion to dismiss Counts I and III of Plaintiff's Complaint.³ The Court has addressed Count II of the Complaint, alleging BATF's negligent approval of the permit applications, on three separate occasions. On August 31, 1999, the Court rejected Defendant's assertion of the discretionary function exception on the grounds that a genuine issue remained as to "whether or not BATF exercised a policy-based 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 added a defense based on Plaintiff's contributory negligence and his inability to prove the elements of negligence. On May 18, 2000, the Court, in denying cross-motions for summary judgment, found that genuine issues remain as to whether the BATF examiner made a policy-based discretionary decision not to investigate Plaintiff's designation of an ammunition manufacturer [on the BATF import permit applications] and "whether [B]ATF and/or Mr. Appleton acted negligently in the approval of his applications." Appleton v. United States, 98 F.Supp.2d 30, 42-43 (D.D.C.2000).

In November, 2000, Defendant filed a Renewed Motion to Dismiss Count II, asserting that this Court has no jurisdiction pursuant to a misrepresentation exception to the Government's waiver of sovereign immunity, 28 U.S.C. § 2680(h). This Court denied Defendant's Renewed Motion to Dismiss Count II in a Memorandum Opinion and Order dated January 3, 2001, and the case proceeded to trial, by consent, before the undersigned on January 4 and 5, 2001. Plaintiff's sole remaining cause of action at trial was based upon the Government's purported negligent approval of Mr. Appleton's permit applications and its failure to request that Plaintiff provide additional information regarding the manufacturer of the ammunition.

At the trial held on January 4 and 5, 2001, counsel for both parties agreed to the following stipulations: 1) Plaintiff was a licensed arms dealer; 2) the term "State Arsenal, Republic of South Africa" does not appear on any BATF list of proscribed entities; 3) the name PMP does appear on the list of prohibited companies; and 4) the ammunition, which is the subject of this lawsuit, was manufactured in South Africa by PMP.

III. Legal Standards

A. Motion for Judgment

Fed.R.Civ.P. 50(a) provides in pertinent part that:

[If] there is no legally sufficient evidentiary basis for a reasonable [fact finder] to find for [a] party on [an] issue, the court may determine the issue against that party and may grant a motion for judgment as a matter of law against that party with respect to a claim ... that cannot under the controlling law be maintained ... without a favorable finding on that issue.

"Rule 50 requires a court to render judgment as a matter of law when a party has been fully heard on an issue, and there is no legally sufficient evidentiary basis for a reasonable [fact finder] to find for that party on that issue." Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 135, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). "The standard for judgment as a matter of law under Rule 50 mirrors the standard for summary judgment under Rule 56. Thus, the court must review all of the evidence in the record ..." Id. (citing Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538; Lytle v. Household Mfg., Inc., 494 U.S. 545, 554-555, 110 S.Ct. 1331, 108 L.Ed.2d 504; and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202.) See also Celotex Corp. v. Catrett, 477 U.S. 317, 318, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (The moving party is "entitled to judgment as a matter of law" because the nonmoving party has failed to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof.)

B. Negligence

Under District of Columbia law, which applies under the FTCA, the plaintiff in a negligence action bears the burden of proof, by a preponderance of the evidence, to demonstrate the applicable standard of care, deviation from that standard, and the causal relationship between the deviation and plaintiff's injury. See Messina v. District of Columbia, 663 A.2d 535, 537-538 (D.C.1995), citing Toy v. District of Columbia, 549 A.2d 1, 6 (D.C.1988) (quotation omitted); see also Clark v. District of Columbia, 708 A.2d 632, 634 (D.C. 1998) (citations omitted); District of Columbia v. Price, 759 A.2d 181, 183 (D.C. 2000) (citation omitted). To allege negligence, a complaint cannot merely make conclusory assertions but must specify a negligent act and...