Cna v. U.S., 06-5104.

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Citation535 F.3d 132
Docket NumberNo. 06-5104.,06-5104.
PartiesCNA; Continental Casualty Company, the Workers' Compensation Carrier for RTR Business Products, as Subrogee of Michael Lahoff; Michael Lahoff, (brought in his name and on his behalf by CNA and Continental Casualty Company as subrogee) v. UNITED STATES of America; Korey Lewis CNA; Continental Casualty Company; Michael Lahoff, Appellants.
Decision Date22 July 2008
535 F.3d 132
CNA; Continental Casualty Company, the Workers' Compensation Carrier for RTR Business Products, as Subrogee of Michael Lahoff; Michael Lahoff, (brought in his name and on his behalf by CNA and Continental Casualty Company as subrogee)
UNITED STATES of America; Korey Lewis CNA; Continental Casualty Company; Michael Lahoff, Appellants.
No. 06-5104.
United States Court of Appeals, Third Circuit.
Submitted Under Third Circuit LAR 34.1(a) February 4, 2008.
Filed: July 22, 2008.

[535 F.3d 137]

Daniel L. Hessel, Esquire, Golkow Hessel, Philadelphia, PA, for Appellants.

Mary Beth Buchanan, United States Attorney, Robert Greenspan, Esquire, Edward Himmelfarb, Esquire, United States Department of Justice, Civil Division, Washington, DC, Laura S. Irwin, Esquire, Office of the United States Attorney, Pittsburgh, PA, for Appellee.

Before: McKEE and AMBRO, Circuit Judges, and IRENAS,* District Judge.


AMBRO, Circuit Judge.

CNA and Continental Casualty Company,1 stepping into the place of Michael Lahoff as his subrogees, sued the Government under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671-80. They base their claims on negligence that they allege led to Lahoff being severely injured. CNA and Continental (hereinafter "Subrogees") appeal the District Court's order granting the Government's motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). They raise two arguments on appeal: that the District Court applied the wrong procedural framework when it ruled that it lacked subject matter jurisdiction; and that the Court erred by dismissing the case despite Subrogees' alternative theories of liability against the Government. For the reasons that follow (though they differ from those of the District Court), we affirm.

I. Facts

In January 2003 Marty Allen Armstrong, Jr. and an accomplice walked onto the seventh floor of a downtown Pittsburgh parking garage and robbed Lahoff at gunpoint. After Lahoff gave Armstrong his wallet, and the $15 in it, Armstrong shot Lahoff in the neck, resulting in his paralysis from the neck down. At the time of the shooting, Lahoff was employed by RTR Business Products and was working within the course and scope of his employment. Subrogees were the workers' compensation carriers for RTR. They have paid nearly $1 million in workers' compensation benefits and expect that their future payments will total another $4 million.

Armstrong was a recruit in the United States Army's Delayed Entry Program, and a few weeks short of graduating from high school in Pittsburgh, when he shot Lahoff. The Program, authorized under 10 U.S.C. § 513, allows a recruit to enlist in the Army and receive a cash bonus before his high school graduation. If, however, the recruit fails to graduate, he is separated from the Program. In order to be admitted into it, a prospective recruit must pass a criminal background check and a drug test. Armstrong passed the background check and the drug test on July 26, 2002, and enlisted in the Program that day.

535 F.3d 138

While the background check revealed nothing that precluded Armstrong from enlisting, he in fact had a troubled past. As a 13-year-old, he was charged with aggravated criminal sexual assault, a charge that was dismissed in 2001. The same year, Armstrong was twice charged with disorderly conduct, and was involuntarily committed to Allegheny Valley Hospital for psychiatric evaluation.

Armstrong was recruited by Staff Sergeant Korey Lewis, an Army recruiter attached to the Pittsburgh Recruiting Battalion. Part of Lewis's job was to stay in regular communication with recruits in the Program. In late December 2002, he learned that Armstrong's mother had kicked him out of her house and that he had no place to stay. Lewis discussed this situation with his supervisor, Sergeant First Class Joseph Albrecht. Albrecht told Lewis to "make sure" that Armstrong did not stay at his (Lewis's) apartment. Lewis attempted to find Armstrong housing at local shelters.

When Lewis's attempts proved unsuccessful, he allowed Armstrong to live in his apartment. This not only violated the direct order of his superior noncommissioned officer, it breached United States Army Recruiting Command Regulation 600-25, which states that the Program's recruits are prohibited from "[s]haring of lodging" with personnel attached to the Army Recruiting Command.

While staying at Lewis's apartment, Armstrong discovered that Lewis had a 9 mm Taurus handgun in an unlocked metal tin in his bedroom. Armstrong took this gun from Lewis's apartment and used it to rob and shoot Lahoff.

II. Procedural History

Subrogees brought this suit based on their claim that the Government had waived sovereign immunity under 28 U.S.C. § 1346(b)(1) of the FTCA. That provision allows plaintiffs to bring claims based on the action of Government employees when private persons engaging in analogous behavior would be liable under state law. This waiver of sovereign immunity is subject to several requirements and limitations contained in § 1346(b)(1) itself, as well as 28 U.S.C. §§ 2671-2680, which we address in detail below.

In Subrogees' amended complaint, they assert that the Government was vicariously liable for Lewis's negligence.2 Subrogees also claim that the Army itself, largely through the actions and omissions of Lewis's supervisors, was independently negligent. Specifically, they allege that the Army failed to enforce its regulations; hired, trained, and supervised Lewis negligently; failed to conduct a proper background check on Armstrong; and pressured prospective recruits to enlist in order to meet recruitment goals, making recruitment goals more important than the welfare of society.

The Government moved for dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction or, in the alternative, Rule 12(b)(6) for failure to state a claim on which relief can be granted. As a third option, it moved for summary judgment under Rule 56. The Government did not file an answer. In a memorandum of law accompanying its motion, it contended that Lewis was acting outside the scope of his employment, and thus his actions did not fall within § 1346(b)(1). The Government's

535 F.3d 139

memorandum also addressed the alleged independent negligence of the Army, arguing that the actions of the Army and of Lewis's supervisors were too remote from the shooting for liability to attach to the Government.

Subrogees filed a brief opposing the Government's motion. They attached exhibits to their brief that included newspaper accounts describing Lahoff's shooting, Armstrong's criminal and psychological history, and challenges the Army had recently faced in its recruiting efforts.

The District Court chose to analyze the Government's motion under Rule 12(b)(1), treating the scope-of-employment question as one of subject matter jurisdiction. As a result, its first task was to classify the Government's motion as either a factual attack or a facial attack. The latter concerns "an alleged pleading deficiency" whereas a factual attack concerns "the actual failure of [a plaintiff's] claims to comport [factually] with the jurisdictional prerequisites." U.S. ex rel. Atkinson v. PA. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir.2007). It appears the District Court characterized the Government's motion as a factual attack because the motion challenged whether the District Court actually had subject matter jurisdiction based on the facts alleged. See Dist. Ct. Op. at 2-3 (describing the Government's motion as "based on the existence of jurisdiction").

That the Government's Rule 12(b)(1) motion made a factual attack had three important procedural consequences for the District Court. First, on a Rule 12(b)(1) motion, "no presumption of truthfulness attaches to the allegations of the plaintiff." Dist. Ct. Op. 3. Second, the Court placed the burden of proving subject matter jurisdiction on the plaintiff. Third, it noted its authority to "make factual findings which are decisive to the issue." Id.

After a factual inquiry that extended beyond the pleadings, see Dist. Ct. Op. 6 (noting "careful consideration of Defendant's Amended Motion to Dismiss ... and related submissions" (emphasis added)), the District Court granted the motion to dismiss for lack of subject matter jurisdiction. It stated that the location of Lewis's conduct is "undisputed" and thus found "no issue that SSG Lewis's conduct occurred outside authorized time and space limits of employment," which is one of the required factors under Pennsylvania's definition of conduct in the scope of employment. Dist. Ct. Op. 5. The Court's opinion did not discuss the Army's alleged independent negligence. Subrogees now appeal to our Court.

III. Appellate Jurisdiction and Standard of Review

We have jurisdiction over an appeal of a dismissal for lack of jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over legal conclusions. Morgan v. Gay, 471 F.3d 469, 472 (3d Cir.2006). We review the District Court's findings of fact for clear error. Carpet Group Int'l v. Oriental Rug Importers Ass'n, 227 F.3d 62, 69-70 (3d Cir.2000). The clearly erroneous standard of review also applies to findings of fact related to jurisdiction. See, e.g., Chayoon v. Chao, 355 F.3d 141, 143 (2d Cir.2004); see also 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1350, at 255, 264 & n. 79 (3d ed.2004).

IV. Proper Subsection of Rule 12

The Government contends that the District Court lacked subject matter jurisdiction. In its view, the six conditions on the waiver of sovereign immunity in the FTCA, quoted below, are jurisdictional requirements. They argue that Subrogees did not meet one of the statutory conditions

535 F.3d 140

because Lewis was acting outside the scope of his employment; hence there is a failure of federal subject matter jurisdiction. The...

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