DaVinci Aircraft, Inc. v. United States

• Decision Date: 12 June 2019
• Docket Number: No. 17-55719,17-55719
• Citation: 926 F.3d 1117
• Parties: DAVINCI AIRCRAFT, INC., Plaintiff-Appellant, v. UNITED STATES of America; Michael Christmas, individual and official capacity ; Rodney Lewis, individual and official capacity ; Joel S. Russell, individual and official capacity ; Does, 1 through 10, inclusive, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

926 F.3d 1117

DAVINCI AIRCRAFT, INC., Plaintiff-Appellant,

v.UNITED STATES of America; Michael Christmas, individual and official capacity ; Rodney Lewis, individual and official capacity ; Joel S. Russell, individual and official capacity ; Does, 1 through 10, inclusive, Defendants-Appellees.

No. 17-55719

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 13, 2018 Pasadena, California

Filed June 12, 2019

Abraham Richard Wagner (argued), Law Offices of Abraham Wagner, Los Angeles, California; David M. Baum, Baum Law Corporation, Los Angeles, California; for Plaintiff-Appellant.

David Pinchas (argued), Assistant United States Attorney; Dorothy A. Schouten, Chief, Civil Division; Nicola T. Hanna, United States Attorney; United States Attorney's Office, Los Angeles, California; for Defendant-Appellee.

Before: Richard A. Paez, Barrington D. Parker,^* and Richard R. Clifton, Circuit Judges.

PAEZ, Circuit Judge:

In 2014, United States Air Force agents seized ten military Global Positioning System ("GPS") antennas from DaVinci Aircraft, Inc. ("DaVinci"), allegedly under the guise of the Espionage Act, 18 U.S.C. § 793. DaVinci responded by filing this action alleging conversion and other common law tort claims against the United States and several U.S. Air Force employees. DaVinci seeks damages under the Federal Tort Claims Act ("FTCA"), ch. 753, Title IV, 60 Stat. 842 (codified as amended in scattered sections of 28 U.S.C.), and Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics , 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).

The FTCA allows parties to pursue certain claims against the United States in federal court for injury arising out of the negligent or wrongful conduct of any federal employee acting within the scope of the employee's employment. See 28 U.S.C. §§ 1346(b)(1), 2674, 2679(b)(1). This waiver of sovereign immunity is significant but limited with certain exceptions. See 28 U.S.C. § 2680. Separately, the Tucker Act grants exclusive jurisdiction to the Court of Federal Claims for actions "sounding in contract" against the United States. Snyder & Associates Acquisitions LLC v. United States (Snyder ), 859 F.3d 1152, 1156 n.2 (9th Cir.), opinion amended on reh'g , 868 F.3d 1048 (9th Cir. 2017) (citing 28 U.S.C. § 1491(a)(1) ). In this case, we must delineate between claims that must be filed in the district court and those that must be filed in the Court of Federal Claims.

The district court granted the government's motion to dismiss all of DaVinci's claims against the United States for lack of subject matter jurisdiction. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. Although we affirm, we also remand so that the district court may transfer this action to the Court of Federal Claims, provided DaVinci so requests. See McGuire v. United States , 550 F.3d 903, 914 (9th Cir. 2008).

I.

A.

DaVinci is a California-based corporation that purchases and sells new and used parts in the aviation and aerospace industries. DaVinci's problems arose out of its acquisition and the U.S. Air Force's subsequent confiscation of ten GPS antennas for the AGM-158 Joint Air-to-Surface Standoff Missile ("the Antennas").

Ball Aerospace & Technologies, Inc. manufactured the Antennas under a subcontract from Lockheed Martin, a U.S. Air Force prime contractor. Under the subcontract, the Antennas were considered unclassified hardware and therefore not subject to the security requirements of the Department of Defense or U.S. Air Force for classified data and hardware. They did not require demilitarization and were authorized by the U.S. Air Force for public sale, excluding export, around March 2013. Avatar Unlimited purchased the Antennas from Lockheed Martin as part of a bulk sale of surplus parts, and then resold them to BPB Surplus, who then sold them to DaVinci for $ 3,000.

In September 2013, four agents from the U.S. Air Force Office of Special Investigations visited DaVinci's office to inspect and discuss the Antennas. After the inspection, Special Agent Laura Voyatzis demanded that DaVinci surrender the equipment. DaVinci refused to surrender the Antennas without the agents providing authority for their demands. When asked for the selling price, DaVinci quoted $ 1.25 million for the Antennas, after which the Special Agents left without further action.

Between April and June 2014, DaVinci corresponded with agents at Eglin Air Force Base over the Antennas. Contracting Officer Rodney Lewis initially offered $ 7,359 for the Antennas, but DaVinci declined and countered with a discounted price of $ 750,000 and later $ 600,000. DaVinci and the Air Force employees never agreed upon a price.

In September 2014, Special Agent Joel S. Russell and two Air Force Officers arrived at DaVinci's office and demanded that DaVinci surrender the Antennas under compulsion of law. Russell produced a letter dated a week earlier and signed by both Lewis and Michael Christmas, Special Agent in Charge of the Department of the Air Force, Office of Special Investigations. The letter stated that the "delivery of the said items by [DaVinci's owner] and DaVinci Aircraft is made under compulsion of law pursuant to 18 USC 793(d) [, the Espionage Act,] and is made without prejudice to any claims by [DaVinci's owner] and/or DaVinci Aircraft for their fair market value."

In response to Russell's demands and the threat of criminal prosecution for failure to comply, DaVinci surrendered the Antennas. Russell provided a signed acknowledgment of "Receipt For Items Taken Under Compulsion" to DaVinci. That same day, DaVinci delivered to Eglin Air Force Base an invoice for the Antennas in the amount of $ 1.25 million.

B.

After exhausting the FTCA administrative process,¹ DaVinci filed a complaint in the district court against the United States, Christmas, Lewis, and 10 unnamed individual defendants in their official capacities. The United States filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The United States argued that the district court lacked jurisdiction over DaVinci's tort claims because the confiscation fell into an exception of the FTCA's waiver of its sovereign immunity. In support of its assertion, the government submitted a declaration from Martin D. Hemmingsen, Program Element Monitor for Air Force Special Programs, attesting that in July 2014, the Antennas were classified as "SECRET" and "SECRET/SPECIAL ACCESS REQUIRED" level in accordance with Executive Order 13,526.² The court concluded that it lacked jurisdiction over DaVinci's tort claims against the United States and that DaVinci failed to state a Bivens claim against the individual defendants, and dismissed all claims without prejudice.

DaVinci filed a First Amended Complaint against the United States, Christmas, Lewis, Russell, and 10 unnamed defendants. This time, all of the individual defendants were sued in their individual capacities. DaVinci asserted six causes of action against all defendants: (1) conversion, (2) seizure of property in violation of the Fourth Amendment, (3) deprivation of property without due process in violation of the Fifth Amendment, (4) conspiracy related to abuse of process,³ (5) fraud, and (6) negligent misrepresentation. The United States responded with another motion to dismiss under Rules 12(b)(1) and 12(b)(6).

The district court again granted the motion to dismiss all claims against the United States. The district court concluded that it lacked jurisdiction over DaVinci's FTCA claims of fraud, negligent misrepresentation, and conspiracy to commit fraud or misrepresentation because 28 U.S.C. § 2680(h) provides an absolute bar to such claims.⁴ The district court also held that it lacked jurisdiction over DaVinci's abuse of process and conversion claims because of the FTCA's "detention of goods" exception under 28 U.S.C. § 2680(c). Relying on the 2014 Christmas letter and 2016 Hemmingsen declaration, the district court noted that it could not review the Air Force's decision to classify the Antennas as relating to the national defense because such classification was a discretionary decision, triggering the "discretionary function" bar under 28 U.S.C. § 2680(a). Lastly, the district court held that Bivens did not provide a cause of action against the United States, and therefore dismissed DaVinci's two constitutional claims against the United States.

DaVinci timely appealed. The only parties on appeal are DaVinci and the United States because after the district court dismissed all claims against the United States, DaVinci dismissed the action without prejudice against Christmas, Russell and Lewis.

II.

We review de novo a district court's decision to grant a motion to dismiss for lack of subject matter jurisdiction. Snyder , 859 F.3d at 1156. When reviewing a dismissal pursuant to Rule 12(b)(1) and 12(b)(6), "we accept as true all facts alleged in the complaint and construe them in the light most favorable to plaintiff[ ], the non-moving party." Id . at 1156–57 (citing Leite v. Crane Co. , 749 F.3d 1117, 1121 (9th Cir. 2014) ). "Dismissal is improper unless ‘it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’ " Love v. United States , 915 F.2d 1242, 1245 (9th Cir. 1989) (quoting Gibson v. United States , 781 F.2d 1334, 1337 (9th Cir. 1986) ); see also Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (holding that plaintiff must plead factual allegations that "plausibly give rise to an entitlement to relief").

III.

DaVinci argues that the district court erred by dismissing four of its claims: abuse of process, conversion, and two Bivens claims. Although the government also moved to dismiss based on failure to state a claim, our focus is on the district court's determination that it lacked subject matter jurisdiction over DaVinci's claims. We briefly review the relevant...