Doe v. U.S.

Decision Date29 June 1995
Docket Number94-55552,Nos. 93-56367,s. 93-56367
Citation58 F.3d 494
Parties, 32 Fed.R.Serv.3d 795, 27 Bankr.Ct.Dec. 554, Bankr. L. Rep. P 76,564, 95 Daily Journal D.A.R. 8594 John DOE, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. In re John DOE, Debtor. John DOE, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Peter N. Scolney, Mark Shinderman and Jean R. Hutar, Weiss, Scolney, Spees, Danker & Shinderman, Los Angeles, CA, for plaintiff-appellant.

Frank W. Hunger, Asst. U.S. Atty., Los Angeles, CA, Mark B. Stern, Sushma Soni, U.S. Dept. of Justice, Washington DC, for defendant-appellee.

Appeals from the United States District Court for the Central District of California.

Before: FERGUSON, BEEZER and NOONAN, Circuit Judges.

NOONAN, Circuit Judge:

John Doe appeals two judgments of the district court in favor of the United States in the above cases, which we have consolidated for purposes of decision on these appeals. We reverse the district court.


On June 4, 1993, Doe filed a complaint under the Federal Tort Claims Act (the FTCA) alleging that in October 1988 he began to assist the FBI in undercover work laundering money on behalf of members of the Medellin Cartel; that on November 13, 1990, he entered into a contract with the FBI by which he would be awarded a portion of the proceeds from each investigative case which he assisted; that the FBI promised him "that his identity as an informant and undercover operative would be protected at all costs"; that he assisted the FBI in luring two members of the cartel, Julio and Nacho, out of Columbia to Venezuela on the understanding with the FBI that their arrest would take place in a way that would preclude suspicion from falling on him, but that in fact the FBI arrested Julio and Nacho on a boat in Venezuela and, in order to persuade Julio and Nacho to become informants, the FBI disclosed to them that Doe had been serving as an FBI informant, thereby placing Doe, his wife and his daughter at serious risk of injury or death.

Pursuant to the FTCA Doe submitted claims to the FBI under both the FTCA and the Contract Disputes Act for $39,980,000 for damages allegedly incurred by these actions; the claims were rejected. Thereupon Doe brought his action in the district court, setting out three claims: (1) breach of the implied covenant of good faith and fair dealing by failing to maintain the confidentiality of his role in the undercover operation, "especially by disclosing plaintiff's role to Nacho and Julio for no good reason" and "unnecessarily placing plaintiff and his family's security at risk"; (2) breach of the fiduciary duty, assumed by the FBI in accepting his assistance, to avoid unnecessarily putting him and his family at risk of death or injury; and (3) breach of the contract entered into with the FBI.

The contract was attached as an exhibit to the complaint. In relevant part it provided that the FBI would request payment of an On August 23, 1993, the government moved to dismiss the complaint on the ground that the district court lacked jurisdiction. Doe responded by agreeing that his contract claim should be transferred to the United States Court of Federal Claims, but contended that there were two questions of fact as to the court's jurisdiction over his tort claims. The government had argued that the complaint itself disclosed that the tort took place in a foreign country and that, therefore, the FTCA did not apply. Doe argued that the complaint did not allege that the disclosure took place in Venezuela and further argued that the disclosure of Doe's identity to Julio and Nacho took place on an American flag vessel on the high seas. In support of this argument, Doe submitted the declaration of his lawyer which stated the lawyer's belief that Julio and Nacho were taken out to sea and put upon a United States Coast Guard vessel where their interrogation and the disclosure of Doe's identity took place. Doe further argued that "the FBI agents who participated in the arrest may very well have made the decision to betray plaintiff's identity long before arriving in Venezuela ... or the agents involved in the arrest were inadequately trained for the specific operation." In either case, a "headquarters claim", Doe urged, defeated the "foreign country exception."

                award to Doe from assets obtained through forfeiture based on information provided by him concerning violations of the criminal drug laws but that the agreement "in no way constitutes a guarantee that such an award will be made or the amount of any such award."   The contract further provided that at the time which the FBI "deems appropriate" it would request the Department of Justice to "provide witness protection, relocation, and related security service in accordance with applicable Federal laws and regulations."   Doe agreed, "when directed by the FBI, to testify and furnish all information in his possession" related to the investigations.  Under the heading "Confidentiality" Doe agreed that he would "in no way reveal the confidentiality and sensitive nature of this investigation or identify any undercover FBI agents."   No similar provision was made as to the revelation of Doe's identity.  The contract further provided:  "This document constitutes the full and complete agreement between Doe and the FBI.  Modifications to this agreement will have no force and effect unless and until such modifications are reduced to writing and signed by all parties thereto."

The district court transferred the contract claim to the United States Court of Federal Claims. The district court dismissed the FTCA claims with prejudice and entered judgment for the United States; the district court did not give reasons for its action. Doe appeals this judgment.

While the FTCA appeal was pending before this court, Doe filed his contract claim in the United States Court of Federal Claims. The government pointed out that the pending FTCA appeal deprived that court of jurisdiction. On March 11, 1994, with Doe's consent, the Court of Claims dismissed the case without prejudice for lack of jurisdiction.

Meanwhile, Doe had entered bankruptcy. The Internal Revenue Service filed proofs of claims against him for over $750,000 in back taxes. Doe filed an adversary proceeding by way of setoff, asserting the same FTCA and contract claims he had originally presented in the district court.

On the government's motion the adversary proceedings were withdrawn from the bankruptcy court to the district court and assigned to the same judge who had presided over the earlier case in the district court. Doe moved to reconsider or vacate the withdrawal, contending that he had received inadequate notice and that his claims involved core bankruptcy issues that the bankruptcy court should resolve. After a hearing the district court denied the motion to reconsider or vacate and granted the government's motion to dismiss on the ground of res judicata. Doe appeals this judgment. As noted, we have consolidated the two appeals.

The Amendability Of The Complaint In Tort

Under Fed.R.Civ.Proc. 15(a), "a party may amend his pleading once as a matter of course at any time before a responsive pleading is served." This court has held that "a motion to dismiss is not a 'responsive pleading' within the meaning of the Rule. Neither the filing nor granting of such a motion before answer terminates the right to amend; an order of dismissal denying leave to amend at that stage is improper." Schreiber Distributing v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986). "It is of no consequence that no request to amend the pleading was made in the district court." Id.

The dissenting opinion vigorously portrays the difficulties the plaintiff faces in successfully amending his complaint to overcome the barrier of sovereign immunity as it is preserved in the Federal Tort Claims Act; indeed the dissent maintains that successful amendment is impossible. We are unwilling to anticipate what theory an ingenious but fair pleader might produce and what constellation of facts might be alleged that might overcome the bar. We take explicit issue with the dissent on one point: that the Federal Tort Claims Act does not permit a suit for any governmental action taken in the course of an international undercover operation against drugs, because, so the dissent maintains, an individual would never act in "like circumstances", and the government has waived its immunity only as to torts committed by private persons in "like circumstances." Any governmental operation is different from any private action; what is meant by "like circumstances" is analogous circumstances not identical ones. For example, even if no private person ran a lighthouse to aid navigation, the government would be liable for negligently running a lighthouse because a private person would be liable for negligently undertaking to help another; the broad analogy makes the circumstances "like"; they need not be "the same." Indian Towing Co. v. United States, 350 U.S. 61, 64-66, 76 S.Ct. 122, 124-25, 100 L.Ed. 48 (1955). A private company might well be liable in tort if, in the course of seeking information about the products of an unscrupulous competitor, it exposed its own employee to the risk of torture or death at the latter's hands. We do not mean that this illustration is the case at bar; it is merely suggestive of how tortious private action could be analogous to tortious governmental action.

In dismissing for failure to state a claim, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Cook, Perkiss & Liehe v. N. Cal. Collection...

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