Foster Logging, Inc. v. United States

• Decision Date: 24 August 2020
• Docket Number: No. 18-15033,18-15033
• Citation: 973 F.3d 1152
• Parties: FOSTER LOGGING, INC., American Guarantee & Liability Insurance Company, as subrogee of Foster Logging, Inc., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

973 F.3d 1152

FOSTER LOGGING, INC., American Guarantee & Liability Insurance Company, as subrogee of Foster Logging, Inc., Plaintiffs-Appellants,

v.UNITED STATES of America, Defendant-Appellee.

No. 18-15033

United States Court of Appeals, Eleventh Circuit.

August 24, 2020

Michael Bernard Stevens, Shirley Jean McEachern, Derrevere Stevens Black & Cozad, West Palm Beach, FL, Billy N. Jones, Jones Osteen & Jones, Hinesville, GA, for Plaintiffs-Appellants.

Bradford Collins Patrick, James C. Stuchell, U.S. Attorney Service-Southern District of Georgia, U.S. Attorney's Office, Savannah, GA, for Defendant-Appellee.

Before JORDAN, TJOFLAT and HULL, Circuit Judges.

HULL, Circuit Judge Plaintiffs–Appellants Foster Logging, Inc. and American Guarantee & Liability Insurance Company ("American Guarantee") appeal the district court's dismissal of their complaint, pursuant to Fed. R. Civ. P. 12(b)(1), for lack of jurisdiction. Their complaint alleged negligence claims against Defendant–Appellee the United States under the Federal Tort Claims Act ("FTCA"). In response, the United States moved to dismiss the complaint based on the discretionary-function exception to the FTCA's waiver of sovereign immunity. On appeal, Plaintiffs argue the district court (1) improperly considered facts outside the allegations in the complaint, and (2) misapplied the discretionary-function exception to FTCA liability. After review and with the benefit of oral argument, we affirm.

I. PROCEDURAL BACKGROUND

A. The Complaint

In their complaint, Plaintiffs alleged that the Fort Stewart-Hunter Army Airfield Forestry Branch ("U.S. Forestry Branch") "negligently failed to observe, monitor[,] and maintain" a controlled fire burn in area B-20 near Fort Stewart, a military base in Georgia, resulting in damage to Foster Logging's property.¹ The complaint alleged that Plaintiff Foster Logging entered into a wood service contract with S.A. Allen, Inc., to cut and convert wood on the Fort Stewart Reservation near the Luzon Range in area B-19.5. Plaintiff American Guarantee provided insurance coverage for multiple items on Foster Logging's Schedule of equipment. On April 20, 2017, the U.S. Forestry Branch initiated a controlled fire burn in area B-20 adjacent to the area where Foster Logging was harvesting timber.

The following day, a Friday, Foster Logging parked its equipment and left area B-19.5 around 2:30 p.m. According to the complaint, the U.S. Forestry Branch "negligently failed to observe, monitor[,] and maintain said burn, allowing fire to escape area B-20 and to enter the land and pine trees on which [Foster Logging] was logging." As the fire entered area B-19.5, certain equipment and property of Foster Logging were burned and destroyed, causing loss of equipment, fuel, and harvested timber, among other things.

As a result of the damage to the property, Plaintiff Foster Logging was unable to harvest timber for three days and was required to rent equipment to continue harvesting timber in area B-19.5. Plaintiff American Guarantee, as Foster Logging's insurer, ultimately paid Foster Logging a total of $247,384.12 for its insured losses. Foster Logging also incurred $125,110.25 in out-of-pocket damages beyond the indemnity payments.

B. District Court Proceedings

Subsequently, the Plaintiffs Foster Logging and American Guarantee brought the instant suit. American Guarantee sought to recover $247,348.12, plus costs, as recompense for the payments it made to Foster Logging for the damage to its equipment, which American Guarantee alleged resulted from the U.S. Forestry Branch's failure to properly observe, monitor, and maintain the controlled burn. Foster Logging sought to recover the additional $125,120.52 in out-of-pocket spending for uncovered losses, plus costs.

The Defendant United States moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(1), arguing the district court lacked jurisdiction to consider Plaintiffs' claims because the government retained its sovereign immunity. The Defendant argued that the complaint failed to allege a plausible claim that fell outside the discretionary-function exception to the FTCA's waiver of sovereign immunity. Citing United States v. Gaubert, 499 U.S. 315, 111 S. Ct. 1267, 113 L.Ed.2d 335 (1991), and applying the two-part test articulated in that decision, the Defendant argued the challenged conduct alleged in the complaint—the observation, monitoring, and maintenance of the controlled burn—(1) involved an element of judgment or choice; and (2) was susceptible to policy analysis.

In response, the Plaintiffs argued the Defendant United States had waived its immunity under the FTCA because the U.S. Forestry Branch's failure to observe, monitor, and maintain the controlled burn in a safe manner was not a permissible exercise of policy judgment. Importantly, Plaintiffs did not dispute that the challenged conduct involved an element of judgment or choice. Rather, Plaintiffs focused their analysis solely on whether the U.S. Forestry Branch officials exercised that judgment in a permissible manner.

The district court ultimately granted the United States' motion and dismissed the complaint. The district court concluded that the negligence claim alleged in the complaint fell within the FTCA's discretionary-function exception, and thus the court lacked jurisdiction over the complaint. The district court reasoned that the U.S. Forestry Branch's decisions as to how to monitor and maintain the fire (1) involved an element of judgment or choice, and (2) implicated important policy considerations.² This appeal followed.

II. STANDARD OF REVIEW

In reviewing the district court's dismissal of Plaintiffs' complaint, we accept the allegations in the complaint as true, and we review de novo the district court's application of the discretionary-function exception to the FTCA's waiver of sovereign immunity. Douglas v. United States, 814 F.3d 1268, 1273–74 (11th Cir. 2016) ; Cohen v. United States, 151 F.3d 1338, 1340 (11th Cir. 1998) ; see also JBP Acquisitions, LP v. United States ex rel. FDIC, 224 F.3d 1260, 1263 (11th Cir. 2000) ("We review de novo the district court's dismissal of an action for lack of subject matter jurisdiction and its interpretation and application of statutory provisions.").

We first outline the discretionary-function exception to the FTCA's waiver of sovereign immunity and the Supreme Court's two-part test in Gaubert.

III. DISCRETIONARY-FUNCTION EXCEPTION

Plaintiffs cannot sue the United States unless the United States unequivocally has waived its sovereign immunity.³ See Zelaya v. United States, 781 F.3d 1315, 1321 (11th Cir. 2015) ("It is well settled that the United States, as a sovereign entity, is immune from suit unless it consents to be sued."). The FTCA waives the United States' sovereign immunity from suit in federal courts for its employees' negligence. See 28 U.S.C. § 1346(b).

Congress, however, has carved out certain exceptions to that limited waiver, including the discretionary-function exception in 28 U.S.C. § 2680(a).⁴ The discretionary-function exception provides that, notwithstanding § 1346(b), the United States preserves its sovereign immunity as to "[a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused." 28 U.S.C. § 2680(a) (emphasis added). "[T]he purpose of the exception is to prevent judicial ‘second-guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort." Gaubert, 499 U.S. at 323, 111 S. Ct. at 1273 (quotation marks omitted).

The Supreme Court has developed a two-part test that courts must apply in determining whether challenged conduct falls within the discretionary-function exception to the FTCA's waiver of sovereign immunity. See id. at 322, 111 S. Ct. at 1273. First, a court examines the nature of the challenged conduct or act to determine whether it is "discretionary in nature," meaning that it involves "an element of judgment or choice." Id. at 322, 111 S. Ct. at 1273 (quotation marks omitted); see also Ochran v. United States, 117 F.3d 495, 499 (11th Cir. 1997) (quoting Gaubert ). Second, if the challenged conduct involves an element of judgment or choice, a court then determines "whether that judgment is of the kind that the discretionary function exception was designed to shield." Id. at 322–23, 111 S. Ct. at 1273 (quotation marks omitted).

As to the first part of the test, "if a ‘federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow,’ " there is no judgment or choice involved. Id. at 322, 111 S. Ct. at 1273 (quoting Berkovitz v. United States, 486 U.S. 531, 536, 108 S. Ct. 1954, 1958–59, 100 L.Ed.2d 531 (1988) ); see also Phillips v. United States, 956 F.2d 1071, 1076 (11th Cir. 1992). The inquiry focuses on "whether the controlling statute or regulation mandates that a government agent perform his or her function in a specific manner." Hughes v. United States, 110 F.3d 765, 768 (11th Cir. 1997) (quotation marks omitted).

As an initial matter, there is no contention on appeal—nor has there been at any point in the proceedings—that the first part of the Gaubert test is not met in this case. Plaintiffs have not identified, either in the district court, in their briefs on appeal, or at oral argument, any "federal statute, regulation, or policy specifically prescrib[ing] a course of action" that U.S. Forestry Branch officials were to follow after initiating a controlled burn.⁵ See Gaubert, 499 U.S. at 322, 111 S. Ct. at 1273 (quotation marks omitted). Thus, there was at least some element of judgment or choice at play in how the U.S. Forestry Branch observed, monitored, and maintained the controlled burn.

In this particular appeal, our analysis is therefore...