Foster v. U.S.

• Decision Date: 16 April 2008
• Docket Number: No. 06-56843.,06-56843.
• Parties: Thomas FOSTER, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

522 F.3d 1071

Thomas FOSTER, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 06-56843.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 6, 2008.

Filed April 16, 2008.

Richard M. Barnett, San Diego, CA, for the plaintiff-appellant.

David B. Wallace, Assistant United States Attorney, San Diego, CA, for the defendant-appellee.

Appeal from the United States District Court for the Southern District of California; Dana M. Sabraw, District Judge, Presiding. D.C. No. CV-05-02124-DMS.

Before: JOHN R. GIBSON,^* DIARMUID F. O'SCANNLAIN, and SUSAN P. GRABER, Circuit Judges.

GRABER, Circuit Judge:

Plaintiff Thomas Foster sued the United States under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 1346(b), alleging that agents of the Bureau of Alcohol, Tobacco, and Firearms ("ATF") damaged hundreds of his handguns and long guns, as well as ammunition and packaging, which the ATF agents had seized. The district court dismissed the action for lack of subject matter jurisdiction. Specifically, the court ruled that the government had seized the property for the purpose of criminal investigation, not forfeiture, so the "detention of goods" exception to the FTCA, 28 U.S.C. § 2680(c), applied. We affirm.

FACTUAL AND PROCEDURAL HISTORY

Because the district court dismissed the action for lack of subject matter jurisdiction, we take the facts from Plaintiff's Second Amended Complaint. GATX/Airlog Co. v. United States, 286 F.3d 1168, 1173 (9th Cir.2002). On July 28 and July 31, 2000, ATF agents who were executing search warrants seized a large number of firearms—more than 800 in all — and ammunition from storage spaces rented by Plaintiff. The search warrants authorized federal officers to seize the property as "contraband, evidence of the crime, fruits of the crime, [and/or] instruments of the crime" of trafficking in illegal firearms. When the warrants were executed, Plaintiff was in custody pursuant to federal firearms charges in a separate criminal matter. He was later acquitted.¹

On April 10, 2001, the ATF sent Plaintiff a letter stating that the property seized on July 31, 2000, was seized by the ATF for forfeiture. In addition, the letter stated that the property was subject to forfeiture under chapter 44 of Title 18 of the U.S.Code, the federal criminal firearms provision, and that administrative forfeiture proceedings had commenced.

On September 1, 2001, the United States initiated a civil forfeiture action against some of the seized property. Plaintiff opposed that forfeiture action and, eventually, reached an agreement with the United States for a stipulated judgment, whereby Plaintiff would pay storage charges for the property and the United States would return all but 50 of the firearms. Plaintiff "specifically retained[ed] the right to bring an action against the United States for post-seizure, pre-return damage to the firearms returned under [the] Stipulated Judgment of Forfeiture."

Thereafter, Plaintiff submitted a claim to the ATF for $189,881. After the ATF denied his claim, Plaintiff filed this action.

Plaintiff's complaint alleges negligence by employees of the United States, which caused damage to the "hundreds of handguns, long guns, ammunition, smokeless powder, lead bullets, and jacketed bullets" seized on July 28 and July 31, 2000. The allegations state that, "[d]uring the course of inventorying and of defendant's custody of said property, . . . [the United States] damaged the firearms, lost parts to firearms, destroyed the packaging various firearms were contained in, mixed ammunition, destroyed the packaging for collectors ammunition, and destroyed other packaging." Plaintiff claims that this negligence resulted in property damage totaling $189,881.

The United States moved to dismiss the action under Federal Rule of Civil Procedure 12(h)(3). The government argued that the district court lacked subject matter jurisdiction because the United States had not waived sovereign immunity with respect to Plaintiff's claim. After a hearing, the district court granted the motion and entered a judgment dismissing the action. Plaintiff now brings this timely appeal.

STANDARD OF REVIEW

We review de novo a district court's dismissal of an action for lack of subject matter jurisdiction, Campbell v. Redding Med. Ctr., 421 F.3d 817, 820 (9th Cir.2005), and likewise review de novo a district court's interpretation of federal forfeiture law, United States v. Plunk, 511 F.3d 918, 921 (9th Cir.2007).

DISCUSSION

The FTCA waives sovereign immunity for claims against the federal government arising from torts committed by federal employees. 28 U.S.C. § 1346(b)(1). Certain categories of claims are exempt from the waiver of sovereign immunity, however, including "[a]ny claim arising in respect of . . . the detention of any goods, merchandise, or other property by any officer of customs or excise or any other law enforcement officer." Id. § 2680(c). This exception, referred to as the "detention of goods" exception, see, e.g., Cervantes v. United States, 330 F.3d 1186, 1189 (9th Cir.2003), generally is interpreted broadly. For example, in Kosak v. United States, 465 U.S. 848, 854, 104 S.Ct. 1519, 79 L.Ed.2d 860 (1984), the Supreme Court held that the detention of goods exception applies not only to intentional conduct by government employees, but also to "any claim `arising out of' the detention of goods, . . . includ[ing] a claim resulting from negligent handling or storage of detained property." Similarly, the Supreme Court recently resolved a circuit split in favor of a more expansive construction of the FTCA when it rejected an argument that the detention of goods exception is limited to law enforcement officers who are involved in customs or excise activities. Ali v. Fed. Bureau of Prisons, ___ U.S. ___, 128 S.Ct. 831, 841, 169 L.Ed.2d 680 (2008). The Court held that the FTCA "maintain[s] sovereign immunity for the entire universe of claims against law enforcement officers . . . `arising in respect of' the `detention' of property." Id. (emphasis added); accord Bramwell v. U.S. Bureau of Prisons, 348 F.3d 804, 808 (9th Cir.2003) (same). These broad interpretations of the detention of goods exception to the FTCA comport with the well-established principle that waivers of sovereign immunity must be construed strictly in favor of the sovereign. Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996); United States v. 87 Skyline Terrace, 26 F.3d 923, 929 (9th Cir.1994).

Through the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), Pub.L. No. 106-185, § 3, 114 Stat. 202, 211, Congress added paragraphs (1)-(4) to 28 U.S.C. § 2680(c). Those new paragraphs provide that the waiver of sovereign immunity in 28 U.S.C. § 1346(b) applies to damage to property while in the possession of certain government employees, including law enforcement officers, if:

(1) the property was seized for the purpose of forfeiture under any provision of Federal law providing for the forfeiture of property other than as a sentence imposed upon conviction of a criminal offense;

(2) the interest of the claimant was not forfeited;

(3) the interest of the claimant was not remitted or mitigated (if the property was subject to forfeiture); and

(4) the claimant was not convicted of a crime for which the interest of the claimant in the property was subject to forfeiture under a Federal criminal forfeiture law.

28 U.S.C. § 2680(c) (emphasis added). In short, CAFRA canceled the detention of goods exception and restored the waiver of sovereign immunity—or "re-waived" sovereign immunity—with respect to certain forfeiture-related seizures.

In this case, we are called on to determine whether sovereign immunity bars Plaintiff's claim. The government asserts that the FTCA's detention of goods exception applies to bar the claim. By contrast, Plaintiff maintains that the re-waiver of sovereign immunity applies because "the property was seized for the purpose of forfeiture," id. § 2680(c)(1), and, therefore, he may pursue this action.

Plaintiff makes two alternative arguments. He first contends, relying on the ATF's letter of April 10, 2001, that the government all along had a dual purpose for executing the search warrants: seizure of evidence of a crime and seizure of property for forfeiture. In Plaintiff's view, because one purpose for the seizure was forfeiture, the re-waiver of sovereign immunity in § 2680(c)(1)-(4) applies. In the alternative, he argues that the re-waiver of sovereign immunity in § 2680(c)(1)-(4) was triggered the moment the government decided to pursue forfeiture. In this argument, Plaintiff contends that, even if forfeiture was not a reason for the initial seizure, the property was seized for the purpose of forfeiture at that later point so, again, § 2680(c)(1)-(4) applies.

The United States counters that the ATF agents had only law enforcement in mind as the purpose for the initial seizure. The government points to the warrants, which identified the property as potential evidence of a crime and which were contemporaneous with the seizures. The government argues that the statutory re-waiver applies only to property seized initially for the purpose of forfeiture, making irrelevant the later initiation of a forfeiture proceeding. The United States also asserts that even a dual purpose would not help Plaintiff, because the statutory re-waiver applies only to property seized solely for the purpose of forfeiture.

We agree with the government's second argument. We hold that, under CAFRA, the re-waiver of sovereign immunity in § 2680(c)(1)-(4) applies only to property seized solely for the purpose of forfeiture. Consequently, the fact that the government may have had the possibility of a forfeiture in mind when it seized Plaintiff's property does not detract from the application of the detention of goods exception when criminal investigation was a legitimate purpose...