Gould Electronics Inc. v. United States, CIVIL ACTION NO. 99-1130 (E.D. Pa. 1/10/2002)
| Decision Date | 10 January 2002 |
| Docket Number | CIVIL ACTION NO. 99-1130. |
| Parties | GOULD ELECTRONICS INC. f/k/a GOULD INC., AMERICAN PREMIER UNDERWRITERS, INC. v. UNITED STATES OF AMERICA. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Defendant United States has moved to dismiss plaintiffs' ("Gould") claims under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction, pursuant to the discretionary function exception to the Federal Tort Claims Act, 28 U.S.C. § 2680(a), §§ 1346(b).
At the outset of the Korean war the United States recognized a need for the production of a particular type of nickel-cadmium battery. Due to its prior research in the field Sonotone Corp. was selected by the Army to help manage and operate a manufacturing plant to be constructed by the government in Cold Spring, New York. The plant was the first in the country designed to produce this type of battery, which was eventually used in the production of certain types of missiles and in weapons constructed by the Atomic Energy Commission. Prior to the plant's construction Sonotone employees recommended that a closed waste-water system be installed that would remove all harmful material before the water was released from the plant. The Army contends that this design was rejected due to a lack of funds. During the construction of the plant the Army, acting through contractors, installed a waste-water disposal system that during periods of heavy water usage discharged waste-water directly into Foundry Cove, a branch of the Hudson River adjacent to the plant. According to the Army, this system was used because the Army understood that if such discharges were not allowed the plant ran the risk of being shut down during periods of heavy water usage. Plaintiffs allege that as a result of this system contaminated water was released into the area surrounding the plant. Plaintiffs also allege that the plant's operation generated fumes, dust, vapors, and mists which contained toxic substances that were released into the air.
The plant began operations in January, 1953 and completed its first shipment of batteries in March, 1953. In September, 1962 the Army sold the plant to Sonotone. In December 1967 Sonotone became a wholly owned subsidiary of Clevite Corporation. On July 21, 1969 Clevite merged with Gould, Inc. Prior to the merger Gould sold the plant to Business Funds, Inc. subsequently known as Marathon Manufacturing Company. In 1970 the United States brought suit against Marathon alleging it had violated the Rivers and Harbors Act of 1899, 33 U.S.C. § 407 et seq., by dumping toxic chemicals into a public waterway. As a result of this litigation, in 1972 Foundry Cove was dredged and contaminated material removed and stored at the plant. In December 1979 Marathon merged into PCC Holdings which eventually became American Premier Underwriters, Inc. In 1979 the plant was sold to Merchandise Dynamics, Inc. and it ceased operations in 1980.
In August 1990, seventy-three residents of Cold Spring, New York sued plaintiffs for personal injuries and property damage allegedly caused by their operation of the plant. Cheryl Allen, et. al. v. Gould, Inc., No 1074/90 (N.Y. Super. Ct.). In January 1994, plaintiffs in this action approached the United States to determine if the government would consider joining ongoing settlement negotiations in Allen. In a letter dated February 2, 1994, the government declined, stating "a review of the documents . . . leads us to conclude that the United States has jurisdictional defenses to either a direct suit by the [p]laintiffs or a claim for contribution or indemnification by the defendants." Presumably because of its immunity to suit in state court the government was not made a party to Allen. In 1997 Gould settled with the Allen plaintiffs, agreeing to pay them $4.5 million. In 1998, Gould filed administrative claims with the Army seeking contribution and indemnity for the Allen settlement. These claims were denied and on March 3, 1999, Gould filed this action seeking contribution and indemnity from the government.
On May 5, 1999, the government moved under Rule 12(b)(1) to dismiss the case for lack of subject matter jurisdiction contending that New York Law applies, and there is no private liability under New York law for the claims asserted by plaintiffs and therefore no claim under the FTCA. Plaintiffs responded that Pennsylvania law applies and permits the assertion of its claims. I granted the government's motion and dismissed the action holding: (1) under Pennsylvania choice of law rules, New York law applies; (2) I had no jurisdiction over the contribution claim because the government would not be liable for contribution under New York law; (3) the government had not waived protection of New York's bar against contribution; and (4) the government was not liable for indemnity under New York law. On July 21, 2000, the Court of Appeals partially reversed this ruling, stating: "we hold that Ohio law governs the jurisdictional inquiry and, under Ohio law, the United States would be liable for contribution, but not indemnity." Gould Electronics v. United States of America, 220 F.3d 169, 174 (3d Cir. 2000) ("Gould I").
On January 31, 2001 the government filed a second motion seeking to dismiss plaintiffs' claims for lack of subject matter jurisdiction, this time arguing that plaintiffs' claims challenged governmental decisions insulated from judicial review by the discretionary function exception to the FTCA, 28 U.S.C. § 2680(a), and also impermissibly sought recovery for the negligent acts of an independent contractor, 28 U.S.C. § 2671. Plaintiffs responded by contending: (1) the United States had lost its challenge to subject matter jurisdiction before the Court of Appeals and therefore could not relitigate this issue in a subsequent motion; and (2) the specific defenses raised by the government's second motion had been decided in favor of plaintiffs by the Court of Appeals. On June 5, 2001, I issued a Memorandum and Order rejecting plaintiffs' contention that the government could not again raise an objection to subject matter jurisdiction. This Order also, however, granted plaintiffs' motion to deny that portion of the government's motion challenging subject matter jurisdiction under the independent contractor exception.1 On June 13, 2001 I denied the government's motion to reconsider this ruling and directed the plaintiffs to respond to the government's contention that it is immune from suit under the discretionary function exception of the FTCA. On September 20, 2001 plaintiffs moved to compel the government to comply more fully with discovery requests as well as for sanctions for failure to cooperate in discovery procedures. On November 28, 2001 I heard oral argument on defendant's motion to dismiss.
Before me now is the on-going discovery dispute and the government's motion to dismiss plaintiffs' complaint.
A motion to dismiss under Rule 12(b)(1) may present either a facial or a factual challenge to subject matter jurisdiction. See Mortensen v. First Federal Savings and Loan, 549 F.2d 884, 891 (3d Cir. 1977). A motion which makes a facial challenge to a complaint requires that I consider the allegations of the complaint as true and make all reasonable inferences in plaintiffs' favor. Id. In the case of a factual challenge to the complaint, however, I am free to consider and weigh evidence outside the pleadings to resolve factual issues bearing on jurisdiction, and to "satisfy [my]self as to the existence of [my] power to hear the case." Id. In resolving a factual 12(b)(1) motion, no presumptive truthfulness attaches to the plaintiffs' allegations, and the existence of disputed material facts will not preclude me from evaluating the merits of the jurisdictional claims. Id.
In the matter before me the government has raised a factual jurisdictional challenge based on the discretionary function exception to the FTCA. 28 U.S.C. § 2680(a). In addition to the pleadings, I have before me a large amount of material submitted in the form of exhibits or appendices attached to the parties' respective briefs. As a general rule, it is the plaintiff's burden in a factual 12(b)(1) challenge to prove that subject matter jurisdiction exists. See Mortensen 549 F.2d at 891. Under the law of this Circuit, however, it is the government's ultimate burden to prove the applicability of the discretionary function exception. Cestonaro v. United States, 211 F.3d 749, 756 n. 5 (3d Cir. 2000).
In enacting the FTCA Congress abrogated the sovereign immunity of the federal government with respect to tort claims for money damages. However, there exist a number of statutory exceptions to the Act including the one relied on by the United States in this case, the "discretionary function exception." Under this exception the waiver of the government's immunity "shall not apply 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). Although the statute does not define "discretionary function," the Court of Appeals has stated that
[t]he discretionary function exception is designed to protect policy making by the politically accountable branches of government from interference in the form of "second-guessing" by the judiciary — second guessing the result of which burdens the public fisc and the prospect of which skews the decision making process of the executive and legislative policy makers.
Fisher Bros. Sales, Inc. v. United States, 46 F.3d 279, 284 (3d Cir. 1995); see also Gotha v. United States, 115 F.3d 176, 179 (3d Cir. 1997), quoting United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814 (1984) (...
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