Hydrogen Technology Corp. v. US, Civ. A. No. 85-2073 Mc.

• Decision Date: 26 March 1987
• Docket Number: Civ. A. No. 85-2073 Mc.
• Citation: 656 F. Supp. 1126
• Parties: HYDROGEN TECHNOLOGY CORP., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Massachusetts

656 F. Supp. 1126

HYDROGEN TECHNOLOGY CORP., Plaintiff, v. UNITED STATES of America, Defendant.

Civ. A. No. 85-2073 Mc.

United States District Court, D. Massachusetts.

March 26, 1987.

Marc A. Comras, Comras & Jackman, P.C., Boston, Mass., for plaintiff.

Betsy G. Roberti, Day, Berry & Howard, Boston, Mass., for intervening plaintiff Dr. Harold T. Couch.

Martha B. Sosman, Asst. U.S. Atty., for defendant.

MEMORANDUM AND ORDER on CROSS MOTIONS FOR SUMMARY JUDGMENT

McNAUGHT, District Judge.

This action came to be heard on cross motions for summary judgment. This is an action under the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680 wherein the alleged owner of a "hydrogen generator" seeks damages for trespass to or negligent, reckless mishandling of the object in the course of a criminal investigation. It is claimed that the device was rendered useless and irreparable when, at the FBI Laboratory in the District of Columbia, it was dismantled in the course of examination. Plaintiff and defendant agree that there is no dispute over the material facts. They each assert that on those facts they are entitled to judgment on liability. If plaintiff is right, an assessment of damages should follow. If the government is correct, the case is over.

Sixty-one (61) joint exhibits were submitted by the parties to the court at the hearing on these motions, preceded by a "table of contents" type of description of each of them. The trip through this wonderland of paper has been less than fascinating. I am satisfied now that if the parties had tried, they could have assembled an agreed statement of undisputed facts and saved the Court a great deal of time and effort. The statement of facts that follows is taken partly from the plaintiff's submissions and partly from the government's.

One Ambrose Hartnett interested a number of people in investing a total of $415,000 to develop the generator in question. A prototype was developed and demonstrated to the group here in Massachusetts. On March 22, 1982 the investors agreed that one of them, a Howard Scherer, could take it to Purdue University for study. Seven of the investors were from Indiana. In the meantime, in 1981, the FBI initiated an investigation into possible wire fraud violations by Mr. Hartnett. Scherer did not deliver the unit to Purdue University. He kept it and he then filed two actions at law in the United States District Court seeking a judgment to the effect that he was the sole owner of the unit in one of them, and asking for return of his investment ($25,000) by reason of fraud in the other.

On May 25, 1983 Scherer was ordered by a federal judge to return the unit to the defendants within 15 days. He did not do so. His cases were dismissed the following month. The United States Attorney for the Northern District of Indiana declined to prosecute for "insufficient credible evidence", "parallel lawsuits" in Indiana and Boston in the Federal Courts wherein the issue of ownership, the viability of the device and the return of investors' funds might be resolved. He also cited the age and poor health of Mr. Hartnett as a reason for his action.

In the fall of 1983 one Les Stoller, an Indiana resident, and an investor who knew where the generator was stored, turned it over to the F.B.I. The Indiana office of the Bureau sent the machine to the Laboratory for an analysis of its composition and capabilities. A Doctor Fred Gornick, a professor from the University of Maryland, issued a report dated May 29, 1984. Plaintiff, in its submission, emphasizes those portions of the report favoring its view of this dispute, and the government emphasizes the conclusion of Dr. Gornick that the machine was nothing but an elaborate device for carrying out a simple chemical reaction that could be done as well in a "heated pipe full of iron briquets". What really matters is that damage was done by reason of the dismantling and examination. The dismantling and examination were ordered because the F.B.I. was carying out a criminal investigation, and despite the characterization of Document 51 by plaintiff's counsel as proof that there was "no credible evidence of fraud" (a phrase taken from the letter of the United States Attorney for the Northern District of Indiana) there is much more in the joint exhibits to justify the continued investigation by the Agency. Exhibits 4, 7, 14, 17, 19, 20, 26 and 29.

The government contends that two exceptions to the Federal Tort Claims Act come into play, 28 U.S.C. § 2680(a) and § 2680(c). The government also argues that if there was a trespass to plaintiff's property, the trespass was, at common law, privileged.

Section 2680(c) was dealt with first in the government's brief and in the plaintiff's argument; hence I shall deal with it before coming to the "discretionary function" exception of Section 2680(a).

The Tort Claims Act does not apply to "any claim in respect of the assessment or collection of any tax or customs duty, or the detention of any goods or merchandise by any officer of customs or excise or any other law enforcement officer." (Emphasis supplied.) The United States asserts that the Supreme Court has interpreted this section broadly, holding that any claim arising out of the detention of goods, including negligent handling or storage of detained property is barred. Defendant cites Kosak v. United States, 465 U.S. 848, 104 S.Ct. 1519, 79 L.Ed.2d 860 (1984), and Bielass v. New England Safe System, Inc., 617 F.Supp. 682 (D.Mass.1985) in support. These cases, however, involved goods left with or detained by the Customs Service. The decision in Formula One Motors, Ltd. v. United States, 777 F.2d 822 (2d Cir., 1985) was concerned with a vehicle seized by DEA agents, and effectively destroyed by disassembly in a search for narcotics. Circuit Judge Newman, in the opinion, recognizes that one might interpret the exception to mean that "other law enforcement officers" are covered "only when their actions are in aid of customs or excise functions of the Government", but calls attention to the fact that "several circuits have ruled, with scant discussion, that section 2680(c) applies to detentions beyond the context of customs duties and taxes..." At page 823. He then recognized the kinship of the activity by the DEA agents to the customs function, noting that the car had been shipped from abroad and was still in its shipping container. It is clear to me that the Formula One Motors decision does not cover the fact situation in the case at bar. Circuit Judge Oakes, concurring, wrote that if there were no nexus between customs activity and the activity complained of, he would hold that section 2680(c) did not bar recovery. That view makes sense to me, and in the absence of a definitive guideline in this circuit, I too am of the opinion that "those cases applying the exception to law enforcement officers acting out of the excise/customs context .... to be wrongly decided." At page 825.

Is this claim barred by 28 U.S.C. § 2680(a)? This subsection provides that the Act does...