Jimenez-Nieves v. U.S., JIMENEZ-NIEVES

• Decision Date: 22 June 1982
• Docket Number: JIMENEZ-NIEVES,No. 81-1534,81-1534
• Citation: 682 F.2d 1
• Parties: Octavio, et al., Plaintiffs, Appellants, v. UNITED STATES of America, et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 1

682 F.2d 1

Octavio JIMENEZ-NIEVES, et al., Plaintiffs, Appellants, v. UNITED STATES of America, et al., Defendants, Appellees.

No. 81-1534.

United States Court of Appeals First Circuit.

Argued Feb. 4, 1982.

Decided June 22, 1982.

Blas C. Herrero, Jr., Hato Rey, P. R., for plaintiffs, appellants.

Anne Buxton Sobol, Atty., Appellate Staff, Civ. Div., Dept. of Justice, Washington, D. C., with whom Raymond L. Acosta, U. S. Atty., San Juan, P. R., J. Paul McGrath, Asst. Atty. Gen., Robert S. Greenspan and Al J. Daniel, Jr., Attys., Appellate Staff, Civ. Div., Dept. of Justice, Washington, D. C., were on brief, for defendants, appellees.

Before COFFIN, Chief Judge, GIBSON, ^* Senior Circuit Judge, and BREYER, Circuit Judge.

BREYER, Circuit Judge.

Octavio Jimenez Nieves, on behalf of himself and his family, sued the United States for damages suffered when the Social Security Administration stopped payment on benefit checks which he had negotiated for his mother, Cecilia Nieves Colon, throughout most of the year 1975. The SSA concedes that the checks were dishonored because of a "typographical" error made by an SSA keypuncher who wrongly entered a notation that Cecilia had died on March 26, 1975, instead of the correct date of March 26, 1976. The plaintiff alleges that, as a result of this error, (a) several banks required him to pay back money that they had previously given him (presumably when he cashed the checks that his mother had endorsed); (b) his credit rating was seriously affected; (c) he had to borrow money from friends and acquaintances to repay the banks; (d) the Secret Service began to investigate him for fraud, making constant inquiries of his employer; (e) he was humiliated and suffered the stress of severe financial problems, resulting in great physical, mental, and emotional damage, affecting him and his entire family. All of this, says Jimenez Nieves, constitutes a tort under the law of Puerto Rico. ¹ He seeks recovery of damages from the United States under the Federal Tort Claims Act. 28 U.S.C. §§ 1346, 2671 et seq. (1976).

The United States moved to dismiss the complaint on grounds that the action is barred by (1) 42 U.S.C. § 405(h) (1976), restricting court jurisdiction in social security cases, and (2) 28 U.S.C. § 2680(h) (1976), which denies consent to sue the United States on claims arising out of "libel, slander, misrepresentation, deceit or interference with contract rights...." The district court held that plaintiff's claim was indeed a claim of "misrepresentation," and it therefore dismissed the complaint. While we agree that dismissal of most of the claims in the complaint was proper, we believe that the court's ground for dismissal was not.

1. We turn first to the Government's "jurisdictional" argument. That argument is based on a provision in Subchapter II of the Social Security Act-a subchapter entitled "Federal Old-Age, Survivors and Disability Insurance Benefits." The provision at issue states in relevant part:

No finding of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.

42 U.S.C. § 405(h). The Government concludes that plaintiff's exclusive remedy-the "review ... herein provided"-lies under 42 U.S.C. § 405(g), which, in effect, provides for court review of an administrative record, using the "substantial evidence" standard of the Administrative Procedure Act, 5 U.S.C. § 706 (1976). The principal support the Government offers for this claim is a quotation from Weinberger v. Salfi, 422 U.S. 749, 760, 95 S.Ct. 2457, 2464, 45 L.Ed.2d 522 (1975) (stating that it would be "fruitless to argue that this action does not also arise under the Social Security Act"). The Government also asserts that, otherwise, "virtually any error in the administration of the Social Security Act could be translated into a tort action against the United States." ²

We find the Government's position unacceptable. The language of § 405(h) applies only to a "claim arising under this subchapter." An action for damages based on a tort committed in the course of administering the Social Security Act does not arise "under" a "subchapter" that provides for the payment of social security benefits any more than a tort claim based on a negligently driven postal truck arises under the postal acts. The Government quotes Weinberger v. Salfi out of context, for the plaintiffs in that case sought social security benefits (although their argument rested on constitutional rather than statutory grounds), not tort damages. Moreover, we do not accept the Government's suggestion that, unless tort claims are viewed as "arising under" the benefits subchapter, future claimants will simply transform claims for benefits into tort actions. The action here is not one for benefits or for "negligent denial of benefits;" it thus supplies no precedent for any wholesale transformation of "benefit claims" into "tort claims."

More importantly, however, to accept the Government's argument would imply that tort claims against the Government in general arise not only under the Federal Tort Claims Act and state law, but also under whatever statute the defendant agency happens to be administering. Such statutes may well have jurisdictional limitations or unique procedural requirements, as, for example, does the Veterans' Benefits Act, which forbids court review of any administrative decision under the Act. ³ Thus, the Government's argument, if accepted, would replace a reasonably uniform and clear system for handling tort suits against the government (embodied in the Tort Claims Act) with a hodge-podge of procedural requirements, drawn from a host of different statutes, not necessarily drafted with tort suits in mind. In this case, for example, the "administrative hearing" procedures of § 405(g) are well suited to the decision of benefit claims. But they are anomalous if applied to tort claims. Tort claims are ordinarily presented to a district court for de novo decision within six months of an agency decision. 28 U.S.C. § 2675. By contrast, a claim that reaches the district court via the administrative hearings of § 405(g) and (h), is subject to a different time limitation and does not receive a de novo court hearing. If §§ 405(g) and (h) apply, the agency would enjoy an unusual amount of discretion to decide the facts of the tort claim against it. We are aware of no reason why so totally different a system for resolving tort claims against the government should apply to claims that happen to grow out of administration of the Social Security Act. The Government offers us no evidence that such was the intent of Congress, here or elsewhere, nor does it explain how, or why, that result would be desirable. Thus, we find its "jurisdictional" argument without merit.

2. We also believe that the district court erred in finding plaintiff's claim covered by the "misrepresentation" exception to the Federal Tort Claims Act. In determining the proper scope of the § 2680(h) exceptions, we must turn to the "traditional and commonly understood definition of the tort." United States v. Neustadt, 366 U.S. 696, 706, 81 S.Ct. 1294, 1300, 6 L.Ed.2d 614 (1961). To accomplish this task, we refer, as did the Supreme Court in Neustadt, to the Restatement (Second) of Torts, and to federal cases construing the exception.

The district court based its holding that this was a "misrepresentation" case upon the fact that the harm to the plaintiff was caused by a false statement, namely, the keypunching error which resulted in entering into the social security records the "fact" that plaintiff's mother died in 1975, rather than 1976. But, this false statement did not directly injure the plaintiff; it was simply the internal bureaucratic cause of other agency action-dishonoring the checks. It was failure to honor the checks that hurt the plaintiff and about which he now complains.

If the fact that a tortious act is caused by a false statement were sufficient to bring it within the Federal Tort Claims Act's misrepresentation exception, the results would be bizarre. An injured pedestrian could not recover if, for example, the government truck driver ran over him because his co-worker falsely told him that the light was green. Nor could a homeowner recover should a government demolition crew wreck his house after being sent to the wrong address. Such cases are not, however, typically considered as examples of the separate tort category of "misrepresentation." Rather, the Restatement, noting that "misrepresentation runs all through the law of torts as a method of accomplishing various types of (other) tortious conduct," adds that such cases are "usually grouped under categories of their own." Id., ch. 22, scope note at p. 54. Thus, inducing a person to eat chocolates that are poisoned is considered a "battery," restraining a person by falsely claiming legal authority to arrest him is considered "false imprisonment," and causing an accident by signalling a wrong turn is treated as ordinary negligence. Id. Dean Prosser adds that such "misrepresentation has been merged to such an extent with other kinds of misconduct that neither the courts nor legal writers have found occasion to regard it as a separate basis of liability." W. Prosser, Torts 684 (4th ed. 1971).

Insofar as "misrepresentation" is viewed as a separate, independent tort, it involves activity different from that at issue here. The tort arose out of "deceit," initially in commercial contexts, where one party to a business transaction would falsely represent to another facts likely to influence the other's decision. While the Restatement indicates that the tort of misrepresentation involves the dissemination of information...