Pesnell v. Arsenault

• Decision Date: 21 June 2007
• Docket Number: No. 04-56721.,04-56721.
• Citation: 490 F.3d 1158
• Parties: David PESNELL, Plaintiff-Appellant, v. Jeffrey ARSENAULT, a natural person acting under color of federal law; Janet R. Lintz, a natural person acting under color of federal law; Thomas P. Gallagher, a natural person acting under the color of federal law; Douglas J. Morgan, a natural person acting under color of federal law, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

490 F.3d 1158

David PESNELL, Plaintiff-Appellant, v. Jeffrey ARSENAULT, a natural person acting under color of federal law; Janet R. Lintz, a natural person acting under color of federal law; Thomas P. Gallagher, a natural person acting under the color of federal law; Douglas J. Morgan, a natural person acting under color of federal law, Defendants-Appellees.

No. 04-56721.

United States Court of Appeals, Ninth Circuit.

Submitted October 16, 2006.^*

Filed June 21, 2007.

Ronald J. Tocchini and Jason M. Sherman, Tocchini & Associates PC, Roseville, CA, for the appellant.

Robert I. Lester and Sharla Cerra, Assistant United States Attorneys, Los Angeles, CA, for the appellees.

Appeal from the United States District Court for the Central District of California; Audrey B. Collins, District Judge, Presiding. D.C. No. CV-03-07533-ABC.

Before: PROCTER HUG, JR., HARRY PREGERSON, and RICHARD R. CLIFTON, Circuit Judges.

Opinion by Judge HUG; Partial Concurrence and Partial Dissent by Judge CLIFTON.

HUG, Circuit Judge.

This case involves the issue of when an action brought under the Federal Tort Claims Act ("FTCA") bars a later proceeding against the federal employees whose acts or omissions gave rise to the FTCA claims. We hold that the FTCA claims were dismissed for lack of jurisdiction and that the subsequent claims against the federal employees are not barred. We reverse the district court's dismissal of the subsequent action on the ground of procedural bar and remand for consideration of the remaining issues in the case. This case also involves a request for recusal of the district judge; we affirm the denial of that request.

I. Background

Pesnell long contended that he owned two million acres of land in California. His claim to title depended upon records dating back to the Mexican-American War. In 1998, the United States brought a quiet title action against Pesnell and others. In 1999, the district court entered judgment for the United States. That ruling extinguished Pesnell's claims to title of the real property. United States v. Sierra Alpine, CV 98-585-ABC (C.D.Cal.1999).

In 2000, Pesnell brought an action against the United States and several federal agencies in the federal district court in Arizona. Pesnell v. United States, CV 00-0399-JCC (D.Ariz.2000) ("Pesnell I"). In that action, Pesnell brought claims pursuant to the FTCA, 28 U.S.C. § 1346(b)(1).¹ Pesnell based his basic contention on two incidents. The first incident involved research allegedly costing $150,000. He did considerable research to establish his claim to title to the two million acres. Pesnell loaned this research to federal agents in 1988. The agents promised to return the research, but never did. Pesnell, therefore, had to reconstruct the research. The second incident involved his reconstructed research, allegedly costing $200,000. Federal agents took this research in 1995. The federal district court dismissed all the claims, and this court affirmed in April 2003. Pesnell v. United States, 64 Fed.Appx. 73 (9th Cir. 2003).

Pesnell filed the current federal action in September 2003 in the Central District of California against four government employees. Pesnell's first amended complaint alleges four causes of action. The first is a federal civil Racketeer Influenced and Corrupt Organizations Act ("RICO") claim, in violation of 18 U.S.C. § 1962(c); the second is a state civil RICO claim in violation of Arizona Revised Statute section 13-2314.04(A); the third is a Bivens² constitutional claim for the violation of Pesnell's Fourth Amendment right by the defendants based on an unlawful search and seizure of Pesnell's person and property; the fourth is a Bivens claim under the Fifth Amendment for the defendants having taken and kept his property without due process of law.

The district court granted the government's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) based on the FTCA's judgment bar rule set forth in 28 U.S.C. § 2676. Pesnell appeals, contending that Pesnell I was dismissed for lack of jurisdiction, and thus it was not a judgment on the merits, as is required by the judgment bar rule.

II. Judgment Bar Rule

The judgment bar rule of the FTCA provides: "The judgment in an action under section 1346(b) of this title shall constitute a complete bar to any action by the claimant, by reason of the same subject matter, against the employee of the government whose act or omission gave rise to the claim." 28 U.S.C. § 2676. Pesnell does not contest that his Bivens claims arise out of the same subject matter as his FTCA claims.

The parties agree that for the judgment bar rule to apply the judgment must be on the merits, not based on lack of jurisdiction. The parties are correct. Where a court dismisses an action because it does not meet the requirements of the waiver of sovereign immunity under the FTCA, the court is ruling that the action was not properly brought under the FTCA. Thus, the only action the court can take is to dismiss the complaint. The action was not properly brought in the first place and therefore the court had no ability to render a judgment on the merits. A lack of subject matter jurisdiction "goes to the very power of a court to hear a controversy; . . . [the] earlier case can be accorded no weight either as precedent or as law of the case." Orff v. United States, 358 F.3d 1137, 1149-50 (9th Cir.2004) (quoting United States v. Troup, 821 F.2d 194, 197 (3d Cir.1987)). Thus, the dismissal of the earlier case does not result in a "judgment" within the meaning of the judgment bar rule of § 2676. The court in the earlier case merely ruled that the action was not properly brought under the FTCA.

III. Subject Matter Jurisdiction of Pesnell I

We review de novo the existence of subject matter jurisdiction. Coyle v. P.T. Garuda Indonesia, 363 F.3d 979, 984 n. 7 (9th Cir.2004). In this appeal, we are required to determine whether our affirmance of the dismissal of the claims in Pesnell I was on the merits or for lack of jurisdiction. Pesnell brought five FTCA counts alleging unjust enrichment, constructive trust, conversation, negligence, and misrepresentation against the Government. He also brought claims for wrongful search and seizure and violation of due process under the Fourth, Fifth, and Fourteenth Amendments.

Specifically, we held Pesnell's claims of unjust enrichment and constructive trust were "appropriately dismissed for lack of jurisdiction." Pesnell, 64 Fed.Appx. at 74 (emphasis added). We also held that, because Pesnell failed to exhaust his administrative remedies with respect to his conversion and negligence claims, "[t]he district court therefore lacked jurisdiction to consider [his] prematurely filed claims." Id. (emphasis added). We also upheld the dismissal of Pesnell's misrepresentation claim as proper, noting that the FTCA "specifically exempts claims for misrepresentation from its waiver of sovereign immunity," and therefore the dismissal was also based on lack of subject matter jurisdiction. Id. Additionally, we held that the FTCA does not include a waiver of sovereign immunity for constitutional tort claims. Id. Therefore, those claims were also dismissed for lack of jurisdiction. Thus, in Pesnell I, we affirmed the dismissal of all of Pesnell's FTCA claims on grounds of lack of subject matter jurisdiction.

Because we conclude that the judgment in Pesnell I was based on lack of jurisdiction, the FTCA's judgment bar rule does not preclude Pesnell from bringing his current Bivens and RICO claims arising out of the same subject matter. Similarly, this action is not barred by res judicata or collateral estoppel because each of these doctrines requires a final judgment on the merits. See Providence Health Plan v. McDowell, 385 F.3d 1168, 1174 (9th Cir. 2004); Kourtis v. Cameron, 419 F.3d 989, 994 (9th Cir.2005).

A.

Response to the Dissent's Argument on Jurisdiction

The dissent contends that our ruling is in conflict with Gasho v. United States, 39 F.3d 1420 (9th Cir.1994), in which we held that a prior judgment in an FTCA action did constitute a judgment bar under § 2676. Id. at 1437-38. The Gasho case is a complex one, in that it involved the appeals of two separate cases arising out of the seizure of an airplane and the arrest of its occupants. Id. at 1425. The first appeal in Gasho concerned whether the district court had erred in granting a summary judgment for the Government on claims arising from the arrest and seizure of the airplane. Id. at 1427. We reversed the district court's summary judgment in favor of the Government for the claims arising from the arrest for lack of probable cause. Id. at 1432. We affirmed the summary judgment for the Government on the claims arising from the seizure of the aircraft. Id. at 1439.

In the second Gasho appeal, which involved a Bivens action, we held that a judgment for or against the Government in the first Gasho case precluded a later Bivens action. Id. at 1437. Because we reversed the judgment on the claims arising out of the arrest in the first appeal, there was no judgment to preclude a Bivens action in the second appeal. Id. at 1438. We held however, that the judgment for the Government arising from the aircraft seizure precluded a later Bivens action. Id.

A claim for the wrongful seizure of an aircraft is actionable under 28 U.S.C. § 1346(b)(1), unless the claim is excepted under 28 U.S.C. § 2680. This, however, requires a substantive factual determination, on the merits, of the nature of the tort; that is whether the alleged tortious act of the agent falls within the scope of activities exempted in § 2680. The opinion in Gasho interpreted § 2680

as requiring the United States to first demonstrate that the Customs or IRS agent's tortious conduct falls within the scope of activities exempted in § 2680(c). If such a showing is made, the claim is barred. If the government fails to show that the tortious conduct is exempt, the...