Sterling v. U.S.

• Decision Date: 03 June 1996
• Docket Number: No. 95-1459,95-1459
• Citation: 85 F.3d 1225
• Parties: David Jay STERLING, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1225

85 F.3d 1225

David Jay STERLING, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 95-1459.

United States Court of Appeals Seventh Circuit.

Submitted March 19, 1996.

Decided June 3, 1996.

David Jay Sterling, Marion, IL, pro se.

James M. Hipkiss, Office of U.S. Atty., Civ. Div., Fairview Heights, IL, for U.S.

Before FLAUM, EASTERBROOK, and ROVNER, Circuit Judges.

EASTERBROOK, Circuit Judge.

The question presented by this case--which appears to be a novel issue--is whether someone who files and loses a Bivens suit against a federal employee is entitled to pursue a tort action against the United States. The district judge said no; we hold that the answer is yes and remand for proceedings on the merits.

David Jay Sterling alleges that, while he was a federal prisoner at Lewisburg, officer Miller either lost or intentionally destroyed a duffel bag full of legal materials. Sterling was sent to the "special housing unit." While he was there, four bags of possessions went to storage. When he was preparing his things for transfer to another prison, Sterling says, he discovered that one of the four had vanished. He wants compensation for the value of the missing property. He sued Miller in the Middle District of Pennsylvania. While the suit was pending, Sterling escaped from custody. Three months after Sterling's recapture, Judge Caldwell dismissed the suit against Miller as an application of the fugitive disentitlement doctrine. Sterling did not appeal but did commence another suit, this time against the United States, under the Federal Tort Claims Act. The new suit was filed in the Southern District of Illinois, for in the interim Miller had been transferred to Marion. Judge Stiehl observed that Judge Caldwell dismissed the suit with prejudice. Because Judge Stiehl viewed the Bivens and FTCA actions as identical claims, he held that Sterling's loss on the former meant that he must lose the latter too.

Both parties describe this as an application of "res judicata," and the United States relies on cases that forbid sequential claims against the same party. But of course Sterling has not sued the United States twice; he sued different parties, once apiece. (Actually, he has sued Miller twice, and the second suit against Miller has been dismissed on account of res judicata, but this is not material to the suit against the United States.) Using the same term for different sequences of litigation has a substantial potential for confusion, which is why the American Law Institute recommends the replacement of "res judicata" (and "collateral estoppel") by the more descriptive English phrases "claim preclusion" and "issue preclusion." See Restatement (2d) of Judgments (1980). Sterling has neither litigated nor lost any claim against the United States; we do not have an instance of merger and bar. Instead the United States seeks to take advantage of Sterling's failure in the litigation against Miller by interposing the defense usually called non-mutual issue preclusion ("non-mutual" because Sterling could not have used a victory in his suit against Miller as the basis of any relief against the United States). See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979); Restatement § 29. Liability under the Tort Claims Act is vicarious, and the United States wants to take advantage of the rule that, if an employee has been absolved of liability, there is no tort for which the employer can be vicariously liable. Restatement § 51.

The problem with applying this principle to the Bivens-FTCA sequence is that the two legal theories differ. Public liability under the FTCA does not depend on the employee's liability under Bivens. The FTCA creates a remedy for negligence and forbids relief on account of many intentional torts. 28 U.S.C. §§ 2674, 2680(h). The domain of Bivens in a case such as this, however, is limited to intentional deprivations. Parratt v. Taylor, 451 U.S. 527, 101 S.Ct 1908, 68 L.Ed.2d 420 (1981), which held that a negligent loss of a prisoner's property violates the due process clause, was overruled on this point by Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986). To obtain damages from Miller, therefore, Sterling had to show that Miller intentionally and without justification destroyed his property. Damages could be obtained from the United States on a lesser showing--that Miller negligently lost or destroyed Sterling's property. A victory for Miller therefore does not imply victory for the United States. Our sequence fits nicely the proviso in § 51(1)(a) of the Restatement, which covers cases in which the "claim asserted in the second action is based upon grounds that could not have been asserted against the defendant in the first action".

Although the United States readily could lose at the same time as Miller prevailed, it may be that both the United States and Miller should prevail. When denying Sterling's administrative claim under the FTCA, the Bureau of Prisons concluded that Miller destroyed the duffel bag and its contents because Sterling told him to do so:

On March 6, 1992, you were ordered to report to the property room of the [Special Housing Unit] to inventory your personal property. At that time, you requested that a great deal of what you referred to as "excess paperwork" be destroyed by the officer. Your request was complied with and a[sic] inventory form was completed to verify the final disposition of the papers you requested be destroyed. Therefore, the only destruction of your papers at USP, Lewisburg were [sic] at your specific request.

Does Miller's victory establish that Sterling asked Miller to destroy the documents? Issue preclusion applies only to issues actually and necessarily resolved in the first case, Cohen v. Bucci, 905 F.2d 1111 (7th Cir.1990); Mortell v. Mortell Co., 887 F.2d 1322 (7th Cir.1989); Restatement § 27, so the United States cannot take advantage of Miller's victory. Judge Caldwell did not actually find any fact in Miller's favor; any finding that Sterling asked Miller to destroy the property would not have been essential to that disposition. Had Judge Caldwell found that Miller intentionally destroyed the duffel bag, then a further finding that Sterling asked him to do so would have been necessary to a decision in Miller's favor. But Judge Caldwell did not reach the merits of Sterling's claim, so the kind of findings that would assist the United States were not made.

Judge Stiehl believed that Sterling was obliged to join the United States as a party to the initial action in Pennsylvania, but he did not cite any authority for that proposition. Victims are free to litigate separately against joint tortfeasors. Temple v. Synthes Corp., 498 U.S. 5, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990); Lawlor v. National Screen Service Corp., 349 U.S. 322, 75 S.Ct. 865, 99 L.Ed. 1122 (1955). Legal rules may make joinder difficult, and the FTCA is one of these. A victim is forbidden to file suit against the United States until first presenting an administrative claim. 28 U.S.C. § 2672. Failure to heed that requirement can cost a victim any opportunity to recover damages. McNeil v. United States, 508 U.S. 106, 113 S.Ct. 1980, 124 L.Ed.2d 21 (1993). The Bureau of Prisons did not act on Sterling's administrative claim until shortly before the Pennsylvania case was dismissed. And the United States was in no position to make itself a party in the Pennsylvania case. Under the Westfall Act, the United States usually is substituted for a federal employee accused of committing a tort in the course of his duties; but the statute forbids substitution when the employee is alleged to have violated the Constitution, as Sterling accused Miller of doing. 28 U.S.C. § 2679(b)(2)(A). This also shows that Miller and the United States were not the "same party" on a virtual-representation theory. The Westfall Act keeps the United States and its employees distinct in constitutional-tort cases. The function of Bivens reinforces this understanding. Sterling's original action was against Miller in his personal rather than official-capacity. See Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980). Miller would have paid any judgment personally; the point of Bivens was to establish an action against the employee to avoid the sovereign immunity that would block an action against the United States, and thus would block an official-capacity action too. Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985). Miller and the United States therefore are not privies for purposes of the rules of preclusion. See Charles Koen & Associates v. Cairo, 909 F.2d 992, 999 n. 7 (7th Cir.1990); Conner v. Reinhard, 847 F.2d 384, 394-96 (7th Cir.1988).

Because the FTCA creates vicarious liability, a judgment in favor of the United States usually implies that the federal employee also is entitled to prevail, while a judgment against the United States implies that the victim has received full compensation. Congress has provided that litigation against the United States precludes a later suit against the federal employee. 28 U.S.C. § 2679(b)(1). The express prohibition on a suit against the employee following judgment in a suit against the United States--coupled with the absence of any bar on litigation against the United States following a judgment in favor of an employee--has led one court of appeals to conclude that the latter sequence is proper. Ting v. United States, 927 F.2d 1504, 1513 n. 10 (9th Cir.1991); cf. Serra v. Pichardo, 786 F.2d 237 (6th Cir.1986). These decisions do not discuss the law of issue preclusion. Now that the question has been presented squarely, we hold that a decision in the employee's favor is not automatically preclusive in the United States' favor. A party who wants to raise different legal theories of liability against the same defendant must present all in a single case....