O'Toole v. U.S.

• Decision Date: 10 July 2002
• Docket Number: No. 01-15310.,01-15310.
• Citation: 295 F.3d 1029
• Parties: Bartley H. O'TOOLE; Lilly E. O'Toole, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1029

295 F.3d 1029

Bartley H. O'TOOLE; Lilly E. O'Toole, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

No. 01-15310.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 13, 2002.

Filed July 10, 2002.

COPYRIGHT MATERIAL OMITTED

Stewart R. Wilson, Wilson and Barrows, Ltd., Elko, NV, for the plaintiffs-appellants.

Lowell V. Sturgill, Jr., United States Department of Justice, Washington, DC, for the defendant-appellee.

Appeal from the United States District Court for the District of Nevada; Philip M. Pro, District Judge, Presiding. D.C. No. CV-00-00113-PMP.

Before: HAWKINS and SILVERMAN, Circuit Judges, and RESTANI, Judge.^*

SILVERMAN, Circuit Judge.

The O'Tooles have a ranch upstream from government-owned property held in trust by the Bureau of Indian Affairs. They allege that the BIA's negligent maintenance of the irrigation system on its property caused the river to back up onto their land, resulting in considerable damage. The district court dismissed the case for lack of subject matter jurisdiction, finding that the government's actions fell within the discretionary function exception to the Federal Tort Claims Act. We hold that the BIA's decision to spend its limited funds in other ways, allowing the irrigation system to fall into disrepair, is not protected by the discretionary function exception to the FTCA.

I. BACKGROUND

The O'Tooles own Home Ranch, an 800-acre ranch in Nye County, Nevada, used primarily for raising livestock and hay production. Home Ranch's water and irrigation systems are supplied by the Reese River. Downstream on the Reese River from Home Ranch is Bowler Ranch. Bowler Ranch was purchased by the United States in 1937, when it became part of the Yomba Shoshone Indian Reservation. The land is held in trust for the Shoshone Indian Tribe by the United States, under the direct control of the BIA, and consists of approximately 1,200 irrigated acres that also draw water from the Reese River. The original irrigation system on Bowler Ranch dates from the 1860s, and additional irrigation dams were built around 1980.

The O'Tooles allege that, prior to 1983, the United States performed the needed periodic maintenance on the Bowler Ranch irrigation system. On one occasion, the government even went so far as to enter Home Ranch to clean out river sediment deposited there because the irrigation canals on the Reservation had not been adequately cleaned. The O'Tooles allege that since 1983, however, almost no maintenance work has been performed on the upper half of Bowler Ranch. By 1998, according to the O'Tooles, this negligent lack of maintenance caused water and sediment from the Reese River to back up onto and flood the O'Tooles' property, resulting in over $346,213 in damage in lost crops and sediment removal. The O'Tooles claim that they had warned the United States that this would happen, but to no avail.

The O'Tooles further allege that the United States contracted with the Shoshone Tribe in 1989 to maintain the Bowler Ranch irrigation system. Part of this agreement obliged the Tribe to "maintain all delivery and supply canals in good condition," to "keep the canals and laterals from plugging up with weeds and silt," to "[c]ontrol[] vegetative growth along the canals and laterals," and to "[m]aintain [the] river channel by removal of excessive silt and vegetation so as to provide for runoff in a manner that does not damage the irrigation system and adjacent fields." The O'Tooles claim that the United States paid the Tribe over $300,000 under the contract, despite the Tribe's failure to perform. They allege that, in addition to their own warnings, the government also had numerous reports prepared which alerted it to the condition of the irrigation system.

After exhausting their administrative remedies, the O'Tooles filed a complaint against the United States, alleging negligence under the FTCA. The United States moved to dismiss, claiming its actions fell under the discretionary function exception to the FTCA, and depriving the court of subject matter jurisdiction. The core of the government's argument is that the BIA has never had the resources necessary to repair the irrigation system on the Reservation, which has been repeatedly damaged by unusually heavy flooding. As a result, the BIA had "to prioritize among numerous competing demands for repair and maintenance on the Yomba Reservation irrigation system, and to address the needs that were most pressing in each fiscal year." The government contends that its failure to repair and maintain the Bowler Ranch irrigation system was the result of a policy decision involving allocation of scarce BIA resources. The district court agreed and dismissed the case. The O'Tooles argue that dismissal for lack of jurisdiction was in error.

II. JURISDICTION AND STANDARD OF REVIEW

This court has jurisdiction pursuant to 28 U.S.C. § 1291. "A district court's determination that it lacks subject matter jurisdiction under the FTCA and a district court's application of the discretionary function exception are ... reviewed de novo." Marlys Bear Medicine v. United States ex rel. Sec'y of Dept. of Interior, 241 F.3d 1208, 1213 (9th Cir. 2001). The plaintiff has the burden of showing there are genuine issues of material fact as to whether the exception should apply, while the government bears the ultimate burden of establishing that the exception applies. Miller v. United States, 163 F.3d 591, 594 (9th Cir.1998). All of the factual allegations in the plaintiff's complaint are to be taken as true in reviewing a discretionary function exception dismissal under the FTCA. Berkovitz v. United States, 486 U.S. 531, 540, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988).

III. ANALYSIS

A. Overview

As sovereign, the United States "can be sued only to the extent that it has waived its immunity" from suit. United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). The Federal Tort Claims Act waives the federal government's immunity from suit for a discrete class of lawsuits. 28 U.S.C. §§ 2671-80. It provides for government liability for "tort claims ... in the same manner and to the same extent as a private individual under like circumstances...." Id. at § 2674. The FTCA's broad waiver of sovereign immunity is limited by 28 U.S.C. § 2680, "a statutory reservation of sovereign immunity for a particular class of tort claims." Gager v. United States, 149 F.3d 918, 920 (9th Cir. 1998). Where an exception to the FTCA under § 2680 applies, the United States has elected not to waive its immunity from suit, and courts are without jurisdiction over such claims.

The FTCA exception at issue in this case, the discretionary function exception, precludes tort liability for "[a]ny claim based upon an act or omission of an employee of the Government ... based upon ... a discretionary function or duty...." 28 U.S.C. § 2680(a). The discretionary function exception to the FTCA serves to "insulate[ ] the Government from liability if the action challenged in the case involves the permissible exercise of policy judgment." Berkovitz, 486 U.S. at 537. It reflects Congress's "wish[ ] to prevent judicial `second-guessing' of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort." United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). In other words, "if judicial review would encroach upon th[e] type of balancing done by an agency, then the [discretionary function] exception" applies. Begay v. United States, 768 F.2d 1059, 1064 (9th Cir.1985).

Application of the discretionary function exception involves a two-part analysis. See United States v. Gaubert, 499 U.S. 315, 324-25, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991); Berkovitz, 486 U.S. at 536-38. First, we consider whether the government action at issue — here, the BIA's failure to adequately maintain the irrigation system on Bowler Ranch — involves the exercise of judgment or choice by the agency. Does "a federal statute, regulation, or policy specifically prescribe[ ] a course of action" that was not followed? Berkovitz, 486 U.S. at 536. If so, the agency's actions are not discretionary, the exception does not apply, and courts have jurisdiction over lawsuits alleging tortious harm resulting from such actions. There can be no exercise of discretion where an agency "has no rightful option but to adhere to [a] directive." Id. In Berkovitz, for example, the Division of Biologic Standards of the National Institutes of Health was statutorily required to receive certain manufacturer data prior to issuing licenses for polio vaccines. The Supreme Court held that the discretionary function exception did not apply to a plaintiff's claim that the agency had issued a license without first receiving that data. 486 U.S. at 540-45.

Where the agency's course of conduct is not mandated by statute or regulation, an FTCA plaintiff still can prevail under the second part of the analysis, which examines whether the government actions at issue "are of the nature and quality that Congress intended to shield from tort liability." Varig, 467 U.S. at 813. Government actions involving the exercise of judgment or choice are exempted from suit under the FTCA only if they are "susceptible to policy analysis," Gaubert, 499 U.S. at 325, and involve a "decision[ ] grounded in social, economic, and political policy," id. at 323 (quoting Varig, 467 U.S. at 814). In Gaubert, for example, the Court held that the discretionary function exception protected the government from liability for the allegedly tortious conduct of federal regulators in the day-to-day operation of a troubled savings and loan. 499 U.S. at 327-34. Likewise, in Varig, the Supreme Court held that the discretionary function exception insulated the government from a wrongful death...