Whitney v. United States

Decision Date27 May 2015
Docket NumberCV NO. 12-00382 HG-RLP
CourtU.S. District Court — District of Hawaii
PartiesLAURA M. WHITNEY and RICHARD WHITNEY, Individually and as Next Friends of Their Minor Sons E.W. and N.W., Plaintiffs, v. UNITED STATES OF AMERICA, Defendant.
ORDER DENYING PLAINTIFFS' OBJECTIONS TO THE MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT (ECF No. 138)

and

ADOPTING THE MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT (ECF No. 131)

Plaintiffs filed a medical malpractice action against the United States of America pursuant to the Federal Tort Claims Act. The Plaintiffs' complaint alleges injuries and damages sustained by N.W., a minor, his brother E.W., a minor, and their parents, Laura and Richard Whitney, as a result of N.W.'s delivery and birth at Tripler Medical Center in 2010.

Plaintiffs reached a proposed settlement with the Assistant United States Attorney that was conditioned upon approval by the United States Department of Justice. The Department of Justicerejected the proposed settlement.

Plaintiffs filed a Motion to Enforce Settlement.

The Magistrate Judge entered a Findings and Recommendation to Deny Plaintiffs' Motion to Enforce Settlement. (ECF No. 131). Plaintiffs object to the Findings and Recommendation. (ECF No. 138).

Plaintiffs' Objections (ECF No. 138) are DENIED.

The Court ADOPTS the Magistrate Judge's April 3, 2015 Findings and Recommendation (ECF No. 131).

PROCEDURAL HISTORY

On July 6, 2012, Plaintiffs Laura M. Whitney and Richard Whitney, Individually and as Next Friends of Their Minor Sons E.W. and N.W., filed a Complaint against the Defendant United States of America. (Complaint, ECF No. 1).

On January 27, 2014, a proposed settlement was placed on the record, which was conditional upon approvals by the Hawaii State Probate Court and the United States Department of Justice. (ECF No. 100).

On June 6, 2014, the Hawaii State Probate Court approved the settlement terms. (ECF No. 122-11).

On August 29, 2014, the Parties appeared before the Magistrate Judge and placed a revised proposed settlement on the record. (ECF No. 108).

On September 4, 2014, the Magistrate Judge issued an Orderapproving the reasonableness of the settlement, finding that it was in the best interests of the minors. (ORDER APPROVING SETTLEMENT ON BEHALF OF MINORS, ECF No. 109). The Magistrate Judge stated in his Order the specific terms and conditions of the settlement "including the necessity of the approval by the Attorney General of the United States." (Id. at p. 2).

On October 30 and November 28, 2014, the Magistrate Judge held status conferences to review the progress of the review of the proposed settlement by the United States Department of Justice. (ECF Nos. 111, 114).

At the January 15, 2015 status conference before the Magistrate Judge, counsel for the Defendant informed the Court that the proposed settlement was rejected by the United States Department of Justice. (ECF No. 118).

On February 19, 2015, Plaintiffs filed a MOTION TO ENFORCE SETTLEMENT. (ECF No. 122).

On March 16, 2015, Defendant filed its OPPOSITION TO PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT. (ECF No. 128).

On March 23, 2015, Plaintiffs filed a REPLY. (ECF No. 129).

On April 1, 2015, the Magistrate Judge held a hearing on Plaintiffs' Motion to Enforce Settlement. (ECF No. 130).

On April 3, 2015, the Magistrate Judge issued Findings and Recommendation to Deny Plaintiffs' Motion to Enforce Settlement. (ECF No. 131).

On April 14, 2015, the District Court Judge granted Plaintiffs' request for a one-week extension to file Objections to the Findings and Recommendation. (ECF No. 133).

On April 24, 2015, Plaintiffs filed their OBJECTIONS TO MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT. (ECF No. 138).

On May 5, 2015, the District Court Judge held a status conference and continued the Trial Date and the Trial-Related Deadlines. (ECF No. 140).

On May 7, 2015, Defendant filed their RESPONSE TO PLAINTIFFS' OBJECTIONS TO MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT. (ECF No. 141).

STANDARD OF REVIEW
Objections to a Magistrate Judge's Findings and Recommendation

A magistrate judge may be assigned to prepare findings and recommendations for a district judge on a pretrial matter that is dispositive of a claim. Fed. R. Civ. P. 72(b); 28 U.S.C. § 636(b)(1)(B). Any party may object to a magistrate judge's findings and recommendations, pursuant to United States District of Hawaii Local Rule 74.2.

If a party objects to the magistrate judge's findings or recommendations, the district court must review de novo thoseportions to which objection is made. United States v. Raddatz, 447 U.S. 667, 673 (1980); Fed. R. Civ. P. 72(b). The district court may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge, or recommit the matter to the magistrate judge. 28 U.S.C. § 636(b)(1)(C).

De novo review means the district court must consider the matter anew, as if it had not been heard before and as if no decision previously had been rendered. Dawson v. Marshall, 561 F.3d 930, 933 (9th Cir. 2009). The district court must arrive at its own independent conclusion about those portions to which objections are made, but a de novo hearing is not required. United States v. Remsing, 874 F.2d 614, 617-18 (9th Cir. 1989).

Motion to Enforce Settlement

A federal court has the equitable power to summarily enforce a settlement reached by the parties in a case pending before it. Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987). Federal courts generally apply state contract law principles to determine whether to enforce a settlement agreement. O'Neil v. Bunge Corp., 365 F.3d 820, 822 (9th Cir. 2004). Federal law governs the interpretation of contracts where, such as here, the United States is a party and the dispute involves federal law. Mohave Valley Irrigation & Drainage Dist. v. Norton, 244 F.3d 1164, 1165(9th Cir. 2001).

The Court agrees with Plaintiffs that because the terms of the proposed settlement and its revisions were placed on the record in this case, an evidentiary hearing would be redundant. Doi v. Halekulani Corp., 276 F.3d 1131, 1138 (9th Cir. 2002); Wilson v. Wilson, 46 F.3d 660, 665 (7th Cir. 1995).

ANALYSIS
I. The Assistant United States Attorney Did Not Have the Authority to Bind the United States

The federal government is not bound by the acts of its agent unless the agent is acting within the limits of his actual authority. Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947).

Pursuant to 28 U.S.C. §§ 516-19, the Attorney General of the United States is vested with the authority to conduct all litigation on behalf of the United States and its agencies and officers, unless otherwise provided by law. The Attorney General has the authority to settle any claim pursuant to the Federal Tort Claims Act. 28 U.S.C. § 2677. A portion of the Attorney General's authority to settle claims has been delegated to various subordinate officials within the United States Department of Justice. 28 U.S.C. § 510; 28 C.F.R. §§ 0.160-0.172.

The Attorney General has delegated settlement authority in civil cases to the Assistant Attorney General for the CivilDivision for claims up to $2 million dollars. 28 C.F.R. § 0.160(a)(2). Settlements higher than $2 million dollars must be recommended for approval by the Assistant Attorney General and approved by the Associate Attorney General. 28 C.F.R. § 0.160, 0.161(b).

The Magistrate Judge correctly determined that the amount of the proposed settlement between the Parties would require approval of the Associate Attorney General. (Findings and Recommendation at p. 10, ECF No. 131).

An Assistant United States Attorney cannot bind the government into a settlement that involves more than $2 million dollars, even if he represents that he has the authority to do so. See Turner v. United States, 875 F.Supp. 1430, 1436 (D. Nev. 1995); White v. U.S. Dept. of Interior, 639 F.Supp. 82, 88-90 (M.D. Pa. 1986).

The Magistrate Judge correctly found that Assistant United States Attorney Yee ("AUSA Yee") did not have the authority nor did he represent that he had the authority to bind the Defendant United States in Settlement. (Findings and Recommendation at pp. 10-11, ECF No. 131).

II. There Was No Mutual Assent by the Parties to All Material Terms that Would Constitute a Complete Settlement

The formation of a settlement contract requires a completesettlement on all its material terms. Callie, 829 F.2d at 890. Federal contract law is guided by general principles of contract law and by the Restatement on Contracts. First Interstate Bank of Idaho v. Small Business Administration, 868 F.2d 340, 343 (9th Cir. 1989). The Restatement Second of Contracts requires mutual assent to all material terms of the contract. See Restatement 2d of Contracts §§ 17, 18, 20.

Here, there was never a complete settlement agreement between the Plaintiffs and Defendant. Plaintiffs were aware that their negotiations with AUSA Yee were conditioned on approval by the Department of Justice.

A. The Settlement Process

On January 27, 2014, Plaintiffs and AUSA Yee placed a settlement agreement on the record. (Transcript of Settlement Proceedings held on 1/27/14, ECF No. 106). Plaintiffs' attorney acknowledged at the January 27, 2014 settlement conference that the settlement agreement was conditioned upon the approval of the Hawaii Probate Court and the United States Department of Justice. (Id. at pp. 3-4).

On June 6, 2014, the Hawaii Probate Court approved the terms of the proposed settlement agreement and issued a written order. (Order Granting Petition for Appointment of Special Conservator for Authority to Compromise Claim and to Fund Existing Trust at¶¶ G, J, attached as Ex. E-2 to Pla.'s Motion to Enforce Settlement, ECF No. 122-11).

Plaintiffs argue that the ...

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