Garling v. EPA , 849 F.3d 1289 ( 2017 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS March 7, 2017
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
ROGER GARLING; SHERYL
GARLING; R AND D ENTERPRISES,
INC.,
Plaintiffs - Appellants,
v. No. 16-8028
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,
Defendant - Appellee.
_________________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF WYOMING
(D.C. NO. 1:15-CV-00036-SWS)
_________________________________
Christopher S. Pugsley (Anthony J. Thompson, with him on the briefs), Thompson &
Pugsley, Washington, D.C., appearing for Appellants.
C. Levi Martin, Assistant United States Attorney (Christopher A. Crofts, United States
Attorney, with him on the brief), Office of the United States Attorney for the District of
Wyoming, Cheyenne, Wyoming, appearing for Appellee.
_________________________________
Before MATHESON, McKAY, and MORITZ, Circuit Judges.
_________________________________
MATHESON, Circuit Judge.
_________________________________
Roger Garling, Sheryl Garling, and their business, R and D Enterprises, Inc.,
(collectively, “the Garlings”) sued the United States for damages arising from an
Environmental Protection Agency (“EPA”) raid and investigation of their laboratory.
The district court held the Garlings’ action time-barred under the Federal Tort Claims
Act (“FTCA”). The Garlings appeal, arguing the EPA’s conduct was a continuing
tort or, alternatively, that they were entitled to equitable tolling.
Exercising jurisdiction under 28 U.S.C. § 1291, we conclude that sovereign
immunity barred the Garlings’ claims and the district court thus lacked subject matter
jurisdiction. We therefore reverse the district court’s judgment and remand with
directions to dismiss this action for lack of jurisdiction.
I. BACKGROUND
In reviewing a district court’s dismissal under Rule 12(b)(1) or 12(b)(6), “[w]e
accept as true all well-pleaded factual allegations in the complaint and view them in
the light most favorable to the [plaintiff].” SEC v. Shields, 744 F.3d 633, 640 (10th
Cir. 2014) (quotations omitted) (Rule 12(b)(6)); see Ruiz v. McDonnel, 299 F.3d
1173, 1180 (10th Cir. 2002) (Rule 12(b)(1)). We therefore recite the facts as alleged
in the Garlings’ Second Amended Complaint, the operative complaint here.
A. Factual Background
Roger and Sheryl Garling owned and operated the Casper, Wyoming branch of
Energy Laboratories, Inc. (“ELI”), a commercial laboratory business.1 The EPA initiated
an investigation after an ELI employee told the EPA that ELI was submitting false water
quality reports. On October 30, 2007, agents from the EPA’s Criminal Investigation
1
Roger and Sheryl Garling own R and D Enterprises, Inc., which owned the
properties ELI leased for its Casper, Wyoming business operations.
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Division (“EPA-CID”) and other federal officers executed an armed raid of the ELI
facilities pursuant to a search warrant.
On February 25, 2008, as a result of the raid, ELI forced the Garlings to resign. In
February 2009, the Garlings met with Jack Rychecky, the EPA officer in charge of
implementing the Safe Drinking Water Act (“SDWA”) program in the region covering
Wyoming. He informed them that he had advised EPA-CID, based on his belief that the
agency lacked a sufficient factual basis, against conducting the raid. In September 2009,
Assistant U.S. Attorney (“AUSA”) James Anderson confirmed to the Garlings’ attorney
that they were the targets of the EPA’s investigation.
From June 2011 to March 2013, the Garlings filed several Freedom of Information
Act (“FOIA”) requests with the EPA about the investigation. The EPA terminated its
investigation on October 18, 2012, without filing charges.
B. Procedural History
On May 12, 2013, the Garlings filed an FTCA administrative claim with the EPA
seeking damages “due to EPA’s 2007 raid and subsequent investigation.” Aplt. App. at
18. The EPA denied the claim.2 The Garlings requested reconsideration, which the EPA
denied.
On March 9, 2015, the Garlings filed an FTCA action in the United States District
Court for the District of Wyoming. Their Second Amended Complaint alleged injuries as
2
Although the EPA’s denial cited the Garlings’ “fail[ure] to state a claim . . .
for which relief is available,” see Aplt. App. at 18, an agency is not required to state
a reason for denying an FTCA administrative claim, see 28 C.F.R. § 14.9(a) (stating
the notice of denial “may include a statement of the reasons for the denial”).
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a result of “EPA officials’ reckless and grossly negligent conduct.” Id. at 8. The
Garlings attempted to assert seven claims: (1) “reckless and/or gross negligence in the
form of criminal investigation” (“tortious investigation”), (2) false imprisonment,
(3) false arrest, (4) abuse of process, (5) defamation, (6) intentional infliction of
emotional distress, and (7) conspiracy. Id. at 23.
The United States moved to dismiss under Federal Rule of Civil Procedure
12(b)(6), arguing the Garlings failed to meet the FTCA’s two-year statute of
limitations to file their administrative claim. See 28 U.S.C. § 2401(b). It also moved
to dismiss the tortious investigation and defamation claims under Rule 12(b)(1) for
lack of subject matter jurisdiction because the FTCA does not waive the United
States’ sovereign immunity for those claims.
The district court dismissed the Garlings’ entire FTCA action as time-barred.
It determined the Garlings’ claims accrued on the date of the EPA’s armed raid
(October 30, 2007) or, at the latest, the date their ELI employment ended (February
25, 2008)—more than five years before they filed their administrative claim. The
court did not address subject matter jurisdiction. The Garlings now appeal.
II. JURISDICTION
The district court’s ruling that the Garlings’ claims were time-barred was a
non-jurisdictional basis for dismissal. See United States v. Kwai Fun Wong, 135 S.
Ct. 1625, 1638 (2015) (holding “the FTCA’s time bars are nonjurisdictional”). To
reach the issue of timeliness, however, the district court needed to have had subject
matter jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94
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(1998) (“Without jurisdiction the court cannot proceed at all in any cause.”
(quotations omitted)). Thus, although the Garlings do not address this issue on
appeal, we must first consider whether the district court had subject matter
jurisdiction over their claims. See Bender v. Williamsport Area Sch. Dist., 475 U.S.
534, 541 (1986) (providing that federal appellate courts have an independent
obligation to examine subject matter jurisdiction).
Because we resolve this issue based on the complaint, we must accept its
factual allegations as true, see Ruiz, 299 F.3d at 1180, but not its legal conclusions,
see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Mere “labels and conclusions” do
not count. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).3
A. FTCA Waiver of Sovereign Immunity and Exceptions to Waiver
Sovereign immunity precludes federal court jurisdiction. FDIC v. Meyer, 510
U.S. 471, 475 (1994). “[T]he United States can be sued only to the extent that it has
waived its immunity.” United States v. Orleans, 425 U.S. 807, 814 (1976); see
United States v. Mitchell, 463 U.S. 206, 212 (1983) (“It is axiomatic that the United
States may not be sued without its consent and that the existence of consent is a
prerequisite for jurisdiction.”); Aviles v. Lutz, 887 F.2d 1046, 1048 (10th Cir. 1989)
3
Iqbal and Twombly addressed how a complaint should be analyzed in
response to a Rule 12(b)(6) motion to dismiss for failure to state a claim, rather than
a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. We agree
with the Fourth Circuit, which said that “when a defendant asserts that the [FTCA]
complaint fails to allege sufficient facts to support subject matter jurisdiction, the
trial court must apply a standard patterned on Rule 12(b)(6) and assume the
truthfulness of the facts alleged.” Kerns v. United States, 585 F.3d 187, 193 (4th Cir.
2009).
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(stating that, where Congress had not authorized suit under the FTCA, the district
court was “without subject matter jurisdiction”).
Through 28 U.S.C. § 1346(b)(1), the FTCA waives sovereign immunity for
certain state law tort claims against the United States. This provision is subject to 28
U.S.C. § 2680(h), which lists exceptions to waiver for various intentional torts. But
§ 2680(h) also includes language that restores waiver for some of those torts. The
ensuing overview attempts to make this clearer. We then apply this framework to
this case.
1. Waiver of Sovereign Immunity – § 1346(b)(1)
The FTCA “is a limited waiver of sovereign immunity, making the Federal
Government liable to the same extent as a private party for certain torts of federal
employees acting within the scope of their employment.” Orleans, 425 U.S. at 814.
Subject to the exceptions listed in § 2680, the FTCA permits:
civil actions on claims against the United States, for money damages . . .
for injury or loss of property, or personal injury or death caused by the
negligent or wrongful act or omission of any employee of the
Government while acting within the scope of his office or employment,
under circumstances where the United States, if a private person, would
be liable to the claimant in accordance with the law of the place where
the act or omission occurred.
28 U.S.C. § 1346(b)(1). “State substantive law applies to suits brought against the
United States under the FTCA.” Hill v. SmithKline Beecham Corp., 393 F.3d 1111, 1117
(10th Cir. 2004).
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2. Exceptions to Waiver – § 2680
Title 28 U.S.C. § 2680 lists exceptions to the FTCA’s waiver of sovereign
immunity. Id. § 2680(a)-(n). When an exception applies, sovereign immunity
remains, and federal courts lack jurisdiction. Aviles, 887 F.2d at 1048; see Franklin
v. United States, 992 F.2d 1492, 1495 (10th Cir. 1993) (stating that whether the
FTCA exception in § 2680(h) applies was a “question of subject matter
jurisdiction”); see also Milligan v. United States, 670 F.3d 686, 692 (6th Cir. 2012)
(“Because the FTCA is a jurisdictional statute, if a case falls within the statutory
exceptions of 28 U.S.C. § 2680, the court lacks subject matter jurisdiction . . . .”
(brackets and quotations omitted)); Hydrogen Tech. Corp. v. United States, 831 F.2d
1155, 1161 (1st Cir. 1987) (“[B]ecause 28 U.S.C. § 1346(b) provides that federal
courts shall have jurisdiction over FTCA claims ‘subject to’ . . . section 2680 [and]
the exceptions found in that section define the limits of federal subject matter
jurisdiction in this area.”).
Two of the § 2680 exceptions are relevant here: (1) claims involving
discretionary functions, § 2680(a), and (2) claims involving intentional torts,
including defamation, § 2680(h).
a. Discretionary function exception – § 2680(a)
Under § 2680(a), the United States is not liable for:
Any claim . . . based upon the exercise or performance or the
failure to exercise or perform a discretionary function or duty on
the part of a federal agency or an employee of the Government,
whether or not the discretion involved be abused.
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28 U.S.C. § 2680(a).
This discretionary function exception “marks the boundary between Congress’
willingness to impose tort liability upon the United States and its desire to protect
certain governmental activities from exposure to suit by private individuals.” United
States v. S.A. Empresa de Viacao Aerea Rio Grandense, 467 U.S. 797, 808 (1984).
Whether the exception applies depends on the nature of the agency’s conduct. See
United States v. Gaubert, 499 U.S. 315, 322 (1991). To determine whether agency
conduct falls within the exception, we apply a two-part test. See Garcia v. U.S. Air
Force, 533 F.3d 1170, 1176 (10th Cir. 2008) (citing Berkovitz v. United States, 486 U.S.
531, 536 (1988)). First, we determine whether the conduct was discretionary—whether it
was “a matter of judgment or choice for the acting employee.” Id. (quotations omitted).
“Conduct is not discretionary if a federal statute, regulation, or policy specifically
prescribes a course of action for an employee to follow. In this event, the employee has
no rightful option but to adhere to the directive.” Id. (quotations omitted). Second, if the
conduct was discretionary, we consider whether it required the “exercise of judgment
based on considerations of public policy.” Id. If both elements are met, the
governmental conduct is protected as a discretionary function, and sovereign immunity
bars a claim that involves such conduct. Id.b. Intentional tort exception – § 2680(h)
Sections 2680(b)-(n) list claims that are excluded from FTCA’s waiver of
sovereign immunity in § 1346(b)(1). The first clause of § 2680(h) excludes:
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Any claim arising out of assault, battery, false
imprisonment, false arrest, malicious prosecution, abuse of
process, libel, slander, misrepresentation, deceit, or
interference with contract rights[.]
28 U.S.C. § 2680(h). This provision is known as the “intentional tort exception.”
Millbrook v. United States, 133 S. Ct. 1441, 1442 (2013).
i. Exceptions to the intentional tort exception
Although § 2680(h)’s first clause preserves sovereign immunity for eleven
enumerated torts, its second clause waives sovereign immunity for six of those torts
when they arise from the “acts or omissions” of federal “law enforcement officers.”
See 28 U.S.C. § 2680(h). This clause states:
Provided, [t]hat, with regard to acts or omissions of
investigative or law enforcement officers of the United
States Government, the provisions of this chapter and
section 1346(b) of this title shall apply to any claim
arising, on or after the date of the enactment of this
proviso, out of assault, battery, false imprisonment, false
arrest, abuse of process, or malicious prosecution.
As the Supreme Court explained, Congress carved out an exception to
§ 2680(h)’s preservation of the United States’ sovereign immunity for intentional
torts “by adding a proviso covering claims that arise out of the wrongful conduct of
law enforcement officers.” Millbrook, 133 S. Ct. at 1443. “Known as the ‘law
enforcement proviso,’ this provision extends the waiver of sovereign immunity to
claims for six intentional torts”—assault, battery, false imprisonment, false arrest,
abuse of process, and malicious prosecution. Id.-9-
B. Analysis
Sovereign immunity bars all of the Garlings’ seven claims and precludes
federal court jurisdiction. First, the discretionary function exception in § 2680(a)
bars the tortious investigation, intentional infliction, false arrest, false imprisonment,
and abuse of process claims. Second, the intentional tort exception in § 2680(h)
precludes the defamation claim. Third, § 1346(b)(1) does not waive sovereign
immunity for the conspiracy claim because it would not be recognized under
Wyoming law.
1. Discretionary Function Exception
The discretionary function exception under § 2680(a) bars the Garlings’ claims
for tortious investigation, intentional infliction, false arrest, false imprisonment, and
abuse of process.
a. Tortious investigation
Applying part one of the test described above to the tortious investigation
claim, we conclude the EPA’s conduct was discretionary. If a “federal statute,
regulation, or policy [had] specifically prescribe[d] a course of action” for EPA-CID
employees to follow in conducting their SDWA investigation, the employees may
have had “no rightful option but to adhere to the directive.” See Berkovitz, 486 U.S.
at 536. If there were “no discretion in the conduct for the discretionary function
exception to protect,” the EPA-CID employees’ conduct here could possibly have
opened the United States to an FTCA suit. See id. But that was not the case here.
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Congress delegated broad authority to the EPA to implement and enforce the
SDWA. See 42 U.S.C. §§ 300f, 300g–2, 300g–3; 18 U.S.C. § 3063 (granting EPA
officers law enforcement authority for the investigation of criminal violations); Hydro
Res., Inc. v. EPA, 608 F.3d 1131, 1166 (10th Cir. 2010) (noting the EPA’s “considerable
discretion under the SDWA”). We have not found statutes, regulations, or policies
prescribing a specific course of action for EPA employees to follow in investigating
potential SDWA violations that would foreclose the discretionary function exception and
permit the Garlings’ tortious investigation claim.
The second part of the discretionary function test is satisfied because the
EPA’s investigation required the exercise of judgment based on public policy
considerations, such as ensuring safe drinking water.
The Garlings raised two arguments in district court attempting to show the
tortious investigation claim falls outside the discretionary function exception. Both
lack merit.
First, the Garlings argued a 1994 memorandum written by Earl E. Devaney,
Director of the EPA Office of Criminal Enforcement, (the “Devaney Memo”)
removed the EPA’s conduct from the protections of the discretionary function
exception. In fact, it does the opposite. The Devaney Memo, titled “The Exercise of
Investigative Discretion,” discusses the EPA’s significant discretion in identifying
misconduct worthy of investigation and pursuing potential wrongdoers. See Aplt.
App. at 110, 112. The Memo does not issue a specific directive that EPA employees
must follow. Instead, it acknowledges the EPA’s “full range of enforcement tools,”
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id. at 115, and offers general recommendations on allocating EPA resources to focus
on the most serious offenders, see id. at 112 (identifying “significant environmental
harm and culpable conduct” as important factors in EPA’s discretionary case
selection).
Second, the Garlings contended in district court that the EPA lacked discretion
because the agency had delegated primary SDWA enforcement authority to
Wyoming. But they provided no source for this contention, and EPA regulations
published on October 10, 2007, just before the EPA’s raid here, say the opposite:
“EPA has [SDWA] primacy [in] . . . Wyoming.” See National Primary Drinking
Water Regulations for Lead and Copper, 72 Fed. Reg. 57,782-01, 57,797 (Oct. 10, 2007)
(parenthesis omitted). The websites for the EPA and the Wyoming Department of
Environmental Quality (“DEQ”) also state that the EPA—not Wyoming—has
primary SDWA enforcement authority.4 And the Garlings cited nothing in support of
4
The EPA website states, “Wyoming is the only State that has not applied to
the [EPA] for authority to administer the public water supply program,” and thus
EPA Region 8 “directly implements the [SDWA]” in the state, including
“[l]aboratory certification” and “[f]ormal enforcement.” EPA Region 8 Drinking
Water Program, Wyoming Drinking Water Program, EPA, https://perma.cc/L7HG-
UYBZ (last visited Feb. 24, 2017). Wyoming’s DEQ website states, “EPA Region 8
has primary enforcement authority . . . for all [SDWA] regulatory programs,” except
for several programs not relevant here. Wyo. Dep’t of Envtl. Quality, What is
Primacy?, DEQ, https://perma.cc/73YH-ZT6Z (last visited Feb. 24, 2017).
These sources permit judicial notice of the EPA’s primary SDWA enforcement
authority in Wyoming. See Fed. R. Evid. 201(b); New Mexico ex rel. Richardson v.
Bureau of Land Mgmt., 565 F.3d 683, 702 & n.22 (10th Cir. 2009) (taking judicial notice
of facts on government websites and observing, “It is not uncommon for courts to take
judicial notice of factual information found on the world wide web” (quotations
omitted)); see also United States v. Windsor, 133 S. Ct. 2675, 2690 (2013) (citing
state government website for results of citizens’ initiatives concerning same-sex
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their argument that agency policy requires that “the EPA, states, and local agencies
work closely together” to share information and conduct investigations. See Aplt.
App. at 20-21. Even if the Garlings’ contentions were correct, they still have not
shown how the EPA’s discretion in conducting SDWA investigations is so limited as
to bar application of the discretionary function exception.
The Garlings’ tortious investigation claim thus falls within the discretionary
function exception to the FTCA. The district court lacked jurisdiction to consider
this claim because the United States has not waived sovereign immunity.
b. Intentional infliction
The Garlings’ intentional infliction claim also falls under the discretionary
function exception because it stems from the same conduct as the tortious
investigation claim—the EPA’s raid and investigation. See Sydnes v. United States,
523 F.3d 1179 (10th Cir. 2008) (holding intentional infliction claim barred under
discretionary function exception when the conduct giving rise to the claim was
discretionary). The district court therefore lacked jurisdiction over this claim.
c. False arrest, false imprisonment, and abuse of process
The district court also lacked jurisdiction over the Garlings’ claims for false arrest,
false imprisonment, and abuse of process. As discussed above, § 2680(h) at first
excludes these claims from § 1346(b)(1)’s waiver but then the law enforcement proviso
marriage); Denius v. Dunlap, 330 F.3d 919, 926-27 (7th Cir. 2003) (taking judicial
notice of information from government website).
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in § 2680(h) waives sovereign immunity for these claims when they arise from alleged
misconduct by federal law enforcement.
In determining whether the Garlings’ claims fall within the law enforcement
proviso, we look to the substance of their claims and not how they labeled them in their
complaint. The Sixth Circuit put it well: a plaintiff may not “recast a negligence tort as
an intentional tort to take advantage of the law enforcement exception to § 2680(h).”
Milligan, 670 F.3d at 696; see also Lambertson v. United States, 528 F.2d 441, 443 (2d
Cir. 1976) (“In determining the applicability of the [§] 2680(h) exception, a court must
look, not to the theory upon which the plaintiff elects to proceed, but rather to the
substance of the claim which he asserts.”); Johnson v. United States, 547 F.2d 688, 691-
92 (D.C. Cir. 1976) (“[S]urely a litigant cannot circumvent the [FTCA] by the simple
expedient of drafting in terms of negligence a complaint that in reality is a claim as to
which the United States remains immunized.”).
The Garlings’ complaint attempts to bring intentional tort claims without alleging
intentional tort facts. As to the false arrest claim, the complaint never alleges the
Garlings were arrested. Similarly, as to the false imprisonment claim, it never alleges the
Garlings were detained. Finally, the complaint never alleges facts showing that EPA had
the required “ulterior purpose” for an abuse of process claim in Wyoming. See Bosler v.
Shuck, 714 P.2d 1231, 1234 (Wyo. 1986). Indeed, the complaint conflates abuse of
process with its tortious investigation claim. See, e.g., Aplt. App. at 8 (complaint
alleging that “EPA officials acted with reckless and grossly negligent disregard when
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conducting the armed raid and, but for this abuse of process, the plaintiffs” would not
have been injured).
These three claims stem from the EPA’s raid and investigation, and the facts
alleged at most amount to negligence or recklessness. As discussed above, the
discretionary function exception precludes the claim for negligent or reckless
investigation. The Garlings attempt to ascribe the labels of “false arrest,” “false
imprisonment,” and “abuse of process” to these allegations to fit the law enforcement
proviso in § 2680(h). But considering, as we must, the substance of the allegations and
not the labels, we conclude the district court lacked jurisdiction over these claims.5
2. Defamation
The district court lacked jurisdiction over the Garlings’ defamation claim
because § 2680(h) excludes “libel” and “slander” from the FTCA’s waiver of
sovereign immunity. See 28 U.S.C. § 2680(h); Aviles, 887 F.2d at 1047-48.
Defamation claims are the “equivalent” of “libel” and “slander” and thus exempt
from the waiver of sovereign immunity under the intentional tort exception. Cooper
v. Am. Auto. Ins. Co., 978 F.2d 602, 613 (10th Cir. 1992).
5
We recognize the disagreement among the circuits regarding the interaction
between § 2680(a) and § 2680(h). Compare Nguyen v. United States, 556 F.3d 1244,
1257 (11th Cir.2009) (“[I]f a claim is one of those listed in the proviso to subsection
(h), there is no need to determine if the acts giving rise to it involve a discretionary
function; sovereign immunity is waived in any event.”), with Medina v. United
States, 259 F.3d 220, 224-26 (4th Cir. 2001) (holding that intentional tort claims
under § 2680(h) must also clear the discretionary function hurdle under § 2680(a)).
Because the Garlings fail to allege facts showing they were falsely arrested, falsely
imprisoned, or subject to an intentional abuse of process, they cannot use § 2680(h)
to avoid sovereign immunity, and we need not reach this issue.
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3. Conspiracy
Finally, as to the Garlings’ conspiracy claim, an FTCA claim must be recognized
as a tort under the “law of the place where the act or omission occurred.” 28 U.S.C.
§ 1346(b)(1); see Hill, 393 F.3d at 1117. The Wyoming Supreme Court has recognized
tort claims for conspiracy provided there is an underlying cause of action in tort. See
White v. Shane Edeburn Constr., LLC, 285 P.3d 949, 958 (Wyo. 2012). Because the
Garlings have no underlying causes of action remaining that overcome sovereign
immunity, the FTCA does not waive sovereign immunity for their conspiracy claim
because it would fail under Wyoming law.
III. CONCLUSION
We reverse the district court’s judgment and remand with directions to dismiss this
action for lack of jurisdiction.6
6
Because this action must be dismissed for lack of subject matter jurisdiction, we
do not address the Garlings’ arguments on appeal that their claims are not time-barred or
that equitable tolling should apply.
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