Alan Gross v. United States , 771 F.3d 10 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 19, 2014 Decided November 14, 2014
No. 13-5168
ALAN GROSS AND JUDITH GROSS,
APPELLANTS
v.
UNITED STATES OF AMERICA,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:12-cv-01860)
Barry I. Buchman argued the cause for appellants. With
him on the briefs were Scott D. Gilbert, Natalie A. Baughman,
and Emily P. Grim.
Alan Burch, Assistant U.S. Attorney, argued the cause for
appellee. On the brief were Ronald C. Machen Jr., U.S.
Attorney, and R. Craig Lawrence and Michelle Lo, Assistant
U.S. Attorneys.
Before: HENDERSON, ROGERS and KAVANAUGH, Circuit
Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
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ROGERS, Circuit Judge: The Cuban Liberty and
Democratic Solidarity (Libertad) Act of 1996, Pub. L.
No. 104–114, 110 Stat. 785 (1996) (codified at 22 U.S.C. § 6021
et seq.), aimed “to assist the Cuban people in regaining their
freedom and prosperity, as well as in joining the community of
democratic countries that are flourishing in the Western
Hemisphere.” Id. § 3, 22 U.S.C. § 6022(1). The Act authorized
the President “to furnish assistance and provide other support for
individuals and independent nongovernment organizations to
support democracy-building efforts for Cuba.” Id. § 109, 22
U.S.C. § 6039. In that regard, the United States Agency for
International Development (“USAID”) entered a contract with
a private consulting firm, Development Alternatives, Inc.
(“DAI”), to provide humanitarian support to groups within
Cuba. DAI, in turn, contracted with Alan Gross to train the
Jewish community in Cuba to use and maintain information and
communication technologies, such as mobile phones, wireless
technologies, and personal computers. As his fifth trip to Cuba
was drawing to a close in December 2009, Mr. Gross was
detained and interrogated by Cuban authorities. In 2011, he was
convicted for his participation in “a subversive project of the
U.S. government that aimed to destroy the Revolution through
the use of communications systems out of the control of [Cuban]
authorities” and sentenced to fifteen years’ imprisonment.
Compl. ¶ 115 (alteration in original).
In 2012, Mr. Gross and his wife Judith sued DAI and the
United States, alleging negligence, gross negligence, negligent
infliction of emotional distress, and loss of consortium in
connection with Mr. Gross’s work in Cuba. In addition to
physical and emotional harm suffered by Mr. Gross, they
alleged that they “have suffered significant economic losses due
to Mr. Gross’s wrongful arrest and continuing wrongful
detention,” including “the destruction of Mr. Gross’s business,”
lost income, legal fees, and medical expenses. Id. ¶ 129
 3
(emphasis added). The Grosses settled their claims against
DAI. The United States moved to dismiss the claims against it
on the ground of sovereign immunity. The district court granted
the motion, ruling that the foreign country exception to the
waiver of sovereign immunity in the Federal Tort Claims Act
(“FTCA”), 28 U.S.C. § 2680(k), foreclosed the Grosses’ claims
“[b]ecause [their] injuries . . . stem from [Mr.] Gross’s
imprisonment in Cuba,” and that the exception did not, under
rational basis scrutiny, violate the Equal Protection Clause as
applied to the Grosses. Gross v. Dev. Alternatives, Inc., 946 F.
Supp. 2d 120, 124, 127 (D.D.C. 2013).
The Grosses appeal, and our review is de novo, see, e.g.,
Janko v. Gates, 741 F.3d 136, 139 (D.C. Cir. 2014). The court
“accept[s] the well-pleaded factual allegations set forth in [the
Grosses’] complaint as true for purposes of this stage of the
litigation and construe[s] reasonable inferences from those
allegations in [their] favor, although we are not required to
accept [the Grosses’] legal conclusions as true.” Doe v.
Rumsfeld, 683 F.3d 390, 391 (D.C. Cir. 2012). For the
following reasons, we affirm the dismissal of the complaint.
I.
The FTCA waives the United States’s sovereign immunity
from tort claims and, subject to exceptions, renders the United
States liable in tort as if it were a private person. See Sosa v.
Alvarez-Machain, 542 U.S. 692, 700 (2004); 28 U.S.C.
§ 1346(b)(1). When determining whether one of the exceptions
to that waiver applies, the court “is to identify those
circumstances which are within the words and reason of the
exception — no less and no more.” Dolan v. U.S. Postal Serv.,
546 U.S. 481, 492 (2006) (quoting Kosak v. United States, 465
U.S. 848, 853 n.9 (1984)) (internal quotation marks omitted).
Under the foreign country exception, the United States retains
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sovereign immunity from “[a]ny claim arising in a foreign
country.” 28 U.S.C. § 2680(k). The Grosses contend the
United States failed to meet its burden to show this exception
applies. Insofar as they maintain the district court erred as a
matter of law in construing the scope of the exception, their
challenge must fail at the outset.
In Sosa, the Supreme Court held that the foreign country
exception “bars all claims based on any injury suffered in a
foreign country, regardless of where the tortious act or omission
occurred.” 542 U.S. at 712. The Court rejected the
“headquarters doctrine,” under which this exception had not
applied to claims that a domestic act or omission had its
operative effect in another country. See id. at 701–10.
“[F]ollow[ing] the lead of Sosa,” this court held in Harbury v.
Hayden, 522 F.3d 413, 423 (D.C. Cir. 2008), that a plaintiff
“cannot plead around the FTCA’s foreign-country exception
simply by claiming injuries . . . that are derivative of the
foreign-country injuries at the root of the complaint” — in that
case, a widow’s “emotional injuries in the United States as a
result of the death of her husband [in Guatemala].” Id.
Resisting the force of this precedent, the Grosses emphasize
that Mr. Gross’s alleged economic injuries “have occurred
exclusively in the United States” and consequently are not
derivative of the injuries he has suffered in Cuba. Reply Br. 6.
They also point to the “unique facts,” Appellants’ Br. 20, that
his injuries were sustained when the United States sent him to
Cuba to fulfill U.S. objectives. But these arguments are either
another way of invoking the headquarters doctrine rejected in
Sosa or suggesting we can ignore this court’s interpretation in
Harbury of the foreign country exception as extending to
derivative injuries, which we cannot do, see LaShawn A. v.
Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996). Likewise, their
characterization of Mr. Gross’s economic injuries as “primary”
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rather than “derivative,” Reply Br. 7, does not advance the
Grosses’ cause because it misapprehends the holding in
Harbury and ignores the allegations of their own complaint.
The Grosses’ complaint attributes all of their alleged injuries to
Mr. Gross’s imprisonment in Cuba; they allege that they “have
suffered significant economic losses due to Mr. Gross’s
wrongful arrest and continuing wrongful detention.” Compl. ¶
129 (emphasis added). The complaint, on its face, therefore
establishes that the Grosses’ alleged economic injuries are
“based entirely on” injuries suffered by Mr. Gross in Cuba and
are “derivative” of those injuries under Harbury, 522 F.3d at
423.1
The Grosses insist that to cloak the United States in
immunity when “it sends a U.S. citizen into a foreign country to
accomplish U.S. Government objectives in what the United
States knows to be a dangerous fashion, and that citizen suffers
at least some injury in the United States as a result,” would
create a “sweeping new ‘government operations’ exception.”
1
The Grosses’ reliance on the non-binding analysis in S.H.
v. United States (“S.H. II”), — F. Supp. 2d. —, No. CIV. S-11-1963
LKK D, 2014 WL 3362366 (E.D. Cal. July 8, 2014), and S.H. ex rel.
Holt v. United States (“S.H. I”), No. CIV.S-11-1963 LKK DAD, 2013
WL 6086775 (E.D. Cal. Nov. 19, 2013), is unavailing. In S.H., the
Eastern District of California addressed the foreign country exception
in a negligence case where the alleged injuries to a child born in Spain
consisted of catastrophic neurological damage and cerebral palsy. A
threshold question was when and where the cerebral palsy “occurred.”
The S.H. district court conducted a choice-of-law analysis to conclude,
in the murky medical diagnostic context, that her injury occurred in
the United States. See S.H. II, 2014 WL 3362366, at *14, 16–17.
Because the complaint here alleges that Mr. Gross’s primary “injury”
is his imprisonment in Cuba, see Compl. ¶ 139, no choice-of-law
analysis is necessary to determine that the foreign country exception
bars the Grosses’ claims.
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Appellants’ Br. 20–21. This view is foreclosed by the plain text
of the foreign country exception and cases interpreting it. In
Harbury, the court considered the potential effect of allowing
derivative claims to proceed, despite the foreign country
exception, explaining that to do so “would threaten to ‘swallow
the foreign country exception whole.’” 522 F.3d at 423
(quoting Sosa, 542 U.S. at 703). Insofar as the Grosses seek to
highlight the inequity in denying redress to individuals sent to
foreign countries at the behest of the United States, their policy
argument is better directed to Congress.
The foreign country exception thus deprived the district
court of jurisdiction to address the Grosses’ FTCA claims, all of
which are based on or derivative of injuries suffered in Cuba.
II.
The Grosses’ contention under the Equal Protection Clause
fares no better. Reprising an argument they raised in opposing
the government’s motion to dismiss the complaint, they
maintain that the foreign country exception is unconstitutional
as applied to them because it “differentiates between two
classes of U.S. citizens injured due to U.S. Government
negligence: those whose injuries occur abroad and those whose
injuries occur in the United States.” Appellants’ Br. 21.
Applying rational basis scrutiny, which the Grosses agreed was
the proper inquiry, the district court found that a rational basis
for the disparity exists because the foreign country exception
“protect[s] the United States’ coffers from the whims of foreign
law,” Gross, 946 F. Supp. 2d at 126.
The Grosses maintain that “it is irrelevant whether
Congress’s basis in enacting the foreign country exception was
rational in general,” Appellants’ Br. 22, and that application of
the foreign country exception cannot be sustained because its
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“sole stated purpose” — avoiding the application of foreign law
— “would not be served” in their case, id. at 24. The district
court thus erred, they continue, by rejecting their constitutional
challenge without performing a choice-of-law analysis or
allowing for discovery and “by ascribing a purpose to the
foreign country exception different from the one actually stated
by Congress.” Id. at 28.
As an initial matter, to accept the Grosses’ view that the
foreign country exception applies only when foreign law would
control is contrary to Supreme Court instruction. In Smith v.
United States, 507 U.S. 197 (1993), the Court rejected the
argument that, as to a FTCA claim arising in Antarctica, which
has no law of its own, applying the foreign country exception
was unnecessary to further the exception’s goal of “insulat[ing]
the United States from tort liability imposed pursuant to foreign
law.” Id. at 200. In so doing, the Court looked to the text of the
foreign country exception, 28 U.S.C. § 2680(k); a different
provision of the FTCA, 28 U.S.C. § 1346(b), which it had
interpreted as “more than a choice-of-law provision” and
instead to “delineate[] the scope of the United States’ waiver of
sovereign immunity”; and “the presumption against
extraterritorial application of United States statutes.” Id. at
201–03.
Thereafter, in Sosa, the Court reaffirmed that Congress did
not write the exception to apply only when foreign law would
be implicated. The Court rejected the notion of “selective
application of headquarters doctrine . . . when a State’s choice-
of-law approach would not apply the foreign law of place of
injury.” 542 U.S. at 711. Such an application of the exception,
the Court concluded, would result in “a scheme of federal
jurisdiction that would vary from State to State, benefitting or
penalizing plaintiffs accordingly,” id., and the idea Congress
would have intended such a scheme of federal jurisdiction “is
8
too implausible to drive the analysis to the point of grafting
even a selective headquarters exception onto the foreign country
exception itself,” id. at 712. The Court acknowledged that the
argument “would be well taken . . . if Congress had written the
exception to apply when foreign law would be applied. But that
is not what Congress said.” Id. at 711. The foreign country
exception, the Court observed, was “written at a time when the
phrase ‘arising in’ was used in state statutes to express the
position that a claim arises where the harm occurs; and the odds
are that Congress meant simply this. . . .” Id.
Consequently, the Grosses attempt to minimize Sosa as
addressing only the scope of the foreign country exception, not
an as-applied challenge to the constitutionality of the exception.
Even so, well-settled precedent establishes that, under the
lenient rational basis test, “a classification neither involving
fundamental rights nor proceeding along suspect
lines . . . cannot run afoul of the Equal Protection Clause if there
is a rational relationship between the disparity of treatment and
some legitimate governmental purpose.” Armour v. City of
Indianapolis, 132 S. Ct. 2073, 2080 (2012) (quoting Heller v.
Doe, 509 U.S. 312, 319–20 (1993)) (internal quotation marks
omitted). “[T]he distinction between facial and as-applied
challenges . . . goes to the breadth of the remedy employed by
the Court, not what must be pleaded in a complaint.” Edwards
v. District of Columbia, 755 F.3d 996, 1001 (D.C. Cir. 2014)
(alterations in original) (quoting Citizens United v. FEC, 558
U.S. 310, 331 (2010)) (internal quotation marks omitted); “[t]he
substantive rule of law is the same for both challenges,” id.; see
Smith v. City of Chicago, 457 F.3d 643, 652 (7th Cir. 2006).
The precedents on which the Grosses rely to support their
view that the foreign country exception should not apply where
doing so would be inconsistent with the exception’s stated
purpose, even if that purpose is otherwise legitimate, are not to
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the contrary. In Wheeling Steel Corp. v. Glander, 337 U.S. 562
(1949), the Supreme Court held that an Ohio ad valorem tax
that had the purpose and effect of taxing the goods of non-
residents, while exempting the goods of Ohio residents, denied
two out-of-state corporations the equal protection of Ohio law.
Id. at 563–64, 573–74. The Court did not hold, as the Grosses
suggest, that “application of [a] statute in a manner that is
inconsistent with its stated purpose is unconstitutional,”
Appellants’ Br. 22. In Shelby County v. Holder, 133 S. Ct. 2612
(2013), the Supreme Court upheld a facial challenge to the
constitutionality of the coverage provision of the Voting Rights
Act on the ground that it was “irrational for Congress to
distinguish between States in such a fundamental way based on
40-year-old data, when today’s statistics tell an entirely
different story.” Id. at 2630–31. That the Court insisted that
Congress’s judgment be rational in light of “current conditions,”
id. at 2631, does not aid the Grosses; it is not the “current
circumstances,” Appellants’ Br. 22, of a particular litigant that
mattered to the Court, but rather the “current conditions” that
were before Congress when it enacted the statute, see Shelby
County, 133 S. Ct. at 2628–29.
Similarly, the Grosses’ objections that the district court
erred by failing to engage in a fact-specific analysis and to
allow discovery fail. In Richmond Medical Center for Women
v. Herring, 570 F.3d 165, 172 (4th Cir. 2009), on which the
Grosses rely, the Fourth Circuit did not state that all as-applied
challenges require a court to engage in a fact specific analysis.
Neither does Greater Baltimore Center for Pregnancy
Concerns, Inc. v. Mayor & City Council of Baltimore, 721 F.3d
264, 282 (4th Cir. 2013), on which they also rely, show the
district court was required to allow discovery. Although these
cases indicate that “a developed factual record” may sometimes
be required in as-applied constitutional challenges, Richmond
Med. Ctr., 570 F.3d at 172; see also Greater Balt. Ctr., 721 F.3d
10
at 282, neither addressed rational basis review in the context of
an as-applied Equal Protection challenge. (The district court
opinions in S.H. also do not aid the Grosses as no constitutional
challenge to the foreign country exception was raised. See 2014
WL 3362366; 2013 WL 6086775.) Moreover, the government
responds, inasmuch as the Grosses never moved for discovery
nor defended against the motion to dismiss their complaint on
the ground they had not yet taken discovery, no error can be
assigned on that ground. See Second Amendment Found. v. U.S.
Conf. of Mayors, 274 F.3d 521, 525 (D.C. Cir. 2001). Even on
appeal, the Grosses do not identify any particular discovery they
needed to defend against the government’s motion to dismiss on
jurisdictional grounds. Absent a plausible basis that would
permit them to overcome the jurisdictional bar, the Grosses fail
to show error by the district court in any event. Cf. Herbert v.
Nat’l Acad. of Sciences, 974 F.2d 192, 198 (D.C. Cir. 1992).
Finally, the Grosses object that the district court erred by
ascribing a purpose to the foreign country exception different
from that stated by Congress and acknowledged by courts, by
referring to logistical burdens potentially posed by their lawsuit.
See Gross, 946 F. Supp. 2d at 127. We find no error. Having
properly rejected the Grosses’ framing of the Equal Protection
inquiry — as requiring a rational basis for the exception as
applied to a U.S. citizen injured abroad where domestic law
would control the tort liability — the district court rejected their
Equal Protection challenge to the exception, referring to
Congress’s concern about the effect on the Treasury absent the
exception. See id. at 126 (citing Sosa, 542 U.S. at 707). The
district court then pointed out that even under the Grosses’
framing of the inquiry the foreign country exception did not
violate the Equal Protection Clause. The district court noted
that other circuit courts of appeal had recognized the exception
protects the United States from particularly burdensome
litigation. See id. at 127. Its own unremarkable observation
11
regarding logistical difficulties involving foreign injuries
required no development of the record and was irrelevant to the
Grosses’ claims.
Accordingly, we affirm the judgment of dismissal. In so
doing, we endorse the views expressed in the penultimate
paragraph of the district court’s opinion, Gross, 946 F. Supp. 2d
at 127.