Page 3
Ninth Circuit:
Sovereign Immunity Bars Suit Over Allegedly Contaminated Shipyard
Opinion Affirms Dismissal of Action by S.F. Police Officers Against U.S. Relating to City’s Use of Allegedly Radioactive Federal Premises
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals held yesterday that sovereign immunity bars a class action by San Francisco Police Department officers against the U.S. alleging various tort claims relating to the lease of an allegedly contaminated Navy shipyard to the city for use as an outdoor training facility.
Contamination, according to the pleading, is due to the former presence of a research laboratory tasked with the decontamination of radioactive vessels used in nuclear tests.
The question presented in the case is whether provisions of the Federal Tort Claims Act (“FTCA”) which waive immunity as to most tort claims apply to the suit. An exception, found at 28 U.S.C. §2680(h), excludes certain classes of tort actions from FTCA’s broad sovereign immunity waiver, including “[a]ny claim arising out…misrepresentation.”
The complaint, filed in April 2020, asserts negligence claims for failure to warn, misrepresentation, and infliction of emotional distress, among others. The plaintiffs allege that the Navy misrepresented the safety of the site in the lease documents with the city, causing them to be exposed to hazards leading to health problems and elevated risks of developing life-threatening illnesses.
They argue that §2680(h) exception does not attach to the suit because any misrepresentations underpinning their claims were made by the federal government to the city and not directly to them.
Motion Granted
District Court Judge James Donato of the Northern District of California granted the government’s motion to dismiss the complaint in its entirety due to sovereign immunity and judgment was entered against the plaintiffs on Jan. 17, 2023.
Circuit Judge Kenneth K. Lee authored the opinion affirming the judgment. Circuit Judge Daniel Aaron Bress and District Court Judge Gloria M. Navarro of the District of Nevada, sitting by designation, joined in the opinion.
Lee wrote:
“We hold that the FTCA’s misrepresentation exception to the sovereign immunity waiver applies because it precludes any claims ‘arising out of’ a misrepresentation….And in our case, the plaintiffs’ claims ‘arise’ out of the Navy’s alleged misrepresentations, even if the Navy did not directly make them to the plaintiffs. Our precedent— which directs courts to look at the ‘gravamen’ of the complaint—confirms our reading of the FTCA’s misrepresentation exception.”
Plain Text
Noting that the court has “generally given ‘arising out of’ or ‘arising from’…broad construction in other statutory contexts,” Lee said:
“[B]y its plain text, section 2680(h) does not merely preclude claims for misrepresentation. Rather, it bars any claim ‘arising out of’ misrepresentation….[H]ere, the claims plainly ‘arise out of’ the Navy’s alleged misrepresentations to the City and the SFPD about hazardous substances at the shipyard. The complaint alleges that the Navy’s misrepresentations to ‘the City…about the hazardous substances used and released at [the site] was a substantial factor in causing the Plaintiffs’ ’ injuries….In sum, the complaint makes clear that the claims arise out of the Navy’s misrepresentations—and that they thus fall within the FTCA’s misrepresentation exception.”
The jurist remarked that “this reading of the FTCA’s ‘arising out of’ language dovetails with our case law providing that courts should determine whether the government’s misrepresentation constitutes the ‘essence’ or ‘gravamen’ of a plaintiff’s complaint.”
Looking to the allegations of the complaint, Lee said:
“Here, the Navy’s alleged misrepresentations are not ‘collateral to the gravamen’ of the complaint…but rather ‘essential’ to each claim….[B]ecause the ‘gravamen’ or ‘essence’ of the claims is rooted in misrepresentation, they ‘arise out of’ the Navy’s allegedly false statements and fall within the FTCA’s misrepresentation exception.”
Foreseeable Victims
The plaintiffs contend that because they did not personally rely on any false statements they are merely foreseeable victims of the misrepresentations made to the city about the contaminated property.
Citing cases dealing with the traditional tort of negligent misrepresentation—which requires detrimental reliance by a plaintiff as an essential element of the claim—they argue that their action does not qualify as a “misrepresentation” case for purposes of §2680(h).
Unpersuaded, Lee pointed out that the cases relied upon by the plaintiffs failed to squarely address the issue and concluded that “[o]ur decision today is consistent with circuit precedent: our circuit has taken a broad view of the FTCA’s misrepresentation exception and applied it even if the allegedly false statement was not made directly to the plaintiff.”
He added:
“We are also not alone in our interpretation of the FTCA’s misrepresentation exception. The Eleventh Circuit has squarely held that the misrepresentation exception applies even if the alleged misrepresentation was neither received nor relied on by the plaintiff….
“The Fifth Circuit, too, has similarly applied the misrepresentation exception to bar FTCA claims when a plaintiff’s alleged injury results from third-party reliance on the government’s misrepresentations.”
Duty of Disclosure
The plaintiffs argue that the Comprehensive Environmental Response, Compensation, and Liability Act (“CERLA”) imposes a specific duty of accurate disclosure on the Navy, implicitly limiting the §2680(h) exception.
Sec. 120(h) of CERCLA provides:
“[W]henever any department…of the United States enters into any contract for the…transfer of real property which is owned by the United States and on which any hazardous substance was stored for one year or more…the head of such department…shall include in such contract notice of the type and quantity of such hazardous substance and notice of the time at which such storage, release, or disposal took place….”
Lee said:
“This is a question of first impression in this circuit, and it appears that no other court has addressed the issue. Section 120(h) is silent as to its effect not only on the FTCA’s misrepresentation exception but also on potential tort liability under CERCLA more generally. Using ordinary principles of statutory construction, we conclude that Congress did not silently waive sovereign immunity for certain misrepresentation claims under CERCLA section 120(h).”
He continued:
“The statutory silence about the FTCA—or tort claims more generally—takes on added significance given that CERCLA actually does waive sovereign immunity for certain claims. Section 120(a)(1) unambiguously waives sovereign immunity for CERCLA suits—at least to recover for clean-up costs….So, although Congress expressly waived sovereign immunity for clean-up lawsuits in CERCLA, it remained silent about suspending or limiting waiver exceptions for tort lawsuits against the United States. This circumscribed waiver in CERCLA suggests that Congress did not disturb the FTCA’s sovereign immunity waiver framework. In short, there is simply no indication from the text of section 120 that Congress intended to suspend the FTCA’s misrepresentation exception sub silentio.”
He declared that “we decline the plaintiffs’ invitation to infer such intent out of thin air.”
Contaminated Site
The leased site was part of Hunters Point Naval Shipyard, a 965-acre former naval base located along the San Francisco Bay. During the Cold War, the Naval Radiological Defense Laboratory operated on the land.
In 1989, the Environmental Protection Agency designated Hunters Point Shipyard as a “Superfund” site, requiring the Navy to remediate it before it could be reused.
The Navy contracted with Tetra Tech Inc. to oversee the clean-up activities. The plaintiffs allege that the Navy negligently supervised the management of the decontamination process and Tetra Tech perpetrated extensive fraud and failed to adequately decontaminate the site before it was leased to the city for use by the police department.
The plaintiffs are defined in the complaint as officers with the San Francisco Police Department who worked at the leased site between 1997 and the present, as well as their spouses, and surviving family members of deceased former officers.
The complaint avers that the plaintiff officers “sustained acute physical injuries at or near the time of their exposure (including, for example, rashes and other skin conditions, adult onset asthma, other respiratory complaints, fatigue, and headaches).”
The case is Abbey v. U.S., 23-15170.
Copyright 2024, Metropolitan News Company