Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-04797/USCOURTS-cand-5_05-cv-04797-2/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:2671 Federal Tort Claims Act

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United States District Court

For the Northern District of California

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*E-FILED 5/19/06*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BART LAINE, 

Plaintiff,

 v.

UNITED STATES OF AMERICA,

Defendant. /

NO. C 05 -04797 (RS)

ORDER GRANTING MOTION

TO DISMISS FOR LACK OF

SUBJECT MATTER

JURISDICTION

I. INTRODUCTION

This motion to dismiss turns on a single question of law: May a plaintiff hold the United

States liable for negligence under the Federal Tort Claims Act (“FTCA”) where the alleged injury is

purely economic, and plaintiff has suffered no property damage or physical injury? By its language,

the FTCA confers jurisdiction only where a claim is for “injury or loss of property.” Even though it

is proper to look to state law as part of the analysis when determining if a particular claim is

cognizable under the FTCA, and even though California negligence law permits recovery of purely

economic damages in some circumstances, it does not appear that such damages can be considered

as flowing from an injury to “property” even under California law. The motion to dismiss will

therefore be granted. Because plaintiff has requested an opportunity to plead a different basis for

jurisdiction, leave to amend will granted.

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United States District Court

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1

 Laine’s opposition to this motion argues that the rule of liberal construction of the

pleadings under Rule 12 (b) (6) of the Federal Rules of Civil Procedure applies. That portion of

Laine’s opposition appears to misapprehend the fact that the Government’s motion is brought under

Rule 12 (b) (1), which governs challenges to jurisdiction, not sufficiency of the pleading. 

Nevertheless, the balance of Laine’s opposition demonstrates that the parties are in basic agreement

that this motion presents a legal issue to be resolved on the facts set forth above.

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 II. BACKGROUND

Plaintiff Bart Laine alleges that he has operated a commercial fishing vessel in and around

San Francisco Bay for over 30 years. Amended Complaint ¶ 7. He contends that during and around

2004, agencies of the federal government negligently released “contaminated water” into San

Francisco Bay during the course of a “salt pond restoration project.” Amended Complaint, ¶ 12.

Laine alleges that the discharge “directly and foreseeably caused [him] to lose present and

future profits, and destroyed and/or substantially impaired his business/livelihood.” Amended

Complaint, para. 16. The complaint does not elaborate, but it appears undisputed that Laine is

contending the discharge had a negative effect on the populations in the Bay of shrimp, fish, or other

wildlife on which his livelihood depends.

The Government’s motion offers considerable additional factual background regarding the

salt pond restoration project that gave rise to this action, and it implies that ultimately Laine will be

unable to show that it did anything wrong. The Government does not rely, however, on any of those

facts or arguments in making this motion. Instead, the motion is premised on certain aspects of the

complaint, namely that: 1) the Government acted with alleged negligence in causing or permitting

the discharge of “contaminated” water into San Francisco Bay; 2) the discharge allegedly resulted in

economic damage to Laine’s commercial fishing business; and 3) Laine has not alleged that the

discharge harmed his tangible personal or real property.1

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III. DISCUSSION

A. The Motion to Dismiss

The FTCA, 28 U.S.C. § 2671 et seq., waives sovereign immunity and confers jurisdiction on

federal courts to hear claims against the United States where the claim is “‘[1] against the United

States, [2] for money damages . . . [3] for injury or loss of property, or personal injury or death [4]

caused by the negligent or wrongful act or omission of any employee of the Government [5] while

acting within the scope of his office or employment, [6] 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.’” Federal Deposit Ins. Corp v. Meyer, 510 U.S. 4717, 477

(1994) (quoting 28 U.S.C. § 1346(b)). All six of these elements must exist for jurisdiction to lie. Id.

Here, the Government contends no jurisdiction exists because Laine is not alleging any

injury to “property.” The Government focuses its argument and cites authorities in an attempt to

show that neither Laine’s interest in wildlife that he has yet to harvest not his shrimping license

could be deemed “property.” Laine, in turn, does not seriously dispute the Government’s conclusion

that he lacks any traditional “property” interest that was harmed, but argues instead that his claim is

cognizable because the elements of California negligence law do not include any requirement of an

injury to “property” in that sense. In so arguing, Laine relies primarily on the sixth statutory element

(that the claim be recognized in state law), and glosses over the fact that the third element (injury or

loss of property) must also be present.

The critical issue is how to interpret the requirement that there be “injury or loss to

property.” The Government argues, in essence, that there must be injury to something owned by

plaintiff, something tangible, or at least nearly so. Relying only on a narrow sense of the word

“property,” however, does not give sufficient consideration to the fact that the FTCA is structured to

incorporate common law tort concepts, at least to some degree. In overturning a trial court decision

that had adopted a position very much like the one the Government advocates here, the Second

Circuit observed:

 In tort law, “injury to property” and “loss of property” have neither conventional nor

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2

 Devlin raises, but does not decide, the additional issue of whether the relevant common law

is a uniform federal common law or the common law of the particular state where the alleged wrong

occurred. 352 F.3 at 531-534. Although the parties here have cited primarily precedents involving

California common law, it does not appear that the result would be different under a “uniform”

approach.

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ordinary, dictionary-type meanings. They are, instead, defined in terms of the kinds

of harms to property for which a plaintiff may seek redress. As a result, in order to

determine whether there exists an “injury or loss of property,” we must examine

whether Plaintiff’s claim seeks to vindicate an interest that is given protection by the

general common law of torts. In other words, we must determine whether Plaintiff's

interest is treated as property for torts purposes.

Devlin v. United States, 352 F.3d 525, 538 (2nd Cir. 2003).

The Devlin court offered numerous examples of how, in the law, “property” and “injury to

property” can mean very different things under different circumstances. 353 F.3d at 537. “This is

so because ‘property is a term with a famously diffuse set of meanings across a range of areas of

law.” 353 F. 3d at 537. Furthermore, the Devlin court pointed out that it would be inconsistent with

the structure of the FTCA to conclude that the requirement of an “injury or loss of property” means a

physical injury to something tangible, similar to what the Government is arguing here:

Section 1346(b)(1) manifestly encompasses some torts that are not accompanied by a

“physical impact.” There is no doubt, for example, that legal malpractice is cognized

by the FTCA because Congress has prescribed special rules for FTCA claims relating

to the malpractice of Department of Defense and Coast Guard lawyers . . . See 10

U.S.C. § 1054(a) & (e).

That section 1346(b)(1) encompasses a wide sweep of intangible tort claims is also

evidenced by Congress' decision to limit that liability by setting out specific

exceptions in section 2680. These exceptions exclude some but not all

“non-physical” harms. See 28 U.S.C. § 2680(h) (barring claims arising out of, inter

alia, libel, slander, misrepresentation, deceit, and interference with contract rights). 

If the kind of “non-physical” harm at stake in interference-with-contract-rights

actions did not qualify as “injury or loss of property” in section 1346(b)(1), there

would have been little reason to exclude such actions in section 2680. 

352 F.3d at 536.

Under the principles explained in Devlin, the relevant inquiry is whether the plaintiff’s

interest is one afforded protection under the common law of torts–as if it were any other form of

“property.”2

 “In other words, we must determine whether Plaintiff”s interest is treated as property

for torts purposes.” 352 F.3d at 538. Thus, in Devlin itself, the court looked to a long history of

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3

 It is of at least some import that the expansion of the right to recover purely economic

damages from private defendants in some settings occurred largely subsequent to the time the FTCA

was enacted. In contrast, the Devlin court was able to point to a “wide-spread recognition” of the

type of interest at issue in that case existing “not only now, but at the time Congress used the phrase

‘injury or loss of property’ in the FTCA.” 352 F.3d at 540. 

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common law recognizing and protecting the expectancies of beneficiaries and heirs in estates to

conclude that an injury to such expectancies is within the meaning of “injury to property” under the

FTCA.

In this case, however, it does not appear that the common law has ever treated purely

economic interests of the type Laine is seeking to vindicate as if they are “property.” It is true that

beginning some decades ago a seminal line of California cases began to allow plaintiffs to recover in

negligence for purely economic injuries, but only under narrowly prescribed circumstances. See

Biakanja v. Irving, 49 Cal.2d 647 (1958); J’Aire Corp. v. Gregory, 24 Cal.3d 799 (1979); 

Ales-Peratis Foods v. American Can Co., 164 Cal.App.3d 277 (1985). Laine has not pointed to, and

independent research has not uncovered, any precedents that plainly treat the kind of economic

expectancy at issue here as if it were akin to other property rights.

Perhaps the closest case to these facts is Union Oil v. Oppen, 501 F.2d 558 (9th Cir. 1974), in

which the Ninth Circuit permitted commercial fisherman to pursue purely economic damages they

suffered after an oil spill decimated fisheries off the Santa Barbara coast. The Union Oil court

pointed specifically to the then-emerging trend under California law to permit recovery of economic

losses as having undermined the traditional rule to the contrary. 501 F.2d at 565-566. Nevertheless,

Union Oil was not a case brought against the government under the FTCA and nothing in its

discussion of the right to recover economic damages establishes that the right could or should be

construed as equivalent to a “property” right.3

Finally, there is Ninth Circuit authority, binding on this Court, that strongly supports a

conclusion that the injuries Laine is complaining of here are not cognizable as injury to property

under the FTCA. In Idaho ex rel Trombley v.United States, 666 F.2d 444 (9th Cir. 1982), the Ninth

Circuit held that the expenses a state incurred in fighting a fire on federal land that had not damaged

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4

 The Devlin court criticized Trobley for failing to analyze the meaning of “property” with

attention to “the text, history, or structure of the FTCA.” 352 F.3d at 536 n.11. It is not clear,

however, that the result would have been any different in Trombley under a more detailed analysis. 

Without an historical recognition in the common law of an interest that receives protection as if it

were property, there is no jurisdiction, even under the analytical framework used by the Devlin

court. In any event, the Devlin court was free to disregard Ninth Circuit precedent, but this Court is

not.

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any state property simply could not constitute damages for “injury or loss of property.” 666 F.2d at

446; see also In Oregon v. United States, 308 F.2d 568, 569 (9th Cir. 1962) (same). While incurring

expenses may not be equivalent to losing anticipated profits in all contexts, that is not a distinction

that helps Laine here. Trombley demonstrates that absent some basis for treating an economic loss

as an injury to a form of property, jurisdiction under the FTCA will not lie.4

B. Leave to Amend

At the hearing, Laine requested that he be given leave to amend in the event the motion were

granted, suggesting that there may be a basis for jurisdiction under some federal statutory basis other

that the FTCA. The Government did not challenge Laine’s right to plead any such claim that may

exist, but argued that once the existing claim is dismissed for lack of jurisdiction, there is nothing

left to “amend.” Granting this motion to dismiss does dispose of the “FTCA claim” on grounds that

preclude Laine from repleading a claim for relief grounded on FTCA jurisdiction. Nevertheless,

there is at least a theoretical possibility that the same basic facts are sufficient to give rise to some

other basis for jurisdiction in this Court. Accordingly, Laine will be permitted 20 days from the date

of this order within which to file an amended complaint if, in good faith, he can base his claims on

some alternate jurisdictional foundation. If no amended complaint is filed within that time, the

dismissal will become final.

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IV. CONCLUSION

The motion to dismiss is GRANTED. Unless, consistent with the leave granted by this

order, plaintiff files and amended complaint within 20 days, the dismissal will become final.

IT IS SO ORDERED.

Dated: May 19, 2006 

RICHARD SEEBORG

United States Magistrate Judge

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THIS IS TO CERTIFY THAT NOTICE OF THIS ORDER HAS BEEN GIVEN TO:

James Charles Brennan james.brennan@usdoj.gov,

Claire T. Cormier claire.cormier@usdoj.gov

Colleen O'Brien colleen@eastbayattorneys.com, info@eastbayattorneys.com

Troy B. Overton troy.overton@doj.ca.gov,

Counsel are responsible for distributing copies of this document to co-counsel who have not

registered for e-filing under the Court's CM/ECF program. 

Dated: 5/19/06 Chambers of Judge Richard Seeborg

By: /s/ BAK 

Case 5:05-cv-04797-RS Document 37 Filed 05/19/06 Page 8 of 8