Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-02558/USCOURTS-cand-3_05-cv-02558-3/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:2674 Federal Tort Claims Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARYLAND CASUALTY COMPANY,

Plaintiff,

 v.

 UNITED STATES OF AMERICA,

Defendant. /

No. C 05-02558 JSW

ORDER GRANTING

DEFENDANT’S MOTION FOR

JUDGMENT ON THE

PLEADINGS

Now before the Court is the motion by defendant United States of America

(“Defendant”) for judgment on the pleadings against plaintiff Maryland Casualty Company

(“Plaintiff”). Having carefully reviewed the parties’ papers, considered their arguments and the

relevant legal authority, and good cause appearing, the Court HEREBY GRANTS Defendant’s

motion for judgment on the pleadings.

BACKGROUND

On September 7, 2000, Defendant entered into a contract with Agbayani Construction

Corp. (“Agbayani”) to have a parking lot paved at the Coast Guard Training Facility in

Petaluma, California. (Br. at 3.) The contract gave Agbayani the responsibility of locating all

underground utilities in the excavation area. (Compl., Exh. B at 1.09; 3.01A.) Agbayani was

also required to mark utilities and to give one-week notice before trenching. (Compl., Exh. B at

1.13.) The contract also gave Agbayani responsibility for complying with “any Federal, State,

and municipal laws, codes, and regulations applicable to the performance of the work,”

including the standards issued by the Secretary of Labor at 29 CFR § 1926 and 29 CFR 

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§ 1910. (Declaration of Katherine B. Dowling (“Dowling Decl.”) at 3: 8-10, 4: 16-20.) Under

the contract, only the Contracting Officer and the Contracting Officer’s Representative/Contract

Program Manager had the power to stop or waive performance of the contract. (Compl., Exh. B

at E.3, G.1; Dowling Decl. at 4: 28, 5: 1-9.) In May 2003, Gerald D. Ryan served as the

Contract Program Manager for the contract between Agbayani and Defendant. (Declaration of

Gerald D. Ryan (“Ryan Decl.”) at ¶ 1.) 

Defendant provided Specifications to Agbayani along with drawings indicating the

approximate location of underground utilities. (Id. at ¶¶ 3-4 and Attachments.) These drawings

were also available to Agbayani and its subcontractors in the Facilities Engineering Office of

the Training Center. (Id. at ¶ 4.) The Specifications warned Agbayani that the drawings only

showed approximate locations, that Agbayani had the duty to “compare drawings and verify the

dimensions and conditions at the site before laying out the work,” and that Agbayani had the

responsibility to comply with hazard communication requirements and to locate underground

utilities. (Compl., Exh. C. at 1.13A, 1.14, 1.26, 3.01A.)

Agbayani hired a subcontractor, Goeble Paving, Grading and Underground (“Goeble”),

to perform the work for Defendant. (Opp. Br. at 1-2.) Goeble then subcontracted with J & A

Jeffrey Inc. dba Western Stabilization (“J & A”) to perform soil treatment at the project site. 

(Compl. at ¶ 8.) On May 30, 2003, Goeble asked Defendant’s Maintenance Supervisor, Fred

Heminger (“Heminger”), if there were any utilities in the area where they would be working. 

(Declaration of Thomas G. Dunn (“Dunn Decl.”) at ¶ 3.) Heminger “replied that the only

utilities in the area where the subcontractors would be mixing and working were high voltage,

storm drain, culverts and water lines.” (Id.) Later that day, J & A’s soil pulverizer was

destroyed when it hit an underground gas utility line. (Compl. at ¶ 10.)

On January 22, 2005, Plaintiff, as the subrogee of J & A, commenced the current action.

In its complaint, Plaintiff alleged that Defendant was negligent for failing to place signs,

placards, or stakes warning of the presence of underground propane pipelines; that Heminger

was negligent by informing the subcontractor that there were no underground pipelines in the

designated parking lot area; and that Defendant was negligent by failing to provide the

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subcontractors with “an updated plan or map depicting the location of all underground lines in

the vicinity of the planned excavation.” (Compl. at ¶¶ 15, 16, 17.)

ANALYSIS

A. Legal Standard Applicable to Motion for Judgment on the Pleadings.

The defense of lack of subject mater jurisdiction cannot be waived, and the court is

under a continuing duty to dismiss an action whenever it appears that the court lacks 

jurisdiction. Fed. R. Civ. P. 12(h)(3). When a defendant moves to dismiss a complaint or claim

for lack of subject matter jurisdiction, the plaintiff bears the burden of proving that the court has

jurisdiction to decide the claim. Thornhill Pub’g Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730,

733 (9th Cir. 1979). Rule 12(b)(1) jurisdictional attacks can be either facial or factual. White v.

Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “In a facial attack, the challenger asserts that the

allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.” 

Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a factual attack, “the

challenger disputes the truth of the allegations that, by themselves, would otherwise invoke

federal jurisdiction.” Id. In reviewing a factual attack on jurisdiction, the district court may

review evidence beyond the complaint without converting the motion to dismiss into a motion

for summary judgment. Id. “If the moving party converts ‘the motion to dismiss into a factual

motion by presenting affidavits or other evidence properly brought before the court, the party

opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of

establishing subject matter jurisdiction.’” Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.

2004) (citing Meyer, 373 F.3d at 1039). In a factual attack, “[n]o presumptive truthfulness

attaches to plaintiff’s allegations, and the existence of disputed material facts will not preclude

the trial court from evaluating for itself the merits of the jurisdictional claims.” Thornhill, 594

F.2d at 733. Here, Plaintiff does not dispute that Defendant’s motion is a factual attack on

subject matter jurisdiction. Defendant relies on extrinsic evidence and does not assert a lack of

jurisdiction based solely on the pleadings. 

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B. Plaintiff’s Complaint Is Barred by the Discretionary Function Exception.

1. Two-Part Test Applicable to Discretionary Function Exception.

Defendant moves for judgment on the pleadings based on the discretionary function

exception to the Federal Tort Claims Act, 28 U.S.C. § 2680(a) (“FTCA”). According to

Defendant, the discretionary function exception applies and thus deprives the Court of

jurisdiction to hear this case.

The FTCA waives governmental immunity from suits for negligence. 28 U.S.C. 

§ 2680(a); see also Chaffin v. United States, 176 U.S. 1208, 1211 (9th Cir. 1999). However, the

FCTA does not waive immunity when the government is performing a “discretionary function.” 

Miller v. United States, 163 F.3d 591, 593 (9th Cir. 1998). The discretionary function

immunizes the government from claims “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.” 28 U.S.C. 

§ 2680(a); see also Miller, 163 F.3d at 593. 

Courts use a two-part test to determine if the discretionary function exception applies. 

GATX/Airlog Co. v. United States, 286 F.3d 1168, 1173 (9th Cir. 2002). First, “the challenged

conduct must be discretionary – that is, it must involve an element of judgment or choice.” Id. 

“This requirement is not satisfied where a ‘federal statute, regulation, or policy specifically

prescribes a course of action for an employee to follow,’ because ‘[i]n this event, the employee

has no rightful option but to adhere to the directive.’” Id. at 1173-74 (citing Berkovitz v. United

States, 486 U.S. 531, 536 (1988)). 

Second, if “the conduct involves choice or discretion, the court must then ‘determine

whether that judgment is of the kind that the discretionary function exception was designed to

shield.’” Id. at 1174 (citing Berkovitz, 486 U.S. at 536). “The focus is on ‘the nature of the

actions taken and on whether they are susceptible to a policy analysis.’” Id. (citing United

States v. Gaubert, 499 U.S. 315, 325 (1991)). “The decision need not actually be grounded in

policy consideration so long as it is, by its nature, susceptible to a policy analysis.” Miller, 163

F.3d at 593 (citing Gaubert, 499 U.S. at 325) (emphasis added). When a statute or regulation

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allows a federal employee to act with discretion, “it must be presumed that the agent’s acts are

grounded in policy when exercising that discretion.” Gaubert, 499 U.S. at 324. Although the

plaintiff bears the burden of proving that the court has jurisdiction, the government bears the

burden of demonstrating the discretionary function exception applies. Miller, 163 F.3d at 594. 

If the discretionary function exception applies, governmental decisions are immune from

liability, even if such decisions were negligently made. Chaffin, 176 F.3d at 1211. 

2. Defendant’s Acts Involved Choice or Discretion.

Plaintiff contends that Coast Guard safety regulations required its officers to inform all

contract employers of the known potential fire, explosion, or toxic release hazards related to the

contractor’s work. (Opp. Br. at 5-9.) Plaintiff argues that Defendant had a duty to place

warning signs, placards, or stakes to mark underground utilities. (Opp. Br. at 4-8.) Defendant

argues that its conduct is protected by the discretionary function exception. (Br. at 6-12.)

Under the first prong of the discretionary function test, the challenged conduct must

involve an element of judgment or choice. GATX/Airlog Co., 286 F.3d at 1173. “This

requirement is not satisfied where a ‘federal statute, regulation, or policy specifically prescribes

a course of action for an employee to follow.’” Id. at 1173-74 (citing Berkovitz, 486 U.S. at

536). However, a general regulation or policy does not remove discretion unless it specifically

prescribes a course of conduct. Kelly v. United States, 241 F.3d 755, 761 (9th Cir. 2001). A

safety standard operates to remove discretion under the first prong of the discretionary function

test only when such standard “is embodied in a specific and mandatory regulation or statute

which creates clear duties incumbent upon the governmental actors.” Kennewick Irrigation

Dist. v. United States, 880 F.2d 1018, 1026 (9th Cir. 1989) (emphasis in original). General

duties to promote safety are insufficient to erase any discretion. Id.; see also Blackburn v.

United States, 100 F.3d 1426, 1433 (9th Cir. 1996) (holding that guidelines and regulations only

set out general goals and policies regarding identifying and warning of hazards and thus

necessarily involved discretion in determining the precise manner in which to meet such goals

and policies).

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Here, Plaintiff cites to various sections of the Coast Guard Safety and Environmental

Health Manual (“Manual”) in support of its contention that Defendant had a duty to warn

Agbayani of underground gas lines. (Opp. Br. at 5.) Plaintiff points, for example, to the Coast

Guard’s “fundamental safety and environmental health principle,” as stated in the Manual, of

continually managing “the safety and environmental health risks confronting Coast Guard

personnel in their professional and private lives to acceptable levels and never to accept

unnecessary risks.” (Dunn Decl., Exh. E at 1-1.) “This principle will be applied by identifying

hazards, assessing their risk and controlling risks to acceptable levels, consistent with the

mission or activity being performed.” (Id.) The Manual further states that “[a]lthough

contractors are primarily responsible for providing safe working conditions for their employees

and ensuring compliance with OSHA regulations, the Coast Guard has overall administrative

responsibility for its facilities and is responsible . . . to take reasonable steps to correct, or to

require the correction of, hazards of which it could reasonably be expected to be aware.” (Id. at

1-2.) The principles set forth in the Manual are not specific or mandatory enough to erase any

discretion. See Kennewick, 880 F.2d at 1026. Although Defendant retained the ability to

supervise, no statute, regulation, or policy imposed any specific, mandatory requirements or

regulated the manner in which the supervision must be carried out. The Manual provides only

that the Coast Guard will assess and control risks to acceptable levels. The means by which

Defendant met its general policy goals involved the exercise of discretion. Any alleged

government failure to properly supervise Agbayani’s exploration of underground utilities is a

discretionary function. Absent a specific and mandatory obligation to warn Agbayani of site

incidents or accidents, Defendant had discretion as to whether and how to warn Agbayani of all

known risks or dangers.

Plaintiff also cites to Commandant Instruction 6260.21B, which states that “Coast Guard

units will provide MSDS [Material Safety Data Sheet] information to contractors whose

employees perform work activities within unit facilities if hazardous materials are provided by

the Coast Guard. Information provided shall be sufficient to enable contractors to satisfy their

hazardous communication responsibilities.” (Dunn Decl., Exh. F.) This instruction does not

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 The contract between Agbayani and Defendant required Agbayani to “field verify

all utility locations before digging or trenching. This shall include but not be limited to the

use of sonic, electronic or magnetic detection devices, by noting pullbox and utility box

locations at the surface, and by potholing.” (Compl., Exh. B at 1.09.) Agbayani was also

required to give one-week notice before trenching and mark utilities. (Compl., Exh. B at

1.13.) In addition, the contract stated that “[i]n the event underground utilities exist in the

area of excavation, the contractor will be responsible for the location of such utilities.” 

(Compl., Exh. B at 3.01A.) Finally, the contract also gave Agbayani responsibility for

complying with “any Federal, State, and municipal laws, codes, and regulations applicable to

the performance of the work,” including the standards issued by the Secretary of Labor at 29

CFR § 1926 and 29 CFR § 1910. (Dowling Decl. at 3: 8-10, 4: 16-20.)

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present a specific and mandatory obligation as to how Defendant must warn of the location of

underground utilities. Defendant acted within its discretion by providing Specifications and

drawings to Agbayani and by placing the responsibility on Agbayani to comply with hazard

communication requirements. (Compl., Exh. C at 1.14, 1.26; Ryan Decl. at ¶ 3-5.)

Plaintiff next cites to the Code of Federal Regulations which requires the employer to

inform “contract employers of the known potential fire, explosion, or toxic release hazards

related to the contractor’s work and the process.” 29 CFR § 1926.64(h)(2)(ii); 29 CFR 

§ 1910.119(h)(2)(ii). This regulation, however, does not state specifically how the employer

must inform contract employers of the known hazards or how detailed such information must

be. Therefore, the employer retains discretion to decide exactly what information must be

provided to the contract employer. The Court finds that Defendant acted within the scope of its 

discretion by informing Agbayani of the known utilities by providing maps, warning Agbayani

that those maps were only approximations, and explicitly giving Agbayani the responsibility of

determining the precise location of the utilities. (Compl., Exh. B. at 1.09; Compl., Exh. C at

1.13-1.14; Dowling Decl. at 2: 2-18; Ryan Decl. at ¶¶ 4-6.)

Even assuming Defendant did have a duty to mark underground utilities, the contract

between Agbayani and Defendant clearly delegated that duty as well as the duty to comply with

safety regulations to Agbayani.1

 Plaintiff does not cite to any applicable statutes or regulations

prohibiting Defendant from exercising its discretion to delegate the duty to locate and mark

underground utilities. In addition, “[t]he law is clear that the government may delegate its

safety responsibilities to independent contractors in the absence of federal laws or policies

restricting it from doing so.” Andrews v. United States, 121 F.3d 1430, 1440 (11th Cir. 1997);

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see also United States v. S.A. Empressa de Viacao Aerea Rio Grandense (Varig Airlines), 467

U.S. 797, 820 (1984); Vallier v. Jet Propulsion Lab., 120 F. Supp. 2d 887, 913 (C.D. Cal.

2000).

Plaintiff cites to Camozzi v. United States, 866 F.2d 287 (9th Cir. 1989), in support of its

contention that the discretionary function does not apply. (Opp. Br. at 9.) In Camozzi, the

United States Postal Service (“USPS”) contracted with a contractor to supervise the

construction of a postal facility. Id. at 288. The court held that USPS was negligent in

performing its retained safety functions and that such negligence involved no policy choices. 

Id. at 290. However, in Camozzi, the USPS, through its contractor, assumed far greater

contractual obligations with respect to overall safety than did Defendant in this case. Id. at 289. 

Here, Defendant did not assume any specific contractual obligations with regard to safety. 

Rather, the contract gave Defendant broad discretion in determining how it would police

Agbayani’s (or its subcontractors’) compliance. Unlike the contract in Camozzi, the contract at

issue here did not prescribe specific and mandatory activities and oversight mechanisms with

which Defendant was required to comply. Accordingly, Camozzi does not support Plaintiff’s

contention that Defendant’s conduct is not protected by the discretionary function exception. 

Plaintiff fails to point to any regulation, statute, or self-imposed specific and mandatory

obligation on the part of Defendant to oversee safety in a particular manner. Accordingly, the

first prong of the discretionary function analysis is met.

Although Defendant’s decisions regarding the warnings provided to Agbayani, the

extent of its supervision of Agbayani, and the delegation of authority to Agbayani are

discretionary functions, the issue remains as to whether Heminger’s actions also fall within that

category. Plaintiff does not argue that the Contracting Officer or the Contract Program

Manager failed to warn Agbayani or its subcontractors of the underground gas pipe; rather,

Plaintiff argues that Heminger, failed to warn them of the pipe. (Compl. at ¶ 16.) The alleged

negligence of Heminger is irrelevant to the discretionary function inquiry. See Kennewick, 880

F.2d at 1029. The relevant inquiry is whether Heminger exercised a discretionary function. 

“[I]t is the nature of the conduct, rather than the status of the actor, that governs whether the

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discretionary function exception applies in a given case.” Varig Airlines, 467 U.S. at 813. A

court must consider whether the action is a matter of choice for the acting employee. Berkovitz,

486 U.S. at 536. “[I]f the employee’s conduct cannot appropriately be the product of judgment

or choice, then there is no discretion in the conduct for the discretionary function exception to

protect.” Id. The discretionary function exception “will not apply when a federal statute,

regulation, or policy specifically prescribes a course of action for an employee to follow.” Id. 

Here, again, Plaintiff has not identified, in the papers submitted to the Court or at oral

argument, a specific statute, regulation, or policy which specifically prescribes a course of

action for an employee like Heminger to follow. In addition, the evidence before the Court

suggests that Heminger had discretion in the manner in which he responded to the

subcontractor’s inquiry on May 30, 2003. Under the contract, only the Contracting Officer and

the Contracting Officer’s Representative/Contract Program Manager had the ability to stop

work on any portion of the job. (Compl., Exh. B at E.3, G.1; Dowling Decl. at 4: 28, 5: 1-9;

Ryan Decl. at ¶ 7.) Although Heminger did not have any authority to modify the Agbayani

Contract, or to waive performance by Agbayani of the responsibility to perform tests and bear

the expense to locate and mark underground utilities prior to conducting any excavation (see

Reply Br. at 3; Ryan Decl. at ¶ 7), Heminger did, as Facilities Engineer Karl Grams noted, have

“authority to exercise discretion with respect to issuing dig permits for construction and

maintenance work to protect Coast Guard personnel and property.” (Declaration of Karl Grams

(“Grams Decl”) at ¶ 3.) A dig permit was not required under the Agbayani contract; rather, the

decision whether a dig permit was required and whether to issue a dig permit fell within

Heminger’s discretion. (Id.) The only supervisory obligation that existed on Heminger’s part

fell within the general Coast Guard’s “administrative responsibility for its facilities” and its

responsibility “to take reasonable steps to correct, or to require the correction of, hazards of

which it could reasonably be expected to be aware.” (Dunn Decl., Exh. E at 1-2.) Such a

broadly phrased obligation allowed Coast Guard employees like Heminger substantial

discretion in deciding how to act. Plaintiff’s failure to cite an applicable mandatory directive

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establishes that the challenged actions of Heminger involved judgment or choice and were, in

fact, discretionary acts.

3. Defendant’s Judgments Were of the Kind the Discretionary Function

Exception Was Designed to Shield.

The second prong of the test to determine applicability of the discretionary function

exception is whether Defendant’s decision to delegate and its decision regarding its level of

supervision of Agbayani are of the nature and quality Congress intended to shield from liability. 

“There must be reasonable support in the record for a court to find, without imposing its own

conjecture, that a decision was policy-based or susceptible to policy analysis.” Marlys Bear

Med. v. United States, 241 F.3d 1208, 1216 (9th Cir. 2001). In general, “[w]hen an agency

determines the extent to which it will supervise the safety procedures of private individuals, it is

exercising discretionary regulatory authority of the most basic kind.” Varig Airlines, 467 U.S.

at 819-20 (1984). In addition, as previously stated, the law is “clear that the government may

delegate its safety responsibilities to independent contractors in the absence of federal laws or

policies restricting it from doing so.” Andrews, 121 F.3d at 1440. “When established

governmental policy . . . allows a Government agent to exercise discretion, it must be presumed

that the agent’s acts are grounded in policy when exercising that discretion.” Gaubert, 499 U.S.

at 324. In determining whether a decision is susceptible to policy analysis, the decision could

involve balancing interests, allocating resources, and setting priorities. Varig Airlines, 467 U.S.

at 820. 

Here, Defendant’s decision to delegate responsibility to Agbayani for locating the

underground utilities and its decision regarding the level of supervision applied to Agbayani are

susceptible to policy analysis. Such decisions require Defendant “to establish priorities for the

accomplishment of its policy objectives by balancing the objectives sought to be obtained

against such practical considerations as staffing and funding.” Varig Airlines, 467 U.S. at 820.

“In light of such practical considerations, an agency may determine that operational safety will

be enhanced through reliance on the contractor’s special expertise.” Hagy v. United States, 976

F. Supp. 1373, 1379 (W.D. Wash. 1997) (decision to delegate safety and warning

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responsibilities to contractor is the type of policy decision the discretionary function exception

was designed to shield); see also Duff v. United States, 999 F.2d 1280, 1281-82 (8th Cir. 1993) 

(decision to delegate safety issues to contractor grounded in policy because the decision

allowed the government to “take advantage of a contractor’s special expertise, thereby creating

the opportunity for a safer, more efficient operation”). As Michael Valerio, the Chief of the

Maintenance and Logistics Command for the Coast Guard, stated in his declaration, the

decision to delegate “is a policy choice that involves the balancing of social needs for

workplace safety, economic constraints of available governmental resources, political

considerations of utilizing outside specialists and providing business to minority owned

companies and the cos[t] benefit analysis of numerous projects requiring funding.” 

(Declaration of Michael (“Valerio Decl.”) at ¶ 2.) Furthermore, according to Valerio, hiring

independent contractors “with experience in the type of work to be accomplished helps to

increase workplace safety, to efficiently utilize available project funding and in certain

situations to allow the [United States Coast Guard] to foster minority owned business.” (Id. at ¶

3.) Such weighing of practical and policy considerations represents the kind of policy judgment

that Congress intended to protect through the discretionary function exception to the FTCA.

As for Heminger, even if his acts were discretionary, the Court must also determine

whether they were the product of a policy judgment. Berkovitz, 486 U.S. at 536. “It is

insufficient ‘[f]or the government to show merely that some choice was involved in the

decision-making process . . . . The balancing of policy considerations is a necessary

prerequisite.’” ARA Leisure Servs. v. United States, 831 F.2d 193, 195 (9th Cir. 1987) (citing

Drake Towing Co., Inc. v. Meisner Marine Constr., 765 F.2d 1060, 1064 (11th Cir. 1985)). In

Varig Airlines, the Supreme Court held that “the acts of FAA employees in executing a spotcheck program in accordance with agency directives [were] protected by the discretionary

function exception” because these employees “were specifically empowered to make policy

judgments regarding the degree of confidence that might reasonably be placed in a given

manufacturer, the need to maximize compliance with FAA regulations, and the efficient

allocation of agency resources.” 467 U.S. at 820. 

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Here, evidence before the Court indicates that Heminger’s actions in response to the

subcontractor’s inquiry on May 30, 2003 are susceptible to policy analysis. As Grams stated,

Heminger created the dig permit process “as a means of increasing overall safety at the Training

Center” and “was authorized to use his discretion to decide whether a dig permit was necessary

for each case.” (Grams Decl. at ¶¶ 3, 4.) Therefore, the evidence indicates that Heminger was

empowered to make policy judgments regarding the need for and issuance of a dig permit. The

Court concludes that Heminger’s actions are susceptible to a policy analysis and that the second

part of the discretionary function exception is satisfied. The application of the discretionary

function exception is an independently sufficient reason to grant Defendant’s motion for

judgment on the pleadings.

C. Under the Independent Contractor Exception to the FTCA, Defendant Is Not

Vicariously Liable for the Negligent Conduct of Its Independent Contractor.

Defendant contends that the Court lacks subject matter jurisdiction because Plaintiff’s

claims are barred by the independent contractor exception to the FTCA. 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.” United States v. Orleans, 425 U.S. 807, 813 (1976). The FTCA defines

Government employees to include “officers or employees of any federal agency.” 28 U.S.C. 

§ 2671. The term “federal agency” explicitly excludes “any contractor with the United States.” 

Id. “The United States is subject to liability for the negligence of an independent contractor

only if it can be shown that the government had authority to control the detailed physical

performance of the contractor and exercised substantial supervision over its day-to-day

activities.” Laurence v. Dep’t of the Navy, 59 F.3d 112, 113 (9th Cir. 1995). 

In order to determine whether Agbayani was a government employee, rather than an 

independent contractor, the Court must inquire whether Defendant possessed and exercised

substantial day-to-day control over Agbayani. The Court finds that the United States did not

exercise day-to-day control over Agbayani’s operations. Although Defendant had the

responsibility to require correction of hazards and the Contracting Officer’s

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 In Guild v. United States, a case preceding Block, “the Ninth Circuit expressed the

sometimes elusive distinction between negligent misrepresentation and other negligence

involving communication of information.” Rich Prods., 804 F. Supp. at 1273 (citing Guild, 685 F.2d 324, 325 (9th Cir. 1982)). Noting that “the key distinction is between the

performance of operational tasks and the communication of information,” the court in Guild

held that the “government is liable for injuries resulting from negligence in performance of

operational tasks even though misrepresentations are collaterally involved.” Guild, 685 F.2d

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Representative/Contract Program Manager retained the power to “stop work on any portion of

the job,” it appears that Defendant and the Contract Program Manager did not exercise 

substantial day-to-day control over Agbayani. (Dunn Decl., Exh. E at 1-2; Compl., Exh. B at

E.3.) As discussed in Part B, Defendant delegated significant responsibility to Agbayani,

including locating and marking underground utilities and complying with OSHA regulations. 

Accordingly, Defendant is not vicariously liable for the conduct of Agbayani. The application

of the independent contractor exception is an independently sufficient reason to grant

Defendant’s motion for judgment on the pleadings.

D. Plaintiff’s Claims Regarding Heminger’s Representations Is Barred by the

Misrepresentation Exception to the FTCA.

Plaintiff alleges that Heminger was negligent by informing the subcontractors that there

were no underground pipelines in the paving area. (Compl. at ¶ 16.) Defendant contends that

Plaintiff is actually attempting to state a claim for misrepresentation and that this claim is

therefore barred by the misrepresentation exception to the FTCA. (Br. at 15-16.) 

The United States is immune under 28 U.S.C. § 2680(h) from “[a]ny claim arising out of

. . . misrepresentation,” whether negligent or willful. Mount Homes, Inc. v. United States, 912

F.2d 352, 354 (9th Cir. 1990). The misrepresentation exception is broadly construed. Frigard

v. United States, 862 F.2d 201, 202 (9th Cir. 1988). The court “must look beyond the

characterizations in the pleadings to distinguish misrepresentation from negligence claims, a

task which is frequently far from simple.” Rich Prods. Corp. v. United States, 804 F. Supp.

1270, 1272 (E.D. Cal. 1992). 

The Supreme Court has provided guidance in distinguishing misrepresentation from

negligence claims in the context of 2680(h) immunity claims. United States v. Neustadt, 366

U.S. 696 (1961); Block v. Neal, 460 U.S. 289 (1983).2

 In Neustadt, the plaintiffs relied on an

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28 at 325. However, the government “is not liable . . . for injuries resulting from commercial

decisions made in reliance on government misrepresentations.” Id.

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inaccurate written appraisal prepared by the Federal Housing Administration (“FHA”). 

Neustadt, 366 U.S. at 697-98. The Court held that the plaintiff’s claim against the FHA based

on this reliance was barred by the misrepresentation exception. Id. at 710-11. The Court

defined negligent misrepresentation as breach of “the duty to use care in obtaining and

communicating information upon which that party may reasonably be expected to rely in the

conduct of his economic affairs.” Id. at 706. Subsequently, the Court distinguished the duty to

obtain and communicate accurate information from the duty to perform a separate task. Block,

460 U.S. 289 (1983). In Block, the plaintiff received a loan from the Farmers Home

Administration (“FmHA”) to build her home. Id. at 291. The loan agreement required that

FmHA approve all plans and gave FmHA the right to inspect and test all materials and

workmanship. Id. After discovering that the completed house was defective, the plaintiff sued

FmHA alleging that it had failed properly to inspect and supervise construction. Id. at 297. The

Court held that FmHA was subject to suit for allegedly breaching a separate duty to supervise

the construction of the plaintiff’s home, independent of its duty carefully to obtain and

communicate information. Id. at 297. The Block Court distinguished Neustadt because the

plaintiffs in Neustadt had alleged no injury that they would have suffered independent of their

reliance on the negligent appraisal. Id. By contrast, the FmHA’s misrepresentations in Block

were not essential to a claim of negligent supervision. Id. The Court held that FmHA’s “duty

to use due care to ensure that the builder adhere to previously approved plans and cure all

defects before completing construction [was] distinct from any duty to use due care in

communicating information” to the plaintiff. Id. The Court concluded that the claim in Block

was not barred by the misrepresentation exception. Id.

Therefore, in determining whether a complaint is barred by the misrepresentation

exception, the court must look beyond the language in which the complaint is couched and

consider the “essence” or “gravamen” of the suit. Rich Prods., 804 F. Supp. at 1273 (citing

Mount Homes, Inc., 912 F.2d at 355). “[I]f the alleged misrepresentation is essential to the

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claim then the action is barred even though there is some other allied negligence by the

government, for example, in gathering the information that proves inaccurate.” Id. “When

government misinformation is at issue, [the] plaintiff must allege injury independent of that

caused by the erroneous information.” Id. (citing Mount Homes, Inc. 912 F.2d at 356). The

misrepresentation exception “particularly protects the United States from suit by commercial

entities which claim to have lost money because of reliance on false government information.” 

Id. 

To state a claim of negligence rather than misrepresentation, a plaintiff must eliminate

the government’s communication of inaccurate information from the essence of its claim. See

id. Here, although Plaintiff now attempts to couch its complaint in terms of Heminger’s

negligent performance of operational tasks, “we look beyond [Plaintiff’s] characterization to the

conduct on which the claim is based.” See Mount Homes, Inc., 912 F.2d. at 356. Plaintiff

alleges that Heminger “was negligent by informing subcontractors . . . that there were not

underground pipelines” in the paving area. (Compl. at ¶ 16.) The communication of inaccurate

information therefore lies at the heart of Plaintiff’s claim. The essence of the action is not based

on negligent performance of a task separate from an alleged duty to obtain and communicate

information. Under the reasoning in Neustadt, any allied negligence in gathering the

information communicated by Heminger does not alter that the essence of the action is

misrepresentation. In addition, since government misinformation is at issue, Plaintiff must yet

fails to allege injury independent of that caused by the erroneous information. See Rich Prods.,

804 F. Supp. at 1273 (citing Mount. Homes, Inc. 912 F.2d at 356). Moreover, “the claim is

within the heart of the area covered by the misrepresentation exception: a commercial entity

claiming loss because of reliance on government representations.” Id. Therefore, any claim

based on the inaccuracy of information communicated by Heminger is barred by the

misrepresentation exception. 

E. Plaintiff Has No Right to a Jury Trial.

Although the Court concludes that it lacks subject matter jurisdiction over this case, the

Court considers Defendant’s final argument attacking Plaintiff’s request for a jury trial. 

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Defendant contends that Plaintiff is not entitled to a jury trial, which Plaintiff demanded in its

complaint. (Br. at 17; see Compl. at 1. ) Pursuant to 28 U.S.C. § 2402, “any action against the

United States under section 1346 shall be tried by the court without a jury, except that any

action . . . under section 1346(a)(1) shall . . . be tried by the court with a jury” at the request of

either party. Because the claims against Defendant here are governed by the Federal Tort

Claims Act, Plaintiff has no right to a jury trial. 

CONCLUSION

The Court HEREBY GRANTS Defendant’s motion for judgment on the pleadings. 

Plaintiff’s claims are barred by the discretionary function exception, the independent contractor

exception, and the intentional tort exception to the FTCA. A judgment shall follow.

IT IS SO ORDERED.

Dated: March 6, 2006 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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