Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_07-cv-00805/USCOURTS-cand-5_07-cv-00805-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
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 8/17/07*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

DANIEL R. CLARK, et al.

Plaintiffs,

 v.

UNITED STATES OF AMERICA,

Defendant. /

Case No. C07-00805 HRL

ORDER ON DEFENDANT'S

MOTION TO DISMISS AND

PLAINTIFFS' MOTION FOR

SUMMARY JUDGMENT

Re: Docket Nos. 9, 26

Pro se plaintiffs Daniel Clark and Yupapan Clark sue under the Federal Tort Claims Act

(FTCA). They allege negligent delay by the Office of Personnel Management (OPM) and the

Department of the Navy (DON) in processing Daniel Clark's application for disability

retirement benefits. Defendant now moves to dismiss the complaint under Federal Rules of

Civil Procedure 12(b)(1) and 12(b)(6). Plaintiffs' concurrently move for summary judgment.

BACKGROUND

Daniel Clark applied for benefits with DON in October 2005 claiming a mental health

disability. The application was initially denied, but later approved in July 2006. Plaintiffs

received the final retroactive payment in October 2006. 

The complaint details what Plaintiffs believe to be various wrongful and negligent

actions taken by OPM and DON employees during the processing of the benefit claims. These

allegations are here summarized. Plaintiffs complain that DON lost Clark's application twice

Case 5:07-cv-00805-HRL Document 54 Filed 08/17/07 Page 1 of 8
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1 According to Plaintiffs, the letter stated, “Dr. Evans concludes his report of

treatment history by stating ... your mood in conjunction with medication you began to

slowly emerge from ‘the fog.’ A review of your treatment history fails to reveal any mention

of a diagnosis and treatment for a FOG.” Cmplt. ¶ 84.

2

and incorrectly informed him about the availability of interim payments. Cmplt. ¶¶ 18-67. 

They further claim that the initial denial of benefits letter did not meet statutory requirements

and that Clark was not provided the full time available under statute to resubmit his information

for reconsideration. Cmplt. ¶¶ 70-83. Plaintiffs allege that the second denial letter revealed a

discriminatory bias against Clark’s psychiatric based disability.1

 Cmplt. ¶¶ 82-88. They further

complain that during the administrative appeal OPM delayed and failed to cooperate with the

proceedings, even after the Administrative Law Judge ordered OPM to do so. Cmplt. ¶¶ 89-98,

102-114. Finally, the Clark's address what they believe to have been a "bogus letter" sent by

OPM to the Administrative Law Judge to conceal OPM's negligence. Cmplt. ¶¶ 99-101.

According to the Plaintiffs, this letter was "criminally fraudulent" because it was not signed or

dated and misrepresented the facts surrounding Clark's case. Cmplt. ¶¶ 107-114.

As the complaint stands, the allegations are ambiguous as to which tort theories

Plaintiffs intend to rely. At the hearing on these motions, Daniel Clark stated that Plaintiffs are

pursuing damages based on the following torts: Negligence (including negligent supervision

and negligence per se), Breach of Fiduciary Duty, Intentional Infliction of Emotional Distress

and Res Ipsa Loquitor. 

I. Defendant's Motion to Dismiss

LEGAL STANDARD

In considering a motion to dismiss, a court should accept all material factual allegations

as true and construe them “in the light most favorable to the nonmoving party.” Cahill v.

Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). “However, the court is not

required to accept legal conclusions cast in the form of factual allegations if those conclusions

cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness Network, 18 F.3d

752, 754-55 (9th Cir. 1994). 

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2 Although some matters outside of the pleadings were filed in this case, for purposes

of this particular motion, the court will not consider anything extraneous to the pleadings. 

As such, the motion to dismiss is not converted into a motion for summary judgment. See,

Fed. R. Civ. P. 12(b)(6); Palm v. United States, 835 F.Supp. 512, 515 n.1 (N.D.Cal. 1993).

3 Plaintiffs did not list fraud among the tort claims identified, but Defendant is

concerned because the complaint includes fraud allegations (e.g., employee

misrepresentations concerning interim payments and OPM's "bogus letter.").

3

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may

attack either the allegations of the complaint as insufficient to confer jurisdiction upon the

court, or the existence of subject matter jurisdiction in fact. Thornhill Publ'g, Co. v. General

Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). Under Rule 12(b)(6), dismissal for

failure to state a claim upon which relief can be granted is permitted when there is a “lack of a

cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal

theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Review is

limited to the contents of the complaint. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896

F.2d 1542, 1555 (9th Cir. 1989).2

 

DISCUSSION

Subject matter jurisdiction exists only if Plaintiffs can assert a claim under the FTCA. 

To do so, they must establish [1] that the claims are not statutorily excluded, [2] facts sufficient

to meet the elements of a tort claim against a federal employee acting within the scope of his or

her employment, and [3] that the United States is liable “in the same manner and to the same

extent as a private individual in like circumstances.” 28 U.S.C. §§ 2674, 1346(b).

Because the FTCA is a limited waiver of sovereign immunity, jurisdiction is lacking

where any claims are excluded by the statute. Defendant contends that any fraud claims would

be excluded under 28 U.S.C. § 2680(h).3 This provision waives immunity for "any claim

arising out of ... misrepresentation." Plaintiffs acknowledged at oral argument that they were

excluded from pursuing damages for fraud claims. However, they also stated that the fraudulent

acts were alleged in support of the negligence claims. For the sake of clarity, Defendant's

motion to dismiss with respect to any claims arising in misrepresentation or fraud is

GRANTED with prejudice for lack of jurisdiction. 

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28 4

 Motion to Dismiss, pg. 8, citing, e.g., Westbay Steel, Inc., 970 F.2d 648.

4

Defendant next argues that jurisdiction is lacking for the remaining claims because the

third FTCA requirement has not been met. For this element, the circumstances underlying

Plaintiffs' tort claim must be analogous to circumstances which, if Defendant were a private

entity, it would be liable under the local law where the act occurred. Appleton v. United States,

180 F.Supp.2d 177, 184-85 (D.D.C. 2002). In other words, the tort must have a persuasive

private analogue. Westbay Steel, Inc. v. United States, 970 F.2d 648, 650 (9th Cir. 1992)

(FTCA applies only if there is a persuasive analogy with private conduct). 

Plaintiffs correctly apply the Indian Towing standard to this requirement. In that case,

the Supreme Court emphasized that the FTCA looks to whether liability would be imposed on

the government to the same extent as would be imposed on a private individual "under like

circumstances." Indian Towing Co. v. United States, 350 U.S. 61, 64-65 (1955) (emphasis

added). The Court rejected the government's attempts to read into the statute a standard

imposing liability only under the same circumstances. Id. Therefore, there can be liability for

negligent performance of uniquely governmental functions. Id.

Defendant responds that there is no persuasive private analogue to the government

action in this case. Alternatively, it argues that if there is an analogue, it is a private employer

who would not be liable in these circumstances because ERISA would preempt. Under the

former theory, Defendant contends that the claimed negligence stems from the breach of a duty

created by federal law, which, by itself, is not actionable under the FTCA. In support,

Defendant cites cases which found the FTCA inapplicable for breached duty of care in

administering the bond approval provisions of the Miller Act.4

 However, these cases are

factually and legally distinguishable from the instant action. Furthermore, there is authority

which indicates that even if a duty is created by federal statute, the court still needs to consider

whether liability would be imposed on a private person. See, e.g., Appleton, 180 F.Supp.2d at

184-85. Thus, this particular argument is not persuasive. 

Addressing Defendant's second theory, the court considers whether the private employer

analogue is appropriate and, if so, whether that private entity would be liable in like

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5

circumstances. Plaintiffs offer alternatives to the proposed analogue which they argue would

expose the Defendant to liability. The Clark's first propose the District of Columbia or state of

Virginia as an employer. They argue that an employee of either of these entities may

successfully bring this type of action against their employer. However, this example fails. It is

irrelevant to the FTCA analysis that a public employer might be liable, because this analogy is

expressly excluded from the private person liability determination. United States v. Olson, 546

U.S. 43 (2005) (reversing Ninth Circuit precedent which permitted waiver of immunity in

certain cases where local law imposed liability on state or municipal entities). 

Plaintiffs' second alternative is a private employer exempt from ERISA. Here, the

Clark's argue that an appropriate analogue would be private employers exempt from ERISA,

such as those administering a benefit plan for the sole purpose of maintaining Workers'

Compensation or disability insurance. They contend that under Indian Towing, the instant

action presents a sufficiently similar "like circumstance" because Clark sought disability

retirement benefits. However, this alternative also fails. The analogy presented is not

sufficiently similar to the facts of this case, even under Indian Towing. The federal retirement

benefits plan is not like those plans administered for the sole purpose of maintaining an

insurance program. It is a comprehensive plan, which would be covered by ERISA if the federal

government were a private employer. Because the alternative proposals are unpersuasive, the

court adopts Defendant's private employer analogue. 

A final question remains: If a private employer covered by ERISA is the appropriate

analogue, then does ERISA preempt this type of action, thus precluding liability? In arguing

for liability preclusion, Defendant cites Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S.

134, 148 (1985). There, the Supreme Court noted that "the relevant text of ERISA, the structure

of the entire statute, and its legislative history all support the conclusion that in § 409(a)

Congress did not provide, and did not intend the judiciary to imply, a cause of action for

extra-contractual damages caused by improper or untimely processing of benefit claims."

Plaintiffs counter that ERISA does not preempt under the Ninth Circuit's "relationship test."

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5

 This conclusion is consistent with Ninth Circuit caselaw. See, e.g. Miller v. Nat'l

Brokerage Services, Inc., 782 F. Supp. 1440, 1444 (D.Nev. 1991) (holding that state law tort

claims were not saved from ERISA preemption because the claims related to the plan).

6

Abraham v. Norcal Waste Systems, Inc., 265 F.3d 811, 820-21 (9th Cir. 2001) (for preemption,

state law theories must relate to an ERISA plan within the meaning of 29 U.S.C. § 1144(a)). 

The Clark's cite to a particular portion of this case which appears to hold that because

tort laws, as a general matter, do not relate specifically to ERISA, then there is no preemption. 

Id. at 820-21. However, this misconstrues the holding. In Abraham, which dealt with the

leveraged buyout of company stock by an employee stock ownership plan, the Ninth Circuit did

hold that the claims of the noteholders for state law fraud, breach of fiduciary duty and

negligence were not preempted by ERISA. However, in reaching that conclusion, the Court

thoroughly analyzed the claims asserted by the noteholders under the various tort theories. The

key to the decision was whether those claims (not the tort laws themselves) related to an ERISA

plan.5

 Preemption was determined to be inappropriate there because the state law claims had

no bearing on any ERISA-governed relationship and because "the claims [did] not remotely

concern the objectives of ERISA." Id. at 820-21. 

The same cannot be said here, where the allegedly negligent conduct is the processing of

Clark's claim for disability retirement benefits. Plaintiffs' claims relate directly to the objectives

of ERISA and, what would be in the private sector, an ERISA-governed relationship. Because

the federal government would not be liable if it was a private person in like circumstances,

Plaintiffs' remaining claims are not actionable under the FTCA. Accordingly, Defendant's

motion to dismiss is GRANTED with prejudice for lack of subject matter jurisdiction. 

II. Plaintiffs’ Motion for Summary Judgment

In light of the conclusion reached above, Plaintiffs' motion for summary judgment is

DENIED as moot. Although, as noted at the hearing, it would have been denied as premature

given the fact that Defendant has yet to file an answer. 

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 "A district court does not err in denying leave to amend where the amendment

would be futile.” Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991). 

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CONCLUSION

Accordingly, Plaintiffs' claims are dismissed with prejudice in their entirety .6

IT IS SO ORDERED.

Dated: 8/17/07 

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

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THIS SHALL CERTIFY THAT A COPY OF THIS ORDER WILL BE SENT TO:

Lawrence E. Eiser Larry.Eiser@USDOJ.Gov, Hope.Swann@USDOJ.Gov 

Daniel R. Clark 

585 Hawthorne Street 

Unit 205 

Monterey, CA 93940 

Yupapan Clark

585 Hawthorne Street

Unit 205

Monterey, CA 93940

James G. Touhey, Jr. 

U. S. Department of Justice 

Torts Branch, Civil Division 

Post Office Box 888 

Washington, DC 20044 

Peter D. Keisler 

United States Department of Justice 

Assistant Attorney General 

20 Massachusetts Avenue, NW 

Room 7312 

Washington, DC 20530 

Case 5:07-cv-00805-HRL Document 54 Filed 08/17/07 Page 8 of 8