Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_12-cv-08211/USCOURTS-azd-3_12-cv-08211-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal Libel,Assault,Slander

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Gabriel Gaona, 

Plaintiff, 

vs.

US Investigations Services Professional

Services Division, Inc., Jean Hicks, 

Defendants. 

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No. CV 12-8211-PCT-JAT

ORDER

Pending before the Court are Defendants motions to dismiss. The first motion is to

substitute US Investigations Service, LLC (“USIS”) for US Investigations Services,

Professional Services Division Inc. (“USIS PSD”). Plaintiff does not oppose this motion.

The second motion seeks to dismiss USIS and Hicks under Federal Rule of Civil

Procedure 12(b)(6). Defendants bring this motion based on four theories: 1) statute of

limitations; 2) immunity; 3) preemption; and 4) lack of exhaustion. Alternatively, if the case

is not dismissed on any of these four theories, Defendants move to dismiss the negligence

claim arguing it fails to state a claim as a matter of state tort law.

In their filings, both parties address the statute of limitations theory first. However,

“[i]nquiring whether the court has jurisdiction is a federal judge’s first duty in every case.”

Belleville Catering Co. v. Champaign Market Place, L.L.C., 350 F.3d 691, 693 (7th Cir.

2003). 

In this case, Defendants’ second, third and fourth arguments as to why they should be

Case 3:12-cv-08211-JAT Document 12 Filed 04/23/13 Page 1 of 16
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dismissed are based on federal law. The complaint in this case alleges only state law causes

of action (defamation and negligence) and Defendants do not argue that the parties are

diverse. Thus, the federal defenses are the basis for removal in this case. See Doc. 1. As a

result, if the Court concludes the federal defenses are not meritorious, this Court may lack

subject matter jurisdiction over this case. Accordingly, the Court will consider all of the

federal defense before the state law defenses.

I. Factual Background

Plaintiff worked as a security guard at Glen Canyon Dam. Glen Canyon Dam is

operated by the United States Department of the Interior, Bureau of Reclamation. As part

of his employment, Plaintiff completed a background check to determine whether he was

suitable to be an armed security guard.

Glen Canyon Dam, through the United States, contracted with USIS to perform this

background check. Defendant Hicks, an investigator with USIS, performed the background

check of Plaintiff. Plaintiff was terminated from his position as an armed security guard at

Glen Canyon Dam as a result of this background check.

Plaintiff was advised that he failed his background check on April 23, 2010. Plaintiff

sought a copy of his background check under the Freedom of Information Act, and received

that copy on June 10, 2010. In 2011, Plaintiff sued Shawn Stice and the City of Page for

defamation based on the allegedly defamatory statements made to the background

investigator, which appeared in Plaintiff’s background check and caused him to fail his

background check. On April 20, 2012, Plaintiff received an initial disclosure in his

defamation suit in which Defendant Stice and the City of Page denied ever making the

statements that were in the background check. On October 18, 2012, Plaintiff filed this suit

against the company and person who performed the background check for defamation and

negligence, essentially alleging that Ms. Hicks fabricated the information in the background

check that caused Plaintiff to fail.

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II. Federal Defenses

A. Immunity

Defendants argue that,

Government contractors are immune from tort liability arising as a result of

their “compliance with the specifications of a federal government contract.”

Getz v. Boeing Co., 654 F.3d 852, 860 (9th Cir. 2011). This allows the

government contractor to “receive the benefits of sovereign immunity” when

it complies with the contract. In re Hanford Nuclear Reservation Litig., 534

F.3d 986, 1000 (9th Cir. 2007). 

Government contractors are immune from liability where the subject matter of

the contract involves “uniquely federal interests,” and there is a significant

conflict “between an identifiable federal policy or interest and the operation

of state law, or the application of state law [that] would frustrate specific

objectives of federal legislation.” Boyle v. United Techs. Corp., 487 U.S. 500,

504, 507 (1988) (internal quotations omitted).

Doc. 4 at 5.

The Ninth Circuit Court of Appeals has summarized the government contract defense

as shielding, “contractors from tort liability in state or federal actions where plaintiffs allege

they sustained injuries as a result of exposure to defective products or equipment

manufactured or supplied under a government contract.” Rodriguez v. Lockheed Martin

Corp., 627 F.3d 1259, 1265 (9th Cir. 2010). The Court of Appeals further stated, “[a]lthough

[the Supreme Court’s decision in] Boyle was limited to design defects, we have held that the

government contractor defense also applies to actions involving manufacturing defects.” Id.

(citing Snell v. Bell Helicopter Textron, Inc., 107 F.3d 744, 749 n. 3 (9th Cir.1997)). The

Court of Appeals also explained, [a]lthough the source of the government contractor defense

is the United States’ sovereign immunity, we have explicitly stated that ‘the government

contractor defense does not confer sovereign immunity on contractors.’” Id. (quoting United

States ex rel. Ali v. Daniel, Mann, Johnson & Mendenhall, 355 F.3d 1140, 1147 (9th Cir.

2004)). 

Finally, the Court of Appeals explained that for a contractor to receive this “corollary

financial benefit flowing from the government’s sovereign immunity,” the contractor must

show, “(1) the United States set forth “reasonably precise specifications”; (2) “the equipment

conformed to those specifications”; and (3) the supplier provided the United States with

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adequate warnings of the dangers.” Id. at 1266 (quoting Boyle, 487 U.S. at 512). In this

case, Defendants argue that as long as they: (1) meet the specifications of the government

contract and (2) that the contract is for a uniquely federal interest, they are entitled to the

government contractor defense. However, Defendants’ premise is far from clear in the Ninth

Circuit. 

For example, the Third Circuit in extending the government contractor defense to all

procurement contracts, not just military procurement contracts, noted that they were

disagreeing with the Ninth Circuit. Carley v. Wheeled Coach, 991 F.2d 1117, 1124 (3rd Cir.

1993). In other words, the Third Circuit Court of Appeals noted that the Ninth Circuit limits

the government contract defense to only military procurement contracts. Id. Specifically,

the Third Circuit Court of Appeals stated:

Our holding conflicts with the law of the Ninth Circuit, which limits the

government contractor defense to military contractors. See In re Hawaii

Federal Asbestos Cases, 960 F.2d 806, 810-12 (9th Cir.1992); Nielsen v.

George Diamond Vogel Paint Co., 892 F.2d 1450, 1452-55 (9th Cir.1990). In

Nielsen, the court focused on language in Boyle stating that the unique federal

interest inherent in all procurement contracts is a necessary, but not sufficient,

condition for displacement of state law. 892 F.2d at 1454 (citing Boyle, 487

U.S. at 507). The court reasoned that the government contractor defense

should be limited to military procurements because Boyle focused its analysis

on military concerns, id. at 1454, and because applying state law to civilian

procurements would not cause a significant enough conflict with federal policy

to justify displacement of state law, id. at 1455.

In In re Hawaii Federal Asbestos Cases, the same court further argued that the

Supreme Court’s disapproval of a government contractor defense for

procurements of stock helicopters by model number and of “any standard

equipment” indicates that the defense should not apply to products readily

available on the commercial market. 960 F.2d at 811 (quoting Boyle, 487 U.S.

at 509, 510). The court stated that nonmilitary products do not involve the

same highly complex and sensitive decisions as military products, but instead

are manufactured in response to the broader needs and desires of private

purchasers and already will have the costs of ordinary tort liability factored

into their price. Id.

Id. at 1124-25.

In attempting to discern the scope of the government contract defense in the Ninth

Circuit, another district court Judge stated as follows:

Because the Court finds the lack of reasonable precise specifications precludes

application of the government contractor defense, the Court need not

determine the precise boundaries of the defense as defined by the Ninth

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1

 Similarly, a district court in California held that the government contractor defense

identified in Boyle is limited to military procurement contracts with the government. Gomez

v. Campbell-Ewald Co, 2013 WL 655237, *5 (C.D. Cal. Feb. 22, 2013). The district court

stated:

[The party’s] reliance on Boyle and In re Hawaii is misplaced. In fact, the

Ninth Circuit could not have been more explicit in In re Hawaii that the

military contractor defense outlined in Boyle applies to the specific situation

in which a contractor produces military equipment for the Government.

[footnote omitted] “The Boyle Court repeatedly described the military

contractor defense in terms limiting it to those who supply military equipment

to the government.” In re Hawaii, 960 F.2d at 810 (citing Boyle, 487 U.S. at

512)). “The fact that the military may order such products does not make them

‘military equipment.’ “ Id. at 811. Rather, the limitation of liability “only with

respect to the military equipment they produce for the United States is

consistent with the purposes the Court ascribes to that defense” and that those

“same concerns do not exist in respect to products readily available on the

commercial market.” Id. at 811.

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Circuit. Since Boyle, the Courts of Appeals have varied greatly in their range

of application of the defense. See generally Hazel Glenn Beh, The Government

Contractor Defense: When Do Governmental Interests Justify Excusing A

Manufacturer's Liability for Defective Products?, 28 Seton Hall L.Rev. 430,

451-55 (1997) (summarizing the various applications of the defense in other

Circuits, while emphasizing the limitations of the defense in the Ninth Circuit

to contracts dealing with military equipment and resources). The Ninth Circuit

seems to limit the application of the defense to contracts involving

specifications for the design or production of military equipment or operation

of military facilities. See In re Hawaii Federal Asbestos Cases, 960 F.2d 806,

811 (9th Cir.1992) (“That Boyle speaks of the military contractor defense as

immunizing contractors only with respect to the military equipment they

produce for the United States is consistent with the purposes the Court ascribes

to that defense.”); In re Hanford Nuclear Reservation Litigation, 534 F.3d 986,

1000 (9th Cir.2008) (“[T]he government contractor defense applies not only

to claims challenging the physical design of a military product, but also to the

process by which such equipment is produced.”). However, the Ninth Circuit

also cites to Yearsley with approval, which did not involve a contract with the

military. See McKay, 704 F.2d at 448 (citing to Yearsley as the first case to

articulate the government contractor defense, which “protects a government

contractor from liability for acts done by him while complying with

government specifications during execution of performance of a contract with

the United States”).

Griffin v. JTSI, Inc., 654 F.Supp.2d 1122, 1137, n. 30 (D. Hawaii 2008).

Following the reasoning of the Ninth Circuit cases, it is unlikely that Boyle lends any

support to applying the government contractor defense in this case, which involves neither

the military, nor a procurement contract.1

 Thus, Yearsley would be the source for extending

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28 Id. at *5.

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the government contract defense in this circumstance. However, in Boyle, the Supreme

Court noted that while Yearsley hinted at a government contract defense, it did not establish

such a defense. Specifically, the Supreme Court stated:

[An] area that we have found to be of peculiarly federal concern, warranting

the displacement of state law, is the civil liability of federal officials for

actions taken in the course of their duty. We have held in many contexts that

the scope of that liability is controlled by federal law. The present case

involves an independent contractor performing its obligation under a

procurement contract, rather than an official performing his duty as a federal

employee, but there is obviously implicated the same interest in getting the

Government’s work done. [Footnote omitted]

We think the reasons for considering these closely related areas to be of

“uniquely federal” interest apply as well to the civil liabilities arising out of the

performance of federal procurement contracts. We have come close to holding

as much. In Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), we

rejected an attempt by a landowner to hold a construction contractor liable

under state law for the erosion of 95 acres caused by the contractor’s work in

constructing dikes for the Government. We said that “if [the] authority to carry

out the project was validly conferred, that is, if what was done was within the

constitutional power of Congress, there is no liability on the part of the

contractor for executing its will.” Id., at 20-21. The federal interest justifying

this holding surely exists as much in procurement contracts as in performance

contracts; we see no basis for a distinction.

Boyle, 487 U.S. at 505-06 (some internal citations omitted).

Thus, this Court must decide whether Yearsley created a government contract defense

that would extend in this Circuit beyond the limits of Boyle — i.e. military procurement

contracts. Before Boyle was decided, in McKay v. RockwellIntern. Corp., 704 F.2d 444, 448

(9th Cir. 1983), the Ninth Circuit Court of Appeals discussed the limits of the holding of

Yearsley. The Court of Appeals stated, “[w]hile the government contractor defense covered

at first only construction projects [based on Yearsley], it has recently been applied by several

courts to military equipment design defect cases.” Id. The Court of Appeals then went on

to discuss the holdings of various courts around the country that had expanded the

government contractor defense to military procurement contracts; these cases appear to be

the precursor to Boyle. Importantly, the Court of Appeals seemed to treat the expansion of

the government contractor defense beyond construction projects to military procurement

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2

 Ultimately the Griffen court did not have to reach a conclusion about the scope of

the government contractor defense. In Griffin, the defendant who sought the benefit of the

government contract defense provided security services (including monitoring security

cameras, access control, and issuing clearance badges) at a visitor center at a U.S. military

location. Griffin, 654 F.Supp.2d at 1125. The plaintiffs in Griffen both worked for the

defendant security company. Id. at 1125-26. The plaintiffs alleged that they were terminated

for reporting security violations in violation of Hawaii’s Whistlebolwers’ Protection Act.

Id at 1130. While questioning whether the government contract defense is even available

under such circumstances, as discussed above, the court ultimately concluded that the

defendants could not avail themselves of the defense because no “reasonably precise

specifications” existed. Id. at 1136.

3

 But see Gomez, 2013 WL 655237, *5-6 (after concluding Boyle was limited to

military procurement contracts, held that under Yearsley the government contractor defense

barred suit against a private company that did advertising for the Navy allegedly in violation

of the Telephone Consumer Protection Act.)

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contracts as a very limited extension of Yearsley; rather than, as Defendants would have it,

an invitation for every private contractor who does work for the federal government to claim

it too receives the benefit of the government’s sovereign immunity.

This Court agrees with the Griffen court, as quoted above, that is seems unlikely given

how narrow the holdings in In re Hawaii Federal Asbestos Cases and In re Hanford Nuclear

Reservation Litigation were, that the government contractor defense in this circuit extends

beyond government construction contracts and military procurement contracts.2

 Griffin, 654

F.Supp.2d at 1137, n. 30. Further, after Griffen was decided in 2008, the Ninth Circuit Court

of Appeal decided Rodriguez, which too limited the defense to military procurement

contracts. 627 F.3d at 1265.

Thus, this Court concludes that the military contract defense does not extent to every

private contractor who does work for the federal government. Because this case does not

involve a construction project or a military equipment procurement contract, the defense is

not available to Defendants.3

 Thus, Defendants’ motion to dismiss based on immunity is

denied. 

This conclusion is further supported because the test for when the defense is available

has no applicability in this case. First, there is no product at issue in this case. Therefore,

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there were no precise specifications for the product. Second, there is no evidence that the

“equipment” complied with the specifications. Finally, there is no evidence that the supplier

provided “warnings” regarding the product.

Instead of applying the test for the government contractor defense as articulated in

Rodriguez and other cases, Defendants argue that they are performing a function that is a

“uniquely federal interest” and that the code of federal regulations and certain Executive

Orders provide “specifications” for background checks. Defendants conclude that as long

as their function is uniquely federal and done consistent with the specifications of the code

of federal regulations and Executive Orders, they are entitled to the defense. Defendants

have cited no law supporting such a “test” for applying a government contractor defense. 

Further, even if the case law could be expanded to include companies performing

background checks within the ambit of defendants who can seek the government contractor

defense, the “specifications” referenced in this case are inadequate. As the Griffen court

noted, 

The first requirement for application of the government contractor defense is

the existence of reasonably precise specifications which are approved by the

government. There must be a back and forth dialogue culminating in approval,

and a continuous exchange between the contractor and the government in order

to satisfy Boyle's first condition. 

Id. at 1138 (internal citations and quotations omitted).

Here, what Defendants cite to in support of the “reasonable precise specifications”

governing the background checks they perform for the government is the code of federal

regulations and certain Executive Orders. See Boyle, 487 U.S. at 512 (requiring reasonably

precise specifications). The code and the Executive Orders do not qualify as a “back and

forth” dialogue between the contractor and the government, nor do they qualify as a

“continuous exchange” between the contractor and the government. See Butler v. Ingalls

Shipbuilding, Inc., 89 F.3d 582, 585 (9th Cir. 1996) (requiring a back and forth dialogue

followed by a continuous exchange between the government and the contractor).

Accordingly, even if Defendants are correct that the government contractor defense is

available generally to private contractors performing background checks, the facts of this

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case do not qualify Defendants for the defense. Thus, the motion to dismiss based on

immunity is denied for this alternative reason.

B. Preemption

Next, Defendants argue that Plaintiff cannot allege state law causes of action because

those claims are impliedly preempted by federal law. See Doc. 4 at 9. “Field and conflict

preemption are subcategories of implied preemption.” Stengel v. Medtronic Inc., 704 F.3d

1224, 1230 (9th Cir. 2013). “Regardless of the type of preemption involved — express, field,

or conflict — ‘the purposes of Congress is the ultimate touchstone of pre-emtion analysis.’”

Gilstrap v. United Air Lines, Inc., 709 F.3d 995, 1003 (9th Cir. 2013) (quoting Cipollone v.

Liggett, 505 U.S. 504, 516 (1992)).

1. Field Preemption

“Under field preemption, preemption is implied when Congress so thoroughly

occupies a legislative field, that it effectively leaves no room for states to regulate conduct

in that field.” Whistler Investments, Inc. v. Depository Trust and Clearing Corp., 539 F.3d

1159, 1164 (9th Cir. 2008) (internal quotations and citation omitted). Defendants’ argument

on field preemption is two sentences. The first sentence is, “Plaintiff’s claims are impliedly

preempted by federal law because the law governing the conduct of federal background

investigations ‘leaves no room for states to regulate,’ and because state law ‘poses an

obstacle’ to the federal law’s ‘purpose and intended effects.’” Doc. 4 at 9 (quoting Whistler,

539 F.3d at 1164). Defendants then state, “As noted above, background investigations are

governed by a comprehensive set of laws, regulations, procedures and Executive Orders

evincing a complete occupation of the field.” Doc. 4 at 9. Defendants do not expand this

argument in their reply.

No argument can be made that Congress has preempted the field of background

checks. Thus, the question is whether Congress has preempted the field of federal

background checks.

On this record, Defendants have presented no evidence that there are no federal

agencies that conduct background checks differently, or less or more throughly, than the

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4

 Indeed, several of the sources cited by Defendants for how “Congress” has occupied

this field are Executive Orders. Doc. 4 at 7. The Court does not see how orders of the

President evidence Congress’ intent to occupy a field. See Arizona v. United States, 132

S.Ct. 2492, 2524 (2012) (Alito, J. concurring) (“The United States’ argument that § 2(B) is

pre-empted, not by any federal statute or regulation, but simply by the Executive’s current

enforcement policy is an astounding assertion of federal executive power that the Court

rightly rejects.”)

5

 In Gilstrap, in the context of discussing FAA preemption of state law torts, the

Court of Appeals concluded that the FAA’s field preemption of various components of the

airline industry resulted in preemption of the state law standards of care, but not the state law

remedies. 709 F.3d at 1006. In this case, such a distinction might result in Plaintiff being

able to sued for negligence, but the standard of care for negligence would be the various

federal directives regarding how background checks must be conducted. However, neither

party argued this distinction, and the Court need not reach it because the Court has not found

field preemption.

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guidelines they are following. Further, they have presented no evidence regarding whether

the types of background checks they are conducting are limited to prospective employees

holding positions that implicate a national security concern. If the category of federal

employees were so limited, Defendants would be arguing an even smaller category of field

preemption. Regardless, however, despite the fact that various federal sources have set

standards and guidelines for conducting background checks, Defendants have not shown an

intent by Congress to occupy the entire field of background checks such that state law torts

would be preempted.4

 Accordingly, the motion to dismiss based on field preemption is

denied.5

2. Conflict Preemption

“Conflict preemption exists when a state requirement actually conflicts with a federal

requirement, making impossible compliance with both requirements, or when a state

requirement stands as an obstacle to the accomplishment and execution of the full purposes

and objectives of Congress.” Stengel, 704 F.3d at 1231 (internal citations omitted). On this

point, Defendants argue: “In addition, for the reasons set forth above in connection with

immunity, the operation of state tort law conflicts with the federal interests protected. See

NASA, 131 S. Ct. at 759 (‘The Government has a strong interest in conducting basic

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background checks into the contract employees minding the store.’).” Doc. 4 at 9. This

quote is Defendants’ entire argument from the motion addressing conflict preemption.

Defendants do not expand this argument in their reply.

To address this “argument” the Court must extract from this quote Defendants’ theory

of conflict preemption. First, the federal requirements for doing background checks certainly

do not require Defendants to defame the person being investigated in the process; thus, it is

not impossible to comply with both the state law and the federal law on this point. Further,

nothing in the federal law requires that the background checks be conducted negligently. So,

again, it is not impossible to comply with both laws. Accordingly, an actual conflict with

state law does not exist which would make compliance with both state and federal law

impossible.

Second, the Court must consider whether the state requirements are an obstacle to

accomplishing the full purpose and objectives of Congress. This is a closer question than the

first. Certainly, the Court could hypothesize that Congress intended to allow the unimpeded

collection of information in background checks. However, there is no evidence in this record

as to the actual intent of Congress. See Gilstrap, 709 F.3d at 1003 (noting the touchstone of

the analysis is the intent of Congress).

Additionally, even if the Court presumes that Congress’s objective was to allow the

collection of information, this case does not directly impact this objective. Specifically,

accomplishing this objective would involve considering whether the person providing the

background information should be subject to suit. Here, it is the person receiving the

background information who is being sued. Plaintiff alleges that in receiving the

information, Defendant Hicks either negligently or intentionally misstated the interviews

with third-parties causing Plaintiff to fail his background check. The Court cannot see how

allowing the person who is collecting the information to be completely unaccountable for the

accuracy of the information collected would further the goal of unimpeded collection of

information. In other words, no one alleges the goal of Congress was to have inaccurate and

unreliable background checks. Therefore, the Court finds there is no conflict preemption

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with state law in allowing the person collecting the information to be sued. Accordingly,

Defendants’ motion to dismiss based on conflict preemption is denied.

C. Exhaustion

Next Defendants argue that this case should be dismissed because Plaintiff failed to

exhaust his administrative remedies. Specifically, Defendants state:

Where relief is available from an administrative agency, “the plaintiff is

ordinarily required to pursue that avenue of redress before proceeding to the

courts; and until that recourse is exhausted, suit is premature and must be

dismissed.” Cabaccang v. U.S. Citizenship & Immigration Servs., 627 F.3d

1313, 1316 (9th Cir. 2010) (internal quotation marks and citation omitted).

Doc. 4 at 10.

In this case, Defendants assert that after Plaintiff was terminated from his job due to

his failure to pass his background check, he could have appealed to the Merit Systems

Protection Board. Id. at 10. Based on Plaintiff’s failure to allege exhaustion in his

complaint, Defendants argue this case should be dismissed. Id. (“[Plaintiff] does not aver

that he took any action to have the OPM or another federal agency (such as the Bureau)

review the adverse determination.”).

First, generally in this Circuit, failure to exhaust is an affirmative defense. Wyatt v.

Terhune, 315 F.3d 1108, 1113 (9th Cir. 2003). Thus, Plaintiff’s failure to “aver” exhaustion

would not be a basis for dismissal under Federal Rule of Civil Procedure 12(b)(6).

Second, Defendants’ legal argument is inconsistent with the facts of this case.

Plaintiff could not have obtained any “relief” from Defendants by pursuing administrative

remedies. Because Plaintiff could not receive a remedy against these Defendants by

exhaustion, the Court finds that the exhaustion cases are inapplicable to this case.

Accordingly, Defendants motion to dismiss based on exhaustion is denied.

III. Jurisdiction

Although Plaintiff opposes all of Defendants’ theories for why this case should be

dismissed, Plaintiff did not move to remand this case, nor oppose Defendants’ arguments for

why this Court had jurisdiction. Nonetheless, this Court must independently evaluate its

jurisdiction. See Belleville Catering, 350 F.3d at 693.

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As discussed above, Defendants premise their assertion of federal subject matter

jurisdiction on their defenses in this case. Specifically, Defendants assert:

Under [28 U.S.C. §] 1442(a)(1), removal is proper (i) if the Defendants are

“persons acting under the direction of a federal officer,” (ii) there is “a causal

nexus between [the Defendants’] actions, taken pursuant to a federal officer’s

directions, and Plaintiff’s claims,” and (iii) the Defendants can assert a

“colorable federal defense.” Lombardi v. TriWest Healthcare Alliance Corp., No. 08-CV-02301-FJM, 2009 WL 1212170, at *1 (D. Ariz. May 4, 2009)

(quotations omitted) (quoting Durham v. Lockheed Martin Corp., 445 F.3d

1247, 1251 (9th Cir. 2006)).

Doc. 1 at 2.

Although the Court has decided that Defendants’ federal defenses are not meritorious,

neither party has briefed whether they are “colorable” sufficient to confer subject matter

jurisdiction on this Court. However, because Plaintiff has not moved to remand, the Court

has presumed that Plaintiff concedes that Defendants’ defenses are sufficiently colorable to

confer jurisdiction on this Court.

Further, this Court must, “interpret section 1442 broadly in favor of removal.”

Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006). Broadly construing

a federal officer or agent’s right to remove under § 1442, the Court finds Defendants’

defenses are colorable sufficient to give this Court subject matter jurisdiction over this case.

IV. State Law Defenses

A. Statute of Limitations

Defendants move to dismiss arguing that Plaintiff’s claims are barred by the statute

of limitations. Defendants argue that the statute of limitations for Plaintiff’s defamation

claim is found in A.R.S. § 12-541, and is one year. Defendants argue that the statute of

limitations for Plaintiff’s negligence claims is found in A.R.S. § 12-542, and is two years.

Defendants argue that Plaintiff’s claims in this case accrued either upon his termination on

April 23, 2010, or when Plaintiff received the response to his Freedom of Information Act

(“FOIA”) request, which revealed the contents of his background check, on June 17, 2010.

Defendants then conclude that regardless of which accrual date the Court uses, this lawsuit

which was filed on August 29, 2012, is outside both statutes of limitations.

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Plaintiff responds and argues that both statutes of limitations are subject to tolling.

Plaintiff states that upon receiving the response to his FOIA request, he filed suit against

Shawn Stice and the City of Page for the allegedly defamatory statements Mr. Stice made in

Plaintiff’s background check. Plaintiff then argues that it was only when Mr. Stice filed his

disclosure statement in the underlying lawsuit that Plaintiff learned that Mr. Stice denied

making the statements that Defendant Hicks recorded in the background check. Plaintiff then

argues that it was only upon receiving this disclosure statement in April 2012 that he learned

that Defendant Hicks had either negligently or intentionally mis-recounted Mr. Stice’s

statements; thereby causing Plaintiff to fail his background check. Accordingly, Plaintiff

argues that the statute of limitations was tolled until he discovered Defendant Hicks’ true

activity in April 2012. Plaintiff then concludes that this case, which again was filed on

August 29, 2012, is within both statutes of limitations.

1. Defamation

In 1980, the Arizona Court of Appeals held that “An action for defamation accrues

and the Statute of Limitations begins to run upon publication.” Lim v. Superior Court In and

For Pima County, 616 P.2d 941, 942 (Ariz. App. 1980). The Court went on to conclude,

“The Statute[] of Limitations is not tolled in a defamation action where the plaintiff is unable

to learn the identity of the alleged defamer.” Id. at 943. In 1983, the Court explained that

the statute of limitations could be tolled when the statement is concealed; specifically when

the, “defamatory statement is ‘published in a manner in which it is peculiarly likely to be

concealed from the plaintiff, such as in a confidential memorandum or a credit report.’” Dube

v. Likins 167 P.3d 93, 109, ¶6 (Ariz. App. 2007) (quoting Clark v. AiResearch Manuf. Co.

of Ariz., 673 P.2d 984, 986 (Ariz. App. 1983)). 

In 2007, the Court determined that the discovery rule in defamation cases is no

different than the discovery rule in other types of cases. Id. at 423, ¶10 (“We conclude that

the difference between the current interpretation of the common law discovery rule as applied

to defamation cases and as applied to other cases is more semantic than substantive.”). The

Court then stated that the common law discovery rule is whether the plaintiff knew or should

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have known of the underlying facts of the action. Id.

Defendants argue that the statute of limitations is not subject to tolling relying on only

the 1980 case (and cases from other states). Given the evolution of the case law in Arizona,

this Court will rely on the 2007 pronouncement of when the discovery rule is available in

defamation cases.

Thus, the issue in this case is whether Plaintiff’s “discovery” is based on when he

learned of the allegedly defamatory statements, or when he learned of the identity of the

maker of the statements. The “discovery” rule in Arizona is based on when Plaintiff learned

of the “underlying facts” giving rise to the action. Here, it is undisputed that Plaintiff learned

of the underlying facts when he received the response to his FOIA request on June 17, 2010.

Based on this discovery of the facts, Plaintiff could have sued all relevant parties as of June

17, 2010. Because Plaintiff chose to assume Mr. Stice was at fault, does not change that he

had the facts that implicated Defendant Hicks at the same time. Accordingly, Plaintiff’s

complaint filed on August 29, 2012 is beyond the one year statute of limitations for filing a

defamation complaint and will be dismissed on this basis.

2. Negligence

In discussing cases arising under A.R.S. § 12-542, another Judge in this district has

summarized Arizona law as follows:

Such cases must be filed “within two years after the cause of action accrues.”

Id. A cause of action accrues once “the plaintiff knows or with reasonable

diligence should know the facts underlying the cause.” Doe v. Roe, 955 P.2d

951, 960 (Ariz. 1998). A written report from a defendant informing a plaintiff

of the facts that give rise to damages constitutes the accrual of a cause of

action. CDT, Inc. v. Addison, Roberts & Ludwig, C.P.A., 7 P.3d 979, 982

(Ariz. App. 2000).

Everson v. Everson, 2011 WL 4801884, *5 (D. Ariz. 2011).

Thus, like the law governing defamation claims, the test for when a negligence claim

arises is when the plaintiff knew or should have known of the “facts underlying” his claim.

Id. The facts of how Plaintiff came to know of his negligence claim are the same as how he

learned of his defamation claim. As discussed above, Plaintiff learned the facts underlying

his negligence claim on June 17, 2010, when he received the response to his FOIA request.

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Accordingly, Plaintiff’s complaint, filed on August 29, 2012, is outside the two year statute

of limitations. As a result, Defendants’ motion to dismiss this claim will also be granted.

B. Duty

Alternatively, Defendants move to dismiss the negligence claim arguing they had no

duty to Plaintiff. Because the Court will grant the motion to dismiss all claims based on

statute of limitations, the Court need not reach this argument.

V. Conclusion

Based on the foregoing,

IT IS ORDERED that the Motion to Dismiss US Investigations Services,

Professional Services Division, Inc. and substitute US Investigations Services, LLC as a

defendant in its place (Doc. 3) is granted. US Investigations Services, LLC is substituted in

place of the dismissed US Investigations Services, Professional Services Division, Inc.

IT IS FURTHER ORDERED that Defendants’ motion to dismiss (Doc. 4) is

granted, based on statute of limitations only, and the Clerk of the Court shall enter judgment

accordingly.

DATED this 23rd day of April, 2013.

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