Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_08-cv-02760/USCOURTS-caed-2_08-cv-02760-0/pdf.json

Parties Involved:
Endurance Reinsurance Corporation of America
Plaintiff
United States Postal Service
Defendant
United States of America
Defendant

Document Text:

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ENDURANCE REINSURANCE No. 2:08-cv-02760-MCE-KJM

CORPORATION OF AMERICA, a 

corporation administered by 

FIRSTCOMP INSURANCE,

Plaintiff,

v. MEMORANDUM AND ORDER

UNITED STATES OF AMERICA;

UNITED STATES POSTAL SERVICE;

and DOES 1-10 inclusive, 

Defendants.

----oo0oo----

Plaintiff Endurance Reinsurance Corporation of America 

(“Plaintiff”) seeks monetary relief from the United States of

America and United States Postal Service (“Defendants”) for

claims arising under the Federal Torts Claims Act, 28 U.S.C.

§ 1346(b), et seq. (“FTCA”).

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Case 2:08-cv-02760-MCE -KJM Document 21 Filed 02/03/10 Page 1 of 8
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 Defendants’ Notice of Motion also claims that Plaintiff 1

fails to state a claim upon which relief may be granted. To the

extent that this was intended to constitute a Federal Rule of

Civil Procedure Rule 12(b)(6) Motion to Dismiss, it nonetheless

need not be addressed as the jurisdictional issue is superseding.

 Because oral argument would not be of material assistance, 2

this matter was deemed suitable for decision without oral

argument. Local Rule 230(g).

 The factual assertions in this section are based on the 3

allegations in Plaintiff’s Complaint unless otherwise specified.

 The Court notes that Plaintiff’s Opposition refers to the 4

Insured as both “Basset” and “Bassett.” For consistency, the

Court will use the spelling indicated in the Complaint,“Bassett”.

2

Presently before the Court is a Motion by Defendants to

Dismiss all claims against them for lack of subject matter

jurisdiction pursuant to Federal Rule of Civil Procedure

12(b)(1). For the reasons set forth below, Defendants’ Motion 1

to Dismiss is granted without leave to amend.2

BACKGROUND3

Plaintiff Endurance Reinsurance Corporation of America is a

corporation authorized to write workers’ compensation insurance

in California. Plaintiff insured Dowell Trucking company against

liability to its employees for compensation benefits under the

Workers’ Compensation Law of California. 

On November 24, 2006, Mr. John Bassett , employed by Dowell 4

Trucking Company, suffered an injury while in the course of his

employment. This injury was allegedly the result of a defective

or missing handrail at a postal facility located at 3131 Arch

Airport Road, Stockton, California. 

Case 2:08-cv-02760-MCE -KJM Document 21 Filed 02/03/10 Page 2 of 8
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3

The insured party, Mr. Bassett, suffered injuries to his head,

ribs, and rotator cuff. As a result of these injuries, Plaintiff

“provide(d) benefits to Mr. Basset under a(n) insurance contract

for workers’ compensation benefits.” 

Mr. Bassett elected not to make a claim under the Federal

Tort Claims Act and did not file a Complaint against the United

States Government. 

Plaintiff now files suits stating that it is “a true third

party seeking recovery of benefits provided to Mr. Basset caused

by the negligence of the Unites States Government/ United States

Post Office,” who owned, operated, and maintained the postal

facility. 

STANDARD

Federal Courts are presumptively without jurisdiction over

civil actions, and the burden of establishing the contrary rests

upon the party asserting jurisdiction. Kokkonen v. Guardian Life

Ins. Co. of America, 511 U.S. 375 (1994). Lack of subject matter

jurisdiction is never waived and may be raised by either party or

the court at any time. Attorneys Trust v. Videotape Computer

Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996). Lack of

subject matter jurisdiction may be raised by the district court

sua sponte: “Nothing is to be more jealously guarded by a court

than its jurisdiction.” In re Mooney, 841 F.2d. 1003, 1006 (9th

Cir. 1988).

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4

In moving to dismiss for lack of subject matter jurisdiction

pursuant to Rule 12 (b)(1), the challenging party may either make

a facial attack on the allegations of jurisdiction contained in

the complaint or can instead take issue with subject matter

jurisdiction on a factual basis. Thornhill Publ’g Co. v. Gen.

Tel. & Elect. Corp., 594 F.2d 730, 733 (9th Cir. 1979); Mortensen

v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3rd Cir.

1977).

If the motion constitutes a facial attack, the Court must

consider the factual allegations of the complaint to be true. 

Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981);

Mortensen, 549 F.2d at 891. If the motion constitutes a factual

attack, however, “no 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 jurisdictional claims.” Thornhill, 594 F.2d

at 733 (quoting Mortensen, 549 F.2d at 891).

If the Court grants a motion to dismiss a complaint, it must

then decide whether to grant leave to amend. Generally, leave to

amend should be denied only if it is clear that the deficiencies

of the complaint cannot be cured by amendment. Broughton v.

Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980).

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5

ANALYSIS

Defendants argue that Plaintiff has failed to exhaust all

administrative remedies as required by the FTCA. Plaintiff

counters that it is not required to exhaust such remedies because

Plaintiff is a third party to the claim. 

“The Federal Tort Claims Act waives the United States’

sovereign immunity for actions in tort.” Jerves v. United

States, 966 F.2d 517, 518 (9th Cir. 1992). “The Act allows

claimants to sue the government in district court provided that

they first give the appropriate federal agency the opportunity to

resolve the claim.” Cadwalder v. United States, 45 F.3d 297, 300

(9th Cir. 1995). The administrative claim prerequisite that a

claim first be presented to the appropriate federal agency and

finally denied in writing before any suit be institutionalized is

jurisdictional in nature. Blain v. United States, 552 F.2d 289,

291 (9th Cir. 1977). “Because the requirement is jurisdictional,

it must be strictly adhered to.” Brady v. United States, 211

F.3d 499, 502 (9th Cir. 2000) (emphasis added). This

prerequisite may not be waived; failure to comply with the

required time period for filing a claim results in the claim

being forever barred. Blain, 552 F.2d at 291. 

Plaintiff, as a worker’s compensation insurance company, was

equally required to exhaust all remedies. An insurer which by

operation of law has become subrogated to rights of an insured

who could have brought an action against the United States under

the FTCA is a real party in interest. United States v. Aetna

Casualty & Surety Co., 338 U.S. 366, 380-381 (1949). 

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As such, an insurer may directly bring action under the FTCA in

its own name against the United States. Id. As subrogees to the

insured, insurers stand in the shoes of the insured. Cummings v.

U.S., 704 F.2d 437, 439 (9th Cir. 1983). Therefore Plaintiff

must follow the same administrative claims procedure required of

the insured before filing suit. 

 Plaintiff argues that this is a third-party complaint

exempt from administrative requirements. In doing so, Plaintiff

relies on the language of 28 U.S.C. § 2675, which states in

pertinent part: 

(A) An action shall not be instituted upon a claim

against the United States for money damages for

injury...unless the claimant shall have been finally

denied by the agency in writing and sent by certified

or registered mail...The provisions of this subsection

shall not apply to such claims as may be asserted under

the Federal Rules of civil Procedure by third party

complaint, cross-claim, or counterclaim.

 Id. (citations omitted).

Although, Plaintiff contends that it fits this exception,

Plaintiff’s action is not a third-party complaint. A third-party

complaint “refers to the claim asserted by the third-party

plaintiff against the third-party defendant.” West v. U.S., 592

F.2d 487, 491 (8th Cir. 1979). When a plaintiff sues the United

States directly, these are not claims asserted by third-party

complaint, cross-claim, or counterclaim and therefore, the claims

procedure is a prerequisite for district court jurisdiction. 

Johns-Manville Sales Corp. v. U.S., 690 F.2d 721, 722 (9th Cir.

1982). Here, Plaintiff has sued the United States directly as a

real-party-in-interest. Accordingly, this complaint does not

fall into a third-party complaint exception. 

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Plaintiff needed to exhaust all administrative claim procedures. 

Because Plaintiff has not done so, this Court lacks subject

matter jurisdiction. 

The holding of this Court is consistent with the purpose of

the administrative claim procedure of the Federal Tort Claims

Act. The plain language of the FTCA requires “the claimant” to

“first present the claim to the appropriate federal agency.” 

Cadwalder, 45 F.3d at 301. The requirement was designed to

“encourage administrative settlement of claims against the United

States and thereby to prevent an unnecessary burdening of the

courts.” Jerves, 966 F.2d at 520. See also McNeil, 508 U.S.

106, 112 (1993). As the entity directly asserting the claim,

Plaintiff “Endurance Reinsurance Corporation of America” is “the

claimant” in this case. Prior to filing suit, Plaintiff was

required to file an administrative claim, that included 1) a

written statement sufficiently describing the injury to enable

the agency to begin its own investigation, and 2) a sum certain

damages claim. Id. (Citing Warren v. United States Dept. of

Interior Bureau Land Mgmt., 724 F.2d 776 (9th Cir. 1984) (en

banc).) This requirement gives the Government an early

opportunity to investigate and possibly negotiate a settlement of

the claim. Here, the United States was not afforded this

opportunity as required by the statute. 

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CONCLUSION

For the reasons set forth above, Defendants’ Motion to

Dismiss Plaintiff’s Complaint pursuant to Federal Rule of Civil

Procedure 12(b)(1) is GRANTED without leave to amend. (Docket

No. 18) To the extent that Defendants also move to dismiss

Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure

12(b)(6), such Motion is DENIED as moot.

IT IS SO ORDERED.

Dated: February 2, 2010

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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