F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

D. L

. , a minor by a

nd throug hhis Guardian Ad L item, Kari Ann J unio,

Plaintiff-Appellant ,

v

.
M AR G AR E T V A S S I L E V , M.D.; R O D O LF O V I C E

N T E , M.D.; M AR

K W I S E M A N , M.D.; P A

V E L M U N D L , M.D.; C O U

N T Y O F T UL

A R E ; K AW E AH D E L T A H E A L T H C A

R E D I S T R I C T ; S A N D R A B O S M A N , M.D.; L O R

I A N N M. B O K E N , M.D.; T. P L

U N K E T T , RNC; D. B R

A C K E T T , RNC; B

. B R O W N , RNF A; C H R

I S T O P H E R B E N C O M O , M.D., Defendants ,

and

U N I T E D S T A T E S O F A ME R I C A , Defendant-Appellee. N o. 15-15542

D.C. No.

1:14-cv-00824- AW I -B AM

OPI NI ON

Appeal from the United States District Court for the Eastern District of California Anthony W . I shii, Senior District J udg e, PresidingD .L

. V

. U N I T E D S T A T E S 2 Argued and Submitted F ebruary 13, 2017 San F rancisco, California

F iled J une 5, 2017

B e fore: Marsha S. B erz on and Richard R. Clifton, Circuit J udg e s, and Robert S. L a snik, * District J udg e.

Opinion by

J udg e L asnik

SUMMARY * *

Exhaustion / F ederal Tort Claim s Act

The panel reversed the district court’s dismissal for la c k of subject-matter jurisdiction on ex haustion g rounds of a F ederal Tort Claims A ct ( “F TCA”) c laim broug ht b y a minor plaintiff, alle ging that his mother d ied of postpartum hemorrhag e due to medical malpractice by a phy sician, who was a deemed employ

ee of the U.S. Public Health Service.

The panel held that plaintiff’s initial failure to ex h aust his administrative remedies as to a defendant whom the plaintiffs reasonably did not know was covered b y the F TCA did not deprive the federal courts of subject-matter jurisdiction over that plaintiff’s F TCA c laim w here the plaintiff dismissed his

* T h e Ho n o rab le Ro b ert S. L asn ik , Un ited States District J u d g e f o r th e W esternDistrict o f

W ash in g t o n , sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p art o f th e o p in io n o f th e co urt. It h as b eenp rep ared b y

co urt staf

f f o r th e co nv en i en ce o f

th e read er.D .L

. V

. U N I T E D S T A T E S 3

initial suit ag ainst that defendant, and then ex hausted his administrative remedies before amending his c o m plaint in state court to add the defendant ag ain.

T h e panel held that the district c ourt erred in dismi s s i n g f o r l a c k o f s u b

j e c t

- m a t t e r j u r i s d i c t i o n p l a i n t i f f ’ s administratively ex h austed F TCA claim following the United States’ second removal.

COUNSEL

Mark W

. Coleman (arg

ued), Nutall & Coleman, F resno, California, for Plaintiff-Appellant.

V i c toria L

. B oesch (arg ued) a nd B obbie J

. Montoy a, Assistant U nited States Attorney s; U nited States Attorney ’s Office, Sacramento, California; for Defendant-Appellee.D .L

. V

. U N I T E D S T A T E S 4

OP INION

L ASNI K, District J udg e:
This case p resents the question whether, under the F ederal T o r t Claims Act (F TCA), a plaintiff’s initial failure to
ex h aust his administrative remedies as to a defendant whom the plaintiff reasonably did not know was covered by the F TCA deprives the federal courts of s u b ject-matter jurisdiction over that plaintiff’ s FT CA claim even after the plaintiff dismisses h is initial suit ag ainst that defendant, a nd then ex h austs his a dministrativ e remedies before amending his complaint in s t a t e c o u r t to add the defendant ag ain. On appeal, Plaintiff-Appellant D.L

. argues that the district court erred in dismissing his F T CA claim on ex haustion g rounds. W e ag r ee.
BACK G ROUND

A. Statutory Background

The F TCA, 28 U .S.C. §§ 1346, 267 1 –80, waives the United States’ sovereign immunity for tort actions and vests the federal district c o u r ts with ex c lusive jurisdiction over suits arising from the neg lig ence of g overnment employ ees. Jerves v. United Stat e s , 966 F .2d 517, 518 (9th Cir. 1992). B efore a p l a intiff can file an F TCA action in federal court, however, he must ex h aust the administrative remedies for his claim. 28 U

. S

. C

. § 2 675(a). An administrative claim is deemed ex h a u sted once the r elevant ag ency finally denies it in w r iting , or if the ag ency fails to make a final disposition o f the c laim within six months of the claim’s f iling

. Id

. The F TCA’s ex haustion requirement is jurisdictional and may not be waived. J

erves , 966 F .2d at 519.D .L

. V

. U N I T E D S T A T E S 5
The F ederally Supported Health Centers Assistance Act (F SHCAA) pro v i d e s that the e x clusive remedy for damag e s resulting f

rom the p erformance of medical functions b y employ e es o f the U.S. Public Health Service acting within the scope of their employ

ment i s a claim ag ainst the United States under the F TCA. See 42 U.S.C. § 233(g ). Upon certification that t h e defendant e mploy ee was acting within the scope of his employ

ment at the time of the incident g iving rise to the suit, the case must be removed and the proceeding deemed a tort a ction broug ht ag ainst the United States under the F TCA. 42 U.S.C. § 233(c).

B. F acts

I n March 2012, D.L

. , a minor, by and through h i s Guardian Ad L item, broug ht this medical malpractice case in Tulare County Superior Court. D.L

. alleg ed that h is mother, L isa J unio, had died of p o stpartum hemorrhag e shortly a fter giving birth to him on D ecember 17, 2010. He s u e d h i s m o ther’s medical p roviders for neg lig ence. W hile some defendants were named, others were listed as Does 1 to 50.

In November 2012, D.L

. amended h is complaint to substitute a dditional named defendants for Does 1 to 9. One of the newly named defendants was C h r i s topher B encomo, M.D.

In March 2013, citing t h e F SHCAA and Dr. B encomo’s status as a deemed employ ee of the U.S

. P ublic Health Service, t h e United States removed D.L .’s a ction to federal court an d s ubstituted itself as a defendant in place of Dr. B encomo. Upon removal, because D.L

. had not satisfied the F TCA’s ex haustion requirement with r eg ard to Dr. B encomo, the parties stipulated to the di s missal without prejudice o fD .L

. V

. U N I T E D S T A T E S 6

D.L .’s claims ag ainst the United States arising from Dr. B encomo’s actions. The district court remanded the state law claims ag ainst the other defendants to Tulare County Superior Court.

In J uly 2013, D.L

. filed an administrative tort claim under t h e FT C A with the U.S. Department of Health and H uma n Services. The ag ency denied D.L

. ’s claim on November 15, 2013.

On April 1, 2014, D.L

. a m e n d e d his complaint in the Tulare County Superior Court c ase to substitute Dr. B encomo f o r D o e 9. As before, the United States removed the action to federal court and substituted itself as a defendant in place of Dr. B encomo, citingthe F SHCAA and the F TCA.

In federal c ourt, the U nited Stat es m oved to dismiss the claims ag ainst it for lack of subject-ma t t e r jurisdiction, arguing that D .L .’s initial failure to ex h au s t his F TCA remedies b efore naming Dr. B encomo as a defendant in November 2012 had not been c ur ed by D.L .’s subsequent F T C A ex haustion in N ovember 2013. Over D. L

. ’ s o p p o s i t i o n , the district court concluded that i t l a cked subject-matter jurisdiction over D.L .’s claims ar ising f rom Dr. B encomo’s actions, dismissed those claims without prejudice, a nd once ag ain remanded the state claims ag ainst th e individual defendan t s to Tulare County Superior Court. D.L

. timely appealed.

D ISCUSSION

O n appeal, D .L

. argues that the district court erred i n h o l d ing that h is initial failure to ex haust his administrativ e remedies deprived the c o u rt of subject-matter jurisdictionD .L

. V

. U N I T E D S T A T E S 7

even after D.L

. had ex hausted his administrative remedies. The Unite d S t a tes argues that the F TCA’s complete
ex h austion requirement demands that D.L

. file a n e w suit after ex h austion, rather than amend his premature complaint.

W e r eview de novo the district co u r t ’s order g ranting a motion to dismiss f

or lack of subject-matter jurisdiction under F ederal Rule o f Civil Procedure 12(b)(1). Mills v

. U n i ted States , 7 42 F .3d 400, 404 (9 t h C i r

. 2014). W e r eview for clear error the d istrict court’s factual finding s on jurisdictional i s s u es. Viewtech, Inc. v. United States , 653 F .3d 1102, 1103–04 (9th Cir. 2011).

In g eneral, the F TCA’s ex haustion requirement demands that a plaintiff ex haust his a dministrative remedies before he files an F TCA claim in federal court. In M c N e il v

. United States , 508 U .S. 1 06 (1993), the Supreme Court clarified that
a prematurely filed F TCA claim must b e d ismissed even if the plaintiff ultimately ex hausts his administrative r e m edies before “substantial prog ress” h as occurred in the c ase. Id

. at 110, 113. T here, the plaintiff filed an F TCA claim a g ainst the United States in f

ederal c ourt before ex haus ting his administrative remedies. After ex hausting his remedies, the plaintiff notified the d istrict court that his administrative claim had been denied. T he district court g ranted the United States’ moti o n to dismiss plaintiff’s complaint as premature due to the failure to e x haust before filing

. T h e S u preme Court affirmed, settling a c ircuit split over whether a premature F TCA complaint could survive dismissal if administrative e x haustion occurred before “substantial prog r ess” had been made in t h e f e d e ral litig ation. Id. at 110–13.D .L

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. U N I T E D S T A T E S 8

W e have held, however, that the F TCA’s ex h a ustion requirement does not prevent a plaintiff fro m a m e n ding a previously filed federal complaint over whi ch there is jurisdiction to add an F TCA claim once he has ex h austed his administrative remedies. I n V a ladez-Lopez v. Chertoff , 656 F .3d 851 (9th Cir. 2 011), the plaintiff filed suit in federal
c ourt alleg ing claims under 4 2 U.S.C. § 1983 and B i v e n s v. Six Unknown Named Agents , 403 U.S. 388 (1971), ag ainst parties other than the United States. Separately , the p laintiff filed an adm i n istrative claim under the F TCA. A fter six months elapsed without a response from the age n c y , the plaintiff amended his c omplaint to add an F TCA claim ag ainst the United States. Subsequen t ly , the plaintiff received
a notice of claim denial fro m t h e a gency

. The district court g ranted the Unites States’ motion to dismiss the F TCA c laims for lack of subject-matter jurisdiction, because the p laintiff had filed a complaint in district court before he administratively ex hausted. On appeal, this court r e v e r s ed, holding that the plaintiff h ad ex hausted h i s administrative remedies prior to initiating an F TCA actio n and that the district court therefore had subject-matter jurisdiction over that claim. 656 F .3d at 854–58.

D.L

. argues t hat this court’s decision in Valadez-Lopez permits him to amend an ex isting complaint to add c laims covered by the F TCA following administrative ex haustion. The United States responds that this case is controlled b y McNeil , because McNeil concerned a prematurely f i l ed F TCA claim, while Valadez-Lopez did not.

W e d o not ag ree that Mc N e il controls here. Unlike the plaintiff in McNeil , D.L

. first filed h is malpractice suit in state court; at the time, he was n ot aware that one of the defendants
was an employ ee of the United States. According ly , D.L

. didD .L

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. U N I T E D S T A T E S 9

not institute a

n action “upon a claim ag a i nst the United S tates” before ex hausting his a dministrative remedies wh e n he first filed suit. See 28 U.S.C. § 2675(a). And when it became clear from the U nited States’ removal that D.L

. ’s claim ag a inst Dr. B encomo was subject to the FT CA’s
ex h austion requirement, the d istrict c ourt, unlike the court in McNeil , did not retain jurisdiction over the p r emature F TCA complaint until it ripened upon administrative ex h a u stion. Rather, D.L

. stipulated to d ismissal of the premature F TCA claim, a nd the district court remanded the remaining state-law neg lig ence claims ag a i n st the other defendants. No prematu r e F TCA c laim ag ainst the United States remained pending in f

ederal court. Thoug h the United States analy z e s the federal case initiated by the second remov a l as if it were a continuation of the federal case in i t i a t e d by the first, the second removal actually constituted a n ew federal c ase, with
a new c ase number and a new docket in the f e d e r al district court.

F ederal jurisdiction under the F TCA is determined at the time of removal. This court noted in Staple v. United States , 740 F .2d 766 (9th Cir. 1 984), that the F TCA’s e x haustion requirement does not ex tend to state court suits ag a inst nong overnment defendants. Id. at 768

. Fr o m that premise, we concluded that:

I t foll o w s t h at the issue of federal court jurisdiction under se c t ion 2675(a) does not arise until a fter removal to d istrict court, for only there does the action become one ag ainst the Unite d States. Here the Attorney General’s certification a n d removal of the state court a ction occurred w el l after the USPS denied Staple’s claim on J a n u ary 9,D .L

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. U N I T E D S T A T E S 10

1 9 8 1 , t h e r e b y e x h a u s t i n g p l a i n t i f f ’ s administrative remedy

. We hold, ther efore, that jurisdiction under s e ction 2675(a) is determined as of the date that the Attorney Gen e ral removes the suit to federal court, rather than the date the p l a i ntiff f iles the action ag ainst the driver in state court.

Id

. According ly , w e held in Staple that the federal district court h ad jurisdiction over a c a s e that was r emoved a fter
ex h austion had occurred, ev e n t h oug h the plaintiff had filed the suit in state court before ex hausting her administrative remedies. Id

. McNeil , w hich w as deci d ed after Staple , d id not address this issue a

nd t herefore did n ot overturn Staple

. In McNeil , t h e C o urt w as careful to clarify that, “As the case comes t o us, we assume that the Court of Appeals corre c t ly held that nothing done by petitioner a fter the denial o f his
a d ministrative claim on J u ly 21, 1989, constituted the commencement of a new action. The narrow question before
us is whether his action was timely eithe r because it was commenced when he lodg ed his c omplaint w ith the Dis t r i ct Court o n March 6, 1989, or because it shoul d b e v iewed a s having b een ‘inst ituted’ on the date when his administrative claim w as denied.” 5 08 U.S. at 1 1 0

– 11. McNeil , thus, did not speak to whether the Government’s removal o f an amended state court co m p l a i nt would qualify as the institution of an action under § 2675(a).

Similar to Staple , in this case, when the Unite d States
r e m o ved D.L .’s action for the second time, that remo v al properly “invoked the federal court’s j urisdiction under the FTCA ” only after D .L

. had ex hausted his admi n i s trativeD .L

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. U N I T E D S T A T E S 11

remedies. Valadez-Lopez , 656 F .3d at 856 (quoting McNeil , 508 U.S. at 108) (internal quotation marks omitted).
Moreover, as D.L

. points out, in Valadez-Lopez this court rejected the very argument that the United States now makes in this case – that the F TCA’s e x haustion r equirement demands that a plaintiff institute an entirely new action a fter
ex h austing his adminis t r at ive remedies. T h e court summariz e d the g overnment’s arg ument this way : Althoug h it portray s its argument

. . . a s o ne founded on failure to ex haust administrative remedies, the g overnment’s central th e s i s is that “[ t] he filing of an amended complaint is not the equivalent to instituting an action followin g the ex haustion of administrative
r e m e d i e s

. ” ( E m p h a s i s a d d e d

. ) T h e g overnment reasons that the court is required to dismiss the F TCA claim i n the amended complaint and to require the p laintiff to file an entirely new laws uit founded on the same nucleus of facts.

6 5 6 F. 3d at 8 55–56. This argument, the court conclude d , “finds support in neither the plain languag e of the statute nor in the law of our circuit.” Id . at 856. Specifically , There is nothing in the statute or our case law that would prevent a plaintiff from amending
an ex isting complaint a sserting non-F TCA claims to name the United States a s a defendant and include F TCA claims once those clai ms have b een administratively
ex h austed.

. . . McNeil o ug ht no t b e read a sD .L

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. U N I T E D S T A T E S 12 preventing a plaintiff w ho wishes to state a number of federal a

nd state law claims ag ainst
an a rray of defendants f

rom f iling a complaint alleg ing comm o n f

acts and amending it a fter
ex h austion to state an additional claim under the F T CA. Such a reading would require undue acrobatics of such a plaintiff, g iven the different statutes of limitations at play

. Id

. at 856–57. I ndeed, the F SHCAA’s r e m o val provision specifically co n templates that tort claims inadvertently broug ht ag ainst federal public health worker s w i ll be converted to federal F TCA cases throug h substitution a nd removal, not throug h dismissal and the filin g of a second, separate case. 42 U.S

. C

. § 233(c). And the e x haustion requirement’s g oal of “ reduc[ ing ] unnecessary cong estion in the courts,” McNeil , 508 U.S. at 112 & n. 8 , would be undermined, not served, by a rule requiring F TCA litig ants to maintain parallel malpractice suits, ag ainst d i f ferent defendants but involving the same events, in state and federal court. According ly , we h old that the distric t c o u r t erred in dismissing f

or lack of subject-matter juris d i ction D.L

. ’s administratively ex h austed F TCA claim following the United States’ second removal.

REVERSED AND REMANDED.