The Honorable James M. Moody, United States District Judge

1

for the Eastern District of Arkansas, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 96-1325/1658

___________

Warren C. Hartje; Jean E. * 

Hartje; Warren Hartje Sales *

Company Employees' Pension *

Plan & Trust, *

*

Plaintiffs/Appellants, *

*

Philip F. Florence; Audrey K. *

Florence; Scott W. Florence; * Appeals from the United States

Empire Paper Company Profit * District Court for the District

Sharing Trust, * of Minnesota.

*

Plaintiffs, *

*

v. *

*

Federal Trade Commission; *

Bennett Rushkoff; United *

States of America, *

*

Defendants/Appellees. *

___________

 Submitted: November 21, 1996

 Filed: February 13, 1997

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Before BEAM and LOKEN, Circuit Judges, and MOODY, District Judge. 1

___________

BEAM, Circuit Judge.

Appellants Warren and Jean Hartje and the Hartje Sales Company

Employees' Pension Plan (Hartje plaintiffs) and Philip, Audrey and

Scott Florence and the Empire Paper Company Profit Sharing Plan
 The Honorable Paul A. Magnuson, Chief Judge, United States

2

District Court for the District of Minnesota.

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(Florence plaintiffs) appeal the district court's dismissal of

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their actions against the United States, the Federal Trade

Commission (FTC), and Bennett Rushkoff, counsel for the FTC. We

affirm. 

I. BACKGROUND

The Hartje and Florence plaintiffs invested money in rare

coins sold by T. G. Morgan, Inc. (TGM). Michael Blodgett, TGM's

chief executive officer, personally made the coin sales to the

plaintiffs. Blodgett, however, was in the habit of selling single

coins to multiple customers, greatly overstating the value of such

coins, and using coins he had already sold as collateral to obtain

loans for his personal use. In connection with these and other

coin sales, Blodgett was eventually convicted of twenty-two counts

of fraud.

In response to these fraudulent actions, the FTC initiated a

civil enforcement action against TGM and Blodgett. A temporary

restraining order (TRO) was later entered in federal district

court, freezing the assets of TGM. A consent order, prohibiting

TGM and Blodgett from further selling or purchasing coins without

court approval, followed the TRO. The district court then

appointed Armen R. Vartian as interim receiver to handle the

disposition of TGM's assets. Vartian was given control over TGM's

property and was charged with liquidating the assets to cover the

attorney fees of TGM and Blodgett and to defray Blodgett's living

expenses. The district court also instructed Vartian to return

coins to bona fide owners with uncontested ownership claims and to

consider and document contested ownership claims. 

The receiver liquidated many coins from TGM's collection, some

of which allegedly belonged to the Hartje and Florence plaintiffs.
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Plaintiffs claim they received no notice of the coin liquidation

and that the FTC and its counsel Rushkoff knew, or should have

known, of the existence of their ownership claims. Plaintiffs

further assert that once they notified the FTC about their claims,

the FTC and Rushkoff informed the receiver that such claims were

meritless and that liquidation should continue. According to the

plaintiffs, this advice amounts to illegal interference with their

property rights. 

Initially, plaintiffs tried to intervene in the FTC

enforcement action. Their motion was denied as untimely. They

then sued the receiver in federal district court. That action was

dismissed based on official immunity. In addition, plaintiffs have

been involved in TGM's bankruptcy proceedings. Still displeased,

plaintiffs brought actions against the United States, the FTC and

Rushkoff under the Employee Retirement Income Security Act (ERISA),

the Federal Tort Claims Act (FTCA), and Bivens v. Six Unknown Named

Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). The

district court dismissed the actions for failure to state a claim

upon which relief could be granted. Fed. R. Civ. P. 12(b)(6).

Plaintiffs appeal only the dismissal of their FTCA and Bivens

actions. We affirm. 

II. DISCUSSION

The plaintiffs assert numerous claims against the United

States under the FTCA, alleging, among other things, that the

United States: (1) deprived them of their property without due

process or adequate compensation in violation of the Minnesota

Constitution; (2) illegally interfered with their property rights;

and (3) negligently failed to supervise the receiver or require the

receiver to be bonded. 

By waiving sovereign immunity for certain injuries and losses,

the FTCA provides a remedy for torts committed by federal officers.

28 U.S.C. § 1346(b). However, the discretionary function exception
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to the FTCA prohibits the maintenance of claims which are "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

Berkovitz v. United States, 486 U.S. 531, 535 (1988). This

exception shields the United States from liability in this case. 

The district court correctly found that Rushkoff was

performing a discretionary function while conducting the FTC

enforcement action in his position as FTC Counsel. This finding

encompassed Rushkoff's actions in advising the receiver as to

specific ownership claims. As the district court stated:

Making judgments and recommendations about potential TGM

customer claims was within [Rushkoff's] role as FTC

Counsel. The possibility that Rushkoff's recommendations

to the receiver were mistaken does not take his actions

to the level of an unconstitutional taking or denial of

due process, nor does it remove them from the

discretionary function exception.

Hartje v. FTC, No. 3-94-1288, mem. order at 10 (D. Minn Dec. 4,

1995). 

Furthermore, the decision-making responsibility in the coin

liquidation activities of which plaintiffs complain rested with the

receiver and not with the FTC or Rushkoff. The receiver, in turn,

was appointed by the district court and was not responsible to

either the FTC or Rushkoff. Consequently, plaintiffs' theories for

imposing liability on the United States simply do not fit the facts

of this case or the framework of the FTCA. 

Plaintiffs' real dispute is with the receiver's handling of

their ownership claims. Plaintiffs had an opportunity to reach the

receiver in their prior district court action. Additionally,

plaintiffs had the chance to intervene in the enforcement action

and have been involved in the bankruptcy action. Plaintiffs' lack
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of success in other actions simply does not justify imposing

liability on the defendants in the present suit. 

In their Bivens action, plaintiffs argue that the liquidation

proceedings operated as an unconstitutional taking of their

property without adequate compensation and a denial of their due

process rights under the Fifth Amendment. A Bivens action, which

provides a cause of action for a constitutional violation, is only

available against federal officers, not government entities.

Bivens, 403 U.S. at 397. Therefore, the United States and the FTC

are not proper Bivens defendants because of sovereign immunity.

Phelps v. U.S. Fed. Gov't, 15 F.3d 735, 739 (8th Cir. 1994). 

Even against Rushkoff, however, this Bivens action is

untenable because Rushkoff is protected by qualified immunity.

See, e.g., Butz v. Economou, 438 U.S. 478, 507 (1978) (officials

are entitled to qualified immunity unless actions knowingly violate

a clearly established constitutional right). Qualified immunity

protects Rushkoff from liability for mistakes in judgment. None of

the actions alleged here either rise above the level of a mistake

or to the level of a due process violation. Id. Therefore, we

agree with the district court that plaintiffs simply offered no

evidence which would deny Rushkoff qualified immunity. We have

considered the remainder of plaintiffs' claims and find them to be

without merit. 

III. CONCLUSION

The district court's order dismissing plaintiffs' actions is

affirmed. 

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.