Opinion ID: 784472
Heading Depth: 3
Heading Rank: 1

Heading: The Uniform Definition Approach

Text: 37 When giving a term a uniform definition for purposes of a statute like the FTCA, the term can either be given its ordinary or natural meaning or be treated as a term of art that has a conventional meaning. 10 Compare Meyer, 510 U.S. at 476, 114 S.Ct. 996 (construing the FTCA's use of term cognizable in accordance with its ordinary or natural meaning and citing a Black's Law Dictionary definition); Smith v. United States, 507 U.S. 197, 201-02, 113 S.Ct. 1178, 122 L.Ed.2d 548 (1993) (construing the FTCA's exception for claims arising in a foreign country in terms of its commonsense meaning, and thus as referring to a region or tract of land and not a sovereign state); and Kosak v. United States, 465 U.S. 848, 852, 104 S.Ct. 1519, 79 L.Ed.2d 860 (1984) (stating, in reference to the FTCA's exception for claims arising from customs officials' detention of goods, that [t]he starting point of our analysis of these competing interpretations must, of course, be the language of § 2680(c). We assume that the legislative purpose is expressed by the ordinary meaning of the words used.) (quotation marks and citation omitted); with Molzof, 502 U.S. at 306-07, 112 S.Ct. 711 (stating, in reference to the FTCA's bar on the recovery of punitive damages, that `[p]unitive damages' is a legal term of art that has a widely accepted common-law meaning, and noting the cardinal rule of statutory construction that holds that [w]here Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries and practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken.... In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.) (internal quotation marks omitted); id. at 307-308, 112 S.Ct. 711 (This rule carries particular force in interpreting the FTCA. Certainly there is no warrant for assuming that Congress was unaware of established tort definitions when it enacted the Tort Claims Act in 1946, after spending some twenty-eight years of congressional drafting and redrafting, amendment and counter-amendment.) (internal quotation marks omitted). 38 The district court seemingly took neither approach. After defining property in a dictionary fashion as, inter alia, the right to dispose of a thing in every legal way, to possess it, to use it, and to exclude everyone else from interfering with it, it relied on a District of Maryland decision that [i]n order to be covered by the FTCA there must have been a physical impact of some type on the plaintiff or its property, Charles Burton Builders, Inc., 768 F.Supp. at 162 (emphasis added). In doing this, the district court was positing a definition of property that emphasized tangibility or thing-ness. 11 But this definition is not only contrary to property's ordinary dictionary meaning, 12 it is also clearly untenable in the context of the FTCA. Section 1346(b)(1) manifestly encompasses some torts that are not accompanied by a physical impact. There is no doubt, for example, that legal malpractice is cognized by the FTCA because Congress has prescribed special rules for FTCA claims relating to the malpractice of Department of Defense and Coast Guard lawyers, including an exemption of such claims from the FTCA's misrepresentation exception and a provision making the FTCA the exclusive remedy for such negligence. See 10 U.S.C. § 1054(a)&(e). 39 That section 1346(b)(1) encompasses a wide sweep of intangible tort claims is also evidenced by Congress' decision to limit that liability by setting out specific exceptions in section 2680. These exceptions exclude some but not all non-physical harms. See 28 U.S.C. § 2680(h) (barring claims arising out of, inter alia, libel, slander, misrepresentation, deceit, and interference with contract rights). If the kind of non-physical harm at stake in interference-with-contract-rights actions did not qualify as injury or loss of property in section 1346(b)(1), there would have been little reason to exclude such actions in section 2680. 13 See Kosak, 465 U.S. at 852 n. 7, 104 S.Ct. 1519 (a construction of one provision of the FTCA that renders another provision mere surplusage is subject to considerable doubt). 40 Congress was indeed interested in limiting the scope of the government's waiver of immunity from suits for negligence and intentional torts, but we have found no indication either in the language or legislative history of the Act that Congress meant to accomplish this through the phrase injury or loss of property, and every indication that Congress did so through the specific and detailed exceptions it established in section 1280. 14 It is little surprise, then, that both the Supreme Court and the federal appeal courts have regularly looked to those exceptions to effectuate Congress' desire to limit governmental tort liability, rather than doing so by reading limitations into the concept of property. See, e.g., United States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991) (claim barred by discretionary-function exception where a shareholder sued to recover, inter alia, the loss in value of his shares allegedly caused by the government's negligent supervision of directors of a savings and loan association); United States v. Neustadt, 366 U.S. 696, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961) (claim barred by misrepresentation exception where a purchaser relied on a faulty Federal Housing Administration appraisal and consequently paid too much for a house); see also Jones v. United States, 207 F.2d 563 (2d Cir.1953) (claim barred by misrepresentation exception where plaintiffs sold stock for too low a price in reliance upon the U.S. Geographical Survey's inaccurate estimates concerning the oil productivity of certain land); Art Metal-U.S.A., Inc. v. United States, 753 F.2d 1151 (D.C.Cir.1985) (claim barred by interference-with-contract-rights exception, where a contractor charged General Services Administration with tortious interference with prospective economic advantage for having constructively excluded plaintiff in violation of federal procurement regulations). Significantly, in none of these cases did the courts suggest that the plaintiff's claim was not for injury or loss of property. 41 But finding that injury or loss of property encompasses harm that is not physical does not suffice to support Plaintiff's claim. We must also determine whether her interest in being a beneficiary is sufficiently substantial to qualify as property for purposes of this torts action. Admittedly, the technical meaning of property is more difficult to pin down than that of punitive damages, which was at issue in Molzof. This is so because property is a term with a famously diffuse set of meanings across a range of areas of law. And, at least since the end of the nineteenth century, the conceptualistic approach to understanding its meaning has given way to a functionalist approach that designates something as property according to the context and purpose of the designation. 15 Consequently, examining the use of the word property in the law of, say, taxation may be of little help if we are interested in the meaning of that term in a statute dealing with torts. Cf. Segal v. Rochelle, 382 U.S. 375, 380, 86 S.Ct. 511, 15 L.Ed.2d 428 (1966) (observing, in interpreting the Bankruptcy Act, that [i]t is impossible to give any categorical definition to the word `property,' nor can we attach to it in certain relations the limitations which would be attached to it in others. Whether an item is classed as `property' by the Fifth Amendment's Just-Compensation Clause or for purposes of a state taxing statute cannot decide hard cases under the Bankruptcy Act, whose own purposes must ultimately govern.) (internal quotation marks omitted). 42 In tort law, injury to property and loss of property have neither conventional nor ordinary, dictionary-type meanings. They are, instead, defined in terms of the kinds of harms to property for which a plaintiff may seek redress. As a result, in order to determine whether there exists an injury or loss of property, we must examine whether Plaintiff's claim seeks to vindicate an interest that is given protection by the general common law of torts. In other words, we must determine whether Plaintiff's interest is treated as property for torts purposes. For the reasons given below, we conclude that Plaintiff's claim satisfies this requirement. 43 The parties focus their energies on whether the interest of a beneficiary of a life insurance policy — or the analogous interest of a potential heir to a will — is a mere expectancy or something more substantial. And, predictably, they take different sides on the matter. In fact, according to a leading insurance treatise, states take one of two views. A majority of jurisdictions hold that, where a right to change the beneficiary is reserved in a life insurance policy, the beneficiary has only a revocable expectancy contingent upon being the beneficiary at the time of the insured's death. 4 COUCH ON INSURANCE § 58:14 (3d ed. 2003) (collecting cases); see also RESTATEMENT (THIRD) OF PROPERTY (Wills & Don. Trans.) § 2.1 (comment d) (1999) (Before the decedent's death, a potential heir has no property interest but merely an `expectancy' (an inchoate interest) in the decedent's intestate estate.). A minority of jurisdictions, by contrast, holds that a beneficiary of a life insurance contract acquires not merely an expectancy in the anticipated benefits, but a qualified vested interest subject to be divested if a change in the beneficiary is made. COUCH § 58:15 (also using the terminology qualified property right). 44 Couch's treatise, however, notes that there is little, if any, practical difference between the mere expectancy and qualified property right positions: 45 [T]o the extent that the concept of a qualified property right, or of a vested right subject to divestment, has been adopted to give the beneficiary standing to object to a change of beneficiary, the same result could be reached by simply interpreting expectancy in the property law sense, which enables an heir to challenge the validity of a disinheriting or excluding will even when the heir's right to the property in question is merely an expectancy. 46 Although the power to change beneficiaries is reserved, the beneficiary's interest is sufficiently substantial that it may be recognized in law or equity. Id. 16 47 In other words, the label given to a beneficiary's interest seems not to be determinative of what recourse the law gives to a beneficiary to protect her status against the actions of third parties. Indeed, the treatise goes on to note that, under the majority rule, where a change of beneficiary has been accomplished by fraud or undue influence practiced by the substituted beneficiary, the rights of the original beneficiary are not cut off by the attempted substitution. Equity may entertain jurisdiction ... to set aside a change to a substituted beneficiary.... The original beneficiary may also sue the second beneficiary for damages.... Id. § 60:72. Cf. id. (a minority view holds that where the insured had the right to change beneficiaries, the original beneficiary has no vested right which gives him or her any standing to protest that the insured was fraudulently induced to exercise his or her right). 48 Were this all we had to go on, we would be hard put to say which view should be deemed that taken by the FTCA. If, however, we look to the most relevant area of law, torts, the matter becomes much easier. For, in tort law, we find that the interest of a beneficiary or heir is regularly afforded substantial protection. 17 For example, the RESTATEMENT (SECOND) OF TORTS delineates a cause of action for the intentional interference with inheritance or gift as follows: 49 One who by fraud, duress, or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift. 50 RESTATEMENT (SECOND) OF TORTS § 774B (1979); see also id. (comment b) (gift includes the designation of another as a beneficiary under an insurance policy). Significantly, for the issue before us, whether the beneficiary's interest is treated as a mere expectancy or as something more is not a threshold consideration going to whether a tort action lies. Rather, the contingent nature of the interest goes instead to the existence of factual causation. Accordingly, the beneficiary must provide proof amounting to a reasonable degree of certainty that the bequest or devise would have been in effect at the time of the death of the testator or that the gift would have been made inter vivos if there had been no such interference. Id. (comment d). 51 Most states that have decided the issue in the inheritance context are in accord with the Restatement's approach. See Diane J. Klein, The Disappointed Heir's Revenge, Southern Style: Tortious Interference with Expectation of Inheritance — A Survey with Analysis of State Approaches in the Fifth and Eleventh Circuits, 55 BAYLOR L. REV. 79, 84 n. 15 (2003) (reporting that approximately 24 states have recognized tortious interference with expectation of inheritance, less than 10 states have rejected it, and the rest have not decided); see also Sonja A. Soehnel, Annotation, Liability in Damages for Interference with Expected Inheritance or Gift, 22 A.L.R.4th 1229, at § 2, 1983 WL 191057 (1983) (In those cases in which the courts have expressed a general view as to the propriety of a cause of action for damages for interference with a gift, which include a number of cases involving interference with an inheritance, the courts have generally stated that such a cause of action would lie.) 18 52 The early, and hence leading, case of Mitchell v. Langley, 143 Ga. 827, 85 S.E. 1050 (1915), in which the plaintiff sued her sister for writing letters to their ill half-brother that wrongfully induced him to cancel a benefit society certificate that had named all three sisters as equal beneficiaries, and for leading him to obtain a new certificate making the defendant the sole beneficiary, stated it thus: 53 The fact that this status has not ripened into a vested and irrevocable ownership of the beneficial interest, and that the member has a right to change it, does not authorize a third party to maliciously and fraudulently destroy the status and thus prevent the interest or expectancy of the beneficiary from ripening so that he will receive the fund. The reserved right of the member is one thing; the malicious and fraudulent interposition of a third party to destroy the status is another. 54 85 S.E. at 1052. 55 Further support for our conclusion that one's interest as a beneficiary or heir is sufficient to support liability in tort can be found in the cases dealing with a lawyer's liability to an intended heir for the negligent preparation of a will or other estate-planning device. The privity requirement that once blocked third-parties from bringing professional negligence claims has eroded steadily since Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922) (Cardozo, J. ), so that, today, an overwhelming majority of jurisdictions recognizes an intended beneficiary's cause of action for the negligent drawing of a will. See Barcelo v. Elliott, 923 S.W.2d 575, 579 (Tex.1996) (Cornyn, J., dissenting) (collecting cases and reporting that only four states in addition to Texas do not allow the intended beneficiary to sue). In these cases, the contingent nature of the plaintiff's loss — i.e. the fact that, had the plaintiff been properly named in the will, the testator, before her death, could have revoked the plaintiff's status as an heir and designated another — is given no special attention. 56 In view of the widespread recognition of liability for tortious interference with an inheritance and of a lawyer's liability to an intended heir — not only now, but at the time Congress used the phrase injury or loss of property in the FTCA — we conclude that the loss that Plaintiff complains of would fall within the meaning of that phrase. 19 It would, that is, if the phrase is to be given a uniform, federal definition. What, however, if the phrase depends for its meaning on the law of the relevant state?