Cibula Ex Rel. J.A.C. v. United States
2012 U.S. App. LEXIS 382
| 4th Cir. | 2012Background
- FTCA waives sovereign immunity, making the U.S. liable as a private individual under like circumstances; liability is determined by law of the place where the negligent act occurred, here California law on damages.
- J.C. (son of Andrew and Jennifer Cibula) suffered significant brain damage due to alleged negligence by Government doctors in California; district court awarded substantial damages including a large future care cost award.
- The district court calculated J.C.'s future care costs using a present-value method ($22,823,718) based on a 64.8-year life expectancy and an assumed 4.25% after-tax return, to be held in a trust for J.C.’s benefit.
- Under Virginia law at the time, the district court rejected a California-style reversionary trust; on remand, the court sought a remedy consistent with California’s periodic-payment framework while acknowledging FTCA’s limitation on ongoing Government obligations.
- On remand, the district court rejected the proposals to fund gross future costs or to create a pure reversionary trust, ultimately placing the $22,823,718 in a special needs trust without a reversion provision, and the Government appealed.
- This court held California law controls, and that under FTCA the Government may be required to provide a remedy approximating § 667.7 by a reversionary interest, up to and including an upfront lump-sum and reversionary mechanism, remanding for the district court to craft such a remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May FTCA remedy include a reversionary trust? | Cibulas: reversionary trust needed to approximate California § 667.7. | United States: FTCA disallows continuing obligations; reversionary trust appropriate if closely approximating private liability under CA law. | Yes; remand to craft a reversionary remedy approximating § 667.7. |
| Corpus for reversionary trust to approximate California law? | Cibulas: use gross future costs as corpus to approximate full CARE damages. | Government: use present-value award ($22.8M) placed upfront in trust; allows immediate investment benefits. | Present-value award up front with a reversionary interest can satisfy § 667.7 while approximating CA law. |
| Does Salgado concern about windfalls apply to this FTCA remedy? | Cibulas rely on Salgado to require gross-cost basis to avoid discounting loss. | Government argues lump-sum upfront permits investment and avoids windfall concerns; Salgado concerns not present here. | District court erred by ignoring changed economic conditions; but remedy can still approximate CA law via reversionary structure. |
| Whether lost future earnings damages can have a reversionary interest? | Not challenged; theory supports reversion under CA framework. | Salgado and FTCA limitations prevent reversionary interest in earnings. | Reversionary interest in lost future earnings denied; not subject to termination on death per Salgado. |
Key Cases Cited
- Cibula v. United States, 551 F.3d 316 (4th Cir. 2009) (remand to apply CA law and craft remedy approximating private liability)
- Salgado v. County of Los Angeles, 967 P.2d 585 (Cal. 1998) (periodic payments to prevent windfall; prevent double discount)
- Hull v. United States, 971 F.2d 1499 (10th Cir. 1992) ( FTCA cannot impose ongoing federal obligations; periodic-payments framework)
- Dutra v. United States, 478 F.3d 1090 (9th Cir. 2007) (FTCA permits periodic-like payments via reversionary trusts to approximate state statutes)
- Hill v. United States, 81 F.3d 118 (10th Cir. 1996) (reversionary trust may approximate state periodic payment results)
- Am. Bank & Trust Co. v. Cmty. Hosp., 683 P.2d 670 (Cal. 1984) (periodic payments reduce insurance costs; supports MA approach to damages)