DAVINCI AIRCRAFT, INC., Plaintiff-Appellant, v. UNITED STATES OF AMERICA; MICHAEL CHRISTMAS, individual and official capacity; RODNEY LEWIS, individual and official capacity; JOEL S. RUSSELL, individual and official capacity; DOES, 1 through 10, inclusive, Defendants-Appellees.
No. 17-55719
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
June 12, 2019
D.C. No. 2:16-cv-05864-CAS-JC
PAEZ, Circuit Judge
FOR PUBLICATION
Appeal from the United States District Court for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted November 13, 2018
Pasadena, California
Filed June 12, 2019
Before: Richard A. Paez, Barrington D. Parker,* and Richard R. Clifton, Circuit Judges.
Opinion by Judge Paez
SUMMARY**
Federal Tort Claims Act / Bivens
The panel affirmed the district court‘s dismissal of all of the claims of DaVinci Aircraft, Inc., alleging conversion and other common law torts against the United States and several U.S. Air Force employees; and remanded so that the district court may transfer the action to the Court of Federal Claims, if so requested.
U.S. Air Force agents seized ten military Global Positioning Systems antennas from DaVinci. DaVinci sought damages under the Federal Tort Claims Act (“FTCA“) and Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971).
In support of its abuse of process and conversion claims, DaVinci alleged that the United States and its agents conspired to fraudulently and wrongfully coerce DaVinci to surrender the antennas to the Air Force without due process or just compensation.
The panel held that DaVinci‘s abuse of process claim was barred by
The panel held that at the very least, DaVinci could seek reimbursement for the price it paid for the antennas at the Court of Federal Claims. The panel further held that DaVinci could proceed in the Court of Federal Claims under the Tucker Act through a takings claim under the Fifth Amendment.
DaVinci sued individual defendants in their individual capacities. The panel held that because DaVinci voluntarily dismissed the case against the three named individuals and never amended the complaint to include any others, DaVinci‘s Bivens claims against the individual defendants were not part of this appeal and did not exist. The panel further held that the only remaining defendant remaining was the United States, and the district court properly dismissed the Bivens claims against the United States for lack of subject matter jurisdiction.
COUNSEL
Abraham Richard Wagner (argued), Law Offices of Abraham Wagner, Los Angeles, California; David M. Baum, Baum Law Corporation, Los Angeles, California; for Plaintiff-Appellant.
David Pinchas (argued), Assistant United States Attorney; Dorothy A. Schouten, Chief, Civil Division; Nicola T. Hanna, United States Attorney; United States Attorney‘s Office, Los Angeles, California; for Defendant-Appellee.
PAEZ, Circuit Judge:
In 2014, United States Air Force agents seized ten military Global Positioning System
The FTCA allows parties to pursue certain claims against the United States in federal court for injury arising out of the negligent or wrongful conduct of any federal employee acting within the scope of the employee‘s employment. See
The district court granted the government‘s motion to dismiss all of DaVinci‘s claims against the United States for lack of subject matter jurisdiction. We have appellate jurisdiction pursuant to
I.
A.
DaVinci is a California-based corporation that purchases and sells new and used parts in the aviation and aerospace industries. DaVinci‘s problems arose out of its acquisition and the U.S. Air Force‘s subsequent confiscation of ten GPS antennas for the AGM-158 Joint Air-to-Surface Standoff Missile (“the Antennas“).
Ball Aerospace & Technologies, Inc. manufactured the Antennas under a subcontract from Lockheed Martin, a U.S. Air Force prime contractor. Under the subcontract, the Antennas were considered unclassified hardware and therefore not subject to the security requirements of the Department of Defense or U.S. Air Force for classified data and hardware. They did not require demilitarization and were authorized by the U.S. Air Force for public sale, excluding export, around March 2013. Avatar Unlimited purchased the Antennas from Lockheed Martin as part of a bulk sale of surplus parts, and then resold them to BPB Surplus, who then sold them to DaVinci for $3,000.
In September 2013, four agents from the U.S. Air Force Office of Special Investigations visited DaVinci‘s office to inspect and discuss the Antennas. After the inspection, Special Agent Laura Voyatzis demanded that DaVinci surrender the equipment. DaVinci refused to surrender the Antennas without the agents providing authority for their demands. When asked for the selling price, DaVinci quoted $1.25 million for the Antennas, after which the Special Agents left without further action.
Between April and June 2014, DaVinci corresponded with agents at Eglin Air Force Base over the Antennas. Contracting Officer Rodney Lewis initially offered
In September 2014, Special Agent Joel S. Russell and two Air Force Officers arrived at DaVinci‘s office and demanded that DaVinci surrender the Antennas under compulsion of law. Russell produced a letter dated a week earlier and signed by both Lewis and Michael Christmas, Special Agent in Charge of the Department of the Air Force,
Office of Special Investigations. The letter stated that the “delivery of the said items by [DaVinci‘s owner] and DaVinci Aircraft is made under compulsion of law pursuant to
In response to Russell‘s demands and the threat of criminal prosecution for failure to comply, DaVinci surrendered the Antennas. Russell provided a signed acknowledgment of “Receipt For Items Taken Under Compulsion” to DaVinci. That same day, DaVinci delivered to Eglin Air Force Base an invoice for the Antennas in the amount of $1.25 million.
B.
After exhausting the FTCA administrative process,1 DaVinci filed a complaint in the district court against the United States, Christmas, Lewis, and 10 unnamed individual defendants in their official capacities. The United States filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The United States argued that the district court lacked jurisdiction over DaVinci‘s tort claims because the confiscation fell into an exception of the
FTCA‘s waiver of its sovereign immunity. In support of its assertion, the government submitted a declaration from Martin D. Hemmingsen, Program Element Monitor for Air Force Special Programs, attesting that in July 2014, the Antennas were classified as “SECRET” and “SECRET/SPECIAL ACCESS REQUIRED” level in accordance with Executive Order 13,526.2 The court concluded that it lacked jurisdiction over DaVinci‘s tort claims against the United States and that DaVinci failed to state a Bivens claim against the individual defendants, and dismissed all claims without prejudice.
DaVinci filed a First Amended Complaint against the United States, Christmas, Lewis, Russell, and 10 unnamed defendants. This time, all of the individual defendants were sued in their individual capacities. DaVinci asserted six causes of action against all defendants: (1) conversion, (2) seizure of property in violation of the Fourth Amendment, (3) deprivation of property without due process in violation
United States responded with another motion to dismiss under Rules 12(b)(1) and 12(b)(6).
The district court again granted the motion to dismiss all claims against the United States. The district court concluded that it lacked jurisdiction over DaVinci‘s FTCA claims of fraud, negligent misrepresentation, and conspiracy to commit fraud or misrepresentation because
DaVinci timely appealed. The only parties on appeal are DaVinci and the United States because after the district court dismissed all claims against the United States, DaVinci dismissed the action without prejudice against Christmas, Russell and Lewis.
II.
We review de novo a district court‘s decision to grant a motion to dismiss for lack of subject matter jurisdiction. Snyder, 859 F.3d at 1156. When reviewing a dismissal pursuant to Rule 12(b)(1) and 12(b)(6), “we accept as true all facts alleged in the complaint and construe them in the light most favorable to plaintiff[], the non-moving party.” Id. at 1156-57 (citing Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). “Dismissal is improper unless ‘it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.‘” Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989) (quoting Gibson v. United States, 781 F.2d 1334, 1337 (9th Cir. 1986)); see also Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that plaintiff must plead factual allegations that “plausibly give rise to an entitlement to relief“).
III.
DaVinci argues that the district court erred by dismissing four of its claims: abuse of process, conversion, and two Bivens claims. Although the government also moved to dismiss based on failure to state a claim, our focus is on the district court‘s determination that it lacked subject matter jurisdiction over DaVinci‘s claims. We
A. The FTCA and Its Exceptions
Enacted in 1946, the FTCA provides that the United States shall be liable, to the same extent as a private party, “for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment.”
That waiver, however, is limited to only “permit[] certain types of actions against the United States.” Morris v. United States, 521 F.2d 872, 874 (9th Cir. 1975). Specifically,
claim for slander are essential to [the plaintiff]‘s claim for negligent infliction of emotional distress.” 851 F.2d at 1207. Hence, it was also barred by
B.
In support of its abuse of process and conversion claims, DaVinci alleged that the United States and its agents conspired to fraudulently and wrongfully coerce DaVinci to surrender the Antennas to the Air Force without due process or just compensation. DaVinci challenges, in essence, the government‘s conduct as it relates to the seizure of the Antennas.
i. Abuse of Process Claim
To support a cause of action for abuse of process, DaVinci “must plead two essential elements: that the defendant (1) entertained an ulterior motive in using the process and (2) committed a willful act in a wrongful manner.” Snyder, 859 F.3d at 1161 (quoting Coleman v. Gulf Ins. Grp., 718 P.2d 77, 81 (Cal. 1986)). Because DaVinci‘s claim is premised on the seizure of the Antennas, we must first decide whether
(1984) (holding that plaintiff‘s negligence claim fell under the detention of goods exception because he was challenging the Customs officials’ negligence in the handling of his seized artwork), with Cervantes v. United States, 330 F.3d 1186, 1189–90 (9th Cir. 2003) (holding that plaintiff‘s negligence claim did not fall under the detention of goods exception because the alleged negligence had nothing to do with the detention of the car at issue). We hold that DaVinci‘s abuse of process claim is barred by
The FTCA bars “[a]ny claim arising in respect of ... the detention of any goods, merchandise, or other property by any officer of customs or excise or any other law enforcement officer.”
Bramwell v. U.S. Bureau of Prisons, 348 F.3d 804, 807 (9th Cir. 2003).
DaVinci attempts to distinguish its situation by emphasizing that the Antennas were permanently taken and without any allegation of criminal conduct, unlike those in Kosak or Foster v. United States, 522 F.3d 1071 (9th Cir. 2008), where the property was temporarily detained pending a criminal investigation. We recognize that other courts have confined
As the case law stands, we have not made any distinction between a permanent or temporary detention. See id.; see also Ali, 552 U.S. at 216 (affirming that the detention of goods exception barred petitioner‘s claim against prison officials for losing some of his possessions during a transfer); United States v. $149,345 U.S. Currency, 747 F.2d 1278, 1283 (9th Cir. 1984) (holding that
(holding exception applied where goods were damaged during prison transfer); Bramwell, 348 F.3d at 805-06 (applying
Perhaps acknowledging the breadth of the exception, Congress added paragraphs (1)-(4) to
exception to the detention of goods exception for property “seized for the purpose of forfeiture.”
ii. Conversion Claim
The same logic extends to prohibit DaVinci‘s conversion claim because it is based on the allegedly illegal seizure of goods. See Gasho, 39 F.3d at 1433 (holding that
DaVinci relies on a line of our cases to argue that the district court had jurisdiction to hear his conversion claim because it “sounds in tort” and could not be heard in the Court of Federal Claims. These cases did recognize that where a contract between the plaintiff and federal government was not the sole basis for liability and a claim was “essentially one sounding in tort,” the district court had jurisdiction to hear the plaintiff‘s FTCA claim. Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 550 (9th Cir. 1984) (quoting Woodbury v. United States, 313 F.2d 291, 294–96 (9th Cir. 1963)); see also Love, 915 F.2d at 1246-47 (holding that district court has jurisdiction under the FTCA to consider conversion claim under Montana law). DaVinci‘s reliance on these cases is misplaced, however, because they predate the expansion of
the detention of goods exception by the Supreme Court to “sweep within the exception all injuries associated in any way with the ‘detention’ of goods,” Kosak, 465 U.S. at 854, by “all law enforcement officials,” Ali, 552 U.S. at 216.
DaVinci correctly asserts that the Court of Federal Claims would have no jurisdiction over its conversion claim because it is a pure tort claim. See Snyder, 859 F.3d at 1156 n.2; see also Hall v. United States, 19 Cl. Ct. 558, 559 (1990) (noting that “the parties agreed that plaintiffs would not pursue their conversion claim as [the Court of Federal Claims] does not have jurisdiction over claims sounding in tort.“), aff‘d, 918 F.2d 187 (Fed. Cir. 1990). As discussed below, however, this does not mean that DaVinci is foreclosed from all relief.
C. The Tucker Act and Court of Federal Claims8
As the Supreme Court discussed in Kosak, one rationale for an expansive interpretation of the FTCA exceptions is that Congress did not intend the FTCA to provide recovery where “adequate remedies were already available.” 465 U.S. at 858. The Tucker Act has long provided a venue for claims like the one DaVinci brings here. See
or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” (emphasis added)). In fact, the district court noted that claims like DaVinci‘s-claims against the United States for compensation or the return of materials seized pursuant to
The Court of Federal Claims’ opinion in Ast/Servo Systems, Inc. v. United States contained strikingly similar facts to DaVinci‘s situation. 449 F.2d 789, 789 (Ct. Cl. 1971). In Ast/Servo Systems, Inc., the Air Force mistakenly sold through a public sale surplus governmental material, specifically guidance sets, which the plaintiff bought from the original purchasers for $65-300 apiece and then offered for sale at a 10-50 times markup. Id. at 789. The Air Force subsequently informed the plaintiff that the guidance sets “relat[ed] to the national defense” under the Espionage Act, and demanded immediate return of the equipment. Id. at 789–90. The plaintiff complied and then brought suit for “just compensation” in the amount of the sales price it had marked up. Id. at 790. Applying principles of contract law, the court held that the plaintiff could not recover “just compensation” because the
DaVinci could proceed in the Court of Federal Claims under the Tucker Act through a takings claim under the Fifth Amendment. See, e.g., Lockheed L-188 Aircraft, 656 F.2d at 395-97 (dismissing plaintiffs’ counterclaim under the Tucker Act because it exceeded the $10,000 jurisdictional limit, but noting that they could pursue an independent action to recover compensation for their seized aircraft in the Court of Federal Claims); see also Hall, 19 Cl. Ct. at 559 (“[P]laintiffs seek entitlement to the sum of $175,000.00 as just compensation under the fifth amendment on account of the government‘s alleged taking of the [F-100 jet engine unified fuel control].“); Consejo de Desarrollo Economico de Mexicali, A.C. v. United States, 482 F.3d 1157, 1172 (9th Cir. 2007) (“Assuming, without deciding, that [plaintiffs] had a cognizable property interest, its remedy for an alleged takings claim is under the Tucker Act,
D. Bivens Claims
A Bivens suit may be brought against a government official in her individual capacity, but not in her official capacity because such a suit “would merely be another way of pleading an action against the United States, which would be barred by the doctrine of sovereign immunity.” Id. at 1173. “Sovereign immunity is jurisdictional in nature,” so there is no subject matter jurisdiction unless sovereign immunity has been waived. FDIC v. Meyer, 510 U.S. 471, 475 (1994).
DaVinci sued Christmas, Lewis, Russell and 10 unnamed defendants in their individual capacities. On appeal, DaVinci argues that the district court erred in dismissing its Bivens claims because the named individual officers were included in the government‘s motion to dismiss. This argument, however, is belied by the record. The government‘s motion to dismiss was filed on behalf of only the United States.10 More importantly, DaVinci concedes that it dismissed the case without prejudice against Christmas, Russell and Lewis due to the “practical impossibility of personal service.” DaVinci also asserts
remain parties to the case on appeal, but DaVinci never attempted to amend its complaint to include those individuals nor did DaVinci actually serve them with a summons and complaint.
In order for the district court to exercise personal jurisdiction over a defendant sued in her individual capacity, the defendant must be “properly served” in her individual capacity. Daly-Murphy v. Winston, 837 F.2d 348, 355 (9th Cir. 1987). “We require ‘substantial compliance with [Federal Rule of Civil Procedure] 4.‘” Id. (quoting Jackson v. Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982)). Because DaVinci voluntarily dismissed the case against the three named individuals and never amended the complaint to include any others, DaVinci‘s Bivens claims against the individual defendants are not part of this appeal and do not exist. The only defendant remaining is the United States, and the district court properly dismissed the Bivens claims against the United States for lack of subject matter jurisdiction. See Meyer, 510 U.S. at 475, 486; Daly-Murphy, 837 F.2d at 356.
IV.
The saga over the seizure of DaVinci‘s Antennas illustrates a tension arising out of our FTCA cases. On the one hand, we are instructed to construe statutes waiving the government‘s sovereign immunity strictly in favor of the sovereign. Yet we must also be wary of reading exemptions so broadly that the FTCA exceptions swallow up the statute and leave no recourse for plaintiffs like DaVinci. Notwithstanding where the Antennas are today, DaVinci may have a remedy, even if limited, in the Court of Federal Claims.
Therefore, we affirm the judgment of the district court and remand this case with instructions that, if DaVinci so requests, the court shall transfer this action to the Court of Federal Claims pursuant to
AFFIRMED AND REMANDED WITH INSTRUCTIONS.
Notes
During oral argument, DaVinci‘s counsel asserted, for the first time, that the government no longer has custody of the Antennas because they were used during an attack in Syria and, hence, the detention of goods exception does not apply. Oral argument at 29:37-30:30, DaVinci Aircraft, Inc. v. United States, No. 17-55719 (9th Cir. Nov. 13, 2018), https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000014566. DaVinci did not mention the lack of custody in its briefing and has conceded that it cannot point to any evidence in the record to support the contention. Id. We therefore do not address the applicability of