FLORIDA AUTO AUCTION OF ORLANDO, INCORPORATED, d/b/a Lakeland Auto Auction, as Successor in Interest to the claims of Lakeland Auto Auction, Incorporated; Florida Auto Auction of Orlando, Incorporated, d/b/a Imperial Auto Auction of Orlando, Incorporated, as Successor in Interest to the Claims of Florida Auction Services Corporation, d/b/a Imperial Auto Auction of Orlando; Centennial Casualty Company, as Subrogee of Claims of ADT Automotive, Incorporated, Formerly Doing Business as West Palm Beach Auto Auction, Incorporated; Florida Auto Auction Of Orlando, Incorporated; Centennial Casualty Compаny, as Subrogee of the Claims of ADT Automotive, Incorporated, Formerly Doing Business as Orange County Auto Auction, Incorporated, Now Known as Greater Orlando Auto Auction, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. FLORIDA AUTO AUCTION OF ORLANDO, INCORPORATED, d/b/a Lakeland Auto Auction, as Successor in Interest to the Claims of Lakeland Auto Auction, Incorporated; Florida Auto Auction of Orlando, Incorporated, d/b/a Imperial Auto Auction of Orlando, Incorporated, as Successor in Interest to the Claims of Florida Auction Services Corporation, d/b/a Imperial Auto Auction of Orlando; Centеnnial Casualty Company, as Subrogee of Claims of ADT Automotive, Incorporated, Formerly Doing Business as West Palm Beach Auto Auction, Incorporated; Florida Auto Auction of Orlando, Incorporated; Centennial Casualty Company, as Subrogee of Claims of ADT Automotive, Incorporated, Formerly Doing Business as Orange County Auto Auction, Incorporated, Now Known as Greater Orlando Auto Auction, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
Nos. 95-1271, 95-1347
United States Court of Appeals, Fourth Circuit
Argued Nov. 1, 1995. Decided Jan. 31, 1996.
74 F.3d 498
A court may award costs and “mаy also award a reasonable attorney‘s fee to the prevailing party as part of the costs.”
Chase maintains that he had a reasonable basis to test the legal question of whether animal mannequins are copyrightable and thus he should not be assessed legal fees for doing so. He points to the district court‘s assessment that the case “presented legal questions that were novel and complex.” We agree that if Chase had pursued these legal issues in good faith, an award of attorneys fees would constitute an abuse of discretion. But the record in this case belies the suggestion that Chase maintained his legal position in good faith.
The record shows that Chase adopted a business practice of copying animal mannequins created by competitors, justifying the practice with the claim that animal mannequins are not copyrightable. As a result of this practice he has been sued repeatedly for copyright infringement. At the same time that he was making the contention that animal mannequins are not copyrightable, however, he was applying for copyrights for his own mannequins, affixing copyright notices to them, and warning others that his mannequins are “legally copyrightеd” and “any infringement will be vigorously prosecuted.” When one of his fish mannequins was found by a court to be not copyrightable—a decision that he now argues vindicates his contention that animal mannequins are not copyrightable—he nevertheless continued to warn the public, “Beware of look-a-likes,” and “[D]esperate ‘copy cats’ [are] working overtime in an attempt to deceive the public and violate the rights of others.” (Emphasis added). Moreover, he continued to attach copyright notices to his mannequins to “bluff” others into believing his forms were copyrighted. He admits that he is a member of a trade association that has adopted an ethical code that prohibits copying, but characterizes the code as “whitewash,” which was “passed for show.”
The district court recognized that it was not required to award attorneys fees to the prevailing party and did so only after carefully considering each of the relevant factors. In this case, it found Chase‘s conduct “outrageous,” and we conclude that the court‘s finding is amply supported. Under such circumstances, we do not find the district court‘s award in this case to constitute аn abuse of discretion.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
Reversed in part and affirmed in part by published opinion. Judge MURNAGHAN wrote the opinion, in which Judge MOTZ and Senior Judge YOUNG joined.
OPINION
MURNAGHAN, Circuit Judge:
Appellees, automobile auctioneers, sued Appellant, the Federal Government, claiming that United States Customs officials committed the torts of negligence and conversion when they allowed automobiles to be exported without requiring presentation of the certificates of title. The district court granted the Government‘s motion for summary judgment on Appеllees’ conversion claim, but held that the Federal Tort Claims Act permitted Appellees to sue the Government for breach of a duty seemingly imposed on it by Customs regulations. Following a bench trial, the court held that Customs officials had behaved negligently, and awarded Appellees damages exceeding $400,000. We reverse in part and affirm in part.
I.
Appellees conduct automobile auctions in the State of Florida, selling used cars to wholesale dealers. Appellees review the
In January 1990, Appellees sold numerous cars to Preowned Cars, Inc., a company with which Appellees had been dealing for more than three years. Preowned was permitted to submit sight drafts to Appellees promising payment of approximately $600,000. Soon thereafter, Preowned shipped thе cars to Charleston, South Carolina, in order to export the vehicles to Saudi Arabia. Despite the provisions of
Aftеr proving unable to secure payment from Preowned, Appellees filed suit in federal district court, claiming entitlement to damages under theories of conversion and negligence. The district court granted the Government‘s motion for summary judgment on Appellees’ conversion claim, finding that, under South Carolina law, conversion is the “unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or the exclusion of the owner‘s rights,” see Powell v. A.K. Brown Motor Co., 200 S.C. 75, 20 S.E.2d 636, 637 (1942), and that Customs officials never possеssed the automobiles or exercised “any of the rights of ownership over the automobiles in question.” Even if Customs officials had taken possession of the cars, the district court reasoned, the Federal Tort Claims Act‘s waiver of sovereign immunity would have been deemed rescinded by
With respect to Appellees’ negligence claim, however, the district court denied the Government‘s motion for summary judgment. Finding that Customs officials have a regulatory obligation to require presentation of certificates of title before allowing automobiles to be exported and that Customs officials did not demand such certificates in the instant case, the court held that the Government‘s failure to require presentation of the certificates was actionable under a state-law negligence theory of liability, and that jurisdiction under the Federal Tort Claims Act was therefore proper. The district court subsequently found the Government liable for negligence and awarded Appellees damages exсeeding $400,000.
The Government has appealed the district court‘s denial of its motion for summary judgment on Appellees’ negligence claim. Appellees have cross-appealed the district court‘s grant of summary judgment to the Government on their conversion claim.
Grants and denials of motions for summary judgment are reviewed de novo. Henson v. Liggett Group, Inc., 61 F.3d 270, 274 (4th Cir.1995).
II.
“The basic rule of federal sovereign immunity is that the United States cannot be
for injury or loss of property ... 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, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
Under Goldstar and like cases, there are therefore two instances in which the FTCA 2 would permit Appellees to sue the Government for negligence as a result of Customs officials’ failure to enforce federal regulations. First, the suit would be permitted if Appellees showed that “the alleged breach of duty is tortious under state law.” See Goldstar, 967 F.2d at 969. Second, the suit would be permitted if Appellees demonstrated that the Government had breached a duty imposed by federal law that is similar or analogous to a duty imposed by state law. See id.
A. TORTIOUS BREACH OF DUTY UNDER STATE LAW
1. Violation of a Duty Imposed by Federal Regulations
To make out a claim of negligence under South Carolina law, a plaintiff “must show (1) a duty of care owed by the defendant to the plaintiff; (2) a breach of that duty by a negligent act or omission; and (3) damage proximately resulting from the breach.” Andrews v. Piedmont Air Lines, 297 S.C. 367, 377, 377 S.E.2d 127, 128 (1989). Ordinarily, under the State‘s “public-duty doctrine,” public officials are “not liable to individuals for their negligence in discharging public duties as the duty is owed to the public at large rather than [to] anyone individually.” Jensen v. Anderson County Dep‘t of Social Services, 304 S.C. 195, 403 S.E.2d 615, 617 (1991). In the case at bar, the district court nevertheless held that Appellees’ negligence clаim should go to the trier of fact. The district judge reviewed Summers v. Harrison Construction, 298 S.C. 451, 381 S.E.2d 493 (Ct.App.1989), to determine under what circumstances South Carolina courts find that a statute or regulation establishes a special duty of care by which government officials must abide in their dealings with the general public, and may violate only upon pain of being found liable for negligence. The court concluded that the various requirements had been met.3
In Summers, the South Carolina Court of Appeals stated that “statutes which create or define the duties of a public office have the essential purpose of providing for the structurе and operation of government or for securing the general welfare and safety of the public,” and that “[s]uch statutes create no duty of care towards individual members of the general public.” 381 S.E.2d at 496. The court went on to say, though, that a “special duty” to particular individuals may be created by such a statute when
(1) an essential purpose of the statute is to protect against a particular kind of harm;
(2) the statute, either directly or indirectly, imposes on a specific public officer a duty to guard against or not cause that harm;
(3) the class of persons the statute intends to protect is identifiable before the fact;
(4) the plaintiff is a person within the protected class;
(5) the public officer knows or has reason to know of the likelihood of harm to members of the class if he fails to do his duty; and
(6) the officer is given sufficient authority to act in the circumstances or he undertakes to act in the exercise of his office.
Id. In the instant case, the district court concluded that an essential purpose of the regulation is to protect against a particular kind of harm (unlawful exportation of vehicles), the regulation imposed on specific Government officers a duty to guard against that harm (exporters must present certificates of title to Customs officials), the regulation is intended to protect an identifiable class of persons (lawful owners of vehicles that are in the possession of third parties), the plaintiffs are within that protected class (Appellees held the certificates of title), public officials had reason to know of the harm that could be caused if they failed to fulfill their duty (Customs officials should have known of the losses Appellees could sustain if they did not demand certificates of title), and the officers had been given sufficient authority to carry out the given duty (Customs officials had the power to block exportation pending submission of the certificates). The district court concluded that “[t]he violation by Defendant of its own Regulation only serves to establish Defendant‘s actions in permitting the vehicles to be exported without certificates of title as negligence per se.”
We believe that the district court erred. South Carolina courts consistently have been reluctant to find special duties statutorily imposed. In Summers, the Court of Appeals held that a state statute requiring officers who issue building permits to secure evidence that the builders and renovators of residences are licensed did not create a special, actionable duty to protect homeowners. 381 S.E.2d at 495-96. The court reasoned that the statute was intended simply to protect the general public “by insuring that only licensed builders perform residential building,” and that the duty to secure particular documentation did not impose on government officials a duty to guard against poor workmanship. Id. at 496. Similar reluctance is evident in other cases as well. See, e.g., Brady Development Co. v. Town of Hilton Head Island, 312 S.C. 73, 439 S.E.2d 266, 268 (1993) (holding that the town‘s Development Standards Ordinance was intended to protect the public from overdevelopment, not to protect homeowners from deprivation of water and other services); Bellamy v. Brown, 305 S.C. 291, 408 S.E.2d 219, 220-21 (1991) (holding that statutorily prescribed exceptions to the disclosure requirements of the state‘s Freedom of Information Act did not establish a duty to maintain confidentiality); Jensen v. South Carolina Dep‘t of Social Services, 297 S.C. 323, 377 S.E.2d 102, 105-07 (Ct.App.1988) (holding that the state‘s Child Protection Act, which required state and local officials to carry out various training, monitoring, reporting, and investigative responsibilities, did impose on local officials to whom instances of alleged child abuse had been rеported a special duty to investigate and intervene, but did not impose on state officials a special duty to protect particular children), aff‘d, 304 S.C. 195, 403 S.E.2d 615 (1991); Rayfield v. South Carolina Dep‘t of Corrections, 297 S.C. 95, 374 S.E.2d 910, 916-17 (Ct.App.1988) (holding that a state statute requiring prison and parole officials to keep records of prisoners’ habits and deportment and to prepare adequate reports concerning parole candidates did not create a special duty to protect particular members of the public against crimes committed by released prisoners), cert. denied, 298 S.C. 204, 379 S.E.2d 133 (1989).
As in Summers, Jensen, and Rayfield, there is clearly a link in the case at bar betweеn the documentation requirements and the harm eventually suffered: just as requiring a builder‘s license makes shoddy construction of residences less likely, just as reporting and monitoring requirements decrease the likelihood that children will be abused, and just as documenting and reporting prisoners’ habits and dispositions decreases the likelihood that dangerous prisoners will be released, requiring certificates of title decreases the likelihood that cars will be removed from the United States without the consent of their owners. Yet, as in Jensen, “[n]o language in the [regulation] charges the specific officers with a duty to prevent such crimes.” See 374 S.E.2d at 917. Indeed, the evident purpose of the regulation is not to impose on Customs officials a duty to protect Appellees and certain other identifiable parties from non-payment of debts,4 but is instead to deter exportation of stolen autos by establishing procedures that must be followed when exporting used cars and by imposing varying levels of liability on importers and exporters that do not follow those procedures.5
We therefore conclude that the district court erred when it held that the federal regulatiоn imposed on Customs agents a special duty, violation of which could subject the Government to liability for negligence under South Carolina law.
2. Violation of a “Good Samaritan” Duty
Appellees contend that, even if the federal regulation did not create a special duty to protect them from the harm that they suffered, the Government is nevertheless liable for negligence under South Carolina law. As the Government points out, South Carolina courts have adopted the “Good Samaritan” provision of the Second Restatement of Torts, which states:
One who undertakes, gratuitously or for consideration, tо render services to another which he should recognize as necessary for the protection of the other‘s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking if ... the harm is suffered because of the other‘s reliance upon the undertaking.
Restatement (Second) of Torts § 323 (1993); see Sherer v. James, 290 S.C. 404, 351 S.E.2d 148, 150 n. 3 (1986). Appellees contend that the Government undertook to render services to them by enacting a regulation requiring presentation of certificates of title; that Customs agents failed to enforce that regulation with reasonable care; and that Appellees were harmed due to their reliance upon Customs agents to use such care.
We find Appellees’ argument unpersuasive. First, the Customs regulations do not represent an effort specifically to “render services” to Appellees; instead, the regula
B. BREACH OF A FEDERAL DUTY THAT IS ANALOGOUS TO A DUTY RECOGNIZED BY STATE LAW
Regardless of whether South Carolina law would impose tort liability for violation of
The Government contended that “there is no authority holding a private party liable under South Carolina law for anything remotely resembling the alleged conduct at issue: permitting exportation on the basis of improper documents.” Appellant‘s Brief at 12. Conceding that perhaps such a close analogy need not be found, the Government further argued that “there is no duty under South Carolina [law] to protect persons from the criminal actions of third parties, such as absconding with stolen goods.” Appellant‘s Brief at 12.
Neither the district court nor Appellees attempted to identify appropriate analogies. Having reviewed the matter, we conclude that South Carolina law would not impose liability for breach of a duty that is sufficiently analogous to the duty purportedly imposed on Customs officials by
We therefore hold that the district court erred when it denied the Government‘s motion for summary judgment on the issue of negligence, and vacate the judgment entered against the Government accordingly.
III.
Appellees believe that the district court erred when it granted the Government‘s motion for summary judgment on Appellees’ conversion claim. Rather than argue on appeal that the Government committed the tort of conversion, however, Appellees contend that Preowned is the party that committed the acts constituting conversion, but that the Government should be held liable in tort for aiding and abetting that conversion.7
In support of their contention that a party may be held liable for aiding and abetting a conversion, Apрellees cite cases from the Second Circuit, Maine, Nebraska, and Washington. See Aeroglide Corp. v. Zeh, 301 F.2d 420, 422 (2d Cir.) (applying New York law),
The FTCA requires Appellees to show that “the United States, if a private person, would be liable to [Appellees] in accordance with the law of the place where the act or omission occurred.” See
IV.
For the foregoing reasons, we hold that the district court erred when it denied the United States‘s motion for summary judgment on the issue of negligence, but did not err when it granted the Government‘s motion for summary judgment on Appellees’ conversion claim. The decision of the district court is accordingly
REVERSED IN PART AND AFFIRMED IN PART.