Foster v. United States ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THOMAS FOSTER,  No. 06-56843
Plaintiff-Appellant,
v.  D.C. No.
CV-05-02124-DMS
UNITED STATES OF AMERICA,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the Southern District of California
Dana M. Sabraw, District Judge, Presiding
Argued and Submitted
March 6, 2008—Pasadena, California
Filed April 16, 2008
Before: John R. Gibson,* Diarmuid F. O’Scannlain, and
Susan P. Graber, Circuit Judges.
Opinion by Judge Graber
*The Honorable John R. Gibson, Senior United States Circuit Judge for
the Eighth Circuit, sitting by designation.
4041
FOSTER v. UNITED STATES 4043
COUNSEL
Richard M. Barnett, San Diego, California, for the plaintiff-
appellant.
David B. Wallace, Assistant United States Attorney, San
Diego, California, for the defendant-appellee.
4044 FOSTER v. UNITED STATES
OPINION
GRABER, Circuit Judge:
Plaintiff Thomas Foster sued the United States under the
Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 1346(b),
alleging that agents of the Bureau of Alcohol, Tobacco, and
Firearms (“ATF”) damaged hundreds of his handguns and
long guns, as well as ammunition and packaging, which the
ATF agents had seized. The district court dismissed the action
for lack of subject matter jurisdiction. Specifically, the court
ruled that the government had seized the property for the pur-
pose of criminal investigation, not forfeiture, so the “detention
of goods” exception to the FTCA, 28 U.S.C. § 2680(c),
applied. We affirm.
FACTUAL AND PROCEDURAL HISTORY
Because the district court dismissed the action for lack of
subject matter jurisdiction, we take the facts from Plaintiff’s
Second Amended Complaint. GATX/Airlog Co. v. United
States, 286 F.3d 1168, 1173 (9th Cir. 2002). On July 28 and
July 31, 2000, ATF agents who were executing search war-
rants seized a large number of firearms—more than 800 in all
—and ammunition from storage spaces rented by Plaintiff.
The search warrants authorized federal officers to seize the
property as “contraband, evidence of the crime, fruits of the
crime, [and/or] instruments of the crime” of trafficking in ille-
gal firearms. When the warrants were executed, Plaintiff was
in custody pursuant to federal firearms charges in a separate
criminal matter. He was later acquitted.1
On April 10, 2001, the ATF sent Plaintiff a letter stating
that the property seized on July 31, 2000, was seized by the
1
Plaintiff’s son, Cornelio Thomas Foster-Torres, was the subject of the
criminal investigation that led to the issuance and execution of the search
warrants. The parties do not suggest that this fact alters the analysis.
FOSTER v. UNITED STATES 4045
ATF for forfeiture. In addition, the letter stated that the prop-
erty was subject to forfeiture under chapter 44 of Title 18 of
the U.S. Code, the federal criminal firearms provision, and
that administrative forfeiture proceedings had commenced.
On September 1, 2001, the United States initiated a civil
forfeiture action against some of the seized property. Plaintiff
opposed that forfeiture action and, eventually, reached an
agreement with the United States for a stipulated judgment,
whereby Plaintiff would pay storage charges for the property
and the United States would return all but 50 of the firearms.
Plaintiff “specifically retained[ed] the right to bring an action
against the United States for post-seizure, pre-return damage
to the firearms returned under [the] Stipulated Judgment of
Forfeiture.”
Thereafter, Plaintiff submitted a claim to the ATF for
$189,881. After the ATF denied his claim, Plaintiff filed this
action.
Plaintiff’s complaint alleges negligence by employees of
the United States, which caused damage to the “hundreds of
handguns, long guns, ammunition, smokeless powder, lead
bullets, and jacketed bullets” seized on July 28 and July 31,
2000. The allegations state that, “[d]uring the course of inven-
torying and of defendant’s custody of said property, . . . [the
United States] damaged the firearms, lost parts to firearms,
destroyed the packaging various firearms were contained in,
mixed ammunition, destroyed the packaging for collectors
ammunition, and destroyed other packaging.” Plaintiff claims
that this negligence resulted in property damage totaling
$189,881.
The United States moved to dismiss the action under Fed-
eral Rule of Civil Procedure 12(h)(3). The government argued
that the district court lacked subject matter jurisdiction
because the United States had not waived sovereign immunity
with respect to Plaintiff’s claim. After a hearing, the district
4046 FOSTER v. UNITED STATES
court granted the motion and entered a judgment dismissing
the action. Plaintiff now brings this timely appeal.
STANDARD OF REVIEW
We review de novo a district court’s dismissal of an action
for lack of subject matter jurisdiction, Campbell v. Redding
Med. Ctr., 421 F.3d 817, 820 (9th Cir. 2005), and likewise
review de novo a district court’s interpretation of federal for-
feiture law, United States v. Plunk, 511 F.3d 918, 921 (9th
Cir. 2007).
DISCUSSION
[1] The FTCA waives sovereign immunity for claims
against the federal government arising from torts committed
by federal employees. 28 U.S.C. § 1346(b)(1). Certain catego-
ries of claims are exempt from the waiver of sovereign immu-
nity, however, including “[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.” Id. § 2680(c). This exception, referred to as the “de-
tention of goods” exception, see, e.g., Cervantes v. United
States, 330 F.3d 1186, 1189 (9th Cir. 2003), generally is inter-
preted broadly. For example, in Kosak v. United States, 465
U.S. 848, 854 (1984), the Supreme Court held that the deten-
tion of goods exception applies not only to intentional con-
duct by government employees, but also to “any claim
‘arising out of’ the detention of goods, . . . includ[ing] a claim
resulting from negligent handling or storage of detained prop-
erty.” Similarly, the Supreme Court recently resolved a circuit
split in favor of a more expansive construction of the FTCA
when it rejected an argument that the detention of goods
exception is limited to law enforcement officers who are
involved in customs or excise activities. Ali v. Fed. Bureau of
Prisons, 128 S. Ct. 831, 841 (2008). The Court held that the
FTCA “maintain[s] sovereign immunity for the entire uni-
verse of claims against law enforcement officers . . . ‘arising
FOSTER v. UNITED STATES 4047
in respect of’ the ‘detention’ of property.” Id. (emphasis
added); accord Bramwell v. U.S. Bureau of Prisons, 348 F.3d
804, 808 (9th Cir. 2003) (same). These broad interpretations
of the detention of goods exception to the FTCA comport
with the well-established principle that waivers of sovereign
immunity must be construed strictly in favor of the sovereign.
Lane v. Pena, 518 U.S. 187, 192 (1996); United States v. 87
Skyline Terrace, 26 F.3d 923, 929 (9th Cir. 1994).
[2] Through the Civil Asset Forfeiture Reform Act of 2000
(“CAFRA”), Pub. L. No. 106-185, § 3, 114 Stat. 202, 211,
Congress added paragraphs (1) - (4) to 28 U.S.C. § 2680(c).
Those new paragraphs provide that the waiver of sovereign
immunity in 28 U.S.C. § 1346(b) applies to damage to prop-
erty while in the possession of certain government employees,
including law enforcement officers, if:
(1) the property was seized for the purpose of for-
feiture under any provision of Federal law providing
for the forfeiture of property other than as a sentence
imposed upon conviction of a criminal offense;
(2) the interest of the claimant was not forfeited;
(3) the interest of the claimant was not remitted or
mitigated (if the property was subject to forfeiture);
and
(4) the claimant was not convicted of a crime for
which the interest of the claimant in the property was
subject to forfeiture under a Federal criminal forfei-
ture law.
28 U.S.C. § 2680(c) (emphasis added). In short, CAFRA can-
celed the detention of goods exception and restored the
waiver of sovereign immunity—or “re-waived” sovereign
immunity—with respect to certain forfeiture-related seizures.
4048 FOSTER v. UNITED STATES
In this case, we are called on to determine whether sover-
eign immunity bars Plaintiff’s claim. The government asserts
that the FTCA’s detention of goods exception applies to bar
the claim. By contrast, Plaintiff maintains that the re-waiver
of sovereign immunity applies because “the property was
seized for the purpose of forfeiture,” id. § 2680(c)(1), and,
therefore, he may pursue this action.
Plaintiff makes two alternative arguments. He first con-
tends, relying on the ATF’s letter of April 10, 2001, that the
government all along had a dual purpose for executing the
search warrants: seizure of evidence of a crime and seizure of
property for forfeiture. In Plaintiff’s view, because one pur-
pose for the seizure was forfeiture, the re-waiver of sovereign
immunity in § 2680(c)(1)-(4) applies. In the alternative, he
argues that the re-waiver of sovereign immunity in
§ 2680(c)(1)-(4) was triggered the moment the government
decided to pursue forfeiture. In this argument, Plaintiff con-
tends that, even if forfeiture was not a reason for the initial
seizure, the property was seized for the purpose of forfeiture
at that later point so, again, § 2680(c)(1)-(4) applies.
The United States counters that the ATF agents had only
law enforcement in mind as the purpose for the initial seizure.
The government points to the warrants, which identified the
property as potential evidence of a crime and which were con-
temporaneous with the seizures. The government argues that
the statutory re-waiver applies only to property seized initially
for the purpose of forfeiture, making irrelevant the later initia-
tion of a forfeiture proceeding. The United States also asserts
that even a dual purpose would not help Plaintiff, because the
statutory re-waiver applies only to property seized solely for
the purpose of forfeiture.
We agree with the government’s second argument. We
hold that, under CAFRA, the re-waiver of sovereign immu-
nity in § 2680(c)(1)-(4) applies only to property seized solely
for the purpose of forfeiture. Consequently, the fact that the
FOSTER v. UNITED STATES 4049
government may have had the possibility of a forfeiture in
mind when it seized Plaintiff’s property does not detract from
the application of the detention of goods exception when
criminal investigation was a legitimate purpose of the initial
seizure.2
We note, at the outset, that the initial seizure and at least
some of the alleged damage occurred before CAFRA’s effec-
tive date of August 23, 2000, Pub. L. No. 106-185, § 21, 114
Stat. at 225 (codified at 8 U.S.C. § 1324 (note)), while all
other relevant events occurred after the effective date. Conse-
quently, it is not entirely clear whether CAFRA’s amend-
ments to 28 U.S.C. § 2680(c)(1)-(4)—the re-waiver of
sovereign immunity—even apply at all. See United States v.
$80,180.00 in U.S. Currency, 303 F.3d 1182, 1185 (9th Cir.
2002) (rejecting retroactive application of CAFRA and hold-
ing that CAFRA’s heightened burden of proof applies only to
a judicial forfeiture proceeding in which a complaint is filed
on or after the statute’s effective date). We need not resolve
that uncertainly here. Whether we apply pre-CAFRA or post-
CAFRA law, the district court lacked jurisdiction over Plain-
tiff’s claim.
In the absence of CAFRA’s re-waiver of sovereign immu-
nity, Plaintiff’s claim falls within the detention of goods
exception under the Supreme Court’s holding in Kosak.
Kosak involved damage to an art collection that the United
States Customs Service had seized pursuant to a valid war-
rant. 465 U.S. at 849. Kosak, the owner of the art collection,
was tried for, but acquitted of, smuggling the art into the
United States. Id. After his acquittal, Kosak received notice
from the Customs Service that the art was subject to civil for-
feiture. Id. at 849-50. Kosak successfully challenged the for-
2
We need not and do not decide whether the CAFRA re-waiver would
apply when the criminal investigative purpose of a seizure is pretextual.
Here, even if the government had forfeiture in mind, there is no suggestion
that the criminal investigative purpose of the seizure was not genuine.
4050 FOSTER v. UNITED STATES
feiture, and the property was returned to him. Id. at 850.
When the property came back in damaged condition, Kosak
brought an FTCA claim against the government, alleging that
the property was damaged while in custody of the Customs
Service. Id.
The Supreme Court held that 28 U.S.C. § 2680(c) barred
Kosak’s claim. Id. at 851. Analyzing the text of the statute,
the Court explained that the provision “ ‘any claim arising in
respect of’ the detention of goods means any claim ‘arising
out of’ the detention of goods, and includes a claim resulting
from negligent handling or storage of detained property.” Id.
at 854.
The Supreme Court also explained that barring Kosak’s
claim was consistent with Congress’ objectives in creating
exceptions to the FTCA, namely:
[E]nsuring that “certain governmental activities” not
be disrupted by the threat of damage suits; avoiding
exposure of the United States to liability for exces-
sive or fraudulent claims; and not extending the cov-
erage of the [FTCA] to suits for which adequate
remedies were already available.
Id. at 858. The Court noted that exposing the Customs Service
to claims such as the one brought by Kosak could dampen
enforcement efforts, because the power to detain goods was
one of the most important sanctions available to ensure com-
pliance with customs laws. Id. at 859. Also, the limited
resources of the Customs Service to inspect goods upon sei-
zure meant that the Customs Service would not be in a posi-
tion to protect itself from false and fraudulent claims. Id.
Finally, characterizing the third rationale for barring Kosak’s
claim as relevant “to a lesser extent” than the others, the Court
pointed out that a plaintiff such as Kosak had other avenues
for redress and could bring a common law negligence action
against an individual customs official, even though such a
FOSTER v. UNITED STATES 4051
claim would be difficult to establish. Id. at 860-61. Thus, the
Court concluded, sovereign immunity barred Kosak’s claim
for the damage to his property. Id. at 862.
[3] Factually, Kosak is nearly indistinguishable from this
action. Plaintiff’s property was seized pursuant to valid war-
rants; he was not convicted of any relevant crimes; the gov-
ernment sought, but did not obtain, civil forfeiture; and
Plaintiff filed an action for negligence “arising from” the
detention of the property. Consequently, in the absence of any
other law, under Kosak, the detention of goods exception to
the FTCA’s waiver of sovereign immunity bars Plaintiff’s
claim.
Plaintiff contends nevertheless that Cervantes, 330 F.3d at
1189, establishes grounds for the government’s liability for
the damage to his property. In Cervantes, which applied pre-
CAFRA law but post-dated Kosak, we concluded that the
detention of goods exception is not indelible and held that “an
independent and intervening event from the detention itself”
can result in a waiver of sovereign immunity. Id. No “inde-
pendent and intervening event” occurred here.
Cervantes involved a vehicle that the United States Mar-
shals Service sold to Cervantes without inspection. Id. at
1187-88. Unbeknownst to Cervantes and the Marshals Ser-
vice, the vehicle had 119 pounds of marijuana secreted in its
bumper. Id. Cervantes, who was arrested for possession of
the marijuana while trying to bring the vehicle home, filed
suit against the government under the FTCA, alleging negli-
gence and asserting claims of false arrest and false imprison-
ment. Id. at 1188.
We rejected the government’s contention that Kosak barred
Cervantes’ claim under the detention of goods exception to
the FTCA. We explained that, although the government origi-
nally obtained the car “from [a] detention” before it was sold
by the Marshals Service, Cervantes’ claim did not “arise in
4052 FOSTER v. UNITED STATES
respect of . . . the detention.” Id. at 1189 (internal quotation
marks and alteration omitted). “The negligent act was the
government’s decision to sell the car without first inspecting
it, an independent and intervening event from the detention
itself.” Id. In addition, we reasoned, none of the three policy
rationales identified in Kosak was implicated by permitting
the claim to go forward: There was “no analogous dampening
effect of Cervantes’ suit on the Customs Service’s ability to
protect our borders”; any excessive or fraudulent claims
would arise “because the government decided to auction off
cars, not because it detained or inspected goods”; and “Cer-
vantes is entitled to recover, if at all, only under the FTCA.”
Id. at 1190.
Cervantes is distinguishable from the present case. Here,
the property belonged to Plaintiff when it was seized, and it
was a subject of criminal investigation. In addition, Plaintiff
alleges that the damage occurred during the government’s
inventory and custody of the property, which resulted directly
from the initial seizure pursuant to valid warrants and not
from an unrelated event such as the auction in Cervantes.
Thus, we find no “independent and intervening event” like the
one at issue in Cervantes.
[4] In sum, under pre-CAFRA law, the government did not
waive sovereign immunity with respect to Plaintiff’s claim.
We turn, then, to CAFRA, which post-dates Kosak, in order
to determine whether it provides Plaintiff with an avenue for
relief.
Although we must start our analysis with the text of the
statute, United States v. $493,850.00 in U.S. Currency, No.
06-15225, 2008 WL 659574, *5-*7 (9th Cir. Mar. 13, 2008),
the text provides only the slimmest insight into the scope of
CAFRA’s re-waiver of sovereign immunity. The first require-
ment for the re-waiver to apply is that “the property was
seized for the purpose of forfeiture.” 28 U.S.C. § 2680(c)(1).
At the risk of parsing the text too closely, the statute’s use of
FOSTER v. UNITED STATES 4053
the definite phrase “the purpose of forfeiture,” as opposed to
an indefinite phrase “a purpose of forfeiture,” suggests that
the property be seized only for the purpose of forfeiture. Had
Congress drafted the text to provide for re-waiver “if the
property was seized and forfeited,” then it would apply when
both purposes underlie a single seizure. Congress, however,
did not do so. Accord Dahler v. United States, 473 F.3d 769,
772 (7th Cir. 2007) (per curiam) (citing the text of CAFRA
and its amendments to § 2680(c) and commenting that “Con-
gress intended the amendment to apply only to forfeitures—
not every detention—of property”), abrogated on other
grounds by Ali, 128 S. Ct. at 835 n.1.
The legislative history of CAFRA, to which we turn next,
$493,850.00, 2008 WL 659574, at *7, provides no greater
insight into congressional intent. In support of his argument,
Plaintiff cites a Report of the House of Representatives con-
cerning the bill. The Report states: “The bill amends the Fed-
eral Tort Claims Act to allow for tort claims against the
United States government based on the destruction, injury, or
loss of goods, merchandise, or other property while in the
possession of any law enforcement officer if the property had
been seized for the purpose of forfeiture.” H.R. Rep. No. 192,
106th Cong., p. 18 (1999) (emphasis added). Rather than sup-
porting Plaintiff’s expansive reading of the statute, the
emphasized text is materially identical to 28 U.S.C.
§ 2680(c)(1). In addition, although the Report introduces the
discussion of the re-waiver of sovereign immunity by reiterat-
ing the detention of goods exception—i.e., that the govern-
ment “is exempted from liability . . . for damage to property
while detained by law enforcement officers,” id.—the Report
does not identify the scope of the re-waiver’s application
beyond the text emphasized above and a few examples of how
“[s]eized property awaiting forfeiture can be quickly dam-
aged,” id. Thus, the Report neither detracts from nor alters our
textual analysis.
4054 FOSTER v. UNITED STATES
[5] While the text and legislative history yield only mar-
ginal guidance, two of the three rationales identified by the
Supreme Court in Kosak as underlying the exceptions to the
waivers of sovereign immunity3 provide robust support for
limiting the application of the re-waiver in § 2680(c)(1)-(4).
Cf. Dolan v. U.S. Postal Serv., 546 U.S. 481, 492 (2006)
(instructing courts “to identify those circumstances which are
within the words and the reason” of an FTCA exception when
determining the scope of its application (internal quotation
marks omitted)). First, law enforcement officers who seize
property for law enforcement purposes often are operating in
hostile or dangerous environments, whether or not they antici-
pate that, eventually, a forfeiture may result from their efforts.
The case at hand is a perfect example: According to the appli-
cations and affidavits for the warrants, the ATF agents were
investigating international firearms trafficking that involved
the murder of Mexican soldiers and the execution of 18 civil-
ians. Any waiver of sovereign immunity for damage to the
property could hamper law enforcement officers’ effective-
ness in carrying out the important purposes underlying the
seizure and redirect their attention from the possibility of dan-
ger in executing the search warrant to the possibility of civil
damages.
[6] Second, as was true in Kosak, the scarcity of resources
to inspect and protect the property means that law enforce-
ment officers might be subject to false and fraudulent claims.
Again, this case provides an example. Plaintiff alleges that the
United States “destroyed the packaging for collectors[’]
ammunition.” Law enforcement officers who are executing a
3
Although Kosak pre-dates CAFRA, the Supreme Court relied on Kosak
as recently as 2006. See Dolan v. U.S. Postal Serv., 546 U.S. 481, 487
(2006) (identifying Kosak as having “decisive weight” in supporting its
conclusion). Consequently, Kosak remains good law. Accord Ali v. Fed.
Bureau of Prisons, 128 S. Ct. 831, 834-35 (2008) (citing the Eleventh Cir-
cuit’s reliance on the holding in Kosak and rejecting the petitioner’s con-
tention that Kosak addressed the question raised in Ali, but without
revisiting the Kosak holding).
FOSTER v. UNITED STATES 4055
search warrant do not necessarily have the particularized
knowledge that is required to protect from damage the “pack-
aging for collectors[’] ammunition.” With limited resources,
law enforcement agencies cannot be expected to employ an
expert, such as a firearms historian, to catalogue and inspect
property seized in connection with the execution of a search
warrant. Accordingly, application of CAFRA’s re-waiver of
sovereign immunity would leave the government open to the
false and fraudulent claims that Kosak described as one of the
main reasons for the statutory exceptions to the FTCA’s
waiver of sovereign immunity.
The third Kosak rationale—the availability of another
remedy—supports Plaintiff’s argument for the broader appli-
cation of CAFRA’s re-waiver of sovereign immunity. But the
Supreme Court characterized that rationale as applying “to a
lesser extent.” Kosak, 465 U.S. at 860. Thus, without more,
it is not a sufficient ground to rule in Plaintiff’s favor.
In addition, Plaintiff’s interpretation of CAFRA would
eviscerate the detention of goods exception. When the gov-
ernment seizes property for law enforcement purposes, in
practice, forfeiture often follows eventually. Thus, in every
criminal seizure the government necessarily must anticipate at
least the possibility of a future forfeiture, a dual motivation
that would be nearly impossible to disprove in any particular
case. That pervasive dual motivation cannot defeat sovereign
immunity under the FTCA; the Supreme Court has instructed
that the FTCA “maintain[s] sovereign immunity for the entire
universe of claims against law enforcement officers . . . ‘aris-
ing in respect of’ the ‘detention’ of property.” Ali, 128 S. Ct.
at 841.
[7] In short, the text of § 2680(c)(1)-(4), uncontradicted by
its legislative history, provides some support for a narrow
reading of the re-waiver of sovereign immunity in forfeiture
actions. That narrow reading is consistent with the policy
rationales identified by the Supreme Court as underlying the
4056 FOSTER v. UNITED STATES
detention of goods exception to the FTCA’s waiver of sover-
eign immunity. We are mindful of the Supreme Court’s
instruction to use caution when interpreting the scope of an
exception to the FTCA’s waiver of sovereign immunity.
Dolan, 546 U.S. at 492. Here, though, we must do just the
opposite: We interpret not an exception to the FTCA’s waiver
of sovereign immunity, but instead interpret an exception to
the exception. That is, our task is to interpret a waiver of sov-
ereign immunity. As a result, we ultimately must apply the
general rule that waivers of sovereign immunity are construed
in favor of the sovereign and must interpret any remaining
ambiguity in the scope of CAFRA’s re-waiver of sovereign
immunity in favor of the United States. Consequently, we
hold that the re-waiver of sovereign immunity in 28 U.S.C.
§ 2680(c)(1)-(4) applies only to property seized solely for the
purpose of forfeiture, even if the government had in mind, and
later pursued, judicial forfeiture of property seized initially for
a legitimate criminal investigative purpose. The district court
correctly concluded that it lacked jurisdiction over Plaintiff’s
claim.
AFFIRMED.