Jeffrey Gordon v. United States ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 26 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JEFFREY J. GORDON and VICKI No. 16-35867
GORDON,
D.C. No. 4:15-cv-05073-SAB
Plaintiffs-Appellants,
v. MEMORANDUM*
UNITED STATES OF AMERICA,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Stanley Allen Bastian, District Judge, Presiding
Argued and Submitted June 13, 2018
Seattle, Washington
Before: GOULD and WATFORD, Circuit Judges, and ROTHSTEIN,** District
Judge.
Jeffrey and Vicki Gordon appeal the district court’s dismissal of their
malicious prosecution claim, which they brought under the Federal Tort Claims
Act (“FTCA”), 28 U.S.C. §§ 1346(b), 2680(h). We have jurisdiction under 28
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Barbara Jacobs Rothstein, United States District Judge
for the Western District of Washington, sitting by designation.
U.S.C. § 1291, and we affirm.1
Approximately five years before bringing the instant claim, Jeffrey Gordon,
along with others in Washington’s potato farming industry, was indicted on one
count of Conspiracy to Make False Statements and Commit Fraud and one count of
Making a False Application, in connection with his submissions to insurance
companies that were reinsured by the federal crop insurance program, which is
operated by the United States Department of Agriculture (“USDA”). The case
proceeded to a jury trial, and both charges against Gordon were ultimately
dismissed by the trial court. In the instant action, the Gordons allege that the
United States, acting through Steve Tillotson, a Special Agent within the USDA’s
Office of the Inspector General (“OIG”), provided incomplete, false, and
misleading testimony to the grand jury that indicted Gordon.
The district court properly found that it lacked subject matter jurisdiction to
consider the Gordons’ FTCA claim. The FTCA serves as a partial abrogation of
the United States’s immunity from suit, conferring jurisdiction upon district courts
to hear allegations of tortious conduct by Government employees and agencies in
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.” 28 U.S.C. § 1346(b)(1); see Millbrook v. United States, 569 U.S. 50, 52
1
The Gordons’ Motion to Take Judicial Notice is hereby granted.
(2013). An FTCA plaintiff bears the initial burden of demonstrating that its claims
fall within § 1346(b)(1)’s general waiver of immunity. Faber v. United States, 56
F.3d 1122, 1124 (9th Cir. 1995). Even where a plaintiff meets this burden, its
claims may nevertheless be barred by one of the Act’s many exceptions. 28 U.S.C.
§ 2680(a). The United States bears the burden of proving the applicability of any
FTCA exception. Prescott v. United States, 973 F.2d 696, 701-02 (9th Cir. 1992).
Where any of § 1346(b)(1)’s elements have not been met—and/or where an
exception applies—the Government has not waived its immunity, and the court
lacks subject matter jurisdiction and must dismiss the case. Sabow v. United States,
93 F.3d 1445, 1451 (9th Cir. 1996), as amended (Sept. 26, 1996).
Here, the Gordons failed to sufficiently allege a claim of malicious
prosecution. See Gem Trading Co. v. Cudahy Corp., 603 P.2d 828, 832 (Wash.
1979).2 The Gordons failed to point to any of Tillotson’s testimony, let alone the
portions of his testimony that they consider false or misleading. Additionally, it is
the role of the prosecutor—and not the witness—to elicit testimony and otherwise
2
To maintain an action for malicious prosecution in Washington, “the plaintiff
must allege and prove (1) that the prosecution claimed to have been malicious was
instituted or continued by the defendant; (2) that there was want of probable cause
for the institution or continuation of the prosecution; (3) that the proceedings were
instituted or continued through malice; (4) that the proceedings terminated on the
merits in favor of the plaintiff, or were abandoned; and (5) that the plaintiff
suffered injury or damage as a result of the prosecution.” Gem Trading Co., 603
P.2d at 832 (quoting Peasley v. Puget Sound Tug & Barge Co., 125 P.2d 681, 687
(Wash. 1942)).
present evidence to the grand jury. Cf. Moore v. Valder, 65 F.3d 189, 196-97
(D.C. Cir. 1995); Gray v. Bell, 712 F.2d 490, 516 (D.C. Cir. 1983). Thus, the
Gordons failed to meet their burden of establishing that their claim falls within §
1346(b)(1)’s general waiver of immunity, and the district court lacked subject
matter jurisdiction to consider their claim. See Faber, 56 F.3d at 1124.
Additionally, Tillotson’s conduct in investigating Gordon’s alleged
fraudulent activity is protected by the FTCA’s discretionary function exception.
The discretionary function exception prohibits claims “based upon the exercise or
performance or the failure to exercise or perform a discretionary function or duty
on the part of a federal agency or an employee of the Government, whether or not
the discretion involved be abused,” 28 U.S.C. § 2680(a), and applies where the
complained of conduct involves an element of judgment or choice and is grounded
in public policy. Terbush v. United States, 516 F.3d 1125, 1129 (9th Cir. 2008)
(citing United States v. Gaubert, 499 U.S. 315, 322 (1991)); Berkovitz v. United
States, 486 U.S. 531, 536 (1988). Tillotson’s actions during his investigation were
done pursuant to the broad discretion afforded to OIG agents by the Inspector
General Act, 5 U.S.C. app. 3 § 6, the Agriculture and Food Act, 5 U.S.C. app. 4 §
4(d), and OIG’s implementing regulations, 7 C.F.R. pt. 1a. Accordingly, the
district court properly determined that the Gordons’ claim is barred by the
discretionary function exception. See, e.g., Berkovitz, 486 U.S. at 536; Gaubert,
499 U.S. at 324; Gonzalez v. United States, 814 F.3d 1022 (9th Cir. 2016); Sabow,
93 F.3d at 1451; Vickers v. United States, 228 F.3d 944, 951 (9th Cir. 2000).
The district court properly considered evidence outside the pleadings in
ruling on the Government’s Rule 12(b)(1) motion to dismiss. See McCarthy v.
United States, 850 F.2d 558, 560 (9th Cir. 1988) (“[W]hen considering a motion to
dismiss pursuant to Rule 12(b)(1) the district court is not restricted to the face of
the pleadings, but may review any evidence, such as affidavits and testimony, to
resolve factual disputes concerning the existence of jurisdiction.”); see also Land v.
Dollar, 330 U.S. 731, 735 n.4 (1947) (“[W]hen a question of the District Court’s
jurisdiction is raised … the court may inquire by affidavits or otherwise, into the
facts as they exist.”); cf. Robinson v. United States, 586 F.3d 683, 685 (9th Cir.
2009). Specifically, the district court properly considered Tillotson’s declaration
and grand jury testimony—as well as the declaration submitted by the Gordons—
and did not err in declining to convert the Rule 12(b)(1) motion to dismiss into a
Rule 56 motion for summary judgment. See, e.g., Green v. United States, 630 F.3d
1245,1248 n.3 (9th Cir. 2011); Robinson, 586 F.3d at 685; Kingman Reef Atoll
Investments, L.L.C. v. United States, 541 F.3d 1189, 1193 (9th Cir. 2008);
Augustine v. United States, 704 F.2d 1074 (9th Cir. 1983).
AFFIRMED.