Mid-South Holding Co. v. Weise

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
_______________________ ELEVENTH CIRCUIT
09/01/00
No. 99-2488 THOMAS K. KAHN
_______________________ CLERK
D. C. Docket No. 97-00877-CIV-J-10A
MID-SOUTH HOLDING COMPANY, INC.,
Plaintiff-Appellant,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(September 1, 2000)
Before BLACK, CARNES and KRAVITCH, Circuit Judges.
KRAVITCH, Circuit Judge:
In this appeal we decide whether the “discretionary function” exception to
the waiver of the United States’ sovereign immunity found in the Suits in
Admiralty Act precludes a claim arising out of the allegedly negligent performance
of a search of a vessel by the United States Customs Service and Coast Guard. We
hold that it does.
I. BACKGROUND AND PROCEDURAL HISTORY
On or about May 16, 1996, agents of the United States Customs Service and
Coast Guard (collectively, the “Customs Service”1) boarded the “Abner’s Choice”
(the “vessel”), a commercial fishing vessel operated by Plaintiff-Appellant Mid-
South Holding Company, Inc., (“Mid-South”) and docked at the Sister’s Creek
Marina in Jacksonville, Florida. Acting on reports that the vessel was involved in
narcotics trafficking, the agents searched the vessel for contraband, but discovered
none. The search of the vessel lasted approximately thirty minutes.
On the day following the search, the vessel’s lower hold and engine room
1
Coast Guard officers are “deemed to be acting as agents of the particular executive
department . . . charged with the administration of the particular law.” See 14 U.S.C. § 89(b)(1)
(2000). Because the Coast Guard was acting at the direction of the Customs Service in its
enforcement of, presumably, the Controlled Substances Import and Export Act, 21 U.S.C.
§§ 951-71, we refer to the agencies jointly.
2
flooded, causing it to sink. Mid-South attributes this incident to the disconnection
sometime during the search of an electrical cord that powered the vessel’s bilge
pump. Although Charles Abner, the founder and a corporate officer of Mid-South,
was able to refloat the vessel, an electrical outage two weeks later disabled the
vessel’s bilge pump, again causing the vessel to flood and sink. Abner was unable
to refloat the vessel a second time, presumably because of structural damages
resulting from the first sinking.
After pursuing an unsuccessful administrative claim with the Customs
Service to recover the value of the lost vessel, Mid-South filed a complaint against
the United States in the United States District Court for the Middle District of
Florida. Originally, Mid-South brought its cause of action under the Federal Tort
Claims Act (the “FTCA”), 28 U.S.C. §§ 1346(b), 2671-80, but subsequently
amended its complaint by substituting the Suits in Admiralty Act (the “SAA”), 46
U.S.C. §§ 741-52, as the proper basis for the suit. The United States moved for
dismissal or, alternatively, summary judgment on two grounds: (1) the district
court lacked subject matter jurisdiction over the SAA claim because the United
States enjoys sovereign immunity from claims arising from the detention of goods
by agents of the Customs Service; and (2) Mid-South did not have standing to
bring the suit because it did not own the vessel at the time it was destroyed and
3
therefore was not a “real party in interest.”2 The district court agreed with the
former assertion and granted the United States’ motion. This appeal followed.
II. ANALYSIS
It is a well-settled axiom that “[t]he United States, as sovereign, is immune
from suit save as it consents to be sued.” United States v. Sherwood, 312 U.S. 584,
586, 61 S. Ct. 767, 769 (1941). Supreme Court precedent has expounded that this
waiver of immunity “must be unequivocally expressed in statutory text.” Lane v.
Pena, 518 U.S. 187, 192, 116 S. Ct. 2092, 2096 (1996). The SAA, which provides
the sole jurisdictional basis for admiralty claims against the United States, includes
such an explicit waiver: “In cases where . . . if a private person or property were
involved, a proceeding in admiralty could be maintained, any appropriate nonjury
proceeding in personam may be brought against the United States . . . .” 46 U.S.C.
§ 742 (2000); see also Drake Towing Co. v. Meisner Marine Constr. Co., 765 F.2d
1060, 1063-64 (11th Cir. 1985). Although the text of the SAA does not impose
2
Abner purchased the vessel in his name in 1992. After a failed attempt to transfer title to
the vessel to his wife and brother, Abner executed a bill of sale assigning ownership of the vessel
to Mid-South. Abner, however, never filed the bill of sale. The United States contends that
Abner did not adhere to the requirements for transferring title to a vessel as outlined by Florida
law, see Fla. Stat. ch. 328.01(a), and that, consequently, Mid-South never obtained title to the
vessel. Because we affirm the district court’s determination that it lacked subject matter
jurisdiction over this claim, we need not reach the standing issue.
4
any limitations on this waiver of immunity, courts have recognized that exceptions
exist. For example, every circuit to consider the issue has concluded that the
SAA’s waiver of immunity is subject to the “discretionary function” exception
identified in the FTCA, 28 U.S.C. § 2680(a). See Tew v. United States, 86 F.3d
1003, 1005 (10th Cir. 1996) (listing cases from the First, Second, Third, Fourth,
Fifth, Sixth, Seventh, Ninth, Eleventh, and D.C. Circuits, and joining in their
shared holding). Where applicable, such an exception to this statutory waiver of
immunity abrogates federal subject matter jurisdiction over any pursuant claim.
See Cohen v. United States, 151 F.3d 1338, 1340 (11th Cir. 1998) (characterizing
sovereign immunity as an issue of subject matter jurisdiction).
Before the district court, the United States argued that another of the
FTCA’s exceptions to its waiver of immunity—the “law enforcement” exception,
28 U.S.C. § 2680(c)3—should be incorporated judicially into the SAA, and the
district court agreed. Prior to oral argument, however, this court raised the
possibility that the discretionary function exception, as defined in the FTCA, also
might confer immunity on the United States and accordingly ordered supplemental
3
The law enforcement exception precludes “[a]ny claim arising in respect of . . . the
detention of any goods or merchandise by any officer of the customs or excise or any other law-
enforcement officer.” 28 U.S.C. § 2680(c) (2000). The Supreme Court has interpreted this
exception broadly to include “any claim ‘arising out of’ the detention of goods . . . includ[ing] a
claim resulting from the negligent handling or storage of detained property.” Kosak v. United
States, 465 U.S. 848, 854, 104 S. Ct. 1519, 1523-24 (1984).
5
briefing.4 As alluded to above, this circuit is among the majority holding that the
SAA’s waiver of immunity is subject to the discretionary function exception. See
Williams v. United States, 747 F.2d 700, 700 (11th Cir. 1984), aff’g and adopting
Williams By and Through Sharpley v. United States, 581 F. Supp. 847 (S.D. Ga.
1983). Although the United States did not initially elect to assert this exception as
a basis for immunity, judicial providence counsels us to consider its applicability to
the instant case before reaching the novel question of whether to incorporate the
FTCA’s law enforcement exception into the SAA. See Allen v. Ferguson, 791
F.2d 611, 615 (7th Cir. 1986) (“[I]n keeping with the notions of judicial restraint,
federal courts should not reach out to resolve complex and controversial questions
when a decision may be based on a narrower ground.”).5 We review issues
4
Our authority to order supplemental briefing on this issue on appeal derives from our
obligation to inquire sua sponte into issues of subject matter jurisdiction. See Rembert v. Apfel,
213 F.3d 1331, 1333 (11th Cir. 2000).
5
The issue whether to incorporate the law enforcement exception into the SAA would be
one of first impression in this circuit, and, in light of precedent, a complex one. In De
Bardeleben Marine Corp. v. United States, 451 F.2d 140, 142-43 (5th Cir. 1971), a binding
precedent, see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc)
(adopting all decisions of the former Fifth Circuit as binding precedent), the court rejected the
United States’ entreaty to incorporate into the SAA another of the FTCA’s exceptions for claims
arising out of misrepresentations made by the government, see 28 U.S.C. § 2680(h). In so doing,
the court intimated in dicta that none of the FTCA’s exceptions could be incorporated into the
SAA. See De Bardeleben Marine Corp., 451 F.2d at 145-46. Nonetheless, since that decision,
this circuit has joined the majority of others in incorporating the FTCA’s discretionary function
exception. See Williams, 747 F.2d at 700. The district court that authored the decision adopted
by this circuit in Williams carefully circumvented De Bardeleben Marine Corp. by predicating
its holding on the separation of powers doctrine, reasoning that “sound principles of judicial
restraint in the face of governmental administrative activity dictate that cases involving
6
concerning subject matter jurisdiction de novo. See Bishop v. Reno, 210 F.3d
1295, 1298 (11th Cir. 2000).
The FTCA’s discretionary function exception preserves the United States’
sovereign immunity against “[a]ny claim . . . 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 [United States], whether or
not the discretion involved be abused.” 28 U.S.C. § 2680(a) (2000). The Supreme
Court has articulated a two-part test for determining whether the conduct of a
government agency or employee falls within the scope of this exception. First, a
reviewing court must ascertain the nature of the challenged conduct and assess
whether it involved an element of judgment or choice. See United States v.
Gaubert, 499 U.S. 315, 322, 111 S. Ct. 1267, 1273 (1991). Second, the court
decides “‘whether that judgment is of the kind that the discretionary function
exception was designed to shield.’” Id. at 322-23, 111 S. Ct. at 1273 (quoting
Berkovitz v. United States, 486 U.S. 531, 536, 108 S. Ct. 1954, 1959 (1988)).
discretionary functions be removed from the jurisdiction of the courts.” Williams, 581 F. Supp.
at 852. Courts that have considered the propriety of incorporating the law enforcement
exception, however, have split. Compare B & F Trawlers, Inc. v. United States, 841 F.2d 626,
628-29 (5th Cir. 1988) (declining to incorporate the exception without mention of the De
Bardeleben Marine Corp. decision) with Green v. United States, 658 F. Supp. 749, 751 (S.D. Fla.
1987) (incorporating the exception, also without mention of the De Bardeleben Marine Corp.
decision).
7
The United States asserts, and we agree, that the threshold governmental
action at issue here is the Customs Service’s decision to board and search the
vessel. We must therefore examine the statutory and regulatory guidelines
governing these activities and determine whether they mandate a particular manner
in which to execute them. See Hughes v. United States, 110 F.3d 765, 768 (11th
Cir. 1997). According to 19 U.S.C. § 1581(a):
Any officer of the customs may at any time go on board of
any vessel or vehicle at any place in the United States or
within the customs waters . . . and examine the manifest
and other documents and papers and examine, inspect, and
search the vessel or vehicle and every part thereof and any
person, trunk, package, or cargo on board, and to this end
may hail and stop such vessel or vehicle, and use all
necessary force to compel compliance.
19 U.S.C. § 1581(a) (2000) (emphasis added); see also Boarding & Search of
Vessels, 19 C.F.R. § 162.3(a) (1999).6 This broad grant of authority, particularly
6
The Coast Guard’s law enforcement authority is analogous to that of the Customs
Service:
The Coast Guard may make inquires, examinations, inspections,
searches, seizures, and arrests upon the high seas and waters over
which the United States has jurisdiction, for the prevention, detection,
and suppression of violations of laws of the United States. For such
purposes, commissioned, warrant, and petty officers may at any time
go on board of any vessel subject to the jurisdiction, or to the
operation of any law, of the United States, address inquiries to those
on board, examine the ship’s documents and papers, and examine,
inspect, and search the vessel and use all necessary force to compel
compliance.
14 U.S.C. § 89(a) (2000).
8
as embodied in the emphasized language, leaves the Customs Service a great deal
of discretion, cabined of course by constitutional constraints, in deciding which
vessels to board and search, thus satisfying the first prong of the Gaubert analysis.
See Autery v. United States, 992 F.2d 1523, 1529 (11th Cir. 1993) (observing that
an unspecific statutory or regulatory guideline implies that discretion was
intended).
“Because the purpose of the [discretionary function] exception is to prevent
judicial ‘second guessing’ of legislative and administrative decisions grounded in
social, economic, and political policy through the medium of an action in tort,”
Gaubert, 499 U.S. at 323, 111 S. Ct. at 1273 (internal quotation omitted), we must
determine, in applying the second prong of the Gaubert analysis, whether the
challenged conduct of the government agency or employee is “susceptible to
policy analysis,” id. at 325, 111 S. Ct. at 1275. We agree with the United States
that the decision to board and search a vessel is the product of the balancing of
various compelling policy considerations. The Customs Service shoulders the
significant burden of cooperating in the enforcement of this country’s anti-
narcotics laws. See, e.g., National Drug Interdiction Improvement Act of 1986,
Pub. L. No. 99-570, tit. III, § 3002(5), 100 Stat. 3207, 3273-74 (1986)
(congressional findings recognizing the role of the Customs Service in narcotics
9
interdiction). This responsibility naturally influences the manner in which the
Customs Service conducts its law enforcement activities.
In a case involving the destruction of a vessel following its apprehension by
the Coast Guard on suspicion of narcotics transportation, the Fifth Circuit
observed:
To board, search, and seize any vessel suspected of
smuggling narcotics is a sovereign prerogative that has
taken on paramount significance in light of the epidemic
encroachment of illegal drugs into our country. Congress
has declared that “trafficking in controlled substances
aboard vessels is a serious international problem and is
universally condemned. Moreover, such trafficking
presents a specific threat to the security and societal well-
being of the United States.” 46 U.S.C. § 1902. . . . [W]e
seriously doubt that Congress intended to expose the
[United States] to liability . . . that would not only inhibit
Coast Guard enforcement efforts but would also effectively
reallocate scarce law enforcement resources from drug
interdiction . . . .
B & F Trawlers, Inc. v. United States, 841 F.2d 626, 631 (5th Cir. 1988). The
considerations cited by the Fifth Circuit apply with equal force here. The Customs
Service, faced with escalating enforcement duties and limited resources, must
decide how best to effectuate our nation’s anti-narcotics laws. In so doing, the
Customs Service necessarily exercises discretion in choosing whether to board and
search a vessel, weighing the costs of implementing such activities against the
likelihood of an enforcement success. Cf. Mesa v. United States, 123 F.3d 1435,
10
1438 (11th Cir. 1997) (discussing the law enforcement-related policy concerns
attending the execution of an arrest warrant); Ochran v. United States, 117 F.3d
495, 501 (same, in relation to the protection of federal witnesses). The
discretionary function exception was designed to prevent judicial “second
guessing” of exactly this type of policy-based decision.
Of course, the injury Mid-South alleges cannot be attributed directly to the
Custom Service’s decision to board and search its vessel. Rather, the act that
purportedly caused the injury would had to have occurred during the operational
execution of that decision. As the Supreme Court made clear in Gaubert, however,
“[d]iscretionary conduct is not confined to the policy or planning level. ‘[I]t is the
nature of the conduct, rather than the status of the actor, that governs whether the
discretionary function exception applies in a given case.’” 499 U.S. at 325, 111 S.
Ct. at 1275 (quoting United States v. S.A. Empresa de Viacao Aerea Rio
Grandense (Varig Airlines), 467 U.S. 797, 813, 104 S. Ct. 2755, 2764 (1984)).
Any act, therefore, regardless of the administrative level at which it is authorized
or taken, qualifies as “discretionary” provided it satisfies the Gaubert analysis. We
therefore agree with the United States that the on-site decisions of the agents of the
Customs Service concerning the manner in which to search the vessel also fall
within the scope of the discretionary function exception. See Varig Airlines, 467
11
U.S. at 819-20, 104 S. Ct. at 2767-68 (observing that discretionary actions in
furtherance of a policy decision are within the scope of the exception). Because no
statute or corresponding regulation prescribes the methodology for boarding or
searching a vessel,7 field agents are left to their discretion to devise the best course
for executing these functions. In so doing, the agents must balance their
overarching goal of locating contraband with such concerns as efficiency and the
minimization of intrusion on the privacy and property interests of searched parties.
Although the attendant details could be characterized as mundane or as disengaged
from any substantial policy consideration, they are nonetheless critical to the
performance of the discretionary scheme and, accordingly, are entitled to the
protection of the discretionary function exception. Cf. Mesa v. United States, 837
F. Supp. 1210, 1216 (S.D. Fla. 1993), aff’d, 123 F.3d 1435 (11th Cir. 1997)
(exhaustively cataloguing the policy-based details attending the execution of an
arrest warrant that the court concluded were within the scope of the discretionary
function exception). As the Fifth Circuit has cautioned:
7
Mid-South suggests the possible existence of such guidelines and requests that, should
we find the discretionary function exception applicable in principle, we remand the case to allow
Mid-South an opportunity to conduct sufficient discovery. We decline to do so. Even if, as
Mid-South conjectures, pertinent guidelines had required Customs Service agents to exercise due
care during their search, such a general proviso would be insufficient to divest the agents of their
discretion in devising the course by which to conduct the search. Cf. Irving v. United States, 162
F.3d 154, 163-64 (1st Cir. 1998) (en banc) (reviewing cases involving negligent inspection
claims and observing that only specific guidelines detailing how an agent is to perform his or her
inspection obviate that agent’s discretion)
12
[A]lmost any exercise of governmental discretion could be
overly parsed so as to focus on minute details of sub-
decisions to the point that any relationship to policy would
appear too attenuated. But doing that obscures the very
purpose of the discretionary function exception. . . . [S]uch
tunnel-visioned analyses would render the discretionary
function exception nugatory and open virtually every
decision that implements a governmental decision to
liability . . . .
Baldassaro v. United States, 64 F.3d 206, 211-12 (5th Cir. 1995).
Mid-South contends that although the discretionary function exception may
shield the United States from claims arising out of the decision to search or the
manner in which the search was conducted, it does not foreclose a claim premised
on the discrete act alleged here—the disconnection of the electrical cord powering
the vessel’s bilge pump. Essentially, Mid-South argues that the record does not
establish that the agents searching the vessel made an affirmative decision to
disconnect the electrical cord as part of their search, thereby dissociating the act
from the agents’ exercise of discretion in pursuit of the objectives of the search.
Mid-South misapprehends, however, the focus of the Gaubert analysis, which “is
not on the agent’s subjective intent in exercising the discretion conferred by statute
or regulation, but on the nature of the actions taken and on whether they are
susceptible to policy analysis.” Gaubert, 499 U.S. at 325, 111 S. Ct. at 1275(emphasis added). Our inquiry, therefore, is whether, objectively, disconnecting
13
the electrical cord was conceivably in furtherance of the search. Because, as the
United States hypothesizes, the disconnection of the cord may have been necessary
to gain access to areas of the vessel the agents desired to search or else to eliminate
a potential safety hazard to the agents, we find that it was. Accordingly, we
conclude that the allegedly negligent act, regardless of its impetus, qualifies as a
discretionary function within the scope of the exception.8
III. CONCLUSION
Because we hold that the discretionary function exception to the SAA’s
waiver of the United States’ sovereign immunity applies in this case, we AFFIRM
the district court’s ultimate conclusion that it lacked subject matter jurisdiction
over Mid-South’s claim. We therefore need not consider whether that waiver is
also subject to the FTCA’s law enforcement exception.
8
Insofar as Mid-South separately challenges the agents’ failure to investigate the purpose
of the electrical cord before disconnecting it or to reconnect the cord at the conclusion of their
search, we find that these constitute nothing more than purported abuses of the agents’ discretion
in conducting the search and therefore, according to the terms of the exception, are also not
actionable. See 28 U.S.C. § 2680(a); Dalehite v. United States, 336 U.S. 33-34, 73 S. Ct. 956,
967 (1953).
14