Pesnell v. Arsenault

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID PESNELL, 
Plaintiff-Appellant,
v.
JEFFREY ARSENAULT, a natural
person acting under color of No. 04-56721
federal law; JANET R. LINTZ, a
natural person acting under color  D.C. No.
CV-03-07533-ABC
of federal law; THOMAS P.
GALLAGHER, a natural person OPINION
acting under the color of federal
law; DOUGLAS J. MORGAN, a
natural person acting under color
of federal law,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, District Judge, Presiding
Submitted October 16, 2006*
Pasadena, California
Filed June 21, 2007
Before: Procter Hug, Jr., Harry Pregerson, and
Richard R. Clifton, Circuit Judges.
Opinion by Judge Hug;
Partial Concurrence and Partial Dissent by Judge Clifton
*The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
7449
7452 PESNELL v. ARSENAULT
COUNSEL
Ronald J. Tocchini and Jason M. Sherman, Tocchini & Asso-
ciates PC, Roseville, California, for the appellant.
Robert I. Lester and Sharla Cerra, Assistant United States
Attorneys, Los Angeles, California, for the appellees.
OPINION
HUG, Circuit Judge:
This case involves the issue of when an action brought
under the Federal Tort Claims Act (“FTCA”) bars a later pro-
ceeding against the federal employees whose acts or omis-
sions gave rise to the FTCA claims. We hold that the FTCA
claims were dismissed for lack of jurisdiction and that the
subsequent claims against the federal employees are not
barred. We reverse the district court’s dismissal of the subse-
quent action on the ground of procedural bar and remand for
consideration of the remaining issues in the case. This case
also involves a request for recusal of the district judge; we
affirm the denial of that request.
I.
Background
Pesnell long contended that he owned two million acres of
land in California. His claim to title depended upon records
PESNELL v. ARSENAULT 7453
dating back to the Mexican-American War. In 1998, the
United States brought a quiet title action against Pesnell and
others. In 1999, the district court entered judgment for the
United States. That ruling extinguished Pesnell’s claims to
title of the real property. United States v. Sierra Alpine, CV
98-585-ABC (C.D. Cal. 1999).
In 2000, Pesnell brought an action against the United States
and several federal agencies in the federal district court in
Arizona. Pesnell v. United States, CV 00-0399-JCC (D. Ariz.
2000) (“Pesnell I”). In that action, Pesnell brought claims pur-
suant to the FTCA, 28 U.S.C. § 1346(b)(1).1 Pesnell based his
basic contention on two incidents. The first incident involved
research allegedly costing $150,000. He did considerable
research to establish his claim to title to the two million acres.
Pesnell loaned this research to federal agents in 1988. The
agents promised to return the research, but never did. Pesnell,
therefore, had to reconstruct the research. The second incident
involved his reconstructed research, allegedly costing
$200,000. Federal agents took this research in 1995. The fed-
eral district court dismissed all the claims, and this court
affirmed in April 2003. Pesnell v. United States, 64 Fed.
App’x 73 (9th Cir. 2003).
Pesnell filed the current federal action in September 2003
in the Central District of California against four government
employees. Pesnell’s first amended complaint alleges four
causes of action. The first is a federal civil Racketeer Influ-
enced and Corrupt Organizations Act (“RICO”) claim, in vio-
lation of 18 U.S.C. § 1962(c); the second is a state civil RICO
claim in violation of Arizona Revised Statute section 13-
2314.04(A); the third is a Bivens2 constitutional claim for the
1
That case also involved a claim under the Freedom of Information Act.
The district court dismissed that claim as moot, and it is not involved in
this appeal.
2
See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388
(1971).
7454 PESNELL v. ARSENAULT
violation of Pesnell’s Fourth Amendment right by the defen-
dants based on an unlawful search and seizure of Pesnell’s
person and property; the fourth is a Bivens claim under the
Fifth Amendment for the defendants having taken and kept
his property without due process of law.
The district court granted the government’s motion to dis-
miss under Federal Rule of Civil Procedure 12(b)(6) based on
the FTCA’s judgment bar rule set forth in 28 U.S.C. § 2676.
Pesnell appeals, contending that Pesnell I was dismissed for
lack of jurisdiction, and thus it was not a judgment on the
merits, as is required by the judgment bar rule.
II.
Judgment Bar Rule
[1] The judgment bar rule of the FTCA provides: “The
judgment in an action under section 1346(b) of this title shall
constitute a complete bar to any action by the claimant, by
reason of the same subject matter, against the employee of the
government whose act or omission gave rise to the claim.” 28
U.S.C. § 2676. Pesnell does not contest that his Bivens claims
arise out of the same subject matter as his FTCA claims.
[2] The parties agree that for the judgment bar rule to apply
the judgment must be on the merits, not based on lack of
jurisdiction. The parties are correct. Where a court dismisses
an action because it does not meet the requirements of the
waiver of sovereign immunity under the FTCA, the court is
ruling that the action was not properly brought under the
FTCA. Thus, the only action the court can take is to dismiss
the complaint. The action was not properly brought in the first
place and therefore the court had no ability to render a judg-
ment on the merits. A lack of subject matter jurisdiction “goes
to the very power of a court to hear a controversy; . . . [the]
earlier case can be accorded no weight either as precedent or
as law of the case.” Orff v. United States, 358 F.3d 1137,
PESNELL v. ARSENAULT 7455
1149-50 (9th Cir. 2004) (quoting United States v. Troup, 821
F.2d 194, 197 (3d Cir. 1987)). Thus, the dismissal of the ear-
lier case does not result in a “judgment” within the meaning
of the judgment bar rule of § 2676. The court in the earlier
case merely ruled that the action was not properly brought
under the FTCA.
III.
Subject Matter Jurisdiction of Pesnell I
We review de novo the existence of subject matter jurisdic-
tion. Coyle v. P.T. Garuda Indonesia, 363 F.3d 979, 984 n.7
(9th Cir. 2004). In this appeal, we are required to determine
whether our affirmance of the dismissal of the claims in Pes-
nell I was on the merits or for lack of jurisdiction. Pesnell
brought five FTCA counts alleging unjust enrichment, con-
structive trust, conversation, negligence, and misrepresenta-
tion against the Government. He also brought claims for
wrongful search and seizure and violation of due process
under the Fourth, Fifth, and Fourteenth Amendments.
[3] Specifically, we held Pesnell’s claims of unjust enrich-
ment and constructive trust were “appropriately dismissed for
lack of jurisdiction.” Pesnell, 64 Fed. App’x at 74 (emphasis
added). We also held that, because Pesnell failed to exhaust
his administrative remedies with respect to his conversion and
negligence claims, “[t]he district court therefore lacked juris-
diction to consider [his] prematurely filed claims.” Id.
(emphasis added). We also upheld the dismissal of Pesnell’s
misrepresentation claim as proper, noting that the FTCA “spe-
cifically exempts claims for misrepresentation from its waiver
of sovereign immunity,” and therefore the dismissal was also
based on lack of subject matter jurisdiction. Id. Additionally,
we held that the FTCA does not include a waiver of sovereign
immunity for constitutional tort claims. Id. Therefore, those
claims were also dismissed for lack of jurisdiction. Thus, in
7456 PESNELL v. ARSENAULT
Pesnell I, we affirmed the dismissal of all of Pesnell’s FTCA
claims on grounds of lack of subject matter jurisdiction.
[4] Because we conclude that the judgment in Pesnell I was
based on lack of jurisdiction, the FTCA’s judgment bar rule
does not preclude Pesnell from bringing his current Bivens
and RICO claims arising out of the same subject matter. Simi-
larly, this action is not barred by res judicata or collateral
estoppel because each of these doctrines requires a final judg-
ment on the merits. See Providence Health Plan v. McDowell,
385 F.3d 1168, 1174 (9th Cir. 2004); Kourtis v. Cameron, 419
F.3d 989, 994 (9th Cir. 2005).
A.
Response to the Dissent’s Argument on Jurisdiction
The dissent contends that our ruling is in conflict with
Gasho v. United States, 39 F.3d 1420 (9th Cir. 1994), in
which we held that a prior judgment in an FTCA action did
constitute a judgment bar under § 2676. Id. at 1437-38. The
Gasho case is a complex one, in that it involved the appeals
of two separate cases arising out of the seizure of an airplane
and the arrest of its occupants. Id. at 1425. The first appeal in
Gasho concerned whether the district court had erred in grant-
ing a summary judgment for the Government on claims aris-
ing from the arrest and seizure of the airplane. Id. at 1427. We
reversed the district court’s summary judgment in favor of the
Government for the claims arising from the arrest for lack of
probable cause. Id. at 1432. We affirmed the summary judg-
ment for the Government on the claims arising from the sei-
zure of the aircraft. Id. at 1439.
In the second Gasho appeal, which involved a Bivens
action, we held that a judgment for or against the Government
in the first Gasho case precluded a later Bivens action. Id. at
1437. Because we reversed the judgment on the claims arising
out of the arrest in the first appeal, there was no judgment to
PESNELL v. ARSENAULT 7457
preclude a Bivens action in the second appeal. Id. at 1438. We
held however, that the judgment for the Government arising
from the aircraft seizure precluded a later Bivens action. Id.
A claim for the wrongful seizure of an aircraft is actionable
under 28 U.S.C. § 1346(b)(1), unless the claim is excepted
under 28 U.S.C. § 2680. This, however, requires a substantive
factual determination, on the merits, of the nature of the tort;
that is whether the alleged tortious act of the agent falls within
the scope of activities exempted in § 2680. The opinion in
Gasho interpreted § 2680
as requiring the United States to first demonstrate
that the Customs or IRS agent’s tortious conduct
falls within the scope of activities exempted in
§ 2680(c). If such a showing is made, the claim is
barred. If the government fails to show that the tor-
tious conduct is exempt, the plaintiff’s claim is not
barred, assuming the plaintiff demonstrates that an
‘investigative or law enforcement officer’ committed
the intentional tort.
Id. at 1433. The Gasho court then held that “the Government
clearly met its burden” and that “[t]he actions of the Customs
agents, the seizure and detention of the aircraft, are precisely
the kinds of acts that Congress exempted from liability in
§ 2680(c).” Id. The court affirmed summary judgment for the
Government. Id.
In Gasho, the court had to make a factual determination on
the nature of the tort of unlawful seizure involved. That was
a merits determination of the nature of the tort necessary
before there could be an exclusion of the claim for lack of
jurisdiction.
The dissent refers to the dismissal of the misrepresentation
claim in Pesnell I as being the same as the judgment in
Gasho’s seizure claim. The significant difference is that in
7458 PESNELL v. ARSENAULT
Pesnell I, there was no jurisdiction to consider any “misrepre-
sentation claim” whereas a “seizure claim” is not barred until
a factual determination on the merits is made as to the nature
of the claim.
All of the claims in Pesnell I were dismissed either
expressly for lack of jurisdiction or because constitutional
torts or claims for misrepresentation are not included in the
waiver of sovereign immunity. There was no merits determi-
nation on the nature of the tort in Pesnell I, as was true for the
seizure claim in Gasho.
IV.
Timeliness of the Bivens Claims
[5] Because the California district court dismissed Pesnell’s
claims on the basis of the judgment bar, it did not determine
when the statute of limitations period accrued nor did it deter-
mine the applicability of equitable tolling or equitable estop-
pel. Either of those doctrines may extend the time for filing
under the statute of limitations and involve determination of
factual matters. For this reason, such determination is not
ordinarily amenable to resolution under Rule 12(b)(6). “In
fact, a complaint cannot be dismissed unless it appears
beyond doubt that the plaintiff can prove no set of facts that
would establish the timeliness of the claim.” Supermail
Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir.
1995). Therefore, this case must be remanded for a determina-
tion of timeliness.
We conclude that Pesnell I did not resolve the issue of
timeliness. After concluding that all of the FTCA claims were
dismissed for lack of jurisdiction the opinion in Pesnell I
stated:
While Pesnell could be permitted to amend his com-
plaint to bring his constitutional claims against indi-
PESNELL v. ARSENAULT 7459
vidual government agents pursuant to Bivens v. Six
Unknown Named Agents, . . . any such claims would
be barred by the two-year statute of limitations appli-
cable to Bivens actions in Arizona.
64 Fed. App’x at 75 (citations omitted).
The most significant aspect of this statement is that it per-
tains to Bivens claims that would be barred by the statute of
limitations “in Arizona.” The only pertinence it could have to
California is if it could be accorded some res judicata or col-
lateral estoppel effect. This Bivens action is brought in the
State of California. “Although federal law determines when a
Bivens claim accrues, the law of the forum state determines
the statute of limitations for such a claim. In California, the
statute of limitations could be either one or two years.3 Toll-
ing provisions for Bivens claims are also borrowed from the
forum state.” Papa v. United States, 281 F.3d 1004, 1009 (9th
Cir. 2002). The issue for the California District Court on
remand is whether an Arizona decision not to permit a plain-
tiff to amend his complaint to add a Bivens action against per-
sons who were not parties to the FTCA action, and thus not
parties before the court, is to be accorded res judicata status
so as to foreclose the statute of limitations determination in
the California District Court. The issue of extending the Ari-
zona statute of limitations by equitable tolling or equitable
3
On January 1, 2003, California’s statute of limitations applicable to
§ 1983 actions changed from one-year to two-years. Cal. Civ. Proc. Code
§ 335.1. The statute is not retroactive. See Maldonado v. Harris, 370 F.3d
945, 954-55 (9th Cir.2004) (holding that under California law, the exten-
sion of the personal injury statute of limitations will not apply to claims
already time-barred). But see Cal. Civ. Proc. Code § 335.1, statutory notes
(c) & (d) (indicating that claims not already barred on September 10, 2002
would benefit from the extended statute of limitations). Which statute of
limitations applies in Pesnell’s case is left for the district court to deter-
mine on remand, as is the question of whether the statute of limitations for
Pesnell’s claim is extended by the application of equitable tolling or equi-
table estoppel.
7460 PESNELL v. ARSENAULT
estoppel was not discussed or ruled on in the Pesnell I deci-
sion. The application of res judicata or collateral estoppel doc-
trines is further attenuated by the fact that Pesnell seeks to
have the doctrines of equitable tolling and equitable estoppel
applied in relation to the California statute of limitations.
[6] Furthermore, the district court did not address the ade-
quacy of the pleading for the federal and state RICO claims
or the opportunity for the plaintiff to amend to resolve any
deficiencies. The remand is also for the purpose of addressing
the RICO claims.
V.
Motion for Recusal
In this case, Pesnell filed a Motion for Recusal alleging that
Judge Collins displayed partiality because: (1) she would be
a key witness regarding misrepresentations allegedly made by
Assistant U.S. Attorney Donna Ford during the Sierra Alpine
case; (2) Judge Collins’s clerk, acting at Judge Collins’s
direction, instructed Pesnell to leave the courtroom “without
apparent cause”; (3) Judge Collins issued Pesnell an order to
show cause as to why his actions should not be dismissed for
lack of prosecution; and (4) Judge Collins allegedly knew
facts of Sierra Alpine from United States v. Emerald Finan-
cial, a case she presided over earlier.
[7] The denial of a recusal motion is reviewed for abuse of
discretion. Jorgensen v. Cassiday, 320 F.3d 906, 911 (9th Cir.
2003). Under 28 U.S.C. § 144, if “the judge before whom the
matter is pending has a personal bias or prejudice either
against him or in favor of any adverse party, . . . [he] shall
proceed no further . . . .” Under 28 U.S.C. § 455(a), “Any . . .
judge . . . shall disqualify himself in any proceeding in which
his impartiality might reasonably be questioned.” Under both
recusal statutes, the substantive standard is “ ‘[W]hether a rea-
sonable person with knowledge of all the facts would con-
PESNELL v. ARSENAULT 7461
clude that the judge’s impartiality might reasonably be
questioned.’ ” United States v. Hernandez, 109 F.3d 1450,
1453 (9th Cir. 1997) (quoting United States v. Studley, 783
F.2d 934, 939 (9th Cir. 1986)).
[8] In Liteky v. United States, 510 U.S. 540 (1994), the
Supreme Court held that the alleged bias must usually stem
from an extrajudicial source. Id. at 554-56. The Court held
that:
First, judicial rulings alone almost never constitute a
valid basis for a bias or partiality motion. In and of
themselves . . . they cannot possibly show reliance
upon an extrajudicial source . . . . Second, opinions
formed by the judge on the basis of facts introduced
or events occurring in the course of the current pro-
ceedings, or of prior proceedings, do not constitute
a basis for a bias or partiality motion unless they dis-
play a deep-seated favoritism or antagonism that
would make fair judgment impossible. Thus, judicial
remarks during the course of a trial that are critical
or disapproving of, or even hostile to, counsel, the
parties, or their cases, ordinarily do not support a
bias or partiality challenge. They may do so if they
reveal an opinion that derives from an extrajudicial
source; and they will do so if they reveal such a high
degree of favoritism or antagonism as to make fair
judgment impossible.
Id. at 555 (internal citations omitted). However, “expressions
of impatience, dissatisfaction, annoyance, and even anger” are
not grounds for establishing bias or impartiality, nor are a
judge’s efforts at courtroom administration. Id. at 555-56.
[9] Judge Snyder, who presided over the recusal hearing,
denied Pesnell’s motion for recusal finding that “plaintiff does
not argue that the presiding judge should be disqualified
based upon any bias developed outside a judicial proceeding”
7462 PESNELL v. ARSENAULT
and thus did not meet the Liteky standard. Additionally, Judge
Snyder found that Pesnell failed to “demonstrate any such
‘deep-seated favoritism that would make fair judgment
impossible.’ ” Moreover, Judge Snyder found the contention
that Judge Collins is “likely to be a material witness in the
proceeding” under 28 U.S.C. § 455(b)(5)(iv) to be without
merit because there is no showing that she would be required
to be a witness as to any material fact in the action. The dis-
trict court did not abuse its discretion in denying the recusal
motion. Each party shall bear its own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART AND
REMANDED.
CLIFTON, Circuit Judge, concurring in part and dissenting in
part:
“Jurisdiction,” the Supreme Court has observed, “is a word
of many, too many, meanings.” Arbaugh v. Y & H Corp., 126
S. Ct. 1235, 1242 (2006) (quoting Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 90 (1998)). The majority opinion
concludes that a dismissal based on lack of “jurisdiction” does
not trigger the Federal Tort Claims Act (FTCA) judgment bar
under 28 U.S.C. § 2676. The simplicity of that approach is
appealing, but I disagree with the logic behind it and conclude
that it paints with too broad a brush. Perhaps more impor-
tantly, I believe that both in adopting that approach and in
reaching its conclusion regarding the judgment bar, the major-
ity opinion is inconsistent with our court’s precedent in Gasho
v. United States, 39 F.3d 1420 (9th Cir. 1994). Thus, I
respectfully dissent, in part.
I.
I agree completely with the majority opinion in affirming
the denial of Pesnell’s motion for recusal. I also agree with
PESNELL v. ARSENAULT 7463
the conclusions reached by the majority opinion that (1) Pes-
nell’s current claims other than for misrepresentation are not
barred by the previous litigation, and (2) we should not con-
clude, as defendants have argued, that the Bivens claims
alleged by Pesnell against the individual federal agents are
barred by the statute of limitations. Regarding the former, my
reasoning diverges from that of the majority opinion and is
explained in section IV below.
As for the limitations defense, it could be said that our
court reached such a conclusion in Pesnell v. United States,
64 F. App’x 73, 75 (9th Cir. 2003) (Pesnell I), but that was
applying Arizona’s statute of limitations. The current case has
been filed in California, and as the majority opinion notes,
ante at 7459, for a Bivens claim we look to the law of the
forum state to determine the duration of the limitations period
and the provisions for tolling. Papa v. United States, 281 F.3d
1004, 1009 (9th Cir. 2002). That the limitations period had
expired under Arizona law does not prevent Pesnell from try-
ing to bring his claim under California law. Zhang v. Dep’t of
Labor & Immigration, 331 F.3d 1117, 1118 (9th Cir. 2003)
(“A dismissal on statute of limitations grounds generally does
not bar a subsequent action in a different forum when the lim-
itations period in the second forum is longer than the first, and
has not yet expired.”). To be sure, it seems unlikely to me that
the result under California law will be any different than
under Arizona law,1 but the district court in the current action
did not make that determination, and I agree that the facts are
not sufficiently developed and clear for us to do so on appeal.
II.
The majority opinion holds that the judgment bar in 28
1
The statutory period in California is no longer than the two-year period
applied in Pesnell I from Arizona law, and California has a borrowing
statute for statute of limitations purposes that could cause even a court in
California to look to Arizona law. See Cal. Civ. Proc. § 361 (West 2006).
7464 PESNELL v. ARSENAULT
U.S.C. § 2676 applies only when the previous judgment was
entered on the merits, not based on lack of jurisdiction. Since
the earlier litigation brought by the same plaintiff on these
same facts in the District of Arizona, cumulating in Pesnell I,
ultimately resulted in dismissal of that lawsuit based on lack
of jurisdiction, the majority concludes that the Pesnell I dis-
missal does not bar the current action.
In particular, the majority opinion reasons that an action
dismissed because the court has concluded that sovereign
immunity was not waived was “not properly brought in the
first place and therefore the court had no ability to render a
judgment on the merits.” Ante, at 7454. It then continues:
A lack of subject matter jurisdiction “goes to the
very power of a court to hear a controversy; . . . [the]
earlier case can be accorded no weight either as pre-
cedent or as law of the case.” Orff v. United States,
358 F.3d 1137, 1149-50 (9th Cir. 2004) (quoting
United States v. Troup, 821 F.2d 194, 197 (3d Cir.
1987)). Thus, the dismissal of the earlier case does
not result in a “judgment” within the meaning of the
judgment bar rule of § 2676. The court in the earlier
case merely ruled that the action was not properly
brought under the FTCA.
Id. (alterations as presented in majority opinion).
The majority opinion appears premised on the proposition
that a case dismissed for lack of subject matter jurisdiction,
like Pesnell I, is a nullity that “can be accorded no weight”
and that does not result in a “judgment” within the meaning
of the judgment bar rule. Ante, at 7454-55. That reasoning
rests on a significant misunderstanding of Orff v. United
States, 358 F.3d 1137, 1149-50 (9th Cir. 2004), aff’d on other
grounds, 545 U.S. 596 (2005) — the precedent relied upon by
the majority and an opinion which I authored — and of the
significance of dismissals for lack of jurisdiction.
PESNELL v. ARSENAULT 7465
On appeal in Orff was a decision by the district court that
it lacked jurisdiction to entertain a lawsuit brought against the
federal government because the action was barred by sover-
eign immunity. See 358 F.3d at 1141-42. We affirmed that
decision. Id. at 1149. So did the Supreme Court. 545 U.S. 596
(2005). Before reaching that conclusion, though, the district
court had initially concluded that there was jurisdiction over
the action, because it believed that sovereign immunity had
been waived. See 358 F.3d at 1142. Before changing its mind
on the sovereign immunity issue,2 the district court made sev-
eral decisions on the merits in the course of ruling on motions
for summary judgment. See id. Some parties to the case, nota-
bly environmental groups which had intervened generally on
the side of the federal government and in opposition to plain-
tiffs, wanted to preserve those rulings on the merits. See id.
at 1150. We concluded that those rulings had to be vacated,
however, in a section of our opinion titled “The District
Court’s Rulings on the Merits Must Be Vacated.” Id. at 1149-
50.
That’s where the quotation from Orff relied upon by the
majority opinion in this case appeared. The substance of what
we said in Orff was not that a decision resulting in dismissal
for lack of jurisdiction should be accorded no weight. Rather,
it was that decisions (a) by the district court and (b) on the
merits (meaning subjects other than jurisdiction and sovereign
immunity — subjects that should never have been reached by
the district court because the court lacked proper jurisdiction
over the case to reach those other issues) could not be given
weight and had to be vacated.
We were not referring to our own decision. That’s why the
language quoted from Troup said that the “earlier case can be
2
The district court changed its conclusion with regard to sovereign
immunity and jurisdiction based on another decision our court issued in
the meantime, Klamath Water Users Protective Ass’n v. Patterson, 204
F.3d 1206 (9th Cir. 1999). See Orff, 358 F.3d at 1142.
7466 PESNELL v. ARSENAULT
accorded no weight.” Id. (emphasis added). The “earlier” case
was a reference to the decisions made by the district court, not
our own court’s opinion.
And, more than once, we specifically identified the portions
of the district court’s ruling that were affected by our deci-
sion: “Because the government never waived its immunity
from suit, the district court never had jurisdiction to issue its
rulings on the merits of the farmers’ appropriative water
rights, trust, and surcharge claims.” Id. at 1149. “The district
court’s rulings on the merits of the appropriative water rights,
trust, and surcharge claims shall not be binding in this or any
other case.” Id. “Because the district court lacked jurisdiction
to entertain those claims, we vacate the rulings previously
made by the district court on the merits of those claims.” Id.
at 1150.
As Orff explicitly articulated, the only decisions that were
vacated — and the only portions that could not properly be
recognized as either precedent or law of the case — were the
“rulings on the merits of the farmers’ appropriative water
rights, trust, and surcharge claims” previously (or “earlier”)
made by the district court. Notably missing from that list was
the ruling that sovereign immunity had not been waived and
thus that the court lacked jurisdiction over the claims. The
decision to that effect entered by the district court was not
vacated. Our opinion did not say that the jurisdictional ruling
by the district court was not binding. Nor did our decision in
Orff in any fashion hold or suggest that our own court’s ruling
was not binding, even though the conclusion we reached was
that sovereign immunity had not been waived and thus that
jurisdiction was lacking.
The ruling as to sovereign immunity and jurisdiction was
properly made, in turn, by the district court, by our court, and
by the Supreme Court, under the fundamental proposition that
a federal court always has jurisdiction to determine whether
it has jurisdiction. Stoll v. Gottlieb, 305 U.S. 165, 171-72
PESNELL v. ARSENAULT 7467
(1938) (“There must be admitted, however, a power to inter-
pret the language of the jurisdictional instrument and its appli-
cation to an issue before the court. . . . [Absent fraud,] [a]fter
a Federal court has decided the question of the jurisdiction
over the parties as a contested issue, the court in which the
plea of res judicata is made has not the power to inquire again
into that jurisdictional fact.” (footnotes omitted)); see Special
Investments, Inc. v. Aero Air, Inc., 360 F.3d 989, 992 (9th Cir.
2004) (“We, of course, have jurisdiction to determine our own
jurisdiction.” (citing United States v. Ruiz, 536 U.S. 622, 628
(2002))); Breed v. Hughes Aircraft Co., 253 F.3d 1173, 1177
(9th Cir. 2001). There is, therefore, no reason to disregard that
ruling or to treat it as a nullity. It was properly made by a
court with authority to make it.
The Orff decision itself demonstrates this important distinc-
tion. The majority opinion cites Orff in support of the proposi-
tion that a decision that the court lacks jurisdiction means that
the lawsuit was a nullity that should not be recognized. Yet
Orff itself was a decision which reached the conclusion that
the court lacked jurisdiction. The fact that the court lacked
jurisdiction to proceed with the case did not mean that the
court could not consider the case to determine whether it had
jurisdiction. Obviously, it could. And, the fact that the court
in Orff reached the conclusion that sovereign immunity had
not been waived and thus that the court lacked jurisdiction to
entertain the action did not mean that every decision the court
made up to that point — the analysis and findings that led to
the conclusion that jurisdiction was lacking — was a nullity
that should not be recognized thereafter as precedent or law
of the case. If that were true, then the majority opinion could
not properly cite and rely on Orff itself as precedent, and nei-
ther could other panels of our court. But Orff can and has
been cited as precedent, and not just by the majority opinion
here. See, e.g., Allen v. Gold Country Casino, 464 F.3d 1044,
1046 (9th Cir. 2006), cert. denied, 127 S. Ct. 1307 (2007).
Similarly, the logic of the majority opinion would suggest that
the Supreme Court’s decision in Orff v. United States, 545
7468 PESNELL v. ARSENAULT
U.S. 596 (2005), was also a nullity and should not properly
be recognized as precedent, either, since it also came to the
conclusion that sovereign immunity had not been waived and
thus that jurisdiction was lacking. But that’s not so.
What each of the Orff courts decided with regard to issues
properly before them does count, as precedent and, where
appropriate, as law of the case. Other rulings made by the dis-
trict court when it improperly thought that it had jurisdiction
were vacated, but the decision that sovereign immunity had
not been waived remained in place.
III.
In Gasho, our court considered the appeals of two separate
actions filed by the same plaintiffs. 39 F.3d at 1425. The first
action was an FTCA action against the federal government for
false arrest and false imprisonment, intentional infliction of
emotional distress, and abuse of process. Id. at 1427. The dis-
trict court granted the government summary judgment as to
most of the claims and dismissed one for failure to state a
claim. Id. The plaintiffs then filed a Bivens action against
individual federal employees, specifically Customs agents,
claiming violation of Fourth and Fifth Amendment rights. Id.
at 1425, 1427. The district court dismissed the Bivens action
based upon the first lawsuit and the § 2676 judgment bar.
Gasho, 39 F.3d at 1427. Both dismissals were appealed, and
our court considered the two appeals together. Id. at 1425.
Gasho was a complicated case. Our court affirmed the dis-
missals by the district court in part, but also reversed them in
part, remanding some to the district court for further proceed-
ings. Id. at 1439. The decision explained why different results
were reached regarding the various claims alleged by the
plaintiffs. What matters for purposes of our case is that Gasho
affirmed the dismissal of some of the Bivens claims asserted
against the Customs agents pursuant to the § 2676 judgment
bar, based upon the prior dismissals of similar claims against
PESNELL v. ARSENAULT 7469
the government on precisely the same ground that Pesnell I
dismissed some of Pesnell’s claims against the federal gov-
ernment — that the court lacked jurisdiction over the particu-
lar claim because sovereign immunity had not been waived.
In Gasho we applied § 2676 to bar the related claims against
the individual federal agents, establishing a precedent which
the majority opinion here disregards. It is the preclusive effect
that our court in Gasho gave to two rulings in that case that
require this conclusion.
The first ruling related to the district court’s grant of sum-
mary judgment in favor of the government on the claim by the
Gasho plaintiffs for intentional infliction of emotional dis-
tress. 39 F.3d at 1432. The Gasho court reviewed each factual
basis for this claim separately. Id. at 1432-36. On the part of
the claim arising from the seizure of the plaintiffs’ aircraft,
Gasho held that “[t]he actions of the Customs agents, the sei-
zure and detention of the aircraft, are precisely the kinds of
acts that Congress exempted from liability in § 2680(c).” Id.
at 1433. The Gasho court then held that this determination
precluded the effort of the plaintiffs to pursue a similar claim
against the individual federal employees, because of the
FTCA judgment bar. Id. at 1438.
The second ruling involved Gasho’s resolution of the plain-
tiffs’ abuse of process claim. The district court had dismissed
this claim under Fed. R. Civ. P. Rule 12(b)(6), ruling that the
plaintiffs had failed to state a claim under Arizona tort law.
Gasho, 39 F.3d at 1436. Instead of analyzing the relevant Ari-
zona tort law, Gasho upheld the district court on the grounds
that “[t]he tortious acts alleged by the Gashos involved deten-
tion of goods and merchandise by Customs and, therefore, the
claim is barred under the FTCA’s exemption for Customs
detentions contained in 28 U.S.C. § 2680(c).” Id. Gasho also
gave this ruling preclusive effect, explicitly stating that the
court “reject[s] the appellants’ argument that the dismissal of
the abuse of process claim for failure to state a claim is not
a ‘judgment’ on the merits under 28 U.S.C. § 2676. In any
7470 PESNELL v. ARSENAULT
case, the claim is barred by the Customs exception of 28
U.S.C. § 2680(c).” Id. at 1438 n.17 (citation omitted).
In both of these instances, the government prevailed
because the court did not have subject matter jurisdiction
absent a waiver of sovereign immunity. Yet even though these
were “jurisdictional” victories, our court held in Gasho that
they triggered the FTCA judgment bar, such that the plain-
tiffs’ similar claims against the individual employees were
precluded and had to be dismissed.
Pesnell I’s holding as to the misrepresentation claim is
indistinguishable. Pesnell I rejected the misrepresentation
claim brought by Pesnell against the government because 28
U.S.C. § 2680(h) specifically carves out misrepresentation
from the FTCA’s waiver of sovereign immunity. See 64 F.
App’x at 74 (stating that “[t]he FTCA specifically exempts
claims for misrepresentation from its waiver of sovereign
immunity” and citing FDIC v. Craft, 157 F.3d 697, 707 (9th
Cir. 1998)). Just as Gasho read § 2676 as barring any addi-
tional actions against individual federal agents arising from
the seizure of the Gashos’ plane, because § 2680(c)’s exemp-
tion for Customs detentions foreclosed any liability for this
seizure, so too must Pesnell I’s ruling on § 2680(h) give rise
to application of the judgment bar against any further litiga-
tion targeting the individual agents as defendants based on the
agents’ alleged misrepresentations.
The majority opinion attempts to distinguish Gasho this
way: “In Gasho, the court had to make a factual determination
on the nature of the tort of unlawful seizure involved. That
was a merits determination of the nature of the tort necessary
before there could be an exclusion of the claim for lack of
jurisdiction.” Ante, at 7457. With respect, I don’t know what
makes that a meaningful distinction. Gasho’s so-called “mer-
its determination” was a ruling that the court had no jurisdic-
tion because Congress had not waived sovereign immunity.
PESNELL v. ARSENAULT 7471
That was exactly the same ruling made to dismiss Pesnell’s
misrepresentation claim against the federal government.
Gasho was not a case where the plaintiff simply failed to
succeed on the merits (for instance, by failing to prove an ele-
ment of the alleged tort) of a claim for which there was a
waiver of sovereign immunity and thus jurisdiction, as the
court’s handling of the abuse of process claim demonstrates.
See 39 F.3d at 1436. Instead, Gasho was a case where the
court could not entertain the claim at all, since sovereign
immunity deprived it of jurisdiction. Why should the length
of discussion or the amount of analysis required before the
court concludes that there is no jurisdiction matter to whether
the judgment bar applies? The majority opinion does not
explain.3 There is nothing in Gasho that invites such a distinc-
tion. If the proffered distinction is meant to serve § 2676’s
goal of conserving governmental resources, see Gasho, 39
F.3d at 1437, then the majority’s line drawing is an arbitrary
exercise completely unmoored from both the text of the stat-
ute — text which is actually the best reflection of Congress’s
policy election — and our case law.
Gasho cannot properly be read as standing for less than the
proposition dictated by its facts: an adverse ruling resulting
from an explicit exception to the FTCA’s waiver of sovereign
3
The majority suggests that there might be an inherent structural differ-
ence between § 2680(c) and § 2680(h), ante, at 7457-58, but no such cate-
gorical distinction exists. Some cases, even if ultimately dismissed under
§ 2680(h), still require a court to make a determination to reach such a dis-
missal. See United States v. Fowler, 913 F.2d 1382, 1387-88 (9th Cir.
1990) (dismissing a counterclaim that alleged negligence, which would
ordinarily be cognizable under the FTCA, on the basis that it was really
an attempt to recover for misrepresentation). The majority’s distinction is
not one dividing § 2680(c) from § 2680(h), but one that turns on how art-
fully, or ineptly, an action was plead. As explained in the text, there is no
reason to condition § 2676’s applicability on whether the plaintiff’s first
suit craftily pleaded an exempt claim under some other guise, or, as in
Pesnell I, basically wrote one of the FTCA’s exemptions directly into the
complaint.
7472 PESNELL v. ARSENAULT
immunity is a judgment for purposes of § 2676, so that the
statute bars similar litigation against the individual employ-
ees.
The government can rely on general preclusion principles
(whether called issue or claim preclusion, collateral estoppel
or res judicata) as much as any other litigant, so the statutory
bar set forth in § 2676 presumably reaches further or adds
something more. See Will v. Hallock, 126 S. Ct. 952, 960
(2006) (describing § 2676 as closer to res judicata than immu-
nity and as functioning “in much the same way” as res judi-
cata, but also observing that “the statutory judgment bar is
arguably broader than traditional res judicata”). Gasho
decided that certain dismissals for lack of “subject matter
jurisdiction” based on sovereign immunity trigger the judg-
ment bar under § 2676. The refusal of the majority opinion to
follow that precedent is unjustified.
IV.
I agree with the majority that the judgment bar does not
completely prevent Pesnell from bringing his current RICO
claims, but bars those claims only to the extent that they are
predicated on certain other acts. In particular, Gasho does not
require that the judgment bar be applied to Pesnell I’s dis-
missals of his conversion and negligence claims. These were
also dismissed due to a lack of jurisdiction, but as I noted at
the outset, “jurisdiction . . . is a word of many, too many,
meanings.” Arbaugh, 126 S. Ct. at 1242 (internal quotations
marks omitted).
Not all dismissals for lack of jurisdiction should be treated
alike. With regard to Pesnell’s claims for conversion and neg-
ligence, the absence of jurisdiction stemmed from a failure to
exhaust, a defect that could be cured. 64 F. App’x at 74. The
failure to exhaust was not a permanent problem, such as the
absolute non-existence of a waiver of sovereign immunity.
Instead it merely reflected a failure to conform to the condi-
PESNELL v. ARSENAULT 7473
tions placed on an existent waiver of sovereign immunity.
Although these dismissals and the one relating to misrepre-
sentation all fall under the broad heading of “dismissals for
lack of jurisdiction,” there is a difference between them that
is material. When Congress explicitly carves out an exception
to its waiver of sovereign immunity, it is flatly rejecting lia-
bility. When Congress waives sovereign immunity but
imposes exhaustion requirements, it is accepting liability and
channeling the claims in a specific way. It is logical to hold
that rulings falling into the first category constitute judgments
for § 2676, while rulings in the second category do not. That
would permit the judgment bar to serve the two purposes our
case law has enunciated, preventing dual recoveries and
duplicate lawsuits, Gasho, 39 F.3d at 1437; Kreines v. United
States, 959 F.2d 834, 838 (9th Cir. 1992). At the same time
it would keep § 2676 from being unduly harsh to plaintiffs
bringing claims for harms that Congress has agreed, in princi-
ple, are cognizable. That is, therefore, the distinction I would
draw.
I would also exempt from the operation of § 2676 those
claims denied in Pesnell I because the FTCA was silent on the
claim and no other waiver of sovereign immunity was
adduced, not because the FTCA contained a specific waiver
exception. The judgment bar relates only to a “judgment in an
action under section 1346(b) of this title,” 28 U.S.C. § 2676,
and these claims did not constitute actions under 28 U.S.C.
§ 1346(b). Indeed, the claims did not fall under any statute.
See Pesnell I, 64 F. App’x at 74-75 (holding that Pesnell’s
equitable claims cannot fit under the Administrative Proce-
dure Act’s waiver and he had “not established an independent
basis of federal jurisdiction,” as well as noting that the FTCA
did not contain a waiver for constitutional claims). That is
why the claims to that effect filed against the government
failed. But the text of § 2676 does not cover these other legal
theories, outside § 1346(b), and thus I would not apply the
judgment bar to the similar claims filed against the individual
agents.
7474 PESNELL v. ARSENAULT
Gasho requires us to interpret § 2676 as barring those por-
tions of Pesnell’s RICO claims that are predicated on the
same alleged misrepresentations which were the subject of
Pesnell I. The district court’s flat dismissal of the entirety of
Pesnell’s current lawsuit under the FTCA judgment bar was
incorrect, however, since the bar does not extend any further
than the misrepresentation claims.
V.
In the end, my disagreement with the majority opinion has
only a limited effect on the outcome of this particular appeal.
I believe that Pesnell’s current claims based on misrepresenta-
tion are precluded by the § 2676 judgment bar. For various
reasons his other claims survive, at least theoretically. But the
gap in reasoning is wide and significant. By treating a deci-
sion to dismiss based on lack of jurisdiction as a nullity that
may be disregarded because it is a decision that “can be
accorded no weight either as precedent or as law of the case,”
ante at 7454, the majority opinion conflicts with our prece-
dent in Gasho and improperly denigrates the precedential
value of untold numbers of prior decisions based on similar
grounds. I respectfully dissent.