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Goss v. United States

United States District Court, D. Arizona

November 13, 2018

Keith Goss, Plaintiff,
v.
United States of America; et al., Defendants.

          ORDER

          David G. Campbell Senior United States District Judge

         Plaintiff Keith Goss has sued Defendants United States of America, Tuba City Regional Health Care Corporation ("THC"), and Lynette Bonar, alleging eight claims related to his employment and resignation from THC. Doc. 1. THC and Bonar move to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction. Doc. 17. The United States moves to dismiss under Rule 12(b)(1) and (6) for lack of subject matter jurisdiction and failure to state a claim. Doc. 21. The motions are fully briefed, and no party has requested oral argument. For the reasons that follow, the Court will substitute the United States as a Defendant in place of THC and Bonar on four claims, grant THC and Bonar's motion to dismiss the other claims against them, and deny the United States' motion to dismiss.

         I. Background.

         The Court accepts Plaintiffs factual allegations as true for purposes of these motions to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         THC, which is a tribal organization that has a self-determination contract with the federal government, offers a wide range of medical services from a former Indian Health Service Hospital located in Tuba City on the Navajo Reservation. Doc. 17- 1 at 3, 43. Plaintiff worked as a podiatrist for THC from July 1, 2008 until he resigned on September 20, 2017. Docs. 1 at 4; Doc 17-1 at 3. During his employment, Plaintiff made complaints regarding inappropriate expenditures of hospital money and inadequate medical care offered to tribal members. Doc. 1 ¶¶12-14. After reports surfaced about problems with care and corruption, THC placed Plaintiff on administrative leave. Id. ¶ 17. An outside attorney hired by THC interviewed Plaintiff regarding his complaints and other statements he made in the course of his employment, and characterized Plaintiffs other statements as threats. Id. ¶¶ 18-19. Plaintiff alleges that THC conducted this investigation and generally created a hostile working environment to retaliate for the complaints he made about the hospital. Id. ¶¶ 12-14. Plaintiff resigned due to the results of the investigation. Id. ¶ 22.

         In December 2017, Plaintiff submitted a Federal Torts Claim Act ("FTCA") claim to the Bureau of Indian Affairs, alleging lost wages, lost future earnings, and emotional distress. See Doc. 21-3 at 2-5. The claim was denied. Doc. 17-1 at 81. In January 2018, Plaintiff sued Bonar and several other employees of THC in Arizona Superior Court, asserting a violation of federal wiretapping law, a Bivens claim, and seven defamation claims. Doc. 17-1 at 84-97. The superior court granted defendants' motion to dismiss for failure to state a claim and lack of subject matter and personal jurisdiction. Doc. 32-1.

         In the present complaint, Plaintiff alleges negligence and negligent supervision against the United States and THC ("claim 1"); constructive discharge against THC ("claim 2"); intentional infliction of emotional distress ('TIED") against Bonar and THC ("claim 3"); breach of covenant of good faith and fair dealing, apparently against all Defendants ("claim 4"); a Bivens claim against Bonar ("claim 5"); negligent supervision against all defendants as to the actions of THC employee Jayson Watabe ("claim 6"); violation of state whistleblower laws against THC and Bonar ("claim 7"); and violation of federal whistleblowing laws against THC and Bonar. ("claim 8").

         II. The United States' Motion.

         Plaintiff and the United States have stipulated that the United States will be substituted as the sole defendant in claims 1, 2, 3, and 6 pursuant to the FTCA. Doc. 24, ¶ 3 ("the Parties stipulate that ... the United States is the sole and proper party for the allegations raised in Counts 1, 2, 3, and 6."). This appears to be a valid stipulation. Federal regulations explain that "no claim may be filed against a self-determination contractor or employee based upon performance of non-medical-related functions under a self-determination contract. Claims of this type must be filed against the United States under the FTCA." 25 C.F.R. § 900.204. In light of this stipulation, THC and Bonar will be dismissed as Defendants in claims 1, 2, 3, and 6, and these claims will proceed solely against the United States. In the remainder of this order, the Court will address these claims as being asserted against the United States, properly substituted under 28 U.S.C. § 2679(b)(1).[1]

         A. Jurisdiction for Employment-Related Claims.

         The United States argues that the FTCA excludes coverage for employment-related claims between tribal employers and their employees. Doc. 21 at 6. Without identifying specific claims, the United States appears to argue that all of Plaintiffs employment-related claims are actually breach of contract claims excluded from coverage by the FTCA. Id.

         The FTCA does not cover claims for breach of contract. 28 U.S.C. § 2680(h); 25 C.F.R. § 900.183(a). Nor does it permit the United States to substitute for a government employee sued for breach of contract. See 28 U.S.C. § 2679(b)(1). By stipulating to substitute itself as the sole defendant in claims 1, 2, 3, and 6, the United States seems to concede that those claims are covered by the FTCA, which would mean they are not breach of contract claims. And, consistent with this position, the United States has not sought to substitute for THC and Bonar on claim 4, which asserts a breach of contractual covenant claim. See Doc. 21 at 2.[2]

         In its reply brief, the United States cites Pink v. Modoc Indian Health Project, Inc., 157 F.3d 1185 (9th Cir. 1998), for the proposition that a plaintiff cannot bring employment-related claims against the United States arising from employment with a tribal entity. But Pink contains very little discussion of this issue. It states only that "Pink's proposed amendment to substitute the United States would have been futile because Congress did not waive sovereign immunity." Id. at 1188. In this case, by contrast, the government has stipulated to be substituted for the individual Defendants on claims 1, 2, 3, and 6. Doc. 24. And the other grounds for dismissal of the plaintiffs claims in Pink have not been asserted by the government in this case. See Id. at 188-89.

         The government also cites Locklear v. Gila River Indian Cmty., No. 2:12-CV-01798-SLG, 2013 WL 12125745 (D. Ariz. Apr. 5, 2013), in its reply brief. Like Pink, Locklear addressed employment-related claims brought against a tribe and various employees of tribal entities. The United States was not named as a Defendant in that case and did not substitute for any defendant. Locklear addressed the plaintiffs various arguments that the tribal defendants could be sued in federal court, and found none of them correct. Id. at *2-4. The court did not consider whether it could exercise jurisdiction over claims brought against the United States under the FTCA.

         The government also argues in its reply brief that any employment-related claims, whether asserted as torts or breach of contract, must be brought in tribal court. Doc. 32 at 3-5. The government seems to suggest that FTCA liability for actions of employees of tribal self-determination entities is limited under 25 U.S.C. § 45Of(c) (now found at 25 U.S.C. § 5321(d)) to claims arising out of the provision of medical care, and, because Plaintiffs claims do not stem from the provision of medical services, those claims are not covered by the FTCA and cannot be asserted in this case. Doc. 32 at 5. The Court has three problems with this argument. First, it was not asserted in the United States' motion to dismiss, and the Court will not consider an argument made for the first time in a reply brief. Second, it appears to be inconsistent with 25 C.F.R. § 900.204, which provides that claims "based upon performance of non-medical-related functions under a self-determination contract. . . must be filed against the United States under FTCA." Third, it is inconsistent with the government's substitution for THC and Bonar.[3]

         The Court will not dismiss the claims at this point on the basis of these arguments, but does not preclude the government from reasserting them at summary judgment.

         B. Exhaustion and Plaintiffs IIED Claim.

         The United States argues that Plaintiffs claim for IIED should be dismissed for failure to exhaust administrative remedies because he failed to describe the injury sufficiently in his administrative claim to the BIA. Doc. 21 at 8. The Court does not agree.

         The FTCA provides that '"an action shall not be instituted upon a claim against the United States for money damages' unless the claimant has first exhausted his administrative remedies." McNeil v. United States, 508 U.S. 106, 107 (1993) (quoting 28 U.S.C. § 2675(a)). Exhaustion "is a prerequisite to district court jurisdiction." Johnson v. United States, 704 F.2d 1431, 1442 (9th Cir. 1983). A claim is considered "presented for purposes of § 2675 when a party files (1) a written statement sufficiently describing the injury to enable the agency to begin its own investigation, and (2) a sum certain damages claim." Blair v. United States, 304 F.3d 861, 863-64 (9th Cir. 2002).

         Plaintiffs administrative claim described his employment issues with THC and claimed $150, 000 for emotional distress. See Doc. 21-3 at 4-5. This was sufficiently detailed under 28 U.S.C. § 2675. Doc. 28 at 12. "The claim presentation requirement of the FTCA is designed to ensure that compensation is provided in a fair and equitable manner, 'not to provide a basis for a regulatory checklist, which when not fully observed, permits the termination of claims regardless of their merits.'" Blair, 304 F.3d at 868 (quoting Erxleben v. United States, 668 F.2d 268, 273 (7th Cir. 1981)). By specifically seeking compensation for emotional distress, Plaintiff placed the government on notice of his emotional distress claim. He provided "information sufficient for [the agency] to investigate." See Kinlichee v. United States, 929 F.Supp.2d 951, 960 (D. Ariz. 2013).

         C. ...


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