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Loughlin v. United States

December 21, 2004

THOMAS P. LOUGHLIN, ET AL. APPELLEES
v.
UNITED STATES OF AMERICA AND AMERICAN UNIVERSITY, APPELLEES GLENBROOK LIMITED PARTNERSHIP, ET AL. APPELLANTS



Appeals from the United States District Court for the District of Columbia (No. 02cv00152) (No. 02cv00294) (No. 02cv00349)

Before: Edwards and Randolph, Circuit Judges, and Williams, Senior Circuit Judge.

The opinion of the court was delivered by: Edwards, Circuit Judge

Argued October 18, 2004

The Federal Tort Claims Act ("FTCA") gives district courts jurisdiction over civil actions on claims against the United States (the"Government") for money damages for injury or loss of property, or personal injury or death, caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his or her employment, under circumstances where the Government, if a private person, would be liable to the claimant under the law of the place where the act or omission occurred. See 28 U.S.C. §§ 1346(b), 2671-2680 (2000). This waiver of sovereign immunity does not extend to claims against the United States"based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation... or based upon the exercise or performance or the failure to exercise or perform a discretionary function." 28 U.S.C. § 2680(a).

This case involves an FTCA action brought by appellants – American University ("AU"); Glenbrook Limited Partnership, Lawrence N. Brandt, Inc., Lawrence N. Brandt, and Robert Brant (collectively"Glenbrook-Brandt"); Thomas P. Loughlin and Kathi Loughlin, individually and on behalf of their children; Patricia Gillum; and Camille Saum – for the Government's alleged negligence in (1) burying dangerous munitions and toxic chemicals on property leased from AU in the Spring Valley area of the District of Columbia around the time of World War I, (2) failing to issue warnings about the buried munitions and chemicals and the resulting dangerous conditions, and (3) failing to investigate and remedy the hazards and contamination it caused. Gillum and Saum initially filed their FTCA and local law claims in D.C. Superior Court. Their local law actions claimed that AU was liable to the plaintiffs under District of Columbia law, because the dangerous munitions and toxic chemicals on AU's property, and the hazardous conditions resulting therefrom, caused injuries to neighboring property owners. AU removed these actions to the District Court under 28 U.S.C. § 1441(b)-(c) (2000). The Loughlins filed both their FTCA action and supplemental local law claims similar to those filed by Gillum and Saum in District Court. The District Court invoked its supplemental jurisdiction over all local law claims against AU under 28 U.S.C. § 1367(a) (2000).

AU filed a motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the local law actions for failure to state a claim. The District Court denied this motion and wrote a lengthy opinion suggesting that the Loughlins, Gillum, and Saum had stated a cause of action against AU under District of Columbia law. See Loughlin v. United States, 209 F. Supp. 2d 165 (D.D.C. 2002) (" Loughlin I"). The District Court turned to the FTCA matter after rendering a judgment on the supplemental action. The trial court first allowed the parties jurisdictional discovery limited to the existence of rules, regulations, or directives that might pertain to the first part of the discretionary function exception. The District Court then granted the Government's motion to dismiss with prejudice the FTCA actions under the discretionary function exception. See Loughlin v. United States, 286 F. Supp. 2d 1, 3 (D.D.C. 2003) (" Loughlin II"). Having found that it lacked subject matter jurisdiction under the FTCA, the District Court dismissed all remaining claims without prejudice. Id. at 30. The FTCA claimants appeal the dismissal of their claims, as well as the limited scope of the trial court's discovery orders. AU separately appeals the District Court's denial of its motion to dismiss the supplemental action against the University. In the alternative, AU asserts that, if the actions resting on District of Columbia law are moot, then the District Court's decision on the non-federal claims should be vacated.

We affirm the District Court's dismissal of the FTCA claims under the discretionary function exception. Although the trial court's framework for discovery was misguided, we nonetheless find that the parties had a full and fair opportunity to determine the relevant jurisdictional facts and the District Court had an adequate record upon which to rest its judgment. Finally, we vacate the District Court's decision denying AU's motion to dismiss. The District Court had no subject matter jurisdiction over the FTCA action. Therefore, the trial court had no supplemental jurisdiction under § 1367(a) to entertain nonfederal claims. Accordingly, because it should not have reached the merits of the negligence claims under District of Columbia law, the District Court's views on local law are a nullity and must be vacated.

I. BACKGROUND

In April 1917, at the invitation of AU, the United States Army leased grounds from the University and gave its Corps of Engineers ("Corps") exclusive control over the property. Later that year, the Bureau of Mines established the American University Experiment Station ("AUES") in order to consolidate its chemical weapons research. When AUES was transferred from civilian control to the War Department's newly formed Gas Service, it became central to the Gas Service's Research Division, which used the experiment station to develop, manufacture, and test myriad chemical weapons. In order to simulate battlefield conditions, gas weapons were tested in trenches, bunkers, and pits created on the property. Loughlin II, 286 F. Supp. 2d at 3-4.

Shortly after the war's end, AUES was disbanded and the Army transferred personnel and equipment to other bases. It is undisputed, however, that some munitions and chemical warfare materials remained buried in Spring Valley, either as a result of weapons testing or deliberate burial. Id. at 4. In March 1920, the Army signed an agreement pledging to restore the buildings and grounds to the condition they were in when the Government took control of the property. This agreement appears to have been superceded, however, by a subsequent agreement, dated June 21, 1920, in which the University agreed to release the Government from its obligation to restore the property in exchange for the transfer of title to certain buildings erected by the Army. Id. The Army nevertheless performed some salvage and restoration work before leaving AUES; some contaminated structures were burned and others were boarded up and surrounded with fencing. Id. at 4 n.4.

In 1986, when AU embarked on plans to build a new athletic facility, the University discovered a 1921 article in The American University Courier, which reported that the Army had buried munitions on or near the University campus during World War I. The University notified the Army, which conducted document reviews and scoured the site with metal detectors, but did not uncover conclusive evidence of any buried munitions. Id. at 4. In 1990, American University sold property to Glenbrook-Brandt, which planned to construct two houses, at what is today 4825 and 4835 Glenbrook Road. In the course of these construction projects, workers uncovered old laboratory equipment and possible chemical contaminants. They also experienced severe physical reactions to the site that required emergency hospital care. Id. at 5. Glenbrook-Brandt informed the University, which retained an industrial hygiene consulting firm to investigate. The firm identified a herbicide, Silvex, in the soil, which it explained could irritate the senses, but was not a hazardous substance. Id.

Around this time, workers excavating land approximately one mile from the Glenbrook-Brandt property discovered an underground munitions bunker. That project's developer contacted the Army, which commenced investigations that lasted until 1995 and unearthed live and spent munitions and chemical warfare-related materials from the World War I era. These events gave rise to separate litigation against the United States by the owner/developer of that property. Id. at 5 & n.6 (citing W.C. & A.N. Miller Cos. v. United States, 963 F. Supp. 1231 (D.D.C. 1997)).

In January 1994, the Army, now immersed in a comprehensive investigation to locate buried weapons, sought and received permission from Glenbrook-Brandt to access its properties and sample the soil. Id. at 5. In February 1994, Thomas and Kathi Loughlin tendered a purchase offer to buy the property at 4825 Glenbrook Road. Glenbrook-Brandt disclosed to the Loughlins the recent developments, and the Loughlins hired an independent testing organization to sample the soil and evaluate potential environmental hazards. This independent firm found no contamination from hazardous substances. Id. at 5-6. On March 21, 1994, the Loughlins contracted to purchase 4825 Glenbrook Road.

Meanwhile, on March 9, 1994, the Corps collected soil samples from the Glenbrook-Brandt properties. Soil and groundwater samples were also collected from other"points of interest" throughout the area. In June 1995, the Defense Department issued its final Record of Decision, which concluded that no further action was necessary with respect to the removal operation in Spring Valley. At this time, the Army had removed from the area 141 pieces of ordnance, 43 of which were suspected of being chemical weapons. Id. at 5.

The Environmental Protection Agency ("EPA") also conducted soil sampling at 4825 Glenbrook Road during this time. EPA collected seven samples on March 11, 1994, one of which revealed heightened levels of arsenic. Id. at 6. Both the Loughlins and Glenbrook-Brandt allege that they lacked knowledge of this abnormal result until it was disclosed to them by the Corps in early February 1999. Id. Indeed, in January 1995, the Corps issued a letter to the Loughlins and other Spring Valley residents, which stated that the soil samples had not revealed chemical agents or explosives and that no hazard to human health or to the environment existed as a result of the Army's activities at AUES. Id.

In June 1996, however, workers at the site of the AU President's residence at 4835 Glenbrook Road, next door to the Loughlins' home, suffered reactions to odors and fumes that burned their eyes. These workers unearthed laboratory glassware and broken bottles filled with chemicals. The University hired Apex Environmental, Inc., which conducted soil samples that confirmed the existence of a contaminated area approximately 12 feet in diameter and up to two feet deep; the contamination included arsenic. Id. These events led the District of Columbia to conduct its own investigation, which also found elevated levels of arsenic and other toxic substances. Id.

In February 1998, the Corps conducted a geophysical survey of the Korean Ambassador's residence at 4801 Glenbrook Road, which also abuts 4825 Glenbrook Road, and found two potential burial pits. The Corps informed Spring Valley residents that it would investigate whether additional chemical warfare-related materials existed at 4801 Glenbrook Road. A 75 millimeter projectile was discovered buried six inches deep in the Ambassador's property in February 1999. Id. at 6-7.

In December 1998, the Corps also began further investigation of the Loughlins' property"'to confirm the absence of buried munitions, remnants thereof, and associated material.'" Id. at 7 (quoting United States' Stat. of Material Facts Not in Dispute ¶ 70). On June 9, 1999, the Corps collected 22 soil samples. All but four of the samples contained elevated levels of arsenic. Id. Based on the June 1999 samples, the Corps concluded that there was an"'unacceptable hazard'" from arsenic on the properties at 4801 and 4825 Glenbrook Road. Id. The Corps informed the Loughlins, who were forced to permanently evacuate their home. Since 1996, Army investigations in Spring Valley unearthed 667 pieces of ordnance, including chemical munitions and bottles of chemicals. These events spawned several lawsuits. Id.

This case presents FTCA claims brought by appellants against the Government. The Loughlins, Gillum, and Saum also brought negligence claims against AU, id.; Loughlin I, 209 F. Supp. 2d at 167, which brought cross-claims against the Government under the FTCA, see Br. of AU, Loughlins, Glenbrook-Brandt, Saum, and Gillum ("FTCA Appellants' Br.") ii-iii. The Gillum and Saum actions were initially filed in Superior Court and then removed to federal court under 28 U.S.C. § 1441(b)-(c). The Loughlins filed both their FTCA action and their supplemental local law claims in District Court. The District Court exercised its supplemental jurisdiction over the local law claims under 28 U.S.C. § 1367. On March 13, 2002, AU moved to dismiss the local law claims pursuant to Rule 12(b)(6). On June 3, 2002, the District Court denied AU's motion to dismiss, finding that AU owed a legal duty under the applicable District of Columbia law. See Loughlin I, 209 F. Supp. 2d at 167.

On September 20, 2002, the Government filed a motion to dismiss or, in the alternative, for summary judgment against all FTCA claimants (appellants) under the discretionary function exception. See United States District Court for the District of Columbia, Civil Docket for Case No. 1:02-cv-00294-ESH, reprinted in Joint Appendix ("J.A.") 20, 28. Appellants argued that the motion was premature, because jurisdictional discovery was necessary. The District Court permitted jurisdictional discovery limited to the existence of mandatory directives relevant to the first part of the discretionary function exception. See Loughlin II, 286 F. Supp. 2d at 7. The District Court subsequently granted the Government's motion to dismiss under the discretionary function exception, dismissing all claims against the United States with prejudice, and all remaining claims, including those against AU, without prejudice. See id. at 30.

Appellants appeal the dismissal of their case under the discretionary function exception and the court's restrictions on jurisdictional discovery. See FTCA Appellants' Br. 10-41. AU separately appeals the District Court's denial of its motion to dismiss under Rule 12(b)(6), seeking reversal on the merits with respect to Saum if we find jurisdiction under the FTCA, or vacatur if we affirm the applicability of the discretionary function exception. See Appellant AU's ("AU") Br. 9-11. Prior to oral argument, we ordered, sua sponte, that counsel be prepared to address the jurisdictional basis for this court to exercise appellate review and the effect that a determination that diversity jurisdiction exists for the case between Saum and American University would have on AU's request for vacatur. See Loughlin v. United States, No. 03-5284, Order (D.C. Cir. Oct. 15, 2004) ("Order of 10/15/04").

II. ANALYSIS

The FTCA vests the district courts with jurisdiction over civil damages claims against the United States

for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government... if a private person[] would be liable to the claimant in accordance with ...


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