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Beavertail, Inc. v. United States

United States District Court, D. Idaho

August 29, 2017

BEAVERTAIL, INC., et al., Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill Chief Judge United States District Court

         INTRODUCTION

         Before the Court is the United States' Motion to Dismiss Plaintiffs' Amended Complaint. See Dkt. 42. For the reasons explained below, the Court will deny the motion to dismiss plaintiffs' tort claims. The Court will also deny the motion to dismiss plaintiffs' quiet title claim, though it will order plaintiffs to either: (1) join the State of Idaho as a required party under Federal Rule of Civil Procedure 19(a); or (2) make a showing as to why the quiet title claim should proceed in the State's absence.

         BACKGROUND

         This lawsuit concerns Grays Lake, which is a 22, 000-acre marsh in Eastern Idaho, northeast of Soda Springs. Orestes S. John first surveyed the lake in 1877, describing it as “a shallow lake of uncertain or variable extent . . . margined by fields of tule, and treacherous bog.” See Sibbett Dec. ¶¶ 2, 3 & Ex. 1. The marsh was historically used by ranchers and homesteaders for haying and grazing.

         Over time, tensions arose between the ranchers and the United States government. Both sides claimed ownership to the property. The government wished to use the marsh as a water storage facility for the Shoshone Bannock Tribes and for a wildlife refuge, while the ranchers wished to continue using the marsh for haying and grazing.

         In 1965, to clarify uses and ameliorate tensions, various ranchers (including the plaintiffs here) and the government entered into identical 99-year Refuge Use and Cooperative Use Agreements. See Dkt. 23-3. The Cooperative Use Agreements provide that the government will use the middle of the lakebed - which the parties varyingly describe as a donut hole, the inner ring, or the Exempt Area - for a wildlife refuge and for water storage. As for the remaining, one-half-mile wide outer ring, the ranchers would continue to use that area for haying and grazing. Id.

         The government also planned to build a perimeter dike enclosing the donut hole. See Dkt. 23-3, at 2 (fifth and ninth unnumbered “whereas” clauses); id. ¶ (2). The basic idea was that the water within the dike would be used for the Tribes and for waterfowl, while the dried area outside the dike would be used for continued haying and grazing.

         As discussed further below, the agreements between the ranchers and the government do not obligate the government to build the perimeter dike. Instead, these agreements simply grant the government the exclusive right to construct a dike. But a few months before the ranchers entered into the Cooperative Use Agreements with the government, the Bureau of Indian Affairs (BIA) and the Department of Sport Fisheries and Wildlife (“Fish & Wildlife”), entered into a separate Memorandum of Understanding with each other regarding the Grays Lake wildlife refuge. See 1964 Memorandum of Understanding between BIA and Fish & Wildlife, Dkt. 23-4; Bloomfield Dec. ¶ 7. That agreement states that “the Bureau of Sport Fisheries and Wildlife will, as funds become available, construct dikes, roads, canals, control structures, fences, and operational headquarters; . . . .” 1964 Memorandum of Understanding, Dkt. 23-4, ¶ 2. This agreement also states that water levels could be manipulated at certain times, in certain pools, “PROVIDED, HOWEVER, that the . . . perimeter diking system is to be impervious.” Id. ¶ 3.

         Other documents prepared in the spring or early summer of 1965 also refer to the planned perimeter dike, including this statement in a June 16, 1965 Department of Interior news release: “Development of the Grays Lake National Wildlife Refuge will include construction of a periphery dike, water control structures, and pumping facilities.” Ex. D to Bloom Dec., Dkt. 23-5. See also Ex. K to Smith Dec., May 14, 1965 Memo (estimating costs for construction of dikes and other facilities).

         The government began construction of the perimeter dike but never completed it. According to plaintiffs, the small section of the dike that was completed failed to impound the water inside the dike and also failed to dry up the area outside the dike. See Sibbett Dec., Dkt. 8, ¶ 8. Regardless, the government left the partially constructed dike in place, rather than removing it. Plaintiffs say the partially constructed dike continually exacerbates spring flooding on their properties.

         The ranchers filed this action in December 2012. Shortly afterward, the Court granted the parties' motion to stay the proceedings while they attempted to settle their differences. Mar. 13, 2013 Stay Order, Dkt. 10. Several co-plaintiffs resolved their disputes, which included selling their lakebed properties to the government. The remaining two plaintiffs - Beavertail, Inc. and Grays Lake Land & Cattle, Inc. - have not settled. In November 2015, the Court lifted the stay, and in September 2016, the Court granted the government's motion to dismiss the complaint, with leave to amend. See Sept. 29, 2017 Order, Dkt. 38. Plaintiffs have now filed their amended complaint, and the government again moves to dismiss. See Dkts. 39, 42.

         DISCUSSION

         Plaintiffs allege four claims. The first three, for negligence, negligence per se, and trespass, are brought under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 2671-2680. The fourth is a quiet title claim, brought under the Quiet Title Act, 28 U.S.C. § 2409a(d). See Am. Compl. Dkt. 39.

         The government contends that plaintiffs' tort claims are barred by the discretionary function exception to the FTCA. Alternatively, the government argues that the tort claims are barred by the FTCA's two-year statute of limitations and because the government has the right to possess the inner ring of the lakebed. The Court will address each argument in turn, beginning with arguments related to the FTCA's discretionary function exception.

         A. The Governments' 12(b)(1) Motion to Dismiss Plaintiffs' Tort Claims

         1. The Governing Legal Standard

          The government raises the discretionary function exception within its Rule 12(b)(1) motion. A Rule 12(b)(1) jurisdictional attack may be facial or factual. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction. The government's attack is factual, as it relies on extrinsic evidence and does not assert lack of subject-matter jurisdiction based solely on the pleadings.

         In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 (9th Cir. 2003) (citing White, 227 F.3d at 1242). The court need not presume the truthfulness of the plaintiff's allegations. White, 227 F.3d at 1242. Safe Air for Everyone, 373 F.3d at 1039.

         However, “[t]he relatively expansive standards of a 12(b)(1) motion are not appropriate for determining jurisdiction [pursuant to a “factual attack”] ... where issues of jurisdiction and substance are intertwined. A court may not resolve genuinely disputed facts where ‘the question of jurisdiction is dependent on the resolution of factual issues going to the merits.'” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987).

         To the extent the issues become so intertwined, the summary judgment standard comes into play. Summary judgment is appropriate where a party can show that, as to any claim or defense, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). One of the principal purposes of the summary judgment “is to isolate and dispose of factually unsupported claims . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is “not a disfavored procedural shortcut, ” but is instead the “principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources.” Id. at 327.

         “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the outcome of the case. See Id. at 248.

         The moving party is entitled to summary judgment if that party shows that each issue of material fact is not or cannot be disputed. To show the material facts are not in dispute, a party may cite to particular parts of materials in the record, or show that the materials cited do not establish the presence of a genuine dispute, or that the adverse party is unable to produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c)(1)(A) & (B); see T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex, 477 U.S. at 322). The Court must consider “the cited materials, ” but it may also consider “other materials in the record.” Fed.R.Civ.P. 56(c) (3).

         Material used to support or dispute a fact must be “presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). Affidavits or declarations submitted in support of or opposition to a motion “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” R. 56(c)(4).

         The Court does not determine the credibility of affiants or weigh the evidence set forth by the non-moving party. All inferences which can be drawn from the evidence must be drawn in a light most favorable to the nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31 (internal citation omitted).

         Rule 56(e)(3) authorizes the Court to grant summary judgment for the moving party “if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it.” The existence of a scintilla of evidence in support of the non-moving party's position is insufficient. Rather, “there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, 477 U.S. at 252.

         2. Overview of the Federal Tort Claims Act & The Discretionary Function Exception

         The FTCA waives sovereign immunity, allowing tort claims to be brought against the United States arising out of the negligent conduct of government agents acting within the scope of their discretion. 28 U.S.C. § 2671-80; Miller v. United States, 163 F.3d 591 593 (9th Cir. 1998). Thus, the United States may be held liable “to the same extent as a private individual under like circumstances.” 28 U.S.C. § 2674.

         Congress has carved out several exceptions to the FTCA's waiver of immunity, however. See 28 U.S.C. § 2680. One of those exceptions is the discretionary function exception, which provides that the FTCA's waiver of sovereign immunity does not extend to:

Any claim based upon an act or omission of an employee of the Government . . . based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. § 2680(a).

         “The discretionary function exception is meant to avoid judicial second-guessing of governmental decisions. It is not, however, intended to create inconsistent liabilities between private and government employees performing identical acts. Thus, ‘in cases where the government is alleged to have committed negligence in the performance of a function such as that performed by a private citizen, rather than in the fulfillment of a broad policy-making duty, the government is subject to suit.'” Bear Medicine v. United States, 241 F.3d 1208, 1214 (9th Cir. 2001) (quoting Faber v. United States, 56 F.3d 1122, 1124 (9th Cir. 1995)).

         The applicability of the discretionary function exception is determined by a two-part test, sometimes referred to as the Berkovitz analysis. See generally Berkovitz v. United States, 486 U.S. 531, 536 (1995). First, the exception covers acts that are discretionary, so the challenged action must be “a matter of choice for the acting employee.” Id. The choice requirement is not satisfied where a “federal statute, regulation, or policy specifically prescribes a course of action for an ...


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