Verdicts

Dr. Bencomo, unbeknownst to the plaintiff, was an employee of the U.S. Public Health Service. Employees of the U.S. Public Health Service are deemed federal employees. As such, Dr. Bencomo was not amenable to suit in state court, as any claims against him for negligence in performance of his work must be brought in accordance with the Federal Tort Claims Act (FTCA), 28 U.S.C.S. §§ 1346, 2671-80. The FTCA waives the United States' sovereign immunity for tort actions and gives to the federal district courts exclusive jurisdiction over any suits stemming from government-employee negligence. Anyone having a claim against the United States through the FTCA is first required to exhaust the administrative remedies that may be available through an administrative claim. 28 U.S.C.S. § 2675(a).

An administrative claim is deemed exhausted if the relevant agency finally denies it in writing, or if the agency takes no action on the claim within six months of its filing. § 2675(a). The FTCA's exhaustion requirement is jurisdictional and courts may not waive it. Jerves v. United States, 966 F.2d 517, 519 (9th Cir. 1992).

When, in accordance with the FTCA, the United States was substituted for Dr. Bencomo as defendant and the case removed to federal court, the United States moved to dismiss the claims against it for lack of subject-matter jurisdiction — because D.L. had made no administrative claim concerning the doctor's alleged tortious treatment of his mother. As the plaintiff had failed to exhaust his FTCA remedies, the district court concluded that it did not have subject-matter jurisdiction over D.L.'s claims against the federal government; the parties therefore stipulated to dismissal without prejudice of those claims. The federal claims having been dispatched, the plaintiff's remaining state law causes of action were remanded to Tulare County Superior Court.

The plaintiff then duly submitted his claim concerning Dr. Bencomo's treatment of the deceased to the appropriate agency, the U.S. Department of Health and Human Services (DHS). DHS denied D.L.'s claim on Nov. 15, 2013. On April 1, 2014, D.L. amended his complaint in Tulare County Superior court to add the defendant Dr. Bencomo in place of Doe #9. Once more, the United States removed the action to federal court, substituted itself for Dr. Bencomo and moved for dismissal. The district court agreed with the defense that the FTCA required D.L. to file a new suit following denial of his administrative claim; he could not simply amend his state-court claim to include his prior-commenced, but premature, complaint. The district court decision led to this appeal to the Ninth Circuit.

The Appeal

The Ninth Circuit began by explaining the parties' points of view: “On appeal, D.L. argues that the district court erred in holding that his initial failure to exhaust his administrative remedies deprived the court of subject-matter jurisdiction even after D.L. had exhausted his administrative remedies. The United States argues that the FTCA's complete exhaustion requirement demands that D.L. file a new suit after exhaustion, rather than amend his premature complaint.” Who was right?

The defendant United States pointed to the U.S. Supreme Court's holding in McNeil v. United States, 508 U.S. 106, 113 S. Ct. 1980, 124 L. Ed. 2D 21 (1993), as authority for its position. In McNeil, the Supreme Court said a claimant had to file his lawsuit anew, because he had not exhausted the administrative claim process prior to filing a case in court. The McNeil court did not care that the administrative claim was denied before any “substantial progress” had been made in the federal court case; the FTCA sequence of events must be followed.

Plaintiff D.L., however, argued that the Ninth Circuit's own precedent in Valadez-Lopez v. Chertoff, 656 F.3d 851 (9th Cir. 2011), should control. In Valadez-Lopez, the appeals court held that a plaintiff who has filed a separate federal claim over which the federal court has jurisdiction — one not requiring FTCA administrative claim exhaustion — may amend that claim to add an FTCA claim once he has exhausted the administrative remedies available on the FTCA claim. He need not file a whole new claim — just add the FTCA claim to the others already before the federal court.

D.L.'s case was different from McNeil, the court found here, because the district court did not retain jurisdiction over the Dr. Bencomo claim. D.L. was not aware that Dr. Bencomo was a federal agent, and once he learned this fact he stipulated to dismissal of the premature FTCA claim. Thus, no premature FTCA claim against the United States remained in the federal court system. Stated the court, “Though the United States analyzes the federal case initiated by the second removal as if it were a continuation of the federal case initiated by the first, the second removal actually constituted a new federal case, with a new case number and a new docket in the federal district court.”

In further support of its decision to reverse and remand, the Ninth Circuit also pointed out that the FTCA's administrative exhaustion rule's goal of reducing unnecessary congestion in the courts “would be undermined, not served, by a rule requiring FTCA litigants to maintain parallel malpractice suits, against different defendants, but involving the same events, in state and federal court.”