Should the Federal Circuit Require Takings Plaintiffs to Demonstrate FTCA Exhaustion?

TREES_redwoods_CA_alecharrisBy David BaakeOct. 21, 2013 at 11:41am

Title 28 contemplates a clear distinction between cases for which the Constitution provides a damages action against the United States and cases for which the Federal Tort Claims Act (FTCA) provides such an action. If the Constitution provides a cause of action, Title 28 instructs that the Court of Federal Claims (CFC) shall have jurisdiction.[1] If the FTCA provides the plaintiff’s cause of action, Title 28 instructs that “the district courts . . . shall have exclusive jurisdiction.”[2] If, however, the Constitution and the FTCA each provide a cause of action – as is the case where the United States has caused property damage that could be framed as either a tort or a taking – Title 28 does not provide a clear answer to the jurisdictional question.

Because the CFC’s jurisdiction is limited to cases founded upon the Constitution “not sounding in tort,”[3] Title 28 seems to instruct that these “mixed” cases must proceed in the district courts under the FTCA. For this reason, the CFC has occasionally declined to assert jurisdiction over mixed cases.[4] On other occasions, however, the CFC has permitted parties to litigate mixed cases before it, reasoning that the CFC’s jurisdictional grant must be read to include mixed claims because all physical takings – including claims that the CFC indisputably has jurisdiction over – are potentially cognizable under tort law.[5] Moreover, the Supreme Court’s recent decision to assert appellate jurisdiction in Arkansas Game & Fish Commission v. United States[6] – a mixed case that originated in the CFC – suggests that the Court does not read Title 28 to prevent the CFC from hearing takings cases that also sound in tort.

If we assume that the question of the CFC’s authority to hear mixed cases is settled after Arkansas Game & Fish, we encounter the question of exhaustion: Should the CFC require a plaintiff to demonstrate that it has exhausted the remedies available to it under the FTCA before seeking relief under the Takings Clause? In my opinion, exhaustion should clearly be required. The Constitution does not prohibit the United States from taking private property; it only prohibits the United States from refusing to provide just compensation for taken property. Thus, a plaintiff must allege that the United States has refused to provide just compensation in order to state a claim for relief under the Takings Clause. Where there is a reasonable probability that the United States will provide relief under a statutory or an administrative mechanism such as the FTCA, the plaintiff cannot demonstrate that the United States has refused to provide compensation. Therefore, there is no constitutional violation over which the CFC can assert jurisdiction.

An exhaustion requirement is also desirable from a policy perspective. It is the “Court’s settled policy to avoid unnecessary decisions of constitutional issues.”[7] Among other things, this policy prevents federal courts from unnecessarily restricting the freedom of other branches of government.[8] This concern is no less relevant when federal courts are asked to expound unnecessarily upon the Takings Clause than when they are asked expound unnecessarily upon any other constitutional provision.

The Federal Circuit has not yet considered whether a plaintiff asserting a mixed claim before the CFC must demonstrate FTCA exhaustion. However, in TrinCo Investment Co. v. United States,[9] the Court allowed a plaintiff to litigate a takings claim before the CFC, even after the plaintiff’s counsel admitted that his client had failed to exhaust the available remedies under the FTCA.[10] If my analysis is correct, this was a mistake; the TrinCo Court should have stayed the action in the CFC pending the plaintiff’s exhaustion of its remedies under the FTCA. Whether the Federal Circuit will rule this way when directly confronted with the FTCA exhaustion issue remains to be seen.

[1] 28 U.S.C. § 1491(a)(1).
[2] 28 U.S.C. § 1346(b)(1).
[3] 28 U.S.C. § 1491(a)(1).
[4] See Moden v. United States, 60 Fed.Cl. 275, 288 (2004) (concluding that “the same operative facts [cannot] give rise to both a taking and a tort;” dismissing takings claim that also sounded in tort); Berenholz v. United States, 1 Cl.Ct. 620, 626 (1982).
[5] See Hansen v. United States, 65 Fed.Cl. 76, 80 (2005) (because “all takings by physical invasion have their origin in tort law and are types of governmental nuisances or . . . trespasses . . . it is not fatal to a plaintiff’s claim or [the CFC’s] jurisdiction if the government alleges that the facts might give rise to a tort.”).
[6] 133 S. Ct. 511 (2012).
[7] See Mills v. Rogers, 457 U.S. 291, 305 (1982).
[8] See Rescue Army v. Mun. Court of City of Los Angeles, 331 U.S. 549, 571 (1947).
[9] 2013 WL 3746090 (Fed. Cir. 2013).
[10] See Oral Argument at 3:48 (statement of Matthew J. Dowd, counsel for TrinCo).

One comment

  1. David Baake says:

    One case that I neglected to mention that is relevant: In El-Shifa Pharmaceutical Industry Co. v. United States, the Federal Circuit held that the CFC could exercise jurisdiction over a takings claim even if the “complaint suggest[ed] the United States may have acted tortuously in accomplishing the taking.” 378 F.3d 1346, 1353 (Fed. Cir. 2004). Thus, the broad reading of the Tucker Act was established before Arkansas Game and Fish affirmed it sub silento.

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