Valour L L C et al v. Depaouli et al

Filing 61

ORDER: IT IS ORDERED that Plaintiffs shall file, within 21 days, an amended Complaint asserting claims consistent with the Fifth Circuits' requirementsin Sutton and Nguyen. IT IS FURTHER ORDERED 32 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim filed by USA with regard to grounds (2) and (3) is DENIED WITHOUT PREJUDICE to the right of the United States to re-urge the Motion, if appropriate, to seek dismissal of the amended Complaint. Signed by Magistrate Judge Carol B Whitehurst on 9/27/2017. (crt,Chicola, C)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
VALOUR LLC, ET AL

CIVIL NO. 6:16-cv-0733

VERSUS

JUDGE DEE D. DRELL

ROMANO DEPAOLI, ET AL

MAGISTRATE JUDGE WHITEHURST
ORDER

Before the undersigned, is a Motion To Dismiss For Lack of Jurisdiction and
For Failure To State A Claim Upon Which Relief Can Be Granted Pursuant To Rule
12(b)(1) and 12(b)(6) filed by the United States of America [Rec. Doc. 32],
Opposition

thereto filed by Valour LLC (“Valour”) and Dennis Pennington

(“Pennington”)(collectively “Plaintiffs”)[Rec. Doc. 39], and Defendant’s Reply
thereto. [Rec. Doc. 44]. The Motion came before the Court for hearing on oral
argument on August 16, 2017, and this matter was taken under advisement. [Rec.
Doc. 54]. At the request of the Court, the Parties filed supplemental briefs regarding
the applicability of 28 USC § 2680(h) to Plaintiffs’ allegations against the United
States under the Federal Tort Claims Act (“FTCA”). [Rec. Docs. 56 and 57].
The United States filed the instant Motion to Dismiss [Rec. Doc. 32] on the
grounds that: (1) this Court lacks subject matter jurisdiction due to Plaintiffs’ failure
to exhaust administrative remedies; (2) the discretionary function exception to the
FTCA bars this action; and/or (3) Plaintiffs failure to allege facts in their second

supplemental and amending complaint to state a claim upon which relief can be
granted under the applicable state law. The Court addressed the Motion to Dismiss
on ground (1) in a separate Report and Recommendation. [Rec. Doc. 60].
This Order addresses the Motion to Dismiss based on grounds (2) and (3). For
the reasons set forth below, the Court grants Plaintiffs twenty-one (21) days from the
date of this Order to amend their Second Amending and Supplemental Complaint in
accordance with the findings set forth below. In light of this, the Court denies the
United States’ Motion to Dismiss For Lack of Jurisdiction Pursuant To Rule 12(b)(1)
and 12 (b) (6) with regard to grounds (2) and (3) [Rec. Doc. 32] as MOOT, without
prejudice to the United States’ right to re-urge the Motion, if appropriate, to seek
dismissal of the newly amended Complaint.
I. Background
Plaintiffs Valour and Pennington filed this

action against individual

defendants1 under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91
S.Ct. 1999, 29 L.Ed.2d. 619 (1971), and against the United States for possible abuse
of process and malicious prosecution pursuant to the FTCA, 28 U.S.C. §§ 1346(b),
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Maurice Compton (“Compton”), Romano Depaoli (“Depaoli”), Lisa Huff (“Huff”),
Harold Kostem (“Kostem”) and Jeremy Wiesel (“Wiesel”) are the individual defendants who
were sued pursuant to Bivins. They filed a Motion To Dismiss Pursuant To Rule 12(b)(2) and (3)
[Rec. Doc. 45] which also came before the Court for hearing on oral argument on August 16, 2017 and
was taken under advisement. [Rec. Doc. 54]. This matter has been addressed in a separate Report and
Recommendation by the undersigned.

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2671, et seq.
The United States seeks dismissal of Plaintiffs’ claims against it on the grounds
that this Court lacks subject matter jurisdiction under the discretionary function
exception to the FTCA. The United States further asserts that Plaintiffs fail to allege
facts in their Second Supplemental and Amending Complaint to state a claim upon
which relief can be granted under the applicable state law. Plaintiffs claim that this
action falls under the law enforcement proviso exception to the intentional tort
exception to the FTCA, 28 U.S.C. §2680(h), and thus, this Court has subject matter
jurisdiction.
II. Law and Analysis
Absent a waiver, sovereign immunity shields the Federal Government and its
agencies from suit; and it is jurisdictional in nature. F.D.I.C. v. Meyer, 510 U.S. 471,
475, 114 S.Ct. 996, 1000, 127 L.Ed.2d 308 (1994); City of Alexandria v. Fed.
Emergency Management Agency, 781 F.Supp.2d 340, 346 (W.D. La. 2011). The
FTCA is a general waiver of the sovereign immunity of the United States Government
to suit in the federal courts. It was designed “to afford easy and simple access to the
federal courts for persons injured by the activities of government” without the need
to resort to private bills for the purpose of obtaining compensation. Collins v. United
States, 783 F.2d 1225, 1233 (5th Cir.1986) (Brown, J., concurring). This design for
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simplicity, however, is rendered more intricate by the numerous exceptions and
provisos to the waiver that are found in § 2680. Sutton v. United States, 819 F.2d
1289, 1292 (5th Cir. 1987).
Two of those exceptions are at issue in this matter. The first, the discretionary
function exception, § 2680(a), retains sovereign immunity for the United States
against [a]ny claim ... 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.
The second is the law enforcement proviso, a 1974 amendment to § 2680(h)
constituting a limited waiver of sovereign immunity, which added to the original
language that with regard to acts or omissions of investigative or law enforcement
officers of the United States Government, the provisions of this chapter [that waive
sovereign immunity] ... shall apply to any claim arising out of assault, battery, false
arrest, abuse of process, or malicious prosecution. Sutton, 819 F.2d at 1294.
The Fifth Circuit has recognized that §§ 2680(a) and (h) exist in tension with
each other and that their purposes must be harmonized in each individual case, so as
to give each provision meaning without abrogating either provision. Nguyen v. United
States, 65 F. Appx. 509 (5th Cir. 2003) citing Sutton, 819 F.2d at 1295. In this regard,
the court has not “hesitated to conclude that [an] action does not fall within the
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discretionary function of § 2680(a) when governmental agents exceed the scope of
their authority as designated by statute or the Constitution.” Sutton, Id.
In Sutton, the court remanded the case for further proceedings on the grounds
that the District Court's dissolution of the case under F.R.Civ. P. 12 was premature,
stating, “ The trial court must examine more specifically pleaded facts against the
legislative purposes of sections 2680(a) and (h) to determine whether the nature and
quality of the conduct specifically set forth is of the type which Congress intended
to include in permitting claims for some intentional torts including malicious
prosecution, or is the nature and quality for which Congress intended to retain its
immunity for acts involving discretionary functions.”
In Nguyen, the court stated “in harmonizing the two provisions in this case,
it is significant that the INS officers did not commit a constitutional violation nor did
they engage in any conduct that could be described as in bad faith.... With respect to
the claim of negligence in investigating, the only basis asserted is failing to obtain
Nguyen's “A file” and failing to otherwise determine from various documents that
Nguyen was entitled to derivative citizenship. Because there is no allegation or
evidence of intentional misconduct, this is essentially a claim that the INS officers
failed to adequately perform a discretionary duty, which falls squarely within the
discretionary function exception.” Nguyen, 65 F.Appx. 509 at 2.
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In the instant matter, Plaintiffs have made reference to one of the investigative
officers misleading the Magistrate Judge, R. 27, ¶ 87, and have made many vague
references regarding several of the investigators manipulating evidence and/or
downplaying exonerating evidence in order to further the investigation. It is unclear
to the Court, however, whether this constitutes bad faith or intentional misconduct in
order to place it within the law enforcement proviso. The Court finds that the
Plaintiff’s Second Supplemental Complaint is unclear and that there are inadequate
factual allegations which prevent this Court from evaluating the cause of action in
light of the differing statutory policies. Thus, the Court will deny the United States
Motion to Dismiss with regard to grounds (2) and (3) alleged therein, and allow
Plaintiffs the opportunity to amend its Second Supplemental Complaint. Accordingly,
IT IS ORDERED that Plaintiffs shall file, within twenty-one (21) days, an
amended Complaint asserting claims consistent with the Fifth Circuits’ requirements
in Sutton and Nguyen. In drafting the amended complaint, Plaintiffs should tailor his
allegations to enable this Court to determine whether the nature and quality of
conduct specifically set forth was of type which Congress intended to include in
permitting claims for some intentional torts under law enforcement proviso or was of
type for which Congress intended to retain its immunity as acts of discretionary
function.
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IT IS FURTHER ORDERED that the Motion To Dismiss with regard to
grounds (2) and (3) is DENIED WITHOUT PREJUDICE to the right of the United
States to re-urge the Motion, if appropriate, to seek dismissal of the amended
Complaint.
THUS DONE AND SIGNED at Lafayette, Louisiana, this 27th day of
September, 2017.

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