Ruiz et al vs. United States of America

Filing 37

OPINION & ORDER re: 24 MOTION to Dismiss for Lack of Jurisdiction. For the reasons stated above, the Government's motion to dismiss the complaint is GRANTED without prejudice. The Clerk of Court is respectfully directed to close the motion docketed at ECF No. 24 and terminate this case. SO ORDERED. (Signed by Judge John F. Keenan on 2/27/2019) (anc) Transmission to Orders and Judgments Clerk for processing.

Case 1:09-md-02013-PAC Document 57

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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GERALDINE RUIZ, and SALVATORE
:
UNITED STATES DISTRICT COURT
TORRES,
:
SOUTHERN DISTRICT OF NEW YORK
:
-----------------------------------------------------------x
Plaintiffs,
:
In re FANNIE MAE 2008 SECURITIES
::
LITIGATION
::
-against::
::
UNITED STATES OF AMERICA,
-----------------------------------------------------------x :
Defendant.
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Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 02/27/2019
08 Civ. Civ. 6727 (JFK)
No. 177831 (PAC)
09 OPINION(PAC)
MD 2013 & ORDER
OPINION & ORDER

:
X

HONORABLE PAUL A. CROTTY, United States District Judge:
APPEARANCES

FOR PLAINTIFFS GERALDINE RUIZ and SALVATORE TORRES
BACKGROUND1
Peter Charles Gordon, Esq.
LAW OFFICE OF PETER C. GORDON, LLC
The early years of this decade saw a boom in home financing which was fueled, among
FOR DEFENDANT UNITED STATES OF AMERICA
other things, by low interest rates and lax credit conditions. New lending instruments, such as
Casey Kyung-Se Lee, Esq.
UNITED STATES ATTORNEY'S OFFICE S.D.N.Y.
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
JOHN F. KEENAN, United States District Judge:
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
Before the Court is a motion by Defendant the United States
assumption that the market would continue to rise and that refinancing options would always be
of America (the "United States" or the "Government") to dismiss
available in the future. Lending discipline was lacking in the system. Mortgage originators did
the complaint filed by Plaintiffs Geraldine Ruiz ("Ruiz") and
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
Salvatore Torres ("Torres") for lack of subject matter
originators sold their loans into the secondary mortgage market, often as securitized packages
jurisdiction under Federal Rule of Civil Procedure 12(b)(1).
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
For the reasons set forth below, the Government's motion is
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
granted.
and home prices began to fall. In light of the changing housing market, banks modified their
Background
lending practices and became unwilling to refinance home mortgages without refinancing.
A. Factual Background
1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

1
1

For the purposes of this motion to dismiss, the Court
assumes that the facts alleged in the complaint are true.
Plaintiff Geraldine Ruiz was injured on June 19, 2014, while in
a theater at the Ellis Island Museum in New York, New York,
which is operated by the National Park Service (the "NPS").
(Compl. ¶ 7; Butler Decl. ¶ 2 (March 13, 2018), ECF No 27.)

The

Parties refer to this theater in their briefs as "Theater One."
(See Mem of Law in Supp. of the United States of America's Mot.
to Dismiss at 1 (March 13, 2018), ECF No. 25 [hereinafter
"Mem."].)

Although not alleged in the complaint, the Parties'

briefs and Plaintiffs' administrative claims clarify that Ruiz
fell in the theater "due to lack of proper lighting and the
failure of the [museum] employees to warn her or guide her to
her seat." (See Lea J. Tyhach Decl. Ex. A, (March 13, 2018), ECF
No. 26.)

The complaint alleges that the Government "negligently

and carelessly, own[ed], occup[ied], operat[ed] and/or
maintain[ed] the . . . premises so as to cause a dangerous
condition to exist thereon." (Compl. ¶ 9.)
As a result of her fall, Ruiz "was caused to sustain and
did sustain serious and permanent personal injuries requiring
the care and treatment of physicians, hospitalization and
medication, and has been and will in the future continue to be
hampered in her daily routine." (Id. ¶ 10.)

After her fall,

Plaintiff Torres, Ruiz's husband, was "deprived of the service,
2

society, and consortium of . . . Ruiz." (Id. ¶ 13.)

The

complaint asserts two causes of action for negligence against
the Government: one for Ruiz's injuries and one for Torres's
loss of consortium of Ruiz. (Id. ¶¶ 8-13.)
B. Procedural History
On April 25, 2016, the Department of the Interior (the
"DOI") received administrative claims from Ruiz and Torres, both
of which it denied by letter on September 22, 2016. (Tyhach
Decl. ¶ 4; id. Exs. A, B, C.) Having exhausted their
administrative remedies, Plaintiffs filed the instant action in
the District Court of New Jersey on March 19, 2017. (ECF No.
10.)

On September 5, 2017, the case was transferred from the

District of New Jersey to this Court pursuant to a stipulation
by both Parties. (Id.)

Jurisdiction over Plaintiffs' claims is

predicated on 28 U.S.C. § 1346(b), which gives the district
courts "exclusive jurisdiction of civil actions on claims
against the United States, for money damages."
Discussion
I.

Legal Standard

A. Federal Rule of Civil Procedure 12(b)(1)
"A plaintiff asserting subject matter jurisdiction has the
burden of proving by a preponderance of the evidence that it
exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.
2000).

"In resolving a motion to dismiss under Rule 12(b)(1),
3

the district court must take all uncontroverted facts in the
complaint (or petition) as true, and draw all reasonable
inferences in favor of the party asserting jurisdiction." Tandon
v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243
(2d Cir. 2014).

When a party challenges a court's jurisdiction,

the court may "refer to evidence outside the pleadings" in
evaluating any disputed jurisdictional fact. Luckett v. Bure,
290 F.3d 493, 497 (2d Cir. 2002); see also Tandon, 752 F.3d at
243 (“[W]here jurisdictional facts are placed in dispute, the
court has the power and obligation to decide issues of fact by
reference to evidence outside the pleadings, such as
affidavits.” (quoting APWU v. Potter, 343 F.3d 619, 627 (2d Cir.
2003)).
B. The FTCA and the Discretionary Function Exception
The Government seeks dismissal of both of Plaintiffs'
causes of action for lack of subject matter jurisdiction
pursuant to Federal Rule of Civil Procedure 12(b)(1) because it
was performing "a discretionary function" and is therefore
immune from suit.(Mem. at 5.)
Whether the United States is immune from suit is a
jurisdictional question, and, therefore, is properly decided on
a 12(b)(1) motion. See Makarova, 201 F.3d at 113 ("A case is
properly dismissed for lack of subject matter jurisdiction under
Rule 12(b)(1) when the district court lacks the statutory or
4

constitutional power to adjudicate it.")

The United States, as

sovereign, "is typically immune from suit." Molchatsky v. United
States, 713 F.3d 159, 162 (2d Cir. 2013).

The Federal Tort

Claims Act (the "FTCA"), however, waives sovereign immunity for
claims based on the negligent acts of U.S. agencies or
employees. See 28 U.S.C. § 1346; see also Coulthurst v. United
States, 214 F.3d 106, 108 (2d Cir. 2000).

In relevant part, the

FTCA authorizes suits
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
office
or
employment,
under
circumstances where the United States, if a private
person, would be liable to the claimant in accordance
with the law of the place where the act or omission
occurred.
28 U.S.C. § 1346(b)(1).
The FTCA's waiver of sovereign immunity is not limitless.
In particular, the FTCA excludes from its waiver claims based on
a federal agency's or employee's performance of or failure to
perform "a discretionary function . . . , whether or not the
discretion involved [was] abused." 28 U.S.C. § 2680(a).

Under

this limitation, a court cannot hold the Government liable based
on the negligent acts of its agencies or employees when two
conditions are met: "(1) the acts alleged to be negligent [are]
discretionary, in that they involve an 'element of judgment or
choice' and are not compelled by statute or regulation and (2)

5

the judgment or choice in question [is] grounded in
'considerations of public policy' or susceptible to policy
analysis." Coulthurst, 214 F.3d at 109.
There is some dispute over whether the plaintiff or the
United States bears the ultimate burden of proving the
applicability of the discretionary function exception. See Anson
v. United States, 294 F. Supp. 3d 144, 158 (W.D.N.Y. 2018)
("[N]either the Second Circuit nor the United States Supreme
Court has explicitly answered whether the United States or a
plaintiff bears the ultimate burden of proving the applicability
of the discretionary function exception.” (quoting Ruiz ex rel.
E.R. v. United States, No. 13-CV-1241, 2014 WL 4662241, at *4
(E.D.N.Y. Sept. 18, 2014)).

The Second Circuit, however, has

endorsed the view that on a motion to dismiss for lack of
subject matter jurisdiction, "Plaintiffs bear the initial burden
to state a claim that is not barred by the [Discretionary
Function Exception]." Molchatsky, 713 F.3d at 162.

"If the

Government responds by demonstrating that the action falls
within a discretionary framework, a plaintiff must rebut the
Government's showing sufficiently to demonstrate that there is a
plausible case for non-discretionary or non-policy action in
order to defeat dismissal." Molchatsky v. United States, 778 F.
Supp. 2d 421, 431 (S.D.N.Y. 2011), aff'd, 713 F.3d 159.

6

II.

Plaintiffs' Claims Are Barred by the Discretionary Function
Exception
The administrative claim Plaintiff Ruiz filed with the DOI

states that "Claimant, Geraldine Ruiz fell due to lack of proper
lighting and the failure of the employees to warn or guide her
to her seat causing claimant to misstep and fall." (Tyhach Decl.
Ex. A.)

The Government, in its motion to dismiss, provided

affidavits stating that the NPS's decisions to (1) dim the
lights in the movie theater prior to the movie, (2) refrain from
having ushers escort individual visitors to their seats, and (3)
not warn visitors of the steps in Theater One were discretionary
decisions motived by public policy analysis. (See, e.g., Butler
Decl. ¶¶ 6-7.)

Accordingly, to plausibly state that this Court

has jurisdiction over their claims, Plaintiffs must make some
showing that the NPS's conduct was based on non-discretionary or
non-policy action.

They have failed to do so.

Plaintiffs concede in their opposition that the decisions
made by NPS were indeed discretionary and not mandated by any
statute or regulation. (Mem. of Law in Opp. to Def.'s Mot. to
Dismiss at 9-10, (April 30, 2018), ECF No. 30 [hereinafter
"Opp."] ("The plaintiff acknowledges that it appears that there
is no federal statute, regulation or policy specifically
prescribing a course of action for the defendant's employees to
follow in this circumstance.")).

Accordingly, the question

facing the Court is whether Plaintiffs have sufficiently
7

rebutted the Government's evidence that the NPS's decisions were
"grounded in 'considerations of public policy' or susceptible to
policy analysis." Coulthurst, 214 F.3d at 109; see also Brotman
v. United States, 111 F. Supp. 2d 418, 423 (S.D.N.Y. 2000)
("The . . .

question is whether, if the conduct was

discretionary, that conduct is 'based on considerations of
public policy.'").

The Court holds they have not.

Plaintiffs posit two reasons why the NPS's decisions were
not grounded in public policy concerns.

First, they argue that

Ruiz fell because "the lights were not on because they were
broken, malfunctioning, or simply turned off," and "[t]he
failure to maintain the lights in working order or to not turn
them on when the patrons were entering the theater is not a
policy decision grounded in social, economic, and political
policy." (Opp. at 11.)

Plaintiffs rely Indian Towing Co. v.

United States, where the Government installed a lighthouse but
failed to maintain it in working order. 350 U.S. 61, 69 (1955).
The Supreme Court held that the Coast Guard did not need to
"undertake the lighthouse service," but "once it exercised its
discretion to operate a light . . . and engendered reliance on
the guidance afforded by the light, it was obligated to use due
care to make certain that the light was kept in good working
order." Id. at 69.

"If the Coast Guard failed in its duty and

damage was thereby caused to petitioners, the United States is
8

liable under the Tort Claims Act." Id.

Plaintiffs' comparison

to Indian Towing does not persuade the Court that the
discretionary function exception does not apply here since
nowhere in their complaint do Plaintiffs allege that the lights
in the theater were broken or malfunctioning, or that the
dimming of the lights was not the purposeful result of the NPS's
efforts to facilitate the viewing of the theater's film.
Without these allegations, Plaintiffs have not plausibly pled
that the NPS "decided to institute a specific practice" and then
failed "to exercise due care in executing that practice."
Brotman v. United States, 111 F. Supp. 2d 418, 424–25 (S.D.N.Y.
2000).
Second, Plaintiffs argue that this case is analogous to the
Third Circuit case, Cestonaro v. United States, 211 F.3d 749 (3d
Cir. 2000). There, the plaintiff, a widow, brought a wrongful
death action after her husband was murdered in a parking lot
maintained by the NPS. Id. at 751-52.

The Third Circuit held

that the NPS failed "to show how providing some lighting, but
not more, is grounded in the policy objections with respect to
the management of the National Historic Site." Id. at 757.
Here, however, the Government has argued that part of the NPS's
mission is to "provide for the enjoyment of . . . natural and
historic objects," 54 U.S.C. § 100101, and that the NPS made its
decisions in furtherance of that objective. (Mem. at 6-7.)
9

It

dimmed the lights in the movie theater "so that visitors could
properly observe educational films," and it made the decision
not to have ushers guide visitors or warn them of the steps in
Theater One to facilitate accommodating "the large volume of
visitors." (Butler Decl. ¶ 7.)

The NPS's decisions are,

therefore, "susceptible to policy analysis" and involve the kind
of judgment "that the discretionary function exception was
designed to shield." United States v. Gaubert, 499 U.S. 315
(1991) (quoting Berkovitz, 486 U.S. 531, 536 (1988)).
Plaintiffs have, therefore, failed to allege conduct that falls
outside the discretionary function exception and would make the
government susceptible to suit in federal court.
III.

Jurisdictional Discovery

Plaintiffs argue that they should be entitled to
jurisdictional discovery.

"Where a plaintiff fails to establish

a prima facie case that a court has jurisdiction over a
defendant, it is within a court's discretion whether to allow
jurisdictional discovery." Togut v. Forever 21, Inc., 285 F.
Supp. 3d 643, 648 (S.D.N.Y. 2018).

Plaintiffs assert they are

entitled to discovery because "[f]or some reason the theater was
not properly illuminated with . . . lights at the time of
[Ruiz's] fall," and "[t]he only way for the plaintiff to
establish if some or all the lights were not working or if the
defendant's employees failed to turn them on is to obtain
10

discovery from the defendant." (Opp. at 16.)

The Court denies

jurisdictional discovery in this case because Plaintiffs have
failed to allege in their complaint that the lights in the
theater were broken, malfunctioning, or turned off for reasons
unrelated to policy decisions made by the NPS.

Without these

allegations, there is no basis for jurisdictional discovery.

To

hold otherwise would allow "a plaintiff suing . . . in the
federal courts in New York, to make . . . conclusory non-factspecific jurisdictional allegations and . . . obtain extensive
discovery on that issue." Jazini v. Nissan Motor Co., 148 F.3d
181, 185 (2d Cir. 1998).
IV.

Leave to Amend

Rule 15 of the Federal Rules of Civil Procedure instructs
courts to “freely give leave” to amend “when justice so
requires.” Fed. R. Civ. P. 15(a)(2).

Amendment is not

warranted, however, “absent some indication as to what [a
plaintiff] might add to [its] complaint in order to make it
viable.” Shemian v. Research In Motion Ltd., 570 F. App’x 32, 37
(2d Cir. 2014) (quoting Horoshko v. Citibank, N.A., 373 F.3d
248, 249 (2d Cir. 2004)).

Accordingly, should Plaintiffs wish

to amend their complaint, they must demonstrate (1) how they
will cure the deficiencies in their claims by filing a proposed
amended complaint and (2) that justice requires granting leave
to amend.

Such demonstration shall be filed within 30 days of
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