S.H. v. United States

853 F.3d 1056

S.H., a minor, BY her guardian ad litem, Chantal HOLT; William Kenneth Holt; Chantal Holt, Plaintiffs-Appellees,

v.UNITED STATES of America, Defendant-Appellant.

No. 15-15000

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 15, 2016 San Francisco, California

Filed April 10, 2017

John Samuel Koppel (argued) and Mark B. Stern, Attorneys, Appellate Staff; Benjamin B. Wagner, United States Attorney; Benjamin C. Mizer, Principal Deputy Assistant Attorney General; Civil Division, United States Department of Justice, Washington, D.C.; for Defendant-Appellant.

Steven B. Stevens (argued), Steven B. Stevens APC, Los Angeles, California; Martin M. Berman, Law Offices of Martin M. Berman, Palm Springs, California; for Plaintiffs-Appellees.

Before: Carlos F. Lucero,^* Susan P. Graber, and Andrew D. Hurwitz, Circuit Judges.

Concurrence by Judge Graber

OPINION

LUCERO, Circuit Judge:

In Sosa v. Alvarez-Machain , 542 U.S. 692, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004), the Supreme Court held that the foreign country exception to the Federal Tort Claims Act ("FTCA") "bars all claims based on any injury suffered in a foreign country." Id. at 712, 124 S.Ct. 2739. The Court left unanswered, however, the issue currently before us: How to determine where an injury is "suffered." We hold that an injury is suffered where the harm first "impinge[s]" upon the body, even if it is later diagnosed elsewhere. See Restatement (First) Conflict of Laws § 377, n.1 (1934).

Applying that test to the facts of this case, we conclude that the foreign country exception bars plaintiffs' claims. S.H., the daughter of William and Chantal Holt, was born prematurely while the family was stationed at a United States Air Force ("USAF") base in Spain. As a consequence of her premature birth, S.H. sustained a permanent injury to the white matter of her brain; she was diagnosed as suffering from cerebral palsy after the family returned to the United States. The Holts filed suit against the United States, contending that officials at a USAF base in California negligently approved the family's request for command-sponsored travel to a base in Spain ill-equipped to deal with Mrs. Holt's medical needs. They further argue that S.H.'s injury—the cerebral palsy diagnosis—first occurred upon their return to the United States. At trial, the district court agreed that the injury occurred in South Carolina and awarded damages of $10,409,700. Although we are sympathetic to the plaintiffs' situation, we agree with the United States that the injury at issue was suffered in Spain. We exercise jurisdiction under 28 U.S.C. § 1291 and reverse.

I

A

Mr. Holt is a Master Sergeant in the USAF. He and his wife have four children. In 2004, when the family was stationed at Edwards Air Force Base in California, Mr. Holt was informed that he was being transferred to the USAF Air Base at Rota Naval Station in Spain. Shortly thereafter, a pregnancy test at the Edwards Air Force Base medical clinic confirmed that Mrs. Holt was pregnant with their third child.

After learning he was to be transferred overseas, Mr. Holt requested command-sponsored travel for his family. To obtain approval for this program, family members must be screened to ensure that the overseas base is capable of addressing their medical needs. Dr. Richard Stahlman, chief of the medical staff at Edwards Air Force Base, approved the Holt family's command-sponsored travel to Spain. The district court found that Dr. Stahlman knew Mrs. Holt was pregnant and had experienced two prior preterm deliveries and a miscarriage at the time he cleared her for overseas travel.

In March 2005, when Mrs. Holt was approximately twenty weeks pregnant, the family relocated to Spain. There, Mrs. Holt was treated by Dr. Dennis Szurkus, a specialist in obstetrics and gynecology at Naval Hospital Rota. During an ultrasound appointment on May 11, 2005, Dr. Szurkus determined that Mrs. Holt was exhibiting signs of preterm labor and had her transferred by ambulance to an off-base hospital—Puerto Real Hospital—where she underwent an emergency cesarean section. S.H. was born on May 12, at approximately 31 weeks gestation. She had difficulty eating and breathing and was kept in the neonatal intensive care unit for seventeen days.

In the months following S.H.'s birth, the Holts saw several doctors in Spain regarding her medical issues and expressed concern that S.H. was not developing like her two older siblings, both of whom were also born preterm. Doctors told the Holts that S.H. had strabismus, poor head control, low tone in her abdominal muscles, and significant motor and developmental delays.

S.H. also experienced seizure-like symptoms, for which she was prescribed phenobarbital. When she was approximately five months old, S.H. underwent an MRI, which showed periventricular leukomalacia, an injury to the white matter of her brain.

At around nine months of age, S.H. was evaluated by a neurologist, Dr. Lisa Smith, who found that S.H. had abnormally brisk reflexes and a mild increase in dynamic tone in her lower extremities. Dr. Smith did not rule out cerebral palsy at that time but declined to render a diagnosis. Two other doctors in Spain did conclude that S.H. had cerebral palsy.¹

The family returned to the United States in mid-2006. Late that year, S.H. was diagnosed with tetraplegia of all four extremities. At the age of two, while living in South Carolina, S.H. was definitively diagnosed with cerebral palsy. It is undisputed that S.H.'s premature birth was the cause of her cerebral palsy.

B

In June 2006, while the Holts were still in Spain, they filed an administrative claim seeking damages from the government for S.H.'s "catastrophic neurological injuries, seizures, learning deficits, physical limitations," and "cerebral palsy." They alleged that these injuries resulted from the negligent approval of Mrs. Holt's command-sponsored travel overseas. The administrative claim was denied.

Having exhausted administrative remedies, the Holts filed the instant action in district court. The government unsuccessfully moved for summary judgment, contending that the FTCA's foreign country exception barred the Holts' medical malpractice claims. Following a bench trial, the court awarded the Holts $10,409,700 in damages. The government filed a motion to alter or amend the judgment under Fed. R. Civ. P. 59(e). The court granted the motion in part but ultimately declined to alter the damages award. The government timely appealed the amended judgment and all related interlocutory orders.

II

We review a district court's findings of fact following a bench trial for clear error. Kohler v. Presidio Int'l, Inc. , 782 F.3d 1064, 1068 (9th Cir. 2015). However, "[w]hether the United States is immune from liability in a FTCA action is a question of federal law subject to de novo review." Montes v. United States , 37 F.3d 1347, 1351 (9th Cir. 1994) (italics omitted).

The FTCA generally waives the United States' sovereign immunity from suits in tort, "render[ing] the Government liable in tort as a private individual would be under like circumstances." Richards v. United States , 369 U.S. 1, 6, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962) ; see also 28 U.S.C. § 2674. But that waiver is subject to certain exceptions. See generally 28 U.S.C. § 2680. Under the foreign country exception, the FTCA's waiver of immunity does not apply to "[a]ny claim arising in a foreign country." Id. § 2680(k).

In Sosa , the Supreme Court held that the foreign country exception "bars all claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred." 542 U.S. at 712, 124 S.Ct. 2739. The Court noted that the foreign country exception codified Congress' "unwilling[ness] to subject the United States to liabilities depending upon the laws of a foreign power." Id. at 707, 124 S.Ct. 2739 (alteration in original) (quoting United States v. Spelar , 338 U.S. 217, 221, 70 S.Ct. 10, 94 L.Ed. 3 (1949) ). At the time the FTCA was passed, "the dominant principle in choice-of-law analysis for tort cases was lex loci delicti : courts generally applied the law of the place where the injury occurred." Id. at 705, 124 S.Ct. 2739. Accordingly, the Court concluded that Congress likely intended the phrase "arising in" to have the same meaning in § 2680(k) as it did in state choice-of-law statutes: that is, to "express the position that a claim arises where the harm occurs." Id. at 711, 124 S.Ct. 2739.²

The question at the center of this appeal is where S.H.'s injury was "suffered" for the purposes of the foreign country exception. Id. at 712, 124 S.Ct. 2739. The Sosa opinion offers various formulations of lex loci delicti , but provides little guidance on this specific issue. See, e.g. , id. at 705, 124 S.Ct. 2739 (claim arises "where the last act necessary to establish liability occurred; i.e. , the jurisdiction in which injury was received" (quoting John W. Ester, Borrowing Statutes of Limitation & Conflict of Laws , 15 U. Fla. L. Rev. 33, 47 (1962))); id. at 706, 124 S.Ct. 2739 ("the place where the harmful force takes effect upon the body" (quoting Restatement (First) of Conflict of Laws § 377, n.1 (1934) (emphasis omitted))). In the ordinary case, an injury will be experienced in the same place it is inflicted, thereby obviating the need for further analysis. See, e.g. , id. at 698, 124 S.Ct. 2739 (seeking damages for false arrest in Mexico). However, the inquiry becomes more complicated when, as in this case, plaintiffs allege injuries manifesting after the initial infliction of harm.

The district court concluded that state accrual law should determine where an injury is suffered. Relying on California law, it held that S.H.'s cerebral palsy occurred in the United States because it was not until the Holts arrived in South Carolina that doctors could identify S.H.'s symptoms as cerebral palsy. But as we have previously noted, "[q]uestions of...