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Sovereign Immunity

SOVEREIGN IMMUNITY

The legal protection that prevents a sovereign state or person from being sued without consent.

Ali v. Federal Bureau of Prisons

The federal government possesses sovereign immunity , a legal principle that makes the government immune from lawsuits seeking monetary damages. However, the government may, at its discretion, waive sovereign immunity in particular circumstances, while retaining immunity for other claims. The FEDERAL TORT CLAIMS ACT (FTCA), 28 U.S.C.A. 1346, waives the federal government's sovereign immunity in certain circumstances to permit persons to sue it for damages. The act also contains a number of exceptions and limitations. The Supreme Court, in Ali v. Federal Bureau of Prisons,—U.S.—, 128 S.Ct. 831,—L.Ed.2d—(2008), considered whether a federal prisoner could sue under the FTCA for the value of personal possessions that he claimed were taken when his possessions were shipped to his new prison. A closely divided Court ruled that he could not sue because a provision of the FTCA (2680(c)) that bars a claim arising in respect to “detention of any goods, merchandise, or other property by any officer of customs or excise or any other law enforcement officer.” The majority held that the phrase “or any other law enforcement officer” immunized the government from any claims based on the negligence or wrongful acts of all federal law enforcement officers. The dissenting justices objected to the way the majority applied rules of statutory interpretation, believing that Congress only meant to immunize those employees who work in customs or excise positions.

The amount of money in question in this case was very small, but the impact of the ruling will be large. Abdus-Shahid M.S. Ali was a federal prisoner at the U.S. Penitentiary in Atlanta, Georgia. In December 2003 he was scheduled to be moved to the U.S. Penitentiary Big Sandy in Inez, Kentucky. Before his transfer Ali left two duffel bags containing his personal property in the Georgia facility's discharge unit, where it was to be inventoried, packaged, and shipped to the Kentucky prison. When his bags arrived Ali discovered that several items were missing. These items had religious and nostalgic significance, with Ali valuing the lost items as worth $177. The staff at the Kentucky prison said that he had been given everything that had been sent and said he could file a claim. Ali filed an administrative tort claim. Prison officials denied his claim, ruling that when he signed the receipt form he had certified the accuracy of the listed inventory items and had waived his right to make a claim. Ali then filed an action in U.S. district court , alleging that prison officials had violated the FTCA. The federal Bureau of Prisons (BOP) argued that his claim was barred by the exception in 2680(c) for property claims against law enforcement officers. The district court agreed and dismissed the FTCA claim. The Eleventh Circuit Court of Appeals upheld the district court's interpretation of 2680(c).

The Supreme Court agreed to hear Ali's appeal because other circuit courts of appeals were in conflict over the proper scope of 2680(c). The Supreme Court, in a 5-4 decision, upheld the broad interpretation of 2680(c) made by the Eleventh Circuit. Justice Clarence Thomas, writing for the majority, stated that the case turned on whether the BOP officers who allegedly lost Ali's property qualified as “other law enforcement officer[s]” within the meaning of 2680(c). Ali argued that the law enforcement officers referenced in the provision included only those who act in a customs or excise capacity. The law referenced customs and excise activities in the disputed provision as well as in the preceding clause, so the entire subsection focuses on preserving sovereign immunity only as to officers enforcing those laws.

Justice Thomas rejected this argument. The phrase “any other law enforcement officer” suggested a “broad meaning.” He noted that the Court had previously read the word “any” to have an expansive meaning. Therefore, Congress' use of “any” to modify “other law enforcement officer” is “most naturally read to mean law enforcement officers of whatever kind.” He acknowledged that the customs and excise references were meant to preserve immunity for claims against those who enforce custom and tax laws, but “there was no indication that Congress intended immunity for those claims to turn on the type of law being enforced.”

Ali asserted that two canons of construction for the interpretation of statutes supported a narrow scope for 2680(c) immunity. The canon known as ejusdem generis states that when a general term follows a specific term, the general term should be understood as a reference to subjects similar to the one with the specific term. Read this way, the “any other law enforcement officers” phrase was a general term that was tied to the customs and excise officers specific term. Justice Thomas disagreed, finding the canon inapplicable. There was no list of specific terms, separated by commas, and followed by a general or collective term. Instead, the clause contained one specific category and one general category. Ali also claimed that the canon known as noscitur a sociis supported his argument. This phrase states that “a word is known by the company it keeps.” Justice Thomas dismissed this claim as well, finding that there were no strong contextual clues to prove that the provision was meant to focus exclusively on custom and excise officers.

Justice Anthony Kennedy, in a dissenting opinion joined by Justices John Paul Stevens, David Souter, and Stephen Breyer, lamented the failure of the majority to properly use the canons of construction as interpretive tools. The Court's analytical framework would now be used by the lower courts when faced with “other cases in which a series of words operate in a clause similar to the one” in question. A proper application of the canons demonstrated that Congress never intended the provision to grant immunity to all law enforcement officers.

35W Bridge Collapse Liability Issues

When the I-35W bridge collapsed into the Mississippi River and adjoining river banks in downtown Minneapolis, Minnesota on August 1, 2007, the immediate focus was on rescuing those unfortunate individuals who were on the span. In the days afterwards it became apparent that the victims of the bridge collapse and their families would seek compensation for their injuries and for the deaths of their loved ones. Thirteen people were killed that summer evening and 145 people suffered injuries. Not surprisingly, personal injury lawyers became involved almost immediately. However, within a short time, a group of prominent Minnesota lawyers agreed to represent bridge victims for no compensation.

The victims and their families faced a major problem in obtaining compensation: Minnesota law limits the state's liability for tort actions to $300,000 per victim and $1 million total for an incident, regardless of the number of victims. The state created these limitations under its tort claims statute, which waives sovereign immunity in some cases. Some lawyers continued to look into whether the architects, engineers and constructors, and private inspectors of the 35W bridge could be held liable for negligence. However, state investigators and the National Transportation Safety Board (NTSB) refused to share information with the lawyers. The victims and their families placed their energies in having the Minnesota legislature enact a victims' compensation fund.

The 35W bridge was an eight-lane steel truss arch bridge completed in 1967. Carrying 140,000 vehicles daily, the bridge was maintained by the Minnesota Department of Transportation (MnDOT). Since 1993, the bridge was inspected annually by MnDOT, although no inspection report was completed in 2007, as reconstruction of the bridge deck was underway. In the years prior to the collapse, several reports cited problems with the bridge structure. In 1990, the federal government gave the bridge a rating of “structurally deficient,” pointing to significant corrosion in its bearings. “Structurally deficient” is a classification term which does not in itself indicate a lack of safety. Approximately 75,000 other U.S. bridges had this classification in 2007.

More troubling was a 2001 University of Minnesota study. Cracking had been previously

discovered in the cross girders at the end of the approach spans. The main trusses connected to these cross girders and resistance to motion at the connection point bearings was leading to stress cracking. MnDOT had addressed this issue prior to the study by drilling into the cracks to prevent further propagation and adding support struts to the cross girder. The university study also noted a concern about lack of redundancy in the main truss system: the bridge had a greater risk of collapse in the event of any single structural failure. In 2005, the federal government again rated the bridge as “structurally deficient” and in possible need of replacement. The day after the bridge collapsed, Minnesota Governor Tim Pawlenty revealed that the bridge had been scheduled to be replaced in 2020.

In January 2008 the NTSB announced that it had determined that the bridge's design-specified steel gusset plates, which were used to connect girders together in the truss structure, were undersized and inadequate to support the intended load of the bridge, a load which had increased over time. However, a final report from the NTSB was months away from completion.

The information surrounding MnDOT's inspection and maintenance of the bridge upset many state legislators, some of whom resolved to create a victims compensation fund. In May 2008 Governor Pawlenty signed a $38 million package to compensate victims for their injuries and losses. The law created two pools of money. The first pool covers everyone who was on the bridge when it fell. These individuals may be compensated up to $400,000. Individuals whose injuries and losses were more severe can apply for additional money from a pool of $12.6 million. A panel of three lawyers, appointed by the Chief Justice of the Minnesota Supreme Court, will serve as special masters and determine the exact amount for each victim. Victims who accept money from the funds must agree to waive all legal claims against the state.

Lawyers involved in the bridge litigation noted that victims were treated differently than victims who applied to the federal 9/11 compensation fund. Unlike the 9/11 victims, who had to waive all claims against third parties (private businesses) before receiving compensation, the 35W bridge victims did not. Second, bridge victims have the option of rejecting the award proposed by the three-lawyer panel. Bridge claimants must file by October 15, 2008 to be eligible for an award and all offers will be made by February 28, 2009. It is expected that most victims will accept compensation from the fund because of the state's sovereign immunity and the fact that the statutes of limitations have expired for most potential third-party.

In Re: Katrina Canal Breaches Consolidated Litigation

The devastation wrought by Hurricane Katrina to the city of New Orleans on August 29, 2005 was dramatically amplified when several of the levees that protected the city were breached. Thousands of families lost their homes and many businesses lost their buildings, equipment, and inventory. Many homeowners have sought to have their insurance carriers pay for the storm destruction but the insurance companies have, on the whole, persuaded state and federal courts that their policies did not cover the damages caused by the storm surge.

Other homeowners and businesses have filed claims against the federal government's Army Corps of Engineers, which built and maintains the levees, and against the city and the state of Louisiana. These plaintiffs have contended that negligence by government agencies at all levels led to the breaching of the levees and most of the destruction attributed to Katrina. However, lawsuits against state and federal governments are limited by the doctrine of sovereign immunity , which bars suits for damages against governmental entities. State and federal governments may, on their own, grant exceptions to sovereign immunity, such as the Federal Torts Claim Act, but they are not required to do so.

As part of the lawsuit named In Re: Katrina Canal Breaches Consolidated Litigation, plaintiffs alleged that the Corps of Engineers should be held liable for the breaches of the levees. Whether the Corps could be held liable was a significant legal issue. By January 2008, the Corps had received 489,000 claims forms. The forms provided notice to the Corps that the person planned to participate in a damage lawsuit against the federal agency. The claims totaled more than $3 quadrillion. The plaintiffs also sued the Orleans Parish Levee Board and the New Orleans Sewerage and Water Board. These boards are not automatically immune from damage lawsuits because they are part of municipal governments. However, they may be able to show a qualified immunity that will prevent a damages lawsuit from going forward.

The federal government sought to dismiss the Corps from the lawsuit, asserting that Congress had specifically granted immunity to the Corps for flood control projects. The plaintiffs argued that the three drainage canals in question, including the 17th Street Canal that allegedly accounted for 80 percent of the flooding in downtown New Orleans, had at one time been navigation channels. Judge Stanwood Duval of the federal district court in Louisiana, who oversees the consolidated litigation, issued a ruling in January 2008 that agreed with the government that the Corps of Engineers was immune. He noted that the Flood Control Act of 1928 gave the Corps and other federal agencies absolute immunity for actions involving flood projects. Duval cited 1986 and 2001 decisions by the Supreme Court that found the law “provides immunity, where, as here, a flood control project fails to control floodwaters because of the failure of the flood control project itself.” As to the claim the canals had been used for navigation at one point, Duval ruled that once the canals and levee walls became part of the Lake Pontchartrain and Vicinity hurricane protection project, the 1928's immunity provision became effective.

Though Judge Duval ruled in the federal agencies favor, he did not disguise his anger at Congress and the Corps of Engineers for their actions over the last 50 years. He stated that “Millions of dollars were squandered in building a levee system with respect to these outfall canals which was known to be inadequate by the Corp's own calculations.” The federal government, while immune for its actions, was not immune from “posterity's judgment concerning its failure to accomplish what was its task.” The judge went on to note that sovereign immunity forgave any government action concerning the levees, whether it was a simple mistake or “gross incompetence.” Duval suggested that Congress act to pay the victims of the levee failures.

Though the lawsuit could proceed against the local levee boards, other parts of the litigation continued to move forward. Judge Duval, in 2007, allowed plaintiffs from eastern New Orleans, the Lower 9th Ward, and St. Bernard Parish to sue the Corps of Engineers for defects in the Mississippi River-Gulf Outlet (MR-GO) navigation channel because the channel was a navigation channel not covered by the 1928 federal law. The lawsuit is scheduled for trial in September 2008. In addition, another class action suit is pending before the U.S. Court of Federal Claims in Washington, D.C. These plaintiffs contend that the construction of the MR-GO canal deprived St. Bernard Parish landowners of their land's value because of erosion and the increased effects of hurricanes.

Republic of the Philippines v. Pimentel

The U.S. Supreme Court in June 2008 concluded that a case involving millions of dollars invested in a New York account by former Philippine President Ferdinand Marcos could not proceed without the Philippines as a party to the case. The suit was originally brought by human rights victims who had received a $2 billion judgment against the Marcos family in 1995. The Philippine government reportedly expected a quick resolution of the dispute by its country's own courts.

Marcos became president of the Republic of the Philippines in 1965 after serving in the Philippine Senate for about six years. He remained in the office of the presidency for 21 years. Marcos was decried in both his own country and abroad due to his crimes and many acts of wrongdoing in the form of human rights violations. His ultimate undoing was caused in large part by his investment of hundreds of millions of dollars in the United States. During the so-called People Power Revolution, millions of Philippine citizens engaged in a series of nonviolent protests that ultimately resulting in overthrowing Marcos' regime in 1986.

Marcos was elected in national elections in 1965 and 1969. In 1972, however, Marcos used Communist and Muslim threats to justify his declaration of martial law, which effectively gave him complete power in the country. During the same year, he incorporated an entity named Arelma, S.A. Arelma subsequently opened an account with Merrill Lynch in New York and deposited a total of $2 million. By 2000, this account was worth between $35 and $37 million.

Once Marcos fled the Philippines in 1986, the Philippine government established a commission to recover property that Marcos had wrongfully taken during his presidency. One of the commission's first acts was to ask the Swiss government for its assistance in recovering assets that Marcos may have transferred to Switzerland. The Swiss government agreed to freeze assets, and in 1990, the Swiss Supreme Court upheld the freeze. The commission then asked a Philippine court of special jurisdiction known as the Sandiganbayan to declare that any money that Marcos obtained through misuse of his office to be forfeited to the Republic. The case has been pending in the Philippine court for more than a decade.

In 1995, a group of 9,539 human rights victims brought suit against Marcos' estate. The group brought a class action suit in the U.S. District Court for the District of Hawaii, and the court awarded the group a $2 billion judgment. In subsequent actions, the class was awarded the right to attach various assets, and the class sought to attach the assets of the Arelma account with Merrill Lynch. The Philippine commission, however, claimed that the Philippine government had a right to those assets by virtue of a 1955 law.

The Swiss government returned assets held in Switzerland to the Philippines, and the commission established an escrow account at the Philippine National Banc (PNB) to hold the funds until the Philippine court could determine who the rightful owner of the funds was. Both the Philippine government and the commission requested that Merrill Lynch also transfer funds to this escrow account, but Merrill Lynch refused. Merrill Lynch instead filed an interpleader action, naming as defendants the Philippine Republic, the commission, Arelma, the PNB, and the class of human rights victims.

The Judicial Panel on Multidistrict Litigation consolidated the various human rights complaints in the District of Hawaii. The panel appointed Judge Manuel Real of the U.S. District Court for the Central District of California to preside over the case. Both the Philippine government and the commission claimed that they were immune from suit under the Foreign Sovereign Immunity Act of 1976 (FSIA), 28 U.S.C. 1604. The Republic and the commission sought to dismiss the action under Rule 19(b) of the Federal Rules of Civil Procedure (FRCP), which establishes the guidelines under which a court should dismiss an action when joinder of a required party is not feasible. The district court allowed the case to proceed, but the Ninth Circuit Court of Appeals reversed, ruling that the Republic and the commission were necessary parties to the case. In re Republic of the Philippines, 309 F.3d 1143 (9th Cir. 2002).

On remand, the district court again concluded that the case could proceed even without the Republic and the commission as parties. According to the district court, these parties had little chance to succeed in establishing their claims. On appeal, the Ninth Circuit affirmed the district court's decision, agreeing with the district court that the Republic and the commission would have difficulty prevailing at the trial. The appellate court thus held that even though these were required parties under Rule 19(a) of the FRCP, dismissal was not mandated under Rule 19(b).

The Republic sought a writ of certiorari with the U.S. Supreme Court. The U.S. government supported the petition, with the Solicitor General arguing that the Ninth Circuit's ruling had effectively deprived the Philippine government of the benefits of sovereign immunity. Moreover, the U.S. government stressed that the decision had raised difficult foreign policy questions. On December 3, 2007, the Court granted the petition to address the following issue: “Whether a foreign government that is a ‘necessary’ party to a lawsuit under Rule 19(a) and has successfully asserted sovereign immunity is, under Rule 19(b), an ‘indispensable’ party to an action brought in the courts of the United States to settle ownership of assets claimed by that government.”

In an opinion by Justice Anthony Kennedy, the Court reversed the Ninth Circuit. According to Kennedy, the Ninth Circuit did not give sufficient weight to all of the factors listed in Rule 19(b) of the FRCP. The Court determined that the Republic and the commission would be prejudiced if the case proceeded without these parties, and the Court concluded that the Ninth Circuit had not considered this factor carefully enough. The Court likewise concluded that the Ninth Circuit had failed to consider the appropriate facts when weighing other factors, such as whether the lower court could have lessened or avoided the prejudice by consider an alternative other than dismissal. Based on the Ninth Circuit's errors in applying Rule 19(b), the Court reversed the lower court's decision and remanded the case to the Ninth Circuit to instruct the district court to dismiss the action.

Justice John Paul Stevens concurred in part and dissented in part. He agreed that the Ninth Circuit erred in its analysis under Rule 19(b), but he did not agree that the Court should order dismissal of the case. Justice David Souter likewise concurred in part and dissented in part, arguing that the Court should stay the proceedings in the U.S. court pending the outcome of the case in the Philippine court.

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