Novins v. United States acting through the Department of Health and Human Services.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

NICOLE MORETTI, and WENDY Case No. 3:21-cv-1525-SI

NOVINS, as Personal Representative of the

Estate of SAYLOR MORETTI, deceased, OPINION AND ORDER

Plaintiffs,

v.

LETTY OWINGS CENTER, CENTRAL

CITY CONCERN, and the UNITED

STATES acting through the DEPARTMENT

OF HEALTH AND HUMAN SERVICES,

Defendants.

Karl G. Anuta, LAW OFFICE OF KARL G ANUTA PC, 735 SW First Avenue, 2nd Floor, Portland,

OR, 97204. Of Attorneys for Plaintiffs.

Lindsey H. Hughes and Trent J. Andreasen, KEATING JONES HUGHES PC, 200 SW Market Street,

Suite 900, Portland, OR, 97201; and Matthew S. Freedus and Rosie Dawn Griffin, FELDESMAN

TUCKER LEIFER FIDELL LLP, 1129 20th Street NW, Suite 400, Washington, D.C., 20036.

Of Attorneys for Defendants Letty Owings Center and Central City Concern.

Natalie K. Wight, United States Attorney, and Michael J. Jeter, Assistant United States Attorney,

UNITED STATES ATTORNEY’S OFFICE, 1000 SW Third Avenue, Suite 600, Portland, OR, 97204.

Of Attorneys for Defendants United States.

Michael H. Simon, District Judge.

This case arises from the death of Saylor Moretti, an infant. Plaintiffs are Nicole Moretti

(Saylor’s mother) and Wendy Novins (personal representative of Saylor’s estate). Plaintiffs

allege that Saylor’s death resulted from the negligence of employees of Central City Concern and

the Letty Owings Center (Letty Owings) (collectively, the Center). Plaintiffs further allege that

the United States is liable for the Center’s negligence under the Federally Supported Health

Centers Assistance Act (FSHCAA) and the Federal Tort Claims Act (FTCA). Plaintiffs sue both

the United States and the Center. The Center moves to substitute the United States as the sole

Defendant, which the United States opposes. The United States also moves under Rule 12(b)(1)

of the Federal Rules of Civil Procedure to dismiss all claims asserted against the United States

for lack of subject matter jurisdiction. For the reasons discussed below, the Court GRANTS the

Center’s motion to substitute and GRANTS in part and DENIES in part the United States’

motion to dismiss.

STANDARDS

A. Motion to Dismiss for Lack of Subject Matter Jurisdiction

Federal courts are courts of limited jurisdiction. Gunn v. Minton, 568 U.S. 251, 256

(2013) (quotation marks omitted). As such, a court is to presume “that a cause lies outside this

limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting

jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations

omitted); see also Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009); Safe Air for

Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A defense of lack of “subject-matter

jurisdiction, because it involves a court’s power to hear a case, can never be forfeited or waived.”

United States v. Cotton, 535 U.S. 625, 630 (2002). An objection that a particular court lacks

subject matter jurisdiction may be raised by any party, or by a court on its own initiative, at any

time. Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); Fed. R. Civ. P. 12(b)(1). The Court

must dismiss any case over which it lacks subject matter jurisdiction. Fed. R. Civ. P. 12(h)(3);

see also Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (noting that when a court lacks

subject matter jurisdiction, meaning it lacks the statutory or constitutional power to adjudicate a

case, the court must dismiss the complaint, even sua sponte if necessary).

A motion under Rule 12(b)(1) to dismiss for lack of subject matter jurisdiction may be

either “facial” or “factual.” See Safe Air for Everyone, 373 F.3d at 1039. A facial attack on

subject matter jurisdiction is based on the assertion that the allegations contained in the

complaint are insufficient to invoke federal jurisdiction. Id. “A jurisdictional challenge is factual

where ‘the challenger disputes the truth of the allegations that, by themselves, would otherwise

invoke federal jurisdiction.’” Pride v. Correa, 719 F.3d 1130, 1133 n.6 (9th Cir. 2013) (quoting

Safe Air for Everyone, 373 F.3d at 1039)). For facial attacks, the Court resolves the Rule 12(b)(1)

motion “as it would a motion to dismiss under Rule 12(b)(6).” Leite v. Crane Co., 749 F.3d

1117, 1121 (9th Cir. 2014). In “determin[ing] whether the [plaintiff’s] allegations are sufficient

as a legal matter to invoke the court’s jurisdiction,” the Court “[a]ccept[s] the plaintiff’s

allegations as true and draw[s] all reasonable inferences in the plaintiff’s favor.” Id.

B. FTCA

Unless it waives sovereign immunity, the United States is immune from suit. United

States v. Mitchell, 445 U.S. 535, 538 (1980). The FTCA provides federal courts with jurisdiction

over “claims against the United States . . . 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). In the FTCA, Congress waived “the United

States’ sovereign immunity for claims arising out of torts committed by federal employees.” Ali

v. Fed. Bureau of Prisons, 552 U.S. 214, 217-18 (2008). A claimant may not bring an action in

federal court under the FTCA’s waiver of sovereign immunity, however, until the claimant has

exhausted the FTCA’s administrative remedies. McNeil v. United States, 508 U.S. 106, 113

(1993) (“FTCA bars claimants from bringing suit in federal court until they have exhausted their

administrative remedies.”); see also Cadwalder v. United States, 45 F.3d 297, 300 (9th

Cir. 1995) (stating that the FTCA “administrative claim prerequisite is jurisdictional”). The

FTCA establishes that a tort claim against the United States is barred if not presented to the

appropriate federal agency within two years of accrual or brought in within six months of from a

final written denial by the federal agency.

The FTCA also expressly retains immunity from some tort liability through a number of

statutory exceptions. 28 U.S.C. § 2680. If one of those exceptions applies, a court lacks subject-

matter jurisdiction to hear a claim. See Simmons v. Himmelreich, 578 U.S. 621, 626 (2016)

(“[D]istrict courts do not have jurisdiction over claims that fall into one of the 13 categories of

‘Exceptions’ because ‘section 1346(b) of this title’—the provision conferring jurisdiction on

district courts—does ‘not apply’ to such claims.”). The discretionary function exception provides

that the FTCA’s waiver of sovereign immunity does not apply to “[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.” 28 U.S.C. § 2680(a). “Because the purpose of the exception is to prevent

judicial second-guessing of legislative and administrative decisions grounded in social,

economic, and political policy through the medium of an action in tort, when properly construed,

the exception protects only governmental actions and decisions based on considerations of public

policy.” United States v. Gaubert, 499 U.S. 315, 323 (1991) (cleaned up). “The FTCA was

created by Congress with the intent to compensate individuals harmed by government

negligence, and as a remedial statute, it should be construed liberally, and its exceptions should

be read narrowly.” Terbush v. United States, 516 F.3d 1125, 1135 (9th Cir. 2008) (quotation

marks omitted). “The United States bears the burden of proving the applicability of the

discretionary function exception.” Bailey v. United States, 623 F.3d 855, 859 (9th Cir. 2010).

C. FSHCAA Immunity

The Ninth Circuit has described immunity under 42 U.S.C. § 233(a) as follows:

The FSHCAA provides that health centers that receive funding

under § 330 of the Public Health Service Act (“PHSA”), 42 U.S.C.

§ 254b (“§ 330”), may be deemed PHS employees. 42 U.S.C.

§ 233(g). PHS employees are granted immunity from certain

claims arising out of their performance of “medical, surgical,

dental or related functions.” 42 U.S.C. § 233(a). When § 233

immunity applies, the United States is substituted as the defendant

and the action proceeds as one brought under the Federal Torts

Claims Act (“FTCA”), 28 U.S.C. §§ 2671-2680.

* * *

Under § 233(a), actual PHS employees, whether commissioned

officers or employees of the Public Health Service, qualify for

immunity under the FTCA for damages resulting from the

performance of medical, surgical, dental, or related functions while

acting within the scope of their office or employment. Congress

extended the protection provided to actual PHS employees in

§ 233(a) to “deemed” PHS employees under § 233(g). 42 U.S.C.

§ 233(g)(1)(A) (establishing that for entities deemed to be PHS

employees “[t]he remedy . . . shall be exclusive of any other civil

action or proceeding to the same extent as the remedy against the

United States”). An entity must be “deemed” an employee of the

PHS by the HHS to receive such protection. The HHS makes this

determination after reviewing an entity’s application and assessing

whether it meets certain qualifications.

Friedenberg v. Lane Cnty., 68 F.4th 1113, 1118, 1125 (9th Cir. 2023) (cleaned up) (footnotes

omitted) (alterations in original). “Congress enacted the FSHCAA to prevent these community

health centers from having to use their federal funds to purchase costly medical malpractice

insurance, which is one of the most significant expenses for health centers.” Id. at 1124-25

(quotation marks omitted).

The Secretary’s annual “deeming” determination does not “conclusively establish PHSA

and FTCA coverage with respect to a particular lawsuit when . . . an action is brought against a

physician affiliated with a federally funded health center. Rather, coverage hinges on the

circumstances in which care has been provided.” O’Brien v. United States, 56 F.4th 139, 148-49

(1st Cir. 2022). For patients of the health center, however, “coverage is straightforward: the

Secretary’s ‘deeming’ determination ‘appl[ies] with respect to services provided’ to ‘all patients

of the entity.’” Id. at 149 (alteration in O’Brien) (quoting 42 U.S.C. § 233(g)(1)(B)(i)). Further,

coverage is not limited to patients. Deemed PHS employees are covered for actions that “include

claims regarding services provided to all patients of the entity, and in limited circumstances to

non-patients. While the claim must result from the performance of these services, the claimant

need not be a patient nor a recipient of medical or dental care for a deemed PHS employee to

invoke § 233 immunity.” Friedenberg, 68 F.4th at 1126 (quotation marks and citation omitted).

There are limitations on the extent of deeming. See 42 U.S.C. § 233(g)(1)(B) (describing

scope of deeming). Even when an entity has been deemed a PHS employee, that deeming does

not necessarily apply to all the entity’s activities. Sherman by & through Sherman v. Sinha, 843

F. App’x 870, 873 (9th Cir. 2021). Only services related to the deemed entity’s grant-supported

activity fall within deeming. 42 C.F.R. § 6.6(d). When a health center’s conduct is deemed, it

enjoys the same immunity from suit as do PHS employees. 42 U.S.C. § 233(g)(1)(A).

BACKGROUND

Because the government filed a facial motion to dismiss, the Court accepts as true the

facts alleged in Plaintiffs’ amended complaint and draws all reasonable inferences in Plaintiffs’

favor. For the Center’s motion to substitute, the Court reviews materials outside the record.

Central City Concern has 19 facilities and provides primary medical, pharmacy, enabling,

and mental health and psychiatry services to people experiencing homelessness in the Portland

metropolitan area. Letty Owings is a residential center providing enabling services1 and

treatment for substance abuse disorders. This includes women who are pregnant or have young

children. The parties do not dispute that the Center was funded through the FSHCAA and that

the Center was a deemed facility under the statute during the relevant time.

Ms. Moretti became an in-patient resident at the Letty Owings on August 8, 2019. On

September 7, 2019, while a resident at the Center, Ms. Moretti gave birth to her son, Saylor, at an

outside medical facility. After the birth, she and Saylor returned to the Center, where they slept

in Ms. Moretti’s room each night. Plaintiffs contend that the Center was responsible for

providing a residential care facility appropriate to the needs of Ms. Moretti and Saylor. On

October 4, 2019, Ms. Moretti co-slept with Saylor in Ms. Moretti’s bed at the Center. While she

was sleeping, “[M]s. Moretti’s weight came to rest or press against Saylor in such a way as to

prevent his adequate breathing and he died as a result.” Am. Compl. ¶ 12 (ECF 19 at 4).

Plaintiffs allege that the Center negligently caused the wrongful death of Saylor. Specifically,

Plaintiffs allege the Center was negligent in failing to monitor the Morettis’ sleeping

arrangements, failing to provide a crib, failing to have an adequate policy to prevent co-sleeping,

failing adequately to staff the facility, failing to train staff, and failing to supervise staff.

1 Enabling services are defined by the United States Department of Health and Human

Services’ Health Resources and Services Administration as “non-clinical services that do not

include direct patient services that enable individuals to access health care and improve health

outcomes.” Martinez, et al., Relationships between Enabling Services use and Access to Care

Among Adults with Cardiometabolic Risk Factors: Findings from the 2014 National Health

Center Patient Survey (BMC Health Serv Res., Mar. 2022).

DISCUSSION

The United States argues that the Center’s motion to substitute is procedurally improper

and duplicative of the government’s motion to dismiss and should be stricken. The United States

also argues that if the motion is not stricken, it should be denied because the United States is not

a proper defendant, as argued in its motion to dismiss. The Court first addresses the Center’s

motion to substitute and then addresses the United States’ motion to dismiss. Because there are

some overlapping arguments between the two motions, the Court discusses those arguments as

appropriate.

A. Motion to Substitute

1. Court’s Ability to Decide Substitution

The government argues that the Center’s motion is procedurally improper, it has no legal

standards by which the Court can decide the motion, it is needlessly duplicative of the United

States’ motion to dismiss, and the Court should summarily deny or strike the motion. If the Court

considers the motion, the United States requests that the Court construe it as a cross-motion to

dismiss the Center under Rule 12(b)(1) of the Federal Rules of Civil Procedure.

The Court does not find that the motion is duplicative of the United States’ motion to

dismiss. Although there are some overlapping arguments as to whether the United States is a

proper defendant, the arguments and admissible evidence are not identical. For example, whether

the Center is entitled to immunity under the FSHCAA is not at issue in the United States’ motion

to dismiss and the issues of exhaustion and the discretionary function exception are not at issue

in the Center’s motion to substitute.

For the United States’ procedural arguments, the United States argues that the only

procedure under which it can be substituted is through 28 U.S.C. § 2679, the FTCA’s “scope

certification procedure,” which does not apply in this context. This argument, however, was

rejected by the Supreme Court in Hui v. Castaneda, 559 U.S. 799 (2010).

Because § 233 does not provide a similar mechanism for scope

certification in federal-court actions, respondents contend that PHS

defendants seeking to invoke the immunity provided by § 233(a)

must rely on the FTCA’s scope certification procedure, set forth in

§ 2679(d). . . .

We agree with petitioners that there is no reason to think that scope

certification by the Attorney General is a prerequisite to immunity

under § 233(a). To be sure, that immunity is contingent upon the

alleged misconduct having occurred in the course of the PHS

defendant’s duties, but a defendant may make that proof pursuant

to the ordinary rules of evidence and procedure. . . . Thus, while

scope certification may provide a convenient mechanism for

establishing that the alleged misconduct occurred within the scope

of the employee’s duties, the procedure authorized by § 2679(d) is

not necessary to effect substitution of the United States.

Id. at 810-11 (footnote omitted).

As for whether the Court may generally consider “substitution” or whether the Center is

actually bringing a factual motion under Rule 12(b)(1), the United States’ argument has little

practical effect—either way the result is the same, the United States would be the sole remaining

defendant. The United States is putting form over substance in making this argument.

Additionally, courts repeatedly have rejected the argument that they lack authority to

assess immunity under § 233 and substitute the United States as a defendant over its objection.

See ECF 46 at 8-9 (citing cases). As explained by the Southern District of California:

Mixed in with its analysis of Section 233(l) is the United States’

assertion that the Court lacks the authority to assess the

applicability of Section 233(a)’s immunity provisions to the facts

of this case. The United States fails to cite a single case to support

that argument. To the contrary, in Hui v. Castaneda, the United

States Supreme Court found that although immunity under

Section 233(a) is “contingent upon the alleged misconduct having

occurred in the course of the PHS defendant’s duties, . . . a

defendant may make that proof pursuant to the ordinary rules of

evidence and procedure.” 559 U.S. at 811 (emphasis added). If, as

the United States claims, the Court does not have the ability to

evaluate the applicability of Section 233(a)’s immunity provisions,

then to whom would a defendant “make that proof pursuant to the

ordinary rules of evidence and procedure?” The Court finds Hui to

be controlling on the issue of the Court’s ability to determine the

applicability of Section 233(a)’s immunity protections and, if

necessary, to “effect substitution of the United States.” 559 U.S.

at 811. That the Court must do so “based on the ordinary rules of

evidence and procedure” is made simple in this case because, as set

forth below, the operative facts are not in dispute.

C. K. v. United States, 2020 WL 6684921, at *4 (S.D. Cal. Nov. 12, 2020) (citations and footnote

omitted) (alteration and emphasis in original); see also Ford v. Sandhills Med. Found., Inc., 2022

WL 1810614, at *4 (D.S.C. June 2, 2022) (concluding that the defendant health entity “is entitled

to immunity from suit and to substitution of the United States as the defendant if this suit

concerns actions or omissions within the scope of its employment as a deemed federal

employee” and that the procedure is appropriate under § 233(a)); Kezer v. Penobscot Cmty.

Health Ctr., 2019 BL 141566, at *9 (D. Me. Mar. 21, 2019) (analyzing the relevant statutes and

caselaw and concluding that “the lack of a specific mechanism for substitution in § 233 does not

prohibit the Court from ordering substitution as an exercise of its limited jurisdictional

authority”).

Further, in considering the jurisdiction of the district court in the context of the removal

clause of § 233, in an unpublished decision the Third Circuit explained that § 233 must permit a

district court to make determinations of immunity and substitute the United States as a defendant

or it could defeat the purpose of the statute. Est. of Campbell by Campbell v. S. Jersey Med.

Ctr., 732 F. App’x 113, 116-17 (3d Cir. 2018). The Third Circuit found a “limited” implied grant

of subject matter jurisdiction for the district court “to determine ‘the appropriate forum or

procedure’; that is, to decide whether to remand the case or to substitute the United States as a

party and deem the action as one brought under the FTCA. For section 233(l)(2) to have any

effect, a district court must at least have jurisdiction to substitute the United States when it is

appropriate to do so.” Id. The same principle applies in considering immunity and substitution of

the United States when removal is not at issue. For § 233(g)(1)(A) and (F) to have any effect, a

district court must at least have jurisdiction to make determinations of immunity and substitute

the United States when appropriate. Cf. Agyin v. Razmzan, 986 F.3d 168, 184 (2d Cir. 2021)

(stating that under § 233, the employee “is entitled to immunity from suit and to substitution of

the United States as the defendant if this suit concerns actions he took within the scope of his

employment as a deemed federal employee”).

The Court rejects the government’s arguments that the Court lacks the ability to consider

the Center’s motion or that the Court has no legal standards by which to consider the motion.

The Court evaluates immunity as instructed by the Supreme Court—“based on the ordinary rules

of evidence and procedure.” Hui, 559 U.S. at 811. The Court uses those ordinary rules to

determine whether the challenged conduct meets the requirements of 42 U.S.C. § 233(a) that the

conduct was (1) “the performance of medical, surgical, dental, or related functions” (2) by an

employee “acting within the scope of his office or employment.” Additionally, to be eligible for

immunity, the challenged conduct must relate to the grant supported activity on which the Center

received its deemed status. See 42 C.F.R. § 6.6(d).

2. Whether Substitution is Appropriate

Here, the arguments overlap with the United States’ motion to dismiss, and the Court

considers the briefing and arguments from both motions. The United States argues that

substitution is not appropriate because: (1) FSHCAA immunity is limited only to medical

malpractice claims, and the challenged conduct does not constitute medical malpractice;

(2) Saylor was not a patient of the Center and therefore the coverage of the FSHCAA does not

extend to Saylor; and (3) Saylor was not receiving substance abuse disorder treatment and the

alleged negligence did not involve any medical service provided to him or services within the

scope of the grant-funded activity.

After the briefing, the Ninth Circuit decided Friedenberg. The Friedenberg decision

resolves the government’s first two arguments and frames the analysis for the government’s third

argument. The Ninth Circuit rejected the contention that § 233(a) immunity is limited to medical

malpractice claims. Friedenberg, 68 F.3d at 1128 (“While Congress’s concerns regarding

malpractice insurance premiums were the driving force behind the legislation, Congress did not

limit § 233 immunity to ‘only’ malpractice claims when it could have.”). The Ninth Circuit

concluded that “[a]ny other reading would render the ‘related functions’ language in the statute

superfluous.” Id.

As to Saylor’s status as a patient, although if he was a patient who received medical or

related services within the scope of the Center’s grant the question of immunity would be

straightforward, Saylor’s status as a patient is not dispositive. In Friedenberg, the Ninth Circuit

clarified that “Section 233 immunity does not turn on who brings the claim, and neither does it

require that the alleged tort occur during the provision of services. Rather, § 233 immunity

depends on whether the claim arose out of the defendant’s performance of ‘medical, surgical,

dental, or related functions.’” Friedenberg, 68 F.4th at 1118 (emphasis in original) (quoting 42

U.S.C. § 233(a)). Thus, the Court must analyze whether Saylor’s death arose out of the Center’s

performance of medical or related functions. Friedenberg also provides guidance for that

analysis.

In Friedenberg, the plaintiffs alleged that the deemed employees were liable for failing to

report to law enforcement a court-ordered patient’s “refusal to comply with the medical terms of

his probation.” Id. The United States argued that the failure to report was not a medical or related

service. The Ninth Circuit described evaluating a related service as follows:

Plaintiffs’ proposition that § 233 immunity applies only when the

injury occurs “during the provision of medical treatment to a

patient” ignores the statutory text. Such an interpretation would

unduly limit the immunity protection under § 233(a) and render

meaningless the portion of the statute that covers “related” medical

functions.

* * *

We recognize that there are cases that declined to extend § 233

immunity to defendants because the alleged tortious conduct had

nothing to do with the provision of medical services and thus could

not be a “related function.” The alleged tortious conduct here,

however, is not so far removed from medical services that it cannot

qualify as related conduct. Rather, this case approximates the cases

discussed above where district courts found that the tortious

conduct was “related” to the provision of medical services. As in

Mele, where the district court reasoned that a health center’s

termination of a prisoner from a jail diversion program was

“related” to the provision of medical services, here, the

Defendants’ failure to report Bryant’s violations of his treatment

plan to the court was “related” to the provision of medical services.

Further, as in Teresa T. and Z.B., the alleged wrongdoing in this

case is directed at the Defendants’ failure to report Bryant’s

violations of his treatment plan in their capacities as medical

professionals. Indeed, any duty that the Defendants had to report

Bryant’s violations and potential threat to the public was tied to

their status as medical health professionals. In the above cases, the

conduct in question had a distinct connection to the provision of

medical, surgical, or dental services. Such conduct falls within the

ambit of § 233.

In sum, Defendants’ failure to report is intertwined with their

provision of medical services to Bryant, or at the very least, is

“related” to them. Accordingly, we conclude that the tortious

conduct in this case qualifies as a “related function” under

§ 233(a).

Id. at 1129-30 (footnotes and citations omitted).

Ms. Moretti was the Center’s residential treatment patient. Plaintiffs allege that

Ms. Moretti resided at the Center as part of her treatment and that, as a result of her residence

there, the Center had obligations to provide safe sleeping arrangements for both Ms. Moretti and

Saylor. The Center describes services provided to Ms. Moretti as including medical care plus

“additional care from Letty Owings staff related to her post-partum condition and to Saylor’s

interdependent health and wellbeing, including counseling and behavior management related to

safe sleeping.” ECF 32 at 15.

It is undisputed that residential treatment services are the focus of the Center’s grant-

support activities. The Center provides residential treatment to women who are pregnant. These

women will give birth, and the mothers and babies will need to sleep. Providing a minimum level

of safety for mothers in treatment and their newborn babies while they sleep is intertwined with

the provision of residential treatment services, or at a minimum “related” to such services.

The Morettis’ residence at the Center was an aspect of the treatment program in which

Ms. Moretti participated. Any duty that the Center had to prevent co-sleeping arose out of the

patient-provider relationship between Ms. Moretti and the Center. It was tied to the Center

employees’ role as medical health professionals providing residential treatment. The Center’s

acts or omissions related to its alleged duty to prevent co-sleeping are sufficiently intertwined

with its provision of residential treatment services to Ms. Moretti, or at the very least, is “related”

to them. Accordingly, the tortious conduct alleged qualifies as a “related function” under

§ 233(a). Substitution is proper.

3. Conclusion

The Court grants the Center’s motion to substitute. The United States is the proper

defendant. The Court also rejects the United States’ motion to dismiss based on the argument

that the United States is not a proper defendant. The Court next considers the United States’

motion to dismiss based on its remaining arguments.

B. Motion to Dismiss

The United States moves to dismiss on the alternate grounds that the discretionary

function exception applies and that Ms. Moretti’s claims should be dismissed for failure to

exhaust her administrative remedies.2

1. Discretionary Function Exception to FTCA

a. Discretionary Function Test

A two-step test is used to determine whether the discretionary function exception applies.

Terbush, 516 F.3d at 1129 (citing Berkovitz v. United States, 486 U.S. 531, 536-37 (1988)). The

first step is to determine whether the challenged actions “involve an ‘element of judgment or

choice.’” Id. (quoting Gaubert, 499 U.S. at 322). If there is a statute, regulation, or policy that

prescribes a specific course of action, the inquiry ends because the employee “has no rightful

option but to adhere to the directive.” Id. (quoting Berkovitz, 486 U.S. at 536). When there is an

element of choice or judgment, a court moves to the second step of the Berkovitz test. “The

second prong of the Berkovitz test asks whether the challenged action involved a policy

judgment. The exception is meant to protect ‘political, social, and economic judgments’ that are

the unique province of the Government, not all decisions involving some discretion.” Marlys

Bear Med. v. U.S. ex rel. Sec’y of Dep’t of Interior, 241 F.3d 1208, 1214 (9th Cir. 2001).

2 In its reply, the United States made the argument the Ms. Moretti lacked standing, but

the Court declines to consider arguments raised for the first time in reply. See, e.g., Graves v.

Arpaio, 623 F.3d 1043, 1048 (9th Cir. 2010) (noting that “arguments raised for the first time in a

reply brief are waived”); Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (“The district

court need not consider arguments raised for the first time in a reply brief.”).

“For a complaint to survive a motion to dismiss, it must allege facts which would support

a finding that the challenged actions are not the kind of conduct that can be said to be grounded

in . . . policy.” Gaubert, 499 U.S. at 324-25. The court’s inquiry focuses on “the nature of the

actions taken and whether they are susceptible to a policy analysis.” Id. at 325.

b. Analysis

The government argues that the negligent conduct alleged by Plaintiffs is subject to the

discretionary function exception to the FTCA. The government has met the requirements of the

first step of the discretionary function exception by showing that there was no federal statute,

regulation, or policy that specifically prescribed a course of action that the Center was required

to follow to prevent co-sleeping. Because there was no federally mandated course of conduct, the

Center’s actions or omissions “involve[d] an element of judgment or choice.” Terbush, 516 F.3d

at 1129 (quoting Gaubert, 499 U.S. at 322).

Applying the second step, the Court must determine whether the judgments at issue are of

the type that may be subject to a policy analysis. Gaubert, 499 U.S. at 325. “[T]o be protected

from suit, the challenged decision need not actually be grounded in policy considerations, so

long as it is, by its nature, susceptible to a policy analysis.” Nurse v. United States, 226 F.3d 996,

1001 (9th Cir. 2000) (emphasis in original) (quotation marks omitted). The Ninth Circuit “ha[s]

regularly concluded that decisions relating to the hiring, training, and supervision of employees

usually involve policy judgments of the type Congress intended the discretionary function

exception to shield.” Miller v. United States, 992 F.3d 878, 888 (9th Cir. 2021) (quotation marks

omitted); see also Nurse, 226 F.3d at 1001 (stating that “allegedly negligent and reckless

employment, supervision and training . . . . fall squarely within the discretionary function

exception”). The establishment, promulgation, and enforcement of policies, including

establishing priorities, assigning resources, making budget decisions, and assigning personnel,

also generally fall within the discretionary function exception. Nurse, 226 F.3d at 1002.

At the same time, “[t]here are obviously discretionary acts performed by a Government

agent that are within the scope of his employment but not within the discretionary function

exception.” Gaubert, 499 U.S. at 325 n.7. The Ninth Circuit has observed that compliance with

existing policy or professional standards generally is not subject to a policy analysis:

First . . . we have generally held that the design of a course of

governmental action is shielded by the discretionary function

exception, whereas the implementation of that course of action is

not. Second, and relatedly, matters of scientific and professional

judgment—particularly judgments concerning safety—are rarely

considered to be susceptible to social, economic, or political

policy.

Whisnant v. United States, 400 F.3d 1177, 1181 (9th Cir. 2005) (emphasis in original). “The

decision to adopt safety precautions may be based in policy considerations, but the

implementation of those precautions is not” Bear Med., 241 F.3d at 1215. “[S]afety measures,

once undertaken, cannot be shortchanged in the name of policy.” Id. at 1216-17.

There is an exception, however, “where the implementation itself implicates policy

concerns.” Chadd v. United States, 794 F.3d 1104, 1112 (9th Cir. 2015) (emphasis in Chadd)

(quoting Whisnant, 400 F.3d at 1182 n. 3). “Thus, [the Ninth Circuit] has subsequently stated

that so long as a decision involves even two competing policy interests, it is susceptible to policy

analysis and is thus protected by the discretionary function exception.” Id. (cleaned up)

(emphasis in original). Therefore, “at step two of the discretionary-function-exception analysis,

where there is even one policy reason why officials may decide not to take a particular course of

action to address a safety concern, the exception applies.” Id. (emphasis in original).

i. Plaintiffs’ allegations involving policy-makers

Plaintiffs have failed to allege facts that would support a finding that the Center’s alleged

inadequate staffing, failure to have a sufficient co-sleeping policy, and failure to train and

supervise staff were not susceptible to policy analysis. The Ninth Circuit has established that

decisions related to staffing, training, supervision, and promulgation and enforcement of policies

generally are susceptible to policy analysis. Miller, 992 F.3d at 888; Nurse, 226 F.3d at 1001-02.

In response to the government’s motion to dismiss, Plaintiffs argue that the Center failed

to implement its existing policy. This fact, if alleged, might establish that the Center’s conduct

was not the type subject to social, economic, or political policy considerations. This is because

“‘a failure to effectuate policy choices already made’ will not be protected under the

discretionary function exception.” Bear Med., 241 F.3d at 1215 (quoting Camozzi v.

Roland/Miller and Hope Consulting Grp., 866 F.2d 287, 290 (9th Cir. 1989)); see also Summers

v. United States, 905 F.2d 1212, 1215 (9th Cir. 1990) (“[W]here the challenged governmental

activity involves safety considerations under an established policy, rather than the balancing of

competing policy considerations, the rationale for the exception falls away.”). Further, “the

implementation of basic safety measures [is] not a policy-based decision” and is “exempt from

discretionary function analysis.” Bear Med., 241 F.3d at 1215. Plaintiffs did not, however, allege

an existing policy in their amended complaint or a failure to implement basic safety measures.3

Thus, Plaintiffs’ negligence claim based on the Center’s alleged inadequate staffing, failure to

create an adequate co-sleeping policy, and failure to train and supervise staff is dismissed under

the discretionary function exception.

3 Plaintiffs provided extra-record materials, such as the Letty Owings Center Safe Sleep

Protocol dated 10/31/19. The Court may consider materials outside the record for the Center’s

motion to substitute, but not for the government’s facial motion under Rule 12(b)(1).

ii. Plaintiffs’ claim for failure to monitor

The government fails to meet its burden to show that Plaintiffs’ claim based on the

alleged failure to monitor is subject to the discretionary function exception as alleged. This claim

alleges that the Center failed to monitor Ms. Moretti and Saylor while they slept, allowing the

crush death of Saylor. The United States tries to frame this claim as an allocation of staffing or

resources claim—that Plaintiffs are challenging the lack of overnight medical personnel or

insufficient overnight staff. That is not what is alleged in the claim.

A court’s “inquiry into the nature of a decision is not meant to open the door to ex post

rationalizations by the Government in an attempt to invoke the discretionary function shield. . . .

There must be reasonable support in the record for a court to find, without imposing its own

conjecture, that a decision was policy-based or susceptible to policy analysis.” Bear Med., 241

F.3d at 1216 (discussing a claim at summary judgment). Plaintiffs’ failure to monitor claim as

alleged is not directed at the staffing level or the overnight medical staffing policy. Plaintiffs

have other claims challenging policies and staffing levels.

Plaintiff’s failure to monitor claim is directed at the personnel on shift the night Saylor

died, who failed properly to monitor Ms. Moretti and Saylor. A staff member neglecting to

monitor a sleeping patient is not a decision “grounded in economic, social, or political policy.”

United States v. Varig Airlines, 467 U.S. 797, 814 (1984). This is not a claim asserted against

policy makers. This claim involves the implementation of the policies and resource allocations

that generally are the subject of the discretionary function exception. “The Government cannot

claim that both the decision to take safety measures and the negligent implementation of those

measures are protected policy decisions. This argument would essentially allow the Government

to administratively immunize itself from tort liability under applicable state law as a matter of

‘policy.’” Bear Med., 241 F.3d at 1215. Nor does the government explain how this is the type of

implementation that itself requires a policy consideration, “such as where government officials

must consider competing fire-fighter safety and public safety considerations in deciding how to

fight a forest fire.” Whisnant, 400 F.3d at 1182 n.3. Therefore, Plaintiffs’ negligence claim based

on the Center’s failure to monitor is not subject to dismissal at this stage of the litigation under

the discretionary function exception.

iii. Plaintiffs’ claim for failure to provide a crib

In opposing Plaintiffs’ claim based on the Center’s alleged failure to provide a crib, the

United States asserts in a footnote that this allegation “concerns both alleged duties that a

premises owner might owe to an overnight guest, as well as the allocation of resources and does

not sound in medical malpractice.” The United States also argues that this alleged fact should not

be accepted as true and asserts that it can provide facts showing otherwise under Rule 12(b)(1).

the government, however, brought a facial attack against Plaintiffs’ complaint, and thus the

Court accepts Plaintiffs’ well-pleaded factual allegations as true and does not consider evidence

outside of the amended complaint.4

The Court rejects at this stage of the litigation that providing a sleeping apparatus for a

newborn when a clinic provides residential treatment for pregnant women is a policy

consideration under the discretionary function exception. The Center’s alleged duty is analogous

to the examples discussed in Whisnant,

Like the government’s duties to maintain its roads in safe

condition, to ensure the use of suitable materials in its building

projects, and to monitor the safety of its logging sites, the

government’s duty to maintain its grocery store as a safe and

healthy environment for employees and customers is not a policy

choice of the type the discretionary function exception shields.

Cleaning up mold involves professional and scientific judgment,

4 Plaintiffs clarified in their response that Ms. Moretti had to bring in her own bassinet

because the Center provided no sleeping apparatus for Saylor.

not decisions of social, economic, or political policy. “Indeed, the

crux of our holdings on this issue is that a failure to adhere to

accepted professional standards is not susceptible to a policy

analysis.”

Whisnant, 400 F.3d at 1183 (quoting Bear Med., 241 F.3d at 1217).

Just as there was no social, economic, or political policy choice to remove toxic mold,

there is no policy choice to provide a newborn infant a sleeping apparatus. That decision

involves the professional and medical judgment of Center staff that newborn babies should not

sleep with their mothers. The Center specifically provides residential treatment services to

pregnant homeless women and other underserved populations. Co-sleeping is well known as a

dangerous practice that may cause the death of newborns. “Because removing an obvious health

hazard is a matter of safety and not policy, the government’s alleged failure . . . cannot be

protected under the discretionary function exception.” See id. There was no legitimate reason for

the Center to allow a newborn baby in a residential treatment program without providing

appropriate sleeping apparatus. Thus Plaintiffs’ negligence claim based on the Center’s alleged

failure to provide a crib also is not subject to dismissal under the discretionary function

exception.

2. Exhaustion of Administrative Remedies

a. Standards

The FTCA allows claimants to sue the government for actions in tort, as long as they first

give the appropriate federal agency the opportunity to resolve the claim. 28 U.S.C. § 2675(a).

The FTCA’s administrative exhaustion requirement is jurisdictional and may not be waived.

Jerves v. United States, 966 F.2d 517, 519 (9th Cir. 1992). A tort claim is “forever barred” if the

claimant does not notify the appropriate agency of the claim within two years. 28 U.S.C.

§ 2401(b).

The Ninth Circuit interprets the FTCA’s administrative exhaustion requirement strictly.

Cadwalder, 45 F.3d at 300. “The plain language of section 2675(a) requires the claimant to first

present the claim to the appropriate Federal agency.” Id. at 301 (quotation marks omitted). This

requirement is satisfied when either the claimant or her legal representative files an

administrative claim on the claimant’s behalf. Id. A claimant may provide the agency with notice

of her claim by sending a Standard Form 95 (SF-95) or by providing other written

notification. 28 C.F.R. § 14.2(a).

b. Analysis

The United States argues that any claims by Ms. Moretti are barred because she failed to

exhaust her administrative remedies and the two-year time limit to file an administrative claim

has passed. Plaintiffs, in response, argue that the government had constructive notice of

Ms. Moretti’s claims based on the inclusion of her name in both the SF-95 and the

accompanying letter that Saylor’s estate sent to the Department of Health and Human Services.

The parties do not dispute that Ms. Moretti’s claims accrued on October 4, 2019, the date

of Saylor’s death. The parties also agree about what written notice was sent by Plaintiffs to the

United States. A timely SF-95 was filed by Saylor’s estate. The form lists Wendy Novins,

personal representative of Saylor’s estate, as the claimant. The signature appearing on the form is

that of the attorney for Saylor’s estate. Ms. Moretti’s name appears only in the “basis of claim”

section, which describes the events that gave rise to the claim. This description indicates that

Ms. Moretti is Saylor’s mother, that she was a patient at the Center at the time of Saylor’s death,

and that Saylor’s death resulted from co-sleeping with his mother while they both resided at the

Center. Ms. Moretti is not listed as a claimant, her signature does not appear on the form, and no

claims on her behalf are alleged. The accompanying letter contains no information related to

Ms. Moretti that is not also included in the SF-95.

The mere appearance of a family member’s name on an injured party’s SF-95 does not

put the government on notice that the named family member is making additional claims on her

own behalf. See Johnson v. United States, 704 F.2d 1431, 1442 (9th Cir. 1983) (holding that

wife’s claim for loss of consortium was barred where she was listed as spouse on her husband’s

SF-95 form but was not listed as a claimant, did not sign as a claimant, did not describe her

separate claim on the form, and did not file her own form, explaining that “[t]he primary goal of

the procedures established by the FTCA is to facilitate satisfactory administrative settlements,”

and that the wife’s “failure to file a claim for loss of consortium precluded the possibility of any

such settlement”). The inclusion of Ms. Moretti’s name in the description of the events that gave

rise to the claim did not provide notice to the United States of Ms. Moretti’s separate claims.

Indeed, it is difficult to see how Saylor’s claim could have been presented to the United States

without Ms. Moretti’s name being included.

In response to the United States’ motion to dismiss, Plaintiffs contend that the cover letter

they sent with the SF-95 provided notice. Plaintiffs also argue that a letter they sent the state of

Oregon provided notice of Ms. Moretti’s claim. Plaintiffs state that they expect discovery will

show that the letter was forwarded to the United States. The letter states that “Nicole Moretti will

also make a claim of negligence against [Oregon Department of Human Services] for damages

suffered in the name of the estate of Saylor Moretti.” ECF 29, at 56.

There are several problems with Plaintiffs’ arguments. First, Plaintiffs are relying on

extrinsic evidence in a facial motion on the pleadings, which is improper. Second, Plaintiffs’

letter to the United States did not mention Ms. Moretti’s claim or provide any notice of that

claim, but merely mentions Ms. Moretti in the same factual context as the SF-95. For Plaintiff’s

letter to the Oregon agencies, Plaintiffs are relying on a letter sent to third parties, and Plaintiffs

offer only speculation that the letter was forwarded to the United States. Third, even if the

Oregon letter were forwarded to the United States, Plaintiffs offer no authority suggesting that a

letter forwarded by a third party may suffice as proper notice to exhaust administrative remedies

under the FTCA. Plaintiffs offer a SF-95 form by one third party (the personal representative of

Saylor’s estate) stating that she will file a claim against the United States with a cover letter

conveying the same information. Plaintiffs add a letter possibly forwarded by another third party

in which an attorney states that the estate of Saylor will file claims against various Oregon

agencies that contains one sentence stating that Ms. Moretti also will file a claim against

Oregon’s Department of Health and Human Services. Plaintiffs seek to combine those two to

serve as notice that Ms. Moretti will file a claim against the United States. These

communications, however, fail to meet the requirements of 28 U.S.C. § 2675(a) that “the

claimant or his legal representative . . . file (1) a written statement sufficiently describing the

injury to enable the agency to begin its own investigation, and (2) a sum certain damages claim.”

Cadwalder, 45 F.3d at 301 (emphasis added in Cadwalder) (quoting Warren v. United States

Dept. of Interior Bureau of Land Mgmt., 724 F.2d 776, 780 (9th Cir. 1984) (en banc)).

The government did not receive the required notice that Ms. Moretti would bring

additional claims on her own behalf, precluding any opportunity to settle those claims. Because

she failed to comply with the requirements of § 2675(a) and the two-year timeframe to file notice

of her claims has passed, Ms. Moretti’s claims are barred.

CONCLUSION

The Court GRANTS the Center’s motion to substitute (ECF 32). Going forward, the

United States shall be the sole Defendant in this case. The Court GRANTS in part and DENIES

in part the United States’ motion to dismiss (ECF 26). The Court grants the motion as against the

claims of Plaintiff Nicole Moretti and DISMISSES her claims with prejudice. The Court grants

the motion as against Plaintiff Wendy Novins’ negligence claim on behalf of Saylor Moretti’s

estate based on failure to create an adequate sleeping policy, inadequate staffing, and failure to

train and supervise employees, and DISMISSES those claims without prejudice. The Court

denies the motion with respect to Plaintiff Novins’ negligence claim based on the Center’s

alleged failure to monitor and failure to provide a crib, and those claims may proceed. Plaintiff

Novins may file a second amended complaint within 14 days from the date of this Opinion and

Order if she believes she can cure the deficiencies identified.

IT IS SO ORDERED.

DATED this 25th day of September, 2023.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge