Tri-State Hospital Supply Corp. v. United States

Notice: This opinion is subject to formal revision before publication in the

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 10, 2003 Decided September 2, 2003

No. 02-5045

TRI–STATE HOSPITAL SUPPLY CORPORATION,

APPELLANT

v.

UNITED STATES OF AMERICA,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 00cv01463)

Terence J. Lynam argued the cause for the appellant.

John M. Dowd and Joseph P. Esposito were on brief.

Lisa S. Goldfluss, Assistant United States Attorney, ar-

gued the cause for the appellee. Roscoe C. Howard, Jr.,

United States Attorney, and R. Craig Lawrence, Assistant

United States Attorney, were on brief.

Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

2

Before: HENDERSON and ROGERS, Circuit Judges, and

SILBERMAN, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge HENDERSON.

Separate concurring opinion filed by Circuit Judge ROGERS.

Separate concurring opinion filed by Senior Circuit Judge

SILBERMAN.

KAREN LECRAFT HENDERSON, Circuit Judge: Tri–State Hos-

pital Supply Corporation (Tri–State) seeks reversal of the

final judgment of the district court dismissing its complaint

against the United States for want of subject matter jurisdic-

tion. Relying on the Federal Tort Claims Act (FTCA), 28

U.S.C. §§ 2671 et seq., Tri–State sought to recover $3.2

million in damages for the ‘‘injury or loss of property’’ it

incurred over a six-year period defending itself against the

government’s multiple investigations into its importation of

surgical instruments from Pakistan. Granting the govern-

ment’s motion to dismiss, the district court held that it lacked

authority to award the relief sought by Tri–State because the

FTCA does not expressly waive the sovereign immunity of

the United States from liability for attorney’s fees. Tri-State

Hosp. Supply Corp. v. United States, 142 F. Supp. 2d 93, 101–

04 (D.D.C. 2001) (Tri-State).

On appeal, Tri–State argues that the district court erred in

holding that ‘‘money damages TTT for injury or loss of proper-

ty,’’ 28 U.S.C. § 1346(b)(1), recoverable under the FTCA for

claims of abuse of process and malicious prosecution, id.

§ 2680(h), do not include the attorney’s fees Tri–State ex-

pended defending itself against the government’s alleged

torts. We agree and hold that attorney’s fees qua damages

are recoverable against the United States for abuse of pro-

cess and malicious prosecution if ‘‘the law of the place’’ where

the tort occurred so provides. Id. § 1346(b)(1). Accordingly,

we reverse the district court’s dismissal of Tri–State’s action

and remand the matter for further proceedings to consider

Tri–State’s specific FTCA allegations.

3

I. Background

Tri–State is a small, privately-owned corporation that sells

hospital supplies throughout the United States.1 In the early

1980s, Tri–State began importing surgical instruments—for-

ceps, scissors and the like—from suppliers in Pakistan. The

surgical instruments entered the United States at the Port of

Detroit, where Tri–State engaged the services of a licensed

customs broker, LEP International, Inc. (LEP), to complete

the required customs entry forms. The forms require the

importer to list ‘‘the price actually paid or payable’’ for goods

entering the country. 19 U.S.C. § 1401a(b)(1).

Although Tri–State in fact paid the invoice price for the

imported goods, it subsequently received rebates from its

Pakistani suppliers. From 1984 to 1986, Tri–State consulted

with LEP regarding the manner in which it should declare

the price ‘‘actually paid or payable’’ for the surgical instru-

ments it imported from Pakistan. LEP advised Tri–State to

declare the price that was reflected on the invoices accompa-

nying the imported supplies. As a result, Tri–State declared

a higher price on the customs entry forms than the price it

ultimately paid for the supplies after deducting the subse-

quent rebates. Because the goods imported from Pakistan

were duty-free, however, the United States Customs Service

(Customs) suffered no loss of revenue as a result of this

practice.2 The customs entry forms do not require disclosure

of any price rebate. See id.

Beginning in early 1994, Tri–State became the subject of

civil and criminal investigations for allegedly falsifying the

1 Because we review here the dismissal of Tri–State’s complaint

for lack of subject matter jurisdiction, ‘‘we ‘must accept as true all

of the factual allegations contained in the complaint.’ ’’ Scandinavi-

an Satellite Sys., AS v. Prime TV Ltd., 291 F.3d 839, 844 (D.C. Cir.

2002) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1

(2002)).

2 ‘‘In fact, by declaring only the higher invoice price, Tri–State

paid more money to Customs in merchandise processing fees than it

would have paid if it [had] declared a lower price (after deduction of

the rebates) for the instruments.’’ Complaint at ¶ 12.

4

forms it submitted to Customs. On March 28, 1994, Customs

officials executed a search warrant at Tri–State’s headquar-

ters, seizing evidence relating to the value of surgical instru-

ments imported from Pakistan. Over the next year, Customs

sought the indictment of Tri–State and two of its executives

for criminal customs fraud. These efforts ultimately proved

unsuccessful, however, as both the United States Attorney for

the Eastern District of Michigan and the United States

Attorney for the Eastern District of Virginia declined to

prosecute Tri–State.

Notwithstanding the federal prosecutors’ decision not to

indict Tri–State for criminal customs fraud, Customs began to

issue a series of civil penalty notices against Tri–State in 1995

based upon allegations that it had fraudulently overstated the

prices it had paid for imported surgical instruments and that

it had engaged in an international money laundering scheme.

Undaunted, Tri–State steadfastly refused to pay any of the

amounts alleged in the various penalty notices. In November

1996, Customs referred its case to the Department of Justice

(DOJ) for the collection of civil penalties. DOJ then brought

suit against Tri–State, on behalf of Customs, in the United

States Court of International Trade (CIT) on April 28, 1997.

On numerous occasions before and during the enforcement

trial, Tri–State’s counsel explained to both DOJ and Customs

that Tri–State had relied on LEP’s advice in reporting the

prices of the surgical supplies it had imported from Pakistan.

Evidence likewise emerged both before and during trial that

indicated that Tri–State had not in fact engaged in any

fraudulent scheme. After the government rested its case,

Tri–State moved for judgment as a matter of law on two of

the three counts. DOJ then decided to dismiss its fraud

claim against Tri–State. The CIT subsequently granted Tri–

State’s motion for judgment as a matter of law on the gross

negligence count, finding ‘‘[no] evidence which rises to the

level of willful or wanton conduct.’’ Complaint at ¶ 156. At

the close of trial, the jury deliberated on the sole remaining

negligence count and returned a verdict in Tri–State’s favor.

5

Tri–State filed the instant lawsuit under the FTCA on June

20, 2000 to recover the $3.2 million in attorney’s fees it had

incurred defending itself against the government. Count I of

the complaint alleged that the government engaged in a

malicious prosecution because it lacked probable cause to

issue the penalty notices against Tri–State or to sue Tri–State

for collection of those penalties in the CIT. It also claimed

that Customs officials knowingly violated their own regula-

tions by seeking to impose civil penalties on Tri–State.

Count II alleged that the government engaged in an abuse of

process in connection with the penalty notices and enforce-

ment trial.

The government then moved to dismiss Tri–State’s com-

plaint for lack of subject matter jurisdiction, arguing that

Tri–State’s claims were jurisdictionally barred because the

United States had not waived its sovereign immunity from

suit. Granting the government’s motion to dismiss in part,3

the district court held that because the FTCA does not

contain an express waiver of sovereign immunity for the

recovery of attorney’s fees, it lacked authority to award as

damages the attorney’s fees Tri–State expended defending

3 The district court likewise dismissed, as jurisdictionally barred,

Tri–State’s claims arising from the alleged conduct of DOJ attor-

neys. Tri-State, 142 F. Supp. 2d at 98. Concluding that the federal

prosecutors were not ‘‘investigative or law enforcement officers’’ as

defined by the FTCA, the district court held that claims arising

from their conduct were barred by 28 U.S.C. § 2680(h), the FTCA’s

abuse of process/malicious prosecution exception. Id. However,

the district court also concluded that the Customs officials refer-

enced in the complaint could be considered ‘‘investigative or law

enforcement officers’’ under section 2680(h); it therefore held that

Tri–State’s claims based on the alleged torts of Customs officials

were not barred. Id. at 98–100. In addition, the district court

rejected the government’s argument that Tri–State’s claims against

Customs officials for falsifying records, lying under oath and violat-

ing customs regulations were barred by the FTCA’s discretionary

function exception. Id. at 100–101. These other rulings are not

before us, however, as the government chose not to cross-appeal.

6

itself against the government’s alleged tortious conduct. Tri-

State, 142 F. Supp. 2d at 101–04.

Although the district court recognized the unique posture

of Tri–State’s case—it sought attorney’s fees qua damages,

not attorney’s fees incurred in pursuing the FTCA action—

the district court concluded that ‘‘the result must be the

same’’ as that obtained in the myriad appellate court decisions

holding that attorney’s fees are not recoverable under the

FTCA. Id. at 102. Stating that ‘‘parties cannot use artful

pleading to circumvent the limitations of a statute,’’ the

district court rejected Tri–State’s characterization of the $3.2

million in attorney’s fees as ‘‘ ‘money damages TTT for injury

or loss of property.’ ’’ Id. (quoting 28 U.S.C. § 1346(b)(1)).

The district court further observed that Tri–State had failed

to cite a single case in which a court had awarded attorney’s

fees in an abuse of process or malicious prosecution action

brought under the FTCA. Id. at 103. Because it also was

unaware of any such cases itself, save a single district court

decision overturned by the Ninth Circuit on other jurisdic-

tional grounds, the district court declined to ‘‘be the first.’’

Id. & n.7.

In addition, the district court reasoned that its ‘‘analysis is

further supported by the fact that Congress established the

Equal Access to Justice Act [EAJA] as a separate statutory

scheme that specifically waives the government’s sovereign

immunity for awards of attorney[’s] fees.’’ Id. Noting that

‘‘a precisely drawn, detailed statute pre-empts more general

remedies,’’ the district court declined to ‘‘imply the availabili-

ty of attorney[’s] fees under the more general FTCA, when

the more-precisely drawn EAJA appears to express Con-

gress’s clear mandate concerning the issue.’’ Id. Because,

as Tri–State conceded, it did not meet certain procedural

requirements of EAJA, the district court refused to ‘‘allow

Tri–State to TTT seek[ ] the same relief under a different,

more general statute.’’ Id. at 104 n.8.

Nevertheless, the district court observed that ‘‘all may not

be lost for Tri–State,’’ given that its ‘‘complaint asserts that

[it] incurred ‘special injury including but not limited to

7

$3,239,153.60 in damages.’ ’’ Id. (emphasis in original). The

district court thus gave Tri–State the opportunity to move to

amend its complaint to clarify ‘‘what other ‘special injury’ it

suffered’’ as a result of the government’s actions. Id. Tri–

State declined to do so, however, choosing instead to file a

motion for reconsideration, which the district court denied.

Soon thereafter, on January 29, 2002, the district court en-

tered final judgment in the government’s favor. Tri–State

now appeals.

II. Analysis

We review de novo the district court’s dismissal of Tri–

State’s complaint for lack of subject matter jurisdiction. See,

e.g., Ass’n of Civilian Technicians, Inc. v. FLRA, 283 F.3d

339, 341 (D.C. Cir.), cert denied, 123 S. Ct. 618 (2002).

A. Sovereign Immunity and the Federal Tort Claims Act

Absent waiver, the doctrine of sovereign immunity shields

the federal government from suit. FDIC v. Meyer, 510 U.S.

471, 475 (1994); see also United States v. Sherwood, 312 U.S.

584, 586 (1941). Because sovereign immunity is jurisdictional

in nature, Meyer, 510 U.S. at 475, ‘‘the terms of [the govern-

ment’s] consent to be sued in any court define that court’s

jurisdiction to entertain the suit,’’ Sherwood, 312 U.S. at 586.

As the Supreme Court has often observed, waiver of sover-

eign immunity must be ‘‘unequivocally expressed in the statu-

tory text’’ and ‘‘strictly construed, in terms of its scope, in

favor of the sovereign.’’ Dep’t of Army v. Blue Fox, Inc., 525

U.S. 255, 261 (1999) (internal quotations omitted). A party

bringing suit against the United States bears the burden of

proving that the government has unequivocally waived its

immunity. See, e.g., Graham v. Fed. Emergency Mgmt.

Agency, 149 F.3d 997, 1005 (9th Cir. 1998); James v. United

States, 970 F.2d 750, 753 (10th Cir. 1992); Reynolds v. Army

& Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988).

The FTCA represents a limited waiver of the government’s

sovereign immunity, United States v. Orleans, 425 U.S. 807,

813 (1976), ‘‘grant[ing] the federal district courts jurisdiction

8

over a certain category of claims for which the United States

has TTT ‘render[ed]’ itself liable,’’ Meyer, 510 U.S. at 477

(quoting Richards v. United States, 369 U.S. 1, 6 (1962)).

Specifically, section 1346(b)(1) of the FTCA confers exclusive

jurisdiction to the district courts over

civil actions on claims against the United States, TTT for

money damages TTT 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 Govern-

ment 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). In Meyer the Supreme Court recog-

nized that this language establishes six elements a claim must

encompass to be actionable under section 1346(b)(1), namely,

the claim must be

‘‘[1] against the United States, [2] for money damages,

TTT [3] for injury or loss of property, or personal injury

or death [4] caused by the negligent or wrongful act or

omission of any employee of the Government [5] while

acting within the scope of his office or employment, [6]

under circumstances where the United States, if a pri-

vate person, would be liable to the claimant in accordance

with the law of the place where the act or omission

occurred.’’

Meyer 510 U.S. at 477 (quoting 28 U.S.C. § 1346(b)). Tri–

State’s claim plainly satisfies four of the six elements (1, 2, 4,

5): it is against the United States (which is the named

defendant), seeks $3,239,153.60 in damages, which were

caused by the wrongful conduct (malicious prosecution and

abuse of practice) of employees of the United States Justice

Department and Commerce Department acting within the

scope of their official enforcement duties. For the following

reasons, we conclude that the claim also satisfies the third

and sixth elements and therefore the district court possessed

jurisdiction over the claim under section 1346(b).

9

First, the money damages sought—compensation for the

roughly $3.2 million Tri–State expended defending itself in

the prior proceedings may be properly characterized as dam-

ages ‘‘for injury or loss of property’’ within the meaning of

the third statutory element of section 1346(b)(1)—whether

they be considered as damages for ‘‘injury’’—actionable inju-

ry other than ‘‘personal injury’’ (here, for example, being

subjected to indictment, trial, penalties, etc.4)—or viewed as

damages for ‘‘loss of property’’ (that is, of the funds necessar-

ily expended to defend against the wrongful legal proceed-

ings). In fact, expenditures for legal defense traditionally

make up a major component of the damages recoverable for

malicious prosecution and abuse of process. See Restatement

(Second) of Torts, §§ 671(b) (damages for unjustifiable crimi-

nal litigation), 681(c) (damages for unjustifiable civil litigation

for abuse of process); W. Page Keaton et al., Prosser and

Keeton on Torts, §§ 119, at 888 (criminal malicious prosecu-

tion damages); 120, at 895 (civil malicious prosecution dam-

ages) (5th ed. 1984). It is therefore unlikely that the Con-

gress intended to foreclose such damages in actions against

the government under the FTCA which expressly authorizes

actions for malicious prosecution and abuse of process. See

28 U.S.C. § 2680(h) (‘‘provisions of TTT section 1346(b) of this

title shall apply to any claim arising, on or after the date of

the enactment of this proviso, out of assault, battery, false

imprisonment, false arrest, abuse of process, or malicious

prosecution’’) (emphasis added); see also Smith v. United

States, 507 U.S. 197, 203 (1993) (‘‘We should also have in mind

that the [FTCA] waives the immunity of the United States

and that TTT we should not take it upon ourselves to extend

the waiver beyond that which Congress intended. Neither,

however, should we assume the authority to narrow the

waiver that Congress intended.’’) (quoting United States v.

Kubrick, 444 U.S. 111, 117–118 (1979)). When the Congress

wished to except a class of damages from the FTC, it had no

4 See General Dynamics Corp. v. United States, 139 F.3d 1280

(9th Cir. 1998) (O’Scannlain, J., dissenting) (identifying ‘‘injury’’ in

FTCA malicious prosecution action, for statute of limitation pur-

pose, as ‘‘the indictment’’).

10

difficulty doing so specifically and unambiguously. See 28

U.S.C. § 2674 (excepting government liability for pre-

judgment interest or punitive damages) (discussed infra p.

12).

Even if an FTCA claim satisfies section 1346(b)(1)’s third

requirement it may yet fail the sixth requirement and juris-

diction be therefore lacking. The section’s sixth element re-

quires that the alleged wrong have been done ‘‘under circum-

stances 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.’’ In Meyer, the Supreme

Court made clear that ‘‘[section] 1346(b)’s reference to the

‘law of the place’ means law of the State—the source of

substantive liability under the FTCA.’’ Meyer, 510 U.S. at

478. Thus, under the sixth element, state law establishes the

elements of a particular tort that is otherwise actionable

under the FTCA. While the choice of law issue is not before

us, we note that the District of Columbia is not alone in

allowing attorney’s fees to be recovered as damages in a

malicious prosecution suit. Our examination of state tort law

reveals that many states permit the recovery of attorney’s

fees qua damages in malicious prosecution suits—and, to our

knowledge, not a single state forbids the practice.5 Assum-

ing, then, without deciding, that District of Columbia tort law

applies in this case, Tri–State will be able to seek such

damages here.

To be sure, several appellate courts have held that attor-

ney’s fees are not recoverable under the FTCA. See, e.g.,

Anderson v. United States, 127 F.3d 1190, 1191–92 (9th Cir.

5See, e.g., Stevens v. Chisholm, 178 P. 128, 131 (Cal. 1919);

Technical Computer Servs., Inc. v. Buckley, 844 P.2d 1249, 1256

(Colo. Ct. App. 1992); Cal. Fed. Sav. & Loan Ass’n v. Coley, 593 So.

2d 1152, 1153 (Fla. Dist. Ct. App. 1992); Davis v. Rudolph, 52

N.W.2d 15, 20 (Iowa 1952); Nelson v. Miller, 607 P.2d 438, 447

(Kan. 1980); Wheeler v. Hanson, 37 N.E. 382, 386 (Mass. 1894);

Reenan v. Klein, 444 N.E.2d 63, 65 (Ohio Ct. App. 1981); Bucher v.

Staley, 297 N.W.2d 802, 806 (S.D. 1980); see also RESTATEMENT

(SECOND) OF TORTS § 671 & cmt. c, § 681.

11

1997) (‘‘Congress has not waived the government’s sovereign

immunity for attorney[’s] fees and expenses under the

FTCA.’’), cert. denied, 523 U.S. 1072 (1998); Joe v. United

States, 772 F.2d 1535, 1537 (11th Cir. 1985) (‘‘The FTCA does

not contain the express waiver of sovereign immunity neces-

sary to permit a court to award attorney[’s] fees against the

United States directly under that act.’’). However, Tri–State

is not seeking the attorney’s fees it incurred in bringing its

FTCA action but rather ‘‘damages in the form of attorney’s

fees already expended in defending itself against the underly-

ing tortious conduct.’’ Br. for Appellant at 33. Because

Anderson, Joe and similar cases stand only for the proposi-

tion that a prevailing party may not recover the attorney’s

fees incurred in prosecuting an FTCA action, they provide no

basis for denying Tri–State recovery of its damages—simply

measured in the form of attorney’s fees—here. Anderson,

127 F.3d at 1191–92; Joe, 772 F.2d at 1536–37.

Moreover, as Tri–State correctly observes, a pat reliance

upon cases such as Anderson and Joe effectively reads a

damage-specific waiver requirement into the FTCA; i.e.,

absent the express waiver of a specific category of damages—

for example, pain and suffering—that category of damages

may not be recovered under the FTCA. In our view, at least

two rationales counsel against such a reading. First, the

FTCA expressly precludes the recovery of prejudgment in-

terest and punitive damages only. 28 U.S.C. § 2674. The

inclusion of this provision suggests that other categories of

damages should not be precluded. See, e.g., Qi–Zhuo v.

Meissner, 70 F.3d 136, 139 (D.C. Cir. 1995) (‘‘[A]n item which

is omitted from a list of exclusions is presumed not to be

excluded.’’); Detweiler v. Pena, 38 F.3d 591, 594 (D.C. Cir.

1994) (‘‘Where a statute contains explicit exceptions, the

courts are reluctant to find other implicit exceptions.’’). Sec-

ond, given the absence of any damage-specific waiver in the

FTCA itself, reading such a requirement into the statute

could preclude the recovery of any category of damages,

including pain and suffering, lost wages and medical ex-

penses. By adhering to the ordinary meaning of section

1346(b)(1), however, we avoid such an illogical result. See

12

United States v. Wilson, 290 F.3d 347, 361 (D.C. Cir.) (‘‘ ‘ab-

surd results’ are strongly disfavored’’ in construing statute

(quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564,

575 (1982)), cert. denied, 123 S. Ct. 581 (2002).6

6 Tri–State’s reading of the statute is lent further support by

General Dynamics Corp. v. United States, 1996 WL 200255 (C.D.

Cal. March 25, 1996), rev’d on other grounds, 139 F.3d 1280 (9th

Cir. 1998), which held that attorney’s fees were recoverable ‘‘money

damages TTT for injury or loss of property’’ in a negligence action

brought under the FTCA. In General Dynamics, the plaintiff

corporation brought an FTCA action against the United States

alleging that the Defense Contract Audit Agency (DCAA) had

committed professional malpractice in performing an audit. Id. at

*1. As a result of the DCAA audit, the DOJ initiated—but ulti-

mately dismissed—criminal and civil litigation against General Dy-

namics. Id. at *31–32. In its subsequent FTCA action, General

Dynamics sought to recover $25.8 million in damages ‘‘representing

the legal fees and other litigation expenses’’ that the corporation

incurred defending itself against the government’s criminal and civil

cases. Id. at *32. Noting that ‘‘[c]ompensation for the loss of

money or for expenditures is a proper measure of damages in an

action for professional malpractice’’ under California law, id. at *35

(citing Electronic Equip. Express, Inc. v. Donald H. Seiler & Co.,

176 Cal. Rptr. 239 (1981)), the district court concluded that ‘‘money

expended on attorney[’s] fees due to a defendant’s negligence is a

recoverable damage,’’ id. (citing Budd v. Nixen, 6 Cal. 3d 195, 201–

02 (1971)). ‘‘[S]uch expenses are ‘money damages’ for injury or loss

of property within the context of the FTCA,’’ the district court held,

‘‘because General Dynamics expended its own money to protect

itself from injury resulting from the prosecution.’’ Id.

The Ninth Circuit reversed, however, holding that the FTCA’s

discretionary function exception precluded the district court from

exercising subject matter jurisdiction over General Dynamics’s

claim. General Dynamics, 139 F.3d at 1282–86. Although the

Ninth Circuit did not discuss—much less criticize—the district

court’s interpretation of section 1346(b)(1), Judge O’Scannlain, dis-

senting in part, observed that ‘‘identifying the injury for which

General Dynamics seeks relief is simple: the injury is the indict-

ment. In defending itself against the erroneously premised indict-

ment, General Dynamics spent over $25,000,000 in attorney’s fees.’’

Id. at 1288. While he concurred in the result because, in his view,

13

We note that the government finds some support for its

position in a series of Ninth Circuit decisions holding that the

FTCA does not confer subject matter jurisdiction upon the

district court for claims seeking expenses incurred by states

in fighting forest fires negligently set in federally-controlled

forests. See Idaho ex rel. Trombley v. Dep’t of Army, 666

F.2d 444 (9th Cir.), cert. denied, 459 U.S. 823 (1982); Califor-

nia v. United States, 307 F.2d 941 (9th Cir. 1962), cert.

denied, 372 U.S. 941 (1963); Oregon v. United States, 308

F.2d 568 (9th Cir. 1962), cert. denied, 372 U.S. 941 (1963).

‘‘Such expenses,’’ the Ninth Circuit reasoned, ‘‘simply do not

constitute ‘money damages’ ‘for injury or loss of property’

under the FTCA.’’ Idaho, 666 F.2d at 446. Because it

concluded that the state-plaintiffs had sought the recovery of

firefighting expenses and not damages to person or property,

the Ninth Circuit thrice held that section 1346(b)(1) does not

General Dynamics’s claim was time-barred under 28 U.S.C.

§ 2401(b), Judge O’Scannlain considered the claim to be ‘‘otherwise

valid,’’ id., and further observed that ‘‘the government TTT should

have reimbursed the $25,880,752 in resulting attorney’s fees,’’ id. at

1289.

Tri–State claims that a second district court decision, Ware v.

United States, 971 F. Supp. 1442 (M.D. Fla. 1997), likewise supports

its position. Ware was acquitted of federal drug charges and sued

the United States for malicious prosecution under the FTCA. Id.

at 1446. Although the district court concluded that Ware had failed

to establish three of the six elements of malicious prosecution under

Florida law, thus warranting a judgment in the government’s favor,

id. at 1460–72, it further observed in its discussion of damages that

‘‘[r]easonable out-of-pocket expenses are one type of compensatory

damages available to a malicious prosecution plaintiff,’’ id. at 1471.

Because Ware had court-appointed counsel at the time of his

prosecution, however, the district court concluded that he had not

incurred ‘‘any discernable out-of-pocket expenses’’ in defending

himself. Id. Seizing upon the aforementioned passage, Tri–State

asserts that the district court’s ‘‘holding’’ clearly indicates that ‘‘if

the plaintiff had paid for his own counsel, as Tri–State did, those

out-of-pocket expenses would have been recoverable under the

FTCA.’’ Br. for Appellant at 25. The district court’s discussion of

out-of-pocket expenses, however, is plainly dicta.

14

confer jurisdiction upon the district court to hear such claims.

See id. at 446; see also California, 307 F.2d at 944; Oregon,

308 F.2d at 569.7

Tri–State attempts to distinguish the Ninth Circuit’s fire-

fighting expenses decisions on two distinct bases. First, Tri–

State argues that the Ninth Circuit’s decisions are inapposite

because, unlike the state-plaintiffs in Idaho, California and

Oregon, it has alleged the commission of intentional torts—

abuse of process and malicious prosecution—rather than neg-

ligence. This argument fails to withstand close scrutiny,

however, as none of the Ninth Circuit’s decisions appears to

turn on the nature of the cause of action alleged. See Idaho,

666 F.2d at 446; California, 307 F.2d at 943–44; Oregon, 308

F.2d at 569.

7 The government also relies upon Charles Burton Builders v.

United States, 768 F. Supp. 160 (D. Md. 1991), which held that an

FTCA plaintiff could not recover the expenses it incurred in testing

its property for environmental damage where the government’s

alleged tortious conduct had in fact caused no physical damage to

the property. Charles Burton Builders, 768 F. Supp. at 161–63.

After discussing the Ninth Circuit’s firefighting expenses cases, the

district court in Charles Burton Builders observed:

[The precedents] all indicate that in order to be covered by the

FTCA there must have been a physical impact of some type on

the plaintiff or its property. A claim for damages sustained

only in reaction to governmental activity, even though possibly

cognizable under state law, does not constitute an action for

money damages for ‘‘injury or loss of property.’’

Id. at 162. As Tri–State correctly observes, however, this decision

‘‘stands for nothing more than the proposition that a plaintiff who

has not suffered any damages in the form of harm to or loss of

property, may not recover its expenses for conducting tests to

determine whether such damages occurred.’’ Reply Br. at 13.

Because Tri–State is not seeking comparable damages—i.e., ex-

penses incurred in determining whether it has an abuse of process

or malicious prosecution claim against the government—the district

court’s ruling in Charles Burton Builders fails to undermine Tri–

State’s claim.

15

Citing New York v. United States, 620 F. Supp. 374

(E.D.N.Y. 1985), Tri–State next argues that the Ninth Circuit

decisions are inapplicable because, unlike the state-plaintiffs

in Idaho, California and Oregon, it has in fact alleged injury

to property. This argument has some appeal. In New York

v. United States, the district court held that the Ninth

Circuit’s firefighting expenses cases did not control New

York’s claim for money damages under the FTCA for the

costs it incurred in removing jet fuel contaminants from a

former U.S. Air Force base. Id. at 375–79. Rejecting the

government’s argument that the state’s damages claim was

really an equitable restitution claim seeking compensation for

the alleged costs of cleaning up the polluted areas, the district

court agreed with New York that ‘‘the cost of removing the

contaminants is simply the suggested measure of damages to

its property.’’ Id. at 378. Similarly, Tri–State argues here

that the attorney’s fees it incurred defending itself represent

‘‘ ‘the measure’ of the damage to its property,’’ i.e., its finan-

cial assets. Reply Br. at 12. Although the New York deci-

sion arguably involved a more conventional loss of property—

groundwater underlying the former Air Force base was con-

taminated—Tri–State’s argument carries a certain degree of

force. New York, 620 F. Supp. at 375.

To the extent that the Ninth Circuit’s firefighting expenses

decisions require a physical injury to recover ‘‘money dam-

ages’’ under the FTCA, we decline to follow them. No such

requirement appears on the face of section 1346(b)(1) and we

decline to engraft one. We thus conclude that Tri–State has

adequately stated a claim ‘‘for money damages TTT for injury

or loss of property’’ within section 1346(b)(1) to the extent

that the state law governing Tri–State’s tort claims allows the

recovery of attorney’s fees qua damages for abuse of process

and malicious prosecution. 28 U.S.C. § 1346(b)(1).

B. The Equal Access to Justice Act

The district court declined to sanction the availability of

attorney’s fees ‘‘under the more general FTCA, when the

more-precisely drawn EAJA appears to express Congress’s

16

clear mandate concerning the issue.’’ Tri-State, 142 F. Supp.

2d at 103. On appeal, Tri–State contends that the district

court’s reliance upon EAJA was misplaced because the stat-

ute does not preclude recovery of attorney’s fees qua dam-

ages for injury or loss of property under the FTCA. Once

again, we agree with Tri–State.

‘‘[S]overeign immunity protects the United States from

attorney’s fees liability ‘except to the extent [the government]

has waived its immunity [from suit].’ ’’ United States v.

Wade, 255 F.3d 833, 836 (D.C. Cir. 2001) (quoting Ruckel-

shaus v. Sierra Club, 463 U.S. 680, 685 (1983)). As we

recognized in American Hospital Association v. Sullivan, 938

F.2d 216, 219 (D.C. Cir. 1991), EAJA expressly waives the

government’s sovereign immunity for the recovery of attor-

ney’s fees ‘‘in two distinct manners.’’ Under 28 U.S.C.

§ 2412(d)(1)(A), a ‘‘prevailing party’’ may recover reasonable

attorney’s fees against the United States if the government

takes a substantially unjustified position in the underlying

civil litigation. In order to recover attorney fees under

section 2412(d)(1)(A), however, a party must satisfy certain

threshold eligibility requirements. 28 U.S.C. § 2412(d)(2)(B)

(corporate claimant must have net worth not in excess of

$7,000,000 or more than 500 employees at time civil action

filed). Alternatively, under 28 U.S.C. § 2412(b), a court may

award reasonable attorney’s fees ‘‘to the prevailing party in

any civil action brought by or against the United States TTT

to the same extent that any other party would be liable under

the common law or under the terms of any statute which

specifically provides for such an award.’’

The government relies upon our decision in American

Postal Workers Union, AFL–CIO v. United States Postal

Service, 940 F.2d 704 (D.C. Cir. 1991), to argue that EAJA

effectively precludes Tri–State from recovering attorney’s

fees under the FTCA. In American Postal Workers, four

former probationary employees of the Postal Service sought

to use the FTCA to press claims for retaliatory discharge

pursuant to state law. Id. at 708. Reasoning that the Postal

Reorganization Act (PRA) ‘‘is the type of ‘narrowly tailored

employee compensation scheme’ that the Supreme Court has

17

held ‘pre-empts the more general tort recovery statutes,’ ’’ we

ruled that ‘‘the FTCA [did] not provide a basis for the

asserted claim for relief.’’ Id. (quoting Brown v. Gen. Servs.

Admin., 425 U.S. 820, 834–35 (1976)). Because the PRA

incorporated ‘‘an ‘elaborate remedial system that has been

constructed step by step, with careful attention to conflicting

policy considerations,’ ’’ we concluded that ‘‘we have no war-

rant to permit the appellants to use the FTCA as a means of

circumventing it.’’ Id. (quoting Bush v. Lucas, 462 U.S. 367,

388 (1983)).8 From the government’s perspective, Tri–State’s

FTCA action ‘‘is no less an attempt to ‘circumvent’ the

exquisitely-detailed procedures, limitations, and conditions set

forth in’’ EAJA, specifically, the eligibility criteria of section

2412(d)(2)(B). Br. for Appellee at 33.

Tri-State views matters differently. Because EAJA explic-

itly provides that ‘‘[n]othing in section 2412(d) TTT alters,

modifies, repeals, invalidates, or supersedes any other provi-

sion of Federal law which authorizes an award of such fees,’’

EAJA, Pub. L. No. 96–481, § 206, 94 Stat. 2321 (1980), Tri–

State argues that EAJA has no effect upon its right to

recover attorney’s fees—as ‘‘money damages TTT for injury or

loss of property’’—under the FTCA. It thus contends that

EAJA’s ‘‘no preclusion’’ provision renders the government’s

reliance upon American Postal Workers inapposite because

the FTCA’s waiver of sovereign immunity for claims of abuse

of process and malicious prosecution is an ‘‘other provision’’ of

federal law which authorizes the award of attorney’s fees.

See 28 U.S.C. § 2680(h).

Although the government correctly observes that the

FTCA lacks an express waiver for the recovery of attorney’s

8 Although the employees in American Postal Workers could not

seek redress under the PRA’s compensation scheme—they had not

completed the requisite one year of continuous service before being

terminated—this fact did not alter our decision. American Postal

Workers, 940 F.2d at 708–09. On the contrary, we viewed the

exclusion of appellants from the PRA’s compensation scheme as

evidence of the Congress’s intent to deny a particular class of

employees the protections of the statutory scheme which, if avail-

able, provided postal workers their only remedy. Id. at 709.

18

fees, its argument under EAJA ignores the critical feature of

this case: Tri–State does not seek to recover attorney’s fees

per se, but rather attorney’s fees qua damages—for the torts

of abuse of process and malicious prosecution. Because the

FTCA waives sovereign immunity for claims of abuse of

process and malicious prosecution, 28 U.S.C. § 2680(h), and in

light of the fact that the statutory waiver preceded the

enactment of EAJA by six years, compare Act of Mar. 16,

1974, Pub. L. No. 93–253, § 2, 88 Stat. 50 (1974) (amending

section 2680(h)), with EAJA, Pub. L. No. 96–481, § 206, 94

Stat. 2321 (1980), we have little trouble agreeing with Tri–

State that EAJA does not ‘‘alter[ ], modif[y], repeal[ ], invali-

date[ ], or supersede[ ]’’ the pre-existing remedies afforded by

the FTCA. The government’s reliance on EAJA is therefore

misplaced.

III. Conclusion

For the foregoing reasons, we conclude that the FTCA

provides jurisdiction over an action to recover attorney’s fees

qua damages against the United States for the torts of abuse

of process and malicious prosecution under the FTCA if ‘‘the

law of the place’’ where the tort occurred so provides. 28

U.S.C. § 1346(b)(1). Accordingly, we reverse the judgment

of the district court and remand the matter for further

proceedings consistent with this opinion.

So ordered.

1

ROGERS, Circuit Judge, concurring: The court ‘‘hold[s] that

attorney fees qua damages are recoverable against the Unit-

ed States for abuse of process and malicious prosecution if

‘the laws of the place’ where the tort occurs so provides.’’

Op. at 2. As I interpret the court’s opinion, the terms ‘‘injury

or loss of property’’ under the Federal Tort Claims Act

(‘‘FTCA’’), 28 U.S.C. § 1346(b), are defined as a matter or

federal law in determining whether Tri–State’s claim is out-

side the intended scope of the FTCA, and not defined solely

by state law. This follows in my view from the following

analysis.

In Smith v. United States, 507 U.S. 197 (1993), the Su-

preme Court acknowledged that its decisions interpreting the

FTCA ‘‘contain varying statements as to how it should be

construed.’’ Id. at 203. It announced, however, that it was

embracing the approach that ‘‘we should not take it upon

ourselves to extend the wavier beyond that which Congress

intended. Neither, however, should we assume the authority

to narrow the waiver that Congress intended.’ ’’ Id. (quoting

United States v. Kubrick, 444 U.S. 111, 117–18 (1979)). De-

partment of the Army v. Blue Fox, Inc., 525 U.S. 255, 261

(1999), on which the court relies in describing a more strin-

gent standard of review, Op. at 7, involved the Administrative

Procedure Act, not the FTCA.

The following year, in FDIC v. Meyer, 510 U.S. 471 (1994),

the Supreme Court described § 1346(b) as establishing a

waiver of sovereign immunity and a cause of action against

the federal government if ‘‘six elements’’ are met. Id. at 477.

Thus, a claim must be:

[1] against the United States, [2] for money dam-

ages, TTT [3] for injury or loss of property, or

personal injury or death [4] caused by the negligent

or wrongful act or omission of any employee of the

Government [5] while acting within the scope of his

office or employment, [6] 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.

2

Id. (quoting § 1346(b) (alterations in original)). The Court

concluded that a federal due process constitutional claim was

not cognizable under the FTCA, holding that the claim failed

to meet the sixth element because it ‘‘could not contain’’ an

allegation that the United States ‘‘ ‘would be liable to the

claimant’ as ‘a private person’ ‘in accordance with the law of

the place where the act or omission occurred.’ ’’ Id. at 477–78

(quoting § 1346(b)). As the Court noted, it had ‘‘consistently

held that § 1346(b)’s reference to the ‘law of the place’ means

law of the State—the source of substantive liability under the

FTCA.’’ Id. at 478. Because, ‘‘[b]y definition, federal law,

not state law, provides the source of liability for a claim

alleging the deprivation of a federal constitutional right,’’ a

federal constitutional claim could not meet the sixth element

of § 1346(b) as it raised no claim under state law, and the

‘‘United States simply has not rendered itself liable under

§ 1346(b) for constitutional tort claims.’’ Id. at 478. In other

words, the Court’s reference in Meyer to the importance of

state tort law for defining the scope of the FTCA is directed

solely at the sixth and last element of § 1346(b), but a FTCA

claim, as the government notes, can only be established by

meeting all six elements.

In analyzing the fourth element of § 1346(b), whether the

harm complained of by the plaintiff has been ‘‘caused by the

negligent or wrongful act or omission of any employee of the

Government,’’ the Supreme Court has emphasized that feder-

al law controls the definition of the relevant terms. In Laird

v. Nelms, 406 U.S. 797, 797 (1972), the plaintiffs sought

‘‘recovery for property damage allegedly resulting from a

sonic boom caused by California-based United States military

planes flying over North Carolina on a training mission.’’

The Fourth Circuit, relying on ‘‘a theory of strict or absolute

liability for ultrahazardous activities,’’ had reversed the dis-

trict court’s grant of summary judgment for the government

based on the absence of negligence. Id. at 798. The Su-

preme Court reversed, noting that it had previously rejected

a claim based on strict liability in Dalehite v. United States,

346 U.S. 15, 44–45 (1953), and characterized its holding in

Dalehite as

3

not turn[ing] on the question of whether the law of

Texas or of some other State did or did not recog-

nize strict liability for the conduct of ultrahazardous

activities. It turned instead on the question of

whether the language of the Federal Tort Claims

Act permitted under any circumstances the imposi-

tion of liability upon the Government where there

had been neither negligence nor wrongful act. The

necessary consequence of the Court’s holding in

Dalehite is that the statutory language ‘‘negligent or

wrongful act or omission of any employee of the

Government,’’ is a uniform federal limitation on the

types of acts committed by its employees for which

the United States has consented to be sued. Re-

gardless of state law characterization, the Federal

Tort Claims Act itself precludes the imposition of

liability if there has been no negligence or other

form of ‘‘malfeasance or nonfeasance.’’

Laird, 406 U.S. at 798–99 (quoting Dalehite, 346 U.S. at 45)

(emphasis added). The Supreme Court has taken a similar

approach in construing other provisions of the FTCA, such as

the independent contractor exception in § 2671, see Orleans

v. United States, 425 U.S. 807, 814–15 (1976); Logue v.

United States, 412 U.S. 521, 528 (1973), and the intentional

torts exception in § 2680(h), see United States v. Neustadt,

366 U.S. 696, 705–06 (1961). As the Court has said with

respect to another section of the FTCA prohibiting the award

of punitive damages against the government, ‘‘the meaning of

the term ‘punitive damages’ as used in § 2674, a federal

statute, is by definition a federal question.’’ Molzof v. United

States, 502 U.S. 301, 305 (1992). Cf. Indian Towing Co. v.

United States, 350 U.S. 61, 64–65 (1955).

The court notes that it is well-established that under state

law (whether or not the District of Columbia provides the

correct substantive law to apply in this case) attorney’s fees

may be collected as damages. Op. at 10 & n.5. Hence, the

requirement of the sixth element is met by Tri–State’s claim.

The question remains whether Tri–States’s claim is an ‘‘injury

or loss of property’’ under a theory of malicious prosecution.

The only Supreme Court case to discuss the terms ‘‘injury or

4

loss of property’’ is unhelpful for the Court declined, in the

course of resolving the scope of the exception under § 2689(c)

to ‘‘[t]he Act’s broad wavier of sovereign immunity,’’ to re-

solve the scope of § 1346(b). See Kosak v. United States, 465

U.S. 848, 852 & n.7 (1984).

Tri–State’s contention that its claim falls within the scope

of what Congress intended in the FTCA by allowing the

recovery of ‘‘damages’’ for ‘‘injury or loss of property’’ is

persuasive. See Op. at 15. It relies on New York v. United

States, 620 F. Supp. 374 (E.D.N.Y. 1985), where, in, address-

ing a claim for the costs of removing contaminants placed in

the soil by United States Air Force, New York, 620 F. Supp.

at 375, the district court cited Rayonier, Inc. v. United

States, 352 U.S. 315 (1957), which held that negligence by the

Forest Service was actionable under the FTCA for recovery

of property damage, see New York, 620 F. Supp. at 378. The

district court in New York proceeded to accept New York’s

position that its clean-up costs were ‘‘simply the suggested

measure of damages to its property,’’ rejecting the United

States’ position that New York’s claim was in the nature of a

claim for equitable restitution for the costs of the clean up.

Id. So too here, Tri–States’ attorneys fees are a measure of

the damages it suffered as a result of the government’s

malicious prosecution and abuse of process. Cases imposing

a ‘‘physical injury’’ requirement, such as California v. United

States, 307 F.2d 941, 944 (9th Cir. 1962), are distinguishable,

and hence the court has no need to hold that it declines to

follow them, Op. at 15, because in a malicious prosecution

cause of action, it is the litigation itself that is the injury (and

hence the court need go no further in rejecting that line of

authority). ‘‘The interest in freedom from unjustifiable litiga-

tion is protected by actions for malicious prosecution and

abuse of process.’’ W. Page Keeton, et al., Prosser and

Keeton on Torts, § 119, at 870 (5th Ed. Hornbook Series

Lawyer’s Ed. 1984). Thus, the money spent on attorney’s

fees is money spent rectifying or correcting that injury and is

recoverable. Cf. New York, 620 F. Supp. at 378–79. As the

5

court notes, Tri–State is not seeking to recover its attorney’s

fees for bringing its claim under the FTCA. Op. at 11.

Contrary to Congress’s endorsement of recovery for mali-

cious prosecution, 28 U.S.C. § 2680(h), the government’s pro-

posed restriction of recovery of damages for ‘‘injury or loss of

property or personal injury or death’’ in malicious prosecution

claims to claims involving physical damage or injury to the

plaintiff’s property could mean that no recovery would be

possible, for example, for civil prosecutions against private

corporations involving no imprisonment or other physical

intrusion on the plaintiff, nor any loss of a property right by

the plaintiff who will (by definition) have won the prior

lawsuit. There is no reason to think that Congress was

unaware of the traditional meanings of various tort terms

when it added malicious prosecution by law enforcement

officers to § 2680(h), and that tort has traditionally allowed

for recovery of attorneys fees. See Restatement (Second) of

Torts § 681(c); Prosser and Keaton, § 119 at 888; id. § 120

at 889–92, 895–96; A.L. Azores, Annotation, Attorney’s Fees

as Element of Damages in Action for False Imprisonment or

Arrest, or for Malicious Prosecution, 21 A.L.R.3d 1068 § 2

(1968). The legislative history indicates that in allowing

recovery for malicious prosecution or abuse of process and

other intentional torts Congress intended to reach ‘‘any case

in which a Federal law enforcement agent committed the tort

while acting within the scope of his employment or under

color of Federal law.’’ See S. Rep. No. 93–588 at 4 (1974),

reprinted in 1974 U.S.C.C.A.N. 2789, 2791.

Under this analysis, which clarifies the federal and state-

law questions, the court’s opinion is properly read as holding

with respect to claims for malicious prosecution and abuse of

process, claims specifically recognized by Congress as viable

under § 2680(h), that, as a matter of federal law, recovery of

attorneys fees as damages is within the scope of what Con-

gress meant by ‘‘injury or loss of property’’ under § 1346(b).

Only if attorney’s fees are collectable as damages under state

law will a plaintiff be able to recover them under the FTCA

because the sixth element of § 1346(b) will then have been

satisfied. The court’s references to District of Columbia law,

6

other state law, and the Restatement (Second) of Torts, see

Op. at 10 & n.5, relate therefore only to its conclusion that,

for purposes of that sixth element, attorney’s fees will be

collectable. So understood, I concur inasmuch as the Equal

Access to Justice Act, see esp. 28 U.S.C. § 2412(d), is not a

bar to Tri–States’ claim. Op. at 16–18.

1

SILBERMAN, Senior Circuit Judge, concurring: It is not

apparent to me why both my colleagues found it necessary to

author opinions in this case. There is, to be sure, a percepti-

ble difference in their stated views as to our scope of review

of the Federal Tort Claims Act. Judge Henderson empha-

sizes that as a statute waiving sovereign immunity it should

be strictly construed against a plaintiff, whereas Judge Rog-

ers justifiably points to Smith v. United States, 507 U.S. 197

(1993). There the Supreme Court, in an opinion by the Chief

Justice, specifically addressing the construction of the FTCA,

adopted a more neutral standard of review. Id. at 203

(quoting United States v. Kubrick, 444 U.S. 111, 117–18

(1979)). Still, Judge Henderson cites Smith (although in the

wrong place), and, amusingly, the Chief Justice himself in a

subsequent case, Department of the Army v. Blue Fox, Inc.,

525 U.S. 255, 261 (1999), on which Judge Henderson relies,

repeated the standard sovereign immunity strict construction

maxim and cited FTCA cases.

The question is not totally academic because some of the

statutory language we are interpreting (‘‘money damages TTT

for injury or loss of property, or personal injury or

deathTTTT’’ 28 U.S.C. 1346(b)) is rather awkward, even

ambiguous, but both judges (as do I) reject the government’s

strained interpretation as excluding attorney’s fees from the

definition of injury or loss of property so I do not see any

difference in their actual approaches.

Nor do I detect any differences between my colleagues as

to their understanding of the respective spheres of Federal

and state law. Therefore I do not understand why, in the

interest of collegiality, one opinion could not have been fash-

ioned. Perhaps the problem stems from my colleagues’ writ-

ing style. See generally Richard A. Posner, Judges’ Writing

Styles (And Do They Matter?), 62 U. CHI. L. REV. 1421 (1995).