Pesnell v. Arsenault

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID PESNELL, 

Plaintiff-Appellant,

v.

JEFFREY ARSENAULT, a natural

person acting under color of No. 04-56721

federal law; JANET R. LINTZ, a

natural person acting under color  D.C. No.

CV-03-07533-ABC

of federal law; THOMAS P.

GALLAGHER, a natural person OPINION

acting under the color of federal

law; DOUGLAS J. MORGAN, a

natural person acting under color

of federal law,

Defendants-Appellees.



Appeal from the United States District Court

for the Central District of California

Audrey B. Collins, District Judge, Presiding

Submitted October 16, 2006*

Pasadena, California

Filed June 21, 2007

Before: Procter Hug, Jr., Harry Pregerson, and

Richard R. Clifton, Circuit Judges.

Opinion by Judge Hug;

Partial Concurrence and Partial Dissent by Judge Clifton

*The panel unanimously finds this case suitable for decision without

oral argument. See Fed. R. App. P. 34(a)(2).

7449

7452 PESNELL v. ARSENAULT

COUNSEL

Ronald J. Tocchini and Jason M. Sherman, Tocchini & Asso-

ciates PC, Roseville, California, for the appellant.

Robert I. Lester and Sharla Cerra, Assistant United States

Attorneys, Los Angeles, California, for the appellees.

OPINION

HUG, Circuit Judge:

This case involves the issue of when an action brought

under the Federal Tort Claims Act (“FTCA”) bars a later pro-

ceeding against the federal employees whose acts or omis-

sions gave rise to the FTCA claims. We hold that the FTCA

claims were dismissed for lack of jurisdiction and that the

subsequent claims against the federal employees are not

barred. We reverse the district court’s dismissal of the subse-

quent action on the ground of procedural bar and remand for

consideration of the remaining issues in the case. This case

also involves a request for recusal of the district judge; we

affirm the denial of that request.

I.

Background

Pesnell long contended that he owned two million acres of

land in California. His claim to title depended upon records

PESNELL v. ARSENAULT 7453

dating back to the Mexican-American War. In 1998, the

United States brought a quiet title action against Pesnell and

others. In 1999, the district court entered judgment for the

United States. That ruling extinguished Pesnell’s claims to

title of the real property. United States v. Sierra Alpine, CV

98-585-ABC (C.D. Cal. 1999).

In 2000, Pesnell brought an action against the United States

and several federal agencies in the federal district court in

Arizona. Pesnell v. United States, CV 00-0399-JCC (D. Ariz.

2000) (“Pesnell I”). In that action, Pesnell brought claims pur-

suant to the FTCA, 28 U.S.C. § 1346(b)(1).1 Pesnell based his

basic contention on two incidents. The first incident involved

research allegedly costing $150,000. He did considerable

research to establish his claim to title to the two million acres.

Pesnell loaned this research to federal agents in 1988. The

agents promised to return the research, but never did. Pesnell,

therefore, had to reconstruct the research. The second incident

involved his reconstructed research, allegedly costing

$200,000. Federal agents took this research in 1995. The fed-

eral district court dismissed all the claims, and this court

affirmed in April 2003. Pesnell v. United States, 64 Fed.

App’x 73 (9th Cir. 2003).

Pesnell filed the current federal action in September 2003

in the Central District of California against four government

employees. Pesnell’s first amended complaint alleges four

causes of action. The first is a federal civil Racketeer Influ-

enced and Corrupt Organizations Act (“RICO”) claim, in vio-

lation of 18 U.S.C. § 1962(c); the second is a state civil RICO

claim in violation of Arizona Revised Statute section 13-

2314.04(A); the third is a Bivens2 constitutional claim for the

1

That case also involved a claim under the Freedom of Information Act.

The district court dismissed that claim as moot, and it is not involved in

this appeal.

2

See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388

(1971).

7454 PESNELL v. ARSENAULT

violation of Pesnell’s Fourth Amendment right by the defen-

dants based on an unlawful search and seizure of Pesnell’s

person and property; the fourth is a Bivens claim under the

Fifth Amendment for the defendants having taken and kept

his property without due process of law.

The district court granted the government’s motion to dis-

miss under Federal Rule of Civil Procedure 12(b)(6) based on

the FTCA’s judgment bar rule set forth in 28 U.S.C. § 2676.

Pesnell appeals, contending that Pesnell I was dismissed for

lack of jurisdiction, and thus it was not a judgment on the

merits, as is required by the judgment bar rule.

II.

Judgment Bar Rule

[1] The judgment bar rule of the FTCA provides: “The

judgment in an action under section 1346(b) of this title shall

constitute a complete bar to any action by the claimant, by

reason of the same subject matter, against the employee of the

government whose act or omission gave rise to the claim.” 28

U.S.C. § 2676. Pesnell does not contest that his Bivens claims

arise out of the same subject matter as his FTCA claims.

[2] The parties agree that for the judgment bar rule to apply

the judgment must be on the merits, not based on lack of

jurisdiction. The parties are correct. Where a court dismisses

an action because it does not meet the requirements of the

waiver of sovereign immunity under the FTCA, the court is

ruling that the action was not properly brought under the

FTCA. Thus, the only action the court can take is to dismiss

the complaint. The action was not properly brought in the first

place and therefore the court had no ability to render a judg-

ment on the merits. A lack of subject matter jurisdiction “goes

to the very power of a court to hear a controversy; . . . [the]

earlier case can be accorded no weight either as precedent or

as law of the case.” Orff v. United States, 358 F.3d 1137,

PESNELL v. ARSENAULT 7455

1149-50 (9th Cir. 2004) (quoting United States v. Troup, 821

F.2d 194, 197 (3d Cir. 1987)). Thus, the dismissal of the ear-

lier case does not result in a “judgment” within the meaning

of the judgment bar rule of § 2676. The court in the earlier

case merely ruled that the action was not properly brought

under the FTCA.

III.

Subject Matter Jurisdiction of Pesnell I

We review de novo the existence of subject matter jurisdic-

tion. Coyle v. P.T. Garuda Indonesia, 363 F.3d 979, 984 n.7

(9th Cir. 2004). In this appeal, we are required to determine

whether our affirmance of the dismissal of the claims in Pes-

nell I was on the merits or for lack of jurisdiction. Pesnell

brought five FTCA counts alleging unjust enrichment, con-

structive trust, conversation, negligence, and misrepresenta-

tion against the Government. He also brought claims for

wrongful search and seizure and violation of due process

under the Fourth, Fifth, and Fourteenth Amendments.

[3] Specifically, we held Pesnell’s claims of unjust enrich-

ment and constructive trust were “appropriately dismissed for

lack of jurisdiction.” Pesnell, 64 Fed. App’x at 74 (emphasis

added). We also held that, because Pesnell failed to exhaust

his administrative remedies with respect to his conversion and

negligence claims, “[t]he district court therefore lacked juris-

diction to consider [his] prematurely filed claims.” Id.

(emphasis added). We also upheld the dismissal of Pesnell’s

misrepresentation claim as proper, noting that the FTCA “spe-

cifically exempts claims for misrepresentation from its waiver

of sovereign immunity,” and therefore the dismissal was also

based on lack of subject matter jurisdiction. Id. Additionally,

we held that the FTCA does not include a waiver of sovereign

immunity for constitutional tort claims. Id. Therefore, those

claims were also dismissed for lack of jurisdiction. Thus, in

7456 PESNELL v. ARSENAULT

Pesnell I, we affirmed the dismissal of all of Pesnell’s FTCA

claims on grounds of lack of subject matter jurisdiction.

[4] Because we conclude that the judgment in Pesnell I was

based on lack of jurisdiction, the FTCA’s judgment bar rule

does not preclude Pesnell from bringing his current Bivens

and RICO claims arising out of the same subject matter. Simi-

larly, this action is not barred by res judicata or collateral

estoppel because each of these doctrines requires a final judg-

ment on the merits. See Providence Health Plan v. McDowell,

385 F.3d 1168, 1174 (9th Cir. 2004); Kourtis v. Cameron, 419

F.3d 989, 994 (9th Cir. 2005).

A.

Response to the Dissent’s Argument on Jurisdiction

The dissent contends that our ruling is in conflict with

Gasho v. United States, 39 F.3d 1420 (9th Cir. 1994), in

which we held that a prior judgment in an FTCA action did

constitute a judgment bar under § 2676. Id. at 1437-38. The

Gasho case is a complex one, in that it involved the appeals

of two separate cases arising out of the seizure of an airplane

and the arrest of its occupants. Id. at 1425. The first appeal in

Gasho concerned whether the district court had erred in grant-

ing a summary judgment for the Government on claims aris-

ing from the arrest and seizure of the airplane. Id. at 1427. We

reversed the district court’s summary judgment in favor of the

Government for the claims arising from the arrest for lack of

probable cause. Id. at 1432. We affirmed the summary judg-

ment for the Government on the claims arising from the sei-

zure of the aircraft. Id. at 1439.

In the second Gasho appeal, which involved a Bivens

action, we held that a judgment for or against the Government

in the first Gasho case precluded a later Bivens action. Id. at

1437. Because we reversed the judgment on the claims arising

out of the arrest in the first appeal, there was no judgment to

PESNELL v. ARSENAULT 7457

preclude a Bivens action in the second appeal. Id. at 1438. We

held however, that the judgment for the Government arising

from the aircraft seizure precluded a later Bivens action. Id.

A claim for the wrongful seizure of an aircraft is actionable

under 28 U.S.C. § 1346(b)(1), unless the claim is excepted

under 28 U.S.C. § 2680. This, however, requires a substantive

factual determination, on the merits, of the nature of the tort;

that is whether the alleged tortious act of the agent falls within

the scope of activities exempted in § 2680. The opinion in

Gasho interpreted § 2680

as requiring the United States to first demonstrate

that the Customs or IRS agent’s tortious conduct

falls within the scope of activities exempted in

§ 2680(c). If such a showing is made, the claim is

barred. If the government fails to show that the tor-

tious conduct is exempt, the plaintiff’s claim is not

barred, assuming the plaintiff demonstrates that an

‘investigative or law enforcement officer’ committed

the intentional tort.

Id. at 1433. The Gasho court then held that “the Government

clearly met its burden” and that “[t]he actions of the Customs

agents, the seizure and detention of the aircraft, are precisely

the kinds of acts that Congress exempted from liability in

§ 2680(c).” Id. The court affirmed summary judgment for the

Government. Id.

In Gasho, the court had to make a factual determination on

the nature of the tort of unlawful seizure involved. That was

a merits determination of the nature of the tort necessary

before there could be an exclusion of the claim for lack of

jurisdiction.

The dissent refers to the dismissal of the misrepresentation

claim in Pesnell I as being the same as the judgment in

Gasho’s seizure claim. The significant difference is that in

7458 PESNELL v. ARSENAULT

Pesnell I, there was no jurisdiction to consider any “misrepre-

sentation claim” whereas a “seizure claim” is not barred until

a factual determination on the merits is made as to the nature

of the claim.

All of the claims in Pesnell I were dismissed either

expressly for lack of jurisdiction or because constitutional

torts or claims for misrepresentation are not included in the

waiver of sovereign immunity. There was no merits determi-

nation on the nature of the tort in Pesnell I, as was true for the

seizure claim in Gasho.

IV.

Timeliness of the Bivens Claims

[5] Because the California district court dismissed Pesnell’s

claims on the basis of the judgment bar, it did not determine

when the statute of limitations period accrued nor did it deter-

mine the applicability of equitable tolling or equitable estop-

pel. Either of those doctrines may extend the time for filing

under the statute of limitations and involve determination of

factual matters. For this reason, such determination is not

ordinarily amenable to resolution under Rule 12(b)(6). “In

fact, a complaint cannot be dismissed unless it appears

beyond doubt that the plaintiff can prove no set of facts that

would establish the timeliness of the claim.” Supermail

Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir.

1995). Therefore, this case must be remanded for a determina-

tion of timeliness.

We conclude that Pesnell I did not resolve the issue of

timeliness. After concluding that all of the FTCA claims were

dismissed for lack of jurisdiction the opinion in Pesnell I

stated:

While Pesnell could be permitted to amend his com-

plaint to bring his constitutional claims against indi-

PESNELL v. ARSENAULT 7459

vidual government agents pursuant to Bivens v. Six

Unknown Named Agents, . . . any such claims would

be barred by the two-year statute of limitations appli-

cable to Bivens actions in Arizona.

64 Fed. App’x at 75 (citations omitted).

The most significant aspect of this statement is that it per-

tains to Bivens claims that would be barred by the statute of

limitations “in Arizona.” The only pertinence it could have to

California is if it could be accorded some res judicata or col-

lateral estoppel effect. This Bivens action is brought in the

State of California. “Although federal law determines when a

Bivens claim accrues, the law of the forum state determines

the statute of limitations for such a claim. In California, the

statute of limitations could be either one or two years.3 Toll-

ing provisions for Bivens claims are also borrowed from the

forum state.” Papa v. United States, 281 F.3d 1004, 1009 (9th

Cir. 2002). The issue for the California District Court on

remand is whether an Arizona decision not to permit a plain-

tiff to amend his complaint to add a Bivens action against per-

sons who were not parties to the FTCA action, and thus not

parties before the court, is to be accorded res judicata status

so as to foreclose the statute of limitations determination in

the California District Court. The issue of extending the Ari-

zona statute of limitations by equitable tolling or equitable

3

On January 1, 2003, California’s statute of limitations applicable to

§ 1983 actions changed from one-year to two-years. Cal. Civ. Proc. Code

§ 335.1. The statute is not retroactive. See Maldonado v. Harris, 370 F.3d

945, 954-55 (9th Cir.2004) (holding that under California law, the exten-

sion of the personal injury statute of limitations will not apply to claims

already time-barred). But see Cal. Civ. Proc. Code § 335.1, statutory notes

(c) & (d) (indicating that claims not already barred on September 10, 2002

would benefit from the extended statute of limitations). Which statute of

limitations applies in Pesnell’s case is left for the district court to deter-

mine on remand, as is the question of whether the statute of limitations for

Pesnell’s claim is extended by the application of equitable tolling or equi-

table estoppel.

7460 PESNELL v. ARSENAULT

estoppel was not discussed or ruled on in the Pesnell I deci-

sion. The application of res judicata or collateral estoppel doc-

trines is further attenuated by the fact that Pesnell seeks to

have the doctrines of equitable tolling and equitable estoppel

applied in relation to the California statute of limitations.

[6] Furthermore, the district court did not address the ade-

quacy of the pleading for the federal and state RICO claims

or the opportunity for the plaintiff to amend to resolve any

deficiencies. The remand is also for the purpose of addressing

the RICO claims.

V.

Motion for Recusal

In this case, Pesnell filed a Motion for Recusal alleging that

Judge Collins displayed partiality because: (1) she would be

a key witness regarding misrepresentations allegedly made by

Assistant U.S. Attorney Donna Ford during the Sierra Alpine

case; (2) Judge Collins’s clerk, acting at Judge Collins’s

direction, instructed Pesnell to leave the courtroom “without

apparent cause”; (3) Judge Collins issued Pesnell an order to

show cause as to why his actions should not be dismissed for

lack of prosecution; and (4) Judge Collins allegedly knew

facts of Sierra Alpine from United States v. Emerald Finan-

cial, a case she presided over earlier.

[7] The denial of a recusal motion is reviewed for abuse of

discretion. Jorgensen v. Cassiday, 320 F.3d 906, 911 (9th Cir.

2003). Under 28 U.S.C. § 144, if “the judge before whom the

matter is pending has a personal bias or prejudice either

against him or in favor of any adverse party, . . . [he] shall

proceed no further . . . .” Under 28 U.S.C. § 455(a), “Any . . .

judge . . . shall disqualify himself in any proceeding in which

his impartiality might reasonably be questioned.” Under both

recusal statutes, the substantive standard is “ ‘[W]hether a rea-

sonable person with knowledge of all the facts would con-

PESNELL v. ARSENAULT 7461

clude that the judge’s impartiality might reasonably be

questioned.’ ” United States v. Hernandez, 109 F.3d 1450,

1453 (9th Cir. 1997) (quoting United States v. Studley, 783

F.2d 934, 939 (9th Cir. 1986)).

[8] In Liteky v. United States, 510 U.S. 540 (1994), the

Supreme Court held that the alleged bias must usually stem

from an extrajudicial source. Id. at 554-56. The Court held

that:

First, judicial rulings alone almost never constitute a

valid basis for a bias or partiality motion. In and of

themselves . . . they cannot possibly show reliance

upon an extrajudicial source . . . . Second, opinions

formed by the judge on the basis of facts introduced

or events occurring in the course of the current pro-

ceedings, or of prior proceedings, do not constitute

a basis for a bias or partiality motion unless they dis-

play a deep-seated favoritism or antagonism that

would make fair judgment impossible. Thus, judicial

remarks during the course of a trial that are critical

or disapproving of, or even hostile to, counsel, the

parties, or their cases, ordinarily do not support a

bias or partiality challenge. They may do so if they

reveal an opinion that derives from an extrajudicial

source; and they will do so if they reveal such a high

degree of favoritism or antagonism as to make fair

judgment impossible.

Id. at 555 (internal citations omitted). However, “expressions

of impatience, dissatisfaction, annoyance, and even anger” are

not grounds for establishing bias or impartiality, nor are a

judge’s efforts at courtroom administration. Id. at 555-56.

[9] Judge Snyder, who presided over the recusal hearing,

denied Pesnell’s motion for recusal finding that “plaintiff does

not argue that the presiding judge should be disqualified

based upon any bias developed outside a judicial proceeding”

7462 PESNELL v. ARSENAULT

and thus did not meet the Liteky standard. Additionally, Judge

Snyder found that Pesnell failed to “demonstrate any such

‘deep-seated favoritism that would make fair judgment

impossible.’ ” Moreover, Judge Snyder found the contention

that Judge Collins is “likely to be a material witness in the

proceeding” under 28 U.S.C. § 455(b)(5)(iv) to be without

merit because there is no showing that she would be required

to be a witness as to any material fact in the action. The dis-

trict court did not abuse its discretion in denying the recusal

motion. Each party shall bear its own costs on appeal.

AFFIRMED IN PART, REVERSED IN PART AND

REMANDED.

CLIFTON, Circuit Judge, concurring in part and dissenting in

part:

“Jurisdiction,” the Supreme Court has observed, “is a word

of many, too many, meanings.” Arbaugh v. Y & H Corp., 126

S. Ct. 1235, 1242 (2006) (quoting Steel Co. v. Citizens for a

Better Env’t, 523 U.S. 83, 90 (1998)). The majority opinion

concludes that a dismissal based on lack of “jurisdiction” does

not trigger the Federal Tort Claims Act (FTCA) judgment bar

under 28 U.S.C. § 2676. The simplicity of that approach is

appealing, but I disagree with the logic behind it and conclude

that it paints with too broad a brush. Perhaps more impor-

tantly, I believe that both in adopting that approach and in

reaching its conclusion regarding the judgment bar, the major-

ity opinion is inconsistent with our court’s precedent in Gasho

v. United States, 39 F.3d 1420 (9th Cir. 1994). Thus, I

respectfully dissent, in part.

I.

I agree completely with the majority opinion in affirming

the denial of Pesnell’s motion for recusal. I also agree with

PESNELL v. ARSENAULT 7463

the conclusions reached by the majority opinion that (1) Pes-

nell’s current claims other than for misrepresentation are not

barred by the previous litigation, and (2) we should not con-

clude, as defendants have argued, that the Bivens claims

alleged by Pesnell against the individual federal agents are

barred by the statute of limitations. Regarding the former, my

reasoning diverges from that of the majority opinion and is

explained in section IV below.

As for the limitations defense, it could be said that our

court reached such a conclusion in Pesnell v. United States,

64 F. App’x 73, 75 (9th Cir. 2003) (Pesnell I), but that was

applying Arizona’s statute of limitations. The current case has

been filed in California, and as the majority opinion notes,

ante at 7459, for a Bivens claim we look to the law of the

forum state to determine the duration of the limitations period

and the provisions for tolling. Papa v. United States, 281 F.3d

1004, 1009 (9th Cir. 2002). That the limitations period had

expired under Arizona law does not prevent Pesnell from try-

ing to bring his claim under California law. Zhang v. Dep’t of

Labor & Immigration, 331 F.3d 1117, 1118 (9th Cir. 2003)

(“A dismissal on statute of limitations grounds generally does

not bar a subsequent action in a different forum when the lim-

itations period in the second forum is longer than the first, and

has not yet expired.”). To be sure, it seems unlikely to me that

the result under California law will be any different than

under Arizona law,1 but the district court in the current action

did not make that determination, and I agree that the facts are

not sufficiently developed and clear for us to do so on appeal.

II.

The majority opinion holds that the judgment bar in 28

1

The statutory period in California is no longer than the two-year period

applied in Pesnell I from Arizona law, and California has a borrowing

statute for statute of limitations purposes that could cause even a court in

California to look to Arizona law. See Cal. Civ. Proc. § 361 (West 2006).

7464 PESNELL v. ARSENAULT

U.S.C. § 2676 applies only when the previous judgment was

entered on the merits, not based on lack of jurisdiction. Since

the earlier litigation brought by the same plaintiff on these

same facts in the District of Arizona, cumulating in Pesnell I,

ultimately resulted in dismissal of that lawsuit based on lack

of jurisdiction, the majority concludes that the Pesnell I dis-

missal does not bar the current action.

In particular, the majority opinion reasons that an action

dismissed because the court has concluded that sovereign

immunity was not waived was “not properly brought in the

first place and therefore the court had no ability to render a

judgment on the merits.” Ante, at 7454. It then continues:

A lack of subject matter jurisdiction “goes to the

very power of a court to hear a controversy; . . . [the]

earlier case can be accorded no weight either as pre-

cedent or as law of the case.” Orff v. United States,

358 F.3d 1137, 1149-50 (9th Cir. 2004) (quoting

United States v. Troup, 821 F.2d 194, 197 (3d Cir.

1987)). Thus, the dismissal of the earlier case does

not result in a “judgment” within the meaning of the

judgment bar rule of § 2676. The court in the earlier

case merely ruled that the action was not properly

brought under the FTCA.

Id. (alterations as presented in majority opinion).

The majority opinion appears premised on the proposition

that a case dismissed for lack of subject matter jurisdiction,

like Pesnell I, is a nullity that “can be accorded no weight”

and that does not result in a “judgment” within the meaning

of the judgment bar rule. Ante, at 7454-55. That reasoning

rests on a significant misunderstanding of Orff v. United

States, 358 F.3d 1137, 1149-50 (9th Cir. 2004), aff’d on other

grounds, 545 U.S. 596 (2005) — the precedent relied upon by

the majority and an opinion which I authored — and of the

significance of dismissals for lack of jurisdiction.

PESNELL v. ARSENAULT 7465

On appeal in Orff was a decision by the district court that

it lacked jurisdiction to entertain a lawsuit brought against the

federal government because the action was barred by sover-

eign immunity. See 358 F.3d at 1141-42. We affirmed that

decision. Id. at 1149. So did the Supreme Court. 545 U.S. 596

(2005). Before reaching that conclusion, though, the district

court had initially concluded that there was jurisdiction over

the action, because it believed that sovereign immunity had

been waived. See 358 F.3d at 1142. Before changing its mind

on the sovereign immunity issue,2 the district court made sev-

eral decisions on the merits in the course of ruling on motions

for summary judgment. See id. Some parties to the case, nota-

bly environmental groups which had intervened generally on

the side of the federal government and in opposition to plain-

tiffs, wanted to preserve those rulings on the merits. See id.

at 1150. We concluded that those rulings had to be vacated,

however, in a section of our opinion titled “The District

Court’s Rulings on the Merits Must Be Vacated.” Id. at 1149-

50.

That’s where the quotation from Orff relied upon by the

majority opinion in this case appeared. The substance of what

we said in Orff was not that a decision resulting in dismissal

for lack of jurisdiction should be accorded no weight. Rather,

it was that decisions (a) by the district court and (b) on the

merits (meaning subjects other than jurisdiction and sovereign

immunity — subjects that should never have been reached by

the district court because the court lacked proper jurisdiction

over the case to reach those other issues) could not be given

weight and had to be vacated.

We were not referring to our own decision. That’s why the

language quoted from Troup said that the “earlier case can be

2

The district court changed its conclusion with regard to sovereign

immunity and jurisdiction based on another decision our court issued in

the meantime, Klamath Water Users Protective Ass’n v. Patterson, 204

F.3d 1206 (9th Cir. 1999). See Orff, 358 F.3d at 1142.

7466 PESNELL v. ARSENAULT

accorded no weight.” Id. (emphasis added). The “earlier” case

was a reference to the decisions made by the district court, not

our own court’s opinion.

And, more than once, we specifically identified the portions

of the district court’s ruling that were affected by our deci-

sion: “Because the government never waived its immunity

from suit, the district court never had jurisdiction to issue its

rulings on the merits of the farmers’ appropriative water

rights, trust, and surcharge claims.” Id. at 1149. “The district

court’s rulings on the merits of the appropriative water rights,

trust, and surcharge claims shall not be binding in this or any

other case.” Id. “Because the district court lacked jurisdiction

to entertain those claims, we vacate the rulings previously

made by the district court on the merits of those claims.” Id.

at 1150.

As Orff explicitly articulated, the only decisions that were

vacated — and the only portions that could not properly be

recognized as either precedent or law of the case — were the

“rulings on the merits of the farmers’ appropriative water

rights, trust, and surcharge claims” previously (or “earlier”)

made by the district court. Notably missing from that list was

the ruling that sovereign immunity had not been waived and

thus that the court lacked jurisdiction over the claims. The

decision to that effect entered by the district court was not

vacated. Our opinion did not say that the jurisdictional ruling

by the district court was not binding. Nor did our decision in

Orff in any fashion hold or suggest that our own court’s ruling

was not binding, even though the conclusion we reached was

that sovereign immunity had not been waived and thus that

jurisdiction was lacking.

The ruling as to sovereign immunity and jurisdiction was

properly made, in turn, by the district court, by our court, and

by the Supreme Court, under the fundamental proposition that

a federal court always has jurisdiction to determine whether

it has jurisdiction. Stoll v. Gottlieb, 305 U.S. 165, 171-72

PESNELL v. ARSENAULT 7467

(1938) (“There must be admitted, however, a power to inter-

pret the language of the jurisdictional instrument and its appli-

cation to an issue before the court. . . . [Absent fraud,] [a]fter

a Federal court has decided the question of the jurisdiction

over the parties as a contested issue, the court in which the

plea of res judicata is made has not the power to inquire again

into that jurisdictional fact.” (footnotes omitted)); see Special

Investments, Inc. v. Aero Air, Inc., 360 F.3d 989, 992 (9th Cir.

2004) (“We, of course, have jurisdiction to determine our own

jurisdiction.” (citing United States v. Ruiz, 536 U.S. 622, 628

(2002))); Breed v. Hughes Aircraft Co., 253 F.3d 1173, 1177

(9th Cir. 2001). There is, therefore, no reason to disregard that

ruling or to treat it as a nullity. It was properly made by a

court with authority to make it.

The Orff decision itself demonstrates this important distinc-

tion. The majority opinion cites Orff in support of the proposi-

tion that a decision that the court lacks jurisdiction means that

the lawsuit was a nullity that should not be recognized. Yet

Orff itself was a decision which reached the conclusion that

the court lacked jurisdiction. The fact that the court lacked

jurisdiction to proceed with the case did not mean that the

court could not consider the case to determine whether it had

jurisdiction. Obviously, it could. And, the fact that the court

in Orff reached the conclusion that sovereign immunity had

not been waived and thus that the court lacked jurisdiction to

entertain the action did not mean that every decision the court

made up to that point — the analysis and findings that led to

the conclusion that jurisdiction was lacking — was a nullity

that should not be recognized thereafter as precedent or law

of the case. If that were true, then the majority opinion could

not properly cite and rely on Orff itself as precedent, and nei-

ther could other panels of our court. But Orff can and has

been cited as precedent, and not just by the majority opinion

here. See, e.g., Allen v. Gold Country Casino, 464 F.3d 1044,

1046 (9th Cir. 2006), cert. denied, 127 S. Ct. 1307 (2007).

Similarly, the logic of the majority opinion would suggest that

the Supreme Court’s decision in Orff v. United States, 545

7468 PESNELL v. ARSENAULT

U.S. 596 (2005), was also a nullity and should not properly

be recognized as precedent, either, since it also came to the

conclusion that sovereign immunity had not been waived and

thus that jurisdiction was lacking. But that’s not so.

What each of the Orff courts decided with regard to issues

properly before them does count, as precedent and, where

appropriate, as law of the case. Other rulings made by the dis-

trict court when it improperly thought that it had jurisdiction

were vacated, but the decision that sovereign immunity had

not been waived remained in place.

III.

In Gasho, our court considered the appeals of two separate

actions filed by the same plaintiffs. 39 F.3d at 1425. The first

action was an FTCA action against the federal government for

false arrest and false imprisonment, intentional infliction of

emotional distress, and abuse of process. Id. at 1427. The dis-

trict court granted the government summary judgment as to

most of the claims and dismissed one for failure to state a

claim. Id. The plaintiffs then filed a Bivens action against

individual federal employees, specifically Customs agents,

claiming violation of Fourth and Fifth Amendment rights. Id.

at 1425, 1427. The district court dismissed the Bivens action

based upon the first lawsuit and the § 2676 judgment bar.

Gasho, 39 F.3d at 1427. Both dismissals were appealed, and

our court considered the two appeals together. Id. at 1425.

Gasho was a complicated case. Our court affirmed the dis-

missals by the district court in part, but also reversed them in

part, remanding some to the district court for further proceed-

ings. Id. at 1439. The decision explained why different results

were reached regarding the various claims alleged by the

plaintiffs. What matters for purposes of our case is that Gasho

affirmed the dismissal of some of the Bivens claims asserted

against the Customs agents pursuant to the § 2676 judgment

bar, based upon the prior dismissals of similar claims against

PESNELL v. ARSENAULT 7469

the government on precisely the same ground that Pesnell I

dismissed some of Pesnell’s claims against the federal gov-

ernment — that the court lacked jurisdiction over the particu-

lar claim because sovereign immunity had not been waived.

In Gasho we applied § 2676 to bar the related claims against

the individual federal agents, establishing a precedent which

the majority opinion here disregards. It is the preclusive effect

that our court in Gasho gave to two rulings in that case that

require this conclusion.

The first ruling related to the district court’s grant of sum-

mary judgment in favor of the government on the claim by the

Gasho plaintiffs for intentional infliction of emotional dis-

tress. 39 F.3d at 1432. The Gasho court reviewed each factual

basis for this claim separately. Id. at 1432-36. On the part of

the claim arising from the seizure of the plaintiffs’ aircraft,

Gasho held that “[t]he actions of the Customs agents, the sei-

zure and detention of the aircraft, are precisely the kinds of

acts that Congress exempted from liability in § 2680(c).” Id.

at 1433. The Gasho court then held that this determination

precluded the effort of the plaintiffs to pursue a similar claim

against the individual federal employees, because of the

FTCA judgment bar. Id. at 1438.

The second ruling involved Gasho’s resolution of the plain-

tiffs’ abuse of process claim. The district court had dismissed

this claim under Fed. R. Civ. P. Rule 12(b)(6), ruling that the

plaintiffs had failed to state a claim under Arizona tort law.

Gasho, 39 F.3d at 1436. Instead of analyzing the relevant Ari-

zona tort law, Gasho upheld the district court on the grounds

that “[t]he tortious acts alleged by the Gashos involved deten-

tion of goods and merchandise by Customs and, therefore, the

claim is barred under the FTCA’s exemption for Customs

detentions contained in 28 U.S.C. § 2680(c).” Id. Gasho also

gave this ruling preclusive effect, explicitly stating that the

court “reject[s] the appellants’ argument that the dismissal of

the abuse of process claim for failure to state a claim is not

a ‘judgment’ on the merits under 28 U.S.C. § 2676. In any

7470 PESNELL v. ARSENAULT

case, the claim is barred by the Customs exception of 28

U.S.C. § 2680(c).” Id. at 1438 n.17 (citation omitted).

In both of these instances, the government prevailed

because the court did not have subject matter jurisdiction

absent a waiver of sovereign immunity. Yet even though these

were “jurisdictional” victories, our court held in Gasho that

they triggered the FTCA judgment bar, such that the plain-

tiffs’ similar claims against the individual employees were

precluded and had to be dismissed.

Pesnell I’s holding as to the misrepresentation claim is

indistinguishable. Pesnell I rejected the misrepresentation

claim brought by Pesnell against the government because 28

U.S.C. § 2680(h) specifically carves out misrepresentation

from the FTCA’s waiver of sovereign immunity. See 64 F.

App’x at 74 (stating that “[t]he FTCA specifically exempts

claims for misrepresentation from its waiver of sovereign

immunity” and citing FDIC v. Craft, 157 F.3d 697, 707 (9th

Cir. 1998)). Just as Gasho read § 2676 as barring any addi-

tional actions against individual federal agents arising from

the seizure of the Gashos’ plane, because § 2680(c)’s exemp-

tion for Customs detentions foreclosed any liability for this

seizure, so too must Pesnell I’s ruling on § 2680(h) give rise

to application of the judgment bar against any further litiga-

tion targeting the individual agents as defendants based on the

agents’ alleged misrepresentations.

The majority opinion attempts to distinguish Gasho this

way: “In Gasho, the court had to make a factual determination

on the nature of the tort of unlawful seizure involved. That

was a merits determination of the nature of the tort necessary

before there could be an exclusion of the claim for lack of

jurisdiction.” Ante, at 7457. With respect, I don’t know what

makes that a meaningful distinction. Gasho’s so-called “mer-

its determination” was a ruling that the court had no jurisdic-

tion because Congress had not waived sovereign immunity.

PESNELL v. ARSENAULT 7471

That was exactly the same ruling made to dismiss Pesnell’s

misrepresentation claim against the federal government.

Gasho was not a case where the plaintiff simply failed to

succeed on the merits (for instance, by failing to prove an ele-

ment of the alleged tort) of a claim for which there was a

waiver of sovereign immunity and thus jurisdiction, as the

court’s handling of the abuse of process claim demonstrates.

See 39 F.3d at 1436. Instead, Gasho was a case where the

court could not entertain the claim at all, since sovereign

immunity deprived it of jurisdiction. Why should the length

of discussion or the amount of analysis required before the

court concludes that there is no jurisdiction matter to whether

the judgment bar applies? The majority opinion does not

explain.3 There is nothing in Gasho that invites such a distinc-

tion. If the proffered distinction is meant to serve § 2676’s

goal of conserving governmental resources, see Gasho, 39

F.3d at 1437, then the majority’s line drawing is an arbitrary

exercise completely unmoored from both the text of the stat-

ute — text which is actually the best reflection of Congress’s

policy election — and our case law.

Gasho cannot properly be read as standing for less than the

proposition dictated by its facts: an adverse ruling resulting

from an explicit exception to the FTCA’s waiver of sovereign

3

The majority suggests that there might be an inherent structural differ-

ence between § 2680(c) and § 2680(h), ante, at 7457-58, but no such cate-

gorical distinction exists. Some cases, even if ultimately dismissed under

§ 2680(h), still require a court to make a determination to reach such a dis-

missal. See United States v. Fowler, 913 F.2d 1382, 1387-88 (9th Cir.

1990) (dismissing a counterclaim that alleged negligence, which would

ordinarily be cognizable under the FTCA, on the basis that it was really

an attempt to recover for misrepresentation). The majority’s distinction is

not one dividing § 2680(c) from § 2680(h), but one that turns on how art-

fully, or ineptly, an action was plead. As explained in the text, there is no

reason to condition § 2676’s applicability on whether the plaintiff’s first

suit craftily pleaded an exempt claim under some other guise, or, as in

Pesnell I, basically wrote one of the FTCA’s exemptions directly into the

complaint.

7472 PESNELL v. ARSENAULT

immunity is a judgment for purposes of § 2676, so that the

statute bars similar litigation against the individual employ-

ees.

The government can rely on general preclusion principles

(whether called issue or claim preclusion, collateral estoppel

or res judicata) as much as any other litigant, so the statutory

bar set forth in § 2676 presumably reaches further or adds

something more. See Will v. Hallock, 126 S. Ct. 952, 960

(2006) (describing § 2676 as closer to res judicata than immu-

nity and as functioning “in much the same way” as res judi-

cata, but also observing that “the statutory judgment bar is

arguably broader than traditional res judicata”). Gasho

decided that certain dismissals for lack of “subject matter

jurisdiction” based on sovereign immunity trigger the judg-

ment bar under § 2676. The refusal of the majority opinion to

follow that precedent is unjustified.

IV.

I agree with the majority that the judgment bar does not

completely prevent Pesnell from bringing his current RICO

claims, but bars those claims only to the extent that they are

predicated on certain other acts. In particular, Gasho does not

require that the judgment bar be applied to Pesnell I’s dis-

missals of his conversion and negligence claims. These were

also dismissed due to a lack of jurisdiction, but as I noted at

the outset, “jurisdiction . . . is a word of many, too many,

meanings.” Arbaugh, 126 S. Ct. at 1242 (internal quotations

marks omitted).

Not all dismissals for lack of jurisdiction should be treated

alike. With regard to Pesnell’s claims for conversion and neg-

ligence, the absence of jurisdiction stemmed from a failure to

exhaust, a defect that could be cured. 64 F. App’x at 74. The

failure to exhaust was not a permanent problem, such as the

absolute non-existence of a waiver of sovereign immunity.

Instead it merely reflected a failure to conform to the condi-

PESNELL v. ARSENAULT 7473

tions placed on an existent waiver of sovereign immunity.

Although these dismissals and the one relating to misrepre-

sentation all fall under the broad heading of “dismissals for

lack of jurisdiction,” there is a difference between them that

is material. When Congress explicitly carves out an exception

to its waiver of sovereign immunity, it is flatly rejecting lia-

bility. When Congress waives sovereign immunity but

imposes exhaustion requirements, it is accepting liability and

channeling the claims in a specific way. It is logical to hold

that rulings falling into the first category constitute judgments

for § 2676, while rulings in the second category do not. That

would permit the judgment bar to serve the two purposes our

case law has enunciated, preventing dual recoveries and

duplicate lawsuits, Gasho, 39 F.3d at 1437; Kreines v. United

States, 959 F.2d 834, 838 (9th Cir. 1992). At the same time

it would keep § 2676 from being unduly harsh to plaintiffs

bringing claims for harms that Congress has agreed, in princi-

ple, are cognizable. That is, therefore, the distinction I would

draw.

I would also exempt from the operation of § 2676 those

claims denied in Pesnell I because the FTCA was silent on the

claim and no other waiver of sovereign immunity was

adduced, not because the FTCA contained a specific waiver

exception. The judgment bar relates only to a “judgment in an

action under section 1346(b) of this title,” 28 U.S.C. § 2676,

and these claims did not constitute actions under 28 U.S.C.

§ 1346(b). Indeed, the claims did not fall under any statute.

See Pesnell I, 64 F. App’x at 74-75 (holding that Pesnell’s

equitable claims cannot fit under the Administrative Proce-

dure Act’s waiver and he had “not established an independent

basis of federal jurisdiction,” as well as noting that the FTCA

did not contain a waiver for constitutional claims). That is

why the claims to that effect filed against the government

failed. But the text of § 2676 does not cover these other legal

theories, outside § 1346(b), and thus I would not apply the

judgment bar to the similar claims filed against the individual

agents.

7474 PESNELL v. ARSENAULT

Gasho requires us to interpret § 2676 as barring those por-

tions of Pesnell’s RICO claims that are predicated on the

same alleged misrepresentations which were the subject of

Pesnell I. The district court’s flat dismissal of the entirety of

Pesnell’s current lawsuit under the FTCA judgment bar was

incorrect, however, since the bar does not extend any further

than the misrepresentation claims.

V.

In the end, my disagreement with the majority opinion has

only a limited effect on the outcome of this particular appeal.

I believe that Pesnell’s current claims based on misrepresenta-

tion are precluded by the § 2676 judgment bar. For various

reasons his other claims survive, at least theoretically. But the

gap in reasoning is wide and significant. By treating a deci-

sion to dismiss based on lack of jurisdiction as a nullity that

may be disregarded because it is a decision that “can be

accorded no weight either as precedent or as law of the case,”

ante at 7454, the majority opinion conflicts with our prece-

dent in Gasho and improperly denigrates the precedential

value of untold numbers of prior decisions based on similar

grounds. I respectfully dissent.