-DLM KRIVITSKY et al v. UNITED STATES OF AMERICA, No. 1:2010cv00219 - Document 30 (D.R.I. 2011)
Court Description: MEMORANDUM AND ORDER granting the Government's 24 Motion to Dismiss for Lack of Jurisdiction. So Ordered by Chief Judge Mary M. Lisi on 12/16/2011. (Duhamel, John)
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-DLM KRIVITSKY et al v. UNITED STATES OF AMERICA Doc. 30 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND DONALD H. KRIVITSKY JOSEPH S. JABLECKI, individually and as co-owners of SUD AVIATION - SNIAS (Aerospatiale) Alouette II Model SE-3130 Helicopter Serial Number 1312, Plaintiffs, v. C.A. No. 010-219-ML UNITED STATES OF AMERICA, Defendant. MEMORANDUM AND ORDER The dispute in this certificate issued in plaintiffs. The Airworthiness 2004 for a certificate Representative Administration ("FAA") . in 2008. litigation concerns an airworthiness helicopter was ("DAR") issued of the now owned by by a Federal the Designated Aviation The certificate was suspended by the FAA The matter before the Court in this case is the United States' motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12 (b) (1) for lack of subject matter jurisdiction. I. Facts Plaintiffs Donald H. Krivitsky ("Krivitsky"), a Rhode Island resident, and Joseph S. Jablecki ("Jablecki"), an Alabama resident, formed CAVU Copters, Inc. ("CAVU Copters") air tours in Mobile, Alabama. Complaint to conduct helicopter <J[ 15. On May 6, 2006, 1 Dockets.Justia.com CAVU Copters purchased a French-manufactured 1959 Alouette II Model SE-3130 Helicopter, "Helicopter") Serial Number 1312, Registration N225RW for the planned air tours business. (the Complaint <[ 16. From the materials submitted by the parties, it appears that the Helicopter was manufactured in France in.1959, after which it was delivered aircraft. to Gov.'s the Ex. German 3a <[ Air Force 10. for use Forty-three as years a military later, in November 2002, the Helicopter was canceled in the German military aircraft register. It was then sold to private parties before it was resold to CAVU Copters. Id. <[ 11, 13-14. At the time of CAVU Copters's purchase, the Helicopter had a Standard Airworthiness Certificate ("SAC") in the Normal Category, which was necessary to transport passengers for hire. 1 <[<[ 17, 18. Complaint The SAC had been issued for the Helicopter on July 24, 2004 by DAR Robert R. Cernuda ("Cernuda") on behalf of the FAA after Cernuda had conducted an airworthiness inspection. <[ 14, Gov. Mem. 2. Certificate," the Complaint According to the "Application for Airworthiness SAC was issued pursuant to 14 C.F.R. § The other type of classification is a Special Airworthiness Certificate in the Experimental Category. Aircraft with this classification may not be used to carry passengers or cargo for hire. Complaint <[ 10-13. An appropriate and current airworthiness certificate is required to operate a civil aircraft within the United States. 14 C.R.F. §§ 21.183, 91.203. See Mike's Contracting, LLC v. United States, 92 Fed. Cl. 302, 304 n. 1 (Fed. Cl. 2010). 2 21.183(d) 2 , applicable to "[u]sed aircraft and surplus aircraft of the U.S. Armed Forces." In late 2006, See Gov.'s Ex. 3a the FAA began a FAA, it documentation discovered of many during of Gov. Mem. 2. the these 19. comprehensive, review of Alouette helicopter records. the CJ[ review that helicopters, nationwide According to "the recorded including [the Helicopter] failed to properly support the issuance of a [SAC] in the normal category." Gov.'s Ex. 3a CJ[ 20. On November 16, 2006, shortly before starting the air tours operations, Krivitsky and Jablecki received a notification letter from the FAA stating that any further operation of the Helicopter would be contrary to the Code of Federal Regulations. notification effectively grounded the Helicopter. Meanwhile, Complaint This <JI 23. in May 24, 2007, Krivitsky and Jablecki purchased the Helicopter from CAVU Copters. Complaint CJ[ 19. after FAA employees inspected the Helicopter, On August 26, 2008, the FAA issued an Emergency Order of Suspension (the "Emergency Order") to Krivitsky and Jablecki, which suspended the Helicopter's SAC in the Normal Category. Order, Complaint CJ[ 24, Gov. Mem. 2. According to the Emergency the Helicopter was not eligible for an SAC in the Normal 2 14 CFR 21.183 (d) was applicable originally to "Other aircraft" until it was amended in October 2006 to apply to "Used aircraft and surplus aircraft of the U.S. Armed Forces." 14 CFR 21.183 (c) is applicable to "Import Aircraft." Subsections (c) and (d) have different requirements for the issuance of an SAC. 3 Category, notwithstanding issuance of such a certificate four years earlier. Complaint 25. The Emergency Order stated, inter alia, that the Helicopter was not eligible for an SAC as an "import aircraft" under 14 CFR 21.183(c) because (1) a required review, "if done properly," of historical records would have disclosed that the Helicopter had not been issued an SAC when it was delivered for use by the German military; and (2) a Certificate of Airworthiness for Export by the French aviation authority lacked a statement that the Helicopter (a) had been examined and was found to comply with United States aviation regulations, and (b) complied with the type design and was in condition for safe operation. 30 and page 10. The Emergency Order also Gov.'s Ex. 3a set forth that the Helicopter was not entitled to an SAC as "Other Aircraft" under 14 CFR 21.183(d) because (1) the applicant failed to present sufficient evidence that the Helicopter conformed to the approved type design; and (2) the FAA DAR improperly found that the Helicopter conformed to the approved type design because he "failed to follow published FAA certification procedures and properly make the required conformity determination, and hence, erroneously found that [the Helicopter] was in condition for safe operation." Id. Page 10. In March 2009, the FAA issued a Special Airworthiness Certificate in the Experimental Category for the Helicopter, which permitted operation of the Helicopter for research, flight testing, 4 crew training, and exhibition. Gov. Mem. 2. According to the plaintiffs, the FAA has conceded, and an Administrative Law Judge ("ALJ") has found, that the Helicopter was erroneously issued SAC in the Normal Category. II. Complaint an 26. Procedural History Krivitsky and Jablecki filed a claim with the FAA regarding this matter. That claim was denied on October 15, their subsequent request for Based on the materials reconsideration. 2008, as was Complaint submitted with the parties' 4. memoranda, Krivitsky and Jablecki challenged the Emergency Order before the National Transportation Safety Board ("NTSB") . After an ALJ granted summary judgment in favor of the Administrator in December 2008, the NTSB reversed the decision and remanded the case for further fact finding. following an evidentiary Administrator's Helicopter. On June 25, 2009, in an oral bench decision Emergency hearing, Order and the suspended Gov.'s Ex. 4, Page 19 of 23. "the Administrator has erred in the ALJ affirmed the SAC of the the The ALJ concluded that issuance of this standard airworthiness certificate, but the evidence is also clear that it shouldn't have appropriately, suspension." been in this [issued] case, and done the an Administrator emergency order has of Id. Page 18 of 23. On October 14, 2009, Krivitsky and Jablecki filed a one-count complaint in United States District Court 5 for the District of Columbia against the United States of America (the "Government") pursuant to the Federal Tort Claims Act, 28 U.S.C. § 1346(b) (1). Complaint The 4. <JI plaintiffs negligently in issuing the financial losses as a alleged SAC in 2004 result. In that the FAA acted and that they suffered other words, Krivitsky and Jablecki are not challenging the 2008 Emergency Order in this case. Rather, their claim is based on the erroneous (and, as they allege, negligent) issuance of the 2004 SAC prior to the plaintiffs' purchase of the Helicopter and their investment in the helicopter tours enterprise. On January 19, 2010, the Government filed a motion to dismiss the complaint on the ground that venue was improper in the District of Columbia because neither plaintiff resided there and the related conduct - the inspection of the Helicopter and issuance of the SAC -occurred in Florida. The Government's motion was granted and the case was transferred to this Court on April 29, 2010. Following a Rule 16 conference on September 15, parties engaged in discovery. 2010, the On September 1, 2011, the Government filed a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12 (b) ( 1) the for lack of subject matter juris diction. Government asserted that ( 1) Cernuda was employee when he issued the SAC; (2) waived for its sovereign immunity Specifically, not a government the United States has not claims arising out of misrepresentation; and (3) the plaintiffs cannot plead a cause of 6 action under state law. The plaintiffs filed an objection on October 27, 2011, rejecting the Government's contentions entirely. On November 7, 2011, the Government filed a reply to the objection. III. Standard of Review Rule 12 of the Federal Rules of Civil Procedure governs the dismissal of a complaint. matter jurisdiction A motion to dismiss for lack of subject- pursuant to Fed. R. Civ. P. 12(b) (1) is reviewed under the identical standard as a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b) (6). See, Puerto Rico Tel. Co. v. Telecomm. Regulatory Bd. of Puerto Rico, 189 F.3d 1, 14 n.10 Cir. 19 99) ("The standard of review . . (1st . is the same for failure to state a claim and for lack of jurisdiction."). The Court accepts as true "the well-pleaded factual allegations of the complaint" and draws "all reasonable inferences therefrom in the plaintiff's favor." Martin v. Applied Cellular Tech., Inc., 284 F.3d 1, 6 (1st Cir. 2002); McCloskey v. Mueller, 446 F.3d 262, 266 (1st Cir. 2006). A complaint need not contain "detailed factual allegations;" however, it is subject to dismissal if it fails to state facts sufficient to establish "a claim to relief that is plausible on its face." 550 U.S. 555, 570, 127 S.Ct. 1955, Bell Atl. Corp. v. Twombly, 1965, 1974, 167 L.Ed.2d 929 (2007); S.E.C. v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010). In its analysis, the Court ignores "conclusory allegations, improbable 7 inferences, and unsupported speculation." Hostar Marine Transp. Sys., Inc., v. United States, 592 F.3d 202, 207 (1st Cir. 2010). In the context of a Rule consider extrinsic materials 12 (b) (1) and, to motion, the Court "may the extent it engages in jurisdictional factfinding, is free to test the truthfulness of the plaintiff's allegations" without converting a motion to dismiss to a motion for summary judgment. Dynamic Image Tech. , Inc. v. United States, 221 F.3d 34, 37-38 (1st Cir. 2000) (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 890-91 (1st Cir. 1977)). III. (A) Discussion The FAA Certification Process The Administrator of the FAA (the "Administrator") is tasked with promoting safe flight of civil aircraft in air commerce by, inter alia, "prescribing . regulations and minimum standards in the interest of safety for overhauling aircraft . timing and manner overhauling ... " . inspecting, servicing, equipment and facilities for, of, the 49 U.S.C. § 44701 and and the inspecting, servicing, (a) (1), United States v. S.A. Empresa de Viacao Aerea Rio Grandense (2). (Varig Airlines), and 467 U.S. 797, 804, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). To that end, "the FAA has promulgated a comprehensive set of regulations delineating the minimum safety standards with which the designers and manufacturers must comply before marketing their 8 products." Id. at 804-805 (summarizing certification process). Prior to introducing a new type of aircraft, a manufacturer must first obtain a type certificate for an aircraft which requires a finding by the Administrator "that the aircraft designed and regulations manufactured, and minimum performs standards 4470l(a) ... " 49 U.S.C. § 44704 (a). properly, prescribed is properly and meets under the section Varig Airlines at 805-806. Mass production of an approved aircraft necessitates a production certificate for which "the manufacturer must prove to the FAA that it has established and can maintain a quality control system to assure that each aircraft will meet the design provisions of the type certificate." Id. at 806 (citing 14 CFR §§ 21.139, 21.143 (1983)). Before an aircraft may operate as a civil aircraft in air commerce, each aircraft requires an airworthiness certificate that warrants "that the aircraft's conforms to its type certificate and, after inspection, its condition for safe operation." 44704(d) (1) 3 • Varig Airlines at 806; 49 U.S.C. § Holbrook v. United States, 49 U.S.C. § 44704 (d) (1) provides: The registered owner of an aircraft may apply to the Administrator for an airworthiness certificate for the aircraft. The Administrator shall issue an airworthiness certificate when the Administrator finds that the aircraft conforms to its type certificate and, after inspection, is in condition for safe operation. The Administrator shall register each airworthiness certificate and may include appropriate information in the certificate. The certificate number or other individual designation the Administrator requires shall be displayed on the aircraft. The Administrator may include in an airworthiness certificate terms 9 749 F. Supp.2d 446, 448 (S.D.W.Va. background of FAA certification) . the aircraft at any time, 2010) (summarizing regulatory The Administrator may reinspect 49 U.S.C. §44709(a), and may issue an order "amending, modifying, suspending, or revoking" a certificate if, inter alia, "the Administrator decides after conducting a reinspection, reexamination, or other investigation that safety in air commerce or air transportation and the public interest required that action." 49 U.S.C. §44709(b). Because the FAA does not have the necessary personnel to complete such an "elaborate compliance review process," including the issuance of airworthiness certificates, the Administrator is authorized to "delegate certain inspections responsibilities to properly qualified persons." 807; 14 CFR 183.29 (1984). and certification Varig Airlines at "Subject to regulations, supervision, and review the Administrator may prescribe, the Administrator may delegate to a qualified private person, or to an employee under the supervision examination, of that person, testing, and a matter inspection related necessary to to --(A) the issue a certificate under this chapter; and (B) issuing the certificate." 49 u.s.c. A § 44702 (d) (1). 1983 amendment to Part 183 of the Federal Aviation Regulations established DARs as a new category of persons appointed required in the interest of safety. 10 to act as representatives of the certain certification functions 1958. § 48 Fed. Reg. 183.33, Administrator in performing of the Federal Aviation Act of 16176-01 (April 4, 1983)). Pursuant to 14 CFR a DAR is authorized "within limits prescribed by and under the general supervision of the Administrator," to perform, for a fee, "examination, inspection, and testing services necessary to issue, and to determine the continuing effectiveness of, certificates, including issuing certificates, as authorized by the Director of Flight Standards Service in the area of maintenance or as authorized by the Director of Aircraft Certification Service in the areas of manufacturing and engineering." 14 C.F.R. § 183.33. (B) The Federal Torts Claims Act (1) "Employee of the Government" The Federal Torts Claims Act ("FTCA"), 28 U.S.C. § 1346(b), waives sovereign immunity for suits against the United States and permits a civil action against the government "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 government 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) (emphasis added). An "employee of the government" employees of any federal agency . . . of a federal agency in an "officers or and persons acting on behalf official 11 includes capacity, temporarily or permanently in the service of the United States, whether with or without compensation." contractors, however, 28 U.S.C. § 2671. are excluded from government Leone v. United States, 910 F.2d 46, waiver of sovereign immunity . . . contractors.") . Acts of independent In other words, 49 liability. (2d Cir. 1990) ("The FTCA does not extend to independent subject matter jurisdiction in FTCA cases depends on government employee status. The decisive factor in determining whether an individual is a federal employee or' an independent contractor is "the amount of control the federal government has over the physical performance of the individual." 1079, 1080-81 Charlima, Inc. v: United States, 873 F.2d 1078, (8th Cir. 1989) (noting that courts addressing this issue have relied on the factors set out in Agency§§ 2 & 220 (1957)). the day-to-day contractor be States, 412 physical 521, (1973) (holding that, (Second) of Only if the government has control over performance considered a U.S. federal 528, 93 of the individual employee. Logue v. S.Ct. 2215, 37 may a United L.Ed.2d 121 where deputy United States marshal had no authority to control activities of county sheriff's employees, they were employees of contractor with the United States and not employees of a federal agency); United States v. Orleans, 425 U.S. 807, 814-15, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976) (holding that employees of community action agency receiving all its funding from the United States were not federal employees for purposes of the 12 FTCA). In Charlima, addressed the Inc. v. United States, question of whether employees under Section 2671. 873 F.2d at 1080-82. DARs the are Eighth Circuit considered federal Charlima, Inc. v. United States, Charlima brought a suit against the United States claiming that a DAR was negligent in failing to discover damage to an airplane Charlima resulted in withdrawal of the was purchasing, airworthiness which damage certificate. The United States District Court for the District of Nebraska found that the government was immune from discretionary function exception. The Eighth Circuit Court tort liability under the Charlima, 873 F.2d at 1079. of Appeals, in affirming the district's court's decision to grant the government's motion for summary judgment, held that the DAR "was not a federal employee and that the government is therefore not liable under the [FTCA]." Id. The Charlima Court concluded that "the FAA does not control the day-to-day operations of designated airworthiness representatives . while the FAA acts generally as an overseer, manage the details of a designated representative's supervise him in his daily investigative duties." The Court noted relationship with that "the [ DARs], FAA nor has are it does not no the or Id. at 1081. customary they on work contractual FAA payroll or otherwise compensated by the FAA . . . Instead, a [DAR] is paid by the certificate applicant ... " Id. 13 Although the government has promulgated specific regulations governing the inspection process with which the DAR has to comply, the FAA does not control a DAR's day-to-day inspection duties. The Appellate Court pointed to the legislative history of the Civil Aeronautics Act, which "indicates that if Congress did not allow delegation of inspection to private persons, the Civil Aeronautics Administration would be required to employ 10,000 additional personnel." 81st Cong., 1st Sess. 3 (1949)). Id. (citing S.Rep. No. 803, The election by Congress to delegate FAA inspection duties to private persons indicates that "Congress did not intend to bring federal employment." [DARs] within the scope of Id. In declining to hold the government liable for acts of the DARs, the Charlima Court echoed the concern expressed by the First Circuit in Zabala Clemente v. United States, that the "end result of attaching liability to government attempts at all levels to supplement the safety precautions of private individuals and businesses, even when there is no reliance on the government's assistance, is far more likely to increase the reluctance of the Charlima, government to involve itself in such matters ... " F.2d at 1082 1140, 1150 873 (quoting Zabala Clemente v. United States, 567 F.2d (1st Cir 1977), cert. denied, 435 U.S. 1006, 98 S.Ct. 1876, 56 L.Ed.2d 388 (1978)); see also Leone v. United States, 910 F.2d 46 (2d certificate Cir. 1990) (in had been case negligently 14 claiming issued, that airman holding that medical private physicians designated by the FAA as Aviation Medical Examiners are not government employees for purposes of the FTCA) . In the case before this Court, the record reflects that, on July 21, 2004, DAR Cernuda signed and issued an SAC for the Helicopter after he "worked to secure the necessary inspections, and assure compliance to both the Type Certificate Data Sheet and the pertinent Federal Aviation Regulations ... " 4. Cernuda Affidavit Although Cernuda now suggests that he "worked in conjunction with Carlton Kitchen" ("Kitchen"), an FAA employed Aviation Safety Inspector ("ASI"), id. . 6, it appears that Kitchen's role was limited to reviewing certification packages submitted by Cernuda for completeness only. In his affidavit, Kitchen explains that his responsibility as Assistant Advising ASI involved the monitoring and oversight of Cernuda and other OARs in the Fort Lauderdale area, including, inter alia, "conducting yearly meetings with the OARs" and ensuring that they are qualified through "periodic observations of the OARs as they perform their duties." in Kitchen's activities or Cernuda's indicates that Kitchen 9-11. descriptions Kitchen or any of their other Nothing respective FAA employee performed "day-to-day oversight" of Cernuda' s physical performance. Cernuda's suggestion that the Administrator "has the ultimate authority" to issue SACs, Cernuda Affidavit 12, fails to acknowledge that the Administrator is permitted to delegate the 15 issuance of SACs to DARs like Cernuda, performed for more than twenty years. a task which Cernuda Moreover, it is undisputed that Cernuda did not receive payment or employment benefits from the FAA and that, although Cernuda received initial and recurrent training from the FAA, he was responsible for his own travel expenses and set his own training schedule. Cernuda received a fee from certificate applicants for his services and had to provide for his own tools, equipment, and office or other work space. In sum, there is nothing to distinguish Cernuda from the DARs in Charlima and, like those DARs, Cernuda issued the SAC for the Helicopter in his capacity as an independent contractor. Because claims under the FTCA are limited to claims for damages caused by negligent or wrongful acts by federal employees while acting within the scope of their employment, this Court has no subject matter jurisdiction over this case. (2) "Misrepresentation" Even if Cernuda were deemed an FAA employee, plaintiffs's claim is subject to a further exception to the government's waiver of sovereign immunity under the FTCA. The United States is immune from arising liability for "[a]ny claim out of misrepresentation, deceit, or interference with contract rights." 28 U.S.C. States, § 2680(h) 326 F.3d 8, (emphasis 13 claims that government added); (1st Cir. (a) Muniz-Rivera v. United 2003) (holding that homeowner's failed to warn them of propensity to 16 flood or advise them of need for flood insurance and (b) negligently inspected their homes was barred by misrepresentation exception to FTCA's waiver of sovereign immunity). The plaintiffs in Muniz-Rivera, with the assistance of loans extended by federal agencies, purchased homes constructed in an area later revealed as being prone to flooding. The district court dismissed the claim for lack of subject matter jurisdiction and the First Circuit affirmed. The plaintiffs alleged, inter alia, that the "government's intimate role in approving, financing, and monitoring the housing projects implicitly conveyed an assurance that the homes constitute secure domiciles, and that the lack of any warning calculated to alert the plaintiffs to the likelihood of future harm reinforced those implied assurances." Id. at 13. The First Circuit concluded that, "[e]ven if such acts and omissions were negligent . the misrepresentation exception precludes the assertion of a cause of action against the government based upon either miscommunication or non-communication of the information in question." Id. (citations omitted). With respect to the government's home inspections Court that those held misrepresentation were claims exception. contention plaintiffs' negligent, were The also the Muniz-Rivera precluded explained by the that "[a] negligent inspection, in and of itself, cannot cause injury. Harm 17 Court the that can occur (and thus, liability can attach) only if the inspection leads either to the communication of inaccurate information or to a failure to communicate precautionary information." Id. at 13-14. In United States v. Neustadt, the Supreme Court concluded that "in enacting section 2680(h), Congress claims arising out misrepresentation.'" of negligent, as 1294, 6 L.Ed.2d 614 (1961)). "the essence well as deliberate, Muniz-Rivera v. United States, 326 F.3d at 13 (quoting United States v. Neustadt, that 'clearly meant to exclude of an The action 366 U.S. 696, 702, 81 S.Ct. Supreme Court further explained for misrepresentation, whether negligent or intentional, is the communication of misinformation on which the recipient relies." S.Ct 1089, 75 L.Ed.2d 67 The First Block v. Neal, 460 U.S. 289, 296, 103 (1983). Circuit has specifically distinguished misrepresentation claims as "traditional and commonly understood" from misrepresentation "as a method of accomplishing various types of (other) tortious conduct." F.2d 1, Torts). 4 (1st Cir. Jiminez-Nieves v. United States,682 1982) (citing the Restatement With respect to the second category, (Second) of the Court cited examples of inducing a person to eat poisoned chocolates (battery), restraining a person under false claim of legal authority (false imprisonment), and causing an accident by signaling a wrong turn (negligence). I d. at By 4. contrast, the tort of misrepresentation "protect[s] a person's interest in obtaining true 18 information (from those with a duty to provide it) when making up his mind about an important matter." Id. at 4. essential element of misrepresentation remains plaintiff himself provided." upon the false The "one reliance by the information that has been Id. at 4 (citing Restatement (Second) of Torts s 525 at 55, s 537 at 80, s 552 at 126, and s 552C at 141). The plaintiffs, in their complaint, stated that the Helicopter had been issued an SAC in the Normal Category at the time they purchased it from CAVU Copters, [their] business purposes" and that it was "imperative to that the Helicopter had such a certificate "because the intended use of the Helicopter was to transport passengers for hire." Complaint <J[ also purchase alleged that, in addition to the 21. The plaintiffs cost of the Helicopter, they expended large sums of money for acquisition of permits and advertising the air tours service. 23. Complaint <j[<j[ 22, Because the SAC was subsequently withdrawn, the plaintiffs could no longer "use the Helicopter for the business purposes for which the Helicopter was specifically purchased." Although plaintiffs style their complaint Id. as <J[ 34. one negligence related to the erroneous issuance of the SAC, for it is clear that the basis for their claim (and for the economic harm they assert) is their reliance on the erroneously issued SAC in purchasing the Helicopter and incurring further expenditures to start an air tours business. Had the DAR not issued an SAC in the 19 Normal Category for the Helicopter, the aircraft would have been of no use to the plaintiffs in their planned venture and they would not have purchased it or proceeded to obtain permits and engage in advertising. In other words, the plaintiffs are not alleging that they have sustained direct injuries, to either person or property, from the erroneous issuance of the SAC. damages Instead, their asserted are limited to the expenditures which they incurred in reliance on the government's representation, embodied by the SAC, that the Helicopter could be used for the commercial transport of passengers. determined Because the to be government's erroneous, the representation was case falls squarely later into the statutory exception to sovereign immunity. As the addressed government cases related points to out, other erroneously courts issued airworthiness have come to the same conclusion. which have certificates of See e.g., Marival, Inc. v. Planes, Inc., 306 F. Supp. 855 (N.D. Ga. 1969) (third party claim against government by seller who misrepresented airworthiness of plane based on certificate issued by FAA inspector was barred under misrepresentation exception); Lloyd v. Cessna Aircraft Co., 429 F. Supp 181, 183 "courts have government held (E.D. Tenn. 1977) (discussing cases in which that officials, negligent which inspections conduct results and in testing by incorrect information being reported and relied upon, in reality amount to a claim arising out of misrepresentation so as to be precluded by the 20 [misrepresentation] exception to the [FTCA]"). In the instant case, core, based on the plaintiffs' misrepresentation as to complaint is, the status at its of the Helicopter, on which they relied to their economic detriment. Therefore, the plaintiffs' claims are barred under the misrepresentation exception of the FTCA. Because the Court is precluded from assuming subject matter jurisdiction over the case government's final argument, for i.e. two independent that reasons, the plaintiffs fail the to allege a cause of action under state law, need not be addressed. Conclusion For the reasons stated herein, the Government's motion to dismiss the complaint for lack of subject matter jurisdiction is GRANTED. SO ORDERED. /s/ Mary M. Lisi Mary M. Lisi Chief United States District Judge December 16, 2011 21
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