August 3, 2017, Trial News

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Ninth Circuit refuses to reconsider vacated verdict in FTCA birth injury case

Kate Halloran

the medical staff

The Ninth Circuit has denied a motion to reconsider its decision to vacate a verdict in a birth injury case involving a U.S. servicemember’s wife and child. The court had affirmed a lower appellate court’s overturning of the verdict because the claim was barred by the Federal Tort Claims Act’s (FTCA) “foreign country exception.” (S.H. v. United States, No. 15-15000 (9th Cir. July 10, 2017).) The FTCA provides recourse against the federal government for tortious conduct, such as medical malpractice by government employees, but exempts injuries suffered in another country.
 

Shortly after finding out that he was being transferred to Spain, U.S. Air Force Master Sergeant William Holt and his wife, Chantal, learned that she was pregnant with their third child. A doctor at a base in California examined Chantal to determine whether she could travel, considering her history of premature deliveries and a previous miscarriage. The doctor cleared her for travel, but after the family settled overseas, Chantal experienced preterm labor and had an emergency cesarean section to deliver her daughter, S.H., prematurely.

Soon after her birth, S.H. exhibited developmental delays, and doctors in Spain diagnosed her with cerebral palsy. When the Holts returned to the United States, a doctor in South Carolina also diagnosed the child with cerebral palsy, resulting from her premature birth. The Holts filed an administrative claim against the U.S. government under the FTCA, alleging that the California doctor was negligent in approving Chantal for travel to Spain. The administrative claim was denied, and the Holts filed suit in federal court. The government moved for summary judgment based on the FTCA’s foreign country exception, which the court denied. A bench trial resulted in a $10 million award for the plaintiffs. The government appealed to the Ninth Circuit.

The central question on appeal was whether S.H.’s injury was suffered in the United States or on foreign soil. At trial, the Eastern District of California had determined that the injury was suffered in the United States because the Holts’ claim did not accrue until they returned from Spain and received a definitive diagnosis in South Carolina. But the Ninth Circuit disagreed, stating that the district court improperly relied on California’s accrual law when federal law governed the case. While state law may govern the United States’ liability, the court said, this is not the case for claims within the foreign country exception. The Ninth Circuit clarified that where the injury occurred for purposes of this exception is separate from when the plaintiffs learned about the injury for statute of limitations purposes.

The court explained that “in deciding where a claim arises under the foreign country exception, . . . we are not concerned with the possibility of a blameless plaintiff losing a claim through delay. . . . We ask only where ‘the last act necessary to establish liability occurred.’” Under the FTCA’s choice-of-law provisions, the court must follow the concept of lex loci delicti—“the law of the place where the injury occurred”—and prior U.S. Supreme Court opinions on this question rely on The Restatement (First) of Conflict of Laws §377. Section 377 states that an injury happens where it is first suffered, regardless of subsequent negligence that leads to more harm. Because S.H.’s brain injury occurred in Spain, that superseded any later diagnosis of cerebral palsy in the United States, the court said, and her cerebral palsy was derivative of that initial brain injury.

Stony Point, N.Y., attorney Howard Richman, who handles these cases, explained that servicemembers and their families often do not fully understand the statute’s limits when they deploy overseas. “Basically, they give up their right to access the courts to redress a grievance they may have with the United States that arises out of a negligent act. . . . They only learn of this exception when they have been injured and seek legal redress. Most servicemembers and their families do not seek out legal assistance from civilian lawyers when they receive orders to move overseas,” he said.                

But Richman noted that military families may have another avenue for recourse, albeit with its own restrictions. “There has always been an administrative remedy for claims that arise outside of the continental United States. The Military Claims Act applies to claims against the United States for noncombat activities of the military outside of the United States,” he said. “What this means for servicemember families is that they are limited to an administrative claim that has no judicial review. The various military services have a process for compensation for tort injuries that occur to family members (not injury to servicemembers). It looks like the administrative process of the FTCA, but it’s a take-it-or-leave-it situation. With no review of the process, you are at the mercy of the agency as to what they will compensate you for and how much.”