United States District Court, D. Maryland
Starr Indemnity & Liability Company, as subrogee of Jet Zee, LLC
United States of America
Catherine C. Blake United States District Judge
dispute arises from the seizure of an aircraft by the United
States Custom and Border Protection ("CBP"). The
plaintiff, Starr Indemnity & Liability Company
("Stan-Indemnity"), subsequently brought a tort
action against defendant United States of America ("the
government") under the Federal Tort Claims Act
("FTCA"). Pending before the court is the
government's motion to dismiss the complaint for lack of
subject matter jurisdiction. The issues have been briefed and
no oral argument is necessary. See Local Rule 105.6 (D.
Md. 2018). For the reasons outlined below, the court will
grant the motion.
AND PROCEDURAL HISTORY
2016, Jet Zee, Inc. was the owner of a 1987 Beechjet 400
aircraft ("the aircraft"), which was insured by
plaintiff .Starr Indemnity for $750, 000. (Compl. ¶ 2,
ECF No. 1). On March 2, 2016, Detective Joseph Grant of the
Baltimore County Police Department and Special Agent Milton
Lynn of the U.S. Department of Homeland Security applied for
a warrant to search the aircraft and seize certain items
suspected to be onboard. (Def.'s Mot. to Dismiss
["Def s Mot."] Ex. A at 4-9, ECF No. 10-2). In
support of the warrant application, Grant and Lynn provided
an affidavit stating that they had probable cause to believe
that the aircraft "contain[ed] cocaine, packaging
material, fruits and instrumentalities of the crime of
possession with intent to distribute [or importation of]
cocaine," as well as cash proceeds from suspected drug
trafficking (Id). The Honorable John J. Nagle of the
Circuit Court for Baltimore County issued the warrant on
March 2, 2016. (Id. at 9). Later that day, the
aircraft was searched and seized at Martin State Airport in
Middle River, Maryland. (Compl. ¶ 3). The search
uncovered $1, 039, 205 in U.S. currency, which had been
vacuum-packed, sorted by denomination, and stored in a black
roller bag in the cargo hold of the aircraft. (Def.'s
Mot. Ex. B ¶20, ECF No. 10-3). No cocaine was discovered
during the search, but "a Baltimore County Police
Department K-9 certified in narcotics odor detection . ..
gave a positive indication to the presence of narcotics  on
the plane." (Id. ¶ 18). Starr
Indemnity's representative immediately attempted to
negotiate the return of the aircraft with the U.S.
Attorney's office. (Id. ¶ 15).
April 22, 2016, Special Agent Lynn applied for a second
search warrant of the aircraft, which was issued by the
Honorable Beth P. Gesner of the United States District Court
of the District of Maryland. (Def.'s Mot. Ex. B, ECF No.
10-3). Lynn stated that a second search of the aircraft was
necessary to perform a thorough search for hidden
compartments, or "traps," which "are utilized
in the furtherance of bulk cash and drug smuggling."
(Id. ¶ 24). According to Lynn, a search for
"traps" was not possible during the execution of
the original search warrant because, due to short notice,
"it was logistically not possible to arrange for the
presence of a subject matter expert that could search the
plane for hidden compartments without possibly compromising
the air-worthiness of the plane." (Id.).
about August 3, 2016, CBP sent a "Seizure Notice"
to Starr Indemnity's representative. (Pl's Resp. in
Opp. to Def.'s Mot. ["Pl's Resp."] Ex. 3 at
2, ECF 11-3). The seizure notice stated that, pursuant to 18
U.S.C. § 981,  CBP had begun forfeiture proceedings with
respect to the aircraft because it had probable cause to
believe that the aircraft was involved in money laundering in
violation of 18 U.S.C. § 1956(a)(7). (Id.).
Starr Indemnity subsequently sent responsive notices
challenging the validity of the forfeiture to CBP, to which
CBP did not respond. (Pl's Resp. at 18).
about October 13, 2016, Starr Indemnity filed a claim against
CBP for damages under the FTCA. (Compl. ¶ 20; Pl's
Resp. Ex. 7). CBP did not respond to this claim. (Compl.
¶ 21). On February 28, 2017, Starr Indemnity filed a
motion with this court under Federal Rule of Civil Procedure
41(g) seeking the return of the aircraft, claiming, inter
alia, that the original seizure of the aircraft violated
the search warrant issued on March 2, 2016. (Compl. ¶
22; Starr Indemnity & Liability Co. v. United States
CBP, No. 17-00579-JFM, ECF No. 1 ¶ 11). On or about
June 13, 2017, the parties reached a settlement whereby CBP
returned the aircraft to Starr Indemnity. (Compl. ¶ 23).
The settlement agreement specifically provided that Starr
Indemnity "[did] not release any claim that may be
brought under the Federal Torts Claim Act for damages"
arising from CBP's seizure of the aircraft. (Id.
¶ 24-25). CBP returned the aircraft on June 29, 2017.
(Id. ¶ 4). Starr Indemnity examined the damage
to the aircraft, determined that it was a "total
loss," and made payments to Jet Zee, Inc. pursuant to
their insurance agreement. (Id. ¶ 26-27).
Consequently, Starr Indemnity became subrogated by operation
of law to Jet Zee, Inc.'s interest in the aircraft.
(Id. ¶ 6).
about November 30, 2017, Starr Indemnity filed a final
administrative claim for damages under the FTCA.
(Id. ¶ 28). Starr Indemnity received a letter
from CBP on August 6, 2018, denying the claim. (Id.
¶ 40). CBP stated that "the claim .. . falls
squarely within specific exceptions to the waiver of
sovereign immunity afforded by the FTCA. .. Absent an express
waiver of sovereign immunity, the United States cannot be
held liable." (Id. ¶ 41).
Indemnity filed its complaint in the instant action on
October 30, 2018. (ECF No. 1). The government filed a motion
to dismiss for lack of jurisdiction, Starr Indemnity filed
its response in opposition, and the government filed a reply
to Starr Indemnity's response. On April 9, 2019, Starr
Indemnity requested a hearing on the government's motion
motion to dismiss for lack of subject-matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1)
"addresses whether [the plaintiff] has a right to be in
the district court at all and whether the court has the power
to hear and dispose of his claim." Holloway v. Pagan
River Dockside Seafood, Inc., 669 F.3d 448, 452 (4th
Cir. 2012). The plaintiff bears the burden of establishing
subject matter jurisdiction. Demetres v. East West
Const., Inc., 776 F.3d 271, 272 (4th Cir. 2015). A
defendant may challenge subject matter jurisdiction in two
ways: (1) "by attacking the veracity of the allegations
contained in the complaint"; or (2) "by contending
that, even assuming that the allegations are true, the
complaint fails to set forth facts upon which jurisdiction is
proper." Durden v. United States, 736 F.3d 296,
300 (4th Cir. 2013). When a defendant uses the latter method
to contest subject matter jurisdiction, the plaintiff
"is afforded the same procedural protection as he would
receive under Rule 12(b)(6) consideration." Kerns v.
United States, 585 F.3d 187, 192 (4th Cir. 2009)
(quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th
Cir. 1982). Accordingly, "the facts alleged in the
complaint are taken as true, and the motion must be denied if
the complaint alleges sufficient facts to invoke subject
matter jurisdiction." Id
The Re-Waiver Provision
government asserts that Starr Indemnity's claim must be
dismissed for lack of subject matter jurisdiction because the
government has not waived sovereign immunity. (Def.'s
Mot. at 5). "Absent a waiver, sovereign immunity shields
the Federal Government and its agencies from suit."
Federal Deposit Ins. Co. (FDIC) v. Meyer, 510 U.S.
471, 475 (1994); see also Global Mail Ltd. v. United
States Postal Service,142 F.3d 208, 210 (4th Cir.
1998). The FTCA waives the government's sovereign
immunity for certain torts committed by federal employees, 28
U.S.C. § 1346(b); FDIC, 510 U.S. at 475, but
the waiver is limited by several exceptions. One exception
(the "detention of goods" exception) pertains to
claims arising from "the detention of any goods,
merchandise, or other property by any officer of customs...
or any other law enforcement officer." 28 U.S.C. §
2680(c), Kosak v. United States,465 U.S. 848, 854
(1984). In 2000, Congress passed the Civil Asset Forfeiture
Reform Act ("CAFRA"), which amended § 2680(c)
and created an "exception to the exception."
Ali v. Federal Bureau of Prisons,552 U.S. 214, 221,
239 (2008). Pursuant to § 2680(c)(1) ...