Just When Is an FTCA Time Bar Subject to Equitable Tolling?


On February 8, 2016, two significant decisions regarding the Federal Tort Claims Act (FTCA) were issued by the federal courts in the wake of the Supreme Court’s guidance in U.S. v. Kwai Fun Wong,135 S. Ct. 1625, 1638 (2015), that “the FTCA’s time bars are nonjurisdictional and subject to equitable tolling.”  These two recent decisions, Garling, et al., v. U.S. and Trinity Marine Products, Inc. v. United States, leave open the question regarding when equitable tolling of an FTCA claim will be available and, moreover, it may depend upon the jurisdiction in which the claims are filed.

In the case of Garling, et al., v. U.S., the U.S. District Court for the District of Wyoming dismissed the plaintiffs’ FTCA claim complaining of the consequences of an armed federal raid in 2007 on the environmental testing laboratory they operated in Caspar, Wyoming.  The laboratory was certified by the National Environmental Laboratory Association Program and under the Safe Drinking Water Act. Suspecting that the laboratory was submitting falsified water quality records, an “armed raid” of the laboratory was conducted by EPA’s Criminal Investigation Division, the U.S. Marshal’s Office and “other unidentified personnel”.  The plaintiffs’ employment was terminated in February 2008, and the investigation was closed in June 2012.

More than five years passed before the plaintiffs filed an administrative complaint with EPA under the FTCA, alleging that the raid was “reckless and in grossly negligent disregard.”  Appearing pro se, the plaintiffs argued that they did not learn the full extent of the investigation and raid until important information they requested from the government was received as a result of their FOIA requests. The District Court was not persuaded and, in noting that the FTCA statute of limitations is two-years and this was not a case for an equitable tolling of the statute, also pointed to the recent guidance from the Supreme Court in Kwai Fun Wong. It found that “their premise for equitable tolling is factually unsupported,” citing the text set forth in Barnes v. U.S., 776 F.3d 1134, 1150 (10th Cir. 2015) (“[G]enerally a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstances stood in his way.”).  The District Court dismissed the time-barred claim.

A different result was reached by the U.S. Court of Appeals for the Fifth Circuit in the case of Trinity Marine Products, Inc. v. United States.  In 1999, Trinity Marine was indicted for illegally storing hazardous waste without a permit.  In 2003, the charge was dismissed, and several years later, it was revealed that two of the federal agents involved in the investigation and prosecution of the case were engaged in an extramarital affair, and indeed one of these federal agents had committed perjury and obstructed justice in attempting to conceal these facts.

In 2012, Trinity filed an administrative claim under the FTCA, and then a lawsuit in 2013.  The District Court dismissed the FTCA claim as being time-barred, but the Fifth Circuit has now reversed this ruling, holding that the District Court erred by failing to equitably toll the running of the FTCA’s two year statute of limitations.

The factual background is somewhat tangled.  In 1996, several federal agencies obtained a search warrant for a facility owned by the Canal Refining Company in Louisiana that was also used by Trinity to transport oil.  The warrant was based on the allegations that the facility was illegally accepting and receiving hazardous waste without a permit, and the source of this information was evidence provided by a hydrocarbons broker whose access to test results indicated that the material being tested was “used oil” so contaminated that it must, by law, be regulated as a hazardous waste.  However, these test results were never found, and the government’s case had to be dismissed for want of evidence in 2003.

Another party’s  FTCA claims unearthed much of this information, and its claims were settled for $1.7 million, which seemingly encouraged Trinity to file its own FTCA claim.  With regard to the application of the FTCA statute of limitations, Trinity argued that it did not learn about the extramarital affair and its impact until 2011, and therefore the “discovery rule” and the doctrine of equitable tolling should make the two year statute inapplicable in this case.  The Fifth Circuit agreed, and noted the effect of the Supreme Court’s decision in the case of Kwai Fun Wong, which held that the “FTCA’s time bars are nonjurisdictional and subject to equitable tolling.”  The case was then remanded to the district court for further proceedings.

Companies trying to decide whether or not an FTCA time bar will affect a claim may find these latest rulings confusing (or at least inconsistent), but despite the different outcomes,  Trinity and Garling demonstrate that Kwai Fun Wong remains the touchstone in terms of precedent, so familiarity with it is a must.