The Federal Tort Claims Act A primer for medical malpractice cases in Virginia and beyond

The Journal of the Virginia Trial Lawyers Association, Volume 26 Number 3, 2017 17 Federal Practice The Federal Tort Claims Act A primer for medical malpractice cases in Virginia and beyond by Rachel Procopio and Brewster S. Rawls You mean I can sue the government? It is hard to believe, but this is still a line we hear with some frequency. Even more disturbing is that we find that potential plaintiffs with claims against Veterans Affairs ( VA ) or military healthcare providers have been told by some other lawyer that there is no ability to sue the United States or that it is just not worth the effort. Of course, the government can be sued for the negligent acts and omissions of its employees. The Federal Tort Claims Act 1 ( FTCA ), enacted by Congress in 1946, provides a limited waiver of sovereign immunity for the United States of America. The Veterans Administration was thrust into the national spotlight in 2014 amid allegations that veterans across the country were not receiving timely medical care at VA hospitals. The scandal resulted in a major investigation surrounding wait times at VA hospitals in different states, tales of secret wait lists, and narratives of veterans dying while waiting for healthcare. As a plaintiff s advocate and thoughtful litigator, this publicity may have piqued your curiosity, leading you to wonder what steps a private person may take to sue the VA or its employees. You may have received calls from potential clients regarding care they received at a VA medical center or a military hospital. This article will set forth information regarding the FTCA, including the filing and other requirements for bringing a claim against the United States and filing suit in federal court. Practice tips will also be provided. The information discussed is tailored to medical malpractice claims under the FTCA, but most of the principles would apply to other types of claims as well. When it comes to pursuing a claim against the United States, the answer is simple: proceed carefully. The FTCA allows individuals to pursue tort claims against the United States when a private actor could be found liable to the claimant for a tort in accordance with the law of the place where the act or omission occurred. 2 Under the Act, United States District courts are granted exclusive jurisdiction over civil actions against the United States for money damages arising from injury or loss of property and personal injury or death. 3 Claims for intentional torts, however, are not allowed under the FTCA. 4 Thus, if you wish to pursue an action against agency employees under the FTCA, you must file a complaint against the United States, not individual employees, in federal district court. However, as described in detail below, you may not file suit until you have sought an administrative remedy with the agency in question. Application of state substantive law While FTCA cases operate according to the Federal Rules of Civil Procedure and in accordance with other federal procedural considerations, the FTCA applies the substantive law of the place of the tort to determine the liability of the government. 5 The most obvious, and arguably important, interplay is with regard to damage limitations. For example, an FTCA case arising out of medical malpractice at a government facility in Virginia would be subject to the Virginia cap on medical malpractice damages. 6 There are numerous other and often trickier issues that can arise regarding the interplay between federal procedural and state substantive law. For example, the proper party to bring the claim against the United States is a substantive law issue. With wrongful death and survival actions, some states, like Virginia, require the appointment of a personal representative. 7 Other states do not. The application of state substantive law can sometimes seem counter-intuitive or even illogical and the courts have not always been consistent in determining what is substantive and what is procedural. Pre-suit notice requirements are a notorious example. Both the law and the practices seem to differ from state to state. While the statute of limitations is considered procedural, statutes of repose are generally considered substantive. 8 The admissibility of evidence is controlled by the Federal Rules of Evidence, but competency of witnesses is often considered substantive. 9

18 The Journal of the Virginia Trial Lawyers Association, Volume 26 Number 3, 2017 A treatise could probably be written as to the intricacies of what is considered procedural by federal courts and what is considered substantive and subject to state law. We can sum this up, however, in two words: be careful. The distinction is often not as clear as one might think. Filing requirements In exchange for its waiver of sovereign immunity, there are, of course, a number of procedural bars that must be met in pursuing a federal tort claim against the United States under the FTCA. The FTCA requires that all administrative remedies be exhausted before suit can be filed in federal district court. 10 As such, the agency must be afforded the opportunity to investigate the allegations against it, and care must be taken to satisfy the administrative requirements of filing a claim prior to litigating the matter. To meet the administrative requirements, the claim must be sufficiently presented to the appropriate agency the agency responsible for the negligence for an investigation. This requirement is a jurisdictional requirement to filing suit in federal court. 11 After being presented with the claim of negligence, the agency is then allotted six months to investigate the allegations against it. During this time period, the claimant may not litigate the case in federal court. This six-month period theoretically allows the agency time to appropriately evaluate the case for liability and offer a settlement to the claimant(s) should liability be determined. The agency s investigation may include in the context of medical malpractice cases a review of the case by independent expert medical witnesses in other parts of the country. The government attorney investigating the claim may also seek additional information, including private medical records and bills, documents supporting any lost wage claim or lost benefits, and the like. The agency attorney will also frequently request an informal interview of the claimant to better understand his or her damages. Upon completion of its investigation, the agency may offer to settle the case with the respective claimant, or it may deny the claim. 12 Should the plaintiff s attorney decide that the claim is appropriate for litigation, an agency decision is not required to move forward with filing the lawsuit. A claimant may file suit in federal court if the agency fails to make a decision within the sixmonth period. 13 When the agency has neither denied nor settled the claim within the six-month window for administrative settlement, the claim is considered constructively denied and the claimant is free to pursue resolution in federal district court. 14 If the claim is actually denied, the claimant must bring suit in federal court within a six-month period that begins to run on the date of the denial of the claim. 15 If the agency does not deny the claim, there is no stated period within which the claimant must file suit, as the statute of limitations is met upon the filing of an administrative tort claim. Sum Certain and other filing requirements In order to satisfy the presentation requirement, a claimant must present, in writing, a sum certain demand and provide the agency with sufficient details to complete its investigation. 16 This writing must also be signed by the claimant, or by his or her legal representative. 17 The federal government has developed a Standard Form 95 ( SF-95 ) that can be used to file a claim for damages under the FTCA. If correctly completed, the SF-95 will comply with the requirements necessary to satisfy the presentation requirement. When these forms are distributed to veterans by risk management at VA hospitals, patients are often advised regarding remedies for medical errors. Use of an SF-95 to present a claim to the relevant agency is not, however, required for investigation or to satisfy the presentation requirement. 18 So long as a claimant provides the relevant agency with a sum certain demand 19 and sufficient details for the agency to complete its investigation of the claim, the jurisdictional requirements of the FTCA are satisfied. Be that as it may, it is difficult to contemplate a good reason not to use the SF-95. The presentation requirements in different Circuits are one of the most frequently litigated issues regarding the FTCA. Should a federal court find that the presentation requirements have not been met, the case is subject to a motion to dismiss and the claimant will find him or herself without recourse. As such, it is crucial that the SF-95s filed with the agency are carefully reviewed for any errors prior to filing, especially in cases where the statute of limitations is about to run. 20 The sum certain requirement essentially creates a cap on the amount of damages for a claim that may be sought in a later federal lawsuit. 21 The amount presented to the agency with the administrative tort claim is the maximum amount that may later be claimed in litigation. Only when newly discovered evidence supports an increased amount will an exception be made to this statutory provision. Reconsideration As an alternative to filing a case in federal court, the claimant has the option of requesting reconsideration following the first denial of his or her claim. 22 Reconsideration involves having a different attorney in a different office of the agency perform a second review of the merits of the claim. This request must be made in writing to the relevant agency within six months from the initial denial of the claim. 23 Should the claim be denied again on reconsideration, the claimant s only method of recourse is to file suit in federal court. Requesting reconsideration is a useful tool under a variety of circumstances. If you are having trouble receiving the expert support required to successfully pursue filing the case in federal court, the reconsideration process buys you an additional six-month investigatory period in which to obtain this needed support. It is additionally useful if you have trouble

The Journal of the Virginia Trial Lawyers Association, Volume 26 Number 3, 2017 19 collecting information relevant to your case, such as medical records, tax documents, or paycheck stubs from your client. Finally, this tool may be used to further test the merits of the case by having a fresh set of agency eyes evaluate your claim while avoiding the risk and cost of litigation. Statute of Limitations concerns Pursuant to 28 U.S.C. 2401(b), there is a twoyear statute of limitations for claims brought under the FTCA. 24 The two-year statute of limitations runs from the date of accrual of the claim. It is also important to note that it is insufficient to mail the claim within the time frame the appropriate agency must receive the written claim within the two-year time period. 25 In United States v. Kubrick, the United States Supreme Court held that a claim under the FTCA accrues when the plaintiff knows both the existence and the cause of his injury. 26 Thus, a discovery rule is said to apply to FTCA claims and generally our experience has been consistent with this understanding. The difficult part, of course, is the factual issue of when the plaintiff knew or should have known of the existence and cause of the injury. Additionally, 28 U.S.C. 2401(b) provides a second limitations period: a tort claim against the United States is forever barred unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of the claim by the agency to which it was presented. 27 Thus, after the denial of the claim, the claimant must file suit in federal court within this six-month window. Throughout most of its 70-year history, it was frequently assumed that equitable tolling did not apply to the FTCA. However, this understanding changed in April of 2015 with the United States Supreme Court s ruling in United States v. Kwai Fun Wong. 28 The Court held that neither the twoyear statute of limitations, nor the running of the six-month period following the denial of a claim, were jurisdictional bars to bringing suit. The Court found that both of these periods could be subject to equitable tolling by courts. 29 In its opinion, the Court reasoned that Congress must clear a high bar to establish that a statute of limitations is jurisdictional by clearly stating this notion. 30 Congress was not found to have cleared the hypothetical high bar in enacting 2401(b). 31 Further, the Court went on to discuss the separation of the filing deadline from the jurisdictional grant as indicatory that the time bar was not meant to be jurisdictional. 32 The FTCA s jurisdictional grant appears in a separate section of Title 28, and that jurisdictional grant is not conditioned on compliance with 2401(b) s limitations periods. 33 All in all, this decision is significant in showing that the statute of limitations for FTCA claims is, in fact, subject to equitable tolling. As noted above, a state s statute of repose must also be contemplated, as this is considered substantive law. 34 As such, the state-law statute of repose would apply and may ultimately limit the time frame in which to bring an FTCA claim. For example, should an act of medical malpractice occur during a surgery in Tennessee and the patient did not understand the nature of his injury until three years and one day after the procedure, this individual s potential claim would be barred by the state s restrictive three-year statute of repose. 35 Fees A unique distinction regarding the FTCA is its cap on attorney compensation. While most attorneys working on a contingency fee basis collect 30-40 percent in attorney s fees upon receipt of a recovery, attorney s fees under the FTCA are capped at 20 percent for claims resolved in the administrative phase. 36 The fees increase to 25 percent for claims that are litigated in federal district courts. 37 Interestingly, contingent fees are the only fee arrangement permitted under the FTCA. There are significant penalties for attorneys that do not abide by the fee structure statute. Should an attorney demand or collect any amount in excess of the statutorily prescribed amounts, he or she is subject to a fine of $2,000, a year of imprisonment, or both. 38 As in other facets of personal injury law, clients are ultimately responsible for any costs or expenses associated with the representation. Litigation considerations In broad terms, FTCA litigation is like any other federal civil litigation. FTCA cases are not heard by juries the fact finders in these cases are federal judges. 39 Typically, the cases are defended by lawyers from the local United States Attorney s office, although occasionally cases will be defended by lawyers brought in from the Department of Justice. Venue is proper only in the judicial district where the plaintiff resides or wherein the act or omission complained of occurred. 40 If suit is filed where the plaintiff resides, the government will often move to transfer venue if there is a significant distance between that jurisdiction and where the negligence occurred. Federal courts are highly variable as to how they handle pro hac vice admissions. Generally, we have not used local counsel any more than we are required to do so. While federal courts are not as standardized as one might think, they are usually accommodating to foreign attorneys, as are the Assistant United States Attorneys handling the cases. Case valuation in FTCA matters The absence of a jury plainly impacts how one values an FTCA case. The government has no risk of an inflamed jury awarding a disproportionate sum. While there are exceptions, an enraged federal judge who issues a huge judgment is a rarity. Accordingly, a case with relatively weak liability but with huge damages and a major sympathetic element has far less potential settlement value in an FTCA setting than it would in state court. However, cases with very clear liability may be economically viable even

20 The Journal of the Virginia Trial Lawyers Association, Volume 26 Number 3, 2017 if the damages are limited, as federal judges do not generally take kindly to an aggressive defense in cases where liability is clear. Another positive is that cases with strong but fairly esoteric liability theories often do well in this setting. While juries can get confused by complex medicine and give the defendant a perhaps undeserved benefit of the doubt, judges can often cut through the medicine and are able to more fairly determine liability. Most federal judges have decided few FTCA cases. There is not a lot of data (if there is any at all) as to how a given judge has decided similar cases in the past. This is in stark contrast to what is true with regard to jury verdict research. The absence of such data cuts both ways, as both sides are not really sure how a particular judge is likely to decide a specific issue. Should a case be tried through to resolution, the judge can take several weeks or months to issue an opinion. Unlike with a jury in state court, your client may be forced to wait a significant amount of time after trial for a resolution of his or her case. Practice pointers and other considerations Be careful when using your standard retainer agreement in an FTCA matter. Even if the agreement is revised to reflect the appropriate contingent fee percentages, in cases where other lawyers have represented the client we frequently find that the retainer agreement contains provisions proscribed by the FTCA. Ensure that you modify your retainer agreement to comply with the FTCA. The United States is only responsible for the conduct of its agents or employees under the FTCA. As such, it is important to determine very early in your client s pursuit of the claim whether the individuals whose conduct you have determined is at issue are true employees of the United States, or are considered contractors employed by private entities. This task is accomplished through a FOIA request: requesting the status of the involved providers employment and any relevant contracts. FOIA requests can be made in a cover letter with the SF-95, or can be separately presented to the appropriate FOIA office. It is entirely possible that a claim may be a mixed one, involving both government actors as well as private actors and implicating both the FTCA and state law. Compliance with FTCA notice requirements does not preserve a state law cause of action, nor does state law compliance meet the jurisdictional requirements for an FTCA claim. The considerations of handling such situations are tactically and legally complex. Among other things, you many need file suit against defendants who were not government employees (to preserve the statute of limitations) while simultaneously waiting for the agency investigation period to expire. While the presentment requirements seem to bless a fairly general description of a potential claim, our experience has been that more detailed claims are better. There is no reason to fail to give the agency counsel a very clear idea of why you believe the claim is valid. A more detailed description of the conduct at issue additionally solidifies that your claimant has, in fact, complied with the jurisdictional requirement. As mentioned above, federal procedural law applies to FTCA cases, while substantive state law is applied in litigation. This notion is especially important when considering pre-filing requirements. Certificates of merit, arbitration waivers, and expert witness requirements are typically considered substantive law by federal courts. When a case is appropriate for litigation, it is crucial that you are aware of the intricacies of the applicable state law. 41 Along the same lines, we have sometimes found that even where there are decisions holding that pre-fling requirements are substantive, in actual practice these requirements are seemingly ignored. In other words, the government does not seem to raise the lack of compliance as a defense. While we have recently been advised that the VA is using some sort of database to determine case valuation, our experience with all of these agencies is that there is little rhyme or reason to which cases an agency attempts to settle administratively or how the agencies value the cases they do attempt to settle. Often the valuations are wildly contradictory even within the agency. Along the same lines, a denial following the initial claim stage is not necessarily indicative of the true value of a claim. Experience has shown that plenty of valid claims are denied on the first round of agency investigation. These claims can oftentimes be settled upon reconsideration or can be successfully litigated. Perhaps there are additional reasons for denying valid claims that are not available to us. The decision of whether to ask for reconsideration of a denied claim or to file suit in federal court is often a difficult one. If the claim is of relatively low value, then reconsideration might make more economic sense than litigation. The lower fee and likely reduced expenses will give the client a better net recovery if the case can be settled administratively rather than litigated. A factor to consider is that the agencies settlement authority is limited (currently $300,000). An agency can settle cases for greater sums of money, but the settlement must be approved by the Torts Division of the Department of Justice. We have found that most agencies are not willing to go through the approval process and prefer to deny the claim and force litigation. Hence, for cases with a likely value of more than the agency s authority, immediately proceeding to litigation is usually more efficient than reconsideration. And this reality may advise against having discussions with agency

The Journal of the Virginia Trial Lawyers Association, Volume 26 Number 3, 2017 21 counsel regarding theories of liability, providing expert opinions, permitting informal interviews of your cleint and their family, etc. A significant downside to requesting reconsideration is that it makes an already slow process even slower. It is common for claims to take well over a year or more to get through evaluation. After six months in the reconsideration process, you are again able to file suit, however. While there is more predictability to the attorneys handling the reconsideration process than during the initial investigation we are mostly speaking here of the VA and their Office of General Counsel in Washington, D.C. there are still plenty of instances where seemingly valid claims are denied following the reconsideration process. If the agency denies the claim a second time, the claimant is still permitted to file suit, but has no additional mode of recourse. Litigating in federal court is often daunting, especially for those unaccustomed to practicing there. Throughout the country there is a huge variation in the culture and practices of the various courts. For those lawyers used to operating in the Eastern District of Virginia, most will find that other federal courts are more relaxed. Regardless, there are still plenty of peculiarities and local quirks. By and large, the Assistant United States Attorneys who defend FTCA matters are reasonable and fairly easy to deal with. Scorched earth defenses generally are not used. Surprisingly, however, those same government attorneys are often fairly casual with regard to deadlines and responses. Even more surprising - at least for those of us in the shadow of the Eastern District of Virginia - is that most courts are quite tolerant of this. In all fairness, most of the government lawyers typically extend the same courtesy. Still, we have always avoided testing the court s tolerance. While our firm s experience with prosecuting FTCA claims is limited to those claims related to medical malpractice typically the VA, military hospitals, or other government-run health care entities tort claims may be pursued against many additional agencies of the United States including the U.S. Postal Service and the like. Much of what we have described above would apply. Representing veterans and military families is rewarding. FTCA cases are challenging and at times the process can be frustrating. Like everything in the law, you need to understand the procedures controlling what you do, the factual circumstances of a given case, and all those other factors that determine success in litigation. The FTCA is indeed a different world, but the basic principles of effective representation are the same. Endnotes 1. 28 U.S.C. 2671 et seq. 2. 28 U.S.C. 1346(b) (2013). 3. Id. 4. 28 U.S.C. 2680 (2006). 5. 28 U.S.C. 1346(b). 6. Starns v. United States, 923 F.2d 34 (4th Cir. 1991). 7. Va. Code Ann. 8.01-50 (2012). 8. Anderson v. United States, 669 F.3d 161, 165 (4th Cir. 2011) ( [A] state s enactment of a statute of repose creates a substantive right ) (internal quotations and citations omitted); Miller v. United States, 932 F.2d 301 (4th Cir. 1991). 9. See Legg v. Chopra, 286 F.3d 286, 288 (6th Cir. 2002). 10. McNeil v. United States, 508 U.S. 106, 113 (1993). See 28 U.S.C. 2675(a) (1966). 11. 28 U.S.C. 2675(a). 12. In practice, the investigatory period may last longer than six months. The agency s attorneys may also choose to summarily deny the claim and may not provide sufficient reasoning for doing so. 13. 28 U.S.C. 2675(a). 14. Id. 15. 28 U.S.C. 2401(b) (2011). Following the first denial, a claimant may alternatively decide to request reconsideration. See infra discussion regarding reconsideration. 16. 28 C.F.R. 14.2(a) (1987). 17. Id. If the writing is signed by the representative, the representative s authority to sign must also be provided to the agency. Id. 18. See id. 19. Courts across the country have held that the demand must be for a numerical value and that language such as in excess of and a dollar amount is insufficient in satisfying the sum certain requirements. See, e.g., Montoya v. United States, 841 F.2d 102 (5th Cir. 1988). 20. The Code of Federal Regulations provides for amendments to claims, but an amendment would not help save a claim that was improperly presented and was amended outside the statute of limitations. See 28 C.F.R. 14.2(c). 21. 28 U.S.C. 2675(b) (1966). 22. 28 C.F.R. 14.9(b) (1970). 23. Id. 24. 28 U.S.C. 2401(b) (2011). 25. 28 C.F.R. 14.2(b)(1) (1987). 26. 444 U.S. 111 (1979). The plaintiff need not, however, know that the acts legally constitute medical malpractice. See id. 27. 28 U.S.C. 2675(b) (1966). 28. 135 S. Ct. 1625 (2015). 29. Id. at 1638. 30. Id. at 1632. 31. Id. 32. Id. at 1633. 33. Id. 34. See Anderson v. United States, 669 F.3d 161, 165 (4th Cir. 2011). 35. See Tenn. Code 29-26-116 (2012). 36. 28 U.S.C. 2678 (1966). 37. Id. 38. Id. 39. 28 U.S.C. 2402 (1966). 40. 28 U.S.C. 1402 (1982). 41. Local counsel can be useful to walk you through the ins and outs of the foreign state s law. Some courts also require that local counsel sign pleadings and attend hearings or trial. Rachel L. Procopio practices with Rawls McNelis in Fairfax. Her practice includes representation of veterans and their spouses and families in Federal Tort Claims Act cases regarding care provided in VA facilities and military hospitals. She received her Bachelor of Science in Biology, summa cum laude and with Departmental Research and Academic Honors from Susquehanna University, and graduated from William & Mary Law School. Brewster S. Rawls is a founder of RawlsMcNelis in Richmond and has more than 30 years of experience as a litigation attorney. He has spent the last 15 years representing countless veterans and military families in Federal Tort Claims Act cases. Brewster served as a Field Artillery Officer in the Army with the 101 st Airborne Division (Air Assault) before going to law school and starting his legal career. He is a graduate, cum laude, of Wask Forest University and the University of Richmond Law School. www.vet4vet.net