Duplan v. United States

UNITED STATES COURT OF APPEALS
Tenth Circuit
Byron White United States Courthouse
1823 Stout Street
Denver, Colorado 80294
(303) 844-3157
Patrick J. Fisher, Jr. Elisabeth A. Shumaker
Clerk Chief Deputy Clerk

September 1, 1999

TO: ALL RECIPIENTS OF THE OPINION

RE: 97-6344/97-6348, Duplan v. USA
Filed on August 11, 1999

The opinion filed on August 11, 1999 contains a clerical error. Please note the
following correction:

On page one the section listing counsel for the plaintiffs/appellees should read
as follows:

William A. Newman, Morgan & Weisbord (Les Weisbrod, Morgan &
Weisbrod, and Andrew W. Lester and Shannon Davies, Lester, Loving & Davies,
Edmond, Oklahoma, on brief), Dallas, Texas, for Plaintiffs-Appellees.

Please make the correction to your copy of the opinion.

Very truly yours,
Patrick Fisher, Clerk

Kathleen M. Fabrizio
Deputy Clerk
 F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 11 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

ROSEANNE DUPLAN, an individual
and next friend of Zachary Duplan, a
minor; MICHAEL DUPLAN, an
individual; ZACHARY DUPLAN, a
minor by his next friend Roseanne
Duplan,

Plaintiffs - Appellees and
Cross-Appellants,
v. Nos. 97-6344
& 97-6348
CLIO HARPER, an individual; VINAY
BHOPLAY, an individual; TERESA
GERLICH, an individual; FRANCIS L.
PERRY; MED-NATIONAL INC.,

Defendants - Appellees,

UNITED STATES OF AMERICA,

Defendant - Appellant and
Cross-Appellee,

and

SHARON H. BAKER, MAJOR US
AIR FORCE, an individual;
ELIZABETH REED, an individual;
CARRIE R. HANCOCK, an individual;
N. SUZANNE FISHER, an individual,

Defendants.
 Appeal from the United States District Court
for the Western District of Oklahoma
(D.C. No. 95-CV-216 and D.C. No. 96-CV-2004)

Edward Himmelfarb (Robert S. Greenspan and Marc Richman on brief), United
States Department of Justice, Washington, D.C., for Defendant-Appellant.

William A. Newman, Morgan & Weisbord (Les Weisbrod, Morgan & Weisbrod,
and Andrew W. Lester and Shannon Davies, Lester, Loving & Davies, Edmond,
Oklahoma, on brief), Dallas, Texas, for Plaintiffs-Appellees.

Hilton H. Walters (John M. Perry III on brief), Perry, Rife, Walters, Sullivan &
Cain, Oklahoma City, Oklahoma, for Intervenor.

Before SEYMOUR, MAGILL, * and EBEL, Circuit Judges.

MAGILL, Circuit Judge.

This appeal concerns a wrongful birth, medical malpractice action brought

by Michael and Roseanne Duplan under the Federal Tort Claims Act for treatment

provided to Mrs. Duplan at an Air Force clinic. The district court, after a bench

trial, found in favor of the Duplans and awarded them more than $3 million in

damages. The United States appeals the district court's determinations that (1)

Dr. Clio Harper, the contract doctor who treated Mrs. Duplan, was a

*
Honorable Frank Magill, Senior Circuit Judge, United States Court of Appeals
for the Eighth Circuit, sitting by designation.

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governmental employee and (2) the court was without power to impose a trust for

the benefit of the Duplans' child, Zachary, on a portion of the damages awarded.

The Duplans cross-appeal, arguing that the damages awarded by the district court

were insufficient. Dr. Harper moved to intervene on appeal. We affirm in part,

reverse in part, and remand for further proceedings.

I.

In June 1992 Roseanne Duplan went to the OB/GYN clinic (the Clinic) at

Tinker Air Force Base (Tinker) to obtain a pregnancy test. She learned that she

was pregnant. Because her job environment put her at increased risk of becoming

infected with cytomegalovirus (CMV), which can cause birth defects, Mrs.

Duplan wished to be tested to determine whether she was immune to CMV. Mrs.

Duplan and her husband, Michael Duplan, agreed to abort the pregnancy if she

was not immune rather than take the risk of having a child with CMV-induced

birth defects.

On July 22, 1992, Dr. Harper, a physician who worked at the Clinic,

examined Mrs. Duplan. Dr. Harper was an employee of Med-National, Inc.,

which had contracted with the United States Air Force to provide medical services

at Tinker. Mrs. Duplan took the CMV test, and the test results indicated that Mrs.

Duplan had an ongoing primary CMV infection, which posed a significant risk of

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severe birth defects. Dr. Harper instructed Nurse Elizabeth Reed, an Air Force

employee, to notify Mrs. Duplan of the results of the CMV test.

Reed contacted Mrs. Duplan by phone and told her that the results of the

CMV test were positive. Mrs. Duplan was uncertain whether a positive result

meant that she was immune to CMV or that she was infected, so she called Reed

back and asked her for clarification of the test results. Reed incorrectly told Mrs.

Duplan that a positive test result meant that Mrs. Duplan was immune to CMV.

Based on this erroneous information, Mrs. Duplan decided not to abort the

pregnancy.

Mrs. Duplan gave birth to a son, Zachary, who was born with

CMV-induced birth defects including hearing loss, delay in development and loss

of certain fine and gross motor skills, mental retardation, microcephaly, and

nystagmus. Zachary will require custodial care throughout his life and will need

significant medical care and rehabilitative special education to function

independently in any meaningful way.

On January 10, 1995, the Duplans filed suit in Oklahoma state court,

claiming that various doctors and nurses, in their individual capacities, were

negligent in their medical treatment of Mrs. Duplan at Tinker. The government

certified that the medical providers employed by the government (including Reed

but not including contract employees such as Dr. Harper) were acting within the

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scope of their employment and removed the case to federal district court pursuant

to 28 U.S.C. § 1442(a)(1). On January 12, 1995, the Duplans filed a Notice of

Claim with the Air Force, invoking the Federal Tort Claims Act (FTCA). On

March 27, 1995, the government filed a motion to dismiss the Duplans' federal

action because the Duplans failed to exhaust their administrative remedies before

filing suit. Rather than dismiss the Duplans' complaint, the district court, with the

agreement of the parties, administratively closed the case pending the resolution

of the administrative process.

The Duplans received notice on July 25, 1995, that the Air Force had

denied their administrative claims. On August 21, 1995, the district court

reopened the Duplans' case. Two days later the Duplans filed an amended

complaint adding the United States as a defendant.

On August 22, 1996, the district court considered whether the medical

personnel defendants were governmental employees for purposes of FTCA

liability. It concluded that the contract doctor defendants were government

employees and, thus, that the government could be liable for their conduct under

the FTCA. Accordingly, the district court dismissed the contract doctor

defendants, including Dr. Harper, and granted summary judgment to

Med-National, leaving the United States as the sole defendant.

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 The Duplans filed a second amended complaint on September 10, 1996.

The government filed another motion to dismiss the Duplans' case, asserting that

their filing of an amended complaint after the exhaustion of administrative

remedies did not cure the jurisdictional defect created by their failure to exhaust

prior to filing the original complaint. The court denied the government's motion.

On November 29, 1996, the Duplans commenced a new action against the

United States, filing a complaint essentially similar to the second amended

complaint filed in the first case. The government filed a motion to dismiss the

second action on the ground that the Duplans' claims were untimely made. The

district court denied the government's motion and subsequently consolidated the

first and second actions.

After a bench trial, the district court concluded that Dr. Harper and Reed

had acted negligently with respect to their treatment of Mrs. Duplan and found the

United States liable for this negligence. The district court awarded the Duplans

$3,056,100 in damages—$200,000 for their emotional distress and $2,856,100 for

the extraordinary costs of Zachary's care. The district court concluded that it was

without power to impose a trust for the benefit of Zachary as part of the

judgment.

On appeal the government argues that the district court erred in concluding

(1) Dr. Harper was a de facto employee of the government and (2) it was without

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power to impose a trust for the benefit of Zachary. The Duplans cross-appeal,

arguing the damages the district court awarded them are inadequate. Dr. Harper

brought a motion to intervene on appeal, seeking to address the district court's

conclusions that (1) it had subject matter jurisdiction over the Duplans' first and

second actions; (2) Dr. Harper was a governmental employee, not an independent

contractor; and (3) Dr. Harper was negligent with respect to his treatment of Mrs.

Duplan. We provisionally granted Dr. Harper's motion.

II.

We first address the question of whether the district court had subject

matter jurisdiction over the Duplans' FTCA claim. It is well established that this

Court must sua sponte "satisfy itself of its power to adjudicate in every case."

Tafoya v. DOJ, 748 F.2d 1389, 1390 (10th Cir. 1984).

As a jurisdictional prerequisite, the FTCA bars claimants from bringing suit

in federal court until they have exhausted their administrative remedies. See 28

U.S.C. § 2675(a); McNeil v. United States, 508 U.S. 106, 113 (1993) (holding

"FTCA bars claimants from bringing suit in federal court until they have

exhausted their administrative remedies"); Pipkin v. USPS, 951 F.2d 272, 273

(10th Cir. 1991) (holding exhaustion of administrative claims is jurisdictional

prerequisite to asserting claims under FTCA). The Duplans do not dispute that

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they filed their original complaint in the first action before exhausting their

administrative remedies, but they contend that their subsequent amended

complaint cured any jurisdictional deficiency created by the premature filing of

the original complaint.

The only court to consider the question of whether an amended complaint

filed after exhaustion can cure a prematurely filed original complaint, in light of

McNeil, concluded that it cannot. See Sparrow v. USPS, 825 F. Supp. 252,

254-55 (E.D. Cal. 1993). But cf. Filaski v. United States, 776 F. Supp. 115, 118

(E.D.N.Y. 1991) (granting motion to dismiss for lack of subject matter

jurisdiction but allowing plaintiff to serve amended complaint "and thereby

restore the action"). We agree with the Sparrow court's conclusion that, as a

general rule, a premature "complaint cannot be cured through amendment, but

instead, plaintiff must file a new suit." Sparrow, 825 F. Supp. at 255. Allowing

claimants generally to bring suit under the FTCA before exhausting their

administrative remedies and to cure the jurisdictional defect by filing an amended

complaint would render the exhaustion requirement meaningless and impose an

unnecessary burden on the judicial system. See McNeil, 508 U.S. at 112;

Sparrow, 825 F. Supp. at 255. "Congress intended to require complete exhaustion

. . . before invocation of the judicial process." McNeil, 508 U.S. at 112.

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 However, in this case the government agreed that the amended complaint

effectively constituted a new action and agreed to administrative closure of the

first action pending exhaustion. See Mem. Op. and Order of October 30, 1996, at

2, 4-5. That is, the Duplans' filing of the amended complaint was treated by the

parties and the court as the institution of a new suit against the government. Cf.

McNeil, 508 U.S. at 110 n.5, 113 n.9 (implying that new action may in certain

circumstances be instituted by document other than new complaint); Hyatt v.

United States, 968 F. Supp. 96, 99-100 (E.D.N.Y. 1997) (implicitly

acknowledging that filing of amended complaint may in certain circumstances be

sufficient to institute new action); Ellis v. Hanson Natural Resources Co., 857 F.

Supp. 766, 771 (D. Or. 1994) (implying that filing of amended complaint may in

certain circumstances be sufficient to institute new action), aff'd, 70 F.3d 1278

(9th Cir. 1995) (unpublished). Because the government expressly agreed to the

procedure employed by the district court, the filing of the amended complaint was

properly construed as instituting a new action against the government. Since the

Duplans exhausted their administrative remedies before filing this amended

complaint, the district court had subject matter jurisdiction over the Duplans'

FTCA claim.

III.

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 The government argues that the district court erred in concluding that Dr.

Harper was a governmental employee rather than an independent contractor. We

review this question of law de novo. See Lilly v. Fieldstone, 876 F.2d 857, 858

(10th Cir. 1989).

In determining whether an individual is a federal employee or an

independent contractor, the critical question is whether the federal government

has the power to control the detailed physical performance of the individual. See

id. We have held that the key inquiry under this control test is "whether the

Government supervises the day-to-day operations of the individual." Id.

(quotation marks omitted). This inquiry involves consideration of a number of

factors, including the intent of parties, the allocation of insurance obligations, and

whether the government in fact controlled only the end result of Dr. Harper's

efforts or also controlled the manner and method in which Dr. Harper conducted

his activities. See id. at 859.

The intent of the parties was to establish an independent contractor

relationship. The contracts between the government and Med-National (Med-

National contract) on one hand and Med-National and Dr. Harper (Harper

contract) on the other hand explicitly identify Med-National and Dr. Harper,

respectively, as independent contractors. The Med-National contract provided

that Med-National had the responsibility of selection, assignment, reassignment,

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transfer, supervision, management, and control of contract doctors, see Med-

National Contract § C-1.2.2.3, and was required to appoint a contract doctor to act

as Chief of OB/GYN services who would exercise "direct supervisory authority"

over the other contract doctors. Id. at § C-5.2. When working at the hospital, Dr.

Harper was required to wear a name tag that identified him as a "CONTRACT

PHYSICIAN." Id. at § C-5.10.1. Dr. Harper was paid directly by Med-National;

he was not on the government payroll. These facts reflect the parties' intent to

delegate to Med-National day-to-day supervisory responsibilities and to

distinguish between contract doctors (like Dr. Harper) and governmental

employees (like Reed).

Under the Med-National contract, Med-National was obligated to carry $3

million of its own medical liability insurance, workers' compensation insurance,

and general liability insurance. Under the Harper contract, Dr. Harper was

obligated to provide his own medical liability insurance. That both Med-National

and Dr. Harper were required to obtain their own liability insurance further

supports a finding that both were acting as independent contractors. See Lurch v.

United States, 719 F.2d 333, 338 (10th Cir. 1983) (holding medical contractor's

providing own workers' compensation and other insurance supports finding of

independent contractor, not employer-employee, relationship).

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 Despite these facts supporting the conclusion that Dr. Harper was an

independent contractor, the district court determined that Dr. Harper was, in fact,

an employee of the government. It opined that the contractual evidence of

delegation of control and insurance coverage was outweighed by the following

facts: patient records were maintained by and controlled by the government; the

government retained the power to conduct periodic quality reviews of the doctors'

performance; the government imposed minimum standards for doctors hired to

perform services under its contract with Med-National with respect to education,

licensing, work experience, and general health; the government required doctors

to abide by a dress code; the government required doctors to follow

government-established rules, policies, and procedures in treating patients at the

Clinic; the government supplied virtually all equipment and support personnel at

the Clinic; and the government required that Dr. Harper be at the Clinic during

designated hours. We are not convinced that all of these facts support the

conclusion that Dr. Harper was a governmental employee rather than an

independent contractor.

With respect to the government's control over patient records, we believe

the relevant provisions in the Med-National contract do not weigh heavily in

favor of finding that Dr. Harper is a governmental employee. While these

provisions restrict Dr. Harper's ability to disseminate patient lists and medical

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information outside Tinker, they do not substantively restrict Dr. Harper's use of

this information in the performance of his duties. Cf. Robb v. United States, 80

F.3d 884, 894 (4th Cir. 1996) (concluding that doctor was independent contractor,

not governmental employee, despite contract provision requiring him to return all

films and examinations to government facility where they would remain property

of and be subject to exclusive control of government). Similarly, the

government's ability to require that contract doctors meet minimum qualifications

and to conduct reviews of the contract doctors' performance "amounts to nothing

more than a standard quality assurance [provision] by which the government

reserves the right to determine whether it is satisfied with the services it is

purchasing under the contract." Id. at 892; see also Curry v. United States, 97

F.3d 412, 415 (10th Cir. 1996) ("[T]he right of the government to inspect work

for compliance with a contract does not automatically make the worker an

employee.").

There was no evidence showing that the Clinic's regulations and dress code

diminished Dr. Harper's control over the choices he made in fulfilling his duties. 1

1
In concluding that Dr. Harper was a governmental employee, the district court
predicated its decision primarily on one regulation, a "gag rule," which prohibited
Dr. Harper from discussing abortion with his patients. The "gag rule" applied to all
employees and contract doctors at Tinker during the time period at issue. Indeed,
any grantee of federal funds under Title X of the Public Health Service Act, 42
U.S.C. §§ 300 to 300a-6, was obligated to honor the restrictions contained in the
(continued...)

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As we held in Lilly, "[s]urely, being subject to [a] hospital's rules as a condition

of staff privileges does not remotely make a private physician an employee of that

hospital." 876 F.2d at 860. Likewise, that Dr. Harper was subject to the

government's rules as a condition of working at the Clinic does not indicate that

he was an employee of the government.

We are left, then, with the requirement that Dr. Harper be at the Clinic

during designated hours, the government's provision of equipment and office

space, and the government's control over patient records as the sole facts

weighing in favor of finding Dr. Harper an employee of the government. Even

when viewed together, these particulars are insufficient to demonstrate

government control over Dr. Harper's "detailed physical performance" when

balanced against the delineation of responsibility and insurance liability set forth

in the contracts and other facts supporting the conclusion that Dr. Harper was an

independent contractor. See id. (stating control determination is conducted by

1
(...continued)
"gag rule." However, the "gag rule" reflected a decision by Tinker not to provide
certain medical services (namely, family planning advice regarding abortion), not an
attempt to supervise the day-to-day operations of Dr. Harper. It appears that Dr.
Harper retained the same control over the choices he made in his treatment of
patients that he would have had at a private, religious hospital, or at any other Title
X grantee. Therefore, subjecting Dr. Harper to the "gag rule" did not transform him
into a governmental employee. See Lilly, 876 F.2d at 860.

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balancing competing factors). We therefore reverse the district court's conclusion

that Dr. Harper was a governmental employee. 2

IV.

The government last argues that the district court erred in failing to impose

a trust on the $2,856,100 in damages awarded to the Duplans to cover the

extraordinary costs of Zachary's care. While the district court believed that a trust

arrangement was of vital importance to the case, it concluded that it did not have

the power to impose a trust. As the government correctly notes, we have held that

district courts have inherent authority to impose a trust as part of a judgment in

FTCA cases. See Hull v. United States, 971 F.2d 1499, 1504-05 (10th Cir. 1992);

see also Deasy v. United States, 99 F.3d 354, 360 (10th Cir. 1996); Hill v. United

States, 81 F.3d 118, 121 (10th Cir. 1996). But the fact that district courts

generally have such authority does not end our inquiry. Rather, we must

2
We reject the government's argument that, in light of our conclusion, we must
remand to the district court for a new trial to apportion liability between Dr. Harper
and the government. The government admits that it could be made to pay the entire
judgment because Dr. Harper and Reed are jointly and severally liable. The
government did not bring a cross-claim against Dr. Harper prior to the district court's
determination that Dr. Harper was a governmental employee, and the resolution of
this dispute does not affect the rights of the Duplans with respect to the damages
award. The government may seek indemnity or contribution from Dr. Harper in
subsequent litigation, or the district court in its discretion may choose to resolve the
issue on remand. See Part VII, infra.

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determine whether imposition of a trust in the instant case would have been

appropriate.

An action for wrongful birth is designed to compensate the parents, not the

child. See Liddington v. Burns, 916 F. Supp. 1127, 1132 (W.D. Okla. 1995)

(noting that wrongful birth action is designed to compensate parent plaintiffs for

"being deprived of the option of . . . making an informed and meaningful decision

either to terminate the pregnancy or to give birth to a potentially defective

child"); see also W. Page Keeton et al., Prosser and Keeton on the Law of Torts §

55 at 370 (5th ed. 1984) (stating that wrongful birth claims are brought by parents

to recover their own damages). Unlike the situations presented in Hull, Hill, and

Deasy, Zachary is not the true plaintiff in this case. While the $2,856,100 portion

of the damages award may benefit Zachary, it is not compensation to him for any

injury he has suffered. The damages belong to the true plaintiffs, the Duplans,

and the district court would have erred in imposing a trust on this award in the

absence of their consent.

V.

The Duplans argue in their cross-appeal that the district court erred in

calculating the damages for the Duplans' emotional distress and for the

extraordinary costs of Zachary's care. We will uphold the district court's findings

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concerning the appropriate amount of damages unless they are clearly erroneous.

See Deasy, 99 F.3d at 359.

A. Damages to compensate for costs of Zachary's care

The district court awarded $2,856,100 to the Duplans to compensate them

for the extraordinary costs of Zachary's care. Contending that this amount is

insufficient, the Duplans argue that because they presented uncontradicted expert

testimony regarding the costs of Zachary's care due to the CMV-related defects,

the district court was obligated to accept this testimony. The Duplans ignore the

fact that when the district court acts as fact finder it is not obliged to accept

uncontradicted expert testimony. See Neece v. IRS, 41 F.3d 1396, 1399 (10th

Cir. 1994) ("Any determination of the credibility of a witness necessarily includes

the right of the fact finder to disbelieve the witness.").

Though the government did not present evidence to contradict the

testimony of Lawrence Forman, the Duplans' expert, portions of his testimony

were unsupported, inconsistent with the testimony of the Duplans' other

witnesses, or vague. Forman presented to the district court four models that

estimated the costs of Zachary's lifetime care. Each of the models was comprised

of a number of services and goods that Zachary would need, given certain

assumptions regarding his development. Forman opined that Zachary would

benefit most from one specific model (which was not the least expensive) but did

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not provide a basis for this assertion. Forman also included in his models the

costs of providing certain services or goods without demonstrating Zachary's need

for them. For example, Forman included the cost of providing Zachary with a

wheelchair from his present age until age eighteen. However, Michael Duplan

testified that Zachary neither had nor needed the use of a wheelchair.

Additionally, Forman estimated the expenses of certain services included in his

models as a range of values. Yet, in calculating the overall costs for the models,

Forman did not disclose to the district court what value within the range he had

used as the basis for his calculation or the reason why he had chosen that value.

The district court did not err in choosing not to credit these and other deficient

elements of Forman's damages testimony.

B. Damages to compensate for emotional distress

The district court awarded $200,000 to the Duplans for their emotional

distress. The Duplans contend that this amount is insufficient, though they

provide no legal or factual support for their position. Because, as the Duplans

concede, the injury in a wrongful birth case is the loss of the right to decide

whether to have a child who potentially may suffer birth defects, see Liddington,

916 F. Supp. at 1142, they may receive damages for emotional distress only to the

extent they suffered due to the loss of this right. Nothing in the record leads us to

believe the district court erred in parsing the Duplans' alleged manifestations of

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emotional distress to ascertain that portion attributable solely to the loss of the

right to decide whether to have Zachary or to abort him. Therefore, we cannot

say the district court erred in awarding $200,000 to the Duplans for their

emotional distress.

VI.

We affirm our provisional granting of Dr. Harper's motion to intervene on

appeal with respect to the issues of subject matter jurisdiction, which we must

address sua sponte, and Dr. Harper's status as employee or independent

contractor, which the government raised on appeal. We deny the motion to

intervene on appeal with respect to the issue of Dr. Harper's negligence, which

was not raised on appeal and which Dr. Harper did not seek to present in the

district court. 3 See Spring Constr. Co. v. Harris, 614 F.2d 374, 377 n.1 (4th Cir.

1980) (noting, "most cases have held that intervention on appeal will be granted

only under exceptional circumstances"); McKenna v. Pan Am. Petroleum Corp.,

303 F.2d 778, 779 (5th Cir. 1962) (per curiam) ("A court of appeals may, but only

3
In deciding how to proceed on remand, see Part VII, infra, the district court
should give consideration to the facts that Dr. Harper was represented by the
government at trial and that the government did not appeal the district court's finding
that Dr. Harper was negligent.

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in an exceptional case for imperative reasons, permit intervention where none was

sought in the district court . . . .").

VII.

We conclude that the district court had subject matter jurisdiction over the

Duplans' FTCA claim against the government. We reverse the district court's

determination that Dr. Harper was an employee, not an independent contractor, of

the government, and we affirm the district court's damages award. We remand to

the district court for further proceedings consistent with our opinion.

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