In the case of Maureen Reynolds v. United States, the plaintiff, a former security officer for General Security Services Corporation, filed a lawsuit under the Federal Tort Claims Act (FTCA) after being acquitted of false reporting charges that arose from her actions related to an incident involving a naked security guard locked out on the roof of the Minton-Capehart Federal Building in August 2003. The Federal Protective Service (FPS) investigated the incident and, despite Reynolds being unaware of the guard's nudity, FPS officers submitted an affidavit to the Marion County prosecutor asserting that she had lied. This led to Reynolds being charged with false reporting, resulting in her indefinite unpaid leave and eventual termination from her job, despite her acquittal. The district court dismissed her complaint citing lack of subject-matter jurisdiction and the discretionary-function exception under the FTCA. However, the Seventh Circuit Court of Appeals disagreed with the district court's reasoning and remanded the case for further proceedings, accepting the allegations in Reynolds’s complaint as true and suggesting that the FPS's actions may not be protected under the FTCA's discretionary-function exception.
The Federal Tort Claims Act (FTCA) includes exceptions to its waiver of sovereign immunity, notably barring claims linked to an employee’s discretionary function, as per 28 U.S.C. 2680(a). The district court dismissed Reynolds' complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), citing three reasons. First, the court determined that the actions of Lambert and Fullerton were "clearly discretionary," tied to their interpretations of public policy, allowing for independent judgment in law enforcement duties. Second, it ruled that Lambert and Fullerton, as government contractors, did not qualify as "employees of the government," thus limiting Reynolds' ability to sue under the FTCA (28 U.S.C. 2671). Third, it concluded that Reynolds's claim for malicious prosecution was invalid because Lambert and Fullerton did not engage in actions typical of “investigative or law enforcement officers,” as defined in 28 U.S.C. 2680(h). The court's dismissal was ultimately seen as a misclassification; the exceptions to the FTCA do not limit subject-matter jurisdiction but rather the scope of claims, suggesting a correct motion would have been to dismiss for failure to state a claim (Rule 12(b)(6)). On appeal, Reynolds argues that the actions of Lambert and Fullerton fall outside the discretionary-function exception, contending that the FTCA allows for suits against the United States for injuries caused by federal employees if their actions would result in liability for a private individual (28 U.S.C. 1346(b)(1)).
The discretionary-function exception aims to prevent judicial interference with governmental decisions based on social, economic, and political policies, as established in United States v. Varig Airlines. It has two main requirements:
1. The alleged conduct must involve an element of judgment or choice; it is not discretionary if a federal directive mandates a specific course of action.
2. The conduct must represent a permissible exercise of policy judgment, protecting only actions based on public policy considerations.
The subjective intent of the government actor is irrelevant, and the focus is on whether the actions are susceptible to policy analysis. Reynolds contends that the actions of Lambert and Fullerton, which involved submitting a knowingly false affidavit, do not qualify for this exception. While the government argues that the discretionary-function exception applies, Reynolds asserts that providing false information is separable from the protected discretionary decision of prosecution. The government cited Gray v. Bell, which suggested that prosecutorial decisions are discretionary, but Reynolds argues her case is different because it involves knowingly false information that fueled her prosecution. Unlike Gray, where alleged misconduct was tied to prosecutorial discretion, Reynolds alleges that Lambert and Fullerton's actions are distinct and not shielded by the exception.
A federal investigator's decision to lie under oath is not a discretionary decision protected under Indiana law, as outlined in IND. CODE 35-44-2-1(a)(1) and 35-44-2-2(d)(1). This conduct is separate from the discretionary decision to prosecute, as established in Moore v. Valder. Disclosing grand jury testimony to unauthorized parties is also not discretionary nor tied to discretionary matters, as indicated in Limone v. United States and Tri-State Hospital Supply Corp. v. United States. Perjury does not qualify as a protected act under the discretionary function exception, which Congress intended to shield only legislative or administrative decisions rooted in policy.
Reynolds challenges the district court's classification of FPS investigators Lambert and Fullerton as contractors; however, the government concedes they are government employees. The district court's dismissal reasoning which required a search, seizure, or arrest for malicious prosecution claims, as interpreted through Pooler v. United States, is also contested, with the government not defending that point. The text clarifies that the language of 28 U.S.C. 2680(h) does not impose such restrictive requirements, and courts have criticized Pooler for being unduly narrow. The provision allows for claims arising from malicious prosecution by investigative or law enforcement officers, regardless of whether a search, seizure, or arrest occurred.
The case cited by the district court, Employers Ins. of Wausau v. United States, indicates that the Federal Tort Claims Act (FTCA) does not require a direct connection to search, seizure, or arrest for claims of intentional torts under Section 2680(h). Instead, the claim must allege government wrongdoing related to acts or omissions by investigative or law enforcement officers during their duties. The court disagrees with previous interpretations that limit these claims to actions occurring during a search or arrest.
Further, the court evaluates Reynolds's claim under Indiana tort law for malicious prosecution, which requires proof that the defendant acted with malice and without probable cause in initiating a prosecution that ended favorably for the plaintiff. Probable cause is defined as what a reasonable person would believe after a reasonable investigation. Malice may be inferred from a lack of probable cause or personal animosity. Reynolds has adequately alleged these elements, allowing her complaint to proceed. Consequently, the district court's dismissal is vacated, and the case is remanded for further proceedings.
