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Date: 10-03-2021
Case Style:
LINDA SISTO v. United States of America
Case Number: 20-16435
Judge: William Alan Fletcher
Court: UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Plaintiff's Attorney:
Defendant's Attorney: Brock J. Heathcotte (argued), Assistant United States
Attorney; Krissa M. Lanham, Appellate Division Chief;
Michael Bailey, United States Attorney
Description:
San Francisco, CA - Federal Tort Claim Act/Indian Self-Determination and Education Assistance Act lawyer represented Plaintiffs-Appellants with claiming the doctor at the San Carlos Apache Healthcare Corporation hospital negligently failed to diagnose a disease that led to death.
SCAHC entered into a “self-determination contract”
under the ISDEAA with the Indian Health Service (“IHS”),
a federal agencywithin the Department of Health and Human
Services, to provide health care to tribal members. In the
terminology of the ISDEAA, SCAHC is an “Indian
contractor.” See 25 U.S.C. § 5321(d). Employees of Indian
contractors are deemed federal employees for purposes of the
FTCA. Id.
6 SISTO V. UNITED STATES
On August 4, 2017, Sisto went to the SCAHC hospital
complaining of a headache, body aches, and a poor appetite.
His symptoms had begun three days earlier. Dr. Gross was
working in the emergency department of the hospital that day.
After running several lab tests, Dr. Gross concluded Sisto was
suffering from a viral infection. He ordered intravenous
fluids as well as pain and nausea medication before
discharging Sisto. Plaintiffs allege that Dr. Gross did not test
Sisto for Rocky Mountain Spotted Fever or prescribe an
antibiotic that would have treated the disease.
On August 8, 2017, Sisto was found dead in his home
with a rash covering his body. There were ticks “all over the
room” and one on his body. A post-mortem analysis of blood
confirmed that Sisto died from Rocky Mountain Spotted
Fever, a potentially fatal tick-borne disease that responds well
to early antibiotic treatment.
Sisto’s mother and his children brought suit against the
United States under the FTCA, alleging negligence by
Dr. Gross in failing to diagnose and treat Sisto appropriately
at the SCAHC hospital. The government moved to dismiss
the claim for lack of subject matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1). It argued that Dr. Gross
was an employee of an independent contractor rather than of
SCAHC, and that the FTCA does not waive the United
States’ sovereign immunity for claims against employees of
independent contractors.
At the time of treatment, Dr. Gross was working at the
SCAHC hospital pursuant to a contract between SCAHC and
Tribal EM, PLLC (“T-EM”) under which T-EM provided
emergency room medical services at the SCAHC hospital.
The contract between SCAHC and T-EM provided:
SISTO V. UNITED STATES 7
T-EM is and shall at all times be an
independent contractor with respect to
SCAHC in the performance of its obligations
under this Agreement. Nothing in this
Agreement shall be construed to create an
employer/employee . . . relationship between
SCAHC and T-EM [or] any T-EM Provider
. . . .
¶ 4.1. T-EM agreed to be
solely responsible for paying all expenses,
including compensation, health and disability
insurance, workers’s compensation insurance,
life insurance, professional liability insurance,
retirement plan contributions, employee
benefits, income taxes, FICA, FUTA, SDI and
all other payroll, employment or other taxes
and withholdings, with respect to T-EM
Providers . . . .
Id. T-EM agreed to indemnify SCAHC for “negligent acts or
omissions” of T-EM employees. ¶ 4.4(b).
The contract further provided that doctors “employed or
otherwise engaged by or under contract with T-EM . . . to
provide the Services . . . under this Agreement” are “T-EM
Providers.” Recitals, ¶ D. The contract listed Dr. Gross as a
“T-EM Provider.” Exhibit 2.5(a). A sample “Letter of
Acknowledgement” was attached to the contract, to be signed
by “T-EM Provider[s].” The letter provided, “I expressly . . .
[a]cknowledge that I have no employment, independent
contractor or other contractual relationship with SCAHC, that
my right to practice at SCAHC as a T-EM Provider is derived
8 SISTO V. UNITED STATES
solely through my employment or contractual relationship
with T-EM.” Exhibit 2.5.
The district court granted the government’s motion to
dismiss, finding that Dr. Gross was an employee of T-EM
rather than SCAHC. Plaintiffs timely appealed.
II. Standard of Review
“We review de novo a dismissal for lack of subject matter
jurisdiction under the FTCA.” Edison v. United States,
822 F.3d 510, 517 (9th Cir. 2016).
III. Discussion
A. The FTCA and the ISDEAA
The FTCA waives the sovereign immunity of the United
States, allowing the United States to be sued for damages for
injuries “caused by the negligent or wrongful act or omission
of any employee of the Government while acting within the
scope of his office or employment.” 28 U.S.C. § 1346(b)(1).
“Employee of the government” is defined to include “officers
or employees of any federal agency.” Id. § 2671. “[T]he
term ‘Federal agency’ . . . does not include any contractor
with the United States.” Id. “Courts have construed the
independent contractor exception to protect the United States
from vicarious liability for the negligent acts of its
independent contractors.” Edison, 822 F.3d at 518 (citation
omitted).
The ISDEAA was enacted in 1975 to increase tribal
participation in the management of programs and activities on
reservations by authorizing tribes and tribal organizations to
SISTO V. UNITED STATES 9
enter into contracts, called “self-determination contracts,”
with either the Secretaryof Health and Human Services or the
Secretary of the Interior. 25 U.S.C. § 5304(i), (j). Under
such contracts, the “Indian contractor” agrees to undertake
responsibility “for the planning, conduct, and administration
of programs or services that are otherwise provided to Indian
Tribes and members of Indian Tribes pursuant to Federal
law.” Id. § 5304(j). In the case before us, SCAHC entered
into such a contract with the Indian Health Service, a division
of the Department of Health and Human Services.
Tribes were faced with substantial costs in carrying out
their self-determination contracts. Among them were high
costs for liability insurance, particularly medical malpractice
insurance. Coverage Issues Under the Indian SelfDetermination Act, 22 U.S. Op. O.L.C. 65, 68 (1998). These
costs were a significant disincentive to tribes contemplating
self-determination contracts for medical services. When the
government provided health services directly to the tribes,
malpractice claims were covered by the FTCA because the
services were provided by federal employees. In 1987, in
order to encourage tribes to enter into self-determination
contracts for medical services, Congress amended the
ISDEAA to provide that personal injury claims arising out of
medical malpractice claims were covered by the FTCA. The
current version of the 1987 amendment is codified in
§ 5321(d).
B. Section 5321(d)
Section 5321(d) is not an easy read. It is a single sentence
of 336 words, punctuated by a colon after the first 253 words.
Paring it down to its relevant text, § 5321(d) provides:
10 SISTO V. UNITED STATES
For purposes of section 233 of Title 42, with
respect to claims by any person . . . for
personal injury, including death, resulting
from the performance . . . of medical . . .
functions . . . , an Indian tribe, a tribal
organization or Indian contractor carrying
out a contract . . . under section[] 5321 . . . of
this title is deemed to be part of the Public
Health Service in the Department of Health
and Human Services while carrying out any
such contract . . . and its employees (including
those acting on behalf of the organization or
contractor as provided in section 2671 of Title
28, and including an individual who provides
health care services pursuant to a personal
services contract with a tribal organization
for the provision of services in any facility
owned, operated, or constructed under the
jurisdiction of the Indian Health Service) are
deemed employees of the Service while acting
within the scope of their employment in
carrying out the contract . . . .
(Emphases added.)
The statutory references in the text just quoted are as
follows: Section 233 of Title 42 authorizes civil actions for
damages against the United States Public Health Service.
Section 5321 of Title 25, part of the ISDEAA, authorizes the
Secretary of Interior or Secretary of Health and Human
Services to enter into “self-determination contracts” with
Indian tribes or tribal entities, under which the tribe or tribal
entity undertakes to perform functions that would otherwise
be performed by the federal government; § 5321(d), whose
SISTO V. UNITED STATES 11
relevant text is quoted above, provides that certain persons
acting under such contracts may be sued under the FTCA.
Section 2671 of Title 28 is a section of the FTCA. Quoted
above, it defines the term “Federal agency” for purposes of
the FTCA, authorizing damage suits in tort against employees
of federal agencies; as noted above, § 2671 specifically
provides that the term “does not include any contractor with
the United States.”
In the normal operation of the FTCA, federal employees
are covered for acts or omissions occurring in the scope of
their employment. However, when an independent contractor
with the United States performs a function for the
government, that independent contractor (as well as its
employees) are not covered. 28 U.S.C. § 2671. Section
5321(d) changes the normal operation of the FTCA,
providing that Indian contractors and their employees are
deemed to be employees of the United States Public Health
Service, thus making the FTCA applicable to suits against
them arising out of the medical services provided.
C. Application to this Case
In the case before us, SCAHC has entered into a selfdetermination contract with the Indian Health Service to
provide health services to the San Carlos Apache Tribe. It is
clear that employees of SCAHC are covered by the FTCA.
The question is whether an employee of an entity that has
contracted with SCAHC to provide health servicestoSCAHC
as an independent contractor is also covered by the FTCA.
As we read § 5321(d), the answer is “no.”
The parties agree that, under 25 U.S.C. § 5321(d) of the
ISDEAA, SCAHC is part of the United States Public Health
12 SISTO V. UNITED STATES
Service for purposes of the FTCA and that, subject to
exceptions not relevant here, injuries caused by the
negligence of SCAHC employees while acting within the
scope of their employment are covered by the FTCA. The
district court held that Dr. Gross was not an employee of
SCAHC, but rather an employee of T-EM, an independent
contractor. The court concluded that the FTCA and
§ 5321(d) do not waive the United States’ sovereign
immunity with respect to claims based on the negligence of
employees of independent contractors providing health care
pursuant to a self-determination contract under the ISDEAA.
We agree with the district court. The contract between
SCAHC and T-EM, whose relevant language we quote above,
explicitly provides that the contract does not establish an
employer/employee relationship between SCAHC and any
“T-EM Provider.” Instead, the contract establishes an
independent contractor relationship between SCAHC and TEM, and an employer/employee relationship between T-EM
and T-EM Providers. The contract lists Dr. Gross by name as
a T-EM Provider, and the sample “Letter of
Acknowledgement” attached to the contract “expressly”
states that T-EM Providers “have no employment . . .
relationship with SCAHC.” We therefore conclude that
Dr. Gross was an employee of T-EM rather than SCAHC, and
that the FTCA and § 5321(d) do not authorize a suit against
the United States based on his alleged negligence.
D. Plaintiffs’ Arguments
Plaintiffs make several arguments against our conclusion.
We address them in turn.
SISTO V. UNITED STATES 13
1. “Pursuant to a Personal Services Contract”
Plaintiffs argue that Dr. Gross was “an individual who
provides health care services pursuant to a personal services
contract with a tribal organization” within the meaning of
§ 5321(d) and that he is therefore “deemed” an employee of
the Public Health Service under that provision. We disagree
with Plaintiffs’ broad reading of § 5321(d).
As we read § 5321(d), in order to be “an individual who
provides health care services pursuant to a personal services
contract with a tribal organization,” the individual must
himself or herself have entered into a personal services
contract with an Indian tribe, tribal organization, or Indian
contractor. It is not enough for the individual to have entered
into a personal services contract with an entity that has
entered into an agreement as an independent contractor with
an Indian tribe, tribal organization, or Indian contractor.
We are reinforced in this reading by regulations
promulgated by the Bureau of Indian Affairs and the Indian
Health Service that seek to explain the scope of FTCA
coverage under § 5321(d). See 25 C.F.R. § 900.180 et seq.
While the regulations are not a model of clarity, they support
our conclusion that a “personal services contract” within the
meaning of § 5321(d) refers to a contract between an Indian
contractor and an individual providing personal services
pursuant to that contract, and not to a contract between an
independent subcontractor such as T-EM and an individual.
The regulations pretty clearly indicate that a “personal
services contract” to which § 5321(d) refers is a contract
14 SISTO V. UNITED STATES
between an Indian contractor and the person providing the
services. Section 900.186 provides:
Is it necessary for a self-determination
contract to include any clauses about
Federal Tort Claims Act coverage?
No, it is optional. At the request of Indian
tribes and tribal organizations, selfdetermination contracts shall include the
following clause[] to clarify the scope of
FTCA coverage:
. . .
For purposes of Federal Tort Claims Act
coverage, the contractor and its employees
(including individuals performing
personal services contracts with the
contractorto provide health care services)
are deemed to be employees of the
Federal government while performing
work under this contract.
Id. § 900.186(a) (emphasis added). Under the clarifying
language, “individuals performing personal services contracts
with the contractor” are deemed federal employees. As we
read this language, individuals cannot “perform[] personal
services contracts with the contractor” if they are not parties
to a contract with the contractor. Thus, individuals
performing work under a contract with a subcontractor, rather
than with the Indian contractor, are not deemed federal
employees based on the personal services they provide.
SISTO V. UNITED STATES 15
Elsewhere, the regulations provide that “[s]ubcontractors
or subgrantees providing services to [an Indian] contractor or
grantee are generally not covered” by the FTCA. 25 C.F.R.
§ 900.189. Section 900.189 recognizes an exception for
“personal services contracts under [1] § 900.193 (for
§ 900.183(b)(1)) or [2] § 900.183(b) (for § 900.190).” Id.
(bracketed numbers added). None of these sections
contradict the language in § 900.186(a) indicating that a
“personal services contract” refers to a contract between an
Indian contractor and an individual providing personal
services.
First, § 900.193 provides:
Does FTCA coverage extend to individuals
who provide health care services under a
personal services contract providing
services in a facility that is owned,
operated, or constructed under the
jurisdiction of the IHS?
Yes. The coverage extends to individual
personal service contractors providing health
care services in such a facility . . . .
(Emphasis added.) Section 900.183(b)(1), in turn, provides:
(b) What claims may not be pursued under
FTCA?
(1) Except as provided in § 900.181(a)(1)
and § 900.189, claims against contractors
arising out of the performance of
16 SISTO V. UNITED STATES
subcontracts with a self-determination
contractor[.]
Section 900.181(a)(1), referenced in § 900.183(b)(1), does
not exist, but may refer to § 900.181(1) which includes
certain subcontractors in California (not relevant here) in the
definition of an Indian contractor. Section 900.189, quoted
above, provides that subcontractors are generally not covered
by the FTCA unless they are Indian contractors or operating
pursuant to personal services contracts.
Second, § 900.183(b) specifies four types of claims that
“may not be pursued” under the FTCA. The first claim is
specified in subsection (b)(1), quoted in the preceding
paragraph. The other claims are (b)(2), for on-the-job injuries
covered by “workmen’s compensation”; (b)(3), for breach of
contract; and (b)(4), for claims arising out of activities
outside of an employee’s scope of employment. Section
900.190 does not mention personal services contracts.
We see nothing in the history leading to § 5321(d)’s
addition to the ISDEAA, in the text of § 5321(d), or in any of
the regulations that leads us to believe that Congress intended
to expand liability under the FTCA in the manner for which
Plaintiffs contend. Because Dr. Gross had only a contract
with T-EM, he was not “an individual who provide[d] health
care services pursuant to a personal services contract with a
tribal organization.” He was thus not deemed an employee of
the Public Health Service under § 5321(d).
2. Staff Privileges
Plaintiffs argue that because SCAHC granted Dr. Gross
hospital privileges to provide emergency room services at
SISTO V. UNITED STATES 17
SCAHC, he is deemed a federal employee for purposes of the
FTCA under 25 U.S.C. § 1680c(e)(1) and 25 C.F.R.
§ 900.199. We disagree. These provisions extend FTCA
coverage to individuals who are designated as employees for
purposes of the FTCA as part of the privileging process and
are issued privileges on the condition that the practitioner
provide services covered by the FTCA. They do not
independently confer FTCA coverage to all health care
providers who have been granted hospital privileges.
Section 1680c(e)(1) provides that hospital privileges in
facilities like SCAHC may be extended to non-Indian Health
Service practitioners who provide certain services. It
continues:
Such non-Service health care practitioners
may, as part of the privileging process, be
designated as employees of the Federal
Government for purposes of section 1346(b)
and chapter 171 of Title 28 (relating to
Federal tort claims) only with respect to acts
or omissions which occur in the course of
providing services to eligible individuals as a
part of the conditions under which such
hospital privileges are extended.
25 U.S.C. § 1680c(e)(1).
Under § 1680c(e)(1), non-Service providers such as
Dr. Gross may be designated as employees for purposes of
the FTCA for care they provide to eligible individuals. Id.
The statute clearly recognizes the possibility, however, that
a provider may receive hospital privileges without being
designated an employee for purposes of the FTCA, for it
18 SISTO V. UNITED STATES
provides that “[s]uch . . . practitioners may, as part of the
privileging process, be designated as employees” to provide
care to eligible individuals “as a part of the conditions under
which such hospital privileges are extended.” Id. (emphasis
added). The statute does not support Plaintiffs’ argument that
providers issued privileges to care for eligible individuals are
necessarily covered by the FTCA. See Tsosie v. United
States, 452 F.3d 1161, 1167 (10th Cir. 2006) (stating that
such an argument “presents a topsy-turvy reading of the
statute”).
Plaintiffs point to no evidence that SCAHC designated
Dr. Gross an employee for purposes of the FTCA “as part of
the privileging process . . . as a part of the conditions under
which such [] privileges [were] extended.” 25 U.S.C.
§ 1680c(e)(1). The contract between SCAHC and T-EM
specified that T-EM would provide the listed medical services
as an independent contractor; required T-EM to maintain its
own liability insurance to provide coverage for T-EM and TEM Providers; and required T-EM to indemnify SCAHC for
damage judgments arising out of a negligent act or omission
by a T-EM Provider. It comes as no surprise that SCAHC did
not then also designate T-EM’s employees as employees of
SCAHC for purposes of the FTCA, thereby protecting itself
from liability, for SCAHC was already protected from
liability by the provisions in its contract with T-EM.
25 C.F.R. § 900.199, upon which Plaintiffs also rely,
provides:
Does FTCA coverage extend to health care
practitioners to whom staff privileges
have been extended in contractor health
care facilities operated under a
SISTO V. UNITED STATES 19
self-determination contract on the
condition that such practitioner provide
health services to IHS beneficiaries covered
by FTCA?
Yes, health care practitioners with staff
privileges in a facility operated by a
contractor are covered when they perform
services to IHS beneficiaries. Such personnel
are not covered when providing services to
non-IHS beneficiaries.
Like § 1680c(e)(1), § 900.199 does not stand for the
proposition that the issuance of hospital privileges alone
provides FTCA coverage. Instead, § 900.199 clarifies that
those practitioners to whom staff privileges have been
extended “on the condition that [they] provide health services
to IHS beneficiaries covered by FTCA” are covered only
when performing services for IHS beneficiaries.
Plaintiffs point to the answer portion of § 900.199 when
they contend that it extends FTCA coverage to practitioners
like Dr. Gross who have been issued staff privileges. But the
answer must be read in light of the question, which assumes
privileges were issued “on the condition that [the] practitioner
provide health services to IHS beneficiaries covered by
FTCA.” Id. (emphasis added). In light of the question, the
answer clarifies that when privileges are issued on the
condition that the practitioner provides services covered by
the FTCA, such coverage exists only when they provide
services to IHS beneficiaries.
Because hospital privileges were not issued to Dr. Gross
on the condition that he provide services covered by the
20 SISTO V. UNITED STATES
FTCA, neither 25 U.S.C. § 1680c(e)(1) nor 25 C.F.R.
§ 900.199 confers FTCA coverage.
3. Control
In some circumstances, despite language to the contrary
in a contract, a court may determine that a worker is an
employee based on the degree of control exercised over the
worker. See, e.g., Alexander v. FedEx Ground Package Sys.,
Inc., 765 F.3d 981 (9th Cir. 2014). Thus, in Carrillo v.
United States, 5 F.3d 1302, 1304 (9th Cir. 1993), where the
question was whether a doctor working for the Veteran’s
Administration was a federal employee under the FTCA, we
examined the degree of control over the manner in which the
doctor practiced medicine.
Plaintiffs argue that under the terms of the contract
between SCAHC and T-EM, Dr. Gross “was part of an
apparent employer-employee relationship and was, by
reasonable inference, subject to the hospital’s relatively
continuous supervision and control.” But Plaintiffs point to
nothing that shows that SCAHC had actual “control over
Dr. [Gross’s] practice of medicine.” Id. at 1305 (emphasis
added). T-EM, rather than SCAHC, was responsible for
supervising Dr. Gross’s actions in diagnosing and treating
patients. The contract provided that T-EM’s professional
services were to include “the evaluation, diagnosis, treatment,
supervision, and management of . . . health complaints and
crises . . . with respect to patients presenting to the
Department.” T-EM, through its Medical Director, was to
“[p]rovide medical direction for the day-to-day operations of
the Department.” The contract further specified that “T-EM
. . . shall ensure that T-EM Providers . . . satisfy [designated]
performance standards.”
SISTO V. UNITED STATES 21
Plaintiffs also argue that Dr. Gross was an employee of
the government for purposes of the FTCA because he was a
“person[] acting on behalf of a federal agency in an official
capacity.” 28 U.S.C. § 2671. But the Supreme Court applies
the ordinary “control test” to this provision of § 2671 and
does not consider a contractor “whose physical performance
is not subject to governmental supervision . . . to be treated as
‘acting on behalf of’ a federal agency simply because they are
performing tasks that would otherwise be performed by
salaried employees of the Government.” See Logue v. United
States, 412 U.S. 521, 531–32 (1973).
We therefore conclude that SCAHC did not control
Dr. Gross’s actions in administering care to a degree or in a
manner that rendered him an employee of the government
when he treated Sisto.
Outcome: Dr. Gross was not an “employee” of the United States
under the FTCA and 25 U.S.C. § 5321(d) when he treated
Tyrone Sisto. We therefore affirm the district court’s order
of dismissal. In so doing, we do not reach the merits of
Plaintiffs’ malpractice claims which remain to be resolved in
the appropriate forum.
AFFIRMED
Plaintiff's Experts:
Defendant's Experts:
Comments: