Volume 18, Number 6
ADMINISTRATIVE LAW AND REGULATORY PRACTICE
Federal Tort Claims Act Administrative Claims
A Better Way to Resolve Federal Tort Claims
By Jeffrey Axelrad
The administrative claims process of the Federal Tort Claims Act (FTCA) is a dispute resolution tool that works. In fact, the administrative claims procedure is better than traditional alternative dispute resolution (ADR) techniques involving third-party intervention. Unlike ADR, which is often used after the courts are already involved, the direct two-party process involved in administrative claims provides a system and a resolution before a single piece of paper is filed in the court system.
Federal Tort Claims Act and administrative claims. Mandatory administrative claim legislation authorizes the head of each federal agency to "consider, ascertain, adjust, determine, compromise and settle any claims for money damages against the United States" within the purview of the FTCA. The legislation mandates that an FTCA suit cannot be instituted unless the claimant has first presented the claim to the appropriate federal agency and the agency has denied the claim in writing. However, the agency's failure to make final disposition of a claim within six months after it is filed shall, at the claimant's option, be deemed a final denial of the claim. The sole exception to the mandatory requirement that an agency first be presented with a claim is that the requirement "shall not apply to such claims as may be asserted under the Federal Rules of Civil Procedure by a third party complaint, cross-claim, or counterclaim."
In terms of the claim process, the claim must "be presented to the Federal agency whose activities gave rise to the claim." If more than one agency is involved, the claimant should present the claim to each agency. Determination of the agency whose activities gave rise to the claim focuses entirely on acts or omissions of the person who allegedly committed the tort. The tortfeasor's employer is the agency whose activities gave rise to the claim for purposes of the administrative claim presentation requirement.
The FTCA does not define the term "claim," and there has been debate about claim requirements. A number of courts have held that notice of a claim is sufficient if it permits an agency to investigate the claim and provides a "certain" total amount sought by the claimants. However, the more prevalent view is that each separate claimant seeking recovery must present a separate, signed claim, including a "sum certain."
The usual FTCA claim will sufficiently set forth facts indicating why the claimant believes a tort has been committed by a federal agency employee, the date of the alleged tort, and information sufficient to permit an investigation. A legal theory supporting recovery is not required to be stated in the claim itself as long as the facts make out a specific tort. The claimant's signature and the sum certain are essential requisites to presentation of an effective claim.
Once an agency receives an administrative claim, it is empowered to consider whether to grant the claim in full, resolve the claim by negotiating a compromise settlement, deny the claim, or take no action on the claim. If an agency denies a claim at any time, the claimant must commence suit against the United States within six months after the date of mailing of the notice of final denial of the claim, or the claim will be forever barred. However, as long as the agency has not acted on the claim, a claimant is protected against the running of the statute of limitations even if the agency does not act on the claim for an extended period.
The administrative process under the FTCA is a prerequisite to the claimant's right to file suit if dissatisfied with the agency's action on a claim. The FTCA contains exceptions and exclusions applicable to FTCA claims as well as subsequent suits. If an exception applies, the plaintiff has no remedy under the act. If a claim is subject to being paid under the FTCA, the act says the United States is liable "in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages." The United States is liable if a private person would be liable to the claimant in accordance with the law of the place where the act or omission occurred. Thus, state damages law is directly relevant to consideration of what action to take on an administrative claim. State law is utilized to determine both the elements of a tort and the level of damages if the claim is not barred by or limited pursuant to substantive provisions of the act.
ADR and the 1990 Administra-tive Dispute Resolution Act. Alternative dispute resolution is a "collective [term] for a number of joint problem-solving processes used in lieu of formal, adversarial methods for resolving conflict[s]." There is a continually growing montage of ADR techniques and variations within this rubric. However, ADR definitions are narrowing to include only those techniques that employ a third-party neutral. Traditional ADR techniques include such tools as facilitated negotiations, conciliation, mediation, neutral evaluation, facility models, settlement conferences or judges, mini-trials, arbitration, negotiated rulemaking, ombudsmen, and partnering.
ADR processes usually involve the planned intervention of a third-party neutral. Congress passed the 1990 Administrative Dispute Resolution Act (ADRA) to encourage federal agencies to utilize alternative dispute resolution before adversarial litigation. As amended, ADRA defines alternative means of dispute resolution as "any procedure that is used to resolve issues in controversy, including, but not limited to, conciliation, facilitation, mediation, fact-finding, minitrials, arbitration and use of ombuds, or any combination thereof." It defines a dispute resolution proceeding as "any process in which an alternative means of dispute resolution is used to resolve an issue in controversy in which a neutral is appointed and specified parties participate." It not only endorses the use of ADR but also sets out an implementation and training plan that includes appointment of agency dispute resolution specialists to encourage the use of a third-party neutral. The ADRA's vision of ADR generally has third-party intervention as a prerequisite. It also sets out policies for ADR confidentiality, arbitration, compilation of ADR data, use of ADR in contract disputes, and policies that sometimes contraindicate ADR utilization.
Administrative claims are better than third-party ADR for resolving FTCA claims. A hallmark of the Administrative Dispute Resolution Act (ADRA) is the discretion it gives agencies to implement and even invent a unique dispute resolution strategy that works for the agency and its constituents.
The vast majority of FTCA tort claims are resolved more efficiently by the two-party administrative claims process than third-party ADR. First, unlike court-annexed or litigation-anticipated ADR, administrative claims begin, and often resolve, a dispute before litigation even starts. Second, third-party ADR is often unnecessary and an additional time and monetary expense, because the focus of the usual FTCA case is resolution and fair compensation, not preservation of the parties' relationship. Finally, administrative claims avoid the implementation obstacles of third-party ADR techniques, without the added time and expense of third-party ADR. Administrative claims allow parties to reach the benefits of settlement without the expense of filing, much less litigating, a suit.
Although court-annexed or in-court ADR has become a favorite technique, in these ADR techniques courts, judges, and traditional litigation procedures have already been called into use. Court-annexed and even private-party ADR techniques do not begin until parties have met an impasse in the discovery process, fear the length or result of litigation, or a judge orders the parties to use ADR. In each of these situations, some type of formal court-related proceeding is activated before ADR begins. The FTCA administrative claims process, by contrast, resolves claims prior to litigation.
Since the administrative claims procedure is mandated by statute, agencies do not need to obtain the voluntary agreement of a private party to proceed with the resolution process. If no administrative settlement is reached, the claimant's right to a judicial determination is preserved, and the claimant may file suit in federal court. Not only is a party's full day in court safeguarded, so is his or her right to appeal. While administrative claims presents a no-risk proposition for claimants, the time element is a sufficient motivation for claimants to seek a speedy resolution through administrative claims, rather than wait for their chance at litigation.
Jeffrey Axelrad is the director of the Federal Tort Claim Act staff.
This article is an abridged and edited version of one that originally appeared on page 1331 of Administrative Law Review, Fall 2000 (52:4).