Tsosie v. United States of America et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Charlotte Tsosie,
Plaintiff,
v.
United States of America, et al.,
Defendants.
No. CV-25-08065-PCT-JJT
ORDER
At issue is Defendant United States of America’s (“United States”) Motion to
Dismiss for Lack of Subject Matter Jurisdiction (“Motion to Dismiss”) (Doc. 18), Motion
to Substitute Party and Response to Application of Default (“Motion to Substitute”)
(Doc. 24), and Motion to Set Aside Entry of Default and Motion to Amend United States’
Motion to Dismiss to Include FDIHB as a Movant (“Motion to Set Aside and Amend”)
(Doc. 26). Each pending Motion has been fully briefed. For the reasons set forth below,
the Court will order the parties to submit supplemental briefing regarding the Motion to
Dismiss, grant the Motion to Substitute, and grant in part and deny in part the Motion to
Set Aside and Amend.
I. BACKGROUND
On March 24, 2025, Plaintiff filed a complaint against Defendants United States,
Fort Defiance Indian Hospital Board, Inc. (the “Board”), and Dr. Mohammad
Akhavanheidari for a medical malpractice claim arising under the Federal Tort Claims Act
(“FTCA”), 28 U.S.C. §§ 2671–80. The United States timely filed its presently pending
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Motion to Dismiss, and the Board filed nothing. The Court ordered Plaintiff to either apply
for entry of default or file a status report as to the Board. (Doc. 22.) Plaintiff promptly filed
her Request for Entry of Default (Doc. 23) against the Board. In response, the United States
requested that it be substituted for the Board and argued that default as to the Board was
inappropriate. (Doc. 24 at 1–2). The next day, the Clerk of Court entered default as to the
Board. (Doc. 25.) The United States moves to set aside the default and amend its pending
Motion to Dismiss to include the Board as a movant. (Doc. 26.)
II. SUBSTITUTION OF THE BOARD
“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.” Sisto v. United States, 8 F.4th 820, 824, 825 (9th Cir. 2021) (quoting 28
U.S.C. § 1346(b)(1)) (internal quotation marks omitted).
Pursuant to § 2679 of the FTCA, the Attorney General must defend an action
brought against a federal employee so long as the Attorney General certifies that the
employee was acting within the scope of employment at the time of the alleged misconduct.
28 U.S.C. § 2679(c). Thereafter, the United States is substituted for the employee as a
party. 28 U.S.C. § 2679(d). The FTCA defines an “employee” of the federal government
as “officers or employees of any federal agency . . . [and] persons acting on behalf of a
federal agency in an official capacity . . .” 28 U.S.C. § 2671. The FTCA does not generally
apply to independent government contractors. 28 U.S.C. § 2671.
The Indian Self-Determination and Education Assistance Act (“ISDEAA”), 25
U.S.C. §§ 5301–423, expanded FTCA coverage and “created a specific system for
providing services to Indians that expressly creates FTCA liability for . . . private, tribally-
operated programs.” Morales v. United States, No. 2:18-cv-03051 TLN AC (PS), 2019
U.S. Dist. LEXIS 22029, *7-8 (E.D. Cal. Feb. 8, 2019). The ISDEAA permits the Secretary
of the Department of Health and Human Services (“HHS”) “to enter into self-determination
contracts with Indian tribes or tribal entities, under which the tribe or tribal entity
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undertakes to perform functions that would otherwise be performed by the federal
government.” Sisto, 8 F.4th at 825. A tribal organization carrying out a self-determination
contract “is deemed to be part of the Public Health Service in the [HHS] while carrying out
any such contract or agreement . . .” 25 U.S.C. § 5321(d).
Here, the United States requests to substitute itself for the Board as a party pursuant
to 25 U.S.C. § 5321(d). (Doc. 24 at 1.) According to the United States, that statute deems
the Board as a part of the HHS by virtue of entering a self-determination contract. (Id.)
Plaintiff does not contest that § 5321(d) applies to the Board. Rather, Plaintiff argues that
substitution is inappropriate because the Board failed to obtain certification from the
Attorney General pursuant to 28 U.S.C. § 2679(c)–(d). (Doc. 29 at 1–2.) The United States
replies that the Board is deemed a federal agency and therefore is not an employee as
contemplated by § 2679(c) (Doc. 30 at 3).
Plaintiff quotes two district court cases to support the proposition that the Board
must be certified under § 2679 before substitution can occur. (See, e.g., Doc. 29.) Plaintiff
first refers to Wilhite v. Littlelight, in which board directors of a tribal organization were
sued in their individual capacities. No. CV 19-20-BLG-TJC, 2020 U.S. Dist. LEXIS 51127,
*1–5 (D. Mont. Mar. 23, 2020). There, the individual defendants sought—and were
ultimately denied—the coverage of the FTCA before seeking certification from the
Attorney General under § 2679. Id. at *8–9. Aside from quoting this case, Plaintiff makes
no attempt to draw parallels between Wilhite and the issue at bar. From its own assessment,
the Court finds Wilhite distinguishable in that the defendants were individual employees
sued in their personal capacity, whereas the Board is a tribal organization. (See Doc. 1 ¶ 1;
Doc. 30 at 3.) This distinction is critical because the Ninth Circuit has already determined
that the term “employee” as defined in § 2679 is limited to individuals and does not apply
to entities. Adams v. United States, 420 F.3d 1049, 1054 (9th Cir. 2005). Plaintiff does not
offer any authority or argument that the Board is nonetheless an “employee” under § 2679
despite the clear language of § 5321(d) and Ninth Circuit precedent.
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Second, Plaintiff cites Walker v. JC Lewis Primary Health Care Ctr., in which a
healthcare center was certified as an “employee” of the federal government under the
Federally Supported Health Centers Assistance Act. No. CV423-349, 2024 U.S. Dist.
LEXIS 2182, *3 (S.D. Ga. Jan. 3, 2024). As the United States points out, the certification
in Walker occurred under a distinct statute that applied to a specific category of healthcare
centers—not tribal organizations operating under a self-determination contract. (See Doc.
30 at 4–5.) Plaintiff identifies no meaningful similarities between Walker and the case at
bar, and the Court finds none.
The effect of § 5321(d) renders the Board a “part of the Public Health Service in the
[HHS] while carrying out any such contract or agreement.” Plaintiff does not dispute that
§ 5321(d) applies to the Board, nor does she convince the Court that the Board is an
“employee” as contemplated by § 2679. Therefore, the Court grants the United States’
Motion to Substitute.
III. DEFAULT
The United States requests to set aside the default entered against the Board because
the Board “enjoys the same default exemptions of the United States” after successful
substitution. (Doc. 26 at 3.) For Plaintiff’s part, she argues only that the default should
stand because substitution of the United States for the Board is improper under § 2679.
Plaintiff failed to persuade the Court that the certification requirement of § 2679 precludes
substitution in this matter, so her only argument against setting aside the Board’s default is
rendered futile. Accordingly, the Court will direct the Clerk of Court to set aside default as
to the Board.
IV. AMENDMENT TO MOTION TO DISMISS
The United States requests to amend its pending Motion to Dismiss to include the
Board as a movant because all arguments raised therein apply to the Board. (Doc. 26 at 3–
4). The United States also asserts, and Plaintiff does not contest, that Plaintiff will suffer
no prejudice from such an amendment. (Id.) Because the requested amendment changes no
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substance of the Motion to Dismiss and related briefing, the Court will simply treat the
Motion to Dismiss as a motion brought by both the United States and the Board for whom
the United States has substituted as a party. Accordingly, the Court will deny the United
States’ request to amend the Motion to Dismiss to add the Board as a movant. No party
may amend any part of their respective briefing regarding the Motion to Dismiss (Docs.
18, 20, 21) now pending before the Court.
V. ADDITIONAL BRIEFING ON MOTION TO DISMISS
Defendants United States and the Board have moved to dismiss Plaintiff’s FTCA
claims for lack of subject matter jurisdiction under a theory of sovereign immunity.
(Doc. 18). In response, Plaintiff argues that her FTCA claim falls within the narrow
exception of 25 U.S.C. § 1680c(e)(1) and survives sovereign immunity. (Doc. 20 at 3–6.)
Plaintiff states that the Defendants failed “to provide (1) a PWS or physician-specific
contract; (2) any credentialing or privileging documentation; (3) any IHS or hospital
records addressing FTCA coverage designations,” and the omission is fatal to their
sovereign immunity defense. (Id. at 6.) In reply, the Defendants provide the documents
referenced by Plaintiff and argue that those documents demonstrate that 25 U.S.C. §
1680c(e)(1) does not apply. (Doc. 21.)
No later than seven days from the date of this Order, Plaintiff shall file a sur-reply—
no greater than seven pages—addressing the documents provided in Defendant United
States’ reply memorandum (Doc. 21), whether 25 U.S.C. § 1680c(e)(1) still applies, and
whether and to what extent jurisdictional discovery is still warranted. Defendants may file
a sur-reply—no greater than seven pages—addressing the arguments raised by Plaintiff in
her sur-reply no later than seven days after Plaintiff files it.
IT IS HEREBY ORDERED granting Defendant United States’ Motion to
Substitute Party and Response to Application of Default (Doc. 24).
IT IS FURTHER ORDERED substituting the United States for the Fort Defiance
Indian Hospital Board, Inc.
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IT IS FURTHER ORDERED granting in part and denying in part Defendant
United States’ Motion to Set Aside Entry of Default and Motion to Amend United States’
Motion to Dismiss to Include FDIHB as a Movant (Doc. 26). The Clerk of Court is directed
to vacate the Clerk’s Entry of Default (Doc. 25). No party may amend any part of their
respective briefing regarding the Motion to Dismiss (Docs. 18, 20, 21) now pending before
the Court. The Court will treat the Motion to Dismiss as a motion jointly brought by the
United States and the Fort Defiance Indian Hospital Board, Inc.
IT IS FURTHER ORDERED that Plaintiff shall file a sur-reply—no greater than
seven pages—addressing the documents provided in Defendant United States’ reply
memorandum (Doc. 21), whether 25 U.S.C. § 1680c(e)(1) still applies, and whether and to
what extent jurisdictional discovery is still warranted. Defendants United States of America
and the Fort Defiance Indian Hospital Board, Inc. may file a sur-reply—no greater than
seven pages—addressing the arguments raised by Plaintiff in her sur-reply no later than
seven days after Plaintiff files it.
Dated this 26th day of November, 2025.
Honorable John J. Tuchi
United States District Judge
Case 3:25-cv-08065-JJT Document 31 Filed 11/26/25 Page 6 of 6