The opinion of the court was delivered by: Kay, United States Magistrate Judge.
At the close of Plaintiffs case during the trial of this
matter, Defendant United States of America ("Defendant" or the
"Government") orally moved for a directed verdict and renewed
its motion to dismiss Count II of the Complaint.*fn1
Plaintiff John Appleton ("Plaintiff" or "Appleton") orally
opposed the Motion for Judgment, and Defendant's Renewed Motion
to Dismiss. The Court took the Motion for Judgment ("Motion")
and the Renewed Motion to Dismiss ("Renewed Motion") under
advisement and the Government presented its case. Upon
consideration of Defendant's Motion and Renewed Motion, and the
opposition thereto, and a bench trial having been held on
January 4 and 5, 2001, for the reasons set forth below,
Defendant's Motion is granted and the Renewed Motion is denied
Section 38 of the Arms Export Control Act ("AECA") authorizes
the President of the United States to control the importation of
defense articles and defense services in furtherance of world
peace and the security and foreign policy of the United States.
22 U.S.C. § 2778(a)(1). The statute also provides that no
designated defense articles may be imported without a license in
accordance with AECA and regulations issued thereunder.
22 U.S.C. § 2778(b)(2); see B-West Imports, Inc. v. United
States, 75 F.3d 633 (Fed.Cir. 1996). Authority under Section 38
has, in turn, been delegated to the Secretaries of State,
Treasury, and Defense. Exec. Order No. 11958, 3 C.F.R. § 79
(1977), reprinted in 22 U.S.C. § 2751. The delegation grants
the Secretary of the Treasury primary responsibility for issuing
and administering permanent import controls of defense articles
and services and further, the Secretary of Treasury has
delegated implementation authority to the Bureau of Alcohol,
Tobacco, and Firearms ("BATF"). Executive Order No. 11432
(October 22, 1968); 1968-2 C.B. 906; Treasury Department Order
No. 120-01 (formerly No. 221), 37 Fed. Reg. 11696 (1972).
By mid-1994, imports from South Africa had become generally
permissible, yet, the products of certain companies remained
banned. On June 30, 1994, and extending through the time when
Plaintiff applied for ammunition import permits, the United
States Government imposed a specific ban on all export licenses
for products to and imports from Armscor (an arms manufacturing
company) and its associated entities because of a 1991
indictment of Armscor. See 59 Fed. Reg. 33811 (June 30, 1994).
Under BATF regulations, persons seeking to import defense
articles, including ammunition, into the United States must
obtain a permit from the agency. See 27 C.F.R. § 47.41(a).
BATF requires prospective importers of ammunition to apply for a
permit by completing and filing an ATF Form 6, Part I.
27 C.F.R. § 47.42(a). Item 8(a) on the Form 6 requires applicants to
provide the name and address of the manufacturer of the
ammunition they wish to import.
Plaintiff Appleton was a licensed arms dealer under the AECA.
In the fall of 1994, he submitted five applications for import
permits expressly designating "State Arsenal Republic of South
Africa" as the manufacturer of the ammunition he sought to
import. Between October 1994 and January 1995, BATF approved all
five permits. Following approval of the first permit, Plaintiff
contracted to purchase a quantity of ammunition from an arms
dealer in Great Britain and to re-sell the ammunition to a buyer
in the United States. After some of the ammunition arrived in
the United States in February 1995, BATF learned that it had
been manufactured by Pretoria Metal Pressings Ltd. ("PMP"), a
company affiliated with Armscor and on a list of proscribed
companies whose products were barred from importation into the
United States. BATF thereupon revoked all five of Plaintiffs
permits because the importation of goods made by PMP violated
United States policy.*fn2 Plaintiff was thus unable to
complete his proposed business transactions. He subsequently
brought this claim under the Federal Tort Claims Act,
28 U.S.C. § 1346(b)(1) and 2671-2680 ("FTCA").
II. Procedural Background
In early 2000, Defendant again argued that Plaintiffs
remaining claim was barred by the discretionary function
exception, but also added a defense based on Plaintiffs
contributory negligence and his inability to prove the elements
of negligence. On May 18, 2000, the Court, in denying
cross-motions for summary judgment, found that genuine issues
remain as to whether the BATF examiner made a policy-based
discretionary decision not to investigate Plaintiffs designation
of an ammunition manufacturer [on the BATF import permit
applications] and "whether [B]ATF and/or Mr. Appleton acted
negligently in the approval of his applications." Appleton v.
United States, 98 F. Supp.2d 30, 42-43 (D.C. 2000).
In November, 2000, Defendant filed a Renewed Motion to Dismiss
Count II, asserting that this Court has no jurisdiction pursuant
to a misrepresentation exception to the Government's waiver of
sovereign immunity, 28 U.S.C. § 2680(h). This Court denied
Defendant's Renewed Motion to Dismiss Count II in a Memorandum
Opinion and Order dated January 3, 2001, and the case proceeded
to trial, by consent, before the undersigned on January 4 and 5,
2001. Plaintiffs sole remaining cause of action at trial was
based upon the Government's purported negligent approval of Mr.
Appleton's permit applications and its failure to request that
Plaintiff provide additional information regarding the
manufacturer of the ammunition.
At the trial held on January 4 and 5, 2001, counsel for both
parties agreed to the following stipulations: 1) Plaintiff was a
licensed arms dealer; 2) the term "State Arsenal, Republic of
South Africa" does not appear on any BATF list of proscribed
entities; 3) the name PMP does appear on the list of prohibited
companies; and 4) the ammunition, which is the subject of this
lawsuit, was manufactured in South Africa by PMP.
Fed.R.Civ.P. 50(a) provides in ...