City of El Centro v. The United States
37 Cont. Cas. Fed. 76,044, 922 F.2d 816, 1990 U.S. App. LEXIS 22285 (1990)
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Rule of Law:
An implied-in-fact contract with the U.S. Government is not formed unless the government agent making the promise has actual authority to bind the government in contract. Furthermore, for the government to receive consideration for medical services provided to a third party, it must have a pre-existing legal duty to provide that care, which requires that the person be formally detained.
Facts:
- On January 23, 1985, U.S. Border Patrol agents engaged in a high-speed pursuit of a van suspected of smuggling illegal aliens near El Centro, California.
- While attempting to evade the agents, the van crashed, exploded, and burned.
- Fourteen injured aliens from the van were transported to El Centro Community Hospital (ECCH) for emergency medical treatment.
- Prior to their arrival, Border Patrol Agent Mario Hernandez was present at ECCH.
- ECCH's Assistant Director of Finance, Kaye Fox, asked Agent Hernandez who would pay for the treatment, to which he responded, 'me and you.'
- Agent Hernandez instructed the hospital to notify the Border Patrol before releasing any of the aliens so they could be taken directly into custody.
- While at the hospital, Immigration and Naturalization Service (INS) personnel photographed the aliens, an INS doctor reviewed their medical records, and an investigator signed consent forms for those unable to do so.
- ECCH provided medical services that cost $183,263.64.
Procedural Posture:
- City of El Centro requested payment of $183,263.64 from the U.S. Government for medical services rendered.
- The U.S. Government refused to pay the claim.
- The City of El Centro sued the United States in the U.S. Claims Court, which is the court of first instance for this type of claim.
- The Claims Court found for the City of El Centro, holding that an implied-in-fact contract existed.
- The United States (appellant) appealed the judgment to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does an implied-in-fact contract exist obligating the U.S. Government to pay for emergency medical services provided to injured illegal aliens when the aliens crashed their vehicle during a high-speed pursuit by the Border Patrol and were monitored by government agents while hospitalized?
Opinions:
Majority - Plager, Circuit Judge.
No. An implied-in-fact contract does not exist because the essential elements of authority and consideration are missing. For a binding implied-in-fact contract with the United States, the plaintiff must demonstrate that the government agent had actual authority to form the contract. ECCH failed to prove that Agent Hernandez, a Border Patrol agent, possessed the authority to obligate federal funds for medical care. The court rejected the argument of 'institutional ratification' because no official with contracting authority ever approved the expenditure. Furthermore, there was no consideration for the alleged contract because the medical care provided by ECCH did not confer a benefit upon the government. A benefit would only exist if the government had a legal duty to provide care, which arises only when individuals are 'detained.' Citing Fourth Amendment seizure jurisprudence from Brower v. County of Inyo, the court held that a high-speed pursuit ending in an accidental crash does not constitute a seizure or detention. The subsequent monitoring by INS at the hospital was also insufficient to establish detention. Since the aliens were not detained, the government had no duty to care for them, and thus received no benefit from ECCH's services.
Dissenting - Rich, Circuit Judge,
Yes. An implied-in-fact contract was formed based on the totality of the circumstances. The majority's reliance on Brower v. County of Inyo is misplaced, as that case concerned a Fourth Amendment seizure, not the question of custody for purposes of government responsibility. The government's extensive involvement after the crash—sending an agent to the hospital, photographing aliens, having an INS doctor check on them, and arranging for custody upon release—established a 'de facto detention.' This de facto detention created a government responsibility for the aliens' care, meaning ECCH's services did confer a benefit upon the government. The government's actions amounted to an 'institutional ratification' of an agreement to pay for the necessary medical care that resulted directly from the lawful actions of its agents. It is unjust to force a local hospital to bear the financial consequences of federal immigration enforcement.
Analysis:
This case reinforces the strict doctrine of sovereign immunity and the high bar for establishing a contract with the federal government. It underscores the critical requirement that a government agent must have actual, not merely apparent, authority to bind the United States. The decision's importation of Fourth Amendment 'seizure' standards to define 'detention' for purposes of government liability creates a narrow definition of custody. This precedent makes it significantly more difficult for third-party service providers to recover costs incurred as a foreseeable consequence of federal law enforcement activities, placing the financial risk squarely on those providers unless a formal detention has occurred and proper authorization for payment is secured.
