Unpublished Disposition, 848 F.2d 198 (9th Cir. 1983)

MEMORANDUM^** 

OVERVIEW

Clinton and Rose Mary Love appeal from the district court's order dismissing their complaint against the United States¹  for failure to state a claim. The Loves contend that their complaint states a claim under the Federal Tort Claims Act (FTCA) for an alleged violation of a federal regulation requiring the Farmers Home Administration (FHA) to pay the Loves' delinquent water assessments. The district court's order is affirmed.

FACTS

At the times pertinent to this action, the Loves operated a farm in Montana and obtained water from the Harlem Irrigation District. On May 25, 1983, the Harlem Irrigation District terminated delivery of water to the Loves' property because the Loves were two years delinquent in the payment of their annual water assessments. The Loves were therefore without water throughout the 1983 growing season. Their complaint alleged that the FHA had an obligation, imposed by federal administrative regulations (7 C.F.R. Sec. 1863.4(a)), to pay the Loves' delinquent water assessments.

ANALYSIS

This court reviews de novo the district court's dismissal of a complaint for failure to state a claim upon which relief can be granted. Western Reserve Oil & Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir. 1985), cert. denied, 474 U.S. 1056 (1986). The FTCA waives, with certain exceptions, the government's traditional sovereign immunity from tort claims. 28 U.S.C. § 2674. A finding of liability under the FTCA must be based upon state law. 28 U.S.C. § 1346(b); Carlson v. Green, 446 U.S. 14, 23 (1980). Thus, the violation of a federal statute or administrative regulation by a United States agency does not, standing alone, create a cause of action under the FTCA. A federal statute or regulation only becomes relevant when a state law duty is found to exist; the federal statute or regulation may then provide the standard for reasonable care in exercising the state law duty. Lutz v. United States, 685 F.2d 1178, 1184 (9th Cir. 1982).

Here, the Loves base their claim upon a federal regulation that allegedly requires the FHA to pay the Loves' delinquent water assessments. See 7 C.F.R. Sec. 1863.4(a).²  They contend that because Montana law recognizes a general duty of good faith and fair dealing, this regulation should, under the reasoning of Lutz, be relied upon to provide the standard for reasonable care in exercising that duty. See First National Bank v. Twombly, --- Mont. ----, 689 P.2d 1226, 1230 (1984) (recognizing bank's duty to act in good faith towards borrowers); First Security Bank v. Goddard, 181 Mont. 407, 593 P.2d 1040, 1047 (1979) (insurer's duty of good faith and fair dealing); Thompson v. State Farm Mut. Auto. Ins. Co., 161 Mont. 207, 505 P.2d 423, 429-30 (1973) (same); see also Mont.Code Ann. Sec. 28-1-201 (general duty not to injure or infringe rights of another). No Montana authority, however, indicates that the duty to act in good faith imposes an obligation upon private defendants analogous to the obligation imposed upon the FHA by the administrative regulation to pay certain delinquent water assessments of borrowers. See United Scottish Ins. Co. v. United States, 614 F.2d 188, 197 n. 9 (9th Cir. 1979) (no government liability where "a private person could not be held liable under similar circumstances"); cf. Lutz, 685 F.2d at 1184 (liability found where private citizen comparably situated would also be subject to duty). Because Montana law imposes no analogous liability upon private defendants for failure to pay a borrower's delinquent taxes, the district court did not err in finding that the federal regulation did not impose upon the FHA a duty to the Loves to pay the water assessments.³ 

The district court's order is affirmed.