IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII ANNA LOBISCH, Individually, and) CIV. NO. 20-00370 HG-KJM as Personal Representative for ) the Estate of Abigail Lobisch, ) a Minor, Deceased, and as Next ) Friend of Zachariah Lobisch, a ) Minor; and JAMES LOBISCH, ) Individually, ) ) Plaintiffs, ) ) vs. ) ) UNITED STATES OF AMERICA; ) ISLAND PALM COMMUNITIES, LLC; ) DOE DEFENDANTS 1-10, ) ) Defendants. ) ) ) ORDER DENYING DEFENDANT UNITED STATES’ MOTION TO DISMISS (ECF No. 36) Plaintiffs James Lobisch and Anna Lobisch, Individually, and as Personal Representative for the Estate of her deceased daughter, Abigail Lobisch, and as Next Friend of her son, Zachariah Lobisch, filed suit against the Defendants the United States of America and Island Palm Communities, LLC. Plaintiffs claim that their 7-month old child, Abigail, died while she was in the care of Denise “Dixie” Villa (“Villa”), who was allegedly operating an unauthorized child care business in on-base military housing. Plaintiffs assert that Villa gave their daughter a lethal dose of Benadryl while she stayed in Villa’s child care overnight in February 2019. Plaintiffs claim that Villa operated the unauthorized childcare business out of military housing located on the Aliamanu Military Reservation in Honolulu, Hawaii. The First Amended Complaint alleges that the Defendant United States’ employees and military personnel, acting within the course and scope of their employment, were aware of the unauthorized childcare business operated by Villa. Plaintiffs claim the Defendant United States had notice that the childcare facility had exposed numerous children to dangerous conditions and neglect. Plaintiffs claim that Defendant Island Palm Communities, LLC was the property manager responsible for the use and maintenance of the homes located on the military base where Villa operated her child care. Plaintiffs assert that despite Defendants’ knowledge of the dangerous conditions and unauthorized activities by Villa, Defendants and their employees failed to shut down Villa’s childcare business. In addition, Plaintiffs claim Defendants failed to warn parents of child endangerment and neglect at

Villa’s business and failed to contact Child Protective Services of the State of Hawaii. Plaintiffs’ First Amended Complaint asserts claims against the Defendants United States and Island Palm Communities, LLC for negligence, wrongful death, negligence per se, negligent infliction of emotional distress, and loss of consortium. Defendant United States moves to Dismiss on two separate bases. First, the United States asserts that Plaintiffs’ tort claims are barred by sovereign immunity pursuant to Fed. R. Civ. P. 12(b)(1). The United States asserts that the Federal Tort Claims Act waives sovereign immunity for certain tort claims against the United States and its employees, but it argues there is an exception in this case. The United States argues that the Discretionary Function Exception to the Federal Tort Claims Act’s waiver of sovereign immunity bars Plaintiffs from bringing their claims here. Specifically, the United States argues that Plaintiffs’ claims involve discretionary decisions by the United States and its employees that may not be challenged in court. Second, the United States argues that Plaintiffs have alleged insufficient facts to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). The United States asserts that it had no duty to protect the Plaintiffs’ child. Further, the United States argues that the child’s death at an unlicensed child care on the military base was not foreseeable or preventable.

The Defendant United States’ Motion to Dismiss (ECF No. 36) is DENIED. PROCEDURAL HISTORY On August 26, 2020, Plaintiffs filed their Complaint. (ECF No. 1). On the same date, Plaintiffs filed an Ex Parte Motion for Leave to Proceed Under Pseudonyms. (ECF No. 4). On August 31, 2020, the Magistrate Judge issued an ORDER DENYING PLAINTIFFS’ EX PARTE MOTION FOR LEAVE TO PROCEED UNDER PSEUDONYMS. (ECF No. 9). On September 1, 2020, Plaintiffs filed the FIRST AMENDED COMPLAINT. (ECF No. 10). On January 6, 2021, Defendant United States filed its Motion to Dismiss. (ECF No. 36). On January 8, 2021, the Court issued a briefing schedule. (ECF No. 37). On January 28, 2021, Plaintiffs filed their Opposition. (ECF No. 41). On February 2, 2021, Defendant Island Palm Communities, LLC filed its Statement of No Opposition. (ECF No. 44). On February 16, 2021, Defendant United States filed its Reply. (ECF No. 46). On February 24, 2021, the Court held a hearing on Defendant’s Motion to Dismiss. (ECF No. 49).

BACKGROUND UNITED STATES ARMY REGULATION 608-10 GOVERNS THE OPERATION OF CHILDCARE FACILITIES ON MILITARY BASES The United States Army has enacted various regulations governing conduct on its military bases. One such Regulation, Army Regulation 608-10, governs the policies and procedures for providing childcare services on military bases. (United States Army Regulation ("AR") 608-10 § 6-1, available at https:// armypubs.army.mil/epubs/DR pubs/DR a/pdf/web/ARN3218 AR608- 10 Web FINAL.pdf). Pursuant to Chapter 6 of Army Regulation 608-10, a Family Child Care Office must be established on military bases to oversee certification of childcare businesses on its premises. The Family Child Care Office is required to investigate and close unauthorized childcare operations. Id. at § 6-38(a), (b), (e), (f)(3). Army Regulation 608-10 requires that childcare businesses operating out of owned or leased quarters or privately owned housing located on military bases must be certified by the Family Child Care Office. Id. at § 1-8(e).

UNITED STATES ARMY REGULATION 420-1 GOVERNING ARMY FACILITIES MANAGEMENT United States Army Regulation 420-1 governs the policies and procedures for the operation of U.S. Army housing. AR 420-1 § 1- 1. Section 3-18 addresses termination of family housing, and provides that Government housing may be terminated at the discretion of the garrison commander for violation of the housing rules. Id. at § 3-18(a)(2).

FACTS ALLEGED IN PLAINTIFFS’ FIRST AMENDED COMPLAINT The following facts are alleged in the First Amended Complaint and are treated as true for purposes of the Defendant United States’ Motion to Dismiss:

Villa Operated an Unlicensed Child Care Business on a Military Base in Washington State in 2015 According to the First Amended Complaint, in 2015, Denise “Dixie” Villa (“Villa”) and her husband Chief Petty Officer Aaron Villa and their children resided in housing provided by the Defendant United States within Naval Air Station Whidbey Island in Washington State. (First Amended Complaint (“FAC”) at ¶ 21, ECF No. 10). Plaintiffs allege that Villa operated an unauthorized childcare center from her residence on the military base in Washington State in violation of Department of Defense regulations. (Id. at ¶ 22). Plaintiffs claim that Villa’s unauthorized business was reported both to the Family Child Care Office at the military base and to her husband’s chain of command. (Id. at ¶¶ 22-24). The First Amended Complaint asserts that Chief Petty Officer Villa was instructed by his superior to “shut it down.” (Id. at ¶ 25).

Villa Family Relocated To Hawaii In 2017 In 2017 Chief Petty Officer Villa was stationed at Joint Base Pearl Harbor Hickam and his family relocated to Honolulu. (Id. at ¶ 26). The First Amended Complaint alleges that despite the Army’s prior knowledge that Denise Villa had previously operated an unauthorized childcare center in on-base military housing, the United States provided Chief Petty Officer Villa and his family with on-base military housing in Hawaii on the Aliamanu Military Reservation located at 4675 Ke Street, Honolulu, Hawaii. (Id. at ¶ 27). Plaintiffs claim that Chief Petty Officer Villa and/or Denise Villa signed a lease with Defendant Island Palm Communities, LLC, which was the entity responsible for managing the property. (Id. at ¶ 28). According to the First Amended Complaint, the lease instructed the residents who wished to provide childcare services in their homes to comply with United States Army Regulation 608-10 and to do so under the direction of the Family Child Care Office of the Aliamanu Military Reservation. (Id. at ¶ 29).

A Neighbor Of Villa Repeatedly Reported The Operation Of Villa’s Unauthorized Child Care Business To U.S. Army Officials Between December 2017 And April 2018 The First Amended Complaint alleges that in early December 2017, a neighbor of Denise Villa notified Defendant Island Palm Communities, LLC that Villa was operating an illegal childcare facility from her home on the military base without authorization and in violation of United States Army regulations. (Id. at ¶ 31). Plaintiffs claim that a representative from Defendant Island Palm Communities, LLC informed the neighbor that she needed to report the issue to the Family Child Care Office for the military base. (Id.) The First Amended Complaint alleges that on December 18, 2017, Villa’s neighbor, identified as “K.C.,” called the Family Child Care Office at the Aliamanu Military Reservation and spoke with Marjorie Williams, an employee in the Office. (Id. at ¶ 32). Plaintiffs assert that Ms. Williams confirmed that Villa was not registered or approved to operate a childcare facility at her residence on base. (Id.) Plaintiffs claim that the neighbor reported to Ms. Williams that she had seen multiple instances of child neglect. (Id. at ¶ 33). Plaintiffs allege that Ms. Williams stated that she would inform her supervisor and that her office would investigate Villa. (Id.) Plaintiffs allege that K.C. called Ms. Williams at the Family Child Care Office again on January 3, 5, 8, and 11, 2018, to report Villa’s unauthorized childcare activities. (Id. at ¶¶ 34-44). K.C. reported numerous incidents, including seeing a young boy at Villa’s home holding a lighter and attempting to light a trampoline on fire, prompting Military Police to go to Villa’s residence. (Id. at ¶ 38-42). K.C. also reported that

Villa had posted a Facebook advertisement for her unauthorized childcare services she provided on the military base. (Id. at ¶ 44). The First Amended Complaint asserts that the neighbor called the Family Child Care Office more than ten times in January and February 2018 to report continued unauthorized childcare activities at Villa’s residence. (Id. at ¶¶ 46-47, 49-53). Plaintiffs allege that K.C. continued to report unauthorized childcare activity by Villa in March 2018, including allegations that Villa had left the children alone at the home with a teenage foreign exchange student and that four children were left alone unsupervised in Villa’s backyard. (Id. at ¶¶ 56-58). According to the First Amended Complaint, on March 27, 2018, K.C. gave a sworn statement to the Military Police investigators and provided videos and photos documenting her claims of the unauthorized childcare business being conducted at Villa’s on- base residence. (Id. at ¶ 60). Plaintiffs allege that a few weeks later, on April 13, 2018, the neighbor again called the Family Child Care Office to report that she was still seeing pick-ups and drop offs at Villa’s residence and that Villa was still advertising her services on Facebook. (Id. at ¶ 62).

Villa’s Neighbor Provided Written Notice To The U.S. Army Garrison-Hawaii On February 20, 2019 Complaining Of Villa’s Unauthorized Childcare Business The First Amended Complaint alleges that nearly a year after sending her last e-mail to the Family Child Care Office, in February 2019, Villa’s neighbor, K.C., noticed further unauthorized childcare activity at Villa’s residence, including children being left alone and unsupervised in Villa’s backyard. (Id. at ¶ 64). On February 20, 2019, the neighbor submitted a written complaint to the U.S. Army Garrison-Hawaii. (Id. at ¶ 65). Plaintiffs claim that on February 21, 2019, Military Police again went to Villa’s residence and did not remove any children or preclude Villa from operating her childcare business. (Id. at ¶ 66).

7-Month Old Abigail Lobisch Died In Villa’s Child Care During An Overnight Visit Between February 23 and 24, 2019 According to the First Amended Complaint, on February 23, 2019, Villa took custody of Abigail and Zachariah Lobisch for overnight child care at her on-base military housing. (Id. at ¶ 67). Plaintiffs allege that Villa administered a lethal dose of diphenhydramine, commonly known as Benadryl, to 7-month old Abigail Lobisch in order to make the baby lose consciousness. (Id. at ¶ 69). On February 24, 2019, Abigal Lobisch was pronounced dead due to poisoning with lethal levels of diphenhydramine. (Id. at ¶ 70). The First Amended Complaint asserts that following the baby’s death on February 24, 2019, the United States closed Villa’s childcare facility on the same day. (Id. at ¶ 71). According to the First Amended Complaint, on July 20, 2019, the City and County of Honolulu charged Villa with Manslaughter in violation of Hawaii Revised Statutes § 707-702(1)(a) for the death of Abigail. (Id. at ¶ 72).

STANDARD OF REVIEW FED. R. CIV. P. 12(b)(1)

A plaintiff has the burden of proving that subject-matter jurisdiction does in fact exist. Thornhill Publ’g Co., Inc. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). Federal Rule of Civil Procedure 12(b)(1) requires that a case must be dismissed for lack of subject-matter jurisdiction when the Court lacks a constitutional or statutory basis to adjudicate the controversy. Fed. R. Civ. P. 12(b)(1); Leeson v. Transamerica Disability Income Plan, 671 F.3d 969, 975 (9th Cir. 2012). A challenge to the Court’s subject-matter jurisdiction may be “facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack, the party challenging jurisdiction argues that the allegations contained in a complaint are insufficient “on their face” to invoke federal jurisdiction. Id. A facial challenge, therefore, mirrors a traditional motion to dismiss analysis. The Court must take all allegations contained in the pleading “to be true and draw all reasonable inferences in [its] favor.” Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). In a factual attack, the party challenging jurisdiction argues that the facts in the case, notwithstanding the allegations in the Complaint, divest the Court of subject-matter jurisdiction. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). No presumptive truthfulness attaches to the Complaint’s allegations. Id. The party challenging jurisdiction presents “affidavits or other evidence properly brought before the court” indicating that subject matter jurisdiction is lacking. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). The burden then shifts to “the party opposing the motion [to] furnish affidavits or other evidence to satisfy its burden of establishing subject matter jurisdiction.” Id.; Colwell v. Dep’t of Health and Human Serv., 558 F.3d 1112, 1121 (9th Cir. 2009). Failure to present suitable evidence establishing subject-matter jurisdiction necessitates dismissal. Moore v. Maricopa Cnty. Sheriff’s Office, 657 F.3d 890, 895 (9th Cir. 2011).

FED. R. CIV. P. 12(b)(6)

The Court must dismiss a complaint as a matter of law pursuant to Federal Rule of Civil Procedure 12(b)(6) where it fails “to state a claim upon which relief can be granted.” Rule (8)(a)(2) of the Federal Rules of Civil Procedure requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” When considering a Rule 12(b)(6) motion to dismiss, the Court must presume all allegations of material fact to be true and draw all reasonable inferences in favor of the non-moving party. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). Conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss. Id. at 699. The Court need not accept as true allegations that contradict matters properly subject to judicial notice or allegations contradicting the exhibits attached to the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). In Bell Atl. Corp. v. Twombly, the United States Supreme Court addressed the pleading standards under the Federal Rules of Civil Procedure in the anti-trust context. 550 U.S. 544 (2007). The Supreme Court stated that Rule 8 of the Federal Rules of Civil Procedure “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action,” and that “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555. Most recently, in Ashcroft v. Iqbal, the Supreme Court

clarified that the principles announced in Twombly are applicable in all civil cases. 129 S.Ct. 1937 (2009). The Court stated that “the pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me-accusation.” Id. at 1949 (citing Twombly, 550 U.S. at 555). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. (citing Twombly, 550 U.S. at 556). The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id. (quoting Twombly, 550 U.S. at 556). Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557). The complaint “must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively” and “must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” AE ex rel. Hernandez v. Cnty of Tulare, 666 F.3d 631, 637 (9th Cir. 2012) (internal quotations omitted).

ANALYSIS I. THE FEDERAL TORT CLAIMS ACT AND THE DISCRETIONARY FUNCTION EXCEPTION

The United States has sovereign immunity and cannot be sued without its consent. Lam v. United States, 979 F.3d 665, 671 (9th Cir. 2020). The Federal Tort Claims Act allows private suits against the United States for damages for loss of property, injury, or death caused by a government employee’s negligence. Myers v. United States, 652 F.3d 1021, 1028 (9th Cir. 2011). Liability arises for the U.S. government employee’s acts if a private person would be liable to the claimant under the law of the place where the act occurred. 28 U.S.C. § 1346(b)(1). Such acts are typically common law torts. Lam, 979 F.3d at 672 (citing Dalehite v. United States, 346 U.S. 15, 28 (1953)). There are exceptions to Federal Tort Claims Act liability. One such exception is known as the “Discretionary Function Exception.” Nanouk v. United States, 974 F.3d 941, 944 (9th Cir. 2020). The Government does not waive immunity for tort claims if the alleged tortfeasor was performing a discretionary function or duty when he or she caused the aggrieved injury. 28 U.S.C. § 2680(a). The Discretionary Function Exception insulates certain governmental decision-making from “judicial second guessing” of legislative and administrative decisions grounded in policy. Terbush v. United States, 516 F.3d 1125, 1129 (9th Cir. 2008)

(internal quotation marks and citations omitted). The Government bears the burden of establishing that the exception applies. Chadd, 794 F.3d at 1108. Courts follow a two-step test to determine whether the Discretionary Function Exception applies. Miller v. United States, F.3d , 2021 WL 1152310, *5 (9th Cir. Mar. 26, 2021). First, courts ask whether the challenged act or omission was a discretionary one. That is, whether it “involves an element of judgment or choice.” Berkovitz v. United States, 486 U.S. 521, 536 (1988). The Court looks to the applicable statutes, regulations, and policies to decide whether the United States retained discretion to act. Ruffino v. United States, 374 F.Supp.3d 961, 968 (E.D. Cal. 2019); Bishop v. United States, Civ. No. 16-00248 JMS-KSC, 2017 WL 1381653, *8 (D. Haw. Apr. 13, 2017). If the applicable statute, regulation, or policy does not involve an element of judgment or choice, the analysis ends there. The Court has subject-matter jurisdiction, and the plaintiff’s claim may proceed. Nanouk, 974 F.3d at 945. Second, if the Government’s conduct involved an element of judgment or choice, the Court must then ask whether the discretionary decision challenged by the plaintiff “is of the kind that the discretionary function exception was designed to shield.” Berkovitz, 486 U.S. at 536; see United States v. Gaubert, 499 U.S. 315, 322 (1991). The decision must be one that is grounded in social, economic, and political policy in order to be shielded by the exception. Young v. United States, 769 F.3d 1047, 1053 (9th Cir. 2014) (citing Berkovitz, 486 U.S. at 536- 37).

A. Evidence Presented By The Government

As a preliminary matter, Plaintiffs object to Exhibits 1-7 attached to the Government’s Motion. First, the Government attempts to bring a substantive defense based on documentary evidence that is not appropriate in a 12(b)(6) Motion to Dismiss. Exhibits 1-7 are not incorporated by reference in the First Amended Complaint and do not form the basis of the Plaintiffs’ tort claims. Second, the Court need only consider the evidence that is material to the jurisdictional issue for purposes of a 12(b)(1) motion to dismiss. A 12(b)(1) Motion is not a vehicle to allow a party to submit factual evidence unrelated to the subject-matter jurisdiction analysis. Safe Air Everyone v. Meyer, 373 F.3d 1035, 1039-40 (9th Cir. 2004). Third, Plaintiffs also object to Exhibits 1-7 as not properly authenticated. The Court agrees that Plaintiffs have raised some valid objections to Defendant’s Exhibits 1-7 and some of the evidence is not properly authenticated. The Court, however, declines to strike Exhibits 1-7. The Court reviewed the Exhibits for purposes of the hearing and finds no prejudice to Plaintiffs in its considering the Exhibits. Finally, the Army Regulations attached to the Government’s Motion as Exhibits 8 and 9 are relevant to the Court’s analysis. The Court considers statutes, cases, and regulations in determining the relevant law. See Lemieux v. Cwalt, Inc., 2017 WL 365481, *1 (D. Mont. Jan. 25, 2017).

B. Plaintiffs Have Alleged That The Government Failed To Comply With Mandatory And Specific Military Regulations

The First Amended Complaint asserts that the Government had knowledge of the operation of Villa’s unauthorized childcare business in her leased residence on military housing. Plaintiffs claims that despite this knowledge, the Government and its employees failed to prevent Villa from operating her uncertified childcare business. (First Amended Complaint at ¶ 4, ECF No. 10). The Government argues in its Motion to Dismiss that the alleged acts and omissions of its employees involved discretionary decisions that are not subject to judicial review.