Legal Files previously reported about an incident where FBI agents crashed a Ferrari F50 that they had seized (SCM February 2010, p. 26). As amazing as that scene was, the same F50 has been in the news again, and now we know the rest of story.
The F50 was introduced in 1995. At 513 horsepower and 2,976 pounds, it represented the latest and greatest of the Ferrari supercars. Priced at around $500,000, Ferrari manufactured only 349 cars—one fewer than Ferrari believed it could sell, which assured exclusivity.
Gone in 60 seconds
In 2003, Algar Ferrari in Rosemount, PA, was happy to have an F50 on its sales floor. Tom Baker, a cool-as-a-cucumber airline pilot, walked in and inquired about the car. Baker claimed to be a tech company CEO from California who had flown in from Atlanta.
Baker said he had a limo waiting for him outside, that he wanted to buy the F50 if he was satisfied with a test drive—and he would wire the funds the next day. However, he had left his wallet behind with his secretary and didn’t have his driver’s license with him. He must have been a convincing actor, as the salesman (who doesn’t work there now) gladly took him for a test drive. The salesman drove first, then they traded places. After a while, Baker pulled over and asked the salesman to drive the car back to the dealership. When the salesman got out of the car, Baked asked for one more chance to sit behind the wheel. We assume the salesman was surprised when Baker sped off, never to be seen again.
The authorities reasoned that the car would be quickly exported and watched all ports of embarkation. It never turned up because Baker put it in a transporter, trucked it home to his garage in Kentucky, found a way to get it titled in Kentucky, and drove it like he owned it every now and then.
An innocent purchaser
Later in 2003, Baker drove the F50 to a party where he met a doctor who was also a car enthusiast. After a few minutes, they went out for a ride in the F50. The doctor loved it, and insisted that Baker let him know if he ever decided to sell it. They saw each other numerous times over several years, and the doctor always talked about buying the car. The talk came to fruition in 2008. Baker was in the middle of a divorce, and he sold the F50 to the doctor for $575,000 cash.
The doctor grew concerned when he contacted Ferrari to register himself as the new owner and they asked him to fax a copy of the title to them. He also sent in the engine number, which Ferrari confirmed as the engine number from the car stolen from Algar Ferrari. The doctor contacted Baker and informed him about an “irregularity with the VIN and engine number.” Baker’s first words were, “Do the police know?” They didn’t—yet—and Baker wired 80% of the purchase price into the doctor’s bank account the next day, promising the rest right away to unwind the transaction.
During the next two weeks, the police investigated and determined that not only the F50—but also the Testarossa and 328 GTS in Baker’s garage—were stolen.
The police and the FBI confiscated the F50. Baker was arrested and faced federal charges. After making a full confession, he was convicted of grand theft and served two years in jail.
Here today, gone tomorrow
Motors Insurance Corp., an insurance subsidiary of General Motors, was pretty happy to get the call that their F50 had been recovered. Motors had paid Algar for the car and had become its owner. They didn’t mind when the FBI said they needed to hold onto the F50 as evidence.
On May 27, 2009, the F50 was taken for a drive by FBI Special Agent Frederick C. Kingston and Assistant United States Attorney J. Hamilton Thompson. There are conflicting reports about the purpose of the drive. One suggestion is that they were moving the F50 to a new storage location. The other is that they were joy riding. While driving the F50, Kingston lost control, went over a curb and wrapped the car around a tree. Unconfirmed reports explained that it had been raining and when Kingston went over the crest of a hill a bit too fast, the rear came around and he oversteered off the road. The F50 was quickly declared a total loss due to extensive monocoque damage.
One can easily imagine the “here today, gone tomorrow” feeling they must have had at Motors Insurance Corp. And probably a fair amount of déjà vu as well. They were understandably curious as to why Kingston and Thompson were driving the F50, so they asked the FBI and the Department of Justice—over and over. Getting no response to their numerous inquiries, they submitted requests under the Freedom of Information Act asking why the car was driven. Their FOIA requests were denied.
Obviously frustrated, Motors filed an administrative claim for the loss of the Ferrari, and finally got a response. The federal Department of Justice denied the claim on the basis that the United States cannot be sued for property damage while the property is being detained by a law enforcement officer. Motors couldn’t believe the DOJ’s position was correct and asked for reconsideration, which was promptly denied. Lacking any other recourse, Motors filed suit against the United States in the Michigan District of the United States District Court.
The king can do no wrong
As the DOJ rightly points out, the starting point in this case is sovereign immunity. Before we became a country, the long-standing British rule was that one could not sue the King. We borrowed that rule, and immunized our government from liability to individuals. Similarly, government employees were granted legal immunity for acts in the course of their government jobs. That left injured citizens with no recourse at all.
To moderate the unfairness of that situation, Congress adopted the Federal Tort Claims Act in 1946. In that act, the United States agreed to allow itself to be sued under various circumstances. The impetus for passage of the Act was the 1945 plane crash where a B-25 bomber piloted in thick fog crashed into the north side of the Empire State Building. The act was made retroactive to allow the victims and their families to sue the U.S. Government.
The FTCA generally waives sovereign immunity when government employees are negligent when acting within their scope of employment. But—no surprise here—there are a number of exceptions. The one of interest to us covers “claims arising in respect of... the detention of any goods, merchandise, or other property by any officer of customs or excise or any other law enforcement officer.” The DOJ asserts that the issue is controlled by the U.S. Supreme Court Case Ali v. Federal Bureau of Prisons, where a prisoner was not allowed to sue for the loss of some of his property that had been held by the prison during his incarceration. Ali was a close case, decided 5-4, and turned on the grammatical construction of the exception.
Motors picked up a point raised in the dissenting opinion, that “detention” contemplates a forced holding by the government. In its lawsuit, Motors asserts that the FBI “requested” that they be allowed to hold the F50, and Motors “consented” to it. If that works, the consensual “loan” of the Ferrari takes the matter outside the exception. Once outside the exception, the FTCA’s general waiver of sovereign immunity applies, and Motors has a very good claim.
Transport or joy ride?
Another claim might arise when the Government discloses why the car was being driven. If Kingston and Thompson were not moving the F50 to a new storage location—but were just out for a joy ride—then it’s going to be a very interesting case. If it were a joy ride, then they would probably not have been acting within their scope of employment. That could mean that they (or at least the driver) would lose their personal immunity and could be personally liable for the damage.
The odd consequence of that could be that the Government would be off the hook, as the waiver of sovereign immunity extends only to actions of government employees acting within the scope of their employment. And, to round this out, Kingston and Thompson probably had to talk someone else into giving them the keys and opening the warehouse door. However, that employee would have acted within the scope of employment, putting it squarely within the exception to the FTCA.
Needless to say, this is a complicated legal situation. If it takes another Supreme Court opinion to resolve it, then Motors’ legal bills will likely exceed the value of the Ferrari. It’s also an embarrassing case for the FBI and DOJ. After all, driving off the road and hitting a tree unassisted is not a great display of driving skill, so just what were those guys doing in that Ferrari? That gives both sides reason to settle, and hopefully they will both see that quickly.