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THE FEDERAL TORT CLAIMS ACT:
AN ADVANCED COURSE
By:
Stephen V. Petix
Originally Prepared for the Sixth Annual
Southwest Regional
Aviation and Space Law Symposium
April 1996
(Updated April 1998)
Introduction
Hypothetical
No. 1
Proper
jurisdiction and venue for the suit
The
Proper Parties
The Defendants
Proper jurisdiction
and venue for the suit
Hypothetical
No. 2
The Government's
motion to dismiss
The Feres
doctrine
The incident
to service requirement
The
aircraft manufacturer's motion for summary judgment
Hypothetical
No. 3
Amendment
of admin. claim more than two years after the accident
Amendment
of admin. claim to include the destroyed aircraft engines
Amendment
of admin. claim to include the personal injury claim of Mr. Kropps
Amendment
of admin. claim to include the environmental clean-up costs
INTRODUCTION
This program, billed an "advanced course" on the Federal Tort Claims
Act (or FTCA), is intended to build upon the more basic presentation on
the FTCA given by my partner Mike Quinton at last year's [1995's]
Aviation
and Space Law Symposium. The program will assume that the
listener
has some general background in the FTCA, and will, through the use of
hypotheticals,
attempt to provoke a discussion of some of the practical problems and
issues
that arise in the course of aviation litigation that may involve the
federal
government.
Those with very little or no background in the
FTCA need not despair.
In the course of the program, I will attempt to use the chosen
hypotheticals
to review some of the basic provisions of the FTCA and the caselaw that
has interpreted it. If you listen closely, you may pick up on the
basic principles involved. While this federal scheme for tort
compensation
is unique in many of its provisions, its complexity does not approach
that
of the federal income tax code, and its idiosyncrasies can be
understood
by the practitioner willing to devote a modicum of study time to the
basic
provisions of the Act and the leading cases that have applied it over
the
years. Once these are mastered, I think you will agree that the
FTCA
can provide an effective remedy for those injured by the tortious
conduct
of the federal government. For those attendees with a general grounding
in the FTCA, it is the aim of this program that you may leave here with
a little deeper understanding as to how the Act applies to the
real-life
situations that you may encounter in your aviation law practice.
Hypothetical No. 1:
Mr. Paine, a resident of Borrego Springs, California, walks into
your office today, April 10, 1996, in Indio, California, to
seek your help. His sister and brother-in-law (who were residents
of Whittier, California, and childless) were killed in the crash of an
Enormous Airlines Boring 007, on January 5, 1995. The airline is
a Delaware corporation, which operates flights in 43 of the United
States, including California. The plane is manufactured by the
Boring Company, whose principal offices are located in the State of
Washington. The 85-passenger turboprop airliner was on the
downwind leg of a holding pattern, just before receiving clearance for
its final approach into O'Hare International Airport, in Chicago, when
it had a mid-air collision with a C-130 Hercules military transport
aircraft, being flown by a National Guard crew out of Minot Air Force
Base, North Dakota.
The airliner in which Mr. Paine's sister and
husband were flying
did not go down immediately. The initial contact with the C-130
was
a glancing blow to the trailing edge of the airliner's left wing.
The Enormous Airlines pilot was able to keep the Boring 007 aloft for
an
additional 10 minutes, before the loss of hydraulic fluid finally
caused
him to lose control and the plane spun in from 3,500 feet. Mr.
Paine's
sister did not die immediately when the plane hit the ground. Her
severe musculoskeletal and internal injuries, and 2nd- and 3rd-degree
burns,
plagued her for 10 days before she finally succumbed to pneumonia and
gangrene.
She was conscious for most of this time, and kept sobbing
uncontrollably
about her dead husband, whose severed hand had to be pried from her
grasp
by the rescue team that discovered her in the wreckage of the tail
section.
Mr. Paine has surreptitiously obtained a copy of
the entire National
Transportation Safety Board investigation, including the sections that
include the opinions of the NTSB investigators. This report
concludes
that the primary cause of the accident can be attributed to a badly
maintained
altimeter aboard the C-130. The flight recorder recovered from
the
wreckage of the military plane indicated that the Air Guard crew
believed
their C-130 aircraft was 1,000 feet higher in altitude than it actually
was at the time of impact with the Boring 007. The NTSB report
has
identified the National Guard Airman who was responsible for
calibrating
and
maintaining the faulty altimeter as Chester Kowalkowski, an enlisted
man,
who went AWOL shortly after hearing about the accident. His home
of record is Plano, Texas.
The flight recorder recovered from the Enormous
Boring 007 disclosed
that Air Traffic Control advised the airline pilot of the presence of
the
Air Guard C-130 at an unassigned altitude within one mile of his
location
approximately 30 seconds before the collision, but no response to that
notification was ever recorded prior to the accident from the pilot of
either aircraft.
Mr. Paine wants you to bring suit on his behalf
against all possible
defendants for all possible damages he is entitled to, as well as for
all
damages recoverable by his sister's estate.
Question A: Where can you bring the suit?
Question B: Who are the proper plaintiffs? defendants?
Question C: What law will apply?
Discussion of Hypothetical No. 1:
A.
Proper jurisdiction
and venue for the suit.
As a California lawyer representing a California resident,
your first preference for venue would naturally be your local state
Superior
Court. However, if you have decided that the negligence of the
Air
National Guard makes it the primary target, you will be restricted in
your
choice somewhat. We start with the basic principle that the
federal
government enjoys sovereign immunity from suits for personal injury and
death, except to the extent that Congress waives that immunity through
an express consent to be sued. Dalehite v. United States, 346
U.S.
15, 30-31 (1953). The Federal Tort Claims Act (FTCA) provides the
sole waiver of sovereign immunity for such claims, and suit may only be
brought in strict conformity with the comprehensive scheme set up by
the
Act. In 28 U.S.C. § 1346(b) the FTCA contains a grant of
subject
matter jurisdiction for tort suits against the United States in the
federal
district courts; but further provides that these courts have exclusive
jurisdiction over such suits. Thus, you will not be able to file
in Superior Court, if you want to include the United States as a
party-defendant.
However, the news is not all bad. Assuming
that you are
willing and able to proceed in federal district court, the venue
provisions
of the FTCA would permit Mr. Paine, as a resident of Borrego Springs
(San
Diego County), to bring suit in the U. S. District Court for the
Southern
District of California, located in San Diego. 28 U.S.C. §
1402(b).
The alternative venue site under § 1402(b) would be a suit "in the
[federal] judicial district . . . wherein the act or omission
complained
of occurred." Depending upon how one characterizes the negligent
act or omission that caused the accident (i.e., negligent
pre-flight
maintenance or negligent in-flight operation of the Air Guard C-130),
arguably
the proper venue might be either the District of North Dakota, or the
Northern
District of Illinois. See Beattie v. U.S., 756 F.2d 91, 100, 244
U.S.App.D.C. 70 (D.C. Cir. 1984). Contra, Forest v. U. S., 539
F.Supp.
171, 175-176 (D.Mont. 1982). Cf. Richards v. United States, 369 U.S. 1,
82 S.Ct. 585 (1962) (determining choice of law, where negligence
occurred
in Oklahoma, aircraft crashed in Missouri; Oklahoma law applied).
B. The proper parties.
1. The Plaintiffs. Although Mr. Paine is the only one
who contacted you concerning the case, you will need to inquire what
other
relatives survived his decedent sister, in order to determine whether
he
has legal standing to bring a wrongful death action. Rule 17(b)(1) of
the Federal Rules of Civil Procedure provides that the capacity of an
individual to sue or be sued is determined “by the law of the
individual's domicile," here California. In the instant
factual scenario, California Code
of Civil Procedure § 377.60 would restrict standing to bring a
wrongful
death action to "the persons who would be entitled to the property of
the
decedent by intestate succession," which in turn is determined by
California
Probate Code § 6402. Under this statute Mr. Paine would not
qualify as an intestate heir, if one or both of his parents are alive,
since they are next in line, where, as here, the decedent's husband
predeceased
her and the couple left no children. Prob.C. § 6402(a)-(c).
Mr. Paine could bring an action on behalf of the
estate (and on
behalf of those survivors who do have standing to bring a wrongful
death
action), only if he is appointed as the personal representative of his
deceased sister's estate. CCP §§ 377.30, 377.60.
This should be established before an administrative tort claim is filed
with the federal agency deemed responsible for the tort, because the
claim
should be accompanied by evidence of the representative authority of
the
person signing the claim form.
See Title 28, Code of Federal Regulations (CFR),
Sections 14.2(a),
14.3, 14.4.Graves v. U. S. Coast Guard, 692 F.2d 71, 74-75 (9th Cir.
1982)
Since failure to file a timely administrative claim with the agency in
question is a jurisdictional bar to suit under the FTCA, 28 U.S.C.
§§
2675(a); McNeil v. United States, 508 U.S. 106, 113 S.Ct. 1980 (1993);
Meridian Intern. Logistics, Inc. v. United States, 939 F.2d 740, 743
(9th
Cir. 1991); Murrey v. U.S., 73 F.3d 1448, 1451-52 (7th Cir. 1996);
Kanar
v. U.S. 118 F.3d 527 (7th Cir. 1997); Simpkins v. Dist. of Columbia
Govt.,
108 F.3d 366, 371 (D.C.Cir. 1997), and since failure to present such a
claim within two years of the accrual of the claim runs afoul of the
FTCA's
statute of limitations, 28 U.S.C. § 2401(b), it behooves the
careful
practitioner to determine these facts early in the evaluation of the
case.
2. The Defendants.
Insofar as you intend to pursue a claim against the federal
defendants, the FTCA is helpful in simplifying your choices. That
is because under the FTCA the only proper defendant is the United
States
of America, regardless of how many different government employees may
be
involved in the circumstances leading up to the accident. Wright
v. United States, 719 F.2d 1032, 1034 (9th Cir. 1983); Davis v. United
States, 667 F.2d 822 (9th Cir. 1982). If you do attempt to join
individual
federal employees as defendants, the U. S. Attorney will move to
substitute
the United States as the defendant in their stead, and obtain their
dismissal
in their individual capacities. 28 U.S.C. § 2679(d).
In
this case, this simply means that you do not have to concern yourself
with
having to locate the Air National Guard mechanic who worked on the
altimeter
(except as a percipient witness), nor with pursuing the estate of the
C-130
pilot in command. As long as it reasonably appears to the U. S.
Attorney
that they were acting within the course and scope of their employment
at
the time of their negligent acts or omissions, the United States will
be
liable under the FTCA, 28 U.S.C. § 1346(b), and you will not have
to worry about an uncollectible judgment, if you prevail.
Of course, a suit against the federal
government under the
FTCA has its drawbacks, too. For one thing, your client is not
entitled
to a jury trial on his claims against the government. 28 U.S.C.
§
2402. Rather, a federal district judge, sitting without a jury,
will
decide both liability and damages on the FTCA causes of action.
As
a practical matter, a plaintiff who is able to join non-government
defendants
may end up getting the benefit of a jury trial, if he makes a timely
jury
demand, pursuant to Rule 38, Fed.R.Civ.P. That is because most
district
judges will either entertain the use of the jury as an "advisory jury"
as to the FTCA action, or in any event will await the jury's verdict
before
making their own findings, in order to get a sense of the community's
judgment
in the matter.Steering Committee v. United States, 6 F.3d 572, 574 (9th
Cir. 1993) Since the enactment of Public Law 101-650, Section
310(c)
(effective December 1, 1990), it has been possible to invoke
"supplemental
jurisdiction" to join non-government parties-defendants in
actions
brought against the United States under the FTCA. 28 U.S.C.
§
1367.Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003 (1989)
However, in the hypo under consideration counsel
must keep in mind California's two-year statute of limitations as to
the potential non-government defendants (the airline and the aircraft
manufacturer), if the action is brought against them in California.
(See CCP § 335.1) The filing of an administrative tort claim with
a federal agency, under the FTCA, will NOT toll (suspend) the running
of the California state statute of limitations, and joinder might not
be possible, if the FTCA claim is not ripe for filing suit (due to a
delay in agency action on the claim) prior to the running of the state
limitations period. In that event, if it appears that substantial
additional damages may in fact be recoverable from the non-government
defendants, serious consideration should be given to bringing an
independent action or actions against those other defendants in
whatever other jurisdiction provides the remedies unattainable through
your FTCA suit. If such suit is to be brought in California, it
must be filed before the state two-year statute of limitations expires.
Additional limitations the plaintiff(s) will face
in the FTCA
suit against the United States include: (1) punitive damages are not
available
against the federal government under the FTCA [28 U.S.C. § 2674];
(2) prejudgment interest is not recoverable from the United States
under
the Act [Id.]; and (3) the government can take advantage of the
applicable
State law's various limitations on damages (e.g., California's
Proposition
51, imposing several liability for non-economic damages based on
comparative
fault). The rationale for this last limitation is that the United
States' liability under the FTCA is analogous to that of a private
party
under the law of the place where the negligent act or omission
occurred.
28 U.S.C. § 1346(b); Proud v. United States, 723 F.2d 705 (9th
Cir.),
cert. denied, 467 U.S. 1252 (1984); Castro v. U. S., 34 F.3d 106, 111
(2d
Cir. 1994).
3. The
applicable substantive
law.
Wherever the FTCA action is brought, the substantive law to
be applied in determining both liability and damages as to the United
States
is "the law of the place where the act or omission [giving rise to
liability]
occurred." 28 U.S.C. § 1346(b). The Supreme Court
supplied
the language in brackets in, of all things, an airplane accident case,
in which it was essentially undisputed that negligence in maintenance
of
the aircraft in Oklahoma caused the aircraft in question to crash in
the
State of Missouri. Richards v. United States, 369 U.S. 1 (1962).
See, generally, Beattie v. U.S., 756 F.2d 91, 96-97 (D.C.Cir. 1984)
(discussing
the law to be applied where negligence at one location has an operative
effect in another jurisdiction).Smith v. U.S., 507 U.S. 197, 200 &
n.2, 113 S.Ct. 1178, 1181 & n.2 (1993) The Court in Richards
held that the district court must apply the whole law of the State
where
the negligent act occurred, including its choice-of-law rules.
369
U.S. at 11-14. Accord, Couzado v. United States, 105 F.3d 1389,
1395
(11th Cir. 1997); Beech Aircraft Corp. v. United States, 51 F.3d 834,
838
(9th Cir. 1995). Thus, in our Hypo No. 1, it may be argued that the
negligent
cause of the accident was the faulty maintenance of the altimeter,
which
occurred in North Dakota. If so, that could be fatal to Mr.
Paine's
wrongful death action, since North Dakota's wrongful death statute does
not appear to provide a recovery of damages for a decedent's
siblings.
(But it could be worth checking North Dakota's choice-of-law rules, to
see if a North Dakota court might apply some other State's law on this
issue.) If negligence can also be assigned to the Air National
Guard
crew of the C-130 for failing to check the accuracy of the altimeter by
other available means either before takeoff or en route to Chicago, for
failure to listen to the warning about them given to the Enormous
Airlines
007 pilot shortly before the collision, or for their failure to see and
avoid the other aircraft, perhaps a case can be made that Illinois law
should apply instead.Rivera v. Southern Pacific Transportation Co.
(1990)
217 Cal.App.3d 294, 298-299, 266 Cal.Rptr. 11
Another major damages issue that could turn on the
choice of law
is whether the decedent's estate can recover for the decedent's
pre-death
pain and suffering (including her acute emotional distress experienced
between the initial mid-air collision and the actual crash 10 minutes
later).
It appears clear that California law would not provide such
damages.
CCP § 377.34. Obviously, a study of North Dakota and
Illinois
law on this issue would be an appropriate inquiry for Mr. Paine's
attorney
to undertake.
Hypothetical
No. 2:
You have filed an FTCA action on behalf of Mrs.
Amelia Von Rechtoffen,
and her three children. The clients' husband-father Eric Von
Rechtoffen
was a U. S. Coast Guard officer who perished in the crash of his
Weurhle
Bird helicopter while on a rescue flight from the Coast Guard Station
at
San Diego to San Clemente Island, to pick up a yachtsman who had been
badly
injured when his sloop ran aground on the rocky west coast of the
island.
In the course of your investigation, you were able to establish that at
the time of the accident the decedent pilot, Lieutenant Von Rechtoffen,
was operating his aircraft under positive control by San Diego TRACON,
because of bad weather and poor visibility in the vicinity of the
island,
plus the fact that the aircraft's collision avoidance radar system was
temporarily "out of service." Transcripts of the pilot's
conversations
with the FAA controller indicate that he was given incorrect vectors,
which
took the helicopter across the mountainous center of the island,
instead
of around its southern tip. The aircraft struck a 700-ft. ridge,
at the 500-ft. level, burst into flames, and all aboard were killed
instantly.
Your investigation further disclosed that the
maintenance records
of the helicopter, manufactured by Weurhle & Sons, A.G., Ltd., of
Salzburg,
Austria, indicate that the aircraft's radar system suffered from very
poor
performance, from the very first day that the helicopter was placed
into
service. The Coast Guard had registered numerous complaints with
Weurhle & Sons, which identified excess moisture in the radar
instruments
compartment as the probable cause of the radar malfunctions; but in
correspondence
found in the records the company repeatedly refused to acknowledge
responsibility
for the radar problems, insisting instead that the instrument housing
compartment
had been designed and built solely to the Coast Guard's
specifications.
You have named the helicopter manufacturer as a defendant in the suit,
along with the United States, invoking 28 U.S.C. § 1367 as the
basis
of supplemental subject matter jurisdiction as to your claims against
Weurhle
& Sons.
Instead of filing an answer to your complaint, the
United States
Attorney files a motion to dismiss, asserting that the pilot's
survivors
may not sue the United States, but are relegated to their federal
survivors'
benefits as the Coast Guard officer's dependents, as their exclusive
remedy.
The helicopter manufacturer files a motion for
summary judgment,
under Rule 56, Fed.R.Civ.P. Weurhle & Sons contends that it
is
immune from tort liability, because it strictly followed the
specifications
demanded by the Coast Guard in designing and building the aircraft's
radar
system housing compartment.
Question A: How do you respond to the
government's motion
to dismiss?
Question B: How do your respond to Weurhle & Sons'
Rule 56 motion?
Click here to go to the top of this
document.
Discussion of
Hypothetical No. 2:
A. The
Government's motion
to dismiss.
1. The Feres doctrine.
The government's motion to dismiss raises the immunity defense
created by the U. S. Supreme Court in the case of Feres v. United
States,
340 U.S. 135 (1950). While roundly criticized by legal
commentators
(and by four of the Supreme Court's current membership, in United
States v. Johnson, 481 U.S. 681, 107 S.Ct. 2063 (1987)), the doctrine
nevertheless
survives to bar any tort recovery to a military serviceman (or
servicewoman)
injured while engaged in any activity deemed "incident to
service."
The doctrine also bars recovery to the serviceman's spouse and
dependents,
insofar as it may be based on any claim derived from the military
member's
injury or death. United States v. Shearer, 473 U.S. 52, 58 n.3,
105
S.Ct. 3039, 3043 n. 3 (1985).
The rationale supporting the Feres doctrine has
been explained
differently in different cases. Three basic arguments for its
application
have emerged:
"First, the relationship between the
Government and members
of its Armed Forces is ' "distinctively federal in character," ';
it would make little sense to have the Government's liability to
members
of the Armed Services dependent on the fortuity of where the soldier
happened
to be stationed at the time of the injury. Second, the Veterans'
Benefits Act establishes, as a substitute for tort liability, a
statutory
'no fault' compensation scheme which provides generous pensions to
injured
servicemen, without regard to any negligence attributable to the
Government.
A third factor ... [is] '[t]he peculiar and special relationship of the
soldier to his superiors, the effects of the maintenance of such suits
on discipline, and the extreme results that might obtain if suits under
the Tort Claims Act were allowed for negligent orders given or
negligent
acts committed in the course of military duty....' "
Stencel
Aero Engineering Corp. v. United States, 431 U.S. 666, 671-672, 97
S.Ct.
2054, 2058, 52 L.Ed.2d 665 (1977) (citations omitted).
United States v. Johnson, supra, 107 S.Ct. at 2066, n. 2.
Actually, Justice Scalia, in his dissent in the
Johnson case,
points out that the three rationales used by the majority today are
really
different from those used by the Court in the original Feres case, and
concludes that "the Feres rule is now sustained only by three
disembodied
estimations of what Congress must (despite what it enacted) have
intended.
They are bad estimations at that." 107 S.Ct. at 2071.
Justice
Scalia also notes that the first of the three original rationales
relied
upon in Feres has been abandoned, id., and that the second and third
rationales
set out in Feres have been determined to be "no longer controlling."
107
S.Ct. at 2071, 2072 (citing, United States v. Shearer, 473 U.S. 52, 58,
n. 4, 105 S.Ct. 3039, 3043, n. 4, 87 L.Ed.2d 38 (1985)). Finally,
Justice Scalia observes that the new third rationale now utilized to
justify
the Feres doctrine (i.e., the undesirability of second-guessing
military
decisions, or the "military discipline" rationale) cannot really
withstand
scrutiny, when you consider that the same military decision can still
be
second-guessed by a suit brought by a civilian who may have been
injured
as a result of the same aircraft accident, United States v. Johnson,
supra,
107 S.Ct. at 2074, or by the suit of the pilot's widow against the
manufacturer
of the helicopter, who raises the defense of contributory negligence by
a military officer. Id.
Regardless of this criticism by the minority of
the CourtTaber
v. Maine, 67 F.3d 1029, 1032 (2d Cir. 1995), the Feres doctrine is
still
a formidable obstacle to recovery by a serviceman or his dependents
under
the FTCA. To our knowledge, no one has ever recovered for
injuries
to an individual on board a military aircraft by virtue of his/her
military
status.
[ However, more recently, the Ninth Circuit Court of Appeals has issued
a couple
of opinions that have narrowed the scope of the Feres doctrine, at
least in those situations where service personnel were on temporary
leave of duty and engaged in non-military activities when they were
injured, even though the accident occurred on a military base.
See
Schoenfeld v. Quamme, 492 F.3d 1016 (9th Cir. 2007); Dreier v. United
States, 106 F.3d 844 (9th Cir.1996).]
2.
The "incident to service"
requirement.
Even assuming that the Feres doctrine remains a viable defense
for the government, the United States will still have to establish that
the plaintiff's decedent's death occurred while he was engaged in
activities "incident to [military] service." A myriad of cases
have
explored the parameters of that concept, including a few recent Supreme
Court cases, United States v. Shearer, 473 U.S. 52, 105 S.Ct. 3039
(1985);
United States v. Stanley, 483 U.S. 669, 107 S.Ct. 3054 (1984); and, of
course, United States v. Johnson, 481 U.S. 681, 107 S.Ct. 2063
(1987).Bon
v. United States, 802 F.2d 1092 (9th Cir. 1986)Hata v. United States,
23
F.3d 230 (9th Cir. 1994)Miller v. U. S., 42 F.3d 297 (5th Cir.
1995)Lewis
v. United States, 663 F.2d 889 (9th Cir. 1981)Uptegrove v. United
States,
600 F.2d 1248 (9th Cir. 1979), cert. denied, 444 U.S. 1044, 100 S.Ct.
732
(1980).
The resourceful lawyer might be heard to argue that Lt. Von
Richthofen's
activities in the instant hypothetical could not be "incident to
[military]
service," since the Coast Guard is not an agency within the Department
of Defense, and the nature of her husband's rescue mission was
ostensibly
non-military. Furthermore, since the actionable negligence seems
to be that of a civilian FAA air traffic controller, how would the suit
involve military discipline?
Unfortunately for the Coast Guard widow in our
Hypothetical No.
2, her claim would probably be barred by the Feres doctrine, under the
Johnson case, which incidentally also involved a Coast Guard pilot
flying
a rescue mission, who was under positive radar control by an FAA
controller.
The Johnson majority found no reason to depart from Feres, even though
the active negligence probably was that of the civilian air traffic
controller.
The Court reasoned that: "Even if military negligence is not
specifically
alleged in a tort action, a suit based upon service-related activity
necessarily
implicates the military judgments and decisions that are inextricably
intertwined
with the conduct of the military mission." 107 S.Ct. at 2069,
&
n. 11. And if you thought that the Coast Guard was not a
"military"
organization, due to its location in the organizational charts of the
Department
of Transportation, the Court also eliminated that possible loophole in
a footnote, finding that: "The Coast Guard, of course, is a military
service,
and an important branch of the Armed Services. 14 U.S.C. Sec.
1."
107 S.Ct. at 2069, n. 12.Borden v. Veterans Admin., 41 F.3d 763 (1st
Cir.
1994)
B.
The aircraft manufacturer's motion for summary judgment.
The motion of Weurhle & Sons, A.G., Ltd., is also grounded
on a viable defense theory, after the case of Boyle v. United
Technologies
Corp., 487 U.S. 500, 108 S.Ct. 2510 (1988 ), which essentially provided
a defense for any government contractor sued for products liability,
where
the company could establish that the cause of the accident arose from a
design defect in a product designed and manufactured to the mandatory
specifications
of the government. To succeed the military contractor must show
that:
(1) the United States approved reasonably precise
specifications;
(2) the equipment conformed to those specifications; and (3) the
supplier warned the United States about the dangers in the use of the
equipment
that were known to the supplier but not to the United States.
108 S.Ct. at 2518.
This "military contractor defense" is a curious
example of the
application of the FTCA to a dispute between private parties.
Since
it has often come up in aviation accident cases,Bailey v. McDonnell
Douglas
Corp., 989 F.2d 794 (5th Cir. 1993);Landgraf v. McDonnell Douglas
Helicopter Co., 993 F.2d 558 (6th Cir. 1993)Tate v. Boeing Helicopters,
55 F.3d 1150 (6th Cir. 1995)Lewis v. Babcock Industries, Inc., 985 F.2d
83 (2d Cir. 1993) it seemed appropriate to comment on the defense in
this
program. Like our hypo, the Boyle case also involved the crash of a
military
helicopter (a Marine Corps CH-53D), which in that case was designed and
built by the Sikorsky Division of United Technologies. The design
defect identified in Boyle was an escape hatch, which could only open
outward,
and therefore was ineffective, due to water pressure, when the CH-53D
crashed
into the ocean. Although the decedent's father brought the case
in
federal district court under the court's diversity of citizenship
jurisdiction,
28 U.S.C. § 1332, he sought application of the tort law of the
State
in which the court sat, namely, Virginia.
Ordinarily, there is no dispute in applying the
law of the forum
in a diversity case. Erie R. Co. v. Tompkins, 304 U.S. 64, 58
S.Ct.
817, 82 L.Ed. 1188 (1938). However, the Court in Boyle discerned
that a "uniquely federal interest" existed, as well as a "significant
conflict"
with federal policy, which required the application of federal law,
where
a government contractor is sued for producing a product that is
specifically
ordered by the U. S. Marine Corps. 108 S.Ct. at 2515-18.
Thus
the Court displaced State law in favor of applying the "discretionary
function"
defense (found in the FTCA at 28 U.S.C. § 2680(a) and usually
applied
only to immunize the United States itself)Berkovitz v. United States,
486
U.S. 531, 108 S.Ct. 1954 (1988)Kennewick Irrigation Dist. v. United
States,
880 F.2d 1018 (9th Cir. 1989)In re Glacier Bay, 71 F.3d 1447 (9th Cir.
1995) to bar suit against Sikorsky. The Supreme Court reasoned
that
such a suit would allow second-guessing of the procurement decisions of
the military, which are usually based on engineering analysis and
social
and policy reasons, "including specifically the trade-off between
greater
safety and greater combat effectiveness," which would be prohibited by
the "discretionary function" defense, if the action were brought
directly
against the government under the FTCA. 108 S.Ct. at 2518.Carley v.
Wheeled
Coach, 991 F.2d 1117, 1119 & n.1 (3d Cir.) (and cases cited), cert.
denied, 114 S.Ct. 191 (1993)In re Hawaii Fed. Asbestos Cases, 960 F.2d
806, 810-811 (9th Cir. 1992)
The plaintiff here might still be able to get past
the motion
for summary judgment and obtain some discovery, since some factual
issues
can probably be raised concerning what the precise specifications were
for the radar instrument housing, and whether, in view of the
complaints
by the Coast Guard, the government can be said to have accepted the
design.
The case of Landgraf v. McDonnell Douglas Helicopter Co., 993 F.2d 558
(6th Cir. 1993), is instructional as to how these issues might be
resolved.
In that case the court of appeals found that a more general Military
Specification
concerning the minimum clearances between the main rotor and the tail
boom
assembly was superseded by a more precise Detail Specification which
established
the"ultimate design specifications" for the helicopter in the
procurement
contract. 993 F.2d at 563-564. The court also found that
the
numerous contacts between the contractor and the Army in the
development
and testing of the aircraft, without any further changes in design
demanded
by the Army, served to constitute a final acceptance of the helicopter
as designed and built by the contractor. 993 F.2d at
563-565.
In the instant case, the plaintiff may be
able to argue
that the continued dissatisfaction expressed by the Coast Guard casts
doubt
on the manufacturer's compliance with the service's specifications, and
of the government's acceptance of the helicopter as designed and
manufactured.
There may also be a manufacturing defect in the aircraft, which would
require
the contractor to provide an adequate warning of the defect, which
warning
has been approved by the government. See Tate v. Boeing
Helicopters,
55 F.3d 1150, 1156-58 (6th Cir. 1995).
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document.
Hypothetical No. 3:
You are counsel for the Phoenix Air Service Co., Inc., an
FBO at the John Wayne Airport. On January 3, 1994, a United
States
Marine Corps FA-18 Hornet crashed into one of your client's three
hangars
at the airport, after the pilot ejected from the disabled jet fighter.
In your administrative claim filed with the Marine Corps on behalf of
Phoenix,
you demanded a total of $2.3 million for the partial destruction of the
hangar, which contained two Cessna 172D's, one Piper Aztec, and one Bee
Gee racing plane (last flown in 1937). In addition to the
building
and the planes, also destroyed or damaged were two storerooms full of
general
aviation aircraft replacement parts and related repair tools, and
operations
of the FBO were suspended for five months, while repairs were made to
the
hangar and the lost aircraft and parts were replaced through leases or
purchases.
You filed the administrative tort claim on behalf
of your client
in December of 1994, and no final decision on the claim has been made
by
the Marine Corps, despite your threats that you intended to treat the
failure
to respond as a denial and file suit, because more than six months have
passed since you filed the claim. [See 28 U.S.C. § 2675(a).]
The Marine Corps has told you only that it was required to pass your
claim
on to the regional Navy Legal Services Office, for processing, and the
Navy has said nothing.
Today you get a call from Dusty Kropps, the
majority owner of
Phoenix Air Service, who informs you that, despite diligent efforts to
provide you with an accurate assessment of the company's losses due to
the aircraft accident, he forgot to include two new Continental
reciprocating
engines that had just been installed in the Piper Aztec the day of the
FA-18 crash. In the confusion of the accident and its aftermath,
his mechanic had failed to notify his bookkeeper that the $15,000.00
engines
had been installed, and the latter assumed they were still located
in
one of the hangars that had not been damaged in the accident. A
recent
inventory for tax purposes disclosed the engines had been removed from
storage and installed in the destroyed plane.
Mr. Kropps also announces that he has been seeing
a psychiatrist
for the last two months, for insomnia. The doctor, upon being
told
that Dusty was present at the airport on the day of the FA-18 crash,
and
that he saw the jet crash into his hangar, has diagnosed him as having
post traumatic stress disorder, even though he suffered no physical
trauma.
Mr. Kropps wants to amend his company's claim to include a claim for
his
emotional distress damages.
Finally, Mr. Kropps indicates that the building
contractor hired
to perform the repairs to the partially destroyed hangar has informed
him
that the original estimate for the work will have to be revised upward
substantially, since demolition of the damaged portion of the hangar
has
uncovered multiple hazardous fluid sumps that have been reported to EPA
and the State, and will have to be remedied, before final permits will
be issued by those agencies for the reconstruction . A: Can the
administrative
claim be amended more than two years after the accident?
B: Can the administrative claim be amended to
include the destroyed
aircraft engines?
C: Can the administrative claim be amended to
include the personal
injury claim of Mr. Kropps?
D: Can the administrative claim be amended to
include the extra
costs of environmental clean-up?
Discussion of Hypothetical No. 3:
This hypothetical explores various issues that can
arise in the
administrative claims phase of FTCA litigation. As pointed out
above,
in the discussion of Hypo No. 1, one of the jurisdictional
prerequisites
to bringing an action against the United States under the FTCA is the
mandatory
filing of an administrative claim for a "sum certain"Manko v. United
States,
830 F.2d 831, 840 (8th Cir. 1987)Rucker v. United States Dept. of
Labor,
798 F.2d 891, 893 (6th Cir. 1986) with the agency believed to be
responsible
for the injury. 26 U.S.C. § 2675(a); Meridian Intern.
Logistics,
Inc. v. United States, 939 F.2d 740, 743 (9th Cir. 1991); Murrey v. U.
S., 73 F.3d 1448, 1451-52 (7th Cir. 1996). The Congressional
intent
behind this requirement was to encourage the settlement of tort claims
by the federal agencies themselves at the administrative level, and
thus
"ease court congestion and avoid unnecessary litigation." Anderson By
and
Through Anderson v. United States, 803 F.2d 1520, 1522 (9th Cir. 1986)
(citing legislative history).
The admin claim must be "presented" to the agency
within two years
of the accrual of the claim, or it will be barred. 28 U.S.C.
§
2401(b). There is a government form that can be used to state the
claim, a so-called Standard Form 95 (SF 95), which can be obtained from
the agency or from the U. S. Attorney's Office in your district, but
use
of the form is not mandatory, as long as it is in writing and contains
the same information required by the SF 95. 28 CFR §
14.2(a).
Presentment of the claim is not effected by simply mailing the claim to
the agency. It will be deemed "presented" (or filed) only upon
receipt
by the agency. 28 CFR § 14.2(a); Steele v. United States, 390
F.Supp.
1109, 1112 (S.D.Cal. 1975); Bailey v. United States, 642 F.2d 344,
346-347
(9th Cir. 1981). If possible, do not wait until the last day of
the
limitations period to file the claim, and use a secure form of delivery
that provides a way to establish proof of delivery and/or
acknowledgement
of receipt by the agency. See Moya v. United States, 35 F.3d 501,
503-504 (10th Cir. 1994) (attorney criticized for failure to get return
receipt for mail).
Once the admin claim has been properly presented to the agency,
the agency has six (6) months to investigate and settle the claim,
which
will probably involve requesting additional information from the
claimant.
Any suit filed before the claim is formally denied in writing, or
before
the six-month waiting period has expired, is premature, and the
district
court lacks jurisdiction to hear it, even if the six months expires
before
a motion to dismiss is heard. Jerves v. United States, 966 F.2d
517
(9th Cir. 1992); McNeil v. United States, 508 U.S. 106, 113 S.Ct. 1980
(1993). If the agency fails to take definitive action on the
claim
within six months, the claimant has the option to wait until it does,
Douglas
v. United States, 658 F.2d 445, 449-450 (6th Cir. 1981), or to deem the
inaction a formal denial and file suit in U. S. district court.
28
U.S.C. § 2675(a).
However, once you or your client receive a
registered or certified
letter formally denying the claim, a special six-month statute of
limitations
begins to run, within which you must file suit, or the claim will be
barred.
28 U.S.C. § 2401(b). The same goes for a letter making a
"take-it-or-leave-it"
offer; that is, an offer of settlement in a given amount that advises
that
failure to accept by a certain date will constitute a denial of the
claim
by the agency, and the six-month limitations period of § 2401(b)
will
commence to run on that date. The safe thing to do in that case
is
to file your lawsuit within six months of the date of mailing of the
letter.
See Heimila v. United States, 548 F.Supp. 350 (E.D.N.Y. 1982); Dilg v.
U. S. Postal Service, 635 F.Supp. 406 (D.N.J. 1986).
Note that this six-month statute of limitations
will apply, even
if the claims process was started and exhausted before the expiration
of
the two-year limitations period applicable to filing an administrative
claim with the agency. Heimila v. United States, 548 F.Supp. at
351;
Claremont Aircraft, Inc. v. United States, 420 F.2d 896 (9th Cir.
1970).
A.
Amendment of administrative claim more than two years after the
accident.
While it is absolutely necessary to file an administrative
claim with the agency,Spawr v. United States, 796 F.2d 279 (9th Cir.
1986)
it is also important to make sure that the "sum certain" claimed is
adequate
to compensate the claimant for all injuries incurred; because if there
is no administrative settlement and suit is filed later, the amount
that
can be recovered in court will be limited to the amount claimed in the
administrative claim, unless the plaintiff can establish that "the
increased
amount is based on newly discovered evidence not reasonably
discoverable
at the time of presenting the claim to the federal agency, or upon
allegation
and proof of intervening facts, relating to the amount of the
claim."
28 U.S.C. § 2675(b).
Under the facts of our Hypo No. 3, the matter is
easily remedied,
since the administrative claim has not yet been denied by the agency,
and
the regulations provide that amendment can be made any time prior to
such
formal denial. 28 CFR § 14.2(c). The fact that the
two-year
statute of limitations for filing an admin claim has run is therefore
irrelevant.
In essence, the amendment relates back to the filing of the original
claim
with the agency. Nor does it matter that you have threatened to
sue
based on the expiration of the six-month waiting period without agency
action. As long as you have not actually sued, you may amend the
claim to the agency. As noted above, the only drawback to
amending
the admin claim is that the agency then has an additional six months to
investigate and settle or deny the amended claim. 28 CFR §
14.2(c).
B.
Amendment of administrative claim to include the destroyed aircraft
engines.
Again, since the hypo postulates that the agency has not yet
denied the admin claim, amendment of the claim is allowed, pretty much
without limitation. Amending to add the aircraft engines merely
increases
the amount of damages and does not raise a new and different cause of
action.
However, as a practical matter, since the additional $30,000
loss for the engines is a relatively small portion of your client's
total
claim of over $2.3 million, the client may not be able to afford to
give
the Navy an additional six months to consider his amended admin claim,
especially since prejudgment interest is not allowed under the
FTCA.
28 U.S.C. § 2674. In view of the fact that more than six
months
has already expired without action on what should be an admitted
liability
case, it is likely that the local Navy claims office is overwhelmed
and/or
may not have authority to settle such a large claim anyway. It
may
be advisable to attempt telephone contact with the officer actually
handling
the claim file, to learn whether he/she evidences any experience
handling
such claims and, if so, whether he/she can give you any assurances that
settlement negotiations are likely to commence within a time frame
acceptable
to you.
If not, it may be worth the risk to file suit,
allege all the
damages (including the $30,000 for the two aircraft engines), and
include
in your complaint allegations of the newly discovered evidence to
support
the increase in damages. However, the plaintiff will have to show
that the new evidence was "not reasonably discoverable" at the time the
administrative claim was filed. Michels v. U. S., 31 F.3d 686, 687-689
(8th Cir. 1994). See Allgeier v. United States, 909 F.2d 869,
877-879
(6th Cir. 1990); O'Rourke v. Eastern Airlines, 730 F.2d 842, 855-856
(2d
Cir. 1984). Under the facts of the instant hypothetical, the
result
could be a coin toss.
C.
Amendment of administrative claim to include the personal injury claim
of Mr. Kropps.
An attempt to amend the administrative claim to add the personal
injury damages of Mr. Kropps is not likely to succeed. The
problem
is, under the facts of the hypo, the claim was filed on behalf of the
corporate
client Phoenix Air Service, for property damages only, and not on
behalf
of Dusty Kropps. He would have had to file his own separate claim
for damages for his own personal injuries with the agency within two
years
after the accident. See Montoya v. United States, 841 F.2d 102
(5th
Cir. 1988); Rucker v. United States Dept. of Labor, 798 F.2d 891, 893
(6th
Cir. 1986); Manko v. United States, 830 F.2d 831, 838-842 (1987);
Johnson
v. United States, 704 F.2d 1431, 1442 (9th Cir. 1983). Since
Dusty
failed to do this, his claim for personal injuries is barred. 28
U.S.C. § 2401(b).
Admittedly, the facts of Hypo No. 3 also indicate that Mr.
Kropps's
discovery of his post traumatic stress disorder was delayed, since the
symptoms (insomnia) did not manifest themselves until recently.
Unfortunately for him, the two-year statute of
limitations applicable
to the FTCA does not contain a "delayed discovery" provision and the
courts
have not generally supplied one, except in the medical malpractice
area.
See United States v. Kubrick, 444 U.S. 111 (1979); Outman v. U. S., 890
F.2d 1050, 1052 (9th Cir. 1989); Davis v. United States, 642 F.2d 328,
330 (9th Cir. 1981), cert. denied, 455 U.S. 919 (1982). Likewise,
various rationales for tolling the FTCA's statute of limitations have
also
been rejected by the courts. See, e.g.: Mann v. United States,
399
F.2d 672 (9th Cir. 1968) (no tolling for minor child); Smith v. United
States, 588 F.2d 1209 (8th Cir. 1978) (same); Casias v. United States,
532 F.2d 1339, 1342 (10th Cir. 1976) (no tolling for insanity). But
see,
Washington v. United States, 769 F.2d 1436, 1438-39 (9th Cir. 1985)
(claim
did not accrue until guardian appointed for adult incompetent, since
until
then no one had a duty to assert the claim on the incompetent's
behalf).
However, in 1990 the Supreme Court held that equitable tolling could be
invoked to extend a statute of limitations applicable to an employment
discrimination suit against the federal government, but restricted such
tolling, effectively, to cases where the plaintiff could show some kind
of government misconduct that led to the limitations period being
missed.
Irwin v. Dept. of Veterans Affairs, 498 U.S. 89, 111 S.Ct. 453 (1990);
Alvarez-Machain v. U.S., 107 F.3d 696 (9th Cir. 1996). The facts
of this hypothetical would not appear to support such a tolling theory.
D.
Amendment of administrative claim to include the environmental clean-up
costs.
The potential problem with this proposed amendment is the
practical one of whether the client can demonstrate that the aircraft
accident
caused the environmental hazard that has been identified. If
Phoenix
can convince the agency that, but for the destruction of the hangar, no
environmental clean-up would have to be contemplated, amendment of the
claim to add these additional damages might work. As a practical
matter, however, the addition of what may be a complex issue or series
of issues for the Navy
claims officer to deal with will only delay a decision
on your very substantial claim for a considerable length of time
(potentially
as much as six more months, 28 CFR § 14.2(c)). Unless the
clean-up
costs are quite substantial all by themselves, it may again be worth
the
risk to proceed with suit, in order to preclude further administrative
delay of the main part of your claim, and then add the costs of
clean-up
to the damages, together with allegations of newly discovered evidence
to support the damages figure in excess of the original administrative
claim.
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