Hendry v. United States, 490

• Decision Date: 12 November 1969
• Docket Number: No. 490,Docket 32306.,490
• Citation: 418 F.2d 774
• Parties: Ernest J. HENDRY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

418 F.2d 774 (1969)

Ernest J. HENDRY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 490, Docket 32306.

United States Court of Appeals Second Circuit.

Argued June 6, 1969.

Decided November 12, 1969.

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John R. Harold, Frank J. Barbaro, New York City, for plaintiff-appellant.

Michael C. Silberberg, Michael D. Hess, Asst. U. S. Attys., Robert M. Morgenthau, U. S. Atty., for defendant-appellee.

Before WATERMAN, FRIENDLY and KAUFMAN, Circuit Judges.

WATERMAN, Circuit Judge:

Appellant was licensed in 1943 by the U.S. Coast Guard pursuant to authority contained in 46 U.S.C. § 224 as qualified "to sail as Master of a steam vessel of any gross tonnage upon the oceans of the world,"¹ and until 1962 served on Merchant Marine vessels as a deck or watch officer. In March 1962 he complained to the Coast Guard that while serving on an oil tanker he had been assaulted and threatened by the captain of the vessel. A Coast Guard investigation ensued and the investigation report concluded that these accusations were unfounded. The report reached the same conclusions about an earlier similar complaint by the appellant. According to the report, various interviewed crew members felt Hendry was "always complaining" and was "under the illusion that everyone was against him." They also said that "some of his actions appeared to be bizarre." The Philadelphia office of Hendry's union declined to participate in the investigation but did state that Hendry "had a history of registering complaints." The recommendation of the investigation report was that, although appellant was apparently a well qualified officer, he possibly might be unfit for duty because of his apparent inability to get along with his shipmates.

Upon the request of the Senior Investigating Officer, appellant voluntarily agreed to deposit his license with the Coast Guard "until such time as I am declared fit for sea duty by the U.S. Public Health Service." He further agreed that "pending my certification as fit for sea duty, I will not accept employment on any merchant vessel of the United States."

Pursuant to the applicable federal regulations appellant underwent a psychiatric examination at a United States Public Health Hospital on Staten Island on April 5. The initial report of the examining psychiatrist, Dr. Ramirez, stated:

This is the case of a man 42 years, married, working in the Merchant Marine. This man is in a special situation because he had a trouble with his boss. They had an intense and violent disagreement. His intelligence is normal. Ideas are well coordinated. Reasonable. Emotional normal. Connation normal. Sleep O.K. Diagnostic-normality? Normality apparently in his family.

At the trial Dr. Ramirez testified that the question mark after "Diagnostic-normality?" reflected doubts in his mind about this conclusion, but inasmuch as he had little to go on, he declared the appellant "fit."

The day following this examination Dr. Ramirez received a copy of the Coast Guard report on the appellant and certain letters written by Hendry to the Coast Guard. After seeing these items Dr. Ramirez recommended a further examination, using psychological tests, and appellant was examined by a clinical psychologist at the hospital. Dr. Feuerburgh, the examining clinical psychologist, sent a report to Dr. Ramirez which stated that psychological tests revealed a personality

"with a latent paranoid thinking disorder * * * from the record this is a man who has difficulty in getting along with people * * * we have evidence of a pattern of responses consistent with a paranoid schizophrenic condition * * * (he) does not show the ego defenses to be able to be regarded as now suitable for active duty * * * he should be encouraged to seek psychotherapy."

Upon considering Dr. Feurerburgh's report and the Coast Guard report Dr. Ramirez reviewed his own examination of appellant and this time concluded that appellant was not fit for sea duty and that his case should be reevaluated in six months.

Appellant objected to this conclusion, enlisted the aid of union representatives, and underwent a psychiatric examination by a private psychiatrist. This psychiatrist arrived at a different conclusion about Hendry's "fitness" from that reached by Dr. Ramirez. Thereafter appellant procured a Coast Guard reexamination by the Chief of the Psychiatric Service, Dr. Paul Smith. Dr. Smith's findings, filed on July 6, 1962, were as follows:

"After a complete review of the available documents and the information of all sorts already available in our clinical record, it is my opinion that an appropriate diagnostic label for this man would be a paranoid personality. He shows the sensitivity, the suspiciousness, the stubbornness and the tendency to utilize the mechanism of projection, characteristic of such a personality type. I do not believe however, that his psychological state is disabling at this time nor does it seem likely to become so in the foreseeable future. He is accordingly fit for duty at sea psychiatrically."

As a result of this reexamination report the Coast Guard restored appellant's license to him and he was pronounced fit for sea duty.

The within action was then instituted. Appellant seeks $50,000 in alleged damages caused by the claimed negligence and malpractice of the agents of the United States, Doctors Ramirez and Feuerburgh, professional employees of the U. S. Public Health Service.² Jurisdiction was based on the Federal Tort Claims Act, Title 28 U.S.C. § 1346(b), § 2671 et seq. Hendry claimed that negligent psychiatric examinations by the doctors caused him to lose wages for the period of three and one half months that elapsed during the suspension of his license. He also claimed that, as a result of these negligent examinations, he suffered mental and physical hardship and anguish and was damaged in his reputation.

After the filing of an extensive pretrial order the case was tried in the United States District Court for the Southern District of New York by Judge Pollack sitting without a jury; and after the evidence had been concluded he dismissed the cause for lack of subject matter jurisdiction and, alternatively, gave judgment to the defendant United States on the merits. His opinion is reported at 280 F.Supp. 27 (SDNY 1968). In dismissing the action for lack of jurisdiction the court below relied upon the so-called "discretionary function" exception set forth in the Tort Claims Act, 28 U.S.C. § 2680(a) which reads as follows:

§ 2680 Exceptions.

The provisions of this chapter and section 1346(b) of this title shall not apply to —

(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

In reviewing the decision below we turn first to appellant's claim for lost wages. The district court held that Hendry's claim for wages, to be actionable, must allege a tort recognized by New York law, which applies to federal tort claims by virtue of 28 U.S.C. § 1346(b). The court found that the only New York tort which Hendry's complaint might invoke is that of interference with contractual relations. However, not only did Hendry fail to allege malice as required in such suits, Campbell v. Gates, 236 N.Y. 457, 141 N.E. 914 (1923), but Section 2680(h) of Title 28 expressly bars "any claim arising out of * * * interference with contract rights." Dupree v. United States, 264 F.2d 140 (3 Cir.), rehearing denied, 266 F.2d 373 (3 Cir.), cert. denied, 361 U.S. 823, 80 S.Ct. 69, 4 L.Ed.2d 67 (1959).

Beginning with Judge Cardozo's well-known opinion in Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275, 23 A.L.R. 1425 (1922), New York has been a leader in imposing liability for negligent misrepresentation. In International Products Co. v. Erie R. R., 244 N.Y. 331, 155 N.E. 662, 56 A.L.R. 1377 (1927), the Court of Appeals held that a shipper who justifiably relies on a carrier's false report on the location of the shipper's goods can recover for resulting losses if the carrier was negligent. See Restatement Second of Torts § 552 (Tent.Draft No. 10, 1964). In so deciding the court drew support from a holding that a physician is liable for failure to exercise due care when he is "hired by another, examines a patient, and states the result of his diagnosis." 244 N.Y. at 336, 155 N.E. at 663. For this proposition, the court cited Harriott v. Plimpton, 166 Mass. 585, 44 N.E. 992 (1896), which held:

The fact that the purpose of the doctor\'s examination at the behest of the plaintiff\'s employer was information, and not medical treatment, is immaterial; and the breaking of plaintiff\'s marriage engagement, in consequence of the wrong diagnosis of a venereal disease, was not too remote a damage to sustain the action. Upon the evidence, it was for the jury to say whether the doctor used ordinary care, learning, and diligence.

In light of this it appears to us that if Hendry had been negligently examined and reported on by private physicians he could sustain a claim for lost wages under New York law.

We prefer not to strain to analogize Hendry's allegations to the rather different facts which normally give rise to private actions for interference with contract rights. We are not convinced that the "contract rights" exception to the Federal Tort Claims Act would be meaningless if it were not applied to cases such as this. There may be situations where, for example, an official of the United States maliciously entices away the employees or the customers of a plaintiff, and such activity would be more closely akin to the private torts of interference with...