Galimi v. Jetco, Inc.

• Citation: 514 F.2d 949
• Decision Date: 31 March 1975
• Docket Number: No. 601,D,601
• Parties: Salvatore A. GALIMI, Plaintiff, v. JETCO, INC., Defendant-Appellant, and Richard Moore, Defendant. JETCO, INC., Third-Party Plaintiff-Appellant, v. James HODGES, Third-Party Defendant, and United States of America, Third-Party Defendant-Appellee. ocket 74-2425.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 949

514 F.2d 949

Salvatore A. GALIMI, Plaintiff, v. JETCO, INC., Defendant-Appellant, and Richard Moore, Defendant.

JETCO, INC., Third-Party Plaintiff-Appellant, v. James HODGES, Third-Party Defendant, and United States of America, Third-Party Defendant-Appellee.

No. 601, Docket 74-2425.

United States Court of Appeals, Second Circuit.

Argued Jan. 31, 1975.

Decided March 31, 1975.

Lester E. Fetell, Brooklyn, N. Y. (John J. Langan and Sergi & Fetell, Brooklyn, N. Y., of counsel), for third-party plaintiff-appellant.

Douglas J. Kramer, Asst. U. S. Atty., E. D. N. Y. (David G. Trager, U. S. Atty., and Paul B. Bergman, Asst. U. S. Atty., E. D. N. Y., of counsel), for third-party defendant-appellee.

Before MEDINA, OAKES and GURFEIN, Circuit Judges.

GURFEIN, Circuit Judge:

This case presents one of those recurring puzzling situations where a federal statute has met differing interpretations in several circuits on a question that requires legislative resolution but which the Congress has, nevertheless, not yet addressed. The statute involved is Section 7(b) of the Federal Employees Compensation Act (FECA), 5 U.S.C. § 8116(c), the so-called exclusive remedy provision. The issue is whether it cuts off a claim for contribution against the United States by a defendant sued by a government employee, when the defendant asserts that any actionable negligence was the product of joint conduct by itself and the United States.

Appellant Jetco had contracted with the United States to transport buoys from Governor's Island to Burlington, Vermont. Plaintiff Galimi, a civilian employee of the Coast Guard, was injured on September 18, 1972, while loading the buoys onto the truck leased by Jetco. ¹ As a government employee, he applied for and received disability compensation and medical expenses under the FECA, 5 U.S.C. § 8101 et seq. He also sued Jetco and Jetco's driver, Moore, in a diversity action for personal injury caused by defendant's negligence. Jetco in turn filed a third-party complaint against appellee, the United States, alleging that plaintiff Galimi's injury had been caused by the negligence of government employees, including Galimi himself, and seeking contribution or indemnification from the United States should Galimi recover from Jetco.

Upon the government's motion under Fed.R.Civ.P. 12(b)(1) and 12(b)(6), the District Court, Judge Orrin G. Judd, dismissed Jetco's third-party complaint on the ground that the exclusive remedy provision of the FECA precluded Jetco's suit for contribution. He also held that the District Court had no jurisdiction, under the Tucker Act, 28 U.S.C. § 1346(a)(2), over Jetco's suit for contract indemnification unless Jetco was willing to waive any claim in excess of $10,000. Jetco appeals only from that portion of the court's order holding its claim for contribution barred by the FECA. ²

In arguing for reversal, Jetco points out that (1) the United States has waived its immunity from tort liability in the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2674, which provides that the federal government "shall be liable . . . in the same manner and to the same extent as a private individual under like circumstances;" (2) this waiver allows third-party actions for contribution against the United States, United States v. Yellow Cab Co., 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523 (1951); and (3) the Tucker Act provides that in tort cases against the United States, the jurisdiction of the district court is exclusive "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred," 28 U.S.C. § 1346(b). Section 1346(b) has been held to mean that the law applied to a tort claim against the United States is that of the place where the relevant acts took place. United States v. Ridolfi, 318 F.2d 467, 470 (2 Cir. 1963).

Jetco thus contends that New York law governs the issue of contribution and that under the doctrine of Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972), a joint tort-feasor may recover contribution from an employer even where the plaintiff employee is covered by Workmen's Compensation. ³ Jetco also argues that the FECA exclusive remedy provision does not bar its claim against the United States.

The FECA provision, 5 U.S.C. § 8116(c), states:

"The liability of the United States or an instrumentality thereof under this subchapter or any extension thereof with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States or the instrumentality to the employee, his legal representative, spouse, dependents, next of kin, and any other persons otherwise entitled to recover damages from the United States or the instrumentality because of the injury or death in a direct judicial proceeding, in a civil action, or in admiralty, or by an administrative or judicial proceeding under a workmen's compensation statute or under a Federal tort liability statute." (Emphasis added.)

The United States argues that this section eliminates its underlying tort liability to its employees in exchange for providing them with certain benefits in case of injury. It contends that, as a result, the United States cannot be impleaded as a joint tortfeasor by defendant-third-party plaintiffs such as Jetco, since it no longer has any underlying tort liability at all to its plaintiff-employees.

The district court accepted the government's argument. We affirm.

The issue raised by the alleged conflict between the statutory exclusive remedy provisions embodied in most workmen's compensation laws and the doctrines governing third-party suits for contribution or indemnification in personal injury actions is neither new nor limited to the federal sphere. See, e. g., Westchester Lighting Co. v. Westchester County Small Estates Corp., 278 N.Y. 175, 15 N.E.2d 567 (1938). It presents what one author has called "(p) erhaps the most evenly balanced controversy in all of workmen's compensation law." Larson, Workmen's Compensation: Third Party's Action Over Against Employer, 65 Nw.U.L.Rev. 351 (1970). On the one hand, workmen's compensation laws are designed to assure employees that they will receive disability and medical benefits in case of injury. In return, the employer is assured of a fixed liability which is predictable enough so that he may insure against his probable costs. Litigation is avoided, further lowering the price of accidents to the parties and to society. On the other hand, policies underlying doctrines of contribution or tort indemnification are designed to allocate the costs of negligence equitably among joint tortfeasors or to the party primarily responsible. When an employee covered by workmen's compensation sues in negligence a third party who then impleads the employer, there is no way fully to satisfy all policies coming into play.

When the employee works for the United States, the issue is further complicated by the fact that the federal government's liability in tort is a statutory creation, an exception to the general rule that the sovereign is immune from suit. Although the FTCA incorporates the states' common law rules of negligence, 28 U.S.C. § 2674, it also provides for exceptions to those rules, id.; 28 U.S.C. § 2680(a); see, e. g., Hendry v. United States, 418 F.2d 774, 783 (2 Cir. 1969). Congress retains the power to modify the FTCA by means of other statutes. Whether it has done so in the manner asserted by the United States in this case is a question of federal law, separate and prior to the question of employer's liability under state law. Travelers Insurance Co. v. United States, 493 F.2d 881, 883 (3 Cir. 1974).

Although the FECA itself was first passed in 1916, the exclusive remedy provision at issue here was added in 1949 to solve problems created by the passage of legislation such as the FTCA itself, the Public Vessels Act, and the Suits in Admiralty Act in each of which the United States had waived its immunity to various sorts of damage actions. Federal employees had been by-passing the remedies provided by the FECA in order to sue for more substantial recoveries permitted by those acts. The legislative history of the 1949 amendments to the FECA clearly indicates Congress' intent to provide adequate, fixed recoveries to its employees in exchange for their surrender of causes of action under any other statutes. The legislators were concerned with limiting the costs to government of litigating suits and paying substantial damages to its injured employees. S.Rep.No.836, 81st Cong., 1st Sess. 23, 30 (1949); H.Rep.No.729, 81st Cong., 1st Sess. 14, 15 (1949). ⁴

Congress did not make clear, however, whether it also intended to bar suits for contribution or indemnity against the United States by joint tortfeasors.

The exclusive remedy provision of the FECA makes the compensation remedy exclusive for the injured employee, his next of kin and "any other persons otherwise entitled to recover damages from the United States . . . because of the injury or death." This can be read, under the rule of ejusdem generis as including only persons related to the injured person or who claim through him. Wallenius Bremen G.m.b.H. v. United States, 409 F.2d 994, 995 (4 Cir. 1969), cert. denied, 398 U.S. 958, 90 S.Ct. 2164, 26 L.Ed.2d 542 (1970); ⁵ or it can be read literally as including all persons whether or not related to or claiming through the injured employee. Drake v. Treadwell Construction Co., 299 F.2d 789, 790-91 (3 Cir. 1962), vacated and remanded sub nom. Treadwell Construction Co. v. United States, 372 U.S. 772, 83 S.Ct. 1102, 10 L.Ed.2d 136 (1963).

A slightly different approach is to consider the effect of the provision as a whole, rather than the specific language just noted. Under this view, the remedy section, by restricting the employee to a single means of recovering from his...