United Scottish Ins. Co. v. U.S.

• Decision Date: 29 November 1979
• Docket Number: Nos. 76-2813,s. 76-2813
• Parties: UNITED SCOTTISH INSURANCE COMPANY et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. Kathleen M. FLEMING et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. Simone C. WEAVER et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. John William DOWDLE, Jr., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. Maxine CEARLEY et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. to 76-2817.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 188

614 F.2d 188

UNITED SCOTTISH INSURANCE COMPANY et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Kathleen M. FLEMING et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Simone C. WEAVER et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

John William DOWDLE, Jr., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Maxine CEARLEY et al., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Nos. 76-2813 to 76-2817.

United States Court of Appeals, Ninth Circuit.

Nov. 29, 1979.

Rehearing Denied Feb. 11, 1980.

Joseph T. Cook, Asst. U. S. Atty., Torts Section, Washington, D.C., for United States.

Richard F. Gerry, Casey, Gerry, Casey & Westbrook, San Diego, Cal., argued for plaintiffs-appellees; James H. Miller, Greer, Popko, Cornblum & Miller, San Diego, Cal., on the brief.

Appeal from the United States District Court for the Southern District of California.

Before HUFSTEDLER and WALLACE, Circuit Judges, and WHELAN, ^* District Judge.

WALLACE, Circuit Judge:

The government appeals from a district court judgment awarding damages in an action brought against it pursuant to the Federal Tort Claims Act (the Act), 28 U.S.C. §§ 1346(b), 2671-80, alleging that the Federal Aviation Administration (FAA) negligently inspected an aircraft which subsequently crashed. The government contends, among other things, that the Act does not provide for liability in this type of case. Because we conclude that the district judge neglected to make findings which are a prerequisite to liability pursuant to the Act under the circumstances of this case, we reverse and remand for further proceedings.

I

The consolidated actions that constitute this appeal arose out of an air crash which occurred on October 8, 1968, at McCarran Field at Las Vegas, Nevada. All four occupants of the aircraft, the pilot, co-pilot, and two passengers, were killed in the disaster. The plaintiffs in the district court, appellees here, are Dowdle, owner and operator of the air taxi service; Catalina-Vegas Airlines, that operated the ill-fated aircraft; the Weavers, widow and children of co-pilot Vernon Weaver; the Cearleys, widow and children of passenger Charles Cearley; the Flemings, children of passenger Katherine Fleming; and a number of insurance companies which provided liability coverage to Dowdle.

In July and August 1965, Aerodyne Engineering Corporation of Dallas, Texas, pursuant to the request of Air Wisconsin, an air taxi operator in Wisconsin, installed gasoline fueled heaters in two of Air Wisconsin's aircraft. Both were DeHavilland Doves. The aircraft that eventually was to crash bore United States registration No. N4040B (40B), and her sister craft bore United States registration No. N4041B (41B).

FAA regulations, 14 C.F.R. Part 21.E, required that Aerodyne acquire a Supplemental Type Certificate (STC) from the FAA for this type of installation. The parties agree that FAA regulations also required that the FAA inspect the installation prior to giving its approval for issuance of the STC. The FAA issued the STC, and the aircraft were returned to Air Wisconsin for service.

Dowdle purchased both 40B and 41B from Air Wisconsin during the winter of 1966-67. He evidently used them in various air taxi operations, and during that time, both aircraft underwent numerous annual and 100 hour inspections until October 8, 1968, when 40B crashed.

The district court found the United States liable to all plaintiffs on the basis that the FAA had negligently inspected the aircraft in 1965 prior to issuance of the STC, and that this negligent inspection proximately caused the in-flight fire aboard and crash of 40B, and thus the damages suffered by all plaintiffs.

The government asserts a number of errors, each of which it claims requires reversal of either some or all of the district court's judgment. First, the government reminds us that the Act gives district courts jurisdiction to award damages against the government only when a private individual could be held liable pursuant to state law in like circumstances. See, e. g., Thompson v. United States, 592 F.2d 1104, 1107 (9th Cir. 1979); 28 U.S.C. § 1346(b). ¹ The government asserts that the violation of FAA regulations cannot serve as a basis for liability where the United States' role is simply in the nature of a safety inspection and approval because there is no analogous "private person" liability for such activity. The government's second argument, which also raises a jurisdictional question, is that the plaintiffs are asserting a "claim arising out of . . . misrepresentation," thus falling within the exception to section 1346(b) jurisdiction established in 28 U.S.C. § 2680(h). Finally, the government asserts that the district court was clearly erroneous when it (a) failed to find contributory negligence as to the claim of Dowdle and the subrogation claims of the insurance companies; and (b) found that the defective fuel line to the combustion heater in 40B proximately caused the crash. Because of our resolution of the government's first contention, we do not reach the other issues that the government tenders for our decision.

II

The government asserts a number of grounds for its belief that the district judge incorrectly found that the regulations in question could serve as the basis for liability. First, it contends that the sole authority relied upon by the district court for this proposition, Arney v. United States, 479 F.2d 653 (9th Cir. 1973), addresses this question in dicta only and, in any event, should not be relied upon. The government observes that Arney arose in admiralty and is not definitive on the question of liability pursuant to the Act. In addition, the government suggests that relevant authority both inside and outside of this circuit runs contrary to the approach taken in Arney, and that we should therefore overrule that case.

We disagree with the contention that Arney contains only dicta on the question whether any governmental liability can arise out of a breach of FAA regulations. In Arney, a federal district court had granted summary judgment on grounds that individual plaintiffs who violated FAA regulations were contributorily negligent as a matter of law. Id. at 657. We held that summary judgment was inappropriate because, under the applicable state law, negligence per se creates a rebuttable presumption only and is not conclusive on the trier of fact. Id. At the same time, however, we stated that summary judgment would be appropriate unless the resisting party had presented "at least one viable theory of law under (his) asserted version of the facts that would, if true, entitle the opponent of the motion to judgment as a matter of law." 479 F.2d at 661. We concluded that plaintiffs had stated at least one valid theory in their claim against the government for alleged negligent certification of a modified fuel system. Id. Thus, our more general conclusion that "the government may be liable for negligence in improper issuance of a type airworthiness certificate," Id. at 658, was ultimately necessary to the decision in the case.

The government next contends that in Arney we relied only upon Rapp v. Eastern Air Lines, Inc., 264 F.Supp. 673 (E.D.Pa.1967), which is no longer valid authority. ² Since the sole case upon which Arney rests now lacks vitality, the government argues that Arney should not bind us. We disagree. The government misunderstands the significance of our reliance upon Rapp. While in Arney we chose to rely upon Rapp, we were, of course, not bound to do so. We rely upon non-binding decisions only when we believe that the reasoning provides some support for what we conclude to be the correct analysis or result. See United States v. Safeway Stores, Inc., 252 F.2d 99, 101 (9th Cir. 1958) (per curiam). That Rapp is no longer case authority in no way undermines the precedential value of Arney in this circuit.

The government next attempts to demonstrate why, assuming that Arney represents the law of this circuit, we should reconsider and overrule that decision. This argument is misplaced. As in other circuits, See United States v. Kirk, 528 F.2d 1057, 1063 (5th Cir. 1976), three-judge panels of the Ninth Circuit will abide by a prior Ninth Circuit panel decision until either the United States Supreme Court or the Ninth Circuit, sitting en banc, explicitly or implicitly overrules it.

While the government has cited authority from other circuits and from district courts, and even cases from this circuit in which federal laws or regulations have not been found to create a duty of due care in the government, See Harmsen v. Smith, 586 F.2d 156, 157-58 (9th Cir. 1978); Kirk v. United States, 270 F.2d 110, 117-18 (9th Cir. 1959), we do not find those cases to be persuasive on the precise issue before us. Arney did not go so far as to hold that a duty of due care would necessarily arise directly out of FAA regulations. Rather, we stated there only that the government "may be liable for negligence in improper issuance of a type airworthiness certificate." 479 F.2d at 658. Because we were reviewing summary judgments, we had no opportunity to elaborate on a fully developed record. Thus, we held only that the plaintiff's factual allegations would support a cause of action for such negligence. See id. at 661. We did not indicate what all of the elements of such a cause of action might be.

Finally, the government suggests that Arney should not be determinative here because that case was brought pursuant to the admiralty jurisdiction of the district court, See 479 F.2d at 655, rather than pursuant to the Act. Although Arney is not inapplicable for this reason, the government's statement has some merit. Any action brought pursuant to the Act must meet the Act's particular statutory prerequisites for government liability. Thus, while the government May...