IN RE" AGENT ORANGE" PRODUCT LIABILITY LITIGATION

Decision Date16 February 1984
Docket NumberNo. MDL 381.,MDL 381.
Citation580 F. Supp. 1242
PartiesIn re "AGENT ORANGE" PRODUCT LIABILITY LITIGATION.
CourtU.S. District Court — Eastern District of New York

COPYRIGHT MATERIAL OMITTED

David J. Dean, Dean, Falanga, Sinrod & Rose, Carle Place, N.Y., Stephen J. Schlegel, Schlegel & Trafelet, Ltd., Chicago, Ill., Thomas W. Henderson, Pittsburgh, Pa., Benton Musselwhite, Houston, Tex., Aaron Twerski, Hempstead, N.Y., of counsel, for plaintiffs.

Leonard Rivkin, Rivkin, Leff, Sherman & Radler, Garden City, N.Y., Philip Pakula, Townley & Updike, Wendell B. Alcorn, Jr., Cadwalader, Wickersham & Taft, William Krohley, Kelley, Drye & Warren, Thomas Beck, Arthur, Dry & Kalish, Richard Goldstein, Shea & Gould, of counsel, David R. Gross, Budd, Larner, Kent, Gross, Picillo & Rosenbaum, New York City, Paul V. Esposito, Lewis, Overbeck & Furman, Chicago, Ill., Morton B. Silberman, Clark, Gagliardi & Miller, White Plains, N.Y., for defendants.

Arvin Maskin, Gretchen Leah Witt, Civ.Div., Dept. of Justice, Washington, D.C., for third-party defendant, United States.

PRETRIAL ORDER NO. 91

PRELIMINARY MEMORANDUM ON GOVERNMENT LIABILITY

WEINSTEIN, Chief Judge.

Plaintiffs, Vietnam war veterans and members of their families, have sued defendant chemical companies to recover damages for injuries allegedly sustained as a result of exposure to Agent Orange in Vietnam. The defendants impleaded the United States under F.R.Civ.P. 14(a), claiming that if they were liable to the plaintiffs, the United States would be liable to them for some or all of the damages they would have to pay. This court, upon motion by the United States, dismissed the third-party complaint, relying upon Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 97 S.Ct. 2054, 52 L.Ed.2d 665 (1977). In re "Agent Orange" Product Liability Litigation, 506 F.Supp. 762 (E.D.N.Y. 1980). No order of dismissal was, however, entered.

Defendants have moved for reconsideration of the dismissal, arguing that (1) the Supreme Court's decision in Lockheed Aircraft Corp. v. United States, ___ U.S. ___, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1983), implicitly overruled Stencel or at least indicated doubt on the Court's part as to its continued vitality and (2) even if Stencel is still good law the doctrine of that case does not apply to the independent claims of the wives and children of the veterans. For the reasons indicated below, upon reconsideration, the government's motion to dismiss the third-party complaint is granted only as to the claims by the veterans and the derivative claims by their family members. The government's motion to dismiss is denied as to the independent claims of the plaintiffs' wives and children.

I. INTRODUCTION

Under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), et seq., the United States waives its sovereign immunity from suits in tort, and vests jurisdiction over such claims exclusively in the United States District Courts. In United States v. Yellow Cab Co., 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523 (1951), the Supreme Court held that, pursuant to the FTCA's language, that the United States is liable "under circumstances where * * * a private person would be liable to the claimant," 28 U.S.C. § 1346(b), the United States may be made a third-party defendant in those situations where a private party could have been impleaded.

Although the FTCA "waives the Government's immunity from suit in sweeping language," United States v. Yellow Cab Co., 340 U.S. at 547, 71 S.Ct. at 402, the waiver is limited by the terms of the Act's exceptions. If a claim falls within any exception to the FTCA, sovereign immunity has not been waived and the court is without jurisdiction to hear the case. United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 1975, 48 L.Ed.2d 390 (1976). One of those exceptions was recognized by the Supreme Court in Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). That case and subsequent cases interpreting it hold that a member of the armed forces cannot sue the government in tort for injuries which "arise out of or are in the course of activity incident to service." Feres, 340 U.S. at 146, 71 S.Ct. at 159. This judicially created exception was based on three grounds:

1. The existence of a separate, uniform, comprehensive no-fault compensation scheme for members of the armed forces administered by the Veterans' Administration, similar in effect to workers' compensation plans;
2. The adverse impact on military discipline and effectiveness were servicepersons allowed to sue the government and;
3. The distinctively federal nature of the relationship between the United States and members of the armed forces which would make it unfair and irrational 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." Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 671, 97 S.Ct. 2054, 2058, 52 L.Ed.2d 665 (1977).
II. CONTINUING VALIDITY OF STENCEL

In Stencel, the Supreme Court held that where Feres barred the serviceman-plaintiff from suing the government directly for his injuries, a defendant who was held liable to the plaintiff for those injuries could not require the United States to indemnify it for any damages it had to pay. The court examined all three legs of Feres and found them as applicable to the impleader action as to a direct suit.

Stencel was the first of several cases dealing with the question of whether the United States may be held liable under the FTCA as a third-party defendant for injuries to a plaintiff government employee when that employee would be barred from suing the United States directly. In those cases, the Supreme Court and the lower federal courts have ground down the rationales of Feres and Stencel to the point where the defendants strongly contend that Stencel's holding is no longer regarded by the Supreme Court as viable.

The first sign of erosion appeared in Weyerhaeuser S.S. Co. v. United States, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed.2d 1 (1963). That case arose out of a collision between a vessel owned by the United States and one owned by Weyerhaeuser. A civilian employee of the United States who was injured in the collision while on board the government vessel recovered damages from Weyerhaeuser which sued the United States to recover the amount it paid. The Supreme Court held that although the employee would have been barred by the Federal Employees' Compensation Act, 5 U.S.C. § 751, et seq., from suing the United States directly, Weyerhaeuser could nonetheless recover from the United States the money it had paid to the employee.

Weyerhaeuser clearly implicated the first leg of Feres in that, like the Veterans' Benefits Act which covered the military serviceman in Feres, the Federal Employees' Compensation Act is a separate, uniform, comprehensive no-fault scheme similar to workers' compensation schemes. Weyerhaeuser was even stronger than Feres, for, unlike the Veterans' Benefits Act, the FECA contains an explicit "exclusivity provision" barring suit by an employee against the United States for injuries compensable under the FECA. Thus, if the existence of the VBA justifies barring a suit against the United States despite the lack of an exclusivity provision, the FECA a fortiori should have. The Supreme Court distinguished Feres, although it did not cite it, by emphasizing the long history of the divided damages rule in mutual fault collision cases in admiralty and concluding that given that history, the divided damages rule was not affected by FECA's exclusive liability provision.

Ionian Glow Marine, Inc. v. United States, 670 F.2d 462 (4th Cir.1982), cert. denied, ___ U.S. ___, 103 S.Ct. 1271, 75 L.Ed.2d 493 (1983), was similar to Weyerhaeuser except that the injured employees were Naval personnel instead of civilians, the United States ship was a naval vessel, and the United States had conceded liability. Unlike Weyerhaeuser, therefore, the military discipline rationale of Feres was implicated, not just the "separate compensation scheme" rationale. The third rationale, the federal nature of the relationship, was, of course, not implicated since, as a suit in admiralty, federal law was applied. Faced with a clash between Weyerhaeuser and the divided damages rule on the one hand and Feres-Stencel on the other, the Fourth Circuit tipped the balance in favor of the former and allowed Ionian to recover from the United States the damages it had paid for injuries to military personnel. The court stated that while "it is ... beyond question that if the present suit were in the form of an indemnity suit under the FTCA it would be barred," since the suit was "a mutual fault collision case in admiralty under the long established rule of divided damages" it is not "affected by the Feres-Stencel Aero doctrine." 670 F.2d at 463.

The defendants rely heavily on the government's brief in Ionian Glow seeking certiorari in which it adverted to "the apparent inconsistency between Feres and Stencel Aero on the one hand, and Weyerhaeuser on the other, as a conflict that only this Court can finally resolve." Petition for a Writ of Certiorari in United States v. Ionian Glow Marine, Inc., at p. 11. Whatever the implication in that brief of the government's concern about undermining Feres, denial of certiorari negates any conclusion about the Supreme Court's conclusion on the matter. Ionian is but a straw in the wind on the issue before us.

Lockheed Aircraft Corp. v. United States, ___ U.S. ___, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1983), also involved a variation on the Weyerhaeuser fact pattern. The difference here was that the government employee, while a civilian, was killed in the crash of a C-5A aircraft while flying out of Saigon, rather than in a naval vessel. The administrator of the employee's estate recovered damages from Lockheed, the manufacturer of the aircraft. Lockheed,...

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