Berry v. Federal Prison Industries, Inc.

• Decision Date: 17 November 1977
• Docket Number: No. C-75-2300-CBR.,C-75-2300-CBR.
• Citation: 440 F. Supp. 1147
• Court: U.S. District Court — Northern District of California
• Parties: William Clyde BERRY, III, Plaintiff, v. FEDERAL PRISON INDUSTRIES, INC., United States Bureau of Prisons, Accident Compensation Committee, and Edward Levi, Attorney General of the United States, Defendants.

440 F. Supp. 1147

William Clyde BERRY, III, Plaintiff, v. FEDERAL PRISON INDUSTRIES, INC., United States Bureau of Prisons, Accident Compensation Committee, and Edward Levi, Attorney General of the United States, Defendants.

No. C-75-2300-CBR.

United States District Court, N. D. California.

November 17, 1977.

William Wood Merrill, Santa Clara, Cal., for plaintiff.

James L. Browning, Jr., U. S. Atty., Paul J. Fitzpatrick, Asst. U. S. Atty., San Francisco, Cal., for defendants.

MEMORANDUM OF OPINION

RENFREW, District Judge.

For the third time, defendants have moved to dismiss this action for lack of subject matter jurisdiction. Plaintiff seeks a declaratory judgment and an order reversing the decision of defendant Accident Compensation Committee denying his claim for compensation for injuries allegedly suffered while participating in a work program under the supervision and control of defendant Federal Prison Industries, Inc. The first motion to dismiss resulted in dismissal with leave to amend and the filing of an amended complaint alleging jurisdiction under 5 U.S.C. §§ 701-706 and 18 U.S.C. § 4126. A second motion was denied by order of November 10, 1976, in which the Court, in accordance with recent decisions of the Court of Appeals for the Ninth Circuit, found that subject matter jurisdiction was properly based upon the judicial review provisions of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706. On February 23, 1977, the Supreme Court of the United States overturned those decisions, holding that the APA is not to be interpreted as an independent grant of jurisdiction. Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192, 45 U.S.L.W. 4209 (1977). Relying on Califano, defendants renewed their motion to dismiss. Arguments on the renewed motion were heard October 6, 1977. For the reasons set forth below, the Court concludes that the motion must again be denied.

As the Supreme Court noted in Califano v. Sanders, supra, suits challenging the actions of federal officials acting pursuant to federal law generally arise under federal law, and, subject to preclusion-of-review statutes, are now cognizable under 28 U.S.C. § 1331(a) without regard to the amount in controversy. 430 U.S. at 105-106, 97 S.Ct. 980; 28 U.S.C. § 1331(a), as amended, Act of Oct. 21, 1976, Pub.L. No. 94-574, § 2, 90 Stat. 2721.¹ In this case, it is the application of the federal statute and regulations authorizing payment of compensation to inmates for injuries suffered in the course of prison employment, 18 U.S.C. § 4126, 28 C.F.R. Pt. 301 (1976), that gives rise to the action. The principal issues for decision will be governed by those same provisions, under a standard of review prescribed by another federal statute, the APA. 5 U.S.C. § 706. Under these circumstances, it cannot be denied that the action arises under federal law within the meaning of 28 U.S.C. § 1331(a). See C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3568, at 464-465 (1975); cf. Empresa Hondurena de Vapores, S.A. v. McLeod, 300 F.2d 222, 226-227 (2 Cir. 1962), vacated on other grounds, McCulloch v. Sociedad Nacional, 372 U.S. 10, 83 S.Ct. 671, 9 L.Ed.2d 547 (1963); Marquez v. Hardin, 339 F.Supp. 1364, 1370 (N.D.Cal.1969). Since defendants are agencies and officers of the United States, no allegation of jurisdictional amount is necessary. 28 U.S.C. § 1331(a).

The only remaining question is whether review is barred by section 10 of the APA, either because the challenged action is committed to agency discretion by law or because a statute precludes review. 5 U.S.C. § 701(a). In its November 10 order, this Court found that neither of the specified conditions obtains in this case. At oral argument on the renewed motion, however, counsel for defendants urged the Court to reconsider its conclusion that 18 U.S.C. § 4126 is no bar to judicial review. After careful consideration of that statute, its legislative history, and the regulations promulgated pursuant thereto, the Court has been unable to find the clear and convincing evidence of congressional intent to preclude review that is necessary to overcome the presumption of reviewability. Dunlop v. Bachowski, 421 U.S. 560, 567, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975); Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); Rothman v. Hospital Service of Southern California, 510 F.2d 956, 958 (9 Cir. 1975).

Although no court has expressly addressed the questions raised by defendants here, at least three courts have stated that review on the merits of compensation decisions made pursuant to § 4126 is proper. Thompson v. United States Federal Prison Industries, 492 F.2d 1082 (5 Cir. 1974); Durham v. Federal Prison Industries, 464 F.2d 1026 (5 Cir. 1972) (per curiam); Davis v. United States, 415 F.Supp. 1086, 1088 (D.Kan.1976); Saladino v. Federal Prison Industries, 404 F.Supp. 1054, 1056 (D.Conn. 1975). Nothing in the language or legislative history of § 4126 provides any evidence to the contrary.² Indeed, neither the committee reports nor the congressional debates on the bill that established the workmen's compensation remedy, H.R. 9404, 73d Cong., 2d Sess. (1934), mention that remedy at all. The attention of Congress was occupied exclusively by the threat to free labor posed by prison industries and the need to create a new corporate body to administer such industries. See H.R.Rep. No. 1421, 73d Cong., 2d Sess. (1934); S.Rep. No. 1377, 73d Cong., 2d Sess. (1934); 78 Cong.Rec. 10150-10171 (1934); 79 Cong.Rec. 11304-11305 (1934); 80 Cong.Rec. 11669, 11778, 11980 (1934).

Nor do the inmate accident compensation regulations promulgated pursuant to § 4126 make any reference to judicial review. 28 C.F.R. Pt. 301 (1976), as amended, 41 Fed. Reg. 55710. The regulation on exclusivity of remedy, cited by defendants, 28 C.F.R. § 301.27, states only that inmates protected by the accident compensation laws are barred from recovery under the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680, as required by United States v. Demko, 385 U.S. 149, 87 S.Ct. 382, 17 L.Ed.2d 258 (1966). That the compensation statute is an exclusive remedy in this sense has no bearing on the availability of judicial review to an inmate who has pursued that remedy.

The record is thus devoid of any evidence that either Congress or the officials charged with administering the statute have even considered the question of judicial review, much less possessed the affirmative intent to bar it. Defendants argue, however, that the Congress which enacted § 4126 could not have intended to grant prisoners a remedy available neither to federal employees protected by the Federal Employees' Compensation Act, ("FECA"), 5 U.S.C. §§ 8101-8173, nor, at that time, to citizens in general,³ i. e., access to the courts for consideration of their claims for personal injury. Again, the language of § 4126 is of little assistance. Although the statute expressly limits the amounts of prisoner awards to those available under the FECA, there is no suggestion that procedural remedies are to be similarly limited. More significantly, the provision barring judicial review under the FECA, 5 U.S.C. § 8128(b), was not enacted until 1945. Act of July 28, 1945, Ch. 328, § 4, 59 Stat. 504. In 1934, the only language dealing with external review of federal employee compensation awards read as follows:

"In the absence of fraud or mistake in mathematical calculation, the finding of facts in, and the decision of the commission upon, the merits of any claim presented under or authorized by this Act if supported by competent evidence shall not be subject to review by any other administrative or accounting officer, employee, or agent of the United States." Act of June 5, 1924, Ch. 261, § 1, 43 Stat. 389.

It is not clear that this language applied to judicial review at all, but even if it did, there was no absolute bar. At least some questions—fraud, mathematical error, sufficiency of the evidence—could plainly have been raised. Thus, Congress' failure to bar review under § 4126 created no inconsistency in this regard. And since both federal compensation laws expressly created an administrative remedy for individuals employed by the government at a time when no remedies against the United States were available to members of the general public, the availability of judicial review pursuant to those schemes created no further anomaly.

Of course, a scheme...