Cassens v. St. Louis River Cruise Lines, Inc., 94-1832

• Decision Date: 04 January 1995
• Docket Number: No. 94-1832,94-1832
• Parties: Albert CASSENS and Doris Cassens, Plaintiffs, v. ST. LOUIS RIVER CRUISE LINES, INCORPORATED, et al., Defendants-Third/Party Plaintiffs-Appellants, v. UNITED STATES of America, Third/Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 508

44 F.3d 508

1995 A.M.C. 1288

Albert CASSENS and Doris Cassens, Plaintiffs, v. ST. LOUIS RIVER CRUISE LINES, INCORPORATED, et al., Defendants-Third/Party Plaintiffs-Appellants, v. UNITED STATES of America, Third/Party Defendant-Appellee.

No. 94-1832.

United States Court of Appeals Seventh Circuit.

Argued Oct. 7, 1994.

Decided Jan. 4, 1995.

Joel K. Goldstein, Douglas E. Gossow, Gary T. Sacks (argued), Goldstein & Price, St. Louis, MO, for defendants-appellants St. Louis River Cruise Lines, Inc., individually and as general partner of Connelly Group--Missouri, a general partnership dba Gateway Riverboat Cruises, Cruise Lines, Inc., as successor in interest to St. Louis River Cruise Lines, Inc.

Robert L. Simpkins, Asst. U.S. Atty., Office of U.S. Atty., Crim. Div., Fairview Heights, IL, David V. Hutchinson, Keith B. LeTourneau (argued), Dept. of Justice, Torts Branch, Civ. Div., Washington, DC, for defendant-appellee U.S.

Before CUMMINGS, EASTERBROOK and RIPPLE, Circuit Judges.

CUMMINGS, Circuit Judge.

Albert Cassens fell on the stairs between the Texas and Hurricane decks of the Belle of St. Louis ("the Belle"), a Mississippi River excursion cruise boat. The stairs had no handrails. The Belle's owner-operator, St. Louis River Cruise Lines, Inc. ("SLRCLI"), ¹ filed a third-party complaint against the United States based on the Coast Guard's certification of the Belle as "fit for the service intended of carrying passengers and in compliance with applicable regulations," despite the absence of handrails. The issue in this case is whether the United States is amenable to this suit under the Suits in Admiralty Act or whether the district court correctly dismissed the suit for want of jurisdiction under the discretionary function exception to the United States' waiver of sovereign immunity.

Background

The Suit

Plaintiff Albert Cassens, a passenger on the Belle, is suing SLRCLI and others for injuries he suffered as a result of a fall on one of the Belle's stairways. He alleges in his second amended complaint that among other negligent acts and omissions, defendants negligently failed to equip the stairway with handrails.

Defendant SLRCLI, the operator of the Belle, filed a third-party complaint against the United States under the Suits in Admiralty Act ("SAA"), 46 U.S.C. Sec. 742, seeking indemnification or contribution should SLRCLI be found liable to the Cassens. The complaint alleges that the United States Coast Guard is required to inspect passenger vessels, "to make certain that the vessel and its equipment is in satisfactory condition and fit for the service for which it is intended and in compliance with applicable regulations." The complaint further alleges that the Coast Guard had inspected the Belle on numerous occasions before Mr. Cassens' alleged fall and had certified the vessel despite the absence of handrails on the stairwell in question.

The Suits in Admiralty Act ("SAA") and the Discretionary Function Exception

The SAA is a partial waiver of the United States' sovereign immunity. It states in relevant part:

In cases where if such vessel were privately owned or operated, or if such cargo were privately owned or possessed, or if a private person or property were involved, a proceeding in admiralty could be maintained, any appropriate nonjury proceeding may be brought against the United States. ²

46 U.S.C. Sec. 742.

The discretionary function exception is an exception to the waiver of sovereign immunity granted in the Federal Tort Claims Act, 28 U.S.C. Sec. 2680. Though not a part of the SAA, the discretionary function exception is impliedly contained in that waiver of sovereign immunity as well. Bearce v. United States, 614 F.2d 556, 560 (7th Cir.1980), certiorari denied, 449 U.S. 837, 101 S.Ct. 112, 66 L.Ed.2d 44. Under the discretionary function exception, the United States retains its sovereign immunity against

[a]ny claim ... 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.

28 U.S.C. Sec. 2680(a). In fashioning the discretionary function exception, "Congress wished to prevent judicial 'second-guessing' of legislative and administrative decisions grounded in social, economic and political policy through the medium of an action in tort." United States v. Varig Airlines, 467 U.S. 797, 814, 104 S.Ct. 2755, 2765, 81 L.Ed.2d 660 (1983). "[W]hatever else the discretionary function exception may include, it plainly was intended to encompass the discretionary acts of the Government acting in its role as a regulator of the conduct of private individuals." Id. at 813-14, 104 S.Ct. at 2764.

Coast Guard Inspections

The Coast Guard administers a marine vessel inspection program for passenger vessels. The program includes an initial inspection and certification process which is renewed annually. 46 U.S.C. Sec. 3305, "Scope and Standards of Inspection," provides in part:

(a) The inspection process shall ensure that a vessel subject to inspection ...

. . . . .

(5) Complies with applicable marine safety laws and regulations.

46 C.F.R. Sec. 71.25-10 sets the scope for the annual inspections:

(a) The annual inspection shall include an inspection of the structure, boilers, and other pressure vessels, machinery and equipment. The inspection shall be such as to insure that the vessel, as regards the structure, boilers and other pressure vessels, and their appurtenances, piping, main and auxiliary machinery, electrical installations, life-saving appliances, fire-detecting and extinguishing equipment, pilot boarding equipment, and other equipment is in satisfactory condition and fit for the service for which it is intended, and that it complies with applicable regulations for such vessels, and determine that the vessel is in possession of a valid certificate issued by the Federal Communications Commission, if required. The lights, means of making sound signals, and distress signals carried by the vessel shall also be subject to the above-mentioned inspection for the purpose of ensuring that they comply with the requirements of the applicable statutes and regulations.

46 C.F.R. Sec. 71.25-10 (emphasis added). Finally, 46 C.F.R. Sec. 72.05-20(k) provides in pertinent part: "For all types of stairways hand rails shall be fitted on both sides of the stairs."

Analysis

Two requirements must be met for the discretionary function exception to apply. The challenged act must (1) "involv[e] an element of judgment or choice" and (2) be "based on considerations of public policy." United States v. Gaubert, 499 U.S. 315, 322-23, 111 S.Ct. 1267, 1274, 113 L.Ed.2d 335. The first requirement will ordinarily not be met when "a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow." Berkovitz v. United States, 486 U.S. 531, 536, 108 S.Ct. 1954, 1958, 100 L.Ed.2d 531.

SLRCLI argues that under Berkovitz, the most recent Supreme Court case to limit the scope of the discretionary function exception with respect to regulatory activities, the Coast Guard's inspection program falls outside the exception. SLRCLI contends that the statutory and regulatory language cited above, which dictates that the Coast Guard "shall ensure [compliance]" and also requires handrails, establishes a "course of action" for Coast Guard inspectors such that judgment is not a factor and the discretionary function exception does not apply.

Although it provides useful guidance, Berkovitz does not dictate the result here. That suit, brought on behalf of a 2-month-old infant who was left almost completely paralyzed after taking an oral polio vaccine, alleged that the Division of Biological Standards ("DBS"), then a part of the National Institutes of Health, and the Food and Drug Administration ("FDA") acted wrongfully in approving for release to the public the particular lot of vaccines containing the Berkovitz child's dose. The plaintiff in Berkovitz made two claims. The first was that the DBS issued a product license for the vaccine without first obtaining test data from the manufacturer. This claim was not barred by the discretionary function exception because the DBS had "no discretion to issue a license without first receiving the required data; to do so would violate a specific statutory and regulatory directive." Id. at 542-43, 108 S.Ct. at 1962. SLRCLI does not argue under this prong of Berkovitz--whatever the alleged shortcomings of the Coast Guard's inspection, no one disputes that inspectors at least boarded the boat and did some inspecting before the certificate was issued.

The second claim in Berkovitz, on which SLRCLI more aptly relies, was that the DBS licensed the vaccine even though it did not comply with certain regulatory safety standards. The Supreme Court pointed out that there were three ways in which this claim could be understood: (1) the DBS licensed the vaccine without first determining compliance, (2) the DBS licensed the vaccine knowing that it did not comply, and (3) the DBS made an erroneous determination of compliance. The court held that if (1) or (2) were the proper understanding of plaintiff's claim, then the discretionary function exception would not apply. Id. at 544, 108 S.Ct. at 1962-63. If (3) was the proper understanding of the plaintiff's claim, however, then the applicability of the discretionary function exception would turn "on whether the manner and method of determining compliance with the safety standards at issue involve agency judgement of the kind protected by the discretionary function exception." Id. at 545, 108 S.Ct. at 1963. The Supreme Court left it to the district court on remand to determine this issue, if the plaintiff chose to press the second claim.

SLRCLI's claim is clearly of the third variety--that the Coast Guard made an erroneous determination of...