General Elec. Co. v. U.S.

• Citation: 813 F.2d 1273
• Decision Date: 12 March 1987
• Docket Number: No. 86-2041,86-2041
• Parties: GENERAL ELECTRIC COMPANY, Plaintiff-Appellant, v. UNITED STATES of America; Andrew W. Klassett; Philip H. Welty, Jr.; Thomas J. Vegella; Raymond Mullinix and John Anthony Vilgos, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1273

813 F.2d 1273

GENERAL ELECTRIC COMPANY, Plaintiff-Appellant, v. UNITED STATES of America; Andrew W. Klassett; Philip H Welty, Jr.; Thomas J. Vegella; Raymond Mullinix and John Anthony Vilgos, Defendants-Appellees.

No. 86-2041.

United States Court of Appeals Fourth Circuit.

Argued Nov. 10, 1986.

Decided March 12, 1987.

Edward C. Mackie (Patrick G. Cullen; Rollins, Smalkin, Richards & Mackie, on brief), for plaintiff-appellant.

Richard K. Willard, Asst. Atty. Gen. (Breckinridge L. Willcox, U.S. Atty., John F. Cordes, Carlene V. McIntyre, Appellate Staff Attys., Dept. of Justice) for defendants-appellees.

Before RUSSELL and HALL, Circuit Judges, and ROBERT G. DOUMAR, United States District Judge for the Eastern District of Virginia, sitting by designation.

PER CURIAM:

Two employees of the National Institutes of Health (NIH) were injured while repairing an electrical transformer manufactured by the General Electric Company (General Electric). One of the employees died as a result of his injuries. The surviving employee and the deceased employee's wife filed suit against General Electric on theories of negligence, breach of warranty and strict liability; this suit was ultimately settled. General Electric then filed a third-party action seeking to hold the United States and five individual defendants liable for indemnity and contribution on the theory that the defendants had negligently failed to promulgate or adhere to safety regulations applicable to electrical transformers.

The District Court dismissed the claim against the United States, and entered summary judgment in favor of the individual defendants. General Electric appealed those decisions. This Court hereby affirms the decision of the district court.

I. Factual Background and Proceedings Below

On July 27, 1982, James Layman and Lloyd Thompson, high-voltage electricians employed by NIH were injured by a short circuit while they were replacing transistors in a transformer designed and manufactured by General Electric. Mr. Thompson died of his injuries approximately one month later. Mr. Layman was permanently injured and disfigured.

As Thompson and Layman were injured in the course of their federal employment, they received workers' compensation benefits under the Federal Employees' Compensation Act (FECA), 5 U.S.C. Sec. 8101-8151. In addition, Thompson's wife and Layman and his wife filed suit against General Electric in the United States District Court in Maryland alleging that the injuries had been caused by the defective design of the transformers. General Electric settled that suit and then brought the instant third-party action for indemnity and contribution against the United States pursuant to the Federal Tort Claims Act (FTCA), 28 U.S.C. Secs. 1346(b), 2671-2680, and against five individual NIH employees, alleging diversity jurisdiction. General Electric alleged that the United States, and the individual defendants, who are NIH supervisors and administrators, failed to exercise due care to ensure the safety of the injured employees, and that the injuries were a direct result of the negligence of the defendants.

On February 21, 1985, the District Court dismissed General Electric's claims against the United States on the grounds that state law, which governs in a case brought pursuant to the FTCA, precludes third-party actions for contribution or indemnity against a private employer that has provided compensation for its employees in accordance with the Maryland Workmen's Compensation Act.

On March 13, 1986, the District Court granted the individual defendants' motion for summary judgment. The District Court held that the individuals were "[g]overnment officials [who] are immune from civil tort suits arising out of events which are within the scope of their employment." Joint Appendix, at 254-55. The court held that the negligent acts alleged to have been committed by the individual defendants occurred within the scope of their government employment, Joint Appendix, at 268, and that the individual defendants therefore were not subject to common-law liability for their negligence.

General Electric appealed both decisions to this Court. We affirm.

II. Immunity of the United States

The District Court correctly held that the United States was immune from appellant's claims for contribution and indemnity. General Electric's claim against the United States was brought pursuant to the FTCA. The FTCA is a limited waiver of sovereign immunity which grants the federal district courts exclusive jurisdiction over suits for money damages against the United States for "personal injury or death caused by the negligent act or omission of any employee of the government while acting within the scope of his office or employment, 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. Sec. 1346(b). Thus, as a general rule, the tort liability of the United States is determined by reference to the law of the state in which the act or omission occurred. The accident which was the basis of the original suit against General Electric occurred in Bethesda, Maryland; hence, Maryland law controls the liability of the United States for contribution or indemnity.

The District Court held that the United States would not have been liable under state law, because it was exempt from liability under the Maryland Workmen's Compensation Statute, Md.Ann.Code art. 101, Secs. 1-102. The statute provides that employers who comply with its provisions for the compensation of injured employees and their dependents are not subject to common-law liability. Id. Sec. 15. Should the employer fail to provide compensation in accordance with the statute, the injured employee or his legal representative may bring suit for the amount of compensation prescribed by statute or may seek an award of common-law damages. Id.

The question presented by these facts is whether a private employer, under like circumstances, ¹ could be liable for contribution or indemnity under Maryland law. The United States complied with the FECA, the federal law that provides workers' compensation to federal employees. A similarly situated private employer, then, would not comply with FECA, but would comply with the state worker's compensation law. Thus, a private employer "in like circumstances" would have complied with the Maryland Workers' Compensation statute. In Re All Maine Asbestos Litigation (PNS Cases), 772 F.2d 1023, 1028 (1st Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 1994, 90 L.Ed.2d 675 (1986). A private employer that had contributed to the Maryland Worker's Compensation program would be entitled to invoke the exclusivity provision of that statute to bar third-party claims for contribution and/or indemnity like that advanced by General Electric. The statute provides, in pertinent part:

Every employer subject to the provisions of this article, shall pay or provide as required herein compensation according to the schedules of this article for the disability or death of his employee resulting from an accidental personal injury sustained by the employee arising out of and in the course of his employment without regard to fault as a cause of such injury The liability prescribed by the last preceding paragraph shall be exclusive, except that if an employer fails to secure the payment of compensation for his injured employees and their dependents as provided in this article, an injured employee or his legal representative in case death results from the injury, may, at his option, elect to claim compensation under this article, or to maintain an action in the court for damages on account of such injury.

Md.Ann.Code art. 101, Sec. 15. The effect of this provision is to make the complying employer immune from common-law suits for negligence, because "the Workmen's Compensation Act is a substitute for the employer's common-law liability for negligence, subject to his common law defenses, and creates an absolute, but limited, liability regardless of fault, such liability upon a conforming employer being exclusive." Flood v. Merchants Mutual Insurance Co., 230 Md. 373, 187 A.2d 320, 322 (Md.1963) (citations omitted).

Section 15 also prohibits a third party who was held liable to the injured employee from suing the employer for contribution. Mason v. Callas Contractors, Inc., 494 F.Supp. 782, 784 (D.Md.1980) (citing Baltimore Transit Co. v. State, 183 Md. 674, 39 A.2d 858 (1944)). In the latter case, the Maryland Court of Appeals prohibited the defendant from impleading the plaintiff's employer (the City of Baltimore) on the grounds that the employer's liability was limited by the exclusivity provision of the workers' compensation act and stated that "[t]he employer should not be held liable indirectly in an amount that could not be recovered directly, for this would run counter to one of the fundamental purposes of the compensation law." Baltimore Transit Co., 39 A.2d at 861.

This Court finds that a similarly situated private employer would be immune from common law damage suits arising out of injuries negligently inflicted on its employees. The United States, by virtue of its compliance with the applicable worker's compensation law, FECA, is entitled to claim the same immunity. ² To hold otherwise would be to place the United States in a position less favorable than that of any private employer under the Maryland statute. It would be to allow the State of Maryland to compel the United States to comply with state workers' compensation law, which it lacks the power to do. Gianuzzi v. Doninger Metal Products, 585 F.Supp. 1306, 1309 (W.D.Pa.1984). See also Griffin v. United States, 644 F.2d 846, 847 (10th Cir.1981). Finally, it would discourage the United States from providing compensation for its injured employees and their dependants pursuant to the more...