Keene Corp. v. U.S.

• Decision Date: 10 February 1983
• Docket Number: No. 32,D,32
• Citation: 700 F.2d 836
• Parties: KEENE CORPORATION, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. ocket 82-6023.
• Court: U.S. Court of Appeals — Second Circuit

Page 836

700 F.2d 836

KEENE CORPORATION, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 32, Docket 82-6023.

United States Court of Appeals, Second Circuit.

Argued Oct. 1, 1982.

Decided Feb. 10, 1983.

Eugene R. Anderson, New York City (Anderson, Russell, Kill & Olick, P.C., New York City, Irene C. Warshauer, Marcy Louise Kahn, Frederic L. Neustadt, Daniel N. Sang, New York City, of counsel), for plaintiff-appellant.

David M. Jones, Asst. U.S. Atty., Southern District of New York, New York City (John S. Martin, Jr., U.S. Atty., Southern District of New York, Peter C. Salerno, Asst. U.S. Atty., Southern District of New York, New York City, of counsel), for defendant-appellee.

Before LUMBARD, OAKES and WINTER, Circuit Judges.

WINTER, Circuit Judge:

Keene Corporation appeals from a judgment dismissing its complaint for lack of subject matter jurisdiction entered by Judge Gerard L. Goettel, United States District Court for the Southern District of New York. The gravamen of Keene's complaint is that the United States is liable under various legal theories for the costs of more than 14,000 ¹ personal injury and wrongful death actions against Keene, arising from occupational exposure to asbestos fibers contained in thermal insulation products manufactured or sold by a Keene affiliate. ² On appeal, Keene urges that jurisdiction over this action exists under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. Secs. 1346(b) and 2671-2680 (1976) or, alternatively, under the general maritime and admiralty jurisdiction of the United States, 28 U.S.C. Sec. 1333 (1976), the Suits in Admiralty Act, 46 U.S.C. Secs. 741-752 (1976), the Extension of Admiralty Jurisdiction Act, 46 U.S.C. Sec. 740 (1976), and the Public Vessels Act, 46 U.S.C. Secs. 781-790 (1976). ³

Keene's amended complaint alleges that the United States is liable to it for all costs arising out of the more than 14,000 actions. However, it has made no attempt to categorize the actions against it on the basis of individual characteristics, such as the role played by the United States, the employment relationship of the claimants, the circumstances under which they came into contact with asbestos, or the theory or theories of liability. Some of Keene's allegations, moreover, use terms such as "most" or "typically" in describing the actions against it.

For example, the complaint alleges that the government played the following roles relating to the actions against it: a seller of asbestos fiber, a purchaser of asbestos insulation, a designer or specifier of insulation products, an employer of the claimants or their employers, an inspector of the claimants' workplace, and a promulgator and enforcer of health regulations. In the case of any particular claim against Keene, however, the government may have played only one of these roles. Similarly, Keene alleges only that "most" of the claimants were "either employees of the defendant working in U.S. naval shipyards or employees working in private shipyards under contract to Keene has denied the allegations of all 14,000 complaints and has not yet been subjected to a final judgment of liability. It has, however, settled some of the claims and incurred expenses in the defense of others. Relying upon the doctrines of indemnification, contribution and apportionment, Keene argues that the government is liable for any and all damages it may sustain as a result of the lawsuits against it.

                the U.S. Navy, an agency of the United States."    According to Keene, the claimants "typically" assert that they worked with or around thermal insulation products bearing asbestos and that in the course of their work, they were exposed to and inhaled air-borne asbestos fibers, causing asbestosis or other injuries.  "Typically," the complaint alleges, the workers were involved in shipyards, some working on shipboard, some on land, while still others were exposed to asbestos in the course of installing insulation in "power plants and other industrial and commercial plants, including refineries."    The government sold Keene some of, but apparently not all, the asbestos used in its products, and Keene's asbestos-containing products were sold under contract both to the government and to others.  On the basis of these allegations, Keene asserts against the United States twenty-three causes of action, sounding in negligence, breach of warranty, strict liability, and unjust enrichment
                

The unusual nature of the complaint and the legal problems it raises stem from the sheer volume and diversity of claims brought against Keene. Keene's counsel asserts, and we have no reason to doubt it, that Keene simply cannot afford to hire local counsel and defend each case in the many state and federal judicial districts in which actions have been brought against it. Presumably, it also cannot afford the discovery necessary to analyze and categorize each action so that some semblance of order can be brought to its complaint or even to implead the government as a third party defendant in actions pending in federal district courts.

As the complaint before us stands, potentially dozens of materially different factual combinations are within its allegations. Looking at the more specific allegations, the government may have played at least six different roles involving at least three different categories of claimant/employees, who came into contact with Keene asbestos products in at least three different work settings. Some of Keene's products were sold to the government, some to others. Some were manufactured with asbestos purchased from the government, some with asbestos purchased elsewhere. The complaint is not limited even to these variables, however, since the words "most" and "typically" strongly imply the existence of actions with other factual patterns. Twenty-three separate causes of action against the government are alleged.

The complaint thus literally alleges dozens of factual combinations, e.g., (1) The government purchased insulation from Keene containing asbestos procured from a private producer; the insulation was used in a private shipyard under contract to the government where employees of the shipyard were in contact with it on land; (2) A refinery purchased insulation from Keene containing asbestos procured from a private producer; employees of the refinery came into contact with it in circumstances covered by government health regulations; (3) A refinery purchased insulation from Keene containing asbestos purchased from the government; employees of the refinery came into contact with it; (4) A factory purchased insulation from Keene containing asbestos procured from a private producer; the product used asbestos pursuant to government specifications and employees of the factory came into contact with it; and so on. Each combination of facts, moreover, may raise a different legal issue so far as to the government's liability to Keene or our jurisdiction is concerned.

Were this an action against a private party, the sufficiency of the notice given by the complaint would obviously be a serious issue. Since the United States is the defendant, however, and actions against it are permissible only where sovereign immunity

has been waived, we must first address the government's challenge to our jurisdiction. We agree with Judge Goettel, whose efforts in reducing this suit to order we much appreciate, that "Keene has attempted to do too much at one time, with too little jurisdiction," Keene Corp. v. United States, No. 80 Civ. 401, mem. op. at 22 (S.D.N.Y. Sept. 30, 1981). We affirm his dismissal of the complaint for substantially the reasons stated in his opinion.

FEDERAL TORT CLAIMS ACT

The Federal Tort Claims Act, 28 U.S.C. Secs. 1346(b) and 2671-2680, requires that a claimant against the federal government file an administrative claim with the appropriate agency prior to institution of suit. Thus, 28 U.S.C. Sec. 2675(a) provides in pertinent part:

An action shall not be instituted upon a claim against the United States for money damages for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail.... The provisions of this subsection shall not apply to such claims as may be asserted under the Federal Rules of Civil Procedure by third party complaint, cross-claim, or counterclaim.

Keene contends that it has met the administrative filing requirements or, alternatively, that no administrative filing was necessary because its suit is "in the nature of a third party action."

In September 1978, Keene filed a Notice of Claim with eight federal agencies; ⁴ four months later, in January 1979, it filed an Amended Notice of Claim. ⁵ The Amended Notice contained a list of lead plaintiffs and docket numbers for roughly a thousand lawsuits. ⁶ It described the claims against Keene as contending generally that the company had sold products containing asbestos fiber without adequate warning of the dangers posed by asbestos and stated that "[m]any if not all of the Asbestos Claims against Keene arise out of the primary fault of United States of America." The Amended Notice stated five separate claims based on (1) the government's role as supplier of asbestos; (2) its role as employer of shipyard workers who were exposed to asbestos fibers on the job; (3) the government's failure to take precautions or warn workers regarding the dangers of asbestos after it required the use of asbestos in insulating products it purchased; (4) the failure of the government to make safety inspections of facilities using asbestos; and (5) "any other theory that will support a claim against the United States...