Milai v. Tradewind Industries, Inc.

• Decision Date: 13 August 1982
• Docket Number: No. 80-74255.,80-74255.
• Citation: 556 F. Supp. 36
• Parties: George MILAI, Plaintiffs, v. TRADEWIND INDUSTRIES, INC., a foreign corporation, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, and Bonus-Bilt, Inc., a foreign corporation, Third-Party Defendants.
• Court: U.S. District Court — Western District of Michigan

556 F. Supp. 36

George MILAI, Plaintiffs, v. TRADEWIND INDUSTRIES, INC., a foreign corporation, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, and Bonus-Bilt, Inc., a foreign corporation, Third-Party Defendants.

No. 80-74255.

United States District Court, E.D. Michigan, S.D.

August 13, 1982.

Gerald D. Keller, Southfield, Mich., for plaintiffs.

Barry F. LaKritz, Southfield, Mich., for Tradewind Indus.

Maureen Holahan, Troy, Mich., for Bonus-Bilt, Inc. Ellen G. Ritteman, Asst. U.S. Atty., Detroit, Mich., for the U.S.

OPINION AND ORDER GRANTING MOTION TO DISMISS

ANNA DIGGS TAYLOR, District Judge.

The instant complaint is brought by a United States Postal Service employee who was injured on January 16, 1978, while unloading mail from a container manufactured by defendant Tradewind Industries. Plaintiff filed suit asserting this court's diversity jurisdiction, on a theory of product liability. Defendant answered the complaint and later filed a Third-Party Complaint against the federal government and Bonus-Bilt, Inc. Defendant alleges that both of those third-party defendants are liable to it for indemnification and contribution, and bases jurisdiction on both the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq, and ancillary jurisdiction.

Defendant United States has moved to dismiss the third-party complaint on several grounds, which have been briefed and argued to the court. That motion must be and hereby is granted, for the reasons set forth in this opinion.

Defendant's theory is that the government "conceived of" and "designed" the product in question, and provided design specifications to defendant, for its use in the manufacturing process. The third-party complaint cites the Federal Tort Claims Act, and seeks recovery in contribution, common law indemnity, express contractual indemnity and implied contractual indemnity theories. These various theories are vaguely intermingled and identified in the complaint without clear demarcation, which fact has led to a multi-faceted attack by the federal defendant.

Assuming arguendo that the complaint is grounded in contractual indemnity, defendant maintains that jurisdiction thereof lies solely in the U.S. Court of Claims. That court has exclusive jurisdiction of all civil claims against the United States founded upon "any express or implied contract with the United States" which exceed $10,000 in amount (28 U.S.C. § 1346(a)(2) and 28 U.S.C. § 1491.) The indemnity or contribution claim brought by defendant herein exceeds that jurisdictional amount as plaintiff seeks $55,000 in compensatory damages for his injury. If defendant had chosen to wait to file this third-party claim, as was its right, until resolution of the main action, this jurisdictional problem might not have occurred. Plaintiff's damages would then have been a sum certain, perhaps less than $10,000. But that is not the present circumstance, and at present this court has no subject matter jurisdiction of any express or implied contract-based claim. See, Murray v. U.S., 405 F.2d 1361 (D.C.Cir. 1968), Travelers Ins. Co. v. U.S., 493 F.2d 881 (3d Cir.1974), Galimi v. Jetco, 514 F.2d 949 (2d Cir.1975).

The court notes that defendant abandons the contractual indemnity theory in its brief, despite the fact that it is clearly raised in the complaint. Whether defendant still intends to rely upon it or not, that theory does not provide a basis for this court's jurisdiction either.

Defendant appears to rely upon its common law indemnity claim instead, which theory turns on historic policies of third-party liability in relationships between a plaintiff, defendant and indemnitor. Indemnity is a close cousin to contribution, which defendant has also mentioned in its complaint and brief in opposition to the motion to dismiss. The theory applicable here is indemnity, and not contribution, though the two are frequently confused by litigants. Contribution is the method by which a tortfeasor sues a joint tortfeasor for its share of a joint liability to an injured plaintiff. Indemnity is the device by which a tortfeasor "passes through" his entire liability to a third party whom the tortfeasor alleges is the real party responsible for the injury.

Neither type of claim can be maintained against the United States in this case.

It is undisputed that any direct liability of the government to this plaintiff must be resolved through the provisions of the Federal Employees Compensation Act, 5 U.S.C. § 8101 et seq. The Act is not unlike a state workers' compensation statute, and is the exclusive remedy for federal employees who are injured in the workplace, 5 U.S.C. § 8116(c). The device completely replaces the right of litigation against the federal government which would otherwise inure to the injured employee.

The exclusive and preclusive nature of the FECA is a bar to defendant's suit against the federal government here precisely because the underlying liability of defendant to plaintiff has been absolved, and the purpose of the FECA is to sharply limit the liability of the government arising out of on-the-job injuries.

The exclusivity provisions read as follows:

The liability of the United States or an instrumentality thereof under this subchapter ... with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States ... to the employee, his legal representative, spouse, dependents, next of kin, and any other person otherwise entitled to recover damages from the United States ... because of the injury or death in a direct judicial proceeding, in a civil action, or in admiralty, or by an administrative or judicial proceeding under a workmens' compensation statute or under a Federal tort liability statute....

This court will not strain the phrase "any other person otherwise entitled to recover damages from the United States ... because of the injury" so far as to include allegedly negligent manufacturers such as defendant here. United Air Lines v. Wiener, 335 F.2d 379 (9th Cir.1964). However, to allow defendant's claim here would be tantamount to undermining the intent and legislative scheme of the Congress. Numerous district and circuit courts have confronted this issue. The Second Circuit has observed:

it is one of those recurring puzzling situations where a federal statute has met differing interpretations in several circuits on a question that requires legislative resolution but which the Congress has, nevertheless, not yet addressed, Galimi v. Jetco, 514 F.2d 949 at 950.

Nevertheless, the majority of circuits which have considered the issue have concluded that claims against the United States such as this are barred. United Air Lines v. Wiener, supra, (9th Cir.1964); Wein Alaska Airlines v. United States, 375 F.2d 736 (9th Cir.1967). Travelers Ins. Co. v. United States, supra, (3d Cir.1974), Galimi v. Jetco, supra, (2d Cir.1975), Kudelka v. American Hoist, 541 F.2d 651 (7th Cir.1976), Thomas v. Lockheed, 665 F.2d 1330 (D.C.Cir.1981). The Fourth Circuit stands alone in its holding that such actions may be brought, Wallenius Bremen GmBh v. United States, 409 F.2d 994 (4th Cir.1969), and this court must conclude that the Fourth Circuit's conclusion is based upon an erroneous...