Miree v. U.S., s. 74-3670

Citation538 F.2d 643
Decision Date25 August 1976
Docket NumberNos. 74-3670,74-3822,74-3864,74-3870 and 74-3881,s. 74-3670
PartiesGeorge Henson MIREE et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. Judith Anita PHILLIPS, widow of David Emanuel Phillips, deceased, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Third-Party Plaintiff-Appellee. DeKALB COUNTY, GEORGIA, Defendant-Appellee, v. MACHINERY BUYERS CORP. et al., Third-Party Defendants-Appellees. William Michael FIELDS, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, DeKalb County, Georgia, et al., Defendants-Appellees. FIREMAN'S FUND INSURANCE COMPANY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, DeKalb County, Georgia, et al., Defendants-Appellees. Pearlie CHAISSON, Plaintiff-Appellee, v. SOUTHEAST MACHINERY, INC., Defendant and Third-Party Plaintiff-Appellant, v. UNITED STATES of America et al., Third-Party Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Hugh M. Dorsey, Jr., Jule W. Felton, Jr., Atlanta, Ga., Gilbert E. Johnston, Alan W. Heldman, Birmingham, Ala., for plaintiffs-appellants in 74-3670.

John W. Stokes, U. S. Atty., William D. Mallard, Jr., Asst. U. S. Atty., Atlanta, Ga., George M. Fleming, Trial Atty., U. S. Dept. of Justice, Morton Hollander, Ronald R. Glancz, Washington, D. C., for U. S. A.

W. Meade Burns, Jr., F. Clay Bush, Atlanta, Ga., Wendell K. Willard, Decatur, Ga., for DeKalb County.

J. Arthur Mozley, Atlanta, Ga., for S. E. Machinery, Machinery Buyers Corp. and Fireman's Fund Ins. Co.

Baxter H. Finch, Atlanta, Ga., for defendants-appellees in 74-3670.

Robert W. Patrick, Jr., Atlanta, Ga., Herbert S. Falk, Jr., Greensboro, N. C., for defendants-appellees in 74-3670 and Fields.

A. Russell Blank, Atlanta, Ga., for plaintiff-appellant in 74-3822.

Robert M. Travis, William Q. Bird, Atlanta, Ga., for plaintiff-appellant in 74-3864.

Robert Stringer, Decatur, Ga., for Chaisson.

Appeals from the United States District Court Northern District of Georgia.

Before BROWN, Chief Judge, GEWIN, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, MORGAN, CLARK, RONEY, GEE, TJOFLAT and HILL, Circuit Judges. *

PER CURIAM:

The Court en banc adopts as its opinion Parts I, II, and IV of the majority panel opinion in this cause, 526 F.2d 679-686. The Court en banc adopts as its opinion the dissenting opinion of Judge Dyer, 526 F.2d 686-688 in lieu of Part III of the majority panel opinion. While not directly in point, the Court has reviewed the case of United States v. Orleans, --- U.S. ----, 96 S.Ct. 1971, 48 L.Ed.2d 390. The reasoning of the dissenting opinion, adopted here, is remarkably consistent with the policy considerations noted by the Chief Justice in Orleans.

Accordingly, the judgment of the district court is

AFFIRMED.

TJOFLAT, Circuit Judge (concurring).

I agree that, in general, government contracts, and especially those having to do with the airways, should be controlled by federal law. See generally Illinois v. Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972); United States v. Seckinger, 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970); Northwest Airlines v. Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283 (1944); Kohr v. Allegheny Airlines, Inc., 504 F.2d 400 (7th Cir. 1974), cert. denied sub nom., Forth Corp. v. Allegheny Airlines, Inc., 421 U.S. 978, 95 S.Ct. 1979, 44 L.Ed.2d 470 (1975). See also Federal Aviation Act of 1958, § 1108(a), 49 U.S.C. § 1508(a) (1970). I also agree that the public was not an intended third-party beneficiary of the contract assurances mandated by 49 U.S.C. § 1110, now enacted at 49 U.S.C. § 1718 (1970). Consequently, I concur.

LEWIS R. MORGAN, Circuit Judge, with whom JOHN R. BROWN, Chief Judge, and GOLDBERG, AINSWORTH and GODBOLD, Circuit Judges, join (dissenting):

The court en banc adopts as its decision Parts I, II, and IV of the majority panel opinion, which held that under Georgia law plaintiffs could not recover against defendant DeKalb County under a theory of negligence, 1 of nuisance, or of waiver of immunity through the County's purchase of liability insurance. The majority en banc also adopts Judge Dyer's dissent in the original panel opinion in lieu of Part III of that same opinion. In Part III, the majority panel opinion held that under Georgia law plaintiffs could sue as third party beneficiaries to a contract between the Federal Aviation Administration (FAA) and DeKalb County. Through its adoption of Judge Dyer's dissent, however, the majority en banc holds that suit as third party beneficiaries is likewise unavailable to plaintiffs and that, accordingly, their entire action was properly dismissed.

DeKalb County entered into an agreement with the FAA whereby in return for a grant of money by that agency, it gave the FAA certain assurances, among which were its promises that it would operate the airport for the use and benefit of the public, maintain it in a safe and serviceable condition, and limit use of adjacent land so that it would not interfere with the safe use of the airport. Miree v. United States, 5 Cir., 526 F.2d 679 at 686, n.12. The majority panel opinion held that under Georgia law plaintiffs could sue as third party beneficiaries for the County's alleged breach of its contractual duties. 2 Judge Dyer's dissent, which the court en banc now adopts, argued that federal common law, not Georgia law, should control the interpretation of third party beneficiary rights under a contract entered into by the United States Government and other parties. We respectfully dissent.

I. Inapplicability of Federal Common Law.

After Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), in which the Supreme Court held that in diversity cases 3 state law generally shall apply, it became clear that federal general common law no longer existed. Yet, with the much publicized Clearfield Trust Co. v. United States, 4 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838 (1973), it became clear that federal common law, as opposed to federal general common law, still lived. In Clearfield, a check drawn on the United States Treasurer payable to a named government employee was stolen and forged and the Clearfield Trust Company paid the check over the forged endorsement. In determining that federal common law, not state law, applied, the Supreme Court held that rights and duties of the United States on commercial paper that it issues should not be controlled by local law. That is, "the issuance of commercial paper by the United States is on a vast scale and transactions in that paper . . . will commonly occur in several states. The application of state law . . . would subject the rights and duties of the United States to exceptional uncertainty. . . . The desirability of a uniform rule is plain." Id. at 367, 63 S.Ct. at 575. Hence, the rationale supporting the Clearfield decision is that when the rights and duties of the United States are to be determined, uniformity of result is desirable. Accord, United States v. Standard Oil, 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947) (indemnification of Government for injury to its soldier is matter of federal fiscal policy that demands uniform result).

It seems quite clear to us then that absent explicit Congressional command, federal common law should be chosen in a diversity case only when there exists an identifiable federal interest in the outcome of the particular case or in a consistent result in cases of its class. Such an interest is not involved in this case. Here, we have litigation between two non-federal parties over the rights of one as a third party beneficiary to a contract executed by the other. While the federal government was a party to this contract, it has no particular interest in the outcome of the third party beneficiary question in this diversity suit. 5 Such a question is a matter to be decided by the particular state's own contract law. Indeed, whether or not the plaintiffs could recover as third party beneficiaries is of no significance to the United States in that it affects no rights or liabilities of the United States 6 and involves no impact on a federal fiscal policy. 7

We find our approach supported by analogous Supreme Court cases. In Bank of America National Trust & Savings Association v. Parnell, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93 (1956), a diversity case in which the United States was not a party, the Supreme Court held that in litigation between two private parties over negotiation of federal bonds, state law controlled. The words of Justice Frankfurter are particularly appropriate for the present case:

The present litigation is purely between private parties and does not touch the rights and duties of the United States. The only possible interest of the United States in a situation like the one here . . . is that the floating of securities of the United States might somehow or other be adversely affected by the local rule of a particular State regarding the liability of the converter. This is far too speculative, far too remote a possibility to justify the application of a federal law to transactions essentially of local concern.

Id. at 33-34, 77 S.Ct. at 121. (Emphasis added.) Likewise, in Wallis v. Pan American Petroleum Corporation, 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369 (1966), the Supreme Court held that state law applies to a case between two private parties involving the assignment of an oil and gas lease given by the United States through the Mineral Leasing Act for Acquired Lands. In rejecting the application of federal common law, the Court stated:

In deciding whether rules of federal common law should be fashioned, normally the guiding principle is that a significant conflict between some federal policy or interest and the use of state law in the premises must first be specifically shown. It is by no means enough that, as we may assume, Congress could under the Constitution...

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