Morgan v. U.S.

• Decision Date: 25 June 1992
• Docket Number: No. 853,D,853
• Citation: 968 F.2d 200
• Parties: Dennis MORGAN and Louise Morgan, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. ocket 91-6227.
• Court: U.S. Court of Appeals — Second Circuit

Page 200

968 F.2d 200

61 USLW 2045

Dennis MORGAN and Louise Morgan, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

No. 853, Docket 91-6227.

United States Court of Appeals, Second Circuit.

Argued Jan. 23, 1992.

Decided June 25, 1992.

Charles S. Kleinberg, Asst. U.S. Atty., Brooklyn, N.Y. (Andrew J. Maloney, U.S. Atty., E.D.N.Y., Robert L. Begleiter, Asst. U.S. Atty., on the brief), for defendant-appellee.

Evan Sarzin, New York City (Queller & Fisher, on the brief), for plaintiffs-appellants.

Before: NEWMAN and KEARSE, Circuit Judges, and MARSHALL, Associate Justice Retired. ^*

KEARSE, Circuit Judge:

Plaintiffs Dennis and Louise Morgan appeal from an order of the United States District Court for the Eastern District of New York, Reena Raggi, Judge, limiting plaintiffs' recovery in this action under the Federal Torts Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671-2680 (1988), for injuries suffered as a result of medical malpractice at a veterans administration hospital. The district court, vacating a judgment in the amount of $106,000 entered by United States Magistrate Judge A. Simon Chrein, ruled that under 38 U.S.C. § 351 (1988) plaintiffs' recovery must be reduced by the amounts administratively awarded them by the government pursuant to that section. On appeal, plaintiffs contend that the district court erred in concluding that § 351 required a setoff against their entire FTCA recovery rather than solely against the portion of that recovery that compensated them for lost earnings. We disagree and affirm the order of the district court.

I. BACKGROUND

The following facts do not appear to be in dispute. In April 1981, plaintiff Dennis Morgan ("Morgan"), a veteran, was a patient at the Veterans Administration ("VA") Hospital in Northport, New York (the "Hospital"). After an x-ray discovered a mediastinal mass in his chest area, the Hospital staff failed to perform a C.A.T. scan on him, resulting in a several-month delay in diagnosing him as suffering from Hodgkin's disease. During the delay, the tumor quadrupled in size. Because the immediately ensuing treatment did not sufficiently reduce the size of the tumor, Morgan was required to undergo eight months of treatment by chemotherapy, during which he suffered debilitating side-effects.

Section 351 of 38 U.S.C. (renumbered § 1151 by Department of Veterans Affairs

                Codification Act, Pub.L. No. 102-83, § 5(a) (1991) ("1991 DVA Act"), but referred to herein as " § 351") provides that the government will make benefits payments (" § 351 payments") to veterans who are injured, or whose injuries are aggravated, through the fault of VA hospital staff.   As a result of his treatment at the Hospital, the VA determined that Morgan was entitled to receive § 351 payments for the period from April 20, 1981, onward.   By mid-1988 Morgan was receiving some $1,240 per month in § 351 payments
                

Plaintiffs commenced the present action in 1984 under the FTCA. Following a bench trial before the magistrate judge pursuant to the Federal Magistrates Act of 1979 ("Magistrates Act" or "Act"), 28 U.S.C. § 636 (1988), the magistrate judge found that, as a result of the delay in diagnosis, Morgan had suffered damages in the total amount of $212,564, comprising $24,000 for eight months' sterility and loss of libido during chemotherapy, $16,000 for loss of enjoyment of life during the same period, $160,000 for eight months of pain and suffering caused by the chemotherapy, and $12,564 for lost earnings. Plaintiff Louise Morgan, Morgan's wife, was found to have been injured in the amount of $12,000 for loss of consortium during Morgan's eight months of chemotherapy. The magistrate judge found, however, that Morgan was equally at fault with the Hospital for the delay in the discovery of the precise nature of his illness and accordingly reduced each of the above amounts by 50%, reaching a total of $112,282 in damages, including $6,282 for lost earnings.

The magistrate judge observed that § 351 requires a setoff against § 351 payments of amounts recovered as a result of VA malpractice claims filed under the FTCA. By the time of the trial, Morgan had received a total of approximately $91,000 in § 351 payments. The magistrate judge concluded, however, that the setoff applied to only so much of the FTCA recovery as represented lost earnings, not to recoveries for such injuries as pain and suffering or loss of enjoyment of life, see, e.g., Jackson v. United States, 526 F.Supp. 1149, 1152 (E.D.Ark.1981), aff'd mem., 696 F.2d 999 (8th Cir.1982); Christopher v. United States, 237 F.Supp. 787, 799 (E.D.Pa.1965), and he accordingly reduced the total amount awarded to Morgan by only $6,282. Denying a posttrial motion by the government to have the entire FTCA damages award set off against the § 351 payments to Morgan, the magistrate judge adhered to his original view, stating as follows:

[U]pon a review of § 351 and the statutory scheme of title 38 as set forth above by plaintiff, I conclude that pain and suffering damages are not the "equivalent" of those payments provided pursuant to the statute. I find this to be equally true for those damages awarded for loss of enjoyment of life and for sexual dysfunction. I choose instead to follow those cases which do not permit a setoff under § 351 against damages for pain and suffering.

Memorandum and Order dated May 8, 1989, at 7-8. Accordingly, the magistrate judge entered judgment in favor of plaintiffs in the amount of $106,000.

Pursuant to 28 U.S.C. § 636(c)(4), the government appealed to the district court. In a Memorandum and Order dated June 30, 1991 ("District Court Order"), the district court vacated the judgment "[t]o the extent the magistrate limited the set-off to that portion of the award reflecting only lost earnings." Id. at 19. Noting that the language of § 351 was ambiguous, the court stated that it was "persuaded from the legislative history and the contemporaneous views of the sponsoring agency that the amendment to § 351 requiring a set-off of benefits against tort damages was intended to apply to the total amount of the judgment and not to any subset thereof." District Court Order at 12.

The district court remanded to the magistrate judge to permit recalculation of the damage award with a setoff of the statutory benefits against the total amount of the FTCA damages award. Plaintiffs petitioned pursuant to 28 U.S.C. § 636(c)(5) for leave to appeal to this Court, which was granted. For the reasons below, we affirm the ruling of the district court.

II. DISCUSSION

On appeal, plaintiffs argue principally that the setoff provision of § 351 was intended only to avoid a double recovery for lost income, not to effect recoupment of § 351 benefits against other elements of damages. For the reasons below, we disagree and affirm the order of the district court. We begin, however, with a discussion of our jurisdiction to entertain an appeal at this juncture.

A. Appellate Jurisdiction

In the present case, the judgment entered by the magistrate judge was appealed by the government to the district court pursuant to 28 U.S.C. § 636(c)(4). The district court vacated that judgment and remanded to the magistrate judge for recalculation of damages and entry of a new judgment. So far as the record indicates, that recalculation has not occurred, and no new judgment has been entered. Plaintiffs petitioned this Court for leave to appeal the district court's decision, and a prior panel granted the petition without discussing the question of jurisdiction. Since a federal court always has the power to examine the question of its own subject matter jurisdiction, see Louisville & Nashville Railroad v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126 (1908), and since the present question seems likely to recur, we explore here the basis of our jurisdiction to review an order that is not final in the traditional sense.

As a general matter, the federal courts of appeals have jurisdiction to review decisions of the district courts only on appeals from final judgments pursuant to 28 U.S.C. § 1291 (1988), or appeals from certain interlocutory orders pursuant to 28 U.S.C. § 1292 (1988), or, in rare instances, by extraordinary writ, see Fed.R.App.P. 21. There is a strong federal policy against piecemeal appeals, see, e.g., Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 8, 100 S.Ct. 1460, 1464, 64 L.Ed.2d 1 (1980); Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438, 76 S.Ct. 895, 901, 100 L.Ed. 1297 (1956), and the "traditional rule [is] that an appeal statute is read to require a final judgment absent express permission for appeal from interlocutory orders," 15A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3901.1, at 46 (1992). Thus, when the decision of the district court does not pertain to an injunction, a receivership, or a case in admiralty, see 28 U.S.C. § 1292(a), and is not an interlocutory order as to which the district court has granted certification and we have granted leave to appeal, see id. § 1292(b), we normally lack jurisdiction to hear the appeal unless the decision is embodied in a final order. A final judgment or order is one that conclusively determines the rights of the parties to the litigation, leaving nothing for the district court to do but execute the order. See, e.g., Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978).

The Magistrates Act, which allows the parties to a civil suit to agree that the case will be tried before a magistrate judge, provides two routes for appeals to the court of appeals. First, absent agreement by the parties, "[u]pon entry of judgment" in such a case "an aggrieved party may appeal directly to the appropriate United States court of appeals from the judgment of the magistrate in the same manner as an appeal from any other judgment of a district court." 28 U.S.C. § 636(c)(3). Second, if the parties...