United States v. Empresa Viacao Aerea Rio Grandense Varig Airlines United States v. United Scottish Insurance Co, s. 82-1349

Decision Date19 June 1984
Docket NumberNos. 82-1349,82-1350,s. 82-1349
PartiesUNITED STATES, Petitioner, v. S.A. EMPRESA de VIACAO AEREA RIO GRANDENSE (VARIG AIRLINES) et al. UNITED STATES, Petitioner, v. UNITED SCOTTISH INSURANCE CO. et al
CourtU.S. Supreme Court
Syllabus

The Federal Aviation Act of 1958 directs the Secretary of Transportation to promote safety in air transportation by promulgating reasonable rules and regulations governing the inspection, servicing, and overhaul of civil aircraft. The Secretary, in her discretion, may prescribe the manner in which such inspection, servicing, and overhaul shall be made. In the exercise of this discretion, the Federal Aviation Administration (FAA), as the Secretary's designee, has devised a system of compliance review that involves certification of aircraft design and manufacture. Under this certification process, the duty to ensure that an aircraft conforms to FAA safety regulations lies with the manufacturer and operator, while the FAA retains responsibility for policing compliance. Thus, the manufacturer is required to develop the plans and specifications and perform the inspections and tests necessary to establish that an aircraft design comports with the regulations; the FAA then reviews the data by conducting a "spot check" of the manufacturer's work. Part of the FAA compliance procedure involves certification, whereby the FAA, if it finds that a proposed new type of aircraft comports with minimum safety standards, signifies its approval by issuing a type certificate. If an already certificated aircraft's design undergoes a major change, the FAA, if it approves the change, issues a supplemental type certificate. In No. 82-1349, a Boeing 707 commercial jet aircraft owned by respondent airline was flying from Rio de Janeiro to Paris when a fire broke out in one of the aft lavatories producing thick black smoke throughout the cabin. Despite a successful effort to land the plane, most of the passengers on board died from asphyxiation or the effects of toxic gases produced by the fire, and most of the plane's fuselage was consumed by the post-impact fire. Respondent airline's action against the United States under the Federal Tort Claims Act (Act or FTCA) seeking damages for the destroyed aircraft and a wrongful-death action by respondent families and representatives of the deceased passengers under the Act were consolidated in the Federal District Court. Respondents alleged that the Civil Aeronautics Agency, the FAA's predecessor, was negligent in issuing a type certificate for the Boeing 707 because the lavatory trash receptacle did not satisfy applicable safety regulations. The District Court granted summary judgment for the United States on the ground, inter alia, that recovery against the United States was barred by 28 U.S.C. § 2680(a), which provides that the Act shall not apply to claims "based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused" (discretionary function exception). The Court of Appeals reversed, holding, inter alia, that the discretionary function exception did not apply. In No. 82-1350, an aircraft owned by respondent Dowdle and used in an air taxi service caught fire in midair in the forward baggage compartment, crashed, and burned, killing all the occupants. Respondent Dowdle filed an action under the FTCA for property damage and respondent insurance companies also filed an action under the Act seeking reimbursement for moneys paid for liability coverage on Dowdle's behalf. Respondents claimed that the Government was negligent in issuing a supplemental type certificate for the installation of a gasoline-burning cabin heater in the airplane that did not comply with the applicable FAA regulations. The District Court in California, upon finding that the crash resulted from defective installation of the heater, entered judgment for respondents under the California "Good Samaritan" rule, and the Court of Appeals affirmed.

Held: The actions are barred by the discretionary function exception of the FTCA. Pp. 807-821.

(a) It is the nature of the conduct, rather than the status of the actor, that governs whether the discretionary function exception applies in a given case. Moreover, the legislative history discloses that such exception was plainly intended to encompass the discretionary acts of the Government acting in its role as a regulator of the conduct of private individuals. Congress wished to prevent "second-guessing" of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort. Pp. 807-814.

(b) Here, the discretionary function exception precludes a tort action based upon the FAA's conduct in certificating the aircraft in question for use in commercial aviation. The FAA's implementation of a mechanism for compliance review is plainly discretionary activity of the "nature and quality" protected by § 2680(a). Judicial intervention, through private tort suits, in the FAA's decision to utilize a "spot-checking" program as the best way to accommodate the goal of air transportation safety and the reality of finite agency resources would require the courts to "second-guess" the political, social, and economic judgments of an agency exercising its regulatory function. It was precisely this sort of judicial intervention that the discretionary function exception was designed to prevent. It follows that the acts of FAA employees in exercising the "spot-check" program are also protected by that exception, because respondents alleged only that the FAA failed to check particular items in the course of its review. Moreover, the risks encountered by these inspectors were encountered for the advancement of a governmental purpose and pursuant to a specific grant of authority. Pp. 814-820.

692 F.2d 1205 (9th Cir.1982) and 692 F.2d 1209 (9th Cir.1982), reversed.

Kenneth S. Geller, Washington, D.C., for petitioners.

Richard F. Gerry, San Diego, Cal., for respondents.

Chief Justice BURGER delivered the opinion of the Court.

We granted certiorari in these two cases to determine whether the United States may be held liable under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., for the negligence of the Federal Aviation Administration in certificating certain aircraft for use in commercial aviation.

I
A. No. 82-1349

On July 11, 1973, a commercial jet aircraft owned by respondent S.A. Empresa De Viacao Aerea Rio Grandense (Varig Airlines) was flying from Rio de Janeiro to Paris when a fire broke out in one of the aft lavatories. The fire produced a thick black smoke, which quickly filled the cabin and cockpit. Despite the pilots' successful effort to land the plane, 124 of the 135 persons on board died from asphyxiation or the effects of toxic gases produced by the fire. Most of the plane's fuselage was consumed by a postimpact fire.

The aircraft involved in this accident was a Boeing 707, a product of the Boeing Co. In 1958 the Civil Aeronautics Agency, a predecessor of the FAA, had issued a type certificate 1 for the Boeing 707, certifying that its designs, plans, specifications, and performance data had been shown to be in conformity with minimum safety standards. Seaboard Airlines originally purchased this particular plane for domestic use; in 1969 Seaboard sold the plane to respondent Varig Airlines, a Brazilian air carrier, which used the plane commercially from 1969 to 1973.

After the accident respondent Varig Airlines brought an action against the United States under the Federal Tort Claims Act seeking damages for the destroyed aircraft. The families and personal representatives of many of the passengers, also respondents here, brought a separate suit under the Act pressing claims for wrongful death. The two actions were consolidated in the United States District Court for the Central District of California.

Respondents asserted that the fire originated in the towel disposal area located below the sink unit in one of the lavatories and alleged that the towel disposal area was not capa- ble of containing fire. In support of their argument, respondents pointed to an air safety regulation requiring that waste receptacles be made of fire-resistant materials and incorporate covers or other provisions for containing possible fires. 14 CFR § 4b.381(d) (1956). Respondents claimed that the CAA had been negligent when it inspected the Boeing 707 and issued a type certificate to an aircraft that did not comply with CAA fire protection standards. The District Court granted summary judgment for the United States on the ground that California law does not recognize an actionable tort duty for inspection and certification activities. The District Court also found that, even if respondents had stated a cause of action in tort, recovery against the United States was barred by two exceptions to the Act: the discretionary function exception, 28 U.S.C. § 2680(a),2 and the misrepresentation exception, § 2680(h).3

The United States Court of Appeals for the Ninth Circuit reversed. 692 F.2d 1205 (1982). The Court of Appeals reasoned that a private person inspecting and certificating aircraft for airworthiness would be liable for negligent inspection under the California "Good Samaritan" rule, see Restatement (Second) of Torts §§ 323 and 324A (1965), and concluded that the United States should be judged by the same rule. 692 F.2d, at 1207-1208. The Court of Appeals rejected the Government's argument that respondents' actions were barred by 28 U.S.C. § 2680(h), which provides that the United States is not subject to liability for any claim arising out of misrepresentation. Interpreting respondents' claims as arising from the negligence of the CAA inspection rather than...

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