Wallace v. U.S.

• Decision Date: 05 February 1982
• Docket Number: No. 81-1376,81-1376
• Citation: 669 F.2d 947
• Parties: Harry H. WALLACE and Elizabeth Snyder Wallace, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 947

669 F.2d 947

Harry H. WALLACE and Elizabeth Snyder Wallace, Appellants, v. UNITED STATES of America, Appellee.

No. 81-1376.

United States Court of Appeals Fourth Circuit.

Argued Nov. 4, 1981.

Decided Feb. 5, 1982.

Thomas Hylden, Washington, D. C. (C. William Tayler, Sachs, Greenbaum & Tayler, Washington, D. C., on brief), for appellants.

Mary Ann Murphy, Washington, D. C. (Jeffrey Axelrad, U. S. Dept. of Justice, Stuart E. Schiffer, Acting Asst. Atty. Gen., Washington, D. C., J. Frederick Motz, U. S. Atty., Baltimore, Md., on brief), for appellee.

Before WINTER, Chief Judge, and PHILLIPS and ERVIN, Circuit Judges.

ERVIN, Circuit Judge:

Harry Wallace and his wife, Elizabeth, brought this action in the United States District Court for the District of Maryland under the Swine Flu Act of 1976, 42 U.S.C. § 247b, to recover for personal injuries and damages as a result of a swine flu inoculation administered to Harry Wallace. The district court dismissed the suit on the ground that there was a substantial question whether the Wallaces' sole remedy was under the Federal Employees Compensation Act (FECA), 5 U.S.C. § 8101 et seq. The court reasoned that FECA provides an exclusive remedy for federal employees alleging a work-related injury; that the Swine Flu Act specifically provides that no action can be brought against the government when another statute provides an exclusive remedy; and that whenever there is a substantial question of FECA coverage, the federal employee must file a FECA claim and be denied benefits before bringing a suit in federal court.

On appeal, the Wallaces argue that Harry Wallace's injuries were not work-related and that no substantial question was raised as to whether his injuries were compensable under FECA. The Wallaces also argue that FECA cannot provide the exclusive remedy in this case because they allege that Harry Wallace's injuries were caused by the acts or omissions of program participants (such as private manufacturers of the vaccine) as well as the acts or omissions of the government, and that the government is liable only as a substitute defendant for the program participants under the provisions of the Swine Flu Act.

We agree with both positions asserted by the Wallaces and reverse the district court's dismissal of this case. Because we find error in the district court's holding on the first two grounds advocated by the Wallaces, we decline to rule on their other arguments.

I.

Harry Wallace was a Hydrofoil System Planning and Acquisition Manager at the David W. Taylor Naval Ship Research and Development Center at Bethesda, Maryland, from November 1973 to November 1976. On November 23, 1976, during normal working hours, he was given a flu shot in a naval building adjacent to the one where he worked. Wallace was not performing any job-related duties when he received his shot, was not required to receive the vaccine as a condition of employment or for any other reason, and could have taken the shot elsewhere.

As a result of the inoculation, Harry Wallace contracted Guillain-Barre Syndrome. He has incurred substantial medical expenses ($28,649.65), lost wages ($6,500.00), and still suffers from a variety of physical and emotional problems, including impotence. He filed an administrative claim with the Public Health Service on June 15, 1978, which was denied by the Service on November 2, 1978, on the ground that his exclusive remedy was under FECA. In March 1979, Wallace and his wife, Elizabeth, filed an action under the Swine Flu Act of 1976, 42 U.S.C. § 247b(j)-(l ), in the United States District Court for the District of Columbia, alleging negligence, breach of warranty and strict liability on the part of the United States and the program participants. The case was consolidated with other swine flu cases for pretrial proceedings in In re Swine Flu Immunization Products Liability Litigation, 446 F.Supp. 244 (Jud.Pan.Multi.Lit.1978) (Judge Gesell, presiding).

In this phase of the litigation, Judge Gesell ruled that federal employee plaintiffs such as the Wallaces may proceed with swine flu claims under the Swine Flu Act without filing under FECA if the injury is "clearly not compensable" under FECA or if they seek recovery from program participants other than the United States. With respect to this case, Judge Gesell denied the government's motion to dismiss the case because of Wallace's purported eligibility under FECA and denied the Wallaces' motion for partial summary judgment as to the government's FECA defense.

On July 25, 1980, pursuant to stipulation by the parties, the case was transferred to the United States District Court for the District of Maryland for local discovery and trial. After a cut-off date for discovery (April 1, 1981), filing date for pre-trial memoranda (April 20, 1981), and a trial date (April 27, 1981) were established, the Wallaces commenced discovery by filing interrogatories and requests for admissions on January 21, 1981. Because the government failed to respond to these discovery requests, the Wallaces sought an order compelling answers to interrogatories and an expedited hearing on the issue. On March 7, 1981, however, they also had requested a preliminary hearing on the issue whether the Wallaces were required to file and be denied a claim for FECA benefits before pursuing this claim under the Swine Flu Act in federal court.

On April 3, 1981, the district court dismissed the case on the ground that there was a substantial question whether Wallace's injuries were compensable under FECA and that the Wallaces' suit against the government and other program participants was precluded pending a determination of coverage under FECA. Apparently, the court made the ruling even though there were no pending motions by the government for dismissal or summary judgment.

II.

This appeal places before us the difficult task of construing certain statutory language, some of which was considered and passed by a hurried Congress.

A.

In the spring of 1976 Congress appropriated money at the urging of President Ford to establish a Swine Flu Vaccination Program, Pub.L.No.94-266, 90 Stat. 362. The program was begun in light of reports from the medical community that there was a high risk of a dangerous flu epidemic ¹ during the winter of 1976-77 if a large scale vaccination program was not undertaken. The program ran into problems, however, when the vaccine manufacturers' insurance companies refused to insure them from claims by persons alleging injury from the vaccine because of the risk of strict products liability and the possibility of having to defend a multitude of meritless suits. Without insurance protection the vaccine manufacturers balked at continuing with the program.

After considering other plans, Congress and the insurance industry agreed on a program of substituted liability and passed the bill into law one week after the proposal had been introduced. ² Under the Act, the Department of Health, Education and Welfare was to establish and coordinate the program by purchasing the vaccine from the manufacturers and providing it to state and federal authorities who would administer the vaccinations to the public at no charge.

Special provisions were included to address the manufacturers' and insurers' dual concerns of strict products liability and defending meritless suits. Under the Act, suits that normally would have been brought against program participants instead were to be brought against the United States under the procedures of the Federal Tort Claims Act. Thus, the United States was substituted for the program participants as the party defendant. Because the Act's definition of program participants included the manufacturers and distributors of the vaccine as well as the agencies and personnel administering it, 42 U.S.C. § 247b(k)(2)(B) (1976), the insurers and manufacturers had the protection they felt was needed. The government, therefore, accepted liability for personal injury or death arising from the Swine Flu Program because of the act or omission of a program participant on any theory of liability. The government, however, did retain the right to indemnification from program participants for damages and costs incurred in defending a claim based on the program participants' negligence or breach of contract with the government. Under this unique statutory remedial scheme, therefore, the government took upon itself the job of weeding out meritless claims filed against the program participants. Further, because the government's right of indemnification was limited to claims based on negligence, the manufacturers did not bear the risk of having to pay claims brought on a strict products liability theory.

Congress also recognized that a person injured from a swine flu vaccination might have other remedies against the government. When such remedy is available, the Act precludes a civil action under the Swine Flu Act:

Where an action or proceeding under (the Swine Flu Act) is precluded because of the availability of a remedy through proceedings for compensation or other benefits from the United States as provided by any other law, the action or proceeding shall be dismissed, but in that event the running of any limitation of time for commencing, or filing an application or claim in, such proceedings for compensation or other benefits shall be deemed to have been suspended during the pendency of the civil action or proceeding under (the Swine Flu Act).

42 U.S.C. § 247b(k)(5)(C) (1976).

Whether an action may proceed under the Swine Flu Act depends on whether another compensation scheme provides a remedy. Specifically, in this case, at least one of the Wallaces' claims under the Swine Flu Act would be precluded if Harry Wallace's injuries are compensable under FECA.

The basic statutory requirements for eligibility for FECA compensation are as follows:

(a) The United States shall pay compensation as specified by this...