Newport Air Park, Inc. v. United States

ALDRICH, Chief Judge.

Due to the negligence of appellant United States and appellee Newport Air Park, Inc., two airplanes collided at the Warwick, Rhode Island airport. Appellee settled the ensuing injury claims, and appellant, pursuant to a local statute requiring contribution,¹ reimbursed appellee to the extent of one-half of its outlay. This it did because the waiver contained in the Federal Tort Claims Act, FTCA, extends to claims for contribution when the government is a joint tortfeasor. United States v. Yellow Cab Co., 1951, 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523.² The government made one exception, which has resulted in the present lawsuit. One of the persons killed by the collision was a government employee. The government’s obligation to its employees is under the Federal Employees’ Compensation Act, FECA, 5 U.S.C. § 8101 et seq., a statute antedating the FTCA, and similar in content to state workmen’s compensation acts.³ Section 16(c) of the FECA provides that this is its sole obligation.⁴ The government discharged this liability by paying the widow $8,600. Thereafter the widow sued appellee, and recovered $50,000 by way of settlement. As required by section 32 of the FECA,⁵ the widow then repaid the $8,600 to the government. Appellee demanded contribution by the government to the extent of $8,600.⁶ Citing section 16(c), the government refused. The parties having stipulated to the above facts, the court granted judgment for the appellee, 293 F.Supp. 809, and the government appeals.

Basically it is appellee’s position that the limitation contained in section 16(c) has the purpose of restricting recovery by the employee and his representatives, and is not directed at rights of unrelated third parties. The issue is not that simple. The inquiry must be, what right is appellee seeking to enforce.

It is clear that if appellee’s claim to reimbursement were a strictly independent right, personal to appellee, section 16(c) would not bar such recovery. Weyerhaeuser S.S. Co. v. United States, 1963, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed. 2d 1. There a private shipowner, whose vessel collided with a government vessel, brought suit in admiralty. A cross libel was filed. Finding both to blame, the court divided the damages. The government, asserting that section 16(c) was a bar to its further liability, objected to the court’s including in the gross damages the amount that Weyer-haeuser was required to pay a government employee injured in the collision. The Court rejected this contention, saying, at p. 601, 83 S.Ct. at p. 929,

“The purpose of § 7(b), added [to the FECA] in 1949, was to establish that, as between the Government on the one hand and its employees and their representatives or dependents on the other, the statutory remedy was to be exclusive. There is no evidence whatever that Congress was concerned with the rights of unrelated third parties, much less of any purpose to disturb settled doctrines of admiralty law affecting the mutual rights and liabilities of private shipowners in collision cases.”

Appellee cannot take all the comfort from Weyerhaeuser that it might wish. While the result there was to include in the damages to be divided between the parties what Weyerhaeuser had to pay the government employee, Weyerhaeuser had a direct right of action against the government because of the collision with its vessel. The Court held that section 16(c) of the FECA did not bar the inclusion of Weyerhaeuser’s tort liability to the government employee as part of its consequential damages. The resultant division of damages was not contribution, but was in accordance with the admiralty rule of reduced recovery when there is contributory negligence.

The decision below is not supported by Weyerhaeuser, and is inconsistent therewith. The court awarded Weyerhaeuser one-half of what it was required to pay to the government employee, a sum substantially greater than the compensation payment under the FECA. See 9 Cir., 294 F.2d 179. If the Weyerhaeuser principle applied to the case at bar, appellee should recover $25,000, not $8,600. Neither the court below, nor the cases upon which it relied, nor even appellee (see n. 6, swpra) makes that contention.

While on the subject of consistency, we might add that the court’s award of $8,600 is inconsistent with the basic concept of contribution, which is sharing, not payment in full. On appellee’s theory, that the government’s liability of $8,600 was occasioned by joint negligence, it would seem that the obligation should be divided between them. Instead, the government has been made to pay as much as if the negligence had been solely its own. The court’s reasoning, 293 F.Supp. at 815, seemingly that the government should pay one-half of the $50,000, but that “limitless, contribution would probably compel a complete reconsideration of the actuarial basis of compensation insurance,” while supported by a dictum in Elston v. Industrial Lift Truck Co., Inc., 1966, 420 Pa. 97, 216 A.2d 318, and in accord with the Pennsylvania rule as there summarized, seems impermissible ad hoc legislation.⁷ Either the government owes $4,300, or, conceivably, $25,000, or it owes nothing.

Although appellee mistakes the effect of Weyerhaeuser, the government places too much reliance upon Pope & Talbot, Inc. v. Hawn, 1953, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143. There the combined negligence of a stevedore and a shipowner resulted in injury to an employee of the stevedore. In the Longshoremen’s and Harbor Workers’ Compensation Act. there are exclusivity and recoupment provisions comparable to the pertinent section of the FECA. The stevedore paid compensation under the Longshoremen’s Act to the injured worker, who then sued the shipowner. The latter demanded that its accountability for damages to the worker be reduced by the amount of the stevedore's payment, and that the stevedore, because of its negligence, be forbidden to recoup from the employee — in effect what is being sought here. Otherwise, it argued, the stevedore would be profiting from its own lack of care. The Court refused, holding that the statutory scheme for workmen’s compensation would be violated by such a result.⁸

The government fails to note the absence in Pope & Talbot of any statute providing for contribution. The ship owner sought to create rights merely from the fact that it was making a payment which benefited the negligent stevedore. This was a circular argument. If the shipowner had prevailed, in whole or in part, the stevedore would, in effect, have been indemnifying the shipowner for its own negligence, contrary to Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 1952, 342 U.S. 282, 72 S.Ct. 277, 96 L.Ed. 318. The circumstances that the shipowner’s payment ultimately benefited the stevedore was res inter alios. The latter’s payment to its employee had nothing to do with negligence, but was contractual indemnity.

An injured party’s insurance does not redound to lessen the liability of the third party who caused the injury. Had the stevedore in Pope & Talbot been an ordinary insurer that had contracted with the employee, the shipowner would have received no benefit from, or credit on account of, the compensation payment. Bangor & A. R. Co. v. Jones, 1 Cir., 1929, 36 F.2d 886; Parmiter v. United States, D.Mass., 1948, 75 F.Supp. 823; Note, Unreason in the Law of Damages: The Collateral Source Rule, 77 Harv.L. Rev. 741 (1964); Rest. Torts § 920, Comment e. Correspondingly, the fact that the employee here had agreed with the government to make a refund in certain circumstances was none of the shipowner’s concern.⁹

We must, accordingly, determine whether the right of contribution as between joint tortfeasors calls for a different result. We think not. We reach this result not by application of rubric— whether the government was a joint tortfeasor or not — because stating the question in such manner tends to assume the point, but by considering the nature of the right of contribution. Contribution does not create direct liability in tort, each towards the other, between two tortfeasors. Rather, as the word implies, it is a right based upon equitable fairness. The right to have the other tortfeasor contribute to his outlay arises in whichever tortfeasor satisfies the loss. It is inequitable that as between two parties jointly liable the ultimate loss should be fortuitously determined by the injured party’s choice of defendant. Gregory, Contribution Among Joint Tortfeasors: A Defense, 54 Harv.L.Rev. 1170 (1941); Leflar, Contribution and Indemnity Between Tortfeasors, 81 U.Pa. L.Rev. 131, 137 (1932); Note, Toward a Workable Rule of Contribution in the Federal Courts, 65 Colum.L.Rev. 123, 125 n. 19 (1965).

As a matter of legal principle the route to contribution must be via subrogation or assignment based upon payment.¹⁰ In such circumstances we would suppose that there would be nothing to be subrogated to if the other party claimed to be a joint tortfeasor, was never under liability to the injured party. Nor do we readily see any unfairness,' so far as the non-liable party is concerned, for he, by hypothesis, receives no benefit from the satisfaction of the other actor’s liability. Some courts, nevertheless, have found unfairness unless the immune party contributes, without, however, explaining where the unfairness lies. See, e. g., Zarrella v. Miller, 1966, 100 R.I. 545, 217 A.2d 673.

With all due respect, compelling contribution here could be said to be a windfall. But if such decisions are sound they cannot affect the case at bar. In Zarrella the party required to contribute was a husband whose negligence, along with the negligence of the party seeking contribution, had injured his wife. Under state law the husband was immune from suit by the wife. The court held, nonetheless, that he was liable to contribute. Even if Rhode Island would extend this principle to override the workmen’s compensation statute,¹¹ we would not be bound. The immunity being state-created, the state, through its courts, may properly determine its extent. In the case of the FECA the immunity is federally created; its extent must be determined by the federal courts, particularly when the issue is one of government liability.

Looking at the question as one of federal law, we hold that contribution cannot be had from the government when the government was under no tort liability to the injured party. Even when the person obliged to pay was only secondarily liable, and lienee entitled to full indemnity, it has been held that no right arises against the primary actor if, as the employer, he was statutorily immune from tort liability. United Air Lines, Inc. v. Wiener, 9 Cir., 1964, 335 F.2d 379; Bertone v. Turco Products, Inc., 3 Cir., 1958, 252 F.2d 726; Slattery v. Marra Bros., Inc., 2 Cir., 1951, 186 F.2d 134, 139. These are a fortiori cases, as a duty might be thought to arise between one primarily liable directly to the one only secondarily liable. But ef. Slattery v. Marra Bros., Inc., supra, where the court pointed out, in denying recovery, that the only legal relationship was that of joint tortfeasors, each to the injured party. We need not go as far as those courts to hold that contribution is barred in the present case.

The judgment of the District Court is vacated. Judgment for the defendant.

1 . Rhode Island adopted an early version of the Uniform Contribution Among Joint Tortfeasors Act. R.I.Gen.Laws 10-6-1 et seq.

2 . While the word “tort” is in the title, the act itself waives the government’s immunity to “claims * * * for * * * personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government * * 28 U.S.O. § 1346(b). In holding that the waiver was to be broadly construed and applied to contribution,' the Court did not address itself to the question whether a claim for contribution by a joint tortfeasor is, strictly, a tort claim. Nor did it otherwise touch on the issues in the case at bar.

3 . The exclusivity provision with which we are presently concerned was not added until made necessary by the Federal Tort Claims Act. See S.Rep. No. 836, 81st Cong., 1st Sess., quoted by the Court in Weyerhaeuser S.S. Co. v. United States, infra, at 601, n. 5, 83 S.Ct. at 929.

4 . “The liability of the United States or an instrumentality thereof under this sub-chapter or any extension thereof with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States or the instrumentality to the employee, his legal representative, spouse, dependents, next of kin, and any other person otherwise entitled to recover damages from the United States or the instrumentality 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 workmen’s compensation statute or under a Federal tort liability statute. However, this subsection does not apply to a master or a member of a crew of a vessel.” 5 U.S.C. § 8116(c).

5 . “Adjustment after recovery from a third person. If an injury or death for which compensation is payable under this sub-chapter is caused under circumstances creating a legal liability in a person other than the United States to pay damages, and a beneficiary entitled to compensation from the United States for that injury or death receives money or other property in satisfaction of that liability as a result of suit or settlement by him or in his behalf, the beneficiary, after deducting therefrom the costs of suit and a reasonable attorney’s fee, shall refund to the United States the amount of compensation paid by the United States and credit any surplus on future payments of compensation payable >to him for the same injury. The amount refunded to the United States shall be credited to the Employees’ Compensation Fund. If compensation has not been paid to the beneficiary, he shall credit the money or property on compensation payable to him by the United States for the same injury. However, the beneficiary is entitled to retain at least one-fifth of the net amount of the money or other property remaining after the expenses of a suit or settlement have been deducted, plus an amount equivalent to a reasonable attorney’s fee proportionate to the refund to the United States.” 5 U.S.C. § 8132.

6 . Actually, the complaint as filed sought the entire $50,000. However, appellee did not appeal from the court’s award of $8,-600, and informs us that this is the proper figure.

7 . The statement that such limited liability does not interfere with the statutory scheme we cannot accept. It interferes less than would unlimited liability, but, of necessity, it interferes pro tanto.

8 . The “specific provisions to permit an employer to recoup his compensation payments out of any recovery from a third person negligently causing such injuries * * * [are] to protect employers who are subjected to absolute liability by the Act.” 346 U.S. at 412, 74 S.Ct. at 206, supra.

9 . Indeed, thinking of the government as wearing two hats, in its capacity as insurer it is reasonable rather than unreasonable to provide that it recovers from a negligent third party.

10 . Because this is an assignment by operation of law, 31 U.S.C. § 203 forbidding the assignment of claims against the government does not stand in the way. Penn Tanker Co. v. United States, 5 Cir., 1969, 409 F.2d 514.

11 . A distinction has been drawn. Compare Smith v. Southern Farm Bureau Cas. Ins. Co., 1965, 247 La. 695, 174 So.2d 122 with Yale & Towne Mfg. Co. v. J. Ray McDermott Co., 5 Cir., 1965, 347 F.2d 371; McLaughlin v. Braswell, 1968, 251 La. 1076, 208 So.2d 535; Sanderson v. Burnings Constr. Co., La.App., 1965, 172 So.2d 721. If abstract fairness is the test, in the workmen’s compensation cases the employer, at least overall, does incur contractual liability, which is to be offset by immunity in the individual case. Cf. Pope & Talbot, Inc. v. Hawn, supra.