Summary
In Roelofs, it was assumed that the United States, had it been a private employer, would have been liable for workmen's compensation under the Louisiana statute.
Summary of this case from Richardson v. United StatesOpinion
No. 72-3475.
September 16, 1974.
Donald E. Walter, U.S. Atty., D. H. Perkins, Jr., Asst. U.S. Atty., Shreveport, La., Morton Hollander, Chief, Appellate Sec., James C. Hair, Michael Kimmel, Attys., Civ. Div., U.S. Dept. of Justice, Washington, D.C., for defendants-appellants
Wilton H. Williams, Jr., Shreveport, La., for intervenor, Travelers Ins. Co.
Kenneth Rigby, Shreveport, La., for Roelofs.
Jack C. Benjamin, New Orleans, La., for Durham.
L. L. Lockard, Shreveport, La., for Montgomery et al.
James J. Thornton, Jr., Nesib Nader, Hugh M. Stephens, Shreveport, La., for Tewell et al.
Donald R. Miller, Paul R. Mayer, Shreveport, La., for Thomas et al.
Lewis Weinstein, Shreveport, La., for McKinney, Peterson, Holland and Jackson.
Appeal from the United States District Court for the Western District of Louisiana.
Before BROWN, Chief Judge, and RONEY and GEE, Circuit Judges.
This interlocutory appeal raises an interesting and novel problem under the Federal Tort Claims Act. The question is whether the Government may invoke a defense available to private employers under the Louisiana Workmen's Compensation Statute despite the fact that the United States, due to its preeminent sovereign immunity, could not be compelled to comply with the obligations of a private employer under the statute. The District Judge held that to permit the Government to raise the defense envisioned by the statute was the equivalent of the Government subjecting itself to suit under a local compensation system — an unauthorized waiver of sovereign immunity not contemplated by Congress. He rejected the defense. Disagreeing with these conclusions, we reverse.
To bring the problem closer to earth it is one of harmonizing the FTCA and the Louisiana Compensation Act. Under FTCA the tort liability of the Government is extended to tort claims for negligent damage to person or property "under circumstances where the United States, if a private person, would be liable . . . in accordance with the law . . ." of the place of the tort. Tied as it is to liability of a private actor under local law, the case brings in famed § 6 of the Louisiana Compensation Act.
§ 6 imposes on the party for whom work is being done by a contractor (or subcontractor) the obligation of paying workmen's compensation to an injured employee of such contractor/subcontractor. The key is whether in the work at hand the contractor/subcontractor is doing work ". . . which is a part of [the] trade, business, or occupation" of the party for whom the contracted work is being performed.
Principal contractors; liability
23:1061
Where any person (in this section referred to as principal) undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person (in this section referred to as contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he should have been liable to pay if the employee had been immediately employed by him; and where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Chapter reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the employer by whom he is immediately employed.
Where the principal is liable to pay compensation under this Section, he shall be entitled to indemnity from any person who independently of this Section would have been liable to pay compensation to the employee or his dependent, and shall have a cause of action therefor.
But while Louisiana, so its courts have many times said, adopted this device as a means of subverting the payment of compensation through the device of impecunious contractors, its significance here is not in an asserted right by the claimants to recover Louisiana Compensation payments from the Government. Indeed, that is the last thing wished, hoped or prayed for. Rather it is that under Louisiana jurisprudence § 6 in imposing a vicarious liability for compensation payments clothes that party with the status of a "principal" or more descriptively, a "statutory employer," so that it will not constitute a suable "third person" under the provisions of the Act permitting suit by an employer (or his carrier) or an employee where the injury/death has been caused by the negligence of another.
This immunity to third party suit, presumably the creature of judicial interpretation of § 6 has survived the direct assault of the organized Louisiana plaintiffs bar and stands as a lion in the street unless on minute facts the case is outside the "usual, trade, or business."
The significance of all of this here is that since the Government neither had nor was subject to an enforceable obligation to procure Louisiana compensation insurance, for it to have the Louisiana judge-made § 6 third party immunity would be, the claimants successfully urged below, to afford it the benefits with none of the burdens. Stated another way, their contention is that the § 6 immunity extends only to principals who are legally required to pay compensation. If that legal obligation is missing, so is § 6 immunity
The District Court agreed with this thesis. But as the claimants could not ever recover if this holding was reversed even if they jumped the § 6 "usual trade business or occupation" hurdle, the District Court certified this appeal, 28 U.S.C.A. § 1252 which we allowed.
In the resolution of the basic § 6 problem, the facts can be quickly capsulated. These are eleven FTCA suits by contractor-employees for injuries sustained from the operation of the Louisiana Army Ammunition plant near Minden, Louisiana. The plant is a government-owned facility privately operated by Sperry Rand Corporation pursuant to a contract with the Ammunition Procurement And Supply Agency of the United States Army (No. DA-11-173-AMC-80). Under the contract Sperry Rand hires the employees, prepares and loads the products for shipping, and generally does all jobs necessary to operate the plant. The cost-plus-fixed-fee contract obligates Sperry Rand to maintain workmen's compensation for the plant employees and the premiums for that insurance are reimbursed by the government as a regular contract expense. Such coverage was obtained and in effect at the time of the accident that resulted in these suits.
If we approach this with literalism the Government cannot prevail. This is so because Louisiana cannot impose on it a legal obligation either to procure compensation insurance or to pay compensation benefits. (See note 8 supra). But this is not the history of FTCA or its generous development by the Supreme Court. That Act is given a broad interpretation to effectuate the legislative aim of putting citizen and national sovereign in tort claims suits on a footing of equality as between private parties within that state. Nice pieces of casuistry and hypersensitive legalisms are avoided.
Thus, in Indian Towing the Court considered the Government argument that "the language of § 2674 (and the implications of § 2680) imposing liability 'in the same manner and to the same extent as a private individual under like circumstances . . .' must be read as excluding liability in the performance of activities which private persons do not perform. Thus, there would be no liability for negligent performance of uniquely government functions." Declaring that "we would be attributing bizarre motives to Congress were we to hold that it was predicating liability on such a completely fortuitous circumstance — the presence of identical private activity . . . [and there] is nothing in the Tort Claims Act which shows that Congress intended to draw distinctions so fine-spun and capricious as to be almost incapable of being held in the mind for adequate formulation." The Court held that the "language of the statute does not support the Government's argument." The Court rejected literalism and read the private person liability of § 1346 (see note 2 supra) as being "designed to . . . compensate the victims of negligence in the conduct of governmental activities in circumstances like unto those in which a private person would be liable . . .."
Next, the Court in Rayonier, limiting sharply some of its pronouncements in the Texas City Disaster Case, held that the Government would be liable under vicarious Washington laws for fire fighting derelictions even though there was not like private activity and all usual activity — that of municipalities — would be subject to no liability.
We have done similarly in Gavagan where, against a similar Governmental assertion that there was no like private activity, we held the Government accountable under FTCA for a land-air-sea rescue search.
Of course, we are not dealing here with interpretations on coverage of FTCA. Rather, it is on defenses. But we see no reason why in this liability by local standards criteria a like and sensible approach is not given to local defenses.
This takes us to the Louisiana aim of § 6 to assure compensation benefits to employees of contractors doing work for others. At bottom, claimants argue that the essence of the statute was to insure the employee "two debtors not one." But one thing that is not intended is double payment of compensation, once by the "actual" employer and once by the "statutory" employer. Indeed, while pursuit can in the Louisiana codal language be in solido, which is to say against (i) actual employer, (ii) statutory employer or (iii) both, only a single recovery is permitted.
Of course this objective is accomplished through the unquestioned requirement that Sperry Rand, the contractor, maintain at the Government's expense workmen's compensation. Not only was it done in fact, but presumably it was done in accordance with established policies which have the effect of not only relinquishing any claim to Federal territorial sovereignty over lands of the Federal enclave, but carrying out the substantive policies of § 290 (see note 8 supra) to assure privately-employed workers on Federal projects equal treatment with other industrial laborers in the state. Thus the goals of Louisiana and the United States are mutually met. The workers have the protection in fact, that they would have if, in addition to Sperry Rand's insurer, they would have the direct obligation of the Government. On the other hand, with this assured in fact,fn20 the Government, having seen to it that compensation by the contractor is afforded at the Government's expense, is, as would be a private Louisiana statutory employer, entitled to the § 6 immunity.
The key finally is the existence of adequate insurance required and paid for by the Government. Whether the result would be the same if the Government contract did not require maintenance of compensation insurance is a matter for another day.
Reversed.
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(b) * * * the district courts * * * shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, * * * for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
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In addition the liability of the United States is set out in 28 U.S.C.A. 2674:The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages.
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Principal contractors; liability
23:1061
Where any person (in this section referred to as principal) undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person (in this section referred to as contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he should have been liable to pay if the employee had been immediately employed by him; and where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Chapter reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the employer by whom he is immediately employed.
Where the principal is liable to pay compensation under this Section, he shall be entitled to indemnity from any person who independently of this Section would have been liable to pay compensation to the employee or his dependent, and shall have a cause of action therefor.