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IN RE "AGENT ORANGE" PROD. LIAB. LITIG.

February 10, 1984

In re "AGENT ORANGE" Product Liability Litigation.


The opinion of the court was delivered by: WEINSTEIN

PRELIMINARY MEMORANDUM ON GOVERNMENT LIABILITY PRETRIAL ORDER NO. 91

WEINSTEIN, Ch. J.:

 Plaintiffs, Vietnam war veterans and members of their families, sue defendant chemical companies to recover damages for injuries allegedly sustained as a result of exposure to Agent Orange in Vietnam. The defendants impleaded the United States under F.R.Civ.P. 14(a), claiming that if they were liable to the plaintiffs, the United States would be liable to them for some or all of the damages they would have to pay. This court, upon motion by the United States, dismissed the third-party complaint, relying upon Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 97 S. Ct. 2054, 52 L. Ed. 2d 665 (1977).In re "Agent Orange" Product Liability Litigation, 506 F. Supp. 762 (E.D.N.Y. 1980). No order of dismissal was, however, entered.

 Defendants have moved for reconsideration of the dismissal, arguing that (1) the Supreme Court's decision in Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 103 S. Ct. 1033, 74 L. Ed. 2d 911 (1983), implicitly overruled Stencel or at least indicated doubt on the Court's part as to its continued vitality and (2) even if Stencel is still good law the doctrine of that case does not apply to the independent claims of the wives and children of the veterans. For the reasons indicated below, upon reconsideration, the government's motion to dismiss the third-party complaint is granted only as to the claims by the veterans and the derivative claims by their family members. The government's motion to dismiss is denied as to the independent claims of the plaintiffs' wives and children.

 I. INTRODUCTION

 Under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), et seq., the United States waives its sovereign immunity from suits in tort, and vests jurisdiction over such claims exclusively in the United States District Courts. In United States v. Yellow Cab Co., 340 U.S. 543, 71 S. Ct. 399, 95 L. Ed. 523 (1951), the Supreme Court held that, pursuant to the FTCA's language, that the United STates is liable "under circumstances where * * * a private person would be liable to the claimant," 28 U.S.C. § 1346(b), the United States may be made a third-party defendant in those situations where a private party could have been impleaded.

 Although the FTCA "waives the Government's immunity from suit in sweeping language," United States v. Yellow Cab Co., 340 U.S. at 547, 71 S. Ct. at 402, the waiver is limited by the terms of the Act's exceptions.If a claim falls within any exception to the FTCA, sovereign immunity has not been waived and the court is without jurisdiction to hear the case. United States v. Orleans, 425 U.S. 807, 814, 96 S. Ct. 1971, 1975, 48 L. Ed. 2d 390 (1976). One of those exceptions was recognized by the Surpeme Court in Feres v. United States, 340 U.S. 135, 71 S. Ct. 153, 95 L. Ed. 152 (1950). That case and subsequent cases interpreting it hold that a member of the armed forces cannot sue the government in tort of injuries which "arise out of or are in the course of activity incident to service." Feres, 340 U.S. at 146, 71 S. Ct. at 159. This judicially created exception was based on three grounds:

 1. The existence of a separate, uniform, comprehensive no-fault compensation scheme for members of the armed forces administered by the Veterans' Administration, similar in effect to workers' compensation plans;

 2. The adverse impact on military discipline and effectiveness were servicepersons allowed to sue the government and;

 3. The distinctively federal nature of the relationship between the United States and members of the armed forces which would make it unfair and irrational to have "the Government's liability to members of the armed services dependent on the fortuity of where the soldier happened to be stationed at the time of the injury." Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 671, 97 S. Ct. 2054, 2058, 52 L. Ed. 2d 665 (1977).

 II. CONTINUING VALIDITY OF STENCEL

 In Stencel, the Supreme Court held that where Feres barred the serviceman-plaintiff from suing the government directly for his injuries, a defendant who was held liable to the plaintiff for those injuries could not require the United States to indemnify it for any damages it had to pay. The court examined all three legs of Feres and found them as applicable to the impleader action as to a direct suit.

 Stencel was the first of several cases dealing with the question of whether the United States may be held liable under the FTCA as a third-party defendant for injuries to a plaintiff government employee when that employee would be barred from suing the United States directly. In those cases, the Supreme Court and the lower federal courts have ground down the rationales of Feres and Stencel to the point where the defendants strongly contend that Stencel's holding is no longer regarded by the Supreme Court as viable.

 The first sign of erosion appeared in Weyerhaeuser S.S. Co. v. United States, 372 U.S. 597, 83 S. Ct. 926, 10 L. Ed. 2d 1 (1963). That case arose out of a collision between a vessel owned by the United States and one owned by Weyerhauser. A civilian employee of the United States who was injured in the collision while on board the government vessel recovered damages from Weyerhauser which sued the United States to recover the amount it paid. The Supreme Court held that although the employee would have been barred by the Federal Employees' Compensation Act, 5 U.S.C. § 751, et seq., from suing the United States directly, Weyerhauser could nonetheless recover from the United States the money it had paid out to the employee.

 Weyerhauser clearly implicated the first leg of Feres in that, like the Veteran's Benefit Act which covered the military serviceman in Feres, the Federal Employees Compensation Act is a separate, uniform, comprehensive no-fault scheme similar to workers' compensation schemes. Weyerhauser was even stronger than Feres, for, unlike the Veterans Benefit Act, the FECA contains an explicit "exclusivity provision" barring suit by an employee against the United States for injuries compensable under the FECA. Thus, if the existence of the veterans benefits justifies barring a suit against the United States despite the lack of an exclusivity provision, the FECA a fortiori should have. The Supreme Court distinguished Feres, although it did not cite it, by emphasizing the long history of the divided damages rule in mutual fault collision cases in admiralty and concluding that given that history, the divided damages rule was not affected by FECA's exclusive liability provision.

 Ionian Glow Marine, Inc. v. United States, 670 F.2d 462 (4th Cir. 1982), cert. denied, 460 U.S. 1021, 103 S. Ct. 1271, 75 L. Ed. 2d 493 (1983), was similar to Weyerhauser except that the injured employees were Naval personnel instead of civilians, the United States ship was a naval vessel, and the United States had conceded liability.Unlike Weyerhauser, therefore, the military discipline rationale of Feres was implicated, not just the "separate compensation scheme" rationale. The third rationale, the federal nature of the relationship, was, of course, not implicated since, as a suit in admiralty, federal law was applied. Faced with a clash between Weyerhauser and the divided damages rule on the one hand the Feres-Stencel on the other, the Fourth Circuit tipped the balance in favor of the former and allowed Ionian to recover from the United States the damages it had paid for injuries to military personnel.The court stated that while "it is . . . beyond question that if the present suit were in the form of an indemnity suit under the FTCA it would be barred," since the suit was "a mutual fault collision case in admiralty under the long established rule of divided damages" it is not "affected by the Feres-Stencel Aero doctrine." 670 F.2d at 463.

 The defendants rely heavily on the government's brief in Ionian Glow seeking certiorari in which it adverted to "the apparent inconsistency between Feres and Stencel Aero on the one hand, and Weyerhauser on the other, [as] a conflict that only this Court can finally resolve." Petition for a Writ of Certiorari in United States v. Ionian Glow Marine, Inc., at p. 11. Whatever the implication in that brief of the government's concern about undermining Feres, denial of certiorari negates any conclusion about the Surpeme Court's conclusion on the matter. Ionian is but a straw in the wind on the issue before us.

 Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 103 S. Ct. 1033, 74 L. Ed. 2d 911 (1983), also involved a variation on the Weyerhauser fact pattern. The difference here was that the government employee, while a civilian, was killed in the crash of a C-5A aircraft while flying out of Saigon, rather than in a naval vessel. The administrator of the employee's estate recovered damages from Lockheed, the manufacturer of the aircraft. Lockheed, in turn, had impleaded the United States as a third-party defendant, asserting a right to indemnification under the Federal Tort Claims Act. As in Weyerhauser, the United States contended that the Federal Employee's Compensation Act barred not only any direct recovery by the estate, but also any indirect recovery through third-party liability. On the other side of the equation, the divided damages rule of admiralty which in Weyerhauser was used to justify allowing recovery against the United States as a third-party defendant was not applicable. Nonetheless, the Supreme Court allowed the indemnification claim, in the process explicitly erasing any legal difference between a third-party claim in admiralty and one not in admiralty. Realizing that this holding seriously called into question the "separate compensation scheme" rationale of Feres-Stencel, the Supreme Court noted in passing that Feres "rel[lied] primarily on the military nature of the action." 103 S. Ct. at 1038 n.8.

 The defendants contend that the only way to harmonize Ionian Glow, which held that defendants sued by military personnel for injuries suffered in the course of service may recover in admiralty from the government in indemnity or contribution, and Lockheed, which erased any distinction between admiralty and non-admiralty cases, is to conclude that Stencel is no longer good law. They attribute the footnote in Lockheed reaffirming Stencel to the Supreme Court's known reluctance to overrule an older case when the case before it does not require such action.

 Defendant's arguments have some force, especially when viewed in light of the widespread, almost universal criticism of Feres by the lower federal courts and commentators. See, e.g., Hinkie v. United States, 715 F.2d 96 (3d Cir. 1983) ("We are forced once [the] result."); Scales v. United States, 685 F.2d 970, 974 (5th Cir. 1982) (applying Feres "reluctantly" and "regret[ing] the effects" of the conclusion); Hunt v. United States, 204 U.S. App. D.C. 308, 636 F.2d 580, 589 (D.C. Cir. 1980) ("the Feres doctrine clearly lives, although its theoretical bases remain subject to serious doubt"); Veillette v. United States, 615 F.2d 505, 506 (9th Cir. 1980) (applying Feres "reluctantly"); Peluso v. United States, 474 F.2d 605, 606 (3d Cir.), cert. denied, 414 U.S. 879, 38 L. Ed. 2d 124, 94 S. Ct. 50 (1973) ("If the matter were open to us we would be responsive to the appellants' argument that Feres should be reconsidered * * *"); Hitch, The Federal Tort Claims Act and Military Personnel, 8 Rutgers L. Rev. 316 (1954); Rhodes, The Feres Doctrine After Twenty-Five Years, 18 A.F.L. Rev. 24 (1976); Note, From Feres to Stencel: Should Military Personnel Have Access to FTCA Recovery?, 77 Mich. L. Rev. 1099 (1979).

 Perhaps a pathbreaking appellate court might discern enough emanations of Supreme Court disquiet to predict that Court's future conduct in limiting Feres. Cf. B.K. Instrument, Inc. v. United States 715 F.2d 713 (2d Cir. 1983) (Friendly, J.) (anticipating Supreme Court's reversing itself in light of subsequent developments). Viewed from this level of the court hierarchy there appears no weakening in Feres-Stencel sufficient to apply the Lockheed-Ionian Glow theory of defendants. Although Stencel may rest on the very shaky foundations of Feres, both cases were at least impliedly reaffirmed as recently as this past June. See Chappell v. Wallace, 462 U.S. 296, 103 S. Ct. 2362, 76 L. Ed. 2d 586 (1983). As to harmonizing Lockheed and Ionian Glow, in Ionian Glow the government conceded liability. There was therefore no need for the court to inquire into military decisions in order to hold the government liable. As a result, the second rationale of Feres, the deleterious effect judicial scrutiny would have on military discipline, was not implicated.

 By arguing for both the application of the government contract defense and for the abolition of Stencel, the defendants have taken somewhat inconsistent positions: the government contract defense is premised, in large part, on the argument that it is unfair to hold defendants liable for acts that were done at the government's behest since the government itself is immune from liability. If defendants' argument to disregard Stencel is accepted, the government will not be immune and thus the rationale for the application of the government contract defense largely disappears. McKay v. Rockwell International Corp., 704 F.2d 444, 449 (9th Cir. 1983), cert. denied, 52 L.S. 3505, January 10, 1984.

 An argument can be made that the servicemen have, in effect, made a claim for post-discharge malpractice or failure to warn by the Veterans' Administration. The issue is not completely clear. It has already been dealt with by this court's somewhat dubitante rejection of the contention. In re "Agent Orange" Product Liability Litigation, 506 F. Supp. 762, 777-779 (E.D.N.Y. 1980). For the nonce we reafirm that view, though as indicated below ...


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