United States District Court, Southern District of New York
March 20, 2003
WENDY DIAZ, PLAINTIFF,
RES-CARE, INC., ET AL., DEFENDANTS. ROSA VENTURA, PLAINTIFF, V. RES-CARE, INC., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Lewis A. Kaplan, District Judge
Res-Care, Inc. ("Res-Care") operates the South Bronx Job Corps Academy under contract with the United States of America. Wendy Diaz, a student at the Academy, allegedly was stabbed on its premises. Rosa Ventura allegedly was injured when she was struck by a motor vehicle belonging to and operated by an employee of Res-Care. Tort suits were brought by or on behalf of each of them in Supreme Court, Bronx County. In each instance, Res-Care sought certification as an employee of the U.S. Department of Labor and substitution of the United States as the defendant in its place. The United States Attorney in each case declined certification. Res-Care moved in the Supreme Court in each action for certification and substitution pursuant to 28 U.S.C. § 2679(d)(3) of the Federal Tort Claims Act ("FTCA"). The government then removed the cases to this Court, whereupon they were consolidated. The matter now is before the Court on Res-Care's motions for certification and substitution.
The FTCA waives sovereign immunity and renders the United States liable for certain tort claims in the same manner as an individual. 28 U.S.C. § 2674. This statutory remedy against the United States is the exclusive remedy. Id. § 2679(b)(1). The Act defines "Federal agency" broadly, covering governmental entities as well as non-governmental entities insofar as they act "as instrumentalities or agencies of the United States." Id. § 2671; see B & A Marine Co. v. Am. Foreign Shipping, 23 F.3d 709, 713-14 (2d Cir. 1994) (discussing this definition). The Act covers also government employees and employees of entities that are "instrumentalities or agencies of the United States." See B & A Marine, 23 F.3d at 713. But the Act specifically "does not include any contractor with the United States." 28 U.S.C. § 2671; see B & A Marine, 23 F.3d at 713.
In an action against a government employee or an employee of a non-governmental agent of the government, the Act provides that the government "shall defend any civil action or proceeding bought . . . against any employee of the Government or his estate for any [covered] damage or injury." 28 U.S.C. § 2679(c). But to trigger this FTCA requirement, it must be certified that the employee acted within the scope of his or her office or employment. First, the Attorney General may certify the case: "Upon certification by the Attorney General that [a] defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim . . . shall be deemed an action against the United States . . ., and the United States shall be substituted as the party defendant." Id. § 2679(d)(1). Second, if the Attorney General does not certify the case, the trial court may do so: "In the event that the Attorney General has refused to certify scope of office or employment . . ., the employee may at any time before trial petition the court to find and certify that the employee was acting within the scope of his office or employment." Id. § 2679(d)(3). Such certification by the court has the same effect as certification by the Attorney General. Id.
Res-Care here seeks certification by the Court under Section 2679(d)(3). The government contends that this Court lacks the power to review its refusal to certify Res-Care under that statute because Section 2679(d)(3) applies only to government employees. In any case, it argues that Res-Care clearly is not entitled to certification.
As an initial matter, the Court is inclined to agree with the government's threshold argument, viz. that Section 2679(d)(3) affords a right of judicial review of certification decisions only to individual employees of the government and, possibly, of agents of the government. That seems to be the clear import of the text of the statute. Moreover, the gist of Res-Care's claim appears to be that the liability, if any, is that of the United States not because Res-Care was an employee of the United States in any ordinary sense, but because it was an instrumentality or agent of the United States within the meaning of Section 2671. In view of the exclusivity of the FTCA remedy, it presumably is entitled to assert in defense of the tort claims against it that plaintiffs' remedies, if any, are against the United States alone and, if unsuccessful on that claim, to seek appellate review. But there is no need to decide any of those questions here, as the Court is satisfied that there is no substance to Res-Care's contention that it was an agent, instrumentality or employee of the United States under any standard.
The principal case relied upon by Res-Care is B & A Marine. The Second Circuit there held that a non-governmental corporation that operated pursuant to a service agreement with the Maritime Administration and one of its employees were agents of the United States and that the government was to be substituted as a defendant in an action against them. It relied most heavily upon two circumstances. First, "the contract between MARAD and AFS expressly provided that AFS would serve `as [MARAD'S] agent, and not as an independent contractor.'" B & A Marine, 23 F.3d at 713 (quoting the contract). Second, the details of the agreement — notably a requirement that AFS "`manage and conduct the business for the United States in accordance with such directions, orders or regulations . . . as the United States may from time to time prescribe'" — "confirm[ed] that it created an agency relationship" under settled principles of agency law. Id. (emphasis in original) (quoting the contract).
The circumstances of this case are quite different. Unlike the contract at issue in B & A Marine, the Res-Care contracts do not provide that Res-Care would operate the Center as the Labor Department's agent and not as independent contractor. Indeed, the contracts between Res-Care and the Department of Labor explicitly characterize Res-Care as "contractor" rather than as "agent." McShain Decl. Exs. D, E. The initial contract described the Job Corps programs, insofar as they involve entities such as Res-Care, as centers "usually operated by private contractors selected in a competitive process." Id. Ex. D, at C-9. In each, the contractor undertakes to "provide material, services, and all necessary personnel to operate a Job Corps center." Id.; id. Ex. E, at C-1.
Further, while the contracts give the government a good deal of say in how the Center would be operated, they do not provide for the kind of arrangement in which courts ordinarily find an agency relationship. See, e.g., B & A Marine, 23 F.3d at 713. The contracts do not go nearly as far as the contract at issue in B & A Marine and do not give the government the sort of control that perhaps would warrant the conclusion that Res-Care was an agent of the United States. While each of the Res-Care contracts contains a section entitled "Inspection and Acceptance," which names a Government Authorized Representative ("GAR") to inspect and monitor the Center, each limits the authority of the GAR largely to ensuring that the contractor complies with the contract and, in some instances, to recommending program changes and to approving certain project staff. Each provides that the GAR may not sign contractual documents or approve any changes to the scope, price, terms or conditions of the contract. McShain Decl. Ex. D, § E; id. Ex. E, § I(E). Certainly, the Labor Department does not possess the power "to control the detailed physical performance of" Res-Care, which is "[a] critical element in distinguishing an agency from a contractor." United States v. Orleans, 425 U.S. 807, 814 (1976) (internal quotation marks omitted) (quoting Logue v. United States, 412 U.S. 521, 528 (1973)). In addition, the Labor Department does not "in fact supervise the `day-to-day operations'" of Res-Care. See B & A Marine, 23 F.3d at 713 (quoting Orleans, 425 U.S. at 815).
Accordingly, Res-Care's motions for certification and substitution are denied and the cases remanded to the Supreme Court of the State of New York, Bronx County. See 28 U.S.C. § 2679(d)(3).
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