The delay has all been in the Congress-not all of it, of course-but of the 8 years, 6 were spent in courts and not in Congress.

Mr. LANE. Maybe it was a necessary delay, Congressman Thompson. In view of the fact that we have a new committee for the most part, it may be well for this subcommittee to go to Texas City and obtain as much information and possible, and I assume that if they do decide later on to go to Texas City with yourself or the attorneys representing all these claimants and these various lawyers representing a good many of these claimants, you could meet with the committee and have a further hearing in that location?

Mr. THOMPSON. The committee, or any individuals, Mr. Chairman, would be most welcome to come to Texas City, or our lawyers will meet them wherever they might want to go.

Mr. LANE. Any questions from members of the committee?

Mr. MILLER. Mr. Thompson, do I understand that your bill in its present form does not intend to accomplish payment of subrogation claims?

Mr. THOMPSON. My bill, I think, includes them. Here you get a layman's opinion as against a lawyer's. But no one is excluded.

Mr. MILLER. Is your intent to include in its compass a subrogation plan?

Mr. THOMPSON. It was my intent that everyone who suffered damage at the hands of the Government shall come under it.

Mr. MILLER. Including subrogation?

Mr. THOMPSON. Yes. Subrogation-and excluding no one.

Mr. MILLER. That would be my conclusion from reading the bill. Mr. THOMPSON. That is the opinion of my lawyers.

Mr. LANE. Thank you, Congressman Thompson.

The next witness we have is Mr. Warren E. Burger, Assistant Attorney General of the Department of Justice and Mr. Morton Liftin of the Department, and Mr. George Spangler, another Department of Justice attorney who worked on this case.

Mr. LANE. You may sit down and proceed as you wish.

STATEMENT OF WARREN E. BURGER, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF JUSTICE, WASHINGTON, D. C.

Mr. BURGER. Mr. Chairman, I am not too clear just what it is that the committee may want in the way of comment from the Department of Justice because the proponents of the bill have only outlined the position as Congressman Thompson has now indicated his support of it.

Mr. LANE. Why don't you do this, Mr. Burger. Why don't you proceed with the history as far as your Department is concerned as briefly as possible so the members of the committee may have it in their minds?

Mr. FORRESTER. Mr. Chairman, may I interject a comment.

I think it will be quite helpful to me personally if I heard the legal grounds of the case, the position on the part of the Department of Justice. I understand the Supreme Court then concurred in that position. Then, of course, the witness will understand that we are here now as a matter of equity. But I do think we should hear some of the law in order that we may resolve that equity. I would be inter

ested to hear the Government's position in respect to the law and so forth.

Mr. BURGER. Mr. Chairman and Congressman, we certainly would be glad to try that. However, I do not know-I was under the impression that this bill was being both offered and entertained as something of a relief measure in which the legal questions long since resolved are not pertinent. But we will try to answer as briefly as we can the Government's position.

Mr. FORRESTER. I understand we are sitting now more as a court of equity and I have the idea if we pass on it from that viewpoint we must understand the law.

Mr. BURGER. I might say in answer to that that as I recall it, the Supreme Court allowed us 6 hours on argument which is a remarkable amount of time based on a record of 40,000 pages and the proposition based on it. Unless this committee is going to spend several days as the Supreme Court did, we are not going to be able to do a good job to give a real treatment of the legal points.

Mr. FORRESTER. I do not think we have to go into it excessively. we can get a bird's-eye view as we go along.

If

Mr. BOYLE. May I further limit the scope of that inquiry. The United States Court of Appeals unanimously reversed the trial judge. Didn't it?

Mr. BURGER. It did.

Mr. BOYLE. Well, tell us that.

Mr. BURGER. At this point I could save the committee's time if I would refer the answer to that question to Mr. Liftin who argued this part of the case in the United States Supreme Court and who is familiar with the details, I think, to a degree beyond my grasp of it and if the chairman will permit, I will ask Mr. Liftin to state, in substance, what the courts did.

Mr. BOYLE. Well, tell us that.

Mr. LIFTIN. Yes, sir.

Mr. BURGER. Mr. George Spangler is another colleague of mine who worked on this case.

STATEMENT OF MORTON LIFTIN, ATTORNEY, DEPARTMENT OF JUSTICE, WASHINGTON, D. C.

Mr. LIFTIN. I would like to make one point clear-it is that from the very beginning of this case the Government argued vigorously and introduced very solid evidence that there was no negligence on the part of the United States. And although the finding in the district court was adverse, there was very considerable support for the Government's position that there was no negligence, both in the court of appeals and in the Supreme Court.

I believe it is important, to dissipate right at the start, the opinion or the argument which has been made somewhat persuasively, I believe, that the negligence of the Government must be assumed.

Some of the opinions in the appellate court said that even if the Government were negligent there would be no liability. But a reading of this opinion makes it clear when they did not assume that the Government was negligent. They said they did not even have to pass on that question and as that is part of the reasoning of the court of appeals it reversed the findings of the district court. The district

court made what both courts regarded as prolific and profuse findings of negligence but they were not accepted on their face as facts by the reviewing courts. They were accepted just for the purpose of the law.

In the court of appeals which reversed unanimously there were three separate opinions. The opinions of two of the judges, Judge Hutcheson and Judge Borah, said the findings of the district court were clearly erroneous and could not stand on the record made. That was a finding of two of the justices.

Mr. FORRESTER. On the question of fact.

Mr. LIFTIN. The findings were clearly erroneous and they were in favor of sending the case back for retrial in accordance with the law because of a lot of errors that were made. They said as a matter of law the case had been stated in the complaint and they were not prepared to throw out the case altogether. But they said the findings of negligence were erroneous and 2 of the 6 judges who heard the case in the court of appeals were reversed for that.

The third judge, Judge Strum, in a separate opinion ruled there was no evidence of negligence on the part of the United States and he would have reversed and found for the United States without sending the case back.

Mr. FORRESTER. On the facts?

Mr. LIFTIN. Yes.

So we have 3 of the 6 judges on the facts saying that the evidence of negligence cannot stand. Now the other three judges held that they did not have to reach the facts because, as a matter of law, the United States could not be held. But in doing so they rejected enough of the findings of the district court to say: "We cannot accept the district court's findings that the Government was negligent in conducting this program. We cannot accept the evidence that the danger was so well known that the Government should not have undertaken this project." They threw that out and said: "Assuming the Government could properly undertake it, we find as a matter of law in the procedure it followed enough governmental discretion was involved to take the case outside the scope of liability under the Federal Tort Claims Act."

But they did not accept the findings of negligence at all. They just held in a limited area that it was not necessary to pass upon them. So, we have not a single judge of the six judges who reviewed the case in the court of appeals accepting, as a factual matter, the evidence of negligence. Three explicitly rejected the findings of wrong and three others rejected some and assumed the other findings of law but not one accepted it.

In the Supreme Court the situation was a little bit different. A majority of four said, as a matter of law the Government is not liable here. But in the course of its opinion it makes clear that it does not accept the findings of negligence and says explicitly at one part of the opinion that no proper review of this case could be had by accepting the findings of the district court on their face.

So that even though the Supreme Court said, we do not have to examine and make our own determination with respect to negligence on the basis of the record, we can, as a matter of law, and we do, as a matter of law, hold that the Government, as a matter of law, is not liable here.

But interspersed through this opinion are statements which reject, as the relevant parts of the opinion, the findings of negligence of the district court. One example is labeling of this substance. It is said it was labeled "fertilizer. It was also labeled "ammonia nitrate"

in large, visible letters.

The Supreme Court said that even though the district court found that the Government should have labeled this as an explosive, that it was very likely a violation of the Interstate Commerce Commission's and Coast Guard's regulations to label it as "explosive." It was labeled as it was required by the Interstate Commerce Commission and Coast Guard regulations.

Mr. FORRESTER. May I interrupt you?

The statement was made that the Government manufactured that fertilizer. Did the Government manufacture it?

Mr. LIFTIN. It is not quite that. It was a cost-plus contract manufacturer who manufactured this for the Government.

Mr. FORRESTER. If the Government did it, or had any part in it, it was either a legal one or had been sanctioned by the authority of the Government of the United States. If the Government of United States sanctioned it, could there possibly be any doubt about it?

Mr. LIFTIN. You put your finger on the heart of the argument which we call the discretionary function examined under the Tort Claims Act. That is the essence of the legal basis on which the case was thrown out as a matter of law, namely, that certainly the Government in the exercise of its discretion could undertake this program. Mr. FORRESTER. Here is what is going on in my mind.

No. 1. If it is legal then there can be no right of action. If you proceed according to law it is controling. Then the next question comes up to me that if pursuant to the performance of a legal authority then would the Government be liable if someone in carrying out that authority did not exercise the proper discretion.

Mr. LIFTIN. If there was negligence of individuals in carrying out the program-for example, if a Government truck loaded with some of this fertilizer, carrying it to a railroad depot or to a plant, and they drove at an excessive speed or otherwise negligent in carrying out the program if they did not follow the specifications in the directives and introduced substances which made it much more dangerous

Mr. FORRESTER. Then they are liable. But if it is an act of discretion how about that?

Mr. LIFTIN. Now, we are getting into what is a very cloudy area of the law. If it involves what we regard as governmental judgment that is not simply negligence in the course of a man's dutythat is someone making a decison that the Government needs this fertilizer and we ought to ship as ICC regulations require we ship it, and we ought to come for instructions, and do other things governing the way it has always been done-and this is a matter of governmental decision, then we say those are discretionary functions and the courts cannot question the executive decisions in these matters. Mr. FORRESTER. And the Government waives immunity on acts of discretion.

Mr. BURGER. In other words, the injured persons in that position would be in the situation that one would be in where the Government

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forbade the making of intoxicating liquor. Then, no liability would be allowed in the courts nor in the Congress.

Mr. DONOHUE. Where would the discretion be insofar as those actions were concerned? As I recall the case, the Government undertook to send this amonium nitrate to France and they were loading these boats down in Texas City.

Mr. BURGER. That is correct.

Mr. DONOHUE. And the negligence came about in the loading of these packages of ammonium nitrate aboard ship. It that right? Mr. BURGER. That was an allegation that there was negligence but the Government had nothing to do with the loading.

Mr. DONOHUE. I thought that was pretty well substantiated by the people who participated in the loading of the vessels.

Mr. LIFTIN. I would say there was a lot of evidence on that score. But there was no finding that the negligence is found there.

Mr. DONOHUE. Perhaps I am not approaching it as I should. The Government undertook to ship this ammonium nitrate to France. Is that correct?

Mr. LIFTIN. That is correct. It was going to France.

Mr. DONOHUE. The Government was the principal and they were carrying it out through this transportation company.

Mr. LIFTIN. Yes; but they were all private facilities—the local railroad, the local warehouse, and the shipping companies. The United States has no part in that.

Mr. DONOHUE. It is the old theory that whoever sets in motion a dangerous instrumentality is responsible for whatever happens in the course of carrying out the use of it. If these is any taint of negligence connected along the line

Mr. LIFTIN. Going back on that doctrine that is limited to things which are inherently dangerous and that does not apply here. It is not inherently dangerous. It is not known to be dangerous. It is shipped as a perfectly safe substance-not as an explosive.

Mr. DONOHUE. Well then, before this was used and determined as useful for agricultural purposes for fertilizer, what did the Government use it for?

Mr. LIFTIN. Ammonium nitrate had been used as a component of an explosive but it had gradually grown into disuse because ammonium nitrate was not sensitive to detonation. Once you got it to explode it exploded with immense force. It is an ingredient of TNT. But it is the other substance with it that makes it sensitive to explosion.

The principal characteristic of the ammonium nitrate is that it gives great force to explosion once it can be made to explode. But it had grown into disuse even during World War II because it was not readily subject to explosion. It had always been used as fertilizer.

Mr. DONOHUE. But the Government was using it and manufactured it for the purpose of explosives?

Mr. LIFTIN. It had been used in that connection.

Mr. DONOHUE. And it was stored right up until this particular time when they decided to send it to France to be used in the matter of waging war?

Mr. LIFTIN. I do not think so.

Mr. BURGER. This was specially made for the special purpose of being sent to France as ammunition.