March 24, 1954.—Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. REED of Illinois, from the Committee on the Judiciary, submitted the following

REPORT

[Pursuant to H. Res. 296, 83d Cong., 1st sess.]

House Resolution 296 of the 83d Congress, 1st session, sponsored by Hon. Clark Thompson of Texas, directed the Committee on the Judiciary, acting as a whole or by subcommittee, to make a full and complete investigation and study of the merits, if any, of all claims against the United States for compensation for property damage, personal injuries, and death alleged to have been caused by the explosions which occurred at Texas City, Tex., on April 16 and 17, 1947. Representative Chauncey Reed, chairman of the Committee on the Judiciary, appointed a special subcommittee composed of Representatives Edgar A. Jonas of Illinois, chairman, DeWitt Hyde of Maryland, and Thomas J. Lane of Massachusetts to proceed under this resolution.

This is the report of the special subcommittee as unanimously adopted by the full committee. The special subcommittee in its investigation conducted hearings for 3 days at Galveston and Texas City, Tex. In addition, it had at its disposal for study and use, the record of the trial court in the Dalehite case-a test case relating to the disaster-consisting of 39 volumes and over 33,000 pages of testimony and exhibits. It also had the views of the Department of Justice transmitted by letter dated January 4, 1954.

For reasons to be stated later in the report, the committee is of the considered opinion that the United States Government is wholly responsible for the explosions and the resulting catastrophe at Texas City; that the disaster was caused by forces set in motion by the Government, completely controlled or controllable by it. It recommends therefore that Congress enact appropriate legislation to compensate the innocent victims who not only were incapable of contributing to the disaster but, because of the suddenness and force of the explosions, could not escape it.

Because of the enormity of the disaster and the great number of claims involved, the committee adopted the procedure of determining

first whether negligence and responsibility therefor existed on the part of the Federal Government and then, if the responsibility was found to exist, to promulgate a plan whereby, at some later date, the individual damages suffered by each claimant could be determined and settled.1

INTRODUCTORY STATEMENT

On April 16 and 17, of 1947, a man-made disaster occurred in Texas City, Tex., of almost unbelievable proportions. Loaded bags of ammonium nitrate fertilizer stowed for overseas shipment in the holds of two ships at the docks in that city blew up. The disaster occurred as a result of the explosion of an inherently dangerous material manufactured, packaged, shipped, and controlled by the United States Government under the label of fertilizer. Over 570 persons perished in the disaster, and about 3,500 more suffered injuries. Damage to private properties ran into millions of dollars.

The committee, as will be pointed out in this report, is of the firm belief that the United States Government is wholly responsible for this catastrophe. The fertilizer which blew up in Texas City was part of a fertilizer project through which the United States was seeking to carry out a program of foreign aid to various war-ravaged and famine-stricken areas overseas. While there were many who had a part in the production, shipping, and handling of this fertilizer, it was nevertheless the United States Government which conceived and initiated the foreign aid program and it was the Government which controlled or had the power to control all phases of the project right from the manufacturing stage to the final delivery of the fertilizer at its destination.

The dissenting opinion of Mr. Justice Jackson in Dalehite v. United States (346 U. S. 15, 48), a test case relating to this disaster, aptly stated the responsibility of the United States Government in the following language:

This was a man-made disaster; it was in no sense an "act of God". The fertilizer had been manufactured in Government-owned plants at the Government's order and to its specifications. It was being shipped at its direction as part of its program of foreign aid. The disaster was caused by forces set in motion by the Government, completely controlled or controllable by it. Its causative factors were far beyond the knowledge or control of the victims; they were not only incapable of contributing to it, but could not even take shelter or flight from it.

HISTORY OF COURT LITIGATION

Before going into a discussion of the merits of the issues and problems relating to the Government's responsibility for this castastrophe, it may be well to consider at the outset, the history and status of the matter when it was presented to the Congress for investigation and study. The committee believes this to be necessary because the belief has been expressed that the persons who suffered damage in the disaster, having litigated their claims under the Federal Tort Claims Act and having had their day in court and lost, should not now petition Congress as a further remedy. This belief, however, is far from being correct.

1 There were over 8,000 claims filed in the Federal district court under the Federal Tort Claims Act in the Texas City disaster litigation. Approximately 1,510 claims were based on wrongful death, approxi mately 988 on personal injury claims, and approximately 5,987 on property damage or destruction claims. It would be manifestly impracticable for a committee of Congress to hear and ascertain the amount claimed by each individual claimant.

It is a matter of record that subsequent to the disaster over 300 actions against the United States were instituted in the names of some 8,500 claimants under the Federal Tort Claims Act for death, personal injury, and property damages arising out of the disaster.

After those suits were filed, the parties, in order to simplify matters and to eliminate repetition of questions and legal issues common to all litigants, consolidated their cases with the approval of the United States District Court for the Southern District of Texas under Civil Action No. 787, Elizabeth Dalehite et al. v. United States (1950). The plan of procedure adopted by that trial court was to determine first whether negligence and liability existed on the part of the Federal Government and then, if the liability was found, to ascertain at some later date, the amount of damages each individual claimant suffered.

Findings of district court establish liability of Government

After a trial of the issues, the district court judge, sitting without a jury, found negligence on the part of the Government and rendered judgment in favor of the plaintiffs. The basic ground for the district court's findings is expressed in its "Findings of Fact" that theRecord discloses blunders, mistakes, and acts of negligence, both of omission and commission, on the part of defendant [the U. S. Government] its agents, servants, and employees, in deciding to begin the manufacture of this inherently dangerous fertilizer. And from the beginning of its manufacture on down to and after the day of the Texas City disaster, it discloses such disregard of and lack of care for the safety of the public and of persons manufacturing, handling, transporting, and using such fertilizer as to shock one. When all the facts in this record are considered, one is not surprised by the Texas City disaster, i. e., that men and women, boys and girls, in and around Texas City going about their daily tasks in their homes; on the streets, in their places of employment, etc., were suddenly and without warning killed, maimed, or wounded, and vast property damage done. The surprising thing is that there were not more of such disasters. The court found that the United States was negligent also in manufacturing the fertilizer, in selection of the coating used, and in the manner in which it prepared the fertilizer for shipment and that "each shipment of such fertilizer was a dangerous public and private nuisance from the time it was manufactured."

Reversal of district court on the law by appellate courts

On appeal, however, the Court of Appeals for the Fifth Circuit unanimously reversed (197 F. 2d 771) and the United States Supreme Court, by a division of 4 judges to 3, 4 being a majority since 2 judges did not sit, affirmed the decision of the court of appeals (346 U. S. 15). The Supreme Court through its majority decision decided that the acts of negligence found by the district court could not give it jurisdiction to entertain the lawsuits, because the claims were based upon the exercise of a "discretionary function" within the meaning of the Federal Tort Claims Act. To put it another way, the Supreme Court held that the Federal Tort Claims Act did not apply to the type of governmental action involved in the Texas City disaster litigation.

Background and pertinent provisions of Federal Tort Claims Act

Prior to 1946, which was the year of the passage of the Federal Tort Claims Act, persons seeking compensation for tort claims against the United States Government had, for the most part, only one

remedy against the Federal Government and that was to petition Congress for relief. The Federal Government had long followed the accepted rule of sovereign tort immunity, that is, that no action lies against the Government of the United States unless Congress has authorized it. The only relief available to a claimant was by way of a private bill to Congress. However, the private bill method of petitioning Congress for relief was notoriously clumsy, and in recent years the tremendous volume of private legislation was impairing the efficiency of both Congress and the President (H. Doc. 562, 77th Cong., 2d sess.). Some simplified recovery procedure for the great mass of claims was imperative. As a solution Congress enacted the Federal Tort Claims Act affording access to the Federal courts for tort claims within its scope (28 U. S. C., secs. 1346, 2671-2680). Government's liability for negligence similar to that of private person

Congress, through this act, waives the Government's immunity from actions for injury to persons and property occasioned by the tortious conduct of its agents and employees carrying out its work. The act defines this tort liability of the Government as similar or analogous to that of a private person. Section 1346 (b) thereof imposes liability on the Government

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. [Emphasis supplied.]

Act contains exception; no governmental liability for performance of "discretionary function"

Section 2680 (a) of the act, however, notes an exception from the scope of the provision quoted above. That provision does not apply

to

Any claim *** based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a Federal agency or an employee of the Government, whether or not the discretion be abused. [Emphasis supplied.]

Decision of Supreme Court

It was this latter section which the Supreme Court invoked as the legal basis for denying the litigants relief under the Federal Tort Claims Act. The Court pointed out that the acts of "negligence" found by the district court were performed in the exercise of a discretionary function or duty and that section 2680 (a) assured protection for the Government against tort liability for errors made in the exercise of discretionary functions. This is made clear by the following language appearing in the majority opinion (p. 32):

An analysis of section 2680 (a), the exception with which we are concerned, emphasizes the congressional purpose to except the acts here charged as negligence from the authorization to sue.

The Court also stated (p. 24):

Even assuming their correctness arguendo, though, it is our judgment that they do not establish a case within the act. This is for the reason that as a matter of law the facts found cannot give the district court jurisdiction of the cause under the Tort Claims Act.

It is unnecessary to analyze the Court's decision for the purpose of determining what exactly the words "discretionary function" mean

and what acts they encompass. It is sufficient, for the purposes of this report, to point out that the Court based its decision upon the construction and interpretation of those words, and held as a matter of law that the courts could not take jurisdiction of the claims. The Supreme Court did not go into the question of whether or not the Government was at fault; it did not hold the Government free from negligence. It simply held that even if it was to assume that the Government was negligent there could still be no recovery because the courts, on account of the wording of the Tort Claims Act, were without power to grant relief.

Thus it is clear that the claimants had no day in court. Rather, because of the majority decision of the Supreme Court, they were put into the same position they would have been in if there never had been a Tort Claims Act, namely, a position of seeking relief directly from the Congress. No doubt the House of Representatives in unanimously adopting House Resolution 296, 83d Congress, which authorized its Judiciary Committee to investigate the Texas City disaster claims, concluded that, because of the Supreme Court decision, substantial justice may not have been afforded to all those who sustained damage either by death or injury to person or property as a result of the catastrophe.

Congressional action would not invalidate Supreme Court decision

It should be emphasized however, that, in adopting House Resolution 296, Congress was not attempting to supersede or invalidate the controlling decision of the Supreme Court, laid down in the Dalehite case. Congress, prior to the passage of the Tort Claims Act, repeatedly entertained claims and concerned itself with legislation which provided relief for parties in situations analogous to that submitted to this committee for investigation. In addition, since the passage of the Tort Claims Act, Congress has invariably exercised its jurisdiction to legislate when it was satisfactorily established that for compassionate reasons or in equity and in good conscience remedial legislation was necessary to fill a void created by existing law.

With this statement of the Supreme Court's construction of the Tort Claims Act and its inapplicability to the situation herein, we turn to the question of the claimed responsibility of the United States Government for the Texas City disaster.

UNITED STATES GOVERNMENT'S FOREIGN AID FERTILIZER PROGRAM FOR OCCUPIED AREAS

Toward the end of the hostilities of World War II, it was recognized that an acute world food shortage existed. The problem of increasing the supply of food became an integral part of the United States' occupation and administration of enemy territories. Secretary of War Patterson wrote that unless "the urgent requirements of Generals MacArthur and McNarney for the occupied areas" were met "in real volume, we anticipate *** famine conditions." According to the Secretary's representative, "The occupying commanders in Germany, Japan, and Southern Korea report *** that the choice may be considered one of supplying additional food or additional troops to control the conquered peoples.'

Quantities of food necessary to alleviate the problem were not in existence. Even if food had been available, shipping capacity to