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(7) Since the practice and procedure in the district courts is, under H. R. 6463, to be governed by the Federal Rules of Civil Procedure, there is no need for specific mention of depositions (sec. 202 of H. R. 5373) and physical examination of claimants (sec. 305 of H. R. 5373).

(8) Under H. R. 5373, decisions of the district courts would be appealable to the circuit courts of appeals, while those of the Court of Claims would be subject to review by the United States Supreme Court. Under H. R. 6463, appeals from decisions of the district court, which have exclusive original jurisdiction, could be had only to the Court of Claims, with further review in the Supreme Court where appropriate.

(9) The Attorney General's power to compromise or settle claims is limited by H. R. 6463 to cases in which suit has been instituted. Settlement of claims before suit is left to the Federal agency. If suit has been instituted, however, only the Attorney General may compromise the claim in question.

(10) H. R. 6463 omits the provision (sec. 307 in H. R. 5373) which provides for installment payment of judgments where the claimant had not recovered from this injuries at the time of award or judgment. Providing for and supervising installment payments in such cases would require a complex and costly administrative procedure, which is likely to be wholly disproportionate to the amount that may be saved by terminating payments in cases of recovery.

TITLE IV-PROVISIONS COMMON TO TITLES II AND III

Title IV contains provisions which apply both to administrative adjustments and to actions in the district courts.

Section 401 prescribes a statute of limitations of 1 year, plus an extension of 6 months from the date of final disposition by or withdrawal of the claim from a Federal agency, if it be submitted to such agency.

Section 402 contains certain exemptions from the bill. The first subdivision of Section 402 exempts claims based upon an act or omission of an employee exercising due care in the execution of a statute or regulation. It also exempts claims based upon the conduct of an employee of the Government involving discretion, whether or not the discretion has been abused. This is a highly important exception, designed to avoid any possibility that the act may be construed to authorize damage suits against the Government growing out of a legally authorized activity, such as a flood-control or irrigation project, where no wrongful act or omission on the part of any Government agent is shown, and the only ground for suit is the contention that the same conduct by a private individual would be tortious, or that the statute or regulation authorizing the project was invalid. It is also designed to preclude application of the act to a claim based upon an alleged abuse of discretionary authority by a regulatory or licensing agency-for example, the Federal Trade Commission, the Securities and Exchange Commission, the Foreign Funds Control Office of the Treasury, or others. It is neither desirable nor intended that the constitutionality of legislation, the legality of regulations, or the propriety of a discretionary administrative act should be tested through the medium of a damage suit for tort. The same holds true of other administrative action not of a regulatory nature, such as the expenditure of Federal funds, the execution of a Federal project, and the like.

On the other hand, the common law torts of employees of regulatory agencies, as well as of all other Federal agencies, would be included within the scope of the bill. Thus, section 402 (5) and (10), exempting from the purview of the bill claims arising from the administration of the Trading with the Enemy Act or from the fiscal operations of the Treasury, are not intended to exclude common law torts committed by employees of the Treasury Department or other Federal agency administering these laws and activities, such as those involving an automobile collision.

The other exceptions in section 402 relate to certain governmental activities which should be free from the restraint of damage suits, or for which adequate remedies are already available. The exemptions include claims arising out of the loss or miscarriage of postal matter, the assessment or collection of taxes or duties, military or naval activity during wartime, the detention of goods by customs officers, deliberate torts such as assault and battery, and some others. exempted claims for which due provision has already been made by law are admiralty and maritime torts, claims under the Federal Employees' Compensation Act, and the like.

The

Section 403 provides for proportionate liability of the United States, based upon the number of parties liable, where the damage has been caused jointly by a Federal employee and someone else.

Section 404 permits the fixing of reasonable attorneys' fees by the court or the Federal agency making the award, with a specified maximum percentage. Criminal penalties are provided for charging or collecting legal fees in excess of the maximum.

Section 405 would terminate the liability of Federal corporations which now are subject to be sued in their own name, in respect of tort claims generally cognizable under the act. If the United States is to assume liability for the tortious conduct of its agents, there is no sound reason for distinguishing between employees of an executive department or independent establishment and those of a governmental corporation. A person injured by a truck driven by an employee of Tennessee Valley Authority or Reconstruction Finance Corporation should have the same rights of redress against the Government as a claimant injured by a truck driven by an employee of the Interior Department.

While section 405 has been difficult to phrase, it is intended to place torts of "suable" agencies of the United States upon precisely the same footing as torts of "nonsuable" agencies. In both cases the suits would be against the United States; in both cases, the limitations and safeguards of the act would apply; in both cases, the exceptions of the act would apply either by way of preventing recovery at all or by way of leaving recovery to some other act, as, for example, the Suits in Admiralty Act. Section 405 intends that neither corporate status nor "sue-and-be-sued" clauses shall, alone, be the basis for suits for money recovery sounding in tort.

Section 406 would repeal a number of existing statutes which now authorize the administrative adjustment of tort claims but only in respect of claims which may be settled under the Federal Tort Claims Act. Thus, claims which occur prior to the effective date of the act, claims which may be adjusted under existing law irrespective of negligence, and claims not cognizable under the act for any other reason, may be considered and determined by the Federal agencies under present law. However, claims based upon negligence or other wrongful conduct of a Federal employee acting within the scope of his authority, whether or not other provisions of law now_authorize the adjustment of such claims, can be proceeded on only under the Tort Claims Act.

COMPARISON OF H. R. 6463 WITH H. R. 5373

(1) In respect of exemptions, the bills differ as follows:

(i) H. R. 5373 does not contain the general exemption set forth in subsection 402 (1) of H. R. 6463, but it is likely that the cases embraced within that subsection would have been exempted from H. R. 5373 by judicial construction. It is not probable that the courts would extend a Tort Claims Act into the realm of the validity of legislation or discretionary administrative action, but H. R. 6463 makes this specific. The general exemption in section 402 (1) of H. R. 6463 renders unnecessary the specific exemption of damages caused by the administration of laws by the Federal Trade Commission or the Securities and Exchange Commission, which appeared in H. R. 5373.

(ii) Claims arising in a foreign country have been exempted from H. R. 6463, whether or not the claimant is an alien. Since liability is to be determined by the law of the situs of the wrongful act or omission, it is wise to restrict the bill to claims arising in this country.

(2) In respect of attorneys' fees, the bills differ as follows:

H. R. 5373 provides for a limitation upon attorneys' fees of 10 percent of administrative awards and 20 percent of judgments. H. R. 6463 retains these limitations only where the recovery is $500 or more; in smaller cases, the amount of fees is left to the discretion of the court or the Federal agency.

(3) In respect of repeals, the bills differ as follows:

H. R. 5373 would repeal only the act of December 28, 1922, authorizing administrative adjustment of property claims up to $1,000. H. R. 6463 would repeal all other existing authorization for administrative settlement, insofar as it covers claims which may be presented under title II of the bill.

The present bill is a necessary step in the gradual disappearance of the sovereign's archaic immunity from responsibility for its agents' conduct. In an era of steadily growing Government activity, involving considerable use of automobiles and other mechanical equipment capable of causing damage to persons and property, the absence of a satisfactory procedure for redressing wrongs is a grave defect in our social policy. The bill will supply a well-defined, continually operating machinery to redress tortious wrongs arising out of Government activity, in place of existing procedures which are admittedly inadequate and

burdensome to the Government and the claimant. It will place the United States, in respect of torts committed by its agents, upon the same footing as a private corporate employer, with certain limitations required for the protection of important governmental functions. By removing a large number of private tort claims from Congress and the Claims Committees, it will give the national legislature more time to devote to matters of wider importance, and will thereby benefit the public as well as claimants and Members of the Congress.

I believe that a thought expressed by President Lincoln, in his first annual message to Congress on December 3, 1861, adequately expresses the principle involved in the bill before this committee:

"It is as much the duty of Government to render prompt justice against itself in favor of citizens as it is to administer the same between private individuals. The investigation and adjudication of claims in their nature belong to the judicial department."

The CHAIRMAN. You may go ahead.

Mr. SHEA. H. R. 6463, insofar as it relates to administrative settlements, permits the Federal agencies to consider and determine claims for death, as well as for personal injury and property damage, which was not provided for in the other bill (H. R. 5373).

Under the other bill it was not specifically provided that local law should govern, and certain express provisions were made, for instance, as to distributions.

Mr. CELLER. Do you need that? Is that necessary to express it? Mr. SHEA. I should think the earlier bill would probably be construed as applying the local tort law, but this bill specifically covers it, leaving the distribution in case of death and so forth to the local law.

Mr. CELLER. The only trouble is in future bills you may have to put that precedent in. If you leave it out the courts may not construe it should apply. I am only thinking out loud to get your reaction.

Mr. SHEA. This bill provides explicitly for the application of local law.

The CHAIRMAN. Go ahead.

The

Mr. SHEA. The acceptance of the award by the claimant will also release the delinquent employee as we have already pointed out. bill leaves open the right of the Government to recover back an award procured by fraud.

Title III provides for suits in the district courts. It differs from the earlier bill in that the liability of the United States in such cases is to be the same as that of a private individual, subject to the limitations of the bill, and is to be reviewable by the Court of Claims, which we have discussed. Conformance to local law is explicitly provided for here, as it was not in the prior bill.

The prior bill immunized the United States from punitive damages. This bill also provides that neither interest nor costs shall be assessed against the United States.

The CHAIRMAN. Right there on the item of costs, is there a limitation on the amount of costs which the Government can be responsible for which the claimant has to pay?

Mr. SHEA. It provides that no costs shall be assessed against the United States.

The CHAIRMAN. All right.

Mr. SHEA. And we think it is enough to satisfy the actual claim, rather than impose punitive damages on the United States.

Mr. MCLAUGHLIN. Have you any provision with respect to the taking of depositions?

Mr. SHEA. That is all covered by the provisions of the Federal rules, which are made applicable to those cases.

Mr. MCLAUGHLIN. What about the costs of taking depositions? Is that covered by the Federal rules?

Mr. SHEA. That is right, by the Federal rules. The rules are specifically made applicable, and govern the trial of the case.

Mr. MCLAUGHLIN. Is there any conflict between that and your statement that no costs shall be assessed against the United States? Mr. SHEA. I think not.

Mr. ROBINSON. However long the Government might prolong the litigation then the claimant must pay the costs; is that it?

Mr. SHEA. That is right. No costs shall be assessed against the United States.

Mr. MCLAUGHLIN. The United States, as I understand it, is placed in the same position as an individual?

Mr. SHEA. With the exceptions noted.

Mr. MCLAUGHLIN. With the exception that no costs may be assessed against the United States?

Mr. SHEA. That is right. There are some additional exceptions. Mr. HOBBS. And neither are costs taxed against the other party unless he loses.

Mr. SHEA. I mean that costs are never assessed against the United States.

Mr. HOBBS. And they are never assessed against the claimant unless he loses.

Mr. CELLER. Should not this bill be reported favorably and passed and if any injustices arise we can correct them later?

The CHAIRMAN. Mr. Shea, in the case of lawsuits you do not modify the rule with reference to costs, but leave it just like it is? Mr. SHEA. Ordinary costs are assessed against claimant, if he loses. The CHAIRMAN. It is just like it is?

Mr. SHEA. That is right.

The CHAIRMAN. All right; go ahead.

Mr. SHEA. Tort jurisdiction is given not only to the District Court for Hawaii, but also to those for all the Territories and possessions.

Judgment in a tort action constitutes a bar to further action upon the same claim, not only against the Government (as would have been true under H. R. 5373), but also against the delinquent employee, which I cited before.

Under this bill no action may be brought upon a claim pending before a Federal agency unless withdrawn from it upon notice, or unless finally disposed of.

The CHAIRMAN. If a person has a claim before that agency and it is finally disposed of by that agency then can the claimant abandon the whole thing and go into court?

Mr. SHEA. Yes.

The CHAIRMAN. Why do you allow that? If he submits himself to jurisdiction of the agency then after he has lost you permit him to go into a court?

Mr. SHEA. That is because the theory of this bill is to give him a right of action so that he has the right to a day in court.

The CHAIRMAN. You are talking about a trial de novo?

Mr. SHEA. It is a trial de novo.

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The CHAIRMAN. Why do you permit him to experiment when he has two routes to go?

Mr. SHEA. We gave a good deal of thought to the alternative of having a new hearing or merely having a review of the administrative disposition, and decided upon the former.

Mr. CELLER. Mr. Shea, how about section 5, which says "Judgment in a tort action constitutes a bar to further action upon the same claim"?

The CHAIRMAN. That is what I say.

Mr. SHEA. That is right.

The CHAIRMAN. My point is after the claimant has put everybody to the trouble of saying what he can do he is going fishing trying to get the most money.

Mr. SHEA. Except for one thing, Mr. Chairman. If he presents a claim before a Federal agency, he cannot increase the amount of that claim before a district court.

The CHAIRMAN. That does not seem to get anywhere with me. Mr. ROBSION. He can then go into court after he has been to the Federal agency?

The CHAIRMAN. I think you better give that a little more thought. Mr. SHEA. Mr. Chairman, it is the same procedure that exists now in respect of claims which can be sued upon.

The CHAIRMAN. It would not matter where it exists. You have two methods. The claimant has the choice of going either route. Why should he go one route and if he does not come out all right then go the other route?

Mr. SHEA. What is contemplated is that he be given a remedy in the courts. However, provision is allowed here for settling it. I mean, it contemplates the same kind of procedure as between private persons; they sit down and try to settle, and if they are not able to do so then they go to court.

The CHAIRMAN. I get your point. Go ahead.

Mr. SHEA. I have already stated that the Federal Rules of Civil Procedure are made applicable here, and have fully discussed the differences in provisions for appeal.

The Attorney General has exclusive power to compromise or settle claims after suit has been brought. Under the earlier bill he was allowed to settle claims prior to the bringing of suit.

The present bill omits the provision for installment payment of judgments where the claimant had not recovered from his injuries at the time of award or judgment. Providing for and supervising installment payments in such cases would require a complex and costly administrative procedure which is likely to be wholly disproportionate to the amount that may be saved by terminating payments in cases of recovery.

The CHAIRMAN. Yes; we understand that.

Mr. SHEA. The provisions of title IV are applicable both to administrative adjustments and to actions brought in the district

courts.

Section 401 prescribes a statute of limitations of 1 year plus an extension of 6 months from the disposition of the claim by a Federal agency or withdrawal of the claim from the agency, if it be submitted to such agency.

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