Turner, 427 F. Supp. 138,' when if successful the result will be to encourage more tort suits to be brought against federal employees in their individual capacity and perhaps require the retention of private counsel?

8

Answer 2b. The Department urged, as it believed it should, that it was entitled under the theory of respondent superior to the same defenses that were available to its employees under the 1974 amendments to section 2680 (h). Only exclusivity of remedy against the United States will reduce suits against federal employees and largely eliminate the need for private counsel.

Question 2c. If the Department is, in fact, interested in assuring that victims of unconstitutional acts be compensated, why is the Department contesting F.T.C.A. jurisdiction in the cases cited above?

Answer 2c. As discussed in its answer to Questions 1, the Department does not believe that the Federal Tort Claims Act waived sovereign immunity with regard to the broad array of constitutional torts that have been recognized in recent years. Moreover, absent an exclusive remedy against the United States, the cost of private counsel will probably exceed the amount of compensation likely to be awarded under our proposed amendments.

Question 2d. If the Department, in fact, believes that $1,000 is a reasonable minimum recovery in a constitutional tort case, why is it arguing in the Birnbaum case that the $1,000 judgment awarded is too large?

Answer 2d. The amount of $1,000 as a minimum liquidated damage figure was considered appropriate as an offset to the fact that an aggrieved party could no longer seek recovery from the individual tort feasor. Absent such consideration, an award of $1,000 when based on actual damages suffered may be excessive in cases where no physical, monetary, or psychological harm was suffered such as in Birnbaum, supra.

Question 2e. Wouldn't it cost far less to accept these cases as F.T.C.A. cases and settle them than to pay Department and private counsel to defend them? Answer 2e. We do not believe that we may lawfully submit the United States to liability under the Federal Tort Claims Act for most constitutional torts. But aside from that, the question presumes that most constitutional tort cases are brought only for the purpose of recovering a monetary award. The Department's experience is that such suits are also brought to gain broad discovery of federal law enforcement and intelligence collection operations, effectuate changes in policy, and sometimes achieve personal satisfaction by winning in court. Such motives would not be satisfied by an early offer of monetary settlement. Private counsel at government expense would, of course, still be needed during these prolonged proceedings.

Question 2f. In accepting these constitutional tort cases as F.T.C.A. cases and in settling them, doesn't the Department avoid any adverse precedent on the scope of the various section 2680 exemptions in nonconstitutional tort cases which otherwise may result if the Department litigates the applicability of the F.T.C.A.?

Answer 2f. The Federal Tort Claims Act constitutes a limited congressional waiver of sovereign immunity. If the Department believes Congress did not consent for the United States to be sued for a particular variety of conduct, it cannot, without additional congressional authority, offer monetary settlements in lawsuits predicated on such conduct for any reason, whether or not it is for the purpose of avoiding adverse precedent.

Question 2g. If these cases are accepted as F.T.C.A. cases, aren't plaintiffs already entitled to attorneys fees?

Answer 2g. No, see 28 U.S.C. 2412.

Question 2h. If these cases are accepted as F.T.C.A. cases and the Department adopts a policy of not raising the section 2680 exemptions, do plantiffs have any need for a bill which waives these exemptions?

Answer 2h. The exemptions are of a jurisdictional nature which the Department has no authority to waive. As noted in the answer to Question 1, the courts are evenly divided over whether various exemptions set forth by section 2680 are applicable in actions based on the CIA's mail opening program. The proposed amendments would clarify the situation by expressly making the exemptions inapplicable to constitutional torts.

Question 2i. If these cases are accepted as F.T.C.A. cases, isn't the Department already precluded from raising a "good faith defense" by cases such as Norton v. Turner?

Answer 2i. No. The Department does not believe that the court in Norton v. Turner correctly decided the issue of whether the Department may raise the defenses of its employees in suits brought under the Federal Tort Claims Act. Question 2j. If the F.T.C.A. can already be construed to cover constitutional torts, isn't the principal purpose of the bill to make such suits an exclusive remedy not to provide a new remedy for plaintiffs?

Answer 2j. As previously stated, the Department does not believe that the Federal Tort Claims Act applies to constitutional torts except those committed in specially defined areas by carefully described employees. If it did, then the desirable remaining purposes of the proposed amendments would be to make the Federal Tort Claims Act the exclusive remedy for obtaining civil redress from constitutional torts committed by federal employees, to improve morale and effective performance by honest employees, and at the same time, to substantially eliminate the high cost of retaining private counsel—three objectives which the Department believes are emminently worthwhile by themselves.

Question 2k. Given the availability of F.T.C.A. jurisdiction for constitutional torts, isn't the only clear advantage in the bill to plaintiffs the $1,000 liquidated damage provision?

Answer 2k. Again, as noted earlier, the Department does not believe the Federal Tort Claims Act applies to most constitutional torts, and if the Act does, the Department believes the government is not barred from raising all defenses available to its employees. Thus the $1,000 minimum liquidating damage provision is only one of several benefits which will be gained by the aggrieved person under the proposed amendments. Additionally, private counsel fees would still be required to be expended.

MEMORANDUM OF OFFICE OF LEGAL COUNSEL, OF APRIL 8, 1978, ON CONSTITUTIONALITY OF RETROACTIVITY OF S. 21171

This memorandum responds to your request for our views on the constitutionality of retroactive application of proposed amendments to the Tort Claims Act. The bill in question, S. 2117, 95th Cong., 1st Sess. (1977), would provide, inter alia, an action against the Government as the exclusive remedy for certain claims alleging tortious conduct by U.S. employees. It would apply to common law tort claims as well as tort claims arising under the Constitution so long as the alleged tortious conduct was committed by Government employees acting within the scope of their employment or under color of law. Section 11 of the bill-the section specifically at issue here-would apply these provisions to all claims pending at the time S. 2117 is enacted. The bill would extinguish claims against individual Government employees and replace them with claims against the United States. Recovery under these claims, however, would be limited to the amount of compensatory damages proved, i.e., punitive damages would not be allowed. Additionally, as in all other cases under the Tort Claims Act, 28 U.S.C. §§1346 and 2402, jury trials would not be available. For the reasons that follow we are of the opinion that the denial of punitive damages to persons with pending claims would not be inconsistent with the Constitution. However, we believe that S. 2117's proposed retroactive extinguishment of the right to a jury trial does present constitutional problems which should be carefully considered.

The questions whether Congress can deny jury trials and punitive damage recoveries to those claimants with pending claims raise the issue, which has been frequently litigated, whether and to what extent Congress is empowered to enact "retroactive" legislation. The provision of the Constitution which

1 See letter of Apr. 10, 1978 on p. 52.

2 Concerning the issue whether there is any vested interest in a cause of action growing out of a common law tort or a constitutional tort prior to judgment, there is some horn-book dictum to the effect that there is no vested interest in such claims. However, we have found that the scattered judicial decisions do not support that view of the law. Instead, it appears that plaintiffs do have protectable interests in causes of action prior to judgment. See Massa V. Nastri, 125 Conn. 144, 3 A.2d 839 (1939). The only cases that have tolerated the abrogation of pending causes of action are those arising under the "Portal-to-Portal Act," and those cases carefully limit their holding to the abrogation of rights created by statute. See Battaglia v. General Motors Corp., 169 F.2d 254 (2nd Cir. 1948); Seese v. Bethlehem, 168 F.2d 58 (4th Cir. 1948). 3 Although in Smallwood v. Gallardo, 275 U.S. 56, 61 (1927), Mr. Justice Holmes reasoned that to "apply [a] statute to present suits is not to give it retrospective effect," we will assume retroactive effect for purposes of this memorandum.

limits the Federal Government's power to enact retroactive legislation is the Due Process Clause of the Fifth Amendment. However, that clause "generally does not prohibit retrospective civil legislation, unless the consequences are particularly 'harsh and oppressive.'" United States Trust Co. of New York v. New Jersey, 431 U.S. 1, 17 n.3 (1977), citing Welch v. Henry, 305 U.S. 134, 147 (1938) and Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 14-20 (1976). In Usery the Court stated:

[O]ur cases are clear that legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations. [citations omitted] This is true even though the effect of the legislation is to impose a new duty or liability based on past acts. [citations omitted] Id. at 16.

Usery involved the constitutionality of the retroactive aspects of title IV of the Federal Coal Mine Health and Safety Act of 1969, 83 Stat, 150, 30 U.S.C. § 901 et seq. (1970 ed. and Supp. IV). In upholding the Act, the Court concluded:

In sum, the Due Process Clause poses no bar to requiring an operator [of a coal mine] to provide compensation for a former employee's death or disability due to pneumoconiosis [black lung disease] arising out of employment in its mines, even if the former employee terminated his employment in the industry before the Act was passed. 428 U.S. at 19-20.

In so holding, the Court discussed at some length the sorts of considerations which properly should be brought to bear on retroactivity questions. After noting that a more demanding standard would probably be appropriate for judging the retrospective aspects of legislation than for judging fully prospective laws, the Court acknowleded the importance of deferring to Congress' judgment where questions such as the allocation of costs and burdens are concerned. Id. at 16-19. The Court's analysis suggests that it applied in that case a test much like the rational basis test commonly invoked in evaluating Equal Protection cases.

Although other decisions have ruled on the scope of Congress' power to legislate in a manner that may have retroactive consequences, none have squarely identified the test or standard against which such legislation is to be judged. See, e.g., Fleming v. Rhodes, 331 U.S. 100, 102 (1947). For example, the Court in United States Trust Co., suggested that retroactive civil legislation would satisfy the requirement of due process so long as it was not "harsh and oppressive." 431 U.S. at 17 n. 13. Our review of the decisions dealing with retroactive legislation indicates that an analysis much like that articulated several years ago by Professor Hochman in a major article on this question may explain the results in those cases. He suggested the following general approach:

[I]t is submitted that the constitutionality of such a statute is determined by three major factors, each of which must be weighed in any particular case. These factors are: the nature and strength of the public interest served by the statute; the extent to which the statute modifies or abrogates the asserted preenactment right, and the nature of the right that the statute alters.

Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. 692, 697 (1960).

Professor Hochman's analysis is quite similar to the approach the Supreme Court has articulated in a related context. The Court has long grappled with the more general question whether new legislation, administrative regulations, and judicial decisions should be applied to pending cases. See, e.g., United States v. Schooner Peggy, 1 Cranch (U.S.) 103, 2 L. Ed. 49 (1801); Thorpe v. Housing Authority, 393 U.S. 268 (1969). As a result of Court decisions in these cases, a general rule has now been fashioned to deal with those situa

4 In United States Trust Co., the Court considered retroactive State legislation; thus the Due Process Clause of the Fourteenth Amendment was the relevant constitutional provision. The Fifth Amendment's Due Process Clause applies to Federal legislation. The Contract Clause, Article I, Section 10 of the Constitution was also an issue in United States Trust Co., but since that Clause by its terms only prohibits States from passing laws which impair contractual obligations it is no bar to Federal action. However, some commentators have opined that there is a "tendency for the contract clause and the due process clause to coalesce." Hale. The Supreme Court and the Contract Clause, 57 Harv. L. Rev. 852, 890-91 n. 18 (1944); Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. 692 (1960).

tions in which Congress has not stated with specificity whether a new law is to be applied to pending cases. That rule, stated in summary form, is that new legislation will be applied by the courts to pending cases unless to do so would occasion some "manifest injustice." Bradley v. United States, 416 U.S. 696, 717 (1974). In determining whether a law will have that effect if applied to pending cases, the Court has identified three considerations: "(a) the nature and identity of the parties, (b) the nature of their rights, and (c) the nature of the impact of the change in law upon those rights." Id. These, then, are the factors that a court would consider in deciding whether to apply new legislation to pending cases when Congress has not spoken to that issue. They are considerations rooted in the due process clause, and are quite similar to the ones that Congress must address in making judgments on the application of new laws to existing cases.

With these several formulations in mind, we may address the questions presented by the Federal Torts Claims Act amendments. The several tests may be reduced to a straightforward inquiry: If Congress, in the exercise of its broad discretionary authority, determines that it is in the public interest to extinguish pending punitive damage claims or to bar jury trials in pending cases, would that action so adversely affect the significant rights of individual claimants as to deprive them of due process?

1. Punitive damages

The punitive damage question is the easier of the two. The appropriateness of allowing punitive damage awards is peculiarly a question of public policy, and appears always to have been so understood. Smith v. Hill, 12 Ill. 2d 588, 147 N.E. 2d 321 (1958); see also Washington Gas Light Co. v. Lansden, 172 U.S. 534 (1899); cf. Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967). They are allowed to particular plaintiffs not to compensate them for injuries or damage they have suffered but to make an example of the defendant in order to deter him and others from engaging in similar conduct in the future. Washington Gas Light Co. v. Lansden, 172 U.S. 534 (1899); Rosenblocm v. Metromedia, 403 U.S. 29, 84 (1971) (dissenting opinion of Justices Marshall and Stewart). The individual plaintiff, even after his cause of action has accrued and his action has been filed has no "vested right” to a punitive damage recovery, and indeed even in cases in which all of the elements justifying such an award have been proved it remains within the discretion of the trier of fact to determine whether an award will be made. Whiteis v. Yamaha Intern. Corp., 531 F. 2d 968, 973 (10th Cir. 1976); Williams v. Farmers and Merchants Insur. Co., 457 F. 2d 37, 40 (8th Cir. 1972); Smith v. Hill, supra.

It is within Congress' authority to conclude that punitive damage awards are not necessary to deter tortious conduct by government employees. Congress could also find it in the public interest to relieve public employees of the concern for defending against such claims. Since barring punitive damage recoveries does not deprive individual plaintiffs of rights to which they have any substantial entitlement, we do not think that courts would find this amendment to be "harsh and oppressive" or to occasion any "manifest injustice." "

2. Retroactive Abrogation of Jury Trials

The bill would also extinguish the right to jury trials for claims based upon certain categories of tortious conduct by Government employees. This would be accomplished by abolishing the present common law cause of action against the employee and creating in its stead a cause of action against the

5 Smith v. Hill, supra, held that a vested right in punitive damages arises only when such damages have been allowed by a judgment in the plaintiff's favor. 12 Ill. 2d 595, 147 N.E. 2d 325.

The Illinois Supreme Court, in Smith v. Hill, supra, considered a claim that an Illinois statute disallowing punitive damage claims in breach of promise to marry cases was unconstitutional. Quickly disposing of this claim the Illinois court held: The act in barring punitive damages merely establishes a "public policy" that in the interest of society in the particular class of cases such damages should not be awarded. Such damages being allowed in the interest of society, and not to recompense solely the individual, to deny them cannot be said to deny any constitutional right 12 I. 2d at 598, 147 N.E. 2d at 327. The court thus ruled that the legislature could, at its discretion, restrict or deny punitive damages. Since punitive damages are intended to benefit society and not the injured party, the court found that the plaintiff had no significant personal interest in their allowance or disallowance.

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United States. That Congress can do this-at least prospectively-is now beyond legal dispute. The Supreme Court in Silver v. Silver, 280 U.S. 117, 122 (1929), in sustaining the abolition of a gratuitous passenger's right to sue his host for negligence, held:

the Constitution does not forbid the creation of new rights, or the abolition of old ones recognized by the common law.

It has been held that a statute replacing a common law cause of action against a Government employee with a statutory remedy against the Government for injuries caused by tortious acts of the employee in the course of his employment, does not violate the Seventh Amendment. In Nistendirk v. McGee, 225 F. Supp. 881 (W.D. Miss. 1963), the court considered the constitutionality of 28 U.S.C. § 2679 (b) which provides that claims for injuries caused by Government employees driving motor vehicles in the scope of their employment shall be tried as if they were brought under the Federal Tort Claims Act. Thus, as under S. 2117, there would be no right to a jury trial. See 28 U.S.C. § 2402. The court, in upholding 28 U.S.C. § 2679 (b)'s denial of a jury trial, reasoned: Plaintiff's common law action against defendant McGee has been abolished, and a statutory action under § 1346, Title 28, United States Code, has been substituted in its place. There no longer exists any cause of action against McGee, and since the cause of action given against the government is a statutory one, the guarantees of the Seventh Amendment do not apply. See also Wolfe v. Merrill National Laboratories, 433 F. Supp. 231 (M.D. Tenn. 1977); Sparks v. Wyeth Laboratories, Inc., 431 F. Supp. 411 (W.D. Okla. 1977); Gustafson v. Peck, 216 F. Supp. 370 (N.D. Iowa 1963).

That Congress is empowered to deny jury trials prospectively to newly created actions against the Government is clear. The question at hand, however, is whether Congress can constitutionally deny jury trials in pending claims by abolishing those claims and substituting new causes of action. This proposed action, when measured against the various standards of constitutionality for retroactive legislation, raises serious doubts. There is a crucial difference between the interest at stake where punitive damage awards are extinguished and the nature of the plaintiff's interest in a jury trial. Jury trials are guaranteed, in certain cases, by the Seventh Amendment. Once that right attaches its abrogation cannot lightly be undertaken.

While Congress enjoys considerable latitude in fashioning tools to deal with the matters within its constitutionally cognizable areas of power, that power is not unlimited. Anniston Mfg. Co. v. Davis, 301 U.S. 337 (1937), for example, allows abrogation of rules of procedure in pending cases but conditions such action upon the substitution of a general procedure which is "fair and adequate." ID. at 352. The court there focused on questions of burdens of proof and the use of presumptions-aspects of civil proceedings which are protected by the Constitution only under the general umbrella of the Due Process Clause. It did not deal with the abrogation of a right specifically provided by one of the Bill of Rights Amendments, and we know of no other case in which the court has been willing to find a "fair and adequate" alternative to some constitutionally protected right.

Although procedural matters may impact heavily upon a particular case, e.g., burdens of proof, presumptions, etc., courts have maintained a clear distinction between these and fundamental rights. The right to jury trial is plainly considered to be a fundamental right and as such is to be distinguished from procedural rights. In this regard the court in Colgrove v. Battin, 413 U.S. 149 (1975) stated;

Consistently with the historical objective of the Seventh Amendment, our decisions have defined the jury trial right preserved in cases covered by the Amendment as "the substance of the common law right of trial by

7 In discussing this issue we use the term "nending claims" to mean the point at which the right to jury trial attaches. We believe that this occurs when a plantiff has filed his complaint in federal court and has either already demanded, or has not vet waived (pursuant to Rule 38, F.R. Civ. P.), his Seventh Amendment right to a jury trial at the time this bill becomes law. Although we have found no decisions precisely on point we think it reasonable to conclude on the basis of the language of the Amendment itself that the right does not attach until there is a "suit" and until there is a "value in controversy" which exceeds the minimal $20 requirement. Thus, the pendency of an administrative claim would not satisfy this requirement; nor would the mere existence of an alleged injury.