upon economic, social, or political policy judgments. Notwithstanding the fact that the exception, as it has developed, is not applied when challenged activity is not based upon considerations of policy (thus allowing effective litigation as to whether or not policy considerations, i.e., governmental discretion, informed a given act), S. 464 would abolish the discretionary function exception entirely in a large category of

cases.

The bill also would eliminate the FTCA discretionary function exception as to all torts arising in work places owned by, operated by, or under contract with the United States, even where the injury arose from work unrelated to a government

contract.

Thus, S. 464 would result in unprecedented liability for the government for injuries caused at entirely private workplaces merely because the contractor was engaged in some work for any agency of the United States.

S. 464 contradicts the very spirit of the FTCA, which was enacted in 1946, after a full 20 years of consideration. This lengthy span of time stemmed in part from paramount Congressional concern that the FTCA not open the Treasury to unprecedented liability. See, Jayson, Handling Federal Tort Claims, Ch. 2.

We object to S. 464 because it would unnecessarily subject the United States to enormous monetary judgments and enhanced defense costs while unwisely trammeling the ability of executive servants to adequately make the policy judgments which are lawfully committed to their discretion and expertise.

If enacted, S. 464 likely would result in billions of

dollars of additional expenditures from the federal Judgment Fund, and many millions of dollars of additional cost generated by the necessity of additional lawyers and administrative support merely to represent the United States in cases now barred by the discretionary function exception.

There are currently more than $200 billion in tort claims pending against the United States. However, the annual payout from the Judgment Fund resulting from FTCA liability is presently running at the average rate of somewhat over $200 million. Experience suggests that the discretionary function exception is probably the most important reason that the FTCA does not add several billion dollars to the deficit every year. Enactment of S. 464 would destroy the balanced liability regime of current law and would impede effective governmental decision-making, while creating immense budgetary risk. This seems altogether a bad bargain for the taxpayer.

The Impact on Litigation of 8. 464

The discretionary function exception bars many kinds of suits arising from government regulatory, contracting and enforcement activities. S. 464 would open the way for large numbers of suits in each of these areas where the United States has heretofore been excepted from the need to defend itself at trial, let alone pay massive judgments.

By

The impact of the proposed changes is not theoretical. way of example, we have compiled a list of 21 decisions applying

the discretionary function exception in these particular contexts just during the period June 1988 through September 1989. These cases, which are listed in Appendix A, are merely exemplary; each of them involved several hundred million or more dollars in issue and would, if the Congress opened the floodgate, be followed by thousands of others (now barred) with similar prayers

for relief.

Besides the cases discussed in the Appendix, which is far from a complete compendium, it also is instructive to examine the subject areas involved in such filings. They merely suggest the enormity of the potential impact upon the Treasury and upon Congressionally mandated programs implemented by government agencies and their contractors if this bill were to be enacted. OSHA Inspection Activities

Judy v. United States, 864 F.2d 83 (8th Cir. 1988) arose when plaintiff was severely injured after his left hand and forearm became entangled in a hydraulic shaping press. Although OSHA had inspected the facility and advised the employer that the particular press was not in violation of OSHA safety standards, the inspectors failed to discern that the particular press did not feature a properly guarded actuating mechanism. While noting that the case would be different had the plaintiff alleged that the inspectors actually knew that the press involved was in violation of OSHA's safety regulations and nevertheless decided not to take action, the Eighth Circuit held that the discretionary function exception barred this suit.

Of course,

plaintiffs in cases such as this are not without a remedy.

They are entitled to recover workers' compensation benefits from the employer as well as possibly pursuing a product liability suit. In fact, worker compensation laws have been adopted by every state, without exception.1

Asbestos Litigation

In numerous asbestos cases, the asbestos industry and its insurers are attempting to shift to the taxpayers the industry's tort liability to tens of thousands of workers. The amount of the industry's liability extends to the tens of billions of

dollars.

Most of that type of litigation arises out of shipyards in which Navy vessels were built, repaired and overhauled, largely during the World War II era. Due, in part, to correct application of the discretionary function exception by courts that have examined the issue, the United States has not been compelled to absorb the industry's losses. See Shuman v. United States, 765 F.2d 283 (1st Cir. 1985). The subject bills would change this substantially.

As of December 13, 1989, there were 2,709 asbestos cases, involving 3,393 underlying claims, pending against the United States raising tort issues which would be affected if S. 464 were enacted. We do not have a precise figure for asbestos suits which have already been dismissed on the basis of the discretionary function exception. However, that figure would amount to many millions. Moreover, because the courts are

1Larson, The Law of Workmen's Compensation, § 5.30.

deprived of subject matter jurisdiction by virtue of the discretionary function exception, dismissal of some of these suits might be deemed to be without prejudice if S. 464 became law.

Work Place Regulation

S. 464 relates to occupational safety and health matters. In that regard, we note that, in 1987, the Labor Department's Occupational Safety and Health Administration (OSHA) conducted 61,451 inspections. OSHA reports that private sector injuries and illnesses in manufacturing alone for 1986 totaled 1,948,800.2 Many of these occupational injuries and illnesses occur in workplaces regulated by OSHA3. Clearly under S. 464, an unprecedented flow of expensive new litigations would follow. It is possible that if S. 464 were adopted, the United States could be facing billions of dollars in claims. In this era of explosive litigation rates, there is no compelling reason to abandon a satisfactory status quo.

2Report of the President to the Congress on Occupational Safety and Health for Calendar Year 1987 (U.S. Department of Labor 1988) at 110, Table 9.

.

3Similarly, the Labor Department conducted inspections of 5,057 coal mining operations and 11,413 metal and nonmetal operations during fiscal year 1987. In coal mining operations alone, there were 14,252 injuries. Annual Report of the Secretary of Labor Under the Federal Mine Safety and Health Act of 1977 (U.S. Department of Labor) at 7 and table 6.

Of course, the Congress has enacted many other workplace regulatory programs. The number of workers performing work under government contracts is plainly very large.