Statement of Victor E. Schwartz

Partner, Crowell and Moring

Adjunct Professor of Law, Georgetown University Law Center before the

Subcommittee on Courts and Administrative Practice

of the

Senate Committee on the Judiciary

Concerning S. 464

February 20, 1990

Thank you Mr. Chairman for holding this hearing on what I believe will be the most important issue of the 1990's

what is

the proper scope of governmental liability. S. 464, the Government Workplace Safety Act speaks directly to that topic. It is designed to place the Government on a more even tort pedestal with everyone else in our society and to clarify one of the most obscure and confusing doctrines in American tort law the "discretionary function" immunity to the Federal Tort Claims Act (FTCA). S. 464 provides that the Government should not have "discretion" to violate its own applicable health or safety regulations or to be negligent in workplaces over which it has practical control. The fundamental purposes of the legislation are two-fold. First, it would place clear and unambiguous incentives on the Federal government to keep its workplaces safe and, second, provide tort compensation in situations where anyone else in our society would and should be held responsible.

Let me share with you briefly my background in the subject of torts because that serves as the basis for my views about S. 464. I have served as a law professor and Dean at the University of Cincinnati Law School, and currently am an adjunct professor at Georgetown Law Center and co-author of the most widely used law school textbook on the subject of torts, Prosser, Wade & Schwartz, Cases and Materials on Torts (8th ed. 1988). I was chairman of the Federal Interagency Council on Accident Compensation and

Insurance.

I had the responsibility of coordinating tort and insurance policy issues within the Federal government. I also

chaired the Federal Interagency Task Force on Product Liability. For the past 10 years, I have chaired the Torts and Insurance Practice Group at the law firm of Crowell and Moring. In this context, I have represented both plaintiffs and defendants in tort litigation and also have worked on the formulation of legislative

tort policy.

S. 464 in Context

My background has helped me place S. 464 in context. Critical to this "context" is the fact that the Federal government is a most unusual defendant its liability exposure is much less than ordinary, private citizen defendants. First, it is never strictly liable, as are all product manufacturers and product sellers. Second, it never pays punitive damages like everyone else. Third, it is never subject to a jury trial, which many people regard as a fundamental of our judicial process. Fourth, when plaintiffs lawyers sue the Federal government, their contingent fees are sharply limited to 25% in a litigated case and 20% when cases are settled; there is no such limitation against a private party. As a practical matter this means that if a lawyer had an opportunity to sue either a product manufacturer or the Federal government, the private manufacturer would be his or her target.

The Over Expansion of the Discretionary Function Immunity With all of these limitations on liability in place, the Federal government has an additional string to its defense bow the "discretionary function immunity." Legislative history suggests that it was placed in the law so that Federal executives

would not be deterred from exercising broad policy judgments: they were to be shielded from the apprehension that their actions would create tort liability for the Federal government.

Unfortunately, the

I agree with this fundamental purpose. discretionary function immunity has been so broadly utilized as a defense in litigation that it is no longer attached to its basic roots.

See

For example, the Federal government has argued, successfully, that its decision not to warn uranium miners of the dangers of radiation was "discretionary." See Begay v. United States, 768 F.2d 1059 (9th Cir. 1985). It argued, successfully, that the Nuclear Regulatory Commission's failure to warn workers of possible radiation dangers and failure to adequately protect workers from radiation exposure were "discretionary." Sizemore v. United States, 651 F. Supp. 463 (M.D. Fla. 1985). It argued, successfully, that its failure to warn about unsafe and unseaworthy conditions of a vessel it had inspected, its failure to require the proper repair of those conditions, and its failure to direct a prompt rescue mission were "discretionary." See Marine Coal Transport Corp. v. United States, No. 84 Civ. 5265 (ADS) (S.D. N.Y. 1985). It has argued successfully, time and again, that its negligent exposure of workers to asbestos, without adequate protection or instruction, was "discretionary." See Shuman v. United States, 765 F.2d 283 (1st Cir. 1985). I have included in an appendix a sample of shocking examples where the Federal government has utilized "discretionary function" to immunize itself from liability. In these situations a private

party would not only have been liable, it probably would have had

to pay punitive damages.

Courts' Appreciation of "Discretionary Function" Overkill

Recently, some courts have recognized that the Federal government has attempted to extend the "discretionary function" immunity to unreasonable limits that are wholly unreasonable. Thus, the Supreme Court of the United States held that a Federal agency's failure to comply with its own mandatory standards or policies was not protected by the discretionary function

exception. See Berkovitz v. United States, 198 S.Ct. 1954 (1988). S. 464 is intended to incorporate that decision into Federal law. More recently, the First Circuit Court of Appeals held that the Government's negligent failure to warn workers of risks associated with exposure to asbestos dust was not "discretionary." See Dube v. Pittsburgh-Corning, 870 F.2d 790 (1st Cir. 1989). The court said that the Government had not exercised a policy judgment "not to warn," the Government had done simply nothing.

Curiously, the Department of Justice failed to appeal the Dube case. I say curiously because the Department of Justice has asserted S. 464 would cost "billions of dollars." The Berkovitz and the Dube decisions substantially overlap S. 464. If Dube would lead to "billions of dollars" of liability "as law," why did the Department of Justice not appeal it? In my judgment, there can be only two real answers. On one hand, the decision would not lead to billions of dollars. On the other hand, the Department of