Senator HEFLIN. Our first witness is Mr. Stuart Gerson, the Assistant Attorney General, Civil Division, of the Department of Justice. STATEMENT OF STUART M. GERSON, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC Mr. GERSON. Thank you, Mr. Chairman, distinguished members of the subcommittee. We are grateful for the opportunity of expressing the views of the Department of Justice regarding S. 464, which is intended substantially to abridge the so-called discretionary function exception to the Federal Tort Claims Act that Senator Thurmond just described. For the reasons described in my written testimony, which I ask to be made part of the record herein Senator HEFLIN. It will be made part of the record. Mr. GERSON. Thank you, sir, and which I shall summarize this afternoon, the Department of Justice respectfully opposes S. 464 because we believe that the discretionary function exception, as it continues to evolve through practice and judicial interpretation— most particularly, the judicial interpretation of the Supreme Court only in 1988-effectively serves the Nation by balancing between the substantive and pecuniary interests of the public at large and the individual interests of tort claimants against the United States. If enacted, this bill could result in literally billions of dollars in additional expenditures from the Federal judgment fund, and I say that with regard, for example, to the fact that at this time there are more than 2,700 asbestos cases pending in which approximately $5.3 billion is sought. None of these suits currently implicates the discretionary function exception. However, if suits previously dismissed could be reinstated or other actions could be brought, given the retroactive outlook of the proposed bill, the United States could be the substantial payor through the judgment fund of such judgments if this bill were to pass. Similarly, OSHA reported for the year 1986, the most recent data that I have seen, almost 2 million manufacturing injuries. If one were to assign just as a baseline number a $100,000 value to each claim, that in and of itself—and that is just an arbitrary number; the number could be more or less for any individual claim. But at that number, that would involve over $190 billion in workplace potential claims if S. 464 were enacted. The bill, irrespective of the merits of any lawsuit, also would generate many millions of dollars of additional cost by the necessity of additional lawyers and administrative support to my division, the Civil Division, and to the Justice Department itself merely to represent the United States in cases now barred by the exception. This prediction takes on significant meaning when one looks at the almost $200 billion in tort claims that now are pending against the United States. The annual payout from the judgment fund currently resulting from tort claims liability runs at the average rate of somewhat over $200 million. Our success rate, of course, is something that the sponsors suggest is a reason to change the law. We suggest it is indicative of a system that is working well, well enough to continue with our current regime. Experience suggests that the discretionary function exception is probably the most important reason that the Federal Tort Claims Act does not add several billions of dollars to the deficit every year. The enactment of S. 464, with its substantial abridgment of the discretionary function exception, would destroy the balanced liability regime of current law and would impede effective governmental decisionmaking while creating immense budgetary risk. This seems altogether a bad bargain for the taxpayer, especially when one considers the comments which I have had the chance to read before this testimony today of the victims and putative victims of some of these situations that this bill would purport to cover. They recognize that to the extent that difficulties are created for them, it is not by the Federal tort claims system. It is by the system of jurisprudence at large that requires the payment of a couple of dollars in processing costs for every 50 cents that ends up in the pocket of a victim or the families of the victims. S. 464 would abrogate the discretionary function exception with - regard to allegations that the United States had violated unenumerated occupational safety and health standards, or was otherwise negligent at any workplace owned, operated, or under contract by the Federal Government. If this bill were enacted and then interpreted to mean, as is entirely possible, that the United States could be held liable when a private company violates a safety or health standard and the United States failed to cause the private violator to correct the problem beforehand, then the bill conceivably could federalize every occupational accident in the country and make the treasury the ultimate insurance fund for workers compensation claims, which now would be paid using the full measure of tort damages rather than the current State-based system that we have all come to know. Multibillion-dollar liability for failure to correct private violations is currently barred under the discretionary function exception as it presently stands. As I noted, the particular anomaly of this bill-when it comes to victims themselves, there is a more than adequate remedy already existent to compensate such injuries through workers compensation and through private tort remedies that are available against manufacturers, suppliers, and others. The so-called undercontract provision of the bill also would be likely to permit contractors to shift liability that they now assume from agencies' programmatic budgets to the judgment fund established under 31 U.S.C. 1304. That is the essence, we suggest, of the industry-based support for the bill, which could have substantial retroactive effect. In any event, we believe it inappropriate to permit the judgment fund to be used to defray costs engendered in the course of operation of a Government contract. Besides the overwhelming pure cost of such a shift, we think that this reallocation of ultimate responsibility would transfer large costs for workplace accidents from the responsible employers to the general public, would likely reduce or eliminate the incentive for employers and other private parties to maintain a safe workplace, and instead would influence them to rely passively on Government action rather than their own initiatives, and would increase the complexity and burden of litigation over Government action in the area of workplace safety. For all these reasons, we are opposed to this bill and ask for its rejection. [The prepared statement of Mr. Gerson follows:] Department of Justice STATEMENT OF STUART M. GERSON ASSISTANT ATTORNEY GENERAL CIVIL DIVISION BEFORE THE SUBCOMMITTEE ON COURTS AND ADMINISTRATIVE PRACTICE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE CONCERNING S. 464 ON FEBRUARY 20, 1990 Although the Department of Justice is compelled to state its opposition to S. 464, we greatly appreciate the opportunity presented by the Subcommittee to express our views and to contribute to what we hope will continue to be a useful dialogue relating to the question of private litigation against the government. . S. 464, which is intended substantially to diminish the socalled discretionary function exception to the Federal Tort Claims Act ("FTCA"), would, if enacted, determinatively alter the effective jurisprudential balance that has been struck between the substantive and pecuniary interests of the citizens of the United States at large and the particular interests of individuals seeking tort damage recoveries from the federal government. Although the balance of interests impelled by the discretionary function exception, or indeed any such weighing among conflicting values, may be the subject of reasoned criticism, especially as applied to given cases, we believe that the exception, as it has evolved through practice and judicial interpretation, effectively serves the public interest. Accordingly, the Department would recommend Executive disapproval if S. 464 were presented to the President. The FTCA's discretionary function exception was designed to secure the essential executive governmental function: effectuation of official decisions and actions which are based the |