author: PECKHAM, Chief Judge.

text:
    JOHNS-MANVILLE SALES CORP., Plaintiff, v. UNITED STATES of America, Defendant.
    No. C-81-4561 RFP.
    United States District Court, N.D. California.
    Aug. 21, 1985.

      Clark J. Burnham, Moore, Clifford, Wolfe, Larson & Trutner Oakland, Cal., Dennis H. Markusson, Robert D. Batson, Johns-Manville Corp., Ken-Caryl Ranch, Denver, Colo., Harvey G. Sherzer, Howrey & Simon, Washington, D.C., Michael J. Ru-gen, Heller, Ehrman, White & McAuliffe, San Francisco, Cal., for plaintiff.
    Nancy B. Collins, David S. Fishback, U.S. Dept, of Justice, Torts Branch, Civil Div., Washington, D.C., for defendant.
   ORDER RE MOTION TO DISMISS

PECKHAM, Chief Judge.

INTRODUCTION:

Johns-Manville Sales Corp. (“J-M”) filed this action against the United States on December 7, 1981, to recover equitable indemnity, in whole or in part, from the United States, in the amount Johns-Man-ville paid to settle a claim with John C. Robinson. Robinson was a federal employee allegedly injured by exposure to asbestos-containing products J-M manufactured while working at Long Beach and Mare Island Naval Shipyards in California. Robinson was employed in these shipyards from 1965 to 1980. J-M settled that case for $45,000 in October of 1981.

J-M asserts four claims in its first amended complaint. These claims fall into two categories: 1) claims that the United States breached a duty it owed directly to Johns-Manville, and 2) a claim for partial equitable indemnity because the government, as employer and vessel owner, was negligent towards John Robinson.

The government has moved to dismiss claims one through four on the grounds that these counts fail to state a claim upon which relief can be granted, and that this court does not have subject matter jurisdiction. For the reasons set forth below, the court denies the defendant’s motion to dismiss claims one, two, and three, because J-M alleges that it was forced, under threat of civil and criminal penalties, to supply asbestos to the government. As discussed below, however, it is not clearly stated how asbestos J-M supplied during World War II caused Robinson harm. With regard to the causal element, the court treats the defendant’s motion to dimiss as a motion for more definite statement and grants J-M thirty days to amend its complaint to state facts to show the causal link between defendant’s behavior and Robinson’s injury for counts one, two, and three.

The court also denies the defendant’s motion to dismiss the fourth claim, preserving it to the extent that it rests on a theory of the defendant’s liability to John Robinson as vessel owner.

LEGAL ANALYSIS:

The legal analysis in this case is complex and depends upon a careful understanding of the relationship between the doctrines of waiver of sovereign immunity and state laws providing for liability and indemnification. The court first sets forth an overview of its analysis of the welter of laws and legal principles discussed by the parties in voluminous briefs.

Johns-Manville is suing the government under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), and 2671, et seq. Section 1346(b) of Title 28 provides jurisdiction for federal courts over suits against the United States where the "United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.”

Under the FTCA, the liability of the government depends on whether a private person in like circumstances would be liable under the state law applicable where the act or omission occurred. United States v. Muniz, 374 U.S. 150, 153, 83 S.Ct. 1850, 1853, 10 L.Ed.2d 805 (1963); Poindexter v. United States, 752 F.2d 1317 (9th Cir.1983); Wright v. United States, 719 F.2d 1032, 1034 (9th Cir.1983) (“The elements of a cause of action under the FTCA are determined by state law.”); Rudelson v. United States, 602 F.2d 1326, 1332-33' (9th Cir.1979). Thus, the court must ask whether, under the applicable state law, the plaintiff has stated facts which, if the government was a private person, would support liability.

J-M asserts two types of claims against the government: claims based on the government’s breaches of tort duties it allegedly owed directly to J-M, and a claim for equiable indemnity. Under a rule 12(b)(6) motion, the court will not dismiss a claim unless it appears that the plaintiff can prove no facts that support a claim for relief. Church of Scientology of California v. Flynn, 744 F.2d 694, 696 (9th Cir.1984). With the admonition in mind that a court should be reluctant to use rule 12(b)(6) to eliminate novel legal theories, Sherman v. St. Barnabas Hospital, 535 F.Supp. 564, 572 (S.D.N.Y.1982), the court evaluates each of J-M’s claims. The court starts first with J-M’s claims that the government breached duties owed directly to J-M.

Claims One through Three:

J-M argues that, in its first three claims, it alleges breaches of duties that the United States owed directly to J-M; that J-M is not suing derivatively for breaches of duties running solely to Robinson. Therefore, J-M argues, any workmen’s compensation law, either the Longshoremen and Harbor Workers’ Compensation Act or California workmen’s compensation law, is inapplicable to this case. The only applicable law is general tort law of California.

In Claim One, J-M alleges that the government had a duty to “investigate, evaluate, report, and disclose the potential risks associated with installation or removal of asbestos-containing materials in the Navy shipyards,” J-M’s First Amended Complaint, ¶ 53, and that the failure of the government to carry out this duty caused the injuries allegedly sustained by Robinson. J-M thus maintains that it is “entitled to receive from the United States any damages sustained by Johns-Manville in connection with the Robinson case.” Id. at ¶ 54.

In Claim Two, J-M claims that the government had exclusive control over the asbestos product specifications and knowledge, superior to J-M’s, of the risks involved for workers using asbestos. This exclusive control and superior knowledge gave rise to an implied tort duty to indemnify J-M for any damages that resulted from J-M’s compliance with these government specifications. J-M alleges that the money it paid out to Robinson in settlement is included within these damages that the government had a duty to indemnify.

Finally, in Claim Three, J-M alleges that the government impliedly warrented that it would use the asbestos-containing materials in its shipyards in a “safe manner designed to prevent exposure to excessive concentrations of asbestos, and in a manner designed to conform with recognized and Government adopted standards and safe work practices.” Id. ¶ 61.

The government also allegedly warranted that it would indemnify J-M for any claims it paid to workers such as Robinson, who were allegedly injured as a result of the government’s negligent utilization of the asbestos materials. J-M alleges that the government committed tortious (“negligent”) breaches of these warranties, and that J-M is entitled to full indemnity of the amount it paid to Robinson. Id. at ¶ 63.

In support of these claims, J-M points to a number of facts which, under this motion, the court must take as true. Church of Scientology of California v. Flynn, 744 F.2d 694, 696 (9th Cir.1984). First, J-M alleges that, during World War II and in the years thereafter, it was required by law to enter into contracts for the supply of asbestos-containing materials for use in the construction, conversion, or repair of Navy vessels. First Amended Complaint at ¶¶ 12, 13. Second, J-M alleges that the government participated in the design and specification of these materials. Id. at ¶ 13. Third, J-M alleges that the government established its own standards based on superior knowledge of the health hazards of asbestos, for the safe use of asbestos. Id. at ¶¶ 14-21. But, the government allegedly failed to enforce its own safety standards. Id. at ¶ 22. And fourth, J-M alleges that tte government had exclusive control over working conditions in the navy shipyards and at times (particularly during 1964-66) blocked J-M’s efforts to present its asbestos-related safety programs to employees of government shipyards. Id. at 111122-50.

The court analyzes J-M’s claims under California tort law, and finds that J-M’s allegations do support a cause of action that sounds in tort. J-M must prove that the government forced J-M, under the threat of civil and criminal sanctions, to supply asbestos that conformed to government specifications, and that the government had knowledge, superior to that of J-M’s that asbestos was harmful to the safety of its workers. Furthermore, J-M must show that the government failed to implement safety procedures to protect its workers.

While no California tort principles neatly fit the facts alleged in this ease, the court looks to California law to impose upon the government a duty to act with reasonable care towards J-M. The court relies on analogies from the California law of special relationships to find legal support for JM’s claims in counts one through three. The court concludes that the defendant created a special relationship with J-M when it allegedly required J-M, under penalty of law, to supply products the defendant knew to be dangerous to its workers.

“[T]he common law, reluctant to impose liability for nonfeasance, generally does not impose a duty upon a defendant to control the conduct of another ... [citations omitted], unless the defendant stands in some special relationship either to the person whose conduct needs to be controlled or to the foreseeable victim of such conduct.” Johnson v. County of Los Angeles, 143 Cal.App.3d 298, 191 Cal.Rptr. 704 (1988). In Johnson, the County Sheriff arrested the decedent for driving on the wrong side of the freeway in an attempt to commit suicide. Shortly after the arrest, plaintiff, the decedent’s wife, informed the defendants that the decedent was a paranoid schizophrenic who had suicidal tendancies and required immediate care. She also told defendants that the decedent should not be released. The defendants assured plaintiff that they would hospitalize decedent and that she should not worry. Id. at 304, 191 Cal.Rptr. at 707. The defendants, however, released the decedent without informing the plaintiff, and two days later he committed suicide. The court in Johnson concluded that “Sheriffs here stood in a special relationship to Decedent and to Appellants, and had a duty to warn Appellants before releasing Decedent.” Id.

In order to establish this special relationship, J-M must establish, at a minimum, the foreseeability of the harm. Johnson v. County of Los Angeles, supra, 143 Cal.App.3d at 308, 191 Cal.Rptr. at 710 (1983). Here, J-M has alleged facts that would show foreseeability, if the government knew of the harms associated with asbestos, knew that it could take safety precautions to avoid the harm, and knew that Robinson could sue J-M for harm done to him by the asbestos.

That J-M was a reasonably foreseeable victim is not alone sufficient to establish the special relationship. Davidson v. City of Westminster, 32 Cal.3d 197, 209, 649 P.2d 894, 898, 185 Cal.Rptr. 252, 258 (1982). In Davidson, the California Supreme Court held that the police had no duty to warn a husband and wife in a laundromat of the presence of a person the police suspected of previous stabbings, even though the police had this suspect under surveillance in the laundromat with the couple. Id. at 210, 649 P.2d at 900, 185 Cal.Rptr. at 258. The suspect eventually stabbed the wife, but the court said it would not impose a duty to warn on the police, even though the wife was a reasonably foreseeable victim, because the police had not placed the wife in danger and the couple did not rely on the protection of the police when they went into the laundromat.

The Court explained, “a finding of special relationship does not require a promise or reliance thereon in order to impose a duty of care.” Id. at 207, 649 P.2d at 899, 185 Cal.Rptr. at 257. But, in order to impose a duty to protect, the defendant must either place the plaintiff in danger or act in such a way so that the plaintiff becomes dependant upon the defendant. Id. at 208, 649 P.2d at 900, 185 Cal.Rptr. at 258.

Here, J-M has alleged that, by forcing it to supply asbestos, the government had a duty to J-M to see that it would not suffer injury from a danger that the government created. J-M was clearly dependant upon the government because it was compelled to supply asbestos to the government for ships upon which Robinson was eventually to work.

The court recognizes that the special relationship doctrine does not fit the typical manufacturer-supplier relationship because the parties in the typical situation consent to deal with each other and presumably can negotiate contractual provisions to protect themselves. Hence, the parties do not need the protection of tort law, that imposes duties of reasonableness upon people whether they agree explicitly to such restraints or not. Rather, to the extent that the government required J-M to supply asbestos, J-M was not like an ordinary supplier who sold his products voluntarily to the buyer and who could freely negotiate contract terms. The facts alleged in the case at bar are analogous to the case in which one side in a contractual relationship has oppressive bargaining power, and uses this power unfairly in the bargaining process or to obtain unconscionable terms in the contract. In such situations, the California legislature directs the courts to refuse to enforce unconscionable contract terms. Cal.Civil Code § 1670.5 (codifying the Uniform Commercial Code’s unconscionability section 2-802, and applying it to all contracts, not just sale of goods contracts). The doctrine represents the public policy against oppressive contractual relationships.

J-M’s Third Claim is also based on tort duties that arise from an implied-in-fact contractual relationship. J-M alleges that the facts of the government’s participation in the design and specification of the asbestos-containing products, its representations as to the safe use of the products, its failure to allow J-M to present certain safety programs at the naval bases, and the assurances that the government was handling safety matters adequately, all support a claim of implied contractual indemnity. In other words, J-M could have interpreted this government activity as a signal that the government was assuming responsibility for worker safety, that J-M was relieved from further duty relating to safety, and that the government would indemnify J-M for any damage caused by the government’s failures in providing for its workers’ safety.

Under California law, an obligation to indemnify may arise from either of two general sources: “First, it may arise by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances. Second, it may find its source in equitable considerations brought into play either by contractual language not specifically dealing with indemnification or by the equities of the particular case.” E.L. White, Inc. v. City of Huntington Beach, 21 Cal.3d 497, 506-07, 579 P.2d 505, 510, 146 Cal.Rptr. 614, 619 (1978); Rossmoor Sanitation Inc. v. Pylon Inc., 13 Cal.3d 622, 628, 532 P.2d 97, 100, 119 Cal.Rptr. 449, 452 (1975).

Defendant argues in its Reply Memorandum that, to the extent J-M’s Claims One, Two, and Three are based on a contractual theory, J-M has not alleged proper jurisdiction in its First Amended Complaint. Government’s Reply, at pp. 23, 25, 26. Specifically, defendant argues that an action based on a contract must be brought under the Tucker Act, 28 U.S.C. § 1346(a)(2) and § 1491. Defendant maintains that as J-M does not allege Tucker Act jurisdiction, JM’s claims must be dismissed. This argument, however, misunderstands J-M’s theory. J-M alleges that a tort duty resulted from the relationship of the parties. California courts have long recognized that a “wrongful act committed in the course of a contractual relationship may afford both tort and contractual relief, and in such circumstances the existence of the contractual relationship will not bar the injured party from pursuing redress in tort.” Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 174-75, 610 P.2d 1330, 1334, 164 Cal.Rptr. 839, 843 (1980). It is well-established law in California “that if the cause of action arises from a breach of promise set forth in the contract, the action is ex contractu, but if it arises form a breach of duty growing out of the contract, it is ex delicto.” Id., quoting Eads v. Marks, 39 Cal.2d 807, 811, 249 P.2d 257, 260 (1952).

The purpose of imposing tort duties upon contracting parties is to implement fundamental public policy. Tameny v. Atlantic Richfield Co., supra at 176, 610 P.2d at 1335, 164 Cal.Rptr. at 174-75. In Tameny, the California Supreme Court recognzied the policy of protecting employees who refuse to obey employer’s instructions to violate the law. The court held that an employer who threatens to or discharges an employee for refusing to violate anti-trust laws, wrongfully encourages an employee to violate his duty to obey the law. Thus, an employee who is fired for refusing to violate anti-trust laws may maintain a tort action for wrongful discharge and is not limited to suing for breach of contract. Id. at 178, 610 P.2d at 1337, 164 Cal.Rptr. at 846.

While California courts have never recognized such a duty in a buyer-seller relationship, J-M did not have a typical buyer-seller relationship with the government. The fundamental public policy in this case is represented in the policy against unconscionability in contractual relationships. As stated above, the California legislature has extended the U.C.C.’s uneonscionability doctrine to all contracts. And prior to the enactment of Cal.Civil Code § 1670.5 in 1979, “[u]nconscionability ha[d] long been recognized as a common law doctrine which [was] consistently applied by California courts in the absence of specific statutory authorization.” A & M Produce Co. v. FMC Corp., 135 Cal.App.3d 473, 484, 186 Cal.Rptr. 114, 121 (1982). Thus, the facts J-M alleges support a cause of action under this tortious breach of an implied contractual provision also.

The duty on the part of the government that the court finds here is limited to injury J-M suffered by way of lawsuits caused by asbestos J-M was forced by law to supply to the government, not from asbestos J-M voluntarily contracted to supply. It appears, however, that Robinson was not working during the time J-M had a mandatory obligation to provide asbestos. But, counsel for J-M suggested at oral argument that Robinson worked to refit ships and remove asbestos that had been installed the time J-M was under legal obligation to supply asbestos. The court will treat defendant’s motion to dismiss as a motion for more definite statement as to the causal element in counts one through three. See Burkhead v. Phillips Petroleum Co., 308 F.Supp. 120, 123-24 (N.D.Cal.1970). The court grants J-M thirty days to amend its pleading to alleged explicitly this fact of causation.

To the extent that J-M alleges harm caused by asbestos it supplied as part of a contractual relationship entered into freely, the court finds J-M does not state a cause of action that sounds in tort. The concerns the court has about the element of coersion are not present when J-M chooses to enter into contracts to sell asbestos to the government, especially after 1964, when by J-M’s own pleading, it realized the dangers of asbestos. J-M’s first amended complaint 1149. Rather, J-M is left with its claim for equitable indemnity, as set forth below.

Claim Four: Equitable indemnity:

J-M’s fourth claim seeks equitable indemnity from the government for its alleged negligence towards Robinson on two grounds. First, J-M argues that the government breached a duty of care to Robinson, as Robinson’s employer, and therefore J-M is entitled to partial equitable indemnification for the portion of the government’s fault. J-M also contends that the government breached a duty of care it owed to Robinson in its role as the owner of the vessels upon which Robinson worked.

The court begins it discussion of third-party suits against the United States with the 1983 Supreme Court decision of Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1983). In Lockheed, the Supreme Court rejected the argument that the exclusivity provision of the Federal Employee Compensation Act (FECA) barred third party indemnity suits against the United States. The FECA prohibits “actions against the United States by an employee, his legal representatives, spouse, dependents, next of kin, [or] any other person otherwise entitled to recover damages from the United States ... because of the [employee’s] injury or death.” 5 U.S.C. § 8116(c).

In Lockheed, the Lockheed Aircraft Corporation sought indemnity from the United States for a settlement Lockheed had reached with a federal employee who was injured in a Lockheed airplane. The Court reviewed the language of the FECA exclusivity provision, the legislative history, and public policy underlying the FECA. The Court found that the quid pro quo present in the FECA, and all worker compensation legislation — in which employees are guaranteed immediate fixed benefits in return for the right to sue the government — did not operate to bar third parties from suing the government. Under the FECA, these third parties received no quid pro quo in exchange for giving up the right to sue the government. Id. at 198, 103 S.Ct. at 1038.

It is important, however, to remember that Lockheed does not confer upon a third party a right to sue, rather the Supreme Court just said that the FECA does not present a bar to third-party suits. Id. As the Court explained, the issue of the substantive law of indemnity was not before the Court. Id. at 197, n. 8, 103 S.Ct. at 1037. Thus, the plaintiff must affirmatively establish that it has a valid theory for indemnification.

To establish affirmatively its claim, the FTCA requires J-M to show that a private person in similar circumstances would be liable to J-M. The California Supreme Court, in American Motorcycle Association v. Superior Court of Los Angeles, 20 Cal.3d 578, 591, 578 P.2d 899, 907, 146 Cal.Rptr. 182, 190 (1978), held that California’s equitable indemnity law is to be based on a comparative negligence concept. The co-defendant tortfeasors remain jointly and severally liable to the plaintiff, but may apportion damages among themselves on a percentage fault basis. Of course, J-M may obtain equitable indemnity from the government only if J-M can show that the government could have been liable to Robinson.

It is clear that the government, as a private employer in the state of California or under the Longshoremen and Harbor Workers’ Compensation Act, ordinarily would not be liable to Robinson in a tort action. He is limited to recovering workmen’s compensation. 33 U.S.C. § 905(a); Cal.Labor Code § 3864. J-M has two theories, however, on which to argue that the government, as a private employer in California, could be held liable to Robinson. The court examines each of J-M’s arguments in turn.

1. Government as a vessel owner:

Both parties agree that, if the government were a private employer in this case, the Longshoremen and Harbor Workers’ Compensation Act (LHWCA) would apply. The Supreme Court has said that, if the employer also owns the vessel on which the employee is injured, the LHWCA allows the employee to sue the employer in negligence, not in his capacity as employer, but as the vessel owner. Jones & Lauglin v. Pfiefer, 462 U.S. 523, 532,103 S.Ct. 2541, 2548, 76 L.Ed.2d 768 (1983). The Court allowed this action because § 905(b) of the LHWCA preserves the employee’s right to sue a vessel owner for negligence. The Court reasoned that the employer, as vessel owner, should not escape the effect of this statutory provision merely because it also happens to be the employer. Id.

Treating the government as a private employer under the LHWCA, Robinson could have sued the government-employer under a negligence theory. In turn, this underlying liability allows J-M to sue the government for equitable indemnity, unless some other bar to J-M’s recovery exists. The government asserts two potential bars to J-M’s recovery. First, the government argues that § 905(a) of the LHWCA is an exclusivity provision that absolutely bars J-M’s third-party suit. Section 905(a) provides that, “[t]he liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death.”

The LHWCA’s exclusivity provision is virtually identical to the exclusivity provision of the FECA that was the subject of the Lockheed decision. As the government did in Lockheed with regard to the FECA, the government argues here that this exclusive remedy provision bars J-M’s third party suit. The government attempts to distinguish Lockheed by saying that in this case, the legislative history of the 1972 LHWCA amendments, of which § 905(a) was one, shows that Congress intended to bar third-party indemnity suits.

The court reads the legislative history differently. The legislative history reveals that Congress inteded to bar vessel owners from being indemnified from stevedore-employers for money damages that the vessel owners paid out to the longshoremen-employees injured by the vessel owner’s negligence. In return, - however, Congress shielded the vessel owners from suits by longshoremen on a seaworthiness strict liability doctrine. That is, longshoremen can only sue the vessel owners on a negligence theory, though prior to 1972, the Supreme Court had said they could sue vessel owners on a seaworthiness theory. Sees Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946).

It is clear from the legislative history of the 1972 amendments that Congress was concerned with balancing the duties and liabilities among these three specific parties. The legislative history does not show that Congress had other third parties in mind when it was considering barring suits for indemnity against the stevedore-employer.

Apparently, the only court to have considered whether the LHWCA bars indemnity suits by third parties other than vessel owners, decided that the Lockheed decision provides that the indemnity action is not barred. Austin v. Johns-Manville Sales Corp., Civil. No. 78-122 P, bench ruling (March 9, 1984). The court in Austin had originally ruled that the LHWCA did bar manufacturers’ indemnity suits against employers, 508 F.Supp. 313 (D.Me.1981), but reversed itself in light of Lockheed.

In Lockheed, the Supreme Court commented on the LHWCA, by way of contrast with the FECA, and noted that Congress abolished the third-party indemnity action only in conjunction with a quid pro quo to benefit the third party. The only third party that benefits under the LHWCA, however, is the vessel owner. A manufacturer, such as J-M, may still be liable to an employee on a strict liability theory. In fact, Robinson’s complaint, attached as Exhibit B to Plaintiff’s Memorandum in Opposition, filed 7/30/84, pleads a claim that sounds in strict products liability. (Robinson’s third cause of action). In Lockheed, the fact that Congress had provided no quid pro quo in the FECA compensation scheme for the third party was grounds for the Court to refuse to bar the third party’s claim against the United States. The same result is warranted here.

The government also argues that the exclusivity provision of the California workemen’s compensation act bars J-M’s recovery in this case. Under California law, if an employee is injured in the scope of his employement, Labor Code § 3864 “normally precludes a third party tortfeasor from obtaining indemnification from the employer, even if the employer’s negligence was a concurrent cause of the injury.” American Motorcycle Association v. Superior Court, 20 Cal.3d 578, 607 n. 9, 578 P.2d 899, 917-18 n. 9, 146 Cal.Rptr. 182, 200, n. 9 (1978); E.B. Willis Co., Inc. v. Superior Court of Merced County, 56 Cal.App.3d 650, 654, 128 Cal.Rptr. 541, 542 (1976) (under Labor Code § 3864, employer only required to indemnify a third party if there is an express indemnification agreement).

The answer to the government’s argument on California workmen’s compensation law turns on an analysis of J-M’s claim that California workmen’s compensation law would allow Robinson to sue an employer covered under such law. The court considers J-M’s argument below.

2. Government as a co-manufacturer:

J-M alleges that the government could be held liable to Robinson based on California’s “dual capacity doctrine.” See Plaintiff’s Supplemental Memorandum, filed 10/1/84 at 35-39. This doctrine allows the employee to sue an employer whose acts, done in a legal capacity other than as employer, cause injury to the employee. Shields v. County of San Diego, 155 Cal.App.3d 103, 109, 202 Cal.Rptr. 30, 34 (1984). As applied to an employer-manufacturer, it affords an injured employee, statutorily entitled to a workmen’s compensation award, a separate remedy against the employer when the injury results from an act or omission of an employer and is inflicted in a relationship distinct from that of employer-employee. Thus, an employer whose employee is injured when using a defective device manufactured by an employer, is liable for breaching a duty toward the employee that differs from the duty created by the employer-employee status. Id.; Bell v. Industrial Vagas, Inc., 30 Cal.3d 268, 282, 673 P.2d 266, 273, 179 Cal.Rptr. 30, 39 (1981); Franco v. United Wholesale Lumber Co., 148 Cal.App.3d 981, 983, 196 Cal.Rptr. 430, 431 (1984).

In applying the dual capacity doctrine to an employer-manfacturer, the courts focus on “whether the manufacturer sells the defective product to the general public.” Nicewamer v. Kaiser Steel Corp., 143 Cal.App.3d 31, 37, 191 Cal.Rptr. 522, 525-26 (1983). In Nicewamer, a plaintiff-employee, acting within the course and scope of his employment, was injured when an improperly connected steel beam fell fifteen feet to the ground. The steel beam was specifically fabricated by the products division of the employer, Kaiser Steel Corporation, and the plaintiff alleged the beam was “not unique in that it was generally of a size and design regularly fabricated by [Kaiser] and stockpiled for sale to the public.” Id. at 34, 191 Cal.Rptr. at 524.

The court explained that the dual capacity exception only applies if the plaintiff can show that: 1) the defendant does manufacture the product for sale to the public, and 2) the risk thereby created is the same as the one which the plaintiff was exposed. Id. at 40, 191 Cal.Rptr. at 522. The plaintiff in Nicewamer failed because he could not show that the risk of injury that befell him, from the improper connection, was one that the public faces when using the steel beam.

J-M’s allegations that the United States was liable to Robinson under the dual capacity doctrine cannot pass the Nicewarner analysis. While the United States allegedly aided in the design and arguable the manufacture of the asbestos-containing products, J-M does not allege that the United States ever sold these products to the general public at either the wholesale or retail level. It is only through the manufacture and sale of the asbestos-containing products that the United States could be exposed to liability under the dual capacity doctrine. The court, then, must grant the United States’ motion to dismiss claim four to the extent that it is based on the government’s liability to Robinson in its capacity as manufacturer.

CONCLUSION:

For the foregoing reasons, the court hereby:

1. DENIES the defendant’s motion to dismiss claims one, two, and three, to the extent that J-M alleges that it was forced, under threat of civil and criminal penalties, to supply asbestos to the government,

2. GRANTS the plaintiff 30 days to amend its complaint to allege explicitly facts to show how the asbestos J-M was forced to supply to the government caused harm to Robinson,

3. GRANTS the defendant’s motion to dismiss claim one, two, and three, to the extent that these claims rest on sales of asbestos J-M made to the government voluntarily, and

4. DENIES the defendant’s motion to dismiss claim four to the extent it claims indemnity for the government’s liability to Robinson in its capacity as vessel owner.

IT IS SO ORDERED.

      . In February of 1983, the court dismissed the first three causes of action of J-M’s 1981 complaint, on the grounds that the court had no subject matter jurisdiction because J-M had failed to file for administrative relief under the Federal Tort Claims Act, 28 U.S.C. § 2675. The court retained jurisdiction over J-M’s fifth amendment claim because it involved no administrative claim requirement. On January 9, 1984, the court granted J-M’s request to file its first amended complaint because the court found that J-M had satisfied its duty to bring an administrative claim.
      At that time, the court also rejected the government's argument that the exclusive remedy provision of the Federal Employees’ Compensation Act ("FECA”), 5 U.S.C. § 8116(c), barred J-M's first four claims. The court found that the 1983 Supreme Court decision in Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1993), effectively answered the defendant’s argument.

      . In its first amended complaint, J-M originally included a count alleging a fifth amendment taking violation and a count asserting admiralty jurisdiction. In its reponse to the defendant’s motion to dismiss, J-M has dropped its claims based on these two theories.

      . Claim four of the first amended complaint originally also contained a claim for contribution. Contribution in California is a statutory right, and may only be had when a “money judgment has been rendered jointly against two or more defendants in a tort action.” Cal.Code Civ.Pro. § 875. The government says that no money judgment has been rendered against J-M and the United States in Robinson’s action, and therefore J-M is not entitled to contribution.
      J-M has conceded the accuracy of the government’s interpretation of California contribution law and drops its claim for contribution. Plaintiffs Opposition, filed 7/30/84 at 46.

      . Note that this analysis makes state law regarding the liability of municipalities irrelevant to this case. The Supreme Court has said that federal law governs the scope of the federal government’s immunity, therefore any state law on municipal and state government immunity does not apply to suits under the FTCA. United States v. Muniz, 374 U.S. 150, 83 S.Ct. 1850, 10 L.Ed.2d 805 (1963) (FTCA allowed suit by federal prisoner who alleged negligence by federal prisión officials in Indiana, even though state law may bar such suits by state prisoners).
      In other words, the court must apply the state law applicable as if the federal government were a private person acting in that state. See e.g., Indian Towing Co. v. United States, 350 U.S. 61, 65, 76 S.Ct. 122, 124, 100 L.Ed. 48 (1955) (United States could be liable for negligent operation of lighthouse. Court rejected the reading of “the statute [FTCA] as imposing liability in the same manner as if it [the government] were a municipal corporation and not as if it were a private person.”); Wright v. United States, 719 F.2d 1032, 1043 (9th Cir.1983) (plaintiff could sue IRS agent for malicious prosecution under the FTCA even though California law provided California government agents immunity from malicious prosecution action; court said equating the United States to that of a state municipal corporation under state law would be erroneous); Guy v. United States, 492 F.Supp. 571, 571-72 (N.D.Cal.1980) (federal prisoner allowed to sue prison officer for negligence even though California state law would provide immunity for state officials on those facts). The court rejects J-M's argument that these cases govern the court’s consideration of the government’s liability here. See Plaintiffs Memorandum in Opposition, filed 7/30/84 at 25.

      . J-M takes conflicting positions on which state laws are applicable to the government in this case. At one point, in discussing California’s conflict of interest laws, J-M argues that the government’s negligent acts or omissions occurred in Washington, D.C., where governmental decision were being made. Plaintiffs Opposition, filed 7/30/84 at 44. This reasoning might lead the court to find that the appropriate state law is the law of the District of Columbia. J-M also strenuously argues that this court should apply the general tort law of California in evaluating its claims. See e.g., Plaintiffs Supplemental Memorandum, filed 10/1/84 at 48-52 (court should apply California's Good Samaritan law). Moreover, J-M argues that the court should apply California’s conflict of law rules in reaching a decision to apply federal maritime law. Plaintiffs Opposition at 44; Plaintiffs Supplemental Memorandum at 24.
      Under the FTCA, the court must decide "where the negligent act or omission occurred and not where the negligence had its ‘operative effect’ (i.e. the situs of the injury.)” Roberts v. United States, 498 F.2d 520, 522 n. 2 (9th Cir.1974). Bad acts or omissions on the part of the government may have occurred all over the United States, but J-M is complaining here about the alleged actions occurring at two naval bases in California where the government’s alleged failure to warn and supervise John Robinson was the proximate cause of the harm J-M suffered in this case. The court, therefore, looks to and applies California law.

      . This is the analysis the district court in Maine used when confronted with the claims by a group of asbestos manufacturers, defendants in suits by various persons who worked with asbestos, against the United States for a series of alleged breaches of duties the government owed the manufacturers. The district court in Maine evaluated the manufacturers’ claims against the government under Maine tort law, and dismissed most of the manufacturers' claims for failure to state claims. In Re All Maine Asbestos Litigation, 581 F.Supp. 963 (D.Me.1984).
      In the All Maine Asbestos Litigation, case, the court said that the asbestos manufacturers had stated a cause of action against the government on a Good Samaritan theory. The manufacturers sought indemnity for claims by government shipyard workers on the theory that, "by undertaking to conduct studies, surveys and experiments designed to protect the health and safety of asbestos workers, who relied on the United States’ actions to their detriment, the United States assumed a duty to provide warnings and otherwise exercise reasonable care to proect those workers.” All Maine Asbestos Litigation, supra, 581 F.Supp. at 977-78.
      The court went on to hold that summary judgment against the manufacturers on this count was warranted, because there was no evidence that the workers were aware or ever relied on any health and safety surveys or studies the government was doing. Id. at 978-79.

      . Cf., Santisteven v. Dow Chemical Company, 506 F.2d 1216, 1219 (9th Cir.1974). In this case, a copper company employee, who was seriously injured while using flake caustic soda, brought a personal injury action against the supplier of the chemical. The supplier then filed suit against the copper company claiming that the copper company had a duty to the supplier to avoid subjecting the supplier to tort liability. In rejecting this theory, the Ninth Circuit held simply that "indemnity does not work in this way.” Id. The court stated that "in the absence of a specific legal relationship (e.g. master-servant) or contract-type obligation, indemnity is tirggered not by "an abstract duty owed a third party” but only when it is more just to shift the burden of loss. Id.

      . Both parties agree that the LHWCA would apply if the court treated the government as a private shipyard employer in California. Government’s Memorandum in Suppoert, filed 5/14/184 at 8. Plaintiffs Memorandum in Support, filed 7/30/84 at 30. The LHWCA covers “any harborworker including a ship repairman, shipbuilder,...” 33 U.S.C. § 902(3). Robinson worked as an insulator in ships in dry dock.

      . The government points to a recent amendment to § 905(b) of the LHWCA that prohibits the employee from suing the vessel owner who is an employer on a negligence theory. The fact that Congress passed this amendment, to overrule Jones & Lmighlin, serves to show that Congress reocgnized that the court’s interpretation of the LHWCA, in effect during the time relevant to this case, is correct.

      . The California legislature eliminated the employee’s right to pursue actions under the dual capacity doctrine, by amending the Labor Code s 3602. This section did not go into effect until January 1, 1983, and does not affect cases that arose before that date. Franco v. United Whole-sale Lumber Co., 148 Cal.App.3d 981, 983 n. 1, 196 CaLRptr. 430, 431 n. 1. (1984).

      . In the case of In Re All Maine Asbestos Litigation, 589 F.Supp. 1571 (D.Me.1984), the court did not dismiss a claim by the asbestos manufacturers that is very similar to J-M's claim here. In Maine, the defendant asbestos manufacturer sought indemnity from the government for its negligence towards employees in its capacity as vessel owner. Id. at 1575. The district Court in Maine did not dismiss the claim because it was not clear whether the Maine courts would accept a dual capacity theory. Id. at 1576. The court said it would consider a motion for certificaiton to the Maine Supreme Court.
      Unlike Maine law, however, the California courts have defined and discussed the dual capacity doctrine, and it is clear that, if presented with the allegations in this case, the California courts would not allow Robinson to sue his employer as a co-manufacturer.


source: Caselaw Access Project

author: HILLMAN, District Judge.

license: Public Domain

text:
    UNITED STATES of America and Maria Della Mora, Revenue Officer of the Internal Revenue Service, Plaintiffs, v. Phillip B. GRABLE, Defendant.
    No. G84-1130 CA.
    United States District Court, W.D. Michigan, S.D.
    Aug. 23, 1985.

      Glenn L. Archer, Jr., Asst. Atty. Gen., Tax Div. by D. Patrick Mullarkey, Chief, Civil Trial Section, U.S. Dept, of Justice, Washington, D.C., John A. Smietanka, U.S. Atty. by Edith A. Landman, Grand Rapids, Mich., for Government.
    David M. Gadaleto, Theresa Mikan, Lansing, Mich., for defendant.
   OPINION RE MOTION FOR ASSESSMENT OF ATTORNEY FEES

HILLMAN, District Judge.

This was originally an action to enforce an Internal Revenue summons issued by a revenue officer of the Internal Revenue Service (IRS) to respondent, Phillip B. Grable (taxpayer), pursuant to section 7602 of the Internal Revenue Code of 1954, 26 U.S.C. § 7602. The summons arose out of an investigation of the federal tax liability of the taxpayer for the years 1979 through 1982. The case is now before the court on the government’s motion for the assessment of attorney fees against the taxpayer’s attorney, David M. Gadaleto (Gadaleto).

A petition to enforce the IRS summons was filed in this court pursuant to section 7402(b) and 7604(a) of the Internal Revenue Code of 1954, 26 U.S.C. §§ 7402(b) and 7604(a). The taxpayer was ordered to show cause on February 2, 1984, why he should not be ordered to obey the summons. At the request of the taxpayer, the hearing on the order was adjourned to February 10, 1984. At the show cause hearing, Gadaleto appeared on behalf of the taxpayer and argued that the summons was unenforceable because the assessment and payment of income taxes is purely voluntary. On March 1, 1984, United States Magistrate Stephen W. Karr filed a report and recommendation that the court enter an order compelling the taxpayer to comply with the summons previously served on him. The taxpayer filed objections to the magistrate’s report and recommendation. One of these objections, entitled, “Claim One,” was factually based and signed by the taxpayer’s attorney, Gadaleto. The other, “Claim Two,” asserted various constitutional infirmities in the summons specifically and the income tax laws generally, and was signed only by the taxpayer. After considering the taxpayer’s objections, this court adopted the magistrate’s report and recommendation and granted the government’s petition to enforce the IRS summons as issued. The taxpayer was ordered to comply with the summons on July 2, 1984. Pursuant to a request by Gadaleto, the date set for compliance was extended to July 9, 1984.

At the July 9, 1984, compliance meeting between the taxpayer and the IRS agent, Gadaleto submitted a “Government Employee Questionnaire” to the revenue officer and stated that his client would not comply with the summons until the agent answered the 22 questions on that questionnaire. The meeting terminated without the taxpayer complying with the summons as directed by this court’s enforcement order of June 1, 1984.

On July 10, 1984, the United States filed a petition that the taxpayer be required to show cause why he should not be held in contempt of court for his disregard for this court’s order. An order to show cause was entered July 12,1984. By letter dated July 26, 1984, the government’s attorney was advised by Gadaleto that his research had disclosed that the IRS agent’s refusal to answer questions was not a defense to the enforcement of the summons. He requested that another time and date be set for compliance with the summons.

On September 4, 1984, Gadaleto and the taxpayer again met with the IRS agent for the purported purpose of complying with the summons. However, Gadaleto announced that his client had no records which reflected or pertained to income since there is no section of the Internal Revenue Code which defines income. Yet, he further stated that his client would turn over specific items in response to specific requests. Repeatedly, in response to the IRS agent’s request for any records reflecting respondent’s income for the years 1979 through 1982, Gadaleto stated that his client had no records that reflected income. When questioned about gross receipts, Gadaleto responded: “I’m sorry, I don’t know what that means.” Nevertheless, in response to specific requests, the taxpayer, by his attorney, did produce certain records, i.e., bank statements and sales tax returns for the State of Michigan, but not others.

The government pursued its petition to show cause why the taxpayer should not be held in contempt of court for noncompliance with the June 1, 1984, court order directing that he comply with the IRS summons. At the September 17, 1984, show cause hearing, it emerged that at the September 4, 1984, summons enforcement meeting, the taxpayer had with him a set of 17 file folders entitled, “Gross Proceeds.” As noted, Gadaleto when questioned about gross receipts on September 4, 1984, had responded: “I’m sorry, I don’t know what that means.”

At the contempt show cause hearing, Gadaleto again asserted his argument that full compliance with the IRS summons was not possible because the word “income” is without definition or meaning and because the Internal Revenue Code nowhere establishes that any citizen is liable for income taxes. Despite these contentions, I ordered that the taxpayer produce the 17 files la-belled, “Gross Proceeds,” for inspection for a second time since I found the IRS summons perfectly clear on its face. Further, since the taxpayer is a self-employed businessman who makes and sells archery equipment, I found the information in the files concerning his sales of that archery equipment clearly reflected income within the meaning of the IRS summons. The taxpayer was, therefore, ordered to turn the records over to the IRS and was questioned by an attorney for the government regarding the records. The petition for contempt was dismissed on October 11, 1984, pursuant to the government’s notice that respondent Grable had complied with the summons.

The government now seeks assessment of its attorney fees against the taxpayer’s attorney, Gadaleto, pursuant to Fed.R.Civ.P. 11, and Local Court Rule 49, on the grounds that Gadaleto asserted arguments in opposition to enforcement of the summons which were not supportable by existing case law and as such were frivolous.

Fed.R.Civ.P. 11 provides that the signature of an attorney on a pleading constitutes certification that the attorney “has read the pleading ... [and] that to the best of his knowledge, information, and belief ... it is well grounded in fact and is warranted by the existing law or a good faith argument for the extension, modification, or reversal of existing law.” Further, Fed.R.Civ.P. 11 provides that a pleading signed in violation of Rule 11 may result in the imposition of sanctions “upon the person who signed it, a represented party, or both.” I find that Rule 11 does not provide a basis for granting the government’s request because Gadaleto did not sign those portions of the taxpayer’s pleadings in which the taxpayer asserts his various constitutional attacks on the Internal Revenue laws generally, and the summons in particular.

However, Gadaleto did make oral arguments at both of the show cause hearings which were not warranted by existing law or a good faith argument for changes in the law. Further, in both of two compliance meetings following this court’s order that the taxpayer comply with the IRS summons, Gadaleto posed frivolous objections to the taxpayer’s compliance.

Local Court Rule 49(c) provides that the court may, in its discretion, impose attorney fees on an attorney who asserts frivolous opposition to a party’s motion. See also Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 258-59, 95 S.Ct. 1612, 1622, 44 L.Ed.2d 141 (1975). (Courts have inherent power to award attorney fees in particular situations such as willful disobedience of a court order or when a losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.)

The government apparently seeks fees for all of the proceedings from the time Gadaleto first appeared to represent the taxpayer Grable. While I admit some skepticism regarding either the good faith or the competence of the taxpayer’s attorney during all of the proceedings, I do not find Gadaleto’s positions unequivocally frivolous and in bad faith until the July 9, 1984, compliance meeting. At that meeting, his client was already under court order to comply with the IRS summons. Further, the summons was clear on its face. Instead of advising his client’s compliance, Gadaleto demanded that the IRS agent answer 22 written questions, and refused any compliance until she had done so. Gadaleto subsequently acknowledged that such refusal of an IRS agent to answer written questions is no defense to the enforcement of an IRS summons, which enforcement had already been ordered by this court. See United States v. Berney, 713 F.2d 568 (10th Cir.1983). At the second compliance meeting of September 4,1984, scheduled at Gadaleto’s request, he again obstructed compliance with his assertions that he did not know the meaning of “income” nor the meaning of “gross receipts.” Gadaleto asserted similarly frivolous positions at the contempt hearing in this matter.

Accordingly, I find an award of attorney fees incurred by the government, against the taxpayer’s attorney David M. Gadaleto, clearly appropriate. Upon the government’s submission of an affidavit documenting its reasonable attorney fees for proceedings subsequent to the July 9,1984, compliance meeting, an order making such an award will be entered.

      . One of Gadaleto’s arguments in opposition to the government’s motion for assessment of attorney fees against him, is that the government was not the prevailing party since the taxpayer was not held in contempt of court for refusing to comply with the enforcement order. This argument is without merit. The government eventually secured compliance with the IRS summons, which had been its original objective. This court hesitated to impose the sanction of contempt against the taxpayer for his delay in compliance only because it questioned the accuracy of the legal advice the taxpayer had received.

      . Although Gadaleto’s arguments at the first show cause hearing appear completely frivolous, I give him the benefit of the doubt based on his recent entry into the case and his self-proclaimed lack of expertise in the tax area.


author: PIERAS, District Judge.

text:
    Denise De Vore BORREGO, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. No. 84-3115 (JP).
    United States District Court, D. Puerto Rico.
    Sept. 3, 1985.

      Asst. U.S. Atty. Eduardo Toro Font, Hato Rey, P.R., for plaintiff.
    Eduardo Castillo, Old San Juan, P.R., for defendant.
   OPINION AND ORDER

PIERAS, District Judge.

The present case is an action for damages commenced by Denise De Yore Borrego against the United States of America for acts arising out of an automobile accident. The complaint is predicated under the Federal Tort Claims Act (FTCA) 28 U.S.C. § 2671, et seq., as the case allegedly involved a Federal employee driving an official car while acting within the scope of his employment.

Plaintiff claims that on January 5, 1982, at 11:45 a.m., at Las Americas Expressway, a Ford automobile owned by defendant United States of America was operated by Dr. Lammar E. Cannon and impacted plaintiff’s vehicle on the rear. As a result of the accident, plaintiff claims to have suffered personal injuries and property damage.

Defendant contends that the Doctrine of Sovereign Immunity bars plaintiff from redress because at the time of the accident, Dr. Lammar E. Cannon was not acting within the scope of his employment, and therefore, no waiver of sovereign immunity is applicable to the factual situation pertinent herein.

I. PROCEDURAL HISTORY:

On or about September 23,1983, plaintiff filed an administrative claim with the United States Department of Agriculture seeking the redress of personal injuries and property damages allegedly suffered by said party as a result of the traffic accident which occurred on January 5, 1982.

On July 25, 1984, the United Staes Department of Agriculture denied plaintiff’s administrative claim and thereafter, on December 12, 1984, a complaint was filed before this Court pursuant to the provisions of the Federal Tort Claims Act, supra.

An answer to the complaint was filed by defendant on February 22, 1985, and the parties commenced discovery proceedings.

The United States of America filed a Motion to Dismiss and/or for Summary Judgment on March 5,1985, which plaintiff opposed on March 29, 1985.

A hearing on the aforementioned motions was held on April 17, 1985, and shortly thereafter, the parties submitted additional arguments pertaining to the issues raised by the government’s dispositive motion.

On May 5, 1985, an unopposed Motion for a Protective Order filed by the United States was granted and the proceedings herein have been stayed to the present.

After considering the legal arguments of the parties and the documentary evidence before us, we make the following findings of facts and conclusions of law:

II. FINDINGS OF FACT:

1. This is an action for the redress of damages arising out of an automobile accident which occurred on January 5, 1982, at about 11:45 a.m.

2. The two cars involved in the accident were respectively driven by plaintiff, Denise De Vore Borrego and by Dr. Lammar E. Cannon, an employee of defendant United States of America.

3. The car driven by plaintiff was privately owned.

4. The car driven by Dr. Cannon was owned by defendant United States of America.

5. Lammar E. Cannon was employed by the United States Department of Agriculture as Area Supervisor for the Meat and Poultry Inspection Program.

6. Plaintiff is about 30 years old. At the time of the accident she was studying at the University of Puerto Rico, Mayaguez Campus, towards a Marine Biology Degree.

7. The plaintiff and Dr. Cannon were driving along Expreso Las Americas in a Caguas to San Juan direction when Dr. Cannon collided against plaintiffs car, hitting it on the rear end (rear end collision).

8. At the time of the accident, Dr. Cannon was driving an official United States owned vehicle from his residence to his place of work. Mr. Cannon was allowed to use the vehicle until new renewal as he had to go to visit farms outside the Metropolitan area; consequently, he was allowed to take the vehicle home every night and from there to go to the places of inspection or to go to his office located at Federal Building, Chardón Avenue, Hato Rey.

9. Dr. Cannon’s regular working hours were from 7:30 a.m. to 4:00 p.m., but nevertheless, the day in which the accident occurred he had enjoyed several hours of annual leave and was proceeding to work when the accident occurred.

10. Sometime after the occurrence of the accident, Dr. Cannon requested that the United States Department of Justice represent him in the criminal case related to the car accident.

11. After considering internal documentation of the U.S. Department of Agriculture pertaining to Dr. Cannon’s authorization to use the government vehicle, the Justice Department denied his request as it understood that Mr. Cannon was not within the scope of employment at the time of the accident.

12. The administrative claim which plaintiff filed before the United States Department of Agriculture was denied oh the same grounds, that is, that at the time of the accident, Dr. Lammar E. Cannon was not acting within the scope of his employment and, therefore, the cause was not actionable under the Federal Tort Claims Act.

III. CONCLUSIONS OF LAW:

Present before the Court is the legal issue of whether Dr. Lammar E. Cannon was acting within the scope of his employment at the moment in which he was involved in a traffic accident with plaintiff. Said issue is of central importance to the instant case. If Dr. Lammar E. Cannon was acting within the scope of his employment at the time of the accident, then the provisions of the Federal Tort Claims Act would be applicable to this case and the United States of America would be a proper party defedant to the action. To the contrary, if Dr. Cannon was not acting within the scope of his employment, then plaintiff would be barred to seek redress from the Sovereign since the FTCA constitutes a limited waiver of immunity and it can only be applied to acts of Federal employees that fall within their scope of office.

Section 2672 of Title 28 of the United States Code states in its pertinent part as follows:

The head of each Federal agency or his designee, in accordance with regulations prescribed by the Attorney General, may consider, ascertain, adjust, determine, compromise, and settle any claim for money damages against the United States for injury or loss of property or personal injury or death of any employee of the agency while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in acordance with the law of the place were the act or omission occurred.

Furthermore, Section 2679(b) of Title 28 of the United States Code provides:

(b) The remedy against the United States provided by sections 1346(b) and 2672 of this title for injury or loss of property or personal injury or death, resulting from the operation by any employee of the Government of any motor vehicle while acting within the scope of his office or employment, shall hereafter be exclusive of any other civil action or proceeding by reason of the same subject matter against the employee or his estate whose act or omission gave rise to the claim.

When a legal action is instituted against the United States, the moving party has the burden of showing that the sovereign has consented to be sued by explicitly creating a cause of action. The plaintiff also has to establish that all conditions set forth by the waiver of sovereign immunity have been complied with.

When one embraces a critical analysis of the Doctrine of Sovereign Immunity it is ineludible to confront the fact that in the past the government was absolutely immune from being sued and that the only redress attainable for damages caused by the sovereign through its employees was through a congressional bill.

When Congress waived the government’s immunity from suit by enacting the FTCA, said waiver was very limited in nature and the courts have a duty of strictly interpreting said legislation. Honda v. Clark, 386 U.S. 484, 501, 87 S.Ct. 1188, 1197, 18 L.Ed.2d 244 (1967); United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941); Minnesota v. United States, 305 U.S. 382, 387, 59 S.Ct. 294, 83 L.Ed. 235 (1939).

In the instant case the statutes governing the waiver of sovereign immunity for tort actions against the United States unequivocally state that as a condition precedent to the waiver, the concerned federal employee must be acting within the scope of his employment. See, 28 U.S.C. § 1346(b), § 2672 and § 2679(b). Whether or not a particular act is performed within the “scope of office or employment” is a matter to be determined in accordance with the law of the state in which the alleged negligent act or omision occurred, Williams v. United States, 350 U.S. 857, 76 S.Ct. 100, 100 L.Ed. 761 (1955); Merrit v. United States, 332 F.2d 397 (1st Cir.1964).

Yes, it cannot be gainsaid that under the principles of respondeat superior, the employer is not liable for the actions of its employees when the same are taken beyond the scope of their employment, Carrillo v. Sameit Westbulk, 514 F.2d 1214, 1218 (1st Cir.1975).

In the Memoranda of Law submitted by plaintiff, said party proposes to the Court that under the Traffic and Motor Vehicles Law of the Commonwealth of Puerto Rico, at Section 13-101 (9 L.P.R.A. § 1751), liability can be imposed to the defendant. The above cited section states:

“The owner of a motor vehicle shall be liable for damages and losses caused through guilt or negligence by operation of such vehicle by or under the physical and actual control of any person who, for the main purpose of operating it, or of having or allowing it to be operated by a third person, obtains possession thereof by express or tacit authorization of its owner. In any event, it shall be assumed, unless otherwise proven, that any person operating or having in his possession or under his control a motor vehicle has obtained possession thereof with the authorization of its owner for the main purpose of operating it or having or allowing it to be operated by a third person.”
The person for whose negligence the owner of a vehicle is to answer under the provisions of the preceding paragraph shall be bound to indemnify said owner.

Plaintiff has cited numerous cases, in support of said contention, which are interpretative of Section 1751, supra. Nevertheless, plaintiffs theory is inapplicable to the factual situation herein.

This Court has made clear that Title 9, Laws of Puerto Rico Annotated, Section 1751, is a permissive use statute and as such does not apply to claims under the Federal Tort Claims Act, Rodriguez v. United States, 328 F.Supp. 1389, 1390 (1971), Aff'd. 455 F.2d 940.

Therefore, the law applicable to the present action emerges from the Civil Code of Puerto Rico through its Articles 1802, 1803 (31 L.P.R.A. § 5141 § 5142) and the interpretative jurisprudence which has emanated from the same.

Article 1802 of the Civil Code states:

“A person who by an act or omission causes damage to another through fault or negligence shall be obliged to repair the damage so done. Concurrent imprudence of the party aggrieved does not exempt from liability, but entails a reduction of the indemnity.”

Article 1803 of the Civil Code states:

“The obligation imposed by the preceding Section is demandable, not only for personal acts or omissions, but also for those of the persons for whom they should be responsible ... Owners or directors of an establishment or enterprise are likewise liable for any damages caused by their employees in the service of the branches in which the latter are employed or on account of their duties.”

In Puerto Rico, the general rule is that when an employee travels between his home and the place of employment and an accident occurs, the employer is not liable. Figueroa v. Industrial Commission, 72 PRR 472 (1951); Atiles v. Industrial Commission, 72 PRR 390 (1951); Rios v. Industrial Commission, 66 PRR 385 (1946).

Moreover, in Puerto Rico the fundamental criterion to be considered in order to rule upon the liability of an employer is whether the acts of an employee fall within the scope of his employment in the sense that his acts furthered a desire to serve and benefit the employer’s interest and as a result of which the employer receives an economic benefit. Llorens v. Lozada, 73 PRR 260 (1952); Martinez v. Comunidad, 90 PRR 451 (1964).

The Supreme Court of Puerto Rico has clearly established that:

“The difficulty in applying the exception to the general rule in Puerto Rico is that we would be extending the limits of § 1803, which only renders liable the owner of an enterprise for the negligent acts of his employee ‘on account of his duties’ to those personal acts of the employee ... as if said personal acts formed part of the duties which the employee has to discharge in the course of his employment.” Rivera v. Maldonado, 72 PRR 448 at 455-56 (1951).

It is evident that the Supreme Court of Puerto Rico intends § 1803 to be strictly construed and that the scope of the master’s liability must not be increased through judicial interpretation. As to this issue, the Court has also stated:

“We must not ... by judicial interpretation enlarge the scope of the master’s liability beyond the provisions of § 1803, supra. Even in common law jurisdictions the tendency is to limit the liability of the owner of the vehicle in these cases.” Rivera, supra, citations omitted.

The judicial trends of the Supreme Court of Puerto Rico in cases pertaining to the scope of employment issue were adopted by this Court and affirmed by the First Circuit in the case of Rodriguez v. United States, 328 F.Supp. 1389, aff’d. 455 F.2d 940. In Rodriguez, supra, like in the case at bar, the action was predicated under the Federal Tort Claims Act.

In the Rodriguez case, this Court stated that, in order to impose liability under the respondeat superior doctrine applicable in Puerto Rico, the following elements are required:

a) Desire to serve, benefit or further his employer’s business or interest.

b) That the act performed is reasonably related to the scope of the employment.

c) That the agent has not been prompted by purely personal motives.

In the case before us, the parties agree on several uncontroverted facts. It is undisputed that on the date of the accident, Dr. Cannon had enjoyed several hours of annual leave and that at the time of the accident he was traveling from his home to his office located at the Federal Office Building in Hato Rey, Puerto Rico. The parties stipulated that Dr. Cannon was allowed to use the government car permanently until new renewal as he had to go to visist farms outside of the Metropolitan Area and that consequently, he was allowed to take the car home every night and from there to go to the places of inspection or to go to his office at Hato Rey.

We must conclude that the acts of Dr. Cannon were not performed in the course of his duties as a federal employee. At the time in which the accident occurred, the use of the government’s vehicle served no purpose of the employer; the act was not reasonably related to the scope of Dr. Cannon’s employment and the motives of the driver were purely personal. Therefore, we cannot hold the United States liable for the acts of Dr. Lammar E. Cannon because the same were not performed within the scope of his office or employment according to the case law of the Supreme Court of the Commonwealth of Puerto Rico as adopted by this Court in the case of Rodriguez v. United States, supra.

On the day of the accident, Dr. Cannon had not been in the “field” performing official duties upon termination of which he returned to his office. To the contrary, he had been performing purely personal business upon conclusion of which he directed himself to his office in order to commence his official duties. This is not a case where an employee deviates from his normal duties to perform personal errands and then returns to the performance of his duties. The factual situation is clear in the sense that it overwhelmingly indicates that the driver of the government vehicle was involved in exclusive personal matters when the accident occurred. Plaintiff’s cause of action against the United States is barred by the Doctrine of Sovereign Immunity, as the provisions of the Federal Tort Claims Act supra are inapplicable to acts of federal employees performed outside the scope of their federal employment. Said requirement must be strictly construed. United States v. Sherwood, supra; Minnesota v. United States, supra.

Accordingly, defendant’s Motion to Dismiss and/or for Sumary Judgment is hereby GRANTED.

The Clerk shall enter Judgment accordingly.

IT IS SO ORDERED.


author: ROVNER, District Judge.

text:
    Eddie WARD, Plaintiff, v. Margaret HECKLER, Defendant.
    No. 83 C 7427.
    United States District Court, N.D. Illinois, E.D.
    Sept. 3, 1985.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

This is an action pursuant to 42 U.S.C. § 405(a) for judicial review of a final decision of the Secretary of Health and Human Services (“the Secretary”) denying the plaintiff’s applications for the establishment of a period of disability, disability insurance benefits and supplemental security income (“SSI”) under the Social Security Act, 42 U.S.C. §§ 416(i), 423, and 1381, et seq. Presently pending before this Court is the statement of exceptions of plaintiff Eddie Ward to the report and recommendations of Magistrate James Balog entered on December 12, 1984. Magistrate Balog, in considering the parties’ cross-motions for summary judgment, recommended that the plaintiff’s motion for summary judgment be denied and that the decision of the Secretary be affirmed.

The Court has conducted a de novo review of the entire administrative record before Administrative Law Judge Larry M. Miller (“AU”) including the transcript of the oral hearing, all of the exhibits and medical evidence, the decisions of the AU and of the Appeals Council, and the pleadings and briefs filed by both parties. For the reasons stated herein, the Court is satisfied that plaintiff’s statement of exceptions to the Magistrate’s Report and Recommendation is well-taken. Accordingly, plaintiff’s motion for summary judgment is granted and the Secretary’s motion is denied.

Summary Of Proceedings

On June 23, 1981, plaintiff applied for disability insurance benefits and SSI, alleging that he became disabled and unable to work as of October 17, 1979. His applications were denied initially and upon reconsideration. On February 17, 1982, plaintiff requested a hearing before an AU which was held on August 11, 1982. The AU found on August 25,1982 that plaintiff was disabled as of November 6, 1981 and thus entitled to a period of disability, disability insurance benefits, and SSL Plaintiff disagreed with the AU’s decision as to the onset date of his disability and thus requested the Office of Hearings and Appeals to review the issue of onset date.

On August 24, 1983, the Appeals Council decided that the AU’s findings were not supported by substantial evidence and reversed his decision, finding plaintiff not disabled. This decision became the final decision of the Secretary. Plaintiff then filed this action for judicial review, and the case was referred to Magistrate James T. Balog for a report and recommendation on plaintiff’s and defendant’s cross-motions for summary judgment.

The Magistrate filed his Report and Recommendation on December 12, 1984. He recommended that the government’s motion for summary judgment be granted and the decision of the Secretary, denying plaintiff’s applications for disability and SSI, be affirmed.

Facts

Plaintiff was born in Mississippi on April 19, 1942. He did not complete the fourth grade and asserts that he is illiterate. Plaintiffs vocationally relevant past work experience include being a janitor, a machine helper, a meat inspector, a sorter, and a spray paint helper. These past jobs were exertionally light in nature.

Plaintiff has suffered from polio affecting his right leg and hip since he was six years old. He had corrective surgery on his hip three times. Nevertheless, he refused an artificial hip replacement for fear the operation would render him unable to walk at all. Plaintiff testified that his hip and legs have been in constant pain all his life, that his pain has “[gotten] worse,” and that it continues to “get worse.” He can sit for no more than two hours at a time, after which he must rise to loosen his leg to relieve the pain. He also takes medication to relieve the pain, after which he must lay down. In addition to these problems, plaintiff lost the sight of his left eye when he was fourteen. Plaintiff also suffers from arthritis in the left shoulder and has complained of bad chest pains.

In June of 1981, plaintiff was hospitalized for a dislocation of the right hip. X-rays of his right hip revealed a marked deformity of the right hemi-pelvis, a dislocation of the right hip with pseudo-acetabulum formation, severe degenerative arthrosis of the head and neck, a protrusion of the right hemi-pelvis, moderate deformity of the iliac wing with sclerosis near the sacroiliac joint, and scoliosis and degenerative arthrosis of the lumbar spine.

On November 6, 1981 plaintiff was given a consultative examination. X-rays of the right hip showed severe osteoarthritis of the right hip with marked narrowing and erosion of the acetabular joint. Also shown was severe sclerosis at the superior portion of the acetabular articulating surface as well as moderate ossified formation of the superior margin. The examination further revealed a shorter right leg length as compared to the left leg, a limitation of range of motion of the right hip, and a limitation of full extension of the right knee.

Plaintiff lived by himself for the eight months preceding the ALJ’s hearing. Pri- or to that time, he lived with his niece for two years, and for the prior six years, he also lived by himself. Plaintiff testified that he cleans, sweeps, and mops his two and one-half room apartment, goes to the laundromat, and shops once a month. Plaintiff has used a cane most of his life.

Discussion

A review of the factual determinations of the Secretary is limited to a determination of whether those findings are supported by substantial evidence or are based on legal error. Aubeuf v. Schwerker, 649 F.2d 107, 112 (2d Cir.1981); Marcus v. Califano, 615 F.2d 23 (2d Cir.1979). Substantial evidence is defined as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971). “A court should consider the following as an aid in such an evaluation: (1) the clinical findings of treating and examining physicians; (2) the diagnoses of these physicians; (3) the subjective evidence of pain and disability as testified by the plaintiff and as observed by others; and (4) the [plaintiff’s] educational background, work history, and present age.” Whitney v. Schweiker, 695 F.2d 784 (7th Cir.1982).

Where, as here, the Appeals Council has reversed the decision of the AU granting benefits, the Seventh Circuit has recently held that the reviewing court has “an obligation to determine whether the own motion review conducted by the Appeals Council was in fact justified under the standard by which the Council justified it in theory.” Scott v. Heckler, 768 F.2d 172, 178 (7th Cir.1985). Here the Appeals Council decided that the ALJ’s decision was not supported by substantial evidence. Thus, this Court must determine whether the Secretary’s decision to conduct own motion review based on the condition that the ALJ’s award was not supported by substantial evidence was correct.

In this case, the Appeals Council found that the plaintiff’s condition did not meet the Appendix 1 Listing of Impairments § 1.03, despite the fact that the AU found that the November 6, 1981 x-rays of the plaintiffs right hip demonstrated that he did meet the § 1.03 requirements.

Under the Listing of Impairments § 1.03, a severe impairment of the musculo-skeletal system will be found if there is evidence of “[a]rthritis of a major weight-bearing joint (due to any cause) with limitation of motion and enlargement or effusion in the affected joint, as well as a history of joint pain and stiffness. [Also] [w]ith ... gross anatomical deformity such as subluxation, contracture, bony or fibrous ankylosis or instability____” 20 C.F.R. Part 404, Sub-part P, Appendix 1, § 1.03 (1954).

The Appeals Council found plaintiff’s condition did not meet the standards of § 1.03 in that the record did not “establish the existence of significant limitation of motion, joint stiffness, enlargement, effusion or loss of full weight bearing” (R. 10). Plaintiff's contention is that the Appeals Council applied an erroneous standard in that § 1.03 does not require “significant” limitation of motion, a showing of enlargement and effusion, or “loss of full weight bearing.” Plaintiff also contends that the focus of both the Magistrate’s and Appeals Council’s conclusion was on the absence of “enlargement or effusion.” The Magistrate also found that “[w]hile Plaintiff’s condition does meet some aspects of § 1.03, the criteria of enlargement or effusion of the hip, and stiffness, are clearly lacking in the evidence.”

This Court disagrees with the conclusion of both the Magistrate and the Appeals Council that the clinical evidence does not support a finding of enlargement of the hip joint. The November 7, 1981 x-ray report specifically provides:

RIGHT HIP: There is severe osteoarthritis seen at the right hip with marked narrowing and erosions at the acetabular joint. There is severe aclerosis seen at the superior portion of the acetabular articulating surface as well as moderate ossified formation at the superior margin. The femoral head appears markedly deformed and eroded.

(Emphasis added.) If an “ossified formation at the superior margin” does not constitute an enlargement of the hip, the Appeals Council has the obligation to explain to this Court why it does not and to define what is meant by the term “enlargement.” So far as this Court can determine that term is not defined anywhere in the regulations.

Moreover, the Appeals Council stated that the “evidence of record does not establish the existence of ... joint stiffness ... ”, despite the fact that plaintiff testified that he had to “work” his hip to loosen it after sitting. As plaintiff correctly points out, loss of weight bearing is not necessary to meet the § 1.03 listing where, as here, there is a gross anatomical deformity. Finally, neither the Appeals Council nor the Magistrate discuss whether plaintiff’s conditions, in combination, equal or meet any listed impairment.

For the foregoing reasons, this Court holds that the Appeals Council’s decision reversing the AU’s decision that plaintiff did indeed meet the § 1.03 Listing of Impairments was not justified under the substantial evidence standard by which the Council justified its review. It was therefore error for the Appeals Council to review the ALJ’s decision pursuant to 20 C.F.R. § 404.970(a). Thus, the Secretary’s finding that plaintiff was not “listed” is reversed.

Additional reasons exist as well for reversing the Secretary’s decision. First, this Court is troubled by the Appeals Council’s decision to overturn the AU on the question of pain. The Appeals Council cannot disregard the ALJ’s implied conclusion that plaintiff’s testimony on the extent of his pain was credible because the Appeals Council did not have the opportunity to see and hear him personally as did the ALJ. Bohr v. Schweiker, 565 F.Supp. 610 (E.D.Pa.1983). Subjective testimony of pain can support a claim of pain even when it is not accompanied by objective clinical evidence. Aubeuf v. Schweiker, 649 F.2d 107 (2d Cir.1981); Smith v. Califano, 637 F.2d 968 (3d Cir.1981). Especially where, as here, ample medical evidence supports the existence of pain, the Appeals Council may not discredit testimony of pain to the extent it is not supported by medical evidence without explaining why it is doing so.

Second, this Court agrees that the Appeals Council erred in failing to consider the combined effects of plaintiffs impairments. Johnson v. Heckler, 593 F.Supp. 375 (N.D.Ill.1984), aff'd, 769 F.2d 1202 (7th Cir.1985).

Finally, this Court finds that the Appeals Council’s finding that plaintiff is capable of performing sedentary work is not supported by substantial evidence. The Appeals Council erred in rejecting, again without explanation, the adverse vocational implications raised by the plaintiff’s several non-exertional impairments — the loss of one eye, his chest pain, and the pain from his arthritis. The rationale by the Appeals Council for doing so, namely that each impairment individually was not severe, contravenes the requirement of Johnson v. Heckler, supra, that the combined effect of each impairment must be considered. Furthermore, the application of the “grid” to deny the claim in light of the non-exertional impairments was error. Smith v. Schweiker, 735 F.2d 267 (7th Cir.1984); 20 C.F.R. Part 404, Subpart P, Appendix 2, § 200.00(e)(2).

Thus, this Court reverses the decision of the Secretary and of the Appeals Council and grants plaintiff’s request for disability benefits. In doing so, this Court essentially affirms the decision of the ALJ. Moreover, the Court also finds that the ALJ’s decision that the onset date of plaintiff’s disability was November 6, 1981, the date of the consulting x-ray which provides the principal medical evidence of his disability, is supported by substantial evidence. Although it is true that a medical diagnosis can be made several years after the actual onset of an impairment, Stark v. Weinberger, 497 F.2d 1092 (7th Cir.1974), the plaintiff must present more evidence of actual disability than the date he stopped working full time to overturn the ALJ’s finding in this regard. Plaintiff has not met his burden on the onset date issue.

Conclusion

For the reasons stated above, the Court declines to accept the Magistrate’s Report and Recommendation. The plaintiff’s motion for summary judgment is granted except to the extent it seeks an earlier onset date for disability benefits, and the Secretary’s motion for summary judgment is denied. The Secretary is ordered to grant plaintiff disability benefits from November 6, 1981.

      . The Appeals Council also found that plaintiffs visual impairment was not severe, and that his "subjective complaints of pain [are] credible only to the extent to which they are supported by the objective medical evidence.” In addition, the Appeals Council found that plaintiff had the residual functional capacity to perform sedentary work and that his non-exertional impairments did not significantly affect his residual functional capacity.