United States v. Franklin Studivant

BIGGS, Circuit Judge

(dissenting).

1.

This Court held in United States v. Moore, 469 F.2d 788 (1972), that the Federal Medical Care Recovery Act (FMCRA), 42 U.S.C. §§ 2651-2653, created an independent right of action in the United States, not subject to a Maine state barrier, i. e., a right of action unimpaired by the vagaries of Maine state family immunity laws.1 Relying on *677United States v. Standard Oil Co., 332 U.S. 301, 305-06, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947), this Court observed: “The Act is a federal law which creates an independent substantive federal right, enacted by Congress pursuant to its constitutional powers in matters of military-affairs and federal fiscal policy.”2 (Emphasis added). 469 F.2d at 793. This is plainly a finding that Congress was exercising its plenary constitutional powers in enacting the FMCRA. See the heading “3.” in this opinion, infra.

The majority, assuming without deciding the United States to be a “qualified person” within the meaning of the New Jersey Act, N.J.S. § 39:6-65, indicated there would be no question of the existence of a right of recovery in the United States if the alleged defense of condition precedent was not deemed to be available. It is strange indeed that, in the opinion of the majority, periods of time, statutes of limitations, cannot bar recovery by the United States under the FMCRA, whereas, in the opinion of the majority conditions precedent requiring suits to be commenced by .particular points in time can and will do so. If the statute indeed creates an independent federal right of action, recovery can be barred only by a federal statute or federal decisional law, neither presently visible nor available.

2.

In the instant case the majority does not decide the issue of whether the United States is a “qualified person” within the meaning of the New Jersey Act, N.J.S. § 39:6-65. I entertain no doubt, however, in view of the decided cases, that the learned District Judge was correct in finding that the United States was a qualified person, for, as he points out in his opinion:3 “The United States Government has often been characterized as simultaneously corporate and politic in nature. United States v. Whitcomb [314 F.2d 415, 417 (4th Cir. 1963)]; Helvering v. Stockholms etc. Bank, 293 U.S. 84, 91-93 [55 S.Ct. 50, 79 L.Ed. 211] (1934); Ohio v. Helvering, 292 U.S. 360, 370 [54 S.Ct. 725, 78 L.Ed. 1307] (1934); Stanley v. Schwalby, 147 U.S. 508, 517 [13 S.Ct. 418, 37 L.Ed. 259] (1893). Thus in the instant case, I am satisfied that the United States may properly be classified as a ‘corporate person’ within the meaning of N.J.S.A. 39:6-62 without offending in any way the legislative intent which inspired the passage of the Unsatisfied Claim and Judgment Fund Act. That statute provides victims of automobile accidents with a financially responsible source from which to seek damages. McFarland v. Motor Club of Am. Ins. Co., [120 N.J.Super. 554, 295 A.2d 375 (1972)]. In the instant case, it is the federal public treasury which is the victim of the Studivants’ inability or unwillingness to respond in damages.”

3.

The majority opinion completely overlooks the large constitutional 'issue presented. The majority’s conclusion seems to fly in the very face of the power conferred upon the United States by the Constitution and seemingly obliterates that power. I would agree that the United States could limit its rights under the FMCRA in any way it saw fit but an examination of the legislative history of the Act will demonstrate that it was the intention of some proponents of the Act, as originally proposed, that the United States should have no independent right of action but should be limited to a position of subrogation to the *678claim of the individual who had incurred damage. See Moore, 469 F.2d at 800, n. 10.4 It will be observed that the idea that such a limited position for the United States was abandoned by Congress and the Sovereign was given, as we have said, an independent right of action. The power of the fisc is lodged in the Congress. In Clearfield Trust Co. v. United States 318 U.S. 363, 366, 63 S.Ct. 573, 574, 87 L.Ed. 838 (1943), it is stated: “We agree with the Circuit Court of Appeals that the rule of Erie R. Co. v. Tompkins, 304 U.S. 64 [58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487], does not apply to this action. The rights and duties of the United States on commercial paper which it issues are governed by federal rather than local law. When the United States disburses its funds or pays its debts, it is exercising a constitutional function or power. This check was issued for services performed under the Federal Emergency Relief Act of 1935, 49 Stat. 115. The authority to issue the check had its origin in the Constitution and the statutes of the United States and was in no way dependent on the laws of Pennsylvania or of any other state.” See and compare, Board of Comm’rs v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313 (1939). See in particular Royal Indemnity Co. v. United States, 313 U.S. 289, 294, 61 S.Ct. 995, 997, 85 L.Ed. 1361 (1941): “Power to release or otherwise dispose of the rights and property of the United States is lodged in the Congress by the Constitution. Art. IV, § 3, Cl. 2.”

An examination of Mr. Justice Rutledge’s opinion in United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947), will disclose that all of the then Justices of the Supreme Court agreed that Congress could pass such an Act as the FMCRA. Mr. Justice Rutledge stated at 314-317, 67 S.Ct. 1604, that it was for the Congress not the judiciary to make appropriate new laws concerning the right of the Government to recover for the loss of a soldier’s services. I point out that there is no Eleventh Amendment bar to suits brought by the United States pursuant to its plenary power against a State or a department of a State. We so held in Dunlop v. New Jersey, 522 F.2d 504 (3 Cir. 1975). In Dunlop, we reiterated what the Supreme Court emphasized in Employees v. Missouri Public Health Dep’t, 411 U.S. 279, 284-85, 93 S.Ct. 1614, 36 L.Ed.2d 251 (1973), that “ ‘. . when Congress does act, it may place new or even enormous fiscal burdens on the States . . .’” (Emphasis added). See also Judge Adams’ illuminating concurring opinion in Dunlop in which he states: “The immunity of the states is not all-encompassing, however. Neither the Eleventh Amendment nor notions of state sovereignty have been held to proscribe suits against a state by the United States or by an official acting on behalf *679of the federal government. Also, the Supreme Court has declared that Congress in the exercise of its interstate commerce power has the constitutional authority to subject the states to suits by their citizens.” (Notes omitted).5

In the case at bar Congress created the FMCRA. The United States had the power to pass that Act even though it imposes a money judgment on the State of New Jersey. New Jersey cannot defeat that imposition. If New Jersey cannot defeat the impact of federal power directly, how can it do so indirectly by attaching a condition precedent? In my opinion it cannot. The majority opinion does not discuss or decide this very important constitutional issue.

4.

The majority attempts to distinguish Moore, but in fact overrules it. We should not do this except by a court en banc. Either Moore went too far,' or the majority in the instant case does not go far enough. This confused situation should be resolved by this Court or by our Appellate Tribunal. The present puzzling condition of the law does little justice to the United States or to the States.

For the reasons stated I must respectfully dissent. , I would reverse the judgment of the district court and permit recovery by the United States.

. The Court stated, 469 F.2d at 792: “The holding that enforcement of the [FMCRA] is subject to the vagaries of state family immunity laws is grievous error, in utter disregard of the Congressional intent in enacting the [FMCRA], Subjection of enforcement of the [FMCRA] to vagaries of state laws would *677make a shambles of the [FMCRA]." (Emphasis supplied).

. In Moore recovery under the Maine law was clearly barred to the United States because of the Maine doctrine of no intrafamilial liability. This Court, in the view of this writer in effect solved the problem by creating a federal common law tort. See dissenting opinion, 469 F.2d at 799.

. Civil Action No. 669-73 in the United States District Court for the District of New Jersey. The District Court opinion is unreported.

. “10. Mr. Bemzweig points out in his cited article, 64 Col.L.Rev. 1257, 1261 n. 23: ‘For example, the Deputy Attorney General [now Mr. Justice Byron R. White] stated in his report: “It was, therefore, considered preferable to bottom the basic theory of this legislation on the ‘subrogation’ concept, one which is universally recognized, understood, and regularly applied by all courts, and which would more closely conform the rights of the United States, and the procedure for their enforcement, to the local law and practice, whatever it might be.” ’

“The Deputy Attorney General also stated in his letter of August 1, 1961 to Mr. Celler, Chairman of the House Judiciary Committee, 1962 U.S.Code Cong, and Adm.News, pp. 2643, 2644, the following: ‘[I]f under local law the injured person would have no claim on account of such damages the United States would also have none; if he would have such a claim, the United States would become entitled to that claim, but to no more.. This provision would therefore make allowance for even the rare situation where, under local law, a person would have no right to recover on account of medical expenses which he had neither paid nor become obligated to pay.’

“See the comments of the Department of Health, Education and Welfare and the Comptroller General. S.Rep.No.1945, 87th Cong., 2d Sess. 10-13, 16-22, U.S.Code Cong, and Admin.News 1962, p. 2643 . ”

. The cases cited in Judge Adams’ footnotes 4 to 8 are equally illuminating. See Edelman v. Jordan, 415 U.S. 651, 671-74, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Employees v. Missouri Public Health Dep’t, 411 U.S. 279, 285-87, 93 S.Ct. 1614, 36 L.Ed.2d 251 (1973); United States v. Mississippi, 380 U.S. 128, 85 S.Ct. 808, 13 L.Ed.2d 717 (1965); Parden v. Terminal Ry. Co., 377 U.S. 184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964); Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890); Brennan v. Iowa, 494 F.2d 100 (8th Cir. 1974), cert. denied, 421 U.S. 1015, 95 S.Ct. 2422, 44 L.Ed.2d 683 (1975); Walling v. Norfolk Southern Ry. Co., 162 F.2d 95 (4th Cir. 1947).