Aaron Schwarder Donna Eubanks Kathleen Schwarder v. United States

WILLIAM A. NORRIS, Circuit Judge:

The United States appeals a judgment for $330,000 in compensatory damages to Aaron Schwarder, Donna Eubanks, and Kathleen Schwarder, (referred to collectively as “the Schwarder children”) for the wrongful death of their father, Harry N. Schwarder. The Government contends that the Schwarder children’s action was barred by the Federal Tort Claims Act, 28 U.S.C. § 2672, because Harry Schwarder and his wife previously entered into an administrative settlement with the Government in which they received $285,000 and agreed to relinquish any future claims arising out of his injury. The Government also contends that the Schwarder children’s award violates California Civil Code § 3333.2, which limits non-economic damage awards in professional negligence actions to $250,000. We affirm.

I

On August 10, 1984, Harry Schwarder sought medical attention at the Loma Linda Veterans Administration Hospital and Clinic (Loma Linda) for a lump on his right knee. As a result of biopsy surgery, physicians at Loma Linda determined that the lump was a malignant tumor which might recur or metastasize. This diagnosis was confirmed by the staff of the Armed Forces Institute of Pathology who recommended wide excision of the area surrounding the tumor. Mr. Schwarder was discharged from Loma Linda on August 21, 1984. Despite the serious nature of his prognosis, he was not informed of the results of his biopsy until more than one year later.

On September 27, 1985, Mr. Schwarder again sought medical attention at Loma Linda because the tumor in his leg had grown back. At that time, he was first advised that he had a cancerous lesion in his leg. Doctors also discovered that the cancer had metastasized to his inguinal lymph nodes and one of his lungs. Mr. Schwarder underwent amputation surgery, chemotherapy, and radiation therapy in an attempt to halt the progress of the cancer. These efforts at treatment were unsuccessful, and he died of cancer on March 28, 1987.

Before his death, Mr. Schwarder, along with his wife, Mariis Schwarder, filed claims for damages against the United States for injuries they had sustained as a result of the failure of the physicians at Loma Linda to diagnose and treat his cancer promptly. After a period of negotiation, they settled these claims for $285,000. As part of this settlement, they executed a Voucher For Payment Under Federal Tort Claims Act. This voucher contained an “Acceptance by Claimant(s)” provision which stated:

I, (We), the claimant(s), do hereby accept the withinstated award, compromise, or settlement as final and conclusive on me (us) and agree that said acceptance constitutes a complete release by me (us) of any claim against the United States and against the employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.

(Emphasis added). With the exception of the underlined phrase, the language in the settlement agreement tracks section 2672 of the FTCA, which provides, in relevant part, that:

The acceptance by the claimant of any such award, compromise, or settlement shall be final and conclusive on the claimant, and shall constitute a complete release of any claim against the United States and against the employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.

*112128 U.S.C. § 2672.1

On November 29, 1988, after Mr. Schwarder’s death, his son, Aaron Schwarder, filed a wrongful death action against the United States pursuant to the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671, et seq. On October 13, 1989, Mr. Schwarder’s two daughters, Donna Eubanks and Kathleen Schwarder, also filed a wrongful death action against the United States pursuant to the FTCA. Both complaints alleged that the negligent medical care administered to Mr. Schwarder by the physicians at Loma Linda was the proximate cause of his death. On March 19, 1990, the district court ordered these actions consolidated for all purposes.

The Government moved for summary judgment, arguing that under a proper interpretation of 28 U.S.C. § 2672, the settlement agreement entered into by Harry and Mariis Schwarder barred any subsequent actions for damages brought by their children. The district court denied the Government’s motion. On November 27,1990, the district court entered a final judgment in favor of the Schwarder children. The district court ruled that the money paid to Harry and Mariis Schwarder as a result of their settlement agreement with the United States could not be considered in the court’s determination of damages due to the Schwarder children under California wrongful death law. Accordingly, the district court awarded Aaron Schwarder $80,-000 for loss of support and $150,000 for non-economic damages including the loss of his father’s comfort, affection, society, protection and advice. Kathleen Eubanks and Donna Schwarder each received an award of $50,000 for non-economic damages.

We review de novo the district court’s ruling that 28 U.S.C. § 2672 does not bar the Schwarder children’s wrongful death action. Earles v. United States, 935 F.2d 1028, 1030 (9th Cir.1991). We also review de novo the district court’s interpretation of California law. In re McLinn, 739 F.2d 1395, 1397 (9th Cir.1984) (en banc).

II

This case began as a wrongful death suit against the United States. Absent a waiver of sovereign immunity, a wrongful death suit against the United States would be barred under the sovereign immunity doctrine. The FTCA does not waive sovereign immunity against all wrongful death claims arising from the negligence of United States government officials. Rather, the FTCA waives sovereign immunity only under circumstances *1122where a private person would be liable to the claimant in accordance with the law of the place where the act or omission occurred. See 28 U.S.C. § 2674. Thus, the FTCA directs us to look to the law of the state in which the government official committed the tort to determine the scope of sovereign immunity. If the law of that state makes private parties liable for wrongful deaths, then the United States is liable for the same.

In this case, the applicable law is California law, which makes a private tort-feasor liable to the children of the deceased for the wrongful death of their parent. See Cal.Code Civ.Proe. § 377. Because California law provides for a wrongful death cause of action against private tort-feasors, the FTCA waives sovereign immunity against the Schwarder children’s wrongful death action against the United States.

The government does not contest any of this. Rather, the government argues that the Schwarder children’s otherwise valid FTCA claim of wrongful death against the United States is barred by the settlement agreement executed between the United States and Mr. & Mrs. Schwarder. The settlement agreement, which we have quoted above, tracks the language in section 2672 of the FTCA.

Without citing any legislative history or relevant case law,2 the government reads section 2672 as standing for the proposition that an FTCA settlement agreement may bar an otherwise valid FTCA claim by someone other than the claimant who executed the settlement. Our review of forty-plus years of FTCA case law has not revealed a single case in which the United States urged this apparently novel interpretation of section 2672.

The government appears to rely primarily on the language of section 2672, which says a settlement agreement shall constitute a release of “any claim ... by reason of the same subject matter.” (Emphasis added). Invoking a plain language theory of statutory construction, the government argues that the phrase “any claim” refers to any claim by reason of the same subject matter regardless of the identity of the claimant. As the government acknowledges, however, “the parameters of the bar created by the ‘by reason of the same subject matter’ language is governed by the act and/or omission of the employee which initially gave rise to the claim.” If we were to adopt the government’s theory, we would have little choice but to conclude that a settlement agreement by one claimant bars any claim arising from the same act and omission of the employee which gave rise to the initial claim. In other words, if a government vehicle were to crash into an automobile with four passengers who sustained personal injuries and one passenger settled an administrative claim with the government, such a reading of section 2672 would preclude the other passengers from filing suit. Similarly, if a mother were to see her child run over by a negligent government driver, the settlement of the child’s action for wrongful injury would destroy an action for emotional distress by the mother. The government *1123readily concedes, however, that such results would be bizarre.

The government distinguishes the present case from those hypothetical cases on the ground that the claim here is derivative of the claim that was settled. The statute, however, says “any claim,” not just “derivative claims.” Regardless of whether we decide to read the term “derivative claim” into the statute, it is crystal clear that the government’s theory finds no support in a plain language theory of statutory construction.

For purposes of this case, we need not consider whether a settlement under section 2672 operates as a bar to derivative claims brought by claimants who are not parties to the settlement agreement. Even if we assume arguendo that derivative claims are barred, the government’s argument that the Schwarder children’s wrongful death claim is barred by their parents’ settlement of their personal injury claim fails. Under applicable California law, the Schwarder children’s wrongful death claim is not a derivative claim, but a separate and independent claim.3

In arguing that we should consider the Schwarder children’s wrongful death claim to be derivative of their parents’ personal injury claim, the government contends that whether a claim is derivative of another claim is a federal question that must be decided without reference to the law of the state in which the release was executed. Because, unlike California, some states consider a wrongful death claim to be derivative of a personal injury claim, the government would have us adopt as federal law the rule that a wrongful death claim is derivative of the decedent’s personal injury claim.

In essence, the government argues that the meaning of a release of liability under section 2672 of the FTC A is a question of federal, rather than state, law. Our interpretation of section 2672 is, of course, initially a matter of federal law. McInnes v. California, 943 F.2d 1088, 1094 (9th Cir.1991). Some provisions of the FTCA, however, incorporate state law. See, e.g., 28 U.S.C. § 2674. We must determine to what extent Congress intended to make the effect of a section 2672 settlement dependent upon state law.

In Montellier v. United States, 315 F.2d 180 (2d Cir.1963), the Second Circuit examined the effect of a pre-injury release not specifically governed by any federal statute. Prior to his injury, the deceased had signed a release agreement in which he agreed to “release ... the Government of the United States and all its officers ... from any and all claims ... on account of [his] death or on account of any injury to [him] or [his] property_” Id. at 184 n. 2. In determining the effect of this release on a wrongful death action brought by his children, the Second Circuit looked to state law. The court reasoned that the release was a circumstance which must be taken into account under section 2674, which makes the United States liable to the extent a private person would be liable “under like circumstances.” Montellier, 315 F.2d at 185. Because the release would not have immunized a private individual *1124from a wrongful death action under the applicable state law, the Second Circuit held that it did not bar such an action against the United States.

Our circuit has adopted a similar view of the effect of a pre-injury release on an FTCA claim. In Air Transport Associates v. United States, 221 F.2d 467 (9th Cir.1955), we said:

The Federal Tort Claims Act specifically adopts the law of the place where an accident occurs as the law in accordance with which liability is to be determined. This adoption of the proper state law applies not only as to the creation of liability but also as to release from liability.

Id. at 471 (emphasis added).

Montellier and Air Transport, however, do not control our decision because the releases in those cases were not obtained pursuant to a specific federal statutory provision. By contrast, Harry and Mariis Schwarder obtained an administrative settlement pursuant to 28 U.S.C. § 2672. That section specifically provides that:

The acceptance by the claimant of any such award, compromise, or settlement shall be final and conclusive on the claimant, and shall constitute a complete release of any claim against the United States ... by reason of the same subject matter.

One of the cardinal rules of statutory construction is that we must, if possible, give effect to all parts of a statute. Fidelity Fed. Sav. & Loan Ass’n v. De la Cuesta, 458 U.S. 141, 163, 102 S.Ct. 3014, 3027, 73 L.Ed.2d 664 (1982); see also United States v. Mehrmanesh, 689 F.2d 822, 829 (9th Cir.1982). As explained in Montel-lier, any agreement between the United States and the injured party would be a relevant circumstance which would bar suit to the extent provided by state law. If the provision quoted above is not to be entirely superfluous, it must be given some additional effect.

We conclude, as a matter of federal law, that an administrative settlement reached pursuant to section 2672 bars further claims by the settling party, without regard to the effect it would have as a matter of state law. Such a construction gives meaning to all of section 2672, and effectuates the apparent Congressional intent to provide a uniform procedure, independent of underlying state law, by which the government can settle tort claims against it.

However, we are persuaded that section 2672 does not directly control the effect of a settlement on persons other than the settling party. Because we may not infer a revisionary purpose from unexplained language changes introduced in the 1948 reco-dification of the Judicial Code, Finley, 490 U.S. at 554, 109 S.Ct. at 2009, we read section 2672 to effect a release only “by the claimant” of any claims he or she may have under state law. See supra note 1. With respect to the claims of other persons, a section 2672 settlement has the same effect as any other release: it is a relevant circumstance which must be taken into account in determining whether the United States is liable under state law.

We hold, therefore, that state law governs the question of the effect of a section 2672 release on the claims of persons other than the settling claimant. Congress plainly intended to define the contours of a “tort claim” by reference to state law. See 28 U.S.C. § 2674. We think it logically follows that Congress must have necessarily intended to define the relationship between state tort claims by reference to state law. Moreover, if we were to adopt the government’s view that whether one state law claim is derivative of another state law claim is a federal law question, the federal rule of decision would always have to coincide with the law of the state that has the most expansive view of “derivativeness” of claims; otherwise, the United States could find itself liable in states where private individuals are not.4

*1125The government relies on Ramirez v. United States, 567 F.2d 854 (9th Cir.1977) for the proposition that we ought to interpret all provisions of the FTCA, with the sole exception of section 2674, by reference to federal law. The government reads Ramirez too broadly. The sole question in Ramirez was whether questions of interpretation under the exclusion provisions found in section 2680 of the FTCA are controlled by federal law. Id. at 855-56. We held they are. Ramirez, however, did not speak to questions of interpretation under other FTCA provisions. For good reason. If Ramirez had extended its holding to the remaining FTCA provisions, it would have conflicted with the Supreme Court’s decision in Williams v. United States, 350 U.S. 857, 76 S.Ct. 100, 100 L.Ed. 761 (1955) (per curiam). In Williams, our court had interpreted the language “acting in line of duty” in section 2671 of the FTCA5 by reference to federal law. Williams v. United States, 215 F.2d 800, 807-809 (9th Cir.1954). In reversing, the Supreme Court instructed us to interpret the phrase by reference to California law. Williams, 350 U.S. at 857, 76 S.Ct. at 100; see also Williams v. United States, 352 F.2d 477, 479 (5th Cir.1965). In light of the fact that Congress left the question whether a member of the United States military is acting in line of duty to the vagaries of state law, we decline to impute to Congress the intent to have federal law govern the relationship between two state-created tort claims. Thus, far from winning under Ramirez, the government loses under Williams.

Ill

The government also argues that the amount awarded to the Schwarder children for non-economic damages, when combined with the amount awarded to Harry and Mariis Schwarder in their settlement agreement, violates the Medical Injury Compensation Reform Act of 1975 (MI-CRA), Cal.Civ.Code § 3333.2, which limits the amount of damages for non-economic losses in an action based on medical negligence to $250,000. The government contends that the Schwarder children’s award of $250,000 for non-economic damages violated MICRA, because Harry and Mariis Schwarder had already received $285,000 in their administrative settlement for medical negligence.

We reject the government’s argument. California Civil Code § 3333.2 provides, in relevant part, that:

(a) In any action for injury against a health care provider based on professional negligence, the injured plaintiff shall be entitled to recover non-economic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement and other nonpecuniary damage.
(b) In no action shall the amount of damages for non-economic losses exceed two hundred fifty thousand dollars ($250,000).

Cal.Civ.Code § 3333.2(a) & (b) (West 1992). This limitation on noneconomic damages applies to suits against the United States under the FTCA for professional negligence. Taylor v. U.S., 821 F.2d 1428, 1431-32 (9th Cir.1987), cert. denied, 485 U.S. 992, 108 S.Ct. 1300, 99 L.Ed.2d 510 (1988); Hoffman v. United States, 767 F.2d 1431, 1437 (9th Cir.1985).

In an action for wrongful death based on medical negligence, the California courts have held that section 3333.2’s limit of $250,000 refers to the recovery of non-economic damages by all of the plaintiffs in the aggregate, and not to the recovery of each individual plaintiff. Yates v. Pollock, 194 Cal.App.3d 195, 200, 239 Cal.Rptr. 383, 386 (1987). “[W]hile each injured *1126plaintiff is entitled to seek non-economic damages, the maximum recovery permitted in any single medical malpractice action is $250,000, regardless of the number of plaintiffs involved.” Id. (emphasis added). The Yates court explained the reasoning behind this rule as follows:

Since the Legislature was obviously aware that “case precedent has consistently held ‘only one action [can] be brought for the wrongful death of a person thereby preventing multiple actions by individual heirs and the personal representative’ ...” and that “the cause of action for wrongful death has been consistently characterized as ‘a joint one, a single one and an indivisible one’ ...” ... we can but conclude its use of the word “action” in section 3333.2 represents its conscious decision to limit the total recovery for non-economic loss in such suits to $250,000.

Id. at 200-01, 239 Cal.Rptr. at 386 (citations omitted). Thus, under California law the Schwarder children as a group could not receive more than $250,000 in non-economic losses for the wrongful death of their father.

Contrary to the government’s assertion, however, California law does not require that any portion of the $285,000 awarded to Harry and Mariis Schwarder be counted toward the limit on non-economic damages limit on the Schwarder children’s wrongful death action. Atkins v. Strayhorn, 223 Cal.App.3d 1380, 273 Cal.Rptr. 231 (1990), involved an action for medical negligence brought by an injured plaintiff and a suit for loss of consortium by the plaintiff’s wife. The defendant argued that the combined recovery of the husband and the wife was limited by section 3333.2 to $250,000, because both claims arose from “a single injury-causing incident” of professional negligence. Id. at 1394, 273 Cal.Rptr. at 238. The court rejected this argument and held that the husband and wife were each entitled to recover up to $250,000, because the wife’s loss of consortium action was independent of the action of her physically injured spouse. Id. at 1395, 273 Cal.Rptr. at 239. The court distinguished its holding from that in Yates on the ground that “[w]hile a wrongful death action is a joint, single and indivisible one, loss of consortium is a separate and independent claim from a spouse’s claim for personal injury.” Id.

Applying both Yates and Atkins to the instant matter, we hold that the recovery obtained by Harry and Mariis Schwarder for the personal injury suffered by him does not limit the recovery of the Schwarder children in their separate action for wrongful death. Accordingly, we conclude that the Schwarder children had a separate limit of $250,000 which was not exceeded by the district court in its damage award.

AFFIRMED.

. The underlined phrase is consistent, however, with the language in the original version of section 2672 of the FTCA which provided that:

The acceptance by the claimant of any such award, compromise, or settlement shall be final and conclusive on the claimant, and shall constitute a complete release by the claimant of any claim against the United States and against the employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.

Act of August 2, 1946, ch. 753, 60 Stat. 812 et seq. (emphasis added). Thus, the current version of section 2672 is identical to the 1946 version except that the words "by the claimant” were omitted after the 1948 recodification of the Judicial Code. See Act of June 25, 1948, ch. 646, Pub.L. No. 773. As the government concedes, the legislative history surrounding section 2672 is sparse and does not address the purpose, if any, behind this change in the language of the settlement exclusion provision. In the absence of a clear Congressional intent to change the meaning of section 2672, we may not infer a revisionary purpose from a change in the language of the section alone. As the Supreme Court stated in Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989):

Under established canons of statutory construction, "it will not be inferred that Congress, in revising and consolidating the laws, intended to change their effect, unless such intention is clearly expressed.” Concerning the 1948 recodification of the Judicial Code in particular, we have stated that "no changes in law or policy are to be presumed from changes of language in the revision unless an intent to make such changes is clearly expressed.”

Id. at 554, 109 S.Ct. at 2009 (citations omitted); cf. United States v. Wilson, — U.S. -, -, 112 S.Ct. 1351, 1355, 117 L.Ed.2d 593 (1992) ("We candidly acknowledge that we do not know what happened to the reference to the Attorney General during the revision [to the statute].... [B]ecause any other interpretation would require us to stretch the meaning of the words that [the statute] now includes, we think it likely that the former reference to the Attorney General was simply lost in the shuffle.”).

. This is a case of first impression in all circuits. The governments' reliance on cases such as Rodriguez v. Handy, 873 F.2d 814 (5th Cir.1989); Arevalo v. Woods, 811 F.2d 487 (9th Cir.1987) and Serra v. Pichardo, 786 F.2d 237 (6th Cir.), cert. denied, 479 U.S. 826, 107 S.Ct. 103, 93 L.Ed.2d 53 (1986) is misplaced. Serra, Rodriguez and Arevalo all involved further claims by individuals who had previously obtained damages awards in FTCA actions against the United States. Because Serra, Arevalo and Rodriguez are concerned exclusively with claims brought by individuals who have already obtained an award of damages from the United States under the FTCA, their holdings do not apply to the Schwarder children’s wrongful death action.

The government is also wrong in relying on Monaco v. United States, 661 F.2d 129, 134 (9th Cir.1981), cert. denied, 456 U.S. 989, 102 S.Ct. 2269, 73 L.Ed.2d 1284 (1982) and Van Sickel v. United States, 285 F.2d 87, 91 (9th Cir.1960). Monaco and Van Sickel involved claims by the heirs of individuals who were barred from recovering damages against the United States under the doctrine of Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950) (holding that the United States is not liable under the FTCA for injuries to serviceperson where those injuries arise out of or are incident to military service). Those cases held that the Feres doctrine precludes claims by the heirs just as it precludes claims by the servicepersons.

. The government contends that, even if state law governs the scope of section 2672’s exclusion of liability, California law does not maintain that a wrongful death action is separate and independent from the injured party’s claim. We reject the government’s argument that the Schwarder children's wrongful death action is not separate from their parents’ action for personal injury under California law. The children’s wrongful death claim is created by Section 377 of the California Code of Civil Procedure. See Cal.Code Civ.Proc. § 377 (West 1973 & Supp.1992). We have previously held that:

the cause of action granted by Section 377 to the heirs and personal representatives of a decedent is not derivative in character or a continuation or revival of a cause of action existing in the decedent before his death, but is an original and distinct cause of action granted to the heirs and personal representatives of the decedent to recover damages sustained by them by reason of the wrongful death of the decedent.

Van Sickel, 285 F.2d at 90. As an extension of this principle, "California does not permit a decedent to compromise by contract his survivors’ right to wrongful death recovery. Any limitation based on contract with the decedent, therefore, can have no application against survivors under California law." In re Aircrash in Bali, Indonesia on April 22, 1974, 684 F.2d 1301, 1306 (9th Cir.1982) (citations omitted).

. If we were to adopt in any given case, as federal law, the rule that claim X is not derivative of claim Y, then we would expose the government to greater liability than private individuals in those states where state law provides that claim X is derivative of claim Y. Because *1125such a result would be plainly contrary to the mandate of section 2674 of the FTCA which provides that, at a minimum, the government not be exposed to any greater liability than a private individual, we would always have to adopt as federal law the rule that a certain claim is derivative of another claim so long as at least one state has held that that claim is derivative of another claim.

. Section 2671 governs the liability of the United States in the case of a tort committed by a member of the military or naval forces of the United States.