BROWN, Chief Judge:
This interlocutory appeal raises an interesting and novel problem under the Federal Tort Claims Act. The question is whether the Government may invoke a defense available to private employers under the Louisiana Workmen's Compensation Statute despite the fact that the United States, due to its preeminent sovereign immunity, could not be compelled to comply with the obligations of a private employer under the statute. The District Judge held that to permit the Government to raise the defense envisioned by the statute was the equivalent of the Government subjecting itself to suit under a local compensation system — an unauthorized waiver of sovereign immunity not contemplated by Congress. He rejected the defense. Disagreeing with these conclusions, we reverse.
28 U.S.C.A. § 1346.
To bring the problem closer to earth it is one of harmonizing the FTCA and the Louisiana Compensation Act. Under FTCA the tort liability of the Government is extended to tort claims for negligent damage to person or property "under circumstances where the United States, if a private person, would be liable . . . in accordance with the law . . ." of the place of the tort. Tied as it is to liability of a private actor under local law, the case brings in famed § 6 of the Louisiana Compensation Act.
28 U.S.C.A. § 1346 provides:
§ 6 imposes on the party for whom work is being done by a contractor (or subcontractor) the obligation of paying workmen's compensation to an injured employee of such contractor/subcontractor. The key is whether in the work at hand the contractor/subcontractor is doing work ". . . which is a part of [the] trade, business, or occupation" of the party for whom the contracted work is being performed.
La.Rev.Stat. 23:1061 that provides:
But while Louisiana, so its courts have many times said, adopted this device as a means of subverting the payment of compensation through the device of impecunious contractors, its significance here is not in an asserted right by the claimants to recover Louisiana Compensation payments from the Government. Indeed, that is the last thing wished, hoped or prayed for. Rather it is that under Louisiana jurisprudence § 6 in imposing a vicarious liability for compensation payments clothes that party with the status of a "principal" or more descriptively, a "statutory employer," so that it will not constitute a suable "third person" under the provisions of the Act permitting suit by an employer (or his carrier) or an employee where the injury/death has been caused by the negligence of another.
See the oft-cited and many times court-approved comment by Professor Malone
"All the provisions of Section Six make clear the fact that the sole purpose of this section is to prevent the evasion of compensation . . .. As between the principal and the contractor, it is fair that the latter, as the employer of the claimant, should bear the risk of accident. For this reason, the principal who is made liable under Section Six is entitled to indemnity and he can interplead the contractor and demand judgment over against him. The net effect is that the principal merely lends his solvency to the worker's claim, and he can effectively protect himself in advance either by satisfying himself that the contractor is solvent or by insisting that the latter insure against work accidents."
Malone, Principals Liability for Workmen's Compensation to Employers of Contractors, 10 La.L.Rev. 25 (1949).
We struggle with this problem in countless diversity and amphibious — ambiguous maritime situations, generally about whether the operational activity is, or is not, "part of [the] trade, business, or occupation." See one of our leading cases: Arnold v. Shell Oil Co., 5 Cir., 1970, 419 F.2d 43 and others, e. g. Gorsalitz v. Olin Mathieson Chemical Corp., 5 Cir., 1970, 429 F.2d 1033, 1040-1042.
La.Rev.Stat. 23:1101
This immunity to third party suit, presumably the creature of judicial interpretation of § 6 has survived the direct assault of the organized Louisiana plaintiffs bar and stands as a lion in the street unless on minute facts the case is outside the "usual, trade, or business."
The Government brief informs us that 44 states now have statutory employer provisions in their workmen's compensation Statutes (2 Larson's Workmen's Compensation, § 72.31, p. 189 (1970 ed.). Except possibly for Kirk v. United States, D. Idaho, 1954, 124 F. Supp. 233, rev'd, 9 Cir. 1956, 232 F.2d 763, no case out of Louisiana has been cited showing that other jurisdictions read the third party immunity into their statutory employer provision.
Broussard v. Heebe's Bakery, Inc., 1972, 263 La. 561, 268 So.2d 656, 658 and see Tate, J. concurring at 661.
This Court has commented on this problem before. e. g., Huson v. Otis Engineering Corp., 5 Cir., 1970, 430 F.2d 27, (see fn. 9) affirmed in part, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296. See also, Nations v. Morris, 5 Cir., 1973, 483 F.2d 577.
The significance of all of this here is that since the Government neither had nor was subject to an enforceable obligation to procure Louisiana compensation insurance, for it to have the Louisiana judge-made § 6 third party immunity would be, the claimants successfully urged below, to afford it the benefits with none of the burdens. Stated another way, their contention is that the § 6 immunity extends only to principals who are legally required to pay compensation. If that legal obligation is missing, so is § 6 immunity
Certainly nothing in 40 U.S.C.A. § 290 imposes such an obligation:
The District Court agreed with this thesis. But as the claimants could not ever recover if this holding was reversed even if they jumped the § 6 "usual trade business or occupation" hurdle, the District Court certified this appeal, 28 U.S.C.A. § 1252 which we allowed.
The plaintiffs have been very careful to reserve the question of whether the activity that Sperry Rand performs for the Government meets the criteria of "trade, business, or occupation" necessary to qualify the Government as a principal under § 6. Therefore, we assume for the purpose of this appeal that the manufacture of munitions is a traditional government function.
Without intimating pre-judgment, the assumption is probably a safe one since nations make wars and wars mean munitions the supply of which has from year to year and war to war come from Government-operated and cost-plus contractors of Government-owned facilities. See, Powell v. United States Cartridge Co., 1949, 339 U.S. 497 at 499, 70 S.Ct. 755, at 757, 94 L.Ed. 1017 (See especially fn. 2 at 1028).
In the resolution of the basic § 6 problem, the facts can be quickly capsulated. These are eleven FTCA suits by contractor-employees for injuries sustained from the operation of the Louisiana Army Ammunition plant near Minden, Louisiana. The plant is a government-owned facility privately operated by Sperry Rand Corporation pursuant to a contract with the Ammunition Procurement And Supply Agency of the United States Army (No. DA-11-173-AMC-80). Under the contract Sperry Rand hires the employees, prepares and loads the products for shipping, and generally does all jobs necessary to operate the plant. The cost-plus-fixed-fee contract obligates Sperry Rand to maintain workmen's compensation for the plant employees and the premiums for that insurance are reimbursed by the government as a regular contract expense. Such coverage was obtained and in effect at the time of the accident that resulted in these suits.
Ten grew out of two separate violent explosions on loading lines, the eleventh from a fall from a railroad car.
The United States was not, however, included as a named or omnibus insured on the Louisiana workmen's compensation policy.
If we approach this with literalism the Government cannot prevail. This is so because Louisiana cannot impose on it a legal obligation either to procure compensation insurance or to pay compensation benefits. (See note 8 supra). But this is not the history of FTCA or its generous development by the Supreme Court. That Act is given a broad interpretation to effectuate the legislative aim of putting citizen and national sovereign in tort claims suits on a footing of equality as between private parties within that state. Nice pieces of casuistry and hypersensitive legalisms are avoided.
For some of the express Congressional limitations in the FTCA, see Richards v. United States, 1961, 369 U.S. 1. 82 S.Ct. 585. 7 L.Ed.2d 492.
The Act permits claimants to sue only in the federal courts, and not in the state courts which are available in actions against a private individual, § 1346(b); the Act prescribes its own period of limitations which may be shorter or longer than that of the State, § 2401(b); the claimant cannot obtain a trial by jury under the Act, although he could against a private individual, § 2402; the claimant cannot obtain interest prior to judgment in suits under the Act regardless of the state rule governing private individuals, § 2674; the claimant cannot obtain punitive damages under the Act, even though state law may provide for it as against a private defendant, § 2674; the claimant cannot recover any damages against the United States on any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel slander, misrepresentation, deceit, or interference with contract rights, whereas he could recover such damages against a private individual. § 2680(h); the claimant cannot obtain any recovery against the United States on a claim arising in a foreign country, although he could against a private individual § 2680(k); and the Act exempts the Government from liability for claims based on various types of activities, although a private individual would be liable in the same circumstances, § 2680.
Thus, in Indian Towing the Court considered the Government argument that "the language of § 2674 (and the implications of § 2680) imposing liability `in the same manner and to the same extent as a private individual under like circumstances . . .' must be read as excluding liability in the performance of activities which private persons do not perform. Thus, there would be no liability for negligent performance of uniquely government functions." Declaring that "we would be attributing bizarre motives to Congress were we to hold that it was predicating liability on such a completely fortuitous circumstance — the presence of identical private activity . . . [and there] is nothing in the Tort Claims Act which shows that Congress intended to draw distinctions so fine-spun and capricious as to be almost incapable of being held in the mind for adequate formulation." The Court held that the "language of the statute does not support the Government's argument." The Court rejected literalism and read the private person liability of § 1346 (see note 2 supra) as being "designed to . . . compensate the victims of negligence in the conduct of governmental activities in circumstances like unto those in which a private person would be liable . . .."
Indian Towing Co. v. United States, 1955, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48.
From 350 U.S. 61, 68-70, 76 S.Ct. 122, 100 L.Ed. 48.
Next, the Court in Rayonier, limiting sharply some of its pronouncements in the Texas City Disaster Case, held that the Government would be liable under vicarious Washington laws for fire fighting derelictions even though there was not like private activity and all usual activity — that of municipalities — would be subject to no liability.
Rayonier, Inc. v. United States, 1957, 352 U.S. 315, 77 S.Ct. 374, 1 L.Ed.2d 354.
Dalehite v. United States, 1952, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427; see also, Smith v. United States, 5 Cir., 1967. 375 F.2d 243, cert. den., 389 U.S. 841, 88 S.Ct. 76, 19 L.Ed.2d 106.
We have done similarly in Gavagan where, against a similar Governmental assertion that there was no like private activity, we held the Government accountable under FTCA for a land-air-sea rescue search.
United States v. Gavagan. 5 Cir., 1960, 280 F.2d 319.
Of course, we are not dealing here with interpretations on coverage of FTCA. Rather, it is on defenses. But we see no reason why in this liability by local standards criteria a like and sensible approach is not given to local defenses.
This takes us to the Louisiana aim of § 6 to assure compensation benefits to employees of contractors doing work for others. At bottom, claimants argue that the essence of the statute was to insure the employee "two debtors not one." But one thing that is not intended is double payment of compensation, once by the "actual" employer and once by the "statutory" employer. Indeed, while pursuit can in the Louisiana codal language be in solido, which is to say against (i) actual employer, (ii) statutory employer or (iii) both, only a single recovery is permitted.
Jones v. Southern Tupelo Lumber Company, 257 La. 869, 244 So.2d 815 (1971):
"The courts below correctly cast all of the defendants solidarily, for when an employee is entitled to compensation and under R.S. 23:1061 or R.S. 23:1063 has sued the principal or the principal contractor together with the contractor or subcontractor, the liability of such defendants is solidary. * * * Under these statutes the claimant is entitled to proceed against the principal (or principal contractor) or the contractor (or subcontractor) or both as he chooses. The indemnification clauses, however, have the effect of finally imposing the loss of the principal or principal contractor upon the claimant's immediate employer."
Id. 244 So.2d 815.
See also Seabury v. Arkansas Nat. Gas Corp., 14 La.App. 153, 127 So. 24; Calcote v. Century Indem. Co., 93 So.2d 271 [La.App., 3rd Cir., 1957]; Meche v. Farmers Drier Storage, 193 So.2d 807 [La. App., 3rd Cir., 1967].
Of course this objective is accomplished through the unquestioned requirement that Sperry Rand, the contractor, maintain at the Government's expense workmen's compensation. Not only was it done in fact, but presumably it was done in accordance with established policies which have the effect of not only relinquishing any claim to Federal territorial sovereignty over lands of the Federal enclave, but carrying out the substantive policies of § 290 (see note 8 supra) to assure privately-employed workers on Federal projects equal treatment with other industrial laborers in the state. Thus the goals of Louisiana and the United States are mutually met. The workers have the protection in fact, that they would have if, in addition to Sperry Rand's insurer, they would have the direct obligation of the Government. On the other hand, with this assured in fact,fn20 the Government, having seen to it that compensation by the contractor is afforded at the Government's expense, is, as would be a private Louisiana statutory employer, entitled to the § 6 immunity.
See, 41 C.F.R. 1-10. 502-1, which prescribes that compliance with applicable workmen's compensation and occupational disease statutes will be required.
Louisiana compensation benefits have been paid or are payable to each of the eleven claimants (or their successors).
The key finally is the existence of adequate insurance required and paid for by the Government. Whether the result would be the same if the Government contract did not require maintenance of compensation insurance is a matter for another day.
Reversed.