Opinion ID: 488510
Heading Depth: 2
Heading Rank: 2

Heading: GAF and Eagle-Picher

Text: 41 The appeals in GAF, No. 84-5638, and Eagle-Picher, No. 85-5655, reach us, however, in a different posture. The District Court, following the Second Circuit's decision in Keene I, dismissed these cases on the ground that the presentments rendered were inadequate to establish jurisdiction. With due deference to the Second Circuit, we conclude that Keene I interprets the Act's jurisdictional requirements too stringently. In order to establish jurisdiction under the Act, a claimant must provide the agency with notice of a claim, not substantiate it to the agency's satisfaction. In adding the presentment requirement to the Act, Congress sought to facilitate claims settlement. It did not shift ultimate responsibility for the adjudication of federal liability from the courts to the agencies, nor did it provide the agencies with leverage to impede claimant access to the courts. 42
43 The presentment requirement of Section 2675(a) was added to the Federal Tort Claims Act in 1966. 88 Prior to this time, the Act provided for administrative settlement of claims only when valued at $2,500 or less; claimants seeking damages in greater amounts were required to file suit in court. 89 Recognizing that the Act's procedures resulted in the filing of large numbers of suits which might be settled out of court, Congress amended the Act in 1966 to remove statutory impediments to claim settlement, 90 and to impose upon claimants the responsibility of presenting a claim to the agency as a precondition to filing suit. As the House and Senate Reports 91 describe the purpose of the 1966 Amendments, the revised procedure was 44 intended to ease court congestion and avoid unnecessary litigation, while making it possible for the Government to expedite the fair settlement of tort claims asserted against the United States. In accomplishing these purposes, the more expeditious procedures provided by this bill will have the effect of reducing the number of pending claims which may become stale because of the extended time required for their consideration. The committee observes that the improvements contemplated by the bill would not only benefit private litigants, but would also be beneficial to the courts, the agencies, and the Department of Justice itself. 92 45 Congress never defined the presentment requirement it imposed upon claimants as a precondition to filing suit, but a fair understanding of the jurisdictional requirement imposed may be had by examining the statutory scheme Congress adopted and its statement of purposes in amending the Act. As a threshold matter, it should be observed that, in revising the procedure for filing claims, Congress manifested no interest whatsoever in restricting claimants' rights under the Federal Tort Claims Act or in restricting their access to the courts. To the contrary, Congress identified private litigants as the primary beneficiaries of the amendments. 93 The requirement of presentment it imposed on claimants was solely for the purpose of expediting settlement of claims in those instances where settlement was appropriate. The determination of whether settlement or suit was the appropriate course of action in a given instance was one Congress left in the claimants' hands. Section 2675(a) provides that when a claim is denied by an agency, the claimant may elect to sue; similarly, failure of an agency to make final disposition of a claim within six months of filing entitles the claimant any time thereafter to treat the claim as denied and file suit. 94 46 Not only did Congress leave the choice between settlement and suit in the ultimate control of the claimant; it fashioned the presentment process so as not unduly to delay that choice. The agencies were allowed six months, and only six months, to make final disposition of a claim before the option of filing suit returned to the claimant: 47 [I]f the agency fails to act in 6 months, the claimant may at his option elect to regard this inaction as a final denial and proceed to file suit. It is obvious that there would be some difficult tort claims that cannot be processed and evaluated in this 6-month period. The great bulk of them, however, should be ready for decision within this period. In some cases where the agency does not reach a decision in 6 months, the claimant may feel that the agency is seeking to reach a fair decision. Under such circumstances, the claimant might not wish to break off negotiations and file suit. Therefore even though this 6-month period may prove insufficient in some instances, the committee does not believe that this period ought to be enlarged to attempt to insure time for final decision on all claims. 95 48 Congress thus carefully tailored the presentment process so as to suspend the claimant's prerogative to sue under the Act for a period no greater than six months; [i]f a satisfactory arrangement cannot be reached in the matter, the claimant can simply do as he does today--file suit. 96 49 In sum, the 1966 amendments reverse a prior statutory preference in favor of suit, adopting a procedural framework which recognizes settlement and suit as two methods of claims resolution under the Act. It compels claimants to present claims to the agencies for disposition by settlement; but it does not compel claimants to submit to disposition of their claims by settlement. Rather, it unequivocally reserves the claimant's right to seek adjudication of the Government's liability in court if, after six months time, the claimant is dissatisfied with the agencies' disposition of the claim. 97 50 The presentment requirement takes meaning from the procedural framework established by the 1966 amendments. In mandating presentment of a claim, Congress instituted a procedure which might eventuate in settlement. 98 Presentment is mandatory; settlement is merely optional. 99 This distinction is crucial for courts called upon to determine their jurisdiction to hear claims under the Act. The requirement of presentment must not be construed to deprive claimants of the choice of forum for claims resolution carefully preserved by Congress in drafting the 1966 amendments. 100 In practical terms, this means we must distinguish between the presentment filing mandated by Section 2675(a) and the settlement procedures of Section 2672. Once we do so, it is apparent that the presentment requirement imposes on claimants a burden of notice, not substantiation, of claims. To conflate the mandatory presentment requirement of Section 2675(a) with the settlement procedures of Section 2672, and require claimants to substantiate claims for settlement purposes as a prerequisite to filing suit, is to compel compliance with settlement procedures contrary to congressional intent. 101 51 The distinction we draw between notice of claims required for purposes of presentment and the type of substantiation of claims which might be required for settlement purposes finds ample support in the committee reports, where Congress repeatedly characterized presentment as a simple requirement of notice. The presentment requirement, it observed, was one having precedent in numerous municipal tort claims statutes requiring that cities be given notice of an accident within a fixed time. 102 As the report observes the purpose of this notice [is] 'to protect the municipality from the expense of needless litigation, give it an opportunity for investigation, and allow it to adjust differences and settle claims without suit.'  103 In illustration, the report cites a section of the District of Columbia Code which requires claimants, as a condition to suit, to give notice by present[ing] ... in writing a claim for money damages. 104 Not only did Congress repeatedly characterize presentment as a requirement of notice, but it clearly contemplated that the filing of a presentment would initiate a settlement procedure in which the agencies were to investigate claims. 105 In short, Congress did not impose on claimants the burden of substantiating their claims as part of the presentment process, it made a statutory precondition to filing suit. 52 Thus we hold, with the Ninth Circuit and the majority of appellate courts to have considered the question, that Section 2675(a) requires a claimant to file (1) a written statement sufficiently describing the injury to enable the agency to begin its own investigation, and (2) a sum-certain damages claim. 106 Notice of an injury will enable the agency to investigate and ascertain the strength of a claim; the sum-certain statement of damages will enable it to determine whether settlement or negotiations to that end are desirable. A presentment of this character provides the agency all it needs, and all to which it is statutorily entitled, to make final disposition of the claim in accordance with Section 2675(a). Claimants who discharge this obligation of notice have satisfied the jurisdictional requirements of the Act, and, with the running of the six-month period Congress has provided the agencies to make final disposition of claims presented, are entitled to file suit. 53 The Department of Justice has promulgated regulations governing the presentment process 107 which it contends govern the sufficiency of notice for jurisdictional purposes. 108 Some circuits have sustained the Department in this regard. 109 Along with the Fifth, Sixth and Ninth Circuits, we hold that Congress has not delegated to the agencies the power to determine, by regulation, the jurisdiction of Article III courts under the Act. 110 The sufficiency of presentments for jurisdictional purposes remains a matter for courts to determine in light of the statutory framework. We do hold, however, that claimants providing the agencies notice of a claim need provide no more information than the regulations specify for the initial presentment of a claim: an executed Standard Form 95 or other written notification of an incident, accompanied by a claim for money damages in a sum certain.... 111 54
55 In assessing the adequacy of the presentments made by GAF and Eagle-Picher, the District Court identified the correct legal standard to apply, reciting the two-pronged requirement of minimal notice we have identified above. 112 In neither case did the court view the sum-certain requirement as posing a problem. 113 Rather, in each instance the District Court dismissed the cases for lack of jurisdiction on the ground that the claimants had failed to provide sufficient information regarding the claims presented. 114 Those dismissals reflect a misapplication of the sufficient-notice standard, which in turn rests on a misunderstanding of the role of presentment within the statutory scheme. 56 The District Court in both cases placed special emphasis on the fact that the companies presented the Government with a claim seeking indemnification for a host of underlying claims. 115 In its view, the character of the claim presented was distinctive, requiring a special standard of review; common sense dictates that the amount of information more than sufficient in a simple case may be patently insufficient in a more complex case. 116 For guidance, the court turned to the Second Circuit's opinion in Keene I as pertinent appellate authority on standards of notice for presentment of claims for indemnification involving multiple underlying claims; adopting Keene I 's approach, it demanded extensive documentation of the underlying claims--both as regards their factual predicates and the theory of liability upon which each rested. In both instances, the court found that the claimants had failed to particularize the theories of liability on which recovery for each of the underlying claims rested. 117 And even where the court found the factual information sufficient as a general matter, it rejected the factual sufficiency of the presentment as a whole for gaps or insufficiently particularized responses on some of the descriptive attachments provided by the companies for each of the underlying claims. 118 57 In our view, the character of the claims here at issue does not warrant a distinctive standard for evaluating the sufficiency of the presentments tendered. Section 2675(a) remains, without regard to the character of the claim presented, a requirement of notice. By contrast, we think the District Court viewed the complexity of the claims as warranting a more stringent standard of review. The court imposed upon the claimant, not simply the burden of notifying the Government of its claims, but of substantiating them; [i]t is not enough for Eagle-Picher to proffer individual cover sheets with spaces for particular information if the information contained on them is not provided or does not measure up to what is necessary for the Government to investigate or evaluate the claim. 119 58 As these remarks suggest, the court viewed the burden on the claimant as one of proof as much as notice. It judged the presentments tendered factually insufficient, not because it deemed the type of information provided inadequate as a general matter, but because it deemed it insufficient in particular instances. A similar understanding informs its demand that the claimants specify particular theories of liability for each of the underlying claims for which indemnification was sought. Following the Second Circuit, the District Court construed the presentment requirement as imposing upon the claimants the burden of demonstrating the merits of their claims at the agency level as a jurisdictional prerequisite to filing suit--this despite the fact that the Standard Form 95 the Government would have claimants use for presentation of claims requests no such argumentation. 120 In short, despite its nominal recitation of the correct standard of review, the District Court assessed the presentments here at issue in accordance with a very different and fundamentally erroneous understanding of the jurisdictional requirements of the Act. 59 In our view, GAF and Eagle-Picher have presented the Government with notice of their claims for contribution or indemnification that is wholly sufficient to meet the jurisdictional requirements of the Act. Each has presented the Government with a sum-certain claim for damages--disaggregated to reflect each of the underlying claims they have satisfied by settlement or judgment, and the defense costs associated with them. 121 They have organized the information presented in accordance with the Government's Standard Form 95, supplying the types of information there requested by means of copious attachments which characterize individually and collectively the underlying claims they have satisfied. 122 They have further identified the acts and omissions of the Government that in their view justifies contribution or indemnification for the liabilities they have incurred. 123 60 The District Court's objections notwithstanding, we believe GAF and Eagle-Picher have supplied the Government with notice sufficient for it to undertake an investigation of their claims and evaluate its potential liabilities. Most of the underlying claims for which GAF and Eagle-Picher seek contribution or indemnification are abundantly documented. The information missing on some of the attachments will not impede the Government from investigating and evaluating the acts and omissions on which the claims for contribution or indemnification are predicated. Rather, missing information on the attachments, linking injuries claimants have compensated by settlement or judgment to work performed by the claimants for the Government in accordance with its asbestos specifications, would become relevant only as a matter of proof; if the Government chose to settle or were adjudicated liable for its role in requiring asbestos in its construction contracts, the extent of its liabilities would turn on the claimants' success in attributing each of the underlying settlements or judgments to the Government acts or omissions alleged. Additional documentation might thus appropriately be demanded of claimants in the course of ensuing settlement negotiations or a trial on the merits, and at that time, they might similarly be expected to specify theories of governmental liability for each of the underlying claims. But, for purposes of Section 2675(a)'s notice requirement, the information provided by their presentments is wholly sufficient to apprise the Government of the factual predicates of their claims for contribution or indemnification: the acts and omissions which in their view make the Government liable for the claims they have satisfied, as well as considerable factual and legal information about the classes of underlying claims for which contribution or indemnification is sought. 61 Ironically, the Government's jurisdictional objections in these cases attest most pointedly to the sufficiency of notice provided by the challenged presentments. The Government evidently would prefer to engage appellants in evidentiary battles on jurisdictional grounds rather than to defend against appellants' claims on the merits. But Section 2675(a) entitles the Government only to notice of a claim for investigative purposes, not to proof of it. It does not empower the Government to keep these claimants out of court for more than the six-month period statutorily conferred on it to investigate and negotiate claims for settlement, and it surely does not establish the Department of Justice as the exclusive, or even primary, arbiter of the Government's liability under the Federal Tort Claims Act. 124 62 We recognize that the claims for indemnification here at issue rest on complex legal and factual predicates, and in this light understand the District Court's reservations concerning the adequacy of the presentment made. It is evident that the claims here at issue do not fit easily into the mold of tort claims involving, for example, an automobile collision or a simple workplace injury. But this does not render the claimants any less entitled to an opportunity to raise them under the Federal Tort Claims Act. The claimants have provided the Government with notice sufficient to entitle them to a trial on the merits, and it is at that juncture, rather than on jurisdictional grounds, that the task of substantiating these claims in greater detail is appropriately imposed upon them. 63 In adding the presentment requirement to the Federal Tort Claims Act, Congress explicitly recognized that there would be complex tort claims not susceptible to settlement within the six-month framework it adopted, observing that there would be some difficult tort claims that cannot be processed and evaluated in this 6-month period. 125 It left to the claimant's judgment in such cases the decision whether additional time in settlement negotiations with the Government would be fruitfully expended. 126 Where, as here, the claimants, having presented their claims to numerous agencies in accordance with the requirements of Section 2675(a), determine that a judicial forum is the preferred forum for an adjudication of their claims, there is nothing in the Federal Tort Claims Act that qualifies or abrogates their right to insist upon it. Congress understood that the presentment requirement and settlement process it added to the Act would, in some instances, do little to alter the adjudication of difficult tort claims such as these; and, where the parties stand as divided as those before us, nor do we think it inexorably must. 127 The jurisdiction of the District Court to hear the cases having been established, it should proceed to trials on the merits.