Court Opinion

ID: 8872600
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:35:27.776969+00
Date Added: 2024-06-11T17:06:13.709062
License: Public Domain

J. SPENCER BELL, Circuit Judge
(dissenting).
I cannot agree with the majority because I do not construe the Suits in Admiralty Act as barring recovery in this case against Marine Transport Lines, Inc. [hereinafter Marine]. Certainly, I cannot agree with the assertion of the district court that the exclusivity provisions of that Act may, at the option of the Government, be made applicable when the total claims exceed the amount of the insurance coverage. This would place an intolerable burden upon claimants who would have no way of ascertaining either from public statutes or regulations who is a proper party defendant before suit is brought.1 Furthermore, the majority consoles the claimants in the instant case with the reminder that the United States is a solvent respondent, but it ignores the fact that they are being denied some of the benefits of a Jones Act suit, including the invaluable right to a jury trial.
46 U.S.C.A. § 781 provides that a libel in personam may be brought against the United States in cases involving public vessels, and 46 U.S.C.A. § 782 incorporates in the Public Vessels Act the provisions of the Suits in Admiralty Act. 46 U.S.C.A. § 742 makes a libel in personam against the United States available in any case in which a proceeding in admiralty could have been maintained against a privately owned vessel had it been involved. 46 U.S.C.A. § 741 provides, however, that no public vessel or government cargo may be seized or attached. 46 U.S.C.A. § 745 places a two year statute of limitations upon a libel in personam against the United States and further reads:
“Provided, That where a remedy is provided by this chapter it shall hereafter be exclusive of any other action by reason of the same subject matter against the agent or employee of the United States * * * whose act or omission gave rise to the claim * * -x-»
It is my understanding, from these statutes, that a libel in personam may be brought against the United States where a public vessel is involved and that if the injury is caused by an agent or employee of the United States,, the remedy against the United States is exclusive, i.e., the agent or employee may not be sued. I cannot read these statutes as saying that a suit may not be brought against an independent contractor engaged in business with the United States, even if he is using a public vessel and his business involves the public defense. I reach this conclusion not only from the eases construing the Act and its legislative history 2 but also from the large number of cases dealing with the same problem in other fields of military and naval defense procurement.
*456In 1961, when the contract involved in the instant litigation was entered into, the parties thereto were well aware of the Supreme Court’s decision in 1949 in the Cosmopolitan case.3 They knew, as a result of that decision, that they could predetermine by the terms of their contract the respective liabilities of the Government and the operator for negligence resulting in an injury to a seaman aboard a vessel owned but not operated by the Government. They also knew that in 1950 Congress had codified the result of the Cosmopolitan case by enacting the exclusivity provision of the Suits in Admiralty Act which I have heretofore quoted. Furthermore, they were thoroughly familiar with the terms of the old General Agency Agreement and the shipping articles which were construed by the Court in Cosmopolitan. In Cosmopolitan the Court stressed the absence of any demise from the Government. The contract here in article 1(a) states: “The Contractor * * * shall manage and conduct the business regarding the operation of such tankers as may be furnished to it by the Government from time to time * * This is the language of a demise. In Cosmopolitan the language of the old General Agency Agreement contained no limitation as to voyages and cargo; instead straight agency language was used. In this contract article 1(b) states that “the Contractor undertakes to manage and conduct the business of the Government * * * as to such] voyages and cargoes as the Government may from time to time prescribe * * .” This is time charter language. In Cosmopolitan the Court stressed the shipping articles which provided that the seamen were employees of the Government. In this contract it is explicitly provided that the seamen are to be employees of Marine and not of the Government. The parties here were also aware of the line of cases including Hanlon v. Waterman S. S. Co., 265 F.2d 206 (2 Cir.), cert. denied, 361 U.S. 822, 80 S.Ct. 69, 4 L.Ed.2d 67 (1959); Williams v. United States, 228 F.2d 129 (4 Cir. 1955), cert. denied, 351 U.S. 986, 76 S.Ct. 1054, 100 L.Ed. 1499 (1956); and Atlantic Coast Line R.R. Co. v. Agwilines, Inc., 195 F.2d 459 (5 Cir. 1952), holding that where the Suits in Admiralty Act was applicable, suit would have to be brought against the United States alone. In the very teeth of the decisions in Cosmopolitan and these other cases, the Government contracting agency proceeded to draft the contract involved in this case, a document which contains the language of bareboat charter out/time charter in, which carefully avoids the term “agent” or “agency” and substitutes therefor the word “contractor,” and finally which expressly provides that the seamen shall not be employees of the Government.
The parties to the present contract also knew that Congress had given to the Secretary and the Assistant Secretary of the Navy authority in negotiating procurement contracts for goods and services for the national defense to “make any kind of contract that he considers will promote the best interests of the United States,” 4 with certain limita*457tions not pertinent here. See 10 U.S.C.A. § 2306(a). In implementing this authority, certain governmental policies were spelled out and appear in 32 C.F.R. § 1.1402 (1961):
“It is the policy of the Department of Defense * * * to encourage and foster the American merchant marine. Where transportation of supplies by ocean vessels is required: “(a) Private United States vessels shall be employed for the transportation of at least 50 percent of the aggregate gross tonnage per annum of the following categories of supplies * *
Section 1.1401(e) defines private vessels to include “Government-owned vessels under bareboat charter to private operators.”
For the reasons previously set forth and in reliance primarily upon Judge Wright’s analysis, referred to hereinafter, I think the language of this contract expresses the intent of the parties to create the relationship of independent contractor and that it did in fact create such a relationship between Marine and the Government. In Petition of the United States, 155 F.Supp. 714 (D.Del.1957), Judge Caleb M. Wright painstakingly and meticulously analyzed a contract which is conceded by both parties here to be in all relevant particulars the same as the contract in this case. He came to the conclusion that the petitioner in that case, who stood in the shoes of Marine here, was a “charterer” or “owner pro hac vice” under the contract. I can add nothing to the able opinion of Judge Wright except to say that his ruling was affirmed by the Third Circuit, 259 F.2d 608 (1958), in an opinion which quoted the district judge at length and affirmed him in every particular. Judge Wright’s opinion was supported by an able brief filed by the Government which pointed out that
“This new MSTS5 combination bareboat charter-out/time charter-back form of charter agreement * * * makes it plain that the vessel is demised and delivered into Mathiasen’s control to man, victual, command and navigate by its own expense and procurement, although subject to reimbursement and profit for the service of carrying government cargoes.”
The brief concludes:
“These demise charter provisions make it absolutely clear, as Judge Wright held, that Mathiasen was an owner pro hac vice and a ‘charterer’ within 46 U.S.C. 186 and entitled to the benefits of the limitations acts.”
The claimants in that case raised and the court rejected the same arguments which the Government here advances and this court has accepted in support of the opposite position. I find the Government’s former reasoning far more convincing.
I think the Public Vessels Act is applicable and thus no question of the waiver of sovereign immunity is here involved, for a public vessel may not be attached or seized even in a collision case. However, the exclusivity feature of the 1950 amendment is not applicable for the reasons I have outlined above. I would not permit Marine to enjoy the privilege of a private operation, including the fixed fee which this contract so clearly grants it, while denying the concomitant rights to its employees, the claimants in this case.

. In Chowaniec v. United States, 149 F. Supp. 251 (S.D.N.Y. 1956), a seaman brought a proceeding in admiralty against the Government and a Jones Act suit against Marine. Finding no unseaworthiness, the district court dismissed as to the United States but held Marine under the Jones Act for negligence. The court found that Marine operated, managed, and controlled the vessel under a contract with the owner and hence was liable under the Jones Act. In failing to assert the exclusivity provisions of the Suits in Admiralty Act in that case, Marine and the Government took a position inconsistent with the Government’s argument here that this is a jurisdictional matter, i.e., that the Military Sea Transportation Service (MSTS) could not by the terms of this contract take the case out of the exclusivity provisions of the Act.

. In presenting the 1950 amendment to the Suits in Admiralty Act, which added the exclusivity provision in 46 U.S.C.A. § 745, the report by the Senate Committee on the Judiciary contained this language:
“This bill will not in any way change the existing rights of seamen, under either the Jones Act or the general maritime law, to bring suits in admiralty or at law against their private employers who operate, under bare-boat charter or similar arrangements, vessels which are merely owned by the Government.” S.Rep.No.2535, 81st Cong., 2d Sess. (1950), 1951 Am.Mar. Cases 149-150.

. Cosmopolitan Shipping Co. v. McAllister, 337 U.S. 783, 69 S.Ct. 1317, 93 L.Ed. 1692 (1949).

. It has long been the policy of the Government and the Department of Defense to foster and encourage free enterprise and private business in public defense activities. Cf. Powell v. United States Cartridge Co., 339 U.S. 497, 70 S.Ct. 755, 94 L.Ed. 1017 (1950), where the Court held that the employees of a private contractor operating a Government-owned munitions plant under a cost plus a fixed fee contract were not employees of the Government within the meaning of the Fair Labor Standards Act. The Court said there:
“we find in these contracts a reflection of the fundamental policy of the Government to * * * use, as much as possible (in the production of munitions), the experience in mass production and the genius for organization that has made American industry outstanding in the world. The essence of this policy called for private, rather than public, operation of war production plants. * * * In this light, the Government deliberately sought to insure private operation of its new mu*457nitions plants.” 339 U.S. at 506-507, 70 S.Ct. at 760.
See also Anselmo v. Ailes, 235 F.Supp. 203 (E.D.N.Y. 1964), where the court held that United States was not responsible for the alleged wrongful discharge of certain employees at a missile base merely because it had inserted many detailed rights of supervision in the contract to insure that the contract was properly performed and that its money was not wasted.

. Under the regulations it is the function of MSTS, under whose aegis the contract, in this case was made, to coordinate all shipping relating to national defense.