Petition — J. H. Rutter Rex Manufacturing Co. v. United States

—-

t

- 14 Supreme Cour. VU. 5.

FILED

DEC 22 1575

3 ICHAEL RODAK, JR., CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1975

No. %5-RVQ~

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.

Petitioner

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT

Henry J. Read and

Daniel Lund

806 First National Bank

of Commerce Building,

New Orleans, Louisana 70112

Counsel for Petitioner

Of Counsel:

Montgomery, Barnett, Brown & Read

INDEX

ND TE iii ne ccchinrndivennisiivinsehiehablasaialaraiialaitcbeibiosinnt: A

PIII ini ica iesicrsttesiecccusiininainineedsalagaibanennnatey a

Question presented for review ee. 8

Statute involved -............. sonisheasaiamniai cicealeiiagti 3

a ciatelosienieamntennpileniebiamensntes) =a

Summary of reasons of the courts below ___. 7

SID snccsctuceuaisasuiousinaistanieainnaniabainccchenediatimcatenbeincicinton

EAR AEA AEE RTO AN,

Certificate sitios pnt ~ 25

Appendix A., Opinion of the Fifth Circuit Court of

SID -upivssitnindsepheiccaliseinaniialtenpinteintentiiigmmsiibiaainiienesisiater:: TE

Appendix B., Opinion of the United States District

Court for the Eastern District of Louisiana _ 33

Appendix C., Judgment of the District Court __. 38

Appendix D., Judgment of the Fifth Circuit Court of

TO A EE TR

Appendix E., Notice of Denial of Rehearing ..——--—s«— 41

I

TABLE OF AUTHORITIES

CASES: Page

Board of Comm’rs of Port of N.O. v. Splendour Ship-

ping Enterprises Co., Inc. La. , 273 So.2d

19 (1973) MS TE A eee ne a SS 15

Dahistrom v. U.S., 228 F.2d 819 (8th Cir. 1956) _.. 14, 16

Dalehite v. U.S., 346 U.S. 15 73 S.Ct.

956 (1953) _.. 18, 16, 17, 18, 22, 23

Daniel v. United States, 426 F. 2d 281 (5th Cir. 1970) . 16

Deering Milliken, Inc. v. Johnston, 295 F. 2d 856 (4th

1961) LT AE Se LTTE

Donaldson v. United States 400 U.S. 517, 91 S.Ct. 534

(1971) sninnistiniten intense ae

Eastern Air Lines v. Union Trust Co., 221 F.2d 62

(D.C. Cir. 1955), aff'd 350 U.S. 907, 76 S.Ct.

192 (1955) ee

Fair v. U.S., 234 F.2d 288 (5th Cir 1956) _ 14,16

Feres v. United States, 340 U.S. 135, 71 S.Ct. 153

(1950) _. siacesscspeamestnkbealicint ialadssdastdasadenaiichiadandicaiaiidesidasl aan

Four Star Aviation, Inc. v. United States, 409 F. 2d

292 (5th Cir. 1969) hii a 17

Griffin v. United States, 500 F. 2d 1059 (8rd Cir.

SEED”. ilBicchinisletbssncnia Ce RL We, SO Me 14, 19

II

TABLE OF AUTHORITIES (Continued)

CASES: Page

Hatahley v. United States, 351 U.S. 173, 76 S.Ct.

745 (1956) 16

Hendry v. U.S., 418 F.2d 774 (2d Cir. 1969) — 14

Hester v. Sanderson 172 So. 565 (La. App. 2nd 1937) _ 14

Indian Towing Co. v. U.S., 350 U.S. 61, 76 S.Ct. 122

| Bee . 14,16

J. H. Rutter Rex Manufacturing Company, Inc. v.

United States, 515 F. 2d 97, 89 LRRM 2811

(5th Cir. 1975) 2

J. H. Rutter Rex Manufacturing Company, Inc. v.

NLRB, 399 F.2d 356 (5th Cir. 1968) _ 2, 6, 9,12

J. H. Rutter Rex Manufacturing Company, Inc. v.

NLRB, 473 F.2d 223 (5th Cir. 1973) cert. denied,

414 U.S. 822, 94 S.Ct. 120 (1973) 2

J. H. Rutter Rex Manufacturing Company, Inc. v.

U.S., 380 F.Supp. 412, 86 LRRM 2540 (E.D.La.

SEE ectiendiabioseaien dicioaicbsilcialiniaitalaeni MN OO 2

Laird v. Nelms, 406 U.S. 797, 92 S.Ct. 1899 (1972). 17, 21

Langlois v. Allied Chemical Corp., 258 La. 1067, 249

es 14

Lawyer’s Title Ins. Corp. v. Pitre, 245 F.2d 334 (5th

EIR ae Et 14

TABLE OF AUTHORITIES (Continued)

CASES: Page

Moyer v. Martin Marietta Corp. 481 F.2d 585 (5th

CO, BUD cececesesecseneneesiiccueaee ws 17

NLRB v. J. H. Rutter Rex Manufacturing Company,

Inc., 245 F.2d 594 (5th Cir. 1957) 2, 5, 12

NLRB v. J. H. Rutter Rex Manufacturing Company,

Inc. 305 F.2d 242 (5th Cir. 1962) =

NLRB v. J. H. Rutter Rex Manufacturing Company,

Inc., 396 U.S. 258, 90 S.Ct. 417 (1969) 2, 6, 10

Nelms v. Laird, 442 F.2d 1163 (4th Cir. 1971) 21

Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 61 S.Ct.

845 (1941) a-s-ceeseeeuapipessn 11

Pigott v. United States, 451 F. 2d 574 (5th Cir. 1971)_ 17

Quinones v. United States, 492 F. 2d 1269 (8rc Cir.

| (| | cman 15

Roelofs v. United States, 501 F. 2d 87 (5th Cir. 1974). 14

Rayonier, Inc. v. U.S., 352 U.S. 315, 77 S.Ct. 374

bE enaeneinatiiaaalan ~ancentenianeteeiiaaaae 13,17

Rutter Rex Mfg. Co., 115 NLRB 388 (1956) 4

Seaboard Coast Line Railroad Co. v. U.S., 473 F.2d

pC: ae Se; | Rn 16

Smith v. U.S., 375 F.2d 243 (5th Cir. 1967) — 16, 17

IV

TABLE OF AUTHORITIES (Continued)

CASES: Page

Somerset Seafood Co. v. U.S., 193 F.2d 631, (4th Cir.

1951) 13, 14, 21

Tucker v. Edwards, 214 La. 560, 38 So.2d 241 (1948)... 14

United States v. Muniz, 374 U.S. 150, 83 S.Ct. 1850,

(1963) 13,17

Universal Camera Corp. v. NLRB, 340 U.S. 474, 71

CT 10

Wallace Corporation v. NLRB, 159 F.2d 952, (4th Cir.

gs Sn 12

Weiland v. King, 262 La. 1083, 281 So.2d 688 (1973) _ 14

OTHER AUTHORITIES

Page

Statutes:

Administrative Procedure Act

(60 Stat. 237) 5 U.S.C. §1005(a) (1964 ed.) _.. 9

5 U.S.C. $555(b) (1966) 9,12

Federal Tort Claims Act

a ee aia 1, 4, 7, 30, 32

28 U.S.C. $2674 a 29, 35

28 U.S.C. $2680 _.............. 1, 8, 9, 24, 30, 32, 37

National Labor Relations Act

i e _. 10,12

Wreck Acts

I ee 14

Louisiana Civil Code (1870), Articles 2315, 2316, 2317. 14

Rules and Regulations:

National Labor Relations Board 29 C.F.R. $101 12

National Labor Relations Board Field Manual $10500

TE a Te,

VI

OTHER AUTHORITIES (Continued)

Page

National Labor Relations Board 32 F.R. 9588 §203.1,

amended by 37 F.R. 15956 . 12

Miscellaneous:

APA Legislative History, S. Doc., No. 248, 79th Con-

gress 2nd Sess. 263-264 a ioe ; 13

Reynolds, “The Discretionary Function Exception of

the Federal Tort Claims Act” 57 Georgetown

SE EE eee ae 19

Rothman, “Four Ways to Reduce Administrative

Delay,” 28 Tenn. L. Rev. 332 (1961) _..._ ._ 2

Stone, “Tort Doctrine in Louisiana: The Concept

Fault,”” XXVII Tulane L. Rev. 1 (1952) _.. 15

VII

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1975

No.

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.

Petitioner

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT

MAY IT PLEASE THE COURT:

J. H. Rutter Rex Manufacturing Company, Inc., peti-

tions for a writ of certiorari to review a judgment of

the United States Court of Appeals for the Fifth Circuit

which affirmed the judgment of the United States District

Court for the Eastern District of Louisiana dismissing

the suit of petitioner under the Federal Tort Claims Act,

28 U.S.C. §1346(b), $1402(b), §$2671-2680, et seq.

2

OPINIONS BELOW

The opinion of the Court of Appeals is reported at 515

F. 2d 97, 89 LRRM 2811 (5th Cir. 1975) and is appended

hereto as Appendix A, pages 26-32, infra. The opinion of

the district court is reported at 380 F. Supp. 412, 86

LRRM 2540 (E.D. La. 1974) and is appended hereto as

Appendix B, pages 33-37, infra. The judgment of the

district court dated April 30, 1974 is appended hereto as

Appendix C, page 38, infra. Other opinions which are

relevant to this Court’s consideration because they form

part of the background of this controversy are:

NLRB v., J. H. Rutter Rex Manufacturing Com-

pany, Inc., 396 U.S. 258, 90 S.Ct. 417 (1969) ;

J. H. Rutter Rex Manufacturing Company, Inc.

v. NLRB, 473 F. 2d 223 (5th Cir. 1973), cer-

tiorari denied 414 U.S. 822, 94 S.Ct. 120 (1973);

J. H. Rutter Rex Manufacturing Company, Inc.

v. NLRB, 399 F. 2d 356 (5th Cir. 1968) ;

NLRB v. J. H. Rutter Rex Manufacturing Com~

pany, Inc., 305 F.2d 242 (5th Cir. 1962)

NLRB v. J. H. Rutter Rex Manufacturing Com-

pany, Inc., 245 F. 2d 594 (5th Cir. 1957).

JURISDICTION

The jurisdiction of this Court is invoked under 28 U.S.C.

$1254(1) which provides that cases in the Courts of

Appeals may be reviewed by the Supreme Court by writ

of certiorari granted upon the petition of any party to

any civil or criminal case, before or after rendition of

judgment or decree. The judgment of the Court of Ap-

peals was dated June 30, 1975 and entered as mandate on

October 3, 1975 (Appendix D, p. 39, infra). On Septem-

ber 25, 1975, the Court of Appeals denied a timely petition

for rehearing en bane filed by J. H. Rutter Rex Manufac-

turing Company, Inc. (Order denying rehearing pursu-

ant to advice letter annexed as Appendix E, page 41,

infra).

3

QUESTION PRESENTED FOR REVIEW

The question presented for review is whether, in a

case in which a federal agency’s prompt performance of

its duty is required by statute, regulation and precedent,

and where the failure to perform the duty promptly re-

sults in consequential damages to a party before the

agency, the discretionary function exception to the Federal

Tort Claims Act insulates the United States from liability

to compensate the injured party for the damages sustained.

STATUTE INVOLVED

This case involves the interpretation of the discretionary

function exception to the Federal Tort Claims Act which

appears at 28 U.S.C. §2680(a) and states,

“The provisions of this chapter and section

1346(b) of this title shall not apply to—

(a) Any claim based upon an act or omission

of an employee of the Government, exercising

due care, in the execution of a statute or regula-

tion, whether or not such statute or regulation

be valid, or based upon the exercise or perform-

ance or the failure to exercise or perform a dis-

cretionary function or duty on the part of a

federal agency or an employee of the Government,

whether or not the discretion involved be abused.”

STATEMENT OF THE CASE

This case was submitted to the district court on a stip-

ulation of facts, a copy of which (exclusive of exhibits)

is appended to the district court’s opinion and is printed

in its entirety at 380 F.Supp. 414. The stipulation and

4

certain designated exhibits also appears at J.A. 37-148.’

This civil action was commenced by petitioner in the

district court under the Federal Tort Claims Act to recover

damages which were sustained as the result of negligent

and wrongful acts and omissions of employees of the Na-

tional Labor Relations Board (hereinafter the “Board”).

The jurisdiction of the district court was based upon 28

U.S.C. §$1346(b) which provides in part that—

“|, . the district courts . . . shall have exclusive

jurisdiction of civil actions on claims against the

United States, for money damages . . . caused by

the negligent or wrongful act or omission of any

employee of the Government while acting within

the scope of his office or employment under cir-

cumstances where the United States, if a private

person, would be liable to the claimant in accord-

ance with the law of the place where the act or

omission occurred.””?

On April 21, 1954, the production and maintenance em-

ployees of the Rutter Rex plant in New Orleans (ap-

proximately 600 people) went on strike shutting down the

entire operation. These employees were members of the

Amalgamated Clothing Workers of America, AFL-CIO.

The strike was economic in origin but was later held by the

Board to have been converted to an unfair labor practice

strike on technical grounds reflected in the decision of the

Board in Rutter Rex Mfg. Co., 115 NLRB 388 at page 390

1 This and other “J.A.” references are to the Joint Appendix filed in

the circuit court which document is being certified and transmitted

to this Court pursuant to Supreme Court Rule 21, at the request of

petitioner. References herein to “Stip.” accompanied by a “J.A.” ref-

erence are to particular paragraphs of the Stipulation of Facts upon

which this case was decided and to the Joint Appendix page where the

paragraph is found.

2 Venue was properly in the Eastern District of Louisiama pursuant

to 28 U.S.C. §1402(b).

5

(1956). (Stip. I—J.A. 37) The strike was terminated

on April 4, 1955, and thereafter strikers who had not

already been reinstated began applying for reinstatement

to their former jobs (Stip. IV—J.A. 38). When the strike

terminated, Rutter Rex began the difficult task of re-

building the balanced line operations of its plan (Stip. V,

Exhibit 1—J.A. 39, 66). On February 13, 1956, the

Board issued an order which required Rutter Rex to

“.. . upon application offer immediate and full reinstate-

ment to their former or substantially equivalent positions

to all those employees who went on strike on April 21,

1954, or thereafter...” (115 NLRB 388, 391; Stip. VI,

VII). The Fifth Circuit enforced the Board’s order on

June 10, 1957). NLRB v. J. H. Rutter Rex Manufacturing

Company, 245 F. 2d 594 (5th Cir. 1957).

Rutter Rex agreed to comply with the order as enforced

(Stip. XI, XII, XIV, XV, Exhibits 6, 7, 9, 10, 11—J.A.

43, 44, 45, 101, 102, 104, 105, 111). However the reinstate-

ment order raised complex compliance issues which were

recognized by the circuit court in 1957 (245 F. 2d at p.

598; Exhibit 1, Stip. VI, VII—J.A. 66, 39, 41).

After enforcement of the reinstatement order, the Board

was under the legal duty to act administratively to imple-

ment the order as enforced. However, for nearly four and

one-half years after the circuit court’s enforcing opinion,

the Board did not act. During most of this period the case

lay dormant in the Board’s hands while Rutter Rex was

under the impression that its compliance efforts were

satisfactory to the Board. (Stip. VIII, XXI, XXXIII—J.A.

47, 48, 50).

On November 4, 1961, the Board filed a backpay speci-

fication against Rutter Rex demanding $342,000 in back-

pay allegedly due to 207 former strikers (Stip. XXIX—

6

J.A. 55). After a lengthy hearing, backpay and interest

totalling $160,894.69 was awarded. On July 23, 1968, the

circuit court modified the Board’s award because of the

Board’s inordinate delay in processing the case. J. H.

Rutter Rex Manufacturing Company, Inc. v. NLRB, 399

F. 2d 356 (5th Cir. 1968). However, this Court reversed

and reinstated the full award, not because this Court dis-

agreed with the circuit court’s finding that the Board

had been guilty of unjustifiable delay, but because the

circuit court’s modification of the Board’s order exceeded

the narrow reviewing power of that court. NLRB v. J. H.

Rutter Rex Manufacturing Company, Inc., 396 U.S. 258,

263, 90 S.Ct. 417, 420, (1969). Mr. Justice Douglas, with

whom The Chief Justice and Mr. Justice Harlan con-

curred, dissented, being of the view that the circuit court

had properly approached the case as a problem in

“. . « Working out the equities of a back-pay order” and

that the circuit court had “. . . arrived at its judgment

as an exercise of its responsibility ‘for assuring that the

Board keeps within reasonable bounds’ . . . in an area that

necessarily involves ‘diverse, complicated situations.’ ”

(396 U.S. at p. 267-268).

Thereafter, a supplemental backpay claim was filed

(Stip. XXXII, XXXITI—J.A. 61, 62) for which additional

damages are claimed in this action. (Paragraph IX of

complaint, J.A. 4).

It is the position of Rutter Rex that the Board was

guilty of misfeasance in the performance of, and non-

feasance in failing to perform, its mandatory duties caus-

ing the damages complained of* and that the United States

3 The damages demanded are $144,001.24 plus interest and costs. This

was computed from an analysis and breakdown of backpay and interest

paid to 38 claimants as contained in paragraphs XXXII and XXKXIII

7

is liable for such damages because the Government’s tra-

ditional immunity from tort suit was waived to the extent

of such “negligent or wrongful acts or omissions.” 28

U.S.C. $$1346(b), 2674.

The Government answered the suit and filed a motion

to dismiss based upon the discretionary function exception.

This motion was denied by the district court on December -

21, 1973 (J.A. 37). On April 30, 1974, the district court

issued an order dismissing the suit and assigning written

reasons (Appendix B, infra).

SUMMARY OF REASONS OF THE

COURTS BELOW

The district court and circuit court opinions are based

solely on the discretionary function exception of 28 U.S.C.

$1346 (b).

The district court held:

“After careful consideration of the matter, it

is the opinion of the Court that the delay in com-

pleting the back pay specification on the part of

the Board was “inordinate” and “deplorable”, and

that plaintiff company was in fact damaged both

in its ability to defend the specification finally

filed and by the increased amount of the required

payments occasioned by the delay. However, the

Court is also of the opinion that the situation

and Exhibit 28 of the stipulation (J.A. 61-62, 139). This analysis shows

the tremendous impact of the Board’s delay. By the end of June, 1957

when the Fifth Circuit enforced the Board's reinstatement order, only

38 persons, 6.3% of the original strike force, remained to be dealt with

for reinstatement and backpay purposes. Of the total of $243,209.20

backpay and interest paid to 161 claimants who were found eligible to

receive backpay, $144,001.24 went to the 38 claimants. Thus, 59% of all

backpay went to 23% of the eligible claimants, for claims running

beyond June 30, 1957, that is, during the period of the Board's delay.

8

at bar is illustrative of the principle of damnum

absque injuria. Plaintiff has failed to provide,

and the Court has been unable to find, any au-

thority which supports plaintiff’s contention that

unreasonable delay in violation of the dictates of

the Administrative Procedure Act renders de-

fendant liable in damages under the Tort Claims

Act. On the contrary, it is the opinion of the

Court that the action of the agency in allocating

its enforcement case load was an act of discretion

within the meaning of 28 U.S.C. §2680(a). East-

port Steamship Corp. v. United States, 372 F.2d

1002, 178 Ct.Cl. 599 (1967); Coastwise Packet

Co. v. United States, 398 F.2d 77 (C. 1, 1968),

cert. den’d 393 U.S. 937, 89 S.Ct. 300, 21 L.Ed.2d

274 (1968).

While the length of the delay in this case was

deplorable, it is the Court’s opinion that it was

just this type of governmental liability which the

Congress sought to avoid by means of the excep-

tion contained in 28 U.S.C. $2680.” (Appendix B,

page 36, infra) [footnotes omitted].

In its affirming opinion, the circuit court held:

“The Board elected to have new and inexperi-

enced member Champagne “cut his teeth” on

smaller compliance matters before handling the

Rutter Rex case, a major back pay case. This

decision clearly involved public policy considera-

tions—balancing of various cost-benefit consid-

erations to advance the public interest. The NLRB

could clearly have thought it was in the public

interest to have Champagne gain experience be-

fore taking on the Rutter Rex case to insure full

compliance with the back pay order in the major

case. Thus the trial court correctly held that the

discretionary function exception applied even if

the NLRB abused its discretion in this case. See

9

28 U.S.C. §2680(a).” (Appendix A, page 31,

infra) .*

REASONS FOR GRANTING THE WRIT

The holdings of the district court and of the circuit

court both proceed from the erroneous view that the de-

cision making process of the Board in handling its com-

pliance caseload includes the discretion to violate the law.

If allowed to stand, these holdings will preclude any find-

ing of agency responsibility notwithstanding the fact of

damage resulting from unwarranted official delay. This

can and will lead to lax standards of care by federal

agency personnel in the handling of matters entrusted to

them. This is against the principles of federal admin-

istrative law embodied in the Administrative Procedure

Act [60 Stat. 237, 5 U.S.C., §1005(a) (1964 ed.), amended

5 U.S.C., §$555(b) (1966 ed.)]. This Court should decide

whether and under what circumstances unwarranted of-

ficial delay by an administrative agency can subject the

United States to liability for damages. This is not a

matter upon which this Court has previously ruled.

Furthermore, a decision by this Court on the scope of

the discretionary function exception of the Federal Tort

4The statement that the Board “could clearly have thought” that

its “decision” was in the “public interest” is one with which petitioner

takes strong exception. This argument is not supported by the stipula-

tion or by any part of the record and has been injected into the case

solely by the circuit court. The Board never contended in any related

case and the United States did not contend in the district court in

this case that its delay was justified on any public interest grounds.

It is stipulated that the assignment of the case to Champagne was “a

paper assignment” with the Board’s regional personnel fully aware that

Champagne could not and would not carry it out. (J.A. 30; Stip. XXI—

J.A. 48). In 1962, the Board admitted to the circuit court that its delay

was inordinate, NLRB v. J. H. Rutter Rer Manufacturing Company,

Inc., 305 F. 2d 242, 244 (5th Cir. 1962) and even conceded in 1968 that

it was “red faced” about the delay. J. H. Rutter Rer Manufacturing

Company, Inc. v. NLRB, 399 F. 2d 356 (5th Cir. 1968) at transcript of

oral argument, page 58. The Board has never considered its own con-

duct as other than culpable.

10

Claims Act is necessary because the circuit courts have

differed in their interpretations of the exception. See

Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534

(1971).

ARGUMENT

Except for some provisions of law which would insu-

late the Government from liability for its wrongful acts,

every relevant equity and public policy consideration sup-

ports the principle that a person who is damaged at the

hands of a government agency should be recompensed. For

agencies like the Board, which perform quasi judicial

functions affecting the rights and property of the parties

appearing before them, there are legal provisions for judi-

cia] review intended to assure that the agency acts fairly.

In the case of the Board, its decisions are reviewable by

the courts of appeals pursuant to 29 U.S.C. $160. By this

provision, Congress “. . . registered its dissatisfaction with

... restricted scope of review ...” and intended that the

courts of appeals “‘. . . assume more responsibility for

the reasonableness and fairness of Labor Board decisions

...” and that the courts assure “‘.... that the Board

keeps within reasonable bounds.’” NLRB v. J. H. Rutter

Rex Manufacturing Company, Inc., 396 U.S. 258, 267, 90

S.Ct. 417, 422 (1969) (dissenting opinien); Universal

Camera Comp. v. NLRB, 340 U.S. 474, .' S.Ct. 456

(1951). In the backpay phase of this case, these provisions

for judicial review were not adequate to repair the damage

to Rutter Rex by reason of the Board’s unwarranted delay,

because the backpay case involved the competing interests

of the employee-claimants and, in balancing these inter-

ests against those of Rutter Rex, this Court decided that

Rutter Rex must bear the cost of the Board’s delay. (396

U.S. at page 263, 90 S.Ct. at page 420). In the instant

11

case, no such competing interests are involved. In this

case the responsibility for the Board’s delay can be

placed squarely where it belongs—on the Government.

In Phelps Dodge Corporation v. NLRB, 313 U.S. 177,

194, 61 S.Ct. 845, 852 (1941), this Court, speaking through

Mr. Justice Frankfurter, said,

“A statute expressive of such large public policy

as that on which the National Labor Relations

Board is based must be broadly phrased and

necessarily carries with it the task of administra-

tive application . . . Congress met these difficul-

ties [of effectuating the Act’s policies] by leaving

the adaptation of means to end to the empiric

process of administration. The exercise of the

process was committed to the Board, subject to

limited judicial review. Because the relation of

remedy to policy is peculiarly a matter for ad-

ministrative competence, courts must not enter

the allowable area of the Board’s discretion and

must guard against the danger of sliding uncon-

sciously from the narrow confines of law into

the more spacious domain of pclicy. On the other

hand, the power with which Congress invested the

Board implies responsibility—the responsibility

of exercising the judgment in employing the stat-

utory powers. [Brackets and emphasis added].

It follows that once policy has been determined, the re-

sponsibility for implementing the policy pursuant to the

statutory mandate is no less stringent and must be un-

dertaken expeditiously.

The following provision of the Administrative Pro-

cedure Act was in effect at the time the Board con-

sidered the compliance phase of this case:

12

“Every agency shall proceed with reasonable dis-

patch to conclude any matter presented to it

except that due regard shall be had for the con-

venience and necessity of the parties or their rep-

resentatives.°

A former General Counsel of the Board has written:

“. . to discharge its mission an administrative

agency must have the confidence of the public

it serves, and the first step toward earning such

confidence again lies in the expeditious dispatch

of the business entrusted to it. . . .” Rothman,

Four Ways to Reduce Administrative Delay, 28

Tenn. L. Rev. 332, 332-3 (1961).

The underlying principle in support of these statements

is stated in the legislative history of the Administrative

Procedure Act, to-wit:

“. . . No agency shall in effect deny relief or fail

to conclude a case by mere inaction, or proceed

560 Stat. 237, 5 U.S.C. $1005(a) (1964 ed.). This section was re-

designated 5 U.S.C. §555(b) by a 1966 amendment which carried

forward the principle of expeditiousness by requiring each agency to

conclude matters before it “within a reasonable time.” Compliance cases

are committed to the Board's responsibility (29 U.S.C. §160) and the

Court's have required that the Board meet its responsibilities through

appropriate administrative action. Wallace Corporation v. NLRB, 159

F. 2d 952 (4th Cir. 1947). Such action was mandated in this case in

1957 when the circuit court wrote that the resolution of the numerous

questions involved in compliance with the backpay order as enforced

“. . ean come either in future administrative proceedings before and

through the Board or in direct contempt proceedings. .. ." NLRB vr.

J. H. Rutter Rer Manufacturing Company, Inc., 245 F. 2d 594, 598

(5th Cir. 1957). Board regulations show the Board’s awareness of its

responsibility. 29 FR §101 states, “After a Board order has been en-

forced by a Court decree, the Board has the responsibility of obtaining

compliance with that decree.” This responsibility has been delegated

by the Board to its Regional Directors. 32 F.R. 9588—§{203.1, as amended

by 37 F.R. 15956. Furthermore, the discharge of this responsibility must

be undertaken “immediately”. See National Labor Relations Board

Field Manual, U.S. Govt. Printing Office, §$10500 through 10520 at

$10504.4. These duties are owed to all parties before the Board wlifo

have the “. .. legal right to expect the Board to proceed with reason-

able expedition.” J. H. Rutter Rer Manufacturing Company, Inc. v.

NLRB, 399 F. 2d 356, 363 (5th Cir. 1968) Rev'd on other grounds, 396

U.S. 258, 90 S.Ct.417 (1969); see Deering Milliken, Inc. v. Johnston,

295 F. 2d 856 (4th Cir. 1961).

13

in a dilatory fashion to the injury of the person

concerned. No agency should permit any person to

suffer injurious consequences upon unwarranted

official delay. APA Legislative History, S. Doe.

No. 248, 79th Congress, 2nd Sess., 263-264. [Em-

phasis added].

The district court found that Rutter Rex is a person

injured as a consequence of unwarranted official delay in

violation of this principle. The scope of the Federal Tort

Claims Act is broad enough to provide a remedy for this

wrong. In Dalehite v. United States, 346 U.S. 15, 24, 73

S.Ct. 956, 961 (1953) this Court wrote that the Act

“. . . Was the offspring of a feeling that the Government

should assume the obligation to pay damages for the mis-

feasance of employees in carrying out its work.” Also,

the Act “. . . was not an isolated and spontaneous flash of

congressional generosity. It marks the culmination of a

long effort to mitigate unjust consequences of sovereign

immunity from suit.” Somerset Seafood Co. v. United

States, 193 F. 2d 631, 634 (4th Cir. 1951). “[T]he very

purpose .. . was to waive the Government’s traditional all-

encompassing immunity from tort actions and to establish

novel and unprecedented governmental liability. . . .”

Rayonier Incorporated v. United States, 352 U.S. 315, 319-

320, 77 S. Ct. 374 377 (1957); United States v. Muniz,

374 U.S. 150, 83 S. Ct. 1850 (1963).

The liability which Rutter Rex seeks to impose upon

the Government is neither novel nor unprecedented. This

cause of action is based upon the Board’s violation of

statutory and regulatory mandates—its failure to follow

established standards applicable to its administrative ob-

ligations (see footnote 5 supra). Actions based upon such

violations of duty have succeeded. Somerset Seafood Co. v.

United States, supra, (violation of the mandatory duty im-

14

posed by the Wreck Acts, 33 U.S.C. §$409 et seq, to mark

or remove sunken ships in navigable waters); Fair v.

United States, 234 F. 2d 288 (5th Cir. 1956) (where the

Court stated, “. . . the government is liable for the actions

of its employees dealing directly with the public in the

application of established policies .. . 234 F. 2d at p. 294) ;

Griffin v. United States, 500 F. 2d 1059 (3rd Cir. 1974)

at page 1068; Cf. Hendry v. United States, 418 F. 2d 774

(2nd Cir. 1969).

It is well established that the existence of private ac-

tivity identical to the governmental function involved is

not a condition precedent to the bringing of an action

under the Federal Tort Claims Act. Indian Towing Com-

pany v. United States, 350 U.S. 61, 76 S.Ct. 122 (1955);

Somerset Seafood Co. v. United States. supra; See also

Roelofs v. United States, 501 F. 2d 87 (5th Cir. 1974);

Fair v. United States, supra; Dahlstrom v. United States,

228 F. 2d 819 (8th Cir. 1956),

Louisiana tort law has long recognized a cause of action

for damages against a public officer who knowingly or

negligently fails to perform a ministerial or administra-

tive duty which he is required by legal authority to per-

form. See Tucker v. Edwards, 214 La. 560, 38 So.2d 241

(1948); Hester v. Sanderson, 172 So. 565 (La. App. 2nd

1937); Lawyer's Title Ins. Corp. v. Pitre, 245 F. 2d 334

(‘5th Cir. 1957). The tort doctrine in Louisiana which is

embodied in Articles 2315, 2316 and 2317 of the Loui-

siana Civil Code of 1870 is flexible in its application to

new circumstances and is broad enough to embrace conduct

which falls below a proper standard of care as established

by statute, ordinance, rule, regulation, code, received usage,

custom or equity. Weiland v. King, 262 La. 1083, 281 So.

2d 688 (1973); Langlois v. Allied Chemical Corp., 258 La.

15

1067, 249 So. 2d 133 (1971); Stone, Tort Doctrine in Loui-

siana: The Concept of Fault, XXVII Tulane L. Rev. 1

(1952). Louisiana is particularly sensitive to the concept

of government responsibility for its wrongs which it com-

mits, as the following quotation from the decision which

abolished the doctrine of sovereign immunity as applied

to the State and its agencies, points out:

“Governmental responsibility is needed more to-

day than ever. There is hardly any sector of priv-

ate life and activity free from governmental in-

tervention. The myriad State agencies and their

employees almost defy inventory, to say nothing

of control by the people whom they purport to

serve. It has not been the policy of the legislature

to permit employees of agencies to injure, inten-

tionally or carelessly, private citizens. It is and

should be the policy of the State, enforced through

its courts, to require boards and agencies to act

responsibly, or be subject to answer in court.”

Board of Comm'rs. of Port of N. O. v. Splendour

Shipping Enterprises Co., Inc., —.... ED dinamng

273 So. 2d 19, 25-26 (1973).

It is clear that the specific and general tort theories

of Louisiana support recovery in this case. See Quinones

v. United States, 492 F.2d 1269 (3rd Cir. 1974).

Notwithstanding these principles of Federal and State

law, the circuit court, relying upon the view that the

Board had discretion to violate its duty by unreasonable

and inordinate delay in handling the Rutter Rex case,

affirmed the dismissal of this action. It is not clear why

the circuit court felt, compelled to affirm. The Board’s

decision to pretermit this case was a relatively low level

decision, involving only the limited, insignificant considera-

tion of training a new employee during a period when the

16

local Board office was understaffed. This was not the

type of decision which the Fifth Circuit had previously

considered immune from attack, such as in Smith v. United

States, 375 F. 2d 243 (5th Cir. 1967), involving a prose-

cutorial decision of the Attorney General which the court

considered an area of fundamental national policy. See

also Four Star Aviation, Inc. v. United States, 409 F. 2d

292 (5th Cir. 1969) (a foreign policy decision).

This Court first considered the discretionary function

exception in Dalehite v. United States, supra. In Dalehite,

the exception was considered in the light of a distinction

drawn between the planning and operational functions of

government, with immunity attaching to discretionary de-

cisions at the planning level but not at the operational

level. The Court noted that the exception includes “. . . de-

terminations made by executives or administrators in

establishing plans, specifications or schedules of operation.

346 U.S. at p.36, 73 S.Ct. at p.968). The planning opera-

tional distinction has been applied in several cases. E.g.,

Indian Towing Co. v. United States, supra; Seaboard Coast

Line R.R. Co. v. United States, 473 F. 2d 714 (5th Cir.

1973); Daniel v. United States, 426 F. 2d 281 (5th Cir.

1970) ; Fair v. United States, supra; Eastern Air Lines v.

Union Trust Co., 221 F. 2d 62 (D.C. Cir. 1955), aff’d.,

350 U.S. 907, 76 S.Ct. 192 (1955); Dahlstrom v. US.,

supra. Even applying this rule literally to the facts of the

instant case, it is questionable that the suit should have

been dismissed because here, no plan, no schedule of opera-

tion, was established or even attempted by the Board. The

assignment of the case to Champagne in 1957 meant only

that he should work on it “when he could find the time.”

(Stip. XXIII—at J.A. 52).

However, subsequent decisions of this Court in Jndian

Towing Co. v. United States, supra; Hatahley v. United

17

States, 351 U.S. 173, 76 S. Ct. 745 (1956) and Rayonier,

Inc. v. United States, supra, [see also, United States v.

Muniz, supra, but see, Feres v. United States, 340 U.S.

135, 71 S.Ct. 153 (1950) and Laird v. Nelms, 406 US.

797, 82 S.Ct. 1899 (1972)], have repeatedly been in-

terpreted as narrowing Dalehite’s broad interpretation of

the exception. The Fifth Circuit Court of Appeals has

led the way in holding that courts must reject an absolutist

interpretation of the discretionary function exception and

of Dalehite. Moyer v. Martin Marietta Corp., 481 F. 2d

585 (5th Cir. 1973); Pigott v. United States, 451 F. 2d

574 (5th Cir. 1971); Smith v. United States, supra. This

has resulted in some cases (including the instant case) of

a rejection of the planning-operational distinction in favor

of an ad hoc determination, on a case by case basis, ration-

alizing each decision on policy considerations. In Smith,

supra, the court concluded that the planning-operational

distinction—

“may be a makeweight in easy cases where of

course it is not needed, but in difficult cases

it proves to be another example of a distinction

‘so finespun and capricious as to be almost in-

capable of being held in the mind for adequate

formulation.’ ” Smith v. United States, supra at

p. 246.

The results of this ad hoc approach have been mystify-

ing. In Smith, supra, the court held that a cabinet level

policy decision was not subject to attack. The result was

the same in Four Star Aviation, Inc. v. United States, supra,

involving international relations and foreign policy. On

the other hand, in Pigott v. United States, supra, the court

held that a decision as to the time of test firing, and the

amount of thrust to be developed by a Saturn rocket, may

not have been protected; and in Moyer v. Martin Marietta

18

Corp., supra, the court held that, although a decision by

the Secretary of the Air Force selecting the B-57A as part

of this country’s armament was a discretionary function

within the meaning of the Federal Tort Claims Act, the

acceptance of the aircraft’s systems such as the pilot ejec-

tion seat, a mechanism which posed a safety hazard to a

person operating the aircraft, did not fall within the scope

of the exception. The confusion in the jurisprudence re-

quires clarification by this Court.

The only way that the cited cases can be reconciled is

on the basis of the rule that once the exercise of immune

discretion has resulted in the formulation of a policy,

negligence or carelessness in carrying out that policy, at

any level, is actionable. But, if this is the law, the decision

in the instant case is clearly erroneous because the “policy”

of imposing backpay liability was established administra-

tively by the Board in its 1956 order. Thereafter, the policy

was administered carelessly and wrongfully by those to

whom the responsibility for implementing it, according to

established standards, was assigned. There is nothing in

the jurisprudence under this Act which justifies dismissal

of a tort suit of an injured citizen against the Government

not because the negligence on which the suit was based

involves major national policy considerations, but because

of ‘cost-benefit considerations” by an understaffed local

office of an administrative agency which was merely de-

ciding how to train a new employee.

The circuit court was a victim of the snare warned of

by Mr. Justice Jackson in his dissent in Dalehite v. U.S.,

supra, (346 U.S. at p. 50) where he wrote: .

“The Government, as a defendant, can exert an

unctuous persuasiveness because it can clothe of-

ficial carelessness with a public interest. Hence,

19

one of the anticipated consequences of the Tort

Claims Act has been to throw the weight of Gov-

ernment influence on the side of lax standards of

care in negligence cases which it defends.”

In the article by Reynolds, The Discretionary Function

Exception of the Federal Tort Claims Act, 57 Georgetown

L. J. 81, 93-98 (1968), the author concludes, “where a

duty to perform an act or to act in a particular manner, is

imposed on the government by law, the government can-

not be heard to argue it exercised discretion in failing

to perform the duty, for it has no such discretion.”

The decision in Griffin v. United States, 500 F. 2d 1059

(3rd Cr. 1974) recognizes and adopts the quoted prin-

ciple. This same principle was ignored by the Fifth Circuit

in the instant case and, therefore, the Third and Fifth

Circuit opinions represent conflicting interpretations of

the discretionary function exception.

Griffin involved a FTCA suit by plaintiffs who were

damaged as the result of ingestion of polio vaccine which

had been released to the public on the authority of the

Division of Biologic Standards, Department of Health,

Education and Weifare. HEW’s Division was obligated by

Federal Regulations to test the vaccine for safety prior

to releasing it. The government contended that the de-

terminations called for by the regulations involved the

exercise of judgment and that the discretionary function

exception of the FTCA insulated it from liability on

claims “ ‘arising from acts of a regulatory nature.’”’ (500

F.2d at page 1063). This contention was rejected. The

court’s reasoning is illustrative of the principles relied

upon by Rutter Rex. The court commented and held:

20

“At the outset, we emphasize what is not being

challenged on this appeal. Plaintiffs do not chal-

lenge the Surgeon General’s determination to ap-

prove a live-virus immunization program. Neither

do plaintiffs challenge the regulation which

established the standard against which all manu-

factured lots were to be measured. . . . These

were matters involving balancing of policy con-

siderations in advancing the public interest. Plain-

tiffs, in the instant case, challenge solely the

manner by which the regulation was implement-

ed. They contend that in approving a particular

lot, Lot 56, for release to the public. DBS failed

to comply with the standard established by the

Surgeon General.

“The issue before us, therefore, is whether the

implementation of regulation 73.114 (b) (1) (iii)

by DBS involved a ‘discretionary function.’ To

decide this question we must first determine ex-

actly what the regulation required be done in

determining whether to release a particular lot.”

(500 F.2d at p. 1064)

“Where the conduct of Government employees in

implementing agency regulations requires only

performance of scientific evaluation and not the

formulation of policy, we do not believe that the

conduct is immunized from judicial review as a

‘discretionary function.’” (500 F.2d at p. 1066)

“Even were we to concede that discretion was

otherwise conferred upon DBS by the regula- -

tion, no discretion was conferred to disregard

the mandatory regulatory command. In discount-

ing test results that were required to be considered

significant, DBS acted outside the scope of the

21

authority conferred by the regulation. The vio-

lation of a non-discretionary command takes what

otherwise might be characterized as a ‘discretion-

ary function’ outside the scope of the statutory

exception. . . . Although Congress has provided

that activity within the authority of a Govern-

ment official, if a ‘discretionary function’ may

not be the basis of Government liability even if

negligent or an abuse of discretion, Congress has

not immunized such activity if it exceeds the au-

thority conferred. Liability, in such cases, is pre-

dicated not on a negligent or unwise policy de-

termination, but on the failure of Government

employees to conform to and act consistently

with the authority delegated. We do not hold

that the Government may be liable for policy

determinations made by its officials. Rather, we

hold only that the Government may be liable

where its employees, in carrying out their duties,

fail to conform to pre-existing statutory and reg-

ulatory requirements.” (500 F.2d at p. 1068)

In Laird v. Nelms, 406 U.S. 797, 92 S.Ct. 1899 (1972)

this Court was presented with two issues under the Fed-

eral Tort Claims Act. The first concerned the coverage

of the Act in cases where strict liability is alleged as

opposed to cases of negligence or other form of misfeasance

or nonfeasance. The second issue involved the scope of the

discretionary function exception. Because the first issue

was decided adversely to plaintiff, the second issue was

not reached by the majority. The court of appeals had held,

analogizing to the situation in Somerset Seafood Co. v.

United States, supra, and citing Reynolds, supra, that

where a regulation placed government employees under a

duty to perform a mandatory act, the discretionary func-

tion exception does not afford the government a defense

when it has disobeyed the command. Nelms v. Laird, 442

F. 2d 1163 (4th Cir. 1971).

22

Mr. Justice Stewart, with whom Mr. Justice Brennan

joined, dissented from the majority opinion in Laird. Mr.

Justice Stewart considered the discretionary function ex-

ception and concluded that it was inapplicable to the case.

The following is quoted from the dissenting opinion:

“The Assistant Attorney General who testified on

the bill before the House committee indicated

that this provision was intended to create no ex-

ceptions beyond those that courts would probably

create without it:

‘{I]}t is likely that the cases embraced within

that subsection would have been exempted

from [a bill that did not include the excep-

tion] by judicial construction. It is not prob-

able that the courts would extend a Tort

Claims Act into the realm of the validity of

legislation or discretionary administrative

action, but [the recommended bill] makes

this specific.’ Hearings on H.R. 5373 and

H.R. 6463 before the House Committee on

the Judiciary, 77th Cong., 2d Sess., ser. 13,

p. 29.

“The Dalehite opinion seemed to say that no

action of a Government employee could be made

the basis for liability under the Act if the action

involved ‘policy judgment and decision.’ 346 U.S.,

at 36, 73 S.Ct., at 968. Decisions in the courts of

appeals following Dalehite have interpreted this

language as drawing a distinction between ‘policy’

and ‘operational’ decisions, with the latter falling

outside the exception. That distinction has be-

deviled the courts that have attempted to apply it

to torts outside routine categories such as auto-

mobile accidents, but there is no need in the

present case to explore the limits of the discre-

tionary function exception.

1 eee meter

a eee ee ee "

23

“The legislative history indicates that the pur-

pose of this statutory exception was to avoid any

possibility that policy decisions of Congress, of

the Executive, or of administrative agencies

would be second-guessed by courts in the context

of tort actions. There is no such danger in this

case, for liability does not depend upon a judg-

ment as to whether Government officials acted ir-

responsibility or illegally. Rather, once the crea-

tion of sonic booms is determined to be an activity

as to which the doctrine of absolute liability

applies, the only questions for the court relate to

causation and damages. Whether or not the de-

cision to fly a military aircraft over the re-

spondents’ property, at a given altitude and at a

speed three times the speed of sound, was a de-

cision at the ‘policy’ or the ‘operational’ level, the

propriety of that decision is irrelevant to the ques-

tion of liability in this case, and thus the dis-

eretionary function exception does not apply.”

(406 U.S. at page 810, 92 S.Ct. at page 1906)

[footnotes omitted].

The warning of Mr. Justice Jackson in his dissenting

opinion in Dalehite has proven prophetic. The distinction

which Mr. Justice Stewart says has “bedeviled”’ the courts

has led to irreconcilable results. There is no guide for

future cases. The jurisprudence is two-pronged, one line

following the planning-operational distinction, the other

line the ad hoe policy determination route with the in-

stant case and Griffin in conflict over the significance

of policy considerations in the face of statutory and regu-

latory mandates.

CONCLUSION

There is no justification for permitting the Government

to rely upon the discretionary function defense in any case

24

where policy has been established and the wrong occurs

because mandated administrative action has been inordin-

ately delayed. A contrary view is tantamount to saying

that federal agencies have discretion to violate the law and

ignore regulatory commands. The question here is not

one of balancing policy considerations. The real question

is whether the Board had any discretionary right to con-

duct its affairs in violation of a positive mandate in the

law and the applicable regulations. .

This area of dispute and doubt is important to the

administration of the Federal Tort Claims Act by the

lower courts. A majority of this Court has not authorita-

tively spoken on the subject or settled the issue. The dif-

fering interpretations by the circuit courts of 28 U.S.C.

$2680(a!, require this Court to grant review of this case

on writ of certiorari.

Respectfully Submitted:

HENRY J. READ

DANIEL LUND

806 First National Bank

of Commerce Building

New Orleans, Louisiana 70112

Counsel for Petitioner,

J. H. Rutter Rex Manufacturing |

Company, Ine.

Of Counsel:

MONTGOMERY, BARNETT, BROWN & READ

‘te

25

CERTIFICATE

It is certified in accordance with Supreme Court Rules

21 and 33, that three copies of the foregoing petition for

certiorari have been served on each of the individuals

named below, by depositing same in a United States mail

box, first class postage prepaid, or, if apnlicable, air mail

postage prepaid, addressed as follows:

Solicitor General

United States Department of Justice

Washington, D. C. 20530

Gerald J. Gallinghouse

United States Attorney for the

Eastern District of Louisiana

500 St. Louis Street

New Orleans, Louisiana 70130

New Orleans, | uisiana, December / vy] 1975.

~~ DANIEL LUND

26

APPENDIX A

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.,

Plaintiff-Appellant,

v.

UNITED STATES of America,

Defendant- Appellee.

No. 74-2366

United States Court of Appeals,

Fifth Circuit.

June 30, 1975.

Employer brought suit under the Federal Tort Claims

Act claiming that it was damaged by unreasonable delay

of the National Labor Relations Board in securing compli-

ance with a reinstatement order. The United States Dis-

trict Court for the Eastern District of Louisiana, at New

Orleans, R. Blake West, J., 380 F.Supp. 412, dismissed the

complaint with prejudice, and the employer appealed. The

Court of Appeals held that even if the Board abused its

discretion in delay of over four years in filing initial back

pay specification against employer following enforcement

of the Board’s reinstatement order, where delay was caused

by assignment of the matter in an understaffed office to

inexperienced compliance officer who was directed to handle

smaller matter first to gain experience, discretionary func-

tion exception in the Federal Tort Claims Act applied to

preclude recovery by employer.

Affirmed.

27

1. United States—78(12)

In order to invoke the discretionary function exception

in the Federal Tort Claims Act, it is not sufficient for the

Government to demonstrate that some choice was involved

in the decision-making process; the nature of the judg-

ment must also call for the balancing of policy considera-

tion. 28 U.S.C.A. $2680.

2. United States—78(12)

Even if the National Labor Relations Board abused its

discretion in delay of over four years in filing initial back

pay specification against employer following enforcement

of the Board’s reinstatement order, where delay was caused

by assignment of the matter in an understaffed office to

inexperienced compliance officer who was directed to handle

smaller matter first to gain experience, discretionary func-

tion exception in the Federal Tort Claims Act applied to

preclude recovery by employer, which claimed that unrea-

sonable delay by the Board in securing compliance caused

it damage. 28 U.S.C.A. §$1346(b), 2671 et seq., 2680(a).

Appeal from the United States District Court for the

Eastern District of Louisiana.

Before GIBSON,* THORNBERRY and AINSWORTH,

Circuit Judges.

PER CURIAM:

J. H. Rutter Rex Manufacturing Company seeks to re-

cover $144,001.24 from the United States under the Fed-

* Of the Sth Circuit, sitting by designation.

28

eral Tort Claims Act, 28 U.S.C. $2671 et seq. Rutter Rex

claims that the National Labor Relations Board’s unrea-

sonable delay in securing compliance with a reinstatement

order caused the damages. The district court below ruled

on the merits that the discretionary function exception to

the Tort Claims Act bars the suit. Rutter Rex challenges

that here, but we agree with the district court and affirm.

On April 21, 1954 the production and maintenance work-

ers at Rutter Rex’s New Orleans plant went on a strike

that lasted until April 4, 1955. During that time Rutter

Rex hired replacements for many of the striking employees.

The National Labor Relations Board found that the em-

ployer had committed unfair labor practices, and ordered

the company to reinstate the strikers with back pay. After

Rutter Rex refused voluntary compliance, the Board suc-

cessfully petitioned this court for enforcement. NLRB v.

J. H. Rutter-Rex Manufacturing Co., 245 F.2d 594 (5 Cir.

1957). On August 21, 1957, the Board’s regional office

wrote Rutter Rex offering its assistance in implementing

the decree, but also stating: “When you have fully com-

plied with the affirmative terms of the decree and there

are no violations of its negative provisions, you will be

notified that the case has been closed. Until you receive

such notice you will know that the case remains open for

all purposes as awaiting compliance.”” On November 4,

1961, the Board filed its first back pay specification, listing

claims totalling $342,764.07 as of June 30, 1961. Rutter

Rex contested that specification to the U. S. Supreme

Court, but ultimately lost. See NLRB v. J. H. Rutter Rex

Manufacturing Co., 396 U.S. 258, 90 S.Ct. 417, 24 L.Ed.2d

405 (1969). The Board then computed a supplemental back

pay specification for claims accruing after June 30, 1961.

A panel of our court enforced that specification in J. H.

Rutter Rex Manufacturing Co. v. NLRB, 473 F.2d 223

29

(5 Cir. 1973), cert. denied, 414 U.S. 822, 94 S.Ct. 120,

38 L.Ed.2d 55.

Thus over a period of about twenty years, Rutter Rex

has actively contested the reinstatement orders and back

pay awards at every turn. The company has now filed

a claim under the Federal Tort Claims Act seeking to

recover $144,001.24—the claimed additional back pay lia-

bility incurred by the Board’s unreasonable delay in filing

the initial back pay specification.*

The government answered Rutter Rex’s FTCA claim

and moved to dismiss for lack of subject matter jurisdiction

under Fed.R.Civ.P. 12(b)(1). The trial court denied the

government’s motion to dismiss, and the parties submitted

the case to the trial court on a lengthy set of stipulations

and deposition testimony. After considering the additional

materials, the trial court ruled on the merits for the

United States. The trial court felt that the Board’s delay

in the case was “deplorable” but declined to award Rutter

Rex the requested damages. The court opined that the

government’s decision on allocation of its enforcement

case load was a discretionary act within the meaning of

28 U.S.C. $2680(a). Therefore the court ruled for the

United States on the merits, and dismissed the complaint

with prejudice.

The Federal Tort Claims Act, 28 U.S.C. $2671 et seq.,

makes a limited waiver of the government’s sovereign im-

munity. 28 U.S.C. $2674 provides that “The United States

shall be liable, respecting the provisions of this title re-

lating to tort claims, in the same manner and to the

1 Rutter Rex computes this amount as the total back pay liability to

the thirty-eight persons it had not reinstated as of the date of enforce-

ment of the Board’s order in 1957.

30

same extent as a private individual under like circum-

stances, but shall not be liable for interest prior to judg-

ment or for punitive damages.”’ 28 U.S.C. $2680 provides

the exception to this waiver of immunity that the trial

court relied on: “The provisions of this chapter and section

1346(b) of this title [the jurisdictional statute for the

Federa] Tort Claims Act] shall not apply to—

(a) Any claim based upon an act or omission of an em-

ployee of the Government, exercising due care, in the

execution of a statute or regulation, whether or not

such statute or regulation be valid, or based upon the

exercise or performance or the failure to exercise or

perform a discretionary function or duty on the part

of a federal agency or an employee of the Government,

whether or not the discretion involved be abused.”

The discretionary function exception was originally

given a broad sweep in Dalehite v. United States, 346

U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427 (1953), where the

Supreme Court relieved the United States of all liability

for its actions in connection with the April 1947 Texas

City disaster. But subsequent Supreme Court decisions sub-

stantially narrowed Dalehite’s reading of the discretionary

function exception. See Rayonier, Inc. v. United States,

352 U.S. 315, 77 S.Ct. 374, 1 L.Ed.2d 354 (1957);

Hatahley v. United States, 351 U.S. 173, 76 S.Ct. 745,

100 L.Ed. 1065 (1056); Indian Towing Co. v. United

States, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48 (1955).

[1] The cases following Dalehite make clear that an

absolutist interpretation of the discretionary function is

improper. Smith v. United States, 375 F.2d 243 (5 Cir.),

cert. denied, 389 U.S. 841, 88 S.Ct. 76, 19 L.Ed.2d 106

(1967). It is not sufficient for the government to demon-

strate that some choice was involved in the decision-making

eee Come. ee eene +s eee

31

process. That showing could be made in almost every

case. Pigott v. United States, 451 F.2d 574 (5 Cir. 1971).

The nature of the judgment must also call for the balanc-

ing of policy considerations. Griffin v. United States, 500

F.2d 1059 (3 Cir. 1974) ; Moyer v. Martin Marietta Corp.,

481 F.2d 585 (5 Cir. 1973).

[2] The stipulations show that the NLRB assigned the

compliance phase of the Rutter Rex case to Edward Cham-

pagne two days after the panel decision enforcing the

Board’s order. (June 12, 1957). Champagne was told to

handle the smaller Ozark Dam case first to gain experi-

ence. From June 12, 1957 through May, 1958, he spent

twenty to twenty-five working days on the Rutter Rex

case, then began working full time on the Ozark Dam

case, completing it on March 24, 1959. From June 1, 1958

until August 31, 1959, no staff member worked on the

Rutter Rex matter. Then a new compliance officer, John

Immel, took over the case, and the matter received regular

attention until the back pay specifications’ completion on

November 4, 1961.

The evidence indicated that the New Orleans NLRB

office was understaffed during the relevant period. The

Board elected to have new and inexperienced member

Champagne “cut his teeth” on smaller compliance matters

before handling the Rutter Rex case, a major back pay

case. This decision clearly involved public policy considera-

tions—balancing of various cost-benefit considerations to

advance the public interest. The NLRB could clearly have

thought it was in the public interest to have Champagne

gain experience before taking on the Rutter Rex case to

insure full compliance with the back pay order in that

major case. Thus the trial court correctly held that the

32

discretionary function exception applied even if the NLRB

abused its discretion in this case. See 28 U.S.C. §2680(a).

Affirmed.

2Under 28 U.S.C. §1346(b), the United States is liable for money

damages caused by the negligent actions of its employees acting within

the scope of their employment “under circumstances where the United

States, if a private person would be liable to the claimant in accordance

with the law of the place where the act or omission occurred.” The United

States argues that Louisiana tort law provides no private analogue to the

present action, hence no FTCA liability. See Feres v. United States, 340

U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1962). But see Indian Towing Co.

v. United States, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48 (1955); Bankston

v. United States, 480 F.2d 495 (5th Cir. 1973). Our decision on the dis-

cretion function issues make consideration of this argument unnecessary.

33

APPENDIX B

J. H. RUTTER REX MANUFACTURING

COMPANY, INCORPORATED

V.

UNITED STATES of America.

Civ. A. No. 71-1960.

United States District Court,

E. D. Louisiana.

April 30, 1974.

An action was brought by an employer under the Federal

Tort Claims Act. The District Court, R. Blake West, J.,

held that although unreasonable delay of the National

Labor Relations Board in completing a back pay specifica-

tion was inordinate and deplorable and damaged the em-

ployer in its ability to defend the specification finally filed

and thereby increased the amount of required payments

occasioned by delay, and such unreasonable delay was viola-

tive of the dictates of the Administrative Procedure Act.

such type of claimed governmental liability fell within an

exception of the Tort Claims Act and the principle of

damnum absque injuria was applicable.

Judgment for the Government, and claim dismissed with

prejudice.

United States—78(12)

Although unreasonable delay of National Labor Rela-

tions Board in completing back pay specification was in-

34

ordinate and deplorable and damaged employer in its

ability to defend specification finally filed and thereby

increased amount of required payments occasioned by de-

lay, and such unreasonable delay was violative of dictates

of Administrative Procedure Act, such type of claimed

governmental liability involved exercise of discretion and

principle of damnum absque injura was applicable. 5

U.S.C. A. §$551 et seq., 555(b) ; 28 U.S.C.A. $$1346, 2671

et seq., 2674, 2675, 2680, 2680(a); National Labor Rela-

tions Act, $8(a) (5), as amended 29 U.S.C.A. $158(a) (5).

ORDER

R. BLAKE WEST, District Judge.

This action, based upon the Federal Tort Claims Act,

arises from a labor dispute which occurred in 1954 and

which has been the subject of almost continuous litigation

since that time. By means of the instant lawsuit, plain-

tiff seeks damages allegedly occasioned by the delay of

defendant’s agency, the National Labor Relations Board

(hereinafter the Board), in implementing the enforcement

order of the Board dated February 13, 1956, which re-

quired job reinstatement to certain of the striking em-

ployees, as well as back pay to these employees. Plaintift

alleges that the Board “negligently failed and omitted to

take any action” pursuant to the order until November,

—_—_—— _-—_

'See: N. L. R. B. v. J. H. Rutter—Rex Manufacturing Co., 229 F.2d

816 «C. 5, 1986); N. L. R. B. v. J. H. Rutter—Rex Manufacturing Co., 245

F.2d 594 (C. 5, 1957); N. L. R. B. v. J. H. Rutter—Rex Manufacturing

Co., 305 F.2d 242 (C. 5, 1962); J. H. Rutter—Rex Manufacturing Co. vy.

N. L. R. B., 399 F.2d 356 (C. 5, 1968); N. L. R. B. v. J. H. Rutter—Rex

Manufacturing Co., 396 U.S. 258, 90 S.Ct. 417, 24 L.Ed. 405 (1969): J. H.

Rutter—Rex Manufacturing Co. v. N. L. R. B., 473 F.2d 223 (1973).

a Ne A oe a ee eee

35

1961. Plaintiff asserts that this delay impaired its ability

to defend the individual back pay claims ultimately de-

signated in the back pay specification (filed on November

16, 1961, and supplemented on November 30, 1970) and

caused the claims to increase substantially in amount dur-

ing the prolonged period of delay.

After failing in an attempt to have the back pay speci-

fication reduced because of the delay (N. L. R. B. v. J. H.

Rutter—Rex Manufacturing Co., 396 U.S. 258, 90 S.Ct.

417, 24 L.Ed.2d 405 (1969)), the company paid the re-

quired back pay and subsequently filed this actien for

damages pursuant to the Federal Tort Claims Act, 28

U.S.C. $1346, 28 U.S.C. $2674.?

For the following reasons, the Court is of the opinion

that, despite the damages suffered by plaintiff as a result

of the Board’s inexcusable delay, plaintiff has no basis

for recovery against defendant.

It is the position of plaintff that the Board’s delay

violated its duty to proceed with the reasonable dispatch

required of the Board by the Administrative Procedure

Act, 5 U.S.C. §$555(b),® and that such violation renders

2“$1346(b) Subject to the provisions of chapter 171 of this title, the

district courts, together with the United States District Court for the

District of the Canal Zone and the District Court of the Virgin Islands,

shall have exclusive jurisdiction of civil actions on claims against the

United States, for money damages, accruing on and after January 1,

1945, for injury or loss of property, or personal injury or death caused by

the negligent or wrongful act or omission of any employee of the Gov-

ernment while acting within the scope of his office or employment,

under circumstances where the United States, if a private person, would

be liable to the claimant in accordance with the law of the place where

the act of omission occurred.”

“$2674. Liability of United States

The United States shall be liable, respecting the provisions of this

title relating to tort claims, in the same manner and to the same extent

as a private individual under like circumstances. . .”

3 With due regard for the convenience and necessity of the parties

or their representatives and within a reasonable time, each agency shall

proceed to conclude a matter presented to it. This subsection does not

grant or deny a person who is not a lawyer the right to appear for or

represent others before an agency on in an agency proceeding.

36

defendant liable under the Tort Claims Act.

It is the postion of defendant that the action taken by

the Board (or its inaction) constituted a discretionary

function of a governmental agency and therefore was not

a basis for an action under the Tort Claims Act.*

The parties have entered into a lengthy stipulation of

facts (See Appendix)*, the matter was submitted to the

Court for what is hoped will be a final disposition of a

case which, “. . . beclouds the highly respectable idea that

all litigation must, some day, come to an end.” J. H. Rutter

—Rex Manufacturing Co. v. N. L. R. B., 399 F.2d 356,

357. (C. 5, 1968).

After careful consideration of the matter, it is the

opinion of the Court that the delay in completing the back

pay specification on the part of the Board was “inor-

dinate”® and “deplorable”’,® and that plaintiff company

was in fact damaged both in its ability to defend the

specification finally filed and by the increased amount of

the required payments occasioned by the delay. However,

the Court is also of the opinion that the situation at bar

is illustrative of the principle of damnum absque injuria.

Plaintiff has failed to provide, and the Court has been

—

428 U.S.C. §2680. Erceptions.

The provisions of this chapter and section 1346(b) of this title shall

not apply to—

(a) Any claim based upon an act or omission of an employee of the

Government, exercising due care, in the execution of a statute or regula-

tion be valid, or based upon the exercise or performance or the failure to

exercise or perform a discretionary function or duty on the part of a

federal agency or an employee of the Government, whether or not the

discretion involved be abused. 2

ea — Manufacturing Co. v. N. L. R. B., 399 F.2d 356

(C. 5, 1968).

6N. L. R. B. v. J. H. Rutter—Rex Manufacturing Co., 396 U.S. 258, 90

S.Ct. 417, 24 L. Ed.2d 405 (1969).

* The Appendix to the district court opinion is printed in full in 380

F.Supp. at page 414 et seq.

37

unable to find, any authority which supports plaintiff's

contention that unreasonable delay in violation of the dic-

tates of the Administrative Procedure Act renders de-

fendant liable in damages under the Tort Claims Act.

On the contrary, it is the opinion of the Court that the

action of the agency in allocating its enfrocement case

load was an act of discretion within the meaning of 28

U.S.C. $2680(a). Eastport Steamship Corp. v. United

States, 372 F.2d 1002, 178 Ct.Cl. 599 (1967); Coastwise

Packet Co. v. United States, 398 F.2d 77 (C. 1, 1968),

cert. den’d 393 U.S. 937, 89 S.Ct. 300, 21 L.Ed.2d 274

(1968).

While the length of the delay in this case was deplorable,

it is the Court’s opinion that it was just this type of gov-

ernmental liability which the Congress sought to avoid by

means of the exception contained in 28 U.S.C. §2680.’

For the foregoing reasons, it is ordered that judgment

issue in favor of defendant, United States of America, and

against plaintiff, J. H. Rutter—Rex Manufacturing Com-

pany, dismissing the claim of plaintiff with prejudice, each

party to bear its own costs.

71t is the Court’s opinion that the creation of tort liability on the

part of the government for delay by its agencies in carrying out their

functions would open our already overloaded federal courts to a very

substantial number of disgruntled citizens seeking damages for delays

of as many sorts as could be conjured up in the minds of ingenious

lawyers.

38

APPENDIX C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

Civil Action No. 71-1960 Section “H”

J. H. RUTTER REX MANUFACTURING COMPANY,

INC,

VS.

UNITED STATES OF AMERICA

JUDGMENT

The Court having directed that judgment be entered in

this matter in accordance with the Court’s written opinion

order on file herein;

IT IS ORDERED, ADJUDGED AND DECREED that

there be judgment herein in favor of defendant, UNITED

STATES OF AMERICA, and against plaintiff, J. H.

RUTTER REX MANUFACTURING COMPANY, INC.,

dismissing said plaintiff's claim with prejudice, each party

to bear its own costs.

New Orleans, Lousiana, this 30th day of April, 1974.

s R. BLAKE WEST

United States District Judge

Date of entry May 1, 1974.

39

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

October Term, 1974

No. 74-2366

D. C. Docket No. CA 71-1960 “H”

J. H. RUTTER REX MANUFACTURING

COMPANY, INC.,

Plaintiff-Appellant,

versus

UNITED STATES OF AMERICA,

Defendant-Appellee.

Appeal from the United States District Court for the

Eastern District of Louisiana

Before GIBSON,* THORNBERRY and AINSWORTH,

Circuit Judges.

JUDGMENT

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Eastern District of Louisiana, and was argued by counsel;

* Of the 8th Circuit, sitting by designation.

40

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same is

hereby, affirmed;

It is further ordered that plaintiff-appellant pay to

defendant-appellee, the costs on appeal to be taxed by the

Clerk of this Court.

June 30, 1975

Issued as Mandate: Oct. 3, 1975

41

APPENDIX E

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

TO ALL COUNSEL OF RECORD

No. 74-2366—J. H. Rutter Rex Manufacturing Co., Inc.

vs. U. S. A.

Dear Counsel:

This is to advise that an order has this day been entered

denying the petition( ) for rehearing, and no member of

the panel nor Judge in regular active service on the Court

having requested that the Court be polled on rehearing

en bane (Rule 35, Federal Rules of Appellate Procedure;

Local Fifth Circuit Rule 12) the petition‘ ) for rehearing

en banc has also been denied.

See Rule 41, Federal Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

EDWARD W. WADSWORTH, Clerk

ec: Mr. Daniel Lund

Messrs. James D. Carriere

Gerald J. Gallinghouse