Petition — Lurch v. United States
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JAN 9 1984
. ALEXANDER L. sTBvag.
at CLERK
In The
Supreme Court of the United States
October Term 1983
RAYMOND LURCH, PETITIONER
v.
UNITED STATES OF AMERICA,
v.
REGENTS OF THE UNIVERSITY OF NEW
MEXICO AND RALPH KAPLAN, M.D.
PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
Bruce P. Moore
Attorney at Law
P.O. Box 9527
Moscow, ID 83843
(208) 882-1681
Paul S. Cronin
Attorney at Law
Duhigg & Cronin
P.O. Box 303
Albuquerque, NM 87103
(505) 243-3751
|
QUESTIONS PRESENTED
1. Whether the independent contractor exclusion of the
Federal Tort Claims Act can be held applicable without regard
to existent facts concerning day-to-day supervision by the
Federal Government of the person or entity alleged to be an
independent contractor?
2. Whether the day-to-day supervision of operations by the
Federal Government test for determining if a person or entity
is an independent contractor for purposes of the Federal Tort
Claims Act should be modified as it is applied to the profes-
sional activities of physicians?
3. Whether the independent contractor exclusion of the
Federal Tort Claims Act is applicable to tortious acts or omis-
sions of a physician in the performance of his duties for the
Department of Medicine and Surgery of the Veterans Ad-
ministration in a Veterans Administration hospital?
Pa
PARTIES TO THE PROCEEDING
The parties here listed are all of the parties to this action.
The Veterans Administration is the particular agency of the
United States involved.
TABLE OF CONTENTS
Page
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ase sak 1.6994 ns oie 0.6 od 2 So KR a l
Statutory provisions involved ................ceeeeeees 2
I is oak oawa bd 6 0s ¥ s0s end-e.0e een eae 4
Reasons For Granting the Petition ..................... 7
a Caeee CoeE Sie ih a wep Wiss weds 606s vob. 14
Appendix A, Opinion of the Court of Appeals .......... Al
Appendix B, Judgment of the Court of Appeals.......... Bl
Appendix C, Decision of the District Court............. Cl
Appendix D, Judgment of the District Court............ D1
TABLE OF AUTHORITIES
Cases:
Alden v. Providence Hospital, 127 U.S. App.D.C. 214,
Pe or eee 10
Azad v. United States, 388 F.2d 74 (8th Cir. 1968) ........ 9
Cody v. Ribicoff, 289 F.2d 394 (8th Cir. 1961) ........... 9
Flemming v. Haycke, 284 F.2d 546 (9th Cir. 1960)........ 9
Flynn v. United States, 631 F.2d 678 (10th Cir. 1980) ..... 8
Logue v. United States, 412 U.S. 521 (1973) ........... 4,8
Seneris v. Haas, 45 Cal.2d 811, 291 P.2d 915 (1955)...... 9
Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978). . .10
United States v. Brown, 348 U.S. 110 (1954) ............ 9
United States v. Muniz, 374 U.S. 150 (1963)............. 9
United States v. Orleans, 425 U.S. 807 (1976) ........ 4,7,8
Walker v. United States, 549 F.Supp. 973
PT cco cin dacticvapaauethies caus ss 9
Wood v. Standard Products Co., 671 F.2d 825 (4th Cir.
DU WiwhtapawkereUnds dew eeuW cat oankscees beeen 8
Federal Statutes:
Federal Tort Claims Act. 60 Stat. 843 et seq., as
amended 62 Stat. 933, as amended,
Sec. 410(a), codified 28 U.S.C. Sec 1346(b) .. . .2,4,6
iv
Sec. 402, codified at 28 U.S.C. Sec. 2671 ...... 2,4,6
Sec. 410(a), codified at 28 U.S.C. Sec. 2674 ....... 3
P.L. 89-31lm 79 Stat. 1156, codified at 38
See MC MPRIED oc kv ecseccecsace 3,4,5,6,7,10,11
ES OE, ts nin 6 a nie vd 60d cmb web eeewe l
ss a cl Uc a keeabpbeeemeeeeue 6
I I, oc oko pice ccbetudcewseeeca 11
ro CTL we neeks abana cee 10
Se ce ece se celee ne eabeeed 10
ee Selb sbi keene ROU 11
State Statutes and Constitutional Provisions:
I nn oe cn sdsbuv se csnete-es 13
New Mexico Medical Malpractice Act, Sec.
41-5-14 et seq. N.M.S.A. 1978 .........ccccccess 12
er 12
ee I cubs vececcnsoundwe 12
OE oo. ns cvecececueuauees 13
ee, MDs cee kus cceves seavbeeea 13
Miscellaneous:
B. Brown, Risk Management For Hospitals (1979) ....... 12
Canon 5, American Bar Association, Model Code of Profes-
sional Responsibility (1969)... .. 0.0.6... cee eee 7
Conf. Rpt. No. 1201, 89th Cong., Ist Sess. (1965)....... 10
Principles of Medical Ethics, Sec. 6, reprinted in Opinions
and Reports of the American Medical Association
I, a oe vedas kee keenawes 7
Veterans Administration, Administrator of Veterans Affairs,
Annual Report 1982 (1982) .... 2... occ eee ll
Veterans Administration, Administrator of Veterans Affairs,
Annual Report 1980 (1980) ... 2.2... eee 11
Veterans Administration, Administrator of Veterans Affairs,
Annual Report 1979 (1979) 2.0.0... eee 11,12
No.
In The
Supreme Court of the United States
October Term 1983
RAYMOND LURCH, PETITIONER,
v.
THE UNITED STATES OF AMERICA
v.
REGENTS OF THE UNIVERSITY OF NEW
MEXICO AND RALPH KAPLAN, M.D.
PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
Bruce P. Moore, attorney at law, on behalf of Raymond
Lurch petitions for a writ of certiorari to review the judgment
of the United States Court of Appeals for the Tenth Circuit in
this cause.
OPINIONS BELOW
The opinion of the court of appeals (App. A, Al-A16, infra) is
reported at 719 F.2d 333. The decision of the district court (App.
C. C1-C4, infra) is not reported.
JURISDICTION
The judgment of the Court of Appeals was entered on Oc-
tober 12, 1983. (App. B. 1b). The jurisdiction of this Court is
invoked under 28 U.S.C. Sec. 1254(1).
STATUTORY PROVISIONS INVOLVED
1. Section 410(a) of the Federal Tort Claims Act, 60 Stat.
843-4, as enacted into present form at 62 Stat. 933, as amend-
ed, codified at 28 U.S.C. Sec. 1346(b) provides:
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, ac-
curuing 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 Government while acting within the
scope of his office or employment, under cir-
cumstances where the United States, if an private
person, would be liable to the claimant in accor-
dance with the law of the place where the act or
omission occurred.
2. Section 402 of the Federal Tort Claims Act, 60 Stat.
842-3, as enacted into present form at 62 Stat. 982-3, codified
at 28 U.S.C. Sec. 2671, in relevant part provides:
As used in this chapter and sections 1346(b) and
2401(b) of this title, the term ‘‘Federal agency”’ in-
cludes the executive departments, the military
departments, independent establishments of the
United States, ard corporations primarily acting as
instrumentalities or agencies of the United States,
but does not include any contractor with the United
States.
**Employee of the government”’ includes officers or
employees of any federal agency, members of the
military or naval forces of the United States,
members of the National Guard while engaged in
training or duty under section 316, 502, 503, 504,
or 505 of title 32, and persons acting on behalf of a
federal agency in an official capacity, temporarily
or permanently in the service of the United States,
whether with or without compensation.
3. Section 410(a) of the Federal Tort Claims Act, 60 Stat.
843-4, as enacted into present form at 62 Stat. 933, codified at
28 U.S.C. Sec. 2674, provides in relevant part:
The United States shall be liable, respecting the pro-
visions of this title relating to tort claims, in the
same manner and to the same extent as a private in-
dividual under like circumstances, but shall not be
liable for interest prior to judgment or for punitive
damages.
4. Section 6(a) of Pub. L. 89-311, 79 Stat. 1156 being
codified as 38 U.S.C. Sec. 4116(a) provides:
The remedy —
(1) against the United States provided by sections
1346(b) and 2672 of title 28, or
(2) through proceedings for compensation or
other benefits from the United States as provided by
any other law, where the availability of such
benefits precludes a remedy under section 1346(b)
or 2672 of title 28,
for damages for personal injury, including death,
allegedly arising from malpractice or negligence of
a physician, dentist, podiatrist, optometrist, nurse,
physician assistant, expanded-function dental aux-
iliaries, pharmacist, or paramedical (for example,
medical and dental technicians, nursing assistants,
and therapists) or other supporting personnel in fur-
nishing medical care or treatment while in the exer-
cise of such person’s duties in or for the Department
of Medicine or Surgery shall hereafter be exclusive
of any other civil action or proceeding by reason of
the same subject matter against such physician, den-
tist, podiatrist, optometrist, nurse, physician assis-
tant, expanded-function dental auxiliaries, phar-
macist, or paramedical or other supporting person-
nel (or such person’s estate) whose act or omission
gave rise to such claim.
STATEMENT OF THE CASE
1. The United States, its agencies, officers and employees
may not be sued in tort for any act or omission within the
scope of duty absent an express waiver of sovereign immuni-
ty. The Federal Tort Claims Act is a limited waiver of
sovereign immunity. From its inception the Federal Tort
Claims Act has contained an independent contractor exception
which maintains sovereign immunity relative to the tortious
acts or omissions of independent contractors or their
employees. 28 U.S.C. Sec. 2671. Whether a person or entity
is an employee or agent of the United States or an independent
contractor is a question of federal law. Logue v. United States,
412 U.S. 521, 528 (1973). This Court is United States v.
Orleans, 425 U.S. 807 (1976) specifically held that ‘‘(a)
critical element in distinguishing an agency from a contractor
is the power of the Federal Government ‘to control the detail-
ed physical performance of the contractor. Logue v. United
States, 412 U.S. 521, 528 (1973).’’’ 425 U.S. at 814. From
that critical element devolved the test of whether the ‘‘day-to-
day operations (of the contractor) are supervised by the
Federal Government.”’ 425 U.S. at 815. Additionally, 38
U.S.C. Sec. 4116(a) provides that the remedy against the
United States for damages for personal injury as a result of a
physician’s malpractice when performing duties in or for the
Department of Medicine and Surgery of the Veterans Ad-
ministration shall be exclusive.
2. Plaintiff filed suit in the United States District Court for
the District of New Mexico against the United States for
damages incurred as a result of surgery, negligently perform-
ed upon him, while a patient at the Veterans Administration
Hospital in Albuquerque, New Mexico on May 20, 1976,
jurisdiction being based on 28 U.S.C. Sec. 1346(b). The
United States answered and claimed, inter alia, that the
. A
surgeon who performed the surgery on Plaintiff was an
employee of an independent contractor. The United States,
also, filed a third party claim against that surgeon, Ralph
Kaplan, M.D., and the medical school, the University of New
Mexico School of Medicine, said to employ him. The parties
stipulated that the question of the doctor’s employment status
and related issues would be bifurcated from the remaining
issues of malpractice, injury and damages. On October 20,
1980 the District Court found that the doctor was an employee
of the University of New Mexico, which was an independent
contractor, and on that day judgment was entered dismissing
Plaintiff's First Amended Petition. (Apps. C and D, infra).
In the District Court Petitioner urged that in those instances
in which the employment status of a physician’ is at issue, it is
of no consequence that he is not subject to direct control by
others in the performance of his professional skills, that he is
free to perform any procedure within his realm of expertise,
that the decision to perform any particular procedure is solely
between he and his patient, and that he is not subject to control
in his selection of methods or equipment to be used. Rather,
Petitioner urged that the detailed control test should be focus-
ed upon the areas of medical and surgical practice, and ac-
tivities necessarily incident thereto, that can be supervised and
controlled. Petitioner further urged that 38 U.S.C. Sec.
4116(a) vitiated the effect of the independent contractor ex-
ception of the Federal Tort Claims Act for the torts of medical
personnel occurring within a Veterans Administration
hospital.? The District Court, nonetheless, found that for all
'The term physician includes those with sufficient postgraduate training
to practice whatever specialty, if any, the doctor holds himself out to prac-
tice. Thus, interns and residents who are undergoing training and are sub-
ject to direct control are excluded.
Petitioner, also, raised an issue of equitable estoppel asserted to
foreclose reliance by the United States on the independent contractor ex-
ception of the Federal Tort Claims Act; it is not before the Court.
administrative and tax purposes Dr. Kaplan was carried as an
employee of the University of New Mexico, that he perform-
ed work at the Veterans Administration Hospital pursuant to a
contract between the Veterans Administration and the Univer-
sity of New Mexico, and that Dr. Dan Smith, Chief of
Surgical Services at the hospital, did not direct or control the
details of the provision of medical and surgical services by
Dr. Kaplan to Petitioner, such as whether to invoke surgery,
the procedure to be used or the instruments or equipment to be
utilized. (App. C., infra, at C3). The District Court reached
Petitioner’s contentions regarding 28 U.S.C. Sec. 4116(a) on-
ly by implication. (App. C infra, at C4).
Upon appeal the Court of Appeals agreed that the details of
the provision of medical and surgical services were, and could
only be, governed, directed and controlled by the treating
physician’s exercise of his independent judgment and skills.
(App. A., infra, at A8). With control of the detailed physical
performance of a physician’s tasks viewed as resting with the
physician, the Court of Appeals held that the existence of the
contract between the Veterans Administration and the Univer-
sity of New Mexico, pursuant to which Dr. Kaplan was for all
administrative and tax purposes treated as an employee of the
University of New Mexico, was of itself sufficient to uphold
the decision of the District Court that the independent contrac-
tor exception to the Federal Tort Claims Act shielded the
United States from liability. (App. A., infra, at A8).
The Court of Appeals further held that the explicit reference
to 28 U.S.C. Sec. 1346(b) and 2672 in 38 U.S.C. Sec.
4116(a) made the independent contractor exception of the
Federal Tort Claims Act. 28 U.S.C. Sec. 2671, applicable to
causes of action based upon tortious conduct by medical per-
sonnel when performing duties in or for the Department of
Medicine and Surgery of the Veterans Administration. (App.
A., infra, at Al2-13). The Court of Appeals further reasoned
that the use of the phrases ‘‘within the scope of such person’s
employment’’ and ‘‘that the employee whose act or omission
gave rise to suit was not acting within the scope of such per-
son’s office or employment,’’ to be found at 28 U.S. Secs.
4116(b) and 4116(d) evince A Congressional intent not to ex-
pand the protection of 28 U.S.C. Sec. 4116(a) to other than
Federal officers or employees. (App. A., injra, at Al3).
REASONS FOR GRANTING CERTIORARI
This case presents important questions concerning the ap-
plication of the ‘‘power of the Federal Government ‘to control
the detailed physical performance of the contractor’’’ test for
determining whether a party is an officer, employee or agent
of the United States or an independent contractor. United
States v. Orleans, supra, 425 U.S. at 814. These questions
arise because ‘‘the detailed physical performance of the con-
tractor’ and his duties cannot be controlled due to the actor’s
professional, ethical obligation to exercise his own skill and
judgment.’ This case, also, presents the question of whether
the remedy for the medical malpractice of a physician who ad-
mittedly is the employee of an independent contractor, occurr-
ing within a Veterans Administration hospital during the
course of a surgical procedure performed for the Department
of Medicine and Surgery of the Veterans Administration is
that of the Federal Tort Claims Act, irrespective of the extent
of Federal control of the physicians’s activities, pursuant to 38
U.S.C. Sec. 4116(a).
1. In United States v: Orleans, supra, the Court set forth
the critical test for determining whether a person or entity that
ordinarily cannot be considered as an employee or agent of the
United States nonetheless may be considered as an employee
or agent for purposes of the Federal Tort Claims Act. Suc-
cinctly stated, the test in terms of the case is whether the
Federal Government had the power to control the detailed
*See Principles of Medical Ethics, Sec. 6, reprinted in Opinions and
Reports of the American Medical Association Judicial Council, 5 (1977).
These same principles apply with equal force to all other professions in
which the skill and judgment of the practitioners traditionally have not
been subject to direct control. See Canon 5, American Bar Association,
Model Code of Professional Responsibility (1969), as amended.
physical performance of the duties of Dr. Kaplan or whether
the Federal Government supervised the ‘‘day-to-day opera-
tions’’ of Dr. Kaplan. 425 U.S. at 814, 815. The Court of Ap-
peals recognized that literal application of that test would make
it ‘‘doubtful whether a physician could ever be found to be a
federal employee under the FTCA.”’ It then noted the logical
need to either modify the control test or develop a different
test regarding physicians. (App. A., at A8). It, however,
declined to do either, holding instead that the contract, and its
application, between the Veterans Administration and the
University of New Mexico was sufficient to support a finding
that Dr. Kaplan was not an employee of the Veterans Ad-
ministration. (App. A., at A&).*
The existence of a contract and its application, without
regard to facts concerning day-to-day supervision, is directly
contrary to the holdings in United States v. Orleans, supra,
and Logue v. United States, supra. There simply are no cases
since 1976 out of any Federal court which do not apply the
day-to-day supervision test. Even the Tenth Circuit when fac-
ed with vocations not having a built-in ethical obligation to ex-
ercise independent judgment rigidly gives application to the
day-to-day supervision test. E.g., Flynn v. United States, 631
F.2d 678 (10th Cir. 1980). Only a few courts have been faced
with the necessary tension between the day-to-day supervision
test and the medical practitioner’s exercise of independent
judgment, and they have opted to conform completely to the
day-to-day supervision test, notwithstanding the patent inap-
Dlicability of the test Wood v. Standard Products Co., 671
‘The Court of Appeals, also, held that the indicta of control noted by
Petitioner amounted to no more than ‘‘pervasive regulation of Dr. Kaplan
by the V.A. hospital,’ and was insufficient to avoid the independent con-
tractor exception of the Federal Tort Claims Act. (App. A., at —n. 9).
That dicta disregarded testimony by Chief of Surgical Services at the
hospital that Dr. Kaplan was under his supervision, subject to Dr.
Kaplan's duty to exercise his skills and judgment in his specialty. We are
inclined to view the Court of Appeals’ dicta as a further example of confu-
sion engendered by rigid adherence to the day-to-day control test in this
unusual context.
F.2d 825 (4th Cir. 1982; Walker v. United States, 549 F. Supp.
973 (W.D. Okla. 1982).° Thus, the holding of the Court of Ap-
peals in general and particular applications stands in complete
isolation. This Court should undertake to rectify this dangerous
precedent, and in that task should state a test that can be applied
to physicians.
2. The Court in United States v. Brown, 348 US. 110
(1954), faced the question of the viability of a Federal Tort
claim premised upon the use of a defective tourniquet during
knee surgery at a Veterans Administration hospital. The Court
held that the Federal Tort claim was actionable, couching its
holding in terms of responsibility of the hospital. In United
States v. Muniz, 374 U.S. 150 (1963), the Court noted that the
Federal Government had ‘‘clearly waived’’ soverign immuni-
ty for ‘‘negligent treatment in government hospitals.’’ 374
U.S. at 155 n.9. Though the errant physicians in those cases
were government employees, the language utilized by the
Court in the opinions is no so limited. At approximately the
same time as Brown and slightly earlier Muniz state courts
began developing the doctrine of ostensible or apparent agen-
cy to hold hospitals liable for the tortious acts of physicians
who were not employees but with whom there was a signifi-
cant hospital-physician relationship. See Seneris v. Haas, 45
Cal. 2d 811, 291 P.2d 915, 926-7 (1955). Hospitals operated
by the United States and specifically those of the Veterans Ad-
ministration, differ greatly from the usual hospitals to be
found in this country. The class of persons to be served is
limited by statute; the degree and extent of medical care of-
fered is set by statute; the patient has no contract with the
treating physician and very few physicians who might qualify
‘We must note that similar issues arise under the Social Security Act and
the Internal Revenue Code. Under those acts, the courts hav e held that the
determinaton of whether one is an independent contractor cannot be based
on factors which are controlled only by a practitioner's ethical obligation
to exercise independent judgment. Azad v. United States, 388 F.2d 74, 77
(8th Cir. 1968); Cody v. Ribicoff, 289 F.2d 394, 398 (8th Cir. 1961);
Flemming v. Haycke, 284 F.2d 546, 550 (9th Cir. 1960).
10
are permitted to practice in such hospitals, and if they do prac-
tice, it is not for the benefit of their private patients.* With
these factors considered the language in Muniz quoted above
is explicable. The opinion of the Court of Appeals effectively
reinstitutes a distinction between two classes of physicians at
government hospitals — those overtly employed and those not
— which can be ascertained only by those in the ad-
ministrative or personnel departments of the hospitals, but
certainly not by the patients effected.
3. With the rather large number of medical malpractice ac-
tions brought against the United States as a result of treatment
in Veterans Administration hospitals, 38 U.S.C. Sec. 4116(a)
appears somewhat ignored. By its terms this section is ap-
plicable to provision of medical care by a physician in the ex-
ercise of the physician’s duties in and for the Department of
Medicine and Surgery. Because 38 U.S.C. Sec. 4116(a) is
clear and unambiguous on its face, the Court of Appeals
should not have resorted to statutory interpretation. E.g., Ten-
nessee Valley Authority v. Hill, 437 U.S. 153 (1978).’ But if
reference to legislative intent be necessary, the legislative
history of 38 U.S.C. Sec. 4116(a) leaves no doubt that Con-
gress intended to extend Federal Tort Claims Act responsibili-
ty to all medical personnel performing duties in or for the
Veterans Administration. Conf. Rpt. No. 1201, 89th Cong.,
Ist Sess. (1965). We, also, think if clear that Congress was
*The relationship between the usual hospital and its staff physicians is
explored in Alden v. Providence Hospital, 127 U.S.App.D.C. 214, 382
F.2d 163 (1967), per Burger J. concurring in part and dissenting in part.
’The Court of Appeals’ interpretation that the reference to 28 U.S.C.
Secs. 1346(b) and 2672 in 38 U.S.C. Sec. 4116(a) incorporates the in-
dependent contractor exclusion ignores the fact that the reference refers to
the remedy and nothing more. The conclusions reached by the use of
phrases related to employment in 38 U.S.C. Secs. 4116(b) and 4116(c)
misses the point that those subsections have applicability to certain limited
factual situations and do nothing to give meaning to the terms ‘‘employee"’
or ‘‘employment,’’ nor do they limit governmental responsibility for
medical malpractice occurring in Veterans Administration hospitals.
aware of developments in the field of hospital malpractice and
liability, at least as expressed by this Court. See Subpart 2,
supra.
Regardless of Petitioner’s view of the pertinence of 38
U.S.C. Sec. 4116(a), the sheer size of the Veterans Ad-
ministration medical and hospital services, with the inevitable
occasional medical malpractice and the proportionately large
volume of Federal Tort Claims Act actions brought to redress
such grievances. (see subpart 4 hereof, infra), whether real or
imagined, requires explication of the relationship of 38
U.S.C. Sec. 4116 to the principal body of the Federal Tort
Claims Act.
4. The ‘‘complete medical and hospital service’’ of the
Veterans Administration mandated by 38 U.S.C. Sec. 4101(a)
is a mammoth undertaking. In fiscal 1982 well in excess of
$6,000,000,000 was spent on the care and treatment of
1,272,151 patients. A total of 340,842 surgical procedures
were performed in 136 of the Veterans Administration’s 172
medical centers. Those surgical procedures were performed
by 778 full time surgeons, 1,537 part-time surgeons, and
2,567 residents. Veterans Administration, Administrator of
Veterans Affairs, Annual Report 1982, 13, 21(1982). Though
the Veterans Administration ceased reporting information on
claims in its Annual Reports after 1980, we note that in fiscal
1978 there were 450 claims for patient compensation, in fiscal
1979 there were 532 such claims, and in fiscal 1980 there
were 643 such claims. During this period the number of
claims per 100 physicians rose from 2.54 in fiscal 1978, to
3.12 in fiscal 1979, and to 3.49 in fiscal 1980. Veteran’s Ad-
ministration, Administrator of Veterans Affairs, Annual
Report 1979, 34 (1979); Veterans Administration, Ad
ministrator of Veterans Affairs, Annual Report 1980, 41
(1980). There is no reason to suppose that this trend has
abated. These figures are of interest because within the class
of part-time surgeons are to be found those surgeons who are
operating in Veterans Administration hospitals pursuant to
contracts entered into under authority of 38 U.S.C. Sec.
12
4117, such as Dr. Kaplan.® It is patently obvious that, if the
opinion of the Court of Appeals is allowed to stand, an in-
creasing proportion of the medical and surgical care at
Veterans Administration medical centers will be performed
by physicians action under contracts for the provision of
medical or surgical services.
This situation would likely have a number of results that are
not consistent with the general statutory scheme governing the
Veterans Administration, the most important of these being
that varying degrees of control over the provision of medical
and surgical services at Veterans Administration facilities
would be exercised by parties other than the Veterans Ad-
ministration. While the Veterans Administration is engaged in
certain risk management strategies (see Annual Report 1979,
supra, at 34-5), insurance carriers insuring physicians and
hospitals may have their owns different risk management
techniques. Those techniques can infringe upon control of the
degree and types of care to be provided. See generally B.
Brown, Risk Management For Hospitals (1979). We, also,
note that the opinion of the Court of Appeals will necessitate
recourse to state law for redress of injuries occurring in
Veterans Administration hospitals. As a general matter that
may be a desirable; however, it will mean that state courts and
administrative bodies will indirectly influence the types and
quality of care that will be provided at Veterans Administra-
tion medical centers. For instance in New Mexico all claims
against qualified health providers® must initially be submitted
to the New Mexico Medical Review Commission, which
reviews the claim, holds a hearing and issues a decision.
Thereafer, the claim may be injected into the state’s judicial
system. See Sec. 41-5-14 et seq. N.M.S.A. 1978. As a matter
of necessity that will entail review of a procedure occurring
*Though our discussion emphasizes surgeons, it is equally pertinent to
non-surgical specialties.
*The term is defined at Sec. 41-5-3(A) and Sec. 41-5-5 N.M.S.A. 1978,
but it basically includes health care providers who carry at least $100,000
professional liability coverage.
13
within and for the Veteran's Administration by no less than
four attorneys and three physicians who have no relationship
with the Veteran’s Administration. Secs. 41-5-14 and 17
N.M.S.A. 1978. We decline to speculate on the additional
number that may be involved if the case goes to court. We
think it inconceivable that this magnitude of review would not
have a dramatic impact on the quality and type of care provid-
ed in Veterans Administration facilities, all of which would be
completely beyond the control of the Federal government. We
note, also, that because of the Privacy Act physicians denfen-
ding themselves before state tribunals may nave difficulty ob-
taining release of the pertinent medical records from the
Veterans Administration.'® Finally, the Federal Tort Claims
Act provides that claims filed in court will be tried before the
court without a jury and attorneys representing plaintiffs may
obtain no more than 25% of any award as fees. In the New
Mexico courts jury trials are available upon request (N.M.
Const. art. II, sec. 12), and the usual contingency contract
calls for the attorney to receive 33 1/3% of any award, though
in medical malpractice cases contingency fee contracts for the
attorney to receive 40% of the award are far from unusual
We think it clear that these factors fly in the face of the
Federal statutory scheme for the disposition of medical
malpractice claims premised on events in Veterans Ad-
ministration medical facilities.
‘Petitioner was forced to file an action in District Court to obtain the
release of his own medical records from the Veterans Administration.
Lurch v. Veterans Administration, D.N.M. No. CIV 77-129 M.
CONCLUSION
For the foregoing reasons, the opinion of the Court of Ap-
peals effectively eliminates the day-to-day supervision of the
contractor test applicable to the application of the independent
contractor exception of the Federal Tort Claims Act whenever
the performance of a professional task is at issue, and it
misconstrues legislation intended by Congress to avoid the
issue here presented. Therefore, this petition for certiorari
should be granted.
Respectfully submitted,
BRUCE P. MOORE
Attorney at Law
P.O. Box 9527
Moscow, ID 83843
(208) 882-1681
PAUL'S. CRONIN
Attorney at Law
Duhigg & Cronin
P.O. Box 303
Albuquerque, NM 87103
(505) 243-3751
Al
APPENDIX A
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
RAYMOND LURCH, )
Plaintiff-Appellant, )
)
v. ) No. 80-2226
UNITED STATES OF AMERICA, )
Defendant-Third Party )
Plaintiff-Appelle, )
)
V. ) FILED
THE REGENTS OF THE ) — United States Court of
UNIVERSITY OF NEW MEXICO ) Appeals/Tenth Circuit
and RALPH KAPLAN, ) Oct. 12, 1983
)
Third Party Defendants. ree eae Sree
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW MEXICO
(D. C. No. CIVIL-79-034C)
Bruce P. Moore, Moscow, Idaho (Paul S. Cronin, Duhigg &
Dronin, Albuquerque, New Mexico, were also on the brief
for Plaintiff-Appellant)
L. D. Harris, Assistant United States Attorney (R. E. Thomp-
son, United States Attorney, Albuquerque, New Mexico, was
also on the brief) for Defendant-Appellee.
Before HOLLOWAY, BREITENSTEIN, and LOGAN, Cir-
cuit Judges
HOLLOWAY, Circuit Judge
This is a suit under the Federal Tort Claims Act claiming
that negligence by a neurosurgeon in the employ of the
Government at a Veteran’s Administration Hospital, while at-
tempting surgical relief for severe facial pain, produced total
loss of plaintiff Lurch’s hearing in his left ear with a return of
the pain symptoms sought to be relieved.
The central issue is whether the physician who treated the
plaintiff was an employee of the Government for purposes of
the FTCA. The district court held that the physician was not a
federal employee because he performed neurological services
for the Veteran’s Administration Hospital pursuant to a con-
tract between the Veteran’s Administration and the University
of New Mexico School of Medicine. I R. 212. The court
dismissed the complaint against the Government and also
dismissed as moot the Government’s third part complaint
against the Regents and Dr. Kaplan. Plaintiff appeals.
I
On September 17, 1975 the plaintiff, Raymond Lurch,
visited the Veterans’ Administration Hospital in Albuquer-
que, New Mexico, because he was suffering from severe pain
on the left side of his face. Dr. Kaplan examined him there
and diagnosed a secondary trigeminal neuralgia.' III R. 8.
The plaintiff visited Dr. Kaplan on two subsequent occasions,
and they discussed the possibility of surgery.
On May 19, 1976 plaintiff was admitted to the V.A.
Hospital with ‘‘terrible facial pain.’’ An informed consent
form was signed that day, and the following day Dr. Kaplan
performed surgery. The operation was designed to sever the
branches of the fifth cranial nerve that provide facial sensa-
tion.* After surgery, the pain returned and plaintiff eventually
lost all hearing in his left ear. Plaintiff alleged that this was
caused by negligent injury to his eighth cranial nerve during
the operation.
On March 4, 1977 plaintiff sued the Veteran’s Administra-
tion under the Freedom of Information Act (FOIA) to obtain
all medical and administrative records concerning his care and
treatment. The Veteran’s Administration subsequently settled
this suit by relinquishing all administrative records to plain-
tiff. IR. 68.
'This pain was secondary to the trauma caused by an earlier accident
with the fan belt of a car in which plaintiff lost his left eye. III R. 5-8.
Trigeminal neuralgia is defined as excrutiating episodic pain in the area
supplied by the trigeminal nerve, (i.e., the fifth cranial nerve). It is often
precipitated by stimulation to well defined trigger points. Dorland’s Il-
lustrated Medical Dictionary 1038 (25th ed. 1974). At times talking,
eating, or brushing the teeth can serve as a trigger. | Textbook of Medicine
612 (ed. P. Beeson & W. McDermott, 14th ed. 1975).
?The procedure is called a posterior fozza rhizotomy. III R. 18.
A4
In October 1977 plaintiff filed an administrative claim for
damages. The claim was not acted on by the Government and
hence was deemed denied.’ In January 1979 the plaintiff
brought suit against the United States under the FTCA. IR. 1.
After filing an answer to plaintiff's first amended complaint,
the United States joined the Regents of the University of New
Mexico and Dr. Kaplan as third party defendants. The United
States moved for summary judgment against the plaintiff,
arguing that Dr. Kaplan was not a Government employee but
the employee of an independent contractor, thereby insulating
the United States from liability under the FTCA. See 28
U.S.C. §1346(b) (United States liable for negligence of its
employees); id. §2671 (independent contractors are not
employees). This motion was denied.
Thereafter the parties stipulated that the district court could
decide without an evidentiary hearing whether Dr. Kaplan
was an employee of the Government. The issue was submitted
on the contract, depositions and affidavits. The court held that
Dr. Kaplan was not a federal employee. Rather, he was the
employee of the University of New Mexico, an independent
contractor, and the United States could not be liable. The
court also determined that the third party complaint of the
Government was therefore moot and should be dismissed.
The basis of the district court’s decision was that the V.A.
Hospital did not direct or control Dr. Kaplan’s medical treat-
ment of the plaintiff. Additionally, the court found that the
contract between the V.A. and the University of New Mexico
provided that persons rendering services to the V.A. under the
c
3Bringing an administrative claim is a prerequisite before suit can be
brought in United States District Court under the FTCA. 28 U.S.C.
§2675. The administrative claim must be denied by the agency either in
writing or by failure to make a final disposition within six months of filing
before a claimant can sue. This requirement is jurisdictional and cannot be
waived. Three-M Enterprises v. United States, 548 F.2d 293 (10th Cir.
1977). There may have been a three-months extension of the period for ad-
ministrative action on this claim. See infra, note 13.
\
contract ‘‘were not to be considered Veterans’ Administration
employees for any purpose."’ I R. 212.¢ Under the contract
the University assumed full responsibility for protection of
employees in furnishing services, such as providing for in-
surance and Social Security Payments, and since late 1975 the
University of New Mexico paid Dr. Kaplan for work he did at
the V.A. Hospital. I R. 212.
In addition, the district court found that the medical services
could be provided by one or more neurosurgeons at the discre-
tion of the School of Medicine of the University. After
November 20, 1975, Dr. Kaplan received his compensation
or pay check from the University and he did not receive any
payment from the Veterans Administration Medical Center
for services performed in May, June or July, 1976. IR. 212.
The court further found that the Chief of the Surgical Service
of the V.A. Medical Center did not influence the practice of
the neurosurgeons from the University who were providing
services to the V.A. Medical Center and the surgeons were
free to perform any surgery at the Center considered within
the realm of neurological surgery. The Chief of Surgery of the
V.A. Medical Center did not direct or control Dr. Kaplan in
performing the surgery on plaintiff and could not and did not
direct Dr. Kaplan as to the surgical methods or instruments to
be used in any surgery. I R. 213.
Of the findings, which we have outlined above, plaintiff
challenges only two — findings 14 and 17 — as not being sup-
ported by the record. Appellant’s Brief in Chief at 6. Those
were findings respectively as follows:
14. The services could be provided by one or more
neurosurgeons at the discretion of the School of Medicine,
University of New Mexico.
** *
17. The Chief of the Surgical Service, Veterans Ad-
ministration Medical Center, did not influence the practice
‘This contract was entered into under the authority of 38 U.S.C. §4117.
A6
of the neurosurgeons from the University of New Mexico
who were providing services to the Veterans Administra-
tion Medical Center and said surgeons were free to perform
any surgery at the Veterans Administration Medical Center
that was considered within the realm of neurological
surgery.
IR. 212-13.
Essentially the plaintiff argues that the district court
erroneously concluded that Dr. Kaplan was not an employee
of the United States. It is plaintiff's position that the control
test as generally applied is not the appropriate test for deter-
mining if a physician is a federal employee. Should we reject
this, plaintiff has two alternative arguments. He further con-
tends: (1) that 38 U.S.C. §4116(a) creates an exception for
physicians to the statutory rule that the United States is not
liable for the negligence of independent contractors; and (2)
that the United States should be equitably estopped from
asserting the independent contractor defense. We are not per-
suaded by plaintiff's arguments and accordingly affirm.
Il
The independent contractor exception
Under the FTCA, tlie United States is liable for the
‘negligent or wrongful act or omission of any employee of the
Government 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 or omission occurred.”’
28 U.S.C §1346(b). (emphasis added). The United States is
not liable for acts of independent contractors. Id. §§ 1346,
2671. See United States v. Orleans, 425 U.S. 807, 813-14
(1976). This same rule applies to the employees of indepen-
dent contractors. Hill v. Schweiker, 532 F.Supp. 1014
(D.N.H. 1982). Thus it is important to distinguish between
federal employees and the employees of independent contrac-
tors. And it is well settled that the question whether one is an
A7
employee of the United States is to be determined by federal
law. See Logue v. United States, 412 U.S. 521, 528 (1972);
Brooks v. A. R. & S. Enterprises inc., 622 F.2d 8, 10 (ist Cir.
1980); Lefevere v. United States, 362 F.2d 352, 353 (Sth Cir.
1966); Pattno v. United States, 311 F.2d 604, 605 (10th Cir.
-1962), cert. denied, 373 U.S. 911 (1963).
The Supreme Court has made clear that a critical element in
distinguishing a Government agency from an independent
contractor is the power of the Federal Government ‘‘to con-
trol the detailed physical performance of the contractor.’’
United States v. Orleans, supra, 425 U.S. at 814; Logue v.
United States, supra, 412 U.S. at 527-28. The key inquiry
under this control test is whether the Government supervises
the day-to-day operations of the individual. United States v.
Orleans, supra, 425 U.S. at 815. The district court found that
the V.A. Hospital did not and could not control the manner in
which Dr. Kaplan rendered medical treatment to the plaintiff,
IR. 213. The decision to operate and the selection of surgical
procedures and instruments were made by Dr. Kaplan without
the control or influence of the V.A. Hospital. Plaintiff does
not challenge these findings.* Under these precedents it would
seem that the requisite control, as a premise for finding that
Dr. Kaplan is a federal employee, is lacking.
Plaintiff attempts to distinguish these cases by arguing that
the control test should be subject to special considerations
when a physician’s employment status is at issue. Plaintiff
reasons that because a physician must be free to exercise his
professional judgment when he renders medical services, the
control test as it has been generally applied is inappropriate to
determine a physician’s employment status. Plaintiff argues
instead that those areas of medical service that are susceptible
to supervision and control should be considered in determin-
ing if a physician is a federal employee.
‘Plaintiff accepts all the findings except findings 14 and 17. Appellant's
Brief in Chief at 6. In findings 18 through 20, the district court found that
it was Dr. Kaplan's decision to operate and he made the choice of surgical
procedures and instruments. I R. 213.
A8
We grant the logic and appeal of plaintiff's argument. A
physician’s professional ethics require that he have ‘‘free and
complete exercise of his medical judgment and skill... . *’
Principles of Medical Ethics § 6, reprinted in Opinions and
Reports of the American Medical Association Judicial Coun-
cil, 5 (1977). Because a physician must exercise his own pro-
fessional judgment, no one controls the detailed physical per-
formance of his duties. Given this, by strictly following the
traditional control test it is doubtful whether a physician could
ever be found to be a federal employee under the FTCA.® Yet
such a result would not comport with Congressional intent.’
Hence it seems logical that some modified control test or some
different test should apply with respect to physicians.
Today, however, we need not reach this question because
we conclude that on the undisputed facts here, the contractual
arrangement itself and its application placed Dr. Kaplan out-
side the parameters of an employer-employee relationship
with the Government. See Logue v. United States, supra, 412
U.S. at 530. The V.A. Hospital did not have a traditional
employer-employee relationship with Dr. Kaplan. The V.A.
had a contract with the University of New Mexico School of
Medicine under which the University had the discretion to
choose which physician or physicians would fulfill the
University’s obligations. I R. 44. This is not consonant with a
traditional employer-employee relationship. Furthermore the
contract expressly stipulated that ‘*[s]uch [medical] personnel
shall not be considered V A employees for any purpose.’’ I R.
*By the application of traditional control test standards, physicians have
been held not to be employees of the Government in Wood v. Standard
Products Co. , 671 F.2d 825 (4th Cir. 1982), and Walker v. United States,
549 F.Supp. 973 (W.D.Okla. 1982).
7Section 4116 unambiguously contemplates that the United States can be
liable for the malpractice of physicians. 38 U.S.C. §4116(a) (United States
can be exclusive defendant in malpractice action). See e.g., Wright v. Doe,
347 F.Supp. 833 (M.D. Fla.). The United States has been held liable
under the FTCA for physician malpractice. See, e.g., Earnest v. United
States, 81-1691 & 81-1840 (10th Cir. Apr. 11, 1983) (per curiam).
A9
45. Additionally the University assumed full responsibility for
the protection of its personnel furnishing services under the
contract, in accordance with the personnel policy of the
University, such as providing workmen’s compensation, in-
surance, health examinations and social security payments.
Id. at 45.8
Thus, the areas of general supervision of Dr. Kaplan’s ac-
tivity, which plaintiff seems to say should be considered, were
confided to the University of New Mexico School of Medicine
under the contract arrangement between the V.A. and the
University. Because of that contract, which was not a sham,
and the working arrangement under it between the V.A. and
the University, we conclude that we must hold the indepen-
dent contractor exemption from FTCA liability applies. We
do so without reaching the troublesome point whether control
of the minutiae of medical decisions and procedures should
not be considered because they are always reserved to the in-
dividual physician.°®
*The court found that services performed by Dr. Kaplan at the Veterans
Administration Medical Center in May 1976 were performed with the
understanding that the contract expiring March 1, 1976 would be extended
until June 2, 1976. I R. 212.
°As an alternative argument, plaintiff appears to say that even under the
traditional control test, there was sufficient control of the details of Dr.
Kaplan's work so that he was an employee of the Government. Plaintiff
argues, inter alia, that Dr. Kaplan could not refuse to see a V.A. patient
requiring neurological care; that Dr. Kaplan or another neurosurgeon was
required to be present at all V.A. neurological clinics; that Dr. Kaplan
could be terminated by the hospital; and that he had to conform to V.A.
rules and regulations.
Even if we accept all these assertions as being correct, they are insuffi-
cient to demonstrate that Dr. Kaplan was a federal employee because taken
together they amount to no more than pervasive regulation of Dr. Kaplan
by the V.A. hospital. General regulation of activities was held not to avoid
the independent contractor exemption from FTCA liability in United
States v. Orleans, 425 U.S. 807, 817-18 (1975), and Logue v. United
States, 412 U.S. 521, 529-30 (1973). See also United States v. Page, 350
F.2d 28 (10th Cir.), cert. denied, 382 U.S. 979 (1965); Norton v. Murphy,
661 F.2d 882 (10th Cir. 1981); Flynn v. United States, 631 F.2d 678 (10th
Cir. 1980); Craghead v. United States, 423 F.2d 664 (10th Cir. 1970);
Eutsler v. United States, 376 F.2d 634 (10th Cir. 1967).
Al0
The broad independent contractor exemption is itself con-
trolling in this case. As the Supreme Court pointed out in
Logue v. United States, supra, 412 U.S. 521, Congress did
not leave the independent contractor exemption subject to the
vagaries of state law departures from the exemption and the
courts are not ‘‘free to abrogate the exemption that the Act
provides.’’ Jd. at 528. We are persuaded that here the contract
between the V.A. and the University controls, as in Logue.
Id. at 530. The supervision and general control of the physi-
cians resided with the University under the contractual ar-
rangement. The findings were not clearly erroneous and the
ruling that Dr. Kaplan was not a Government employee must
be upheld.
Ill
Plaintiff's alternative arguments
A. The pre-trial order
We first address a contention by the Government that
because the pre-trial order makes no specific reference to
plaintiff's alternative arguments, they are not properly before
this court. I R. 119-25. Plaintiff says that the pre-trial order
implicitly preserves its arguments concerning 38 U.S.C. §
4116(a) and estoppel. ws.
We recognize that the purpose of a pre-trial order is to nar-
row the issues and thereby streamline litigation, and prevent
surprise. Cleverock Energy Corp. v. Trepel, 609 F.2d 1358,
1362 (10th Cir. 1979), cert. denied, 446 U.S. 909 (1980). To
fulfill this purpose, a pre-trial order that sufficiently defines
the issues will generally control the lawsuit both at trial and on
appeal. Hodgson v. Humphries, 454 F.2d 1279, 1281 (10th
Cir. 1972). See Century Refining Company v. Hall, 316 F.2d
15 (10th Cir. 1963). However pre-trial orders have been con-
strued to include issues not specifically mentioned in the
order. E.g., Trujillo v. Uniroyal Corp., 608 F.2d 815 (10th
Cir. 1979) (‘‘the rule of strict liability’’ included all three
All
defects developed in the comments to the Restatement of
Torts); Interstate Plywood Sales Co. v Interstate Container
Corp., 331 F.2d 449 (9th Cir. 1964) (whether the contract
was ‘‘valid and enforceable’’ sufficient to present the issue of
price uncertainty because the contract could not be valid and
enforceable if the price term were missing). Accord, Godfrey
v. Duckett, No. 82-1220 (10th Cir. Aug. 23, 1983).
We believe that the plaintiff's two alternative arguments are
implicitly within the pre-trial order. Plaintiff first raised these
issues in February 1980 in response to the Government’s mo-
tion for summary judgment. I R. 112-15. The pre-trial order
was entered ten days later. /d. at 119. The order specifically
contemplated that one of the contested issues of law was
whether summary judgment should be granted. The district
court did not deny the Government’s motion until September
1980. Jd. at 136. Thus, at the time the pre-trial order was
entered, the court had before it plaintiff's two alternative
arguments. To rule on the motion, the district court needed to
consider plaintiff's two alternative arguments made in
response. Given these circumstances, we hold that the pre-
trial order did not bar the assertion of these alternative issues
but implicitly preserved them.
B. 38 U.S.C. §4116(a)
Plaintiff argues that 38 U.S.C. §4116(a) creates an excep-
tion for physicians to the rule that the United States is not
liable under the FTCA for the negligence of its independent
contractors; he says that in the circumstances of this case the
independent contractor exemption of 28 U.S.C. § 2671 to
Government liability under the FTCA is inapplicable. Ap-
pellant’s Brief in Chief at 16-19. Section 4116(a) provides:
(a) The remedy —
(1) against the United States provided by sections
1346(b) and 2672 of title 28,
** *
for damages for personal injury, including death, allegedly
arising from malpractice or negligence of a physician, .. .
or other supporting personnel in furnishing medical care or
treatment while in the exercise of such person’s duties in or
for the Department of Medicine and Surgery shall hereafter
be exclusive of any other civil action or proceeding by
reason of the same subject matter against such physician, . .
. Or other supporting personnel (or such person's estate)
whose act or omission gave rise to such claim.
The gist of plaintiff's argument is that even if Dr. Kaplan
was an employee of the University and not the V.A., the
Government is subject to liability; that the immunization of in-
dividuals from liability by § 4116(a) is not specifically
restricted to employees of the federal government; that
because analogous statutes have explicitly limited their pro-
tection to federal employees,'® § 41 16(a) immunizes indepen-
dent contractors and their employees; that this therefore is
recognition that there is FTCA liability for physicians’ actions
even if they are performing their duties in an independent con-
tractor status, citing also the 38 U.S.C. § 4101(a) provision
for the V.A. to provide complete medical and hospital ser-
vice.
We reject the argument for two reasons. First, we do not
read the statute to increase or expand the available remedies
against the United States. It provides that ‘‘[t]he remedy
against the United States provided by sections 1346(b) and
2672 . . . for damages for personal injury, including death,
‘Plaintiff relies upon 42 U.S.C. §233(a), which makes the United
States the exclusive defendant for injuries that employees of the Public
Health Service cause while acting within the scope of their employment.
The legislative history of 38 U.S.C. §4116 demonstrates that it was pat-
terned after 28 U.S.C. §2679, which makes the United States the exclusive
defendant for injuries in motor vehicle accident caused by federal
employees acting within the scope of their employment. Letter from
Senator Ralph W. Yarborough to Senator Harry F. Byrd, (Chairman
Committee on Finance) (October 8, 1965), reprinted in 1965-2 U.S. Code
Cong. & Ad. News, 3927-29. Both sections limit their protection to federal
employees.
Al3
alleged arising from malpractice or negligence of a physician
. . Shall hereafter be exclusive’’ 38 U.S.C. §4116(a) (em-
phasis added). This does not create a cause of action where
none existed. This section contemplates that if a remedy exists
against the United States, it is the exclusive remedy (i.e. ., the
physician is not personally liable). See Johnson v. United
States, 547 F.2d 688, 693 n.33 (D.C. Cir. 1976); Benitez v.
Presbyterian Hospital, 539 F.Supp. 470 (D.P.R. 1982). A
threshold requirement before the statute becomes operative is
the existence of a remedy against the United States under 28
U.S.C. §§1346(b) and 2672. Since we hoid that Dr. Kaplan
was not a Government employee, there is no remedy provided
against the United States and § 4116(a) does not come into
play.
Second, although § 4116(a) does not explicitly limit its im-
munization to federal employees, the rest of § 4116's scheme
is strong evidence that Congress intended that § 4116 apply
only to federal employees. Section 4116(b) provides that the
‘*Attorney General shall defend any civil action or proceeding
brought in any court against any person referred to in subsec-
tion (a) of this Section. . . ’’ 28 U.S.C. §4116(b). Section
4116(c) provides that any such civil action shall be removed
from state court upon certification ‘‘by the Attorney General
that the defendant was acting within the scope of such
person’s employment.’’ Id. §4116(c) (emphasis added). The
case must be remanded to state court if before trial on the
merits the district court finds ‘‘that the employee whose act or
omission gave rise to suit was not acting within the scope of
such person’s office or employment.’’ Id. §4116(c) (emphasis
added). These statutory provisions evince a Congressional in-
tent that the protection of § 4116(a) extends only to federal
employees acting within the scope of their employment.
In sum, we cannot agree that §4116(a) and the other statutes
relied on alternatively furnish a basis for Government liability
for Dr. Kaplan’s acts.
Al4
C. Equitable estoppel
Plaintiff reasons that the United States should be equitably
estopped to assert that Dr. Kaplan was not a Government
employee because he had no notice that Dr. Kaplan might be
an independent contractor until after the time for filing a state
court action had run. Plaintiff asserts that the Government ad-
mitted that Dr. Kaplan was a federal employee in its answer to
plaintiff's Freedom of Information Act (FOIA) action'! and
that this, coupled with the V.A. Hospital’s failure to have
observable differences between physicians employed by the
V.A. and employees of independent contractors is enough to
estop the Government. It appears to be plaintiff’s position that
the Government should not have admitted Dr. Kaplan’s
employment status and that it then had an affirmative obliga-
tion to advise plaintiff earlier that Dr. Kaplan might not be a
federal employee so that plaintiff could have preserved his
state law claim against Dr. Kaplan.
The district court summarily found that ‘‘[tJhere is no fac-
tual basis to equitably estop the United States of America from
asserting that Dr. Kaplan was an employee of an independent
contractor and not an employee of a federal agency.’’ I R.
214. There are no further findings on this issue.
We are not persuaded by the estoppel argument. The facts
are short of what must be proven for estoppel to apply. There
is no showing of ‘‘affirmative misconduct’’ by the Govern-
ment. See INS v. Miranda, U.S.
, 51 U.S.L.W. 3358 (1982).'? In dealing with a
''Plaintiff brought this FOIA action to obtain the Veterans Administra-
tion Hospital's complete medical and administrative records regarding his
treatment. These records were allegedly denied plaintiff after a formal re-
quest for their surrender. I R. 68.
'2?There are special considerations when a party tries to estop the
Government. See generally, Note, Equitable Estoppel of the Government,
79 Colum. L. Rev. 551, 552-54, 565-68 (1979). The Supreme Court has
indicated that a showing of *‘affirmative misconduct”’ is necessary to estop
the Government. See INS v. Miranda, 51 U.S.L.W. 3358 (U.S. 1982) (per
curiam); Schweiker v. Hansen, 450 U.S. 785 (1981) (per curiam); INS v.
Hibi, 414 U.S. 5 (1973) (per curiam).
claim of estoppel against the Government this court has
recently set out these requirements for such an estoppel. They
are: (1) the party to be estopped must know the facts; (2) he
must intend that his conduct will be acted upon or must so act
that the party asserting the estoppel has the right to believe
that it was so intended; (3) the latter must be ignorant of the
true facts; and (4) he must rely on the former’s conduct to his
injury. Home Savings & Loan Ass'n v. Nimmo, 695 F.2d
1251, 1254 (10th Cir. 1982).
In the instant case we find no showing of ‘‘affirmative
misconduct’’ by the Government and particularly no showing
of the basic second element of estoppel. Plaintiff has not
shown that the Government acted in such a way that he had a
right to believe that Dr. Kaplan was an employee of the
United States for FTCA purposes. In plaintiff's FOIA action,
which is relied on, the status of Dr. Kaplan under the FTCA
was not at issue. In the FOIA suit the Government merely ad-
mitted plaintiff's general allegation that ‘‘surgery was per-
formed by certain physicians employed by and on the staff of
the Veteran’s Administration Hospital in Albuquerque, New
Mexico.’ I R. 71, 81. We cannot agree that evidence of the
admission and other circumstances amounted to a showing of
conduct which the Government intended the plaintiff to rely
on in his tort litigation.
Furthermore, this is not a case where the Government
delayed unreasonably in raising the independent contractor
defense. Plaintiff first filed his FTCA complaint on January
10, 1979. IR. 1. There is no proof that this was ever served. I
Supp. R. 3. Piaintiff filed his first amended complaint on June
12, 1979, I R. 3, and the Government answered on August
28, 1979. Id. at 7. Plaintiff asserts that this was the first time
he had notice that Dr. Kaplan might not be a federal employee
and that at this time the state statute of limitations had already
run. Appellant’s Brief in Chief at 24-25. Even if true, this is
through no fault of the Government. The Government did not
delay unreasonably in answering. If the plaintiff had brought
Al6
suit earlier,'? he would have known of the Government’s in-
dependent contractor defense in time to bring a state action.
Rejection of plaintiff's estoppel contentions is not inconsis-
tent with Home Savings & Loan Ass'n v. Nimmo, supra. In
Home Savings we held that the United States was estopped
from denying the validity of a loan transaction. Although the
Government had notice that a note and mortgage could have
been forged, it paid a loan guaranty without disclosing to
Home Savings the possibility of the forgery. Had it known of
the risk, Home Savings contended that it could have protected
itself by retaining and selling the property. The Government
asserted the forgery and claimed the right to reimbursement
from Home Savings only after the transaction had closed. We
are not faced with such inequitable conduct here.
IV
In sum, we must sustain the district court’s ruling that the
independent contractor defense is good and that plaintiff's
alternative theories of liability are without merit.
AFFIRMED.
'3Plaintiff filed his administrative claim on October 4, 1977. 1 R. 44.
After six months if the claim is not settled a claimant has the option of
deeming it a final disposition, 28 U.S.C. §2675(a). Although there is some
indication in the record that the Government may have been granted a
three month extension, I R. 100, even if true plaintiff could have brought
suit in about July 1978. New Mexico has a three year statute of limitations
for claims arising out of malpractice. N. M. Stat. Ann. § 41-5-13 (1978).
Because plaintiff's operation occurred in May 1976, at the earliest his state
action was barred in May 1979.
APPENDIX B
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
SEPTEMBER TERM — October 12, 1983
Before Honorable William J. Holloway, Jr., Honorable Jean
S. Breitenstein and Honorable James K. Logan, Circuit
Judges.
RAYMOND LURCH,
Plaintiff-Appellant, JUDGMENT
No. 80-2226
vs.
UNITED STATES OF AMERICA, (D.C. No. 79-034-C)
Defendant-Third Party Plaintiff
Appellee,
i i
vs.
THE REGENTS OF THE UNIVERSITY )
OF NEW MEXICO and RALPH KAPLAN,
)
Third Party Defendants. )
This cause came on to be heard on the record on appeal
from the United States District Court for the District of New
Mexico, and was argued by counsel.
Upon consideration whereof, it is ordered that the judgment
of that court is affirmed.
HOWARD K. PHILLIPS, CLERK
/s/ Robert L. Hoecker,
Chief Deputy Clerk
Cl
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
RAYMOND LURCH,
Plaintiff,
vs. No. CIV-79-034 C
UNITED STATES OF AMERICA, FILED
Defendant-Third a egw Count
er ¢, New Mexico
Party Plaintiff, Ocz. 30, 1980
Jesse Casaus, Clerk
vs.
THE REGENTS OF THE UNIVERSITY
OF NEW MEXICO and RALPH KAPLAN,
Third Party
Defendants.
COURT’S FINDINGS OF FACT
AND CONCLUSIONS OF LAW
The following shall constitute the Findings of Fact and Con-
clusions of Law of the Court.
FINDINGS OF FACT
1. At the time this action was filed, Plaintiff was a resident of
the State of New Mexico.
2. Defendant is the United States of America.
3. Plaintiff seeks damages from Defendant under the Federal
Tort Claims Act for an alleged medical malpractice which occur-
red in May 1976, at the Veterans Administration Medical Center
in Albuquerque, New Mexico.
4. On May 20, 1976, a surgical procedure was performed on
Plaintiff by Dr. Ralph J. Kaplan.
5. The surgical procedure was performed at the Veterans Ad-
ministration Medical Center, Albuquerque, New Mexico.
C2
6. At the time the surgical procedure was performed, Dr.
Kaplan was a member of the faculty of the School of Medicine,
University of New Mexico.
7. At the time the surgical procedure was performed, Dr.
Kaplan was an employee of the University of New Mexico.
8. Dr. Kaplan specialized in neurosurgery.
9. The Veterans Administration Medical Center and the
School of Medicine, University of New Mexico, had entered into
a contract for the School of Medicine, University of New Mexico,
to provide specified services to the Veterans Administration
Medical Center, Albuquerque, New Mexico. This was done
under the authority of 38 U.S.C. Section 4117.
10. The contract which is identified as Contract No.
VS01P-831 was accepted and approved by the Veterans Ad-
ministration on May 6, 1976. Appendix B covering the
neurological services to be provided was not in existence on the
date of acceptance and approval of the contract, but was approved
on June 2, 1976, and became a part of said contract after negotia-
tions by Dr. Kaplan, acting on behalf of the School of Medicine,
University of New Mexico, with the Veterans Administration to
increase the payment for the neurosurgical services furnished by
the School of Medicine, University of New Mexico.
11. The contract between the Veterans Administration Medical
Center and the School of Medicine, University of New Mexico,
Stated that the contractor would assume full responsibility for the
protection of its personnel furnishing services under the contract,
such as providing for workmen's compensation, insurance, health
examination and social security payment. Personnel rendering
services were not to be considered Veterans Administration
employees for any purpose.
12. Contract VS01P-831 was a renegotiation and renewal of a
similar contract which was to expire on March 31, 1976.
13. The services performed by Dr. Kaplan at the Veterans Ad-
ministration Medical Center in May 1976, were performed with
the understanding that the contract expiring March 31, 1976,
would be extended until June 2, 1976.
14. The services could be provided by one or more
neurosurgeons at the discretion of the School of Medicine,
C3
University of New Mexico.
15. After November 20, 1975, Dr. Kaplan received his com-
pensation or paycheck from the University of New Mexico.
16. Dr. Kaplan did not receive any payment from the Veterans
Administration Medical Center for services performed in May,
June or July 1976.
17. The Chief of the Surgical Service, Veterans Administra-
tion Medical Center, did not influence the practice of the
neurosurgeons from the University of New Mexico who were
providing services to the Veterans Administration Medical Center
and said surgeons were free to perform any surgery at the
Veterans Administration Medical Center that was considered
within the realm of neurological surgery.
18. The decision to operate or not was the decision of the
neurosu.geon involved.
19. The decision as to what procedure to follow in the surgery
was that of the attending surgeon. The instruments to be used in
the procedure was the decision of the neurosurgeon. The decision
as to which neurosurgeons would go to the Veterans Administra-
tion Medical Center and perform the services was that of the doc-
tors associated with the University of New Mexico.
20. The Chief of Surgery of the Veterans Administration
Medical Center, Albuquerque, New Mexico, did not direct or
control Dr. Kanlan in performing the surgery on Plaintiff, could
not and did not direct Dr. Kaplan as to the surgical methods or the
instruments to be used in performing any surgery.
21. Dr. Kaplan, in May 1976, was not eligible for life and
health insurance benefits from the Veterans Administration
Medical Center, Albuquerque, Nex Mexico, nor did he earn
annual or sick leave benefits from the Veterans Administra-
tion. He received no F.I.C.A. and no civil service retirement
from the Veterans Administration.
CONCLUSIONS OF LAW
1. This Court has jurisdiction over all parties and the subject
matter of this action.
2. By oral agreement, the contract between the School of
Medcine, University of New Mexico, and the Veterans Ad-
C4
ministration Medical Center which provided for neurosurgical
services was in effect on May 20, 1976.
3. This contract intended that the School of Medicine,
University of New Mexico, would provide medical services
Stated therein to the Veterans Administration Medical Center on
an independent contractor basis.
4. Apart from the contract, the relationship between the
School of Medicine, University of New Mexico, the
neurosurgeons from the University of New Mexico and the
Veterans Administration Medical Center was such that Dr.
Kaplan cannot be considered an employee of a federal agency as
required by the Federal Tort Claims Act.
5. On May 20, 1976, Dr. Kaplan was an employee of the
School of Medicine, University of New Mexico, which was an
independent contractor providing specified medical services to the
United States of America.
6. The United States of America is not responsible for any
acts or omissions on the part of Dr. Kaplan in May 1976. 28
U.S.C. Section 1346(b); 28 U.S.C. Section 2671.
7. There is no factual basis to equitable estop the United
States of America from asserting that Dr. Kaplan was an
employee of an independent contractor and not an employee of a
federal agency.
8. Plaintiff has no cause of action against the United States of
America.
9. The First Amended Petition should be dismissed.
10. Defendant United States of America’s Third Part claim
against the Regents of the University of New Mexico and Ralph
Kaplan is moot and should be dismissed.
All requested Findings of Fact and Conclusions of Law not in-
cluded herein are hereby denied.
Santiago E. Campos
UNITED STATES DISTRICT JUDGE
D1
APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
RAYMOND LURCH,
Plaintiff,
VS. CIVIL NO. 79-034-C
UNITED STATES OF AMERICA, Entered on Docket
Defendant-Third 20-20-80
Party Plaintiff, dng
United States District Court
Santa Fe, New Mexico
vs. Oct. 20, 1980
Jesse Casaus, Clerk
THE REGENTS OF THE UNIVERSITY
OF NEW MEXICO and RALPH KAPLAN,
Third Party Defendants.
JUDGMENT
This action having come before the Court, Honorable San-
tiago E. Campos, District Judge presiding, the Court having
considered the issue of the independent contractor status of the
University of New Mexico and Ralph Kaplan upon stipulation
of the parties and having entered its Findings of Fact and Con-
clusions of Law and the issue having been duly tried and a
decision having been duly rendered,
IT IS ORDERED AND ADJUDGED that the First Amend-
ed Petition shall be, and hereby is dismissed.
IT IS FURTHER ORDERED that Defendant United States
of America’s Third Party claim against the Regents of the
University of New Mexico and Ralph Kaplan is moot and is
hereby dismissed.
JESSE CASAUS, CLERK
By /s/ Margaret S. Marquez
Deputy Clerk
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.