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Overseas National Airways Inc. v. United States

decided: June 27, 1985.

OVERSEAS NATIONAL AIRWAYS, INC., PLAINTIFF,
v.
UNITED STATES OF AMERICA, DEFENDANT-THIRD-PARTY PLAINTIFF-APPELLANT, V. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, THIRD-PARTY DEFENDANT-APPELLANT, AND THE CITY OF NEW YORK, THIRD-PARTY DEFENDANT-APPELLEE



Appeal from the order of the United States District Court for the Eastern District of New York (Nickerson, Judge) granting third-party defendant City of New York's motion for summary judgment and dismissing the claims of the third-party plaintiff United States and the third-party defendant Port Authority of New York and New Jersey seeking contribution for and indemnification of damages arising out of an airplane crash.

Oakes, Cardamone, and Pierce, Circuit Judges. Oakes, Circuit Judge (dissenting).

Author: Pierce

PIERCE, Circuit Judge:

The United States of America and the Port Authority of New York and New Jersey appeal from an order of the United States District Court for the Eastern District of New York (Nickerson, Judge) which granted the motion of the City of New York for summary judgment and dismissed their claims against the City of New York seeking contribution for and indemnification of damages arising out of an airplane crash.

BACKGROUND

These actions arise from the crash landing and explosion of an airplane at the John F. Kennedy International Airport ("airport" or "JFK") in New York City, on November 12, 1975. The crash occurred after an Overseas National Airways, Inc. ("Overseas") jet struck a flock of seagulls during takeoff, and its engines ingested a number of the birds. One of the engines lost power and became engulfed in flames. The pilot successfully brought the jet to a stop on the runway, and the passengers and crew deplaned safely, but the plane and its contents were destroyed by the ensuing fire. All parties agreed that the ingestion of the birds caused the accident.

On May 14, 1979, Overseas and Bank of America -- the owner of the destroyed jet -- filed suit in the United States District Court for the Eastern District of New York. The suit, brought under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b) and 2674 (1984), claimed that the employees of the Federal Aviation Administration ("FAA") were negligent in certifying the airport and the plane's engines and in clearing the plane for takeoff. The United States then initiated third-party actions against the Port Authority of New York and New Jersey ("Port Authority") and The City of New York ("City"). Third-party defendant Port Authority is the operator of JFK. Since 1968, it has utilized a "bird control" program to reduce the risk of accidents such as occurred herein. In its third-party action against the Port Authority, the United States claimed that the Port Authority negligently operated the airport with respect to bird control and sought contribution and indemnification in the event the United States was held liable for the loss of the airplane. Third-party defendant City operates and maintains two landfills located near the airport. These landfills attract large numbers of birds, particularly seagulls. The United States' complaint alleged that the City's negligent operation of the landfills attracted the birds which caused the accident herein and sought contribution and indemnification from the City in the event that the United States was held liable to Overseas. In response to the United States' suit, the Port Authority filed a third-party complaint against the City seeking contribution and indemnification.

At the same time, Overseas filed suit in the New York State courts against the Port Authority and the City. Its complaint alleged that the Port Authority and the City had been negligent in essentially the ways charged in the United States' third-party complaint, and sought damages for Overseas' property loss. Both defendants cross-claimed for indemnification and contribution against each other. On August 15, 1983, the state court approved a settlement agreement among the United States, the Port Authority, and Overseas. The United States participated in the settlement although it was not a party to the state court action. The City, although a defendant therein, did not. The final order entered by the state court dismissed all claims and cross-claims with prejudice but provided "any claims the defendant third-party plaintiff Port Authority may have against the third-party defendant City of New York in the Federal Court action shall be preserved."

Thereafter, in the Overseas federal court action, the district court approved a stipulation among all parties except the City by which all claims were withdrawn except those of the Port Authority and the United States against the City. The City then moved to dismiss the Port Authority's claims against it for lack of subject matter jurisdiction, and those of both the United States and the Port Authority for failure to state a claim upon which relief could be granted. In addressing these motions, the court decided to consider materials outside the pleadings and thus treat the motions as seeking summary judgment. The district court first decided that it would be proper to exercise ancillary jurisdiction over the Port Authority's claims against the City and that, because the order of the state court had expressly preserved those claims, res judicata did not bar the Port Authority's action. Turning to the merits of the United States' and the Port Authority's claims against the City, the district court, after determining that New York law governed, held that: 1) because N.Y. Gen. Oblig. Law § 15-108(c) bars a "tortfeasor who has obtained his own release from liability" from seeking "contribution from any other person," neither the United States nor the Port Authority could state a claim for contribution from the City; and 2) because New York law provides for indemnification only by contract or when one is held liable solely through operation of law and not on account of any negligence of his own, neither the Port Authority nor the United States could state a claim against the City for indemnification. The district court therefore granted the City's motion for summary judgment.

The United States and the Port Authority appealed. We affirm.

Discussion

On appeal, the United States urges that we create and apply a federal common law rule of decision that would govern whenever the United States seeks contribution from a joint tortfeasor in an aircraft accident case. The United States essentially argues that "the basis for imposing a federal law of contribution and indemnification is . . . the predominant, indeed almost exclusive, interest of the federal government in regulating the affairs of the nation's airways" and that "the imposition of a federal rule of contribution and indemnification serves a second purpose of eliminating inconsistency of result in similar collision occurrences as well as within the same occurrence due to the application of differing state laws on contribution and indemnity." See Kohr v. Allegheny Airlines, Inc., 504 F.2d 400, 403 (7th Cir. 1974), cert. denied, 421 U.S. 978, 95 S. Ct. 1980, 44 L. Ed. 2d 470 (1975). In support of this argument, the United States points to the extensive federal regulation of aviation under the Federal Aviation Act of 1958, 49 U.S.C. § 1301 et seq. : for example, under the Act, Congress has authorized the Federal Aviation Administration to insure the safety of airplane travel, to certify aircraft, their engines, and airports, and to promulgate regulations governing the operation of certified airports. The United States also argues that because the "the application of state law . . . would subject the rights and duties of the United States to exceptional uncertainty," Clearfield Trust Co. v. United States, 318 U.S. 363, 367, 87 L. Ed. 838, 63 S. Ct. 573 (1943), the case for choosing a federal rule of decision is even more compelling here than in other aviation tort litigation.

We agree with the United States that these are persuasive arguments for creating a federal rule of decision to be applied when the United States seeks contribution from another party in an aviation tort case. Were we free to act upon the policy considerations detailed by the government in its arguments, we might indeed be inclined to create such a federal rule of contribution. However, in our opinion, we do not act with such freedom in this area of the law. A fair reading of the FTCA and applicable Supreme Court precedent leads us to the conclusion that state law governs claims by the United States for contribution from other defendants in aviation tort cases.

The controlling case here is Executive Jet Aviation v. City of Cleveland, 409 U.S. 249, 34 L. Ed. 2d 454, 93 S. Ct. 493 (1972). In Executive Jet, a jet aircraft struck a flock of seagulls as it took off from Cleveland's Burke Lakefront Airport adjacent to Lake Erie. As a result, the plane lost power, crashed, and ultimately sank in the navigable waters of Lake Erie, a short distance from the airport. The owners of the plane brought suit against the City of Cleveland, the airport manager, and the air traffic controller who had cleared the plane for takeoff. The suit invoked the admiralty jurisdiction of the district court. The Supreme Court affirmed the district court's dismissal of the complaint for lack of subject matter jurisdiction. Presented with the same policy arguments for a uniform federal law of aviation torts that the government makes here, the Supreme Court declined the invitation to apply federal admiralty law to such cases. The Court's language and reasoning in so doing, we believe, compels a conclusion that Executive Jet holds not simply that ...


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