United States v. Seckinger/Dissent Stewart

by Potter Stewart

United States Supreme Court

397 U.S. 203

United States  v.  Seckinger

 Argued: Jan. 14, 1970. --- Decided: March 9, 1970

Mr. Justice STEWART, with whom THE CHIEF JUSTICE and Mr. Justice DOUGLAS join, dissenting.

The standard form that the Government uses for its fixed-price construction contracts has long contained a single sentence saying that the contractor 'shall be responsible for all damages to persons or property that occur as a result of his fault or negligence in connection with the prosecution of the work.' ^[1] For more than 30 years it has evidently been understood that these words mean what they rather clearly say that the contractor cannot hold the Government for losses he incurs resulting from his own negligence. ^[2] The provision, in short, is what the Court of Appeals called 'a simple responsibility clause.' 408 F.2d 146, 148. ^[3] But today this innocuous boilerplate language is turned inside out. For the Court says that the provision really is a promise by the contractor to reimburse the Government for losses it incurs resulting from its negligence.

To be sure, the Court does not go quite so far as to hold that this obscure clause operates as a complete liability insurance policy. But the Court does hold that the clause requires the contractor to indemnify the Government 'to the full extent that its negligence, if any contributed to the injuries to the employee.' The magnitude of the burden the Court imposes is well illustrated by the circumstances of this case. Here an employee of the contractor was injured in the scope of his employment on plumbing work that the contractor was performing at the Paris Island Marine Depot in South Carolina. The employee recovered from the contractor the benefits to which he was entitled under the state workmen's compensation law. The employee then sued the Government under the Federal Tort Claims Act, claiming that his injuries had actually been caused by the Government's negligence. The Federal District Court agreed, finding that the negligence of the United States was the 'sole cause' of the employee's injuries and awarding him $45,000 in damages. The Court today says that the United States can now recover an indeterminate portion of this $45,000 from the contractor, because the contractor has agreed to 'indemnify the United States * * *.'

Despite intimations in the Court's opinion to the contrary, we do not deal here with 'common law or statutory rules of contribution or indemnity.' ^[4] The only question the Court decides is the meaning of the words of a clause in a government contract. ^[5] I think the meaning attributed to that clause today is as unconscionable as it is inaccurate.

The clause first appeared in government contracts at least eight years before the enactment of the Federal Tort Claims Act in 1946. Before the passage of that Act the United States could not be sued in tort for personal injuries. Thus there was absolutely no reason for the Government to secure for itself a right to recovery over against an alleged joint tortfeasor. Yet we are asked to believe that the drafter of this clause was so prescient as to foresee the day of government tort liability nearly a decade in the future, and so ingenious as to smuggle a provision into a standard contract form that would, when that day arrived, allow the Government to shift its liability onto the backs of its contractors. This theory is nothing short of incredible.

In drafting its construction contracts the United States certainly has both the power and the resources to write contracts providing expressly that it will pass off onto its contractors, either in whole or in part, liability it incurs for damages caused by its own judicially determined negligence. The Government could require its contractors to hold it harmless without regard to fault on their part, or it could establish a proration of liability arising from the joint negligence of the parties. But the contractual provision before us does neither. It no more says that the contractor shall reimburse the Government for his share of joint negligence than that shall be a liability insurer for the Government's sole negligence.

The Court nonetheless manages to discover that the clause amounts to a contribution agreement, relying for its conclusion upon cases involving, not the simple responsibility clause before us, but express indemnification agreements with 'hold harmless' clauses. ^[6] This result is said to be desirable because it ensures a fair distribution of loss between those jointly responsible for the damage. But when Seckinger entered into this contract, it had every reason to expect that its liability for injuries to its employees would be limited to what is imposed by the South Carolina compensation law. That law relieved it of responsibility in tort in exchange for its guarantee that its employees would recover without regard to fault. Presumably its bid on the government project reflected its reasonable expectation that this would be the extent of its liability on account of employee accidents. Now the Court heaps an unforeseen federal contractual burden atop the requirement the State has already imposed. ^[7]

If the Government wants to impose additional liabilities upon those with whom it contracts to do its work, I would require it to do so openly, so that every bidder may clearly know the extent of his potential liability. Even in the domain of private contract law, the author of a standard-form agreement is required to state its terms with clarity and candor. ^[8] Surely no less is required of the United States of America when it does business with its citizens. ^[9]

Mr. Justice Holmes once said that '(m)en must turn square corners when they deal with the Government.' ^[10] I had always supposed this was a two-way street. The Government knows how to write an indemnification or contribution clause when that is what it wants. It has not written one here.

I would affirm the judgment.

Notes

1. This sentence is contained in a paragraph entitled 'Permits and Responsibility for Work, etc.' See ante, at 208 n. 9.
2. I have found no previous reported decision construing this clause as the Court construes it today.
3. It will not do to say, as the Court says today, that this construction of the clause makes its purpose 'totally unclear' or 'would drain this clause of any significant meaning or protection for the Government * * *.' For without such a clause, there would surely be room for the contractor to claim reimbursement from the Government for unforeseen increased costs incurred on account of his negligence, particularly where the Government was jointly negligent. With respect to contracts not containing such a clause cost-plus contracts, for example-the Comptroller General advised the Secretary of War almost 30 years ago that the Government may, indeed, be liable to the contractor under such circumstances. See 21 Comp.Gen. 149, 156-157 (1941).
4. Under the law of South Carolina-which determines the Government's liability in tort to the injured employee, 28 U.S.C. § 1346(b); Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492-the general rule is that there is no right to contribution among joint tortfeasors. Atlantic Coast Line R. Co. v. Whetstone, 243 S.C. 61, 68-70, 132 S.E.2d 172, 175-176. Moreover, since the injured employee has accepted his award against Seckinger under the state workmen's compensation statute, he cannot hold Seckinger in tort. S.C.Code Ann. § 72-121, 72-123 (1962); Adams v. Davison-Paxon Co., 230 S.C. 532, 545, 96 S.Ed.2d 566, 572-573. So Seckinger can hardly be cast in the role of a tortfeasor in any event.
5. The Court's conclusion that the Court of Appeals' construction of the clause might 'reduce Seckinger's potential liability under common law or statutory rules of contribution or indemnity' seems wholly incorrect. The contractor's agreement not to seek reimbursement or contribution from the Government would have no bearing upon the question whether local 'common law or statutory rules of contribution and indemnity' give the Government any right to recover from the contractor.
6. These cases are cited in the Court's opinion, ante, 215 n. 20.
7. Under South Carolina law Seckinger has been subrogated to its injured employee's claim against the United States to the extent of its own compensation payment. S.C.Code Ann. § 72-124 (1962). But the Court today subjects Seckingers to the incremental risk of liability in contribution, in a yet-to-be-determined proportion, for the employee's added recovery in his tort suit against the Government.
8. E.g., Chrysler Corp. v. Hanover Ins. Co., 350 F.2d 652, 655; Riess v. Murchison, 329 F.2d 635, 642; Restatement of Contracts § 235(e); 3 A. Corbin on Contracts § 559 (1960).
9. Sternberger v. United States, 401 F.2d 1012, 1021, 185 Ct.Cl. 528, 543; Jones v. United States, 304 F.Supp. 94, 101.
10. Rock Island, A. & L.R. Co. v. United States, 254 U.S. 141, 143, 41 S.Ct. 55, 56, 65 L.Ed. 188.