Court: Court of Appeals for the Seventh Circuit; July 13, 2005; Federal Appellate Court
On July 19, 1997, two private airplanes collided mid-air over Chicago, resulting in the deaths of all seven occupants. At the time of the crash, Meigs Field Air Traffic Control Tower, operated by a private contractor for the FAA, was providing air traffic services. Following the incident, the estates and relatives of the victims initiated multiple lawsuits against various parties, including the United States, under the Federal Tort Claims Act (FTCA). The district court granted summary judgment to the United States on several claims, while others proceeded to trial, ultimately ruling in favor of the United States.
The plaintiffs' FTCA claims asserted that the United States had a non-delegable duty to ensure air traffic control services and was responsible for the negligence of air traffic controller Renee Toone, who failed to inform the pilots of an impending collision. Additionally, the plaintiffs contended that the United States was liable for allowing an unqualified controller to operate the tower and for negligently delaying the approval for increased staffing at Meigs Field. The case involved appeals stemming from the district court's rulings on these claims.
Timeliness of the appeal is addressed, focusing on the plaintiffs' consolidated cases. The district court issued four similar Memorandum Opinion and Orders but entered separate final judgments for three cases on January 27, 2004, with docketing occurring two days later. In the lead case, Alinsky, No. 98-CV-6189, a separate judgment was not immediately entered due to an error; it was instead attached to the last page of the Memorandum Opinion and Order. A separate judgment for Alinsky was finally entered on June 17, 2004, leading to the plaintiffs filing a notice of appeal on July 21, 2004.
According to Federal Rule of Appellate Procedure 4(a)(1)(B), a notice of appeal must be filed within 60 days after the judgment is entered when the United States is a party. The judgments against three plaintiffs were docketed on January 29, 2004, but their appeals were filed late, after the final judgment in Alinsky. A precedent, Sandwiches, Inc. v. Wendy's Int'l, Inc., established that a single judgment in consolidated cases is not appealable without a ruling under Fed. R.Civ. P. 54(b). Thus, the appeal period for all four cases began only after a final judgment was entered for all.
The determination of when the final judgment was 'entered' in Alinsky hinges on Federal Rule of Civil Procedure 58(a)(1), which mandates that every judgment must be set forth on a separate document. Though a judgment form was prepared, it was mistakenly stapled to the Memorandum Opinion and not separately docketed. Consequently, the judgment was not 'entered' on January 29, 2004, as required, and is only considered entered once it is set forth properly or after 150 days from the initial docketing, per Rule 58(b)(2).
The government concedes that if the judgment form attached to the Memorandum Opinion and Order is not viewed as a separate document, the plaintiffs' appeal is timely, as the appeal period would start on June 28, 2004, following Rule 58(b)(2)(B). The plaintiffs dispute this interpretation, arguing that the 150-day appeal period did not commence until June 17, 2004, when a separate judgment was entered in the Alinsky case. Despite the disagreement, it is noted that regardless of the interpretation of Rule 58(b)(2), the notices of appeal filed on July 21, 2004, were timely.
Regarding the merits, the plaintiffs contend that the district court incorrectly ruled it lacked jurisdiction over their claim against the United States under the Federal Tort Claims Act (FTCA) due to Toone's alleged negligence. The FTCA allows federal courts to hear claims for damages caused by the negligent acts of government employees. However, the definition of "employee of the government" excludes contractors, and since Toone was employed by Midwest Air, an independent contractor, the district court lacked jurisdiction.
The plaintiffs argue against Toone's independent contractor status by asserting that the U.S. government was not authorized to hire private contractors for air traffic control services, citing 49 U.S.C.App. 1344(h), which limits contracting to state or local government entities. They further claim that a subsequent amendment in 2003, allowing contracts with any "qualified entity," supports their argument that the FAA lacked authority to contract with private organizations at the time of the incident.
The FAA does not base its authority to subcontract with Midwest on the provisions cited by the plaintiffs but rather relies on specific statutory grants, notably 49 U.S.C. 106(l)(6), which empowers the Administrator to enter contracts necessary for the Administration's functions. Additional support comes from 49 U.S.C. 40110, which allows the Administrator to acquire services, and 49 U.S.C. 40111, authorizing contracts for operational services at facilities. These statutes clearly permit the FAA to contract for air traffic control services, and there is no limitation in 49 U.S.C. 1344(h) that restricts this authority or suggests that the FAA cannot hire private contractors. The plaintiffs' argument based on 49 U.S.C. 1344(h) is deemed misplaced, as that section pertains to contracting with States or political subdivisions and does not address private contractors.
Furthermore, the plaintiffs claim that the FAA is liable for the actions of Toone, arguing that air traffic control services are nondelegable. However, the Supreme Court's interpretation of the Federal Tort Claims Act (FTCA) indicates that state exceptions to independent contractor liability do not apply in federal cases. The FTCA allows for lawsuits against the United States for its employees' actions but does not extend this liability to independent contractors. As Toone was employed by Midwest, not the FAA, the plaintiffs cannot hold the United States liable for her conduct.
Plaintiffs contest the district court's ruling favoring the United States regarding their negligence claims. They assert that the United States negligently failed to respond to Midwest's request for funding additional air traffic controllers and poorly managed the contract with Midwest, allowing an allegedly untrained controller, Toone, to operate alone. The claim centers on the FAA's alleged negligence in not approving Midwest's funding request for an additional air traffic controller. Midwest, under its contract with the FAA, was responsible for staffing Meigs Tower according to its bid, which indicated it might operate with a single controller but agreed to increase staffing without additional costs if necessary. After opening the tower with one controller, Midwest requested funding for another controller on April 17, 1997, due to increased traffic. This request was processed routinely since it was not marked as an emergency, leading to an approval on July 3, 1997—just weeks before a fatal crash. Plaintiffs argue the FAA's delayed response to the staffing request directly contributed to the accident. However, following a bench trial, the district court found the FAA acted reasonably in handling the request, a determination that is reviewed for clear error.
On appeal, plaintiffs did not prove that the district court's factual finding was clearly erroneous regarding the Federal Aviation Administration's (FAA) response to Midwest's funding request. The court established that the FAA acted within a standard timeframe, approving additional funding over two weeks before the accident, and did not consider the request an emergency. Midwest was contractually obligated to increase staffing without needing FAA approval, which they did by deploying a 'quick response team' prior to the incident. Therefore, any delay in funding did not cause the alleged understaffing.
Additionally, plaintiffs claimed negligence due to Midwest staffing the control tower with Toone, who allegedly lacked sufficient training and experience. The government argued that the six-month experience requirement was waived because Meigs Field had recently reopened, making it impractical for any controller to meet that criterion. Furthermore, the disputed training class focused on administrative rather than safety issues, and Toone had received equivalent training.
Despite these arguments, plaintiffs' negligence claims were fundamentally flawed since the contract mandated Midwest to ensure that the control tower was staffed with qualified personnel, not the United States. The district court recognized this, granting the United States partial summary judgment on claims of negligent oversight or training.
Lastly, the discretionary function exception under the Federal Tort Claims Act (FTCA) limits liability for claims based on the exercise or omission of discretionary functions by a federal agency or employee. Determining whether this exception applies involves assessing if government employees violated a mandatory statute, regulation, or policy and if the conduct was intended to be protected from liability based on public policy considerations.
Congress authorized the FAA to enter contracts necessary for its operations, and the government did not breach any mandatory statutes, regulations, or policies by hiring Midwest for training and oversight at Meigs. The plaintiffs failed to identify any specific statute or regulation governing FAA oversight of private contractors, which is crucial for their negligent oversight claim. The government’s decision to contract air traffic control services was motivated by budgetary considerations and policy decisions, thus falling under the discretionary function exemption of the Federal Tort Claims Act (FTCA). This exemption protects the government from liability regarding the training, oversight, or qualifications of air traffic controllers since the decision to contract these responsibilities was made at the government’s discretion. The court cited precedent, including Kirchmann v. United States and Varig Airlines, affirming that claims based on alleged negligence in contractor oversight are similarly barred under this exemption. Consequently, the district court correctly granted summary judgment in favor of the United States regarding the plaintiffs' claims.
The district court denied the plaintiffs' motion to amend their complaint after granting partial summary judgment to the defendants. The court found that all but one issue in the proposed amendment had been resolved by this ruling. The remaining issue claimed negligence by the United States for not installing radar at Meigs, which the plaintiffs did not pursue on appeal. Instead, they sought to amend their complaint to include allegations regarding FAA orders affecting FAA controllers’ conduct. The district court deemed this amendment futile since it had already reviewed the violations of FAA orders in the prior complaint. Additionally, the court determined that allowing the amendment would unfairly prejudice the United States, particularly since the motion was filed three years into the litigation and eight months after discovery concluded. The court’s decision was upheld as it did not constitute an abuse of discretion. Furthermore, the United States was found not liable for the deaths resulting from a tragic accident, as it did not provide the allegedly negligent air traffic control services, with Midwest being responsible for staffing and training at Meigs. The judgment was affirmed, noting that even if the FAA's contract with Midwest was unauthorized, it would not classify Midwest employees as U.S. government employees, and additional funding would not have changed staffing at the time of the accident.
