B-199449.OM, AUG 7, 1980

B-199449.OM, AUG 7, 1980

SUBJECT: ADMINISTRATIVE SETTLEMENTS OF TORT CLAIMS ARISING IN FOREIGN COUNTRIES \ (Z-2821971) - B-199449 - O.M.

ASSOCIATE DIRECTOR, FGMSD/CLAIMS - DANIEL P. LEARY:

THIS MEMORANDUM STEMS FROM RECENT DISCUSSIONS WITH YOUR GROUP AND WITH THE STATE DEPARTMENT CONCERNING THE SOURCE OF FUNDS FOR THE PAYMENT OF ADMINISTRATIVE SETTLEMENTS OF TORT CLAIMS ARISING IN FOREIGN COUNTRIES UNDER 22 U.S.C. SEC. 2669(F) (1976). FOR THE REASONS THAT FOLLOW, WE CONCLUDE THAT AWARDS UNDER SECTION 2669(F) (AND SIMILAR STATUTES, DISCUSSED BELOW) SHOULD BE PAID IN THE SAME MANNER AS AWARDS UNDER THE FEDERAL TORT CLAIMS ACT - THAT IS, AWARDS OF $2,500 OR LESS ARE PAYABLE BY THE AGENCY FROM ITS OWN FUNDS, AND AWARDS IN EXCESS OF $2,500 ARE PAYABLE, UPON CERTIFICATION BY THE GENERAL ACCOUNTING OFFICE, FROM THE PERMANENT INDEFINITE APPROPRIATION ESTABLISHED BY 31 U.S.C. SEC. 724A.

THE QUESTION AROSE MOST RECENTLY IN CONNECTION WITH THE CASE OF KES TEGEGNWORK MULAT, Z-2821971. MR. MULAT, A CITIZEN OF ETHIOPIA, WAS STRUCK AND KILLED IN ADDIS ABABA ON JUNE 4, 1978, BY A MOTOR VEHICLE DRIVEN BY A STATE DEPARTMENT EMPLOYEE. THE CLAIM WAS SUBMITTED TO AN ARBITRATION PANEL, APPARENTLY IN ACCORDANCE WITH ETHIOPIAN LAW OR PRACTICE, AND $10,260.66 WAS AWARDED TO MR. MULAT'S WIDOW AND CHILDREN. THE AWARD, WHICH WE ARE ADVISED IS THE FIRST TO BE SUBMITTED TO GAO UNDER 22 U.S.C. SEC. 2669(F), HAS ALREADY BEEN CERTIFIED FOR PAYMENT AND IS USED HERE MERELY AS A REFERENCE CASE.

FEDERAL TORT CLAIMS ACT - PAYMENT PROVISIONS AND THE FOREIGN COUNTRY EXCEPTION

THE FEDERAL TORT CLAIMS ACT, 28 U.S.C. SECS. 1346(B), 2671-2680, WAS ORIGINALLY ENACTED AS TITLE IV OF THE LEGISLATIVE REORGANIZATION ACT OF 1946. ADMINISTRATIVE SETTLEMENT AUTHORITY IS FOUND IN 28 U.S.C. SEC. 2672. THE ORIGINAL VERSION AUTHORIZED AGENCIES TO ADMINISTRATIVELY SETTLE, AND PAY "OUT OF APPROPRIATIONS THAT MAY BE MADE THEREFOR," TORT CLAIMS NOT IN EXCESS OF $1,000. (60 STAT. 843). IN 1950, THE REQUIREMENT FOR SPECIFIC APPROPRIATIONS WAS DELETED. (PUB. L. NO. 81 830, SEC. 9, 64 STAT. 987.) THE $1,000 LIMIT WAS RAISED TO $2,500 IN 1959. (PUB. L. NO. 86-238, SEC. 1(1), 73 STAT. 471.) IN 1966, THE LIMIT ON ADMINISTRATIVE SETTLEMENT AUTHORITY WAS REMOVED, EXCEPT THAT AWARDS GREATER THAN $25,000 REQUIRE THE PRIOR WRITTEN APPROVAL OF THE ATTORNEY GENERAL. (PUB. L. NO. 89-506, 80 STAT. 306.) THE 1966 AMENDMENT ALSO ENACTED THE CURRENT PAYMENT PROVISIONS, UNDER WHICH AWARDS NOT IN EXCESS OF $2,500 ARE PAID BY THE AGENCY INVOLVED OUT OF AVAILABLE APPROPRIATIONS, AND AWARDS GREATER THAN $2,500 ARE PAID "IN A MANNER SIMILAR TO JUDGMENTS IN LIKE CAUSES," THAT IS, FROM THE PERMANENT INDEFINITE APPROPRIATION ESTABLISHED BY 31 U.S.C. SEC. 724A.

HOWEVER, THE FEDERAL TORT CLAIMS ACT DOES NOT APPLY TO "ANY CLAIM ARISING IN A FOREIGN COUNTRY." 28 U.S.C. SEC. 2680(K).

SPECIFIC STATUTORY PROVISIONS

NOTWITHSTANDING 28 U.S.C. SEC. 2680(K), A NUMBER OF AGENCIES HAVE SPECIFIC AUTHORITY TO SETTLE TORT CLAIMS ARISING IN FOREIGN COUNTRIES. SEVERAL OF THESE PROVISIONS, HOWEVER, ARE UNCLEAR AS TO THE SOURCE OF FUNDS FOR PAYMENT OF ADMINISTRATIVE SETTLEMENTS. THE PROVISIONS WE ARE AWARE OF IN THIS CONNECTION ARE AS FOLLOWS:

(1) STATE DEPARTMENT - 22 U.S.C. SEC. 2669

"THE SECRETARY OF STATE, WHEN FUNDS ARE APPROPRIATED THEREFOR, MAY

"(F) PAY TORT CLAIMS, IN THE MANNER AUTHORIZED IN THE FIRST PARAGRAPH OF SECTION 2672, AS AMENDED, OF TITLE 28, WHEN SUCH CLAIMS ARISE IN FOREIGN COUNTRIES IN CONNECTION WITH DEPARTMENT OF STATE OPERATIONS ABROAD."

(2) INTERNATIONAL COMMUNICATION AGENCY - 22 U.S.C. SEC. 1474(5) (1976 AND SUPP. I 1977)

"IN CARRYING OUT THE PROVISIONS OF THIS CHAPTER (22 U.S.C. CHAPTER 18), THE DIRECTOR, OR ANY GOVERNMENT AGENCY AUTHORIZED TO ADMINISTER SUCH PROVISIONS, MAY

"(5) NOTWITHSTANDING THE PROVISIONS OF SECTION 2680(K) OF TITLE 28, PAY TORT CLAIMS IN THE MANNER AUTHORIZED IN THE FIRST PARAGRAPH OF SECTION 2672 OF SUCH TITLE, WHEN SUCH CLAIMS ARISE IN FOREIGN COUNTRIES IN CONNECTION WITH OPERATIONS CONDUCTED ABROAD UNDER THIS CHAPTER."

(3) VETERANS ADMINISTRATION - 38 U.S.C. SEC. 236

"THE ADMINISTRATOR MAY PAY TORT CLAIMS, IN THE MANNER AUTHORIZED IN THE FIRST PARAGRAPH OF SECTION 2672 OF TITLE 28, WHEN SUCH CLAIMS ARISE IN FOREIGN COUNTRIES IN CONNECTION WITH VETERANS' ADMINISTRATION OPERATIONS ABROAD. ***"

(4) INDUSTRY AND TRADE ADMINISTRATION AND UNITED STATES TRAVEL SERVICE

THESE BUREAUS, BOTH WITHIN THE DEPARTMENT OF COMMERCE, HAVE SPECIFIC AUTHORITY PROVIDED IN ANNUAL APPROPRIATION ACTS. SEE DEPARTMENT OF COMMERCE APPROPRIATION ACT, 1980, PUB. L. NO. 96-68 (SEPTEMBER 24, 1979), TITLE III, 93 STAT. 423-24 ("PAYMENT OF TORT CLAIMS IN THE MANNER AUTHORIZED IN THE FIRST PARAGRAPH OF 28 U.S.C. 2672, WHEN SUCH CLAIMS ARISE IN FOREIGN COUNTRIES").

THE EARLIEST INSTANCE WE COULD LOCATE OF A PROVISION AUTHORIZING THE SETTLEMENT OF TORT CLAIMS IN FOREIGN COUNTRIES WAS THE STATE DEPARTMENT'S APPROPRIATION FOR "GOVERNMENT IN OCCUPIED AREAS OF GERMANY," FOREIGN AID APPROPRIATION ACT, 1951 (CHAPTER XI, TITLE III OF THE GENERAL APPROPRIATION ACT, 1951), PUBLIC LAW 759, 81ST CONG., 64 STAT. 595, 762. THE AUTHORITY WAS SOON THEREAFTER EXTENDED TO THE STATE DEPARTMENT'S APPROPRIATION FOR "INTERNATIONAL INFORMATION AND EDUCATIONAL ACTIVITIES" (E.G., 67 STAT. 420), WHICH EVOLVED INTO THE UNITED STATES INFORMATION AGENCY (USIA). THE STATE DEPARTMENT THEN SOUGHT MORE GENERAL FOREIGN TORT SETTLEMENT AUTHORITY, WHICH WAS GRANTED AND MADE PERMANENT IN 1956. THE USIA PROVISION REMAINED IN ANNUAL APPROPRIATION ACTS UNTIL IT WAS MADE PERMANENT BY SECTION 202 OF THE FOREIGN RELATIONS AUTHORIZATION ACT OF 1972. USIA BECAME THE INTERNATIONAL COMMUNICATION AGENCY IN 1977.

DISCUSSION

THE QUESTION OVER 22 U.S.C. SEC. 2669(F) ARISES BECAUSE THE STATUTE IS NOT WORDED MERELY AS AN EXCEPTION TO THE FOREIGN COUNTRY EXCLUSION IN THE FEDERAL TORT CLAIMS ACT. RATHER, IT AUTHORIZES THE SECRETARY OF STATE, "WHEN FUNDS ARE APPROPRIATED THEREFOR," TO "PAY" TORT CLAIMS IN THE MANNER AUTHORIZED "IN THE FIRST PARAGRAPH OF" 28 U.S.C. SEC. 2672. THE USE OF THE WORD "PAY" RATHER THAN "SETTLE", AND THE SPECIFIC REFERENCE TO THE FIRST PARAGRAPH OF 28 U.S.C. SEC. 2672, WHICH CONTAINS NO MENTION OF THE USE OF THE PERMANENT APPROPRIATION, SUGGEST THE POSSIBILITY THAT CONGRESS MAY NOT HAVE INTENDED THAT THE PERMANENT APPROPRIATION BE AVAILABLE FOR SETTLEMENTS UNDER SECTION 2669(F). IN OTHER WORDS, READING THE STATUTORY LANGUAGE LITERALLY, IT IS POSSIBLE TO ARGUE THAT CONGRESS CONFERRED SETTLEMENT AUTHORITY ONLY TO THE EXTENT THAT THE AWARDS COULD BE PAID FROM AGENCY FUNDS.

A SEARCH OF THE LEGISLATIVE HISTORY OF 22 U.S.C. SEC. 2669(F), 22 U.S.C. SEC. 1474(5), AND 38 U.S.C. SEC. 236 DISCLOSES NO REASON FOR THE SPECIFIC REFERENCE TO THE FIRST PARAGRAPH OF 28 U.S.C. SEC. 2672 RATHER THAN TO THE ENTIRE SECTION. ADDITIONALLY, THE LEGISLATIVE HISTORY OF THE 1966 AMENDMENT, PUB. L. NO. 89-506, IS SILENT WITH RESPECT TO ITS APPLICABILITY TO THE "FOREIGN TORT" STATUTES. HOWEVER, IN ANALYZING THE PROBABLE CONGRESSIONAL INTENT, THE CHRONOLOGY OF THE VARIOUS STATUTES IS RELEVANT:

- 1946: ENACTMENT OF FEDERAL TORT CLAIMS ACT; $1,000 CEILING ON ADMINISTRATIVE SETTLEMENTS.

- JULY 27, 1956: ENACTMENT OF 31 U.S.C. SEC. 724A; APPLICABLE ONLY TO JUDGMENTS.

- AUGUST 1, 1956: ENACTMENT OF 22 U.S.C. SEC. 2669 (PUB. L. NO. 84 885, 70 STAT. 890).

- 1959: LIMIT ON ADMINISTRATIVE SETTLEMENTS UNDER 28 U.S.C. SEC. 2672 RAISED FROM $1,000 TO $2,500.

- 1965: ENACTMENT OF 38 U.S.C. SEC. 236 (PUB. L. NO. 89-300, 79 STAT. 1110).

- 1966: REMOVAL OF CEILING ON ADMINISTRATIVE SETTLEMENTS UNDER 28 U.S.C. SEC. 2672 AND EXPANSION OF 31 U.S.C. SEC. 724A TO INCLUDE SUCH AWARDS IN EXCESS OF $2,500.

WHEN CONGRESS ENACTED 22 U.S.C. SEC. 2669(F), ALL ADMINISTRATIVE AWARDS UNDER THE FEDERAL TORT CLAIMS ACT HAD TO BE PAID FROM AGENCY FUNDS. THUS, THE REFERENCE TO THE FIRST PARAGRAPH OF 28 U.S.C. SEC. 2672 COULD NOT HAVE BEEN SPECIFICALLY INTENDED TO EXCLUDE THE USE OF THE PERMANENT APPROPRIATION (THAT IS, TO TREAT THESE SETTLEMENTS DIFFERENTLY FROM SETTLEMENTS UNDER THE FEDERAL TORT CLAIMS ACT) BECAUSE THE PERMANENT APPROPRIATION WAS NOT AVAILABLE FOR SECTION 2672 AWARDS AT ALL UNTIL 1966.

BASED ON OUR REVIEW OF THE PERTINENT STATUTES AND LEGISLATIVE HISTORIES, IT SEEMS TO US THAT THE CONGRESSIONAL PURPOSE WAS TO CONFER ADMINISTRATIVE SETTLEMENT AUTHORITY FOR TORTS ARISING IN FOREIGN COUNTRIES TO THE SAME EXTENT SUCH AUTHORITY EXISTED FOR TORTS ARISING IN THE UNITED STATES UNDER THE FEDERAL TORT CLAIMS ACT. THIS IS SUPPORTED BY THE REFERENCE IN 22 U.S.C. SEC. 2669(F) TO 28 U.S.C. SEC. 2672 "AS AMENDED." WHEN SECTION 2669 WAS ENACTED IN 1956, THE ONLY AMENDMENT THAT HAD BEEN MADE TO SECTION 2672 WAS THE REMOVAL OF THE REQUIREMENT FOR SPECIFIC APPROPRIATIONS (DISCUSSED ABOVE). THUS, THE EFFECT OF THE WORDS "AS AMENDED" WAS THAT THE CLAUSE "WHEN FUNDS ARE APPROPRIATED THEREFOR" IN THE FIRST SENTENCE OF SECTION 2669 DID NOT APPLY TO SUBSECTION (F), THAT IS, THE AUTHORITY UNDER SUBSECTION (F) WAS IDENTICAL TO THAT FOR DOMESTIC TORTS UNDER THE FEDERAL TORT CLAIMS ACT. IN OUR OPINION, THE SPECIFIC REFERENCE TO THE FIRST PARAGRAPH OF SECTION 2672 WAS INCLUDED SIMPLY TO MAKE IT CLEAR THAT THE AUTHORITY BEING CONFERRED WAS LIMITED TO ADMINISTRATIVE SETTLEMENT AUTHORITY AND DID NOT INCLUDE THE RIGHT TO SUE. SEE LESTER S. JAYSON, HANDLING FEDERAL TORT CLAIMS: ADMINISTRATIVE AND JUDICIAL REMEDIES SEC. 6.12(2). IN VIEW OF THE THEN-EXISTING STRUCTURE OF 28 U.S.C. SEC. 2672, WE CAN THINK OF NO OTHER REASON THE STATUTE WOULD HAVE BEEN WRITTEN THIS WAY.

ON THE PREMISE THAT CONGRESS INTENDED TO CONFER ADMINISTRATIVE SETTLEMENT AUTHORITY COEQUAL WITH THAT UNDER THE FEDERAL TORT CLAIMS ACT, IT SEEMS LOGICAL THAT ANY AMENDMENTS TO ANY OF THE PARAGRAPHS OF 28 U.S.C. SEC. 2672 SHOULD AUTOMATICALLY APPLY, ABSENT SOME INDICATION OF CONGRESSIONAL INTENT TO THE CONTRARY, TO THOSE AGENCIES WHOSE AUTHORITY TO SETTLE FOREIGN TORT CLAIMS REFERS TO AND IS BASED ON THAT SECTION.

WE CONCLUDE THEREFORE THAT 31 U.S.C. SEC. 724A IS AVAILABLE FOR ADMINISTRATIVE AWARDS IN EXCESS OF $2,500 MADE UNDER THE AUTHORITY OF 22 U.S.C. SEC. 2669(F), 22 U.S.C. SEC. 1474(5), AND 38 U.S.C. 236. THIS CONCLUSION APPLIES EQUALLY TO THE INDUSTRY AND TRADE ADMINISTRATION AND UNITED STATES TRAVEL SERVICE, WITH ONE IMPORTANT QUALIFICATION. THE AUTHORITY FOR THESE TWO BUREAUS IS, AS NOTED ABOVE, PROVIDED IN ANNUAL APPROPRIATION ACTS AND IS NOT PERMANENT LEGISLATION. UNLESS THE AUTHORITY IS MADE PERMANENT, ITS CONTINUING EXISTENCE WILL DEPEND ON ITS CONTINUING INCLUSION IN THE APPROPRIATION ACTS.

AWARDS IN EXCESS OF $2,500 UNDER THE VARIOUS "FOREIGN TORT" STATUTES MAY ACCORDINGLY BE CERTIFIED FOR PAYMENT FROM ACCOUNT 20X1741 IN THE SAME MANNER AS ADMINISTRATIVE AWARDS UNDER THE FEDERAL TORT CLAIMS ACT (THAT IS, PROCEDURES IN 28 C.F.R. PART 14 MUST BE FOLLOWED, DOCUMENTS MUST BE PROPERLY EXECUTED, AND THE SUBMISSION SHOULD CITE THE CORRECT AUTHORITY FOR THE SETTLEMENT AND SHOULD INCLUDE ADEQUATE DOCUMENTATION TO ENABLE GAO TO DETERMINE THAT THE CLAIM IS PROPERLY COGNIZABLE UNDER THE CITED AUTHORITY).