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Dupree v. United States.

decided as amended march 10 1959.: February 24, 1959.


Author: Kalodner

Before McLAUGHLIN, KALODNER and HASTIE, Circuit Judges.

KALODNER, Circuit Judge.

Can an action for damages be maintained against the United States under the Federal Tort Claims Act*fn1 on a claim premised upon an alleged negligent interference with a merchant seaman's prospective economic advantage, viz., future employment?

That is the critical question presented by this appeal from the Order of the District Court dismissing a complaint filed by Eugene Dupree, a licensed ship's master, charging alleged negligent withholding of a security clearance by the Commandant of the United States Coast Guard in the course of enforcement of the government's merchant seamen screening program.

The merchant seamen screening program is administered by the United States Coast Guard under the Magnuson Act, Executive Order 10173, as amended,*fn2 and regulations promulgated thereunder by the Commandant of the Coast Guard.*fn3 Pursuant to their provisions, Dupree's security clearance was withheld by the Commandant upon his determination that there was reason to believe that he was affiliated with or sympathetic to subversive or disloyal organizations. After a lapse of some five years Dupree was ultimately given a clearance.The facts relating to the denial of the clearance and its ultimate issuance are detailed in our prior opinion, Dupree v. United States, 3 Cir., 1957, 247 F.2d 819, rehearing denied, wherein we affirmed the judgment of the District Court*fn4 dismissing Dupree's complaint.

In the opinion cited we specifically noted with respect to Dupree's complaint that "It contains no allegations of negligence, nor does it describe any conduct of any employee of the Government as being wrongful" and "There is no allegation of lack of due care in the application of the regulations to Dupree"; that the complaint in substance merely alleged "insufficiencies in the administrative procedure such as the failure to afford a hearing prior to the initial determination" etc. and was "based upon nothing more than the invalidity of the regulations under which his security clearance was processed."

On the score of the allegations of "insufficiencies in the administrative procedure" and the "invalidity of the regulations" we held that "Where government employees act pursuant to and in furtherance of regulations, resulting harm is not compensable under the act [Federal Tort Claims Act] * * * except where they do not exercise due care." In doing so we observed that the Tort Claims Act did not contemplate a remedy for damages sustained by reason of the application of invalid laws or regulations.

It may also be noted that, although the District Court in its opinion had premised its dismissal of Dupree's original complaint on the ground that it was barred by the discretionary function exception of the Act,*fn5 we specifically stated that the case in its then posture did not require decision as to the applicability of the discretionary function exception since there was absent any allegation that the Coast Guard had failed to use due care in the application of the regulations.

It must further be stated that in the earlier litigation we did not reach the issue which we consider critical in the instant appeal, viz., does the Tort Claims Act permit maintenance of a claim for damages for negligent interference with future employment.

The issue is squarely presented now, although, as in the initial litigation, the parties have made no reference to it, either below or here. Instead they have focused their contentions on other grounds: Dupree urges that his present complaint presents a "new" cause of action based upon "unreasonable, unjustifiable and negligent" interference with, and "invasion" of his "right to obtain employment", with specific allegation of "absence of reasonable care" and, should it be regarded "as an amended complaint", it is permissible under Rule 15(a), Fed.R.Civ.P. 28 U.S.C. or, in the alternative, this Court can, and should, grant permission to file an amended complaint; the government, in reply, says the instant appeal brings the same cause of action before the Court as the original complaint and presents only questions of pleading and procedure and (1) the District Court correctly held it was without power to entertain the second complaint or to permit an amendment, (2) this Court should not grant permission to amend, and, (3) the prior judgment, dismissing Dupree's complaint for failure to state a cause of action, is res judicata and bars the instant action.

It would serve no useful purpose to discuss the contentions recited inasmuch as we are of the opinion that in the interest of expeditious administration of justice we must at once come to grips with the issue which must ultimately be decided even should we subscribe to any of the points raised by Dupree.

We are of the opinion that by its clear terms the Tort Claims Act, in Section 2680(h), excludes invocation of the relief granted by the Act in instances where there is interference, negligent or otherwise, by a government employee or officer, with contractual rights of an aggrieved individual.

It is plain from Dupree's complaint that he seeks recovery for negligent interference by a government agent or agency with his prospective employment.*fn6 In his brief he stressed the elements of the tort of interference with his prospective economic advantage and his reliance on it as the basis of his claim for damages, stating:

"The complaint's paragraphs 4 and 7 allege that the United States Coast Guard, from September 1950 until November 1955, refused to permit third parties to employ the plaintiff. Plaintiff is a resident of Pennsylvania, ...

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