Before BIGGS, Chief Judge, and McLAUGHLIN and HASTIE, Circuit Judges.
Jurisdiction in the case at bar is asserted under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680, to recover damages for property damage and personal injuries suffered by the plaintiffs-appellants, when the car in which they were riding on September 21, 1958, ran into a large boulder that had fallen from a steep embankment onto the Penn-Lincoln Parkway in Pittsburgh, Pennsylvania. The portion of the Penn-Lincoln project at which the boulder had fallen and the accident occurred was constructed with a 50% grant-in-aid from the federal government under the federal aid highway program. See 23 U.S.C. §§ 1-175 (1952 ed.).*fn1 The court below, on motion for summary judgment made by the appellee, the United States, pursuant to Rule 56, Fed.R.Civ.Proc., 28 U.S.C., entered judgment for the United States, basing that judgment on, among other things, Section 288 of the Restatement of the Law of Torts.*fn2 The court below held in substance that assuming for the purposes of the motion for summary judgment that there was no adequate inspection or supervision of the highway by the Secretary of Commerce and that such an inspection was a duty made mandatory by 23 U.S.C. § 13, nonetheless the United States could not be liable for damages under the law of Pennsylvania. The court did not deal with the contentions of the United States that the claims were based on the discretionary-function exception of the Tort Claims Act, 28 U.S.C. § 2680(a), and that Section 7 of the Federal-Aid Road Act of 1916, 23 U.S.C. § 48, excepts the United States from liability.*fn3 The United States approaches the problem in this court by making the correct primary assertion that there can be no liability in tort in Pennsylvania, as elsewhere, unless a defendant is guilty of a breach of some legal duty owed by him to the plaintiff. Zayc v. John Hancock Mut. Life Ins. Co., 338 Pa. 426, 430-431, 13 A.2d 34, 36-37 (1940). The plaintiffs assert that the Federal Highway Program imposed a duty, owing the travelling public, on the United States to make sure that the segment of the road on which the accident occurred was constructed and maintained properly. They contend that the United States failed to fulfill its duty in three respects: first, by causing to be approved by the Secretary of Commerce defective plans for the project submitted to it by the Pennsylvania Department of Highways pursuant to 23 U.S.C. § 12 and by participating in planning conferences held during the preparation of the defective plans; second, by failing to discover faulty construction by inspections carried out by the Bureau of Public Roads pursuant to 23 U.S.C. § 13; and third and last, by failing to provide for and make inspections after construction was completed which, according to the allegations of the complaint as amended, would have revealed defective maintenance by the Commonwealth of Pennsylvania. The last point is bottomed upon the periodic maintenance inspections conducted by the Bureau of Public Roads. See 23 U.S.C. §§ 15, 48 and Bureau of Public Roads Policy and Procedure Memorandum 21-11.1.
Since the motion for summary judgment was granted, we must accept appellants' version of the facts. See, e.g., Proctor v. Sagamore Big Game Club, 265 F.2d 196 (3 Cir.), cert. denied, 361 U.S. 831, 80 S. Ct. 81, 4 L. Ed. 2d 73 (1959). When the case is viewed in this light and the exception provisions of 28 U.S.C. § 2680 are, for the moment, put to one side, there is no doubt that under the law of Pennsylvania the United States must be deemed to have breached its duty to the plaintiffs, if the provisions referred to in the preceding paragraph of this opinion for approval of the project and for its inspection imposed duties for the benefit of the travelling public. See Bollin v. Elevator Construction & Repair Co., 361 Pa. 7, 63 A.2d 19, 6 A.L.R.2d 277 (1949). Should this be so, recovery may be had by the plaintiffs against the United States under the Federal Tort Claims Act, which provides that the government shall be held liable when injury or death is caused by the negligent or wrongful act or omission of an employee of the government while acting within the scope of his office or employment and under circumstances where the United States, if a private person, would be liable in accordance with the law of the place where the act or omission occurred, 28 U.S.C. § 1346(b). Our inquiry therefore must be directed toward ascertaining the intent of Congress in enacting the pertinent legislation.
Our conclusions are aided greatly by the relevant legislative history. We state preliminarily that when legislating in respect to roads Congress acts under the authority conferred upon it by Article I, Section 8, of the Constitution to regulate interstate commerce, to establish post roads, and to provide by expenditure of tax revenues for the National Defense and the General Welfare. But it is clear nonetheless that the construction, maintenance and the regulation of highways have remained state functions. South Carolina State Highway Department v. Barnwell Bros., 303 U.S. 177, 187, 58 S. Ct. 510, 514, 82 L. Ed. 734 (1938). In the cited case Mr. Justice Stone said: "From the beginning it has been recognized that a state can, if it sees fit, build and maintain its own highways, canals and railroads and that in the absence of Congressional action their regulation is peculiarly within its competence, even though interstate commerce is materially affected. Minnesota Rate Cases [Simpson v. Shepard], 230 U.S. 352, 416 [33 S. Ct. 729, 57 L. Ed. 1511]. Congress not acting, state regulation of intrastate carriers has been upheld regardless of its effect upon interstate commerce. Id. With respect to the extent and nature of the local interests to be protected and the unavoidable effect upon interstate and intrastate commerce alike, regulations of the use of the highways are akin to local regulation of rivers, harbors, piers and docks, quarantine regulations, and game laws, which, Congress not acting, have been sustained even though they materially interfere with interstate commerce." 303 U.S. at 187-188, 58 S. Ct. at 515. In note 5 cited to the text, Mr. Justice Stone cites a large number of cases in which the Supreme Court has upheld state regulations materially affecting interstate commerce. In Maurer v. Boardman, 336 Pa. 17, 7 A.2d 466 (1939), aff'd sub nom. Maurer v. Hamilton, 309 U.S. 598, 60 S. Ct. 726, 84 L. Ed. 969 (1940), it was held that the highways in Pennsylvania are owned by the Commonwealth and that their preservation and the maintenance of safety on them are a concern of the state. It seems clear from the Acts of Congress and their accompanying legislative history, that grants-in-aid under the Federal Highway Program were and are designed to encourage states to construct their own highways and that the primary function of the Bureau of Public Roads, in approving plans submitted to it by a state and inspecting roads during and after construction, is that of making sure that federal appropriations are being utilized properly and efficiently by the respective states and are not being wasted.
Funds appropriated by Congress for the highway program are apportioned to the states according to a statutory formula, 23 U.S.C. §§ 21, 21a, 21a-2. The states then create general programs to employ these funds and prepare estimates for each project. 23 U.S.C. § 12. Construction contracts are awarded by the states. The states pay the contractor and the respective states become and remain responsible for supervision of construction and for the maintenance of the highways after completion. 23 U.S.C. §§ 13, 15. The states are at all times the owners of the roads and are primarily responsible for their operation.
Under the Federal Highway Program the Bureau of Public Roads approves the projects and detailed plans of construction submitted by the respective states before it assumes any obligation to reimburse any state for a percentage of construction costs. 23 U.S.C. § 12. It also assures itself, by inspection, that the construction is in accordance with the plans agreed upon. 23 U.S.C. §§ 13, 14, albeit subject to the direct supervision of the state. 23 U.S.C. § 13. If the Bureau decides that a state is not maintaining properly a highway constructed with funds supplied by the United States it notifies the state and if, within a specified time, proper maintenance is not effected, federal aid funds are withheld in the future. 23 U.S.C. §§ 15 and 48.
The statutory scheme shows a weighting of the functions to be performed by the states and the Bureau of Public Roads, acting for the United States. The states are given what has been aptly described as "operational control" of the projects. Congress gave the Bureau veto power insofar as the use of federal funds were concerned.
The legislative history of the original Federal-Aid Road Act of 1916, 39 Stat. 355, makes the intent of Congress, at least insofar as that Act was concerned, clear indeed. During the period of time in which the Penn-Lincoln project was designed and constructed, the obligation of the Bureau of Public Roads to approve construction plans, to inspect the roads during their construction, and to withhold funds if the states failed to maintain properly highways constructed with federal funds was imposed on the Bureau by the statutes referred to above. All find their source in the Federal-Aid Road Act of 1916.*fn4
H.R. 7617, which, as amended, became the Federal-Aid Road Act of 1916, was reported by the House Committee on Roads with the note that "primarily roads are local concerns and jurisdiction over them belongs to the States and local authorities." H.Rep.No. 26, 64th Cong., 1st Sess. p. 4. But, "while the States and local authorities ought not to be ousted from jurisdiction over roads within their borders, yet Federal funds appropriated for roads must be rigidly safeguarded. It must be seen to that every dollar of this money expended secures a dollar's worth of road construction and road maintenance. To accomplish this, very large discretionary powers have, by this bill, been given to the Secretary of Agriculture."*fn5 Id., at pp. 4-5. That the purpose of the powers given to the federal government was to protect public funds is made clear by the comments of Representative Saunders, a member of the House Committee on Roads, who stated:
"As I said, if a project of road development is desired to be submitted by a State, that State approaches the Federal Government through its road commission.
"In other words, the unit is the State. The representative of that commission presents the project to the Agricultural Department, giving a sufficient outline of the improvement desired to enable the experts of the Agricultural Department to determine in advance whether the proposition is, or is not, meritorious. Then if the department is inclined to think that the proposition thus presented is meritorious, and worthy of aid out of that proportion of the general fund which is segregated for that particular State, it may call upon the State to furnish further information, and such data, estimates, and plans as will enable the experts of the department to determine the cost of construction, and the full merits of the project, in a word to determine in relation to the case submitted everything that the Federal department ought to know before reaching its conclusions.
"Having advanced thus far, if the department approves the project as a whole, the State is authorized to proceed with the work. When the work is concluded, and it is ascertained by the Federal department through its appropriate agents, that the work has been done according to the plans approved by its experts, then the department may make payment of the sum which has been decided upon for this particular project of road construction, improvement, or maintenance. Will any gentleman on this floor suggest that up to this point there is anything of authority lacking to the Federal Government to enable it to safeguard the expenditure of its money, or to compel the construction of the improvements contemplated, upon the terms agreed on between the contracting sovereignties?" 53 Cong.Rec. 1281.
Representative Saunders stated that the federal interest was protected by the provisions for inspection during construction to insure that work should be done in accordance with the approved plans and a colloquy ensued between him ...