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ARNOLD v. AERMOTOR

August 17, 1965

Patricia ARNOLD, Executrix of the Estate of Jake Arnold, Deceased,
v.
AERMOTOR, INC.



The opinion of the court was delivered by: KRAFT

 Plaintiff seeks recovery from defendant under the Pennsylvania Survival and Wrongful Death Statutes. Before us now is defendant's motion to join the United States as a party plaintiff.

 The complaint alleges, in substance, that plaintiff's decedent, an employee of the United States Coast and Geodetic Survey, while in the performance of his duty, sustained serious injuries from which he subsequently died, as the result of a fall from a metal tower, designed, manufactured and sold to the United States by the defendant. Plaintiff bases her claim on allegations of defendant's negligence and breach of warranty.

 Defendant asserts, in support of its motion, that the United States is a partial subrogee of plaintiff's claim under the provisions of the Federal Employees' Compensation Act, 5 U.S.C. § 751 et seq.; that, as such partial subrogee, the United States has a joint interest with plaintiff in this action, within the meaning of Rule 19(a), and is a real party in interest under Rule 17(a), of the Federal Rules of Civil Procedure; that, therefore, the United States ought to be joined as party plaintiff, if complete relief is to be accorded and defendant protected from defending a subsequent separate action by the United States.

 After full consideration we conclude that, under the facts and the applicable law, the United States is not a "real party in interest," and has no "joint interest" with plaintiff in this action.

 To qualify it as a real party in interest, the United States must be found to have a substantive right against defendant. United States v. Aetna Surety Co., 338 U.S. 366, 377, 381, 70 S. Ct. 207, 94 L. Ed. 171 (1949). We look to the provisions of the Federal Employees' Compensation Act to determine any rights the United States may have against defendant. Section 26 of the Act, 5 U.S.C. § 776, provides:

 
"If an injury or death for which compensation is payable under sections 751-756, 757-781, 783-791 and 793 of this title is caused under circumstances creating a legal liability upon some person other than the United States to pay damages therefor, the Secretary may require the beneficiary to assign to the United States any right of action he may have to enforce such liability of such other person or any right which he may have to share in any money or other property received in satisfaction of such liability of such other person, or the Secretary may require said beneficiary to prosecute said action in his own name. Any employee who is required to appear as a party or witness in the prosecution of said action is, while so engaged, in an active duty status.
 
"If the beneficiary shall refuse to make such assignment or to prosecute said action in his own name when required by the Secretary, he shall not be entitled to any compensation under sections 751-756, 757-781, 783-791 and 793 of this title.
 
"The cause of action when assigned to the United States may be prosecuted or compromised by the Secretary, and if the Secretary realizes upon such cause of action, he shall apply the money or other property so received in the following manner: After deducting the amount of any compensation already paid to the beneficiary and the expense of such realization or collection, which sum shall be placed to the credit of the employees' compensation fund, the surplus, if any, shall be paid to the beneficiary and credited upon any future payments of compensation payable to him on account of the same injury."
 
"If an injury or death for which compensation is payable under this chapter is caused under circumstances creating a legal liability in some person other than the United States to pay damages therefor, and a beneficiary entitled to compensation from the United States for such injury or death receives, as a result of a suit brought by him or on his behalf, or as a result of a settlement made by him or on his behalf, any money or other property in satisfaction of the liability of such other person, such beneficiary shall, after deducting the costs of suit and a reasonable attorney's fee, apply the money or other property so received in the following manner:
 
(A) If his compensation has been paid in whole or in part, he shall refund to the United States the amount of compensation which has been paid by the United States and credit any surplus upon future payments of compensation payable to him on account of the same injury. Any amount so refunded to the United States shall be placed to the credit of the employees' compensation fund.
 
(B) If no compensation has been paid to him by the United States, he shall credit the money or other property so received upon any compensation payable to him by the United States on account of the same injury."

 We think it clear that the United States has no substantive right against the alleged tortfeasor in the absence of an assignment under 5 U.S.C. § 776, supra. In our view the statutory provision furnishes the exclusive remedy, and resort may not be had to common-law remedies. "Where an Act of Congress deals with the subjects to which it relates, that Act is paramount and exclusive, and recovery, if at all, must be had in the mode and by and for the persons, and for the reasons, designated in the Act." ...


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