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January 14, 1955


The opinion of the court was delivered by: Platt, District Judge.

The defendant, the United States of America, by the United States Attorney, presents a motion to dismiss the complaint for the following reasons:

1. It fails to state a claim upon which relief can be granted;

2. The plaintiff lacks jurisdiction over all the defendants;

3. No defendant has consented to be sued;

4. The United States was not and is not the employer of any person or agency which is alleged to have negligently caused injury to the plaintiff.

The United States also argues that. Public Law 397 of the 82nd Congress, Title 5 U.S.C.A. § 150k-1 provides that the Army and Air Force Exchange Service may obtain, for its employees, compensation insurance for death or disability incurred in course of employment, and this remedy is exclusive. The United States Attorney, by amendment, joined the Chanute Air Force Base Exchange and Air Force Exchange Service as parties to the motion to dismiss.

The plaintiff, a civilian employee of Chanute Air Force Base Exchange, brought this action under the Federal Tort Claims Act, Title 28 U.S.C.A. § 2671 et seq., against the three defendants to recover for personal injuries received in the course of employment as result of the negligence of defendants.

At the outset in determining the validity of the motion it must be borne in mind that a complaint is not subject to dismissal unless it appears to a certainty that the plaintiff cannot possibly be entitled to relief under any set of facts which could be proved in support of the allegations. Chicago & Northwestern R. v. First National Bank of Waukegan, 7 Cir., 200 F.2d 383. This court*fn1 is not deciding that plaintiff has a claim upon which relief can be granted for the reason this cannot be ascertained until proof is made.

The defendants in their argument maintain that a post exchange is not an agency of the United States and this suit does not come within the meaning of the Tort Claims Act. Section 2671, Title 28 U.S.C.A., defines "Federal agency" as the executive departments, independent establishments and instrumentalities of the United States. "`Employee of the government'" includes members of the military or naval forces of the United States. An officer of the armed forces is usually in executive control of an exchange.*fn2 These definitions would include an exchange as a "Federal agency" and the officer in charge as an "employee" of the government.

This court believes that the case of Standard Oil Co. v. Johnson, 816 U.S. 481, 62 S.Ct. 1168, 86 L.Ed. 1611, is decisive in holding that the Army Exchange is an instrumentality of the United States. The State of California imposed a license tax measured by gallonage on the privilege of distributing motor vehicle fuel. By the State Act the tax was to be inapplicable "to any motor vehicle fuel sold to the government of the United States or any department thereof for official use of said government". St. 1923 Cal. p. 571 et seq., § 10, as amended by St. 1927 Cal. p. 1309. A distributor sold gasoline to an Army Post Exchange' in California and was required to pay the tax. The Supreme Court of California [218 Cal. 126, 22 P.2d 3] held that the exchange was not the "government of the United States or any department thereof", basing its decision on the relationship between the exchange and the United States Government. The United States Supreme Court held that whether exchanges are the "government of the United States or any department thereof" was a federal question. The California Supreme Court was reversed and in the decision the Supreme Court described the status of exchanges saying [316 U.S. 481, 62 S.Ct. 1169]:

    "On July 25, 1895, the Secretary of War, under
  authority of Congressional enactments promulgated
  regulations providing for the establishment of
  post exchanges. These regulations have since been
  amended from time to time and the exchange has
  become a regular feature of Army posts. That the

  and control of post exchanges have been in
  accordance with regulations rather than specific
  statutory directions does not alter their status,
  for authorized War Department regulations have
  the force of law.
    "The commanding officer of an Army Post,
  subject to the regulations and the commands of
  his own superior officers, has complete authority
  to establish and maintain an exchange. He details
  a post exchange officer to manage its affairs.
  This officer and the commanding officers of the
  various company units make up a council which
  supervises exchange activities. None of these
  officers receives any compensation other than his
  regular salary. The object of the exchanges is to
  provide convenient and reliable sources where
  soldiers can obtain their ordinary needs at the
  lowest possible prices. Soldiers, their families,
  and civilians employed on military posts here and
  abroad can buy at exchanges. The government
  assumes none of the financial obligations of the
  exchange. But government officers, under
  government regulations, handle and are
  responsible for all funds of the exchange which
  are obtained from the companies or detachments
  composing its membership. Profits, if any, do not
  go to individuals. They are used to improve the
  soldiers' mess, to provide various types of
  recreation, and in general to add to the pleasure
  and comfort of the troops.
    "From all of this, we conclude that post
  exchanges as now operated are arms of the
  government deemed by it essential for the
  performance of governmental functions. They are
  integral parts of the War Department, share in
  fulfilling the duties entrusted to it, and
  partake of whatever immunities it may have under
  the constitution and federal statutes. In
  concluding otherwise the Supreme Court of
  California was in error."

It is obvious in the Johnson case that the Supreme Court recognized the issue as to whether or not under federal law an exchange was a "Federal agency." It concluded that gas sold to exchanges was not subject to tax because under federal law exchanges are "`the government of the United States or any department thereof.'" Its decision was not based on the ground that such a tax would be a burden to the federal government, thus distinguishable here on the ground that exchanges are "Federal agencies" only for the purpose of taxation. While it was argued that if the California Act required exchanges to pay such a ...

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