United States District Court, Eastern District of Illinois
March 25, 1966
MARY E. PHILLIPS, PLAINTIFF,
ALMA V. TRAME, DEFENDANT, UNITED STATES OF AMERICA, INTERVENOR.
The opinion of the court was delivered by: Juergens, Chief Judge.
This action was instituted by Mary E. Phillips against Alma V.
Trame to recover damages for personal injuries suffered in an
automobile accident. The United States, pursuant to leave of
Court, filed its complaint in intervention to assert a claim
under the Federal Medical Care Recovery Act, 42 U.S.C. § 2651-2653,
for the reasonable value of hospital and medical care
and treatment furnished plaintiff by the United States. Plaintiff
is the wife of a member of the Armed Forces of the United States.
Defendant filed her motion to dismiss the complaint in
(1) that the complaint and the allegations thereof are
irrelevant and immaterial to plaintiff's cause of action;
(2) that the complaint in intervention attempts to assert a
right of action against the defendant, arising out of an accident
alleged in plaintiff's original complaint;
(3) that the complaint on its face shows that plaintiff is
entitled to hospital and medical care and treatment from the
United States and is not personally obligated to reimburse the
intervenor except by voluntary assignment;
(4) that plaintiff has alleged a voluntary assignment of her
claim for hospital and medical care and treatment to the United
States and it constitutes a contractual arrangement between
plaintiff and intervenor without the consent of defendant and is
a deprivation of defendant's rights under the due process clause
of the Constitution of both the United States and the State of
Illinois and is an unconstitutional exercise of administrative
power by the United States, is prejudicial to the citizens of the
United States and more particularly to the defendant;
(5) that to permit intervenor's complaint will allow a double
recovery on behalf of the intervenor and plaintiff
since the care was furnished free and repayment by the defendant
would constitute double payment to plaintiff and intervenor since
the services are a duty imposed upon the taxpayers by Congress;
(6) that the intervenor is obligated to furnish medical care
whether or not it is reimbursed for the services;
(7) that assignment of benefits or rights or claims of the
plaintiff is contingent upon the successful prosecution of
plaintiff's unliquidated claim and is therefore invalid and not
binding on plaintiff or defendant;
(8) that the amount claimed by intervenor is unreasonable,
arbitrary and bears no relation to the treatment furnished or
(9) that Title 42 § 2651 is invalid, unconstitutional and
results in deprivation of property without due process of law;
(10) that intervenor should be precluded from asserting its
claim in the principal action by plaintiff since plaintiff has no
personal interest in the recovery of medical expenses and such
information should be excluded from evidence presented to the
jury to avoid prejudice to defendant.
Section 2651, Title 42 U.S.C.A., provides in pertinent parts as
"(a) In any case in which the United States is
authorized or required by law to furnish hospital,
medical, surgical, or dental care and treatment * *
to a person who is injured * * *, under circumstances
creating a tort liability upon some third person * *
to pay damages therefor, the United States shall have
a right to recover from said third person the
reasonable value of the care and treatment so
furnished or to be furnished and shall, as to this
right be subrogated to any right or claim that the
injured or diseased person * * * has against such
third person to the extent of the reasonable value of
the care and treatment so furnished or to be
furnished. The head of the department or agency of
the United States furnishing such care or treatment
may also require the injured or diseased
person, * * *, to assign his claim or cause of action
against the third person to the extent of that right
"(b) The United States may, to enforce such right,
(1) intervene or join in any action or proceeding
brought by the injured or diseased person, * *
against the third person who is liable for the
injury * * *."
The purpose of the legislation, as shown by the Senate Report,
is to provide for the recovery by the United States from
negligent third persons for the cost of hospital, medical,
surgical or dental care and treatment furnished by the United
States pursuant to authority or requirement of law to a person
who is injured under circumstances creating tort liability under
such third person, and as was further stated in the Senate Report
the need for Congressional action was to effectuate the stated
purpose and was brought about as a result of the holding of the
United States Supreme Court in United States v. Standard Oil Co.,
332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067, in which the Supreme
Court denied recovery on the basis that the government did not
have a right of action against the negligent third party under
legislation in effect at that time.
In United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct.
1604, 91 L.Ed. 2067 (1947), the Court had for consideration the
question of whether or not the government was entitled to recover
amounts expended for hospitalization and soldier's pay for loss
of service of a soldier where the soldier received injuries as
the result of negligence of a third party. The Court first
determined that the creation or negation of liability was a
matter for federal rather than state law. The question as stated
by the Supreme Court was as follows:
"* * * The question, therefore, is chiefly one of
federal fiscal policy, not of special or peculiar
concern to the states or their citizens. And because
those matters ordinarily are appropriate for uniform
national treatment rather than diversified local
disposition, as well where Congress has not
acted affirmatively as where it has, they are more
fittingly determinable by independent federal
judicial decision than by reference to varying state
The Court further stated:
"When Congress has thought it necessary to take
steps to prevent interference with federal funds,
property or relations, it has taken positive action
to that end. We think it would have done so here, if
that had been its desire. This it still may do, if or
when it so wishes."
In declining recovery the Court stated:
"* * * Here the United States is the party
plaintiff to the suit. And the United States has
power at any time to create the liability. The only
question is which organ of the Government is to make
the determination that liability exists. That
decision, for the reasons we have stated, is in this
instance for the Congress, not for the courts. Until
it acts to establish the liability, this Court and
others should withhold creative touch."
As pointed out in the Senate Report appearing in the U.S. Code
Congressional and Administrative News, 87th Congress, Second
Session, 1962, p. 2637 et seq., the legislation under
consideration was enacted to fulfill a void made apparent by the
United States Supreme Court in their opinion in United States v.
Standard Oil Co., supra.
Following determination by the United States Supreme Court that
it was not the proper organ of the government to determine
liability in such situations and at the same time pointing a
finger at Congress as the proper organ, Congress enacted
legislation which it deemed necessary to fill the noted void.
It is noteworthy that the statute was enacted after extensive
studies by the various Congressional agencies, Congressional
hearings and after the Supreme Court had clearly stated that
Congress had the power at any time to create the liability.
The statute does not stand alone in providing recovery by the
government from negligent third parties. Provisions have been
made for similar recovery in the Federal Employees' Compensation
Act concerning benefits to injured civilian employees (5 U.S.C.A.
§ 751 et seq.). The principal of providing payment from negligent
third parties has also been recognized by Congress in the
Railroad Unemployment Insurance Act (45 U.S.C.A. § 362(o)) and
the Longshoremen's and Harbor Workers' Compensation Act (33
U.S.C.A. § 933).
The complaint in intervention fairly meets the requirements of
the statute creating the cause of action. That the statute
pursuant to which the intervening complaint proceeds is
constitutional seems hardly open to question for the reasons set
There remains for consideration the question of the
reasonableness of the amount claimed by the intervenor.
By Executive Order No. 11060 the President of the United States
delegated authority to the Director of the Bureau of the Budget
to prescribe regulations from time to time to determine and
establish rates that represent the reasonable value of hospital,
medical, surgical or dental care and treatment furnished or to be
furnished by the United States, and if upon the trial it develops
that the charges made are the result of action by the direction
of the Bureau of Budget, pursuant to executive order, then the
charges are not subject in this proceeding to the challenge that
they are unreasonable or arbitrary.
The Court finds that defendant's motion to dismiss the
complaint in intervention should be denied.
It is, therefore, the order of this Court that defendant's
motion to dismiss the complaint in intervention be and the same
is hereby denied.
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