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UNITED STATES v. GREENE

United States District Court, Northern District of Illinois, E.D


February 7, 1967

UNITED STATES OF AMERICA, PLAINTIFF,
v.
KILBOURNE H. GREENE, DEFENDANT, V. JACKIE S. O'GUIN, THIRD-PARTY DEFENDANT.

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

MEMORANDUM OPINION

This suit was brought by the United States under 42 U.S.C. § 2651*fn1 to recover from the defendant the reasonable value of medical care which the United States furnished a victim of the defendant's allegedly tortious conduct. The defendant has raised certain defenses under Illinois law which do not contest the alleged tortiousness of his conduct but which would preclude the tort victim from recovery at this time. These defenses are that the Illinois statute of limitations has run and that the tort victim has given defendant a release from all liability.

Plaintiff has moved to strike these defenses on the ground that while the preliminary question of whether defendant's conduct was tortious may be governed by state law, the United States right of recovery under section 2651 is independent of any procedural or contractual defenses which the tortfeasor might be able to assert against the tort victim under state law. In opposition to the motion to strike, the defendant argues that the United States stands in the legal "shoes" of the tort victim as subrogee of his claim and is therefore subject to all defenses available against the tort victim. The controversy over the nature of the right created in the government by section 2651 is based on the following language in the statute:

    "* * * 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 * * *."

Plaintiff, in support of its right of action, cites a law review article*fn2 which concludes that section 2651 created a separate right of action in the United States which is not subject to any state law procedural defenses which might be raised against an action instituted by the tort victim. The article cited by plaintiff relies in turn on the House of Representatives Judiciary Committee report on the bill.*fn3 In that report, the House Judiciary Committee amended the language of the bill from "the United States shall be subrogated to any right or claim that the injured or diseased person * * * has against such third person. * * *"*fn4 to the language presently in the statute.

The House report contains a number of somewhat enigmatic statements which purport to interpret the purpose of this amendment.*fn5 All these statements emphasize that the purpose of the amendment was to clarify an "independent" right of recovery in the United States, but none states that this independent right remained "subrogated" to the right of the victim.

An analysis of the legal concept of subrogation when coupled with the judicial history which stimulated the passage of the act convinces us that the United States does not stand solely in the shoes of the tort victim through subrogation. The right held by the United States under § 2651 is also a separate federal right which, when asserted, is not subject to procedural or contractual infirmities which might bar an action by the tort victim. However, the United States recovery may be barred by substantive defenses such as contributory negligence or lack of negligence.

"Subrogation" is a term of legal art which we assume would not be employed by the drafters of the statute unless they intended it to be construed in its normal sense. In legal context, subrogation is a derivative right held by one who, while under a legal or equitable obligation to another person, pays that person a debt owed by a third party. The right of the payor (subrogee) to seek reimbursement from the third party debtor is derived from, and generally dependent on, the existence of a right in the payee (subrogor) against the debtor.*fn6 If the payee collects from the debtor, the payor may get a refund from the payee. If, however, the payee fails to demand satisfaction from the debtor, the payor may assert the right of the payee against the debtor. The payor (subrogee), in seeking reimbursement from the third party debtor is subject to any defenses, procedural or substantive, which the third party debtor may have had against the payee (subrogor).*fn7 These defenses are available against the subrogee because he is merely asserting the subrogor's cause of action; he "stands in the shoes" of the subrogor.

Applying the concept of subrogation to the instant situation it is clear that the United States and the alleged tort victim, O'Guin, do not stand in a subrogee-subrogor relationship. A tort victim can only recover expenses which he has or will become liable to pay as a result of the tortious conduct. Since O'Guin was not liable to the government for the treatment he received,*fn8 he could not recover the reasonable value of the treatment from the alleged tortfeasor. Therefore no underlying obligation between the tort victim and the alleged tortfeasor exists here to which the government could be subrogated. In the true subrogation situation, it is the subrogee's payment of this underlying obligation which gives him the right to enforce the obligation.*fn9

The judicial history which stimulated the passage of § 2651 also clearly shows that the right created by the statute was not solely one of subrogation to the right of the tort victim. The need for a statutory right in the government to recover from a tortfeasor the reasonable value of medical treatment given a serviceman victimized by a tort was the first enunciated in United States v. Standard Oil of California, 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947). There, as here, the government sought to recover the reasonable value of medical care rendered a serviceman, a tort victim, after the serviceman had given the tortfeasor a release. The government sought to avoid the effect of the release by asserting a previously unrecognized right of recovery independent of the serviceman's cause of action. The Supreme Court characterized the government's claim as follows:

    "The Government's claim, of course, is not one for
  subrogation. It is rather for an independent
  liability owing directly to itself as for deprivation
  of the soldier's services and `indemnity' for losses
  caused in discharging its duty to care for him
  consequent upon the injuries inflicted by the
  appellants. * * * It is, in effect, for tortious
  interference by a third person with the relation
  between the Government

  and the soldier and consequent harm to the
  Government's interest, rights and obligations in that
  relation, not simply to subrogation to the soldier's
  rights against the tortfeasors." 332 U.S. at 304, n.
  5, 67 S.Ct. at 1606.

In holding that recognition of such novel rights should come from the Congress rather than the judiciary the court further discussed the nature of the rights asserted in light of analogous situations.

    "Bringing the argument down to special point,
  counsel has favored us with scholarly discussion of
  the origins and foundations of liabilities considered
  analogous * * *. These embrace particularly the
  liabilities created by the common law, arising from
  tortious injuries inflicted upon persons standing in
  various special legal relationships, and causing harm
  not only to the injured person but also, as for loss
  of services and assimilated injuries, to the person
  to whom he is bound by the relation's tie. Such, for
  obvious examples, are the master's rights of recovery
  for loss of the services of his servant or
  apprentice; the husband's similar action for
  interference with the marital relation, including
  loss of consortium as well as the wife's services;
  and the parent's right to indemnity for loss of a
  child's services, including his action for a
  daughter's seduction."*fn10

In all the varied causes of action listed above as well as the right asserted here under section 2651, the cause of action against the tortfeasor was an independent claim which could not be asserted by the victim. Thus the injured servant cannot seek damages for his master's loss of the servant's services; the injured wife, her husband's loss of consortium; nor the injured child, his parent's right to the child's services.

That the independent right asserted by the government in Standard Oil is the same right which the Congress intended to create through § 2651 is clear. Congress has acknowledged that the stimulus to passage of § 2651 was the directive of the Supreme Court in Standard Oil.*fn11 Our study of the judicial heritage of section 2651 convinces us the Congress did not intend to create only a right of subrogation. Furthermore, our attempted application of the legal analysis which underlies the concept of subrogation discloses the Congress could not have created a subrogation in the government for medical care it had dispensed even if Congress had so desired. The tortfeasor had no obligation to pay the tort victim for medical care which the victim had received gratis. Therefore, no underlying obligation existed which could support a subrogation analysis.

Since we conclude that the right of the government under § 2651 is a federal right separate from that of the tort victim, it follows that the tort victim did not have the power to contract away the right of the government. It also follows that the government's right is not subject to procedural infirmities which the victim's claim may have under state law. A federal cause of action is governed by federal rather than state procedure. We therefore grant plaintiff's motion to strike the defenses of the state statute of limitations and the release given by the tort victim.

The plaintiff's motion to strike certain of the defenses set forth in the answer is granted. An appropriate order will enter.


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