Brady v. Roosevelt Steamship Co

In Brady v. Roosevelt Steamship Co., 317 U.S. 575, 63 S.Ct. 425, 87 L.Ed. 471 (1943), the Supreme Court was confronted with an analogous argument. The Steamship Company, a privately owned corporation, operated a ship owned by the United States Maritime Commission. A customs inspector was climbing a ladder on the ship when a rung broke, and the resulting injuries caused his death. His widow, Brady, brought a wrongful death action against the Steamship Company. The question was whether the case should be dismissed on the ground that the remedies provided by the Suits in Admiralty Act, i.e., a libel in personam against the United States or the Maritime Commission, were exclusive. The Court held that the Suits in Admiralty Act did not bar suits against private agents, because there was nothing in the legislative history to suggest that the Act "was designed to abolish all remedies which might exist against a private company for torts committed during its operation of government vessels under agency agreements." 317 U.S. at 579, 63 S.Ct. at 427. According to the Court, "when it comes to the utilization of corporate facilities in the broadening phases of federal activities in the commercial or business field, immunity from suit is not favored." Id. at 580, 63 S.Ct. at 428. The withdrawal of the right to sue the agent for his torts would result at times in a substantial dilution of the rights of claimants. Assuming that the ordinary rules of agency apply in determining whether the United States or the Maritime Commission is responsible under Sec. 2 of the Suits in Admiralty Act for torts of private operators such as respondent, there would be instances where unless the private operator was liable no one would be. The principal is not liable for every negligent act of his agent. Id. at 581, 63 S.Ct. at 428. The Steamship Company tried to avoid this result by arguing, like Travelers, that the United States was contractually obligated to pay the judgment and thus was the real party in interest. The Court was not persuaded: If petitioner had a cause of action against respondent, it is difficult to see how she could be deprived of it by reason of a contract between respondent and the Commission. Immunity from suit on a cause of action which the law creates cannot be so readily obtained.... The rights of principal and agent inter se are not the measure of the rights of third persons against either of them for their torts.... The question is not whether the Commission had authority to delegate to respondent responsibility for managing and operating the vessel as its agent. It is whether respondent can escape liability for a negligent exercise of that delegated power if we assume that by contract it will be exonerated or indemnified for any damages it must pay. As stated in Sloan Shipyards Corp. v. Emergency Fleet Corp., supra, pp. 566-567 42 S.Ct. at pp. 388 "the general rule is that any person within the jurisdiction always is amenable to the law. If he is sued for conduct harmful to the plaintiff his only shield is a constitutional rule of law that exonerates him." Furthermore, if the United States were to become the real party in interest by reason of a contract for exoneration or indemnity, a basic alteration in that concept ... would be made, not pursuant to a Congressional policy but by reason of concessions made by contracting officers of the government. Such a change would be detrimental to the interests of private claimants, as we have said, since it would subtract from the legal remedies which the law has afforded them. Beyond that it would make the existence of a right to exoneration or indemnity a jurisdictional fact. That could hardly help but complicate and delay the enforcement of rights based on these maritime torts. At least in the absence of a clear Congressional policy to that end, we cannot go so far. 317 U.S. at 583-84, 63 S.Ct. at 429-30.