UNITED STATES OF AMERICA, PETITIONER V. UNITED SCOTTISH INSURANCE CO., ET AL. No. 82-1350 In the Supreme Court of the United States October Term, 1982 The Solicitor General, on behalf of the United States, petitions for a writ of certiorari to review the judgment of the United States Court of Appelas for the Ninth Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit PARTIES TO THE PROCEEDING Respondents not named in the caption are Kathryn Fleming, Maxine Cearley, Simone Weaver and John W. Dowdle. TABLE OF CONTENTS Opinions below Jurisdiction Statutory provisions involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-6a) is reported at 692 F.2d 1209. The opinion of the district court (App. B, infra, 7a-15a) and its findings of fact and conclusions of law (id. at 16a-27a) are not reported. The earlier opinion of the court of appeals is reported at 614 F.2d 188. JURISDICTION The judgment of the court of appeals was entered on October 8, 1982 (App. D, infra, 30a). On December 28, 1982, Justice Rehnquist extended the time within which to file a petition for a writ of certiorari to and including February 11, 1983. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISIONS INVOLVED 28 U.S.C. 2674 provides, in pertinent part: The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances * * * 28 U.S.C. 2680 provides, in pertinent part: The provisions of this chapter and section 1346(b) of this title (conferring jurisdiction on the district courts) shall not apply to (a) Any claim * * * based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused. * * * * * (h) Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights * * *. QUESTIONS PRESENTED 1. Whether the United States is liable under the Federal Tort Claims Act as a "private individual under like circumstances" for the Federal Aviation Administration's failure to discover a safety defect while carrying out its regulatory duty of certifying the airworthiness of aircraft in commercial aviation. 2. Whether a suit against the United States alleging that the FAA negligently certified an aircraft as airworthy as part of its efforts to regulate compliance with minimum safety standards is barred as a claim based upon the performance of a "discretionary function" within the meaning of 28 U.S.C. 2680(a). 3. Whether a suit against the United States alleging that the FAA negligently inspected and certified the installation of a heater into an airplane is barred as a "claim arising out of * * * misrepresentation" within the meaning of 28 U.S.C. 2680(h). STATEMENT 1. In the Federal Aviation Act of 1958, 49 U.S.C. (& Supp. IV) 1301 et seq., Congress has directed the Secretary of Transportation "to promote safety of flight of civil aircraft" by prescribing "minimum standards governing the design, materials, workmanship, construction, and performance of aircraft * * *." 49 U.S.C. 1421(a) and (1). At the same time, Congress has imposed a primary duty on "every person (in the aviation industry) engaged in operating, inspecting, maintaining, or overhauling equipment to observe and comply" with the statutory and administrative standards prescribed by the Secretary. 49 U.S.C. 1425(a). See also 49 U.S.C. 1421(b). In order to monitor adequately the aviation industry's compliance with these safety standards, Congress has created a multi-step process for certifying the safety of aircraft, and the Federal Aviation Administration ("FAA"), acting as the designee for the Secretary of Transportation, has promulgated extensive regulations establishing minimum safety standards that must be satisfied by the designer or manufacturer of an airplane at each step in the certification process. Each step culminates in the issuance of a certificate by the FAA; it is unlawful to operate an airplane that does not have a current "airworthiness certificate," which is the final stage in the certification process. 49 U.S.C. (& Supp. IV) 1430(a). Before introducing a new type of airplane, a manufacturer must first obtain a "type certificate," which requires FAA approval of the basic design of the aircraft. 49 U.S.C. 1423(a); 14 C.F.R. 21.11-21.53. The manufacturer supplies the FAA with blueprints and/or design drawings, which FAA employees examine for compliance with minimum safety standards. Through this process, which may take years to complete, a basic design is approved and a type certificate is issued. See generally National Academy of Sciences, Committee on FAA Airworthiness Certification Procedures, Improving Air Safety 19-20 (1980). The manufacturer then builds a prototype of the aircraft and applies for a "production certificate." 49 U.S.C. 1423(b); 14 C.F.R. 21.131-21.165. This certificate authorizes the manufacturer to produce copies of the prototype so long as they are identical to the "type" approved. The manufacturer must supply detailed information regarding materials used and production methods employed. 14 C.F.R. 21.143. In addition, FAA employees inspect the prototype and test fly it "to determine compliance with the applicable (safety standards)." 14 C.F.R. 21.157. After the manufacturer receives a production certificate, and assuming no limitations are imposed on the certificate, it may begin mass production of the approved aircraft. The manufacturer must, however, obtain an "airworthiness certificate" for each airplane that is assembled. This requires that the airplane be inspected to determine whether it conforms with the prior certifications and the minimum safety standards. 49 U.S.C. 1423(c); 14 C.F.R. 21.171-21.199. An additional certificate is required for aircraft that are altered by the introduction of a major change in the type design. 14 C.F.R. 21.113. In order to obtain a "supplemental type certificate" -- which is the certification step that is at issue in this case -- the applicant "must show that the altered product meets applicable airworthiness requirements * * *." 14 C.F.R. 21.115. Supplemental type certificates are the certificates most frequently issued by the FAA; last year more than 1800 were issued. In light of the extensiveness and complexity of the safety standards (14 C.F.R. 23.1-23.1589) and the large number of aircraft requiring certification, the FAA is unable to monitor or inspect directly every aspect of every design, prototype or assembled aircraft. Accordingly, consistent with the statutory scheme (49 U.S.C. 1425(a)), the regulations impose upon each applicant an obligation, inter alia, to "make all inspections and tests necessary to determine * * * (c)ompliance with the applicable airworthiness * * * requirements." 14 C.F.R. 21.33(b)(1). In addition, the vast majority of the FAA's inspections are performed by "designated engineering representatives," who typically are employees of the manufacturer or operator of the aircraft but are licensed by the FAA. 14 C.F.R. 183.29. For each aircraft, literally dozens of inspections are conducted by different individuals with engineering expertise in a particular area -- some federal employees but most not. /1/ The FAA-signed certificate does not indicate who conducted the inspection of any particular aspect of the aircraft. 2. On October 8, 1968, a DeHavilland Dove aircraft, owned and operated by an air taxi service doing business as Catallina-Vegas Airlines, crashed three minutes after taking off from Las Vegas, Nevada en route to San Diego, California. See 614 F.2d 188, 189 (1979). The pilot, co-pilot and two passengers were killed (ibid.). The cause of the crash was an in-flight fire located in the forward baggage compartments of the airplane. The airplane that crashed was manufactured in 1951 in the United Kingdom. At some point prior to 1965 the airplane was purchased by Air Wisconsin, another air taxi operator. In 1965, pursuant to a contract with Air Wisconsin, Aerodyne Engineering Corporation installed a gasoline fueled heater into both the DeHavilland Dove that crashed and a sister airplane also owned by the airline (614 F.2d at 190). Aerodyne applied for a supplemental type certificate (see page 4, supra) to authorize the installation. Thereafter, the heater was installed and the certificate was issued. /2/ In 1966, the airplane was sold to respondent Dowdle, who owned Catallina-Vegas Airlines. Dowdle sent a mechanic to Wisconsin to inspect the airplane; relying in part on the supplemental type certificate as an indication of the airworthiness of the airplane, Dowdle's mechanic recommended that the plane be purchased (Supp. Tr. 25). Between 1966 and the crash in 1968, Dowdle's employees inspected the aircraft on at least eight different occasions, including two major yearly inspections of the gasoline heater (Supp. Tr. 31). 3. In the wake of the crash, five law suits were filed against the United States under the Federal Tort Claims Act, 28 U.S.C. (& Supp. V) 2671 et seq., in the United States District Court for the Southern District of California. Three suits for wrongful death were filed by the estates of victims of the accident. One suit for property damage to the DeHavilland Dove was filed by the owner of the air taxi service, and one suit for monies paid for liability coverage on behalf of the owner of the plane was filed by a group of insurance companies. After trial, the district court entered judgment for the respondents. The court found that the crash occurred because the gasoline line leading to the heater was not adequately clamped to reduce vibration (Tr. 2466). The court concluded that the excessive vibration, coupled with a faulty connection in the line between copper and stainless steel tubing, allowed the gasoline to leak and ignite (Tr. 2474). Relying upon 14 C.F.R. 23.993, which requires fuel lines to have sufficient support to "prevent excessive vibration," the court held that the aircraft was not airworthy as "supplemented" and that the government was negligent in certifying an installation that did not comply with its regulations. The district court also found no contributory negligence on the part of any of the respondents. /3/ The court of appeals reversed (614 F.2d at 188). The court of appeals held that the district court erred in ruling that a federal statutory duty "automatically give(s) rise to a duty of care to which a state's negligence per se doctrine would be applied" (id. at 193). Rather, because the United States is liable only "in the same manner and to the same extent as a private individual under like circumstances," 28 U.S.C. 2674, "(t)he crucial inquiry is whether, in undertaking the inspection, a duty arose under state law because of the relationship thereby created -- the good samaritan rule" (614 F.2d at 194). The court of appeals expressly declined (id. at 190) to consider contentions that respondents' suits were barred by the discretionary function and misrepresentation exceptions to the Federal Tort Claims Act, 28 U.S.C. 2680(a) and (h), and instead remanded the case to the district court to determine whether the evidence was sufficient to support a finding of liability under the good samaritan doctrine. 4. On remand, the district court, after taking additional testimony, /4/ again entered judgment in favor of respondents. The court, applying California law (App. B, infra, 11a), found that California courts have recognized tort liability under the good samaritan rule as set forth in Sections 323 and 324A of the Restatement (Second) of Torts (1965). /5/ Although the district court was "reluctant to conclude (that) the government's inspection increased the risk of harm in 'some positive way'" (App. B, infra, 14a, quoting Blessing v. United States, 447 F.Supp. 1160, 1199 (E.D. Pa. 1978)), it determined that the United States was liable under the good samaritan rule because respondents "have demonstrated the requisite degree of reliance on the government's inspection and certification. The task of inspection, which is undertaken to protect passengers, is relied upon by such individuals, and if it is negligently performed, it gives rise to the very dangers it was intended to prevent" (App. B, infra, 14a). The court of appeals affirmed (App. A, infra, 1a-6a). The court of appeals held (id. at 3a) that the government had performed a "service" to decedents and the airline owner within the meaning of the good samaritan doctrine because "the F.A.A.'s regulatory activities are performed for the public as a whole" and "(w)hen voluntarily performing activities solely for the safety of the public, the F.A.A. performs a service for others." The court also concluded that, "(h)aving chosen to make aircraft safety inspections and to certify the result, the government reasonably could expect that members of the public would rely on the government's certification of airworthiness" (id. at 3a-4a). Having found that the district court properly imposed liability on the government under state tort law, the court of appeals considered whether respondents' claims were barred by either the misrepresentation or discretionary function exceptions to the Tort Claims Act. Relying in part on Neal v. Bergland, 646 F.2d 1178 (6th Cir. 1981), cert. granted, No. 81-1494 (May 24, 1982), the court ruled that the misrepresentation exception did not bar this action because "(t)he basis of the (respondents') claim * * * is not the misrepresentation or misinformation contained in the certificate, but the negligence of the F.A.A.'s inspection on which the airworthiness certificate was issued" (App. A, infra, 4a-5a). The court also rejected the discretionary function exception as a bar to this suit because, in light of the detailed FAA regulations, there was "no room for policy judgment" in the inspection and certification of the aircraft (id. at 5a-6a). Judge Chambers concurred (App. A, infra, 6a), stating that "(m)ost of us thought when the Federal Tort Claims Act was passed that the discretionary exception * * * would preclude recovery on the facts of the two cases we decide today, but the developing law seems to have overtaken us." Judge Chambers did not cite the "developing law" upon which he relied. REASONS FOR GRANTING THE PETITION The federal government engages in countless health and safety inspections pursuant to regulatory programs designed to protect the public interest. The issue whether the United States is liable to members of the general public under the Federal Tort Claims Act for the failure to discover and order correction of a safety or health hazard during the course of a regulatory inspection is thus a matter of the utmost importance. With regard to aviation litigation alone, more than 300 cases, with potential liability exceeding $3 billion, are currently pending against the United States. If the decision below is allowed to stand, it is reasonable to expect that the government would regularly be named as a defendant whenever an airplane accident may have been caused by a mechanical or design defect. /6/ Moreover, the court of appeals' interpretation of the Federal Tort Claims Act cannot be limited to aircraft litigation. If the failure of the FAA's massive safety inspection program to protect the public in this particular instance gives rise to tort liability, then the United States potentially is liable for the failure to protect against health, safety, or other hazards in virtually every industry engaged in interstate commerce. To cite just a few examples, the Nuclear Regulatory Commission inspects nuclear reactors, /7/ the Food and Drug Administration inspects and certifies the safety of drugs and food, /8/ the Federal Deposit Insurance Corporation inspects the financial records of federally-insured banks, /9/ the Occupational Safety and Health Administration inspects the safety and health conditions of most work environments, /10/ and the Mine Safety and Health Administration inspects the safety and health conditions of mines. /11/ Under all of these regulatory programs it could be said, with as much justification as here, that the United States is "voluntarily performing * * * a service for others" (App. A, infra, 3a) and should "expect that members of the public would rely" on the service (id. at 4a). The possible government liability under the court of appeals' approach is staggering. We submit that Congress could not have intended to expose the United States to monetary liability, essentially as an insurer, as a result of certifications and inspections undertaken to enforce compliance with minimum safety standards. The decision below disregards this Court's admonition that "when dealing with a statute subjecting the Government to liability for potentially great sums of money, (courts) must not promote profligacy by careless construction." Indian Towing Co. v. United States, 350 U.S. 61, 69 (1955). In addition, the ruling of the court of appeals cannot be reconciled with decisions of other courts, which have recognized that Congress did not intend to subject government regulatory activities, such as those performed by the FAA, to judicial supervision in the guise of adjudicating tort claims under the FTCA. Finally, the court of appeals engaged in only the most cursory examination of the discretionary function and misrepresentation exceptions to the Tort Claims Act and accordingly reached results inconsistent with decisions of both this Court and other courts of appeals. 1. The waiver of sovereign immunity in the Federal Tort Claims Act is subject to a significant limitation: the United States may be sued only in circumstances where liability could be imposed on a private individual. See 28 U.S.C. 1346(b) and 2674. Thus, Congress intended to make the federal government amenable to suit for "ordinary common-law torts" (Dalehite v. United States, 346 U.S. 15, 28 (1953) (footnote omitted)), such as automobile accidents involving government employees who drive negligently in the course of their employment. /12/ On the other hand, Congress plainly intended to protect the United States from suits based on "that class of tort on the part of government which has to do with a governmental function, so to speak." 86 Cong. Rec. 12021 (1940) (remarks of Rep. Gwynne). /13/ Regulatory conduct such as that performed by the FAA is engaged in solely by the government; thus, if the immunity for governmental functions is to have any meaning, it must be applicable where, as here, the government performs its unique law enforcement role over private industry. Since the Tort Claims Act does not waive sovereign immunity in situations where there is no liability for private individuals "even remotely analagous to that which (respondents are suggesting) against the United States," Feres v. United States, 340 U.S. 135, 141 (1950), recovery should be barred for claims arising out of the government's quintessentially sovereign function of inspecting aircraft, and certifying which aircraft may use our airspace, to protect the public safety. The actions of a government agency in enforcing health and safety legislation pursuant to a program of inspection and certification have no counterpart in the private sector. Unlike private testing laboratories, which certify the quality of a product on request of a particular customer, /14/ the government inspects and certifies for the purpose of protecting the general public, by eliminating defective or dangerous instrumentalities from the channels of interstate commerce. The FAA, for example, is required "to promote safety of flight of civil aircraft in air commerce" (49 U.S.C. 1421(a)), and in prescribing standards, rules and regulations, and in issuing certificates, the FAA must "give full consideration to the duty resting upon air carriers to perform their services with the highest degree of safety in the public interest" (49 U.S.C. 1421(b); emphasis added). /15/ By the same token, the FAA may grant exemptions from applicable rules and regulations if it "finds that such action would be in the public interest" (49 U.S.C. 1421(c); emphasis added). When the FAA breaches these obligations by performing an inadequate inspection or by issuing an unwarranted certificate, it has breached its governmental responsibilities to the general public, not its duty of care to a specific individual. Although the court of appeals acknowledged that no private person assumes responsibilities in any way comparable to those of the FAA (see App. A, infra, 3a), it nonetheless concluded that the United States could be held liable under the good samaritan doctrine (see note 5, supra). But this tort theory has no application to inspections and certifications carried out pursuant to the FAA's attempts to enforce its safety requirements. The FAA does not undertake to render a service to another, either for that person's benefit or for the benefit of a third person, as required by the Restatement (Second) of Torts Sections 323, 324A (1965). As noted above, the FAA's mandate is to promote the safety of the public as a whole by enforcing minimum safety standards, not to provide a service to any particular individual. The activity of the FAA thus stands in stark contrast to the Coast Guard's operation of the lighthouse in Indian Towing Co. v. United States, supra. The FAA does not install equipment in airplanes or operate the aircraft; it merely retains the option of checking to assure that those with operational responsibilities who do perform a service are complying with the minimum safety standards imposed by law. See Zabala Clemente v. United States, 567 F.2d 1140, 1148 (1st Cir. 1977), cert. denied, 435 U.S. 1006 (1978). Airline operators retain primary responsibility for the safety of their equipment, and individual airplane passengers are merely incidental beneficiaries of the FAA's regulatory activities. Moreover, individual passengers are not entitled to rely upon FAA inspections, as required by the good samaritan doctrine. Negligence in the government's regulatory activities in no way increases the risk of injury to passengers. See App. B, infra, 14a. As the statute and regulations make plain (see pages 2, 4, 14, supra), the primary responsibility for the safety of the aircraft remains at all times on the manufacturers, installers and owners of the aviation equipment. See 614 F.2d 188, 193 (1979). In addition, the reliance element of the good samaritan doctrine cannot be satisfied simply because "the government reasonably could expect that members of the public would rely on the government's certification of airworthiness" (App. A, infra, 4a). As the Eighth Circuit recognized in an analogous context, "'reliance on the inspection in general is not sufficient * * * to impose a duty of care * * *. Instead, the reasonable reliance must be based on specific actions or representations which cause the persons to forego other alternatives of protecting themselves.'" Gelley v. Astra Pharmaceutical Products, Inc., 610 F.2d 558, 561 (1979), quoting Cracraft v. City of St. Louis Park, 279 N.W.2d 801, 806-807 (Minn. 1979). Nothing in the record indicates that any of the passengers had even the slightest knowledge that the FAA issues "supplemental type certificates" or that one was required or issued for the DeHavilland Dove that crashed. /16/ Consequently, the good samaritan doctrine does not provide a basis upon which liability may be imposed on the government in a manner analogous to private persons. Because of its misapplication of the good samaritan doctrine, the decision below is at odds with several other appellate decisions, which have rejected attempts to impose liability on the government under the Tort Claims Act for alleged negligence in carrying out health and safety regulatory activities. In Raymer v. United States, 660 F.2d 1136 (1981), cert. denied, No. 81-1409 (Apr. 26, 1982), for example, the Sixth Circuit held that the federal government was not liable for the failure of a mine safety inspector to order the removal of a hazardous vehicle from a mine. The court held that no injured party relied on the inspector's actions and that any such reliance would have been unjustified because the Mine Safety and Health Act envisions that each mine operator will comply with the statutory safety standards. The FAA statute is no different. It anticipates installer and operator compliance with applicable safety requirements and does not place the government in the position of guaranteeing the safety of aircraft. Cf. Garbarino v. United States, 666 F.2d 1061, 1066 (6th Cir. 1981) (to extend "the Government's liability to situations involving the alleged negligent issuance of safety inspection certificates * * * would be to make the Government a joint insurer of all activity subject to safety inspection"). The reasoning of the court in Raymer would necessarily require a different result in this case. See also Patentas v. United States, 687 F.2d 707 (3d Cir. 1982). Similarly, in Zabala Clemente v. United States, supra, the First Circuit held that the FAA's failure to comply with a local directive to warn passengers of "any safety problems" created no liability because passengers did not know about the specific duties the FAA imposed on its employees and thus could not have relied to their detriment on the FAA. The same reasoning would preclude recovery here. See also Davis v. United States, 536 F.2d 758 (8th Cir. 1976), aff'g 395 F.Supp. 793 (D. Neb. 1975) (United States not liable for negligence by employee of OSHA in failing to arrange follow-up inspection of mine); Gelley v. Astra Pharmaceutical Products, Inc., supra (no liability for FDA's failure to ensure that manufacturer complied with applicable statutes and regulations). 2. The Tort Claims Act precludes recovery for claims "based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused." 28 U.S.C. 2680(a). Reviewing the legislative history of the FTCA, this Court in Dalehite v. United States, 346 U.S. 15, 26 (1953), characterized the provision as a "governmental regulatory function" exception and concluded that it was intended to insulate the United States from "liability arising from acts of a governmental nature or function." The court of appeals ruled that the discretionary function exception did not apply to the FAA's actions in this case because "no room for policy judgment or decision exists * * *" (App. A, infra, 5a). In so ruling, the court of appeals mischaracterized the FAA's role in enforcing minimum safety standards and in determining whether to issue a certificate to an applicant. It is one thing to hold that the government has a nondiscretionary duty to keep a light in good working order, once it undertakes to operate a lighthouse. See Indian Towing Co. v. United States, 350 U.S. 61 (1955). It is altogether a different matter to conclude that no discretion exists when the government attempts to police the safety of an industry and must make complicated and often predictive engineering or scientific judgments about the airworthiness of literally thousands of aircraft. Courts of appeals in analogous situations have consistently held that the discretionary function exception bars suits based on alleged negligence in an agency's issuance of a license or certificate or in an agency's regulatory approval of a product. See, e.g., Garbarino v. United States, supra; Bernitsky v. United States, 620 F.2d 948, 952 (3d Cir.), cert. denied, 449 U.S. 870 (1980); First National Bank v. United States, 552 F.2d 370 (10th Cir.), cert. denied, 434 U.S. 835 (1977); Lawrence v. United States, 381 F.2d 989, 990-991 (9th Cir. 1967); United States v. Morrell, 331 F.2d 498, 502 (10th Cir.), cert. denied, 379 U.S. 879 (1964). /17/ The nature of the FAA's regulatory activities is not altered simply because the FAA publishes detailed safety regulations designed to guide manufacturers. Given the magnitude of the FAA's inspection and certification workload, the enforcement of these regulations requires actions "necessarily calling for the exercise of discretion on the part of the governmental agency in charge." United States v. Ure, 225 F.2d 709, 713 (9th Cir. 1955). For example, the decision whether a gasoline line in a heater has "excessive vibration" on the one hand (14 C.F.R. 23.993) or sufficient flexibility to withstand stress on the other requires a difficult, and essentially subjective, engineering assessment; it is unreasonable to assume that Congress intended to subject these regulatory determinations to second guessing by a court through the medium of tort litigation. Such judicial oversight, applying varying state law, would directly impair a vital governmental function -- enforcing aircraft safety laws -- in a way that Congress rejected when it adopted the discretionary function exception. See Dalehite v. United States, supra, 346 U.S. at 26. 3. If, contrary to our submission in parts 1 and 2, the United States has committed a tort not barred under either Section 2674 or 2680(a), it is the tort of misrepresentation, for which recovery is expressly precluded by 28 U.S.C. 2680(h). Respondents' claim is that the United States negligently inspected the installation of a heater and therefore improperly issued a certificate of airworthiness. The court of appeals held that the claim was one for "negligent inspection" and thus not within Section 2680(h) (App. A, infra, 5a). But its reasoning is flatly inconsistent with this Court's decision in United States v. Neustadt, 366 U.S. 696, 706 (1961), in which the Court held that a claim that the Federal Housing Administration negligently inspected a house purchased by plaintiffs was merely "to state the traditional and commonly understood legal definition of the tort of 'negligent' misrepresentation," for which recovery against the United States is barred. /18/ In both Neustadt and the instant case, a government employee conducted an inspection and issued a written report stating, incorrectly, that the object inspected was in good condition. In both cases plaintiffs claimed that they were injured as a result of their reliance on the false information conveyed to them by the written report. Indeed, in this case, respondent Dowdle emphasized in his testimony at trial that his mechanic expressly relied on the airworthiness certificate in deciding whether to recommend that Dowdle purchase the airplane (see pages 5-6, supra). /19/ Thus, the court of appeals' ruling that the misrepresentation exception is inapplicable because "(t)he basis of (respondents') claim * * * is not the misrepresentation or misinformation contained in the certificate, but the negligence of the F.A.A.'s inspection on which the airworthiness certificate was issued" (App. A, infra, 4a) is both contrary to the facts and inconsistent with the reasoning of this Court in Neustadt. /20/ In rejecting the government's claim that the misrepresentation exception bars this suit, the court of appeals relied heavily on Neal v. Bergland, 646 F.2d 1178, 1183-1184 (6th Cir. 1981), cert. granted, No. 81-1494 (May 24, 1982). In Neal, the Sixth Circuit declined to apply the misrepresentation exception to a claim based on an allegedly negligent inspection of a house by the Farmers Home Administration. It seems likely that this Court's decision in Neal will have a substantial bearing on the applicability of the misrepresentation exception to this suit. Accordingly, the Court may wish to hold this petition pending the decision in Neal, although we believe that the court of appeals' failure to dismiss respondents' claims on either of the first two grounds asserted in this petition justifies plenary review. CONCLUSION The petition for a writ of certiorari should be granted. In the alternative, the petition should be held pending this Court's decision in Block v. Neal and then disposed of as appropriate in light of that decision. Respectfully submitted. REX E. LEE Solicitor General J. PAUL MCGRATH Assistant Attorney General KENNETH S. GELLER Deputy Solicitor General CARTER G. PHILLIPS Assistant to the Solicitor General LEONARD SCHAITMAN JOHN C. HOYLE Attorneys FEBRUARY 1983 /1/ The nonemployee representatives are not subject to any direct FAA control, but there are spot checks of their work. See generally Dilk, Negligence of FAA Administration Delegates Under the Federal Tort Claims Act, 42 J. Air L. & Com. 575, 583 (1976). /2/ The record fails to establish either who inspected the installation or even if there actually was an inspection. Accordingly, there is no evidence reflecting the quality of the inspection. However, there was evidence indicating that, if an inspection occurred, it would have been conducted by the FAA (Tr. 424-425). ("Tr." refers to the transcript of the original trial held by the district court. "Supp. Tr." refers to the transcript of the proceedings before the district court on remand.) /3/ The district court subsequently awarded $200,000 in damages against the United States. /4/ Respondent Dowdle's mechanic testified that he relied upon the supplemental type certificate in deciding whether to approve the airplane for purchase (Supp. Tr. 25). Respondent Cearley testified that her husband, a passenger on the plane, was aware of the government's regulatory efforts to make air travel safe (Supp. Tr. 41). /5/ Section 323 of the Restatement provides: One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if (a) his failure to exercise such care increases the risk of such harm, or (b) the harm is suffered because of the other's reliance upon the undertaking. Section 324A of the Restatement provides: One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm, or (b) he has undertaken to perform a duty owed by the other to the third person, or (c) the harm is suffered because of reliance of the other or the third person upon the undertaking. /6/ In S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines) v. United States, 692 F.2d 1205 (9th Cir. 1982), for example, the court of appeals ruled that the United States could be held liable under the good samaritan doctrine for claims in excess of $100 million arising out of the crash of a Brazilian airplane that occurred in Paris in 1973, because the FAA allegedly negligently certified in 1958 -- 15 years earlier -- that the design of a lavatory in the airplane satisfied fire protection standards. We are today filing a petition for a writ of certiorari seeking review of this decision as well. /7/ 42 U.S.C. 2201(o). Indeed, there is now pending a Tort Claims Act suit for $4 billion arising out of the NRC's inspection and oversight activities with regard to the Three Mile Island nuclear reactor. See General Public Utilities Corp. v. United States, No. 81-4950 (E.D. Pa. Jan. 5, 1983). The government's motion to dismiss that case was denied on grounds similar to those relied on by the court below. The United States Court of Appeals for the Third Circuit has granted our petition for an interlocutory appeal (No. 83-1017). /8/ 21 U.S.C. (& Supp. V) 374. See Anglo-American & Overseas Corp. v. United States, 144 F.Supp. 635 (S.D.N.Y. 1956), aff'd, 242 F.2d 236 (2d Cir. 1957). /9/ 12 U.S.C. 1820(b). See First State Bank v. United States, 599 F.2d 558 (3d Cir. 1979), cert. denied, 444 U.S. 1013 (1980). /10/ 29 U.S.C. 657. See Davis v. United States, 536 F.2d 758 (8th Cir. 1976) aff'g 395 F.Supp. 793 (D. Neb. 1975). /11/ 30 U.S.C. 813. See Raymer v. United States, 660 F.2d 1136 (6th Cir. 1981), cert. denied, No. 81-1409 (Apr. 26, 1982). /12/ See, e.g., 67 Cong. Rec. 11092, 11100 (1926) (remarks of Reps. Celler, Underhill); 69 Cong. Rec. 2192, 3118 (1928) (remarks of Reps. Lozier, Box); General Tort Bill: Hearing Before a Subcomm. of the House Comm. on Claims, 72d Cong., 1st Sess. 17 (1932); Tort Claims Against the United States: Hearings on H.R. 7236 Before Subcomm. No. 1 of the House Comm. on the Judiciary, 76th Cong., 3d Sess. 16 (1940); Tort Claims Against the United States: Hearings on S. 2690 Before a Subcomm. of the Senate Comm. on the Judiciary, 76th Cong., 3d Sess. 27-28 (1940); Tort Claims: Hearings on H.R. 5373 and H.R. 6463 Before the House Comm. on the Judiciary, 77th Cong., 2d Sess. 28, 37, 39, 66 (1942); H.R. Rep. No. 2428, 76th Cong., 3d Sess. 3 (1940); H.R. Rep. No. 2245, 77th Cong., 2d Sess. 10 (1942); H.R. Rep. No. 1287, 79th Cong., 1st Sess. 5 (1945); S. Rep. No. 1400, 79th Cong., 2d Sess. 31 (1946). The Tort Claims Act was adopted in 1946 after more than 20 years of congressional consideration. This Court has previously recognized that legislative statements made with regard to earlier versions of the FTCA are useful in understanding the meaning of the Act as eventually passed. Dalehite v. United States, 346 U.S. 15, 26-30 (1953). /13/ See also 67 Cong. Rec. 11086-11100 (1926) (remarks of Reps. Underhill, Ramseyer, Box, LaGuardia, Celler); 69 Cong. Rec. 2191, 2196, 3117, 3127 (1928) (remarks of Reps. Ramseyer, Box, Underhill, Green); H.R. Rep. No. 2800, 71st Cong., 3d Sess. 9 (1931); Tort Claims: Hearings on H.R. 5373 and H.R. 6463 Before the House Comm. on the Judiciary, 77th Cong., 2d Sess. 28 (1942). /14/ See generally Note, Liability of Certifiers of Quality to Ultimate Consumers, 36 Notre Dame Law Rev. 176, 193 (1961); Note, Tort Liability of Independent Testing Agencies, 22 Rutgers L. Rev. 299, 325-326 (1968); Note, Liability of a Testing Company to Third Parties, 1964 Wash. U. L. Q. 77, 96-97. Indeed, California has recognized that such laboratories may be liable for negligently certifying the safety of a product. See Hanberry v. Hearst Corp., 276 Cal. App. 2d 680, 683, 81 Cal. Rptr. 519, 521 (Ct. App. 1969). The basis for liability was, however, "negligent misrepresentation," which is expressly excluded from the waiver of sovereign immunity in 28 U.S.C. 2680(h). See United States v. Neustadt, 366 U.S. 696 (1961), and pages 20-22, infra. /15/ It is unlawful "(f)or any person to operate in air commerce any civil aircraft for which there is not currently in effect an airworthiness certificate" (49 U.S.C. 1430(a)(1)). FAA inspection and certification, therefore, are integral steps in a program of law enforcement rather than a service performed for a particular airline or air passenger. /16/ The Ninth Circuit's application of the good samaritan doctrine in S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines) v. United States, supra, is even more preposterous. In Varig, the court held that Brazilian residents flying from Rio de Janeiro to Paris in an airplane operated by a Brazilian airline reasonably relied upon a type certificate issued by the FAA 15 years earlier. According to the Ninth Circuit, "(t)he United States should expect that members of the public," apparently even the Brazilian public, "will rely on the proper performance by the F.A.A. of its duty to inspect and certify." 692 F.2d at 1208. /17/ When Congress included the discretionary function exception in the Tort Claims Act, it removed the exception for claims for damages "caused by the administration of any law or laws by the Federal Trade Commission or by the Securities Exchange Commission." Congress expanded this exception to cover all governmental agencies, with the intent to bar "claims against Federal agencies growing out of their regulatory activities." House Comm. on the Judiciary, 77th Cong., 2d Sess., Federal Tort Claims Act, Memorandum, With Appendixes, Explanatory of Comm. Print of H.R. 5373, at 8 (Comm. Print 1942). The efforts of the FAA to detect violations of its minimum safety standards are as much a regulatory activity as attempts by the FTC or SEC to ferret out infractions of their statutes and rules. /18/ Other courts of appeals have held, contrary to the court below, that certification or licensing following an inspection is within the misrepresentation exception. See, e.g., Reynolds v. United States, 643 F.2d 707, 711 (10th Cir.), cert. denied, 454 U.S. 817 (1981); Somali Development Bank v. United States, 508 F.2d 817, 821 (Ct. Cl. 1974); Rey v. United States, 484 F.2d 45, 49-50 (5th Cir. 1973); Anglo-American & Overseas Corp. v. United States, 144 F.Supp. 635 S.D.N.Y. 1956), aff'd, 242 F.2d 236 (2d Cir. 1957). /19/ Although respondent Dowdle alone alleged that he directly relied on the misrepresentation, the claims of the other respondents also necessarily are based on reliance, which is an element of the good samaritan doctrine, and hence "arise out of" the misrepresentation, within the meaning of Section 2680(h). /20/ See Restatement (First) of Torts Section 311 (1934), which is labeled "Negligent Misrepresentation Involving Risk of Bodily Harm" and includes the following as one of its illustrations (id. at 845-846): The A Boiler Insurance Company undertakes as part of its services to inspect the boiler of B. It issues a certificate that the boiler is in good condition for use. In reliance upon this certificate, B uses the boiler. The boiler bursts due to a defect which a reasonably careful inspection would have disclosed. Explosion of the boiler wrecks the adjacent building of C and causes bodily harm to him. The A Company is liable to C for his bodily harm and the wrecking of his building caused by the explosion of the boiler. In enacting Section 2680(h), Congress intended to adopt the commonly understood definition of "misrepresentation," United States v. Neustadt, supra, 366 U.S. at 707, which is best ascertained from the Restatement of Torts in existence at the time. See the government's brief in Block v. Neal, No. 81-1494, a copy of which we are sending to counsel for respondents. Appendix Omitted