Author(s): Gregory A. Light

PIP BENEFITS NOT RECOVERABLE AGAINST THE GOVERNMENT UNDER THE FEDERAL TORT CLAIM’S ACT

The Federal Tort Claims Act (FTCA) waives sovereign immunity for certain actions in tort against the United States. Specifically, under the FTCA, the government may be liable for injury, loss of property, personal injury or death caused by the negligent or wrongful act or omission of any employee of the government while acting within the scope of his office or employment if a private person would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

Recently, the United States Court of Appeals, Sixth Circuit, in the case of Premo v USA, ____ F 3d ____, 2010 WL 1189630 (C.A.6 (Mich)) ruled that PIP benefits do not apply under the

FTCA. In Premo, a 19 year old girl was riding her bike through a cross-walk when she was struck by a United States Postal Service (USPS) truck and injured. She suffered multiple leg, ankle, and foot fractures that required surgery. Since the Plaintiff in Premo did not own her own automobile and presumably did not reside with anyone else who owned an automobile, Premo, through her attorney, filed a claim for PIP benefits with the USPS. The USPS denied Premo’s request for benefits in writing, stating, in pertinent part, that the USPS is exempt from state vehicle insurance statutes and further that the exclusive means of pursuing a claim against the federal government based in negligence must be under the FTCA and that, therefore, Michigan No-Fault does not apply to the USPS. Plaintiff thereafter filed an FTCA administrative claim with the USPS seeking $197,569.80 for personal injury and property damage to her bicycle. The agency denied the claim indicating that Premo failed to establish a negligent act or omission on the part of the U.S. Postal Service or its employees.

Procedurally, Plaintiff then filed suit in the US District Court against the United States and the USPS and “John Doe” pursuant to the FTCA seeking both economic and non-economic damages. At the conclusion of discovery, the government moved for summary disposition which was granted in part and denied in part. The district court determined that Michigan’s No-Fault Act applied, the government was not estopped from arguing application of the No-Fault Act, that Plaintiff failed to meet the threshold necessary to recover non-economic damage and that the case would proceed in regard to Premo’s entitlement to economic damages should liability be established. Plaintiff therefore moved for summary judgment under the economic claim, which was granted in part and denied in part. The district court said the Plaintiff was entitled to $34,768 for medical expenses, but denied the request for interest and attorney fees. Plaintiff appealed the district court’s application of Michigan’s No-Fault Act to her claim and the denial of her request for interest and attorney fees. The government in turn appealed the district court’s award of economic damages.

The court in Premo first looked at the requirements under the FTCA, finding that liability under the FTCA is usually determined by referencing state law. Since the alleged act of negligence in this particular case occurred in Michigan, the court determined that it must look to Michigan law. As such, the Michigan No-Fault Act applied. Plaintiff argued against its application for three reasons: (1) The government failed to raise the statute as an affirmative defense, (2) To avoid diverse treatment of federal interests in several states and avoid running afoul of federal supremacy, and (3) estoppel because it initially maintained that the statute did not apply under the Constitution’s Supremacy Clause. The court found those arguments unconvincing because the No-Fault Statute is not an affirmative defense, but rather represents the governing law in the State of Michigan. Also, since this particular case involved a matter that was primarily of state interest, state law does control, defeating Plaintiff’s federal supremacy argument. Finally, in determining that Plaintiff’s estoppel argument also failed, the court determined that the application of same requires an additional element of affirmative misconduct in addition to establishing the other elements of estoppel. In this particular case, it was determined that the government properly stated that the No-Fault Act does not apply to the USPS and then provided instructions regarding the requirements for Premo to bring an FTCA claim. The court determined that the government’s position was not that the No-Fault Act directly applies, but pursuant to the FTCA, the determination regarding Premo’s claim turned on state law, which, in this case, is the No-Fault Act. Therefore, it was deemed to be properly determined that pursuant to the FTCA, the government’s liability in this case must be determined in accordance with applicable Michigan law, which is set forth in the No-Fault Act.

As stated above, under the FTCA, the government may only be liable for personal injury or death caused by the negligence or wrongful act or omission of an employee of the government. Accordingly, under the express terms of the FTCA, the imposition of liability is precluded if there has been no negligence or other form of “misfeasance or nonfeasance.” The FTCA’s waiver of sovereign immunity does not extend to claims grounded in strict liability.

Under the Michigan No-Fault Act, an injured person can collect PIP benefits without regard to fault. Given that language, the court determined that absolute liability arose irrespective of how the tortfeasor conducted himself. Thus, Michigan law imposes strict liability for economic damages in motor vehicle accident cases. This imposition of liability without fault was found to conflict with the FTCA’s express language. Under the FTCA, sovereign immunity is only waived to the extent that state law would impose liability on a private individual in similar circumstances. When it comes to PIP benefits, the No-Fault Act is essentially a strict liability statute and the FTCA strictly precludes the imposition of liability if there has been no negligence or other form of misfeasance or nonfeasance. Accordingly, because the government can be held liable without a finding of fault pursuant to the No-Fault Act, Plaintiff can not recover economic damages. The court determined that Plaintiff’s source of relief for economic damages was Michigan’s assigned claims plan, but Plaintiff, unfortunately, failed to pursue that remedy.

Accordingly, the district court’s conclusion that Michigan’s No-Fault Act, through the Federal Tort Claims Act, governs the outcome of the case was affirmed, the district court’s grant of economic damage to Plaintiff was reversed and as such, the district court’s determination that Plaintiff was not entitled to interest and attorney fees was likewise affirmed.