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WINDSOR v. STATE FARM INS. CO.

February 10, 1981

Carolyn M. WINDSOR, Plaintiff,
v.
STATE FARM INSURANCE COMPANY, Defendant



The opinion of the court was delivered by: SIRICA

This matter is before the Court on the defendant's motion to dismiss the complaint for failure to state a claim, or in the alternative, for lack of jurisdiction.

 The factual circumstances underlying the plaintiff's complaint are relatively simple. It is alleged that on March 12, 1977, the unknown operator of an automobile negligently caused the vehicle which he was driving to strike and injure the plaintiff, a pedestrian. According to the complaint, the automobile was operated with the permission of its owner, a member of a diplomatic mission, who was insured by the defendant, State Farm Insurance Company.

 Neither the operator nor the owner of the automobile was named as a defendant by the plaintiff. Instead, this action was brought directly against the insurance carrier pursuant to Section 7 of the Diplomatic Relations Act, *fn1" which section has been codified at 28 U.S.C. § 1364 (Supp. II 1978). *fn2"

 The Diplomatic Relations Act (the Act) was designed, in part, to deal with the inequities associated with the immunity of members of diplomatic missions in civil court proceedings. In that regard, Section 7 of the Act, under which the plaintiff is proceeding, creates a direct cause of action against those who insure members of diplomatic missions, eliminates the insurer's defense that the insured was immune from suit, and confers exclusive and original jurisdiction upon the federal district courts to entertain such actions against insurers.

 The effective date for this legislation was set forth in Section 9 of the Act as "the end of the ninety-day period beginning on the date of its enactment." Since the Act was approved on September 30, 1978, the incident at issue predated the effective date by approximately 21 months. Accordingly, unless Congress intended the Act to operate on transactions which occurred or rights and obligations which existed before its passage, that is, to have retroactive effect, it can have no application in the present instance. If the Act does not apply, the plaintiff's direct cause of action against the insurer is not available thereunder, nor does the Court have authority to proceed, since jurisdiction has been premised solely on 28 U.S.C. § 1364. In view of this, the plaintiff has taken the position that Congress intended the Act to be retrospective while the defendant has advanced the opposite point of view. *fn3"

 It is a well-established principle that prospective rather than retrospective application is the preferred judicial treatment of legislation. In re District of Columbia Workmen's Compensation Act, 180 U.S. App. D.C. 216, 554 F.2d 1075, 1079 (D.C.Cir.), cert. denied, 429 U.S. 820, 97 S. Ct. 67, 50 L. Ed. 2d 81 (1976); De Rodulfa v. United States, 149 U.S. App. D.C. 154, 461 F.2d 1240, 1247 (D.C.Cir.), cert. denied, 409 U.S. 949, 93 S. Ct. 270, 34 L. Ed. 2d 220 (1972). "Retroactivity," the Supreme Court has declared, "even when permissible, is not favored, except upon the clearest mandate," Claridge Apartments Co. v. Commissioner, 323 U.S. 141, 164, 65 S. Ct. 172, 185, 89 L. Ed. 139 (1944), and this maxim has often been reiterated in this Circuit. See, e.g., In re District of Columbia Workmen's Compensation Act, supra; De Rodulfa v. United States, supra; Kalis v. Leahy, 88 U.S. App. D.C. 166, 188 F.2d 633, 634-35 (D.C.Cir.) cert. denied, 341 U.S. 926, 71 S. Ct. 797, 95 L. Ed. 1358 (1951); Neild v. District of Columbia, 71 App. D.C. 306, 110 F.2d 246, 254 (D.C.Cir. 1940).

 Accordingly, "statutes are not to be applied retroactively "unless the words used are so clear, strong and imperative that no other meaning can be annexed to them or unless the intention of the legislature cannot otherwise be satisfied.' " Boilermakers Int'l v. NLRB, 114 U.S. App. D.C. 372, 316 F.2d 373, 375 (D.C.Cir. 1963), quoting United States Fidelity & Guaranty Co. v. United States ex rel. Struthers Wells Co., 209 U.S. 306, 314, 28 S. Ct. 537, 539, 52 L. Ed. 804 (1908).

 This canon is of special importance when the legislation in question affects substantive rights and is contrary to pre-existing economic expectancies. De Rodulfa v. United States, supra. Therefore, it is particularly true that "a retrospective operation will not be given to a statute which interferes with antecedent rights ... unless such be "the unequivocal and inflexible import of the terms, and the manifest intention of the legislature.' " Greene v. United States, 376 U.S. 149, 160, 84 S. Ct. 615, 621, 11 L. Ed. 2d 576 (1964), quoting Union Pacific R.R. v. Laramie Stock Yards Co., 231 U.S. 190, 199, 34 S. Ct. 101, 102, 58 L. Ed. 179 (1913).

 In view of these prerequisites to retroactive application, the Court's analysis must begin with the fundamental rule of law that the meaning and intent of a statute is to be sought first in the language in which it is framed. If that language is plain and unambiguous, then there is no need to enlist the rules of interpretation, and the duty of the court is to enforce the act according to its terms. Caminetti v. United States, 242 U.S. 470, 485, 37 S. Ct. 192, 194, 61 L. Ed. 442 (1917). However, in the present instance, the imperative character necessary to demonstrate retroactive intent cannot be assigned to the words of the Act. Neither Section 7 nor any of the other sections of the Act contains any specific language addressed to retroactive application.

 Of course, congressional intent may not necessarily be reflected in the language of a single sentence or a particular section of an act. Instead, it may be demonstrated by the language and provisions of an act when read as a whole. Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S. Ct. 1893, 1898, 44 L. Ed. 2d 525 (1975). When the various sections of an act are read in conjunction with one another, a comprehensive statutory scheme reflecting the intent of Congress may emerge which was not apparent from a reading of the various sections standing by themselves.

 Nevertheless, in the case at hand, the most that is suggested in a reading of the Act as a whole is an intended prospective application for Section 7. Section 5 of the Act *fn4" continues the long-standing concept of diplomatic immunity by providing for the dismissal of any action or proceedings brought against an individual entitled to such protection. Naturally, diplomats are at times negligent, and their immunity created the potential for inequitable situations in which the victims of their negligence had no redress in the courts. A plain reading of Sections 6 and 7 of the Act reveals a congressional intent to remedy the potential inequities created by this grant of immunity. Section 6 of the Act *fn5" requires the President to "establish liability insurance requirements ... relating to the risks arising from the operation in the United States of any motor vehicle, vessel or aircraft" by an individual clothed with diplomatic immunity. In conjunction with this provision, those with diplomatic immunity are required to comply with the insurance obligations established by the President, and he is given authority to ensure their compliance. Section 7 seizes upon this insurance requirement and establishes a direct cause of action against insurers while eliminating their use of the defense of the insured's immunity.

 It appears then that Congress intended for these sections to serve together to alleviate the inequities associated with diplomatic immunity by (1) requiring diplomats to be insured and (2) making their insurers directly liable. Since the insurance obligations contemplated by direct actions under Section 7 were to be created by Section 6 of the Act, there is implicit in this remedy the idea of prospective application. Accordingly, it is reasonable to infer that Congress intended the provisions of Section 7 to apply prospectively to the insurance requirements established by Section 6. Although, a prospective intent does not necessarily indicate that retrospective application of a statute is foreclosed, see Sutherland, Statutory Construction § 41.01 (1973), in this instance, these two sections, taken together, do suggest an absence of retrospective intent. This conclusion is further supported by the fact that a reading of the Act as a whole fails to suggest any retroactive application of its provisions. Since the Act by its terms does not explicitly or implicitly suggest retroactive application, those terms cannot be construed as a clear and imperative mandate from Congress in favor of retroactivity.

 Despite this, the plaintiff suggests that the manifest intention of the legislature is to be found in the legislative history of the Act. The Court does not agree. While resort may be had to the legislative history when a statute is ambiguous, Aviation Consumer Action Project v. Washburn, 175 U.S. App. D.C. 273, 535 F.2d 101, 106 (D.C.Cir. 1976), retroactive effect will only be assigned to a statute when required by its explicit language or necessary implication therefrom. Kalis v. Leahy, supra at ...


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