United States v. Aetna Casualty & Surety Co.

Background

In three cases an insurance company, or companies, paid claims for people injured by federal employees and then sued the United States to recover those payments. In one case a carrier paid a New York workmen’s compensation claim; in another a carrier paid part of a car‑accident loss; in the third two insurers paid portions of losses. The Government argued that a long‑standing federal anti‑assignment statute, R.S. 3477, barred insurers from suing in their own names. Several Courts of Appeals had allowed such suits, but one circuit had reached the opposite result, so the issue reached this Court.

Reasoning

The Court framed the question as whether subrogation claims are barred by R.S. 3477 or whether insurers may sue as the real parties in interest under the Federal Tort Claims Act and the Federal Rules. The Court concluded that R.S. 3477 historically applied to voluntary assignments but has long been interpreted not to reach transfers by operation of law, including subrogation. Congress and executive practice in earlier claims statutes supported treating subrogation claims as allowable. The Federal Rules require the real party in interest to sue, so an insurer who has paid the entire loss may bring suit in its own name; where only part of a loss was paid, insured and insurers may all have to appear.

Real world impact

Insurers that pay claims for injuries caused by federal employees can generally sue the United States in their own names to recover those payments. The Government may still raise procedural defenses and may seek joinder of other parties when interests overlap. The decision affirms the Courts of Appeals and resolves conflicting circuit rulings.

Dissents or concurrances

Justice Black recorded a dissent. No other justice wrote separately.