Executive Jet Aviation, Inc. v. United States

In July 1968, seagulls were roosting on a runway at the Cleveland Airport. During takeoff of a plane owned by Executive Jet (plaintiff), seagulls were pulled into the plane’s engines, causing the plane to crash. Executive Jet submitted a claim to its insurance companies for the loss. The insurance companies paid Executive Jet the insurance contract limit of $1,300,000. The payment included a loan receipt agreement that required Executive Jet to repay the insurance companies if Executive Jet recovered additional payments from any liable entity. In addition, the loan receipt agreement required Executive Jet to file a lawsuit against any liable entity if directed to do so by the insurance companies, and the insurance companies would cover any expenses in the lawsuit. About a year after the crash, Executive Jet sued the United States (defendant) for negligence, alleging that the Federal Aviation Administration should have warned Executive Jet of the seagulls. Executive Jet sought damages of about $1,765,000. In response, the United States asserted that under Federal Rule of Civil Procedure 17(a), Executive Jet could not pursue the suit because Executive Jet was not the real party in interest. The district court agreed and found that the insurance companies were the real parties in interest in the lawsuit. The court concluded that the insurance companies could not then be named as parties to the lawsuit because the insurance companies had not timely filed an administrative claim as required by statute. The district court dismissed Executive Jet’s claim with prejudice. Executive Jet appealed.