## Facts

- Plaintiffs (injured passengers, representatives of decedents, and an insurer assignee) filed diversity actions against DeKalb County, Georgia, arising from a commercial aircraft crash shortly after takeoff from the County’s airport.
- The principal remaining liability theory sounded in contract: the County had entered FAA grant agreements promising to restrict adjacent land uses to those compatible with normal airport operations, including takeoffs and landings.
- Plaintiffs alleged the County breached those agreements by operating or permitting a garbage dump adjacent to the airport.
- Plaintiffs alleged the dump attracted birds that were ingested into the aircraft’s jet engines shortly after takeoff, causing the crash.
- Plaintiffs claimed they were intended third-party beneficiaries of the County–FAA agreements and could sue for breach.
- The district court applied Georgia law to the third-party-beneficiary question but dismissed on governmental-immunity grounds.
- A Fifth Circuit panel reversed in part, concluding state law permitted the suits and immunity did not bar them.
- The Fifth Circuit en banc held federal law governed interpretation of the agreements and, under federal law, plaintiffs could not sue as third-party beneficiaries; it affirmed dismissal.
- The Supreme Court granted review on whether federal common law or state law governed the third-party-beneficiary issue.

## Issues

1. Whether federal common law or Georgia contract law governs alleged third-party-beneficiary rights under FAA grant agreements in a diversity action.
2. Whether the Airport and Airway Development Act of 1970 creates an implied private right of action for injuries caused by violations of the Act (raised for the first time in the Supreme Court).

## Decision

- The Court held that state law, not federal common law, governs the plaintiffs’ claimed rights as third-party beneficiaries of the County–FAA grant agreements.
- The Court vacated the Fifth Circuit’s judgment and remanded for further proceedings applying state law.
- The Court declined to address the implied-private-right-of-action argument because it was not raised in the courts below.
- Chief Justice Burger concurred in the judgment.

## Legal Principles

- Federal common law applies only in limited settings and generally is not used in a diversity case absent a substantial federal interest requiring a federal rule.
- A federal rule is not justified where only private litigants’ rights are at stake and the United States’ rights and obligations are not substantially affected by the outcome.
- A merely remote or speculative effect on federal interests is insufficient to displace state law.
- The Supreme Court generally will not consider a new legal theory first presented on review when it was not pleaded or litigated in the lower courts.

## Conclusion

The Court required application of Georgia contract law to determine whether injured passengers and related parties may enforce FAA airport grant assurances as third-party beneficiaries, rejecting federal common law on the ground that the litigation did not substantially affect the United States’ rights or obligations and leaving any such beneficiary determination to state law on remand.


Miree v. DeKalb County, 433 U.S. 25 (1977)