In Re: Katrina Canal Breaches Litigation. Steering Committee
| Decision Date | 14 September 2010 |
| Docket Number | Nos. 09-30449, 09-30428 and 09-30438.,s. 09-30449, 09-30428 and 09-30438. |
| Citation | 620 F.3d 455 |
| Parties | In re: KATRINA CANAL BREACHES LITIGATION. Steering Committee, Plaintiff-Appellant, v. Washington Group International, Inc., Defendant-Appellee. In re: Katrina Canal Breaches Litigation. Quintessa Huey, Caryn L. Fong, as Trustees of the Huey & Fong Trust; Amy Huey, as Trustee of the Kenneth Huey Family Trust; Radio Parts, Inc.; Entercom Communications Corporation; et al., Plaintiffs-Appellants, v. Washington Group International, Inc., Defendant-Appellee. In re: Katrina Canal Breaches Litigation. Betty Lundy; Frederick Adams; Jean Addison; Jonathan Akers; Ollie P. Alexander; et al., Plaintiffs-Appellants, v. Washington Group International, Inc., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
OPINION TEXT STARTS HERE
Joseph M. Bruno (argued), Bruno & Bruno, L.L.P., Lewis Scott Joanen, New Orleans, LA, James Parkerson Roy, Domengeaux, Wright, Roy & Edwards, Lafayette, LA, for Steering Committee.
William D. Treeby (argued), Carmelite M. Bertaut, Heather Shauri Lonian, Stone, Pigman, Walther & Wittmann, L.L.C., New Orleans, LA, James E. Gauch, Adrian Wager-Zito, Jones Day, Washington, DC, for Washington Group Intern., Inc.
James M. Garner, John Thomas Balhoff, II, Ashley Gremillion Coker, Sher, Garner, Cahill, Richter, Klein & Hilbert, L.L.C., New Orleans, LA, for Plaintiffs-Appellants in 09-30428.
Daniel E. Becnel, Jr., Becnel Law Firm, Reserve, LA, Albert J. Rebennack, Metairie, LA, for Plaintiffs-Appellants in 09-30438.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before SMITH, WIENER, and ELROD, Circuit Judges.
Washington Group International, Inc. (“WGI”) provided engineering, construction, and management services. The United States Army Corps of Engineers (“the Corps”) contracted with WGI for a large project in New Orleans. The plaintiffs sued WGI, claiming that its negligent and improper actions in fulfilling the contract were a cause of flood damage resulting from Hurricane Katrina. The district court granted summary judgment for WGI based on government-contractor immunity (“GCI”). Because the specifications for the work at issue were not reasonably precise, WGI has no GCI, so we reverse the summary judgment and remand.
In 1994, the Corps and WGI entered into an indefinite delivery/indefinite quantity contract for the remediation of some hazardous, toxic, and radioactive waste sites in the southwestern United States. That “umbrella contract,” known as the Total Environmental Restoration Contract (“TERC”), set forth general requirements for all of WGI's anticipated work in the region, with the understanding that the Corps would approve a specific Statement of Work (“SOW”) for each Task Order it would issue to WGI.
In 1999, the Corps began its Inner Harbor Navigation Canal Lock Replacement Project in New Orleans, one aspect of which was the cleanup of the East Bank Industrial Area. Pursuant to the TERC, WGI was obligated (1) to demolish existing structures in that area by removing surface and subsurface obstructions, (2) to characterize contaminants on the site, and (3) to remediate the site in accordance with any applicable environmental standards. This specific task was contracted for and identified as Task Order 26 of the TERC.
In June 1999, the Corps issued a SOW for Task Order 26 that was brief and provided only a general description of the work to be done. From that SOW, WGI submitted a more detailed work plan to the Corps. After receiving the work plan, the Corps engaged WGI in a review process during which the Corps would comment on issues it had with WGI's proposals, solicit a response from WGI on those comments, and continue in such a back-and-forth manner until the Corps and WGI had come to an agreement regarding any matters that were in conflict.
The review process included the completion of various technical analyses and recommendation reports by the Corps and additional work plans by WGI. A final Recommendation Report was formally issued in January 2000, after which it became “the basis of subsequent specifications for work and work orders and proposals.”
After completion of the Recommendation Report process, the Corps issued another SOW that, once again, provided general directions to WGI. From that SOW, WGI drafted eight work plans for the specific project and submitted them to the Corps for comment and approval. The most important of those work plans, for our purposes, was the Project Work Plan, which dealt with the equipment, the excavation, and the remediation process for the areas at issue in the plaintiffs' claim.
Once work had begun, WGI discovered previously unknown subsurface structures in the area to be remediated. In August 2001, the Corps issued another SOW to address the excavation and disposal of those newly discovered structures. Pursuant to that SOW, and in compliance with all the previously approved plans, WGI submitted Proposal # 113, which dealt with the excavation and disposal of the new subsurface structures.
In its Technical Analysis of Proposal # 113, the Corps deemed WGI's proposal too costly, rejected it, and suggested several elements of the proposal as to which cost savings could be achieved. One of those suggestions was to use on-site borrow matter as the primary source of backfill material. 1 The final proposal submitted by WGI, and approved by the Corps, incorporated that suggestion by stating that “[t]he excavations ... will be backfilled with borrow material obtained from either the on-site borrow source or an off-site source.”
The final approved proposal also stated that the backfill “material will be placed in lifts and compacted; however, no compaction testing will be required.” 2 The work plans derived from the final proposal also specified that compaction should occur “with previous excavated soil in 2' lifts,” that “[i]nitial backfill operations will be to the bottom of the whalers inside the [subsurface obstruction],” and that backfilling should be completed “to the top of sheet piles with material to be provided by WGI after whalers are removed.” Working from that approved proposal and from subsequent work plans derived from it, WGI completed the project in the spring of 2005.
In August 2005, Hurricane Katrina made landfall near New Orleans. As a result, the flood protection system in the Inner Harbor Navigation Canal project, consisting of levees and floodwalls, failed. Two of the breaches in the levees were near areas that were part of the zone where WGI had conducted extensive work. The plaintiffs claim that the failure of those levees was a result of the negligent and improper backfilling and compaction of the excavated locations by WGI in violation of a state-law duty of care. Specifically, the plaintiffs allege that the method of excavation and backfilling employed by WGI allowed for underseepage, which undermined the integrity of the levees, resulting in their failure and the subsequent flooding of New Orleans East, the Lower Ninth Ward, and St. Bernard Parish.
In 2007, the plaintiffs, in several consolidated actions, sued WGI, the Corps, and numerous other defendants for harm resulting from Hurricane Katrina-related damages. In 2008, WGI moved for summary judgment, asserting the GCI defense. The plaintiffs opposed summary judgment on the grounds that (1) GCI does not apply because there was no conflict with state law, and (2) even assuming such a conflict, WGI failed to satisfy the Supreme Court's three-part test for GCI. The district court granted summary judgment for WGI, concluding that displacement of state law is built into the GCI defense and that WGI had satisfied all the requirements for GCI.
We review a summary judgment de novo, “using the same standard as that employed by the district court under Rule 56.” Kerstetter v. Pac. Scientific Co., 210 F.3d 431, 435 (5th Cir.2000). Summary judgment is warranted where “there is no genuine issue as to any material fact and [ ] the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). There is no genuine issue for trial “[i]f the record, taken as a whole, could not lead a rational trier of fact to find for the nonmoving party.” Kipps v. Caillier, 197 F.3d 765, 768 (5th Cir.1999).
The Supreme Court first recognized the federal GCI defense to state tort law in Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). The GCI defense preempts state law to immunize government contractors from liability in spite of the absence of legislation specifically immunizing them. 3 The rationale for GCI flows from two basic principles: “[S]tate tort law is preempted by federal common law in areas of unique federal interests” and “the procurement of equipment by the United States is such an area.” Trevino v. Gen. Dynamics Corp., 865 F.2d 1474, 1479 (5th Cir.1989). In Boyle, the Court specified the precise scope of the displacement of state law, using a three-part test:
Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.
The plaintiffs argue that the district court erred in failing to conduct a threshold inquiry into the existence of a significant conflict between federal policy and state law. They incorrectly assert that this inquiry is necessary to an application of the Boyle test. Although a conflict between federal policy and state law is a necessary element of any finding of GCI, a threshold inquiry on that specific issue is not necessary but, rather, is built into the three-part Boyle test.
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