Arizona Maintenance Co. v. U.S., 87-2471

• Decision Date: 10 January 1989
• Docket Number: No. 87-2471,87-2471
• Citation: 864 F.2d 1497
• Parties: ARIZONA MAINTENANCE CO., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1497

864 F.2d 1497

ARIZONA MAINTENANCE CO., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 87-2471.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 15, 1988.

Decided Jan. 10, 1989.

John F. Molloy, Molloy, Molloy, Jones & Donahue, Tucson, Ariz., for plaintiff-appellant.

James D. Whitney, Asst. U.S. Atty., Tucson, Ariz., for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before GOODWIN, SCHROEDER and POOLE, Circuit Judges.

SCHROEDER, Circuit Judge:

Appellant Arizona Maintenance Co., a public utility serving domestic and commercial water users in Arizona, filed this suit against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. Secs. 1346(b) and 2674. Arizona Maintenance claimed that blasting done by the United States in connection with construction of the Central Arizona Project seriously damaged Arizona Maintenance's water system. The district court granted Appellee's Motion to Dismiss and/or for Summary Judgment, holding that the government's decision to blast and the manner in which it blasted were discretionary decisions protected by the discretionary function exception to the FTCA. We review the district court's decision in light of the Supreme Court's recent decision in Berkovitz v. United States, --- U.S. ----, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988).

BACKGROUND

In 1968, the Colorado River Basin Project Act established the Central Arizona Project ("CAP"). 43 U.S.C. Sec. 1521. The CAP is part of a program designed to regulate the flow of the Colorado River in order to provide adequate water supplies, improved navigation, added outdoor recreation areas, improved wildlife conditions and added electrical power generation. 43 U.S.C. Sec. 1501(a). The Act places upon the Secretary of the Interior responsibility for constructing, operating and maintaining the aqueducts, pumping plants, canals, power plants and drainage works that are a part of the CAP. 43 U.S.C. Sec. 1521(a).

In carrying out this responsibility, the Secretary of the Interior has the authority to conduct investigations concerning the optimum route for the CAP. See 43 U.S.C. Sec. 1511. In determining this route, proposed routes must be studied to determine the amount of possible subsidence, or settling of the land created by pumping out the underground water system. The probability of subsidence greatly affects the path of the CAP aqueducts.

In the Tucson area, at least a portion of a proposed canal route ran near wells operated by the appellant Arizona Maintenance. It became necessary in 1984 for the Bureau of Reclamation to determine the amount of possible subsidence on that route. According to the government's affidavits attached to its moving papers in the suit, there were three options available for determining whether subsidence was a factor along the proposed route: researching available geologic information, test drilling the soil, or using seismic refraction surveys conducted by means of dynamite blasts.

In this case, the Chief of the Geology and Exploration Branch of the Bureau of Reclamation chose to investigate subsidence by using the dynamite blast option, giving as his reasons that blasting was less expensive and less time-consuming than drilling. The record does not indicate what, if any, factors the construction industry generally considers in deciding which methods to use in determining subsidence.

The government proceeded in 1984 to blast in the area of appellant's wells. The blasting damaged appellant's domestic water system, including extensive damage to at least one of appellant's wells. Appellant sued under the Federal Tort Claims Act. Its complaint alleged first that the government was negligent in using the blasting method to determine subsidence when other available methods would have provided adequate information with less risk. In addition, appellant claimed that the government negligently used too much dynamite when it blasted, resulting in damage to appellant's water system. It alleged damages in excess of $4,000,000.

The government moved for summary judgment on the ground that its decision to use dynamite blasting, and the manner in which the blasting was conducted, were within the FTCA's discretionary function exception which shields the government from liability. The district court granted the government's motion, holding that because the government employee had a choice as to how to proceed, both the decision to use dynamite and its implementation were discretionary functions. We have held that review of a district court determination of subject matter jurisdiction under the discretionary function exception is de novo. Mitchell v. United States, 787 F.2d 466, 468 (9th Cir.1986), cert. denied, --- U.S. ----, 108 S.Ct. 163, 98 L.Ed.2d 118 (1987).

DISCUSSION

The FTCA is a broad authorization for suits against the United States

for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. Sec. 1346(b). While the Act provides that the United States is liable for torts in the same manner and to the same extent as private individuals, 28 U.S.C. Sec. 2674, the Act carves out an exception, and thus retains government immunity for performance of discretionary functions or duties. This "discretionary function" exception has been the subject of much litigation in recent decades. It provides that the government is not liable for

[a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. Sec. 2680(a).

The statute does not further elucidate Congressional meaning. A 1942 House Report describing the exception and quoted in many later reports is not much more helpful, but it does suggest that the exception is based upon preserving immunity for the formulation of statutory or regulatory policy. The Report states that the exception bars claims based upon

the performance or nonperformance of discretionary functions, whether or not the discretion involved be abused, and claims based upon the act or omission of a Government employee exercising due care in the execution of a statute or regulation, whether or not valid. This is a highly important exception, intended to preclude any possibility that the bill might be construed to authorize suit for damages against the Government growing out of an authorized activity ... where no negligence on the part of any Government agent is shown, and the only ground for suit is the contention that the same conduct by a private individual would be tortious, or that the statute or regulation authorizing the project was invalid.

H.R.Rep. No. 2245, 77th Cong., 2d Sess., p. 10; S.Rep. No. 1196, 77th Cong., 2d Sess, p. 7; H.R.Rep. No. 1287, 79th Cong., 1st Sess., pp. 5-6; Hearings Before H. Com. on Judiciary on H.R. 5373 and H.R. 6463, 77th Cong., 2d Sess., p. 33, quoted in Dalehite v. United States, 346 U.S. 15, 29 n. 21, 73 S.Ct. 956, 964 n. 21, 97 L.Ed. 1427 (1953). The Supreme Court, in describing Congress' overall purpose, has thus said that the discretionary function exception "marks the boundary between Congress' willingness to impose tort liability upon the United States and its desire to protect certain governmental activities from exposure to suit by private individuals." Berkovitz, 108 S.Ct. at 1958 (quoting United States S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 808, 104 S.Ct. 2755, 2761-2762, 81 L.Ed.2d 660 (1984)).

The Supreme Court first extensively analyzed the discretionary function exception in 1953. Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427 (1953). That case involved a catastrophic explosion of fertilizer which was stored as part of a post-World War II program to export fertilizer to occupied countries in order to increase the amount of available food. Id. at 19-20, 73 S.Ct. at 959-960. The fertilizer was made with the combustible chemical ammonium nitrate. Plaintiffs sued the government for injuries resulting from the explosion. They alleged that although the government knew that ammonium nitrate was an explosive chemical, it instituted the program without sufficient investigation concerning the properties of the fertilizer, and shipped the fertilizer to a congested area without warning that an explosion was possible. Id. at 23, 73 S.Ct. at 961-962.

The Court held that the government's challenged conduct fell within the discretionary function exception. It interpreted the exception as covering conduct linked to the policy-making function of government, stating that "[w]here there is room for policy judgment and decision there is discretion." Id. at 36, 73 S.Ct. at 968. The Court's language, however, was expansive, and appeared to sweep within the exception conduct in that case ranging from a cabinet-level decision to store and export the fertilizer, to the lower-level decisions concerning fertilizer loading. The Court stated that "acts of subordinates in carrying out the operations of government in accordance with official directions [issued pursuant to a policy judgment] cannot be actionable." Id.

More recently, the Court in United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984), considered claims that the FAA was negligent in adopting and administering a system of spot checks to ascertain compliance with air safety regulations. In Varig, the Court stressed that policy-making was the touchstone...