880 F.2d 1018 (9th Cir. 1989), 87-4203, Kennewick Irr. Dist. v. United States

Docket Nº:87-4203, 87-4204 and 88-3800.
Citation:880 F.2d 1018
Party Name:KENNEWICK IRRIGATION DISTRICT, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. KENNEWICK IRRIGATION DISTRICT; Burlington Northern Railroad Company; National Railroad Passenger Corporation, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. KENNEWICK IRRIGATION DISTRICT, Plaintiff-Appellee, v. UNITED STATES
Case Date:July 12, 1989
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1018

880 F.2d 1018 (9th Cir. 1989)

KENNEWICK IRRIGATION DISTRICT, Plaintiff-Appellee,

v.

UNITED STATES of America, Defendant-Appellant.

KENNEWICK IRRIGATION DISTRICT; Burlington Northern Railroad

Company; National Railroad Passenger Corporation,

Plaintiffs-Appellees,

v.

UNITED STATES of America, Defendant-Appellant.

KENNEWICK IRRIGATION DISTRICT, Plaintiff-Appellee,

v.

UNITED STATES of America, Defendant-Appellant.

Nos. 87-4203, 87-4204 and 88-3800.

United States Court of Appeals, Ninth Circuit

July 12, 1989

Submission Withdrawn Feb. 24, 1989. Argued and Submitted Dec. 14, 1988.

Submission Withdrawn Feb. 24, 1989.

Resubmitted March 21, 1989.

As Amended Aug. 28 and Oct. 23, 1989.

Page 1019

Irene M. Solet, Appellate Staff, Civ. Div., Dept. of Justice, Washington, D.C., for defendant-appellant.

Robert J. Crotty and Andrew C. Bohrnsen, Lukins & Annis, P.S., and John C. Riseborough, Paine, Hamblen, Coffin, Brooke & Miller, Spokane, Washington, for plaintiffs-appellees.

Westland, Liebler, Ivey, Larsen, Quigley & Hugill, Kennewick, Wash., for the Kennewick Irrigation Dist.

Appeal from the United States District Court for the Eastern District of Washington.

Before WRIGHT, J. WALLACE and PREGERSON, Circuit Judges.

WALLACE, Circuit Judge:

The United States appeals from a judgment in favor of plaintiffs Kennewick Irrigation District (Kennewick), the National Railway Passenger Corporation (National Railway) and Burlington Northern, Inc. (Burlington Northern). Plaintiffs brought separate suits under the Federal Tort Claims Act (FTCA), 28 U.S.C. Sec. 1346(b), to recover for property damage and personal injuries arising out of two breaks in Kennewick's main irrigation canal. The canal was designed and constructed in the mid-1950s by the United States Bureau of Reclamation (Bureau). On appeal, the government contends that its actions in designing and constructing the main canal cannot give rise to liability under the FTCA because they fall within the "discretionary function" exception to that act's waiver of sovereign immunity. Alternatively, the government argues that the Amendatory Repayment Contract (Repayment Contract) between Kennewick and the United States precludes recovery against the government by plaintiffs. The district court exercised jurisdiction under 28 U.S.C. Sec. 1346(b). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. Sec. 1291. We affirm in part and vacate and remand in part.

Page 1020

I

Begun in the early 1900s and located in south-central Washington state, the Yakima Project was one of the first federal reclamation projects in the Pacific Northwest. In 1948, Congress authorized construction of the Kennewick Division to complete the Yakima Project. Yakima Project, Washington-Kennewick Division Act, Pub.L. No. 80-629, 62 Stat. 382 (1948), reprinted in 1948 U.S.Code Cong. Serv. 397. At the time of the authorization, Kennewick was operating as a local irrigation district; its facilities were incorporated into the Kennewick Division. The Yakima Project now consists of the federally operated Storage Division, which supervises the entire Yakima River water supply, and six irrigation divisions, including Kennewick, each operated under contract by a local irrigation district. In addition to its main canal, which is the subject of these lawsuits, the Kennewick Division consists of a power canal, hydroelectric power and hydraulic pumping plants, a lateral system, and various other structures.

Prior to construction, the government and Kennewick entered into the Repayment Contract. The Repayment Contract established the amount of Kennewick's estimated construction costs attributable to irrigation and the terms under which users of irrigation water would reimburse the government for a portion of those costs. Formation of such a contract was required by statute as a condition of delivery of irrigation water. See 43 U.S.C. Sec. 485h(d).

After substantial completion of construction, the government operated the main canal for an initial period and then turned it over, along with certain other portions of the division, to Kennewick for operation and maintenance. There were numerous breaks in the main canal during its first year of operation by the government. In later years, there were periodic breaks but none between 1964 and 1972.

The two breaks at issue in these appeals occurred on May 6, 1979, and September 12, 1982. The 1979 break washed out a Benton County road as well as a railroad right-of-way and track bed, causing derailment of a passenger train with resulting personal injuries. Burlington Northern, National Railway, Benton County, and adjacent landowners incurred property damage. The 1982 break, which occurred at a different location on the canal, caused property damage to the canal, Benton County, and adjacent landowners.

Much of the area traversed by the main canal is composed of highly erodible material such as silt, gravel, and cobble. Although at the time of initial construction certain portions of the canal were lined with concrete, most of the canal--including the locations of the 1979 and 1982 breaks--was unlined.

Burlington Northern and National Railway brought consolidated actions against Kennewick, the United States, and others for damages arising from the 1979 break. After various settlements had been reached, the district court entered an order realigning the parties and styling the action as one by Kennewick, National Railway, and Burlington Northern against the United States. In a second lawsuit, Kennewick sought recovery from the United States for third-party damage claims arising out of the 1982 break which had been paid by Kennewick. In a third lawsuit, Kennewick sued the United States for the costs of repair and renovation of the facilities and structures of the main canal. The three actions were consolidated for trial.

By agreement among the parties, the consolidated cases were bifurcated into liability and damages phases and heard before a magistrate. In the liability phase, the magistrate found that both the 1979 and 1982 breaks resulted from "piping," a phenomenon whereby fine silts are eroded by water into an open area such as a rodent hole, causing a gradually increasing channel and eventually a break in the canal. The magistrate further found that negligence by the United States in both the design and the construction of the Kennewick main canal was the proximate cause of the piping and therefore of the canal breaks. The magistrate determined that in designing the canal, the Bureau negligently failed to take the danger of piping into

Page 1021

account. The magistrate found the Bureau's design negligent in failing to (1) line the entire canal with concrete, (2) install filters around culverts, and (3) install filter material between the compacted silt which formed the bed of the canal and the open gravel or cobbles beneath it. The magistrate also found that the Bureau's contracting officer, who oversaw the general contractor's work, failed to excavate unsuitable material as provided in the contract's specifications, and that this constituted negligence in the construction of the canal.

The magistrate rejected several defenses advanced by the government. He determined that the decisions concerning lining of the canal and other aspects of canal design and construction were simply engineering decisions, not discretionary decisions grounded in social, economic, or political policy. As a result, the magistrate held that these decisions fell outside the discretionary function exception. The magistrate also rejected the government's defense based on the provision of the Repayment Contract which made "expenditures made by the United States on account of damage claims of all kinds" a reimbursable cost of construction of the Kennewick Division. The magistrate concluded that this provision was not intended to hold the government harmless for claims by third parties for damages resulting from negligent design and construction of the canal. The district court entered judgment against the government on the issue of liability for the 1979 and 1982 breaks.

In the subsequent damages phase of the trial, the magistrate awarded damages of $1,225,805.08 to Kennewick, $147,019.99 to National Railway, and $31,905.00 to Burlington Northern for damages stemming from the 1979 break. In addition, the magistrate awarded damages of $200,288.00 to Kennewick for the 1982 break. For the costs of canal repair work, Kennewick was awarded an additional $123,265.23.

II

The United States first argues that its actions in designing and constructing the Kennewick main canal cannot give rise to liability under the FTCA because they fall within the "discretionary function" exception. We review independently the district court's determination of subject matter jurisdiction under the discretionary function exception. Arizona Maintenance Co. v. United States, 864 F.2d 1497, 1499 (9th Cir.1989) (Arizona Maintenance ); Mitchell v. United States, 787 F.2d 466, 468 (9th Cir.1986) (Mitchell ), cert. denied, 484 U.S. 856, 108 S.Ct. 163, 98 L.Ed.2d 118 (1987).

The FTCA authorizes civil suits against the United States

for money damages ... for injury or loss of property, or personal injury ... 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). The FTCA contains several exceptions, however, to this broad waiver of sovereign immunity. Berkovitz v...

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