McCall v. U.S. Dept. of Energy Through Bonneville Power Admin.

• Decision Date: 17 September 1990
• Docket Number: No. 89-35385,89-35385
• Citation: 914 F.2d 191
• Parties: Kelly McCALL, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF ENERGY THROUGH BONNEVILLE POWER ADMINISTRATION, Defendant-Third-Party-Plaintiff-Appellee, v. IRBY CONSTRUCTION COMPANY, INC., Third-Party-Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 191

914 F.2d 191

Kelly McCALL, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF ENERGY THROUGH BONNEVILLE POWER

ADMINISTRATION, Defendant-Third-Party-Plaintiff-Appellee, v. IRBY CONSTRUCTION COMPANY, INC., Third-Party-Defendant.

No. 89-35385.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 7, 1990.

Decided Sept. 17, 1990.

John M. Morrison, Morrison Law Offices, Helena, Mont., for plaintiff-appellant.

Kris A. McLean, Asst. U.S. Atty., Helena, Mont., for defendant-third-party-plaintiff-appellee.

William E. Jones, Garlington Law Firm, Missoula, Mont., for third-party-defendant.

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

Before SCHROEDER, NORRIS and WIGGINS, Circuit Judges.

SCHROEDER, Circuit Judge:

Appellant Kelly McCall, an employee of an independent contractor, seriously injured himself while working on a construction project for the Bonneville Power Administration, an Agency of the United States of America. McCall brought suit against the United States under the Federal Tort Claims Act, 28 U.S.C. Secs. 1346(b), 2671-80 (1988). The district court granted the United States' motion for summary judgment against McCall. McCall appeals. The key issue before us is whether, under the law of Montana, a project owner or general contractor has a nondelegable duty to maintain a safe workplace for the employees of independent contractors engaged

in inherently dangerous activities. We find that Montana recognizes such a duty and accordingly reverse.

FACTS AND PROCEEDINGS BELOW

The Bonneville Power Administration (United States), hired Irby Construction Company (Irby), to work on the construction of an electric transmission line. Appellant Kelly McCall, an Irby employee, fell 100 feet when his lineman's belt failed while he was performing inherently dangerous work on the construction project. McCall sued the United States under the Federal Tort Claims Act ("FTCA"). McCall claimed that the United States, as project owner, breached its nondelegable duty under Montana law to provide workers engaged in inherently dangerous activities with a safe place to work.

The United States moved for summary judgment against McCall. The district court held that the United States, under Montana law, did not owe McCall, an employee of an independent contractor, a nondelegable duty to provide a safe workplace. The district court granted the United States' motion for summary judgment.

DISCUSSION

The FTCA holds the United States liable for certain torts "in the same manner and to the same extent as a private individual under like circumstances," 28 U.S.C. Sec. 2674, "in accordance with the law of the place where the act or omission occurred." 28 U.S.C. Sec. 1346(b). Because McCall's injury occurred in Montana, Montana law applies. See Gardner v. United States, 780 F.2d 835, 837 (9th Cir.1986).

Ordinarily, a general contractor or a project owner is not liable for injuries sustained by employees of a subcontractor. Kemp v. Bechtel Constr. Co., 221 Mont. 519, 720 P.2d 270, 274 (1986) (citation omitted). See generally Restatement (Second) of Torts Sec. 409 (1965). States have, however, developed exceptions to this general rule, including an exception which imposes liability upon project owners where the employees of subcontractors engage in inherently dangerous work. See Restatement (Second) of Torts Secs. 409 comment b, 410-429 (1965). Our circuit first dealt with a claim against the United States under the FTCA by an employee of an independent contractor in Thorne v. United States, 479 F.2d 804 (9th Cir.1973). We there made it clear that the United States Bureau of Reclamation would be liable for injuries "caused by the negligent or wrongful acts or omissions of an employee of the Bureau" where "the Bureau, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." Id. at 807. We looked to the law of California, and held that under that state's leading case, Van Arsdale v. Hollinger, 68 Cal.2d 245, 66 Cal.Rptr. 20, 437 P.2d 508 (1968), California imposed liability on a government project owner

for its failure to exercise care in a situation in which the work was sufficiently dangerous that it had a duty to others who might sustain injuries from the work unless proper precautions were taken in the performance thereof.... Under California law, the Bureau, in this case, was under a duty to exercise reasonable care to see that proper precautions were taken by the contractor.

Thorne, 479 F.2d at 808-09. Our decision in Thorne indicates that where California law applies, the United States has certain nondelegable duties and obligations in situations where a contractor's employees are engaged in inherently dangerous work. The United States, however, may not be held vicariously liable for the negligent acts of those who are not its employees. United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). Judge Merrill, recognizing a potential problem in the future, concurred specially in Thorne, explaining that "the duty here owed by the Bureau ... was to exercise reasonable care to see that proper precautions were taken by the contractor. It was breach of this duty by employees of the Bureau that results in liability of the United States." 479 F.2d at 810.

When one looks to California law, however, one sees that it rests upon section 416 of the Restatement (Second) of Torts, and expresses the law of nondelegable duty in theoretical terms a bit different from the concept articulated in Thorne. Under the California decisions and the Restatement, the project owner is liable not for its own negligent acts, but for the negligent acts of its contractor's employees. See Van Arsdale, 437 P.2d at 512-14; Aceves v. Regal Pale Brewing Co., 24 Cal.3d 502, 508-09, 156 Cal.Rptr. 41, 595 P.2d 619, 621-22 (1979); Jimenez v. Pacific Western Constr. Co., Inc., 185 Cal.App.3d 102, 109-111, 229 Cal.Rptr. 575, 578-79 (1986); Restatement (Second) of Torts Sec. 416 introductory note. We squarely addressed this problem in McGarry v. United States, 549 F.2d 587, 590 (9th Cir.1976), cert. denied, 434 U.S. 922, 98 S.Ct. 398, 54 L.Ed.2d 279 (1977), where a unanimous panel made it clear that the government's liability rested on the negligence of the government's employees, not the contractor's, and expressly rejected the assertion that liability under Thorne was imposed vicariously on the government.

At least two other circuits--the Fifth, on which we relied in Thorne, and more recently the Third--have followed similar reasoning. Emelwon, Inc. v. United States, 391 F.2d 9, 11 (5th Cir.), cert. denied, Florida v. Emelwon, Inc., 393 U.S. 841, 89 S.Ct. 119, 21 L.Ed.2d 111 (1968); Merklin v. United States, 788 F.2d 172, 175-77 (3d Cir.1986). The Fifth Circuit in Emelwon held that the United States could be liable under the FTCA for breach of a nondelegable duty to see that an independent contractor carries out inherently dangerous activities in a nonnegligent manner. 391 F.2d at 11-15. The court described the liability as flowing from the project owner or general contractor's "own failure to exercise reasonable care," rather than flowing vicariously from the independent contractor's negligence. Id. at 11. In Merklin, the Third Circuit held that the United States could be liable under the FTCA for a direct breach of its own duty to an independent contractor's employees engaged in inherently dangerous work. 788 F.2d at 176.

In determining whether the United States may be liable under the FTCA for breach of a nondelegable duty of safety, our own decisions consider whether the state has adopted sections 416 and 427 of the Restatement (Second) of Torts. ¹ See, e.g., Gardner, 780 F.2d at 837; Rooney v. United States, 634 F.2d 1238, 1244 (9th Cir.1980). The pivotal issue in this case therefore is whether Montana follows the Restatement provisions which impose upon a project owner a nondelegable duty to ensure a safe place to work where the work to be performed is inherently dangerous. The district court determined that Montana has not done so. It held that the owner or general contractor has a nondelegable duty with respect to safety only when it reserves such a duty in the contract. The district court held that since the contract in this case simply reserves the United States' discretionary right to inspect the work site, there was no nondelegable duty under Montana law. The district court based its holding on Dischner v. United States, 654 F.Supp. 631, 633 (D.Mont.1987), where the Montana District Court held that the United States did not bear responsibility to ensure a safe place to work where the contract merely established the United States' discretionary authority to act. This court ultimately vacated that decision in Dischner v. United States, 866 F.2d 293 (9th Cir.1989). We there held that petitioner's claim was not necessarily excluded from coverage under the FTCA's "discretionary function" exception. Id. at 294. Although we did not directly address the merits of the nondelegable duty issue, we remanded the question for reconsideration in language suggesting a lack of approval of the district court's ruling. Id.

The key Montana case on the issue of a project owner's nondelegable duty to provide a safe workplace is Kemp v. Bechtel Constr. Co., 221 Mont. 519, 720 P.2d at 274-75. The district court interpreted that case as not adopting Restatement provisions 416 and 427. We find otherwise. In Kemp, the Montana Supreme Court did adopt the principles of the Restatement, holding that a project owner may "owe the employee of a subcontractor a nondelegable duty of safety where the work is 'inherently dangerous.' " Id. 720 P.2d at 274 (citing Ulmen v. Schwieger, 92 Mont. 331, 12 P.2d 856 (1932)). The Kemp court expressly discussed Restatement sections 416 and 427 and based its interpretation of those sections on a...