Adkisson v. Jacobs Eng'g Grp., Inc., 14–6207.

Decision Date02 June 2015
Docket NumberNo. 14–6207.,14–6207.
Citation790 F.3d 641
PartiesGreg ADKISSON et al., Plaintiffs–Appellants, v. JACOBS ENGINEERING GROUP, INC., Defendant–Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED:James K. Scott, Stokes, Williams, Sharp & Davies, Knoxville, Tennessee, for Adkisson Appellants. Joshua J. Bond, Hodges, Doughty & Carson, Knoxville, Tennessee, for the Thomas and Smith Appellants. S. Joseph Welborn, Smith, Cashion & Orr, PLC, Nashville, Tennessee, for Appellee. ON BRIEF:James K. Scott, Stokes, Williams, Sharp & Davies, Knoxville, Tennessee, Joshua J. Bond, Hodges, Doughty & Carson, Knoxville, Tennessee, for Appellants. S. Joseph Welborn, Smith, Cashion & Orr, PLC, Nashville, Tennessee, for Appellee.

Before: GILMAN, ROGERS, and SUTTON, Circuit Judges.



This case arises out of the cleanup and remediation work that Jacobs Engineering Group, Inc. (Jacobs) performed at the Kingston Fossil Fuel Plant (KIF plant) following a December 2008 coal-ash spill. Jacobs managed the on-site work pursuant to a contract with the Tennessee Valley Authority (TVA), which owns and operates the KIF plant.

Individuals who worked on the coal-ash cleanup, along with some of their spouses (collectively, the Plaintiffs), filed three separate lawsuits against Jacobs, claiming that the workers suffered negative health impacts as a result of Jacobs's failure to monitor the fly ash (which is the finer particles of coal ash), to protect the workers from the fly ash, and to disclose the fly ash's toxic nature. The district court dismissed all of the Plaintiffs' claims based on a lack of subject-matter jurisdiction, concluding that Jacobs was entitled to government-contractor immunity as a corollary of the discretionary-function exception to the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 2674, 2680. For the reasons set forth below, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion.

A. TVA and the coal-ash spill

TVA is a corporate agency and instrumentality of the United States, created by and existing pursuant to the Tennessee Valley Authority Act of 1933. 16 U.S.C. § 831 et seq.; see also Tenn. Valley Auth. v. Kinzer, 142 F.2d 833, 837 (6th Cir.1944). The KIF plant is a coal-fired plant generating electricity in Roane County, Tennessee. A byproduct of burning coal for the generation of electricity is coal ash. On December 22, 2008, a coal-ash containment dike at the KIF plant failed, spilling approximately 5.4 million cubic yards of coal-ash sludge over 300 acres of adjacent land. Chesney v. Tenn. Valley Auth., 782 F.Supp.2d 570, 571–73 (E.D.Tenn.2011).

TVA and the Environmental Protection Agency (EPA) responded to the coal-ash spill as required by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the EPA's National Oil and Hazardous Substances Pollution Contingency Plan. See Mays v. Tenn. Valley Auth., 699 F.Supp.2d 991, 998 (E.D.Tenn.2010). During this initial emergency-response phase, the EPA delegated its authority to TVA to remove the coal ash. Id. (citing 42 U.S.C. §§ 9604(a) -(b) ; id. § 9615; 40 C.F.R. § 300.5 ). TVA has been the lead agency authority for all further coal-ash cleanup, removal, and remediation since the EPA terminated the initial emergency-response phase on January 11, 2009. Id.

B. Jacobs's contract with TVA

In February 2009, Jacobs entered into a contract with TVA to serve as the prime contractor providing project planning, management, and oversight to assist in the overall recovery and remediation associated with the coal-ash spill. Jacobs, pursuant to its contract, subsequently prepared and provided to TVA a comprehensive Site Wide Safety and Health Plan (SWSHP). The SWSHP applies to all general construction activities at the site, as well as to CERCLA remediation activities in accordance with the EPA's Standard Operating Safety Guide and 29 C.F.R. § 1910.120, which governs hazardous-waste operations and emergency response.

A wide range of topics is addressed in the SWSHP, including the site's potential hazards, health-hazard monitoring, and training. The SWSHP also sets forth the minimum personal protective equipment (PPE) required for workers, as well as a protocol for site controls, work zones, and personal hygiene. Additional protection, such as a respirator, is mentioned in the SWSHP as a possibility that might be required at times, depending on the type of work being performed (e.g., tasks with the highest potential exposure to fly ash).

C. Three lawsuits

The Plaintiffs are individuals who worked on the remediation of the coal-ash spill at the KIF Plant, plus some of their spouses. Greg Adkisson, along with 48 other individuals, filed suit against Jacobs in the United States District Court for the Eastern District of Tennessee in August 2013, alleging claims of outrageous conduct, battery, negligence, negligence per se, intentional and/or reckless failure to warn, reckless infliction of emotional distress, fraud, misrepresentation and fraudulent concealment, and strict liability for ultrahazardous or abnormally dangerous activity. See Adkisson et al. v. Jacobs Eng'g Grp., Inc., No. 3:13–CV–505. The Plaintiffs allege that Jacobs improperly monitored the fly ash; inadequately trained the workers about the hazards associated with inhaling toxic fly ash; inadequately monitored their medical conditions; denied their requests for respirators, dust masks, and PPE; exposed them to high concentrations of fly ash toxic constituents; and fraudulently concealed and denied that they had been so exposed. Alleging “eye problems, sinus problems, pulmonary problems, heart problems and other health-related problems” from their work on site, the Plaintiffs seek compensatory and punitive damages.

In November 2013, Kevin Thompson, Joy Thompson, and Shaun Travis Smith filed a substantially similar suit against Jacobs in the same jurisdiction.See Thompson et al. v. Jacobs Eng'g Grp., Inc., No. 3:13–CV–666. Joe and Taylor Cunningham then sued Jacobs on the same grounds in January 2014, also in the Eastern District of Tennessee. See Cunningham et al. v. Jacobs Eng'g Grp., Inc., No. 3:14–CV–20. Jacobs moved to dismiss all three actions for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the first motion being filed in November 2013 and the latter two in February 2014.

In July 2014, the magistrate judge who was assigned to the case granted a motion by the Thompson plaintiffs to consolidate the three cases, with Adkisson, as the first to be filed, serving as the lead case. Two months later, the district court granted Jacobs's Rule 12(b)(1) motion to dismiss all of the Plaintiffs' claims for lack of subject-matter jurisdiction based on Jacobs's eligibility for government-contractor immunity as a corollary of the discretionary-function exception to the FTCA. This timely appeal followed.

A. The Plaintiffs' case should not have been dismissed for lack of subject-matter jurisdiction

All of the Plaintiffs' claims were dismissed under Rule 12(b)(1) because the district court concluded that Jacobs is immune from suit based on so-called “derivative discretionary-function immunity.” In so doing, the court relied heavily on its prior opinion in Chesney v. Tennessee Valley Authority, 782 F.Supp.2d 570 (E.D.Tenn.2011). The court in Chesney ruled that engineering contractors working for TVA on the same coal-ash spill were entitled to derivative immunity as set forth in Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940), under the discretionary-function doctrine. Chesney, 782 F.Supp.2d at 586. It dismissed the complaint on jurisdictional grounds based on its conclusion that Yearsley entitles government contractors to sovereign immunity. Id. Because we conclude that Yearsley immunity is not jurisdictional in nature, the district court here erred in dismissing the Plaintiffs' complaints on that basis.

1. Government-contractor immunity under Yearsley

If Jacobs is eligible for any sort of immunity, it is derivative of the immunity that the federal government would be entitled to in the same situation. The United States, as a sovereign entity, is immune from suit unless it consents to be sued. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (citing United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) ). Under the FTCA, the United States has waived its sovereign immunity to tort suits, but with certain exceptions. 28 U.S.C. § 2674. One of those exceptions is for discretionary functions, meaning that the United States 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.” Id. § 2680(a). TVA, as a federal agency, is a beneficiary of the FTCA's discretionary-function exemption. Id. § 2671 ([T]he term Federal agency includes ... corporations primarily acting as instrumentalities or agencies of the United States....”); see also id. § 2674 (entitling TVA to assert the same defenses to tort claims as the United States, based on judicial or legislative immunity).

On the other hand, the FTCA explicitly excludes independent contractors from its scope.See id. § 2671 ([T]he term Federal agency ... does not include any contractor with the United States.”). But Jacobs argues—and the district court held—that Jacobs is nevertheless entitled to derivative sovereign immunity for discretionary functions based on Yearsley. In Yearsley, the Supreme Court held that a contractor who built river dikes pursuant to a contract with the U.S. government, as authorized by Congress,...

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