Adkisson v. Jacobs Eng'g Grp., Inc.
| Decision Date | 18 May 2022 |
| Docket Number | 21-5801 |
| Citation | 35 F.4th 421 |
| Parties | Greg ADKISSON et al., Plaintiffs-Appellees, v. JACOBS ENGINEERING GROUP, INC., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Theane Evangelis, GIBSON, DUNN & CRUTCHER LLP, Los Angeles, California, for Appellant. Mark E. Silvey, MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC, Knoxville, Tennessee, for Appellees. ON BRIEF: Theane Diana Evangelis, Theodore J. Boutrous, Jr., Peter S. Modlin, Jeremy S. Smith, GIBSON, DUNN & CRUTCHER, Los Angeles, California, Dwight E. Tarwater, Catherine Williams Anglin, PAINE TARWATER BICKERS LLP, Knoxville, Tennessee, J. Isaac Sanders, William J. Harbison II, NEAL & HARWELL, PC, Nashville, Tennessee, for Appellant. Mark E. Silvey, Louis W. Ringger, III, William A. Ladnier, MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC, Knoxville, Tennessee, for Appellees. David D. Ayliffe, TENNESSEE VALLEY AUTHORITY, Knoxville, Tennessee, for Amicus Curiae.
Before: SUTTON, Chief Judge; GILMAN and ROGERS, Circuit Judges.
This consolidated action involves a group of plaintiffs who worked, or had spouses or next of kin who worked, on the Tennessee Valley Authority's (TVA's) coal-ash cleanup, removal, and recovery project at the Kingston Fossil Fuel Plant (the Plant) in Roane County, Tennessee. Plaintiffs sued Jacobs Engineering Group, Inc. (Jacobs)—an entity that has served as the TVA's prime contractor for the coal-ash cleanup since February 2009—for numerous common-law torts.
After this court reversed and remanded the district court's initial decision to dismiss the case for lack of jurisdiction, the district court bifurcated the case and proceeded with Phase I to determine whether Jacobs should be held generally liable to Plaintiffs. A jury found that Jacobs had a duty to Plaintiffs, that Jacobs breached that duty, and that Jacobs's actions were a potential cause of Plaintiffs’ alleged injuries. Phase II, which has not yet occurred, is intended to assess specific causation with respect to individual Plaintiffs and the extent to which they are entitled to damages.
Both before and after Phase I of the trial, Jacobs filed motions seeking derivative immunity from suit based on its status as a government contractor. The district court denied Jacobs's motions. Jacobs subsequently filed yet another motion seeking derivative immunity based on what it claimed were intervening changes in the applicable law. The district court construed the motion as one for reconsideration under Rule 54(b) of the Federal Rules of Civil Procedure. It again denied Jacobs's motion. This interlocutory appeal concerning Jacobs's alleged immunity followed. For the reasons set forth below, we AFFIRM the district court's denial of derivative contractor immunity.
The TVA is a corporation created by the Tennessee Valley Authority Act of 1933 and, as such, is wholly owned by the United States government. See 16 U.S.C. §§ 831 et seq. ; see also Hill v. U.S. Dep't of Labor , 65 F.3d 1331, 1333 (6th Cir. 1995). It owns, operates, and manages the Plant in question. Chesney v. Tenn. Valley Auth. , 782 F. Supp. 2d 570, 572 (E.D. Tenn. 2011). One of the containment dikes that retained a pond used to dispose of coal-ash sludge—a waste by-product from the Plant—failed in December 2008. This failure caused approximately 5.4 million cubic yards of coal-ash sludge to spill from the 84-acre containment pond to an adjacent area of about 300 acres.
The TVA and the Environmental Protection Agency (EPA) responded to the spill pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (CERCLA), and the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. §§ 300.1 et seq. See Mays v. Tenn. Valley Auth. , 699 F. Supp. 2d 991, 998 (E.D. Tenn. 2010). After an initial emergency-response phase, and pursuant to CERCLA and Executive Order No. 12,580, the EPA delegated its authority to the TVA to serve as the lead federal agency on the cleanup and to engage in coal-ash-removal actions. Id. (citing 42 U.S.C. §§ 9604(a) – (b), 9615 ; 40 C.F.R. § 300.5 ). All coal-ash response and removal actions have been within the TVA's delegated authority under CERCLA and Executive Order No. 12,580 since January 11, 2009. Id.
Pursuant to a written contract, executed in February 2009, the TVA engaged Jacobs to provide professional services associated with management of the coal-ash recovery project (the Jacobs/TVA contract). The Jacobs/TVA contract provides "for project planning, oversight and environmental services to assist TVA in the Kingston Dredge Cell Incident recovery and remediation" and designates Jacobs as the TVA's "prime contractor providing project planning, management and oversight to assist TVA in overall recovery and remediation associated with this incident."
Part of Jacobs's role under the Jacobs/TVA contract was to evaluate the potential hazards to human health and safety associated with the work to be performed in execution of the ash-recovery-and-removal program. Jacobs was then required to prepare and submit for the TVA's approval a written site-specific safety and health plan called the Site Wide Safety and Health Plan. The Jacobs/TVA contract provides that Jacobs will abide by the Plan and "shall comply with Federal, State, and local laws (including regulations) affecting performance of its obligations" under the contract. It also requires that Jacobs "perform all work pursuant to the technical requirements as provided by the Technical Contract Manager (TCM) and all applicable laws, codes, rules, and regulations in effect at the time of the services." In addition, Jacobs was to "be proactive in taking necessary measures to avoid accidents or incidents [in] which human health or safety is jeopardized."
This lawsuit arose because some of Jacobs's employees claim that they were exposed to coal ash (and its airborne particulate "fly ash") during this cleanup when Jacobs "did not carry out its validly conferred authority as an ‘independent contractor’ but, through its recklessly unsupervised agents, acted contrary to and outside its scope of contractual authority and directives in fact and law granted from TVA as an ‘independent contractor.’ " 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 for the manner in which Jacobs conducted the cleanup and exposed workers to the coal ash. In November 2013 and again in January 2014, additional Plaintiffs filed substantially similar suits against Jacobs in the same jurisdiction. See Thompson et al. v. Jacobs Eng'g Grp., Inc. , No. 3:13-CV-666; Cunningham et al. v. Jacobs Eng'g Grp., Inc. , No. 3:14-CV-20. Jacobs moved to dismiss all three actions pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In July 2014, the assigned magistrate judge granted a motion by the Thompson Plaintiffs to consolidate the three cases with Adkisson —as the first case filed—serving as the lead case.
Two months later, the district court dismissed all of Plaintiffs’ claims against Jacobs based on a lack of subject-matter jurisdiction. It found that Jacobs was entitled to derivative immunity as a corollary of the discretionary-function exception to the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346, 2671 et seq .
A timely appeal of that decision followed. We reversed the district court's dismissal, holding that derivative immunity under Yearsley v. W.A. Ross Construction Co. , 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940), is not jurisdictional. The district court therefore erred in dismissing the case under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Adkisson v. Jacobs Eng'g Grp., Inc. (Adkisson I) , 790 F.3d 641, 645 (6th Cir. 2015). On remand, the district court was instructed to conduct a Rule 12(b)(6) analysis to consider (1) whether Jacobs was eligible for derivative immunity, and (2) whether Jacobs's conduct would fall under the corollary of the discretionary-function exception to the FTCA. Id. at 648–49.
This court, in its decision, commented on the merits of both questions that it remanded back to the district court. First, the court addressed the question of Jacobs's derivative immunity under Yearsley . It concluded that Plaintiffs’ complaints "could plausibly be construed as alleging that Jacobs violated the scope of its agreement with TVA" and, moreover, that Jacobs "did not comply with Federal and State laws or regulations and that Jacobs acted in a manner that was converse to statutory authorization and TVA's contractual directives" in a manner that would prevent derivative immunity from extending to Jacobs. Id. at 648 (internal quotation marks omitted).
Second, this court addressed the question of Jacobs's immunity under the FTCA's discretionary-function exception. It noted that, "[e]ven if the district court determines that Jacobs is eligible for Yearsley immunity, Jacobs's exemption from liability will depend on whether its specific conduct at issue would fall under the corollary of the discretionary-function exemption of the FTCA." Id. The court identified the following two-part test that governs the discretionary-function exception: (1) "the conduct must be discretionary, meaning that it involves an element of judgment or choice," and (2) "the conduct must also be of the type that the discretionary-function exception was designed to shield." Id. (citations and internal quotation marks omitted).
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