Smith Currie Newsletters:
- Common Sense Contracting
- Legal Briefs for the Timber Industry
- Federal Concessions Contractor
- White Papers
- Alternative Dispute Resolution "ADR"
- Arbitration Clauses
- Attorney Fees
- Bidding & Procurement
- Construction Connection
- Construction Finance
- Construction Law
- Construction Lawyer
- Corps of Engineers' Permits
- Delay Claims
- Design Professional Liability
- Design versus Performance Specifications
- Differing Site Conditions
- Disputes and Litigation
- Entitlement to Payment
- Ethics and Compliance
- False Claims
- Ferris Doctrine
- Government Contracts
- Hurricane Flood Disaster Cleanup
- Indemnity, Insurance and Bonds
- Indoor Air Quality
- Labor & Employment Law
- Labor Inefficiency Claims
- Liquidated Damages
- Miller Act
- No Damages for Delay
- Non-Lienable Costs
- Notice Requirements
- Past Performance Evaluations
- Payment Issues
- Performance and Payment Bonds
- Practical Documentation
- Project Labor Agreements
- Public Private Partnerships
- Redesign Services
- Reverse False Claims Exposures
- Scope Changes
- Sick Building Syndrome
- Small Business Concerns
- Small Business Procurement Process
- Time Extensions
- Understated Size of Project
- Discretionary Protection - State Bonding Requirements in P3 Projects
- Minimize the Inherent Risk in "Scope Bidding" by Amending Your Form Subcontract
- A Primer on the Miller Act's Federal Bonding Requirements
- An Overview of the Difference Between Indemnity Obligations and Obligations to Provide Additional Insured Coverage
- Public Policy Limitations on Indemnity for Sole or Partial Negligence
- Anti-Indemnification Statutes and Their Impact upon Insuring Indemnification Obligations Versus Those of an Additional Insured
- ISO 2013 Additional Insured Endorsements Revisions - What the Construction Industry Needs to Do
- Contract's Notice Provision Bars Claim for Extra Work
- Time to Dust Off Your Contracts Given AAA's New Rules for Fixed Time and Cost Construction Arbitration
- Can a Contractor Hold a Subcontractor to its Bid
The Government Made Me Do It – Or Did It?
The In re Katrina Canal Breach Litigation, 620 F.3d 455 (5th Cir. 2010) involved a contractor asserting the government contractor immunity defense against state tort law claims that the contractor’s negligent work caused levees to fail during Hurricane Katrina. This defense originates from cases involving state-law products liability claims brought against military contractors. Although originally applied in the military contractor context, some courts have expanded the defense’s availability to all government contractors. As In re Katrina Canal Breach Litigation demonstrates, however, it is often difficult to qualify for this defense.
Washington Group International (WGI) entered into a contract with the Corps of Engineers to remediate waste sites on a task order basis. The “umbrella contract” contained general requirements applicable to all of WGI’s work. The Corps would then provide a specific statement of work for each task order issued to WGI.
The particular work that became the subject of the litigation involved demolishing and removing surface and subsurface obstructions as part of the Corps’ Inner Harbor Navigation Canal Lock Replacement Project in New Orleans. During the project, WGI discovered a previously unknown subsurface structure. In response, the Corps provided a brief statement of work to WGI and that contained only a general description of the work to be performed, which included backfilling the hole created by removing the subsurface structure. WGI responded with a more detailed work plan. Concerned with the cost of WGI’s work plan, the Corps suggested using on-site borrow matter to backfill the hole, and any additional backfill material needed could be brought in from off-site. WGI followed the Corps’ suggestion, backfilled the holes, and completed the project.
Claim and Defense
A few months after WGI completed the project, Hurricane Katrina made landfall. The flood protection system in the Inner Harbor Navigation Canal project failed, allowing floodwaters into New Orleans. Plaintiffs claimed WGI improperly backfilled and compacted the areas around the levees, allowing underseepage that undermined the integrity of the levees.
WGI asserted the government contractor immunity defense, which preempts state tort law when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. The court was unable to find any reasonable precision in the Corps’ specifications for backfill material and compaction of the backfill and rejected WGI’s effort to invoke this defense.
Looking at the specifications for backfill, the court found that two factors made them imprecise. First, neither the on-site backfill material’s composition nor the testing procedure to ensure the material was suitable was reasonably specified by the government. The only specifications given by the Corps were general, requiring the backfill to be clean and free from debris. This was confirmed through deposition testimony, where WGI employees testified that they were relatively free to choose the backfill material to fill the holes.
Second, no reasonably precise specifications were provided for the composition of the off-site backfill material. The court found no evidence that the Corps had any additional requirements to ensure the off-site backfill material met the general specifications it did provide. Moreover, there was no evidence the Corps tested the off-site material before approving its use. Instead, the evidence showed that WGI had significant discretion when choosing what off-site material it used to backfill the holes.
Turning to the compaction and lifting specifications, the court similarly found that no reasonable precision was provided by the Corps. In fact, a WGI employee stated in his deposition that there were no compaction specifications. The specifications also did not prescribe a standard for compaction, as no test was required before approval was given. And because the standard was not specified, no method of compaction was given to achieve a particular final result. Again, the court found, WGI was given significant discretion to determine the compaction method used. For these reasons, the court held that WGI could not assert the government contractor immunity defense.
A contractor typically cannot dictate the level of precision found in specifications provided by the government on a particular project. And, it may be preferable at times to have a significant amount of discretion when meeting project requirements. Having the government contractor immunity defense is nevertheless especially beneficial if sued under state tort laws. So when does the immunity apply? As one court has put it, stripped to its essentials, the government contractor immunity is a claim that the Government made me do it.