Is there government contractor liability under state tort law for government contract operations in a war zone?  An important case in this developing area of law is working its way through the federal courts.

On September 8, 2010, the United States District Court for the District of Maryland denied the government contractors’ motions to dismiss for lack of subject matter jurisdiction and ordered counsel for the Plaintiffs, Defendant government contractors, and the United States as amicus curiae to formulate a discovery plan in this multi-district jurisdiction case styled In Re KBR, Inc., Burn Pit Litigation.

Kellogg Brown & Root, Inc. (KBR, Inc.) had a government contract to treat water and to manage and dispose of waste at military bases in Iraq and Afghanistan.  This is representative of the increasing role of government contractors in combat zones.

Plaintiffs including American soldiers, veterans, and former contractor employees filed forty-three complaints in forty-two states asserting state law tort claims against KBR Inc, Kellogg Brown & Root LLC, and Halliburton Company (government contractor Defendants).  Plaintiffs claim that they were injured by exposure to contaminated water and to toxic emissions from burn pits.  The Judicial Panel on Multi-District Litigation transferred the cases to the United States District Court, District of Maryland for coordinated and consolidated pretrial proceedings.

The September 8th decision examines the available case precedent and policy considerations inherent in these cases.  The Court attempts to balance competing interests of exercising caution against Courts passing judgment on matters outside their realm of competence and in national security matters entrusted to other branches of government on one hand, and being willing to adjudicate cases that might ultimately expose defense contractors to appropriate liability on the other hand.

Defendants sought dismissal on three grounds: (1) the claims are nonjusticiable under the political question doctrine, (2) the Defendants are entitled to “derivative sovereign immunity” as a discretionary function under the Federal Tort Claims Act (FTCA), and (3) Plaintiff’s claims are preempted by the “combatant activities” exception in the FTCA.

The Plaintiffs’ strongest argument against summary judgment is that their claims are limited to activities alleged to have been negligently performed by Defendants in breach of their government contracts.  Plaintiff assert that Defendants made decisions unauthorized by the military to use burn pits and to treat water. The Court appears persuaded by this assertion as it is loathe to second-guess the reasonableness of military decisions.

The Defendants dispute that they treated water or disposed of waste in violation of their contracts and without authorization.

The District Court decided it is necessary to develop the facts in order to identify unauthorized actions performed by Defendants.  “The costs…of blanketing government contractors with the sovereign’s cloak of immunity at this early stage of the litigation are significant.  In this case, Plaintiffs seek compensation for injuries resulting from exposure to burn pit emissions and contaminated water, which they allegedly would not have suffered absent what they claim were the Defendants’ decisions to breach [their contract] without the necessary military permission and to otherwise disobey military directives.  Assuming the truth of these allegations, refusing such victims compensation and allowing Defendants’ alleged unauthorized conduct to go unredressed would be contrary to the most fundamental tenets of our legal system.”  In re KBR, INC., Burn Pit Litigation, —F.Supp.2d—, 2010 WL 3543460 (D.Md.)

The Court denied Defendants’ motions to dismiss and attempted to place restraint on unlimited discovery by requiring the parties to the litigation, and the United States as amicus curiae, to confer and develop a proposed plan for carefully limited discovery consistent with the Court’s decision.

For another case discussing government contractor civil liability for conduct while performing as a contractor in support of military operations, see August 6, 2010 blog post.

Contact government contracts attorney Karen S. Hindson at (843) 720-3722 or (770) 939-3936 to discuss your government contract law issues.

On September 14, 2010, the United States Court of Appeals for the Fifth Circuit issued an important government contracts decision in the Katrina Canal Breaches Litigation class action lawsuit, reversing a District Court decision in favor of a government contractor based on Government Contractor Immunity.

Plaintiffs brought individual and class action lawsuits against Washington Group International, Inc., a contractor for the United States Army Corps of Engineers (USACE), alleging that the contractor’s negligent and improper actions in fulfilling an Army contract caused food damage from Hurricane Katrina in the New Orleans East, the Lower Ninth Ward, and St Bernard Parish.   The contractor provided engineering, construction, and management services to the Corps of Engineers, in this case excavation, backfill, and disposal of subsurface structures in the area of the Inner Harbor Navigation Canal.

The lawsuits were consolidated in the United States District Court for the Eastern District of Louisiana.  The District Court granted summary judgment in favor of the contractor on a “government contractor immunity” (GCI) defense.  After considering the case “de novo” (anew), the Fifth Circuit overruled the District Court and reversed it’s decision. The specifications for the work to be done by the government contractor were not reasonably precise, so the contractor is not entitled to Government Contractor Immunity defense.

The GCI defense preempts state law to immunize government contractors from liability.  In 1988, the Supreme Court in Boyle v. United Technologies Corp, 487 U.S. 500, 108 S.Ct. 2510, established the federal Government Contractor Immunity (CGI) defense to state tort law claims, using a three-part test:

“Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (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.”  Boyle, 487 U.S. at 512.

In the Katrina litigation case, the Fifth Circuit concluded the first prong of the CGI test was not met because the specifications were not reasonably precise.  The Corps of Engineeers did not select the backfill material utilized by the contractor and did not select the compaction methods used by the contractor.

Contact government contracts attorney Karen S. Hindson for your government contract immunity or other government contract law questions.

The door is open to potential civil liability for government contractors who provide services to the U. S. military in war zones.

For another case on contractor tort liability for actions in a war zone, see Karen S. Hindson PC August 6, 2010 blogpost.

Contact Hindson & Melton LLC, government contracts attorneys, for your contract law questions or case evaluation.

The Davis-Bacon Act requires government contractors to pay “prevailing wages” set by Secretary of Labor for government construction projects. Circle C had an Army contract for construction of buildings at Fort Campbell in Clarkesville, Tennessee. A subcontractor performed 98 percent of the electrical work, in excess of $500,000, without a written subcontract.

Contractors are required to make sure their subcontractors comply with the Davis-Bacon Act and pay appropriate DBA wages. One of the subcontractor’s employees, Wall, brought this False Claims Act (FCA) case on behalf of the United States against the general contractor Circle C.

The Court found that the contractor failed to ensure that its electrical subcontractor complied with the DBA, and as a result that Circle C’s DBA certifications to the Army were false. DBA requires contractors and subcontractors to submit weekly payroll certifications of wages paid to each employee that week. Regulations implementing DBA make the prime contractor responsible for submission of payrolls by all subcontractors. The prime contractor is responsible to ensure compliance with the Davis-Bacon Act.

Prime contractor Circle C was found liable for FCA treble damages to the United States for making a false statement to the government that was material to the government’s payment decision. Under the current version of the FCA, specific intent to defraud is not required to impose liability. Liability is calculated at three times the difference between what the Government actually paid and what it would have paid had the Government known the true facts.

Contact government contract attorney Karen S. Hindson of  Hindson & Melton LLC, a Charleston and Atlanta government contract law firm, for your government contract law questions.

In this case, Iraqi citizens who were detained in military prisons sued a translator employed by a government contractor, and also sued the government contractor, claiming that they were tortured. The case is currently pending.

There were twenty counts in the complaint, including torture, war crimes, conspiracy, assault, and negligent hiring counts. The claims were brought under the Alien Tort Statute, Iraqi state law claims, and negligence tort theories. The defendants (the translator and the government contractor providing civilian translation services to the military) sought to have the case dismissed, using a variety of legal theories.

Defendants claimed immunity under the laws of war, and claimed that the “political question doctrine” bars the suit (official policies and directives established by the executive branch are generally non-reviewable by the judiciary). They also claimed derivative sovereign immunity as a government contractor. They claimed that the Alien Tort Statute doesn’t apply since they did not violate the law of nations. They argued that the Iraqi state law claims fail because the law of Iraq applies giving them immunity.

This opinion examines each of the defenses raised by defendants in their motion to dismiss the case, and rejects them one by one. This developing body of law should be of great interest to government contractors and their employees who provide contract services in a war zone.

For your government contract law questions, contact attorney Karen S. Hindson.

The government contractor with a United States Agency for International Development (USAID) contract rebuilding Iraqi infrastructure was a private rather than official actor and thus did not act under color of law to give rise to liability on claims alleging war crimes under the Alien Tort Statute. The purpose for which RTI contracted with USAID did not give rise to Plaintiff’s injuries.

Federal District Court has subject matter jurisdiction under the Alien Tort Statute when (1) an alien sues (2) for a tort (3) committed in violation of the law of nations or a treaty ratified by the United States. 28 U.S.C.A. Section 1350. But a corporation’s potential liability is limited only to state actors, and in very narrow circumstances. (Generally only states, and not corporations or individuals, are liable for international law violations.)

The Torture Victim Protection Act provides a cause of action for United States residents to sue foreign states for torture. It cannot be used to sue federal government officers or private United States persons or corporations.

For assistance with your government contract legal issues, contact government contracts attorney Karen S. Hindson.