Government Contractor Immunity – Katrina Litigation

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.