It is time once again to tune in to the latest episode -- oops, I mean development -- in the long running farce -- oops, I mean legal case -- involving KBR and Oregon National Guard soldiers.
Yeterday there was significant pro-veteran ruling in the Oregon KBR Qarmat Ali litigation.
In a 29-page ruling, the federal district court in Oregon considered the motion by KBR and co-defendants Overseas Administration Services, Ltd. and Service Employees International, Inc. to dismiss the suit for lack of subject-matter jurisdiction and rejected it.
U.S. Magistrate Judge Paul Papak wrote that on March 3, 2003 -- before combat operations began in Iraq -- the U.S. Army Corps of Engineers entered into a "Restore Iraqi Oil" (RIO) contract) with KBR. Under it, KBR and its subsidiaries agreed to provide services to the U.S. military in connection with efforts to restore the infrastructure underlying the Iraqi oil industry. Also under the RIO contract, the U.S. Army Corps of Engineers issued various "task orders" for KBR to perform. Combat operations in Iraq began on March 19, 2003. On March 20, 2003, the Corps of Engineers issued "Task Order 3," which governed the services to be provided by KBR and its subsidiaries at Qarmat Ali and other facilities. Under Task Order 3, the U.S. military would declare a given worksite to be "benign" before KBR would begin operations there.
A lot depends on what you mean by "benign." In a footnote the judge wrote:
The parties dispute the meaning of the term "benign" for purposes of Task Order 3. According to the deposition testimony of Robert Crear (retired Brigadier General of the U.S. Army Corps of Engineers) and of Gordon Sumner (retired U.S. Army Corps of Engineers Contracting Officer and regional director of contracting), "benign" referred to freedom from combatant activity and from nuclear or chemical weapons, and did not foreclose the possibility of environmental hazards, including hazardous (but not weaponized) chemicals. Support for this interpretation can be found in the provisions of Task Order 3, which suggest that pronouncement of a site as "benign" did not, for example, foreclose the need for environmental assessment. Nevertheless, defendants take the position that a "benign" designation necessarily meant freedom from known hazards, including environmental hazards, and support for defendants' position may also be found in the language of Task Order 3, which indicates that a facility must be cleared of environmental and industrial hazards before it may be pronounced "benign." Because I do not find this issue to be material to the analyses I am called upon to undertake in connection with the political question doctrine, the government contractor defense, or the combatant activities exception, the parties' dispute over the definition of "benign" need not be resolved at this stage of these proceedings.
In the underlying facts portion of his ruling the judge wrote:
Task Order 3 provides that KBR was responsible for providing the Corps of Engineers with an environmental assessment of any facility in which it undertook operations. The obligation to provide such assessments included the obligation to report and evaluate any environmental hazards. According to Sumner's and Gen. Crear's deposition testimony, KBR was not merely permitted but required under Task Order 3 and the RIO contract to take all necessary precautions to safeguard personnel who might potentially be exposed to environmental hazards at worksites, including the wearing of protective gear and/or the closing down of operations at any unsafe site.
In his analysis the judge noted that the defendants argue that this court lacks subject-matter jurisdiction by operation of the political question doctrine, by operation of the so-called "government contractor defense," and by operation of the combat activities exception to the Federal Tort Claims Act. For background on this see my January post.
The judge proceeded to detail other cases where district courts have found the political question doctrine inapplicable to tort actions brought against government contractors in the military context.
In regard to KBR's claims that various legal tests argue in favor of applying the political question doctrine he wrote that he found their arguments unpersuasive. He wrote, "the matter fundamentally at issue here is defendants' performance of its contractual obligations to the government and to the plaintiffs rather than the advisability of any governmental policy-related decision."
But the guts of the decision, which is undoubtedly giving nightmares to al all PMC legal counsels, is this:
Defendants here assert that their "provision of engineering and logistical support services at Qarmat Ali" took place pursuant to the specifications of a contract with the government, and that they did not exceed their authority under those specifications. On this basis, defendants argue that they were merely "executing the will of the United States" and are entitled to the benefits of derivative sovereign immunity. The evidentiary record belies both of defendants' assertions.
The rationale underlying the government contractor defense is easy to understand. Where the government hires a contractor to perform a given task, and specifies the manner in which the task is to be performed, and the contractor is later haled into court to answer for a harm that was caused by the contractor's compliance with the government's specifications, the contractor is entitled to the same immunity the government would enjoy, because the contractor is, under those circumstances, effectively acting as an organ of government, without independent discretion. Where, however, the contractor is hired to perform the same task, but is allowed to exercise, discretion in determining how the task should be accomplished, if the manner of performing the task ultimately causes actionable harm to a third party the contractor is not entitled to derivative sovereign immunity, because the harm can be traced, not to the government's actions or decisions, but to the contractor's independent decision to perform the task in an unsafe manner. Similarly, where the contractor is hired to perform the task according to precise specifications but fails to comply with those specifications, and the contractor's deviation from the government specifications actionably harms a third party, the contractor is not entitled to immunity because, again, the harm was not caused by the government's insistence on a specified manner of performance but rather by the contractor's failure to act in accordance with the government's directives.
Assuming without deciding that the Ninth Circuit would apply the government contractor defense to the provision of the kinds of services KBR contracted to provide in Iraq under RIO and Task Order 3 [...] - analysis of the RIO contract and of Task Order 3 fails to establish that the defendants' actions alleged to have caused plaintiffs' injuries were taken in direct compliance with any "reasonably precise" government directive. Quite to the contrary, defendants were contractually obliged to perform an environmental assessment of Qarmat Ali and to report any environmental hazards to the Army Corps of Engineers. Defendants were under no contractual obligation to put their employees or third parties providing security in connection with defendants' operations into situations involving the risk of environmental harm, to refrain from requiring employees or third parties to use appropriate protective gear and clothing when placed into such situations, or to withhold material information regarding such risk from persons placed into such situations.
Moreover, assuming arguendo that the government's specifications regarding defendants' obligations in connection with operations to be performed in an environmentally contaminated worksite were sufficiently precise to trigger the defense, plaintiffs have offered evidence tending to establish that the defendants violated those contractual duties, by failing to report the contamination at Qarmat Ali and by permitting the Oregon National Guard to perform duties at the site without appropriate protective gear.
Because defendants did not conduct operations at Qarmat Ali in accordance with precise government specifications and without independent discretion as to the manner in which the operations were to be performed, defendants are not entitled to the government contractor defense. See Hanford Nuclear, 534 F.3d at 1000. Defendants' motion to dismiss is therefore denied to the extent premised on the government contractor defense.
In other words, the "we were just following orders" defense is looking even lamer than ever.
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