5th Circuit Reverses Finding That Contractor Had Government Immunity In Katrina Flood Case

5th Circuit Reverses Finding That Contractor Had Government Immunity In Katrina Flood Case

NEW ORLEANS - (Mealey's) The U.S. Army Corps of Engineers did not "make" a contractor use the exact backfill material that was used for the Inner Harbor Navigation Canal Lock Replacement Project in New Orleans, nor did it "require" the contractor to select the compaction method that was employed in the project, the Fifth Circuit U.S. Court of Appeals held Sept. 14, reversing and remanding a lower court's finding that the contractor is entitled to government-contractor immunity in a case stemming from Hurricane Katrina flood damages (In Re:  Katrina Canal Breaches Litigation, Nos. 09-30449, 09-30428, 09-30438, 5th Cir.).

The U.S. Army Corps of Engineers contracted with Washington Group International Inc. (WGI) for work on the Inner Harbor Navigation Canal Lock Replacement Project in New Orleans.  After Hurricane Katrina struck in August 2005, the flood protection system in the Inner Harbor Navigation Canal project failed.  In 2007, several lawsuits were filed against WGI, the Corps and other defendants for harm, alleging that "the method of excavation and backfilling employed by WGI allowed for underseepage, which undermined the integrity of the levees, resulting in their failure and the subsequent flooding of New Orleans East, the Lower Ninth Ward, and St. Bernard Parish."

WGI moved for summary judgment in the U.S. District Court for the Eastern District of Louisiana.  The District Court found in favor of WGI, finding that it was protected by government-contractor immunity.  The plaintiffs appealed to the Fifth Circuit.

The panel applied the three-step test in Boyle v. United Technologies Corp. (487 U.S. 500 [1988]) (lexis.com/lexisONE Free Case Law)to determine the application and scope of government contractor immunity, noting that the "specific features at issue are the backfill material used and the method of compaction employed by WGI."

"The Corps, driven by cost concerns, approved specifications that mandated on-site material as the primary source of the backfill material.  The Corps also specified that if there was insufficient on-site material, WGI should import offsite backfill material to complete the project," the panel said.

The panel concluded that two factors render the above specifications imprecise.

"First, the specifications that authorized the use of on-site backfill material were not reasonably precise in regard to how WGI should parse through all the on-site material to determine which was suitable.  . . .  The second reason that the specifications are imprecise concerns the offsite material imported by WGI and used as backfill material.  The Corps provided no reasonably precise specifications regarding the composition of that off-site backfill material.  The Corps was not even fully aware of the contents of the backfill material used to fill the holes it had created," the panel said.

The panel noted that although any off-site backfill material imported by WGI was required to receive some sort of approval from the Corps before it could be used, there is no evidence demonstrating that the Corps imposed additional requirements concerning the composition of the off-site material, nor is there any evidence showing that the Corps applied any testing process to evaluate the material before approval. The panel added that the record lacks information proving that "the Corps provided specifications for when a certain piece of equipment should be used for a particular type of hole."

The panel concluded that WGI fails to satisfy the first prong of the Boyle test, reversing and remanding the District Court's finding in favor of WGI.

Judge Jerry E. Smith wrote the opinion, which was joined by Judges Jacques L. Wiener Jr. and Jennifer Walker Elrod.

[Editor's Note:  Full coverage will be in the Oct. 14 issue of Mealey's Litigation Report: Catastrophic Loss.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #51-101014-002Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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