Mark McManaway v. KBR, Incorporated , 554 F. App'x 347 ( 2014 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 28, 2014
No. 12-20763
Lyle W. Cayce
Clerk
SERGEANT MARK MCMANAWAY; DAVID RANCOURT; BRENT
LASHER; JODY AISTROP; WILLIAM BICKELL; ET AL.,
Plaintiffs - Appellees
v.
KBR, INC.; KELLOGG, BROWN & ROOT SERVICES, INC; KBR
TECHNICAL SERVICES, INC.; OVERSEAS ADMINISTRATION
SERVICES, INC.; SERVICE EMPLOYEES INTERNATIONAL, INC.,
Defendants - Appellants
Appeal from the United States District Court for the
Southern District of Texas, Houston
ON PETITION FOR REHEARING EN BANC
Before STEWART, Chief Judge, KING, and PRADO, Circuit Judges.
ORDER:
Treating the petition for rehearing en banc as a petition for panel
rehearing, the petition for panel rehearing is DENIED. The court having been
polled at the request of one of its members, and a majority of the judges who
are in regular active service and not disqualified not having voted in favor (FED
R. APP. P. and 5TH CIR. R. 35), the petition for rehearing en banc is DENIED.
In the en banc poll, five judges voted in favor of rehearing (Judges Jolly,
Jones, Smith, Clement, and Owen), and nine judges voted against rehearing
No. 12-20763
(Chief Judge Stewart and Judges Davis, Dennis, Prado, Elrod, Southwick,
Haynes, Graves, and Higginson).
ENTERED FOR THE COURT:
___________________________________
UNITED STATES CIRCUIT JUDGE
2
No. 12-20763
JONES, Circuit Judge, dissenting from Denial of Rehearing En Banc, joined
by SMITH, CLEMENT, and OWEN, Circuit Judges
The court has declined to reconsider en banc the panel’s order dismissing
this interlocutory appeal as improvidently granted. The appeal raised two
questions: whether the case against KBR, a contractor literally on the
battlefield in Iraq when these soldier plaintiffs were injured, involves
nonjusticiable political questions; and whether KBR inherits FTCA-based
preemption of claims “arising out of the combatant activities” of the military
during wartime. 28 U.S.C. § 2680(j). The panel’s dismissal order stands
federal procedure on its head by implying that this case must nearly be tried
before we can assess federal court jurisdiction and competence to hear it.
Because both of these issues should have been resolved favorably to KBR, and
that further trial proceedings impose on KBR and the U.S. military beyond the
scope of federal court power, I respectfully dissent.
This tort suit was two weeks away from trial, after voluminous
documentary and deposition discovery from the contractor and the United
States military, when the district court denied these threshold defenses to
KBR. A motions panel of this court accepted the trial court’s 28 U.S.C.
§ 1292(b) certification of the issues. Full briefing and oral argument ensued--
for naught. The panel held that it could not decide justiciability under the
political question doctrine without a trial court ruling on the law applicable to
the tort suits (of plaintiffs from three states and Great Britain against KBR, a
Texas-based defendant), and the panel would not rule on the combatant
activities exception before justiciability. In a footnote, and somewhat at odds
with the concern that choice of law had not been ruled on, the panel signaled
3
No. 12-20763
that the district court should have also certified for interlocutory appeal its
refusal to designate the United States as a “responsible third party” (“RTP”)
under the Texas law of comparative negligence. 1 Whether the trial court will
comply with the panel’s order by (a) ruling on choice of law as to all these
parties, (b) expanding or revising the treatment of the United States for
comparative negligence assessment, and (c) certifying, or recertifying, the RTP
issue, justiciability and the combatant activities exception is, at this late stage,
guesswork. To any reasonable observer, however, an incredible amount of
private, military and judicial resources will have been expended solely to
determine if the suit can be heard in federal court.
The panel’s order is inconsistent with our precedent and further
exacerbates circuit conflicts on the cognizability of suits against contractors-
on-the-battlefield.
1. Background
The plaintiffs are soldiers from National Guard units and the British
Royal Air Force who were tasked to provide security and transportation
relating to the restoration of the Qarmat Ali water treatment plant in southern
Iraq following the allies’ military occupation in 2003. KBR was awarded the
restoration contract as part of the United States’ plan to recommence Iraqi oil
field production (Project Restore Iraqi Oil--"RIO"). During the project,
insurgents targeted Qarmat Ali with looting, shooting and vandalism. The
plaintiffs engaged the enemy as work proceeded. The plaintiffs assert that
they were injuriously exposed to sodium dichromate, an irritant and
carcinogen, while performing their duties and that KBR recognized and
1 Had the government been so designated, see TEX. CIV. PRAC. & REM. CODE § 33.004,
the jury would have had to formally assess a percentage of liability against the government
despite its sovereign immunity from suit.
4
No. 12-20763
disregarded the danger of sodium dichromate contamination at Qarmat Ali.
Their sole remaining cause of action is for negligence against KBR and its
related companies.
KBR did not act in a vacuum. The district court acknowledged, even as
it ruled against KBR’s threshold arguments, that United States military
decisions were deeply implicated in the plaintiffs’ chemical exposure:
The record here shows that the U.S. military was involved in the
sodium dichromate exposure that allegedly caused Plaintiffs’
injuries. As discussed above, the military contracted with KBR to
restore Quarmat [sic] Ali and was responsible for assessing sodium
dichromate hazards at Quarmat [sic] Ali prior to KBR’s arrival. In
addition, even after KBR was on site, the military was involved in
detecting and responding to the presence of sodium dichromate at
Quarmat [sic] Ali.
McManaway v. KBR, Inc., 906 F. Supp. 2d 654, 664 (S.D. Tex. 2012), appeal
dismissed, No. 12-20763 (5th Cir. Nov. 7, 2013).
To fend off liability, KBR unsurprisingly intends to show that military
wartime decisions were the proximate cause of the plaintiffs’ chemical
exposure including, inter alia, the decisions to (1) forgo an environmental
assessment before restoration work commenced at Qarmat Ali; (2) require
troops to secure the facility without fully assessing whether the site was free
of environmental hazards; and (3) continue restoration work after the military
became aware of potential contamination from this and other sources (e.g.,
chlorine). The record is replete with evidence supporting these propositions.
This was the essential posture of the case when the panel refused to rule
on the application of the political question doctrine and the combatant
activities exception to the FTCA.
5
No. 12-20763
2. This Court’s Precedent
In refusing to decide whether either the political question doctrine or the
combatant activities exception bars federal adjudication of the plaintiffs’
claims, the panel opinion creates tension with several of our precedents. First,
it fails to heed the advice this court gave district courts confronted with various
threshold defenses asserted in tort-on-the-battlefield cases: “Because the basis
for many of these defenses is a respect for the interests of the Government in
military matters, district courts should take care to develop and resolve such
defenses at an early stage while avoiding, to the extent possible, any
interference with military prerogatives.” Martin v. Halliburton, 618 F.3d 476,
488 (5th Cir. 2010). Among numerous reasons courts should be reticent to
submit military decisions to judicial review, the Government’s interests in
military matters reasonably include limiting its own expenditure of scarce
resources on the un-military task of participating in lawsuits as well as
reducing contractors’ liability exposure for the sake of future procurement
efforts. The panel’s unenlightening explanation for remand, however, ensures
there will be no early stage resolution of this case. The existence of a record
ready for trial demanded and facilitated a final decision in this court.
Second, the panel decision unreasonably interprets Lane v. Halliburton,
529 F.3d 548 (5th Cir. 2008), which recognized that a battlefield tort case is
nonjusticiable under the political question doctrine where analysis of the
Executive’s war-time decision-making is compelled. Id. at 557-59. Federal
courts are neither competent nor, under separation of powers principles,
legally entitled to address such issues. Lane characterized causation as “the
most critical element” of plaintiffs’ tort claims “for political question analysis.”
Id. at 565. In Lane, the defendants intended to show that the plaintiffs’
injuries were not caused by their negligence but by insurgents who attacked a
6
No. 12-20763
military convoy for which the United States Army provided inadequate
security. To the extent the plaintiffs claimed negligence, Lane stated, their
allegations “move precariously close to implicating the political question
doctrine.” Id. at 567.
The panel opinion overlooks Lane’s caution that cases involving
competing claims of negligence by the United States military and a contractor
are barred from federal court adjudication. Moreover, Lane does not hold that
courts must make a choice of law determination in order to analyze a plaintiff’s
claim “as it would be tried.” 2 Indeed, in that case, the district court had made
no choice of law determination, and this court simply assumed the application
of Texas law. Here, however, instead of focusing on how the plaintiffs’
causation case would play out against the background of military orders
implementing Project RIO at Qarmat Ali, the panel mentioned only the
narrow question of choice of law. The panel opinion in this way further
complicates Lane's discussion of the political question doctrine, as there is
often room for debate over the choice of law applicable to battlefield torts. But
rather perversely, this panel does not even forthrightly hold that choice of law
2 To determine whether the case was justiciable, Lane applied the framework set forth
in Baker v. Carr, 369 U.S. 186 (1962), where the Supreme Court identified the following six
factors as helpful to the political question inquiry:
(1) “a textually demonstrable constitutional commitment of the issue to a
coordinate political department;” (2) “a lack of judicially discoverable and
manageable standards for resolving it;” (3) “the impossibility of deciding
without an initial policy determination of a kind clearly for nonjudicial
discretion;” (4) “the impossibility of a court's undertaking independent
resolution without expressing lack of the respect due coordinate branches of
government;” (5) “an unusual need for unquestioning adherence to a political
decision already made;” (6) “or the potentiality of embarrassment from
multifarious pronouncements by various departments on one question.”
Lane, 529 F.3d at 558 (citing Baker, 369 U.S. at 217).
7
No. 12-20763
is determinative. Thus, not only does the panel opinion misinterpret Lane, but
if the panel intended to adopt choice of law as a requisite for political question
analysis in tort-on-the-battlefield cases, its opinion should have been filed as a
precedential “published” opinion. 3
Third, in holding that it is “imprudent” to discuss the combatant
activities exception to the FTCA while the “jurisdictional” defense of the
political question doctrine remains pending, the court ignored two of our
precedents. In one of these, the court decided both the political question
doctrine and the act of state defense. Spectrum Stores, Inc. v. Citgo Petroleum
Corp., 632 F.3d 938, 954 (5th Cir. 2011). 4 Moreover, in Fisher v. Halliburton,
667 F.3d 602, 609 (5th Cir. 2012), this court upheld summary judgment based
on the battlefield contractor’s defense of statutory pre-emption while
pretermitting a ruling on the political question doctrine. According to the
cases, that either or both of these threshold defenses may be decided by the
appellate court rests within its discretion. Deference to the policies behind
these defenses, as recognized by our precedents, should have compelled the
panel to rule.
3. Sister Circuit Conflicts
a. Political Question
While aspiring to decide nothing, the “unpublished” per curiam panel
order here in fact decided that further litigation is required to decide if the
plaintiffs’ case, now ready for trial, can be adjudicated in federal court. As
Lane observed, strategic decisions of the Executive Branch during wartime are
3 Unpublished Fifth Circuit opinions issued on or after January 1, 1996, are not
precedential. 5TH CIR. R. 47.5.4.
4 See also Harris v. Kellogg, Brown & Root Servs., Inc., 724 F.3d 458, 478 (3rd Cir.
2013) (discussing both political question doctrine and combatant activities exception).
8
No. 12-20763
an arena “in which the political question doctrine has served one of its most
important and traditional functions.” Lane, 529 F.3d at 558. Efficiently
untangling Executive Branch decisions from review in court cases should be a
high judicial priority. Until less than a year ago, other circuit courts had
readily applied the political question doctrine to contractor-on-the-battlefield
tort cases without express focus on choice of law issues. See, e.g., Carmichael
v. KBR, 572 F.3d 1271, 1288 n.13 (11th Cir. 2009) (providing that the court’s
analysis “would remain the same regardless of which state’s law applied”); see
also Taylor v. KBR, 658 F.3d 402 (4th Cir. 2011) (dismissing on political
question grounds without discussing choice of law); Lane v. Halliburton, supra.
The evidence of sensitive military decisions persuaded these courts that such
cases are not “typical negligence action[s]” where the fact-finder can “draw
upon common sense and everyday experience” in determining whether a
military contractor acted reasonably. Carmichael, 572 F.3d at 1289. But cf.
McMahon v. Presidential Airways, Inc., 502 F.3d 1331, 1359-62 (11th Cir.
2007) (holding that private contractor failed to demonstrate that claims
against it required re-examination of a military decision).
Differences among the tort regimes of the United States should not affect
political question analysis, which serves unique federal and constitutional
concerns. A negligence claim in any jurisdiction requires proof of the same
elements: duty, breach, causation and damages. Since causation is always a
necessary element, no particular tort regime can make the problem go away.
No matter the choice of law, the contractor defendant could present the same
evidence that the United States’ military was responsible for plaintiffs’
injuries. As exemplified here, the questions whether KBR can include the U.S.
as a responsible third-party under Texas law, or whether a sole proximate
cause finding embraces merely sole cause, are beside the point. What matters
9
No. 12-20763
for political question purposes is whether the litigation will bring a non-
justiciable political question before the court, requiring hindsight review of the
wisdom of military decisions. In most contractor-on-the-battlefield cases in
which some responsibility rests on military decisions, this will invariably be
true; nothing is to be gained by scrutinizing the details of how the jury will
assign responsibility to the military.
Despite this reasoning, the Third Circuit recently took the opposite view
in a decision cited by the panel opinion. Harris v. KBR, 724 F.3d 458 (3d Cir.
2013), petition for cert. filed, No. 13-817 (U.S. Jan. 8, 2014). Harris holds that
a choice of state law is necessary to assess whether claims or defenses in such
litigation introduce a nonjusticiable political question. That Harris is
impractical, unfair and inconsistent with the underlying rationale of the
political question doctrine emerged clearly in a Fourth Circuit decision that
adopted Harris. In re KBR, Inc., Burn Pit Litig., 744 F.3d 326 (4th Cir. 2014),
petition for cert. filed, No. ___ (U.S. Apr. 11, 2014). In Burn Pit, the court held
that the trial court erroneously dismissed consolidated tort cases because
KBR’s causation defense did not implicate the political question doctrine
unless (1) the military caused the service members’ injuries, at least in part,
and (2) the plaintiffs invoked a proportional liability legal system that allocates
fault among defendants. The effect of this ruling is that a trial court presiding
over suits filed in 42 states (and consolidated by the Judicial Panel on
Multidistrict Litigation) may have to conduct a virtual nationwide analysis of
tort law before determining which plaintiffs' claims are justiciable. As a result,
some claims may be justiciable, while others are not, depending solely on
differing states’ laws.
Even if the Supreme Court were to decide that, indeed, courts must first
ascertain the choice of state law to complete the political question analysis, at
10
No. 12-20763
least there would be a uniform decision-making apparatus and a way to hasten
resolution of these cases. Now, among the circuit courts, there is no uniformity.
b. Combatant Activities Exception
This FTCA exception withdraws the waiver of sovereign immunity and
preempts claims, including state law claims, “arising out of the combatant
activities” of the military during wartime. 28 U.S.C. § 2680(j). The exception
may apply to foreclose by means of preemption, though not sovereign
immunity, suits against defense contractors. Saleh v. Titan Corp., 580 F.3d 1,
9 (D.C. Cir. 2009) (applying Supreme Court’s preemption analysis in Boyle v.
United Technologies, 487 U.S. 500 (1988)).
Textually, this exception is broad. The phrase “arising out of” is well
understood legally to be “among the broadest in law.” Al Shimari v. CACI
International, Inc., 679 F.3d 205, 236 (4th Cir. 2012) (Wilkinson, J.,
dissenting). The Supreme Court has contrasted this broad brush exception
with other more closely tailored FTCA exceptions “that bar suits arising out of
a subset of harms associated with a particular area.” Id. (citing Dolan v. U.S.
Postal Serv., 546 U.S. 481, 489-90 (2006)). In a seminal case, the Ninth Circuit
defined “combatant activities” to exclude recovery for “not only physical
violence, but activities necessary to and in direct connection with actual
hostilities.” Johnson v. United States, 170 F.2d 767, 770 (9th Cir. 1948). More
recently, that court recognized that “the purpose of the exception . . . is to
ensure that the government will not be liable for negligent conduct by our
armed forces in times of combat.” Koohi v. United States, 976 F.2d 1328, 1334
(9th Cir. 1992). This court followed Johnson’s definition of combatant
activities in dismissing a lawsuit filed by a civilian contractor working in Saudi
Arabia during the Persian Gulf War although the contractor was employed
11
No. 12-20763
outside the war zone. Arnold v. United States, 140 F.3d 1037 (5th Cir. 1998)
(per curiam) (unpublished).
In recent years, circuit courts have divided over the scope of the
exception as applied to civilian contractors. The D.C. Circuit proclaimed that
the exception commands “the elimination of tort from the battlefield,” and
consequently devised a test that inquires whether a contractor’s services are
“integrated” with combatant activities and the extent to which the military
retained command authority, e.g., under its contracts with the civilian
contractor. Saleh, supra at 9. The Ninth Circuit appears to limit the exception
to foreclose any “duty of reasonable care . . . to those against whom force is
directed.” Koohi, supra at 1337. The Third Circuit adopted the Saleh test but
denied preemption to a military contractor for a soldier’s electrocution in a
barracks the contractor built in Iraq. Harris, supra at 480-82. These
inconsistencies are troubling in their own right, as they complicate the
litigation of military contractor suits in all jurisdictions, like the Fifth Circuit,
that have either not weighed in on the exception’s scope or for inscrutable
reasons, have chosen not to do so.
More generally, it makes no sense to render formulations of the exception
that preserve civilian contractor tort liability in ways that would be
inconceivable had the same battlefield-related activities been conducted by the
military itself. As Judge Wilkinson noted, “[i]t is not our role to dismember
this exception’s text in order to determine when and to what extent torts can
arise from combatant activities after all.” Al Shimari, supra at 236-37.
Further, “[i]t makes even less sense than in Boyle to shield the military from
litigation for the battlefield activities of soldiers but not contractors.” Id.
Where, in Boyle, the Supreme Court was willing to exempt military contractors
from liability under the contours of the discretionary function exception to the
12
No. 12-20763
FTCA, how much more should it acknowledge the shield Congress created in
the combatant activities exception, especially given the explosion in the
military’s use of contractors to wage war. Judges Wilkinson and Niemeyer
have discussed at length the constitutionally suspect, intrusive, and ultimately
destructive consequences of imposing hindsight judicial oversight of military
actions by means of tort law, even if the liability superficially falls on civilian
contractors. Al Shimari, supra at 225-48 (Wilkinson, J., dissenting) and 258-
64 (Niemeyer, J., dissenting).
Because hundreds, perhaps thousands, of lawsuits have been filed in the
wake of the wars in Iraq and Afghanistan and are wending a tortuous way
through courts all over the country, the scope of this exemption must be
determined by the Supreme Court. At the very least, courts must be required
to rule on this exception at the earliest possible stage of litigation. Because the
point of the combatant activities exception is to free military actors engaged in
such activities from “the doubts and uncertainty inherent in potential
subjection to civil suit,” Saleh, supra at 7, forcing them to participate, as in this
case, in lengthy discovery, depositions, and interpretation of the contractual
clauses seriously undermines the law.
But irrespective of the refined disagreements among the circuits, this
case is a paradigm for application of the combatant activities exception. The
trial court’s ruling that Project RIO’s goal of restoring the Qarmat Ali facility
“was a foreign-policy-related goal rather than a combatant activity,”
McManaway, 906 F. Supp. 2d at 666 (quoting with approval Bixby v. KBR, Inc.,
748 F. Supp. 2d 1224, 1246 (D.Or. 2010)), reveals deep, but not unusual,
confusion about the exception’s scope. This Army-led initiative sought to quell
the growth of an insurgency and enable Iraq’s economy to recover (and repay
American costs) just after the 2003 invasion. The plaintiffs, all soldiers, were
13
No. 12-20763
deployed to Qarmat Ali to provide security. According to the RIO mission
commander, Qarmat Ali “suffered significant damage from looting and
sabotage,” and on numerous occasions, work had to be shut down entirely at
the site due to security concerns. Any injuries plaintiffs suffered were
“necessary to and in direct connection with actual hostilities” in Iraq. Johnson,
supra, at 770. From the contractor’s standpoint, its mission was fully
intertwined with that of the military, as the facility’s restoration depended on
coordination and collaboration between the Army Corps of Engineers and KBR.
Especially for the remediation of environmental hazards, the tasks were joint,
as the previously quoted portion of the district court's opinion plainly states.
It is difficult to conceive how KBR’s alleged negligence can be isolated and tried
apart from an understanding of the “hot” zone in which KBR and the soldiers
were operating.
Even a pinched reading of the combatant activities exception should
shield KBR and, indirectly, the United States from jurors’ state law-based
second-guessing. The United States ultimately pays the judgment, if not by
indemnifying KBR, then by having to pay ever-higher costs for private
contractors who must be hired to fill vital gaps in military actions. The toll in
a case like this, moreover, is not simply monetary, but ultimately strategic.
How, in the future, must the military reckon the value of strategic operations
like restoring a degraded water treatment plant, securing a chemical weapons
factory, or reopening a hospital in which environmental hazards have
accumulated? Must the costs of potential lawsuits against military contractors
be included? Does there have to be a chain of evidence foreseeing possible
adverse “tortious” events arising from the performance of the mission? Must
paralegals or photographers accompany the mission to document hazards
along the way? Planning and winning military conflicts is hard enough
14
No. 12-20763
without asking the military to bear the cost and associated inflexibilities
imposed by anticipating post hoc lawsuits.
For all these reasons, the court, by condoning indecision here that
amounts to a decision, has abandoned the restraint we ought to exercise when
facing wartime conduct that we are constitutionally and statutorily forbidden
and ill-suited to evaluate. I respectfully dissent from the denial of rehearing
en banc.
15