Jump to Navigation
Jump to Content

U.S. Fidelity & Guar. Co. v. United States

Citation: 17 ELR 20261
No. No. 84-1255, 638 F. Supp. 1068/24 ERC 1612/(M.D. Pa., 07/03/1986) Ruling on liability

The court holds that the Environmental Protection Agency (EPA) and its contractor are liable for the property damage caused by the accidental release of an acid cloud from an oleum tank during a removal action under the Comprehensive Environmental Response, Compensation, and Liability Act based on their negligent failure to account for wind conditions. The court initially reaffirms its earlier decision in the case holding that EPA's selection of the method to remove the oleum from the tank was not a discretionary function exempt from liability under the Federal Tort Claims Act. The court then holds that it lacks jurisdiction over personal injury claims filed on behalf of five Pennsylvania Department of Transportation employees injured by an earlier release from the same tank because plaintiff insurance company failed to file a sufficient administrative claim with EPA.

The court next holds that both EPA and the contractor it hired to perform the cleanup operations at the site are liable for the property damage caused by the second acid cloud release. The court holds that EPA was not negligent in failing to accept the contractor's recommendation to remove the tank from its pedestals before starting the neutralization process. The decision by EPA's On Scene Coordinator not to attempt to move the tank before neutralizing it was reasonable based on the information available when the choice was made. The On Scene Coordinator reasonably based his decision on the contractor's estimate that there were 110 gallons of oleum in the tank, although it was later determined that tank held 2,000 gallons, on the chance that the tank would rupture during transport and on the unsuitability of other on-site locations. Even if EPA's decision not to move the tank was negligent, EPA would not be liable because plaintiff has failed to establish that there was a substantial possibility that there would have been no release had the tank been taken off its pedestals. The court holds that EPA was also not negligent in continuing to neutralize the oleum by adding water to the tank after the first acid cloud release.

The court holds, however, that EPA was negligent by allowing the neutralization to continue without regard for wind conditions. The court holds that entities responsible for cleaning up hazardous substances that are capable of releasing hazardous chemicals into the air assume a duty to monitor wind direction and perform cleanup operations when wind is blowing away from heavily populated areas. The court holds that EPA breached this duty by permitting neutralization to proceed without regard to wind conditions. In view of EPA's supervisory control over the safety procedures selected by its contractor and the agency's knowledge of a hydrogeologist's report recommending that the more hazardous operations at the site be performed when the wind is blowing towards sparsely populated areas, EPA should have instructed its contractor to perform hazardous operations only on days with favorable wind conditions and checked to see that the contractor followed these instructions. The court holds that the contractor also breached its duty of care by failing to consider the wind conditions. Under its contract with EPA, the contractor was responsible for cleaning the oleum tank. The court holds that consideration of wind conditions was a necessary aspect of cleaning the tank. Although the contractor did not have the power to make the final decision on the cleanup method, it had a duty to safely perform the operation it undertook.

The court rejects plaintiff's argument that EPA is liable for the actions of its contractor under provisions of the Restatement (Second) of Torts that provide that employers are liable for the negligence of independent contractors regardless of the fault of the employer. This doctrine, whether labelled strict or vicarious liability, is not a basis for recovery against the United States under the Federal Tort Claims Act. The court concludes that 60 percent of the causal negligence is attributable to EPA, which retained the ultimate power to make final decisions on the cleanup operations, and 40 percent is attributable to the contractor. Finally, the court holds that contractor's insurer is entitled to contribution from the United States for 60 percent of all damages it paid to those whose property was damaged by the acid cloud. The court rejects the United States' argument that contribution is not available because EPA is only secondarily liable, since EPA had an affirmative duty to ensure that the contractor followed all necessary safety precautions.

[The court's decision holding that the discretionary function exemption of the Federal Tort Claims Act does not apply to EPA's cleanup method selection is published at 17 ELR 20259.]

Counsel are listed at 17 ELR 20259.