United States Fidelity and Guaranty Co. v. United States

No. 84-1255 (M.D. Pa. April 16, 1986)

The court holds that the actions of the Environmental Protection Agency (EPA) in selecting and directing the method used by its contractor to neutralize a tank containing oleum sludge during a removal action under the Comprehensive Environmental Response, Compensation, and Liability Act does not fall within the discretionary function exemption of the Federal Tort Claims Act. During the neutralization process, two acid clouds were accidentally released from the tank, causing personal injury and property damage. The court holds that the selection of the neutralization method by EPA's On Scene Coordinator, though it required the Coordinator to make a choice, did not constitute policymaking. The decision was made at an operational level and thus is not shielded from liability by the Federal Tort Claims Act.

[The court's decision holding EPA and its contractor liable for property damages caused by the release is published at 17 ELR 20261.]

Counsel for Plaintiff
Jonathan E. Butterfield
Liebert, Short, Fitzpatrick & Lavin
35 W. Third St., Williamsport PA 17701
(717) 326-9091

Counsel for Defendants
Barbara A. Kosik, Ass't U.S. Attorney
Box 309, Scranton PA 18501
(717) 348-2800

Ray E. Spears
Office of General Counsel
United States Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 475-8040

Phyllis Jackson Pyles
Torts Branch, Civil Division
Department of Justice, Washington DC 20530
(202) 633-2000

[17 ELR 20259]

Muir, J.:

Opinion

On September 20, 1984, the United States Fidelity and Guaranty Company (hereafter "U.S.F. & G.") commenced this action by filing a complaint against the United States of America seeking recovery pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. for losses which occurred during the clean-up of hazardous chemical waste at the site of Drake Chemical, Inc. in Clinton County, Pennsylvania. An amended complaint was filed on February 13, [17 ELR 20260] 1984. On February 28, 1986, the United States filed a motion to dismiss or alternatively for summary judgment, supporting affidavits, and a supporting brief. On March 6, 1986, U.S.F. & G. filed its brief in opposition to the motion. No reply brief has been filed by the United States and this motion became ripe on March 20, 1986 when the opportunity for filing the reply brief expired.

The United States asserts that this case should be dismissed or summary judgment should be granted in its favor because the challenged acts of the Environmental Protection Agency (hereafter "EPA") fall within the "discretionary function" exception to the Federal Tort Claims Act. 28 U.S.C. § 2671 et seq. As a general proposition, the United States enjoys sovereign immunity. The Federal Tort Claims Act provides a limited waiver of sovereign immunity for certain torts. The Act contains certain exceptions including the "discretionary function" exception which reads as follows:

The provisions of this Chapter and Section 1346(b) of this title shall not apply to —

(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. § 2680(a). In order to determine whether or not the discretionary function exception is applicable in this case, we are obliged to consider matters which are outside the complaint. Therefore, the United States' pending motion will be treated as a motion for summary judgment. Fed. R. Civ. P. 12(b)(6).

In considering a motion for summary judgment, this Court must ascertain if there are any genuine issues of material fact and, if none, whether or not the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. All matters must be considered in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654 (1962). For the purposes of this motion, we will assume that all of the allegations of the amended complaint and U.S.F. & G.'s statement of facts contained in its brief in opposition to the motion for summary judgment are true. While there is no need to repeat all of these facts, we set forth certain of them which directly relate to the arguments regarding the discretionary function exception.

The EPA undertook to clean up the Drake Chemical Company site in Clinton County, Pennsylvania from February through April, 1982. U.S.F. & G's insured, OH Materials, contracted with the EPA to perform certain clean-up operations including the removal of hazardous chemicals. The clean-up involved the disposal of a tank from an old railroad car containing oleum sludge, a concentrated form of sulphuric acid. OH Materials recommended that the tank be removed from its pedestal and placed at the rear of the Drake site or taken off of the Drake site where neutralization of the oleum contents could be accomplished with maximum safety. The EPA employees rejected this proposal and directed OH Materials to accomplish the neutralization without moving the tank by gradually adding water to the tank to liquify the sludge and allowing it to drain from a valve at the bottom of the tank. On March 15, 1982, during this neutralization process, the valve broke and some oleum was released into a water-filled tub below the tank, creating a cloud of sulphuric acid. This cloud migrated off the Drake site causing personal injury to five individuals. The EPA employees continued to direct OH Materials to neutralize the sludge in the tank while on its pedestal. On March 23, 1982, an explosion occurred within the tank as a result of the build-up of heat from water being added to the sulphuric acid in the tank. The explosion released a large cloud of sulphuric acid which migrated off the Drake site and caused damage to many automobiles, buildings, and airplanes in Clinton County. OH Materials was liable for all of the property damage and personal injury claims caused by the acid clouds on the basis of strict liability without regard to any negligence on the part of OH Materials. In addition to assuming the truth of the above-described facts, we will assume that the United States was negligent in rejecting OH Materials' recommendation and in selecting and directing the method of neutralization employed.

The sole issue raised by the United States' motion is whether its actions in determining and directing the method of neutralization of the oleum sludge fall within the discretionary function exception to the Federal Tort Claims Act, thereby barring a claim against the United States regardless of any negligence on its part. In Dalehite v. U.S., 346 U.S. 15, 35 (1953), the Supreme Court stated that discretionary function or duty

. . . includes more than the initiation of programs and activities. It also includes determinations made by executives or administrators in establishing plans, specifications, or schedules of operations. Where there is room for policy judgment and decision, there is discretion. It necessarily follows that acts of subordinates in carrying out the operations of government in accordance with official directions cannot be actionable.

The Supreme Court's recent decision in United States v. S. A. Empresa De Viacao Aerea Rio Grandense (Varig Airlines), 104 S. Ct. 2755, 2764 (1984) ". . . has reduced some of the uncertainty generated by the numerous Courts of Appeals' decisions that have wrestled with the vague contours of the discretionary exception." General Public Utilities Corp. v. United States, 745 F.2d 239 (3d Cir. 1984).

The Supreme Court has set forth the following test which we shall apply in this case:

First, it is the nature of the conduct, rather than the status of the actor, that governs whether the discretionary function exception applies in a given case. . . . Thus, the basic inquiry concerning the application of the discretionary function exception is whether the challenged acts of a Government employee — whatever his or her rank — are of the nature and quality that Congress intended to shield from tort liability.

Varig Airlines, 104 S. Ct. 2755, 2765.

We must consider the nature of the EPA's conduct in determining the applicability of the discretionary function exception. According to U.S.F. & G's assessment of the conduct which we will accept as true for the purposes of this motion, the EPA, in the person of Thomas Massey, was not merely overseeing the clean-up operation, but was actively involved in and ultimately responsible for selecting and approving the method used to neutralize the oleum sludge. Thomas Massey weighed the risks and benefits of various clean-up options and chose one of those options. Massey affidavit, pp. 2-3. The question arises as to whether Massey's conduct was such that there was ". . . room for policy judgment and decision." Dalehite v. U.S., 346 U.S. 15, 36 (1953). The fact that some choice was involved in the decision-making process is insufficient to activate the discretionary function exception. Drake Towing Co., Inc. v. Meisner Marine Const. Co., 765 F.2d 1060 (11th Cir. 1985). Nearly all human activity involves decision-making, but based upon the facts before us, Massey was not making a policy judgment. Massey was involved not as a policymaker, but as an actor. This distinction has also been worded in terms of decisions made at a "planning level" as opposed to those made at an "operational level." Dalehite v. United States, 346 U.S. 15, 42 (1953). The former constitute discretionary functions, whereas the latter do not. This distinction has recently been recognized by the Court of Appeals. Pooler v. United States of America, 3d Cir. slip op. filed March 27, 1986. In our view, Congress did not intend to shield from liability the errors of persons carrying out governmental policies or functions, where those persons were not involved in policymaking. Since Massey's actions were not involved in policymaking, they were not of the nature and quality that Congress intended to shield from tort liability, Varig Airlines, 194 S. Ct. at 2765: therefore, the discretionary function exception does not apply in this case.

An appropriate order will be entered.