Contractor Tort Liability & Immunity

Government contractors should take note of the Fifth Circuit’s June 30, 2021 decision in Taylor Energy Co. v. Luttrell, which reaffirmed that contractors can enjoy a broad immunity from third-party liabilities—known as “derivative sovereign immunity,” or “Yearsley immunity.” Yearsley immunity emanates from Yearsley v. W.A. Ross Const. Co., an 80-year-old Supreme Court decision, which established that a contractor is immune when (i) it performed acts pursuant to a valid authorization of Congress and (ii) the contractor did not exceed the scope of that authority.

In Taylor Energy, the court dismissed claims arising out of an oil spill containment project in the Gulf of Mexico. The basic claim in the suit was that the contractor failed to effectively remediate and contain the oil. The Fifth Circuit found that the government: (i) provided direction to the contractor through the statement of work, in the form of “goals” and specific contract deliverables and deadlines; and (ii) periodically met with the contractor and reviewed and approved the work during performance. Based on these core facts, the court held the contractor was immune. The court held that it was irrelevant that the statement of work was “barebones,” and that the contractor—rather than the government—designed certain elements of the remediation effort. Following the Fourth Circuit’s 2018 decision in Cunningham v. GDIT, the Taylor Energy decision is another appellate court victory for contractors in the wake of the Supreme Court reaffirming Yearsley’s core principles in Campbell-Ewald Co. v. Gomez.


Continue Reading Fifth Circuit Reaffirms Breadth of Yearsley Immunity For Government Contractors

It’s often said that hard cases make bad law. In the realm of contractor-on-the-battlefield lawsuits, hard cases seem to be making no law—at least at the appellate level.

As detailed in an amicus brief submitted by Covington on behalf of KBR last week in CACI Premier Technology Inc. v. Al Shimari, No. 19-1328 (4th Cir.), time and again in suits against battlefield contractors, appellate courts have refused to provide definitive rulings regarding threshold, immunity-based defenses. This chronic appellate-court indecision has caused unnecessarily-protracted litigation, which in turn has imposed enormous burdens on the U.S. military; permitted expansive discovery intruding upon sensitive military judgments; and rolled up litigation costs totaling tens of millions of dollars—costs that, in many instances, are reimbursed by the government and thus ultimately borne by taxpayers. In other words, lack of timely appellate review has resulted in the very harms that immunity and related defenses are designed to prevent. Ironically, a major reason why these suits have inflicted such harm on these important federal interests is the United States’ own equivocal and inconsistent litigation positions.
Continue Reading Will an Unappealing Trend in Battlefield Contractor Suits Continue? Following A Pattern of Appellate Indecision—Fueled by the Government’s Equivocal Litigation Stances—the Fourth Circuit Mulls En Banc Review

The Contract Disputes Act (“CDA”) is probably not the first law that comes to mind when a government contractor is named as a defendant in a personal injury or wrongful death suit. But a recent decision from the U.S. Court of Federal Claims illustrates why the CDA ─ and its six-year statute of limitations ─ should be top of mind for any contractor that is sued in tort and wants the government to take over its defense or to reimburse its uninsured legal fees or settlement/judgment costs. The Court’s decision, which is the latest opinion in a long-running dispute, is an important reminder for contractors that are indemnified by the government for liabilities to third persons, including under clauses such as FAR 52.228-7, Insurance ─ Liability to Third Persons (MAR. 1996) and FAR 52.250-1, Indemnification under Public Law 85-804 (APR. 1984).

Continue Reading Time Stops for No One: COFC Reminds Indemnified Contractors to Mind the CDA Statute of Limitations

Last week, the Fourth Circuit Court of Appeals affirmed a lower court decision to dismiss a Telephone Consumer Protection Act (“TCPA”) lawsuit against General Dynamics Information Technology, Inc. (“GDIT”), on the basis that GDIT was immune from suit as a government contractor under what is known as the “Yearsley doctrine.”  Craig Cunningham v. GDIT, No. 17-1592 (Apr. 24, 2018). The decision follows a long line of Fourth Circuit decisions in which contractors have been granted protection from liability when they perform work that supports important governmental functions. 
Continue Reading Fourth Circuit Embraces Expansive View of Derivative Sovereign Immunity for Government Contractors

Construction contractors take note: the government contractor defense is alive and well in the Fifth Circuit. In Sewell v. Sewerage and Water Board of New Orleans, the Fifth Circuit recently confirmed that construction companies can successfully assert the government contractor defense in response to tort lawsuits that arise from their performance of federal public works and infrastructure projects. This is a welcomed decision in the Fifth Circuit, which had signaled in recent years that a higher level of proof may be required to establish the first element of the defense ─ i.e., that the government meaningfully reviewed and approved reasonably precise specifications for the allegedly defective construction feature.

The Sewell case illustrates that ─ with the right litigation strategy and a skillfully crafted evidentiary record ─ construction contractors may well prove the defense in cases involving even “rudimentary or general construction features.”
Continue Reading Construction Contractors: The Government Contractor Defense is Alive and Well in the Fifth Circuit