The Contours of Government Contractor Immunity

The Southeast Louisiana (“SELA”) Drainage Project, a federally funded, multi-phase construction project sponsored by the Sewerage and Water Board of New Orleans (“SWB”) and the United States Army Corps of Engineers (“USACE”), is intended to improve drainage and prevent flooding in metropolitan New Orleans. The construction has provoked eight consolidated lawsuits brought by owners of Uptown homes and businesses owing to vibration-causing construction activities and water table manipulation. To date, the United States District Court for the Eastern District of Louisiana has dismissed claims against a number of the government contractor defendants for inverse condemnation, breach of contract, negligence, and legal indemnification. In December of 2016, the Court considered further motions for summary judgment filed by the contractor defendants. The motions raised the defense of government contractor immunity as a complete bar to all claims. Sewell v. Sewerage & Water Bd. of New Orleans, 2016 WL 7385701 (E.D. La. Dec. 20, 2016).

The government contract defense guards contractors hired by the government from liability where the performance of a discretionary function is at issue. The so-called “Boyle test” governs whether government contractor immunity will lie: (1) the government must have approved reasonably precise specifications; (2) the equipment or work must have conformed to those specifications; and (3) the contractor must have warned of any dangers that were known to the contractor but not to the government.

In Sewell, the Eastern District found all three prongs satisfied and held that government contractor immunity shielded the defendant contractors from liability. The court determined that the contractors had shown “uniformly detailed” plans and specifications across the project. Further, the defendants showed that USACE exercised daily oversight and supervision, which is “persuasive evidence” of conforming work. The defendants’ evidence that their work was accepted in the form of periodic payments for completed work additionally bolstered the contractors’ position that they had performed compliant work in the manner contemplated by USACE. Lastly, the Eastern District held USACE “chargeable with general knowledge that the construction, as planned, had potential to cause damage from vibrations and surface movements.” Having thus satisfied the Boyle test, the government contractors prevailed on their immunity defense, and all claims against them were dismissed.