JOHN G. HEYBURN, II, District Judge.
Plaintiff, Cathy Zion, filed this federal tort action against the United States, the United States General Services Administration (collectively, "GSA"), and United States government employees after she was injured at a federal government office building. The United States substituted itself for the two government employees as the proper party liable pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680 ("FTCA"). Additionally, Plaintiff sued DaeSung/LB & B Joint Venture ("DL Joint Venture"), DaeSung Corporation, LB & B Associates, Inc. (collectively, "the DL Entities"), and two principals of the DL Entities for negligence in carrying out their responsibilities for maintenance and safety of the same federal office building. By agreed order, the two principals of the DL Entities have been dismissed.
Under the FTCA, Plaintiff charges both GSA and the DL Entities with three counts of negligence: maintaining an unreasonably dangerous condition, failure to warn of the unreasonably dangerous condition, and negligent hiring and supervision of its employees. Apparently because the Kentucky statute of limitations for negligence actions had passed, Plaintiff did not assert any state tort claims either here or in other courts. As a consequence of the resulting unusual circumstances, both GSA and the DL Entities now move to dismiss for lack of subject matter jurisdiction. The Court will summarize the pertinent facts and then discuss each motion in turn.
On April 20, 2010, Plaintiff was delivering magazines to the Mazzoli Federal Office Building in Louisville, Kentucky when she entered through a fire door located on the loading dock. That door closed at a much quicker speed than expected, striking her heel and severing her Achilles tendon. Allegedly, the door closing mechanism had been malfunctioning for some time, and Defendants failed to post any warnings about this condition.
The United States, through the GSA, owned and operated the Mazzoli Building, and contracted with DL Joint Venture to maintain the building.
Both sets of defendants have now moved to dismiss due to a lack of
The core issue here is whether, under the factual circumstances, DL Joint Venture was a government employee or an independent contractor. The answer determines whether Plaintiff can recover from GSA and/or DL Joint Venture under the FTCA. This is a question of subject matter jurisdiction. Durbin v. United States, 996 F.2d 1214, at *1 (6th Cir.1993). Federal law governs this issue. Fisher v. United States, 356 F.2d 706, 708 (6th Cir. 1966).
The Court will first consider DL Entities' motion. To do so, the Court must address two main issues: whether DL Joint Venture is a government employee or independent contractor and whether additional discovery is necessary.
The FTCA provides "a limited waiver of sovereign immunity, making the Federal Government liable to the same extent as a private party for certain torts of federal employees acting within the scope of their employment." United States v. Orleans, 425 U.S. 807, 813, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). The FTCA grants original jurisdiction to federal district courts over claims against the United States arising from the negligence of its employees and agencies, but it specifically excepts "contractors" from the definition of federal agencies. See 28 U.S.C. § 2671. Because independent contractors are not considered agents or employees of the United States, an independent contractor cannot be held liable under the FTCA.
The Supreme Court has said that "the power of the Federal Government `to control the detailed physical performance of the contractor' is a critical factor distinguishing federal agents and employees from independent contractors." Orleans, 425 U.S. at 814, 96 S.Ct. 1971 (citing Logue v. United States, 412 U.S. 521, 528, 93 S.Ct. 2215,
The Court agrees with the Fourth Circuit that "the real test is control over the primary activity contracted for and not the peripheral, administrative acts relating to such activity." Wood v. Standard Prods. Co., Inc., 671 F.2d 825, 832 (4th Cir.1982). Therefore, an important source of evidence as to the dynamics of a contractual relationship between two entities is the contract itself. See Fraser v. United States, 490 F.Supp.2d 302, 310 (E.D.N.Y. 2007) ("Courts look to the terms of the contract to determine whether the Government controlled the detailed physical performance of the contractor or whether the Government supervised the day-to-day operations of the contractor."). The DL Entities argue that the specific provisions of their building maintenance services contract prove that it was an independent contractor, while the Plaintiff views the same provisions as evidence of an employer-employee relationship.
The contract describes only DL Joint Venture's performance-based obligations, and requires DL Joint Venture to provide all management, supervision, and the labor, materials, supplies and equipment necessary to perform the contract. What the contract does not provide is also illustrative of the relationship between DL Joint Venture and GSA. For example, although the contract outlines DL Joint Venture's major responsibilities, it does not prescribe how DL Joint Ventures must perform those responsibilities. See, e.g., Cowden v. U.S. Dep't of Labor, 2005 WL 1691036, at *12 (E.D.Ky. July 18, 2005) (holding that because the alleged employee entity hired and retained its own staff, maintained responsibility for the administration and operation of the government building, and the government only dictated that the entity abide by broad guidelines, the entity was an independent contractor). So, while the contract outlines standards for performance, it does not provide a procedural guideline or a detailed manual for the work.
Thus, based upon the contractual language alone, the Court concludes that the parties intended DL Joint Venture to be an independent contractor for the United States. Nevertheless, Plaintiff makes three distinct arguments that DL Joint Venture is actually an employee of the United States. If so, she could assert
Plaintiff's first and most persuasive argument is that GSA retained some areas of control over building maintenance. Specifically, Plaintiff lists twenty-three items that suggest the type of detailed physical control and day-to-day supervision of a typical employer-employee relationship. Of particular importance are the following reservations of responsibility:
Upon closer review, these retained powers equate to the right to generally oversee the performance of the contract and to inspect the building to ensure its proper repair. Retaining these powers does not translate into detailed day-to-day control over contract performance. The general view seems to be that retaining the right to inspect performance and supervise compliance with the contract does not establish an employee relationship; the employee relationship requires a more hands-on and day-to-day supervisory arrangement. See Hsieh v. Consolidated Engineering Servs., Inc., 569 F.Supp.2d 159, 177 (D.D.C.2008) ("[T]he government may reserve the right to inspect the contractor's work and monitor its compliance with federal law without vitiating the independent contractor exception.").
Under Plaintiff's argument, an independent contractor contract must devise a blueprint whereby the government is completely divorced from the performance of the contract, granting total and unfettered control over the contract to the independent contractor. The Court disagrees with such a characterization. The government cannot reasonably be expected to forfeit all rights of general supervision when it contracts out services.
In a related argument, Plaintiff claims that GSA also maintained ultimate responsibility for the safety of its building, dictating a certain level of control over the building itself. However, that the United States retained a right to inspect the building and ensure its safety does not vitiate the independent contractor status. See Orleans, 425 U.S. at 815, 96 S.Ct. 1971 (holding that the reservation of rights to inspect provided a general supervisory option for the federal government that did not overcome the independent contractor designation).
Next, Plaintiff argues that GSA employees sustained a constant presence at the Mazzoli Building, demonstrating the government's daily supervisory role over DL Joint Venture. However, the daily presence of GSA employees does not necessarily mean that those employees supervised DL Joint Venture's work and does not obviate the independent contractor-principal relationship. See Lipka v. United States, 369 F.2d 288, 290-92 (2d Cir.1966) (holding that maintaining some government staff on site did not charge that staff with "full responsibility for the safety of its contractors' employees"). Again, to find otherwise would suggest that to constitute an independent contractor-principal relationship, the principal must completely divorce itself from the performance of the contract and prevent any of its own employees from maintaining a presence at the worksite. The Court will not support this conclusion.
Plaintiff finally contends that GSA did not explicitly contract away its duty to warn of dangerous conditions. However, the duty to warn of dangerous conditions is inherently encompassed within the general transfer of the responsibility to maintain the building and ensure the safety of its inhabitants, exactly what GSA contracted away. As stated above, retaining some precursory form of building oversight does not destroy the independent contractor characterization. "The law is clear that the government may delegate its safety responsibilities to independent contractors in the absence of federal law or policies restricting it from doing so." Hall v. United States, 149 F.3d 1183, at *3 (6th Cir.1998) (quoting Andrews v. United States, 121 F.3d 1430, 1440 (11th Cir. 1997)). Plaintiff has not pointed to any federal law restricting the delegation of this duty to an independent contractor.
Because Plaintiff has not succeeded in convincing the Court that DL Joint Venture was a government employee, Plaintiff cannot bring FTCA claims against DL Joint Venture. The DL Entities must therefore be dismissed as parties to this litigation, because the entire Complaint was brought under the FTCA.
Plaintiff also requests more time to engage in discovery to determine the exact nature of the relationship between GSA and DL Joint Venture and to uncover evidence relating to other issues. The Court disagrees. The parties have engaged in a normal period of discovery. It is apparent from the briefs that both parties have ample evidence to argue their respective positions. Plaintiff has not identified a category of evidence that would improve Plaintiff's ability to overcome the DL Entities' Motion to Dismiss. For these reasons, the Court will sustain the DL Entities' Motion to Dismiss.
The Court will now examine whether GSA is entitled to sovereign immunity on the claims against it. Relevant here, the FTCA excepts two types of claims from its limited waiver of sovereign immunity: (1) those against the federal government's independent contractors and (2) those falling under certain enumerated exceptions. Milligan v. United States, 670 F.3d 686, 692 (6th Cir.2012). Limitations on the waiver of sovereign immunity or consent to suit must be strictly construed in favor of the United States. Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986). Here, the United States argues that it is entitled to sovereign immunity over two claims and is excepted from the waiver of sovereign immunity on the third claim.
Initially, the Court will consider Plaintiff's first two negligence claims: (1) maintaining an unreasonably dangerous condition and (2) failure to warn about the unreasonably dangerous condition. Under the FTCA, the United States is responsible for the negligence of its employees and agencies. Here, GSA delegated the maintenance and safety of the Mazzoli Building to DL Joint Venture. Because the Court has found that DL Joint Venture is an
The duty to warn of a dangerous condition is entwined with the responsibility to ensure the building's safety,
As to the negligent hiring and supervision claim, Plaintiff argues that GSA failed in its duty of reasonable care when it hired and then failed to adequately supervise DL Joint Venture. GSA argues that
Under the FTCA, where the government takes an action that is within its discretionary authority, federal courts lack subject matter jurisdiction over a claim challenging the lawfulness of that action. Rosebush v. United States, 119 F.3d 438, 440 (6th Cir.1997). A discretionary action is one "that involves an element of judgment or choice." United States v. Gaubert, 499 U.S. 315, 322, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991) (internal quotation marks and citations omitted). Therefore, where the government official is constrained to act in a particular manner under a statute, regulation or policy that specifically prescribes a course of action, the act is not discretionary and cannot fall within this exception. Id.
In Gaubert, the Supreme Court established a two-part test to determine whether an action falls within the discretionary exception. First, the Court must decide whether the "challenged government act or omission `violated a mandatory regulation or policy that allowed no judgment.'" Hall v. United States, 149 F.3d 1183, at *2 (6th Cir. May 27, 1998) (quoting Gaubert, 499 U.S. at 322-23, 111 S.Ct. 1267). If so, the government cannot rely on the discretionary function exception. If not, however, the Court must then decide "whether that judgment involved considerations of public policy. If it did, the discretionary functions exception applies." Id.
GSA's decisions to hire independent contractors seems clearly discretionary in these circumstances. See O'Bryan v. Holy See, 556 F.3d 361, 387 (6th Cir.2009) (holding that "claims of negligent hiring fall within the discretionary function exception"). Foremost, the GSA must first choose whether to contract out these services. Once that decision is made, GSA must decide how to outline the requirements of the contract, select the entities or persons to perform it, and establish a system to monitor it. Each of these decisions require the exercise of judgment. The Court can find no specific laws or regulations governing GSA's decision to subcontract building maintenance.
Under the Gaubert test, Plaintiff can still maintain the action if GSA's decisions were not the product of public policy considerations. Deciding to subcontract building maintenance work to an independent entity would seem to be a policy decision under which GSA would weigh its concerns for the adequate operation and safety of the federal office building with considerations of economy and efficiency.
Such a decision would include consideration of numerous factors, "including budgetary constraints, public perception, economic conditions, individual backgrounds, office diversity, experience, and employer intuition." Id. The Supreme Court has emphasized that the discretionary function exception is a pivotal FTCA provision, designed "to prevent judicial `second-guessing' of legislative and administrative decisions grounded in social, economic and political policy through the medium of an action in tort." United States v. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). This seems precisely the type of decision that falls within the purpose of the exception. Satisfying the discretionary function test, the United States enjoys sovereign immunity over Plaintiff's negligent hiring and supervision claim. Accordingly, all three claims against GSA must be dismissed.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that DaeSung Corporation, LB & B Associates, Inc., and DaeSung/LB & B Joint Venture's Motion to Dismiss is SUSTAINED.
IT IS FURTHER ORDERED that the United States' Motion to Dismiss is SUSTAINED and Plaintiff's claims are DISMISSED WITH PREJUDICE.
This is a final order.
In other cases where the independent contractor exception is applicable, the Sixth Circuit did not engage in the type of analysis this particular case requires. For example, in Gowdy v. United States, the Sixth Circuit accepted that the negligent actor was an independent contractor and analyzed the extent to which the United States could be held responsible for injuries sustained by the employees of its independent contractors. 412 F.2d 525, 529 (6th Cir.1969). The Sixth Circuit entertained the same sort of analysis in Angel v. United States, 775 F.2d 132 (6th Cir.1985). In both Gowdy and Angel, the Sixth Circuit did not inquire, as a preliminary matter, whether the entity at issue was an employee or an independent contractor. However, as a federal law issue, this Court will look to the judgments of other courts that have more thoroughly considered this issue as instructive.
Had the state statute of limitations not expired, Plaintiff would have had options for relief against the DL Entities under other relevant law. For example, Plaintiff could have asserted the FTCA claim in federal court against the GSA and the DL Entities on the employee theory, and perhaps obtained supplemental jurisdiction over state law negligence claims against the DL Entities. See, e.g., Richerson v. United States, 104 F.3d 361 (6th Cir. 1996). Additionally, Plaintiff could have brought suit in state court against the DL Entities on the state law claim. See, e.g., Kassaw v. Minor, 717 So.2d 382 (Ala.Civ.App. 1998). In sum, a plaintiff in a similar situation is not foreclosed from bringing suit against an independent contractor if she files suit within the state law statute of limitations.
