MARTIN L. C. FELDMAN, District Judge.
Before the Court are two motions by the defendants, the United States and the United States Army Corps of Engineers: (1) motion to dismiss the property damage and negligence claims for lack of subject matter jurisdiction; and (2) motion for summary judgment as to the trespass claim. For the reasons that follow, the motions are GRANTED.
This case arises from property damage allegedly caused by the poor workmanship and oversight of the United States Army Corps of Engineers in completing the Hurricane & Storm Damage Risk Reduction System at the Lakefront levee around the 17th Street Canal. Some of the work occurred at or near the Sailboat Bay Apartment complex, located at 8600 Pontchartrain Boulevard. Sailboat Bay has brought claims for negligence, property damage, and trespass resulting from that construction work.
The project included a contract that the Corps awarded to Tetra Tech EC, Inc., for new T-wall and floodgates from the 17th Street Canal to Topaz Street along West Marine Avenue and Lakeshore Drive in the Lakeview area of New Orleans. The defendants used the plaintiff's parking garage to demolish the existing floodwall adjacent to the apartment complex, along with a ten-foot strip of parking paving adjacent and parallel to the floodwall. The defendants also demolished the existing drainage underneath the parking lot pavement, and new drainage lines were installed.
Sailboat Bay Apartments holds its property under a lease with the Orleans Levee District (OLD). In that lease, the OLD reserved some of its right to the property; the parties dispute the extent of the reservation. Sailboat Bay contends that the OLD retained the rights to only a twelve-foot strip of property, and because the Corps's work crossed that line, the Corps worked outside of its easement with the Corps and trespassed onto Sailboat Bay's property. The Corps contends that the lease, when viewed in full, contemplates Sailboat Bay's control over its apartment building and the OLD's control over the lands affecting flood-control structures nearby. The lease states in part:
The OLD granted the Corps a signed Authorization for and Right of Entry for Access, Construction, Operation, Maintenance, Repair, Rehabilitation, and Replacement. The Authorization states that the OLD, as the property owner, "grants a partial right of entry to existing Orleans Levee District rights-of-way, servitudes and properties under its jurisdiction." The OLD attested that it was "vested with sufficient ownership interests in these immovable property interests or rights of use thereof to support the Right of Entry granted," and the grant was "expressly limited to the descriptions of the immovable property interests and their extents, with regard to property descriptions and boundaries, which are owned by the Orleans Levee District."
The Corps's contract with Tetra Tech states that upon completion of the Contractor's work, "rights-of-way furnished by the Government shall be returned to its original condition prior to construction unless otherwise noted." It also states:
The project was completed in summer 2011, and shortly thereafter Tetra Tech began repairing or replacing the damaged portions of the parking lot, building, and concrete wall using drawings that the Corps had produced. The plaintiff alleges that the replacement plans and the resulting work were grossly inadequate, incomplete, deficient, and defective.
The United States and the Corps contend that this Court lacks subject matter jurisdiction to hear the property damage and negligence claims, because the Federal Tort Claims Act's limited waiver of sovereign immunity does not include acts of independent contractors and discretionary functions. The plaintiff responds that the independent contractor exception does not apply, because the Corps had daily operational control over the project; Corps approval was required for the Work Plan and placing of pipe and trench drains in the drainage construction. The plaintiff contends that the Corps's negligent deviation below industry standards in approving the Work Plan does not fall under the independent contractor or discretionary function exceptions.
The United States and Corps also move for summary judgment as to the trespass claim, contending that the Corps had the OLD's consent to be on the property and a valid right-of-use servitude. The plaintiff responds that any servitude granted by the OLD did not extend beyond a narrow strip of property and that the Corps's work exceeded that limitation; it also contends that Corps personnel were seen physically present on the Sailboat Bay property. In their reply, the United States and the Corps submit that to the extent that there was any physical intrusion beyond the bounds of the servitude, the independent contractor exception bars suit, because any such trespass would have been done by Tetra Tech employees. The plaintiff has filed a sur-reply in which it submits that the Corps was responsible for obtaining the appropriate rights of entry and access; that the right of entry granted by the OLD did not cover the construction area is the fault of the Corps, not its Contractor.
Motions filed under Rule 12(b)(1) of the Federal Rules of Civil Procedure allow a party to challenge the Court's subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). "The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction."
"[T]he central issue [in deciding a motion to dismiss] is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief."
It is well settled that, as a sovereign state, the United States is immune from civil suits unless it consents to being sued.
Under the Federal Tort Claims Act, federal district courts "have exclusive jurisdiction on civil actions on claims against the United States for money damages . . . for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his employment. . . ."
A "critical factor" in distinguishing a federal employee from an independent contractor is whether the Government controls "the detailed physical performance of the contractor."
Pursuant to that analysis, factors suggesting an employee relationship are:
Here, the plaintiff contends that the independent contractor exception does not apply because the Corps had daily operational control at the project site and because the plaintiff's claim is for damage resulting from the Corps's own defective plans and specifications. The plaintiff invokes the affidavit of Leo Hodgins, Sailboat Bay's owner and manager, who says that Brock Schmidt and William Rossignol, Corps personnel, were present on the property on a daily basis. The plaintiff also directs the Court to contract language stating that "[b]oth the Government and the Contractor are the construction operators," and construction operators "hav[e] day-to-day operational control." The "Government" referenced is the Army Corps of Engineers, New Orleans District.
The defendants counter that the presence of Army Corps personnel is entirely consistent with the Corps's quality assurance checks. Hodgins does not state what, if anything, the Corps personnel were doing on the property or how exactly they exercised daily control over the work. Sailboat Bay's reliance on the "Storm Water Pollution Prevention Measures" section of the contract that states that the Army Corps had "daily operational control over the activities at the project site" is misplaced. The pollution provision-appearing on page 363 of a 708-page contract-does not apply to private-property damage and does not purport to govern contract activities beyond its own limited scope. The provision, by its own terms, is designed "to control soil erosion and the resulting sediment to the extent necessary to prevent sediment from leaving the contract rights-of-way and prevent pollution of any water body caused by the runoff from the areas of construction activities." Moreover, even if the provision's scope were broader, it still would not contradict the independent contractor argument, because as "construction owner," the Corps had "operational control over the plans and specifications," not the actual work. Tetra Tech is listed as a joint "construction operator," because that definition includes the party "having day-to-day operational control over . . . activities at a project site."
The Court finds credence, on the record before it, in the Corps's contentions. The plaintiff's cherry-picking one provision in an exceedingly long contract does not defeat the independent contractor exception. The Court has before it no specific allegation as to how the Corps exercised daily operational control over the work, nor is anything of record; the plaintiff, instead, merely relies on nothing but conclusory allegations and speculation. The contract expressly provided that Tetra Tech had the obligation to ensure that private property was not damaged and to restore any damaged property. The other Restatement factors also support the application of the independent contractor exception: the parties did not intend to create an employment relationship between the Corps and the Tetra Tech employees; Tetra Tech is in the business of heavy duty commercial construction, requiring a high level of skill; Tetra Tech provided its own machinery, supplies, and manpower; and the Corps paid Tetra Tech a fixed price in periodic installments. Thus, the Court finds that the independent contractor exception applies, and the federal government has not waived sovereign immunity.
The United States and the Army Corps also contend that the discretionary function exception applies to bar the property damage and negligence claims. "The provisions of [the FTCA] shall not apply to any claim . . . based upon the exercise or performance ... [of] 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). The "discretionary function exception is thus a form of retained sovereign immunity."
The plaintiff first asks the Court to deny the defendants' motion without prejudice to allow for further discovery. The party seeking discovery bears the burden of showing its necessity.
Here, the plaintiff asserts only that "discovery is crucial in order to confirm fully and finally who was actually responsible for the Project work." The plaintiff cannot rely on general statements that discovery will produce needed, unspecified facts. Particularly because sovereign immunity is at play, the Court finds that the plaintiff has not carried its burden of showing that discovery is warranted.
Alternatively, the plaintiff submits that the discretionary function exception does not apply, because the Corps's decision to use substandard plans and specifications in the design of the drainage system and parking lot and to allow the use of improper materials in the construction of the drainage system was not policy based. The Supreme Court has announced a two-part test for discretionary-function immunity.
First, the conduct must be a "matter of choice for the acting employee."
Second, "even `assuming the challenged conduct involves an element of judgment,'" we must still decide that the "`judgment is of the kind that the discretionary function exception was designed to shield.'"
The plaintiff appears to challenge only the second prong of the discretionary function test; it does not identify any mandatory federal statutes, policies, or directives that would require the Corps to adhere to a specific course of action in administering the Contract and ensuring that Tetra Tech's work was not performed negligently.
As to the second prong, the plaintiff submits that the Corps's action or inaction was not based on considerations of social, economic, or political policy. The Corps, however, contends that the degree to which it monitored its contractor's work is based on policy considerations, such as costs, risks, the scope of the project, the reliability of the contractor, the federal personnel available, and the judgment of the contracting officials. The Court agrees. "Supervision of a contractor's work, including the degree of oversight to exercise, is inherently a discretionary function."
Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine dispute as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.
The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion.
The United States and the Army Corps move for summary judgment as to the plaintiff's trespass claim. The Corps contends that it had the consent of the OLD to be on the property and a valid rightof-use servitude. The plaintiff counters that the right-of-entry from the OLD applied only to a small portion of the property and that the Corps exceeded that.
Under the FTCA, the United States is liable for tort claims "under circumstances where the United States, if a private person, would be liable to the claimant" under state law. 28 U.S.C. § 1346(b)(1). The Louisiana Civil Code recognizes the tort of trespass under article 2315.
Here, Sailboat Bay contends that the Corps performed work outside of the limited area covered by its servitude granted by the OLD, and that this incursion constituted a trespass; the concrete foundation of the parking lot and its drainage system were removed and damaged, and a temporary electric pole was attached to the plaintiff's property; the defendants' equipment ran into the building itself, causing damage to the building and the pipe insulation hanging over the parking garage; green space adjacent to the parking garage was damaged. None of these areas is within the Right of Entry granted by the OLD, contends the plaintiff.
The Corps responds that Sailboat Bay incorrectly reads the lease between the OLD and Sailboat Bay. Sailboat Bay's authority to grant a right-of-use servitude applies only to "the construction or modification of, alterations, repairs, or additions to, or changes in any building or buildings now situated or hereafter erected on land adjoining or adjacent to the leased premises." The OLD did not give a right-of-use servitude for alterations to the apartment building. Rather, the servitude was for floodwall work outside of the actual Sailboat Bay building structure. The Corps contends that the lease contemplates Sailboat Bay's control over its apartment building and OLD's control over the lands affecting flood-control structures nearby.
The Corps further submits that Sailboat Bay's only evidence that the work exceeded the physical dimensions of the right-of-use servitude is the unsworn report of an engineer retained for this litigation, and that this statement is not proper summary judgment evidence. The engineer was not present on the property when the work occurred, has no special expertise in surveying or property matters, and does not explain his conclusion that work exceeded the rights of way provided. The Corps argues, in the alternative, that if the Court should find a genuine dispute of fact regarding encroachment, the claim should nonetheless be dismissed for lack of subject matter jurisdiction under the independent contractor exception to the FTCA's waiver of sovereign immunity. Any person trespassing beyond the bounds of the right-of-use servitude would have been acting under the control of Tetra Tech.
The trespass claim cannot survive summary judgment. The Court finds that the Corps did not trespass on the plaintiff's property to the extent that the servitude granted by the OLD allowed its presence. The plaintiff admits that if the Corps had stayed within the boundaries of the servitude, there would be no trespass. As to any purported overstepping, the independent contractor exception applies, because on this record any encroachment and the resulting damage was clearly caused by Tetra Tech. The Contract between the Corps and Tetra Tech contemplated such damage to private property, and Tetra Tech was responsible for repairs, which it performed. The Corps, again, is not liable for property damage caused by Tetra Tech.
The plaintiff contends for the first time in its sur-reply that the alleged physical presence of Corps employees, Brock Schmidt and William Rossignol, is trespass as a matter of law. Their presence was raised originally only in opposition to the motion to dismiss the property damage and negligence claims; the plaintiff used their physical presence to support its argument that the Corps exercised daily control over the Project site. The plaintiff does not, and cannot, explain why the argument that their presence amounted to trespass was not made its in opposition to the motion for summary judgment. The Court afforded the plaintiff the opportunity to file a sur-reply to respond to the Corps's new arguments about sovereign immunity as to the trespass claim, not to expand the basis of its trespass claim to include the mere physical presence of Corps personnel.
Accordingly, for the foregoing reasons, IT IS ORDERED that the motion to dismiss the property damage and negligence claims for lack of subject matter jurisdiction, and the motion for summary judgment on the trespass claim are hereby GRANTED.