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United States Fidelity & Guaranty Co. v. United States

filed: January 15, 1988.


Appeal From The United States District Court For The Middle District Of Pennsylvania, Scranton, D.C. Civil No. 84-1255.

Sloviter, and Stapleton, Circuit Judges, and Fisher, District Judge*fn*

Author: Stapleton


STAPLETON, Circuit Judge:

The United States Fidelity & Guaranty Company (U.S.F.&G.) instituted this action against the United States under the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680 (1982). The action seeks recovery for losses arising from an accident that occurred during the cleanup of an abandoned chemical facility. After trial, the district court held that U.S.F.&G. could recover. Because we hold that the discretionary function exception, 28 U.S.C. § 2680(a) (1982), bars recovery against the United States in this case, we will reverse.


The district court found the following facts. Drake Chemicals, Inc. (Drake) operated a chemical manufacturing facility in Lock Haven, Pennsylvania from 1961 until the company went bankrupt in 1981. When Drake ceased operations, it abandoned its manufacturing site, leaving numerous chemical drums, tanks, and reactors behind. The Pennsylvania Department of Environmental Resources inspected the Drake site and determined that the site posed a threat to the public health and to the environment. After attempting unsuccessfully to have Drake clean up the site, the Department requested the Environmental Protection Agency (EPA) to undertake a cleanup operation.

In February 1982, the EPA approved the Drake site for an "immediate removal action" pursuant to its authority under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601-9657 (1982) (CERCLA). The EPA typically undertakes an immediate removal action only if it determines that a response is needed within hours or days to prevent or mitigate significant harm to the public health or to the environment. After conducting an investigation, the EPA concluded that an imminent threat of fire and explosion existed at the Drake site, as well as a threat of public contact with hazardous chemicals.

The immediate removal action at the Drake site was directed by an On Scene Coordinator, an EPA employee, who selected OH Materials Handling Company (OH Materials), a private cleanup specialist, as the prime contractor for cleaning up the Drake site. The On Scene Coordinator had primary responsibility for determining the nature and scheduling of the work to be done, the means of disposing of waste, and the expenditures of OH Materials for materials and manpower. In particular, the On Scene Coordinator had responsibility for directing and monitoring the activities of OH Materials.

One of the most serious hazards at the Drake site was an old railroad tank car resting on raised concrete pedestals. The tank contained oleum, a solution of sulfur trioxide in concentrated sulfuric acid, which is extremely reactive with a wide range of compounds and sensitive to moisture. At the commencement of the removal action, the oleum tank was venting directly ito the atmosphere and posed a major threat of fire, explosion, and release of pollutants.

OH Materials suggested that the tank be removed from its pedestals and transferred to a remote location, or alternatively placed on the ground at the rear of the Drake site prior to neutralization and removal of the oleum. The On Scene Coordinator rejected these recommendations after considering the potential risks from moving the tank. OH Materials then suggested neutralizIng the oleum in the tank by slowly draining all of the liquid oleum from the tank through the bottom valve ito a container of water and allowing the oleum to react with the water in a controlled fashion. The remaining sludge inside the tank would then be neutralized by slowly adding water to the tank. Following the completion of the chemical reaction, the neutralized sludge would be drained. The On Scene Coordinator approved this plan.

On March 4, 1982, a hydrogeologist employed by the Commonwealth issued a report recommending that the more hazardous operations at the Drake site, such as those involving oleum, should be done on a sunny day with a north wind in excess of three knots. The reason for this recommendation was that the City of Lock Haven, with a population of approximately 15,000, is situated immediately to the north, west, and northeast of the Drake site, while areas to the south, southeast, and east of the site are sparsely populated. The On Scene Coordinator was on notice of the hydrogeologist's report prior to the neutralization of the oleum tank.

On March 15, 1982, while the oleum was being drained from the tank through the bottom valve, a nut loosened and an uncontrolled flow of oleum escaped and began to react with the water in the tub below the tank. Employees of OH Materials tightened the valve, but not before a dense cloud of sulfur trioxide and sulfuric acid formed and migrated toward Lock Haven. Five Pennsylvania Department of Transportation workers suffered respiratory distress from exposure to the acid cloud.

After this incident, the On Scene Coordinator met with OH Materials and decided to continue neutralization in the manner originally approved. OH Materials proceeded to add water gradually to the oleum tank until the tank was completely filled with water and all evidence of reaction between the water and the contents of the tank ceased. OH ...

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