Appendix — United States Fidelity & Guaranty Co. v. United States

z Supreme: Court, U.S.

) FEIELE D

APR 14 1988 |

8 % 1 8 0 3 JOSEPH F. SPANIOEL, JR

CLERK

NO.

IN THE SUPREME COURT OF THE UNITED STATES

October Term 1987

UNITED STATES FIDELITY & GUARANTY COMPANY

Petitioner

VS.

UNITED STATES OF AMERICA

Respondent

APPENDIX

Jonathan E. Butterfield, Esquire

Counsel for Petitioner

LIEBERT, SHORT,

FITZPATRICK & HIRSHLAND

One Executive Plaza, Suite 400

330 Pine Street

Williamsport, PA 17701

(717) 326-9091

“5 CAO aaa

at hati isa ‘

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 87-5073

UNITED STATES FIDELITY

& GUARANTY COMPANY

vs.

UNITED STATES OF AMERICA,

Appellant

Appeal From The United States District

Court For The Middle District

Of Pennsylvania (Scranton)

(D.C. Civil No. 84-1255)

Argued September 9, 1987

BEFORE: SLOVITER, and STAPLETON,

Circuit Judges, and

FISHER, District Judge*

(Opinion filed January 15, 1988)

Jonathan E. Butterfield (Argued)

Liebert, Short, Fitzpatrick &

Hirshland

30 West Third Street

Williamsport, PA 17701

Attorney for Appellee

* Honorable Clarkson S. Fisher. United States District Judge for

the District of New Jersey (Trenton), sitting by designation.

2a

Richard K. Willard

Assistant Attorney General

James J. West

United States Attorney

Jeffrey Axelrad

Phyllis Jackson Pyles (Argued)

Attorneys, Torts Branch

Civil Division

U.S. Department of Justice

Washington, D.C. 20530

: Ray E. Spears

Office of the General Counsel

U.S. Environmental Protection

Agency

Washington, D.C. 20460

Attorneys for Appellant

OPINION OF THE COURT

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.

88 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.

3a

1.

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. 88 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

4a

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

into 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 into 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,

Pe eee

5a

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 te 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 Materials then

began draining the supposedly neutralized material

through the bottom valve.

On March 23, 1982, drainage stopped because the

valve had become clogged with sludge. To clear the

valve, OH Materials employees inserted rods through

the manway at the top of the tank. Following the

insertion of the rods, a steam explosion occurred in the

oleum tank. A large cloud of sulfur trioxide and sulfuric

acid escaped out of the manway. Blown by

south-southwest winds, the acid cloud migrated into

Lock Haven, where it caused property damage to over

S00 motor vehicles, an airplane, and several buildings.

U.S.F.&G., the insurer for OH Materials, paid out

$133,296.97 in claims arising out of the March 23

incident. U.S.F.&G. filed an administrative settlement

claim with the EPA, which the EPA denied. U.S.F.&G.

6a

then filed this suit against the United States on

September 20, 1984, seeking recovery of its losses from

the March 23 incident. On February 13, 1986, without

having submitted a separate administrative claim to

the EPA, U.S.F.&G. filed an amended complaint adding

a claim for $5000 of personal injury losses arising out

of the March 15 incident. The United States then filed a

motion to dismiss or for summary judgment on the

ground that the discretionary function exception

barred liability. The district court denied this motion.

After trial, the district court again concluded that

the discretionary function exception did not apply. See

United States Fidelity & Guar. Co. v. United States,

638 F. Supp. 1068, 1077 (M.D. Pa. 1986). In addition,

the court dismissed the personal injury clatms arising

out of the March 15 incident, because U.S.F.&G. never

submitted these claims to the EPA as required by 28

U.S.C. § 2675 (1982). See id. at 1077-78. With respect

to the March 23 incident, the court rejected the

arguments that the United States was negligent in

leaving the oleum tank on its pedestals before

neutralization and in continuing with the

neutralization procedure after the March 15 incident.

See id. at 1079-80. The court did find, however, that

the United States was negligent in “failing to take wind

conditions into account while supervising the

neutralization of the oleum tank.” Id. at 1084. The

court held that the Government was liable for 60% of

the damage arising out of the March 23, 1982 incident.

The United States appeals on several grounds. We

address only the Government's contention that the

discretionary function exception bars recovery,

because our disposition of this issue renders

unnecessary a discussion of the other issues raised on

appeal. The scope of review of the applicability of the

discretionary function exception is plenary. We have

jurisdiction under 28 U.S.C. § 1291 (1982).

YE ——————

7a

Il.

The Federal Tort Claims Act waives the sovereign

immunity of the United States in claims “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 office or employment.” 28 U.S.C. § 1346{b)

(1982). The statute, hcwever, contains an exception for

“[ajny claim ... based upon the exercise or

performance or the failure to exercise or perform 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) (1982). If governmental conduct falls within

the discretionary function exception, it is irrelevant

whether the United States abused its discretion or

acted negligently.

In defining the scope of the discretionary function

exception, the Supreme Court has recently stated the

general rule that

it is the nature of the conduct, rather than the

status of the actor, that governs whether the

discretionary function exception applies in a given

case... . Thus, the basic inquiry concerning the

application of the discretionary function exception

is whether the challenged acts of a Government

employee--whatever his or her rank--are of the

nature and quality that Congress intended to

shield from tort liability.

United States v. S.A. Empresa De Viacao Aerea Rio

Grandense (Varig Airlines), 467 U.S. 797, 813, 104

S.Ct. 2755, 2764 (1984).

Varig reaffirmed the construction of the

discretionary function exception set forth in Dalehite

v. United States, 346 U.S. 15, 28. 73 S.Ct. 956, 964

(1953). Dalehite held that governmental conduct

8a

falling within the discretionary function exception

“includes more than the initiation of programs and

activities. It also includes determinations made by

executives or administrators in establishing plans,

specifications or schedules of operations. Where there

is room for policy judgment and decision there is

discretion.” Id. at 35-36, 73 S.Ct. at 968 (foctnote

omitted), quoted in Varig, 467 U.S. at 811, 104S.Ct. at

2763. The purpose of exempting decisions in which

there is room for policy judgment and decision is 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.” Varig, 467 U.S. at 814, 104S.Ct. at

2765.

In interpreting the Supreme Court's

pronouncements in Dalehite and Varig, this court has

developed several principles for determining whether

governmental conduct is discretionary within the

meaning of the exception. In the first place, conduct

cannot be discretionary if it violates the Constitution, a

statute, or an applicable regulation. Federal officials do

not possess discretion to violate constitutional rights

or federal statutes. Pooler v. United States, 787 F.2d

868, 871 (3d Cir.), cert. denied, 107 S.Ct. 175 (1986).

In addition, an agency's violation of its own mandatory

regulations is not a discretionary act. Berkovitz by

Berkovitz v. United States, 822 F.2d 1322, 1332 (3d

Cir. 1987), petition for cert. filed, 56 U.S.L.W. 3271

(U.S. Sept. 25, 1987) (No. 87-498).

Second, it is irrelevant whether the government

employee actually balanced economic, sociai, and

political concerns in reaching his or her decision. In

Smith v. Johns-Manville Corp., 795 F.2d 301, 308-09

(3d Cir. 1986), we stated that “(t]he test is not whether

the government actuaily considered each possible

alternative in the universe of options, but whether the

a oo

9a

conduct was of the type associated with the exercise of

official discretion.” This rule corresponds with the

holdings of several other courts of appeals. In

Myslakowski v. United States, 806 F.2d 94, 97 (6th

Cir. 1986), cert. denied, 107 S.Ct. 1608 (1987). the

Court of Appeals for the Sixth Circuit held that

even the negligent failure of a discretionary

government policymaker to consider all relevant

aspects of a subject matter under consideration

does not vitiate the discretionary character of the

decision that is made.

Indeed, it is, in part, to provide immunity

against liability for the consequences of negligent

failure to consider the relevant, even critical,

matters in discretionary decisionmaking that the

Statutory exception exists. If it were otherwise, a

judgrnent-based policy determination made at the

highest levels, to which all would concede that the

Statutory exception applies (the decision to sell

surplus jeeps), would result in no immunity if the

decision could be shown to have been made

without consideration of important, relevant

factors, or was a decision negligently reached. If

that reasoning were sound, the discretionary

function exception would be inapplicable in every

case in which a negligent “failure to consider” a

relevant risk could be proved.

Accord Allen v. United States, 816 F.2d 1417, 1422

n.5 (10th Cir. 1987) (quoting Myslakowski and

stating that it is “irrelevant whether the alleged failure

to warn was a matter of ‘deliberate choice’ or a mere

oversight”), petition for cert. filed, 56 U.S.L.W. 3171

(U.S. July 20, 1987) (No. 87-316); In re Consolidated

United States Atmospheric Testing Litigation, 820

F.2d 982, 998 & n.19 (9th Cir. 1987) (quoting Allen

and Myslakowski and holding that the exception “does

10a

not require an analysis of the decisionmaking

process”). Thus, the relevant question is not whether

an explicit balancing is proved, but whether the

decision is susceptible to policy analysis.

Third, although the discretionary function

exception “plainly was intended to encompass the

discretionary acts of the Government acting in its role

as a regulator of the conduct of private individuals,”

Varig, 467 U.S. at 813-14, 104 S.Ct. at 2764,

regulatory conduct is neither necessary nor sufficient

for the application of the discretionary function

exception. Not all regulatory acts are discretionary. See

Berkovitz, 822 F.2d at 1327-28. Moreover, not all

conduct falling within the exception is regulatory. Acts

of a governmental nature also include “‘other

administrative action not of a regulatory nature, such

as the expenditure of Federal Funds, the execution of a

Federal project and the like.’” Dalehite, 346 U.S. at 27,

73 S.Ct. at 963 (quoting Hearings on H.R. 5373 and

H.R. 6463 before the House Committee on the

Judiciary, 77th Cong., 2d Sess., 28, 33 (1942)

(statement of Assistant Attorney General Francis M.

Shea)) {footnote omitted), quoted in Varig. 467 U.S. at

810, 104 S.Ct. 2762.

Finally, the decisions of the Supreme Court and

this court reveal that the dichotomy between planning

level and operation level conduct does not resolve the

question of whether a governmental act is

discretionary within the meaning of the exception.

Although the Supreme Court in Dalehite did suggest

that planning level decisions are discretionary and

distinguished these decisions from operational

decisions, see 346 U.S. at 42, 73 S.Ct. at 971, Dalehite

neither states nor implies that all operational decisions

are nondiscretionary. In fact, Dalehite states that

“{njot only agencies of government are covered [by the

exception! but all employees exercising discretion.” Id.

lla

at 33, 73 S.Ct. at 966-67 (footnote omitted). Varig

reinforced this conclusion by putting the focus on “the

nature of the conduct, rather than the status of the

actor.” 467 U.S. at 813, 104 S.Ct. at 2764.

In addition, this court in Berkovitz noted that

operational conduct can be discretionary within the

meaning of the exception. 822 F.2d at 1329. Acts at the

operational level may be discretionary if planning level

orders anticipate decisions at lower levels that leave

room for policy judgment and decision. See Pooler, 787

F.2d at 871 (officer in charge of investigation had

discretion in deciding how to pursue investigation,

since “he had to exercise judgment as to the policy

decision to use an informant and as to the extent of

control which should be maintained over the selected

informant”). Moreover, operational acts mandated by

orders of planning level superiors are protected by the

exception even though the actual actor does not

exercise discretion. Dalehite, 346 U.S. at 36, 73 S.Ct.

at 968 (“acts of subordinates in carrying out the

operations of government in accordance with official

directions cannot be actionable”), cited in Varig, 467

U.S. at 820, 104 S.Ct. at 2768.

III.

With these principles in mind, we now turn to the

specific facts of this case. Although the complaint

alleged several theories of negligence on the part of the

United States, the district court found the Government

negligent only in its conduct concerning the timing of

the neutralization of the oleum tank. In particular, the

district court held that the Government should have

scheduled the oleum removal operation at a time when

the wind was not blowing toward the city. Since

U.S.F.&G. does not appeal the district court's holding,

we restrict our discussion to this single decision by the

Government.

12a

In. Dalehite. the Supreme Court found that the

Government's conduct in manufacturing fertilizer and

loading it onto a ship where it later caught fire and

exploded was protected by the discretionary function

exception. The fertilizer, which contained an explosive

ammonium nitrate base, had-been manufactured and

was being shipped pursuant to a federal program the

ultimate objective of which was to provide food for

countries occupied by the United States after World

War II. One of the negligent acts found by the district

court to be a proximate cause of the explosion was a

decision by the Field Director of Ammunition Plants to

bag the fertilizer at a temperature of 200 degrees

Fahrenheit. The Supreme Court held this decision to

be within the discretionary function exception because

it was the kind of decision that required the

decisionmaker to weigh the risk of fire and explosion

inherent in bagging at this temperature against the

“greatly increased production costs and/or greatly

reduced production” that would attend bagging at a

lower temperature. 346 U.S. at 41, 73 S.Ct. at 970. The

Supreme Court observed that “|t}his kind of decision ts

not one which the courts. under the Act, are

empowered to cite as ‘negligence.’” Id.

We perceive no material distinction between the

decision challenged in Dalehite and the one attacked

here. The objective of this phase of the CERCLA

program is to protect the public from the dangers of

abandoned toxic waste. Execution of that program and

accomplishment of its objective necessarily require the

setting of priorities in light of the risks presented at

various sites and the finite resources available to

address the problem. In this instance, the EPA

classified the cleanup operation at the Drake site as an

“immediate removal action.”” The agency thus

determined that significant risks would attend a delay

in cleanup

ee

13a

With this hazard identified and this priority fixed,

the On Scene Coordinator was dispatched with

authority to determine how to schedule the cleanup

operations at the Drake site in a manner that would

most safely and effectively minimize the risk of serious

injury to the public. In particular, the On Scene

Coordinator faced the problem of when to schedule the

neutralization of an oleum tank that was venting

directly into the atmosphere and posed a major threat

of fire, explosion, and release of pollutants into the air.

In this context, one would expect the scheduling

decision to reflect not only the available resources and

the other hazards to be neutralized on the site, but

most importantly, a balancing of the risks of

proceeding with the neutralization on the day chosen

against the risks of further delay. Thus the authority

delegated to the On Scene Coordinator left room for,

and indeed required, the exercise of policy judgment

based upon the resources available and the relative

risks to the public health and safety from alternative

actions.

As a result, we view the challenged decision here as

involving as much or more of a discretionary function

as the bagging temperature decision in Dalehite. In

the words of Dalehite, the On Scene Coordinator's

atleged negligence came in the context of “the

execution of a Federal project,” 346 U.S. at 27, 73 S.Ct.

at 963, and involved a “determination[! made by .. .

{an] administrator]... establishing. . . [a] schedule{]

of operations”, id. at 35-36, 73 S.Ct. at 968, for the

project. Under the Act, we are not “empowered to cite

as ‘negligence.’” id. at 41, 73 S.Ct. at 970. such a

decision.

In its opinion, the district court acknowledged that

“[ijt is conceivable that under certain circumstances

the hazard posed by a tank would be so great that

removal operations would have to proceed immediately

14a

and without regard to wind conditions.” 638 F. Supp.

at 1080. But the court went on to second-guess the On

Scene Coordinator's decision in this particular case by

finding it to be negligent. Under this court's analysis in

Smith, however, the fact that there was no evidence of

an actual policy determination by the On Scene

Coordinator taking wind conditions into account does

not affect the nature of the decision. Once the district

court found that there could be room for a policy

judgment, it should have ended its analysis.

None of the circumstances’ rendering

governmental conduct nondiscretionary was present

in this case. There was no applicable constitutional

provision, statute, or regulation requiring the On

Scene Coordinator to undertake removal actions only

on days with favorable wind conditions. The report of

the Commonwealth's hydrogeologist did not impose a

nondiscretionary, mandatory duty on the On Scene

Coordinator. The report represented the opinion of one

expert that the On Scene Coordinator had the

authority to accept, reject, or balance against other

considerations.

In addition, U.S.F.&G. does not suggest that the

On Scene Coordinator's decision involved any violation

of a superior’s instructions. CERCLA and the EPA give

the On Scene Coordinator broad responsibility to

formulate the best means of achieving the statute's

goals. Thus, even if the On Scene Coordinator's

decision could be classified as operational, it was

nevertheless discretionary. The timing decision was

one that called for a policy judgment.

U.S.F.&G. cites two Supreme Court cases in

response to the analysis set forth above: Indian

Towing Co. v. United States, 350 U.S. 61, 76S.Ct. 122

(1955) and Rayonier, Inc. v. United States, 352 U.S.

315, 77 S.Ct. 374 (1957). In Indian Towing, the

Supreme Court held that the Government could be

held liable for the Coast Guard's negligence in

as

15a

operating a lighthouse. In Rayonier, the Court held

that the Government could be held liable for the

negligence of Forest Service employees in fighting fires

originating on federal lands. But these cases do not

control here because neither one involves an

interpretation of the discretionary function exception.

The Court in Varig distinguished Indian Towing

because the Government in that case conceded that the

discretionary function exception did not apply, and

argued instead (to no avail) that the Coast Guard was

protected against liability in the operation of a

lighthouse because it was a “uniquely governmental

function.” 467 U.S. at 812, 104 S.Ct. at 2763. The

Varig Court distinguished Rayonier because Rayonier

did not discuss or rely upon the discretionary function

exception; rather, it relied on, and overruled Dalehite's

reading of, 28 U.S.C. § 2674, which allows recovery

against the United States “in the same manner and to

the same extent as a private individual under like

circumstances.” Rayonier held only that under the Act

the United States cannot claim immunity from liability

for the negligence of its fire fighters on the ground the

local governments generally enjoy such immunity for

the negligence of their fire fighters. See Varig, 467 U.S.

at 813n.10, 104S.Ct. at 2764 n.10. We must adhere to

the Court's admonition in Varig that the principles

developed in Dalehite still govern the interpretation of

the discretionary function exception. Cf. Mahler v.

United States, 306 F.2d 713, 723 n.13 (3d Cir. 1962)

(decided before Varig, stating that Dalehite’s approach

to analyzing the discretionary function exception

survived Indian Towing and Rayonier).

IV.

Because the discretionary function exception bars

recovery against the United States in this case, the

decision of the district court will be reversed.

l6a

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

(A.O. U.S Courts. G.M.C. Printing, Phila., Pa. 215-568-4264)

17a

THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UNITED STATES FIDELITY AND

GUARANTY COMPANY,

Civil No. 84-1255

Plaintiff, :

V. s

UNITED STATES OF AMERICA. :

Defendant. :

JUDGMENT

This action came on for trial before the Court, the issues

having been duly tried and decisions having been duly

rendered. Accordingly, pursuant to this Court's Opinion

and order of July 3, 1986, as amended by Orders filed on

July 3, 1986 and on August 7, 1986, the Opinion and

Order of October 24, 1986, and the Stipulation Pertaining

to Damages filed by the parties,

IT IS HEREBY ORDERED AND ADJUDGED that the

Plaintiff, United States Fidelity & Guaranty Company,

recover from the Defendant, United States of America, the

sum of $91,374.75.

Done this 17th day of November, 1986, at Williamsport.

Pennsylvania.

UNITED STATES DISTRICT JUDGE

PILED

Williamsport, Pa.

Nov. 17, 1986

DONALD R. BERRY, Clerk

18a

OPINION

MUIR, District Judge.

I. Introduction

On September 20, 1984, the United States Fidelity &

Guaranty Company (hereafter “U.S.F. & G’) filed the

complaint in this action against the United States of

America seeking recovery pursuant to the Federa! Tort

Claims Act. 28 U.S.C. §2671, et seq. Recovery was sought

for losses which occurred as a result of a release of an acid

cloud on March 23, 1982 during the clean-up of a tank

containing hazardous chemical waste at the site of Drake

Chemicals, Inc. in Lock Haven, Pennsylvania. On February

13, 1986, an amended complaint was filed adding a claim

for $5,000 of personal injury losses which occurred as a

result of another release of a sulphuric acid cloud from the

same tank. On February 28, 1986. the United States filed a

motion to dismiss or for summary judgment based upon its

assertion that the challenged acts of the Environmental

Protection Agency (hereafter “EPA”) fall within the dis-

cretionary function exception to the Federal Tort Claims

Act, 28 U.S.C. § 2671, et seq. By opinion dated April 16,

1986, this Court denied the motion, ruling that the dis-

cretionary function exception does not apply in this case.

The case was bifurcated for trial between the issues of

liability and damages and the liabitity phase of the case was

tried to the Court from June 2 through 6, 1986. The Court's

findings of fact. discussion, and conclusions of law as to

liability follow.

II. Findings of Fact.

The parties submitted undisputed findings of fact which

have been adopted by this Court. The letter “U” for

“Undisputed” follows such findings.

1. Plaintiff. the United States Fidelity & Guaranty

Company (hereinafter “U.S.F. & G.”) is a corporation

engaged in the insurance business. (U)

2. The Defendant is the United States of America,

acting through its Environmental Protection Agency (here-

inafter “EPA”). (U) -

3. At all times material to this action. U.S.F. & G. was

the insurer of the OH Materials Handling Company, a

Ee ee

19a

division of KBI, Inc. (hereinafter referred to as “OH Mat-

erials’), pursuant to a liaoility insurance policy issued by

U.S.F. & G. to KBI, Inc. (U)

4. OH Materials, as relevant to this litigation, is engaged

in the business of containing, abating, and cleaning up

hazards posed by chemical waste. (U)

5. Drake Chemicals, Inc. is a corporation which operated

a chemical manufacturing facility in Lock Haven, Penns-

ylvania, from 1961 to August, 1981. (U)

6. In or around August, 1981, Drake Chemicals, Inc.

ceased operations and filed a petition in bankruptcy. (U)

7. At the time it discontinued its operations, Drake

Chemicals abandoned its manufacturing site, leaving num-

erous chemicals, drums, and reaction vessels at the site

(hereinafter referred to as “Drake site”). (U)

8. The Pennsylvania Department of Environmental Re-

sources (hereinafter “Department of Environmental Re-

sources’) inspected the Drake Chemicals site and deter-

mined that it posed a threat to the public health and the

environment. (U)

9. On January 5, 1982, the Department of Environ-

mental Resources ordered Drake Chemicals to clean up the

Drake site. (U)

10. Drake Chemicals responded to the orders of the

Department of Environmental Resources by advising that it

lacked the financial resources to clean up the site. (U)

11. In February of 1982, the Department of Envir-

onmental Resources requested that EPA consider the

Drake site for emergency funding of a cleanup under the

Comprehensive Environmental Response, Compensation,

and Liability Act of 1980 (hereinafter “the Act”), 42 U.S.C.

§9601 et seq. (U)

12. The Act is a federal program which provides

authority to the federal government to clean up sites which

it has determined pose an imminent threat of harm or

endangerment to the public health and the environment.

(U)

20a

13. Cleanups under the Act of sites such as the Drake

site are administered by EPA. (U)

14. The Act authorizes removal and remedial actions

as responses to potential hazards. (U)

15. “Removal” actions under the Act are relatively

short-term responses and include “immediate” and “plan-

ned” removals. (U)

16. The Drake Chemicals site was considered by EPA

for an immediate removal action under the Act. (U)

17. Immediate removal actions are undertaken only ifa

response is needed within hours or days to prevent or

mitigate significant harm to human health or the environ-

ment and such actions will not otherwise be provided on a

timely basis. (U)

18. Generally, immediate removal actions cannot con-

tinue for longer than 6 months or exceed $1,000,000 in

costs unless a special exception is given by the Admin-

istrator of EPA. (U)

19. EPA's participation in removal actions is controlled

by an On Scene Coordinator. (U)

20. The On Scene Coordinator directs federal removal

efforts financed by the Act and coordinates all other efforts

at the scene of the removal activity. (U)

21. Federally funded removal actions are performed by

independent contractors selected by the On Scene Co-

ordinator from a list of contractors which EPA has deter-

mined have the resources and experience to carry out the

removal. (U)

22. In February of 1982, the Department of Environ-

mental Resources and EPA inspected the Drake site and

observed over 3,000 drums, and various reactors and

tanks, containing hazardous chemicals. (U)

23. Many of said drums, reactors and tanks were in a

deteriorating condition. (U)

24. Previous investigations at the Drake site had re-

vealed ground water contamination and poor air quality in

the area

Z2la

25. After these investigations, the EPA, through its On

Scene Coordinator, concluded that there existed at the

Drake site an imminent threat of fire and explosion as well

as a threat of direct public contact with hazardous chemicals.

all of which constituted a severe threat to the public health.

(U)

26. 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. (U)

27. Areas to the south, southeast, and east of the Drake

site are sparsely populated.

28. The EPA’s On Scene Coordinator issued oral and

written demands to the owners of Drake Chemicals, Inc. to

clean up the site.

29. When the owners of Drake Chemicals refused to

clean up the Drake site, the On Scene Coordinator re-

quested approval from the EPA Office of Emergency and

Remedial Response to undertake an immediate removal

action. (U)

30. On February 26, 1982, the On Scene Coordinator

received authorization to undertake immediate removal

activities at the Drake site. (U)

31. Thereafter, in conjunction with the Department of

Environmental Resources, the EPA began emergency re-

moval activities which included the removal and securing of

all materials and conditions on the Drake site that could

pose an imminent hazard. (U)

32. The Drake Chemicals site was one of the most

hazardous sites the EPA has undertaken to clean up to this

date under the Act’s program.

33. An Emergency Response Team of the EPA was

involved and on site during major portions of the removal

activities at the Drake site. (U)

34. The Emergency Response Team provided technical

and scientific assistance to the On Scene Coordinator. (U)

35. Also involved in the cleanup of the Drake site was a

Technical Assistance Team which provided logistical and

22a

technical support to the EPA. (U)

36. The On Scene Coordinator utilized the Technical

Assistance Team to obtain information from outside sources

on chemical! waste disposal methods.

37. On February 28. 1982. the EPA, through its On

Scene Coordinator, signed an agreement with OH Materials

captioned “Notice to Proceed with Emergency Response to

'Wazardous Substance Release” (hereinafter “Notice to

Proceed ). (U)

38 The EPA hired OH Materials as its prime contractor

at the Drake site as a result of OH Materials’ expertise in

chemical waste disposal techniques

39. The Notice to Proceed is a preliminary contractual

instrument which represents a time and materials contract

whereby payment for contractor services is made on the

basis of direct labor hours at fixed hourly rates and mat-

erials, subcontractor, and travel costs. (U)

40. Pursuant to the Notice to Proceed the On Scene

Coordinator retained responsibility for determining what

would be done. the means and methods employed in

disposing of waste, and the contractor's expenditures for

material and manpower.

41. The Notice to Proceed provided that OH Materials

was to furnish the necessary personnel, materials, services.

facilities and otherwise do all things necessary for or

incident to the performance of the work set forth in the

“Scope of Work” contained in the Notice to Proceed.

42. The On Scene Coordinator was responsible for

directing and monitoring the activities of OH Materials at

the Drake Site.

43. The duties of the On Scene Coordinator at the

Drake site included:

A. Making assignments of major tasks to the various

contractors on site:

B. Consulting with independent experts such as

private agencies. Emergency Response Team. Penns-

ylvania Department of Environmenta! Resources and

23a

the Technical Assistance Team regarding technica!

solutions to the cleanup problem.

C. Approval of task execution.

D. Acceptance of task completion.

E. Cost control.

44. Dr. Joseph P. Lafornara, at the time acting chief of

the Analytical Support Section, EPA Emergency Response

Team, was at the Drake site on March 3 through March 5,

1982, and on March 30, 1982.

45. Andre P. Zownir, EPA Emergency Response Team

environmental engineer, was at the Drake site on March 3-

5, 8-12, and 17-19, 1982. (U)

46. Bruce Potoka, EPA environmental scientist, was at

the Drake site on March 3-5, 8-11, and 15-20, 1982. (U)

47. Thomas Massey, EPA On Scene Coordinator, was

at the Drake site on March 2-5, 8-11, and 17, 1982. (U)

48. Benton Wilmouth, EPA On Scene Coordinator,

was at the Drake site on March 3-5, 9-12, and 15-24, 1982.

(U)

49. Jack Downey, EPA On Scene Coordinator, was at

the Drake site March 4, 5, 8-10, 21-24, 1982 (U)

50. All actions of EPA, referenced herein, were per-

formed by EPA employees, acting within the scope of their

respective employment. (U)

51. The On Scene Coordinator assigned to the Emer-

gency Response Team the task of preparing at site safety

plan.

52. The On Scene Coordinator at the Drake site was

responsible for coordination of the implementation of the

site safety plan to ensure that workers and regulatory

personnel conducted their operations in a safe manner.

53. Gne of the most serious hazards existing at the

Drake site was a tank containing oleum. (U)

54. Oleum is the common name for HzSQ:+SO.. It is

concentrated sulfuric acid with the sulfate radical dissolved

in it at 30-70% levels. (U)

55. Oleum is extrernely reactive with a wide range of

24a

compounds and is extrernely sensitive to moisture, pro-

ducing a fuming reaction caused by the reaction of water

and the sulfate radical. (U)

56. The oleum on the Drake site was stored in a carbon

steel tank having a total capacity of approximately 5,000

gallons. (U)

57. The tank was an old railroad tank car which had its

wheels removed.

58. When oleum is stored in a carbon steel tank, the

sulfate radicai will slowly react with the tank’s side walls,

producing iron sulfate salts which fall to the bottom of the

tank as a sludge. (U)

59. The oleum tank was sitting on two concrete ped-

estals. (U)

60. The pedestals were approximately eight feet tall.

61. The oleum tank was over seven feet tall from the

bottom of the tank to the top of the manway (aperture).

62. At the time of commencement of the removal

activities at the Drake site the oleum tank was venting

directly into the atmosphere and posed a major threat of

fire. explosion or release of pollutants into the air. (U)

63. The On Site Coordinator determined that before

the hazard posed by the oleum tank could be addressed,

the amount of materials contained in the tank had to be

assessed. (U)

64. On or before March 8, 1982, the On Scene

Coordinator assigned OH Materials the task of determining

the quantity of oleum contained within the oleum tank. (U)

65. OH Materials performed this task through a method

known as “sticking” where a dipstick or rod is inserted into

the material to determine its depth. (U)

66. Visual assessment of the contents of the oleum

tank was hampered by the fumes emanating from the tank.

(U)

67. Accurate assessment of the contents of the oleum

tank was difficult because the tank was on pedestals.

68. OH Materials personnel reported to the On Scene

25a

Coordinator that the tank contained four inches of sludge

and two inches of liquid oleum. (U)

69. It was estimated that the tank contained approx-

imately 110 gallons of product. (U)

70. The On Scene Coordinator knew of the method

employed in assessing the contents of the oleum tank.

71. The On Scene Coordinator was advised by OH

Materials personnel that the tank could possibly contain

sludge build-up at the ends of the tank which would mean

that the actual volume of oleum in the tank was greater than

the estimated volume.

72. The 110 gallons of oleum initially estimated to be

contained within the tank was a sufficient quantity of oleum

to produce a substantial release of acid, posing hazards to

the public.

73. The On Scene Coordinator, Environmental Re-

sponse Team personnel, Technical Assistance Team per-

sonnel, Department of Environmental Resources person-

nel, and OH Materials personnel discussed appropriate

methods of disposing of the oleum. (U)

74. Thomas Massey, Dr. Joseph Lafornara, and Andre

Zownir were EPA employees involved in decision making

concerning methods to be employed in neutralization and

disposal of the contents of the oleum tank on the Drake site.

(U)

75. OH Materials personnel suggested to the On Scene

Coordinator that the oleum tank be removed from its

pedestals prior to neutralization. (U)

76. OH Materials personnel suggested to the On Scene

Coordinator that the oleum tank be removed from the site

to a remote location prior to neutralization of its contents.

(U)

77. OH Materials personnel also suggested as another

option that the oleum tank be placed on the ground at the

rear of the Drake site prior to neutralization.

78. The On Site Coordinator rejected these recom-

mendations. (U)

26a

79. In considering OH Materials suggestion that the

tank be removed from the pedestals, the On Scene Coor-

dinator considered the potential risks posed by an attempt

to remove the tank.

80. The On Scene Coordinator considered factors

such as the questionable stability of the tank and that no

assurances could be given by OH Materials that the tank

would not rupture or explode either during the removal

process or during the attempt to relocate the tank.

81. Because of its location and the lack of specific

information on the tank's age or previous use, it was difficult

readily to determine the structural integrity of the tank or to

guage its stability on the pedestals.

82. The On Scene Coordinator ordered no investiga-

tion into the structural integrity of the oleum tank before

rejecting OH Materials’ recommendation of removing the

tank from its pedestals prior to neutralization.

83. The risk of moving the tank by crane could have

been minimized by placing the tank ina cradle while it was

being lifted off its pedestals.

84 The oleum tank could then have been placed ina

box ona truck designed to contain any oleum released from

the tank during transportation.

85, The oleum tank could then have been placed at the

rear of the site in a pre-dug ditch and rotated so that its

manway (aperture) was facing in a generally horizontal

position.

86. The tank could then have been covered with dirt,

leaving the manway exposed, so as to minimize any

movement of the tank during neutralization.

87 After assessing the risks and benefits of removing

the tank from the pedestals, the On Scene Coordinator

determined that it was safer to neutralize the tank on the

pedestals. The following are some of the reasons why the

On Scene Coordinator rejected OH Materials recommen-

dation of moving the tank:

(a) There was a possibility that the tank would rupture or

2/a

explode during its removal and relocation on-site,

(b) the soil at the rear of the site, the area OH Materials

suggested as the appropriate place for neutralizing the

oleum tank. was unstable since it was believed to contain

filled-in abandoned lagoons of chemicals:

(c) the area at the rear of the site was close to the

American Chemical! Plant:

(d) there was a possibility that the tank would rupture or

explode during its relocation off-site and cause serious

harm to the surrounding population and property.

88 On or before March 8, 1982, the On Scene

Coordinator directed that the oleum be neutralized in

place. (U) a

89. Once the decision was made to neutralize the

oleum tank on its pedestals, the On Scene Coordinator

assigned OH Materials the task of recommending a pro-

cedure for the neutralization.

90. OH Materials recommended to the On Scene

Coordinator that a proper procedure for neutralizing the

tank was slowly to drain all of the liquid oleum from the tank

through the bottom yalve into a container of water. This

process would allow the neutralization of the oleum in a

controlled fashion. Following completion of the draining of

the liquid oleum, the sludge could then be neutralized by

slowly adding water to the tank and aliowing it to react with

the oleum-impregnated sludge. The tank could then be

drained following the completion of the chemical reaction.

This process would be repeated until all of the sludge was

neutralized.

91. The On Scene Coordinator, Ernergency Response

Team personnel. Technical Response Team personnel.

Department of Environmental Resources personnel, and

OH Materials personne! discussed the neutralization pro-

cedures suggested by OH Materials.

92. The On Scene Coordinator approved the neutral-

zation method suggested by OH Materials and authorized

OH Materials to proceed with the neutralization

28a

93. On March 4, 1982, Jay E. Ort, a hydrogeologist

employed by the Commonwealth of Pennsylvania, issued a

report entitled “Recommendations on Meterological Con-

trols at Drake Chemicals.”

94. In that report, Mr. Ort recommended that the more

hazardous operations at the Drake site, such as those

involving the oleum, should be done with a north wind in

excess of 3 knots on a bright sunny day.

95. EPA was in possession of Mr. Ort’s report and

recommendations prior to March 15, 1982.

96. EPA was on notice of the contents of Ort’s report

and recommendations prior to March 15, 1982.

97. The method employed in neutralizing the oleum

initially involved draining all liquid oleum from the tank

through a valve at the bottom of the tank. (U)

98. Then water was added to the tank, half a cup or less

at a time. (U)

99. The free-flowing liquid was then allowed to drain

out of the valve at the bottom of the tank. (U)

100. The free-flowing liquid was allowed to drain in a

controlled quantity into a tank of water, producing neutral-

ization of the oleum. (U)

101. A thimbleful of the oleum draining from the tank

would react with the water in the tub below the tank with

sufficient force so as to shake the tub and its contents

weighing over 4,000 Ibs.

102. On March 15, 1982, while this operation for

oleum neutralization was being conducted, a packing nut

on the valve through which the oleum was draining came

loose. (U)

103. As a result of the loosening of the packing valve,

an uncontrolled flow of oleum commenced from the valve

into the water tub below.

104. Approximately one quart to one gallon of oleum

dropped into the water tub below the oleum tank.

105. OH Materials personnel immediately tightened

the valve, stopping the flow of oleum into the water. (U)

29a

106. The oleum hitting the water tub produced a dense

cloud of sulfur trioxide, sulfuric acid droplets, mist, and

aerosol. (U)

107. The acid cloud migrated off-site. (U)

108. Five Pennsylvania Department of Transporta-

tion workers working on Second Avenue in Lock Haven

were exposed to the acid cloud on March 15, 1982. (U)

109. The Pennsylvania Department of Transportation

workers suffered respiratory distress.

110. Following the release of March 15, 1982, the On

Scene Coordinator, OH Materials, and others discussed the

cause of the release.

111. Following the acid release of March 15, 1982,OH

Materials did not state any objections to the EPA regarding

the continued neutralization of the oleum tank in the

manner originally approved by the the On Scene Coor-

dinator.

112. It was concluded that the neutralization activities

previously used should continue.

113. Following the acid release of March 15, 1982, the

On Scene Coordinator instructed OH Materials to continue

oleum neutralization in the manner originally approved by

the On Scene Coordinator. (U)

114. Inthe regular course of the EPA’s business on the

Drake site, the On Scene Coordinator regularly prepared

Pollution Reports documenting the situation, actions taken

and future plans for the removal action. (U)

115. The Pollution Reports were prepared at or about

the time of the events they record. (U)

116. Pollution Report No. 13, dated March 16, 1982,

states: “If conditions are acceptable continue with work on

Oleum tank No. 26.” (U)

117. Pollution Report 14, dated March 17, 1982,

states: “Work on Oleum tank #26 if gas line has been

repaired.”

118. After March 15, 1982, OH Materials continued

gradually to add water to the oleum tank. (U)

30a

119. The product was then drained through the bottom

of the tank. (U)

120. While the tank was being filled with water, fire-

men from the Lock Haven Fire Department directed fire

hoses on the tank to cool the tank as the neutralization

process was being performed. (U)

121. Personnel of the Department of Environmental

Resources monitored air quality during the neutralization

activities on the oleum tank.

122. When evidence of reaction between water and the

contents (i.e. fuming) ceased. the tank was filled half-full of

water. (U)

123. The tank was then allowed to stand for six hours,

with no reaction being noted. (U)

124. The tank was then completely filled with water

and allowed to stand overnight. (U)

125. The contents of the tank were then drained

through the valve at the botom of the tank. (U)

126. The valve at the bottom of the tank had become

clogged with sludge on previous days.

127. The EPA was aware that the valve had become

clogged with sludge on previous days.

128. On March 23, 1982, drainage ceased because of

sludge blocking the valve at the bottom of the tank. (U)

129. To clear the sludge from the valve and allow

drainage to continue, OH Materials personnel inserted rods

through the manway at the top of the oleum tank. (U)

130. The rods were inserted with the knowledge of the

EPA.

131. Following this insertion of rods through the man-

way, on March 23, 1982, at 3:57 P.M., a steam explosion

occurred in the oleum tank. (U)

132. A large cloud of sulfer trioxide and sulfuric acid, in

the form of droplets, mist and aerosol, vented out of the

manway at the top of the tank. (U)

133. The release occurred over approximately a 15

second span. (U)

3la

134. The release was punctuated by three distinct

explosions. (U)

135. The cloud of sulfer trioxide and sulfuric acid rose

approximately 40 to 50 feet into the air.

136. The oleum tank bounced approximately one inch

off its pedestals several times during the course of the

explosive release of March 23, 1982.

137. The oleum tank displayed no apparent damage

from the explosion.

138. South-southwest winds were prevailing on March

23. 1982. blowing generally north-northeast. (U)

139. Blown by the wind, the acid cloud released from

the oleum tank migrated off site into the City of Lock

Haven.

140. The acid cloud of March 23, 1982, caused sur-

face damage to over 500 motor vehicles, damaged an

airplane, and damaged several buildings. (U)

141. On behalf of OH Materials, U.S.F. & G. paid

claims totalling $133,296.27 arising out of the release of

the acid cloud of March 23, 1982.

142. USF. & G. hired Crawford and Company to

adjust the claims arising out of damage caused by the acid

cloud of March 23, 1982.

143. The hiring of Crawford and Company facilitated

the prompt settlement of property damage claims arising

out of the acid release incident of March 23, 1982.

144. On March 24, 1982, the On Scene Coordinator

met with officials from the Department of Environmental

Resources, and agreed that work prone to release of vapors

would be done only on good dispersion days between

10:00 A.M. and 5:30 P.M., and on days when the wind was

not blowing toward the City. (U)

145. Following the incident of March 23, 1982, the

interior of the oleum tank was inspected through the use of

mirrors and a camera. (U)

146. Visual inspection and photographic examination

of the inside of the tank showed a residual! crust line

32a

approximately halfway up the side of the tank. (U)

147. Based on the acid release of March 23. 1982 and

the investigation conducted subsequent to the release. it

can reasonably be concluded that the tank was roughly

one-half full of 65% oleum. (U)

148. It is estimated that in the March 23, 1982 release

incident, approximately 2.000 gallons of oleum reacted

with 2,000 gallons of water to produce 4.000 gallons of

80% sulfuric acid. (U)

149. In the March 23, 1982 release incident. approx-

imately 2,000 gallons of 80% sulfuric acid were vented

through the manway of the tank.

150. Removing the oleum tank from the pedestals on

which it sat and placing it on the ground at the rear of the

site prior to neutralization would have had the following

advantages over performing the neutralization with the

tank on its pedestals:

A. The contents of the tank could have been more

accurately and easily measured:

B. The contents of the tank could have been removed

manually more easily prior to neutralization:

C. Fire hoses could have been more effectively

utilized to hose down any acid clouds released assuming

that the firemen would utilize their hoses in the event of

an explosion of the magnitude involved in the March

23. 1982 incident:

D. Rotating the tank roughly 90 degrees along its

longitudinal axis, as could have been done if the tank

had been placed on the ground, would have diminished

the amount of the sludge in the tank coming in contact

with the water placed into the tank. thereby diminishing

any reaction between water and sludge.

151. The risk to the surrounding population of the

oleum neutralization operation would have been reduced

by conducting the operation only in periods when north

winds prevailed

152. The United States EPA knew or should have

33a

known that the work of OH Materials at the Drake site

involved a special danger to the public, inherent in the

work, and was likely to create during its progress a peculiar

risk of physical harm to the public unless special pre-

cautions were taken.

153. U.S.F. & G. timely filed a claim with the EPA,

seeking administrative settlement in the amount of

$152,291.25, pursuant to the provisions of the Federal

Tort Claims Act, 28 U.S.C. §1346(b) and 2671, et seq. (U)

154. That claim was rejected by decision dated March

21, 1984. (U)

155. At no time did U.S.F. & G submit a claim to the

EPA for a precise amount of damages regarding the per-

sonal injuries which occurred as a result of the acid cloud

release of March 15, 1982.

III. Discussion

A. The Discretionary Function Exception.

The United States argues that the conduct of the EPA in

cleaning the oleum tank was a discretionary function and,

therefore, the United States cannot be held liable under the

Federal Tort Claims Act, 28 U.S.C. §2671, et seq., for any

negligence which may have been involved in the cleanup of

the Drake Site. We previously considered this argument in

conjunction with a motion for summary judgment and by

an opinion dated April 16, 1986 held that the discretionary

function exception does not apply in this case. We refer the

reader to that opinion for our analysis of the issue. After

hearing the evidence, our view has not changed.

The decision by the United States to undertake to clean

up the Drake site would fall within the discretionary

function exception; however, this is not the decision which

is being challenged in this case. The decision challenged

involves the selection of the method used to remove the

hazard posed by a tank containing oleum, a substance

highly reactive to water. Perhaps the United States could

have ignored the Drake site, but once it chose to clean up

the hazardous wastes there. its decisions regarding the

34a

procedures to be followed were not of the nature and

quality that Congress intended to shield from tort liability.

United States vs. S.A. Empresa de Viacao Aerea Rio

Grandense (Varig Airlines), 104 S. Ct. 2755 (1984). The

United States argues that it cannot be held liable for any

incidents which occurred as a result of the initial decision to

clean up the Drake site. The results of such a broad

interpretation of the discretionary function exception could

lead to results which Conaress did not intend. The United

States must be held accountable for the acts of its workers

who carry out tasks on an operational level. The On Scene

Coordinator's role in the cleanup operation was such that

his conduct is not excluded from a claim brought pursuant

to the Federal Tort Claims Act.

B. The Acid Cloud Release of March 15, 1982.

Five Pennsylvania Department of Transportation em-

ployees were injured as a result of the release of a cloud of

sulphuric acid on March 15, 1982 during the neutraliza-

tion of the tank containing oleum. U.S.F. & G. is sub-

rogated to the personal injury claims of these workers and

argues that the United States’ negligence was the cause of

the injuries. The United States asserts that this Court lacks

jurisdiction over the personal injury claims because U.S F

& G. failed to file an administrative claim which complied

with the Federal Tort Claims Act, 28 U.S.C. §2675. This

section provides that

(a) An action shall not be instituted upon a claim

against the United States for money damages for... per-

sonal injury...caused by the negligent or wronaful act or

omission of any employee of the Government... unless

the claimant shall have first presented the claim to the

ippropriate Federal agency,

(b) Action under this section shall not be instituted

for any sum in excess of the amount of the claim

presented to the federal agency. except where the

1;

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rease mount is Dased up Newiy iscovers

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35a

presenting the claim to the federal agency, or upon

allegation and proof of intervening facts, relating to the

amount of the claim

28 U.S.C §2675

The purpose of requiring tort claims to be filed first with the

appropriate federal agency is to lessen the burden upon the

federal courts by permitting the agencies to settle such

claims pursuant to 28 U.S.C. §2672. Title 28 of the Code

of Federa! Regulations at §14.2(a) provides that

For purposes of the provisions of 28 U.S.C. §2401(b)

and 2672. a claim shall be deemed to have been

presented when a Federal agency receives from a

claimant...an executed Standard Form 95 or other

written notification of an incident, accompanied by a

claim for money damages in a sur certain for injury to

or loss of property. personal injury, or death alleged to

have occurred by reason of the incident. (emphasis

added)

It is undisputed that on or about June 14, 1982,U.S.F.&G

submitted a Standard Form 95 which claimed damages

solely for the accident of March 23, 1982. By letter dated

January 11, 1983. U.S.F. & G. first notified the United

States of the five personal injury claims arising out the

March 15. 1982 accident. The specific sums for damages

claimed by USF. & G. in its correspondence with the

United States did not include the $5,000 currently being

aimed for these personal injuries. It is undisputed that at

no time did U.S.F. & G. submit a claim to the EPA for a

precise dollar amount of damages regarding the personal

njuries. U.S.F. & G. did not comp!y with the requirements

of 28 CFR. §14.2 and 28 U.S.C. §2675; therefore, this

Court lacks jurisdiction over the per#onal injury claims. 28

USC. §2675(a): Bialowas vs. United States, 443 F. 2d

1047 (3d Cir. 1971

USF &G aarues that there is ¢recedent for permitting

y mt ; , , , . ™ + +}

Teese ~ t 4 iT\ iaill iT) ( nyuncti yi] VW ‘

ry roiied at

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36a

administrative level. We have reviewed the authorities cited

by U.S.F. & G. and find that none support U.S.F. & G.’s

argument. In the case of Tucker vs. United States Postal

Service, 676 F.2d 954 (3d Cir. 1982) the Court of Appeals

held that a Form 95 was sufficient for purposes of the

Federal Tort Claims Act despite the fact that Plaintiff failed

to forward itemized medical bills. The facts in Tucker are

quite different from those in this case because in Tucker the

Plaintiff included the amounts claimed for personal injury

and property damage in her Form 95. As stated above.

U.S.F. & G. has not submitted an administrative claim

containing the amounts demanded for personal injuries

arising out of the March 15, 1982 accident. U.S.F. & G. has

failed to set forth facts sufficient to establish that there has

been newly discovered evidence or intervening facts which

entitle it to have the personal injury claims heard by this

Court pursuant to 28 U.S.C. § 2675(b). We will enter an

order dismissing without prejudice for lack of jurisdiction

the personal injury claims asserted by U.S.F. & G.

C. The Acid Cloud Release of March 23.1982. —

U.S.F. & G. asserts that the United States is liable for the

property damage which occurred as a result of the acid

cloud release of March 23, 1982 based upon the theory of

negligence. In order to maintain an action in negligence,

the Plaintiff must prove the existence of a legal duty flowing

from the Defendant to the Plaintiff. a bre ach of that duty,

and a causal connection between the breach and the injury.

Morena vs. South Hills Health System, 462 A.2d 680, 501

Pa. 634 (1983). The United States owed the public the duty

of reasonable care under all the circumstances. and reason-

able care where a hazardous activity is involved is a higher

degree of care than would be required in the performance

of ordinary activities. Koelsch vs. The Philadelphia Com-

pany. 152 Pa. 355. 362,25 A. 522 quoted in Maternia vs.

Pennsylvania Railroad Company, 56 A. 2d 233, 235. 358

Pa. 149, 153 (1938).

U.S.F. & G. argues that the United States breached its

37a

duty of care in three respects. First, U.S.F. & G. asserts that

the United Staies was negligent in its failure to accept OH

Materials’ recommendation that the oleum tank be re-

moved from its pedestals before neutralization was at-

tempted. The relevant question is whether or not the EPA's

decision to add water to the tank while it was on pedestals

was reasonable based upon information known io the EPA

at the time the decision was made. The EPA relied upon OH

Materials’ estimate that there were 110 gallons of oleum in

the tank. We now know that there were approximately

2.000 gallons of oleum in the tank. OH Materials did not

give OH Materials any reason to believe that its estimate of

110 gallons was incorrect. OH Materials is a company

specializing in the cleanup and disposal of hazardous

waste. In our view it was reasonable for the On Scene

Coordinator to rely on OH Materials’ estimate.

Based upon the estimate that the tank contained 110

gallons of oleum and faced with the options of neutralizing

it either off site, at another location on site or on its

pedestals, the On Scene Coordinator chose to neutralize

the tank on its pedestals. The tank car was old and could

have ruptured in transit, causing a more serious accident

than the one which occurred. The presence of snow and ice

on the site increased the risk of a serious hazard if the tank

were to rupture. The on site location to which OH Materials

proposed to move the tank was in close proximity to

another chemical plant and if a fire had commenced during

the neutralization of the tank there was a risk that the other

chemical plant could have been affected, thus causing

greater chemical hazards to the public. It was unclear that

the ground at the site OH Materials proposed to use was not

weakened by the presence of abandoned chemical pits. For

these reasons, the On Scene Coordinator's decision not to

attempt to move the tank before neutralizing it was reason-

able.

U.S.F. & G. has presented evidence that it would have

been safer to perform the neutralization with the tank on its

38a

side at a location on the ground where bulldozers and fire

hoses could have more easily contained any release that

might have occurred. At this time there is more information

than there was at the commencement of the cleanup of the

Drake site in support of placing the tank on the ground

before neutralization. For example. we now suspect that

the tank could have withstood the stress of being moved by

crane and truck because it withstood the force of the

explosions of March 23, 1982. However, information now

available to the EPA is not relevant to the reasonableness of

the EPA's choice. This choice was reasonable, based upon

information available at the time the choice was made.

Even if this Court had concluded that the On Scene

Coordinator's choice of the method of neutralization was

negligent, we would not find the EPA liable because U.S.F

& G. has failed to establish a causal connection between the

decision not to move the tank and the accident which

occurred. Negligent conduct is a cause of injury if it is a

substantial factor in bringing about the injury. Restatement

(Second) of Torts §431; Whitner vs. Von Hintz, 437 Pa.

448. 263 A.2d 889 (1970). Plaintiff need not show with

absolute certainty that the negligence caused the injury

Rosario vs. American Export-Isbrandtsen Lines, Inc., 395

F. Supp. 1192-1210 (E.D. Pa. 1975). The element of

causation would be met if Plaintiff showed a substantial

possibility that the harm could have been avoided and that

the negligence eliminated the possibility of avoiding the

harm. ID. USF. & G_ has failed to show that there is

substantial possibility or even that it is more likely than not

that there would have been no release of an acid cloud had

the oleum tank been taken off the pedestals. One of the

U.S.F. & G's witnesses testified in answer to this Court's

+}

questions that releases during hazardous waste cleanups

, ' ' ,

are common. The tank contained a large quantity of oleum

Siu lge which created 1 Very volatile situation. | S | & GG. Ss

expert witness, Samuei iInsala testified inresponse t

39a

would not have exploded had the tank been removed

Removing the oleum frorn the tank involved such great

danger that it is entirely possible an accident of equal or

greater seriousness might have occurred if the tank had

been moved: therefore, the causal connection between acts

asserted to be negligent and the occurrence of the accident

has not been proved

U.S.F. & G's second argument is that the United States

was negligent in continuing after the March 15, 1982

accident to neutralize the oleum by adding water to the

tank. It is unclear from the evidence why the same method

of neutralization was used after the March 15, 1982

accident as was used before the accident. Nor did the

evidence clarify whether once water had been added to the

tank it was too late to commence the use of a different

method of neutralization. There was no evidence that after

March 15, 1982 accident OH Materials warned or advised

the United States to try a different method of neutralization

such as adding sulfuric acid or removing the tank from its

pedestals. Based upon the evidence presented at trial, we

cannot conclude that the United States was unreasonable

in continuing to direct the neutralization of the tank in the

same method used both before and after the March 15

1982 accident

U.S.F. & G's third argument 1s that the United States

breached its duty of care by conducting the neutralization

of the tank without regard to wind conditions. The area to

the north, west and northeast of the Drake site was much

more heavily populated than the area to the south, south-

east and east of the site It is undisputed that the wind was

blowing in the direction of the City of Lock Haven on March

23, 1982 Had the wind been blowing in the opposite

lirection on that date much less property damage would

have occurred. In conducting a cleanup of materials whic!

suld explode and

reiease Nazardous chemicals into the

; , ‘

17 the entities responsib t yy tne j ‘ '! in have the tut

, ‘4 ;

; ’ > \ ¥ ; . ' ; . ; ¢ wr

Ke Ml TeEASONADL t Mul : 1s ’ ‘ lt

40a

safety. One of the most basic of these precautions ‘ts to

monitor the direction of the wind and to perform oper-

ations which could result in the release of hazardous

materials into the air when the wind is blowing away from

heavily populated areas. There was no expert testimony

regarding whether it would be safe to perform such oper-

ations when there is no wind and we will not speculate on

this point. It is conceivable that under certain circum-

stances the hazard posed by a tank would be so great that

removal operations would have to proceed immediately

and without regard to wind conditions, but this case did not

present such a situation. There is no evidence that the

neutralization operations would have been more danger-

ous had the addition of water, draining of the tank, un-

clogging of the valve, and other procedures involved in the

neutralization been delayed so as to be performed on days

with favorable wind conditions.

It could be argued that the parties did not have the duty

to take wind into account in directing the neutralization of

the oleum tank. because at the commencement of the

neutralization the quantity of oleum in the tank was in-

accurately estimated to be 110 gallons. In our view, oleum

is such a dangerous substance that 110 gallons of it should

not have been neutralized without regard for the wind

conditions.

The question arises whether the United States or OH

Materials had the responsibility for considering the wind

conditions during neutralization. The parties do not dispute

that OH Materials was acting as an independent contractor

The United States cannot be held liable under the Federal!

Tort Claims Act for the negligence of its independent

contractors. 28 U.S.C. §1346(b). § 2671: United States vs

Orleans, 425 U.S. 807, 813-814 (1976); Loque vs. United

States 412 US. 521. 527 (1973). Nor can the United

States be held liable under the Federal Tort Claims Act on

principles of strict liability for damage arising out of the

performance of ultrahazardous activities. Laird vs. Nelms

4la

406 U.S. 797. 801 (1972). Thus, OH Materials must prove

negligence cn the part of the United States in order to

recover.

The Comprehensive Environmental Response, Com-

pensation, and Liability Act of 1980, 42 U.S.C. §9601, et

_seq. (“The Act”) assigns to the President who has dele-

gated to the EPA responsibility for conducting cleanup

operations such as the one performed at the Drake Site. The

EPA has the power to delegate certain tasks to indep-

endent contractors; however, in this case the EPA retained

ultimate authority to select the cleanup methods and super-

vise the cleanup operations. The EPA retained a certain

amount of control over the safety procedures to be followed

during the cleanup as evidenced by the fact that OH

Materials was not entirely free to do the work in any manner

it chose. DiSalvatore vs. United States, 456 F. Supp. 1079

(E.D. Pa. 1978).

One who entrusts work to an independent contractor,

but who retains the control of any part of the work, is

subject to liability for physical harm to others for whose

safety the employer owes a duty to exercise reasonable

care, which is caused by his failure to exercise his contro!

with reasonable care.

Restatement (Second) of Torts §414. The EPA knew of a

report prepared by J. E. Ort, a hydrogeologist employed by

the Commonwealth of Pennsylvania in which Mr. Ort

recommended that the more harzardous operations at the

Drake site. such as those involving the oleum, be per-

formed with a north wind in excess of 3 knots on a bright

sunny day. Even if the EPA had not been aware of this

report, it should have been aware of the importance of

paying attention to wind conditions. The EPA knew that

neutralization of the oleum tank involved a special danger

to the public and should have done everything within its

power to minimize the risk of harm to the public by taking

precautions such as instructing OH Materials to perform

hazardous operations on days with favorable wind con-

42a

ditions and checking to see that OH Materials followed such

instructions. The EPA did not direct OH materials to pay

attention to wind conditions nor did the EPA take the

necessary precautions itself until after the accident of

March 23, 1982. On March 24, 1982, the EPA decided that

work prone to release of vapors would be done only on days

when the wind was not blowing toward the -city. This

decision should have been made before neutralization of

the oleum tank began. Clearly, the EPA breached its duty of

care before March 24, 1982 in permitting neutralization to

proceed without regard to wind conditions.

We next address the question of OH Materials’ respon-

sibility for considering the wind conditions during neutral-

ization. The contract between the EPA and OH Materials

provides that OH Materials shall furnish the “...necessary

personnel, materials, services, facilities, and otherwise do

all things necessary for or incident to the performance of

the work” described in the document entitled “Scope of

Work’. Plaintiff's Exhibit P-2. It appears to this Court that

there is no reference in the Scope of Work to the oleum

tank; however, included in the Scope of Work is the

following sentence: “The contractor shall be responsible for

the staging and preparation for disposal of all waste con-

taining drums on site, as determined by the OSC or his

designee.” It is possible that the parties intended the term

“drum” to include the oleum tank. Despite the apparent

vagueness of the contract, OH Materials and the EPA

viewed the cleanup of the oleum tank as within the scope of

work to be performed by OH Materials. It could be said that

the parties orally and through their conduct modified the

contract so as to provide that OH Materials be responsible

for cleaning the tank Bernhart vs. Dollar Rent A Car

Systems, Inc., 595 F.2d 914 (3d Cir. 1979): Appalachian

Power Co. vs. Federal Power Commission, 529 F.2d 342.

350 (D.C. Cir. 1976), cert. denied, 429 U.S. 816. Given

that OH Materials was responsible under the contract for

leaning the oleum tank we return to the language at page

43a

one of the contract which states that OH Materials *...shall

furnish the necessary...services...and otherwise do all things

necessary for or incident to the performance of the work..”

Plaintiffs Exhibit P-2. In our view, considering wind con-

ditions was a necessary aspect of performing the cleanup of

the oleum tank. OH Materials was responsible for devising

the plan for neutralization of the oleum tank and although

OH Materials did not have the power to make final deter-

mination of the neutralization method used, it did have a

duty properly and safely to perform the operations which it

undertook. OH Materials should have checked the wind

direction and accordingly timed procedures such as inser-

ting rods into the tank, adding water to the tank, and taking

other steps which increased the risk that dangerous sub-

stances would be released so that these procedures would

not take place when the wind was blowing toward Lock

Haven. The decisions regarding the day to day operations

at the oleum tank were reached during meetings between

officials of the EPA and of OH Materials. There was no

evidence that OH Materials ever advised the EPA that

either OH Materials or the EPA should refrain from per-

forming the most hazardous operations when the wind was

blowing in the direction of Lock Haven. OH Materials

breached its duty of care before March 24, 1982 in

conducting neutralization of the oleum tank without regard

to wind conditions.

U.S.F. & G argues that the United States should be held

liable for actions of OH Materials under principles set forth

in sections 413, 416, 427 and 427A of the Restatement

(Second) of Torts. These sections contain exceptions to the

general rule that an employer is not liable for the negli-

gence of its independent contractor. We are not persuaded

by U.S.F. & G.’s attempt to distinguish the principles

described in sections 413, 416, 427 and 427A of the

Restatement from strict liability or vicarious liability. The

doctrine which U.S.F. & G. wishes us to apply essentially

states that an ernployer is liable for the negligence of the

44a

independent contractor irrespective of whether the em-

ployer has been at fault. Gibson vs. United States, 567 F.2d

1237, 1244 (3d Cir. 1977). The Court of Appeals has

rejected sections 416 and 427 of the Restatement (Second)

of Torts as a basis for recovery under the Federal Tort

Claims Act. Id. Whether this doctrine is labelled strict

liability or vicarious liability, it is not properly a basis for

recovery against the United States under the Federal Tort

Claims Act. Gibson vs. United States, 567 F.2d 1237 (3d

Cir. 1977); Laird vs. Nelms, 406 U.S. 797 (1972).

It could be argued that OH Materials’ erroneous es-

timate of the quantity of oleum in the tank and not the

parties’ inattention to wind was the cause of the damage. It

does not appear from the evidence that any more attention

would have been paid toward wind conditions had the

parties known that the tank contained 2,000 gallons of

oleum instead of 110 gallons. The fact that the neutral-

ization of the tank proceeded on March 23, 1982 while the

wind was blowing toward Lock Haven was a substantial

factor in bringing about the property damage which occurred.

Having concluded that both the EPA and OH Materials

were negligent in failing to take wind into account with

regard to the neutralization of the oleum tank and that their

combined negligence was a substantial factor in bringing

about the damage, we address the question of their

respective causal negligence. OH Materials was an expert in

cleaning up hazardous waste, knew or should have known

of the importance of paying attention to wind conditions

and should at least have raised this point with the EPA.

However, OH Materials did not have the power to make

final decisions regarding the cleanup operations. The

EPA's negligence was a greater cause of the damages tha»

that of OH Materials because the EPA retained the ultimate

power to make decisions regarding the cleanup operations.

In our view, 40% of the causal negligence is attributable to

OH Materials and 60% of the causal negligence is attribut-

able to the EPA for the property damage which occurred as

45a

a result of the accident of March 23, 1982 during the

cleanup of the oleum tank.

U.S.F. & G. argues that it is entitled to indemnity or

contribution from the United States. In support of its

request for indemnity, U.S.F. & G. cites section 886B of the

Restatement (Second) of Torts which provides:

Indemnity between tortfeasors.

(1) Iftwo persons are liable in tort to a third person for

the same harm and one of them discharges the liability

of both, he is entitled to indemnity from the other if the

other would be unjustly enriched at his expense by the

discharge of the liability. . .

The comments regarding the history of section 886B of the

Restatement provide that “A suit for indemnity is brought to

recover the total amount of the payment by the plaintiff, on

the ground that the plaintiffs conduct was not as blame-

worthy as the defendant’s...“Restatement (Second) of Torts,

§886B, Comments. U.S.F. & G. argues that indemnity is

appropriate because the United States is strictly liable or

because OH Materials acted in obedience to the directions

of the United States. We have held that strict liability cannot

form the basis for recovery under the Federal Tort Claims

Act. Laird vs. Nelms, 406 U.S. 797 (1972). Further, OH

Materials had its own duty to consider wind conditions.

Both OH Materials and the United States were negligent

and should share the cost of the damages; therefore, the

proper means for OH Materials to recover is through contri-

bution.

The United States argues that contribution is not

available to U.S.F. & G. because the United States is

secondarily liable and OH Materials is primarily liable for

the damages caused by the March 23, 1982 accident. The

United States cites the case of Burbage vs. Boiler Engineer-

ing & Supply Co., Inc., 249 A2d 563, 433 Pa. 319, 326-

327 (1969) as authority for this proposition. The distin-

ction between primary and secondary liability is not based

on a difference in degree of negligence or upon comparative

[ee mes

46a

negligence; rather, it is based on a difference in the charac-

ter of the wrongs and the duty owed by each of the tort-

feasors. Id. ;

Secondary as distinguished from primary liability rests —

upon a fault that is imputed or constructive only, being

based on some legal obligation between the parties or

arising from some positive rule of statutory or common

law or because of a failure to discover or correct a defect

or remedy a dangerous condition caused by the act of

the one primarily responsible.

Id. at 327. Both OH Materials and the EPA had the duty to

consider wind direction in performing the cleanup. The

EPA had the duty to make sure the independent contractor

followed all necessary safety precautions and OH Materials

had the duty to raise the issue of wind direction with the

EPA. The EPA's duty regarding safety was not reduced by

the fact that OH Materials also had a duty to take all

necessary precautions. In our view, the doctrine of primary

and secondary liability does not apply to the facts of this

case.

In order for the Pennsylvania Uniform Contribution

Among Tortfeasors Act, 42 Pa. C.S.A. §8321, et seq. (“the

Act”) to apply to this case, OH Materials and the United

States must be joint tort-feasors. Joint tort-feasors are

defined as “...two or more persons jointly or severally liable

in tort for the same injury to persons or property, whether or

not judgment has been recovered against all or some of

them.” 42 Pa. CS.A. §8322. In order to determine

whether parties are joint tort-feasors, courts consider factors

such as the identity of a cause of action, the existence of a

common or like duty, whether the same evidence will

support an action against each party, the nature of the

injury, identity of facts as to time. place, or result, and

whether the injury is direct and immediate rather than con-

sequential. Harka vs. Nabati. 487 A2d 432, 337 Pa. Super.

617 (1985). Both OH Materials and the United States hada

duty to consider wind conditions during neutralization.

ms 47a

Both parties had the opportunity to guard against the

other's negligence. The same evidence would support an

action against each party and the injury caused by the

negligence of OH Materials and of the United States is the

same. Therefore, OH Materials and the United States are

joint tort-feasors within the definition of the Act.

Under the Pennsylvania Uniform Contribution Among

Tortfeasors Act, the non-released party is entitled to have

the claim against it reduced in accordance with payments

made pursuant to a release in favor of a joint tort-feasor. 42

Pa. C.S.A. §8326; Sochanski vs. Sears, Roebuck & Co..,

689 F.2d 45, 48 (3d Cir. 1982). If the released party pays

more than its pro rata share, the non-released party is

entitled to have the claim reduced by the total amount of

consideration paid under the release. Id. Thus, the United

States is entitled to have a claim against it reduced in

accordance with the terms of the release given to U.S.F. &

G. by those whose property was damaged by the acid cloud.

Because the United States’s liability has been extinguished

by this release, U.S.F. & G. has a right of contribution from

the United States for the amount U.S.F. & G. paid in excess

of its own share of liability. 42 Pa. CS.A. §8324.

It is possible that counsel have stipulated or will stipulate

to the amount of damages to be assessed in this case.

Therefore, we will provide counsel the opportunity to file

such a stipulation and a proposed order. If counsel are

unable to reach a stipulation regarding damages, we will

schedule a hearing regarding the damages phase of this

case.

IV. Conclusions of Law.

1. The United States had a duty to maintain the highest

degree of care, utilizing every reasonable precaution sug-

gested by experience and the known danger, including

taking into account wind conditions, in making decision

concerning the methods employed in neutralizing the tank

containing oleum.

2. OH Materials had a duty to maintain the highest

48a

degree of care, utilizing every reasonable precaution sug-

gested by experience, and the known danger, including

taking into account wind conditions, in performing the

neutralization of the tank containing oleum.

3. The United States breached its duty of care in failing

to take wind conditions into account while supervising the

neutralization of the oleum tank.

4. OH Materials breached its duty of care in failing to

take wind conditions into account in performing the neutral-

ization of the oleum tank.

5. The United State’s breach of its duty of care regard-

ing wind conditions was a substantial factor in bringing

about the property damage which occurred on March 23.

1982.

6. OH Materials’ breach of its duty of care regarding

wind conditions was a substantial factor in bringing about

the property damage which occurred on March 23, 1982.

7. 60% of the causal negligence regarding the property

damage which occurred on March 23, 1982 is attributable

to the United States.

8. 40% of the causal negligence regarding the property

damage which occurred on March 23, 1982 is attributable

to the United States.

9. Pursuant to its policy insuring OH Materials, U.S.F. &

G. is subrogated to all claims of OH Materials against the

United States arising out of U.S.F. & G.’s payments to the

claimants suffering property damage as a result of the acid

cloud release of March 23, 1982.

10. U.S.F. & G's payments to persons suffering pro-

perty damage as a result of the acid cloud release on March

23, 1982 had the effect of protecting the United States

from claims of these persons.

11. USF. &G is entitled to 60% contribution from the

United States for all damages and reasonable expenses

including the adjustor’s expense paid as a result of the

chemical release of March 23, 1982 pursuant to principles

of comparative negligence.

An appropriate order will be entered.

DATED: July 3. 1986

MUIR. U.S. DISTRICT JUDGE