Sixth Circuit Holds No Derivative Immunity in Kingston Coal Ash Spill Case

Recently, I wrote about a case filed by workers alleging their exposure to coal ash during a clean up resulted in numerous health issues.  The plaintiffs worked for a contractor hired to clean up a coal ash spill from a power plant owned and operated by the Tennessee Valley Authority (TVA).  Plaintiffs filed suit against the contractor and the contractor argued it was entitled to share the immunity of the government agency with which it contracted.  The case has been going on for nine years and this was the second trip to the Sixth Circuit over this issue.

Yesterday, the court rejected the claim to derivative immunity (opinion here:  Download 6thCircuit_Decision_Opinion (1)).  Although most tort immunity issues involving the federal government are focused on the Federal Tort Claims Act, the TVA is explicitly excluded in that statute.  TVA is a hybrid government/private entity and the legislation creating it included a sue-and-be-sued clause.  The proper immunity analysis to be applied to TVA was recently covered in Thacker v. TVA, 139 S. Ct. 1435 (2019).  Based on that analysis, when determining derivative immunity, the two broad questions are:  (1) would the TVA have been immune if it were sued directly?; and (2) is the contractor entitled to share the immunity of TVA?.  The second question revolves around whether the contractor followed the TVA's instructions, but there is a dispute in this case about how to phrase the standard.  The test for TVA's immunity is itself divided into two parts.  The first is whether the act in question was commercial or governmental.  If it was commercial, there is no immunity.  If it was governmental, there is a further issue to be resolved.  If TVA is operating in a governmental capacity, the sue-and-be-sued clause is limited by implied exceptions if: (1) the suit is not consistent with a statutory or constitutional scheme; (2) the suit would gravely interfere with the performance of a government function; or (3) for other reasons it was plainly the purpose of Congress to use the sue-and-be-sued clause in a narrow sense (essentially a catch-all).  

In this particular case, the court worked through the following analysis.  First, would the TVA have been immune if it were sued directly?  (Was the act in question--cleaning up a coal ash spill--commercial or governmental?  And are these tort suits inconsistent with the Supremacy Clause and CERCLA (the statute under which the clean up proceeded)?  Are these torts suits a grave interference with a government function?  Second, should the contractor share in the TVA's immunity?

The court found no need to decide whether the clean up was commercial or governmental and no need to decide if the contractor would share the TVA's immunity.  It held that even if the clean up was a governmental function, the suits were not inconsistent with the Supremacy Clause or CERCLA and were not a grave interference with a governmental function.  As to the consistency with the Supremacy Clause and CERCLA, the court noted that the plaintiffs' theory does not challenge the adequacy of the safety plan drawn up pursuant to CERCLA; the plaintiffs allege that the contractor failed to comply with those terms (a jury in a phase I trial has concluded the contractor did fail to comply with the terms).  As to the grave interference issue, the court emphasized the existence of the sue-and-be-sued clause and again noted that the plaintiffs were not challenging the safety plan itself, only the contractor's compliance with it.

Next up is a case in the Tennessee Supreme Court (June 1) on whether the Tennessee Silica Claims Priorities Act applies to these cases and perhaps after that a phase II trial.  Anila Yoganathan at the Knoxville News Sentinel has the story.