Government Contracts Monitor

It’s Good to Be King: COFC Applies Sovereign Act Doctrine to Negligence Claims

October 12, 2012

In a case of first impression, the Court of Federal Claims (COFC) held that the Sovereign Acts Doctrine barred claims by a contractor for damage to its equipment during Hurricane Katrina that the contractor alleged was the caused by the Army Corps of Engineers’ negligent design, maintenance, and operation of the New Orleans levees. C.R. Pittman Construction Co. v. United States, No. 08-196C (Fed. Cl. Sept. 28, 2012). 

The plaintiff had a contract with the Corps that required it to purchase and store materials in anticipation of performance at a particular location.  In turn, the Corps made progress payments to the contractor for those purchases.  During Hurricane Katrina, certain levees maintained by the Corps failed, flooding the designated storage area and destroying the stored materials. 

After the contractor sued the Corps for the lost and damaged materials, the Corps countersued for return of the progress payments.  After the court ruled that the contract entitled the Corps to recoup the progress payments, the contractor amended its complaint to allege that the Corps’ negligence in designing, maintaining, and operating the levees prevented the contractor from fulfilling its contract obligations.

The Sovereign Acts Doctrine exempts the Government for liability based on its “public and general acts as a sovereign.”  Thus, the government is generally immune unless its actions have the “substantial effect of releasing the Government from its own contractual obligations.”  However, when the Government enters into contracts, “its rights and duties therein are governed generally by the law applicable to contracts between private individuals.”

In this case of first impression, the court considered whether the Sovereign Acts Doctrine would apply to bar allegations of negligence.  The court held that it does, noting that negligence is, by its very nature, non-intentional and “not directed at anyone in particular.”  Furthermore, the court found that the negligence alleged here was incidental to the contract and affected the public generally.

When coming up with creative arguments against the Government, contractors should make sure to stay within the realm of the Government’s contractual obligations and not veer too far into the Government’s realm as the sovereign. 

 

Jeffry Cook is the attorney responsible for the content of this article.