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In toxic waste litigation over a Korean War-era battery plant, a federal judge ruled that Uncle Sam can’t be held liable because the project was a war effort and the Federal Tort Claims Act includes a “discretionary function exception” that insulates the government from suits over any decisions that involve “policymaking.” In his 35-page opinion in Gould Electronics Inc., Senior U.S. District Judge Thomas N. O’Neill Jr. of the Eastern District of Pennsylvania held that the government is entitled to immunity for its decisions about how the plant should be built and its decision not to warn local residents in Cold Spring, N.Y., of the potential health hazards. “Perhaps the government could have built the plant differently and included modifications that would have lessened its negative environmental impact. In order to remove discretion, however, the government must have violated a standard clearly established either by agreement or industry practice,” O’Neill wrote. “To state simply that the government could have designed a better plant is insufficient to establish FTCA liability.” The ruling dismisses a case brought by Eastlake, Ohio-based Gould Electronics that sought government contribution to its $4.5 million settlement with the residents. According to court papers, the government decided near the beginning of the Korean War that it needed to produce a particular type of nickel-cadmium battery. Sonotone Corp. was selected by the Army to help manage and operate a manufacturing plant — the first in the country to produce the nickel-cadmium battery, which was eventually used in the production of missiles and in weapons constructed by the Atomic Energy Commission. Prior to the plant’s construction, Sonotone employees recommended that a closed wastewater system, which would remove all harmful material before the water was released from the plant, be installed. But the Army rejected the design due to a lack of funds. Instead, the plant included a wastewater disposal system that, during periods of heavy water usage, discharged wastewater directly into a branch of the Hudson River. The Army said it opted for the design because, if such discharges were not allowed, the plant ran the risk of being shut down. Lawyers for Gould Electronics argued that, as a result of the system, contaminated water was released into the area surrounding the plant and the plant’s operation generated fumes, dust, vapors and mists, which contained toxic substances that were released into the air. In 1962, the Army sold the plant to Sonotone, which was later acquired by Clevite Corp. The corporation later merged with Gould. The battery plant ceased operations in 1980. In 1990, a group of residents filed suit in New York state court demanding compensation for injuries that allegedly resulted from the plant’s operation. Gould settled with the residents for $4.5 million and filed suit in U.S. District Court demanding contribution from the government. Last year, government lawyers moved to have the suit dismissed, arguing that the plaintiffs’ claims challenged governmental decisions that are insulated from judicial review by the discretionary function exception to the FTCA. O’Neill found that the term “discretionary function” is not defined in the statute, but that the 3rd U.S. Circuit Court of Appeals has held that the immunity provision “is designed to protect policymaking by the politically accountable branches of government from interference in the form of ‘second-guessing’ by the judiciary — second-guessing the result of which burdens the public fisc and the prospect of which skews the decision-making process of the executive and legislative policymakers.” The U.S. Supreme Court’s 1991 decision in United States v. Gaubert established a two-part test for applying the discretionary function exception, O’Neill said. In the first prong of the test, the court must decide whether the government’s act involves an “element of judgment or choice.” If a federal statute, regulation or policy specifically prescribes a course of action for an employee to follow, the exception cannot apply because no discretion exists, O’Neill found. In the second prong, O’Neill said, the court must then decide whether the judgment exercised by the government “is of the kind that the discretionary function exception was designed to shield.” In doing so, O’Neill said, the court’s focus “is not on the agent’s subjective intent in exercising the discretion conferred by the statute, but on the nature of the actions taken and on whether they are susceptible to policy analysis.” In the suit, Gould Electronics argued that the government breached its duties to the residents by designing, building and operating the plant “in a negligent, careless, and/or reckless manner.” That alleged negligence was compounded, the suit said, by the government’s failure to monitor toxic emissions or warn the residents about their release. But O’Neill found there were no controlling federal statutes or regulations that required the Army to design the plant more safely. “Since none of the sources relied on by plaintiffs provided specific, mandatory directives for the Army to follow in the disposal of its waste material, its decisions were discretionary,” O’Neill wrote. As a result, O’Neill found that the government satisfied the first prong of the Gaubert test. On the second prong, the government argued that the design of the plant constituted a protected discretionary decision because it concerned the production of a vital weapon component made during the exigencies of the Korean War. O’Neill agreed, saying “there can be little doubt that decisions related to the defense of the country or the prosecution of an armed conflict are central to the mission of the armed services.” Gould’s lawyers argued that the government overstated the urgency of the project. O’Neill disagreed, saying “the design of the plant arose out of an urgent need for a vital weapons component and was a direct reflection of policy considerations surrounding the Cold War in general and the Korean War in particular.” The plant not only needed to begin production as soon as possible, O’Neill found, but “there is also evidence that the plant needed to be built cheaply.” Gould argued that the government has never adequately explained why it built the plant with such serious design flaws. But O’Neill found that the question was one the government need not answer. “Contrary to plaintiffs’ assertions, the government need not justify why it failed to take a different course,” O’Neill wrote. “The relevant governmental decision was to design the plant as it did, which included the choice of three-foot smokestacks and provisions for periodic discharge of excess waste water into the river. The related policy consideration was how best to cheaply and quickly produce vital weapon components in the midst of the Korean Conflict at arguably the height of the Cold War,” O’Neill wrote. “In my view the design of a facility by the U.S. Army to produce equipment exclusively for use by the American military is a discretionary function entitled to protection from liability under the FTCA.” Likewise, O’Neill found that the government is immune for its decision not to warn the residents of the hazards. “The failure to warn is not to be examined in isolation; rather I must determine whether it is susceptible to classification as an aspect of the government’s decision concerning the plant’s design, a decision I have already determined to be discretionary, based on policy considerations and therefore entitled to immunity from suit,” O’Neill wrote. “I hold that where a manufacturing plant was producing a vital wartime weapons component and where speed and efficiency were of the essence, decisions relating to the release of information concerning what is discharged from the plant can be characterized as a policy judgment reflecting one aspect of the Army’s decision on how best to design and operate the facility.”

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