Immunity Considerations in Flood Recovery

November 08, 2010 Photo
If you are a plaintiff in flood litigation and the defendant has immunity, there's no chance for recovery. To determine whether or not to pursue subrogation, you must evaluate the availability and applicability of the immunity defense. Knowing the exceptions to immunity clauses at the state and federal level will help your evaluation and your litigation.

You can assume that government entities will offer an immunity defense if sued for recovery. There are many potentially responsible parties, including cities, states, counties, municipalities, and various federal entities, such as the Army Corps of Engineers. Counsel and the adjuster should carefully analyze each immunity defense to determine its applicability to the subrogation claim.

Analysis of the initial cause is important. The following questions get to the heart of immunity: precisely where did the flood waters originate and flow; was a flood control project, such as a levee or dam, involved in the flood; did the claim involve maintenance and upkeep or a design issue; and were the responsible parties' actions discretionary or mandatory?

Suing the Federal Government
The federal government, including the Corps of Engineers, has broad immunity from flood claims. This immunity is derived from two laws in the United States Code: the Federal Tort Claims Act (FTCA) 28 U.S.C. S 1346(b) and the Flood Act of 1928 as amended, 33 U.S.C. § 702c. The FTCA waives governmental immunity, but there are 14 exceptions to that waiver that do immunize the government that must be evaluated as a part of any subrogation claim process.

First, to establish a tort claim against the government, the negligence claimed must arise out of an activity of which a private person might be capable. This threshold determination distinguishes between governmental (immunized) and proprietary (not immunized) activities. Courts have deemed that some functions—such as health and safety inspections, animal control, permits and licenses—are traditionally governmental. Proprietary functions are typically business-type activities distinct from governmental functions.
That waiver of the federal government's sovereign immunity that the FTCA provides applies to circumstances in which government employees are negligent within the scope of their employment. Under the FTCA, the government can be sued only "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred."

But don't think a waiver of government immunity is the end of the immunity defense. Exceptions to the waiver must be evaluated. There are 14 enumerated exceptions to federal immunity that claims professionals should consider. (See: 28 U.S.C. 2680.) The FTCA's "discretionary function" is the exception that is applicable to flood claims and the one that is most often litigated.

This exception is an attempt to prevent judicial second-guessing of administrative activity, and it immunizes the United States for acts or omissions of its employees that involve discretionary policy decisions. The exception bars claims against the U.S. "based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty…whether or not the discretion involved be abused." Courts apply a two-part test established in Berkovitz v. U.S. First, did the conduct involve "an element of judgment or choice?" If a federal statute, regulation or policy dictates a course of action for an employee to follow, the function is not discretionary.

Part two of the test focuses on the kind of judgment used and if it involves "social, economic and political policy" considerations. For example, the Corps of Engineers operates many dams that could be implicated in a flood. If a government standard, regulation or protocol prescribes decisions regarding the management of the dam and spillways, then the Corps' activity following those prescriptions would not be discretionary and may not be immune. If, on the other hand, management decisions are left to the discretion of the individual operator, the Corps could be immune. The FTCA and its exceptions must be considered in evaluating the flood's cause and effect.

Looking at the Subtleties
Counsel and the claims professional should manage experts so that the FTCA issues are properly identified and evaluated. Parties seeking recovery can obtain details regarding government activity (such as dam release data, stream elevations and flow, or waterway maintenance) from public sources or through Freedom of Information Act requests.

It is also important to dovetail the FTCA analysis with the Flood Control Act of 1928 evaluation. Developing a consistent theory applicable to both is important. A case that survives the FTCA analysis but is excluded under the Flood Act may be interesting but has little recovery value. The Flood Control Act of 1928, 33 U.S.C. § 702c, states, "No liability of any kind shall attach to or rest upon the United States for any damage from or by floods or floodwaters at any place." At first blush, this appears to be an absolute grant of governmental immunity for flood claims. However, there has been much litigation around the meaning of "floods" and "floodwaters" and the scope of the government's immunity under the act. The government typically argues for immunity from all flood claims. The plaintiff usually argues that the floodwaters must originate at or come from a federal flood control project.
A determination must be made regarding the character and source of the floodwaters. If unrelated to flood control, then there's no immunity. The Corps of Engineers' dam example is a good one. The Corps designs, builds, maintains and operates most of America's dams. Some of the dams are intended for flood control, others for recreation and power generation. If dam management causes or contributes to the flood and the dam is not part of a flood control program, then the Corps may not have immunity under the Act.

The Supreme Court analyzed the Flood Act on several occasions, most recently in Central Green v. United States and in litigation over Hurricane Katrina. The Katrina court determined that a navigational canal unrelated to flood control caused part of the flood and said, "The United States should not be immunized for a tort which occurred from an activity unrelated to a flood control project. Taken to its logical conclusion, such a policy would yield absurd results." The trend has been to narrow the government's immunity despite the act's broad language.

States also enjoy limited immunity. Most states have enacted tort claims acts similar to the FTCA, which provide limited immunity. In Pennsylvania, for example, the commonwealth has immunity through the Sovereign Immunity Act and extends immunity to local municipalities through the Municipal Tort Claims Act. These are fairly standard immunity statutes, generally providing state and local governments with immunity except in certain situations (such as vehicular liability, care of real property, highway maintenance, etc.). The Municipal Tort Claims Act waives immunity for municipal units for dangerous conditions in water systems owned by local agencies. The act also bars subrogation claims by specifically requiring that the claimant deduct insurance payments from any recovery. Each state's legislative approach is similar, with different notice requirements, exceptions and limitations. Parties evaluating recovery should carefully study each statutory scheme to determine the impact on flood litigation in that particular state.
Peter G. Rossi, a member of the Subrogation & Recovery Department at Cozen O'Connor, chairs the law firm's National Flood Subrogation Task Force.
About The Authors
Peter G. Rossi

Peter Rossi is a partner with CLM Member Firm Cozen O’Connor. He can be reached at

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