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Class Action Defense Cases–Ackerson v. Bean Dredging: Fifth Circuit Affirms Dismissal Of Class Action Against Dredging Contractors For Damage Caused By Hurricane Katrina Holding Government-Contractor Immunity Applied

District Court did not Err in Dismissing Class Action Complaint Against Dredging Contractors seeking Monetary and Injunctive Relief for Damages Caused by Hurricane Katrina because Defendants Acted Pursuant to Government Contracts under Act of Congress and were Entitled to Government-Contractor Immunity Fifth Circuit Holds

Plaintiffs filed a putative class action against the federal government and thirty-two others (the Contractor Defendants) “who dredged the Mississippi River Gulf Outlet to recover damages sustained during Hurricane Katrina.” Ackerson v. Bean Dredging LLC, 589 F.3d 196, 2009 WL 4066679, *1 (5th Cir. 2009). According to the allegations underlying the class action complaint, “[The] Contractor Defendants’ dredging activities caused environmental damage to protective wetlands in the Mississippi River Gulf Outlet (MRGO). The Plaintiffs also alleged that the MRGO project caused an amplification of the storm surge in the New Orleans region during Hurricane Katrina, undermining the levees and flood walls along the MRGO and the Industrial Canal that breached and flooded St. Bernard Parish and Orleans Parish. The Plaintiffs asserted claims against the Contractor Defendants for negligence, breach of implied warranty, concealment, and violation of environmental-protection laws and sought a myriad of damages and an injunction to prevent future dredging activities.” Id., at *2. The federal government moved to dismiss the class action claims against it for failure to exhaust administrative remedies; the district court granted the motion and plaintiffs did not appeal that ruling. Id. Defense attorneys for the dredging companies moved to dismiss the class action claims against the Contractor Defendants on the grounds that they had government-contractor immunity. Id. “The district court dismissed the claims against the dredgers because it determined that the defendants acted pursuant to contracts with the United States government under authority granted by an act of Congress.” Id., at *1. Further, the district court denied plaintiffs’ request to conduct discovery “calling the request a ‘fishing expedition,’” and denied plaintiffs’ request to file an amended class action complaint as “futile.” Id., at *2. The Fifth Circuit affirmed.

The Fifth Circuit reviewed the district court’s order de novo. Ackerson, at *3. It held that “the Contractor Defendants are entitled to government-contractor immunity under Yearsley.” Id. We do not discuss the Fifth Circuit’s opinion in detail as the author finds its holding to be compelled by well-settled case law, as detailed in the Court’s opinion. See id., at *3-*5. The Circuit Court also held that the district court did not err in dismissing the class action complaint with prejudice, see id., at *5, and that the lower court did not err in denying plaintiffs’ request to file an amended class action complaint because “Plaintiffs’ proffered amendment does not go beyond the conclusory allegation that the Contractor Defendants activities somehow violated various laws and regulations at some unspecified time and place,” id., at *6. Finally, the Fifth Circuit held that the district court did not err in denying plaintiffs’ request to conduct discovery, id., at *7. Accordingly, the Circuit Court affirmed the district court order dismissing the class action complaint. Id.

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