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United States v. Cb & I Constructors, Inc.

Court of Appeals for the Ninth Circuit
685 F.3d 827 (2012)
ELI5:

Rule of Law:

Under California tort law, the government may recover intangible, non-economic environmental damages for harm to public lands caused by a negligently set fire, as the law provides for compensation for all detriment proximately caused by the negligent act.


Facts:

  • In April 2002, CB & I Constructors, Inc. (CB & I) was subcontracted to build steel water tanks on private land adjacent to the Angeles National Forest.
  • CB & I offered its employees a financial bonus for completing the tanks in fewer hours than projected.
  • On June 5, 2002, a CB & I employee operated an electric grinder on a tank roof, directing a trail of sparks and hot slag toward dry brush on a day where temperatures exceeded 100 degrees.
  • The sparks ignited the brush, starting a wildfire that burned for nearly a week.
  • The fire spread to the Angeles National Forest, burning approximately 18,000 acres.
  • The fire caused extensive environmental damage, including destroying native vegetation, increasing flood and erosion risk, destroying a historic mining camp, and devastating the habitat of the endangered California Red-Legged Frog.
  • The population of the California Red-Legged Frog in the area dropped from approximately 350-500 adults before the fire to 30-50 adults after the fire.
  • Damage to the Hazel Dell Mining Camp was so severe that it was no longer eligible for listing on the National Register of Historic Places.

Procedural Posture:

  • The United States filed a civil action in federal district court against CB & I and Merco Construction Engineers, Inc. to recover tort damages.
  • After a five-day trial, a jury returned a special verdict finding CB & I 65% liable and Merco 35% liable for negligence and trespass by fire.
  • The jury awarded approximately $7.6 million in economic damages and $28.8 million in intangible environmental damages.
  • Merco settled with the government for $2.1 million.
  • The district court entered judgment against CB & I for its share of the damages, including $18.72 million for the intangible environmental harm.
  • CB & I filed a renewed motion for judgment as a matter of law, or alternatively for a new trial or remittitur, challenging only the award for intangible environmental damages.
  • The district court denied CB & I's motions.
  • CB & I, as appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Ninth Circuit.

Locked

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Issue:

Under California law, may the government recover intangible, non-economic environmental damages for harm to public land caused by a negligently set fire?


Opinions:

Majority - W. Fletcher

Yes. Under California law, the government may recover intangible, non-economic environmental damages for harm to public land. The state's broad tort statutes, which aim to compensate for 'all the detriment proximately caused' by negligence, place no restrictions on the type of property damage that is compensable for negligently set fires. The court reasoned that intangible environmental damages are a type of property damage, distinct from impermissible emotional distress damages, and that the government acts as a trustee holding public lands for the benefit of current and future generations. Simply because such harm is not susceptible to precise calculation does not make it non-compensable. The court held that the government presented sufficient evidence about the nature and extent of the environmental harm for a jury to rationally determine an award without speculating, even without expert testimony placing a specific dollar value on the loss.



Analysis:

This decision solidifies the principle that significant environmental harm to public lands constitutes a compensable injury in tort, even when the damage is 'intangible' and lacks a clear market value. It empowers government entities to seek substantial damages beyond mere restoration or fire suppression costs, thereby creating a stronger financial deterrent against negligence that impacts public resources. The ruling affirms that juries have the discretion to quantify abstract harms based on detailed evidence of ecological and cultural impact, establishing that plaintiffs do not need to present a precise monetary valuation to prove such damages.

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