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By John W. Ralls
Howrey LLP
This
case arose out an agreement between the U.S. government,
the State of Alaska and the City of Bethel, Alaska. The
United States agreed to donate 375,000 gallons of diesel
fuel to Alaska; the fuel was sold to Bethel for 10 cents
a gallon; and Bethel agreed to remove the fuel from its
storage location. Over the next eight months, Bethel removed
fuel from the storage location.
It
then was discovered that a joint in the pipe connecting
the fuel storage tank to the pump had cracked and that about
110,000 gallons of fuel had leaked onto the storage site
and surrounding property, which included some 26 acres owned
by the plaintiff, Bethel Native Corporation.
The
plaintiff filed a Federal Tort Claims Act action in U.S.
District Court against the United States, seeking $52.5
million in damages caused by the leaking fuel. The United
States filed a third-party action for equitable apportionment
of tort liability against Alaska. Alaska moved to dismiss
on the basis of 11th Amendment immunity. The District Court
denied the motion, and the state appealed. The Court of
Appeals affirmed. Bethel Native Corp. v. Department of
Interior, __ F.3d __, 2000 Daily Journal D.A.R. 3629
(9th Cir. 2000).
The
11th Amendment provides that: "The Judicial power of
the United States shall not be construed to extend to any
suit in law or equity, commenced or prosecuted against one
of the United States by Citizens of another State, or by
Citizens of any Foreign State." Under the 11th Amendment
generally, an unconsenting state is immune from suits brought
in federal courts by her own citizens, by citizens of another
state; by citizens of a foreign country; and by Indian tribes
or their members. The Court of Appeals held that the 11th
Amendment does not extend to actions brought by the United
States in federal courts. The United States can bring actions
for both contribution and indemnification.
Alaska
argued that its law, which provided for equitable apportionment
of liability, was different from joint and several liability
in that there is no duty between the defendant/third-party-plaintiff
and the third-party defendant. Alaska argued that this distinction
placed equitable apportionment into a realm of things for
which the state was immunized and that, in essence, the
claim was nothing more than a claim by a private citizen
disguised as a claim by the United States. Alaska argued:
"The United States merely has the equitable ability
under the law of apportionment to assert that the first-party
plaintiff has a claim against the third-party-defendant,"
and the United States is "attempting to act as a conduit
for plaintiff's claim against the State" and thereby
circumvent the Eleventh Amendment.
The
court held that the 11th Amendment does not immunize the
State of Alaska against the United States' third-party claim
for equitable apportionment because: (1) the "main
purpose of the United States' claim here was not to prosecute
a private plaintiff's action, but rather was 'to benefit
itself by reducing any damages plaintiff would otherwise
recover from the United States' " and (2) even if the
plaintiff may benefit by the claim, the action still is
not barred pursuant to Alden v. Maine, 527 U.S. 706,
119 S.Ct. 2240 (1999), which held that the United States
could sue to recover overtime wages on behalf an employee
even when a suit by the employee himself would be barred
by the 11th Amendment.
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For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-848-3362 or at rallsj@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2000 Howrey LLP
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