March 6, 2014 4th Circuit published opinions

Core Communications, Inc. v Verizon Maryland, LLC 

Core bought suits against Verizon alleging breach of contract and intentional torts based on a delay in connecting Core’s telecommunication services to the Verizon’s wire network. The district court granted summary judgment to Verizon on the torts for lack of proof of deception and nominal damages in the contract claim to Core as all consequential damages were waived under a damages limiting clause in the contract. The panel affirmed. It held that the contract clause could be raised at any time during the proceeding as it was in the contract before the court and as a matter of federal law, applying Chevron deference, the clause was lawful under Federal Communications Commission decisions. It held that Core failed to provide any evidence of deceit or other intentional wrongdoing and as there were no other damages available in the contract case because of the damage, limiting clause, nominal damages were the correct award.

Carnell Construction Company v Danville Redevelopment and Housing Authority 

Carnell, a minority owned business, sued Authority alleging race discrimination and breach of contract arising from the performance of a contract at a constructions site. Ultimately, the district court rued that corporations cannot bring race discrimination claims under title VI of the Civil rights Act of 1964, that the “owner” of the project was not liable for any discrimination and that damages in the contract claim had to be reduced under state law. The panel, with one judge dissenting in part, affirmed in part, vacated in part, remanded in part. Joining other circuits which have addressed the issue, the panel held that corporations can bring race discrimination claims under title VI when, as here, they are minority owned entities. The majority also held that eh “owner” was properly held not liable as there was no evidence it was an agent or principle of Authority. The panel held that the district court erred in allowing certain  prior statement impeachment evidence as it was never proven to be a statement of the witness, had minimal evidence and the baseless attack on the witness’ credibility was both prejudicial and the prejudice substantially outweighed whatever relevance the statement had. The race discrimination claim was remanded for a new trial. The panel remanded for a new trial on contract damages as Carnell failed to prove at trial that it complied with the notice requirement in Virginia law except as to two items. The panel also rejected Carnell’s arguments about the state damages reduction act as it applied to the contract here and Carnell was aware of the provision allowing Authority to change contracts and this power was a legitimate use of power to protect the government’s finances. The panel finally held that Carnell failed to adequately plead reputational and other special damages in the contract claim and the district court properly removed them from the judgment. The partial dissent argued that there was substantial overlap in the leadership of Authority and the “owner’ and there could be liability on the basis of the cat’s paw theory. The dissent would have remanded for additional proceedings at the summary judgment stage.

 

Metzgar v KBR, Incorporated (In Re KBR, Incorporated Burn Pit Litigation) 

Metzgar and other service members sued KBR alleging state law tort liability for injuries sustained form KBR’s open air burning of garbage and improper water sanitation in Iraq and Afghanistan. The district court dismissed the cases on political question, derivative contactor immunity and combat activities preemption. The panel held there was insufficient evidence to determine those issues and remanded. It held that the political question doctrine would only apply if KBR was operating under military control. Here, the evidence conflicted as to whether the military or KBR chose to burn the garbage or operate the water systems in the manner they were operated. Thus, dismissal was premature. The panel held that contractor immunity is only available when a contractor is actually doing what the contract requires it do. Here, it is unclear whether KBR’s actions were pursuant to the contract or in breach of the contract. Thus, dismissal was premature. Finally, the panel held that combat operation preemption applies where state law would control military operations or support operations like supplying ammunition or, like here, garbage and water services. However, it is unclear whether KBR operated in the scope of the command authority or in breach of command instructions. Thus, dismissal was premature. The case was remanded for discovery on the open factual issues.

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