LSI 2010 NRD Santa Fe final conference binder 072110.pdf

Allan Kanner of Kanner & Whiteley, L.L.C. Speaker 23: 53
interpretation or one not applying section 707 to tort suits altogether is adopted, the
Defense Production Act would not bar plaintiffs’ claims. 208
Similarly, in Hercules, Inc. v. United States, the federal circuit examined the scope of
immunity of section 707 of the DPA.
In Hercules, manufacturers sued the United States
government in order to recover expenses incurred as a result of Agent Orange litigation. 209
The
defendants argued that because the government had compelled them to enter into contracts for
the production of “Agent Orange” pursuant to section 101 of the DPA, the defendants were
entitled to immunity under section 707 for both contract and tort suits. 210
The court disagreed,
stating:
The language of section 101(a) makes it clear that the purpose of the statute is to
authorize the President to dictate that preference be given the government
contracts which are necessary to promote the national defense . . . Significantly,
section 101(a) does not mention either the specific nature of performance under a
DPA contract, or the subsequent use of goods produced under such a contract.
Therefore, we conclude that, while the risk imposed by section 101(a) does
include the possible need of a contractor to break its contracts with third parties in
order to give preference to a DPA contract, it does not include the risk that the
product produced under the DPA contract will be inherently unsafe to users. 211
Consistent with the court’s reasoning in In re Agent Orange, immunity under the DPA
would not apply to defendants who improperly dispose of waste or discharge hazardous
substances despite the existence of a contract with the government. Unless a contract with the
government explicitly directs and authorizes the waste disposal and discharge methods to be
undertaken by a defendant, it is difficult to see how the DPA can successfully be asserted as a
208 Id. at 845.
209 24 F.3d 188 (Fed. Cir. 1994).
210 Id. at 202. 50 U.S.C. app. § 2071(a)(1964) authorizes the President “to compel contract performance as well as
contract acceptance.” Id. at 202-203.
211 Id. at 203.
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Law Seminars International | Natural Resource Damages | 07/16/10 in Santa Fe, NM