Opinion ID: 616409
Heading Depth: 2
Heading Rank: 2

Heading: The Independent Contractor Defense

Text: The key factor governing whether an entity providing services to the United States is an independent contractor is whether the contractor, rather than the government, exercises day-to-day supervision and control of its own activities. See United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976) (A critical element in distinguishing an agency from a contractor is the power of the Federal Government `to control the detailed physical performance of the contractor.'  (quoting Logue v. United States, 412 U.S. 521, 528, 93 S.Ct. 2215, 37 L.Ed.2d 121 (1973))); id. at 815, 96 S.Ct. 1971 (holding that independent contractor status under the FTCA turns on whether [the contractor's] day-to-day operations are supervised by the Federal Government); see also Williams, 50 F.3d at 307 (finding independent contractor status based on a comprehensive instrument providing that [the contractor] was responsible for the maintenance of the Premises and the daily operations of the Premises); Larsen v. Empresas El Yunque, Inc., 812 F.2d 14, 16, 14 (1st Cir.1986) (holding that the independent contractor defense applied where responsible party ran the day-to-day operation of [a] restaurant that was located on premises owned and controlled by the United States). Appellants appear to acknowledge that Genett and Rainforest Kids were independent contractors and, indeed, there can be no serious dispute as to that status. Attachment I of the childcare center's licensing agreement specified that [t]he Provider, i.e., Rainforest Kids' board of directors, is not an employee or agent of the Government, and that, with certain exceptions, decisions and responsibilities with respect to program, levels of enrollment, fees, tuition, hiring, policy making, and any and all other aspects of the operation and conduct of the Center's business shall be the exclusive right, prerogative, and responsibility of the Provider. Docket 50-2, at 6, § 5 (emphasis added). Similarly, the Genett contract stated that it was governed by performance-based specifications, and the document explained that, under a performancebased contract, the contractor, rather than the Government, determines its own optimal work schedules, frequencies, resource allocations, and performance methods for meeting the Government's quality requirements. Docket 50-4, at 12, § 3.B. (emphasis omitted). The Genett contract also stated that  [i]t is the policy of GSA that Government direction or supervision of the contractor's employees, either directly or indirectly, will not be exercised . Docket 50-4, at 13, § C.4; see also id. at 53, § B.1 (stating that [n]either GSA employees nor other Government employees are authorized to exercise either direct or indirect supervision over the contractor's employees). Thus, under the terms of the agreements, the two service providers were independent contractors with control of and responsibility forthe day-to-day management and supervision of their respective operations. The government argues that such responsibility logically extends to the scheduling of lawn mowing and outdoor playtime so as to avoid obvious hazards to the Rainforest Kids children. Appellants, however, argue that notwithstanding Rainforest Kids' and Genett's independent status, the United States could not properly delegate such coordination to the contractors. They argue, in effect, that the United States lacked the discretion to leave the responsibility for ensuring safety in the hands of the contractors. In addition, they appear to argue that the government did not, in fact, delegate such authority to the contractors. On the one hand, appellants' arguments appear inconsistent with the basic premise of the independent contractor defense, i.e., that the government may not be held liable for injury caused by the acts or omissions of independent contractors' employees in the day-to-day discharge of the duties the contractors were hired to perform. On the other hand, we think it possible for the government to hire independent contractors while retaining responsibility for a discrete aspect of their operations, including, for example, safety measures. See, e.g., Whisnant v. United States, 400 F.3d 1177, 1179 (9th Cir.2005) (holding that the government had retained responsibility for safety even though an independent contractor was responsible for maintenance at a naval commissary). The government argues that it made no such safety carve-out in this case, and that the discretionary function exception protected its judgment to delegate the responsibility to Genett and Rainforest Kids. Before considering the nature of that exception and its application here, we look at whether responsibility for safety was included in the delegation of authority to the contractors.
Both agreements expressly assign responsibility for safety to the contractors. The Rainforest Kids license obliges the childcare center to comply with all Federal, State or local safety policies, Docket 50-2, at 5, § 4(i), and, in apparent recognition of the burden of liability, the license requires Rainforest Kids to procure liability insurance and to maintain accident insurance on all students, id. § 7. Genett's agreement similarly states that the contractor shall comply with all applicable Federal, State, local, and industry safety and health standards and regulations, Docket 50-4, at 25, § 14, [10] and it requires the contractor to employ a sufficient number of capable and qualified contract and subcontract employees to enable it to properly, adequately, safely, and economically manage, operate, maintain, and account for the facility, id. at 48, § 2.B(1) (emphasis added). The contract also states that [t]he Contractor shall take all necessary precautions to prevent injury to the public, building occupants, or damage to property of others. Id. at 56, Part II, § 2. Two other provisions in the Genett contract require particular attention to the safety of children. A provision addressing cleaning requirements states: Due to the inquisitive nature of children, report to the COR any observations that could conceivably cause injury to a child. Extra effort should be made to ensure that maintenance equipment and supplies are well secured from the children. Id. at 49. A Special Note states: In addition to the standard scope of work described above, the expected outcome is to ensure a safe and healthy environment for the children utilizing the child centers. This includes the daily removal and disposal of soiled diapers, plus a special emphasis on quality control. All efforts should be made to protect the children. Due to the inquisitive nature of children, report to the CO [GSA contracting officer] and/or his/her designated representative, any potential hazards that could conceivably cause injury to a child. Extra effort should be made to ensure that maintenance equipment and supplies are well secured from the children. Employees cleaning Child Care Centers are subject to Federal, State, and Local laws governing health screening requirements prior to commencing employment. Id. at 51. Specifically with respect to lawn-mowing, the deposition testimony confirms that it was Genett's responsibility to set a schedule that would meet the contract's quality and safety requirements. Anabel Mulero, the GSA contracting officer's representative (COR) at the time of the accident, testified that it was not part of her job to ensure that Genett followed a schedule for mowing because [the contract] is performance based, though she reported that she encouraged adherence to a schedule so the contractor could avoid falling behind in the work. Docket 67-5, at 3. Another COR, Maxwell Rivera, stated that the only guidance given by GSA about mowing when people were in the area was to work safely: [T]he contract says they have to be working to emphasize safety. So if there are kids, common sense, to me, would tell me I would not cut the grass if I have kids present. Docket 67-2, at 12. Rivera further testified that Genett and Rainforest Kids would need to work out scheduling to avoid conflicts because we don't give them the schedule as to when to cut the grass. We just want it cut and cleaned. Docket 67-5, at 20. Wanda Lara, Genett's project manager, reported the same allocation of responsibility. She testified that the contractor's employees were required to walk the grassy area of the complex looking for rocks and other debris. Docket 67-5, at 10. Although she did not specify who formulated that policy, she stated that a mowing schedule had been prepared by the Genett project manager who preceded her. Id. at 11. Mulero also testified that a lawn-mowing schedule was developed by Genett and Rainforest Kids after complaints were made by the childcare workers about Genett employees interfering with their activities and making noise during the children's nap times. Docket 60-4, at 5. Mulero did not participate in the meeting to work out the arrangements, she explained, because I didn't feel like I had to be there. I think that was something [on which] two civilized persons could reach an agreement. [11] Id. at 6. In sum, both the terms of the agreements and their actual execution show that the United States did not carve out responsibility for safety measures from its otherwise comprehensive delegation of day-to-day authority to Rainforest Kids and Genett. Although the Genett contract anticipates government-specified schedules or procedures for some matters, possibly including safety items, [12] such detail does not negate the agreement's overall status as a performance-based contract. The varying levels of specificity signify only that the government determined that certain tasks needed more explicitly stated performance expectations. See, e.g., Orleans, 425 U.S. at 817-18, 96 S.Ct. 1971 (noting that the independent contractor in that case must comply with extensive regulations and guidelines, although the contracting agency does not have the power to supervise the daily operation of the contractor); Logue, 412 U.S. at 529-30, 93 S.Ct. 2215 (finding independent contractor status where the contractor must follow detailed federal rules and standards, but the agreement gives the United States no authority to physically supervise the conduct of the [contractor]'s employees). [13] We thus turn to consider whether the government's decision to assign to others the responsibility for ensuring safety at the Federico Degetau complex was a discretionary judgment protected from FTCA liability.