Opinion ID: 655371
Heading Depth: 2
Heading Rank: 1

Heading: Paramount's Liability to the Nurseries

Text: 3 Paramount's defense is relatively simple--PPQ is the party at fault. Paramount argues that the Compliance Agreement between PPQ and Paramount and PPQ's Treatment Manual placed the burden on PPQ to see that the fumigation was properly executed, thus relieving Paramount of any responsibility for ensuring proper aeration. Because the district court found that PPQ was responsible to check the gas concentration levels inside the containers before releasing the root stock, Paramount contends that the sole issue regarding Paramount's liability to the Nurseries is whether the trial court properly concluded that Paramount had a duty to check on the PPQ. The district court correctly rejected Paramount's argument. The district court persuasively reasoned: 4 To hold that a commercial fumigator can rely upon another party carte blanche to see that dangerous conditions do not exist following a treatment conducted by the fumigator, with the fumigator's equipment, on the fumigator's premises, ignores reality. A reasonably prudent fumigator would not have relied upon another party to perform critical functions in the fumigation process without some safeguards for ensuring that such functions were indeed being performed. There is no evidence that Paramount employed checks and balances to see that PPQ was checking gas concentration levels. 5 Moreover, even if Paramount was not negligent in failing to make sure that PPQ tested the gas concentration levels, Paramount still had an underlying duty to aerate the root stock properly after fumigation. Paramount argues that because the district court failed specifically to address the Nurseries' contention that Paramount had an independent duty to aerate the root stock properly, the district court found no such duty existed. This is not a fair reading of the record or the facts. The district court implicitly found that Paramount had a duty to aerate the root stock properly when it concluded that 6 [i]n view of Paramount's failure to exercise reasonable care to see that gas concentration levels in the boxes were at safe levels for the root stock, the Court finds that Paramount is jointly and severally liable for the injuries to the root stock caused by exposure to excessive gas concentrations. 7 (Emphasis added.) 8 This conclusion is supported by the Compliance Agreement between Paramount and PPQ, which obligated Paramount to adhere to PPQ's Treatment Manual. The Treatment Manual requires that the open-top, non-permeable containers used to transport the root stock be aerated by either removing the containers' plastic liners or by tipping the containers on their sides in order to allow the methyl bromide, which is heavier than air, to flow out of the container. Because Paramount did neither, we conclude that Paramount breached its duty to the Nurseries under the Compliance Agreement and Treatment Manual.II. Paramount's Cross-claim for Indemnity Against the United States 9 Paramount argues that it is entitled to indemnification because it was merely an agent or employee of the government, under 28 U.S.C. § 2671, when it fumigated the Nurseries' root stock. Paramount contends that because it was obligated under the Compliance Agreement to follow the Treatment Manual and to allow PPQ officers to supervise all aspects of the treatment procedure from start to the final release of the commodity that Paramount was not an independent contractor. We disagree. 10 Paramount did not act as a federal employee or agency. Under § 2671, the critical distinction between an agency of the United States and an independent contractor is the power of the federal government to control the detailed physical performance of the contractor. United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 1976, 48 L.Ed.2d 390 (1976) (quotation omitted). In concluding that a community action agency was not a federal agency, the Orleans Court stated that 11 the question here is not whether the community action agency receives federal money and must comply with federal standards and regulations, but whether its day-to-day operations are supervised by the Federal Government. 12 Id. at 815, 96 S.Ct. at 1976 (footnote omitted). 13 Paramount argues that because PPQ was required to supervise all aspects of the treatment procedure, Paramount was under the detailed control of PPQ. This argument misapplies the concept of agency under the Federal Tort Claims Act (FTCA). Paramount did not act as a federal agency; it was an independent contractor who, in order to deliver a valuable service to its client, had to follow detailed fumigation regulations. Paramount did not have to comply with the Treatment Manual, but chose to in order that the fumigated root stock would be admitted to the country. Because we conclude that Paramount was not an agent or instrumentality of PPQ and was thus not entitled to indemnification by the United States, we affirm the district court's judgment against Paramount. 14