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5th Circuit to Weigh Jurisdiction Over Contractors in Iraq


by Daphne EviatarThe American Lawyer
January 29th, 2008

A year after Iraqi civilians and U.S. soldiers tore down the towering statue of Saddam Hussein in Baghdad's Firdous Square, a few dozen American civilians at a U.S. military base in Iraq climbed into a row of camouflage tractor-trailers and awaited instructions. Earlier that morning, the drivers, employees of Houston-based Kellogg Brown & Root Inc. (KBR), had been told that the roads outside Camp Anaconda, about 70 miles north of Baghdad, were labeled Code Red -- off limits. That wasn't a big surprise. Local radio and Armed Forces television had been reporting for days that U.S. military units and civilian contractors were under heavy attack. Weeks earlier, four security guards working for Blackwater USA had been shot, burned, dismembered and strung from a bridge in Fallujah; that city was now in chaos. Still, here inside "the wire," as the drivers called the well-guarded camp, civilian truckers counted on KBR for their safety.

Around 10 a.m., the KBR security adviser announced a change in status. The roads were now Code Amber, he said -- open for traffic. If the men were concerned about the last-minute change, or worried about driving unarmored military vehicles instead of the white trucks they usually drove to distinguish them as civilians, there was nothing they could do about it: KBR employees must follow the instructions of their convoy commanders.

Things would only get stranger. As the trucks lined up at the gate to leave, the drivers were told that their destination had changed. Instead of Camp Webster, where they'd originally been assigned to go, they'd be delivering fuel to Baghdad International Airport. Most had never been to the airport before; some had never even been outside the secured camp. None knew the route or was given a map.

"A soldier drew a map with a stick in the sand, that's all I saw," recalls Edward Sanchez, an affable trucker from Silver City, N.M., who was driving for KBR that day. Ray Stannard, a trucker from El Paso, remembers it well. "They just said, 'Follow the truck in front of you.'" That's just what they did. One convoy had already been sent toward the airport by a different route. Another sent on the same route had turned around, though these drivers didn't know why. Now it was their turn. It was late morning by the time the mile-long convoy of about 25 trucks drove out the gates of Camp Anaconda in a cloud of dust and headed west.

As they passed the broken-down shacks and rundown buildings along the freeway, it was eerily quiet. "It started out smooth going," recalls Stannard, a lanky 49-year-old with a ruddy face and an old Marine Corps tattoo on his right forearm. Then, about 20 minutes into the trip, the scene changed. "We started seeing our trucks on fire," he says, describing KBR tractor-trailers in flames along the road.

As they reached a stretch in the road where several overpasses cross the highway, "we saw women dropping what looked like buckets of cement on the trucks," says Stannard. Then he heard the staccato racket of gunfire. "I heard Zimmerman [Tommy Zimmerman, another driver] on the radio, saying, My truck is breaking down,' and I could hear rounds popping off." Next he heard Tommy Hamill, the convoy commander, say he'd been hit. "I knew we were in trouble now," Stannard says.

Within seconds Stannard's truck was under fire, too. So were the trucks in front of and behind him, the gunfire now steady. "We were taking so many rounds, they were hitting fuel tankers. Fuel was spilling out everywhere."

Sanchez, a former Navy mechanic built like a wrestler, was driving the 14th truck in the convoy that day. "It was like spaghetti," he says, describing how fuel was spurting in streams out of the bullet holes that riddled their tankers. "Bill Bradley [another driver] yelled for help twice. That was the last I ever heard from him." Soon another driver was yelling that he was on fire, begging not to be left to die in Iraq. Calls for help over the radio were the last that Sanchez and Stannard heard from seven of the KBR drivers that day. Those screams, the sounds of the gunfire and the memory of watching fellow driver Steven Fisher bleed to death in the Humvee that rescued them still haunt them.

It was April 9, 2004 -- Good Friday. In what came to be known as the Good Friday massacre, some 300 Iraqi insurgents attacked the KBR convoy for hours with mortar rounds, automatic gunfire, improvised explosive devices and rocket-propelled grenades. Six American drivers were killed, 14 were wounded and another remains missing. He is presumed dead, though his death has never been officially acknowledged by KBR.

IRAQ WAR SETS RECORD FOR OUTSOURCING OF MILITARY FUNCTIONS

Death in a war zone is nothing unusual. But the deaths of American civilians working for private companies contracting with the U.S. military is a relatively new phenomenon. The current war in Iraq has involved more outsourcing of what used to be military functions than any previous war in American history. More than 160,000 civilians (some American, many from other countries) now work to support the U.S. government in Iraq and Afghanistan. They do everything from guarding U.S. officials and dignitaries to trucking fuel, food and other supplies to military bases -- jobs that used to be done by soldiers. More than 1,000 private civilian contractors (including 110 KBR employees) have been killed in Iraq, and another 13,000 have been wounded.

Employees of private military companies like KBR know going into it that driving in Iraq isn't the same as hauling a rig through cornfields in Iowa. But when these men signed up for the job, which paid roughly $1,500 a week -- about double what they were earning at home -- they were promised that they wouldn't be participating in military operations or driving in combat zones. They'd be in armored civilian cars or guarded by the U.S. military. Their safety, they were told, would not be compromised. In 2004, after the U.S. government had declared victory, recruiters were offering drivers an opportunity to "Work in Rebuilding Iraq and Earn $60,000 to $200,000 Per Year Guaranteed!" As one Internet advertisement promised: "Full 24 hour a day U.S. military protection will be in place to insure safety. With new heightened security you'll be 100% safe." A KBR manager later confirmed the promise to his staff: "There is not one thing that we do that is worth injury to an employee."

Why and how those commitments to KBR's employees apparently unraveled on April 9, 2004, is now the subject of a controversial and critically important suit. In May 2005 Ray Stannard and Edward Sanchez, along with seven other drivers who survived the massacre -- and relatives of those who didn't -- sued KBR and its then-parent, Halliburton Co. (Kellogg Brown & Root was a subsidiary of Halliburton until last year, when it changed its name to KBR.) They've also sued the Cayman Islands-based subsidiary of Halliburton that hired them, as well as the recruiting companies that published the help-wanted advertisements. The plaintiffs claim that the drivers were fraudulently induced into believing they would not be sent into active combat zones, only to be sent out on a route where KBR knew the drivers were likely to be attacked.

"KBR had internal information that it was going to be attacked that day," says Christina Fountain, a partner at Lopez McHugh in Newport Beach, Calif., who is representing the plaintiffs in the case, Fisher v. Halliburton/KBR. "This was a road that was in battle, in active combat, and Halliburton/KBR knew it," adds co-counsel T. Scott Allen, a partner at Cruse, Scott, Henderson & Allen. He represents the plaintiffs from Houston, where the case was filed.

There is plenty of evidence to support the plaintiffs' claims. But at this point, thanks to the arguments of KBR lawyers from McKenna Long & Aldridge, the facts are irrelevant, at least as a legal matter. In September 2006, shortly after KBR hired McKenna to take over the case from longtime KBR counsel Jones Day, the federal district court in Houston dismissed the case, declaring it nonjusticiable. McKenna partners David Kasanow and Raymond Biagini convinced the court that the case raises a political question beyond the competence of the federal judiciary.

The plaintiffs have appealed that decision to the 5th U.S. Circuit Court of Appeals. But if the district court's decision stands, it will mean that the actions of virtually any military contractor working for the federal government could be deemed beyond the authority of the courts -- and immune from American law.

NEW SET OF LEGAL ISSUES FOR CONTRACTORS' DEFENSE ATTORNEYS

Indeed, that's the sort of argument that lawyers representing private military companies like KBR, CACI International Inc. and Blackwater are already making in courts across the country. As the war in Iraq and hostilities in Afghanistan leave a growing number of dead and wounded civilian employees, a new set of legal issues is confronting the lawyers who defend the contracting companies. "Issues that involve the intersection of contracting and military operations -- contracting in a military, hot or active theater, where contractors are performing work or providing services that look a lot like what the military provides -- that's where it's particularly interesting now," says E. Sanderson Hoe, who heads McKenna's government contracts group. "You have contractors providing security, carrying weapons, doing things the military also does. From a practitioner's standpoint, that's new for most of us."

These issues may be new, but lawyers knew they would cause concern even back in 2004, just after the Good Friday massacre. Stannard, Sanchez and other survivors were sequestered in a converted meat locker at Camp Anaconda after the incident, instructed by KBR officials not to speak to the media about what had happened. Later, as they recovered from their injuries in a Kuwaiti hospital, some of the survivors, including Stannard, were told that KBR had arranged for them to receive a military medal of honor. There was only one catch: They would have to sign a form releasing the company and the military from liability for what had happened. Paragraph 9 of the document stated:

"I agree that in consideration for the application for a Defense of Freedom Medal on my behalf that on behalf of myself, my heirs, executors, administrators, assigns, and successors, I hereby release, acquit, and discharge and do hereby release, acquit, and discharge KBR, all KBR employees, the Military and any of their representatives ... from any and all claims and any and all causes of action, of any kind or character, whether now known or unknown, I may have against any of them."

For months, officials from Halliburton and KBR, as well as their lawyers from McKenna and Jones Day, declined to be interviewed for this article. It wasn't until the day before it went to press that Kasanow agreed to comment on his firm's legal arguments. Indeed, McKenna has taken pains to ensure that the facts of the case remain secret, both by seeking to dismiss the suit, thereby preventing further discovery, and by convincing the judge overseeing it to file many of the documents, deposition testimony and other evidence under seal, claiming that their release could jeopardize national security. The material remains under seal, even though, after reviewing the evidence, the U.S. Attorney's Office and the U.S. Department of Defense decided that most of it did not involve state secrets or national security concerns and declined to intervene in the case. Still, the documents that are available reveal the bumpy road this case has taken and the careful strategy that McKenna's lawyers have crafted in an attempt (only partly successful) to keep the facts of the incident and the question of government contractor liability hidden from public scrutiny.

The case didn't start out so well for KBR. The plaintiffs, represented by Fountain and Allen, filed their first complaint in state court in Houston in April 2005. Allen, a longtime Texan who usually defends doctors and hospitals in medical malpractice cases, says he was brought into the case by Ramon Lopez of Lopez McHugh, whom he'd opposed in a previous matter. (Allen now calls the KBR litigation "the single most significant case I've ever worked on.") Jones Day, representing Halliburton and KBR, quickly had the case removed to federal district court in Houston, where it was assigned to Judge Nancy Atlas, a 1995 Clinton appointee with a reputation for fairness and efficiency.

Within weeks, the Jones Day team, led by employment partner Katie Colopy, filed a motion to dismiss, claiming the employees' case was barred by the Defense Base Act and the Federal Tort Claims Act. The firm argued that the DBA, a sort of workers' compensation program for employees of government contractors injured on the job, doesn't allow employees to sue their employers for injuries. In addition, the firm claimed that the FTCA's combatant activities exception immunizes the government and its contractors from tort claims arising out of injuries in combat.

In a written opinion filed July 1, 2005, Atlas rejected both of Jones Day's arguments. She reasoned that although the DBA normally provides the exclusive remedy for injured employees on a U.S. military base, it does not apply where, as here, the employees claim the injury was intentional. In the Fisher case, the plaintiffs attorneys had carefully crafted their claims to allege that KBR knowingly sent them out as a decoy convoy, intending for them to be assaulted by insurgents. (They also claim KBR intentionally sent them out needlessly, in order to charge the government for the unnecessary shipment, since under its cost-plus contract with the government, KBR made a profit on every dollar it spent.) Therefore, Atlas ruled, the DBA did not bar the plaintiffs' claims.

Neither did the FTCA. Although the combatant activities exception means that the United States itself can't be sued for injuries arising out of combatant activities of its military forces, that immunity only extends to private military contractors in a few rare exceptions. None of those enumerated by Jones Day applied in this case, Atlas ruled. Jones Day's subsequent motion for reconsideration was denied.

Nine months after Atlas' decision, a new team of KBR lawyers appeared before her. Two McKenna partners, joined by an Assistant U.S. Attorney for Houston, and by conference call, a Department of Defense lawyer, argued that discovery in the case should be halted until the government had an opportunity to review the documents and vet the testimony that might be elicited. Atlas agreed to stall the case temporarily but refused to dismiss it. She made clear her irritation that KBR's lawyers were attempting this argument almost a year after the case had been filed.

However, the judge's view would soon become irrelevant. On May 15, 2006, the case was transferred from Atlas to a newly appointed federal district court judge, Gray Miller. (According to the court order, this was a random reassignment due to the appointment of a new judge.) Miller, a former police officer, was a partner at Houston's Fulbright & Jaworski and a contributor to George W. Bush's presidential campaign before being appointed to the federal bench.

MOTION TO DISMISS UNDER POLITICAL QUESTION DOCTRINE

The McKenna lawyers saw an opportunity. On June 30 they made a new motion to dismiss the case, repeating some of Jones Day's arguments but adding a new twist. This time KBR's lawyers claimed that the case should be dismissed under the political question doctrine, a discretionary device that allows the court to avoid deciding questions it believes are best left to other branches of government. In their motion, McKenna lawyers claimed that judging military contractors would require judging the military that hired them, and that the conduct of the military should be judged not by the courts but by the president and Congress. As Kasanow puts it: "If a lawsuit inevitably would cause the court to have to trespass into an area that's reserved exclusively for executive branch discretion, the court must decline jurisdiction."

Miller seized on that argument. In September 2006, he dismissed the case, asserting that there would be no way to "try a case set on a battlefield during wartime without an impermissible intrusion into powers expressly granted to the executive by the Constitution." Ruled Miller: "Sometimes, the law is that the judicial department has no business entertaining the claim of unlawfulness."

It was a huge victory for McKenna and KBR. But it was a controversial decision that some experts think was wrong on the law. Although consistent with some recent federal opinions in other Texas cases involving KBR, it clashes with several others around the country. The plaintiffs have appealed.

Miller's decision exhibits "very weak reasoning," says Laura Dickinson, a professor at the University of Connecticut School of Law and an expert on the law governing private military contractors. "Obviously there are certain matters that are nonjusticiable, but simply because an act took place in a contingency operation doesn't mean the court can't decide a claim," she says. "That alone should not be the basis for assertion of the political question doctrine."

In McMahon v. Presidential Airways, a case brought by the survivors of U.S. soldiers killed in a plane owned by a subsidiary of the private military firm Blackwater USA, the 11th Circuit in October rejected a similar political question doctrine argument. The appellate court decided that the doctrine would only apply if the case required the court to directly examine a decision by the military. Even though Presidential Airways was operating in Afghanistan for the military and transporting U.S. soldiers, the court ruled that the company might have had enough control of its own operations that judging its actions would not require passing judgment on military decision making.

That's exactly the plaintiffs' argument in the KBR case. "None of it is a political question," Allen says.

But Crowell & Moring partner David Hammond disagrees. He represents government contractors and heads the General Counsels Committee for the International Peace Operations Association, an industry group for private security firms.

"Anytime a contractor is sued in a factual circumstance where the military is involved and has some responsibility and provision, then I think the political question doctrine will be the frontline defense," he says, "I think the case was correctly decided." In fact, he says, the political question defense is particularly strong in the Fisher case because the Army was supposed to provide security for the KBR convoys. "Anytime you have the military having responsibility for security and somebody gets injured or killed from an enemy attack, it will always implicate whether the military provided sufficient security."

The Fisher plaintiffs argue that under its contract with the Department of Defense and promises made to its employees, KBR had the authority to refuse to send out convoys based on its assessment of the danger involved. Even though the military provided military escorts for civilian convoys, Fountain says, "the evidence before the judge in our case showed that the military was not in control of these drivers."

Allen, too, makes this point. "It is Halliburton/KBR, not the Army, who has the authority -- and more importantly, the responsibility -- to ensure that their employees do not drive trucks in areas of known combat," he told a congressional committee investigating the incident in September 2006.

Indeed, KBR employed security specialists specifically to assess route dangers. As Halliburton spokesperson Beverly Scippa indicated in an e-mail sent in March 2005 to Pratap Chatterjee, a freelance journalist who operates a Web site called CorpWatch: "KBR does have the right to refuse a mission," the e-mail says, "and because KBR's primary concern is for the safety and security of all personnel, we have exercised that right on numerous occasions, both before and after April 9 [2004]." After the Good Friday massacre, KBR canceled all convoys for several days.

Kasanow, however, says the military was in charge of convoy security. "The Army declaration makes clear that the military decides everything and is responsible for everything," he says, referring to a document filed with the court under seal. "Notwithstanding what individual KBR employees or even KBR [management's] view of the world was, it has nothing to do with KBR's contractual responsibility and who's responsible for what."

On behalf of the plaintiffs, Fountain counters that if the case was likely to intrude on military matters, the U.S. Department of Justice, which had appeared with McKenna asking to review the evidence, would have filed an amicus brief making that argument. "Instead, the Justice Department, after seeing the evidence, filed a document saying [it] will not be filing an amicus brief," she says. "We believe that after [it] saw the evidence, it did not want to go on record as supporting KBR's position because the evidence demonstrates that this was not a military operation." (The Justice Department declined to comment for this article other than to say it has no current involvement in the case.)

Although McKenna has so far succeeded in getting the case dismissed and keeping much of the evidence under wraps, some facts have trickled out. Last year, responding to a request from the House Oversight Committee, which was investigating contracting abuses in Iraq, Allen and several former KBR employees testified about their experiences.

Sean Larvenz, a former KBR driver, was commanding a different convoy in the same area on April 9, 2004. He described how he'd been instructed to lead his convoy past Baghdad International Airport toward Camp Anaconda. As he approached the area surrounding the airport shortly after 9 a.m., he testified, he saw and heard on his radio about "heavy insurgent attacks" at the main supply route junction -- the same place where the drivers in the Fisher case were attacked. He said he immediately informed KBR of the attacks, turned his convoy around, and returned to the airport.

Larvenz testified that KBR always had access to current information about route conditions through its satellite-linked computer system, which is monitored constantly by KBR's security team. Despite warnings from him and others, he said, KBR sent the convoy with Stannard, Sanchez and the rest from Camp Anaconda toward the airport. "Predictably," he added, "they too came under heavy insurgent attack, and seven KBR/Halliburton employees unnecessarily lost their lives."

Sanchez, too, testified before the committee. He recounted that when he and the other survivors finally arrived at the airport after the hours-long attack, a KBR convoy commander there said that "he could not believe that we had been sent down that road, since he was attacked on the same road earlier that day and sent word to KBR/Halliburton to not send anyone down that road due to the hostilities." Sanchez added that he also learned when he arrived that the fuel his convoy was carrying wasn't needed. The fuel bags at the airport were already full.

DEPOSITIONS SAY KBR RECEIVED REPEATED WARNINGS

The unprotected portions of depositions from other former KBR employees confirm that KBR received repeated warnings about the danger that day. In fact, every convoy KBR sent out along that supply route that morning had been attacked, says Allen, a point that is confirmed by depositions from KBR employees. The plaintiffs and their lawyers also say they have evidence of communications among KBR personnel that are under seal revealing that KBR security advisers argued with managers about whether to send the Hamill convoy out. Security advisers repeatedly warned their superiors that if the men were sent out, they could be killed.

"When I saw some of the evidence in black and white, that's when I really knew they committed a crime. The evidence I read, that other convoy commanders knew other people had been hit, and they knew they could get in trouble for sending us out," says Stannard, looking down and fingering the silver bracelet he wears engraved with the name of Timothy Bell, the driver who disappeared that day and is still missing. "That's when I knew -- these people are murderers." Stannard suffered a broken arm and was shot in the leg during the assault.

Not everyone who was there that day concurs. Hamill, the convoy commander, was captured by insurgents that day and held hostage for more than three weeks before escaping. Hamill stayed on the payroll for KBR, which occasionally shuttled him from his home in Macon, Miss., to Houston to tell new recruits about his experiences. He says he doesn't blame KBR for what happened. In fact, he's applied to work for the company again in Iraq. "I'm a little old-fashioned and old-school," he says in a heavy southern drawl. "We're in a war. Sometimes things don't go as planned. Sometimes you just have to deal with it." (Hamill later wrote a book about his experience.)

Increasingly, private contractors who aren't trained to work in battlegrounds are paying the price. But whether their employers will ultimately be held accountable for their own actions will depend on the circumstances, on their lawyers, and in some cases, on the judge.

Take, for example, a case filed in Washington, D.C., against military contractors Titan Corp. and CACI. The plaintiffs are hundreds of prisoners at Iraq's Abu Ghraib prison, where the U.S. military in 2004 admitted that detainees had been abused, assaulted and humiliated. The plaintiffs in Saleh et al. v. Titan et al. claim that employees of the companies -- which provide interpreters and interrogators for the Defense Department -- tortured, raped and killed prisoners in 2003 and 2004. In November, the district court dismissed the case against Titan, which provided the translators, concluding that the contractors were under the exclusive control of the military chain of command.

But the court refused to dismiss the charges against CACI, which provided interrogators accused of torture. Based on the facts produced so far, the court said, CACI interrogators appeared to be answering to two masters -- the military and CACI supervisors. If the supervisors encouraged the torture or had the authority to stop it but didn't, the company could be liable. That sort of fact-specific analysis is strikingly different than the one applied in the Fisher case, where Miller appears to have assumed that because KBR was working for the Defense Department, the court cannot judge the company's actions without also judging the conduct of the U.S. military.

As more cases arise out of the war in Iraq and at times yield conflicting rulings, the question of when and if private military contractors can ever be held liable in civil suits for their actions may ultimately reach the U.S. Supreme Court. In the meantime, the legal uncertainties will continue to keep lawyers busy. "We'd hope that sooner or later, the war in Iraq will cool down," says Kasanow, who adds that he now spends about 80 percent of his time on Iraq-related tort cases. "But wherever the next war will be, it's going to be the same thing. This is an issue that's not going to go away."






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