Most contractors are aware that the failure to properly install and maintain stormwater discharge and erosion and sediment control (E&SC) measures at their construction sites can lead to severe penalties from local, state, and federal authorities. Violations of the federal Clean Water Act, for instance, can result in fines of over $50,000 per day per violation. However, a recent decision by the U.S. Court of Appeals for the Fifth Circuit serves as a reminder that stormwater and E&SC violations may also lead to contractors’ liability to private persons.
Hoyt v. Lane Constr. Corp., 927 F.3d 287 (5th Cir. 2019) concerned the death of Jeffrey Hoyt, whose car allegedly slid off the roadway on a patch of ice and flipped into an adjacent pool of water, drowning him. Hoyt’s estate and survivors (the “Hoyts”) brought a premises liability claim against Lane Construction, the contractor working on the roadway at the time of the accident. The Fifth Circuit overturned the District Court’s grant of summary judgment in favor of Lane and allowed the suit to go forward.
The District Court had held that Lane, as a Texas Department of Transportation (“TxDOT”) contractor, was statutorily immune from the Hoyts’ claims. Similar to statutes in some other states, Texas law provides:
A contractor who constructs or repairs a highway, road, or street for the Texas Department of Transportation is not liable to a claimant for personal injury, property damage, or death arising from the performance of the construction or repair if, at the time of the personal injury, property damage, or death, the contractor is in compliance with contract documents material to the condition or defect that was the proximate cause of the personal injury, property damage, or death.
However, the Court of Appeals disagreed on the issue of immunity, citing evidence that TxDOT had determined that Lane was not properly removing accumulated silt from the site and instead was pushing it off along the right of way. The Hoyts argued that this silt caused the pooling of water which froze. The Hoyts’ expert testified that Lane’s “failure to property install and maintain sediment control measures” in accordance with its TxDOT contract cause water to flow onto the roadway. Also, TxDOT found that Lane failed to install stormwater runoff control measures in accordance with TxDOT specifications and that the measures were not performing or properly maintained. Because there was evidence that Lane may not have been in compliance with the TxDOT contract in a manner relevant to the accident, Lane was not entitled to summary judgment on the statutory immunity issue.
The Court of Appeals then also reversed the District Court’s grant of summary judgment in favor of Lane on the Hoyts’ premises liability claim. The District Court had found that Lane did not have the required actual knowledge of the alleged unreasonably dangerous condition (icy patch) on the premises (site). The Court of Appeals ruled that actual knowledge could be inferred from Lane’s knowledge of the drainage problems associated with its work and knowledge of the 4-6” of rain and freezing temperatures at the site on the night of the accident. Therefore, the Hoyts were allowed to proceed with their claim against Lane.
The fact that a contractor may be held liable in a private negligence suit for stormwater and erosion and sediment control failures is important because even though environmental fines imposed by governmental authorities can be significant, they can pale in comparison to the potential liability for property damage, personal injury, or death. This is just another reason why contractors must pay close attention to environmental compliance.