National Union Fire Insurance v. United States

*1417 OPINION

This case turns on the discretionary function exception to the federal government’s waiver of sovereign immunity for tort liability, under the Federal Tort Claims Act, 28 U.S.C. § 1346 (b).

Facts

For about a half century, the Army Corps of Engineers (Corps) has developed and improved King Harbor, in Redondo Beach, California. The original purpose of the project was “to establish a harbor for small-craft navigation.” Section 101, River & Harbor Act of 1950, Pub.L. No. 81-516, 64 Stat. 163, 166 (1950). It did so by building a fourteen foot breakwater, which was completed in 1958.

The fourteen foot breakwater built in 1958 was not high enough to keep waves from damaging boats in the harbor during storms. In the mid sixties, the Corps raised the level of portions of the breakwater to 22 feet. By then the City of Redondo Beach had begun developing this entirely man-made harbor. The City had constructed “moles,” apparently massive deposits in the harbor on which building could take place. By the 1980s, the City of Redondo Beach was collecting $3.7 million in rent from the harbor, eight million people a year were visiting, and there were numerous restaurants, hotels,…