Insurers seek reimbursement from feds at Sixth Circuit for 2016 Great Smoky Mountains fire

CINCINNATI (CN) — A group of insurance companies argued Wednesday before the Sixth Circuit that the federal government is liable for property damage from the 2016 Chimney Tops 2 wildfire because it didn't control the fire's spread or use the proper command structure.

State Farm Fire and Casualty Company and Allstate Fire and Casualty Insurance Company, among others, claimed the failure of the National Park Service to adhere to certain guidelines during the initial stages of the wildfire was a breach of mandated safety protocols that allows the service to be sued under the Federal Tort Claims Act.

The insurers filed suit in 2019 alongside several individual plaintiffs, but a federal judge dismissed a portion of the insurers' complaint in November 2020 and determined the "discretionary function" exemption applied to the fire monitoring claims.

U.S. District Judge Ronnie Greer, an appointee of George W. Bush, agreed that the Fire Management Plan of the national park and its related fire management handbook imposed some duties on the federal government to monitor the fire, but ultimately concluded there was significant leeway in how the government could satisfy its requirements.

"While certain phrases could imply that certain actions are mandatory," Greer said in his opinion, "the Fire Monitoring Handbook explicitly allows the NPS to use its discretion to pick an appropriate method that may not be listed in the handbook."

This discretion allowed the National Park Service to appoint a single individual to multiple roles during the wildfire. It also shields the service from liability for failure to follow a decision support system meant to provide checks and balances during an emergency, according to Greer.

In their brief to the appeals court, the insurers argued that the service's appointment of Greg Salansky to operate simultaneously as incident commander, zone fire management officer, safety officer and several other positions during the fire was in direct contradiction of government policy that requires a single individual for each role.

The government had no discretion to disregard the mandate, according to the insurers; they say Salansky's conduct during the blaze directly resulted in damages and established jurisdiction in federal court.

Attorney Jonathan Tofilon of Grotefeld Hoffmann LLP in Geneva, Illinois, argued Wednesday on behalf of the insurance companies and accused the government of trying to "zoom out" too far to avoid liability.

"At this point, the court has to examine how the plaintiffs have pled," Tofilon told the court. "We are only examining the conduct the plaintiffs claim has proximately caused their damages."

U.S. Circuit Judge John Nalbandian, a Trump appointee, questioned Tofilon about his clients' claim regarding the command structure ignored during the fire.

"Each of these roles ... has responsibilities that are spelled out exactly," Tofilon said. Appointing one officer to multiple roles "is banned because they are completely separate jobs. We have one person attempting to do everything, and that is unsafe."

Senior U.S. Circuit Judge Danny Boggs, a Ronald Reagan appointee, seemed skeptical of the attorney's argument.

"I get the idea that the manual says 'Do it this way,' but we're fighting about bureaucratic language without a strong feeling of the connection" to the damages, he said.

Tofilon told the panel: "There is no allegation of exigent circumstances that would have required streamlining of the system."

The federal government pushed back against the insurance companies' claims in its brief and emphasized that even though "best practices" may not have been implemented during the wildfire, the Federal Tort Claims Act precludes any civil action.

"The policies cited by plaintiffs provided guidance," the government argued. "They did not 'mandate that the Park Service' monitor the fire, staff its response or document its fire-response decisions 'in any specific manner.'"

According to the federal government, the handbook cited by the insurers is meant only to provide "guidance" to park officials tasked with fighting wildfires, but "is not a source of any specific directives that could have been violated."

Attorney Jeffrey Sandberg from the U.S. Department of Justice argued on behalf of the federal government and highlighted the lack of any concrete directives for fire suppression.

"You're supposed to monitor this fire every 30 minutes and you didn't do that," Nalbandian said. He asked why that didn't establish the insurers' case.

Sandberg answered: "This fire was monitored ... during the time they could actually see it." He said the 30-minute time frame was a recommended guideline. "Here, there is nothing that says, 'here is exactly how you're supposed to monitor the fire.'"

"What about the command structure?" Nalbandian asked.

"We think that is best practice," the attorney said. "This is an exigent circumstance, many staff were gone for Thanksgiving and Officer Salansky knew how to do all these jobs.

"Even if you assume that it's mandatory to have multiple people in these roles, you still have all this discretion left about how to fight this fire. There was no specific set of marching orders," he concluded.

Boggs said: "They're not challenging those decisions. They're saying the structure for making those decisions was faulty."

Senior U.S. Circuit Judge Ronald Gilman, a Clinton appointee, quipped at the conclusion of the arguments: "It's not fair to give us such a tough case."

No timetable has been set for the court's decision.

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