Fireworks Blast Claims Belong in State Court

     (CN) – Claims arising from a deadly 2011 fireworks explosion in Hawaii must be tried in state court, the Ninth Circuit ruled Thursday, affirming a federal judge’s decision.
     The explosion at Waikele Self Storage in Waipahu on Oahu occurred as workers of Donaldson Enterprises took a break from dismantling firework tubes. It killed five people.
     The storage facility contained three shipments of imported fireworks – 1,666 cases – seized in Honolulu by federal law enforcement over a three-year period. Donaldson was disposing of the shipments under a subcontract with VSE Corp. of Alexandria, Virginia, which handles storage for large amounts of government-seized property.
     The families of the explosion’s victims sued alleging VSE’s liability for the deaths. The contractor removed the case to Federal Court, but a federal judge remanded the case to state court – prompting VSE’s appeal to the Ninth Circuit.
     On Thursday, a three-judge panel upheld the remand to state court, rejecting VSE’s argument that there was causation between the work it performed at the direction of a federal officer and the plaintiffs’ claims.
     “VSE faces a steep hurdle in demonstrating the requisite causal nexus between the plaintiffs’ claims and a federal officer’s direction because VSE did not challenge the district court’s factual findings supported its dismissal of VSE’s third-party complaint against the United States,” Circuit Judge Johnnie Rawlinson wrote in the panel’s 28-page opinion.
     VSE’s third-party action alleged the government had a duty to disclose and provide a warning about the risk of the fireworks’ harm.
     A “significant flaw” in VSE’s argument, Rawlinson said, is “the lack of any evidence of the requisite federal control or supervision over the handling of the seized fireworks.”
     She also said that the contract detailing VSE’s duties with regard to the fireworks does so in general terms, and “VSE points to no contractual provisions or specifications from a federal officer relevant to its destruction of the seized fireworks.”
     “VSE’s parsing of the contract in an attempt to support federal officer removal is unavailing,” she wrote.
     The panel also rejected VSE’s claims that it had the appropriate federal defenses for removal to Federal Court. VSE does not have a government-contractor defense because that defense is available only to military contractors, the panel held.
     Nor does the corporation have derivative sovereign immunity because “it was undisputed that Donaldson and VSE designed the destruction plan without government control or supervision,” Rawlinson wrote, remanding the case to Hawaii state court.
     Neither side could be reached for comment on Thursday.

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