Promptly Settles Claim following Accusations of Sanctionable Discovery Misconduct

In Powers v. United States, 2:21-cv-00517-TSZ, a case from the Western District of Washington, has been full of dramatic twists and turns over the past two (2) weeks.  The matter involved the Plaintiff Michael Powers’ action against the United States pursuant to the Suits in Admiralty Act (“SIAA”) to recover for injuries suffered on May 2, 2019, when his boat, a 20-foot Duckworth Navigator, sank in navigable waters approximately 1.2 miles west of Deception Pass Bridge.  The Plaintiff alleged that his vessel was hit by a rogue wave, shattering the windshields, which caused the vessel to quickly fill with water.  His cousin died 20 to 30 minutes after being thrown from the Vessel. Plaintiff was pulled from the water approximately 8 hours later by the crew of the MACY RAE.

The Plaintiff alleged that his rescue was substantially delayed and his injuries worsened by the negligence of the Coast Guard and he sued under a “worsened the situation” theory of rescuer liability.  A third party called 911 to report what he believed to be an outbound boat disappear and capsize in rough seas.  The Coast Guard issued an Urgent Marine Information Broadcast and an unrelated vessel reported seeing a 22-24 hardtop boat inbound and not in distress.  From there, the Coast Guard negligently determined that it was a ‘false alert’ and issued directives to other agencies with assets in the water, the media, and the public that no vessel was in distress, effectively terminating third-party efforts to find and rescue Mr. Powers.

The government sought to dismiss the lawsuit on the grounds that the “discretionary function” exception applies to the Coast Guard’s conduct and therefore the court lacked subject matter jurisdiction over the claim.  The discretionary function exception, which has been held in the Ninth Circuit to be an implied exception to the waiver of sovereign immunity under the SIAA, applies if: 1) the conduct was discretionary (and not merely adherence to a mandatory statute, regulation or directive); and 2) if it was discretionary, whether the governmental decision was “of the kind the exception was designed to shield.”  The purpose of the doctrine is to protect governmental agencies from judicial second guessing when acts or omissions are based on “considerations of public policy.”

In rejecting the government’s motion, the Court found that evidence in the record showed the Coast Guard had failed to satisfy its own standard of care as a Search and Rescue Mission Coordinator, before determining the report was a false alert and ceasing search and rescue efforts.  As such, the Court ruled the exception did not apply because the decisions in the matter were discretionary and not based on considerations of public policy.  The Court ruled that it was an open factual question reserved for trial as to whether the Coast Guard’s actions or omissions were negligent.

On February 9, 2023, Powers’ attorneys filed a twenty-two (22) page motion for sanctions supported by a declaration and nineteen (19) exhibits, alleging that the government had improperly withheld key evidence in discovery and abused the discovery process. Most critically, the Plaintiff alleged that the government withheld documents and evidence which related to and conclusively refuted the government’s claim of discretionary function immunity, including a powerpoint presentation from Coast Guard personnel regarding the case in 2019 which included as section entitled “what the Coast Guard did wrong,” identifying key issues such as: anchoring bias, groupthink, status quo bias, attribution error and introspection illusion.  The outstanding discovery was not produced by the government until February 7, 2023, five (5) days after the motion to dismiss was denied and less than a month before trial was set to begin. Other allegations in the motion include that the government withheld: “’alignment’ emails discussing how to frame the facts of what occurred in the Case Study, emails discussing changes to the Coast Guard’s formal timeline of events (the MISLE log), communications between the Coast Guard and [third-party] agents regarding the case, and additional unproduced Coast Guard logs (“situation reports”). The documents also revealed that the government [allegedly] did not disclose at least ten people with knowledge of the incident, and demonstrate that certain Coast Guard witnesses had a much greater understanding of the case and its subsequent investigation than they testified to under oath.”

District Judge Zilly promptly held a conference on the motion earlier this week (February 13, 2023).  At the conference, the government announced that a settlement had been reached. On February 15, 2023, the Court entered the parties’ Consent Judgment directing the United States to pay Mr. Powers $875,000, with each party to bear its own costs and fees.

To read a copy of the District Court’s Order denying the Motion to Dismiss, please click here.

Source: Chalos & Co, P.C.