Liability of State Departments of Transportation for Design Errors (2017)

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3LIABILITY OF STATE DEPARTMENTS OF TRANSPORTATION FOR DESIGN ERRORS By Larry W. Thomas, Washington, DC I. INTRODUCTION The digest discusses transportation departments’ liability for design errors and omissions.1 As dis- cussed in Section II, in actions against transportation departments for a defective plan or design causing an injury to a motorist or other member of the public, the threshold question may be whether the State has waived the immunity of the transportation depart- ment for the precise claim being asserted. Most states have enacted tort claims acts, governmental immunity acts, or the equivalent that generally pre- serve the State’s sovereign immunity with some exceptions or waive the State’s sovereign immunity but retain exceptions or exclusions from liability. Section III explains that even if a State has waived its immunity for certain claims, a transportation department still may have immunity when it exer- cises its discretion in planning or designing public improvements. In some states, if the issue of immu- nity is not addressed by statute, such as in a tort claims act, the courts have held that government agencies have immunity at common law for the exercise of their discretion. Appendix A collects state statutes and some cases on the immunity of govern- ment agencies for their actions that are discretion- ary and therefore immune. Although there may be exceptions, such as for known hazardous conditions, Section III analyzes cases in which transportation departments have been held not liable for the per- formance of discretionary functions, such as when preparing or approving a plan or design that ulti- mately, however, proves to be defective. Section IV discusses plan- or design-immunity statutes that are found in at least 18 states. Appen- dix B collects state statutes on plan or design immu- nity for transportation departments and, in some states, other public agencies. In some states the stat- utes are in addition to state statutes that immunize governmental actions and decisions that involve the exercise of discretion. Although plan or design immunity in a few states may not be perpetual, state plan- or design-immunity statutes generally provide that a transportation department is immune from a claim that arises out of an alleged defective plan or design of a highway or other improvement when the plan or design was prepared and/or approved in the manner required by the statute. Section V briefly discusses highway-defect statutes that exist in some states in which the question has arisen as to whether design errors or omissions constitute a defect within the meaning of the statute. Section VI turns to the subject of government con- tractors and, if they are sued for a defective plan or design, whether they may claim sovereign or gov- ernmental immunity on the same basis as the owner, the transportation department. As will be seen, under federal law and the law of some states, a gov- ernment contractor indeed may claim immunity when it is acting as the agent of the government and the claim arises out of the contractor’s implementa- tion of a discretionary decision for which the govern- ment itself has or would have immunity. Of course, cases against contractors may include claims against a transportation department or may result in coun- terclaims, cross-claims, and third-party claims by or against a transportation department that involve alleged design errors and omissions. Section VII considers the issue of claims by trans- portation departments against design consultants and contractors for their plan or design errors and omissions. Section VII also analyzes 23 Code of Federal Regulations (C.F.R.) Part 172 and whether the Federal Highway Administration (FHWA) will participate in transportation departments’ recovery of their costs and damages caused by a contractor’s design errors or omissions on a federal-aid project. In Section VIII, the digest analyzes whether claims may be made against a design consultant or contrac- tor for plan or design errors and omissions after a 1 The terms “design consultant” and “contractor” are used synonymously in the digest. When a state depart- ment of transportation (DOT) has contracted separately for design services, the term “design consultant” may be used to describe services provided by architects, planners, designers, engineers, and contractors for an infrastructure project. See Michael J. Markow, P.E, Best Practices in the Management of Design Errors and Omissions, American Association of State Highway and Transportation Officials (AASHTO) (prepared as part of National Cooperative Highway Research Program (NCHRP) Project 20-07) (Mar. 2009), hereinafter referred to as “Design Errors and Omis- sions,” http://construction.transportation.org/Documents/ NCHRPProject20-7,Task225,BestPracticesinthe ManagementofDesignErrorsandOmissions,FinalReport March2009.pdf (last accessed Sept. 2, 2016).

4transportation department’s acceptance of the work. Although the acceptance of the work doctrine gener- ally precludes claims, there are important excep- tions to the doctrine. Section IX analyzes claims by contractors against transportation departments when the departments have provided a defective plan or design, for example, that fails to disclose material information or makes material misrepresentations. Section IX also discusses whether a contract clause may absolve an owner of a claim by a contractor for a breach of warranty. Section X considers the effect of design–build contracts on a transportation department’s liability for design errors and omissions and whether the use of design–build contracting has resulted in fewer claims against transportation departments for design errors. Section XI addresses the legal implications of design consultants’ or contractors’ failure to comply with the required standard of care, exercise profes- sional judgment, or comply with applicable stan- dards when planning and designing infrastructure projects. Moreover, Section XI also discusses a pro- fessional’s duty to exercise due care in relation to other parties that are working on the same owner’s project, even though they are not in privity of con- tract with the design consultant or contractor. Section XII discusses a transportation depart- ment’s potential liability for placing an item on or removing an item from an approved products list. It appears, however, that departments are likely to have immunity for their discretionary decisions to approve or reject an appliance or product for safety or other reasons. Section XII also discusses claims under the False Claims Act against suppliers and vendors of defective appliances or products. Finally, Section XIII discusses insurance that transportation departments require design consul- tants and contractors to have to cover costs and damages resulting from a defective plan or design, as well as insurance that they require of design– build contractors. Twenty-six state transportation departments responded to a survey conducted for the digest and provided information on their experiences with and policies and practices regarding claims for design errors and omissions.2 A copy of the survey is attached as Appendix C. Appendix D lists the transportation departments that responded to the survey. Appendix E summarizes the departments’ responses to the survey. Appendix F consists of doc- uments that the departments provided in response to the survey. First, the survey asked transportation depart- ments about whether in the past 5 years their department and/or one of their design consultants or contractors for a project had been sued for an alleged defective plan or design of a highway or other improvement. Fifteen departments of trans- portation (DOT) answered that they and/or one of their design consultants or contractors had been sued for an allegedly defective plan or design.3 Eleven DOTs stated that neither they nor their design consultants or contractors had been sued in that time period.4 Second, however, when asked whether within the past 5 years the departments had been held liable for a defective plan or design, 5 DOTs responded that they had been held liable for an allegedly defective plan or design,5 but 15 DOTs reported that they had not been held liable.6 II. SOVEREIGN IMMUNITY OF TRANSPORTATION DEPARTMENTS FOR PLAN OR DESIGN ERRORS AND OMISSIONS In actions against a transportation department for a defective plan or design causing an injury to a motorist or other member of the public, the thresh- old question may be whether the State has waived its immunity for the claim being asserted. Most states have enacted a tort claims act, governmental immunity act, or the equivalent that generally preserves the State’s sovereign immunity with some exceptions or waives the State’s sovereign 3 Arizona DOT, Colorado DOT, Georgia DOT, Indiana DOT, Kansas DOT, Louisiana DOTD, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, Tennessee DOT, Texas DOT, and Utah DOT. 4 Alabama DOT, Arkansas Hwy. & Transp. Dep’t, Florida DOT, Idaho Transp. Dep’t, Kentucky Transp. Cab., Maine DOT, Nebraska Dep’t of Rds., North Dakota DOT, Oklahoma DOT, Virginia DOT, and Wisconsin DOT. 5 Arizona DOT, Indiana DOT, Louisiana DOTD, Pennsylvania DOT, and Texas DOT. 6 Alabama DOT, Colorado DOT, Florida DOT, Georgia DOT, Kansas DOT, Kentucky Transp. Cab., Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, South Carolina DOT, Tennessee DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. Six departments did not respond to the question. 2 See list of DOTs responding to the survey in App. D.

5immunity but includes certain exceptions or exclu- sions from liability.7 Delaware retains its sovereign immunity, includ- ing for highways.8 On the other hand, the State of New York “waives its immunity from liability and action and hereby assumes liability and consents to have the same determined in accordance with the same rules of law as applied to actions in the supreme court against individuals or corporations, provided the claimant complies with the limitations of this article.”9 In New York, however, there is still immunity for a claim arising out of the government’s exercise of its discretion.10 Georgia’s statute provides for a limited waiver of sovereign immunity: “The state waives its sovereign immunity for the torts of state officers and employ- ees while acting within the scope of their official duties or employment…provided, however, that the state’s sovereign immunity is waived subject to all exceptions and limitations set forth in this article.”11 South Carolina and a few other states waive their immunity when a claim is covered by insurance; thus, in South Carolina, [t]o the extent such liability insurance is purchased pursu- ant to [S.C. Code Ann.] § 21-32-15 and to the extent cover- age is afforded thereunder, the state shall be deemed to have waived the common law doctrine of sovereign immu- nity and consented to suit in the same manner that any other party may be sued.12 As stated, even when there is a waiver of immu- nity, the waiver may be limited. For example, in Mulawka v. Commonwealth,13 a Pennsylvania federal 7 745 Ill. Comp. Stat. 5/1 (2016) (“Except as provided in the Illinois Public Labor Relations Act, the Court of Claims Act, the State Officials and Employees Ethics Act, and Section 1.5 of this Act [5 ILCS 315/1 et seq.], 705 ILCS 505/1 et seq., 5 ILCS 430/1-1 et seq., and 745 ILCS 5/1.5] the State of Illinois shall not be made a defendant or party in any court.”); Kan. Stat. ann. § 75-6103(a) (2016) (providing that “[s]ubject to the limitations of this act, each governmental entity shall be liable for damages caused by the negligent or wrongful act or omission of any of its employees while acting within the scope of their employment under circum- stances where the governmental entity, if a private person, would be liable under the laws of this state”); N.M. Stat. ann. § 41-4-2(A) (2016) (stating in part that “it is declared to be the public policy of New Mexico that governmental entities and public employees shall only be liable within the limitations of the Tort Claims Act [41-4-1 NMSA 1978] and in accordance with the principles established in that act”); see also N.M. Stat. ann. § 41-4-4(A) (2016) (“A govern- mental entity and any public employee while acting within the scope of duty are granted immunity from liability for any tort except as waived by” N.M. Stat. ann. §§ 41-4-5–41- 4-12.); oK. Stat. tit. 15, §§ 152.1(A) and (B) (2016) (provid- ing that “[t]he state, only to the extent and in the manner provided in this act, waives its immunity and that of its political subdivisions”); or. rev. Stat. § 30.265(1) (2016) (“Subject to the limitations of ORS 30.260 to 30.300, every public body is subject to civil action for its torts and those of its officers, employees and agents acting within the scope of their employment or duties, whether arising out of a gov- ernmental or proprietary function….”); 42 pa. ConS. Stat. § 8522 (2016) (stating exceptions to sovereign immunity); and tex. CIv. praC. & rem. Code ann. §§ 101.025(a) and (b) (2016) (providing in subsection (a) that “[s]overeign immunity to suit is waived and abolished to the extent of liability created by this chapter” and providing in subsec- tion (b) that “[a] person having a claim under this chap- ter may sue a governmental unit for damages allowed by this chapter”). 8 del. Code ann. tit. 10, § 4011 (2016) (“Notwithstanding § 4012 of this title, a governmental entity shall not be liable for any damage claim which results from…[a]ny defect, lack of repair or lack of sufficient railing in any highway, townway, sidewalk, parking area, causeway, bridge, airport runway or taxiway, including appurtenances necessary for the control of such ways including but not limited to street signs, traffic lights and controls, parking meters and guard- rails….”). 9 N.Y. Ct. Cl. aCt art. II, § 8.a (2016). 10 Santangelo v. State, 103 Misc. 2d 578, 581–582, 426 N.Y.S.2d 933 (N.Y. Ct. Cl. 1980) (holding that “[a]lthough the statute contains no specific exception to liability,” the government is immune from liability for the exercise of dis- cretionary functions). 11 Ga. Code ann. § 50-21-23(a) (2016). 12 S.C. CodIfIed lawS § 21-32-16 (2016) (Waiver of sover- eign immunity–Extent–Consent to suit). See also mInn. Stat. § 3.736, Subd. 8 (2016), A state agency, including an entity defined as a part of the state in section 3.732, subdivision 1, clause (1), may procure insurance against liability of the agency and its employees for damages resulting from the torts of the agency and its employees. Procure- ment of the insurance is a waiver of the limits of gov- ernmental liability under subdivisions 4 and 4a only to the extent that valid and collectible insurance, including where applicable, proceeds from the Minne- sota Insurance Guaranty Association, exceeds those limits and covers the claim. Purchase of insurance has no other effect on the liability of the agency and its employees. Procurement of commercial insurance, participation in the risk management fund under sec- tion 16B.85, or provisions of an individual self-insur- ance plan with or without a reserve fund or reinsur- ance does not constitute a waiver of any governmental immunities or exclusions, and N.C. Gen. Stat. § 143-291(b) (2016) (“If a State agency, otherwise authorized to purchase insurance, purchases a policy of commercial liability insurance providing coverage in an amount at least equal to the limits of the State Tort Claims Act, such insurance coverage shall be in lieu of the State’s obligation for payment under this Article.”). 13 2012 U.S. Dist. LEXIS 185164, at *1, 20 (Nov. 28, 2012).

6district court dismissed a claim against a county because Pennsylvania’s Sovereign Immunity Act did not include a waiver for the negligent design and installation of guardrails next to a Commonwealth highway.14 The plaintiff’s pro se complaint alleged that Mercer County entered into a contract with the Pennsylvania Department of Transportation (PennDOT) for the maintenance and repair of a por- tion of I-80 where the accident occurred and further alleged that both defendants’ negligence caused a hazardous roadway condition of which the defen- dants were or should have been aware.15 In part, the plaintiff ’s claims were based on an alleged defective design of a guardrail.16 The name of the device, manufactured by Trinity Industries, Inc., and Trinity Products, LLC (collectively Trinity) is not stated in the opinion, but the complaint alleges that the guardrail was an “ET-2000.”17 (Claims involving guardrails produced by Trinity are dis- cussed in Sections XII.C and D.) The court dismissed the claims brought in federal court against PennDOT because of the department’s immunity under the Eleventh Amendment.18 As for the claim against Mercer County, the court held that the County had sovereign immunity because the plaintiff ’s allega- tions did not come within the “streets exception” to the immunity of local government units.19 The court in Mulawka relied on Stein v. Pennsylvania Turnpike Commission,20 in which the decedent’s car hydroplaned during a heavy rain, spun off the Pennsylvania Turnpike, and struck a U-shaped piece of metal known as a “boxing glove” on the end of a guardrail.21 The plaintiff in the wrongful death action in Stein argued “that the boxing glove end treatment of the guardrail was a ‘dangerous real estate condition’ and therefore came within the exception to sovereign immunity in [42 Pa. C.S.] § 8522(b)(4).”22 In granting a motion to dis- miss in Mulawka, the Pennsylvania Commonwealth Court held that the plaintiff ’s allegations “that the guardrail was negligently designed, installed or maintained…do not fall within the streets exception to local immunity because the alleged defects in the guardrail did not render the street (that is, I-80) unsafe for the purposes for which it was intended, i.e., travel on the roadway.”23 The Mulawka court stated that “‘[i]t is for the General Assembly, not this Court, to expand the exception in Section 8522(b)(4) of the Sovereign Immunity Act, 42 Pa. C.S. § 8522(b) (4), to include a waiver for the negligent design and installation of guardrails next to a Commonwealth highway.’”24 In a Georgia case, the Georgia Department of Transportation (GDOT) was held to have immunity for a claim that arose out of a traffic control plan. In Comanche Construction, Inc. v. Department of Transportation,25 the trial court held that GDOT was immune from suit in a case brought by a motorist against Comanche Construction, Inc. (Comanche), and GDOT. GDOT had a contract with Comanche to refurbish 34 bridges. The case involved a traffic con- trol plan for the repair of Brownwood Bridge. The motorist, who drove off a roadway and hit a tree, stated that she did not realize that the road ended because of a detour sign that Comanche knowingly failed to remove.26 The motorist alleged that GDOT was also liable because it was responsible for over- seeing the project, assisted with the design, approved the plans for the placement of the detour signs, and negligently supervised and inspected the installa- tion of the detour signs.27 Under the Georgia Tort Claims Act, there are 13 exceptions to state tort liability, one of which is [t]he [s]tate shall have no liability for losses resulting from…[i]nspection powers or functions, including failure to make an inspection or making an inadequate or negligent inspection of any property other than property owned by the [s]tate to determine whether the property complies with or violates any law, regulation, code, or ordinance or con- tains a hazard to health or safety.28 The court stated that “[t]he phrase ‘inspection powers or functions’ includes both an inspection of physical property to determine whether it complies 14 See 42 pa. ConS. Stat. § 8522(b)(4) (2016). 15 Mulawka, 2012 U.S. Dist. LEXIS 185164, at *3. 16 Id. at *17. 17 Mulawka Compl. ¶ 9. See discussion of the Trinity guardrail in Section XII.C. 18 Mulawka, 2012 U.S. Dist. LEXIS 185164, at *12–13. 19 Id. at *24 (citing 42 pa. ConS. Stat. § 8541). 20 989 A.2d 80 (Pa. Commw. Ct. 2010). 21 Mulawka, 2012 U.S. Dist. LEXIS 185164, at *17. 22 Id. at *18 (footnote omitted). 23 Id. at *24–25. 24 Id. at *20 (quoting Stein, 989 A.2d at 88). The court also cited Lambert v. Katz, 8 A.3d 409 (Pa. Commw. Ct. 2010) (no exception to sovereign immunity based on alle- gations that PennDOT negligently failed to maintain guardrails) and Quinones v. Commonwealth of Pa. Dep’t of Transp., 45 A.3d 467 (Pa. Commw. Ct. 2012) (no exception to sovereign immunity under theory that PennDOT failed to install a median barrier). 25 272 Ga. App. 766, 613 S.E.2d 158 (2005). 26 Id. at 767, 613 S.E.2d at 161. 27 Id. (internal quotation marks omitted). 28 Id. at 768, 613 S.E.2d at 162 (quoting Ga. Code ann. § 50-21-24(8)).

7with accepted safety standards, as well as a review of construction plans for such compliance.”29 First, the court held that because “DOT employ- ees reviewed and approved Comanche’s traffic con- trol plan, then inspected the detour route after Comanche installed the detour signs,” their “conduct falls squarely within the inspection powers excep- tion in OCGA [Official Code of Georgia Annotated] § 50-21-24 (8).”30 Second, the court held that GDOT neither had assumed design responsibilities nor had removed itself “from the inspection powers excep- tion” simply by approving the plan on the condition that two signs be added.31 Third, “nothing in this statutory language prevents [the] DOT from dele- gating responsibility for designing and implement- ing a traffic control plan to a private contractor.”32 Finally, the court held that OCGA § 32-6-50(b) requires the DOT to “place and maintain, or cause to be placed and main- tained, such traffic-control devices upon the public roads of the state highway system as it shall deem necessary to regu- late, warn, or guide traffic.” …OCGA § 32-6-50 certainly does not saddle DOT with ultimate responsibility for installing and maintaining traffic control devices on all county and municipal road systems.33 Thus, the appeals court held that “aside from DOT’s inspection and approval process, Comanche handled all aspects of the plan’s design and imple- mentation.”34 Because GDOT’s involvement with the Brownwood Bridge detour was limited to approv- ing traffic control plans prepared by Comanche and inspecting the detour route, the department had sovereign immunity under § 50-21-24(8).35 In Villegas v. Texas DOT,36 in which both the Texas Department of Transportation (TxDOT) and a con- tractor were sued in a wrongful death action, the court held that TxDOT had not waived its immunity under the Texas Tort Claims Act (TTCA) for the alleged defect. In Villegas, the plaintiffs alleged that TxDOT’s failure to cut vegetation and mow grass had caused a culvert to drain improperly and that the lack of drainage had resulted in dangerously deep water that caused the accident.37 The plaintiffs sued TxDOT and a subcontractor, Retca Inc., under the TTCA for wrongful death, negligence, gross neg- ligence, and failure to keep the premises safe.38 After a jury found the driver to be 100 percent liable for the accident,39 the plaintiff appealed.40 The appeals court held, however, that the trial court did not err in granting TxDOT’s motion for a summary judg- ment. There was no evidence that TxDOT had knowledge of the water on the road and no evidence that overgrown vegetation caused the flooding.41 The court also held that the trial court did not err in submitting the question to the jury as an issue of premise liability rather than one of general negli- gence because there was no evidence that the sub- contractor owed any duty to the plaintiff.42 The next part of the digest explains that even if a state has waived its immunity for certain claims, a transportation department still may have immunity when it exercises its discretion in planning or designing public improvements. III. PLAN OR DESIGN IMMUNITY UNDER A STATE TORT CLAIMS ACT OR AT COMMON LAW A. Rationale for Immunity of Transportation Departments and Other Public Agencies for Discretionary Actions Even if a state has waived its immunity for some claims, a transportation department still may have immunity under a discretionary function exemption in its tort claims act or similar legislation or at com- mon law for the exercise of discretion such as is required to plan or design a public improvement. The survey asked transportation departments whether one of their department’s defenses to a claim for a defective plan or design is that the department has immunity for the exercise of discre- tion. Twelve transportation departments responded 29 Id. (footnote omitted). 30 Id. at 769, 613 S.E.2d at 162 (footnote omitted). 31 Id. 32 Id. at 770, 613 S.E.2d at 163. 33 Id. (footnotes omitted) (emphasis supplied). 34 Id. at 772, 613 S.E.2d 164–65. 35 Id. at 771–72, 613 S.E.2d at 164. 36 120 S.W.3d 26 (Tex. App. 2003). 37 Id. at 30. 38 Id. 39 Id. at 31. 40 Id. at 29. 41 Id. at 34. The court held that the trial court did not err in striking the plaintiffs’ expert and his affidavit because the plaintiffs did not disclose all of the expert’s supporting data in discovery and failed to show good cause for their failure to submit the information in a timely manner. Id. at 34–35. 42 Id. at 40.

8that their exercise of discretion was a defense,43 but six stated that they did not have a discretionary defense for claims involving a defective plan or design.44 Eight departments did not respond to the question. Appendix A collects state statutes, as well as some cases that provide that the state and govern- ment agencies are not liable for the exercise or per- formance of their discretionary acts or functions, i.e., a discretionary function exemption.45 At least 34 function or duty on the part of a state officer or employee, whether or not the discretion involved is abused”); Haw. rev. Stat. ann. § 662-15(1) (2016) (stating that the chapter is inapplicable to “[a]ny claim…based upon the exercise or performance or the failure to exercise or perform a discre- tionary function or duty on the part of a state officer or employee, whether or not the discretion involved has been abused….”); IdaHo Code ann. § 6-904(1) (2016) (no liability for any claim “based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee thereof, whether or not the discretion be abused”); 745 Ill. Comp. Stat. ann. 10/2/201 (2016) (stating that a “public employee serving in a position involving the determination of policy or the exercise of discretion is not liable for an injury resulting from his act or omission in determining policy when acting in the exercise of such discretion even though abused”); Iowa Code § 669.14(1) (2016) (stating that the chapter is inapplicable to “[a]ny claim…based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a state agency or an employee of the state, whether or not the discretion be abused”); Kan. Stat. ann. § 75-6104(e) (2016) (providing that [a] governmental entity or an employee acting within the scope of the employee’s employment shall not be liable for damages resulting from…any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee, whether or not the discretion is abused and regardless of the level of discretion involved”. Kan. Stat. ann. § 75-6104(e) (2016) (also providing that [a] governmental entity or an employee acting within the scope of the employee’s employment shall not be liable for damages resulting from…any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee, whether or not the discretion is abused and regardless of the level of discretion involved. la. rev. Stat. ann. § 9:2798.1(B) (2016) (stating that “[l]iability shall not be imposed on public entities or their officers or employees based upon the exercise or performance or the failure to exercise or perform their policymaking or discretionary acts when such acts are within the course and scope of their lawful powers and duties”); me. rev. Stat. ann. tit. 14, § 8104-B(3) (2016) (government not liable for any claim that results from “[p]erforming or failing to perform a discretionary function or duty, whether or not the discretion is abused and whether or not any statute, charter, ordinance, order, resolution or policy under which the discretionary function or duty is performed is valid or invalid….”); me. rev. Stat. ann. tit. 14, § 8111(1)(C) (2016) (stating that employees of governmental entities shall be abso- lutely immune from personal civil liability [when] [p]erforming or failing to perform any discretionary function or duty, whether or not the discretion is abused; and whether or not any statute, charter, ordi- nance, order, resolution, rule or resolve under which the discretionary function or duty is performed is valid. maSS. ann. lawS ch. 258, § 10(b) (2016) (exception for “any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a public employer or public employee, acting within 43 Arizona DOT (citing arIz. rev. Stat. § 12-820.01); Colorado DOT (stating that the DOT is immune for tort claims pursuant to Colo. rev. Stat. § 24-10-101, et seq., the Colorado Governmental Immunity Act); Florida DOT; Georgia DOT (citing Ga. Code ann. 50-21-24-2); Indiana DOT (citing Ind. Code § 34-13-3-3); Kansas DOT (citing Kan. Stat. ann. § 75-6104(e)); Missouri DOT (citing mo. ConSt. art. IV, §§ 29 and 30, and mo. rev. Stat. §§ 226.130, 227.040, 227.030, 227.050, and 227.060); New Mexico DOT (citing N.M. Stat. ann. § 4-41-11); Oregon DOT (citing or. rev. Stat. § 30.265 and Ramirez v. Hawaii T & S Enters., Inc., 179 Or. App. 416, 39 P.3d 931 (2002); Westfall v. ODOC, 355 Or. 144, 324 P.3d 440 (2014); Hughes v. Wilson, 345 Or. 491, 199 P.3d 305 (2008); Turner v. State, 270 Or. App. 353, 348 P.3d 253 (2015); Stevenson v. State of Oregon, 290 Or. 3, 619 P.2d 247 (1980); Vokoun v. City of Lake Oswego, 335 Or. 19, 56 P.3d 396 (2002); South Carolina DOT (stating that the department has discretionary immunity pursuant to the S.C. Tort Claims Act); but see Summer v. Carpenter, 328 S.C. 36, 492 S.E.2d 55 (1997); Strange v. South Carolina Dep’t of Highways and Public Transp., 314 S.C. 427, 445 S.E.2d 439 (1994); see, however, Giannini v. South Carolina Dep’t of Transp., 378 S.C. 573, 664 S.E.2d 450 (2008) (South Carolina Supreme Court holding that it was a jury issue as to whether the DOT was on notice of a hazardous condi- tion); Utah DOT; and Wisconsin DOT (citing wIS. ConSt. art. XIV, § 13, and wIS. Stat. § 893.90). 44 Kentucky Transp. Cab., Louisiana DOTD, Montana DOT, Pennsylvania DOT, Tennessee DOT, and Texas DOT. 45 alaSKa Stat. § 09.50.250(1) (2016) (stating that an action may not be brought if the claim “is an action for tort, and based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a state agency or an employee of the state, whether or not the discretion involved is abused….”); Cal. Gov’t Code § 8655 (2016): “The state or its political subdivisions shall not be liable for any claim based upon the exercise or perfor- mance, or the failure to exercise or perform, a discre- tionary function or duty on the part of a state or local agency or any employee of the state or its political sub- divisions in carrying out the provisions of this chapter.”) del. Code ann. tit. 10, § 4011(3) (2016) (providing that “all governmental entities and their employees shall be immune from suit on any and all tort claims seeking recov- ery of damages” that result from “[t]he performance or fail- ure to exercise or perform a discretionary function or duty, whether or not the discretion be abused and whether or not the statute, charter, ordinance, order, resolution, regu- lation or resolve under which the discretionary function or duty is performed is valid or invalid”); Ga. Code ann. § 50-21-24(2) (2016) (providing that “[t]he state shall have no liability for losses resulting from…[t]he exercise or perfor- mance of or the failure to exercise or perform a discretionary

9states have a tort claims act or similar legislation that includes a discretionary function exemption similar—if not identical in some states—to the one in the Federal Tort Claims Act.46 For example, Iowa Code Section 669.14(1) (2016) states: The provisions of this chapter shall not apply [to] any claim against the state…based upon an act or omission of an employee of the state, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or perfor- mance or the failure to exercise or perform a discretionary function or duty on the part of a state agency or an employee of the state, whether or not the discretion be abused.47 Minnesota Statutes Sections 466.02 and 466.03(6) (2016), applicable to the tort liability of political sub- divisions, which include municipalities as defined in Section 466.01, state that the scope of his office or employment, whether or not the discretion involved is abused”); mInn. Stat. § 3.736, subd. 3(b) (2016) (including an exclusion from liability for “a loss caused by the performance or failure to perform a discretion- ary duty, whether or not the discretion is abused”); mInn. Stat. § 466.03, subd. 6 (2016) (stating an exception from liability for “[a]ny claim based upon the performance or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused”); mISS. Code ann. § 11-46-9(1)(d) (2016) (stating that [a] governmental entity and its employees acting within the course and scope of their employment or duties shall not be liable for any claim…[b]ased upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee thereof, whether or not the discretion be abused. neb. rev. Stat. ann. § 81-8,219(1) (2016) (state tort claims act not applicable to “[a]ny claim…based upon the exercise or performance or the failure to exercise or per- form a discretionary function or duty on the part of a state agency or an employee of the state, whether or not the dis- cretion is abused”); nev. rev. Stat. ann. § 13-910(2) (2016) (providing that the Political Subdivisions Tort Claims Act and [nev. rev. Stat. ann.] §§ 16-727, 16-728, 23-175, 39-809, and 79-610 are not applicable to “[a]ny claim based upon the exercise or performance of or the failure to exer- cise or perform a discretionary function or duty on the part of the political subdivision or an employee of the political subdivision, whether or not the discretion is abused”); nev. rev. Stat. ann. § 41.032(2) (2016) (providing that no action may be brought under NRS 41.031 or against an immune contractor or an officer or employee of the State or any of its agencies or political subdivisions which is…[b]ased upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of the State or any of its agencies or political subdivisions or of any officer, employee or immune contractor of any of these, whether or not the discretion involved is abused. N.H. rev. Stat. ann. § 541-B:19(1)(c) (2016) (stating that the chapter is inapplicable to “[a]ny claim based upon the exercise or performance or the failure to exercise or perform a discretionary executive or planning function or duty on the part of the state or any state agency or a state officer, employee, or official acting within the scope of his office or employment”); N.J. Stat. ann. § 59:2-3(a) (2016) (providing that “[a] public entity is not liable for an injury resulting from the exercise of judgment or discretion vested in the entity”); N.D. Cent. Code § 32-12.1-03(3)(d) (2016) (stating that a political subdivision or its employee may not be held liable for “[t]he decision to perform or the refusal to exercise or perform a discretionary function or duty, whether or not such discretion is abused and whether or not the statute, charter, ordinance, order, resolution, regulation, or resolve under which the discretionary function or duty is performed is valid or invalid”); N.D. Cent. Code § 32-12.2-02(3)(b) (2016) (providing that the State is not to be held liable for [a] claim based upon a decision to exercise or per- form or a failure to exercise or perform a discretionary function or duty on the part of the state or its employ- ees, regardless of whether the discretion involved is abused or whether the statute, order, rule, or resolution under which the discretionary function or duty is per- formed is valid or invalid and further stating that “[d]iscretionary acts include acts, errors, or omissions in the design of any public project but do not include the drafting of plans and specifications that are provided to a contractor to construct a public project”) (emphasis supplied); 51 oKla. Stat. § 155(5) (2016) (state or a political subdivision not liable for a claim resulting from the “[p]erformance of or the failure to exercise or per- form any act or service which is in the discretion of the state or political subdivision or its employees”); or. rev. Stat. § 30.265(6)(c) (2016) (providing immunity for “[a]ny claim based upon the performance of or the failure to exer- cise or perform a discretionary function or duty, whether or not the discretion is abused”); S.C. Code ann. § 15-78-60(5) (2016) (governmental entity not liable for a loss resulting from “the exercise of discretion or judgment by the govern- mental entity or employee or the performance or failure to perform any act or service which is in the discretion or judgment of the governmental entity or employee”); tenn. Code ann. § 29-20-205(1) (2016) (stating that there is immunity for “[t]he exercise or performance or the failure to exercise or perform a discretionary function, whether or not the discretion is abused”); tex. CIv. praC. & rem. Code ann. § 101.056(2) (2016) (stating that the chapter is not applicable to a claim based on “a governmental unit’s deci- sion not to perform an act or on its failure to make a deci- sion on the performance or nonperformance of an act if the law leaves the performance or nonperformance of the act to the discretion of the governmental unit”); UtaH Code ann. § 63G-7-201(4)(a) (2016) (immunity of governmental entities and employees from suit for a claim based on “the exercise or performance, or the failure to exercise or per- form, a discretionary function, whether or not the discre- tion is abused”); and vt. Stat. ann. tit. 12, § 5601(e)(1) (2016) (stating that there is no liability for “[a]ny claim… based upon the exercise or performance or failure to exer- cise or perform a discretionary function or duty on the part of a State agency or an employee of the State, whether or not the discretion involved is abused”). 46 See, e.g., alaSKa Stat. § 09.50.250(1) (2016); del. Code ann. tit. 10, §§ 4001(1) and 4011(b)(3) (2016); Ga. Code ann. § 50-21-24(2) (2016); 745 Ill. Comp. Stat. ann. 10/2/201 (2016); maSS. ann. lawS ch. 258, § 10(b) (2016); and S.C. Code ann. § 15-78-60(15) (2016). 47 Emphasis supplied.

10 every municipality is subject to liability for its torts and those of its officers, employees and agents acting within the scope of their employment or duties whether arising out of a governmental or proprietary function…[except for] [a]ny claim based upon the performance or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused. As held in a Florida case, design defects inherent in an overall plan are afforded sovereign immunity from liability, because the decision to build or change a road and all the determinations inherent in such a decision are of a “judgmental, planning-level type.”48 In states that do not have an exclusion from liabil- ity for claims based on the government’s exercise of discretion, some courts have held that government agencies have immunity at common law for claims that arise out of alleged negligence in the planning or design of public improvements such as highways.49 First, the reason for design immunity is “to pre- vent a jury from second-guessing the decision of a public entity by reviewing the identical questions of risk that had previously been considered by the gov- ernment officers who adopted or approved the plan or design.”50 Second, if courts in tort litigation against a government agency were allowed to reex- amine decisions on which reasonable men and women may differ on how discretion should be exer- cised, the danger would be too great of “impolitic interference with the freedom of decision-making by those public officials in whom the function of mak- ing such decisions has been vested.”51 B. The Distinction Between Planning-Level and Operational-Level Decisions Although there are some exceptions, federal and state courts tend to construe the meaning of a dis- cretionary function exemption in a tort claims act or equivalent law according to a planning-level versus operational-level dichotomy articulated by the United States Supreme Court in Dalehite v. United States.52 The Court held in Dalehite that the govern- ment decisions at issue were all responsibly made at the planning rather than the operational level of government and thus were immune from liability.53 Thus, post-Dalehite, government decisions made at the planning level were discretionary and those made at the operational level were not. In United States v. Gaubert,54 however, the Court made it clear that the exercise of immune discretion is not con- fined to the so-called policy or planning level. Many state courts have followed the Dalehite and/or Gaubert analysis, as well as other decisions by the U.S. Supreme Court and lower federal courts, in construing the discretionary function exemption in their state’s tort claims act. Nevertheless, if there is one area of highway activity that generally is con- sidered to be protected as an exercise of discretion, and therefore immune from liability for alleged neg- ligence, it is the area of highway design. Indeed, there are numerous cases in which governmental actions have been held to be discretionary, including the approval of highway designs and specifications,55 the decision to adhere to a former design during highway reconstruction,56 and decisions with regard to the inclusion of barriers, guardrails, and other highway design features.57 In a California case, Johnson v. State,58 the California Supreme Court held that the statutory pro- vision for discretionary immunity related exclusively to determinations, made by a coordinate branch of gov- ernment, that involve basic policy decisions.59 In an earlier case, however, Evangelical United Breth- ren Church of Adna v. State,60 the Supreme Court of Washington laid down a four-pronged test for the determination of when discretionary immunity applies: 48 FDOT v. Pembroke Pines, 67 So. 3d 1162, 1164 (Fla. App. 2011). 49 Commercial Carrier Corp. v. Indian River County, 371 So. 2d 1010, 1020 (Fla. 1979) (holding that immunity for the exercise of discretion is not statutory law but is com- mon law); Heins Implement Co. v. Missouri Highway & Transp. Comm’n, 859 S.W.2d 681, 695 (Mo. 1993) (holding that the design of a highway bypass qualifies as a discre- tionary function and that officials involved in the design have immunity); Santangelo v. State, 103 Misc. 2d 578, 581–82, 426 N.Y.S.2d 931, 933 (N.Y. Ct. Cl. 1980); and Hamilton v. Hamlet, 238 N.C. 741, 742, 78 S.E.2d 770, 771 (N.C. 1953) (holding that in the absence of a statute that subjects them to liability, cities, when acting in the exercise of their police power or their judicial, discretionary, or leg- islative authority, are not liable for the tortious acts of their officers or agents). 50 Cornette v. Dep’t of Transp., 26 Cal. 4th 63, 69, 26 P.3d 332, 336 (2001). 51 Id. (citation omitted) (internal quotation marks omitted). 52 346 U.S. 15, 73 S. Ct. 956, 97 L. Ed. 1427 (1953). 53 Id. at 42, 73 S. Ct. at 971, 97 L.E. at 1444. 54 499 U.S. 315, 111 S. Ct. 1267, 113 L. Ed. 2d 335 (1991). 55 Delgadillo v. Elledge, 337 F. Supp. 827 (E.D. Ark. 1972) (approval of designs and specifications was discretionary and, therefore, immune). 56 Richardson v. State, Dep’t of Roads, 200 Neb. 225, 263 N.W.2d 442 (1978), supp. op., 200 Neb. 781, 265 N.W.2d 457 (1978). 57 Alvarez v. State, 79 Cal. App. 4th 720, 95 Cal. Rptr. 2d 719, 720 (Cal. App. 1999) (holding that, although a barrier was approved for eventual installation because of higher traffic volume, design immunity was not lost because of the absence of the barrier) and Higgins v. State, 54 Cal. App. 4th 177, 62 Cal. Rptr. 2d 459 (Cal. App. 1997) (upheld immunity for a barrier as a design decision). 58 73 Cal. Rptr. 240, 447 P.2d 352 (Cal. 1968). 59 Id. at 250, 447 P.2d at 360. 60 67 Wash. 2d 246, 407 P.2d 440 (1965).

11 (1) Does the challenged act, omission, or decision necessar- ily involve a basic governmental policy, program, or objec- tive? (2) Is the questioned act, omission, or decision essen- tial to the realization or accomplishment of that policy, program, or objective as opposed to one which would not change the course or direction of the policy, program, or objective? (3) Does the act, omission, or decision require the exercise of basic policy evaluation, judgment, and expertise on the part of the governmental agency involved? (4) Does the governmental agency involved possess the requisite constitutional, statutory, or lawful authority and duty to do or make the challenged act, omission, or decision?61 According to the court, [i]f these preliminary questions can be clearly and unequiv- ocally answered in the affirmative, then the challenged act, omission, or decision can, with a reasonable degree of assur- ance, be classified as a discretionary governmental process and nontortious, regardless of its unwisdom. If, however, one or more of the questions call for or suggest a negative answer, then further inquiry may well become necessary, depending upon the facts and circumstances involved.62 More recent cases have held that preparing or approving a plan or design is an exercise of discretion. For example, in a 2011 case, FDOT v. Pembroke Pines,63 a police officer died when his car struck a median that was designed by an engineering firm hired by the City of Pembroke Pines. The Florida Depart- ment of Transportation (FDOT) had approved the design firm’s plans because FDOT owned the median and was responsible for its “design parameters.”64 Although originally designed for a vehicle speed of up to 45 miles per hour (mph), FDOT had increased the speed limit to 50 mph some years after a speed study was performed. The plaintiff as the personal representative of the estate claimed that FDOT negligently approved the design plans that called for a Type F curb and the planting of palm trees. The plaintiff argued that the plans were contrary to prevailing design standards and that FDOT negli- gently approved a later increase in the speed limit and failed to remove the F curb and palm trees.65 The court noted that in Commercial Carrier Corp. v. Indian River County,66 the Florida Supreme Court had distinguished between planning or judgmental government functions for which the State has sover- eign immunity and operational activities for which the State does not have sovereign immunity.67 As explained in Pembroke Pines, [a]n operational act has been described as “one not neces- sary to or inherent in policy or planning, that merely reflects a secondary decision as to how those policies or plans will be implemented.” …In contrast, a planning or judgmental act involves “an exercise of executive or legislative power such that, for the court to intervene by way of tort law, it inap- propriately would entangle itself in fundamental questions of policy and planning.”68 For some courts, the decision as to whether an action is discretionary and entitled to immunity is a two-step process. First, a court must consider whether the government employee had a choice. When a government official or employee has no dis- cretion or choice regarding his or her decision, then there is no immunity; for example, when a statute, regulation, or government policy “specifically pre- scribes a course of action for an employee to follow.”69 Second, [w]hen discretion is involved, the court must then deter- mine whether that discretion is the kind which is shielded by the exception, that [the exercise of discretion is] grounded in social, economic or political policy. If the action is not based on public policy, the government is liable for any neg- ligence, because the exception insulates the government from liability only if the challenged action involves the per- missible exercise of a policy judgment.70 In a Texas case, Texas Department of Transportation v. Olivares,71 a truck traveling in the wrong direction on a tollway struck a vehicle belonging to Olivares and his wife. TxDOT argued that its sovereign immunity had not been waived. One issue was the plaintiffs’ allegation that TxDOT failed to install traffic-control devices. Under the TTCA there is “a limited waiver of immunity for ‘personal injury and death so caused by a condition or use of tangible per- sonal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.’”72 There is no waiver of immunity, however, when a claim is the result of 68 Id. (citations omitted) (some internal quotation marks omitted). See also Ingham v. State, Dep’t Transp., 419 So. 2d 1081, 1082 (Fla. 1982) (affirming the dismissal of a complaint where the plaintiff alleged that the DOT was negligent “in constructing a road with a curve, in determining the position, shape and size of a median, and in failing to provide adequate traffic signals” because such acts were planning-level functions). 69 Rosen v. State, 809 So. 2d 498, 510 (La. App. 2002) (citation omitted) (internal quotation marks omitted). 70 Id. (citation omitted). 71 316 S.W.3d 89 (Tex. App. 2010). 72 Id. at 96 (quoting tex. CIv. praC. & rem. Code ann. § 101.021 (2005)). 61 Id. at 255, 407 P.2d at 445. 62 Id. 63 67 So. 3d 1162 (Fla. App. 2011). 64 Id. at 1163. 65 Id. 66 371 So. 2d 1010, 1020–22 (Fla. 1979). 67 See Pembroke Pines, 67 So. 3d at 1163–64.

12 (1) the failure of a governmental unit to perform an act that the unit is not required by law to perform; or (2) a governmental unit’s decision not to perform an act or on its failure to make a decision on the performance or non- performance of an act if the law leaves the performance or nonperformance of the act to the discretion of the govern- mental unit.73 A Texas appellate court held that that there is no waiver of immunity under the TTCA when a claim is the result of a governmental unit’s exercise of dis- cretion, including when it constructs a roadway pur- suant to an outside engineer’s design.74 Although TxDOT is not liable for claims arising out of its discretionary acts or omissions,75 under the TTCA the department also is not liable for claims based on (1) the failure of a governmental unit initially to place a traffic or road sign, signal, or warning device if the failure is a result of discretionary action of the governmental unit; [or] (2) the absence, condition, or malfunction of a traffic or road sign, signal, or warning device unless the absence, condi- tion, or malfunction is not corrected by the responsible gov- ernmental unit within a reasonable time after notice….76 The court explained that “[u]nder subsection (a) (1), the State retains immunity for discretionary sign-placement decisions” and that “[u]nder subsec- tion (a)(2), the State retains immunity as long as it corrects a sign’s defective [condition, absence, or malfunction] within a reasonable time after notice.”77 In sum, the courts have held that immune planning-level decisions include decisions on whether to install a flashing beacon and rumble strips,78 con- struct a barrier between northbound and south- bound lanes,79 or build a bridge with an unprotected pedestrian walkway.80 As discussed in Section III.D, although immunity may exist for an initial exercise of discretion, a public agency in some states may be held liable for the negligent implementation of a dis- cretionary policy decision. Furthermore, as demon- strated in Section III.E, although an alleged plan or design error itself may not be actionable, a plaintiff may have a claim when a transportation depart- ment knows or should know of a hazardous condi- tion but fails to correct the condition or give ade- quate warning of it.81 C. Immunity for a Plan or Design Prepared in Conformity with Generally Accepted Engineering or Design Standards A transportation department typically has immu- nity for the initial design of a public improvement, particularly when the design complies with gener- ally accepted or approved engineering or design standards. Plan or design immunity may, however, fail to attach or later be lost if a plan or design failed to comply with generally accepted or approved engi- neering or design standards or with the depart- ment’s own design manual when it was prepared. As discussed in Section IV, some states have enacted specific plan- or design-immunity statutes. Weinstein v. Department of Transportation82 involved injuries sustained in a cross-median colli- sion. The plaintiffs alleged that the design of the highway was unreasonable because it failed to con- form to state standards in four respects: A transition area was not straight but located on a curve; there was no sign on the left-hand (median) side warning of a lane drop; the width of the median shoulder was below standard; and the absence of a median barrier at the accident location created the potential for cross-median accidents.83 The plaintiffs also alleged that an increase in traffic and the number of acci- dents in the location where the accident occurred constituted a change in conditions that had ren- dered the location a dangerous condition. First, the court held that not only was there “substantial evi- dence [that] supported the reasonableness of defen- dant’s decision to omit a median barrier at this loca- tion,”84 but also that the State had planned and installed the signage in compliance with State- approved standards.85 Second, an increase in traffic 73 Id. at 96–97 (quoting tex. CIv. praC. & rem. Code ann. § 101.056 (2005)) (emphasis supplied). 74 Id. at 96–97, 102 (citing tex. CIv. praC. & rem. Code ann. § 101.056)). 75 Id. at 97. 76 Id. (quoting tex. CIv. praC. & rem. Code ann. §§ 101.060(a)(1)-(2) (2005)). 77 Id. (citations omitted) (internal quotation marks omitted). See also Texas DOT v. Lopez, 436 S.W.3d 95, 100–01 (Tex. App. 2014) (holding that because the design of a public work is a discretionary function involving many policy decisions, a governmental entity responsible for a design may not be sued for such a decision and that the use of traffic control and warning devices is discretionary as a matter of law under the Texas Tort Claims Act (TTCA)). 78 Dep’t of Transp. v. Konney, 587 So. 2d 1292 (Fla. 1991). 79 Cygler v. Presjack, 667 So. 2d 458 (Fla. 4th DCA 1996). 80 Masters v. Wright, 508 So. 2d 1299 (Fla. 4th DCA 1987). 81 Pembroke Pines, 67 So. 3d at 1164. 82 139 Cal. App. 4th 52, 42 Cal. Rptr. 3d 417 (Ca. App. 2006). 83 Id. at 56, 42 Cal. Rptr. 3d at 419–20. 84 Id. at 58, 42 Cal. Rptr. 3d at 422. 85 Id.

13 does not cause a roadway to be out of conformity with its design or with state standards “unless a change in traffic volume changes the state stan- dards that apply.”86 Whether a change in conditions will cause a plan or design to be no longer in confor- mity with approved standards is also discussed in Section IV. In Sadler v. DOT,87 the Georgia Court of Appeals held that [t]he design-standards exception shields the State and its agencies from liability for losses that result from “[t]he plan or design for construction of or improvement to highways, roads, streets, bridges, or other public works [when] such plan or design is prepared in substantial compliance with generally accepted engineering or design standards in effect at the time of preparation of the plan or design.”88 In Sadler, the plaintiffs alleged that GDOT was negligent in analyzing an intersection and bypass operations where the accident occurred; managing, designing, and maintaining the intersection; not complying with generally accepted design stan- dards; not providing proper traffic-control devices and signals at the intersection; and failing to pro- vide supplemental traffic devices in the median.89 The court agreed, however, with the trial court that the plaintiffs’ expert failed to show that the trans- portation department had not complied with “accepted design and engineering practices.”90 In a Louisiana case, Rosen v. State,91 the court held that prior to the reconstruction of an express- way it was discretionary as to whether the Louisiana Department of Transportation and Development (LaDOTD) should install a guardrail at the end of a bridge.92 After the road was open to traffic, however, the decision as to whether to install a guardrail became nondiscretionary because of the applicability of certain American Association of State Highway and Transportation Officials (AASHTO) standards and Louisiana Revised Statutes Section 48:35. A Louisiana appellate court affirmed the trial court’s judgment that the DOTD had knowledge that the bridge end was unsafe since 1968, the year the State adopted the AASHTO standards. While the court considered DOTD’s internal policy of not upgrading a roadway to current safety standards until it performs new construction or reconstruction, it found that the risk of harm that someone like the plaintiff would collide with the unprotected abutment was within the scope of protection afforded by DOTD’s duty.93 The appellate court held that the trial court made “no manifest error in these factual findings.”94 In Ditch v. State,95 the court held that because the work on the road in question was a “major recon- struction,”96 the design and construction standards for new construction applied to the project.97 In Ditch, in which the State appealed a total verdict of more than $4.4 million,98 the State argued that LaDOTD’s “failure to reconstruct the State’s high- ways to meet modern standards does not, in itself, establish the existence of a hazardous defect.”99 The court held, however, that the State could not escape liability simply by showing that a highway met the existing standards when it was built. Rather, the decision turns on determining whether the condition of the highway constituted an unreasonable risk of injury which caused the accident. “Design standards both at the time of the original construction and at the time of the accident may be relevant factors for consideration in deciding this issue, but are not determinative of the issue.”100 Based on 22 aspects of the project,101 the court held that the contract for the work on the road in question was a “major reconstruction”;102 thus, “design and construction standards for ‘new con- struction’ were applicable to this particular proj- ect.”103 The curve “presented an unreasonable risk of harm and was defective, both as to design and as to construction” and “‘substantially contributed to the 86 Id. at 60–61, 42 Cal. Rptr. 3d at 423. 87 311 Ga. App. 601, 716 S.E.2d 639 (Ga. Ct. App. 2011). 88 Id. at 603–604, 716 S.E.2d at 641 (quoting Ga. Code ann. § 50-21-24 (10)) (internal quotation marks omitted). 89 Id. at 602–03, 716 S.E.2d at 640–41. 90 Id. at 606, 716 S.E.2d at 643. 91 Rosen, 809 So. 2d 498 (La. App. 2002). 92 Id. at 510. 93 Id. at 511. 94 Id. 95 745 So. 2d 1279 (La. App. 1999). 96 Id. at 1283. 97 Id. at 1284. 98 Id. at 1281. 99 Id. at 1282. 100 Id. at 1283 (citation omitted). 101 The court identified the 22 aspects as: (1) grading sections, (2) typical sections for shaping for the roadway, (3) typical sections to where the embankment was to be raised, (4) finished sections for shell base or gravel base, (5) sections for the soil cement base, (6) transitions of bitu- minous surfacing and base course at bridge ends, (7) half sections showing the method of placing ballast and surfac- ing on bridges, (8) superelevation sections and details, (9) details of the initial intersection tie-in, (10) horizontal lay- out of the entire project, (11) vertical layout of the project, (12) extensive rights-of-way acquisitions, (13) extensive drainage work, (14) extensive ditching, (15) widening of the roadway, 16) relocation of power poles, (17) extensive fencing, (18) extensive earthwork, (19) extensive clearing, 20) base and wearing course, (21) removal and relocation of existing structures, and (22) soil borings. Id. at 1284. 102 Id. at 1283. 103 Id. at 1284.

14 cause’ of the accident.”104 Furthermore, the court found that the curve had been a dangerous curve ever since the traveling public had begun using the roadway, and that at least since 1953, the State had known that the curve exceeded the design standards in existence since 1943 and 1946.105 Finally, as decided in Ginsburg v. City of Ithaca,106 in some cases compliance with generally accepted engineering and design standards may not suffice to absolve a transportation department of responsibility for an accident. The deceased, an 18-year-old Cornell University freshman, jumped to his death from the Thurston Avenue Bridge near the Cornell campus in Ithaca, New York. It was undisputed that Ithaca owned the bridge. The representative of the plain- tiff’s estate alleged that the City of Ithaca, as well as Cornell, failed to exercise reasonable care in design- ing, constructing, and maintaining the bridge.107 The City maintained that it was entitled to immunity because it redesigned and reconstructed the bridge in 2006–2007 after a thorough study and in compliance with federal and state standards. The court held, however, that the City’s compliance with standards did not absolve it of failing to implement measures to prevent suicides.108 There was “nothing in the record indicating Ithaca performed any pre-construction study of this particular subject [suicides].”109 Further- more, because the plaintiff argued that the height of the redesigned railings was actually lower than the height prior to the reconstruction work because of a concrete footing, there was a question as to whether the bridge in February 2010 was in a dangerous or defective condition.110 D. Whether There Is Immunity for the Negligent Implementation of a Discretionary Policy Although there may be immunity for the exercise of discretion, such as in the planning or design of highways, there is some authority that a public agency may be held liable for the negligent imple- mentation of an otherwise immune plan or design. In Olivares, supra, the plaintiffs claimed that the area near the accident site had confusing or misleading signs, signals, and warning devices; inadequate barricades; and insufficient traffic con- trol. In particular, TxDOT allegedly had negligently placed warning signs on the wrong side of the road and/or near the intersection. The court held that when the government “first installs a traffic signal is no less discretionary than whether to install it”;111 however, another issue was whether the department had negligently implemented a discretionary deci- sion. In reversing the trial court, the appellate court stated that [s]pecifically, it is unclear whether TxDOT’s conduct involved negligent implementation of a discretionary policy decision (e.g., construction workers negligently overlooked that con- struction plans ordered installation of the devices on a cer- tain date), for which immunity is waived under the TTCA, or a discretionary policy decision (e.g., a decision to postpone installation or the failure to set an installation date), for which immunity is not waived.112 The court held that “[i]t is well established that a governmental unit is not immune from liability for an injury caused by a premise defect that was cre- ated through negligent implementation of policy.”113 The court held that all of the plaintiffs’ claims “implicate[d] the adequacy of devices chosen by TxDOT, a discretionary design decision for which immunity is not waived.”114 The court also held that TxDOT retained immunity for its decision as to where to locate signs.115 The case was allowed to pro- ceed, however, on the issue of the condition of the pavement markers and for other reasons.116 E. Whether a Transportation Department Is Liable for an Accident When It Had Actual or Implied Knowledge of a Hazardous Condition In some states, although transportation depart- ments generally are entitled to plan or design immu- nity, a department will not have immunity for a haz- ardous condition caused by a defective plan or design of a highway when the department either had or should have had notice or knowledge of a hazardous condition. Some states have codified the doctrine that either actual or constructive notice or knowl- edge of a dangerous or hazardous condition may 104 Id. at 1283 (citation omitted). 105 Id. at 1287. 106 5 F. Supp. 3d 243 (N.D. N.Y. 2014). 107 Id. at 246. 108 Id. at 251. 109 Id. 110 Id. at 252. As for the claim against Cornell, the court held that there was an issue of fact as to whether Cornell had exercised sufficient control of the bridge’s design, construction, and maintenance to hold the uni- versity liable and whether suicides from the bridge were foreseeable. Id. at 250, 257. 111 Olivares, 316 S.W.3d at 98 (citation omitted) (internal quotation marks omitted). 112 Id. at 99 (footnote omitted) (emphasis supplied). 113 Id. at 100 (citations omitted). 114 Id. at 100–01 (citations omitted). 115 Id. at 101. 116 Id. at 102, 103. Because “TxDOT did not present evi- dence negating its prior knowledge that the pavement markers were in a deficient condition, appellees did not have the burden to present evidence creating a fact ques- tion relative to TxDOT’s notice.” Id.

15 give rise to liability, even when the alleged condition relates to a plan or design decision.117 For example, a Missouri statute provides that a public entity’s immunity is waived for: Injuries caused by the condition of a public entity’s property if the plaintiff establishes that the property was in [a] dan- gerous condition at the time of the injury, that the injury directly resulted from the dangerous condition, that the dangerous condition created a reasonably foreseeable risk of harm of the kind of injury which was incurred, and that either a negligent or wrongful act or omission of an employee of the public entity within the course of his employment cre- ated the dangerous condition or a public entity had actual or constructive notice of the dangerous condition in suffi- cient time prior to the injury to have taken measures to pro- tect against the dangerous condition.118 A transportation department may have immu- nity, however, for a latent condition. As provided in a Utah statute, a governmental entity has immunity when an “injury arises out of or in connection with, or results from…a latent dangerous or latent defec- tive condition of…any highway, road, street, alley, crosswalk, sidewalk, culvert, tunnel, bridge, or viaduct….”119 Liability is more likely when a department had knowledge of a hazardous condition but failed to provide reasonably adequate warning of the danger. In a Florida case, Greene v. Department of Transportation,120 the plaintiffs alleged that the road did not meet design standards because the grades were too steep for a 55-mph speed limit and because of inadequate vertical curve length and stopping distances. Although an appellate court held that the alleged design defects were not action- able, the allegations that FDOT created a known dangerous condition and failed to correct it or to give warning of it stated a claim.121 Graff v. State122 arose out of an intersectional acci- dent in New York in which an automobile struck the decedent’s motorcycle. The plaintiff as the executor of Graff ’s estate argued that the State was negligent because a “rock embankment” on one quadrant of the intersection at issue limited a motorist’s sight distance. Although the State had budgeted funds to remove the outcropping, remedial efforts had not begun as of the date of the accident. In New York, when traffic design engineering is at issue, a government defendant has qualified immunity from liability. [A] governmental body may be held liable when its study of a traffic condition is plainly inadequate or there is no reason- able basis for its traffic plan. Once [defendant] is made aware of a dangerous traffic condition it must undertake reasonable study thereof with an eye toward alleviating the danger…. If defendant’s response to an identified hazard is unreasonably delayed, defendant must demonstrate either that the delay “was necessary in order to study and formulate a reasonable safety plan, that the delay was itself part of a considered plan of action taken on the advice of experts, or that the delay stemmed from a legitimate ordering of priorities with other projects based on the availability of funding….”123 Although the court affirmed the Court of Claims’ decision that the State’s remedial efforts were unreasonable or inadequate,124 the claimant failed 117 mICH. Comp. lawS § 691.1403, § 3 (2016) (providing that governmental agencies are not liable for injuries or damages caused by defective highways unless the governmental agency knew, or in the exercise of reasonable diligence should have known, of the existence of the defect and had a reason- able time to repair the defect before the injury took place [but that] [k]nowledge of the defect and time to repair the same shall be conclusively presumed when the defect existed so as to be readily apparent to an ordinarily observant person for a period of 30 days or longer before the injury took place. mISS. Code ann. § 11-46-9(v) (2016) (providing that a governmental entity and its employees acting within the course and scope of their employment or duties are not lia- ble for a claim that arises “out of an injury caused by a dan- gerous condition on property of the governmental entity that was not caused by the negligent or other wrongful con- duct of an employee of the governmental entity or of which the governmental entity did not have notice, either actual or constructive, and adequate opportunity to protect or warn against; provided, however, that a governmental entity shall not be liable for the failure to warn of a danger- ous condition which is obvious to one exercising due care”); neb. rev. Stat. ann. § 81-8,219(7) (2016) (state tort claims act not applicable to any claim based upon the failure to make an inspection or making an inadequate or negligent inspection of any property other than property owned by or leased to the state to determine whether the property complies with or violates any statute, ordinance, rule, or regula- tion or contains a hazard to public health or safety unless the state had reasonable notice of such hazard or the failure to inspect or inadequate or negligent inspection constitutes a reckless disregard for public health or safety. S.C. Code ann. § 15-78-60(15) (2016) (governmental entity not liable for a loss “arising out of a defect or a condition in, on, under, or overhanging a highway, road, street, causeway, bridge, or other public way caused by a third party unless the defect or condition is not corrected by the particular govern- mental entity responsible for the maintenance within a rea- sonable time after actual or constructive notice”). 118 mo. rev. Stat. § 537.600(1) and (2) (2016) (emphasis supplied) (subsection (1) providing an affirmative defense in Missouri to claims involving highways constructed prior to September 12, 1977). 119 UtaH Code ann. § 63G-7-201(a)(i) (2016). 120 465 So. 2d 560, 561 N 1 (Fla. 1st DCA 1985). 121 Pembroke Pines, 67 So. 3d at 1164 (citation omitted). 122 126 A.D.3d 1081, 3 N.Y.S.3d 458 (N.Y. App. 2015). 123 Id. at 1083, 3 N.Y.S.3d at 1083 (citations omitted) (some internal quotation marks omitted). 124 Id.

16 to prove that the State’s alleged negligence was the proximate cause of the accident.125 Finally, in responding to the survey the South Carolina Department of Transportation (SCDOT) stated that the department has design immunity for highways pursuant to the Code of Laws of South Carolina Annotated Section 15-78-60(15).126 In Giannini v. South Carolina Department of Transportation,127 however, the South Carolina Supreme Court held that design immunity applied to the department’s initial discretion on whether to place median barriers, but that after the depart- ment was on notice of an existing hazard, it was a jury question as to whether SCDOT had breached its duty to maintain the road properly. The next part of the digest discusses plan- or design-immunity statutes that at least 18 states have. IV. IMMUNITY UNDER STATE PLAN- OR DESIGN-IMMUNITY STATUTES A. Overview In responding to the survey, nine transportation departments stated that one of their department’s defenses to a claim for a defective plan or design is that the department has immunity because of a plan- or design-immunity statute.128 Nine transpor- tation departments reported that their state does not have such a statute.129 Eight departments did not respond to the question. At least 18 states have a specific statute that pro- vides for government plan or design immunity. Of the states that have a plan- or design-immunity stat- ute, at least 16 also have a discretionary function exemption to government tort liability in their state tort claims act or equivalent act.130 The form of plan- or design-immunity statutes varies among the states. In some states, the statute simply states that there is no tort liability based on the design of a highway and does not require that a plan or design be approved in advance by a government body hav- ing the discretionary authority to do so or specifically require that a plan or design be prepared in accor- dance with previously approved or prevailing stan- dards.131 A few states provide for design immunity for projects that were constructed prior to a certain date.132 Some plan or design statutes provide for plan or design immunity both for original construction and any later improvements133 or reconstruction.134 125 Id. 126 Summer v. Carpenter, 328 S.C. 36, 492 S.E.2d 55 (1997). 127 378 S.C. 573, 664 S.E.2d 450 (2008). 128 Arizona DOT (citing arIz. rev. Stat. § 12-820.03), Colorado DOT, Georgia DOT (citing Ga. Code ann. § 50-21- 24-(10)), Indiana DOT (citing Ind. Code § 34-13-3-3), Kansas DOT (citing Kan. Stat. ann. § 75-6104(m)), Missouri DOT (citing mo. rev. Stat. § 537.600(2)), New Mexico DOT (citing N.M. Stat. ann. § 41-4-11), Oregon DOT, and South Carolina DOT. 129 Florida DOT, Kentucky Transp. Cab., Louisiana DOTD, Montana DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, and Wisconsin DOT. 130 Arizona, California, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Mississippi, Nebraska, New Jersey, New Mexico, North Dakota, South Carolina, and Vermont. 131 N.M. Stat. ann. § 41-4-11(B)(1) (2016) (waiver of immunity not applicable to a claim for “a defect in plan or design of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area….”); N.D. Cent. Code § 32-12.2-02(3)(b) (2016) (stating that there is no liability for “[a] claim based upon a decision to exercise or perform or a failure to exercise or perform a discretionary function or duty on the part of the state or its employees” and that “[d]iscretionary acts include acts, errors, or omissions in the design of any public project but do not include the drafting of plans and specifications that are provided to a contractor to construct a public project”); S.C. Code ann. § 15-78-60(15) (2016) (governmental entity not liable “for the design of highways and other public ways”); vt. Stat. ann. tit. 12, § 5601(e)(8) (2016) (State of Vermont not liable for “[a]ny claim arising from the selection of or purposeful deviation from a particular set of standards for the plan- ning and design of highways”); and wyo. Stat. ann. § 1-39- 120(a)(i) (2016) (waiver of immunity not applicable to “[a] defect in the plan or design of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area….”). 132 Ind. Code ann. § 34-13-3-3(18) (2016) (no liability for a loss resulting from the design of a highway, toll road project, tollway project, tollway, or project if the claimed loss occurs at least 20 years after the public highway, toll road project, toll- way, or project was designed or substantially redesigned) and mo. rev. Stat. § 537.600(1)(2) (2016): In any action under this subdivision wherein a plaintiff alleges that he was damaged by the negligent, defective or dangerous design of a highway or road, which was designed and constructed prior to September 12, 1977, the public entity shall be entitled to a defense which shall be a complete bar to recovery whenever the public entity can prove by a preponderance of the evi- dence that the alleged negligent, defective, or dangerous design reasonably complied with highway and road design standards generally accepted at the time the road or highway was designed and constructed. 133 arIz. rev. Stat. § 12-820-03 (2016); Cal. Gov’t Code § 830.6 (2016); Ga. Code ann. § 50-21-24(10) (2016); IdaHo Code ann. § 6-904(7) (2016); 745 Ill. Comp. Stat. ann. 10/3- 103(a) (2016); Kan. Stat. ann. § 75-6104(m) (2016); mISS. Code ann. § 11-46-9(1)(p) (2016); neb. rev. Stat. § 81,219(10) (2016); and N.J. Stat. ann. § 59:4-6(a) (2016). 134 Iowa Code § 669.14(8) (2016) (applicable to “[a]ny claim based upon or arising out of a claim of negligent design or specification, negligent adoption of design or specification, or negligent construction or reconstruction of a public improvement….”) and N.M. Stat. ann. § 41-4- 11(2)(B) (2016) (stating that the section does “not include liability for damages caused by…the failure to construct or reconstruct any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area….”).

17 Plan- or design-immunity statutes, however, as discussed in the next sections, tend to fall within one of the following categories: • Plan- or design-immunity statutes that require prior approval of a plan or design or compliance with previously approved or prevailing standards. • Plan- or design-immunity statutes that require both prior approval of a plan or design and compliance with previously approved or prevailing standards. • Plan- or design-immunity statutes that require only that a plan or design comply with previously approved or prevailing standards. B. Plan- or Design-Immunity Statutes that Require Prior Approval of a Plan or Design or Compliance with Previously Approved Standards In California, Idaho, Illinois, and New Jersey, the plan- or design-immunity statute requires that a plan or design be approved before construction or that it comply with previously approved or prevail- ing standards. In California, [a] public entity is liable for injury proximately caused by a dangerous condition of its property if the dangerous condi- tion created a reasonably foreseeable risk of the kind of injury sustained, and the public entity had actual or con- structive notice of the condition a sufficient time before the injury to have taken preventive measures.135 A public entity may avoid liability for a danger- ous condition, however, based on the affirmative defense provided in the California plan- or design- immunity statute.136 California’s statute grants a public entity plan or design immunity for an injury caused by the plan or design of a construction of, or an improvement to, public property where such plan or design has been approved in advance of the construction or improvement by the legislative body of the public entity or by some other body or employee exercising discretionary authority to give such approval or where such plan or design is prepared in conformity with standards previously so approved, if the trial or appellate court determines that there is any substantial evidence upon the basis of which (a) a reasonable public employee could have adopted the plan or design or the standards therefor or (b) a reasonable legisla- tive body or other body or employee could have approved the plan or design or the standards therefor.137 As one California court has explained, [t]he Legislature created the design immunity defense…to prevent the discretionary design decisions of government offi- cers vested with authority to make those decisions from being second-guessed in litigation. …[T]he public entity claiming design immunity must prove that the person or entity who made the decision is vested with the authority to do so.138 The first prong of a public entity’s defense under the California statute is that the “plan or design has been approved in advance of the construction or improvement by the legislative body of the public entity or by some other body or employee exercising discretionary authority to give such approval….”139 In Martinez v. County of Ventura,140 a California appellate court held that there was no design immu- nity under Section 830.6, because there was no evi- dence that the top-hat drain design at issue was ever approved; thus, the design immunity defense failed. California cases also hold that the element allegedly giving rise to a tort claim must have been a part of the approved plan or design, that is “‘[a]dd- ons,’ which are not part of the approved plan or design and which are installed after the public works project is approved, do not come under the umbrella of design immunity.”141 If an agency such as the California Department of Transportation (Caltrans) is unable to prove prior approval as required by the statute, then the agency may rely on the second prong of the defense, namely that the plan or design nevertheless conforms to previously approved standards. In Illinois, a local public entity is not liable for an injury caused by the adoption of a plan or design of a construction of, or an improvement to public property where the plan or design has been approved in advance of the con- struction or improvement by the legislative body of such entity or by some other body or employee exercising discre- tionary authority to give such approval or where such plan or design is prepared in conformity with standards previ- ously so approved. The local public entity is liable, however, if after the execution of such plan or design it appears from its use that it has created a condition that it is not reason- ably safe.142 Likewise, the Idaho Tort Claims Act143 preserves immunity for a claim that [a]rises out of a plan or design for construction or improve- ment to the highways, roads, streets, bridges, or other public 135 Cornette, 26 Cal. 4th at 66, 26 P.3d at 333–34 (citing Cal. Gov’t Code § 835(b)). 136 Id. (citing Cal. Gov’t Code § 830.6). 137 Cal. Gov’t Code § 830.6 (emphasis supplied). 138 Martinez v. County of Ventura, 225 Cal. App. 4th 364, 373, 169 Cal. Rptr. 3d 880, 886 (2014) (citations omit- ted) (internal quotation marks omitted). See also Johnston v. County of Yolo, 274 Cal. App. 2d 46, 79 Cal. Rptr. 33 (1969). 139 Cal. Gov’t Code § 830.6. 140 225 Cal. App. 4th 364, 169 Cal. Rptr. 3d 880 (2014). 141 Castro v. City of Thousand Oaks, 239 Cal. App. 4th 1451, 1453, 192 Cal. Rptr. 3d 376, 378 (Cal. App. 2015). 142 745 Ill. Comp. Stat. ann. 10/3-103(a) (2016) (emphasis supplied). 143 IdaHo Code §§ 6-901–29 (2016).

18 property where such plan or design is prepared in substan- tial conformance with engineering or design standards in effect at the time of preparation of the plan or design or approved in advance of the construction by the legislative body of the governmental entity or by some other body or administrative agency, exercising discretion by authority to give such approval.144 The New Jersey plan- or design-immunity statute similarly provides two bases on which plan or design immunity will attach. Neither the public entity nor a public employee is liable under this chapter for an injury caused by the plan or design of pub- lic property, either in its original construction or any improve- ment thereto, where such plan or design has been approved in advance of the construction or improvement by the Legisla- ture or the governing body of a public entity or some other body or a public employee exercising discretionary authority to give such approval or where such plan or design is pre- pared in conformity with standards previously so approved.145 As discussed in the following Subsection C, although other state plan- or design-immunity stat- utes implicitly may authorize a court to make a fac- tual determination of whether a public entity has complied with the required elements of the statute, the California statute arguably is more rigorous in requiring what a public entity must prove before immunity will be found to have attached to a plan or design prior to a construction project. Several cases illustrate how the courts have applied California’s plan- or design-immunity stat- ute. In Castro v. City of Thousand Oaks,146 the city council approved the plans for a street rehabilita- tion project but did not approve a warning beacon that a driver did not see before hitting pedestrians in a crosswalk.147 Although the City Engineer had authorized the manager of the traffic engineering division to purchase and install the pedestrian warning beacon, an appellate court rejected the claim that the City Engineer had discretionary authority to approve the warning beacon. The court’s decision was based on the City’s municipal code that provided in part that “[t]he City Engineer shall place and maintain, or cause to be placed and main- tained, all other official traffic control devices where, in the opinion of the City Engineer, such official traf- fic control devices are necessary to protect the public safety.”148 There was no authority granted to the City Engineer to approve the plan or design of a traffic-control device: [T]he public entity claiming design immunity must prove that the person or entity who made the decision is vested with the authority to do so. Recognizing “implied” discre- tionary approval would vitiate this requirement and pro- vide public entities with a blanket release from liability that finds no support in section 830.6.149 The appellate court reversed a trial court’s ruling that the State’s design-immunity statute protected the decision to add an additional safety feature.150 Thus, there were “material triable issues of fact that a crosswalk/street intersection was a dangerous con- dition of public property.”151 In Alvis v. County of Ventura,152 the plaintiffs suf- fered injuries or were relatives of persons who died in a landslide in 2005. In March 1995, after a land- slide in La Conchita, local residents had petitioned to compel the county to remove debris from a road. The county retained Zeiser Kling Consultants, Inc. (Zeiser), to conduct a study. Zeiser’s 1998 study con- cluded that the debris could be removed safely using an alternative referred to as a “pile lagging wall.” Zeiser’s report observed, however, that none of the approaches or alternatives being considered were designed to increase the stability of the La Conchita landslide mass.153 The wall was constructed, but on January 10, 2005, a landslide overwhelmed the wall and killed Alvis.154 Alvis’s parents and brother filed an action against the County for wrongful death, dangerous condition of public property, nuisance, property damage, and inverse condemnation.155 The complaint alleged, inter alia, that the County had actual or construc- tive knowledge that the wall would constitute a dan- gerous condition of public property in part because the County and other defendants were advised by at least one consultant that the design of the wall failed to take into account its effect if there were a landslide or mudslide.156 A California appellate court held in Alvis that the County prevailed on the issue of whether there was a causal relationship between the plan and the acci- dent. Not only did the complaint allege that the 144 Woodworth v. State, 154 Idaho 362, 364, 298 P.3d 1066, 1068 (Idaho 2013) (quoting IdaHo Code § 6-904(7)) (emphasis supplied). 145 N.J. Stat. ann. § 59:4-6(a) (2016) (emphasis supplied). 146 239 Cal. App. 4th 1451, 192 Cal. Rptr. 3d 376 (Cal. App. 2015). 147 Id. at 1454. 148 Id. at 1456. 149 Id. at 1457 (quoting Martinez v. County of Ventura, 225 Cal. App. 4th 364, 373, 169 Cal. Rptr. 3d 880 (2014)) (some internal quotation marks omitted). 150 Id. at 1455. 151 Id. at 1458 (citation omitted). 152 178 Cal. App. 4th 536, 100 Cal. Rptr. 3d 494 (2009). 153 Id. at 539–40, 100 Cal. Rptr. 3d at 497–98. 154 Id. at 542, 100 Cal. Rptr. 3d at 499. 155 Id. 156 Id. at 542, 100 Cal. Rptr. 3d at 500.

19 design of the wall caused the plaintiffs’ injuries, but also that there was no “substantial evidence of any independent cause.”157 The County established the first prong of the statutory immunity defense because the County board of supervisors exercised its discretion to approve the plans for the project.158 Alvis argued that because the board was unaware of one consultant’s concerns, the board’s exercise of discretion could not have been a “knowing and informed” one.159 The court held, however, that Section 830.6 does not require that the public agen- cy’s approval has to be a knowing or informed one.160 Significant facts for the court were that the board approved the plans on the recommendation of a registered professional civil engineer, whose recommendation was “backed by other professional consultants.”161 Furthermore, the court held that there was “ample evidence” to support the design’s reasonableness.162 In Arreola v. County of Monterey,163 the court found that the state’s Design Planning Manual required that the highway drainage structure be able to accommodate a 100-year storm. It was undis- puted, however, that when the state built the high- way bypass in the late 1960s, the government knew that the project would not contain a 100-year storm.164 In addition, no enlargement of the project had been “approved or commenced” as of that period. Because the state’s engineers never considered the issue of flooding, it was “questionable” as to whether immunity applied at all.165 A Louisiana case, Niven v. Boston Old Colony Insurance Co.,166 also illustrates the importance of a design having been approved by the LaDOTD. In Niven the design work on the bridge in question, where the plaintiff was hit by a car and thrown over the railing of the bridge, was completed by a private engineering company in 1963 and approved by LaDOTD. At issue was the height of the rail. The trial court apportioned 10 percent of the fault for the accident to LaDOTD for defective design of the shoulder and curb and the railing of the overpass. The appeals court found, however, that the design met AASHTO standards when the bridge was built and that current AASHTO standards allow the bridge to remain in place, meaning that the bridge complied with Louisiana Revised Statutes Section 48:35(A). The court observed that over one-half of Interstate overpasses built in the 1960s in Louisiana and other states used the same design, and that FHWA had examined and approved the design. There was no evidence that the shoulder–curb– railing design on this or any of the other similarly designed overpasses had caused an accident since their completion in the 1960s.167 Finally, the appellate court held that the trial court’s decision was “manifestly erroneous” because the “DOTD neither knew, nor should have known, that there was any alleged defect in the bridge design….”168 C. Requirement that a Plan or Design Be Supported by Substantial Evidence The California statute differs from other state immunity statutes discussed herein. First, a public authority must establish that a plan or design was approved in the required way or that it comported with previously approved standards. Second, the court must determine whether there is “any sub- stantial evidence upon…which (a) a reasonable pub- lic employee could have adopted the plan or design or the standards therefor or (b) a reasonable legisla- tive body or other body or employee could have approved the plan or design or the standards there- for.”169 Whether there is substantial evidence to support the reasonableness of a plan or design is a matter that must be decided by the court, not by a jury.170 For evidence to be “substantial,” the evidence “must be of solid value, which inspires confidence.”171 If a public authority meets the substantial evidence test, even if there is evidence that a plan or design was defective, there is immunity under the statute for the design.172 In Arreola, supra, discussed in Section IV.B, there were multiple defendants in an action brought by about 300 plaintiffs in 6 consolidated complaints in tort and inverse condemnation for damages caused by the failure of the Pajaro River Levee Project during a heavy rainstorm in 1995.173 The court held that the 157 Id. at 552, 100 Cal. Rptr. 3d at 507. 158 Id., 100 Cal. Rptr. 3d at 507–08. 159 Id., 100 Cal. Rptr. 3d at 508. 160 Id. 161 Id. at 553, 100 Cal. Rptr. 3d at 508. 162 Id. at 554, 100 Cal. Rptr. 3d at 509. 163 99 Cal. App. 4th 722, 122 Cal. Rptr. 2d 38 (2002). 164 Id. at 756, 122 Cal. Rptr. 2d at 65. 165 Id. at 759, 122 Cal. Rptr. 2d at 67. 166 751 So. 2d 414 (La. App. 2000). 167 Niven, 751 So. 2d at 417. 168 Id. 169 Cal. Gov’t Code § 830.6 (2016). 170 Cornette, 26 Cal. 4th at 72, 26 P.3d at 338 (quoting Cal. Gov’t Code § 830.6) (internal quotation marks omit- ted). See also Arreola, 99 Cal. App. 4th at 757, 122 Cal. Rptr. 2d at 65 (stating that there must be substantial evi- dence supporting the reasonableness of the plan or design). 171 Id. 172 Id. (citation omitted). 173 Arreola, 99 Cal. App. 4th at 730, 122 Cal. Rptr. 2d at 44.

20 government had not presented substantial evidence upon which “a reasonable public employee could have approved a design that did not take flooding into account.”174 The court stated that although the State presented evidence that the original design was rea- sonable, the court was “troubled by the conclusory nature of that evidence.”175 State’s engineers testified that the design was reasonable, but the only foundation offered for their conclusion was the pre- sumption that someone or something else would take care of flooding. Such evidence lacks the solid value necessary to con- stitute substantial evidence. Moreover, State effectively con- cedes that under the circumstances that existed at the time the design was approved in 1963, it was no longer reasonable to rely on the Project to contain a 100-year flood. The unrea- sonableness of the design is further demonstrated by the design documents themselves, which in 1960 presumed that peak flows would cause some shallow flooding. Logic tells us that once it was determined that a 100-year storm was certain to overtop the Project, more extensive flooding would occur.176 The court held that the State did not offer any substantial evidence upon which a reasonable pub- lic employee could have approved a design that did not take flooding into account.177 In contrast, in Fuller v. Dep’t of Transp.,178 an appellate court held that Caltrans had immunity under the State’s design-immunity statute. In Fuller, the State successfully established that there was a causal relationship between the project design and the accident, discretionary approval of the design prior to construction, and substantial evi- dence supporting the reasonableness of the design.179 D. Plan- or Design-Immunity Statutes Requiring Prior Approval of a Plan or Design and Compliance with Previously Approved or Prevailing Standards The design-immunity statutes in Kansas and Mississippi require compliance with both condi- tions—prior approval and conformity with previ- ously approved or prevailing standards at the time of the development of the plan or design.180 The Kansas statute states that a governmental entity (or an employee acting within the scope of the employee’s employment) is not liable for damages caused by a plan or design for the construction of or an improvement to public property if the plan or design is approved in advance of the construc- tion or improvement by the governing body of the govern- mental entity or some other body or employee exercising discretionary authority to give such approval and if the plan or design was prepared in conformity with the gener- ally recognized and prevailing standards in existence at the time such plan or design was prepared….181 In a similar manner, in Mississippi there is no liability for a claim that arises out of a plan or design for the construction of or improvements to highways, roads, streets, bridges, and other public property when there was prior approval of the plan or design in the manner required by the statute “and where such plan or design is in conformity with engineer- ing or design standards in effect at the time of prep- aration of the plan or design….”182 E. Plan- or Design-Immunity Statutes Requiring Only that a Plan or Design Comply with Previously Approved or Prevailing Standards As seen in Section IV.B, in California, Idaho, Illinois, and New Jersey a public entity may establish immu- nity by showing that a plan or design had the required prior approval as prescribed by statute or that a plan or design complied with previously approved standards. The plan- or design-immunity statutes in Arizona, Georgia, Idaho, Iowa, and Missouri require only that a plan or design be prepared in conformance with gener- ally accepted engineering or design standards in effect at the time of the preparation of the plan or design or some variation of that language.183 Thus, in Arizona 174 Id. at 759, 122 Cal. Rptr. 2d at 67. 175 Id. 176 Id. 177 Id. 178 89 Cal. App. 4th 1109, 107 Cal. Rptr. 2d 823 (2001). 179 Id., 89 Cal. App. 4th at 1113, 107 Cal. Rptr. 2d 826. See also Castro v. City of Thousand Oaks, 239 Cal. App. 4th 1451, 1455, 192 Cal. Rptr. 3d 376 (2015). 180 Kan. Stat. ann. § 75-6104(m) (2016) and mISS. Code ann. § 11-46-9(1)(p) (2016). 181 Kan. Stat. ann. § 75-6104(m) (2016) (emphasis supplied). 182 mISS. Code ann. § 11-46-9(1)(p) (2016) (emphasis supplied). 183 arIz. rev. Stat. § 12-820.03. See also Ga. Code ann. § 50-21-24(10) (2016) (providing that “[t]he state shall have no liability for losses resulting from…[t]he plan or design for construction of or improvement to highways, roads, streets, bridges, or other public works where such plan or design is prepared in substantial compliance with generally accepted engineering or design standards in effect at the time of preparation of the plan or design”); IdaHo Code ann. § 6-904(7) (2016) (“stating where such plan or design is prepared in substantial conformance with engineering or design standards in effect at the time of preparation of the plan or design….”); Iowa Code § 669.14(8) (2016) (providing that unless there is gross negligence there is no liability for [a]ny claim based upon or arising out of a claim of negligent design or specification, negligent adoption of design or specification, or negligent construction or reconstruction of a highway, secondary road, or street…that was constructed or reconstructed in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction); Iowa Code § 669.14(9) (2016) (stating that there is no liability for

21 there is immunity for an injury arising out of a plan or design “for [the] construction or maintenance of or improvement to highways, roads, streets, bridges, or rights-of-way if the plan or design is prepared in conformance with generally accepted engineering or design standards in effect at the time of the prepara- tion of the plan or design….”184 The statute also requires, however, “reasonably adequate warning” of “any unreasonably dangerous hazards….”185 F. Plan- or Design-Immunity Statutes Requiring Only Prior Approval The Nebraska statute requires only prior approval. There is immunity for a plan or design of the “construction of or an improvement to any high- way…if the plan or design is approved in advance of the construction or improvement by the governing body of the governmental entity or some other body or employee exercising discretionary authority to give such approval….”186 G. Immunity for Deviations from an Approved Plan or Design or from Design Standards Two states’ plan- or design-immunity statutes grant immunity for the plan or design of a highway or other feature, as well as for a deviation from cer- tain design practices or standards. For example, the New Mexico plan- or design-immunity statute per- mits “a deviation from standard geometric design practices” for highways, bridges, and other named improvements if the deviation satisfies three statu- tory conditions—the deviation: (a) is required by extraordinary circumstances; (b) has been approved by the governing authority; and (c) is reasonable and necessary as determined by the appli- cation of sound engineering principles taking into consid- eration the appropriate cultural, ecological, economic, environmental, right-of-way through Indian lands, historical or technical circumstances.187 The Vermont statute is somewhat different. The statute provides that the State is not liable for “[a]ny claim arising from the selection of or purpose- ful deviation from a particular set of standards for the planning and design [sic] of highways.”188 H. Whether Design Immunity May Be Lost Because of a Dangerous or Hazardous Condition Caused by Changed Conditions As discussed in Section III.E, a transportation department may be held liable for a dangerous or hazardous condition when the department knew or should have known of the condition prior to an acci- dent but failed to correct or provide adequate notice of the condition. With respect to plan- or design- immunity statutes, the question has arisen, after statutory immunity attaches to a plan or design, whether the immunity is perpetual or whether it may be lost because of changed conditions that have created a dangerous condition of public property. Arizona Revised Statutes Section 12-820.03 pro- vides public entities with a “‘state of the art’ affirma- tive defense against claims for injuries arising out of a plan or design for construction of a roadway” as long as a public entity shows “that the plan or design, when created, conformed to generally accepted engineering or design standards and that warnings of any unreasonably dangerous hazards were given that were adequate to permit the public to take suitable precautions.”189 In Glazer v. State,190 however, an Arizona trial court ruled that Section 12-820.03 did not apply because Glazer did not allege that the highway was unsafe when it was designed, but rather that a change in circumstances by 2007 had rendered the highway “unreasonably unsafe” where the accident occurred.191 The trial court’s analysis was that Section 12-820.03 does not permit the State “to properly design a high- way in 1967 and then ignore the developments of 40 years in the speed, size, and volume of traffic that might render the highway no longer reasonably safe.”192 The court of appeals affirmed.193 The Supreme Court of Arizona reversed, however. The state’s Supreme Court stated that although the State has a common-law duty to travelers to keep its roads reasonably safe for travel, the State has immunity “for roadway-related injuries under 188 vt. Stat. ann. tit. 12, § 5601(e)(8) (2016). 189 Glazer v. State, 237 Ariz. 160, 162, 347 P.3d 1141, 1143 (2015). 190 237 Ariz. 160, 347 P.3d 1141 (2015). 191 Id. at 162, 347 P.3d at 1143. 192 Id. (quoting trial court’s ruling) (internal quotation marks omitted). 193 Id. [a]ny claim based upon or arising out of a claim of negligent design or specification, negligent adoption of design or specification, or negligent construction or reconstruction of a public improvement…, or other public facility that was constructed or reconstructed in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction); and mo. rev. Stat. § 537.600(1)(2) (2016) (providing that a “public entity shall be entitled to a defense…whenever the public entity can prove by a preponderance of the evidence that the alleged negligent, defective, or dangerous design reasonably complied with highway and road design stan- dards generally accepted at the time the road or highway was designed and constructed”). 184 arIz. rev. Stat. § 12-820.03 (2016). 185 Id. 186 neb. rev. Stat. § 81-8,219(11) (2016). 187 N.M. Stat. ann. §§ 41-4-11(B)(1) and (3)(a)-(c) (2016).

22 the circumstances set forth in § 12-820.03….”194 The court held that “the affirmative defense in [the plan or design immunity statute] is available when mate- rial changes to travel over roadways or roadway fea- tures have rendered the original plans or designs substandard and no other plans have succeeded them.”195 In the event of an unreasonably dangerous hazard, the State may invoke its affirmative defense under Section 12-820.03 if it proves that it provided “reasonably adequate warning” to allow the public to take suitable precautions.196 The court held that an injury may “arise” out of a plan or design if the injury results or proceeds from the plan or design of a highway.197 In this case there was no evidence suggesting that the construction of the relevant stretch of I-10, includ- ing the median, changed since 1967. Just as no barrier existed to prevent cross-median accidents in 2007, no bar- rier prevented them in 1967. In other words, the highway had the same design in 2007 that it had when built. For these reasons, and based on the wording of § 12-820.03 and the crux of Glazer’s negligence claim, we conclude that the Glazers’ injuries were ones “arising out of” the State’s origi- nal construction design for that portion of I-10.198 The court stated that the lower courts’ decisions would “vitiate[] much of § 12-820.03’s protection as a state-of-the-art defense.”199 The court cited with approval a Georgia decision in which the Georgia Court of Appeals held that the Georgia Tort Claims Act exempts a public entity from liability for failing to upgrade a highway to meet current design stan- dards because permitting liability “would effectively eliminate the [Act’s] protection.”200 Nevertheless, in Glazer the State was held liable because under Section 12-820.03 the State must provide reasonably adequate warning of any unrea- sonably dangerous hazards to enable travelers to take suitable precautions.201 The State failed to establish that it had complied with Section 12-820.03’s “warning proviso.” The State did not show either that the open median was not an “unrea- sonably dangerous hazard” that obviated the need for warnings or, assuming the open median was an unreasonably dangerous hazard, that the State had provided adequate warning.202 Thus, the court held that “a reasonable person could have found that the open median in the accident area was an ‘unreason- ably dangerous hazard’” of which the State had not given adequate warning to establish its affirma- tive defense under Section 12-820.03.203 Under California law, a public entity may lose its design immunity when the plan or design in its actual operation becomes dangerous under changed physical conditions.204 California’s design-immunity statute, however, contains several provisos that permit design immunity to continue. The first pro- viso is that when a public property is not in confor- mity with an approved plan or design or applicable standards, a responsible public entity’s immunity continues for a reasonable time to permit the public entity to obtain funds for and carry out remedial work necessary to allow such public property to be in confor- mity with a plan or design approved by the legislative body of the public entity or other body or employee, or with a plan or design in conformity with a standard previously approved by such legislative body or other body or employee.205 Second, however, if a public entity finds that it is impractical or impossible to remedy the nonconformity, because of lack of funds, for example, the immunity continues “so long as such public entity shall reason- ably attempt to provide adequate warnings of the exis- tence of the condition not conforming to the approved plan or design or to the approved standard.”206 In an Idaho case, Woodworth v. State,207 discussed in Section IV.I, Woodworth could not avoid the effect of the State’s design-immunity statute by alleging that conditions had changed with respect to a “for- merly adequate and approved design.”208 The court stated that in Idaho, “plan or design immunity under 202 Id. at 166, 347 P.3d at 1148. 203 Id. at 167, 347 P.3d at 1148 (citations omitted). 204 Alvis v. County of Ventura, 178 Cal. App. 4th 536, 554, 100 Cal. Rptr. 3d 494, 509 (Cal. App. 2009). 205 Cal. Gov’t Code § 830.6 (2016). 206 Cal. Gov’t Code § 830.6 (2016). The section also pro- vides that when “a person fails to heed such warning or occupies public property despite such warning, such fail- ure or occupation shall not in itself constitute an assump- tion of the risk of the danger indicated by the warning.” See also Cornette, 26 Cal. 4th at 66–67, 26 P.3d at 334. 207 154 Idaho 362, 298 P.3d 1066 (2013). 208 Id. at 365, 298 P.3d at 1069. 194 Id. at 162, 347 P.3d at 1144. Section 12-820.03 stated: Neither a public entity nor a public employee is liable for an injury arising out of a plan or design for construc- tion or maintenance of or improvement to highways, roads, streets, bridges, or rights-of-way if the plan or design is prepared in conformance with generally accepted engineering or design standards in effect at the time of the preparation of the plan or design, provided, however, that reasonably adequate warning shall be given as to any unreasonably dangerous hazards which would allow the public to take suitable precautions. 195 Id. at 168, 347 P.3d at 1149. 196 Id. at 164, 347 P.3d at 1145 (citation omitted). 197 Id. (citation omitted). 198 Id. 199 Id. at 165, 347 P.3d at 1146. 200 Id., 347 P.3d at 1147 (quoting Daniels v. Dep’t of Transp., 222 Ga. App. 237, 474 S.E.2d 26, 28 (1996)). 201 Id. at 166, 347 P.3d at 1147 (citation omitted).

23 I.C. § 6-904(7) can potentially extend into perpetu- ity,”209 but the immunity is not absolute. For instance, the design-immunity statute does not prevent a plaintiff “from showing that the State has acted negligently by failing to warn, by violating provi- sions of the Idaho Code, or by violating a non- discretionary directive of the Manual on Uniform Traffic Control Devices (MUTCD).”210 On the one hand, in Illinois a “local public entity is liable…if after the execution of such plan or design it appears from its use that it has created a condi- tion that it is not reasonably safe.”211 On the other hand, in Iowa a claim is not allowed “for failure to upgrade, improve, or alter any aspect of an existing highway, secondary road, or street, to new, changed, or altered design standards.”212 Indiana provides that the design-immunity stat- ute does not “relieve a responsible governmental entity from the continuing duty to provide and maintain public highways in a reasonably safe con- dition.”213 In Indiana, however, a governmental entity also is not liable if a loss occurs because of the design of a highway, toll road project, tollway, or project when “the claimed loss occurs at least twenty (20) years after the public highway, toll road project, tollway, or project was designed or substantially redesigned….”214 Nevertheless, as noted, the statu- tory provision does not relieve the government of its duty to provide and maintain public highways in a reasonably safe condition.215 In South Carolina, although South Carolina Code Section 15-78-60(15) shields a government entity from liability for the design of highways and other public ways, design immunity “does not extend to maintenance issues after the DOT has notice of a hazardous condition.”216 In Giannini v. South Carolina Department of Transportation,217 the Supreme Court of South Carolina held that design immunity, assum- ing immunity attaches to a design, is not necessarily perpetual. The court affirmed a jury verdict against the South Carolina Department of Transportation (SCDOT) for the plaintiff ’s decedent and a driver and passenger. The plaintiffs alleged that SCDOT was negligent in failing to install median barriers that would have prevented another vehicle from crossing over and into the southbound lane of traffic on Interstate 77 in Columbia, South Carolina. SCDOT argued that South Carolina Code Section 15-78-60(15) shielded it from liability. The statute provides that a governmental entity is not liable for a loss that results from the “absence, condition, or malfunction...of any...median barrier unless the absence, condition, or malfunction is not corrected by the governmental entity responsible for its main- tenance within a reasonable time after actual or constructive notice....”218 The statute also provides that [n]othing in this item gives rise to liability arising from a fail- ure of any governmental entity to initially place any of the above signs, signals, warning devices, guardrails, or median barriers when the failure is the result of a discretionary act of the governmental entity.... Governmental entities are not liable for the design of highways and other public ways....219 In Giannini, SCDOT argued that it had no duty to the plaintiffs because the department’s actions were the result of the design of the highway for which the department had immunity.220 The court reaffirmed, however, South Carolina law that the department’s design immunity “does not extend to maintenance issues after the DOT has notice of a hazardous condi- tion.”221 Notice may be actual or constructive.222 The court agreed, however, with a dissenting opinion that argued that the initial exercise of discretion on whether to place median barriers or guardrails “includes the right to be wrong.”223 I. Plan- or Design-Immunity Statute Not to Be Avoided by Artful Pleading In Woodworth v. State,224 a case that involved a pedestrian accident at an intersection, the plaintiff sought to plead in a way that would avoid the effect of Idaho Code Annotated Section 6-904(7). The plaintiff argued that his case was not about whether the State negligently planned or designed the inter- section; rather, the plaintiff argued that the State failed “to perform any engineering study and to do what the study, if performed, would have shown to 209 Id. at 366, 298 P.3d at 1070. 210 Id. (footnotes omitted). The court stated “that the MUTCD has the force and effect of law, and that the State’s failure to comply with a mandatory provision of the MUTCD constitutes negligence per se.” Id. 211 745 Ill. Comp. Stat. ann. 10/3-103 (2016). 212 Iowa Code § 669.14(8) (2016). 213 Ind. Code ann. § 34-13-3-3(18) (2016). 214 Id. 215 Id. 216 Giannini v. S.C. Dep’t of Transp., 378 S.C. 573, 580, 664 S.E.2d 450, 454 (2008). 217 Id., 664 S.E.2d 450. 218 See id. at 579–80, 664 S.E.2d at 453 (quoting S.C. Code ann. § 15-78-60(15) (2005)). 219 See id. (emphasis supplied). 220 Id. at 580, 664 S.E.2d at 453. 221 Id., 664 S.E.2d at 454 (citing Wooten v. S.C. Dep’t of Transp., 333 S.C. 464, 511 S.E.2d 355 (1999)). 222 Id. at 581–82, 664 S.E.2d at 454 N 1 (some citations omitted). 223 Id. at 582, 664 S.E.2d at 454 N 1. 224 154 Idaho 362, 298 P.3d 1066 (Idaho 2013).

24 be necessary.”225 Notwithstanding Woodworth’s argu- ment, the court held that the plaintiff ’s complaint did arise out of the intersection’s plan or design. The engineering study that Woodworth argues should have been performed would not have been necessary, but for the inferior design of the intersection based on the: (1) lack of traffic control devices; (2) lack of warnings and markings; (3) lack of enhanced lighting; and, (4) high rate of speed.226 The plaintiff could not avoid Section 6-904(7) because “a plaintiff’s claim need not be based primar- ily on negligent plan or design” for the statute to apply and immunize the State.227 The court held that Section 6-904(7) barred Woodworth’s claim for a negligently planned or designed intersection.228 Moreover, the State neither had a duty to perform an engineering study nor was the State negligent for failing to perform one.229 The next part of the digest discusses highway-defect statutes that a limited number of states have and whether design errors or omissions constitute a defect within the meaning of a highway-defect statute. V. DESIGN-IMMUNITY AND HIGHWAY- DEFECT STATUTES Some states, such as Connecticut, have a highway- defect statute. In Connecticut, the statute authorizes a civil action for injuries or death caused by a defec- tive highway, bridge, or sidewalk or by the absence of any railing or fence on the side of a bridge or part of a road raised above the adjoining ground, making it unsafe for travel.230 The question has arisen as to whether design errors or omissions come within the meaning of a highway-defect statute. Based on Connecticut case law, a highway defect is “[a]ny object in, upon, or near the traveled path, which would necessarily obstruct or hinder one in the use of the road for the purpose of traveling thereon….”231 The Connecticut Department of Transportation’s (ConnDOT) obligation under Section 13a-144 is to remedy a highway defect when the department has actual or constructive notice of a specific defect.232 Whether Section 13a-144 precludes a claim based on a defective plan or design was at issue in Stotler v. DOT.233 The administratrix of the decedent’s estate alleged that ConnDOT was at fault because the DOT’s design, construction, or repair of the acci- dent location created an unsafe condition.234 More- over, the plaintiff alleged that ConnDOT failed to provide adequate warnings and signage on the downhill grade and to construct a necessary run- away truck ramp.235 A Connecticut appellate court held, however, that a defect in the plan by which the highway was con- structed does not come within the meaning of the highway-defect statute.236 Because a public author- ity acts in a quasi-judicial or legislative capacity in adopting a plan for the improvement or repair of a street or highway, a public authority may not be held liable for injuries allegedly caused by errors or defects in a plan that was adopted.237 The court held that Section 13a-144 does not apply to measures that are “extrinsic to the roadway” and that “an alleged design defect must ‘actually be in the road- bed or so near to it as to necessarily obstruct or hinder one in the use of the road for the purpose of traveling thereon....’”238 Massachusetts has a highway-defect statute, which states: The commonwealth shall be liable for injuries sustained by persons while traveling on state highways, if the same are caused by defects within the limits of the constructed trav- eled roadway, …except that the commonwealth shall not be liable for injury sustained because of the want of a railing in or upon any state highway, or for injury sustained upon the sidewalk of a state highway or during the construction, reconstruction or repair of such highway.239 In Ram v. Charlton,240 however, the Supreme Judicial Court of Massachusetts held that the term “defect” within the meaning of the Massachusetts highway-defect statute includes design errors.241 Because the plaintiff Ram failed to provide the required 30-day notice of her claim arising out of a single-car accident, she argued that her claim was not governed by the highway-defect statute. Ram argued rather that her claim against the town and 225 Id. at 364, 298 P.3d at 1068 (internal quotation marks omitted). 226 Id. at 365, 298 P.3d at 1069. 227 Id. 228 Id. 229 Id. at 367, 298 P.3d at 1071. 230 Conn. Gen. Stat. § 13a-144 (2016). 231 Stotler v. DOT, 142 Conn. App. 826, 832, 70 A.3d, 114, 122 (2013) (citation omitted) (internal quotation marks omitted). 232 Id. 233 142 Conn. App. 826, 70 A.3d 114 (2013). 234 Id. at 828–29, 70 A.3d at 118. 235 Id. at 829, 70 A.3d at 118. 236 Id. at 837, 70 A.3d at 123 (quoting Hoyt v. Danbury, 69 Conn. 341, 37 A. 1051 (1897)) (quotation marks omit- ted). 237 See id. (citation omitted). 238 Id. at 841, 70 A.3d at 125 (citation omitted). 239 maSS. Gen. lawS ann. ch. 81, § 18 (2016). 240 409 Mass. 481, 567 N.E.2d 208 (1991). 241 Id. at 488–89, 567 N.E.2d at 213.

25 the State was based on the negligent design of the highway and therefore was cognizable under the Massachusetts Tort Claims Act, General Laws, Chapter 258. The court held that the defect statute, General Laws, Chapter 84, Section 15, was the plaintiff ’s sole remedy against the town, as well as against the Commonwealth, for injuries on state highways.242 Under the Massachusetts statute, a defect includes “‘anything in the state or condition of the way that renders it unsafe or inconvenient for ordinary travel’” [emphasis in original] and, thus, “encom- passes claims like those made by the plaintiff.”243 Furthermore, the court held that a “failure to correct an allegedly negligently designed road asserts the existence of a ‘defect’ under the public way statutes because the road’s layout is an aspect of its state or condition that renders it unsafe or inconvenient for ordinary travel.”244 The next part of the digest discusses whether a transportation department’s highway contractor, if sued for a defective plan or design, may claim sover- eign or governmental immunity on the same basis as the transportation department. VI. WHETHER A DESIGN CONSULTANT OR CONTRACTOR MAY CLAIM THE BENEFIT OF SOVEREIGN OR GOVERNMENTAL IMMUNITY A. Design Consultants’ or Contractors’ Claims of Immunity Based on a Government Agency’s Immunity Several cases have considered whether a design consultant or contractor, when sued for a defective plan or design, may claim the benefit of a transpor- tation department’s sovereign or governmental immunity. One article argues that [a] contractor should not be held liable for defects in the work if he followed the plans as directed. Like any implied warranty, however, this “doctrine” is dependent on the spe- cific circumstances of particular projects and the actual intent and reasonable expectations of the parties. The implied warranty does not, for example, trump express con- tractual warranties.245 Another article explains that “the judicially-created doctrine of the ‘government contractor defense’” evolved from the doctrine of sovereign immunity and means that “private entities that contract with government to help it perform its necessary func- tions” may share in the government’s immunity.246 As long as a government contractor is not negligent, the contractor is not liable for injuries resulting from the performance of its contract. The govern- ment contractor defense is not available to a public contractor when “his activities in carrying out his contract inadvertently and unnecessarily cause injury to an innocent third party.”247 In the survey conducted for the digest, transpor- tation departments were asked whether in their state a contractor is able to claim the benefit of their department’s sovereign or governmental immunity when the contractor that is responsible for the design of a highway or other public improvement is sued by a third party (e.g., an injured motorist) for a defective plan or design. Although 1 department said that a contractor may do so in its state,248 18 departments said that a contractor could not claim sovereign or governmental immunity.249 The Colorado Department of Transportation stated that contractors do not receive protection from liability under the Colorado Governmental Immunity Act. SCDOT added that independent contractors are not agents of the department and therefore are not enti- tled to the protection of the South Carolina Tort Claims Act.250 Nevertheless, an example of alleged government- contractor immunity is Rodarte v. Kansas DOT,251 involving a collision with a guardrail in which the plaintiff alleged that the guardrail was constructed improperly. Reno Construction Company, Inc. (Reno), pursuant to a contract with what was then known as the State Highway Commission of Kansas, constructed the guardrails and completed the contract in 1976.252 Reno was not responsible for or involved in the design of the project or its 242 Id. at 483, 567 N.E.2d at 210. 243 Id. at 486, 567 N.E.2d at 211 (citations omitted). 244 Id. at 488–89, 567 N.E.2d at 213. See also Kromhout v. Commonwealth, 398 Mass. 687, 500 N.E.2d 789 (1986). 245 Anna H. Oshiro & Christi-Anne H. Kudo Chock, Liabilities of the Parties, in ConStrUCtIon defeCtS, Pub. Forum on the Construction Industry, ABA 134 (Roland Nikles, Stephen H. Reisman, Suzanne M. McSorley & Richard J. Tyler eds., 2012). 246 Paul Taylor, We’re All in This Together: Extending Sovereign Immunity to Encourage Private Parties to Reduce Public Risk, 75 U. CInn. l. rev. 1595 (2007). 247 Jon A. Kerr, Governmental Immunity for Public Con- tractors Engaged in Blasting, 23 waSH. & lee l. rev. 118, 122 (1966). 248 Wisconsin DOT. 249 Arizona DOT, Arkansas Hwy. & Transp. Dept., Colorado DOT, Georgia DOT, Indiana DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, Tennessee DOT, Texas DOT, Utah DOT, and Virginia DOT. The Kansas DOT reported that the issue has not been decided. Seven departments did not respond to the question. 250 See S.C. Code ann. § 15-78-30(c) (2016). 251 30 Kan. App. 2d 172, 39 P.3d 675 (2002). 252 Id. at 177, 39 P.3d at 679.

26 specifications.253 Rodarte alleged that Reno was neg- ligent because it failed to install the guardrails in accordance with the contract’s specifications and that faulty construction was partly responsible for her injuries.254 Ashland Inc. (Ashland), was the suc- cessor to Reno. Ashland’s motion for summary judg- ment argued that it was immune from suit under Kansas Statutes Annotated Section 68-419a(a) because the State accepted the work that its prede- cessor Reno performed.255 The statute provided in part: Whenever any public office…shall enter into a contract on behalf of the state or any agency or instrumentality thereof for the construction of any highway or turnpike, …the contractor shall not be liable for damages arising out of design defects involving the construction of such highway or turnpike result- ing in injury to persons or damage to property, occurring after completion of the contract, and acceptance thereof by such public officer, if the contractor has complied with all contrac- tual provisions and specifications imposed by state and federal agencies with respect to such highway or turnpike.256 The Kansas Court of Appeals affirmed the trial court’s grant of a summary judgment for Ashland. The court held: A contractor is immune from liability for damages arising out of design defects involving the construction of a highway or turnpike if: (1) the injury to persons or damage to property occurred after the construction was complete; (2) the contrac- tor’s work was accepted by the appropriate public official; and (3) the contractor complied with all contractual provi- sions and specifications imposed by state and federal agencies with respect to such highway or turnpike.257 When a contractor follows the specifications that the State provided, even if the State’s design had errors, the contractor may not be held liable for damages to a third party.258 The final proviso of Kansas Statutes Annotated Section 68-419a(a) should be noted, however: “Nothing contained in this section shall be construed as abrogating, limit- ing or otherwise affecting any cause of action accru- ing to the state or any agency or instrumentality thereof which was a party to such contract.”259 Another example of the assertion of government- contractor immunity is Cobb v. Waddington.260 In Cobb the plaintiffs sought to recover against the New Jersey Department of Transportation and Frassetto Construction Company (Frassetto) because of the defendants’ selection and placement of barricades on the highway. The plaintiffs’ central argument was that the contractor used the wrong type of barricades. The court ruled that both defendants had governmental immunity under New Jersey Statutes Annotated (N.J.S.A.) Section 59:2-3 (immunity for discretionary activities) and Section 59:4-6 (plan or design immu- nity).261 The court held that the selection of Type IIIA barricades and their configura- tion on the highway as a means of channelizing traffic reflected the exercise of judgment and discretion on the part of a public entity within the sense of N.J.S.A. 59:2-3(a), and formed part of a plan or design, contemplated by N.J.S.A. 59:4-6(a), of public property, as that term is defined in N.J.S.A. 59:4-1(c), …even to include “personal property.”262 The contractor was held to have immunity because Frassetto “selected the barricades and placed them pursuant to the design specifications of the contract.”263 The court stated that “[t]he statu- tory immunity would be meaningless if a public entity’s contractor which follows government speci- fications were held to the liability from which the public entity is shielded. Under these circumstances the contractor enjoys the same protection.”264 The Fifth Circuit recognized possible immunity for government contractors in Katrina Canal Breaches Litig. Steering Committee v. Washington Group International, Inc.265 At issue was whether Washington Group International, Inc. (WGI), had government-contractor immunity, referred to in the case as “GCI,” for engineering, construction, and management services that it provided under a contract with the United States Army Corps of Engineers (Corps). The court described the contract as an umbrella contract that set forth general requirements for WGI’s anticipated work.266 For each regional project, however, the Corps approved a specific statement of work (SOW), one of which was for the Inner Harbor Navigation Canal Lock Replacement Project in New Orleans. One aspect of the New Orleans project was the cleanup of the East Bank Industrial Area. In August 2005, Hurricane Katrina made landfall near New Orleans, causing breaches in the levees where WGI had conducted extensive work. The plaintiffs claimed that “the 261 Id. at 15, 380 A.2d at 1147. 262 Id. at 16, 380 A.2d at 1148. 263 Id. at 18, 380 A.2d at 1149. 264 Id. See also Yearsley v. W.A. Ross Constr. Co.., 309 U.S. 18, 21, 60 S. Ct. 413, 84 L. Ed. 554 (1940); Myers v. United States, 323 F.2d 580, 583 (9th Cir. 1963); and Dolphin Gardens, Inc. v. United States, 243 F. Supp. 824, 827 (D. Conn. 1965). 265 620 F.3d 455 (5th Cir. 2010). 266 Id. at 458–59. 253 Id. 254 Id. 255 Id. at 179, 39 P.3d at 680. 256 Id. at 180, 39 P.3d at 680–81. 257 Id., 39 P.3d at 681. 258 Id. at 182, 39 P.3d at 682. 259 Id. at 180, 39 P.3d at 681. 260 154 N.J. Super. 11, 380 A.2d 1145 (N.J. App. 1977).

27 failure of those levees was a result of the negligent and improper backfilling and compaction of the excavated locations by WGI in violation of a state- law duty of care.”267 WGI claimed federal GCI based on Boyle, supra. The court explained that [t]he GCI defense preempts state law to immunize govern- ment contractors from liability in spite of the absence of legislation specifically immunizing them. The rationale for GCI flows from two basic principles: “[S]tate tort law is pre- empted by federal common law in areas of unique federal interests” and “the procurement of equipment by the United States is such an area.”268 The court further explained what is meant by the term “reasonably precise specifications,” one of the three Boyle prerequisites for GCI. Specifications are reasonably precise “as long as the specifi- cations address, in reasonable detail, the product design feature, alleged to be defective.” …“The requirement that the specifications be precise means that the discretion over significant details and all critical design choices will be exercised by the government.” …Reasonably precise specifi- cations for one aspect of a large project do not create an umbrella of protection for an entire project.269 The court held that the specifications for WGI’s use of on-site backfill material were not reasonably precise. For example, the specifications failed “to dictate any standards for compaction.”270 Because WGI had “significant discretion” regarding the use of backfill, WGI could not claim government- contractor immunity. B. Cases Requiring Proof that a Design Consultant or Contractor Was the Government’s Agent Wisconsin is a state in which there is authority holding that in some circumstances a government contractor may claim immunity when the claim is one for which the government agency would have immunity. In responding to the survey, the Wisconsin Department of Transportation (WisDOT) stated that a contractor may benefit from the depart- ment’s sovereign immunity, citing Wisconsin Statutes Section 893.80, Estate of Lyons v. CNA Insurance Co.,271 and Showers Appraisal, LLC v. Musson Bros.,272 all of which are discussed in the following section. First, however, in Wisconsin it must be shown that the contractor was the government’s agent. In a 1996 Wisconsin case, Estate of Lyons v. CNA Insurance Co.,273 it was alleged that Strand Associates, Inc. (Strand), a professional engineering firm, negli- gently designed a highway bridge in the town of East Troy. The estate argued that the “vertical curve” of the bridge was too high and limited “the distance at which drivers passing over the bridge toward the ES intersection can first see the stop sign at the ES intersection.”274 Strand argued that it was entitled to immunity for the design because WisDOT had directed Strand to implement the allegedly faulty design feature. The estate’s expert’s opinion was that the shorter and higher design that Strand used failed to meet AASHTO safety stan- dards. Strand, as well as WisDOT as an amicus, argued that “the decision to utilize a vertical curve greater than those recommended under AASHTO standards was actually made by a DOT designer.”275 The Wisconsin Court of Appeals stated that although no Wisconsin case had “extended governmental immunity to private parties who act under direc- tives from state agencies,” the court was adopting the reasoning of other courts that had done so.276 Wisconsin’s municipal immunity statute did not apply because state officers or employees had directed Strand to use the short and high design. The Wisconsin Supreme Court previously had held, however, that immunity at common law that applies to state officers or employees, referring to Wisconsin Statutes Section 893.80(4), “is essentially equal to the statutory immunity granted to municipal offi- cers and employees [that]…plainly prohibits suits against a governmental body or any of its ‘officers, officials, agents or employees’ because of acts done in the exercise of legislative or quasi-legislative functions.”277 The appeals court held that Strand had immunity. Relying on Boyle v. United Technologies Corp.,278 decided by the U.S. Supreme Court, the Strand court adopted a type of government-contractor immunity applicable to parties who contract with government authorities and who are directed by the authorities to perform certain tasks under the contract.279 The court held that an independent professional contractor who follows an official directive is an “agent” and entitled to common-law immunity when 267 Id. at 459. 268 Id. (citation omitted) (footnote omitted). 269 Id. at 461 (citations omitted). 270 Id. at 464. 271 207 Wis. 2d 446, 558 N.W.2d 658 (1996). 272 350 Wis. 2d 509, 835 N.W.2d 226 (2013 filed). 273 207 Wis. 2d at 446, 558 N.W.2d at 658 (1996). 274 Id. at 450, 558 N.W.2d at 660. 275 Id. at 453, 558 N.W.2d at 661. 276 Id. at 449, 558 N.W.2d at 659. 277 Id. at 453, 558 N.W.2d at 661 (citing C.L. v. Olson, 143 Wis. 2d 701, 716 N 9, 422 N.W.2d 614, 619 (1988)). 278 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988). 279 Lyons, 207 Wis. 2d at 457, 558 N.W.2d at 663.

28 (1) the governmental authority approved reasonably pre- cise specifications; (2) the contractor’s actions conformed to those specifica- tions; and (3) the contractor warned the supervising governmental authority about the possible dangers associated with those specifications that were known to the contractor but not to the governmental officials.280 As for the third element listed, the plaintiff argued that Strand had a duty as a professional engineer to disagree with WisDOT and insist that the bridge design meet necessary safety require- ments.281 The court held, however, that the appropri- ate legal standard “only requires that a professional engineer warn the supervising state officials about any possible dangers,” and that Strand had warned repeatedly that the 70-ft design curve did not com- ply with the current standard.282 In contrast to Lyons Estate is Showers Appraisals, LLC v. Musson Bros.,283 in which the Supreme Court of Wisconsin ruled that a government contractor, Musson Brothers, Inc. (Musson), was not entitled to governmental immunity under Wisconsin Statutes Section 893.80(4). The claim arose because of flood damage to property owned by Showers Appraisals, LLC (Showers) in Oshkosh, Wisconsin, where Musson was conducting sewer removal and installation for WisDOT. The case is instructive in terms of what a contractor has to allege and prove in Wisconsin when asserting governmental immunity vicariously. WisDOT and the City had entered into a state municipal agreement for a sewer improvement proj- ect. The agreement provided that WisDOT, besides providing substantial funding for the project, was to remain involved in the project, “including oversee- ing the bidding process and being onsite during con- struction.”284 Potential bidders were informed that in performing the work, that they would be “‘respon- sible for any damages to property or injury to per- sons occurring through their own negligence or that of their employees or agents….’”285 Pursuant to the contract that WisDOT awarded to Musson, the latter could make certain decisions when performing the work by reason of a “means and methods” provision in the contract.286 One of Musson’s decisions had caused City officials to become concerned that the City’s ability to manage stormwater would be compromised. Later, after storms caused flooding of Showers’ property, Showers brought an action against the City and Musson for improper drainage, design, maintenance, excava- tion, and construction procedures and for failure to take corrective measures.287 The Wisconsin Supreme Court, in reversing the decisions of the trial court and the court of appeals, held that Musson was not entitled to governmental immunity under Section 893.80(4). The statute pro- vides that “‘[n]o suit may be brought against any [governmental entity]…or against its officers, officials, agents or employees for acts done in the exercise of legislative, quasi-legislative, judicial or quasi- judicial functions.’”288 In Showers, the court adopted the U.S. Supreme Court’s approach in Boyle,289 an action against a gov- ernment contractor who allegedly sold a helicopter that had a design defect in the copilot’s escape system. A pilot who survived a crash into water nevertheless drowned because the design defect had prevented his escape from the helicopter.290 The Court in Boyle established a test to determine whether a government contractor should be immune from liability for design defects in military equip- ment. As discussed in Lyons Estate, supra, the three- part test focused on whether the government had approved “reasonably precise specifications,” whether the equipment conformed to the specifica- tions, and whether the supplier had warned the government about the dangers in the use of the equipment, dangers that were known to the supplier but that were not known to the government.291 Under Showers, however, as discussed in the follow- ing Section C, “a discretionary act of a governmental officer is a necessary component to potential immu- nity for [a] governmental contractor.”292 The Showers court also relied on Estate of Lyons, supra, in which the governmental entity chose the design that was the proximate cause of the accident. The court in Showers held that under Section 893.80(4), when a government contractor performs its contractual tasks under reasonably precise speci- fications according to a “governmental entity’s quasi-legislative design decision,” the contractor is 280 Id. at 457–58, 558 N.W.2d at 663. 281 Id. at 459, 558 N.W.2d at 664. 282 Id. at 460, 558 N.W.2d at 664. 283 2013 WI 79, 350 Wis. 2d 509, 835 N.W.2d 226 (2013). 284 Id. at P7, 350 Wis. 2d at 517, 835 N.W.2d at 230. 285 Id. (citation omitted). 286 Id. at P12, 350 Wis. 2d at 518, 835 N.W.2d at 231. 287 Id. at P17, 350 Wis. 2d at 521, 835 N.W.2d at 233. 288 Id. at P22, 350 Wis. 2d at 524, 835 N.W.2d at 234 (citation omitted) (emphasis supplied). 289 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988). 290 Showers Appraisals, LLC, 2013 WI 79, at P28, 350 Wis. 2d at 526, 835 N.W.2d at 235. 291 Id. at P29, 350 Wis. 2d at 526, 835 N.W.2d at 235 (citation omitted) (internal quotation marks omitted). 292 Id. at P30, 350 Wis. 2d at 527–28, 835 N.W.2d at 236.

29 functioning as the agent of the governmental entity when implementing the latter’s design decision.293 The court elaborated on what a government con- tractor must show to establish that it is an agent of the government with which it contracted: The first and second requirements of the Lyons test, i.e., whether the governmental entity approved reasonably pre- cise specifications that the governmental contractor adhered to when engaging in the conduct that caused the injury, limit when a governmental contractor is a statutory agent under Wis. Stat. § 893.80(4). Stated otherwise, the governmental entity must have had the right to control the tasks performed by the contractor with “reasonably precise specifications” and the contractor must have followed those specifications. When these facts are proved, the contractor is a § 893.80(4) agent of the governmental entity.294 The “means and methods” provision in Musson’s contract was evidence that “Musson was not subject to ‘reasonably precise specifications’ as is necessary to invoke contractor immunity as an agent of a gov- ernmental entity.”295 Instead, the means and meth- ods provision made Musson “solely responsible for the means, methods, techniques, sequences, and pro- cedures of construction.”296 Stated differently, “a con- tractor may not possess such control over the alleged injury-causing action and still be considered an agent for purposes of governmental contractor immunity under Wis. Stat. § 893.80(4).”297 C. Immunity When a Design Consultant or Contractor Implements a Discretionary Decision Made by the Government The Showers court stated that when analyzing and applying the Wisconsin statute, the court often had [u]sed the term “discretionary” as a shorthand to refer to decisions of a governmental entity that are legislative, quasi-legislative, judicial or quasi-judicial. …Legislative and quasi-legislative functions generally refer to those pol- icy choices made in an official capacity, e.g., when a govern- mental entity chooses one project design over another. … Quasi-judicial functions generally refer to those acts that involve the exercise of discretion in coming to a judgment; the availability of a public hearing on the judgment before a specialized board; and the imposition by a board of an appropriate final decision....298 As held in Showers, a contractor may secure gov- ernmental immunity for a plan or design defect when the claim arises out of the contractor’s imple- mentation of a government decision for which the government “itself, [is] entitled to immunity under § 893.80(4) because it was made through the exer- cise of a legislative, quasi-legislative, judicial or quasi-judicial function of the governmental entity.”299 Showers’s claim, however, was not that Musson neg- ligently implemented an immune, governmental, discretionary decision but rather that Musson was liable for its “improper drainage...maintenance, excavation, construction procedures, and failure to take corrective measures.”300 In summary, when a government contractor claims immunity under Wisconsin Statutes Section 893.80(4), the contractor must show both that it was an agent of the government within the meaning of Section 893.80(4) as construed by the Lyons opinion and, as held in Showers, that the allegedly injurious conduct was caused by the contractor’s implementa- tion of a decision for which a governmental entity itself has immunity under Section 893.80(4).301 D. Liability of a Design Consultant or Contractor to Third Parties for a Contractor’s Own Negligence The Supreme Court of Texas has held that an independent contractor may not claim governmen- tal immunity when sued by a third party for the contractor’s own negligent design that was the prox- imate cause of an accident. In Brown & Gay Eng’g, Inc. v. Olivares,302 a private engineering firm, Brown & Gay Engineering, Inc. (Brown & Gay), entered into an Engineering Services Agreement with the Fort Bend County Toll Road Authority (Authority) to design road signs and traffic layouts subject to the Authority’s approval. Olivares’ mother, individually and as representative of his estate, and his father alleged that Brown & Gay failed “to design and install proper signs, warning flashers, and other traffic-control devices around the exit ramp” where an intoxicated driver entered the Tollway.303 They 298 Id. at P26, 350 Wis. 2d at 525–26, 835 N.W.2d at 235 (citations omitted). 299 Id. at P36, 350 Wis. 2d at 531, 835 N.W.2d at 237. 300 Id. at P52, 350 Wis. 2d at 541, 835 N.W.2d at 242 (internal quotation marks omitted). 301 Id. at P36, 350 Wis. 2d at 531, 835 N.W.2d at 237. 302 461 S.W.3d 117, 130, 131 (Tex. 2015). 303 Id. at 120. 293 Id. at P31, 350 Wis. 2d at 528, 835 N.W.2d at 236 (citation omitted). 294 Id. at P40, 350 Wis. 2d at 533, 835 N.W.2d at 239 (footnote omitted) (citation omitted) (emphasis supplied). 295 Id. at P48, 350 Wis. 2d at 538, 835 N.W.2d at 241 (footnote omitted). 296 Id. at P49, 350 Wis. 2d at 539, 835 N.W.2d at 241 (citation omitted) (internal quotation marks omitted) (emphasis in original). The court explained that “Musson was not only empowered to take actions involving how the construction process was to proceed, Musson also had the responsibility for the actions it took, including incurring liability if its actions caused injury.” Id. at P49, 350 Wis. 2d at 539, 835 N.W.2d at 241 (citation omitted). 297 Id. at P51, 350 Wis. 2d at 540, 835 N.W.2d at 242.

30 not decide “whether some degree of control by the government would extend its immunity protection to a private party,” the court held that Brown & Gay “was independently negligent in designing the signs and traffic layouts for the Tollway.”312 In this case Brown & Gay could not claim governmental immu- nity because “the Authority did not tell Brown & Gay how to do the work.”313 In a Missouri case that involved the design of a bridge that collapsed, In re: Individual 35W Bridge Litigation,314 discussed in Section VII.D, an appellate court held that the contractor’s successor in interest was not entitled to claim sovereign immunity as an agent of the state government.315 In summary, there is federal and some state judi- cial authority that a government contractor may claim immunity for a defective plan or design when “the contractor acted as a ‘servant’ for the purposes of the challenged conduct”316 and when it was the gov- ernment that “negligently selected a design that a contractor implemented for a government project.”317 Next, the digest discusses claims by transporta- tion agencies against design consultants and con- tractors for their plan or design errors and omis- sions, as well as whether FHWA, pursuant to 23 C.F.R Part 172, will participate in the recovery by transportation agencies of their costs and damages caused by a contractor’s design errors or omissions on a federal-aid project. VII. CLAIMS BY TRANSPORTATION DEPARTMENTS AGAINST CONTRACTORS FOR PLAN OR DESIGN ERRORS AND OMISSIONS A. Applicability of 23 C.F.R. Part 172 to Claims Against Design Consultants and Contractors for Plan or Design Errors and Omissions on Federal-Aid Projects There may be design errors and omissions that are discovered before or after a DOT’s acceptance of alleged that the plan or design errors were the prox- imate cause of Olivares’ death.304 Brown & Gay argued that it was entitled to gov- ernmental immunity in the same way as if the gov- ernment had performed the work.305 An appellate court held that Brown & Gay did not have “govern- mental immunity because it was an independent contractor, not an ‘employee’ of the Authority as that term is defined in the Texas Tort Claims Act.”306 On review, the Texas Supreme Court stated that it had “never directly addressed the extension of immu- nity to private government contractors….”307 The court relied, however, on an earlier precedent in which the court had held that, although “sovereign immunity protects the activities of government entities, no sover- eign is entitled to extend that protection ad infinitum through nothing more than private contracts.”308 The court discussed other precedents in which an indepen- dent contractor’s action had not caused the injury but rather certain “action taken by the government through the contractor” had caused the injury.309 The court held that “Brown & Gay was an inde- pendent contractor with discretion to design the Tollway’s signage and road layouts.”310 The court cited a long line of Texas cases holding that govern- ment contractors are liable for their own negligence in highway construction.311 Although the court did 304 Id. 305 The appeals court held that the Authority “was immune from claims based on its discretionary acts related to the placement and sufficiency of signs and other traffic- control and traffic-safety devices,” but the court remanded the case to allow the Olivares to amend their pleadings. Id. Because the Olivares thereafter nonsuited the Authority, the immunity of the Authority was no longer at issue. 306 Id. 307 Id. at 124. 308 Id. (citation omitted). 309 Id. at 125 (footnote omitted). 310 Id. at 126 (footnote omitted). 311 Id. at 129 (citing Bay, Inc. v. Ramos, 139 S.W.3d 322, 328 (Tex. Civ. App. 2004) (holding that a government con- tractor hired for highway construction work was not enti- tled to share in the state’s sovereign immunity when the contractor exercised considerable discretion in maintain- ing the construction site where the plaintiff ’s injury occurred); Overstreet v. McClelland, 13 S.W.2d 990, 992 (Tex. Civ. App. 1928) (holding that a government contrac- tor hired for highway construction work had a duty to exercise ordinary care to protect travelers using the high- way despite the fact that the government itself could not be held liable for the negligence of its officers or agents); cf. N.M. Hubbard v. Gehring, 360 S.W.2d 787, 790, 793–94 (Tex. 1962) (holding, in the context of rejecting the “accepted work” doctrine, that a county contractor hired to relocate fencing alongside widened roads was not insu- lated from tort liability for injuries that occurred after the county accepted the work, but that were caused by the condition in which the contractor left the premises)). 312 Brown & Gay, 461 S.W. 3d at 126 (footnote omitted). A concurring opinion argued that if an independent contrac- tor acts for the government, and in effect becomes the gov- ernment for limited purposes, the independent contractor may be entitled to sovereign immunity. Id. at 129 (Hecht, J., concurring opinion). Although the extent of the govern- ment’s control of an independent contractor “is relevant not but conclusive…the ultimate issue is whether the indepen- dent contractor is actually authorized by the government to act in its place.” Id. at 130 (Hecht, J., concurring opinion). 313 Id. at 131 (Hecht, J., concurring opinion) (emphasis in original). 314 787 N.W.2d 643 (Minn. App. 2010). 315 Id. at 654. 316 Showers Appraisals, LLC, 2013 WI 79, at P40, 250 Wis. 2d at 533, 835 N.W.2d at 239. 317 Id. at P53, 250 Wis. 2d at 541–42, 835 N.W.2d at 243.

31 of engineering and design related services under 23 U.S.C. 112” and the requirements that “apply to fed- erally funded contracts for engineering and design related services for projects subject to the provisions of 23 U.S.C. 112(a)….”324 Under the rules a consul- tant is an individual or firm providing engineering- and design-related services as a party to a contract with a recipient or subrecipient of federal assis- tance.325 A contracting agency is a state transporta- tion agency (STA), or a procuring agency of the state acting in conjunction with and at the direction of the STA, “other recipients, and all subrecipients that are responsible for the procurement, management, and administration of engineering and design related services.”326 Engineering- and design-related services include (1) Program management, construction management, feasi- bility studies, preliminary engineering, design engineering, surveying, mapping, or architectural related services with respect to a highway construction project subject to 23 U.S.C. 112(a) as defined in 23 U.S.C. 112(b)(2)(A); and (2) Professional services of an architectural or engineering nature, as defined by State law, which are required to or may logically or justifiably be performed or approved by a person licensed, registered, or certified to provide the ser- vices with respect to a highway construction project subject to 23 U.S.C. 112(a) and as defined in 40 U.S.C. 1102(2).327 One of the responsibilities of the STA is to pre- pare and maintain “written policies and procedures for the procurement, management, and administra- tion of engineering and design related consultant services” in accordance with §§ 172.5(c)(1)-(18).328 In particular, STAs are responsible for (16) Determining the extent to which the consultant, which is responsible for the professional quality, technical accu- racy, and coordination of services, may be reasonably liable for costs resulting from errors and omissions in the work furnished under its contract; (17) Assessing administrative, contractual, or legal reme- dies in instances where consultants violate or breach con- tract terms and conditions, and providing for such sanctions and penalties as may be appropriate; and (18) Resolving disputes in the procurement, management, and administration of engineering and design related con- sultant services.329 STA policies and procedures must be in place to determine the extent to which a design consultant the work that must be corrected. Five transporta- tion departments that responded to the digest sur- vey stated that within the past 5 years, their depart- ment had brought a judicial or administrative proceeding against a design consultant or contractor for reimbursement for costs or damages caused by the design consultant’s or contractor’s defective plan or design.318 Fifteen departments, however, reported that they had not brought such claims.319 Although PennDOT reported that it had sought reimbursement, 19 transportation departments reported that within the past five 5 years, their department has not sought reimbursement from or been reimbursed by FHWA for the cost of a design consultant’s or contractor’s defective plan or design pursuant to 23 C.F.R. Part 172.320 SCDOT explained that in connection with its Georgetown Drainage Project, discussed in Appendix E in reference to Questions 6 and 7(b) of the survey, the department has sought reimbursement from FHWA for the cost of the design consultant’s or contractor’s defective plan or design. SCDOT stated, however, that because “the litigation is ongoing it has not yet been deter- mined whether the plan or design was defective.” Under 23 C.F.R. Part 172, there is a “federal role in overseeing engineering and design-related ser- vice contracts.”321 For federally funded projects, there may be federal-aid participation for the cost of a design error or omission. State DOTs must have written procedures, however, for cost recovery caused by design and omissions that must be approved by FHWA.322 Prior to June 22, 2015, the rule requiring FHWA approval of written policies and procedures was in 23 C.F.R. Section 172.9(a); however, the regulation now appears in § 172.5(c).323 In brief, Part 172 sets forth the “requirements for the procurement, management, and administration 318 Indiana DOT, Louisiana DOTD, Oregon DOT, South Carolina DOT, and Utah DOT. 319 Alabama DOT, Arkansas Hwy. & Transp. Dep’t, Colorado DOT, Georgia DOT, Kansas DOT, Kentucky Transp. Cab., Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Virginia DOT, and Wisconsin DOT. Seven agencies did not respond to the question. 320 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dept., Colorado DOT, Georgia DOT, Indiana DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Tennessee DOT, Texas DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. 321 Design Errors and Omissions Report, supra note 1, at 8. 322 Id. at 9. See 23 C.F.R. § 172.5(c). 323 Procurement, Management, and Administration of Engineering and Design Related Services, 80 Fed. Reg. 29,908, 29,911 (May 22, 2015). 324 23 C.F.R. § 172.1. 325 23 C.F.R. § 172.3(3). 326 Id. 327 23 C.F.R. §§ 772.3(3)(1) and (2). 328 23 C.F.R. § 172.5(a)(1). 329 23 C.F.R. §§ 172.5(c)(16)–(18).

32 their policies and procedures, which are included in Appendix F of the digest. Under the Florida Standard Professional Services Agreement terms, a consultant agrees to “use that degree of care and skill ordinarily exercised by other similar professionals in the field under similar conditions in similar localities. The Consultant will use due care in performing its services and will have due regard for acceptable engineering standards and principles.”336 The consultant also agrees that [a]ll services will be performed by the Consultant to the sat- isfaction of the Director who will decide all questions, diffi- culties and disputes of any nature whatsoever that may arise under or by reason of the Agreement, the prosecution and fulfillment of the services hereunder and the character, quality, amount and value thereof; and the decision upon all claims, questions and disputes will be final and binding upon the parties hereto.337 The Florida terms provide that the department has the right “[e]xcept for issues arising from con- tract indemnification provisions…to retain out of any payment due the Consultant under this Agree- ment an amount sufficient to satisfy any amount due and owing to the Department by the Consultant on any other Agreement between the Consultant and the Department.”338 The North Dakota Department of Transporta- tion (NDDOT) has issued Errors and Omissions Procedures, Procedures for Pursuing Reimbursement from Design/Construction Engineering Consultants Resulting from Design/Construction Engineering Errors and/or Omissions.339 The procedures state that NDDOT’s goal is “to develop engineering docu- ments that are complete, accurate, and…of the highest standards. However, despite this conscious effort, circumstances can and do arise concerning the quality of design/construction engineering consultant services.”340 or contractor is responsible for costs caused by a faulty design furnished pursuant to a contract with the design consultant.330 Moreover, the Federal Acquisition Regulation (FAR) states that architects and engineers are liable for damages caused by rea- son of their “negligent performance.”331 Another source, although it predates the regula- tions that were amended in 2015, explains that FHWA policy on errors and omissions by consultant design and construction engineering professionals has evolved through a series of internal memoranda and technical advi- sories going back to 1956…. Many of these documents are in the form of communications among FHWA headquarters offices, FHWA regional or division offices, and state agen- cies, seeking to clarify treatments of different types of errors and to resolve apparent inconsistencies. What has evolved is a general policy on federal participation in the additional costs of design and construction due to errors and omissions by consultants that is summarized below….332 The same source advises that unless the agency– consultant agreement provides to the contrary, “federal-aid participation may be justified for the type of consultant errors that might occasionally occur despite the exercise of normal diligence” when “[t]he error is not due to gross negligence or care- lessness[]” and when “[c]arelessness, negligence, incompetence, or understaffing by the state agency are not contributing factors.”333 B. Transportation Department Procedures for Recovery for Plan or Design Errors and Omissions It appears that many transportation depart- ments have adopted policies and procedures for the recovery of costs and damages caused by design con- sultants’ or contractors’ plan or design errors. Nine departments reported that with respect to 23 C.F.R. Part 172, their departments have adopted proce- dures concerning claims against design consultants and/or contractors for a defective plan or design,334 but nine departments reported that they had not done so.335 Several departments provided a copy of 330 Design Errors and Omissions Report, supra note 1, at 9; see 23 C.F.R. § 172.5(c)(16) (2015). 331 Id. (quoting Federal Acquisition Regulation (FAR) clause 52.236-23(b)). See also Guide for Consultant Con- tracting, American Association of State Highway and Transportation Officials (AASHTO) (2008). 332 Id. at 10 (emphasis supplied 333 Id. 334 Georgia DOT, Indiana DOT, Kansas DOT, Louisiana DOTD, Pennsylvania DOT, South Carolina DOT, Texas DOT, Utah DOT, and Wisconsin DOT. 335 Alabama DOT, Arizona DOT, Kentucky Transp. Cab., Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Tennessee DOT, and Virginia DOT. Eight departments did not respond to the question. 336 Florida Standard Professional Services Agreement Terms, at A1, ¶ 1(B) (July 2013), hereinafter referred to as “Florida Standard Professional Services Agreement Terms,” http://www.dot.state.fl.us/procurement/pubs/July_2013_ terms.pdf (last accessed Sept. 2, 2016). 337 Id. at A1, ¶ 1(D). 338 Id. at A3, ¶ 3(I). 339 North Dakota DOT, Consultant Administration Sec- tion, Errors and Omissions Procedures, Procedures for Pursuing Reimbursement from Design/Construction Engi- neering Consultants Resulting from Design/Construction Engineering Errors and/or Omissions (Aug. 2007), herein- after referred to as “N.D. DOT Errors and Omissions Pro- cedures,” http://www.dot.nd.gov/manuals/environmental/ final-eo-policy-8-7-07.pdf (last accessed Sept. 2, 2016). 340 Id.

33 care,348 whereas 14 reported that they had not.349 Although 2 departments reported that within the past 5 years they had made a claim against a con- tractor for the contractor’s failure to comply with design standards,350 15 advised that they had not done so.351 Although the case did not involve a transportation department, in Gee & Jenson Engineers, Architects, and Planners v. United States,352 the U.S. Court of Claims held that the contractor was liable for failing to adhere to specifications that the parties’ contract incorporated by reference.353 The plaintiff Gee & Jenson Engineers, Architects, and Planners (Gee & Jenson) entered into a contract with the U.S. Navy to design and provide engineering services for build- ings, some of which were to be constructed in Charleston, South Carolina.354 Although the build- ings were constructed according to Gee & Jenson’s design, the Navy later discovered water leaks in one building. The government claimed that Gee & Jenson committed a breach of contract because it failed to include flashing when designing the build- ing.355 In April 2005 the plaintiff filed its action in which it “alleg[ed] that the Navy ‘wrongfully, improp- erly, and without cause made a claim for damages against Gee & Jenson.’”356 The court rejected Gee & Jenson’s argument that the local building code allowed the firm to exer- cise its discretion regarding whether to include flashing “because the building code sets forth only the minimum requirements acceptable within the industry….”357 The court held that because the con- tract incorporated certain Navy “guide specifica- tions,” the contract “unambiguously” required Gee & Jenson to include flashing.358 Furthermore, the court NDDOT advises that it “may seek to recover costs that are a result of a consultant performing services that do not meet the established standard of care.”341 Therefore, “NDDOT managers will investigate any alleged error and/or omission. If a design/construc- tion engineering error and/or omission occurred, NDDOT will make every reasonable effort to recover the associated costs from the design/construction engineering consultant.”342 The department defines errors and omissions as “‘[d]eficiencies from the standard of care on the part of a design/construction engineering consultant in the performance of professional services under con- tract with NDDOT.’”343 Consultants performing ser- vices for NDDOT have a “‘duty to exercise the degree of learning and skill ordinarily possessed by a repu- table design professional practicing in the same or similar locality and under similar circumstances.’”344 NDDOT’s procedures describe the action that the department will take when the department discov- ers an error or omission (1) prior to advertisement; (2) after advertisement, prior to bid; (3) after bid, prior to construction contract award; and (4) after the construction contract is awarded.345 When a dis- pute between the department and a consultant is not resolved, a consultant may request a review by an Errors and Omissions Review Board.346 C. Claims by Transportation Departments Against Contractors for Plan or Design Errors There are instances, of course, when government agencies have sued contractors for plan or design errors. As one article observes, [a]s a general rule, breach of contract may be asserted only against parties with whom the plaintiff has a contract. The same is typically true for breach of implied warranties, such as the implied warranty of workmanlike construction.... Generally, negligence can be asserted against parties with whom the plaintiff has a contract as well against parties with whom the plaintiff does not have a contract.347 In responding to the survey, 4 transportation departments stated that within the past 5 years they had made claims against a contractor for a defective plan or design because of the contractor’s failure to comply with the applicable standard of 341 Id. 342 Id. 343 Id. (no citation for internal quotation). 344 Id. at 1–2 (no citation for internal quotation) (empha- sis in original). 345 Id. 346 Id. at 4, 5. 347 John W. Ralls, Clark T. Theil & John Foust, Liability Theory and Defenses for Construction Defect Claim, in ConStrUCtIon defeCt (Roland Nikles, et al., eds. 2012). 348 Indiana DOT, Louisiana DOTD, Montana DOT, and South Carolina DOT. 349 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Kansas DOT, Kentucky Transp. Cab., Maine DOT, Missouri DOT, Oregon DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. Eight departments did not respond to the question. 350 Indiana DOT and South Carolina DOT. 351 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Oregon DOTD, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, and Virginia DOT. Nine departments did not respond to the question. 352 2008 U.S. Claims LEXIS 504, at *1 (Ct. Cl. 2008). 353 Id. 354 Id. at *1–2. 355 Id. at *2. 356 Id. at *26 (citation omitted). 357 Id. at *53. 358 Id. at *23, 40.

34 The court held that Baltimore could not sue for unjust enrichment when there is “an express con- tract between the parties.”367 Even when there is an express contract, however, there are two exceptions that allow a claim for unjust enrichment. One excep- tion is when “the plaintiff adduces evidence of fraud or bad faith on the part of the defendant”; the other exception is when the contract between the parties does not govern the entire subject matter of the case.368 Neither exception applied. First, Baltimore had not alleged fraud in the formation of the contract. Second, although some of Baltimore’s allegations related to subject matter outside of the contract, there was no “obvious connection between those allegations and the unjust enrich- ment claim.”369 The court also rejected Baltimore’s claim for neg- ligent representation by Unisys. The court held that “[a] plaintiff seeking to recover for economic loss due to a defendant’s alleged negligent misrepresenta- tions ‘must prove that the defendant owed him or her a duty of care by demonstrating an intimate nexus between them.’”370 Although an “intimate nexus” can be established through contractual privity or its equivalent, a contractual obligation alone does not create a duty in tort. …Indeed, the Fourth Circuit “has made clear that [courts] will not countenance a negligent misrepresentation claim premised only upon a breach of a contractual obligation when the contract does not provide for the bringing of such a claim and the parties are equally sophisticated.” …And, perhaps most germane to this case, “[we] and other courts have held that a party which has entered into a contract for the sale of goods may not recover in tort for purely economic losses arising out of the quality or performance of the goods.”371 Baltimore, however, stated a “viable claim of inten- tional misrepresentation.”372 Baltimore’s complaint was sufficiently specific in alleging that Unisys com- mitted a misrepresentation when it stated that the company “had resolved 217 previously identified issues with the system and that this was shown in test scripts, which it offered to Plaintiff as evidence.”373 Because of the viable claim for misrep- resentation, the court allowed Baltimore’s claim for punitive damages.374 held that “the government’s approval of the overall design does not waive [the] plaintiff ’s liability under the contract.”359 In Ross v. State,360 however, the fact that the State had exercised its discretion was relevant to a claim against a contractor for a design error or omission. The court held that the contractor reasonably relied on the Indiana Department of Transportation’s (INDOT) engineers to calculate and post the correct speed limit for a curve that had an “adverse superelevation.”361 One of the key factors that makes Cavett’s reliance upon INDOT’s engineers in setting the speed limit [reasonable] is the fact that the posting of speed limits by a governmental entity is a discretionary function that falls within the immunity given by the Torts Claim Act. …We conclude that even if the designated evidence indicated that Cavett should have been aware that the posted speed limit was too high for the curve, it would be reasonable for it to rely upon INDOT’s protected decision not to change the speed limit.362 Mayor v. Unisys Corp.,363 decided by a federal dis- trict court in Maryland, illustrates that some causes of action against a contractor are not allowable because of the contract between the parties. The case arose out of a 2002 contract in which the City of Baltimore agreed to pay Unisys Corporation (Unisys) $7 million for the development and instal- lation of a software package that was to be ready by November 2003.364 Seven years after the “Go-live” date, and after Baltimore had paid $8 million to Unisys, the City declared Unisys to be in default of the contract.365 Baltimore’s action against Unisys for compensatory and punitive damages alleged several causes of action for breach of contract and breach of express warranties, as well as for unjust enrich- ment, negligent misrepresentation, and intentional misrepresentation.366 359 Id. at 55 (citing FAR § 52.236-23). See also City of Placquemine v. N. Amer. Constructors, 832 So. 2d 447 (La. App. 2002), in which the City hired a construction company to design improvements to the City’s sewage treatment plant, but the City was unable to use the plant because of design defects that caused cracks in the walls. Id. at 450, 460. The court held that the design company and construc- tion company were equally liable and ordered the construc- tion company to pay its portion of the damage plus interest. Id. at 462, 465. 360 704 N.E.2d 141 (Ind. App. 1998). 361 Id. at 143, 145. 362 Id. at 147–48 (citations omitted) (emphasis sup- plied). 363 2012 U.S. Dist. LEXIS 115730, at *1 (D. Md. 2012). 364 Id. at *2. 365 Id. at *2–3. 366 Id. at *1. 367 Id. at *4. 368 Id. at *5 (citation omitted). 369 Id. at *6. 370 Id. at *8 (citations omitted). 371 Id. at *8–9 (citations omitted). 372 Id. at *13. 373 Id. at *16. The court dismissed other claims of alleged misrepresentations. Id. 374 Id. at *21.

35 was entitled to the benefit of the State’s sovereign immunity.381 The court denied Jacobs’ motion, as Sverdrup’s successor-in-interest, to dismiss the DOT’s cross-claims for common-law contribution and indemnity and contractual contribution and indem- nity, as well as for reimbursement pursuant to the State’s compensation statutes, because of Sverdrup’s negligent design of the bridge that collapsed.382 E. Compliance with the Standard of Care and Design Standards A firm or individual skilled in design work is held to a higher standard of care. In Hubbard v. DOT,383 the court stated that “a contractor who is an expert in the design of the type of work being done may not ignore defects in the design”; thus, the contractors in that case “could be held liable only if they performed the work negligently or if they held themselves out as experts in design.”384 As noted, four transportation departments that responded to the survey reported that within the past 5 years, they had made a claim against a contractor for a defective plan or design because of the contractor’s failure to comply with the applicable standard of care.385 In addition to judicial precedent or a statute set- ting forth the applicable standard of care, it appears that many transportation departments have writ- ten terms and conditions that specify the standard of care required of a design consultant or contractor. In Florida, a consultant must “use that degree of care and skill ordinarily exercised by other similar professionals in the field under similar conditions in similar localities” and perform services with “due regard for acceptable engineering standards and principles.”386 NDDOT’s Errors and Omissions Procedures pro- vide that the standard of care applicable to the per- formance of consultant services for the department require that a consultant “exercise the degree of D. Indemnity Agreements Florida’s Standard Professional Services Agreement terms discussed in Section VII.B have a broad indemnification clause. A consultant that enters into a contract with FDOT for professional or technical services for a project, development, or improvement agrees to indemnify and hold harmless the Department, and its offi- cers and employees, from liabilities, damages, losses, and costs, including, but not limited to, reasonable attorneys’ fees, to the extent caused by the negligence, recklessness, or intentionally wrongful conduct of the Consultant and other persons employed or utilized by the Consultant in the per- formance of the contract.375 An indemnity agreement was one of the issues in In re: Individual 35W Bridge Litigation.376 The case arose out of the design and construction of the Interstate 35 West Bridge where it crosses the Mississippi River in Minneapolis, Minnesota. In October 1962 Sverdrup & Parcel and Associates, Inc. (Sverdrup), as the company was then known, entered into a contract with the State to prepare the design and construction plans for the bridge. The contract included an indemnity provision that stated: [Sverdrup] indemnifies, saves and holds harmless the State and any agents or employees thereof from any and all claims, demands, actions or causes of action of whatsoever nature or character arising out of or by reason of the execu- tion or performance of the work of [Sverdrup] provided for under this agreement.377 Jacobs Engineering Group, Inc. (Jacobs), was the successor to Sverdrup. After the bridge collapsed, the legislature enacted a law “to compensate survivor-claimants of the collapse,” referred to in the opinion as the “compensation statutes.”378 The stat- utes provided in part “that the State may seek reim- bursement from third parties for these payments, to the extent the third party caused or contributed to the Bridge collapse.”379 Although the State’s action for contractual indem- nity against Jacobs was time-barred, the court agreed with the State that because of a provision in the compensation statutes, “the State’s right to recover exists ‘[n]otwithstanding any statutory or common law to the contrary.’”380 The court also rejected the contractor’s argument that the company 375 Florida Standard Professional Services Agreement Terms, supra note 336, at A4, ¶ 4(A). 376 787 N.W.2d 643 (Minn. App. 2010). 377 Id. at 645–46. 378 Id. 379 Id. (citing mInn. Stat. § 3.7394, subd. 5(a)) (citation omitted). 380 Id. at 828 (citation omitted). 381 Id. at 833. The court held that the statutory provision was not a denial of due process because “there is no protect- able property right in a statute of limitations defense.” Id. at 831 (citation omitted). Moreover, unless a fundamental right is involved the provision satisfied the applicable ratio- nal basis test. Id. at 830 (footnote omitted) (citation omit- ted). “[L]egislation that adjusts the benefits and burdens of economic life is presumed constitutional even when that legislation is applied retroactively.” Id. at 832 (citation omitted). 382 Id. at 846 (footnote omitted). 383 256 Ga. App. 342, 344–45, 568 S.E.2d 559, 563 (Ga. App. 2002) (citation omitted). 384 Id. at 345, 568 S.E.2d at 563 (emphasis supplied). 385 Indiana DOT, Louisiana DOTD, Montana DOT, and South Carolina DOT. 386 Florida Standard Professional Services Agreement Terms, supra note 336, at A1, ¶ 1(B).

36 Furthermore, two transportation departments stated that in the past 5 years their department had a products liability claim that involved, for example, an allegedly defective safety appliance or other product.393 Nineteen departments answered “No” to the question.394 Five departments did not respond to the question.395 As the treatise on products liability explains, regardless of whether a products liability claim is predicated on negligence, implied warranty, or strict liability in tort, the essential elements of the claims are “first, the existence of a defect; second, the attri- bution of that defect to the seller; and third, a causal relationship between the defect and the injuries sus- tained by the plaintiff.”396 There may be no products liability claim against a manufacturer, however, that builds its product in compliance with a govern- ment agency’s design specifications.397 An example of a case that involved a claim for a defective product used on highways is All-Iowa Contracting Company v. Linear Dynamics, Inc.398 All-Iowa Contracting Company (All-Iowa) installed pavement markings on Minnesota Department of Transportation (MnDOT) projects using epoxy made by Linear Dynamics, Inc. (Linear). The fast-set epoxy that Linear provided violated a MnDOT requirement that slow-set epoxy be used. An Iowa federal district court first dismissed All-Iowa’s claim for negligence because in Iowa a plaintiff may recover for purely economic loss only in contract and not in tort.399 Second, the court held that All-Iowa’s claims for breach of implied warranty of merchantability and breach of implied warranty of fitness for a particular purpose were barred because of a warranty disclaimer in the terms and conditions of the parties’ agreement.400 The next part of the digest analyzes the applica- bility of the acceptance doctrine that may apply to claims against a design consultant or contractor for plan or design errors and omissions after a trans- portation department’s acceptance of the work, as well as important exceptions to the doctrine. learning and skill ordinarily possessed by a reputa- ble design professional practicing in the same or similar locality and under similar circumstances.”387 Two transportation departments reported in response to the survey that their department had claims against contractors within the past 5 years for failure to comply with applicable design stan- dards.388 Fifteen departments stated, however, that they had not had such claims.389 F. Products Liability and Warranty Claims There may also be products liability and war- ranty claims against transportation departments, design consultants or contractors, and manufactur- ers or suppliers of defective safety appliances or other products that are specified in a plan or design of a highway or other public improvement. As one treatise summarizes the law in these areas, [t]he various standards of liability articulated by the courts in design defect cases incorporate, either directly or indirectly, the concept of reasonableness. This focus on the reasonable- ness of the design minimizes the importance of the legal basis, such as strict liability, negligence, or warranty, upon which a design defect case is brought, and some courts conclude that the standard applicable to a design case is essentially one of negligence notwithstanding the label which may be affixed to it, or to state that in the design defect area these various theo- ries of recovery merge. Thus, when a plaintiff establishes the existence of a design defect, courts generally are free to utilize the concepts of negligence, strict liability, or implied warranty of merchantability as theories of liability.390 Three transportation departments advised that within the past 5 years, their department had a claim or claims that specifically involved a breach of warranty in connection with the plan or design of a highway or other public improvement,391 whereas 17 departments said that they had not had any war- ranty claims in the past 5 years.392 393 Indiana DOT and Virginia DOT. 394 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Colorado DOT, Georgia DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, Tennessee DOT, Texas DOT, Utah DOT, and Wisconsin DOT. 395 Florida DOT, Idaho Transp. Dep’t, Louisiana DOTD, Nebraska Dep’t of Rds., North Dakota DOT, and Oklahoma DOT. 396 63B am. JUr. 2d, Products Liability, § 87 (2016). 397 Id., § 924 (2016) (citing Price v. Thomas Built Buses, Inc., 370 Ark. 405, 260 S.W.3d 300 (2007)). 398 296 F. Supp. 2d 969 (N.D. Iowa 2003). 399 Id. at 978. 400 Id. at 978–79. 387 N.D. DOT Errors and Omissions Procedures, supra note 339, at 1–2. 388 Indiana DOT and South Carolina DOT. 389 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Oregon DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, and Virginia DOT. Nine departments did not respond to the question. Colorado DOT, Florida DOT, Georgia DOT, Idaho Transp. Dep’t, Nebraska Dep’t of Rds., New Mexico DOT, North Dakota DOT, Oklahoma DOT, and Wisconsin DOT. 390 63B am. JUr. 2d, Products Liability, § 87 (2016) (emphasis supplied). 391 Montana DOT, Oregon DOT, Pennsylvania DOT, and South Carolina DOT. 392 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Colorado DOT, Georgia DOT, Indiana DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, New Mexico DOT, Tennessee DOT, Texas DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. Five departments did not respond to the question.

37 As discussed in the following Section VIII.B, some exceptions to the general rule are that the completed work has an inherently or imminently dangerous condition, includes conditions that are “reasonably certain to endanger third persons,” has “a latent defect that is either deliberately concealed by the contractor or not reasonably discoverable by the owner,” or “results in a public nuisance.”406 B. Exceptions to the Acceptance Doctrine 1. No Liability of Contractors for Patent Defects Discoverable by Owners In United States v. Spearin,407 the U.S. Supreme Court held that the government’s contract that spec- ified the details of the work to be done—without showing on the plans provided to Spearin the struc- tures that required relocation—amounted to a war- ranty that when the contractor complied with the specifications, the completed project would be ade- quate. In Spearin, the contractor was held not to bear the risk of inaccurate or misleading plans. The issue also has arisen as to whether an own- er’s acceptance of work precludes claims by motor- ists or other parties as putative third-party benefi- ciaries against design consultants or contractors. Indeed, it has been held that the completed and accepted work doctrine also means “that ‘an inde- pendent contractor is not liable for injuries to third parties occurring after the contractor has completed the work and it has been accepted by the owner.’”408 A contractor “is not liable even if the contractor ‘was negligent in carrying out the contract.’”409 In Florida, what is known as the Slavin doctrine has been applied to the issue of whether a design consultant or contractor may be held liable after the government or other owner accepts the former’s plan or design. Under the Slavin doctrine, “the lia- bility of a contractor is cut off after the owner has accepted the work performed, if the alleged defect is a patent defect which the owner could have discov- ered and remedied.”410 In contrast, when design defects are “glaring or obvious,” or the contractor reasonably could have discovered the defects, an VIII. CLAIMS FOR PLAN OR DESIGN ERRORS AND OMISSIONS AFTER A TRANSPORTATION DEPARTMENT’S ACCEPTANCE OF THE WORK A. Effect on Claims by DOTs Against Contractors After a DOT’s Acceptance of the Work The general rule appears to be that when an owner, such as a transportation department, provided the plan or design for a project, and the contractor had no discretion in the performance of the work, there is no basis for claims by the owner against the contractor for breach of contract, express warranty or implied warranty, or strict liability in tort after the owner’s acceptance of the work.401 The term “acceptance” means that a contractor has lost control of the work and of any ability to alter or change it.402 When a general contractor performs its contract with the owner who has provided detailed plans and specifications and control over them such that the general contractor has no dis- cretion, the law regards the general contractor as rendering a service and not [as] the seller of goods or products being incor- porated in the building; hence, there is no basis for express warranty, implied warranty, or strict liability in tort. Those are applications of law that stem from the contractual rela- tionships of the parties about which there is no dispute.403 As discussed in Sections VIII.B. and VIII.C, a transportation department’s standard terms and conditions for its contracts may address the meaning of the term “acceptance.” Florida’s terms are clear: Acceptance of the work by the Department or Agreement termination does not constitute Department approval and will not relieve the Consultant of the responsibility for sub- sequent corrections of any errors and/or omissions and the clarification of any ambiguities. The Consultant shall make all necessary revisions or corrections resulting from errors and/or omissions on the part of the Consultant without additional compensation. If these errors and/or omissions are discovered during the construction of the project, they shall be corrected without additional compensation.404 Thus, absent enforceable contract terms or a con- trolling statute to the contrary, a design consultant’s or contractor’s completion of work and the owner’s acceptance of the work generally are held to “consti- tute[] a waiver of claims for damages resulting from negligent or nonconforming construction.”405 401 Bd. of Educ. of City of Clifton v. W.R. Grace Corp., 258 N.J. Super. 94, 127, 609 A.2d 92, 111 (1992). 402 McIntosh v. Progressive Design and Eng’g, Inc., 2015 Fla. App. Lexis 4265, at *9 (2015) (citation omitted). 403 Bd. of Educ. of City of Clifton, 258 N.J. Super. at 127, 609 A.2d at 111 (emphasis supplied). 404 Florida Standard Professional Services Agreement Terms, supra note 336, at A3, ¶ 4(D). 405 A. Holt Gwyn, ConStrUCtIon damaGeS and remedIeS 234 (W. Alexander Mosely, ed. 2013). 406 Id. See 64 am. JUr. 2d, Public Works and Contracts, § 112 (2016). 407 248 U.S. 132, 39 S. Ct. 59, 63 L. Ed. 166 (1918). 408 Nifong v. C.C. Mangum, 121 N.C. App. 767, 768, 468 S.E.2d 463, 465 (quoting Price v. Cotton Co., 226 N.C. 758, 759, 40 S.E.2d 344 (1946)). 409 Id. at 768–69, 468 S.E.2d at 465 (quoting Price, 226 N.C. at 759, 40 S.E.2d at 344–45). 410 McIntosh, 2015 Fla. App. LEXIS 4265, at *9 (Fla. App. 2015) (citation omitted) (internal quotation marks omitted).

38 Two requirements must be satisfied before the doc- trine will isolate a contractor from liability. First, the defect must be patent. “[T]he test for patency is not whether or not the condition was obvious to the owner, but whether or not the dangerousness of the condition was obvious had the owner exercised reasonable care.”417 In this case, an FDOT employee had discov- ered a potential design defect prior to the accident. Second, the owner must have accepted the work. “Acceptance” is the term applied for shifting the responsibil- ity to correct patent defects to the party in control. …Once an entity completes its work, and that work is accepted, the bur- den of correcting patent defects shifts to the entity in control. It is the controlling entity’s intervening negligence in not cor- recting a patent defect that proximately causes the injury.418 The court agreed with the design company that “[i]t had no control after FDOT accepted its work[] and had no ability to alter the work of FDOT or its contractor.”419 It is important that the design com- pany did not control the project’s construction or “when the completed project would become opera- tional. …Going operational was a decision to be made by FDOT and Broward County.”420 As the court saw it, however, “[t]he real dispute here is whether acceptance of the design company’s work was to be by FDOT, which controlled the proj- ect and accepted the design company’s design, or by Broward County, which would ultimately maintain the intersection.”421 Under the Slavin doctrine, “the responsibility for a patent defect rests with the entity in control and with the ability to correct it.”422 The jury found that the design company’s negligence in designing the traffic signal was the legal cause of the plaintiff ’s father’s death, but also found that “the negligent design was accepted and discoverable by FDOT with the exercise of reasonable care.”423 The appeals court affirmed the verdict in favor of the design company.424 Another application of the Slavin doctrine that barred recovery against a contractor is Transportation Engineering, Inc. v. Cruz.425 A Florida appellate court held that the “DOT accepted the project with bare (uncushioned) guardrail ends within the clear zone, and that this was an open and obvious owner may be able to “escape liability” by transfer- ring responsibility to the contractor.411 In 2015 a Florida appellate court applied the Slavin doctrine in McIntosh v. Progressive Design & Engineering, Inc.412 In McIntosh FDOT contracted with Progressive Design and Engineering, Inc., to design the traffic signals for the intersection where the accident occurred. FDOT also hired EAC Consulting to provide additional engineering review of the plans. FDOT approved the plans, and “[t]he project was generally built as designed, but the con- struction team had some ability to make modifica- tions if needed.”413 The court explained that FDOT was in control of the intersection and [was] the only entity that could make changes. Broward County techni- cians inspected all aspects of the traffic signals. After the burn-in period, FDOT would transfer control of the inter- section to Broward County for maintenance purposes. The accident occurred sixteen days into the burn-in period. Broward County did not take final control of the intersec- tion until January 2005.414 According to the plaintiff ’s expert, the design of the traffic signal was the primary cause of the colli- sion because the line of sight caused a driver to focus on the second set of signals—located farther out in the intersection—rather than on the first set of sig- nals, which were located just above the stop bar for people exiting a mobile home park.415 The appeals court explained that the Slavin doc- trine limits a contractor’s liability to third persons. [A] contractor who performs work does not owe a duty to the whole world…else the extent of his responsibility would be difficult to measure and a sensible man would hardly engage in the occupation under such conditions. …The Slavin doctrine considers the respective liability of an owner and contractor, after the owner has resumed posses- sion of the construction, for injuries to a third person for negligence of the contractor in the construction of the improvement.… Under Slavin, “the liability of a contractor is cut off after the owner has accepted the work performed, if the alleged defect is a patent defect which the owner could have discov- ered and remedied.” …The contractor’s work must be “fully completed before the owner becomes liable and the contrac- tor is exonerated.”416 411 Steven B. Lesser & Daniel L. Wallach, The Twelve Deadly Sins: An Owner’s Guide to Avoiding Liability for Implied Obligations During the Construction of a Project, 28 ConStr. law. 15, 16 (2008), hereinafter referred to as “Lesser & Wallach” (quoting PCL Constr. Serv., Inc. v. United States, 47 Fed. Cl. 745, 785 (Fed. Cl. 2000)). 412 McIntosh, 2015 Fla. App. Lexis 4265, at *1. 413 Id. at *5. 414 Id. at *5–6. 415 Id. at *6. 416 Id. at *8 (citations omitted) (some internal quotation marks omitted). 417 Id. at *9. 418 Id. at *12 (citation omitted) (emphasis supplied). 419 Id. at *11. 420 Id. 421 Id. at *12. 422 Id. (citation omitted). 423 Id. at *7, 14. 424 Id. at *14. 425 152 So. 3d 37 (Fla. App. 2014).

39 Mangum, Inc. (Mangum), the contractor who built the road, for negligence. Nifong alleged that Mangum’s work caused water to pond on the road. Mangum impleaded the North Carolina Department of Transportation (NCDOT). Nifong argued that Mangum’s deviation from NCDOT’s plans during the construction created a hazardous hydroplaning condition. The plaintiff ’s expert’s opinion was that the deviation “should have been obvious.”435 Several engineers testified by deposition that Mangum con- structed the boulevard according to NCDOT’s plans and that the department would not have accepted the work if it had not been satisfied with Mangum’s performance.436 Because Nifong failed to show that the defendant’s work was imminently dangerous, the appeals court affirmed the trial court’s grant of a summary judgment for Mangum. In Bob v. Scruggs Co.,437 the plaintiff Emma Bob sued the Scruggs Company (Scruggs) and GDOT for the defendants’ alleged negligent design and con- struction of a segment of Interstate 75. Bob alleged that the defendants’ negligence was the proximate cause of an automobile accident in which she was severely injured.438 The purpose of the construction project was to widen certain bridges along a seg- ment of Interstate 75 in southwest Georgia. The plaintiff argued that an embankment was too steep, a guardrail was too short, and that the road at the site of the accident was inherently dangerous.439 Leware Construction Company (Leware) had entered into a general construction contract with GDOT to perform the work according to plans and specifications prepared by the department’s engi- neers.440 Leware’s subcontract with Scruggs for a portion of the grading, paving, and drainage work incorporated GDOT’s plans and specifications.441 Bob argued that the subcontract required Scruggs to perform the work in accordance with two highway design manuals published by AASHTO that the subcontract allegedly incorporated,442 yet the sub- contract neither mentioned the AASHTO manuals nor required that the work be performed in accor- dance with the manuals.443 The court stated that in Georgia, “a contractor may be liable to third parties injured as a result of condition.”426 Thus, even if Transportation Engineering, Inc. (TEI), “violated its standard of care by failing to follow Index 400 in its design or failing to follow some required procedure to deviate from Index 400,” it was proper to grant a summary judgment in favor of TEI based on Slavin.427 2. Contractor’s Liability for a Plan or Design that Is Imminently Dangerous Although the evidence in an Indiana case did not establish that the exception applied, the court agreed that there is an “imminently dangerous exception” to the general rule that a design consultant or contrac- tor is protected from liability claims after an owner’s acceptance of the work.428 The term “imminently dangerous” means, first, that an “injury will reason- ably occur when the object is used for its declared purpose,” and, second, that there is “‘knowledge of a danger, not merely possible, but probable.’”429 In a New Jersey case, Board of Education of City of Clifton v. W.R. Grace Corporation,430 the court stated that when a contractor receives detailed plans and specifications from an owner, the contrac- tor may rely on the professional judgment and expe- rience of those persons the owner employed to develop the plans and specifications.431 Neverthe- less, a contractor may be liable for a design that has “glaring defects that a contractor of average skill and of ordinary prudence” should know likely would cause injury.432 In North Carolina, although a contractor is not liable when the acceptance doctrine applies, even if a contractor is negligent in performing a contract, a contractor may be held liable even after completion of the contract when the work performed is immi- nently dangerous.433 For example, in Nifong v. C.C. Mangum, Inc.,434 the issue was whether a third-party accident victim could sue a contractor after the com- pletion of the contractor’s work for the State. Nifong was injured while driving in the rain when her car slid and hit a curb and trees. Nifong sued C.C. 426 Id. at 48. 427 Id. 428 As held in an Indiana case, Ross v. State, 704 N.E.2d 141, 145, 146 (Ind. App. 1998), when “a contractor is not following his or her own plans for the work, but those pro- vided by the contractee, liability is imposed only where the plans are so obviously defective that no reasonable contractor would follow them.” 429 Nifong, 121 N.C. App. at 769, 468 S.E.2d at 465 (cita- tions omitted) (some internal quotation marks omitted). 430 258 N.J. Super. 94, 609 A.2d 92 (N.J. Super. 1992). 431 Id. at 125, 609 A.2d at 110. 432 Id. 433 Nifong, 121 N.C. App. at 768–69, S.E.2d at 465. 434 121 N.C. 767, 468 S.E.2d 463 (1996). 435 Id. at 769, 468 S.E.2d at 465. 436 Id. 437 204 Ga. App. 375, 419 S.E.2d 100 (1992). 438 Id. at 375, 419 S.E.2d at 101. 439 Id. at 376, 419 S.E.2d at 102. 440 Id. at 375–76, 419 S.E.2d at 101. 441 Id. at 376, 419 S.E.2d at 101. 442 Id. at 376, 419 S.E.2d at 102. 443 Id. at 377, 419 S.E.2d at 102.

40 Next, the digest discusses whether a contractor has a claim against a transportation department when the department has made a material misrepresentation in its plan or design for a project or failed to disclose material information, as well as whether clauses in a department’s contract with a contractor will absolve the department of a material misrepresentation or of a failure to disclose material information. IX. CONTRACTOR CLAIMS AGAINST TRANSPORTATION DEPARTMENTS FOR DEFECTIVE PLANS OR DESIGNS A. Transportation Departments Reporting Claims Against the DOT by Contractors Eleven transportation departments reported that within the past 5 years, a contractor had brought an action or otherwise made a claim against their depart- ment for damages because the department allegedly provided the contractor with a defective plan or design for a project.451 Alleged defects may include one or more undisclosed material conditions and/or one or more material misrepresentations. The Arkansas State Highway and Transportation Department reported a claim that involved an “earthwork quantity error.” The Colorado Department of Transportation stated that it had a claim for utility disruption but that the claim was settled. INDOT said that although the exact number of claims is unknown, there have been numerous claims arising out of changed conditions. The Kansas Department of Transportation’s experi- ence with nine claims that occurred in the past 5 years is included in the summary of the departments’ responses to the survey.452 Nine DOTs surveyed said, however, that there had not been claims by contractors against their department.453 B. Waiver of Sovereign Immunity for Contract Claims Against Transportation Departments There are at least two recent cases in which transportation departments argued that sovereign immunity barred a contractor’s claim against the DOT. In Battle Ridge Companies v. North Carolina Department of Transportation,454 NCDOT argued the negligent performance of the contract work— that is, work not in accordance with the project plans and specifications.”444 Even if a contractor neg- ligently performs the work, the contractor may not be held liable to an injured third party for negligence after the owner has accepted the work unless the work is a nuisance per se, inherently or intrinsically dangerous, or so negligently defective as to be immi- nently dangerous to others.445 Furthermore, when the design is inherently dangerous, a “contractor may be held liable only if it held itself out as an expert in the design of the type of work performed at the project.”446 In affirming the trial court’s grant of a summary judgment for Scruggs, the appeals court held that Scruggs, who had no highway design expe- rience, performed the work in accordance with GDOT’s plans and specifications.447 C. Effect of the Contract and/or Terms and Conditions on the Acceptance Doctrine Except as discussed hereafter in Section IX.C, when the written agreement between the owner and contractor contains a specific disclaimer that requires the contractor to satisfy itself as to the accuracy of the owner’s plans and specifications, depending on the circumstances, the disclaimer may be upheld.448 One source argues that [a]n owner can avoid liability under the Spearin doctrine by shifting the risk of loss through disclaimers or contractual language making the contractor the explicit guarantor of the adequacy of the plans and specifications. The language disclaiming this obligation, however, must be more than just a general or boilerplate disclaimer.449 A disclaimer is unlikely, however, to affect third parties who are not parties to the agreement, such as motorists injured by reason of a contractor’s negligence.450 In sum, unless one of the above exceptions applies and in the absence of an enforceable contractual provision or a controlling statute to the contrary, a design consultant or contractor is no longer respon- sible for design errors and omissions after the owner accepts the work. 444 Id. at 376, 419 S.E.2d at 102 (citation omitted). 445 Id. 446 Id. (citation omitted). 447 Id. 448 Lesser & Wallach, supra note 411, at 17 (citing In re D. Federico Co., 8 B.R. 888 (Bankr. D. Mass. 1981)). 449 Id. 450 See, e.g., Spearin, 248 U.S. at 137, 39 S. Ct. at 61, 63 L. Ed. at 169. 451 Arkansas Hwy. & Transp. Dep’t, Colorado DOT, Indiana DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Missouri DOT, Montana DOT, Oregon DOT, Pennsylvania DOT, and Tennessee DOT. 452 App. E, Kansas DOT’s response to Question 8. 453 Alabama DOT, Arizona DOT, Georgia DOT, Maine DOT, South Carolina DOT, Texas DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. Six departments did not respond to the question. 454 161 N.C. App. 156, 587 S.E.2d 426 (N.C. Ct. App. 2003).

41 does not prevent the party from bringing an action against the State.464 C. Claims by Contractors Against Transportation Departments for Undisclosed Material Information or Material Misrepresentations in a Plan or Design 1. A Plan or Design’s Implied Warranty There are cases holding that a contractor may have a cause of action against a transportation department or other owner for breach of an implied warranty when the owner’s plan or design contains inaccurate material information, fails to disclose material information, or makes a material misrep- resentation. There is judicial authority that contrac- tual disclaimers, exculpatory clauses, or waivers do not absolve a DOT of its liability for erroneous plans or designs. As held in Lowder, Inc. v. North Carolina State Highway Commission,465 a contracting agency that furnishes inaccurate information as a basis for bids may be liable on a breach of warranty theory. The reason is that it is unfair to bar the claim of a con- tractor misled by inaccurate plans that submitted a bid lower than it would have submitted if the infor- mation provided had been correct.466 In Gilbert Pacific Corp. v. State,467 the Oregon Court of Appeals, following the Oregon Supreme Court’s holding in Barbour & Son v. Highway Commis- sion,468 held that “an owner’s ‘specification is in the nature of a warranty that, if it is “complied with, satisfactory performance will result.”’”469 In Gilbert Pacific Corp., the only change was in “the parties’ understanding of what the conditions were,” a change caused by the State’s failure to include known or knowable conditions in its original specifi- cations, conditions that existed when the State pre- pared the specifications.470 The court held, moreover, that the contractor could “pass-through” a claim for a subcontractor without the latter’s formal interven- tion.471 The State failed to show that the contractor was not liable to the subcontractor for damages caused by the State’s alleged breach. that sovereign immunity barred an action by Battle Ridge Companies (Battle Ridge) against the depart- ment. Under the contract, Battle Ridge agreed to perform certain construction work for NCDOT to widen and relocate part of U.S. Highway 421.455 On completion of the work, however, NCDOT assessed Battle Ridge for the amount of $233,850.00 as liqui- dated damages for “untimely project completion.”456 Battle Ridge sued for breach of contract and, alter- natively, for breach of an implied warranty.457 NCDOT argued that sovereign immunity barred the action. The court agreed that the State could not be “sued in its own courts or elsewhere unless it has consented by statute to be sued or has otherwise waived its immunity from suit.”458 In North Carolina, however, when the State enters into a valid contract, the State “implicitly consents” to be sued for breach of contract.459 Furthermore, North Carolina General Statutes Section 136-29, regarding the adjustment and resolution of a transportation department’s contract claim, is part of every contract between NCDOT and a contractor.460 Nevertheless, for there to be a right of action against NCDOT, a claim must come within the “terms and framework” of the parties’ contract.461 In Midwest Dredging Co. v. McAninch Corp.,462 the defendant McAninch Corporation had a contract with the Iowa Department of Transportation (Iowa DOT). Midwest Dredging Co. (Midwest) brought an action as a third-party beneficiary because of alleged inaccuracies in the DOT’s plans and specifications. The Iowa Supreme Court upheld a trial court’s decision that the DOT did have immunity from Midwest’s action.463 Of course, the issue of whether a department has immunity from claims by design consultants and contractors may be addressed by statute. For exam- ple, a Connecticut statute provides that when a party has a contract with the State, the party’s acceptance of an amount offered as final payment 455 Id., 161 N.C. App. at 156, 587 S.E.2d at 427. 456 Id. 457 Id. 458 Id. (citation omitted). 459 Id. 460 Id. at 157–58, 587 S.E.2d at 427 (citation omitted). 461 Id., 161 N.C. App. at 156, 159, 587 S.E.2d at 427, 428 (citing Teer Co. v. Highway Comm., 4 N.C. App. 126, 166 S.E.2d 705 (1969) (dismissing a contractor’s quantum meruit claims because they did not arise under the terms and framework of the contract)). 462 424 N.W.2d 216 (Iowa 1988). 463 Id. at 220. 464 Conn. Gen. Stat. § 4-61(a) (2016). 465 26 N.C. App. 622, 638, 217 S.E.2d 682, 692 (1975). 466 Battle Creek Cos., 161 N.C. App. at 159, 587 S.E.2d at 428–29 (quoting Lowder Inc., 26 N.C. App. at 638–39, 217 S.E.2d at 693). 467 110 Or. App. 171, 822 P.2d 729 (1991). 468 248 Or. 247, 257, 433 P.2d 817 (1967). 469 Gilbert Pacific Corp, 110 Or. App. at 176, 822 P.2d at 732 (quoting J.D. Hedin Construction Co. v. United States, 171 Ct. Cl. 70, 347 F.2d 235, 241(1965)). 470 Id. at 176, 822 P.2d at 732. 471 Id. at 173–75, 822 P.2d at 730–32.

42 In a case decided by the Illinois Court of Claims, Arcole Construction Company v. State,479 the plans for the reconstruction of a section of Roosevelt Road in Chicago failed to disclose the foundation of an aban- doned street car track. The foundation extended for the entire length of the proposed project for a width of 18 ft and consisted of a Portland cement concrete base that varied from 24 to 28 in. in thickness.480 As the court observed, the general rule is that when an owner prepares plans and specifications that include a material misrepresentation, a contractor is entitled to recover damages caused by the misrepresenta- tion.481 The court relied on Hollerbach v. United States, supra, in which the U.S. Supreme Court held that a “positive statement of the [contract’s] specifications must be taken as true and binding upon the govern- ment….”482 Furthermore, the Illinois court held that the State’s “direction to contractors to visit the site and inform themselves of the actual conditions of a proposed undertaking will not relieve [the state] from defects in the plans and specifications….”483 3. Breach of Warranty for Material Misrepresentations A case that involves a contractor’s claim for breach of warranty because of a transportation depart- ment’s alleged material misrepresentation in a plan or design is P.T. & L. Construction Company, Inc. v. State, Department of Transportation,484 decided by the Supreme Court of New Jersey. The plaintiff alleged that the New Jersey Department of Transportation misled the company into believing that it would be working under dry or normal work- ing conditions.485 The court noted that California was one of the first states “to imply a warranty of correct- ness in contract plans and specifications furnished by public bodies”; however, some courts thereafter “limited the implied warranty to situations in which the state makes positive and material representa- tions as to conditions within” the state’s knowledge that bidders are not reasonably able to discover.486 In P.T. & L. Construction Company, Inc., based on a letter, the State clearly was aware of site 2. Breach of Warranty for Undisclosed Material Conditions The Oregon DOT reported in response to the survey that [a]lmost every construction contract claim asserts some type of differing site condition or other omission in the design on which [the contractors] base their claims. A small percentage of the design error claims actually lead to contractor recovery. No such claim has been the subject of a judgment.472 Other departments that responded to the survey provided information on claims by contractors based on undisclosed conditions.473 A leading, oft-cited decision relevant to claims for undisclosed conditions is the U.S. Supreme Court’s decision in United States v. Spearin.474 The Spearin case involved a contract to construct a dry dock at New York’s Brooklyn Navy Yard in accordance with plans and specifications prepared by the U.S. gov- ernment. The case involved the relocation of a sewer and a dam that diverted water and that were not shown either on the City’s or the federal govern- ment’s plans provided to Spearin. Government officials also knew that the sewer overflowed from time to time, a fact that also was never communi- cated to Spearin.475 In explaining the applicable rules, the court stated that one who undertakes to erect a structure upon a particular site, assumes ordinarily the risk of subsidence of the soil. … But if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.476 The court held that the risk presented by the existing system would normally have rested on Spearin. Because of the contract’s provision for the relocation of a section of the sewer and articles in the contract “prescribing the character, dimensions and location of the sewer,” the contract “imported a warranty,” meaning that if the contractor complied with the specifications, the sewer would be ade- quate.477 General clauses that required the contrac- tor to examine the site, check the plans, and inform itself of the requirements of the work did not “over- come” the implied warranty.478 472 App. E, Oregon DOT’s response to Question 8. 473 App. E, DOTs’ responses to Question 8. 474 248 U.S. 132, 39 S. Ct. 59, 63 L. Ed. 166 (1918). 475 Id. at 134, 39 S. Ct. at 60, 63 L. Ed. at 168. 476 Id. at 136, 39 S. Ct. at 60, 63 L. Ed. at 168 (citations omitted). 477 Id. at 137, 39 S. Ct. at 61, 63 L. Ed. at 169. 478 Id. 479 11 Ill. Ct. Cl. 423 (1941). 480 Id. at 432. 481 Id. at 433. 482 Id. at 434 (quoting Hollerbach v. United States, 233 U.S. 165, 34 S. Ct. 553, 58 L. Ed. 898 (1914)). 483 Id. (citing Christie v. United States, 237 U.S. 234, 35 S. Ct. 565, 59 L. Ed. 933 (1915), Hollerbach v. United States, 233 U.S. 165, 34 S. Ct. 553, 58 L. Ed. 898 (1914), and United States v. Utah, N. & C. Stage Co., 199 U.S. 414, 26 S. Ct. 69, 50 L. Ed. 251 (1905)). 484 108 N.J. 539, 531 A.2d 1330 (N.J. 1987). 485 Id. at 543, 531 A.2d at 1332. 486 Id. at 550, 531 A.2d at 1335–36 (citations omitted).

43 As for IDOT’s disclaimers, although a disclaimer of an estimate provides “a flexibility sufficient to accom- modate actual deviations from the estimate,” dis- claimers may not be used “to excuse the estimator from using relevant information that is reasonably available to him.”498 Because the DOT provided a pos- itive representation of the number of T1 locations,499 contractual disclaimers could not be used to “shield” the department from liability when it negligently misrepresented the number of T1 locations.500 In another case involving misrepresentations, J.L. Simmons Co., Inc. v. State,501 an appendix to the parties’ contract included a positive statement that no rock or quicksand would be encountered.502 After J.L. Simmons Co., Inc. (Simmons), entered into a construction contract with the State and after the company stripped the top soil from the building site, Simmons encountered a “substance” that had to be removed with air hammers and dynamite because it could not be removed with power equipment.503 Cit- ing Arcole Construction Company v. State, supra, the court held that when an owner prepares plans and specifications that contain a material misrepresen- tation that misleads a contractor to his financial detriment, the contractor is entitled to recover dam- ages caused by the misrepresentation.504 Likewise, in Ace Constructors, Inc. v. United States,505 pursuant to a contract between the plain- tiff Ace Constructors, Inc. (Ace), and the Corps, Ace agreed to construct a facility at Fort Bliss, Texas. Ace alleged, however, that the Corps provided “incomplete and internally contradictory plan doc- uments.”506 Ace argued that the government’s plan documents included explicit and detailed cut-and- fill data points, but that the actual lower site eleva- tions that Ace encountered amounted to a differing site condition.507 The court rejected the govern- ment’s defense that Ace was “unreasonable” in interpreting the plan documents because Ace “should have derived the actual grading require- ments based on the partial staking plans that were provided.”508 In fact, according to the court, Ace encountered site conditions that “were unexpected and [that] differed materially” from the conditions conditions that would pose “unusual difficulties” for a contractor.487 Although N.J.S.A. Section 59:13-3 provides that a recovery is not allowed against the State for claims based on an implied warranty or a contract implied in law, the court distinguished the statute from the present dispute because the case concerned not “an implied representation but a series of misrepresentations….”488 Recovery was allowable for the nondisclosure of material facts that amounted to a misrepresentation of site condi- tions.489 As in Spearin, supra, general, contractual exculpatory clauses that disavowed responsibility for differing site conditions did not apply in a case such as this one.490 In Aldridge Electric, Inc. v. State,491 the claimant argued that the Illinois Department of Transportation (IDOT) was liable for breach of contract because of its negligent preparation of its estimate for prospec- tive bidders to provide 2,183 T1 signals. The esti- mate was a material misrepresentation on which Aldridge Electric, Inc. (Aldridge), relied to its finan- cial detriment because it calculated its unit bid price for T1 locations for an electrical maintenance con- tract based on the purported number of T1 signal locations.492 The State ultimately determined that there were 166 fewer T1 locations than in the esti- mate.493 Because the government “impliedly warrants the accuracy of matters” in contract documents, the government may be held liable to contractors for specifications that had material misrepresentations on which a contractor relied.494 “A misrepresentation is ‘material’ if the plaintiff would have acted differ- ently had he been aware of it, or if it concerned the type of information upon which he would be expected to rely when making his decision to act.”495 The court agreed that Aldridge would have pro- vided a higher per-unit bid if it had been provided an accurate estimate of T1 locations.496 The reason is that Aldridge would have divided its expected profit margin by 2,017 instead of 2,183, thereby having “a higher unit-price…to maintain the profit margin it wanted when it submitted its unit-price bid for an estimated 2,183 T1 signals….”497 487 Id. at 559, 531 A.2d at 1340. 488 Id. at 559, 531 A.2d at 1340–41. 489 Id. at 541, 531 A.2d at 1331. 490 Id. 491 64 Ill. Ct. Cl. 220 (2012). 492 Id. at 227. 493 Id. at 230. 494 Id. at 227 (citations omitted). 495 Id. at 228 (citations omitted). 496 Id. at 231. 497 Id. at 238. 498 Id. at 232 (citations omitted). 499 Id. at 233. 500 Id. at 232 (citations omitted). 501 21 Ill. Ct. Cl. 503 (Ill. Ct. Cl. 1965). 502 Id. at 514. 503 Id. 504 Id. at 516. 505 70 Fed. Cl. 253 (Ct. Cl. 2006). 506 Id. at 264. 507 Id. at 267. 508 Id. at 265.

44 The court held that Dickerson exercised little if any independent discretion in the construction of the beams.516 5. Third-Party Beneficiary Claims by Subcontractors Against Transportation Departments for a Defective Plan or Design Defective plans and specifications may furnish a basis for a claim by a purported third-party benefi- ciary against a transportation department that prepared or contracted with a design consultant or contractor to prepare a plan or design for a project. One DOT that responded to the survey stated that with respect to design–build contracting for high- ways, a third party had brought a claim against the department for an injury caused by an allegedly defective plan or design.517 Twelve DOTs stated that they had not had such claims.518 In Midwest Dredging Company v. McAninch Corporation,519 the highway construction contract between McAninch Corporation and the Iowa DOT for a project incorporated numerous project plans compiled by DOT engineers, as well as a 661-page DOT publication entitled Standard Specifications for Highway and Bridge Construction.520 The plain- tiff, Midwest Dredging Company (Midwest), was a subcontractor.521 Midwest’s action against the DOT and McAninch alleged that the DOT impliedly war- ranted the accuracy of the contract’s plans and speci- fications when it stated that a certain pit was hydraulically dredgeable. Midwest claimed, first, that it was an intended third-party beneficiary of the Iowa DOT–McAninch contract and, second, that the State had waived its sovereign immunity “by virtue of the plans and specifications included in the con- tract and the work performed in drilling test holes.”522 Iowa DOT argued that the contract effectively dis- claimed any “guaranty of accuracy in their plans.”523 First, the general rule is that when a construction contract places a risk on a party, that party must absorb any loss should there be any unexpected con- ditions encountered.524 The government may be held liable to a contractor, however, for breach of an implied warranty if the government misrepresents the plans indicated.509 When the government pro- vides a contractor with defective specifications, the government has breached an “implied warranty that satisfactory contract performance will result from adherence to the specifications….”510 Because of the material variation between the conditions that were expected and the conditions that Ace actually encoun- tered, Ace was entitled to recover all of the costs prox- imately flowing from the breach of contract. 4. Breach of Warranty and an Owner’s Responsibility for Delay In Commonwealth Department of Transportation v. W.P. Dickerson & Son, Inc.,511 W.P. Dickerson & Son, Inc., and Dickerson Enterprises, Inc. (Dickerson), entered into a contract with PennDOT whereby Dickerson would construct 5,500 ft of highway and the necessary bridges. The project, for which the court found that Dickerson exercised little, if any, discretion, required the manufacture and installation of 600 pre- stressed concrete box beams to support concrete decks. Dickerson Structural Concrete Corporation, a com- pany owned by W. Logan Dickerson, the owner of Dickerson, manufactured all except 115 of the beams. PennDOT provided the specifications for the manu- facture of the beams, including the materials to be used, and kept an inspection team at Dickerson’s plant during the manufacturing process.512 PennDOT’s rejection of some of the beams for the bridges caused a “major disruption” in the construction schedule.513 Dickerson’s complaint, filed with the Board of Arbitration and Claims (Board), sought a “remis- sion” of liquidated damages that PennDOT withheld and damages for the delay caused by PennDOT’s inspection and rejection of the prestressed concrete beams. The Board awarded a judgment to Dickerson for $120,830.98 in damages and an additional $47,618.85 (both awards with interest) that repre- sented the amounts PennDOT retained as retention of liquidated damages and Dickerson’s overhead.514 In affirming the Board’s decision, the Pennsylvania Commonwealth Court held: PennDOT provided Dickerson with specifications relating to all materials to be used in the construction of the pre- stressed concrete beams. The specifications dictated the composition and the procedure for mixing the concrete and described the tests to be run on each batch. …A team of PennDOT inspectors monitored the pouring of the concrete and the formation of the beams.515 509 Id. at 271. 510 Id. at 284 (citations omitted) (internal quotation marks omitted). 511 42 Pa. Commw. 359, 400 A.2d 930 (1977). 512 Id. at 360, 400 A.2d at 931. 513 Id. at 361, 400 A.2d at 931. 514 Id. at 362, 400 A.2d at 931–32. 515 Id. (citations omitted). 516 Id. 517 Virginia DOT. 518 Alabama DOT, Arizona DOT, Georgia DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, and Utah DOT. Thirteen departments did not respond to the question. 519 424 N.W.2d 216 (Iowa 1988). 520 Id. at 217. 521 Id. 522 Id. at 219. 523 Id. at 218. 524 Id. at 221 (citations omitted).

45 Likewise, in Buckley & Company v. State,535 a New Jersey court stated that “general clauses cannot fairly be read to supersede or render harmless the violation of [one’s] own obligations under the con- tract.”536 In Buckley, one of the issues was liability for delays caused by plan errors. The court held that the department’s submission of plans that were “impre- cise and incorrect…was unquestionably a breach of its obligations under the contract.”537 The court followed the doctrine articulated in Laburnum Construction Corporation v. United States,538 in which the U.S. Court of Claims held that when faulty speci- fications prevent or delay the completion of a contract, the contractor is entitled to recover damages for the defendant’s breach of its implied warranty.539 The court in Buckley & Company held that a con- tractual requirement that a contractor examine the plans could not be construed to transfer responsibility for defective plans to the contractor.540 Furthermore, the contract’s no-damage provisions could not immu- nize the department because there were “simply no facts or contractual provisions here from which it can be concluded that the parties contemplated delays and losses resulting from erroneous plans.”541 The next part of the digest discusses the effect of design–build contracts on a transportation depart- ment’s liability for design errors and omissions and whether the use of design–build contracting has resulted in fewer claims against transportation departments for design errors. X. DESIGN–BUILD CONTRACTS AND LIABILITY FOR DESIGN ERRORS AND OMISSIONS A. Transfer of Risk and Responsibility from the DOT to the Design Consultant or Contractor Although the norm in public contracting has been the use of the design–bid–build method of contract- ing, alternative methods of contracting are being encouraged and used, such as the design–build method. At least 42 states and the District of Columbia authorize transportation agencies to use the design– build form of contracting, and at least 15 states reportedly are making “extensive use” of the design– build method.542 About half of the states apparently material facts by concealment or false statements.525 The court held that “[t]he risk to Midwest was not merely additional expense; it was the inability to perform the contract at all.”526 Second, as for the disclaimers in the contract, “gen- eral exculpatory clauses which disclaim any responsi- bility for the accuracy of that data have been held to be of no effect when the positive specifications made by the government were obviously intended to be used by the bidding contractors in formulating their bids.”527 Under the circumstances, the exculpatory clauses had no effect.528 The court agreed with the trial court that Midwest was a third-party beneficiary of the Iowa DOT–McAninch contract.529 6. Failure of General Contract Clauses to Absolve an Owner of a Breach of Warranty in a Plan or Design for a Public Improvement As seen in Spearin; Hollerbach; Arcole Construction Company; P.T. & L. Construction Company, Inc.; Aldridge Electric, Inc.; and Midwest Dredging Company, supra, disclaimers, exculpatory clauses, and waivers have been held not to absolve a transpor- tation department or other owners of a defective plan or design when there are material nondisclosures, inaccuracies, or misrepresentations. In Wyle, Inc. v. ITT Corporation,530 an appellate court in New York held that “to state a claim for fraudulent inducement[] ‘there must be a knowing misrepresentation of mate- rial present fact [that is] intended to deceive another party and induce that party to act on it….’”531 An action for fraud usually involves a breach of duty that is sepa- rate from or in addition to a contractual duty.532 Never- theless, even though the plaintiff has a breach of contract claim, a fraud claim may be based on a breach of contractual warranties.533 The court acknowledged that “‘[i]t simply cannot be the case that any statement, no matter how false or fraudulent or pivotal, may be absolved of its tortious impact simply by incorporating it verbatim into the language of a contract….’”534 525 Id. 526 Id. at 222. 527 Id. (citation omitted) (internal quotation marks omitted). 528 Id. at 223. 529 Id. at 226. 530 130 A.D.3d 438, 13 N.Y.S.3d 375 (2015). 531 Id. at 439–40, 13 N.Y.S.3d at 376 (quoting GoSmile, Inc. v. Levine, 81 A.D.3d 77, 81, 915 N.Y.S.2d 521 (N.Y. App. 2010)). 532 Id. at 439, 13 N.Y.S.3d at 377 (citing J.E. Morgan Knitting Mills v. Reeves Bros., 243 A.D.2d 422, 663 N.Y.S.2d 211 (N.Y. App. 1997)). 533 Id. at 440, 13 N.Y.S.3d at 378. 534 Id. at 441, 13 N.Y.S.3d at 378 (quoting MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 87 A.D.3d 287, 293, 928 N.Y.S.2d 229 (N.Y. App. 2011)). 535 140 N.J. Super. 289, 356 A.2d 56 (1975). 536 Id. at 304, 356 A.2d at 65 (citing United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59, 63 L. Ed. 166 (1918)). 537 Id. at 311, 356 A.2d at 68. 538 325 F.2d 451, 457, 163 Ct. Cl. 339 (Ct. Cl. 1963). 539 Buckley, 140 N.J. Super. at 311, 356 A.2d at 68. 540 Id. at 311, 356 A.2d at 69 (citation omitted). 541 Id. at 312, 356 A.2d at 69. 542 fed. HIGHway admIn., pUblIC–prIvate partnerSHIpS USer GUIdebooK 25 (2007), http://www.fhwa.dot.gov/ipd/ pdfs/ppp_user_guidebook_final_7-7-07.pdf (last accessed Sept. 2, 2016).

46 Two DOTs that responded to the survey stated that design–build contracts have resulted in fewer claims by their department against contractors for a defective plan or design of a highway or other public improvement,551 whereas 12 DOTs stated that design– build contracting had not resulted in fewer claims against contractors for defective plans or designs.552 As for claims by contractors against transporta- tion departments, three DOTs stated that design– build contracts have resulted in fewer claims by contractors against their department for a defective plan or design of a highway or other public improve- ment.553 Nine DOTs said that design–build contract- ing had not resulted in fewer claims.554 As for third-party claims against the depart- ments, one DOT stated that design–build contracts have resulted in fewer claims by third parties (such as motorists) against the department for a defective plan or design.555 Thirteen DOTs reported, however, that there had not been a reduction in such third- party claims.556 As for whether the use of design–build contracts has resulted in fewer claims by third parties against contractors, 1 DOT said that it had,557 but 12 DOTs said that it had not.558 Cases discussed in the digest in Sections VII.C through VII.F hold that design consultants and con- tractors who were responsible for preparing a plan or design may be held liable for breach of contract or warranty or for professional negligence when a trans- portation department or other owner had little or no responsibility for the defective plan or design at issue. In Fru-Con Construction v. United States,559 the court held that the government’s approval of design specifications furnished by a contractor did not limit the use of design–build contracts to public works projects.543 Seventeen DOTs that responded to the survey stated that their department uses the design–build (or similar) method of contracting for the construc- tion of highways or other public improvements.544 Only four DOTs said that they do not.545 Many of the departments that responded to the survey reported either that they had not had many design–build contracts or that they had not had many claims aris- ing out of design–build contracting.546 Some of the risks relating to design responsibilities that are transferred by a design–build contract include negligence in preparing plans, drawings, designs, and specifications; errors involving site surveys, soil test- ing, subsurface conditions, elevations, and grading (subgrade exposures); failure to design a structure in accordance with applicable standards or local building codes; negligence in selecting or recommending build- ing materials; and failure to detect faulty workman- ship on the part of a subcontractor.547 Another risk that is transferred by a design–build contract to the design– builder is the responsibility for design or construction errors committed by subconsultants or subcontrac- tors.548 Furthermore, “[s]ome D/B contractors are willing to guarantee that they will meet material, workmanship, and other performance guarantees for a specified period of time (typically 5 to 20 years) after the project has been delivered.”549 B. Claims Arising Under Design–Build Contracts According to one source, most of the disputes that involve design–build contracts have to do with the scope of a contractor’s work. Disputes also arise, how- ever, regarding a design–builder’s design that affects right-of-way acquisition, utility relocations, replace- ment of affected wetlands or habitat, and remedia- tion of contaminated land or groundwater.550 543 Id. at 30. 544 Arizona DOT, Colorado DOT, Georgia DOT, Indiana DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, Texas DOT, Utah DOT, and Virginia DOT. 545 Alabama DOT, Arkansas Hwy. & Transp. Dep’t, Tennessee DOT, and Wisconsin DOT. Five departments did not respond to the question. 546 See App. E, DOTs’ responses to Question 9. 547 XL Insurance Environmental, Design/Build Liability: Recognizing and Managing Risk (unnumbered) (undated), hereinafter cited as “Design/Build Liability,” http://resources. xlgroup.com/docs/xlenvironmental/library/risk_consulting/ Design_Build%20Liability_%20Recognizing%20and%20 Managing%20Risk.pdf (last accessed Sept. 2, 2016). 548 Id. 549 Brian G. Papernik & Nancy C. Smith, By Design, 22 loS anGeleS lawyer 32, at *34 (1999). 550 Design/Build Liability, supra note 547. 551 Missouri DOT and Virginia DOT. 552 Alabama DOT, Arizona DOT, Georgia DOT, Indiana DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Montana DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, and Utah DOT. Twelve departments did not respond to the question. 553 Missouri DOT, Utah DOT, and Virginia DOT. 554 Alabama DOT, Arizona DOT, Georgia DOT, Indiana DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Pennsylvania DOT, and Texas DOT. Fourteen depart- ments did not respond to the question. 555 Virginia DOT. 556 Alabama DOT, Arizona DOT, Georgia DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, and Wisconsin DOT. Twelve departments did not respond to the question. 557 Virginia DOT. 558 Alabama DOT, Arizona DOT, Georgia DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, and Utah DOT. Thirteen departments did not respond to the question. 559 42 Fed. Cl. 94, 97 (1998).

47 standards was not the cause of the claim or claims.564 The Colorado Department of Transportation advised that the department had not made claims against contractors either for violating the standard of care or for failing to comply with design standards. As stated in Kishwaukee Community Health Services Center v. Hospital Building and Equipment Company,565 [a]rchitects and engineers represent themselves to be com- petent in the preparation of plans and specifications neces- sary to the construction of suitable structures, including but not limited to the knowledge of and compliance with appli- cable building codes, and where they fail to use reasonable care to produce a satisfactory structure in compliance therewith, they may be sued for breach of an implied con- tract term or for negligence.566 In Pittman Construction Company v. New Orleans,567 the court recognized that the term “archi- tect or engineer” implies that the professional “pos- sesses [the] skill and ability…that he will exercise and apply in the given case…without neglect. But the undertaking does not imply or warrant a satis- factory result. It will be enough that any failure shall not be by the fault of the architect.”568 In Pittman, however, the engineering company did not have to prove that its plans and specifications were not defective because the engineering company had based its plans and specifications on soil reports pro- vided by the City that were defective. In Carter v. Deitz,569 the court held that the defen- dant Modjeski & Masters (M&M), a professional engineering firm, was not negligent when it advised against the installation of a median barrier on a bridge because the situation posed several compli- cated issues that required the exercise of profes- sional judgment.570 M&M was a participant in a joint venture retained by the Mississippi River Bridge Authority (MRBA) to conduct bridge safety studies. The case arose in connection with a decision on whether to install a median barrier on the Greater New Orleans Bridge (GNOB), a safety feature that would have virtually eliminated cross-over bridge relieve the contractor of responsibility for defects. The court rejected the contractor’s arguments that the government’s approval constituted an implied warranty that relieved the contractor of responsibil- ity under the contract for the design. The next part of the digest discusses the legal implications of a design consultant’s or contractor’s failure to comply with the required standard of care, exercise professional judgment, or comply with appli- cable standards when planning and designing infra- structure projects. In addition, the next part explains a professional’s duty to exercise due care in relation to other parties working on the same owner’s project, even though the other parties have no privity of con- tract with the design consultant or contractor. XI. FAILURE OF DESIGN CONSULTANTS OR CONTRACTORS TO COMPLY WITH THE REQUIRED STANDARD OF CARE OR TO EXERCISE PROFESSIONAL JUDGMENT A. Claims Caused by Contractors Failing to Comply with the Applicable Standard of Care or with Design Standards Because architects and engineers represent them- selves to be competent in the preparation of plans and designs for the construction of public improve- ments, they may be sued for breach of contract or for negligence when they fail to use reasonable care or fail to comply with applicable standards.560 As noted, four DOTs reported that within the past 5 years, in regard to claims by their department against a contractor for a defective plan or design, a contractor’s failure to comply with the applicable standard of care was the cause of the claim or claims.561 Fourteen departments reported that the basis of a claim against a contractor was not a contractor’s fail- ure to comply with the applicable standard of care.562 Two DOTs said that within the past 5 years, in regard to claims by the department against a con- tractor for a defective plan or design, a contractor’s failure to comply with design standards was the cause of the claim or claims.563 Fifteen DOTs stated that a failure of a contractor to comply with design 560 Kishwaukee Cmty. Health Servs. Center v. Hospital Bldg. and Equip. Co., 988 U.S. Dist. LEXIS 2671, at *19 (N.D. Ill. 1988). 561 Indiana DOT, Louisiana DOTD, Montana DOT, and South Carolina DOT. 562 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Kansas DOT, Kentucky Transp. Cab., Maine DOT, Missouri DOT, Oregon DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, Virginia DOT, and Wisconsin DOT. Nine departments did not respond to the question. 563 Indiana DOT and South Carolina DOT. 564 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, Oregon DOT, Pennsylvania DOT, Tennessee DOT, Texas DOT, Utah DOT, and Virginia DOT. Nine depart- ments did not respond to the question. 565 1988 U.S. Dist. LEXIS 2671, at *1 (N.D. Ill. 1988). 566 Id. at *19 (citation omitted) (internal quotation marks omitted). 567 178 So. 2d 312 (La. App. 1965). 568 Id. at 319 (citation omitted) (internal quotation marks omitted). 569 556 So. 2d 842 (La. App. 1990). 570 Id. at 843.

48 the weighing of social and economic consider- ations.”578 Moreover, without expert testimony that established the standard of skill and care by which M&M was to be judged, “the jury was clearly wrong in finding that M&M was negligent.”579 Finally, MRBA had no duty to the public to modify the bridge to meet current AASHTO standards.580 B. A Professional’s Duty to Exercise Due Care with Respect to Other Project Parties As held in Eastern Steel Constructors, Inc. v. City of Salem,581 a contractor working on the same proj- ect may be a third-party beneficiary of the contract between a design professional and a transportation department and, thus, be able to bring a claim against the design professional for breach of contract or negligence. Eastern Steel Constructors, Inc. (Eastern), sued as a third-party beneficiary to the contract between Kanakanui Associates (Kanakanui), a design professional, and the City of Salem, West Virginia.582 Eastern appealed a trial court’s grant of a summary judgment against it in favor of Kanakanui on Eastern’s claims for profes- sional negligence and breach of Kanakanui’s implied warranty in its plans and specifications. Under the contract, Kanakanui agreed to provide the City with engineering and architectural services to improve Salem’s existing sewer system, including a design for a new sewage treatment plant and two sewer lines to the new plant.583 Kanakanui created plans and specifications to be used to solicit bids from interested construction companies.584 Eastern alleged that after it began construction on one project, it experienced significant delays because of subsurface rock conditions and existing utility service lines that were not disclosed in Kanakanui’s documents.585 The first question for the West Virginia Supreme Court was whether a cause of action existed in West Virginia for a claim “sounding in negligence whereby a construction contractor may recover damages for purely economic losses from a design professional (e.g., architect or engineer) in the absence of a con- tract between the contractor and the design profes- sional.”586 The court held that Eastern could assert a cause of action for negligence against Kanakanui if Eastern could establish that Kanakanui owed a accidents. MRBA decided not to install the safety feature based on the “anticipated adverse socio- economic effects a barrier would have on bridge users and the surrounding communities,” as well as on the joint venture’s recommendation and concurring recommendations of state and federal agencies.571 At trial, a jury found M&M was negligent for hav- ing recommended against the installation of a bar- rier and that M&M was “solitarily liable” for the injuries that the plaintiffs sustained in the bridge accident at issue.572 After M&M appealed the judg- ment for $4,666,666.67, plus interest, the appeals court agreed with M&M that the plaintiffs failed to prove that M&M owed a duty to them to recommend to MRBA that a median barrier be installed or that M&M was negligent “in rendering its professional advice against the installation of the median bar- rier….”573 The court held: The dilemma of whether or not a median barrier should have been installed on the GNOB was a complex, multifac- tor issue and not one with a clear-cut answer. M&M’s rec- ommendations against installing a barrier were, therefore, an exercise of professional judgment. No competent evi- dence adduced at trial suggested their recommendation deviated from requisite professional standards.574 Furthermore, when it opened in 1958, the GNOB had been designed in accordance with prevailing engineering standards in the 1950s. The members of the MRBA were well aware that construc- tion modifications affecting the design and/or operation of the GNOB…had to meet the current standards promul- gated by AASHO, the American Association of State High- way Officials. But if the GNOB remained unaltered, the MRBA owed no duty to the motoring public to modify the bridge to meet present AASHO standards.575 The court agreed that expert testimony in Louisiana and other states is not always necessary to establish negligence by one who performed in a professional capacity such as a civil engineer.576 Expert testimony was required in this case, however, “to establish the standards of skill and care required of civil engi- neers practicing in Louisiana.”577 The court held that the recommendation on whether to install a median barrier on the bridge “constituted an act of engineering judgment [that] involved complex engineering standards as well as 571 Id. 572 Id. 573 Id. 574 Id. at 843–44. 575 Id. at 844–45 (footnote omitted). 576 Id. at 868 (citing Milton J. Womack, Inc. v. The House of Representatives of State of La., 509 So. 2d 62 (La. App. 1st Cir. 1987)). 577 Id. at 869 (citation omitted). 578 Id. 579 Id. 580 Id. at 844. 581 209 W. Va. 392, 549 S.E.2d 266 (2001). 582 Id. at 394, 549 S.E.2d at 268. 583 Id. at 394–95, 549 S.E.2d at 268–69. 584 Id. at 395, 549 S.E.2d at 269. 585 Id. 586 Id. at 396, 549 S.E.2d at 270.

49 Notwithstanding the absence of privity of contract between the contractor and the design professional, an architect, engineer, or other design professional owes a duty of care to a contractor “who has been employed by the same project owner as the design professional and who has relied upon the design professional’s work product in carrying out his or her obligations to the owner, due to the special rela- tionship that exists between the two.”594 A design professional’s duty may be affected by provisions in the other parties’ contract, as well as by professional rules of conduct applicable to his or her profession.595 In West Virginia, when an owner has engaged a design consultant and a contractor to work on the same project in situations such as Eastern’s, there is no requirement of privity of contract for an action against a design professional for breach of an express or implied warranty.596 Even in cases not involving design professionals and contractors in which there was no privity of con- tract, it has been held that there may be a cause of action for negligence. In Diaz Contracting, Inc. v. Lisbon Contractors,597 the plaintiff Diaz Contracting, Inc. (Diaz), brought an action against Lisbon Contractors, Inc. (Lisbon), and Lisbon’s surety General Insurance Company of America for delay damages and other compensation allegedly due under a subcontract between Diaz and Lisbon. In a third-party complaint against Consolidated Rail Corporation (Conrail), Lisbon alleged that Conrail failed to make deliveries promptly. Conrail argued that absent a contract between Lisbon and Conrail, the latter company had no duty to Lisbon. In denying Conrail’s motion for judgment on the pleadings, however, a federal district court in Pennsylvania held that Conrail acknowledged that it did in fact provide materials and services to the project: “By undertaking to, and actually acting in this regard, Conrail assumed a duty to act reasonably under the circumstances: ‘a person who makes an engagement, even though gratuitous, and actually enters upon its perfor- mance, will incur tort liability if his negligence thereafter causes another to suffer damages.’”598 In summary, a design professional may have a duty to exercise due care with respect to other par- ties engaged in working on the same project even when the parties have no privity of contract. The next part of the digest discusses whether a transportation department may be held liable for duty of care to Eastern. The court stated that “the ultimate test of the existence of a duty to use care is found in the foreseeability that harm may result if [due care] is not exercised.”587 Eastern’s claim satis- fied the foreseeability test because when a design professional prepares plans and specifications for an owner of a project, the design professional knows that the plans and specifications “will be relied upon by contractors vying for the project….”588 The court noted numerous cases in which the courts allowed a contractor to sue for the recovery of economic damages for a design professional’s negligence even when there was no contract between the two parties and no physical injury or property damage.589 The court relied, for example, on Donnelly Construction Company v. Oberg/Hunt/Gilleland,590 in which the Arizona Supreme Court held that the absence of a con- tract between a contractor and a designer “did not pre- clude the contractor’s negligence action as privity was not required to maintain an action in tort.”591 Insofar as Eastern’s third-party beneficiary claim, the West Virginia Supreme Court held that because the con- tracting parties knew that Kanakanui’s professional work ultimately would be relied on by a contractor building the project, it was clear that the contract was for the benefit of the contracting parties.592 Design professionals have a duty to use ordinary skill, care, and diligence in rendering their professional services…. When they are called upon to provide plans and specifica- tions for a particular job, they must use their skill and care to provide plans and specifications which are sufficient and adequate. …This duty extends to those with whom the design professional is in privity…and to those with whom he or she is not….593 587 Id. at 396–97, 549 S.E.2d at 270–71 (citation omitted) (internal quotation marks omitted). 588 Id. at 402–03, 549 S.E.2d at 276–77. 589 Id. at 398, 549 S.E.2d at 272. See Tommy L. Griffin Plumbing & Heating Co. v. Jordon, Jones & Goulding, Inc., 320 S.C. 49, 463 S.E.2d 85 (1995) (holding that when there is no contract between the parties, a cause of action in tort may lie when there is a special relationship between the alleged tortfeasor and the injured party, and that an engi- neer owes a duty to a contractor not to design or supervise a project negligently); Guardian Construction Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1381 (Del. Super. Ct. 1990) (holding that contractor’s negligence claim was cogni- zable against a design engineer for miscalculations that caused additional labor and equipment costs and lost prof- its); and Donnelly Construction Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 677 P.2d 1292 (1984) (holding that privity of contract did not preclude contractor’s negligence action against a design professional). 590 139 Ariz. 184, 677 P.2d 1292 (1984). 591 Eastern Steel Constructors, Inc., 209 W. Va. at 400, 549 S.E.2d at 274. 592 Id. at 404, 549 S.E.2d at 278. 593 Id. at 400, 549 S.E.2d at 274 (quoting Donnelly, 139 Ariz. at 187, 677 P.2d at 1295) (internal quotation marks omitted). 594 Id. at 401, 549 S.E.2d at 275. 595 Id. 596 Id. at 402, 549 S.E.2d at 276 (quoting Dawson v. Canteen Corp., 158 W. Va. 516, 212 S.E.2d 82 (1975)). 597 1991 U.S. Dist. Lexis 4604, at *1 (E.D. Pa. 1991). 598 Id. at *5 (citations omitted).

50 neither had a plausible claim of a protected property interest nor a “cognizable liberty interest” in KDOT’s action.606 The appeals court held that KDOT did not violate any Martin Marietta rights of procedural due process, nor had the DOT made any defamatory statements about the company. A case of interest, although not concerning a DOT’s decision to place an item on or to remove one from an approved products list, is Eastside Sand & Gravel, Inc. v. AAA Monroe Rock Corp.,607 which involved crushed rock and an implied warranty. The plaintiff Eastside Sand and Gravel, Inc. (Eastside), purchased crushed rock from AAA Mon- roe Rock Corp. (AAA) to construct two roads that did not meet state specifications. Both roads failed because the rock disintegrated.608 The Washington Court of Appeals rejected AAA’s argument that an implied warranty was excluded under Revised Code of Washington Section 62A.2-316(3)(b) because Eastside failed to inspect or test the crushed rock.609 The court stated that [t]o establish that the implied warranty of merchantability was excluded by examination, the seller must prove the buyer actually examined the goods (or a sample or model) before the contract was made. Alternatively, the seller must prove [that] the buyer refused to examine the goods after a demand by the seller[] and [that] an examination would have revealed a defect.610 The court held that the defendant AAA breached an implied warranty of merchantability.611 There was no evidence that Eastside conducted an examination of the rock or that AAA demanded that Eastside exam- ine the rock prior to the formation of the contract.612 B. Transportation Departments’ Immunity for Decisions Regarding the Inclusion of Items on an Approved Products List As discussed in Section III, transportation agen- cies generally have immunity for their policy deci- sions that involve the exercise of discretion. As a consequence, it appears that transportation depart- ments have immunity for decisions to place an item on or to remove an item from an approved list.613 placing an item on or removing an item from an approved products list, as well as the potential lia- bility of suppliers and vendors of defective appli- ances or products under the False Claims Act. XII. LIABILITY FOR DECISIONS REGARDING THE INCLUSION OF ITEMS ON AN APPROVED PRODUCTS LIST OR LIABILITY FOR APPROVED BUT DEFECTIVE SAFETY APPLIANCES A. Claims Arising Out of Placing an Item on or Removing an Item from an Approved Products List Transportation departments are interested in whether they have any potential liability for placing an item on or removing an item from an approved products list. Six DOTs that responded to the survey stated that within the past 5 years, the department has received a claim for its decision to place an item on or remove an item from an approved list of prod- ucts for use in the construction of highways or other improvements.599 Fourteen DOTs said, however, that they had not had any claims in that regard.600 The Kansas Department of Transportation (KDOT) reported that it has removed certain aggre- gate sources from its prequalified list for on-grade concrete pavement, and that one supplier of such aggregate challenged the DOT in federal court for its decision.601 The department stated that it had also removed an epoxy for pavement markings from its prequalified list. In fact, Martin Marietta Materials, Inc. v. Kansas DOT602 resulted from KDOT’s removal of two Martin Marietta quarries from the DOT’s preapproved list of suppliers of limestone aggregate.603 Martin Marietta’s appeal of the dismissal of its action by a district court argued that KDOT violated the com- pany’s right to due process under the Fourteenth Amendment to the Constitution.604 The Tenth Circuit held that for a plaintiff to state a claim for the denial of a right to due process, the plaintiff must demon- strate that it has a constitutionally protected prop- erty or liberty interest.605 Martin Marietta, however, 599 Indiana DOT, Kansas DOT, Tennessee DOT, Texas DOT, Virginia DOT, and Wisconsin DOT. 600 Alabama DOT, Arizona DOT, Arkansas Hwy. & Transp. Dep’t, Colorado DOT, Georgia DOT, Kentucky Transp. Cab., Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, and Utah DOT. Six departments did not respond to the question. 601 Martin Marietta Materials, Inc. v. Kansas DOT, 810 F.3d 1161 (10th Cir. 2016). 602 Id. 603 Id. at 1165. 604 Id. at 1171–72. 605 Id. at 1186. 606 Id. 607 1999 Wash. App. LEXIS 1560 (Wash. Ct. App. 1999). 608 Id. at *1. 609 Id. at *5 (footnote omitted). 610 Id. at *6 (footnotes omitted). 611 Id. at *1. 612 Id. at *6. 613 See, e.g., Martinez v. County of Ventura, 225 Cal. App. 4th 364, 373, 169 Cal. Rptr. 3d 880, 886 (2014) (hold- ing that there was no design immunity under Cal. Gov’t Code § 830.6 because there was no evidence that the top- hat drain design at issue was ever approved).

51 An example of a controversy concerning a defec- tive safety appliance is the guardrail manufactured by Trinity Highway Products (Trinity), a subdivi- sion of Trinity Industries in Dallas, Texas.622 Trinity manufactured a guardrail end known as the ET- Plus® that was sold both domestically and abroad.623 FHWA initially approved the ET-Plus in 2000 and then again in 2005 when an updated version was created.624 FHWA may approve a product after veri- fying that the product was crash-tested according to AASHTO standards.625 Once approved by FHWA, state transportation agencies may be reimbursed when they use the product in their construction projects.626 Trinity decided to change the ET-Plus in 2005 to make it less expensive by reducing the width of the extruder head by an inch.627 Trinity allegedly was untruthful in regard to the alteration of its guardrail in 2005.628 For example, in 2006 Trinity informed the State of Vermont that the ET-Plus was identical to the product that already had been approved by FHWA and the Vermont Agency of Transportation.629 According to one source, 42 states no longer use the ET-Plus, and Trinity has had to pay the federal government approximately $175 million for fraud.630 Moreover, in an accident in Virginia, a woman suf- fered multiple fractures and her child received brain and pelvic injuries.631 In South Carolina a man’s legs were amputated after hitting a guardrail end,632 and An Alabama case in 2000, Ex parte Alabama Department of Transportation,614 involved a decision by the Alabama Department of Transportation (ALDOT) to revise its specifications for a product that had been on its list of approved products. Because of pavement failures, in May 1996 ALDOT’s Materials and Tests Bureau recommended a more stringent gravel-absorption level. ALDOT amended its standards and specifications on the use of gravel in hot-asphalt mixes for roads and bridge super- structures. The amended standards and specifica- tions adversely affected the market for chert gravel, however, causing Blue Ridge Sand and Gravel, Inc. (Blue Ridge), to sustain losses. After March 1996, ALDOT published an Approved Source List that contained an amendment that allowed the use of chert gravel in hot-mix asphalt if the gravel were crushed to the specified size.615 In March 1997 ALDOT adopted new specifications that eliminated chert gravel from hot-asphalt mixes on state high- way projects.616 Blue Ridge sued ALDOT and certain named offi- cers and employees for intentional interference with a business or contractual relationship, intentional misrepresentation, suppression, and civil conspir- acy.617 The court held, first, however, that ALDOT and its officers and employees had immunity under Article 1, Section 14 of the Alabama Constitution.618 Indeed, Blue Ridge conceded that the individual defendants were engaged in the performance of dis- cretionary duties when deciding on new specifica- tions.619 Second, the court held that the officers and employees of ALDOT had not engaged in conduct that was fraudulent, willful, or malicious or that was in bad faith in regard to Blue Ridge.620 C. Liability for Approved but Defective Safety Appliances Transportation departments also have some concern about potential liability for incorporating a defective product or appliance in the plan or design of a project. No DOT that replied to the survey, however, stated that within the past 5 years its department had made a claim against a contractor for using an allegedly defective safety appliance or other product in a plan or design of a highway or other improvement.621 614 764 So. 2d 1263 (Ala. 2000). 615 Id. at 1267. 616 Id. at 1268. 617 Id. at 1265–66. 618 Id. at 1268. 619 Id. 620 Id. at 1269–72. 621 See App. E, DOTs’ responses to Question 10(c). 622 See App. E, Tennessee DOT’s and Virginia DOT’s responses to Question 12(c). 623 Daniel J. Goldstein, Guardrail Design Raises Con- cerns, Consortium news.com (Feb. 6, 2013), hereinafter referred to as “Goldstein,” https://consortiumnews.com/ 2013/02/06/guardrail-design-raises-concerns/ (last accessed Sept. 2, 2016). 624 Id. 625 WPRI, Guardrail Dangers: Real Life Cases, WPRI. com, hereinafter referred to as “WPRI,” http://wpri.com/ target-12-guardrail-dangers/guardrail-dangers-real-life- cases/. 626 Goldstein, supra note 623. 627 Id. 628 Nick Ochsner, Guardrail Crash Test Failed, Engi- neering Expert Says, USA TODAY (Feb. 6, 2015), hereinaf- ter referred to as “Ochsner,” http://www.usatoday.comstory/ news/nation/2015/02/06/highway-guardrail-problems/ 23003749/. 629 Danielle Ivory & Aaron M. Kessler, Guardrail Maker Trinity Industries Liable for Fraud in Texas, N.Y. tImeS (Oct. 21, 2014), hereinafter referred to as “Ivory & Kessler,” http://www.nytimes.com/2014/10/21/business/jury-says- trinity-industries-a-highway-guardrail-maker-defrauded- us.html (last accessed Sept. 2, 2016). 630 Ochsner, supra note 628. 631 WPRI, supra note 625. 632 Id.

52 and to be eligible for federal-aid reimbursement for their roadside safety hardware products.”640 D. Claims Against Suppliers and Vendors Under the FCA United States ex rel. Harman v. Trinity Industries, Inc., supra, illustrates how suppliers and vendors of safety appliances and other products certified for use on federal-aid highway projects could be subject to claims under the FCA. As stated by the court in Harman, under the FCA, “liability attaches to each ‘claim’ that meets the requirements of the Act—any ‘request or demand…for money or property’ that makes its way to the public treasury.”641 The court in Harman held that both the pre-2010 and post-2010 versions of the FCA applied to Harman’s allegations.642 To state a claim under the FCA, Harman had to allege (1) that Defendants made or, by record or statement, caused to be made a claim for payment against the govern- ment; (2) that the claim, record, or statement was materially false or fraudulent; and (3) that the false or fraudulent claim, record, or statement was made knowingly by Defendants.643 The court rejected Trinity’s claim that Harman had not alleged a false claim for payment: In fact…Harman alleges…“every time Trinity sold the ET- Plus after the 2005 modifications, it necessarily provided a false certification that ET-Plus conformed to the unit that had been approved by the FHWA. …Since 2005, thousands of dangerous and unapproved ET-Plus heads have been passed off by Trinity as approved by the FHWA and eligible for federal reimbursement to purchasers, state authorities, and, ultimately, the federal government.644 Furthermore, “a claim is necessarily false when it involves a knowingly false certification of compli- ance with a statute or regulation and that certifica- tion is a prerequisite to payment of the asserted claim.”645 Only false claims for payment prior to March 5, 2006, were barred by the FCA’s 6-year another man’s leg was amputated in Florida.633 A Canadian city is reportedly suing Trinity for $500 million, and cities in Wisconsin and Illinois have filed class-action lawsuits against Trinity.634 In 2014, in United States ex rel. Harman v. Trinity Industries, Inc.,635 a federal district court in Texas denied a defense motion to dismiss a claim brought under the Federal False Claims Act (FCA) against Trinity Industries, Inc., and Trinity Highway Prod- ucts, LLC. The court ruled that Trinity did not notify FHWA of the change to the guardrail and did not test the modified ET-Plus guardrail according to FHWA protocols.636 The modified ET-Plus resulted in a more dangerous product because upon impact, the new ET-Plus would “bend back on itself, forming a spear that was capable of slicing through an engine block and impaling drivers and passengers,” causing death or injury, including amputation.637 An inde- pendent auto safety expert stated that a guardrail design is faulty anytime a guardrail penetrates the interior of a vehicle.638 When struck, an ET-Plus was supposed to “absorb[] the impact of a vehicle and guid[e] the railing out of [the vehicle’s] path.”639 Following the Texas court’s decision that the Trinity companies violated the FCA, FHWA notified the companies that the agency was considering suspen- sion and debarment proceedings against them and asked the companies to explain why they should not be suspended from doing business with the United States. In June 2016 FHWA announced that it had entered into an agreement with the companies pur- suant to which the companies will undertake a range of actions to improve and enhance roadway safety. As long as the companies comply with the terms of the agreement, “the Trinity companies will continue to be eligible to enter into federal contracts 633 Goldstein, supra note 623. 634 Cindy Galli, Canadian City Sues U.S. Guardrail Maker for $500 Million, ABC newS (Feb. 27, 2015), http:// abcnews.go.com/International/canadian-city-sues-us- guardrail-maker-500-million/story?id=29275777. Two cases brought by motorists against Trinity in federal court were located. Evans v. Trinity Indus., 137 F. Supp. 3d 877 (E.D. Va. 2015) (denying defendants’ Rule 12(c) motions), recon- sideration denied, 2015 U.S. Dist. LEXIS 164731, at *1 (E.D. Va., Nov. 25, 2015) and Pike v. Trinity Indus., 34 F. Supp. 3d 1193 (M.D. Fla. 2014) (stating that the plaintiff failed to pursue his claim against the Florida DOT for negligence and failed to pursue his design-defect claim against Trinity and granting Trinity’s motion for sum- mary judgment on the plaintiff ’s claim for failure to warn). 635 2014 U.S. Dist. Lexis 973, at *1 (E.D. Tex. 2014). 636 Id. at *4. 637 Goldstein, supra note 623. 638 Id. 639 Ivory & Kessler, supra note 629. 640 fed. HIGHway admIn, Briefing Room, FHWA Announces Monitoring Agreement with Trinity (June 10, 2016) (also setting forth the terms of the settlement), http://www.fhwa. dot.gov/pressroom/monitoringagreement.cfm (last accessed Sept. 2, 2016). See also FHWA Review of ET-Plus, FHWA’s Safety Strategy Regarding Et-Plus Guardrail End Termi- nals (Jan. 6, 2016) (http://www.fhwa.dot.gov/guardrailsafety/ (last accessed Sept. 2, 2016)). 641 United States ex rel. Harman, 2014 U.S. Dist. Lexis 973, at *7 (quoting 31 U.S.C. § 3729(b)(2)). 642 Id. at *8–16. 643 Id. at *19 (citation omitted). 644 Id. at *20–21 (citation omitted) (internal quotation marks omitted). 645 Id. at *21 (citation omitted) (internal quotation marks omitted).

53 [C]onsultant firms generally are required to have several forms of insurance when performing project design for state agencies, including General Liability (which may cover subsequent fail- ure of the facility being designed, among other mishaps) and Errors and Omissions [E&O] coverage…. More than 80 per- cent of agencies require professional liability (E&O) insurance coverage, although the amount of coverage varies, often depending on the type and size of project (which is a practice recommended by the Guide). While minimum coverage starts at $250,000, almost 60 percent of the states that require E&O insurance specify a standard coverage of at least $1,000,000.652 AASHTO recommends that errors and omissions insurance remain in effect during the project, plus a “reasonable” time after its completion.653 Florida’s Standard Professional Services Agreement terms set forth the requirements for professional liability insurance to cover services that are to be provided under an agreement with FDOT.654 A con- sultant in Florida is also required to have during the term of any agreement with the department a pro- fessional liability insurance policy (or an irrevocable letter of credit as required by Florida Statutes, Chapter 675 and Section 337.106) with a company authorized to do business in Florida that covers the professional services that are to be rendered under and in the amount specified in the agreement.655 In addition, reportedly some state DOTs have their own E&O policies; however, some do not.656 B. Insurer’s Obligation to Defend and Indemnify When an insured has an insurance policy cover- ing claims for design E&O, the insurer has an obli- gation to defend and indemnify its insured for claims that arise out of design E&O, but the duty to defend is broader than the duty to indemnify. Cincinnati Insurance Co. v. Missouri Highways and Transportation Commission657 involved an insurance coverage issue that arose after a danger- ous and defective condition on Interstate 29, namely an “edge drop-off and rutting on the shoulder,” caused a single-car accident.658 The Cincinnati Insurance Company (Cincinnati) refused to defend and later refused to indemnify the Missouri Highways and Transportation Commission (MHTC) under an insurance policy that Cincinnati had issued to Norris Asphalt Paving Company (Norris), MHTC’s contrac- tor.659 Norris, together with its subcontractors, had statute of limitations because “each false claim for payment constitutes a separate violation of the FCA.”646 The court denied the Trinity defendants’ motion to dismiss except as to those claims that accrued prior to March 6, 2006. The final part of the digest discusses insurance that transportation departments require design consultants and contractors to have to cover costs and damages resulting from a defective plan or design, as well as insurance that they require of design–build contractors. XIII. INSURANCE FOR COSTS OR DAMAGES CAUSED BY PLAN OR DESIGN ERRORS A. Insurance and Coverage Requirements In their responses to the survey, 17 DOTs stated that for contracts for the plan or design of a highway or other improvement, their department requires a contractor to have insurance that covers plan or design errors and omissions committed by the con- tractor, its agents, employees, and/or subcontrac- tors.647 Two departments reported that they do not.648 Several of the DOTs provided additional information on the type of policy or policies, the amount of coverage, how their department verifies that a contractor has the required insurance, and a link to or a copy of a typical policy.649 For example, the Missouri Department of Transportation (MoDOT) stated that it requires [l]iability insurance that meets Missouri Sovereign Immu- nity Limits. Often contractors will purchase higher limits but that is for their own protection not MoDOT’s. The Sov- ereign Immunity limits change annually due to a Consumer Index elevation. For 2016 it is $410,185 per person. MoDOT will also often require the contractor’s insurance to cover not only their negligence but also MoDOT’s.650 According to a 2003 U.S. Department of Transportation Inspector General’s audit, state DOTs have policies and procedures to recover for the cost of design consultants’ design errors or omissions; how- ever, “[l]ess than 40% of states have recovered costs that are due to design errors and omissions.”651 646 Id. at *23 (citing 31 U.S.C. § 3731(b)). 647 Colorado DOT, Georgia DOT, Indiana DOT, Kansas DOT, Kentucky Transp. Cab., Louisiana DOTD, Maine DOT, Missouri DOT, Montana DOT, New Mexico DOT, Oregon DOT, Pennsylvania DOT, South Carolina DOT, Tennessee DOT, Texas DOT, Utah DOT, and Wisconsin DOT. 648 Alabama DOT and Arkansas Hwy. & Transp. Dept. Seven departments did not respond to the question. 649 See App. E, DOTs’ responses to Question 11(a). 650 See App. E, Missouri DOT’s response to Question 11(a). 651 Design Errors and Omissions Report, supra note 1, at 12. 652 Id. at 15. 653 Id. 654 Florida Standard Professional Services Agreement terms, supra note 336, at A2, ¶ 4(B). 655 Id. 656 Design Errors and Omissions Report, supra note 1, at 14. 657 2014 U.S. Dist. LEXIS 128394, at *1 (W.D. Mo. 2014). 658 Id. at *3–4. 659 Id. at *4.

54 defend “is not dependent on the probable liability to pay based on the facts ascertained through trial.”667 Third, “[t]he duty to defend is determined by com- paring the language of the insurance policy with the allegations in the complaint. If the complaint merely alleges facts that give rise to a claim potentially within the policy’s coverage, the insurer has a duty to defend.”668 The court rejected the insurer’s argument that the amended petitions did not show a potentially covered claim simply because the petitions did not allege that Norris had performed any work in the area of the accident or actually had caused the defec- tive condition.669 Under Missouri insurance law, there only needs to be “a simple causal relationship” between the insured’s actions and an injury, in con- trast to the strict “direct and proximate cause stan- dard of general tort law.”670 The court held that the record did not show that when the action began that there was no possibility that Norris’s or its subcontractors’ actions “caused or contributed to the creation of the allegedly defec- tive condition.”671 Moreover, an insurer may not refuse to provide a defense when the petition states a potentially covered claim, even though “the insured’s tender did not identify the correct theory under which coverage was implicated.”672 As a conse- quence, it was appropriate for MHTC to limit its potential liability by entering into the aforemen- tioned agreement sanctioned by Missouri Revised Statutes Section 537.065.673 Nevertheless, it was not clear whether Norris was aware or should have been aware of the dangerous condition.674 It was not clear whether the judgment against MHTC was covered by Cincinnati’s insur- ance policy.675 Summary judgment was precluded because the evidence did not answer the question of whether Cincinnati had to indemnify MHTC. C. Insurance and Design–Build Contracts Transportation departments that responded to the survey and that use design–build contracting described the type of insurance that they require and provided other information.676 For instance, the performed certain repairs and resurfacing work that included the site of the accident. After MHTC’s coun- sel tendered the defense of the lawsuit to Norris, an amended complaint named Norris as a defendant. MHTC eventually discovered that Cincinnati was Norris’s insurance carrier under its commercial, occurrence-based, general liability policy that cov- ered the work under Norris’s contract with MHTC. Because Cincinnati disputed the claim that Norris had begun work at the accident location as of the time of the accident, the insurer denied that the Norris policy covered the claim against Norris.660 Pursuant to Missouri Revised Statutes Section 537.065, MHTC entered into an agreement with the plaintiffs in the accident case. The agreement “included a recitation of facts regarding Norris’s con- tract with MHTC, the insurance policy issued by Cincinnati, the subject accident, Norris’s work on I-29, and Cincinnati’s denial of MHTC’s tender” and “stipulated that Norris had begun performing con- struction on and was in control of the relevant por- tion of I-29 when the accident occurred.”661 Because of Cincinnati’s position, MHTC entered into an agreement to limit its exposure with regard to “the payment of damages on Plaintiffs’ claims only to that amount payable under the Cincinnati Insurance Company policy and other limited assets of MHTC.”662 Thereafter, the trial court rendered judgment against MHTC for a dangerous and defective condi- tion of the highway that caused the vehicle roll- over.663 Furthermore, the court found that “[w]ithin 10–11 days prior to the subject rollover, the specific area of the rollover had been turned over to the con- trol of Norris Asphalt and its subcontractors. During that period of time, repairs and reconstruction had in fact taken place on the inside lane at the specific location of the rollover.”664 The court set forth several key principles appli- cable to the issue of coverage. First, “[t]he duty to defend is broader than the duty to indemnify. To suggest that the insured must prove the insurer’s obligation to pay before the insurer is required to provide a defense would make the duty to defend provision a hollow promise….”665 Second, the duty to defend arises whenever “there is a potential or pos- sible liability to pay based on the facts at the outset of the case….”666 It is important that the duty to 660 Id. at *19–20. 661 Id. at *22. 662 Id. at *23 (internal quotation marks omitted). 663 Id. at *24. 664 Id. at *25. 665 Id. at *31 (citations omitted) (internal quotation marks omitted). 666 Id. 667 Id. 668 Id. 669 Id. at *33. 670 Id. 671 Id. at *42. 672 Id. at *44. 673 Id. at *46. 674 Id. at *54. 675 Id. at *47. 676 See App. E, DOTs’ responses to Question 11(b).

55 Arizona Department of Transportation provided a document entitled “Design-Build Package” that is included in Appendix F.677 Some transportation agencies have implemented Owner-Controlled Insurance Programs (OCIP) that also apply to design–build projects, with some OCIPs including E&O coverage.678 An OCIP may cover the owner, designer, construction manager, contractors, and consultants in one policy.679 Some of the reasons to implement an OCIP are to enable a safer job site and lower the cost of construction.680 The Arizona Safety Incentive Program OCIP provides: The Design–Builder shall work with the Owner and the Owner Controlled Insurance Program (hereafter referred to as OCIP) Safety Team and participate in all required plan- ning and review meetings. The OCIP Safety Team members will be: the Owner’s Loss Prevention Representative, the Design-Builder’s Safety Coordinator, the OCIP insurance carrier loss control representative(s), the broker risk control consultant, and others identified by the Owner. The OCIP Safety Team shall work with the Design–Builder to prepare announcements to publicize the incentive program activi- ties and results.681 The Utah Department of Transportation (UDOT) has implemented OCIP “to furnish certain insur- ance coverage as respects on-site project activities… for the benefit of UDOT and its enrolled Contractors and Subcontractors of all tiers (unless specifically excluded) who have on-site employees.”682 XIV. CONCLUSION With respect to tort claims against transporta- tion departments, the threshold, potentially disposi- tive question may be whether the State has waived the department’s immunity for the precise claim being asserted against the department. Even if a State has waived its immunity for certain claims, however, a transportation department may still have immunity when a claim arises out of its exer- cise of discretion, such as in the planning or design of highways and other projects. At least 34 states have tort claims acts or similar legislation with a discretionary function exemption that immunizes transportation departments from claims involving their exercise of discretion. Indeed, whether by stat- ute or at common law, if there is one area of highway development activity that is largely protected from negligence claims, it is highway design. At least 18 states have specific plan- or design- immunity statutes. Although the statutes vary, a transportation department typically has immunity for the plan or design of a public improvement when the plan or design was approved in the manner required by the statute and/or complies with previ- ously approved or prevailing design standards. Under the California statute, however, a court must find that there is “substantial evidence” supporting the reasonableness of the decision to approve a plan or design or to approve the standards applicable to a plan or design. There is some conflicting authority on whether immunity may be lost because of changed conditions that have resulted in a dangerous condi- tion of public property that causes an injury. It appears, however, that it is more likely that liability will ensue when a department has or should have knowledge of a hazardous condition but fails to pro- vide reasonably adequate warning of the danger. The issue has also arisen as to whether a govern- ment contractor, when sued for a defective plan or design, may claim sovereign or governmental immu- nity as a transportation department is able to assert. Only one department that responded to the survey reported that in its state a contractor under certain conditions may claim government immunity. There are, however, some federal and state judicial prece- dents holding that when a contractor follows “reasonably precise” specifications provided by the government, even if the plan or design is defective, the contractor has immunity from third-party claims. On the other hand, when a contractor has some dis- cretion in planning, designing, or implementing a plan or design, the contractor may be unable to claim immunity. Design consultants and contractors may be held liable to motorists and other third parties for 677 See App. F. 678 Design/Build Liability, supra note 547. 679 Insurance for a typical OCIP includes the following coverages: general liability insurance; workers’ compensa- tion and employer’s liability insurance; builder’s risk insur- ance, including coverage for property in transit and property stored off site; and umbrella or excess liability insurance. “If the project is design–build, professional liability insurance could be included in the OCIP.” owner Controlled InSUranCe proGramS 1–2 (NCHRP Synthesis 308, Transportation Research Board, National Academies of Science, Engineer- ing, and Medicine, 2003), http://onlinepubs.trb.org/online pubs/nchrp/nchrp_syn_308.pdf (last accessed Sept. 2016). 680 Id. at 1. 681 Id. at 103 (App. G). 682 General Conditions for UDOT Owner Controlled Insurance Program, ¶ 9.1, at 3 (Feb. 9, 2010) (http://www. udot.utah.gov/main//uconowner.gf?n=5475330099586255 (last accessed Sept. 2, 2016)). The OCIP will minimally provide workers’ com- pensation, employer’s liability, general liability, con- tractors pollution liability, railroad protective (as required), excess liability and builders risk for all eli- gible Contractors of every tier enrolled in the OCIP and performing work at the project site. UDOT agrees to pay all premiums associated with the OCIP includ- ing deductibles or self-insured retentions unless oth- erwise stated in the contract documents. Id. ¶ 1, at 1.