The plaintiff, a former Sergeant in the United States Army, was sent to Iraq as part of Operation Iraqi Freedom.  Bootay v. KBR, Inc., No. 10-4028, (3d Cir. July 13, 2011).  In April 2003, the plaintiff helped to secure the Baghdad Airport.  After that, he was sent to the Qarmat Ali Water Treatment Plant (“Qarmat Ali”).  He was there for four days, during which time he saw an orange powder throughout the plant.  Subsequently, he came to believe that the powder was sodium dichromate.  Before Operation Iraqi Freedom began, Iraqi workers regularly used sodium dichromate at Qarmat Ali.

Prior to the coalition forces going into Iraq, the United States Army Corps of Engineers (“ACE”) issued a contract to Kellogg Brown & Root Services (“KBR Services”) and KBR Technical Services, Inc. (“KB Technical”) (collectively, “KBR”).  Under the contract, KBR was to restore Iraq’s oil operations as soon as possible.  Pursuant to the contract, KBR was to begin its work at oil facilities once it was notified by the military that “benign conditions” were present, which the contract defined to mean once it had been cleared of enemy troops, mines, environmental hazards, and other dangerous conditions.  Because Qarmat Ali supplied water to support oil extraction, refurbishment of the facility was part of KBR’s contractual obligations.

The plaintiff was honorably discharged from the Army in September 2003.  Several years thereafter, he began to experience health problems and ultimately became totally disabled.  He claimed that his health problems were caused by exposure to sodium dichromate at Qarmat Ali.  On September 11, 2009, the plaintiff filed suit against KBR, KBR, Inc. (“KBRI”), Overseas Administrative Services, Ltd. (“Overseas”), and Service Employees International, Inc. (“SEII”) in the United States District Court for the Western District of Pennsylvania.  His main theory was that the defendants should be held liable for his injuries because they failed to warn him about the consequences of his being exposed to sodium dichromate.

The District Court dismissed KBRI, Overseas, and SEII (collectively “Jurisdictional Appellees”) because of the absence of personal jurisdiction over them.  The court also granted KBR’s motion to dismiss because the plaintiff’s complaint was not timely filed, but it allowed the plaintiff to filed an amended complaint.  The plaintiff did so, and the District Court again dismissed the Jurisdictional Appellees on jurisdictional grounds because the plaintiff could not prove that they were alter egos of KBR.  Further, the court denied KBR’s motion to dismiss on statute of limitations grounds, but granted KBR’s motion to dismiss the plaintiff’s complaint because it failed to state a claim upon which relief could be granted.  The Third Circuit affirmed.

On appeal, the plaintiff argued that the Jurisdictional Appellees were alter egos of the parent holding company, KBRI, and that because there was jurisdiction over KBR Services, that jurisdiction should be imputed to the parent.  The Third Circuit rejected the plaintiff’s arguments, ruling that he had not satisfied the elements required to pierce the corporate veil.

Turning to the merits of the plaintiff’s complaint, the Third Circuit noted that the plaintiff had presented negligence, breach of contract, fraudulent misrepresentation, and intentional infliction of emotional distress claims.  Addressing each of the claims in turn, the court first reviewed Pennsylvania negligence law.  In addition to relying upon general negligence principles in claiming that KBR should have warned him about the dangers of sodium dichromate, the plaintiff also relied upon Section 324A of the Restatement (Second) of Torts.  The court stated that Section 324A provided that a contracting party, like KBR, could be held liable to a stranger to the contract, like the plaintiff, for a negligent failure to warn if the contracting party undertook the responsibility of making a warning.  The Third Circuit determined that the plaintiff’s reliance on that Section was misplaced because “[t]here is nothing in the amended complaint that would support an inference that KBR undertook such a responsibility.”

Next, the court reviewed the plaintiff’s argument that he was a third-party beneficiary under KBR’s contract with ACE to restore oil production in Iraq.  The Third Circuit ruled that the plaintiff could not recover on that theory under Pennsylvania law because the intent of KBR’s contract was to restore Iraq’s oil production and there was nothing in the contract to indicate that an individual solider like the plaintiff would benefit from the contract.

As to plaintiff’s fraud/deceit/fraudulent concealment count, in which he claimed that KBR knew or should have known about the hazardous conditions at Qarmat Ali in March 2003 and should have disclosed it to the military before July 2003, the court stressed that the plaintiff failed to allege that KBR made any misrepresentation directly to him.  Moreover, the court explained that “there is no allegation that KBR even had knowledge that [the plaintiff] had been to Qarmat Ali.  Allegations that KBR misled the military, and in turn he was misled, are insufficient.”  Similarly, the Third Circuit rejected the plaintiff’s intentional infliction of emotional distress theory because KBR’s alleged conduct was not directed at him and because such a claim could not be based on an alleged failure to warn.  Finally, the Third Circuit affirmed various other procedural rulings that the District Court made that led to the dismissal of the plaintiff’s complaint.