In rejecting the government's arguments, Judge Duval accepted the plaintiffs assertions that "Ignoring safety and poor engineering are not policy," and that ignoring safety and indulging poor engineering were precisely what the Corps of Engineers had done. So there was no immunity from liability for negligence. "While the Corps maintains that all of its decisions were policy driven, when those decisions concern safety and engineering, this exception is not an absolute shield." (Slip op. p. 102.) They were not a shield here, where the Corps' actions were negligent, and where it had known that various corrective actions would be necessary, yet it had ignored this.
It was not permissible, ruled Judge Duval for the discretion exception to be used, as the Corps used it (and as the SEC is using it), --to open the door to ex post rationalization by the Government.'" Having been guilty of "engineering blunders," "the Corps cannot mask these failures with the cloak of "policy.'" A danger that will inevitably be created "cannot be ignored, and the safety of an entire metropolitan area cannot be compromised." "Congress would never have meant to protect this kind of nonfeasance on the part of the very agency that is tasked with the protection of life and property." (Id. at 111 (emphases added).)
Rather, what is protected, said Judge Duval via a quote from a leading Supreme Court case, are --only governmental actions and decisions based on considerations of public policy,'" only actions --grounded in the social, economic, or political goals of the statute.'" (Id., p. 113 (first emphasis in original, second emphasis added.) Though --every inspection and maintenance decision can be couched in terms of policy choices based on allocation of limited resources,'" this is not permissible lest the exception from liability for discretionary policy judgments be read too broadly. ""Cleaning up mold involves professional and scientific judgment . . . [and the crux of our holdings is that a failure to adhere to accepted professional standards is not susceptible to a policy analysis,'" i.e, cannot be immunized as an exercise of protected discretion. (Id., p. 116, emphasis added.)
More than enough said. The Katrina decision makes clear that there should be no immunity for the government in the Madoff and Stanford cases on the ground that the SEC's horrible negligence in the two cases was an exercise of permissible discretion in accordance with the antifraud policy of the securities laws. As in the Katrina case, the government violated professional standards. As well, instead of protecting citizens as it was supposed to do under the statutory policy, the SEC opened the door to terrible injury to untold numbers of citizens. The government's argument would vitiate the FTCA's waiver of sovereign immunity in negligence cases because every investigatory and prosecutorial action and decision of the SEC, no matter how abysmal and negligent, would be turned into an exercise of permissible discretion. The SEC's negligent actions were not the kind of actions Congress intended to protect -- they were the exact opposite (as further shown, I note, by the furious Congressional outcry against the SEC when its misconduct regarding the disastrous Ponzi schemes came to light). And the government's arguments are merely ex post putative rationalizations to try to escape liability for a degree of negligence that boggles the mind.
TO BE CONTINUED.
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