Court rejects Iraq convoy drivers' suit against KBR

NEW ORLEANS (Reuters)—A federal appeals court on Thursday rejected a lawsuit brought against KBR Inc. and Halliburton Co. by the families of two convoy drivers killed in a 2004 insurgent attack in Iraq.

The U.S. Court of Appeal for the 5th Circuit, based in New Orleans, ruled that relatives' claims fall under the worker's compensation statute that applies to private military contractors and cannot be brought as a lawsuit.

The victims' families sued KBR and its former parent, Halliburton, in 2005, accusing the companies of sending the drivers into a high-risk area, knowing they would be attacked and possibly killed. Insurgents attacked the Army convoy on April 9, 2004, the first anniversary of the U.S. military presence in Baghdad.

The suit accused the companies of negligence for failing to postpone the convoy operations due to safety concerns. It also accused the companies of fraud in recruiting for allegedly convincing drivers they would only be engaged in rebuilding, not combat.

A district court in Texas rejected KBR and Halliburton's request to dismiss the suit and allowed the case to proceed. But the 5th Circuit overturned the lower court's decision based on the fact the drivers were entitled to workers' compensation.

The court said allowing the case to proceed would undercut the workers' compensation program, which is designed to provide "prompt relief for employees, and limited and predictable liability for employers," Judge Priscilla Owen wrote for the three-judge panel.

Injured employees are entitled to worker's compensation without having to file a lawsuit or prove misconduct on the part of the employer, said Sharon Stagg, assistant general counsel for KBR. However, the employee could recover more money in a lawsuit in the form of actual and punitive damages, she added.

Ms. Stagg said Halliburton played no role in the case, and was only sued because of its parent affiliation when KBR entered into the military contract. Halliburton sold KBR in 2007.

Halliburton declined to comment on the litigation and said KBR was handling the defense of the case.

Thomas Scott Allen, a lawyer for the victims' relatives, did not immediately respond to a request for comment.

On Monday, injured convoy driver Reginald Cecil Lane reached a confidential settlement with KBR and Halliburton, his lawyer Kenneth Fibich said on Monday in a court filing.

The appellate cases are Fisher et al. vs. Halliburton et al. and Lane vs. Halliburton et al., U.S. Court of Appeals for the 5th Circuit, Nos. 10-20202, 10-20371.