Ohlsen v. United States, 998 F.3d 1143 (10th Cir. June 3, 2021)

Under a Cooperative Funds and Deposits Act (“CFDA”) agreement with the Isleta Pueblo Indian tribe, the United States Forest Service worked to thin and masticate forestland in the Manzano  Mountains of New Mexico. During these wildfire-reduction efforts, however, a substantial wildfire broke out, destroying numerous nearby homes and structures. Insurers and homeowners affected by the fire sued under the Federal Tort Claims Act (“FTCA”), claiming that the Forest Service was vicariously liable for any negligence committed by Isleta Pueblo crewmembers in the runup to the fire. On appeal from dismissal of those claims, the Tenth Circuit affirmed, holding as a matter of first impression that parties working with the federal government pursuant to the CFDA are not necessarily federal employees for purposes of FTCA claims. Instead, courts must apply traditional principles, including the factors set out in Lilly v. Fieldstone, 876 F.2d 857 (10th Cir. 1989), to determine whether those parties are legally government employees or simply independent contractors. In this case, the Isleta Pueblo crewmembers were held to be independent contractors in light of the plain language of the CFDA agreement and the Forest Service’s limited control over the manner and means of the crewmembers’ forest thinning efforts.