Even though “the process followed was inconsistent with Corps policy, there was sufficient information” to “believe that the final negotiated modification was the best course of action,” Colonel John Hurley, deputy commander of the Corps’ Transatlantic Division, said.

Sopko, who heads an independent agency created by Congress to oversee U.S. spending in Afghanistan, rejected that conclusion in an e-mailed statement.

“The Corps’ own internal review says they didn’t make DynCorp pay to fix their shoddy construction, they didn’t collect the liquidated damages that DynCorp owed them, and they violated their own settlement policies,” he said. “But they still think the settlement was ’proper and reasonable.’” Sopko said. “That wasn’t a settlement, it was a mugging.” “We want to make sure that someone is held accountable and taxpayers are made whole,” Sopko said.

“The critical interests of the United States could be compromised if military contractors were left ‘holding the bag’ for claims made by military and other personnel that could not be made against the military itself,” Titus said in a decision released yesterday in Greenbelt, Maryland."

The remedy for the allegedly injured service members is through military and legislative processes, not the courts, Titus said.

Andrew Farley, KBR’s executive vice president and general counsel, said in an e-mailed statement that the company is pleased by the ruling, especially its emphasis on non-judicial means of redress.

“We look to the courts to continue this positive trend in other pending cases,” Farley said.

Susan Burke, an attorney for the plaintiffs, said in a phone interview that Titus’s ruling will be appealed. She declined to comment further.

A phone call to Halliburton requesting comment on the ruling wasn’t immediately returned.

Contract Terms

The plaintiffs claim that the Houston-based companies ignored the terms of contracts with the U.S. that required safe and environmentally sound waste disposal for troops.

Titus’s decision marks a reversal of an earlier ruling in the same set of cases.

In September 2010, Titus said that KBR, the largest U.S. military contractor, and Halliburton must face the suits and that “courts must be prepared to adjudicate cases that ultimately expose defense contractors to appropriate liability.”

In yesterday’s decision, Titus cited a September 2011 ruling by the U.S. appeals court in Richmond in an unrelated case where the court said a soldier’s claim against KBR for injuries from electric shock was barred by the “political question doctrine.” The doctrine prevents courts from reviewing certain actions taken by other branches of government.

‘Binding Precedent’

That case “creates new, binding precedent with respect to whether this court has subject matter jurisdiction over plaintiffs’ claims,” Titus wrote.

KBR faces other suits alleging harm from its military contracting activities and has said it will appeal an $85 million jury award to 12 U.S. soldiers who claim the company negligently exposed them to toxic chromium dust at a worksite in Iraq in 2003.

The case is In Re KBR Inc. (KBR), Burn Pit Litigation, 09-2083, U.S. District Court for Maryland (Greenbelt).