Federal contractor immunity in Anchorage

March 13, 2014

In some past posts, I’ve discussed federal contractor immunity. A recent federal decision from the District of Alaska, Anchorage v. Integrated Concepts and Research Corp., decided on March 4, illustrates the concept yet again, and how concepts of sovereign immunity, personal immunity, and defenses on the merits often get confused.

The Municipality of Anchorage signed a Memorandum of Understanding with the federal Maritime Administration for the expansion of the Port of Anchorage. MarAd contracted with various corporations to do work, and Anchorage sued the corporations on a number of contract and tort claims related to the work they did. One of the corporations, ICRC, moved to dismiss based on derivative sovereign immunity. There were other claims, but I’ll only focus on the derivative sovereign immunity claim.

First, ICRC relied on Yearsley v. W.A. Ross Construction Co. (1940), the case I discussed in my recent post on government contractor immunity in the KBR/Halliburton case. As I described the case in that post:

In Yearsley, Congress authorized a construction project, and the government hired a contractor to carry it out. The project caused erosion that damaged nearby property. The landowners affected sued the contractors, arguing that there had been a taking without just compensation. The Supreme Court said you couldn’t sue the contractors: “if this authority to carry out the project was validly conferred — that is, if what was done was within the constitutional power of Congress — there is no liability on the part of the contractor for executing its will.” (As the Fourth Circuit points out, Yearsley’s holding is “quite narrow”: the case itself doesn’t mention sovereign immunity, and instead says that it’s the government that impliedly promises to pay just compensation for takings.)

The Fourth Circuit in that case did treat Yearsley as a sovereign immunity case, but the district court here disagreed: “this Court does not construe Yearsley to involve derivative sovereign immunity. Rather, it is a case that accords protection from suit to a private contractor when it is acting solely at the government’s authority and direction, while expressly recognizing the potential liability of the government itself.” This is probably right: Yearsley should probably be read as giving the contractor a defense to liability on the merits, not as granting derivative sovereign immunity.

ICRC relied on two other lower-court cases from other jurisdictions: Ackerson v. Bean Dredging LLC (5th Cir. 2009) and Gomez v. Campbell-Ewald Co. (C.D. Cal. 2013) (can’t find it online, but its Westlaw identifier is 2013 WL 655237). According to the court, those cases really did purport to talk about derivative sovereign immunity (I haven’t checked them myself), but sovereign immunity was granted in those only because the contractor was doing exactly what the government wanted, whereas there was no claim that the breaches of contract and torts alleged in this case were specifically asked for by the government.

Finally, ICRC relied on Filarsky v. Delia (2012), a qualified-immunity case that I’ve discussed in this Reason.org blog post. Filarsky concerned alleged civil-rights violations by a private attorney hired by the city to conduct an investigation. The target of the investigation sued Filarsky, the private attorney, for damages under § 1983, the federal civil-rights statute. The Supreme Court held that the private attorney could benefit from the same qualified immunity from § 1983 suits as if he were a public employee.

But note what sort of case Filarsky is. Civil-rights cases under § 1983 are cases brought personally against particular government agents, not cases brought against the government. The qualified immunity in § 1983 cases is a personal immunity that has been read into § 1983 as a matter of statutory interpretation (and often denied when this doesn’t serve the policy purposes behind the statute), not the sovereign immunity of the government (which goes to the subject-matter jurisdiction of federal courts). So cases like Filarsky aren’t really about the same thing as sovereign immunity cases, even though personal immunity cases do often get confused with sovereign immunity cases.

Anyway, the court said that Filarsky wasn’t applicable because Filarksy was working in close coordination with government employees, which is again different from the breaches of contract and torts alleged here, which are separate from the government’s role in the project. Maybe this was the wrong way of distinguishing Filarsky, but at worst it’s harmless error.

So there you have it: a combination of defenses on the merits (Yearsley), personal immunity claims (Filarsky), and actual derivative sovereign immunity cases that don’t apply because they require the contractor to have been doing exactly what the government asked for. Right result, but it shows how these related doctrines, all of which have the same ultimate no-liability vibe, are often argued indiscriminately together.

Sasha Volokh lives in Atlanta with his wife and three kids, and is an associate professor at Emory Law School. He has written numerous articles and commentaries on law and economics, privatization, antitrust, prisons, constitutional law, regulation, torts, and legal history.
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