A U.S. Court of Appeals panel ruled yesterday that members of Congress are not immune from libel suits arising from their attempts to influence the conduct of executive agencies, saying that they are acting as "volunteers" in such undertakings, including communicating with constituents.

The 2-to-1 opinion, written by a former senator and including a dissent by a former House member, rejected arguments that members of Congress should be protected by something akin to executive immunity, even if their actions are not directly related to constitutionally mandated legislative duties.

The decision came in a case brought against Rep. Donald K. Sundquist (R-Tenn.) by Wayne Chastain, an attorney with Memphis Area Legal Services (MALS) who claimed that he had been defamed by a letter Sundquist wrote to then-Attorney General William French Smith.

In the letter, Sundquist accused Chastain of obstructing enforcement of federal laws governing collection of delinquent child-support payments. Sundquist later released a copy of the letter to the news media and held a news conference about the matter.

"I think it's wonderful," Bernard Fensterwald III, Chastain's attorney, said of yesterday's decision.

Fensterwald said the basic problem centered on the Memphis Juvenile Court's aggressive techniques in collecting support payments from indigent parents. The court can keep 90 cents of each dollar collected.

Fensterwald said thousands of people have been held in civil contempt to force payment and Chastain and other MALS lawyers have fought the system for years.

House general counsel Steven R. Ross, who represented Sundquist, criticized the court's opinion, saying it could "chill" members' communications with constituents on "subjects of vital interest."

Ross characterized the decision as "pretty ill-founded and ill-reasoned" and said the three-judge panel showed an "almost grade-school concept of civics and American government." He said Sundquist will appeal.

The opinion, written by Circuit Judge James L. Buckley, cites English common-law precedents dating to 1794 and remarks by Thomas Jefferson and James Madison.

"Congressman Sundquist has every right to monitor and challenge the manner in which the Legal Services Corp. operates," Buckley wrote. "Within the halls of Congress, he can lobby for its overhaul, engage in oversight hearings and, should he choose, libel with impunity the reputation and integrity of any lawyer working for the corporation . . . . He can attack or defend, as he sees fit, the necessity of a public legal services corporation in general or the manner in which it operates in his own district."

But the former New York senator concluded, "No imperative of office requires that a member of Congress, while acting outside the scope of his legislative duties, be free to reach out with impunity and name names without regard for the consequence to individual reputations." Circuit Judge Stephen L. Williams joined Buckley's opinion.

In dissent, Circuit Judge Abner J. Mikva, a former House member from Illinois, deemed Sundquist's actions "functions essential to our government" and said that, in such situations, a private individual's right to sue for money damages "must sometimes yield to the interests of the broader public."