Tort Suits Against Federal Contractors: Selected Legal Issues

Summary

Contractors have played a considerable role in U.S. military operations over the last decade, and some commentators anticipate they will continue to do so in the future. Due in part to their heavy involvement in military operations, contractors have faced numerous tort suits, or suits seeking remedy for civil wrongs, in recent years. Many of these tort suits have alleged that contractors negligence, or failure to take due care, in performing contractual obligations has caused harms to third/private parties (as opposed to the contracting agency). Contractors have often responded to such suits by raising the Federal Tort Claims Act (FTCA), the political question doctrine, and derivative immunities in seeking to avoid liability. They may also, to the extent permitted by their contract, seek indemnification from the government if found liable.

The Supremacy Clause of the U.S. Constitution provides that federal law is the supreme law of the land and preempts, or applies instead of, inconsistent provisions of state law. The FTCA is a federal law through which the government largely waives its inherent sovereign immunity from tort liability, although it retains sovereign immunity if one of the FTCAs exceptions applies (e.g., against any claim arising in a foreign country). Although the FTCA does not apply directly to federal contractors, they have long argued that the FTCAs exceptions can preempt state tort law claims against them in addition to federal agencies, and the Supreme Court agreed in its 1988 decision in Boyle v. United Technologies Corporation. There, the Court held that failure to find that one such FTCA exception, the discretionary function exception, preempts state law tort claims against contractors in narrowly prescribed circumstances would frustrate the exceptions underlying purpose of shielding the government from liability caused by its discretionary decisions. The Court thus fashioned a rule immunizing contractors from tort liability caused by defects in some government-selected designs. Lower courts subsequently grappled with questions regarding the Boyle rules scope (e.g., does it protect against manufacturing defect claims?), as well as whether the FTCAs combatant activities exception immunity may be extended to contractors under the Boyle Courts rationale. Based largely on the terms and performance of particular contracts, some courts extended the combatant activities exception to contractors, whereas others did not.

Contractors have also asserted that the political question doctrinewhich recognizes limitations on justiciability, or the appropriateness of a court hearing a claimbars particular tort suits against them because determining whether they are liable would require the court to decide questions that the Constitution commits to the legislative or executive branches of government. Though the outcomes in such cases have varied, it would appear that courts may be more likely to find a political question when a case presents certain characteristics.

In addition, contractors have argued for immunities deriving from federal employees absolute immunity under the Westfall Act, pursuant to which they cannot be liable for any harms that occur within the scope of their employment. Contractors have also argued that the judicially created Feres doctrine, which provides that the government cannot be liable to servicemembers for torts arising in the course of, or incidental to, military service, should apply to them. Some courts have recognized a derivative absolute immunity for contractors, but have held that it applies only to harms caused by contractors performance of discretionary, rather than ministerial, functions. Courts have generally rejected contractors derivative Feres immunity arguments.

In some cases, the government may also have agreed to indemnify a contractor, or promised to pay certain liabilities to third parties that the contractor may incur through contract performance.