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Military Contractor Liability Returns to the Supreme Court

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Wednesday, June 11, 2014 at 7:00 AM

Whatever the merits of the increasing reliance upon private military contractors (PMCs) for tasks that have historically been the province of the U.S. military, one of the major issues such reliance has raised is the accountability mechanisms for those contractors, especially through civil and criminal litigation. I’ve written at length in the past about the criminal side of the coin, but the civil side is perhaps more important—as it implicates a far larger number of cases and doctrines. Indeed, at tomorrow afternoon’s weekly Conference, the Supreme Court is set to consider a pair of cert. petitions brought by PMCs, both of which seek review of circuit-level decisions that, if left intact, could potentially subject them to civil liability based upon allegedly tortious conduct by their employees in Iraq and Afghanistan. (The Battle Space and Contingency Procurements Committee of the ABA’s Section on Public Contract Law is also sponsoring a lunchtime panel on these cases—and their broader implications—tomorrow @ noon, hosted by Steptoe & Johnson.)

This is not the first time that PMC civil liability for “battlefield” conduct has reached the Supreme Court (readers may remember the Saleh case from back in 2011). What makes this pair of cases unique, though, is that this time, it is the PMCs that are asking the Court to intervene, arguing that: (1) these disputes present non-justiciable political questions; (2) even if the disputes are justiciable, the PMCs are entitled to “derivative sovereign immunity”; and (3) even if they are not immune from state tort law, state tort law is “preempted” by federal law. In the post that follows, I aim to provide a brief overview of KBR v. Harris and KBR v. Metzgar (the two cases the Justices will consider tomorrow afternoon), and offer my own views for why the Supreme Court should deny certiorari—and why, in any event, each of the contractors’ asserted grounds for avoiding the merits are ultimately unavailing.

I.  On Electrocutions and Burn Pits

Although the legal questions currently before the Supreme Court are remarkably similar, the underlying facts of Harris and Metzgar are actually quite a bit distinct. Harris arises from the death of a U.S. soldier in his barracks in Iraq, where he was accidentally electrocuted while showering (the shower had been electrified by an ungrounded and unbonded water pump). Harris’s parents, proceeding on behalf of their son’s estate, brought negligence claims against Kellogg, Brown, & Root Services (“KBR”), the PMC hired to perform certain maintenance services at the barracks, on the ground that KBR had failed to comply with the standard of care for work performed under its contracts. After an initial denial of KBR’s motion to dismiss (which KBR prematurely and unsuccessfully sought to appeal), the district court eventually granted KBR’s motion, holding in the alternative that the plaintiffs’ negligence claims were barred by the political question doctrine, and that, even if they weren’t, they were “preempted” (more on why this phraseology isn’t quite accurate below) by the federal policy embodied in the “combatant activities” exception to the Federal Tort Claims Act, 28 U.S.C. § 2680(j). The plaintiffs appealed, and the Third Circuit reversed.

Writing for a unanimous panel, Judge Smith held that KBR’s alleged negligence was not a political question, and that the only potential political question would be if a court had to calculate proportional damages and/or assess contributory negligence—which would only be an issue if the district court found, on remand, that Texas or Tennessee law, rather than Pennsylvania law, governed the dispute.

As for the FTCA “preemption” claim, the Third Circuit held that the plaintiffs’ state tort claims were not preempted because “[t]he military did not retain command authority over KBR’s installation and maintenance of the pump”—i.e., KBR was not carrying out specific instructions from the military when it committed the allegedly tortious act. Thus, the case was remanded to the district court to resolve the choice-of-law question, and then ascertain whether its answer triggered the political question doctrine. Rather than litigating that issue on remand, KBR filed for certiorari.

Metzgar, better known as the “burn pit” litigation, arises from a series of tort and contract claims brought by soldiers, veterans, and former contractors against a series of PMCs, challenging waste disposal and water treatment practices that allegedly led to a range of serious injuries. After a fair amount of procedural wrangling, the district court ultimately dismissed the plaintiffs’ claims, holding that the political question doctrine, derivative sovereign immunity, and the combatant activities exception each provided a basis on which the claims could be thrown out. The servicemember plaintiffs appealed, and the Fourth Circuit vacated and remanded the decision below.

Writing for a unanimous panel, Judge Floyd held that the record was insufficiently clear on the allocation of decisional responsibility as between the PMCs and the military to ascertain whether the political question doctrine or derivative sovereign immunity should bar the action, and that, to similar effect, the record was insufficiently clear about whether “the military retain[ed] command authority” over KBR’s waste management and water treatment activities sufficient to justify application of “combatant activities” preemption. Thus, like the Third Circuit, the Fourth Circuit sent the case back to the district court for further development of the factual record in order to determine whether any of the PMCs’ defenses should bar the suit from going forward. And, as in Harris, the PMCs promptly filed for certiorari, rather than litigate those questions on remand

II.  Why Certiorari Should Be Denied: The Premature Timing

Before turning to the underlying issues here, it’s worth flagging the odd posture in which the PMCs are seeking certiorari in both cases: Not after losing at trial, but rather after circuit-level decisions remanding to the district court to develop a more complete record to ascertain the validity of the PMCs’ defenses. In one sense, the interlocutory nature of these cases underscores the PMCs’ core view—i.e., that they are categorically immune from these suits, and therefore should not have to endure the more nuanced litigation that both circuits have ordered to ascertain whether, on more qualified terms, the PMCs cannot be held to account. But it also underscores the long odds of the Supreme Court intervening, at least at this early stage. After all, it’s entirely possible in both cases that the PMCs will nevertheless prevail on remand—on political question grounds in Harris, and on political question or preemption grounds in Metzgar. And even if they don’t prevail on these barriers to liability, they might ultimately prevail on the merits—thereby mooting the need to appeal these preliminary determinations. They just haven’t yet.

III.  Why Certiorari Should Be Denied: The Unconvincing Barriers to Relief

The harder question, of course, is whether the PMCs should prevail on these barriers to liability—that is, whether these suits should be barred by some combination of the political question doctrine, derivative sovereign immunity, and FTCA preemption. I’ve written before about these questions in some detail (including this post on the immunity/preemption distinction and this more general paper in the American University Law Review), but want to flag a few specific points here, because even in rejecting the PMCs’ invocations of these doctrines, the Third and Fourth Circuits both relied upon flawed understandings of their scope.

a.  The Political Question Doctrine

In describing the political question doctrine, both the Third and Fourth Circuits assumed that it insulated from judicial review any suit that would require a federal court to assess the “reasonableness” of a military decision, and so the key was to determine whether the liability of the PMC defendant might in any way turn on the appropriateness of specific military decisions. Both decisions thus relied on the Fourth Circuit’s earlier ruling in Taylor v. KBR, which applied the political question doctrine to bar a different suit by a servicemember against a contractor. So long as the military “controlled” the actions of the PMC, and review of those actions would thereby require review of the reasonableness of military decisions in a combat zone, both circuits concluded that the political question doctrine should apply.

But there is a deep flaw in this very analytical premise. Application of the political question doctrine typically turns either on the presence of a “textually demonstrable commitment” of the disputed issue to a branch other than the judiciary, or on the lack of “judicially manageable standards” to resolve the underlying dispute. The notion that the Constitution’s text commits to the Executive Branch any and all decisions regarding military conduct is not only lacking for any textual support, but is utterly belied by the long litany of cases in which courts can and do review military conduct, including, e.g., military captures and detention. And although there might be an argument that tactical battlefield decisions raise more unique concerns, the Supreme Court has never recognized a “textually demonstrable commitment” of such questions to a branch other than the judiciary. Indeed, if there was such a commitment, there would have been no need either for the very combatant activities exception to the FTCA on which the PMCs also (sort of) rely.

The same can be said for whether these cases raise a lack of “judicially manageable standards.” Apportioning liability as between the PMC and the government may raise difficult questions, but no more so than any case in which any contractor seeks indemnification from the government for actions it claims the contract compelled (the run of which don’t come anywhere near the political question doctrine). It may well be that the contractors are entitled to other defenses, including immunity and preemption (more on that in a moment), but the notion that these disputes are categorically nonjusticiable whenever they implicate the reasonableness of a military “decision” reflects a dangerously overbroad understanding of the political question doctrine, and one that cannot be reconciled with a host of other doctrines that would simply be unnecessary in the face of such a complete and jurisdictional bar to suit.

Thus, even in rejecting the PMCs’ reliance upon the political question doctrine (at least for now), both the Third and Fourth Circuits both perpetuated an overbroad understanding of that doctrine—even as the Supreme Court has consistently reminded lower courts of the narrowness of political questions, and as the lower courts have eschewed application of that doctrine even to battlefield captures during wartime.

b. Derivative Sovereign Immunity

Although I think it plain why the political question doctrine doesn’t bar these suits, the PMCs’ immunity and preemption defenses are a bit thornier (although the distinction between the two has mattered elsewhere, they’re both relevant, and so are analyzed separately, here). On immunity, the basic gist is that, insofar as the federal government would have sovereign immunity from the exact same lawsuit if the allegedly tortious conduct was committed by a federal employee, the contractors “derive” that immunity. But as the Fourth Circuit explained in the burn-pit litigation, the Supreme Court’s articulation of derivative sovereign immunity (in a 1940 case, Yearsley v. W.A. Ross Construction Co.) is not nearly as broad: “[T]he contractor must adhere to the government’s instructions to enjoy derivative sovereign immunity; staying within the thematic umbrella of the work that the government authorized is not enough to render the contractor’s activities ‘the act[s] of the government.’” Thus, the Fourth Circuit held that the critical question is whether the contractor was specifically following government instructions—and not whether it was generally acting within the scope of the contract (on which further factual development, and therefore a remand, was necessary).

But it’s also worth stressing a point that the Fourth Circuit did not consider, i.e., that Yearsley predates the Federal Tort Claims Act. That statute, which generally waives the federal government’s sovereign immunity in tort (and must therefore waive contractors’ derivative immunity in such cases), includes a series of exceptions that preserve the federal government’s sovereign immunity in certain cases—and that, by the statute’s express terms, don’t apply to contractors. That is to say, the FTCA abrogates whatever derivative sovereign immunity contractors might have enjoyed in cases in which it also abrogates the federal government’s immunity—and only exempts from such abrogation specifically enumerated acts by federal employees.

Thus, for example, the FTCA has express exceptions for intentional torts by non-law enforcement officers, or for any claim arising in a foreign country, both of which would otherwise have applied to the facts of either of these cases. Put another way, after Yearsley, Congress passed a statute that far more specifically circumscribes the federal government’s sovereign immunity, and that draws a bright line between the government and contractors. Congress was certainly free to provide otherwise, or to codify the Yearsley rule outright; it just chose not to do so. In refusing to consider the significance of the omission of contractors from the FTCA, then, the Fourth Circuit arguably perpetuated an overbroad understanding of the current scope of derivative sovereign immunity. Indeed, on the PMCs’ own theory, there would be no need for any “preemption” in this field, since they would be immune from state tort suits without regard to the scope of substantive federal law. That argument is, in turn, difficult to square with the core of the PMCs’ preemption claim.

c. “Battlefield Preemption”

Even if these claims aren’t barred by the political question doctrine, and even if the PMCs are not entitled to derivative sovereign immunity, the PMCs nevertheless claim that the state tort (and contract) laws giving rise to the causes of action are all “preempted” by the federal policy enmeshed in the combatant activities exception to the FTCA. This argument, which, in my view, is the PMCs’ strongest, requires a bit of unpacking.

As I just noted above, the FTCA expressly exempts contractors from its scope. Thus, you might be asking, how could one of its exceptions allow for the “preemption” of state law as applied to a contractor? The answer is that it can’t. But in a controversial 1988 decision (Boyle v. United Technologies Corp.), the Supreme Court held that federal courts could infer, from the FTCA’s express exception for the performance of “discretionary functions,” a federal common law rule of decision that “displaces” (rather than “preempts”) state tort law, when certain things are true about the dispute. Specifically, as Justice Scalia explained, imposing liability on government contractors for discretionary decisions made by the Executive Branch would be adverse to the interests of the United States because government contractors would respond by either: (1) raising procurement prices or (2) declining to follow design specifications.

Critically, though, that federal interests were triggered was not the end of the inquiry. Instead, Justice Scalia then explained that such interests justify the displacement of state law only when “a ‘significant conflict’ exists between an identifiable ‘federal policy or interest and the [operation] of state law,’ or the application of state law would ‘frustrate specific objectives’ of federal legislation.” As he concluded, “[t]he conflict with federal policy need not be as sharp as that which must exist for ordinary pre-emption when Congress legislates ‘in a field which the States have traditionally occupied.’ . . . But conflict there must be.”

Although Boyle was controversial, it was also, historically, exceptionally narrow. As I’ve explained previously, “pre-September 11 cases relying on Boyle invariably involved relatively minor variations on the underlying theme: plaintiffs seeking to use state law to recover against contractors for claims that would have been barred under the discretionary function exception if brought directly against the responsible government officers. Virtually all of these suits arose in the products liability context.” This is so because Boyle itself centered both textually and analytically on the uniqueness of FTCA’s discretionary function exception—and not on the general idea that preemption could be derived from any or all of the FTCA’s statutory exceptions. The concern was not with holding contractors liable in cases in which the government would not be (a concern more appropriately placed within the ambit of derivative sovereign immunity). Rather, Boyle was motivated by a concern that, uniquely in discretionary function cases specifically, holding contractors liable would have the effect of demanding specific exercises of discretion by the government—thereby contravening the core purpose of the discretionary function exception.

The departure in the post-September 11 suits against PMCs has been the expansion of Boyle into the realm of one of the FTCA’s other exceptions—the exception for “[a]ny claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war.” Thus, in Saleh, a divided panel of the D.C. Circuit held that Boyle supported the (inaptly named) doctrine of “battlefield preemption,” because state tort suits against PMCs based upon foreign combat activities would have been barred by the FTCA if brought directly against the military.

As then-Judge Garland pointed out in his Saleh dissent, though, such a conclusion completely dilutes Boyle’s second step—the existence of a significant conflict between state tort liability and federal policy. Thus, in Saleh, it was difficult to understand how state tort liability for torture could conflict with federal policy. The same is true in these contexts, for it is hard to understand how requiring PMCs to comply with ordinary state duties of care would conflict with federal policy—at least, absent some stronger showing that military showers and/or waste disposal facilities should not be required to meet such standards. Nevertheless, both the Third and Fourth Circuits endorsed this approach, ruling only that the records were insufficiently clear to support Boyle-like displacement because it wasn’t clear whether the military retained “command authority” over the PMCs’ combatant activities.

But the real flaw in these cases is not in how they water down Boyle’s test, but in the fact that they apply Boyle at all. Although holding PMCs liable under state law for torts committed in the course of combatant activities might end up affecting the government (through, e.g., higher-cost contracts), it would not bar the government from conducting combatant activities (as opposed to exercising discretionary functions, which was the concern in Boyle) and thereby frustrate the purpose of the statutory exception. Otherwise, as Judge Garland suggested, “there is no reason to stop there. The FTCA’s exceptions are not limited to discretionary functions and combatant activities . . . . Once we depart from the limiting principle of Boyle, it is hard to tell where to draw the line.”

III.  Why These Cases Matter: Judicial Lawmaking and National Security

Thus far, I’ve done my best to explain both why the Supreme Court should deny certiorari and why, even still, there’s much to criticize in the Third and Fourth Circuit decisions from which the PMCs are seeking certiorari. But if you’ve made it this far, it’s worth stepping back and reflecting upon the bigger picture, and the role of federal courts and judicial lawmaking in these kinds of disputes.

Ultimately, what the PMCs are really asking the federal courts to do is to provide them with refuge from state tort law—not by application of supervening federal statutes or constitutional provisions, but rather by invocation of judge-made federal common law doctrines that would bar such claims altogether. In that regard, it’s quite telling both that (1) Congress has not interceded to more expressly protect the PMCs from such claims; and (2) many of the same lawyers and jurists who find themselves in general agreement with the PMCs are also staunch opponents of “judicial lawmaking,” especially in the context of providing remedies to victims of government wrongdoing in the absence of express statutory authorization.

But leaving aside the hypocrisy that often marks analyses of these issues, there’s a deeper point to be made—and it’s one I made in a post several years ago: “I don’t think it matters whether one is a progressive or a conservative, a hawk or a dove, to believe that, all things being equal, federal–rather than state–law should govern federal national security policy, especially with respect to operations overseas.” If one takes that principle seriously, as I do, one should accept both sides of its implications—that, insofar as federal policy might sometimes justify the displacement of state law, such displacement ought to come in favor of some alternative federal remedy, and not displacement of all relief whatsoever, at least unless Congress expressly so provides. Otherwise, federal courts are substituting their own policy preferences for those of state legislatures and judges—in a manner that forecloses relief that should otherwise be available.

Don’t get me wrong: Congress is free to bar these claims, if it sees fit. But the fact that Congress has not seen fit thus far should mean something to the federal judges who hear these cases—that federal common law should be an all-or-nothing proposition in this field, and not just something to be lamented when invoked in favor of plaintiffs, and celebrated when invoked by PMCs.

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