I have a post up on the Reason Foundation’s web site on government contractor immunity. Here’s the beginning:
An important question in contracting out is always how the contractors’ legal regime differs from the government’s. There are accountability mechanisms in the private sector, but they generally differ from the ones available in the public sector; similarly, the availability of money damages can sometimes change dramatically when a service is contracted out.
A previous post discussed contractors’ immunity in civil rights lawsuits for violations of constitutional rights: sometimes (as in the recent case of Filarsky v. Delia) they have the same “qualified immunity” as government employees, sometimes (as with private prison guards) they don’t. This post discusses a related issue: to what extent contractors can benefit from the government’s sovereign immunity in tort lawsuits. The answer here is similar: sometimes the government’s sovereign immunity is extended to the contractors, sometimes it isn’t. The classic case for immunity is Boyle v. United Technologies Corp. (1988); while such immunity might often make good policy sense, the legal theory used to get there is somewhat sloppy. Several recent cases involving military contractors, including a district court case from March 2013, are distinguishable from Boyle and tend to come out the other way, against immunity.
Here’s how I conclude, after discussing Boyle, Koohi, Bentzlin, Saleh, and McMahon (a very recent district court case from New Jersey):
Thus, despite Bentzlin (which, being a district court case, has no precedential effect), it’s not at all clear that government contractor immunity plays a significant role outside Boyle’s specific context of design defect claims for features the government had asked for, or Koohi’s specific context of tort claims by the intended target of a weapon. Various recent district court cases aside from McMahon have similarly distinguished Koohi and Bentzlin and allowed tort cases to go forward against military contractors; in addition to McMahon, there have been at least four since 2005.
Of course, subjecting contractors to a stricter legal regime than the government may artificially increase the cost of privatization and introduce an in-house bias, but on the other hand, the government has other accountability mechanisms that are lacking for the private sector, especially in the military context. The district judge in McMahon warned that “[t]he combatant activities exception, cut loose from its rationale, threatens to metamorphose into a near-absolute immunity for contractors.” Perhaps tort law has no useful role to play in cases like Boyle where the government specifically asked for a feature, but when a contractor has sloppy manufacturing practices (as perhaps in Koohi or Bentzlin), or interrogates aggressively beyond what the government requested (as perhaps in Saleh), maybe immunity has gone too far.
Read the whole thing. I have previous Reason posts on qualified immunity in civil rights suits, the availability of Bivens suits against federal private prisons, the public-private distinction in light of a recent NLRB decision, and the antitrust state action doctrine in light of FTC v. Phoebe Putney.