Amicus Curiae Brief — Campbell-Ewald Co. v. Gomez, 135 S. Ct. 2311 (2015) (No. 14-857)

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Supreme Court, US.

FILED

JUL 23 205

No. 14-857 OFFICE OF THE CLERK

In the

Supreme Court of the Anited States

CAMPBELL-EWALD COMPANY,

Petitioner,

Vv.

JOSE GOMEZ,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF FOR AMICUS CURIAE KBR, INC.

IN SUPPORT OF PETITIONER

PAUL D. CLEMENT

Counsel of Record

JEFFREY M. HARRIS

BANCROFT PLLC

500 New Jersey Avenue, NW

Seventh Floor

Washington, DC 20001

(202) 234-0090

pclement@bancroftplic.com

Counsel for Amicus Curiae

July 23, 2015

TABLE OF CONTENTS

TABLE OF AUTHORITIESG......................cccssssssessesenes lil

STATEMENT OF INTEREST ...................ccssseeeeeees 1

SUMMARY OF ARGUMENT .....000000. ccc eeeeeeeeeeees 3

TT dicts schiinsisdiiphicinniedadiauaptsdennienitineiaioneiianiediveiinies 8

I. Contractors Such As KBR Provide A Wide

Range Of Indispensable Support Services

That The Government Would Otherwise

ES TL 8

Il. The Derivative Sovereign Immunity Doctrine

Is A Critical Protection For Contractors That

Perform Delegated Government Functions...... 11

A. The Government Is Typically Immune

From Suit for Money Damages for

Services It Self-Provides. .....................2000+- 11

B. This Court Has Repeatedly Recognized

the Importance of Broad Immunity for

Those Who Perform Delegated

Government Functions................0...cce000000+ 12

C. Claims Against Contractors Performing

Delegated Functions Are Superfluous in

Light of the Government’s Plenary

Authority to Oversee Its Contractors. ....... 19

Ill. Derivative Sovereign Immunity Should

Protect Contractors From Liability For

Claims Arising Out Of Delegated

Government Functions Within The Scope Of

Their Contractual Authority. ..............0......0.0...- 23

A. The Ninth Circuit’s Narrow

Interpretation of the Derivative

Sovereign Immunity Doctrine Is Wholly

I HEINE onccscscnsccssintssicnsadeinicnemiaciandaanaaell 23

B. The Proper Test Should Provide That

Contractors Are Immune From Suit for

Actions Taken Within the Scope of a

Validly-Issued Contract. .......................200- 27

CSPI EII OT cccessssissesssnavenatvesninnceiennincninaalis 31

ill

TABLE OF AUTHORITIES

Cases

Ackerson v. Bean Dredging,

589 F.3d 196 (5th Cir. 2009).......................00000..00. 25

Aiello v. Kellogg Brown & Root Servs.,

751 F Supp. 2d 698 (S.D.N.Y. 2011) ...................... 9

Aversa v. United States,

99 F.3d 1200 (1st Cir. 1996) ............000000000. 7, 29, 30

Boyle v. United Technologies Corp.,

I cttemses 5, 14, 15

Carmichael v. Kellogg Brown & Root Servs.,

572 F.3d 1271 (11th Cir. 2009).............................. 10

Coyne v. United States,

233 F Supp. 2d 135 (D. Mass. 2002) .................... 29

Etherage v. West,

587 Fed. Appx. 390 (9th Cir. 2014) .........0.0..e.. 30

Filarsky v. Delia,

aaa sa ncsscsonmntonanenee passim

Gibbons v. Ogden,

ESE 23

Gonzalez v. Freeman,

334 F.2d 570 (D.C. Cir. 1964) ...........cccccceecseeeeeeeees 21

Harlow v. Fitzgerald,

REE EE 12

Harris v. Kellogg Brown & Root Servs.,

a 9

Jamison v. Wiley,

14 F.3d 222 (4th Cir. 1994)... eee 29

In re KBR Burn Pit Litig.,

925 F. Supp. 2d 752 (D. Md. 2013).....................6 10

In re KBR Burn Pit Litig.,

744 F.3d 326 (4th Cir. 2014).........000..... el 2, 9, 30

Mangold v. Analytic Serus.,

77 F.3d 1442 (4th Cir. 1996).......... seeiinendamiiiencaishaaiild 19

Marbury v. Madison,

EE Ee Cee SE I 23

McMahon v. Presidential Airways,

602 F.3d 1381 (11th Cir. 2007)................0............. 10

McManaway v. KBR, Inc.,

554 Fed. Appx. 347 (5th Cir. 2014) ..........0.0..00..... 10

Murray v. Northrop Grumman Info. Tech..,

ke re ee 19

Price v. United States,

gS CR ree i eye 26

Saleh v. Titan Corp.,

580 F.3d 1 (D.C. Cir. 2009)............. inesheaiasmasediamnenl 10

Sossamon v. Texas,

RR > eee 26

Taylor v. Kellogg Brown & Root Servs.,

668 F.3d 402 (4th Cir. 2011)....................2.000........... )

United States v. Smith,

GREET ne RE SE 29

Yearsley v. W.A. Ross Construction Co.,

ERE SCE AA eeeneee passim

Statutes and Regulation

QB CFR, CUB BIO-F onan cescncescssecceccesecsescesess: imate 29

all 29

I ll ee cern salina 12

ERASE ene nE RCE Sees 27

ESE aR eS NSE RE 27

ESTER DEE LPP ereeescne tamee res Pouer 27

Other Authorities

Br. for United States as Amicus Curiae,

KBR, Inc. v. Metzgar, No. 13-1241,

2014 WL 7185601 (U.S. Dec. 16, 2014)..... 14, 27, 28

Juliet Eilperin & Amy Goldstein,

Obama administration to end contract with

CGI Federal, company behind

HealthCare.gov,Washington Post,

EE ER PERL et 20

Kate M Manuel, Cong. Research Serv.,

RL34753, Debarment and Suspension of

Government Contractors: An Overview of

the Law, Including Recently Enacted and

Proposed Amendments, (2012) ................c.0000000000+ 21

Moshe Schwartz & Wendy Ginsberg,

Cong. Research Serv., R41820, Department

of Defense Trends in Overseas Contract

ESTE RAR eR 9

Neil Gordon, Suspension and Debarment by

the Numbers, Project on Gov't Oversight

I daeteenieeeni 21

Press Release, KBR Receives LogCAP IIT

REE FO Gy Tile Coc chcccecccccscecccesccccscccccsseses 22

Restatement (Second) of Agency (1958) .............. 7, 30

Second USAID Contractor Suspended

Following Caracol Housing Debacle, Ctr.

for Econ. and Policy Research Blog, (Mar.

EI aR eR sdetcr NOP nn cre er 20

U.S. Army Field Manual 1-02, Operational

Terms and Graphics (2004) .................ccccccceceeeeeeeeees g

STATEMENT OF INTEREST"

Amicus KBR, Inc. is one of the world’s preeminent

engineering, procurement, construction, and services

companies, employing approximately 27,000 people in

more than 70 countries. KBR has a long history of

delivering effective solutions to defense and

government agencies worldwide. Many of the services

KBR provides are indistinguishable from services

traditionally performed by the government itself. For

example, KBR provides government and military

organizations with base operations, facilities

management, border security, logistics support,

humanitarian assistance, disaster response, and

engineering, procurement, and construction services.

KBR has completed projects and performed services

for the U.S. Army and the U.S. Departments of

Energy, State, and Homeland Security, among many

other government entities.

KBR often provides those services under

challenging circumstances in remote locations

throughout the Middle East, Asia, and Africa. For

example, in connection with a contract issued by the

U.S. Army through the Logistics Civil Augmentation

Program, KBR has provided numerous mission-

critical services to support the Army’s war efforts in

Iraq and Afghanistan. In that role, KBR personnel

! Pursuant to Supreme Court Rule 37.6, amicus curiae states

that no counsel for any party authored this brief in whole or in

part and that no entity or person, aside from amicus curiae and

its counsel, made any monetary contribution toward the

preparation or submission of this brief. Pursuant to Supreme

Court Rule 37.3, counsel of record for all parties have consented

to this filing in letters on file with the Clerk’s office.

served in-theater alongside uniformed military

personnel, and provided combat support services

including, inter alia, transportation, waste

management, food and water supply, building and

equipment maintenance, and numerous other

delegated functions. General John Vines, the former

Commander of the Multi-National Corps—Iraq, has

described KBR’s services as “essential to the success

of the military's combat mission.” Appendix at 430,

Harris v. Kellogg Brown & Root Servs., Inc., No. 12-

3204 (3d Cir. Oct. 12, 2012).

Because KBR routinely operates in difficult or

challenging circumstances where injuries are all but

inevitable, it has also faced litigation arising out of the

services it provides to the government. For example,

even though KBR was performing combat support

services at the direction of the military in multiple

active war zones—and even though the Army

consistently gave KBR high ratings for its

performance—KBR has been sued by numerous

plaintiffs who seek to hold the company liable for

alleged injuries incurred on foreign battlefields.

KBR has previously invoked the derivative

sovereign immunity doctrine in response to many of

these claims. Indeed, derivative sovereign immunity

is one of KBR’s core defenses in a massive, multi-

district litigation challenging the company’s operation

of “burn pits” in Iraq and Afghanistan. See Jn re KBR,

Inc., Burn Pit Litig., 744 F.3d 326, 337-38 (4th Cir.

2014). KBR thus has a direct and substantial interest

in ensuring that the Ninth Circuit’s narrow and

profoundly flawed interpretation of the derivative

sovereign immunity doctrine is reversed.

KBR fully agrees with the arguments about

derivative sovereign immunity advanced by

Petitioner. See Pet. Br. 35-50. The company submits

this amicus brief to provide additional background

about the situations in which contractors perform

delegated government functions, to discuss additional

practical considerations that support a robust

immunity doctrine, and to provide additional context

about the proper legal standard for derivative

sovereign immunity.

SUMMARY OF ARGUMENT

Since the Founding, federal, state, and local

government entities have routinely turned to private

individuals and companies to assist with the

performance of public functions. Private contractors

are able to offer specialized skills, knowledge, and

expertise that may not be possessed by the permanent

government workforce. Contractors also promote both

flexibility and efficiency because they can be engaged

on a project-by-project basis, thereby eliminating the

need to hire and train additional full-time government

employees.

Indeed, especially in the military context, the

government now routinely delegates to private

companies tasks that the armed forces once performed

themselves. During the wars in Iraq and Afghanistan,

the government relied extensively on _ private

companies such as amicus KBR to provide numerous

mission-critical combat support services that were

performed by uniformed personnel during previous

wars.

The derivative sovereign immunity doctrine

provides a critical protection for individuals and

companies that perform delegated government

functions. Sovereign immunity typically protects the

government from suits for money damages when the

government acts through full-time government

employees. The derivative sovereign immunity

doctrine bookends the government’s own sovereign

immunity by recognizing that the same protection

should apply regardless of whether the government

delegates a function to a private company or instead

performs it in-house. Either way, the activity is still

an “act of the government,” Yearsley v. W.A. Ross

Construction Co., 309 U.S. 18, 21-22 (1940) (emphasis

added), and should be entitled to the full range of

immunity protections for such sovereign acts. In other

words, immunity protections should turn on the

function being performed rather than the identity of

the person performing it.

For example, during the wars in Iraq and

Afghanistan, Army personnel operated “burn pits” for

waste disposal at many forward operating bases, but

the Army delegated this task to KBR at certain other

bases. It would be entirely illogical to have a rule in

which the Army is immune from suit for its own burn

pit operations, but KBR could face private claims for

money damages for performing the exact same

functions at a neighboring base pursuant to delegated

contractual authority.

This Court has explained at length why it is

critical to provide broad immunity for private

companies and individuals who perform delegated

government functions. Claims for money damages

against a contractor can impair the paramount

“interest in getting the government’s work done” every

bit as much as claims directly against the government.

Boyle v. United Technologies Corp., 487 U.S. 500, 505

(1988). If contractors are subject to liability for

performing tasks within the scope of their delegated

authority, then they may be forced to raise the price

they charge for those services, or may refuse to offer

such services to the government in the future. As a

result, the government would be deprived of the skills

and expertise that private companies and individuals

are able to offer. And even if contractors were not

deterred from working for the government, the threat

of liability may lead to “unwarranted timidity in the

performance of public duties.” Filarsky v. Delia, 132

S. Ct. 1657, 1665 (2012). Broad immunity for those

performing delegated government functions helps

ensure that “those who serve the government do so

‘with the decisiveness and the judgment required by

the public good.” Id.

Derivative sovereign immunity also has several

advantages over other doctrinal alternatives for

protecting those important interests. Rather than

requiring courts to fashion federal common law

defenses on an ad hoc basis, derivative sovereign

immunity takes advantage of Congress’ decisions

about the circumstances in which sovereign immunity

is waived. | Recognition of derivative sovereign

immunity doés not automatically mean that a suit will

be barred. But once derivative sovereign immunity is

implicated, the burden properly shifts to the plaintiff

to identify a waiver of sovereign immunity. The

derivative sovereign immunity doctrine is thus

straightforward to apply, and offers protection that is

no broader than the government's own sovereign

immunity for services it self-provides.

Several other practical considerations also

counsel in favor of a robust immunity doctrine. In

particular, the government itself already has a wide

array of tools to ensure that its contractors are

properly discharging their public functions in

accordance with the contracts and all other applicable

laws. Any private claims brought by third parties are

thus superfluous at best, and would risk interfering

with the government’s ability to manage and oversee

its contractors. Indeed, in this very case—and in

many of the cases in which KBR is currently a

defendant—the government approved and accepted

the contractors performance. Under those

circumstances, it is absurd to allow third-party

plaintiffs to challenge the contractor's actions (but not

the government’s) through private claims for money

damages.

Ss: = @

This Court need not break new ground to resolve

this case, as Yearsley already articulates the proper

standard for when derivative sovereign immunity

should apply: if a contractor is acting pursuant to

delegaced authority “validly conferred” by the

government, then “there is no liability” unless the

contractor “exceeded his authority”—.e., acted outside

the scope of the contract. 309 U.S. at 21-22. Thatisa

workable and well-established standard that is closely

related to the “scope of employment” test that applies

in many other areas of the law. Under that standard,

an action taken in good faith to discharge the

contractor's delegated functions can be within the

scope of the contract even if the plaintiff alleges that

it was negligent or improper. See, e.g., Aversa uv.

United States, 99 F.3d 1200, 1209-13 (1st Cir. 1996).

In contrast, derivative sovereign immunity would not

protect a contractor from liability for actions beyond

the scope of the contract—i.e., actions that are

“different in kind from that authorized, far beyond the

authorized time or space limits, or too little actuated

by a purpose to serve the master.” Restatement

(Second) of Agency §228(2) (1958).

The Ninth Circuit’s approach to derivative

sovereign immunity in the decision below rests on an

untenable interpretation of this Court’s precedents

and has little to recommend it. Rather than applying

the clear rule this Court established in Yearsley and

subsequent cases, the Ninth Circuit held—largely

based on policy concerns about compensating

plaintiffs—that Yearsley is inapplicable beyond the

specific factual context in which it arose. That holding

oversteps the boundaries of the proper role of a lower

court. Lower courts must faithfully apply the rules

and principles established by this Court, and not

dismiss governing Supreme Court precedents as

limited to the unique facts of those cases. This Court

should reverse the judgment of the Ninth Circuit and

reaffirm that private companies or individuals should

not be left “holding the bag” for money damages when

they perform delegated government functions for

which the government itself would be immune from

suit.

ARGUMENT

I. Contractors Such As KBR Provide A Wide

Range Of Indispensable Support Services

That The Government Would Otherwise

Have To Perform Itself.

Federal, state, and local government entities have

long relied on private individuals and companies to

assist with the performance of public functions.

Contractors such as amici routinely perform core

government functions pursuant to delegated

authority, including a broad array of distinctly

sovereign tasks that the government once

performed—and often continues to perform—itself.

That trend has been particularly pronounced in

the military context. Before the advent of the modern,

all-volunteer military, uniformed soldiers typically

performed combat support functions such as

maintaining ffacilities, transporting supplies,

preparing meals, and performing countless other

logistical and support tasks that are essential to the

war effort. But with the transition to the modern, all-

volunteer military—and the corresponding reduction

in the size of the armed forces—it is now often

impractical or infeasible for such tasks to be

performed by uniformed soldiers.

Instead, the military has increasingly relied on in-

theater service contractors to perform essential

combat support functions. Thus, whereas meals in

World War II may have been prepared by uniformed

soldiers on “KP duty,” today that function is routinely

performed by a combat support contractor such as

KBR. Using contractors in this manner allows for a

more efficient allocation of scarce resources and frees

up uniformed personnel to focus on their core

warfighting functions. According to the Department

of Defense, “the U.S. would currently be unable to arm

and field an effective fighting force” without

“contractor support.” Moshe Schwartz & Wendy

Ginsberg, Cong. Research Serv., R41820, Department

of Defense Trends in Overseas Contract Obligations i

(2013).

Amicus KBR has been at the forefront of these

developments, and has provided mission-critical

“combat service support” to the Army in recent

conflicts in the Balkans, Iraq, and Afghanistan

(among others). See supra at 2 (Commander of the

Multi-National Corps—Iraq describing KBR’s services

as “essential to the success of the military's combat

mission”). The Army defines “combat service support”

as the provision of “essential capabilities, functions,

activities, and tasks necessary to sustain all elements

of operating forces in theater at all levels of war.”?

Pursuant to an umbrella contract with the Army,

KBR has provided numerous combat support services

for the war effort, including building maintenance,

waste management, equipment repair, water

treatment, food preparation, and laundry service. See,

e.g., Aiello v. Kellogg Brown & Root Servs., 751

F. Supp. 2d 698, 700-02 (S.D.N.Y. 2011); Taylor v.

Kellogg Brown & Root Servs., 658 F.3d 402, 403-04,

406 (4th Cir. 2011); In re KBR, Inc., Burn Pit Litig.,

744 F.3d 326, 337-38 (4th Cir. 2014); Harris v. Kellogg

Brown & Root Servs., 724 F.3d 458 (3d Cir. 2013).

2 U.S. Army Field Manual 1-02, Operational Terms and

Graphics at 1-36 (2004).

For example, the Army routinely engaged KBR to

operate “burn pits’ for waste disposal at forward

operating bases in Iraq and Afghanistan. Needless to

say, there is no routine garbage service at a remote

outpost in an active war zone. And, at many bases, it

was too expensive or impractical to build trash

incinerators. Senior Army officials—up to and

including General David Petraeus—thus concluded

that open-air “burn pits” were often the safest, most

sanitary, and most efficient means of waste disposal.

See In re KBR Burn Pit Litig., 925 F. Supp. 2d 752 (D.

Md. 2013). At some bases, Army personnel would

operate the burn pit, while at other bases the Army

would delegate that task to KBR (subject at all times

to the Army’s plenary supervision and control).

KBR and other contractors have also been

responsible for transporting fuel, supplies, and

personnel, providing base security, and providing

interpretation and interrogation services. See, e.g.,

Carmichael v. Kellogg Brown & Root Servs., 572 F.3d

1271, 1275-78 (11th Cir. 2009); McMahon ov.

Presidential Airways, 502 F.3d 1331, 1336-37 (11th

Cir. 2007); Saleh v. Titan Corp., 580 F.3d 1, 2 (D.C.

Cir. 2009). And KBR personnel played an integral role

in restoring Iraq’s oil infrastructure to promote that

country’s economic independence, which was a critical

goal of both military and foreign policy officials. See

McManaway v. KBR, Inc., 554 Fed. Appx. 347, 348

(5th Cir. 2014) (Jones, J., dissenting from denial of

rehearing en banc).

In short, KBR personnel served in-theater

alongside and at the direction of uniformed military

personnel, performing tasks that have historically

been done by the military. And, unfortunately, like

uniformed military personnel, KBR personnel were

frequently the targets of enemy attacks. A number of

KBR personnel were injured or killed in the line of

duty while supporting the Army’s mission in Iraq and

Afghanistan. It is not an overstatement to say that

KBR has served on the front lines in the War on

Terror, the Iraq War, und many other global conflicts.

Il. The Derivative Sovereign Immunity

Doctrine Is A Critical Protection For

Contractors That Perform Delegated

Government Functions.

A. The Government Is Typically Immune

From Suit for Money Damages for

Services It Self-Provides.

Virtually all of the contracted services discussed

above are functions that the government previously

performed itself and, indeed, often continues to

perform itself. The Army may use a convoy of trucks

driven by soldiers to supply food, water, and fuel to a

remote outpost in Iraq, or it may engage a contractor

such as KBR to do the same. At some forward

operating bases, Army personnel would operate the

burn pit for waste disposal, while at other bases the

Army delegated that function to KBR. And, even

outside of combat situations, the Army may handle

critical support tasks (such as recruiting) in-house, or

it may delegate those functions to a contractor such as

Petitioner Campbell-Ewald.

When the government performs these services

itself, there is no question that it would be protected

by sovereign immunity from private claims for money

damages. The Federal Tort Claims Act provides a

general waiver of the United States’ sovereign

immunity, subject to a number of broad exceptions,

including: claims based on “the exercise or

performance or the failure to exercise or perform a

discretionary function”; claims “arising out of the

combatant activities of the military ... during time of

war’; and “[a]ny claim arising in a foreign country.”

28 U.S.C. §2680(a), G), (k). And this Court has long

held that the government is immune from private

claims under federal law unless Congress has clearly

indicated that such suits should be allowed. See, e.g.,

Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982);

Filarsky, 132 S. Ct. at 1665.

A claim by a private plaintiff challenging the

Army’s operation of a fuel convoy or burn pit in Iraq

would likely fall within several different FTCA

exceptions, and would thus be barred by sovereign

immunity. Unsurprisingly, few plaintiffs have even

attempted to sue the government directly for money

damages for alleged injuries arising out of the war

effort.

B. This Court Has Repeatedly Recognized

the Importance of Broad Immunity for

Those Who Perform Delegated

Government Functions.

The derivative sovereign immunity doctrine is a

critical bookend to the government's own sovereign

immunity, as it prevents plaintiffs from doing

indirectly what they cannot do directly. If the activity

in question involves a government function, it should

not matter in the slightest whether the government

performs that activity itself or instead engages a

private company or individual to handle it on the

government’s behalf. Either way, the activity is still

an act of the government, and should be entitled to the

full range of immunity protections for such sovereign

acts.

This Court has repeatedly acknowledged this

basic principle. Although the Court’s decisions have

arisen in a variety of factual and legal contexts, the

Court has made crystal clear that private contractors

should not be left “holding the bag” for money damages

when they perform delegated government functions

for which the government would be immune if sued

directly.

1. In Yearsley, a private company, acting

pursuant to a contract with the Army Corps of

Engineers, built dikes that caused erosion of the

plaintiffs’ land. 309 U.S. at 19. The plaintiffs sought

to recover money damages from the contractor for that

injury, but this Court unanimously rejected the

plaintiffs’ claims. As the Court explained, “if [the]

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.” Id.

at 20-21 (emphasis added).

The Court identified only two narrow

circumstances in which it would be appropriate to hold

a contractor liable for actions taken pursuant to a

government contract: if the contractor “exceeded his

authority,” or if that authority “was not validly

conferred” in the first place. Jd. at 21. In contrast,

when a company is acting within the scope of its

authority pursuant to a valid contract with the United

States, its actions effectively amount to “act[s] of the

government,” and any tort claims challenging those

actions are barred by derivative sovereign immunity.

Id. at 21-22.

This Court further emphasized the importance of

robust protection for government contractors in Boyle

vu. United Technologies, 487 U.S. 500 (1988). Although

Boyle involved preemption of state-law claims against

contractors, rather than derivative sovereign

immunity, much of this Court's reasoning fully

supports a broad doctrine of derivative sovereign

immunity. Indeed, the Court cited and relied upon

Yearsley's reasoning in crafting the preemption

framework that it adopted in Boyle. See id. at 505-06

(discussing Yearsley and noting that the federal

interest in providing immunity to contractors who

perform government functions “surely exists as much

in procurement contracts as in performance

contracts”). And the United States recognized just last

Term that “the principle of derivative sovereign

immunity informs the preemption analysis.” Br. for

United States as Amicus Curiae at 18-19, KBR, Inc. v.

Metzgar, No. 13-1241, 2014 WL 7185601 (U.S. Dec. 16,

2014) (“U.S. Metzgar Br.”). Whether the doctrine is

framed in terms of preemption or derivative sovereign

immunity, there is no question that it would he

“detrimental to military effectiveness” if “contractors

that the U.S. military employs durimg hostilities are

subject to the laws of fifty different states for actions

taken within the scope of their contractual

relationship supportamg the wmilitarys combat

operations.” Jd. at 21.

In Boyle, this Court emphasized that claims

against private contractors can impair the paramount

“interest in getting the Government’s work done,”

every bit as much as claims directly against the

government. 487 U.S. at 505. Plaintiffs suing

contractors often claim that they are merely seeking a

remedy for a private wrong, but this Court

emphatically disagreed. As the Court explained,

“(tlhe imposition of liability on Government

contractors will directly affect the terms of

Government contracts,” because “either the contractor

will decline to manufacture the design specified by the

Government, or it will raise its price.” Jd. at 507.

Either way “the interests of the United States will be

directly affected.” Id.

The Court also discussed at length the problems

that would result if plaintiffs could bring suits against

contractors that would be barred by sovereign

immunity if brought directly against the government.

In many cases, “/t}he financial burden of judgments

against the comtractors would ultimately be passed

through, substantially if not totally, to the United

States itself, since defense contractors will predictably

raise their prices to cover, or to insure against,

contingent liability. Jd. at 511-12. In short, “[i]t

makes little sense to insulate the Government against

financial liability for the judgment that a particular

feature of military equipment is necessary when the

Government produces the equipment itself, but not

when it contracts for the production.” Jd. at 512.

2. The Court addressed these issues again most

recently in Filarsky v. Delia, 132 S. Ct. 1657, 1665

(2012). That case specifically addressed the scope of

the qualified immunity defense to a claim under 42

U.S.C. §1983, but the Court's analysis drew upon the

same principles that underlie the derivative sovereign

immunity doctrine. See 132 S. Ct. at 1660. Indeed,

Filarsky is particularly illuminating because it makes

clear that immunity defenses must turn on the

function being performed rather than the identity of

the person performing that function.

The plaintiff in Filarsky—a firefighter who was

being investigated for abusing his sick leave—brought

claims against a number of individuals involved in the

investigation, including a private lawyer who had

been hired by the city to assist with the investigation.

Id. at 1660-61. The Ninth Circuit had held that this

lawyer could not claim the protection of qualified

immunity because he was “a private attorney and not

a City employee,” id. at 1661, but this Court

unanimously rejected that narrow interpretation of

the immunity doctrine.

As the Court explained, “[a]t common law, those

who carried out the work of government enjoyed

various protections from liability when doing so, in

order to allow them to serve the government without

undue fear of personal exposure.” Jd. at 1660. When

the immunity doctrines were developed in the

nineteenth century, governments “operated primarily

at the local level,” and [ljocal governments ...

generally had neither the need nor the ability to

maintain an established bureaucracy staffed by

professionals.” Jd. at 1662. Instead, governments

were to a significant extent “administered by members

of society who temporarily or occasionally discharge[d]

public functions.” Jd. Private citizens were “actively

involved in government work, especially where the

work most directly touched the lives of the people.” Id.

at 1663. Among many other roles, private citizens

routinely served as postmen, wharfmasters,

prosecutors, judges, sheriffs, and constables. Jd. at

1663-64.

In light of the broad array of public functions that

private citizens often performed, “it should come as no

surprise that the common law did not draw a

distinction between public servants and private

individuals engaged in public service in according

protection to those carrying out government

responsibilities.” Jd. at 1663. The protections

provided by the common law simply “did not turn on

whether someone ... worked for the government full-

time or instead for both public and private employers.”

Id. at 1664. And “examples of individuals receiving

immunity for actions taken while engaged in public

service on a temporary or occasional basis are as

varied as the reach of government itself.” Jd. at 1665.

The Court also explained at length why it was

critical to have broad immunity for those performing

government functions, regardless of whether those

functions were performed by government employees or

private citizens. Quite simply, immunity from suit

“protect{[s] government’s ability to perform its

traditional functions.” Jd. at 1665. It does so by

“helping to avoid ‘unwarranted timidity’ in

performance of public duties, ensuring that talented

candidates are not deterred from public service, and

preventing the harmful distractions from carrying out

the work of government that can often accompany

damages suits.” /d. Ensuring that “those who serve

the government do so ‘with the decisiveness and the

judgment required by the public good’ ... is of vital

importance regardless whether the individual sued as

a state actor works full-time or on some other basis.”

Id.

The Court further noted that unwarranted

disparities would exist if full-time government

employees were protected by immunity but those

acting pursuant to delegated authority were not.

Private individuals routinely “work in_ close

coordination with public employees, and face

threatened legal action for the same conduct.” Jd. at

1666. Because government employees “will often be

protected from suit by some form of immunity,

contract employees working alongside them “could be

left holding the bag—facing full liability for actions

taken in conjunction with government employees who

enjoy immunity for the same activity.” Jd. And that

liability risk would, in turn, hinder the government's

ability to “secure the services of private individuals”

who may possess “specialized knowledge or expertise.”

[d. at 1665-66.

+ 7 *

At bottom, Yearsley, Boyle, and Filarsky all

recognize the basic reality that it is essential for the

government to be able to work through private

companies or individuals who can offer unique

expertise or capabilities. But the fact that the

government is operating through a private contractor

does not change the fact that a government function is

still being performed. “(T]he same policy

considerations that justify immunity for government

employees can apply with equal force to private actors

when they are charged with implementing

government policies.” Murray v. Northrop Grumman

Info. Tech., Inc., 444 F.3d 169, 174-75 (2d Cir. 2006).

Thus, if the government's sovereign immunity

“protects a particular governmental function,” it is a

“small step to protect that function when delegated to

private contractors.” Mangold v. Analytic Serus., 77

F.3d 1442, 1447-48 (4th Cir. 1996).

Indeed, although derivative sovereign immunity

serves the same underlying interests as the

preemption doctrine applied in Boyle, it has

significant advantages over the doctrinal alternatives.

Rather than force courts to fashion the doctrine on an

ad hoc basis, derivative sovereign immunity allows

courts to rely on the decisions Congress has made in

waiving sovereign immunity and fashioning

exceptions to the waiver. Recognizing a robust

derivative sovereign immunity doctrine does not

automatically mean that a suit against a contractor

will be barred. But it does place the burden on the

plaintiff to identify a waiver of sovereign immunity,

which in turn requires consideration of Congress’

judgments in waiving sovereign immunity for certain

torts subject to certain exceptions. That result not

only makes policy sense, but focuses the analysis

where it properly belongs—namely, on the types of

sovereign functions for which the government would

be immune from suit if it performed those tasks itself.

C. Claims Against Contractors Performing

Delegated Functions Are Superfluous in

Light of the Government’s Plenary

Authority to Oversee Its Contractors.

In addition to the compelling reasons for a robust

immunity doctrine set forth in Yearsley, Boyle, and

Filarsky, several other practical considerations also

counsel in favor of broad immunity for individuals and

companies that perform delegated government

functions. In particular, it is critical to keep in mind

that the government itself has plenary authority to

oversee and regulate its contractors’ actions, and to

take steps to remedy any alleged deficiencies in a

contractor's performance. Thus, any private suits for

money damages against a contractor would not only

be superfluous, but would also interfere with the

government's ability to manage its contractors and

delegate functions as it deems appropriate.

The government has numerous tools at its

disposal to ensure that contractors are properly

performing their delegated functions in compliance

with the terms of the contract and all relevant laws.

Most obviously, if a contractor does not meet the

contract's specifications or acts in violation of the law,

the government can assert a breach of the contract or

can seek to terminate it. For example, the U.S. Agency

for International Development recently suspended

two contractors for unsatisfactory work on housing

projects in Haiti. And, more prominently, following

the disastrous launch of Healthcare.gov, the

government ended its contract with the primary

outside vendor for that site.« The government has

both the tools and the incentives to ensure that its

3 Second USAID Contractor Suspended Following Caracol

Housing Debacle, Ctr. for Econ. and Policy Research Blog, (Mar.

30, 2015), http://perma.cc/3nae-jvph.

4 See Juliet Eilperin & Amy Goldstein, Obama administration

to end contract with CGI Federal, company behind

HealthCare.gov, Washington Post, Jan. 10, 2014.

contractors are following the terms of the contract and

all other applicable laws.

Moreover, a contractor that performs poorly or

fails to comply with the law may be shut out of future

government contracts. Government agencies have

inherent authority to use “suspension and debarment”

procedures to prevent contractors from bidding on

government work for a specified period of time if they

have engaged in various forms of misconduct. See,

e.g., Gonzalez v. Freeman, 334 F.2d 570, 576-77 (D.C.

Cir. 1964). Suspension or debarment can be ordered

for serious misconduct such as fraud or a criminal

conviction, but can also be imposed for any other

“compelling” reason that casts doubt on the

contractor's “present responsibility.”5 For example,

contractors have been suspended or debarred for:

violating the Clean Air Act or Clean Water Act; failing

to comply with drug-testing or affirmative action

requirements for employees; and failing to comply

with certain immigration and labor requirements. /d.

The federal government has sharply increased its use

of suspensions and debarments in recent years.®

Given all of these built-in checks on contractors’

conduct and performance, private remedies are

5 See generally Kate M. Manuel, Cong. Research Serv.,

RL34753, Debarment and Suspension of Government

Contractors: An Overview of the Law, Including Recently Enacted

and Proposed Amendments, (2012), http://1.usa.gov/1L34YDU.

6 In FY2014, federal agencies and departments reported 5,179

suspensions, proposed debarments, and debarments, an 8%

increase over FY2013 and a three-fold increase since FY2009.

Neil Gordon, Suspension and Debarment by the Numbers, Project

on Gov't Oversight (Apr. 24, 2015), http://perma.cc/ef4h-bfu2.

unnecessary at best, and would often prove

counterproductive. Indeed, it would be especially

absurd to allow private, third-party plaintiffs to sue a

contractor for money damages based on its

performance of otherwise-immune government

functions where the government itself has approved

and accepted the contractors performance. For

example, the Army consistently rated KBR’s work in

Iraq and Afghanistan as “Good,” “Very Good,” or

“Excellent,” and even awarded the company

significant “award fees” for its performance.’ Yet a

number of private plaintiffs have nonetheless sought

to challenge KBR’s performance of those very same

contractual duties. Here, too, Respondent seeks

money damages from Campbell-Ewald even though

the Navy reviewed and approved the text messages in

question. See Pet. Br. 4-6.

Under these circumstances, a suit against KBR or

Campbell-Ewald is no different in practice from a suit

directly against the government that seeks to second-

guess its delegation of authority. The derivative

sovereign immunity doctrine helps ensure that the

government—rather than private plaintiffs—has the

ultimately responsibility to oversee its contractors,

and that those contractors are not held liable for what

the government considers a job well done.

7 See, e.g., Press Release, KBR Receives LogCAP IIi Award Fee

(May 12, 2010), http://perma.cc/N6DE-KDU39.

III. Derivative Sovereign Immunity Should

Protect Contractors From Liability For

Claims Arising Out Of Delegated

Government Functions Within The Scope Of

Their Contractual Authority.

A. The Ninth Circuit’s Narrow

Interpretation of the Derivative

Sovereign Immunity Doctrine Is Wholly

Without Merit.

The Ninth Circuit’s narrow and wooden

interpretation of the derivative sovereign immunity

doctrine in the decision below does not withstand

scrutiny. See Pet. Br. 35-50.

Because Yearsley involved claims for property

damage arising out of a public works project, the

Ninth Circuit held that the derivative sovereign

immunity doctrine is similarly limited to “claims

arising out of property damage caused by public works

projects.” Pet.App.15a. Applying that logic, the Ninth

Circuit would presumably hold that Marbury v.

Madison, 5 U.S. 137 (1803), is limited to cases

involving the delivery of commissions, and Gibbons v.

Ogden, 22 U.S. 1 (1824), is limited to cases involving

steamboat monopolies. This is obviously not the

proper way for a lower court to apply Supreme Court

precedent. It is the duty of a lower court to apply the

rules and principles established by this Court in the

relevant precedents, not to mechanically limit this

Court’s decisions to the factual contexts in which they

arose.

In all events, the Ninth Circuit's attempt to limit

Yearsley to its facts fails. The Ninth Circuit did not

even attempt to explain why derivative sovereign

immunity should apply in cases involving “property

damage caused by public works projects,” but should

not apply in cases involving personal injuries (such as

alleged injuries from a burn pit in Iraq) or other

alleged harms (such as receiving an unwanted text

message). Yearsley very explicitly states that there

are only two circumstances in which a contractor

performing a delegated government function should

be held liable to a third party for money damages:

where the contractor “exceeded his authority,” or

where that authority “was not validly conferred” by

the government. 309 U.S. at 21. This Court did not

remotely suggest that this was a special protection

that applied only to public-works contractors sued for

damaging someone’s property.

The Ninth Circuit also asserted that this Court’s

holding in Yearsley turned the availability of an

“alternate remedy” for the plaintiffs (via a takings

claim against the government). Pet.App.15a-16a.

But, once again, nothing in this Court’s decision

establishes that limitation. To the contrary, the Court

made crystal clear that “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 tts will.” Yearsley, 309 U.S. at 20-21

(emphasis added). The fact that the plaintiff in

Yearsley was able to pursue a takings claim against

the government might have made that a particularly

easy case, but it was by no means essential to this

Court's holding. Sovereign immunity, whether

derivative or direct, usually leaves a plaintiff without

a remedy. Congress is well aware of that, which is

why it has waived sovereign immunity in some

circumstances but not others.

Other courts have correctly recognized that the

availability of an alternative remedy for money

damages is not a sine qua non for application of

derivative sovereign immunity under Yearsley (or any

other sovereign immunity doctrine, for that matter).

For example, in Ackerson v. Bean Dredging, 589 F.3d

196, 202-03 (5th Cir. 2009), the plaintiffs brought

claims for “negligence, breach of implied warranty,

concealment, and violation of environmental-

protection laws,” alleging that a group of dredging

contractors took actions that amplified § the

environmental damage caused by Hurricane Katrina.

There was no suggestion whatsoever that the

plaintiffs could have brought those state-law claims

against the government in a different forum, yet that

posed no bar to the Fifth Circuit's application of

derivative sovereign immunity. See id. at 204 (“We

agree with the district court’s ruling that ... the

Contractor Defendants are entitled to government-

contractor immunity under Yearsley.”).

The Ninth Circuit also expressed policy-based

concerns that application of the derivative sovereign

immunity doctrine would prevent contractors from

being “held accountable for their wrongful conduct.”

Pet.App.20a. But, as noted above, the government

always retains authority to monitor and supervise its

contractors and hold them “accountable” for any

shortcomings in their performance. See supra at 19-

22. Here, for example, if the Navy believed that

Campbell-Ewald was violating the terms of its

contract or the TCPA, it could have instructed the

company to cease any improper practice. And, if the

company persisted despite that warning, the

government could have sought to terminate the

contract or could have selected a different company to

handle its recruiting services when the contract was

up for renewal. It makes no sense at all to allow

private plaintiffs to challenge Campbell-Ewald’s

actions under the contract given that the Navy closely

monitored the company’s conduct and approved its

performance.

Finally, the Ninth Circuit suggested that the

derivative sovereign immunity doctrine should be

applied narrowly and “with the utmost care” because

it will result in plaintiffs being “denied compensation.”

Pet.App.20a. But that clear statement rule gets

matters exactly backwards. After all, “den[ying]

compensation” is just the obverse of “protecting the

fisc,” which is the raison d'etre of any immunity

doctrine. Indeed, with respect to sovereign immunity,

this Court applies a strong presumption that there has

not been a waiver or abrogation of the government's

immunity absent a clear indication to the contrary.

See, e.g., Price v. United States, 174 U.S. 373, 375-76

(1899) (it is an “axiom of our jurisprudence” that “[t]he

government is not liable to suit unless it consents

thereto, and its liability in suit cannot be extended

beyond the plain language of the statute authorizing

it”); Sossamon v. Texas, 131 S. Ct. 1651, 1657-58

(2011) (no waiver of state sovereign immunity absent

a “clear” or “unequivocal” waiver). The Court has long

applied this clear-statement rule even though the

result will be to “deny compensation” to many

plaintiffs who seek to sue the government for money

damages.

In all events, the Ninth Circuit’s concerns about

an overly broad derivative sovereign immunity

doctrine are misplaced. Only where Congress has

determined that there should not be a waiver of the

government's own sovereign immunity will derivative

sovereign immunity apply. And, even then, there may

still be alternative remedies available to plaintiffs who

are actually injured. For example, as the United

States has explained, even if derivative sovereign

immunity would bar private suits for money damages

against battlefield support contractors such as KBR,

“other legal avenues for obtaining compensation are

available” for service members or other personne]

injured in the line of duty. U.S. Metzgar Br. at 17-18.

Thus, even though derivative sovereign immunity

does not turn on the availability of an alternative form

of compensation, the absence of a private claim for

money damages against a contractor hardly suggests

that legitimately injured individuals will be left with

no remedy whatsoever.

B. The Proper Test Should Provide That

Contractors Are Immune From Suit for

Actions Taken Within the Scope of a

Validly-Issued Contract.

The Court need not break new ground to resolve

this case because the proper test for derivative

sovereign immunity is already set forth in Yearsley:

8 In particular, the Department of Veterans Affairs provides

compensation for soldiers “[flor disability resulting from personal

injury suffered ... in [the] line of duty. 38 U.S.C. §§1110, 1131.

And the Defense Base Act, 42 U.S.C. §1651, establishes a federal

workers’ compensation system for employees injured or killed

while working under a government contract.

when a contractor is performing delegated

government functions pursuant to a validly issued

contract, there can be no liability unless the contractor

“exceeded his authority”—1.e., acted outside the scope

of the contract. 309 U.S. at 21.9 That rule is eminently

reasonable. If a contractor is performing delegated

tasks within the scope of the contract, then those tasks

are effectively government functions in their own right

and should be protected by the same immunities as if

they were performed by full-time government

employees. See Yearsley, 309 U.S. at 21-22 (actions

taken pursuant to a valid contract are “act[s] of the

government’).

Whether a certain action was taken within the

scope of a contract is also a workable and well-

established legal standard. Indeed, it is essentially

identical to the inquiry under the Westfall Act that is

used to determine when federal employees are

immune from suit. That statute precludes any civil

action against a federal employee for “injury or loss of

property, or personal injury or death arising or

resulting from the negligent or wrongful act or

omission of any employee of the Government while

? The United States has advanced a similar test for preemption

of state-law tort claims against battlefield support contractors, to

ensure that “contractors performing essential tasks in an active

theater of war’ are not “subject to the laws of fifty different

states.” U.S. Metzgar Br. at 7. The United States argued that

state-law claims against a contractor should be found preempted

if: (1) the claim would have been barred by sovereign immunity

if brought directly against the government; and (2) the contractor

was “acting within the scope of its contractual! relationship with

the federal government at the time of the incident out of which

the claim arose.” Id. at 15-16.

acting within the scope of his office or employment. 28

U.S.C. §2679(b)(1) (emphasis added). The scope-of-

employment inquiry is also informed by common law

principles of respondeat superior, which address when

a principal should be held liable for the acts of an

agent. See Jamison v. Wiley, 14 F.3d 222, 227 n.2 (4th

Cir. 1994) (Westfall Act immunity evaluated “by

reference to the respondeat superior law of the state

in which the conduct occurred”).

Critically, an action can be within the scope of a

government contract even if the plaintiff alleges that

it was negligent or improper. See, e.g., United States

v. Smith, 499 U.S. 160 (1991) (alleged medical

malpractice by Army physician occurred within the

scope of employment); Aversa v. United States, 99 F.3d

1200, 1209-13 (1st Cir. 1996) (allegedly slanderous

press release was within the scope of employment for

IRS agent even though it was “contrary to his

employer's policies and rules”); Coyne v. United States,

233 F. Supp. 2d 135, 140-42 (D. Mass. 2002) (FBI

agent's accidental disclosure of identity of confidential

informant was within the scope of employment).'°

Courts have generally found an action to be within the

scope of employment if it was “authorized by the

employer or incidental to authorized duties; if it was

10 Contracts that involve dangerous, uncertain, or quickly-

evolving situations may include a promise by the government to

indemnify the contractor for any litigation or civil liability arising

out of the agreement, “whether or not caused by the negligence of

the Contractor or of the Contractor's agents, servants, or

employees. 48 C.F.R. §52.228-7. The fact that allegedly

negligent conduct may be covered by an indemnification clause

only underscores that such conduct still falls within the scope of

the contract.

done within the time and space limits of the

employment; and if it was actuated at least in part by

a purpose to serve an objective of the employer.”

Aversa, 99 F.3d at 1210."!

In contrast, derivative sovereign immunity would

not protect a contractor from liability if its action was

beyond the scope of the contract—i.e., if it was

“different in kind from that authorized, far beyond the

authorized time or space limits, or too little actuated

by a purpose to serve the master.” Restatement

(Second) of Agency §228(2) (1958); see also Etherage v.

West, 587 Fed. Appx. 390, 391 (9th Cir. 2014)

(applying Restatement test). Derivative sovereign

immunity thus would not apply if, for example, a

contractor employee took a vehicle on a joyride or

committed sexual assault while stationed on a

military base. But when a contractor performs

services in a good-faith effort to discharge its

contractual duties—as Petitioner did here, see Pet. Br.

43-50, and as KBR unquestionably did while

supporting the Armys mission in Iraq and

Afghanistan—it should retain the full panoply of

protections for those performing delegated

government functions.

1! Unlike the Ninth Circuit, the Fourth Circuit has correctly

recognized that Yearsley is not limited to property damage claims

arising out of public works contracts. See In re KBR, 744 F.3d at

342-44. But the Fourth Circuit has nonetheless held that a

contractor is not entitled to the protection of that doctrine unless

it has fully complied with all aspects of the contract. See id. at

345 (derivative sovereign immunity applies only if the contractor

“acted in conformity with” its contract). As the cases cited above

make clear, that is an overly narrow interpretation of the “scope

of the contract” standard.

CONCLUSION

For the foregoing reasons, this Court should

reverse the Ninth Circuit's profoundly ‘lawed