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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0321%3A18

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2015

## Text

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

il

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

lV

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

vl

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.

2

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.

3

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

4

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

5

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.

6

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.

7

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.

8

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

9

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).

10

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

11

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

12

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

13

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

14

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

15

“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

16

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.

17

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

18

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

19

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

20

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.

21

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.

22

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.

23

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

24

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

25

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

26

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.

27

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.

28

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.

29

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.

30

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.

31

CONCLUSION

For the foregoing reasons, this Court should
reverse the Ninth Circuit's profoundly ‘lawed
interpretation of the derivative sovereign immunity
doctrine.

Respectfully submitted,

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0321%3A18. Public record. Not legal advice.