Source: http://openjurist.org/77/f3d/1442
Timestamp: 2013-12-12 06:52:18
Document Index: 52974005

Matched Legal Cases: ['§ 2679', '§ 2679', '§ 1447', '§ 1447', '§ 1447', '§ 1447', '§ 2680']

77 F3d 1442 Mangold v. Analytic Services Incorporated a | OpenJurist
77 F. 3d 1442 - Mangold v. Analytic Services Incorporated a	Home77 f3d 1442 mangold v. analytic services incorporated a
77 F3d 1442 Mangold v. Analytic Services Incorporated a 77 F.3d 1442
Karen W. MANGOLD; Sanford D. Mangold, Colonel, Plaintiffs-Appellees,v.ANALYTIC SERVICES, INCORPORATED (The Anser Corporation);John Fabian, Doctor, individually, and in his capacity asofficer and agent of the Analytic Services, Incorporated(The Anser Corporation); Paul A. Adler, individually, andin his capacity as officer and agent of the AnalyticServices, Incorporated (The Anser Corporation),Defendants-Appellants,andUnited States of America, Defendant.
No. 94-1307.
Argued Jan. 31, 1995.Decided March 12, 1996.
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (CA-93-1635-A).
ARGUED: Thomas R. Bagby, Epstein, Becker & Green, P.C., Washington, DC, for Appellants. Darrell Madison Allen, Darrell M. Allen, P.C., Fairfax, Virginia, for Appellees. ON BRIEF: Bennett Boskey, Volpe, Boskey & Lyons, Washington, DC, for Appellants.
Reversed and remanded by published opinion. Judge NIEMEYER wrote the opinion of the court on immunity, in which Senior Judge PHILLIPS joined; Senior Judge PHILLIPS wrote the opinion of the court on subject matter jurisdiction, in which Judge NIEMEYER joined; Judge MICHAEL wrote a dissenting opinion.
NIEMEYER, Circuit Judge, delivered the opinion of the court in Parts I, III, and IV (on the issue of absolute immunity), and PHILLIPS, Senior Circuit Judge, delivered the opinion of the court on the issue of subject matter jurisdiction.
We must decide whether absolute immunity shields a government contractor from liability arising from statements it made in response to government investigators during an official investigation. In response to Air Force queries relating to charges of misconduct by an Air Force colonel in his dealings with a private government contractor, the contractor answered questions under oath and provided other information. When the colonel sued the contractor under common law for injury to the colonel's reputation and position, the contractor asserted the defense of absolute immunity, which the district court rejected. Because we conclude that the government contractor should not be subjected to state law tort claims based on statements it made in response to an official government investigation about its dealings with the government, we reverse the district court's ruling denying such immunity.
* On the initiative of Lt. Col. James Rooney, a United States Air Force officer assigned to the Air Force's Resource Allocation team at the Pentagon, the Air Force Office of Special Investigations and the Inspector General opened an inquiry into the practices of Col. Sanford D. Mangold, who headed the team.1 The investigation was undertaken to determine whether Col. Mangold abused his authority in his treatment of subordinates and in his dealings with the private sector. One aspect of the investigation focused specifically on allegations that Col. Mangold improperly exerted his influence to pressure a government contractor, Analytic Services, Inc. (which the parties refer to as "ANSER"), to hire a Mangold family friend. ANSER is a private corporation which contracts with the U.S. government to provide engineering and analysis services in connection with government acquisitions, particularly by the Air Force.
The investigation into Col. Mangold's activities was conducted by Air Force Brig. Gen. Raymond Huot. General Huot and his staff approached ANSER in June 1993 and inquired about Col. Mangold's effort to have ANSER hire Mrs. Betsy Worrell, a close friend of Col. Mangold's wife. Three ANSER officers responded to the investigators' questions and provided cassette tapes of telephone messages left by Col. Mangold on ANSER's telephone answering machine in November and December 1992.
In particular, Dr. John M. Fabian, ANSER's CEO, told Gen. Huot that during the late fall of 1992, Col. Mangold, on behalf of the Air Force, had requested use of ANSER's consulting services, which were available to units of the government on an open contract. In conjunction with his request, Col. Mangold suggested that ANSER hire Mrs. Worrell to provide those services. Despite the fact that Mrs. Worrell was not qualified to perform the job, Col. Mangold pressed the matter, implying that his team's use of ANSER's services depended on ANSER hiring Mrs. Worrell. Dr. Fabian stated that he told Col. Mangold, "I value the name of this company and I'm not interested in hiring somebody who was a friend of your wife's, in order to provide contract support." Dr. Fabian explained to Col. Mangold that because Mrs. Worrell did not have a college degree, she did not possess the preestablished qualifications necessary to provide the services Col. Mangold requested. According to Dr. Fabian, Mangold responded, "[I]f you can't do this I'll find a contractor who will." ANSER's vice president, Paul A. Adler, confirmed Dr. Fabian's testimony.
Transcripts of Col. Mangold's telephone messages left on ANSER's telephone answering machine during the period corroborate these witnesses' statements. These transcripts contain several messages in which Mangold repeatedly pressured ANSER to hire Mrs. Worrell. He stated in various messages:
I'm real frustrated that you guys are not hiring Mrs. Worrell. I think that ah, this was an excellent opportunity for ANSER to get involved with XO [the team headed by Col. Mangold], to show some responsiveness, and work with us.
I would like to, uh, talk to you also about the fact that this is really a test case for ANSER and XO working together and if this one works out, we could probably see more opportunities for ANSER....
I've run out of maneuvering room on, uh, uh, using other options in getting an individual like Mrs. Worrell on board by the end of the, ah, ah, by the end of this week, first part of next week when we expect the avalanche of budgetary work to come in.
When it became clear that ANSER would not accede to his entreaties, Col. Mangold canceled the Air Force's request for contract support from ANSER. According to the answering machine transcripts, he stated:
While the individual you sent to us and brought over is very pleasant and, ah, and uh, intelligent young lady, we no longer need to have any ANSER support.... I want to make it absolutely, indelibly, and totally clear that any ANSER support for the Space CQ Dive team will not be provided through this office.... I appreciate John your help and all your ability to, in bringing an individual in the office, but I do not need nor do I contemplate ever needing any ANSER support for this Space CQ Dive Team.
Col. Mangold's immediate subordinate, Lt. Col. James Rooney, who was familiar with Col. Mangold's efforts on behalf of Mrs. Worrell, was concerned about the impropriety of Col. Mangold's actions and consulted with another subordinate of Col. Mangold, Capt. Anthony J. Russo, about his concern. As Capt. Russo related the events:
Lt. Col. Rooney took me aside and also expressed serious concerns about the comments made to ANSER. He stated that he had already complained to Lt. Col. Mushaw and Col. Kingsbery (both from XOFS) and that he was going to meet with M Gen Hard (SAF/AQS) whom he knew well from a previous assignment. Lt. Col. Rooney stated that Col. Mangold was about to go too far and that he did not want to be involved in anything that might be illegal. He asked for my support. I agreed that Col. Mangold had made comments that could be misinterpreted by ANSER and promised that I would tell the truth about the meeting at ANSER, if asked. However, I told him that I would not personally go outside of our chain of command, and that I wanted to more forcefully express my objections directly to Col. Mangold before I would think of going over his head.
Following Lt. Col. Rooney's complaints to superior officers, the Air Force commenced an internal Air Force investigation, and Col. Mangold was transferred from his position as head of the Resource Allocation team.
Several months later, Col. Mangold and his wife, Karen, filed suit in a Virginia state court against ANSER, its executives, and Lt. Col. Rooney for injuring their reputations and Col. Mangold's position with the United States Air Force and for intentional infliction of emotional distress. The seven-count complaint alleges both that the defendants defamed Col. and Mrs. Mangold by fabricating the charges of misconduct and that the defendants conspired to damage Col. Mangold's reputation and position. The Mangolds demand $15 million in compensatory damages and $5 million in punitive damages.
Lt. Col. Rooney removed the case to the United States District Court for the Eastern District of Virginia under 28 U.S.C. § 2679(d)(2), and the United States substituted itself for Lt. Col. Rooney as the party defendant under the Federal Tort Claims Act, 28 U.S.C. § 2679(d)(1). After the United States filed a motion for summary judgment for lack of jurisdiction,2 the Mangolds voluntarily dismissed the United States as a party defendant.
ANSER and its employees also filed a motion for summary judgment, asserting, among other defenses, immunity for claims arising out of their responses to questioning and requests for information in the course of an official Air Force investigation into ANSER's contractual arrangement with the Air Force. The district court determined that it had discretion to retain jurisdiction over the case, even though the United States was no longer a party, to decide ANSER's immunity defense. After denying ANSER's immunity defense, the court remanded the case to the state court, purportedly under 28 U.S.C. § 1447(c).
This appeal was taken from the district court's ruling denying absolute immunity. See Nixon v. Fitzgerald, 457 U.S. 731, 102 S.Ct. 2690, 73 L.Ed.2d 349 (1982) (denial of claim of absolute immunity is immediately appealable under collateral order doctrine).
As a threshold matter, we must address the suggestion that we lack subject matter jurisdiction to hear this appeal because the district court's ruling on absolute immunity was included in an order for remand, and certain remand orders are not reviewable. See 28 U.S.C. § 1447(d); Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976) (limiting application of § 1447(d) to remand orders issued under § 1447(c)).
The appeal in this case challenges only the district court's ruling on absolute immunity, not its subsequent remand to state court. The fact that the two dispositions--denial of immunity and remand to state court--were included in a single order does not deprive us of jurisdiction to review the immunity ruling. See Waco v. U.S. Fidelity & G. Co., 293 U.S. 140, 55 S.Ct. 6, 79 L.Ed. 244 (1934). In Waco, the Court held that it had jurisdiction to review an order dismissing a party, even though the dismissal was included in a nonreviewable order remanding the case to state court. See also Jamison v. Wiley, 14 F.3d 222, 233 (4th Cir.1994) (permitting review of a party-substitution order despite its inclusion in same paper with order of remand).
Accordingly, I conclude that we have jurisdiction to review the district court's interlocutory order denying the appellants absolute immunity.3 See Nixon, 457 U.S. at 743, 102 S.Ct. at 2697-98. Alternatively, I concur in Judge Phillips' concurring opinion directed to the jurisdictional issue.
Much of the law of governmental immunity has been developed as part of the federal common law to protect a sphere of discretionary governmental action from the potentially debilitating distraction of defending private lawsuits. See, e.g., Barr v. Matteo, 360 U.S. 564, 569-73, 79 S.Ct. 1335, 1338-41, 3 L.Ed.2d 1434 (1959) (plurality opinion); Westfall v. Erwin, 484 U.S. 292, 295, 108 S.Ct. 580, 583, 98 L.Ed.2d 619 (1988). In Barr and Westfall, the Court recognized an absolute immunity from state law tort liability for federal officials exercising discretion while acting within the scope of their employment. Protecting government actors with absolute immunity, however, has its costs, since illegal and even offensive conduct may go unredressed. Such immunity also tends to undermine the basic tenet of our legal system that individuals be held accountable for their wrongful conduct. See Westfall, 484 U.S. at 295, 108 S.Ct. at 583. For these reasons, the common law immunity recognized in Barr and Westfall is afforded only to the extent that the public benefits obtained by granting immunity outweigh its costs. Id. at 296 n. 3, 108 S.Ct. at 583 n. 3.4
The absolute immunity recognized in Barr and Westfall is sufficiently broad to protect, as part of the sphere of discretionary governmental action, official decisions to investigate suspected fraud, waste, and mismanagement in the administration of government contracts. Official investigations of that type are critical to the efficient conduct of government and their value outweighs the interest of affording individuals redress against persons participating in the investigations for wrongful action. And because such investigations can be effective only if investigators are able to obtain the cooperation of witnesses, cooperating government employees should also be protected through immunity. If government employees cooperating in such investigations are left exposed to lawsuits filed by those under investigation, they might be reluctant to cooperate, even if they were eyewitnesses to improper conduct. Equally as important, in the absence of such protection, they might distort information in an effort to avoid exposure to tort liability.
Whether Barr and Westfall immunity also extends to persons in the private sector who are government contractors participating in official investigations of government contracts is less clear. Even though private persons under contract with the government act only partly in the public sphere, the public interest may demand that immunity protect them to the same extent that it protects government employees. The public interest in facilitating the government's policing of its contracting process--a process subject to the temptation of conflicting self interest and to the risks of undue influence and corruption--is perhaps as important as the public interest in facilitating the government's policing of itself. And to expose private government contractors who are responding to and cooperating with such investigations to the risk of state tort claims would chill the investigative effort to the same extent that exposing cooperating government employees would. Ultimately, to allow such tort liability, whether against government employees or private contractors, would tend to make government less efficient.
Extending such immunity to the private sector, in the narrow circumstances where the public interest in efficient government outweighs the costs of granting such immunity, comports with the principles underlying the immunity recognized in Barr and Westfall, since the scope of that immunity is defined by the nature of the function being performed and not by the office or the position of the particular employee involved. As the Court in Barr explained:
The privilege is not a badge or emolument of exalted office, but an expression of a policy designed to aid in the effective functioning of government. The complexities and magnitude of governmental activity have become so great that there must of necessity be a delegation and redelegation of authority as to many functions, and we cannot say that these functions become less important simply because they are exercised by officers of lower rank in the executive hierarchy.
360 U.S. at 572-73, 79 S.Ct. at 1340. If absolute immunity protects a particular governmental function, no matter how many times or to what level that function is delegated, it is a small step to protect that function when delegated to private contractors, particularly in light of the government's unquestioned need to delegate governmental functions. The government cannot perform all necessary and proper services itself and must therefore contract out some services for performance by the private sector. When the government delegates discretionary governmental functions through contracting with private contractors, therefore, the same public interest identified in Barr and Westfall--the interest in efficient government--demands that the government possess the ability meaningfully to investigate these contracts to ensure that they are performed without fraud, waste, or mismanagement.
Extending immunity to private contractors to protect an important government interest is not novel. See, e.g., Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). In holding that a government contractor providing helicopters for the military was not liable under state tort law for injury caused by a design defect, the Court in Boyle equated the liability of a private procurement contractor with that of a government official who might have been called upon to design and manufacture the same product:
The present case involves an independent contractor performing its obligation under a procurement contract, rather than an official performing his duty as a federal employee, but there is obviously implicated the same interest in getting the Government's work done.
Id. at 505, 108 S.Ct. at 2514-15 (emphasis added). After observing that designing a helicopter for military performance is "assuredly a discretionary function," id. at 511, 108 S.Ct. at 2518, and that a government official performing the same function would therefore be protected by immunity under 28 U.S.C. § 2680(a) (Federal Tort Claims Act), the Court concluded:
It 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. In sum, we are of the view that state law which holds Government contractors liable for design defects in military equipment does in some circumstances present a "significant conflict" with federal policy and must be displaced.
487 U.S. at 512, 108 S.Ct. at 2518 (footnote omitted). See also Yearsley v. Ross Constr. Co., 309 U.S. 18, 20-21, 60 S.Ct. 413, 414-15, 84 L.Ed. 554 (1940).
We believe that the rationale for the protections articulated in Barr, Westfall, and Boyle also applies to the case before us to the extent that this case involves a discretionary governmental function which has been delegated to the private sector. This conclusion, however, does not fully resolve the issue of whether persons cooperating with an official government investigation, as distinguished from persons conducting the investigation, are protected. While the decision to conduct an investigation may be a discretionary act involving an exercise of judgment, see Westfall, 484 U.S. at 300, 108 S.Ct. at 585-86, and as such may be protected by absolute immunity, the reasoning in Westfall provides only a partial foundation for protecting witnesses cooperating in an official investigation. The full justification for such immunity also draws on principles of that immunity which protects witnesses in government-sponsored investigations and adjudications.
The law provides immunity of varying degrees to both private citizens and public officials engaged in investigating and adjudicating disputes in order to ensure a meaningful government-sponsored judicial system. Thus, an absolute immunity shields witnesses testifying in court, see Briscoe v. LaHue, 460 U.S. 325, 335-36, 103 S.Ct. 1108, 1115-16, 75 L.Ed.2d 96 (1983), and testifying before a grand jury. See Anthony v. Baker, 955 F.2d 1395, 1400 (10th Cir.1992); Kincaid v. Eberle, 712 F.2d 1023 (7th Cir.), cert. denied, 464 U.S. 1018, 104 S.Ct. 551, 78 L.Ed.2d 725 (1983). And immunity also has been held to extend to witnesses giving testimony to public prosecutors, see Holmes v. Eddy, 341 F.2d 477, 480 (4th Cir.), cert. denied, 382 U.S. 892, 86 S.Ct. 185, 15 L.Ed.2d 149 (1965). The underlying policy for the grant of such immunity is long-standing:
In the words of one 19th-century court, in damages suits against witnesses, "the claims of the individual must yield to the dictates of public policy, which requires that the paths which lead to the ascertainment of truth should be left as free and unobstructed as possible." Calkins v. Sumner, 13 Wis. 193, 197 (1860). A witness's apprehension of subsequent damages liability might induce two forms of self-censorship. First, witnesses might be reluctant to come forward to testify.... And once a witness is on the stand, his testimony might be distorted by the fear of subsequent liability.
Briscoe, 460 U.S. at 332-33, 103 S.Ct. at 1114 (citation omitted). In the absence of a privilege for such witnesses, the exposure to tort lawsuits would chill government-sponsored investigatory and adjudicatory efforts, threatening to undermine their reliability and therefore to erode confidence in the judicial function of government. Those negative consequences would far outweigh the benefit of giving individuals a right of redress for false testimony.
Accordingly, in the circumstances of this case, we recognize an absolute immunity t