Opinion ID: 18489
Heading Depth: 2
Heading Rank: 4

Heading: Supremacy Clause and State Law Claims

Text: 37 Appellants brought state law claims for civil conspiracy, invasion of privacy, interference with economic advantage and benefit, intentional infliction of emotional distress, 3 and fraud and deceit. Appellants contend that the district court erred when it dismissed the Appellants' state law claims on the ground that they were barred by the federal supremacy clause. 4
38 The individual agents' immunity from suit under Texas law is not at issue. The Attorney General certified under 28 U.S.C. 2679(d)(1) that the agents acted within the scope of their employment at the time of the events at issue, thereby substituting the United States as defendant on those claims, see Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 420 (1995). This procedure is not challenged.
39 The district court also dismissed Appellants' state law claims against the private defendants under the federal supremacy clause. While this Court has not addressed the issue of whether the supremacy clause preempts state law tort claims against private defendants acting at the direction of the federal government, there is some precedent to guide us. 40 In Boyle v. United Technologies Corp., 487 U.S. 500 (1988), the Supreme Court considered the issue of whether the supremacy clause preempted state law liability of independent contractors performing work for the federal government. Under Boyle, state law may be preempted where: (1) there is a uniquely federal interest and (2) there is a significant conflict between federal policy and the operation of state law. See Boyle, 487 U.S. at 504-05, 507. 41 The liability of private defendants for actions taken at the direction of agents acting within their authority is a unique federal interest. Private businesses and individuals provide invaluable assistance as informants who provide evidence against law violators or, as in this instance, lend credibility to FBI undercover operations. If private businesses were not eligible for immunity from state law claims arising from assisting undercover federal operations, this would provide a major disincentive to assisting law enforcement and would undermine the needs and interests of the federal government. 42 At issue then, is whether the federal policy conflicts with the operation of state law. If the private defendants committed what would have been illegal acts under state law at the direction and control of agents acting within their authority, the operation of state law would conflict with federal policy. In Hunter v. Wood, 209 U.S. 205 (1908), where state law conflicted with a federal court order, the Court precluded a state law prosecution of a railroad clerk who sold tickets pursuant to that order. Similarly, this Court has suggested that federal immunity privilege should be extended to preclude an action against a telephone company who assisted federal law enforcement agents with wiretapping. See Fowler v. Southern Bell Telephone & Telegraph Co., 343 F.2d 150, 156-57 (5th Cir. 1965). See also Connecticut v. Marra, 528 F. Supp. 381 (D. Conn. 1981) (holding that defendant working at direction of FBI was entitled to federal immunity from state law prosecution). State law cannot operate to impede individuals who have government authority and act as is necessary and proper within that authority. See, e.g., Cunningham v. Neagle, 135 U.S. 1, 75 (1890). 43 If the private defendants acted in good faith by reasonably relying upon the authority of government agents, their actions are shielded from state law action. In this case, the private defendants, in good faith, supported the FBI's undercover operation with credibility and legitimacy. There has been no suggestion that the private defendants acted maliciously or attempted to derive personal gain from assisting in the operation. Moreover, the private defendants' actions, consistent with the apparent authority granted by the government agents, were objectively reasonable. Under the veil of apparent authority, the private defendants had no reason to believe that their actions were illegal or would cause injury to the Appellants. Thus, Appellants' state law claims against the private defendants are barred by the supremacy clause. 44