In 1998, Congress enacted the Irish Peace Process Cultural and Training Program Act of 1998 (IPPCTP). It allows "young people from disadvantaged areas of [Ireland] suffering from sectarian violence and high structural employment to enter the United States for the purpose of developing job skills

The Department of State (DOS) and the then-Immigration and Naturalization Service (INS) were to carry out the IPPCTP provisions. The regulations delegated the day-to-day operation of the plan to a Program Administrator (PA). Here, the PA is NGIT. Its duty is to identify job opportunities for program members and to recommend employers to take part in the program. The DOS has final authority to approve employers and to issue letters of certification to aliens chosen for the program. The PA would also make sure that the Irish youth meet program requirements and must report to the DOS and INS on key aspects of the program, such as a participant's termination or withdrawal from the program.

In August 2001, James Murray and Ruth Gould (plaintiffs) came to the U.S. on nonimmigrant visas under the IPPCTP to work at "Kitty Hawk Kites" in North Carolina. After September 11, 2001, however, business dropped off and plaintiffs transferred to Las Vegas Airsports (LVA), a hang-gliding school in Las Vegas, Nevada owned by Steve Smith. NGIT checked with Smith to verify that LVA qualified for the program; it then recommended it to the DOS, which in turn approved LVA as an IPPCTP employer for plaintiffs.

Plaintiffs went to work at LVA in October 2001. In early December of 2001, the relationship between the plaintiffs and Smith began to deteriorate. They complained that Smith failed to pay them, that he demanded completion of assignments unrelated to their agreed-upon responsibilities, and that he exposed the plaintiffs to unnecessary hazards. On January 10, 2002, Smith stopped furnishing plaintiffs with work and did not respond to their attempts to contact him. Ten days later the plaintiffs contacted NGIT to voice their concerns about Smith; again on February 13, 2002 they also asked for a transfer to a different employer.

Smith in turn called NGIT and denied that plaintiffs ever worked for him. He alleged that both plaintiffs were working for many different employers, and that plaintiff Murray was getting his pilot's license. NGIT asked Smith to put these claims in writing; he did so but also added that plaintiffs held views opposed to U.S. policy. Smith further urged NGIT to forward the information to the INS and the FBI. NGIT notified the DOS and INS. Within a few days, the INS took plaintiffs into custody. The INS later decided that plaintiffs were out of status with IPPCTP, because more than thirty days had passed since the end of their approved employment. At an immigration hearing requested by the INS on May 28, 2002, the tribunal ordered plaintiffs removed from the U.S.

Plaintiffs then sued NGIT for negligent misrepresentation, defamation, negligence, and breach of contract. A New York federal court gave summary judgment to NGIT. On appeal, the Second Circuit reviews the record de novo and affirms.

Plaintiffs' claims largely rest on NGIT's transmittal to the DOS and INS of Smith's allegations that plaintiffs posed a possible terrorist threat. NGIT responds that the doctrine of official immunity protected this transmittal. "The doctrine of official immunity is designed to promote the effective administration of government affairs by ensuring that government officials are 'free to exercise their duties unembarrassed by the fear of damage suits.' Barr v. Matteo, 360 U.S. 564, 571 (1959) (plurality opinion)."

"As the Supreme Court has made clear, official immunity is not meant 'to protect an erring official, but to insulate the decisionmaking process from the harassment of prospective litigation.' Westfall v. Erwin, 484 U.S. 292, 295 (1988). The doctrine rests on the premise that the threat of damage suits might 'appreciably inhibit the fearless, vigorous, and effective administration of policies of government.' Barr, 360 U.S. at 571. Moreover, government can function more effectively and efficiently 'if officials are freed of the costs of vexatious and often frivolous damages suits.'" [Slip op. 4]

Federal officials are entitled to absolute immunity from state tort liability when the acts are: (a) discretionary in nature and (b) fall within the scope of the officials' duties. This two prong test is used in determining application of official immunity to non-governmental persons or entities.

In this case, NGIT as a private contractor, was administering a program under the U.S. immigration laws. It was hired to perform a governmental function and, in its official capacity, conveyed information with possible national security implications to the agency charged with its oversight. NGIT acted within the scope of its obligations to the DOS and INS as it was required by federal regulations to monitor and report on the IPPCTP and its participants. NGITs action in forwarding the information from Smith to the DOS and INS was within the parameters of its employment.

Furthermore, the regulations and the IPPCTP do not instruct NGIT, as Program Administrator, on how to handle allegations involving national security. NGIT's decision to share the information with the DOS and INS immediately without further investigation was thus a discretionary act. "We recognize that absolute immunity comes at a price; it sometimes allows an 'injured party with an otherwise meritorious tort claim [to be] denied compensation simply because he had the misfortune to be injured by' an individual entitled to immunity. Westfall, 484 U.S. at 295."

"For this reason, the Supreme Court has cautioned that immunity is appropriate only when 'the contributions of immunity to effective government . . . outweigh the . . . harm to individual citizens.'" Doe v. McMillan, 412 U.S. 306, 320 (1973). The balance here tips strongly in favor of immunity. NGIT's action in forwarding the information it received from Smith to the DOS and INS is precisely the type of discretionary action that sound public policy requires to be protected by official immunity." [Slip op. 5]

The Court further explains that the public interest lies in ensuring that immigration law administrators feel free to convey information of this nature to the proper government agencies. "The threat of damage suits arising from the transmittal of such information would deter a company in NGIT's position from promptly sharing that information with government agencies. The incentives should be the other way: to encourage administrators like NGIT to pass along sensitive allegations promptly to the overseeing federal agencies, which are in the better position to investigate and act on the information. We therefore find that applying immunity in this circumstance is consistent both with protecting 'officials who are required to exercise their discretion' and promoting the 'public interest in encouraging the vigorous exercise of official authority.' Butz v. Economou, 438 U.S. 478, 506 (1978)." [Slip op. 5-6]

Citation: Murray v. Northrop Grumman Information Technology, Inc., No. 04-5097-cv, 2006 WL 905903 (2d Cir. April 10, 2006).