The Supreme Court today issued a decision that has important implications for privatization/outsourcing of government functions. In Filarsky v. Delia, __ S.Ct. __, 2012 WL 1288731 (April 17, 2012) a unanimous Court held that an attorney who was retained by city to assist in investigation into firefighter's potential wrongdoing was entitled to the same qualified immunity as a government official. A city firefighter was under investigation for fraudulent sick leave, having been observed purchasing bulky home improvement items while he was supposed to be unable to come to work. The city hired a local employment attorney to officiate at a hearing about the matter, and the attorney used legal threats to coerce Delia to retrieve the items from his home for inspection by fire department officials. Claiming that this imposition was intrusive enough to violate the Fourth Amendment, Delia filed a Section 1983 action against several city officials, as well as the attorney, Filarsky, whom the city had hired and who arguably was most the most culpable person involved. The district court granted summary judgment, holding all the defendants immune from liability, but the Ninth Circuit reversed, holding only the city employees immune, and not the contractor (Filarsky). The Supreme Court reversed again, holding that the long history of outsourcing government functions in this country meant that sovereign immunity must apply equally to government contractors.
I find this decision disappointing. First, the Court fails to recognize that privatization or outsourcing is occurring on a scale never before seen in American history, and that government officials have perverse incentives to use outside contractors to avoid political accountability for inappropriate actions - and also to blur the lines of Fourth Amendment protections for individuals. It is not always clear that defendants can assert Fourth Amendment rights against private parties who are under government contract - it is fairly easy for the government agency involved to deny that it ever instructed the contractor to do the illegal action, whereas this argument usually fails if the over-aggressive investigator is an actual employee of the state (for example, courts will not uphold an illegal search merely because a police officer violated precinct protocol - but they might find no government activity where a private investigator does things the police would not do). In addition, the Court's historical argument looks back to the frontier era in American history, when many local governments were simply too embryonic to have full-time personnel. Today the situation is much different, and municipalities regularly employ their own staff attorneys to do the functions that Filarsky did here. Finally, the Court's concern is misplaced when it muses that high-caliber talent will "think twice" about accepting a government contract if they could face liability. That highlights the very danger of privatization - contractors do not have to think about legal consequences if they violate citizens' constitutional rights. And if a municipality is concerned about this, it can simply include an indemnification agreement in its contract with the private party - problem solved.