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The 2d U.S. Circuit Court of Appeals has ruled that a company cannot be held liable for passing information on to federal authorities about possible security problems with two participants in a special U.S. visa program. Murray v. Northrop Grumman Information Technology, No. 04-5097-cv. James Murray and Ruth Gould were participants in the Irish Peace Process Cultural and Training Program, launched by the U.S. Congress in 1998 to promote job skills and “conflict resolution abilities” among young people suffering from sectarian violence and high unemployment in Ireland. Northrop Grumman Corp. administered the program. Murray and Gould worked at Las Vegas Airsports, a hang-gliding school in Nevada owned by Steve Smith. As there was little for them to do, they requested a transfer. Smith informed Northrop Grumman that the pair had never worked for him, that Murray was getting his pilot’s license to open a business in Yemen, and that the pair had “views opposing U.S. policy.” He urged the company to contact the Immigration and Naturalization Service (INS) and the FBI, citing security concerns. Northrop Grumman passed the information to the U.S. Department of State and the INS. Ultimately, Murray and Gould were ordered deported. They sued, claiming negligent misrepresentation, defamation, negligence and breach of contract. They claimed that Northrop Grumman should have investigated Smith’s allegations before forwarding them to the authorities, and that the company should have reinstated them in the program after learning that the allegations were false. Judge Allyne R. Ross of the Eastern District of New York granted summary judgment for Northrop Grumman. The 2d Circuit affirmed. Writing on behalf of the court, Chief Judge John M. Walker Jr. said that the “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.” Those considerations include whether government can function more effectively if officials are free from the costs of lawsuits. In Westfall v. Erwin, 484 U.S. 292 (1988), the U.S. Supreme Court said that federal officials have absolute immunity from state tort liability for acts that are “discretionary in nature” and “fall within the scope of the officials’ duties.” The first question for the circuit was whether Northrop Grumman was carrying out a governmental function. The court answered in the affirmative. “We think that when a private contractor, hired to perform a quintessential governmental function, in the course of its official duties conveys information with possible national security implications to an agency charged with its oversight, that contractor is absolutely immune from state tort liability for claims resulting from that information-sharing,” Walker said. The court said that Northrop Grumman’s actions “easily satisfy the Westfall test” because it was required to monitor and report on the program and notify the authorities whenever a program participant was terminated. Thus, in conveying the information from Smith, the company was “acting within scope of its employment.” Moreover, Northrop Grumman’s action was clearly discretionary, which again suggests that immunity was appropriate. “The public interest in ensuring that immigration law administrators feel free to convey information of this nature to the proper government agencies is high,” Walker said.

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