Supreme Court Rules On ATSA Immunity

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January 31, 2014
Michael McGrory
SmithAmundsen Aerospace Alert

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The Air Transportation Security Act (“ATSA”), passed in the aftermath of 9/11, includes an immunity provision that protects airlines from civil liability for reporting suspicious activities to the TSA. Air Wisconsin invoked ATSA immunity in defending a defamation lawsuit brought by a former employee, but was nevertheless hit with a $1.2 million judgment. The case went all the way to the Supreme Court, which reversed the judgment in an opinion that should provide comfort to airline employees who must decide whether to report a suspicious activity, often quickly and with incomplete information.

Air Wisconsin Airlines Corp. v. Hoeper stemmed from a report Air Wisconsin made to the TSA regarding one of its pilots. The pilot had become very angry after failing a proficiency test, and knew his termination was imminent. Air Wisconsin officials met to discuss the situation while the pilot was awaiting his flight home and expressed concerns due to the pilot’s anger, his knowledge that he would be fired, the possibility that he may be armed (he was a Federal Flight Deck Officer and was permitted to carry a gun under some circumstances), and recent episodes involving other disgruntled airline employees. Air Wisconsin contacted the TSA and reported its concerns about the pilot’s mental stability and the possibility he may be armed. The TSA removed the pilot from his flight, investigated, and ultimately let him board a flight home that same day.

The pilot filed a defamation lawsuit against Air Wisconsin, and won $1.2 million in damages. The award was affirmed by both the Colorado Court of Appeals and the Colorado Supreme Court. The Colorado Supreme Court stated that regardless of whether Air Wisconsin’s report was materially true or false, the airline overstated the situation so that the report was made with reckless disregard for its truth or falsity.

The U.S. Supreme Court found that the Colorado rulings were erroneous because those courts never determined whether Air Wisconsin’s report was materially false before denying immunity. Congress’s intent with ATSA immunity was to encourage airlines to report suspicious activities to the TSA. Thus, the immunity will not apply only if a report is made with “actual malice.” Actual malice, in turn, requires “material falsity,” meaning that minor inaccuracies will not give rise to liability if the gist of the statement is true. Any other result would subvert congressional intent.

The Supreme Court also stated that materiality in this context must be determined by looking at the effect of the statement on a reasonable TSA officer; in other words, a falsehood cannot be material if a reasonable TSA officer would not consider it important in determining a response to the supposed threat. Thus, even if Air Wisconsin’s statements were not entirely accurate, a more precise statement would not have altered the TSA’s response; they would have investigated anyway. Since Air Wisconsin’s statements accurately conveyed “the gist” of the situation, ATSA immunity applied.

The Court also recognized that an airline employee’s decision to report to the TSA occurs in fast-moving situations with little time to craft precise language. An employee who may have chosen different words upon further reflection should not face financial ruin for acting in the heat of the moment.

We have previously written about the reluctance some courts have displayed in granting ATSA immunity, and presented a paper at the Aviation Law and Insurance Symposium about the difficulties airlines face in defending lawsuits arising out of security activities. The Supreme Court’s opinion will prove a very important tool for airlines defending these types of claims, as it is now indisputable that ATSA immunity may not be denied to materially true statements. Thus, airlines and their employees should feel secure when making good faith reports of suspicious activities, even if they do so without further investigation or without choosing their words carefully. The only potentially negative aspect of this opinion for airlines is that the Supreme Court opted not to address whether ATSA immunity is a question of law or a question of fact. If it is a question of law, the judge will decide whether immunity applies, and will often make this decision prior to trial. If it is a question of fact, judges will be more reluctant to make this determination before a jury renders a verdict. This issue is certain to be litigated extensively in lawsuits where ATSA immunity may apply.

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