77 F.3d 1442 (4th Cir. 1996), 94-1307, Mangold v. Analytic Services, Inc.

• Citation: 77 F.3d 1442
• Party Name: Karen W. MANGOLD; Sanford D. Mangold, Colonel, Plaintiffs-Appellees, v. ANALYTIC SERVICES, INCORPORATED (The Anser Corporation); John Fabian, Doctor, individually, and in his capacity as officer and agent of the Analytic Services, Incorporated (The Anser Corporation); Paul A. Adler, individually, and in his capacity as officer and agent of the Anal
• Case Date: March 12, 1996
• Court: United States Courts of Appeals, U.S. Court of Appeals — Fourth Circuit

Page 1442

77 F.3d 1442 (4th Cir. 1996)

Karen W. MANGOLD; Sanford D. Mangold, Colonel, Plaintiffs-Appellees,

v.

ANALYTIC SERVICES, INCORPORATED (The Anser Corporation);

John Fabian, Doctor, individually, and in his capacity as

officer and agent of the Analytic Services, Incorporated

(The Anser Corporation); Paul A. Adler, individually, and

in his capacity as officer and agent of the Analytic

Services, Incorporated (The Anser Corporation),

Defendants-Appellants,

and

United States of America, Defendant.

No. 94-1307.

United States Court of Appeals, Fourth Circuit

March 12, 1996

Argued Jan. 31, 1995.

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Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (CA-93-1635-A).

ARGUED: Thomas R. Bagby, Epstein, Becker & Green, P.C., Washington, DC, for Appellants. Darrell Madison Allen, Darrell M. Allen, P.C., Fairfax, Virginia, for Appellees. ON BRIEF: Bennett Boskey, Volpe, Boskey & Lyons, Washington, DC, for Appellants.

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Reversed and remanded by published opinion. Judge NIEMEYER wrote the opinion of the court on immunity, in which Senior Judge PHILLIPS joined; Senior Judge PHILLIPS wrote the opinion of the court on subject matter jurisdiction, in which Judge NIEMEYER joined; Judge MICHAEL wrote a dissenting opinion.

NIEMEYER, Circuit Judge, delivered the opinion of the court in Parts I, III, and IV (on the issue of absolute immunity), and PHILLIPS, Senior Circuit Judge, delivered the opinion of the court on the issue of subject matter jurisdiction.

Before NIEMEYER and MICHAEL, Circuit Judges, and PHILLIPS, Senior Circuit Judge.

OPINION

NIEMEYER, Circuit Judge:

We must decide whether absolute immunity shields a government contractor from liability arising from statements it made in response to government investigators during an official investigation. In response to Air Force queries relating to charges of misconduct by an Air Force colonel in his dealings with a private government contractor, the contractor answered questions under oath and provided other information. When the colonel sued the contractor under common law for injury to the colonel's reputation and position, the contractor asserted the defense of absolute immunity, which the district court rejected. Because we conclude that the government contractor should not be subjected to state law tort claims based on statements it made in response to an official government investigation about its dealings with the government, we reverse the district court's ruling denying such immunity.

I

On the initiative of Lt. Col. James Rooney, a United States Air Force officer assigned to the Air Force's Resource Allocation team at the Pentagon, the Air Force Office of Special Investigations and the Inspector General opened an inquiry into the practices of Col. Sanford D. Mangold, who headed the team. ¹ The investigation was undertaken to determine whether Col. Mangold abused his authority in his treatment of subordinates and in his dealings with the private sector. One aspect of the investigation focused specifically on allegations that Col. Mangold improperly exerted his influence to pressure a government contractor, Analytic Services, Inc. (which the parties refer to as "ANSER"), to hire a Mangold family friend. ANSER is a private corporation which contracts with the U.S. government to provide engineering and analysis services in connection with government acquisitions, particularly by the Air Force.

The investigation into Col. Mangold's activities was conducted by Air Force Brig. Gen. Raymond Huot. General Huot and his staff approached ANSER in June 1993 and inquired about Col. Mangold's effort to have ANSER hire Mrs. Betsy Worrell, a close friend of Col. Mangold's wife. Three ANSER officers responded to the investigators' questions and provided cassette tapes of telephone messages left by Col. Mangold on ANSER's telephone answering machine in November and December 1992.

In particular, Dr. John M. Fabian, ANSER's CEO, told Gen. Huot that during the late fall of 1992, Col. Mangold, on behalf of the Air Force, had requested use of ANSER's consulting services, which were available to units of the government on an open contract. In conjunction with his request, Col. Mangold suggested that ANSER hire Mrs. Worrell to provide those services. Despite the fact that Mrs. Worrell was not qualified to perform the job, Col. Mangold pressed the matter, implying that his team's use of ANSER's services depended on ANSER hiring Mrs. Worrell. Dr. Fabian stated that he told Col. Mangold, "I value the name of this company and I'm not interested in hiring somebody who was a friend of your wife's, in order to provide contract support." Dr. Fabian explained to Col. Mangold that

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because Mrs. Worrell did not have a college degree, she did not possess the preestablished qualifications necessary to provide the services Col. Mangold requested. According to Dr. Fabian, Mangold responded, "[I]f you can't do this I'll find a contractor who will." ANSER's vice president, Paul A. Adler, confirmed Dr. Fabian's testimony.

Transcripts of Col. Mangold's telephone messages left on ANSER's telephone answering machine during the period corroborate these witnesses' statements. These transcripts contain several messages in which Mangold repeatedly pressured ANSER to hire Mrs. Worrell. He stated in various messages:

I'm real frustrated that you guys are not hiring Mrs. Worrell. I think that ah, this was an excellent opportunity for ANSER to get involved with XO [the team headed by Col. Mangold], to show some responsiveness, and work with us.

* * * * * *

I would like to, uh, talk to you also about the fact that this is really a test case for ANSER and XO working together and if this one works out, we could probably see more opportunities for ANSER....

* * * * * *

I've run out of maneuvering room on, uh, uh, using other options in getting an individual like Mrs. Worrell on board by the end of the, ah, ah, by the end of this week, first part of next week when we expect the avalanche of budgetary work to come in.

When it became clear that ANSER would not accede to his entreaties, Col. Mangold canceled the Air Force's request for contract support from ANSER. According to the answering machine transcripts, he stated:

While the individual you sent to us and brought over is very pleasant and, ah, and uh, intelligent young lady, we no longer need to have any ANSER support.... I want to make it absolutely, indelibly, and totally clear that any ANSER support for the Space CQ Dive team will not be provided through this office.... I appreciate John your help and all your ability to, in bringing an individual in the office, but I do not need nor do I contemplate ever needing any ANSER support for this Space CQ Dive Team.

Col. Mangold's immediate subordinate, Lt. Col. James Rooney, who was familiar with Col. Mangold's efforts on behalf of Mrs. Worrell, was concerned about the impropriety of Col. Mangold's actions and consulted with another subordinate of Col. Mangold, Capt. Anthony J. Russo, about his concern. As Capt. Russo related the events:

Lt. Col. Rooney took me aside and also expressed serious concerns about the comments made to ANSER. He stated that he had already complained to Lt. Col. Mushaw and Col. Kingsbery (both from XOFS) and that he was going to meet with M Gen Hard (SAF/AQS) whom he knew well from a previous assignment. Lt. Col. Rooney stated that Col. Mangold was about to go too far and that he did not want to be involved in anything that might be illegal. He asked for my support. I agreed that Col. Mangold had made comments that could be misinterpreted by ANSER and promised that I would tell the truth about the meeting at ANSER, if asked. However, I told him that I would not personally go outside of our chain of command, and that I wanted to more forcefully express my objections directly to Col. Mangold before I would think of going over his head.

Following Lt. Col. Rooney's complaints to superior officers, the Air Force commenced an internal Air Force investigation, and Col. Mangold was transferred from his position as head of the Resource Allocation team.

Several months later, Col. Mangold and his wife, Karen, filed suit in a Virginia state court against ANSER, its executives, and Lt. Col. Rooney for injuring their reputations and Col. Mangold's position with the United States Air Force and for intentional infliction of emotional distress. The seven-count complaint alleges both that the defendants defamed Col. and Mrs. Mangold by fabricating the charges of misconduct and that the defendants conspired to damage Col. Mangold's reputation and position. The Mangolds demand $15 million in compensatory damages and $5 million in punitive damages.

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Lt. Col. Rooney removed the case to the United States District Court for the Eastern District of Virginia under 28 U.S.C. § 2679(d)(2), and the United States substituted itself for Lt. Col. Rooney as the party defendant under the Federal Tort Claims Act, 28 U.S.C. § 2679(d)(1). After the United States filed a motion for summary judgment for lack of jurisdiction, ² the Mangolds voluntarily dismissed the United States as a party defendant.

ANSER and its employees also filed a motion for summary judgment, asserting, among other defenses, immunity for claims arising out of their responses to questioning and requests for information in the course of an official Air Force investigation into ANSER's contractual arrangement with the Air Force. The district court determined that it had discretion to retain jurisdiction over the case, even though the United States was no longer a party, to decide ANSER's immunity defense. After denying ANSER's immunity defense, the court remanded the case to the state court, purportedly under 28 U.S.C. § 1447(c).

This...