United States: U.S. Supreme Court Holds Airline Entitled To ATSA Immunity In Pilot Defamation Case

Jerrold Ganzfried is a Partner in our Washington D.C. office
Judy Nemsick is a Partner and Sarah Passeri an Associate in our New York office

HIGHLIGHTS:

  • In Air Wisconsin Airlines Corp. v. Hoeper, the U.S. Supreme Court has ruled that immunity may not be denied under the Aviation and Transportation Security Act (ATSA) to substantially true statements.
  • According to the Court, "a statement that would otherwise qualify for ATSA immunity cannot lose that immunity because of some minor imprecision, so long as 'the gist' of the statement is accurate."  

In Air Wisconsin Airlines Corp. v. Hoeper,1 the United States Supreme Court held that statements by an airline official to the Transportation Security Administration (TSA) concerning a potential security threat were protected by the airline immunity provisions of the Aviation and Transportation Security Act (ATSA).2 Under the ATSA, airlines and their employees are granted broad immunity from liability for reporting potential security threats to TSA and law enforcement, subject to the narrow exception where the statements are made "with actual knowledge that the disclosure was false, inaccurate, or misleading" or "with reckless disregard as to the truth or falsity of that disclosure."3

The Court reversed the Colorado Supreme Court's 4-3 decision, which had affirmed a $1.2 million defamation verdict and denied ATSA immunity to Air Wisconsin because its employee's statements to TSA concerning the potential threat of a soon-to-be terminated pilot were imprecise and made with reckless disregard as to their truth to falsity.4 The Court held, as a matter of law, that any inaccuracies in Air Wisconsin's report to the TSA were not material and, therefore, the airline was entitled to immunity under the statute.

Material Falsity Required

Writing for the Court, Justice Sotomayor stated that the exception to ATSA immunity is "patterned after" the actual malice standard found in First Amendment defamation cases,5 and requires a determination of whether an airline's disclosures of a potential security threat are materially false.6 The requirement of material falsity also serves the statute's purpose by encouraging immediate reporting of suspicious activities by airline employees without concern for minor inaccuracies. The Court held that "[i]It would defeat this purpose to deny immunity for substantially true reports, on the theory that the person making the report had not yet gathered enough information to be certain of its truth. Such a rule would restore the pre-ATSA state of affairs, in which air carriers bore the responsibility to investigate and verify potential threats."  

In determining the appropriate standard in an ATSA immunity case, the Court held that the focus should be on "whether a falsehood affects the authorities' perception of a response to a given threat." The Court found that this rule does not differ much from the usual rule for deciding a materially false statement, i.e., one that has a different effect on the mind of the reader or listener from that which the truth would have produced. Accordingly, in ATSA cases, inaccuracies in reports to security officials would not be considered material "absent a substantial likelihood that a reasonable security officer would consider it important in determining a response to the supposed threat."

Absence of Material Falsity Mandates Reversal

In applying the material falsity standard, the Court declined to "embrace or reject" the Colorado Supreme Court's unanimous holding that ATSA immunity is a question of law to be determined by the trial court. Instead, a 6-3 majority7 concluded that "even if a jury were to find the historical facts in the manner most favorable to Hoeper, Air Wisconsin is entitled to ATSA immunity as a matter of law."

Specifically, the majority determined that the airline's statement that Hoeper might be armed did not require the qualification that the airline had no reason to think he was actually carrying his gun. As the majority explained, any reasonable TSA officer would have investigated whether an FFDO was armed. The majority found that "to accept Hoeper's demand for such precise wording would vitiate the purpose of ATSA immunity: to encourage air carriers and their employees, often in fast-moving situations and with little time to fine-tune their diction, to provide the TSA immediately with information about potential threats." Airline employees should not face financial ruin for failing "to choose their words with exacting care."

The statement that Hoeper "was terminated today" (rather than tomorrow) was deemed immaterial because "everyone knew the firing was certainly imminent." And the Court's majority was "no more troubled" by the statement concerning Hoeper's "mental stability" because it was undisputed that Hoeper had become visibly angry, "blew up" during the test, tossed his headset and accused the instructor of "railroading the situation." In these circumstances, it "would be inconsistent with the ATSA's text and purpose to expose Air Wisconsin to liability because its employee could have chosen a slightly better phrase than 'mental stability' to articulate its concern." A statement does not lose immunity "because of some minor imprecision, so long as 'the gist' of the statement is accurate."  

Partial Dissent Disagrees With Application of the Legal Standard Without Remand

The partial dissent by Justice Scalia, joined by Justices Thomas and Kagan, agreed with the majority that an airline may not be denied immunity for a report made to the TSA absent a finding that the report is materially false. It also agreed that, in the ATSA context, materiality means that the falsehood had a natural tendency to influence a reasonable TSA officer's response. Because neither the jury nor the Colorado courts considered material falsity in the ATSA context, Justice Scalia would have remanded the case for further proceedings, noting that the "factbound question" decided by the majority is "better left" to the lower courts. For example, the partial dissent found it "simply implausible" that "a reasonable jury would have to find that the report of mental instability would have no effect upon the course of action determined by the TSA."

Practical Implications

The decision provides valuable guidance to the airline industry and sets a logical and practical standard for determining immunity under the ATSA that accounts for inaccuracies that may result when reporting security threats. By defining the standard for ATSA's immunity exception as one of material falsity, the Court advances the statute's underlying purpose and provides airlines with the much-needed "breathing space" to report potential security threats "without fear of civil liability for a few inaptly chosen words."

Click here for a Holland & Knight account of the Air Wisconsin ruling that looks at how it might affect future defamation lawsuits.

Footnotes

1. No. 12-315,  571 U.S. __ (Jan. 27, 2014).

2. 49 U.S.C. §44901 et seq. The ATSA, enacted post-9/11, implemented various measures to strengthen our national security system, including the creation of the Transportation Security Administration (TSA).

3. 49 U.S.C. §44941(b).

4. In Air Wisconsin, the airline had reported its concerns about the air travel of a soon-to-be-terminated pilot who, during the his fourth proficiency test, exhibited behavior that caused concern, including angry outbursts directed at his instructor. Significantly, the pilot was a Federal Flight Deck Officer (FFDO), which means he was authorized to carry a TSA-issued firearm. An Air Wisconsin manager with knowledge of the pilot's behavior communicated to the TSA that the pilot was about to travel and had been terminated that day, that there were concerns about his "mental stability" and that, as an FFDO, he "may be armed."

5. See, e.g., Masson v. New York Magazine, Inc., 501 U.S. 496 (1991); New York Times Co. v. Sullivan 376 U.S. 254 (1964).

6. In reaching its decision, the Colorado Supreme Court did not decide whether the airline's statements regarding the suspicious conduct were materially false.

7. All nine justices joined in Parts I, II, and III-A of the Court's decision. A partial dissent by Justice Scalia, joined by Justices Thomas and Kagan, is limited to Part III-B, i.e., the application of the material falsity standard to the record in this case.

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