WARZONE JUSTICE: US Supreme Court Strips Military Contractors of Sovereign Immunity for Negligent Actions

In Hencely v. Fluor Corp., the Supreme Court of the United States analyzed whether state-law negligence claims against military contractors operating overseas during wartime are preempted by federal law. The plaintiff brought state-law tort claims arising out of combatant activities, which the contractor argued were preempted by the Federal Tort Claims Act’s (FTCA) combatant-activities exception under 28 U.S.C. § 2680(j). The Fourth Circuit had agreed with the contractor, holding that wartime contractor activities under military command are implicitly preempted to preserve the sovereign's immunity.

The Supreme Court reversed, holding that federal contractors do not automatically share the government's sovereign immunity. The Court ruled that state law is only preempted when a significant, uniquely federal interest conflicts with state-law requirements. No such conflict exists when a contractor departs from direct, validly conferred military instructions. Because the contractor could have complied with both its contractual military obligations and the state-law duty of care, the negligence claims were allowed to proceed, establishing that military contractors remain subject to civil liability when they exceed or violate military directives.

The second-order consequence is the restructuring of defense procurement contracts, with private contractors demanding broad indemnification clauses from the Department of Defense. The third-order impact is a significant legal risk shift in international combat theaters, forcing contractors to establish parallel compliance protocols to avoid domestic tort liability. 

The full judgment is accessible at the (https://www.supremecourt.gov/opinions/25pdf/24-924_3d9g.pdf).