Independent Wartime Commission Mandate Civil Jurisdiction For Foreign Contractors

On July 12 of last year, I wrote on the difficulties that the families of American servicemen and contractors in Iraq and Afghanistan have in exercising their 7th Amendment rights for injuries and deaths suffered by their loved ones at the hands of foreign contractors. U.S. courts have dismissed several lawsuits, including one filed by my clients, over a lack of in personam jurisdiction over the contractor. The courts have ruled that the contractor’s receipt of U.S. government funds through a contract isn’t, by itself, enough to trigger the “minimum contacts” needed to hold it accountable in a U.S. court.

My clients are the surviving family of Lt. Col. “Rocky” Baragona, who was killed on May 19, 2003, when a truck owned and operated by Kuwait & Gulf Link Transport Company (KGL) sliced across the highway and struck the Humvee carrying Col. Baragona. With no detailed investigation of the accident possible by the Army at the time, his grieving parents and siblings started their own inquiries into KGL’s operation of the truck. After trying without success to obtain an apology from KGL, the family’s attorney filed a lawsuit in federal court, citing KGL’s millions of dollars in contracts with the Defense Department as a basis for jurisdiction. After first obtaining a default judgment against KGL for almost $5 million when it failed to respond to the complaint, the family saw its pursuit of justice blocked when KGL responded to the judgement by citing a lack of in personam jurisdiction, and then persuaded the judge to reverse the default judgment and dismiss the lawsuit. That dismissal was affirmed by the 11th Circuit Court of Appeals, and the Supreme Court denied cert in the case.

Fortunately, an independent commission became interested in this issue. The bipartisan Commission on Wartime Contracting in Iraq and Afghanistan was authorized by Congress to conduct oversight of all contractors operating in those two countries. The Commission studied the Baragona case and other instances of contractor-caused death and injuries, and yesterday issued an interim report today on its latest investigations, with the following findings:

The Commission has determined that claims against foreign prime contractors and subcontractors have gone unaddressed because the U.S. courts lack personal, as distinct from subject-matter, jurisdiction over the foreign defendants. Without establishing personal jurisdiction, attempts by the United States and other parties to recoup damages for civil contract claims and for private parties to recover on tort claims arising out of conduct related to government contracts are lengthy, protracted, and expensive for all parties involved. Foreign courts may be unavailable, unreliable, inconvenient, or otherwise unable to hear these claims.

The Commission recommended the following measures to Congress and the Executive Branch:

Make consent to U.S. civil jurisdiction a condition of contract award

Revise regulations and policies to:

▪▪ Require that foreign prime contractors and subcontractors consent to U.S. jurisdiction as a condition of award of a contract or subcontract.

▪▪ Require foreign contractors to register an agent in the United States to be responsible for receiving notice, summons, and other legal documents in connection with any legal actions against those contractors.

▪▪ Reduce the burden on smaller foreign contractors by limiting these requirements to contracts and subcontracts of $5 million or more. Exceptions should also be provided for foreign contractors participating in local-preference programs such as Afghan First and Iraqi First.

A bipartisan bill championed by Senators McCaskill and Collins to force foreign contractors to recognize the jurisdiction of U.S. courts eventually emerged from a Senate committee last year as S. 2782, the “Lieutenant Colonel Dominic “Rocky” Baragona Justice for American Heroes Harmed by Contractors Act.” Senator McCaskill has re-introduced the bill in the new Congress. The bill won’t help the Baragona family to hold KGL accountable, but it can prevent other such situations, so we hope Congress will enact the bill in this session.