Battlefield Contractors Confront Risks After High Court Ruling

Defense contractors are poised to reconsider their approaches to risk and contract pricing, in light of the US Supreme Court’s decision to reinstate a soldier’s suit accusing Fluor Corp. of failing to stop an Afghanistan bombing.

Winston Hencely, who was injured in the bombing, is cleared to advance his suit because he accused Fluor of conduct the Army didn’t authorize, like failing to keep tabs on the bomber who worked for Fluor at a US base in Afghanistan, Justice Clarence Thomas said April 22 in the 6-3 decision. The Supreme Court found that the lawsuit wasn’t barred by the combatant activities exception in the Federal Tort Claims Act, which prevents courts from second-guessing battlefield decisions.

Plaintiffs seeking to hold contractors accountable for misconduct may now advance their suits by showing a gap between what the government wanted from a contractor and what the company did. And contractors may endure more costly discovery in other lawsuits now that the high court has weakened an immunity defense.

This decision “certainly limits protection that contractors had good reason to believe they had,” said David Panzer, who represents government contractors with Fluet. But “with any luck, it will provide clarity that will enable the market to find different ways to allocate risk.”

If contractors are going to face potential liability for following the military’s battlefield instructions, he said, they may want to push for the inclusion of indemnity claims against the government during contract negotiations.

Invoking Immunity

Hencely’s 2019 suit against Fluor—which performed a logistics services contract for the US Army—alleged negligent management of Afghan employees under South Carolina state law.

The US Court of Appeals for the Fourth Circuit in 2024 said the case can’t proceed because Fluor engaged in combatant activities by supervising employees on a military base in a “theater of war,” and because the armed forces retained control over Fluor’s supervision.

The high court reopened the suit because Hencely accused Fluor of doing things the Army couldn’t have required, like allowing the attacker access to bomb-making tools and letting him walk around unsupervised after his work shift ended. The Army determined Fluor failed express duties to the government, he said.

In light of the opinion, contractors that want to raise a preemption defense “will need to establish a close link between the challenged conduct and a specific federal policy,” said S. Vance Wittie of Faegre Drinker Biddle & Reath LLP.

Robert J. Wagman Jr., of Bracewell LLP, said the decision “does not change anything” and that in certain cases contractors will still be able to invoke immunity.

Contractors can invoke immunity if the government is negligent, Wagman said, but Fluor’s alleged negligent supervision of the bomber is the issue here.

Panzer said, however, that battlefield contractors are now facing “new risk.” And if statutory immunity, insurance, or contractual indemnity don’t cover it, contractors “will have no choice but to build the cost of that risk into their prices to the government.”

Another problem for contractors, according to Alex L. Sarria of Miller & Chevalier Chartered, is that Thomas’ opinion took a “surprisingly narrow view” of when the combatant activities exception applies, “limiting it to scenarios where a contractor’s ‘challenged conduct can fairly be treated as the military’s own conduct or decision.’”

That standard is “unworkable in modern military deployments” where the government asks contractors to support “virtually every facet of the military mission, but not always told how,” Sarria said.

Other Strategies

Despite the legal setback for Fluor, the contractor has other strategies to consider as the dispute resumes.

Wagman noted that Thomas said the Army approved the bomber’s presence at the base, but the opinion seemed to rely exclusively on the government investigation concluding Fluor was at fault.

Fluor should now “try to show that the government either expressly or tacitly approved Fluor’s performance and try to shift responsibility back to the government,” Wagman said.

A Fluor spokesperson said the company is aware of the ruling, and “although disappointed, we respect the court’s decision. Since litigation is still ongoing, we will not comment further.”

Justice Samuel Alito said in his dissent that Fluor will attempt to establish the Army was solely responsible for Hencely’s injuries. If that strategy fails, the company could use evidence of military responsibility as a defense against punitive damages.

Alito also said Fluor’s bid for sensitive documents in discovery could force the government to invoke the state-secrets privilege, which the government can do to protect national security. This option is something the government has yet to rule out in this case, Alito said.

Although unsuccessful, defense contractor CACI Premier Technology Inc. recently argued before the Fourth Circuit that it couldn’t get a fair trial against Abu Ghraib detainees’ torture claims because the Army’s use of the privilege blocked access to certain evidence. CACI had argued it had to “defend itself with both hands tied behind its back” at trial.

Choice of Law

Alito also said this case could experience “vexing choice-of-law problems.”

South Carolina’s choice of law rules govern, he said, which provide that a court applies the law of the state where an injury occurred. That means Afghan law as it existed in 2016 could apply, Alito said.

Identifying “relevant principles in that body of law would be a challenge,” he said.

Wittie said the political question doctrine—which deprives courts of jurisdiction if an issue is specifically committed to the executive branch—could re-emerge in this case. “It is most often invoked in military-related cases, especially where the contract constrains the contractor’s freedom of action,” he said.

The Fourth Circuit rejected Fluor’s political question doctrine argument in 2024. It “does not yet appear” that litigating the negligence claims and defenses would require assessing the reasonableness of military decisions, it said.

The case is Hencely v. Fluor Corp., U.S., No. 24-924, 4/22/26.