June 17 (Bloomberg) -- The U.S. Supreme Court agreed to use a case involving an Air Wisconsin pilot upset about losing his job to consider giving airlines broader immunity from lawsuits when they report potential security threats.
The justices today said they will review a $1.4 million award won by the pilot, William L. Hoeper. He sued the airline for telling federal officials as he was preparing to board a flight that he was “unstable” and possibly armed. Closely held Air Wisconsin Airlines Corp. flies for US Airways Group Inc.
Airlines say a Colorado Supreme Court ruling upholding the award leaves them legally vulnerable when they follow instructions from the Transportation Security Administration, which tells carriers to err on the side of reporting security issues. President Barack Obama’s administration joined the industry in urging the Supreme Court to take up the case.
“The Colorado court’s analysis may chill other air carriers from timely providing the government with critical information about threats to aviation security,” U.S. Solicitor General Donald Verrilli argued in court papers.
The case tests the 2001 Aviation and Transportation Security Act, a law enacted two months after the Sept. 11 terrorist attacks. The measure requires airlines to report security threats to the TSA. It also immunizes carriers from lawsuits, except for reports made with “actual knowledge” that they are false or “reckless disregard” for the truth.
Hoeper says Air Wisconsin officials aren’t entitled to immunity because they knew they were providing false information about him when they called TSA in 2004.
“Providing unrestricted immunity for even bogus reports to the TSA intended to inflict harm on innocent parties to settle personal vendettas does nothing to further national security,” Hoeper argued.
The incident occurred after Hoeper, a 20-year commercial pilot, failed on his fourth and final try to pass a certification test. The airline was requiring Hoeper to prove his proficiency because it was discontinuing the type of airplane he had been piloting.
During the fourth test, Hoeper became angry with the test administrators, allegedly screaming at them and accusing them of deliberately undermining his chances.
Hoeper left the facility and an Air Wisconsin manager, Patrick Doyle, booked the pilot on a flight to his Denver home. Before the flight left, Doyle called TSA to report Hoeper as a potential security threat.
Among other things, Doyle said he was concerned about Hoeper’s mental stability and about the whereabouts of the firearm he had been issued in his capacity as a federal flight deck officer.
Hoeper was removed from the plane, arrested and later released. A Colorado state-court jury awarded Hoeper damages after concluding the airline had defamed him.
In upholding the award, the Colorado Supreme Court said Air Wisconsin wasn’t entitled to immunity because Doyle’s statements were made with reckless disregard as to their truth or falsity.
Air Wisconsin contends the case would have turned out differently had the Colorado court analyzed whether the statements were true before considering the issue of recklessness.
“The idea that a true report could subject an airline to suit is inimical to the ATSA’s goal of encouraging prompt disclosure of threat information,” Air Wisconsin argued.
Hoeper’s lawyers urged the justices not to take the case, saying the Colorado court in effect decided that the statements were false.
Air Wisconsin’s “real quarrel with the courts below is not the standard of review they applied, but with the courts’ understanding of the connotation of Doyle’s statements,” Hoeper argued in court papers.
The case, which the court will take up during its 2013-14 term, is Air Wisconsin v. Hoeper, 12-315.
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