On March 12, 2026, the Fourth Circuit issued a published opinion in Al Shimari v. CACI Premier Technology, Inc., affirming a $42 million jury verdict against CACI for conspiracy to commit torture and conspiracy to commit cruel, inhuman, and degrading treatment (“CIDT”) of detainees at Abu Ghraib prison during the Iraq War. The decision carries sweeping implications for government contractors operating in hostile and combat-adjacent environments, particularly those providing services that intersect closely with inherently governmental functions.

The decision establishes three critical precedents that fundamentally reshape the legal landscape for contractors in operational environments:

  1. Derivative Sovereign Immunity Is Not Automatic—Contractors Must Prove Specific Government Authorization. The Fourth Circuit confirmed that to claim derivative sovereign immunity, a contractor must demonstrate that the government specifically authorized the conduct at issue. Operating under the general “thematic umbrella” of a government contract is insufficient (citing the Burn Pit Case at 10). CACI’s failure to show that the government authorized the specific abusive conduct—rather than simply the interrogation mission—was fatal to its immunity defense.
  2. The “Borrowed Servant” Defense Has Limits When Contractors Retain Operational Control. CACI argued that its employees became “borrowed servants” of the military, transferring liability to the government. The court rejected this, finding substantial evidence that CACI retained practical control over its personnel through its on-site manager’s activities, including screening qualifications, monitoring interrogations, and maintaining daily reporting to CACI headquarters. Contractors cannot rely on paper organizational charts alone when actual operational practices tell a different story. The court similarly rejected CACI’s argument that questioning military directives presented a nonjusticiable political question, finding that the military discretion cannot shield demonstrably unlawful conduct.
  3. Domestic Corporate Conduct Can Create Alien Tort Statute (ATS) Jurisdiction for Overseas Operations. The court’s analysis of extraterritoriality under the ATS should be particularly eye-opening for contractors operating overseas. The court applied three theories for why jurisdiction exists under the ATS and is consistent with Kiobel, a case that largely closed the door on international law violations outside of the United States. The most relevant theory for most contractors is that the court upheld the lower court’s finding that, despite the main bad acts occurring in Iraq, sufficient conduct occurred within the United States for purposes of Kiobel. The court found that CACI’s domestic hiring, clearance vetting, and misconduct-response activities were themselves violations of international norms regarding the prevention of torture and since those actions occurred in the United States the ATS could be applied regardless of extraterritoriality. In doing so, the Fourth Circuit effectively created an affirmative duty for contractors to implement domestic controls that align with key international law obligations. The court relied heavily on the Convention Against Torture’s requirement that signatories ensure training, oversight, and systematic review of interrogation practices for all personnel involved in detention or interrogation—including civil contractors.  This reasoning has direct implications for any contractor providing personnel services in environments where detainees, prisoners, or other vulnerable populations may be present. Contractors should expect that plaintiffs will argue that domestic hiring failures, inadequate training programs, and delayed responses to field reports constitute independent violations of customary international law—not merely evidence of negligence under state tort theories.

Pirates?

In looking at the extraterritoriality of the ATS after Kiobel, the 4th Circuit makes an interesting argument as to why torturers should be considered hostis humani generis or the “enemy of all mankind” and, therefore in the context of Iraq, where the territorial sovereign had been displaced in the 2003 time period at issue, overcome the presumption against extraterritoriality as applied in Kiobel.  Status as the enemy of all mankind, famously the moniker of pirates, allows all nations to exert their law to suppress these enemies.

The 4th Circuit found that Abu Ghraib was within the United States’s territorial jurisdiction because the United States had displaced the territorial sovereign of Iraq and exercised “complete jurisdiction and control” over the prison as a military occupation force.  In the alternative though, the court found that torturers—like pirates—had attained such historical condemnation as “enemies of all mankind” that they can be prosecuted by any country at any time, regardless of where the offense took place (a concept known as “universal jurisdiction”) and that in a situation where the acts occurred outside the territorial jurisdiction of any state, the ATS could apply.

Although the 4th Circuit applied the precedents in an interesting way to deal with Kiobel and ATS application, it will be rare for contractors to be operating in the context of military occupation or displaced sovereign.  All contractors should be tracking the domestic corporate conduct holding described above, but contractors operating in environments with displaced or unclear territorial jurisdiction should also pay attention to this part of the ruling.

Implications for Contractors on the Battlefield

The CACI decision underscores the dangers for contractors performing functions that are closely associated with—or that drift into—inherently governmental territory. Under FAR 7.503(c)(8), the “direction and control of intelligence and counter-intelligence operations” is an inherently governmental function. CACI’s own brief conceded that its contract required military control over interrogation operations, consistent with the FAR’s prohibition on contractors performing inherently governmental functions. Yet, the trial evidence showed a “command vacuum” in which CACI employees effectively directed military police regarding interrogation tactics—precisely the type of function creep that both the FAR and DFARS seek to prevent.

DFARS 207.503 reinforces these prohibitions in the DoD context, requiring contracting officers to affirmatively determine that military or civilian DoD personnel will oversee contractor performance and will perform all inherently governmental functions associated with the contract. Contractors providing services in operational environments should ensure that formal command structures are not merely documented but are actually enforced on the ground. The gap between the organizational chart and the operational reality at Abu Ghraib proved to be the central vulnerability in CACI’s defense.

The $42 million verdict—$3 million in compensatory and $11 million in punitive damages per plaintiff—highlights the financial magnitude of potential exposure. This exposure is further magnified as causes of action under the ATS extend beyond direct survivors. Heirs and estates of deceased foreign nationals also possess legal standing to sue both the corporate entity and individual defendants in U.S. courts, further compounding the legal exposure of contractors and their personnel operating in this space.

Contractors should monitor this development closely, and consider the following steps:

  • Develop robust corporate governance structures that integrate the law of armed conflict and international humanitarian law into enterprise risk management systems and internal controls.
  • Review training and vetting programs for all personnel deployed to operational environments to ensure alignment with international law obligations, particularly the Convention Against Torture.
  • Establish clear misconduct-reporting protocols that ensure corporate headquarters receives, investigates, and acts on reports of field misconduct promptly. Inaction at the home office is an independent risk factor.
  • Audit the gap between contractual command structures and actual field practices. If contractor personnel are directing or influencing government employees in ways not authorized by the contract, the contractor risks both losing its borrowed-servant defense and undermining its derivative sovereign immunity argument.
  • Evaluate insurance coverage and indemnification provisions in light of uncapped ATS punitive damages exposure. Current defense base act policies and standard commercial general liability policies may not cover ATS conspiracy claims.
  • Ensure FAR 7.503 and DFARS 207.503 compliance by documenting that contractor personnel are not performing inherently governmental functions and that government oversight is real, not just documented on paper.

The Fourth Circuit’s decision in Al Shimari v. CACI Premier Technology represents a potential watershed moment for government contractor liability. While the decision may ultimately be reviewed by the Supreme Court, the current state of the law in the Fourth Circuit now exposes contractors to significant tort liability under the Alien Tort Statute for overseas operations, grounded in domestic corporate conduct. Given that many of the nation’s largest defense contractors are headquartered in the Fourth Circuit’s jurisdiction (including Virginia, Maryland, and the Carolinas), the practical impact of this decision is great, especially when considered alongside another recent Fourth Circuit decision pending before the Supreme Court—Hencely v. Fluor Corp.—which could further narrow contractors’ immunity from state law tort claims on the battlefield.

Contractors operating in hostile locations—whether in support of military operations, intelligence activities, diplomatic security, or other sensitive government missions—should immediately assess their exposure in light of this decision. Fluet’s Battlefield + Contingency Operations Practice has deep experience in government contracts, national security law, and contracting on the battlefield, and is uniquely positioned to advise contractors navigating these issues. For guidance on compliance strategies, contract structuring, and litigation risk management, please contact a member of our team.