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U.S. justices weigh airline pilot's defamation case

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday seemed poised to throw out an appeals court ruling that upheld a $1.4 million jury verdict that a former airline pilot won against his employer.

During a one-hour argument, the nine justices considered whether Wisconsin Airlines Corp, a subsidiary of Harbor Diversified Inc, was immune from a defamation claim after employees reported a disgruntled colleague, pilot William Hoeper, to federal authorities as a possible security risk.

In December 2004 Hoeper was pulled from a flight on which he was a passenger by the U.S. Transportation Security Administration after colleagues said he was in a mentally unstable state and could be carrying a gun. Earlier that day, Hoeper lost his temper during his fourth attempt at a training test he had to pass to keep his job.

In a March 2012 ruling, the Colorado Supreme Court upheld the jury verdict in favor of Hoeper, saying it did not need to decide whether the comments in question were false before deciding whether the airline was immune.

A number of the justices seemed to take issue with that conclusion on Monday, meaning the court could throw out the appeals court decision and send the case back for further review. It was unclear whether such action would mean Hoeper could still win his lawsuit.

The airline says it is immune from the claims under a law passed after the September 11, 2001, attacks that encouraged airlines to share security concerns.

The 2001 Aviation and Transportation Security Act granted the airlines immunity from possible defamation suits as long as such reports were not intentionally false or misleading.

Among the concerns for some of the justices was that the appeals court appeared to be relying on what the trial jury concluded during its analysis of the immunity claim.

Justice Stephen Breyer said that the appeals court was "at least ambiguous about the role the jury's finding played" in its decision. The airline says a judge, not a jury, has to make the determination of whether the allegedly defamatory statement would have prompted a different response from the TSA if it was true.

The administration of President Barack Obama supported the airline, although U.S. Justice Department lawyer Eric Feigin said the government would prefer it if a jury decided the question.

That admission prompted a negative reaction from Justice Antonin Scalia.

"That doesn't give me a lot of comfort," he said. He noted that having a jury decide the issue based on emotive facts like those raised by Hoeper could deter people from alerting TSA agents to possible security threats in the future.

Chief Justice John Roberts did not appear to be as concerned about the jury's role, saying that "a good trial judge" could properly explain the law to the jury.

A ruling is due by the end of June. The case is Air Wisconsin v. Hoeper, U.S. Supreme Court, 12-315.

(Reporting by Lawrence Hurley; Editing by Howard Goller and Cynthia Osterman)

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