Does Utah's governmental immunity protect the state from third-party deceit? Van De Grift v. State Explained

The Utah Supreme Court’s decision in Van De Grift v. State clarifies a crucial aspect of the Governmental Immunity Act: the state can claim immunity even when harmful deceit is committed by third parties rather than government employees.

Background and Facts

The case arose from a massive Ponzi scheme orchestrated by Richard Higgins, a Utah parolee who defrauded investors of over $27 million. Despite parole conditions prohibiting him from leaving Utah, handling others’ money, or being self-employed, Higgins operated companies across multiple states to execute the fraud. The victims sued the State for negligent supervision, arguing that adequate oversight would have prevented the scheme.

Key Legal Issues

The central question was whether Utah Code § 63G-7-301(5)(b)’s deceit exception to governmental immunity waiver applies when the deceit is committed by a third party rather than a government employee. The plaintiffs argued the exception should only apply to deceit by state employees, while the State contended the statute’s plain language encompasses all deceit regardless of the tortfeasor’s employment status.

Court’s Analysis and Holding

The court applied a correctness standard and conducted plain language analysis of the statute. Relying on precedent from Ledfors v. Emery County School District and Taylor v. Ogden City School District, the court held that “the determinant of immunity is the type of conduct that produces the injury, not the status of the intentional tort-feasor.” The court noted that the statute’s text makes “the employment status of the assailant irrelevant to the question of immunity.”

Practice Implications

This decision reinforces the broad scope of Utah’s governmental immunity exceptions. Practitioners should recognize that attempts to “recharacterize the supposed cause of the injury” to avoid statutory immunity categories will likely fail. The court requires only “some causal relationship” between the injury and the enumerated exception. When governmental immunity appears from the complaint itself, dismissal under Rule 12(b)(6) is appropriate despite immunity typically being an affirmative defense.