> It won't affect their case against the city…

Which again, if they win, they pay for!

It'll come out of their taxes, which the city will either have to raise, or cut costs somewhere to pay for. The people responsible will be neither criminally nor civilly liable, leaving zero disincentive to others.

If the engineering firm is acting as an 'agent of the state' then the protections extend to them as well. Otherwise we wouldn't be able to protect private prisons, etc from being sued, and we can't have that happening in America. So the court invented a fake protection (qualified immunity), and then invented a fake protected class called 'agents of the state'.