Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-92-05302/USCOURTS-caDC-92-05302-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 22, 1994 Decided July 12, 1994

No. 92-5302

PARK DEAN KAUFFMAN; GAILA M. KAUFFMAN,

APPELLANTS

v.

ANGLO-AMERICAN SCHOOL OF SOFIA,

AN UNINCORPORATED ASSOCIATION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia Circuit

(89cv03419)

Stephen H. Galebach argued the cause and filed the briefs for appellants.

Andrew C. Topping argued the cause for appellee. With him on the brief were Paul C. Skelly and

David G. Leitch. William D. Nussbaum entered an appearance.

Before: MIKVA, Chief Judge, WILLIAMS and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILLIAMS.

Concurring Opinion filed by Circuit Judge SENTELLE.

Dissenting Opinion filed by Chief Judge MIKVA.

WILLIAMS, Circuit Judge : Park Dean Kauffman and Gaila M. Kauffman appeal the district

court's dismissal of their suit against the Anglo-American School of Sofia. Our disposition is

controlled by FDIC v. Meyer, 114 S. Ct. 996 (1994), which holds that a federal agencyeven one

as to which Congress has waived sovereign immunityis not subject to liability in damages under

Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971).

We conclude that an entity that is not a federal agency, but that is constrained by the Constitution in

some or all of its actssolely because oflesserlinksto the federal government, is equally exempt from

Bivens liability. Because the Kauffmans' only federal claims against the School rest on Bivens, we

affirm the dismissal of the action.

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1The School's charter indicates that the board has only six members, but the parties seem to

agree that in fact it has seven. There is some dispute as to whether the seventh member is

appointed by the Chairman of the Board or elected by the parent-teacher association. 

* * *

The Anglo-American School of Sofia was established in 1967 to provide elementary-level

instruction to the children of American and British diplomats stationed in Sofia, Bulgaria. Though it

was allegedly set up at the initiative of the U.S. Department of State, its amended charter proclaims

that it is "a private and independent organisation" and "is not a subsidiary" of either the British or the

American government. Still, the American and the British ambassadors to Bulgaria each appoint

three members ofthe School's 7-person governing board,1and allthree ofthe American ambassador's

appointees are State Department employees. The School also receives part of its funding from the

State Department.

Beginning in August 1984, Park Dean Kauffman served as Director of the School. Gaila M.

Kauffman, his wife, was a teacher at the School. According to their complaint, both Kauffmans were

under contract with the School through June 15, 1991. But in June 1989, the School's governing

board fired Mr. Kauffman. Mrs. Kauffman resigned her employment in order to remain with her

husband.

Both Kauffmans filed suit in the United States District Court for the District of Columbia

against the School and the three individual board members who had been appointed by the American

ambassador. Their initial complaint raised no federal questions; jurisdiction was based instead on

diversity of citizenship. Claiming breach of contract, tortious interference with contractual relations,

wrongful discharge, and defamation, the Kauffmanssought compensatory damages of $300,000 and

punitive and exemplary damages of $100,000.

In suing the School, however, the Kauffmans had failed to take account of its status as an

unincorporated association. Under Federal Rule of Civil Procedure 17(b), an unincorporated

association's capacity to be sued "shall be determined by the law of the state in which the district

court is held". The one exception to this principlethat any unincorporated association "may sue

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2These claims coexist uneasily with another aspect of the Kauffmans' complaint. Presumably in

an effort to defeat claims of official immunity in their suit against the individual defendants, the

Kauffmans specifically alleged that the board members served in their "private and individual

capacity" rather than as agents of the federal government. Indeed, the Kauffmans initially had

characterized their entire case as "involv[ing] common law claims" rather than constitutional ones. 

"There is no plausible way," they had said, "to read Plaintiffs' Complaint as a Bivens action." 

Memorandum in Opposition to Defendants' Motions for a Protective Order (Mar. 13, 1990) at 2. 

or be sued in its common name for the purpose of enforcing for or against it a substantive right

existing under the Constitution or laws of the United States"was not triggered because the

Kauffmans had raised no federal claims. And the District of Columbia does not allow unincorporated

associations to be sued in their own names, at least over matters of local law. Pritchett v. Stillwell,

604 A.2d 886, 889 (D.C. 1992); Lenkin v. Beckman, 575 A.2d 273, 277-78 (D.C. 1990); Day v.

Avery, 548 F.2d 1018, 1022-23 (D.C. Cir. 1976); cf. Rules of Civil Procedure of the Superior Court

of the District of Columbia, Rule 17(b). Accordingly, the School moved to dismiss the action against

it.

The Kauffmans then amended their complaint. By this time, the U.S. Attorney's Office for

the District of Columbia had certified that the individual defendants "were acting within the scope of

their employment as employees of the United States" at the time of Mr. Kauffman's firing, with the

result that the United States had been substituted as the party defendant with respect to the

Kauffmans' tort claims against the individual board members. See 28 U.S.C. § 2679(d)(1). The

Kauffmans' amended complaint added no new claims against the United States or the individualboard

members. But the complaint now alleged that the School "is controlled by the U.S. Government" and

that its firing of Mr. Kauffman had violated the First and Fifth Amendments. Since the Kauffmans

continued to seek only damages and not any equitable relief, their federal claims thus rested on

Bivens.

2

The district court dismissed the Kauffmans' suit against all defendants. As to the School, the

court held that it could not be considered a "government actor" under Blum v. Yaretsky, 457 U.S. 991

(1982). Mem. Op. at 5, 10. The Kauffmans appealed, but they expressly did not oppose the motion

of "the federal appellees"that is, the United States and the three individual board membersfor

summary affirmance. A panel of this court granted the unopposed motion on April 6, 1993. All that

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remains of this case, then, is the Kauffmans' suit against the School itself.

The Bivens claims are the linchpin of the Kauffmans' entire suit. Because the School is an

unincorporated association, Rule 17 bars any suit in the absence of a federal claim. (Indeed, even

with a viable federal claim, we might have no jurisdiction over the non-federal claims; federal courts

lack pendent jurisdiction over claims that could not be brought in state court, see Promisel v. First

Amer. Artificial Flowers, Inc., 943 F.2d 251, 257 (2d Cir. 1991); cf. Local 20, Teamsters,

Chauffeurs & Helpers Union v. Morton, 377 U.S. 252, 257 (1964), and it is not clear whether an

unincorporated associationmaybe sued in its own name inDistrict ofColumbia courts on non-federal

claims even when those claims are appended to a federal claim.)

In the initial round of briefing the parties argued about whether the district court had erred

in cutting short this litigation by finding that the School was not sufficiently linked to the federal

government to subject itstreatment ofthe Kauffmansto constitutional limitations. The day after oral

argument, however, the Supreme Court unanimously ruled that Bivens liability does not run against

a federal agency, but only against individual federal agents. FDIC v. Meyer, 114 S. Ct. 996 (1994).

We requested supplemental briefing on whether a Bivens action may be brought against an entity like

the School or only against the individual board members. Cf. United States Nat'l Bank of Oregon

v. Independent Ins. Agents of America, 113 S. Ct. 2173, 2178-79 (1993).

Of course, no Bivens action could conceivably lie unless the School is a federal actor, in the

sense that itstermination of Mr. Kauffman's employment can be attributed to the federal government

for purposes of the First and Fifth Amendments. Even if the School is a federal actor, however, it

is not a federal agency: it is plainly a different sort of entity than the FSLIC, the agency at issue in

Meyer. Still, the differences between a federal agency and an artificial person that is a federal actor

seem to weaken, rather than strengthen, the case for a Bivens remedy. The remedy exists solely as

a response to the problem of unconstitutional federal action. The presence of federal action here

would be crystal clear if the School were part of a federal agency, but Meyer makes plain that even

then a Bivens action would lie only against the offending individuals and not the School (even if the

School had the capacity to sue and be sued, like the FSLIC). That the School's link to federal

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authority is more tenuous does not make a Bivens remedy against it any more appropriate.

We do not think it matters whether the School is portrayed as an "all-purpose" federal actor

or only as a federal actor with respect to the termination decision at issue here. Under either theory,

the Kauffmans enjoy a constitutional claim only to the extent that the School's decision to terminate

Mr. Kauffman's employment can be analogized to the decision of a federal agency. We think it

untenable to draw this analogy for purposes of Bivens but not for purposes of Meyer.

To be sure, a panelofthis courtalbeit without an opinion that commanded a majorityonce

permitted a Bivens action to be brought against a private corporation whose agents had allegedly

taken actions at the behest of, and in conjunction with, the federal government. See Reuber v. United

States, 750 F.2d 1039, 1053-60 (D.C. Cir. 1984) (opinion of Wald, J.); id. at 1063-65 (opinion of

Bork, J.). Other circuits have allowed similar suits. See Schowengerdt v. General Dynamics Corp.,

823 F.2d 1328, 1337-38 (9th Cir. 1987); Dobyns v. E-Systems, Inc., 667 F.2d 1219 (5th Cir. 1982);

Yiamouyiannis v. Chemical Abstracts Serv., 521 F.2d 1392 (6th Cir. 1975) (per curiam). Even the

most thorough of these opinions, however, focused entirely on the question of whether Bivens could

be extended fromsuits against conventionalfederal agentsto ones against ostensibly"private" parties

who are alleged to be federal actorsa topic ofsome controversy,see, e.g., Fletcher v. Rhode Island

Hosp. Trust Nat'l Bank, 496 F.2d 927, 932 n.8 (1st Cir. 1974) (refusing to allow such actions);

DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 844 F.2d 714, 720 n.5 (10th Cir. 1988)

(reserving this question). Having answered that question in the affirmative, Reuber and its fellow

casessimply assumed without analysisthat private entities were no lesssusceptible to Bivens actions

than private individuals. See, e.g., Reuber, 750 F.2d at 1058 (Wald, J.) ("private status ... is not

alone sufficient to counsel hesitation in implying a damages remedy"). Even before Meyer, other

courts had rejected this assumption. See Shannon v. General Electric Co., 812 F. Supp. 308, 323

(N.D.N.Y. 1993) (dismissing Bivens complaint because it was filed against private corporation

instead of against individual corporate officers). But whatever its intrinsic appeal, Reuber 's

assumption does not survive Meyer.

In fact, Reuber 's own logic counsels the rejection of this assumption in light of Meyer. The

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driving principle behind Reuber was that when a defendant is sufficiently connected to the

government that his acts are subject to constitutional constraints, the availabilityofthe Bivensremedy

should not turn on the defendant's nominal status as "private" or "public". When that reasoning is

combined with Meyer 's conclusion that public federal agencies are not subject to Bivens liability, it

follows that equivalent private entities should not be liable either. Despite the dissent's claims then,

our holding respects rather than erodes Reuber 's basic principle: it affords the Kauffmans precisely

the same Bivens remedies that they would have if the School were really a federal agency, as they

claim it effectively was for purposes of its decision to fire Mr. Kauffman.

The dissent is on slightly firmer ground when it attempts to distinguish Meyer 's reasoning

from the case at hand. As it observes, Meyer asserted that the purpose of the Bivens remedy is to

deter unconstitutional actions by federal actors. See Meyer, 114 S. Ct. at 1005. But see Bivens, 403

U.S. at 397; id. at 407-08 (Harlan, J., concurring). Meyer argued that if given a choice, plaintiffs

would have every reason to sue a federal agency instead of its individual officials, because this tactic

would circumvent the qualified-immunity defenses that the individuals might be expected to raise.

To the extent that aggrieved parties no longer brought damages actions against individual officers,

Meyer continued, "the deterrent effects of the Bivens remedy would be lost". 114 S. Ct. at 1005.

Accordingly, to recognize Bivens actions against federal agencies would undermine Bivens itself.

The dissent contends that this reasoning does not apply in the context of private entities like

the School, because we have afforded those entitiesthe same qualified immunityastheir agents enjoy.

See Reuber, 750 F.2d at 1057 n.25 (opinion of Wald, J.); id. at 1063-64 (opinion of Bork, J.). This

argument has some force. But the premise of Meyer is that individual agents are not deterred by the

threat of suit against their employers. If so, and if Meyer is correct about the purpose of Bivens

remedies, then there would seem to be no affirmative reason to allow Bivens actions against entities

of any sort, private or public. Further, on Meyer 's logic, provision of a damages remedy against a

private entitywould activelydiminish the deterrent value ofthe remedy against the individual(though

less than would a remedy against a federal agency enjoying no immunity at all). If such additional

defendants were available (often with deeper pockets than the individual offenders), plaintiffs might

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make the same choice as the Kauffmans, who brought their Bivens actions only against the private

entity and not against the individual board members. Even if plaintiffs sued both entity and

individuals, they would likely focus collection efforts against the entity, with effects only partly

blunted by the entity'srightsto contribution. To the extent that plaintiffs make such choices with any

regularity, Meyer indicates that the deterrent effect of the Bivens remedy would be weakened. In

sum, on Meyer 's deterrence rationale there is no affirmative reason to recognize Bivens actions

against private entities, and there is some reason not to do so.

Meyer, moreover, advanced an independent ground for its decision. According to the Court,

it was up to Congress to decide the questions of federal fiscal policy raised by the prospect of direct

actionsfor damages against federal agencies; the potentially large financial drain on the government

constituted a "specialfactor[ ] counselling hesitation" against the judicial creation ofsuch a damages

remedy. Meyer, 114 S. Ct. at 1005-06 (quoting Bivens, 403 U.S. at 396). The Kauffmans are wrong

to claim that this rationale is inapplicable here. According to Mr. Kauffman's own affidavit, the

Schoolwas established primarilyto serve the federal government'sinterest in meeting the educational

needs of its diplomats' families; it is this same interest that explains the federal government's

continuing grants to the School. See 22 U.S.C. § 2701. If funds are diverted from the School's

coffers to liability payments, the government presumably will have to choose between allowing its

interest to be served less well and spending more money to make up the shortfallprecisely the same

choice that it would confront if Bivens actions could be brought against federal agencies. In other

words, diversion of resources from a private entity created to advance federal interests has effects

similar to those of diversion of resources directly from the Treasury.

More generally, Meyer expressed considerable reluctance to extend Bivensremedies beyond

the sort of situation involved in Bivens itself. "In our most recent decisions," the Court noted, "we

have "responded cautiously to suggestions that Bivens remedies be extended into new contexts.' "

Meyer, 114 S. Ct. at 1005 (quoting Schweiker v. Chilicky, 487 U.S. 412, 421 (1988)). Despite the

one precedent in this circuit assuming that Bivens actions may be brought against private entities if

they may be brought against private individuals, and the handful of cases from other circuits making

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3Two of the four circuits listed in the dissent as allowing plaintiffs to bring Bivens actions

against private entities, Dissent at 1-2, do not seem to us to do so. As the dissent recognizes,

Morast v. Lance, 807 F.2d 926, 930 n.5 (11th Cir. 1987), merely assumed such liability without

deciding it, going on to reject plaintiff's claim on other grounds. As for Yiamouyiannis v.

Chemical Abstracts Service, 521 F.2d 1392 (6th Cir. 1975) (per curiam), the Sixth Circuit

subsequently seemed to reverse its field, suggesting that Bivens actions do not lie against private

defendants of any sort. See Wagner v. Metropolitan Nashville Airport Auth., 772 F.2d 227, 230

(6th Cir. 1985); cf. id. at 231 n.1 (Martin, J., concurring). 

the same assumption,3 we think the present case presents such a "new context[ ]".

Ultimately, however, our view that Meyer controls this case springs less from Meyer 's

reasoning than from its interaction with Bivens itself. As Judge Wald observed in Reuber, "It is

axiomatic that a Bivens action can be brought only against one who is engaged in governmental ...

action...." Reuber, 750 F.2d at 1054 (opinion of Wald, J.). The dissent's positionthat Bivens

actions against private entities should be recognized precisely because those entities are not part of

the governmenttherefore seems perverse.

The Kauffmans advance two additional arguments that are similarly unpersuasive. To the

extent that they rely on principles of sovereign immunity to explain why private entities might be

susceptible to Bivens actions even though federal agencies are not, they ignore Meyer ; there, the

Supreme Court explicitly stated that the FSLIC was not subject to Bivens liability even though

Congress had waived itssovereign immunity. 114 S. Ct. at 1004-05. The Kauffmans also claim that

Federal Rule of Civil Procedure 17(b), which appears to contemplate suits against unincorporated

associations for the purpose of enforcing constitutional rights, presupposes the existence of Bivens

remedies against entities like the School. But as Rule 17(b) is entirely understandable in terms of

providing a forum for equitable relief, there is absolutely no basis for the inference the Kauffmans

would draw. Indeed, Rule 17(b) was adopted in 1937, four decades before Bivens and five before

Reuber.

We affirm the district court's dismissal of the Kauffmans' suit.

So ordered.

SENTELLE, Circuit Judge, concurring: I am in complete agreement with the opinion of the

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court, and write separately to emphasize what the court is not doing. Mrs. Kauffman sues the AngloAmerican School on the basisthat its discharge of her husband createssome separate cause of action

in her. Though we do not reach the question in light of our disposition of the case on other threshold

grounds, I do not understand the court to be creating any precedent for or lending any credence to

the notion that an allegedly unlawful firing of one family member creates any claim for relief on the

part of another family member that would survive a motion for dismissal under FED. R. CIV. P.

12(b)(6).

MIKVA, Chief Judge, dissenting: Circuit precedent unambiguously permits plaintiffs to bring

Bivens actions against private state actors, entities as well as individuals. Reuber v. United States,

750 F.2d 1039 (D.C. Cir. 1984). The Supreme Court recently held that federal agencies are not

subject to Bivenssuits. FDIC v. Meyer, 114 S. Ct. 996 (1994). Despite our prior decision in Reuber,

the majority here chooses to create a highly debatable extension of Meyer 's holding to deny

appellant's suit against a private association that appellant alleges to be a state actor. Because this

result is by no means commanded by Meyer, but instead represents a choice between possible

alternatives, the panel was bound to abide by clear circuit precedent favoring one of those

alternatives. E.g., Brewster v. Commissioner of Internal Revenue, 607 F.2d 1369, 1373-74 (D.C.

Cir. 1979). It did not. Moreover, Reuber furthers the original purpose of Bivensaffording a

damages remedy to those aggrieved by unconstitutional actionsand I am loath to see that purpose

undermined because a new panel disapproves of it. Accordingly, I dissent.

I.

In Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388

(1971), the Supreme Court found an implied damages remedy against federal officers under the

Constitution. Most circuits that have considered the issue, including this one, have extended the

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****I do not think the Sixth Circuit has overruled Yiamouyiannis. A fair reading of the Wagner

case cited by the majority shows unequivocally that it was decided on other grounds, namely, that

plaintiffs had not alleged in their complaint that defendants were federal actors. Wagner v.

Metropolitan Nashville Airport Authority, 772 F.2d 227, 230 (6th Cir. 1985); id. at 230-31

(Martin, J., concurring). Moreover, even if the Wagner panel had sought to overrule

Yiamouyiannis (which it did not), its attempt would have been invalid. Like this Circuit, the Sixth

Circuit observes stare decisis by forbidding one panel to overrule another. E.g., Salmi v.

Secretary of HHS, 774 F.2d 685, 689 (6th Cir. 1985). 

Bivens remedy to private defendants who are agents of the federal government subject to

constitutional restraints under the "state action" doctrine. Reuber v. United States, 750 F.2d 1039

(D.C. Cir. 1984); Schowengert v. General DynamicsCorp., 823 F.2d 1328, 1337-39 (9thCir. 1987);

Dobyns v. E-Systems, Inc., 667 F.2d 1219 (5th Cir. 1982); Yiamouyiannis v. Chemical Abstracts

Service, 521 F.2d 1392, 1393 (6th Cir. 1975);**** see also Morast v. Lance, 807 F.2d 926, 930 & n.5

(11th Cir. 1987) (assuming without deciding). And this Circuitlike every one of those

circuitsallows plaintiffs to bring Bivens actions against nongovernmental entities as well as

individuals. Reuber, 750 F.2d at 1053-61 (opinion ofWald,J.); id. at 1063-65 (opinion of Bork, J.).

Our opinion in Reuber was fully consistent with the policies of Bivens itself. Like Bivens,

Reuberrelied on the historical availability of a damagesremedy "for an invasion of personal interests

in liberty." 750 F.2d at 1056 (quoting Bivens, 403 U.S. at 395). In light of this history, Bivens and

subsequent cases have held that the Constitution incorporates a damagesremedy, which courts must

recognize unless Congress has provided an equally effective alternative remedy. Bivens, 403 U.S.

at 395-97; Carlson v. Green, 446 U.S. 14, 18-19 (1980). In Reuber, this Circuit extended the

Bivens remedy to private entity state actors: two private corporations accused of violating an

employee's First Amendment rights as agents of the federal government. The court reasoned that if

the Constitution containsits own damagesremedy, that remedy lies(absent "special circumstances")

against certain private parties who happen to be subject to constitutional constraints, as well as

against federal officials. Reuber, 750 F.2d at 1054-61 (opinion of Wald, J.); id. at 1063-65 (opinion

of Bork, J.). A defendant's "private status" was not enough to defeat the Bivens remedy if the

defendant acted as an agent of the federal government. 750 F.2d at 1058 (opinion of Wald, J.); id.

at 1063-65 (opinion of Bork, J.).

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One member of the panel, Judge Starr, dissented in Reuber. 750 F.2d at 1069-76. But even

Judge Starr would not have gone so far as to disallow all Bivens suits against private entity state

actorsthe route the majority chooses today. Instead, his dissent argued (inter alia) that the

employer-employee relationship between one of the corporate defendants and the plaintiff was a

"special factor" that should defeat Bivens. Id. at 1072-73 (Starr, J., dissenting). In our case, of

course, we also have an employer-employee relationship between the alleged state actor and the

complainant. But this time, the right of action is denied. Curiously, the panel's result in the present

case seems to vindicate the concerns of Reuber 's dissent, rather than those of its majority. In sum,

the majority's opinion in this case flies in the face of Reuber, a binding precedent, which holds that

Bivens suits against private entity state actors are permissible absent special circumstances.

In FDIC v. Meyer, 114 S. Ct. 996 (1994), the Supreme Court decided a different question:

whether Bivens permits a direct suit against a federal agency for constitutional violations. The Court

determined that such a remedy is unavailable. To hold Meyerto exclude private entitiesfromBivens

coverage, we would have to presume that it tacitly overruled or fatally undermined all of the

above-cited cases permitting Bivens suits against private entity state actors. See supra at 1-2. If it

did not, then we have no authority to overrule the Reuber panel's decision. See Brewster v.

Commissioner of Internal Revenue, 607 F.2d 1369, 1373-74 (D.C. Cir. 1979) (explaining that future

panels are bound to follow precedent set by previous panels until the en banc court or Supreme Court

overrules that precedent).

But the Meyer Court made no reference to private state actors. Nor did the Court intimate

that an inventive circuit court might stretch Meyer 's narrow holding to eviscerate longstanding

remedies. Quite the contrary. In Meyer, the SupremeCourt emphaticallynoted the complete absence

of circuit court precedent for applying Bivens to a federal agency; indeed, the Court based its

decision in large part on the novelty of such a remedy. 114 S. Ct. at 1005. Thus, the Court acted

with the explicit understanding that it did not need to overrule any precedent in order to reach the

result it did. In contrast, in our case a great deal of precedent in many circuits supports a Bivens

action against a private entity state actor. See supra at 1-2. In general, I think it imprudent to

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presume that theSupremeCourt intended to overrule longstanding circuit precedent unlessthatresult

is (at the very least) clearly the most sensible reading of the relevant cases. I think law-of-the-circuit

principles demand this much deference. And Meyer, in which the Court not only was silent about

private entities but also emphasized the lack of precedent for permitting direct suits against federal

agencies, merits particular caution.

Such caution pays off here when one examinesthe differences between suits against a federal

agency and suits against private entity state actors. Indeed, it soon becomes apparent that the cases

are easily distinguishable in terms of the Meyer Court's own reasoning. Because the Court could

reasonably have intendedand probably did intendto prohibit suits against agencies while leaving

intact the circuit courts' majority rule permitting suits against private entities, we ought to read Meyer

as coexisting with, rather than overruling, the above-cited precedent.

Aside from the Meyer Court's apparent intention not to overrule any precedent, I see two

principaldistinctions on the meritsthat appear dispositive. First, the Court in Meyerseemed primarily

concerned with the potential for direct suits against agencies to undermine the deterrence rationale

of Bivens. 114 S. Ct. at 1005. Of course, Bivensitself was not concerned primarily with deterrence,

see 403 U.S. at 407-08 (Harlan, J., concurring in the judgment), but because the question is whether

Meyer is controlling we must ask whether the deterrence rationale as expressed in that case extends

to private entities. I think that rationale is far less compelling than for agencies. Meyer holds that

deterrence would be undermined because an agency, unlike an individual officer, has no qualified

immunity against suit; so, given a choice, every plaintiff would choose to sue the agency directly

instead of the potentially-immune employee. 114 S. Ct. at 1005. That concern is not present in the

case of a private entity, which has the exact same qualified immunity as its individual employees.

Reuber, 750 F.2d at 1057 n.25 (opinion of Wald, J.); id. at 1063-65 (opinion of Bork,J.). A plaintiff

would gain no substantial advantage from suing the entity directly.

The majority's response is simply that any weakening of deterrence to individual officers is

enough reason to deny a remedy under Meyer. Maj. op. at 7-8. I do not see where that is written

in the case; nor do I think the Court implied it. Meyer fears a substantial and specific erosion of

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deterrence, and the majority seems to agree that the "erosion" from this case (never mind that it is a

longstanding rule of law and not a novel remedy) is much less severe. Maj. op. at 8. The majority,

then, is just reading what it would like to read into Meyer. Contrary to the majority, I think there is

"no affirmative reason" to believe the deterrence rationale extendsto such de minimis circumstances.

See maj. op. at 8.

Second, the Meyer Court observed that it would exempt agencies from Bivens even if

deterrence were not an issue, because of the potential financial burden on the federal government.

114 S. Ct. at 1005-06. I think this concern is far weaker here. For one thing, this is a preexisting

burden, as courts have already extended Bivens liability to private entities that are state actors. To

my knowledge, no defendant has ever raised the possible bankruptcy of the federal governmentor

any lesser federalfiscal tragedyas a defense. In addition, judgments for plaintiffs in these cases are

not nearly as burdensome to the federal government as suits against federal agencies. Private state

actors often are government-controlled only for a limited purpose, so there is no reason to think the

losses would come out of the federal treasury in the ordinary case.

The majority hastaken a tangentially-related Supreme Court opinion as an excuse to overrule

a prior panel's opinion that the present panel's majority does not like. The majority apparently

believes it knows how the Supreme Court would decide Mr. Kauffman's case. Perhaps it is correct,

and perhaps it is not. But the Supreme Court has not yet decided such a caseeither directly or

through the back doorand until it does we must adhere to the current law. Reuber is the law of

this Circuit, even after Meyer, and the majority here exceeds its authority by purporting to overrule

circuit precedent.

II.

Mydisagreement becomes a dissent because, proceeding to the merits ofMr. Kauffman'sstate

action claim, I think he has stated a cause of action. Mr Kauffman claims he was unconstitutionally

discharged from his position as director of the Anglo-American School of Sofia by the votes of the

American members of the School Board, who are also employees of the United States Department

of State. He alleges that his discharge resulted after he complained to the Board Members' State

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Departmentsuperiors about claimed financialimproprieties. The United States Attorney has certified

for purposes of the Federal Tort Claims Act that the Board Members were acting within the scope

of their employment when they fired Mr. Kauffman.

I think these allegationssuffice to state a constitutional claim. Mr. Kauffman has alleged that

a majority of the School Board acted as agents of the federal governmentwithin the scope of their

employmentwhen they fired him. This creates a "nexus" between the state regulation and the

challenged action as required by Blum v. Yaretsky, 457 U.S. 991, 1004 (1982). Moreover, if Mr.

Kauffman were able to prove that the State Department superiors somehow ordered or caused his

discharge, this plainly would constitute state action. See id. (state action exists where state provides

"significant encouragement" for the private act). I would reverse the district court's dismissal of this

action.

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