Opinion ID: 213877
Heading Depth: 2
Heading Rank: 1

Heading: Security Clearances and Judicial Review

Text: As a preliminary matter, Raytheon contends that we lack jurisdiction over Zeinali's discrimination claim because of our decision in Brazil v. U.S. Department of the Navy, 66 F.3d 193, 196 (9th Cir.1995), which held that federal courts may not review . . . security clearance decisions made by the Executive or his delegee . . . in the context of a Title VII discrimination action. For the reasons that follow, we disagree with Raytheon's expansive reading of Brazil. The rule stated in Brazil was drawn from the Supreme Court's holding in Department of the Navy v. Egan, 484 U.S. 518, 108 S.Ct. 818, 98 L.Ed.2d 918 (1988), that employment decisions based on the executive branch's security clearance decisions are not reviewable by the administrative agency that adjudicates civil service disputes. The plaintiff in Egan was a civilian employee involved in maintaining a nuclear submarine, a job which required him to possess a security clearance. Id. at 520, 108 S.Ct. 818. After his security clearance request was denied, he was removed from his position. Id. at 521-22, 108 S.Ct. 818. He appealed this employment decision to the Merit Systems Protection Board, an administrative agency which reviews whether government agencies have adequate cause to terminate employees. Id. at 522, 530-31, 108 S.Ct. 818 (citing 5 U.S.C. §§ 7513, 7701). The dispute, as ultimately presented to the Supreme Court, was whether the Board had the authority to examine the merits of the security-clearance denial. . . . Id. at 526, 108 S.Ct. 818. The Court held that the grant of security clearance to a particular employee, a sensitive and inherently discretionary judgment call, is committed by law to the appropriate agency of the Executive Branch. Id. at 527, 108 S.Ct. 818. [T]he President[,] as head of the Executive Branch and as Commander in Chief, has authority to classify and control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to occupy a position in the Executive Branch that will give that person access to such information.. . . Id. The executive's decision to grant or deny a security clearance requires the type of [p]redictive judgment that must be made by those with the necessary expertise in protecting classified information. Id. at 529, 108 S.Ct. 818. Thus, [f]or reasons too obvious to call for enlarged discussion, the protection of classified information must be committed to the broad discretion of the agency responsible, and this must include broad discretion to determine who may have access to it. Id. (alteration, citation, and internal quotation marks omitted). Accordingly, the Court concluded that the Merit Systems Protection Board, as an outside nonexpert body, could not review the substance of such a judgment. . . . Id. We first examined Egan at length in Dorfmont v. Brown, 913 F.2d 1399 (9th Cir.1990), where the Department of Defense had revoked the plaintiff's security clearance on the grounds that she was a national security risk. Id. at 1400. The plaintiff, who worked for a private contractor, filed suit against the United States, the Secretary of Defense, and the Director of the Department of Defense Legal Services Agency, seeking an injunction against the revocation of her security clearance, on the ground that the Department of Defense's decision violated her constitutional rights to procedural and substantive due process. Id. We explained that although Egan 's holding was confined to the Merit Systems Protection Board, [t]he logic of that decision precludes judicial review as well. Id. at 1401 (emphasis added). When it comes to security matters, a federal court is `an outside nonexpert body.' We have no more business reviewing the merits of a decision to grant or revoke a security clearance than does the [Merit Systems Protection Board]. Id. (quoting Egan, 484 U.S. at 529, 108 S.Ct. 818). We noted that [a]lthough Dorfmont fashions her claims as due process challenges, her arguments were in fact attacks on the merits of the decision to lift her security clearance. Id. Accordingly, we held that the district court has no authority to review these challenges to the merits of the security clearance decision. Id. at 1402. [2] Following Dorfmont, we issued the decision at the heart of Raytheon's current defense. In Brazil, we held that a plaintiff is barred from bringing a Title VII employment discrimination claim to challenge an allegedly discriminatory security clearance decision. Plaintiff Brazil, who was a civilian employee stationed on a nuclear-equipped naval ship, was required to hold a security clearance as a condition of his employment. 66 F.3d at 195 & n. 1. Based on Brazil's disciplinary and interpersonal problems, the ship's captain recommended that the Navy revoke Brazil's security clearance. Id. at 195. Brazil then instituted Title VII proceedings, alleging that the captain had discriminated against him on the basis of race by recommending that his clearance be revoked. Id. We held that Brazil was barred under Egan from challenging the Navy's security clearance decision. Id. at 196-97. [3] We began our analysis by noting that  Egan prohibited . . . outside administrative board review of security clearance decisions, and  Dorfmont extended [ Egan 's] bar to judicial review. Id. at 196. Thus, [a]lthough Brazil's circumstances may be compelling, he asks the court to do exactly what Egan and Dorfmont forbidnamely, for the court to perform some review of the merits of the security clearance decision. Id. Brazil contended, however, that the Title VII analysis does not involve a review of the merits because it does not require the court to determine whether the Navy's reasons for revoking his clearance were valid; it merely requires a determination of whether the proffered reasons were the actual reasons. Id. at 197. We disagreed because [t]he more valid a reason appears upon evaluation, the less likely a court will be to find that reason pretextual; the converse is also true. Id. Thus, under the second step of the McDonnell Douglas burden-shifting framework, [i]t is impossible for the court to determine whether the Navy's proffered reasons were legitimate without evaluating their merits. Id. We also explained that, even if the second step were satisfied, it is very likely to be impossible for [the court] to proceed to step three and determine whether the given reasons were mere pretext without considering their merits. Id. Ultimately, we concluded that the merit of such decisions simply cannot be wholly divorced from a determination of whether they are legitimate or pretextual. Id. In the fifteen years following our decision in Brazil, we have not discussed the Egan-Dorfmont-Brazil line of cases in a precedential opinion. Raytheon asks us to read these cases broadly, arguing that the logic of  Egan bars discrimination and wrongful termination claims where, as here, the denial of a security clearance plays a central role, and that under Egan and its progeny, if the denial of a security clearance is central to the defense, the court lacks jurisdiction and the claims must be dismissed. Zeinali counters by arguing that courts do have jurisdiction to consider questions that do not involve the merits of the security clearance decision itself, such as whether in fact clearance was denied, . . . whether transfer to a nonsensitive position may be feasible[,] . . . [and] `whether the security clearance was a requirement for the job and thus its denial was an appropriate cause for dismissal.' (Alterations and citation omitted, quoting Jamil v. Sec'y, Dep't of Def., 910 F.2d 1203, 1206 (4th Cir.1990). [4] ) We conclude that Zeinali has the better argument. The core holdings of Egan, Dorfmont, and Brazil are that federal courts may not review the merits of the executive's decision to grant or deny a security clearance. See, e.g., Brazil, 66 F.3d at 196-97. In each of those three cases, the plaintiff (1) brought suit against the government agency responsible for the security clearance determination, and (2) directly challenged the agency's decision to deny or revoke a security clearance. None of these cases held that federal courts lack jurisdiction over employment discrimination claims like the ones in this lawsuit, which are brought against a private employer who was not responsible for the executive's security clearance decision. The fundamental logic of Brazil is that in an employment discrimination claim against the agency that made the security clearance decision, the second and third steps of the McDonnell Douglas framework necessarily require an inquiry into the defendant's proffered reasons for the adverse employment decision. Id. at 197. Raytheon's proposed approach is particularly inappropriate in cases brought against private employers, because such defendants are rarely responsible for (or even substantially involved in) the government's security clearance decisions. But if the plaintiff sues a defendant for allegedly discriminatory conduct that is merely connected to the government's security clearance decision, the concerns of Egan are not necessarily implicated. We are therefore persuaded by the reasoning of the Third Circuit that federal courts have jurisdiction to decide claims that do[ ] not necessarily require consideration of the merits of a security clearance decision, as long as they remain vigilant not to question the motivation behind the decision to deny [the plaintiff's] security clearance. Makky v. Chertoff, 541 F.3d 205, 213 (3d Cir.2008). [5] We have found no case in which a court has ever adopted a bright-line rule as broad as the one suggested by Raytheon. Raytheon's approach would essentially immunize government contractors from any liability in cases involving employees whose security clearances are revoked or denied. Tellingly, out of the numerous circuit court cases refusing to exercise jurisdiction over security clearance-related claims, [6] only two published decisions involved private employers, and only one of these cases even discussed Egan. [7] In that case, Beattie v. Boeing Co., 43 F.3d 559 (10th Cir.1994), the plaintiff brought a Bivens action alleging that his employer Boeing caused him reputational harm, lost promotional opportunities, and mental distress from on-the-job harassment, all of which he suffered after Boeing refused to grant him access to the secure worksite where Air Force One was being assembled. Id. at 562. The court noted that Boeing's contract with the government provided that the planes be constructed in a secured area into which only persons with access clearance could enter. Id. at 560. The contracts also provided that only the Air Force could grant unescorted access clearances, but allowed Boeing to issue escorted access clearances. Id. The contracts also required Boeing to use specific criteria to determine whether an employee could receive such clearances. Id. The court held that, because the contract mandated the security clearance requirements that allegedly caused the plaintiff's injury, Egan applied to bar the plaintiff's claims. Id. at 565-66. The court acknowledged that its conclusion was somewhat unusual because the case involved a private employer, but held that the result was warranted under the particular facts at issue: To be sure, the case before us involves a private party rather than a government agency. However, Boeing's limited authority to grant or deny escorted access clearance derived solely from its contract with the Air Force. Boeing's authority was thus delegated to it by the Air Force, and hence by the Executive Branch. We see no compelling reason to treat the security clearance decision by Boeing differently than the similar decision made by the Air Force. Both decisions represent the exercise of authority delegated by the Executive Branch and are entitled to appropriate deference by the federal courts. Therefore, we conclude that we may not review Boeing's action or that of the Air Force in denying [the plaintiff] access to the Air Force One area. Id. at 566 (footnote and citations omitted). Beattie is, in many ways, the exception that proves the rule that private employers can rarely avail themselves of Egan 's jurisdictional bar. In employment discrimination suits against private employers, courts can generally avoid examining the merits of the government's security clearance decision. Raytheon's broad reading of Egan and Brazil is inappropriate in such cases. Here, Zeinali does not contend that the Department of Defense (or any other agent of the executive branch) improperly denied his application for a security clearance. Rather, Zeinali contends that Raytheon's security clearance requirement was not a bona fide job requirement, [8] and that Raytheon used the government's security clearance decision as a pretext for terminating Zeinali in a discriminatory fashion. In order to review Zeinali's contentions in a full and fair manner, we need not examine the merits of the government's decision regarding Zeinali's security clearance. Rather, we need only examine the employment decisions made by Raytheon. Egan does not strip the courts of jurisdiction to make such determinations. Accordingly, we hold that Egan does not bar our review in this case. Because we need not inquire into the merits or the motivations behind the decision to deny [the plaintiff's] security clearance, Makky, 541 F.3d at 213, the district court had jurisdiction under 28 U.S.C. § 1332(a)(1), and we have jurisdiction under 28 U.S.C. § 1291.