Opinion ID: 445561
Heading Depth: 1
Heading Rank: 4

Heading: claims against the corporate defendants

Text: 48 Dr. Reuber also appeals the district court's dismissal of his constitutional and pendent state law claims against Litton and Bionetics. The district court appears to have dismissed Reuber's claims against Litton and Bionetics for lack of federal subject matter jurisdiction. Reuber's complaint, however, did allege the presence of federal question jurisdiction over these claims pursuant to 28 U.S.C. Sec. 1331. A court may dismiss a complaint alleging a federal claim for lack of subject matter jurisdiction only when the claim clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial or frivolous. Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946); see also Hagans v. Lavine, 415 U.S. 528, 537-38, 94 S.Ct. 1372, 1379-80, 39 L.Ed.2d 577 (1974) (under 28 U.S.C. Sec. 1343, a claim may be dismissed for lack of subject-matter jurisdiction if it is obviously frivolous or if its unsoundness so clearly results from the previous decisions ... as to foreclose the subject and leave no room for the inference that the questions sought to be raised can be the subject of controversy.) (citations omitted). 49 Under this lenient standard, subject matter jurisdiction over Reuber's federal claims against Litton and Bionetics is clearly present. The complaint alleges that the corporate defendants were liable for the writing and dissemination of the letter of reprimand and the resultant constructive discharge of Reuber. The complaint further alleges that the individual corporate defendants were acting at the direction of, or in concert with, the individual NCI officials. Complaint, paragraphs 29-38. Finally, the complaint alleges that these actions violated Reuber's first amendment rights of freedom of association, freedom of speech, and privacy as well as his fifth amendment right to procedural due process. Id. paragraphs 55-58. Although, as we shall discuss, these claims present the question whether a constitutional tort action to recover damages against private individuals or entities exists in the circumstances here, the claims are not clearly foreclosed by controlling precedent and therefore serve as a predicate for subject matter jurisdiction. The district court, thus, erred in dismissing Reuber's constitutional claims for lack of federal subject matter jurisdiction. 50 The remaining question for this court is whether Reuber's complaint states a claim upon which relief can be granted. Reuber's complaint states such a claim only if a constitutional tort action for damages can be brought against private individuals or entities when it is alleged that the private parties have engaged in state action. It is to this question that we now turn. 51
52 The history of constitutionally based actions for money damages begins with Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). In Bivens, the Court ushered into our law the principle that citizens can bring an action to recover damages for fourth amendment violations from federal officers acting in their official capacity, notwithstanding the absence of a congressionally authorized cause of action. The Supreme Court has extended this principle to plaintiffs seeking to bring actions under the fifth amendment, see Davis v. Passman, 442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979), and the eighth amendment, see Carlson v. Green, 446 U.S. 14, 100 S.Ct. 1468, 64 L.Ed.2d 15 (1980). This court has implied constitutional damages actions for violations of the first amendment. See Dellums v. Powell, 566 F.2d 167, 195-96 (D.C.Cir.1977), cert. denied, 438 U.S. 916, 98 S.Ct. 3146, 57 L.Ed.2d 1161 (1978). 53 It is axiomatic that a Bivens action can be brought only against one who is engaged in governmental (or state) action 19 or, to put the matter another way, who is acting under color of federal law. The principle underlying the requirement of state action is that individual  'rights secured by the Constitution are protected only against infringement by governments.'  Lugar v. Edmondson Oil Co., 457 U.S. 922, 936, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982) (quoting Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156, 98 S.Ct. 1729, 1733, 56 L.Ed.2d 185 (1978)). Thus, it is clear that in order to prevail on his Bivens claim, Reuber would have to prove that officials at NCI and officers at Litton and Bionetics conspired to discipline him because of his exercise of first amendment rights. 20 We, of course, cannot resolve this issue here since, given the posture of this case, we must take all of plaintiff's factual allegations as true. 54 While we cannot resolve the fact-bound issue of whether state action was present in this case, we can address the purely legal question presented. The legal question, simply stated, is whether constitutional tort claims for damages can be brought only against federal officials or whether Bivens, by analogy to 42 U.S.C. Sec. 1983, encompasses actions against private parties acting under color of federal law. The Supreme Court has never had occasion to address this issue. This circuit expressly left open the question whether Bivens liability might extend to private parties under certain circumstances in Zerilli v. Evening News Association, 628 F.2d 217 (D.C.Cir.1980). 21 55 In Zerilli, the plaintiffs alleged that the Department of Justice had, in the course of illegal electronic surveillance, transcribed certain communications between the plaintiffs and others. Ten to fifteen years later, officials at the Department of Justice released the material to the Evening News Association. This newspaper then published that information in a series of articles entitled Organized Crime in Detroit. Plaintiffs alleged that the officials and the newspaper had conspired to violate their fourth amendment rights and thus sued both the officials and the newspaper under a Bivens constitutional tort theory. 56 After dismissing the claim against the federal officials on the ground that it was identical to a claim pending in a related case in the same court, the court turned to the Bivens claim against the newspaper. The court noted that although the Supreme Court had not addressed the issue of extending Bivens liability to reach private parties acting under the color of federal law, the Court had more generally indicated that Bivens liability is inappropriate  '[when defendants demonstrate] special factors counselling hesitation....'  Zerilli, 628 F.2d at 223 (quoting Bivens, 403 U.S. at 396, 91 S.Ct. at 2004). We then relied on this general exception to Bivens liability to dispose of the Zerilli case: 57 Assuming without deciding that private parties may in some circumstances be held liable under Bivens for conspiring with federal officials, we believe there are three special factors that, taken together, preclude us from imposing such liability in the present case. 58 Id. (citations omitted). In other words, assuming a Bivens action did exist, the presence of special factors in the case made Bivens liability inappropriate. 22 59 The Zerilli approach is the approach taken by Bivens and its progeny: the presence of special factors in a particular case may render an otherwise existing Bivens -type action inappropriate. A court, however, must start its inquiry into the propriety of a damages remedy from the proposition that [h]istorically, damages have been regarded as the ordinary remedy for an invasion of personal interests in liberty. Bivens, 403 U.S. at 395, 91 S.Ct. at 2004. In Carlson v. Green, 446 U.S. 14, 100 S.Ct. 1468, 64 L.Ed.2d 15 (1980), the Supreme Court stated: 60 Bivens established that the victims of a constitutional violation by a federal agent have a right to recover damages against the federal official in federal court despite the absence of any statute conferring such a right. Such a cause of action may be defeated in a particular case, however, in two situations. The first is when defendants demonstrate special factors counselling hesitation in the absence of affirmative action by Congress. The second is when defendants show that Congress has provided an alternative remedy which it explicitly declared to be a substitute for recovery directly under the Constitution and viewed as equally effective. 61 Id. at 18-19, 100 S.Ct. at 1471 (emphasis in original) (citation omitted). Carlson makes it clear that in assessing any Bivens action, the court must permit such an action unless Congress has already provided an equally effective remedy to redress the constitutional wrongs or unless special factors exist which taken together make the Bivens action inappropriate. 23 62 Whether Reuber has a Bivens action, in the first instance, depends on whether he has alleged circumstances sufficient to characterize the corporate defendants as federal actors. Given the posture of Zerilli, it was unnecessary to address the question of state action directly. Instead, this court recognized the private status of defendants as a special factor based on the Supreme Court's observation, in the context of an unlawful search and seizure, that [a]n agent acting--albeit unconstitutionally--in the name of the United States possesses a far greater capacity for harm than an individual trespasser exercising no authority other than his own. 628 F.2d at 224 (quoting Bivens, 403 U.S. at 392, 91 S.Ct. at 2002). 24 But we must also be cognizant that there are situations where because the private action is clearly backed up by the power, property and prestige of the government, its resultant harm approaches closely or even equals that of government officials. Cf. Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, 81 S.Ct. 856, 861, 6 L.Ed.2d 45 (1961) (state may be liable for discrimination by private party where state places its power, property and prestige behind the private conduct). [W]hen authority derives in part from Government's thumb on the scales, the exercise of that power by private persons becomes closely akin, in some respects, to its exercise by Government itself. Public Utilities Commission v. Pollak, 343 U.S. 451, 462 n. 8, 72 S.Ct. 813, 820 n. 8, 96 L.Ed. 1068 (1952) (quoting American Communications Association v. Douds, 339 U.S. 382, 401, 70 S.Ct. 674, 685, 94 L.Ed. 925 (1950)). In Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982), the Supreme Court stated: 63 [W]e have consistently held that a private party's joint participation with state officials in the seizure of disputed property is sufficient to characterize that party as a state actor for purposes of the Fourteenth Amendment. 64 Id. at 941, 102 S.Ct. at 2756. Clearly once state action is established, the private party is deemed a state or, in this case, a federal actor. 65 The defendants here are not federal officials, nevertheless, the defendants may be deemed federal actors. The defendants' private status shield is lost when they act in such a way as to create an integrated alliance with the government and their conduct therefore is imbued with the power and prestige of government officials. The facts alleged here strongly suggest this is such a case. 66 Taking Reuber's allegations as true, as we must at this juncture, the corporate defendants' alleged decision to punish Reuber for dissemination of his malathion study sufficiently invoked the power and prestige of the National Cancer Institute so as to make the decision a governmental one in perception as well as reality. In this case, the government--according to Reuber's allegations--had heavy thumbs on the scale with respect to the disciplining of Reuber. Reuber alleges that the decision to take disciplinary action against him was initially made by NCI officials, who used the FCRC contract to pressure Bionetics into taking action. Thus, the disciplinary action was, in every sense of the phrase, government conduct, with predictably direct ramifications on the alleged injury done to Reuber. If the decision was made by NCI, presumably Reuber would be precluded from seeking work at other NCI facilities; the federal nexus thus directly extends the harm beyond the immediate relationship of Reuber to his employer. In addition, here the corporate defendants and the government derive the mutual benefits of Bionetics' operation of FCRC. FCRC is a government-owned facility operated by Bionetics. See Brief for Appellant, No. 82-2376, at 8. Bionetics' operations at FCRC are totally financially dependent on its government contract to operate that facility. All publications generated by this facility must state that the work on which they are based was performed pursuant to Bionetics' contract with NCI. It is clear, then, that Bionetics derives the prestige of association with the federal government with respect to its work at FCRC. 67 Given this scenario, Reuber has alleged circumstances sufficient, if proven, to characterize the corporate defendants as federal actors and thus has stated a cause of action against these private parties under Bivens. 25 See Yiamouyiannis v. Chemical Abstracts Service, 521 F.2d 1392 (6th Cir.1975) (holding that plaintiff-scientist's complaint that he was harassed, defamed and constructively discharged for publicly expressing views contrary to those of HEW stated a cause of action against his private employer under Bivens ). 26
68 As noted earlier, the presence of special factors in a particular case may indicate that Bivens liability is inappropriate. See supra p. 1056. The only special factor arguably relevant to the appropriateness of a Bivens remedy in the present case is the private status of the defendants. However, the private status of the defendants, even if deemed a special factor, is not alone sufficient to counsel hesitation in implying a damages remedy when the private party defendants jointly participate with the government to a sufficient extent to be characterized as federal actors for purposes of a Bivens action. Certainly, Zerilli does not suggest that the defendants' private status, standing alone, should suffice to deny plaintiffs a Bivens action. 27 69 The dissent attaches special significance to the fact that the action here involves a corporate employer taking disciplinary action against one of its employees. Neither the substance nor the merits of the defendants' allegations against Reuber included in the March 1981 letter of reprimand are pertinent to our inquiry. Nor does the mere fact that this is an employment setting counsel judicial restraint. In Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983), the Supreme Court held that where a federal employee's first amendment claims were fully cognizable under an elaborate, comprehensive, remedial scheme created by Congress, it would be inappropriate to supplement that scheme with a Bivens remedy. Bush squarely addressed a question of federal personnel policy and the court deferred to Congress' interest and expertise in balancing governmental efficiency and the rights of [government] employees.... Bush v. Lucas, 103 S.Ct. at 2417. 70 Reuber is making a first amendment challenge to a personnel action taken by private employers. The critical factor, as the dissent notes, is that the private employers are government contractors. It is this relationship and the joint participation of the government and the private employers in the challenged action that makes Reuber's first amendment claim cognizable in the first instance. This type of alleged collusion between government and private employers to violate an employee's constitutional rights, which allows the government to accomplish indirectly that which it cannot do directly, is hardly a factor counselling hesitation in the absence of congressional action. Reuber, unlike the plaintiff in Bush, has no other avenue open to him for pursuing his first amendment claim against the corporate defendants. 71 The dissent's position that Congress' failure to regulate the personnel policies of government contractors, in light of its activity in other areas of the contracting relationship, makes judicial action inappropriate is not persuasive. First, this creates a door which closes both ways: Both congressional action in the relevant area as well as inaction become sufficient to defeat a Bivens remedy. Second, the dissent offers no support for the notion that Congress' inaction is indicative of its intent to preclude a Bivens remedy under the circumstances of this case. The situation is entirely different than the one in Bush v. Lucas where Congress had directly addressed the precise issue, weighed the competing policy concerns and provided a remedial scheme. Bush v. Lucas, supra, 103 S.Ct. at 2414-15. Whereas Congress would be reasonably expected to regulate federal personnel policy, it does not follow that Congress would be expected to attempt to comprehensively regulate the personnel policies of numerous private employers in varied fields who receive government contracts to varying extents. The fact that the defendants are government contractors should not preclude the court from providing a remedy in this case. 72 The dissent also argues that Zerilli indicates that the defendants' first amendment rights should be considered as a special factor counselling hesitation. 28 The only potential way the defendants' first amendment rights can be implicated in this case is by asserting that the defendants' exercise of their right to issue a corporate communication relating to the conduct of an employee might be chilled. This seems farfetched, at best. More importantly, however, such an argument ignores the essential nature of Reuber's complaint. Reuber's constitutional complaint, in short, does not rely mainly on the publication of the reprimand letter, but rather on its issuance as a means to punish him for his own published study. 29 There is no question that the government and the corporate defendants, disagreeing with the conclusions or methodology of Reuber's study, were free to publicly state their position. But issuing a letter of reprimand, based on that disagreement, is quite a different matter. It is not a public statement of the defendants' position; rather it is a punitive action by an employer against an employee. If, as alleged, the government and the corporate defendants conspired to punish Reuber because they objected to the contents of his malathion study, their conduct would not only be unprotected, but would itself be prohibited by the first amendment. 73 On remand, the district court should inquire whether the content of Reuber's study was a factor in the government's and defendants' joint decision to penalize Reuber. If it was, the burden would then shift to the defendants to show that, even absent the improper motive, the punitive action taken against Reuber would have occurred anyway. See Mount Healthy City School Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). This approach is commended by Supreme Court precedent and such an inquiry is not likely in any way to discourage communication of the defendants' views on the results or quality of Reuber's study. 74 Finally, the dissent purports to rely on Supreme Court precedent for its third special factor, the existence of an alternative defamation claim in the state courts. See dissent at 1074 (citing Bush, 103 S.Ct. 2404 and Davis, 442 U.S. at 245, 99 S.Ct. at 2277). The Supreme Court has indicated, however, that an alternative remedy may justify a court's refusal to imply a Bivens action only where Congress meant to preempt a Bivens remedy or to create an equally effective remedy for constitutional violations. Carlson, 446 U.S. at 19, 100 S.Ct. at 1472. Carlson rejected the availability of an FTCA action as a reason to preclude a Bivens action under this test even though the FTCA provided an alternative federal action for the precise conduct attacked in the constitutional tort action before it. Furthermore, in Bush, which dismissed a money damages action under the special factors doctrine, Justice Marshall noted, nothing ... foreclose[s] a federal employee from pursuing a Bivens remedy where his injury is not attributable to personnel actions which may be remedied under the federal statutory [civil service] scheme. Bush, 103 S.Ct. at 2418 (Marshall, J., concurring). This court later adopted Justice Marshall's position in holding that the district court must consider a civil servant's Bivens claims arising from conduct not administratively remediable by the Merit Systems Protection Board. See Bartel v. Federal Aviation Administration, 725 F.2d 1403, 1415 & n. 21 (D.C.Cir.1984); see also Williams v. I.R.S., 745 F.2d 702 at 705 (D.C.Cir.1984). 75 Moreover, it is clear that Reuber's defamation action should not be a special factor in this case since it is not a substitute to redress the constitutional wrongs that he alleges. The dissent seriously mischaracterizes Reuber's constitutional claims to justify its conclusion that Reuber be directed to [the] well articulated body of [defamation] law rather than to require this court to create a novel and probably superfluous cause of action. 30 See Dissent at 1074. Reuber's constitutional claims focus on neither the truth of the allegations in the letter of reprimand nor the publication of that letter, the relevant issues in any defamation action. 31 They focus rather on whether the letter was sent in retaliation for the dissemination of his malathion study. 32 76 Reliance on an alternative state law action to justify dismissal of Reuber's Bivens claim may also be improper. The Supreme Court has held, in a suit against federal prison officials, that survival of a decedent-plaintiff's Bivens action cannot be governed by state law. Carlson, 446 U.S. at 23-24, 100 S.Ct. at 1474. The Court stated that to ensure adequate redress of constitutional deprivations and deterrence of future violations [a] federal official contemplating unconstitutional conduct ... must be prepared to face the prospect of a Bivens action. Id. at 25, 100 S.Ct. at 1475. It therefore refused to allow state law standards to limit the scope of actionable wrongs under the Constitution. Nonetheless, the dissent, without mentioning Carlson, asserts that the fact that the source of the alternative remedy is state law [does not] preclude ... us from treating it as a factor militating against the creation of a new cause of action against private parties. 33 Dissent at 1074 (emphasis in original).
77 In addition to seeking damages, Reuber's complaint asks the court for an injunction ordering the defendants to stop interfering with Reuber's exercise of his constitutional rights, expunge or correct false or inaccurate documents relating to Reuber, and reinstate Reuber to his former position at the Frederick Cancer Research Center. Complaint at 20-21. Federal injunctive relief traditionally is presumed available against federal actors committing constitutional violations. 34 This is true regardless of whether or not the plaintiff may also have a Bivens action for damages. See Bartel v. Federal Aviation Administration, 725 F.2d 1403, 1415 (D.C.Cir.1984) (remanding claims for injunctive relief based on alleged due process violation where special factors doctrine justified dismissal of damages claim). Justice Harlan, concurring in Bivens, noted that there already existed a presumed availability of federal equitable relief against threatened invasions of constitutional interests, under Congress' general grant of subject matter jurisdiction for cases arising under the federal constitution. Bivens, 430 U.S. at 404, 91 S.Ct. at 2008 (Harlan, J., concurring). On numerous occasions prior to Bivens, the Supreme Court had permitted suits for injunctive relief brought directly under the constitution for violations of plaintiffs' constitutional rights. See, e.g., Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884 (1954); Philadelphia Co. v. Stimson, 223 U.S. 605, 32 S.Ct. 340, 56 L.Ed. 570 (1912); see also Bell v. Hood, 327 U.S. 678, 684 & n. 4, 66 S.Ct. 773, 777 & n. 4, 90 L.Ed. 939 (1946). Thus, recognizing that Reuber has alleged violations of his constitutional rights, we remand his prayer for injunctive relief to the district court for decision on the merits of his claims and for appropriate equitable relief if they are proven. 78 The extent of equitable relief appropriate in this case is not clear at this juncture. In my opinion, the propriety of particular forms of equitable relief should be determined by the district court according to the distinctive historical traditions of equity as an institution. Bivens, 403 U.S. at 404, 91 S.Ct. at 2009 (Harlan, J., concurring); see also Holmberg v. Armbrecht, 327 U.S. 392, 395-96, 66 S.Ct. 582, 584, 90 L.Ed. 743 (1946) (applying traditional equity test for injunctive relief from denials of federal statutory rights); Sprague v. Ticonic National Bank, 307 U.S. 161, 165-66, 59 S.Ct. 777, 779-80, 83 L.Ed. 1184 (1939) (same). Judge Starr believes that any form of injunctive relief is inappropriate. Judge Bork, however, concludes that a prohibitory injunction, reinstatement, and expungement of records are available. Consequently, on remand, equitable relief in the form of an injunction against future interference with Reuber's exercise of his constitutional rights, reinstatement, or expungement of personnel records may be granted. 79 In sum, we reverse the district court's dismissal of Reuber's constitutional claims against the corporate defendants for both damages and equitable relief. These claims are remanded to the district court for further proceedings consistent with this opinion. 35 We also reverse the district court's dismissal of Reuber's pendent state law claims. This court is generally reluctant to overturn, as an abuse of discretion, the district court's dismissal of pendent state law claims. In the present case, however, the district court dismissed the pendent state claims under the erroneous belief that there was no federal subject matter jurisdiction to hear the federal claims. Thus, in light of our disposition of the federal claims, it is necessary to remand to the district court, for further consideration, the issue of whether pendent jurisdiction lies for Reuber's state law claims.V. CONCLUSION 80 In conclusion, we affirm the district court's dismissal of the FTCA actions against the United States and the constitutional and common law tort claims against the individual defendants. For the reasons stated in Part IV, we reverse the district court's dismissal of the constitutional and pendent state law claims against the two corporate defendants Litton Industries, Inc., and Litton Bionetics, Inc. We remand these claims to the district court for further proceedings consistent with this opinion. 81 Judgment accordingly.