Court Opinion

ID: 9487012
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:05:52.243985+00
Date Added: 2024-06-11T17:52:03.032091
License: Public Domain

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 Bivens suits. FDIC v. Meyer, — U.S. -, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). Despite our prior decision in Reuber, the majority here chooses to create a highly debatable *1229extension 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 Bivens — affording a damages remedy to those aggrieved by unconstitutional actions — and 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, 91 S.Ct. 1999, 29 L.Ed.2d 619 (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 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); Schowengerdt v. General Dynamics Corp., 823 F.2d 1328, 1337-39 (9th Cir.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 Circuit — like every one of those circuits — allows plaintiffs to bring Bivens actions against nongovernmental entities as well as individuals. Reuber, 750 F.2d at 1053-61 (opinion of Wald, J.); id. at 1063-65 (opinion of Bork, J.).
Our opinion in Reuber was fully consistent with the policies of Bivens itself. Like Bivens, Reuber relied on the historical availability of a damages remedy “for an invasion of personal interests in liberty.” 750 F.2d at 1056 (quoting Bivens, 403 U.S. at 395, 91 S.Ct. at 2004). In light of this history, Bivens and subsequent cases have held that the Constitution incorporates a damages remedy, which courts must recognize unless Congress has provided an equally effective alternative remedy. Bivens, 403 U.S. at 395-97, 91 S.Ct. at 2004-05; Carlson v. Green, 446 U.S. 14, 18-19, 100 S.Ct. 1468, 1471-72, 64 L.Ed.2d 15 (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 contains its own damages remedy, 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.).
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 actors — the 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 pan*1230el’s result in the present ease 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, — U.S. -, 114 S.Ct. 996, 127 L.Ed.2d 308 (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 Meyer to exclude private' entities from Bivens 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 1228-29. 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 bane 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 Supreme Court emphatically noted 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. — U.S. at -, 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 1228-29. In general, I think it imprudent to presume that the Supreme Court intended to overrule longstanding circuit precedent unless that result 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 examines the 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 intended — and probably did intend — to 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 principal distinctions on the merits that appear dispositive. First, the Court in Meyer seemed primarily concerned with the potential for direct suits against agencies to undermine the deterrence rationale of Bivens. — U.S. at -, 114 S.Ct. at 1005. Of course, Bivens itself was not concerned primarily with deterrence, see 403 U.S. at 407-08, 91 S.Ct. at 2010-11 (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 for private entities 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. — U.S. at -, 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 *1231is enough reason to deny a remedy under Meyer. Maj. op. at 1226-27. 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 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 1227. 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 extends to such de minimis circumstances. See maj. op. at 1227.
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. — U.S. at - - -, 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 government — or any lesser federal fiscal tragedy — as 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 has taken 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. Kauffinan’s case. Perhaps it is correct, and perhaps it is not. But the Supreme Court has not yet decided such a case — either directly or through the back door — and 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.
My disagreement becomes a dissent because, proceeding to the merits of Mr. Kauff-man’s state 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 Department superiors about claimed financial improprieties. 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. Kauff-man.
I think these allegations suffice to state a constitutional claim. Mr. Kauffman has alleged that a majority of the School Board acted as agents of the federal government— within the scope of their employment — when 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, 102 S.Ct. 2777, 2785, 73 L.Ed.2d 534 (1982). Moreover, if Mr. Kauff-man 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.

 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).