Liff v. Office of Inspector General for U.S. Department of Labor

          Argued October 26, 2017

         Appeals from the United States District Court for the District of Columbia (No. 1:14-cv-01162)

          Benjamin M. Shultz, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs was Michael S. Raab, Attorney. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

          Paul Y. Kiyonaga argued the cause and filed the briefs for plaintiffs-appellees.

          Before: Garland, Chief Judge, and Pillard and Wilkins, Circuit Judges.

          OPINION

          WILKINS, CIRCUIT JUDGE.

         Stewart Liff runs a human resources consulting business that contracts with various government and private clients - or he did, he alleges, prior to the reputational injury caused by scurrilous reports from the Office of Inspector General for the Department of Labor ("DOL-OIG") and the Office of Personnel Management ("OPM"), disseminated by government officials and publicized by the Washington Post. Liff, individually and through his consulting business, Stewart Liff & Associates, Inc., sued DOL, DOL-OIG and OPM alleging violations of his due process rights and the Administrative Procedure Act. Liff asserted a claim for damages under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), alleging that individual officers - acting DOL Inspector General Daniel Petrole, DOL Deputy Secretary Seth Harris, and OPM Director John Berry (collectively, "the Bivens Defendants" or "Defendant-Appellants"), as well as two unknown agents - violated his constitutional rights under the Due Process Clause of the Fifth Amendment by issuing erroneous reports that damaged Liff's reputation, barred him from future government contracts, and deprived him of his liberty interest in pursuing his chosen profession.

         Defendants filed a motion to dismiss, in which Defendant-Appellants Petrole, Harris, and Berry moved to dismiss Liff's Bivens claim on the basis that alternative remedies were available to protect his constitutional interest and on qualified-immunity grounds, arguing that they had violated no clearly established constitutional right. The District Court denied the motion as to the Bivens Defendants, reasoning that it was "premature" to decide whether a Bivens remedy was available and rejecting Defendant-Appellants' assertion of qualified immunity. The agencies and the Bivens Defendants sought reconsideration of other aspects of the District Court's decision. The Bivens Defendants then appealed the District Court's initial decision on the motion to dismiss, asserting that it was error not to decide the availability of a Bivens remedy and that they were entitled to qualified immunity.

         We reverse. The District Court should have decided the availability of a Bivens remedy as a threshold question gating whether the Bivens Defendants must defend against this suit in their personal capacities. Reviewing that question of law directly, we conclude that no Bivens remedy is available for Liff's claims. Congress has provided significant remedies for disputes between contractors and the government entities that engage them, as well as for persons aggrieved by the government's collection, maintenance, and dissemination of information. In light of these alternative remedies and the comprehensive remedial schemes they represent, we decline to extend a Bivens remedy for Liff's claims.

         Background

         We accept as true the well-pleaded allegations of the Complaint for the purpose of this appeal, as did the District Court. See Davis v. Billington, 681 F.3d 377, 379 (D.C. Cir. 2012); Wilson v. Libby, 535 F.3d 697, 701 (D.C. Cir. 2008).

         Liff is a "nationally-recognized consultant . . . on human resources management issues." Compl. I. After retiring from a career in the Department of Veterans Affairs ("VA"), Liff opened a consulting firm called Stewart Liff & Associates and began providing training and resources on management issues for various government entities. His clients included the VA, the Departments of Labor, Defense, Agriculture, and Treasury, OPM, the State of Georgia, and the World Bank. Compl. ¶¶ 15-16. Some 90% of Liff's consulting and training work was for federal agencies. Compl. ¶ 18.

         In 2009, Liff was hired as a subcontractor to provide consulting services to the Department of Labor Veterans' Employment and Training Service ("DOL-VETS"), after Assistant Secretary of Labor Ray Jefferson directed agency contracting staff to look into procuring Liff's services. Compl. ¶¶ 20-22. Liff alleges that Jefferson requested that DOL-VETS staff Angela Freeman and Paul Briggs "determine whether Liff could be hired to provide consulting services, in accordance with the law and applicable ethical principles." Compl. ¶ 21. DOL-VETS eventually hired Liff as a subcontractor through contractors For Your Information, Inc. and MSTI, Inc. Compl. ¶¶ 22-23. Liff's work for DOL-VETS included three "management assessment reports" on topics including "program development methods and processes, " union relations, "visual management strategies at DOL-VETS to boost employee performance, " and ways to improve the tracking and evaluation of agency programs. See Compl. ¶¶ 26-29.

         The events giving rise to Liff's claim begin with "an expanded version of the first management assessment report" suggesting changes to the DOL-VETS office. Compl. ¶¶ 32-33. Following complaints from DOL-VETS employees Freeman and Briggs about Liff's report, DOL-OIG began an investigation into Liff's services. Under acting Inspector General Petrole, DOL-OIG issued a report in July 2011, which concluded that DOL-VETS improperly hired Liff under pressure from Jefferson. Compl. ¶ 38. The DOL-OIG report bore a banner stating that "[the report] and its contents are not to be distributed outside of [the] agency." Compl. ¶ 39 (emphasis omitted). However, the report eventually was posted publicly on the internet, and the Washington Post published an article in which "Liff was a central focus." Compl. ¶¶ 39, 45. Liff alleges that the report and related publicity included "blatant misstatements and false characterizations, " including about Liff's relationship with Jefferson, about Liff's timekeeping practices, that one of Liff's "key roles . . . was that of a quasi interior designer 'picking colors, '" that Liff was paid some $700, 000 for his consulting work, and that Liff worked on a "secret report" for Jefferson, "thereby suggesting that Liff had engaged in illicit, unethical activities." Compl. ¶ 42.

         After this information became public, Deputy Secretary Seth Harris issued a memorandum which "prais[ed] DOL-OIG for its report and set[] forth concrete follow-up actions" including a "vow[]" to "'aggressively pursue' Liff for 'all valid causes of action.'" Compl. ¶ 48. Liff "was not apprised of these specific allegations" before Harris issued the memorandum and "thus did not have an opportunity to meaningfully respond." Id. Like the DOL-OIG report, Harris's memorandum was posted online. Id.

         Liff also worked with OPM. In July 2011, Liff learned that the Office of the Inspector General for OPM ("OPM-OIG") "had initiated an investigation into how Liff's services as a subcontractor to OPM . . . had been arranged." Compl. ¶ 47. In August 2011, OPM "terminat[ed] the task order under which Liff was providing human resources management consulting, " for which Liff expected to be paid an outstanding amount of "approximately $350, 000." Id. Liff did not receive "any prior notice" of this termination "or opportunity to ...