Moreno v. Small Business Administration

681 F. Supp. 1370, 1988 U.S. Dist. LEXIS 2309, 1988 WL 23605
CourtDistrict Court, D. Minnesota
DecidedMarch 22, 1988
DocketNo. Civ. 3-87-239
StatusPublished
Cited by2 cases

This text of 681 F. Supp. 1370 (Moreno v. Small Business Administration) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moreno v. Small Business Administration, 681 F. Supp. 1370, 1988 U.S. Dist. LEXIS 2309, 1988 WL 23605 (mnd 1988).

Opinion

MEMORANDUM AND ORDER

DEVITT, District Judge.

The government has moved for dismissal of this action for lack of jurisdiction and for failure to state a claim upon which relief may be granted.

BACKGROUND

For purposes of this motion, the facts are alleged in plaintiff’s complaint are assumed to be true. According to the complaint, the plaintiff is a management level employee in the Small Business Administration (SBA) who held the position of District Director of SBA’s Minneapolis District Office from November 1982 through July 1985. Shortly after his appointment to this position he began receiving reports of improprieties in the Minnesota District portfolio of minority contracting awards (8(a) contracts). Plaintiff relayed these reports to the Inspector General of the SBA and a full investigation and criminal prosecutions followed.

In March of 1985, plaintiff was informed that he had been selected to fill a vacancy in a pilot position entitled Regional Director for Private Sector Initiatives. Plaintiff’s position was the only one of its kind. In December of 1986, plaintiff was informed that his position was being abolished and that there were no positions in his competitive area to which he was entitled. Plaintiff was placed in a downgrade position as Assistant District Director for Business Development in Cleveland, Ohio.

Essentially, plaintiff alleges that he was placed in a deliberately temporary, experimental position and then in a downgrade position in retaliation for “whistle-blowing” by conveying reports of improprieties to the Inspector General. He also alleges racial discrimination. He has instituted this action against the SBA and individually against nine employees or former employees of the SBA.

COUNT I—CONSPIRACY

In Count I, plaintiff alleges that defendants conspired to violate plaintiff’s first amendment rights in violation of 42 U.S.C. sections 1985 (1) and (3). The government makes three arguments in support of its claim that Count I fails to state a claim. The government claims that the administrative grievance and review system of the Civil Service Reform Act (CSRA) provides an exclusive remedy for federal employees with employment related claims, precluding an action under Section 1985. The government cites Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed. 2d 648 (1983), in support of this argument. However, Bush v. Lucas determined only that a nonstatutory cause of action should not be judicially created for federal employee grievances that could be redressed through the administrative system established by Congress. Bush v. Lucas does not hold or suggest that the CSRA precludes other statutory causes of action.

The government next argues that because Section 1985 confers enforcement not substantive rights, plaintiff should pursue any rights conferred by the CSRA under its own enforcement provisions. While it is true that Section 1985 creates no substantive rights, Great American Savings and Loan Ass’n v. Novotny, 442 U.S. 366, 99 S.Ct. 2345, 60 L.Ed.2d 957 (1979), a close reading of the complaint shows that Count [1372]*1372I alleges a conspiracy by defendants to deprive whistle-blowers of equal protection of their rights conferred by the first amendment. Thus, the government’s argument that CSRA rights must be pursued under the remedial provisions of the Act does not demonstrate a failure to state a claim in Count I.

The government also contends that plaintiff has failed to allege a class based animus and purposeful discrimination, necessary elements of a Section 1985(3) action. However, whistle-blowers have been designated as a “class” within the meaning of Section 1985(3), as have political opponents, supporters of a political candidate, and even a single family. Lapin v. Taylor, 475 F.Supp. 446, 450 (D.Hawaii 1979), citing Life Ins. Co. of North American v. Reichardt, 591 F.2d 499 (9th Cir.1979); Means v. Wilson, 522 F.2d 833 (8th Cir.1975); Cameron v. Brock, 473 F.2d 608 (9th Cir.1973); Azar v. Conley, 456 F.2d 1382 (6th Cir.1972). Thus, Count I’s allegations of low performance ratings and reassignment in retaliation for whistle-blowing state a cause of action under 42 U.S.C. Sections 1985(1) and (3).

COUNT II — RACIAL DISCRIMINATION

In Count II, plaintiff alleges racial discrimination in violation of 42 U.S.C. Section 1981. The government contends that plaintiff has failed to state a claim for racial discrimination, arguing that Title VII provides the exclusive remedy for federal employees alleging such discrimination. Brown v. General Services Administration, 425 U.S. 820, 96 S.Ct. 1961, 48 L.Ed.2d 402 (1970); Premachandra v. United States, 739 F.2d 392, 394 (8th Cir.1984).

The government also noted that even if Title VII had been invoked, the complaint would be deficient because of plaintiffs failure to exhaust his administrative remedies under Title VII for his claim of discrimination. It is well established that a plaintiff must exhaust its administrative remedies in a Title VII action before seeking judicial redress. See 42 U.S.C. Section 2000e-16(c); McIntosh v. Weinberger, 810 F.2d 1411, 1424 (8th Cir.1987). Finally, the government argues that a Title VII complaint may only be taken against the head of the involved agency in his or her individual capacity. See, e.g., Cooper v. U.S. Postal Service, 740 F.2d 714, 715-716 (9th Cir.1984).

Plaintiff admits his failure to exhaust his administrative remedies and does not contest the government’s argument that Title VII preempts Section 1981 in this context. Consequently, the motion to dismiss is granted with respect to this Count.

COUNT III — CONSTITUTIONAL TORT

Count III alleges that defendants individually and jointly acted in violation of his first amendment rights by effecting plaintiff’s lateral transfer and demotion in retaliation for whistle-blowing. He seeks recovery of damages on a Bivens -type theory.

The government contends that a Bivens remedy is unavailable for claims arising out of a federal employment relationship, citing Bush v. Lucas,

Related

Moreno v. Small Business Administration
877 F.2d 715 (Eighth Circuit, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
681 F. Supp. 1370, 1988 U.S. Dist. LEXIS 2309, 1988 WL 23605, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moreno-v-small-business-administration-mnd-1988.