United States Information Agency v. Jan Krc

989 F.2d 1211, 300 U.S. App. D.C. 339, 1993 WL 103325

• Court: Court of Appeals for the D.C. Circuit
• Decided: July 23, 1993
• Docket: 91-5339
• Status: Published

Opinions

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

Opinion dissenting in part filed by Circuit Judge WALD.

D.H. GINSBURG, Circuit Judge:

This appeal arises from a decision by the United States Information Agency to terminate the Foreign Service appointment of Jan Krc. The USIA Office of Security (USIA-OS or OS) determined that Krc posed a security risk because of certain homosexual relationships he had had during his assignment in Belgrade. Krc alleges that the USIA violated his right to equal protection, tortiously interfered with his prospective employment prospects, and interfered with his civil service career in violation of § 1103 of the Foreign Service Act, 22 U.S.C. § 4133(a). The district court granted summary judgment for the USIA on the equal protection claim, and as to the latter two claims, held that it lacked jurisdiction or, in the alternative, that the USIA was entitled to summary judgment. We affirm the district court’s grant of summary judgment on the equal protection and tort claims and its dismissal for lack of jurisdiction of the statutory claim.

I. Background

Krc entered the Foreign Service with a limited appointment in 1982, and in 1983 was posted to Yugoslavia. While Krc was in Yugoslavia, the USIA Office of Security received certain information, classified “Secret,” regarding him. (The Government has filed the Secret information with this court under seal.) When the USIA debriefed Krc at the end of his posting in 1984, it undertook to find an explanation for this Secret information. During this debriefing, Krc revealed that while in Yugoslavia, he had engaged in homosexual conduct with a number of partners, including not only other Foreign Service officers (FSOs) but also the assistant military attache of a non-NATO European country and two nationals of a Communist country.

In October 1984 after an investigation the USIA Personnel Director, Angie Garcia, informed Krc that she intended to terminate his Foreign Service appointment; his sexual relationships, she wrote, “demonstrate[d] insubordination, irresponsibility, poor judgment and lack of discretion.” In December 1984, however, upon hearing Krc’s version of what he was told at a briefing about USIA's fraternization policy barring sexual relations with East Bloc nationals, Garcia decided to issue only an official letter of reprimand “based on the poor judgement [sic] and indiscretion demonstrated by [Krc’s] actions.” Shortly thereafter, the USIA Director of Security, Bernard Dowling, informed Garcia that he would “not approve any foreign service assignment of Mr. Krc because of the strong security risk involved.” Dowling explained that Krc “not only showed poor judgment and lack of discretion” while in Yugoslavia but “also committed acts which we feel make him a security risk in any foreign service assignment,” namely “engaging in homosexual relationships with eight different men, including two citizens of Yugoslavia.”

Because Dowling refused to approve any future overseas assignments for Krc, Garcia informed him that she was terminating his Foreign Service appointment pursuant to § 611 of the Foreign Service Act. On March 2, 1985, the USIA officially terminated Krc’s appointment to the Foreign Service and appointed him to a position in its domestic civil service (at a slightly higher annual salary). The USIA never revoked Krc’s security clearance.

Krc filed a complaint with the Foreign Service Grievance Board challenging the termination of his Foreign Service appointment. In March 1987 the FSGB ordered Krc reinstated in the Foreign Service. The USIA sued in District Court to set aside the FSGB’s order, and Krc counterclaimed, seeking enforcement of the FSGB’s order and alleging that the USIA’s failure to comply with the order violated the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq., and the Due Process Clause of the Fifth Amendment.

Meanwhile, Krc began to pursue job opportunities elsewhere. In 1988 he tried to secure part-time work with a contractor working for the Defense Intelligence Agency. Krc could not be authorized for such work, however, until the Defense Industrial Security Clearance Office (DISCO) converted his security clearance into an industrial security clearance. In May 1988 DISCO submitted to the USIA-OS a form letter inquiring whether any “adverse information was developed subsequent to issuance” of Krc’s security clearance. The OS answered in the affirmative, after which Krc was not hired for the job. As a result, Krc added a new counterclaim, alleging that by advising DISCO of “adverse information” about him, the USIA tortiously interfered with his prospective employment opportunities and business advantage.

The district court granted the USIA’s motion to set aside the FSGB’s order and dismissed the APA and due process counterclaims. The Court of Appeals affirmed, but remanded for the district court to consider Krc’s equal protection and tortious interference claims. United States Information Agency v. Krc, 905 F.2d 389 (D.C.Cir.1990). Meanwhile, in February-1990 Krc applied for an excursion tour to a United States consulate in Czechoslovakia, but the OS refused to clear him for that position. On remand, Krc added a third counterclaim, alleging that the USIA had refused to approve him for the excursion tour in retaliation for his earlier grievance and had therefore interfered with his civil service career in violation of § 1103 of the Foreign Service Act, 22 U.S.C. § 4133(a).

II. Analysis

As indicated above, the district court denied Krc relief on all counts. We affirm that judgment for the reasons that follow.

A. Equal Protection

Krc alleges that his termination from the Foreign Service “deprived [him] of the equal protection of the law in violation of the Fifth Amendment.” Specifically, Krc contends that the USIA discriminated against him on the basis of “his sexual orientation and conduct, factors that have no relationship to [his] ability to perform the duties of a Foreign Service officer or to his trustworthiness and loyalty to the United States.” After reviewing the record and the Secret information submitted in camera, the district court found that the USIA had terminated Krc not on account of his sexual orientation but solely on account of his particular conduct and that the USIA had a rational basis for doing so. The district court therefore granted the USIA's motion for summary judgment on the equal protection claim.

In Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), the Supreme Court outlined the showing that a plaintiff must make in order to prove intentional discrimination. Although Price Waterhouse itself was a Title VII sex discrimination suit, the way in which the Court allocated the burden of proof there applies equally to all claims of employment discrimination. See, e.g., Pontarelli v. Stone, 930 F.2d 104, 114 (1st Cir.1991) (Price Waterhouse applies to § 1983 claim alleging employment discrimination in violation of the equal protection clause of the Fourteenth Amendment). First, the plaintiff must prove that an illegitimate factor played a substantial role in the challenged employment decision. See Price Waterhouse, 490 U.S. at 258, 109 S.Ct. at 1794 (opinion of Brennan, J.); id. at 259, 109 S.Ct. at 1795 (White, J., concurring); id. at 265, 109 S.Ct. at 1798 (O’Con-nor, J., concurring). If the employee makes that showing, then he or she will prevail unless the employer proves that it would have made the same decision even in the absence of the impermissible factor, an affirmative defense. See id. at 244-45, 109 S.Ct. at 1787-88 (opinion of Brennan, J.); id. at 259-60, 109 S.Ct. at 1795-96 (White, J., concurring) (quoting Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1987)); Price Waterhouse, 490 U.S. at 276-77, 109 S.Ct. at 1804-05 (O’Connor, J., concurring).

In this case, it is clear that the USIA would have terminated Krc from the Foreign Service on the basis of his conduct, i.e., regardless of his sexual orientation. Therefore, we need not determine whether Krc’s homosexuality in fact played a substantial role in the employment decision, nor whether it would have been rational for the USIA to have relied upon his homosexuality in terminating him from the Foreign Service (as opposed to restricting him to assignments in countries where homosexuality is not unlawful or perhaps even opprobrious, cf. Padula v. Webster, 822 F.2d 97, 104 (D.C.Cir.1987)).

It is beyond genuine dispute that the USIA would have terminated the Foreign Service appointment of an officer who had heterosexual escapades with the military attache of a neutral country and with nationals of a Communist country. Such behavior reflects appallingly poor judgment and virtually invites an approach from a hostile intelligence service. Although Dowling testified that Krc’s sexual activity probably gave rise to the Secret information, Krc alleges that the facts recounted in the Secret information actually arose prior to his sexual dalliances in Yugoslavia, and we assume, as we must, that the plaintiff’s allegation is true. Even so, it is evident that these liaisons dangereuses at a minimum aggravated the security concerns raised by the Secret information. Regardless of the order in which they arose, it was clearly the combination of Krc’s conduct and the Secret information that prompted the OS to take the steps necessary to insulate him from an approach by a hostile intelligence agency in an uncontrollable foreign environment.

*

Moreover, Krc can point to no pattern, or even instance, of USIA disciplinary action to suggest that the agency discriminated against him in his security review on account of his homosexuality. Indeed, the evidence demonstrates that the USIA responds to sexual indiscretions — both homosexual and heterosexual — on a case-by-case basis, and evaluates the totality of the circumstances in deciding how to respond. Thus, in the four instances of record in which an FSO admitted to having engaged in homosexual conduct either with a non-Communist foreign national or with another FSO, the USIA imposed no sanction. The record does not contain an exact heterosexual analogue to Krc’s case, i.e., in which the agency had information about a heterosexual FSO similar to the Secret information about Krc and in which the heterosexual FSO had relations with persons who might well be used as informants or be vulnerable to blackmail, such as the Communist nationals and the neutral military attache with whom Krc was involved. In the closest cases of record, of which there are four, an FSO had had a heterosexual tryst with a foreign national in a hostile country. The USIA suspended the security clearances of all four FSOs and in one instance terminated the FSO’s employment as well. In sum, the uncontradicted evidence leads overwhelmingly to the conclusion that Krc’s “termination resulted ... from the [USIA’s] individualized determination that his own case represented a threat to ... national security.” See Doe v. Gates, 981 F.2d 1316, 1324 (D.C.Cir.1993).

The simple fact is that Krc’s conduct portrayed abysmal judgment and exacerbated the security concerns induced by the Secret information. Therefore, it is most unlikely that the USIA would have posted him abroad regardless of his sexual orientation. An FSO who cannot serve abroad is a contradiction in terms. Accordingly, Krc was not denied equal protection of the law.

B. Interference with Prospective Employment Prospects

Krc alleges that by advising the DISCO that it had developed “adverse information” about him, the USIA prevented him from pursuing another employment opportunity and intentionally interfered with his prospective employment opportunities and business advantage. In his complaint Krc requested both injunctive and monetary relief, but he subsequently withdrew all claims for monetary damages.

Although a claim for monetary damages would clearly be barred by sovereign immunity, see 28 U.S.C. § 2680(h) (Federal Tort Claims Act does not waive sovereign immunity for “claims arising out of ... interference with contract rights”); Art Metal-U.S.A., Inc. v. United States, 753 F.2d 1151, 1155 (D.C.Cir.1985) (“claims for interference with prospective advantage are ... claims arising out of interference with contract rights”), whether sovereign immunity bars Krc’s claim for injunctive relief is not quite so easily answered. We start with the Administrative Procedure Act, which provides: “Nothing herein ... confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.” 5 U.S.C. § 702. Relying upon Sharp v. Weinberger, 798 F.2d 1521 (D.C.Cir.1986), the USIA argues that the Federal Tort Claims Act impliedly forbids specific relief for tortious interference with prospective employment opportunities. In Sharp we held that “[t]he waiver of sovereign immunity in the [APA] does not run to actions seeking declaratory relief or specific performance in contract cases” because, by expressly providing for money damages as the “sole remedy” for contractual breach by the federal government, “the Tucker Act and the Little Tucker Act impliedly forbid [specific] relief.” Id. at 1523. Here, in contrast, the FTCA specifically bars money damages as a remedy for Krc's claim, which by parity of reasoning implies that injunctive relief is available. Moreover, Krc does not seek specific performance of a contract, and the relief he does seek would impose a far lesser burden upon the Government than would an equitable action for breach of contract. Therefore, we conclude that the district court erred in finding that sovereign immunity bars Krc’s request for specific relief.

The district court also held, in the alternative, that the USIA was entitled to summary judgment because its answer to the DISCO’s inquiry regarding adverse information relevant to Krc’s security clearance “was no more than an accurate response.” We agree. “[Tjhere is a general duty not to interfere intentionally with another’s reasonable business expectancies of trade with third parties ... unless the interference is not improper under the circumstances.” Art Metal, 753 F.2d at 1154-55 (quoting Restatement (Second) of Torts § 766 comment b (1979)). The USIA’s action was clearly “not improper under the circumstances.” The USIA is authorized to disclose “relevant data” to “duly authorized security agencies” regarding “significant security information in the file of a USIA employee.” 55 Fed.Reg. 31963 (August 6, 1990).

Furthermore, “adverse information” clearly had come to light subsequent to issuance of Krc’s security clearance: the USIA had learned that he had had sexual relations with the military attache of a neutral country and with two nationals of a Communist country during his stint in Belgrade. This information can only be characterized as “adverse” because it shows such poor judgment on the part of an FSO with access to highly classified material that it caused the USIA to terminate his Foreign Service appointment. There is therefore no genuine issue of material fact relevant to Krc’s claim of improper interference, and we affirm the district court’s grant of summary judgment.

C. Reprisal

Krc claims that the USIA refused to approve him for an excursion tour in Czechoslovakia in retaliation for his grievance, and thereby restrained, harassed, or otherwise interfered with Krc and his career, in violation of 22 U.S.C. § 4133(a). The district court correctly held that it lacked jurisdiction over this claim.

The alleged reprisal occurred after Krc’s Foreign Service appointment had been terminated. Although a current member of the Foreign Service may file a grievance for an “action alleged to be in the nature of reprisal,” 22 U.S.C. § 4131(a)(1)(F), a former member such as Krc may file a grievance “only with respect to allegations described in section 4131(a)(1)(G),” 22 U.S.C. § 4132, to wit “denial of an allowance, premium pay, or other financial benefit.” 22 U.S.C. § 4131(a)(1)(G). Krc is thus barred from seeking an administrative remedy for his reprisal claim.

In withholding an administrative remedy from a former FSO alleging reprisal, it appears that the Congress intended also to deny him a judicial remedy. The Supreme Court considered a similar situation in United States v. Fausto, 484 U.S. 439, 108 S.Ct. 668, 98 L.Ed.2d 830 (1988). There the Court held that by precluding administrative review of dismissals of employees in the excepted service, the Civil Service Reform Act “displays a clear congressional intent to deny the excluded employees ... judicial review ... for personnel action[s] covered by” the CSRA. Id. at 447, 108 S.Ct. at 673. See also Block v. Community Nutrition Institute, 467 U.S. 340, 347, 104 S.Ct. 2450, 2454, 81 L.Ed.2d 270 (1984) (holding that Agricultural Marketing Agreement Act, which provides for administrative review at the instance of milk handler affected by a milk marketing order but not at the instance of consumer so affected, by implication precludes consumer from obtaining judicial review of order).

Like the CSRA, the Foreign Service Act provides “a comprehensive system for reviewing personnel action[s] taken against federal employees.” Fausto, 484 U.S. at 455, 108 S.Ct. at 677; see also Senate Report No. 96-913, reprinted in 1980 U.S.Code Cong. & Admin.News 4419 (“Foreign Service Act is intended to be a companion measure” to the CSRA). Yet the Act clearly precludes an administrative grievance by a former FSO alleging reprisal. As in the CSRA, these factors “combine to establish a congressional judgment that [a former FSO] should not be able to demand judicial review” for a reprisal claim. See id. at 448, 108 S.Ct. at 674.

III. Conclusion

For the foregoing reasons, the judgment of the district court is

Affirmed.

Contrary to our dissenting colleague, see Dis.Op. at 1217-19, 1220-21, 1224-25, 1226, this understanding of the record in no way contradicts our earlier decision in this case. In United States Information Agency v. Krc, 905 F.2d 389 (D.C.Cir.1990), we held that the FSGB had no authority to review Krc’s termination because he "was not terminated for misconduct.” Id. at 394. That is, Krc’s conduct did not necessarily “violate a canon of conduct,” id., such as the USIA's fraternization policy, and thus did not constitute “misconduct." But conduct that is not misconduct can have an adverse national security implication. See, e.g., 5 U.S.C. § 7311, Note, Executive Order 10450, at § 8(a)(1) (1988 ed.) (listing a broad array of circumstances relevant to a security determination, including evidence of unreliability, immoral behavior, illness, or ”[a]ny facts which furnish reason to believe that the individual may be subjected to coercion, influence, or pressure which may cause him to act contrary to the best interest of the national security”). Conduct that violates no canon may, as here, for example, reflect poor judgment, and that is hardly irrelevant to the USIA’s determination about an individual's fitness for Foreign Service duty overseas.

Moreover, when this case was first here, we never suggested that Krc’s homosexuality was the sole reason for, or even "a necessary ingredient” in (Dis.Op. at 1225 n. 13), his termination. Nor did we ever say — or even have occasion to say — that Krc’s conduct was wholly irrelevant to the USIA’s decision to terminate his Foreign Service appointment, as the dissent seems to suggest. Contra Dis.Op. at 1217 (“we found as a matter of law that he was not dismissed because of any particular conduct”). Indeed the record makes clear that several factors, especially Krc’s ill-advised conduct, contributed to the agency’s decision to terminate Krc’s Foreign Service appointment. Compare McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-804, 93 S.Ct. 1817, 1824-1825, 36 L.Ed.2d 668 (1973) (test for proving intentional discrimination where single reason motivates employment decision) with Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (test for establishing discrimination in "mixed motive” case). Originally Garcia said she was terminating Krc’s appointment because he had ”demonstrate[d] insubordination, irresponsibility, poor judgment and lack of discretion.” In refusing to approve him for posting overseas, Dowling later cited Krc’s "poor judgment and lack of discretion” (as evidenced by his conduct in Yugoslavia) as well as “his homosexuality.” Accord Dis.Op. at 1223 (referring to "Dowling’s three-pronged explanation” for Krc’s termination).

Assuming arguendo that Krc’s sexual orientation was one "significant” factor in the USIA’s employment decision, as the dissent argues at length, see Dis.Op. at 1219, 1222, 1222-25, 1225-26, and that it was an illegitimate factor, the USIA would still prevail under Price Waterhouse if, as it claims, it would have terminated Krc’s appointment based solely upon its other, unquestionably legitimate reasons for doing so. See Price Waterhouse, 490 U.S. at 244-45, 109 S.Ct. at 1787-88 (opinion of Brennan, J.); id. at 259-60, 109 S.Ct. at 1795-96 (White, J., concurring); id. at 276-77, 109 S.Ct. at 1804-05 (O’Con-nor, J., concurring). Therefore, contrary to the dissent, we are not “simply pick[ing] from the menu the most delectable item for [our] legal theory.” Dis.Op. at 1223. Rather, like the district court before us, see United States Information Agency v. Krc, No. 87-1740, at 4-5, 1991 WL 166683 (D.D.C. Aug. 12, 1991) we think it perfectly clear that the USIA would have terminated Krc’s Foreign Service appointment based solely upon the legitimate reasons it gave — i.e., Krc’s sexual indiscretions in combination with the Secret information regarding him.