Young v. Perdue

• Court: District Court, District of Columbia
• Decided: June 24, 2020
• Docket: Civil Action No. 2019-2144
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

RICHARD YOUNG, : : Plaintiff, : Civil Action No.: 19-2144 (RC) : v. : Re Document No.: 13 : SONNY PERDUE, Secretary, United States : Department of Agriculture, : : Defendant. :

MEMORANDUM OPINION

DENYING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS

I. INTRODUCTION

This case involves Plaintiff’s claims of discrimination, brought pursuant to Title VII of

the Civil Rights Act of 1964, against his employer, the United States Department of

Agriculture’s (“USDA”) Foreign Agriculture Service (“FAS”). The Complaint describes a

number of potential adverse employment actions, including a personnel misconduct

investigation, Compl. ¶ 27, ECF No. 1, withdrawal of Plaintiff’s interim security clearance, id.

¶ 24, placement on administrative leave, id., and indefinite suspension, id. ¶ 31. Defendant filed

a motion for judgment on the pleadings pursuant to Rule 12(c) and argues that Plaintiff’s claims

are barred by Dep’t of Navy v. Egan, 484 U.S. 518 (1988), which broadly prohibits courts from

deciding claims that require evaluating the merits of a security clearance determination. See

Def.’s Mot. J. Pleadings, ECF No. 13; Def.’s Mem. Supp. J. Pleadings (“Def.’s Mem.”), ECF

No. 13-1. Because the Court concludes that, at this early stage, it cannot yet determine whether

Plaintiff’s claims require evaluating the merits of a security clearance determination, and for the

reasons set forth below, Defendant’s motion is denied. II. FACTUAL BACKGROUND

Plaintiff, an African-American male, started working as the Chief Information Officer

(“CIO”) for USDA’s FAS in January 2015. Compl. ¶ 6. Plaintiff’s first line supervisor was

Bryce Quick, the Chief Operating Officer, who in turn reported to Phil Karsting, the FAS

Administrator. Id. ¶ 8. Shortly after starting as CIO, Plaintiff became concerned about certain

relationships between contractors, Mr. Quick, and other FAS employees; he believed that Mr.

Quick may have been accepting kickbacks and gratuities from preferred contractors. Id. ¶¶ 10–

20. Plaintiff reported these concerns to the Office of Inspector General (“OIG”) in late 2016. Id.

¶ 21.

Plaintiff alleges that in response to his report to the OIG, Mr. Quick and his assistant

began denying travel and training opportunities, started micromanaging his work, and “began a

gossip campaign against [Plaintiff], falsely stating that he awarded contracts to individuals with

whom he had close personal relationships.” Id. ¶ 22. Plaintiff sought EEO counseling because

he believed he was not being treated the same as other employees not part of his protected class.

Id. ¶ 23.

About a week after seeking EEO counseling, on March 2, 2017, FAS alerted the Office of

Homeland Security and Emergency Coordination that it had an active personnel misconduct

investigation regarding Plaintiff. Pl.’s Opp’n Mot. J. Pleadings (“Pl.’s Opp’n”) Ex. 3, ECF No.

15-4. 1 The memorandum describing the investigation explains that the allegations against

1 The Court may rely on the memorandum describing the personnel misconduct investigation as incorporated by reference in the Complaint and subject to judicial notice as part of the administrative record in this case. See Jimenez v. McAleenan, 395 F. Supp. 3d 22, 43 n.19 (D.D.C. 2019) (citing Kambala v. Checchi & Co. Consulting, Inc., 280 F. Supp. 3d 131, 137 (D.D.C. 2017) and Mpoy v. Rhee, 758 F.3d 285, 291 n.1 (D.C. Cir. 2014)). For the same reason, the Court also may rely on: the “Withdrawal of Temporary Security Clearance,” Def.’s Mem. Ex. A at 68, ECF No. 13-2; the “Notice of Administrative Leave,” id. at 63; the “Notice of

2 Plaintiff related to conflicts of interest in awarding contracts, unauthorized use of system

credentials, inappropriate charging of hours against contractors, and failure to report a civil

judgment. Id. The memorandum also notes that Plaintiff “currently holds an Interim Secret

clearance that was granted by USDA on 2/10/2016.” Id.

At nearly the same time, Plaintiff received notice that his interim security clearance had

been withdrawn pending additional information “regarding the alleged conflict of interest,

misuse of Government Information System, financial consideration, and personal conduct.”

Def.’s Mem. Ex. 1 at 68, ECF No. 13-2. On March 3, 2017, Plaintiff was placed on

administrative leave because his “interim Secret Security clearance was suspended on March 2,

2017.” Id. at 63. Plaintiff filed a formal disclosure with the Office of Special Counsel (“OSC”)

in May 2017 because he believed that his placement on administrative leave stemmed from his

complaint to the OIG. Compl. ¶ 26. In late May or early June 2017, Plaintiff was interviewed

by someone from FAS about the personnel misconduct investigation and “learned of the

pretextual nature of the allegations against him, and that many of the allegations had been raised

by [a contractor], just after [Plaintiff] made an OIG complaint against him.” Id. ¶ 27. On

October 5, 2017, Plaintiff received a “Notice of Proposed Removal” that detailed the findings of

the misconduct investigation, noted the withdrawal of his security clearance, and recommended

termination. See Def.’s Mem. Ex. B at 1–15. However, Plaintiff was not terminated; the OSC

stayed Plaintiff’s removal “pending the outcome of OIG’s investigation of Quick.” Compl. ¶ 29.

On February 19, 2019, Plaintiff received a “Notice of Decision for Indefinite Suspension”

that noted the withdrawal of his security clearance and stated that his “position requires that [he]

Proposed Removal,” Def.’s Mem. Ex. B, ECF No. 13-3; and the “Notice of Decision for Indefinite Suspension,” Def.’s Mem. Ex. C, ECF No. 13-4.

3 obtain and maintain access to classified information as a condition of continued employment.”

Def.’s Mem. Ex. C at 1. Plaintiff is currently challenging the decision to revoke his security

clearance through a separate administrative appeal. Compl. ¶ 31. 2

III. LEGAL STANDARD

Defendant’s motion asks for judgment on the pleadings pursuant to Rule 12(c), which

allows a party to seek judgment “[a]fter the pleadings are closed—but early enough not to delay

trial.” Fed. R. Civ. P. 12(c). A motion under Rule 12(c) “asks the court to render ‘a judgment on

the merits . . . by looking at the substance of the pleadings and any judicially noted facts.’”

Murphy v. Dep’t of Air Force, 326 F.R.D. 47, 49 (D.D.C. 2018) (quoting All. of Artists &

Recording Cos., Inc. v. Gen. Motors Co., 162 F. Supp. 3d 8, 16 (D.D.C. 2016) (internal quotation

marks and citation omitted)). As with a motion under Rule 12(b), “[t]he court construes the

complaint in the light most favorable to the non-moving party and accepts as true all factual

inferences drawn from well-pleaded factual allegations.” Kambala v. Checchi & Co. Consulting,

Inc., 280 F. Supp. 3d 131, 136 (D.D.C. 2017). Unlike a motion under Rule 12(b), in a motion

under Rule 12(c) the “movant must demonstrate that the law entitles him to win given the

undisputed facts that have been alleged in both parties’ pleadings” and that “no material fact is in

dispute.” Murphy, 326 F.R.D. at 49; see also Tapp v. Washington Metro. Area Transit Auth.,

306 F. Supp. 3d 383, 391 (D.D.C. 2016). As noted by the court in Murphy, “the Rule 12(c)

burden is substantial.” 326 F.R.D. at 49.

2 Plaintiff claims that the initial decision to withdraw his interim security clearance, issued in March 2017, was improper because he was not given the right to challenge the decision under the applicable regulation. Compl. ¶ 31. Sometime in the fall of 2018, Plaintiff alleges that FAS notified him of its intent to revoke his clearance and afforded him the appropriate administrative remedies, which he is currently using to appeal the decision. Id.

4 IV. ANALYSIS

The parties agree that Egan prohibits the Court from evaluating the merits of a security

clearance determination. The issue before the Court is whether Egan and its progeny preclude

review of all, or any, of Plaintiff’s claims. Accordingly, the Court begins by reviewing Egan and

the D.C. Circuit decisions interpreting and applying its holding.

In Egan, the Supreme Court considered whether the Merit Systems Protection Board, an

independent agency charged with adjudicating conflicts between federal workers and their

employing agencies, had the authority to “review the substance of an underlying decision to deny

or revoke a security clearance in the course of reviewing an adverse action.” 484 U.S. at 520.

The Court described the decision of whether or not to grant a security clearance as “an attempt to

predict [an individual’s] possible future behavior and to assess whether, under compulsion of

circumstances or for other reasons, [the individual] might compromise sensitive information.”

Id. at 528. The Court found that “the protection of classified information must be committed to

the broad discretion of the agency responsible” and that “it is not reasonably possible for an

outside nonexpert body to review the substance of such a judgment and to decide whether the

agency should have been able to make the necessary affirmative prediction with confidence.” Id.

at 529. The Court stated that the ordinary administrative law presumption in favor of appellate

review “runs aground when it encounters concerns of national security . . . where the grant of

security clearance to a particular employee, a sensitive and inherently discretionary judgment

call, is committed by law to the appropriate agency of the Executive Branch.” Id. at 526–27. 3

3 The Court noted the matters that the Merit Systems Protection Board does have jurisdiction to review. When an employee is removed for cause after a required security clearance is denied, the Merits Systems Protection Board “may determine whether such cause existed, whether in fact clearance was denied, and whether transfer to a nonsensitive position was feasible.” Id. at 530.

5 The D.C. Circuit extended this reasoning in Ryan v. Reno, where the court held “that

under Egan an adverse employment action based on denial or revocation of a security clearance

is not actionable under Title VII.” 168 F.3d 520, 524 (D.C. Cir. 1999). The court reasoned that

it could not apply the required McDonnell Douglas burden shift analysis because the plaintiff

“could not challenge the proffered reason’s authenticity without also challenging its validity.”

Id. at 523–24 (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). After a plaintiff

establishes a prima facie case of discrimination, McDonnell Douglas shifts the burden to the

employer to articulate a nondiscriminatory reason for the adverse employment action. Id. If the

nondiscriminatory reason articulated is the revocation or denial of a security clearance, a court

cannot evaluate the proffered reason “without running smack up against Egan.” Id. at 524.

In Rattigan v. Holder, the D.C. Circuit carved out space for some Title VII claims to

survive Egan. 689 F.3d 764 (D.C. Cir. 2012). The court stated

[W]e do not believe that Egan insulates from Title VII all decisions that might bear on an employee’s eligibility to access classified information. Rather, the Court in Egan emphasized that the decision to grant or deny security clearance requires “[p]redictive judgment” that “must be made by those with the necessary expertise in protecting classified information.”

Rattigan, 689 F.3d at 767 (D.C. Cir. 2012) (quoting Egan, 484 U.S. at 529). The court held “that

Egan’s bar on judicial review extends only to security clearance-related decisions made by the

Security Division itself and not to decisions by other [employees] to report their concerns to the

Division.” Id. The court made clear, though, that a “Title VII claim may proceed only if [the

plaintiff] can show that agency employees acted with a retaliatory or discriminatory motive in

reporting or referring information that they knew to be false.” Id. at 771. Thus, Title VII claims

alleging that employees outside the Security Division made knowingly false referrals about a

plaintiff to the Security Division survive Egan. The court explained that this carve out is

6 necessary because if “all reporting-based claims [are] nonjusticiable, federal employees could no

longer seek redress for the harm caused when a coworker fabricates security concerns in

retaliation for statutorily protected activity, and Congress’s purpose in enacting Title VII would

be frustrated.” Id.

Here, the parties disagree about whether the allegations raised in the Complaint require

evaluation of a security clearance decision. According to Defendant, “all of the adverse

employment actions that Plaintiff identifies as grounds for his allegations of discrimination,

retaliation, and harassment flow directly from the revocation of Plaintiff’s security clearance.”

Def.’s Mem. at 9. Plaintiff claims he does not seek review of the decision to withdraw his

security clearance. Pl.’s Opp’n at 1, ECF No. 15. Instead, he argues his Title VII claims stem

from Defendant’s refusal to allow Plaintiff to maintain his position with restrictions on his access

to secure information, the refusal to transfer Plaintiff to a nonsensitive position, and the failure to

follow internal regulations concerning the withdrawal of his clearance. Id. at 1–2. Plaintiff also

argues that Egan does not bar review of his claims that predate the withdrawal of his clearance,

id. at 7, and his claims related to the personnel misconduct investigation, which he states do not

relate to his security clearance at all, id. at 7–8. Plaintiff also points to disputed issues of fact

that include whether his position actually required access to classified information, whether

Defendant followed internal regulations for withdrawal of his clearance, and whether there was a

factual basis for the personnel misconduct investigation. Id. at 2–3.

The Court cannot determine at this stage—based only on the pleadings and information

of which the Court takes judicial notice—whether adjudicating Plaintiff’s claims will necessarily

require evaluation of the security clearance decision. Indeed, it appears evidence could exist

showing a knowingly false referral to the Security Division. Plaintiff’s report to the OIG about

7 Mr. Quick, the alleged gossip campaign, and the personnel misconduct investigation all predate,

but correspond closely in time with, the withdrawal of Plaintiff’s security clearance. See Compl.

¶¶ 21–24. The letter notifying Plaintiff of the withdrawal of his interim security clearance

actually references the same subject matter as the misconduct investigation. See Def.’s Mem.

Ex. A at 68 (noting withdrawal of clearance “pending additional information regarding the

alleged conflict of interest, misuse of Government Information System, financial consideration,

and personal conduct.”). Through discovery, it is conceivable that Plaintiff could show that

other employees made knowingly false statements about him to the Security Division, which

would preserve his claim. See Rattigan, 689 F.3d at 773 (“[G]iven that the record contains some

evidence that could form the basis for a claim of knowingly false security reports, we shall

remand for the district court, after permitting any necessary discovery, to determine . . . whether”

the claim can survive.) (emphasis added); see also Ames v. Johnson, 121 F. Supp. 3d 126, 133

(D.D.C. 2015) (“With the benefit of discovery, and on a motion for summary judgment, the facts

may crystallize and enable the court to reevaluate [] whether Egan precludes judicial review of

Plaintiff’s claim.”). 4

Furthermore, that Court agrees that many issues raised by Plaintiff appear to have little to

do with the substance of the security clearance decision. For example, Plaintiff’s Complaint

broadly alleges that similarly situated employees outside his protected class have received more

favorable treatment “in terms of disciplinary, proposed disciplinary and security related

administrative actions.” Compl. ¶ 35. In his opposition brief, Plaintiff builds on this, stating that

4 The court in Johnson noted that, while “an open question in our Circuit, the Third Circuit has held that Egan does not necessarily preclude review of a discrimination claim based on mixed-motive theory.” 121 F. Supp. 3d at 133 n.5 (citing Makky v. Chertoff, 541 F.3d 205, 213 (3d Cir. 2008). Whether such a claim could be developed in this case remains to be seen.

8 white or non-African-American employees in managerial positions have had their security

clearances revoked and have not been placed on administrative leave or suspended. 5 Pl.’s Opp’n

at 4. Evaluation of this claim does not require evaluating the merits of a security clearance

decision. Likewise, the claims revolving around the personnel misconduct investigation, which

FAS initiated prior to withdrawal of the security clearance, do not require delving into the

substance of the security clearance decision. 6 See Pl.’s Opp’n Ex. 3, ECF No. 15-4 (disclosing

personnel misconduct investigation to Security Division and noting Plaintiff “currently holds an

Interim Secret clearance.”). Plaintiff also claims that FAS failed to follow internal regulations

after the initial withdrawal of his security clearance that would have allowed him an opportunity

to challenge the decision. Compl. ¶ 31. Deciding whether the regulations were followed does

not require the Court to analyze the substance of the security clearance decision. 7

5 Defendant states “Plaintiff seeks information supporting his theory that Caucasian employees were placed into positions after security clearances were withdrawn or revoked, thereby multiplying the Egan problem while Plaintiff attempts to establish sufficient similarity.” Def.’s Reply at 4, ECF No. 20. The Court does not follow this argument. Plaintiff could establish similarity by demonstrating that a non-African-American employee was in a managerial position and had her security clearance withdrawn or revoked; evaluating what happened to that employee subsequent to the revocation (e.g., transfer to a nonsensitive position or modification of job duties) does not require review of the underlying security clearance decision. Such a decision to keep an employee after her security clearance has been revoked is not a “security clearance-related decision[] made by the Security Division itself.” Rattigan, 689 F.3d at 767. 6 Defendant argues that to the extent Plaintiff’s claims might survive Egan, they are not properly pled. See Def.’s Reply at 4–6. The Court disagrees. Defendant does not acknowledge that the personnel misconduct investigation began prior to the withdrawal of the security clearance and focuses instead on Plaintiff’s claims alleging a hostile work environment. Id. But even on those grounds, given the facts pled and construing the Complaint in the light most favorable to the Plaintiff, the Court finds that Plaintiff has alleged sufficient facts to support the claims that predate the withdrawal of the security clearance. 7 Plaintiff points to decisions from the Federal Circuit that read Egan as allowing a court to review “whether a security clearance was denied, whether the security clearance was a requirement of the appellant’s position, and whether the procedures set forth in [the applicable statute] were followed.” Pl.’s Opp’n at 9 n.2 (quoting Romero v. Dep’t of Defense, 527 F.3d

9 All that being said, if after discovery Plaintiff fails to establish a case beyond challenging

the security clearance decision, or fails to show that any employees made knowingly false

referrals to the Security Division about him, or that similarly situated employees not of his

protected class who also lost security clearances were treated more favorably than he was, the

Court will not hesitate to enter judgment for Defendant pursuant to Egan. Claims asking the

Court to review the substance of the security clearance decision or suggesting that the

withdrawal of clearance was pretextual will not be entertained. However, at this early stage, the

Court will not foreclose relief to a potentially meritorious claim without seeing the whole

picture. See Rattigan, 689 F.3d at 772–73; Johnson, 121 F. Supp. 3d at 133; Greenhouse v.

Geren, No. 07-cv-182, 2009 WL 10692664, at *3 (D.D.C. July 27, 2009) (“Although defendants

may ultimately prevail in their argument that Egan and Ryan bar plaintiff’s claim . . . the Court

concludes that dismissal would be inappropriate without an opportunity for some discovery.”).

V. CONCLUSION

For the foregoing reasons, Defendant’s Motion for Judgment on the Pleadings is

DENIED. An order consistent with this Memorandum Opinion is separately and

contemporaneously issued.

Dated: June 24, 2020 RUDOLPH CONTRERAS United States District Judge

1324, 1328 (Fed. Cir. 2008)). While not binding precedent in this Circuit, the Court appreciates that these issues would not require an analysis of the substance of the security clearance decision.