No Bivens Remedy For Claims of Incorrect OIG Reports

In 2009, the Department of Labor hired Stewart Liff and his consulting firm to provide three management assessment reports.

DOL employees subsequently complained about one of those reports, prompting the DOL Office of Inspector General to open an investigation into Liff’s contract.

In July 2011, DOL OIG issued a report which concluded that DOL had improperly hired Liff under pressure from an Assistant Secretary. The OIG report was soon thereafter posted on the internet and reported on in the Washington Post.

According to Liff, the report and related publicity included “blatant misstatements and false characterizations,” including about Liff’s relationship with the Assistant Secretary, Liff’s timekeeping practices, and other matters “suggesting that Liff had engaged in illicit, unethical activities.”

Around that same time, Liff learned that the Office of Personnel Management OIG had initiated an investigation into how Liff’s services as a subcontractor to OPM had been arranged. Then, in April 2013, OPM OIG issued a report which, according to Liff, “posited, without adequate support, that Liff’s services may have been ‘wasteful’ of taxpayer resources.” On multiple occasions in the following weeks, OPM publicly disclaimed any future use of Liff’s services.

DOL OIG’s and OPM’s actions, Liff alleges, have “broadly precluded” him from securing contracting work in the federal sector. Liff thus filed a Bivens action in D.C. District Court against DOL OIG and OPM alleging violation of his constitutional due process right by issuing erroneous reports that damaged his reputation and cost him business.

The District Court denied the defendants’ motion to dismiss, and they filed an interlocutory appeal on that denial to the U.S. Court of Appeals for the District of Columbia.

The D.C. Circuit began its analysis citing U.S. Supreme Court precedent that, in considering the availability of a Bivens remedy, the courts must first look for “an alternative, existing process capable of protecting the constitutional interests at stake.” That “alternative, existing process” does not need to potentially provide a party with “full relief” to preclude a Bivens claim. For example, using a Supreme Court precendent, the D.C. Circuit has previously held Bivens claims are precluded by the Civil Service Reform Act, Title VII of the Civil Rights Act of 1964, the Freedom of Information Act, the Veterans’ Judicial Review Act, and the Privacy Act.

In the case at bar, the appeals court held that remedies for Liff’s contract-related disputes could be found in “myriad statutes and regulations” such as the Tucker Act, the Contract Disputes Act, and the Federal Acquisition Regulation. The court expressly held it was not concerned with “the specific applicability” of these remedies to Liff’s circumstances, but rather to “the spectrum of remedies they provide.” Assuming Liff’s allegations of lost business as true, the court held, the aforementioned statutes and regulations provided him recourse with respect to those losses.

As to Liff’s alleged “reputational damage from the reports of which he complains has impeded his career in private contracting,” the court held the Privacy Act precluded a Bivens remedy. While the Privacy Act primarily regards “systems of records,” the D.C. Circuit has previously held that it offers relief for some claims based on the government’s information that is not within a system of records. Relying on that precedent, the court held the Privacy Act “encompasses misstatements contained in a disparaging Inspector General’s report and associated agency document.” Accordingly, the court held, “[t]he Privacy Act represents Congress’s legislative judgment about the appropriate remedies with respect to the accuracy, fairness, and use of government information, and the judicial system is not in a position to revise that scheme by recognizing an additional constitutional remedy for that kind of claim”

The D.C. Circuit thus held the Privacy Act precludes a Bivens remedy in Liff’s case, and the court reversed the District Court’s denial of the defendants’ motion to dismiss. 

Read the full text of Liff v. DOL OIG

This case law update was written by Michael J. Sgarlat, Associate Attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.






Posted in Case Law Update

Tags: Bivens


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