156 F. Supp. 3d 1
D.D.C.2016Background
- Stewart Liff, a former federal HR executive and government consultant, performed subcontracted consulting for DOL-VETS and OPM from 2009–2011; an outstanding OPM task order (~$176,799 to Liff) was terminated in Aug. 2011.
- DOL-OIG completed an investigation in July 2011 concluding procurement improprieties around Assistant Secretary Ray Jefferson’s hiring of Liff; the report contained third-party allegations implying wasteful or unethical billing and poor value.
- DOL and DOL-OIG held a press conference and issued a cover memorandum; DOL’s Deputy Secretary later urged pursuing causes of action (including False Claims Act claims) against Liff.
- OPM’s IG opened a related probe; OPM’s director publicly said OPM would not use Liff again and OPM issued a memorandum indicating it had concluded business with him.
- Liff alleges these public reports and agency statements caused severe revenue loss (97% decline 2011–2013), rescinded speaking/teaching invitations, loss of teaming partners, and effectively de facto debarred him from government contracting.
- Plaintiffs sued DOL, DOL-OIG, OPM and officials asserting (1) Fifth Amendment procedural due process (Count I), (2) Bivens damages against individual officials (Count II), and (3) APA review (Count III). Court largely denied dismissal and allowed discovery; it dismissed some claims against unnamed investigators and dismissed the APA count as duplicative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural due process (Count I): did agencies deprive Liff of liberty without notice/hearing? | Liff: reports and public statements tarnished reputation and produced a tangible status change (de facto debarment/broad preclusion from contracting) requiring notice and hearing. | Agencies: claim this is mere defamation (FTCA governs and bars suit for libel/slander) or fails to state a protected liberty interest. | Court: claim plausibly alleges stigma-plus effect (honesty/integrity cast into doubt + tangible change in contracting status) so Count I survives against agencies. FTCA defense rejected at pleadings stage. |
| FTCA jurisdiction / Defamation character | Liff: claims go beyond defamation because they seek injunctive relief and allege de facto debarment and loss of future opportunities. | Agencies: argue claim is essentially defamation and thus excluded by FTCA §2680(h) and plaintiffs failed to exhaust administrative remedies. | Court: FTCA bar inapplicable at motion-to-dismiss stage because Plaintiffs alleged consequences beyond classic defamation (de facto debarment, injunctive relief). |
| Bivens damages (Count II): are individual officials personally liable? | Liff: senior officials’ public statements and actions caused de facto debarment and violated due process; seeks damages under Bivens. | Officials: assert statute of limitations, that Bivens remedy is unavailable for reputational harm, and qualified immunity. | Court: Bivens claim may proceed against named senior officials (Berry, Harris, Petrole) but NOT against two unnamed DOL‑OIG agents; statute-of-limitations and Bivens-remedy questions premature; qualified immunity denied as to named officials at this stage. |
| APA (Count III): do agency reports/termination constitute reviewable final agency action (and is APA claim distinct)? | Liff: DOL-OIG report, DOL memorandum, and OPM termination are final agency actions, arbitrary and capricious, causing de facto debarment and deprivation of property (subcontract). | Agencies: APA relief is unavailable where another adequate remedy exists; Count I already addresses due‑process; APA is duplicative and §704 limits review to final agency action. | Court: APA count dismissed as duplicative of Fifth Amendment claim; remedies sought under APA overlap with Count I and APA would not add relief. |
Key Cases Cited
- Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971) (recognized implied damages remedy against federal officers for constitutional violations)
- Paul v. Davis, 424 U.S. 693 (1976) (governmental defamation alone does not implicate the Due Process Clause absent more tangible interests)
- Kartseva v. Dep’t of State, 37 F.3d 1524 (D.C. Cir. 1994) (articulates ‘‘formal disqualification’’ and ‘‘broad preclusion’’ tests for stigma-plus due-process claims)
- Old Dominion Dairy Prods., Inc. v. Sec’y of Def., 631 F.2d 953 (D.C. Cir. 1980) (governmental responsibility determinations and communications can effect de facto debarment and implicate due process)
- Trifax Corp. v. District of Columbia, 314 F.3d 641 (D.C. Cir. 2003) (stigma-plus analysis requires showing government action seriously affected ability to obtain employment/contracts)
- Doe v. U.S. Dep’t of Justice, 753 F.2d 1092 (D.C. Cir. 1985) (discusses borrowing state statutes of limitations for Bivens claims)
- Owens v. Okure, 488 U.S. 235 (1989) (when borrowing statutes of limitations for civil rights claims, courts should use the general/residual personal injury period)
- Siegert v. Gilley, 500 U.S. 226 (1991) (distinguishes reputational injury and clarifies limits of constitutional stigma claims)
- Pearson v. Callahan, 555 U.S. 223 (2009) (qualified-immunity two‑step analysis)
- Harlow v. Fitzgerald, 457 U.S. 800 (1982) (objective qualified-immunity standard)
- Wilson v. Layne, 526 U.S. 603 (1999) (qualified immunity analysis looks to controlling authority at the time of the incident)
- Meshal v. Higgenbotham, 804 F.3d 417 (D.C. Cir. 2015) (counsels caution in implying new Bivens remedies)