Appellate Review

Osborn v. Haley

The Federal Tort Claims Act (FTCA), 28 U.S.C.A. §1346 waives the federal government's sovereign immunity in certain circumstances to permit persons to sue it for damages. Plaintiffs who sue federal employees in tort must also contend with the Federal Employees Liability and Tort Compensation Act of 1998, commonly called the Westfall Act, 28 U.S.C.A. §2679, which grants absolute immunity to federal employees for common-law torts. However, this immunity is limited to acts employees undertake in the course of their official duties. The Supreme Court was called upon to interpret several issues involving the Westfall Act in Osborn v. Haley, ___U.S.___, 127 S.Ct. 881, 166 L.Ed.2d 819 (2007).

Pat Osborn worked for a private company that contracted with the U.S. Forest Service to provide staff for a recreation area in Kentucky. While employed by the private company, Osborn applied for a trainee position with the Forest Service. Barry Haley, the Forest Service employee responsible for the hiring process, announced at a meeting that he had hired someone else for job that Osborn wanted. Osborn asked why she had not been informed of the decision before the meeting and Osborn made a joke at Haley's expense. After the meeting Osborn's supervisor told her to apologize to Haley but she refused. A few weeks later Osborn filed a complaint with the U.S. Department of Labor, asking that it investigate the hiring decision. She alleged that the Forest Service had not given her the appropriate veterans' preference points. The Labor Department investigator interviewed Haley and concluded that the process had been conducted correctly and informed Osborn of the decision. That same day Osborn's supervisor again ordered her to apologize to Haley. Osborn refused and two days later she was fired.

Osborn filed a civil lawsuit in a Kentucky state court against Haley, her supervisor, and her employer, alleging that Haley tortiously interfered with her employment relationship and conspired to cause her wrongful discharge. Osborn specifically charged that Haley's action were in retaliation for her filing the Department of Labor complaint. The U.S. Attorney promptly invoked the Westfall Act. He certified on behalf of the Attorney General that Haley was acting within the scope of his employment at the time of the conduct alleged in Osborn's complaint. As is customary in Westfall Act proceedings, the certification did not state reasons for this determination. Having made the certification, Haley was dismissed from the lawsuit, the United States was substituted as the defendant, and the United States removed (transferred) the case to the U.S. District Court for Western Kentucky. The United States then moved to dismiss Osborn's case on the ground that she had not exhausted her administrative remedies under the FTCA.

Osborn challenged the substitution and the motion to dismiss. She contended that Haley's actions were outside the scope of his employment, which negated Westfall Act immunity. The U.S. district court sided with Osborn because the United States had denied there had been any communication between Haley and Osborn's supervisor involving Osborn's dismissal. The judge reasoned that the government had to admit to the event central to the proof of Osborn's claim. Based on this reasoning the court declared the Westfall Act certification invalid and sent the case back to state court. The Sixth Circuit Court of Appeals reversed this decision, concluding that a Westfall Act certification is conclusive for establishing the scope of employment needed for removal to federal court. In addition, a district court must resolve the factual dispute over scope of employment at trial.

The Supreme Court, in a 7-2 decision, upheld the Sixth Circuit. Justice Ruth Bader Ginsburg, writing for the majority, first disposed of two jurisdictional issues. The district court's order rejecting certification and substitution was a reviewable final decision and the appeals court had jurisdiction to review this order. One federal statute forbade appellate review of Westfall Act decisions, yet Ginsburg found that the district court had no authority to send a certified case back to the state court. It made no sense to bar review of an improper decision. Therefore, the Court allowed appellate review in this "extraordinary case in which Congress ordered the intercourt shuttle to travel just one way-from state to federal court."

Turning to the substantive issues, Justice Ginsburg examined whether the U.S. Attorney validly certified that Haley was acting within the scope of his employment at the time of the conduct alleged in the complaint. Two Courts of Appeals had held Westfall Act certification was improper if the government denied the occurrence of the alleged injury-causing action. Several other courts sided with the Sixth Circuit's reasoning. Justice Ginsburg concluded that certification is proper even when the government determines that the action or episode never occurred. The term "scope of employment" encompassed "an employee on duty at the time and place of an 'incident' alleged in a complaint who denies that the incident occurred." To find otherwise would strip a federal employee of immunity "not by what the court finds, but by what the complaint alleges." Justice Ginsburg pointed out the absurdity of thinking Congress would have intended to protect a guilty employee but desert innocent ones.

Finally, Justice Ginsburg stated that the core purpose of the Westfall Act was to relieve employees from "the cost and effort of defending the lawsuit, and to place those burdens on the Government's shoulders." Therefore, immunity issues must be decided at the earliest opportunity.

Justice Antonin Scalia, in a dissenting opinion joined by Justice Clarence Thomas, argued that the statute barring appellate review of Westfall Act certification decisions should have been honored, even if the decision was erroneous.