BORON OIL COMPANY V. DOWNIE, 873 F.2D 67 (4TH CIR. 1989)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92M00732R001000080057-7
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: April 28, 2014
• Sequence Number: 57
• Publication Date: July 6, 1989
• Content Type: MEMO

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LEVEL 1 - 1 OF 1 CASE
BORON OIL COMPANY; VITO CUTRONE, SR.; FONDA CUTRONE;
SHARON LEWIS, Plaintiffs - Appellees, v. JACK L. DOWNIE, in
his official capacity as an employee of the United States
Environmental Protection Agency, Defendant - Appellant
No. 88-3938
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
873 F.2d 67; 1989 U.S. App. LEXIS 5487
Argued: January 11, 1969
April 24, 1989, Decided
APPEAL-STATEMENT:
C*13
Appeal from the United States District Court for the Northern District of
West Virginia, at Wheeling. William M. Kidd, District Judge. No. CA-87-73-W(K).
COUNSEL:
Martin William Matzen (Roger J. Marzulla, Assistant Attorney General, Anne S.
Almy, Daniel S. Goodman, UNITED STATES DEPARTMENT OF JUSTICE, Land & Natural
Resources Division; William A. Kolibash, United States Attorney; Donnell
Nantkes, Office of General Counsel, Philip Yeany, Assistant Regional Counsel,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, on brief) for Appellant.
James F. Companion (Yolanda G. Lambert, SCHRADER, STAMP, BYRD, BYRUM &
COMPANION; W. Dean DeLaMater, DELAMATER, HAGG & BOHACH, on brief) for Appellees.
OPINIONBY: CHAPMAN
OPINION:
Before SPROUSE and CHAPMAN, Circuit Judges, and MOTZ, United States District
Judge for the District of Maryland, sitting by designation.
CHAPMAN, Circuit Judge:
In the matter before the Court, the plaintiffs seek to compel an employee of
the Environmental Protection Agency ("EPA"), Jack L. Downie ("Downie"), to
testify in a state court civil action, contrary to specific instructions of his
agency superiors, concerning information acquired during the course of his
official duties. We hold that the state C*2] court, and the federal district
court on removal, lacked jurisdiction to compel the defendant to appear and
testify in a state court action to which the government is not a party. Thus, we
reverse the order of the district court.
The present dispute arose when, on August 17, 1987, and August 21, 1987,
Downie was served with trial subpoenaes to testify in a tort action pending in
the Circuit Court of Brooke County, West Virginia. Vito Cutrone, Sr. et al. V.
Boron Oil Company, Civil Action No. 83-C-149-Br. Downie was subpoenaed by
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873 F.2d 67; 1989 U.S. App. LEXIS 5487
both parties to testify about his investigation, as an EPA On-Scene Coordinator,
of an alleged gasoline leak at a Boron Oil Company service station.
Although Downie initially consented to provide trial testimony subject to
approval by his superiors and the EPA had cooperated in similar proceedings
prior to this incident, one day before Downie's scheduled trial appearance in
state court the Acting Regional Counsel for EPA Region 3 concluded that Downie's
testimony "would not clearly be in the interest of the EPA." The EPA issued a
written determination that Downie not be permitted to testify.
The Circuit Court of Brooke County denied EPA's motion to E*33 quash the
two trial subpoenaes and directed Downie to testify. The EPA promptly removed
the subpoena proceedings (but not the underlying civil action) to the United
States District Court for the Northern District of West Virginia pursuant to 28
U.S.C. S 1442(a). The district court held a hearing to ascertain the nature of
Downie's employment, his involvement in the underlying tort action, and the
extent to which his appearance as a witness would interfere with his official
duties.
The district court held that removal was proper, pursuant to North Carolina
v. Carr, 386 F.2d 129 (4th Cir. 1967), and that its jurisdiction on removal
included authority to review the EPA's decision to prohibit Downie from
testifying. The district court made factual findings that none of the
information sought from Downie is alleged to be privileged, that Downie's
testimony is essential to the fair administration of justice in the civil
action, that Downie is the most knowledgeable person available to give an
unbiased, impartial account of the events giving rise to the tort action, and
that the interference and inconvenience to Downie and the EPA resulting from his
giving testimony would be minimal at C*41 best. The court also noted that
prior to the present action it had been the EPA's policy to cooperate fully with
private citizens regarding matters of this nature, that Downie had voluntarily
consented to provide trial testimony subject only to approval by his superior,
that there were no written reports prepared in connection with Downie's
Investigation of the alleged gas leak, and that the cost and expenses to Downie
and the EPA resulting from Downie's trial testimony would be borne by the
parties seeking his testimony.
In reaching its conclusion, the district court looked to the following
"housekeeping" statute which provides the Congressional mandate to be followed
by all departments seeking to invoke and apply regulations promulgated
thereunder:
The head of an Executive department or military department may prescribe
regulations for the government of his department, the conduct of its employees,
the distribution and performance of its business, and the custody, use, and
preservation of its records, papers, and property. This section does not
authorize withholding information from the public or limiting the availability
of records to the public.
5 U.S.C. S 301.
The EPA relied C*53 upon EPA Regulations promulgated at 40 C.F.R. S
2.401(c), Subpart C (1986), in denying Downie permission to testify. The
regulations instruct:
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873 F.2d 67; 1989 U.S. App. LEXIS 5487
The purpose of this subpart is to ensure that employees' official time is used
only for official purposes, to maintain the impartiality of EPA among private
litigants, to ensure that public funds are not used for private purposes and to
establish procedures for approving testimony or production of documents when
clearly in the interests of EPA.
"[A]lthough 301 does permit centralization of responsibility in a department
head to claim a privilege," the district court concluded, "it clearly does not
confer a privilege to withhold information from the public."
The district court similarly rejected the defense of sovereign immunity,
holding that neither the United States nor the EPA were named parties, thus,
"there is no relief sought or sued against the sovereign in this case."
The district court ordered Downie to give testimony in the state court and
required that the timing of his appearance make accommodation for his work
schedule and that the appellees, the private litigants in the underlying civil
action, bear the cost of his appearance. E*6]
The EPA seeks to quash the subpoenaes on the ground that it is not subject to
a subpoena issued by a state or local court, with respect to actions to which it
is not a party, in the absence of a waiver of sovereign immunity. The EPA also
argues that the subpoenaes must be quashed because they do not comply with the
internal EPA regulations concerning state court subpoenaes, authorized by 5
U.S.C. 6 301 and codified at 40 C.F.R. 6 2.401(c).
A.
It is well established that an action seeking specific relief against a
federal official, acting within the scope of his delegated authority, is an
action against the United States, subject to governmental privilege of immunity.
Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 688 (1949); 3A
Moore's Federal Practice para. 19.15. Downie's refusal to testify was at the
behest of his EPA superior, the Acting Regional Counsel for Region 3. The EPA
decision was made pursuant to regulations set forth at 40 C.F.R. 6 2.401. These
regulations provide, inter alia, that an employee of the EPA may testify in
response to a subpoena only to the extent expressly authorized by the agency.
The Supreme Court has specifically recognized E*73 the authority of agency
heads to restrict testimony of their subordinates by this type of regulation.
United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). In Touhy, the Supreme
Court ruled that a subordinate official of the Justice Department could not be
held in contempt for refusing, in a habeas corpus proceeding by a state
prisoner, to obey a subpoena duces tecum when his compliance had been prohibited
by an order of a superior department official acting pursuant to valid federal
regulations governing the release of official documents. As in the case sub
judice, the government was not a party to the underlying action. The regulations
in Touhy were promulgated under the statutory predecessor of the current
"housekeeping" statute, 5 U.S.C. S 301.
Touhy is part of an unbroken line of authority which directly supports
Downie's contention that a federal employee may not be compelled to obey a
subpoena contrary to his federal employer's instructions under valid agency
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873 F.2d 67; 1989 U.S. App. LEXIS 5487
regulations. The district court clearly departed from this line of cases. In
Swett v. Schenk, 792 F.2d 1447, 1451-52 (9th Cir. 1986), the court affirmed the
trial court's dismissal of a state E*83 court's contempt proceeding against a
National Transportation Safety Board's investigator who had, pursuant to valid
NTSB regulations, submitted to deposition but declined to testify about other
matters. The government, as in the case at bar, was not a party to the
underlying action, and the litigant sought the investigator's testimony for his
expert knowledge rather than for a recitation of agency records. See also
Reynolds Metals Co. v. Crowther, 572 F. Supp. 288, 290-91 (D. Mass. 1982)
(federal district court dismissed contempt proceeding which would have compelled
OSHA investigators to testify in private civil action in state court contrary to
agency's instructions under valid agency regulations); Smith v. C. R. C.
Builders Co., Inc., 626 F. Supp. 12, 14 (D..Colo. 1983) (in a case removed to
the federal court to hear contempt proceedings, the district court held that an
OSHA official could not be compelled to disobey a direct order from an agency
superior not to disclose certain information in a state wrongful death action,
nor be punished for his adherence to the mandate of valid department
regulations).
The policy behind such prohibitions on the testimony of agency employees
[41.9) is to conserve governmental resources where the United States is not a
party to a suit, and to minimize governmental involvement in controversial
matters unrelated to official business. Reynolds Metals, 572 F. Supp. at 290.
Because of the nature of the duties it exercises and programs it administers,
the EPA is particularly vulnerable to the demands of private parties seeking
Information acquired as a result of official investigations concerning incidents
such as that in the case sub judice. If EPA On-Scene Coordinators were routinely
permitted or compelled to testify in private civil actions, significant loss of
manpower hours would predictably result and agency employees would be drawn from
other important agency assignments.
B.
The district court exceeded its jurisdiction upon removal, which it derived
solely from that of the state court, in compelling Downie to testify contrary to
the direction of the EPA. The doctrine of sovereign immunity precludes the state
court -- and the federal court which gained limited jurisdiction upon removal --
from exercising jurisdiction to compel Downie to testify contrary to EPA
instructions, and also denies it the authority to review and [41103 set aside
the EPA's decision and the federal regulations under which it is made.
Significantly, the court in Swett v. Schenk, supra, noted that "the Touhy
doctrine is jurisdictional" and the state court lacked jurisdiction to compel
the investigators to testify, and the federal court itself similarly lacked such
power since it "acquired no jurisdiction on removal." Swett, 792 F.2d at
1451-52.
The jurisdiction of a federal district court upon removal, pursuant to 28
U.S.C. 6 1442, is essentially derivative of that of the state court, and the
federal court acquires none upon removal. Arizona v. Manypenny, 451 U.S. 232,
242 n.17 (1981). The Supreme Court has instructed that "jurisdiction of the
federal court on removal is, in a limited sense, a derivative jurisdiction Where
the state court lacks jurisdiction of the subject matter or of the parties, the
federal court acquires none, although in a like suit originally brought in a
federal court it would have had jurisdiction," Minnesota v. United States, 305
U.S. 382, 389 (1939).
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873 F.2d 67; 1989 U.S. App. LEXIS 5487
The EPA has not waived its immunity, thus the state court (and the federal
court on removal) lacks jurisdiction to proceed against a federal C*113
employee acting pursuant to agency direction. The district court found that the
doctrine of sovereign immunity was inapplicable because the government was not a
party to the underlying action and the subpoenas were directed to Downie
personally and not in his capacity as a federal employee of the EPA.
Even though the government is not a party to the underlying action, the
nature of the subpoena proceeding against a federal employee to compel him to
testify about information obtained in his official capacity is inherently that
of an action against the United States because such a proceeding "interfereCs]
with the public administration" and compels the federal agency to act in a
manner different from that in which the agency would ordinarily choose to
exercise its public function. Dugan v. Rank, 372 U.S. 609, 620 (1963). The
subpoena proceedings fall within the protection of sovereign immunity even
though they are technically against the federal employee and not against the
Sovereign. We have previously instructed that suits against federal employees
may be barred by the doctrine of sovereign immunity where the effect of the suit
falls upon the government:
It is not necessary C*123 that the United States be denominated as a party.
An action against a federal agency or official will be treated as an action
against the sovereign if "the judgment sought would expend itself on the public
treasury or domain, or interfere with the public administration, or if the
effect of the judgment would be to restrain the Government from acting, or
compel it to act."
Portsmouth Redevelopment & Housing Authority v. Pierce, 706 F.2d 471, 473 (4th
Cir. 1983), quoting Dugan v. Rank, 372 U.S. at 620. Clearly, Downie's appearance
at the state court proceeding 15 sought because of the knowledge he acquired in
the course of his official duties.
The doctrine of sovereign immunity has been applied in federal courts in
situations, analogous to the case at bar. See, e.g., Environmental Enterprises,
Inc. v. EPA, 664 F. Supp. 585, 586 (D.D.C. 1987) ("As to sovereign immunity,
there is obvious merit to the argument that federal officers should not be
subpoenaed to testify in state courts proceedings of which they are not parties
without their approval." Thus, where EPA had not waived sovereign immunity,
subpoena to testify in state civil action was quashed.); Reynolds Metals Co.
C*13] v. Crowther, 572 F. Supp. 288, 290-91 (D. Mass. 1982) (federal
official's refusal to testify in response to state court subpoena protected by
privilege of sovereign immunity); United States v. McLeod, 385 F. 2d 734, 752
(5th Cir. 1967) (federal officers could not be subpoenaed to testify before a
state grand jury).
The principle of federal supremacy reinforces the protection of sovereign
immunity in the case at bar. The assertion of state court authority to override
the EPA's Touhy regulations clearly violates the Constitution's Supremacy
Clause. First, Congress has expressly limited Administrative Procedures Act
review to the federal courts, and a state court's assertion of the power of
judicial review over federal agencies directly contravenes 5 U.S.C. E 702.
Second, properly promulgated agency regulations implementing federal statutes
have the force and effect of federal law which state courts are bound to follow.
See Chrysler Corp. v. Brown, 441 U.S. 281, 295-96 (1979). The action of a state
court to compel an official of a federal agency to testify contrary to the
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873 F.2d 67; 1989 U.S. App. LEXIS 5487
agency's duly enacted regulations clearly thwarts the purpose and intended
effect of the federal regulations. E*143 Such action plainly violates both
the spirit and the letter of the Supremacy Clause.
, This Court is aware that the facts of this case suggest that the EPA could,
as the district court ordered, comply with the state court processes without
undermining the immediate purposes for the EPA regulations. The district court
suggests that this leads irresistibly to the conclusion that the EPA's action
was "arbitrary and capricious and unreasonable." This contention ignores,
however, the important fact that the EPA was acting pursuant to duly promulgated
regulations and the concerns which motivated the agency may have extended beyond
the burdens represented by Downie giving testimony in this particular case. The
agency has a valid and compelling interest in keeping its On-Scene Coordinators,
as a class, free to conduct their official business without the distractions of
testifying in private civil actions in which the government has no genuine
interest. Indeed, it is plausible that Downie has not been burdened in the past
by requests to testify in private state court actions because the EPA has
successfully and steadfastly resisted previous attempts to compel its employees
to testify. The current [*157 explosion in environmental litigation must
surely give warning to the EPA that a strict adherence to its internal
regulations is essential if it is to be successful in preventing its expert
employees from being targeted as potential witnesses in private actions.
For the foregoing reasons, the order of the district court is
REVERSED.
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