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Sudnick v. Dep't of Defense

February 8, 2007


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff Daniel Sudnick, a former Senior Advisor to the Iraqi Ministry of Communications under the Coalition Provisional Authority ("CPA"), has sued the Department of Defense ("DoD") and Dr. John A. Shaw, a former Deputy Undersecretary of Defense and DoD Deputy Inspector General. Plaintiff asserts a variety of constitutional, statutory, and common law claims relating to Shaw's disclosure to the media and to persons within and outside the government of information falsely suggesting that plaintiff was offered or received bribes during his tenure with the Ministry of Communications and that plaintiff is currently under active criminal investigation in connection with these bribery allegations. Before the Court is Shaw's motion to dismiss plaintiff's amended complaint. For the reasons set forth below, the Court will grant the motion as to plaintiff's constitutional claims, but deny it as to his common law claims.


In July 2003, plaintiff was appointed by the DoD to a limited-term position as Senior Advisor to the Iraqi Ministry of Communications in Baghdad, Iraq. (Am. Compl. ¶ 7.) While in that position, plaintiff participated in the selection process for the award of three licenses for the commercial operation of cellular telephone networks in Iraq, serving as a member of the committee that evaluated bids and made recommendations to then-CPA Administrator L. Paul Bremer regarding the licenses. (Id. ¶¶ 6, 8.) Plaintiff also played a role with respect to the structuring of a contemplated First Responder Network ("FRN") telecommunications system in Iraq. (See, e.g., id. ¶¶ 16, 16F, 16G.)

After the evaluation committee had made its recommendations, but before any licenses were awarded, Shaw learned, using his DoD position, that Liberty Mobile ("Liberty"), a bidder for a license that included private sector friends and acquaintances of Shaw, had not been recommended for a license. (Id. ¶¶ 11, 12.) According to plaintiff, Shaw then commenced an "illegal scheme" to discredit the selection decision so that Liberty would again have an opportunity to compete for a license, including creating and releasing to the media false reports that various CPA officials involved in the selection process had asked for or received bribes. (Id. ¶¶ 13-15.) Shaw also engaged in misconduct with respect to the FRN, attempting, through a course of conduct directed at plaintiff between November 2003 and April 2004, to improperly expand the scope of the FRN project to give his private sector friends and acquaintances affiliated with Liberty and other companies an opportunity to build a fourth Iraq-wide cell phone network. (Id. ¶ 16.)

At some point, plaintiff reported Shaw's misconduct to CPA Administrator Bremer and to the DoD Inspector General (id. ¶ 17), after which time the CPA received demands from the Office of the Secretary of Defense, where Shaw held his position as Deputy Undersecretary of Defense, that plaintiff's resignation be compelled. (Id. ¶ 18). A CPA official then demanded plaintiff's resignation, threatening that if plaintiff did not resign, he would be fired. (Id.) Plaintiff resigned on March 31, 2004. (Id. ¶ 19.)

After learning of plaintiff's allegations of misconduct against him, Shaw sought to discredit plaintiff (and thereby to assist his private sector friends in obtaining an Iraqi mobile phone license) by disclosing to the media false information suggesting that plaintiff had been offered or had received bribes while serving as Senior Advisor to the Ministry of Communications.*fn2 (Id. ¶¶ 21, 23.) These disclosures, which plaintiff contends violated the Privacy Act, resulted in news reports indicating that plaintiff had received bribes in connection with the Iraq cellular phone network licensing process. (Id. ¶ 24.) Plaintiff claims that, as a consequence of these news reports, he has been unable to find employment of the type he enjoyed prior to Shaw's disclosures, i.e., in senior management with a government agency or private sector firm engaged in government contracting. (Id. ¶¶ 32; Pl.'s Mem. in Opp'n to Def. Shaw's Mot. to Dismiss the Am. Compl. ["Pl.'s Mem."] at 8-9.) Plaintiff has been informed by prospective employers in both the private and public sectors that those entities are no longer interested in pursuing present or future financial or employment opportunities with plaintiff because of the media reports regarding the bribes. (Am. Compl. ¶ 32.) Moreover, although the DoD apparently has cleared plaintiff of the allegations of misconduct (id. ¶ 33), DoD has declined to re-hire him in an appropriately senior-level position and has stated that the allegations appearing in the press are the reason why it cannot do so. (Id. ¶ 34.) Shaw's employment with DoD was terminated in December 2004. (Id. ¶ 39.)

Plaintiff filed his original complaint in April 2006, alleging that Shaw's disclosures violated the Privacy Act and seeking damages and equitable relief against the DoD, and asserting claims against Shaw in his individual capacity for defamation, invasion of privacy/false light, and intentional and negligent infliction of emotional distress. (Compl. ¶¶ 41-73 & Prayer for Relief.) The DoD answered the complaint, and Shaw moved to dismiss on the grounds that the claims against him were time-barred and that he was immune under the Federal Employees Liability Reform and Tort Compensation Act of 1988, commonly known as the Westfall Act, 28 U.S.C. § 2679. In August 2006, the United States moved to substitute itself for Shaw under the Westfall Act and to dismiss the claims against him for lack of jurisdiction based on plaintiff's failure to exhaust his administrative remedies under the Federal Tort Claims Act ("FTCA"). In support of its motion, the United States submitted the certification of the Attorney General's designee that Shaw "was acting within the scope of his employment as an employee of the United States at the time of the incidents that occurred during his term of employment at the Department of Defense from August 2001 until December 2004." (Certification of Phyllis J. Pyles.) Plaintiff did not oppose the government's motion but requested leave to file an amended complaint to assert additional claims against Shaw. The Court granted the motion of the government and dismissed plaintiff's tort claims without prejudice.

In October 2006, plaintiff filed an amended complaint which reasserts the same Privacy Act claims against the DoD, but raises new claims against Shaw in his individual capacity. In particular, plaintiff alleges that Shaw violated his Fifth Amendment due process rights by publicly stigmatizing him through a campaign of false representations, without notice or any opportunity to be heard and without any avenue for appeal, effectively depriving plaintiff of the ability to work in his chosen field. (Am. Compl. ¶¶ 53-57.) The amended complaint also asserts new defamation and invasion of privacy/false light claims against Shaw based on the allegation that on or about June 15, 2006, more than a year after Shaw left the DoD, he "falsely and maliciously represent[ed] to a Washington Legal Times reporter . . . that [plaintiff] was under active criminal investigation by U.S. Government criminal investigative authorities for the allegations made by Shaw against [plaintiff]." (Id. ¶¶ 40A, 65-74.)*fn3 Shaw has again moved to dismiss the claims against him.


I. Standard of Review

Shaw moves to dismiss the amended complaint for lack of subject matter jurisdiction and for failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Under Rule 12(b)(6), dismissal is appropriate only where a defendant has "show[n] 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" In re Swine Flu Immunization Prod. Liab. Litig., 880 F.2d 1439, 1442 (D.C. Cir. 1989) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The allegations in plaintiff's complaint are presumed true, and all reasonable factual inferences are construed in the plaintiff's favor. See Maljack Prods., Inc. v. Motion Picture Ass'n of Am., Inc., 52 F.3d 373, 375 (D.C. Cir. 1995). Likewise, on a motion to dismiss for lack of subject matter jurisdiction, the Court must accept all of the factual allegations in the complaint as true. Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). Where necessary, the Court may also consider material outside of the pleadings. Id.

II. The Westfall Act

Shaw first argues that both plaintiff's constitutional claims and his common law tort claims are barred by the Westfall Act and should therefore be dismissed for lack of subject matter jurisdiction. The Westfall Act "accords federal employees absolute immunity from common-law tort claims arising out of acts they undertake in the course of their official duties." Osborn v. Haley, __ S.Ct. __, 2007 WL 135830, at *4 (Jan. 22, 2007). The Act permits the Attorney General to certify that a federal employee against whom a tort claim has been asserted "was acting within the scope of his office or employment at the time of the incident out of which the claim arose." 28 U.S.C. ยง 2679(d)(1). Upon such certification, the action "shall be deemed an action against the United States under the provisions ...

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