Beebe v. Washington Metropolitan Area Transit Authority

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 30, 1997 Decided November 28, 1997

No. 95-7293

Richard W. Beebe,

Appellant

v.

Washington Metropolitan Area Transit Authority, et al.,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 94cv01567)

Richard W. Beebe, appearing pro se, argued the cause and

filed the briefs.

Bruce P. Heppen argued the cause for appellees. With

him on the briefs were Carol B. O'Keeffe and Robert J. Kniaz.

David R. Keyser, Gerard J. Stief and Robert L. Polk entered

appearances for appellees.

Before: Edwards, Chief Judge, Ginsburg and Tatel,

Circuit Judges.

Opinion for the court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: In this tort and contract action, we

again examine the scope of WMATA's sovereign immunity, as

well as the immunity of its employees. Because the torts

alleged here arose from policy decisions made during the

reorganization of a WMATA department, we agree with the

district court that WMATA is protected by sovereign immuni-

ty. Applying federal common law, we also hold that WMATA

officials, when exercising discretionary functions and acting

within the scope of their official duties, enjoy immunity from

tort liability. We agree with the district court that the

contract claims lack merit.

I

In 1966, acting pursuant to the Compact Clause of the

Constitution, U.S. Const. art. I, s 10, cl. 3, Congress ap-

proved the Washington Metropolitan Area Transit Authority

Compact between Maryland, Virginia, and the District of

Columbia to deal with growing traffic problems in the Wash-

ington area. See Pub. L. No. 89-774, 80 Stat. 1324 (1966)

(codified as amended at D.C. Code Ann. s 1-2431 (1992));

H. Rep. No. 89-1914, at 5-6 (1966). Responsible for creating

a coordinated public transportation system for the region,

WMATA now operates an extensive Metrobus and Metrorail

system running throughout Northern Virginia, the District,

and two Maryland counties. We have summarized WMATA's

history and its relationship to Congress in earlier decisions.

See, e.g., Dant v. District of Columbia, 829 F.2d 69, 71, 74

(D.C. Cir. 1987); Morris v. WMATA, 781 F.2d 218, 219, 222

(D.C. Cir. 1986).

Appellant Richard W. Beebe works for WMATA as an

attorney, having served in both the Office of General Counsel

and the Office of Procurement. In 1989, he became a Con-

struction Engineer Negotiator in what was then the Office of

Procurement's Final Decisions and Disputes Section, headed

by appellee Narinder Kumar. In that job, Beebe investigated

and analyzed contract claims and drafted final contracting

decisions.

In 1992, by which time Beebe had reached a rank of TA-24,

WMATA's Board of Directors approved a reorganization of

the Office of Procurement, appointing appellee Robert Bear-

inger to oversee its implementation. The reorganization

shrank the Final Decisions and Disputes Section from thir-

teen to six positions and transferred it to a new Construction

Contract Management division. In this new office, Beebe's

duties expanded from managing a single stage of the con-

tracting process to "cradle-to-grave" contract administration.

During several personnel policy meetings with Bearinger

and others and in a separate memorandum to Bearinger,

Kumar criticized Beebe's performance, suggesting that he

was unqualified for his broader responsibilities and that

Beebe should return to the Office of General Counsel. Bear-

inger then abolished Beebe's job, replaced it with a new

TA-24 Contract Administrator position, and appointed Kumar

to head a selection committee to fill the new position. Beebe

applied, but the committee selected him instead for a TA-22

Contract Administrator position.

In July, 1994, Beebe filed a ten-count complaint in the U.S.

District Court for the District of Columbia, asserting claims

for breach of contract/promissory estoppel (count 1); con-

structive discharge (count 2); misrepresentation (count 3);

fraud (count 4); gross negligence in the formulation and

implementation of the selection process for the TA-24 Con-

tract Administrator position (count 5); negligent entrustment

(count 6); defamation of character (count 7); wrongful inter-

ference with employment relationship (count 8); breach of the

covenant of good faith and fair dealing (count 9); and inten-

tional infliction of emotional harm (count 10). Beebe named

WMATA and Bearinger in counts one, two, three, four, five,

nine, and ten; he named Kumar in counts two, seven, eight,

nine, and ten; and he named only WMATA in count six.

Relying on a magistrate judge's recommendations, the dis-

trict court dismissed the tort claims against WMATA and the

individual defendants on sovereign immunity grounds. The

district court also granted summary judgment for defendants

on the breach of contract/promissory estoppel claim, and

dismissed the remaining contract claims. In this appeal by

Beebe, we review the dismissal of counts two through ten, as

well as the summary judgment on count one de novo, apply-

ing the same standards used by the district court. Wilson v.

Pea, 79 F.3d 154, 160 n.1 (D.C. Cir. 1996). Claims are not

to be dismissed " 'unless it appears beyond a reasonable

doubt that the plaintiff can prove no set of facts in support of

his claim which would entitle him to relief.' " Alicke v. MCI

Communications Corp., 111 F.3d 909, 912 (D.C. Cir. 1997)

(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Sum-

mary judgment is appropriate only "if the pleadings, deposi-

tions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter of law." Fed. R.

Civ. P. 56(c).

II

Before considering the merits of Beebe's appeal, we must

deal with WMATA's assertion that Beebe failed to exhaust

his administrative remedies. The Compact requires employ-

ees to submit all unresolved "labor disputes" to arbitration.

D.C. Code Ann. s 1-2431(66)(c). Employees must exhaust

these procedures before filing suit. Sanders v. WMATA, 819

F.2d 1151, 1158 (D.C. Cir. 1987). Employees like Beebe who

are members of the Office and Professional Employees Inter-

national Union, Local No. 2, can satisfy this requirement by

exhausting the grievance procedures contained in the union's

collective bargaining agreement with WMATA.

Before filing his complaint in this case, Beebe initiated the

collective bargaining agreement's grievance procedures, pro-

gressing through the first two of its four steps. Not until

four days after filing suit, however, did he initiate a "step

three" grievance. While this would ordinarily bar Beebe

from pursuing this litigation, WMATA does not contest

Beebe's assertion that notwithstanding the collective bargain-

ing agreement's requirement that it respond to a step three

grievance within ten days, Article XX, Agreement Between

WMATA and the Office and Professional Employees Interna-

tional Union, Local No. 2, it has never answered his step

three filing. Under these circumstances, WMATA has

waived its exhaustion defense. Cf. Vaca v. Sipes, 386 U.S.

171, 185 (1967) ("[W]hen the conduct of the employer amounts

to a repudiation ... the employer is estopped by his own

conduct to rely on the unexhausted grievance and arbitration

procedures as a defense to the employee's cause of action.")

(citations omitted). We thus turn to Beebe's tort claims.

III

In signing the WMATA Compact, Maryland, Virginia, and

the District of Columbia conferred upon WMATA their re-

spective sovereign immunities. Morris, 781 F.2d at 219; see

also Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30,

49-50 (1994). Section 80 of the Compact waives this immuni-

ty for torts "committed in the conduct of any proprietary

function," while retaining immunity for torts committed by its

agents "in the performance of a governmental function."

D.C. Code Ann. s 1-2431(80).

To distinguish governmental from proprietary functions, we

ask whether the activity amounts to a "quintessential" gov-

ernmental function, like law enforcement. Burkhart v.

WMATA, 112 F.3d 1207, 1216 (D.C. Cir. 1997). If so, the

activity falls within the scope of WMATA's sovereign immuni-

ty. Id. (citing Dant, 829 F.2d at 74). Because it is difficult to

distinguish between public and private sector functions with

any precision beyond obviously public activities like law en-

forcement, Dant, 829 F.2d at 74, the immunity question often

turns on whether the activity is "discretionary" or "ministeri-

al," a dichotomy employed by the Federal Tort Claims Act.

Burkhart, 112 F.3d at 1216. To determine whether a func-

tion is discretionary, and thus shielded by sovereign immuni-

ty, we ask whether any " 'statute, regulation, or policy specifi-

cally prescribes a course of action for an employee to follow.' "

Cope v. Scott, 45 F.3d 445, 448 (D.C. Cir. 1995) (quoting

United States v. Gaubert, 499 U.S. 315, 322 (1991)). If no

course of action is prescribed, we then determine whether the

exercise of discretion is "grounded in 'social, economic, or

political goals.' " Id. (quoting Gaubert, 499 U.S. at 323). If

so grounded, the activity is "governmental," thus falling with-

in section 80's retention of sovereign immunity.

Although employment decisions are not quintessential gov-

ernmental functions--after all, private entities also hire and

fire employees--we held in Burkhart that "decisions concern-

ing the hiring, training, and supervising of WMATA employ-

ees are discretionary in nature, and thus immune from judi-

cial review." Burkhart, 112 F.3d at 1217. The Compact

confers broad powers on WMATA to "[c]reate and abolish

offices, employments and positions ... provide for the qualifi-

cation, appointment, [and] removal ... of its ... employees,

[and][e]stablish, in its discretion, a personnel system based on

merit and fitness." D.C. Code Ann. ss 1-2431(12)(g) and (h);

see Burkhart, 112 F.3d at 1217. Employment decisions re-

quire "consideration of numerous factors, including budgetary

constraints, public perception, economic conditions, 'individual

backgrounds, office diversity, experience and employer intu-

ition.' " Id. (quoting Tonelli v. United States, 60 F.3d 492,

496 (8th Cir. 1995)).

Applying these standards, we think WMATA's appointment

of Bearinger to oversee the reorganization of the Office of

Procurement as well as later actions by Bearinger and Kumar

in the course of the reorganization were discretionary activi-

ties. Beebe does not allege that Bearinger or Kumar were

told precisely how to structure the new department, which

positions to create or abolish, or whom to hire or retain. Of

course, not every action connected in some way to an employ-

ment decision amounts to a discretionary function. But all

actions challenged by Beebe involved a large measure of

choice, and we perceive no distinction between the discretion

here and the hiring, training, and supervision of bus opera-

tors at issue in Burkhart. If anything, the activity in this

case--reorganizing an entire office--involved even greater

degrees of political, social and economic considerations.

Agreeing with the district court that WMATA is therefore

immune from Beebe's tort claims, including the alleged inten-

tional torts, cf. Gray v. Bell, 712 F.2d 490, 508 (D.C. Cir. 1983)

(barring intentional tort claim because conduct fell within

discretionary function exception), we affirm the dismissal of

counts three through six, and ten against WMATA.

IV

Because Beebe also asserts tort claims against Bearinger

and Kumar in their individual capacities (counts 3-5, 7, 8, and

10), we must determine whether, as the district court held,

they too have immunity from suit. The scope of immunity of

WMATA employees for torts committed in the course of

governmental or discretionary functions is a road not well

traveled.

Section 80 of the Compact provides that the "exclusive

remedy" for any action for which WMATA is liable "shall

be by suit against the Authority." D.C. Code Ann.

s 1-2431(80). In other words, for torts committed in the

course of proprietary or ministerial functions, WMATA is

liable and its employees immune. The Compact is silent on

the question this case presents: whether WMATA employees

have immunity from suit where WMATA itself has immunity

because the alleged torts occurred in the exercise of govern-

mental or discretionary functions.

To resolve this issue, we must first determine which law to

rely on--those of the three signatories or federal common

law? Where Congress wanted state law to govern a question

under the WMATA Compact, such as in proprietary

tort actions, it said so explicitly. See D.C. Code Ann.

s 1-2431(80) ("The Authority shall be liable for ... torts ...

committed in the conduct of any proprietary function, in

accordance with the law of the applicable signatory....").

Where Congress has not so provided, federal law governs the

interpretation of Compact terms. Culyer v. Adams, 449 U.S.

433, 440 (1981) ("[W]here Congress has authorized the States

to enter into a cooperative agreement, and where the subject

matter of that agreement is an appropriate subject for con-

gressional legislation, the consent of Congress transforms the

States' agreement into federal law under the Compact Clause

[of the Constitution]."). We thus regularly look to federal law

when distinguishing between governmental and proprietary

functions. See, e.g., Burkhart, 112 F.3d at 1216; Sanders,

819 F.2d at 1154. Although the issue in this case requires us

to interpret no specific Compact terms, but rather to fill in a

gap left by those terms, we think the issue remains essential-

ly federal, resolvable pursuant to federal common law. Cf.

Old Town Trolley Tours v. WMATC, No. 96-1069, slip op. at

6 (D.C. Cir. Nov. 14, 1997).

While perhaps not the proper standard for interpreting

every interstate compact, federal common law is particularly

appropriate in WMATA's case. Not only does the Compact

have its roots in congressionally authorized studies, see H.

Rep. No. 89-1914, at 3-4 (1966), but "Congress played a

particularly active role" in WMATA's creation, Morris, 781

F.2d at 222. From the very outset, the federal government

has contributed significantly to the construction and operation

of WMATA's transportation system. Id. at 225. Moreover,

although WMATA operates in three jurisdictions, it runs its

core policy-making functions in one central District of Colum-

bia headquarters. Resorting to the laws of the individual

signatories could expose WMATA policymakers to different,

possibly inconsistent immunity rules, a result that would run

counter to the uniform interpretation of WMATA's govern-

mental immunity, a uniformity which results from our reli-

ance on federal law. Although Dant's discussion of official

immunity refers by analogy to District of Columbia cases,

nothing in that decision conflicts with the proposition that

federal common law determines whether WMATA officials

have immunity when exercising governmental functions.

For the appropriate federal common law standard, we look

to Westfall v. Erwin, 484 U.S. 292 (1988). There, the Su-

preme Court held that federal officials enjoy absolute immu-

nity from state-law tort actions when the conduct at issue

falls "within the scope of their official duties and the conduct

is discretionary in nature." Id. at 297-98. Congress has

since overturned Westfall as it applies to federal employees,

see Federal Employees Liability Reform and Tort Compensa-

tion Act, Pub. L. No. 100-694, 102 Stat. 4563 (1988) (codified

at 28 U.S.C. ss 2671-80 (1994)), but Westfall remains the

common law rule, see Mangold v. Analytic Servs., Inc., 77

F.3d 1442, 1447 n.4 (4th Cir. 1996) ("[a]t federal common law,

absolute official immunity" still governed by Westfall).

Although Westfall places the burden of establishing immu-

nity on the official, Westfall, 484 U.S. at 299, Beebe has failed

even to allege that Bearinger and Kumar acted outside the

scope of their official duties, Westfall's first prong. By

Beebe's own account, all actions he challenges related directly

to the office reorganization, thus lying at the core of Bearing-

er and Kumar's official responsibilities. Even the alleged

intentional torts (fraud and intentional infliction of emotional

harm) as well as those Beebe alleges were motivated by

personal animus (defamation and interference with his em-

ployment relationship) occurred in the course of the reorgani-

zation. Cf. Barr v. Matteo, 360 U.S. 564, 575 (1959) (plurality

opinion) ("The fact that the action here taken was within the

outer perimeter of petitioner's line of duty is enough to

render the privilege applicable, despite the allegations of

malice in the complaint."); Spalding v. Vilas, 161 U.S. 483,

498 (1896) (Harlan, J.). To be sure, not all intentional or

malicious torts committed in the normal course of employ-

ment necessarily fall within the scope of official duties. Offi-

cials "exceed the outer perimeters of their responsibilities,

and act manifestly beyond their line of duty," for example,

"when they resort to physical force to compel the obedience

of their managerial subordinates," McKinney v. Whitfield,

736 F.2d 766, 771-72 (D.C. Cir. 1984), or when they use false

threats of criminal charges to coerce an employee into resign-

ing, Bishop v. Tice, 622 F.2d 349, 359 (8th Cir. 1980). None

of Beebe's allegations come even close to these extremes. He

alleges nothing more than that Bearinger implemented the

reorganization improperly. His allegations about Kumar's

personal animus are conclusory.

Because we have already determined that Bearinger and

Kumar were engaged in discretionary functions--Westfall's

second prong--they enjoy immunity from Beebe's tort allega-

tions. We thus affirm the district court's dismissal of counts

three through five, seven, eight, and ten against Bearinger

and Kumar.

V

This brings us finally to Beebe's claims for breach of

contract/promissory estoppel (count 1), constructive discharge

(count 2), and breach of the covenant of good faith and fair

dealing (count 9), asserted against WMATA, Bearinger, and

Kumar. Section 80 of the Compact waives WMATA's sover-

eign immunity for contractual disputes. D.C. Code Ann.

s 1-2431(80). Because the Compact makes WMATA the

exclusive defendant where WMATA is liable, id., Bearinger

and Kumar cannot be sued for any contractual claims. As for

WMATA, we find no basis for questioning the district court's

grant of summary judgment on the breach of contract/

promissory estoppel count or its dismissal of the remaining

counts.

Beebe claims that WMATA is contractually bound by state-

ments in its personnel manual. Although like any District of

Columbia employer WMATA can bind itself contractually in a

personnel manual, see Sisco v. GSA Nat'l Capital Fed. Credit

Union, 689 A.2d 52, 55 (D.C. 1997) (holding that "assurances

by an employer in a personnel or policy manual distributed to

all employees that are clear enough in limiting the right to

terminate to specific causes or events will overcome the

presumption of at-will employment"), Beebe points to no

statement of policy in WMATA's manual that could possibly

create such a contract. He cites policies 1.2 and 2.1, which

encourage internal promotion and responsible supervision,

but neither is "clear enough" to overcome the presumption

that he was employed at-will, Sisco, 689 A.2d at 55.

Beebe's remaining contract claims also fail: his covenant of

good faith and fair dealing claim, because it depends upon the

existence of an enforceable contract; and his construc-

tive discharge claim, because he makes no allegation that

WMATA made working conditions so onerous that he had to

quit, Atlantic Richfield Co. v. District of Columbia Comm'n

on Human Rights, 515 A.2d 1095, 1101 (D.C. 1986) (construc-

tive discharge occurs "when the employer deliberately makes

working conditions intolerable and drives the employee into

an involuntary quit"). Indeed, Beebe told us at oral argu-

ment that he remains employed by WMATA. Failing to

pursue his claim of promissory estoppel in this court, Beebe

has waived it. Terry v. Reno, 101 F.3d 1412, 1415 (D.C. Cir.

1996), cert. denied, 117 S. Ct. 2431 (1997).

VI

We affirm the district court's grant of appellees' motion for

summary judgment on the breach of contract/promissory

estoppel count and of their motion to dismiss the remainder

of Beebe's complaint.

So ordered.