In Re Sealed Case

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 14, 2006 Decided June 29, 2007

Unsealed July 20, 2007

No. 04-5313

IN RE: SEALED CASE

Appeal from the United States District Court

for the District of Columbia

(No. 94cv01756)

Brian C. Leighton argued the cause and filed the briefs for

appellant.

H. Thomas Byron III, Attorney, U.S. Department of Justice,

argued the cause for appellees. With him on the brief were

Peter D. Keisler, Assistant Attorney General, Kenneth L.

Wainstein, U.S. Attorney at the time the brief was filed, and

Barbara L. Herwig and Douglas Letter, Attorneys.

Before: ROGERS, BROWN and GRIFFITH, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

2

Concurring and dissenting opinion filed by Circuit Judge

BROWN.

ROGERS, Circuit Judge: In this appeal, the court must

decide whether the state secrets privilege requires the dismissal

of Richard A. Horn’s complaint alleging the violation of his

Fourth Amendment rights. We affirm the district court’s

determinations that the United States properly invoked the

privilege and that the complaint must be dismissed against one

of the defendants. However, we hold that Horn can establish a

prima facie case without using the privileged information.

Accordingly, we reverse the dismissal of his complaint against

the remaining defendant and remand the case to the district court

to consider whether Horn’s case can proceed.

I.

According to the complaint, in 1993, Horn was stationed in

Rangoon, Burma, as the country attaché for the United States

Drug Enforcement Agency (“DEA”). He had a strained

professional relationship with the State Department Chargé

d’Affaires, Franklin “Pancho” Huddle, Jr., arising from the

differing policy goals of their agencies, and he believed that

Huddle was seeking information to justify Horn’s transfer to

another station outside of Burma. When Horn discovered that

Huddle had sent a classified State Department cable allegedly

transcribing a telephone call that Horn had made to a

subordinate from his residence, he concluded that Huddle was

engaging in electronic eavesdropping in violation of the Fourth

Amendment.

3

In 1994, Horn filed a Bivens1 action against Huddle and a

second unnamed defendant (“Defendant II”), allegedly an

employee of the Central Intelligence Agency (“CIA”), whose

identity is classified. The United States intervened in 2000 and

asserted the state secrets privilege with respect to portions of

two internal investigations by agency inspectors general (“IG

reports”) that had been conducted in response to Horn’s

allegations. The district court sustained the claim of privilege.

The government filed a classified motion to dismiss the

complaint on November 7, 2000, and provided a redacted copy

to Horn. Horn responded with a motion to proceed with

discovery under the Classified Information Procedures Act

(“CIPA”), 18 U.S.C. app. III, on November 13, 2000, deferring

any response to the government’s motion until the district court

resolved his proposal to proceed under CIPA and his prior

motion seeking security clearance for his attorney’s secretaries.

Nearly four years later,2 on July 28, 2004, the district court

granted the government’s motion to dismiss the complaint

pursuant to FED. R. CIV. P. 12(b)(6) and dismissed Horn’s

outstanding motions as moot. The district court ruled that

dismissal was required on three independent grounds: (1) the

plaintiff cannot make out a prima facie case absent the protected

material; (2) the state secrets privilege deprives the defendants

of information required in their defense; and (3) the subject

matter of the plaintiff’s complaint is a state secret.

1

Bivens v. Six Unknown Named Agents of the Fed. Bureau

of Narcotics, 403 U.S. 388 (1971). Horn’s complaint also alleged

violations of anti-wiretapping statutes and conspiracy; these claims

were dismissed in 1997. A putative class action filed by Horn was

dismissed in 2000. Horn does not pursue these matters on appeal.

2

The district court judge to whom the case was originally

assigned died and the case was reassigned in 1999.

4

Horn appeals, and our review of the dismissal of his

complaint is de novo. See, e.g., Broudy v. Mather, 460 F.3d 106,

116 (D.C. Cir. 2006).

II.

The state secrets privilege “is a common law evidentiary

rule that protects information from discovery when disclosure

would be inimical to the national security.” In re United States,

872 F.2d 472, 474 (D.C. Cir.), cert. denied sub nom. United

States v. Albertson, 493 U.S. 960 (1989). It has “its initial roots

in Aaron Burr’s trial for treason, United States v. Burr, 25 F.

Cas. 30 (C.C.D. Va. 1807), and has its modern roots in United

States v. Reynolds, 345 U.S. 1 (1953).” Id. at 474-75. In

Reynolds, the Supreme Court held that because the Federal Tort

Claims Act (“FTCA”) subjects the United States to liability only

insofar as Congress has consented, and because the FTCA

expressly incorporates the Federal Rules of Civil Procedure, the

United States may claim a privilege against discovery of military

and state secrets, pursuant to FED. R. CIV. P. 34, through a

formal request “lodged by the head of the department which has

control over the matter, after actual personal consideration by

that officer.” 345 U.S. at 6-8 (footnote omitted). The Court

observed that the “constitutional overtones” were “unnecessary

to pass upon, there being a narrower [statutory] ground for

decision.” Id. at 6. In Reynolds, “[i]t [wa]s . . . apparent that

the[] electronic devices [that were being tested in flight when the

military airplane crashed and killed the plaintiffs’ spouses] must

be kept secret if their full military advantage is to be exploited

in the national interests.” Id. at 10. The Court remanded the

case to proceed without the privileged materials, id. at 12,

having noted that because the surviving crew members were

available for examination, “it should be possible for [the

plaintiffs] to adduce the essential facts as to causation without

resort to material touching upon military secrets,” id. at 11.

5

On appeal, Horn contends that the state secrets privilege

may not be invoked in a Bivens action and, alternatively, that his

case may proceed with non-privileged materials, including a

declassified redacted cable and other circumstantial evidence

suggesting that Huddle and Defendant II violated Horn’s

constitutional rights. We first address Horn’s challenge to the

application of the privilege in a Bivens action and his alternative

contention that the United States did not properly invoke the

privilege. Neither contention is persuasive.

A.

Unlike the plaintiffs in Reynolds, Horn does not rely upon

the FTCA’s limited waiver of sovereign immunity. As a result,

he contends that the privilege is unavailable to the United States.

Horn’s complaint invokes Bivens, which provides that “damages

may be obtained for injuries consequent upon a violation of the

Fourth Amendment by federal officials” notwithstanding the

lack of an explicit statutory cause of action, 403 U.S. at 395-97.

The district court ruled that it was “settled, indisputable law”

that the Fourth Amendment protects American citizens abroad,

see, e.g., United States v. Behety, 32 F.3d 503, 510-11 (11th Cir.

1994); United States v. Mount, 757 F.2d 1315, 1317-18 (D.C.

Cir. 1985), and the United States does not challenge that ruling

on appeal.

The distinction pressed by Horn between constitutional

claims and those based on statutory grounds means that

Reynolds’ holding on statutory grounds does not control.

Nonetheless, it hardly follows that the privilege evaporates in

the presence of an alleged constitutional violation. Horn

identifies no legal authority to support this conclusion. Instead,

the nature of the state secrets privilege compels the conclusion

that the United States may claim the privilege as to evidence

relevant to a constitutional claim. Even in constitutional cases,

Congress “has plenary authority over the promulgation of

6

evidentiary rules for the federal courts.” Usery v. Turner

Elkhorn Mining Co., 428 U.S. 1, 31 (1976); see also Hawkins v.

United States, 358 U.S. 74, 78 (1958); Tot v. United States, 319

U.S. 463, 467 (1943). The federal rules of evidence provide that

claims of privilege are to be “governed by the principles of the

common law . . . in the light of reason and experience.” FED. R.

EVID. 501; see United States v. Green, 670 F.2d 1148, 1155 n.10

(D.C. Cir. 1981). In Reynolds, the Supreme Court made clear

that “the privilege against revealing military secrets . . . is well

established in the law of evidence.” 345 U.S. at 6-7.

Although the rules of evidence must yield when they offend

the constitutional trial rights of litigants, see Tot, 319 U.S. at

467; FED. R. EVID. 501, Horn identifies no trial right that is

being abridged. In Horn’s view, it is the constitutional nature of

his underlying claim that entitles him to escape the binds of the

federal rules. We can find no support for this position, which

would essentially allow any constitutional claim to repress any

rule that withholds evidence for reasons other than relevance,

see, e.g., FED. R. EVID. 403, 407, 411, 802. The federal rules are

premised on a distinction between substantive claims and the

evidence used to prove the claims. Cf. Hanna v. Plumer, 380

U.S. 460 (1965). Although evidentiary matters are governed by

the rules, they cannot modify litigants’ substantive rights as to

either constitutional or statutory matters. See 28 U.S.C.

§ 2072(b); cf. Webster v. Doe, 486 U.S. 592, 603-04 (1988).

Thus, so long as the state secrets privilege operates as a rule of

evidence, see Zuckerbraun v. Gen. Dynamics Corp., 935 F.2d

544, 546 (2d Cir. 1991); In re United States, 872 F.2d at 474,

and not as a means to modify Horn’s substantive constitutional

rights, we hold that it may be invoked by the United States in a

Bivens action. See also El-Masri v. United States, 479 F.3d 296,

300 (4th Cir.), petition for cert. filed, 75 U.S.L.W. 3663 (U.S.

May 30, 2007) (No. 06-1613); Black v. United States, 62 F.3d

7

1115, 1117 (8th Cir. 1995); Halkin v. Helms, 690 F.2d 977, 987

& n.42 (D.C. Cir. 1982) (“Halkin II”).

B.

Notwithstanding the deference due to Executive Branch

claims of privilege, the Supreme Court instructed in Reynolds

that the state secrets privilege is not to be “lightly invoked,” 345

U.S. at 7, because, as this court has observed, once invoked, the

privilege is “absolute” and “cannot be compromised by any

showing of need on the part of the party seeking the

information,” Northrop Corp. v. McDonnell Douglas Corp., 751

F.2d 395, 399 (D.C. Cir. 1984). Accordingly, this court has

emphasized that the district court must scrutinize the claim of

privilege more carefully when the plaintiff has “made a

compelling showing of need for the information in question,”

Ellsberg v. Mitchell, 709 F.2d 51, 59 n.37, 61 (D.C. Cir. 1983),

cert. denied, 465 U.S. 1038 (1984); see Reynolds, 345 U.S. at

11, and this court’s review of the district court’s determination

that the “affidavits [are] adequate to establish the reasonable

danger of injury,” is for abuse of discretion, Halkin II, 690 F.2d

at 991. To sustain the assertion of privilege, the district court

need not have complete knowledge of how disclosure would

cause a specific security breach, see In re United States, 872

F.2d at 475; it is sufficient that the reports present “a reasonable

danger of divulging too much to a ‘sophisticated intelligence

analyst,’” id. (quoting Halkin v. Helms, 598 F.2d 1, 10 (D.C.

Cir. 1978) (“Halkin I”)). As the Supreme Court observed in

Reynolds, where it is possible to determine “from all the

circumstances of the case” that such danger exists, “the occasion

for the privilege is appropriate, and the court should not

jeopardize the security which the privilege is meant to protect by

insisting upon an examination of the evidence, even by the judge

alone, in chambers.” 345 U.S. at 10.

8

The district court reviewed the unclassified declarations of

then-Director of Central Intelligence George J. Tenet and then-

Deputy Secretary of Defense John J. Hamre, which set forth

their personal consideration of Horn’s allegations and the

national security interests involved, as well as additional

classified declarations filed ex parte and in camera. The district

court also requested the ex parte, in camera submission of the

reports subject to the claim of privilege. On the basis of its

review, the district court concluded that national security would

be compromised if the portions of the IG reports for which the

United States claimed a privilege were disclosed. Specifically,

the district court found that releasing those portions of the IG

reports would create the risk of revealing covert operatives,

organizational structure and functions, and intelligence-

gathering sources, methods, and capabilities.

Upon review of the IG reports and the affidavits submitted

by the United States, we find no abuse of discretion by the

district court in ruling that the United States has made the

requisite showing as to the portions of the two IG reports over

which the United States claimed privilege. Hence, these

portions of the IG reports were properly stricken as evidence in

the case.

III.

When the state secrets privilege is successfully invoked,

“[t]he effect . . . is well established: ‘[T]he result is simply that

the evidence is unavailable, as though a witness had died, and

the case will proceed accordingly, with no consequences save

those resulting from the loss of the evidence.’” Ellsberg, 709

F.2d at 64 & n.56 (quoting MCCORMICK’S HANDBOOK OF THE

LAW OF EVIDENCE 233 (E. Cleary ed., 1972) and citing the

advisory committee’s note to PROP. FED. R. EVID. 509(d), 56

F.R.D. 183, 254 (1972), which “was rejected by Congress for

9

reasons unrelated to the Committee’s recognition of th[is]

principle”). Government participation in the case results in “no

alteration of pertinent substantive or procedural rules.” Id. at 64.

In general, against a motion to dismiss, “once a claim has been

stated adequately, it may be supported by showing any set of

facts consistent with the allegations in the complaint,” Bell Atl.

Corp. v. Twombly, 127 S. Ct. 1955, 1968 (2007), “construing the

complaint liberally in the plaintiff’s favor with the benefit of all

reasonable inferences derived from the facts alleged.” Stewart

v. Nat’l Educ. Ass’n, 471 F.3d 169, 173 (D.C. Cir. 2006). In the

context of the state secrets privilege, the court has recognized

that where, as here, the plaintiff is not in possession of the

privileged material, “dismissal of the relevant portion of the suit

would be proper only if the plaintiff[] w[as] manifestly unable

to make out a prima facie case without the requested

information.” Ellsberg, 709 F.2d at 65; see also In re United

States, 872 F.2d at 476. We address each of the grounds on

which the district court dismissed the complaint.

A.

The district court ruled that Horn could not make out a

prima facie case without the use of privileged information. In

many state secrets cases, a plaintiff has no prospects of evidence

to support the assertions in his complaint and this lack of

evidence requires dismissal. See, e.g., Ellsberg, 709 F.2d at 65;

Halkin I, 598 F.2d at 10-11; see also El-Masri, 479 F.3d at 308-

09; Kasza v. Browner, 133 F.3d 1159, 1170 (9th Cir. 1998);

Bareford v. Gen. Dynamics Corp., 973 F.2d 1138, 1140-42 (5th

Cir. 1992); Zuckerbraun, 935 F.2d at 547. Here, however, Horn

is not without evidence. As the United States acknowledged

through the Director of Central Intelligence, “[c]ertain

documents appearing as joint report attachments [to one of the

IG reports] and which contain little or no state secrets

information can be segregated (in redacted or unredacted form,

respectively) at no risk to U.S. national security.” Tenet Decl.

10

¶ 33. Thus, although Horn cannot access the privileged portions

of the IG reports, the question remains whether he can make out

a prima facie case for a Bivens violation with the unprivileged

evidence. At this stage of the proceedings, Horn must supply

sufficient allegations that a federal agent, acting under color of

his authority, violated his Fourth Amendment rights, but he need

not disprove possible defenses. See Bivens, 403 U.S. at 389;

Ellsberg, 709 F.2d at 68.

Horn’s basic claim is straightforward: Late at night on

August 12, 1993, he placed a phone call from his personal

residence to a DEA subordinate, David Sikorra. He expressed

concern that Huddle was trying to expel him from Burma and

that DEA might respond by closing its Burma office. Soon

thereafter, Horn learned of a cable, since declassified in part,

that Huddle sent to State Department officials in Washington,

D.C. This cable, which is dated August 13, 1993, contains an

unclassified paragraph that reads:

Finally, Horn shows increasing signs of evident strain.

Late last night, for example, he telephoned his junior

agent to say that “I am bringing the whole DEA

operation down here.” “You will be leaving with

me . . . We’ll all leave together.” In this context, he

then went on to note talks with [DEA officials] Greene

and Maher without explicitly drawing a connection.

Cable from Franklin Huddle, American Embassy, Rangoon,

Burma, to Secretary of State, Washington, D.C. ¶ 6 (Aug. 13,

1993) (“Huddle Cable”) (ellipses in original). On the basis of

this cable, which Horn claims quotes him verbatim, Horn

concluded that someone was eavesdropping on his personal

conversation with Sikorra.

11

In an unclassified and unprivileged affidavit submitted to

the district court, Huddle insisted instead that Horn’s

conversation had spread by word of mouth. Huddle averred that

he told the IG investigators that the information in the cable was

provided to him by DEA Special Agent Bruce Stubbs. Special

Agent Stubbs, for his part, denied, in the declassified portion of

the IG report, telling anything to Huddle about Horn’s

conversation with Sikorra. According to unclassified and

unprivileged information, Stubbs was on official travel during

the relevant time period and told IG investigators that he neither

saw Huddle in person nor contacted him by telephone. Stubbs

insisted that he did not learn of Horn’s conversation with Sikorra

until he returned to Rangoon on August 26, 1993, almost two

weeks after Huddle sent the cable to the State Department.

Further, Stubbs swore in an unclassified and unprivileged

affidavit that Huddle had contacted him while the IG

investigation was pending to discuss how Stubbs had told

Huddle about Horn’s statement. Stubbs averred that he had no

such recollection and that Huddle’s telephone call was improper,

to which Huddle responded that he was merely “prescreening

[Stubbs] to determine [his] recollections of Horn’s allegations.”

Stubbs Aff. para. 8. This aspect of Stubbs’ affidavit is supported

by a file memorandum that he wrote on September 22, 1994, the

day after he was contacted by Huddle. When confronted with

Stubbs’ affidavit, Huddle told investigators in writing that he

“stand[s] by [his] statement.” Huddle Stmt. (Nov. 7, 1995).

Horn thus contends, in view of the unclassified and

unprivileged materials, that he has demonstrated a prima facie

case because the district court found that the redacted cable

showed eavesdropping as the source of information, and the

declassified interviews with personnel then stationed at the

Embassy in Rangoon establish that Huddle did not learn of

Horn’s conversation, either verbatim or otherwise, from Stubbs

or anybody else, leaving unconstitutional surveillance as the

12

only remaining option. Although Horn has no direct evidence

that Huddle participated in an unlawful surveillance, he relies on

the following circumstantial evidence:

First, in November 1992 there was a suspicious entry into

his apartment in Burma when, unsolicited, his government-

issued rectangular coffee table was swapped for an oval

replacement while he was out of town. He was advised that his

“original coffee table was needed to complete a sofa set at

another residence.” Memorandum from Richard A. Horn on

Questionable Furniture Movement para. 3 (Feb. 27, 1995). Horn

characterized this conduct as “peculiar” and notes that “[a]

telephone was located in this room within close proximity to the

aforementioned coffee table.” Id. para. 4.

Second, Horn traces the limited spread among Embassy

personnel of his conversation with Sikorra, emphasizing that

Huddle’s source was specific enough to allow Huddle to use

quotation marks and ellipses in the cable. In declassified

statements, Sikorra explained that he told only a secretary, Mary

Weinhold, about the disturbing telephone call; Mrs. Weinhold

explained that no one could have overheard her conversation

with Sikorra and that she does not recall having told her

husband, who also worked at the Embassy, about Horn’s

conversation; Mr. Weinhold corroborated his wife’s

recollection; and Huddle’s deputy at the Embassy stated his

belief that Huddle was aware of the conversation between Horn

and Sikorra before he was.

The district court “verified that indeed, [the Huddle cable]

is a verbatim reproduction of parts of Horn’s conversation with

Sikorra, using quotation marks and ellipses, and a paraphrasing

of other parts — evidence that Horn’s conversation had been

wiretapped.” Mem. Op. of Feb. 10, 1997, at 4. Nonetheless, the

district court found Horn’s allegations insufficient to establish

13

a prima facie case. Mem. Op. of July 28, 2004, at 10. The

district court reasoned that Defendant II’s identity is protected

and that there is no unprivileged evidence connecting him to

Horn’s allegations. As to both defendants, the district court

concluded,

[a]t most [Horn] has a dispute about whether or not

[Huddle] learned the information from another person

or from [unconstitutional surveillance]. But [Horn]

cannot establish a prima facie case by offering any

evidence that [surveillance] occurred. Therefore,

[Horn]’s case must be dismissed because [Horn] cannot

establish a prima facie case against either defendant.

Id. at 10-11 (italics added).

As to Defendant II, the district court’s reasoning is

persuasive. Nothing about this person would be admissible in

evidence at a trial, so even construing the allegations in the

complaint liberally does little for Horn’s claim. However, as to

Huddle, we are unpersuaded that Horn could prove no facts that

would lead a reasonable jury to conclude that Huddle had

violated his constitutional rights. Although Horn’s case is

premised on circumstantial evidence, “[a]s in any lawsuit, the

plaintiff may prove his case by direct or circumstantial

evidence.” U.S. Postal Serv. Bd. of Governors v. Aikens, 460

U.S. 711, 714 n.3 (1983); see also Doe v. U.S. Postal Serv., 317

F.3d 339, 343 (D.C. Cir. 2003). Horn can point to the highly

suspicious use in the cable of quotation marks and ellipses that

creates an inference that the conversation has been transcribed,

the seeming impossibility that Huddle would have learned of the

conversation by lawful means, and the inconsistencies

underlying Huddle’s explanation about how he learned of the

conversation. Further, even if a reasonable jury found that

Horn’s conversation with Sikorra was gossip-worthy and might

14

have spread through the Embassy, it could still reasonably infer

that eavesdropping had occurred from the following sentence in

the cable, which appears less likely to have spread through

office chatter: “In this context, he then went on to note talks

with Greene and Maher without explicitly drawing a

connection.” Huddle Cable ¶ 6.

Against this proffer of evidence by Horn, the United States

offers that “[Horn’s] unsupported assertions [about

eavesdropping] rely on hearsay concerning the [investigations

by the] Inspectors General, and cannot be the subject of more

proof because the contents of [portions of] the Inspector General

reports are privileged.” Appellees’ Br. at 35 n.12. This

argument fails for two reasons. First, to avoid dismissal of his

complaint under FED. R. CIV. P. 12(b)(6), Horn need not plead

the facts sufficient to prove his allegations and evidence that will

ultimately be used at trial. See Covad Commc’ns Co. v. Bell Atl.

Corp., 398 F.3d 666, 671 (D.C. Cir. 2005); Warren v. District of

Columbia, 353 F.3d 36, 39-40 (D.C. Cir. 2004); FED. R. CIV. P.

8(a). Second, although the IG reports are privileged in part, the

interviews Horn could rely upon, such as those with Embassy

personnel, would involve conversations that have been

declassified. As such, there would be no barrier to his calling

the affiants as witnesses in order to testify to these unclassified

matters, which are not subject to the state secrets privilege.

Thus, even after evidence relating to covert operatives,

organizational structure and functions, and intelligence-

gathering sources, methods, and capabilities is stricken from the

proceedings under the state secrets privilege, Horn has alleged

sufficient facts to survive a motion to dismiss under Rule

12(b)(6).

B.

The district court also ruled that Horn’s complaint must be

dismissed because without the state secrets evidence the

15

defendants must proceed without materials they would need to

mount possible defenses. As a general principle, privileged

evidence is unavailable to either party, and neither party may

rely upon the stricken evidence to its advantage. The Supreme

Court in Reynolds thus admonished that the state secrets

privilege is not to be “lightly invoked.” 345 U.S. at 7. As Judge

Learned Hand observed, a claim of the state secrets “privilege

will often impose a grievous hardship, for it may deprive

parties . . . of power to assert their rights or to defend

themselves. That is a consequence of any evidentiary privilege.”

United States v. Coplon, 185 F.2d 629, 638 (2d Cir. 1950); see

also Northrop Corp., 751 F.2d at 399.

Notwithstanding the general rule that neither party may use

privileged evidence, this court has allowed limited use to avoid

the inequity caused when the United States asserts its privilege

at the possible expense of a civilian defendant. Thus, in

Ellsberg, the court suggested that qualified immunity may

protect government officials against liability in this situation.

709 F.2d at 69 & n.74. Here, however, the district court rejected

Huddle’s claim of qualified immunity, reasoning that “Horn’s

allegations could constitute a violation of a clearly established

constitutional right” and that “a jury could reasonably find clear

and convincing evidence of defendants’ unconstitutional

motive.” Mem. Op. of Feb. 10, 1997, at 17-18.3 This court has

3

Because the defendants in this case lack qualified immunity,

our concurring and dissenting colleague suggests that the “‘serious

injustice’ identified in Ellsberg” remains. Concurring & Dissenting

Op. at 4. To the contrary, in Ellsberg, the court concluded:

In sum, the practicability of in camera resolution of

the immunity issue eliminates the possibility that the

defendants — in this case or in future cases — will be

trapped by the government’s assertion of its state

16

also recognized that the excluded evidence may be used for the

limited purpose of demonstrating a “valid defense.” In re

United States, 872 F.2d at 476; accord Molerio v. FBI, 749 F.2d

815, 825 (D.C. Cir. 1984). In Molerio, the court stated:

As a result of th[e] necessary process, the court knows

that the reason Daniel Molerio was not hired had

nothing to do with [his father’s] assertion of First

Amendment rights. Although there may be enough

circumstantial evidence to permit a jury to come to that

erroneous conclusion, it would be a mockery of justice

for the court — knowing the erroneousness — to

participate in this exercise.

749 F.2d at 825. In distinguishing Ellsberg, where “the court’s

consideration of the state secrets privilege did not ipso facto

disclose to the court the validity of the defense,” the court in

Molerio concluded that “further activity in this case would

involve an attempt, however well intentioned, to convince the

jury of a falsehood.” Id. (italics added).

Therefore, when the district court can determine that the

defendant will be deprived of a valid defense based on the

privileged materials, it may properly dismiss the complaint.

Other circuits have followed suit, relying upon Molerio to adopt

the “valid defense” standard. See, e.g., Tenenbaum v. Simonini,

372 F.3d 776, 777-78 (6th Cir. 2004); Kasza, 133 F.3d at 1166

(9th Cir.); Zuckerbraun, 935 F.2d at 547 (2d. Cir.); cf. Bareford,

973 F.2d at 1141 (5th Cir.). To the extent the Fourth Circuit

secrets privilege. And that result, in turn, alleviates

any qualms we might have concerning the result we

reach today.

709 F.2d at 70 (emphasis added).

17

recently referred to “hypothetical defenses” based on privileged

information in El-Masri, 479 F.3d at 309, its reference was made

in the context of determining whether the “state secrets are so

central to [the] proceeding that it cannot be litigated without

threatening their disclosure,” id. at 308, see Part III.C, infra; as

relevant, the court reasoned that any valid defense to El-Masri’s

allegations of illegal detention and torture would require resort

to privileged materials, id. at 308. Here, Huddle has already

revealed his defense — that he learned of Horn’s conversation

through Stubbs — and it is unprivileged.

Although the district court found that Horn’s complaint

must be dismissed because there are possible defenses that

Huddle cannot pursue without the resort to privileged materials,

this is quite different from the finding in Molerio that the

privileged materials showed that the defendant could not have

committed the alleged acts. A “valid defense,” as contemplated

by this circuit’s precedents, is meritorious and not merely

plausible and would require judgment for the defendant. See

BLACK’S LAW DICTIONARY 1586 (8th ed. 2004) (defining

“valid” as “[l]egally sufficient” and “[m]eritorious”); see also In

re United States, 872 F.2d at 481-82 (D.H. Ginsburg, J.,

concurring and dissenting) (agreeing with the court that “there

is simply no reason why plaintiff cannot go forward with her

claim” because “it is not at all clear that the Government’s

[secret] defense is dispositive (or even meritorious * * * under

New York law)”). “Meritorious,” in turn, means “meriting a

legal victory,” BLACK’S LAW DICTIONARY, supra, at 1010.4

4

In other contexts, this court has consistently equated “valid”

with meritorious and dispositive. In a criminal case, the court

described a “valid defense” as one that “required acquittal.” United

States v. DeFries, 129 F.3d 1293, 1309 (D.C. Cir. 1997) (per curiam).

In an exercise of pendent jurisdiction, the court observed that the

statute of limitations is a threshold question because if it is a “valid

18

Under this court’s precedent, a claim of state secrets

privilege results in “no consequences save those resulting from

the loss of the evidence,” including “no alteration of pertinent

substantive or procedural rules.” Ellsberg, 709 F.2d at 64.5

Were the valid-defense exception expanded to mandate

dismissal of a complaint for any plausible or colorable defense,

then virtually every case in which the United States successfully

invokes the state secrets privilege would need to be dismissed.

This would mean abandoning the practice of deciding cases on

the basis of evidence — the unprivileged evidence and

privileged-but-dispositive evidence — in favor of a system of

conjecture. Just as “[i]t would be manifestly unfair to permit a

presumption of [unconstitutional conduct] to run against” the

defendant when the privilege is invoked, see Halkin I, 598 F.2d

at 10, it would be manifestly unfair to a plaintiff to impose a

presumption that the defendant has a valid defense that is

obscured by the privilege. There is no support for such a

presumption among the other evidentiary privileges because a

presumption would invariably shift the burdens of proof,

something the courts may not do under the auspices of privilege.

See 28 U.S.C. § 2072(b).

defense,” then the court need not reach other defenses. Rendall-

Speranza v. Nassim, 107 F.3d 913, 916 (D.C. Cir. 1997). Simply put,

a “valid defense” in a civil case “prohibits . . . recover[y].” Graham

v. Davis, 880 F.2d 1414, 1418 (D.C. Cir. 1989).

5

Our concurring and dissenting colleague notes that this

portion of Ellsberg is dicta and thus not binding on this court. See

Concurring & Dissenting Op. at 3-4. This citation to Ellsberg is

limited to principles that the court described as so “well established”

and “settled” to have been “taken for granted.” 709 F.2d at 64 &

nn.56 & 57 (quoting MCCORMICK’S HANDBOOK OF THE LAW OF

EVIDENCE, supra, at 233)).

19

Our concurring and dissenting colleague would have the

court replace this circuit’s long-settled precedent, see, e.g.,

Molerio, 749 F.2d at 825; Ellsberg, 709 F.2d at 64; Halkin I, 598

F.2d at 10, with a broader use of privileged evidence under an

approach that considers the “distortion” effects of certain

omitted defenses. See Concurring & Dissenting Op. at 6-7.

Instead of understanding meritorious to mean “meriting a legal

victory,” our concurring and dissenting colleague seems to liken

a meritorious defense to one that is merely potential or

colorable. See Concurring & Dissenting Op. at 5-8. While

suggesting that justice requires the court to withdraw from

proceedings even where such defenses become unavailable, our

colleague overlooks how this circuit’s precedent has

accommodated the interests of both plaintiffs and defendants.

In suggesting that a defendant’s interests require dismissing

actions because of plausible but not demonstrably valid

defenses, our colleague ignores how this would abridge the

rights of plaintiffs and discounts how the fundamental rights of

defendants are protected by dismissing cases when privilege

obscures a valid defense that is likely to cause the trier of fact to

reach an erroneous conclusion, In re United States, 872 F.2d at

476, or upon a legitimate claim of immunity, Ellsberg, 709 F.2d

at 69. This accommodation is hardly “defendant-adverse.” See

Concurring & Dissenting Op. at 5. Faced with the opposite

situation, where a plaintiff has proof of a defendant’s liability

that is inaccessible because of privilege, the courts are powerless

to afford a remedy. And to the extent that our colleague is

concerned that federal service will be burdened unless the court

intervenes, see id. at 6, that concern has already prompted the

court to strike an appropriate balance of interests by segregating

the unprivileged from the privileged materials so a plaintiff may

proceed and by allowing the limited use of privileged materials

by the defendant for purposes of claiming immunity or a valid

defense. See Ellsberg, 709 F.2d at 69.

20

Nor is it clear that the scales tip as our colleague suggests.

The Executive Branch is well positioned to protect the

incentives for federal service: it controls both the power to

invoke the state secrets privilege and the discretion to indemnify

an employee who is found liable for conduct that is taken within

the scope of employment. See 22 C.F.R. § 21.1; see also

Ellsberg, 709 F.2d at 69 n.74. Any non-pecuniary costs that

may not be susceptible to indemnification are outweighed by the

potential costs of a federal service that fails to protect its

employees’ constitutional rights. It bears remembering that the

loss of evidence to the state secrets privilege is to be treated like

the loss of evidence when “a witness ha[s] died.” Ellsberg, 709

F.2d at 64; accord Am.-Arab Anti-Discrimination Comm. v.

Reno, 70 F.3d 1045, 1070 (9th Cir. 1995). The death of a

witness, however, is not an occasion to dismiss complaints on

the basis of speculation about what the lost evidence might have

suggested. Where the United States has sufficient grounds to

invoke the state secrets privilege and decides to invoke it,

allowing the mere prospect of a privileged defense to thwart a

citizen’s efforts to vindicate his or her constitutional rights

would run afoul of the Supreme Court’s caution against

precluding review of constitutional claims, see Webster, 486

U.S. at 603-04, and against broadly interpreting evidentiary

privileges, for “[w]hatever their origins, . . . exceptions to the

demand for every man’s evidence are not lightly created nor

expansively construed, for they are in derogation of the search

for truth,” United States v. Nixon, 418 U.S. 683, 710 (1974).

Consequently, the district court may properly dismiss a

complaint because of the unavailability of a defense when the

district court determines from appropriately tailored in camera

review of the privileged record, Ellsberg, 709 F.2d at 64; see

Reynolds, 345 U.S. at 10, that the truthful state of affairs would

deny a defendant a valid defense that would likely cause a trier

to reach an erroneous result. Because the district court made no

21

finding that the existence of a valid privileged defense for

Huddle precluded the continuation of Horn’s case, its second

ground cannot sustain the dismissal of Horn’s complaint.

C.

The district court further ruled that “the very subject matter

of [Horn’s] action is a state secret,” therefore requiring dismissal

of his complaint. Mem. Op. of July 28, 2004, at 11. In

Reynolds, the Supreme Court acknowledged that there are cases

“where the very subject matter of the action . . . [is] a matter of

state secret.” 345 U.S. at 11 n.26. The court referred to Totten

v. United States, 92 U.S. (2 Otto) 105 (1876), where the Court

affirmed the dismissal of a lawsuit surrounding a secret contract

to perform espionage. In Tenet v. Doe, 544 U.S. 1, 8-9 (2005),

the Supreme Court clarified that Totten, which eliminates

actions that “depend[] upon the existence of [a] secret espionage

relationship,” performs a different function than Reynolds,

which merely affects the evidence available. The Court

explained that Totten’s core concern is with “preventing the

existence of the plaintiff’s relationship with the Government

from being revealed.” Id. at 10. Here, once Defendant II is

dismissed from the case, the United States does not claim that

secret agreements of this sort are implicated.

Horn’s case presents no occasion for using the evidentiary

privilege to eliminate substantive rights from the outset. In the

past, the court has not looked favorably upon broad assertions

by the United States that certain subject matters are off-limits for

judicial review, see In re United States, 872 F.2d at 477,

recognizing that “[d]ismissal of a suit, and the consequent denial

of a forum without giving the plaintiff her day in court, . . . is

indeed draconian,” id.; cf. Webster, 486 U.S. at 603-04. In

Reynolds itself, at the height of the Cold War, the Supreme

Court remanded the FTCA case to proceed without the

privileged materials. See 345 U.S. at 12. Horn’s prima facie

22

case against Huddle relies, subject to the constraints of the state

secrets privilege, upon the cable, the office chatter of Embassy

personnel, and a res ipsa loquitur inference as to Huddle’s

source of information about Horn’s conversation with Sikorra.

Cf. Barwick v. United States, 923 F.2d 885, 886-87 (D.C. Cir.

1991). The national security concerns expressed by the Director

of Central Intelligence in his unclassified declaration — i.e.,

revealing identities of covert officers, locations of facilities,

organization of classified employees, and intelligence sources,

methods and capabilities — are peripheral to what remains of

Horn’s prima facie case. The United States makes no claim that

Horn has forfeited his constitutional rights by virtue of his

overseas assignment with the DEA.

To the extent our concurring and dissenting colleague

doubts that Horn’s case can be litigated without compromising

state secrets, the record does not support the broad statement

that “the few unprivileged facts remaining are so entwined with

privileged matters, and the risk of disclosure of privileged

material so unacceptably high, that the very subject matter of

this action is a state secret.” Concurring & Dissenting Op. at 11.

The declaration of the Director of Central Intelligence rejects the

notion that all of Horn’s lines of inquiry are inextricably

interwoven. Whereas all discussion of intelligence sources,

capabilities, and the like must be protected, the Tenet

Declaration acknowledges that the remaining material — most

notably the redacted cable and the IG interviews with Huddle

and Embassy personnel — “can be segregated . . . at no risk to

U.S. national security.” Tenet Decl. ¶ 33. To dismiss Horn’s

complaint on the broad grounds favored by our colleague would

be to adopt a “heads I win, tails you lose” approach to state

secrets: whenever the plaintiff lacks information about his claim,

the complaint must be dismissed for failure to make out a prima

facie case, but as soon as any information is acquired, it

becomes too risky to introduce the evidence at trial, also

23

necessitating dismissal. As our discussion reveals, neither the

Supreme Court nor this court has adopted such an all-or-nothing

approach.

Because the privileged material and the material comprising

Horn’s prima facie case are of a different ilk, our concurring and

dissenting colleague’s analogy to the law of the Fourth and Fifth

Circuits, see Concurring & Dissenting Op. at 8-9, is inapposite.

In Bareford, for example, the complaint alleged that a defense

contractor had defectively manufactured and designed a military

weapons system, see 973 F.2d at 1140. As the Fifth Circuit

recognized, any trial would be about the operation and defects

of the classified weapons system, which made it facially

impossible not to discuss the classified details of the military

secrets. Id. at 1144. In Fitzgerald v. Penthouse Int’l, Ltd., 776

F.2d 1236 (4th Cir. 1985), a claim of libel required the plaintiff

to establish that he had not, contrary to a report in Penthouse

magazine, published classified materials about experiments with

dolphins that were used to design torpedoes. Fitzgerald needed

to call an expert from the Defense Department in order to

establish that the material was not classified. Id. at 1242.

However, after an invocation of the state secrets privilege, the

Fourth Circuit concluded that the case could not proceed

because allowing testimony about what was not classified would

inevitably allow the inference as to what was classified. See id.

at 1243. Here, there is no claim that any of the unclassified

Embassy gossip borders upon or is suggestive of classified

materials — otherwise, it would not have been declassified and

disclosed by the United States. By contrast, in El-Masri the

Fourth Circuit dealt with sensitive details of the United States’

program of extraordinary rendition for terrorism suspects and

the legality of the very classified program covered by the claim

of privilege, see 479 F.3d at 310-11. Finally, in Farnsworth

Cannon v. Grimes, 635 F.2d 268, 281 (4th Cir. 1980) (en banc)

(per curiam), the Fourth Circuit upheld the dismissal of a

24

contract case because the claim could not be adjudicated without

reference to the organizational structure of a certain Navy

component, which was classified.

In an apparent rush to judgment, our concurring and

dissenting colleague misstates the position of the court as

regards the consequences of state secrets evidence. See

Concurring & Dissenting Op. at 7-8. If the plaintiff cannot

establish a prima facie case, then the case must be dismissed.

Horn, however, can establish a prima facie case without use of

privileged materials. If the defendant proffers a valid defense

that the district court verifies upon its review of state secrets

evidence, then the case must be dismissed. The district court

made no such finding and Huddle has pointed to no such defense

on appeal. If the district court determines that the subject

matter of a case is so sensitive that there is no way it can be

litigated without risking national secrets, then the case must be

dismissed. But the district court has not yet evaluated the case

as it now stands and the Director of Central Intelligence suggests

that further proceedings should be possible.

The court does not take lightly the issues of national

security that Horn’s complaint implicates. But at this juncture,

it is premature to use our shared concern about the conduct of

future proceedings to justify abandoning all attempts to resolve

Horn’s remaining substantive dispute. The district court

analyzed the danger of proceeding to trial with reference to all

of the allegations in Horn’s complaint against both defendants.

Upon removing Defendant II and the privileged portions of the

IG reports and thereby limiting Horn’s claims, the information

that remains is, according to the Director of Central Intelligence,

segregable from the privileged materials such that its disclosure

entails “no risk” to national security. Tenet Decl. ¶ 33.

Although witnesses in the trial proceedings, including Horn, will

likely have had access to some classified materials in the course

25

of their federal employment in addition to the unprivileged

materials that form the basis of Horn’s remaining claim, there is

no basis on this record for a presumption that a witness who has

access to classified materials is unable to testify without

revealing information that he knows cannot lawfully be

disclosed in a public forum. District courts are well-positioned

to resolve such concerns, as this court has recognized in

emphasizing the obligation to disentangle sensitive information

from non-sensitive information. In re United States, 872 F.2d

at 476 (citing Ellsberg, 700 F.2d at 57); see Reynolds, 345 U.S.

at 11. As such, there is no need to usurp this judgment from the

district court as our concurring and dissenting colleague would

prefer, see Concurring & Dissenting Op. at 11. It remains for

the district court on remand to determine what procedures would

be required to safeguard against disclosure of privileged

materials and then to determine whether Horn’s lawsuit can

proceed. Were dismissal required based on the allegations now

before this court — where Horn relies upon unclassified

materials that the United States submits are unrelated to areas of

national security sensitivity and Huddle has proffered no

privileged valid defense — then federal government employees

could unnecessarily be denied an opportunity to enforce their

constitutional rights.

Accordingly, we affirm the dismissal of the complaint as to

Defendant II but, because the grounds specified by the district

court do not warrant dismissal of the complaint as to Huddle, we

reverse and remand the case to the district court with

instructions to reinstate the complaint against him. Nothing in

this opinion forecloses a further opportunity by the United States

to establish that privileged evidence demonstrates a valid

defense for Huddle. Similarly, nothing in this opinion forecloses

a determination by the district court that some of the protective

measures in CIPA, 18 U.S.C. app. III, which applies in criminal

cases, would be appropriate, as Horn urges, so that his case

26

could proceed. See, e.g., In re United States, 872 F.2d at 479-

80; McGehee v. Casey, 718 F.2d 1137, 1149 (D.C. Cir. 1983);

Ellsberg, 709 F.2d at 64. We vacate the district court’s order

dismissing as moot Horn’s motion regarding processing his

secretaries for security clearance, and we have no occasion to

address whether Horn or his counsel have a “need-to-know,” see

Exec. Order No. 13,292, § 61(z), 68 Fed. Reg. 15,315, 15,332

(March 25, 2003), additional classified information.

BROWN, Circuit Judge, concurring and dissenting: I agree

with the majority that the government properly invoked the state

secrets privilege, the privilege applies in a Bivens action, and the

district court properly dismissed Horn’s complaint as to Defen-

dant II.1 But we disagree about the proper legal standard for

determining when application of the privilege requires dismissal.

The majority’s reversal of the district court’s decision pushes

this circuit’s state secrets jurisprudence in a new and troubling

direction — one at odds with all other circuits that have consid-

ered the issue. Because, in my view, the district court reached

the correct conclusion, I respectfully dissent.

I

After the government successfully invoked the state secrets

privilege, the district court dismissed Horn’s complaint on three

independent grounds: (1) because Horn cannot make out a prima

facie case absent the privileged material, (2) because the

privilege deprives the defendants of information required in their

defense, and (3) because “the very subject matter of plaintiff’s

action is a state secret.” Mem. Op. 8. The majority approves

the dismissal of Defendant II, but otherwise rejects the district

court’s conclusions on all three grounds.

As to the district court’s first ground — Horn’s ability to

establish a prima facie case against Huddle absent the privileged

material — I generally agree with the legal standard applied by

the majority. But I am less sanguine than the majority that the

unprivileged facts actually suffice to make a prima facie

1

The majority also properly assumes without deciding the

important question of whether “the Fourth Amendment protects

American citizens abroad,” Maj. Op. 5, because the question is not

squarely presented here. While the district court in an earlier phase of

this case did find the Fourth Amendment applicable, the government

voluntarily dismissed its appeal of that ruling, and the issue was not

litigated or briefed on this appeal.

2

showing. Once the privileged material is removed, Horn is

essentially left with three pieces of circumstantial evidence —

a cable, a table, and Huddle’s apparent lie. I question whether

a reasonable person would seriously entertain the possibility,

based on that evidence alone, that Huddle learned of Horn’s

statement via a wiretap. One wonders if the atmosphere of

government intrigue in this case — an atmosphere carefully

cultivated by Horn and unfortunately only exacerbated by the

government’s invocation of the state secrets privilege — is in

fact doing much of the work in the majority’s determination that

Horn has established a prima facie case on such skimpy evi-

dence. Would a reasonable person really think Horn had

established a prima facie case with the same circumstantial

evidence if he was an OSHA inspector in Hoboken?

A

But while I remain skeptical that Horn has a prima facie

case once the privileged material has been removed, my

fundamental disagreement with the majority relates to the

controlling legal standard applicable to the district court’s

second and third grounds for dismissal. The majority does not

expressly disagree with the district court’s conclusion that, as a

result of the invocation of the privilege, Huddle will be deprived

of information necessary to mount an effective defense. Instead,

relying on Molerio v. FBI, 749 F.2d 815 (D.C. Cir. 1984), and

dicta from Ellsberg v. Mitchell, 709 F.2d 51 (D.C. Cir. 1983),

the majority concludes dismissal is inappropriate unless the

privileged material contains a defense so “dispositive” as to

“require judgment for the defendant.” Maj. Op. 17 & n.4.

To be sure, the privileged defense in Molerio was dis-

positive, and the court dismissed on that basis. But the court in

Molerio merely determined that a dispositive defense is a

sufficient basis for dismissal, not that a privileged defense must

be dispositive for dismissal to be appropriate. See Molerio, 749

3

F.2d at 825. Because Molerio was the paradigmatic “easy case,”

it is unhelpful in establishing the proper standard for harder

cases presenting less than dispositive, but nonetheless meritori-

ous, defenses.

This is one of those harder cases, and the majority has

responded by borrowing Molerio’s description of an extreme

(and therefore easy) case to establish the new baseline for

dismissal. In so doing, the majority relies extensively on

speculative language from Ellsberg about the effect of the state

secrets privilege on privileged defenses. See Maj. Op. 15–20.

Thus, the majority purports to apply “long-settled precedent” in

precluding all but dispositive privileged defenses. Maj. Op. 19.

But as both the majority and dissent in that case recognized,

Ellsberg’s sweeping comments about privileged defenses were

dicta. See Ellsberg, 709 F.2d at 64 (noting that in light of its

disposition, further discussion was not necessary to resolve the

case, but that the court “consider[ed] it prudent to address

briefly some of the problems the trial court will confront on

remand”); id. at 73 (MacKinnon, J., concurring in part and

dissenting in part) (characterizing the part of the Ellsberg

opinion relied on by the majority here as “muddled dicta”

presenting “novel procedures” that “I would be very surprised

if the court on remand even attempted to apply” in light of a

likely alternative resolution of the case); see also Cohens v.

Virginia, 19 U.S. (6 Wheat.) 264, 399 (1821) (“[G]eneral

expressions, in every opinion, are to be taken in connection with

the case in which those expressions are used. If they go beyond

the case, they may be respected, but ought not to control the

judgment in a subsequent suit when the very point is presented

for decision.”).

Ellsberg’s abstract discussion of privileged defenses is only

controlling, therefore, to the extent it is persuasive. As the

majority in Ellsberg itself recognized, the potential for “serious

4

injustice” arises when defenses are compromised by the govern-

ment’s invocation of the state secrets privilege:

Deprived of the ability in practice to adduce the evidence

necessary to mount a defense to the plaintiffs’ prima facie

case, the defendants could be held liable in damages for

what in fact was wholly blameless conduct. Such a result

not only would be patently inequitable, but might have an

unfortunate long-run impact on the recruitment and behav-

ior of government officials.

Ellsberg, 709 F.2d at 69 (footnote omitted). The Ellsberg

majority speculated this “serious injustice” might be ameliorated

by “recent developments” in the doctrine of qualified immunity.

Id. But, as the majority here recognizes, the doctrine of quali-

fied immunity does nothing for Huddle. Maj. Op. 15. We are

thus left with the “serious injustice” identified in Ellsberg,

without the supposed “way out of th[e] dilemma” envisioned by

the Ellsberg majority. Ellsberg, 709 F.2d at 69. Dictum lacks

binding precedential value precisely because abstract musings

often fail to produce fully-considered legal rules. When “we

accept dictum uttered in a previous opinion as if it were binding

law, which governs our subsequent adjudication . . ., we fail to

discharge our responsibility to deliberate on and decide the

question which needs to be decided.” Pierre N. Leval, Judging

Under the Constitution: Dicta About Dicta, 81 N.Y.U. L. REV.

1249, 1250 (2006).

Indeed, perhaps recognizing the potential for “serious

injustice” identified in Ellsberg, no other circuit has adopted the

severe defense standard applied by the majority here. Few state

secrets cases have been resolved on the defense prong. How to

treat privileged defenses is an exceedingly difficult question,

and most cases that have presented defense issues have been

dismissed on other grounds. See, e.g., Bareford v. Gen. Dynam-

5

ics Corp., 973 F.2d 1138, 1143 (5th Cir. 1992). But the few

circuits to address squarely the issue have not applied the

defendant-adverse standard favored by the majority. See, e.g.,

El-Masri v. United States, 479 F.3d 296, 309–10 (4th Cir. 2007)

(dismissing in the alternative on the ground that “the defendants

could not properly defend themselves without using privileged

evidence”); Tenenbaum v. Simonini, 372 F.3d 776, 777 (6th Cir.

2004) (dismissing because “Defendants cannot defend their

conduct with respect to [the plaintiff] without revealing the

privileged information”).

By equating a “valid” defense with a “dispositive” defense,

and noting that “[o]ther circuits have . . . rel[ied] upon Molerio

to adopt the ‘valid defense’ standard,” Maj. Op. 16, the majority

papers over the novelty of the defense standard it is applying.

True, other circuits have referenced the “valid defense” stan-

dard, and cited Molerio in support, but it is not at all clear that

in doing so they interpreted “valid” as meaning “dispositive,” as

opposed to “valid” as meaning simply “meritorious.” See

BLACK’S LAW DICTIONARY 1586 (8th ed. 2004) (defining

“valid” as both “[l]egally sufficient” and “[m]eritorious”).

Indeed, the Sixth Circuit in Tenenbaum — the only circuit

actually to apply a “valid defense” standard — apparently meant

the latter, since in dismissing the case, it stated only that

“Defendants cannot defend their conduct . . . without revealing

the privileged information,” and made no suggestion that any of

the defenses were dispositive. 372 F.3d at 777.2

2

The majority also cites In re United States, 872 F.2d 472, 476

(D.C. Cir. 1989), for its discussion of the “valid defense” standard.

See Maj. Op. 16, 19. The court in In re United States, however, had

no occasion to apply any privileged-defense standard — certainly not

the standard advanced by the majority. See In re United States, 872

F.2d at 482 (D.H. Ginsburg, J., concurring and dissenting) (“Here it

is not at all clear that the Government’s secret defense is dispositive

6

The majority’s privileged-defense standard is troubling both

in its sharp departure from the other circuits and in its potential

effect on public officers. If a government officer accused of

malfeasance has several meritorious — but not sure-fire —

privileged defenses, those defenses are now simply irrelevant.3

The majority also completely ignores the potential for

distortion when valid defenses are excised by invocation of the

privilege. As Judge Phillips noted over a quarter-century ago,

it is “important to keep in mind that by its very nature” the state

secrets privilege “compromises the intrinsic fairness of the

adversary litigation process which has been provided for formal

dispute resolution” — for both plaintiffs and defendants alike.

Farnsworth Cannon, Inc. v. Grimes, 635 F.2d 268, 277 n.2 (4th

Cir.) (Phillips, J., specially concurring and dissenting), maj. op.

rev’d per curiam, id. at 281 (1980) (en banc). When application

of the privilege so “compromises the intrinsic fairness” of a

judicial proceeding — whether because it has removed too much

(or even meritorious under New York law).” (alterations in original

omitted)). In any event, any privileged-defense discussion in In re

United States is irrelevant; unlike here, the government itself was the

defendant in In re United States, and, “[i]n Ellsberg, this court made

clear that a government party does not forfeit a meritorious defense

merely because it would need to rely on privileged materials in order

to assert it.” Id. at 481 (emphasis added).

3

The majority further states that “Huddle has already revealed his

defense — that he learned of Horn’s conversation through Stubbs —

and it is unprivileged.” Maj. Op. 17. Surely the majority cannot mean

to imply that Huddle is limited to only one defense. As the majority

is aware, the district court in a classified portion of its opinion

recounted specific aspects of the privileged material Huddle would

require to mount an effective defense at trial. Mem. Op. 11 (redacted).

None of that material relates to Horn’s disputed conversation with

Stubbs.

7

information from the plaintiff’s case or from the defendant’s

defense, or, as in this case, both — the right solution is not

simply to muddle on, but rather “to withdraw from . . . litigants

their normal right of access to the formal dispute resolution

forum provided by the sovereign.” Id. at 279. To permit a

grossly distorted case — where the court knows the “facts”

being litigated are only a parody of the real facts — to continue

in our courts is not justice, and only invites injustice. See id. at

279 n.5 (“[Dismissal is appropriate] where the judge can sense

that the actual dispute as defined by the issues so far differs from

the dispute that could be litigated while honoring the privilege

as to draw in question the fairness of attempting to apply to the

restricted dispute the legal principles appropriate to resolution

of the actual dispute.”).4

B

By stripping meritorious defenses from Huddle and leaving

gaping holes in Horn’s prima facie case, the invocation of the

4

The majority argues that considering the “‘distortion’ effects of

. . . omitted defenses . . . . abridge[s] the rights of plaintiffs,” Maj. Op.

19, and “thwart[s] a citizen’s efforts to vindicate his or her

constitutional rights,” id. at 20. Of course, that argument begs the

very question that divides us: Do plaintiffs have a “right” to use the

courts to press a case against a defendant when the available “facts”

of that case no longer approximate reality? Ironically, it is the

majority’s unprecedented privileged-defense standard that creates “a

system of conjecture,” Maj. Op. 18, where fact-finders are forced to

invent the missing parts of the story. The majority’s standard, not

mine, “impose[s] a presumption.” Id. I am advocating a case-by-case

assessment of how the privilege has affected the shape of the case

being presented to the fact-finder, not “dismissal of a complaint for

any plausible or colorable defense.” Id. The majority, in contrast, is

effectively establishing a presumption that plaintiffs able to make a

prima facie showing deserve to prevail against defendants relying on

meritorious privileged defenses, unless those defenses are dispositive.

8

privilege so distorts this case that dismissal is necessary. “[T]he

undisclosable scope of privilege lies so completely athwart the

scope of proof relevant to resolution of the issues presented that

litigation constrained by administration of the privilege simply

could not afford the essential fairness of opportunity to both

parties that is a fundamental assumption of the adversary

system.” Id. at 279. Even assuming, however, that the majority

remains indifferent to the distortion caused by the privilege, the

district court’s third ground for dismissal — that the “very

subject matter” of Horn’s action is a state secret — should be

affirmed. The district court expressed concern that state secrets

are “so central to the subject matter of [Horn’s case] that any

attempt to proceed will threaten disclosure of privileged mat-

ters.” Mem. Op. 11–12 (quoting Fitzgerald v. Penthouse Int’l,

Ltd., 776 F.2d 1236, 1241–42 (4th Cir. 1985)). The majority

apparently disagrees, finding “national security concerns . . .

peripheral to what remains of Horn’s prima facie case.” Maj.

Op. 22.

In applying the “very subject matter” ground, other circuits

have focused on the threat of inadvertent disclosure of privi-

leged material posed by further litigation. See Kasza v. Brown-

er, 133 F.3d 1159, 1170 (9th Cir. 1998); Black v. United States,

62 F.3d 1115, 1118 (8th Cir. 1995); Bareford, 973 F.2d at 1143;

Farnsworth Cannon, 635 F.2d at 281 (en banc) (per curiam).

Specifically, courts have considered the extent to which the non-

privileged facts remaining in the case are intertwined with or

surrounded by privileged material. See, e.g., Bareford, 973 F.2d

at 1143 (noting “the practical reality that in the course of

litigation, classified and unclassified information cannot always

be separated”); Fitzgerald, 776 F.2d at 1243 n.11 (explaining

that “the merits of this controversy are inextricably intertwined

with privileged matters”). Courts have expressed special

concern where the plaintiff is in possession of some of the

privileged material. See Fitzgerald, 776 F.2d at 1242 n.8;

9

Farnsworth Cannon, 635 F.2d at 281 (en banc) (per curiam).

Similarly, they have recognized the risk of accidental disclosure

where plaintiffs’ cases depend on testimony from witnesses with

personal knowledge of classified secrets “relevant to the subject

matter of the litigation.” Fitzgerald, 776 F.2d at 1242; accord

Bareford, 973 F.2d at 1143–44. Courts have taken a practical

approach, looking realistically at the “facts necessary to litigate”

a plaintiff’s case, “not merely [those necessary] to discuss it in

general terms.” El-Masri, 479 F.3d at 310–11 (collecting cases).

As the Fourth Circuit has explained, “[t]he controlling inquiry

is not whether the general subject matter of an action can be

described without resort to state secrets. Rather, we must

ascertain whether an action can be litigated without threatening

the disclosure of such state secrets.” Id. at 308.

This court has had no occasion to apply the “very subject

matter” ground. But applying its logic to Horn’s complaint

leads inexorably to the conclusion reached by the district court.

The few remaining unprivileged facts comprising Horn’s prima

facie case are islands surrounded by a sea of privileged material.

This case is no different in that regard than Farnsworth Cannon,

Fitzgerald, Bareford, or El-Masri, except that here the islands

are fewer and smaller.5

Moreover, the majority’s assertion that Horn “is not in

possession of the privileged material” is mystifying. Maj. Op.

5

The majority characterizes those cases as “inapposite,” noting

the centrality of the privileged information to each plaintiff’s case.

Maj. Op. 23–24. But this case is no different — here, the clearly

“sensitive details,” Maj. Op. 23, of Huddle’s ability to conduct or

order a wiretap are plainly central to Horn’s case. And the allegations

in Horn’s complaint necessarily rely on the involvement of Defendant

II; thus, dismissing Defendant II does not alter his centrality to Horn’s

case.

10

9. Horn clearly knows some of the privileged material, which

the majority elsewhere implicitly concedes when it affirms the

district court’s dismissal as to Defendant II, noting “there is no

unprivileged evidence connecting him to Horn’s allegations.”

See Maj. Op. 13. Admittedly, because Horn has never seen the

classified portions of the two agency investigative reports, he

cannot precisely map the division between what portion of the

information he knows is covered by the privilege, and what

isn’t. But that only exacerbates the potential for inadvertent

disclosure, presenting the same problem identified by the Fourth

Circuit in Farnsworth Cannon:

[The ex parte] affidavit [delineating the privileged informa-

tion] has not been seen by [plaintiff’s] counsel, and without

some disclosure of the affidavit to counsel, the trial lawyers

would remain unaware of the scope of exclusion of infor-

mation determined to be state secrets. Information within

the possession of the parties on the periphery of the sup-

pression order would not readily be recognized by counsel,

unaware of the specific contents of the affidavit, as being

secret or as clearly having been suppressed by the general

order of the district court. In an attempt to make out a

prima facie case during an actual trial, the plaintiff and its

lawyers would have every incentive to probe as close to the

core secrets as the trial judge would permit. Such probing

in open court would inevitably be revealing.

Farnsworth Cannon, 635 F.2d at 281 (en banc) (per curiam).

Likewise, the majority suggests the unavailability of the

privileged IG reports is of little consequence to Horn’s case,

because “there would be no barrier to his calling the [reports’]

affiants as witnesses in order to testify to . . . unclassified

matters.” Maj. Op. 14. The majority is unconcerned that

witnesses with relevant knowledge who might be called to

11

testify are also sure to possess privileged information relevant

to Horn’s case. Because the demarcation between the privileged

and unprivileged information is by no means intuitive and, like

Horn, the witnesses themselves would not be privy to the exact

scope of the privilege, “the danger that witnesses might divulge

some privileged material during [direct and] cross-examination

is great.” Bareford, 973 F.2d at 1144.

All of these considerations support the district court’s third

ground for dismissal. The majority comments that, at this stage

of the proceedings, “Horn need not plead the facts sufficient to

prove his allegations and evidence that will ultimately be used

at trial.” Maj. Op. 14. That is true; however, the government’s

invocation of the state secrets privilege in this case requires us

to frankly consider whether Horn’s case “can be litigated

without threatening the disclosure of . . . state secrets.” El-

Masri, 479 F.3d at 308. Relying on the same case- and fact-

specific approach favored by every other circuit that has

considered the issue, and based on my review of the entire

record in this case, I would find the risk of disclosure too great.

Here, the few unprivileged facts remaining are so entwined with

privileged matters, and the risk of disclosure of privileged

material so unacceptably high, that the very subject matter of

this action is a state secret.6

6

The majority characterizes the declaration of the Director of

Central Intelligence as “reject[ing] the notion that all of Horn’s lines

of inquiry are inextricably interwoven.” Maj. Op. 22. But the

declaration, which in the portion cited explains only that some

potentially relevant evidence presents “no risk to U.S. national

security” once segregated, says absolutely nothing about whether

attempting to litigate a specific case involving that evidence might

present an unacceptably high risk of disclosure. To state that specific

pieces of evidence are unprivileged is obviously not tantamount to

stating that any litigation involving that evidence could never run an

unacceptable risk of disclosure of state secrets. The majority’s attempt

12

II

This circuit’s state secrets cases have predominantly turned

on the first of the three grounds relied on by the district court in

dismissing Horn’s case.7 The majority’s disposition requires it

to address all three grounds, but in doing so it gives short shrift

to the important issues of distortion and disclosure. In my view,

both of these issues are most effectively considered when

analyzing whether the “very subject matter” of a case is a state

secret. Thus, I would analyze the effect of invocation of the

state secrets privilege as follows: First, can the plaintiff establish

a prima facie case absent the privileged material? Second, if so,

is a dispositive (i.e., Molerio-type) defense barred by the

invocation of the privilege? Third, is the very subject matter of

the case a state secret? In evaluating this final prong, I would

consider the issues of distortion and disclosure: Has removal of

facts relevant to the plaintiff’s prima facie case or the defen-

dant’s defense, or both, so distorted the case that the litigation

no longer even approximates reality? And does further litigation

threaten inadvertent disclosure?

While I find this framework helpful, another might work

equally well. The problem with the majority’s approach is its

elevation of the rhetoric of perfect justice over the realities of

distortion and disclosure. The question is not whether we like

or approve of the state secrets privilege. It exists. The question

is how the existence of the privilege, properly invoked, reshapes

the case. In reversing the district court’s conclusion that the

to wrest the latter implication from the declaration far exceeds that

document’s purpose and scope.

7

Molerio turned on the second ground, but, as noted, Molerio was

an easy case presenting a clearly determinative privileged defense.

See 749 F.2d at 825.

13

very subject matter of Horn’s case is a state secret, the majority

rejects the standard consistently used by other federal courts and

fails to offer any alternative.8 To make matters worse, the

majority announces a new and troublingly high threshold for

dismissal when invocation of the privilege compromises the

defenses of government officials.

I respectfully dissent.

8

The majority comments “there is no need to usurp . . . from the

district court” the judgment of whether the very subject matter of

Horn’s case is a state secret. Maj. Op. 25. Yet that is exactly what the

majority has done, explaining that “the district court has not yet

evaluated the case as it now stands.” Maj. Op. 24 (emphasis added).

But the case “as it now stands” is no different than the case the district

court dismissed except the majority has put Huddle back in. In

dismissing Horn’s entire case, the district court certainly considered

whether an action against Huddle alone risked disclosure of state

secrets, stating that “[a]t the heart of plaintiff’s claim is . . .

information that is at the center of the state secrets privilege” and that

“any attempt to proceed will threaten disclosure of privileged

matters.” Mem. Op. 12 (emphases added) (citation omitted).