Stehney v. Perry

Opinions of the United

1996 Decisions States Court of Appeals

for the Third Circuit

12-3-1996

Stehney v. Perry

Precedential or Non-Precedential:

Docket 96-5036

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 96-5036

___________

ANN K. STEHNEY,

Appellant

v.

WILLIAM J. PERRY, Secretary of Defense;

J. MICHAEL McCONNELL, Director,

National Security Agency/Central Security Service;

LEE HANNA, Former Chief of Management Services,

National Security Agency/Central Security Service;

JEANNE ZIMMER, Chief of Management Services,

National Security Agency/Central Security Service;

THE INSTITUTE FOR DEFENSE ANALYSES,

CENTER FOR COMMUNICATIONS RESEARCH, a Delaware Corporation;

DAVID M. GOLDSCHMIDT, Director,

The Institute for Defense Analyses,

Center for Communications Research

_______________________________________________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Action No. 94-cv-06306)

___________________

Argued August 8, 1996

Before: MANSMANN and SCIRICA, Circuit Judges

and DIAMOND, District Judge*

(Filed December 3, 1996)

*The Honorable Gustave Diamond, United States District Judge for

the Western District of Pennsylvania, sitting by designation.

STEPHEN Z. CHERTKOF, ESQUIRE (ARGUED)

Kator, Scott & Heller

1275 K Street, N.W.

Washington, D.C. 20005

FRANK ASKIN, ESQUIRE

Constitutional Litigation Clinic

Rutgers Law School

15 Washington Street

Newark, New Jersey 07102

Attorneys for Appellant

FREDDI LIPSTEIN, ESQUIRE (ARGUED)

BARBARA L. HERWIG, ESQUIRE

United States Department of Justice

Appellate Staff, Civil Division, Room 3343

10th & Pennsylvania Avenue, N.W.,

Washington, D.C. 20530-0001

Attorneys for the Federal Appellees

KEITH P. JONES, ESQUIRE (ARGUED)

Hill Wallack

202 Carnegie Center

Princeton, New Jersey 08543-5226

Attorney for Appellees,

The Institute for Defense Analyses

and David M. Goldschmidt

__________________

OPINION OF THE COURT

__________________

SCIRICA, Circuit Judge.

The National Security Agency revoked Ann Stehney's

security clearance after she refused to submit to a polygraph

examination. As a result, the Institute for Defense Analyses

terminated her employment. Alleging constitutional and statutory

violations, Stehney sought a writ of mandamus and other

appropriate relief. The district court dismissed her suit under

Fed. R. Civ. P. 12(b)(1) and 12(b)(6) and Stehney now appeals.

I. Facts and Procedural History

Ann Stehney is a mathematician. In l982, she left a

tenured position at Wellesley College to work for the Institute

for Defense Analyses at the Center for Communications Research in

Princeton, New Jersey. The Institute is a private think tank

that conducts cryptological research -- the making and breaking

of secret codes -- as a contractor for the National Security

Agency, an agency within the Department of Defense that gathers

and protects intelligence information related to national

security. To conduct this research, Institute employees like

Stehney require access to classified information. Before

granting access, NSA conducts a thorough background investigation

of each person and makes "an overall common sense determination."

DCID 1/14, Annex A. The NSA background investigation includes a

review of personal history, criminal, financial and medical

records, and at least one interview. NSA must ensure that access

to classified information is "clearly consistent with the

national security," and "any doubt concerning a person's

continued eligibility must be resolved in favor of the national

security." NSA/CSS Reg. 122-06.

In 1982 NSA investigated Stehney and granted her a

security clearance. NSA is authorized by statute and regulations

to use polygraph examinations as part of its investigations, see29 U.S.C.

§ 2006(b) and DCID 1/14 Annex A, and since 1953 has

used polygraphs in all investigations of NSA employees. Dep't.

of Defense, The Accuracy and Utility of Polygraph Testing 11

(1984). But in 1982 when Stehney was hired by the Institute,

NSA did not ask her to take a polygraph examination because it

believed that requiring polygraph examinations might impede

recruitment by NSA contractors. Shortly after Stehney was hired,

the Department of Defense changed this policy and authorized use

of polygraph examinations for all persons with access to

classified information, including contractor employees.

In 1989, Stehney signed a Contractor Employee Advisory

Handout informing her that she was "subject to an aperiodic

review" of her security clearance, that review would be conducted

with the aid of a polygraph examination, and that "[f]ailure to

consent to an aperiodic polygraph examination may result in

denial of continued access" to classified information.

In 1992, NSA asked Stehney to submit to a polygraph

examination. Stehney refused because she believes polygraph

examinations are scientifically unsound and inherently

unreliable. NSA revoked Stehney's security clearance because she

refused to take the polygraph examination. Shortly thereafter,

the Institute terminated Stehney's employment because she no

longer possessed a security clearance.

After exhausting administrative remedies, Stehney filed

suit in the United States District Court for the District of New

Jersey against Secretary of Defense William J. Perry, two current

and one former NSA administrators, the Institute for Defense

Analyses, and its director David Goldschmidt. Stehney's

complaint alleged that: NSA failed to follow its binding agency

regulations during the security clearance revocation process

(Count 1); NSA deprived her of a constitutionally protected

interest without due process of law (Count 2); NSA's requirement

that she submit to a polygraph examination violated the Fourth

Amendment (Count 3); NSA's policy of exempting certain

mathematicians from the polygraph requirement denied her equal

protection under the law (Count 4); NSA's and the Institute's

policies requiring polygraph examinations violated New Jersey

employment law (Count 5); and the Institute's failure to assist

Stehney in securing an exemption from the polygraph requirement

in the same manner it assisted similarly situated male employees

violated New Jersey anti-discrimination law (Count 6). Stehney

sought a writ of mandamus and other appropriate relief to require

NSA to reinstate her clearance or reconsider its revocation and

to require the Institute to reinstate her employment.

The district court dismissed Count 1 under Fed. R. Civ.

P. 12(b)(1) because Stehney lacked standing, her suit was barred

by the political question doctrine and by sovereign immunity, and

because she had not met the requirements for a writ of mandamus

under 28 U.S.C. § 1361. The district court dismissed Stehney's

constitutional claims in Counts 2, 3, and 4 under Fed. R. Civ. P.

12(b)(6) for failure to state a claim for which relief can be

granted. The court dismissed Count 5 because her state law claim

was preempted by federal law and declined to exercise

supplemental jurisdiction over Count 6 because all federal claims

had been dismissed. Stehney v. Perry, 907 F. Supp. 806, (D.N.J.

1995). Stehney now appeals the dismissal of Counts 1, 2, 4, 5,

and 6.

II. Jurisdiction and Standard of Review

We have jurisdiction under 28 U.S.C. § 1291. Although

we typically review mandamus decisions for abuse of discretion,

we review non-discretionary elements de novo. See Arnold v. BLaST

Intermediate Unit 17, 843 F.2d 122 (3d Cir. 1988). The remaining

issues on appeal are subject to plenary review. Hutchins v.

I.R.S., 67 F.3d 40, 42 (3d Cir. 1995) (dismissal for standing

subject to plenary review); State of New Jersey v. United States,

91 F.3d 463, 466 (3d Cir. 1996) (dismissal of political question

and dismissal pursuant to Fed. R. Civ. P. 12(b)(6) subject to

plenary review); Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690,

694 (3d Cir. 1996) (dismissal for sovereign immunity subject to

plenary review); Coleman v. Kaye, 87 F.3d 1491, 1497 (3d Cir.

1996) (jurisdiction questions subject to plenary review); Susan

N. v. Wilson School Dist., 70 F.3d 751, 763 (3d Cir. 1995)

(dismissal for preemption subject to plenary review).

III. Threshold Issues

A. Standing

The district court dismissed Stehney's claim that NSA

failed to follow its regulations in revoking her security

clearance because it found that she lacked standing. Because

Stehney was no longer employed at the Institute, the district

court observed she no longer possessed the "need to know"

classified information, a prerequisite for security clearance.

Nor did the district court believe the Institute was under an

obligation to rehire Stehney even if her security clearance were

restored. In these circumstances, the district court concluded

her claim was based on speculation "about what a third-party

might do in hypothetical future circumstances," and therefore

insufficient to establish standing and to warrant an effective

remedy. Stehney, 907 F. Supp. 806, 815-16. We disagree.

In Greene v. McElroy, 360 U.S. 474 (1959), an employee

was dismissed from a private company because of the revocation of

his government security clearance. The Supreme Court found the

plaintiff had standing to challenge the security clearance

decision: "We note our agreement . . . that petitioner has

standing to bring this suit. . . . Respondents' actions, directed

at petitioner as an individual, caused substantial injuries, and

were they the subject of a suit between private persons, they

could be attacked as an invasion of a legally protected right to

be free from arbitrary interference in private contractual

relationships." Greene v. McElroy, 360 U.S. at 493 n.22

(citations omitted).

Greene is factually indistinguishable from this case.

Stehney too has suffered a substantial injury -- loss of her

employment. She too was fired because of the government's

allegedly arbitrary interference in her private contractual

relationship with the Institute. Of course, we recognize that

Greene was decided in 1959 and since then, the Supreme Court has

clarified the test for standing. We will look, therefore, at the

recently articulated standard.

The Supreme Court established a three-part test for

Article III standing in Valley Forge Christian College v.

Americans United for Separation of Church and State, Inc., 454

U.S. 464 (1982): "Art. III requires the party who invokes the

court's authority to show that he personally has suffered some

actual or threatened injury as a result of the putatively illegal

conduct of the defendant, and that the injury fairly can be

traced to the challenged action and is likely to be redressed by

a favorable decision." Id. at 472 (internal quotations and

citations omitted). See also Allen v. Wright, 468 U.S. 737

(1984) (applying Valley Forge test); Schering Corp. v. Food and

Drug Admin., 51 F.3d 390, 395 (3d Cir.) (same), cert. denied, 116

S. Ct. 274 (1995).

The current standing test also includes non-

constitutional elements. As the Court noted: "Even when a case

falls within these constitutional boundaries, a plaintiff may

still lack standing under the prudential principles by which the

judiciary seeks to avoid deciding questions of broad social

import where no individual rights would be vindicated and to

limit access to the federal courts to those litigants best suited

to assert a particular claim." Gladstone, Realtors v. Village of

Bellwood, 441 U.S. 91, 99 (1979). These non-constitutional

prudential considerations "require that: (1) a litigant assert

his [or her] own legal interests rather than those of third

parties; (2) courts refrain from adjudicating abstract questions

of wide public significance which amount to generalized

grievances; and (3) a litigant demonstrate that her interests are

arguably within the zone of interests intended to be protected by

the statute, rule, or constitutional provision on which the claim

is based." Wheeler v. Travelers Ins. Co., 22 F.3d 534, 538 (3d

Cir. 1994) (internal citations and quotations omitted; citing and

quoting from Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804

(1985); Warth v. Seldin, 422 U.S. 490, 499-500 (1975); and Valley

Forge Christian College v. Americans United for Separation of

Church and State, Inc., 454 U.S. 464, 475 (1982)).

Application of these standards demonstrates that

Stehney possesses standing. Stehney's loss of her security

clearance and job, an alleged result of NSA's revocation of her

security clearance in disregard of agency regulations and her

rights to due process and equal protection, constitutes

sufficient injury for standing purposes and can be traced to

defendants' conduct. See Greene v. McElroy, 360 U.S. 474, 493

n.22 (1959) (plaintiff who lost private sector job when

government revoked his security clearance has standing to bring

suit against government alleging due process violations in

revocation process; government's actions were "directed at"

plaintiff and "caused substantial injury"). Her injury is also

likely to be redressed by a favorable decision, because NSA would

undoubtedly conduct a new review of Stehney's clearance if

ordered to do so.

Stehney has also satisfied the non-Article III

prudential standing requirements. She is asserting her own

rights and not those of a third party. Violation of

constitutional and regulatory rights is not an "abstract" or

"generalized grievance." Finally, as the target of NSA

regulatory action, Stehney's interests fall within the zone of

interests protected by the constitutional and regulatory

provisions on which her case is based.

Moreover, the Supreme Court and lower federal courts

have on several occasions allowed private sector and government

employees to bring suit against the government for claims arising

from the security clearance process. See, e.g., Cafeteria and

Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S.

886 (1961); Dorfmont v. Brown, 913 F.2d 1399 (9th Cir. 1990),

cert. denied, 499 U.S. 905 (1991); Dubbs v. C.I.A., 866 F.2d 1114

(9th Cir. 1989); Chesna v. United States Dept. of Defense, 850 F.

Supp. 110 (D. Conn. 1994). Like these plaintiffs, Stehney

asserts NSA violated her constitutional rights and failed to

follow its own regulations in revoking her clearance. She is

entitled to an adjudication of her claims on the merits. For

these reasons, we hold that Stehney has standing.

B. Political Question Doctrine

Even if Stehney possessed standing, the district court

found her mandamus claim raised non-justiciable political

questions. Stehney, 907 F. Supp. at 816.

In Department of Navy v. Egan, 484 U.S. 518, 526-29

(1988), a civilian employee of the Navy was denied a security

clearance. The question presented was whether the Merits System

Protection Board, a body that reviews Civil Service employment

decisions, had statutory authority to review the substance of the

underlying decision to revoke the security clearance. The

Supreme Court held that it did not. "The grant of a security

clearance to a particular employee, a sensitive and inherently

discretionary judgment call, is committed by law to the

appropriate agency of the Executive Branch." Id. at 527. "The

President, after all, is the 'Commander in Chief of the Army and

Navy of the United States.' U.S. Const., Art. II, §2. His

authority to classify and control access to information bearing

on national security and to determine whether an individual is

sufficiently trustworthy to occupy a position in the Executive

Branch that will give that person access to such information

flows primarily from this constitutional investment of power in

the President and exists quite apart from any explicit

congressional grant. . . ." Id. at 529-30 (citations omitted).

The Court recognized that review of security clearance decisions

raises problems of institutional competence. "Certainly, it is

not reasonably possible for an outside nonexpert body to review

the substance of such a judgment and to decide whether the agency

should have been able to make the necessary affirmative

prediction with confidence. Nor can such a body determine what

constitutes an acceptable margin of error in assessing the

potential risk." Id. at 529.

While Egan held only that the Merits System Protection

Board lacked the competence and authority to review security

clearance decisions under its authorizing statute, the courts of

appeals have consistently held that under Egan, the federal

courts may not review security clearance decisions on the merits.

See Brazil v. U.S. Dept. of Navy, 66 F.3d 193, 197 (9th Cir.

1995) (no judicial review of merits of security clearance

decisions under Title VII), cert.denied, 116 S. Ct. 1317 (1996);

Becerra v. Dalton, 94 F.3d 145 (4th Cir. 1996) (same); Guillot v.

Garrett, 970 F.2d 1320, 1325 (4th Cir. 1992) (no judicial review

of the merits of security clearance decisions under the

Rehabilitation Act of 1973); Dorfmont v. Brown, 913 F.2d 1399

(9th Cir. 1990) (no judicial review of merits of security

clearance decisions); Jamil v. Secretary, Dept. of Defense, 910

F.2d 1203, 1206 (4th Cir. 1990) (same); Hill v. Department of Air

Force, 844 F.2d 1407, 1413 (10th Cir.) (same), cert. denied, 488

U.S. 825 (1988). These decisions are based on grounds of

institutional competence, separation of powers and deference to

the Executive on national security matters. Thus, the federal

courts may not "second guess" the lawful decision of an agency

like NSA to terminate a person's access to classified

information.

The district court held that Egan supported the

conclusion that there was "a textually demonstrable

constitutional commitment" of the issue of access to classified

information to the Executive Branch in Art. II of the United

States Constitution and that judicial review of these decisions

violated the separation of powers. On this basis, the court

declined to adjudicate Stehney's claims. Stehney, 907 F. Supp.

at 816-17 (citing Baker v. Carr, 369 U.S. 186, 217 (1962)). If

Stehney had asked for review of the merits of an executive branch

decision to grant or revoke a security clearance, we would agree.

But not all claims arising from security clearance revocations

violate separation of powers or involve political questions.

Since Egan, the Supreme Court and several courts of appeals have

held the federal courts have jurisdiction to review

constitutional claims arising from the clearance revocation

process. Webster v. Doe, 486 U.S. 592, 603-04 (1988); Dorfmont

v. Brown, 913 F.2d 1399, 1402 (9th Cir. 1990); Jamil v.

Secretary, Dept. of Defense, 910 F.2d 1203, 1209 (4th Cir. 1990);

Dubbs. v. C.I.A., 866 F.2d 1114, 1120 (9th Cir. 1989); National

Fed'n of Fed. Employees v. Greenberg, 983 F.2d 286, 289-90 (D.C.

Cir. 1993). The courts also have power to review whether an

agency followed its own regulations and procedures during the

revocation process. Service v. Dulles, 354 U.S. 363 (1957);

Sampson v. Murray, 415 U.S. 61 (1974); Doe v. Casey, 796 F.2d

1508 (D.C. Cir. 1986), aff'd in part and rev'd in part, Webster

v. Doe, 486 U.S. 592 (1988) ; Jamil v. Secretary, Dept. of

Defense, 910 F.2d 1203, 1208; Hill v. Department of Air Force,

844 F.2d 1407, 1412 (10th Cir. 1988); Drumheller v. Department of

Army, 49 F.3d 1566, 1570-73 (Fed. Cir. 1995). See also Webster v.

Doe, 486 U.S. 592, 602 n.7; Dubbs v. C.I.A., 866 F.2d 1114, 1121

n.9.

Stehney has not asked for a review of the merits of

NSA's revocation decision. Rather, she asserts NSA violated her

constitutional and regulatory rights in revoking her clearance.

Therefore, we cannot agree with the district court that the

political question doctrine precludes review of her claims.

Accordingly, to the extent that Stehney seeks review of whether

NSA complied with its own regulations or violated her

constitutional rights, we believe she presents a justiciable

claim.

C. Sovereign Immunity

The district court also found that the United States

had not consented to be sued for failure to follow Defense

Department or NSA security-clearance regulations and, therefore,

Stehney was barred from bringing suit by the doctrine of

sovereign immunity. Stehney, 907 F. Supp. at 819-20. But in

Service v. Dulles, 354 U.S. 363 (1957), the Supreme Court held

that the government could be sued for failure to follow its own

regulations. Similarly, in Webster v. Doe, 486 U.S. 592, 603-05

(1988), the court held that federal courts had jurisdiction over

constitutional claims brought by a CIA ex-employee discharged for

security reasons.

It is true that "[a]bsent a waiver, sovereign immunity

shields the Federal Government and its agencies from suit."

F.D.I.C. v. Meyer, 510 U.S. 471 (1994) (citing Loeffler v. Frank,

486 U.S. 549, 554 (1988) and Federal Housing Admin., Region No. 4

v. Burr, 309 U.S. 242, 244 (1940). But the Administrative

Procedure Act, 5 U.S.C. §§ 701-706, contains a waiver of

sovereign immunity applicable to this case. Section 702 provides

in part:

A person suffering legal wrong because of

agency action, or adversely affected or

aggrieved by an agency action within the

meaning of a relevant statute, is entitled to

judicial relief thereof. An action in a

court of the United States seeking relief

other than money damages and stating a claim

that an agency or an officer or employee

thereof acted or failed to act in an official

capacity or under color of legal authority

shall not be dismissed nor relief therein be

denied on the ground that it is against the

United States or that the United States is an

indispensable party. The United States may

be named as a defendant in any such action,

and a judgment or decree or decree may be

entered against the United States.

Stehney's claim in count 1 falls within the scope of § 702

because she seeks non-monetary relief -- a review of her access

to secured information -- for a legal wrong caused by agency

action. The district court disagreed because it believed that 5

U.S.C. § 701(a) renders § 702 inapplicable in this case. Section

701(a) provides:

This chapter applies, according to the

provisions thereof, except to the extent that

--

(1) statutes preclude judicial review; or

(2) agency action is committed to agency

discretion by law.

The district court held that under § 701(a)(1), a statute, 50

U.S.C. § 835, precluded judicial review. Stehney, 907 F. Supp.

at 820. It is true that § 835 shields NSA employment decisions,

including security clearance decisions affecting persons

"employed in, or detailed or assigned to" the NSA, from APA

challenge. Doe v. Cheney, 885 F.2d 898, 904 (D.C. Cir. 1989); 50

U.S.C. § 831. But Stehney was employed in the private sector by

an NSA contractor, and was not "employed in, or detailed or

assigned to" NSA. Thus, § 835 is not applicable. If Congress

intended to shield security clearance decisions affecting NSA

contractor employees from APA review, it would have used language

to that effect. See Pub.L. 100-180 § 1121 (d) (statute

authorizing Department of Defense to conduct polygraph

examinations as part of counter-intelligence program

distinguishes between a "person employed by or assigned or

detailed to the National Security Agency" and "an employee of a

contractor of the National Security Agency").

The district court also held that under § 701(a)(2),

NSA security clearance decisions are "committed to agency

discretion by law," and are not reviewable. Stehney, 907 F.

Supp. at 820. But whether or not security clearance decisions

are committed to NSA's discretion, the agency must still follow

its own regulations and may be sued for failure to do so.

Service v. Dulles, 354 U.S. 363, 371-73 (1957) (though statute

granted agency "absolute discretion" regarding employee discharge

decisions, agency must still comply with its own regulations, and

court has jurisdiction to consider claims that it did not do so;

claim not barred by sovereign immunity); Accardi v. Shaughnessy,

347 U.S. 260, 268 (1954) (though government board has discretion

to make deportation decisions, board must still follow its own

regulations governing exercise of its discretion; claim not

barred by sovereign immunity); Sampson v. Murray, 415 U.S. 61, 71

(1974) (citing with approval ruling of Service v. Dulles); Doe v.

Casey, 796 F.2d 1508, 1519 (D.C. Cir. 1986) (agency subject to

suit for failing to follow its own regulations), aff'd in part

and rev'd in part on other grounds, Webster, 486 U.S. 592 (1988);

Hondros v. United States Civil Serv. Comm'n, 720 F.2d 278, 293

(3d Cir. 1983) (§ 701(a)(2) does not prohibit judicial review of

agency compliance with statutes or regulations). See alsoWebster v. Doe,

486 U.S. 592, 602 n.7.

Nor does § 701(a)(2) preclude judicial review of

constitutional challenges to an agency's exercise of discretion.

Webster v. Doe, 486 U.S. 592 (1988); Hondros, 720 F.2d at 293.

In Webster v. Doe, the Supreme Court held that even if a statute

grants an agency absolute discretion precluding judicial review

of the merits of agency decisions, the federal courts may still

consider constitutional challenges arising from the exercise of

discretion, at least absent clear congressional intent to

preclude such review. The court noted that this "heightened

showing" is required "to avoid the 'serious constitutional

question' that would arise if a federal statute were construed to

deny any judicial forum for a colorable constitutional claim."

Webster, 486 U.S. at 603. Since there is no statute expressly

precluding judicial review of colorable constitutional claims

arising from NSA's security clearance procedure, sovereign

immunity does not preclude judicial review of Stehney's

constitutional claims. For these reasons, count 1 is not barred

by sovereign immunity.

IV. The Merits

Although Stehney has standing and her claims are not

barred by sovereign immunity or the political question doctrine,

we will affirm the dismissal of Stehney's claims on the merits.

A. Count 1: Denial of Mandamus Relief

The district court ruled that even if Stehney possessed

standing and her count 1 claim were not barred by the political

question or sovereign immunity doctrines, it could not grant an

injunction in the nature of mandamus under 28 U.S.C. § 1361. "It

is not disputed that the remedy of mandamus is a drastic one, to

be invoked only in extraordinary situations." Allied Chem. Corp.

v. Daiflon, Inc., 449 U.S. 33, 34 (1980).

Stehney could have challenged NSA's alleged violations

of her constitutional rights or NSA's failure to follow its own

regulations under the Administrative Procedure Act. See, e.g.,

Webster v. Doe, 486 U.S. 592, 603-04 (1988); Dubbs v. C.I.A., 866

F.2d 1114 (9th Cir. 1989); Mangino v. Department of Army, 818 F.

Supp. 1432, 1438 (D. Kan. 1993); 5 U.S.C. § 706(2). Since this

alternative was available to Stehney, grant of a writ of mandamus

would be improper.

B. Count 1: NSA's Compliance with Regulations

Even if Stehney had properly framed her claim that NSA

failed to comply with its own regulations as a suit under the

Administrative Procedure Act, we would affirm dismissal of count

1 under Fed. R. Civ. P. 12(b)(6) because she alleges no facts

constituting a failure to follow the regulations.

Stehney alleges, and we accept as true for the purposes

of this appeal, that NSA revoked her security clearance solely

because she refused to take a polygraph examination in violation

of two specific agency regulations: DCID 1/14 §§ 5 and 12. DCID

1/14 § 5 provides:

Criteria for security approval of an

individual on a need-to-know basis for access

to SCI follow:

a. The individual must be stable; trustworthy;

reliable; of excellent character, judgment,

and discretion; and of unquestioned loyalty

to the United States.

b. The individual requiring access to SCI must

also be a US citizen.

c. The individual's immediate family must also

be U.S. citizens. . . .

d. Members of the individual's immediate family

and any other persons to whom he or she is

bound by affection or obligation should

neither be subject to physical, mental, or

other forms of duress by a foreign power or

by persons who may be or have been engaged in

criminal activity, nor advocate the use of

force or violence to overthrow the Government

of the United States or the alteration of the

form of Government of the United States by

unconstitutional means.

Stehney asserts NSA failed to comply with § 5 because it revoked

her security clearance for failure to take a polygraph

examination, not because she failed to meet the criteria for

access to classified information enumerated in the regulation.

Stehney also contends NSA violated DCID 1/14 § 12,

which provides in part:

When all other information developed on an

individual is favorable, a minor investigative

requirement that has not been met should not

preclude favorable adjudication. . . . The

ultimate determination of whether the granting of

access is clearly consistent with the interests of

national security will be an overall common sense

determination based on all available information.

Stehney asserts that § 12 requires NSA to make determinations on

a "whole person" standard, which precludes NSA from revoking a

security clearance solely because one investigative requirement -

- submission to a polygraph examination -- was not met.

DCID 1/14 §§ 5 and 12 must be read in context with DCID

1/14 as a whole and in conjunction with other relevant Department

of Defense and NSA security clearance process and polygraph

regulations, which establish a detailed and coherent scheme for

regulating access to classified information. DCID 1/14 §§ 7(e)

and 8(d) authorize, and NSA/CSS Reg. No. 122-06 § VI(10)

requires, the use of polygraph examinations as part of the

security clearance background investigation process. DCID 1/14

Annex A provides, in part:

Failure to Cooperate: Failure to provide

required security forms, releases, and other

data or refusing to undergo required security

processing or medical or psychological

testing will normally result in a denial,

suspension, or revocation of access.

NSA/CSS Reg. No. 122-06 provides, in part:

Refusal to consent to, or unsatisfactory

completion or evaluation of any aspect of the

programs and procedures listed in Section VI,

when implemented as a requirement for

continued access, may result in adverse

personnel/administrative actions such as

denial of continued access to NSA/CSS

protected information and spaces, limitations

or denial of additional accesses and/or

security courier privileges, denials of

TDY/PCS assignment, and/or termination of

employment.

DoD Reg. 5210.48-R, Ch. 1(A)(5) states, in part:

Persons who refuse to take a polygraph

examination in connection with determining

their continued eligibility for access . . .

may be denied access, employment, assignment,

or detail. . . .

These regulations establish that DCID 1/14 §§ 5 and 12

notwithstanding, refusal to take a polygraph examination

constitutes sufficient grounds for revocation of a security

clearance. For these reasons, we cannot agree that NSA's actions

violated the agency's own regulations. Stehney has not stated a

claim in count 1 for which relief may be granted, and the count

was properly dismissed.

C. Count 2: Due Process

Stehney contends NSA deprived her of a constitutionally

protected interest without due process of law. Finding she had

no protected property or liberty interest, the district court

also ruled that in any event, Stehney had received all the

process that was due. Stehney, 907 F. Supp. 819-21.

In Department of Navy v. Egan, 484 U.S. 518 (1988), the

Supreme Court stated that "it should be obvious that no one has a

'right' to a security clearance." Id. at 528. Since that time,

every court of appeals which has addressed the issue has ruled

that a person has no constitutionally protected liberty or

property interest in a security clearance or a job requiring a

security clearance. Jones v. Department of Navy, 978 F.2d 1223,

1225-26 (Fed. Cir. 1992); Dorfmont v. Brown, 913 F.2d 1399, 1403-

04 (9th Cir. 1990); Jamil, 910 F.2d 1203 (4th Cir. 1990); Doe v.

Cheney, 885 F.2d 898, 909-10 (D.C. Cir. 1989); Hill v. Department

of Air Force, 844 F.2d 1407, 1411 (10th Cir. 1988).

But even if Stehney possessed a constitutionally

protected liberty or property interest, the procedure used to

revoke Stehney's security clearance was sufficient to satisfy due

process. At least for that reason, her due process count was

properly dismissed.

In her complaint, Stehney asserts NSA denied her due

process by failing to allow her to confront witnesses against

her; failing to provide her with information collected during her

1989 reinvestigation; and denying her the opportunity to present

live testimony at a hearing. When measured against her claim

that her security clearance was revoked solely because she failed

to submit to the polygraph examination, these allegations cannot

constitute a denial of due process. The right to confront live

witnesses, review information from prior investigations, or to

present live testimony would have not have improved the fairness

of the revocation process. Stehney received advanced notice of

her security clearance revocation and an opportunity to present

documents and arguments against revocation. She also received

three administrative appeals. Where a security clearance is

denied or revoked because the subject of a background

investigation refuses to comply with investigation procedures

required by agency regulation, no more process is mandated.

Therefore, count 2 was properly dismissed.

On appeal, Stehney asserts two other claims under the

rubric of due process. First, she alleges the clearance

revocation procedures followed by NSA were not authorized by

Congress or the President. Yet Stehney fails to identify

specific NSA procedures which she believes were not authorized.

Instead, her claim rests entirely on the assertion in her brief

that her case presents facts analogous those in Greene v.

McElroy, 360 U.S. 474 (1959).

In Greene, the Department of Defense revoked a security

clearance on the basis of confidential information without

providing the clearance holder an opportunity to confront the

accusing witnesses at a hearing. The Supreme Court held that

absent express authorization from the President or Congress the

Department could not rely on a summary procedure that provided

virtually no due process protections. Stehney asserts that

revocation of her security clearance without an evidentiary

hearing is equally invalid absent express Presidential or

Congressional approval. But this case is distinguishable from

Greene in critical respects. Stehney asserts she was denied a

clearance because she refuses to comply with a routine background

investigation procedure -- the polygraph examination -- that was

expressly authorized by Congress. See 29 U.S.C. § 2006(b)(2).

In these circumstances, NSA does not need express authorization

from Congress or the President to revoke a security clearance

without a hearing.

Stehney also contends NSA's use of a polygraph is a

"random and arbitrary process" equivalent to flipping a coin.

Although not stated explicitly, the thrust of her argument seems

to be that regulations requiring a polygraph test violate

substantive due process. But nothing in the record indicates

that this claim was raised in the district court. For this

reason, it is waived on appeal. Venuto v. Carella Byrne, Bain,

Gilfillan, Cecchi & Stewart, P.C., 11 F.3d 385, 393 (3d Cir.

1993); Frank v. Colt Industries, Inc., 910 F.2d 90, 100 (3d Cir.

1990).

Even though we do not decide this issue, we note that

if Stehney's position were to prevail, national security agencies

could easily be foreclosed from using polygraph examinations.

The government contends that polygraph examinations are a useful

investigatory tool not only because they assist in distinguishing

between truthful and deceptive persons, but because they induce

examinees to make more comprehensive disclosures that are useful

in an investigation. For this reason, use of polygraph

examinations for national security clearance investigations would

appear to possess a rational basis sufficient to withstand

substantive due process scrutiny. See Anderson v. City of

Philadelphia, 845 F.2d 1216 (3d Cir. 1988) (use of polygraph for

preemployment screening by city police does not violate equal

protection or substantive due process; in absence of scientific

consensus, reasonable administrators could conclude that

polygraph testing can distinguish between truthful and deceptive

persons with greater accuracy than chance, and it was rational

for administrators to conclude that use of polygraph examinations

results in fuller, more candid disclosure).

D. Count 4: Equal Protection

Stehney contends NSA's exemption of "world class

mathematicians" from its polygraph requirement, but not her,

violates her constitutional right to equal protection because

there is no rational basis for this distinction. The district

court dismissed this claim. Stehney, 907 F. Supp. 823-24. We

agree.

As we have noted, there is no fundamental right to a

security clearance. See Department of Navy v. Egan, 484 U.S.

518, 528 (1988) ("It should be obvious that no one has a "right"

to a security clearance.") Nor are "non-world class

mathematicians" a protected class for equal protection purposes.

NSA's policy "must be upheld against equal protection challenge

if there is any reasonably conceivable state of facts that could

provide a rational basis for the classification." F.C.C. v.

Beach Communications, Inc., 508 U.S. 307, 313 (1993). NSA

exempts a small number of internationally renown mathematicians

from its polygraph requirement to facilitate their recruitment

for temporary consulting positions. United States Government

memorandum, "Security Processing for IDA Professional Staff

Members and World Class Mathematicians", JA 46. As the district

court aptly observed:

In light of the recognized potential for

"lost talent when suitable individuals refuse

to participate in a polygraph examination",

see Redefining Security, A Report to the

Secretary of Defense and the Director of

Central Intelligence, Joint Security

Commission (February 28, 1994) . . . it is

hardly irrational to think that there may be

rare and singular circumstances where the

unique talents of an especially gifted

cryptologist expert may be so important to

the protection of national security -- and

needed so desperately and immediately -- that

the interest in procuring his or her services

outweighs the increase in security risks

occasioned by foregoing a polygraph on a one-

time basis.

There is a rational basis for NSA's classification. Stehney's

equal protection claim was properly dismissed.

Stehney also claims NSA's polygraph exemption for world

class mathematicians, though facially neutral, has an indirect

discriminatory effect on women. But a facially neutral policy

does not violate equal protection solely because of

disproportionate effects. Instead a plaintiff must allege that a

classification was adopted "`because of,' not merely `in spite

of' its adverse effects upon an identifiable group." Personnel

Adm'r. of Massachusetts v. Feeney, 442 U.S. 256, 271-72 (1979).

"Proof of . . . discriminatory intent or purpose is required to

show a violation of the equal protection clause." Village of

Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S.

252, 265 (1977). Stehney did not allege that the facially

neutral exemption from the polygraph requirement was adopted with

the intent to discriminate against women, and so her claim was

properly dismissed.

E. Count 5: New Jersey Employment Law Violation

New Jersey law provides "a cause of action for wrongful

discharge when the discharge is contrary to a clear mandate of

public policy." Pierce v. Ortho Pharmaceutical Corp., 84 N.J.

58, 72, 417 A.2d 505, 512 (1980). Under New Jersey law, an

employer commits a misdemeanor if it requests an employee to take

a lie detector test as a condition of employment. Relying on

this statute as evidence of New Jersey's public policy, Stehney

contends she has a state law cause of action for wrongful

discharge against NSA and the Institute. The district court held

the New Jersey anti-polygraph statute was preempted by a federal

statute, the Employee Polygraph Protection Act (EPPA), 29 U.S.C.

§ 2001-2009. Stehney, 907 F. Supp. at 824-25. We agree.

In English v. General Electric Co., 496 U.S. 72 (1990),

the Supreme Court held state law may be preempted in three

circumstances:

First, Congress can define explicitly the

extent to which its enactments preempt state

law. . . . Second, in the absence of explicit

statutory language, state law is pre-empted

where it regulates conduct in a field that

Congress intended the Federal Government to

occupy exclusively. . . . Finally, state law

is pre-empted to the extent that it actually

conflicts with federal law. Thus, the Court

has found preemption where it is impossible

for a private party to comply with both state

and federal requirements, or where state law

stands as an obstacle to the accomplishment

of the full purposes and objectives of

Congress.

English, 496 U.S. at 78-79 (internal quotations and citations

omitted).

Application of these standards demonstrates the New

Jersey statute is preempted by federal law.

As a threshold matter, we note NSA was never Stehney's

employer. Furthermore, the Employee Polygraph Protection Act, 29

U.S.C. §§ 2001-2009, exempts NSA from coverage under the New

Jersey statute. Sections 2006 and 2009 of the Act provide that

states may not regulate or prohibit the federal government from

requiring employees of NSA contractors to take polygraph

examinations. Stehney was an employee of a contractor to NSA,

and falls within the scope of the Act's preemption provisions.

For that reason, the New Jersey polygraph statute is preempted to

the extent it may prohibit NSA from administering a polygraph

examination to a person in Stehney's position. No public policy

can flow from a preempted statute. Stehney therefore has no

state law action for wrongful discharge against NSA.

The preemption analysis with respect to the Institute

is different. The Institute was Stehney's employer and thus

falls within the scope of the New Jersey polygraph statute.

Moreover, the explicit language of 29 U.S.C. § 2006(b)(2)(A)(iii)

applies only to actions by the federal government, and does not

expressly preempt state regulation of private sector NSA

contractors. Nevertheless, it is clear that the New Jersey

statute is preempted when applied to private sector NSA

contractors, for it comprises "an obstacle to the accomplishment

of the full purposes and objectives" of federal law. Were the

courts to give effect to the New Jersey polygraph law in this

context, it would undermine the clear purpose and objective of 29

U.S.C. §§ 2006 and 2009 -- to shield use of polygraph

examinations by the federal government for national security

purposes from state regulation. It would also, incidentally,

prevent any New Jersey employer from serving as an NSA

contractor, an impermissible state interference with exclusive

federal responsibility in matters of national security.

F. Count 6: New Jersey Anti-Discrimination Law

After dismissing counts 1 through 5, the district court

declined to exercise supplemental jurisdiction over the remaining

state law claim pursuant to 28 U.S.C. § 1367. This decision is

committed to the discretion of the district court. Growth

Horizons, Inc. v. Delaware County, Pa., 983 F.2d 1277, 1284-85

(3d Cir. 1993). Because all federal claims were correctly

dismissed and the district court found that dismissal of the

remaining state claim would not be unfair to the litigants or

result in waste of judicial resources, we see no abuse of

discretion.

V. Conclusion

For the foregoing reasons, we will affirm the judgment

of the district court.