Petition for Writ of Certiorari — Ma v. TRW, Inc.

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Court, U-8.

FILED

/ No. 94-941 06 4 DEC 1 4 19%

OFFICE OF THE CLARK

In The

Supreme Court of the United States

October Term, 1994

JACK MA,

Petitioner,

VS.

TRW INC.,

Respondent.

On Petition For A Writ Of Certiorari

To The California Court Of Appeal,

Second Appellate District, Division Four

PETITION FOR A WRIT OF CERTIORARI

Horvitz & Levy

E.us J. Horvitz

Counsel of Record

ELIZABETH SKORCZ

ANTHONY

15760 Ventura Boulevard,

18th Floor

Encino, California 91436

(818) 995-0800 and

(213) 872-0802

FAX: (818) 995-3157

ALLAN F. GROSSMAN

15915 Ventura Boulevard

Suite 304, Encino Law

Center

Encino, California 91436

(818) 990-8200

FAX: (818) 990-8200

Counsel for Petitioner

December 1994

QUESTIONS PRESENTED

1. Where a defense contractor (a) is required by

contract to protect classified national defense informa-

tion, (b) performs this function in compliance with

detailed Department of Defense (“DOD”) regulations and

under strict governmental supervision, (c) is obligated by

the regulations to conduct an inquiry into suspected secu-

rity violations and immediately report the result to the

DOD and the FBI, and (d) orders an employee whom it

suspects of espionage to come to an interrogation without

an attorney, on pain of losing his job if he refuses, is the

defense contractor a state actor for purposes of determin-

ing whether the employee’s Fifth Amendment privilege

against self-incrimination has been violated?

2. Does a defense contractor violate an employee's

Fifth Amendment privilege against self-incrimination

when it (a) requires an employee to appear without coun-

sel to answer questions concerning potential security vio-

lations which could also constitute federal crimes, (b)

threatens to fire the employee unless he appears and

answers questions, (c) fails to advise the employee that

any answers he gives could not be used against him ina

criminal proceeding (see Garrity v. New Jersey, 385 U.S. 493

(1967) and its progeny) and then (d) fires the employee

for refusing to be interrogated without his attorney pre-

sent?

TABLE OF CONTENTS

Page

CUURSTIOONS PRONE o0skccccdasussecaesveanes i

TABLE OF AGT SSUES 6 soc sds ke caew es cdiwedsiess iv

PETITION FOR WRIT OF CERTIORARI............ 1

COPTER EG 6. 0 o's eS as avant kei eae was 1

PFGE BIE sss 650 ced bananas ere cee 1

CONSTITUTIONAL PROVISIONS INVOLVED...... 2

STATEMENT OFF “Titer Gia i ocho rdodensciesas sss 2

A. As A Defense Contractor Entrusted With Clas-

sified Information, TRW Is Mandated By The

Industrial Security Manual To Immediately

Report And Investigate Suspected As Well As

Actual Security Violations ................... 2

B. Jack Ma, A TRW Employee, Unknowingly

Becomes The Subject Of A Security Investiga-

tion Mandated By The ISM.................. 5

C. TRW Demands Ma Submit To A Security Inter-

view Without His Attorney Present. TRW Says

Nothing About Whether Statements Ma Might

Make During The Interview Could Later Be

Used To Incrianhmabe Fis. «055.05 65 hs 605 2009s’ 7

D. Federal Questions Are Presented In Motions In

re er BF ee Beene 9

REASONS FOR GRANTING THE WRIT ........... 10

I. UNDER THE DECISION BELOW, CALIFORNIA

WILL HAVE A DIFFERENT RULE FROM THE

REST OF THE NATION ON AN ISSUE AFFECT-

ING NATIONAL DEFENSE AND NATIONAL

SECURELY 2. sc on Ssenbede<40cueeewaesanesentes 10

II.

If.

iii

TABLE OF CONTENTS - Continued

Page

THE CALIFORNIA COURT OF APPEAL

DECIDED THE STATE ACTION ISSUE HERE

IN A WAY THAT CONFLICTS WITH A

UNITED STATES COURT OF APPEALS DECI-

SION AND WITH CONTROLLING DECISIONS

oe, ee eee ee eee

A. The Courts Found State Action In Becker v.

Philco Corp., Edmonson v. Leesville Concrete

Co. And West v. Atkins, Three Decisions

Critical To The Present Case .............

B. The California Court Of Appeal Erro-

neously Found No State Action Here.....

THIS CASE PRESENTS A FIFTH AMENDMENT

ISSUE WHICH HAS DIVIDED THE CIRCUIT

COURTS OF APPEALS, NAMELY, WHETHER

THE “PROPER PROCEEDINGS” TO WHICH

THIS COURT HAS ALLUDED REQUIRE A

PUBLIC EMPLOYER TO ADVISE ITS

EMPLOYEE THAT HIS STATEMENTS WILL BE

PROTECTED BY USE IMMUNITY BEFORE THE

EMPLOYER CAN DISCIPLINE HIM FOR

REFUSING TO ANSWER JOB-RELATED QUES-

ea ahs ewes FAG SRA KS Se 98 da wees

TABLE OF AUTHORITIES

Page

CAsES

Becker v. Philco Corp., 372 F.2d 771 (4th Cir. 1967)

(aces ctsccutasspveeigeaae ae epee a4, ta, 15

Benjamin v. City of Montgomery, 785 F.2d 959 (11th

a, | ene emetr par rre er yr ere Pi

Blum v. Yaretsky, 457 U.S. 991 (1982) ............. 13, 18

Confederation of Police v. Conlisk, 489 F.2d 891 (7th

Ga GE oad vane anwn ven ecoes bneeeaeeaeeianeeee 21, 22

D'Acquisto v. Washington, 640 F. Supp. 594 (N.D.III.

BOs cose a0nbceees (hue 453 ee eee a1, a4, 22

Edmonson v. Leesville Concrete Co., 500 U.S. 614, 111

S. UE. BRT OPE ie eek tere o, de tm 3

Erwin v. Price, 778 F.2d 668 (11th Cir. 1985)......... 24

Estelle v. Smtith, 451 US. GB6 (IGS) vise cc vcaesivecus 25

FOP, Lodge No. 5 v. City of Philadelphia, 859 F.2d 276

(Sel Ce: TOD ss cee cee ec sa ge dea 21

Gardner v. Broderick, 392 U.S. 273 (1968)............. 20

Garrity v. New Jersey, 385 U.S. 493 (1967)............ 20

Gulden v. McCorkle, 680 F.2d 1070 (5th Cir. 1982) .... 24

Hester v. City of Milledgeville, 777 F.2d 1492 (11th

ee Per Pere rere rere Pr ee 24

In ve Gaull, SOF TES: 3 CI cc ct cance nccuanienea ess 25

Jackson v. Metropolitan Edison Co., 419 U.S. 345

OFS) is ines os cn eeepetenes sha) eet ae 18

Kalkines v. United States, 473 F.2d 1391 (Ct. Cl.

TOFS) ocak ka kcc'e vs chvannd c0@he ee cage wares bi 22

De | ae

TABLE OF AUTHORITIES - Continued

Page

Lefkowitz v. Cunningham, 431 U.S. 801 (1977)......... 22

Lefkowitz v. Turley, 414 U.S. 70 (1973)................ 22

Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982)

[5ke VAAEEEN ARE EA ERNE ROAR ER ARMOR Oe ees 12, 13, 18

Miranda v. Arizona, 384 U.S. 436 (1966).............. 23

Rendell-Baker v. Kohn, 457 U.S. 830 (1982)......... 13, 18

TRW, Inc. v. Superior Court, 25 Cal. App. 4th 1834,

oe ee Fe eee rr ere ry 1

Uniformed Sanitation Men Ass’n v. Comm'’r of Sanita-

OM, Dee We Ee GR 6 6 ck c i waeesacsenes («0c ae

Uniformed Sanitation Men Ass'n v. Comm’r of Sanita-

tion, 426 F.2a 639 Gd Cir. 1970) «20.0 ecscecescss 22

United States v. Davis, 482 F.2d 893 (9th Cir. 1973) .... 19

United States v. Devitt, 499 F.2d 135 (7th Cir. 1974) .... 21

United States v. Ross, 32 F.3d 1411 (9th Cir. 1994) .... 19

West v. Atkins, 487 U.S. 42 (1988)....11, 12, 13, 14, 16, 18

STATUTES

18 U.S.C.A. § 794(a) (West 1976)....... ska desasenes 25

a | 1

bolt So ne OR PL ale

PETITION FOR WRIT OF CERTIORARI

Jack Ma respectfully petitions for a writ of certiorari

to review the judgment of the California Court of Appeal,

Second Appellate District, Division Four in this case.

OPINIONS BELOW

The opinion and judgment of the California Court of

Appeal, Second Appellate District, Division Four is

reported at 25 Cal. App. 4th 1834, 31 Cal. Rptr. 2d 460

(1994) and is reprinted in the appendix [hereinafter, “Pet.

App.”] at A-1 to A-40.

The trial court’s “Statement of Decision Following

Bench Trial of Right to Attorney Issue” is unreported and

is reprinted in Pet. App. at A-41 to A-46.

JURISDICTION

The judgment of the California Court of Appeal was

entered on June 22, 1994. That court denied a timely

petition for rehearing on July 21, 1994. Pet. App. at A-47.

On September 15, 1994, the California Supreme Court

denied a timely petition for review. Pet. App. at A-48.

Jurisdiction is conferred on the Court by 28 U.S.C.A.

§ 1257(a) (West 1993).

CONSTITUTIONAL PROVISIONS INVOLVED

The Fifth Amendment to the Constitution of the

United States, which provides, in relevant part:

No person . . . shall be compelled in any crimi-

nal case to be a witness against himself. . . .

STATEMENT OF THE CASE

A. As A Defense Contractor Entrusted With Clas-

sified Information, TRW Is Mandated By The

Industrial Security Manual To Immediately

Report And Investigate Suspected As Well As

Actual Security Violations.

Like all defense contractors who handle classified

information, TRW Inc. (“TRW”) entered into a Security

Agreement, form DD 441, governing TRW’s provision of

“supplies or services, which are required and necessary

to the national security of the United States.” 3A Appel-

lant’s Appendix in Support of Petition for Writ of Man-

date [hereinafter, “Rec.”] at 1294; 4 Rec. at 1477-1478,

1573; 2 Rec. at 606-607. The Security Agreement expressly

incorporates the 345-page Department of Defense

(“DOD”) Industrial Security Manual (“ISM”). 2 Rec. at

606.

The ISM is designed to “protect and safeguard U.S.

government information that has been classified in the

interest of national security. ...” 4 Rec. at 1573. It

implements the provisions of seventeen different federal

statutes, executive orders and regulations, including the

Espionage Act, the Sabotage Act and the National Secu-

rity Act of 1947. 1 Rec. at 17-18.

The ISM dictates the contractor’s response to actual

and even suspected security breaches in painstaking

detail. Section 6(b) requires the contractor to submit

immediately to the Defense Industrial Security Clearance

Office a report concerning “any information coming to

[the contractor’s] attention concerning any of [its]

employees who have been cleared . . . for access to

classified information, which indicate that such access or

determination may not be clearly consistent with the

national interest.” 1 Rec. at 48-49. Sections 6(a)(1) and

6(a)(2) direct the contractor to immediately submit a writ-

ten report to the CSO! of any “[e]spionage, [s]abotage, or

[s]ubversive [a]ctivities,” and “any loss, compromise

(including deliberate compromise), or suspected compro-

mise of classified information.” 1 Rec. at 45. Section 6(c)

requires an immediate report to the FBI of information

coming to the contractor’s attention concerning “existing

or threatened espionage, sabotage, or subversive activ-

ities” at any of the contractor’s plants. 1 Rec. at 51.

Sections 7(a) and 7(b) mandate that the contractor

“establish a procedure to ensure that each loss, compro-

mise or suspected compromise of classified information

and each failure to comply with the requirements of this

The CSO (“Cognizant Security Office”) (1 Rec. at 5) is the

“office of the DIS [Defense Investigative Service] Director of

Industrial Security who has industrial security jurisdiction over

the geographical area in which a facility is located.” 1 Rec. at 20.

As part of the DIS, the CSO is an employee of the DOD. 4 Rec. at

1479.

manual is immediately reported to the FSO [Facility Secu-

rity Officer],”2 and “establish such procedures as are

necessary to ensure that any employee discovering the

loss, compromise or suspected compromise of classified

information outside a facility promptly reports such a fact

to: (1) the nearest office of the FBI... , and (2) the FSO,

by the fastest means of communication. ...” 1 Rec. at

51-52. Section 7(c) requires the contractor to “imme-

diately .. . [i]nitiate a preliminary inquiry to ascertain all

of the circumstances surrounding the reported loss, com-

promise, suspected compromise or failure to comply with

the requirements of this manual.” 1 Rec. at 52.

If the government-mandated preliminary inquiry

confirms that a security breach has occurred, the contrac-

tor “immediately shall submit a report of the incident to

the CSO ... and conduct a complete investigation of the

incident unless otherwise notified by the CSO.” 1 Rec. at

51-52.

The contractor’s discretion in handling classified

information and in performing the mandated investiga-

tions of suspected or actual security breaches is tightly

circumscribed. Pursuant to the Security Agreement, the

contractor must implement a “system of security controls

within the organization in accordance with the require-

ments of the [ISM].” 2 Rec. at 606. The ISM provides that

this system of security controls is to be codified in a

written “Standard Practice Procedure” (“SPP”). The SPP

must be submitted to the CSO for approval before the

contractor obtains its classified information clearance,

and modified upon notification from the government that

it does not adequately implement the ISM. 1 Rec. at 39.

2 The FSO is appointed by the contractor. 1 Rec. at 30.

In addition, under the Security Agreement, the con-

tractor is subject to periodic inspections of “the pro-

cedures, methods, and facilities” it employs in complying

with the ISM. 2 Rec. at 606. A former security investiga-

tions manager at TRW testified that during his tenure

teams of six to ten Defense Investigative Service inspec-

tors annually conducted on-site audits lasting two to

three weeks, during which they comprehensively

reviewed TRW’s maintenance of classified information.

3A Rec. at 1282-1287. The inspectors then sent TRW

reports detailing their findings. 3A Rec. at 1286-1287.

B. Jack Ma, A TRW Employee, Unknowingly

Becomes The Subject Of A Security Investiga-

tion Mandated By The ISM.

Jack Ma was employed as a physicist by TRW in

January of 1985, and assigned to highly sensitive research

concerning the hardening of missile silos against nuclear

attack. 3 Rec. at 992, 1002, 1005-1006; 4A Rec. at

1748-1749. In June 1985 Ma and his project were trans-

ferred to another section. 3 Rec. at 1014-1018; 4A Rec. at

1748. Ma objected to the transfer because he felt his new

supervisor did not have appropriate expertise. 3 Rec. at

1018, 1022-1025.

On November 6, 1985, a TRW employee named

George Hoffman visited Charles Wuller, Ma’s department

head, to voice his concern that Ma was a security risk. On

November 7, Hoffman gave Wuller a memorandum

explaining that, six months earlier, Hoffman had reported

to a co-worker possible security violations by Ma. Hoff-

man purportedly had heard Ma talking on the telephone

with foreign nationals, saying that TRW is working on

“warheads,” “silo penetration,” and “space weaponry.”

Supplemental Appendix in Support of Return to Petition

for Writ of Mandate [hereinafter “Supp. Rec.”] at 74. The

memo also described an alleged conversation in which

Ma had said he was working on a system of “quantum

gravity reversal” which would cause hostile missiles to

reverse course, return to their launch points and deto-

nate. Supp. Rec. at 75.

Between November 7 and 11, Ma had a series of

meetings with Wuller and other TRW supervisory per-

sonnel. At these meetings, the transfer was discussed, but

not the alleged security violations. Ma was told to see a

company psychiatrist and not to report for work until

contacted. 3 Rec. at 1039-1062.

During this time, Ma became concerned that he was

facing a “trump up,” and so he cancelled the appointment

with the psychiatrist and, on about November 15, hired

attorney Dennis Devermont to represent him. 3 Rec. at

1054-1055, 1071-1072. Ma advised TRW to direct further

communications to Devermont. 3 Rec. at 1071-1072. At

TRW’s request, a meeting among Ma, his attorney Dever-

mont and a TRW attorney was held. Again, the transfer

was discussed, but no mention was made of the alleged

security violations. 3 Rec. at 1073-1079.

Meanwhile, on November 7, unbeknownst to Ma,

Wuller sent a memo to TRW’s security department

explaining his suspicions about Ma, attaching the Hoff-

man memo and requesting an investigation. Supp. Rec. at

20.

C. TRW Demands Ma Submit To A Security Inter-

view Without His Attorney Present. TRW Says

Nothing About Whether Statements Ma Might

Make During The Interview Could Later Be

Used To Incriminate Him.

About a week after the meeting among Ma and the

lawyers, Earl Nishimura, a TRW security investigator,

called Ma and directed him to report on December 12 for

an interview concerning security violations. Ma told

Nishimura to contact his attorney, and stated he would

attend the interview if he was permitted to bring his

attorney along. 3 Rec. at 1101. Nishimura said nothing

about whether Ma’s statements at the interview could be

used against him in a subsequent criminal prosecution.

On December 13, TRW’s personnel manager wrote to

Ma, incorrectly stating Ma had refused to attend an inter-

view with Nishimura. Supp. Rec. at 84. The December 13

letter further stated:

These security allegations are a serious matter

which, if true, would be violations of TRW’s

security policies and of the Industrial Security

Manual which is issued by the Defense Investiga-

tions [sic] Service. Your cooperation with this

investigation is a condition of employment with

TRW.

... As a result of your refusal to cooperate, you

have been suspended without pay effective

December 12, 1985. Your continued refusal to coop-

erate will result in the termination of your employ-

ment with TRW.

Supp. Rec. at 4 (emphasis added).

At about the same time, Nishimura spoke with Ma’s

attorney and advised him of the charges against Ma. 4A

Rec. at 1840. Devermont relayed the information to Ma. 3

Rec. at 1095, 1153; 3A Rec. at 1183-1186. Ma viewed the

allegations of security violations as “baloney” and

“trumped up” (3 Rec. at 1095, 1109; 3A Rec. at 1170), but

was frightened that they could lead to criminal indict-

ment, conviction and possibly life imprisonment or death.

3 Rec. at 1155, 1109.

When Ma failed to appear for the interrogation at

10:00 a.m. on December 12, Nishimura immediately

called the FBI and told Agent Gill Cordova, “You get

down here.” Cordova was at Nishimura’s office by 10:30

a.m. Supp. Rec. at 6.

On December 20, TRW’s security department sent a

report to the Defense Industrial Security Clearance

Office, explicitly citing section 6(b)(1) of the ISM, and

incorrectly stating that Ma had refused to appear for a

security interview. Supp. Rec. at 78-79.

On January 9, 1986, Devermont wrote to TRW’s coun-

sel explaining Ma’s willingness to be interviewed with

his attorney present. Supp. Rec. at 2. A month later,

TRW’s counsel wrote back, advising Ma that he could not

be represented by counsel at the interview. Supp. Rec. at

81. TRW’s letter again said nothing about how Ma’s testi-

mony at the interview could be used.

In February 1986, Ma met alone with a Defense

Investigative Service agent, after obtaining the latter’s

assurance that, if at any time Ma felt the interview was

being conducted unfairly, he could stop it and call in his

lawyer. 3A Rec. at 1210, 1212. Ma and the agent discussed

ee a

the alleged security violations, and no further action was

taken. 3A Rec. at 1232-1234.

On December 4, 1987, TRW fired Ma for failure to

attend the security interrogation without counsel. Supp.

Rec. at 4. Ma timely filed this action, alleging he was

wrongfully terminated for asserting his Fifth Amendment

right to have an attorney present at the security inter-

rogation. 2 Rec. at 661 (Second Amended Complaint).

D. Federal Questions Are Presented In Motions In

Limine.

Both Ma and TRW moved the trial court below in

limine for rulings whether, inter alia: (1) TRW was a state

actor for purposes of implementing its DOD-mandated

security program; and (2) TRW violated Ma’s privilege

against self-incrimination by refusing to allow his attor-

ney to attend the security interrogation. 2 Rec. at 686, 696;

2A Rec. at 722. After hearings and a bench trial, the trial

court ruled in Ma’s favor on both issues. Pet. App. at

A-41 to A-46. Reviewing the trial court’s decision by writ,

the Court of Appeal, Justice Woods concurring and dis-

senting, found neither government action nor a Fifth

Amendment violation.* Pet. App. at A-17, A-36 to A-37.

3 TRW also moved in limine for a ruling on a third issue:

whether an employee’s right to an attorney at an interrogation

concerning criminal charges is a well-established and funda-

mental public policy in California. Pet. App. at A-15. The trial

court answered in the affirmative. Pet. App. at A-42. However,

the Court of Appeal, having found neither state action nor a

Fifth Amendment violation, vacated the trial court’s ruling. Pet.

App. at A-35.

REASONS FOR GRANTING THE WRIT

I. UNDER THE DECISION BELOW, CALIFORNIA

WILL HAVE A DIFFERENT RULE FROM THE REST

OF THE NATION ON AN ISSUE AFFECTING

NATIONAL DEFENSE AND NATIONAL SECU-

RITY.

Providing for the national defense and protecting

national security by safeguarding classified information

are traditional governmental functions. Moreover, they

are traditionally and necessarily the province of the fed-

eral government. Because the defense arena is, by nature,

hierarchical and highly structured, implementation of an

effective defense policy requires uniform rules created by

the Department of Defense. The Industrial Security Man-

ual, which contains regulations applicable to every

defense contractor in the nation entrusted with classified

information, exemplifies such rules.

Given the federal character of the defense effort and

the need for centralized decisionmaking, state govern-

ments have no legitimate interest in creating their own

individual rules on national defense issues. The Court of

Appeal opinion in this case, however, is just such an

idiosyncratic rule. It provides that, in California, defense

contractors implementing a government-mandated secu-

rity program are not state actors. As discussed more fully

below, this rule is inconsistent with decisions of this

Court, as well as with other federal authority.

The Court of Appeal’s decision is particularly trou-

blesome because it creates the law in California, the most

populous state and the state with the largest concentra-

tion of defense contractors. The decision will impact a

significant portion of the national defense effort. Thou-

sands of defense contractors and their tens of thousands

of employees will be subject to California’s peculiar state

action rule. Further complicating matters, numerous

defense contractors who do business in California and in

other states will be subject to one state action rule here

and a different rule everywhere else. This conflict could

result in inconsistent application of the ISM’s regulations,

even though the regulations do not allow for innovation

in enforcement.

In short, a writ of certiorari should be granted so that

an aberrant California precedent on an important issue of

federal law can be brought into line with controlling

authority and uniformity in national defense policy can

be restored.

Il. THE CALIFORNIA COURT OF APPEAL DECIDED

THE STATE ACTION ISSUE HERE IN A WAY

THAT CONFLICTS WITH A UNITED STATES

COURT OF APPEALS DECISION AND WITH

CONTROLLING DECISIONS OF THIS COURT.

A. The Courts Found State Action In Becker v.

Philco Corp., Edmonson v. Leesville Concrete

Co. And West v. Atkins, Three Decisions Criti-

cal To The Present Case.

The California Court of Appeal’s decision conflicts

irreconcilably with Becker v. Philco Corp., 372 F.2d 771 (4th

Cir.), cert. denied, 389 U.S. 979 (1967), a case involving a

defense contractor’s enforcement of precisely the same

provisions of the ISM at issue here.* In Becker, the Fourth

Circuit held that Philco was a governmental actor when,

pursuant to the ISM, it sent the Department of Defense a

report concerning suspected compromises of classified

information by the plaintiffs. The court explained why

Philco had “the attributes of a Federal agency in the

problem of this controversy”:

Indisputably, the Government by the contract

bared and confided State secrets to Philco. The

company was imparted, and it worked in,

knowledge exclusively the sovereign’s. It was a

sharing of confidence, quite aside from a sub-

contract for the production of defense supplies.

So it was that the company and such of its

employees as were confidants were answerable

for keeping the nation’s secrets, as fully as if

they were governed by the oath of a Federal

official.

Becker, 372 F.2d at 774.

The Court of Appeal opinion below not only clashes

with Becker, but also fails entirely to consider, and con-

flicts irreconcilably with, the two most recent decisions of

this Court concerning when a private entity becomes a

government actor: Edmonson v. Leesville Concrete Co., 500

U.S. 614, 111 S. Ct. 2077 (1991) and West v. Atkins, 487 U.S.

42 (1988).

In Edmonson, this Court expanded upon the two-part

framework for state action analysis set forth nine years

earlier in Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982).

4 The ISM itself specifically cites and relies on the Becker

case. 1 Rec. at 49, n.13.

The first part of the analysis asks “whether the claimed

constitutional deprivation resulted from the exercise of a

right or privilege having its source in state authority.”

Edmonson, 111 S. Ct. at 2082-83; see Lugar, 457 U.S. at 937.

The second part asks “whether the private party charged

with the deprivation could be described in all fairness as

a state actor.” Edmonson, 111 S. Ct. at 2083; see Lugar, 457

U.S. at 937. In Edmonson, the Court explained that resolu-

tion of the latter question depends upon three principles:

(1) “the extent to which the actor relies on governmental

assistance and benefits,” (2) “whether the actor is per-

forming a traditional governmental function” and (3)

“whether the injury caused is aggravated in a unique way

by the incidents of governmental authority.” Edmonson,

111 S. Ct. at 2083. Using this analytical framework, the

Court in Edmonson held that a private litigant was

deprived of equal protection when its adversary in a civil

suit attempted to exclude jurors on the basis of race.

In West v. Atkins, the Court held a private physician

who contracted with a state prison to provide medical

care for prison inmates was a state actor and conse-

quently subject to suit under 42 U.S.C.A. section 1983 for

his decision not to recommend surgery on a prisoner’s

injured leg. The West opinion stated, “Defendants are not

removed from the purview of § 1983 simply because they

are professionals acting in accordance with professional dis-

cretion and judgment.” West, 487 U.S. at 52 (emphasis

added). In a footnote expanding on this principle, the

Court explained and limited its previous holdings in

Blum v. Yaretsky, 457 U.S. 991 (1982) and Rendell-Baker v.

Kohn, 457 U.S. 830 (1982) as follows:

[In Blum and Rendell-Baker, this] Court sug-

gested that the private party’s challenged deci-

sions could satisfy the state-action requirement

if they were made on the basis of some rule of

decision for which the State is responsible. The

Court found, however, that the decisions were

based on independent professional judgments

and were not subject to state direction. Thus, the

requisite “nexus” to the State was absent.

This determination cannot be transformed into

the proposition that no person acts under color

of state law where he is exercising independent

professional judgment. “[T]he exercise of .. .

independent professional judgment,” is not, as

the Court of Appeals suggested, “the primary

test.” 815 F.2d, at 995, n.1. And Blum and

Rendell-Baker provide no support for respon-

dent’s argument that a physician, employed by

the State to fulfill the State’s constitutional obli-

gations, does not act under color of state law

merely because he renders medical care in

accordance with professional obligations.

West, 487 U.S. at 52 n.10.

B. The California Court Of Appeal Erroneously

Found No State Action Here.

The Becker court recognized that the government

exercises strict control over defense contractors through

the investigation and reporting provisions of the ISM. It

explained:

The obligation [to report suspected security

breaches] could scarcely be couched in more

imperious or exacting language. It embraces

both true and false accusations, both substantial

and insubstantial suggestions, perhaps encom-

passing even rumors. It demands investigation

of them by the company and a report of it to the

Defense Department. That is precisely what

Philco did.

Becker v. Philco Corp., 372 F.2d 771, 774 (4th Cir.), cert.

denied, 389 U.S. 979 (1967). Accordingly, the Becker court

correctly found unquestionable state action in Philco’s

obedience to the ISM’s mandate. In this case, neverthe-

less, the court dismissed Becker and the “imperious or

exacting language” of the ISM and found no state action.

The California court reasoned that the ISM required Phil-

co’s report to the DOD, but “did not mandate the particu-

lar conduct of which [Jack] Ma complains” — the security

interrogation without counsel — even though it “required

an inquiry.” Pet. App. at A-24. This is a distinction with-

out a difference. Both the report in Becker and the prelimi-

nary inquiry concerning Ma were undertaken pursuant to

section 7 of the ISM.°5 Id. at 772-773 (citing earlier version

of ISM with virtually same text as current version but

different section numbers). The interrogation conducted

as part of TRW’s “preliminary inquiry” can hardly be

deemed private conduct when the report in Becker consti-

tuted state action. Becker and the present case cannot be

5 Section 7(c) requires a “preliminary inquiry to ascertain

all of the circumstances surrounding” any suspected loss or

compromise of classified information. 1 Rec. at 52. Section 7(d)

requires that if the preliminary inquiry confirms a loss or com-

promise of classified information, the contractor must send a

report to the Department of Defense “in accordance with para-

graph 6a(2).” 1 Rec. at 45, 52. Philco submitted its report to the

DOD in accordance with sections 7(d) and 6(a)(2). See Becker, 372

F.2d at 773.

reconciled. In short, the question whether a defense con-

tractor is a state actor in complying with the ISM has

been answered correctly by the federal court in Becker

and incorrectly by the state court below. This Court

should grant the petition to resolve the conflict.

A writ of certiorari is also warranted by the Califor-

nia Court of Appeal’s failure even to cite, much less

consider, this Court’s decisions in Edmonson v. Leesville

Concrete Co., 500 U.S. 614, 111 S. Ct. 2077 (1991) and West

v. Atkins, 487 U.S. 42 (1988). As explained above, Edmon-

son sets forth a comprehensive multi-part test for state

action. Applying the Edmonson test to the present case,

the result is inescapable that TRW’s conduct constituted

state action. The first prong of the test is easily satisfied:

In seeking to interrogate Ma, TRW was exercising its

privilege to participate in the national defense program,

and it was following rules of conduct, the ISM, imposed

by the DOD.

Turning to the second prong of the Edmonson test, the

facts demonstrate TRW must “be described in all fairness

as a state actor” when it sought to interrogate Jack Ma

pursuant to the ISM.

First, it is undisputed that the vast majority of TRW’s

business is defense contract work funded by the federal

government. Thus, TRW relies extensively on govern-

mental assistance and benefits.

Second, national defense, and particularly the protec-

tion of classified defense information, is traditionally,

exclusively and quintessentially a governmental function.

When the government employs private contractors to

help perform this function, the contractors operate under

the strict mandate of the ISM. In effect, as a condition of

participating in and profiting from the national defense

program, defense contractors like TRW are obliged to

assume governmental responsibility for safeguarding

classified information.

It is critical to note that TRW’s assumption of the

traditional governmental functions of national defense

and national security led directly to the constitutional

deprivation Ma suffered. The ISM left TRW no choice but

to conduct a thorough investigation of the allegations

against Ma. 1 Rec. at 52 (the contractor shall “imme-

diately .. . initiate a preliminary inquiry to ascertain all of

the circumstances surrounding the reported loss, compro-

mise, suspected compromise or failure to comply with a

requirement of this manual”). TRW specifically invoked

the ISM in its December 13, 1985 letter to Ma advising

him of the necessity for submitting himself to the security

interrogation. The letter stated, “These security allega-

tions are a serious matter which, if true, would be viola-

tions of TRW’s security policies and of the Industrial

Security Manual which is issued by the Defense Investi-

gation Service.” Supp. Rec. at 84. Clearly, TRW under-

stood the ISM mandated the interrogation. Finally, the

ISM compelled TRW’s December 20, 1985 report to the

Defense Industrial Security Clearance Office concerning

the allegations about Ma.

Turning to the last Edmonson factor, the injury to Jack

Ma caused by TRW’s violation of Ma's privilege against

self-incrimination was uniquely aggravated by the inci-

dents of governmental authority. The result of the gov-

ernment-mandated security interrogation could have

been criminal prosecution and/or termination of Ma’s

employment, his security clearance and his ability to find

employment anywhere within the vast national defense

program. In sum, the facts of this case fully satisfy all of

the Edmonson criteria for state action.

Rather than applying the Edmonson test, however, the

California Court of Appeal focused almost exclusively on

a principle drawn from Jackson v. Metropolitan Edison Co.,

419 U.S. 345, 351, 358 (1974) — “the involvement of the

government in the particular decision about which a

plaintiff complains.” Pet. App. at A-19. While briefly

acknowledging Lugar v. Edmondson Oil Co., 457 U.S. 922

(1982), the court relied principally on Blum v. Yaretsky, 457

U.S. 991 (1982) and Rendell-Baker v. Kohn, 457 U.S. 830

(1982), neither of which involved a traditional, indeed

exclusively, governmental function such as national

defense. The court recognized that the ISM mandated

TRW’s “ ‘preliminary inquiry to ascertain all of the circum-

stances’ ” surrounding Ma’s suspected compromise of

classified information. Pet. App. at A-23; 1 Rec. at 52

(emphasis added). The court reasoned, nonetheless, that

“the ISM did not specify how this inquiry was to be

conducted. The ISM did not even specifically require that

an interview of the suspected employee be conducted

much less mention the presence of counsel.” Pet. App. at

A-23. Thus, it concluded “TRW’s decision not to allow

Ma’s attorney to attend the interview was a private deci-

sion not involving federal government action.” Pet. App.

at A-23. This approach flies in the face of West v. Atkins,

487 U.S. 42 (1988).

West made clear that Blum and Rendell-Baker do not

stand for the proposition that the exercise of professional

judgment forecloses state action. To the contrary, West

held that professional discretion and state action are com-

patible. Applying West’s principles to this case leads to a

result opposite from the one reached by the court below.

Just as the prison doctor’s decision not to recommend

surgery did not foreclose a finding of state action in West,

TRW’s decision to interview Ma without counsel, made in

the exercise of its professional judgment as a defense

contractor required to implement the ISM, did not fore-

close state action here. In fact, the discretion a practicing

physician enjoys is far broader than the discretion the

government vested in TRW. The ISM mandated TRW’s

response to even suspected security breaches, and the

Security Agreement provided that TRW’s internal pro-

cedures for responding had to. be approved by the

Department of Defense.

In United States v. Davis, 482 F.2d 893 (9th Cir. 1973),

Judge Browning went to the heart of the matter in hold-

ing that employees of private airlines who conducted

airport searches pursuant to governmental directive were

government actors. He explained:

Constitutional limitations on governmental

action would be severely undercut if the govern-

ment were allowed to actively encourage con-

duct by “private” persons or entities that is

prohibited to the government itself.

It makes no difference that the act of open-

ing appellant’s briefcase was accomplished by a

“private” airline employee rather than a “pub-

lic” official. The search was part of the overall,

nationwide anti-hijacking effort, and constituted

“state action” for purposes of the Fourth

Amendment.

Id. at 904 (footnote omitted); accord, United States v. Ross,

32 F.3d 1411 (9th Cir. 1994).

So it is here. TRW’s attempted interrogation of Jack

Ma was part of the federal government’s national security

effort. Realistically, immediate interrogation of Jack Ma

was the only sensible choice available to TRW. Under the

circumstances, section 7(c) of the ISM required TRW to

question Jack Ma as surely as if Ma’s name were written

into the regulations. 1 Rec. at 52.

Ill. THIS CASE PRESENTS A FIFTH AMENDMENT

ISSUE WHICH HAS DIVIDED THE CIRCUIT

COURTS OF APPEALS, NAMELY, WHETHER

THE “PROPER PROCEEDINGS” TO WHICH

THIS COURT HAS ALLUDED REQUIRE A PUB-

LIC EMPLOYER TO ADVISE ITS EMPLOYEE

THAT HIS STATEMENTS WILL BE PROTECTED

BY USE IMMUNITY BEFORE THE EMPLOYER

CAN DISCIPLINE HIM FOR REFUSING TO

ANSWER JOB-RELATED QUESTIONS.

This case involves a question left open by a series of

Supreme Court decisions beginning with Garrity v. New

Jersey, 385 U.S. 493 (1967). In Garrity, this Court defined

the Fifth Amendment rights of public employees who are

forced to choose between termination and self-incrimina-

tion, holding that statements made by employees under

threat of discharge are compelled, and thus cannot be

used against them in subsequent criminal proceedings. Id.

at 500. In Gardner v. Broderick, 392 U.S. 273 (1968), and

Uniformed Sanitation Men Ass’n v. Comm’r of Sanitation, 392

U.S. 280 (1968) [hereinafter Sanitation Men I], the Court

held that public employees may not be terminated for

refusing to waive the immunity guaranteed by Garrity

and answer the employer’s questions. Sanitation Men I

established, nonetheless, that an employer may require

an employee to answer “questions specifically, directly,

and narrowly relat[ed] to the performance of [his] official

duties on pain of dismissal from public employment with-

out requiring relinquishment of the benefits of the consti-

tutional privilege.” Sanitation Men I, 392 U.S. at 284. In

other words, “[P]ublic employees [ ] subject themselves

to dismissal if they refuse to account for their perfor-

mance of their public trust, after proper proceedings, which

do not involve an attempt to coerce them to relinquish

their constitutional rights.” Jd. at 285 (emphasis added).

Garrity and its progeny left unresolved the following

issue: When an employer compels an employee to answer

questions under threat of discharge, do “proper proceed-

ings” require the employer to advise the employee that

any answers he gives cannot be used against him in a

subsequent criminal proceeding before the employer can

terminate him for refusal to answer? Circuit court deci-

sions addressing this issue are in clear conflict. See FOP,

Lodge No. 5 v. City of Philadelphia, 859 F.2d 276, 282 (3d Cir.

1988) (explicitly recognizing split in the circuits);

D’Acquisto v. Washington, 640 F. Supp. 594, 623 (N.D.IIl.

1986) (same).

On one side, the Second and Seventh Circuits hold

that the Fifth Amendment mandates such advice and

assurance as part of the “proper proceedings” which,

according to Sanitation Men I, must precede termination

for refusal to answer the employer’s questions. United

States v. Devitt, 499 F.2d 135, 141 (7th Cir. 1974), cert.

denied, 421 U.S. 975 (1975); Confederation of Police v. Con-

lisk, 489 F.2d 891, 894-895 (7th Cir. 1973), cert. denied sub

nom. Rochford v. Confederation of Police, 416 U.S. 956 (1974);

Uniformed Sanitation Men Ass‘n v. Comm'r of Sanitation, 426

F.2d 619, 626-627 (2d Cir. 1970), cert. denied, 406 U.S. 961

(1972) [hereinafter “Sanitation Men II]. The Court of

Claims and a district court in the Seventh Circuit share

this view. Kalkines v. United States, 473 F.2d 1391, 1393 (Ct.

Cl. 1973); D’Acquisto v. Washington, 640 F. Supp. 594

(N.D.Ill. 1986). As the Conlisk court explained, “[T]he

Gardner and Uniformed Sanitation Men decisions indicate

that a public employer may discharge an employee for

refusal to answer where the employer both asks specific

questions relating to the employee’s official duties and

advises the employee of the consequences of his choice, i.e., that

failure to answer will result in dismissal but that answers

he gives and fruits thereof cannot be used against him in

criminal proceedings.” Conlisk, 489 F.2d at 894 (emphasis

added). S

This view is supported by language from this Court’s

own decisions which speaks of an affirmative grant of use

immunity. See Lefkowitz v. Cunningham, 431 U.S. 801, 809

(1977) (emphasis added) (“Once proper use immunity is

granted, the state may use its contempt powers to compel

testimony concerning the conduct of public office, with-

out forfeiting the opportunity to prosecute the witness on

the basis of evidence derived from other sources.”);

Lefkowitz v. Turley, 414 U.S. 70, 78, 85 (1973) (emphasis

added) (“[A] witness protected by the privilege may

rightfully refuse to answer unless and until he is protected

at least against the use of his compelled answers and evidence

derived therefrom in any subsequent criminal case in which he

is a defendant. . . . [¥] [A]nswers elicited upon the threat of

loss of employment are compelled and inadmissible in

evidence. Hence, if answers are to be required in such

a atid ai tad VS ares valph

circumstances States must offer to the witness whatever

immunity is required to supplant the privilege... . “).

Moreover, this view recognizes that the typical

employee is unsophisticated in legal affairs and cannot be

expected to know the rules of Garrity and its progeny. See,

e.g., Benjamin v. City of Montgomery, 785 F.2d 959, 962

(11th Cir.), cert. denied, 479 U.S. 984 (1986) (“[W]e cannot

require public employees to speculate whether their

statements will later be excluded under Garrity.”);

D'Acquisto, 640 F. Supp. at 624 (“[O]fficers under inter-

rogation are not expected to know the ‘ins’ and ‘outs’ of

Fifth Amendment law, and they should not have to guess

whether or not they have criminal immunity for their

statements.”). Just as a criminal suspect must be told that

he has a right to remain silent and that his statements can

be used against him, Miranda v. Arizona, 384 U.S. 436,

467-469 (1966), an employee protected under Garrity must

be told that if he chooses to speak, his statements cannot

be used against him. As this Court has observed, aware-

ness of the privilege against self-incrimination is “the

threshold requirement for an intelligent decision as to its

exercise.” Id. at 468.

Under this rule, Jack Ma would have been able to

make an informed choice between his options. He could

have saved his job by answering TRW’s questions, secure

in the knowledge that the answers he gave and the fruits

thereof could not have resulted in criminal sanctions. Or,

he could have chosen to sacrifice his job out of fear that

his answers might have been misinterpreted or skewed,

and thus might have provoked a criminal prosecution

and, potentially, conviction.

On the other side of the split in authority, the Fifth

and Eleventh Circuits hold that no affirmative tender of

immunity is required before a public employer can fire an

employee for refusing to answer questions directly and

narrowly related to his duties. Gulden v. McCorkle, 680

F.2d 1070 (5th Cir. 1982), cert. denied, 459 U.S. 1206 (1983);

Erwin v. Price, 778 F.2d 668 (11th Cir. 1985); Hester v. City

of Milledgeville, 777 F.2d 1492 (11th Cir. 1985). According

to the Fifth Circuit, “[The] theory that an affirmative

tender of immunity was mandated by the holdings of

Lefkowitz I and II, Sanitation Men and Gardner finds no

support in those cases.® . . . An employee who is com-

pelled to answer questions (but who is not compelled to

waive immunity) is protected by Garrity from subsequent

use of those answers in a criminal prosecution. It is the

very fact that the testimony was compelled which pre-

vents its use in subsequent proceedings, not any affirma-

tive tender of immunity.” Gulden, 680 F.2d at 1075. This

view was implicitly adopted by the California Court of

Appeal in this case. Pet. App. at A-33 to A-34.

Jack Ma suffered the consequences of this rule. No

one told him statements he might give to TRW could not

be used against him in any criminal proceedings. He did

not and could not have been expected to know what

Garrity held because he is not only unsophisticated in

legal matters, but also a naturalized citizen with only a

limited command of English. Ma refused to answer

6 “While Justice Stevens, in dissent in Lefkowitz II [Lefkowitz

v. Cunningham, 431 U.S. 801 (1977)], referred to a ‘tender of

immunity,’ such a requirement has never been an explicit or

implicit condition of the relevant holdings.” (Original footnote.)

TRW’s questions because he honestly feared his answers,

misconstrued or slanted as part of a “trump up,” could

have brought him life imprisonment or death. Conse-

quently, he lost his job and his security clearance.

This Court should not lose sight of the critical fact

that Ma was willing to cooperate with his employer and

attend the interview. He simply wanted to bring his law-

yer along, as he would have been allowed to do if the

government itself had been conducting the interview. The

Defense Investigative Service Manual for Personnel Secu-

rity Investigations, which governs security interviews of

the type involved here when conducted by the Depart-

ment of Defense itself, expressly recognizes and honors

the interviewee’s right to counsel.” Supp. Rec. at 38-40.

Moreover, if TRW’s suspicions about Ma were con-

firmed at the interrogation, Ma could have faced a charge

of espionage, one of the most heinous federal crimes,

which carries possible penalties of death or life imprison-

ment. 18 U.S.C.A. § 794(a) (West 1976). In light of these

grave consequences, surely the Fifth Amendment offered

Ma the protection of his own retained counsel. “The

Court has held that ‘the availability of the [Fifth Amend-

ment] privilege does not turn upon the type of proceed-

ing in which its protection is invoked, but upon the nature

of the statement or admission and the exposure which it

invites.’ ” Estelle v. Smith, 451 U.S. 454, 471 (1981) (quoting

In re Gault, 387 U.S. 1, 49 (1967)) (emphasis added).

It should be stressed that Ma’s situation was excep-

tionally perilous. Thus, Ma seeks a limited ruling that

7 It should also be remembered that Ma had brought his

attorney to an earlier meeting with TRW’s own lawyer.

when a defense contractor requires an employee to sub-

mit to an interrogation because it suspects a crime as

serious as espionage, constitutional safeguards must

come into play. We do not suggest that every interview of

an employee by a public employer concerning any poten-

tial infraction triggers a full panoply of constitutional

rights.

In sum, Jack Ma was confronted with the intolerable

choice between submitting to TRW’s interrogation and

risking his liberty or even his life, and refusing to submit

and forfeiting his job and livelihood as a physicist. TRW

did not inform Ma that his statements could not be used

against him in a subsequent criminal proceeding. More-

over, TRW refused to let Ma bring his attorney to the

interrogation to help him safeguard his privilege against

self-incrimination and exercise it intelligently. The Con-

stitution should not be a passive observer of such a

needlessly harsh dilemma.

CONCLUSION

For all the foregoing reasons, the petition for a writ

of certiorari should be granted.

Respectfully Submitted,

Horvitz & Levy

Exus J. Horvitz

Counsel of Record

ELIZABETH SKORCZ ANTHONY

ALLAN F. GROSSMAN

Counsel for Petitioner

Jack Ma

APPENDIX

Page

California Court of Appeal’s Opinion.......------- A-1

Los Angeles County Superior Court’s Statement

of Decision Following Bench Trial of Right to

Attorney Issue .........--0eeeeeeee cece reeeeeee: A-41

California Court of Appeal’s Order Denying Peti-

tion for Rehearing........----sesseeeeeeee etree: A-47

California Supreme Court’s Order Denying Peti-

tion for Review .......--eeeceee cere eeeteeeeeees A-48

A-1

[No. B072479. Second Dist., Div. Four. June 22, 1994.]

TRW, INC., Petitioner, v.

THE SUPERIOR COURT OF

LOS ANGELES COUNTY, Respondent;

JACK MA, Real Party in Interest.

SUMMARY

A physicist employed by a defense contractor was

suspended and then fired after he refused to attend an

internal security interview without an attorney. His fail-

ure to attend and his alleged contacts with foreign

nationals were reported to the Federal Bureau of Investi-

gation by the contractor. The physicist sued the contrac-

tor for tortious termination, breach of the implied

covenant of good faith and fair dealing, and malicious

prosecution. Both parties filed evidentiary motions in

limine. The trial court ruled that the contractor was a

“government actor” when it ordered the physicist to

attend the interview, that he was entitled to an attorney at

the interview, and that his termination violated the public

policy behind the privilege against self-incrimination.

(Superior Court of Los Angeles County, No. SWC96472,

Harry T. Shafer, Judge.*)

The Court of Appeal issued a writ of mandate direct-

ing the trial court to vacate its orders, and to make a new

and different order that defendant was not a government

actor and that plaintiff did not have a constitutional right

*Retired judge of the Los Angeles Superior Court sitting

under assignment by the Chairperson of the Judicial Council.

A-2

to counsel at the interview. The court held that the con-

duct of the defense contractor, a private person, was not

rendered governmental conduct by its contract with the

federal government, which required it to report potential

breaches of security but did not specify how preliminary

inquiries were to be conducted. Even if the contractor

were treated as a governmental employer, the court held,

the proposed interview did not involve custodial inter-

rogation so as to entitle the employee to the presence of

an attorney, and the employee’s termination did not vio-

late public policy by punishing him for asserting the

privilege against self-incrimination. (Opinion by Vogel

(C. S.), J., with Hastings, J., concurring. Separate concur-

ring and dissenting opinion by Woods (A. M.), P.J.)

HEADNOTES

Classified to California Digest of Official Reports

(1) Mandamus and Prohibition § 61 - Mamdamus -

Procedure — Alternative Writ - At Direction of

Supreme Court. — A Supreme Court order directing

the issuance of an alternative writ is a determination

that the petitioner is without an adequate remedy

and nothing more. It is not an indication that the

Supreme Court has found that the petitioner is cor-

rect on the merits.

(2) Criminal Law § 119 - Interrogation —- Advisement

of Constitutional Rights — Private Person’s Duty:

Employer and Employee § 5 — Contracts of Employ-

ment — Mutual Duties and Rights - Right of

Defense Contractor’s Employee to Have Counsel

Present at Security Interview. — In a wrongful termi-

nation action by an employee against a defense con-

tractor, the trial court erroneously ruled that the

A-3

contractor’s refusal to allow the employee to bring

his attorney to a security interview was subject to

constitutional restraint on the ground that the con-

tractor was a “government actor.” Ordinarily, U.S.

Const., 5th Amend., rights are secured only against

intrusions by the government, not by private per-

sons. Government agents did not participate in the

contractor’s security interviews, and the Department

of Defense’s internal security manual did not specify

how preliminary inquiries into security breaches

were to be conducted. Absent evidence that the gov-

ernment required or encouraged the denial of coun-

sel, the contractor’s private conduct was not

| transformed into governmental action merely

because it was contractually obligated to make an

inquiry, or because its possession of classified infor-

mation was subject to regulation.

(3a, 3b) Criminal Law § 119 - Interrogation - Advise-

ment of Constitutional Rights - Private Person’s

Duty -— Necessity of. Custodial Interrogation:

Employer and Employee § 5 - Contracts of Employ-

ment - Mutual Duties and Rights - Right of

Defense Contractor’s Employee to Bring Counsel to

Security Interview. - In a wrongful termination

action by an employee against a defense contractor,

the trial court erroneously ruled that the contractor's

refusal to let the employee bring his attorney to a

security interview violated the employee’s right to

counsel under U.S. Const., 5th Amend. The right to

the presence of counsel does not arise in the absence

of custodial interrogation, meaning formal arrest or

similar loss of freedom of movement. The

employee’s fear that he could lose his job or security

clearance, or be subject to future criminal investiga-

tion, did not make the interview a custodial one. No

reasonable person could conclude that the proposed

interview, which the employee refused to attend,

(4)

(5)

A-4

would have been custodial; employees were not

detained, government agents did not participate, the

employee admitted knowing that he could not be

detained, and he subsequently spoke to a Depart-

ment of Defense agent without his lawyer.

[What constitutes “custodial interrogation”

within rule of Miranda v Arizona requiring that

suspect be informed of his federal constitutional

rights before custodial interrogation, note, 31

A.L.R.3d_ 565.]

Criminal Law § 615 —- Appellate Review -— Ques-

tions of Law and Fact —- Whether Interrogation Is

Custodial. - The test of whether the circumstances

of an interrogation are custodial is an objective one,

based on what a reasonable person in the suspect's

circumstances would perceive. This is a mixed ques-

tion of law and fact, as to which the appellate court

exercises its independent conclusion on the legal

question of reasonableness, based on the facts as

found by the trial court if supported by substantial

evidence.

Public Officers and Employees § 30 - Removal

from Office — Refusal to Answer Questions Related

to Duties: Employer and Employee § 9 - Wrongful

Discharge —- Employee’s Refusal to Attend Security

Interview. — In a wrongful termination action against

a defense contractor by an employee who was fired

for refusing to attend a security interview without

his attorney, the employee could not rely on his

constitutional right to remain silent at the security

interview to show a violation of public policy by the

contractor. Even if the contractor were treated as a

governmental employer, a public employer may ter-

minate a public employee who refuses to answer

questions directly and specifically related to perfor-

mance of the employee’s duties. An employee’s right

A-5

against self-incrimination is adequately protected by

precluding use of his or her statements in a criminal

proceeding; the loss of his or her job is not barred if

it is imposed for failure to answer a relevant inquiry

and not for refusal to give up a constitutional right.

Thus, the contractor had the right to question the

employee about alleged security breaches committed

in the course of his employment; the employee could

refuse to answer, but his resulting termination did

not violate public policy.

[See 2 Witkin, Summary of Cal. Law (9th ed.

1989) Agency and Employment, § 188.]

COUNSEL

Munger, Tolles & Olson, Terry E. Sanchez and Gary D.

Roberts for Petitioner.

No appearance for Respondent.

Horvitz & Levy, George P. Schiavelli, Allan F. Grossman

and Ellis J. Horvitz for Real Party in Interest.

OPINION

VOGEL (C. S.), J. - TRW, Inc., petitioned this court for a

writ of mandate seeking relief from the trial court’s

orders that TRW was a government actor when it

requested an interview of an employee regarding an

alleged violation of security regulations and that an

employee has a Fifth Amendment right to counsel at any

such interview. The trial court’s rulings were in response

to motions in limine of the real party in interest, Jack Ma,

who filed this action for tortious termination. The trial

A-6

has been stayed by agreement of the parties and pending

review of this matter.

FACTUAL BACKGROUND

TRW’'s Security System

TRW is a privately owned company and a defense

contractor producing goods and services for the United

States Government. Some government contracts involve

classified information and require TRW to sign a separate

_ contract with the Defense Investigative Service (DIS), an

administrative agency within the Department of Defense.

The contract with DIS obligates TRW to safeguard classi-

fied information and to maintain a security system in

accordance with the DIS’s Industrial Security Manual

(ISM). The ISM provides that TRW report information

coming to its attention of any of its employees who have

been cleared for access to classified information indicat-

ing such access may not be clearly consistent with the

national interest.

To fulfill its obligations according to the ISM, TRW is

required to establish procedures to allow employees to

report the loss, compromise, or suspected compromise of

classified information to TRW’s Facility Security Officer

(FSO). If a suspected compromise is reported, TRW is

required to report it to the Defense Industrial Security

Clearance Office (DISCO) and must initiate a preliminary

inquiry to ascertain the circumstances surrounding the

1 The FSO is appointed by TRW to supervise and direct

security measures according to United States Government stan-

dards for classified material.

A-7

suspected compromise. If the preliminary inquiry con-

firms that a suspected compromise of classified informa-

tion occurred, then TRW is required to make a report of

the incident to the Cognizant Security Office (CSO)? and

the FBI and undertake a complete investigation unless

directed not to do so by the CSO.

The procedures for implementing reporting prelimi-

nary inquiries and investigations for any suspected

breaches of security are established by TRW, subject only

to periodic audits by DIS to verify their effectiveness.?

2 The CSO is the Office of the Director of Industrial Security

for DIS for the appropriate geographical area for the facility.

3 The ISM provides in relevant part:

“6. Reports.

“a. The contractor shall immediately submit in writing to

the CSO a report of any of the following.

“(1) Espionage, Sabotage, or Subversive Activities. The

contractor shall submit an information copy of any report filed

under paragraph 6c with the FBI.

“(2) Loss, Compromise, or Suspected Compromise. The

contractor shall submit a report, classified, if appropriate, of any

loss, compromise (including deliberate compromise), Or sus-

pected compromise of classified information.

“(3) Other Security Violations. The contractor shall sub-

mit a report, in addition to the requirement of paragraph (2)

above, classified, if appropriate, of each violation of the require-

ments of this manual involving Tor Secret or special access

information, Restricrep Data, or COMSEC information, regard-

less of classification, which the contractor possesses in connec-

tion with UA contracts or programs.

“pb. For all cleared personnel, the contractor shall submit

the following reports immediately to the DISCO, Columbus,

Ohio 43216, unless the individual involved is or was required to

be cleared in connection with the FCL pursuant to paragraph aa,

in which case the report will be submitted to the CSO.

A-8

Compliance with the established procedures is

administered and executed entirely by TRW employees.

“(1) Adverse Information. Contractors shall submit

reports, classified, if appropriate, of any information coming to

their attention concerning any of their employees who have

been cleared or who are in the process of being cleared for

access to classified information, which indicate that such access

or determination may not be clearly consistent with the national

interest... .

“7. Loss, Compromise, or Suspected Compromise of Classified

Information.

“a. The contractor shall establish a procedure to ensure

that each loss, compromise, or suspected compromise of classi-

fied information and each failure to comply with a requirement

of this manual is immediately reported to the FSO... .

“b. The contractor shall establish such procedures as are

necessary to ensure that any employee discovering the loss,

compromise, or suspected compromise of classified information

outside a facility promptly reports such a fact to:

“(1) the nearest office of the FBI, and furnishes suffi-

cient information to assist in identification of the information -

if the loss, compromise, or suspected compromise occurs out-

side of the U.S., the nearest U.S. authorities shall be notified in

lieu of the FBI; and

“(2) the FSO, by the fastest means of communication,

who will then comply with paragraph c below.

“c. Immediately on receipt of a report, in accordance with

paragraphs a or b above, the contractor shall initiate a prelimi-

nary inquiry to ascertain all of the circumstances surrounding

the reported loss, compromise, suspected compromise, or fail-

ure to comply with a requirement of this manual. In the event of

loss, a thorough search shall be conducted for the classified

material.

“d. If the contractor’s inquiry prescribed in paragraph c

above confirms: (i) that a loss, compromise, or suspected com-

promise of any classified information occurred . .. , the contrac-

tor immediately shall submit a report of the incident to the CSO

A-9

Members of TRW’s security department do not make

arrests, carry weapons, or wear uniforms or law enforce-

ment badges, and the ISM does not require or authorize

them to do so. There is no participation by government

agents in TRW’s preliminary inquiries pertaining to a

suspected compromise of security. Other factual refer-

ences to TRW’s security program will be provided in the

analysis of the issues that follow.

Preliminary Inquiry About Ma

The real party in interest, Jack Ma, was hired as a

physicist by TRW in January of 1985. He obtained the

necessary security clearance and was assigned to the

Electromagnetic Survivability and Vulnerability Depart-

ment (ESV) involving the protection from nuclear attack.

Ma was initially assigned to a section under the supervi-

sion of Dr. Tim Rynne. In June of 1985, over his objection,

Ma was reassigned to another section supervised by Dr.

Mike Schmidt.

In November 1985, the head of the ESV, Charles S.

Wuller, was contacted by TRW employee George Hoff-

man who expressed concerns that Ma may have violated

security regulations and exhibited bizarre behavior. The

following day, Hoffman sent Wuller a follow up mem-

orandum reporting that Ma had made telephone contacts

with foreign nationals and had been heard using the

in accordance with paragraph 6a(2) or 6a(3), as appropriate, and

conduct a complete investigation of the incident unless other-

wise notified by the CSO. Submission of the report shall not be

deferred pending completion of the contractor’s investigation.”

(Fns. omitted.)

A-10

4 4 WW hed

‘ ‘warheads,

”

terms and phrases silo penetration,’ ”

“ “space weaponry, ” and “ ‘TRW is working on... . ’”

Hoffman’s report also states that Ma informed another

TRW employee he “is ‘working on a system that would

cause hostile missiles to turn around and return to the

point of launch and explode,’ ” and that Ma is program

manager of 100 to 1000 persons on a project to analyze

“trajectory reversal.” The memorandum attributes to Ma

the claim that he traveled to Europe to meet with “non-

US” nationals to discuss quantum gravity reversal and is

a sales agent shipping computer hardware to Europe.

Hoffman had expressed his concerns about Ma to section

heads Schmidt and Rynne in mid-July, several months

before contacting Wuller.

Wuller regarded Hoffman’s report about Ma as an

indication of “[an] alleged security violation[]

and... bizarre behavior.” He consulted with the director

of personnel, Karen D. Wolff. Wuller was not satisfied

that Ma had committed any violation of security since the

terms and phrases attributed to him appeared in news-

papers and magazines. He was more concerned about

Ma’s failure to report his purported contacts with foreign

nationals. Although he thought the incident was “sort of

a red flag,” he did not believe Ma had committed any

crime and did not report the incident to any law enforce-

ment agencies. However, Wuller sent Hoffman’s mem-

orandum to TRW’s security department asking for an

investigation and determination if any action should be

taken with regard to Ma’s clearance and access to secret

material.

Wuller summoned Ma to his office and met with him,

Schmidt, and Wolff. Wuller inquired if Ma was ill or

A-11

having any personal problems and carried on a brief

conversation about quantum gravity. Wuller asked Ma to

see Valerie Miller, a TRW nurse. Wuller never told Ma

anything regarding his alleged violation of security regu-

lations.

When Ma met with Miller, he thought she was an

ombudsman and did not realize she was in TRW’s medi-

cal department. She indicated she was aware of some

controversy between Ma and Schmidt and asked for

information about it. Ma told her Schmidt was stonewall-

ing him on Ma’s request for classified materials.

Miller informed Ma an appointment had been made

for him to see a TRW psychiatrist, Dr. Purchard, that

afternoon and to not report to work on the following

Monday. Ma doubted Miller’s directions and telephoned

Wuller, who told Ma to see Dr. Purchard that evening and

they would contact him about returning to work after

they received the psychiatrist report.

Ma was disturbed about the way he was treated. He

did not know Miller was a nurse when he was referred to

her and was unaware that anyone scheduled an appoint-

ment for him to see a psychiatrist. He was apprehensive

about the suggestion that he was mentally ill and he was

concerned he might end up in a mental institution. He

thought it was “probably a trump up” and cancelled his

appointment with Dr. Purchard and considered hiring a

lawyer.

On Monday, he went to TRW to see Dr. Plebuch, the

head of the laboratory and Wuller’s boss. A meeting with

Plebuch took place with Wuller and Wolff in attendance.

Ma informed Plebuch about his difficulties at work and

A-12

the direction to see a psychiatrist before returning to

work. Dr. Plebuch told Ma to not return to work until he

was contacted. On Wednesday, Ma received a certified

letter from TRW advising him that “management”

referred him to Dr. Purchard for an evaluation and “sug-

gest[ed}” he schedule an appointment by the following

Friday. The letter further advised him, until the medical

report is “evaluated, you should not report for work.”

Instead of following TRW’s suggestion, Ma engaged a

lawyer, Dennis A. Devermont.

Devermont contacted TRW and arranged a meeting

among Ma, Devermont, and TRW’s lawyer, Inese B.

Lacey. Lacey opened the meeting by mentioning that she

had heard about Ma’s controversy with his supervisor.

Ma essentially repeated what he had told Miller about his

relationship with Schmidt and the difficulty he had

obtaining access to documents. She inquired if Ma had

filed a complaint with the grievance committee. Ma

responded “no” and that he did not even know of any

such committee. The meeting lasted three hours, but,

again, no mention was made of any concern about a

violation of TRW’s security regulations.

Following the meeting with Lacey, Ma received a

telephone call from Earl Nishimura of TRW’s security

department asking Ma to attend an interview. Nishimura

told Ma that he had “sort of an obligation to come in and

speak to us regarding foreign contacts” but “this was not

a criminal investigation.” Ma told Nishimura he had a

lawyer who was handling the matter “[and] you are not

supposed to talk to me, and you should talk to my

lawyer.” Nishimura telephoned Devermont and told him

he wanted to interview Ma regarding an “investigation

A-13

into the allegation for the violation of the company rules,

regulations, and procedures and that there was no crimi-

nal investigation involved and that an attorney was not

necessary.” Devermont advised Nishimura Ma would

attend an interview accompanied by his counsel, but not

otherwise, and later confirmed Ma’s position in a letter to

TRW’s lawyer: “Jack Ma and myself would be more than

happy to attend a meeting where Mr. Ma could be ques-

tioned about security violations.” TRW viewed the

requested interview as an internal investigation of Ma’s

failure to report alleged contacts with foreign nationals

and Ma’s failure to attend as a lack of cooperation, con-

trary to a condition of his employment.

On December 13, 1985, TRW’s personnel manager

sent Ma a letter about his failure to meet with the security

department on December 12 to “answer questions regard-

ing alleged security violations committed by you.” The

letter directed Ma to contact Nishimura for an appoint-

ment no later than December 20 and informed him that

he had been suspended without pay. When Ma did not

attend on December 12, Nishimura contacted an FBI

agent and informed him of the allegations about Ma’s

contacts with foreign nationals and his failure to attend

an interview. Nishimura stated his reason for doing this

was to protect himself and not because he believed any

crime had been committed.

Suspension and Termination of Ma

When Ma had not contacted Nishimura to arrange an

interview by December 20, 1985, TRW sent DISCO a

report pursuant to ISM paragraph 6b(1) advising TRW

A-14

had received information that Ma had made contact with

foreign nationals. The report informed DISCO that TRW

began an investigation which revealed that Ma informed

coworkers of “such encounters and has been heard to use

phrases and wording vernacular such as “ ‘silo penetra-

tion,” “ ‘war heads,’ and ‘space weaponry.’ ” The letter

further reported that Ma refused to appear for a

requested interview and that he was suspended.

In March 1986, Ma was contacted by DIS and

requested to attend an interview regarding alleged secu-

rity violations. He did not contact his lawyer about the

interview and met with an agent of the Department of

Defense unaccompanied by counsel. Ma was aware the

interview covered the same subject matter Nishimura of

TRW wanted to discuss when he asked for a meeting. Ma

explained that he met the government agent because the

agent was not paid by TRW and because he told the agent

he would contact his lawyer if he felt the interview was

not being fairly conducted. The agent prepared a state-

ment of the information Ma gave him. Ma reviewed,

corrected, and signed it without the presence or advice of

his lawyer.

In December 1987, Ma’s suspension became perma-

nent and he was terminated for insubordination. Ma com-

menced the present action against TRW. On March 19,

1991, Ma filed his second amended complaint alleging

tortious termination based on public policy, breach of the

implied covenant of good faith and fair dealing, and

malicious prosecution. TRW filed its answer denying

Ma’s allegations and asserted numerous affirmative

defenses on July 23, 1991.

A-15

PROCEDURAL BACKGROUND

Both TRW and Ma filed motions in limine addressing

the admission or exclusion of evidence and for the deter-

mination of the following issues of law: (1) was TRW

acting as a government agent; (2) did Ma have a Fifth

Amendment right to the representation of counsel at the

interview requested by TRW’s security department; and

(3) did Ma’s termination violate a firmly established pub-

lic policy under Tameny v. Atlantic Richfield Co. (1980) 27

Cal.3d 167 [164 Cal.Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th

314].

On December 29, 1992, the trial court filed its state-

ment of decision holding (1) as a matter of law, TRW

“ ‘was a government actor in ordering [Ma] to attend the

proposed security interrogation’ “; (2) there is an estab-

lished public policy that on or before November .1985, a

person ordered to attend a security interrogation to be

conducted in custodial setting which has focused upon

him as a criminal suspect and has reached the accusatory

stage is entitled to an attorney and the denial thereof is a

violation of his federal and California constitutional

rights and privileges against self-incrimination; (3) “[aJt

the time of the proposed security interrogation, the inves-

tigation had focused upon [Ma] as a criminal suspect and

had, therefore, reached the accusatory stage”; (4) “[t]he

interrogation to which [Ma] was ordered to go upon

penalty of losing his job was custodial.”

4 The trial court’s orders the TRW was a government actor

and that an individual has a constitutional right to counsel at a

security “interrogation” were made as a matter of law. The

orders that Ma was a criminal suspect and that an accusatory

A-16

TRW filed a petition for writ of mandate in this court

alleging it had no plain, speedy, or adequate remedy at

law because it could not otherwise avoid a costly, pro-

tracted, and perhaps unnecessary trial and appeal and

retrial based on its position that the trial court’s orders

are erroneous and would result in fundamental instruc-

tional error. TRW further contended that the trial court’s

orders threatened to place the entire defense industry

into a state of great uncertainty impairing its members’

ability to conduct business and safeguard classified infor-

mation. (1)‘see fn. 5) We denied the petition and TRW

petitioned for review in the Supreme Court, and the

matter was retransferred to us with directions to issue an

alternative writ. (Code Civ. Proc., § 1087.)>

CONTENTIONS

Ma’s tort cause of action alleges that his termination

was in violation of public policy. (Tameny v. Atlantic Rich-

field Co. supra, 27 Cal.3d 167, 177.) The public policy

which he claims was violated is the privilege against self-

incrimination in the Fifth Amendment of the United

States Constitution, as implemented by the right to the

presence of an attorney at a custodial interrogation under

stage had been reached and that the proposed “interrogation”

was custodial were in the nature of findings based on “oral and

documentary” evidence and would be binding on the jury.

5 An order of the Supreme Court directing an alternative

writ be issued is a determination that the petitioner is without

an adequate remedy and nothing more. It is not an indication

that the Supreme Court has found that the petitioner is correct

on the merits. (Bridgestone/Firestone, Inc. v. Superior Court (1992)

7 Cal.App.4th 1384, 1389, fn. 4 [9 Cal.Rptr.2d 709].)

A-17

Miranda v. Arizona (1966) 384 U.S. 436 [16 L.Ed.2d 694, 86

S.Ct. 1602, 10 A.L.R.3d 974]. Ma contends that although

the Fifth Amendment ordinarily applies only to govern-

mental action, TRW was a “federal government actor” in

the circumstances of this case, subject to the constraints

of the Constitution. He contends that the proposed inter-

nal security interview “would have been” the type at

which he had a constitutional right to the presence of an

attorney to implement his privilege against self-

incrimination. Therefore, he contends, TRW’s termination

of his employment because he refused to attend the inter-

view without an attorney violated an established public

policy under the Fifth Amendment of the United States

Constitution. In its rulings on the motions in limine, the

trial court agreed with Ma on each of these issues, as a

matter of law.

We conclude to the contrary, and direct the trial court

to vacate its orders. The conduct of TRW, a private per-

son, was not rendered governmental conduct by TRW’s

contract with the United States. Furthermore, even if

TRW were treated like a governmental employer, the

proposed interview did not involve custodial interroga-

tion which would have invoked the Miranda right to the

presence of an attorney, nor was Ma’s termination an

unlawful punishment for asserting the privilege against

self-incrimination. TRW’s conduct did not violate an

established public policy.

A-18

DISCUSSION

Governmental Actor

(2) The public policy asserted as the basis for Ma’s

cause of action for wrongful termination in violation of

public policy is the Fifth Amendment of the United States

Constitution. TRW is a private corporation. Ordinarily,

the rights in the Fifth Amendment are secured against

intrusions only by the government, not by private per-

sons. (Flagg Bros., Inc. v. Brooks (1978) 436 U.S. 149, 156 [56

L.Ed.2d 185, 193, 98 S.Ct. 1729].) The trial court neverthe-

less found that TRW’s refusal to allow Ma to bring his

attorney to the proposed security interview was subject

to constitutional constraint on the ground that TRW was

in this respect a “federal government actor.” The court

based its order on the following theories: (1) TRW was

performing a public function, i.e., nuclear weaponry and

national defense, (2) TRW was required by the ISM to

make inquiry into Ma’s suspected compromise of secu-

rity, and (3) TRW and the Department of Defense were in

a “symbiotic relationship,” “close nexus,” or “joint ven-

ture” regarding protection of national military secrets

and detection of violations.

Ma relies primarily on Burton v. Wilmington Pkg.

Auth. (1961) 365 U.S. 715 [6 L.Ed.2d 45, 81 S.Ct. 856],

where a privately owned restaurant which engaged in

racial discrimination was an integral part of a state-

owned public parking facility which depended upon

rental income from the restaurant to service the public

debt incurred to build the facility. The court held a patron

denied service at the restaurant could obtain injunctive

relief, despite the claim the restaurant owner’s conduct

A-19

was purely private, because under the particular circum-

stances of the lease “[t]he State has so far insinuated itself

into a position of interdependence with [the restaurant]

that it must be recognized as a joint participant in the

challenged activity.” (Id. at p. 725 [6 L.Ed.2d at p.52].) Ma

notes that in Holodnak v. Avco Corp., Avco-Lycoming Div.,

Stratford (2d Cir. 1975) 514 F.2d 285, 287, 289, Burton was

applied to a defense contractor who operated a plant on

land owned by the United States, with equipment owned

by the United States, subject to close supervision by

federal employees on the premises. Under those circum-

stances, the court held the private contractor must

observe the First Amendment free speech rights of the

contractor’s employee.

In the years since Burton, the United States Supreme

Court has tended to limit Burton® and to focus more

narrowly on the involvement of the government in the

particular decision about which a plaintiff complains.

(Jackson v. Metropolitan Edison Co. (1974) 419 U.S. 345, 351,

358 [42 L.Ed.2d 477, 484, 488, 95 S.Ct. 449] [fact that

private utility is subject to heavy regulation is not suffi-

cient to convert its action to state action; describes Bur-

ton’s holding as limited to lessees of public property];

6 Further, the court in United States v. Solomon (2d Cir. 1975)

509 F.2d 863, 871, commented that even in a Burton-type lease,

“It is one thing to say that the exclusion of blacks is no more

permissible for a restaurant which is a lessee of a state parking

authority than it would be for the authority itself; it would be

altogether different to say that a lease of state property carries

the privilege against self-incrimination on its back . . . if the

proprietor of the Eagle Coffee Shoppe had interrogated a waiter

suspected of snatching a patron’s purse.”

A-20

Lugar v. Edmondson Oil Co. (1982) 457 U.S. 922, 937-938 &

fn. 19 [73 L.Ed.2d 482, 495-496; 102 S.Ct. 2744] [official

involvement in seizure of debtor’s property].) in Lugar,

the court said, “First, the deprivation must be caused by

the exercise of some right or privilege created by the State

or by a rule of conduct imposed by the state or by a

person for whom the State is responsible. . . . Second, the

party charged with the deprivation must be a person who

may fairly be said to be a state actor.” (457 U.S. at p. 937

[73 L.Ed.2d at p. 495].)

In two cases decided contemporaneously with Lugar,

the court found insufficient governmental coercion,

encouragement, or involvement with the particular deci-

sions of private actors. One of these, as here, was an

employment termination case. In Rendell-Baker v. Kohn

(1982) 457 U.S. 830 [73 L.Ed.2d 418, 102 S.Ct. 2764], a

vocational counselor was fired from a position in a pri-

vate nonprofit school, to which maladjusted students

were referred by public school districts pursuant to state

law. The school was heavily regulated and received

almost all its funds from public sources. The plaintiff

alleged she was discharged from employment without

due process because she exercised First Amendment

rights. The court found no state action in the decision to

terminate the employee. The court first noted that “The

school . . . is not fundamentally different from many

private corporations whose business depends primarily

on contracts to build roads, bridges, dams, ships, or sub-

marines for the government. Acts of such private contrac-

tors do not become acts of the government by reason of

their significant or even total engagement in performing

public contracts.” (Id. at pp. 840-841 [73 L.Ed.2d at p.

OT EA eRe ee Sd a a al

A-21

427].) The court held, “Here the decisions to discharge the

petitioners were not compelled or even influenced by any

state regulation. . . . The most intrusive personnel regula-

tion promulgated by the various government agencies

was the requirement that the Committee on Criminal

Justice had the power to approve persons hired as voca-

tional counselors. Such a regulation is not sufficient to

make a decision to discharge, made by private manage-

ment, state action.” (Id. at pp. 841-842 [73 L.Ed.2d at p.

428].)

The court drew a similar distinction in Blum v. Yare-

tsky (1982) 457 U.S. 991 [73 L.Ed.2d 534, 102 S.Ct. 2777].

There Medicaid patients in nursing homes challenged on

due process grounds a decision to transfer them to a

lower level of care. The transfer decisions were made by a

review committee of attending physicians, but the plain-

tiffs argued state action was involved because govern-

ment regulations encouraged transfers and because

government benefits were reduced upon transfer. The

court stated the purpose of the rule that there be a suffi-

ciently close nexus between the state and the challenged

action is “that constitutional standards are invoked only

when it can be said that the State is responsible for the

specific conduct of which the plaintiff complains.” (Id. at

p. 1004 [73 L.Ed.2d at p. 546], italics in original.) Second,

the court said, “although the factual setting of each case

will be significant, our precedents indicate that a State

normally can be held responsible for a private decision

only when it has exercised coercive power or has pro-

vided such significant encouragement, either overt or

covert, that the choice must in law be deemed to be that

A-22

of the State.” (Ibid.) Construing the statute and regula-

tions, the court rejected the plaintiffs’ argument that the

government affirmatively commanded the transfers. (Id.

at pp. 1005-1009 [73 L.Ed.2d at pp. 547-550].) “Those

decisions ultimately turn on medical judgments made by

private parties according to professional standards that

are not established by the State.” (Id. at p. 1008 & fn. 19

[73 L.Ed.2d at p. 549].)”

The court followed Blum’s reasoning in a later case,

San Francisco Arts & Athletics v. U.S.O.C. (1987) 483 U.S.

522 [97 L.Ed.2d 427, 107 S.Ct. 2971]. There the United

States Olympic Committee, a private corporation created

by federal law, exercised its statutory power to restrain

the plaintiff from using the word “Olympic” in plaintiff's

event. The court found no state action in this conduct so

as to give rise to a Fifth Amendment claim. Citing Blum

and Rendell-Baker, the court said, “The USOC’s choice of

how to enforce its exclusive right to use the word ‘Olym-

pic’ simply is not a governmental decision. [Fn. omitted.]

There is no evidence that the Federal Government

coerced or encouraged the USOC in the exercise of its

right.” (Id. at p. 547 & fn. 29 [97 L.Ed.2d at p. 455].)

7 Unlike Rendell-Baker and the instant case, the private par-

ties were not defendants in Blum; the plaintiffs sued govern-

mental defendants. Nevertheless, the court found the private

party precedents instructive, and cited them interchangeably.

(Blum v. Yaretsky, supra, 457 U.S. at pp. 1003-1004 [73 L.Ed.2d at

pp. 545-546].) In Rendell-Baker, the court relied in turn upon

Blum. (Rendell-Baker v. Kohn, supra, 457 U.S. at pp. 839-841 [73

L.Ed.2d at pp. 426-428].)

A-23

Applying these precedents here, we conclude TRW’s

decision not to allow Ma’s attorney to attend the inter-

view was a private decision not involving federal govern-

ment action. The evidence is uncontradicted that

government agents did not participate in TRW’s internal

security interviews of employees. Robert Schwalls, for-

mer deputy director of DIS, declared: “DIS does not

participate in, coordinate with or direct a contractor's

internal security investigations, even if they are con-

ducted by the contractor to aid in its compliance with its

reporting obligations under the ISM. Each contractor ini-

tiates, coordinates, and directs its own security investiga-

tions.” Ma points out that the government offered

contractors a training course on compliance with the ISM,

but the evidence showed this training course included

nothing about how to conduct preliminary investigations.

Although paragraph 7(c) of the ISM required TRW to

“initiate a preliminary inquiry to ascertain all of the

circumstances surrounding the reported loss, compro-

mise, suspected compromise, or failure to comply with a

requirement of this manual,” the ISM did not specify how

this preliminary inquiry was to be conducted. The ISM

did not even specifically require that an interview of the

suspected employee be conducted much less mention the

presence of counsel. Despite a myriad of detailed pro-

cedures specified in the ISM, Ma points to none which

gives any direction concerning the participation of a law-

yer.

In the absence of evidence that the government

required or encouraged the particular deprivation of

which Ma complains, TRW’s private conduct was not

transformed into governmental action constrained by the

A-24

Fifth Amendment merely because TRW was contractually

obligated to make some inquiry. (Blum v. Yaretsky, supra,

457 U.S. at p. 1004 [73 L.Ed.2d at pp. 546-547]; Rendell-

Baker v. Kohn, supra, 457 U.S. at p. 851 [73 L.Ed.2d at p.

434]; San Francisco Arts & Athletics v. U.S.O.C., supra, 483

U.S. at p. 546 [97 L.Ed.2d at pp. 454-455]; Pinhas v. Summit

Health, Ltd. (9th Cir. 1990) 894 F.2d 1024, 1034 [no state

action in revocation of physician’s staff privileges by

private hospital’s peer review committee; although the

peer review procedure was mandated by government, the

particular decision to remove the physician was a private

decision based on professional judgments].)

This conclusion is consistent with two cases upon

which Ma heavily relies, which are distinguishable. Ma

points especially to Becker v. Philco Corporation (4th Cir.

1967) 372 F.2d 771, because that case likewise involved a

defense contractor and the ISM. There the court held that

in making the report to the government which is required

by paragraph 6(b) of the ISM, the contractor was immune

from liability for defamation. (Id. at pp. 773-774.) That

case is different because the ISM mandatorily required

that even mere suspicion be reported to the government.

(Id. at p. 774.) Here, the ISM required an inquiry, but did

not mandate the particular conduct of which Ma com-

plains. Ma also cites United States v. Davis (9th Cir. 1973)

482 F.2d 893, an airport search case in which the action of

a private air carrier was held directed by the federal

government, and hence subject to the Fourth Amend-

ment. There, however, the search of a boarding pas-

senger’s carry on luggage was specifically mandated by

federal regulations. (Id. at pp. 901, 902, & fn. 24.) Davis

was distinguished on this ground in United States v.

A-25

Gumerlock (9th Cir. 1979) 590 F.2d 794, 796-797, where an

air carrier’s search of freight was held private conduct not

mandated by the government’s program for passengers’

carry on luggage.

Thus, even though TRW’s possession of classified

information is subject to regulation by TRW’s contractual

relation with the federal government, TRW’s conduct in

this case was private, not specifically required or encour-

aged by the government, and was not subject to the Fifth

Amendment. In a slightly different but analogous context

of the Federal Tort Claims Act, under which the federal

government is liable for the conduct of its employees but

not the conduct of contractors, the Supreme Court com-

mented, “Billions of dollars of federal money are spent

each year on projects performed by people and institu-

tions which contract with the Government. These contrac-

tors act for and are paid by the United States. They are

responsible to the United States for compliance with the

specifications of a contract or grant, but they are largely

free to select the means of its implementation. . . .

Similarly, by contract, the Government may fix specific

and precise conditions to implement federal objectives.

Although such regulations are aimed at assuring compli-

ance with goals, the regulations do not convert the acts of

entrepreneurs . . . into federal governmental acts.”

(United States v. Orleans (1976) 425 U.S. 807, 815-816 [48

L.Ed.2d 390, 399, 96 S.Ct. 1971], fns. omitted.)

A-26

Ma’s Constitutional Claims

We have held that TRW was not a governmental actor

and therefore was not subject_to the restraint of the Fifth

Amendment. We also conclude that, even if TRW were a

governmental actor, TRW’s conduct did not violate Ma’s

Fifth Amendment rights and therefore did not violate

established public policy.

Presence of Attorney

(3a) Ma contends that TRW’s refusal to allow Ma to

have his attorney present at the security interview vio-

lated established public policy. The public policy which

Ma claims was violated by this conduct is the rule of

Miranda v. Arizona, supra, 384 U.S. 436, 471 [16 L.Ed.2d

694, 721-722], affording a person subjected to custodial

interrogation by law enforcement the right to the pres-

ence of an attorney during interrogation, in order to

effectuate the privilege against self-incrimination. The

parties refer to this right as the Fifth Amendment right to

counsel, as distinguished from the Sixth Amendment

right to counsel, which does not arise until formal crimi-

nal proceedings have commenced.

Ma’s argument is erroneous because the Fifth

Amendment right to the presence of counsel under Mir-

anda arises only if the person subjected to interrogation is

in custody, which has been defined as the equivalent of

formal arrest. Ma’s argument that other coercive circum-

stances can substitute for custody is unsupported by the

law. Ma’s argument that he was, or would have been,

subjected to custodial interrogation is unsupported by the

evidence.

A-27

The court in Miranda explained why a suspect sub-

jected to custodial interrogation must be warned of the

right to have an attorney present: “The circumstances

surrounding in-custody interrogation [incommunicado

interrogation in a police-dominated atmosphere] can

operate very quickly to overbear the will of one merely

made aware of his privilege by his interrogators. There-

fore, the right to have counsel present at the interrogation

is indispensable to the protection of the Fifth Amendment

privilege under the system we delineate today.” (384 U.S.

at p. 469 [16 L.Ed.2d at pp. 707-721].)

Although a suspect has a Fifth Amendment privilege

against self-incrimination even if not in custody, the right

to the presence of an attorney to implement that privilege

does not arise in the absence of custodial interrogation.

(Beckwith v. United States (1976) 425 U.S. 341, 347 [48

L.Ed.2d 1, 8, 96 S.Ct. 1612]; U.S. v. Long (11th Cir. 1989)

866 F.2d 402, 405; U.S. v. Lennick (7th Cir. 1990) 917 F.2d

974, 978; Boulware v. Battaglia (D.Del. 1972) 344 F.Supp.

889, 902.)

“Custody,” for the purpose of triggering the Fifth

Amendment right to counsel, is formal arrest or the loss

of freedom of movement to the same degree as formal

arrest. (California v. Beheler (1983) 463 U.S. 1121, 1125 [77

L.Ed.2d 1275, 1279-1280, 103 S.Ct. 3517].) Ma’s reliance on

language in Miranda referring to “freedom of action” is

misplaced. Ma argues that the phrase, “in custody or

otherwise deprived of his freedom of action in any signif-

icant way” (384 U.S. at p. 455 [16 L.Ed.2d at p. 707)),

means that coercive or intimidating circumstances, such

as the potential loss of a job, might in some circumstances

substitute for custody and require the presence of counsel

A-28

to prevent the suspect’s will from being overcome. The

Supreme Court has repeatedly rejected this interpretation

of Miranda’s language. Subsequent cases make clear that

freedom of action refers to freedom of physical move-

ment. In Oregon v. Mathiason (1977) 429 U.S. 492, 495 [50

L.Ed.2d 714, 719, 97 S.Ct. 711], the suspect was interro-

gated at a police station but was not under arrest or

restricted from leaving. The court rejected the notion that

other coercive factors could substitute for physical cus-

tody so as to require Miranda warnings. “Such a noncus-

todial situation is not converted to one in which Miranda

applies simply because a reviewing court concludes that,

even in the absence of any formal arrest or restraint on

freedom of movement, the questioning took place in a

‘coercive environment.’ Any interview of one suspected

of a crime by a police officer will have coercive aspects to

it, simply by virtue of the fact the police officer is part of

a law enforcement system which may ultimately cause

the suspect to be charged with a crime. But police officers

are not required to administer Miranda warnings to

everyone whom they question. Nor is the requirement of

warnings to be imposed simply because the questioning

takes place in the station house, or because the ques-

tioned person is one whom the police suspect. Miranda

warnings are required only where there has been such a

restriction on a person’s freedom as to render him ‘in

custody.’ It was that sort of coercive environment to

which Miranda by its terms was made applicable, and to

which it is limited.” (Id. at p. 495 [50 L.Ed.2d at p. 719],

italics in original; California v. Beheler, supra, 463 U.S. at

pp. 1123-1125 [77 L.Ed.2d at pp. 1278-1280]; Berkemer v.

A-29

McCarty (1984) 468 U.S. 420, 437 [82 L.Ed.2d 317, 332-333,

104 S.Ct. 3138].)

The fear that Ma could lose his job or security clear-

ance, or be subjected to criminal prosecution as a future

result of the interrogation, is insufficient to convert a

noncustodial interrogation into a custodial one. (See

United States v. Bowers (6th Cir. 1984) 739 F.2d 1050,

1055-1056 [suspect feared disciplinary action against pro-

fessional license if he refused to talk to investigator].) In

United States v. Dockery (8th Cir. 1984) 736 F.2d 1232, 1234,

and U.S. v. Goudreau (8th Cir. 1988) 854 F.2d 1097, 1098,

employees were directed by their employers to interview

with FBI agents. This was held not to change the noncus-

todial character of the FBI interviews. There are other

situations where the suspect may perceive heavy pressure

to attend an interrogation, and face unpleasant choices

between self-incrimination or other alternatives, but this

does not mean the suspect is constitutionally entitled to

bring a lawyer to the interrogation. (United States v. Man-

dujano (1976) 425 U.S. 564, 581 [48 L.Ed.2d 212, 225, 96

S.Ct. 1768] [no right to presence of an attorney during

questioning by grand jury].) In Minnesota v. Murphy

(1984) 465 U.S. 420, 433 [79 L.Ed.2d 409, 423, 104 S.Ct.

1136], a probationer had a legal duty to attend an inter-

view and cooperate with his probation officer, and he was

questioned about another crime. The court stated “Even a

cursory comparison of custodial interrogation and proba-

tion interviews reveals the inaptness of the Minnesota

Supreme Court's analogy to Miranda. Custodial arrest is

said to convey to the suspect a message that he has no

choice but to submit to the officers’ will and to confess. It

is unlikely that a probation interview, arranged by

A-30

appointment at a mutually convenient time, would give

rise to a similar impression. . . . Finally, the coercion

inherent in custodial interrogation derives in large mea-

sure from an interrogator’s insinuations that the inter-

rogation will continue until a confession is obtained.

Since Murphy was not physically restrained and could

have left the office, any compulsion he might have felt

from the possibility that terminating the meeting would

have led to revocation of probation was not comparable

to the pressure on a suspect who is painfully aware that

he literally cannot escape a persistent custodial interroga-

tor.” (Id. at p. 433 [79 L.Ed.2d at p. 423], citations and fn.

omitted.)

Because Ma refused to attend the interview, he obvi-

ously was not subjected to actual custodial interrogation.

He must argue that the interrogation “would have been”

custodial, and that he was terminated for refusing to

attend a custodial interrogation without an attorney pre-

sent. In its statement of decision, the trial court cited

various factors for its conclusion the interrogation would

have been custodial. These included that Ma feared he

was being accused of violating criminal laws relating to

national security, that no one told him he would be free to

leave the interrogation at any time or that he need not

fear arrest, that TRW’s policy is to notify the FBI imme-

diately upon obtaining incriminating evidence, and TRW

did in fact notify the FBI immediately after Ma’s failure to

attend the interview.

(4) The test whether the circumstances are custodial

is an objective one, based on what a reasonable person in

the suspect’s circumstances would perceive. (Berkemer v.

McCarty, supra, 468 U.S. at p. 442 [82 L.Ed.2d at p. 336];

A-31

Stansbury v. California (1994) 511 U.S. __ [128 L.Ed.2d

293, 299-300, 114 S.Ct. 1526, 1530].) This is a mixed ques-

tion of law and fact, as to which the appellate court

exercises its independent conclusion on the legal question

of reasonableness, based on the facts as found by the trial

court if supported by substantial evidence. (See People v.

Leyba (1981) 29 Cal.3d 591, 597-598 [174 Cal.Rptr. 867, 629

P.2d 961].) (3b) Exercising our judgment, we hold that no

reasonable person in Ma’s circumstances could reason-

ably conclude the proposed security interview would be

custodial as defined by the law, i.e., that if he attended

the interview he would be under arrest and not free to

leave the interview.

TRW’s letters to Ma sought an appointment for an

interview as a “condition of employment,” but did not

refer to arrest. The uncontradicted evidence showed that

TRW’s internal security officers have no police powers,

do not make arrests, and do not wear uniforms or badges

or carry guns. TRW’s internal security officers do not

detain employees during security interviews; the

employees are free to leave the interviews. Interviews are

conducted in an open cubicle with five-foot high soft

partition walls, which have an open doorway. Interviews

last from less than a minute, if the employee does not

wish to be interviewed, to one hour at the most. Govern-

ment agents do not participate in TRW’s internal security

interviews. The FBI was contacted only after Ma failed to

attend; the FBI was not contacted to have an agent show

up for the interview. If during the course of an internal

investigation TRW became aware of the potential of crim-

inal charges, TRW would cease its investigation and

A-32

notify the FBI; TRW had no participation in any subse-

quent investigation by the FBI.

Ma’s contention that a reasonable person in his cir-

cumstances would have believed he would not be free to

leave the interview is belied by his own admissions and

conduct. Ma admitted knowing that TRW’s security inves-

tigators could not arrest him and could only make allega-

tions which if proven true could result in future arrest or

imprisonment by law enforcement. Furthermore, Ma was

subsequently willing to and did talk to a Department of

Defense agent without his lawyer present.

The record thus contains no substantial evidence that

the proposed security interview would have been custo-

dial as defined by law, so as to invoke the Fifth Amend-

ment right to the presence of an attorney. There was

simply no reasonable basis for Ma to believe the

requested interview was custodial interrogation. There-

fore, TRW did not violate the fundamental public policy

of Miranda by refusing to permit Ma’s attorney to come

with him to the proposed interview.

Self-incrimination

(5) Ma contends he “could not constitutionally be

compelled to voluntarily respond to TRW’s interrogation;

he was constitutionally entitled to exercise his Fifth

Amendment right to remain silent.” He then contends,

“the Government has no power to punish an individual

for refusing to voluntarily submit to interrogation” and

“[t]he loss of his job for asserting [the right to remain

silent] violates public policy.”

A-33

This argument is misconceived. Even if TRW were

treated as a governmental employer, a public employer

may terminate a public employee who refuses to answer

questions directly, specifically, and narrowly related to

the performance of the employee’s duties. (Gardner v.

Broderick (1968) 392 U.S. 273, 278 [20 L.Ed.2d 1082,

1086-1087, 88 S.Ct. 1913]; Sanitation Men v. Sanitation

Comm'’r. (1968) 392 U.S. 280, 284 & 285 [20 L.Ed.2d 1089,

1092-1093, 88 S.Ct. 1917] [conc. op. of Harlan, J.];

Lefkowitz v. Cummingham (1977) 431 U.S. 801, 806 [53

L.Ed.2d 1, 7-8, 97 S.Ct. 2132]; Asherman v. Meachum (2d

Cir. 1992) 957 F.2d 978, 982; Erwin v. Price (11th Cir. 1985)

778 F.2d 668, 670; Gulden v. McCorkle (5th Cir. 1982) 680

F.2d 1070, 1075; DeWalt v. Barger (M.D.Pa. 1980) 490

F.Supp. 1262, 1271-1272; Grabinger v. Conlisk (N.D.IIl.

1970) 320 F.Supp. 1213, 1218; Pinkney v. District of Colum-

bia (D.D.C. 1977) 439 F.Supp. 519, 534; Szmaciarz v. State

Personnel Bd. (1978) 79 Cal.App.3d 904, 914-919 [145

Cal.Rptr. 396].)

The line of cases cited by Ma from Garrity v. New

Jersey (1967) 385 U.S. 493, 494-497 [17 L.Ed.2d 562,

564-565, 87 S.Ct. 616], to Lefkowitz v. Turley (1973) 414 U.S.

70, 85 [38 L.Ed.2d 274, 286, 94 S.Ct. 316], stands only for

the proposition that the government may not, upon threat

of termination, require a public employee to speak and to

waive the immunity from use in a subsequent criminal

prosecution which would ordinarily attach to such a com-

pelled admission. (Lefkowitz v. Cunningham, supra, 431

U.S. at p. 806 [53 L.Ed.2d at pp. 7-8]; Baxter v. Palmigiano

(1976) 425 U.S. 308, 316-317 [47 L.Ed.2d 810, 820-821, 96

S.Ct. 1551]; Gulden v. McCorkle, supra, 680 F.2d at p. 1075.)

A-34

Summarized another way by our own Supreme

Court, these cases show that a public employee has no

constitutional right to “remain silent free of administrative

sanction. As a matter of constitutional law, it is well

established that a public employee has no absolute right

to refuse to answer potentially incriminating questions

posed by his employer. Instead, his self-incrimination

rights are deemed adequately protected by precluding

any use of his statements at a subsequent criminal pro-

ceeding.” (Lybarger v. City of Los Angeles (1985) 40 Cal.3d

822, 827 [221 Cal.Rptr. 529, 710 P.2d 329], italics in origi-

nal.)

As stated in Asherman v. Meachum, supra, 957.F.2d at

page 982, “The fact that a public employee might face the

unpleasant choice of surrendering his silence or losing his

job is no bar to an adverse consequence so long as the

consequence is imposed for failure to answer a relevant

inquiry and not for refusal to give up a constitutional

right.”

By analogy, Ma’s employer, TRW, had the right to

question Ma about alleged breaches of security commit-

ted by him in the course of his employment. If Ma feared

that his answers might tend to incriminate him, he of

course could refuse to discuss the matter with his

employer; but he cannot in reason or law expect an

employer to retain confidence in an employee who

refuses to discuss legitimate employer questions about

the employee’s job performance. There is no evidence

TRW sought a waiver of immunity of the type involved in

the Garrity line of cases. (Lefkowitz v. Cunningham, supra,

431 U.S. at p. 806 [53 L.Ed.2d at pp. 7-8].) TRW’s termina-

tion of Ma for his refusal to respond to legitimate

A-35

inquiries about his performance was not in these circum-

stances a punishment for exercising a constitutional right,

and therefore was not a termination in violation of public

policy.

Firmly Established Public Policy

TRW alternatively argues that, even if in the circum-

stances of this case TRW is held a governmental actor and

Ma is held entitled to the presence of an attorney at the

interview, these would be holdings of first impression

and cannot be said to involve “firmly established” public

policy so as to support a tort cause of action. (Luck v.

Southern Pacific Transportation Co. (1990) 218 Cal.App.3d

1, 29 [267 Cal.Rptr. 618].) The trial court denied TRW’s

motion in limine on this point and entered an order that a

well-established fundamental public policy was violated

by TRW’s conduct.

Because we hold, ante, that Ma did not have a consti-

tutional right to bring his attorney to the interview, this

alternative point would be moot but for the fact that the

trial court entered a specific order thereon. In light of our

disposition on the merits, this order should also be

vacated.

DISPOSITION

Having served its purpose, the order to show cause is

discharged. Let a peremptory writ of mandate issue

ordering respondent court to vacate its orders of June 16,

1992, which ruled, respectively, that (1) defendant TRW

A-36

was a government actor with regard to the subject inter-

view of plaintiff and (2) at the time defendant demanded

plaintiff’s submission to interrogation the right to counsel

at a security interrogation, conducted in a custodial set-

ting and focusing on the person as a criminal suspect,

was clearly a well-established public policy and legal

right, denial of which is a violation of the privilege

against self-incrimination; and to vacate its statement of

decision entered December 29, 1992, which ruled that

plaintiff had a constitutional right to counsel at the sub-

ject interview; and to make a new and different order that

defendant TRW, Inc., was not a government actor and

that plaintiff did not have a constitutional right to coun-

sel at the interview.

Hastings, J., concurred.

WOODS (A. M.), P.J., Concurring and Dissenting. — The

well crafted opinion of the majority has persuaded me

that Mr. Ma did not have the right to insist upon having

counsel present at the proposed meeting with TRW’s

security department. There is insufficient evidence to

support the trial court’s finding that the interrogation

would have been sufficiently custodial so as to trigger

Mr. Ma’s Fifth Amendment right to counsel.

Ma’s subjective fears that he might lose his job, his

security clearance or be subjected to criminal prosecution

if he attended the interview do not, in themselves, con-

vert the interview into a custodial situation without some

objective indicia that, had he attended, he would have

been deprived of his freedom of movement. There is

nothing in the record from which I can conclude that, had

the interview fulfilled Ma’s fears, he could not have

A-37

simply declined to answer any further questions and left.

I therefore concur in the disposition of the writ but I

dissent from the majority’s conclusion that TRW was not

a government actor.

The United States. Supreme Court’s attempt to

answer the question of when a private entity can be held

to be a state actor has yielded a number of different tests

and formulations. (See Lugar v. Edmondson Oil Co. (1982)

457 U.S. 922, 939 [73 L.Ed.2d 482, 495-496, 102 S.Ct.

2744].) Consistently, however, the court has emphasized

that whatever test is used, the determination is neces-

sarily a “fact-bound inquiry.” (Ibid.; Burton v. Wilmington

Pkg. Auth. (1961) 365 U.S. 715, 722 [6 L.Ed.2d 45, 50, 81

S.Ct. 856] [“Only by sifting facts and weighing circum-

stances can the nonobvious involvement of the State in

private conduct be attributed its true significance.” ];

Edmonson v. Leesville Concrete Co. (1991) 500 U.S. 614,

620-622 [114 L.Ed.2d 660, 673-674, 111 S.Ct. 2077, 2083].)

In the recent Edmonson case, the Supreme Court set

forth a two-part inquiry for determining when a private

entity can be deemed a state actor for purposes of a

claimed constitutional deprivation. “We [ask] first

whether the claimed constitutional deprivation resulted

from the exercise of a right or privilege having its source

in state authority, [citation]; and second, whether the

private party charged with the deprivation could be

described in all fairness as a state actor, [citation].”

(Edmonson v. Leesville Concrete Co., supra, 500 U.S. at p. 620

[114 L.Ed.2d at p. 673, 111 S.Ct. at pp. 2082-2083].) With

respect to the second inquiry, the court suggested certain

principles of general application. “[I]t is relevant to exam-

ine the following: the extent to which the actor relies on

A-38

governmental assistance and benefits, [citations]; whether

the actor is performing a traditional governmental func-

tion, [citations]; and whether the injury caused is aggra-

vated in a unique way by the incidents of governmental

authority, [citation].” (500 U.S. at pp. 621-622 [114 L.Ed.2d

at p. 674, 111 S.Ct. at p. 2083].) Applying these principles

to the facts of this case, I would conclude that the trial

court correctly found TRW to be a state actor for pur-

poses of Ma’s claim that he was deprived of his Fifth

Amendment right to counsel.

With respect to the first part of the inquiry, it is clear

that TRW’s investigation of Ma was pursuant to the exer-

cise of a right originating in state authority. The require-

ment in paragraph 7(c) of the ISM that TRW initiate a

preliminary inquiry to ascertain all the circumstances

surrounding even the suspicion of the compromise of

classified information was clearly a delegation of author-

ity by the federal government to TRW in the defense of

the country and its national security, an area over which

the federal government exercises hegemony either

directly or through its agents. (See Becker v. Philco Corpo-

ration (4th Cir. 1967) 372 F.2d 771 [defense contractor

immune from libel suit of its employees for statements

made by employer to United States under terms of a

defense contract].)

With respect to the second part of the Edmonson

inquiry, TRW’s status as a defense contractor and the

nature of its investigative obligations under the ISM are

of such a nature that TRW can be fairly described as a

‘state actor. Edmonson directs our consideration to three

subfactors, the extent the private authority relies on gov-

ernmental assistance and benefits; whether the entity is

A-39

performing a traditional governmental function; and

whether the claimed inquiry is aggravated in a unique

way by the incidents of governmental authority. (Edmon-

son Leesville Concrete Co., supra, 500 U.S. at pp. 620-622

[114 L.Ed.2d at pp. 673-674, 111 S.Ct. at p. 2083].) In

effect, these subfactors can be collapsed into a single

question: Is the private entity performing a function tra-

ditionally performed by government for which it reaps a

benefit? The answer here is yes. TRW is a defense con-

tractor and reaps a financial benefit from this status. It is

true, of course, that, without something more, “[a]cts of

such private contractors do not become acts of the gov-

ernment by reason of their significant or even total

engagement in performing public contracts.” (Rendell-

Baker v. Kohn (1982) 457 U.S. 830 841 [73 L.Ed.2d 418, 427,

102 S.Ct. 2764].) The something more in this case is that

the nature of TRW’s work involves the defense of the

country and its national security, a function traditionally

the exclusive prerogative of the federal government. (San

Francisco Arts & Athletics v. U.S.O.C. (1987) 483 U.S. 522,

544 [97 L.Ed.2d 427, 453, 107 S.Ct. 2971] [“This Court also

has found action to be governmental action when the

challenged entity performs functions that have been

‘“traditionally the exclusive prerogative” ’ of the Federal

Government. [Citations.]” (Italics omitted.)]; Becker v. Phi-

Ico Corporation, supra, 372 F.2d 771 {defense contractor

immune from defamation action for statements made to

the United States under defense contract].) Finally, the

specific constitutional violation asserted by Ma of depri-

vation of his Fifth Amendment right to counsel flows

from the investigative responsibilities imposed on TRW

A-40

because the investigation was a first step that may have

exposed Ma to federal criminal prosecution.

In this connection, I am not persuaded by the major-

ity’s assertion that because paragraph 7(c) of the ISM did

not specify how the preliminary inquiry was to be con-

ducted, the inquiry did not qualify as state action. This is

a distinction without a difference in view of the undis-

puted fact that the end result of the inquiry might be

criminal prosecution. Additionally, Rendell-Baker v. Kohn,

supra, 457 U.S. 830, on which the majority relies, is easily

distinguishable on its facts as is Blum v. Yaretsky (1982)

457 U.S. 991 [73 L.Ed.2d 534, 102 S.Ct. 2777]. In neither

case did the private entity fulfill the kind of traditional

governmental function tha’ was involved here nor were

they obligated to perform policing tasks on behalf of the

federal government.

I therefore dissent on this issue.

A-41

ALLAN F. GROSSMAN

Suite 304, Encino Law Center

15915 Ventura Boulevard

Encino, California 91436

(818) 990-8200

Attorneys for Plaintiff

Jack Ma

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

JACK MA, CASE NO. SWC 96472

nes, STATEMENT OF DECI-

vs SION FOLLOWING

BENCH TRIAL OF RIGHT

TRW, INC., and DOES

TO ATTORNEY ISSUE

1 through 20, inclusive,

Defendants. (Cal. Rules of Court 232.5)

(Filed Dec. 29, 1992)

me meee eee ee ee ee”

After contested hearings on several pretrial motions

made by both parties, this court on June 16, 1992, made

the following orders:

1. “1. IT IS ORDERED that it is for the court to

determine whether defendant’s status in conducting its

security interrogation is that of a government actor.

“2. IT IS ORDERED that plaintiff’s amended

motion in limine that the court determine as a matter of

law that defendant was a government actor is granted,

and it is adjudged that defendant was a government actor

A-42

in ordering plaintiff to attend the proposed security inter-

rogation.” (Order regarding Defendant’s Status as a Gov-

ernment Actor and Plaintiff's Right to an Attorney.)

2. “1. At all time relevant herein, it was on and

before November 1985, and is, a clear, well-established,

fundamental, and substantial public policy and right

embodied in the Fifth and Fourteenth Amendments of the

United States Constitution that a person ordered to

attend a security interrogation to be conducted in a custo-

dial setting which has already focused upon him as a

criminal suspect and has reached the accusatory stage

entitled to an attorney at said interrogation, and the

denial thereof is a violation of his federal constitutional

right and privilege against self-incrimination.

“2. At all times relevant herein, it was on and

before November 1985, and is, a clear, well-established,

fundamental and substantial public policy and right

embodied in Article I, Section 15, Clause 6, of the Califor-

nia Constitution that a person ordered to attend a secu-

rity interrogation to be conducted in a custodial setting

which has already focused upon him as a criminal sus-

pect and has reached the accusatory stage is entitled to

have an attorney present at said interrogation, and the

denial thereof is a violation of his California constitu-

tional right and privilege against self-incrimination.”

(Order Regarding the Right to an Attorney in an Accusa-

tory Criminal Interrogation as Being a Well-Established

Fundamental Public Policy.)

3. “IT IS ORDERED that the question of plaintiff’s

right to an attorney at defendant’s requested security

interrogation is a question for the court to determine

A-43

outside the hearing of the jury. This determination will be

made prior to the commencement of the jury trial.”

(Order Regarding the Determination of Plaintiff’s Right

to an Attorney Question.)

Pursuant to the latter order the matter of plaintiff’s

right to an attorney at defendant’s requested security

interrogation came on regularly for trial on August 17,

1992, in Department N of the Southwest District of the

above entitled court, the Honorable Harry Shafer, retired

judge sitting by assignment. Allan F. Grossman appeared

as attorney for plaintiff and Munger, Tolles & Olson, by

Terry E. Sanchez and Gary D. Roberts appeared as attor-

neys for defendant.

After hearing and considering oral and documentary

evidence and the written and oral arguments of counsel,

and being fully advised in the premises, the court now

makes its statement of decision as to each of the principal

controverted issues:

1. At the time of the proposed security interroga-

tion, the investigation had focused upon plaintiff as a

criminal suspect and had, therefore, reached the accusa-

tory stage. This is based upon the following facts:

(a) Plaintiff’s co-workers had reported to man-

agement that plaintiff had contacted foreign nationals

and used such words as TRW working on [/s/ HS]

“silos,” “warheads,” “survivability,” and these alleged

[/s/ HS] contacts were reported by management

[/s/ HS] to defendant’s security personnel.

(b) Defendant’s security investigator and per-

sonnel manager told plaintiff orally and in writing that he

A-44

must come to an interview with its security department

investigator to discuss “your alleged security violations”

and “contracts with foreign nations” which are a “serious

matter” and “would be violations” of defendant’s secu-

rity policies and of the Industrial Security Manual (ISM)

issued by the United States Department of Defense. In the

context of this case, these facts, events, and occurrences

meant that plaintiff was suspected of violating United

States criminal laws regarding United States military and

nuclear secrets.

[/s/ HS] to the interrogation without his attorney, defen-

dant on Dec 12, 1985 [/s/ HS] immediately telephoned

the Federal Bureau of Investigation (FBI) and FBI came

immediately to TRW. TRW also [/s/ HS] also notified the

United States Defense Industrial Security Clearance

Office by letter dated 12/20/85 [/s/ HS].

2. The interrogation to which plaintiff was ordered

to go upon penalty of losing his job was custodial. This is

based upon the following facts:

(a) It was to have been an interrogation.

(b) Defendant’s security department works in

close cooperation and interaction with and as a conduit to

the FBI.

conjunction with and on behalf of [/s/ HS] the FBI.

(d) It is defendant’s policy upon securing

incriminating evidence to call the FBI immediately and

defendant’s security personnel did call the FBI imme-

diately upon plaintiff’s failure to attend the interrogation.

A-45

(e) Defendant’s security interrogations usually

[/s/ HS] take place in the investigator’s office with only

the suspect and one or more security interrogators pre-

sent.

(f) The circumstances of the proposed interroga-

tion would overbear the will of a reasonable person in

plaintiff’s circumstances and plaintiff, in fact had a rea-

sonable fear that his will would be overborne if he

attended the proposed interrogation.

(g) Even though plaintiff told defendant’s secu-

rity investigator that he would not attend the interroga-

tion without his attorney being present, defendant's

agents told plaintiff that he must submit to the interroga-

tion alone and without his attorney or else be terminated

from his employment with defendant.

(h) Plaintiff did in fact fear and a_reasonable

person in his circumstances would have feared that if he

attended the interrogation alone and without his attorney

he would be tricked or coerced [/s/ HS] into giving false

answers or that his answers would be changed to his

detriment.

(i) Plaintiff had a reasonable fear that he was

the target of contrived and spurious charges made by

defendant against him.

(j) No one told plaintiff that he would be free to

leave the interrogation at any time or that he need not

fear arrest.

(k) Plaintiff did in fact fear and a reasonable

person in his circumstances would have feared that by

going to the interrogation he would lose his liberty.

A-46

(1) Plaintiff did assert his right to an attorney at

the ordered security interrogation and defendant denied

it.

3. Based upon all of the foregoing, including with-

out limitation the orders of June 16, 1992, the court deter-

mines that plaintiff did have a right under the Fifth

Amendment to the United States Constitution to have his

attorney present at the proposed security interrogation

ordered by defendant.

4. As an alternative and independent ground of

decision, the Court determines, based upon all of the

foregoing, including without limitation the orders of June

16, 1992, that plaintiff had a right under article I, section

15 of the California Constitution to have his attorney

present at the proposed security interrogation ordered by

defendant.

Dated: December 29 1992. /s/ Harry Shafer

e HARRY SHAFER

(Retired Judge sitting

by assignment)

A-47

OFFICE OF THE CLERK

COURT OF APPEAL

STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

JOSEPH A. LANE, CLERK

DIVISION: 4 DATE: 07/21/94

Horvitz & Levy

Ellis Horvitz

15760 Ventura Blvd.

18th Floor

Encino, CA. 91436

RE: Trw, Inc.

VS.

S.c.].a.

Ma, Jack

2 Civil B0O72479

Los Angeles NO. SWC96472

THE COURT:

Petition for rehearing denied.

A-48

Second Appellate District, Division Four,

No. B072479-S031407

IN THE SUPREME COURT OF THE

STATE OF CALIFORNIA

IN BANK

(Filed Sep. 15, 1994)

TRW INC., Petitioner

LOS ANGELES COUNTY

SUPERIOR COURT, Respondent

JACK MA, Real Party In Interest

Petition for review DENIED.

MOSK

- Acting Chief Justice

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.