Third Circuit Declines To Extend Bivens To Agent Conducting Counterintelligence Investigation
This case law update was written by Michael J. Sgarlat, an attorney at the law firm of Shaw Bransford & Roth, where he has practiced federal personnel and employment law since 2015. Mr. Sgarlat works with federal employees to respond to proposed disciplinary and adverse actions, and has experience litigating cases before the U.S. Merit Systems Protection Board.
Appellants, Xiaoxing Xi and his wife, Qi Li, immigrated to the United States in 1989, and both went on to have successful careers, settling in Pennsylvania. Xi was an internationally acclaimed expert in thin film superconducting technology.
On May 21, 2015, the two were awakened by a loud knocking on their door. Xi answered the door and was confronted by armed FBI agents wielding a battering ram. The agents proceeded to handcuff him, entered the home, held Qi Li and the couple’s daughters at gunpoint, and conducted a search of the property. The agents seized computers, travel records, and financial records. They then took Xi to the FBI’s Philadelphia field office. There, Xi was subjected to DNA sampling and fingerprinting and was interrogated for 2 hours.
Xi was indicted on four counts of wire fraud for allegedly providing Chinese entities with sensitive information about “revolutionary” superconductor technology called a “pocket heater” that belonged to an American company. These charges were based on an investigation conducted by Defendant Andrew Haugen, an FBI special agent assigned to the agency’s Chinese Counterintelligence Unit. That investigation revealed that the subject of Xi’s emails were not related to the pocket heater, but to a different process Xi created. However, Haugen stated in his affidavits, reports, and other communications with prosecutors that Xi’s emails did concern the pocket heater.
Eventually, the prosecutors learned the truth – that the emails had nothing to do with the pocket heater. They also learned that the pocket heater was not the revolutionary device characterized in the indictment. So, the government moved to dismiss the indictment, and the dismissal was granted. However, by that time, the U.S. Attorney’s Office already issued a press release regarding Xi’s arrest and indictment, and the case received media attention. In addition, Temple University, where Xi served as Chair of the Physics Department, suspended Xi and placed him on administrative leave.
Appellants filed suit in district court, asserting two groups of claims. Xi brought Bivens claims, alleging violations of the Fifth Amendment right to equal protection and Fourth Amendment rights to be free from unreasonable search and seizure, malicious prosecution, and fabrication of evidence. And Appellants brought FTCA claims for Haugen’s alleged torts. We focus on the Bivens claims here.
The district court dismissed the Bivens claims, finding that no Bivens remedy was available and that even if it were, Haugen was entitled to qualified immunity. The court reviewed whether Xi’s claim presented a “new context,” an inquiry that requires a determination whether the claim is meaningfully different from the three cases in which the Court has implied a damages action, and if it does present a new context, what special factors counsel against allowing a Bivens remedy.
The court of appeals found there to be meaningful differences between Bivens and this case that make clear that Xi’s Fourth Amendment claims arose in a context. For example, the court found that Xi’s claims involve a “different breed of law enforcement misconduct.” While Bivens
involved a claim against federal agents for illegal arrest and seizure, Xi alleged federal agents made false statements and material omissions of exculpatory evidence that led the government to investigate, arrest, and prosecute him. Likewise, Xi sought to hold accountable a new category of defendant – a counterintelligence agent.
The court also found that Xi’s Fifth Amendment claim presented a new context. Here, the court looked at Davis v. Passman, which involved a claim of federal workplace sex discrimination by a congressional staffer. However, Xi’s claim involved a claim of racial discrimination. The court found that these distinctions alone established a new context and category of defendant.
Because the court was confronted with claims in new contexts, it proceeded to determine whether special factors counselled hesitation in extending a Bivens remedy. Guided by the Supreme Court’s recent decision in Egbert v. Boule, the court of appeals stated that the existence of “even a single reason to pause before applying Bivens” forecloses relief. “Egbert instructs us to concentrate not on the substance of a particular claim, but on the context in which it is brought.” Again referring to Egbert, the court of appeals stated that “the question is not ‘whether Bivens relief is appropriate in light of the balance of circumstances in the particular case,’ but whether ‘[m]ore broadly … there is any reason to think that judicial intrusion into a given field might be harmful or inappropriate.’”
The court found that “one overriding special factor” counselled against the creation of a judicially-implied Bivens remedy – the implication of national security interests. As noted by the court, Xi sought relief against a federal counterintelligence official for alleged misconduct during an investigation into potential espionage. The court stated that the resolution of such a claim would require judicial review of executive counterintelligence policies and priorities, even in cases like this, where the plaintiff sues not the agency’s policy makers, but rather those implementing them.
The court further considered the availability of alternative remedies. The court found that Congress allowed two alternative remedies here. First, there is 28 U.S.C. § 1495, which permits an award of damages to “any person unjustly convicted of an offense against the United States and imprisoned.” Second, there is the Hyde Amendment, 18 U.S.C. § 3006A. This allows courts to award attorney’s fees and litigation costs to a prevailing criminal defendant “when the court finds that the position of the United States was vexatious, frivolous, or in bad faith.”
The court noted that Xi was not satisfied with these alternatives because he was never convicted and can only be made whole by monetary damages. However, again going back to Egbert, the court stated that “Egbert instructs that an alternative remedy need not provide ‘complete relief’ or be as ‘effective as an individual damages remedy’ to foreclose Bivens relief.”
The court of appeals therefore found that Xi’s Fourth and Fifth Amendment claims arise in a new context and implicate special factors counseling against a Bivens remedy. It affirmed the district court’s dismissal on Xi’s Bivens claims
Read the full case: Xi v. Haugen
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