On October 30, the U.S. Supreme Court heard oral argument in Osborn v. Haley, No. 05-593, a case with complicated procedural issues concerning suits filed against federal employees in state courts. The primary issue to be decided by the court is whether the attorney general can certify that the actions of a federal employee were “in the scope of employment” while at the same time denying that the actions took place. The answer to that question could determine whether the case gets heard in federal court before a judge, or in state court before a jury.

In this case, Ms. Osborn sued Mr. Haley, a Forest Service employee, in state court claiming that Haley made comments to Ms. Orborn’s private employer which led to her being fired from her job. Osborn sued Haley individually alleging that his actions were outside the scope of his employment. Under the Westfall Act, 28 USC § 2679(d), the attorney general “removed” the case from state court to federal district court by alleging that Haley was acting within the scope of his employment. This certification then required the district court to substitute the United States as the defendant instead of Haley as an individual defendant.

After this certification, which was necessary to get the case into federal court, the attorney general then defended the suit by denying that Haley said anything negative to Osborn’s employer. In other words, the attorney general first claimed that Haley was acting within the scope of his employment to get the case removed to federal court, but once there denied that Haley had engaged in any acts, whether within the scope of his employment or not. Because the attorney general denied that Haley did any of the acts as alleged, the federal district court judge ruled that it was error for the attorney general to claim that Haley acted within the scope of his employment, refused to allow the government to be substituted as the defendant, and sent the case back to state court. The 6th circuit court of appeals reversed the lower court, holding that the lower court had to hold a hearing to determine if Haley was acting within the scope of his employment and regardless of how the lower court answers that question, the case cannot be sent back to state court.

The Supreme Court is now faced with resolving several questions interpreting the Westfall Act which arise from this case: 1) Is it proper for the attorney general to certify that an employee’s acts are within the scope of his/her federal employment while at the same time denying that those acts ever took place; 2) If a district court concludes that the attorney general acted improperly in certifying that a federal employee’s acts were within the scope of his/her employment, is the court precluded from remanding the case back to state court; and 3) If the district court decides to remand the case back to state court, is that decision appealable in a federal appeals court?

Why is the outcome of this case important to federal employees? If an employee is sued in his/her private or individual capacity, the costs of mounting a defense, and the burden of paying damages if the employee loses the suit, rests on the employee. Therefore, it is always in the employee’s interest for the government to be substituted as the defendant in the case. When the attorney general certifies that a federal employee acted within the scope of his/her employment, the employee is no longer personally responsible for the expense of defending the lawsuit or liable for any damages that may be awarded to a successful plaintiff.

If the Supreme Court rules that the attorney general is prevented from both claiming the employee’s acts were within the scope of employment and denying that any acts occurred, then the attorney general may find it in the best interests of the government to refuse to certify that the action was within the scope of employment, which would leave the employee to defend the suit on his/her own and to be solely liable for damages. In state court, the employee would be entitled to a jury trial. Juries are thought to be more favorable to plaintiffs than a judge would be if trying the case without a jury.

However, if the Supreme Court rules that a case cannot be remanded back to state court once it is removed to federal court, even if wrongfully removed, then the trial will be held before the federal judge, and not a state jury.

Based on the transcript of the argument before the Supreme Court, it would seem that the high court was skeptical of Osborn’s arguments that the attorney general could not simultaneously remove the matter to federal court on the grounds the federal employee acted within the scope of his/her employment while at the same time defending the suit by denying that any wrongful act occurred.

A decision is not expected until the spring.

This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com.

The attorneys at Passman & Kaplan, P.C, are also the authors of The Federal Employees Legal Survival Guide, Second Edition, a comprehensive overview of federal employees’ legal rights. This book has been selling for $49.95 plus s&h for over two years, but as a special offer to FEDweek readers, we’ve reduced the price to only $29.95 plus s&h. To order your copy, go to http://www.fedweek.com/legal.htm.