How Vulnerable Are IRS Employees to Personal Lawsuits?

The Internal Revenue Service is in the news for fessing up to targeting over the last few years conservative-leaning groups that applied for certain tax exempt status. Congress is all over it and the outrage appears to be bi-partisan. Various congressional committees are demanding names, want to know who ordered this up, who knew what, and when. Some affected groups—many of which have still not received a formal response to their exemption applications some two to three years later—are filing lawsuits.

This raises the question whether individual Internal Revenue Service employees could be sued in their personal capacity by any of these aggrieved parties and forced to pay damages from their own pockets if they played a role in targeting these groups?

A possible area for suit by the aggrieved groups is the so-called Bivens constitutional tort. If a plaintiff can show that one or more federal employees through their actions intentionally deprived the plaintiff of a right guaranteed by the U.S. Constitution—the First Amendment guarantees of free speech and free association come to mind in these instances—then a federal court could well end up giving the plaintiffs their day in court.

Can a Bivens-style case be filed against the individual IRS employees who did this? Yes.

The case would be based on an assertion that one or more of these federal employees through heightened scrutiny of these conservative groups’ applications were acting to deprive the groups and/or their members of their constitutionally guaranteed right of association and free speech under the First Amendment.

Will a court allow the case to go forward? That is the question.  In short, if a court is willing to allow a Bivens claim based on violation of First Amendment guarantees, then it may well permit the case to go forward. The Supreme Court has not yet ruled on such a case involving the First Amendment. But some appeals courts have, with mixed results.

Generally speaking, the way it works when a federal employee is hit with a Bivens suit is this. The government typically tries to argue that the case should be against the government and not the individual employee who was simply acting within scope of his/her official duties. At this point, the employee is being “defended” by an outstanding law firm that knows its way around these cases—i.e. the Department of Justice (DOJ). As long as the employee’s agency is willing to step up and certify that the individual employee’s actions were within the scope of his/her duties, then the DOJ will spring into action.

If the agency refuses to certify that the actions were within scope—and instead takes the position that these were the actions of one or more rogue employees acting contrary to policy and instructions, then it is probably time for the sued employee to consider seriously finding a good private sector attorney who can navigate in the specialized world of a Bivens case. The stakes can be high for the individual employee defendant since any eventual money judgment in the case likely would be the individual’s responsibility to pay.

Assuming the agency and DOJ decide to back the employee, motions will fly asking the court to substitute the U.S. Government as the defendant—in place of the individua(s). Assume that goes as planned, and the DoJ will then work assiduously to get the case tossed.

If the court refuses to substitute the U.S. Government as the defendant, or refuses to toss the case, then the employee needs to be concerned—and probably needs to sign on that private sector attorney sooner rather than later–because the DOJ legally and ethically represents the government and not the individual employees.

Most individual federal employees who have found themselves named in their personal capacity for something they did on their government job will stand down until the initial dust settles. More often than not, the government is substituted for the individual employee as defendant in the case and early motions to dismiss are filed. Even so, some will opt at least to consult a private attorney and possibly to engage one who can monitor the case on the employee’s behalf and be alert to turns that can unexpectedly occur in the case. It becomes a calculated risk for the individual employee whether and when to spend money on private counsel fees.

While not that many Bivens cases have led to the individuals actually paying damages, it has happened.

© 2016 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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