Caroline Herron v. Fannie Mae , 861 F.3d 160 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 12, 2017 Decided June 27, 2017
No. 16-5070
CAROLINE HERRON,
APPELLANT
v.
FANNIE MAE, ET AL.,
APPELLEES
Consolidated with 16-5091
Appeals from the United States District Court
for the District of Columbia
(No. 1:10-cv-00943)
Lynne Bernabei argued the cause for appellant. With her
on the briefs was Alan R. Kabat.
Michael A.F. Johnson argued the cause for appellee
Federal Housing Finance Agency. With him on the brief were
Howard N. Cayne and Dirk Phillips.
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Ira T. Kasdan argued the cause for appellees The Federal
National Mortgage Association, et al. With him on the briefs
were Bezalel A. Stern and Elizabeth C. Johnson. Damien G.
Stewart entered an appearance.
Before: BROWN and KAVANAUGH, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SENTELLE.
SENTELLE, Senior Circuit Judge: Caroline Herron worked
as an at-will contractor for the Federal National Mortgage
Association, commonly known as Fannie Mae, on mortgage
modification programs created by the Department of the
Treasury (“Treasury”) in response to the financial crisis in
2007 and 2008. According to Herron, Fannie Mae blocked her
attempt to become an embedded contractor at Treasury and
then terminated her contract work with Fannie Mae in
retaliation for her purported disclosures of gross waste and
mismanagement by Fannie Mae in administering the programs.
Herron sued Fannie Mae and three Fannie Mae officers,
asserting claims under District of Columbia law and, in the
alternative, under Bivens. The district court dismissed the
Bivens claim in a published opinion, holding that Fannie Mae
is not a government actor, and, in a subsequent unpublished
opinion, granted summary judgment against Herron on her
remaining claims. For the reasons stated below, we affirm.
I.
Because of the numerous acronyms and terms of art
employed in this opinion, we provide a brief glossary.
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EESA Emergency Economic Stabilization Act of 2008
FAA Financial Agency Agreement
Fannie Mae Federal National Mortgage Association
Freddie Mac Federal Home Loan Mortgage Corporation
FHFA Federal Housing Finance Agency
HAMP Home Affordable Modification Program
HERA Housing and Economic Recovery Act of 2008
MHAP Making Home Affordable Program
II.
Because the district court’s opinions offer a detailed
description, see Herron v. Fannie Mae, No. 1:10-cv-943, 2016
WL 1177918, at *1–12 (D.D.C. Mar. 8, 2016) (“Summary
Judgment Opinion”); Herron v. Fannie Mae, 857 F. Supp. 2d
87, 88–91 (D.D.C. 2012) (“Bivens Opinion”), we provide only
a brief summary of the facts and allegations in this case.
A.
Although it originated as a government-owned entity,
Fannie Mae became a privately owned, government-sponsored
corporation in 1968. Perry Capital LLC v. Mnuchin, 848 F.3d
1072, 1080 (D.C. Cir. 2017). Fannie Mae and its brother
corporation, the Federal Home Loan Mortgage Corporation,
also known as Freddie Mac, “buy residential mortgages from
banks, repackage them for sale as mortgage-backed securities,
and guarantee these securities by promising to make investors
whole if borrowers default.” Judicial Watch, Inc. v. Fed.
Housing Fin. Agency, 646 F.3d 924, 925 (D.C. Cir. 2011).
Fannie Mae and Freddie Mac play a central role in the national
mortgage market by providing lenders with capital to make
more loans. Perry Capital, 848 F.3d at 1080; Judicial Watch,
646 F.3d at 926.
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During the 2000s, Fannie Mae and Freddie Mac “bought
risky mortgages and got caught up in the housing bubble.”
DeKalb Cty. v. Fed. Housing Fin. Agency, 741 F.3d 795, 798
(7th Cir. 2013). The decline in housing prices in the mid-2000s
“substantially eroded the value of Fannie [Mae]- and Freddie
[Mac]-held mortgages.” Judicial Watch, 646 F.3d at 926. The
ensuing financial crisis in 2007 and 2008 pushed both firms “to
the brink of collapse.” Perry Capital, 848 F.3d at 1079. To
prevent these government-sponsored enterprises from
defaulting, Congress enacted the Housing and Economic
Recovery Act of 2008 (“HERA”), Pub. L. No. 110-289, 122
Stat. 2654. Perry Capital, 848 F.3d at 1079, 1080–81.
HERA established the Intervenor Federal Housing
Finance Agency (“FHFA”), an independent federal agency
charged with supervising and regulating Fannie Mae. See 12
U.S.C. § 4511; Perry Capital, 848 F.3d at 1080–81. Among
other things, HERA authorized the FHFA to place Fannie Mae
into conservatorship. See 12 U.S.C. § 4617(a). It exercised
that authority on September 6, 2008. In conjunction with the
appointment of the FHFA as conservator, Treasury committed
to provide funding to Fannie Mae to keep it from defaulting.
See Perry Capital, 848 F.3d at 1079, 1082.
B.
The financial crisis also spurred Congress to enact the
Emergency Economic Stabilization Act of 2008 (“EESA”),
Pub. L. No. 110-343, 122 Stat. 3765. The EESA provides the
Secretary of the Treasury with the “authority and facilities . . .
to restore liquidity and stability to the financial system of the
United States,” 12 U.S.C. § 5201(1), and directs the Secretary
to act in a manner that, among other things, “preserves
homeownership,” id. § 5201(2)(B). To that end, the EESA
authorized the Secretary to “implement a plan that seeks to
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maximize assistance for homeowners” and to encourage loan
servicers to minimize foreclosures. Id. § 5219(a)(1). Pursuant
to this authority, the Secretary established the Home
Affordable Modification Program (“HAMP”), which is
designed to prevent foreclosures by encouraging loan servicers
to modify mortgage terms for eligible homeowners.
A brief summary of HAMP is necessary to understand the
factual allegations underlying this case. See generally Wigod
v. Wells Fargo Bank, N.A., 673 F.3d 547, 556–57 (7th Cir.
2012) (providing a detailed explanation of HAMP). HAMP—
the largest mortgage modification program within Treasury’s
broader Making Home Affordable Program (“MHAP”)—
provides struggling homeowners with an opportunity to modify
the terms of their mortgages, and can include changes such as
reduced interest rates and term extensions. A HAMP
modification consists of two steps. First, a servicer offers an
eligible homeowner a “trial modification,” which allows the
homeowner to make modified mortgage payments for a
specified term to determine whether those payments are
sustainable. Then, if the homeowner successfully completes
the trial modification, the servicer can convert the homeowner
to a permanent mortgage modification. To encourage
participation, Treasury offered financial incentives to servicers
who agreed to these modifications, and, prior to June 1, 2010,
Treasury permitted servicers to approve homeowners for trial
modifications without written verification of income, meaning
that servicers placed eligible homeowners in “stated” or
“verbal” trial modifications, rather than compelling “verified”
trial modifications.
On February 18, 2009, Treasury and Fannie Mae entered
into a Financial Agency Agreement (“FAA”), under which
Fannie Mae was to administer MHAP as a fiduciary to
Treasury. See 12 U.S.C. § 5211(c)(3) (authorizing Treasury to
6
designate certain institutions as “financial agents of the Federal
Government”). Fannie Mae was eligible to receive incentive
payments from Treasury based on a number of metrics set forth
in the FAA, including the number of modifications. And, at
least in fiscal year 2009, Fannie Mae used the number of
modifications, regardless of whether they converted to
permanent modifications, as a metric in determining executive
bonuses.
C.
In June 2009, after the FHFA placed Fannie Mae into
conservatorship, ICon Professional Services (“ICon”), a
third-party contracting company, hired Herron to provide
consulting services to Fannie Mae on MHAP and, more
specifically, HAMP. Appellees Eric Schuppenhauer, a senior
vice president at Fannie Mae, and Alanna Brown, Fannie
Mae’s Director of Government Programs and New Initiatives,
were her direct supervisors. In addition to working with Fannie
Mae officials and servicers, Herron worked directly with
Treasury managers overseeing Fannie Mae’s administration of
MHAP.
Almost immediately after she began work at Fannie Mae,
Herron raised a number of criticisms about Fannie Mae’s
administration of HAMP. Summary Judgment Opinion, 2016
WL 1177918, at *3. Herron does not press her argument
concerning the excessive burdens Fannie Mae allegedly
imposed on servicers on appeal. See id. at *3, *23–25. And
she forfeited her argument concerning the extension of the
HAMP enrollment deadline, see id. at *4–7, *28–30, by failing
to adequately raise it in her opening brief. See City of
Waukesha v. EPA, 320 F.3d 228, 250 n.22 (D.C. Cir. 2003).
Therefore, the only criticism relevant to this appeal concerns
the problems associated with the use of stated trial
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modifications, including the low rate of conversion to
permanent modifications. See Summary Judgment Opinion,
2016 WL 1177918, at *3–4, *25–27.
The record establishes that the problems with stated trial
modifications were highly debated and controversial topics at
both Fannie Mae and Treasury. See id. at *25–27. Herron
contends, however, that she was the only one who disclosed the
extent of the problems. According to Herron, Fannie Mae
pushed stated trial modifications, not to assist homeowners, but
to obtain incentive payments from Treasury and justify higher
executive bonuses. Herron alleges that Fannie Mae knew that
many homeowners enrolled in trial modifications would never
be eligible to convert to permanent modifications, and
therefore Fannie Mae wasted public funds and mismanaged
HAMP by pushing these modifications.
Around the same time that she voiced these concerns,
Herron began planning a move to Treasury. See id. at *7–11.
On December 15, 2009, she proposed that she be hired by
Fannie Mae as a dedicated “on site” or “embedded” contractor
at Treasury. Fannie Mae officials, including Schuppenhauer,
initially supported the idea but soon began expressing
concerns. See id. at *7–8. More specifically, Schuppenhauer
and Appellee Nancy Jardini, Fannie Mae’s acting Chief
Compliance Officer, raised potential conflicts of interest and
ethics issues relating to the move. Id. at *8–9. The parties
dispute the facts regarding these issues—Herron argues that
Fannie Mae created “a spurious conflict of interest issue” to
block her move, while Fannie Mae asserts that the move would
create serious conflicts of interest that needed to be addressed.
It appears undisputed, however, that Fannie Mae ultimately
decided not to go through with the move. Schuppenhauer also
admitted that Herron’s criticisms of Fannie Mae’s
administration of HAMP may have affected his views. On
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January 13, 2010, Herron told Schuppenhauer she was “ready
to escalate” the question of her move to Fannie Mae’s
Executive Vice President Terry Edwards and Chief Executive
Officer Mike Williams. After Schuppenhauer discussed the
issue with Williams and Edwards, he terminated Herron’s
contract work with Fannie Mae on January 15.
After her HAMP work was terminated, Herron pursued
other business opportunities in the industry. Two Fannie Mae
managers, Rich McGhee and Patricia Fulcher, discussed the
possibility of Herron working on non-HAMP projects, but one
of Fannie Mae’s compliance attorneys told McGhee and
Fulcher to stop recruiting Herron. See id. at *11. Herron also
discussed potential employment opportunities with Timothy
Rood, the president of the Collingwood Group, a financial
services consulting group. After speaking with his contacts at
Fannie Mae, however, Rood informed Herron that she
appeared to be “radioactive” and he did not think she would be
an asset to the company.
On June 8, 2010, Herron sued Fannie Mae,
Schuppenhauer, Brown, and Jardini, alleging that they blocked
her move to Treasury and terminated her contract work in
retaliation for her disclosures of Fannie Mae’s “gross waste of
public funds” and “gross mismanagement” in administering
HAMP. Operating under the presumption that Fannie Mae is a
private entity, Herron asserted claims under District of
Columbia law for wrongful termination in violation of public
policy, civil conspiracy, and tortious interference with
prospective contractual relations. Alternatively, if Fannie Mae
is a government actor, Herron alleged a Bivens claim for
retaliation in response to the exercise of her First Amendment
rights. See generally Bivens v. Six Unknown Named Agents of
Fed. Bureau of Narcotics, 403 U.S. 388 (1971).
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D.
Fannie Mae and the individual defendants first moved to
dismiss Herron’s alternative Bivens claim, asserting that Fannie
Mae is a private entity and thus not subject to a Bivens action.
The FHFA, in its capacity as conservator, intervened and
moved to dismiss on the same ground. On April 30, 2012, the
district court granted the motion. Bivens Opinion, 857 F. Supp.
2d at 88. Applying the framework set forth in Lebron v.
National Railroad Passenger Corp., 513 U.S. 374 (1995), the
court concluded that Fannie Mae is “a private entity and the
appointment of [the] FHFA as conservator . . . did not
transform Fannie Mae into a public agency,” because the
conservatorship “did not establish permanent government
authority to control Fannie Mae.” See Bivens Opinion, 857 F.
Supp. 2d at 88, 95–96.
After the parties engaged in extensive discovery, Fannie
Mae and the individual defendants moved for summary
judgment on Herron’s remaining wrongful termination,
tortious interference, and conspiracy claims. On March 8,
2016, the district court granted the motion. Summary Judgment
Opinion, 2016 WL 1177918, at *1. The court recognized that
Herron’s status as an at-will contractor posed a fundamental
problem for her tortious interference claim, see id. at *13–15,
and her wrongful termination claim, see id. at *16. First, the
court held that Herron’s tortious interference claim failed as a
matter of law because she had not identified a “commercially
reasonable business expectancy” on which to base the claim.
See id. at *12–16. Second, the court held that the EESA
provided a sufficient “mandate of public policy” to support
Herron’s wrongful termination in violation of public policy
claim. See id. at *16, *19–20. It nevertheless entered summary
judgment against her on that claim after concluding that “there
is not a close fit between [her] criticism of the use of stated
10
trials and her claimed public policy of disclosing Fannie Mae’s
gross mismanagement or waste of funds.” See id. at *20–23,
*25–27. Finally, the court explained that without “a cognizable
underlying tort,” Herron’s conspiracy claim also failed. See id.
at *30.
Herron appealed, challenging the district court’s order
granting the motion to dismiss her Bivens claim and its order
granting the motion for summary judgment against her on the
common law claims. She also appeals two orders denying
discovery. Herron’s additional argument regarding unsealing
the summary judgment briefing does not warrant separate
discussion in this opinion.
Fannie Mae and the individual defendants cross-appealed,
arguing that the district court’s grant of summary judgment
could be affirmed on the alternative ground that the EESA did
not set forth a sufficient public policy on which to base a
wrongful termination claim.
We have jurisdiction pursuant to 28 U.S.C. § 1291.
III.
We review de novo the district court’s dismissal of
Herron’s alternative Bivens claim. Emory v. United Air Lines,
Inc., 720 F.3d 915, 921 (D.C. Cir. 2013).
Herron alleges that, if Fannie Mae is a government actor,
Fannie Mae and the individual defendants, acting as officers of
the United States government, all are liable for retaliating
against her for the exercise of her First Amendment rights.
Because Herron’s Bivens claim is based on her contention that
Fannie Mae “is not a private entity but Government itself,” we
need not “traverse th[e] difficult terrain” of the state action
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doctrine. Lebron, 513 U.S. at 378; see also Sprauve v. W.
Indian Co., 799 F.3d 226, 229–30 (3d Cir. 2015); Hack v.
President & Fellows of Yale Coll., 237 F.3d 81, 83 (2d Cir.
2000), abrogated on other grounds by Swierkiewicz v. Sorema
N.A., 534 U.S. 506 (2002). Instead, we apply the framework
the Supreme Court established in Lebron for determining
whether a “Government-created and -controlled corporation[]”
is a government actor for constitutional purposes. 513 U.S. at
397.
In Lebron, the Court considered whether the National
Railroad Passenger Corporation, commonly known as Amtrak,
was part of the government for First Amendment purposes. See
id. at 376, 394. Considering the “public and judicial
understanding of the nature of Government-created
and -controlled corporations over the years,” see id. at 394–97,
the Court noted that arrangements providing for temporary
government control over a government-created corporation do
not make that corporation a government actor, see id. at 398–
99. The Court then concluded that a corporation is “part of the
Government” for constitutional purposes when: “[(1)] the
Government creates [the] corporation by special law, [(2)] for
the furtherance of governmental objectives, and [(3)] retains
for itself permanent authority to appoint a majority of the
directors of that corporation . . . .” Id. at 400. Applying these
criteria, the Court held that Amtrak was a government actor
because “it is established and organized under federal law for
the very purpose of pursuing federal governmental objectives,
under the direction and control of federal governmental
appointees.” See id. at 397–98. As our sister circuits
recognize, Lebron sets forth a three-part standard to determine
whether a government-created corporation is part of the
government for constitutional purposes. See, e.g., Hack, 237
F.3d at 83–84.
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This case satisfies the first two Lebron criteria. Congress
created Fannie Mae to accomplish a number of governmental
objectives for the national housing market. See 12 U.S.C.
§§ 1716, 1716b, 4501; Perry Capital, 848 F.3d at 1080.
Although Congress converted Fannie Mae to a private
corporation in 1968, “its charter, and therefore its function . . .,
were unchanged.” DeKalb Cty., 741 F.3d at 797. Neither
Fannie Mae nor the FHFA challenge that Congress’s creation
of Fannie Mae furthered “governmental objectives.” See Am.
Bankers Mortg. Corp. v. Fed. Home Loan Mortg. Corp., 75
F.3d 1401, 1406–07 (9th Cir. 1996) (holding that Freddie Mac
satisfied the first two Lebron criteria). The real dispute in this
case centers on the final Lebron criterion: permanent
government control.
Herron urges that permanent government control is not
required under the Lebron framework. But “[w]e think Lebron
means what it says.” Hack, 237 F.3d at 84. To find that a
government-created corporation is a government actor for
constitutional purposes, Lebron clearly requires permanent
government control. See 513 U.S. at 398–99. Otherwise put,
permanency is “a necessary condition precedent” to consider a
government-created corporation part of the government.
Sprauve, 799 F.3d at 233 n.8 (citations omitted). We do not
read Department of Transportation v. Association of American
Railroads, 135 S. Ct. 1225 (2015), as dispensing with the
permanency requirement. Consistent with Lebron, the Court
in Association of American Railroads concluded that “the
practical reality of federal control and supervision,” not a
statutory disclaimer, controls when determining an entity’s
status. See id. at 1231–33; see also Lebron, 513 U.S. at 392–
93, 399. Because the government’s permanent control over
Amtrak was already established in Lebron, the Court had no
occasion to revisit that question in Association of American
Railroads. Moreover, we generally presume that the Court
13
does not overturn or limit its prior holdings through silence or
implication. See, e.g., Shalala v. Ill. Council on Long Term
Care, Inc., 529 U.S. 1, 18 (2000); Rodriguez de Quijas v.
Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989).
Accordingly, the Lebron framework requires permanency.
See, e.g., Meridian Invs., Inc. v. Fed. Home Loan Mortg. Corp.,
855 F.3d 573, 578–79 (4th Cir. 2017) (applying permanency
requirement after Association of American Railroads).
We therefore turn to the question of whether the federal
government exercises permanent control over Fannie Mae.
Fannie Mae’s organic statute, see 12 U.S.C. §§ 1716b, 1718(a),
1723(b), does not place it “under the direction and control of
federal governmental appointees,” cf. Lebron, 513 U.S. at 385–
86, 397–98. Herron, therefore, does not dispute that Fannie
Mae was a private entity before the conservatorship. See, e.g.,
Northrip v. Fed. Nat’l Mortg. Ass’n, 527 F.2d 23, 30–32 (6th
Cir. 1975); see also Am. Bankers, 75 F.3d at 1407–09 (applying
the Lebron framework and concluding that pre-conservatorship
Freddie Mac was not a government actor because the
government did not “control the operation of Freddie Mac
through its appointees” (quoting Lebron, 513 U.S. at 399)
(alterations omitted)). Rather, she argues that the FHFA’s
conservatorship converted Fannie Mae into a government actor
because it gave the government de facto permanent control
over Fannie Mae. As noted, HERA authorized the FHFA “to
undertake extraordinary economic measures” with regard to
Fannie Mae, including placing it into conservatorship. Perry
Capital, 848 F.3d 1080–81. Herron asserts that the
conservatorship transformed Fannie Mae into a government
actor because the federal government now exercises “pervasive
and far-reaching” control over Fannie Mae, including the
authority to determine its future. This is not the first time a
plaintiff has advanced this argument, see, e.g., Rubin v. Fannie
Mae, 587 F. App’x 273, 275 (6th Cir. 2014); Wright v. Fed.
14
Nat’l Mortg. Ass’n, No. 1:13-cv-4294, 2014 WL 12042555, at
*2–3 (N.D. Ga. Sept. 22, 2014), and it is not without some
appeal. Nevertheless, Herron’s argument misses the mark
because the conservatorship does not amount to permanent
government control.
The FHFA became conservator “for the purpose of
reorganizing, rehabilitating, or winding up the affairs” of
Fannie Mae. 12 U.S.C. § 4617(a)(2). Although there is no
specific termination date, the purpose of the conservatorship is
to restore Fannie Mae to a stable condition. See, e.g., id.
§ 4617(b)(2)(D) (giving the FHFA authority as conservator to
take actions “necessary to put [Fannie Mae] in a sound and
solvent condition” and “appropriate to carry on [its] business
. . . and preserve and conserve [its] assets and property”). “This
is an inherently temporary purpose.” Rubin, 587 F. App’x at
275. While the conservatorship authorized the government to
exercise substantial control over Fannie Mae, “that control is
temporary, ‘as a private corporation whose stock comes into
federal ownership might be.’” See Meridian Invs., 855 F.3d at
579 (quoting Lebron, 513 U.S. at 398). Thus, the government’s
indefinite but temporary control does not transform Fannie
Mae into a government actor. See Lebron, 513 U.S. at 399
(citing Reg’l Rail Reorganization Act Cases, 419 U.S. 102, 152
(1974)).
Further, as conservator, the FHFA succeeded to “all rights,
titles, powers, and privileges” of Fannie Mae. 12 U.S.C.
§ 4617(b)(2)(A)(i). This language evinces Congress’s
intention to have the FHFA step into Fannie Mae’s private
shoes. Perry Capital, 848 F.3d at 1103 & n.22. When it
stepped into these shoes, the FHFA “shed[] its government
character and . . . [became] a private party.” See Meridian
Invs., 855 F.3d at 579. But while the FHFA’s status changed,
the status of Fannie Mae, as the “shoes” into which the FHFA
15
stepped, did not. See United States ex rel. Adams v. Aurora
Loan Servs., Inc., 813 F.3d 1259, 1261 (9th Cir. 2016)
(explaining that the FHFA as conservator stepped into Fannie
Mae’s shoes, and “not the other way around”).
In conclusion, the conservatorship over Fannie Mae did
not create the type of permanent government control that is
required under Lebron, and we therefore affirm the district
court’s dismissal of Herron’s Bivens claim.
IV.
Herron asserts the following claims under District of
Columbia law against Fannie Mae in its capacity as a private
entity: (1) wrongful termination in violation of public policy;
(2) tortious interference with prospective contractual relations;
and (3) civil conspiracy. We review de novo the district court’s
grant of summary judgment against Herron, Robinson v.
Pezzat, 818 F.3d 1, 7 (D.C. Cir. 2016), and for the reasons
stated below, we affirm.
A.
The district court concluded that the EESA provided a
sufficient public policy to support Herron’s wrongful
termination in violation of public policy claim, but it granted
summary judgment against her because she failed to satisfy the
“close fit” analysis. See Summary Judgment Opinion, 2016
WL 1177918, at *16, *19–23, *25–27. We affirm the district
court’s ultimate determination on the alternative ground that no
public policy exception exists under the EESA.
The District of Columbia has long recognized that an
at-will employee may be discharged “at any time and for any
reason, or for no reason at all.” Liberatore v. Melville Corp.,
16
168 F.3d 1326, 1329 (D.C. Cir. 1999) (quoting Adams v.
George W. Cochran & Co., 597 A.2d 28, 30 (D.C. 1991)). But
the District of Columbia Court of Appeals has recognized a
“very narrow” public policy exception to the at-will
employment doctrine. Id. (quoting Adams, 597 A.2d at 34).
Although the exception initially applied only to cases in which
an employee was discharged for refusal to violate the law,
courts may recognize additional public policy exceptions on a
case-by-case basis. See Fingerhut v. Children’s Nat’l Med.
Ctr., 738 A.2d 799, 803–04 (D.C. 1999).
An exception warrants recognition if it is “firmly anchored
either in the Constitution or in a statute or regulation which
clearly reflects the particular ‘public policy’ being relied upon”
and there is “a close fit between the policy thus declared and
the conduct at issue in the allegedly wrongful termination.”
Carl v. Children’s Hosp., 702 A.2d 159, 162, 164 (D.C. 1997)
(Terry, J., concurring); 1 see also Liberatore, 168 F.3d at 1331;
Fingerhut, 738 A.2d at 803 n.7. “By tying new causes of action
to statutory and constitutional provisions,” courts are prevented
from “defining nebulous concepts of public policy” and
creating exceptions based on conduct that “simply tends to be
injurious to the public or against the public good.” Rosella v.
Long Rap, Inc., 121 A.3d 775, 778 (D.C. 2015) (citations and
internal quotation marks omitted). Without this statutory
anchor, the at-will doctrine would be reduced to “a virtual
nullity.” Carl, 702 A.2d at 163 (Terry, J., concurring).
Herron seeks to have this Court create a public policy
exception to the at-will doctrine based on the EESA. That
statute, Herron argues, reflects specific public policy interests
1
Judge Terry’s concurrence in Carl “constitutes the effective
holding of the en banc court.” Rosella v. Long Rap, Inc., 121 A.3d
775, 778 n.3 (D.C. 2015); see also Liberatore, 168 F.3d at 1331.
17
in preventing foreclosures and protecting taxpayers’ interests,
which are directly relevant to Herron’s purported disclosures
of Fannie Mae’s maladministration of MHAP. The district
court agreed, holding that Herron’s “claimed public policy of
disclosing or protecting against the gross mismanagement and
the gross waste of public funds is ‘clearly reflected’ and ‘firmly
anchored’” in the EESA. Summary Judgment Opinion, 2016
WL 1177918, at *19–20. In this, the district court erred.
“[A]ny judicially recognized public policy exception to the
at-will doctrine” must be “‘carefully tethered’ to rights
officially recognized in statutes or regulations . . . .” Carl, 702
A.2d at 164 (Terry, J., concurring). For this reason, one
“common denominator” can be found in all of the cases
applying the public policy exception: “the existence of specific
laws or regulations that clearly reflect a policy prohibiting the
activity about which the employee complained . . . .” Leyden
v. Am. Accreditation Healthcare Comm’n, 83 F. Supp. 3d 241,
249 (D.D.C. 2015) (collecting cases); see also Freas v. Archer
Servs., Inc., 716 A.2d 998, 999–1003 (D.C. 1998) (noting that
plaintiff alleged facts demonstrating that he was discharged “in
violation of a mandate explicitly set forth in [D.C.] law”). That
common denominator is missing in this case.
The EESA provisions the district court relied upon simply
identify the general purpose of the statute and the goals the
Secretary must consider in exercising his statutory authority.
See 12 U.S.C. §§ 5201, 5213. Sections 5201 and 5213 neither
“set out a standard of conduct” for Fannie Mae nor “embody a
specific public policy prohibiting [an employer] from engaging
in the conduct [the employee] alleges.” Leyden, 83 F. Supp. 3d
at 249. These sections do not offer the sort of “declaration of
policy . . . needed to support a public policy exception to the
at-will doctrine,” Carl, 702 A.2d at 165 n.9 (Terry, J.,
concurring), and courts are prohibited from creating new
18
exceptions by “broaden[ing] the policies expressed” in a statute
or “fill[ing] a perceived gap in the statute,” id. at 162–63
(Terry, J., concurring) (citation, internal quotation marks, and
alteration omitted). Relying on these provisions to create a new
public policy exception would contravene the District of
Columbia Court of Appeals’ admonition against finding
generalized exceptions. See Rosella, 121 A.3d at 778. The
district court therefore erred in concluding that Herron had
identified a clear source of public policy upon which to base an
exception to the at-will doctrine.
But, because we reject Herron’s request to recognize an
exception that is not clearly reflected or firmly anchored in a
statute or regulation, we affirm the district court’s granting of
summary judgment against Herron on her wrongful
termination claim.
B.
To support her tortious interference with prospective
contractual relations claim, Herron relies on three
expectancies: (1) working as a Fannie Mae contractor
embedded at Treasury; (2) working as a Fannie Mae contractor
on non-HAMP projects; and (3) working for the Collingwood
Group. Under District of Columbia law, a tortious interference
with prospective contractual relations claim requires a valid
business expectancy, the defendant’s knowledge of the
expectancy, intentional interference causing a termination of
the expectancy, and damages. See Banneker Ventures, LLC v.
Graham, 798 F.3d 1119, 1134 (D.C. Cir. 2015); Browning v.
Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002); Havilah Real
Prop. Servs., LLC v. VLK, LLC, 108 A.3d 334, 345–46 (D.C.
2015). This theory of tortious interference protects “business
expectancies, not grounded on present contractual relationships
but which are commercially reasonable to anticipate, . . . from
19
unjustified interference.” Carr v. Brown, 395 A.2d 79, 84
(D.C. 1978). Because Herron has not identified a valid
business expectancy, her claim fails.
Herron cannot maintain a claim for tortious interference
based on either of her expectancies of working as an at-will
Fannie Mae contractor. The District of Columbia Court of
Appeals has been reluctant to recognize a claim for tortious
interference with prospective contractual relations based on a
prospective at-will relationship. See, e.g., McManus v. MCI
Commc’ns Corp., 748 A.2d 949, 957–58 (D.C. 2000). In an
attempt to overcome the at-will hurdle, Herron alleges that she
had a reasonable expectation of continuing employment
because Fannie Mae “routinely and automatically renewed”
contracts such as hers. Even assuming these contracts were
routinely renewed, that fact is insufficient to rebut the at-will
presumption. See id. at 957 (holding that at-will employee
could not base her tortious interference claim on “a long-term
employment relationship and an expectancy of continuing
employment relations with [the defendant]”); Bible Way
Church of Our Lord Jesus Christ of the Apostolic Faith of
Washington, D.C. v. Beards, 680 A.2d 419, 433 (D.C. 1996)
(concluding that plaintiffs failed to state a tortious interference
claim based on an allegation of “a tacit agreement” of
continued employment); see also Summary Judgment Opinion,
2016 WL 1177918, at *14 (rejecting Herron’s argument that
she was not an at-will contractor).
Herron’s claim fails for “an additional simple reason.”
Summary Judgment Opinion, 2016 WL 1177918, at *14. In
this case, Herron argues that Fannie Mae interfered with her
prospective contractual relations with Fannie Mae. But, just as
an employer cannot interfere with its own contract, Fannie Mae
cannot interfere with its own business relationships. See Little
v. Dist. of Columbia Water & Sewer Auth., 91 A.3d 1020, 1030
20
n.12 (D.C. 2014); Paul v. Howard Univ., 754 A.2d 297, 309–
10 (D.C. 2000); McManus, 748 A.2d at 957–58; see also
Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1255
(D.C. Cir. 2005) (noting that “the duty not to interfere with the
plaintiff’s economic relationship with a third party” underlies
tortious interference claims); Dow Chem. Corp. v. Weevil-Cide
Co., 897 F.2d 481, 488–89 (10th Cir. 1990) (explaining that,
for purposes of a tortious interference with prospective
contractual relations claim, “one cannot ‘interfere’ with its own
affairs”).
We also conclude that Herron’s proffered expectancy
outside of Fannie Mae is too remote to support a tortious
interference claim. The prospect of obtaining employment is a
recognized expectancy protected from interference. Carr, 395
A.2d at 84. But any expectancy “‘must be commercially
reasonable to anticipate’ before its loss may be actionable.”
Banneker Ventures, 798 F.3d at 1134 (quoting Browning, 292
F.3d at 242). As the District of Columbia Court of Appeals has
recognized, some expectancies are “simply too remote” to
support a tortious interference claim. Carr, 395 A.2d at 84.
Herron argues that she “pursued a position” at the Collingwood
Group by discussing potential opportunities with the
company’s president. To have an actionable claim, however,
she must show “a probability of future contractual or economic
relationship and not a mere possibility.” Havilah Real Prop.
Servs., 108 A.3d at 351 (citation omitted); cf. Banneker
Ventures, 798 F.3d at 1134–35 (holding that the plaintiff had
demonstrated “far more than a ‘hope’” of a future relationship).
There is nothing in the record—such as a “prospective final
agreement,” see Banneker Ventures, 798 F.3d at 1135—to
support an inference that it was commercially reasonable for
Herron to anticipate employment with the Collingwood Group.
Herron’s claim that she pursued a position, standing alone, falls
21
short of establishing a valid business expectancy. Cf.
Browning, 292 F.3d at 242–43.
Because Herron failed to demonstrate a genuine issue of
material fact as to any valid business expectancy, we affirm the
district court’s grant of summary judgment.
C.
Herron alleged in her complaint that Fannie Mae and the
individual defendants conspired to wrongfully terminate her
contract work. Citing Myers v. Alutiiq International Solutions,
LLC, 811 F. Supp. 2d 261 (D.D.C. 2011), she argues on appeal
that, instead of pursuing a conspiracy claim, she can proceed
directly against the individual defendants on her wrongful
termination claim. See id. at 268–70 (holding that D.C. case
law suggests that a plaintiff may be able assert claims for
wrongful termination against individual employees). It
appears, therefore, that Herron has dropped her civil conspiracy
claim. In any event, since Herron has failed to establish a
cognizable underlying tort, her conspiracy claim fails. See
Browning, 292 F.3d at 245. We therefore affirm the district
court’s grant of summary judgment.
V.
Herron also challenges two discovery rulings, which we
review only for abuse of discretion. Jankovic v. Int’l Crisis
Grp., 822 F.3d 576, 584 (D.C. Cir. 2016); Brune v. IRS, 861
F.2d 1284, 1288 (D.C. Cir. 1988).
A.
Herron asserts that the district court abused its discretion
by denying discovery into the government’s control of Fannie
22
Mae before dismissing her Bivens claim. A Rule 12(b)(6)
motion to dismiss tests the legal sufficiency of a plaintiff’s
complaint; it does not require a court to “assess the truth of
what is asserted or determine whether a plaintiff has any
evidence to back up what is in the complaint.” Browning, 292
F.3d at 242 (citations, internal quotation marks, and alteration
omitted). For this reason, Herron was not entitled to discovery
before the court ruled on the motion to dismiss. See, e.g.,
Mujica v. AirScan Inc., 771 F.3d 580, 593 & n.7 (9th Cir.
2014); Kolley v. Adult Protective Servs., 725 F.3d 581, 587 (6th
Cir. 2013). In addition, for purposes of the motion to dismiss,
the district court assumed that the federal government would
not allow Fannie Mae to emerge from the conservatorship as a
private entity, which is precisely the information Herron sought
in discovery. Because Herron failed to state a Bivens claim
against Fannie Mae, the district court did not abuse its
discretion by denying her discovery into Fannie Mae’s status
as “a Lebron state actor.” See Hack, 237 F.3d at 84–85.
B.
Herron also argues that she was entitled to discovery into
the facts underlying a report that details the results of an
investigation into Herron’s allegations undertaken by Fannie
Mae. See Summary Judgment Opinion, 2016 WL 1177918, at
*7 n.8 (discussing the report). During a telephone conference
in or around April 2011, the district court denied Herron’s
discovery request but did not memorialize its order. We are
constrained in our review because Herron failed to follow the
proper procedure to allow this Court to adequately consider the
district court’s discovery ruling. When a district court makes a
ruling off the record, Rule 10(c) of the Federal Rules of
Appellate Procedure provides an appellant with a mechanism
to reconstruct the record and bring that ruling before an
appellate court. See FED. R. APP. P. 10(c). Herron, as the
23
appellant, bore the burden of invoking and complying with
Rule 10(c) to properly challenge the district court’s ruling
denying discovery into the report. Because the district court’s
ruling was not memorialized and Herron failed to comply with
the procedure set forth in Rule 10(c), “meaningful appellate
review is virtually impossible.” Badami v. Flood, 214 F.3d
994, 999 (8th Cir. 2000). Under these circumstances, “we have
no option but to defer to the district court’s ruling . . . .”
SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1517 (10th Cir.
1990).
***
For the reasons stated above, the district court’s orders are
affirmed.
So ordered.