Vander Zee v. Reno

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
___________________
No. 95-50482
HARLAN D. VANDER ZEE,
Plaintiff-Appellant,
versus
JANET RENO; ROBERT E. RUBIN; STONE
OAK BANKSHARES INC.; STONE OAK
NATIONAL BANK; FIDELITY AND DEPOSIT
COMPANY OF MARYLAND; EUGENE LUDWIG,
Comptroller of the Currency of the
United States,
Defendants,
and
RONALD F. EDERER, U.S. ATTORNEY;
JACK C. FRELS; ROBERT S. MULLER, III;
JOAN EARP; JESSE WONG; JEFF DOWDY;
JOE FLORIO; UNITED STATES OF AMERICA,
Defendants-Appellees.
________________________________________________
Appeal from the United States District Court for the
Western District of Texas
(A-94-CV-469)
________________________________________________
October 4, 1996
Before GARWOOD, DAVIS and DeMOSS, Circuit Judges.*
GARWOOD, Circuit Judge:
*
Pursuant to Local Rule 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
Plaintiff-Appellant Harlan D. Vander Zee (Vander Zee) appeals
the dismissal of his claims brought against the United States under
the Federal Tort Claims Act (FTCA) and against several individual
federal defendants under Bivens v. Six Unknown Named Agents of the
Federal Bureau of Narcotics, 91 S. Ct. 1999 (1971). We affirm.
Facts and Proceedings Below
Between 1986 and 1991, Vander Zee served as executive vice-
president of Stone Oak National Bank in San Antonio, Texas. During
this period, he became aware of large cash deposits being made by
Mario Alberto Salinas-Trevino (Salinas) and his associates. By all
indications, Vander Zee properly reported these transactions to
federal authorities as required by law. In March 1989, Salinas was
indicted and arrested on drug trafficking charges, although he
later escaped from custody.
Vander Zee alleges that following Salinas’ escape Assistant
United States Attorney Jack C. Frels (Frels) threatened Vander Zee
with indictment for money laundering unless he would falsely
testify that he and other Stone Oak officers were aware that the
funds deposited by Salinas were drug proceeds. Vander Zee and
Stone Oak’s president, Herbert E. Pounds, Jr. (Pounds), were
subsequently indicted by a federal grand jury on money laundering
charges, although they were ultimately acquitted by the trial court
at the close of the government’s case-in-chief. Following Vander
Zee’s indictment, Vander Zee’s resignation was requested by Stone
2
Oak’s Board of Directors. Vander Zee alleges that “Jack C. Frels,
Joseph Florio and unknown persons at justice [sic] in Washington
calling the shots caused someone at the OCC [Office of the
Comptroller of the Currency], on information and belief Wong or
Earp to orally demand that the bank fire Vander Zee,” and that “Mr.
Schumann, President of the Bank, duly reported to the Board of
Directors the demand by the Department of Justice (conveyed by
OCC), that either Vander Zee would be fired or the bank would be
closed.” Vander Zee resigned from his position at Stone Oak on May
22, 1990.
After the conclusion of the criminal proceedings against
Vander Zee, the government continued to pursue a civil forfeiture
action against assets seized at the time of Salinas’ arrest.
Salinas’ interest in these assets was forfeited. Stone Oak, which
had a lien on the assets securing loans it had made, and the United
States were the sole remaining litigants. Stone Oak eventually
reached a settlement agreement with the United States allowing
Stone Oak to retain these assets to recapitalize the bank. In
addition, an addendum to the settlement agreement provided that
Stone Oak would neither rehire Vander Zee nor pay attorneys’ fees
or provide other financial assistance “unless the Bank becomes
legally obligated to do so.” The settlement agreement and addendum
were expressly made contingent upon approval by the United States
District Court in which the forfeiture action was pending, which
approval was subsequently obtained, and an order accepting the
3
settlement was entered by the district court on August 14, 1992.
On August 13, 1993, Vander Zee filed suit against the United
States and several former government officials in their individual
capacities, including former Assistant Attorney General Robert S.
Mueller, III (Mueller), former United States Attorney Ronald Ederer
(Ederer), and former Assistant United States Attorney Jack C.
Frels, as well as against private defendants Stone Oak, Stone Oak
Bankshares, Inc., and Fidelity & Deposit Company of Maryland. The
United States and the former government officials sued in their
individual capacities filed motions to dismiss pursuant to Federal
Rules of Civil Procedure 12(b)(1) and 12(b)(6). These motions were
granted by the district court. The district court held, inter
alia, that Vander Zee’s Bivens claims against the individual
defendants should be dismissed because Vander Zee failed to allege
the violation of any constitutionally protected interest, or,
alternatively, because the individual defendants were entitled to
qualified immunity because the interests allegedly infringed were
not “clearly established.” These claims were subsequently severed
from the original action, and a final judgment for the defendants
was entered on August 26, 1994. Appeal was taken to this Court,
which affirmed the judgment of the district court. Vander Zee v.
Reno (Vander Zee I), 73 F.3d 1365 (5th Cir. 1996).
The present action (Vander Zee II) was filed in the United
States District Court for the Western District of Texas, Austin
4
Division, on July 1, 1994. Vander Zee has attempted to assert
state law tort claims against the United States under the Federal
Tort Claims Act (FTCA) and against the individual defendants for
false arrest, false imprisonment, malicious prosecution, abuse of
process, intentional and/or negligent infliction of emotional
distress, defamation, civil conspiracy, and interference with
contract rights relating to Vander Zee’s purportedly coerced
resignation from Stone Oak, his arrest and prosecution, and harms
allegedly caused by the terms of the settlement agreement and
addendum entered into between Stone Oak and the government. Vander
Zee also asserts Bivens claims against several government attorneys
including Ederer, Frels, Mueller, and Joseph Florio (Florio),
against FBI agent Jeff Dowdy (Dowdy), and against employees of the
Office of the Comptroller of the Currency (OCC) Joan Earp (Earp)
and Jesse Wong (Wong) for their actions relating to these events.
Motions to dismiss were filed on behalf of the United States
and the individual federal defendants, which were granted by the
district court by order entered April 25, 1995. The district court
first held that the United States was properly substituted for the
individual defendants with respect to Vander Zee’s state law claims
pursuant to a notice of substitution filed by the United States as
provided under the Westfall Act, 28 U.S.C. § 2679. The district
court then held that all claims against the United States must be
dismissed for want of subject matter jurisdiction as Vander Zee’s
5
state law claims all fell within the exceptions to the FTCA’s
general waiver of sovereign immunity as provided at 28 U.S.C. §
2680(h). Alternatively, the district court held that Vander Zee’s
claims were barred by the FTCA’s discretionary function exception
as provided at 28 U.S.C. § 2680(a). With respect to the remaining
Bivens claims against the individual defendants, the district court
held that Vander Zee’s claims were barred by the applicable statute
of limitations, that Vander Zee’s claims pertaining to the terms of
the settlement agreement and addendum were barred by collateral
estoppel having previously been decided in Vander Zee I, that
defendants Mueller, Ederer, Frels, and Florio were entitled to
absolute immunity from any claims related to Vander Zee’s
indictment and prosecution, and that the individual defendants were
entitled to qualified immunity from Vander Zee’s claims relating to
the terms of the settlement agreement and to his allegedly coerced
resignation from Stone Oak. Vander Zee now brings this appeal.
Discussion
We review the district court’s dismissal under Rule 12(b)(6)
for failure to state a claim de novo, taking all facts properly
pleaded as true and viewing them in the light most favorable to the
plaintiff. Rolf v. City of San Antonio, 77 F.3d 823, 827 (5th Cir.
1996). “Dismissal is not proper unless it appears, based solely on
the pleadings, that the plaintiff can prove no set of facts in
support of the claim(s) warranting relief.” Id; see also Morin v.
6
Caire, 77 F.3d 116, 120 (5th Cir. 1996). Though we take factual
allegations of the complaint to be true, “we do not assume facts
the plaintiffs have not alleged.” McCormack v. National Collegiate
Athletic Ass’n, 845 F.2d 1338, 1343 (5th Cir. 1988). The district
court’s dismissal under Rule 12(b)(1) for lack of subject matter
jurisdiction is similarly subject to de novo review. Zuspann v.
Brown, 60 F.3d 1156, 1157 (5th Cir. 1995), cert. denied, 116 S. Ct.
909 (1996).
I. Claims Against the United States
A. Substitution of United States for Individual Defendants
on State Law Claims
The Westfall Act, 28 U.S.C. § 2679, provides:
“Upon certification by the Attorney General that the
defendant employee was acting within the scope of his
office or employment at the time of the incident out of
which the claim arose, any civil action or proceeding
commenced upon such claim in a United States district
court shall be deemed an action against the United States
under the provisions of this title and all references
thereto, and the United States shall be substituted as
the party defendant. Id. at § 2679(d)(1).
Generally, such certification is subject to de novo judicial
review, and the question whether the employee was acting within the
scope of employment is governed by the law of the state in which
the conduct at issue occurred. Garcia v. United States, 62 F.3d
126, 127 (5th Cir. 1995)(en banc). Although we give no judicial
deference to the Attorney General’s findings, Palmer v. Flaggman,
93 F.3d 196, 198-99 (5th Cir. 1996), the plaintiff bears the burden
7
of proof to show that the employee’s conduct was not within the
scope of employment. Williams v. United States, 71 F.3d 502, 506
(5th Cir. 1995).
In the present case, Helene M. Goldberg, Director of the Torts
Branch, Civil Division of the United States Department of Justice,
certified that the individual defendants were acting within the
scope of their employment with respect to the conduct alleged
within Vander Zee’s First Amended Complaint.1 The court below
noted that Vander Zee filed no opposition to the notice of
substitution, although he had alleged in his First Amended
Complaint and in response to the motion to dismiss that the
individual defendants’ acts were outside of the scope of their
employment. The district court found based upon the pleadings that
the individual defendants were acting within the scope of their
employment. We agree, for the reasons set out below in our
discussion of the FTCA discretionary function exception (see part
1
Vander Zee suggests in his brief that the certification is
invalid because it was not made by the Attorney General. However,
authority to make this certification is delegated to the Director
of the Torts Branch by the Assistant Attorney General in charge of
the Civil Division at 28 C.F.R. 15.3, Appendix (Directive No. 90-
79).
In addition, the government acknowledges that the
certification erroneously cites section 2679(d)(2) which deals with
certification for purposes of removal of cases brought against
government employees in state court and substitution of the United
States as party defendant. The proper provision is found at
section 2679(d)(1), which addresses substitution following
certification for cases brought in a United States district court.
However, this discrepancy does not invalidate the certification nor
did it cause any prejudice to Vander Zee.
8
I C, infra) and of the defendants’ entitlement to qualified (and,
in part, absolute) immunity (see part II B, infra). The district
court’s substitution of the United States for the individual
defendants was correct and is affirmed. Further, the district
court also held that by failing to oppose the certification Vander
Zee in substance waived any challenge to it and failed to carry his
burden of showing the certification was erroneous. We agree with
the district court that having failed to oppose the notice of
substitution Vander Zee necessarily waived any challenge to it and
failed to carry his burden of showing the certification was
erroneous. As Vander Zee failed to challenge the notice of
substitution and certification, for this reason also the United
States was properly substituted for the individual defendants with
respect to Vander Zee’s state law claims.
B. Section 2680(h) of the Federal Tort Claims Act
As sovereign, the United States is generally immune from suit
except where it has expressly consented to be sued. Saraw
Partnership v. United States, 67 F.3d 567, 569 (5th Cir. 1995);
Truman v. United States, 26 F.3d 592, 594 (5th Cir. 1994). Absent
such consent, any suit brought against the United States must be
dismissed for lack of subject matter jurisdiction. Truman, 26 F.3d
at 594. However, the Federal Tort Claims Act (FTCA) waives
immunity for any --
“negligent or wrongful act or omission of any employee of
the Government while acting within the scope of his
9
office or employment, under circumstances where the
United States, if a private person, would be liable to
the claimant in accordance with the law of the place
where the act or omission occurred.” 28 U.S.C. §
1346(b).
The waiver of immunity found in the FTCA is, however, subject to
several exceptions found at section 2680(h), which excludes “[a]ny
claim arising out of assault, battery, false imprisonment, false
arrest, malicious prosecution, abuse of process, libel, slander,
misrepresentation, deceit, or interference with contract rights.”2
These exceptions are to be strictly construed in favor of the
government. McNeily v. United States, 6 F.3d 343, 347 (5th Cir.
1993); Saraw Partnership, 67 F.3d at 569.
We agree fully with the district court’s conclusion that
Vander Zee’s state law claims all fall within the exceptions to the
waiver of sovereign immunity contained in section 2680(h), and
recapitulate this analysis only briefly here. With respect to
Vander Zee’s claims for false imprisonment, false arrest, malicious
2
The exceptions to the waiver of sovereign immunity contained
in section 2680(h) are inapplicable to “investigative or law
enforcement officers” defined as “any officer of the United States
who is empowered by law to execute searches, to seize evidence, or
to make arrests for violations of Federal law.” 28 U.S.C. §
2680(h). Vander Zee suggests in his First Amended Complaint that
the United States Attorneys should be considered “law enforcement
officers” by virtue of the control which they exercised over the
actions of agents of the FBI. However, those courts that have
considered the question have concluded that prosecuting attorneys
are not “law enforcement officers” within the meaning of this
section. See Bernard v. United States, 25 F.3d 98, 104 (2d Cir.
1994); Ware v. United States, 838 F. Supp. 1561, 1563-64 (M.D. Fla.
1993); Dirienzo v. United States, 690 F. Supp. 1149, 1158 n.8 (D.
Conn. 1988). We agree.
10
prosecution, and abuse of process, these causes of action are all
expressly included in section 2680(h), except for acts or omissions
of “investigative or law enforcement officers.” Vander Zee
attempts to evade the strictures of section 2680(h) by attributing
the acts that form the basis of these claims to agents of the
Federal Bureau of Investigation. As the district court properly
noted, Vander Zee’s complaint suggests that his prosecution was the
result of his unwillingness to testify against the bank as
allegedly demanded by Assistant United States Attorney Frels.
Therefore, Vander Zee’s claims for malicious prosecution and abuse
of process are premised on actions of a government agent who is not
an investigative or law enforcement officer, and these claims are
expressly foreclosed by the FTCA. Clearly, the United States
Attorney’s office was responsible for prosecuting Vander Zee, and
the fact that the FBI may have assisted in the investigation does
not alter this analysis. As far as the claims for false
imprisonment and false arrest are concerned, Vander Zee’s arrest
and detention were pursuant to an indictment and therefore cannot
form the basis for a claim for false imprisonment or false arrest
against the FBI agents performing the arrest under Texas law. See
Pete v. Metcalfe, 8 F.3d 214, 218-19 (5th Cir. 1993)(no action for
false imprisonment for arrest pursuant to valid warrant); see also
Campbell v. City of San Antonio, 43 F.3d 973, 976 & 980 n.11 (5th
Cir. 1995).
11
Vander Zee’s complaint contains additional allegations that
could be read as either claims for deprivations of constitutionally
protected property rights or as state law claims for interference
with contract rights and defamation relating to his allegedly
coerced resignation and the subsequent settlement agreement entered
into between the bank and the government. In either case, Vander
Zee may not recover from the United States under the FTCA. Federal
constitutional torts may not be pursued under the FTCA, Federal
Deposit Ins. Corp. V. Meyer, 114 S. Ct. 996, 1001 (1994), while
claims for interference with contract rights or defamation are
specifically excepted from the FTCA’s waiver of sovereign immunity
by section 2680(h).
Vander Zee additionally asserts claim for either intentional
or negligent infliction of emotional distress. While these claims
are not specifically excepted from the FTCA’s waiver of sovereign
immunity under section 2680(h), our opinion in Truman v. United
States, 26 F.3d 592, 594 (5th Cir. 1994), explains that “[i]f the
conduct upon which a claim is based constitutes a claim ‘arising
out of’ any one of the torts listed in section 2680(h) then federal
courts have no jurisdiction to hear that claim.” Plainly Vander
Zee’s claim arises out of his arrest and prosecution, allegedly
coerced resignation from his job, and the terms of the settlement
agreement, which we have already indicated must be understood to be
claims for torts specifically enumerated under section 2680(h).
12
Finally, Vander Zee asserts a claim for civil conspiracy to
deprive him of his job, his future employment prospects, and legal
fee reimbursement to which he claims an entitlement. However,
there is no independent liability for civil conspiracy under Texas
law, but rather liability is premised upon a conspiracy to commit
an underlying wrongful act. See Banc One Capital Partners Corp. v.
Knepper, 67 F.3d 1187, 1194-95 & n.10 (5th Cir. 1995). As we have
already established, Vander Zee’s claims arise out of torts
specifically enumerated under section 2680(h), and therefore his
civil conspiracy claim may not be maintained under the FTCA.
For the foregoing reasons, we concur in the district court’s
conclusion that it was without subject matter jurisdiction of
Vander Zee’s claims against the United States, and therefore these
claims were properly dismissed.
C. Discretionary Function Exception
The district court held in the alternative that Vander Zee’s
claims were barred by section 2680(a) of the FTCA, often referred
to as the “discretionary function exception,” which provides:
“The provisions of this chapter and section 1346(b)
of this title shall not apply to -
(a) Any claim based upon an act or
omission of an employee of the Government,
exercising due care, in the execution of a
statute or regulation, whether or not such
statute or regulation be valid, or based upon
the exercise or performance or the failure to
exercise or perform a discretionary function
or duty on the part of a federal agency or an
employee of the Government, whether or not the
discretion involved be abused.” 28 U.S.C.
13
2680(a)(emphasis added).
Whether the conduct of a government employee falls within
the ambit of the discretionary function exception involves a two-
part inquiry. First, “[t]he exception covers only acts that are
discretionary in nature, acts that ‘involv[e] an element of
judgment or choice.’” United States v. Gaubert, 111 S. Ct. 1267,
1273 (1991)(quoting Berkovitz v. United States, 108 S. Ct. 1954,
1958 (1988))(alteration in original). This first requirement “is
not satisfied if a ‘federal statute, regulation, or policy
prescribes a course of action for an employee to follow,’ because
‘the employee has no rightful option but to adhere to the
directive.’” Id. (quoting Berkovitz, 108 S.Ct. at 1958-59).
If this first requirement is met, it must be determined
whether the challenged action was of the type that the
discretionary function is designed to shield as “the exception
‘protects only governmental actions and decisions based on
considerations of public policy.’” Id. at 1273-74 (quoting
Berkovitz, 108 S. Ct. at 1959). “When established governmental
policy, as expressed or implied by statute, regulation, or agency
guidelines, allows a Government agent to exercise discretion, it
must be presumed that the agent’s acts are grounded in policy when
exercising that discretion.”3 Id. at 1274.
3
See also ALX El Dorado, Inc. v. Southwest Savings & Loan
Assn., 36 F.3d 409 (5th Cir. 1994)(applying Gaubert analysis);
McNeily v. United States, 6 F.3d 343 (5th Cir. 1993)(same).
14
With respect to Vander Zee’s allegedly coerced resignation
from Stone Oak, he contends that the discretionary function
exception is inapplicable because: (1) the government lacked
discretion to remove him as a bank officer without following the
formal procedures set forth at 12 U.S.C. § 1818; and (2) the
Department of Justice lacked authority to interfere in the
regulation of banking personnel.
Vander Zee’s first argument is contradicted by the Supreme
Court’s decision in Gaubert in which the Court, applying a statute
governing the supervisory powers of the Federal Home Loan Bank
Board (FHLBB) that is analogous to § 1818, concluded:
“Although the statutes provided only for formal
proceedings, there is nothing in the language or
structure of the statutes that prevented the regulators
from invoking less formal means of supervision of
financial institutions. Not only was there no statutory
or regulatory mandate which compelled the regulators to
act in a particular way, but there was no prohibition
against the use of supervisory mechanisms not
specifically set forth in statute or regulation.”
Gaubert, 111 S. Ct. at 1277.
Based upon this analysis, the Supreme Court concluded that the
regulators’ informal actions fell within the reach of the
discretionary function exception. Id. at 1278. We similarly
conclude that the OCC possessed discretion in its supervision of
banking personnel, as Vander Zee cites us to no statute or
regulation to the contrary.
Vander Zee’s second argument is similarly unavailing because
his First Amended Complaint does not allege that the Department of
15
Justice alone was responsible for his allegedly forced resignation
from Stone Oak, but rather that the OCC demanded Vander Zee’s
resignation, albeit at the behest of the Department of Justice.4
As we have just indicated, the OCC clearly possessed discretion in
its regulation of banking personnel. We do not see that this
result is altered by the allegation that the OCC allegedly took the
action as a result of consultation with employees of the Department
of Justice.
The actions of the government attorneys related to Vander
Zee’s indictment and prosecution are similarly protected by the
discretionary function exception. See Sutton v. United States, 819
4
In particular, Vander Zee’s First Amended Complaint alleges:
“Within the next several days Jack C. Frels,
Joseph Florio and the unknown persons at
justice (sic) in Washington calling the shots
caused someone at the OCC, on information and
belief Wong or Earp to orally demand that the
bank fire Vander Zee.”
The complaint further alleges:
“Mr. Schumann, President of the Bank, duly
reported to the Board of Directors the demand
by the Department of Justice (conveyed by
OCC), that either Vander Zee would be fired or
the bank would be closed.”
Vander Zee now argues in his brief that “Even before his trial
DOJ attorneys, acting without the concurrence of the OCC, took away
his job...” Vander Zee apparently bases this new allegation in his
brief on the testimony of bank examiner Jesse Wong obtained at the
trial of Vander Zee’s action against Stone Oak following the
severance in Vander Zee I. However, this allegation was not before
the district court in Vander Zee’s present complaint and his motion
to supplement the record on appeal has been denied.
16
F.2d 1289, 1298 (5th Cir. 1987)(“absent extremely compelling
circumstances, an unsuccessful prosecution must generally be
determined to warrant application of the discretionary function
exception”); see also Moore v. Valder, 65 F.3d 189, 196-97 (D.C.
Cir. 1995), petition for cert. filed, 64 U.S.L.W. 3856 (U.S. June
7, 1996)(No. 95-2005). Nor does Vander Zee’s allegation that Frels
used the threat of indictment to force Vander Zee to testify
against Stone Oak place his actions outside of the scope of the
discretionary function exception. See Moore, 65 F.3d at 197
(discretionary function exception applicable to prosecutor’s
actions despite allegations that he “pressured witnesses into
incriminating [plaintiff], concealed and distorted exculpatory
evidence to create a false impression of what [plaintiff] knew
about the fraud schemes and withheld material exculpatory
information from him”).
Finally, we agree with the district court that the actions of
the United States Attorneys in settling the civil forfeiture action
with Stone Oak also fall within the discretionary function
exception. Negotiating the terms of a settlement agreement appears
to us to be an act in which a great deal of discretion necessarily
inheres, and Vander Zee has cited us to no statute, regulation, or
policy setting forth a course of action for government attorneys to
pursue in negotiating a settlement agreement in a civil proceeding.
In particular, settling a civil forfeiture action upon which the
17
solvency of a financial institution depends would appear to be the
type of policy decision that the exception is intended to protect.
II. Claims Against the Individual Defendants
The only remaining claims are Bivens claims against the
individual defendants for alleged violations of Vander Zee’s
constitutional rights.
A. Collateral Estoppel
The district court held that Vander Zee’s Bivens claims
arising out of the terms of the settlement agreement were barred by
collateral estoppel having been decided by the district court in
Vander Zee I. In order for collateral estoppel to apply, the
following elements must be satisfied: “(1) the issue under
consideration is identical to that litigated in the prior action;
(2) the issue was fully and vigorously litigated in the prior
action; (3) the issue was necessary to support the judgment in the
prior case; and (4) there is no special circumstance that would
make it unfair to apply the doctrine.”5 Copeland v. Merrill Lynch
& Co., Inc., 47 F.3d 1415, 1422 (5th Cir. 1995).
5
While some decisions issued by this Court have cited this
last requirement as a general requirement for the application of
collateral estoppel, see United States v. Shanbaum, 10 F.3d 305,
311 (5th Cir. 1994), at least one of our decisions suggests that
the fairness requirement may be limited to cases involving
offensive, as opposed to traditional, collateral estoppel only.
See RecoverEdge L.P. v. Pentecost, 44 F.3d 1284, 1290-91 n.11 (5th
Cir. 1995). As the fairness requirement has not been raised by the
parties as an obstacle to the application of collateral estoppel ,
nor do we perceive any such unfairness, we need not resolve this
question today.
18
Applying this standard to the present facts, we concur in the
district court’s conclusion that collateral estoppel prevents
Vander Zee from relitigating the issue of the individual
defendants’ Bivens liability arising out of the terms of the
settlement agreement and addendum. In Vander Zee I, the district
court dismissed Vander Zee’s claims pertaining to the terms of the
settlement and addendum on the ground that Vander Zee had failed to
allege the invasion of a constitutionally protected interest in
liberty or property. Alternatively, the district court held that
the United States Attorneys were entitled to qualified immunity as
the interests allegedly infringed were not “clearly established.”
Vander Zee’s asserted liberty interest in Vander Zee I was in his
future employment in the banking industry while his asserted
property interest was in being rehired by Stone Oak and in
receiving attorneys’ fees to which he believed he was entitled.
Vander Zee’s present complaint asserts the violation of precisely
these same interests, thereby satisfying the first prong of the
collateral estoppel standard.6
6
Vander Zee’s amended complaint alleges in relevant part:
“Since May 1990 Vander Zee has been largely
unemployed and essentially unemployable in the
profession of his choice, at the Stone Oak
National Bank, or a comparable institution.”
....
“Vander Zee further would show that the
individual defendants, either acting alone or
19
We further conclude that the second prong of the collateral
estoppel analysis is satisfied as the Bivens claims relating to the
terms of the settlement agreement and addendum were fully briefed
and argued in Vander Zee I in resolving the motions to dismiss.
The resolution of the Bivens claims was clearly necessary to the
judgment as the determination of these issues was central to the
defendants’ motions to dismiss. Finally, we perceive no unfairness
under the facts of the present case in applying collateral estoppel
to bar relitigation of claims that have already been fully and
in concert, under color of federal law,
engaged in constitutionally prohibited conduct
in violation of ...Bivens by going beyond the
course and scope of their duties as federal
prosecutors, without good faith, and with
malice, in coercing the Bank into...(2)
failing to re-hire Vander Zee as promised, and
(3) signing the Settlement Agreement and
Addendum to the Settlement Agreement, which
operated as a bar to Vander Zee’s employment,
forever, with the Bank and any prospective
opportunities for employment in the banking
industry....”
Vander Zee contends both in his initial brief and in his reply
brief that collateral estoppel is inapplicable because different
facts have been alleged in the present case with respect to Vander
Zee’s allegedly coerced resignation and because Vander Zee’s FTCA
claims are now ripe for adjudication. These arguments reflect a
basic misapprehension of the district court’s decision below. The
district court held that collateral estoppel operated to bar only
relitigation of Vander Zee’s Bivens claims relating to the terms of
the settlement agreement and addendum. That Vander Zee might now
have further evidence on these points is no reason not to apply
collateral estoppel. And, Vander Zee’s arguments pertaining to the
allegations concerning his resignation or the ripeness of his FTCA
claims are irrelevant to the holding respecting the settlement
agreement and addendum.
20
fairly litigated in a previous suit.
B. Qualified Immunity7
The determination of whether a government official’s actions
are entitled to the protection of qualified immunity requires a
two-part analysis:
“First, the court must determine whether the plaintiff
has alleged the violation of a clearly established
constitutional right. If the plaintiff fails this step,
the defendant is entitled to qualified immunity. If she
is successful, the issue becomes the objective legal
reasonableness of the defendant’s conduct under the
circumstances.” Baker v. Putnal, 75 F.3d 190, 198 (5th
Cir. 1996)(internal citations omitted).
See also Vera v. Tue, 73 F.3d 604, 607 (5th Cir. 1996). We
determine that Vander Zee’s claims against the individual
defendants fail the first step of this analysis, and we affirm the
district court’s holding that the individual defendants are
entitled to the protection of qualified immunity.
In Vander Zee I, we thoroughly analyzed Vander Zee’s Bivens
claims pertaining to the terms of the settlement agreement and
7
The court below additionally held that Mueller, Ederer,
Frels, and Florio were entitled to absolute immunity in connection
with Vander Zee’s Bivens claims pertaining to his criminal
prosecution. See, e.g., Graves v. Hampton, 1 F.3d 315, 318 (5th
Cir. 1993)(absolute immunity “applies to prosecutor’s actions in
initiating prosecution and in carrying the case through the
judicial process”). The district court noted that Vander Zee
conceded this issue below, and he does not contest it in his
original brief to this Court. While Vander Zee does raise the
issue of absolute immunity in his reply brief, he does so only in
a wholly conclusory and inadequate fashion. “An appellant abandons
all issues not raised and argued in its initial brief on appeal,”
Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir.), cert. denied, 115
S. Ct. 189 (1994). We affirm the district court on this point.
21
addendum and concluded that Vander Zee had failed to allege the
violation of a clearly established constitutional right, therefore
concluding that the individual defendants were entitled to the
defense of qualified immunity. We find nothing to alter this
analysis, and accordingly do not revisit this issue here.
Vander Zee additionally alleges in the present case that
employees of the OCC acting in conjunction with employees of the
Department of Justice coerced Stone Oak into demanding Vander Zee’s
resignation. As we previously noted, however, the Supreme Court in
Gaubert has approved of the use of informal means by regulators to
remove officers of financial institutions. See Gaubert, 111 S. Ct.
at 1277. Indeed, the Court in Gaubert noted that the use of
informal means by regulators to supervise financial institutions
has a long history and has previously been approved by the courts.
Id. at 1279. Vander Zee cites us to no contrary authority
suggesting that the actions of the OCC employees in the present
case in allegedly seeking his removal through informal channels
violated his clearly established constitutional rights. Nor do we
find that the fact that the OCC allegedly so acted as a result of
requests by employees of the Department of Justice alters this
result. Therefore, we affirm the district court’s conclusion that
the individual defendants were entitled to the defense of qualified
immunity against Vander Zee’s claims arising out of his allegedly
22
coerced resignation from Stone Oak.8
Finally, Vander Zee has not adequately challenged the district
court’s further holding that his Bivens claims were also barred by
the applicable statute of limitations.9
Conclusion
For the foregoing reasons, the district court’s judgment
dismissing all claims against the United States and the individual
defendants is hereby
8
Contrary to Vander Zee’s contentions, our holding today is
in no way inconsistent with our opinion in Vander Zee I on this
point. In Vander Zee I, we noted that the district court had
observed that “the district court noted in its order that had
Vander Zee alleged that the defendants had coerced his termination
from his position at Stone Oak he could have presented a claim
which would withstand the qualified immunity defense.” The
individual defendants referred to in Vander Zee I were the
Department of Justice attorneys, as the OCC employees had not been
made parties to that action. Vander Zee does not allege in his
present complaint that the United States Attorneys acting alone
coerced his resignation, but that the OCC employees (who are
parties to the present action) acting as a result of requests by
these defendants made the demand on Stone Oak. As the power of
financial regulators to use informal means to supervise financial
institutions has been approved, Vander Zee’s complaint fails to
allege the violation of a clearly established constitutional right.
9
Vander Zee’s initial brief contains no argument with respect
to the statute of limitations, and this point is therefore waived.
See, e.g., Cinel, 15 F.3d at 1345. Vander Zee challenges the
government’s waiver argument in his reply brief by citing isolated
references to the statute of limitations in his initial brief.
However, an issue must be “briefed and argued” in the initial brief
to avoid waiver. Id. Vander Zee’s isolated references in his
initial brief make no effort at cogent argument so as to avoid
waiver.
23
AFFIRMED.10
10
All pending, undisposed of motions are denied.
24