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Egger v. Phillips

June 2, 1983

CHARLES E. EGGER, PLAINTIFF-APPELLANT,
v.
HARLAN C. PHILLIPS, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 78-C-508 -- Cale J. Holder, Judge.

Author: Eschbach

Before CUMMINGS, Chief Judge, PELL, BAUER, WOOD, CUDAHY, ESCHBACH, POSNER, and COFFEY, Circuit Judges.

ESCHBACH, Circuit Judge.*fn* In this case a former Special Agent of the Federal Bureau of Investigation claims that certain personnel decisions made by his former supervisor violated his rights under the First, Fifth, Sixth, and Ninth Amendments of the United States Constitution. The district court granted defendant's motion for summary judgment on all of plaintiff's claims. A panel of this court unanimously affirmed the district court's grant of summary judgment on plaintiff's Fifth, Sixth, and Ninth Amendment claims, but a majority of the panel reversed the grant of summary judgment on the First Amendment claim, observing that the question on that claim was a close one. See 669 F.2d 497, 504 (7th Cir. 1982). On August 9, 1982, defendant-appellee's petition for rehearing with suggestion for rehearing en banc was granted.For the reasons which follow, we now affirm the judgment of the district court granting defendant's motion for summary judgment on all of plaintiff's claims.*fn1

I

Shortly after he was dismissed from his employment as a Special Agent of the Federal Bureau of Investigation for failing to report to a new duty station in Chicago, Illinois, plaintiff-appellant Egger brought this action for money damages against his former supervisor at the FBI's Indianapolis (Indiana) Field Office, defendant-appellee Phillips, who had recommended Egger's transfer away from the Indianapolis office.Egger's complaint, filed on August 18, 1978 in the United States District Court for the Southern District of Indiana, alleges that Phillips recommended the transfer and took other administrative actions adversely affecting Egger's employment with the FBI because of Egger's allegations of wrongful conduct directed against other personnel in the Indianapolis office. Styling Phillips' actions as retaliation against him for his efforts to expose alleged corruption in the Indianapolis office, Egger contends that Phillips violated his freedom of speech secured by the First Amendment.

Defendant filed a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6) on October 27, 1978, contending, inter alia, that the complaint failed to state a cause of action under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971), and its progeny, the only possible source of a federal remedy in this case. On February 8, 1979, defendant filed his answer, generally denying the material allegations of the complaint and raising the defense of immunity. The district court denied defendant's motion to dismiss without discussion on July 9, 1979. On November 1, 1979, defendant filed a motion for summary judgment, together with supporting affidavits and other material, pursuant to Fed. R. Civ. P. 56, arguing that defendant's actions toward plaintiff were taken to preserve the effective functioning of the FBI's Indianapolis Field Office and also asserting that his actions were taken in good faith. Plaintiff responded to the summary judgment motion on December 7, 1979 with a "Statement of Genuine Facts" signed by counsel and in memorandum in opposition, arguing that the crucial issue in the case -- defendant Phillips' state of mind -- was not amenable to resolution via summary judgment. In addition, on January 31, 1980, plaintiff filed two affidavits, the first discussing certain personnel regulations of the FBI, and the second relating a portion of a telephone conversation between Egger and Phillips which Egger had recorded without Phillips' knowledge.Defendant filed a reply brief on January 31, 1980, together with additional affidavits and materials.*fn2

After hearing oral argument on defendant's summary judgment motion, and receiving supplemental briefs and material, including a submission personally prepared by plaintiff,*fn3 the district court granted the motion for summary judgment on September 22, 1980. Based on a close examination of the large amount of documentary evidence before it,*fn4 the court's opinion consists largely of a detailed chronology of Egger's employment history with the FBI and his relationship with the personnel of the Indianapolis Field Office from the fall of 1977 through the spring of 1978. The court rejected plaintiff's First Amendment claim of retaliatory transfer, stating that plaintiff had failed to demonstrate a liberty or property interest in remaining assigned to the Indianapolis Field Office. Moreover, the district court concluded:

Egger's activities substantially contributed to creating havoc in the Indianapolis Field Office of his employer. The Court takes judicial notice of the fact that the Federal Bureau of Investigation is a paramilitary organization wherein security of information, discipline and teamwork are of primary importance. Egger was disliked and not trusted by the majority of the personnel in the Indianapolis office.

Even assuming that Phillips' efforts to have Egger transferred were in part motivated by Egger's attempts to uncover what he considered to be wrongdoing by other agents, the substantial legitimate basis for Egger's transfer supplants any element of causation between the assumed wrong motive and the transfer.

Dist. Ct. Op. at 48.

On appeal, the majority of the panel stated that the district court incorrectly characterized the controlling First Amendment doctrine regarding public employers' actions against their employees in retaliation for the exercise of free speech. The majority observed that appellant need not show a legitimate claim of entitlement to continued employment at the Indianapolis office in order to prevail on his claim that the transfer was carried out in retaliation for his exercise of First Amendment rights. 669 F.2d at 501-02. The majority, noting that summary judgment is often inappropriate when questions of intent are presented, concluded that the evidence before the district court created a genuine issue of material fact concerning the reason for appellee's recommendation to transfer Egger. Id. at 502-03. Moreover, the majority could not conclude on the record before the district court that "Egger's criticisms were so abrasive or disruptive of office routine as to be denied First Amendment protection as a matter of law," id. at 503, and the majority rejected appellee's defense of qualified immunity based on an analysis of the then controlling authority of Butz v. Economou, 438 U.S. 478, 57 L. Ed. 2d 895, 98 S. Ct. 2894 (1978), noting that under Economou, the defense of good faith immunity raised the same issues of subjective intent as appellant's First Amendment claim. 669 F.2d at 504.

Panelist Senior District Judge Dumbauld, dissenting from the majority's reversal of summary judgment on the First Amendment issue, concluded that Egger's transfer was necessary for the effective functioning of the Indianapolis Field Office and that Egger's attempt to "'clothe his peculiar behavior in the garb of the First Amendment" should be rejected. Id. at 505.

On rehearing en banc, appellee first resurrects an argument suggested below but not passed on by the district court and never presented to the panel on appeal: that the employment relationship between the FBI and its Special Agents counsels against judicial recognition of a damage remedy arising directly under the Constitution. See generally, Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, supra, 403 J.S. at 396. Appellee also argues that even if a Bivens claim is entertained, summary judgment was appropriate, contending that the undisputed facts demonstrate that his recommendation to transfer Egger was not retaliatory, and also arguing that under the recent case of Harlow v. Fitzgerald, 457 U.S. 800, 102 S. Ct. 2727, 73 L. Ed. 2d 396 (1982), decided after the panel's decision in this case, he should prevail on the ground of qualified immunity.

II

A party seeking summary judgment under Fed. R. Civ. P. 56 must demonstrate the absence of a genuine issue of material fact. E.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-61, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970). In judging whether or not the movant has met this burden, the court must view the evidence submitted by the movant in the light most favorable to the non-moving party. Id.; United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962) (per curiam). If, and only if, the movant meets his initial burden, it is incumbent upon the opposing party "to set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate [as a matter of the governing law], shall be entered against him." Fed. R. Civ. P. 56(e). See Thorton v. Evans, 692 F.2d slip op. at 20-23 & n.29 (7th Cir. Nov. 1, 1982). See generally, Markwell v. General Tire and Rubber Co., 367 F.2d 748, 750 (7th Cir. 1966); Applegate v. Top Associates, Inc., 425 F.2d 92, 96 (2d Cir. 1970). However, it is always prudent to respond to a motion for summary judgment, even if the opposing party believes that the movant has failed to sustain his initial burden.

Moreover, a factual dispute does not preclude summary judgment unless, of course, the disputed fact is outcome determinative under the governing law. It is thus axiomatic that even in the face of some factual disputes, "where the undisputed facts demonstrate that one party is entitled to judgment as a matter of law, summary judgment in favor of that party is entirely appropriate," Collins v. American Optometric Association, 693 F.2d 636, slip op. at 5 (7th Cir. 1982), just as it is plain that if genuine factual disputes are resolved in favor of the non-movant, summary judgment may be entered in favor of the movant if appropriate as a matter of law, Bishop v. Wood, 426 U.S. 341, 348, 48 L. Ed. 2d 684, 96 S. Ct. 2074 & n.11 (1976). See generally 6 (pt. 2) Moore's Federal Practice, P56.15[4] (2d ed. 1982) ("the party moving for summary judgment has the burden of clearly establishing the non-existence of a genuine issue of fact that is material to a judgment in his favor.") (footnote omitted).

III

At the outset, we reject appellee's suggestion that FBI agents should be precluded from bringing private damage actions against their superiors for alleged violation of their constitutional rights arising in the scope of their employment. Appellee points out that there may be special factors counseling hesitation in recognizing a cause of action arising directly under the Constitution, Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, supra, 403 U.S. at 396, and argues that Congress's unwillingness to provide FBI agents with civil service protections is such a factor, as is the particular employment relationship itself.

In Carlson v. Green, 446 U.S. 14, 64 L. Ed. 2d 15, 100 S. Ct. 1468 (1980), the Court stated:

Bivens established that the victims of a constitutional violation by a federal agent have a right to recover damages against the official in federal court despite the absence of any statute conferring such a right. Such a cause of action may be defeated in a particular case, however, in two situations. The first is when the defendants demonstrate "special factors counseling hesitation in the absence of affirmative action by Congress." The second is when defendants show that Congress has provided an alternative remedy which it explicitly declared to be a substitute for recovery directly under the Constitution and viewed as equally effective.

Id. at 18-19 (citations omitted).

Under the particular analysis employed by the Court in Carlson, neither situation can be said to exist in the instant case: it can hardly be maintained that FBI agents "enjoy such independent status in our constitutional scheme as to suggest that judicially created remedies against them might be inappropriate," nor is there any "explicit congressional declaration that persons injured by federal officers' violations of the [asserted constitutional provision] may not recover money damages from the agents but must be remitted to another remedy, equally effective in the view of Congress." Id. at 20.

If Carlson is viewed as a comprehensive statement of the situations in which a court should refuse to entertain a Bivens action, then our analysis would end there. Compare Sonntag v. Dooley, 650 F.2d 904 (7th Cir. 1981).However, in view of the general language of Carlson, and the fact that the Supreme Court has recently indicated that contentions similar to arguments raised by appellee here are not "'insubstantial," Harlow v. Fitzgerald, 457 U.S. 800, 820, 102 S. Ct. 2727, 2740 n.36, 73 L. Ed. 2d 396 (1982), we shall explore appellee's arguments in some depth.

Appellee first points to FBI agents' exemption from civil service protections, e.g., 28 U.S.C. ยง 536, as a special factor counseling hesitation in entertaining a Bivens action arising from employment. On the contrary, the absence of an alternative remedy is considered a factor in favor of recognizing Bivens claims. Davis v. Passman, 442 U.S. 228, 243-44, 60 L. Ed. 2d 846, 99 S. Ct. 2264 (1979). Indeed, Justices who were unwilling to embrace the sweeping language of Carlson view the narrow holding of Bivens and its progeny as being limited to situations in which a civil rights plaintiff has no other effective remedy. Carlson v. Green, 446 U.S. 14, 25, 26, 64 L. Ed. 2d 15, 100 S. Ct. 1468 (concurring opinion of Powell & Stewart, JJ.), 30, 31 (Burger, C. J., dissenting). Justice Harlan made this point as follows: "For people in Bivens' shoes, it is damages or nothing." Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, supra, 403 U.S. at 410 (Harlan, J., concurring) (quoted with approval in Butz v. Economou, supra, 438 U.S. at 504-05). The same may be said of one in Egger's position, and we reject appellees' attempt to transmute a primary factor counseling recognition of a Bivens action into a factor counseling hesitation.

Appellee's argument in this regard might also be viewed as suggesting that the exemption of FBI agents from civil service protections represents a decision by the Congress to preclude a Bivens action by such individuals. The exemption, however, is a far cry from the " explicit congressional declaration" that would be necessary to preclude a group from their only avenue for vindicating particular deprivations of their constitutional rights. Davis v. Passman, 442 U.S. 228, 246-47, 60 L. Ed. 2d 846, 99 S. Ct. 2264 (1979) (quoting Bivens, supra, 403 U.S. at 297) (emphasis in Davis).

Appellee's reliance on Bush v. Lucas, 598 F.2d 958 (5th Cir. 1979), vacated and remanded, 446 U.S. 914, 100 S. Ct. 1846, 64 L. Ed. 2d 268 (1980), on remand, 647 F.2d 573, cert. granted, 458 U.S. 1104, 102 S. Ct. 3481, 73 L. Ed. 2d 1365 (1982), demonstrates the speciousness of appellee's argument that Egger's exemption from civil service protections precludes this Bivens action. In that case, the court viewed the existence of civil service protections as a special factor precluding recognition of a Bivens action. Appellee thus argues that Bivens claims by federal employees should be disposed of on a "heads I win, tails you lose" mode of analysis: if Congress provides certain protections for federal employees, we should view them as exclusive, and if it does not provide those protections, we should infer that no protection is permitted. Suffice it to say that Catch-22 has no place in our constitutional jurisprudence.

Moreover, to the extent that Bush posits that the rights of federal employees qua employees are coterminus with the administrative protections afforded by Congress, we reject it. See Borrell v. United States International Communications Agency, 221 U.S. App. D.C. 32, 682 F.2d 981 (D.C. Cir. 1982).*fn5 While it may be that to the extent Congress has declared certain employment practices unlawful which are also unconstitutional and provide federal employees with adequate remedies for such violations, a Bivens action should not be entertained, see Gissen v. Tackman, 537 F.2d 784 (3d Cir. 1976) (per curiam) (en banc); cf. Brown v. GSA, 425 U.S. 820, 96 S. Ct. 1961, 48 L. Ed. 2d 402 (1976); see generally, Purtill v. Harris, 658 F.2d 134 (3d Cir. 1981), the constitutional rights of federal employees in the workplace which are not protected by statute properly form the basis of a Bivens action. The contrary conclusion would relegate federal civil servants to a second class status in relation to their state counterparts, and create a double standard between federal and state actors which the Supreme Court has condemned. See Butz v. Economou, supra, 438 U.S. at 500-02.

In this case, however, appellee does not contend that all federal civil servants should be precluded from bringing Bivens actions against their superiors for on-the-job violations of their civil rights. However, FBI agents, we are told, should not be permitted to bring such claims, at least with respect to inter-office transfer decisions. Pointing to Bullard v. Webster, 623 F.2d 1042 (5th Cir. 1980), which holds that a transfer of an FBI agent is not judicially reviewable for the purpose of assuring that the transfer decision was factually substantiated, appellee notes the importance of providing the Bureau with flexibility in ascertaining its own manpower needs. It is one thing to hold that the courts do not have a roving authority to second-guess the wisdom of often subjective personnel decisions; it is quite another to hold that such decisions should be free from judicial scrutiny in the face of a claim that the decisionmaker acted in retaliation for the employee's exercise of his constitutional rights. Bishop v. Wood, 426 U.S. 341, 349-50, 48 L. Ed. 2d 684, 96 S. Ct. 2074 (1976) ("The federal court is not the appropriate forum in which to review the multitude of personnel decisions that are made daily by public agencies. We must accept the harsh fact that numerous individual mistakes are inevitable in the day-to-day administration of our affairs. The United States Constitution cannot feasibly be construed to require federal judicial review for every such error. In the absence of any claim that the public employer was motivated by a desire to curtail or to penalize the exercise of an employee's constitutionally protected rights, we must presume that official action was regular and, if erroneous, can be best corrected in other ways.") (emphasis added). In personnel decisions, as in other official matters, official discretion should be limited by constitutional constraints, and such constraints cannot be considered to be an undue burden on our administrators. To the extent that defending against Bivens suits is a burden on such officials, all that can be said is that the burden can be minimized through appropriate application of the federal rules to weed out unmeritorious claims. The burden that remains is one of the prices an individual must pay when he becomes a public servant with constitutionally imposed restraints on his actions.*fn6 It is a price which Phillips now must pay.

In this context, it is paradoxical that appellee contends that FBI officials -- charged with the official responsibility of vigorously enforcing the constitutional rights of all citizens -- should themselves be free from the burden of defending such suits brought by their own subordinates because of the special nature of their responsibilities. Other supervisory employees in the federal service live with this burden, as do the state counterparts to FBI agents, state and local police -- so can FBI officials. Other federal agencies manage their personnel and carry out their mandates subject to the possibility of such suits, as do state and local police departments.*fn7

Finally, appellee argues that the particular contractual relationship between the FBI and its agents is a special factor counseling hesitation in recognizing a Bivens action. FBI agents expressly agreed to be transferred anywhere the needs of the service demand. The short answer to that argument is that the agents do not expressly agree to be transferred anywhere in violation of their constitutional rights. In any event, in essence, under the guise of an analysis of special factors counseling hesitation, appellee would have this court reach the merits of this case and hold that the FBI may condition employment upon the relinquishment of constitutional rights. We shall address that argument in our discussion of the merits of this case.

We now proceed to the facts of this case. We recite the facts of the voluminous record in great detail both because of the posture in which this case reaches us, see Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, slip op. at 3 (7th Cir. 1983); and because the nature of Egger's claim requires a particularly individualized and searching review of the record, see, e.g., Monsanto v. Quinn, 674 F.2d 990, 996 n.10 (3d Cir. 1982), Tygrett v. Barry, 201 U.S. App. D.C. 293, 627 F.2d 1279, 1282-83 (D.C. Cir. 1980); see also, Grausam v. Murphey, 448 F.2d 197, 201 (3d Cir. 1971), cert. dismissed, 405 U.S. 981, 92 S. Ct. 1207, 31 L. Ed. 2d 257 (1972).

IV

In January 1971 the FBI offered Egger a position as a Special Agent.Egger accepted the offer of employment, executing an agreement which specifically provided:

I may be sent to any part of the continental or territorial United States that the exigencies of the Bureau's work may require; that my headquarters may be fixed in some jurisdiction other than in which I have heretofore resided; that my headquarters may be changed as the work of the Bureau may require and that no transfer will be made from one station to another for personal reasons.

R. at 388.

After short stints at FBI offices in Arkansas and Wisconsin, Egger requested a hardship transfer to the Indianapolis Field Office, citing the advanced age and illness of his mother and his wife's parents all of whom lived about 55 miles from Indianapolis.The request was initially denied, only to be reconsidered and granted a week later in early 1973.*fn8 His hardship status was thereafter annually reviewed.

Egger performed his duties as a Special Agent in Indianapolis for several years without controversy. His performance ratings were routinely either satisfactory or excellent on a four-part scale which ranged from unsatisfactory to outstanding. In 1974 he was the object of an anonymous death threat, apparently in connection with one of his pending investigations. In 1976 he was reprimanded by the Director of the FBI for a delay in reporting an alleged civil rights violation, though earlier in his career he was individually commended by the Director for his work on another investigation. In short, Egger's employment history might be considered rather ordinary.

In the fall of 1977, however, the seed of the instant controversy was planted.Egger was then assigned to the organized crime squad and was investigating gambling activity in the area. Apparently as a part of this investigation Egger read a file memorandum dated January 23, 1976 written by one of his colleagues in the Indianapolis Field Office, Special Agent Naum.The memorandum was based on an interview with one of Naum's informants and contained allegations that an Indianapolis police officer, one Lt. Moistner, had accepted a bribe. Egger knew that in May 1977 Naum had been called as a character witness on behalf of Moistner's defense in a criminal trial, testifying that Moistner's reputation among FBI agents in the Indianapolis Field Office was that of an outstanding police officer. Armed with this information and the January 23, 1976 memorandum, Egger began forming the belief that Naum acted improperly in testifying on behalf of Moistner, and in November 1977 shared his suspicions with another Special Agent in the Indianapolis Field Office, Special Agent Mullen, who indicated to Egger that he would discuss the matter with Special Agent in Charge Lowie.

In mid-December, Naum confronted Egger and accused him of leaking information to the local press and local prosecutor's office. Egger denied leaking information. Naum also criticized Egger for interviewing a particular individual regarding a pending investigation, and accused Egger of interviewing that person for the sole purpose of incriminating Naum and Moistner. "[A]nyone who would do that," Egger quoted Naum as saying, "would be met in the alley with a baseball bat and hit in the kneecaps." R. at 130. Egger did not take this as a serious threat and said he ignored it, for a time that is. Also sometime in December, Egger's wife received an anonymous phone call, threatening her and her children unless Egger ceased his current investigations. Egger reported this incident to his squad supervisor, but Egger did not think it was significant enough to warrant preparing a memorandum and later specifically stated he did not want his wife interviewed concerning the incident.

Egger received a phone call from an investigator in the Marion County Indiana prosecutor's office on December 19, 1977, who expressed his office's belief that Naum had violated federal law by testifying on behalf of Moistner, and told Egger that his office intended to write the Department of Justice in Washington and request creation of a special strike force to investigate local officials, particularly police officers, for RICO violations.*fn9 The prosecutor wanted an outside investigation, according to Egger, because his office did not trust Special Agent Naum. Egger reported the foregoing conversation to Lowie, who asked Egger to tell the prosecutor that Egger would be assigned to investigate the matters and that intervention from Washington was unnecessary. When Egger relayed the message, the prosecutor agreed to withhold the letter to Washington if Lowie would personally assure him that Egger would conduct the RICO investigation. The prosecutor also advised Egger that the United States Attorney in Indianapolis wanted to speak with him. They met on December 21, 1977, and, according to Egger, the United States Attorney was favorably disposed toward conducting a RICO investigation.

The next day, Naum confronted Egger and accused him of circulating rumors about him in an attempt to get him fired, and charged Egger with disseminating copies of confidential informant files outside the FBI. Naum, whom Egger described as "very agitated," R. at 308, then told Egger that Lowie wanted to meet with him.

In the meeting with Lowie, Lowie informed Egger that he had just conferred with the United States Attorney who reportedly said that she did not want to conduct a RICO investigation at that time because she thought that the Marion County prosecutor's office was perhaps conducting a vendetta against Naum. Further, Lowie expressed his concern about "possible bad blood" between Egger and Naum, advising Egger that he "felt it would be best if he transferred [Egger] to [another] squad in order to preserve office harmony." R. at 308. Egger stated that if he was being accused of wrongdoing he would like to know the charges so that he could take a polygraph examination. Lowie responded that was unnecessary and that Egger would remain on his current squad.

During the first week of January 1978, Egger learned from the Marion County prosecutor's office that a letter had been sent to the FBI and the Department of Justice in Washington regarding the office's aforementioned concerns since Lowie had never personally contacted that office. Egger did not advise Lowie, nor any other supervisory FBI official, of this fact.

In mid-January 1978, news media accounts concerning Naum's testimony on behalf of Moistner began appearing. The stories appeared to be based on the same information which Egger had discovered in Naum's January 23, 1976 file memorandum and reported that Naum had failed to obtain FBI permission prior to testifying. Lowie asked Egger if he was leaking this information to the press, an accusation which Egger denied, again volunteering to take a polygraph examination.

In early February 1978, officials of the Department of Justice and the FBI's Office of Professional REsponsibility (OPR) visited the Indianapolis Field Office and interviewed employees there regarding the now public controversy surrounding Naum.*fn10 In addition, OPR was also making inquiries into suspected leaks of confidential FBI files, among other matters, and questioned Egger about this. Egger believed that he was the first person interviewed by OPR, and was surprised that the interview commenced with a recitation of his legal rights. Initially under the "impression" that the OPR visit was primarily intended to provide him with a forum for substantiating his charges against Naum and sharing now maturing suspicions about others in the office, Egger was taken aback to find himself in the role of the accused. R. at 170. "Intimidated" by this turn of events, R. at 104, Egger was circumspect in answering the list of prepared questions posed by the OPR investigators, but did execute a sixteen page affidavit for them concerning his suspicions about Naum and the need for a RICO investigation.

Special Agent in Charge Lowie was transferred out of the Indianapolis Field Office shortly after the OPR investigators departed and defendant-appellee Phillips was transferred to the office and assumed the post of Special Agent in Charge on February 13, 1978.

Phillips was greeted on the day of his arrival with a written complaint accusing Egger of unauthorized use of an FBI automobile the previous week and attending a basketball game while on duty. The complaint was apparently made by one of Egger's co-workers.Over the next few days, Phillips informed Egger of the accusation but would not identify the accuser. Egger orally denied the charges. After consulting an attorney, Egger declined to give a sworn statement regarding the alleged incident, but rather, discussed the matter in an unsigned statement and took this opportunity to inform Phillips that within the last week it had come to his attention that Naum had been telling fellow agents and the Indiana State Police that Egger was leaking information to the press and accepting bribes from organized crime. Egger also informed Phillips that Naum had been threatening him (apparently the previously ignored comment about being hit with a baseball bat) and that he had learned from a clerical employee in the office that Special Agent McElhaney cautioned her not to be friendly with Egger and indicated that something could happen to Egger and other agents if they remained in Indianapolis.*fn11 Egger stated that "It is common knowledge that agents have been instructed to have nothing to do with me," and concluded, "I view the whole incident as an attempt to harrass, intimidate and embarrass me." R. at 191.

Phillips apparently concluded that Egger had improperly used the FBI vehicle and attended the basketball game but this incident was not made the recommended basis of any disciplinary action by Phillips at that time. Rather, Phillips forwarded the information, including Egger's handwritten statement, to OPR.

A few days after Phillips and Egger had discussed the incident involving the car and basketball game, Egger handed Phillips a memorandum dated February 21, 1978, in which he amplified the charges about Naum and McElhaney which he had earlier made in the handwritten statement.*fn12 In it he accused Naum of spreading "outright lies" about him, and concluded by saying: "I respectfully request that this situation is of such gravity that these "rumors' should be dealt with and the employees of this office should be so informed." R. at 545 (February 21, 1978 Memorandum from Egger to Phillips contained in unpaged additional submission filed by plaintiff March 31, 1980). When Egger gave the memorandum to Phillips, Phillips commented that the Bureau took a dim view of complaints and sometimes transferred all involved.*fn13 Phillips made some inquiries regarding Egger's allegations, and several days later forwarded Egger's memorandum and the results of his investigation to FBI headquarters.

On March 1, 1978, Egger sent Phillips a memorandum suggesting that Indianapolis police officers suspected Naum of accepting bribes from local criminals involved in gambling. Phillips and Assistant Special Agent in Charge Wells investigated this latest accusation but obtained no information to verify the charge. Two days later, Phillips once again forwarded Egger's memorandum to FBI headquarters. This time, however, he attached a recommended course of action to deal with the series of charges and countercharges between Egger and Naum with which he had been confronted in the three weeks since he had assumed command of the Indianapolis Field Office. In his March 3, 1978 memorandum to FBI headquarters, Phillips stated:

[B]ased on my observations since my arrival in Indianapolis . . ., it is obvious that both SA [acronym for Special Agent] NAUM and SA EGGER have lost their effectiveness as Agents in this field division. I am personally aware that many of the Agents on EGGER's squad refuse to work with him because they feel he is untrustworthy, unpredictable and may possibly be disclosing sensitive information from our files to outside sources. . . . EGGER's credibility and reliability are seriously questioned among the personnel of this office.

There is no question in my mind that the continued presence of SAS NAUM and EGGER in this office will only serve as a catalyst, cause further dissention, bickering, allegations and general confusion.

I recommend that both SAS NAUM and EGGER be transferred from Indianapolis.I believe this action to be in the best interests of each of them as well as the Indianapolis Office and the Bureau as a whole. I recommend that this action be handled expeditiously.

R. at 596-97 (Dist. Ct. Op. at 14-15) (quoting In Camera Exh. A, Pt. I, Mar. 3, 1978 memo at 3.)

In the following days in early March 1978, Egger continued his gambling investigation and obtained additional information which he viewed as damaging to Naum. While writing a report on these latest findings at the Indianapolis office in the early evening of March 8, Egger received a phone call from his daughter at home. She was hysterical, and told Egger that a gunshot had been fired through a window of the house. Egger turned to another agent present in the office and said that someone had just shot at his home. As Naum's threatening words echoed in Egger's memory,*fn14 the other agent suggested that he inform the Special Agent in Charge of the ...


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