Bosaw v. National Treasury Employees Union

• Citation: 887 F. Supp. 1199
• Decision Date: 24 May 1995
• Docket Number: No. IP 94-0726-C-M/S.,IP 94-0726-C-M/S.
• Parties: Edwin BOSAW, Plaintiff, v. NATIONAL TREASURY EMPLOYEES' UNION, Valerie C. Stewart, and Robert M. Tobias, Defendants.
• Court: U.S. District Court — Southern District of Indiana

887 F. Supp. 1199

Edwin BOSAW, Plaintiff, v. NATIONAL TREASURY EMPLOYEES' UNION, Valerie C. Stewart, and Robert M. Tobias, Defendants.

No. IP 94-0726-C-M/S.

United States District Court, S.D. Indiana, Indianapolis Division.

May 24, 1995.

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Robert C. Perry, Indianapolis, IN, for plaintiff.

Jan M. Carroll, Barnes & Thornburg, Indianapolis, IN, for Nat. Treasury Employees' Union.

Michael K. Sutherlin, Indianapolis, IN, for Valerie Stewart.

Gerald A. Coraz, Asst. U.S. Atty., Office of U.S. Atty., Indianapolis, IN, for William Jacobs and Mary Graham, Interested Parties.

ORDER

McKINNEY, District Judge.

This dispute comes before the Court in an unusual posture. In a state court action for defamation and malicious prosecution brought by Edwin Bosaw ("Bosaw"), defendant Valerie Stewart ("Stewart") sought third-party discovery from certain officers of the Internal Revenue Service (the "IRS Officers"), nonparties in that action.¹ The IRS Officers refused to produce the requested records and petitioned to remove the entire case to this Court after the state trial court issued an order compelling production of the records in the IRS's possession. They now seek an order from this Court vacating the state court's order, and denying Stewart's motion to compel discovery. The Court has been fully briefed and the issues are now ripe for resolution. As further explained below, the motion to vacate the state court's order is SUSTAINED, but the Court declines to exercise jurisdiction over the motion to compel.

I. FACTUAL & PROCEDURAL BACKGROUND

Stewart is an employee of the IRS at its regional office in Indianapolis, and the nonparties against whom she seeks discovery are the IRS's disclosure officers in possession of the records she seeks. The underlying action in the state trial court is cast as one against the National Treasury Employees' Union (NTEU), Stewart, a union steward, and Robert M. Tobias, the union's president. These three have been accused of defaming Bosaw and of falsely and maliciously prosecuting an action against him in federal district court for his alleged malicious prosecution of Stewart.

The story behind both lawsuits involves an accusation against Stewart by a coworker, Lisa Y. Gude ("Gude"). Gude accused Stewart of selling Bart Simpson dolls at work that she allegedly had stolen from her part-time employer, Burger King. The accusation triggered an investigation by Bosaw, who is an IRS inspector, which included interviews at Burger King. Once the restaurant was alerted to the possibility that one of its employees may have stolen Simpson family dolls and was selling them at the IRS, it involved the Indianapolis Police Department ("IPD") in the case. IPD conducted an investigation that culminated in the arrest of Stewart for theft. The criminal charges against her were eventually dropped, after which Stewart filed a malicious prosecution action against Bosaw and the IPD officer involved.²

The District Court in the Stewart case ruled against Stewart by granting both defendants' motions for summary judgment. Subsequently, Bosaw filed his action for defamation and malicious prosecution in the Marion Superior Court. Part of Stewart's defense to that action is that she had grounds for her malicious prosecution suit because the entire "doll" incident occurred in retaliation for the grievances she had filed as a union steward against various IRS inspectors and other employees, including Gude. Coincidentally, the inspectors involved in the investigation of Stewart were the ones against whom she had filed grievances. Stewart claims that she needs the requested personnel records to demonstrate the basis for her belief that she was maliciously prosecuted by Bosaw.

Stewart claims she is seeking records that document the grievances filed against these individuals during her tenure as union steward.³ In an effort to obtain the records, she filed a Freedom of Information Act ("FOIA") request, accompanied by a subpoena duces tecum and a request for production of documents pursuant to Indiana Rules of Civ.P. 34(C) and 45(B). The IRS Officers refused to provide the documents on the grounds that they contained information, the disclosure of which would constitute an unwarranted invasion of the personal privacy of the IRS employees, some of whom were not even parties to the action.⁴ That refusal led Stewart to file a motion to compel discovery against the IRS Officers. The day after that filing, the Marion Superior Court issued its order compelling production of the records. Rather than move to quash the subpoena, or seek a protective order or reconsideration of the state court's order, the IRS Officers removed the action to this Court for resolution of the discovery dispute.

The resolution they seek is for this Court to vacate the state court's order compelling them to produce the records, as evidenced by the Officers' motion to vacate. The grounds asserted include their claim that the state court lacks jurisdiction to compel subordinate officers of the United States to produce records, in an action in which the United States is not a party, when such production violates regulations promulgated by the agency. In addition, although the state court ordered the individual officers to produce the records, the IRS Officers claim that the order is really directed at the United States, which enjoys sovereign immunity from such actions unless it is a party to the suit. Finally, the IRS Officers ask this Court to overrule Stewart's motion to compel on the grounds that the information she seeks is irrelevant and its disclosure would constitute an unwarranted invasion of privacy of the persons whose records are sought. For these reasons, according to the IRS Officers, the state court's order should be vacated and the motion to compel denied.

Stewart, on the other hand, argues that the plain language of 5 U.S.C. § 301,⁵ the Federal "housekeeping statute" under which the IRS claims its authority to control the information its officers may release, specifically prohibits the withholding of information from the public. In addition, the regulations promulgated by the Secretary of the Treasury, Stewart notes, allude to the possibility that a court may request or demand that such information be released. She also argues that unless she has access to this information she will be prevented from preparing an adequate defense, and she suggests the means by which such disclosure could be accomplished while protecting the privacy interests involved. Finally, she argues that because the United States is not a party to the action, and thus not subject to the imposition of liability, the doctrine of sovereign immunity is not implicated.

II. DISCUSSION

Before deciding the motion to vacate the state court's order this Court must address some preliminary issues. First among them is the question of the basis for the Court's jurisdiction when the dispute is between a state court defendant and two nonparty federal officers who are in possession of or have control over certain records belonging to the IRS. Next, if jurisdiction is established, the Court must determine what relief can be given within the scope of that jurisdiction. This inquiry requires an investigation of whether a federal district court may, and whether it should, vacate an order of a state trial court. A corollary to that inquiry is whether, if the state court order is vacated, this Court can issue a discovery order of its own. Only after these preliminary matters are resolved may this Court consider the merits of the pending motion and whether to decide Stewart's motion to compel as the IRS Officers have requested.

A. Jurisdiction

The IRS Officers invoke federal jurisdiction based on the right of federal officers to remove any civil or criminal action against them in a state court to a federal forum.⁶ 28 U.S.C. § 1442. That right is "absolute for conduct performed under color of federal office." Arizona v. Manypenny, 451 U.S. 232, 242, 101 S.Ct. 1657, 1664-65, 68 L.Ed.2d 58 (1981). Consequently, the Supreme Court has "insisted that the policy favoring removal `should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1).'" Id. (quoting Willingham v. Morgan, 395 U.S. 402, 407, 89 S.Ct. 1813, 1816, 23 L.Ed.2d 396 (1969)).

The purpose served by § 1442 is to provide a federal forum for the litigation of claims against federal officials in which they must raise defenses arising from their official duties. Willingham, 395 U.S. at 405, 89 S.Ct. at 1815. Because the Federal government

can act only through its officers and agents, and they must act within the States ... if ... those officers can be arrested and brought to trial in a State court ... and if the general government is powerless to interfere at once for their protection ... the operations of the general government may at any time be arrested at the will of one of its members.

Id. at 406, 89 S.Ct. at 1815-16; see also Manypenny, 451 U.S. at 242, n. 16, 101 S.Ct. at 1664, n. 16.

After providing this rationale for the absolute right of removal, the Supreme Court explained the meaning of acting "under color" of federal office. Choosing a broad interpretation of that requirement, the Court said it would be sufficient if the federal officers demonstrate that their relationship with the plaintiff "derived solely from their official duties" and that they were on duty, at their place of federal employment, at all relevant times. Id. at 409, 89 S.Ct. at 1817. Therefore, for federal officers to invoke removal jurisdiction under § 1442 they must show that an action has been commenced against them in a state court, which is based on an act the federal officer performed while on duty at the officer's place of federal employment. They must also show that they have a bona fide federal defense to the state law claim. See Venezia v....