Greene v. McElroy, 13978.

• Citation: 254 F.2d 944
• Decision Date: 17 April 1958
• Docket Number: No. 13978.,13978.
• Parties: William L. GREENE, Appellant, v. Neil H. McELROY, Secretary of Defense, et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

254 F.2d 944 (1958)

William L. GREENE, Appellant, v. Neil H. McELROY, Secretary of Defense, et al., Appellees.

No. 13978.

United States Court of Appeals District of Columbia Circuit.

Argued November 22, 1957.

Decided April 17, 1958.

Mr. Carl W. Berueffy, Washington, D. C., for appellant.

Mr. Donald B. MacGuineas, Attorney, Department of Justice, with whom Asst. Atty. Gen. George C. Doub and Messrs. Oliver Gasch, U. S. Atty., Paul A. Sweeney and Miss Beatrice M. Rosenhain, Attorneys, Department of Justice, were on the brief, for appellees.

Before WILBUR K. MILLER, WASHINGTON and DANAHER, Circuit Judges.

WASHINGTON, Circuit Judge.

This case challenges the revocation of a "security clearance" by the Secretary of the Navy. The Secretary's act withdrew from appellant Greene, an employee of a private corporation holding Defense Department contracts, access to classified defense information. The instant appeal seeks reversal of an order of the District Court, 150 F.Supp. 958 (D.C.D.C.1957), dismissing appellant's complaint for lack of a justiciable controversy between appellant Greene on the one hand, and the Secretary of Defense and his subordinate the Secretary of the Navy on the other.

I.

The facts of the case are these: Upon graduation from the Guggenheim School of Aeronautics at New York University in 1937, appellant Greene was hired as a junior engineer by Engineering & Research Corporation (ERCO), a manufacturing company. From that time until he was dismissed by the corporation in April 1953, he worked for ERCO continuously (save for a short period in 1940 not here relevant). At the time of his dismissal he was ERCO's Vice President in charge of Engineering and General Manager at an annual salary of $18,000 plus bonuses. He then possessed Government clearance for access to "secret" information.¹ His dismissal followed receipt by ERCO's President of the following letter dated April 17, 1953, from appellee Secretary of the Navy:

"I have reviewed the case history file on William Lewis Greene and have concluded that his continued access to Navy classified security information is inconsistent with the best interests of National security.

"In accordance with paragraph 4.e. of the Industrial Security Manual for Safeguarding Classified Security Information,² therefore, you are requested to exclude William Lewis Greene from any part of your plants, factories or sites at which classified Navy projects are being carried out and to bar him access to all Navy classified security information.

"In addition, I am referring this case to the Secretary of Defense recommending that the Industrial Employment Review Board\'s decision of 29 January 1952 be overruled."

One week later the President of ERCO, acting pursuant to the security agreement which ERCO had executed,³ replied to the Secretary, in part:

"In accordance with your request, please be advised that since receipt of your letter this company has excluded Mr. Greene from any part of our plants, factories or sites and barred him access to all classified security information."

Appellant subsequently requested, and was accorded, extensive administrative hearings, the details of which need not be recounted here. At these hearings appellant was given a thirteen count specification of the reasons for the revocation of his clearance. The Government put on no witnesses, nor did it disclose the investigative reports on which the specifications were based. Appellant took the stand, and presented a number of witnesses. He was finally advised, as of May 28, 1954, that "the granting of clearance to you for access to classified information is not clearly consistent with the interests of national security."

In August 1954 appellant filed this action in the District Court seeking a judgment (1) declaring "illegal, null, void and of no effect * * * the acts of the defendant Secretary of the Navy Anderson and all acts of the defendants in pursuance thereof, in advising plaintiff's employer that plaintiff could not be employed," and (2) ordering the appellees "to advise the plaintiff's employer, Engineering and Research Corporation, that the letter of April 25 17? signed by * * * Anderson * * * is illegal, null, void, and of no effect."

In February 1955 — before Greene's lawsuit had come to issue — the Department of Defense issued its Industrial Personnel Security Review Regulation, Department of Defense Directive 5220.6, 20 Fed.Reg. 1553 (1955), superseding the joint directive under which Greene's clearance had been revoked. The new directive, inter alia, established revised procedures for screening industrial personnel, and the Board set up thereunder was given authority to review prior decisions of regional boards "on the grounds of newly discovered evidence or for other good cause shown."⁴ The standard under the new regulation remained that "clearance shall be denied or revoked if it is determined, on the basis of all the available information, that access to classified information by the person concerned is not clearly consistent with the interests of the national security."⁵ At Greene's request the new Board undertook to reexamine his case. After submission of further briefs, the Director, Office of Industrial Personnel Security Review, notified appellant's attorney on March 12, 1956, that the Review Board had affirmed the May 1954 decision.

After this adverse decision the case in the District Court proceeded to trial. A stipulation of facts was entered. Both parties moved for summary judgment; the Government also moved to dismiss. It was admitted that appellant had exhausted his administrative remedies. The District Court denied appellant's motion and granted appellees' motions in a memorandum opinion. The court held, relying on paragraph 4.e. of the Industrial Security Manual, see note 2, supra, that there was no justiciable controversy:

"It is fundamental when one presumes to accept a contractual offer then that offer must be accepted in terms, and one of the terms here, as has been said, related to security controls. The necessity for such is obvious. If the plaintiff\'s employer did not see fit to accept and conform it had perfect freedom not to enter into the contract. On acceptance of the offer in terms, it was obliged in the circumstances to carry out its essentials, the presumed result of which was the loss by the plaintiff of his position. But this cannot be said in any degree to be the fault of the Government, for here, through properly constituted authority, it was exercising its right to protect itself against threats to its survival, and as far as the action of an individual was concerned, this action taken, even envisioning the result to the plaintiff, fails to set forth any invasion of his legal rights and, therefore, as has been said, there is no justiciable controversy and the Government\'s motion for summary judgment is granted.

"Assuming arguendo he was entitled to hearing and review, he was accorded such and an examination of the extensive and repetitive record fails to show any violation of procedural due process. It should be noted also that the hearings held in the instant case apparently are exempted from the requirements of the Administrative Procedure Act, 5 U. S.C.A. § 1001 et seq., as hearings held `by regulation, rule, custom, or special dispensation; not * * * held by compulsion.\' Wong Yang Sung v. McGrath, 1950, 339 U.S. 33, 50, 70 S.Ct. 445, 454, 94 L.Ed. 616." D.C.D.C.1957, 150 F.Supp. 958, 959-60.

This appeal followed.

It should be noted at the outset that Greene does not here contend that the officials of the Department of Defense have failed to comply with the relevant provisions of the various industrial security regulations under which they proceeded against him. To that significant extent at least, this case differs from Peters v. Hobby, 1950, 349 U.S. 331, 75 S.Ct. 790, 99 L.Ed. 1129; Service v. Dulles, 1957, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed. 2d 1403; and Cole v. Young, 1956, 351 U.S. 536, 76 S.Ct. 861, 100 L.Ed. 1396. In each of those cases the issue treated by the Court was the compliance vel non by executive officers with applicable statutes or regulations. And in each of those cases the Supreme Court found lack of compliance. See also Stewart v. Dulles, 1957, 101 U.S.App.D.C. 280, 248 F.2d 602; cf. Vitarelli v. Seaton, 1958, 102 U.S.App.D.C. 316, 253 F.2d 338. It should further be noted that appellant does not claim that the contracts on which he seeks to work are not validly labelled "classified."

The relief Greene seeks is a declaration that he was barred from access to classified material in a manner which violates the Constitution. He seeks further a court order restoring him to status quo ante: i.e., an order which will make it possible for ERCO to rehire him. Thus, in essence, he seeks to compel the Government to disclose its classified defense information to a person — himself — whom the Secretary of Defense considers unworthy of such access.

II.

We consider first Greene's contention that the Secretary lacked power to take the action here challenged. He does not argue that the executive lacks all power — inherent or statutory — to classify certain defense information. Nor does he suggest that the subject matter of the ERCO contracts was not properly labelled "secret." Rather he argues that the Secretary possesses only limited powers — powers circumscribed by the Fifth Amendment — to decide who shall have access to that classified material.

The Government contends that it possesses statutory authority to restrict access to classified defense information,⁶ stemming from Rev.Stat. § 161 (1875), 5 U.S.C.A. § 22, which provides:

"The head of each department is authorized to prescribe regulations, not inconsistent with law, for the government of his department, the conduct of its officers and clerks, the distribution and performance of its business, and the custody, use, and preservation of the records,

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