TRW, Inc. v. Superior Court

• Citation: 25 Cal.App.4th 1834,31 Cal.Rptr.2d 460
• Decision Date: 22 June 1994
• Docket Number: No. B072479,B072479
• Court: California Court of Appeals
• Parties: TRW, INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Jack MA, Real Party in Interest.

Page 460

31 Cal.Rptr.2d 460

25 Cal.App.4th 1834

TRW, INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent;

Jack MA, Real Party in Interest.

No. B072479.

Court of Appeal, Second District, Division 4, California.

June 22, 1994.

Rehearing Denied July 21, 1994.

Review Denied Sept. 15, 1994.

[25 Cal.App.4th 1836] Munger, Tolles & Olson, Terry E. Sanchez and Gary D. Roberts, Los Angeles, for petitioner.

[25 Cal.App.4th 1837] No appearance for respondent.

Allan F. Grossman, Horvitz & Levy, George P. Schiavelli, and Ellis J. Horvitz, Encino, for real party in interest.

CHARLES S. VOGEL, Associate Justice.

TRW, Inc., petitioned this court for a writ of mandate seeking relief from the trial court's orders that TRW was a government actor when it requested an interview of an employee regarding an alleged violation of security regulations and that an employee has a Fifth Amendment right to counsel at any such interview. The trial court's rulings were in response to motions in limine of the real party in interest, Jack Ma, who filed this action for tortious termination. The trial has been stayed by agreement of the parties and pending review of this matter.

FACTUAL BACKGROUND

TRW's Security System

TRW is a privately-owned company and a defense contractor producing goods and services for the United States Government. Some government contracts involve classified information and require TRW to sign a separate contract with the Defense Investigative Service ("DIS"), an administrative agency within the Department of Defense. The contract with DIS obligates TRW to safeguard classified information and to maintain a security system in accordance with the DIS's Industrial Security Manual ("ISM"). The ISM provides that TRW report information coming to its attention of any of its employees who have been cleared for access to classified information indicating such access may not be clearly consistent with the national interest.

To fulfill its obligations according to the ISM, TRW is required to establish procedures to allow employees to report the loss, compromise, or suspected compromise of classified information to TRW's Facility Security Officer ("FSO"). ¹ If a suspected compromise is reported, TRW is required to report it to the Defense Industrial Security Clearance Office (DISCO) and must initiate a preliminary inquiry to ascertain the circumstances surrounding the suspected compromise. If the preliminary inquiry confirms that a suspected compromise of classified information occurred, then TRW is required to make a report of the incident to the Cognizant Security Office [25 Cal.App.4th 1838] CSO) ² and the FBI and undertake a complete investigation unless directed not to do so by the CSO.

The procedures for implementing reporting preliminary inquiries and investigations for any suspected breaches of security are established by TRW, subject only to periodic audits by DIS to verify their effectiveness. ³

[25 Cal.App.4th 1839] Compliance with the established procedures is administered and executed entirely by TRW employees. Members of TRW's security department do not make arrests, carry weapons, or wear uniforms or law enforcement badges, and the ISM does not require or authorize them to do so. There is no participation by government agents in TRW's preliminary inquiries pertaining to a suspected compromise of security. Other factual references to TRW's security program will be provided in the analysis of the issues that follow.

Preliminary Inquiry About Ma

The real party in interest, Jack Ma, was hired as a physicist by TRW in January of 1985. He obtained the necessary security clearance and was assigned to the Electromagnetic Survivability and Vulnerability Department (ESV) involving the protection from nuclear attack. Ma was initially assigned to a section under the supervision of Dr. Tim Rynne. In June of 1985, over his objection, Ma was reassigned to another section supervised by Dr. Mike Schmidt.

In November 1985, the head of the ESV Department, Charles S. Wuller, was contacted by TRW employee George Hoffman who expressed concerns that Ma may have violated security regulations and exhibited bizarre behavior. The following day, Hoffman sent Wuller a followup memorandum reporting that Ma had made telephone contacts with foreign nationals and had been heard using the terms and phrases " 'warheads,' " " 'silo penetration,' " " 'space weaponry,' " and " 'TRW is working on....' " Hoffman's report also states that Ma informed another TRW employee he "is 'working on a system that would cause hostile missiles to turn around and return to the point of launch and explode,' " and that Ma is program manager of 100 to 1000 persons on a project to analyze "trajectory reversal." The memorandum attributes to Ma the claim that he traveled to Europe to meet with "non-US" nationals to discuss quantum gravity reversal and is a sales agent shipping computer hardware to Europe. Hoffman had expressed his concerns about Ma to section heads Schmidt and Rynne in mid-July, several months before contacting Wuller.

[25 Cal.App.4th 1840] Wuller regarded Hoffman's report about Ma as an indication of "[an] alleged security violation[ ] and ... bizarre behavior." He consulted with the director of personnel, Karen D. Wolff. Wuller was not satisfied that Ma had committed any violation of security since the terms and phrases attributed to him appeared in newspapers and magazines. He was more concerned about Ma's failure to report his purported contacts with foreign nationals. Although he thought the incident was "sort of a red flag," he did not believe Ma had committed any crime and did not report the incident to any law enforcement agencies. However, Wuller sent Hoffman's memorandum to TRW's security department asking for an investigation and determination if any action should be taken with regard to Ma's clearance and access to secret material.

Wuller summoned Ma to his office and met with him, Schmidt, and Wolff. Wuller inquired if Ma was ill or having any personal problems and carried on a brief conversation about quantum gravity. Wuller asked Ma to see Valerie Miller, a TRW nurse. Wuller never told Ma anything regarding his alleged violation of security regulations.

When Ma met with Miller, he thought she was an ombudsman and did not realize she was in TRW's medical department. She indicated she was aware of some controversy between Ma and Schmidt and asked for information about it. Ma told her Schmidt was stonewalling him on Ma's request for classified materials.

Miller informed Ma an appointment had been made for him to see a TRW psychiatrist, Dr. Purchard, that afternoon and to not report to work on the following Monday. Ma doubted Miller's directions and telephoned Wuller, who told Ma to see Dr. Purchard that evening and they would contact him about returning to work after they received the psychiatrist report.

Ma was disturbed about the way he was treated. He did not know Miller was a nurse when he was referred to her and was unaware that anyone scheduled an appointment for him to see a psychiatrist. He was apprehensive about the suggestion that he was mentally ill and he was concerned he might end up in a mental institution. He thought it was "probably a trump up" and cancelled his appointment with Dr. Purchard and considered hiring a lawyer.

On Monday, he went to TRW to see Dr. Plebuch, the head of the laboratory and Wuller's boss. A meeting with Plebuch took place with Wuller and Wolff in attendance. Ma informed Plebuch about his difficulties at work and the direction to see a psychiatrist before returning to work. Dr. Plebuch told Ma to not return to work until he was contacted. On Wednesday, Ma received a certified letter from TRW advising him that "management" referred him to Dr. Purchard for an evaluation and "suggest[ed]" he [25 Cal.App.4th 1841] schedule an appointment by the following Friday. The letter further advised him, until the medical report is "evaluated, you should not report for work." Instead of following TRW's suggestion, Ma engaged a lawyer, Dennis A. Devermont.

Devermont contacted TRW and arranged a meeting among Ma, Devermont, and TRW's lawyer, Inese B. Lacey. Lacey opened the meeting by mentioning that she had heard about Ma's controversy with his supervisor. Ma essentially repeated what he had told Miller about his relationship with Schmidt and the difficulty he had obtaining access to documents. She inquired if Ma had filed a complaint with the grievance committee. Ma responded "no" and that he did not even know of any such committee. The meeting lasted three hours, but, again, no mention was made of any concern about a violation of TRW's security regulations.

Following the meeting with Lacey, Ma received a telephone call from Earl Nishimura of TRW's security department asking Ma to attend an interview. Nishimura told Ma that he had "sort of an obligation to come in and speak to us regarding foreign contacts" but "this was not a criminal investigation." Ma told Nishimura he had a lawyer who was handling the matter "[and] you are not supposed to talk to me, and you should talk to my lawyer." Nishimura telephoned Devermont and told him he wanted to interview Ma regarding an "investigation into the allegation for the violation of the company rules,

regulations, and procedures and that there was no criminal investigation involved and that an attorney was not necessary." Devermont advised Nishimura Ma would attend an interview accompanied by his counsel, but not otherwise, and later confirmed Ma's position in a letter to TRW's lawyer: "Jack Ma and myself would be more than happy to attend a meeting where Mr. Ma could be questioned about security violations." TRW viewed the requested interview as an internal investigation of Ma's failure to report alleged contacts with foreign nationals and Ma's failure to attend as a lack of cooperation, contrary to a condition of his employment

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