United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 30, 1997 Decided November 28, 1997
No. 95-7293
Richard W. Beebe,
Appellant
v.
Washington Metropolitan Area Transit Authority, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 94cv01567)
Richard W. Beebe, appearing pro se, argued the cause and
filed the briefs.
Bruce P. Heppen argued the cause for appellees. With
him on the briefs were Carol B. O'Keeffe and Robert J. Kniaz.
David R. Keyser, Gerard J. Stief and Robert L. Polk entered
appearances for appellees.
Before: Edwards, Chief Judge, Ginsburg and Tatel,
Circuit Judges.
Opinion for the court filed by Circuit Judge Tatel.
Tatel, Circuit Judge: In this tort and contract action, we
again examine the scope of WMATA's sovereign immunity, as
well as the immunity of its employees. Because the torts
alleged here arose from policy decisions made during the
reorganization of a WMATA department, we agree with the
district court that WMATA is protected by sovereign immuni-
ty. Applying federal common law, we also hold that WMATA
officials, when exercising discretionary functions and acting
within the scope of their official duties, enjoy immunity from
tort liability. We agree with the district court that the
contract claims lack merit.
I
In 1966, acting pursuant to the Compact Clause of the
Constitution, U.S. Const. art. I, s 10, cl. 3, Congress ap-
proved the Washington Metropolitan Area Transit Authority
Compact between Maryland, Virginia, and the District of
Columbia to deal with growing traffic problems in the Wash-
ington area. See Pub. L. No. 89-774, 80 Stat. 1324 (1966)
(codified as amended at D.C. Code Ann. s 1-2431 (1992));
H. Rep. No. 89-1914, at 5-6 (1966). Responsible for creating
a coordinated public transportation system for the region,
WMATA now operates an extensive Metrobus and Metrorail
system running throughout Northern Virginia, the District,
and two Maryland counties. We have summarized WMATA's
history and its relationship to Congress in earlier decisions.
See, e.g., Dant v. District of Columbia, 829 F.2d 69, 71, 74
(D.C. Cir. 1987); Morris v. WMATA, 781 F.2d 218, 219, 222
(D.C. Cir. 1986).
Appellant Richard W. Beebe works for WMATA as an
attorney, having served in both the Office of General Counsel
and the Office of Procurement. In 1989, he became a Con-
struction Engineer Negotiator in what was then the Office of
Procurement's Final Decisions and Disputes Section, headed
by appellee Narinder Kumar. In that job, Beebe investigated
and analyzed contract claims and drafted final contracting
decisions.
In 1992, by which time Beebe had reached a rank of TA-24,
WMATA's Board of Directors approved a reorganization of
the Office of Procurement, appointing appellee Robert Bear-
inger to oversee its implementation. The reorganization
shrank the Final Decisions and Disputes Section from thir-
teen to six positions and transferred it to a new Construction
Contract Management division. In this new office, Beebe's
duties expanded from managing a single stage of the con-
tracting process to "cradle-to-grave" contract administration.
During several personnel policy meetings with Bearinger
and others and in a separate memorandum to Bearinger,
Kumar criticized Beebe's performance, suggesting that he
was unqualified for his broader responsibilities and that
Beebe should return to the Office of General Counsel. Bear-
inger then abolished Beebe's job, replaced it with a new
TA-24 Contract Administrator position, and appointed Kumar
to head a selection committee to fill the new position. Beebe
applied, but the committee selected him instead for a TA-22
Contract Administrator position.
In July, 1994, Beebe filed a ten-count complaint in the U.S.
District Court for the District of Columbia, asserting claims
for breach of contract/promissory estoppel (count 1); con-
structive discharge (count 2); misrepresentation (count 3);
fraud (count 4); gross negligence in the formulation and
implementation of the selection process for the TA-24 Con-
tract Administrator position (count 5); negligent entrustment
(count 6); defamation of character (count 7); wrongful inter-
ference with employment relationship (count 8); breach of the
covenant of good faith and fair dealing (count 9); and inten-
tional infliction of emotional harm (count 10). Beebe named
WMATA and Bearinger in counts one, two, three, four, five,
nine, and ten; he named Kumar in counts two, seven, eight,
nine, and ten; and he named only WMATA in count six.
Relying on a magistrate judge's recommendations, the dis-
trict court dismissed the tort claims against WMATA and the
individual defendants on sovereign immunity grounds. The
district court also granted summary judgment for defendants
on the breach of contract/promissory estoppel claim, and
dismissed the remaining contract claims. In this appeal by
Beebe, we review the dismissal of counts two through ten, as
well as the summary judgment on count one de novo, apply-
ing the same standards used by the district court. Wilson v.
Pea, 79 F.3d 154, 160 n.1 (D.C. Cir. 1996). Claims are not
to be dismissed " 'unless it appears beyond a reasonable
doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief.' " Alicke v. MCI
Communications Corp., 111 F.3d 909, 912 (D.C. Cir. 1997)
(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Sum-
mary judgment is appropriate only "if the pleadings, deposi-
tions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law." Fed. R.
Civ. P. 56(c).
II
Before considering the merits of Beebe's appeal, we must
deal with WMATA's assertion that Beebe failed to exhaust
his administrative remedies. The Compact requires employ-
ees to submit all unresolved "labor disputes" to arbitration.
D.C. Code Ann. s 1-2431(66)(c). Employees must exhaust
these procedures before filing suit. Sanders v. WMATA, 819
F.2d 1151, 1158 (D.C. Cir. 1987). Employees like Beebe who
are members of the Office and Professional Employees Inter-
national Union, Local No. 2, can satisfy this requirement by
exhausting the grievance procedures contained in the union's
collective bargaining agreement with WMATA.
Before filing his complaint in this case, Beebe initiated the
collective bargaining agreement's grievance procedures, pro-
gressing through the first two of its four steps. Not until
four days after filing suit, however, did he initiate a "step
three" grievance. While this would ordinarily bar Beebe
from pursuing this litigation, WMATA does not contest
Beebe's assertion that notwithstanding the collective bargain-
ing agreement's requirement that it respond to a step three
grievance within ten days, Article XX, Agreement Between
WMATA and the Office and Professional Employees Interna-
tional Union, Local No. 2, it has never answered his step
three filing. Under these circumstances, WMATA has
waived its exhaustion defense. Cf. Vaca v. Sipes, 386 U.S.
171, 185 (1967) ("[W]hen the conduct of the employer amounts
to a repudiation ... the employer is estopped by his own
conduct to rely on the unexhausted grievance and arbitration
procedures as a defense to the employee's cause of action.")
(citations omitted). We thus turn to Beebe's tort claims.
III
In signing the WMATA Compact, Maryland, Virginia, and
the District of Columbia conferred upon WMATA their re-
spective sovereign immunities. Morris, 781 F.2d at 219; see
also Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30,
49-50 (1994). Section 80 of the Compact waives this immuni-
ty for torts "committed in the conduct of any proprietary
function," while retaining immunity for torts committed by its
agents "in the performance of a governmental function."
D.C. Code Ann. s 1-2431(80).
To distinguish governmental from proprietary functions, we
ask whether the activity amounts to a "quintessential" gov-
ernmental function, like law enforcement. Burkhart v.
WMATA, 112 F.3d 1207, 1216 (D.C. Cir. 1997). If so, the
activity falls within the scope of WMATA's sovereign immuni-
ty. Id. (citing Dant, 829 F.2d at 74). Because it is difficult to
distinguish between public and private sector functions with
any precision beyond obviously public activities like law en-
forcement, Dant, 829 F.2d at 74, the immunity question often
turns on whether the activity is "discretionary" or "ministeri-
al," a dichotomy employed by the Federal Tort Claims Act.
Burkhart, 112 F.3d at 1216. To determine whether a func-
tion is discretionary, and thus shielded by sovereign immuni-
ty, we ask whether any " 'statute, regulation, or policy specifi-
cally prescribes a course of action for an employee to follow.' "
Cope v. Scott, 45 F.3d 445, 448 (D.C. Cir. 1995) (quoting
United States v. Gaubert, 499 U.S. 315, 322 (1991)). If no
course of action is prescribed, we then determine whether the
exercise of discretion is "grounded in 'social, economic, or
political goals.' " Id. (quoting Gaubert, 499 U.S. at 323). If
so grounded, the activity is "governmental," thus falling with-
in section 80's retention of sovereign immunity.
Although employment decisions are not quintessential gov-
ernmental functions--after all, private entities also hire and
fire employees--we held in Burkhart that "decisions concern-
ing the hiring, training, and supervising of WMATA employ-
ees are discretionary in nature, and thus immune from judi-
cial review." Burkhart, 112 F.3d at 1217. The Compact
confers broad powers on WMATA to "[c]reate and abolish
offices, employments and positions ... provide for the qualifi-
cation, appointment, [and] removal ... of its ... employees,
[and][e]stablish, in its discretion, a personnel system based on
merit and fitness." D.C. Code Ann. ss 1-2431(12)(g) and (h);
see Burkhart, 112 F.3d at 1217. Employment decisions re-
quire "consideration of numerous factors, including budgetary
constraints, public perception, economic conditions, 'individual
backgrounds, office diversity, experience and employer intu-
ition.' " Id. (quoting Tonelli v. United States, 60 F.3d 492,
496 (8th Cir. 1995)).
Applying these standards, we think WMATA's appointment
of Bearinger to oversee the reorganization of the Office of
Procurement as well as later actions by Bearinger and Kumar
in the course of the reorganization were discretionary activi-
ties. Beebe does not allege that Bearinger or Kumar were
told precisely how to structure the new department, which
positions to create or abolish, or whom to hire or retain. Of
course, not every action connected in some way to an employ-
ment decision amounts to a discretionary function. But all
actions challenged by Beebe involved a large measure of
choice, and we perceive no distinction between the discretion
here and the hiring, training, and supervision of bus opera-
tors at issue in Burkhart. If anything, the activity in this
case--reorganizing an entire office--involved even greater
degrees of political, social and economic considerations.
Agreeing with the district court that WMATA is therefore
immune from Beebe's tort claims, including the alleged inten-
tional torts, cf. Gray v. Bell, 712 F.2d 490, 508 (D.C. Cir. 1983)
(barring intentional tort claim because conduct fell within
discretionary function exception), we affirm the dismissal of
counts three through six, and ten against WMATA.
IV
Because Beebe also asserts tort claims against Bearinger
and Kumar in their individual capacities (counts 3-5, 7, 8, and
10), we must determine whether, as the district court held,
they too have immunity from suit. The scope of immunity of
WMATA employees for torts committed in the course of
governmental or discretionary functions is a road not well
traveled.
Section 80 of the Compact provides that the "exclusive
remedy" for any action for which WMATA is liable "shall
be by suit against the Authority." D.C. Code Ann.
s 1-2431(80). In other words, for torts committed in the
course of proprietary or ministerial functions, WMATA is
liable and its employees immune. The Compact is silent on
the question this case presents: whether WMATA employees
have immunity from suit where WMATA itself has immunity
because the alleged torts occurred in the exercise of govern-
mental or discretionary functions.
To resolve this issue, we must first determine which law to
rely on--those of the three signatories or federal common
law? Where Congress wanted state law to govern a question
under the WMATA Compact, such as in proprietary
tort actions, it said so explicitly. See D.C. Code Ann.
s 1-2431(80) ("The Authority shall be liable for ... torts ...
committed in the conduct of any proprietary function, in
accordance with the law of the applicable signatory....").
Where Congress has not so provided, federal law governs the
interpretation of Compact terms. Culyer v. Adams, 449 U.S.
433, 440 (1981) ("[W]here Congress has authorized the States
to enter into a cooperative agreement, and where the subject
matter of that agreement is an appropriate subject for con-
gressional legislation, the consent of Congress transforms the
States' agreement into federal law under the Compact Clause
[of the Constitution]."). We thus regularly look to federal law
when distinguishing between governmental and proprietary
functions. See, e.g., Burkhart, 112 F.3d at 1216; Sanders,
819 F.2d at 1154. Although the issue in this case requires us
to interpret no specific Compact terms, but rather to fill in a
gap left by those terms, we think the issue remains essential-
ly federal, resolvable pursuant to federal common law. Cf.
Old Town Trolley Tours v. WMATC, No. 96-1069, slip op. at
6 (D.C. Cir. Nov. 14, 1997).
While perhaps not the proper standard for interpreting
every interstate compact, federal common law is particularly
appropriate in WMATA's case. Not only does the Compact
have its roots in congressionally authorized studies, see H.
Rep. No. 89-1914, at 3-4 (1966), but "Congress played a
particularly active role" in WMATA's creation, Morris, 781
F.2d at 222. From the very outset, the federal government
has contributed significantly to the construction and operation
of WMATA's transportation system. Id. at 225. Moreover,
although WMATA operates in three jurisdictions, it runs its
core policy-making functions in one central District of Colum-
bia headquarters. Resorting to the laws of the individual
signatories could expose WMATA policymakers to different,
possibly inconsistent immunity rules, a result that would run
counter to the uniform interpretation of WMATA's govern-
mental immunity, a uniformity which results from our reli-
ance on federal law. Although Dant's discussion of official
immunity refers by analogy to District of Columbia cases,
nothing in that decision conflicts with the proposition that
federal common law determines whether WMATA officials
have immunity when exercising governmental functions.
For the appropriate federal common law standard, we look
to Westfall v. Erwin, 484 U.S. 292 (1988). There, the Su-
preme Court held that federal officials enjoy absolute immu-
nity from state-law tort actions when the conduct at issue
falls "within the scope of their official duties and the conduct
is discretionary in nature." Id. at 297-98. Congress has
since overturned Westfall as it applies to federal employees,
see Federal Employees Liability Reform and Tort Compensa-
tion Act, Pub. L. No. 100-694, 102 Stat. 4563 (1988) (codified
at 28 U.S.C. ss 2671-80 (1994)), but Westfall remains the
common law rule, see Mangold v. Analytic Servs., Inc., 77
F.3d 1442, 1447 n.4 (4th Cir. 1996) ("[a]t federal common law,
absolute official immunity" still governed by Westfall).
Although Westfall places the burden of establishing immu-
nity on the official, Westfall, 484 U.S. at 299, Beebe has failed
even to allege that Bearinger and Kumar acted outside the
scope of their official duties, Westfall's first prong. By
Beebe's own account, all actions he challenges related directly
to the office reorganization, thus lying at the core of Bearing-
er and Kumar's official responsibilities. Even the alleged
intentional torts (fraud and intentional infliction of emotional
harm) as well as those Beebe alleges were motivated by
personal animus (defamation and interference with his em-
ployment relationship) occurred in the course of the reorgani-
zation. Cf. Barr v. Matteo, 360 U.S. 564, 575 (1959) (plurality
opinion) ("The fact that the action here taken was within the
outer perimeter of petitioner's line of duty is enough to
render the privilege applicable, despite the allegations of
malice in the complaint."); Spalding v. Vilas, 161 U.S. 483,
498 (1896) (Harlan, J.). To be sure, not all intentional or
malicious torts committed in the normal course of employ-
ment necessarily fall within the scope of official duties. Offi-
cials "exceed the outer perimeters of their responsibilities,
and act manifestly beyond their line of duty," for example,
"when they resort to physical force to compel the obedience
of their managerial subordinates," McKinney v. Whitfield,
736 F.2d 766, 771-72 (D.C. Cir. 1984), or when they use false
threats of criminal charges to coerce an employee into resign-
ing, Bishop v. Tice, 622 F.2d 349, 359 (8th Cir. 1980). None
of Beebe's allegations come even close to these extremes. He
alleges nothing more than that Bearinger implemented the
reorganization improperly. His allegations about Kumar's
personal animus are conclusory.
Because we have already determined that Bearinger and
Kumar were engaged in discretionary functions--Westfall's
second prong--they enjoy immunity from Beebe's tort allega-
tions. We thus affirm the district court's dismissal of counts
three through five, seven, eight, and ten against Bearinger
and Kumar.
V
This brings us finally to Beebe's claims for breach of
contract/promissory estoppel (count 1), constructive discharge
(count 2), and breach of the covenant of good faith and fair
dealing (count 9), asserted against WMATA, Bearinger, and
Kumar. Section 80 of the Compact waives WMATA's sover-
eign immunity for contractual disputes. D.C. Code Ann.
s 1-2431(80). Because the Compact makes WMATA the
exclusive defendant where WMATA is liable, id., Bearinger
and Kumar cannot be sued for any contractual claims. As for
WMATA, we find no basis for questioning the district court's
grant of summary judgment on the breach of contract/
promissory estoppel count or its dismissal of the remaining
counts.
Beebe claims that WMATA is contractually bound by state-
ments in its personnel manual. Although like any District of
Columbia employer WMATA can bind itself contractually in a
personnel manual, see Sisco v. GSA Nat'l Capital Fed. Credit
Union, 689 A.2d 52, 55 (D.C. 1997) (holding that "assurances
by an employer in a personnel or policy manual distributed to
all employees that are clear enough in limiting the right to
terminate to specific causes or events will overcome the
presumption of at-will employment"), Beebe points to no
statement of policy in WMATA's manual that could possibly
create such a contract. He cites policies 1.2 and 2.1, which
encourage internal promotion and responsible supervision,
but neither is "clear enough" to overcome the presumption
that he was employed at-will, Sisco, 689 A.2d at 55.
Beebe's remaining contract claims also fail: his covenant of
good faith and fair dealing claim, because it depends upon the
existence of an enforceable contract; and his construc-
tive discharge claim, because he makes no allegation that
WMATA made working conditions so onerous that he had to
quit, Atlantic Richfield Co. v. District of Columbia Comm'n
on Human Rights, 515 A.2d 1095, 1101 (D.C. 1986) (construc-
tive discharge occurs "when the employer deliberately makes
working conditions intolerable and drives the employee into
an involuntary quit"). Indeed, Beebe told us at oral argu-
ment that he remains employed by WMATA. Failing to
pursue his claim of promissory estoppel in this court, Beebe
has waived it. Terry v. Reno, 101 F.3d 1412, 1415 (D.C. Cir.
1996), cert. denied, 117 S. Ct. 2431 (1997).
VI
We affirm the district court's grant of appellees' motion for
summary judgment on the breach of contract/promissory
estoppel count and of their motion to dismiss the remainder
of Beebe's complaint.
So ordered.