Labor Dept., Federal HR Office Defeat Contractor Lawsuit

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By Jon Steingart

The Labor Department and the Office of Personnel Management won dismissal of a lawsuit filed by a former contractor who said the agencies smeared his reputation and effectively barred him from working as a federal contractor.

The ruling by the U.S. Court of Appeals for the District of Columbia Circuit reverses a lower court, which said it was premature to determine whether dismissal was appropriate. The appeals court sided with the agencies’ argument that the former contractor’s lawsuit should be dismissed because he had other ways to pursue his claim.

In a July 2011 DOL report, the acting inspector general found that senior Veterans’ Employment and Training Service officials violated ethics rules when they engaged Stewart Liff to provide human resources management consulting services that could have been procured at a lower cost if they had been competitively sourced. An assistant secretary resigned less than a week after the acting inspector general’s conclusion that he abused his authority by steering contracts toward Liff.

An OPM inspector general report reached similar findings in April 2013. It found that taxpayer dollars “were spent wastefully” in obtaining Liff’s services by circumventing a competitive bid process.

Liff said the reports and publicity surrounding the agencies’ decisions to no longer hire him deprived him of his constitutional right to pursue his profession. He styled the case as a Bivens lawsuit, named for the Bivens v. Six Unknown Named Agentscase in which the U.S. Supreme Court laid the foundation for a type of claim alleging deprivation of a constitutional right.

Liff couldn’t pursue a Bivens claim because there were adequate remedies under federal contracting laws, Judge Robert L. Wilkins wrote for the D.C. Circuit. If Liff thinks the government wrongly denied him a contract, he should pursue relief under those laws, Wilkins said. Judges Merrick B. Garland and Cornelia T.L. Pillard joined the opinion.

Paul Kiyonaga with Kiyonaga & Soltis PC in Washington represented Liff.

Michael Raab and Benjamin Shultz with the Department of Justice’s Civil Division in Washington represented the agencies.

The case is Liff v. DOL , D.C. Cir., No. 16-5045, order denying motion to dismiss reversed 2/6/18 .

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

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