In that case, the three Housing and Urban Development Department officials—Bruce Lee, Paul Smith and Robert Zurowski—suffered through a complicated legal row that lasted almost a decade and required multiple court decisions over two administrations to resolve. In investigating a housing-discrimination claim, the HUD officials were simply carrying out their duties, upholding existing fair housing regulations; the plaintiffs in the case felt that their free speech rights were being violated. And, ultimately, a federal appeals court sided with the plaintiffs.

The risk of litigation for federal employees is increasing. Over the past two decades, tort suits across the country have increased by 13 percent each year, to cite one statistic. And that rising tide of litigation includes lawsuits against federal officials.

New policies and legislation are m

Many still feel, ‘I work for the federal government and they will take care of me.’ —Wright & Co.’s Dave Cavanaugh

aking federal managers even more vulnerable to the slings and arrows of the legal system, sources say.

For example, legal experts worry that the federal government’s shift to merit-based pay systems will make supervisors easy marks for disgruntled workers.

Legislation such as the Notification and Federal Employee Anti-discrimination and Retaliation (No FEAR) Act of 2002 will afford protection from recrimination to whistleblowers (see related story, Page 20), but the ease of making a complaint could increase the number of court cases against federal managers.

By the very nature of the work, federal employees can become targets of the public’s wrath.

“They are the ones who directly interface with the public,” said John Euler, who retired as deputy director of the Justice Department’s Civil Division Torts Branch last year. “When someone doesn’t get a benefit that they think they should get, the natural reaction is to strike at the public servant that’s involved.”

It’s clear from available court records and knowledgeable sources that the HUD officials, who had done their jobs in good faith, had to endure the toxic effects of a long-running lawsuit with no assurance of immunity as the case proceeded.

At any given time, there are about 5,000 active suits against federal employees, Euler said. The Justice Department accepts about 98 percent of the requests to represent individual federal employees each year, said Charles Miller, a Justice Department spokesman.

But that leaves 2 percent without Justice Department representation, a potentially costly prospect.

Federal officials get sued for a variety of reasons by a variety of plaintiffs, including fellow employees and citizens.

For example, federal employees at all levels can be—and have been—sued by citizens alleging violations of their constitutional rights.

Law enforcement officials are especially vulnerable in this area. In 1971, in the case of Bivens vs. Six Unknown Federal Narcotics Agents, the U.S. Supreme Court established the right of citizens to sue federal officials for unconstitutional actions.

In the Bivens case, federal agents entered and searched an apartment without a warrant, thus violating the plaintiff’s Fourth Amendment rights, the court said.

Personnel issues. In other instances, supervisors can be sued over Equal Employment Opportunity complaints in performance appraisals and other personnel-related matters. And some suits government officials have to contend with seem to border on the frivolous. In one case, a National Weather Service meteorologist was sued for failing to give enough notice about an impending flood.

Executive status is no guarantee of immunity from litigation, Euler said. “No matter your government rank, there’s been a lawsuit in your area, everything from trip-and-falls to violations of constitutional rights,” he said.

Euler said about a third of suits against federal officials are related to law-enforcement actions and another third are personnel-generated—assault and defamation suits, for example. The remaining suits are a mixed bag, he added.

“Sometimes employees will sue not because they’ve been discriminated against, but just because they feel they’ve been treated unfairly,” said Stan Graham, a partner with Waller, Lansden, Dortch & Davis, a law firm in Nashville, Tenn. “There’s a common misperception that unfair equals illegal. That’s just not so.”

Graham sees an overall increase in cases involving discrimination, retaliation and harassment. He attributes some of the increase to more awareness. “Title 7 [of the Civil Rights Act of 1964, which prohibits discrimination in the workplace on the basis of race, sex and national origin] has been around for 40 years. There are still a lot of people out there who don’t know what it covers,” he said.

“But when a plaintiff sues under Title 7 for $38 billion” and it’s reported in the press, “that gets attention,” he said.

Euler sees several factors contributing to the increase in lawsuits against federal employees. One is the cynicism toward government that became part of the zeitgeist after Watergate and the Vietnam War. People still haven’t regained their trust in government and are more inclined to sue when they feel wronged, he said. Radical reforms in the way the government works also are likely to increase executive exposure to lawsuits.

Perhaps most notable among major culture changes is the application across the government of pay-for-performance systems, in which employee pay raises depend largely on supervisor evaluations. (The systems themselves are being challenged in court.)

Disputes arising from performance reviews likely will increase litigation against supervisors “until the whole [pay for performance] process settles down,” Euler said.

Most negligence complaints against the federal government are resolved in favor of the government on the basis of immunity granted by the Federal Tort Claims Act, under which the government becomes the defendant in a case, as opposed to the employee.

In the vast majority of cases in which suits against an individual official go forward, the Justice Department will take on the defense, provided the alleged wrongdoing took place during the normal course of the employee’s official duties. For most federal employees, the Justice Department offers “a pretty effective defense,” said Bill Bransford, general counsel for the Senior Executives Association and a partner in the Washington law firm of Shaw, Bransford, Veilleux & Roth.

The Justice Department’s standards for deciding when to represent a federal employee are set forth in Title 28 of the Code of Federal Regulations.

Section 50.15 of the code stipulates that a federal employee or former employee may be provided representation in civil, criminal and congressional proceedings in which he or she is sued, subpoenaed or charged with a crime or misconduct.

The basic requirements for representation are that the “conduct at issue in the litigation must have occurred within the scope of federal employment and it must be in the interest of the United States to afford representation,” Miller said. Under Section 50.15, an official who believes that he or she is entitled to representation by the Justice Department must submit a written request for representation to a supervisor or other point of contact in such matters as designated by their agencies.

Coverage not guaranteed. The agency then determines whether the employee was acting within the scope of his or her employment and forwards those findings to the Justice Department. In the next step, the department’s litigating division reviews those findings and determines whether the employee’s actions “reasonably appear” to have been performed within the scope of his or her employment and whether representation would be in the interest of the United States.

This determination, Miller said, is “discretionary.” Indeed, the federal government does not guarantee federal employees coverage or an attorney in the event they are sued.

What sort of cases get turned down? “I have found that people who don’t get defended by the government are those accused of sexual harassment or clear misconduct,” Bransford said. “If there is a misconduct finding on behalf of their agency, that will cause the government to not represent them.”

Unfortunately, many federal employees still abide by the myth that the government will defend them unconditionally.

“Many still feel, ‘I work for the federal government and they will take care of me,’ ” said Dave Cavanaugh, vice president of Wright & Co., an Arlington, Va., insurance company.

In a worst-case scenario, the HUD employees involved in White vs. Julian had no assurance that the government would “take care of” them. Although HUD ultimately settled the matter, during the years it dragged on, the HUD employees did not know if they would lose their homes or not if they lost the case.

The events of White vs. Julian began in 1992, when a nonprofit housing developer based in Berkeley, Calif., applied for a permit from the local zoning board to convert the Bel Air Motel on University Avenue into housing for the homeless.

Three Berkeley residents who lived nearby opposed the proposed conversion, believing, according to court documents, that it would “bring people into the neighborhood who were mentally disabled or disabled through substance abuse.”

Ramping up a campaign against the project, the three residents wrote letters to the Berkeley City Council, circulated leaflets and published a newsletter containing articles with titles such as “City Forcing Bel Air Project Down Our Throats.”

In response, a Berkeley housing-rights advocacy group that supported the project filed a complaint with the San Francisco office of the federal Housing and Urban Development Department, alleging that the residents had engaged in discrimination on the basis of mental handicap.

Paul Smith, the San Francisco office’s investigations branch chief, assigned Bruce Lee, now deceased, and Robert Zurowski to investigate the advocacy group’s claims.

After an eight-month inquiry, the officials found that the three residents had “engaged in discriminatory actions in violation of the Fair Housing Act,” which states that it is illegal to “coerce, intimidate, threaten or interfere” with anyone’s right to housing.

HUD officials sued. In 1995, the Berkeley residents filed a lawsuit against the HUD officials in U.S. District Court in Northern California, contending that the officials had investigated and harassed them solely because they had exercised their First Amendment rights to free speech and to petition the government for a redress of grievances.

In addition to Smith, Lee and Zurowski, the complaint also named as defendants Elizabeth Julian, assistant secretary of HUD for Fair Housing and Equal Opportunity at the time, LaVera Gillespie, director of the regional office of FHEO in San Francisco, and John Phillips, special assistant to the HUD regional administrator.

The HUD officials argued that they were required under the Fair Housing Act to investigate the matter and that they were entitled, at the very least, to qualified immunity.

Under the “qualified immunity” doctrine, federal employees are protected from being sued for acting within the scope of their official duties, unless their conduct violates clearly established rights.

However, in 1998, the District Court denied the officials’ motion for summary judgment on the basis of qualified immunity and entered a partial judgment in favor of the Berkeley residents.

The HUD employees, represented by Justice Department attorneys, then took their case to the U.S. Court of Appeals for the Ninth Circuit, which in 2000 upheld the lower-court ruling.

In their ruling, the Ninth Circuit judges applied to White vs. Julian what has come to be known as the Bivens doctrine, said Joseph P. Gebhardt, managing attorney at Gebhardt & Associates in Washington. This precedent has primarily been applied to law enforcement agents, but not exclusively, as White vs. Julian demonstrates.

In White vs. Julian, the Ninth Circuit Court denied qualified immunity to the HUD employees and held them personally liable. According to a petition for the Ninth Circuit Court to rehear the case, the Ninth Circuit judges “belittled concerns about holding these [HUD] officials personally liable, saying that it expects that HUD will indemnify them.”

Once it lost in the appeals court, HUD settled the case and paid damages to the plaintiffs, according to government and legal sources familiar with the case. None of the HUD or Justice Department officials involved would comment on the record for this story.

But it’s clear from available court records and knowledgeable sources that the HUD officials, who had done their jobs in good faith, had to endure the toxic effects of a long-running lawsuit with no assurance of immunity as the case proceeded or even that the government would pay damages.

Federal executives can take some steps now to protect themselves from becoming embroiled in a lawsuit (see sidebar, Page 16). The specter of possible litigation and the chance that Justice might reject a request for representation have led many federal officials to buy private liability insurance.

For less than $300 per year, a liability insurance policy will provide federal employees with a lawyer in case they are sued.

Federal law calls for agencies to reimburse employees for at least part of the annual cost of the insurance, Cavanaugh said. Most federal agencies reimburse managers, supervisors and law enforcement officers up to 50 percent of the annual premium.

Wright’s liability policy covers up to $200,000 of legal fees and costs in handling EEO and Merit Systems Protection Board complaints, and up to $1 million in liability if a policy holder is found guilty in a civil case.

The company says that the plan picks up certain legal-defense costs and pays covered damages, even in cases where the Justice Department refused to provide a defense.

The plan does not include coverage of damages arising from willful violations of penal statutes or intentional acts of fraud, liability assumed by the insured or any contract or agreement, damage to property owned by the government and a few other exclusions.

About 29,000 federal employees now have liability policies with Wright, Cavanaugh said. “The major problem now is finding ways to let federal employees know this exists,” he said.