The Myth of Personal Liability: Who Pays When Bivens Claims Succeed.

• Author: Pfander, James E.

Introduction I. Constitutional Torts, Personal Liability, and Ziglar A. Constitutional Claims and the Bivens Action B. Suits for Damages Under the Federal Tort Claims Act C. Personal Liability and the Decline of the Bivens Action II. Bivens in Practice: A Study of Who Pays to Resolve Well-Grounded Constitutional Tort Claims A. Cases in Which Employees Contributed to the Payment of Settlements and Judgments B. Cases in Which Employees Made No Compensating Payments 1. Dismissal of Bivens claims during litigation 2. Settlement of Bivens and FTCA claims with payment by the U.S. government 3. Substitution of FTCA claims for Bivens claims as a condition of settlement a. Formal substitution b. Informal substitution C. The Impact of Judgment Fund Payments on the Bureau of Prisons III. Implications A. Constitutional Torts and Individual Deterrence After Ziglar B. Agency Incentives and the Role of Indemnification C. The Department of Justice Narrative of Personal Liability D. Payment Practices, Transparency, and Congressional Oversight of the Judgment Fund E. On the Need for Future Research and the Uncertain Future of the Bivens Action Conclusion Appendix A: Methodology Appendix B: Data Introduction

Since its 1971 decision in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, (1) the Supreme Court has been of two minds about the impact of constitutional tort litigation on the workaday incentives of federal officials. On one side, the Court has emphasized the importance of deterring constitutional violations through the imposition of personal, tort-based liability payable by the officer herself. (2) On the other side, the Court has increasingly worried about the burden of such liability, fearing it will overdeter federal officials and undermine the government's ability to respond in times of crisis. (3) Reflected in the Court's 2017 decision in Ziglar v. Abbasi, and echoed more recently in Hernandez v. Mesa, (4) such worries about official liability have fueled an expansion of immunity defenses, as well as a growing hostility to the recognition of any right to sue under the Bivens doctrine. (5)

The Court and its scholarly interlocutors display a similar ambivalence about the question of who ultimately bears the burden of Bivens liability. The Court, for its part, often treats Bivens as posing a threat of substantial personal liability that counsels against recognizing new rights to sue. On other occasions, the Court has sounded notes of caution for a different reason: It has worried that the expansion of Bivens liability would impose substantial indemnification costs on the government and burden the fisc. (6) Scholars have been similarly nimble; they often (but do not invariably) assume that the government will indemnify its officers, thereby shifting the incidence of liability from the individual defendant to the indemnifying agency. (7) While scholars debate the incentive effects of competing liability rules, (8) these debates have been mostly theoretical. We know of no study that examines how the government resolves successful Bivens claims and where the burden of compensating victims of federal officials' constitutional torts eventually falls. (9)

To answer these important questions, we studied successful lawsuits brought against the Federal Bureau of Prisons (BOP) and its officers. Invoking the Freedom of Information Act (FOIA), we sought data on Bivens claims brought against BOP employees that resulted in payments to plaintiffs. The BOP produced documents that revealed payments made in connection with settlements and judgments in some 209 cases that were closed over a ten-year period from 2007 through 2017--101 cases that alleged claims only under the Federal Tort Claims Act (FTCA) (10) or FOIA, (11) and 108 cases that included Bivens claims. Through independent research, we identified another 63 successful Bivens cases brought against BOP officials during the relevant time period. (12) Our study focuses on the 171 cases with Bivens claims, where personal liability is assumed. By examining these 171 cases, we were able to determine whether individual defendants contributed any personal resources in the course of resolving the claims of misconduct. We were also able to determine the frequency with which payments were made by the BOP. (13) Despite the study's limitations, applying as it does only to the practices of a single agency over a specified period of time, we can draw important, if qualified, conclusions about who pays when Bivens litigation succeeds.

Among other striking conclusions, the data reveal that individual government officials almost never contribute any personal funds to resolve claims arising from allegations that they violated the constitutional rights of incarcerated people. Indeed, of the 171 successful cases in our dataset asserting Bivens claims, we found only eight in which the individual officer or an insurer was required to make a compensating payment to the claimant. (14) Of the more than $18.9 million paid to plaintiffs in these 171 cases, federal employees or their insurers were required to pay approximately $61,163--0.32% of the total. (15) Echoing the conclusion one of us reached in a study of the way local governments pay settlements and judgments in [section] 1983 claims against state and local law enforcement officers, (16) we find that the federal government effectively held its officers harmless in over 95% of the successful cases brought against them, and paid well over 99% of the compensation received by plaintiffs in these cases.

A second important finding emerged from our study. Just as individual officers were almost invariably shielded from personal liability, we found that the BOP and its budget were similarly protected from financial responsibility for constitutional tort claims. The settlement agreements we reviewed made clear that the government almost always satisfied claims brought under Bivens by arranging to have the agreed-upon amounts paid through the Judgment Fund of the United States Treasury, (17) rather than by the agency responsible for the conduct of its employees--in this case, the BOP.

The federal government's practice of resolving Bivens claims through payments from the Judgment Fund has several significant implications. First, the litigation and settlement practices we report here conflict with the Supreme Court's assumptions about the ways in which Bivens cases are resolved--these cases simply do not threaten individual employees with financial ruin or trigger indemnifying payments from their agencies. In predicating its refusal to recognize a right to sue under Bivens in part on the perceived threat of exorbitant personal, agency, or systemic liability, the Ziglar Court proceeded in error. The Hernandez Court took no steps to correct the error. (18)

Second, our findings have important implications for the way the political branches manage the payment of successful Bivens claims. Under longstanding Department of Justice regulations, employees sued for job-related conduct cannot seek indemnifying protection from personal liability until after the litigation concludes with the entry of an adverse judgment. (19) Department of Justice attorneys often emphasize these limitations in representing to courts and to opposing counsel that federal officers face a substantial threat of personal liability in Bivens litigation. (20) But our findings indicate that settlements frequently occur during the pendency of litigation and before judgment, with the amounts being paid not through agency indemnification but through the Judgment Fund. (21) In some of these cases, Department of Justice attorneys instruct plaintiffs to substitute an FTCA claim for the Bivens claim in an amended complaint as a condition of settlement; in other cases, the settlement agreement is framed as a settlement under the Federal Tort Claims Act although there is no FTCA claim in the case. In cases in which FTCA claims were formally added and cases simply treated as though brought under the FTCA, there were often jurisdictional bars to relief; most of the FTCA claims were added well after the statute of limitations had run and without any indication that necessary administrative exhaustion procedures had been followed. (22) Such practices appear to run counter to the limits imposed by Congress on the way agencies exercise their settlement authority. (23) While Congress has authorized settlements under the FTCA, it has never accepted Judgment Fund liability for Bivens claims or for any agency payments made to employees to hold them harmless from personal liability.

This Article proceeds in three parts. Part I describes the history and current framework of Bivens litigation as narrowed by the Court's recent decisions in Ziglar v. Abbasi and Hernandez v. Mesa. We focus in particular on the consequences of the Court's hostility to money claims, a hostility apparently driven in part by the perception that such claims threaten well-meaning government officials with personal liability and their employing agencies with the burden of indemnification. Part II describes the results of our study of successful Bivens actions. (24) Part II tracks representative cases, showing how the ultimate resolution of the claims by settlement or judgment sometimes corresponded with the submission of an amended pleading that restated the claims in terms of the FTCA, and sometimes resulted in an agreement for the United States simply to pay for the acts of BOP employees.

Part III explores the implications of our findings in multiple areas. The data we report challenge conventional understandings of the Bivens regime, cast doubt on aspects of the Supreme Court's Bivens jurisprudence, and invite congressional redesign of rights and remedies moving forward. More research should explore why the Department of Justice handles Bivens claims against BOP employees in the manner we have uncovered, how...