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Tamosaitis v. URS Inc.

United States Court of Appeals, Ninth Circuit

November 7, 2014

WALTER L. TAMOSAITIS, PH.D., an individual, Plaintiff-Appellant,
v.
URS INC., a Delaware corporation; URS ENERGY AND CONSTRUCTION INC., an Ohio corporation; U.S. DEPARTMENT OF ENERGY; URS CORPORATION, Defendants-Appellees

Argued and Submitted, November 7, 2013, Seattle, Washington

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Eastern District of Washington. D.C. No. 2:11-cv-05157-LRS. Lonny R. Suko, District Judge, Presiding.

SUMMARY[*]

Whistleblower / Energy Reorganization Act

The panel affirmed the district court's dismissal of the U.S. Department of Energy from the suit, affirmed the grant of summary judgment in URS Corp.'s favor, and reversed the grant of summary judgment for URS Energy & Construction, Inc. in an action brought by a URS Energy employee alleging violations of the Energy Reorganization Act whistleblower protection provision, concerning cleanup efforts of nuclear waste at the Hanford Nuclear Site in Washington state.

The " opt-out" provision of the Energy Reorganization Act (" ERA" ), 42 U.S.C. § 5851(b)(4), empowers whistleblowing employees at nuclear energy sites to bring anti-retaliation claims to federal court after one year of agency inaction. The Department of Energy (" DOE" ) led the effort to clean up the pollution at Hanford, which included construction and management of a Waste Treatment Plant. The Department contracted with Bechtel National, Inc., which subcontracted with URS Energy & Construction, Inc. (" URS Energy" ) for work on the project. URS Energy is a wholly-owned subsidiary of URS Corporation.

Addressing the issue of administrative exhaustion, the panel held that before an employee may opt out of the agency process and bring a retaliation suit against a respondent in federal court, the respondent must have had notice of, and an opportunity to participate in, the agency action for one year. The panel affirmed the dismissal of DOE because there was no administrative complaint pending against DOE for one year before the employee filed suit against DOE in federal court, and § 5851(b)(4)'s administrative exhaustion requirement was not satisfied as against DOE. The panel held that administrative exhaustion was sufficient as to URS Energy where the employee gave adequate notice to URS Energy that it was the named respondent to his complaint. Finally, the panel affirmed the district court's dismissal of URS Corp. for lack of administrative exhaustion where URS Corp. was not adequately named in the employee's original administrative complaint.

The panel held that the employee introduced sufficient evidence to create a triable issue as to whether his whistleblowing activity was a contributing factor in the adverse employment action URS Energy took against him. The panel also held that there was a genuine issue of fact as to whether the employee's compensation, terms, conditions, or privileges of employment were affected by his transfer to another position. Accordingly, the panel reversed the grant of summary judgment to URS Energy for ERA whistleblower retaliation.

The panel held that the employee did not have a statutory jury trial right for his ERA whistleblower suit. The panel held that the employee did have a constitutional right to a jury trial for his claims seeking money damages under § 5851(b)(4), and reversed. The panel remanded for further proceedings.

John Sheridan (argued), Sheridan Law Firm, Seattle, Washington; and Joseph R. Shaeffer, MacDonald Hoague & Bayless, Seattle, Washington, for Plaintiff-Appellant.

Katherine Bushman Smith (argued), Georgetown University Law Center, Appellate Litigation Program, Washington, D.C.; and Rolf Harry Tangvald, Assistant United States Attorney, Office of the United States Attorney, Spokane, Washington, for Defendant-Appellee Department of Energy.

Matthew William Daley (argued), Timothy Michael Lawlor, and Matthew A. Mensik, Witherspoon Kelley, Spokane, Washington, for Defendants-Appellees URS Corporation, URS Inc., and URS Energy and Construction, Inc.

Before: Alex Kozinski, Chief Judge, and Richard A. Paez and Marsha S. Berzon, Circuit Judges.

OPINION

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BERZON, Circuit Judge:

The Energy Reorganization Act (" ERA" ), 42 U.S.C. § 5851(b)(4), includes an " opt-out" provision empowering whistleblowing employees working at nuclear energy sites to bring anti-retaliation claims to federal court after one year of agency inaction. Our case concerns the interpretation

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and application of that provision. In addition, we consider whether a whistleblower who sues an employer in a federal anti-retaliation lawsuit under the ERA opt-out provision has a constitutional right to a jury trial.

I.

A. Background

The Hanford Nuclear Site is a former nuclear weapons production facility in Washington state.[1] Hanford's reactors produced plutonium for the national defense for over forty years. The Hanford site abuts a river and stores fifty-three million gallons of hazardous, high-level nuclear waste in underground tanks. There are estimates that one million gallons of nuclear waste have leaked from the storage tanks into the ground and that the groundwater beneath eighty-five square miles of the site is polluted.

The Department of Energy (" DOE" ) leads the effort to clean up the pollution at Hanford. The clean-up plan includes construction and management of a Waste Treatment Plant (" WTP" ) responsible for " separating and vitrifying (immobilizing in glass) . . . nuclear tank waste." Vitrification involves mixing nuclear waste with glass-forming materials at extremely high temperatures, then pouring the mixture into stainless steel containers to cool and solidify it. Once immobilized in glass, the nuclear waste generally is considered stable and safe for storage. Over hundreds of years, the waste will lose its radioactivity.

The building of the WTP is in process. When completed, the WTP will be the largest such facility in the world. The WTP is to have a " design life of forty years," meaning that some of its parts are to operate without maintenance for four decades. The sound design of the WTP is important to protect against occurrence of a " criticality accident" -- a nuclear chain reaction inside plutonium or enriched uranium. Such reactions release radiation, which, particularly in combination with hydrogen gas, could be catastrophic.

To assist in its clean-up effort at Hanford, DOE contracts with Bechtel National, Inc. (" Bechtel" ). Bechtel subcontracts with URS Energy & Construction, Inc., (" URS E& C" ) for work on the WTP.

In the wake of a report detailing problems with the Hanford clean-up, appellant Dr. Walter Tamosaitis, an employee of URS E& C, was appointed to lead a study reviewing technical challenges within the WTP project. The study identified twenty-eight technical issues, twenty-seven of which were " closed," meaning resolved, by the planned date of October 2009. The remaining issue, termed the " M3 mixing issue," required solving a design problem concerning the mixing of nuclear waste in certain of the WTP pretreatment tanks.

The M3 mixing issue proved to be a lingering and complex challenge. Tamosaitis wanted to extend the deadline for solving the issue to September 2010, while Bechtel wanted it resolved by June 2010. Failure to resolve the M3 mixing issue by June would have jeopardized Bechtel's six-million-dollar fee.

Bechtel rejected Tamosaitis's advice and announced closure of the M3 mixing issue by June. Tamosaitis objected: He brought a fifty-point list of environmental and safety concerns to a meeting hosted by Bechtel;

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forwarded the same list to Bill Gay, a URS employee and WTP Assistant Project Manager; and reached out to several WTP consultants by email, hoping that they would oppose closure and publicize his concerns.

Two days later, Tamosaitis was fired from the WTP project. URS Operations Manager Dennis Hayes personally terminated Tamosaitis. Hayes directed Tamosaitis to return his badge, cell phone, and Blackberry, and leave the site immediately. Tamosaitis was reassigned, in a nonsupervisory role, to a basement office in a URS facility off the Hanford site. He was later offered other positions with URS, but they required relocation.

B. The ERA Anti-Retaliation Provision

The anti-retaliation -- or " whistleblower" protection -- provision of the ERA provides that:

No employer may discharge any employee or otherwise discriminate against any employee with respect to his compensation, terms, conditions, or privileges of employment because the employee . . . notified his employer of an alleged violation of this chapter [Development of Energy Sources] or the Atomic Energy Act of 1954.

42 U.S.C. § 5851(a)(1)(A). This statute " protect[s] workers from retaliation based on their concerns for safety and quality," Mackowiak v. Univ. Nuclear Sys., Inc., 735 F.2d 1159, 1163 (9th Cir. 1984), and ensures that the government agencies charged with monitoring nuclear safety do not see their " channels of information . . . dried up by employer intimidation," DeFord v. Sec'y of Labor, 700 F.2d 281, 286 (6th Cir. 1983) (quoting NLRB v. Scrivener, 405 U.S. 117, 122, 92 S.Ct. 798, 31 L.Ed.2d 79 (1972)).

The Department of Labor, Occupational Safety and Health Administration (" DOL-OSHA" ) implements this antiretaliation provision. See 29 C.F.R. § § 24.100-24.105. An employee seeking redress under section 5851 must file a complaint with DOL-OSHA and follow the statutorily designated administrative scheme, whereby:

Any employee who believes that he has been discharged or otherwise discriminated against by any person in violation of subsection (a) of this section may, within 180 days after such violation occurs, file (or have any person file on his behalf) a complaint with the Secretary of Labor (in this section referred to as the " Secretary" ) alleging such discharge or discrimination. Upon receipt of such a complaint, the Secretary shall notify the person named in the complaint of the filing of the complaint, the Commission, and the Department of Energy.

42 U.S.C. § 5851(b)(1).

In 2005, Congress bolstered this whistleblower protection by amending section 5851 to allow employees to take their retaliation cases to federal district court if, after one year, DOL-OSHA has not adjudicated their claim. Energy Policy Act of 2005, Pub. L. No. 109-58, ยง 629, 119 Stat 594 (Aug. 8, 2005). ...


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