Private Lawsuit Jeopardizes State Secrets, US Says

09.15.14 | 3 min read | Text by Steven Aftergood

The U.S. Government asserted the state secrets privilege last week in a private lawsuit to which the government is not a party and moved for dismissal of the case.

Greek businessman Victor Restis had filed a lawsuit last year against the private advocacy group United Against Nuclear Iran (UANI), alleging that the group had falsely and maliciously accused Restis of engaging in illict commerce with Iran. UANI, whose advisory board includes numerous former government officials, said the Restis complaint was “meritless.”

On Friday, an unidentified agency within the U.S. Government asserted the state secrets privilege in the case, for reasons that were not disclosed, and asked the court to dismiss the entire proceeding.

“A formal claim of privilege has been asserted by the head of the concerned federal agency based upon his or her personal consideration of the matter,” according to an unclassified memorandum filed by the government. “The identity of the concerned federal agency, the particular information at issue, and the bases for the assertion of the state secrets privilege cannot be disclosed without revealing classified and privileged matters.”

“Further, while the United States takes this position reluctantly and only after careful consideration, the only appropriate course in light of this privilege assertion is to dismiss this action in its entirety,” the government memorandum said.

This is a peculiar and seemingly illogical state of affairs, according to Abbe D. Lowell, attorney for the plaintiff Victor Restis.

He told the court in an April letter that there are three possible categories of documents at stake in the case: “(1) those created by UANI itself; (2) those received from third parties other than the Government; and (3) those received from the Government itself.”

“No privilege can apply to the first two categories,” Mr. Lowell wrote, “and with respect to the third category, any privilege that could have applied has been waived if the Government gave them to Defendants.”

Meanwhile, because of the assertion of privilege, Mr. Lowell wrote in a June letter, “Defendants [UANI] do not have to defend their conduct because they can hide behind the U.S. Government and refuse to produce the bulk of relevant documents.”

The government acknowledged in its privilege memorandum that its proposal to dismiss the case on state secrets grounds was unfair to the parties, but it said that it was the lesser of two evils.

“Although dismissal of claims is undeniably a harsh result, ‘the results are harsh in either direction’ because harm to national security is also at issue, and ‘the state secret doctrine finds the greater public good — ultimately the less harsh remedy — to be dismissal.”

Furthermore, “dismissal should not be taken to mean that any of the alleged defamatory statements concerning the plaintiffs and their activities that are at issue in this lawsuit are either true or false,” the government memorandum said. “Dismissal … is not being sought by the United States on behalf of the defendants, and should not be understood to reflect a favorable or unfavorable determination as to the the truth or falsity of defendants’ statements…. Rather, the privilege is being asserted, and dismissal is being sought by the United States, solely to protect against a reasonable danger of harm to national security interests.”

Although an assertion of the state secrets privilege in private litigation is unusual, it is not unheard of. A 2011 review of pending cases by the Department of Justice said that “Several of the cases in which the privilege was invoked involved purely private litigation — not challenges to Executive Branch conduct.”

The Justice Department’s 2009 revision of its policy on asserting the state secrets privilege has had little visible impact. There has been no known case in which assertion of the privilege was “narrowly tailored” to permit an affected lawsuit to proceed, as the revision proposed. Nor is there any known case in which a privileged matter has been referred to an agency Inspector General for adjudication, as had been suggested. As for the Department’s commitment to provide “periodic reports” to Congress on use of the privilege, it has yielded only a single such report, more than three years ago.