There are many reasons a government agency or other entity might conduct an investigation, but what happens when its investigation is conducted negligently?
Many agencies have standards for products, processes, or behavior. For example, the Food and Drug Administration (FDA) has safety standards for drugs and vaccines. The U.S. Department of Agriculture (USDA) sets standards for how food is processed and distributed. An entity such as a public university may set standards for its employees’ conduct. There are good reasons for agencies like these to want to investigate and to take action if they discover evidence that something or someone failed to comply with their set standards.
An improperly conducted, negligent investigation can lead to very serious consequences for those who were investigated. Often the harm comes not just during the investigation itself, but from its inaccurate results or flawed conclusions being publicized. The harm to reputation can be significant and can lead to other harms such as emotional distress, loss of income, lost profits, or lost economic opportunities.
Imagine for instance, you’re a businessperson who suddenly has the FBI investigating you and your business based on another’s allegations that you engaged in criminal conduct. During the late 1980s, a businessman filed a lawsuit claiming that the FBI handled its investigation of him in a negligent manner. The investigation did not lead to a finding of criminal conduct but the businessman claimed he continued to suffer humiliation, distress, and serious financial consequences. He claimed the whole process caused him to become a subject of ridicule, to suffer seizures, and to have to file bankruptcy. See Kugel v. United States, 947 F.2d 1504, 1505 (D.C. Cir. 1991). In that case, the Court reasoned that the cause of the alleged harm “was not the FBI’s negligent execution of the investigation but its dissemination of information associated with the investigation.” Kugel, 947 F.2d at 1505.
This distinction is important.
The Federal Tort Claims Act (FTCA), 28 U.S.C.S. § 1346(b) et seq., permits individuals to sue the United States in federal court for “negligent or wrongful act or omission of a government employee acting within the scope of employment.” Kugel, 947 F.2d at 1506 (quoting 28 U.S.C. § 1346(b)).
However, the federal government is immune from suits that arise from certain kinds of claims, including forms of defamation. In Mr. Kugel’s case, the Court needed to “decide whether Kugel’s complaint states a claim resulting solely from the defamatory acts of government agents, in which case the intentional torts exception bars it, or whether he asserts a distinct negligence claim cognizable under the FTCA.” Kugel, 947 F.2d at 1506. In other words, if it the harm came from a communication by the FBI rather than by the way the FBI carried out its investigation, the claim could not stand. In Mr. Kugel’s case, the D.C. Federal Court of Appeals affirmed the lower court’s dismissal of his claims.
Other plaintiffs have claimed the harm they suffered was the result of a negligent investigation rather than defamation. Several courts have rejected such claims for a host of reasons. See Bryson Kern, Reputational Injury Without a Reputational Attack: Addressing Negligence Claims for Pure Reputational Harm, 83 Fordham L. Rev. 253, 273-75 (2014) available at: http://ir.lawnet.fordham.edu/flr/vol83/iss1/8. As Kern states, “For thousands of years, society has understood the importance of maintaining a good name and positive reputation, and it is clear that protecting one‘s reputation continues to be a widespread concern of great importance. It is less clear, however, if the law should provide redress for injury to reputation, and if so, how this redress is best accomplished.”
The law and policy of reputational harm continue to evolve, in part because attorneys and their clients continue to press for change. We will continue to fight to help our clients protect their reputations and hold accountable those who cause our clients harm.
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