2 Recruited to Spy for U.S. Can’t Sue CIA, Justices Say

An Eastern bloc couple recruited to spy for the CIA during the Cold War who later defected to the U.S. are not entitled to sue the agency for reneging on a pledge of lifetime support, the Supreme Court ruled Wednesday.

“Forcing the government to litigate” this type of claim presents the possibility that an espionage relationship might be revealed during the course of the lawsuit, which poses an unacceptable risk to the nation, Chief Justice William H. Rehnquist wrote for a unanimous court.

Rehnquist’s ruling relied primarily on an 1875 Supreme Court decision, U.S. vs. Totten, in which the court ruled that the heirs of William A. Lloyd, a spy hired by Abraham Lincoln to gain information on Confederate troop positions, were not entitled to a court hearing on their claim that the government failed to honor its promise to compensate Lloyd.

Rehnquist said that ruling was still good law and quoted at length from it: “Both employer and agent must have understood that the lips of the other were to be forever sealed respecting the relations of either to the matter.”

Permitting such a lawsuit to proceed, he said, would make the government “vulnerable to ‘graymail,’ i.e., individual lawsuits brought to induce the CIA to settle a case ... out of fear that any effort to litigate the action would reveal classified information that may undermine ongoing covert operations.”

Associate Justice John Paul Stevens announced the ruling for Rehnquist, who was ailing and not present at Wednesday’s session. The chief justice, who is being treated for thyroid cancer, is working from home.

The decision reversed a 2003 ruling of the U.S. 9th Circuit Court of Appeals that held that the plaintiffs, a Seattle couple identified only as Jane and John Doe, were entitled to a day in court. The couple maintain in their lawsuit that their lives are still at risk because of work they did for the CIA.

Their suit states that “during his tenure as a high-ranking diplomat” for an unnamed Eastern bloc nation, “Mr. Doe approached a person associated with the United States Embassy and requested assistance defecting to the United States.”

Then, according to the suit, CIA agents took the couple to a safe house and “employed intimidation and coercion to convince the Does to remain instead at their diplomatic posts and to engage in espionage for the United States,” in return for which they would eventually be relocated to the U.S. and provided with financial security “for life.”

The Does contended that they fulfilled their end of the bargain and in 1987 were brought to the U.S., which provided them with new identities and housing, paid for John Doe’s schooling and provided him with a resume that enabled him to get a job at a Seattle bank.

The agency provided as much as $27,000 in assistance a year, according to the suit.

The agency cut off stipends as John Doe’s income rose, but in 1997, while he was in his late 50s, Doe was laid off and asked the CIA to resume financial support. The CIA refused, citing federal budget restraints.

In its decision, the 9th Circuit said that although the Totten ruling retained its “core vitality,” the couple’s case raised more than the contract claims barred by the CIA. The couple asserted that their rights to due process of law were violated when the CIA ended their benefits without providing them a fair chance to appeal that decision.

The appeals court said the Does could proceed on those claims and that if the government sought to protect particularly sensitive information, it could invoke the state secrets privilege, leaving it to a court to determine what could be disclosed.

On Wednesday, however, Rehnquist said the 9th Circuit “was quite wrong.... No matter the clothing in which alleged spies dress their claims, Totten precludes judicial review in cases such as [the Does’] where success depends upon the existence of their secret espionage relationship with the government.” He also said that “requiring the government to invoke the [state secrets] privilege on a case-by-case basis risked the perception that it was either confirming or denying relationships” with people who sued.

The CIA declined to comment on the ruling or the details of the Doe case. A CIA spokeswoman said, however, that “the CIA goes to extraordinary lengths to honor its commitments to defectors and anyone with whom the CIA has a relationship.”

The Does’ lawyers had no immediate comment, saying they had not had time to digest the opinion.

Professor Robert F. Turner, co-founder of the Center for National Security Law at the University of Virginia School of Law, said the ruling was “fully consistent with the expressed concern of our Founding Fathers about the importance of safeguarding national security secrets.”

“The court today quite correctly observed that even a ‘small chance’ that a court might disclose the identity of a spy could impair intelligence gathering and ‘cause sources to close up like a clam,’ ” explained Turner, quoting from an earlier decision.

Times staff writer Greg Miller contributed to this report.