Seventh Circuit Clarifies Egan Security-Clearance Bar Is Nonjurisdictional Deference Rule

In Dored Shiba v. Alejandro Mayorkas, the court affirmed a dismissal of a federal employee’s retaliation claim under the Rehabilitation Act after USCIS rescinded his job offer due to a stalled security clearance investigation.

The court held that while the Egan rule functionally forecloses judicial review of security-clearance decisions, it does not deprive federal courts of their adjudicative power. Instead, the rule operates as a mandatory rule of deference rooted in separation-of-powers principles and the political-question doctrine.

Shiba, a former USCIS officer, alleged that his 2019 job offer was rescinded in retaliation for prior disability discrimination complaints. The district court had dismissed the suit for lack of subject-matter jurisdiction, relying on Department of the Navy v. Egan to bar review of security-clearance decisions.

On appeal, the Seventh Circuit determined that Egan is best understood as a rule of finality rather than a jurisdictional limit. The court noted that the Supreme Court’s opinion in Egan did not speak in jurisdictional terms and instead focused on the Executive Branch’s exclusive authority over national security matters.

The court distinguished Egan from jurisdictional limits derived from Article III’s case-or-controversy requirement, comparing it instead to the nonjurisdictional doctrine of consular nonreviewability. The court concluded that neither doctrine constrains a court’s subject-matter jurisdiction but instead mandates judicial deference to executive decisions.

Applying this framework, the court held that Shiba’s retaliation claim fell within Egan’s scope because adjudicating it would require second-guessing the agency’s reasons for withholding a security clearance. The court declined to adopt a narrow exception for knowingly false referrals proposed by the D.C. Circuit in Rattigan v. Holder, noting Shiba’s claim did not challenge the specific referral at issue in that precedent.

The Seventh Circuit modified the district court’s judgment to reflect a dismissal on the merits for failure to state a claim rather than a jurisdictional dismissal, though it affirmed the outcome.