Case: 14-60645 Document: 00513166776 Page: 1 Date Filed: 08/24/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-60645 United States Court of Appeals
Fifth Circuit
FILED
JORGE A. AVILES, August 24, 2015
Lyle W. Cayce
Petitioner, Clerk
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent.
Petition for review of a final order from the
Merits Systems Protection Board
Before CLEMENT, PRADO, and ELROD, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
Former IRS agent Jorge Aviles asserts that he was fired in retaliation
for protected whistleblowing. Aviles alleges that he uncovered that
ExxonMobil Corporation (“Exxon”) had perpetrated a $500 million tax fraud
and that IRS officials covered it up. Aviles claims he disclosed this information
to his supervisors and that he was ultimately fired in retaliation for this
protected disclosure in violation of the Whistleblower Protection Act. An
administrative law judge (ALJ) dismissed Aviles’s appeal. The ALJ found
that—aside from Aviles’s “vague and conclusory” allegations of a cover-up—
Aviles failed to allege that the government was involved in Exxon’s alleged
wrongdoing. Over a dissent, the Merit Systems Protection Board (“MSPB” or
Case: 14-60645 Document: 00513166776 Page: 2 Date Filed: 08/24/2015
No. 14-60645
“the Board”) affirmed. Because we agree with the Board’s finding that Aviles
failed to make a nonfrivolous allegation of government involvement in Exxon’s
alleged wrongdoing, we conclude that Aviles’s disclosure was not protected and
deny his petition.
I. BACKGROUND
This is the first direct appeal to the Fifth Circuit from a Merit Systems
Protection Board adjudication in the wake of the 2012 amendments to the
Whistleblower Protection Act. Aviles grounds his petition for review in the
drafting history of the Whistleblower Protection Act; he argues that Congress
has repeatedly expanded the definition of protected whistleblowing activities.
Accordingly, before reviewing the underlying facts and procedural background,
we provide a brief overview of the drafting history and the statutory scheme
governing Aviles’s claim.
A. Legal Background and Statutory Framework
The Civil Service Reform Act of 1978 established statutory protections
to encourage federal employees to disclose government illegality, waste, fraud,
and abuse; and also established the Merit Systems Protection Board as an
independent agency to adjudicate these claims. Pub. L. No. 95-454, §§ 101, 202,
92 Stat. 1111, 1113–14, 1121–31. Congress later passed the Whistleblower
Protection Act (WPA) of 1989, Pub. L. No. 101-12, 103 Stat. 16. The WPA
proscribes retaliation against a federal employee who discloses what the
employee reasonably believes evidences a violation of any law, rule, or
regulation, gross mismanagement, a gross waste of funds, an abuse of
authority, or a substantial and specific danger to public health or safety. See 5
U.S.C. § 2302(b)(8).
From its inception in 1982 until recently, the Federal Circuit exercised
exclusive jurisdiction over petitions for review of MSPB adjudications that
involved only federal-employee whistleblower claims. King v. Dep’t of the Army,
2
Case: 14-60645 Document: 00513166776 Page: 3 Date Filed: 08/24/2015
No. 14-60645
570 F. App’x 863, 864 (11th Cir. 2014) (per curiam). These claims were directly
appealable to the Federal Circuit and reviewed for arbitrariness or
capriciousness and for substantial evidence. Id. at 865; see also 5 U.S.C.
§ 7703(c).
Concerned that the Federal Circuit and the MSPB had interpreted the
WPA’s definition of protected disclosures too narrowly, Congress amended the
statute in 1994. See Act of Oct. 29, 1994, Pub. L. No. 103-424, 108 Stat. 4361;
S. Rep. No. 103-358, at 8–10 (1994) (criticizing the Federal Circuit’s
“construction of the legislative history” and declaring that “the Board and the
courts should not erect barriers to disclosures which will limit the necessary
flow of information from employees who have knowledge of government
wrongdoing”). In 2012, Congress again significantly amended the WPA
through the Whistleblower Protection Enhancement Act (WPEA) to address
similar concerns. This time, to encourage diverse appellate review—which
leads to circuit splits (facilitating Supreme Court review), S. Rep. No. 112-155,
at 11 (2012)—Congress also expanded judicial review to all circuits, with this
provision of the law scheduled to “sunset” five years later, 5 U.S.C.
§ 7703(b)(1)(B); see also All Circuit Review Extension Act, Pub. L. No. 113-170,
128 Stat. 1894 (extending the sunset of all-circuit review to five years instead
of two years after enactment).
B. Factual and Procedural Background
The following factual background is essentially undisputed and is drawn
from the administrative record of the MSPB adjudication. Aviles worked as an
International Examiner at the IRS’s Large and Mid-Sized Business Division
in Houston, Texas. As part of his duties, Aviles worked onsite at Exxon’s
facility auditing its international tax filings. In September 2010, Aviles
received a letter from the Acting Territory Manager proposing that he be
“removed from his position for: 1) absence without leave for a total of 552 hours;
3
Case: 14-60645 Document: 00513166776 Page: 4 Date Filed: 08/24/2015
No. 14-60645
2) failure to follow a managerial directive to report to work; and 3) providing
misleading statements in matters of official interest.” Later that year, the
proposal for Aviles’s removal was sustained, and Aviles’s employment with the
IRS ended.
In 2013, Aviles filed an individual right of action (IRA) appeal with the
MSPB, asserting that he was removed in retaliation for protected
whistleblowing. Specifically, Aviles alleged that he filed a complaint with the
Office of Special Counsel (OSC) 1 in which he explained that he had disclosed
to his supervisor on February 2, 2010, “[i]ncome tax fraud and blockage of
computer committed by ExxonMobil Corporation and[] the involvement by IRS
management team in helping to cover it up.” Aviles also alleged that on
February 16, 2010, he disclosed “income tax fraud in excess of US$ 500 million
for the tax years 2006 and 2007” on the part of Exxon to the Commissioner of
the IRS and other IRS officials. Aviles’s removal process started months later
in September 2010, and he was removed in November of that year.
1. MSPB Proceeding
The ALJ found that 5 U.S.C. § 2302(b)(8)’s protections “safeguard
whistleblowers against retaliation for the disclosure of governmental
wrongdoing,” and dismissed Aviles’s claim because he only alleged “tax fraud
by a private entity.” Importantly, the ALJ relied in part on the Federal
Circuit’s decision in Willis v. Department of Agriculture, 141 F.3d 1139 (Fed.
Cir. 1998) in making this ruling. The ALJ noted that “[a]llegations that
particular government officials allowed or facilitated wrongful conduct by a
private organization” may be protected. But the ALJ found that Aviles’s “vague
1 The Office of Special Counsel receives and investigates allegations of prohibited
personnel practices and disclosures of “violations of any law, rule, or regulation, or gross
mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific
danger to public health or safety.” 5 U.S.C. § 1212(a)(2)–(3). Indeed, before filing an
individual-right-of-action complaint, a federal employee must first present her allegations to
the OSC. See 5 U.S.C. § 1214(a)(3).
4
Case: 14-60645 Document: 00513166776 Page: 5 Date Filed: 08/24/2015
No. 14-60645
and speculative assertion of possible unspecified ‘involvement’ by unidentified
agency officials in alleged private misconduct by a taxpayer does not constitute
a nonfrivolous allegation of whistleblowing activity.” Accordingly, the ALJ
dismissed Aviles’s claim for lack of jurisdiction, and the MSPB affirmed 2–1
over a dissent in a short, nonprecedential final order.
2. The Dissent
Vice Chairman Wagner dissented, and Aviles’s petition for review to this
Court echoes many of the points raised in the dissent. Vice Chairman Wagner
concluded that, in enacting the WPEA in 2012, “Congress contemplated that
its protection would extend to disclosures of wrongdoing by private entities
made by federal employees in the normal course of duties.” She argued that
this conclusion follows from the text of § 2302(f), through which Congress
“made clear that the statutory definition of a ‘protected disclosure’ includes
disclosures made by a federal employee in the normal course of duties.” She
bolstered her argument by relying on the legislative history, which she claims
evinces Congress’s intent in part to “overturn the . . . Federal Circuit’s decision
in Willis,” a decision that, as noted, the ALJ relied on.
***
Aviles timely petitioned for review of the MSPB’s decision directly to this
Court.
II. JURISDICTION AND STANDARD OF REVIEW
As noted above, the Federal Circuit previously had exclusive jurisdiction
to hear petitions for review of MSPB decisions. See Williams v. Wynne, 533
F.3d 360, 373 n.12 (5th Cir. 2008) (citing a previous version of 5 U.S.C.
§ 7703(b)(1) (2006)). 2 In 2012, Congress extended jurisdiction to all U.S. Courts
2 Federal district courts have had jurisdiction to review so-called “mixed cases”
involving claims of discrimination and also federal whistleblower-retaliation claims, and the
Fifth Circuit has appellate jurisdiction in these cases. E.g., Williams, 533 F.3d at 373 n.12.
5
Case: 14-60645 Document: 00513166776 Page: 6 Date Filed: 08/24/2015
No. 14-60645
of Appeals when it passed the Whistleblower Protection Enhancement Act of
2012 (WPEA), Pub. L. No. 112-199, § 108(a), 126 Stat. 1468 (codified as
amended at 5 U.S.C. § 7703(b)(1)). Now, we have jurisdiction to review a final
order or decision from the MSPB under 5 U.S.C. § 7703(b)(1)(B).
Ordinarily, we review the merits of whistleblower-retaliation claims
presented to the MSPB based solely on the administrative record “and will
uphold the Merit Systems Protection Board’s determinations unless they are
clearly arbitrary and capricious, unsupported by substantial evidence or
otherwise not in accordance with law.” Williams, 533 F.3d at 373. But this
Court has not yet had an opportunity to review a threshold jurisdictional
determination.
Since this Court has not previously regularly reviewed MSPB decisions,
we look to the Federal Circuit for guidance. The Federal Circuit reviews de
novo the question whether the MSPB had jurisdiction to adjudicate a case,
reasoning that “[w]hether jurisdiction exists is a question of law.” Waldau v.
Merit Sys. Prot. Bd., 19 F.3d 1395, 1398 (Fed. Cir. 1994). 3
However, the Federal Circuit’s approach to MSPB jurisdictional
determinations may have been called into question by the Supreme Court’s
recent decision in City of Arlington, Texas v. FCC, 133 S. Ct. 1863 (2013). The
Court explained that “the distinction between ‘jurisdictional’ and
‘nonjurisdictional’ interpretations is a mirage,” id. at 1868, and it held that
“Chevron [deference] applies to cases in which an agency adopts a construction
of a jurisdictional provision of a statute it administers,” id. at 1871. No party
addressed this issue in their appellate briefs.
Indeed, “a court decides de novo whether an agency has acted within the bounds of
3
congressionally delegated authority.” Harry T. Edwards et al., Federal Standards of Review:
Review of District Court Decisions and Agency Actions ch. XIII(A) (2013).
6
Case: 14-60645 Document: 00513166776 Page: 7 Date Filed: 08/24/2015
No. 14-60645
In light of City of Arlington, we assume without deciding that de novo
review applies, consistent with the Federal Circuit’s practice; as explained
below, we would deny the petition under either standard.
III. LEGAL STANDARD
There is an initial dispute about the petitioner’s burden to establish
threshold jurisdiction. To establish MSPB jurisdiction over an IRA appeal, the
burden is on the petitioner, and the petitioner “must make nonfrivolous
allegations . . . with regard to the substantive jurisdictional elements
applicable to the particular type of appeal he or she has initiated.” 5 C.F.R.
§ 1201.57(b); accord Kahn v. Dep’t of Justice, 528 F.3d 1336, 1341 (Fed. Cir.
2008). Federal regulations define “nonfrivolous allegation” in this context to
mean: “[A]n assertion that, if proven, could establish the matter at issue.” 5
C.F.R. § 1201.4(s). The regulations elaborate:
An allegation generally will be considered nonfrivolous when,
under oath or penalty of perjury, an individual makes an
allegation that:
(1) Is more than conclusory;
(2) Is plausible on its face; and
(3) Is material to the legal issues in the appeal.
Id.
Intervenor the Department of the Treasury (“Treasury”) contends that
“the appellant bears the burden to establish jurisdiction by a preponderance of
the evidence,” citing 5 C.F.R. § 1201.56 (emphasis added). Petitioner Aviles
disagrees. Aviles relies on the Federal Circuit’s decision in Garcia v.
Department of Homeland Security, in which the en banc court explained:
Section 1201.56 of the regulations, placing the burden of proof on
the employee with respect to “jurisdictional issues,” is plainly not
concerned with the first issue of technical jurisdiction (the need for
a non-frivolous allegation), but rather with the second issue
(concerning the ultimate merits). It places the burden of proof on
7
Case: 14-60645 Document: 00513166776 Page: 8 Date Filed: 08/24/2015
No. 14-60645
the employee at a merits hearing with respect to merits issues that
are also jurisdictional issues. Thus, although the regulation
characterizes the issues with which it is concerned as
“jurisdictional” in nature, the regulation is directed, in fact, to the
allocation of the burden of proof on the merits.
437 F.3d 1322, 1333–34 (Fed. Cir. 2006) (en banc) (emphasis added) (quoting
Walley v. Dep’t of Veterans Affairs, 279 F.3d 1010, 1019 (Fed Cir. 2002)).
We agree with Aviles’s interpretation of Garcia, which we follow as
persuasive, and we conclude that Aviles need not establish jurisdiction by a
preponderance of the evidence. As Garcia makes clear, section 1201.56’s
preponderance-of-the-evidence standard applies only to the merits of
“constructive adverse action cases” under 5 U.S.C. § 7512, and it does not apply
to the threshold jurisdictional determination in Whistleblower Protection Act
cases. See 437 F.3d at 1325.
We also conclude that the standard for determining whether
nonfrivolous allegations are sufficient to meet the threshold jurisdictional
requirement for an IRA appeal is analogous to that which we use for evaluating
a motion to dismiss. 4 Accordingly, we accept all well-pleaded facts as true and
view those facts in the light most favorable to the petitioner. See Whitley v.
Hanna, 726 F.3d 631, 637 (5th Cir. 2013), cert. denied, 134 S. Ct. 1935 (2014).
4 We note that this approach conflicts with the approach of the Federal Circuit: “The
standard for determining whether non-frivolous disclosures exist is analogous to that for
summary judgment.” Kahn, 528 F.3d at 1341 (emphasis added) (internal quotation marks
omitted); see also Dorrall v. Dep’t of the Army, 301 F.3d 1375, 1380 (Fed. Cir. 2002), overruled
on other grounds by Garcia, 437 F.3d 1322 (“[T]he Board may properly consider the
government’s evidence as well as the employee’s in deciding the threshold question of
jurisdiction. . . . [I]n this context, the petitioner must show the existence of a material fact
issue as to voluntariness to support Board jurisdiction.”).
But because the applicable federal regulations closely track our motion-to-dismiss
standard—not our summary judgment standard—we decline to follow the Federal Circuit’s
approach. Compare 5 C.F.R. § 1201.4(s) (providing that a nonfrivolous allegation is a non-
conclusory allegation that “[i]s plausible on its face”), with Amacker v. Renaissance Asset
Mgmt. LLC, 657 F.3d 252, 254 (5th Cir. 2011) (explaining that, to survive a motion to dismiss,
the factual allegations taken as true must “state a claim that is plausible on its face”).
8
Case: 14-60645 Document: 00513166776 Page: 9 Date Filed: 08/24/2015
No. 14-60645
The facts taken as true must, however, “state a claim that is plausible on its
face.” Amacker v. Renaissance Asset Mgmt. LLC, 657 F.3d 252, 254 (5th Cir.
2011). “A claim has facial plausibility when the [petitioner] pleads factual
content that allows the court to draw the reasonable inference that the
[employer] is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). An IRA complaint is insufficient “if it offers only ‘labels and
conclusions,’ or ‘a formulaic recitation of the elements of a cause of action.’” Id.
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
IV. DISCUSSION
Aviles argues (a) that Congress’s recent amendment of the
Whistleblower Protection Act expanded the scope of protected disclosures to
include disclosures of purely private wrongdoing and (b) that even if only
disclosures of government misconduct are protected, he non-frivolously alleged
that IRS officials were complicit in Exxon’s alleged tax fraud. We address each
argument in turn.
A. Reports of Purely Private Wrongdoing as Protected Disclosures
Aviles’s argument raises an initial issue of statutory interpretation of 5
U.S.C. § 2302. As amended, 5 U.S.C. § 2302(b)(8) prohibits adverse personnel
actions based on:
(A) any disclosure of information by an employee or applicant
which the employee or applicant reasonably believes evidences—
(i) any violation of any law, rule, or regulation, or
(ii) gross mismanagement, a gross waste of funds, an abuse
of authority, or a substantial and specific danger to public
health or safety . . . .
Through the WPEA, Congress added subsection 2302(f)(2), which provides: “If
a disclosure is made during the normal course of duties of an employee, the
disclosure shall not be excluded from subsection (b)(8) . . . .” § 101, 126 Stat. at
9
Case: 14-60645 Document: 00513166776 Page: 10 Date Filed: 08/24/2015
No. 14-60645
1465–66. The dissenting Vice Chairman reasoned from this addition that, “as
a matter of plain logic,” “when the federal employee’s normal course of duties
includes regulating, monitoring, or investigating private entities, a disclosure
about alleged wrongdoing by the private entity falls squarely within the
WPEA’s coverage.”
Aviles relies on Vice Chairman Wagner’s dissent from the Board’s
decision 5 and argues that Congress extended whistleblower protection through
the WPEA to include disclosures of “wrongdoing by private entities made by
federal employees.” Specifically, Aviles points to the Senate Committee Report
for the 2012 amendment, which states that subsection 2302(f)(2) “overturns . . .
court decisions that narrowed the scope of protected disclosures,” including
Willis v. Department of Agriculture, 141 F.3d 1139 (Fed Cir. 1998), a decision
the Board relied on. S. Rep. No. 112-155, at 5 (2012). Accordingly, Aviles argues
that his disclosure that Exxon “inflated its foreign income sales and
fraudulently added supplemental tax data in order to reduce its overall tax
liability by over $500 million” was protected, and that he was “subjected to
numerous [adverse] personnel actions, including . . . ultimately removal” as a
result of his protected disclosure.
The Treasury Department counters that the “plain language of section
2302(b)(8) . . . requires that a disclosure must evidence Government
misconduct to be eligible for whistleblower protection.” Treasury interprets the
legislative history of the 2012 amendments differently from Aviles and the
dissent. Although the WPEA did seek to overturn several Federal Circuit
decisions that had narrowed the scope of protected disclosures, Treasury
argues that Congress’s decision to overturn these decisions did not silently
extend whistleblower protection to claims involving purely private conduct.
5 See supra Part I(B)(2).
10
Case: 14-60645 Document: 00513166776 Page: 11 Date Filed: 08/24/2015
No. 14-60645
Rather, Treasury concludes that the legislative history and statutory text
reflect “Congress’s intention to protect disclosures of Government misconduct.”
The MSPB largely echoes these points, but also adds that, “because § 2302(f)(2)
is silent on the issue of whether private misconduct . . . constitutes a basis for
a protected disclosure, this Court should defer to the Board’s reasonable
interpretation of the statute” under the Chevron doctrine.
We agree with Treasury and the MSPB that Congress did not intend to
protect disclosures of purely private wrongdoing when it enacted the WPEA.
Applying traditional principles of statutory interpretation—without deciding
what deference, if any, should be afforded the Board’s unpublished 6
interpretation of the amended statute—we reject Aviles’s interpretation of the
statute to include purely private wrongdoing. 7 The text indicates that the focus
of the statute is government wrongdoing. See § 2302(b)(8) (protecting
disclosures of, inter alia, “gross mismanagement, a gross waste of funds, [or]
an abuse of authority”). Nothing in the text of the WPEA purports to extend
subsection (b)(8) to extra categories of disclosures; the language simply
clarifies that otherwise-covered disclosures are not excluded merely because
they are made during an employee’s normal duties. See § 2302(f)(2) (“If a
disclosure is made during the normal course of duties of an employee, the
disclosure shall not be excluded from subsection (b)(8) . . . .” (emphasis added)).
Aviles’s proposed interpretation is also at odds with common sense and
principles of statutory interpretation. His interpretation could turn every
enforcement disagreement between a subordinate and a supervisor at the IRS,
6 MSPB adjudications resolved by a “nonprecedential Order” “are not binding on the
Board or its administrative judges in any future appeals except when it is determined they
have a preclusive effect on parties under the doctrines of res judicata (claim preclusion),
collateral estoppel (issue preclusion), judicial estoppel, or law of the case.” 5 C.F.R.
§ 1201.117(c)(2). In contrast, “[a]n Opinion and Order is a precedential decision of the Board
and may be appropriately cited or referred to by any party.” Id. § 1201.117(c)(1).
7 We assume, without deciding, that de novo review applies.
11
Case: 14-60645 Document: 00513166776 Page: 12 Date Filed: 08/24/2015
No. 14-60645
FBI, Department of Justice, or other federal agency into a potential protected
disclosure and an eventual whistleblower claim down the road. After all, many
federal agency employees make enforcement decisions concerning private
persons “during the normal course of [their] duties,” id., on a day-to-day basis
in dialogue with their supervisors. If Congress intended such a significant
intrusion into the settled law governing federal employment relationships, we
believe it would have spoken more clearly. This comports with principles of
statutory interpretation. See Barbee v. United States, 392 F.2d 532, 535 n.4
(5th Cir. 1968) (“A change of phraseology in a revision will not be regarded as
altering the law where it had been settled by plain language in the statutes, or
by judicial construction thereof, unless it is clear that such was the intent.”
(quoting McDonald v. Hovey, 110 U.S. 619, 629 (1884))); cf. Antonin Scalia &
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 318–19
(2012) (“The better view is that statutes will not be interpreted as changing
the common law unless they effect the change with clarity.”).
Because we conclude that the text of the amended statute after
application of ordinary principles of statutory interpretation supports the
Board’s interpretation, we need not and do not rely on the legislative history.
See Carrieri v. Jobs.com Inc., 393 F.3d 508, 518–19 (5th Cir. 2004) (citing
United States v. Kay, 359 F.3d 738, 743 (5th Cir. 2004)). 8
Aviles’s legislative-history argument is also unavailing because it is
contrary to the text of the amendment. Aviles points to a Senate committee
report and contends that the report is evidence that the WPEA overturns the
Federal Circuit’s decision in Willis, an opinion that the administrative judge
8 Although our interpretation follows from the text applying ordinary principles of
statutory interpretation, we express no view on whether the text is “unambiguous” and “thus
leaves no room for agency discretion” within the meaning of the Supreme Court’s decision in
National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S.
967, 982 (2005).
12
Case: 14-60645 Document: 00513166776 Page: 13 Date Filed: 08/24/2015
No. 14-60645
expressly relied on. 9 Aviles proposes that, therefore, by overturning Willis,
Congress extended protection to disclosures of purely private wrongdoing. The
disclosure in Willis did concern private wrongdoing: the petitioner complained
about his supervisors’ decision “reversing [his] determination that the [private]
farms failed to comply with USDA conservation plans,” 141 F.3d at 1141, and
the court held that his disclosures to his immediate supervisors were not
protected, id. at 1143.
But the text of the WPEA does not mention disclosures of purely private
wrongdoing; if anything, the text added by the amendment reflects Congress’s
concern that language in the Willis decision could be interpreted as
categorically excluding otherwise-protected disclosures from protection if those
disclosures are made in the ordinary course of a federal employee’s job duties.
See § 2302(f)(2). In rejecting the petitioner’s proposed blanket rule in Willis
that the WPA entitled federal employees “to assert that the required
performance of their day-to-day responsibilities” per se “constitute[s] a
protected disclosure,” the Federal Circuit suggested that disclosures in the
normal course of duties are not protected, see id. at 1144. The text added by
the WPEA provides that “a disclosure . . . made during the normal course of
duties of an employee . . . shall not be excluded from [protection under]
subsection (b)(8)” solely for that reason, § 2302(f)(2) (emphasis added), and says
nothing about private malfeasance. Thus, Aviles’s argument is unavailing
because it does not find support in the text of the amendment.
Therefore, we agree with the Board’s conclusion that allegations of
purely private wrongdoing are not protected disclosures under 5 U.S.C.
§ 2302(b)(8).
See S. Rep. No. 112-155, at 5 & n.13 (“Section 101 of S. 743 overturns . . . Willis v.
9
Department of Agriculture, [in which] the court stated that a disclosure made as part of an
employee’s normal job duties is not protected.”).
13
Case: 14-60645 Document: 00513166776 Page: 14 Date Filed: 08/24/2015
No. 14-60645
B. Aviles’s Allegations that He Engaged in a Protected Disclosure
The remaining issue in this appeal is whether Aviles “nonfrivolously”
alleged a protected disclosure within the meaning of § 2302(b)(8). As discussed
above, allegations of purely private wrongdoing are not protected under the
WPA as amended by the WPEA. But if the disclosure includes allegations of
government complicity in the private wrongdoing, then the disclosure may be
protected. Thus, the question is whether Aviles nonfrivolously alleged that IRS
officials were complicit in Exxon’s alleged tax fraud.
The Ninth Circuit’s decision in Coons v. Secretary of the U.S. Department
of the Treasury is instructive. 383 F.3d 879 (9th Cir. 2004). There, Coons
argued he was demoted in retaliation for making protected disclosures—
namely, that undisclosed IRS agents illegally shared confidential information
with a taxpayer’s lawyer and that IRS agents knowingly manually processed
a large fraudulent refund for that taxpayer. Id. at 888–90. The Ninth Circuit
reversed the Board’s decision dismissing Coons’s whistleblower claim. Id. at
891. It held that Coons’s claim that IRS officials, “whose mission is to collect
taxes, improperly processed a large, fraudulent refund for a wealthy taxpayer
is an allegation of ‘gross mismanagement, a gross waste of funds, [or] an abuse
of authority.’” Id. (alteration in original) (quoting § 2302(b)(8)).
Aviles argues that he nonfrivolously alleged that his supervisors
“allowed or facilitated wrongful conduct by a private organization,” Exxon. In
response to the Board’s conclusion that his allegations were too “vague and
conclusory” and lacking in the requisite specificity to be deemed “nonfrivolous,”
Aviles argues that he alleged that his supervisors “ignored his disclosures of
Exxon’s alleged tax fraud” and “directed him not to divulge Exxon’s actions.”
Aviles also points to his allegation that “the [IRS management] team covered
up the fraud.” Aviles’s argument relies heavily on the Ninth Circuit’s decision
in Coons. In reply, Aviles also points to a precedential decision from the MSPB,
14
Case: 14-60645 Document: 00513166776 Page: 15 Date Filed: 08/24/2015
No. 14-60645
Rumsey v. Department of Justice, 120 M.S.P.R. 259 (2013), and argues that the
allegations in Rumsey “are almost identical to” his, in that “the appellant in
Rumsey . . . [alleged] fraudulent submittals by the state of Wisconsin, [and]
that ‘[Justice Department] officials were covering it up.’”
The MSPB and Treasury counter that the Board correctly concluded that
Aviles’s “generalized assertions” of government involvement in Exxon’s fraud
“do not constitute a non-frivolous allegation of a protected disclosure.” They
point out that the petitioner’s allegations in Coons “were detailed and specific,
including: that a former Regional Counsel for the IRS was using his influence
to corrupt the IRS’s collection of taxes from a taxpayer,” and that Aviles’s
“vague allegations of a ‘cover up’” without more “do not rise to this level.”
Treasury adds that, “even after the administrative judge gave Mr. Aviles
multiple opportunities to explain his disclosure [that the IRS management
team helped to cover up Exxon’s alleged tax fraud] in further detail, Mr. Aviles
failed to do so.”
We agree with the Board’s decision dismissing Aviles’s appeal and deny
Aviles’s petition for review. Unlike Aviles’s vague and conclusory allegations
of a “cover up,” the allegations in the Coons case specifically implicated
particular government officials. The Ninth Circuit noted that the petitioner’s
disclosures included his “concern that [a taxpayer’s] attorney was using his
influence [as a former Regional Counsel for the IRS] to corrupt the IRS’s
collection of taxes” from that taxpayer, and that “current IRS staff were
sharing information illegally” with that taxpayer’s attorney. 383 F.3d at 889.
The petitioner in Coons also disclosed that IRS officials “improperly processed
a large, fraudulent refund for a wealthy taxpayer.” Id. at 890. In contrast, here,
Aviles made no specific allegations of wrongdoing by government officials.
Even on appeal, Aviles does not explain in his brief to this Court the necessary
“who, what, when, where, and how” of government involvement in the alleged
15
Case: 14-60645 Document: 00513166776 Page: 16 Date Filed: 08/24/2015
No. 14-60645
cover-up of Exxon’s tax fraud. See United States ex rel. Willard v. Humana
Health Plan of Tex. Inc., 336 F.3d 375, 387–88 (5th Cir. 2003) (affirming denial
of leave to amend a complaint in part because “there is no indication in
Willard’s briefs to this court that he will be able to allege the necessary ‘who,
what, when, where, and how’ of the alleged fraud”). We also note that the ALJ
gave Aviles multiple opportunities to amend his IRA complaint and provide
additional factual content before finally dismissing his administrative appeal.
See Foman v. Davis, 371 U.S. 178, 182 (1962) (noting that “repeated failure to
cure deficiencies [in a complaint] by amendments previously allowed” may be
grounds for dismissal).
Aviles’s reliance on the Board’s precedential decision in Rumsey is
misplaced, and the distinctions between this case and Rumsey illustrate why
Aviles’s appeal was properly dismissed by the Board. Aviles takes one
statement from the Rumsey opinion—the petitioner’s allegation that “the state
of Wisconsin submitted fraudulent data . . . and agency managers were covering
it up,” 120 M.S.P.R. at 270 (emphasis added)—out of context. This allegation
alone would be insufficient to establish the Board’s jurisdiction; in Rumsey,
there was significant additional evidence of federal government wrongdoing
from congressional oversight hearings and news coverage, including that the
agency administrator had “awarded grants” for juvenile justice and
delinquency prevention to “lower-scoring organizations” despite the
administrator’s staff’s recommendations to the contrary. Id. at 264. Indeed, the
ALJ in that case denied the petition on the merits, finding that the petitioner’s
“disclosures to ABC News and Congress were not protected because . . . [that]
information . . . was already publicly known” and because those disclosures
16
Case: 14-60645 Document: 00513166776 Page: 17 Date Filed: 08/24/2015
No. 14-60645
“occurred in the normal course of the performance of her duties” 10—not because
there were no allegations or evidence of government wrongdoing. Id. at 265,
270.
Therefore, we agree with the Board’s decision that Aviles failed to
nonfrivolously allege that his disclosures were protected, and Aviles’s petition
for review is denied.
C. Aviles’s Remaining Argument
Aviles also argues he is entitled to relief under a separate provision of
the WPA, 5 U.S.C. § 2302(b)(9), and he asks for remand to the MSPB for it to
consider this claim. Subsection 2302(b)(9) prohibits an adverse personnel
action “because of,” inter alia, “the exercise of any appeal, complaint, or
grievance right granted by any law, rule or regulation,” including for a
whistleblower action for violation of the WPA. As Treasury and the MSPB
point out, Aviles failed to exhaust this claim by first presenting it to the OSC
before filing his IRA with the MSPB. See 5 U.S.C. § 1214(a)(3). 11 Therefore,
this claim is unexhausted, and we cannot consider it.
V. CONCLUSION
For the foregoing reasons, Aviles’s petition for review is DENIED.
10 Ultimately, the Board reversed the ALJ’s initial decision in Rumsey in light of the
2012 WPEA amendments, specifically § 2302(f), concluding that the ALJ’s finding was “no
longer correct” under the amendments based on the new “during the normal course of duties”
language in § 2302(f). 120 M.S.P.R. at 270.
11 We note that the OSC right-to-appeal letter is consistent with Aviles’s actual
administrative complaint to the OSC in which he was asked to “describe [his] complaint in
detail.”
17