Tunik v. Merit Systems Protection Board

SCHALL, Circuit Judge,

dissenting.

The court’s opinion represents a thorough analysis of the issues in this case. However, I am unable to agree with the majority that the Merit Systems Protection Board (“Board”) may not, by adjudication, overrule In re Doyle, 29 M.S.P.R. 170 (1985), and declare invalid 5 C.F.R. § 1201.142, the regulation embodying the holding of Doyle. As explained below, in my view Doyle and the attendant regulation are contrary to 5 U.S.C. § 7521 (2000). For that reason, assuming the exceptions of 5 U.S.C. § 553 do not apply, I still do not think that we should reverse the decision of the Board on the ground that the Board failed to go through an Administrative Procedure Act (“APA”) notice-and-comment rule-making process to formally repeal the regulation. Accordingly, I would affirm the decision of the Board. I therefore respectfully dissent.

I.

In accordance with 5 U.S.C. § 7521, an agency may take certain “actions” against an administrative law judge (“ALJ”) “only for good cause established and determined by the [Board] on the record after opportunity for hearing before the Board.” 5 U.S.C. § 7521(a). The statute goes on to state:

The actions covered by this section are—
(1) a removal;
(2) a suspension;
(3) a reduction in grade;
(4) a reduction in pay; and
(5) a furlough of 30 days or less[.]

Id. § 7521(b). In short, under the statute, an employing agency may not remove an ALJ, suspend an ALJ, reduce an ALJ’s grade, reduce an ALJ’s pay, or put an ALJ on a furlough of 30 days or less, without first establishing before the Board good cause for the action.

In Doyle, the Board addressed, the- issue of whether it had jurisdiction over a claim of constructive removal under section 7521 even though the statute refers simply to *1347“removal.” The case arose from, among other things, Judge Doyle’s allegation that his employing agency, the Department of Health and Human Services (“HHS”), constructively removed him from his position as an ALJ when it refused to approve his $350 travel voucher. Doyle, 29 M.S.P.R. at 171-72. The Board noted that while “constructive removal” was not one of the actions expressly covered by section 7521, “removal” had consistently been interpreted so as to protect ALJs from agency actions that might impair the ALJ’s “qualified judicial independence.” Id. at 174. More particularly, the Board viewed our predecessor court’s decision in Benton v. United States, 203 Ct.Cl. 263, 488 F.2d 1017 (1973), as support for the proposition that section 7521 applies to both direct and indirect actions that undermine an ALJ’s qualified judicial independence:

Consistent with the court’s position in Benton, the Board also recognizes the possibility of an agency’s constructively removing an administrative law judge by cumulative administrative actions or active intervention in a manner calculated to prevent the impartial exercise of his judicial functions.... Whether the Board takes jurisdiction over an action as a “constructive removal” within section 7521 depends on the sufficiency of the allegations in showing that the challenged action has a pernicious effect on the complaining judge’s qualified independence.

Doyle, 29 M.S.P.R. at 175. Under this standard, the Board ultimately concluded that Judge Doyle, who remained employed as an ALJ with HHS, had not presented allegations sufficient to invoke the Board’s jurisdiction. It therefore dismissed his complaint. Id.

II.

Until its decision in Tunik v. Social Security Administration, 93 M.S.P.R. 482 (2003), the Board continued to apply the Doyle standard to constructive removal claims brought under 5 U.S.C. § 7521. See, e.g., White v. Soc. Sec. Admin., 76 M.S.P.R. 447, 453 n. 3 (1997); Bennett v. Soc. Sec. Admin., 72 M.S.P.R. 116, 119-20 (1996); Lawson v. Dep’t of Health & Human Servs., 64 M.S.P.R. 673, 678 (1994). In addition, the Board promulgated a regulation, 5 C.F.R. § 1201.142, embodying the holding in Doyle. The regulation provides:

An [ALJ] who alleges that an agency has interfered with the judge’s qualified decisional independence ■ so as to constitute an unauthorized action under 5 U.S.C. [§ ] 7521 may file a complaint with the Board under this subpart.

5 C.F.R. § 1201.142 (2003).

In Tunik, the Board reconsidered the issue and concluded that its holding in Doyle was inconsistent with section 7521. In' particular, the Board concluded that section 7521 conferred jurisdiction over constructive removal claims only if the ALJ first showed actual separation from his ALJ position with the agency. Tunik, 93 M.S.P.R. at 493. Separation, the Board held, coujd be established by showing that the agency separated or reassigned the ALJ from his position as an ALJ or by showing that the decision of the ALJ to leave his position was involuntary. Id. The Board determined that, under this standard, it lacked jurisdiction over Judge Tunik’s constructive removal claim because he remained in his position as an ALJ with the ' Social Security Administration (“SSA”). Id.

The Board recognized that its decision required overturning Doyle and invalidating 5 C.F.R. § 1201.142, but it concluded that such action was justified because Doyle was not consistent with 5 U.S.C. § 7521. In reaching this conclusion, the *1348Board first noted that Congress used almost identical language in listing covered actions under 5 U.S.C. § 7521 and 5 U.S.C. § 7512 (2000).1 Tunik, 93 M.S.P.R. at 486. In that regard, the Board pointed out that in Butler v. Social Security Administration, 331 F.3d 1368 (Fed.Cir.2003), this court held that “section 7521 must be construed consistently with its sister provision, section 7512,” which has been interpreted to require actual separation. Tunik, 93 M.S.P.R. at 486-87 (quoting Butler, 331 F.3d at 1372). The Board stated that its conclusion was also consistent with the ordinary meaning of “removal” — “to be separated from one’s position of record or not to have a continuing appointment to that position.” Id. at 487.

The Board also determined that Doyle’s reliance on Benton v. United States, 203 Ct.Cl. 263, 488 F.2d 1017 (1973), was misplaced. That was because, the Board said, Benton did not involve a situation where the ALJ filed a constructive removal claim yet retained his position as an ALJ. Rather, the case involved a constructive removal claim based on an allegation of involuntary retirement, an allegation over which the Board would also have jurisdiction under section 7512 (if brought by a qualifying “employee”). Tunik, 93 M.S.P.R. at 488. The Board further determined that the legislative history discussed in Benton, relating to section 11 of the APA, indicated that Congress intended “removal” to mean “separation.” Id. at 489.2 Further, the Board noted that Benton also relied on a CSC regulation which defined “removal” as “an involuntary change in the status of an [ALJ], including discharge, demotion, and suspension from the position of [ALJ] and demotion, reassignment, and promotion, to a position other than that of [ALJ].” Id. (quoting 5 C.F.R. § 930.202(f) (1973)). In short, the Board determined that the Benton decision was really concerned about the procedures that must be followed before separating an individual from his or her position as an ALJ. Id. Accordingly, the Board held that its decision in Doyle “went beyond the Benton decision, the legislative history [of the APA], and the CSC regulations to create a class of appealable ‘removal’ actions which have nothing to do with being separated from the position of ALJ.” Id.

The Board also determined that Doyle was inconsistent with 5 C.F.R. § 930.202(f) (2003), a regulation of the Office of Personnel Management (“OPM”) implementing section 7521. The regulation defines “removal” as the “discharge of an [ALJ] from the position of [ALJ] or involuntary reassignment, demotion, or promotion to a position other than that of [ALJ].” 5 C.F.R. § 930.202(f). Therefore, the Board concluded, “[i]f we continue to adhere to the Doyle theory of constructive removal, we would effectively be invalidating the OPM regulations which implemented section 7521.” Id.

Finally, the Board concluded that our decision in Sannier v. Merit Systems Pro*1349tection Board, 931 F.2d 856 (Fed.Cir.1991), was not a bar to its decision to overrule Doyle. First, the Board stated that it was free to address issues involving its own jurisdiction. Tunik, 93 M.S.P.R. at 490. Second, the Board noted that, in recognizing the existence of constructive removal claims, Sannier relied on Schultz v. United States Navy, 810 F.2d 1133, 1136 (Fed.Cir.1987), a case involving a claim of involuntary resignation under section 7512. Tunik, 93 M.S.P.R. at 491. This, the Board stated, indicated that constructive removal claims involving ALJs require actual separation. Id. Third, the Board determined that in Sannier we merely “recognized” the Doyle theory of jurisdiction over constructive removal claims. Id. We did not, according to the Board, “necessarily endorse” the concept created in Doyle. Id. The Board concluded that, under such circumstances, our decision in Watson v. Department of the Navy, 262 F.3d 1292 (Fed.Cir.2001), allowed it to reconsider and overrule its earlier decision and to invalidate the regulation. Tunik, 93 M.S.P.R. at 491-92.

III.

The majority holds that, under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Board’s interpretation of “removal” to require actual separation is consistent with 5 U.S.C. § 7521 because the statute is ambiguous and the Board’s interpretation is reasonable.3 The majority states that our decisions in Sannier and in Stephens v. Merit Systems Protection Board, 986 F.2d 493 (Fed.Cir.1993), ordinarily would not bar the Board from overruling its prior interpretation because those two cases were decided based on Chevron deference to the Board’s decision in Doyle. In this case, however, the majority holds that the process for overturning Doyle, which the majority states represented a reasonable interpretation of the statute, supra at 1337, is ■ complicated by the Board’s regulation codifying Doyle at 5 C.F.R. § 1201.142. Specifically, the majority states, and I agree, that the APA does not generally permit an agency to repeal a regulation without following the Act’s notiee-and-comment process.

The majority,- I think, acknowledges, and I agree, that there are situations in which an agency’s action invalidating a regulation . it determines is contrary to statute, without notice and comment, will be excused. See supra Part II.B.3, citing Am. Tel. & Tel. Co. v. Fed. Communications Comm’n, 978 F.2d 727, 733 (D.C.Cir.1992). However, the majority concludes that that proposition does not apply in this case because our intervening decisions in Sannier and Stephens recognized the Doyle theory, and therefore 5 C.F.R. § 1201.142, as a reasonable interpretation of section 7521. Thus, the majority concludes, the Board’s decision invalidating 5 C.F.R. § 1201.142 without following the notice-and-comment process of the APA must be reversed. It is this aspect of the majority opinion with which I disagree.

IV.

I start from the premise that an agency may not promulgate a regulation that is contrary to statute. See United States v. Mead Corp., 533 U.S. 218, 227, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001); Chevron, 467 U.S. at 842-45, 104 S.Ct. 2778. And, in this case, I think the Board correctly determined that 5 C.F.R. § 1201.142 is contrary to the plain language of 5 U.S.C. § 7521. Additionally, I do not think this court ever determined that Doyle was a *1350reasonable interpretation of section 7521. Therefore, I am unable to agree with the majority that the Board’s failure to issue notice and comment before overruling Doyle and invalidating 5 C.F.R. § 1201.142 requires reversal.

Turning first to the language of the statute, I think the ordinary meaning of “removal” entails “separation” from one’s current position of employment. Benton, 488 F.2d at 1020 (“In the ordinary sense, the word ‘removal’ denotes an involuntary separation of the employee from his position.”); Black’s Law Dictionary 1322 (8th ed. 2004) (“The transfer or moving of a person or thing from one location, position, or residence to another.”). In addition, Congress chose to define covered actions under 5 U.S.C. § 7521 with language almost identical to that used in 5 U.S.C. § 7512, which pertains to action taken against certain federal “employees”:

This subchapter applies to—
(1) a removal;
(2) a suspension for more than 14 days;
(3) a reduction in grade;
(4) a reduction in pay; and
(5) a furlough of 30 days or less[.]

Consequently, we have held that the similarity of the two statutes dictates that they be construed in the same manner. Butler, 331 F.3d at 1372 (“We conclude that section 7521 must be construed consistently with its sister provision, section 7512.”). Moreover, while we have recognized constructive removal claims under section 7512, we, and the Board, have only done so where the employee shows actual separation from the agency. See, e.g., Shoaf v. Dep’t of Agric., 260 F.3d 1336, 1341 (Fed.Cir.2001) (“The [Board] possesses jurisdiction over an appeal filed by an employee who has resigned or retired if the employee proves, by a preponderance of the evidence, that his or her resignation or retirement was involuntary and thus tantamount to forced removal. That is, an involuntary resignation constitutes a constructive removal that is appealable to the [Board].” (citation omitted)); Gutierrez v. United States Postal Serv., 90 M.S.P.R. 604, 607 (2002) (“An employee-initiated action such as a resignation or a retirement is not appealable to the Board unless the appellant proves that it was involuntary and thus constituted a constructive removal.”). Accordingly, I think Doyle was wrong in suggesting that the Board could have jurisdiction over constructive removal claims where the ALJ was not separated from the agency.4

I think the Board’s principal error in Doyle was its misplaced reliance on Benton. The Board initially cited Benton as support for the proposition that, although not expressly recognized in 5 U.S.C. § 7521, the Board has jurisdiction over constructive removal claims. Doyle, 29 M.S.P.R. at 174. I agree with this statement of the law. See Benton, 488 F.2d at 1022. However, the Board subsequently proceeded to create a new standard for establishing a constructive removal claim, a standard that did not require removal. The Board further stated that this new standard was “[c]onsistent with the court’s position in Benton.” This, I submit, is simply not correct.

That is because Benton involved a claim of constructive removal based on an allegation of involuntary retirement, i.e., the employee was no longer with the agency. Benton, 488 F.2d at 1019 (stating that the issue before the court was “whether Sec*1351tion 11 of the APA, which requires a hearing[,] as prescribed in that Aet[,] for the removal of a Federal hearing examiner, applies to the [CSC’s] involuntary removal and retirement of a hearing examiner on a disability annuity under , the Civil Service Retirement Act” (footnote and citation omitted)). Furthermore, although recognizing that the CSC had jurisdiction over constructive removal claims, the Court of Claims never suggested that a constructive removal could occur without a showing of actual separation from the agency. On the contrary, the court stated that “[i]n the ordinary sense, the word ‘removed’ denotes an involuntary separation of the employee from his position.” Id. at 1020 (emphases added).

The legislative history of section 11 of the APA, on which the Benton court relied, shows that Congress intended to give hearing examiners (now known as ALJs) protections beyond those afforded other employees. That objective, however, was met by the good cause requirement. Nothing indicates that Congress intended “removal” to mean anything other than “separation.” Indeed, the legislative history states that the CSC “must afford any examiner an opportunity for a hearing before acceding to an agency request for removal ....” S. Doc. No. 248, 79th Cong., 2d Sess. 215 (1946) (emphasis added); see also Benton, 488 F.2d at 1022.

Prudential considerations also favor interpreting “removal” as requiring actual separation from the ALJ position. Otherwise, the employing agency may be hesitant to undertake many day-to-day managerial activities without first obtaining clearance from the Board through the •good-cause procedure set forth at 5 U.S.C. § 7521(a). For example, in this case Judge Tunik alleged constructive removal based on various memoranda circulated between Chief Administrative Law Judges at the SSA. Tunik, 93 M.S.P.R. at 484. One of these memoranda related to a requirement that Judge Tunik receive case-processing training. Id. The majority’s recognition of Doyle as a reasonable, and, for the time being, binding, interpretation of section 7521 may make agencies reluctant to circulate such standard memoranda without first establishing good cause before the Board (and after providing the affected ALJ with an opportunity for a hearing). I find it difficult to believe that Congress had such a cumbersome scheme in mind when it enacted 5 U.S.C. § 7521.

In sum, I think Doyle gave an impermissible meaning to “removal” and to our predecessor court’s decision in Benton. The plain meaning of “removal” requires separation. I thus think the Board correctly determined in Tunik that it lacked jurisdiction in this case. Therefore, the Board’s failure to go through a notice-and-comment. process before invalidating 5 C.F.R. § 1201.142 does not require reversal of the Board’s decision. See Am. Tel. & Tel. Co., 978 F.2d at 733 (“We have never held ... that an agency is obliged to apply a rule in an adjudicatory context if intervening events indicate that the rule is unlawful.”); see also Am. Fed’n of Gov’t Employees v. Fed. Labor Relations Auth., 777 F.2d 751, 760 (D.C.Cir.1985) (Scalia, J., concurring) (“Perhaps there are situations in which wé would be justified in looking beyond the defect of inconsistency [with the APA’s notiee-and-comment procedure], to affirm an adjudication on the ground that its result was mandated by statute and that the conflicting rule was simply unlawful.”). I think that bypassing the procedures of notice and comment is especially justified in this case, where the regulation at issue relates to the Board’s jurisdiction. See New York v. F.E.R.C., 535 U.S. 1, 18, 122 S.Ct. 1012, 152 L.Ed.2d 47 (2002) (“ ‘[A]n agency literally has no power to act ... unless and until Congress *1352confers power upon it.’ ” (citation omitted)).

Sannier and Stephens do not change my conclusion. The majority reasons that Sannier and Stephens recognized the Doyle interpretation as reasonable and, therefore, preclude us from now finding it inconsistent with section 7521. I disagree. In my view, neither Sannier nor Stephens presented us with the question of whether the Doyle interpretation of 5 U.S.C. § 7521 was reasonable. Both cases merely asked us to review the Board’s conclusion that the petitioners had not sufficiently alleged that their' employing agencies had interfered with their qualified judicial independence. More importantly, in both cases we affirmed. Therefore, because the Board lacked jurisdiction in both cases even under the more lenient standard of Doyle, we were not asked to reach the issue of whether the Board had jurisdiction over a constructive removal claim where the ALJ was not actually separated from the agency. See Watson v. Dep’t of the Navy, 262 F.3d 1292, 1301-02 (Fed.Cir.2001) (holding that we were not bound by our prior decision in Bingaman v. Department of the Treasury, 127 F.3d 1431 (Fed.Cir.1997), because that case, while recognizing the Board’s approach, did not actually adopt it).

The majority, on the other hand, contends that “Sannier and Stephens adopted and applied the Board’s Doyle standard.” Supra, at 1335. Admittedly, in both cases we quoted relevant portions from the Doyle holding, but I do not think we ever decided whether the Doyle holding was correct. I would also agree that we applied Doyle to the extent we affirmed the Board’s findings of no jurisdiction based on the fact that the petitioners had not shown interference with their qualified judicial independence. However, because we affirmed a finding of no jurisdiction, the facts of those two eases did not present us with the issue of whether jurisdiction could be established without showing actual separation. In other words, in neither Sannier nor Stephens was it necessary to address the issue of separation given that the petitioners did .not even satisfy the more lenient standard of Doyle. See Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996) (“When an opinion issues for the Court, it is not only the result but also those portions of the opinion necessary to that result by which we are bound.”).

For the foregoing reasons, I do not see reversible error in the Board’s decision overruling its erroneous interpretation in Doyle and invalidating 5 C.F.R. § 1201.142 without following the notice-and-comment process of the APA. I thus would affirm the decision of the Board. I therefore respectfully dissent.

. Section 7512 of title 5 lists the actions that an "employee” of an .agency may appeal to the Board. It states that the covered actions are:

(1) a removal;
(2) a suspension for more than 14 days;
(3) a-reduction in grade;
(4) a reduction in pay; and
(5) a furlough of 30 days or less[.]

5 U.S.C. §7512.

. Specifically, the legislative history cited in Benton states that section 11 of the APA was intended to make hearing examiners " ‘removable only for good cause determined by the Civil Service Commission [CSC], after opportunity for a hearing,’ and that the CSC must 'afford any examiner an opportunity for a hearing before acceding to an agency request for removal.’ Tunik, 93 M.S.P.R. at 489 (quoting Benton, 488 F.2d at 1021-22) (emphases added).

. As indicated in Part IV below, it is my view that the language of section 7521 is clear.

. I say "suggesting" because, in Doyle, the Board ultimately concluded that the ALJ had not alleged a constructive removal claim.