United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 16, 2004 Decided January 7, 2005
No. 03-5313
MICHAEL J. KOSZOLA ,
APPELLANT
V.
FEDERAL DEPOSIT INSURANCE CORPORATION,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 96cv00174)
Mitchell J. Rotbert argued the cause and filed the briefs for
appellant.
Jaclyn C. Taner, Counsel, Federal Deposit Insurance
Corporation, argued the cause for appellee. With her on the
brief was Colleen J. Boles, Senior Counsel. Kathryn R.
Norcross, Counsel, entered an appearance.
Before: GINSBURG, Chief Judge, and GARLAND and
ROBERTS, Circuit Judges.
2
Opinion for the Court filed by Circuit Judge ROBERTS.
ROBERTS, Circuit Judge: A former employee of the
Resolution Trust Corporation (RTC) sued its statutory successor,
the Federal Deposit Insurance Corporation (FDIC), alleging that
the RTC violated his rights by disciplining and firing him in
retaliation for disclosures protected under the RTC Whistle-
blower Act, 12 U.S.C. § 1441a(q), and the First Amendment.
After a bench trial, the district court entered judgment for the
defendant on the ground that the RTC would have taken the
same employment actions regardless of any protected disclo-
sures. The plaintiff appeals, but we affirm.
I.
The RTC’s Office of Inspector General (OIG) was responsi-
ble for investigating waste, fraud, and illegal activity within the
RTC. In December 1991, OIG hired plaintiff-appellant Michael
Koszola as an agent assigned to its Chicago office. Initially,
Koszola’s supervisors were stationed in Kansas City. Trouble
began in June 1992, however, when OIG hired a new Supervi-
sory Agent stationed in Chicago, George Sullivan, to whom
Koszola was to report. The introductory meeting between the
two did not go well: Sullivan advised David Sherry, the Re-
gional Inspector General back in Kansas City, that Koszola had
been “verbally abusive and insubordinate.” Mem. Op. at 2. For
his part, Koszola told Sherry that Sullivan “lacked investigative
skills and management ability.” Id.
It was downhill after that: Koszola was “openly resentful”
of Sullivan’s authority and “frequently complained to Sherry
about Sullivan’s decision making and management skills.” Id.
The resulting tension was exacerbated by incidents of insubordi-
nation by Koszola, such as submitting an investigative report
almost two months late and ignoring instructions to attend
training and to serve a subpoena in a particular manner.
3
Sullivan also became concerned that Koszola was submitting
questionable overtime claims.
Initially, Sherry counseled Sullivan to respond with the
carrot rather than the stick, instructing him in December 1992 to
give Koszola a favorable performance appraisal in hopes that
Koszola would respond positively to praise. Sullivan duly
issued a sunny performance report that did not mention his
dissatisfaction with Koszola’s behavior or attitude. Soon after,
however, Sullivan received an angry complaint from the FBI
alleging that Koszola, in connection with a joint RTC/FBI
investigation in California, had falsely presented himself to a
suspect as an FBI agent, questioning the suspect without
advising him of his Miranda rights. Sullivan immediately
removed Koszola from the case. Despite this action, an FBI
agent and an Assistant U.S. Attorney later complained that
Koszola had contacted witnesses and may have disclosed
information about the operation after he had been taken off the
case. The OIG opened a formal investigation of the matter.
In January 1993, Koszola wrote Sullivan a brief memoran-
dum concerning RTC contract employees assigned to the
copyroom who were allowed to “sit and read” when there was
no copying work to be performed. Sullivan determined that the
matter was better handled by referring it to RTC contracting
officials rather than by launching an OIG investigation. The
following month, Jack Anderson’s syndicated newspaper
column detailed alleged incidents of waste and fraud at the RTC,
and the column included charges that some contract employees
were paid to “sit and read.” The RTC ordered an investigation
into possible sources for the column; because of the similar
phrasing in Koszola’s January memorandum, Sullivan suspected
Koszola. At the direction of his superiors, Sullivan retrieved a
copy of the memorandum from Koszola’s desk while he was
away and forwarded it to Sherry.
4
While retrieving the January memorandum, Sullivan came
upon another memorandum addressed to him — one he testified
he never received — concerning anonymous allegations that the
Chairman of the RTC had been buying RTC properties through
straw purchasers. Sullivan forwarded this memorandum to
Sherry as well. See Tr. Exh. 1-J-2 at 1, 8. A subsequent RTC
investigation determined that Koszola discussed the allegations
against the Chairman in a May 1993 telephone call to a former
RTC employee at her home. See Mem. of Proposed Removal at
11–13.
Soon after retrieving the memoranda from Koszola’s office,
Sullivan became aware of yet another problem. In the course of
an investigation of employees suspected of fraudulent billing
and attendance reporting, Koszola prepared an investigative
report noting that the employees’ timekeeper had found no
evidence of improper activity. The timekeeper advised Sullivan,
however, that Koszola’s report was incorrect — she had told
Koszola that she believed the employees’ records indicated
misconduct. After this incident, Sherry testified, he decided to
fire Koszola. He placed Koszola on paid administrative leave
on April 19, 1993, pending preparation of a formal memoran-
dum proposing Koszola’s discharge.
Less than two weeks later, the first investigation of Koszola
— concerning his activities in connection with the FBI — was
completed. Due to conflicting evidence, the report of the
investigation reached no conclusion on the accusation of
impersonating an FBI agent, but it did detail how Koszola had
not followed proper procedures with respect to reporting his
activities, had filed questionable overtime claims, and had
disobeyed direct orders. See RTC Report of Investigation at
16–27. On September 23, 1993 — five months after Koszola
had been placed on administrative leave — he testified with
other RTC employees before the Senate Banking Committee
about, as described in Koszola’s complaint, “waste, fraud and
5
abuse within RTC operations, ensuing retaliation by the RTC
against whistleblowers for speaking out, and the failure of RTC
to hold culpable managers accountable.” Compl. ¶ 22.
On December 2, 1993, Koszola received a formal memoran-
dum of proposed removal based on charges that he had failed to
follow instructions and proper investigative procedures. The
memorandum also charged that he had twice improperly
released confidential information. It first alleged that he was a
source for the February 1993 Jack Anderson column. The
memorandum also charged that Koszola breached confidential-
ity during the May 1993 call to the former RTC employee, when
he discussed the allegations about the improper straw purchases.
See Mem. of Proposed Removal at 11–13.
After Koszola was given an opportunity to reply to the
charges, the Deputy Inspector General completed his investiga-
tion. On February 2, 1994, the Deputy concluded that charges
about failure to follow instructions and correct procedures were
supported by the evidence, but found the allegation that Koszola
had leaked the “sit and read” memorandum unsupported. The
Deputy did conclude, however, that the charge of unauthorized
release of confidential information regarding the straw pur-
chases was supported by a preponderance of the evidence. On
the basis of the entirety of the record, the Deputy concluded that
Koszola’s termination was warranted. Koszola filed an appeal
with the Merits Systems Protection Board (MSPB), but later
withdrew it.
On February 1, 1996, Koszola filed this civil action against
the FDIC, the successor to the RTC. He sought legal and
equitable relief under the theory that he was fired in retaliation
for disclosing “possible violations of law or regulation; gross
mismanagement; gross waste of funds; or abuse of authority by
the RTC.” Compl. ¶ 31. The complaint details numerous
disclosures — including the memoranda to his supervisor about
contract employees “sitting and reading” and alleged straw
6
purchases by the RTC Chairman, id. ¶¶ 12, 14 — and contends
that they contributed to his termination and other disciplinary
measures against him. Consequently, the complaint concludes,
these personnel decisions violated the RTC Whistleblower Act,
12 U.S.C. § 1441a(q), and the First Amendment. Compl. ¶¶ 34,
39.
On November 8, 2001, the district court concluded a four-
day bench trial, after hearing the testimony of nine witnesses,
including Koszola, Sullivan, Sherry, and the Deputy Inspector
General who conducted the final investigation and recom-
mended Koszola’s termination. The district court concluded
that even assuming that Koszola had established a prima facie
case of retaliation, the FDIC had demonstrated by clear and
convincing evidence that the RTC would have fired him
regardless of any protected disclosures. Mem. Op. at 9–10. The
district court credited the trial testimony of the Deputy Inspector
General, who explained that Koszola had been dismissed
because he was neither credible nor reliable, and that his poor
performance was a product of “his contempt for the organization
and for authority” rather than a lack of training. Id. at 11. The
district court further concluded that, “[i]n light of Plaintiff’s
testimony on cross-examination,” the Deputy’s “skepticism was
readily understandable, and the Court is convinced that the
agency was determined to fire Plaintiff without regard to any
allegedly protected disclosures.” Id.
The court similarly disposed of Koszola’s First Amendment
claim. Without disputing that a public employee like Koszola
enjoys substantial protection from retaliation for exercising his
right to free speech, the court observed that the government
could defeat such a prima facie claim by showing by a prepon-
derance of the evidence that it would have taken the same action
regardless of the protected speech. Id. at 14. The district court
concluded that because the FDIC had already adduced clear and
convincing evidence that the RTC would have fired Koszola
7
regardless of any protected disclosures, the defendant easily
carried its lighter burden under the First Amendment.
Koszola appeals.
II.
Koszola first challenges the district court’s interpretation
and application of the RTC Whistleblower Act. Although this
court has addressed the threshold requirements for establishing
a prima facie case under the Act, see Taylor v. FDIC, 132 F.3d
753, 763–66 (D.C. Cir. 1997), we have never addressed whether
and how the government may rebut such a showing. As the
district court explained, 12 U.S.C. § 1441a(q)(5) provides that
the “legal burdens of proof that prevail” under 5 U.S.C. § 1221
also apply under the RTC Act. Pursuant to 5 U.S.C.
§ 1221(e)(2), the government is not liable if it “demonstrates by
clear and convincing evidence that it would have taken the same
personnel action in the absence of [a protected] disclosure.”
Koszola does not challenge any of this. He argues instead
that, in making its “clear and convincing evidence” evaluation,
the district court should have followed a three-prong test
adopted by the MSPB and the Federal Circuit in the context of
§ 1221 actions. Under this test, the reviewing body considers
“the strength of the agency’s evidence in support of its personnel
action; the existence and strength of any motive to retaliate on
the part of the agency officials who were involved in the
decision; and any evidence that the agency takes similar actions
against employees who are not whistleblowers but who are
otherwise similarly situated.” Carr v. Soc. Sec. Admin., 185
F.3d 1318, 1323 (Fed. Cir. 1999). Koszola contends that this
three-factor test is in fact the legal burden that “prevail[s]” under
§ 1221, and so should govern under § 1441a(q)(5). He also
contends that Congress reenacted the RTC Whistleblower Act
on December 17, 1993, without any changes to the burden of
proof provision, thereby incorporating the test into the statute.
8
See Reply Br. at 2 (citing Lorillard v. Pons, 434 U.S. 575,
580–81 (1978)). Koszola concludes that, because the district
court “evaluated none of these factors,” Koszola Br. at 9, it
committed an error of law.
Nothing in the text of 5 U.S.C. § 1221, however, requires
the district court to undertake the “clear and convincing” inquiry
in terms of any particular legal “test,” multi-factor or otherwise.
“Clear and convincing evidence” is a common legal standard.
See generally 9 WIGMORE ON EVIDENCE § 2498, at 424
(Chadbourn rev. 1981) (standard of clear and convincing proof
“commonly applied”); id. at 424–31 (cataloging instances in
which standard is applied). Given the familiarity trial judges
have with this standard, we do not think it grounds for reversal
that the district court did not explicate its ruling according to a
particular gloss.
Koszola’s “reenactment” argument does not shake our
confidence in this conclusion. His contention that Congress
reenacted the RTC Whistleblower Act without change to the
burden of proof provision in December 1993 is inaccurate; the
1993 amendments instead introduced the reference to the legal
burden of proof under § 1221 for the first time. See Pub. L. No.
103-204, § 21(b)(2), 107 Stat. 2369, 2406 (Dec. 17, 1993). In
any event, we do not think Congress incorporated the three-part
test Koszola insists the district court must apply. The very
factor upon which Koszola now claims the FDIC’s evidence was
lacking — treatment of otherwise similarly situated non-
whistleblowers — was not even adopted by the MSPB until the
year after the 1993 amendments. See Smith v. Dep’t of Agricul-
ture, 64 M.S.P.R. 46, 66 (1994). Although the MSPB had
adopted the other two factors by the time of the 1993 amend-
ments, it did so only in the previous year, see Braga v. Dep’t of
the Army, 54 M.S.P.R. 392, 399 (1992), and Koszola has given
us no indication that Congress considered — let alone endorsed
— the two-part test when passing the 1993 amendments. See
9
Lorillard, 434 U.S. at 581–85 (detailing record of Congress’s
intention to incorporate a contemporaneous construction of a
statute); cf. Am. Fed’n of Labor & Cong. of Indus. Org. v. Brock,
835 F.2d 912, 915 (D.C. Cir. 1987) (we give weight to a
contemporaneous construction of a reenacted statute only when
there is indication Congress considered the interpretation).1
Koszola also charges that the district court erred by giving
dispositive weight to the agency’s removal memorandum, rather
than engaging in an independent inquiry into the reasons for
Koszola’s removal. The record does not support any such
challenge. The trial took four days and involved nine witnesses,
including the principal actors. As is clear from the discussion of
the court’s factual findings below, see Part III, infra, the district
court explicitly relied on trial testimony in drawing its factual
conclusions — not just the removal memorandum.
Nor is there merit to Koszola’s argument that the district
court erroneously treated his decision not to appeal his termina-
tion through the MSPB as a “waiver” of his rights under the
RTC Act. The district court merely — and correctly — con-
1
We are particularly reluctant to reverse the district court on the
ground that it failed to follow a particular three-part test when it was
never asked to do so. Before the district court, Koszola raised neither
the three-part test for “clear and convincing evidence” nor his
argument for its incorporation into the statute. See Plaintiff’s
Proposed Findings of Fact and Conclusions of Law at 37–40. “For
decades, we have emphasized that an argument not made in the lower
tribunal is deemed forfeited and will not be entertained absent
exceptional circumstances.” United States v. Hylton, 294 F.3d 130,
135–36 (D.C. Cir. 2002) (citations and internal quotation marks
omitted). Because the FDIC did not object to Koszola’s presentation
of this argument for the first time on appeal, it may have forfeited
Koszola’s forfeiture, see Belton v. Washington Metro. Area Transit
Auth., 20 F.3d 1197, 1202 (D.C. Cir. 1994), but the argument is
unavailing in any event.
10
cluded that it could evaluate the merits of the decision to
terminate Koszola only to the extent relevant to the retaliation
inquiry. The merits of the decision to fire an employee may
play a role in evaluating whether retaliation was a motive; a
frivolous reason for firing would support an inference that
retaliation was the real reason. That does not mean, however,
that a district court may step into the shoes of the MSPB and
weigh whether, on balance, an employee should have been fired
for the reasons given. The scope of the RTC Act, which
addresses only retaliatory action, undermines any such sugges-
tion. See 12 U.S.C. § 1441a(q)(1). Cf. Marren v. Dept. of
Justice, 51 M.S.P.R. 632, 638 (1991) (5 U.S.C. § 1221 provides
appellate jurisdiction over the merits of an employment decision
only to the extent they are material to an allegation of retalia-
tion), aff’d, 980 F.2d 745 (Fed. Cir. 1992).
III.
Koszola also disputes the district court’s finding by clear
and convincing evidence that the RTC would have fired him
regardless of any alleged protected activity. We review findings
of fact for clear error. See Fed. R. Civ. P. 52(a) (“Findings of
fact . . . shall not be set aside unless clearly erroneous, and due
regard shall be given to the opportunity of the trial court to judge
of the credibility of the witnesses.”); Massachusetts v. Microsoft
Corp., 373 F.3d 1199, 1207 (D.C. Cir. 2004). We consider a
finding of fact to be “clearly erroneous” only if we are “left with
a firm conviction that a mistake has been committed.” Anderson
v. City of Bessemer, 470 U.S. 564, 572 (1985). Thus, we will
upset the district court’s finding of “clear and convincing
evidence” in this case only if we are firmly convinced that it was
merely probable or unlikely that the RTC would have fired
Koszola regardless of any protected disclosures. Cf. Addington
v. Tex as, 441 U.S. 418, 425 (1979) (the burden of “clear and
convincing evidence” falls between preponderance of the
evidence and proof beyond a reasonable doubt); MCCORMICK
11
ON EVIDENCE § 340 (5th ed.) (approving the suggestion that
“clear and convincing evidence” be interpreted as meaning
“highly probable”).
After referencing the detailed set of charges put forward by
the RTC in its memorandum proposing Koszola’s removal, the
district court concluded that the RTC “based its decision to
remove Plaintiff on numerous grounds having nothing to do
with Plaintiff’s disclosures.” Mem. Op. at 12. The court based
this conclusion on the testimony of the Deputy Inspector
General who recommended termination “because [Koszola]
could not be trusted to do his job” and that further training,
rehabilitation, or lesser punishment would not remedy the
problem. Id. at 11. Having witnessed Koszola’s testimony and
cross-examination, the district court observed that the “skepti-
cism” about Koszola’s reliability and prospects for improvement
“was readily understandable.” Id.
We give substantial deference to the district court’s
evaluation of witness credibility. See Anderson, 470 U.S. at 575
(“[w]hen findings are based on determinations regarding the
credibility of witnesses, Rule 52(a) demands even greater
deference to the trial court’s findings”). Such deference is
particularly appropriate in this case, for the disputed question
turns on the employer’s motivation and subjective assessment of
the employee, as well as the parties’ interpretations and explana-
tions of events. A trial judge “aware of the variations in
demeanor and tone of voice that bear so heavily on the listener’s
understanding of and belief in what is said,” id., is in a far better
position than this court to make such evaluations.
In an attempt to show that the RTC’s decision to fire him
was pretextual, Koszola argues that in light of past practice the
RTC’s response to the incident triggering his termination was
suspiciously disproportionate. He observes that prior alleged
infractions — such as impersonating an FBI agent and improp-
erly contacting witnesses — did not cause the RTC to initiate
12
termination proceedings against him. Shortly after an allegedly
protected disclosure, however, the RTC moved to fire him for
the less grievous error of inaccurately reporting the results of an
investigative interview. This disparity, he contends, indicates
that retaliation for the disclosure was the reason for his termina-
tion.
This reasoning fails to take into account the cumulative
effect of Koszola’s misconduct. The adage about the straw
breaking the camel’s back is familiar because of the truth it
conveys. Koszola was fired not simply because of the misre-
porting episode, which in any event was no mere straw. That
episode was simply the latest in an accumulation of incidents
that exhausted the patience of Koszola’s supervisors and left
them with no confidence in him. Indeed, the sworn testimony
of the Deputy Inspector General — the officer who recom-
mended Koszola’s termination — confirms this conclusion. See
Trial Tr. (Nov. 7, 2001) at 49 (“The things that had occurred
were so serious and occurred in the three areas of charges . . .
and had somewhat of a pattern . . . of contempt for the organiza-
tion, contempt for authority . . . that I didn’t really see being
corrected through a lesser penalty.”).
Koszola also challenges the sufficiency of the evidence of
his misconduct. He attempts to undermine the foundation of the
charge of inaccurate investigative reporting, hypothesizing that
it could have been the result of confusion and contending that
the Deputy Inspector General admitted as much. The record
does not support this interpretation. It indicates that although
the Deputy Inspector General observed “there may be some
confusion” about the matter, he concluded that he found “persua-
sive” the timekeeper’s testimony that Koszola had inaccurately
recorded her interview. Handwritten Notes of Deputy Inspector
General at J.A. 628 (emphasis added). It is unclear where the
investigating officer thought the confusion might lie, but it is
clear that he found the timekeeper’s testimony more credible
13
than Koszola’s, in part because the timekeeper was “outside” the
area of dispute. Id. We have no basis for questioning that
conclusion.
Koszola also dismisses one incident of insubordination as
trivial. See id. at 13–14 (characterizing as minor Koszola’s
decision not to wait to serve an attorney a subpoena). Had the
RTC placed dispositive weight on that incident, this character-
ization might give us pause. But the subpoena spat was plainly
just one episode of many in the unhappy saga culminating in
Koszola’s dismissal. Overall, Koszola describes the removal
memorandum as documenting only that he “had been less than
slavish in his attention to the details of some of his duties,”
Koszola Br. at 10, but this simply gives euphemism a bad name.
The removal memorandum stated that Koszola’s “misconduct
created extreme embarrassment for both [an Assistant U.S.
Attorney] and the RTC,” that his failure to follow proper
investigative procedure meant he “cannot be trusted to conduct
future investigations without the [RTC] risking ultimate
compromise of the case,” and that his “serious misrepresenta-
tions” in a Report of Investigative Activity undermined the
Regional Inspector General’s confidence that Koszola could
“discharge this essential function of [his] position with integ-
rity.” Mem. of Proposed Removal at 2, 7, 10. Like the district
court, we need not decide whether Koszola should have been
terminated. We need only affirm that the district court did not
clearly err in deciding that the RTC showed, by clear and
convincing evidence, that it did not fire Koszola in retribution
for any protected disclosures.
IV.
Our determination that the district court’s factual conclu-
sions are not clearly erroneous is fatal to Koszola’s contention
that the court erred by not inquiring into whether he had stated
a First Amendment claim. He correctly contends that courts
conduct a multifactor inquiry to decide whether a public
14
employee has established a cause of action under the First
Amendment. See Connick v. Myers, 461 U.S. 138, 142 (1983);
Hall v. Ford, 856 F.2d 255, 258 (D.C. Cir. 1988). The govern-
ment, however, can rebut any such claim by showing by a
preponderance of the evidence that it would have taken the same
action regardless of any protected speech by the employee. See
Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274,
287 (1977). The statutory and First Amendment counts in
Koszola’s complaint refer to identical disclosures. See Compl.
9–10. The district court correctly reasoned that, because the
RTC had already adduced clear and convincing evidence that it
would have terminated Koszola regardless of any protected
activity, a fortiori it would prevail under the First Amendment’s
less demanding rebuttal standard. As we do not disturb the
district court’s finding of clear and convincing evidence, its
ruling on Koszola’s First Amendment claim stands.
In light of our disposition, we have no occasion to reach the
FDIC’s arguments that Koszola’s disclosures were not protected
under the RTC Whistleblower Act or the First Amendment.
The judgment of the district court is affirmed.