Lloyd L. Tunik, et al. v. M.S.P.B., (2005)

Reporting Judge:MSPB
Docket Number:03-3286
 
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UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

United States Court of Appeals for the Federal Circuit 03-3286, -3330, -3331

LLOYD L. TUNIK,

and

VERRELL DETHLOFF, THOMAS S. ROBINSON, MARGUERITE SCHELLENTRAGER, KAREN BAKER, BRYAN BERNSTEIN, and

TELA L. GATEWOOD,

and JOSEPH SCHLOSS,

Petitioner,

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent,

Intervenor.

Michael J. Kator, Kator, Parks & Weiser, P.L.L.C., of Washington, DC, argued for petitioners.

Calvin M. Morrow, Attorney, Office of the General Counsel, United States Merit Systems Protection Board, of Washington, DC, argued for respondent. With him on the brief were Martha B. Schneider, General Counsel, and Stephanie M. Conley, Reviewing Attorney.

Douglas K. Mickle, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for intervenor. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Todd M. Hughes, Assistant Director. Of counsel on the brief was Shawn S. McGruder, Office of General Counsel, Social Security Administration, of Baltimore, Maryland.

Petitioner,

Petitioners,

and

SOCIAL SECURITY ADMINISTRATION,

Sally M. Tedrow, O'Donoghue & O'Donoghue LLP, of Washington, DC, for amici curiae Association of Administrative Law Judges, IFPTE, AFL-CIO, et al.

Joyce E. Kitchens, Kitchens/New, L.L.C., of Atlanta, Georgia, for amicus curiae Federal Bar Association.

Appealed from: United States Merit Systems Protection Board

United States Court of Appeals for the Federal Circuit 03-3286, -3330, -3331

LLOYD L. TUNIK,

and

VERRELL DETHLOFF, THOMAS S. ROBINSON, MARGUERITE SCHELLENTRAGER,

KAREN BAKER, BRYAN BERNSTEIN, and TELA L. GATEWOOD,

Petitioners,

Petitioner,

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent,

and

SOCIAL SECURITY ADMINISTRATION,

Intervenor.

DECIDED: May 11, 2005

Petitioner,

and JOSEPH SCHLOSS,

Before LOURIE, SCHALL, and LINN Circuit Judges.

Opinion for the Court filed by Circuit Judge LINN. Dissenting opinion filed by Circuit Judge SCHALL.

LINN, Circuit Judge.

Lloyd L. Tunik ("Tunik"), Verrell Dethloff et al. ("Dethloff"), and Joseph Schloss ("Schloss") petition for review of the Merit Systems Protection Board's ("Board") dismissal of each of their appeals for lack of jurisdiction. Tunik v. Social Sec. Admin.,

93 M.S.P.R. 482 (2003); Dethloff v. Social Sec. Admin., 93 M.S.P.R. 574 (2003); Schloss v. Social Sec. Admin., 93 M.S.P.R. 578 (2003). Their separate appeals were consolidated before this court because there is a common issue among them. Because Tunik's case is moot, we vacate the Board's opinion in his case and remand with instructions to dismiss. Because in the remaining cases the Board erred in attempting to repeal by adjudication its rule adopted pursuant to notice and comment rulemaking, we reverse and remand.

I. BACKGROUND

Tunik was an Administrative Law Judge ("ALJ") with the Social Security Administration ("Agency"). During the course of his employment, Tunik issued an opinion remanding a disability claim to a state agency due to asserted deficiencies in the state agency's consideration of the claim. Subsequently, Tunik informed Acting Regional Chief Administrative Law Judge Mary Bisantz ("Bisantz") of his disposition of the case and his similar disposition of other cases. The state agency refused to comply with the remand order and sent the case back to the Agency. Several months after being informed of Tunik's actions, Bisantz reviewed Tunik's decision and issued a memorandum to Acting Spokane Hearing Office Chief Administrative Law Judge Mary 03-3286, -3330, -3331 2

Reed ("Reed") asserting that Tunik had improperly dismissed the case. The memorandum also instructed Reed to inform Tunik that his decision was invalid and to offer him the opportunity to rectify his alleged mistake by vacating the dismissal order and hearing the case on its merits. Bisantz also sent a memorandum to Tunik informing him that his decision in the case was without legal justification and could result in disciplinary action.

Tunik sent a memorandum to the Agency's Chief Administrative Law Judge protesting Bisantz's actions. Nevertheless, Tunik vacated his original order remanding the case to the state agency. In his consideration of the case on the merits, Tunik drafted a new decision holding that the claimant had been denied due process of law by the lack of a proper decision by the state agency. Reed reviewed the decision prior to its issuance and notified Bisantz of its contents. Bisantz instructed Reed to prevent the decision from issuing and to transfer the case file to Bisantz. Bisantz ultimately allowed the decision to issue with a minor non-substantive change.

During the course of the above events, Tunik remanded a second case to the state agency on the same grounds as the first remand. Bisantz issued a second memorandum to Tunik informing him of the state agency's protest of this second decision. Reed again informed Tunik that he should vacate his order, or the case would be reassigned. Tunik vacated his remand order in the second case and took the case up on the merits.

A few weeks after vacating his remand order in the second case, Tunik filed a complaint with the Board alleging that Bisantz's and Reed's actions had interfered with his decisional independence. Tunik filed a motion for summary judgment, which the 03-3286, -3330, -3331 3

ALJ granted on December 14, 2000. Both sides filed petitions for review before the Board. Before the Board rendered its decision, Tunik voluntarily retired effective May 31, 2003. Nevertheless, on June 27, 2003, the Board reversed the initial decision and dismissed the appeal for lack of jurisdiction. Tunik v. Social Sec. Admin., 93 M.S.P.R. 482 (2003). In doing so, the Board overruled its prior decision in In re Doyle, 29 M.S.P.R. 170 (1985), which had recognized an action for "constructive" removal before the Board under 5 U.S.C. § 7521, even though the claimant had not been actually separated from his or her position. 93 M.S.P.R. at 488-92. The Board based its reconsideration on our decision in Butler v. Social Security Administration, 331 F.3d 1368 (Fed. Cir. 2003), and on the perceived lack of support for such a construction of section 7521 even at the time Doyle was decided. Tunik timely filed a petition for review with this court.

Dethloff and numerous other ALJs with the Agency challenged various Agency practices that allegedly interfered with the requirement in 5 U.S.C. § 3105 that case assignments to ALJs occur in rotational order. Dethloff himself was taken out of the assignment rotation for recommended on-the-record cases. On June 21, 2002, the Board's ALJ issued an Interim Decision dismissing most of the claims for lack of jurisdiction because the ALJs had failed to allege facts showing that the failure to assign cases on a rotational basis caused their constructive removal. Dethloff v. Social Sec. Admin., No. CB-7521-02-0008-T-1 (M.S.P.B. June 21, 2002) (interim decision). Subsequently, on August 7, 2002, the ALJ issued a First Initial Decision denying reconsideration of the Interim Decision and granting entry of a settlement agreement with respect to the remaining claims. Dethloff v. Social Sec. Admin., No. CB-7521-02-03-3286, -3330, -3331 4

0008-T-1 (M.S.P.B. Aug. 7, 2002) (first initial decision). However, on July 31, 2003, on the ALJs' petition for review, the Board re-opened the case sua sponte and issued a new opinion citing Tunik and holding that the ALJs had not alleged that they were actually separated from their positions. Dethloff v. Social Sec. Admin., 93 M.S.P.R. 574 (2003). Thus, the Board dismissed the appeals for lack of jurisdiction. Id. at 577. Dethloff and the other ALJs timely petitioned for review with this court.

Schloss is also an ALJ with the Agency. Schloss was assigned to decide a claim for disability benefits. The claimant's representative sent two letters to Schloss seeking a favorable on-the-record decision on the claim. However, the letters were delayed in being transmitted to Schloss. After each letter was sent to Schloss, the claimant's representative sent a letter to Hearing Office Chief Administrative Law Judge Riley Atkins ("Atkins"), Schloss's supervisor. The two letters alleged that Schloss was imposing an improper legal standard related to a request for an on-the-record decision. Schloss ultimately denied the request for an on-the-record decision.

After reviewing Schloss's decision, Atkins reassigned the case to another ALJ. Schloss filed a complaint with the Board. The presiding judge held that the Agency had interfered with Schloss's qualified decisional independence in reassigning the case. However, on July 28, 2003, the Board reversed the presiding judge's Initial Decision and, citing Tunik, held that the Board had no jurisdiction over the case. Schloss v. Social Sec. Admin., 93 M.S.P.R. 578 (2003). Schloss timely petitioned for review with this court.

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).

03-3286, -3330, -3331 5

II. DISCUSSION

A. Standard of Review

This court must affirm the Board's decision unless it is: "(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence." 5 U.S.C. § 7703(c) (2000). Whether the Board has jurisdiction to hear an appeal is a question of law reviewed de novo. Diefenderfer v. Merit Sys. Prot. Bd., 194 F.3d 1275, 1277 (Fed. Cir. 1999). The Board's jurisdiction is limited to those actions specifically granted by law, rule, or regulation. 5 U.S.C. § 7701(a) (2000); Meeker v. Merit Sys. Prot. Bd., 319 F.3d 1368, 1374 (Fed. Cir. 2003).

B. Analysis 1. Tunik's Appeal

As a preliminary matter, the Agency, as Intervenor, argues that Tunik's appeal is moot because he voluntarily retired. Tunik responds that his claim for attorney's fees remains alive and that he may choose to claim on remand that his retirement...

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