Stearn v. Department of Navy, 01-3013.
| Decision Date | 15 February 2002 |
| Docket Number | No. 01-3026.,No. 01-3013.,No. 01-3027.,01-3013.,01-3026.,01-3027. |
| Citation | 280 F.3d 1376 |
| Parties | Howard STEARN, Ronald J. Fontenault, Michael Gonzales, William L. Jernigan and George K. Maynard, Petitioners, and Randolph Bremby, Brenda K. Smith, Marcus H. Roane, Sharon E. Bremby and William G. Burke, Petitioners, and Robert L. Phillips and Jarrell S. Weldon, Petitioners, v. DEPARTMENT OF THE NAVY, Respondent. |
| Court | U.S. Court of Appeals — Federal Circuit |
Neil C. Bonney, Bonney & Allenberg, P.C., of Virginia Beach, VA, for petitioners Howard Stearn, Ronald J. Fontenault, Michael Gonzales, William L. Jernigan and George K. Maynard.
Jeffrey A. Belkin, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, for respondent. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and James M. Kinsella, Deputy Director. Of counsel were Doris S. Finnerman and Bryant G. Snee.
Before SCHALL, GAJARSA, and LINN, Circuit Judges.
Petitioners seek review of a Merit Systems Protection Board ("Board") decision denying their petitions for enforcement of an Opinion and Order of the Board ordering the Department of the Navy ("the Navy") to grant petitioners law enforcement officer retirement credit ("LEO credit"). Basing its determinations on a regulation, the Navy limited petitioners' entitlement to LEO credit to a period of one year prior to the dates on which petitioners submitted their initial requests for the credit. In this appeal, petitioners challenge the validity of the regulation at issue.
The Board found petitioners' appeals to be barred by principles of res judicata, because petitioners failed to challenge the validity of the regulation in appealing an earlier denial of LEO credit by the Navy. However, in the Bremby and Stearn actions, the Navy failed to timely raise the affirmative defense of res judicata. This constituted a waiver of the res judicata defense. Accordingly, with respect to those appeals, we reverse the finding of res judicata. We affirm the finding of res judicata in the appeal of petitioners Phillips and Weldon.
The Board further concluded that the regulation at issue was valid and that petitioners were not entitled to a waiver of the filing deadlines set forth therein. Because the Board's findings of fact are supported by substantial evidence, and its legal conclusions are not in error, we affirm.
Petitioners submitted requests for LEO coverage under 5 U.S.C. § 8336(c) in December 1996 and January 1997. In June of 1997, the Navy issued its determinations denying LEO coverage. The memorandum denying coverage began by quoting 5 C.F.R. § 831.906(e), which provides that "[c]overage in a position or credit for past service will not be granted for a period greater than 1 year prior to the date that the request from an individual is received...." 5 C.F.R. § 831.906(e) (2001). The closing paragraph of the memorandum echoed the regulatory language, notifying the petitioner of "his right to appeal the last 1 year of service on the MERITS of his claim...."
Petitioners then appealed to the Board. The appeals did not challenge the validity of 5 C.F.R. § 831.906(e). Nor was the regulation challenged at the hearing before the administrative law judge. In the subsequent initial decision, the Navy's determinations were reversed and the Navy was directed to grant the petitioners the appropriate amount of LEO retirement credit. Stearn v. Dep't of the Navy, No. DC-0831-97-0869-I-1, slip op. at 14 (M.S.P.B.1997) (initial decision). The validity of the regulation containing the one-year period was not called into question by this decision, or during subsequent briefing to the full Board, which affirmed, as modified, the administrative law judge's decision for most of the petitioners. Stearn v. Dep't of the Navy, 81 M.S.P.R. 551 (1999); Bremby v. Dep't of the Navy, 81 M.S.P.R. 450 (1999). The Board's decision in these cases was not appealed and thus became final.
The Bremby and Stearn groups of petitioners submitted petitions for enforcement to the Board in May and September of 1999; in the accompanying memoranda, these petitioners challenged the validity of 5 C.F.R. § 831.906(e) for the first time. In response, the Navy supplied notices of compliance to petitioners, informing them of their effective dates of LEO credit, which were approximately one year prior to their applications for credit, in accordance with the regulation. The Navy's responses to the petitions for enforcement did not raise the issue of a res judicata bar to the claim of invalidity of 5 C.F.R. § 831.906(e). The administrative law judge denied petitioners' enforcement petitions. Among other grounds, the judge based his rulings on a sua sponte finding that any challenge to the validity of 5 C.F.R. § 831.906(e) was precluded by res judicata, since petitioners did not raise the issue in the earlier appeal from the Navy's denial of LEO credit, "[a]lthough they had opportunities to do so...." Bremby v. Dep't of the Navy, No. DC-0831-97-0806-C-1, slip op. at 3 (M.S.P.B. Sept.1, 1999) (initial decision); Stearn v. Dep't of the Navy, No. DC-0831-97-0869-C-1, slip op. at 4 (M.S.P.B. Sept. 14, 1999) (initial decision). The full Board denied petitioners' petition for review. Bremby v. Dep't of the Navy, No. DC-0831-97-0806-C-1 (M.S.P.B. Aug.24, 2000) (final order); Stearn v. Dep't of the Navy, No. DC-0831-97-0869-C-1 (M.S.P.B. Aug. 16, 2000) (final order).
The cases of petitioners Robert L. Phillips and Jarrell S. Weldon were remanded to the administrative law judge for further consideration. Phillips v. Dep't of the Navy, 81 M.S.P.R. 462 (1999). On remand, the administrative law judge again directed the Navy to grant the two petitioners the appropriate amount of LEO credit. Anderson v. Dep't of Defense, No. DC-0831-97-0836-B-1 (M.S.P.B. July 23, 1999) (initial decision). Neither party petitioned for review of that decision, which became final in August 1999.
After receiving this favorable remand decision, petitioners Phillips and Weldon submitted a petition for enforcement to the Board in May of 2000; as before, it was at this point that petitioners challenged the validity of 5 C.F.R. § 831.906(e) for the first time in the case. The Navy, apprised of the availability of a res judicata defense by the earlier decisions, responded to the petition by properly raising the defense, based on petitioners' failure to raise the invalidity issue in the initial appeal. The Navy also noted that a notice of compliance had been supplied to petitioners, granting them approximately one year of LEO credit from the date of their applications in accordance with 5 C.F.R. § 831.906(e). The administrative law judge denied petitioners' petition for enforcement, citing among other grounds the timely raised defense of res judicata. Phillips v. Dep't of the Navy, Nos. DC-0831-97-0880-C-2, DC-0831-97-0884-C-2, slip op. at 3 (initial decision). As before, the full Board denied petitioners' petition for review. Phillips v. Dep't of the Navy, Nos. DC-0831-97-0880-C-2 DC-0831-97-0884-C-2, 87 M.S.P.R. 532 (M.S.P.B. Sept.28, 2000) (final order).
We have jurisdiction over these consolidated appeals from the final Board decisions under 5 U.S.C. § 7703(b)(1).
The standard of review in an appeal from a decision of the Board is strictly limited by statute. We may reverse a decision of the Board only if 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); Carr v. Soc. Sec. Admin., 185 F.3d 1318, 1321 (Fed.Cir.1999). A determination of whether res judicata applies to the facts of a case is a matter of law. See United Techs. Corp. v. Chromalloy Gas Turbine Corp., 189 F.3d 1338, 1342-43 (Fed.Cir.1999); Case v. United States, 88 F.3d 1004, 1008 (Fed.Cir.1996).
Under the doctrine of res judicata, a final judgment on the merits of an action precludes the parties from relitigating issues that were or could have been raised in that action. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981). The doctrine serves to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and ... encourage reliance on adjudication." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980).
Where a party has notice that a regulation is being applied, an attack on the validity of that regulation is an issue that can be raised in an ensuing action. Here, petitioners were placed on notice in all three appeals that the Navy was applying 5 C.F.R. § 831.906(e) by clear statements in the memoranda denying LEO credit. Petitioners' challenge to the validity of 5 C.F.R. § 831.906(e) thus could have been raised in their initial appeals to the Board. Despite the fact that petitioners did not raise the issue at any point during the initial proceedings before the administrative law judge, nor in their petition for review of the resulting initial decision, the petitioners were aware of the Navy's reliance on the regulation and could have challenged its validity at that time. Res judicata thus was available to the Navy as a defense to all three of the enforcement actions.
However, the Board has held that res judicata is waived if not timely raised. Castle v. Dep't of the Treasury, 68 M.S.P.R. 417, 423 n. 6 (1995); cf. Fed.R.Civ.P. 8(c). In practice before the Board, a defense is timely raised at any point before the end of the conference held to define the issues in the case. 5 C.F.R. § 1201.24(b) (2001).
In the Bremby and Stearn enforcement petition actions, the Navy failed to timely...
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