Wagner v. U.S.

• Decision Date: 28 April 2004
• Docket Number: No. 03-5118.,03-5118.
• Citation: 365 F.3d 1358
• Parties: Donald L. WAGNER, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

365 F.3d 1358

Donald L. WAGNER, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 03-5118.

United States Court of Appeals, Federal Circuit.

April 28, 2004.

Matthew S. Freedus, Feldesman Tucker Leifer Fidell LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Eugene R. Fidell and Todd A. Wynkoop.

Brent M. McBurney, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; and Bryant G. Snee, Assistant Director. Of counsel on the brief was Captain Steven D. Bryant, Litigation Division, United States Army Legal Services Agency, of Arlington, Virginia.

Before MAYER, Chief Judge, GAJARSA, and DYK, Circuit Judges.

GAJARSA, Circuit Judge.

Donald L. Wagner ("Wagner") appeals from the judgment of the United States Court of Federal Claims, which held that the decision of the Army Board for Correction of Military Records ("ABCMR") was not arbitrary, capricious, contrary to law, or unsupported by substantial evidence. Wagner v. United States, 56 Fed.Cl. 634 (2003). The ABCMR explained that, although Mr. Wagner's discharge violated Army Regulation ("AR") 600-8-24 ¶ 2-31(h), any resulting error was harmless. Because we are unable to ascertain whether the Army's violation of its regulation was harmless, we reverse and remand.

I. BACKGROUND

Wagner was an officer in the United States Army Reserve. In June of 1995, he was arraigned, tried, and convicted by court-martial of making a false official statement and of conduct unbecoming an officer. He was sentenced to a punitive reprimand and forfeiture of $1000 per month, but was not discharged. On July 9, 1996, the Army notified Wagner that the Department of the Army Active Duty Board ("DAADB") intended to consider him for release from active duty on account of the court-martial. At the time he was notified, the Army Reserve Personnel Center listed January 10, 1997, as the date Wagner would achieve eighteen years of active federal service.

The Army provides the procedure for involuntarily releasing reserve component officers from active duty in AR 600-8-24. Where involuntary release proceedings under AR 600-8-24 involve an officer who will have more than eighteen years of active federal service on the date scheduled for release from active duty, the regulation requires pre-approval of the proceedings by the Secretary of the Army. See AR 600-8-24, 2-31(h) ("An officer who will complete 18 or more years of [active federal service] on his or her scheduled release date will not be processed under this section, unless such action is approved by the Secretary of the Army."); see also 10 U.S.C. § 12686. The July 9 notice from the Army Reserve Command to Wagner informing him of the pending DAADB proceedings indicated that he would be processed under the discharge procedures applying to officers with less than eighteen years of active federal service. At the time the Army Reserve Command sent the notice, it believed Wagner would achieve eighteen years of active federal service on January 10, 1997.

On August 22, 1996, Wagner filed a request with the Army Reserves Personnel Center ("Personnel Center") to update his records to reflect an additional fifty-three days of active federal service. His request was granted and, on November 12, 1996, the Personnel Center notified Wagner that he had achieved eighteen years of active federal service as of that day. The Personnel Center did not, however, notify the individual processing the pending DAADB action against Wagner. Consequently, separation proceedings continued. On December 9, 1996, the DAADB recommended that Wagner be released from active duty for misconduct or moral or professional dereliction with an "Under Other than Honorable Conditions" characterization of service. The Principal Deputy Assistant Secretary of the Army approved the DAADB's recommendation, as required by AR 600-8-24, ¶ 2-31(k), on December 16, 1996. The Personnel Center notified Wagner of the DAADB decision on December 19.

After notifying Wagner of the DAADB decision, the Army learned that Wagner had achieved eighteen years of active federal service prior to the DAADB's decision and that the approval of the Secretary of the Army had been required under AR 600-8-24, 2-31(h), prior to processing Wagner. In an attempt to rectify the problem, the Army belatedly sought approval from the Assistant Secretary of the Army for Manpower and Reserve Affairs to discharge Wagner from active duty. On January 20, 1998, the Acting Assistant Secretary retroactively approved Wagner's release from active duty. Wagner was officially released on April 16, 1998.

Wagner sought correction of his military records from the ABCMR on April 28, 2000. The ABCMR is a statutory review board composed of civilians for the purpose of correcting errors in the official records of military personnel. 10 U.S.C. § 1552; AR 15-185, ¶¶ 2-1, 2-2. The ABCMR may order the correction of the records of military personnel if the applicant proves the existence of an error or injustice by a preponderance of the evidence. AR 15-185 ¶ 2-9.

Before the ABCMR, Wagner argued that, because the DAADB did not obtain prior approval from the Secretary as required by AR 600-8-24 ¶ 2-31(h), his release from active duty was contrary to law, arbitrary, and capricious. As relief for the procedural error, Wagner requested that the decision of the DAADB be set aside and that he be reinstated to active duty with all the back pay and benefits to which reinstatement would entitle him.¹ The ABCMR denied Wagner's request, stating that it believed that "the Secretary of the Army would have initially authorized elimination proceedings regardless of the applicant's years of service...."

Following the ABCMR decision, Wagner filed a motion for judgment on the agency record in the Court of Federal Claims, seeking monetary relief for back pay and allowances under 37 U.S.C. § 204 ("Pay and Allowances of the Uniformed Services"). The Army filed a cross-motion, also for judgment on the agency record. The Court of Federal Claims accepted the ABCMR's finding that Wagner's discharge violated AR 600-8-24 by not obtaining prior approval from the Secretary. The court further found that, although the ABCMR failed to substantiate its conclusion that the Secretary would have authorized the proceeding, Mr. Wagner had failed to carry his burden of showing clearly and convincingly that the ABCMR's decision was arbitrary, capricious, contrary to law or regulation, or unsupported by substantial evidence.

The Court of Federal Claims premised its decision on three justifications. First, although the ABCMR provided no support for its conclusion that the Secretary would have approved Wagner's discharge, the court found that the retroactive endorsement of the proceeding by the Acting Assistant Secretary was "strong evidence" that the Secretary would have approved Mr. Wagner's discharge proceedings if asked beforehand as required by regulation. Second, a senior Army legal advisor believed that the post-proceeding approval by the Acting Assistant Secretary cured any procedural error resulting from the failure to follow the regulation. Finally, the court disagreed with Wagner that the ABCMR's conclusion was based on pure speculation over what the Secretary would have done if the regulation had been followed, as the post-proceeding approval by the Acting Assistant Secretary supported the ABCMR's conclusion. Accordingly, the Court of Federal Claims denied Wagner's motion and granted the Army's cross-motion for judgment on the agency record. We have jurisdiction of this appeal pursuant to 28 U.S.C. § 1295(a)(3).

II. DISCUSSION

A. Standard of Review

The Court of Federal Claims applies the same standard in deciding a motion for judgment on the agency record as it would in deciding a motion for summary judgment. Rose v. United States, 35 Fed. Cl. 510, 512 (1996). Therefore, judgment on the agency record is only appropriate when there are no issues of material fact and when one party is entitled to judgment as a matter of law. Id.; see also Banknote Corp. of Am. v. United States, No. 03-5104, ___ F.3d ___ (Fed.Cir. April 26, 2004). We review such decisions by the Court of Federal Claims without deference, applying the same standard of review that the Court of Federal Claims applied. Accordingly, we will not disturb the decision of the corrections board unless it is arbitrary, capricious, contrary to law, or unsupported by substantial evidence. Haselrig v. United States, 333 F.3d 1354, 1355 (Fed.Cir.2003).

B. Analysis

We begin with the initial premise that an agency is bound by its own regulations. Service v. Dulles, 354 U.S. 363, 388, 77 S.Ct. 1152, 1 L.Ed.2d 1403 (1957); see also Carmichael v. United States, 298 F.3d 1367, 1373-74 (Fed.Cir.2002); Voge v. United States, 844 F.2d 776, 779 (Fed.Cir.1988) ("It has long been established that government officials must follow their own regulations, even if they were not compelled to have them at all...."). In Service, the Supreme Court reversed the Secretary of State's exercise of his statutorily authorized discretion to dismiss employees with questionable loyalty where the Secretary had exercised that authority in violation of self-imposed regulatory constraints in excess of statutory requirements. 354 U.S. at 388, 77 S.Ct. 1152. The decision in Service requiring an agency to comply with its self-imposed regulations, however, does not end our inquiry, as strict compliance with procedural requirements is not required where the error is deemed harmless. See Gratehouse v. United States, 206 Ct.Cl. 288, 512 F.2d 1104, 1108 (1975) ("Exceptions are made to the rule [of Service v. Dulles] where the procedural error is deemed harmless."); see also Carmichael, 298 F.3d at 1375-76 (remanding...