Scarborough v. Office of Personnel Management
| Decision Date | 23 January 1984 |
| Docket Number | No. 82-8543,82-8543 |
| Citation | 723 F.2d 801 |
| Parties | William E. SCARBOROUGH, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT, Respondent. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Dana E. McDonald, Atlanta, Ga., Robert G. Schwemm, Lexington, Ky., for petitioner.
Mary L. Jennings, Calvin M. Morrow, Washington, D.C., for intervenor M.S.P.B.
Robert A. Reutershan, U.S. Dept. of Justice, Civ. Div., Washington, D.C., for respondent.
On Petition for Review of an Order of the Merit Systems Protection Board.
Before VANCE and CLARK, Circuit Judges, and SWYGERT *, Senior Circuit Judge.
Petitioner, William E. Scarborough, appeals the Merit Systems Protection Board's (MSPB or Board) failure to award attorney fees after reversing the Office of Personnel Management's (OPM) denial of petitioner's voluntary disability retirement application. The issue presented is whether Sec. 7701(g) of the Civil Service Reform Act of 1978, Pub.L. No. 95-454, 92 Stat. 1111 (CSRA), 1 authorizes the Board to award attorney fees to a government employee who successfully appeals the OPM's unwarranted denial of his voluntary disability retirement application.
The OPM maintains that disability retirement denials are appealable to the Board pursuant to Sec. 8347(d), not Sec. 7701(a), and the absence of any language in Chapter 83 authorizing attorney fee awards precludes the Board from making such an award in Chapter 83 disability retirement cases. The Board and petitioner argue that attorney fees are proper because Sec. 7701(a) governs disability retirement appeals. In the alternative, they suggest that whether Sec. 7701(a) or Sec. 8347(d) governs the appeal is immaterial because the Chapter 77 attorney fees provision applies to Chapter 83 appeals. The Board, however, joins in the OPM's contention that even if Chapter 77 authorizes the Board to award attorney fees in Chapter 83 retirement cases, petitioner is not entitled to attorney fees because Sec. 7701(g) does not envisage employee initiated disability retirement applications.
Petitioner was a Veterans Administration (VA) employee since 1974. In 1978, Scarborough began to suffer severe hypertension and lower back pain brought on by a degenerative disc, which made it impossible for him to perform his work satisfactorily. Indeed, Scarborough's health had so deteriorated that the VA even considered initiating an involuntary retirement action against him. Involuntary action became unnecessary, however, when on November 5, 1979, Scarborough filed an application for disability retirement with the OPM pursuant to 5 U.S.C. Sec. 8337(a). 2 Upon filing the application, Scarborough was placed on leave from his job without pay.
To support his application, Scarborough produced his medical records, his doctor's report, and corroborating statements of two of his VA supervisors. Although no contrary evidence was offered, on April 3, 1980, the OPM denied Scarborough's application.
On April 23, 1980, Scarborough filed a request for reconsideration of this decision with the OPM. In support of this request, Scarborough pointed to the uncontradicted evidence of his disability in the record and furnished an additional medical report by a psychiatrist. This report described Scarborough's significant emotional problems and recommended that Scarborough be retired from his job, noting that "... continuation at his present job could bring about potential disaster." Again, no contrary evidence was offered. Nevertheless, on July 31, 1980, the OPM upheld its earlier denial.
Scarborough then hired an attorney who filed Scarborough's appeal of the OPM's reconsideration decision to the MSPB on August 15, 1980, pursuant to 5 C.F.R. Part 831, Subpart L. At the Board's hearing on October 20, 1980, Scarborough's attorney presented the evidence which Scarborough had earlier brought before the OPM. Again, the OPM offered no evidence or argument to contradict Scarborough's claim of disability; the OPM did not even appear at the hearing.
Based on this record, on December 16, 1980, the Board's Presiding Official 3 reversed the OPM's denial of Scarborough's application for disability retirement. The Presiding Official held that the OPM had failed to support its decision by the requisite preponderance of the evidence. 4 Furthermore, the Presiding Official found that the evidence of record established Scarborough's disability for retirement purposes.
Upon the Board's reversal of the OPM's denial of Scarborough's application, 5 Scarborough's attorney filed a motion for attorney fees and costs in the amount of $888.09 pursuant to 5 U.S.C. Sec. 7701(g)(1). 6 Although by order dated February 5, 1981 the Board gave the OPM an opportunity to respond to this motion, the OPM chose not to file a response. On July 13, 1981, the Board's Presiding Official granted Scarborough's motion for attorney fees finding that a fee award was "warranted in the interest of justice" as required by Sec. 7701(g)(1) because the OPM "knew or should have known that it would not prevail on the merits in the appeal before the Board." 7 Scarborough v. OPM, MSPB No. AT831L8010211, at 6 (1981). This conclusion was based on the fact that all of the evidence available to the OPM showed that Scarborough was indeed totally disabled for his position. The decision noted that the OPM virtually stood mute in Scarborough's appeal to the Board, and it concluded that the OPM "presented its case so negligently as to make it a foregone conclusion that its decision would not be sustained on the record as established before the Board." Id.
On August 11, 1981, the OPM filed a petition for review of the Presiding Official's grant of attorney fees. 8 While the OPM petition was pending, the Board held in another case (Vergagni v. Office of Personnel Management 9) that 5 U.S.C. Sec. 7701(g)(1)'s authorization of attorney fees for successful appeals to the Board was not available in employee-initiated disability retirement cases. The Vergagni decision distinguished between involuntary retirement cases (initiated by the employing agency) and voluntary cases (initiated by the employee). The Board held that Sec. 7701(g)(1) authorized fee awards only in involuntary retirement cases because a fee award in a voluntary case could not be considered "in the interest of justice." Based on Vergagni, the Board then reconsidered the fee award made to Scarborough and granted the OPM's petition to vacate that award on July 30, 1982. The Board's interpretation of the governing fee authorization statute prompted this appeal.
The Circuit Courts of Appeal have split sharply in deciding whether the CSRA permits judicial review of voluntary disability retirement decisions. 10 Clearly, the OPM's initial determination is appealable to the MSPB. See 5 U.S.C. Sec. 8347(d)(1). The courts have not agreed, however, in determining whether this administrative appeal is a disability retirement petitioner's exclusive redress or if the federal courts are the ultimate decisionmakers. This disagreement stems from Sec. 8347(c), which provides that administrative determinations as to disability retirement benefits shall be "final and conclusive and are not subject to [judicial] review." Those decisions construing Sec. 8347(c), however, do not control our jurisdictional determination in the instant case. Scarborough appeals from a Board decision denying an award of attorney fees, not from an order upholding the OPM's denial of disability retirement benefits. In other words, the Board acted pursuant to Sec. 7701(g)(1), not Sec. 8347(d)(1). Therefore, Sec. 8347(c)'s "finality clause" is inapplicable. We hold that judicial review is appropriate under Sec. 7703(c). See Lindahl v. OPM, 718 F.2d 391, 408 (Fed.Cir.1983) (en banc) (Smith, J., dissenting) (citing Sterner, supra note 7); Bennett, supra note 7, 699 F.2d at 1141 (citing Secs. 7701, 7703). 11
Our decision that Sec. 7703 confers jurisdiction over this appeal is not altered by the amendment to Sec. 7703(b)(1) contained in the Federal Court Improvement Act of 1982 (FCIA), 28 U.S.C. Sec. 1295(a)(9), P.L. 97-164, 96 Stat. 25, Sec. 144. Former Sec. 7703(b)(1) provided that petitions to review final orders or decisions of the Board could be filed in any regional court of appeals. Under the FCIA, the United States Court of Appeals for the Federal Circuit now has exclusive jurisdiction over such appeals. The FCIA did not become effective, however, until October 1, 1982. Because Scarborough filed his petition for review before this date, 12 jurisdiction existed in the Eleventh Circuit at the time Scarborough filed the petition, and we retain such jurisdiction in all cases filed before the FCIA's effective date. See Lancellotti, supra note 11, 704 F.2d at 98. See also Onnen v. United States, 524 F.Supp. 1079, 1084 n. 8 (D.Neb.1981) ().
As a general rule, an administrative agency's construction of the statute it administers is entitled to substantial deference. United States v. Rutherford, 442 U.S. 544, 554, 99 S.Ct. 2470, 2476, 61 L.Ed.2d 68, 77 (1979). Consequently, the Board contends that its construction of the CSRA provisions in question is entitled to substantial deference, because the Board is charged with administering those statutes. See Brief for the Intervenor, at 6. Case law indicates, however, that a stricter standard of review is appropriate in this case. Courts have consistently engaged in more strenuous review where the disputed order or decision directly involves the construction of the organic statute under which the agency operates. See, e.g., National Distributing Co. v. United States Treasury Dep't, 626 F.2d 997, 1019 (D.C.Cir.1980).
Under this view, neither question of statutory construction presented in this case warrants...
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