Delgado v. Merit Sys. Prot. Bd., 16-1313

Citation880 F.3d 913
Decision Date29 January 2018
Docket NumberNo. 16-1313,16-1313
Parties Adam DELGADO, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Adam Delgado, Pro Se, P.O. Box 388565 Chicago, IL 60638 for Petitioner

Stephen William Fung, Bryan G. Polisuk, Merit Systems Protection Board, Office of the General Counsel, Room 612, 1615 M Street N.W., Washington, DC 20419 for Respondent

Before Rovner, Williams,** and Hamilton, Circuit Judges.

Hamilton, Circuit Judge.

This federal whistleblower case presents our first review of a decision of the Merit Systems Protection Board since Congress expanded judicial review beyond the Federal Circuit, at least temporarily. Petitioner Adam Delgado is a special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives. He alleges that his supervisors retaliated against him after he reported his suspicions that another agent had improperly shot at a fleeing suspect, provided an inaccurate report of the incident, and testified falsely about it in a federal criminal trial.

Delgado filed a whistleblower complaint with the Office of Special Counsel (OSC), the federal office charged with investigating allegations that an agency has violated the Whistleblower Protection Act by retaliating against its employee for, as relevant here, disclosing "any violation of law, rule, or regulation." See 5 U.S.C. §§ 1214(a)(1)(A), 2302(b)(8). The OSC declined to investigate. It told Delgado that he had not made a disclosure protected by the statute and that he had failed to provide sufficient evidence to support his allegations of retaliation.

Delgado then appealed to the Merit Systems Protection Board, but the Board dismissed his appeal for lack of jurisdiction. The Board reasoned that Delgado had not satisfied the requirement that he "seek corrective action before the Special Counsel before seeking corrective action from the Board." See 5 U.S.C. § 1214(a)(3). According to the Board, Delgado could not prove that he made a "protected disclosure" or gave the OSC enough information to launch an investigation. Delgado has petitioned for judicial review of the dismissal of his appeal. See 5 U.S.C. § 7703(a). We find that the OSC and the Board applied unduly stringent and, we believe, arbitrary requirements to Delgado.

First, the Board dismissed Delgado’s appeal because he did not include a copy of his complaint to the OSC. Applicable statutes and rules do not impose that requirement, and if there were any question about what Delgado submitted to the OSC, the easiest way to answer it would be to obtain the complaint from the OSC itself.

Second, the OSC rejected Delgado’s complaint on the ground that he failed to offer sufficient evidence that he made a disclosure protected under 5 U.S.C. § 2302(b)(8). We disagree. Delgado’s disclosure of suspected wrongdoing either explicitly accused another federal employee of perjury or provided sufficient evidence to justify such a suspicion worthy of consideration by superiors. Either version would be a protected disclosure.

Third, the OSC rejected Delgado’s complaint because he did not provide definitive proof that he was a victim of retaliation. We hold that, like other statutes with exhaustion provisions, the Whistleblower Protection Act requires only that a complainant fairly present his claim with enough specificity to enable the agency to investigate. The Act itself and its implementing regulations do not require a whistleblower to prove his allegations before the OSC—otherwise, what need could there be for an investigation? The Board thus erred in finding that Delgado failed to exhaust administrative remedies with the OSC. We grant the petition for review and remand to the Board for further proceedings consistent with this opinion, without commenting on the ultimate merit of Delgado’s underlying accusations or his claim of unlawful retaliation.

I. Factual and Procedural Background

The "All-Circuit Review" provision of the Whistleblower Protection Enhancement Act took effect in December 2012. See 5 U.S.C. § 7703(b)(1)(B). It expanded judicial review from the Federal Circuit to "any court of appeals of competent jurisdiction" beginning December 2012, subject to a five-year sunset. The statute instructs us to review the record and to set aside any Board action, findings, or conclusions found to be arbitrary, capricious, an abuse of discretion, not in accordance with law, obtained without proper procedures, or unsupported by substantial evidence. § 7703(c). The Board’s conclusion that Delgado failed to exhaust his remedies before the OSC was not based on any factual findings made after an evidentiary hearing, so whether the issue is treated as jurisdictional or not, we review the conclusion de novo. See Waldau v. Merit Sys. Prot. Bd. , 19 F.3d 1395, 1398 (Fed. Cir. 1994) ; see also Aviles v. Merit Sys. Prot. Bd. , 799 F.3d 457, 461–62 (5th Cir. 2015).

A. Delgado’s Disclosures of Alleged Wrongdoing

This case is not Delgado’s first experience with whistleblowing at ATF. In 2011 the agency settled a previous case Delgado had brought before the Board concerning events in Puerto Rico. As part of the settlement, ATF agreed to transfer him to the Chicago Field Division. Delgado contends that he has endured a hostile work environment from the start and learned shortly after arriving that a former co-worker in Puerto Rico had tipped off a Chicago agent, Chris Labno, about the reason for his transfer. Delgado says that his fellow agents’ acrimonious behavior, including one supervisor’s frequent use of the word "rat" while he was in earshot, led him to complain informally soon after arriving.

Delgado’s current complaint stems from an incident in January 2012, about six months after he joined ATF in Chicago. Delgado was conducting surveillance with other agents while Special Agent Labno, who was undercover, tried to buy heroin from one Robert Jefferson. Delgado watched as two other men (not Jefferson) approached Labno in his undercover vehicle and robbed him of the purchase money at gunpoint before any heroin was delivered. Delgado reports that he then saw Labno jump from the car and shoot twice in the direction of the fleeing thieves, an action he believes was "not justified and ... could have placed responding agents and innocent bystanders at risk of being injured."

The armed robber was caught, but federal prosecutors concluded that he had colluded with Jefferson, the original target of the undercover operation. Both men were charged with robbing Special Agent Labno of money belonging to the United States. See 18 U.S.C. § 2114(a). At Jefferson’s trial, prosecutors called as witnesses Delgado, Labno, and two other agents who had participated in the surveillance. The agents were not permitted to hear one another’s testimony, but during closing arguments, Delgado learned that Labno’s version of events differed significantly from that of his colleagues. Jefferson’s defense lawyer outlined the discrepancies and, according to Delgado, said "something along the lines of, ‘I am not saying Labno is lying but ...." Delgado also reports that a court security officer approached him during a break from closing arguments and criticized the agents for being unable to "get your stories straight."

Although Delgado never obtained a transcript of Labno’s testimony, he learned more about its substance when he found online the district court’s decision denying a motion for acquittal that Jefferson had filed. Jefferson’s motion had argued that the "degree to which the testimony of the government’s own witnesses completely contradicted Agent Labno ... renders this portion of [his] testimony so unreliable that no reasonable jury could have relied upon it." See United States v. Jefferson , No. 12 CR 50, 2014 WL 222726, at *8 (N.D. Ill. Jan. 21, 2014). The district judge agreed that Labno’s testimony conflicted with that of his colleagues, but she denied the motion because it was "not for the court to assess the credibility of witnesses." Id.

Delgado had written an incident report immediately after the shooting. Even before Jefferson’s trial, he says, other agents were critical of his report. Then, shortly after Jefferson’s conviction, someone left at his desk training materials on report writing, which he interpreted as dissatisfaction with his report. He also found holes that appeared to have been made with a knife in a suit he left hanging in his office. Delgado further alleges that after the trial, Labno created a presentation based on the incident to train fellow agents on the use of weapons. He included a slide labeling the United States Attorney’s Office for the Northern District of Illinois "Cowards-R-US" because it did not charge all of the defendants with the charges Labno deemed appropriate.

By Delgado’s account, on more than one occasion he reported all of this to his supervisors but nothing was done. On one occasion that has been the focus of the administrative process, Delgado told two superiors, John Durastanti and Rayfield Roundtree, of Special Agent Labno’s conflicting sworn testimony. Delgado says that he made clear to his superiors at least that he believed Labno might have committed perjury in his trial testimony. In at least one version submitted to the Board itself, Delgado told the Board he believed Labno did commit perjury.

Two days later, Roundtree called Delgado to his office to tell him that his own boss, the Special Agent in Charge of the Chicago Field Division, had been informed about Delgado’s allegation but declined to pursue the matter because Delgado "had no proof" and "did not review the transcript of Labno’s testimony." Durastanti then told Delgado not to speak to other agents about his suspicions and asked whether Delgado understood the significance of what he was saying. Delgado confirmed that he did. No investigation was begun or other action taken. Delgado believes that Labno, who had been "publicly lauded" by...

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