Adams v. US, 86 Civ. 753 (RLC).

• Decision Date: 18 November 1987
• Docket Number: No. 86 Civ. 753 (RLC).,86 Civ. 753 (RLC).
• Parties: Stephen W. ADAMS, Plaintiff, v. UNITED STATES of America and The United States Department of the Army, Defendants.
• Court: U.S. District Court — Southern District of New York

673 F. Supp. 1249

Stephen W. ADAMS, Plaintiff, v. UNITED STATES of America and The United States Department of the Army, Defendants.

No. 86 Civ. 753 (RLC).

United States District Court, S.D. New York.

November 18, 1987.

Jacobowitz and Gubits, Walden, N.Y. (John H. Thomas, Jr. and Lawrence H. Weintraub, of counsel), for plaintiff.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City (Chad A. Vignola, Sp. Asst. U.S. Atty., of counsel), for defendants.

OPINION

ROBERT L. CARTER, District Judge.

Stephen W. Adams served as the manager of the Hotel Thayer, a nonappropriated fund instrumentality ("NAFI")¹ of the United States Military Academy at West Point, New York, from March 21, 1980, until September 7, 1984. He seeks review in this court, pursuant to 5 U.S.C. §§ 701-706, of the final determination of the Department of the Army discharging him from that position.

Plaintiff's complaint, amended September 15, 1986, alleges that the factual findings upon which the agency sustained three charges of breach of regulation against him are not supported by substantial evidence, and that the penalty of separation is not justified. Plaintiff also makes a claim under the Freedom of Information Act ("FOIA"). 5 U.S.C. § 552. Upon the administrative record before the court, each party asserts entitlement to summary judgment.²

I. ADMINISTRATIVE PROCEEDINGS

On February 14, 1984, the Army Office of the Inspector General ("IG") informed Colonel Ernest E. Cross, Chief of Staff/Deputy Post Commander at West Point, of allegations of regulatory abuse at the Hotel. Admin.Rec. Part I, Tab 4(K), exh. A.³ Col. Cross thereupon directed the IG to conduct an inquiry into those allegations. Id. The IG's Report of Inquiry, completed on March 21, 1984, forms the subject matter of plaintiff's FOIA claim. Army regulations provide that an IG Report of Inquiry may be consulted by "the appropriate decisionmaking authority ... in making decisions concerning matters affecting mission performance and the state of the economy, efficiency and discipline" of the Department of the Army, Army Regulation ("AR") 20-1, ¶ 1-28(a), but may not be used "as the basis for adverse action against individuals," except with special authorization. Id. at ¶ 1-30(b)(1).

Following the completion of the IG Report, Lieutenant Col. Roger A. Grugle, plaintiff's supervisor, prepared to recommend disciplinary action against plaintiff, namely, a period of suspension without pay.⁴ HT at 117. Though NAFI personnel regulations entrust matters of discipline, in the first instance, to an employee's supervisor, AR 215-3, ¶ 7-4(d); see also id., at ¶ 7-4(a), Col. Edward L. Aschliman withdrew the matter from Grugle.⁵ HT at 67-8, 128, 199; see Admin. Rec. I, 9. Col. Aschliman himself then issued plaintiff a notice of proposed separation for cause, dated July 19, 1984. Admin.Rec. I, 8. Col. Aschliman based his proposed penalty on five charges, three of which are relevant here:⁶

a. You personally disregarded over-the-counter procurement procedures prescribed by paragraph 3-7, Department of the Army Pamphlet 27-154, in that you exceeded the $500 limitation on such orders by issuing the following purchase orders on the dates and for the amounts indicated:

—Purchase Order # 830460, dated April 29, 1983, in the amount of $1700.

—Purchase Order # 830507, dated May 4, 1983, in the amount of $696.

—Purchase Order # 839020, dated September 13, 1983, in the amount of $2,022.50.

—Purchase Order # HT XXX-XXX-X, dated March 3, 1983, in the amount of $4,805.50.

b. You permitted your Assistant Manager, Mr. Armand Nasution, to issue the following purchase orders, on the dates and for the amounts indicated, notwithstanding the fact that you knew or should have known that he was not a certified contracting officer properly appointed in accordance with paragraph 1-3, Department of the Army Pamphlet 27-154 to wit:

—Purchase Order # 836068, dated June 28, 1983, in the amount of $2,000.

—Purchase Order # 838063, dated August 16, 1983, in the amount of $1,200.

—Purchase Order # 8410-009, dated October 6, 1983, in the amount of $2,298.41.

—Purchase Order # 8410-013, dated October 7, 1983, in the amount of $2,298.41.

. . . . .

d. During the period April 10 through May 15, 1984, you improperly permitted the use of a Hotel Thayer vehicle for the personal and private use of your Assistant Manager, Mr. Armand Nasution, in violation of paragraph 10-21b(1), Army Regulation 215-1, paragraph 2-4, Army Regulation 600-50, and Hotel Thayer Standard Operating Procedure, Annex W.

Col. Aschliman's notice informed plaintiff of his opportunity to respond to the charges against him.

In response, plaintiff made an oral presentation and submitted a written reply to Col. Cross, the official responsible for ruling on Col. Aschliman's proposed penalty. By letter dated September 6, 1984, Col. Cross conveyed his finding that four of the five "reasons mentioned in Col. Aschliman's proposal ... are fully supported by the evidence and warrant that you be removed." Admin.Rec. I, 2 at 3.

Plaintiff appealed Col. Cross's determination to Lt. General Willard W. Scott, Jr., Superintendent of the West Point Military Academy. Lt. General Scott referred the matter to the U.S. Army Civilian Appellate Review Agency ("USACARA"), which held a hearing on January 9-10, 1985. The USACARA hearing examiner issued her Report of Findings and Recommendation on February 28, 1985. Admin.Rec. II (hereinafter "USACARA Report"). The USACARA Report found that charges "a" and "d" were supported by the weight of the evidence, while charges "b" and "e" were not. Reasoning that "the penalty of separation was originally derived from considering five offenses in concert, one of which was later dropped by Col. Cross without a reduction in the penalty," the hearing examiner recommended limiting the penalty to a fourteen-day suspension. USACARA Report at 16. The examiner also ruled, on the basis of a "cursory review" of the IG Report of Inquiry, that plaintiff's ignorance of its contents "has not affected his right to defend himself." Id. at 3.

Regulations require "commanders and heads of activities" to

Implement recommendations in USACARO reports of findings on grievances and appeals unless there is sufficient justification for a higher level review....

AR 10-57, ¶ 4(b)(4). Pursuant to AR 215-3, ¶ 8-21(f), however, Lt. General Scott, "objected to the examiner's recommendation" and forwarded plaintiff's appeal "to the head of the next higher level in the chain of command," Lt. General Robert M. Elton. By regulation, Lt. General Elton's decision would constitute final agency action. Id. Plaintiff submitted written "rebuttal" to Lt. General Scott's "objection." Admin. Rec. III, "Objections and Rebuttal".

By letter dated May 15, 1985, Lt. General Elton found that charges "a", "b" and "d" were sustained. Admin.Rec. III, "Final Decision" (hereinafter "Final Decision"). He reinstated the penalty of separation, explaining that

The position of Hotel Manager required Mr. Adams to be familiar with the rules and regulations governing the hotel operation and be responsible for all actions taken within the hotel. The charges I sustained involve the failure on the part of Mr. Adams to properly comply with the regulations governing the operation of the hotel. These failures taken together form a basis for removing him from the position. For the Thayer Hotel to operate efficiently and within all government rules and regulations, the manager must carefully supervise his subordinates and tightly control the operation. In failing to do this, Mr. Adams has lost the trust and confidence of his superiors and his ability to perform as the Hotel Thayer manager. On this basis I sustain the decision to remove Mr. Adams from his position as Hotel Thayer manager.

Id. at 1.

By letter dated January 2, 1985, one week prior to the hearing, attorney for plaintiff requested release of the IG Report of Inquiry of March 21, 1984, pursuant to FOIA. The Office of the Inspector General in Washington, D.C., responded on January 14 with an initial denial, claiming exemption under 5 U.S.C. § 552(b)(5) & (7). Plaintiff appealed this initial denial to the Office of the General Counsel by letter dated February 22. The appeal was denied on April 19, and plaintiff seeks review here of that final agency action.⁷ On September 24, 1987, the court requested the Assistant U.S. Attorney to produce the document for in camera inspection, pursuant to 5 U.S.C. § 552(a)(4)(B).

II. THE CHARGES

The court's role in reviewing agency action is delimited by § 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706, which provides in relevant part that

The reviewing court shall ... hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... or unsupported by substantial evidence....

Id. The words of the statute must be applied "in the light of understanding of the basic objectives of review." 5 Davis, Admin.L. Treatise § 29:3 (2d ed. 1984). "The balance to be struck is that between the goal of efficient and effective agency action, on the one hand, and the value of judicial review in ensuring the rationality and fairness of agency decisionmaking, on the other." Natural Resources Defense Council, Inc. v. SEC, 606 F.2d 1031, 1048 (D.C.Cir.1979).

Substantial evidence is "`such relevant evidence as a reasonable mind might accept as adequate to support a conclusion'." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966) (quoting Consolidated Edison Co. of New York v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938)). Substantial evidence review is highly deferential, requiring something "less than the weight of the evidence" to sustain an agency's findings. Id. 383 U.S. at 620, 86 S.Ct. at 1026. Here, plaintiff concedes that he "was...