Aviles v. Merit Sys. Prot. Bd.

• Decision Date: 24 August 2015
• Docket Number: No. 14–60645.,14–60645.
• Citation: 799 F.3d 457
• Parties: Jorge A. AVILES, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

799 F.3d 457

Jorge A. AVILES, Petitioner

v.MERIT SYSTEMS PROTECTION BOARD, Respondent.

No. 14–60645.

United States Court of Appeals, Fifth Circuit.

Aug. 24, 2015.

Alfonso Kennard, Jr., Esq. (argued), Acting Assistant Attorney General, Monica Nunez–Garza, Houston, TX, for Petitioner.

Katrina Marie Lederer, Attorney Advisor (argued), Bryan Polisuk, Washington, DC, Michael L. Salyards, Dallas, TX, for Respondent.

Emma E. Bond, Trial Atty (argued), Allison Kidd–Miller, Washington, DC, for Intervenor.

Petition for review of a final order from the Merits Systems Protection Board.

Before CLEMENT, PRADO, and ELROD, Circuit Judges.

Opinion

EDWARD C. PRADO, Circuit Judge:

Former IRS agent Jorge Aviles asserts that he was fired in retaliation for protected whistleblowing. Aviles alleges that he uncovered that ExxonMobil Corporation (“Exxon”) had perpetrated a $500 million tax fraud and that IRS officials covered it up. Aviles claims he disclosed this information to his supervisors and that he was ultimately fired in retaliation for this protected disclosure in violation of the Whistleblower Protection Act. An administrative law judge (ALJ) dismissed Aviles's appeal. The ALJ found that—aside from Aviles's “vague and conclusory” allegations of a cover-up—Aviles failed to allege that the government was involved in Exxon's alleged wrongdoing. Over a dissent, the Merit Systems Protection Board (“MSPB” or “the Board”) affirmed. Because we agree with the Board's finding that Aviles failed to make a nonfrivolous allegation of government involvement in Exxon's alleged wrongdoing, we conclude that Aviles's disclosure was not protected and deny his petition.

I. BACKGROUND

This is the first direct appeal to the Fifth Circuit from a Merit Systems Protection Board adjudication in the wake of the 2012 amendments to the Whistleblower Protection Act. Aviles grounds his petition for review in the drafting history of the Whistleblower Protection Act; he argues that Congress has repeatedly expanded the definition of protected whistleblowing activities. Accordingly, before reviewing the underlying facts and procedural background, we provide a brief overview of the drafting history and the statutory scheme governing Aviles's claim.

A. Legal Background and Statutory Framework

The Civil Service Reform Act of 1978 established statutory protections to encourage federal employees to disclose government illegality, waste, fraud, and abuse; and also established the Merit Systems Protection Board as an independent agency to adjudicate these claims. Pub.L. No. 95–454, §§ 101, 202, 92 Stat. 1111, 1113–14, 1121–31. Congress later passed the Whistleblower Protection Act (WPA) of 1989, Pub.L. No. 101–12, 103 Stat. 16. The WPA proscribes retaliation against a federal employee who discloses what the employee reasonably believes evidences a violation of any law, rule, or regulation, gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety. See 5 U.S.C. § 2302(b)(8).

From its inception in 1982 until recently, the Federal Circuit exercised exclusive jurisdiction over petitions for review of MSPB adjudications that involved only federal-employee whistleblower claims. King v. Dep't of the Army, 570 Fed.Appx. 863, 864 (11th Cir.2014) (per curiam). These claims were directly appealable to the Federal Circuit and reviewed for arbitrariness or capriciousness and for substantial evidence. Id. at 865 ; see also 5 U.S.C. § 7703(c).

Concerned that the Federal Circuit and the MSPB had interpreted the WPA's definition of protected disclosures too narrowly, Congress amended the statute in 1994. See Act of Oct. 29, 1994, Pub.L. No. 103–424, 108 Stat. 4361 ; S.Rep. No. 103–358, at 8–10 (1994) (criticizing the Federal Circuit's “construction of the legislative history” and declaring that “the Board and the courts should not erect barriers to disclosures which will limit the necessary flow of information from employees who have knowledge of government wrongdoing”).

In 2012, Congress again significantly amended the WPA through the Whistleblower Protection Enhancement Act (WPEA) to address similar concerns. This time, to encourage diverse appellate review—which leads to circuit splits (facilitating Supreme Court review), S.Rep. No. 112–155, at 11 (2012)—Congress also expanded judicial review to all circuits, with this provision of the law scheduled to “sunset” five years later, 5 U.S.C. § 7703(b)(1)(B) ; see also All Circuit Review Extension Act, Pub.L. No. 113–170, 128 Stat. 1894 (extending the sunset of all-circuit review to five years instead of two years after enactment).

B. Factual and Procedural Background

The following factual background is essentially undisputed and is drawn from the administrative record of the MSPB adjudication. Aviles worked as an International Examiner at the IRS's Large and Mid–Sized Business Division in Houston, Texas. As part of his duties, Aviles worked onsite at Exxon's facility auditing its international tax filings. In September 2010, Aviles received a letter from the Acting Territory Manager proposing that he be “removed from his position for: 1) absence without leave for a total of 552 hours; 2) failure to follow a managerial directive to report to work; and 3) providing misleading statements in matters of official interest.” Later that year, the proposal for Aviles's removal was sustained, and Aviles's employment with the IRS ended.

In 2013, Aviles filed an individual right of action (IRA) appeal with the MSPB, asserting that he was removed in retaliation for protected whistleblowing. Specifically, Aviles alleged that he filed a complaint with the Office of Special Counsel (OSC)¹ in which he explained that he had disclosed to his supervisor on February 2, 2010, “[i]ncome tax fraud and blockage of computer committed by ExxonMobil Corporation and[ ] the involvement by IRS management team in helping to cover it up.” Aviles also alleged that on February 16, 2010, he disclosed “income tax fraud in excess of US$ 500 million for the tax years 2006 and 2007” on the part of Exxon to the Commissioner of the IRS and other IRS officials. Aviles's removal process started months later in September 2010, and he was removed in November of that year.

1. MSPB Proceeding

The ALJ found that 5 U.S.C. § 2302(b)(8)'s protections “safeguard whistleblowers against retaliation for the disclosure of governmental wrongdoing,” and dismissed Aviles's claim because he only alleged “tax fraud by a private entity.” Importantly, the ALJ relied in part on the Federal Circuit's decision in Willis v. Department of Agriculture, 141 F.3d 1139 (Fed.Cir.1998) in making this ruling. The ALJ noted that “[a]llegations that particular government officials allowed or facilitated wrongful conduct by a private organization” may be protected. But the ALJ found that Aviles's “vague and speculative assertion of possible unspecified ‘involvement’ by unidentified agency officials in alleged private misconduct by a taxpayer does not constitute a nonfrivolous allegation of whistleblowing activity.” Accordingly, the ALJ dismissed Aviles's claim for lack of jurisdiction, and the MSPB affirmed 2–1 over a dissent in a short, nonprecedential final order.

2. The Dissent

Vice Chairman Wagner dissented, and Aviles's petition for review to this Court echoes many of the points raised in the dissent. Vice Chairman Wagner concluded that, in enacting the WPEA in 2012, “Congress contemplated that its protection would extend to disclosures of wrongdoing by private entities made by federal employees in the normal course of duties.” She argued that this conclusion follows from the text of § 2302(f), through which Congress “made clear that the statutory definition of a ‘protected disclosure’ includes disclosures made by a federal employee in the normal course of duties.” She bolstered her argument by relying on the legislative history, which she claims evinces Congress's intent in part to “overturn the ... Federal Circuit's decision in Willis, ” a decision that, as noted, the ALJ relied on.

* * *

Aviles timely petitioned for review of the MSPB's decision directly to this Court.

II. JURISDICTION AND STANDARD OF REVIEW

As noted above, the Federal Circuit previously had exclusive jurisdiction to hear petitions for review of MSPB decisions. See Williams v. Wynne, 533 F.3d 360, 373 n. 12 (5th Cir.2008) (citing a previous version of 5 U.S.C. § 7703(b)(1) (2006) ).² In 2012, Congress extended jurisdiction to all U.S. Courts of Appeals when it passed the Whistleblower Protection Enhancement Act of 2012 (WPEA), Pub.L. No. 112–199, § 108(a), 126 Stat. 1468 (codified as amended at 5 U.S.C. § 7703(b)(1) ). Now, we have jurisdiction to review a final order or decision from the MSPB under 5 U.S.C. § 7703(b)(1)(B).

Ordinarily, we review the merits of whistleblower-retaliation claims presented to the MSPB based solely on the administrative record “and will uphold the Merit Systems Protection Board's determinations unless they are clearly arbitrary and capricious, unsupported by substantial evidence or otherwise not in accordance with law.” Williams, 533 F.3d at 373. But this Court has not yet had an opportunity to review a threshold jurisdictional determination.

Since this Court has not previously regularly reviewed MSPB decisions, we look to the Federal Circuit for guidance. The Federal Circuit reviews de novo the question whether the MSPB had jurisdiction to adjudicate a case, reasoning that “[w]hether jurisdiction exists is a question of law.” Waldau v. Merit Sys. Prot. Bd., 19 F.3d 1395, 1398 (Fed.Cir.1994).³

However, the Federal Circuit's approach to MSPB jurisdictional determinations may have been called into question by the Supreme Court's recent decision in City of Arlington, Texas v. FCC, ––– U.S. ––––, 133 S.Ct. 1863, –––L.Ed.2d –––– (2013). The Court explained that “the distinction between ‘jurisdictional’ and ‘nonjurisdictional’ interpretations is a mirage,” id....