Bloch v. Powell

• Decision Date: 21 November 2003
• Docket Number: No. 02-5311.,02-5311.
• Parties: Felix S. BLOCH, Appellant, v. Colin L. POWELL, Secretary of State, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

348 F.3d 1060

Felix S. BLOCH, Appellant, v. Colin L. POWELL, Secretary of State, Appellee.

No. 02-5311.

United States Court of Appeals, District of Columbia Circuit.

Argued October 14, 2003.

Decided November 21, 2003.

Appeal from the United States District Court for the District of Columbia, 227 F.Supp.2d 25, Ricardo M. Urbina, J.

COPYRIGHT MATERIAL OMITTED

Appeal from the United States District Court for the District of Columbia (No. 98cv00301).

Michael J. Kator argued the cause for appellant. With him on the briefs was William S. Aramony.

William G. Kanter, Deputy Director, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General, Roscoe C. Howard, Jr., U.S. Attorney, and Katherine S. Dawson, Attorney, U.S. Department of Justice.

Before: HENDERSON, TATEL, and ROBERTS, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROBERTS.

ROBERTS, Circuit Judge:

Appellant Felix S. Bloch was a member of the Senior Foreign Service when he resigned in 1990, after the Department of State initiated proceedings to remove him from the Service on national security grounds. In 1992, the Department notified Bloch that the Secretary of State had decided to withhold consent to Bloch's receipt of an immediate retirement annuity. Bloch then withdrew the compulsory retirement contributions he had made to the Foreign Service Retirement System. Bloch argues that the Secretary lacked discretion to withhold the immediate annuity, and that the denial of an immediate annuity constituted a deprivation of property without due process of law. Bloch also contends that his withdrawal of retirement contributions cannot be construed as a waiver of his right to a deferred annuity, because the Department did not inform him at that time that a deferred annuity was an available option. The Foreign Service Grievance Board held that the Secretary had the discretion to withhold the immediate annuity, that such action did not violate due process, and that Bloch had waived the deferred annuity when he elected the lump-sum withdrawal. The district court found that the Board's decision was not arbitrary or capricious. We affirm.

I.

Bloch, who joined the Foreign Service in 1958, was suspended without pay in February 1990 when the Federal Bureau of Investigation provided the Department of State with information indicating that his continued employment might not be consistent with national security. In a letter to Bloch, the Assistant Secretary of State for Diplomatic Security explained that Bloch, while serving overseas, had transferred national security information to an unauthorized individual, had undertaken counter-surveillance measures when traveling to meet with the individual, and had given false information to FBI agents conducting a national security investigation. Letter from Sheldon J. Krys to Felix S. Bloch (Feb. 7, 1990), at 1-2 (JA 171, SA 171a). No criminal charges were brought against Bloch, but the Department initiated a removal proceeding under 5 U.S.C. § 7532. That statute provides that the head of a federal agency may suspend an employee without pay "when he considers that action necessary in the interests of national security," id. § 7532(a), and may subsequently remove the employee after providing notice and an opportunity to respond (including a hearing, at the request of the employee) if the agency head "determines that removal is necessary or advisable in the interests of national security." Id. § 7532(b); see also id. § 7532(c).

Bloch requested the hearing to which he was entitled under the statute, but on July 3, 1990 — one week before the scheduled hearing date — Bloch tendered a letter of resignation to the Secretary. On the same day, Bloch withdrew his request for a hearing and submitted an application for voluntary retirement, including a request for payment of an immediate retirement annuity. On July 18, the Department notified him by letter that his offer to resign had been taken under advisement pending review by the Secretary. On November 5, the Department wrote to Bloch to inform him that the Secretary had determined that it was necessary and advisable to remove Bloch in the interests of national security, and that his removal from the Foreign Service would be effective that day.

By the summer of 1991, the Department had not yet responded to Bloch's application for an immediate annuity, and he renewed his request. In a letter dated April 2, 1992, the Department notified Bloch that the Secretary had "decided to withhold consent to [his] voluntary retirement and receipt of an immediate annuity." Letter from John F.W. Rogers, Under Secretary of State for Management, to Felix S. Bloch (Apr. 2, 1992), at 1 (JA 157). As authority for the Secretary's right to withhold consent, the letter cited Section 811 of the Foreign Service Act of 1980 (codified as amended at 22 U.S.C. § 4051), which provides:

Any participant who is at least 50 years of age and has 20 years of creditable service, including at least 5 years of service credit toward retirement under the [Foreign Service Retirement] System (excluding military and naval service), may on his or her own application and with the consent of the Secretary be retired from the Service and receive retirement benefits....

The Department indicated two reasons for withholding consent in Bloch's case: that his removal from the Foreign Service in November 1990 was an involuntary separation (rather than a voluntary retirement under Section 811) and that the "serious national security reasons underlying" his removal "furnish[ed] sufficient ground to withhold consent." Letter from John F.W. Rogers, supra, at 1 (JA 157). The letter also stated that "persons separated from the service without benefit of an annuity are entitled to receive a refund of contributions made to the retirement system during the period of employment," and indicated that Department staff would contact Bloch about completing the paperwork needed to receive the refund. Id.

On August 7, 1992, Bloch applied for the refund of his retirement contributions; in October of that year he received a lump sum of approximately $76,000. Some two and a half years later, in March 1995, he initiated a grievance with the Department alleging that the Secretary's April 1992 decision to withhold consent to his retirement and immediate annuity was arbitrary and capricious, violated pertinent statutory provisions, and contradicted a 1983 decision of the Foreign Service Grievance Board (FSGB). The Department rejected his grievance on February 20, 1996, holding that "there is nothing in Section 811 which would suggest that removal on national security grounds could not serve as a basis for the withholding of the consent of the Secretary." Letter from Ruth A. Whiteside, Deputy Assistant Secretary for Personnel, U.S. Department of State, to Herbert R. Rubenstein, Counsel for Felix Bloch (Feb. 20, 1996), at 3 (JA 108). The letter referenced and attached the April 2, 1992 letter to Bloch from Under Secretary Rogers, explaining the bases for the Secretary's decision to withhold consent. Id. at 3-4 (JA 108-09).

Having thus disposed of the question of Bloch's entitlement to an immediate annuity, the Department's letter went on to address whether he was entitled to a "discontinued service" annuity pursuant to Section 810 of the Act (codified at 22 U.S.C. § 4050). Section 810 provides that any Foreign Service member who "voluntarily separates" from the Service after at least 5 years of service credit can withdraw his contributions to the pension fund or leave them in place and receive an annuity beginning at age 60. Unlike Section 811, Section 810 does not require the consent of the Secretary for the disbursement of an annuity at age 60 (often a deferred annuity, as it would have been for Bloch, who was 54 years old when he left the Foreign Service). The Department concluded that Bloch was not entitled to a Section 810 annuity because he had waived his right to it when he withdrew his contributions in August 1992. As the Department emphasized, the form that Bloch submitted to request his refund included a prominent section entitled "NOTICE TO APPLICANT" stating that "[i]f you have five or more years of Federal civilian service you may be entitled to an annuity which will be forfeited by payment of this refund." Application for Refund of Compulsory Retirement Contributions (Aug. 7, 1992) (JA 141). Even in the absence of such a waiver, the Department noted, Bloch would not be entitled to a deferred annuity under Section 810 because the statute applied only to voluntary separations, and his separation in November 1990 was involuntary.

Bloch then filed a grievance with the FSGB. He relied principally on the Board's decision in a redacted (and thus untitled) 1983 case, No. G-083-054-AID-11 (FSGB 83-54), which interpreted a Department regulation contained in 3 Foreign Affairs Manual (FAM) § 763.6. The regulation governs "separation for cause" (defined as "separation from the Service because of the unsatisfactory performance of duties or for such other cause as will promote the efficiency of the Service," id. § 761.2(i)), and states that "[a]n employee is free to resign or retire at any time on a mutually agreed effective date, and to have the employee's reasons for resigning or retiring entered" on the employee's personnel record. Id. § 763.6(a). In FSGB 83-54, the Board considered the interplay between 3 FAM § 763.6 and the requirement in Section 811 that the Secretary consent to voluntary retirements. The case involved an employee who had sought to retire after removal proceedings had been initiated pursuant to Section 610 of the Act (codified as amended at 22 U.S.C. § 4010), a general separation-for-cause provision that establishes procedures for separating employees "for such cause as will promote the efficiency of the Service." Id. § 4010(a)(1). In FSGB...