Brown v. United States

• Decision Date: 14 June 1968
• Docket Number: No. 18-66.,18-66.
• Citation: 184 Ct. Cl. 501,396 F.2d 989
• Parties: Francis G. BROWN v. The UNITED STATES.
• Court: U.S. Claims Court

184 Ct. Cl. 501, 396 F.2d 989 (1968)

Francis G. BROWN v. The UNITED STATES.

No. 18-66.

United States Court of Claims.

June 14, 1968.

Thomas H. King, Washington, D. C., attorney of record, for plaintiff. Neil B. Kabatchnick, Washington, D. C., of counsel.

LeRoy Southmayd, Jr., Washington, D. C., with whom was Asst. Atty. Gen., Edwin L. Weisl, Jr., for defendant.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

ON DEFENDANT'S REQUEST FOR REVIEW OF THE TRIAL COMMISSIONER'S ORDER DENYING DEFENDANT'S MOTION TO PRECLUDE THE ADMISSION OF DE NOVO EVIDENCE

DAVIS, Judge.

In Beckham v. United States, 375 F. 2d 782, 179 Ct.Cl. 539, petition for writ of certiorari dismissed by stipulation, 389 U.S. 1011, 88 S.Ct. 583, 19 L.Ed. 2d 613 (1967),¹ we rejected the Government's revived contention that, in reviewing service decisions on military disability-retirement pay, this court must limit its consideration to the administrative record and may not take account of any de novo evidence. The defendant has again raised the issue. We take the occasion to reaffirm and elaborate the views we expressed in Beckham.

Plaintiff was retired from the Army for years of service. Though he allegedly requested, prior to retirement, that he be evaluated for service-connected physical disability, he has never appeared before a Physical Evaluation Board. His two applications for relief to the Army Board for the Correction of Military Records were denied, without a hearing, in summary statements of rejection.² The administrative record consists of Army records and the written materials which plaintiff furnished to the Correction Board in asking for a hearing. After this suit was filed and the case referred to the trial commissioner, the defendant filed a motion to preclude the introduction of de novo evidence, which the commissioner denied on the authority of Beckham. The Government requests review of that ruling.

The customary rationale of the limited scope of judicial review of agency determinations is that deference should be accorded the judgment of an administrative decision-maker, either because the legislature granted it a measure of discretion on facts or policy, or because of the agency's expertise in handling the subject matter. Most often, this leads to confining court intervention to instances in which the administrative decision was arbitrary and capricious, inconsistent with applicable statutes or regulations, or unsupported by substantial evidence. E.g., K. Davis, Administrative Law Treatise § 29.01 (1958).

Since Congress has vested the Service Secretaries (acting on the recommendation of the various physical disability³ and correction boards) with such discretion in determining eligibility for disability-retired pay, we have always adhered to that scope of review.⁴ We have also, since we first began dealing with disability retirement two decades ago, regularly considered evidence over and above that presented before the administrative boards if a party wishes to offer it. See Appendix, infra, for a list of cases which is not exhaustive. This practice has prevailed over the years, with only sporadic objection and with no real deviation by the court.⁵ This coupling of the substantial-evidence standard with the acceptance of new evidence has not, in the view we have expressed, encroached on the administrative process. As we put it in Beckham, 375 F.2d at 785, 179 Ct.Cl. at 543-544:

In reviewing Correction Board decisions or decisions of the other boards this court has not substituted its judgment for that of the Board. Only where the decision of the Board is arbitrary, capricious, or unsupported by substantial evidence has this court interfered with the findings of the Board. * * * We ask if the decision meets the test when compared with all available evidence — that is both the administrative record and the de novo evidence.

I.

The Government's main position is that this ingrained procedure in the military disability-retirement field is proved wrong by the Supreme Court's ruling in United States v. Carlo Bianchi & Co., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963), that we cannot take new evidence in contract disputes controlled by the Wunderlich Act, 41 U.S.C. §§ 321-22 (1964). The Court's holding, however, was based explicitly on the particular wording, purpose, and legislative history of that statute, which showed that Congress intended to change our pre-existing mode of deciding those contract cases.⁶ No rigid, inexorable principles of judicial review were announced or sought to be established. The opinion opens with the statement that "this case involves the interpretation and application of the `Wunderlich Act'" (373 U.S. at 709, 83 S.Ct. at 1411), and throughout is carefully restricted to "a suit governed by this statute" (373 U.S. at 710, 83 S.Ct. at 1411). The Court goes on to construe the specific words Congress used in providing for court scrutiny of contract-board determinations, against the particular legislative history and background of the statutory proposal. The result turned on the Court's evaluation of that special combination.

The problem now before us is quite different. The Wunderlich Act, of course, has no application to disability-retirement cases. And the statutes granting disability-retirement pay (10 U.S.C. §§ 1201, 1204, 1210, 1215, 1401 (1964)) and authorizing the creation of the disability-retirement boards (10 U. S.C. §§ 1214, 1216, 1554 (1964)) and Correction Boards (10 U.S.C. § 1552 (1964)) do not refer to judicial review, much less to the procedure to be used on review.⁷ Nor is there any other indication that Congress, at any time, intended to restrict our consideration to the evidence before the administrative bodies. The issue cannot be resolved by searching for an actual legislative intention.

The Government recognizes this, but says that nevertheless Bianchi lays down the overriding doctrine that, whenever an agency determination is to be tested by the standard of arbitrariness and substantial evidence, the administrative record cannot be augmented. But the Court's statement that the substantial-evidence test "goes to the reasonableness of what the agency did on the basis of the evidence before it" (373 U.S. at 715, 83 S.Ct. at 1414 (original emphasis)) was not, in our estimation, intended to imply that de novo evidence is necessarily incompatible with a proper application of that standard. The Court was merely observing that the "customary meaning" of the language in the Wunderlich Act ("capricious", "arbitrary", "not supported by substantial evidence") is review on the administrative record. 373 U.S. at 715, 83 S.Ct. 1409. Using this together with the revealing legislative history, it concluded that Congress affirmatively intended to adopt this "customary meaning" in that piece of legislation. It does not follow that review on the administrative record alone is the sole possibility in every type of case, no matter how different the pertinent factors or the background.

Though judicial review limited to the evidence adduced before the agency is the usual practice, there are exceptions, comparable to our own, in which the courts have deferred to the decisions and findings of an administrator while allowing the parties to introduce evidence that may or may not have been presented at the administrative level. The most common in the federal system are civil actions to obtain patents or to contest a Patent Office interference determination,⁸ and tax suits, the latter including cases, in which de novo evidence is offered to prove that the Commissioner of Internal Revenue abused discretion specifically delegated to him, as well as cases in which the taxpayer seeks to overcome the general presumption running in favor of the Revenue Service's assessments.⁹

In other fields, a number of courts adhering to a standard of judicial review similar to that we apply in disability-retirement cases have utilized extra-administrative record evidence. See e. g., Jordan v. United Ins. Co. of America, 110 U.S.App.D.C. 112, 289 F.2d 778 (1961). Sometimes discretion is left with the trier to admit it when the administrative record is incomplete or when required by the ends of justice.¹⁰ On other occasions, de novo evidence has been accepted, apparently as a matter of course, by courts cautioning, in language paralleling Beckham, that the evidence does not license a court to "try the matter in controversy de novo and substitute its own findings" for those of the administrator. State v. Northern Pac. Ry., 229 Minn. 312, 39 N.W. 2d 752, 757 (Minn. 1949).¹¹ A recent example of full de novo review is the Bank Merger Act of 1966, 12 U.S.C. § 1828 (1964 Supp. II), dealing with approvals by the Comptroller of the Currency of bank mergers. The Supreme Court has held, on the basis of the Act and its individual background, that the reviewing court is entirely free. United States v. First City Nat'l Bank of Houston, 386 U.S. 361, 366-370, 87 S.Ct. 1088, 18 L.Ed.2d 151 (1967).

We cite these instances not as controlling precedents but to indicate that the question of allowing de novo evidence in a particular kind of case — especially where, as here, the statute is silent — is to be determined by an evaluation of the individual factors converging on the problem of review in that specific kind of suit. See L. Jaffe, Judicial Control of Administrative Action 619-23 (1965). If Congress has not spoken, there is no mechanical or reflex solution. The result should depend, not on the quotation of a broad general rule, but on the insight gained from a hard look at the judicial function vis-à-vis the administrative role in that particular category of case.¹²

II.

The initial decision on a serviceman's entitlement to disability retired pay is theoretically made by the Secretary of Army (or other Service). E. g., Heins v. United States, 149 F.Supp. 331, 335, 137 Ct.Cl....