Gottlieb v. Pena

Decision Date06 December 1994
Docket Number93-5183,Nos. 93-5182,s. 93-5182
PartiesHyman G. GOTTLIEB, Appellee, v. Federico F. PENA, Secretary of Transportation, Appellant. Robert L. GAZLAY, Appellee, v. Federico F. PENA, Secretary of Transportation, Appellant.
CourtU.S. Court of Appeals — District of Columbia Circuit

R. Craig Lawrence, Asst. U.S. Atty., Washington, DC, argued the cause for appellant. With him on the briefs were Eric H. Holder, Jr., U.S. Atty., John D. Bates and Thomas S. Rees, Asst. U.S. Attys., Paul M. Geier, Asst. Gen. Counsel, Dale C. Andrews, Deputy Asst. Gen. Counsel, and Peter M. Plocki, Atty., U.S. Dept. of Transp., Washington, DC.

Eugene R. Fidell, Washington, DC, argued the cause and filed the brief for appellees.

Before: SILBERMAN, BUCKLEY, and ROGERS, Circuit Judges.

Opinion for the court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

The principal issue in these appeals is whether the statutory ten-month period for final action on applications for correction of Coast Guard records is directory or mandatory. 1 The Secretary of Transportation appeals from the grants of summary judgment to appellees Hyman G. Gottlieb and Robert L. Gazlay, on the ground that the district courts disregarded well-settled law in ruling that the statutory period was mandatory and divested the Secretary of authority to act after its expiration. The Secretary thus maintains the district courts erred in concluding that upon the expiration of the statutory period, the recommended decisions of the Coast Guard Board for the Correction of Military Records, which would usually require the Secretary's approval, automatically became the final agency decisions. The Secretary also contends that the district court erred in ruling that Gazlay was denied due process when he was not afforded the opportunity to examine and respond to the Board's recommended decision that was forwarded to the Secretary for approval. We hold that the ten-month period is directory and that Gazlay was not denied due process. Accordingly, we reverse.

I.

From 1987 through 1989, Gazlay was a lieutenant commander in the Coast Guard under the supervision of Commander J.R. Sproat. Sproat filed two Officer Evaluation Reports on Gazlay, giving him high but not exceptional marks. Gazlay was passed over for promotion to commander in 1989 and 1990. In 1989, Sproat informed his superior that his evaluation reports were invalid and submitted replacement reports that were more complimentary to Gazlay. On May 23, 1990, Gazlay filed an application requesting the Board for Correction of Military Records to authorize the replacement of the earlier reports. The Board agreed that Gazlay was entitled to substantially the relief he requested, and, on March 13, 1991, forwarded its recommendation to the Secretary of Transportation for approval. 2 After receiving the Secretary's disapproving comments, the Board issued a decision, dated July 26, 1991, denying Gazlay's application but providing that the replacement reports would be added to his file.

Gazlay filed suit against the Secretary, requesting the relief specified in the Board's initial recommended decision. The district court granted Gazlay's motion for summary judgment on the ground that the Secretary lacks statutory authority to act after the expiration of ten months, and, therefore, when the Board acts within ten months, its recommended decision becomes the final agency decision once ten months have passed, regardless of subsequent action by the Secretary. Gazlay v. Busey, 819 F.Supp. 29, 31 (D.D.C.1993). The district court also ruled that the Board's decision of July 26, 1991, was invalid because Gazlay was not given notice of, nor permitted to comment upon, the Board's initial recommended decision. Id. at 31 n. 3.

Gottlieb, in turn, benefitted from the district court's opinion in Gazlay's case. Gottlieb entered the Coast Guard in 1919 and attained the permanent grade of chief pay clerk. He received temporary appointments as lieutenant and lieutenant commander, but later reverted to the rank of chief pay clerk. In 1947 he retired due to a disability. A retirement board found that the highest rank of service in which Gottlieb performed satisfactorily was chief pay clerk. Gottlieb petitioned the Board to correct his records to reflect his service as a lieutenant commander. In 1949, the Board granted part of the requested relief by changing his record to reflect the rank of lieutenant. Gottlieb's requests for reconsideration in 1949, 1950, 1961, and 1962 were unavailing. On July 31, 1990, Gottlieb again requested reconsideration, and on August 6, 1991, the Board forwarded to the Secretary for approval its recommended decision that the 1949 ruling was erroneous and that Gottlieb should be restored to the rank of retired lieutenant commander, retroactive to 1947. After the Secretary disapproved the Board's recommended decision and denied Gottlieb's request for reconsideration, Gottlieb filed suit against the Secretary. Relying on Gazlay v. Busey, 819 F.Supp. 29, the district court granted Gottlieb's motion for summary judgment.

II.

The Secretary appeals from the judgments for appellees on the ground that the law is clear that the ten-month deadline must be viewed as directory where a remedy to compel agency action already exists and Congress has not expressly indicated the consequences of missing the deadline. It follows, he argues, that the district courts erred in ruling that the Board's recommended decision was the final agency decision. Appellees respond that although a congressional deadline, standing alone, does not necessarily divest an agency of power to act after the deadline has passed, the mandatory nature of the ten-month period is clear from its language, context, and legislative history, and that the appropriate remedy for its violation is for the Board's recommended decision to become final. The court reviews the grant of summary judgment de novo. Tao v. Freeh, 27 F.3d 635, 638 (D.C.Cir.1994); Gallant v. NLRB, 26 F.3d 168, 171 (D.C.Cir.1994).

Under 10 U.S.C. Sec. 1552(a)(1) (Supp. V 1993), the Secretary is authorized to correct Coast Guard military records. Corrections are to be made pursuant to procedures established by the Secretary. Id. Sec. 1552(a)(3). By regulation, the Secretary established the Board to make final decisions in some areas and recommended decisions in others. 33 C.F.R. Sec. 52.35-15 (1990); id. Sec. 52.64 (1991). The Secretary authorized the Board to take final action when the Board unanimously denies applications for correction of Coast Guard records. Id. Sec. 52.35-15(a)(1) (1990); id. Sec. 52.64(a)(1) (1991). In limited circumstances not relevant here, the Board may also grant affirmative relief. See id. Sec. 52.35-15(a)(2)-(3) (1990); id. Sec. 52.64(a)(2)-(3) (1991). In all other circumstances, the Board must "forward the record of its proceedings to the Secretary for approval, disapproval, or return for additional consideration." Id. Sec. 52.35-15(b) (1990); id. Sec. 52.64(b) (1991).

Section 212 of the Coast Guard Authorization Act of 1989 directed the Secretary to amend the regulations governing the Board's procedures "to ensure ... that final action on the application is taken within 10 months of its receipt." 3 Section 212 also directed the Secretary to provide the Board with sufficient staff to ensure compliance with the ten-month period. Id. Thereafter, the Secretary promulgated a regulation providing that "[f]inal action on an application for correction of a military record shall be taken within 10 months after all the elements of a complete application ... have been received by the Board." 33 C.F.R. Sec. 52.68 (1991).

It is well settled, as the Secretary argues in his brief, that "where Congress has placed an agency under a legal obligation to render a decision within a stated time period but has not set forth the consequences of exceeding that period, ordinarily the time period is directory rather than mandatory, and an agency will not lose jurisdiction over the matter upon expiration of that period." The Supreme Court's decision in Brock v. Pierce County, 476 U.S. 253, 106 S.Ct. 1834, 90 L.Ed.2d 248 (1986), is both illustrative and instructive. In Brock, the Supreme Court held that a 120-day time limit for the Secretary of Labor to issue a final determination concerning alleged misuse of funds under the Comprehensive Employment and Training Act was not jurisdictional. Id. at 255-56, 266, 106 S.Ct. at 1836-37, 1842. The Court applied the general rule that "[w]hen ... there are less drastic remedies available for failure to meet a statutory deadline, courts should not assume that Congress intended the agency to lose its power to act." Id. at 260, 106 S.Ct. at 1839 (footnote omitted). The Court then concluded that the use of the word "shall" in the statute was insufficient, by itself, to divest the Secretary of jurisdiction at the expiration of the time limit. Id. at 262, 106 S.Ct. at 1840. Turning to the legislative history, the Court noted a colloquy on the House floor indicating that at least one of the bill's sponsors believed that the deadline was not jurisdictional. Id. at 263, 106 S.Ct. at 1840-41. Moreover, the history of the statute indicated that Congress was concerned about fraud in the program and wanted to ensure prompt and just resolution of fraud claims. The Court concluded that a time limit that cut off the Secretary's jurisdiction would not serve these purposes, id. at 265, 106 S.Ct. at 1841-42, noting that "[t]here is simply no indication in the statute or its legislative history that Congress intended to remove the Secretary's enforcement powers if he fails to issue a final determination ... within 120 days." Id. at 265-66, 106 S.Ct. at 1842. We apply this analysis here.

First, Congress did not specify in Sec. 212 any consequences for missing the ten-month deadline; neither the statute...

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