Greene v. United States

Citation11 L.Ed.2d 576,84 S.Ct. 615,376 U.S. 149
Decision Date17 February 1964
Docket NumberNo. 84,84
PartiesWilliam L. GREENE, Petitioner, v. UNITED STATES
CourtU.S. Supreme Court

Eugene Gressman, Washington, D.C., for petitioner.

J. William Doolittle, Washington, D.C., for respondent.

Mr. Justice GOLDBERG delivered the opinion of the Court.

Petitioner, the prevailing party in Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377, comes to this Court for a second time. Prior to April 23, 1953, petitioner was employed by a private corporation producing mechanical and electrical parts for military agencies of the United States. On that date the corporation discharged him because of the revocation of his security clearance by the Department of the Navy. Following his challenge of this revocation, this Court held in 1959 in Greene v. McElroy, supra, that 'in the absence of explicit authorization from either the President or Congress the respondents were not empowered to deprive petitioner of his job in a proceeding in which he was not afforded the safeguards of confrontation and cross-examination.' Id., 360 U.S. at 508, 79 S.Ct. at 1419, 3 L.Ed.2d 1377. On remand the District Court, declaring that revocation of petitioner's security clearance was 'not validly authorized,' ordered that all rulings denying petitioner's security clearance be 'expunged from all records of the Government of the United States.'1

In the interim between the security revocation and the District Court order, petitioner had found it necessary to take less remunerative nonsecurity employment.2 When, after the prolonged litigation, he obtained judicial relief in 1959, his current employmen did not require and he did not seek access authorization. He then sought only to recover compensation for the unauthorized govern- mental action, and to that end, shortly after entry of the court order, formally requested the Department of Defense to provide monetary restitution for his loss of earnings. Petitioner based his claim on a 1955 Department of Defense regulation providing that where there has been 'a final determination * * * favorable to a contractor employee,' the employee will be reimbursed 'in an equitable amount for any loss of earnings during the interim resulting directly from a suspension of clearance.'3 The Department of Defense refused to grant restitution under this 1955 regulation but offered to consider petitioner's claim under a 1960 regulations4 issued after the claim had arisen and had been formally asserted. Pursuant to the terms of the new regulation, the Department indicated that, as a condition of monetary restitution, it would be necessary to have an administrative determination that he 'would be' currently entitled to a security clearance. Petitioner thereupon instituted the present action in the Court of Claims to obtain restitution under the terms of the 1955 regulation and the Fifth Amendment to the Constitution of the United States. The Court of Claims refused to pass on the merits of petitioner's claim and, applying the doctrine of exhaustion of administrative remedies, ordered proceedings 'suspended pending pursuit of administrative remedies (made available) by the Department of Defense.'5 For the reasons stated below, we hold that petitioner is entitled to restitution under the 1955 regulation and that, under the circumstances, it was error to remit petitioner to further administrative proceedings under the 1960 regulation.

I.

The facts comprising the background of the present action are fully set forth in Greene v. McElroy, supra, 360 U.S. at 476—491, 79 S.Ct. at 1403—1411, 3 L.Ed.2d 1377, and need only brief restatement here. Petitioner, an aeronautical engineer, was serving as vice president and general manager of Engineering and Research Corporation (ERCO), a private firm producing mechani- cal and electrical parts for various agencies of the United States Armed Services. Petitioner had been employed by ERCO in 1937 and, except for a brief leave of absence, had continued with the firm. In connection with this employment, which involved classified work for the Armed Forces, he had obtained security clearances.6 Indeed, before the revocation of his security clearance, the Industrial Employment Review Board, on January 29, 1952, had reversed the action of an inferior board and granted petitioner clearance for secret governmental contract work.

On April 17, 1953, however, the Secretary of the Navy notified ERCO that petitioner's 'continued access to Navy classified security information (was) inconsistent with the best interests of National Security.'7 No hearing preceded this notification. The Secretary further requested ERCO to exclude petitioner 'from any part of your plants, factories or sites at which classified Navy projects are being carried out and to bar him access to all Navy classified information.' ERCO had no choice but to comply with this request and so, a week later, on April 23, 1953, petitioner was discharged. Petitioner promptly asked the Navy for reconsideration. A year later he was given a 'hearing' in which he was denied an opportunity to confront or cross-examine the allegedly adverse witnesses. On the basis of this proceeding the appropriate administrative boards approved the Secretary's revocation of security clearance.

Petitioner thereupon filed a complaint in the United States District Court for the District of Columbia asking for appropriate injunctive relief and a declaration that the revocation was unlawful and void. The District Court denied relief, Greene v. Wilson, 150 F.Supp. 958, and the Court of Appeals affirmed, 103 U.S.App.D.C. 87, 254 F.2d 944. Then, as noted above, on June 29, 1959, this Court, reversing the decisions below, held that 'in the absence of ex licit authorization from either the President or Congress the respondents were not empowered to deprive petitioner of his job in a proceeding in which he was not afforded the safeguards of confrontation and cross-examination.' Greene v. McElroy, supra, 360 U.S. at 508, 79 S.Ct. at 1419, 3 L.Ed.2d 1377. On remand, the District Court on December 14, 1959, with the consent of the Government, entered a final order declaring: (1) 'that the action of the Secretary of Defense and his subordinates in finally revoking plaintiff's security clearance was * * * not validly authorized,' and (2) 'that any or all rulings, orders, or determinations wherein or whereby plaintiff's security clearance was revoked are hereby annulled and expunged from all records of the Government of the United States.'8

Following issuance of this order, petitioner initiated the administrative and legal steps immediately leading to the present action. His current employment did not require and he did not seek an opportunity to obtain current access authorization for classified information; indeed, he plainly says that he does not now 'need or want' such authorization. His sole objective is to obtain compensation for the governmental action held by this Court not to have been validly authorized. On December 28, 1959, he made a formal demand of the General Counsel of the Department of the Navy 'for monetary restitution from the Department of the Navy and/or the Department of Defense pursuant to Section 26 of the Industrial Personnel Security Review Regulation, 20 Fed.Reg. 1553.' This regulation, issued in 1955, provides as follows:

'In cases where a final determination is favorable to a contractor employee, the department whose activity originally forwarded the case to the Director will reimburse the contractor employee in an equitable amount for any loss of earnings during the interim resulting directly from a suspension of clearance.' 9

The General Counsel of the Department of the Navy acknowledged the demand and requested that certain dates and financial data be supplied. A statement of petitioner's legal position respecting the applicability of the regulation was also requested. On April 20, 1960, he supplied the General Counsel of the Department of the Navy with the requested information and statement of legal position.10

While petitioner's claim was thus being processed, the Secretary of Defense on July 28, 1960, issued a new Industrial Personnel Access Authorization Review Regulation, a regulation superseding in pertinent part the 1955 regulation under which petitioner had claimed compensation.11 The language of the new 'monetary restitution' provision clearly indicates that the 1955 regulation had been significantly and substantially altered. Thus, instead of simply providing, as the earlier regulation did, that upon 'a final determination * * * favorable to a contractor employee' the Government shall provide compensation for the loss of earnings, the 1960 regulation, inter alia (1) subjects the claimant's recovery to administrative discretion; (2) requires that 'at a later time' the claimant qualify to receive a security clearance equivalent to that originally held or sought; (3) requires that the 'favorable determination' be a favorable 'administrative' determination; and (4) requires that the contrary determination had been 'unjustified.'

On January 4, 1961, petitioner was advised that his claim had been forwarded to the Director of the Office of Security Policy of the Department of Defense for final determination. Petitioner then, in a letter addressed to the Director, reiterated his claim and stated that he was entitled to restitution under the 1955 regulation. After further communication, the Director advised petitioner that the Department of Defense was prepared to consider his case under the newly issued 1960 regulation and 'to take such action as may be necessary to reach a final determination as to whether it is in the national interest to grant him an authorization for access to classified information.' On March 2, 1961, petitioner again submitted a statement of his legal position concerning the applicability of the 1955 regulation and again pointed out...

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