Hadigian v. BOARD OF GOVERNORS, FEDERAL RESERVE

• Decision Date: 06 December 1978
• Docket Number: Civ. A. No. 76-1694.
• Citation: 463 F. Supp. 437
• Parties: Louis HADIGIAN, Plaintiff, v. BOARD OF GOVERNORS, FEDERAL RESERVE SYSTEM, Defendant.
• Court: U.S. District Court — District of Columbia

463 F. Supp. 437

Louis HADIGIAN, Plaintiff, v. BOARD OF GOVERNORS, FEDERAL RESERVE SYSTEM, Defendant.

Civ. A. No. 76-1694.

United States District Court, District of Columbia.

December 6, 1978.

Joel D. Joseph, Washington, D. C., for plaintiff.

Earl J. Silbert, U. S. Atty., Robert N. Ford, and Joseph Guerrieri, Jr., Asst. U. S. Attys., Washington, D. C., for defendant.

MEMORANDUM

SIRICA, District Judge.

In this action plaintiff challenges the decision of the Board of Governors of the Federal Reserve System (Board) to dismiss him from his position as an applications analyst with the Board. The case is before the Court on the parties' cross-motions for summary judgment. There are no issues of disputed fact.

Plaintiff's complaint raises numerous issues, but focuses its challenge on the validity of the statutory framework within which the Board worked in reaching its decision to dismiss him, and on the Board's adherence to its own internal procedures in implementing that decision. Before embarking on a discussion of the issues, however, a review of the procedural history and present posture of this case is necessary.

Background

Plaintiff was hired by the Board on March 30, 1970, as a senior computer programmer. He received a raise in pay in April 1971 and an increase in grade in June 1972. Although there were some questions about his performance after his increase in grade, plaintiff continued to receive periodic pay increases through June 1974, but subsequent to that time he received generally unsatisfactory performance ratings.

In March 1976 the Board stripped plaintiff of many of his responsibilities, denying him further access to its computer, and on April 2, 1976, he was notified that the Board proposed to dismiss him. The notice advised him that he would be suspended with pay from his duties as of April 5, 1976, and that a final decision in his case would be made by May 6, 1976. The notice also specified the reasons for the proposed action,¹ plaintiff's right to reply orally or in writing to the director of personnel, his right to have counsel represent him, and procedures for gaining access to the Board to obtain information to prepare his reply.

Plaintiff met with the director of personnel on April 13 and 14, 1976, and the director agreed to extend the date for a final decision from May 6 to July 15, 1976, while retaining plaintiff on leave with pay status. The Board provided plaintiff with office space from that point on so that he could pursue his job search outside the agency and prepare his case, but restricted his movements in and out of, and within, its offices.

On July 8, 1976, plaintiff again requested a postponement of the final decision and an extension was granted to July 30, 1976. On July 30 plaintiff submitted his written response to the charges against him, but to no avail. He was notified of the final decision to dismiss him by telephone on August 2. The Board informed him that a copy of the final determination was available to him at its offices, but he did not receive a copy in the mail until August 3, 1976.

Shortly after receiving notification of his dismissal, plaintiff requested a de novo agency hearing, a right accorded him by Board procedures. But before the date of the requested hearing plaintiff filed this action. The Board opposed district court review at that stage, moving for dismissal for failure to exhaust administrative remedies. After considering the question, on March 28, 1977, this Court ordered plaintiff to exhaust his administrative remedies, but retained jurisdiction over the action.

In the meantime, the Board's hearing officer had issued a recommended decision which sustained the dismissal, and this decision in turn was sustained by the Board's staff director for management on March 18. Plaintiff made a final appeal to the vice-chairman for internal Board administration, and on April 28 the vice-chairman affirmed the dismissal. The matter is now before this Court for a review of the administrative action.

Scope of Review

Judicial review of adverse personnel actions in the federal courts is narrowly constrained. There is no provision for de novo review; rather, the district courts are limited to assuring that the agency action was not arbitrary or capricious, was reached in accordance with relevant statutory and procedural requirements, and was not unconstitutional. 5 U.S.C. § 706(2)(A)-(D) (1976); Doe v. Hampton, 184 U.S.App.D.C. 373, 378-79, 566 F.2d 265, 271-72 (1977). The review is not a substantial evidence review. The Administrative Procedure Act (APA) requires a substantial evidence review only when a statute specifically provides for an agency hearing. 5 U.S.C. § 706(2)(E) (1976); see Doe v. Hampton, supra, 184 U.S.App.D.C. at 378, 566 F.2d at 271; Wood v. U. S. Post Office Dept., 472 F.2d 96, 99 (7th Cir. 1973), cert. denied, 412 U.S. 939, 93 S.Ct. 2775, 37 L.Ed.2d 399 (1973), on remand, 381 F.Supp. 1371 (N.D. Ill.1973), aff'd, 511 F.2d 1405 (7th Cir. 1975). In this case, the applicable statutes and regulations make it clear that a hearing is not required. 5 U.S.C. §§ 554(a)(2), 7501, 7512 (1976); 5 C.F.R. § 752.202(b) (1978).

Discussion

Plaintiff served in the armed forces from 1952 to 1954, when he received an honorable discharge, and is thus "preference eligible" under 5 U.S.C. § 2108 (1976). As a consequence, he claims entitlement to the expanded procedural rights accorded preference eligible employees in adverse actions under 5 U.S.C. §§ 7512 & 7501 (1976).² He argues here that the Board did not afford him these rights, charging specifically that: (1) the notice of proposed adverse action did not adequately apprise him of the charges against him as required by section 7501 and 5 C.F.R. § 752.202(a) (1978); (2) the Board did not afford him an opportunity to answer charges against him in person, as is required by Board procedures and Civil Service Commission regulations, 5 C.F.R. § 752.202(b) (1978); (3) the Board provided him with written notice of his dismissal one day after the effective date of the dismissal rather than on or before the effective date as required by Board procedures and 5 C.F.R. § 752.202(f) (1978); (4) the Board did not notify him of his right to appeal its decision to the Civil Service Commission as is required by 5 C.F.R. § 752.202(f) (1978); and (5) the Board's denial to him of access to its computer in March 1976 constituted a separate adverse action for which the proper procedures were not followed.

The Board responds to plaintiff's allegations with two arguments: first, that the Veterans Preference and Lloyd-La Follette Acts, and regulations promulgated thereunder, do not apply to the Board; and second, that even if they did, the Board provided plaintiff with substantially the same procedural rights as those statutes and regulations require.

Although this Court acknowledges that Board employees are in the excepted service by virtue of 12 U.S.C. § 248(l) (1976)³ and 5 C.F.R. § 213.3124(a) (1978), the Court cannot agree that the Board is exempt from the terms of the Veterans Preference Act and the Lloyd-La Follette Act. The Board argues that it is not subject to either Act because Congress has expressly exempted it from the laws governing the civil service. Specifically, the Board cites section 11(l) of the Federal Reserve Act, ch. 6, 38 Stat. 262-263 (1913), see note 3, supra, which provides that:

. . . All such attorneys, experts, assistants, clerks, and other employees shall be appointed without regard to the provisions of the Pendleton Act, ch. 27, 22 Stat. 403 (1883) and amendments thereto, or any rule or regulation made in pursuance thereof . . .

and section 6(b) of the Banking Act of 1933, ch. 89, 48 Stat. 167:

. . . and may leave on deposit in the Federal Reserve banks the proceeds of assessments levied upon them to defray its estimated expenses and the salaries of its members and employees, whose employment, compensation, leave, and expenses shall be governed solely by the provisions of this Act, specific amendments thereof, and rules and regulations of the Board not inconsistent therewith . . .

The Board's position, however, completely overlooks the sweeping provisions of the Veterans Preference Act, which was enacted subsequent to both of the statutes it cites. Section 2 of the Veterans Preference Act provides that:

In certification for appointment, in appointment, in reinstatement, in reemployment, and in retention in civilian positions in all establishments, agencies, bureaus, administrations, projects, and departments of the Government, permanent or temporary, and in either (a) the classified civil service; (b) the unclassified civil service; (c) any temporary or emergency establishment, agency, bureau, administration, project, and department created by Acts of Congress or Presidential Executive order; . . . preference shall be given to those who meet the definition of preference eligible.⁴

Section 18 of the Act also provides that:

All Acts and parts of Acts inconsistent with the provisions hereof are hereby modified to conform herewith . . .⁵

The United States Court of Appeals for this circuit affirmed the broad sweep of the Act in Born v. Allen, 110 U.S.App.D.C. 217, 291 F.2d 345 (1960), noting that: "The only exclusions from the Act's coverage are that it shall not apply to the legislative or judicial branches or to persons appointed to the executive branch by the President with the advice and consent of the Senate." Id. 110 U.S.App.D.C. at 219-20, 291 F.2d at 347-48. The Board is, of course, an executive agency, 5 U.S.C. §§ 104, 105 (1976), and plaintiff is not otherwise excluded. Thus, it must be concluded that the Board is bound by the provisions of the Veterans Preference Act, and should have afforded plaintiff all the procedural rights provided therein.

The Board, in addition, argues that it is not bound by the provisions of the Lloyd-La Follette Act, but this also is not the case....