Holley v. U.S., 95-5134

• Decision Date: 19 September 1997
• Docket Number: No. 95-5134,95-5134
• Citation: 124 F.3d 1462
• Parties: John D. HOLLEY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1462

124 F.3d 1462

John D. HOLLEY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 95-5134.

United States Court of Appeals, Federal Circuit.

Sept. 19, 1997.

Rehearing Denied Nov. 20, 1997.

Guy J. Ferrante, King & Everhard, P.C., Falls Church, VA, argued for Plaintiff-Appellee.

Edmund W. Chapman, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, argued for defendant-appellant. With him on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and James M. Kinsella, Assistant Director. Of counsel was LTC David Hayden and Major Douglas Mickle, Department of the Army, Arlington, VA. Counsel is David B. Stinson, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC.

Before NEWMAN, MICHEL, and PLAGER, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

The government appeals the decision of the United States Court of Federal Claims, Holley v. United States, 32 Fed. Cl. 265 (1994), ruling that John D. Holley, Jr. was illegally discharged from military service; the court ordered back pay, reinstatement, and associated benefits.

The discharge was conducted in accordance with the statutory and regulatory rules applicable to officers having less than five years of commissioned service. We conclude that these rules and their application in this case did not violate Mr. Holley's statutory, regulatory, or constitutional rights. The decision of the Court of Federal Claims is reversed.

BACKGROUND

The two events that led to Mr. Holley's discharge occurred soon after his assignment in Germany, following his graduation from the United States Military Academy in June 1986. The first event, in May 1987, was a conversation at a party during which Mr. Holley implied that illegal drugs would be available at a party at his house. The second event, in December 1987, was a conversation between Mr. Holley and a non-commissioned officer during which Mr. Holley stated that he had smoked an illegal drug during the weekend and had taken a drug test wherein he had tried to contaminate the sample. Details of these events are set forth in the opinion of the Court of Federal Claims; that they occurred is not disputed on this appeal, although Mr. Holley in his brief challenges the merits of the charges.

On March 10, 1988 Mr. Holley was given a Letter of Reprimand by Major General Joulwan, the letter stating that "these incidents raise serious questions about your judgment and future value to the Army." In an Officer Evaluation Report dated March 23, 1988 his battalion commander, Lieutenant Colonel Scales, described him as a "technically competent, enthusiastic leader," referred to his "selfless dedication" and "caring, concerned attitude for his men," but rated him last of the lieutenants in the battalion, despite "all of the excellent things that 1LT Holley has accomplished in the recent months," because of his "off duty ... lack of good judgment" and the "stigma" of this misconduct. LTC Scales expressed concern that these actions had "somewhat discredited him as a commissioned officer and future leader."

In the ensuing months of 1988 Mr. Holley received an "outstanding" officer evaluation, was awarded three Army Achievement Medals, and had a spotless record. In May 1988 LTC Scales described him as "a completely dedicated and responsible officer" and stated that "Lieutenant Holley's present duty performance alleviates my past concerns about his responsibility and maturity and identify him as the exceptional leader he is."

On December 1, 1988 Mr. Holley was notified of the Army's "Initiation of Elimination" action, the notice referring to the reprimand and the low evaluation of the previous March. The notice required him to show cause for retention in light of his "lack of good judgment," "acts of personal misconduct," and "conduct unbecoming an officer." The notice stated that a general discharge was being recommended, and that there would not be referral to a board of inquiry ¹ unless the discharge were under other than honorable conditions. The notice offered the assistance of counsel in submitting a written statement or rebuttal, and offered him the opportunity to resign.

Mr. Holley submitted a written statement on February 13, 1989. He "took full responsibility for these improprieties, and have since then worked very hard to overcome them, and to prove myself as an asset to the Officer's Corps." He outlined his excellent record and performance since these events had occurred, well over a year earlier. Lieutenant Colonel Scales wrote a Request for Retention dated February 13, 1989, stating that Mr. Holley's "response to counseling and mentoring has been superb" and that "his manner of performance at this point ranks with the very best of my 25 lieutenants."

On March 31, 1989 the discharge was approved by the Assistant Secretary of the Army. The discharge was classified as "General (Under Honorable Conditions)." The reason stated on the Certificate of Release or Discharge from Active Duty (DD Form 214) was "Misconduct Moral or Professional Dereliction or in Interest of National Security." No referral was made to a board of inquiry.

On April 9, 1992 Mr. Holley filed suit in the Court of Federal Claims, raising statutory, regulatory, and constitutional issues. He stated that he had an inadequate opportunity to defend against the discharge in that the Army did not conduct a hearing, and that a hearing was required in view of the stigmatizing nature of the general discharge and the derogatory statement on the official discharge form. He requested back pay and reinstatement, and correction of his military records.

The Court of Federal Claims concluded that the discharge was procedurally defective, and that the Army abused its discretion in not directing a hearing before a board of inquiry. The court relied on certain statutory requirements and judicial rulings, and gave dispositive weight to the stigmatizing nature and derogatory terms of the discharge. The government appeals this ruling on its merits, and also argues that the Court of Federal Claims did not have jurisdiction. The government further argues that even if the issue of whether a stigmatizing discharge requires a hearing were within the court's jurisdiction and were decided in Mr. Holley's favor, it would at most entitle him to the remedy of clearing his name, a remedy that the government states is not available in the Court of Federal Claims. Thus the government raises threshold challenges to the jurisdiction of the trial court, asserting that on any theory of the case the court did not have jurisdiction of any of the claims and issues raised by Mr. Holley.

I

Determination of jurisdiction starts with the complaint, which must be well-pleaded in that it must state the necessary elements of the plaintiff's claim, independent of any defense that may be interposed. Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 2846-47, 77 L.Ed.2d 420 (1983) (jurisdiction is established by the plaintiff's complaint); Allied-General Nuclear Services v. United States, 839 F.2d 1572, 1575 (Fed.Cir.1988) (determining subject matter jurisdiction by assessing the complaint and deciding any relevant threshold issues). Thus it is the plaintiff's statement of the claim that determines whether the case is within the competence of the court, without consideration of any allegations made by the plaintiff relating to anticipated defenses. Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 724-25, 58 L.Ed. 1218 (1914). See C. Wright, The Law of Federal Courts § 7 (4th ed.1983).

A

Mr. Holley's complaint states that jurisdiction is based on 28 U.S.C. § 1491 (the Tucker Act) and 37 U.S.C. § 204, the military pay act. The government states that Mr. Holley has no basis for invoking the Tucker Act, which provides:

28 U.S.C. § 1491(a)(1) The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department....

Tucker Act jurisdiction requires not only a claim against the United States, but also requires, based on principles of "sovereign immunity," that there be a separate money-mandating statute the violation of which supports a claim for damages against the United States. United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976); Eastport S.S. Corp. v. United States, 178 Ct.Cl. 599, 372 F.2d 1002 (1967). It is well established that 37 U.S.C. § 204 ("Pay and Allowances of the Uniformed Services") serves as the money-mandating statute applicable to military personnel claiming damages and ancillary relief for wrongful discharge. 37 U.S.C. § 204 "confers on an officer the right to the pay of the rank he was appointed to up until he is properly separated from the service." Sanders v. United States, 219 Ct.Cl. 285, 594 F.2d 804, 810 (1979) (en banc ). If the discharge was wrongful the statutory right to pay continues; this right serves as the basis for Tucker Act jurisdiction.

Tucker Act claims asserting wrongful military discharge have arisen in a variety of factual and legal situations. Some have been based on violations of statute, some on non-compliance with regulations, and some have raised constitutional issues. Illustrating a regulatory issue, in Sanders, 594 F.2d at 810-11, the Court of Claims held that when an Officer Evaluation Report was not prepared in accordance with regulation, a discharge based thereon was subject to remedy under the Tucker Act. Illustrating a constitutional issue, in Woodward v. United States, 871 F.2d 1068, 1073 (Fed.Cir.1989), a discretionary agency action in releasing a reserve officer from active duty was reviewed to determine if the Constitution had been violated, this court observing that "the Claims Court...