Hoska v. U.S. Dept. of the Army

• Decision Date: 30 April 1982
• Docket Number: No. 81-1352,81-1352
• Parties: Lukas E. HOSKA, III, Petitioner, v. UNITED STATES DEPARTMENT OF THE ARMY, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 131

677 F.2d 131

219 U.S.App.D.C. 280

Lukas E. HOSKA, III, Petitioner, v. UNITED STATES DEPARTMENT OF THE ARMY, Respondent.

No. 81-1352.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 3, 1982.

Decided April 30, 1982.

David Alan Lee, Washington, D. C., for petitioner.

Michael Joseph Ryan, Asst. U. S. Atty., Washington, D. C., with whom Charles F. C. Ruff, U. S. Atty., Washington, D. C., at the time the brief was filed, and Royce C. Lamberth, Asst. U. S. Atty., Washington, D. C., were on the brief, for respondent.

Before EDWARDS and GINSBURG, Circuit Judges, and JOHN J. SIRICA, ^* United States Senior District Judge for the District of Columbia.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

Prior to his dismissal from employment, petitioner, Lukas Hoska, III, held the position of Intelligence Operations Specialist with the United States Army Administrative Survey Detachment (hereinafter "USAASD" or "Army"). Between August 1975, when he was hired, and August 1979, when he learned that the Army intended to revoke his security clearance, petitioner performed his job without difficulty and received high praise for his work. ¹ In October 1979, however, the Army revoked petitioner's Top Secret security clearance because of alleged security violations, an unfavorable psychiatric evaluation, and several incidents of allegedly indiscreet behavior which the Army contends reflected poor judgment and emotional instability. Because he no longer possessed the required security clearance, the Army dismissed petitioner from his position in September 1980. Petitioner appealed his security clearance revocation and subsequent dismissal to the Merit Systems Protection Board (hereinafter "MSPB"), which affirmed the Army's decision. He now appeals from that MSPB decision.

Based on our review of the record on appeal, we conclude that the evidence presented was wholly inadequate to support the MSPB decision. As discussed in detail below, the Army's case before the MSPB relied almost entirely on unsubstantiated hearsay evidence. The Army offered no evidence to demonstrate either the meaning or the reliability of the obscure conclusions in the psychiatric evaluation, while Hoska introduced evidence of extenuating circumstances that undercut the trustworthiness of the evaluation. Furthermore, the allegations of security violations were all based solely on the hearsay reports of one of Hoska's co-workers. More importantly, the Army did not prove that any of these alleged security violations was in fact a breach of any rule, regulation or standard security practice. Finally, and most significantly, the Army failed to demonstrate an adequate nexus between the various incidents of allegedly improper or indiscreet behavior by Hoska and his ability to protect classified information. Under these circumstances, the MSPB decision affirming Hoska's security clearance revocation and resulting dismissal cannot stand.

I. HISTORY OF THE PROCEEDINGS

Petitioner was hired by the Army as an Intelligence Operations Specialist in August 1975. He obtained the requisite Top Secret security clearance and ultimately was stationed in West Berlin, Germany. In early May 1979, apparently as part of an investigation into petitioner's fitness to retain his security clearance, petitioner was ordered to undergo a psychiatric examination and evaluation in Frankfurt, West Germany. He was provided little explanation other than "that questions regarding (his) stability had been raised." Tr. 89. ²

On July 30, 1979, the Army's Central Personnel Security Clearance Facility (hereinafter "Clearance Facility") in Fort Meade, Maryland issued petitioner a letter of intent to revoke his security clearance. The letter cited an alleged "pattern of erratic and questionable behavior" by petitioner, including three alleged breaches of security, and the psychiatric evaluation, which concluded that petitioner suffered from "an obsessive-compulsive neurosis." App. 28-29. Petitioner responded to the charges by letter on August 19, 1979. Following his response, the Clearance Facility revoked his security clearance, effective October 25, 1979. The revocation letter stated that Hoska's "sexual mores appear to ... make him decidedly vulnerable to coercion or blackmail ... (and his) blatant disregard for established security policies surfaces considerable doubt as to his value in his present capacity." App. 34. It further concluded that "(i)nformation furnished by a number of personnel ... tends to present the same picture of SUBJECT being a person of somewhat erratic, unstable and indiscreet behavior," and cited the conclusion in the psychiatric evaluation that petitioner had an "obsessive compulsive neurosis." Id. at 34-35. The letter did not, however, refer to petitioner's strongly positive Employee Career Appraisals or to the highly praiseworthy evaluation written on August 10, 1979, by the Commander of petitioner's unit. See note 1 supra.

On July 17, 1980, the USAASD notified petitioner of its intent to terminate his employment because of his failure to retain the required security clearance, to which petitioner responded by letter of counsel on August 13, 1980. The USAASD officially dismissed petitioner on August 26, 1980, effective September 12, 1980.

On September 30, 1980, petitioner appealed his security clearance revocation and employment dismissal to the MSPB, seeking, inter alia, reissuance of his security clearance, reinstatement and back pay. A presiding official of the MSPB conducted a hearing at Fort Meade, Maryland on November 19, 1980. The Army presented the testimony of Lt. Colonel Edward Koslosky, the Clearance Facility officer who was responsible for making the recommendation to revoke petitioner's security clearance, Peter R. Nelson, the Army officer who reviewed the decision to revoke petitioner's clearance, Richard F. Judge, the officer in petitioner's unit who was responsible for terminating his employment, and petitioner himself. ³ Each official testified as to the reasons for his decision concerning petitioner. Their decisions apparently were based upon the information in petitioner's file, rather than on any personal knowledge of him or any independent corroboration of the incidents in which he was allegedly involved. Petitioner called upon his wife to testify about a number of the incidents of alleged indiscretion at which she was present. Charles J. Rubacky, petitioner's "security manager" in Berlin, also testified on petitioner's behalf. Rubacky stated that he had never observed a security breach by petitioner and that the three incidents cited by the Army as security violations did not, in his opinion, constitute violations.

On January 29, 1981, the MSPB presiding official issued his initial decision upholding the actions taken by the Army. ⁴ The opinion correctly noted that, under 5 U.S.C. § 7701(c)(1)(B) (Supp. IV 1980), an agency decision on appeal to the MSPB "may not be sustained unless that decision is supported by a prepondeance (sic) of the evidence." App. 4. ⁵ Reviewing the testimony of all the witnesses, the MSPB opinion concluded that the Army decisions to revoke petitioner's clearance and to remove him from the service were supported by a preponderance of the evidence. The MSPB opinion specifically noted that the Army "placed its total reliance upon hearsay evidence." Id. at 8. It also acknowledged that, "(a)s a general rule, hearsay evidence is generally considered to be less reliable than direct evidence which is subject to cross-examination" and that "in determining the preponderance of the evidence, hearsay evidence alone, without sufficient assurance to its truthfulness is not sufficient evidence to overcome sworn testimony." Id. Nonetheless, the MSPB opinion found that, because petitioner admitted to two of the incidents that the Army contended were security violations and to certain other incidents of allegedly indiscreet behavior that the Army relied on in revoking his clearance, there was some non-hearsay testimony in the record. Although the MSPB opinion apparently did not rely on petitioner's direct testimony alone, it concluded that, in light of that testimony, there was a preponderance of evidence in the record as a whole supporting the Army's decision. Id. at 8-9.

II. THE LEGAL FRAMEWORK FOR REVIEWING THE MSPB's DECISION

A. The Statutory Standard of Judicial Review

The provisions of the Civil Service Reform Act of 1978 that govern judicial review of MSPB decisions require the court to "review the record and hold unlawful and set aside any agency action, findings, or conclusions found to be-(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence ...." 5 U.S.C. § 7703(c) (Supp. IV 1980). Petitioner's basic contention is that the MSPB's decision is unsupported by substantial evidence. The term "substantial evidence" has been interpreted to mean " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' " Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938)); Johnson v. United States, 628 F.2d 187, 189 (D.C.Cir.1980).

Before reviewing the record to determine whether the MSPB decision meets these statutory standards, we first examine the legal bases for both the Army's decision to revoke petitioner's security clearance and its decision to dismiss him. We also review the "rational nexus" requirement, which we find inherent in the Army's regulation governing security clearance determinations. Finally, given the nature of the Army's presentation to the MSPB, we summarize briefly the general principles...