Larionoff v. United States

• Decision Date: 28 September 1973
• Docket Number: Civ. A. No. 626-73.
• Citation: 365 F. Supp. 140
• Parties: Nicholas J. LARIONOFF, Jr., et al., Plaintiffs, v. UNITED STATES of America et al., Defendants.
• Court: U.S. District Court — District of Columbia

365 F. Supp. 140

Nicholas J. LARIONOFF, Jr., et al., Plaintiffs, v. UNITED STATES of America et al., Defendants.

Civ. A. No. 626-73.

United States District Court, District of Columbia.

September 28, 1973.

COPYRIGHT MATERIAL OMITTED

Stephen Daniel Keeffe, Washington, D. C., John A. Keeffe, New York City, of counsel, for plaintiffs.

Harold H. Titus, Jr., Arnold T. Aikens, Michael A. Katz, Washington, D. C., for defendants.

MEMORANDUM OPINION

CHARLES R. RICHEY, District Judge.

I. INTRODUCTION

This case is before the Court on Cross Motions for Summary Judgment. The Plaintiffs are petty officers in the United States Navy wherein the Plaintiffs claim entitlement to a reenlistment bonus. They are classified as Communications Technicians-Maintenance (CTM), a service rating which at the time they enlisted was classified as a "critical military skill," and, thus eligible for a Variable Reenlistment Bonus (VRB) payable in two equal installments in each year of the first term reenlistment. The Bonus was four times the regular reenlistment bonus. On July 1, 1972, the Navy reclassified the CTM rating as non-critical and thus allegedly made the Plaintiffs no longer eligible for the VRB. This was prior to the time the Plaintiffs' reenlistment period began to run, but after the time they signed their reenlistment contracts. As indicated, the Navy now refuses to pay the Plaintiffs the VRB. This is a class action where the Plaintiffs are suing for themselves and all those similarly situated for payment of a VRB. They invoke the Court's jurisdiction under the Tucker Act, 28 U. S.C. § 1346(a), claiming that the language in their enlistment contracts entitles them to relief.

II. BACKGROUND OF THE CASE

Each of the seven named Plaintiffs enlisted for four years in the Navy at seven different times and places.¹ All were assigned to the Advanced Electronic Field training program. Successful completion of this approximately yearlong course earned the Plaintiffs rapid promotions and a rating as CTM's, a critical military skill. Assignment to the Advanced Electronic Field program, however, required the Plaintiffs to obligate themselves for six years of Naval service. Each Plaintiff, therefore, had to sign a two year extension contract on the day he originally enlisted or shortly thereafter.²

Between April 20, 1966 and July 1, 1972, "CTM" was classified as a "critical military skill." Pursuant to 37 U.S. C. § 308(g) the holder of a "critical military skill" classification who voluntarily extended his first term enlistment for two years was entitled to a reenlistment bonus not more than four times the amount of the regular reenlistment bonus computed under subsection (a) of § 308.³ See, Department of the Navy Bureau of Naval Personnel Instruction (BUPERSINST) 1133.18B "Variable Reenlistment Bonus (VRB) Program," Dec. 19, 1968. In March of 1972, the Department of the Navy determined that CTM's category did not need special emphasis for recruitment, and removed the rating from the critical skills list, and, as a result, they argue that Plaintiffs are not eligible for the VRB.

The Plaintiffs maintain that the prospect of eligibility for a VRB as a CTM induced them to sign for the extra two years. Upon examination of the legislative history of the VRB, it appears that Congress intended that the VRB should assist in the attraction and retention of members of the armed forces with critical skills. The VRB was to do this by providing an especially strong reenlistment incentive to first term enlisted personnel in the critical skill areas. 1965 U.S.Code Cong. and Adm.News, at 2749, 2756-7.

Now that the CTM is not classified as a critical skill, the Navy refuses to pay the Plaintiffs their VRB when their reenlistment periods become effective. The government maintains that (1) the Plaintiffs do not state a claim upon which relief can be granted; and (2) that Court lacks subject matter jurisdiction; and (3) the Plaintiffs have not exhausted their administrative remedies; and (4) the Defendants are not obligated to pay an additional bonus under the terms of the enlistment contracts. The plaintiffs argue that the VRB, statutorily defined as "pay" and paid to all CTMs when the Plaintiffs signed their contracts, is payable to them under their contract terms. The parties agree there is not dispute as to a material issue of fact.

The Court is of the opinion that the Plaintiffs must prevail on all issues raised in this case, with the exception of the award of attorney's fees, for the reasons set out below.

III. THIS SUIT IS A PROPER CLASS ACTION UNDER RULE 23(b)(1) (B) OF THE FEDERAL RULES OF CIVIL PROCEDURE

The proposed class in this suit is composed of all enlisted U.S. Naval Personnel who signed their first reenlistment contracts for two additional years of duty prior to July 1, 1972, and who would have been entitled to a VRB due to their critical skill rating had the period of reenlistment begun to run prior to July 1, 1972. The Plaintiffs estimate the class size to lie between 200 and 400. While they have not supplied any documentation to support this, the Defendants have neither denied this number nor have they supplied a class list.

This case clearly meets the requirements of Rule 23(b)(1)(B) to be certified as a class action. The members of the proposed class are so numerous and geographically dispersed that joinder of all members would be impractical. The sole issue on the merits before the Court requires an interpretation of the contract which the Department of the Navy uses to secure all its reenlistment obligations. This is a matter of law applicable to all parties who are bound by these uniform contracts. Therefore, an adjudication with respect to the individual members of the class would as a practical matter be dispositive of the interests of the other members of the class as defined above.

IV. THE COURT HAS SUBJECT-MATTER JURISDICTION UNDER THE TUCKER ACT.

The Tucker Act gives District Courts original jurisdiction, concurrent with the Court of Claims over any claim against the United States not exceeding $10,000 in amount, founded upon any express or implied contract with the United States. 28 U.S.C. § 1346(a)(2). In 1964, Congress amended § 1346(d)(2), which prohibited district courts from exercising jurisdiction over claims or civil actions to recover fees, salary, or compensation for official services of officers or employees of the United States. This specific action by Congress indicates that district courts can now hear and determine the issues raised in the case at bar.

This suit is for a reenlistment bonus, which Plaintiffs maintain is included in the consideration delineated in their contracts. The pertinent terms of the contract relating to consideration state: ". . . in consideration of the pay, allowances, and benefits which will accrue to me during the continuance of my service, . . .".⁴ The term the Plaintiffs emphasize is "pay." Section 308 of Title 37 of the United States Code terms the reenlistment bonus (including VRB's) as "special pay." The definitional section of Title 37 of the United States Code, Section 101(21) defines "pay" as including special pay. Therefore, the Court determines that the Plaintiffs have made a prima facie case that the suit before the Court is founded upon a contract for compensation between the United States and its employees.

V. THE PLAINTIFFS HAVE EXHAUSTED THEIR ADMINISTRATIVE REMEDIES

The Plaintiffs presented their claims to the Bureau of Naval Personnel and members of Congress. The Defendants maintain this was insufficient to exhaust the Plaintiffs' administrative remedies; the Plaintiffs should have applied to the Board for Correction of Naval Records (BCNR) for relief.

As the Defendants have stated, the purpose of the BCNR is to determine the existence of error or injustice in Naval records and to make recommendations for the correction of those records, if warranted, to the Secretary of the Navy. 10 U.S.C. § 1552. An examination of the language of the law and its legislative history indicates that the act is intended to provide correction of an individual's service record which has entries resulting from the actions of general courts martial and of statutory bodies, such as Boards of Review, and to provide reimbursement of any compensation which the individual had been denied due to an incorrect or unjust entry. 40 Ops. Att'y Gen. 504 (1947). As the Attorney General's opinion emphasizes, the purpose of the act was to relieve Congress of the private bills necessary to effect a correction of such entries. Id. at 508.

Back pay due because of an incorrect or unjust discharge or naval record entry is not the relief sought here. Plaintiffs here seek an enforcement of the provisions of their enlistment contracts which were binding upon the Plaintiffs and the government at the time of execution. The Plaintiffs' contracts provided that they could not be cancelled except as set forth in the Bureau of Personnel Manual (BUPERSMAN), Article C-1407. The Plaintiffs presented their complaints to the Bureau of Naval Personnel, the body which set the policy for cancellation of enlistment contracts. Through that body, the defendant has given its interpretation of the contract, and denied the cancellation request after reviewing the facts. The matter is appropriately before the Court, whether one views it as a review of an administration's determination of a question of law or in light of 28 U.S.C. § 1346 which gives this Court original jurisdiction over contract questions.

VI. THE PLAINTIFFS ARE ENTITLED TO A VRB WHICH WAS PAYABLE WHEN THEY SIGNED THEIR CONTRACTS FOR THE TWO-YEAR EXTENSION

Turning to the contracts involved in this suit, the Defendants argue that the two contracts should be viewed as one—a six-year obligation in exchange for specialized training only. The Court does not see the contracts as one entity, however. They are two separate documents in form and...