Moore v. Custis

• Decision Date: 22 June 1984
• Docket Number: No. 83-2047,83-2047
• Citation: 736 F.2d 1260
• Parties: James MOORE, Appellee, v. Donald L. CUSTIS, Chief Medical Director Veterans Administration, Joseph L. Kurzejeski, Administrator, Veterans Administration Hospital, Columbia, Missouri, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1260

736 F.2d 1260

James MOORE, Appellee, v. Donald L. CUSTIS, Chief Medical Director Veterans Administration, Joseph L. Kurzejeski Administrator, Veterans Administration Hospital, Columbia, Missouri Appellants.

No. 83-2047.

United States Court of Appeals Eighth Circuit.

Submitted April 12, 1984.

Decided June 22, 1984.

Robert J. Swift, Jr., Carson, Monaco, Coil, Riley & McMillin, P.C., Jefferson City, Mo., for appellee.

Robert G. Ulrich, U.S. Atty., Kansas City, Mo., J. Paul McGrath, Asst. Atty. Gen., William G. Kanter, Daniel Bensing, Attys., Appellate Staff, Civ. Div., Dept. of Justice, Washington, D.C., for appellants.

Before ROSS, ARNOLD and FAGG, Circuit Judges.

ROSS, Circuit Judge.

This case arises out of disciplinary action taken by the Veterans Administration (V.A.) in ordering the demotion and transfer of Dr. James Moore. The district court ¹ upheld the demotion, but permanently enjoined the transfer, ruling that it was unauthorized by statute. The V.A. invokes the jurisdiction of this court under 28 U.S.C. Sec. 1291 (West.Supp.1983), which governs all final decisions of district courts. For the reasons stated herein we reverse the district court's judgment with respect to the transfer.

FACTS

At the time this action arose, Dr. James Moore was Chief of Dental Services at the Truman V.A. Hospital in Columbia, Missouri. Two professional employees filed a complaint against Dr. Moore regarding his abusive conduct with other personnel, and with patients. Subsequently a three-member disciplinary board was convened to conduct an investigation into the charges as prescribed by 38 U.S.C. Sec. 4110 (1979). The board conducted hearings to investigate the charges, and eventually sustained four of the seven charges made against Dr. Moore: 1) using disrespectful and insulting language to and about Medical Center management and Dental Service staff; ² 2) failing to observe and enforce agency policy by regularly taking, and allowing staff to take, excessive lunch periods; 3) disproportionately favoring subordinates, i.e., failing to deal impartially with employees; and 4) having a subordinate assist in a personal family matter. The board recommended demotion as the appropriate disciplinary response, but considered a transfer to be too severe.

The Chief Medical Director reviewed the findings of the board, and ordered both a demotion and transfer. Following an appeal by Dr. Moore, this order was affirmed by the Administrator. Thereafter, the district court issued a temporary restraining order enjoining the transfer pending a resolution of the dispute.

After reviewing the case on the merits, the district court determined that the demotion was proper, but that the transfer was improper because the V.A. had not prescribed a transfer as an appropriate disciplinary action. ³ The court held that such action was in violation of 5 U.S.C. Sec. 706(2)(C) (1977), which requires agency action to be held unlawful if "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." Id. The court supported its conclusion as follows:

The statute clearly states that the disciplinary board's recommendations are bound by the limits prescribed by the Administrator. The V.A. has prescribed five types of disciplinary action. They are, in order of severity, admonishment, reprimand, suspension, demotion and discharge. See 8A(4)(b)(1)-(5) of the V.A. disciplinary regulations. This prescription includes "suspension" which was not expressly listed in the statute. While the V.A. might have prescribed a "transfer" as an appropriate disciplinary action, it did not. And though the Administrator is not required to accept the recommendations of the disciplinary board, any modifications must be consistent with the limitations that have been prescribed.

565 F.Supp. at 50.

ISSUE

On appeal we are asked to resolve the following issue: whether the decision to transfer Dr. Moore was within the V.A.'s authority, and if so, was the decision arbitrary and capricious.

DISCUSSION

A. Scope of Review

In Brown v. United States Department of Interior, 679 F.2d 747 (8th Cir.1982), this court defined the standard to be employed when reviewing a district court's opinion regarding the propriety of an administrative agency's decision.

On appeal from the district court, the appellate court "must render an independent decision on the basis of the same administrative record as that before the district court; the identical standard of review is employed at both levels; and once appealed, the district court decision is accorded no particular deference." First National Bank of Fayetteville v. Smith, 508 F.2d 1371, 1374 (8th Cir.1974), cert. denied, 421 U.S. 930, 95 S.Ct. 1655, 44 L.Ed.2d 86 (1975). The standard of review is that set out in the Administrative Procedure Act, 5 U.S.C. Sec. 706:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall--

* * *

* * *

(2) hold unlawful and set aside agency action, findings, and conclusions found to be--

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]

Id. at 748-49. While it is true that courts should not "rubber-stamp * * * administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute," Bureau of Alcohol, Tobacco & Firearms v. Federal Labor Relations Authority, --- U.S. ----, 104 S.Ct. 439, 444, 78 L.Ed.2d 195 (1983), quoting NLRB v. Brown, 380 U.S. 278, 291-292 (1965), it is equally well established that great deference should be accorded an administrative agency's interpretation of its own regulations. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Illinois Terminal Rail Co. v. ICC, 671 F.2d 1214, 1216-17 (8th Cir.1982). The "arbitrary and capricious" standard is a narrow one, and administrative action can only be regarded as such where there is no rational basis for the action. First National Bank of Fayetteville v. Smith, 508 F.2d 1371, 1376 (8th Cir.1974), cert. denied, 421 U.S. 930, 95 S.Ct. 1655, 44 L.Ed.2d 86 (1975); Plaza Bank of West Port v. Board of Governors, 575 F.2d 1248 (8th Cir.1978). As we have stated before:

To have administrative action set aside as arbitrary and capricious, the party challenging the action must prove that it was "willful and unreasoning action, without consideration and in disregard of the facts or circumstances of the case * * *".

First National Bank, supra, 508 F.2d at 1376 (citation omitted). With these standards in mind we review the Veterans Administration's decision to transfer Dr. Moore.

B. Authority to Transfer

The parties agree that the controlling statute in this case is 38 U.S.C. Sec. 4110(d) (1979), which provides:

(d) A disciplinary board, when in its judgment charges are sustained, shall recommend to the Administrator suitable disciplinary action, within limitations prescribed by the Administrator, which shall include reprimand, suspension without pay, reduction in grade, and discharge from the Department of Medicine and Surgery of such person. The Administrator shall either approve the recommendation of the board, approve such recommendation with modification or exception, approve such recommendation and suspend further action at the time, or disapprove such recommendation. He shall cause to be executed such action as he approves. The decision of the Administrator shall be final.

Id. As stated above, the district court held that the Administrator had not prescribed transfer as an appropriate disciplinary action, and, therefore, the decision to transfer was in excess of the authority granted. We believe that the district court erred in this regard.

The district court correctly determined that the V.A. has directly prescribed five types of disciplinary action: admonishment; reprimand; suspension; demotion; and discharge. See 8A(4)(b)(1)-(5) of the V.A. regulations. The court also correctly noted that although suspension was not specifically delineated in section 4110(d), the Administrator had the authority to prescribe other disciplinary actions. See Gilbert v. Johnson, 601 F.2d 761, 766 (5th Cir.1979), cert. denied, 445 U.S. 961, 100 S.Ct. 1647, 64 L.Ed.2d 236 (1980); Kletschka v. Driver, 411 F.2d 436 (2d Cir.1969). The court concluded that the Administrator could prescribe transfer as an appropriate action but he had not.

The district court failed to consider a separate regulation on transfers adopted in the 1980 changes to the V.A. regulations. The regulation provides:

b. To achieve maximum utilization of employees' abilities and to meet the needs of the VA medical program, intra-VA transfers [of employees with permanent status or probationary employees] may be directed by the Chief Medical Director, except that the Administrator will approve such transfers in positions centralized to the Administrator. Directed transfers will be at VA expense. Transfers of employees having permanent status for reasons of inaptitude, inefficiency, or misconduct can be taken only under the disciplinary action procedures of MP-5, part II, chapter 8, section A. * * *.]

11B(4)(b) of the V.A. placement regulations (March 7, 1980) (emphasis added).

Clearly, the Administrator would not refer to the fact that the transferring of employees for disciplinary reasons was governed by regulation 8A(4) if that regulation did not include the authority to make such transfers. Furthermore, while one could arguably interpret the regulations differently than did the agency, "[i]n construing administrative regulations, 'the ultimate criteria is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the...