Orloff v. Cleland, 80-5597

• Decision Date: 25 April 1983
• Docket Number: No. 80-5597,80-5597
• Citation: 708 F.2d 372
• Parties: Marshall J. ORLOFF, M.D., Plaintiff-Appellant, v. Max CLELAND, as Administrator, of the Veterans Administration, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 372

708 F.2d 372

Marshall J. ORLOFF, M.D., Plaintiff-Appellant, v. Max CLELAND, as Administrator, of the Veterans Administration, et al., Defendants-Appellees.

No. 80-5597.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 9, 1981.

Decided April 25, 1983.

Charles H. Dick, MacDonald, Halsted & Laybourne, San Diego, Cal., for plaintiff-appellant.

Peter W. Bowie, Robert E. Noel, Asst. U.S. Attys., San Diego, Cal., for defendants-appellees.

Appeal from the United States District Court for the Southern District of California.

Before: FLETCHER, and ALARCON, Circuit Judges, and SOLOMON, ^* District Judge.

FLETCHER, Circuit Judge:

Orloff, a former part-time physician employee of a Veterans' Administration (VA) hospital, brought suit against the VA Administrator and various other individuals, in their official capacities, for violations of the Veterans' Preference Act and the Due Process

Clause of the Constitution. He alleged that the VA terminated his employment without regard to the procedural requirements of either the Veterans' Preference Act or the Due Process Clause of the Constitution. He further alleged that public disclosure of the VA's charges against him constituted a deprivation of a protected liberty interest without due process. Both parties moved for summary judgment. The district court awarded summary judgment to the defendants, holding that the requirements of the Veterans' Preference Act need not be met and that the requirements of the Due Process Clause had substantially been met. We reverse.

FACTS

The Veterans' Hospital in San Diego employed Orloff as a part-time staff physician. His initial appointment began on September 16, 1973, for a term not to exceed thirteen months. The VA renewed his appointment for successive periods until it terminated him on November 3, 1978.

Orloff received notice of his termination of part-time employment effective July 29, 1978, by a letter dated July 3, 1978. The letter stated, as reasons for the termination, that an investigation at the Veterans' Hospital had revealed that Orloff had assigned VA hospital physicians to visit the Kern Medical Center on behalf of a private corporation, and that Orloff, himself, had visited Kern Medical Center on behalf of a private corporation when he was supposedly on duty at the Veterans' Hospital and that Orloff's records indicated that he had listed time spent in surgery at the University Hospital during the same period he was credited with duty at the Veterans' Hospital. The letter further noted that Orloff had no entitlement in the VA to any further review of the termination.

On July 17, 1978, Orloff wrote to Max Cleland, Chief Administrator of the Veterans Administration, requesting reconsideration of his termination. Shortly thereafter, the VA extended Orloff's termination date from July 29, 1978 to August 31, 1978. In August, the VA extended the termination date indefinitely to permit the VA General Counsel's Office to review the proposed termination. On November 1, 1978, Cleland approved Orloff's termination and Orloff's appointment terminated on November 3, 1978. The VA withheld $3,258.98 from his final paycheck, which is the amount of money the agency calculated that Orloff received for services he did not render. Following Orloff's termination, various newspapers reported the circumstances surrounding his discharge.

STANDARD OF REVIEW

Summary judgment is proper only when, viewing the evidence in the light most favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Hutchinson v. United States, 677 F.2d 1322, 1325 (9th Cir.1982).

DISCUSSION

I

The district court concluded that although the procedural requirements of the Veterans' Preference Act did not apply to Orloff, he had been afforded due process under both the Veterans Preference Act and the Due Process Clause of the United States Constitution. As discussed below, we do not agree with the district court that, even if we assume a property or liberty interest, there is sufficient evidence in the record to determine conclusively that the VA afforded Orloff procedural due process. Because of the conclusion we reach on this issue, we must reach the additional questions as to whether: (1) the procedural protections of the Veterans' Preference Act apply to Orloff; or (2) a liberty or property interest was implicated by the termination in the circumstances of this case.

II

A. The Veterans' Preference Act

Orloff argues that the manner of his termination violated the procedural protections Orloff argues that Congress meant the phrase "civil service laws" in the statute to mean the "classification" laws. ³ See 5 U.S.C. Secs. 5101 et seq. and 5331 et seq. But the plain meaning of the term "civil service" laws would encompass a scope of laws broader than just the classification laws. See, e.g., 5 U.S.C. Sec. 3301 et seq. If Orloff's interpretation had been Congress's meaning, it is inexplicable why they would use the phrase "civil service or classification laws" if they thought the terms were equivalent. See Tabor v. Ulloa, 323 F.2d 823, 824 (9th Cir.1963) (Congress, in enactment of statute, is presumed to have used no superfluous words). ⁴

                of the Veterans' Preference Act.  See 5 U.S.C. Sec. 7513. 1   Orloff is a veteran and would ordinarily be entitled to the protections of the Act.  5 U.S.C. Secs. 2108(1)(A) and 2108(3)(A).  The VA argues that these procedural requirements do not apply because the Administrator appointed Orloff pursuant to a statute authorizing the employment of part-time physicians "without regard to civil service or classification laws."    38 U.S.C. Sec. 4114(a)(1).  We agree with the VA.  The plain language of the statute states that civil service laws shall not apply to part-time physicians employed by the VA and the Veterans Preference Act falls within the category of "civil service laws." 2
                

Nevertheless, Orloff argues that his interpretation is supported by the legislative history of the Act. See Heppner v. Alyeska Pipeline Service Co., 665 F.2d 868 (9th Cir.1981) (discussion of the appropriateness of considering legislative history in interpretation of facially clear statute). The legislative history indicates that, when Sec. 4114 was enacted in 1946, the quality of health care provided by VA doctors concerned Congress. 91 Cong.Rec. 11656-65 (1945). It is true, as Orloff argues, that when Congress amended the statute in 1962 to include the phrase "civil service laws," it intended to give the VA authority to hire additional personnel on a fee-basis in order to obtain the services of qualified personnel without the constraints of the classification laws, which require equal pay for performances of similar jobs in the federal government. See 1962 U.S.Code Cong. & Admin.News 2101-03. Congress in adopting Sec. 4114 also wanted to give the Administrator authority to employ or discharge doctors without the usual time-consuming and detailed civil service procedures. 91 Cong.Rec.

                111656-65.  This purpose is consistent with a Congressional desire to free the Administrator of the procedural requirements of such statutes as the Veterans' Preference Act.  It allows the Administrator to obtain more easily the services of highly qualified personnel and to release more easily unsatisfactory personnel.   See Heppner, 665 F.2d at 871-72 ("When the statutory language together with the legislative history makes one interpretation overwhelmingly more plausible than a second interpretation, there is no necessity that the legislative history explicitly rule out the second interpretation")
                

Finally, we note that the regulations promulgated by the Office of Personnel Management (and formerly by the Civil Service Commission) make this exclusion of the Veterans Preference Act even more explicit by listing the Act as one of the various statutes which does not apply to appointments made pursuant to Sec. 4114(a). See 5 C.F.R. Sec. 752.401(c)(14). ⁵ See also 5 C.F.R. Sec. 212.101(b). In reviewing the administrative interpretation given a statute by the enforcing agency, the agency interpretation is entitled to deference. See Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Faulkner v. Watt, 661 F.2d 809 (9th Cir.1981). We conclude that the procedural protections of the Veterans' Preference Act do not apply to part-time physicians, such as Orloff, hired by the VA under the authority of 38 U.S.C. Sec. 4114(a).

B. The Due Process Clause

The threshold inquiry we must make is whether the VA's actions deprived Orloff of an interest in property or liberty. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972).

1. Property Interest in the Appointment

To have a property interest in a governmental benefit, including employment, an individual must have an entitlement to the benefit. Id. at 577, 92 S.Ct. at 2709. Entitlements are created by "rules or understandings" from independent sources, such as statutes, regulations, and ordinances, or express or implied contracts. Id.; Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972).

An entitlement may spring from an understanding if the understanding is "mutually explicit." Board of Regents v. Roth, 408 U.S. at 577, 92 S.Ct. at 2709. Orloff argues that the nature of his employment relationship with the VA and his twenty years of service created such an understanding. See Stretten v. Wadsworth Veterans Hospital, 537 F.2d at 361, 367 (9th Cir.1976). The VA argues that because Orloff worked past the initial expiration date of his appointment, October 15, 1978, any property interest in that appointment expired and Orloff had no legitimate expectation of a continued appointment sufficient to amount to a property interest. We reject this contention. Despite the apparent expiration date of Orloff's contract there may have arisen an...