Payne v. Panama Canal Co.
| Decision Date | 17 March 1977 |
| Docket Number | Civ. No. 74-0366-B. |
| Citation | 428 F. Supp. 997 |
| Parties | Arthur C. PAYNE, Plaintiff, v. PANAMA CANAL COMPANY, Defendant. |
| Court | U.S. District Court — Panama Canal Zone |
Henry L. Newell and Daniel D. Douglass, Balboa, Canal Zone, for plaintiff.
Dwight A. McKabney and William H. Beatty, Balboa Heights, Canal Zone, for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The Plaintiff, Arthur C. Payne, is an employee of the defendant, Panama Canal Company, a federally chartered corporation which is subject to the rules, regulations and decisions of the United States Civil Service Commission. Plaintiff had been employed by the defendant for a number of years and at the time of his removal he was an Administrative Services Assistant with the Supply and Community Services Bureau of the defendant, living in the Canal Zone in housing owned and operated by the defendant.
The matter is before this court on a Petition for Declaratory Judgment filed December 18, 1974. Defendant's motion to dismiss was overruled and as there is no dispute over the material facts bearing on the issue of liability this question is determined pursuant to cross motions for partial summary judgment.
1. The plaintiff was removed from his employment with the defendant Panama Canal Company effective May 9, 1964. The removal was proposed and effected based upon three charges: (1) conduct unbecoming an employee of the Panama Canal Company; (2) failure to follow instructions of superiors; and (3) failure to obtain clearance from the office of the Governor before releasing for publication articles pertaining to Government activities in the Canal Zone 2. Mr. Payne first appealed his case through the agency appeals system, and a hearing was held before an agency appeals examiner. The removal action was sustained at the agency appellate level. On May 26, 1964, Mr. Payne appealed to the Civil Service Commission. A hearing was held on June 17, 1964, and the Commission sustained the agency removal action by decision dated September 3, 1964. Mr. Payne then appealed to the Commission's Board of Appeals and Review, which sustained the removal action in a decision dated February 10, 1965.
3. After pursuing his administrative remedies to an unsuccessful conclusion, plaintiff on November 3, 1965, filed two lawsuits: the first in the U.S. District Court for the District of Columbia seeking reinstatement (Payne v. Macy, Civil No. 2754-65), and the second in the U.S. Court of Claims seeking back pay. This latter suit was subsequently transferred to the U.S. District Court for the District of Columbia (Payne v. United States, Civil No. 952-67).
4. On April 11, 1968, the suit for reinstatement was dismissed for want of prosecution; on April 15, 1970, the court also dismissed the suit for back pay.
5. On February 16, 1971, plaintiff persuaded the U.S. District Court for the District of Columbia to set aside the dismissal orders. After hearing arguments on cross-motions for summary judgment, the court ordered that the third charge, failure to clear publications of articles with Government, against plaintiff be dismissed and that the case be removed to the Civil Service Commission for reconsideration of charges 1 and 2.
6. In a decision dated June 21, 1972, the Civil Service Commission dismissed charge 2 and found charge 1 to be only partially sustainable. On that basis the Commission reduced the removal penalty to a 90-day suspension and directed the defendant Panama Canal Company to restore plaintiff to his former position on one of like seniority, status, and pay. Thereafter, on July 5, 1972, the U.S. District Court for the District of Columbia, with the consent of plaintiff's counsel, dismissed without prejudice plaintiff's suits for reinstatement and back pay on the ground of mootness.
7. In accordance with the Civil Service Commission directive, the plaintiff was reinstated on June 22, 1972 at the pay level of NM-9 and promoted retroactively to May 31, 1970 to pay level NM-11. The records were also amended to show the 90-day suspension.
8. Plaintiff submitted on May 14, 1974, a claim to defendant for back pay in the amount of $181,674. Defendant concedes only that back pay in the amount of $12,248.88 is due.
9. On December 18, 1974, plaintiff initiated the present action against the Panama Canal Company in this Court's Balboa Division. The complaint is in the form of a "Petition for Declaratory Judgment" wherein the Court is asked to enter a judgment declaring plaintiff's rights under the Back Pay Act of 1966, as amended (5 U.S.C. § 5596) with respect to the recovery of certain losses which plaintiff alleges were incurred as a result of his removal from defendant's employ on May 9, 1964.
10. Defendant Canal Company answered the complaint on April 9, 1976, after unsuccessfully attempting to have the case dismissed on the grounds that the action was barred by (a) the judgment of dismissal entered by the U.S. District Court for the District of Columbia in the two prior cases brought by plaintiff against defendant and (b) the applicable statute of limitations, 5 C.Z.C. § 42(3)(A).
11. At a pretrial conference held on October 14, 1976 it was agreed that there were three issues with respect to liability, which are as follows:
(a) Whether the Back Pay Act of 1966, 5 U.S.C. § 5596, as implemented by Civil Service Commission regulations published at 5 CFR 550.801-550.804, gives plaintiff a cause of action for the following elements of his claim: (1) interest; (2) an inflation factor; (3) the value of leave not taken; (4) reimbursement for taxes paid by plaintiff on interim earnings; (5) attorney's fees; (6) a rent differential equivalent to the difference between the cost of rental housing actually paid during the period he was absent from defendant's employ and the cost of rental housing he would have paid in the Canal Zone; (7) expenses incurred for travel to obtain employment during the period plaintiff was absent from defendant's employ and for travel and shipment of household goods upon return to the Canal Zone for reinstatement to defendant's employ; and (8) cost of certain telephone calls.
(b) Whether 5 U.S.C. § 5596 gives defendant Panama Canal Company the right to deduct from back pay otherwise due the following items:
(1) Overtime compensation received by plaintiff from other employment during the period he was deprived of employment by defendant;
(2) Profit realized by plaintiff from moving expenses paid by another employer during the period he was deprived of employment by defendant;
(3) Earnings received by plaintiff from other employment during the periods when he would or might have been on leave had he remained in the employ of the defendant; and
(c) Whether plaintiff is entitled to any of the eight elements of his claim that are set forth in paragraph 11(a) above by virtue of section 14 of the Veterans Preference Act of 1944 (5 U.S.C. § 7701), as amended.
12. It was also agreed by the parties at the pretrial conference that the liability question would be decided by the Court on the basis that the parties had made cross motions for partial summary judgment.
13. On January 13, 1977, the date set for oral argument on the motions for partial summary judgment, a motion by plaintiffs to amend the pretrial order was sustained. The third issue (relating to the Veterans Preference Act), which the parties had agreed to submit to the Court for decision, was deleted from the order, and the first issue (relating to the Back Pay Act) was expanded to read as follows:
"Whether the Back Pay Act of 1966 (5 U.S.C. § 5596), as amended, the regulations of the Civil Service Commission issued pursuant to the Act (5 CFR 550.XXX-XXX-XXX), applicable decisions of the Court of Claims and the Comptroller General, and other judicial, administrative and legislative corrective action afforded any and all employees within the meaning of § 14 of the Veteran's Preference Act of 1944, as amended, (5 U.S.C. § 7701), as well as provisions of the Canal Zone Code and the Panama Canal Personnel Manual, give plaintiff a cause of action for the following elements of his claim: (1) interest; (2) an inflation factor; (3) the value of leave not taken; (4) reimbursement for taxes paid by plaintiff on interim earnings; (5) attorney's fees; (6) a rent differential equivalent to the difference between the cost of rental housing actually paid during the period he was absent from defendant's employ and the cost of rental housing he would have paid in the Canal Zone; (7) expenses incurred for travel to obtain employment during the period plaintiff was absent from defendant's employ and for travel and shipment of household goods upon return shipment to the Canel Zone for reinstatement to defendant's employ; and (8) cost of certain telephone calls."
14. The Plaintiff, as is stipulated between the parties is a veteran of the United States Navy having served in World War II and is a "preference eligible employee" in accordance with 5 U.S.C. 7511 and 7701.
1. The Court has jurisdiction over the parties and the subject matter of the action.
2. The Panama Canal Company, which is included within the definition of "Executive agency" at 5 U.S.C. § 105, is subject to the provisions of the Back Pay Act of 1966, as amended, 5 U.S.C. § 5596. See 5 U.S.C. § 5596(a)(1).
3. The Back Pay Act provides in pertinent part as follows:
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...must be read as authorizing an inflation factor, since a 1964 dollar was not "equal to" a 1972 dollar. Payne v. Panama Canal Co., 428 F.Supp. 997, 1001 (D.C.Z.1977). The Fifth Circuit reversed on this point, finding an inflation award inappropriate absent an express authorization for such a......