Squillacote v. U.S., 83-1882

• Decision Date: 13 July 1984
• Docket Number: No. 83-1882,83-1882
• Citation: Squillacote v. U.S., 739 F.2d 1208 (7th Cir. 1984)
• Parties: George SQUILLACOTE, et al., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1208

739 F.2d 1208

George SQUILLACOTE, et al., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

No. 83-1882.

United States Court of Appeals Seventh Circuit.

Argued Jan. 14, 1984.

Decided July 13, 1984.

Kevin M. Forde, Richard J. Prendergast, Katrina Veerhusen, Chicago, Ill., for plaintiffs-appellants.

Joseph P. Stadtmueller, U.S. Atty., Milwaukee, Wis., for defendant-appellee.

Before CUMMINGS, Chief Judge, and PELL and CUDAHY, Circuit Judges.

CUMMINGS, Chief Judge.

This class action lawsuit is another in the series of cases challenging Congressional efforts in the late 1970's and early 1980's to brake the inflationary economy by means of limitations on salary increases authorized for federal employees. See, e.g., United States v. Will, 449 U.S. 200, 222, 101 S.Ct. 471, 484, 66 L.Ed.2d 392; Foley v. Carter, 526 F.Supp. 977, 980 (D.D.C.1981). The plaintiff class is composed of 5,000-6,000 executive level federal employees who are members of the Senior Executive Service (SES) established in 5 U.S.C. Secs. 3131-3136 (1982). ¹ The named plaintiffs are 21 Regional Directors of the National Labor Relations Board. They complain that salary limitations enacted by Congress in Fiscal Years (FY) 1979, 1980, and 1981 should not have been applied to limit their salaries, because the SES pay system, established in 5 U.S.C. Sec. 5382 (1982), ² superseded the limitations, and the limitations by their own terms did not apply to SES members.

The complaint was filed in the United States District Court for the Eastern District of Wisconsin and jurisdiction was invoked pursuant to 28 U.S.C. Sec. 1346(a)(2) (the Tucker Act). The parties filed cross-motions for summary judgment and agreed that the issue is solely one of law. In a careful opinion, Chief Judge Reynolds granted the government's summary judgment motion and denied that of the plaintiffs, holding that the case presented no genuine issue of material fact and the defendant was entitled to judgment as a matter of law. Squillacote v. United States, 562 F.Supp. 338 (E.D.Wis.1983). Plaintiffs appeal from that decision. We affirm the district court's decision with regard to FY 1979 but reverse with regard to FY 1980 and 1981.

The Senior Executive Service (SES) was created as part of the Civil Service Reform Act of 1978 (CSRA) "to ensure that the executive management of the Government of the United States is responsive to the needs, policies, and goals of the Nation, and otherwise is of the highest quality." 5 U.S.C. Sec. 3131. To establish the SES, positions were to be converted from GS-16, 17, and 18 levels and Executive Schedule levels IV and V. ³ See 5 U.S.C. Sec. 3132(a)(2). The President was authorized to establish at least five SES pay levels as well as to set pay rates for the SES. 5 U.S.C. Sec. 5382(a). Agencies were directed to designate positions deemed appropriate for conversion from the Executive or General Schedule to SES (P.L. 95-454, Sec. 413(b)(1), 92 Stat. 1111, 1175), and employees serving in those positions at the time of the designation were entitled to elect to accept or decline conversion (Id., Section 413(c)(1)). The actual conversion of positions to SES from the Executive and General Schedules took place on July 13, 1979, nine months after passage of the CSRA. See id., Section 415(a)(1).

Like other federal pay systems, the SES does not exist in a vacuum but rather is part of an intricate web of legislation regulating both scheduled and payable rates of pay for federal employees. In addition to the statutes which establish the three pay systems already discussed and generally govern the overlapping of pay rates among the systems, ⁴ salary limitation provisions have been enacted periodically to cap for a prescribed period salaries of specified federal employees. These limitations often have been enacted as part of the appropriations process, especially during times of national economic difficulties, and often are challenged by those whose compensation is thereby limited. See, e.g., U.S. v. Will, 449 U.S. 200, 222, 101 S.Ct. 471, 484, 66 L.Ed.2d 392 (judicial salaries); United States v. Dickerson, 310 U.S. 554, 60 S.Ct. 1034, 84 L.Ed. 1356 (reenlistment bonuses); Foley v. Carter, 526 F.Supp. 980 (D.D.C.1981) (non-Article III Judicial Branch salaries).

The case before us arises in a similar context. The plaintiff class (plaintiffs) argues that salary limitations enacted for each of the first three fiscal years SES was in existence (FY 1979, 1980, and 1981) did not apply to SES. Because the Office of Personnel Management (OPM) applied those limitations to SES, so that plaintiff SES members did not receive the total salary increases they would have otherwise received, plaintiffs sued for damages amounting to the difference between the salaries they received due to enforcement of the limitation and the salaries they would have received if the limitation had not been enforced. Because plaintiffs separately challenged each year's limitation in a separate count and because the relevant legal issues are different for each count, each count will be considered separately.

A. Count 1: FY 1979 (October 1, 1978 through September 30, 1979).

On September 30, 1978, a general limitation on FY 1979 salary increases was enacted. This limitation, Pub.L. 95-391, Sec. 304(a), 92 Stat. 788-89 (hereinafter Section 304(a)), ⁵ froze salaries for FY 1979 at the rates that were payable on September 30, 1978. This limitation affected the salaries of federal employees if the rates for their positions were fixed at or limited to rates equal to or greater than rates payable for level V of the Executive Schedule pay system. Id.

Section 304(a) was enacted prior to the passage, as part of the Civil Service Reform Act, of 5 U.S.C. Sec. 5382, which established the system for setting SES pay rates. Plaintiffs rely heavily on the fact of Section 304(a)'s earlier enactment in challenging the application of the Section 304(a) limitation to SES. First they argue that certain descriptive referents in Section 304(a), ostensibly broad enough to encompass Section 5382 and the SES, do not in fact so apply because Section 5382 and the SES were not yet in existence at the time of Section 304(a)'s passage. Second, they contend that even if Section 304(a) initially applied to SES, Section 5382 subsequently repealed the limitation's application to SES. Because we conclude both that Section 304(a) applied to limit FY 1979 salaries of even SES members and that Section 5382 did not repeal the Section 304(a) salary limitation as applied to SES, we affirm the ruling of the district court that SES members were subject to the Section 304(a) salary limitation for FY 1979. Unlike the district court, however, we reach this conclusion without relying on legislative history for Section 304 or Section 5382. Because the language of both statutes is unambiguous on its face, such a review is unnecessary. See, e.g., Aloha Airlines Inc. v. Director of Taxation, --- U.S. ----, 104 S.Ct. 291, 78 L.Ed.2d 10. ⁶

1. Section 304(a) applied to SES

Section 304(a) describes the extent of its salary limitation by reference to the September 30, 1978 payable rate for positions; no salary could be paid "at a rate which exceeds the rate * * * of salary * * * payable for such office or position for September 30, 1978, * * *." ⁷ Plaintiffs suggest that because the SES was not yet established on September 30, 1978, their positions were not yet established either, so that Section 304(a) could not apply to them.

To decide for plaintiff on the basis of this argument, it would be necessary to conclude that the conversion of plaintiffs' positions from the Executive and General Schedules to the SES transformed these positions into new positions. But there is no basis for drawing such a conclusion. It is undisputed that plaintiffs did not receive new titles or take on new responsibilities when their positions were converted to SES on July 13, 1979. The Civil Service Reform Act created only a new pay system, not new positions with new responsibilities. The use of the word "conversion" in Section 413 of the Civil Service Reform Act (Pub.L. 95-454, Sec. 413) to describe the administrative process by which positions were to be placed in SES makes clear that at least initially SES would be composed of already-existing positions.

Plaintiffs point out that Section 413(c)(1)(B) refers to an employee's right to elect to "accept conversion and be appointed to a[n SES] position." But this statement does not establish that the positions, once converted, are new, especially in light of the directive in Section 413(c)(1), apparently overlooked by plaintiffs, that "each employee serving in a position at the time it is designated as an [SES] position" has the right to accept or decline conversion. In sum, the conversion was a transfer of positions to the new SES pay system rather than a creation of new positions.

This Court adopts the holding of the district court that the Civil Service Reform Act "did not create new positions which would enable plaintiffs, by converting to those positions, to move out from under the fiscal 1979 pay cap. For the purposes of Pub.L. 95-391 [Section 304(a) ], the plaintiffs, after conversion to SES status, were regarded as continuing to hold 'office[s] or position[s]' existing on September 30, 1978." 562 F.Supp. at 343. Plaintiffs' positions, even after conversion to SES, continued to be subject to the Section 304(a) pay limitation. ⁸

Again relying on Section 5382's enactment subsequent to the passage of Section 304(a), plaintiffs argue alternatively that Section 304(a) does not describe their SES salary rates and therefore does not apply to them. By its terms (see supra, note 5) Section 304(a) applies to federal employees whose salary rates are (1) fixed at a rate at least equal to that for level V of the Executive Schedule (Section 304(a)(1)); (2) limited pursuant to Section 5308...