White v. U.S. Dept. of the Army, 82-2093

• Decision Date: 01 November 1983
• Docket Number: No. 82-2093,82-2093
• Citation: 720 F.2d 209
• Parties: Brenda WHITE, Petitioner, v. UNITED STATES DEPARTMENT OF THE ARMY, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 209

720 F.2d 209

232 U.S.App.D.C. 34

Brenda WHITE, Petitioner, v. UNITED STATES DEPARTMENT OF THE ARMY, Respondent.

No. 82-2093.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 22, 1983.

Decided Nov. 1, 1983.

As Amended Nov. 1, 1983.

Petition for Review of an Order of the Merit Systems Protection board.

William S. Aramony, Washington, D.C., with whom James H. Heller, Washington, D.C., was on the brief, for petitioner.

Jeffrey N. Gibbs, Sp. Asst. U.S. Atty., with whom Stanley S. Harris, U.S. Atty., and Royce C. Lamberth, R. Craig Lawrence, and Michael J. Ryan, Asst. U.S. Attys., Washington, D.C., were on the brief, for respondent.

Evangeline W. Swift, Atty., Merit Systems Protection Bd., Washington, D.C., entered an appearance for the Board.

Before WRIGHT and WILKEY, Circuit Judges, and MacKINNON, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge J. SKELLY WRIGHT.

J. SKELLY WRIGHT, Circuit Judge:

Petitioner in this case is a program analyst in the Department of the Army (Department). After completing a 52-week waiting period, she became eligible for a periodic within-grade step increase in pay on November 8, 1981. An employee has a statutory right to periodic within-grade step increases as long as certain conditions are met. 5 U.S.C. Sec. 5335(a) (1982). One such condition is that "the work of the employee * * * [must be] of an acceptable level of competence as determined by the head of the agency." 5 U.S.C. Sec. 5335(a)(B). Because of her supervisor's determination that petitioner had not performed her work at an acceptable level of competence, her increase was withheld. This determination was reconsidered by the Department at her request and was sustained. Petitioner then appealed to the Merit Systems Protection Board (MSPB), as was her right under 5 U.S.C. Sec. 5335(c). MSPB sustained the determination of unacceptable performance after requiring the Department to show that the determination was supported by substantial evidence.

I. REACHING THE ISSUE OF STATUTORY CONSTRUCTION

Petitioner argues that this case involves a narrow question of statutory construction stemming from the appellate procedure provisions of the Civil Service Reform Act of 1978, 5 U.S.C. Sec. 7701 (1982): Should MSPB apply the "substantial evidence" standard or the "preponderance of the evidence" standard when reviewing a federal agency's denial to an employee of a periodic within-grade step increase in pay. The standard of review that MSPB is to apply to agency personnel determinations is set out in 5 U.S.C. Sec. 7701(c)(1)(A) and (B). Paragraph (A) prescribes the substantial evidence standard for review of any "action based on unacceptable performance described in section 4303," while paragraph (B) prescribes the preponderance of the evidence standard for "any other case." The issue petitioner raises is therefore whether a denial of a periodic within-grade step increase in pay that is based on unacceptable performance should be governed by paragraph (A) or (B).

Respondent argues that we should not reach this issue of statutory construction because MSPB's decision should be affirmed regardless of the statutory question's resolution. For the following reasons we disagree and therefore do reach the statutory issue.

First, respondent argues that the decision of MSPB's presiding official, although purporting to apply the substantial evidence test, expressed his factual findings with such confidence that he would clearly have reached the same conclusion had he been applying the preponderance of the evidence standard. Brief for respondent at 8-9. We cannot make such an extreme assumption. The presiding official expressly stated that he was applying the substantial evidence test and there was nothing in his opinion to indicate his views on the sufficiency of the evidence under any other standard. See White v. Dep't of the Army, Case No. DC 531D8210681 (MSPB, Washington Regional Office, July 16, 1982) at 2-3, Joint Appendix at 2-3. Indeed, the presiding official did little more than use such words as "proven," "shown," and "clearly established" in evaluating the evidence.

Second, respondent argues that this court should affirm because an independent assessment of the evidence would show that the personnel action would in any case be sustainable under the preponderance of the evidence standard. Brief for respondent at 9-11. We refuse to make such an independent inquiry into the sufficiency of the evidence. Such an inquiry is properly the province of the agency, not this court. If MSPB relied on incorrect legal grounds, it would be error for this court to enforce without first remanding for agency examination of the evidence and proper fact-finding. See First Nat'l Maintenance Corp. v. NLRB, 452 U.S. 666, 672 n. 6, 101 S.Ct. 2573, 2577 n. 6, 69 L.Ed.2d 318 (1981). "[A]n administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained." SEC v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943). See generally 3 K. DAVIS, ADMINISTRATIVE LAW TREATISE Sec. 14:29, at 128 (2d ed. 1980) ("Even if the evidence in the record, combined with the reviewing court's understanding of the law, is enough to support the order, the court may not uphold the order unless it is sustainable on the agency's findings and for the reasons stated by the agency.") (emphasis added). We reject the assertion that we can avoid examining the law by instead independently examining the sufficiency of the evidence.

Third, respondent argues that because petitioner remained silent below when respondent urged MSPB's presiding official to apply the substantial evidence standard, she should not now be able to raise the statutory issue before this court. Brief for respondent at 6-8. As support, respondent cites the "well-established principle of administrative law * * * that courts will not overturn an agency action on a ground never presented to the agency." Brief for respondent at 7, citing Unemployment Comp. Comm'n of Alaska v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 251, 91 L.Ed. 136 (1946). For a number of reasons we believe that this principle should not apply to this case.

While respondent states the general rule, that rule is a flexible one. See Hormel v. Helvering, 312 U.S. 552, 556-557, 61 S.Ct. 719, 721, 85 L.Ed. 1037 (1941). "The matter of what questions may be taken up and resolved for the first time on appeal is one left primarily to the discretion of the courts of appeals, to be exercised on the facts of individual cases." Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 2877, 49 L.Ed.2d 826 (1976). Exercise of that discretion is particularly appropriate where, as here, the question is a purely legal one, the resolution of which would not be aided by any further factual development. Cf. United States v. Krynicki, 689 F.2d 289, 291-292 (1st Cir.1982). See also Fuchs, Prerequisites to Judicial Review of Administrative Agency Action, 51 IND.L.J. 817, 899 (1976) (a judicial decision is most justified when "legal answers turn on the interpretation of ordinary words used in statutes").

While it may nevertheless be important for a reviewing court to refrain from interpreting a statute until it has the benefit of the agency's interpretation, in this case MSPB has fully stated its position and reasoning on this issue. See Parker v. Defense Logistics Agency, 1 MSPB 489, 499-506 (1980). Although petitioner should ideally have given MSPB an opportunity to reconsider its Parker position in the proceeding below, see brief for respondent at 8 n. 6, petitioner's silence during the proceeding was understandable. At the time of the proceeding below, Parker had already been decided and its conclusion that the substantial evidence test should apply had been upheld by the Court of Claims in Meyer v. Dep't of Health & Human Services, Social Sec. Admin., 666 F.2d 540 (Ct.Cl.1981). Although there had been a contrary judicial determination holding that Parker was wrong and that the preponderance of the evidence standard should apply, this had only occurred a few days before petitioner's proceeding. See Schramm v. Dep't of Health & Human Services, 682 F.2d 85 (3d Cir.1982). (Schramm was decided on June 28, 1982 and petitioner's MSPB proceeding was on July 7, 1982.) Given this chronology, it would seem unjust to prevent petitioner from raising the standard of review issue on appeal. Cf. Hormel v. Helvering, supra, 312 U.S. at 557-560, 61 S.Ct. at 721-723 (reviewing court properly decided legal issue not presented below because that legal issue was raised by case subsequent to administrative proceeding).

II. THE STATUTORY LANGUAGE

The language of the statute seems clear: Paragraph (A) only applies to agency "action based on unacceptable performance described in section 4303 " (emphasis added), and Section 4303 only refers to decisions to remove or reduce the grade of an employee. The section contains no reference to decisions denying an employee a within-grade step increase in pay. Those decisions are exclusively described in Section 5335. Thus, under the plain language of the statute paragraph (B) and its preponderance of the evidence standard would govern.

Respondent argues that the statute's language is not unambiguous. The argument is that Congress could have simply said "action under section 4303" rather than "action based on unacceptable performance described in section 4303." See brief for respondent at 12; see also Parker v. Defense Logistics Agency, supra, 1 MSPB at 501. Whether or not other unambiguous wording was possible, we find no ambiguity in the wording Congress chose. Under the statute's plain meaning paragraph (B) and its preponderance of the evidence standard govern.

III. THE STATUTE'S CLEAR LANGUAGE SHOULD BE FOLLOWED

In this case, as in prior cases of this type, MSPB has applied the...