to be holding sessions here today at the houston law center we appeared here in the mid ninety's and are very pleased to be back she had the chance to have our normal engagement with the counsel for the parties in the cases but also to have the opportunity to talk with the students and faculty after the arguments are finished our argument calendar today consists of five cases to them will be submitted without oral argument later today on the briefs those are appeals thirteen thirty american rights versus dunmore properties and appeal thirty two hundred gibson michael's versus federal deposit insurance corporation three cases are before us for argument we'll hear argument first in appeal thirty one fifty five armstrong vs department of treasury mr burns good morning to you welcome to the court please please proceed thank you are this is my first time frankly are doing an appeal my first time for this court going first this was a blessing and a curse history so you should probably proceed right to your core contention on appeal as to why the settlement agreement should be viewed as invalid well the fundamental issue for mr armstrong when you negotiated the settlement agreement was the idea that he could obtain employment at the united states department of agriculture and that the agency would agree to a set of of facts that would allow him to do so those were negotiated in the settlement agreement or corporate it in the letter what mr armstrong did not know and could not know was that the agency that had already multiple contacts in the united states to part of a culture many of which were negative what is your allegation of a fraud dependent on the february fifth communication from this crash well as misrepresenting the true state of fact no that only goes to show evidence that the facts were misstated the real issue is the fact that the contacts were never disclosed the question for the court is under what legal authority would an employer have the right to contact a potential employer and disclose negative information outside the scope of normal employment relationship in essence this extends beyond simply governmental relations in government employment and it's typical employment case what would happen is it employer would generally prepare him pitted from disclosing informations in the form of a reference without the permission approval of the individual employee and without employees knowledge to some extent in this particular case government officials including senior members of and remember this is the inspector general's office senior members of the inspector general's office who are apparently now they're involved directly in a personnel action or indirectly in my client's supervision we're communicating information that was negative well what is the information there's a handful of anonymous letters so that's where some of the information resided where there are other contacts beyond those letters the i think correct yes there were let i think the case boils down to it page twelve of the respondents brief the respondent says in essence that the reason that there's no fraud here aside from everything else aside from the fact that one of the contacts was not directly disclosed even by ms quest was letter was he said specifically the board held that mr armstrong having metaphors to admit that he lied about the status of the investigation was the cause of the employment offer being put on hold on august twenty seventh rather than the contacts with the treasury that's categorically untrue so how do we know that because we haven't yet had the treasury department the agriculture hiring official on the stand we don't have any testimony from her right but that goes  the central issue there is a factual question that is deeply disputed in this case about what impact these contacts had with the united states department of agriculture for reasons outside the record in the privacy act case which is on appeal agency says were dug out of never contacted her she says he called me back and said the only thing he could tell me was that he never made statements regarding mr de mistura mr armstrong he said he said quote that roddy davis recall him and told him about the you know honest letter when i told delgado that i had understood that the i a e a internal affairs matter was cleared he said what do you mean cleared and he said hypothetically if i told you there was a matter and it wasn't put to bed yet that it was still pending and i'm not saying that at all but if i did what would you do then he answered his own question and said you wouldn't hire him and you would document it then harry would get that and then sue me for saying something that caused him not to be gainfully employed at u s d a sation with me for the december when was that person that conversation occurred in august in your e mail to mr cresswell you said tell us about anything that happened since december no i said tell  about any contacts and she responded in a dependent clause about december and i thought she was referring to the january second letter because that's what she was saying was the only contact if you read that logically the import of what was being  there was reference to the fact that you alleged fraud case and they said well you've got to do that petition for review right and you went ahead and filed off the petition for review determination on the merits of the fraud right and is it your perspective that or let me back up before i ask the question this it seems to me that if if you make a threshold showing that there was good cause why the petition for review was not timely then you have a right to a full hearing that that is exactly the point and here they seem to have decided that issue the fraud the issue on the merits right then and there not only did they cite it on the merits right then and there they they they did something that was i think the the violation of the law student here they confuse materiality of facts with the materiality of result in other words if i misrepresent you material facts in this book this circuit is held i don't have to be intentional about that if i simply misrepresent you material facts in terms of a contract and you know that and you know i am with my on that misrepresentation i can set aside that settlement agreement the fundamental issue that each of the judge told us the misrepresentation the misrepresentation in this case was the fact that the agency claimed that it did not have any connection with the u s d a and again where where and when did they make that claim both on february fifth and after the head of the cresswell left yes that's the cresswell letter where she is less than that she's clearly if you look at those that dynamic i am clearly asking her question she clearly is trying to evade the questions and then she throws it back and says well there are no context other than what your client might have done and so clearly what was being conveyed to you would help what else besides the february fifth well she did was a representation by treasury that your client was misled by we have had no contact by anybody in the government is there anything other than the february fifth creswell letter well yes there are misstatements in the fact that mr delgado did not communicate in the agency did not communicate mr delgado statement and the agreement who in the government made a misrepresented representation to your client that could have led him to sign the agreement whereas if he had known the true state of facts he would not have signed let's conceded miss crystal admits that she didn't let us know about the january contact but i took to law enforcement agents with ms horsley but she said she did she didn't know that's irrelevant what's really respond the agency is responsible and acts towards agency it's not my job to figure out which agency official is being and this is your case rests entirely on allegation of affirmative fraud they lied to me and that's the reason i signed the agreement no one of the things that happened is settlement agreement was clearly for the purpose of protecting any information going from your employer to the partner back because after i've read the settlement agreement i don't see anything that makes it clear that your client and the government were each operating with the assumption that the purpose of this was to keep any information from the department about it well i think the letter would it be for a government employee to take a three day suspension and resign when he's vehemently challenging not only the agency on the on the m s p b action but in federal court in alaska how the course it was to get new employment within the government well if that's if that's your understanding why didn't you wait to your reply brief before talking about behavioral mistake we did raise it below to the anal j and the court has held in bosley that an issue raised on the is an issue preserve but the fundamental issue was let's assume the breach occurred what possible remedy can we get i mean i think the problem from from a practical attorney standpoint representing an actual client it is it is nice to say this would be a breach move fine breach whatever damages this was withdrawn by the district court we raised at the show the the hostility of the agency and the agency's actions in this regard is not being based on go did it breach the agreement yes but it didn't do any harm because it with withdrawn and taken out of the court record before it was distributed anywhere how how is that mistake mutual i thought your basic approach here is to say the government lied to my client and that's the only reason he signed this agreement therefore the agreement should now be undone and then you turn around and say both sides had a mutual misunderstanding the same misunderstanding that seems inconsistent well no if you accept the government's premise there's a mutual mistake if you accept our premise they are saying it's a mutual mistake they're saying the agreement is just fine and it should be left in place and the case is over so they  agree there's a mutual mistake and i don't understand what you think the mistake was on their side i understand what you think that the stake was on your side but to be mutual mistake it has to be a mistake on the other side as well whether there are just two points i would like to raise a response to that the first is their argument is play is look all we were doing was dealing with a disciplinary action and our officials didn't disclose anything other than the discipline about the disciplinary action we've shown that they did side and the connection between that mistaken understanding of the true facts and agreeing to sign the contract but i don't understand what the mistake was on the government side that would make it in the legal doctrine a mutual accurate information to me it would that might be a breach it might be a fraud it might be all kinds of things but it's not a mistaken understanding of the facts which result in their going into an agreement that if they knew the true facts they wouldn't go in to conceding that if we fail to find fraud you have to lose your case depends on fraud no well that's what we need to get straight because first is the question of mutual estate then there's a question of fraud and now you're saying won't even if there's not a mutual mistake and even if there is not fraud i still win because because what because this material misrepresentation that goes to the heart of the contract even if it's should fall short of fraud right because the idea is that the government the government in many ways as we put it is under a legal duty independent of any of this case to disclose contacts regarding its employees from outside employers including other federal agencies so don't you also have an obligation to show intent well yes but the intent both involved in the government's attempt to frame a response to your privacy act in the district court as distinct from the contacts in august and september and in the mid fall which dealt with the misconduct problem that your client had gotten himself into so if we discount the december in january contacts as not going against the spirit of the agreement then you're left with the three or four contacts earlier in the fall when did you first learn about those contacts we first learned about the contacts in may when the united states  of the surrender and you filed your renewed action in the emmis p p may twenty eighth right immediately you acted within a month we acted within a week yet and yet the government says you're untimely right  because that was in the ninety nine days i guess it is or so after the february decision by the administrative judge accepting the settlement agreement proffered by the two parties do you think that the board used the wrong date to measure whether the thirty five day filing deadline was missed yes in any contract with this nomination or frauds from the time of the discovery of the fraud we wouldn't have raised the petition on contacts we didn't know about we raised it to soon as we knew about it and we raised it in response we actually went to the board in response to a directive from the judge but the board acted as if you were challenging the february decision of administr bogle but you weren't because there was something wrong with her actions given what she was handed by the two parties so you really weren't saying she made a mistake you were saying we made a mistake well so you were challenging her decision you what you were misled and it was that agreement because you did not know what the government knew and that they had not disclosed that yes that's that's my that's my answer and  people we might have to call is judge global when you negotiated in these settlement discussions what was your impression of what these parties were attempting to negotiate did you ask your british or here and we asked for them to me that i mean remanded this action for a greater record there would be an additional remedy of there has to be a remedy to mr armstrong what's happening there has to be it was so that maybe i'm just asking you whether you've asked for that i don't believe i did in all honesty i believe that i asked for reversal of the of the case but as i as it where do you want to go back to you want to go back to the a j and have a trial on the merits of the removal action or do you want to go back to the board to have a further chance to prove that the matter should be reopened exactly where you want to be to do what i think when i have a rescission argument i can elect and i think that the case law says that i can choose either to challenge the underlying action and essentially have him reinstated and have the it should amount to the question of good cause with the merits on this play well part of the board looked at the issue of time minutes and it had two components it looked at the diligence which it said it was diligent and they said well you have to show good cause we do not believe that the board made any improper conflation because with the board held was because there is nothing that shows the misstatement was either intentional or material you have not shown good courage very broad question not t board found that good cause have been shown then potentially the next step would be a remand how does one show good cause for undue delay how do you how do you show good paul you would show the good cause for phone as judge lynn was trying to suggest to you if you came to be in said i can't show up at this argument today settled the call and then you said because i have a winning take or because my case isn't as good as i thought it was i would say to you wait a minute you're asking for the lay in time you're not asking for me to decide the merits of your case tell me your wife just had a baby tell her you miss your airplane tell me something that has to do with time not with the merits i have no understanding how the board could say the way we determine whether you are entitled to do you mean go through it all again there was never a trial here and there would have been a trial on the validity of the removal except that an agreement between the parties resulted in a settlement that terminated the case we're not talking about a retrial here we've never had the first trial groups there was no trial of what you mean about go through it all again i don't understand your comment there has been you know start the process again for you know getting up to trial doing discovery for it you know that many of the principals in this case such had everything you might have wanted in a hearing so let's just decide the merits and if we don't find any merit and we're just going to say you're not timely there's a there's a disconnect rule i think that are the we know exactly what they said they were very clear direct and you can't clarify that any more right the only thing you do is get a different rule is it fair to say that the board made a finding about materiality and what it found is that the missing or inaccurate information conveyed to mr armstrong couldn't have been material to his decision yes how can that possibly be right it seems absolute common sense that anybody in his shoes would have never signed disagreement if he had known that the pressure the officials have had already blackballed him with the agriculture officials for whom he was trying to get a new job well i think the board's decision is correct that the treasury officials had not blackballed him these contacts had simply been for want of investigating the privacy act suit and the unanimous letters that that that doesn't cover the august september october november contest if you look at page two fifty of the appendix you'll find an e mail from director horsley to one of her subordinates where she's discussing and what she says her description of the delgado contact in august is very specific in that he is simply saying i'm not saying whether it's been cleared up one way or the other i'm just saying i have to go back and shop before i make any representations you because you know it's there are legal come on it in september he has a job offer from agriculture and now in february we're negotiating a settlement agreement and meanwhile the offers been withdrawn why would the offer have been withdrawn because obviously agriculture got some new information that was negative well the board found that the author offer was withdrawn because after director horsley received some information from the anonymous letter she called mr armstrong and after director hoarsely after mr armstrong had signed the waiver to permit them to do the background check she had called in and said it was it is this thing all through  and he said well i guess it wasn't all cleared up well look if there might have been one two three or four different reasons why horsley might have withdrawn the offer don't we need forcefully on the stand so we can examine her to find out what her real reason was or whether it was several reasons and which ones they were you're asking us to accept one version of her report of a conversation when we don't have her testimony right we don't have her testimony mr armstrong is asking us is that correct we don't have her testimony have her deposition in this supposition about that topic has been placed into the record for this court so to some extent she has been examined under oath already about what her reason was for withdrawing the order yes and what was her answer the only reason was what armstrong admitted to me none of those other things influenced me at all once she learned that there was in fact a on with the investigation had not been cleared up that's when she decided to put it on hold pending the eventual completion of the investigation but mr armstrong is not focused actually on what ms horsley did right he's focused on what you did what your client did let me read to you the issue is not whether mr armstrong would have necessarily been hired by the department of agriculture but whether the agency that you  reaching the settlement his or misrepresented substantive discussions with the department of agriculture and or that's a very poor use and or but he used it and or participated in a ruse whereby mr armstrong gave up his substantive attack on the adverse action in return for relief that g t a new would be granted what mr armstrong seems to be focused on is the way in which you wall extended information to miss orderly not necessarily what miss horsley did with it although that of course is relevant to the outcome mr armstrong's case isn't it the case that you all  killed what you all had been doing behind closed door i would characterize the flow of information as primarily the treasury investigating mr armstrong's privacy act suit our address your attention to pages one projects that was filed in october so all the context before the filing date couldn't have been about the privacy act suit they had to be about what kind of a guy mr armstrong was those contacts are one of the employment references from director who are going to call up his former supervisor and who are just emphasize the court again the female conversation that mr armstrong is relying on to obtain his misrepresentation argument specifically limited to the period since december two thousand and seven and this was the period that mr armstrong's attorney put into the e mail itself if you look at page eighty six in the append like i am i'm back on judge playgroups question which is whether the government didn't owe a duty of candor to its employee armstrong on the eve of the agreement to say look at before you sign this agreement dropping your appeal at the end married to some protection board are some things we have to tell you what we have to tell you is that some of our people maybe without proper authorization sent letters to the agriculture department that may prejudice your chance of getting a job there and you need to know that so that you can make an informed decision whether you want to sign this settlement agreement or not don't you think the government hold that sort of a duty of can the government doesn't want to do of candor in this case mr armstrong was aware of the six anonymous letters how do we know that because he filed the privacy based on those six anonymous letters or the six letters cited specifically included in the complaint in october in the privacy act i believe they were yes i believe that director and i was the reason director horsley i called him back in and the government is responsible for the actions of all of its different units even if the two units are separate from one another and it seems to me that the government owed it to armstrong prior to signing the agreement to tell him what had happened what contacts what information had been made known to agriculture because the governor is perfectly aware he was trying to get a job at agriculture right the government knew that he had applied for a job and they knew that the point of the agreement was to hold that possibility open and they knew that it might be under a cloud because of the prior contacts so they should have told them about the prior contact i direct and this was attention to the fact that the january second letter from director horsley was the first thing that initiated these discussions because the letter said we have heard that this thing has been all cleared up so all that's what initiated people saying well maybe he still has a chance at getting this job so that's what initiated the discussions so to some extent at that point that's why the e mail exchange in the pacific representation here is limited to the period subsequent to december two thousand and seven because that was the specific point of the january second letter let me ask you this question  this i appreciate the fact that you're up here doing your duty as a good lawyer on behalf of your lawyer even though your client doesn't come off sounding very good in this particular case would you agree or disagree with the following statement had mr armstrong been advised that there were any contacts between the agency and the department of agriculture other than those disclosed by miss cresswell he would have certainly sought to investigate the nature substance and impact of said before to any resignation from take to and before agreeing to the settlement document would you agree that that's probably true that had mr armstrong known of the fact he very well would not have signed that agreement without having further investigated what well i hate to make any speculation as to what he would have done over i think if you had actually had the direct the investigators note can be found at page one fifty one of just one telephone call one very short telephone call by agent rock to director horsley i don't think that would have had any significance at all because a telephone call said hey in your letter you say sources say everything's all cleared up obviously the treasury was investigating leaks within the treasury so we called up director horsley according to the nose of the investigation  what you mean by sources she said well i don't really feel like saying right now and that was the extent of the conversation on my side of my time zones expired we have to do it firm the decision of the court below all right thank you  in the privacy act suit i'm related issues and mentions some matters that bore on these issues but she's never been deposed on the actual issue of her contacts and the effect of those things in those deposition she did say that my client was candid with her law enforcement agent the first thing that it was sent to law enforcement agent over to gather the letters and the second thing they did was they sent a lot of foresman agents with their badges who were working for the inspector general's office over to talk to her twice and if you look at page one seventy seventy one seventy eight which is the december twelfth and to you and you read that interview you'll see that there's virtually no discussion whatsoever of the privacy to privacy act suit had to do with did anyone disclose confidential information the agency's defense which no we don't know anything about it we didn't disclose it they said these law enforcement agents over to reaffirm their position on this case and they sent those agents to talk to every employee in armstrong's division every single one and they mentioned his candor and they mentioned his ferocity and they went into his health issues and they went to every aspect of his behavior they knew exactly what they were doing whether this court decides for mr armstrong or not let me leave the court with this i have the right in the real world as a trial attorney to rely on the candor of my opposing counsel to get information particularly when it's a government agency that by law has exclusive possession of that and i have no independent means of getting it other than request need either through the privacy act or directly had we been aware at any point that any age spoke to anyone in every culture we would fought that case tooth and nail we were already in a federal lawsuit we were certainly not surrendered our rights here the last thing i'll say is that this was the only reason this hoarsely even spoke to these agents was because they were law enforcement agents it was law enforcement agents speaking to law enforcement agents there is no doubt whatsoever that had we even had the slightest inkling that any law enforcement agent had spoken to anyone we would have done two things since the since the board speaks of heart let me finish on harm we would have done two things we would have pursued the underlying action not only for the board proceeding but for a federal lawsuit and we would have gone into great detail as to what the agency had accomplished here by contacting mr horsley i think we have the right to explore that issue at a minimum and i ask the board to first thank you all right we think both counsel the appeal is submitted