Source: https://www.fedmanager.com/columns/case-law-update/2877-federal-circuit-court-of-appeals-grants-petition-for-rehearing-en-banc-in-due-process-case
Timestamp: 2019-04-19 17:39:30+00:00

Document:
On October 13, 2017, the United States Court of Appeals for the Federal Circuit granted a petition for rehearing en banc filed by the Department of Defense, and vacated the court’s panel opinion in Federal Education Association-Stateside Region v. Department of Defense. 841 F.3d 1362 (Fed. Cir. 2016), reversing an arbitrator’s opinion after finding a due process violation. In its October 13, 2017 order, the appeals court requested that the parties address the relevant cases and issues, but specifically requested that the parties address the court’s decisions in Sullivan v. Department of Navy, 720 F.2d 1266 (Fed. Cir. 1983) and Ryder v. United States, 585 F.2d 482 (Ct. Cl. 1978).
In Federal Education Association, a teacher petitioned for review of an arbitrator’s decision denying the union grievance of her removal for “inappropriate physical contact with a student.” In a 2-1 panel decision, the appeals court panel held that the teacher’s due process rights were violated by an improper ex parte communication between the principal of the school, the district superintendent, and the deciding official, the community superintendent. Specifically, the panel decision held that the district superintendent’s comment that “we need to try and terminate her” to the principal and the individual who would later become the deciding official (the community superintendent) was an ex parte communication that violated the teacher’s due process rights.
The panel majority opinion disagreed with the arbitrator’s conclusion that the ex parte communication (the e-mail between the principal, the deciding official, and the district superintendent) did not contain any “new and material information” so as to qualify it as an ex parte communication that violated due process. The panel decision worked through the Stone factors, which originated in the seminal case Stone v. Federal Deposit Insurance Corp., 179 F.3d 1368 (Fed. Cir. 1999), and found that all three Stone factors (whether the ex parte communication introduces cumulative information or new information, whether the employee knew of the error and had a chance to respond to it, and whether the communication was of the type likely to result in undue pressure upon the deciding official to rule in a particular manner) were satisfied.
Specifically, the panel majority opinion found that the e-mail was sent in contemplation of removal of the teacher and provided “the new information that the official’s supervisor wanted [the teacher] to be terminated. It also found that the teacher was unaware that the principal had sent the e-mail or that the superintendent had received it. Finally, the panel decision held that the recommendation of termination by the deciding official’s supervisor was ‘of the type likely to result in undue pressure upon the deciding official to” terminate the teacher. For the above-stated reasons, the three-member panel held by a count of two-to-one that due process was violated, and reversed the teacher’s removal.
The panel dissenter, Circuit Judge Plager, found that the Stone factors were not satisfied. Specifically, he found that the e-mail in question, sent prior to the termination proceeding, was not “new and material” information. For the second Stone factor (whether the employee knew of the error and had a chance to respond to it), Judge Plager found that the employee gained knowledge of the e-mail in question during the arbitration proceeding and had the post-termination opportunity to respond during a full and fair hearing, even if she did not have the opportunity to respond to the e-mail prior to her termination, during the removal proceeding. The dissenting judge cited the language of Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985), reciting a footnote from that case which stated that there were, “of course, some situations in which a post-deprivation hearing will satisfy due process requirements.” For the third Stone factor, Judge Plager found that it was inappropriate to challenge the arbitrator’s conclusion that the deciding official did not act due to any perceived pressure from the district superintendent, given the high standard of review for factual conclusions.
After the removal was reversed by the appeals court, the Department of Defense petitioned the appeals court for a rehearing en banc, which allows all of the judges of the court to reconsider a panel decision of significant public importance or to reconsider a decision that appears to be in conflict with precedent. The agency’s argument in its petition for rehearing en banc largely tracked the dissent of Judge Plager, and asked the en banc court to consider to what extent ex parte communications that occur prior to the initiation of termination proceedings are covered by Stone.
On October 13, 2017, the United States Court of Appeals for the Federal Circuit granted the Department of Defense’s petition for rehearing en banc. As noted above, the appeals court requested that the parties address the relevant cases and issues, and specifically the decisions in Sullivan and Ryder, cases that preceded and informed Stone.
Read the full order: Federal Education Association – Stateside Region v. Department of Defense.
Read the panel opinion: Federal Education Association – Stateside Region v. Department of Defense.

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