Source: https://www.legalcrystal.com/case/104177/united-states-vs-larinoff
Timestamp: 2017-12-16 03:25:30
Document Index: 694025959

Matched Legal Cases: ['§ 308', '§ 308', '§ 308', '§ 906', '§ 308', '§ 308', '§ 3']

United States Vs Larinoff - Citation 104177 - Court Judgment | LegalCrystal
United States Vs. Larinoff - Court Judgment
LegalCrystal Citation legalcrystal.com/104177
Case Number 431 U.S. 864
Respondent Larinoff
united states v. larinoff - 431 u.s. 864 (1977) u.s. supreme court united states v. larinoff, 431 u.s. 864 (1977) united states v. larinoff no. 76-413 argued april 27, 1977 decided june 13, 1977 431 u.s. 864 certiorari to the united states court of appeals for the district of columbia circuit syllabus respondent enlisted members of the united states navy and others similarly situated, who agreed to extend their enlistments at a time when a statute provided for a variable re-enlistment bonus (vrb), in addition to the regular re-enlistment bonus (rrb), for members of the armed forces whose ratings were classified as a "critical military skill" held entitled to vrb's determined according to the award level in.....
United States v. Larinoff - 431 U.S. 864 (1977)
U.S. Supreme Court United States v. Larinoff, 431 U.S. 864 (1977)
Respondent enlisted members of the United States Navy and others similarly situated, who agreed to extend their enlistments at a time when a statute provided for a Variable Re-enlistment Bonus (VRB), in addition to the Regular Re-enlistment Bonus (RRB), for members of the Armed Forces whose ratings were classified as a "critical military skill" held entitled to VRB's determined according to the award level in effect at the time they agreed to extend their enlistments, notwithstanding that the Navy eliminated their ratings from the "critical military skill" list before they began serving their extended enlistments, and that the statutes authorizing the RRB and VRB were repealed and a new Selective Re-enlistment Bonus (SRB) substituted before one of the respondents began to serve his extended enlistment. Pp. 431 U. S. 869 -882.
(a) Implementing regulations requiring that the amount of the VRB to be awarded to an enlisted member who extended his enlistment be determined by reference to the award level in effect at the time he began to serve his extended enlistment, rather than at the time he agreed to the extension, are invalid as being contrary to Congress' purpose, as manifested by the legislative history, in enacting the VRB program as an inducement to selected service members to extend their period of service. Whether a service member reenlists or agrees to extend his enlistment, the VRB could only be effective as a selective incentive to extension of service if, at the time he made his decision, the service member could count on receiving it if he elected to remain in the service. Pp. 431 U. S. 869 -877.
(b) There is nothing in either the language or legislative history of the statute repealing the RRB and VRB system and establishing a new bonus system to show any intention on the part of Congress to affect the rights of those service members who had extended their enlistments and became entitled to receive VRB's. Pp. 431 U. S. 878 -882.
opinion, in which BURGER, C.J., and BLACKMUN and REHNQUIST, JJ., joined, post, p. 431 U. S. 882 .
From early in our history, Congress has provided by statute for payment of a reenlistment bonus to members of the Armed Services who reenlisted upon expiration of their term of service, or who agreed to extend their period of service before its expiration. [ Footnote 1 ] Prior to the enactment of Pub.L. No. 89-132, 79 Stat. 547 (1965), this bonus was determined for an enlistee's first reenlistment or extension of enlistment by multiplying his monthly pay at the time of expiration of the initial period
The perceived defect of this system was that "it failed to vary the monetary incentive for reenlistment according to the needs of the armed services for personnel with particular skills." 175 U.S.App.D.C. at 38, 533 F.2d at 1173. Consequently, Congress enacted former 37 U.S.C. § 308(g), which authorized the services to provide, in addition to the Regular Re-enlistment Bonus (RRB) just described, a Variable Re-enlistment Bonus (VRB) to members of the Armed Services whose particular skills were in short supply. The VRB was to be a multiple, no greater than four, of the RB. [ Footnote 2 ]
1969. [ Footnote 3 ] Shortly after his enlistment, Larionoff chose to participate in a Navy training program, completion of which would qualify him for the service rating "Communications Technician -- Maintenance" (CTM). At that time, as Larionoff was aware, [ Footnote 4 ] the CTM rating was classified by Navy regulations as a "critical military skill," whose holders were eligible upon reenlistment or extension of enlistment for payment of a VRB in the amount of four times the RRB, the highest allowable rate. Before entering the training program, which entailed a six-year service obligation, Larionoff entered a written agreement to extend his enlistment "in consideration of the pay, allowances, and benefits which will accrue to me during the continuance of my service." Larionoff successfully completed the program, and was advanced to the CTM rating, expecting to receive a VRB upon entering the period of his extended enlistment on June 23, 1973. [ Footnote 5 ]
While the Government's appeal of this order was pending in the Court of Appeals, Congress repealed the statutes authorizing both the RRB and the VRB, and substituted a new Selective Re-enlistment Bonus (SRB), effective June 1, 1974. Armed Forces Enlisted Personnel Bonus Revision Act of 1974, 88 Stat. 119, 37 U.S.C. § 308 (1970 ed., Supp. V). The Government concedes that this action had no effect on six of the named respondents; like Larionoff, they were scheduled to begin serving their extended enlistments prior to the effective date of the Act, and therefore should have received their VRB's, if at all, while the program was still in effect. [ Footnote 6 ] Respondent Johnnie S. Johnson, however, first enlisted in the Navy in August, 1970, and did not begin serving his extended enlistment until August, 1974. The Court of Appeals was thus confronted with two questions: (1) whether Larionoff and those in his position were entitled to receive VRB's despite the Navy's elimination of their rating from the eligible list in the period after their agreement to extend their enlistments but before they began serving those extensions; and (2) whether Johnson and others in his situation were entitled to receive VRB's despite the repeal of the VRB program in the same
Both the Government and respondents recognize that "[a] soldier's entitlement to pay is dependent upon statutory right," Bell v. United States, 366 U. S. 393 , 366 U. S. 401 (1961), and that, accordingly, the rights of the affected service members must be determined by reference to the statutes and regulations governing the VRB, rather than to ordinary contract principles. [ Footnote 7 ] In this case, the relevant statute, former 37 U.S.C. § 308(g), provided:
The regulations governing individual eligibility were set forth in Department of Defense Instruction 1304.15, Ś V.B.1 (Sept. 3, 1970). [ Footnote 8 ]
enlistment. This is a reasonable construction, since the statute requires that the VRB not be paid until that time. See n 5, supra. At that time, it is argued, respondents did not satisfy two related criteria prescribed by Ś V.B.1, although it is conceded they met the others. First, they were not then "serving . . . in a military specialty designated" as a critical military skill, Ś V.B.1.a, since the CTM rating was by that time no longer so designated; second, they had not "[a]ttain[ed] eligibility prior to the effective date of termination of awards" for the CTM rating. Ś V.B.1.f.
The Government also relies upon the regulations governing the amount of the award to be received. Under Department of Defense Directive 1304.14, Ś IV.F (Sept. 3, 1970):
"When a military skill is designated for reduction or termination of award an effective date for reduction or termination of awards shall be established and announced to the field at least 90 days in advance. All awards on or after that effective date in military skills designated for reduction of award level will be at the level effective that date and no new awards will be made on or after the effective date in military skills designated for termination of awards. [ Footnote 9 ]"
(Emphasis added.) Similarly, Department of Defense Instruction 1304.15, supra, Ś VI.A, stated:
"Members serving in a military specialty designated for reduction or termination of award under the provisions of subsection IV.F. of [Directive 1304.14, supra ] will receive the award level effective on the date of their reenlistment or extension of enlistment, except as provided in paragraph V.B.1.f. above. [ Footnote 10 ] "
Bowles v. Seminole Rock Co., 325 U. S. 410 , 325 U. S. 414 (1945). See also INS v. Stanisic, 395 U. S. 62 (1969). The Government represents, and respondents do not seriously dispute, that, throughout the period in which the VRB program was in effect, the Navy interpreted the Department of Defense regulations as entitling an enlisted member who extends his enlistment to the VRB level, if any, in effect at the time he began to serve the extended enlistment. [ Footnote 11 ] Since this interpretation
This, however, does not end our inquiry. For regulations, in order to be valid, must be consistent with the statute under which they are promulgated. [ Footnote 12 ] We are persuaded that, insofar as they required that the amount of the VRB to be awarded to a service member who extended his enlistment was to be determined by reference to the award level in effect at the time he began to serve the extension, rather than at the time he agreed to it, the relevant regulations were contrary to the manifest purposes of Congress in enacting the VRB program, and hence invalid. [ Footnote 13 ]
for the VRB were expected to save money in the long run, since payment of the higher reenlistment bonus would enable the Armed Forces to retain highly skilled individuals whose training had required a considerable investment. [ Footnote 14 ] Members of Congress in the floor debates clearly recognized the wisdom of offering such incentives. [ Footnote 15 ]
The VRB was thus intended to induce selected service members to extend their period of service beyond their original enlistment. Of course, the general pay raise for the military included in the same Act was also intended to have a similar effect, by making a military career generally more attractive. [ Footnote 16 ] But the VRB was expected to be a very specific sort of incentive, not only because it was aimed at a selected group of particularly desirable service members, but also because it offered an incentive "at just the time that it will be most effective, when an individual decides whether or not to reenlist." Remarks of Rep. Nedzi, 111 Cong.Rec. 1721 (1965). The then Secretary of Defense, Robert S. McNamara, made the same point to the House Armed Services Committee, in contrasting the VRB to "proficiency pay," which provides increased pay to service members with critical skills:
"We believe a more efficient way to provide additional reenlistment incentives to selected first-termers in especially high demand is by using a variable reenlistment bonus. Monetary rewards are thereby concentrated at the first reenlistment decision point, obtaining the greatest return per dollar spent on the retention of personnel. "
"At the end of his first term of reenlistment [ sic ], he is trying to make up his mind whether to stay in the military. And we think that the added bonus may push him over the line into staying with us, which is what we want to see happening."
Id. at 40. [ Footnote 17 ] It is true that, in discussing the VRB, Congress focused on the service member who reaches the end of his enlistment, and is faced with the decision "whether or not to reenlist. " (Emphasis added.) Remarks of Rep. Nedzi, supra. But, as Congress has recognized in providing that "[a] member of the [Armed Forces] who extends his enlistment . . . is entitled to the same pay and allowances as though he had reenlisted," 37 U.S.C. § 906, precisely the same reasoning applies to the decision to extend enlistment as to the decision to reenlist. In either case, the VRB could only be effective as a selective incentive to extension of service if at the time he made his
This is very apparent when the VRB program is examined from the perspective of an individual who is at the point of deciding whether or not to extend an enlistment due to expire at some future date. At the time he makes this decision, he is aware that his rating or expected rating is classified as a critical military skill eligible for a VRB at a particular level. Under the plan as envisioned by Congress, and as applied by the Navy in the case of reenlistments, the incentive operates "at just the time it will be most effective," because the service member knows that, if he remains in the service, he will receive a VRB at the prescribed level. But under the contested regulations, the service member has no such reassurance. Whether or not his rating is eligible for a VRB now, it may not be at the future date on which his first enlistment expires. [ Footnote 18 ] His "incentive" to extend his enlistment is the purely hypothetical possibility that he might receive a VRB if there is a personnel shortage in his skill on that date. On the other hand, if he nevertheless extends his enlistment, and if the VRB level for his rating is increased in the interval before his original term expires, he will receive a higher award than that which sufficed to induce his decision to remain in the service -- from the standpoint of Congress' purposes, a totally gratuitous award. [ Footnote 19 ]
The clear intention of Congress to enact a program that "concentrates monetary incentives at the first reenlistment decision point where the greatest returns per retention dollar can be expected," Senate Hearings 26 (statement of Asst. Secy. Paul), could only be effectuated if the enlisted member at the decision point had some certainty about the incentive being offered. Instead, the challenged regulations provided for a virtual lottery. [ Footnote 20 ] We therefore hold that, insofar as the Defense Department regulations required that the amount of the VRB to be paid to a service member who was otherwise eligible to receive one be determined by the award level as of the time he began to serve his extended enlistment, they are in clear conflict with the congressional intention in enacting the VRB program, and hence invalid. Because Congress intended to provide at the reenlistment decision point a promise of a reasonably certain and specific bonus for extending service in the Armed Forces, Larionoff and the members of his class are entitled, as the Court of Appeals held, to payment of VRB's determined according to the award levels in effect at the time they agreed to extend their enlistments.
This brings us to the further question of respondent Johnson's entitlement to a VRB. At the time he agreed to extend his enlistment, the VRB program was in effect, and his CTM rating was classified as a critical military skill. Before he began serving the extended enlistment period, however, Congress repealed the RRB and VRB system, and substituted the new SRB. 88 Stat. 119, 37 U.S.C. § 308 (1970 ed., Supp. V). The Government contends that, since the VRB had been abolished before Johnson became eligible to receive one, he is not entitled to receive a bonus. The Court of Appeals rejected this argument. [ Footnote 21 ]
extended their enlistments that a VRB award would be paid to them at the expiration of their original enlistment in return for their commitment to lengthen their period of service. [ Footnote 22 ] When Johnson made that commitment, by entering an agreement to extend his enlistment, he, like Larionoff, became entitled to receive at some future date a VRB at the award level then in effect (provided that he met the other eligibility criteria). Thus, unless Congress intended, in repealing the VRB program in 1974, to divest Johnson of the rights he had already earned, and constitutionally could do so, the prospective repeal of the program could not affect his right to receive a RB, even though the date on which the bonus was to be paid had not yet arrived.
whatever to service members who have become entitled to payment of a VRB by extending their enlistments. There is no prohibition of further payments of VRB's to those already entitled to them, [ Footnote 23 ] the Act simply replaces the old § 308 with a new one that authorizes SRB's, rather than RRB's and VRB's. Nor does the legislative history express any intention to effect such a prohibition. No paramount power of the Congress or important national interest justifying interference with contractual entitlements is invoked.
The Courts of Appeals that have upheld the Government's position have relied on two indications of a congressional intent to affect the rights of Johnson and his class. First, the 1974 Act expressly preserves the right of all service members on active duty as of the effective date of the Act to receive upon reenlistment the RRB's they would have been entitled to before passage of the Act. Pub L. No. 93-277, § 3, [ Footnote 24 ] 88
Second, reference is made to a portion of the Conference Report on the Act, indicating a congressional "understanding" that service members, like Johnson, who had already entered two-year extensions of enlistment could become eligible for an SRB by canceling the extension and replacing it with a four-year extension. H.R.Conf.Rep. No. 9985, pp. 5 (1974). [ Footnote 25 ] This, it is argued, indicates that Congress had
But see n 23, infra.
"B. Individual Eligibility for Receipt of Awards "
The reference is apparently to the last sentence of Ś VB.1.f, supra, n 8, which provided:
The Court of Appeals interpreted this provision as intended to prevent service members from qualifying for a soon-to-be-reduced benefit level by agreeing to extend their enlistments in the interval between the announcement of the reduction in award level and the effective date of the change, and hence an implicit recognition that, in the absence of such a provision, service members in that position would be entitled to the higher benefit level. 175 U.S.App.D.C. at 41-42, 533 F.2d at 1176-1177. The Government argues, however that the purpose of Ś V.B.1.f was to reach the much smaller group of service members who would be in a position both to agree to extend their enlistment and to begin serving the extension within the relevant period. Tr. of Oral Arg. 15-16.
Manhattan General Equip. Co. v. Commissioner, 297 U. S. 129 , 297 U. S. 134 (1936). See, e.g., Ernst & Ernst v. Hochfelder, 425 U. S. 185 , 425 U. S. 213 -214 (1976); Dixon v. United States, 381 U. S. 68 , 381 U. S. 74 (1965)
Indeed, as the Court of Appeals pointed out, 175 U.S.App.D.C. at 43-44, n. 32, 533 F.2d at 1178-1179, n. 32, because the regulations governing the VRB program required the various services to undertake an annual review of the military specialties in which personnel shortages existed for the purpose of adjusting VRB award levels, Department of Defense Directive 1304.14, Ś IV.F.1, the service member, by his very decision to extend his enlistment, would contribute to the likelihood that, by the time his initial enlistment expired, his skill would no longer be in short supply, and the VRB he had expected would therefore have been reduced or eliminated.
Of course, the enlisted service member agreeing to extend his enlistment could not have been entirely certain of the amount of his future VRB. First, the VRB was calculated according to a formula based on the amount of the RRB, which, in turn, depended on the reenlistee's basic pay upon entering the reenlistment period. At the time he agreed to extend his enlistment, the service member could not have been sure what that amount would be; Congress could alter military pay scales, or the member might be promoted or demoted, and hence his pay might change, in the interval. Second, the VRB, by both statute and regulation, was not actually paid until the service member began serving his extended enlistment, and even then was ordinarily paid in yearly installments. If for some reason the enlistee did not complete service of his extension, remaining installments were not paid, and overpayments were recouped. Department of Defense Directive 1304.14, Ś IV.G. Finally, receipt of any VRB at all depended on the service member's completing the requirements for eligibility before expiration of the original enlistment. See Department of Defense Instruction 1304.15, Ś V.B.1, n. 8. Thus, the VRB as applied to service members extending their enlistments, as opposed to those reenlisting, was always somewhat contingent. But there is a significant difference between this sort of contingency, which was inherent in the nature of the program and in any event involved marginal effects on the amount of the award or the occurrence of rather speculative events, and the sort of uncertainty the contested regulations inject into the program, which rendered the primary determinant of the VRB entirely unpredictable at the time the decision to extend enlistment was made.
" Clarification of interpretation of bill language "