Opinion ID: 668556
Heading Depth: 2
Heading Rank: 2

Heading: The Back Pay Act

Text: 19 Ward contends that such a waiver of sovereign immunity for back pay claims against the United States is found in the Back Pay Act of 1966, 5 U.S.C. Sec. 5596 (1988). That Act provides a federal government employee is entitled to back pay if found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee. See id. Sec. 5596(b)(1). The Supreme Court reads the Back Pay Act as a statute that mandates compensation by the federal government in a successful suit against the government. See Bowen, 487 U.S. at 905 n. 42, 108 S.Ct. at 2738 n. 42. The Back Pay Act is the means by which appointed employees subjected to unjustified personnel action are given a cause of action against the United States. United States v. Hopkins, 427 U.S. 123, 128, 96 S.Ct. 2508, 2511, 49 L.Ed.2d 361 (1976). Such a cause of action is limited by the terms of the Back Pay Act to employees who have been unlawfully subjected to a reduction in their duly appointed emoluments or position. United States v. Testan, 424 U.S. 392, 407, 96 S.Ct. 948, 957, 47 L.Ed.2d 114 (1976). 20 We read these binding cases as interpreting the Back Pay Act to provide an explicit waiver of sovereign immunity in cases covered by that Act. Accord Brown v. Secretary of Army, 918 F.2d 214, 216 (D.C.Cir.1990) (Back Pay Act waives sovereign immunity against prejudgment interest on Title VII back pay awards). But see Mitchell v. United States, 930 F.2d 893, 896 n. 3, 897 (Fed.Cir.1991) (Service member's suit for back pay falls within claims court's Tucker Act jurisdiction and does not lie in district court). 21 We think Ward's claim for back pay falls within the terms of the Back Pay Act. He has alleged that a federal government agency, the VA, has subjected him to a personnel action that has resulted in the withdrawal of his pay. If the agency action is determined to have been unwarranted, then Ward will be entitled to back pay and the Back Pay Act provides him the necessary consent to enforce this right in federal district court. II Merits 22 Having resolved the jurisdictional issue, we pass to the merits. Appellants challenge several aspects of the district court's decision. Before discussing them, we look for a moment at the scope of our review. On appeal from a district court's review of an APA claim, an appellate court accords no deference to the lower court's decision, see Hanson v. Espy, 8 F.3d 469, 472 (7th Cir.1993); Sierra Club v. Davies, 955 F.2d 1188, 1192 (8th Cir.1992), but instead conducts de novo review of the administrative record and renders its own independent judgment. The APA permits us to set aside the agency action only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. Sec. 706(2)(A). Although narrow, appellate review of an administrative record must nonetheless be careful, thorough and probing. See Blassingame v. Secretary of Navy, 866 F.2d 556, 559 (2d Cir.1989). A. The Penalty 23 Analysis of the merits begins with the penalty of discharge recommended by the Board and adopted on appeal by the Secretary. At the time of the disciplinary proceeding against Ward, the Board was required by statute to recommend a penalty within the limitations prescribed by the Secretary. These penalties range from the lightest, a reprimand, move up to suspension and reduction of pay, and go to the heaviest penalty, discharge from employment. See 38 U.S.C. Sec. 4110(d). The regulations prescribed by the Secretary are found in the VA Manual and its Department of Medicine and Surgery Supplements. 24 The VA Manual governs disciplinary action taken against certain full-time Department employees, including registered nurses like Ward. See VA Manual, MP-5, Pt. II, ch. 8, sec. C-1. It mandates that once the Board has sustained a charge against an employee, it must recommend a penalty appropriate to the offense, and that in all cases where a penalty is recommended, the principle of like penalties for like offenses will apply. Id. sec. C-5(a). Discharge is a penalty that may be appropriately imposed in cases of patient abuse. See id. Department Supp., fig. 8A.01. Yet, there is no evidence in the administrative record before us that the Board considered--much less applied--the policy of like penalties for like offenses. 25 With regard to the penalty chosen, the Board considered the so-called Douglas Factors, enumerated by the Merit Systems Protection Board as relevant for consideration in determining the appropriateness of a penalty. Curtis Douglas, 5 M.S.P.B. 313, 5 M.S.P.R. 280, 304-06 (1981). The Board's decision merely states, 26 The Disciplinary Board considered several issues as cited in the Douglas Factors ... in reaching its recommendation as to what administrative action is indicated. Specifically, the Disciplinary Board determined that the Douglas Factors # 1, # 2, # 7, and # 11, were applicable to this case. The Disciplinary Board recommends that William Ward, R.N. be discharged from the Department of Veterans Affairs. 27 The Board did not find Douglas Factor # 6--consistency of the penalty with those imposed upon other employees for the same or similar offenses--to be applicable. Id. at 305. More importantly, the Board when selecting the penalty failed to refer to the VA Manual instructions given it, including the like penalties for like offenses policy. It was arbitrary and capricious for the Board not to consider the Secretary's regulations, as prescribed under 38 U.S.C. Sec. 4110(d), when arriving at a penalty to mete out to a Department employee. 28 On appeal from the Board's decision, the Secretary had authority to reject or modify the penalty recommended by the Board. See id. In Ward's letter of appeal he averred that the Board's proposed penalty was inconsistent with the penalties imposed on other Department employees against whom a charge of patient abuse had been sustained, referring to the ALJ's opinion, which was before the Secretary. Although Ward's letter did not specifically cite the VA Manual, its discussion of disparate application of penalties was sufficient to alert the Secretary to the Board's error. Further, plaintiff's neglect in citing the VA Manual is quite understandable in view of the Board's failure to provide him with a copy of its regulations. Had the Secretary considered the issue, it could have rendered harmless the Board's failure to address the policy of like penalties for like offenses in deciding on the disciplinary action to be taken against Ward. 29 After careful review of the administrative record, we see nothing to suggest the Secretary addressed the Board's error. The Option Paper prepared and submitted to the Secretary by his legal staff characterized Ward's claim only as a challenge to the Board's application of the Douglas factors, concluding that the Board was not required to consider the Douglas factors, and that in any event mitigation of the proposed penalty was not warranted. There is no reference in the Option Paper to the VA policies, found in Pt. II, ch. 8, sec. C of the VA Manual, concerning disciplinary actions against full-time Department nurses. Instead, the Option Paper only refers to a Department Supplement to Part I of the VA Manual, the scope of which explicitly excludes nurses covered by the provisions of Part II. See VA Manual, MP-5, Pt. I, ch. 752, Change 2, p 1(a) (Sept. 16, 1974). Further, the Secretary's letter to Ward in response to Ward's letter of appeal simply points out that the Secretary was sustaining the Chief Medical Director's decision, who in turn had adopted the findings and recommendation of the Board. 30 In our view the Secretary's acceptance of the proposed penalty of discharge was arbitrary and capricious because at no time during the administrative process was the Secretary's own policy of like penalties for like offenses, promulgated under authority of 38 U.S.C. Sec. 7462(d), ever addressed. Government agencies must take great care to follow their own rules and regulations. See Blassingame, 866 F.2d at 560. Here, the agency's failure to follow or consider the regulations promulgated by the Secretary under Sec. 7462 violated the APA. We therefore agree with the district court's conclusion, although for slightly different reasons, that the Secretary's decision regarding the penalty must be vacated as arbitrary and capricious. 31 In reaching this result, we reject appellants' argument that the Secretary was not required to consider the penalties imposed upon other Department employees because evidence of such other disciplinary actions was not before the Board. The policy of like penalties for like offenses is one the Board was required to consider before recommending a penalty. See 38 U.S.C. Sec. 4110(d); VA Manual, MP-5, Pt. II, ch. 8, sec. C-1. Since the Board failed to consider this policy when imposing in this case its heaviest penalty, it was incumbent on the Secretary to do so, in order to ensure that its decision--which is the final decision in such a proceeding--was made in accordance with VA rules and regulations. The Secretary may not justify his failure to provide Ward with meaningful review by relying on the fact that Ward did not bring to the Board's attention records that the Board itself had a duty to consider. B. The Remand 32 We turn finally to the remand issue. The Supreme Court has cautioned that when an agency has not considered all relevant factors in taking action, or has provided an insufficient explanation for its action, the appropriate course for a reviewing court ordinarily is to remand the case to the agency. See Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 1607, 84 L.Ed.2d 643 (1985). We therefore modify the district court's order to the extent that it undertook to determine whether Ward's discharge was consistent with the VA policy of like penalties for like offenses. On remand the Secretary shall himself determine whether discharging Ward would be consistent with the penalties imposed upon other Department employees, or the Secretary may send the case back to the Board for a determination of this issue. The Secretary shall also determine whether the policy of like penalties for like offenses is meant to be applied on a facility-by-facility basis, or on a system-wide basis. It may well be that depriving Ward of his employment was motivated by extraneous factors, a matter the administrative decision-maker should determine. In either case, the burden is on the agency to show that the action taken is in compliance with the statutes and regulations applicable to the VA. See Blassingame, 866 F.2d at 560; Camp v. Pitts, 411 U.S. 138, 143, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973) (per curiam ). We do nothing to interfere with the district court's retention of this case after the administrative process has run its course.