Opinion ID: 211886
Heading Depth: 4
Heading Rank: 5

Heading: a furlough of 30 days or less

Text: 35 . . . . 36 5 U.S.C. § 7521 (2000). 37 In In re Doyle, 29 M.S.P.R. 170 (1985), the Board interpreted an earlier but substantively similar version of section 7521 to protect ALJs from more than actual separation from employment. In interpreting removal under the statute, the Board concluded that an ALJ could bring a claim for removal under section 7521 even though the offending conduct was less than physical separation from federal employment. The Board based its decision on the history and remedial purpose of the APA. 29 M.S.P.R. at 174-75. The Board held that `removal' has consistently been interpreted as protecting an administrative law judge from actions of his employing agency that could impair his qualified judicial independence. Id. at 174. The Board subsequently codified the holding of Doyle pursuant to notice and comment rulemaking at 5 C.F.R. § 1201.142. Merit Systems Protection Board Practices and Procedures, 62 Fed.Reg. 48449, 48455 (Sept. 16, 1997) (interim rule, request for comments); Merit Systems Protection Board Practices and Procedures, 63 Fed. Reg. 42685 (Aug. 11, 1998) (final rule). 38 The Board applied this standard in two subsequent cases that were appealed to this court. First, in Sannier v. Merit Systems Protection Board, 931 F.2d 856 (Fed. Cir.1991), a group of ALJs from the Social Security Administration challenged various management practices allegedly intended to promote productivity at the Lansing, Michigan Office of Hearings and Appeals. Because the practices complained of involved, inter alia, refusing to replace ALJs at the particular office until productivity increased and asking ALJs to transfer out of that office so it could be closed, we held that the Board properly determined that it did not have jurisdiction over the action. In reaching this decision, we quoted the Board's standard set forth in Doyle. Agreeing with the Board's standard, we said, Well-pleaded allegations tying the agency actions to impairment of their decisionmaking independence are, at minimum, necessary to establish prima facie Board jurisdiction. Id. at 858. Further, in rejecting the ALJs' claim that they had pled sufficient facts to warrant Board jurisdiction whether or not they would ultimately prevail, this court applied the Doyle standard. We said that even assum[ing] arguendo that the agency explicitly instituted overall targets or goals for the number of appeals to be adjudicated per month, such production targets simply are not, by themselves, probative that the ALJ's impartiality or independence in a particular appeal has been or would be compromised. Id. at 859. 39 In Stephens v. Merit Systems Protection Board, 986 F.2d 493 (Fed.Cir.1993), Stephens argued that the Department of Health and Human Services' requirement that Stephens attend a specially designed course of instruction resulted in a constructive removal under section 7521. We again affirmed the Board's dismissal of this claim for lack of jurisdiction. In reaching that conclusion, we noted that section 7521 was specifically limited to removals, suspensions, reductions in grade, reductions in pay and furloughs of 30 days or less. Id. at 496. Nevertheless, citing Sannier, we said that [t]his court has determined . . . that constructive removals are also covered by that section. Id. In setting forth the standard, we quoted Sannier 's quotation of Doyle recognizing a constructive removal where an agency's actions interfere with an ALJ's qualified independence. Id. As in Sannier, the court in Stephens rejected Stephens's argument that he was entitled to a hearing on jurisdiction because even accepting all of petitioner's factual allegations as true, the Board still does not have jurisdiction because the program and instructional course do not impair petitioner's decisional independence. Id. at 497. 40 The petitioners argue that the Board erred in holding that it does not have jurisdiction to hear a claim for constructive removal under section 7521 by a person not actually separated from the position of ALJ because that holding is inconsistent with the decisions of this court in Sannier and Stephens. In particular, the petitioners assert that the Board is not free to reject or overrule this court's interpretation of section 7521 applied in both Sannier and Stephens. The Board raises two arguments in response. First, the Board argues that because both Sannier and Stephens affirmed the Board's holdings that it lacked jurisdiction, the Board's later adoption of an additional requirement for jurisdiction — actual separation from employment as an ALJ — does not conflict with those decisions. Second, the Board argues that our review in both Sannier and Stephens was deferential in nature and was not a de novo interpretation of section 7521. According to the Board, this court was merely holding that the Board's interpretation was a reasonable one, applying Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Thus, the Board contends it is free to reconsider its interpretation of the statute. 1 41 We first address the Board's argument that its adoption of an additional requirement does not conflict with our prior decisions in Sannier and Stephens. The Board, citing Watson v. Department of the Navy, 262 F.3d 1292 (Fed.Cir.2001), argues that our holdings in Sannier and Stephens merely recognized that the facts of those cases did not constitute removal under section 7521. According to the Board, its holding that a removal requires actual separation from employment was not in conflict with those decisions. 42 Watson does not support the Board's argument. Watson involved a determination as to whether certain personnel met the statutory and regulatory criteria for early retirement coverage as law enforcement officers. 262 F.3d at 1295. In considering the petitioners' claims, the Merit Systems Protection Board employed a new approach that more affirmatively considered the reasons for the creation and existence of the positions than it had used in its prior LEO decisions. Id. The petitioners argued that the new approach was inconsistent with the factors employed in this court's prior decision in Bingaman v. Department of the Treasury, 127 F.3d 1431 (Fed.Cir.1997). In rejecting that contention, we said: 43 In examining the duties performed by these petitioners, the Bingaman court only addressed prongs (ii) and (iii) of 5 C.F.R. §§ 831.902, 842.802. The court did not need to consider prong (i) of the test — examining the basic reasons for the existence of the position — because the court found that the petitioners had failed to meet their burden of proof regarding the second and third prongs of 5 C.F.R. §§ 831.902, 842.802. 44 Watson, 262 F.3d at 1301-02 (citation omitted). Thus, there was nothing in the Board's Watson decision that was inconsistent with this court's analysis in Bingaman. 45 Moreover, the Board's argument implies that the statement of the standard applied in the Sannier and Stephens cases is dictum and need not be followed. The Supreme Court, however, has rejected such a proposition. In Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996), the Supreme Court considered whether to adhere to the rationale expressed in a line of cases that admittedly did not involve the precise factual issue presented in the pending case. In applying the rationale of that line of cases, the Court said, 46 We adhere in this case, however, not to mere obiter dicta, but rather to the well-established rationale upon which the Court based the results of its earlier decisions. When an opinion issues for the Court, it is not only the result but also those portions of the opinion necessary to that result by which we are bound. 47 Id. at 66-67, 116 S.Ct. 1114. 48 Our decisions in Sannier and Stephens adopted and applied the Board's Doyle standard. In Sannier, we said that removal under section 7521 encompasses cumulative administrative action or active intervention that prevents the impartial exercise of judicial function and that has a pernicious effect on qualified judicial independence. 931 F.2d at 858 (quoting Doyle, 29 M.S.P.R. at 175). We affirmed the Board's application of the Doyle rationale in rejecting the ALJs' assertions that personnel policies designed to increase productivity constituted constructive removal, concluding that such policies did not interfere with an ALJ's independence or impartiality. Id. at 858-59. Subsequently, in Stephens, we again employed the standard expressed in Sannier to reject Stephens's assertion that a mandatory course of instruction amounted to constructive removal. We stated specifically, in referring to Sannier, This court has determined, however, that constructive removals are also covered by that section. 986 F.2d at 496. The Board is not free to reject the rationale employed in reaching those decisions as dictum. 49 In its opinion in Tunik, the Board concluded that this court in Sannier merely recognized the Doyle theory of jurisdiction. Tunik, 93 M.S.P.R. at 491. The Board said that this court did not create the concept or necessarily endorse it. Id. Such a position is difficult to reconcile with the language of Sannier and is impossible to reconcile with Stephens, which the Board did not even mention. This court both found the Board's interpretation of section 7521 in Doyle to be reasonable and affirmed the Board's application of the standard derived from its interpretation in deciding the Sannier and Stephens cases. 50 We next address the Board's contention that it was free to reconsider its earlier decision in Doyle, notwithstanding our decisions in Sannier and Stephens. This entails our consideration of the deference due the Board's interpretation of section 7521 and the extent to which any such deference was employed in our decisions in Sannier and Stephens. As to the former, the parties dispute whether the Board is entitled to any deference in its interpretation of section 7521. The Board, citing 5 U.S.C. § 1305, argues that it is charged with administering section 7521 and that its interpretation is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In United States v. Mead Corp., the Supreme Court recognized a very good indicator of delegation meriting Chevron treatment in express congressional authorizations to engage in the process of rulemaking or adjudication that produces regulations or rulings for which deference is claimed. 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Section 1305 provides exactly that for the Board regarding section 7521. Section 1305 states that for the purpose of section 7521 of this title, the Merit Systems Protection Board may investigate, prescribe regulations, appoint advisory committees as necessary, recommend legislation, subpena [sic] witnesses and records, and pay witness fees as established for the courts of the United States. 5 U.S.C. § 1305 (2000). Further, section 7521 authorizes the Board to adjudicate whether an agency has established good cause for disciplinary action against an ALJ. Id. § 7521 (An action may be taken against an administrative law judge . . . only for good cause established and determined by the Merit Systems Protection Board on the record after opportunity for hearing before the Board.). Both Sannier and Stephens involved such adjudications. The Board has been charged with administering section 7521 through both rulemaking and adjudication and is entitled to Chevron deference in these activities. 51 In Chevron, the Supreme Court established a two-part test for evaluating an agency interpretation of a statute. First, [i]f the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. However, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. Thus, in determining the extent of deference given to the Board in Sannier and Stephens, the inquiry boils down to which portion of the Chevron analysis was applied. 52 Although not expressly framed under either prong of Chevron, the analysis in Sannier falls into the latter category. The analysis in Sannier begins by quoting section 7521 but acknowledges, Petitioners do not, and cannot, contend under these facts that they were subjected to any of the enumerated adverse personnel actions listed in subsection (b). 931 F.2d at 858. After observing that the petitioners based their claim solely on constructive removal, the court said, Although a `constructive' removal is not specifically enumerated in subsection (b), the Board, as well as this court, has recognized that certain acts may be the equivalent, for purposes of Board jurisdiction, of formal removal. Id. This court's initial observation that the petitioners' claim ventured outside the literal language of the statute is an express acknowledgement that Congress has not unambiguously expressed its intent on the issue of constructive removal. Where the statute is silent or ambiguous with respect to a particular issue, this court must consider whether the agency's interpretation is permissible. Chevron, 467 U.S. at 843, 104 S.Ct. 2778. 53 The analysis in Sannier continues by stating that the Board recognizes the possibility that an ALJ may be constructively removed by `cumulative administrative actions or active intervention . . . [which] prevent the impartial exercise of his judicial functions . . . [and which have] a pernicious effect on the complaining judge's qualified independence.' Sannier, 931 F.2d at 858 (quoting Doyle, 29 M.S.P.R. at 175) (alterations in original). This court then said, 54 We agree with the Board that even if [it] were to assume that the ALJs have suffered, among other things, staffing shortages, transfer restrictions and reduced service areas due to management's perception that the Lansing ALJs production rate was low, they have not alleged in any of the many papers submitted that these actions of management have interfered with their impartial decisionmaking ability. 55 Id. (quoting In re Sannier, 45 M.S.P.R. 420, 426 (1990)) (alteration in original). It is difficult to view the analysis in Sannier as anything other than deferential to the Board's interpretation of section 7521 as a permissible gap-filling in a specific area to which the statute fails to speak. See Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778 (noting that Congress may implicitly delegate authority to an agency to fill in gaps where there is not an explicit gap in the statute). 56 Because the Board's interpretation of section 7521 was reasonable, the Board's interpretation as set forth in Doyle and reiterated in Sannier was properly the law. See Mead Corp., 533 U.S. at 229, 121 S.Ct. 2164 (noting that it may be apparent that Congress conferred authority on an agency to speak with the force of law even over issues about which Congress had no intent). When this court again considered the Board's application of section 7521, we applied the Board's constructive removal standard as the governing law. In Stephens, the court again noted that section 7521 is specifically limited to removals, suspensions, reductions in grade, reductions in pay and furloughs of 30 days or less. 986 F.2d at 496. Citing Sannier, we said that [t]his court has determined, however, that constructive removals are also covered by that section. Id. Thus, this court again acknowledged that constructive removal was outside the clear language of the statute and, by implication, the clear intent of Congress. Although it is possible to read that statement in Stephens as concluding that section 7521 expressly covers constructive removal — i.e., that Congress's intent on this point is clear — as discussed supra, Sannier held that the statute was silent on this point. Even Stephens acknowledged that the constructive removal doctrine exceeds the plain language of the statute. The better reading of Stephens, then, is that it was merely acknowledging that Sannier 's determination that the Board's interpretation was permissible was sufficient to make the Board's interpretation the governing law. Thus, Stephens also indicates that this court applied the second prong of Chevron to the Board's interpretation of section 7521. 57 The conclusion that Sannier and Stephens reflect appropriate deference to the Board brings us to the question of whether the Board is free to reconsider its interpretation of section 7521, despite Sannier and Stephens. The Board relies on Bankers Trust New York Corp. v. United States, 225 F.3d 1368, 1376 (Fed.Cir.2000). In Bankers Trust, this court concluded that the Court of Federal Claims erred in holding that an Internal Revenue Service regulation trumped a prior conflicting decision of the Court of Claims. Id. at 1376. In holding that the agency was not free to overturn the decision of its reviewing court by regulation, we distinguished the Ninth Circuit's decision in Mesa Verde Construction Co. v. Northern California District Council of Laborers, 861 F.2d 1124 (9th Cir.1988) (en banc). In Mesa Verde, the Ninth Circuit held that where a prior panel of the court had applied an agency's interpretation of a statute after concluding that the agency's interpretation was reasonable, a later panel of the court was free to accord deference to a new agency interpretation without en banc review, even if it conflicted with the interpretation applied in the earlier panel decision. Id. at 1134-36. In Bankers Trust, we said, This is not a case like Mesa Verde, in which the original decision was itself based on deference to the agency; under such circumstances, we might well consider the agency's change of heart as a significant factor. 225 F.3d at 1376. Because we have concluded that Sannier and Stephens were based on deference to the Board's interpretation of section 7521, this court must now confront directly the question presented in Mesa Verde. 58 We agree with Mesa Verde that where an earlier panel decision on statutory construction was based on deference to an agency interpretation, a later panel of this court is free to consider whether a new agency interpretation is reasonable without en banc reconsideration of the earlier panel decision. In this circuit, like the Ninth Circuit, panels of the court are bound by prior panel decisions. Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed.Cir.1988). Although that rule could be construed to preclude giving deference to a new agency interpretation even where our prior decision was based on deference, we think that the better view is that a panel should be free to consider whether the new interpretation is permissible in keeping with our role as a reviewing court under the Chevron framework. See Chevron, 467 U.S. at 863-64, 104 S.Ct. 2778 (An initial agency interpretation is not instantly carved in stone. On the contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.). Quoting Chevron, in Rust v. Sullivan, the Supreme Court said, This Court has rejected the argument that an agency's interpretation `is not entitled to deference because it represents a sharp break with prior interpretations' of the statute in question. 500 U.S. 173, 186, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991) (quoting Chevron, 467 U.S. at 862, 104 S.Ct. 2778). Where an agency's new interpretation is entitled to deference, a reviewing court should not substitute its judgment for that of the agency unless the agency's judgment is unreasonable. Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778 (stating that where Congress has left a gap in a statutory scheme, even implicitly, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency). Thus, we think the better view, as the Ninth Circuit held in Mesa Verde, is that a later panel of this court must be free to consider whether an agency's new interpretation of a statute that it is charged with administering is reasonable without being bound by a deferential interpretation applied in a prior panel decision. 59 We also agree with the Board that Watson provides some support for this rule in that this court noted in Watson that its prior decision in Bingaman was deferential. However, as noted supra, the question was not squarely presented in Watson because the standard employed in Watson was entirely consistent with the rationale of Bingaman. Watson, 262 F.3d at 1301-02. Thus, we conclude that the Board was not bound to interpret section 7521 in the same manner it was interpreted in Sannier and Stephens. 60 This leads us next to the question of whether the Board's new interpretation of section 7521 is permissible. Chevron, 467 U.S. at 843, 104 S.Ct. 2778; Mesa Verde, 861 F.2d at 1130-31. The Board justified its new interpretation on multiple grounds. Some of the Board's proffered justifications for adopting its new standard have been rejected supra, and there is no need to repeat them here. Because we conclude that the Board's interpretation of the plain language of section 7521 is reasonable based on the policy arguments it has advanced, we will focus on those arguments. The Board, in its Tunik decision, stated that 61 if constructive removal means what the Board interpreted it to mean in Doyle, then an agency would have to first seek the Board's permission, with the opportunity for a full evidentiary hearing, every time it wants to take actions like the ones at issue here, which involve such things as case processing matters and training requirements. 62 . . . We cannot believe that this sort of micromanagement, and the likely slowdown in the agency's work that it would cause, is what Congress intended when it used the word removal in 5 U.S.C. § 7521. Instead, the plain language of the statute shows that Congress intended to protect individuals from losing their positions as ALJs by requiring agencies to obtain the Board's permission before separating persons from ALJ positions. This gives ALJs greater protection than employees covered under section 7512 because an appeal from a section 7512 action may be brought only after the action has been taken. The additional protection afforded by section 7521 sufficiently safeguards the qualified judicial independence of an ALJ. 63 Tunik, 93 M.S.P.R. at 492. 64 We agree with the Board that the plain language of section 7521 reasonably can be read to apply only to cases of actual separation from employment as an ALJ. As noted supra, both Sannier and Stephens recognized that the constructive removal doctrine went beyond the plain language of the statute. If anything, the more natural reading of section 7521 would preclude the constructive removal doctrine entirely. The Board's earlier contrary opinion in Doyle relied in part on the Court of Claims' decision in Benton v. United States, 203 Ct.Cl. 263, 488 F.2d 1017 (1973). Doyle, 29 M.S.P.R. at 174-75. In Benton, the Court of Claims held that subjecting a hearing examiner to involuntary retirement under the Civil Service Retirement Act constituted removal under section 11 of the APA. In its analysis, the court said, We reach our conclusion in recognition of the fact that the APA was a sweeping piece of remedial legislation which was a long time in coming. For that reason, we think it should be given a broad and generous interpretation in light of the objectives sought to be accomplished. 488 F.2d at 1022. Benton, however, recognized that removal relates to an actual separation from employment and merely extended such removals to circumstances in which the reason for such separation was not disciplinary in nature. Id. at 1020-21. Similarly, this court's decision in Sannier cited Schultz v. United States Navy, 810 F.2d 1133 (Fed.Cir.1987), as supporting a broad understanding of removal. However, Schultz held only that a voluntary resignation based on agency coercion constituted an adverse action. Id. at 1137. Thus, no decision of this court has construed section 7521 to cover anything other than actual separation from employment as an ALJ, except in the deferential context of Sannier and Stephens. 65 The ALJs argue that the APA was designed to secure decisional independence of administrative judges. Similarly, the ALJs argue that the legislative history of the APA indicates the importance of decisional independence to Congress. Although the ALJs are correct that the APA was concerned with effecting independence for ALJs, neither the APA itself nor the legislative history behind it indicates that Congress intended to extend section 7521 to cover anything less than actual separation from employment as an ALJ. There were some who expressed such views. However, the history of the APA does not show that those views reflected the intent of Congress in enacting the APA. See Ramspeck v. Fed. Trial Exam'rs Conference, 345 U.S. 128, 131-33, 73 S.Ct. 570, 97 L.Ed. 872 (1953) (The position of hearing examiners is not a constitutionally protected position. It is a creature of congressional enactment. . . . They hold their posts by such tenure as Congress sees fit to give them.); see also S.Rep. No. 79-752, at 30 (1945) (On those subjects, such as the separation of examiners from the agencies they serve, there has been a wide divergence of views. The committee has in such cases taken the course which it believes will suffice without being excessive.). We cannot agree with the ALJs that the term removal in section 7521 must be construed to encompass constructive removal. 66 The ALJs additionally argue that in view of 5 U.S.C. § 3105, section 7521 must be construed broadly to include constructive removal. Section 3105 provides that [a]dministrative law judges . . . may not perform duties inconsistent with their duties and responsibilities as administrative law judges. 5 U.S.C. § 3105 (2000). Based on section 3105, the ALJs argue that removal in section 7521 must include anything that causes ALJs to perform duties that are inconsistent with their duties and responsibilities as ALJs. In particular, the ALJs argue that interference with their decisional independence causes them to perform their duties in an unfair manner, which is inconsistent with their duties as ALJs. It is unclear, however, how an agency's interference with an ALJ's decisional independence causes an ALJ to perform a duty that is inconsistent with the ALJ's duties and responsibilities as an ALJ. The ALJs are not arguing that they are being required to perform duties other than the adjudication of cases. Instead, they are complaining about the manner of performance of that duty. Section 3105 does not speak to this issue. Even if the ALJs were correct, there is no plausible reason to engraft such a contorted interpretation of section 3105 onto section 7521. We thus conclude that the Board's interpretation of section 7521 to require actual physical separation from employment as an ALJ is not unreasonable. 67 The remaining arguments of the ALJs have been considered but are not persuasive. We thus conclude that the Board's new interpretation of section 7521 is reasonable and that our decisions in Sannier and Stephens do not preclude the Board from adopting such a new interpretation.