Court Opinion

ID: 9438746
Source: CourtListenerOpinion
Date Created: 2023-08-03 06:00:30.553458+00
Date Added: 2024-06-11T17:27:30.932828
License: Public Domain

UNITED STATES OF AMERICA
                       MERIT SYSTEMS PROTECTION BOARD
                                      2023 MSPB 22
                            Docket No. CB-7521-18-0009-T-1

                     Department of Health and Human Services,
                                        Petitioner,
                                             v.
                                     Pere J. Jarboe,
                                       Respondent.
                                      August 2, 2023

           Pere J. Jarboe, Annapolis, Maryland, pro se.

           Elizabeth Mary Hady, Esquire, and Jacqueline Zydeck, Esquire, Chicago,
             Illinois, for the petitioner.

                                         BEFORE

                              Cathy A. Harris, Vice Chairman
                               Raymond A. Limon, Member

                                 OPINION AND ORDER

¶1        The respondent has filed a petition for review of the initial decision,
     which found good cause for his removal under 5 U.S.C. § 7521. For the reasons
     set forth below, we DENY the respondent’s petition and AFFIRM the initial
     decision as MODIFIED to (1) address the respondent’s argument regarding the
     authority of his employing agency to bring this complaint before the Board,
     (2) address the respondent’s additional argument regarding the potential
     disqualification of the presiding administrative law judge (ALJ), and (3) clarify
     that the agency has discretion to take any action consistent with the Board’s good
     cause determination.
                                                                                           2

                                        BACKGROUND
¶2         The agency has employed the respondent as an ALJ since 2006.
     Complaint File (CF), Tab 1 at 78-79. He served most recently as a supervisory
     ALJ. Id. at 81. In January 2018, the agency filed a complaint with the Board
     seeking to remove the respondent for his alleged failure to properly adjudicate
     Medicare appeals, supervise his staff, and follow supervisory instructions.
     Id. at 3.    Regarding the respondent’s adjudication of Medicare appeals, the
     agency specified that the respondent had failed to properly conduct hearings and
     failed to produce legally sufficient and comprehensible decisions on more than 30
     occasions and that he engaged in improper ex parte communications with a party.
     Id. at 7. Regarding the respondent’s supervision of staff, the agency specified
     that the respondent failed to assign sufficient work to two employees under his
     supervision,    failed   to   cooperate   with   management’s    efforts   to   address
     performance issues, and failed to alter an employee’s performance standards to
     accurately reflect the agency’s expectations for her performance. Id. at 20. As to
     the respondent’s alleged failure to follow instructions, the agency specified that
     the respondent failed to follow instructions to provide a plan for managing a
     subordinate employee’s work and that he failed to provide information during
     an interview regarding his assignment of work to the same subordinate employee.
     Id. at 30.
¶3         After holding a hearing on the agency’s complaint, the Board’s presiding
     ALJ issued an initial decision finding good cause for the respondent’s removal.
     CF, Tab 164, Initial Decision (ID). Specifically, he found that the agency proved
     three of its five specifications of failure to properly adjudicate Medicare appeals
     and both specifications of failure to follow instructions , but that it failed to prove
     any specifications of failure to properly supervise staff.             ID at 17-74.
     The presiding ALJ further found that the respondent failed to prove any of
     his affirmative defenses. ID at 74-80. Then, after analyzing the relevant Douglas
     factors and other considerations, the presiding ALJ determined that good cause
                                                                                       3

     existed to remove the respondent. ID at 80-93. Notably, in his initial summary
     of the decision, the presiding ALJ further stated that the respondent “is removed
     from his position as an ALJ.” ID at 4.
¶4        The respondent has filed a petition for review of the initial decision.
     Petition for Review (PFR) File, Tab 3.     He argues that the entity that sought
     his removal before the Board lacked delegated authority to do so.         Id. at 4.
     The respondent further argues that the presiding ALJ improperly considered
     certain records in violation of the Privacy Act.     Id.   He also argues that the
     presiding ALJ should have recused himself due to a conflict of interest and that
     the presiding ALJ did not have properly delegated authority to hear the appeal.
     Id. at 13-14, 19-25. The agency has filed a response in opposition to the petition
     for review, PFR File, Tab 9, and the respondent has filed a reply, PFR File,
     Tab 12.

                                        ANALYSIS
¶5        The respondent first argues that the Office of Medicare H earings and
     Appeals (OMHA) lacked delegated authority to seek his removal.          PFR File,
     Tab 3 at 4. Specifically, he argues that by statute he and other ALJs are under the
     direct supervision of the Department of Health and Human Services and that the
     Secretary of Health and Human Services did not delegate authority to OMHA to
     initiate actions like the present complaint. Id. The respondent raised essentially
     this same argument below, IAF, Tab 4 at 2-3, but the presiding ALJ did not
     specifically address this argument in the initial decision. Instead, the presiding
     ALJ briefly addressed several of the respondent’s other claims and found that his
     “pleadings lack focus or merit, and [that] he abandoned some of his purported
     defenses by withdrawing them or presenting no evidence in support.” ID at 75.
     It is unclear whether the presiding ALJ intended that general finding to address
     the respondent’s argument regarding the authority of OMHA. However, given
                                                                                       4

     that the respondent specifically raises that argument on review, we modify the
     initial decision to address it specifically.
¶6         Under 5 U.S.C. § 7521, “the agency in which the [ALJ] is employed” may
     take an action against the ALJ upon a finding of good cause by the Board.
     5 U.S.C. § 7521(a). The statute does not require that the complaint be signed or
     authorized by any particular individual. Thus, we find that the complaint in this
     matter, which was filed by attorneys from the Department of Health and Human
     Services on behalf of that agency and its subagency OMHA, IAF, Tab 1 at 1, 3,
     is consistent with the governing statute. Moreover, as we recently clarified in
     Social Security Administration v. Levinson, 2023 MSPB 20, ¶¶ 37-38, the Board’s
     finding of good cause for removal does not bind the employing agency to actually
     remove the respondent, but instead only authorizes the employing agency to
     remove the respondent. We therefore need not opine on which agency official
     may exercise removal authority after the Board has made its good cause
     determination.
¶7         Additionally, even if the respondent could show that the complaint was not
     signed by the proper individual or that there was some other problem with the
     delegations of authority relating to the filing of his complaint, such procedural
     error would only warrant reversal of the initial decision if the respondent could
     show that it was harmful, i.e., that the complaint likely would not have been filed
     in the absence of that error. See Canary v. U.S. Postal Service, 119 M.S.P.R.
     310, ¶¶ 9-12 (2013) (treating a claim regarding the replacement of the proposing
     and deciding officials in a chapter 75 removal action as a claim of harmful
     procedural error).    Applying that standard, we find that the appellant has not
     shown that any error by the agency regarding the authority to file the complaint in
     this matter was harmful. 1

     1
       The appellant also argues that the presiding ALJ did not have proper delegated
     authority to adjudicate his case. PFR File, Tab 3 at 19 -24. However, the Board has
                                                                                          5

¶8         The respondent also argues that the presiding ALJ improperly considered
     personnel records that should have been destroyed years earlier. PFR File, Tab 1
     at 4. On petition for review, he fails to explain how the consideration of these
     records was improper or why any error in considering the records w as harmful.
     We therefore find that the respondent failed to show that the presiding ALJ’s
     consideration of those documents warrants reversal of the initial decision.        See
     Panter v. Department of the Air Force, 22 M.S.P.R. 281, 282 (1984) (an
     adjudicatory error that is not prejudicial to a party’s substantive rights provides
     no basis for reversal of an initial decision).
¶9         The respondent next argues that the removal was improper because the only
     action the agency took before seeking his removal was a counseling. PFR File,
     Tab 1 at 5. We have, in certain cases, wrongly suggested that the Board “selects”
     or makes the “choice” of penalty in a case arising under 5 U.S.C. § 7521. See,
     e.g., Social Security Administration v. Long, 113 M.S.P.R. 190, ¶ 47 (2010)
     (stating that “it is the Board, rather than the employing agency, which selects the
     appropriate penalty”), aff’d, 635 F.3d 526 (Fed. Cir. 2011); Social Security
     Administration v. Steverson, 111 M.S.P.R. 649, ¶ 18 (2009) (stating that “the
     choice of the penalty is for the Board”), aff’d per curium, 383 F. App’x 939 (Fed.
     Cir. 2010). However, the Board clarified in Levinson that its finding of good
     cause for removal does not bind the employing agency to actually remove the
     respondent, but merely authorizes it to do so.       See Levinson, 2023 MSPB 20,
     ¶¶ 37-38. The employing agency retains discretion to take the Board-approved
     action, impose a lesser sanction, or take no action at all.        To the extent we

     specifically delegated authority to ALJs to adjudicate agency complaints under 5 U.S.C.
     § 7521. See 5 C.F.R. § 1201.140(a); MSPB, Organization Functions and Delegations
     of Authority at 20-21 (2011), https://www.mspb.gov/foia/files/Organization_Functions_
     and_Delegations_of_Authority_1279407.pdf (last visited Aug. 2, 2023). We therefore
     find that the respondent has not shown that the presiding ALJ lacked delegated
     authority.
                                                                                       6

      previously have stated otherwise, we hereby overrule those decisions in part with
      regard to this issue.
¶10         It remains the case, however, that in original jurisdiction cases under
      5 U.S.C. § 7521, when determining whether good cause exists to take the
      agency’s requested action, the Board considers the factors articulated in Douglas
      v. Veterans Administration, 5 M.S.P.R. 280, 305-06 (1980).               Levinson,
      2023 MSPB 20, ¶¶ 41-49; Long, 113 M.S.P.R. 190, ¶¶ 47-54; Steverson,
      111 M.S.P.R. 649, ¶¶ 18-20. Here, the presiding ALJ noted the respondent’s lack
      of disciplinary history other than a single counseling.      ID at 85.    Thus, in
      weighing the relevant aggravating and mitigating factors, the presiding ALJ found
      that the respondent’s lack of prior discipline was a significant mitigating factor.
      Id. However, the presiding ALJ found that the mitigating factors in this case
      were outweighed by the nature and seriousness of the petitioner’s proven
      misconduct and the adverse effect of his actions on agency operations. ID at 92 ;
      see Levinson, 2023 MSPB 20, ¶ 42 (the Board considers first and foremost among
      the Douglas factors the seriousness of the misconduct and its relationship to the
      employee’s position and duties).     We find no error in the presiding ALJ’s
      consideration of the relevant factors or his determination that good cause exists
      for the petitioner’s removal.
¶11         During the processing of the complaint, the respondent requested that the
      presiding ALJ disqualify himself.        IAF, Tab 107.       He offered several
      justifications for his request. First, he noted that the presiding ALJ had been
      quoted in a news article regarding the interpretation of the U.S. Supreme Court’s
      decision in Lucia v. Securities and Exchange Commission, 138 S. Ct. 2044
      (2018), in which the Court held that ALJs of the Securities and Exchange
      Commission are officers of the United States whose appointments must comply
      with the Appointments Clause of the U.S. Constitution. IAF, Tab 107 at 2, 9 -14.
      The respondent also asserted that the presiding ALJ’s activities as a member and
      officer of the Federal Administrative Law Judge Conference warranted his
                                                                                          7

      disqualification from this matter. Id. at 3. The presiding ALJ issued an order
      addressing each of the respondent’s asserted grounds for disqualification and
      denying his request.    IAF, Tab 115.     The respondent then requested that the
      presiding ALJ certify the disqualification issue for interlocutory appeal to the
      Board, IAF, Tab 125, but the presiding ALJ denied that request as well, IAF,
      Tab 131. On petition for review, the respondent reiterates several of the grounds
      for disqualification he raised below, and further argues that the presiding ALJ
      should have recused himself because one of the agency’s witnesses in this case
      was the presiding ALJ’s superior at another agency sever al years before the
      events at issue in this case. PFR File, Tab 3 at 13 -14.
¶12         In determining whether an administrative judge should be disqualified on
      grounds other than bias, the Board’s policy is to follow the standard set out at
      28 U.S.C. § 455(a). 2 Lee v. Environmental Protection Agency, 115 M.S.P.R. 533,
      ¶ 20 (2010).
            Under 28 U.S.C. § 455(a), “[a]ny justice, judge, or magistrate of the
            United States shall disqualify himself in any proceeding in which
            his impartiality might reasonably be questioned.” Although the
            Board is not bound by section 455(a), inasmuch as the Board is not
            a court, the Board has held that it “see[s] no reason not to look to the
            rule and case law arising from 28 U.S.C. § 455 where relevant . . . .”
            The goal of section 455(a) is to avoid even the appearance of
            partiality. Thus, the test applied under section 455(a) is not whether
            a judge is in fact biased or prejudiced, but whether a judge's
            impartiality might reasonably be questioned.               In enacting
            section 455(a), Congress created an objective standard under which
            disqualification of a judge is required when a reasonable person,

      2
        Although this matter was heard by an ALJ rather than an administrative judge, we see
      no reason to apply a different standard for disqualification to ALJs. As we noted in
      Lee, at least one court of appeals has held that ALJs who are employed by the agencies
      whose actions they review cannot be held to the “mere appearance of impropriety”
      standard of 28 U.S.C. § 455(a). Lee, 115 M.S.P.R. 533, ¶ 20 n.2 (citing Greenberg v.
      Board of Governors of Federal Reserve System, 968 F.2d 164, 167 (2d Cir. 1992)).
      However, that rationale does not apply to Board ALJs who are reviewing the proposed
      actions of other agencies. See id.
                                                                                         8

              knowing all the facts, would question the judge’s impartiality. In
              applying this standard, it is critically important to identify the facts
              that might reasonably cause an objective observer to question the
              judge’s impartiality.
      Shoaf v. Department of Agriculture, 97 M.S.P.R. 68, ¶ 7 (2004) (internal citations
      omitted), aff’d, 158 F. App’x 267 (Fed. Cir. 2005). Applying that standard to the
      facts of this case, we find that the presiding ALJ did not abuse his discretion in
      denying the respondent’s request for disqualification.          We agree with the
      presiding ALJ that neither his statements regarding Lucia, nor his activities as
      part of a professional organization, would lead a reasonable person to question
      his impartiality.   We have also considered the respondent’s assertion that the
      presiding ALJ previously worked at another agency with one of the witnesses in
      this matter, but again we find no basis for disqualification.               See Lee,
      115 M.S.P.R. 533, ¶ 22 (finding that the administrative judge’s prior employment
      at another agency with the agency counsel did not provide a basis f or questioning
      her impartiality in the present appeal).
¶13        We further find that the presiding ALJ did not abuse his discretion in
      denying the respondent’s request to certify the disqualification issue for
      interlocutory appeal. The Board’s regulations provide in part that a judge should
      certify a ruling for interlocutory review if it “involves an important question of
      law or policy about which there is substantial ground for difference of opinion.”
      5 C.F.R. § 1201.92(a). The respondent’s request to disqualify the presiding ALJ
      does not present an important question of law or policy, as the Board’s standards
      for disqualification are well established. See Lee, 115 M.S.P.R. 533, ¶ 23.
¶14        Having reviewed the record as a whole and the respondent’s arguments on
      review, we concur with the presiding ALJ that the petitioner established good
      cause for the respondent’s removal. We note, however, that the presiding ALJ
      erred in further stating that the respondent “is removed from his position as an
      ALJ.”    ID at 4.    The Board itself does not have the authority to remove the
      respondent.    See 5 U.S.C. § 7521(a) (providing that “the agency in which the
                                                                                            9

      administrative law judge is employed” may take an action against an ALJ only
      upon a finding of good cause by the Board). Moreover, our determination that
      good cause exists to remove the respondent does not bind the agency to remove
      the respondent, but merely authorizes it do so.          Levinson, 2023 MSPB 20,
      ¶¶ 37-38. As stated above, the agency is free to remove the respondent, impose a
      lesser sanction, or take no action at all.

                                              ORDER
¶15         This is the final decision of the Merit Systems Pro tection Board in this
      appeal. Title 5 of the Code of Federal Regulations, section 1201.113 (5 C.F.R.
      § 1201.113).

                                NOTICE OF APPEAL RIGHTS 3
            You may obtain review of this final decision. 5 U.S.C. § 7703(a)(1). By
      statute, the nature of your claims determines the time limit for seeking such
      review and the appropriate forum with which to file.              5 U.S.C. § 7703(b).
      Although we offer the following summary of available appeal rights, the Merit
      Systems Protection Board does not provide legal advice on which option is most
      appropriate for your situation and the rights described below do not represent a
      statement of how courts will rule regarding which cases fall within their
      jurisdiction.   If you wish to seek review of this final decision, you should
      immediately review the law applicable to your claims and carefully follow all
      filing time limits and requirements. Failure to file within the applicable time
      limit may result in the dismissal of your case by your chosen forum.
            Please read carefully each of the three main possible choice s of review
      below to decide which one applies to your particular case. If you have questions

      3
        Since the issuance of the initial decision in this matter, the Board may have updated
      the notice of review rights included in final decisions. As indicated in the notice, the
      Board cannot advise which option is most appropriate in any matter.
                                                                                       10

about whether a particular forum is the appropriate one to review your case, you
should contact that forum for more information.

      (1) Judicial review in general. As a general rule, an appellant seeking
judicial review of a final Board order must file a petition for review with the U.S.
Court of Appeals for the Federal Circuit, which must be received by the court
within 60 calendar days of the date of issuance of this decision.                5 U.S.C.
§ 7703(b)(1)(A).
      If you submit a petition for review to the U.S. Court of Appeals for the
Federal   Circuit,   you   must   submit   your   petition    to   the   court    at   the
following address:
                              U.S. Court of Appeals
                              for the Federal Circuit
                             717 Madison Place, N.W.
                             Washington, D.C. 20439

      Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.

      (2) Judicial   or    EEOC    review    of   cases      involving   a   claim      of
discrimination. This option applies to you only if you have claimed that you
were affected by an action that is appealable to the Board and that such action
was based, in whole or in part, on unlawful discrimination. If so, you may obtain
                                                                                11

judicial review of this decision—including a disposition of your discrimination
claims—by filing a civil action with an appropriate U.S. district court ( not the
U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you
receive this decision.    5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems
Protection Board, 582 U.S. 420 (2017). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the district court no later than 30 calendar days after your representative
receives this decision. If the action involves a claim of discrimination based on
race, color, religion, sex, national origin, or a disabling condition, you may be
entitled to representation by a court-appointed lawyer and to waiver of any
requirement of prepayment of fees, costs, or other security.        See 42 U.S.C.
§ 2000e-5(f) and 29 U.S.C. § 794a.
      Contact information for U.S. district courts can be found at their respective
websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
      Alternatively, you may request review by the Equal Employment
Opportunity Commission (EEOC) of your discrimination claims only, excluding
all other issues. 5 U.S.C. § 7702(b)(1). You must file any such request with the
EEOC’s Office of Federal Operations within 30 calendar days after you receive
this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the EEOC no later than 30 calendar days after your representative receives
this decision.
      If you submit a request for review to the EEOC by regular U.S. mail, the
address of the EEOC is:
                         Office of Federal Operations
                  Equal Employment Opportunity Commission
                               P.O. Box 77960
                          Washington, D.C. 20013
                                                                                     12

      If you submit a request for review to the EEOC via commercial delivery or
by a method requiring a signature, it must be addressed to:
                            Office of Federal Operations
                     Equal Employment Opportunity Commission
                                 131 M Street, N.E.
                                   Suite 5SW12G
                             Washington, D.C. 20507

      (3) Judicial     review   pursuant     to   the   Whistleblower       Protection
Enhancement Act of 2012. This option applies to you only if you have raised
claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or
other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D).
If so, and your judicial petition for review “raises no challenge to the Board’s
disposition of allegations of a prohibited personnel practice described in section
2302(b) other than practices described in section 2302(b)(8), or 2302(b)(9)(A)(i),
(B), (C), or (D),” then you may file a petition for judicial review either with the
U.S. Court of Appeals for the Federal Circuit or any court of appeals of
competent jurisdiction. 4   The court of appeals must receive your petition for
review within 60 days of the date of issuance of this decision.               5 U.S.C.
§ 7703(b)(1)(B).
      If you submit a petition for judicial review to the U.S. Court of Appeals for
the Federal Circuit, you must submit your petition to the court at the
following address:

4
   The original statutory provision that provided for judicial review of certain
whistleblower claims by any court of appeals of competent jurisdiction expired on
December 27, 2017. The All Circuit Review Act, signed into law by the President on
July 7, 2018, permanently allows appellants to file petitions for judici al review of
MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals
for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.
The All Circuit Review Act is retroactive to November 26, 2017. Pu b. L. No. 115-195,
132 Stat. 1510.
                                                                              13

                             U.S. Court of Appeals
                             for the Federal Circuit
                            717 Madison Place, N.W.
                            Washington, D.C. 20439

      Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our webs ite at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
      Contact information for the courts of appeals can be found at their
respective websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.

/s/
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.