Court Opinion

ID: 9956966
Source: CourtListenerOpinion
Date Created: 2024-04-03 15:02:33.612543+00
Date Added: 2024-06-11T08:18:01.319608
License: Public Domain

Case: 22-2045    Document: 47     Page: 1   Filed: 04/03/2024

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                MICHAEL E. SHEIMAN,
                     Petitioner

                             v.

         DEPARTMENT OF THE TREASURY,
                    Respondent
              ______________________

                        2022-2045
                  ______________________

    Petition for review of the Merit Systems Protection
 Board in No. SF-0752-15-0372-I-2.
                 ______________________

                  Decided: April 3, 2024
                  ______________________

     GEORGE CHUZI, Kalijarvi, Chuzi, Newman & Fitch, PC,
 Washington, DC, argued for petitioner. Also represented
 by AARON H. SZOT.

     STEPHANIE FLEMING, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for respondent. Also represented by
 REGINALD THOMAS BLADES, JR., BRIAN M. BOYNTON,
 PATRICIA M. MCCARTHY.
                   ______________________
Case: 22-2045       Document: 47      Page: 2    Filed: 04/03/2024

 2                                         SHEIMAN v. TREASURY

     Before PROST, SCHALL, and REYNA, Circuit Judges.
 SCHALL, Circuit Judge.
                             DECISION
     Michael E. Sheiman petitions for review of the May 24,
 2022 Final Order of the Merit Systems Protection Board
 (“Board”) that sustained the action of the Internal Revenue
 Service (“IRS” or “agency”) that removed Mr. Sheiman from
 his position as a GS-13 Senior Appraiser in Honolulu, Ha-
 waii. Sheiman v. Dep’t of the Treasury, No. SF-0752-15-
 0372-I-2, 2022 WL 1667885 (M.S.P.B. May 24, 2022); J.A.
 1–23. 1 We have jurisdiction pursuant to 28 U.S.C.
 § 1295(a)(9). For the reasons stated below, we affirm.
                            DISCUSSION
                                 I
     The events resulting in Mr. Sheiman’s removal began
 when the agency received an anonymous letter dated Sep-
 tember 16, 2011. The writer alleged that Mr. Sheiman was
 abusing his work time by, among other things, “golfing in
 the early afternoons during the work week.” J.A. 2 (cita-
 tion omitted). From September 26, 2011, to February 18,
 2014, the Treasury Inspector General for Tax Administra-
 tion (“TIGTA”) conducted an investigation regarding the
 allegations in the letter. Id.
     Based upon the TIGTA investigation, the agency is-
 sued an October 24, 2014 notice proposing to remove
 Mr. Sheiman from his position. The notice was based on
 two charges. The first charge was providing false infor-
 mation regarding official time and attendance records. The
 second charge was providing misleading information re-
 garding official time and attendance records. Charge 1

     1      We refer to the Board’s Final Order as its “final de-
 cision.”
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 SHEIMAN v. TREASURY                                        3

 contained 168 specifications, each specifying a date when
 the agency alleged Mr. Sheiman played golf during his duty
 hours, during the time period August 4, 2006, through Au-
 gust 9, 2013. J.A. 26. Charge 2 contained 29 specifications,
 each specifying a date during the time period May 23, 2007,
 through July 18, 2013. On these dates, the agency charged,
 Mr. Sheiman played golf when he had requested, and had
 taken, sick leave. Id.
     On February 3, 2015, Stephen C. Whiteaker, the
 agency’s deciding official for the proposed removal, issued
 a notice sustaining all of the specifications in both Charge
 1 and Charge 2. In addition, Mr. Whiteaker found that re-
 moval was the appropriate penalty for each of the charges.
 J.A. 133–34. Mr. Sheiman was removed from the agency
 effective February 6, 2015. Thereafter, he timely appealed
 to the Board.
                              II
     The     administrative     judge  (“AJ”)     to    whom
 Mr. Sheiman’s appeal was assigned conducted a hearing on
 October 1–2, 2015. Subsequently, on August 1, 2016, the
 AJ issued an initial decision. Sheiman v. Dep’t of the Treas-
 ury, No. SF-0752-15-0372-I-2, 2016 WL 4161767 (M.S.P.B.
 Aug. 1, 2016); J.A. 24–55. In her initial decision, the AJ
 ruled (1) that Charge 1 was not sustained; (2) that eight of
 the 29 specifications of providing misleading information
 in Charge 2 were sustained; and (3) that Mr. Sheiman’s re-
 moval should be mitigated to a 30-day suspension. J.A. 36–
 37, 40–42, 48.
     Regarding Charge 1, the AJ stated:
     Based on the totality of the circumstances, consid-
     ering the appellant’s plausible explanation of his
     misunderstanding [regarding time and attendance
     reporting], the other record evidence corroborating
     his understanding, and the lack of circumstantial
     evidence from which an intent to defraud could be
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 4                                       SHEIMAN v. TREASURY

     inferred, I find the agency did not show he intended
     to defraud or deceive the government when he com-
     pleted his time and attendance records.
 Id. at 36.
     Considering Charge 2, the AJ found, with respect to
 each of the eight specifications she sustained, that
 Mr. Sheiman took sick leave on days when he was not seek-
 ing medical treatment and was not medically incapaci-
 tated. She also found that, in doing so, he “knowingly
 provided inaccurate information on his time and attend-
 ance records.” Id. at 42. The AJ stated that Mr. Sheiman
 “knew or should have known that paid sick leave was for
 illness or medical treatment, not for engaging in a recrea-
 tional activity or sport such as golfing” and that, “as a fed-
 eral employee, he knew or should have known that he
 needed to take annual leave for recreational activities or a
 sport such as playing golf.” Id. at 41–42.
     As noted, though, the AJ mitigated the agency’s pen-
 alty of removal to a 30-day suspension. She did so because
 she determined that the penalty of removal was not within
 the parameters of reasonableness. Id. at 46. The AJ began
 by stating that she agreed with Mr. Whiteaker that
 Mr. Sheiman had committed a serious offense when he
 took sick leave and played golf, especially given the nature
 of his position, which involved a great deal of trust due to
 the lack of on-site supervision. Id. at 47. “However,” she
 continued, “there are strong mitigating factors here, in-
 cluding the appellant’s potential for rehabilitation.” Id. In
 addition, the AJ noted that Mr. Sheiman “was remorseful
 and acknowledged that he made mistakes in his time and
 attendance practices.” Id. The AJ also noted that, imme-
 diately following his interview with the TIGTA investiga-
 tor in February 2014, Mr. Sheiman contacted his
 supervisor for instructions regarding how to accrue, use,
 and properly record his hours and that he complied with all
 time and attendance requirements from that time until his
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 SHEIMAN v. TREASURY                                           5

 removal. Further, the AJ observed that most of the in-
 stances of Mr. Sheiman requesting sick leave to golf oc-
 curred about four years before his removal. Id. And
 finally, the AJ noted that Mr. Sheiman had faced no other
 disciplinary actions during his nine years of federal service.
 Id. Taking these several factors into account, the AJ con-
 cluded:
     I find that the penalty of removal exceeds the tol-
     erable limits of reasonableness. Based on the mit-
     igating factors[,] including [the appellant’s]
     potential for rehabilitation, 9 years of service with
     the agency, record of good performance, and lack of
     prior discipline, I find that the agency’s penalty is
     outside the bounds of reasonableness. I find that a
     30-day suspension without pay is the maximum
     reasonable penalty under the circumstances of this
     case.
 Id. at 48 (footnote omitted).
                                 III
     The agency and Mr. Sheiman, respectively, petitioned
 and cross-petitioned for review. In its petition, the agency
 advanced two grounds. First, it contended that, contrary
 to the AJ’s finding, it proved Charge 1. J.A. 5. Second, it
 argued that, after she sustained eight specifications of
 Charge 2, the AJ erred in mitigating Mr. Sheiman’s re-
 moval to a 30-day suspension. Id. at 6. Relevant here, in
 his cross-petition for review, Mr. Sheiman argued that the
 AJ erred in sustaining Charge 2. Id. He also argued that
 the AJ erred in finding that he knew his use of sick leave
 to play golf was improper and that he knowingly provided
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 6                                      SHEIMAN v. TREASURY

 inaccurate information on his time and attendance records.
 Id. 2
     In its final decision, the Board affirmed-in-part the
 AJ’s initial decision. First, rejecting the agency’s argu-
 ments to the contrary, the Board concluded that the agency
 had failed to prove Charge 1, the falsification charge, be-
 cause it had failed to show that Mr. Sheiman had acted
 with the requisite intent. Id. Specifically, the Board
 “agree[d] with the [AJ] that the agency failed to prove that
 [Mr. Sheiman] intended to deceive or defraud the Govern-
 ment when he completed his time and attendance records.”
 Id. at 7. Viewing the record, the Board found “no suffi-
 ciently sound reasons to disturb the [AJ]’s demeanor-based
 conclusion that [Mr. Sheiman] did not intend to defraud or
 deceive the Government when he completed his time and
 attendance records.” Id. The Board also adopted the AJ’s
 decision to sustain eight of the 29 specifications of provid-
 ing misleading information under Charge 2. Id. at 10.
 Continuing, however, the Board determined that the AJ
 had erred in mitigating Mr. Sheiman’s penalty from re-
 moval to a 30-day suspension. It therefore reinstated the
 removal. Id. at 11.
     In reinstating the agency’s penalty, the Board found
 that the AJ had erred in revisiting the penalty assessment
 when the deciding official had determined that removal
 was appropriate for each charge independently. Id. at 12.
 Most importantly, the Board also found that the AJ had
 erred in her consideration of the pertinent Douglas fac-
 tors. 3 In that regard, the Board began by stating that it

     2   Mr. Sheiman also cross-petitioned for review of a
 ruling by the AJ with respect to a debt collection dispute
 between himself and the agency. J.A. 17. That matter is
 not before us.
     3   In Douglas v. Veterans Administration, 5 M.S.P.R.
 280, 305–06 (1981), the Board listed twelve factors that it
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 SHEIMAN v. TREASURY                                        7

 disagreed with the AJ’s assessment of Mr. Sheiman’s po-
 tential for rehabilitation (Douglas factor 10). The Board
 noted that the AJ had found that Mr. Sheiman was re-
 morseful, that he had acknowledged that he made mis-
 takes in his time and attendance practices, and that he had
 complied with all time and attendance requirements after
 his first interview with the TIGTA investigator. Id. And,
 the Board stated, “[w]e discern no basis to disturb the
 [AJ’s] credibility determination that the appellant ex-
 pressed sincere remorse for some of his conduct.” Id. at 13.
 Nevertheless, the Board found that the AJ had failed to
 consider all of the relevant evidence in concluding that
 Mr. Sheiman could be rehabilitated and that therefore this
 finding was not entitled to deference. Id.
      First, regarding remorse, the Board pointed out that
 the AJ did not consider that Mr. Sheiman only admitted to
 his “timekeeping errors” after being confronted about them
 during the TIGTA investigation. The Board stated that
 this warranted a reduction in the weight accorded this fac-
 tor. Id. (citing Saiz v. Dep’t of the Navy, 122 M.S.P.R. 521,
 ¶ 13 (2015) (concluding that an appellant’s expressions of
 remorse should be given reduced weight because he made
 them only after his misconduct was discovered) and Sin-
 gletary v. Dep’t of the Air Force, 94 M.S.P.R. 553, ¶ 15
 (2003) (explaining that the timing of expressions of re-
 morse is relevant in assessing rehabilitation potential),
 aff’d, 104 F. App’x 155 (Fed. Cir. 2004)). Second, the Board
 noted that Mr. Sheiman’s admissions only concerned the
 unproven misconduct set forth in Charge 1, the falsification
 charge. Id. Turning to Charge 2, the Board noted that

 deemed relevant for consideration in determining the ap-
 propriateness of a penalty. We have endorsed the use of
 the Douglas factors in penalty determinations. See Rodri-
 guez v. Dep’t of Veterans Affs., 8 F.4th 1290, 1302–03 (Fed.
 Cir. 2021) (collecting cases).
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 8                                      SHEIMAN v. TREASURY

 Mr. Sheiman had “never owned up to his misuse of sick
 leave or expressed any remorse for his lack of candor in the
 matter.” Id. While the Board acknowledged some mitigat-
 ing factors, such as Mr. Sheiman’s nine years of service and
 his consistently above-average performance (Douglas fac-
 tors 3 and 4), it concluded that removal was within the tol-
 erable limits of reasonableness for what it viewed as
 Mr. Sheiman’s “sustained misconduct.” Id. at 14. In arriv-
 ing at this conclusion, the Board observed that, by know-
 ingly providing inaccurate information on his time and
 attendance records, Mr. Sheiman had demonstrated a lack
 of candor, a serious offense striking at the heart of the em-
 ployer-employee relationship. This was particularly so, the
 Board pointed out, considering the nature of Mr. Sheiman’s
 position, in which Mr. Sheiman often worked remotely and
 was in a position of public trust that required him to have
 contact with the public. Id. The Board noted that these
 considerations led the deciding official to lose trust in
 Mr. Sheiman, which the Board viewed as an aggravating
 factor. Id. at 15.
     Finally, the Board stated that, to the extent the AJ
 found mitigation appropriate because lesser penalties were
 available, it disagreed with her. The Board noted that re-
 moval was within the range of penalties in the IRS’s Guide
 to Penalty Determinations and that the Guide states that
 “[p]ersons in positions of trust, or who deal directly with
 taxpayers, can be held to higher standards.” Id.; J.A. 109.
 In conclusion, the Board stated:
     Having carefully considered the evidence and
     weighed the pertinent Douglas factors as a whole,
     we discern no basis to disturb the determination of
     the deciding official that removal is a reasonable
     penalty for the sustained charges and specifica-
     tions. Although the appellant has 9 years of good
     performance and demonstrated remorse, we find
     that these factors are outweighed by the nature
     and seriousness of his offense as it relates to his
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 SHEIMAN v. TREASURY                                         9

     position, duties, and responsibilities, particularly
     considering his employment by the IRS and the
     level of trust that is required for a Senior Ap-
     praiser.
 J.A. 16–17.
                              IV
     We must set aside a Board decision if it is “(1) arbi-
 trary, capricious, an abuse of discretion, or otherwise not
 in accordance with law; (2) obtained without procedures re-
 quired by law, rule, or regulation having been followed; or
 (3) unsupported by substantial evidence.”         5 U.S.C.
 § 7703(c). “The petitioner bears the burden of establishing
 error in the Board’s decision.” Harris v. Dep’t of Veterans
 Affs., 142 F.3d 1463, 1467 (Fed. Cir. 1998).
                               V
                               A
      Mr. Sheiman makes two arguments on appeal. First,
 citing Purifoy v. Department of Veterans Affairs, 838 F.3d
 1367 (Fed. Cir. 2016), he claims that when the Board rein-
 stated the penalty of removal, it erred because it failed to
 defer to the AJ’s demeanor-based credibility findings.
 Pet’r’s Br. 19–24, 27–28; Pet’r’s Reply Br. 8–14. Purifoy
 stands for the proposition that when an AJ’s findings about
 an appellant’s propensity for rehabilitation “are neces-
 sarily intertwined with issues of credibility and an analysis
 of his demeanor at trial,” they deserve deference from the
 Board. 838 F.3d at 1373. The problem with Mr. Sheiman’s
 argument is that his case does not present a Purifoy situa-
 tion. In Part III above, we have described the Board’s final
 decision at length. From that description, it is clear that
 the Board did not fail to defer to the AJ’s credibility deter-
 minations. On the contrary, as seen, the Board accepted
 those determinations. However, after deferring to the AJ’s
 credibility determinations, the Board went on to hold that
 the AJ had erred in her weighing of the Douglas factors
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 10                                     SHEIMAN v. TREASURY

 relating to Mr. Sheiman’s potential for rehabilitation. In
 Haebe v. Department of Justice, 288 F.3d 1288, 1302 (Fed.
 Cir. 2002), we said that “[w]hen the demeanor-based defer-
 ence requirement is not in play, the MSPB is free to re-
 weigh the evidence and substitute its own decision as to the
 facts or the law commensurate with the substantial evi-
 dence standard.” Here the Board accepted the AJ’s de-
 meanor-based credibility determinations. Then, however,
 it substituted its own decision for that of the AJ on the is-
 sue of mitigation of the penalty. In short, the Board did
 what in Haebe we said it could do. It thus committed no
 error. We therefore reject Mr. Sheiman’s first argument.
                              B
      Mr. Sheiman’s second argument is that the Board
 erred in finding that the IRS Penalty Guide provided for
 removal for a first offense of providing misleading infor-
 mation regarding official time and attendance records, as
 alleged in Charge 2. Pet’r’s Br. 21. He thus claims that the
 Board’s decision reinstating his removal was arbitrary, ca-
 pricious, and/or an abuse of discretion and constituted clear
 error.     Id. at 35–36.      In making this argument,
 Mr. Sheiman points out that, in its final decision, the
 Board apparently relied on the 2007 version of the Guide.
 The 2007 version of the Guide, Mr. Sheiman notes, did pro-
 vide for a “written reprimand to removal” for a first offense
 of “false statements, misrepresentation, or fraud in entitle-
 ment, including providing false information concerning
 time, leave, travel, or other entitlements.” J.A. 119 (capi-
 talization altered). He further notes, however, that the
 2012 version of the Penalty Guide, which was in effect
 when he was removed, provided for a punishment of “writ-
 ten reprimand” to a “20-day suspension” for a first offense
 involving the same acts. J.A. 87 (capitalization altered).
 Mr. Sheiman thus urges that the maximum penalty that
 should have been imposed upon him with respect to Charge
 2 was a 20-day suspension.
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 SHEIMAN v. TREASURY                                       11

      We do not agree. While Mr. Sheiman correctly points
 out the difference between the 2007 and the 2012 Guides,
 the Board’s confusion in this regard was at most harmless
 error. See Sistek v. Dep’t of Veterans Affs., 955 F.3d 948,
 957 (Fed. Cir. 2020); Haebe, 288 F.3d at 1309; Kewley v.
 Dep’t of Health and Human Servs., 153 F.3d 1357, 1366
 (Fed. Cir. 1998). First of all, the 2012 version of the Pen-
 alty Guide states, in bold letters: “The range of penalties
 should serve as a guide ONLY, not a rigid standard. Devi-
 ations from the guide are permissible and greater or lesser
 penalties than suggested may be imposed.” J.A. 77. Simi-
 lar language appeared in the 2007 version of the Guide.
 J.A. 107. Moreover, both the 2012 and the 2007 version of
 the Penalty Guide state that “[p]ersons in positions of
 trust, or who deal directly with taxpayers, can be held to
 higher standards.” J.A. 102, 109. As noted above in Part
 III, the Board pointed out that Mr. Sheiman was in a posi-
 tion of trust and dealt with the public, and the deciding of-
 ficial testified that he lost confidence in Mr. Sheiman. We
 decline to disturb the reinstatement of Mr. Sheiman’s re-
 moval on account of the Board’s apparent reliance on the
 language in the 2007 version of the Penalty Guide.
    We have considered Mr. Sheiman’s remaining argu-
 ments and have found them not persuasive.
                        CONCLUSION
     For the foregoing reasons, we affirm the final decision
 of the Board.
                        AFFIRMED
                            COSTS
 No costs.