Court Opinion

ID: 802178
Source: CourtListenerOpinion
Date Created: 2012-06-13 15:41:20+00
Date Added: 2024-06-11T18:00:03.130245
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

                 GEORGE DUGGAN,
                    Petitioner,
                           v.
           DEPARTMENT OF DEFENSE,
                 Respondent.
              __________________________

                      2012-3025
              __________________________

   Petition for review of the Merit Systems Protection
Board in Case No. SF1221100159-W-1.
              __________________________

                Decided: June 13, 2012
              __________________________

   GEORGE DUGGAN, of Newman, California, pro se.

    BARBARA E. THOMAS, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, for respondent. With
her on the brief were STUART F. DELERY, Acting Assistant
Attorney General, JEANNE E. DAVIDSON, Director, and
TODD HUGHES, Deputy Director.
               __________________________
DUGGAN   v. DEFENSE                                       2

  Before RADER, Chief Judge, O’MALLEY and WALLACH,
                   Circuit Judges.
PER CURIAM.
    George Duggan, a senior auditor with the Defense
Contract Audit Agency (“DCAA”) of the Department of
Defense, appeals from an order of the Merit Systems
Protection Board (“Board”) holding that the agency did
not violate the Whistleblower Protection Act, 5 U.S.C.
§ 2302(b)(8) (“WPA”), by (1) suspending Mr. Duggan
without pay for two days in 2003 or (2) initially giving Mr.
Duggan a performance rating of “unacceptable” in 2008
before revising that rating to “exceeds fully successful.”
For the reasons discussed below, this court affirms the
Board’s determinations.
                       BACKGROUND
    Mr. Duggan during the early 2000s was partly re-
sponsible for the auditing of the accounts of Chemical
Systems Division, a component of federal contractor Pratt
& Whitney. On September 13, 2002, Mr. Duggan faxed to
a DCAA specialist a copy of a spreadsheet prepared by
Chemical Systems personnel. Before faxing the spread-
sheet, which listed potential losses that Chemical Sys-
tems might incur, Mr. Duggan handwrote on it several
comments insinuating that the numbers indicated Chemi-
cal Systems had misled the Government regarding con-
tract pricing. 1

   1    Specifically, Mr. Duggan wrote “set-up reserve for
[Defective Pricing] we will lose . . . pay [Government] for
[Defective Pricing] when we lose, in no way more than the
$162,482 we know we scammed the [Government]; re-
verse the rest on successful negotiation & in any case give
me a raise, VP of [Government] relations.”
3                                      DUGGAN   v. DEFENSE

    Although Mr. Duggan sent this altered copy of the
spreadsheet to a DCAA employee, he used a Chemical
Systems fax machine to do so. He then left the annotated
spreadsheet in the fax machine, where it was later dis-
covered by a Chemical Systems employee. In October
2002, Mary Estes, Mr. Duggan’s supervisor, received a
complaint from a Pratt & Whitney employee; Ms. Estes
prepared a memorandum in which she summarized the
various complaints that had been relayed to her and
expressed certain concerns of her own about Mr. Duggan’s
behavior toward contractor personnel. On November 21,
2002, the manager of the DCAA branch where Mr.
Duggan was employed, James P. Hayes, informed Mr.
Duggan in a written memorandum that he was proposing
that Mr. Duggan be suspended without pay for two days.
He cited two reasons for the proposed suspension: (1)
“[m]aking inappropriate comments about a fellow auditor
to contractor representatives,” and (2) “[m]aking disre-
spectful, offensive comments to contractor representa-
tives.”
    Mr. Duggan responded to Mr. Hayes’s memorandum
by writing a letter to Karen Taylor, Mr. Hayes’s supervi-
sors and the DCAA official who would make the final
decision on the proposed suspension. In that memoran-
dum, Mr. Duggan asserted that Chemical Systems was
systematically withholding a wide variety of documenta-
tion without which he could not effectively audit the
contractor’s finances and contract pricing. Additionally,
he admitted making a number of disparaging comments,
both about a fellow auditor and to contractor representa-
tives.
    Mr. Duggan was suspended without pay on January
16 and January 17, 2003. Mr. Duggan filed a grievance
concerning the suspension, but the grievance was denied.
DUGGAN   v. DEFENSE                                     4

    In May 2003, Mr. Duggan refused to sign a Statement
of Independence, a standard form by which each DCAA
auditor was to aver that he or she was “free both in fact
and in appearance from personal, external, and organiza-
tional impairments to independence.” Mr. Duggan
claimed that he operated under an external impairment
because Chemical Systems refused to provide him with
the documentation he believed necessary to permit him to
conduct an adequate audit. DCAA officials informed Mr.
Duggan both that they did not believe he was externally
impaired and that he could no longer serve as an auditor
assigned to Chemical Systems if he did not sign the
independence statement, but Mr. Duggan continued to
refuse to sign. Consequently, he was transferred from
DCAA’s Silicon Valley Branch to the Peninsula Branch
Office on May 25, 2003. Mr. Duggan filed a grievance
concerning the transfer on June 9, 2003, but his grievance
was denied. In June 2003, Mr. Duggan’s promotion ap-
praisal was lowered from a 75 rating to a 66.
    In 2007, Mr. Duggan spent roughly ten months per-
forming contractor audits in Iraq. In 2008, after his
return to DCAA’s Peninsula Branch Office in California,
Mr. Duggan began sending detailed letters to David
Rapallo, chief investigative counsel for the House of
Representatives’s Committee on Oversight and Govern-
ment Reform. In those letters he complained of the “dys-
functional audit oversight” provided by DCAA in general
and contended that DCAA’s performance in Iraq was
particularly “egregious.” He provided numerous examples
of what he called “systemic deficiencies” in DCAA’s work
in Iraq.
    When Mr. Duggan left Iraq at the end of 2007, he re-
ceived an “exit” performance appraisal from his supervi-
sor there, who rated his work “outstanding.” On July 30,
2008, several months after Mr. Duggan’s return to the
5                                       DUGGAN   v. DEFENSE

DCAA Peninsula Branch Office, his supervisor signed an
appraisal of his job performance from December 2, 2007
through June 30, 2008, rating that performance “unac-
ceptable.”
    Mr. Duggan filed a grievance, arguing that the poor
rating he received was unfounded and that he should
have received an annual performance evaluation that
incorporated his rating of “outstanding” upon his exit
from Iraq, rather than an interim evaluation that ad-
dressed only the work he had performed since his return
from Iraq. He also alleged that the negative evaluation
was a form of prohibited retaliation for his protected
disclosures to Congress.
    The regional audit manager, John Doherty, after ex-
amining the issue, decided that Mr. Duggan’s rating for
the period in question should have been “fully successful,”
and that Mr. Duggan should have been issued an annual
performance evaluation that combined his two evalua-
tions. Accordingly, Mr. Duggan’s performance appraisal
for December 2007 through June 2008 was reissued with
the revised rating of “fully successful,” and Mr. Doherty
issued an annual evaluation of Mr. Duggan’s performance
that rated it as “exceeds fully successful.”
    In 2009, Mr. Duggan filed a Complaint with the
United States Office of Special Counsel (“OSC”) in which
he alleged that the DCAA had retaliated against him in
violation of the WPA. In two letters dated July 2, 2009,
and September 24, 2009, the Special Counsel declined to
present Mr. Duggan’s allegations to the Board. Mr.
Duggan filed a Complaint with the Board on November
22, 2009. He divided his allegations into “cases,” alleging
(1) that his faxed notes were protected disclosures under
the WPA and that his two-day suspension without pay in
DUGGAN   v. DEFENSE                                         6

2003 was retaliation for sending the notes (“Case A”) 2 ;
and (2) that the “unacceptable” rating was retaliation for
his communicating with Congress, another protected
disclosure (“Case B”). 3
    The administrative judge (“AJ”) issued an initial deci-
sion in which he found in the agency’s favor with respect
to Cases A and B. First, the AJ found that, although Mr.
Duggan’s faxed spreadsheet constituted a protected
disclosure and a contributing factor to Mr. Duggan’s
suspension, the agency, nevertheless, had proven by clear
and convincing evidence that it would have suspended
Mr. Duggan even in the absence of any protected disclo-
sure. With regard to the letters Mr. Duggan sent to high-
level DCAA personnel and his congressman, the AJ found
that Mr. Duggan did not submit those particular allega-
tions to OSC and, therefore, failed to exhaust his adminis-
trative remedies as to these letters. 4
    Furthermore, the AJ determined that a promotion
appraisal does not constitute a personnel action governed
by the WPA. Even if it did, the AJ held Mr. Duggan’s
claim would still fail because the decrease in the ap-
praisal would have occurred even if no protected disclo-

    2   In a later filing, Mr. Duggan expanded Case A to
include an allegation that his grievance of his suspension
and his complaint to his congressman about it constituted
protected disclosures.
    3   Mr. Duggan brought a third “case.” Case C con-
cerned an unsuccessful attempt by one of Mr. Duggan’s
supervisors to suspend him in December 2008. Because
Case C is not at issue on appeal to this court, it will not be
discussed further.
    4   The AJ also found that, even if the claims had
been exhausted, they would not succeed. The agency,
according to the AJ, would have denied Mr. Duggan’s
grievance of his suspension even in the absence of any
protected disclosure.
7                                          DUGGAN   v. DEFENSE

sure had been made. Similarly, the AJ found Mr.
Duggan’s transfer would have been ordered in the absence
of any protected disclosure.
    With regard to Case B, the AJ determined that Mr.
Duggan failed to demonstrate that any retaliation on the
basis of protected disclosures to House Investigative
Counsel had occurred, because he had not proven that the
agency officials whom he allegedly informed of the disclo-
sures—his branch manager, Ellen Hoffer, and his tempo-
rary supervisor, Linda Lombardo—in fact knew of the
disclosures in question. Therefore, the AJ held the disclo-
sures could not have been “a contributing factor in [Mr.
Duggan’s] subsequent performance rating or other per-
sonnel actions.”
     Mr. Duggan timely filed for full Board review of the
initial decision. The Board rejected his objections to the
AJ’s factual findings and upheld the initial decision. Mr.
Duggan then petitioned for review by this court. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).
                         DISCUSSION
    This court’s review of decisions by the Board in whis-
tleblower and other cases is limited. We will overturn a
decision of the Board only if it is “(1) arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance
with law; (2) obtained without procedures required by
law, rule, or regulation having been followed; or (3) un-
supported by substantial evidence.” 5 U.S.C. § 7703(c).
Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” Consol. Edison Co. v. National Labor Rela-
tions Bd., 305 U.S. 197, 229 (1938).
    A “protected disclosure” is a disclosure which “an em-
ployee . . . reasonably believes evidences (i) a violation of
DUGGAN   v. DEFENSE                                        8

any law, rule, or regulation, or (ii) gross mismanagement,
a gross waste of funds, an abuse of authority, or a sub-
stantial and specific danger to public health or safety.” 5
U.S.C. § 2302(b)(8)(A). To establish a protected disclosure
under the WPA, an employee must demonstrate by a
preponderance of the evidence that he disclosed informa-
tion that he reasonably believed evidenced a violation of
any law, rule, or regulation. Id. § 2302(b)(8). If the
employee establishes that a protected disclosure was a
contributing factor, the burden shifts to the agency to
establish by clear and convincing evidence that it would
have taken the action even in the absence of the protected
disclosure. 5 U.S.C. § 1221(e)(2). In assessing whether
an agency has met its burden, the Board looks at the
three factors enumerated in Carr v. Soc. Sec. Admin., 185
F.3d 1318 (Fed. Cir. 1999): (1) “the strength of the
agency’s evidence in support of its personnel action”; (2)
“the existence and strength of any motive to retaliate on
the part of the agency officials who were involved in the
decision”; and (3) “any evidence that the agency takes
similar actions against employees who are not whistle-
blowers but who are otherwise similarly situated” (“Carr
factors”).
     Mr. Duggan argues that the Board erred in that it
failed to correctly assess evidence, failed take into account
important evidence, relied on conflicting evidence, and
relied on false evidence. He also argues that the Board
improperly required him to prove his supervisors had
more than constructive knowledge of his protected disclo-
sures to Congress. 5

    5   Mr. Duggan also contends that the Board incor-
rectly concluded he had failed to prove exhaustion of the
following claims: claims that his letter to his congressman
and his grievance letter complaining of his 2003 suspen-
sion contained protected disclosure and either those
9                                        DUGGAN   v. DEFENSE

    The Government argues that the “[B]oard’s factual
findings are based on substantial record evidence and Mr.
Duggan’s arguments to the contrary are mere disagree-
ments with the [B]oard’s credibility determinations and
weighing of the evidence.” The Government also argues
that Mr. Duggan does not offer “any countervailing evi-
dence” in conflict with the evidence relied upon by the
Board.    Finally, the Government contends that Mr.
Duggan’s arguments as to the wrong legal standard
applied by the Board are in fact “another expression of his
disagreement with the [B]oard’s factual findings.”
    The burden of establishing a reversible error in a
Board decision rests upon the petitioner. Harris v. Dep’t of
Veterans Affairs, 142 F.3d 1463, 1467 (Fed. Cir. 1998). If
substantial evidence supports the Board’s factual find-
ings, this court must affirm. 5 U.S.C. § 7703(c); Hayes v.
Dep’t of Navy, 727 F.2d 1535, 1537 (Fed. Cir. 1984).
Regarding credibility determinations, we defer to the
Board. Kahn v. Dep’t of Justice, 618 F.3d 1306, 1313 (Fed.
Cir. 2010) (“[A]n evaluation of witness credibility is
within the discretion of the Board and . . . in general, such
evaluations are ‘virtually unreviewable’ on appeal”)
(quoting King v. Health & Human Serv., 133 F.3d 1450,
1453 (Fed. Cir. 1998). The court has independently
reviewed the Board’s fact findings and has concluded, for

disclosures or those in the faxed spreadsheet resulted in
his transfer; the lowering of the promotion appraisal; and
the denial of his grievance of his suspension. However,
Mr. Duggan failed to submit to the Board any documents
that he had presented to OSC. The Board noted that
“[h]ere, [Mr. Duggan] has not shown, nor does the record
reflect, that he ever brought these additional disclosures
and personnel actions to the attention of the OSC, whose
detailed responses to him do not mention those issues.”
Because of the lack of evidence in the record, the Board’s
determination is reasonable.
DUGGAN   v. DEFENSE                                       10

the reasons explained below, that substantial evidence
supports the findings of the Board.
     First, with regard to Case A, the AJ determined that
the spreadsheet faxed by Mr. Duggan was a protected
disclosure under the WPA and was a contributing factor
that led to his two-day suspension. However, applying the
Carr factors, the AJ determined that the agency had
shown, by clear and convincing evidence, that it would
have taken the same personnel action despite the disclo-
sure. The AJ found that other DCAA employees had been
disciplined for making disparaging remarks about con-
tractors absent whistleblower allegations, that the agency
presented significant other evidence unrelated to whistle
blowing activity in support of its personnel action, and
that the main concern the agency had with regard to the
fax was not with its contents but “the negligent fashion by
which [the fax was sent], and the disparaging and unpro-
fessional nature of the comments on it.” The AJ also found
that “[a]t the hearing, [Mr. Duggan] admitted to making
the disparaging comments that were the basis for his
discipline . . . but similarly contended that they were
justified because they were factual.” In short, substantial
evidence supports the AJ’s finding that “[b]ased on the
strong evidence the agency presented in support of its
reasons for taking the action, as well [as] the fact that
appellant has not shown evidence that the deciding
official . . . had any retaliatory motive, I am left with the
firm conviction that, even in the absence of [Mr.
Duggan’s] disclosures, the agency would have issued
[him] the suspension under all the circumstances.”
    Similarly, the AJ found that the agency had shown by
clear and convincing evidence that it would have lowered
the Appellant’s promotion appraisal for the period in
question and, separately, would have reassigned him
absent Mr. Duggan’s disclosures. The AJ relied on the
11                                       DUGGAN   v. DEFENSE

testimony of the Regional Audit Manager with regard to
Mr. Duggan’s promotion appraisal who testified that “he
was aware of the misconduct underlying [Mr. Duggan’s]
suspension, and that he factored that misconduct into his
promotion appraisal score . . . [and that] he was not aware
of appellant’s alleged disclosures.” He also testified that
“misconduct such as making disparaging remarks about
colleagues and contractors is considered in assessing a
promotion appraisal because it is indicative of whether or
not the employee can foster good relations amongst col-
leagues and function as part of a team.” With regard to
Mr. Duggan’s reassignment, the AJ relied on testimony
that Mr. Duggan was reassigned not due to his disclo-
sures but because he refused to sign the required auditor
independence statement. The record contains substantial
evidence to support the AJ’s finding that the personnel
actions taken by the agency would have been taken
absent Mr. Duggan’s disclosures.
     With regard to Case B, the AJ determined that Mr.
Duggan’s “communications with the House Investigative
Counsel reveals that they clearly constituted protected
disclosures”; however, the AJ also determined that Mr.
Duggan’s claims failed because he had not established
that the officials he alleges to have retaliated against him
had any particular knowledge of his protected disclosures.
The AJ relied in part on Mr. Duggan’s testimony at trial
that his comments to the pertinent officials “consisted of
such warnings that outside oversight authorities were
interested in looking at DCAA closely, but that he did not
tell them that he had made any complaints or disclosures
to Congressional personnel or anyone else.” The AJ fur-
ther relied on the testimony of Mr. Duggan’s supervi-
sors—Ms. Hoffer and Ms. Lombardo—that they were
unaware Mr. Duggan had discussions with anyone out-
side the agency.
DUGGAN   v. DEFENSE                                      12

    Two inferences can be drawn from the record. One in-
ference is that, notwithstanding the testimony of Mr.
Duggan and his supervisors, the supervisors understood
that Mr. Duggan was engaging in, or was prepared to
engage in, whistle-blowing activity. Mr. Duggan attended
several meetings with his supervisors during which he
gave repeated warnings that oversight authorities were
watching the agency. At the time Mr. Duggan warned his
supervisors about oversight activity, the Government
Accountability Office (“GAO”) was investigating the
agency’s practices and preparing to issue a report. Mr.
Duggan’s colleague, auditor Cecilia Nguyen, knew of the
GAO investigation and forthcoming report. Because
rank-and-file employees such as Ms. Nguyen knew of that
oversight activity, it is likely that supervisors would have
been aware of it as well. Additionally, Ms. Hoffer ac-
knowledged that she was aware of oversight activity when
she testified that she had contact with the Defense De-
partment’s Inspector General (“IG”). Thus, one may infer
that, even if Mr. Duggan’s supervisors did not know of his
communications with Congress, they may well have
suspected that he was involved with various other over-
sight activities that were occurring at the time.
     The other possible inference is the one that the AJ
drew: that the supervisors had no specific knowledge of
Mr. Duggan’s whistle-blowing communications, whether
those communications were with Congress or any other
office or agency outside DCAA. Indeed, the evidence
indicates that the supervisors could have perceived that
Mr. Duggan’s warnings about oversight authorities’
scrutiny of DCAA were references only to the already-
pending GAO and IG investigations, with which Mr.
Duggan apparently had no involvement. On this point,
the AJ noted that “[b]oth Ms. Hoffer and Ms. Lombardo
testified that they were unaware that the appellant had
13                                       DUGGAN   v. DEFENSE

had any discussions with anyone outside the agency
regarding alleged malfeasance and that they did not
consider him to have disclosed any waste, fraud or viola-
tions of law during their meetings.” And, the AJ credited
this testimony in reaching his conclusion that Mr. Duggan
had failed to present adequate evidence that his supervi-
sors were aware of or motivated by any whistle-blowing
activity.
     An employee may demonstrate that a protected dis-
closure was a contributing factor in the personnel action
with circumstantial evidence by showing that (1) “the
official taking the personnel action knew of the disclo-
sure”; and (2) “the personnel action occurred within a
period of time such that a reasonable person could con-
clude that the disclosure was a contributing factor in the
personnel action.” 5 U.S.C. § 1221(e)(1). And, proof that
an official knew of a protected disclosure may be inferred
from the facts of the case even if the official did not per-
sonally witness the whistle-blowing activity. See Massie
v. Dep’t of Transp., 114 MSPR 155, 160 ¶ 15 (2010).
    While we might view the record differently than the
AJ did under a less deferential standard of review, and
draw a different inference from the testimony presented,
Congress has limited our review to a substantial evidence
inquiry. 5 U.S.C. § 7703(c). That standard of review
requires deference to the AJ’s fact finding and credibility
determinations. Hayes, 727 F.2d at 1537; Kahn, 618 F.3d
at 1313. Because the record contains sufficient evidence
to support the AJ’s finding that Mr. Duggan’s supervisors
were unaware of his protected activity, we do not disturb
the Board’s decision affirming the AJ’s findings as to
“Case B.”
DUGGAN   v. DEFENSE                                   14

                      CONCLUSION
    The record contains substantial evidence to support
the AJ’s findings and the Board’s adoption of those find-
ings.
                      AFFIRMED
                         COSTS
No costs.