Court Opinion

ID: 4019928
Source: CourtListenerOpinion
Date Created: 2016-07-28 20:02:13.222724+00
Date Added: 2024-06-11T14:18:29.952895
License: Public Domain

In the United States Court of Federal Claims
                                           No. 15-418C
                                      (Filed: July 28, 2016)

****************************
                                                     *
MARK R. FULLER,                                      *         Military Discharge; Judgment
                                                     *         on the Administrative Record;
                                                     *         Legal Hold; Retirement; Drop
               Plaintiff,                            *         from Rolls; Military Control;
                                                     *         Supervised Release;
       v.                                            *         SECNAVINST 1620.6C.
                                                     *
THE UNITED STATES,                                   *
                                                     *
               Defendant.                            *
                                                     *
                                                     *
****************************

        David P. Sheldon, 1100 New Jersey Ave, Suite 720, Washington, DC 20003, for
Plaintiff.

       Benjamin C. Mizer, Robert E. Kirschman, Jr., Martin Hockey, and Daniel S. Herzfeld,
United States Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box
480, Ben Franklin Station, Washington, D.C. 20044, for Defendant. Major Dawn M. Steinberg,
Officer of the Judge Advocate General, Department of the Navy, of Counsel.
       __________________________________________________________________

                             OPINION AND ORDER
       __________________________________________________________________

WILLIAMS, Judge.

        This military pay case comes before the Court on the parties’ cross-motions for judgment
on the Administrative Record (“AR”). Plaintiff challenges the decision of the Board for
Correction of Naval Records (“BCNR”) denying his request for reinstatement of his retirement
benefits, back pay, and an honorable discharge. Plaintiff was dropped from the rolls of the
Marine Corps as a result of his incarceration in a civilian penitentiary, after pleading guilty to
two felony counts involving financial transactions.
        Because the Marine Corps properly dropped Plaintiff from the rolls and correctly
determined that he was eligible for, but not entitled to, retirement benefits, the BCNR did not act
arbitrarily, capriciously, or illegally in denying Plaintiff’s request for relief. As such,
Defendant’s motion for judgment on the AR is granted.
                                        Findings of Fact1
        Plaintiff began his career as an enlisted Marine in 1992, and served for two years before
being commissioned as a Reserve Officer. From February 2005 until September 2005, Plaintiff
was deployed to Iraq. At that time Plaintiff was a Major. During Plaintiff’s deployment, he
mailed 20 envelopes to his wife for storage in their home safe. Plaintiff’s wife reported this to a
confidential informant because she believed the envelopes contained cash based on their size and
shape. After his return from Iraq, Plaintiff made a series of deposits, each beneath mandatory
reporting amounts, into accounts in several different banks. On January 9, 2006, Plaintiff
attempted to deposit $7,700 with a Navy Federal Credit Union, but when the bank informed him
it would generate a currency transaction report, he canceled the deposit.
       On May 19, 2009, Plaintiff’s retirement application was approved with a predicted
retirement date of July 1, 2009. However, on May 25, 2009, the Naval Criminal Investigation
Service (“NCIS”) initiated an investigation into Plaintiff’s conduct during his 2005 Iraq
deployment. As a result of the investigation, Plaintiff’s command placed him on “legal hold”
commencing on June 5, 2009. Being placed on legal hold freezes all personnel actions, such as
promotion, retirement, and moving to a new command. While on legal hold, Plaintiff continued
working in a paid status as a Marine while stationed in Arizona, but his retirement was held in
abeyance until the investigation and any disciplinary actions were completed.
        On June 25, 2009, Plaintiff requested to be released from legal hold. On July 16, 2009,
after NCIS reported the results of its investigation to Plaintiff’s command, the Marine Corps
denied Plaintiff’s request to be released from legal hold, finding that the NCIS investigation
sufficiently established the basis for the legal hold.
        Nearly a year later, on May 11, 2010, the Department of Justice (“DOJ”) indicted
Plaintiff on 22 counts of violating 31 U.S.C. § 5324(a)(3), “Structuring Financial Transactions
Through A Domestic Financial Institution.” AR 46-51. On August 4, 2010, Plaintiff pled guilty
to two counts of knowingly and purposely circumventing reporting and recordkeeping
requirements in structuring financial transactions, a felony. Plaintiff was sentenced to two terms
of confinement, served concurrently, for one year and one day, and was fined $198,510. As part
of the arrangement, DOJ dropped the remaining 20 counts pending against Plaintiff. On
February 4, 2011, Plaintiff began his term of confinement and remained in prison until his
release on December 16, 2011.
         During Plaintiff’s confinement, on June 22, 2011, the Commander of Marine Forces in
Central Command submitted a recommendation to drop Plaintiff from the rolls. Either the
President or the Secretary of the Navy may complete the action of dropping an officer from the
rolls, and the Marine Corps’ Deputy Commandant for Manpower and Reserve Activity normally
initiates the procedure. The action to drop an officer from the rolls is discretionary and is
authorized once an officer has been sentenced to confinement and that sentence has become
final. SECNAVINST 1920.6c Encl. 4, at 6. There is no required timeline for the service to
complete the process. Because Plaintiff pled guilty and received two concurrent sentences in a

1
        These findings of fact are derived from the Administrative Record (“AR”). Additional
findings of fact are in the Discussion. The Court does not correct grammatical or typographical
errors in quotations from the record.

                                                2
federal penitentiary, the Deputy Commandant for Manpower and Reserve Affairs recommended
to the Secretary of the Navy that Plaintiff be dropped from the rolls.
        Once an officer is dropped from the rolls, no certificate of discharge is issued, and the
service member does not receive a characterization of service (e.g. honorable, dishonorable). An
officer’s characterization of service controls which benefits that officer receives and at what
level. While being dropped from the rolls does not nullify any prior service, the officer is
directly severed from all ties with his branch of service and loses his eligibility for retirement.
        On November 28, 2011, while still confined, Plaintiff was notified he was being dropped
from the rolls. Shortly thereafter, on December 16, 2011, Plaintiff was released from
confinement and began two years of supervised release. After consulting with a civilian
attorney, on January 4, 2012, Plaintiff submitted a response to the recommendation to drop him
from the rolls, arguing that he was inappropriately kept on legal hold beyond his approved
retirement date and would unjustly be denied retirement pay if dropped from the rolls. After
submitting his response, Plaintiff submitted a request to retire voluntarily, which, if granted,
would have terminated any future administrative actions against him. In response, the Marine
Corps acknowledged that Plaintiff had the requisite service time to be eligible for retirement and
that he had received approval to be retired at the discretion of the President. However, the
Marine Corps distinguished this approved retirement request from an entitlement to retirement
pay. Noting that officers serve at the pleasure of the President, the Marine Corps found that
Plaintiff’s continued legal hold was proper due to the NCIS investigation and that regulation
required continuation of the hold until the Deputy Commandant for Manpower and Reserve
Affairs decided to retain Plaintiff or the Secretary of the Navy separated him for substantiated
misconduct.
       On June 22, 2012, based on a finding of substantiated misconduct, the Secretary of the
Navy approved dropping Plaintiff from the rolls. Following this decision, on July 9, 2012, the
Deputy Commandant for Manpower and Reserve Affairs denied Plaintiff’s request for voluntary
retirement in light of Plaintiff’s misconduct and prison time. Ultimately, Plaintiff was
discharged from the Marine Corps effective August 13, 2012.
        After being discharged, on December 5, 2012, Plaintiff submitted an application to the
BCNR seeking correction of his military records and challenging the Navy’s decision to drop
him from the rolls. Plaintiff asserted that he was entitled to retirement pay and that his legal hold
violated regulations. Additionally, Plaintiff argued that because he was returned to military
control, he no longer could be subject to a drop-from-the-rolls action.
        The Commandant of the Marine Corps’ Judge Advocate General (“JAG”) issued an
advisory opinion to the BCNR stating that Plaintiff’s approved retirement request only gave him
a predicted date to transition, and that, until Plaintiff’s retirement was actually effected at the
discretion of the President, he was not entitled to retirement pay. The JAG further reasoned that
Plaintiff was not returned to military control because upon his release from confinement, he
immediately began two years of supervised release and could not leave Arizona or be deployed,
transferred, or otherwise mobilized, thus preventing him from serving a “useful purpose” to the
Marine Corps.

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        On November 21, 2013, the BCNR denied Plaintiff’s application for correction of his
Naval Record, stating that the evidence failed to “establish the existence of probable material
error or injustice.” AR 12. The BCNR “substantially concurred” with the JAG’s advisory
opinion and did not offer additional reasoning. Id. Following the BCNR’s denial of his
application, on April 24, 2015, Plaintiff filed his complaint with this Court, requesting
reinstatement of his retirement, deletion of negative entries from his record, and back pay.

                                           Discussion
Jurisdiction
       The Tucker Act, 28 U.S.C. § 1491(a)(1), provides that this Court
               shall have jurisdiction to render judgment upon any claim against
               the United States founded either upon the Constitution, or any Act
               of Congress or any regulation of an executive department, or upon
               any express or implied contract with the United States, or for
               liquidated or unliquidated damages in cases not sounding in tort.
The Tucker Act does not create a substantive right for money damages against the United States,
but rather is a jurisdictional statute. United States v. Testan, 424 U.S. 392, 398 (1976). A
plaintiff must show that he is entitled to money damages from an additional source of substantive
law. Jan’s Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299, 1306 (Fed. Cir. 2008).
        Under the Military Pay Act, members of the military on either active duty or participating
in a full-time training exercise are entitled to the basic pay associated with their assigned pay
grade. 37 U.S.C. § 204(a)(1)-(2) (2013). This statute provides jurisdiction for this Court to hear
claims brought by military personnel challenging an unlawful discharge and seeking lost pay.
Martinez v. United States, 333 F.3d 1295, 1303 (Fed. Cir. 2003). Jurisdiction in this Court is
proper in wrongful discharge suits because “[i]f the discharge was wrongful the statutory right to
pay continues . . .” Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir. 1997). Additionally,
in matters of retirement pay, this Court has jurisdiction because under 10 U.S.C. § 1552(c) a
plaintiff is entitled to “payment of claims consequent upon the correction of military records,”
including correction of retirement status. Mitchell v. United States, 930 F.2d 893, 896 (Fed. Cir.
1991); see also 10 U.S.C. § 1552(c) (2015).

Standard of Review
         Motions for judgment on the administrative record are governed by Rule 52.1 of the
Rules of the United States Court of Federal Claims. Under Rule 52.1, the parties are limited to
the administrative record, and the Court makes findings of fact as if it were conducting a trial on
a paper record. See Bannum, Inc. v. United States, 404 F.3d 1346, 1356 (Fed. Cir. 2005);
Kennedy v. United States, 124 Fed. Cl. 309, 329 (2015); Boyle v. United States, 101 Fed. Cl.
592, 595-96 (2011). When cross-motions for judgment on the administrative record have been
filed, the Court “considers ‘whether given all the disputed and undisputed facts, a party has met
its burden of proof based on the evidence in the record.’” Volk v. United States, 111 Fed. Cl.
313, 324 (2013) (quoting DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 661
(2010)).

                                                4
        The party challenging the decision of a correction board has “the burden of
demonstrating by cogent and clearly convincing evidence that the correction board acted
arbitrarily, capriciously, contrary to law, or that its determination was unsupported by substantial
evidence.” Arens v. United States, 969 F.2d 1034, 1037 (Fed. Cir. 1992). There is a “strong, but
rebuttable, presumption that the administrators of the military, like other public officers,
discharge their duties correctly, lawfully and in good faith.” Porter v. United States, 163 F.3d
1304, 1316 (Fed. Cir. 1998) (citations and quotation marks omitted); Dodson v. United States
Gov’t, Dep’t of Army, 988 F.2d 1199, 1204 (Fed. Cir. 1993) (citing Arens, 969 F.2d at 1037)
(stating presumption that “the military is entitled to substantial deference in the governance of its
affairs”).

Plaintiff Was Not Entitled to Retirement Pay at the Time He Was Dropped From the Rolls
        Plaintiff argues that the BCNR’s decision was arbitrary and capricious because once he
received his approved application for retirement, he was entitled to retirement pay, and
SECNAVINST 1920.6c prevented him from being dropped from the rolls. The SECNAVINST
provides that if Plaintiff was entitled to retirement pay and had not committed a crime related to
treason as listed in 5 U.S.C. § 8312(a)-(c), he could not be dropped from the rolls.
SECNAVINST 1920.6c Encl. 4, at 7. Plaintiff and Defendant concur that Plaintiff’s crimes do
not fall under 5 U.S.C. § 8312(a)-(c). Resolution of the instant dispute turns on whether an
approved application to retire creates an entitlement to retirement pay. Pl.’s Mot. for J on the AR
17-19; see Def.’s Mot. for J. on the AR 15-18.
       Section 6323(a)(1) of Title 10 provides:
               An officer of the Navy or the Marine Corps who applies for
               retirement after completing more than 20 years of active service, of
               which at least 10 years was service as a commissioned officer,
               may, in the discretion of the President, be retired on the first day of
               any month designated by the President.
10 U.S.C. § 6323(a)(1) (2013) (emphasis added).
        There are no ambiguous terms in 10 U.S.C. § 6323. The plain language is open to one
interpretation: an officer’s retirement is effective only if the President exercises his discretion
and approves the officer’s application for retirement and designates the month the officer’s
retirement is to commence. Although Plaintiff submitted his application for retirement, and it
was approved by the Commandant of the Marine Corps, that approval was not the final act
necessary to effect either his entitlement to retirement or his actual retirement under Section
6323(a)(1). When Plaintiff’s application was approved, he only had a predicted retirement date,
as his retirement still depended upon the President favorably exercising his discretion and
designating a retirement date for Plaintiff.2 Defendant correctly argues that the Navy “never

2
       In arguing that an officer is entitled to retirement pay once his retirement application has
been approved, Plaintiff relies on two cases, Ancman v. United States, 77 Fed. Cl. 368, 376
(2007) and Piotrowski v. United States, No. 13-760C, 2014 WL 7476033, at *8-10 (Fed. Cl.,
Dec. 30, 2014). However, the cases are not binding on this Court and are inapposite. In
Ancman, both plaintiffs were already retired before filing their claims, which focused on the

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retired Plaintiff” even though Plaintiff’s application for retirement was approved, because
Plaintiff’s retirement was properly held in abeyance and approval of his application did not
entitle him to retirement pay. See Def.’s Resp. 11.

Plaintiff was Legitimately Placed on Legal Hold
        Relying on the Manual for Courts-Martial, Plaintiff raises a technical argument - - that
this Manual constituted the legal authority for his legal hold but only provided jurisdiction over
an officer “when action with a view to a trial of that person” was taken. Plaintiff contends that
an NCIS investigation was not an action “taken toward trial,” because there was no
apprehension, imposition of restraint, or charges. See AR 26-27, 39. Plaintiff continues that if
he had not been illegally placed on legal hold, he could not have been dropped from the rolls
because his retirement would have become effective once his application was approved.
       The Manual for Courts-Martial provides:
               (c) Attachment of jurisdiction over the person.
               (1) In general. Court-martial jurisdiction attaches over a person
               when action with a view to a trial of that person is taken. Once
               court-martial jurisdiction over a person attaches, such jurisdiction
               shall continue for all purposes of trial, sentence, and punishment,
               notwithstanding the expiration of that person’s term of service or
               other period in which that person was subject to the code or trial by
               court-martial.
Rules for Courts-Martial 202(c)(1) (Joint Servs. Comm. On Military Justice 2012) (emphasis
added).
         Defendant argues that the NCIS investigation did constitute an action “with a view to
trial” relying on United States v. Self, an opinion of the United States Court of Military Appeals.
13 M.J. 132 (C.M.A. 1982). In Self, the court held that an investigation, even without a resulting
court-martial, was a sufficient basis for legal hold. Id. at 137-38. The court reasoned:
               [a]ny acts of military officials that authoritatively presage a court-
               martial, when viewed in light of surrounding circumstances, are
               surely sufficient under paragraph 11d of the Manual for Courts-
               Martial to authorize retention on active duty for purposes of trial.
               Even if a trial by court-martial does not eventuate for one reason or
               another, clairvoyant positiveness has never been required.
 Id. at 138.

amount of retirement pay, not entitlement to retirement pay. In Piotrowski, the plaintiff’s
retirement was originally denied because he had not served for the required term. Ultimately,
Piotrowski was convicted at a court-martial resulting in a forfeiture of all pay and allowances,
which would have resulted in a revocation of retirement benefits even if he had been retired
previously. Neither case involved a drop from the rolls or a determination of when an officer
becomes entitled to retirement pay.

                                                 6
        Based upon Self and the JAG’s analysis, the Commander of Marine Forces in Central
Command reasonably denied Plaintiff’s request for release from legal hold finding that an NCIS
investigation constituted “an action with a view to trial.” Here, as in Self, NCIS’ investigation
into Plaintiff’s conduct in Iraq was an initial step toward a court-martial, and although Plaintiff
was ultimately prosecuted by civilian authorities in lieu of being court-martialed, the Marine
Corps had the authority to place Plaintiff on legal hold.
        Indeed, the Marine Corps was required to maintain Plaintiff on legal hold until the
investigation was completed. As the Deputy Commandant for Manpower and Reserve Affairs
stated in his recommendation to drop Plaintiff from the rolls, “commissioned officers serve at the
pleasure of the President, and in the case of substantiated misconduct, will remain on legal hold”
until either the Deputy Commandant for Manpower and Reserve Affairs retains the officer, or
the Secretary of the Navy separates the officer for the substantiated misconduct. AR 90-91; see
SECNAVINST 1920.6C Encl. 2, at 1; Marine Corps Manual for Legal Admin. Ch. 7, at 4-30.
      Further, the Marine Corps Manual for Legal Administration required the Marine Corps to
hold Plaintiff’s retirement in abeyance once the Corps was notified of Plaintiff’s alleged
misconduct. Paragraph 4009 of this manual provides:
               Upon receipt of the required notification of officer misconduct or
               substandard performance of duty . . . the Director, Manpower
               Management . . . in conjunction with local administrative centers,
               will hold in abeyance all personnel actions (such as promotion,
               retirement, separation, transfer to the Reserve component,
               PCS/PCA orders, or PEBs) relevant to reported officers.
Marine Corps Manual for Legal Admin. Ch. 7, at 4-30 (emphasis added). The Marine Corps
Manual for Legal Administration is mandatory and requires the legal hold to remain in effect so
as to “maintain the status quo until these matters are resolved by cognizant commanders and/or
civilian authorities.” Id. As such, the Marine Corps properly maintained Plaintiff on legal hold
and held Plaintiff’s retirement action in abeyance through his incarceration and supervised
release, which ended on December 17, 2013.
        Additionally, Plaintiff argues that turning primary responsibility of his case over to the
U.S. Attorney’s office was an “abuse of discretion,” because the transfer of primary authority
over his case to the Department of Justice (“DOJ”) terminated court-martial jurisdiction.
However, in turning the investigation and judicial proceedings over to DOJ, the Marine Corps
was following a Memorandum of Understanding (“MOU”) and was not relinquishing its right to
take further administrative or disciplinary measures.
        Indeed, the MOU between the Department of Defense (“DOD”) and DOJ required DOD
to turn primary responsibility of Plaintiff’s case over to DOJ because Plaintiff’s violation of 31
U.S.C. § 5324(a)(3) had to be tried in a United States District Court. See Dep’t of Defense
Instruction 5525.07 (June 18, 2007) (“DoDI 5525.07”). DoDI 5525.07 states that “[DOJ] has
primary responsibility for enforcement of federal laws in the United States District Courts” and
that for cases relating to “[f]rauds against the Department of Defense and Theft and
Embezzlement of Government Property . . . criminal investigative responsibility will be
determined by the Department of Justice in consultation with the Department of Defense.” DoDI

                                                7
5525.07 Encl. 2, at 5, 7. The MOU further provided that “[n]othing in this Memorandum limits
the Department of Defense investigations conducted in support of administrative actions . . . .”
Id. at 11. As such, the Marine Corps retained authority to continue its administrative
proceedings to determine Plaintiff’s characterization of service for retirement or the drop-from-
the-rolls procedure pending the outcome of Plaintiff’s civilian legal proceedings.
The Navy Reasonably Declined to Return Plaintiff to Military Control Following His
Confinement
       Plaintiff argues that the governing SECNAVINST prohibited the Marine Corps from
dropping him from the rolls because he was returned to military control following his release
from prison.
       This SECNAVINST provides:
               a. Under sections 1161, 12684, and 6408 of reference (a), the
               President or SECNAV, depending upon the applicable statute, may
               drop from the rolls of an Armed Force a Regular or Reserve officer
               who
                                             *   *   *
               (2) has been sentenced to confinement in a Federal or State
               penitentiary or correctional institution after having been found
               guilty of an offense by a court other than a court-martial or other
               military court, and whose sentence has become final,
                                             *   *   *
               b. Action to initiate dropping officers from the rolls shall normally
               be undertaken by [Chief of Navy Personnel] or the [Deputy
               Commandant of the Marine Corps for Manpower and Reserve
               Activity], on a case-by-case basis, after a finding that one or more
               of the above conditions exist, and the return of the officers to
               military control for processing for separation for cause under this
               instruction will serve no useful purpose.
SECNAVINST 1920.6C Encl. 4, at 6.
        Plaintiff has not established a violation of this regulation. Rather, because Plaintiff pled
guilty to two felony counts and served a prison sentence, the Marine Corps had the discretion to
drop him from the rolls and determine that returning Plaintiff “to military control for processing
for separation for cause under this instruction [would] serve no useful purpose.” Id. Contrary to
Plaintiff’s argument, he was not somehow returned to military control and required to be
processed for separation merely because he was in an active duty status while on supervised
release. The Marine Corps initiated the drop-from-the-rolls procedure after Plaintiff was
convicted, sentenced, and had exhausted his appeal opportunities. AR 88-89. The Assistant
Secretary of the Navy reasonably determined that returning Plaintiff to military control and

                                                 8
processing Plaintiff for separation for cause would not have served a useful purpose to the
Marine Corps. AR 89-91.

                                       Conclusion
       Defendant’s Motion for Judgment on the Administrative Record is GRANTED. The
Clerk of Court is directed to enter judgment accordingly.

                                                 s/Mary Ellen Coster Williams
                                                 MARY ELLEN COSTER WILLIAMS
                                                 Judge

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