Court Opinion

ID: 9471247
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:27:58.356397+00
Date Added: 2024-06-11T17:42:19.793470
License: Public Domain

NICHOLS, Circuit Judge,
concurring.
I agree with the judgment and join in it. Chief Judge Markey’s able opinion I join in except where it is inconsistent with what follows.
First, I believe it is ill-advised to limit our holding to applicants for disability annuity who have themselves voluntarily retired from active employment because of disability. (a) The statutory preclusion of judicial review, relied on by the court, 5 U.S.C. § 8347(c), itself draws no such distinction, except in the category, not here involved, of involuntary retirement for mental disability. For this court to draw one belies our own conclusion that preclusion statutes mean what they say. (b) The distinction we draw will have unfortunate consequences in that persons of marginal disability will hang in and insist on involuntary retirement so as to safeguard their annuity rights, to the detriment of the federal service, and (c) the factual basis of the statement that Mr. Lindahl is a voluntary retiree is uncertain. It is clear he did not want to be retired except on the condition that he receive the annuity. That is why we have this lawsuit. If he put in an application for retirement that failed to make clear the precondition he had in mind, that may be dispositive of the present case, but only because nobody focused on the voluntary nature of the retirement, as an issue, and nobody took the trouble to clarify the record. Who said what to whom on what date is quite obscure. Nor is it clear whether Mr. Lindahl was adequately warned that by applying as he did, he sacrificed his active duty pay without obtaining assurance as to disability annuity. I would prefer to assume in favor of Mr. Lindahl that the retirement was involuntary except insofar as he agreed with management that he was in fact disabled, and differentiate the case to that extent only from those in which the much discussed “Scroggins formula” was invented and applied.
The chickens will come home to roost in a whole series of cases in which it will be alleged that the “Scroggins formula” survives and has an area for application, despite the Lindahl decision, because the disability retirement was de jure involuntary, or actually involuntary in view of the course of discussion of the applicant’s physi*401cal problems, between him and management.
Second, having noticed and acknowledged that decisions of other circuits are in conflict as to whether the “Scroggins formula” undercuts the finality or preclusion language of § 8347(c), the court moves along without stating why the decisions applying the preclusion are preferred over those applying the formula. Though we are now to be, under the Supreme Court, the paramount authority to decide the issue under the Federal Courts Improvement Act of 1982, and none of these decisions bind us, they were rendered by courts having jurisdiction at the time, courts of last recourse as of right. None of the decisions, probably were products of such agonizing introspection as ours will be. None were rendered in banc. It is usual, however, for courts, federal and other, raised under our common law traditions, to regard decisions by other courts of equal authority as part of the problem to be dealt with, to be followed or explained away. I do not think the fact they are in conflict with each other is the only thing about them one need notice. There is a somewhat wooden quality about most of them. Those adhering to-the formula adhere also to the often expressed judicial horror of leaving any executive branch decision immune to judicial review, without notice of the fact that this horror is much mitigated when it is a question of a money claim against the United States, as an annuity claim is, even apart from statutory preclusions. United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976). Those adhering to the preclusion likewise fail to notice how far the horror has often carried other courts, despite other express and implied statutory preclusions. The proper technique of weighing this horror against a statutory preclusion is a subject nobody seems willing to discuss, and perhaps wisely. I come out with the unsurprising conclusion that the decisions I agree with as to result are better considered, and I have at least one articulable reason for this which I will state infra.
A third and more serious objection I have to our generally able decision, is that it too ignores the striking contrast the “Scroggins formula” presents to the techniques of our highest court, and other courts, in dealing with “finality language” in other statutory contexts, and alleged to bar or curtail the judicial review that would otherwise occur.
The World War II Renegotiation Acts, 50 U.S.C. App. § 1191 and ff, both contained, originally or as amended, provisions (subsection (e) of § 1191) that a party aggrieved by an order to eliminate excessive profits could file a petition with the Tax Court:
Upon such filing such court shall have exclusive jurisdiction, by order, to finally determine the amount, if any, of such excessive profits * * * and such determination shall not be reviewed or redetermined by any court or agency.
In Lichter v. United States, 334 U.S. 742, 68 S.Ct. 1294, 92 L.Ed. 1694 (1947), the Supreme Court, though viewing the Tax Court as an administrative agency, upheld the constitutionality of these arrangements as a war measure under the constitutional war power. In United States v. California Eastern Line, Inc., 348 U.S. 351, 75 S.Ct. 419, 99 L.Ed. 383 (1955), the Court gave the finality language a literal interpretation, holding it did not extend to questions as to what contracts were renegotiable, even though this necessarily underlay the issue of “amount.”
The Renegotiation Act of March 23,1951, 50 U.S.C. App. § 1211 and ff, set up a scheme that was similar so far as concerned the role of the Tax Court, and in § 1218 had a similar finality clause. That Act was extended several times regardless of whether the Lichter grounds existed, i.e., a state of all-out or total war. The circuits that considered the question refused to hold that any exception existed to the finality language, except review on “constitutional or jurisdictional grounds.” ConsolidatedHammer Dry Plate & Film Co. v. Renegotiation Board, 375 F.2d 591 (7th Cir.1967); Boeing Company v. Renegotiation Board, 325 F.2d 885 (9th Cir.), cert. denied, 377 U.S. 923, 84 S.Ct. 1220, 12 L.Ed.2d 215 (1963). The rule then was that “amount” *402determinations, whether they related to fact or law, were reviewable only on “constitutional or jurisdictional” grounds. Whatever that was held not an “amount” determination was reviewable the same as any Tax Court decision by a court of appeals, when it concerned a federal tax. The Seventh Circuit, in its case, considered whether some “amount” holdings were “so arbitrary and capricious as to raise a constitutional issue” and stated they were not, but also said that its review of them was gratuitous. (375 F.2d at 594.)
All this is ancient history as the last extension of the Renegotiation Act has long since expired, but it does throw some light on the technique of applying finality clauses.
Article 76 of the Uniform Code of Military Justice, 10 U.S.C. § 876, provides that court-martial sentences, after proper review by military tribunals are “final and conclusive” and “all action taken pursuant to those proceedings [is] binding upon all * * courts * * * of the United States * * *.” In Schlesinger v. Councilman, 420 U.S. 738, 95 S.Ct. 1300, 43 L.Ed.2d 591 (1975), it is held that this did not necessarily bar an Article III court from intervening by way of habeas corpus, injunction, or back pay suit in case of an unconstitutional or otherwise void court-martial. United States v. Augenblick, 393 U.S. 348, 89 S.Ct. 528, 21 L.Ed.2d 537 (1969) previously had reversed two decisions of the former Court of Claims that had sustained collateral attacks on court-martials by way of back pay suits, but paid insufficient respect to the finality language. It seems fair to say the distinguished record of the Court of Claims may have displayed such insufficient respect, not alone in enunciating the “Scroggins formula.”
United States v. Wunderlich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113 (1951) reports an earlier losing encounter by the former Court of Claims with finality language. In that case the issue was the respect to be given to language then standard in government contracts, making decisions of contracting officers final in all cases of disputes with contractors, whether on issues of fact or of law. The Court of Claims by long and generally accepted practice had read into this language an implied exception for decisions “so grossly erroneous as to imply bad faith,” e.g., Levering & Garrigues Co. v. United States, 71 Ct.Cl. 739 (1931). The Supreme Court, in a decision that caused many tremors, held that the only permissible exception was actual fraud. Congress, by statute, reinstated the previous rule. 41 U.S.C. § 321, 322. See history of this issue in Hoel-Steffen Construction Co. v. United States, 684 F.2d 843 (Ct.C1.1982) in which it is pointed out that there is necessarily a great difference between contract and statutory finality of decision, the former not affecting the waiver of sovereign immunity and consent to be sued as the latter often does.
Allowance of disability annuities to war veterans is a case decidedly parallel to the civilian annuities we have to deal with here.
The finality language in 38 U.S.C. § 211 bars judicial review of Veteran Administration decisions concerning veterans’ benefits. It is not the same as § 8347(c) inasmuch as it is not limited to issues of disability and dependency and court review is expressly referred to. For whatever the point is worth, it may be noted that the Court of Claims never even in dictum pronounced any “Scroggins formula” type of exception to finality and the complete exclusion of the court from the area is rather assumed than asserted. Cases are, e.g., Martin v. United States, 197 Ct.Cl. 1062 (1972); Jennings v. United States, 566 F.2d 1189, 214 Ct.Cl. 789 (1977); Jump v. United States, 164 Ct.Cl. 453 (1964). In Mitchell v. United States, 664 F.2d 265 (Ct.C1.1981), aff’d, — U.S. -, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983), the Court of Claims appears to recognize in dictum at 268 that this finality language provides “against any judicial scrutiny at all.”
The Supreme Court in Johnson v. Robinson, 415 U.S. 361, 94 S.Ct. 1160, 39 L.Ed.2d 389 (1974), held that § 211 did not bar judicial consideration as to the constitutional validity of provisions of the laws provid*403ing veterans’ benefits, a conclusion based on the bare language of § 211 as well as its purposes as shown by legislative history. The decision is not therefore a matter of reading unstated exceptions into the finality language itself. Justice Brennan’s care in framing the majority opinion so as not to do this is noteworthy.
The Supreme Court handed down in United States v. Erika, Inc., 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982) a decision which has a powerful impact upon the matter at hand. It deals with Medicare reimbursement to health care providers. These are in two kinds, Medicare A and B. Medicare A is primarily for hospital care and hospitals are paid by the government through an intermediary. Medicare B is optional for beneficiaries, is primarily for doctors’ fees and other nonhospital health care expenses. Annuitants who elect the coverage pay a small amount which entitles them to be reimbursed by the government for payments which they make direct to the providers, or they may assign their claims to providers who collect from the government as assignees. Judicial review in the district courts only under Medicare A is expressly allowed, in cases of dispute as to the compensation allowable to providers. Distinctions are made as to the extent of administrative review as to issues of eligibility, and quantum under B. Congress is shown by the legislative history to have omitted Medicare B claims from judicial review because it expected most of them to be too small to take the time of the courts, overlooking that a concern such as Erika might be assignee of hundreds of claims and thus have large sums at stake. If Congress had said nothing about review, Erika and all other providers could have sued in the Court of Claims under the Tucker Act, 28 U.S.C. § 1491. The Supreme Court held, however, that the fashioning of judicial remedies for the A cases with nonjudicial review in the B cases, implies an intent that this is to be all. Such an implication is drawn from the bare text even before it is confirmed by the legislative history, showing the reason for the difference as stated above.
Thus there can be implied preclusions of judicial review where the finality of the administrative decision is made just as absolute as when the preclusion is express. The reversed decision below, Erika, Inc. v. United States, 634 F.2d 580, 587, 225 Ct.Cl. 252, 261 (Ct.C1.1980), undertook to use the “Scroggins formula,” urging in support of its position that the “formula” cases, several of which it cited, showed that even an express preclusion allowed its exceptions though unrecognized in the statute itself; still more then would this be true of a merely implied preclusion. In Erika the Supreme Court teaches that express and implied preclusions are equally effective.
Congress has stated the same view. 5 U.S.C. § 702, Pub.L. No. 94-574, Act of October 21,1976, is a broad waiver of sovereign immunity and consent to be sued in the federal courts in cases “seeking relief other than money damages.” It provides that it does not “affect other limitations on judicial review” or confer “authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief that is sought.” The legislative . history, H.Rep. No. 94-1656, 5 U.S. Code Cong. & Adm.News, 94th Cong.2d Sess. 1976, p. 6121, shows that Congress considers a statute impliedly precludes judicial review if it contains any “implied preclusions” and description of one method of review impliedly precludes other methods. By this reasoning, the provision in § 8347(d) for judicial review of involuntary disability retirements for mental condition would preclude judicial review of other disability retirement decisions even without the finality language in § 8347(c). Congress has put two locks on the door.
The circuit court decision adopting the “Scroggins formula” in their decisions, relied on by the dissent herewith, in my view reveal how ill considered they are by their failure to deal with Erika. The OPM rightly relies on Erika as the strongest kind of Supreme Court support for its motion, citing it five times in its initial brief. Yet our majority opinion ignores Erika for reasons unfathomable by me.
*404In Erika we have the same court that first employed the “Scroggins formula” to undercut statutory finality, or express preclusion of judicial review, then for the first time after many years, proposing to extend the formula to another statutory preclusion, this time an implied one. At least I suppose that was the intent, though this was not expressly stated. The Supreme Court shoots this aircraft down in flames. If the formula still stands in the area of disability retirement, it stands as an odd anomaly which may not be, and never has been, extended to parallel situations. The law normally dislikes oddities of that kind, but seeks to regularize and harmonize. One is reminded of the rule once enforced by Chief Justice Rugg upon the Massachusetts Supreme Judicial Court that it was never to overrule a decision of its own that on later reflection it perceived to be erroneous. It was only to restrict the disfavored precedent “to its own peculiar facts,” a signal to the bar never to cite the case again.
The technique of applying a statutory preclusion of judicial review is not, however, the simple open-and-shut or black- and-white issue it is perceived to be in the able majority opinion. As stated by Justice Brandeis years ago, Lynch v. United States, 292 U.S. 571, 586, 54 S.Ct. 840, 846, 78 L.Ed. 1434 (1934), a statute denying a constitutional right will not be read as a preclusion to save its constitutionality, but will only be so read if the language of Congress is unequivocal and no other interpretation is possible. This will rarely occur. The apparently flat and sweeping preclusion of § 876 of the Uniform Code of Military Justice is read in Schlesinger v. Councilman, supra, as allowing all sorts of collateral attacks in civilian courts if an alleged constitutional violation is grave enough or if the court-martial decision is simply void. (As to what is or was a void court-martial see II Court of Claims History (1978) at 49.) This result is much aided by the legislative history showing that the language was never expected to be a barrier to habeas corpus in appropriate cases. In Johnson v. Robinson, supra, recourse is had to legislative history material to show that, despite sweeping language, preclusion of inquiry by a court as to the constitutionality of a statutory provision affecting veterans’ rights was not intended.
United States v. California Eastern Line, Inc., supra, shows a technique of literal construction of a statutory preclusion to save judicial review. Thus a preclusion of review as to “amount” of excessive profits determined in renegotiation is held not to preclude review as to what contracts are renegotiable, though the answer will govern “amount.” In Polos v. United States, 621 F.2d 385, 391-92, 223 Ct.Cl. 547, 559-60 (1980), the suggestion is made or implied that the decisions as to disability and dependency, given finality by § 8347(c), are decisions as to questions of fact, whereas the questions saved for judicial review by the “Scroggins formula” are questions of law. The idea is spelled out more expressly in Lancellotti v. OPM, 704 F.2d 91 (3d Cir. 1983). That case identifies a situation where “disability” vel non depends on the answer to a legal question: construction of a statutory provision for termination of status as a disability annuitant upon one’s reaching a specified level of income from wages or self-employment.
This kind of reasoning certainly echoes that found in the Supreme Court precedents in their technique of construing statutory finality clauses. However, I do not think it is valid here because it deals with only one of what I have called double locks: the express preclusion but not the implied one. The interpretation of the decisions given finality in § 8347(c) as those establishing facts only is possible but not required by the language of § 8347(c) standing alone, and is contradicted by the implied preclusion in § 8347(d), with the cross-reference from (c) to (d) added in 1980.
Mr. Lindahl’s principal complaint of the MSPB decision is that it misallocated the burden of proof which he says should have been placed on the OPM, not on him. He next says it was a violation of “due process” to discharge him while his application to the OPM for disability retirement was pending undecided. This appears to be actually a *405complaint of failure to follow a governing regulation. Thirdly, he says the decision of the MSPB that he was not disabled is unsupported by substantial evidence. The first two issues would arguably be saved from dismissal by the “Scroggins formula” which he invokes, but not if it is repudiated as a rule of decision in this court, as I favor. The third issue is not possibly saved for him even by the “Scroggins formula” since that formula does not provide for substantial evidence review. The dissent therefore should concede dismissal of that issue, to be consistent with the formula.
In summary, my conclusion is that preclusion of judicial review is never absolute in life, but at the Supreme Court level review has never' been practiced in defiance of preclusions as much as the “Scroggins formula” would require. The formula is at best a peculiar anomaly invoked in but one class of case. Virtually it is an invitation to counsel to litigate any issue of statutory construction or interpretation of a regulation. As the Chief Judge writes, it was born of a judicial reluctance to be wholly bound from review of involuntary disability retirement cases where a desk official was given unregulated and unrestricted power to brand a resisting civil servant as mentally disabled. This situation is fully taken care of in § 8347(d)(2) and all other disability retirement rulings under § 8347(c) are at any rate subject to independent due process review by a quasi-judicial body that seems as well suited to perform the task, as the Tax Court was for renegotiations. Now the “Scroggins formula” remains to clutter and confuse the law in cases for which it was not devised, one that invites litigation in an area where Congress wished it not to be. We should, however, be more careful than the majority is not to commit us by dictum to extend the preclusion to instances of unconstitutional and void determinations where Congress could not reasonably, in the light of history, have expected the preclusion to be effective.
I would grant the motion as to all issues briefed for review by Mr. Lindahl.