Charlton v. United States

412 F.2d 390, 1969 U.S. App. LEXIS 12133

Opinions

OPINION OF THE COURT

KALODNER, Circuit Judge.

Is the scope of judicial review of a federal agency’s action in dismissing a civil service employee limited to the issue whether “statutory procedural requirements” have been satisfied in the administrative proceedings ?

The District Court answered that question in the affirmative in the instant suit by the appellant Charlton against the United States Civil Service Commission ¹ which seeks review of its action sustaining his dismissal from his employment as an investigator in the Internal Revenue Service.

It did so in dismissing Charlton’s Amended Complaint on its finding that review of the administrative record disclosed that “there has been substantial compliance with all the applicable procedural and statutory requirements”, and its determination that for that reason “We cannot inquire further into the matter.”

In spelling out in its Opinion² its view of the scope of judicial review of a federal agency’s action, the District Court stated:

“It is quite clear that the scope of review permitted in a case involving disciplinary action against government employees, including discharge, is very limited. The court is only ‘to determine whether there has been substantial compliance with applicable procedures and statutes, and not to review the administrative determination as to the wisdom or good judgment of the agency in exercising discretion.’ Baum v. Zuckert, 342 F.2d 145, 147 (6 Cir. 1965). See also Hargett v. Summerfield, 100 U.S.App.D.C. 85, 243 F.2d 29 (1957); Hofflund v. Seaton, 105 U.S.App.D.C. 171, 265 F.2d 363 (1959), cert. den. 361 U.S. 837, 80 S.Ct. 55, 4 L.Ed.2d 77 (1959); McTiernan v. Gronouski, 337 F.2d 31 (2 Cir. 1964).

“The Court would not be warranted in substituting its own judgment for that of plaintiff’s superiors, whose action has been sustained by the Civil Service Commission. Studemeyer v. Macy, 116 U.S.App.D.C. 120, 321 F.2d 386 (1963); Eustace v. Day, 114 U.S.App.D.C. 242, 314 F.2d 247 (1962). Thus, where procedural requirements have been complied, with, the Court should not inquire into the merits of the employee’s dismissal. Indiviglio v. United States, 156 Ct.Cl. 241, 299 F.2d 266 (1962), cert. den. 371 U.S. 913, 83 S.Ct. 260, 9 L.Ed.2d 173 (1962); Ellis v. Mueller, 108 U.S.App.D.C. 174, 280 F.2d 722 (1960), cert. den. 364 U.S. 883, 81 S.Ct. 172, 5 L.Ed.2d 104 (1960); Green v. Baughman, 100 U.S.App.D.C. 187, 243 F.2d 610 (1957), cert. den. 355 U.S. 819, 78 S.Ct. 25, 2 L.Ed.2d 35 (1957); Boylan v. Quarles, 98 U.S.App.D.C. 337, 235 F.2d 834 (1956).” (Emphasis supplied.)

We are of the opinion that the standard of the scope of judicial review of a federal agency’s action stated and applied by the District Court is erroneous and that its failure to “inquire further into the matter”, after finding that procedural requirements had been satisfied in the administrative proceedings, compels reversal of its dismissal of plaintiff’s Complaint.

The instant action was pursuant to the provisions of the Administrative Procedure Act now 5 U.S.C.A. § 702.³

Section 706 spells out the scope of judicial review of a federal agency’s action in clear and precise terms and it is controlling and dispositive. It supersedes and makes irrelevant judicially fashioned concepts of the scope of judicial review of a federal agency’s action, declared both prior and subsequent to its enactment.

Section 706 is mandatory by its terms and not merely declarative of “guidelines” with respect to the scope of judicial review of a federal agency’s action. It imposes on a federal court, inter alia, the mandatory duty to “review the whole record [of the administrative proceedings] or those parts of it cited by a party”, and to determine therefrom whether the agency’s action was in accordance with procedures required by law and supported by “substantial evidence”, or alternatively, capricious, arbitrary, an abuse of discretion, or otherwise not in accordance with law.

In full sweep Section 706 provides:

“Scope of review

“To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—

(1) compel agency action unlawfully withheld or unreasonably delayed; and

(2) hold unlawful and set aside agency action, findings, and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(C) in excess of statutory jurisdiction, authority, or limitations .or short of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or

(F) unwarranted by the facts tó the extent that the facts are subject to trial de novo by the reviewing court.

“In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error. Pub.L. 89-554, Sept. 6, 1966, 80 Stat. 393.” (Emphasis supplied.)

The District Court here..failed to discharge its statutory duty to review the _ administrative record and to determine whether the Commission’s action was supported by substantial evidence, or arbitrary, capricious and" an ¿buse of its discretion.

The Amended Complaint⁴ squarely challenged the Commission’s fact-findings that Charlton had failed (1) “to properly care for official documents”; and (2) to report a proffered bribe.

Thus, the single critical issue presented to the District Court was whether the Commission’s factual finding that Charlton was guilty of wrongdoing was supported by substantial evidence and not arbitrary, capricious or an abuse of discretion.

Otherwise stated, the issue was not the severity of the penalty of dismissal but whether the record supported the Commission’s guilty verdict.

The circumstance that the Commission had found Charlton guilty of failure to properly care for official documents even though the hearing officer of the Regional Commissioner of the Internal Revenue Service had found to the contrary, particularly imposed upon the District Court the duty to review the administrative record. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 496-497, 71 S.Ct. 456, 95 L.Ed. 456 (1951); In re United Corporation, 249 F.2d 168, 178-179 (3 Cir. 1957).⁵

This_ must be said with reference to the cases cited by the District Court in support of its holding that once it" is determined that procedural requirements have been satisfied a district court “should not inquire into the merits of the employee’s dismissal” and “cannot inquire further into the matter”.

It is true that these eases state and apply the narrow and unqualified doctrine that once it is determined that procedural requirements have been met “The Courts will not examine into the merits of the dismissal” of a civil service employee.⁶

It must immediately be noted that cases more recently decided hold that courts after determining whether procedural requirements have been met must further determine, upon review of the administrative record, -vyhether substantial evidence supports the federal /agency’s action in disciplining a federal employee. Meehan v. Macy, 392 F.2d 822 (D.C.Cir.1968); Halsey v. Nitze, 390 F.2d 142 (4 Cir. 1968), cert. den. 392 U.S. 939, 88 S.Ct. 2316, 20 L.Ed.2d 1399; Taylor v. United States Civil Service Commission, 374 F.2d 466 (9 Cir. 1967);⁷ Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (D.C. Cir. 1966); Scott v. Macy, 121 U.S.App.D.C. 205, 349 F.2d 182 (1965); Pelicone v. Hodges, 116 U.S.App.D.C. 32, 320 F.2d 754 (1963).

The consensus of the cited cases was thus epitomized in Dabney:

“ * * * the standard of judicial review is that" of whether there is evidence of substance in that [administrative] record which supports the Commission’s view of the matter.” 358 F.2d 535.

and in Pelicone:

“Our review in this kind of case [dismissal of a federal civil service employee] is limited to determining whether the statutory and regulatory procedures were observed and whether the challenged action was arbitrary and capricious or was supported by evidence.” 320 F.2d at 755.

The judicial scope of review declared and applied by the Court of Appeals for the District of Columbia in Dabney and Pelicone cannot be reconciled with that Court’s earlier holdings in Hargett v. Summerfield, supra, and Hofflund v. Seaton, supra—which the District Court relied on in the instant case.

In Hargett it was said:

“ * * * so long as there was substantial compliance with applicable procedures and statutes, the administrative determination was not reviewable as to the wisdom or good judgment of the department head in exercising his discretion.” 243 F.2d 32.

In Ellis v. Mueller, the Court, citing Hargett, said:

“The function of the courts in cases like this is not to review the merits of a dismissal, but to determine whether the employee was accorded his statutory and procedural rights.” 280 F.2d 722. (Emphasis supplied.)

In Hofflund v. Seaton, the Court, citing Hargett, said:

“Insofar as appellant here relies upon * * * the Administrative Procedure Act * * * we note only our consistent refusal to review the merits or wisdom of agency personnel action.” 265 F.2d 364. (Emphasis supplied.)

It must here be noted that it was made clear in Hargett, that it premised its holding on the ruling in Keim v. United States, 177 U.S. 290, 20 S.Ct. 574, 44 L.Ed. 774 (1900) that under then existing statutes courts could not review the dismissal of a civil service employee. In doing so the Court in Hargett gave no effect to the Supreme Court’s further statement in Keim that “until Congress by some special and direct legislation makes provision to the contrary, we are clear that they [dismissals of civil service employees] must be settled by those administrative officers.” 177 U.S. at 296, 20 S.Ct. at 576. (Emphasis supplied.)

Enactment of the Administrative Procedure Act in 1946 — 46 years after Keim —constituted “special and direct legislation” which not only empowered but mandated federal courts to inquire into the merits of a civil service employee’s dismissal.

There remains this to be said:

On this appeal, the Commission has cited, in support of the District Court’s holding with respect to its limited scope of review, our per curiam affirmance at 373 F.2d 530 (1967) of another District Court’s opinion in Cohen v. Ryder, 258 F.Supp. 693 (E.D.Pa.1966).

It is true that the District Court in Cohen, in specific subscription to the doctrine of Hargett, declared that “The scope of judicial review in an employee removal'~case is extremely harrow”, and “is limited to a determination of whether "the”required procedural steps have been substantially complied with”, and that in" affirming we said “The judgment of the district court will be affirmed on its well reasoned opinion, 258 F.Supp. 693”.

The record in Cohen discloses that the Complaint presented the single issue whether the plaintiff, a government employee, had been accorded procedural due process in'the administrative proceedings." The Complaint did not present -the- question whether substantial evidence supported the administrative fact-finding that she had been incompetent in the performance of her duties.

Moreover, the plaintiff’s brief on appeal, did not raise any issue as to the scope of the District Court’s review of the administrative proceedings.

Our per curiam affirmance in Cohen related only to the correctness of the District Court’s finding that the procedural requirements had been satisfied and, accordingly, is not to be construed as a holding on our part that the scope of judicial review in a case involving removal or discipline'of a civil service employee is limited to the procedural aspects of the administrative proceeding.

In summary, we are of the opinion that the scope of judicial review of a federal agency’s action with respect to the dismissal or discipline of a civil service employee extends to the determination whether procedural requirements have been satisfied in the administrative proceedings, and whether the ¿dministrative record establishes that substantial evidence supports the agency’s action and that it was not arbitrary, capricious or an abuse of discretion.⁸

In accordance with what has been said the Order of the District Court will be reversed and the cause remanded with directions to proceed in accordance with this Opinion.

1 . The United States was also named as a defendant.

2 . The Opinion of the District Court is unreported.

3 . Section 702 provides:

“Right of Review

“A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. Pub.L. 89-554, Sept. 6, 1966, 80 Stat. 392.” (carried over without significant change from 60 Stat. 243, June 11, 1946.)

4 . Paragraph 13 of the Amended Complaint alleged:

“The decision of the defendants was arbitrary, capricious, unsupported by substantial evidence and unwarranted by the facts.”

5 . Charlton was dismissed on September 29, 1963, from his position as an IRS special investigator on the grounds of (1) failure to report an attempted bribery and (2) failure to properly care for official documents. Before dismissal, he had been notified of the charges and had replied to them both orally and in writing. Charlton appealed to the IRS Regional Commissioner. After a hearing, at which Charlton was represented by counsel, the hearing officer found evidence to sustain the charge of failure to report an attempted bribe but not to support the charge of improper care of official documents. The Regional Commissioner, nevertheless, sustained both charges and affirmed the removal decision.

On further appeal, the Philadelphia Regional Office of the Civil Service Commission held that the record sustained both charges; that Charlton’s removal was for such cause as to promote the efficiency of the IRS; and that the IRS had complied with all necessary procedural requirements pertinent to the removal. The Civil Service Commission’s Board of Appeals and Review on January 8, 1965 affirmed.

6 . Baum v. Zuckert, 342 F.2d 145 (6 Cir. 1965) at page 147; McTiernan v. Gronouski, 337 F.2d 31, 34 (2 Cir. 1964); Indiviglio v. United States, 156 Ct.Cl. 241, 299 F.2d 266, 269 (1962), cert. den. 371 U.S. 913, 83 S.Ct. 260, 9 L.Ed.2d 173; Ellis v. Mueller, 108 U.S.App.D.C. 174, 280 F.2d 722 (1960), cert. den. 364 U.S. 883, 81 S.Ct. 172, 5 L.Ed.2d 104; Hofflund v. Seaton, 105 U.S.App.D.C. 171, 265 F.2d 363, 364 (1959), cert. den. 361 U.S. 837, 80 S.Ct. 55, 4 L.Ed.2d 77; Green v. Boughman, 100 U.S.App.D.C. 187, 243 F.2d 610, 611 (1957), cert. den. 355 U.S. 819, 78 S.Ct. 25, 2 L.Ed.2d 35; Hargett v. Summerfield, 100 U.S.App.D.C. 85, 243 F.2d 29 (1957), cert. den. 353 U.S. 970, 77 S.Ct. 1060, 1 L.Ed.2d 1137; Boylan v. Quarles, 98 U.S.App.D.C. 337, 235 F.2d 834 (1956).

7 . In Meehan the Court stated and applied the requirement that the Civil Service Commission’s action must be supported by substantial evidence. 392 F.2d 837. In Halsey the Court affirmed the District Court’s dismissal of plaintiff’s action upon its finding that the action of the Civil Service Commission with respect to a civil service employee “was supported by substantial evidence” and was not “arbitrary”, “unreasonable” or “capricious.” 390 F.2d 144. In Taylor the Court affirmed the finding of the District Court that the administrative record disclosed that the Commission’s action was “supported by substantial evidence.” 374 F.2d 470.

8 . In Urbina v. United States, 180 Ct.Cl. 194 (1967), where there was a review sought of the sustaining by the Civil Service Commission of a federal agency’s dismissal of an Air Force employee the Court said (p. 208):

“A dismissal action unsupported by substantial, credible, evidence must be regarded as arbitrary and therefore cannot stand. Scott v. United States, 160 Ct.Cl. 152 (1963).”