Frank Palacios v. Richard Spencer , 906 F.3d 124 ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2018 Decided October 12, 2018
No. 17-5246
FRANK PALACIOS,
APPELLANT
v.
RICHARD V. SPENCER, SECRETARY OF THE NAVY,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:16-cv-02110)
Michael D.J. Eisenberg argued the cause and filed the briefs
for appellant.
Rachel F. Homer, Attorney, U.S. Department of Justice,
argued the cause for appellee. With her on the brief were Jessie
K. Liu, U.S. Attorney, and Alisa B. Klein, Attorney. R. Craig
Lawrence, Assistant U.S. Attorney, entered an appearance.
Before: GRIFFITH, Circuit Judge, and EDWARDS and
RANDOLPH, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.
2
RANDOLPH, Senior Circuit Judge: Frank Palacios sought
judicial review of a decision of the Board for Correction of
Naval Records. The district court, after determining that it
lacked subject-matter jurisdiction, dismissed Palacios’s
complaint, denied his motion for leave to amend the complaint,
and rejected his motion to transfer the case to the United States
Court of Federal Claims. Palacios v. Spencer, 267 F. Supp. 3d
1 (D.D.C. 2017). Palacios appeals each of the district court’s
rulings.
Palacios served in the U.S. Marine Corps from 1992 to
1995. He received an other-than-honorable discharge stemming
from his pattern of misconduct. In about 2002 and 2009, he
sought an upgrade of his discharge on the basis that his
misconduct resulted from his mental and physical disabilities.
The Naval Discharge Review Board denied both of his requests.
Palacios then asked the Board for Correction of Naval Records
to correct his records. The Correction Board denied his request
in 2010.
In response, Palacios filed an action for judicial review of
the Correction Board’s decision in the Court of Federal Claims.
The Claims Court dismissed his suit as untimely under the
statute of limitations applicable to his wrongful-discharge claim.
Palacios v. United States, 100 Fed. Cl. 656 (2011). The Federal
Circuit affirmed. Palacios v. United States, No. 2012-5028,
2012 WL 2415348 (Fed. Cir. Mar. 8, 2012) (per curiam)
(unpublished order).
This appeal arises from Palacios’s request that the
Correction Board reconsider its decision. After the Board
denied this request in 2015, Palacios filed suit in the United
States District Court for the District of Columbia. He claimed
that the Board’s denial of reconsideration was arbitrary and
capricious, unsupported by substantial evidence, and contrary to
3
law under the Administrative Procedure Act, 5 U.S.C. § 706(2).
His prayer for relief asked the district court to enter judgment
correcting his disability rating and discharge, awarding costs and
attorneys’ fees, and “[g]ranting Plaintiff appropriate back pay
and benefits that would natural[ly] flow from the upgrade in
discharge status.” In the alternative, he asked the district court
to remand to the Correction Board for consideration on the
merits.
The government moved to dismiss on the ground that
Palacios’s complaint fell outside the applicable statute of
limitations and that it asserted a claim under the Tucker Act over
which the Court of Federal Claims had exclusive jurisdiction. In
his opposition to the government’s motion to dismiss, Palacios
moved for leave to amend his complaint by dropping his request
for money damages or, in the alternative, to transfer the case to
the Court of Federal Claims.
When a party in the district court moves to transfer the case
to the Court of Federal Claims, see 28 U.S.C. § 1631, a statutory
procedure is triggered: “no further proceedings shall be taken in
the district court until 60 days after the court has ruled upon the
motion,” 28 U.S.C. § 1292(d)(4)(B). If the district court grants
or denies the motion, the Federal Circuit has “exclusive
jurisdiction of an appeal” from that order. 28 U.S.C.
§ 1292(d)(4)(A). If there is an appeal, the district court’s
“proceedings shall be further stayed until the appeal has been
decided.” Id. § 1292(d)(4)(B).
The district court in this case did not follow this statutory
procedure, perhaps because neither Palacios nor the government
brought the governing statutes to the court’s attention. The
district court, rather than staying its proceedings, denied
Palacios’s transfer motion, granted the government’s motion to
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dismiss, and denied Palacios’s motion for leave to amend his
complaint.
Because the Federal Circuit has exclusive jurisdiction over
appeals from orders granting or denying the transfer of an action
to the Court of Federal Claims, we dismiss for want of
jurisdiction Palacios’s appeal from that aspect of the district
court’s judgment. See Murthy v. Vilsack, 609 F.3d 460, 461–64
(D.C. Cir. 2010).
As to the district court’s dismissal of the complaint, we
agree that the court lacked subject-matter jurisdiction over
Palacios’s complaint.1 The complaint expressly demanded the
entry of a judgment including an award of back pay exceeding
$10,000. Under the Tucker Act, the Court of Federal Claims
therefore had exclusive jurisdiction over this claim.2 See 28
1
While the district court should have waited to rule on the
government’s motion to dismiss and Palacios’s motion for leave to
amend until 60 days after it denied the transfer motion, 28 U.S.C.
§ 1292(d)(4)(B), the court’s failure to follow that procedure poses no
obstacle to our review. As an initial matter, Palacios has forfeited any
argument about this statute. Moreover, the time for Palacios to appeal
the denial of his transfer motion to the Federal Circuit has long since
expired. See Fed. R. App. P. 4(a)(1)(B); Sanghi v. West, 168 F.3d
1318, 1998 WL 568814 (Fed. Cir. 1998) (unpublished table decision)
(declining jurisdiction over appeal under § 1292(d)(4) filed seven
months after the district court’s order issued). Requiring the district
court on remand to wait 60 days before reinstating these orders and
then requiring Palacios to once again appeal to this court would
further delay our review without providing Palacios any additional
benefit.
2
The district courts and the Court of Federal Claims generally
share jurisdiction over Little Tucker Act claims, i.e., those not
exceeding $10,000. See 28 U.S.C. § 1346(a)(2). Palacios alleged
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U.S.C. §§ 1346(a)(2), 1491(a); Schwalier v. Hagel, 734 F.3d
1218, 1220–22 (D.C. Cir. 2013); Sawyer v. United States, 930
F.2d 1577, 1580–81 (Fed. Cir. 1991); Van Drasek v. Lehman,
762 F.2d 1065, 1067–72 (D.C. Cir. 1985).
Palacios argues that primarily his complaint sought to
correct his military records and that the essence of his complaint
was therefore not monetary. We “look only to the essence of a
complaint in the absence of an explicit request for monetary
relief.” Schwalier, 734 F.3d at 1221. Our decisions examining
a complaint’s essence therefore do not apply. See, e.g., Tootle
v. Sec’y of the Navy, 446 F.3d 167, 169, 173–77 (D.C. Cir.
2006); Kidwell v. Dep’t of the Army, Bd. for Correction of
Military Records, 56 F.3d 279, 284–86 (D.C. Cir. 1995). It
follows that the district court correctly dismissed the complaint
for lack of subject-matter jurisdiction. See, e.g., Fisher-Cal
Indus., Inc. v. United States, 747 F.3d 899, 902–03 (D.C. Cir.
2014).
In opposing the government’s motion to dismiss, Palacios
sought leave to amend his complaint in order to drop his demand
for back pay. The district court properly denied his motion. The
amendment would have been futile. Aside from the Tucker Act
jurisdictional problem, the Board’s denial of Palacios’s request
for reconsideration is not subject to judicial review because
Palacios alleges only “material error” in the agency’s original
decision. Sendra Corp. v. Magaw, 111 F.3d 162, 166 (D.C. Cir.
1997) (quoting ICC v. Bhd. of Locomotive Eng’rs, 482 U.S. 270,
279 (1978)). As we explained in Sendra, when an agency
before the Claims Court that he is owed back pay in excess of
$10,000, and the district court properly read his complaint to seek an
amount above that threshold. See, e.g., Monk v. Sec’y of the Navy, 793
F.2d 364, 370 (D.C. Cir. 1986); Doe v. Dep’t of Justice, 753 F.2d
1092, 1101 (D.C. Cir. 1985).
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merely affirms its original decision in denying a petition for
reconsideration, it has not rendered a judicially reviewable
decision. Id. at 167. We have recognized two exceptions to this
general rule. Neither applies here.
First, a denial of reconsideration may be reviewable, albeit
under an especially deferential standard of review, when the
requesting party raises “‘new evidence’ or ‘changed
circumstances.’” Sendra, 111 F.3d at 166 (quoting Locomotive
Eng’rs, 482 U.S. at 278). This is so even when the governing
statute or regulation allows for reconsideration on other bases,
such as new argument or material error. See Locomotive Eng’rs,
482 U.S. at 277–78. Palacios concedes that his request for
reconsideration raised only a new argument, so this exception
does not apply.
Second, courts may review an agency’s decision if the
agency, despite denying reconsideration, “clearly states or
indicates that it has reopened the matter.” Sendra, 111 F.3d at
167. Otherwise, we do not “look behind the agency’s formal
disposition of the reconsideration request to see whether the
agency ‘in fact’ reopened its original decision.” Id. (quoting
Locomotive Eng’rs, 482 U.S. at 280). Here the Corrections
Board used boilerplate language in summarily denying
Palacios’s request.3 This falls far short of the clear indication of
reopening required to review an agency’s denial of
reconsideration.
3
“After careful and conscientious consideration of the entire
record, the Board found that the new argument made by your attorney
to the effect that the misconduct which resulted in your discharge was
causally connected to your ‘diminished physical and mental condition’
stemming from an injury to your lumbar spine, was insufficient to
warrant further consideration of your application. Accordingly, the
Board denied your request.”
7
The district court lacked jurisdiction over Palacios’s
complaint, and it correctly determined that amendment to cure
the jurisdictional defect would have been futile. We therefore
dismiss the appeal with respect to the motion to transfer and
affirm with respect to the motions to dismiss and for leave to
amend.
Dismissed in part and affirmed in part.