Nicholas C. Ricucci v. The United States ( 1970 )

ON PLAINTIFF’S MOTION AND DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT

NICHOLS, Judge.

This ease is before us on cross motions for summary judgment.. The plaintiff, a non-veteran career employee, sues for back pay lost as a result of his removal by adverse action from the post of Revenue Agent, GS-11, in the Internal Revenue Service. He has exhausted his administrative remedies. In this court he tells us that the removal was legally invalid for a number of asserted errors of procedure and in the receipt of evidence. We hold that he is clearly right on the failure to accord him the opportunity of a proper “oral reply” and that he must prevail on that issue. Thus it becomes needless to rule on the other issues and we do not do so.

The sustained charges involved improper business relations with a taxpayer whose returns plaintiff audited, and false representations on a matter of official interest. His procedural rights contemplated a removal already in effect before he could have a hearing, with an appeal on which he had the burden of going forward with evidence. Since he was thus put at a disadvantage on the hearing date, attention focuses on the procedures that were required for his protection before removal. These included notice of charges and the right to make written and oral reply. He elected both. His superior, the District Director, appointed John P. Gildea to hear the oral reply, review it and the record, and recommend a final decision. Mr. Gildea is a Special Agent, a member of the IRS Intelligence Division. That Division we understand investigates taxpayer frauds and is organizationally separate both from plaintiff’s part of the Agency and from the Inspection Service which investigates employee misconduct.

Plaintiff appeared with counsel before Mr. Gildea and made a statement, counsel however protesting that the oral reply opportunity was inadequate, mainly because he was not informed as to the evidence against his client. He was, he said later, up against a “wall of silence.” Mr. Gildea interjected only an occasional question. These appeared meant to clarify plaintiff’s allegations. He made no disclosure of the case against plaintiff, nor did he make any comment on its strength or weakness. He did not cut plaintiff off or prevent him or his counsel from saying what they wished to say. At the close he said:

Mr. Ricueci’s reply and all materials submitted here today will be carefully considered and a decision will be rendered by the District Director.

The whole proceeding was taped, and afterwards transcribed. There can be no doubt it was considered, for in subsequent hearings it was referred to as evidence against Mr. Ricucci. There is nothing in the record to show that Mr. Gildea ever made any recommendation in the premises. It will have been noted that he did not state he would do so at the close of the “oral reply,” only that an anonymous someone would consider the “oral reply” and the District Director would decide.

Both parties cite as the law on oral replies the Civil Service Commission Regulation, 5 C.F.R. § 752.202(b), which reads as follows:

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•» * * The employee is entitled to answer personally, or in writing, or both personally and in writing. The right to answer personally includes the right to answer orally in person by being given a reasonable opportunity to make any representations which the employee believes might sway the final decision on his ease, but does not include the right to a trial or formal hearing with examination of witnesses. When the employee requests an opportunity to answer personally, the agency shall make a representative or representatives available to hear his answer. The representative or representatives designated to hear the answer shall be persons who have authority either to make a final decision on the proposed adverse action or to recommend what final decision should be made.

Both cite from Part 752-7 of the Federal Personnel Manual as follows:

2-5. Employee’s Answer

■X X -X -X * -X

b. Oral Reply. (1) Designation of person to hear oral reply. If the employee requests an opportunity to make an oral reply, he is entitled to be heard by an agency representative or representatives who are superior to him and have the authority either to take or to recommend final action. This recommending authority need not be exclusive (i. e., other officials may be requested to recommend the action they consider appropriate under all the circumstances), nor is it mandatory that the recommendation of the superior who receives the oral reply be the final recommendation submitted to the person or persons having authority to make the final decision on the proposed adverse action.

This material tracks the Veterans’ Preference Act of 1944, Sec. 14, 5 U.S.C. § 863, now recodified as 5 U.S.C. § 7512 (Supp. IV, 1965-68), and made applicable to non-veterans by Executive Order 10988 of January 17, 1962. The requirement that the “agency representative” be “superior” to the accused employee is found only in the Manual, which may or may not have status as a regulation, but supposing it is binding on defendant, we do not deem it significant per se that Mr. Gildea was not above Mr. Ricucci as a supervisor in the same organizational unit. In common speech, a “superior” is one “of higher degree or rank”, Webster’s Third International Dictionary (1968), which Mr. Gildea was if his GS rating was above Mr. Ricucci’s, as we presume it must have been.

Plaintiff’s objections to Mr. Gildea’s designation also fail, so far as grounded on our holding in Paterson v. United States, 319 F.2d 882, 884, 162 Ct.Cl. 675, 679 (1963), that the right to answer charges orally is not met by appearance before the investigators who have developed facts to substantiate the charges. As we have said, Mr. Gildea’s Intelligence Division has no such duties, and it was the Inspection Service that made the case against plaintiff here.

Nevertheless, the fact remains that failure to award a proper opportunity for oral reply to an employee entitled to this right and requesting it, is a fatal defect in an adverse action. Paterson, supra; Tierney v. United States, 168 Ct.Cl. 77 (1964); Washington v. United States, 147 F.Supp. 284, 137 Ct. Cl. 344 (1957); see O’Brien v. United States, 284 F.2d 692, 694, 151 Ct.Cl. 392, 396 (1960). It remains to inquire whether the oral reply as provided for here was the kind the statute, the regulation, and the cases contemplate. This affords a very pretty problem in the interpretation of official language, but we think our answer is free from doubt. It is as true of the regulation as we said in Washington, 147 F.Supp. at p. 288, 137 Ct.Cl. at p. 350 of the statute, that the allowance of this oral reply implies an intent that the employee may succeed with it at times. It is not to be a futile ritual.

In the first place, there must be a significant difference in use and function between an oral reply and a written reply, since both are contemplated in the law. That difference would not exist in case of an oral reply dictated into a tape recorder, however satisfactory it might be to the employee to hear his own voice. The “oral reply officer” clearly therefore must play a role other than as presiding over a recording and transcribing medium. What the difference is — and the purpose of an oral reply — the oral arguments before this court would suggest. The person arguing orally can tell by our questions and comments how his presentation is going, what is making an impression and what is not, what needs clarification or substantiation, and what had best simply be dropped. To appoint an investigator — even one who normally investigates another kind of case — is to negate that feedback, as Mr. Gildea demonstrated here. Such a man is trained to let his witnesses divulge their secrets, while himself betraying no emotion, and disclosing no information. This is not to say that counsel was right in demanding access to the evidence. That is usurping the function of the later hearing. We do think he was entitled to a general give and take discussion of the ease, which the appointment of an investigator as “oral reply officer” seems as if expressly designed to negate.

Next, the regulation and manual require that the designated “oral reply officer” be one with authority to recommend what the final decision should be. This would normally include, we think, those who would so recommend in the regular course of their duties, whether of a line or staff nature. In the former category would be those who directed the section or unit to which the accused employee belonged. They would be in the best position to advise whether his dismissal would further the efficiency of the service. In the latter group would be staff aides such as the personnel officer, who could advise whether the proposed dismissal would be in accord with agency personnel policy and the regulations and precedents of the Civil Service Commission. Presumably advisers would advise according to their functions and expertise in the organization: thus the legal officer might advise on the legal aspects of any problem and the budget officer on the fiscal aspects, not vice versa. We do not deny that there might be occasions when for the employee’s protection a District Director would legitimately desire the advice of a qualified person on a removal matter quite outside that person’s normal duties, and if so, designating him as “oral reply officer” might be reasonable too. For example, he might suspect the employee was a victim of internal feuds or be in the bad graces of a clique. He might have race problems, or think he did. However, advice about a proposed dismissal from a person not having special expertise and not directly concerned with the action would be the reverse of helpful and if taken seriously would complicate the task, not facilitate it. As our decisions well demonstrate, this is a topic on which not everyone can be an instant expert. Suppose, for example, one of the charladies were selected as “oral reply officer” the derisory intent would be manifest. We assume that a career, even investigating tax frauds, does not make one an expert in the arcane mysteries of Government personnel.

The Manual provisions that the recommendation by the “oral reply officer” need not be the only one received and need not be the “final recommendation submitted” are pregnant with the expectation that such recommendations shall be otherwise at least as weighty with the deciding officer as those he receives from any of his regular advisers in such matters. The reference to the “final recommendation submitted” we suppose alludes to the fact that in the Executive Branch, a proposed decision, after drafting by a subordinate, is commonly circulated for initialing to officials concerned, normally in inverse order of their rank. The point is, anyway, that a recommendation by a person having neither expertise nor official concern with the problem involved cannot properly have weight with the deciding officer.

Finally, the record affords no explanation why Mr. Gildea was selected as “oral reply officer.” Counsel stated in oral argument before us that the District Director had no special preference for investigators, but had decided to rotate the unpleasant assignment among the activities under his command. This appears to mean that neither expertise nor official concern with the problem have any weight in that District in the choice of an “oral reply officer.”

Taking the Eegulation and Manual together, in summary, we read them as written for the protection of employees, and meaning that after adequate notice of charges and before dismissal, the accused employee may have an opportunity to discuss his case with an official of his agency. Not only may he state anything he pleases, from the number of mouths he has to feed to the alleged bias of his immediate supervisor, but he may expect help in presenting his case in form of such comments from the other side as would be natural from a person knowledgeable about the case and expecting largely to influence its resolution. Courts could hardly measure out the exact amount of loquacity he could demand, but at least they can discourage choice of an agency representative professionally trained to disclose nothing. Further, he has a right to expect that the “oral reply officer” will be one whose recommendation would be meaningful, not an empty formality. This would be normally assured if he was one of the deciding officer's circle of staff and line aides and advisers whom he regularly consults in such matters, unless the deciding officer has gone outside that circle for help for the employee’s own better protection. In that case the record would show how the outsider's expertise was relied on.

There is nothing in the instant record to show that the choice of an outsider was meant for plaintiff’s protection. The apparent motive, none other appearing, would have appeared to be to prevent him from learning anything he could use in his ease, and it was to refute this that defendant’s counsel offered the rotation explanation, which meets the standards of the Regulation and Manual hardly better.

We hold that the selection of a tax fraud investigator to hear the plaintiff’s “oral reply” was an abuse of discretion when no better reason is adduced for it than here and where substantially all the investigator did was to take down by tape recorder the plaintiff's statements with some clarification, that it was an arbitrary and capricious exercise of delegated power, and that the legality of plaintiff’s dismissal is infected accordingly. Defendant’s motion for summary judgment is denied. Plaintiff’s motion is allowed. Plaintiff is entitled to recover and judgment is entered to that effect. The amount of recovery will be determined under Rule 131.