Barbara R. King v. Department of the Air Force , 2015 MSPB 41 ( 2015 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
2015 MSPB 41Docket No. DA-0752-09-0604-P-1
Barbara R. King,
Appellant,
v.
Department of the Air Force,
Agency.
June 10, 2015
Barbara R. King, San Antonio, Texas, pro se.
Lawrence Lynch, Joint Base San Antonio, Randolph, Texas, for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
OPINION AND ORDER
¶1 The agency has filed a petition for review of the administrative judge’s
addendum initial decision awarding the appellant $71,238.22 in consequential
damages. For the reasons that follow, the agency’s petition for review is
GRANTED, and the administrative judge’s consequential damages award is
AFFIRMED IN PART and REVERSED IN PART. As explained below, we find
that the appellant is entitled to an award of $6,289.22 in consequential damages
and the restoration of 280 hours of sick leave.
2
BACKGROUND
¶2 The following facts inform the agency’s challenge to the administrative
judge’s award of consequential damages. The administrative judge issued an
initial decision reversing the appellant’s reduction in grade and pay, finding that
the appellant proved her affirmative defense of whistleblower reprisal. See King
v. Department of the Air Force, MSPB Docket No. DA-0752-09-0604-B-1, Initial
Decision (Oct. 3, 2012). Neither party filed a petition for review of that initial
decision, which became the Board’s final decision. See 5 C.F.R. § 1201.113.
The appellant thereafter filed a motion seeking an award of both compensatory
and consequential damages under the Whistleblower Protection Enhancement Act
of 2012 (WPEA), Pub L. No. 112-199, 126 Stat. 1465. Damages File (DF), Tab
1. The administrative judge denied the appellant’s request for a compensatory
damages award and issued an order certifying for interlocutory appeal the issue of
whether the WPEA’s expanded scope of relief authorizing a compensatory
damages award applied to the appellant’s appeal, which was pending when the
WPEA was enacted. DF, Tab 18. The Board issued an Opinion and Order
finding that the WPEA’s expanded scope of relief was not retroactive and
returning the appellant’s request for a consequential damages award to the
administrative judge for further adjudication. See King v. Department of the Air
Force, 119 M.S.P.R. 663, ¶ 18 (2013).
¶3 Following a damages hearing, the administrative judge issued an addendum
initial decision awarding the appellant $71,238.22 in consequential damages. 1
1
In her addendum initial decision, the administrative judge also addressed the
appellant’s allegations of agency noncompliance with the Board’s prior final decision
reversing her reduction in grade and pay. The agency has filed a petition for review
addressing both the administrative judge’s damages award and her findings of agency
noncompliance. Petition for Review File, Tab 1. The Board has severed the appellant’s
petition for enforcement and her motion for damages, and it has addressed her
allegations of agency noncompliance in a separate nonprecedential order. See King v.
3
DF, Tab 54, Addendum Initial Decision (AID). The administrative judge
awarded the appellant the following consequential damages: moving expenses
($3,871.20); job search expenses ($2,418.02); and the amount of a compromise of
her Veterans Administration (VA) loan resulting from the sale of her home at a
loss ($64,949.00). AID at 12-14. The administrative judge also ordered the
agency to restore 280 sick leave hours to the appellant, but she denied her request
to restore 50 annual leave hours and reimburse certain medical expenses. AID at
16-17.
¶4 In support of her consequential damages award, the administrative judge
found that the appellant credibly testified that she could not meet her financial
obligations following her reduction in grade and pay and that she sought other
jobs at a higher salary and with a greater potential career ladder at the agency.
AID at 12. Toward this end, the appellant applied, and was selected, for a
position with the agency in Los Angeles, California, in October 2009; prior to
this transfer, the appellant had been domiciled in Texas. AID at 12, 14. After
being selected for the California position, the appellant sold her house in Texas at
a loss through a short sale and entered into a compromise with the VA for the
outstanding balance of $64,949.00 on her mortgage. DF, Tab 50 at 6.
Documents submitted below reflect that the VA absorbed this loss and that,
although the appellant is not obligated to repay the VA this amount, she is not
entitled to apply for another VA loan until it is repaid in full. Id. The appellant,
moreover, testified that the compromised loan amount appears on her credit
history. AID at 13. In her addendum initial decision, the administrative judge
found that the appellant was entitled to reimbursement for the compromised loan
amount as a consequential damage caused by the agency’s whistleblower reprisal.
AID at 14.
Department of the Air Force, MSPB Docket No. DA-0752-09-0604-C-1, Remand Order
(Apr. 9, 2015).
4
¶5 The agency has filed a petition for review challenging the administrative
judge’s consequential damages award arising from the VA loan. Petition for
Review (PFR) File, Tab 1 at 7-8. The agency argues on review that this amount
is not an actual out-of-pocket expense because the appellant has not paid this
amount (or any portion thereof) to the VA and that the administrative judge’s
damages award is a windfall to the appellant because she is not required to pay
this amount to the VA unless and until she wishes to apply for another VA loan.
Id. at 8. Alternatively, the agency argues that, if the administrative judge’s
consequential damages award is sustained, then the award should be paid directly
to the VA, rather than to the appellant. Id. In opposition, the appellant asserts
that she has sustained financial damage as a result of the agency’s wrongful
action and that she is entitled to reimbursement for the compromised loan
amount. PFR File, Tab 3 at 7.
¶6 For the reasons that follow, we find that the appellant is not entitled to
reimbursement for the $64,949.00 compromised loan amount, and we VACATE
that portion of the addendum initial decision awarding the appellant this amount.
As to the remaining elements of the administrative judge’s consequential
damages award, we AFFIRM the addendum initial decision.
ANALYSIS
“Consequential damages” under 5 U.S.C. § 1221(g)(1)(A)(ii) must be narrowly
construed.
¶7 As the prevailing party in a Board appeal in which the administrative judge
ordered corrective action based upon the finding of whistleblower reprisal, the
appellant is entitled to an award of “back pay and related benefits, medical costs
incurred, travel expenses, and any other reasonable and foreseeable consequential
5
[damages].” 2 5 U.S.C. § 1221(g)(1)(A)(ii). 3 The Federal Circuit has concluded
that consequential damages under 5 U.S.C. § 1221(g) are limited to out-of-pocket
costs and do not include nonpecuniary damages. Bohac, 239 F.3d at 1343. In
reaching this conclusion, the court found that the recovery of damages under the
statute may not be allowed unless the government has waived sovereign
immunity. Id. at 1339; Johnston v. Department of the Treasury, 100 M.S.P.R. 78,
¶ 14 (2005). It further noted that such a waiver must be expressed unequivocally
in statutory text and strictly construed in favor of the sovereign. Bohac, 239 F.3d
at 1339; Johnston, 100 M.S.P.R. 78, ¶ 14. Applying the interpretive rule of
ejusdem generis, 4 the court also found that Congress intended a narrow
construction of “consequential damages” in the 1994 amendments to 5 U.S.C.
§ 1221(g). 5 Bohac, 239 F.3d at 1342. It further found that the general phrase
2
The original text of the statute reads “and any other reasonable and foreseeable
consequential changes.” 5 U.S.C. § 1221(g)(1)(A)(ii). Both the U.S. Court of Appeals
for the Federal Circuit and the Board have held that Congress intended to provide for
the recovery of consequential damages. See Bohac v. Department of Agriculture,
239 F.3d 1334, 1338-39 (Fed. Cir. 2001); Carson v. Department of Energy, 92 M.S.P.R.
440, ¶ 8 n.5 (2002), aff’d, 64 F. App’x 234 (Fed. Cir. 2003). In passin g the WPEA,
moreover, Congress has corrected the language of this section to provide for an award
of compensatory damages. See King, 119 M.S.P.R. 663, ¶ 15 (citing WPEA, § 107(b)).
3
This section has since been amended by the WPEA to provide for an award of
compensatory damages. See 5 U.S.C. § 1221(g)(1)(A)(ii). As we explained in King,
the appellant is not entitled to a compensatory damages award because her appeal was
pending at the time of the WPEA’s enactment. See King, 119 M.S.P.R. 663, ¶ 18.
4
“Ejusdem generis” means “of the same kind.” Under this rule, where a general word
or phrase follows an enumeration of specific things, the general word or phrase is held
to refer to things of the same kind as those specified. See Johnston, 100 M.S.P.R. 78,
¶ 14 n.*.
5
Congress amended 5 U.S.C. § 1221(g) in 1994 to provide for an award of
consequential damages. Prior to this amendment, the statute only provided a prevailing
party with the right to seek reasonable attorney’s fees and other reasonable costs
incurred. See Roman v. Department of the Army, 72 M.S.P.R. 409, 412-13 (1996),
aff’d, 129 F.3d 134 (Fed. Cir. 1997) (Table).
6
“any other reasonable and foreseeable consequential [damages]” should be read
to cover only items similar in nature to the specific items listed in the statute, i.e.,
back pay and related benefits, medical costs incurred, and travel expenses. Id. It
noted that those items are all actual monetary losses or out-of-pocket expenses.
Id. Applying Bohac, the Board has explained that, to receive a consequential
damages award, an appellant must prove that she incurred consequential damages
and that her claimed damages were reasonable, foreseeable, and causally related
to the agency’s prohibited personnel practice. See Johnston, 100 M.S.P.R. 78,
¶ 13.
The compromised loan amount is not recoverable as a consequential damage
under 5 U.S.C. § 1221(g)(1)(A)(ii).
¶8 Upon reviewing the agency’s challenge to the administrative judge’s award
of $64,949.00, we begin with the proposition articulated in Bohac that “Congress
intended a narrow construction of ‘consequential damages.’” Bohac, 239 F.3d at
1342. Applying the rule of ejusdem generis, the court held that an award of
consequential damages must be “of the same kind” as those specifically
articulated in the statute: lost back pay and benefits, medical costs, or travel
expenses. Id. Subsequent to Bohac, the Board has declined to restore either
annual leave used, or leave without pay (LWOP) incurred, to pursue a Board
appeal as part of a consequential damages award. See Carson, 92 M.S.P.R. 440,
¶ 13 (declining to award LWOP); Reams v. Department of the Treasury,
91 M.S.P.R. 447, ¶¶ 13-14 (2002) (declining to restore annual leave). It also has
found that awards of interest and compensation for an increased tax liability are
beyond the scope of recoverable consequential damages. See Johnston,
100 M.S.P.R. 78, ¶¶ 18, 21.
¶9 In keeping with the Board’s historical approach toward awards of
consequential damages, we cannot conclude that the compromised loan amount
resulting from the short sale of the appellant’s home is recoverable. First, the
compromised loan amount is not similar in nature to the other types of
7
consequential damages specified in the statute, i.e., lost back pay, medical costs,
or travel expenses. See id., ¶ 14 (any other reasonable and foreseeable
consequential damages should be read to cover only items similar in nature to
those listed in the statute). The compromised loan amount, rather, is more like
those categories of damages which the Board has declined to award under section
1221(g). See, e.g., id., ¶¶ 18, 21 (declining to award a lump-sum interest
payment on restored leave and additional compensation for increased tax
liability); Reams, 91 M.S.P.R. 447, ¶ 14 (reversing an award of annual leave used
to prosecute a Board appeal). Applying the doctrine of ejusdem generis, we find
that section 1221(g)(1)(A)(ii)’s “any other reasonable and foreseeable
consequential [damages]” language does not provide for the recovery of the
compromised loan amount following the short sale of the appellant’s house.
¶10 Additionally, we find that the compromised loan amount is not a reasonable
and foreseeable consequential damage which is causally related to the agency’s
reprisal. See Johnston, 100 M.S.P.R. 78, ¶ 13. The appellant testified that,
among other things, upon her reduction in grade and pay, she could not cover her
living expenses and felt compelled to seek employment elsewhere. DF, Tab 52,
Hearing Compact Disc (HCD). She applied, and was selected, for a
higher-paying position with the agency in Los Angeles, California, and thereafter
elected to sell her home in Texas at a loss through a short sale. HCD; see AID at
12, 13. However, we find that, in between the agency’s reprisal and the
appellant’s decision to sell her house and move to California, there were several
intervening events which break the causal link needed to establish an entitlement
to a consequential damages award. See Johnston, 100 M.S.P.R. 78, ¶ 13. For
example, the appellant could have applied for and received a position closer to
where she resided in Texas (either with the agency or another employer), thus
eliminating the need for her to move or sell her house. Alternatively, she could
8
have accepted the position in California, but kept her house,6 or she might not
have had to sell her house at a loss had she negotiated a different price or had the
housing market been stronger. Cf. Restatement (Second) of Torts § 433(b) (1965)
(relevant considerations when considering whether an actor’s conduct is a
substantial factor in bringing about harm to another include “whether the actor’s
conduct has created a force or series of forces which are in continuous and active
operation up until the time of the harm”). 7 As illustrated above, we cannot
conclude that the agency’s prohibited personnel practice created a “series of
forces which [were] in continuous and active operation” through the appellant’s
decision to sell her home at a loss and enter into a compromise with the VA. See
Restatement (Second) of Torts § 440 (a superseding cause is that of a third person
or other force which by its intervention prevents the actor from being liable for
harm to another).
¶11 We further agree with the agency’s argument on review that there is no
evidence in the record that the appellant has experienced an actual, compensable
monetary loss or out-of-pocket expense. 8 See Bohac, 239 F.3d at 1342
6
There is evidence in the record that, prior to the challenged reduction in grade and
pay, the appellant was in line for a temporary overseas assignment and that she had
planned on renting her house while abroad. AID at 12. We find it within the range of
possibility that the appellant could have rented her house in Texas instead of selling it
at a loss.
7
In Bohac, the Federal Circuit found that contract law principles did not squarely
address the scope of recoverable consequential damages under section 1221. See
Bohac, 239 F.3d at 1340-41. Rather, courts traditionally have looked to tort law when
considering the elements of employment discrimination claims. See, e.g., University of
Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 2517, 2525 (2013). We
therefore find the Restatement of Torts persuasive authority on this issue.
8
The fact that the appellant has not personally s ustained an actual monetary loss or
out-of-pocket expense only adds support to our decision, and had the appellant
personally sustained an actual monetary loss on the sale of her house, we would reach
the same conclusion that the loss is not within the sco pe of recoverable consequential
damages under 5 U.S.C. § 1221(g)(1)(A)(ii).
9
(consequential damages are limited to actual monetary losses or out-of-pocket
expenses); PFR File, Tab 1 at 7-8. As explained above, upon the sale of the
appellant’s house, she entered into a compromise with the VA for the outstanding
amount of her loan, which does not require that she repay the VA unless and until
she wishes to be eligible for another VA loan. DF, Tab 51 at 5-6. The appellant,
therefore, can present no evidence that she has incurred an actual monetary loss,
all she has lost is the eligibility to apply for a VA loan, and we agree with the
agency that the loss generated upon the sale of the appellant’s house has been
sustained by the VA and not by her. See PFR File, Tab 1 at 8. The appellant’s
ineligibility to secure another VA loan, moreover, is best categorized as a
nonpecuniary consequence which falls outside of the scope of recovery under
section 1221(g). See Bohac, 239 F.3d at 1342. Similarly, we find that the
reference to the loan compromise on the appellant’s credit history is also
nonpecuniary in nature and cannot justify an award of consequential damages. 9
¶12 Finally, we note that the remedial purpose of the consequential damages
provision of section 1221(g) does not warrant a different result. See 5 U.S.C.
§ 1221(g)(1)(A)(i) (“corrective action may include . . . that the individual be
placed, as nearly as possible, in the position the individual would have been in
had the prohibited personnel practice not occurred”); Bohac, 239 F.3d at 1343(discussing the legislative history of the 1994 amendments to section 1221(g)).
In Bohac, the Federal Circuit found that the statute’s legislative history could not
support a reading that Congress intended to allow prevailing parties to recover
nonpecuniary losses in consequential damages awards. See Bohac, 239 F.3d at
9
We note, for example, that, even if we were to award the appellant this sum, there is
no guarantee that she would repay the VA this amount, in which case the reference to
the compromised loan would remain on her credit history. Additionally, even if the
appellant were to repay the VA this amount, it is not clear that her credit history would
be expunged.
10
1343. Although the Board had previously cited the statute’s “make-whole”
language and its legislative history to support an expansive reading of the scope
of recovery under section 1221(g)(1)(A)(ii), see Pastor v. Department of Veterans
Affairs, 87 M.S.P.R. 609, ¶¶ 14-15 (2001) (finding that an award of future
medical costs may be awarded under section 1221(g)(1)(A)(ii)), subsequent to
Bohac, the Board has eschewed reliance on the broad make-whole language of the
statute, instead recognizing that Congress intended a narrow construction of the
consequential damages provision, see Johnston, 100 M.S.P.R. 78, ¶ 16. In light
of the foregoing, we conclude that the appellant is not entitled to a consequential
damages award covering the compromised loan amount. Accordingly, the
administrative judge’s award of $64,949.00 in consequential damages is
REVERSED.
The administrative judge’s remaining consequential damages award is
AFFIRMED.
¶13 The agency has not challenged the administrative judge’s consequential
damages award of $3,871.20 in moving expenses, $2,418.02 in travel costs, and
280 restored sick leave hours. PFR File, Tab 1. Upon our review of the record,
we find no reason to differ with the administrative judge’s monetary award for
travel and moving costs, which we accordingly AFFIRM. Additionally, although
the Board has previously withheld deciding whether sick leave used as a result of
the agency’s whistleblower reprisal would be compensable under 5 U.S.C.
§ 1221(g)(1)(A)(ii), see Carson, 92 M.S.P.R. 440, ¶ 15 n.9, here, where there is
unrefuted evidence in the record demonstrating the appellant’s increased use of
sick leave following the agency’s prohibited personnel practice, along with
supporting medical documentation, see HCD; DF, Tabs 46-47 (the appellant’s
medical documentation and leave history), we find that sick leave used as a result
of the agency’s whistleblower reprisal is a recoverable consequential damage as a
medical cost incurred under section 1221(g)(1)(A)(ii). The administrative
judge’s award of 280 restored sick leave hours is AFFIRMED.
11
¶14 Lastly, the appellant has not challenged the administrative judge’s
addendum initial decision denying her requests for restored annual leave and
reimbursement for certain medical expenses, and we find no reason to disturb the
addendum initial decision as to these denials. AID at 15-16, 17 (finding that
medical expenses were borne by the appellant’s insurance company, and not by
the appellant, and that there was no evidence that annual leave was taken as a
result of the agency’s reprisal).
ORDER
¶15 We concur with the administrative judge’s decision to grant the appellant’s
motion for an award of consequential damages IN PART, and we ORDER the
agency to pay the appellant $6,289.22 and to restore to her 280 hours of sick
leave. See Kerr v. National Endowment for the Arts, 726 F.2d 730 (Fed. Cir.
1984). The agency must complete this action no later than 20 days after the date
of this decision.
¶16 We further ORDER the agency to tell the appellant promptly in writing
when it believes it has fully carried out the Board’s Order and to describe the
actions it took to carry out the Board’s Order. The appellant, if not notified,
should ask the agency about its progress. See 5 C.F.R. § 1201.181(b).
¶17 No later than 30 days after the agency tells the appellant that it has fully
carried out the Board’s Order, the appellant may file a petition for enforcement
with the office that issued the initial decision in this appeal if the appellant
believes that the agency did not fully carry out the Board’s Order. The petition
should contain specific reasons why the appellant believes that the agency has not
fully carried out the Board’s Order, and should include the dates and results of
any communications with the agency. 5 C.F.R. § 1201.182(a).
¶18 This is the final decision of the Merit Systems Protection Board in this
appeal. Title 5 of the Code of Federal Regulations, section 1201.113(c) (5 C.F.R.
§ 1201.113(c)).
12
NOTICE TO THE APPELLANT
REGARDING YOUR RIGHT TO REQUEST
ATTORNEY FEES AND COSTS
You may be entitled to be paid by the agency for your reasonable attorney
fees and costs. To be paid, you must meet the requirements set out at Title 5 of
the United States Code (U.S.C.), sections 7701(g), 1221(g), 1214(g) or 3330c(b);
or 38 U.S.C. § 4324(c)(4). The regulations may be found at 5 C.F.R.
§§ 1201.201, 1202.202, and 1201.203. If you believe you meet these
requirements, you must file a motion for attorney fees WITHIN 60 CALENDAR
DAYS OF THE DATE OF THIS DECISION. You must file your attorney fees
motion with the office that issued the initial decision on your appeal.
NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request further review of this final decision.
Discrimination Claims: Administrative Review
You may request review of this final decision on your discrimination
claims by the Equal Employment Opportunity Commission (EEOC). See Title 5
of the United States Code, section 7702(b)(1) ( 5 U.S.C. § 7702(b)(1)). If you
submit your request by regular U.S. mail, the address of the EEOC is:
Office of Federal Operations
Equal Employment Opportunity Commission
P.O. Box 77960
Washington, D.C. 20013
If you submit your request via commercial delivery or by a method requiring a
signature, it must be addressed to:
Office of Federal Operations
Equal Employment Opportunity Commission
131 M Street, NE
Suite 5SW12G
Washington, D.C. 20507
13
You should send your request to EEOC no later than 30 calendar days after
your receipt of this order. If you have a representative in this case, and your
representative receives this order before you do, then you must file with EEOC no
later than 30 calendar days after receipt by your representative. If you choose to
file, be very careful to file on time.
Discrimination and Other Claims: Judicial Action
If you do not request EEOC to review this final decision on your
discrimination claims, you may file a civil action against the agency on both your
discrimination claims and your other claims in an appropriate United States
district court. See 5 U.S.C. § 7703(b)(2). You must file your civil action with
the district court no later than 30 calendar days after you r receipt of this order. If
you have a representative in this case, and your representative receives this order
before you do, then you must file with the district court no later than 30 calendar
days after receipt by your representative. If you choose t o file, be very careful to
file on time. If the action involves a claim of discrimination based on race, color,
religion, sex, national origin, or a disabling condition, you may be entitled to
representation by a court-appointed lawyer and to waiver of an y requirement of
prepayment of fees, costs, or other security. See 42 U.S.C. § 2000e-5(f) and
29 U.S.C. § 794a.
FOR THE BOARD:
______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.