Francis Dougherty, Sr. v. U.S. Navy Board for Correction of Naval Records , 784 F.2d 499 ( 1986 )

OPINION OF THE COURT

VAN DUSEN, Senior Circuit Judge.

Plaintiff, Francis Dougherty, Sr., brought this action in the United States District Court for the District of New Jersey challenging a determination of defendant, United States Navy Board for Correction of Naval Records (“BCNR”). In light of a recent decision by the United States Court of Appeals for the Fifth Circuit, which was not available to the district court at the time of its decision,¹ we will vacate the December 10, 1984, district court order, which dismissed the complaint “for failure to satisfy the applicable statute of limitations, 28 U.S.C. § 2401,” and will remand the case to that court for further consideration in light of this opinion.²

The district court granted the BCNR’s motion to dismiss the complaint for failure to satisfy the applicable statute of limitations. For the reasons set forth below, we hold that the statute of limitations did not begin to run until the BCNR’s decision in 1984.

I.

Dougherty enlisted in the United States Navy in January 1957. Two months later, after developing apparent stress problems, he received a general discharge on the grounds of “unsuitability.” Upon application to the BCNR in 1982, Dougherty’s records were changed to indicate that he had received an honorable discharge in 1957. In 1983, the Veterans Administration (“VA”) denied an application by Dougherty for disability benefits. The VA found that his disabling psychiatric disorder was not service-connected.

On March 28, 1983, Dougherty again sought a change in his records from the BCNR to reflect a discharge for a nervous disorder contracted during his two months of service in the Navy in 1957. The BCNR referred the case to the Navy Central Physical Evaluation Board (“CPEB”), which found Dougherty had no grounds for a medical discharge or retirement benefits based on medical disability. The BCNR then denied Dougherty’s application.

On December 1, 1983, Dougherty filed a complaint pro se in the district court, challenging the action of the BCNR as arbitrary and capricious. Upon the district court’s discovery that the BCNR had not considered the complete record, the BCNR agreed to reconsider Dougherty’s case. On June 21, 1984, the BCNR again denied Dougherty’s application based on new findings of the CPEB. The district court dismissed the action, reasoning that the applicable six-year statute of limitations, 28 U.S.C. § 2401 (1978),³ had expired in 1963, six years after plaintiff’s 1957 discharge.

II.

The BCNR may correct a military record if the request is filed within three years of the time when the claimant discovers the error or October 26, 1961, whichever is later. 10 U.S.C. § 1552(b) (1983).⁴ It may only make such a correction after such period, if the BCNR finds the correction to be in the interest of justice. Id. In the instant case, there is no claim that Dougherty was unaware of the status of his discharge. Consequently, the three-year period expired three years after Dougherty’s 1957 discharge and the statute of limitations expired on October 26, 1961. The review by the BCNR was premised on its waiving the statute in the interest of justice.⁵ Dougherty seeks review of this action of the BCNR.

Judicial review of action by an agency such as the BCNR is provided for in the Administrative Procedure Act, 5 U.S.C. § 702 (1977).⁶ The action is governed by the six-year statute of limitations codified at 28 U.S.C. § 2401 (1978).⁷ If the six-year statute of limitations runs from the date of discharge, then review by the district court would be precluded. If the statute of limitations does not begin to run until the BCNR acts, then this suit is timely. We must decide when the statute of limitations begins to run in a case challenging the action of the BCNR as arbitrary and capricious where monetary damages are not at issue.

III.

After careful consideration of the case history and relevant cases in federal courts, we hold that the six-year statute of limitations for the instant action did not begin to run until the BCNR issued its final decision. Consequently, the instant action is not time-barred.

In applying the statute of limitations, we must determine what action the district court is being asked to review. Is it reviewing the 1957 discharge or the 1984 action of the BCNR refusing to correct the records relating to that discharge? The standard of review of the district court is instructive. The district court is to set aside the BCNR action if it finds it to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”⁸ 5 U.S.C. § 706 (1977). The review is generally limited to consideration of the administrative record. 5 U.S.C. § 706 (1977). See Florida Power & Light Co. v. Lorion, — U.S. —, 105 S.Ct. 1598, 1607, 84 L.Ed.2d 643 (1985); Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973). The fact that the district court must base its decision on an administrative record compiled in 1984 relating to a proceeding held in 1984 suggests that the statute of limitations should not begin running based on any other event. While the basic factual issue centers around something which occurred many years earlier, the wrong asserted in the district court is not the discharge itself but its treatment by the BCNR. Consequently, the case involves not a succession of witnesses who will seek to remember what happened nearly thirty years ago but, rather, an analysis of an administrative record to determine if a particular result is an arbitrary and capricious conclusion.

The Supreme Court stated in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 861 (1967), that “a survey of our cases shows that judicial review of a final agency action by an aggrieved person will not be cut off unless there is a persuasive reason to believe that such was the purpose of Congress.” Id. at 140, 87 S.Ct. at 1511. In the instant case, the BCNR decided to waive the statute of limitations and address the merits of Dougherty’s claim. Having done so, given the facts and exigencies of this case, we see no persuasive reason to cut off judicial review of the 1984 administrative action of the BCNR. See Geyen v. Marsh, 775 F.2d 1303 (5th Cir.1985).

While we know of no binding precedent, our decision is consistent with those of other courts faced with this issue. In Geyen v. Marsh, supra, plaintiff had been given an undesirable discharge by the Army in lieu of a court martial after going AWOL. Ten years later he petitioned the Army Board for Correction of Military Records (“ABCMR”).⁹ The ABCMR denied his claim and Geyen sought review in the district court. The district court dismissed, based on the six-year statute of limitations, 28 U.S.C. § 2401 (1978). The Court of Appeals for the Fifth Circuit reversed, holding that an action for review of a decision of a military board such as the ABCMR and BCNR accrues at a different time than an action directly challenging the circumstances of a discharge. The Fifth Circuit found that review of the ABCMR decision was timely. We agree with the Fifth Circuit that the cause of action for review under the arbitrary and capricious standard of the military board’s decision in a non-monetary case accrues at the time of the unfavorable ruling by the BCNR. Accord, Schmidt v. United States, 13 M.L.R. 2075 (N.D.Cal.1984); Kaiser v. Secretary of Navy, 525 F.Supp. 1226 (D.Colo.1981); Mulvaney v. Stetson, 470 F.Supp. 725 (N.D.Ill.1979).

The BCNR has cited numerous cases for the proposition that the cause of action accrues at the time of discharge. We have examined these cases and find them to be distinguishable. The instant case is not a pay case. Counsel for Dougherty specifically acknowledged, both in the district court and in oral argument before this court, that Dougherty is not seeking monetary damages. The suit is merely to change the status of the discharge. The equitable considerations governing a corrective action are quite different than those governing a monetary action. For example, there is no danger of accumulating damages by delaying bringing a corrective action. Since the instant case is not an action for monetary damages, it is unnecessary for us to analyze and reconcile the cases for monetary damages.¹⁰

We have not overlooked Walters v. Secretary of Defense, 725 F.2d 107 (D.C.Cir. 1983), where the Court of Appeals for the District of Columbia Circuit found a class action seeking to upgrade discharges barred by the six-year statute of limitations. In that case, review of the discharge itself was sought and not review of any military correction board action. The court said: “We need not and do not decide whether, had a named plaintiff sought and received a final decision from a discharge review board, the statute of limitations could have been tolled in any way.” Id. at 115. Similarly, in Nichols v. Hughes, 721 F.2d 657 (9th Cir.1983), the court found that the plaintiff’s cause of action had accrued at the time of discharge and was thus time-barred. While plaintiff had sought and obtained relief from the BCNR, the district court action there under review challenged the original discharge and not the BCNR decision. The plaintiff was not challenging the BCNR action because he had received a favorable ruling from that Board. These two cases are distinguishable from this record because they challenged the discharge itself, while the instant case only challenges a decision of the BCNR.

IV.

Accordingly, we will vacate the order of the district court, dismissing the complaint, and remand for further consideration in light of this opinion.

1 . See Geyen v. Marsh, 775 F.2d 1303 (5th Cir. 1985). The district court stated in its opinion in the instant case: "In short, federal case law does not support an exception to the statute of limitations for a plaintiff such as Mr. Dougherty." (Plaintiffs App. at 39). Had the district court been presented with cases such as Geyen, supra; Schmidt v. United States, 13 M.L.R. 2075 (N.D. Cal.1984); and Mulvaney v. Stetson, 470 F.Supp. 725 (N.D.Ill.1979), its inquiry would have been different.

We also note in reviewing the record that the pleadings were confusing and difficult to interpret. The district court very ably discerned the proper issue. It is clear from reading the transcript of the oral opinion of the district court delivered from the bench that the statute of limitations issue was properly presented to the court.

2 . Dougherty v. United States Navy Board for Correction of Naval Records, Civil No. 83-4598, (D.N.J. Dec. 10, 1984).

3 . The statute provides:

"Except as provided by the Contract Disputes Act of 1978, every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues____”

28 U.S.C. § 2401(a) (1985 Supp.).

4 . The statute provides:

"No correction may be made under [this section] unless the claimant or his heir or legal representative files a request therefor before October 26, 1961, or within three years after he discovers the error or injustice, whichever is later. However, a board established under [this section] may excuse a failure to file within three years of discovery if it finds it to be in the interest of justice."

10 U.S.C. § 1552(b) (1983).

5 . The BCNR denied the application, but it did so on the merits of Dougherty’s claim. We need not decide today whether a decision by the BCNR that it is not in the interest of justice to even consider a correction would be reviewable.

6 . The statute provides:

“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____”

5 U.S.C. § 702 (1977).

7 . See footnote 3, supra.

8 . This standard is referred to in this opinion as the arbitrary and capricious standard.

9 . The ABCMR is analogous to the BCNR. See footnote 1 of the Geyen opinion.

10 . For examples of monetary damages cases, see Friedman v. United States, 310 F.2d 381 (Ct.Cl. 1962), cert. denied, 373 U.S. 932, 83 S.Ct. 1540, 10 L.Ed.2d 691 (1963); June v. Secretary of Navy, 557 F.Supp. 144 (M.D.Pa.1982). See also 5 U.S.C. § 702 (1977) (Judicial review under Administrative Procedure Act differentiates actions which seek "relief other than money damages.”).