Robert PAETZ, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee , 795 F.2d 1533 ( 1986 )

HATCHETT, Circuit Judge:

The principal issue presented in this appeal is whether a civil service employee had an age discrimination claim pending on May 1, 1974, the effective date of the amendment extending the Age Discrimination in Employment Act to federal employees. Finding that the claim was pending, we reverse.

I. Facts

The appellant, Robert Paetz, is a rocket expert who came from Germany to the United States in 1945 to work with Dr. Wernher Von Braun. After serving under a “Special Contract for Employment of German Nationals with the War Department in the United States,” Paetz became a citizen and a federal employee in the United States Civil Service. In 1971, Paetz was subjected to a reduction-in-force (RIF). The government downgraded him from the position of AST Launch Vehicle Project Management, GS-15, to the position of AST Technical Management, GS-12. On July 12, 1972, Paetz’s GS-12 position was terminated, and he was separated from the Civil Service. At the time of separation, Paetz was 63 years old and had accumulated 27 years of government service.

Paetz appealed both RIF actions to the Atlanta Regional Office, U.S. Civil Service Commission (CSC).¹ The Commission denied both appeals. Paetz then appealed these denials to the Board of Appeals and Review (BAR) of the CSC. On April 23, 1973, the BAR issued its final adverse decision on the second appeal. On February 18, 1974, Paetz filed a petition with the CSC to reopen and reconsider the decision of the BAR regarding the 1971 RIF. On June 11, 1974, the CSC denied the petition.

On February 12, 1975, Paetz filed an action in the United States District Court for the Northern District of Alabama seeking judicial review of the 1971 and 1972 RIF decisions. On February 1, 1977, the district court denied the government’s motion for summary judgment and remanded the case to the CSC for a new hearing. On May 20, 1977, during a preconference hearing in the Atlanta Regional Office, the CSC treated both of Paetz’s appeals as rescinded and agreed to incorporate the record of the 1971 and 1972 appeals in the new proceeding. This action is important to the disposition of this appeal.

On July 22, 1977, the CSC notified Paetz that the order of the Atlanta Regional Office of December 12, 1972, was rescinded and the case remanded. On April 6, 1978, the Atlanta office issued decisions adverse to Paetz on both RIFs.

On July 19, 1979, the MSPB rescinded both April 6, 1978, decisions and remanded the cases to the Atlanta office. On June 1, 1981, the Atlanta office decided the cases against Paetz. After an appeal by Paetz, in an order dated March 1, 1984, the MSPB modified and affirmed the 1981 decision of the Atlanta field office. In the Order and Opinion, the MSPB advised Paetz of his right to have the case further adjudicated.²

In Paetz’s original appeal to the CSC, he raised issues relating to the operation of a reduction-in-force, i.e., the definition of competitive levels and bumping rights. Paetz complained that the method of defining competitive levels failed to provide protection to senior employees. In his February 18, 1974, petition for the CSC to reopen and reconsider the BAR’s decision on the 1971 RIF, Paetz complained about three matters. He complained about (1) being denied a veteran’s preference, (2) the use of narrow competitive levels, and (3) the use of a subjective qualification test resulting in discrimination against “senior employees causing them to forfeit their bumping rights.” In his February 12, 1975, district court lawsuit seeking judicial review of the RIF decisions, Paetz alleged that the government made no effort to establish reasonable competitive levels or to protect his bumping rights “solely because of his age and years of service.” The chronology of Paetz’s case is set out in the margin.³

II. Action in District Court

In Paetz’s complaint in district court, he challenged the 1971 and 1972 RIF actions. The complaint alleges (1) that the administrative process was procedurally unfair because of delay in adjudicating the claim, (2) that Paetz was downgraded and terminated because of improper selection procedures, and (3) that Paetz was downgraded and terminated unlawfully because of his age and length of service, in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 (1983).

The district court granted summary judgment for the United States. The court listed three grounds. First, Paetz never filed an administrative claim based on age discrimination. Second, if Paetz raised age discrimination in his RIF appeals, he did not have an administrative claim pending on the effective date of the 1974 amendments which extended the ADEA’s coverage to federal employees. 29 U.S.C. § 633a (1983). Third, if Paetz claimed age discrimination in his RIF appeals and if claims were pending on the effective date of the 1974 amendments, he failed to file a lawsuit within the time allowed by the applicable statute of limitations.

Paetz filed a Motion for New Trial or in the Alternative to Alter or Amend Judgment and Transfer Cause to the United States Court of Appeals for the Federal Circuit. On May 16,1985, the district court denied the motion.

III. Issues

. We must decide two issues: (1) whether the action is time-barred and (2) whether the district court has subject matter jurisdiction- of Paetz’s claim of age discrimination.

IV. Discussion

A. Statute of Limitations

Paetz filed this ease within the statute of limitations period following the March 1, 1984, final decision. Limitations on claims against the United States do not commence to run until completion of the administrative process. Zidell Explorations, Inc. v. United States, 427 F.2d 735, 192 Ct.Cl. 331 (1970).

The government, however, contends that Paetz’s lawsuit is time-barred because he filed the 1975 district court action late. The government seeks to set the commencement date for the statute of limitations as June 11, 1974, the date of the Civil Service Commission’s final decision on Paetz’s petition to reopen. The government argues that the thirty-day limit of 42 U.S.C. § 2000e-16(c) should be applied to age claims where the claimant has pursued administrative proceedings and obtained a final decision. See Lehman v. Nakshian, 453 U.S. 156, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981) (holding that Congress patterned certain ADEA provisions after Title VII of Civil Rights Act of 1964).

We need not determine the date on which the applicable statute of limitations began to run. A statute of limitations defense is an affirmative defense. See Rule 8(c), Fed.R.Civ.P. Failure to assert such a defense in a defendant’s pleadings is a waiver. See American National Bank v. FDIC, 710 F.2d 1528 (11th Cir.1983); Jones v. Miles, 656 F.2d 103, 107 n. 7 (5th Cir. Unit B 1981). The government did not plead a statute of limitations defense in 1975; the defense is waived.

B. Subject Matter Jurisdiction

Paetz contends that district court jurisdiction is based on 5 U.S.C. § 7703(b)(2) (appeal from a final order of the MSPB in age discrimination cases), and on ADEA 29 U.S.C. § 633a(c).

Without addressing whether 5 U.S.C. § 7703(b)(2) is a grant of jurisdiction, the government contends that the district court’s jurisdiction only arises under ADEA 29 U.S.C. § 633a(c). The government argues that the district court lacks jurisdiction because Paetz did not have an age discrimination claim pending on May 1, 1974, the effective date of the ADEA amendments. The government cites Bunch v. United States, 548 F.2d 336 (9th Cir.1977) as support for this proposition. The government contends that because no allegation of discrimination is made, Paetz’s claim is exclusively within the jurisdiction of the United States Court of Appeals for the Federal Circuit. See 28 U.S.C. § 1295 and 5 U.S.C. § 7703(b)(1).

We agree with that portion of the government’s argument which states that Paetz’s petition to reopen a final decision did not destroy the finality of the CSC’s decision and transform it into a “pending” claim. The Administrative Procedures Act deems administrative action final for purposes of judicial review regardless of whether a petition for reconsideration is presented to the agency. See 5 U.S.C. § 704; see also Clark v. Goode, 499 F.2d 130 (4th Cir.1975) (racial discrimination; petition to reopen filed subsequent to a final decision of the CSC does not convert a finally adjudicated administrative claim into a “pending” claim). Paetz’s claim was not reopened or revived by the CSC before May 1, 1974, and was not pending within the meaning of Clark on May 1, 1974. Paetz’s position, therefore, is similar to the plaintiff’s position in Macellaro v. Goldman, 643 F.2d 813 (D.C.Cir.1980) (case closed before 1974 amendments not revived by post-1974 allegation of age discrimination).

Unlike the plaintiffs in Clark and Macel-laro, however, Paetz received a final decision on the merits of his age discrimination claim through administrative processes on March 1, 1984, effective April 5, 1984.⁴ Paetz cites 5 U.S.C. § 7703(b)(2) (procedure for an appeal from a final order of the MSPB in age discrimination cases) as authority for the filing of this suit. We agree that section 7703(b)(2), read with 5 U.S.C. § 7702(a)(3) supports the district court’s jurisdiction.⁵

Bunch, which the government relies on, establishes that the pendency of a case either administratively or in the district court on May 1, 1974, is sufficient for ADEA jurisdiction to exist. The Bunch court reasoned that the policies underlying Congress’s extension of ADEA to federal civil service employees allow a generous reading of the jurisdictional requirement, based on a weighing of the relative injustice to the parties. The Bunch court concludes that injustice will result if an employee who had a pending case on May 1, 1974, “cannot vindicate the longstanding policy against age discrimination in the federal competitive service.” Bunch, 548 F.2d at 339. See also 548 F.2d at 336 n. 4 (describing legislative purpose as seeking mechanism to vindicate existing public policy against discrimination in civil service on the basis of age); Womack v. Lynn, 504 F.2d 267 (D.C.Cir.1974) (describing rationale for retroactivity of employment discrimination claims in civil service as vindication through new remedy of long-standing right to be free of discrimination).

Bunch does not, as the government suggests, articulate a jurisdictional standard that excludes claims; it provides a framework for determining whether subject matter jurisdiction exists. ■ The governing factor is congressional intent, determined by considerations of substantial justice. We must therefore consider whether the policy of Congress in extending ADEA to federal civil servants would be served by allowing Paetz to appeal the final order of the MSPB, and whether injustice would be manifest in allowing him to proceed. See Bunch, 548 F.2d at 339.

The equities favor Paetz. He filed his claim in 19*71, without counsel, expecting a fair reading of his claim. He recited his years in service and described the special protections that exist in some civil services for senior civil servants. He discussed the lack of marketability of a 62-year-old engineer: “To find industrial employment now, at the age of 62, is practically impossible, it being well known that industry basically does not hire above age 45.” When he petitioned for reopening on February 18, 1974, he complained of the use of a subjective qualification test resulting in discrimination against “senior employees.”

Because of the procedural steps taken, Paetz’s discrimination claim relates back to his original filing. At the prehearing conference on May 20, 1977, the government agreed to incorporate the record of the 1971 and 1972 appeals in the new proceeding. This case has been continuously active since its original filing. We conclude that the relation back in the hearings of the age discrimination claim to the original filings vests the district court with subject matter jurisdiction. Paetz’s ADEA claim falls within the terms of Bunch as a case that was administratively pending on May 1, 1974.

We also agree with Paetz that the United States is too late in asserting its defense of lack of subject matter jurisdiction as to the prior lawsuit: we are now dealing with a new administrative record and a lawsuit resulting from the new record. The government’s jurisdictional theory, which stops with the events of 1974, collapses under the weight of subsequent case history. We construe congressional intent to determine whether subject matter jurisdiction exists. Because fairness is a factor in determining the existence of ADEA jurisdiction under Bunch, the government’s surprise in this litigation helps resolve the jurisdictional question.⁶ We must take into account the unfairness that would be manifest in denying Paetz access to court pursuant to the congressional enactment prohibiting age discrimination in the federal service.

Because the incorporation of the 1971 and 1972 records relates the ADEA suit back, substantial justice and common sense are served by recognizing that the congressional expansion of the civil servant’s remedy for age discrimination encompasses this case. The provision in 5 U.S.C. § 7702(a)(3) for judicial review provides further evidence that Congress intended to create subject matter jurisdiction broad enough to cover a case such as this one.

We hold that the district court erred in dismissing Paetz’s suit for lack of subject matter jurisdiction. In light of this disposition, we need not reach Paetz’s argument that the court abused its discretion when it failed to transfer the case to the federal circuit. If for any reason the discrimination claims are defeated, we assume that the district court will again consider whether transfer is proper.

We reverse and remand for further proceedings.

REVERSED and REMANDED.

1 . Subsequently, that office became the Atlanta Field Office, Federal Employee Appeals Authority, and is now the Atlanta Field Office, Merit Systems Protection Board (MSPB).

2 . The order stated:

The appellant may file a civil action in an appropriate U.S. District Court from the Board's final decision involving issues of prohibited discrimination. If such a civil action raises issues of discrimination based on race, color, sex, national origin, religion, or handicap, it must be received by the court no later than 30 days after the Board’s decision or the issue of discrimination becomes final.

3 . 1. August 16, 1971 — notification of downgrading.

2. July 12, 1972 — separation from Civil Service.

3. October 15, 1971 — appeal of 1971 RIF action.

4. May 3, 1972 — denial of appeal of 1971 RIF action.

5. December 7, 1972 — BAR affirms decision.

6. June 30, 1972 — appeal of 1972 RIF action.

7. December 12, 1972 — denial of appeal of 1972 RIF action.

8. December 26, 1972 — appeal to the BAR.

9. April 23, 1973 — denial of appeal.

10. February 18, 1974 — petition with Civil Service Commission to reopen and reconsider decision of BAR in connection with 1971 RIF.

11. June 11, 1974 — petition to reopen and reconsider denied.

12. February 12, 1975 — action filed in U.S. District Court seeking judicial review of both RIF's.

13. February 1, 1977 — district court order denying government’s motion for summary judgment and remanding case to the U.S. Civil Service Commission for de novo hearing.

14. May 13, 1977 — prehearing conference in which parties agree to incorporate record of 1971 and 1972 appeals in new proceeding; age discrimination identified as issue pertinent to both RIF’s.

15. July 22, 1977 — CSC rescinds December 12, 1972, order denying appeal of 1972 RIF action.

16. September 28-29, 1977 — hearing on 1971 RIF case.

17. September 30, 1977 — hearing on 1972 RIF case.

18. April 6, 1978 — decisions adverse to Paetz issued by Atlanta Field Office.

19. July 19, 1979 — MSPB rescinds April 6, 1978, decisions and remands case to Atlanta Field Office.

20. June 1, 1981 — MSPB decides , both cases adversely to Paetz.

21. March 1, 1984 — modified decision entered and made effective April 5, 1984.

22. April 4, 1984 — Paetz files civil action in United States District Court.

4 . In contrast, Clark received a denial of a request to reopen; Macellaro sought to renew a claim terminated by an unappealed final order issued before 1974 by alleging in district court a continuing pattern of discrimination.

5 . As discussed below, our decision rests on construing Congress’s intent in extending ADEA to the federal service. We need not decide whether sections 7702 and 7703 are an independent grant of jurisdiction, although we note that the Supreme Court has assumed that statutory language providing for judicial review of an administrative decision rendered after a hearing does create jurisdiction. See Califano v. Sanders, 430 U.S. 99, 108, 97 S.Ct. 980, 985, 51 L.Ed.2d 192, 201 (1977) (construing 42 U.S.C. § 405(b)). See Green v. Heckler, 742 F.2d 237, 239 (5th Cir.1984) (assuming that final decision after a hearing is basis for judicial review).

Section 7702 provides that ”[a]ny decision of the Board under paragraph (1) of this subsection shall be a judicially reviewable action----”

6 . It likewise stretches common sense to argue that the 1977 remand was for naught, and the long, hotly contested administrative proceedings, in which the government participated without objection, should be considered as never occurring. It is the 1984 order on the merits of Paetz’s claim that denied him relief. What the government could have argued or, more correctly, should have argued in the now distant 70’s cannot “sandbag” this civil servant who has been continuously pursuing his claims since 1971.