Armstrong v. Dept. of the Treasury

United States Court of Appeals for the Federal Circuit
2009-3155
WILLIAM H. ARMSTRONG,
Petitioner,
v.
DEPARTMENT OF THE TREASURY,
Respondent.
Kevin E. Byrnes, Schnader Harrison Segal & Lewis, LLP, of Washington, DC,
argued for petitioner.
Christopher A. Bowen, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for respondent. With him
on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director,
and Kenneth M. Dintzer, Assistant Director.
Appealed from: Merit Systems Protection Board
United States Court of Appeals for the Federal Circuit
2009-3155
WILLIAM H. ARMSTRONG,
Petitioner,
v.
DEPARTMENT OF THE TREASURY,
Respondent.
Petition for review of the Merit Systems Protection Board in consolidated
case nos. DC0752080188-C-1 and DC0752080188-I-1.
__________________________
DECIDED: January 4, 2010
__________________________
Before MICHEL, Chief Judge, PLAGER, and LINN, Circuit Judges.
MICHEL, Chief Judge.
William Armstrong filed an untimely petition for review with the Merit Systems
Protection Board (MSPB), seeking review of the Administrative Judge’s (AJ’s) decision
dismissing his case under a settlement agreement. The MSPB declined to decide
Armstrong’s petition for review, finding that, because Armstrong’s new evidence of fraud
in the procurement of the agreement was insufficient to render the agreement invalid, it
would not excuse the untimeliness of his petition. Because the MSPB improperly
conflated the issue of timeliness with the ultimate decision on the merits of Armstrong’s
claim, we vacate the MSPB’s decision on the petition for review, and we remand for
further proceedings to determine whether the MSPB should waive its timeliness
requirement to permit Armstrong’s case to be decided on the merits.
The MSPB also held that Armstrong abandoned any appeal from the AJ’s
separate decision that Armstrong’s employing agency, the Treasury Inspector General
for Tax Administration (TIGTA), had not breached the settlement agreement. Because
we agree with the MSPB that Armstrong abandoned the appeal of that decision, we
affirm the MSPB with respect to its compliance decision.
I. BACKGROUND
William Armstrong served as a GS-14 criminal investigator for the Treasury
Inspector General for Tax Administration (TIGTA). In October 2006, TIGTA began
investigating him for unlawfully accessing computer databases. On September 4, 2007,
TIGTA proposed Armstrong’s removal, and TIGTA decided on December 4, 2007, to
remove Armstrong effective December 11, 2007. Armstrong v. Geithner, 610 F. Supp.
2d 66, 68 (D.D.C. 2009).
During the investigation and the disciplinary proceedings regarding his position
with TIGTA, Armstrong sought other employment with the government. On August 20,
2007, the Department of Agriculture (USDA) sent Armstrong a letter confirming its offer
of a GS-14 criminal investigator position, with a start date of September 2, 2007.
Shortly after USDA sent the August 20 letter, the USDA received six anonymous letters
accusing Armstrong of serious misconduct. Armstrong alleged that these letters were
written by various employees of TIGTA. Apparently in response to these letters, the
USDA placed a hold on its job offer to Armstrong. On January 2, 2008, USDA
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requested information from TIGTA regarding the status of Armstrong’s disciplinary
matter.
Armstrong appealed his December 4 removal to the MSPB, and the case was
settled on February 7, 2008. The settlement agreement substituted a thirty-day
suspension for the removal, required TIGTA to generate a new SF-50 documenting the
suspension and the charges supporting it, required TIGTA to remove from Armstrong’s
record any documentation concerning the rescinded removal, prohibited TIGTA from
giving the USDA any information about the rescinded removal, required employment
inquiries about Armstrong to be routed through a particular office, and limited TIGTA’s
response to any employment inquiries about Armstrong to Armstrong’s dates of
employment, grades, salary information, and classification series. The settlement
agreement did not prohibit TIGTA from responding fully and truthfully to inquiries in
suitability or security clearance background investigations. As part of the settlement,
TIGTA and Armstrong negotiated TIGTA’s response to the January 2 USDA request for
information about the disciplinary action against Armstrong, specifying that TIGTA
would tell USDA only that Armstrong had been suspended from duty and pay for thirty
days and had remained on the rolls in the position of assistant special agent in charge.
The AJ entered the parties’ settlement agreement into the record and dismissed the
case due to settlement on February 19, 2008.
At the same time that Armstrong’s initial MSPB appeal was pending, Armstrong
also was suing TIGTA in the U.S. District Court for the District of Columbia, alleging that
TIGTA had violated the Privacy Act and that individual TIGTA officials had defamed him
when the anonymous letters were sent to USDA. On March 18, 2008, TIGTA filed its
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initial disclosures in that suit. Armstrong believed the initial disclosures violated the
MSPB settlement agreement, because they contained statements about what TIGTA’s
witnesses would say at trial about why Armstrong was originally removed from his
position. In the course of discovery during the Privacy Act litigation, TIGTA turned over
to Armstrong some reports prepared by TIGTA investigators. Armstrong claims that
these reports showed that TIGTA’s investigators met with Kathy Horsley, the USDA
hiring official, in or around August and September 2007, twice in December 2007, and
once in January 2008.
Armstrong believes that the failure of TIGTA to disclose to Armstrong these
contacts between TIGTA and USDA, together with TIGTA’s February 2008
representation that TIGTA had had no contact in 2008 with USDA, constitutes fraud by
TIGTA. Thus, he believes that the settlement agreement in his initial MSPB appeal was
obtained through fraud and should not be enforced, and his original MSPB complaint
should be reinstated. On May 28, 2008, Armstrong filed a pleading with the MSPB to
this effect. In the alternative, Armstrong sought a holding that TIGTA had breached the
settlement agreement by allowing or instructing its investigators to speak to Ms. Horsley
in August 2007, September 2007, December 2007, and January 2008.
The AJ treated the May 28 filing as a petition for enforcement of the settlement
agreement. She noted that there were two avenues for reviewing a settlement
agreement. First, if Armstrong wished to argue that the agreement was invalid because
it was obtained by fraud or coercion or was entered into through mutual mistake, that
argument could only be raised in a petition to the full Board for review of the initial
decision by the AJ to dismiss the MSPB appeal based on the settlement agreement.
2009-3155 4
Second, if Armstrong wished to challenge the agency’s compliance with the terms of the
agreement, he could do so by filing a petition for enforcement with the regional office
that dismissed the MSPB appeal based on the settlement agreement. Because
Armstrong had filed with the regional office, the AJ found that the proper response was
to treat the May 28 filing as a petition for enforcement (focused on the breach issue)
rather than as a petition for review (focused on the fraud issue) and to inform Armstrong
that he could file a separate petition for review with the full Board. The AJ then
proceeded to deny the petition for enforcement because any improper contacts between
TIGTA and USDA were alleged to have occurred no later than January 2, 2008, while
the settlement agreement was executed on February 7, 2008. Because the alleged
breaching acts occurred before the contract was executed, those acts could not
constitute a breach. The AJ’s decision was issued July 14, 2008.
On August 12, 2008, Armstrong filed with the full MSPB a petition for review of
the settlement agreement, seeking to set aside the agreement on the grounds that the
agreement was a product of fraud and misrepresentation. The clerk of the MSPB told
Armstrong that the petition would be treated as seeking both review of the settlement
agreement and review of the July 14 compliance decision denying the petition for
enforcement. Despite this, Armstrong did not make any argument concerning the
compliance decision. With respect to the settlement agreement, the MSPB treated the
petition for review as a petition to review the February 19, 2008 decision of the AJ to
dismiss the case due to the settlement agreement. Because the MSPB’s regulations
required such a petition to be filed within 35 days after the decision for which review
was sought, the MSPB required Armstrong to file a motion asking the MSPB to waive
2009-3155 5
the time limit for good cause, along with a sworn statement or affidavit in support of the
“good cause” argument. Armstrong filed such a motion and statement.
The MSPB first considered whether to waive its time limit for filing the petition for
review of the settlement decision. The MSPB treated Armstrong’s original May 28,
2008 petition (which had been filed in the wrong place for a petition for review of the
settlement agreement and which had a title that suggested it should be treated as a
petition for enforcement of TIGTA’s compliance with the settlement agreement, rather
than a petition for review of the settlement agreement) as the operative filing for
timeliness purposes, because Armstrong acted with due diligence from that point
forward. That May 28 filing still came 99 days after the February 19 decision. The
MSPB held that it would waive the 35-day time limit if Armstrong could point to new
evidence that was not available before the original decision, that was discovered after
the original decision, and that was likely to invalidate the settlement agreement because
it showed fraud or misrepresentation. The MSPB then found that the evidence
Armstrong presented was insufficient to show any misrepresentation by TIGTA.
In coming to this conclusion, the MSPB reviewed each of the allegedly improper
contacts between TIGTA and USDA to determine whether any one of them contradicted
TIGTA’s representations during the settlement negotiations. First, TIGTA stated in a
February 5, 2008 email to Armstrong’s lawyer that it was unaware of any contacts
between TIGTA and USDA after December 2007, so this statement could not mislead
Armstrong (or any reasonable person) as to the existence of contacts between the
agencies in or before December 2007. This eliminated any of the contacts that
Armstrong alleged occurred in August, September, or December 2007. Second, the
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contact between USDA and TIGTA that occurred during December 2007 appeared from
Armstrong’s evidence to be an innocent conversation about Armstrong’s Privacy Act
suit, not a conversation intended to convince USDA to rescind Armstrong’s job offer.
Third, the MSPB found that the one non-disclosed post-2007 contact between TIGTA
and USDA (which occurred on January 10, 2008) was, like the December 2007 contact,
merely an interview with a USDA employee regarding TIGTA’s defense of Armstrong’s
Privacy Act suit. Fourth, the MSPB found that, while the January 2008 contact
contradicted TIGTA’s February 5 assurance that TIGTA had had no contact with USDA
after 2007, the misrepresentation was not a knowing misrepresentation; instead, it was
due to a failure to inform the employee who drafted the February 5 email about the
January contact. Finally, the MSPB found that the USDA’s reason for placing
Armstrong’s offer on hold was not any information gleaned from improper contacts with
TIGTA employees, but was instead Armstrong’s own statements to USDA. Given that
the new evidence Armstrong uncovered would not be likely to show that he had agreed
to the settlement agreement only because of TIGTA’s fraud, the MSPB declined to
waive its time limits for raising the new evidence.
Having disposed of the petition for review of the settlement decision on these
timeliness grounds, the MSPB proceeded to consider Armstrong’s petition for review of
the AJ’s July 14 compliance decision. Because Armstrong merely disagreed with the
AJ’s decision without providing any argument as to why that decision was incorrect, the
MSPB held that Armstrong’s petition for review of the compliance decision failed to
meet the MSPB’s criteria for review under 5 C.F.R. § 1201.115(a), (d). It therefore
denied Armstrong’s petition for review of the compliance decision.
2009-3155 7
Following the March 6, 2009 decision of the MSPB, Armstrong filed the present
appeal. We have jurisdiction under 28 U.S.C. § 1295(a)(9) and 5 U.S.C. § 7703(b)(1).
II. DISCUSSION
A. Timeliness of the Petition for Review
We first examine the MSPB’s decision that Armstrong could not be permitted to
file his untimely petition for review. A petition for review of an AJ’s decision is required
to be filed with the full MSPB within 35 days. 5 C.F.R. § 1201.114(d). The MSPB has
discretion, though, to waive regulatory requirements, including the 35-day time limit, if a
party requests such a waiver and shows good cause for waiving the requirement. 5
C.F.R. § 1201.12 and § 1201.114(f). The regulations and statutes governing the MSPB
do not define what constitutes “good cause” for waiving the timeliness requirement. The
MSPB has previously held that “[t]he discovery of new evidence may establish good
cause for the untimely filing of a petition for review ‘if the evidence was not readily
available before the close of the record below, and is of sufficient weight to warrant a
different outcome from that of the initial decision.’” Jones v. Dep’t of Transp., 69
M.S.P.R. 21, 26 (1995) (quoting Boyd-Casey v. Dep’t of Veterans Affairs, 62 M.S.P.R.
530, 532 (1994)). This same standard has been applied by the MSPB in other cases as
well. See, e.g., De La Gal v. Dep’t of Justice, 79 M.S.P.R. 396, 399 (1998). Both Jones
and De La Gal were affirmed by the Federal Circuit in non-precedential decisions. De
La Gal v. Merit Sys. Prot. Bd., 194 F.3d 1336 (Fed. Cir. 1998) (table); Jones v. Dep’t of
Transp., 111 F.3d 144 (Fed. Cir. 1997) (table). In light of this court’s prior implicit
acceptance of the MSPB’s standard for waiving the timeliness requirement in light of
new evidence, we cannot say that it was wrong for the MSPB to consider whether
2009-3155 8
Armstrong’s new evidence was “of sufficient weight to warrant a different outcome from
that of the initial decision.”
But our approval of this standard does not mean that satisfying it is the only way
that a petitioner may gain a waiver of the MSPB’s timeliness requirement. Certainly,
there may be cases in which satisfaction of the sufficient-to-warrant-a-different-outcome
standard is the only appropriate criterion by which to judge timeliness. In De La Gal, for
example, the evidence uncovered after the close of the original record was over 18
months old at the time the petitioner filed his petition for review. 79 M.S.P.R. at 400-01.
Given the lengthy delay between the discovery of the evidence and the filing of the
petition for review, which implied a lack of diligence on the part of the petitioner, it was
clearly appropriate for the MSPB to inquire whether it would be worthwhile to consider
the new evidence.
Here, though, we are not convinced that the record demonstrates a similar lack
of diligence on Armstrong’s part. Armstrong alleges that the first time he learned of the
allegedly improper contacts between TIGTA and USDA personnel was when TIGTA
produced its investigators’ reports during discovery in the Privacy Act suit. These were
produced on May 9, 2008. Given that the MSPB found that Armstrong’s effective
petition filing date was May 28, 2008, an alleged discovery date of May 9 suggests that
Armstrong tried to bring the newly discovered evidence to the MSPB’s attention
promptly. This prompt reaction to evidence tending to show that the settlement
agreement may have been procured through fraud should not be subject to the same
narrow standard as the dilatory reaction to similar evidence in De La Gal.
2009-3155 9
Nor is the situation here similar to that in Jones. In that case, the petitioner had
explicitly waived his argument that the settlement agreement was invalid, and the MSPB
held that, despite new evidence tending to support that theory, the argument could not
be raised after it had been waived. 69 M.S.P.R. at 26-27. Here, though, Armstrong
never departed from his argument that the new evidence showed that the settlement
agreement had been procured through fraud and should be considered void ab initio,
even though he also made the alternative argument that TIGTA had breached the
settlement agreement.
When a petitioner delays before filing a petition for review, as in De La Gal, or
when a petitioner presents new evidence supporting a theory that he previously waived,
as in Jones, justice may require waiving the timeliness requirement only when the new
evidence is likely to change the result originally reached. But where neither of these
circumstances applies, as here, we do not believe the timeliness requirement needs to
be so stringently applied. It may be that Armstrong’s new evidence will not change the
outcome; we express no opinion on whether this is so. But whether it changes the
result or not has no bearing on whether Armstrong was diligent in filing his petition after
discovering the new evidence. Because the MSPB improperly conflated the issue of
whether Armstrong should prevail on the merits of his petition with the issue of whether
his petition was timely filed, we vacate the MSPB’s decision and remand for further
proceedings. On remand, the MSPB should conduct whatever proceedings are
necessary to determine when Armstrong actually learned of the existence of the new
evidence he presents in support of the theory that the settlement agreement was
procured through fraud. If the delay between his learning of the existence of this
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evidence and his filing his petition for review does not indicate a lack of diligence, as
Armstrong alleges, then the MSPB should waive the timeliness requirement. At that
point, the MSPB may conduct whatever proceedings are necessary to determine the
merits of Armstrong’s claim.
B. Abandonment of the Appeal of the Compliance Decision
The MSPB treated Armstrong’s petition for review as presenting both the
question whether the settlement agreement should be found invalid due to fraud
(discussed above) and another question: whether TIGTA’s initial disclosures in the
Privacy Act lawsuit constituted a breach of the settlement agreement. The AJ had held
that the disclosures did not breach the agreement, and the MSPB was prepared to
consider any challenge Armstrong made to this decision, but the MSPB found that
Armstrong failed to present any argument or evidence suggesting that the AJ’s decision
was incorrect. Because of this abandonment of Armstrong’s challenge to the AJ’s
compliance decision, the MSPB refused to hear Armstrong’s challenge on this issue.
On appeal, Armstrong challenges the MSPB’s holding that he abandoned his argument
regarding the AJ’s compliance decision.
The MSPB did not abuse its discretion when it held that Armstrong had
abandoned his challenge to the AJ’s compliance decision. First, Armstrong’s petition for
review bore the docket number associated with his first MSPB case (the case that was
settled by the February 2008 agreement), rather than the docket number associated
with the AJ’s compliance decision. Second, we agree that Armstrong’s petition
contained no argument or citations to authority specifically directed to the compliance
decision, although it did express disagreement with the AJ’s findings. Third,
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Armstrong’s petition for review did not ask the MSPB to reverse the AJ’s compliance
decision. Fourth, the argument section of Armstrong’s petition is headed “Fraud;
Deception in Securing Agreement,” and it provides no argument that (or even any
asserted reasons why) the AJ’s compliance decision was wrong. For these reasons, we
hold that the Board did not abuse its discretion when it denied Armstrong’s petition for
review of the compliance decision.
In addition, Armstrong presents no argument as to the incorrectness of the AJ’s
decision that TIGTA did not breach the settlement agreement, and he presents no
argument on appeal as to the MSPB’s decision that he abandoned the argument
(beyond the simple and unsupported statement that he “did not” abandon this issue).
Thus, even if Armstrong had not abandoned his breach argument at the MSPB stage,
he has abandoned it here. We therefore affirm the MSPB’s holding that Armstrong
abandoned his appeal of the AJ’s compliance decision.
CONCLUSION
For the reasons discussed above, we affirm that portion of the MSPB’s decision
that denied Armstrong’s petition for review of the AJ’s compliance decision, and we
vacate that portion of the MSPB’s decision that held that the timeliness requirement for
Armstrong’s petition for review could not be waived. We remand to the MSPB for
further proceedings to determine whether the timeliness requirement should be waived
and for proceedings on the merits if they are warranted following the decision on the
timeliness issue.
COSTS
No costs.
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AFFIRMED IN PART, VACATED IN PART, AND REMANDED
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