Code v. McHugh
139 F. Supp. 3d 465
D.D.C.2015Background
- Code, a former Navy lieutenant (honorably discharged; IRR member), was notified in 2010 by Defense Finance and Accounting Service (DFAS) of a $44,200 debt tied to an Army CID Report of Investigation alleging fraudulent school enrollment for his children at Ft. Buchanan, Puerto Rico.
- The U.S. Attorney declined prosecution in 2008; no command disciplinary action followed. CID referred the Report to DFAS for collection in 2010.
- Code sought amendment of the CID Report under the Privacy Act; CID denied amendment and an operational-review request in 2013.
- In Sept. 2013 Code petitioned the Army Board for Correction of Military Records (ABCMR) to expunge/amend the Report (or mark offenses "unfounded"), remove a CRDA, and cancel the DFAS debt; ABCMR denied relief on Aug. 12, 2014.
- Code filed this APA suit challenging ABCMR as arbitrary and capricious, alleging (inter alia) that ABCMR applied the wrong regulation re: school eligibility and failed to address CID's referral to DFAS.
- The Secretary moved for a voluntary remand so ABCMR can correct its mistakes; the Court granted remand and stayed the case to allow ABCMR to reconsider.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether remand is appropriate for ABCMR to correct errors in its decision | Code: errors (wrong regulation, improper burden, failure to address referral) are material but remand won't fix the ABCMR's alleged improper standard of review | Sec.: ABCMR identified mistakes (wrong regulation; failure to review DFAS referral) and should be allowed to reconsider on remand | Court: Granted voluntary remand and stay — agency raised substantial, legitimate concerns warranting remand |
| Whether ABCMR applied the correct regulation for Ft. Buchanan school eligibility | Code: ABCMR misapplied standard and imposed unreasonable burden; remand may not change that | Sec.: ABCMR applied an incorrect DoD education regulation (overseas rule) to a domestic Puerto Rico school — a correctable mistake | Court: Error in citing wrong regulation is substantial; remand appropriate to correct it |
| Whether ABCMR should have addressed CID's referral of the Report to DFAS | Code: ABCMR lacked authority to remedy the referral except via amending the Report; remand would be pointless | Sec.: ABCMR failed to consider referral believing operational review pending; referral is core to the debt-collection issue and should be reviewed or scope clarified | Court: ABCMR should consider the referral issue on remand and clarify its authority if needed |
| Whether the Secretary's remand request is a delay tactic or in bad faith | Code: remand could be futile because ABCMR may repeat error; equities favor denial | Sec.: Request is to allow agency to correct identifiable errors, not to evade review | Court: Remand is not frivolous or in bad faith and is consistent with judicial economy; remand granted |
Key Cases Cited
- Sierra Club v. Van Antwerp, 560 F. Supp. 2d 21 (D.D.C. 2008) (discusses voluntary remand and agency reconsideration)
- Carpenters Indus. Council v. Salazar, 734 F. Supp. 2d 126 (D.D.C. 2010) (voluntary remand promotes judicial economy when agency may correct errors)
- SKF USA Inc. v. United States, 254 F.3d 1022 (Fed. Cir. 2001) (standards for when remand is appropriate, including agency reconsideration without confessing error)
- Ethyl Corp. v. Browner, 989 F.2d 522 (D.C. Cir. 1993) (courts prefer allowing agencies to cure mistakes before judicial review)
- Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998) (rejects late, tactical remand requests designed solely to avoid review)