Code v. McHugh
Civil Action No. 2015-0031
D.D.C.Dec 19, 2017Background
- Code, a Navy lieutenant assigned to Fort Buchanan, Puerto Rico (2005–2007), enrolled his three children in the local DODEA school; he applied for extension of orders which was denied, but submitted a school application stating his orders expired July 2008.
- CID investigated after Code moved to Texas and the children remained enrolled; CID issued an ROI concluding Code made false statements and obtained services under false pretenses, estimating a $44,200 loss; USAO declined prosecution; DFAS sought collection based on CID materials.
- A CID Agent-in-Charge (not in Code’s chain of command) completed a Commander’s Report of Disciplinary or Administrative Action (CRDA) assessing restitution; Code says that form was unauthorized.
- Code petitioned the Army Board for Correction of Military Records (ABCMR) to amend/expunge the ROI, expunge the CRDA, and cancel the DFAS debt; ABCMR denied relief except it relabeled larceny as obtaining services under false pretenses.
- Code sued under the APA; the district court reviewed ABCMR’s February 1, 2017 decision and granted-in-part and denied-in-part cross-motions for summary judgment: it upheld ABCMR findings on titling, Privacy Act disclosure to DFAS, and debt valuation, but ordered expungement of the CRDA as arbitrary and capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ABCMR erred in refusing to "untitle" Code (i.e., remove his name from ROI title) under the DOD "credible information" standard | Code: no credible evidence he intentionally misrepresented orders; CID investigation flawed and relied on stale/contradicted sources | Govt/ABCMR: CID had credible, contemporaneous evidence Code knew his orders would change and thus made false statements; ABCMR applied correct DODI 5505.7 standard | Court: Upheld ABCMR — titling supported by credible information; not arbitrary or capricious |
| Whether CID violated the Privacy Act by disclosing the ROI to DFAS | Code: ROI disclosure to DFAS lacked Privacy Act exception; DFAS didn’t need ROI | Govt/ABCMR: DFAS had a "need-to-know" as DOD debt-collector; DOD policies and MOA support disclosure for debt recoupment | Court: Upheld ABCMR — disclosure exempt under need-to-know; ABCMR’s rationale reasonable |
| Whether ABCMR erred in affirming the $44,200 debt valuation | Code: Using tuition rates is inappropriate because Fort Buchanan does not charge tuition; loss should be marginal cost (negligible) | Govt/ABCMR: Valuation using DODEA tuition rates is reasonable; Code failed to meet burden to show error or injustice | Court: Upheld ABCMR — calculation reasonable and not arbitrary |
| Whether ABCMR erred by refusing to expunge CRDA completed by an unauthorized individual | Code: CRDA clearly completed by a CID agent without authority; this is an undisputed regulatory error requiring correction | Govt/ABCMR: Presumption of regularity; Code failed to prove error/injustice because it’s possible an authorized commander directed completion | Court: Reversed ABCMR on this point — expungement ordered because form was completed by unauthorized person and ABCMR’s speculation otherwise was arbitrary and capricious |
Key Cases Cited
- American Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir.) (describing scope of APA review in agency-record cases)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (explaining arbitrary and capricious standard)
- Kreis v. Secretary of the Air Force, 866 F.2d 1508 (D.C. Cir.) (applying heightened deference to military board decisions)
- Coburn v. Murphy, 827 F.3d 1122 (D.C. Cir.) (declining to resolve deference question but affirming Army action under APA)
- Haselwander v. McHugh, 774 F.3d 990 (D.C. Cir.) (board must correct clear injustices in service records)
- Bigelow v. Department of Defense, 217 F.3d 875 (D.C. Cir.) (interpreting Privacy Act "need-to-know" exception)