Pere Jarboe v. Department of Health and Human Services, 2023 MSPB 22

Background:

The Department of Health and Human Services (through OMHA) filed a chapter 75 complaint in Jan. 2018 seeking removal of ALJ Pere J. Jarboe for alleged failures to properly adjudicate Medicare appeals (including >30 legally deficient decisions and an ex parte contact), supervise staff, and follow supervisory instructions.
A hearing ALJ found the agency proved three of five adjudication specifications and both failure-to-follow-instructions specifications, but proved none of the supervision allegations; Jarboe’s affirmative defenses were rejected.
The ALJ applied Douglas factors and concluded there was good cause to remove Jarboe; the initial decision incorrectly stated Jarboe “is removed” from his ALJ position.
On review Jarboe challenged OMHA’s delegated authority to file the complaint, alleged improper consideration of personnel records (Privacy Act), claimed the ALJ should be disqualified, and contested the ALJ’s delegated authority to hear the case.
The Board denied Jarboe’s challenges, modified the initial decision to address delegation and recusal issues, and clarified that the Board may only authorize removal (the employing agency retains discretion to act).

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Authority to file complaint (delegation to OMHA)	Jarboe: OMHA lacked statutory delegated authority from the HHS Secretary to initiate removal.	Agency: Complaint was filed by HHS attorneys on behalf of the agency and OMHA and is consistent with 5 U.S.C. § 7521.	Board: Complaint filing was consistent with § 7521; any delegation defect would require proof of harmful error, which Jarboe did not show.
Use of old personnel records / Privacy Act	Jarboe: ALJ improperly considered personnel records that should have been destroyed.	Agency: Records were admissible and material to the case.	Board: Jarboe failed to show how consideration prejudiced his rights; no basis for reversal.
Penalty / prior counseling sufficiency	Jarboe: Only a counseling was taken previously, so removal was inappropriate.	Agency: Board determines good cause under Douglas factors; agency retains discretion to impose or not impose removal after Board authorization.	Board: ALJ correctly applied Douglas factors; found misconduct serious enough to authorize removal but clarified Board does not itself remove—agency retains discretion.
Request to disqualify presiding ALJ	Jarboe: ALJ’s public comments about Lucia, role in professional organizations, and prior employment with a witness created appearance of partiality.	Agency: ALJ’s statements and affiliations do not create reasonable question about impartiality.	Board: Denied disqualification and interlocutory certification; applied objective § 455(a)-style standard and found no reasonable basis to question impartiality.

Key Cases Cited

Douglas v. Veterans Administration, 5 M.S.P.R. 280 (established Douglas factors for penalty assessment)
Canary v. U.S. Postal Service, 119 M.S.P.R. 310 (harmful procedural error standard)
Panter v. Department of the Air Force, 22 M.S.P.R. 281 (adjudicatory error reversible only if prejudicial)
Shoaf v. Department of Agriculture, 97 M.S.P.R. 68 (adopted 28 U.S.C. § 455(a) objective standard for disqualification)
Lee v. Environmental Protection Agency, 115 M.S.P.R. 533 (applied disqualification standard to ALJs)
Greenberg v. Board of Governors of Federal Reserve System, 968 F.2d 164 (discussed appearance-of-impropriety standard for agency ALJs)
Long v. Social Security Administration, 113 M.S.P.R. 190 (prior Board statements on penalty selection)
Steverson v. Social Security Administration, 111 M.S.P.R. 649 (prior Board statements on penalty selection)
Lucia v. Securities & Exchange Commission, 138 S. Ct. 2044 (ALJ appointment clause issue cited as background)
Perry v. Merit Systems Protection Board, 582 U.S. 420 (jurisdictional guidance for district-court review of discrimination claims)