Strand v. United States, 127 Fed. Cl. 44

Background

Walter N. Strand III enlisted in the Navy in 1988, served ~19½ years with commendations and strong performance evaluations, but was convicted in 2008 of offenses arising from a domestic violence incident and administratively separated with a general (under honorable conditions) discharge in 2009.
After release from incarceration, Strand sought and obtained partial relief from the Naval Discharge Review Board, which upgraded his characterization from "under other than honorable" to "general under honorable conditions." He then applied to the Board for Correction of Naval Records (BCNR) for an honorable retirement with six months’ credited service.
The BCNR unanimously recommended correcting Strand’s record to show honorable retirement with 20 years’ service (crediting ~6 months) citing his long service, awards, and post‑service conduct.
The Executive Director of the BCNR referred the recommendation for Secretarial review; Assistant General Counsel Robert Woods (acting on delegated authority) overruled the BCNR in a two‑paragraph memorandum, citing (1) inconsistency with Navy core values/practice and (2) an asserted history of Family Advocacy Program/domestic violence involvement in Strand’s record.
Strand sued in the Court of Federal Claims seeking correction of records, back pay and future pay; the Government counterclaimed for alleged overpayments (~$79,626.61). The Court reviewed whether the Assistant General Counsel’s reversal was arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Subject‑matter jurisdiction to review BCNR/Secretarial action	Strand: Court has jurisdiction under Tucker Act and APA to review and grant corrective relief and monetary relief if money‑mandating source exists	Gov: Some issues nonjusticiable or waived; monetary relief requires money‑mandating statutes	Court: Jurisdiction exists under Tucker Act + APA; money remedy supported by 10 U.S.C. § 6333 and 37 U.S.C. § 204 for limited recoupment issue
2. Standard of review for Secretary overruling BCNR	Strand: Secretary’s reversal must be set aside if arbitrary, capricious, unsupported by substantial evidence	Gov: Secretary may reverse where evidence permits varying interpretations	Court: Apply APA arbitrary-and‑capricious standard; Secretary may differ but cannot arbitrarily reject board findings without justification
3. Whether Assistant General Counsel’s two‑sentence reversal was justified	Strand: Reversal lacked record support and explanation; therefore arbitrary and capricious	Gov: Reversal appropriate based on core values and alleged FAP history	Court: Reversal arbitrary, capricious, abuse of discretion, and unsupported by substantial evidence because rationale was vague and relied on an unsupported military officer statement
4. Remedy and counterclaim for overpayments	Strand: Entitled to retirement, back pay, and denial of Government’s counterclaim	Gov: Entitled to recoup overpayments plus interest/penalties	Court: Ordered Navy to implement BCNR recommendation and pay retirement/back pay; granted counterclaim in part allowing up to $79,626.61 to be deducted but denied interest/fees/penalties

Key Cases Cited

Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (standards for court review of administrative record)
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (jurisdictional threshold principle)
Hertzog v. United States, 167 Ct. Cl. 377 (1964) (Secretary must state policy reasons when overruling corrections board and cannot rely solely on military advice)
Weiss v. United States, 187 Ct. Cl. 1 (1969) (Secretary may not overrule civilian board on military advice when board findings are justified by the record)
Strickland v. United States, 423 F.3d 1335 (Fed. Cir. 2005) (final secretarial authority must be exercised in accordance with law)
Betts v. United States, 145 Ct. Cl. 530 (1959) (arbitrary decisions lacking any reason are to be disregarded)