Jorge A. AVILES, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent.
No. 14-60645.
United States Court of Appeals, Fifth Circuit.
Aug. 24, 2015.
797 F.3d 457
This case demonstrates how open our courts are to litigants, so open as at times to lead to questionable litigation. This controversy has been before the district courts and this court four times. The parties are reminded that access to our courts is not unlimited. Litigation over a controversy must eventually come to an end. Further attempts to re-litigate issues related to this controversy without a substantial justification for renewing the quarrel may subject the litigants to sanctions. We VACATE the contempt findings as to Sheehan. We AFFIRM in all other respects.3
Katrina Marie Lederer, Attorney Advisor (argued), Bryan Polisuk, Washington, DC, Michael L. Salyards, Dallas, TX, for Respondent.
Emma E. Bond, Trial Atty (argued), Allison Kidd-Miller, Washington, DC, for Intervenor.
EDWARD C. PRADO, Circuit Judge:
Former IRS agent Jorge Aviles asserts that he was fired in retaliation for protected whistleblowing. Aviles alleges that he uncovered that ExxonMobil Corporation (“Exxon“) had perpetrated a $500 million tax fraud and that IRS officials covered it up. Aviles claims he disclosed this information to his supervisors and that he was ultimately fired in retaliation for this protected disclosure in violation of the Whistleblower Protection Act. An administrative law judge (ALJ) dismissed Aviles‘s appeal. The ALJ found that—aside from Aviles‘s “vague and conclusory” allegations of a cover-up—Aviles failed to allege that the government was involved in Exxon‘s alleged wrongdoing. Over a dissent, the Merit Systems Protection Board (“MSPB” or “the Board“) affirmed. Because we agree with the Board‘s finding that Aviles failed to make a nonfrivolous allegation of government involvement in Exxon‘s alleged wrongdoing, we conclude that Aviles‘s disclosure was not protected and deny his petition.
I. BACKGROUND
This is the first direct appeal to the Fifth Circuit from a Merit Systems Protection Board adjudication in the wake of the 2012 amendments to the Whistleblower Protection Act. Aviles grounds his petition for review in the drafting history of the Whistleblower Protection Act; he argues that Congress has repeatedly expanded the definition of protected whistleblowing activities. Accordingly, before reviewing the underlying facts and procedural background, we provide a brief overview of the drafting history and the statutory scheme governing Aviles‘s claim.
A. Legal Background and Statutory Framework
The Civil Service Reform Act of 1978 established statutory protections to encourage federal employees to disclose government illegality, waste, fraud, and abuse; and also established the Merit Systems Protection Board as an independent agency to adjudicate these claims.
From its inception in 1982 until recently, the Federal Circuit exercised exclusive jurisdiction over petitions for review of MSPB adjudications that involved only federal-employee whistleblower claims. King v. Dep‘t of the Army, 570 Fed.Appx. 863, 864 (11th Cir.2014) (per curiam). These claims were directly appealable to the Federal Circuit and reviewed for arbitrariness or capriciousness and for substantial evidence. Id. at 865; see also
Concerned that the Federal Circuit and the MSPB had interpreted the WPA‘s definition of protected disclosures too narrowly, Congress amended the statute in 1994. See Act of Oct. 29, 1994,
B. Factual and Procedural Background
The following factual background is essentially undisputed and is drawn from the administrative record of the MSPB adjudication. Aviles worked as an International Examiner at the IRS‘s Large and Mid-Sized Business Division in Houston, Texas. As part of his duties, Aviles worked onsite at Exxon‘s facility auditing its international tax filings. In September 2010, Aviles received a letter from the Acting Territory Manager proposing that he be “removed from his position for: 1) absence without leave for a total of 552 hours; 2) failure to follow a managerial directive to report to work; and 3) providing misleading statements in matters of official interest.” Later that year, the proposal for Aviles‘s removal was sustained, and Aviles‘s employment with the IRS ended.
In 2013, Aviles filed an individual right of action (IRA) appeal with the MSPB, asserting that he was removed in retaliation for protected whistleblowing. Specifically, Aviles alleged that he filed a complaint with the Office of Special Counsel (OSC)1 in which he explained that he had disclosed to his supervisor on February 2, 2010, “[i]ncome tax fraud and blockage of computer committed by ExxonMobil Corporation and[] the involvement by IRS management team in helping to cover it up.” Aviles also alleged that on February 16, 2010, he disclosed “income tax fraud in excess of US$ 500 million for the tax years 2006 and 2007” on the part of Exxon to the Commissioner of the IRS and other IRS officials. Aviles‘s removal process started months later in September 2010, and he was removed in November of that year.
1. MSPB Proceeding
The ALJ found that
2. The Dissent
Vice Chairman Wagner dissented, and Aviles‘s petition for review to this Court echoes many of the points raised in the dissent. Vice Chairman Wagner concluded that, in enacting the WPEA in 2012, “Congress contemplated that its protection would extend to disclosures of wrongdoing by private entities made by federal employees in the normal course of duties.” She argued that this conclusion follows from the text of § 2302(f), through which Congress “made clear that the statutory definition of a ‘protected disclosure’ includes disclosures made by a federal employee in the normal course of duties.” She bolstered her argument by relying on the legislative history, which she claims evinces Congress‘s intent in part to “overturn the ... Federal Circuit‘s decision in Willis,” a decision that, as noted, the ALJ relied on.
*
Aviles timely petitioned for review of the MSPB‘s decision directly to this Court.
II. JURISDICTION AND STANDARD OF REVIEW
As noted above, the Federal Circuit previously had exclusive jurisdiction to hear petitions for review of MSPB decisions. See Williams v. Wynne, 533 F.3d 360, 373 n. 12 (5th Cir.2008) (citing a previous version of
Ordinarily, we review the merits of whistleblower-retaliation claims presented to the MSPB based solely on the administrative record “and will uphold the Merit Systems Protection Board‘s determinations unless they are clearly arbitrary and capricious, unsupported by substantial evidence or otherwise not in accordance with law.” Williams, 533 F.3d at 373. But this Court has not yet had an opportunity to review a threshold jurisdictional determination.
Since this Court has not previously regularly reviewed MSPB decisions, we look to the Federal Circuit for guidance. The Federal Circuit reviews de novo the question whether the MSPB had jurisdiction to adjudicate a case, reasoning that “[w]hether jurisdiction exists is a question of law.” Waldau v. Merit Sys. Prot. Bd., 19 F.3d 1395, 1398 (Fed.Cir.1994).3
However, the Federal Circuit‘s approach to MSPB jurisdictional determinations may have been called into question by the Supreme Court‘s recent decision in City of Arlington, Texas v. FCC, 569 U.S. 290, 133 S.Ct. 1863, 185 L.Ed.2d 941 (2013). The Court explained that “the distinction between ‘jurisdictional’ and ‘nonjurisdictional’ interpretations is a mirage,” id. at 1868, and it held that ”Chevron[, U.S.A.,
In light of City of Arlington, we assume without deciding that de novo review applies, consistent with the Federal Circuit‘s practice; as explained below, we would deny the petition under either standard.
III. LEGAL STANDARD
There is an initial dispute about the petitioner‘s burden to establish threshold jurisdiction. To establish MSPB jurisdiction over an IRA appeal, the burden is on the petitioner, and the petitioner “must make nonfrivolous allegations ... with regard to the substantive jurisdictional elements applicable to the particular type of appeal he or she has initiated.”
An allegation generally will be considered nonfrivolous when, under oath or penalty of perjury, an individual makes an allegation that:
- Is more than conclusory;
- Is plausible on its face; and
- Is material to the legal issues in the appeal.
Id.
Intervenor the Department of the Treasury (“Treasury“) contends that “the appellant bears the burden to establish jurisdiction by a preponderance of the evidence,” citing
Section 1201.56 of the regulations, placing the burden of proof on the employee with respect to “jurisdictional issues,” is plainly not concerned with the first issue of technical jurisdiction (the need for a non-frivolous allegation), but rather with the second issue (concerning the ultimate merits). It places the burden of proof on the employee at a merits hearing with respect to merits issues that are also jurisdictional issues. Thus, although the regulation characterizes the issues with which it is concerned as “jurisdictional” in nature, the regulation is directed, in fact, to the allocation of the burden of proof on the merits.
437 F.3d at 1333-34 (emphasis added) (quoting Walley v. Dep‘t of Veterans Affairs, 279 F.3d 1010, 1019 (Fed.Cir.2002)).
We agree with Aviles‘s interpretation of Garcia, which we follow as persuasive, and we conclude that Aviles need not establish jurisdiction by a preponderance of the evidence. As Garcia makes clear, section 1201.56‘s preponderance-of-the-evidence standard applies only to the merits of “constructive adverse action cases” under
We also conclude that the standard for determining whether nonfrivolous allegations are sufficient to meet the threshold jurisdictional requirement for an IRA appeal is analogous to that which we use for evaluating a motion to dismiss.4 Accord-
IV. DISCUSSION
Aviles argues (a) that Congress‘s recent amendment of the Whistleblower Protection Act expanded the scope of protected disclosures to include disclosures of purely private wrongdoing and (b) that even if only disclosures of government misconduct are protected, he non-frivolously alleged that IRS officials were complicit in Exxon‘s alleged tax fraud. We address each argument in turn.
A. Reports of Purely Private Wrongdoing as Protected Disclosures
Aviles‘s argument raises an initial issue of statutory interpretation of
(A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences—
(i) any violation of any law, rule, or regulation, or
(ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety....
Through the WPEA, Congress added subsection 2302(f)(2), which provides: “If a disclosure is made during the normal course of duties of an employee, the disclosure shall not be excluded from subsection (b)(8)....”
The Treasury Department counters that the “plain language of section 2302(b)(8) ... requires that a disclosure must evidence Government misconduct to be eligible for whistleblower protection.” Treasury interprets the legislative history of the 2012 amendments differently from Aviles and the dissent. Although the WPEA did seek to overturn several Federal Circuit decisions that had narrowed the scope of protected disclosures, Treasury argues that Congress‘s decision to overturn these decisions did not silently extend whistleblower protection to claims involving purely private conduct. Rather, Treasury concludes that the legislative history and statutory text reflect “Congress‘s intention to protect disclosures of Government misconduct.” The MSPB largely echoes these points, but also adds that, “because § 2302(f)(2) is silent on the issue of whether private misconduct ... constitutes a basis for a protected disclosure, this Court should defer to the Board‘s reasonable interpretation of the statute” under the Chevron doctrine.
We agree with Treasury and the MSPB that Congress did not intend to protect disclosures of purely private wrongdoing when it enacted the WPEA. Applying traditional principles of statutory interpretation—without deciding what deference, if any, should be afforded the Board‘s unpublished6 interpretation of the amended statute—we reject Aviles‘s interpretation of the statute to include purely private wrongdoing.7 The text indicates that the focus of the statute is government wrongdoing. See
Aviles‘s proposed interpretation is also at odds with common sense and principles of statutory interpretation. His interpretation could turn every enforcement disagreement between a subordinate and a supervisor at the IRS, FBI, Department of Justice, or other federal agency into a potential protected disclosure and an eventual whistleblower claim down the road. After all, many federal agency employees make enforcement decisions concerning private persons “during the normal course of [their] duties,” id., on a day-to-day basis in dialogue with their supervisors. If Congress intended such a significant intrusion into the settled law governing federal employment relationships, we believe it would have spoken more clearly. This comports with principles of statutory interpretation. See Barbee v. United States, 392 F.2d 532, 535 n. 4 (5th Cir.1968) (“A change of phraseology in a revision will not be regarded as altering the law where it had been settled by plain language in the statutes, or by judicial construction thereof, unless it is clear that such was the intent.” (quoting McDonald v. Hovey, 110 U.S. 619, 629, 4 S.Ct. 142, 28 L.Ed. 269 (1884))); cf. Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 318-19 (2012) (“The better view is that statutes will not be interpreted as changing the common law unless they effect the change with clarity.“).
Because we conclude that the text of the amended statute after application of ordinary principles of statutory interpretation supports the Board‘s interpretation, we need not and do not rely on the legislative history. See Carrieri v. Jobs.com Inc., 393 F.3d 508, 518-19 (5th Cir.2004) (citing United States v. Kay, 359 F.3d 738, 743 (5th Cir.2004)).8
Aviles‘s legislative-history argument is also unavailing because it is contrary to the text of the amendment. Aviles points to a Senate committee report and contends that the report is evidence that the WPEA overturns the Federal Circuit‘s decision in Willis, an opinion that the administrative judge expressly relied on.9 Aviles proposes that, therefore, by overturning Willis, Congress extended protection to disclosures of purely private wrongdoing. The disclosure in Willis did concern private wrongdoing: the petitioner complained about his supervisors’ decision “reversing [his] determination that the [private] farms failed to comply with USDA conservation plans,” 141 F.3d at 1141, and the court held that his disclosures to his immediate supervisors were not protected, id. at 1143.
But the text of the WPEA does not mention disclosures of purely private wrongdoing; if anything, the text added by the amendment reflects Congress‘s concern that language in the Willis decision could be interpreted as categorically excluding otherwise-protected disclosures from protection if those disclosures are made in the ordinary course of a federal employee‘s job duties. See
Therefore, we agree with the Board‘s conclusion that allegations of purely private wrongdoing are not protected disclosures under
B. Aviles‘s Allegations that He Engaged in a Protected Disclosure
The remaining issue in this appeal is whether Aviles “nonfrivolously” alleged a protected disclosure within the meaning of
The Ninth Circuit‘s decision in Coons v. Secretary of the U.S. Department of the Treasury is instructive. 383 F.3d 879 (9th Cir.2004). There, Coons argued he was demoted in retaliation for making protected disclosures—namely, that undisclosed IRS agents illegally shared confidential information with a taxpayer‘s lawyer and that IRS agents knowingly manually processed a large fraudulent refund for that taxpayer. Id. at 888-90. The Ninth Circuit reversed the Board‘s decision dismissing Coons‘s whistleblower claim. Id. at 891. It held that Coons‘s claim that IRS officials, “whose mission is to collect taxes, improperly processed a large, fraudulent refund for a wealthy taxpayer is an allegation of ‘gross mismanagement, a gross waste of funds, [or] an abuse of authority.‘” Id. (alteration in original) (quoting
Aviles argues that he nonfrivolously alleged that his supervisors “allowed or facilitated wrongful conduct by a private organization,” Exxon. In response to the Board‘s conclusion that his allegations were too “vague and conclusory” and lacking in the requisite specificity to be deemed “nonfrivolous,” Aviles argues that he alleged that his supervisors “ignored his disclosures of Exxon‘s alleged tax fraud” and “directed him not to divulge Exxon‘s actions.” Aviles also points to his allegation that “the [IRS management] team covered up the fraud.” Aviles‘s argument relies heavily on the Ninth Circuit‘s decision in Coons. In reply, Aviles also points to a precedential decision from the MSPB, Rumsey v. Department of Justice, 120 M.S.P.R. 259 (2013), and argues that the allegations in Rumsey “are almost identical to” his, in that “the appellant in Rumsey ... [alleged] fraudulent submittals by the state of Wisconsin, [and] that [Justice Department] officials were covering it up.”
The MSPB and Treasury counter that the Board correctly concluded that Aviles‘s “generalized assertions” of government involvement in Exxon‘s fraud “do not constitute a non-frivolous allegation of a protected disclosure.” They point out that the petitioner‘s allegations in Coons “were detailed and specific, including: that a former Regional Counsel for the IRS was using his influence to corrupt the IRS‘s collection of taxes from a taxpayer,” and
We agree with the Board‘s decision dismissing Aviles‘s appeal and deny Aviles‘s petition for review. Unlike Aviles‘s vague and conclusory allegations of a “cover up,” the allegations in the Coons case specifically implicated particular government officials. The Ninth Circuit noted that the petitioner‘s disclosures included his “concern that [a taxpayer‘s] attorney was using his influence [as a former Regional Counsel for the IRS] to corrupt the IRS‘s collection of taxes” from that taxpayer, and that “current IRS staff were sharing information illegally” with that taxpayer‘s attorney. 383 F.3d at 889. The petitioner in Coons also disclosed that IRS officials “improperly processed a large, fraudulent refund for a wealthy taxpayer.” Id. at 890. In contrast, here, Aviles made no specific allegations of wrongdoing by government officials. Even on appeal, Aviles does not explain in his brief to this Court the necessary “who, what, when, where, and how” of government involvement in the alleged cover-up of Exxon‘s tax fraud. See United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 387-88 (5th Cir.2003) (affirming denial of leave to amend a complaint in part because “there is no indication in Willard‘s briefs to this court that he will be able to allege the necessary ‘who, what, when, where, and how’ of the alleged fraud“). We also note that the ALJ gave Aviles multiple opportunities to amend his IRA complaint and provide additional factual content before finally dismissing his administrative appeal. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (noting that “repeated failure to cure deficiencies [in a complaint] by amendments previously allowed” may be grounds for dismissal).
Aviles‘s reliance on the Board‘s precedential decision in Rumsey is misplaced, and the distinctions between this case and Rumsey illustrate why Aviles‘s appeal was properly dismissed by the Board. Aviles takes one statement from the Rumsey opinion—the petitioner‘s allegation that “the state of Wisconsin submitted fraudulent data ... and agency managers were covering it up,” 120 M.S.P.R. at 270 (emphasis added)—out of context. This allegation alone would be insufficient to establish the Board‘s jurisdiction; in Rumsey, there was significant additional evidence of federal government wrongdoing from congressional oversight hearings and news coverage, including that the agency administrator had “awarded grants” for juvenile justice and delinquency prevention to “low-priority organizations” despite the administrator‘s staff‘s recommendations to the contrary. Id. at 264. Indeed, the ALJ in that case denied the petition on the merits, finding that the petitioner‘s “disclosures to ABC News and Congress were not protected because ... [that] information ... was already publicly known” and because those disclosures “occurred in the normal course of the performance of her duties”10—not because there were no allegations or evidence of government wrongdoing. Id. at 265, 270.
Therefore, we agree with the Board‘s decision that Aviles failed to nonfrivolously
C. Aviles‘s Remaining Argument
Aviles also argues he is entitled to relief under a separate provision of the WPA,
V. CONCLUSION
For the foregoing reasons, Aviles‘s petition for review is DENIED.