No.
In the Supreme Court of the United States
October Term, 1998
_______________________________
FEDERAL LABOR RELATIONS AUTHORITY,
PETITIONER
v.
U. S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C.,
U. S. DEPARTMENT OF JUSTICE, IMMIGRATION AND NATURALIZATION
SERVICE, NEW YORK DISTRICT, NEW YORK, AND
DEPARTMENT OF JUSTICE, OFFICE OF THE INSPECTOR GENERAL,
WASHINGTON, D.C.
_______________________________
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
DAVID M. SMITH*
Solicitor
ANN M. BOEHM
Attorney
Federal Labor Relations Authority
607 14th Street, N.W.
Washington, D.C. 20424-0001
(202) 482-6620
*Counsel of Record
QUESTIONS PRESENTED
1. Whether the court below improperly exercised jurisdiction based upon an
erroneous interpretation of the principles of administrative exhaustion, and as
a result, exceeded its judicial review authority by creating, sua sponte, a
novel interpretation of 5 U.S.C. 7114(a)(2)(B).
2. If it is found that the court below properly exercised jurisdiction, whether
an Office of the Inspector General investigator is a "representative of the
agency" within the meaning of 5 U.S.C. 7114(a)(2)(B).
TABLE OF CONTENTS
OPINIONS BELOW
JURISDICTION
STATUTES INVOLVED
STATEMENT
A. The Federal Service Labor-Management Relations Statute
B. The Instant Case
1. Factual Background
a. The Immigration Inspectors
b. The Detention Enforcement Officers
2. The ALJ's Decision and the Authority's Adoption Thereof
3. The Second Circuit's Decision
REASONS FOR GRANTING THE PETITION
A. The Decision of the Court Below Conflicts with
the Principles of Administrative Exhaustion
1. The Court Disregarded the Administrative
Exhaustion Requirements of Section 7123(c)
2. The Second Circuit's Futility Determination Is Flawed
3. The Court Erred by Relying on Commerce
4. The Court Exceeded Its Judicial Review
Authority by Establishing Its Own Section
7114(a)(2)(B) Standard
B. The Second Circuit's Interpretation of Section
7114(a)(2)(B) Conflicts with Other Circuit
Decisions on this Issue and Is Erroneous
CONCLUSION
APPENDIX A
APPENDIX B
APPENDIX C
TABLE OF AUTHORITIES
Cases:
Bureau of Alcohol, Tobacco & Firearms v. FLRA,
464 U.S. 89 (1983)
Defense Criminal Investigative Serv., Dep't of
Defense v. FLRA, 855 F.2d 93 (3d Cir. 1988)
Department of Treasury v. FLRA, 707 F.2d 574
(D.C. Cir. 1983)
Department of Treasury, Internal Revenue Serv. v. FLRA,
494 U.S. 922 (1990)
Diaz v. United Agric. Employee Welfare Benefit Plan
& Trust, 50 F.3d 1478 (9th Cir. 1995)
EEOC v. FLRA, 476 U.S. 19 (1986)
FLRA v. United States Dep't of Commerce,
962 F.2d 1055 (D.C. Cir. 1992)
Federal/Postal/Retiree Coalition v. Devine, 751 F.2d 1424
(D.C. Cir. 1985)
Federal Trade Comm'n v. Sperry and Hutchinson Co.,
405 U.S. 233 (1972)
Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985)
Headquarters, Nat'l Aeronautics & Space Admin.,
Washington, D.C. and Nat'l Aeronautics & Space
Admin., Office of the Inspector General, Washington,
D.C., 50 FLRA 601 (1995)
ICC v. Clyde S.S. Co., 181 U.S. 29 (1901)
Internal Revenue Serv., Wash., D.C. v. FLRA,
671 F.2d 560 (D.C. Cir. 1982)
Makar v. Health Care Corp., 872 F.2d 80 (4th Cir. 1989)
McCarthy v. Madigan, 503 U.S. 140 (1992)
McGee v. United States, 402 U.S. 479 (1971)
McKart v. United States, 395 U.S. 185 (1969)
Motor Vehicle Mfrs. Ass'n of the United States v.
State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983)
NLRB v. Enterprise Assoc. of Steam, Hot Water, Hydraulic
Sprinkler, Pneumatic Tube, Ice Machine & General
Pipefitters of N.Y., 429 U.S. 507 (1977)
NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975)
National Aeronautics & Space Admin., Headquarters,
Washington, D.C. and Nat'l Aeronautics & Space
Admin., Office of the Inspector General, Washington,
D.C. v. FLRA, 120 F.3d 1208 (11th Cir. 1997),
petition for cert. filed 67 U.S.L.W. 3170
(U.S. Aug. 31, 1998) (No. 98-369)
Overseas Educ. Ass'n, Inc. v. FLRA, 961 F.2d 36
(2d Cir. 1992)
Randolph-Sheppard Vendors of Am. v. Weinberger,
795 F.2d 90 (D.C. Cir. 1986)
Securities & Exchange Comm'n v. Chenery Corp.,
332 U.S. 194 (1947)
Springer v. Wal-Mart Assocs. Group Health Plan,
908 F.2d 897 (11th Cir. 1990)
Thetford Properties v. U.S. Dep't of Housing &
Urban Dev., 907 F.2d 445 (4th Cir. 1990)
Tobey v. NLRB, 40 F.3d 469 (D.C. Cir. 1994)
UDC Chairs Chapter, Am. Ass'n of Univ. Professors
v. Board of Trustees of the Dist. of Columbia,
56 F.3d 1469 (D.C. Cir. 1995)
United States Dep't of Justice v. FLRA, 39 F.3d 361
(D.C. Cir. 1994)
United States v. L.A. Tucker Truck Lines, 344 U.S. 33
(1952)
Walters v. Metropolitan Educ. Enters., Inc.,
519 U.S. 202 (1997)
Washington Ass'n for Tel. & Children v.
Federal Communications Comm'n, 712 F.2d 677
(D.C. Cir. 1983)
Statutes, rules, and regulations:
Federal Service Labor-Management Relations Statute,
5 U.S.C. 7101-7135 (1994 & Supp. II 1996)
5 U.S.C. 7105(a)(1)
5 U.S.C. 7105(a)(2)
5 U.S.C. 7105(a)(2)(I)
5 U.S.C. 7114(a)(2)(B)
5 U.S.C. 7116(a)(1)
5 U.S.C. 7116(a)(8)
5 U.S.C. 7123(a)
5 U.S.C. 7123(b)
5 U.S.C. 7123(c)
28 U.S.C. 1254(1)
Inspector General Act of 1978, 5 U.S.C. App. 3 sections 1-12
(1994 & Supp. II 1996)
5 C.F.R. 2423.29(a) (1997)
5 C.F.R. 2423.41(a) (1998)
Miscellaneous:
124 Cong. Rec. 29,184 (1978), reprinted in Subcommittee
on Postal Personnel and Modernization of the Committee
on Post Office and Civil Service, 96th Cong., 1st Sess.,
Legislative History of the Federal Service Labor-
Management Relations Statute, Title VII of the Civil
Service Reform Act of 1978 (1979)
In the Supreme Court of the United States
OCTOBER TERM, 1998
No.
_______________________________
FEDERAL LABOR RELATIONS AUTHORITY,
PETITIONER
v.
U. S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C.,
U. S. DEPARTMENT OF JUSTICE, IMMIGRATION AND NATURALIZATION
SERVICE, NEW YORK DISTRICT, NEW YORK, AND
DEPARTMENT OF JUSTICE, OFFICE OF THE INSPECTOR GENERAL,
WASHINGTON, D.C.
_______________________________
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
The Federal Labor Relations Authority petitions for a writ of certiorari to
review the judgment of the United States Court of Appeals for the Second
Circuit.
OPINIONS BELOW
The judgment of the court of appeals (App., infra, 1a- ) is reported at 137
F.3d 683. The unpublished decision and order of the Federal Labor Relations
Authority is set forth at App., infra, - .
JURISDICTION
The judgment of the court of appeals was entered on February 5, 1998.
(App., infra, a.) A petition for rehearing was denied on June 4, 1998. Id.
at a. On August 18, 1998, Justice Ginsburg extended the time for filing a
petition for a writ of certiorari to November 2, 1998. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).
STATUTORY PROVISIONS INVOLVED
The relevant portions of the Federal Service Labor-Management Relations
Statute, 5 U.S.C. 7101-7135 (1994 & Supp. II 1996) are reproduced in the
appendix. (App., infra, - .)
STATEMENT
A. The Federal Service Labor-Management Relations Statute
The Federal Service Labor-Management Relations Statute (Statute) governs
labor-management relations in the federal service. Under the Statute, the
responsibilities of the Federal Labor Relations Authority (Authority)
include adjudicating unfair labor practice complaints, negotiability
disputes, bargaining unit and representational election matters, and
resolving exceptions to arbitration awards. See 5 U.S.C. 7105(a)(1), (2);
see also Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 93
(1983) (BATF). The Authority thus ensures compliance with the statutory
rights and obligations of federal employees, labor organizations that
represent such federal employees, and federal agencies. The Authority is
further empowered to take such actions as are necessary and appropriate to
effectively administer the Statute's provisions. See 5 U.S.C. 7105(a)(2)
(I); BATF, 464 U.S. at 92-93.
The Authority performs a role analogous to that of the National Labor
Relations Board (NLRB) in the private sector. See BATF, 464 U.S. at 92-93;
Federal/Postal/Retiree Coalition v. Devine, 751 F.2d 1424, 1430 (D.C. Cir.
1985). Congress intended the Authority, like the NLRB, "to develop
specialized expertise in its field of labor relations and to use that
expertise to give content to the principles and goals set forth in the
[Statute]." BATF, 464 U.S. at 97.
The Statute makes it an unfair labor practice for a federal agency employer
to, among other things, "interfere with, restrain, or coerce any employee in
the exercise by the employee of any right under [the Statute]," or
"otherwise fail or refuse to comply with any provision" of the Statute. 5
U.S.C. 7116(a)(1) and (8). The instant case involves an unfair labor
practice under section 7116(a)(1) and (8) and concerns the Authority's
interpretation of its own organic statute--specifically, the
representational right set forth in section 7114(a)(2)(B) of the Statute.
Section 7114(a)(2)(B) provides that an exclusive representative "shall be
given the opportunity to be represented at any examination of an employee in
the unit by a representative of the agency in connection with an
investigation" if the employee reasonably believes that discipline may
result from the examination and the employee requests representation. 5
U.S.C. 7114(a)(2)(B). This statutory provision extends to federal employees
the right to union representation provided in the private sector by the NLRB
through its interpretation of the National Labor Relations Act (NLRA) and
the Supreme Court's decision in NLRB v. J. Weingarten, Inc., 420 U.S. 251
(1975) (Weingarten). See 124 Cong. Rec. 29,184 (1978), reprinted in
Subcommittee on Postal Personnel and Modernization of the Committee on Post
Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the
Federal Service Labor-Management Relations Statute, Title VII of the Civil
Service Reform Act of 1978, at 926 (1979) (Legis. Hist.) (Congressman Udall
explained that the House bill provisions that led to the enactment of
section 7114(a)(2)(B) were intended to reflect the Supreme Court's decision
in Weingarten); Internal Revenue Serv., Wash., D.C. v. FLRA, 671 F.2d 560,
563 (D.C. Cir. 1982) (same).
In the unfair labor practice context, the Authority decides an unfair labor
practice case only if a party timely files exceptions to the decision and
order of an Administrative Law Judge (ALJ). See 5 C.F.R. 2423.29(a)
(1997).[1] If no exceptions are filed, the ALJ's "findings, conclusions,
and recommendations" become "without precedential significance . . . the
findings, conclusions, decision and order of the Authority, and all
objections and exceptions thereto shall be deemed waived for all purposes."
Id.
Authority decisions on unfair labor practices are subject to judicial
review, pursuant to section 7123(a) and (b) of the Statute. 5 U.S.C.
7123(a), (b). The reviewing court "may make and enter a decree affirming
and enforcing, modifying and enforcing as so modified, or setting aside in
whole or in part the order of the Authority." 5 U.S.C. 7123(c).
Section 7123(c) further provides, as relevant to the instant case, that "[n]
o objection that has not been urged before the Authority, or its designees,
shall be considered by the court, unless the failure or neglect to urge the
objection is excused because of extraordinary circumstances." 5 U.S.C.
7123(c). In EEOC v. FLRA, 476 U.S. 19, 23 (1986) (EEOC), the Supreme Court
explained that the purpose of this provision is to ensure "that the FLRA
shall pass upon issues arising under the [Statute], thereby bringing its
expertise to bear on the resolution of those issues." Thus, if no
exceptions have been filed with the Authority, the reviewing court does not
have jurisdiction to consider the merits of the case on appeal unless it
finds "extraordinary circumstances" justify such review. 5 U.S.C. 7123(c).
See EEOC, 476 U.S. at 23.
In the instant case, the Department of Justice (DOJ), the Department of
Justice Office of the Inspector General (DOJ-OIG), and the New York
Immigration and Naturalization Service (NY-INS) (collectively "the agency"),
did not file exceptions to the ALJ's decision and order. As such, the ALJ's
decision and order, finding that the agency violated 5 U.S.C. 7114(a)(2)(B)
and committed an unfair labor practice by denying bargaining unit employees
representation at examinations conducted by agents of DOJ-OIG became,
without precedential significance, the decision and order of the Authority.
(App., infra, at a.)
B. The Instant Case
1. Factual Background
This unfair labor practice case arose from the investigation of NY-INS
employees by agents of DOJ-OIG. (App., infra, at a.) The case decided by
the ALJ was a consolidation of five unfair labor practice complaints all
alleging that the agency violated section 7116(a)(1) and (8) of the Statute
based upon the failure of the agency to comply with section 7114(a)(2)(B) of
the Statute. Id. at a.
Three of the NY-INS employees interrogated by DOJ-OIG agents were employed
as Immigration Inspectors at JFK International Airport, and the three other
employees interrogated worked as Detention Enforcement Officers at the NY-
INS Service Processing Center. In all cases, the employees requested and
were denied union representation. Id. at a.
a. The Immigration Inspectors
The investigations of the three Immigration Inspectors occurred as a result
of NY-INS management's suspicions of misconduct by these three employees.
The suspected misconduct involved acceptance of bribes, assisting family
members in immigration matters, misuse of the computer system, and
involvement in an off-duty organization known as the "night riders."
Because the U.S. Attorney's office had declined criminal prosecution, the
investigations were administrative in nature. Id.
DOJ-OIG's investigation of Immigration Inspector Mike Lixandriou is
illustrative of the nature of the interrogations. Lixandriou was given a
direct order from the Assistant Area Port Director of NY-INS to meet with
DOJ-OIG agents. Id. at a. Upon being given this order, Lixandriou asked
for union representation and his request was denied. Lixandriou was then
driven to the investigation, by a fellow Immigration Inspector, in a
government vehicle. Id.
The DOJ-OIG agent informed Lixandriou that the subject of the investigation
was "administrative in nature" and involved allegations regarding abuse of
authority and misconduct. Further, he informed Lixandriou that the report
of investigation would be provided to NY-INS for any action to be taken.
Id.
Lixandriou again requested union representation and again the request was
denied. He then stated that he intended to leave the investigation, but the
DOJ-OIG agent told him that "the consequence of leaving the interrogation
would be that he would be fired."[2] Id.
Finally, Lixandriou was asked to sign notes summarizing the interrogation.
Lixandriou requested union representation, and upon having that request
denied refused to sign the notes. He was returned to work in a government
vehicle. Id.
b. The Detention Enforcement Officers
The interrogation of the three Detention Enforcement Officers centered on
the NY-INS District Director's policy against the ownership or possession of
personal firearms. Id. at a. Employees who have violated that policy have
been terminated from employment. Id.
The interrogation of Detention Enforcement Officer Sebastian Mason is
illustrative of the DOJ-OIG investigations of these three employees. Mason
was given a direct order from his supervisor to meet with DOJ-OIG agents.
Mason initially requested of the DOJ-OIG agents that he be allowed union
representation. The agents said that he would have no need for union
representation because he was being investigated for an administrative, not
criminal, matter. Id.
The DOJ-OIG agents informed Mason that NY-INS initiated the investigation.
As a result, the information was being gathered to be given to the NY-INS
District Director. According to the OIG agents, based upon the information
provided the District Director would decide whether disciplinary action was
warranted. Id.
2. The ALJ's Decision and the Authority's Adoption Thereof
Based upon these facts and his application of the relevant Authority case
law to the facts of this case, the ALJ issued a recommended decision in
which he concluded that DOJ, DOJ-OIG, and NY-INS committed an unfair labor
practice in violation of section 7116(a)(1) and (8) by failing to comply
with section 7114(a)(2)(B) of the Statute. Id. at a. Specifically, he
found that the agency improperly denied the bargaining unit employees
representation at DOJ-OIG examinations from which the employees reasonably
feared disciplinary action might result. Id.
The ALJ made this determination in accordance with the Authority's decision
in Headquarters, National Aeronautics and Space Administration, Washington,
D.C. and National Aeronautics and Space Administration, Office of the
Inspector General, Washington, D.C., 50 FLRA 601 (1995) (HQ NASA). (App.,
infra, at a.) In HQ NASA, the Authority determined that an Office of the
Inspector General (OIG) investigator is a "representative of the agency"
within the meaning of section 7114(a)(2)(B) of the Statute. 50 FLRA at 614.
Thus, under HQ NASA, when questioned by an OIG agent, a bargaining unit
employee who reasonably fears that discipline may result from the
examination and who requests representation is entitled to union
representation under section 7114(a)(2)(B).[3]
In finding in this case that the Statute was violated, the ALJ specifically
assigned liability to DOJ, DOJ-OIG, and NY-INS. (App., infra, at a.) A
unique aspect of this liability determination is the finding that the agency
component, NY-INS, as well as the parent agency, DOJ, and its OIG, committed
an unfair labor practice. Id. In HQ NASA, the Authority found that the
parent agency, the Headquarters of the National Aeronautics and Space
Administration, and its OIG were liable for the unfair labor practice, but
not the agency component. See 50 FLRA at 620.
With regard to NY-INS, the ALJ explained that the record in the case "shows
more involvement by the component agency in the OIG investigation" and that
NY-INS "was an active participant in the OIG examination and, in fact played
a pivotal role." (App., infra, at a.) Because of NY-INS's active
participation in denying the bargaining unit employees their statutory
rights under section 7114(a)(2)(B), the ALJ concluded that NY-INS also
committed the unfair labor practice. Id.
The agency did not file exceptions to the ALJ's decision and order, and as
noted at p.__ supra, the ALJ's decision and order became the nonprecedential
decision and order of the Authority. The agency was then obligated to
comply with the Authority's order--that is, to cease and desist from the
unfair labor practice and to take appropriate affirmative action. The
agency refused to comply with the Authority's order.
3. The Second Circuit's Decision
The Authority applied to the United States Court of Appeals for the Second
Circuit for summary entry of a judgment enforcing its order against the
agency. The Authority asserted that pursuant to the administrative
exhaustion provision in section 7123(c) of the Statute, the agency had
waived all objections to the order, that there were no contestable issues
before the court, and that the Authority was entitled to summary enforcement
of its order.
The Second Circuit denied enforcement.[4] (App., infra, at a.) In the
decision, the court first determined that it had jurisdiction to consider
the merits of the Authority's decision based upon the extraordinary
circumstances exception to section 7123(c). Id. at a. Relying upon its
decision in Overseas Education Association, Inc. v. FLRA, 961 F.2d 36, 38
(2d Cir. 1992) (OEA), the court found that it would have been futile for the
agency to file exceptions because the Authority "has previously made clear
its position that section 7114(a)(2)(B) applies to questioning by OIG
agents." (App., infra, at a.) The court further found that based upon the
D.C. Circuit's decision in FLRA v. United States Department of Commerce, 962
F.2d 1055, 1057-59 (D.C. Cir. 1992) (Commerce), it could, in considering the
Authority's enforcement petition, review the "respondent's otherwise
available contentions" despite the respondent's failure to timely file a
petition for review of the Authority's order. (App., infra, at a.)
In its consideration of the merits of the decision regarding section 7114(a)
(2)(B), the court focused on two subissues: "(a) what entity is the
pertinent 'agency' and (b) is an OIG agent a 'representative' of the
pertinent 'agency.'" Id. at a. On the question of what entity is the
"agency," the court analyzed the language of the Statute and the other court
of appeals' decisions on the application of section 7114(a)(2)(B) to OIGs:
United States Department of Justice v. FLRA, 39 F.3d 361, 365 (D.C. Cir.
1994) (DOJ); Defense Criminal Investigative Service, Department of Defense
v. FLRA, 855 F.2d 93, 98 (3d Cir. 1988) (DCIS); and NASA, 120 F.3d at 1213.
(App., infra, at a.) The court then held, in agreement with the Third and
Eleventh Circuits, that the appropriate "agency" under section 7114(a)(2)(B)
properly includes the "parent agency employing the interrogated employees
(here, the DOJ)." Id.
On the issue of whether an OIG agent is a "representative of the agency"
within the meaning of section 7114(a)(2)(B), the Second Circuit rendered a
determination that conflicts with the decisions of the Authority on the
issue, as well as the decisions of the three circuits that have decided the
issue. In so doing, the court invented its own test for whether a DOJ-OIG
agent is a "representative of the agency." Id.
According to the Second Circuit,"[s]o long as the OIG agent is questioning
an employee for bona fide purposes within the authority of the [Inspector
General Act][5] and not merely accommodating the agency by conducting
interrogation of the sort traditionally performed by agency supervisory
staff . . ., the OIG agent is not a 'representative' of the employee's
agency for purposes of section 7114(a)(2)(B)." Id. The court made this
determination based upon its conclusion that "[s]ubjecting all OIG
interrogations of federal employees to all aspects of [the Statute's]
protections would risk impairing the 'independent' investigations that OIGs
were created to conduct." Id.
Having developed its own test for application of section 7114(a)(2)(B), the
court proceeded to apply the test to the facts of the case. Because the
court found that the investigations involved "matters within the scope of
bona fide functions of the [Inspector General Act]," it concluded that
section 7114(a)(2)(B) was not applicable to the interrogations of the
bargaining unit employees. Therefore, the court denied enforcement of the
Authority's order determining that the agency had committed an unfair labor
practice. Id.[6]
REASONS FOR GRANTING THE PETITION
The Second Circuit's decision demonstrates a disregard for basic principles
of administrative exhaustion in a case involving an issue of great
importance to federal labor relations on which there is an acknowledged
conflict in the circuits: pursuant to 5 U.S.C. 7114(a)(2)(B), the
entitlement of an exclusive representative of federal employees to be
present, upon a bargaining unit employee's request, when the employee is
examined by an OIG agent. The agency's failure to file exceptions resulted
in no Authority consideration of this case. Despite the Statute's direction
in section 7123(c) that "[n]o objection that has not been urged before the
Authority . . . shall be considered by the court," the Second Circuit
nevertheless found that it had jurisdiction to consider the case. Further,
the court wrongly encroached upon the Authority's administrative duties by,
sua sponte, establishing a novel standard for section 7114(a)(2)(B) rights
without there having been any consideration of this standard by the
Authority. As a result of these improprieties, the court issued an
erroneous decision on the section 7114(a)(2)(B) issue that conflicts with
other circuit decisions and thus warrants review by this Court.
A. The Decision of the Court Below Conflicts with the Principles of
Administrative Exhaustion
1. The Court Disregarded the Administrative Exhaustion Requirements of Section
7123(c)
The agency's failure to file exceptions resulted in no Authority
consideration of this case. Nevertheless, the Second Circuit excused the
agency's failure to file based upon the "extraordinary circumstance" of
futility and, in the process, flouted section 7123(c)'s administrative
exhaustion requirement. (App., infra, at a.)
This Court has considered the section 7123(c) exhaustion requirement and
concluded that "under § 7123(c) review of 'issues that an agency never
placed before the Authority' is barred absent extraordinary circumstances."
EEOC, 476 U.S. at 23 (quoting Department of Treasury v. FLRA, 707 F.2d 574,
579 (D.C. Cir. 1983)). The Court explained that "[s]ection 7123(c) speaks
to courts, not parties, and its plain language evinces an intent that the
FLRA shall pass upon issues arising under the [Statute], thereby bringing
its expertise to bear on the resolution of those issues." Id.
"Where Congress specifically mandates" administrative exhaustion prior to
judicial review, as in section 7123(c), this Court has recognized that
"exhaustion is required." McCarthy v. Madigan, 503 U.S. 140, 144 (1992)
(McCarthy). The reason for this requirement is that "it serves the twin
purposes of protecting administrative agency authority and promoting
judicial efficiency." Id. at 145.
The "exhaustion principles apply with special force when 'frequent and
deliberate flouting of administrative processes' could weaken an agency's
effectiveness by encouraging disregard of its procedures." Id. (quoting
McKart v. United States, 395 U.S. 185, 195 (1969) (McKart)); see also McGee
v. United States, 402 U.S. 479, 484 (1971). The Second Circuit's decision
in this case encourages such disregard of the Authority's procedures, and
therefore should be reviewed by this Court.
The court below expressly recognized the "cavalier manner" in which the
agency approached this case. (App., infra, at a.) The agency did not file
exceptions with the Authority; did not petition the court for review within
sixty days as provided in section 7123(a) of the Statute; and waited for the
Authority to seek summary enforcement in the court before raising any
arguments in opposition to the ALJ's decision. Id. Despite recognizing
that the agency (the Department of Justice) would oppose such arrogance by a
private litigant and that it risked "forfeiting its position on the merits,"
the court nevertheless found that it had jurisdiction to consider the merits
of the case based upon two factors: 1) the extraordinary circumstance of
futility; and 2) the D.C. Circuit's ruling in Commerce, 962 F.2d at 1057-59.
Id. The court's errors in relying on these two factors are discussed below.
2. The Second Circuit's Futility Determination Is Flawed
"Futility should not lightly be presumed," as the D.C. Circuit observed
based upon its analysis of this Court's decision in United States v. L.A.
Tucker Truck Lines, 344 U.S. 33, 37 (1952) (L.A. Tucker). Washington Ass'n
for Tel. and Children v. Federal Communications Comm'n, 712 F.2d 677, 682
n.9 (D.C. Cir. 1983). This Court stated in L.A. Tucker that "orderly
procedure and good administration require that objections to the proceedings
of an administrative agency be made while it has opportunity for correction
in order to raise issues reviewable by the courts." 344 U.S. at 37. This
requirement holds even when it is argued that the administrative agency "had
a predetermined policy on [the relevant] subject which would have required
it to overrule the objection if made," because repetition of an objection
could lead to a change of policy by the agency. Id. Thus, "[s]imple
fairness . . . requires as a general rule that courts should not topple over
administrative decisions unless the administrative body not only has erred
but has erred against objection made at the time appropriate under its
practice." Id.
The Second Circuit attempted to distinguish L.A. Tucker from the instant
case, describing this Court's administrative exhaustion reasoning as a broad
general rule that applied to a "technical objection . . . totally unrelated
to the merits." (App., infra, at a.) The court then stated that its
decision regarding the futility exception to section 7123(c) in OEA, 961
F.2d at 38--the case upon which it relied in finding futility in this case--
was not affected by L.A. Tucker. 137 F.3d at 688 n.5.
The Second Circuit's overly indulgent interpretation and application of the
futility exception conflicts not only with the L.A. Tucker language set out
above, but also with other circuits' restrictive views of administrative
exhaustion and the futility exception. The D.C. Circuit, for example,
recognizes that futility can serve as an exceptional circumstance (or
"extraordinary" circumstance under section 7123(c)'s language) "where 'an
agency has articulated a very clear position on the issue which it has
demonstrated it would be unwilling to reconsider.'" UDC Chairs Chapter, Am.
Ass'n of Univ. Professors v. Board of Trustees of the Dist. of Columbia, 56
F.3d 1469, 1475 (D.C. Cir. 1995) (quoting Randolph-Sheppard Vendors of Am.
v. Weinberger, 795 F.2d 90, 105 (D.C. Cir. 1986)). In contrast to the
Second Circuit, however, in applying the futility exception the D.C. Circuit
requires "'the certainty of an adverse decision' or indications that pursuit
of administrative remedies would be 'clearly useless.'" Id.[7]
Even the Second Circuit in OEA excused the failure to exhaust administrative
remedies based on futility only because of the Authority's "deeply rooted
and well-documented acceptance of the excessive interference test"--a test
used by the Authority to determine the negotiability of certain bargaining
proposals. 961 F.2d at 38. The court noted in OEA that it would have been
hopeless for the union to challenge "so formidable a wall of precedent."
Id. at 38.
In the instant case, however, there is no such demonstration of a "deeply
rooted and well-documented acceptance" of the Authority's holding regarding
OIGs and section 7114(a)(2)(B).
Although the court below found sufficient similarities between the Authority's
relevant precedent in OEA and this case, the Authority's extensive precedent on
the "excessive interference" test at the time OEA was decided is significantly
different from the minimal precedent on whether section 7114(a)(2)(B) applies to
OIG investigations. When the Second Circuit reviewed the "excessive
interference" test in OEA, the test had been used by the Authority for six years
and had been affirmed by the courts of appeals that reviewed it. See OEA, 961
F.2d at 38. The HQ NASA test, on the other hand, is not so "deeply rooted" and
well-accepted. When the instant case was decided, the HQ NASA decision was only
two years old, and a circuit split existed regarding the application of section
7114(a)(2)(B) to OIG investigations.
The circuit split on the issue alone makes it difficult to justify
application of the futility exception to a case involving this section
7114(a)(2)(B) issue. Further, it should be noted that there are at least
two elements of this section 7114(a)(2)(B) case that the Authority has never
had the opportunity to consider.
First, the Second Circuit focused particularly on the "criminal" nature of
the allegations being investigated by the DOJ-OIG agents. In that
connection, the court compared an FBI investigation of a criminal matter,
where the section 7114(a)(2)(B) right would not apply, to the OIG
investigations of the "criminal" allegations in this case. (App., infra, at
a.) But the futility of filing exceptions with the Authority, concerning
this aspect of the court's decision, is difficult to discern given the
Authority's statement in HQ NASA:
Our decision herein should not be construed as suggesting that we would conclude
in all circumstances that every employee of each subcomponent of agencies having
government-wide, law-enforcement responsibilities, such as the Department of
Justice, is a 'representative of the agency' for the purposes of section 7114(a)
(2)(B). Such cases might well be distinguished in light of statutory
responsibilities extending outside of the parent agency, as contrasted with the
OIG's jurisdiction and its actions in this case, which are focused on internal
agency matters.
HQ NASA, 50 FLRA at 616 n.13.
Second, the ALJ found liability on the part of the agency component, NY-INS,
in this case. (App., infra, at a.) The Authority, however, has not held a
component of the agency liable for a section 7114(a)(2)(B) violation by an
OIG. Id. As such, the Authority has no "deeply rooted and well-documented"
position on this question; in fact, the Authority has not even addressed the
issue. Accordingly, it cannot be assumed that it would have been futile for
the agency to have filed exceptions with the Authority.
In this case, the Second Circuit found the rare exception of futility based
only on the court's previous decision in OEA, and its recognition of two
Authority decisions in which "the Authority has previously made clear its
position" that OIG agents are subject to section 7114(a)(2)(B). Id. at a.
With no additional analysis, the court concluded it would have been futile
for the agency to file exceptions. Given the strict standards for finding
extraordinary circumstances and the unconvincing grounds for the futility
exception's application in this case, the Second Circuit erred and the
decision merits review.
3. The Court Erred by Relying on Commerce
The court's decision is further flawed because of its reliance on the D.C.
Circuit's Commerce decision in finding jurisdiction in this case. In
Commerce, the D.C. Circuit ruled that it had jurisdiction in an enforcement
proceeding to consider the merits arguments of the agency, notwithstanding
the fact that the agency did not timely petition for judicial review. See
962 F.2d at 1059. The procedural circumstances of the Commerce case differ
from this case and render Commerce inapplicable.
The jurisdictional issue in Commerce concerned timeliness. Unlike the
instant case, in Commerce the agency filed exceptions with the Authority,
and the Authority had the opportunity to fully consider the case. See id.
at 1057. Thus, the only jurisdictional consideration before the D.C.
Circuit was whether the 60-day time limit for filing a petition for review
in section 7123(a) barred the agency from arguing its position on the merits
in an Authority enforcement proceeding under section 7123(b).[8] See id. at
1058.
The instant case, by contrast, involves both the previously discussed
administrative exhaustion jurisdictional issue and a timeliness
jurisdictional issue based upon the agency's failure to seek judicial review
within 60 days as provided for in section 7123(a). Not only did the court
excuse the agency's failure to file exceptions with the Authority in
contravention of the section 7123(c) exhaustion requirements, but it also
excused the fact that the agency ignored the judicial review provisions of
section 7123(a).
The Second Circuit's disregard for administrative law principles in this
case suggests to parties that they need not file exceptions in cases where
the Authority has established precedent on a particular issue and that they
also need not file a petition for review within 60 days as required under
section 7123(a). In the process, the Second Circuit has ignored this
Court's repeated warning that "exhaustion principles apply with special
force when 'frequent and deliberate flouting of administrative processes'
could weaken an agency's effectiveness by encouraging disregard of its
procedures." McCarthy, 503 U.S. at 145 (quoting McKart, 395 U.S. at 195).
This case, if not reversed by this Court, could weaken the Authority's
effectiveness, and that of other administrative agencies, by encouraging
disregard both of proper administrative review procedures and of proper
judicial review procedures.
4. The Court Exceeded Its Judicial Review Authority by Establishing Its Own
Section 7114(a)(2)(B) Standard
In issuing this decision, the Second Circuit also exceeded its authority and
"impermissibly encroached upon the [Authority's] function in determining for
itself" the employee's right to representation in an investigatory
interview. Weingarten, 420 U.S. at 266. The court's creation of a
completely new standard for section 7114(a)(2)(B) rights, without careful
analysis of Authority precedent or without remand to the Authority, was
improper. Moreover, in so acting the court established erroneous law
concerning this representation right for federal sector bargaining unit
employees.
"It is well established that an agency's action must be upheld, if at all,
on the basis articulated by the agency itself." Motor Vehicle Mfrs. Ass'n
of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50
(1983) (emphasis added). Further, "[i]f the record before the agency does
not support the agency action, if the agency has not considered all relevant
factors, or if the reviewing court simply cannot evaluate the challenged
agency action on the basis of the record before it, the proper course,
except in rare circumstances, is to remand to the agency for additional
investigation or explanation." Florida Power & Light Co. v. Lorion, 470
U.S. 729, 744 (1985). See also NLRB v. Enterprise Assoc. of Steam, Hot
Water, Hydraulic Sprinkler, Pneumatic Tube, Ice Machine & Gen'l Pipefitters
of N.Y., 429 U.S. 507, 522 n.9 (1977) (if court finds agency made error of
law, court may correct the error of law but is obligated "'to remand the
case to the [agency] so as to afford it the opportunity of examining the
evidence and finding the facts as required by law'") (quoting ICC v. Clyde
S.S. Co., 181 U.S. 29, 32-33 (1901)).
Under any analysis, the course taken by the Second Circuit was
inappropriate. Although the court had the authority to "make and enter a
decree affirming and enforcing, modifying and enforcing as so modified, or
setting aside in whole or in part the order of the Authority," 5 U.S.C.
7123(c), it did not have the authority to, sua sponte, create its own
interpretation of section 7114(a)(2)(B) of the Statute.
In a case with a similar scenario, Federal Trade Commission v. Sperry and
Hutchinson Co., 405 U.S. 233 (1972) (FTC), this Court found that the
appellate court could not interpret a statutory provision of the Federal
Trade Commission (Commission), but that it could "only affirm or vacate an
agency's judgment to that effect." Id. at 249. The Court explained, as it
had set forth in Securities & Exchange Commission v. Chenery Corp., 332 U.S.
194, 196 (1947) (Chenery), that the reason courts cannot substitute their
discretion for the administrative agency's is "to avoid propel[ling] the
court into the domain which Congress has set aside exclusively for the
administrative agency." FTC, 405 U.S. at 249 (internal quotation marks and
citations omitted). Therefore, the Court found that rather than
establishing its own construction of the statute, the appropriate course
"would have been to remand the case to the Commission for further
proceedings." Id. at 250.
This Court followed the same course with regard to the Authority in
Department of Treasury, Internal Revenue Serv. v. FLRA, 494 U.S. 922 (1990).
The Court did not agree with the Authority's interpretation of the relevant
statutory provisions, but rather than creating its own interpretation it
charged the Authority with "giv[ing] reasonable content to the statute's
textual ambiguities." Id. at 933. Citing Chenery, the Court noted that
such interpretation "is not a task we ought to undertake on the agency's
behalf in reviewing its orders." Id.
By contrast, the Second Circuit mistakenly took it upon itself to interpret
section 7114(a)(2)(B), without any Authority consideration of the case or
the standard announced by the court.[9] The court thus exceeded its
judicial responsibilities and infringed upon the Authority's
responsibilities. For this reason, as well, this case merits Court review.
B. The Second Circuit's Interpretation of Section 7114(a)(2)(B) Conflicts
with Other Circuit Decisions on this Issue and Is Erroneous
Four courts have considered whether an OIG investigator is a "representative
of the agency" within the meaning of section 7114(a)(2)(B),[10] and three
distinct standards have resulted. The Authority asserts that this circuit
split necessitates Supreme Court review in order for there to be a
comprehensive resolution of the current uncertainty regarding application of
section 7114(a)(2)(B) to OIG investigations.
The Eleventh Circuit, in NASA, 120 F.3d at 1213, and the Third Circuit, in
DCIS, 855 F.2d at 100, both affirmed the Authority's conclusion that an OIG
agent is a "representative of the agency." In contrast, the D.C. Circuit in
its DOJ decision rejected the Authority's holding and concluded that an OIG
agent is not a "representative of the agency." 39 F.3d at 368. The Second
Circuit's determination on this issue falls somewhere between DOJ and the
positions of the Third and Eleventh Circuit. (App., infra, a.)
In response to the petition for a writ of certiorari filed in NASA, the
Authority submitted a memorandum in support of the petition. As argued in
that memorandum, the Authority maintains that NASA was correctly decided,
but because the current confusion among federal employees, labor unions, and
agencies regarding application of section 7114(a)(2)(B) to OIG
investigations, this issue is appropriate for review. (See Memorandum for
the FLRA at 13-15, Case No. 98-369.)
The instant case also merits review by this Court because it erroneously
interprets section 7114(a)(2)(B), and because even if NASA is reviewed by
this Court, the significant differences in the Second and Eleventh Circuits'
resolution of the questions considered could result in a Supreme Court
decision that would not fully address and resolve the holding of the Second
Circuit. Thus the ultimate goal of complete resolution of the current
uncertainty regarding the application of section 7114(a)(2)(B) to OIG
investigations would be unfulfilled.
In this connection, two aspects of the Second Circuit's resolution of the
section 7114(a)(2)(B) issue are particularly troubling because of the
confusing nature of the test created and applied by the court. First, the
court's test, focusing on the context in which the investigation arises,
creates practical application problems. The court explained that the OIG is
not a "representative of the agency" if "questioning an employee for bona
fide purposes" of the Inspector General Act, but also conceded that there
may be instances when an OIG investigator would be a "representative of the
agency." (App., infra, at a.) This acknowledgment by the court means that
circumstances will arise where the parties will be unsure of their
respective rights and obligations in this respect.
Second, the court's reliance upon the criminal aspect of the matter being
investigated is problematic because of the difficulty with making a valid
and reliable distinction between "criminal" and "administrative" matters.
In applying its own newly created test, the Second Circuit concluded that
the OIG agents were not "representatives of the agency" because these
investigations involved "serious criminal offenses." Id. This was
significant to the court despite the fact that, as the ALJ noted, the
interrogations of at least three of the employees in this case were not
criminal, but rather were specifically "of an administrative nature, since
the U.S. Attorney's office had declined criminal prosecution." Id. at a.
Virtually any workplace matter being investigated involves conduct that
could be characterized as a crime. For example, an altercation between two
employees could be criminal assault; inventory shortages could be larceny or
embezzlement. In fact, the employee interviewed in the Weingarten case was
suspected of theft. 420 U.S. at 254-55. Therefore, it will be difficult to
distinguish between "criminal" and "administrative" matters. The difficulty
the parties will face in the application of the Second Circuit's decision
further demonstrates the need for Supreme Court review of this issue and
this case.
CONCLUSION
The petition for a writ of certiorari should be granted.[11]
Respectfully submitted,
DAVID M. SMITH*
Solicitor
ANN M. BOEHM
Attorney
* Counsel of Record
OCTOBER 1998
[1] The Authority amended its unfair labor practice regulations effective
October 1, 1997. Because this case arose under the prior unfair labor practice
regulations, this citation to the Authority's regulations references the unfair
labor practice regulations in effect prior to October 1, 1997. In any event,
the relevant content of this provision was not changed. See 5 C.F.R. 2423.41(a)
(1998).
[2] The procedure in this regard is that if an employee does not cooperate
in a DOJ-OIG investigation, the DOJ-OIG agent contacts the employee's supervisor
to inform him or her that the employee is not cooperating. Id. at a. The agent
may then request that the supervisor direct the employee to answer the
questions. Id. Additional failure to cooperate can result in disciplinary
action by NY-INS. Id.
[3] The Eleventh Circuit enforced this Authority decision in National
Aeronautics and Space Administration, Headquarters, Washington, D.C. and
National Aeronautics and Space Administration, Office of the Inspector General,
Washington, D.C. v. FLRA, 120 F.3d 1208 (11th Cir. 1997) (NASA), petition for
cert. filed, 67 U.S.L.W. 3170 (U.S. Aug. 28, 1998) (No. 98-369).
[4] The decision under review is the final decision of the Second Circuit,
which was issued after the court granted "in part" the Authority's petition for
rehearing. (App., infra, at a.) The initial decision, superseded by this
decision, is reported at 125 F.3d 106 (2d Cir. 1997).
[5] The statutory scheme governing OIGs is set forth in the Inspector
General Act of 1978, 5 U.S.C. App. 3 sections 1-12 (1994 & Supp. II 1996)
(Inspector General Act).
[6] The Authority filed a second petition for rehearing, which the court
denied on June 4, 1998. (App., infra, at a.)
[7] Other courts maintain similar views. See, e.g., Diaz v. United Agric.
Employee Welfare Benefit Plan & Trust, 50 F.3d 1478, 1485 (9th Cir. 1995) ("bare
assertions of futility are insufficient to bring a claim within the futility
exception, which is designed to avoid the need to pursue an administrative
review that is demonstrably doomed to fail."); Thetford Properties v. U.S. Dep't
of Housing & Urban Dev., 907 F.2d 445, 450 (4th Cir. 1990) ("Absent a clear
showing that an administrative agency has taken a hard and fast position that
makes an adverse ruling a certainty, a litigant's prognostication that he is
likely to fail before an agency is not a sufficient reason to excuse the lack of
exhaustion."); Springer v. Wal-Mart Assocs. Group Health Plan, 908 F.2d 897, 901
(11th Cir. 1990) ("'bare allegations of futility are no substitute for the
"clear and positive" showing of futility . . . required before suspending the
exhaustion requirement.'") (quoting Makar v. Health Care Corp., 872 F.2d 80, 83
(4th Cir. 1989)).
[8] The Authority maintains that Commerce was wrongly decided. As the
Authority argued to the D.C. Circuit in Commerce, the 60-day judicial review
filing requirement of section 7123(a) indicates that Congress intended to impart
finality into the Authority's proceedings. See Commerce, 962 F.2d at 1058; 5
U.S.C. 7123(a). The Commerce decision's interpretation of section 7123(a)
thwarts that congressional intention by allowing parties to neither comply with
Authority orders nor seek timely review, and yet remain able to present their
arguments on the merits of cases to the courts when the Authority initiates
enforcement proceedings. See 962 F.2d at 1058. Commerce thus improperly
renders meaningless the Statute's 60-day time limit for filing a petition for
review. See Walters v. Metropolitan Educ. Enters., Inc., 519 U.S. 202, 209
(1997) ("Statutes must be interpreted, if possible, to give each word some
operative effect."); Tobey v. NLRB, 40 F.3d 469, 471 (D.C. Cir. 1994) ("A
fundamental principle of statutory construction mandates that we read statutes
so as to render all of their provisions meaningful.").
[9] It should also be noted that the court adopted a standard that was not
urged by any of the parties.
[10] Along with the instant case, the three other decisions are the Third
Circuit's DCIS decision, 855 F.2d 93; the D.C. Circuit's DOJ decision, 39 F.3d
361; and the Eleventh Circuit's NASA decision, 120 F.3d 1208.
[11] The Solicitor General authorizes the filing of this petition.