Louie v. Department of the Treasury , 122 F. App'x 449 ( 2004 )

NOTE: Pursuant to Fed. Cir. R. 47.6, this
disposition is not citable as precedent. It is a
public record.
United States Court of Appeals for the Federal Circuit
03-3154
WAYNE L. LOUIE,
Petitioner,
v.
DEPARTMENT OF THE TREASURY,
Respondent.
___________________________
DECIDED: December 23, 2004
___________________________
Before MICHEL, GAJARSA, and LINN, Circuit Judges.
PER CURIAM.
Wayne L. Louie (“Louie”) appeals from the Merit Systems Protection Board’s
(“Board”) decision affirming the Department of the Treasury’s ruling demoting him for
unsatisfactory performance from Revenue Agent, GS-13, step 7, to Revenue Agent,
GS-12, step 10. Louie v. Dep’t of the Treasury, SF-0432-00-0517-I-6 (M.S.P.B. Oct. 18,
2002 final decision). We affirm.
BACKGROUND
The Department of the Treasury’s Internal Revenue Service (“Agency”) has
employed Louie since 1978. Before his demotion in 2000, Louie served as a Revenue
Agent GS-13, step 7. On June 4, 1998, Louie received an “Opportunity to Improve”
(“OTI”) letter from his supervisor, Linda Flemins. In the OTI letter, Flemins advised
Louie that his performance in four critical elements of his position was unsatisfactory.
The OTI letter indicated that Louie had 120 days to demonstrate acceptable
performance. Also included were 23 recommendations, provided to assist Louie in
achieving satisfactory performance. The OTI letter further indicated that failure to
achieve at least minimally successful performance would result in either a reassignment
to another position or a proposal to remove him from the service.
On March 29, 1999, Louie received a Notice of Proposed Removal informing him
that he had failed to achieve the minimal level of performance required for retention in
his position. Specifically, Louie was advised that his performance in three critical
elements was regarded as unsatisfactory: (1) Examination Techniques; (2) Tax Law
Interpretation and Application; and (3) Correlation of Accounting Entries and Systems.
Louie provided a two-day oral reply to the notice and on June 2, 2000, after considering
his reply and all other information of record, the Agency issued a decision finding
Louie’s performance in the three critical elements to be unsatisfactory. Instead of the
proposed removal, the Agency decided to reduce Louie’s grade and pay. Effective
June 4, 2000, the Agency demoted Louie from Revenue Agent, GS-13, step 7, to
Revenue Agent, GS-12, step 10.
03-3154 2
Louie appealed this action to the Board. The Board affirmed the Agency’s
removal action in its initial decision and that ruling became final on October 18, 2002.
Louie timely appealed to this court and we have jurisdiction pursuant to
28 U.S.C. § 1295(a)(9).
DISCUSSION
We must affirm the Board unless we determine that its decision is (1) arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained
without procedures required by law, rule, or regulation having been followed; or (3)
unsupported by substantial evidence. See 5 U.S.C. § 7703(c) (2000).
Under Title 5 an agency may remove an employee for “unacceptable
performance,” which 5 U.S.C. § 4301(3) defines as performance that “fails to meet
established performance standards in one or more critical elements of such employee’s
position.” Lisiecki v. Merit Sys. Prot. Bd., 769 F.2d 1558, 1560 (Fed. Cir. 1985). Before
initiating an action under 5 U.S.C. § 4303, an agency must provide the employee with a
reasonable opportunity to demonstrate acceptable performance. Martin v. Fed. Aviation
Admin., 795 F.2d 995, 997 (Fed. Cir. 1986). If, after a reasonable opportunity,
performance is found unacceptable with respect to even a single “critical element,” an
agency may reduce in grade or remove an employee. Id.The Board affirmed the Agency’s decision based on Louie’s failure to satisfy one
critical element: Examination Techniques. Here, Louie argues that the Board relied on
erroneous findings of fact, committed procedural errors, was infected by bias, and failed
to consider the Agency’s reprisal against him for reporting a conflict of interest regarding
his supervisor.
03-3154 3
Louie argues that the Board made erroneous findings by placing too much
emphasis on the testimony of the Agency officials, including the testimony of Louie’s
supervisor, and placing almost no emphasis on petitioner’s witnesses. As in all appeals
from the Board, we cannot see the witnesses when they testify. Since we only have the
“cold record” before us and cannot observe the demeanor of witnesses, we rely on the
AJ’s demeanor-based credibility findings. Haebe v. Dep’t of Justice, 288 F.3d 1288,
1299 (Fed. Cir. 2002). For these reasons, we have noted on several occasions that the
evaluation of witness credibility is “virtually unreviewable” on appeal. E.g., King v. Dep’t
of Health and Human Servs., 133 F.3d 1450 (Fed. Cir. 1998) (internal quotation
omitted). Here, because Louie has not shown that the Board’s findings were “inherently
improbable,” “discredited by undisputed fact,” or otherwise improper, we decline to
overturn the Board’s credibility findings. See Pope v. United States Postal Serv., 114
F.3d 1144, 1149.
Louie further argues that the Board made procedural errors by denying him the
right to present evidence favorable to his position including witness testimony or permit
him to cross-examine his supervisors. Procedural matters regarding discovery and
evidentiary issues fall within the sound discretion of the Board, which we review under
an abuse of discretion standard. See Curtin v. Office of Pers. Mgmt., 846 F.2d 1373,
1378 (Fed. Cir. 1988). If an abuse of discretion did occur, in order to prevail Louie must
also prove that he was prejudiced by the error such that it could have affected the
outcome of his case. Cornelius v. Nutt, 472 U.S. 648, 657-59 (1985). Louie, however,
has not pointed to any evidence not considered by the Board that could have affected
the outcome of his case. He does not explain how additional testimony from other
03-3154 4
Agency employees could have affected the outcome in this action, or how the Board
abused its discretion in limiting that testimony. Therefore, we cannot find that the AJ
abused his discretion in these procedural and evidentiary determinations.
The record shows that Louie’s supervisor provided him with 23 recommendations
to improve his performance. Louie alleges that the Agency failed to follow up on these
23 recommendations made in its OTI letter. The record shows, however, that Louie’s
supervisor continued to monitor his work and provided written and oral feedback after
Louie received the OTI letter. This amounts to substantial evidence supporting the
Board’s findings.
Louie further argues that the Board misapplied the law because the Agency
failed to provide specific information concerning any deficiencies and methods of
improvement. Here, we cannot agree with Louie. The Agency’s OTI letter to Louie
included a detailed account of his inability to perform at his job including, but not limited
to: (1) the inordinate amount of time Louie was spending on his audits, compared to the
work he was generating; (2) his failure to complete three of four “Cost of Goods Sold
Information Document Request” forms; and (3) his failure to provide his supervisor with
a comparative “M-1” and “M-2” analysis. For critical element 1, Examination
Techniques, twelve examples were provided to Louie where he failed to meet
acceptable performance standards. The performance standards in view of the entire
record were not impermissibly vague and we will not overturn the Board’s decision.
Louie also claims that the AJ was biased against him. According to Louie, “[t]he
judge was much more willing to accept the opinions of the Agency supervisor than were
the Agency officials themselves.” As we have observed:
03-3154 5
[O]pinions formed by the judge on the basis of facts introduced or events
occurring in the course of the current proceedings, or of prior proceedings,
do not constitute a basis for a bias or partiality motion unless they display
a deep-seated favoritism or antagonism that would make fair judgment
impossible. Thus, judicial remarks during the course of a trial that are
critical or disapproving of, or even hostile to, counsel, the parties, or their
cases, ordinarily do not support a bias or partiality challenge.
Liteky v. United States, 510 U.S. 540, 555 (1994). Even accepting Louie’s allegations
as true, the Board’s adverse rulings are not evidence of “a deep-seated favoritism or
antagonism that would make fair judgment impossible” and fail to prove bias. Id. at 555;
Bieber v. Dep't of the Army, 287 F.3d 1358, 1363 (Fed. Cir. 2002). Therefore, Louie
has not established that the AJ was biased against him.
Louie contends the Board failed to treat his demotion as retaliation for his
reporting a potential conflict of interest involving his supervisor. Even scouring the
record, we find no mention, and Louie identifies nothing, indicating he made this
argument below. Further, Louie presents this argument to this court for the first time in
his reply brief. For these two reasons, Louie waived this argument and, therefore, we
do not reach the merits of his contention.
Because we find that the Board’s decision is supported by substantial evidence
and the Board did not abuse its discretion, we affirm the Board’s decision.
03-3154 6