Ryan v. Dhs , 793 F.3d 1368 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
JOAN RYAN,
Petitioner
v.
DEPARTMENT OF HOMELAND SECURITY,
Respondent
______________________
JOAN RYAN,
Petitioner
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent
______________________
JOAN RYAN,
Petitioner
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent
______________________
2014-3181, 2014-3182, 2014-3183
______________________
Petitions for review of the Merit Systems Protection
Board in Nos. PH-0752-13-0127-I-1, PH-0752-13-5283-I-1,
PH-0752-13-0343-I-1.
2 RYAN v. DEP’T OF HOMELAND SEC.
______________________
Decided: July 13, 2015
______________________
PETER B. BROIDA, Arlington, VA, argued for petitioner.
HILLARY STERN, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for respondent Department of Homeland
Security. Also represented by JOYCE BRANDA, ROBERT E.
KIRSCHMAN, JR., ALLISON KIDD-MILLER.
CALVIN M. MORROW, Office of the General Counsel,
Merit Systems Protection Board, Washington, DC, argued
for respondent Merit Systems Protection Board. Also
represented by BRYAN G. POLISUK.
______________________
Before O’MALLEY and WALLACH, Circuit Judges, and
GILSTRAP, * District Judge.
WALLACH, Circuit Judge.
Petitioner Joan Ryan appeals three decisions of the
Merit Systems Protection Board (“MSPB” or “Board”). In
the first decision, the MSPB upheld Ms. Ryan’s indefinite
suspension from duty based on an underlying suspension
of her security clearance, found she was not entitled to
consideration for transfer to a position not requiring a
security clearance, and found acquittal of the criminal
charges underlying the security clearance suspension did
not entitle her to reinstatement. Ryan v. Dep’t of Home-
land Sec. (Ryan I), 2014 M.S.P.B. 64 (2014) (J.A. 13–24),
* The Honorable Rodney Gilstrap, District Judge,
United States District Court for the Eastern District of
Texas, sitting by designation.
RYAN v. DEP’T OF HOMELAND SEC. 3
overruled by Freeze v. Dep’t of the Navy, 2015 M.S.P.B. 9(2015). 1 In the second decision, the MSPB found it did
not have authority to order Ms. Ryan restored to her
position simply because of delay with respect to a final
decision on her security clearance. Ryan v. Dep’t of Home-
land Sec. (Ryan II), No. PH-0752-13-0343-I-1 (M.S.P.B.
Aug. 18, 2014) (J.A. 51–54). In the third decision, the
MSPB found the basis for the suspension of Ms. Ryan’s
employment was not constructively amended when the
suspended security clearance was eventually revoked.
Ryan v. Dep’t of Homeland Sec. (Ryan III), No. PH-0752-
13-5283-I-1 (M.S.P.B. Aug. 18, 2014) (J.A. 41–45). This
court affirms.
BACKGROUND
Ms. Ryan was employed as a regional Mission Sup-
port Division Director, level GS-15, by the Federal Emer-
gency Management Agency (“the agency” or “FEMA”), an
agency within the Department of Homeland Security
(“DHS”). The position required her to maintain a top
secret security clearance. The agency suspended Ms.
Ryan’s access to classified information after it learned she
had been indicted on federal criminal charges related to
conflict of interest, solicitation of a gratuity, and making a
false statement. Because she no longer met the require-
ments of the position, FEMA indefinitely suspended her
from duty without pay “until such time as a final deter-
mination is made by the FEMA Office of the Chief Securi-
ty Officer (OCSO) with respect to [her] future eligibility
for access to classified information.” J.A. 78.
Ms. Ryan appealed the indefinite suspension to the
MSPB. Although Ms. Ryan was acquitted of all criminal
charges in February 2013, the MSPB Administrative
Judge (“AJ”) found she was not entitled to an immediate
1 See infra note 2.
4 RYAN v. DEP’T OF HOMELAND SEC.
termination of the indefinite suspension from duty be-
cause “the indefinite suspension was based upon the
suspension of her clearance and not the underlying rea-
sons for the suspension of the clearance (the indictment).”
J.A. 39. This decision was upheld on appeal by the
MSPB. Ryan I, 2014 M.S.P.B. 64. The MSPB noted that
it was “precluded from ordering the appellant’s rein-
statement to a position requiring access to classified
information when she is without the required clearance to
access such information.” Id. ¶ 15.
While Ms. Ryan’s appeal in Ryan I was pending, she
filed another appeal asserting, among other things, that
“the agency [was] unreasonably delaying the adjudication
of her [security] clearance.” J.A. 56. In an initial deci-
sion, the AJ dismissed the claim for lack of subject matter
jurisdiction, and the MSPB affirmed. Ryan II, No. PH-
0752-13-0343-I-1. In the initial decision, the AJ noted
“[t]he condition subsequent—the completion of the agen-
cy’s readjudication of her security clearance—has simply
not yet occurred” and therefore “the Board does not have
jurisdiction over her claim.” J.A. 57. 2 In affirming the
2 Ryan I was overruled by Freeze, 2015 M.S.P.B. 9,
“to the extent that it holds that, where an agency indefi-
nitely suspends an appellant based upon the suspension
of her security clearance, the condition subsequent trig-
gering the cessation of the suspension is the restoration of
her security clearance.” Id. ¶ 11 n.2 (emphasis added).
The MSPB noted that it “cannot impose a condition
subsequent of restoration of an appellant’s security clear-
ance where the letter indefinitely suspending the appel-
lant identifies the condition subsequent as the completion
and disposition of all issues regarding the appellant’s
security clearance.” Id. (emphases added). The use in
Ryan I of the term “restoration” rather than “disposition”
does not affect the outcome of the present appeal. The
RYAN v. DEP’T OF HOMELAND SEC. 5
AJ’s decision, the MSPB noted “appellant has cited no
support for her contention that the Board has the authori-
ty to order her restored based solely upon the amount of
time that has elapsed since her acquittal, notwithstand-
ing the fact that the agency has yet to decide whether to
reinstate her access to classified information.” Ryan II, at
3 ¶ 3.
The suspension of Ms. Ryan’s security clearance oc-
curred in September 2012. After the agency revoked her
security clearance in July 2013, she filed a third appeal
asserting the basis for her indefinite suspension was
constructively amended when her security clearance was
revoked. Ryan III, No. PH-0752-13-5283-I-1. Specifically,
she asserted that “the revocation was based (at least in
part) on reasons not specified in her notice of proposed
suspension” and “she has never had a chance to contest”
those new reasons. J.A. 48. The AJ dismissed the action,
finding “the new underlying details do not change the
basis for the suspension [of Ms. Ryan’s employment], and
[Ms. Ryan] has the opportunity to challenge this new
information in her security clearance appeal.” J.A. 49.
The MSPB affirmed, noting “the appellant’s inability to
access classified information” was the basis for her indefi-
nite suspension, and the fact that Ms. Ryan’s security
clearance had been revoked, rather than just suspended,
parties appear to recognize that, as stated in Freeze, the
condition subsequent could have included, but was not
limited to, the restoration of Ryan’s security clearance.
See Pet’r’s Br. 48 (“e.g., restoration of the clearance”);
Brief for Respondent DHS 8 (“[T]he condition subse-
quent . . . was the final adjudication of her security clear-
ance.”); Brief for Respondent MSPB 8 (“[T]he condition
subsequent is the one identified by the agency in its
decision imposing the indefinite suspension.”).
6 RYAN v. DEP’T OF HOMELAND SEC.
did not “explicitly or implicitly amend[] the basis for her
indefinite suspension [from duty].” Ryan III, at 5–6 ¶ 4.
Appeals from Ryan I, Ryan II, and Ryan III were con-
solidated before this court and form the basis of the
present appeal. This court has jurisdiction under 28
U.S.C. § 1295(a)(9) (2012).
DISCUSSION
I. Standard of Review
When considering appeals from the MSPB,
th[is] court shall review the record and hold un-
lawful and set aside any agency action, findings,
or conclusions found to be— (1) arbitrary, capri-
cious, an abuse of discretion, or otherwise not in
accordance with law; (2) obtained without proce-
dures required by law, rule, or regulation having
been followed; or (3) unsupported by substantial
evidence.
5 U.S.C. § 7703(c) (2012). The MSPB’s determination
with respect to its jurisdiction is reviewed de novo. Forest
v. Merit Sys. Prot. Bd., 47 F.3d 409, 410 (Fed. Cir. 1995).
II. The MSPB Correctly Determined Ms. Ryan Was Not
Entitled to Be Considered for Transfer to Another
Position
The MSPB does not have authority “to review the
substance of an underlying decision to deny or revoke a
security clearance in the course of reviewing an adverse
action,” such as discharge or indefinite suspension. Dep’t
of the Navy v. Egan, 484 U.S. 518, 520 (1988). Rather, the
MSPB has the authority to review only whether: (1) the
petitioner’s position required a clearance; (2) the clear-
ance was denied, suspended, or revoked; and (3) the
procedural protections specified in 5 U.S.C. § 7513 were
followed. Hesse v. Dep’t of State, 217 F.3d 1372, 1376
(Fed. Cir. 2000).
RYAN v. DEP’T OF HOMELAND SEC. 7
Ms. Ryan does not dispute that the position required a
clearance or that the clearance was suspended and then
revoked. Instead, she argues MSPB precedent requires
the MSPB to conduct a “mitigation analysis . . . in cases of
indefinite suspensions.” Pet’r’s Br. 12. That is, the MSPB
should have “assess[ed] the propriety of an indefinite
suspension rather than [a less severe] alternative,” such
as transfer or demotion to another position that did not
require a security clearance. Id. at 38. It should have
done so, she asserts, because the MSPB “[f]or decades . . .
has applied a Douglas penalty review in indefinite sus-
pension appeals” and should have done so in this case.
Pet’r’s Br. 24; see Douglas v. Veterans Admin., 5 M.S.P.B.
313 (1981).
Douglas, however, addressed the question of whether
the MSPB’s statutory authority “includes authority to
modify or reduce a penalty imposed on an employee by an
agency’s adverse action.” Douglas, 5 M.S.P.B. at 313
(emphases added); see also 5 U.S.C. § 7501(2) (A “suspen-
sion” reviewable pursuant to § 7513(d) “means the placing
of an employee, for disciplinary reasons, in a temporary
status without duties and pay.”) (emphasis added); id.
§ 7511(a)(2). The Supreme Court has made clear “[a]
denial of a security clearance is not . . . an ‘adverse ac-
tion,’ and by its own force is not subject to [MSPB] re-
view.” Egan, 484 U.S. at 530.
Ms. Ryan asserts that, although the denial of a securi-
ty clearance is not an adverse action, the indefinite sus-
pension occasioned by the loss of a security clearance is an
adverse action. She emphasizes the hardships occasioned
by an indefinite suspension, noting the suspended em-
ployee “is out of work for what is likely assumed to be
questionable circumstances by a prospective private
sector employer who, suspending disbelief, may not be
inclined to assume the risk of hiring someone who on
short notice may return to government employment.”
Pet’r’s Br. 25.
8 RYAN v. DEP’T OF HOMELAND SEC.
Although Ms. Ryan is correct that an indefinite sus-
pension constitutes an adverse action, see 5 U.S.C.
§ 7512, 3 in her case it was not imposed as a penalty for
wrongdoing or poor job performance, but was caused by
Ms. Ryan’s loss of her security clearance, which resulted
in her no longer possessing a qualification required for the
position. Douglas was a decision addressing the consoli-
dated cases of seven individual appellants who “were each
removed by their agencies upon charges of job-related
misconduct.” Douglas, 5 M.S.P.B. at 313–14. No security
clearances were at issue in Douglas or in the other au-
thorities cited by Ms. Ryan. See Pet’r’s Br. 27–30 (citing
Sanchez v. Dep’t of Energy, 2011 M.S.P.B. 95 (2011); Vega
v. Dep’t of Justice, 37 M.S.P.R. 115 (1988); Martin v. Dep’t
of the Treasury, 10 M.S.P.B. 568 (1982)). Similarly,
decisions of this court considering or mentioning a Doug-
las mitigation analysis have involved penalties for mis-
conduct rather than loss of a required qualification for a
position. See, e.g., MacLean v. Dep’t of Homeland Sec.,
714 F.3d 1301 (Fed. Cir. 2013) (unauthorized disclosure of
sensitive security information); Greenstreet v. Soc. Sec.
Admin., 543 F.3d 705 (Fed. Cir. 2008) (damage of comput-
er and other office equipment during “isolated outburst”);
Jacobs v. Dep’t of Justice, 35 F.3d 1543 (Fed. Cir. 1994)
(falsification of documents); Beard v. Gen. Servs. Admin.,
801 F.2d 1318 (Fed. Cir. 1986) (violation of agency rules
regarding the use of mace).
The rationale underlying the Douglas mitigation
analysis reflects the general principle that penalties
3 See also Perez v. Dep’t of Justice, 480 F.3d 1309,
1314 (Fed. Cir. 2007) (Dyk, J., dissenting) (“[A]gencies
have the authority to indefinitely suspend employees . . .
but . . . such suspensions are adverse actions appealable
to the Board.”); Dunnington v. Dep’t of Justice, 956 F.2d
1151, 1153 (Fed. Cir. 1992).
RYAN v. DEP’T OF HOMELAND SEC. 9
should be proportional to misconduct. See Douglas, 5
M.S.P.B. at 313 (The MSPB has “authority to mitigate
penalties when the [MSPB] determines that the agency-
imposed penalty is clearly excessive, disproportionate to
the sustained charges, or arbitrary, capricious, or unrea-
sonable.”). If no security clearance suspension were at
issue and Ms. Ryan had been indefinitely suspended from
duty based on the underlying alleged criminal miscon-
duct, a Douglas mitigation analysis might be proper, but
those are not the facts with which this court has been
presented in this appeal.
To the extent Ms. Ryan suggests the MSPB should
nevertheless apply Douglas to require that Ms. Ryan be
considered for transfer to a position not requiring a secu-
rity clearance, the MSPB is precluded from doing so by
Griffin v. Defense Mapping Agency, 864 F.2d 1579 (Fed.
Cir. 1989). In Griffin, an employee “was denied a top
secret clearance because he falsified pre-employment
security forms.” Id. at 1580. This court explained that,
where a security clearance is required for a position and
the employee does not possess one, the MSPB “has no
authority to inquire into the feasibility of transfer to
alternative positions” unless a “substantive right [to be
transferred] is available from some other source, such as a
statute or regulation.” Id. (emphasis added); see also
Hesse, 217 F.3d at 1381 (“[A]n employee has a right to be
transferred to a nonsensitive position only if that right is
manifested in statute or regulation.”); Lyles v. Dep’t of the
Army, 864 F.2d 1581, 1583 (Fed. Cir. 1989) (Egan “does
not create any substantive right to consideration for
alternative employment” and an individual who does not
meet the requirements of a position may be dismissed
“unless additional rights are available from some other
source.”). Ms. Ryan cites no statute or regulation mani-
festing a right to transfer to a nonsensitive position.
Hesse is particularly relevant. Like Ms. Ryan, Mr.
Hesse was employed by the government in a position that
10 RYAN v. DEP’T OF HOMELAND SEC.
required a top secret security clearance. Hesse, 217 F.3d
at 1374. After a series of alleged security violations by
Mr. Hesse, his security clearance was suspended. Id.“Based on the suspension of Mr. Hesse’s security clear-
ance, the agency suspended him from his position.” Id.Applying the Supreme Court’s decision in Egan, this court
concluded “the [MSPB] is not authorized to review securi-
ty clearance determinations or agency actions based on
security clearance determinations.” Id. at 1376 (emphasis
added). The MSPB is therefore not authorized to review
FEMA’s determination with respect to the feasibility of
Ms. Ryan’s transfer to an alternative position, given the
MSPB’s finding that FEMA does not have a policy requir-
ing it to consider reassignment in cases where security
clearances have been lost or suspended.
III. The MSPB Correctly Declined to Order Remedial
Action Following Ms. Ryan’s Acquittal
Ms. Ryan argues that after she was acquitted, the
MSPB improperly declined to exercise jurisdiction to
review the indefinite suspension. See Pet’r’s Br. 44 (“The
appeal following Ryan’s acquittal . . . was within the
[MSPB’s] jurisdiction.”) (capitalization modified). “Once
the condition subsequent has occurred, the agency must
terminate the [indefinite] suspension within a reasonable
amount of time.” Rhodes v. Merit Sys. Prot. Bd., 487 F.3d
1377, 1380–81 (Fed. Cir. 2007). In Rhodes, the petitioner
was indefinitely suspended following indictment on
criminal charges, and was later acquitted. Id. at 1379.
No security clearance was at issue.
By contrast, in this case the condition subsequent was
not the acquittal of criminal charges, but the “final de-
termination . . . by the FEMA [OCSO] with respect to [Ms.
Ryan’s] future eligibility for access to classified infor-
mation.” J.A. 78. The letter informing Ms. Ryan that her
security clearance was revoked is dated July 26, 2013.
Therefore, at the time of the AJ’s decision that led to the
RYAN v. DEP’T OF HOMELAND SEC. 11
MSPB’s decision in Ryan II—July 15, 2013—a final
determination with respect to her access to classified
information had not occurred. Moreover, the eventual
condition subsequent in this case—which took the form of
clearance revocation—meant that at no point following
her clearance suspension did Ms. Ryan hold the necessary
qualifications for her position. The MSPB correctly held
it is without authority to order the agency to return an
uncleared employee to a position that requires a security
clearance. See Skees v. Dep’t of the Navy, 864 F.2d 1576,
1578 (Fed Cir. 1989) (“If the Board cannot review the
employee’s loss of security clearance, it is even further
beyond question that it cannot review the Navy’s judg-
ment that the position itself requires the clearance.”).
To the extent Ms. Ryan is arguing the MSPB should
consider whether the determination with respect to her
security clearance, as opposed to her indefinite suspen-
sion, was unduly delayed, the Supreme Court has stated
“no one has a ‘right’ to a security clearance.” Egan, 484
U.S. at 528. The Court explained that “[f]or reasons . . .
too obvious to call for enlarged discussion, the protection
of classified information must be committed to the broad
discretion of the agency responsible.” Id. at 529 (internal
quotation marks and citation omitted); see also Gargiulo
v. Dep’t of Homeland Sec., 727 F.3d 1181, 1185 (Fed. Cir.
2013) (Plaintiff has “no due process rights with respect to
the procedures used to determine whether to suspend or
revoke his security clearance.”). An agency’s broad discre-
tion in evaluating eligibility for a security clearance
suggests the agency similarly has broad discretion to
determine how much time is required to evaluate whether
the revocation of a suspended clearance is appropriate. 4
4 In any event, Ms. Ryan has not established the
time between the suspension and revocation of her securi-
ty clearance was clearly excessive or unreasonable. Ms.
12 RYAN v. DEP’T OF HOMELAND SEC.
IV. The Basis of the Indefinite Suspension
Did Not Change After Acquittal
Ms. Ryan also objects to the revocation of her security
clearance after she was acquitted of the charges that
originally gave rise to the suspension of her security
clearance. See Pet’r’s Br. 54. However, neither this court
nor the MSPB may review the merits of an agency’s
decision to suspend or revoke a security clearance. See
Egan, 484 U.S. at 530 (“A denial of a security clear-
ance . . . is not subject to [MSPB] review.”). Moreover,
even if the agency’s suspension of Ms. Ryan’s employment
had been based on her indictment rather than on the
suspension of her security clearance, acquittal of criminal
charges under the “beyond a reasonable doubt” standard
does not require the agency to reinstate the employee.
See Richardson v. U.S. Customs Serv., 47 F.3d 415, 421
(Fed. Cir. 1995) (rejecting the theory “that the grounds for
suspension disappear[] as a result of . . . later acquittal”).
Finally, Ms. Ryan asserts she “was not provided a
new notice of the implicit change in the basis for the
indefinite suspension.” Pet’r’s Br. 55. She explains:
The transition from clearance suspension to clear-
ance revocation was accompanied by a notice stat-
ing the reasons for the revocation, which included
the specifics of the indictment (as opposed to just
Ryan’s access to classified information was suspended on
March 28, 2012 and she was acquitted of criminal charges
on February 19, 2013. Her security clearance was re-
voked approximately five months later, on July 26, 2013.
This court has previously observed that security clearance
investigations “often take up to a year.” Griffin, 864 F.2d
at 1581; see also Gargiulo, 727 F.3d at 1182–83 (approxi-
mately sixteen-month period between suspension of
clearance and revocation of clearance).
RYAN v. DEP’T OF HOMELAND SEC. 13
the existence of the indictment, referenced in the
clearance suspension), and to which was added a
basis not stated in the indictment: misleading
statements to an ethics officer.
Id. at 54. As already noted, “[a] denial of a security
clearance . . . is not subject to [MSPB] review.” Egan, 484
U.S. at 530. The notice discussed in detail the bases for
the clearance revocation. It did not alter the basis for
suspending Ms. Ryan’s employment. The suspension, as
stated in the letter informing Ms. Ryan of the indefinite
suspension of her employment, was “based exclusively
upon the suspension of your access to classified infor-
mation.” J.A. 78. It was therefore Ms. Ryan’s inability to
access classified information, rather than the underlying
reasons for that inability, that formed the basis of the
indefinite suspension. See Gargiulo, 727 F.3d at 1185 (An
employee indefinitely suspended for failure to maintain a
required security clearance “ha[s] due process rights with
respect to [the] indefinite suspension, but they [do] not
include the right to contest the merits of the decision to
suspend [the] security clearance.”). The revocation of Ms.
Ryan’s clearance made this inability permanent.
CONCLUSION
For these reasons, the decisions of the MSPB are
AFFIRMED