The opinion of the court was delivered by: BECKER
This case, arising in a military setting, raises a number of interesting questions of federal jurisdiction and of administrative and constitutional law as respects the "right" of a serviceman to reenlist in the armed forces. Plaintiff Joseph S. Neal ("Neal") is a former gunnery sergeant in the United States Marine Corps who, at the time of his discharge, had served more than 14 years on active duty. Not counting several routine enlistment extensions, Neal had received permission to reenlist twice: once on November 18, 1964, and again on October 24, 1970. However, when Neal was honorably discharged from the Marine Corps on December 23, 1974, he was assigned the reenlistment code RE-3C, which bars reenlistment absent permission from the Commandant of the Marine Corps. The reenlistment bar was imposed in spite of Neal's efforts to reenlist as he had done in the past. This lawsuit, which names as defendants the Secretary of the Navy and the Commandant of the Marine Corps, is based upon a series of events triggered by Neal's unsuccessful efforts to reenlist, and seeks as relief an order that Neal be reinstated in the Corps with retroactive promotions and backpay. There being no genuine issue of material fact, it is properly before us on cross-motions for summary judgment.
Neal commenced this action on October 26, 1976 in the form of a petition for a writ of mandamus to compel the Board for the Correction of Naval Records ("BCNR") to exercise jurisdiction which it had theretofore declined to exercise. Specifically, Neal asked us to compel the BCNR to act upon his request for review of the decision by the Commandant, in accordance with the recommendation of the Marine Corps Enlisted Performance Board ("EPB"), not to permit him to reenlist. In due course we ordered the BCNR to decide the matter.
The BCNR then reviewed Neal's request, and on April 5, 1978 it informed him that it would let stand the reenlistment bar because there was "insufficient evidence of error or injustice to warrant any corrective action."
Having received this unfavorable decision, Neal amended his complaint and now challenges the refusal to permit him to reenlist on several grounds. First, he contends that the EPB recommendation was invalid because the Board failed to comply with prescribed regulations and procedures, and because no subsequent action taken by the Corps was sufficient to cure these errors. Second, he claims that the EPB decision and the BCNR failure to correct it were so arbitrary and capricious as to constitute an abuse of agency discretion. Finally, Neal contends that the regulations and procedures governing both Boards do not comport with the requirements of procedural due process, and that as a result defendants' actions violated his constitutional rights. To remedy these alleged violations, Neal seeks orders directing that he be reenlisted in the Marine Corps as of the date of the expiration of his prior term of enlistment, that all documents pertaining to the decision to bar his reenlistment be destroyed or sealed, and that he be accorded backpay and retroactive promotions.
Defendants as a preliminary matter, and in light of the changes in the posture of the case since the time of its inception, challenge our subject matter jurisdiction. Second, they deny that there were any irregularities in the EPB proceedings or that either Board acted arbitrarily in Neal's case. Third, they urge that the Commandant's decision was a discretionary one which we have only very limited power to review. Finally, defendants contend that the Commandant's denial of permission to reenlist impinged upon no liberty or property interest of Neal's, and that without any such interest the constitutional requirements of procedural due process do not apply. Alternatively, defendants argue that to the extent that those requirements do apply, they were followed in Neal's case.
As will appear from the discussion which follows, we hold that defendants' actions with respect to Neal comported with all applicable statutes and regulations and that they were within the bounds of agency discretion. We also hold that Neal had no protectible property or liberty interest in reenlisting, so that defendants' actions did not implicate any of his Fifth Amendment due process rights. However, before discussing the substance of the parties' contentions and several underlying issues, we must first describe more fully the factual background.
II. The Facts and Procedural History of the Case
Neal enlisted in the Marine Corps on May 18, 1960, and served on active duty until he was honorably discharged on December 23, 1974. It is undisputed that his overall service record was "above average to excellent," and particularly outstanding during his last four years of service. See EPB transcript. He served in Cuba in the early 1960s, and was decorated for his actions during two tours of duty in combat in Viet Nam. He also received the Good Conduct Medal on four occasions for conduct denoting "honesty and faithful service in keeping with the highest traditions of the Marine Corps."
The Corps' recognition of the high quality of Neal's performance was manifested not only through various awards and consistently high efficiency ratings, but also through his promotion to the rank of gunnery sergeant (E-7) in July of 1973 and his appointment to recruiting duty in February of 1974 which, in the words of the Commandant, "(was) in itself evidence that (Neal's) record (was) one of the Corps' finest. See Correspondence of February 18, 1974 to Neal from C. W. Hoffman, by direction of the Commandant. Each of these actions in recognition of Neal's service might have required an extension of Neal's enlistment; the recruiting duty would have been for a period in excess of his current enlistment term, and in connection with his promotion, the Corps required him to execute an agreement to reenlist for a period of two years at the end of his current enlistment term.
On August 22, 1974, Neal's Commanding General received a letter from the office of the Commandant, advising him that Neal's request had been referred to the EPB, and directing him: (1) to inform Neal of the likelihood that in conjunction with its review of his request, the EPB would consider two reports by the Naval Investigative Service ("NIS") dated 9/18/72 and 1/8/74 respectively, which were contained in Neal's file; (2) to inform Neal that the EPB would consider any written statement by Neal concerning these reports, provided that it was forwarded to Headquarters prior to September 11, 1974; and (3) to have Neal evaluated by a psychiatrist to determine his fitness for continued service. Accordingly, Neal was informed that the EPB would consider two NIS reports in his files and that he could submit his own statement regarding the incidents covered by those reports. However, both Neal's and his Commanding Officer's efforts on Neal's behalf to obtain more information concerning the contents of the NIS reports were unavailing. Neal nevertheless did write a statement for submission to the EPB, and it was forwarded along with the requested psychiatric evaluation.
On October 16, 1974 the EPB convened to consider Neal's reenlistment request. The following materials were presented to the Board for its consideration: (1) Neal's official Enlisted Personnel File; (2) NIS investigative reports showing: (a) that in 1970 Neal had been interviewed concerning his knowledge of suspected homosexual activity on the part of another Marine; (b) that in 1972, while Neal was stationed in Okinawa, there was a brief investigation into allegations by another Marine that Neal had made homosexual advances toward him, but that the investigation was soon dropped; and (c) that in 1974, acting on a complaint by a young man, California police had arrested Neal for assault with a deadly weapon, sodomy, and sexual perversion involving oral copulation, but that the charges were subsequently dismissed when the alleged victim failed to appear for trial;
(3) Neal's reenlistment request and the accompanying endorsement of his Commanding Officer; (4) a copy of a psychiatric evaluation of Neal by Dr. R. Aitken, finding him fit for further duty, with no sign of thought disorder; (5) Neal's own written statement concerning the Okinawa and California incidents which were the subjects of the NIS reports;
and (6) the Precept for the EPB. See Exhibit 1 to Defendants' Motion to Dismiss or for Summary Judgment (affidavit of Col. William E. Riley, Jr.). Neal did not appear personally before the Board, nor were any other witnesses heard.
The EPB, finding that Neal's personal conduct over the previous five years had been "prejudicial to the Marine Corps and not in keeping with the high standards expected of staff noncommissioned officers," recommended against reenlistment, and on November 12, 1974 the Commandant approved this recommendation. On November 20, 1974 Neal was so advised by letter, and on December 23, 1974 he was discharged from the Corps with an honorable discharge, and with a reenlistment code of RE-3C.
On June 11, 1976, after receiving copies of his personal record and "releasable NIS reports,"
Neal, through his attorney, petitioned the BCNR for correction of his records. Specifically, he asked the Board to alter his assigned code so as to enable him to reenlist. On June 24, 1976 the BCNR declined to exercise jurisdiction over Neal's case, stating that it was without authority to review or change reenlistment codes. Neal then instituted this lawsuit on October 26, 1976 to compel the BCNR to consider his case, and on March 17, 1977 the Board reversed its previous position and agreed to do so.
A panel of 3 members of the BCNR met on April 4, 1978 to consider Neal's application. Documentary material before the Board included Neal's application and his counsel's brief in support thereof, the EPB precept and transcript, Neal's Marine Corps record, and several advisory opinions which had been solicited by the Board, responding to the legal issues raised by Neal's counsel.
The dissenting Board member found a procedural error warranting corrective action, in that the NIS reports contributed to the Board's recommendation, thus making it improper for the Board to have considered these reports without first giving Neal the opportunity to examine and make comment on them. Accordingly, he recommended partial relief, to the extent that another EPB be convened to determine whether or not Neal should be reenlisted, and that Neal be given the opportunity to appear before the Board with counsel.
Having received an unfavorable decision from the BCNR, Neal once again sought the aid of this court, this time in an amended complaint in which he attacked the procedures used to deny him permission to reenlist as violative of prescribed regulations and of his constitutional rights.
It is the issues raised in that complaint which form the basis for motions that are now before us, and it is those issues to which we turn for discussion.
The Government contends that while Neal's amended complaint may well raise questions "(arising) under the Constitution, laws, or treaties of the United States," § 1331 alone will not support jurisdiction in this court because it does not contain the requisite waiver of sovereign immunity. Quoting from Dugan v. Rank, 372 U.S. 609, 620, 83 S. Ct. 999, 10 L. Ed. 2d 15 (1963) the Government argues that although Neal's suit is nominally against federal officers, it is in fact against the United States because a judgment in Neal's favor would "interfere with the public administration," " "restrain the Government from acting, or to compel it to act,' " and " "expend itself on the public treasury or domain.' " Specifically, the Government notes that Neal seeks both an order compelling broad-ranging governmental action and a monetary judgment from the public treasury in the form of judicially authorized backpay. According to the Government, it is precisely this kind of suit which is barred by the doctrine of sovereign immunity, irrespective of the substantiality of any federal question raised by the complaint.
The legal principles which define the contours of the doctrine of sovereign immunity are far from clear. The cases do support the Government's position that as a general rule, a suit against a public official in his official capacity is treated as if it were brought directly against the government, See Hawaii v. Gordon, 373 U.S. 57, 83 S. Ct. 1052, 10 L. Ed. 2d 191 (1973),
and that immunity bars a suit which will interfere with the public administration or affect the public treasury. See Dugan v. Rank, supra. There are, however, exceptions to this general rule. Sovereign immunity is not a bar if the public official is acting in excess of his authority, or if his authority is unconstitutional or is being exercised in an unconstitutional manner. See Dugan v. Rank, supra 372 U.S. at 621-22, 83 S. Ct. 999; Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 689-91, 69 S. Ct. 1457, 93 L. Ed. 1628 (1949).
It is clear from the allegations of Neal's amended complaint that he is attempting to overcome the sovereign immunity bar by fitting within the above-described exceptions to the general rule. The complaint is replete with allegations that the defendants acted beyond their authority (E.g. by failing to follow their own regulations and by rendering a decision for which there was no basis in fact) and that they violated Neal's constitutional rights (E.g. by failing to accord him procedural due process before the EPB). It is also evident, though, that a determination of the sovereign immunity issue thus posed requires a decision on the ultimate questions in the suit. Other courts have resolved this seemingly circular problem of how to avoid deciding the merits of a case under the guise of a jurisdictional determination by adopting a procedure of accepting at face value, for jurisdictional purposes only, the averments of the complaint, unless they are so insubstantial or frivolous as to afford no conceivable basis for jurisdiction. See, e.g., Carter v. Seamans, 411 F.2d 767 (5th Cir. 1969), Cert. denied, 397 U.S. 941, 90 S. Ct. 953, 25 L. Ed. 2d 121 (1970); Cf. Mattern v. Weinberger, 519 F.2d 150 (3d Cir. 1975), Vacated and remanded on other grounds sub nom. Mathews v. Mattern, 425 U.S. 987, 96 S. Ct. 2196, 48 L. Ed. 2d 812 (1976) (where jurisdiction is alleged pursuant to the mandamus statute, the fact that the existence of a duty on the part of the defendant only becomes clear after consideration of the merits of the case does not deprive the court of mandamus jurisdiction; any other approach would lead to an "oddly circular result." Id. at 157).
Employing this procedure in the instant case and accepting as true the averments of the complaint for jurisdictional purposes only, we must reject defendants' sovereign immunity claim. Neal alleges in his amended complaint that the defendants violated his Fifth Amendment due process rights by, Inter alia, considering untrustworthy hearsay statements as evidence against him while denying him the right to even see those statements, denying him the right to consult with counsel to prepare a defense against then-unknown charges against him, denying him the right to representation before the EPB, and denying him the right to confront adverse witnesses. P 14. Neal further alleges that the defendants failed to follow their own regulations by ignoring the prescribed guidelines and standards for barring reenlistment. P 14. These allegations are neither insubstantial nor frivolous; rather, they raise serious questions as to whether the defendants have acted in excess of their authority or whether their authority is unconstitutional or was exercised in an unconstitutional manner in Neal's case. Accordingly, Neal's allegations are sufficient to overcome defendants' sovereign immunity defense.
Even if we were to determine that the allegations of Neal's complaint are not sufficient to bring the case within the exception to the sovereign immunity doctrine, we would nevertheless reject defendants' sovereign immunity claim because we believe that Congress has waived immunity to some of Neal's claims by statute. We find precedent for this proposition in the recent Third Circuit decision of Jaffee v. United States, 592 F.2d 712 (3d Cir.), Cert. denied, -- - U.S. -- , 99 S. Ct. 2406, 60 L. Ed. 2d 1066 (1979). There the court held that the 1976 Amendments to § 702 of the Administrative Procedure Act ("APA"), 5 U.S.C. § 702 (1976), reflect a Congressional intent to waive sovereign immunity under some circumstances. This section now provides, in pertinent part:
A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party . . . Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground . . ..
In Jaffee, rejecting the Second Circuit's contrary view as expressed in Watson v. Blumenthal, 586 F.2d 925 (2d Cir. 1978), the court held that "section 702, when it applies, waives sovereign immunity in "nonstatutory' review of agency action under (28 U.S.C.) section 1331." 592 F.2d at 718.
Specifically, the court held that the waiver applies to Equitable actions under § 1331, I. e. suits for relief other than money damages, in which review of Agency action is sought, I. e. action by an "agency" as that term is defined in 5 U.S.C. § 701(b)(1) (1976). Our determination that this holding supports a finding in the instant case of at least a partial waiver of sovereign immunity can best be understood by first examining more closely the Jaffee case itself.
Stanley Jaffee was serving in the Army in 1953 when the Government tested a nuclear device at Camp Desert Rock, Nevada. Jaffee averred that he and other soldiers were ordered to stand in an open field near the explosion site without benefit of any protection against radiation, and that the Government knew but deliberately ignored the grave risks involved, and compelled the soldiers' participation in the testing and consequent radiation exposure. Jaffee further alleged that because of the radiation exposure, he had developed inoperable cancer.
Asserting that the Government had deliberately violated a number of rights guaranteed by the Constitution, Jaffee and his wife filed a four-count complaint in the United States District Court for the District of New Jersey. In Counts I, II and III, not important for purposes of this discussion, the Jaffees made various claims for money damages. Count IV was a class action in which Jaffee sought to represent all of the soldiers who were ordered to be present at the explosion. In this Count, naming only the United States as a defendant, Jaffee requested that the United States be required both to warn all class members about the medical risks facing them and to provide or subsidize medical care for the class. The district court dismissed Count IV on grounds of sovereign immunity, and while retaining jurisdiction over the other counts, it certified the dismissal for appeal. Thus it was the correctness of the district court's dismissal, on sovereign immunity grounds of Jaffee's Count IV request for both equitable and monetary relief, that was at issue before the Third Circuit in Jaffee.
After determining that the 1976 amendment to § 702 of the APA, 5 U.S.C. § 702 (1976), was a waiver of sovereign immunity in suits for equitable relief seeking "nonstatutory" review of agency action, the Jaffee court turned to the question whether Jaffee's Count IV claims came within the ambit of this waiver. The court first examined these claims in terms of the kinds of relief Jaffee sought on behalf of the class: government-subsidized medical care and warning about medical risks. Turning first to the request for medical care for the class, the court characterized it as an action for money damages, which was barred by sovereign immunity because it did not come within the waiver of § 702.
The claim for warning, however, was deemed equitable and not foreclosed by the limitation of § 702 to non-monetary relief.
Having determined that the Count IV claim for warning came within the waiver of § 702, and that it could properly be considered apart from the Count IV medical care claim which was barred, the court next turned to the question whether the governmental acts giving rise to Jaffee's suit were "agency action" so as to be covered by the statutory waiver. To make this determination, the court looked to the APA definition of "agency" as found in 5 U.S.C. § 701(b)(1) (1976). This section provides that "agency" includes "each authority of the Government whether or not it is within or subject to review by another agency . . .." Following this broad definition, the statute creates several specific exceptions, none of which was found to be applicable to the United States Army under the facts of Jaffee. Accordingly, ...