Adam v. Norton

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID P. ADAM; LANFORD ADAMI; 

JAMES P. CALZIA; BELA CSEJTEY,

JR.; ALICE S. DAVIS; JAMES L.

DRINKWATER; ARTHUR B. FORD;

ARTHUR GRANTZ; BARRY F.

HIRSHORN; H. MAHADEVA IYER;

CHI-YU KING; STEPHEN L. LEWIS; No. 09-17091

ALLAN G. LINDH; DENNIS M.

MANN; A. THOMAS OVENSHINE;  D.C. No.

4:98-cv-02094-CW

BRENT D. TURRIN; CHESTER T.

WRUCKE, OPINION

Plaintiffs-Appellants,

v.

GAIL NORTON, Secretary of the

U.S. Department of the Interior,

Defendant-Appellee.



Appeal from the United States District Court

for the Northern District of California

Claudia A. Wilken, District Judge, Presiding

Argued and Submitted

October 6, 2010—San Francisco, California

Filed March 1, 2011

Before: Stephen Reinhardt and Marsha S. Berzon, Circuit

Judges, and Louis H. Pollak, Senior District Judge.*

*The Honorable Louis H. Pollak, Senior District Judge for the U.S. Dis-

trict Court for Eastern Pennsylvania, Philadelphia, sitting by designation.

3007

3008 ADAM v. NORTON

Opinion by Judge Reinhardt

3010 ADAM v. NORTON

COUNSEL

Mary Dryovage, San Francisco, California, for the plaintiff-

appellants.

Joseph P. Russoniello, United States Attorney, Joann M.

Swanson, Assistant United States Attorney, and Steven J.

Saltiel, Assistant United States Attorney, San Francisco, Cali-

fornia, for defendant-appellee the United States.

OPINION

REINHARDT, Circuit Judge:

The Back Pay Act waives the government’s sovereign

immunity from liability for interest on back pay awarded to:

[a]n employee of an agency who, on the basis of a

timely appeal or an administrative determination . . .

is found by appropriate authority under applicable

law . . . to have been affected by an unjustified or

unwarranted personnel action which has resulted in

the withdrawal or reduction of all or part of the

[employee’s] pay.

5 U.S.C. §§ 5596(b)(1), (b)(1)(A)(i), (b)(2)(A). This case

presents the question whether that explicit waiver of immu-

nity applies to interest on an award of back pay against the

federal government for terminating an employee in violation

of the Age Discrimination in Employment Act (ADEA). We

hold that it does.

I.

Chester Wrucke and James Calzia were terminated from

their positions as scientists for the U.S. Geological Survey

ADAM v. NORTON 3011

pursuant to a 1995 Reduction in Force. Wrucke and Calzia

filed appeals with the Merit Systems Protection Board

(MSPB), and after exhausting their administrative remedies

filed a timely complaint in the District Court for the Northern

District of California in 1998.1 The district court conducted a

bench trial in July 2003. The district court found that Wrucke

and Calzia were terminated in violation of the ADEA. After

a round of appellate litigation, the details of which are not rel-

evant to the present appeal, the case was remanded to the dis-

trict court, which entered judgment granting Wrucke and

Calzia back pay, as well as pre- and post-judgment interest.

On May 14, 2009, the government filed a Motion for Relief

from Judgment under Fed. R. Civ. P. 60(b), asking the court

to void the pre- and post-judgment interest under the theory

that the ADEA did not expressly waive the federal govern-

ment’s sovereign immunity from interest payments.2 Wrucke

and Calzia, in turn, argued that the Back Pay Act’s waiver of

federal sovereign immunity from interest for “unjustified or

unwarranted personnel action[s]” by the federal government,

5 U.S.C. § 5596(b)(1), (b)(2)(A), provides for pre- and post-

judgment interest on meritorious ADEA claims for wrongful

termination. The district court sided with the government,

holding that the “[Back Pay] Act does not expressly waive

1

The district court dismissed the claims of twelve additional plaintiffs

challenging the Reduction in Force, and this court affirmed that denial on

appeal. Those twelve plaintiffs are not involved in the present appeal.

2

Because sovereign immunity is a limitation on the district court’s

subject-matter jurisdiction, it can be asserted any time prior to final judg-

ment, as “[t]he government may not be equitably barred from asserting

jurisdictional requirements.” See Vacek v. U.S. Postal Service, 447 F.3d

1248, 1253 (9th Cir. 2006); see also Grupo Dataflux v. Atlas Global

Group, L.P., 541 U.S. 567, 571 (2004) (“Challenges to subject-matter

jurisdiction can of course be raised at any time prior to final judgment.”)

(citing Capron v. Van Noorden, 2 Cranch 126 (1804)); Dunn & Black,

P.S. v. United States, 492 F.3d 1084, 1090 (9th Cir. 2007) (“It is well

established that the federal government cannot waive sovereign immunity

by failing to raise it before the district court.”).

3012 ADAM v. NORTON

immunity for interest on back pay under the ADEA.” Calzia

and Wrucke now appeal.

II.

[1] In Library of Congress v. Shaw, 478 U.S. 310 (1986),

the Supreme Court held that under the “no-interest rule,” “[i]n

the absence of express congressional consent to the award of

interest separate from a general waiver of immunity to suit,

the United States is immune from an interest award.” Id. at

314. The ADEA’s waiver of federal sovereign immunity does

not expressly waive the federal government’s immunity from

awards of interest. See 29 U.S.C. § 633a. The Back Pay Act,

however, does explicitly waive the government’s immunity

from interest on back pay awarded for certain types of “unjus-

tified or unwarranted personnel action[s].” 5 U.S.C.

§ 5596(b)(1), (b)(2)(A). We therefore must determine whether

the Back Pay Act’s waiver of sovereign immunity from inter-

est on back pay awards against the federal government

extends to back pay awarded under the ADEA. We hold that

it does.

[2] The Back Pay Act was passed in 1966 with the goal of

“establish[ing] a single, general, and comprehensive pay

adjustment authority to be applied after an erroneous or

unwarranted personnel action is corrected.” H.R. Rep. No. 89-

32, at 1 (1965). It makes back pay, “payable with interest,”

available to:

An employee of an agency who, on the basis of a

timely appeal or an administrative determination . . .

is found by appropriate authority under applicable

law, rule, regulation, or collective bargaining agree-

ment, to have been affected by an unjustified or

unwarranted personnel action which has resulted in

the withdrawal or reduction of all or part of the pay,

allowances, or differentials of the employee—

ADAM v. NORTON 3013

5 U.S.C. §§ 5596(b)(1), (b)(1)(A)(i), (b)(2)(A) (emphasis

added). By its clear terms, this express waiver of sovereign

immunity applies to actions, such as this one, in which an

agency employee sues the federal government under substan-

tive anti-discrimination statutes such as the ADEA, alleging

that a wrongful personnel action resulted in “the withdrawal

or reduction of . . . pay, allowances, or differentials.” Cf.

Brown v. Sec’y of the Army, 918 F.2d 214, 216 (D.C. Cir.

1990) (“[W]e find in [the Back Pay Act’s] text no hint of an

exclusion of, or exemption for, federal sector Title VII adjudi-

cations.”). In so finding, we join with three other circuits that

have concluded that the Back Pay Act’s waiver of immunity

from interest awards applies to a federal employee’s termina-

tion or reduction in pay in violation of substantive anti-

discrimination statutes. See, e.g., Woolf v. Bowles, 57 F.3d

407, 410-11 (4th Cir. 1995); Edwards v. Lujan, 40 F.3d 1152,

1154 (10th Cir. 1994); Brown, 918 F.2d at 217-218.

Our conclusion is compelled by the Back Pay Act’s text.

The Act waives federal sovereign immunity for both back pay

and interest, when: 1) the plaintiff is an employee of an

agency; 2) the plaintiff makes a “timely appeal” or obtains

“an administrative determination” regarding such a personnel

action; 3) the plaintiff obtains a favorable ruling “under an

applicable law, rule, regulation, or collective bargaining

agreement” from an “appropriate authority” stating that the

plaintiff has been “affected by an unjustified or unwarranted

personnel action”; and 4) the unjustified personnel action

resulted in a “withdrawal or reduction” of the plaintiff’s pay,

allowances, or differentials. See 5 U.S.C. § 5596(b)(1).

[3] Here, plaintiffs, who served as scientists for the U.S.

Geological Survey, were clearly “employee[s] of an agency.”

5 U.S.C. § 5596(b)(1).3 Plaintiffs also filed a “timely appeal”

3

See also 5 C.F.R. § 550.803 (“When the term employee is used to

describe an individual who is making a back pay claim, it also may mean

a former employee.”).

3014 ADAM v. NORTON

as defined by the Office of Personnel Management regula-

tions that interpret the Act. Those regulations state that the

requirement for a timely appeal is met when:

An employee or an employee’s personal representa-

tive initiates an appeal or grievance under an appeal

or grievance system, including appeal or grievance

procedures included in a collective bargaining agree-

ment; a claim against the Government of the United

States; a discrimination complaint; or an unfair labor

practice charge

and “an appropriate authority accepts that appeal, grievance,

claim, complaint, or charge as timely filed.” 5 C.F.R.

§ 550.804 (b)(1)-(2) (emphasis added). Here, plaintiffs initi-

ated “an appeal or grievance under an appeal or grievance

system” by filing an appeal of their termination with the Merit

Systems Protection Board (MSPB), which recognized the

appeal as timely filed. Moreover, plaintiffs’ suit in the district

court, which was likewise recognized as timely filed, involved

both “a claim against the Government of the United States”

and “a discrimination complaint.” 5 C.F.R. § 550.804(b)(1).

Thus, both the plaintiffs’ MSPB appeal and their district court

action satisfy the Back Pay Act’s requirement for a “timely

appeal.”

[4] Furthermore, the district court that rendered judgment

for the plaintiffs in this case was, without question, an “appro-

priate authority” to make a finding of wrongful termination in

this case. Though the statute’s language is quite clear even

without reference to the OPM’s interpretation, the agency’s

Back Pay Act regulations confirm this straightforward conclu-

sion, defining an “appropriate authority” as “an entity having

authority in the case at hand to correct or direct the correction

of an unjustified or unwarranted personnel action, including

. . . a court.” 5 C.F.R. § 550.803.4 It is quite clear that the

4

The government argues that a court cannot serve as an “appropriate

authority” under the Back Pay Act, notwithstanding § 550.803’s explicit

ADAM v. NORTON 3015

Back Pay Act’s reference to an “unjustified or unwarranted

personnel action” on its face encompasses a termination that

violates the ADEA, and, again, the OPM regulations confirm

this most reasonable reading of the statute:

Unjustified or unwarranted personnel action means

an act of commission or an act of omission . . . that

an appropriate authority subsequently determines, on

the basis of substantive or procedural defects, to

have been unjustified or unwarranted under applica-

ble law, Executive order, rule, regulation, or manda-

tory personnel policy established by an agency or

through a collective bargaining agreement. Such

actions include personnel actions and pay actions

(alone or in combination).

5 C.F.R. § 550.803 (emphasis added). Thus, an appropriate

authority found that an act of commission (plaintiffs’ termina-

tion) was unjustified by virtue of substantive violation of

plaintiffs’ rights (age discrimination) under applicable law

statement to the contrary. It does so on the basis of an unexplained citation

to a Court of Claims case, Bell v. United States, 23 Cl. Ct. 73, 76 (1991).

Bell did not arise under the Back Pay Act and does not hold that a court

is not an appropriate authority under the Back Pay Act. Indeed, Bell’s only

possible relevance to this case is that it refers to the Supreme Court’s hold-

ing in United States v. Fausto, 484 U.S. 439 (1988), that under the Civil

Service Reform Act of 1978, “nonepreference members of the excepted

service” cannot obtain judicial review under the Back Pay Act for certain

categories of personnel actions, such as actions “based on unacceptable

job performance.” Id. at 445. But the Supreme Court’s holding in Fausto

was limited to specific categories of civil service claims brought by spe-

cific categories of government employees, and does not entail a conclu-

sion that a court is not an “appropriate authority” under the Back Pay Act.

See id. at 455 (“[The CSRA’s] deliberate exclusion of employees in

respondent’s service category from the provisions establishing administra-

tive and judicial review for personnel action of the sort at issue here pre-

vents respondent from seeking review in the Claims Court under the Back

Pay Act.”) (emphasis added).

3016 ADAM v. NORTON

(the ADEA). Finally, plaintiffs’ termination indisputably led

to a “withdrawal or reduction of all or part of the pay, allow-

ances, or differentials of the employee.”

[5] Moreover, the ADEA is without question an “applica-

ble law” for purposes of the Back Pay Act. The OPM’s regu-

lations do not define “applicable law,” nor is the meaning of

“applicable” otherwise obvious from the text of the statute.

However, the House committee report for the Back Pay Act

states that the phrase “applicable law” is intended “to cover

those laws and regulations, now or hereafter in effect, which

provide the basis for operations under the Government per-

sonnel systems.” H.R. Rep. No. 89-32, at 4 (1965) (emphasis

added). The ADEA provides precisely such a basis for federal

personnel operations by barring a wide range of federal

employers, including all “executive agencies,” from carrying

out personnel actions that discriminate against employees

over the age of 40. See 29 U.S.C. § 633a. Such a broad and

mandatory proscription, which governs all personnel actions

undertaken by federal executive agencies, plainly provides a

“basis for operation under the [federal] Government personnel

system.” Any doubt as to the ADEA’s central role in the fed-

eral personnel system is dispelled by the statute’s treatment in

the Civil Service Reform Act (CSRA) of 1978, which “estab-

lished a comprehensive system for reviewing personnel action

taken against federal employees.” Fausto, 484 U.S. at 455.

The CSRA created an elaborate procedure for the vindication

of civil servants’ ADEA claims, including a requirement that

federal agencies resolve ADEA claims, a requirement that

agency decisions be appealable to the Merit Systems Protec-

tion Board, and a provision for judicial review. See 5 U.S.C.

§ 7702(a). By explicitly providing for resolution of ADEA

claims as part of its comprehensive “framework for evaluating

adverse personnel actions against [federal employees],”

Fausto, 484 U.S. at 443, the CSRA confirms that the ADEA’s

ban of age discrimination is a basic civil service protection,

and precisely the sort of “applicable law” that Congress con-

templated in adopting the Back Pay Act’s waiver of sovereign

ADAM v. NORTON 3017

immunity. Thus, one need not look any further than the text

of the Back Pay Act to recognize that the Act waives the fed-

eral government’s immunity from liability for interest in cases

such as this one. Calzia and Wrucke were “employee[s] of an

agency who, on the basis of a timely appeal [their district

court action] . . . [were] found by appropriate authority [the

district court] under applicable law [the ADEA] . . . to have

been affected by an unjustified or unwarranted personnel

action which has resulted in the withdrawal . . . of all or part

of” their pay. 5 U.S.C. § 5596(b)(1). All of the Back Pay

Act’s conditions for a waiver of sovereign immunity on inter-

est are clearly satisfied in this case, and Calzia and Wrucke

are accordingly entitled to interest on the award of back pay

they secured in the district court.

III.

The government’s arguments to the contrary are wholly

unpersuasive. That the ADEA itself does not waive the gov-

ernment’s sovereign immunity from interest is irrelevant. The

Back Pay Act was intended to provide “a more uniform and

equitable basis” for awards of back pay to federal employees.

H.R. Rep. No. 89-32, at 1 (1965) (emphasis added). Reflect-

ing the goal of uniformity in back pay awards, the Act’s

waiver of immunity expressly extends to cases in which a per-

sonnel action is found to be unwarranted under “applicable

law, rule, regulation, or collective bargaining agreement.” 5

U.S.C. § 5596(b)(1). This language clearly does not contem-

plate that the Back Pay Act’s waiver of immunity applies only

to laws, rules, regulations, or collective bargaining agree-

ments that contain their own separate waiver of sovereign

immunity. The Act’s text does not hint at such a limitation,

and reading such a limitation into the Act would result in a

fragmented back pay scheme completely at odds with the

Act’s purpose of establishing “a single, general, and compre-

hensive pay adjustment authority to be applied after an erro-

neous or unwarranted personnel action is corrected.” H.R.

Rep. No. 89-32, at 1 (1965).

3018 ADAM v. NORTON

We disagree with the Eighth Circuit’s holding that, under

the no-interest rule, “to provide the sovereign immunity

waiver [for interest] absent in Title VII, the separate statute

must, at a minimum, unequivocally express Congress’s intent

to waive sovereign immunity under Title VII.” Arneson v.

Callahan, 128 F.3d 1243, 1246 (8th Cir. 1997). The Eighth

Circuit’s approach, which directly conflicts with that of the

D.C. Circuit as well as that of the Fourth and Tenth Circuits,

would render impracticable Congress’s goal of creating a sin-

gle uniform system for civil servant back pay awards, as it

would require the Back Pay Act to be constantly amended to

explicitly reference each new substantive employment statute

enacted by Congress. We see no reason why the no-interest

rule requires such a result, as that rule merely requires that the

federal government’s waiver of immunity from an award of

interest be express—not that the waiver must specifically

mention every statute to which it may conceivably apply. See

Library of Congress v. Shaw, 478 U.S. 310, 311 (1986). There

is no logical reason why the rule should bar Congress from

adopting a general waiver of immunity from an award of

interest, so long as it does so in express terms, as it did in the

Back Pay Act.

[6] For similar reasons, it is not relevant that plaintiffs did

not bring an action under the Back Pay Act itself. As the Dis-

trict of Columbia Circuit has explained, “the Back Pay Act is

an auxiliary measure” in relation to substantive

antidiscrimination statutes such as the ADEA. Mitchell, 918

F.2d at 217 (emphasis added).5 Just as civil rights plaintiffs

need not bring suit under 42 U.S.C. § 1988 in order to collect

attorney’s fees from the government under that provision, a

5

This is not to say that the Back Pay Act will always serve only as an

auxiliary measure: where a finding of an unwarranted personnel action is

based upon an agency regulation or other legal rule which does not itself

create a federal cause of action, the Back Pay Act may provide a cause of

action for the recovery of back pay in federal court. See, e.g., Fausto, 484

U.S. at 442.

ADAM v. NORTON 3019

federal employee suing the government for violation of a sub-

stantive antidiscrimination statute need not bring suit under

the Back Pay Act in order to receive back pay and interest

from the United States. Where a federal employee brings an

action under an “applicable law” that itself provides a federal

cause of action and waives the government’s immunity from

suit, the operation of the Back Pay Act’s waiver of interest

turns not on whether the suit is brought under the Back Pay

Act, but rather on whether the express terms of the Back Pay

Act are satisfied, as they clearly are in this case.

The government poses the question of why, if the Back Pay

Act (which was enacted in 1966) were intended to waive

immunity in suits brought under substantive anti-

discrimination statutes, Congress found it necessary to amend

Title VII in 1972 to permit discrimination suits against the

federal government, and why it found it necessary to again

amend Title VII in 1991 to allow for awards of interest. The

government’s argument regarding the 1972 amendments to

Title VII confuses the issue of the government’s substantive

liability for violations of Title VII with the question of its lia-

bility for interest once such a violation has been found. The

Back Pay Act does not waive the government’s sovereign

immunity from suit under statutes such as the ADEA or Title

VII; it merely waives the government’s immunity from cer-

tain remedies where the government has already waived its

immunity from suit. Because the Act operates only where the

government has already waived its immunity from suit, it did

not obviate the need for Congress to expressly waive the gov-

ernment’s immunity from suit for violations on its part of

Title VII’s anti-discrimination provisions.

Likewise, Congress’s decision to amend Title VII in 1991

to allow for awards of interest followed shortly after the D.C.

Circuit’s 1990 decision in Brown v. Mitchell, 918 F.2d 214.

Brown held that although the Back Pay Act applies to Title

VII suits, because the Act is limited to personnel actions

resulting in a “withdrawal or reduction of all or part of the

3020 ADAM v. NORTON

[employee’s] pay,” its remedies were unavailable to plaintiffs

who sued under Title VII not regarding a reduction in pay, but

rather regarding wrongfully withheld promotions. Id. at 220;

see also United States v. Testan, 424 U.S. 392, 406 (1976)

(holding that Back Pay Act does not provide a remedy for

misclassified federal employees). Congress’s 1991 amend-

ments to the Civil Rights Act allowed Title VII plaintiffs to

obtain interest even in cases, such as denials of promotion, not

involving such a “withdrawal or reduction” of an employee’s

pay. As such, the 1991 amendments expanded upon the inter-

est waiver of the Back Pay Act, and would not be rendered

superfluous, as the government suggests, by a reading of that

Act, such as the D.C. Circuit had just given it.

IV.

[7] The “government offers no convincing reason why the

Back Pay Act does not supply the immunity waiver prescrip-

tion absent in” the ADEA. Brown, 918 F.2d at 216. Our con-

clusion that the Back Pay Act does, in fact, provide such a

waiver, is the only one available to us in light of the Act’s

clear and unequivocal language, as well as Congress’s clear

intent that the Act define a uniform remedial scheme for all

awards of back pay against the federal government. Calzia

and Wrucke are accordingly entitled to an award of interest in

addition to the back pay already awarded to them by the dis-

trict court.

REVERSED and REMANDED.