Ryan v. Department of Homeland Security

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