Jorge Aviles v. Merit Systems Protection Board

Case: 14-60645 Document: 00513166776 Page: 1 Date Filed: 08/24/2015

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-60645 United States Court of Appeals

Fifth Circuit

FILED

JORGE A. AVILES, August 24, 2015

Lyle W. Cayce

Petitioner, Clerk

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent.

Petition for review of a final order from the

Merits Systems Protection Board

Before CLEMENT, PRADO, and ELROD, Circuit Judges.

EDWARD C. PRADO, Circuit Judge:

Former IRS agent Jorge Aviles asserts that he was fired in retaliation

for protected whistleblowing. Aviles alleges that he uncovered that

ExxonMobil Corporation (“Exxon”) had perpetrated a $500 million tax fraud

and that IRS officials covered it up. Aviles claims he disclosed this information

to his supervisors and that he was ultimately fired in retaliation for this

protected disclosure in violation of the Whistleblower Protection Act. An

administrative law judge (ALJ) dismissed Aviles’s appeal. The ALJ found

that—aside from Aviles’s “vague and conclusory” allegations of a cover-up—

Aviles failed to allege that the government was involved in Exxon’s alleged

wrongdoing. Over a dissent, the Merit Systems Protection Board (“MSPB” or

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No. 14-60645

“the Board”) affirmed. Because we agree with the Board’s finding that Aviles

failed to make a nonfrivolous allegation of government involvement in Exxon’s

alleged wrongdoing, we conclude that Aviles’s disclosure was not protected and

deny his petition.

I. BACKGROUND

This is the first direct appeal to the Fifth Circuit from a Merit Systems

Protection Board adjudication in the wake of the 2012 amendments to the

Whistleblower Protection Act. Aviles grounds his petition for review in the

drafting history of the Whistleblower Protection Act; he argues that Congress

has repeatedly expanded the definition of protected whistleblowing activities.

Accordingly, before reviewing the underlying facts and procedural background,

we provide a brief overview of the drafting history and the statutory scheme

governing Aviles’s claim.

A. Legal Background and Statutory Framework

The Civil Service Reform Act of 1978 established statutory protections

to encourage federal employees to disclose government illegality, waste, fraud,

and abuse; and also established the Merit Systems Protection Board as an

independent agency to adjudicate these claims. Pub. L. No. 95-454, §§ 101, 202,

92 Stat. 1111, 1113–14, 1121–31. Congress later passed the Whistleblower

Protection Act (WPA) of 1989, Pub. L. No. 101-12, 103 Stat. 16. The WPA

proscribes retaliation against a federal employee who discloses what the

employee reasonably believes evidences a violation of any law, rule, or

regulation, gross mismanagement, a gross waste of funds, an abuse of

authority, or a substantial and specific danger to public health or safety. See 5

U.S.C. § 2302(b)(8).

From its inception in 1982 until recently, the Federal Circuit exercised

exclusive jurisdiction over petitions for review of MSPB adjudications that

involved only federal-employee whistleblower claims. King v. Dep’t of the Army,

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570 F. App’x 863, 864 (11th Cir. 2014) (per curiam). These claims were directly

appealable to the Federal Circuit and reviewed for arbitrariness or

capriciousness and for substantial evidence. Id. at 865; see also 5 U.S.C.

§ 7703(c).

Concerned that the Federal Circuit and the MSPB had interpreted the

WPA’s definition of protected disclosures too narrowly, Congress amended the

statute in 1994. See Act of Oct. 29, 1994, Pub. L. No. 103-424, 108 Stat. 4361;

S. Rep. No. 103-358, at 8–10 (1994) (criticizing the Federal Circuit’s

“construction of the legislative history” and declaring that “the Board and the

courts should not erect barriers to disclosures which will limit the necessary

flow of information from employees who have knowledge of government

wrongdoing”). In 2012, Congress again significantly amended the WPA

through the Whistleblower Protection Enhancement Act (WPEA) to address

similar concerns. This time, to encourage diverse appellate review—which

leads to circuit splits (facilitating Supreme Court review), S. Rep. No. 112-155,

at 11 (2012)—Congress also expanded judicial review to all circuits, with this

provision of the law scheduled to “sunset” five years later, 5 U.S.C.

§ 7703(b)(1)(B); see also All Circuit Review Extension Act, Pub. L. No. 113-170,

128 Stat. 1894 (extending the sunset of all-circuit review to five years instead

of two years after enactment).

B. Factual and Procedural Background

The following factual background is essentially undisputed and is drawn

from the administrative record of the MSPB adjudication. Aviles worked as an

International Examiner at the IRS’s Large and Mid-Sized Business Division

in Houston, Texas. As part of his duties, Aviles worked onsite at Exxon’s

facility auditing its international tax filings. In September 2010, Aviles

received a letter from the Acting Territory Manager proposing that he be

“removed from his position for: 1) absence without leave for a total of 552 hours;

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2) failure to follow a managerial directive to report to work; and 3) providing

misleading statements in matters of official interest.” Later that year, the

proposal for Aviles’s removal was sustained, and Aviles’s employment with the

IRS ended.

In 2013, Aviles filed an individual right of action (IRA) appeal with the

MSPB, asserting that he was removed in retaliation for protected

whistleblowing. Specifically, Aviles alleged that he filed a complaint with the

Office of Special Counsel (OSC) 1 in which he explained that he had disclosed

to his supervisor on February 2, 2010, “[i]ncome tax fraud and blockage of

computer committed by ExxonMobil Corporation and[] the involvement by IRS

management team in helping to cover it up.” Aviles also alleged that on

February 16, 2010, he disclosed “income tax fraud in excess of US$ 500 million

for the tax years 2006 and 2007” on the part of Exxon to the Commissioner of

the IRS and other IRS officials. Aviles’s removal process started months later

in September 2010, and he was removed in November of that year.

1. MSPB Proceeding

The ALJ found that 5 U.S.C. § 2302(b)(8)’s protections “safeguard

whistleblowers against retaliation for the disclosure of governmental

wrongdoing,” and dismissed Aviles’s claim because he only alleged “tax fraud

by a private entity.” Importantly, the ALJ relied in part on the Federal

Circuit’s decision in Willis v. Department of Agriculture, 141 F.3d 1139 (Fed.

Cir. 1998) in making this ruling. The ALJ noted that “[a]llegations that

particular government officials allowed or facilitated wrongful conduct by a

private organization” may be protected. But the ALJ found that Aviles’s “vague

1 The Office of Special Counsel receives and investigates allegations of prohibited

personnel practices and disclosures of “violations of any law, rule, or regulation, or gross

mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific

danger to public health or safety.” 5 U.S.C. § 1212(a)(2)–(3). Indeed, before filing an

individual-right-of-action complaint, a federal employee must first present her allegations to

the OSC. See 5 U.S.C. § 1214(a)(3).

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and speculative assertion of possible unspecified ‘involvement’ by unidentified

agency officials in alleged private misconduct by a taxpayer does not constitute

a nonfrivolous allegation of whistleblowing activity.” Accordingly, the ALJ

dismissed Aviles’s claim for lack of jurisdiction, and the MSPB affirmed 2–1

over a dissent in a short, nonprecedential final order.

2. The Dissent

Vice Chairman Wagner dissented, and Aviles’s petition for review to this

Court echoes many of the points raised in the dissent. Vice Chairman Wagner

concluded that, in enacting the WPEA in 2012, “Congress contemplated that

its protection would extend to disclosures of wrongdoing by private entities

made by federal employees in the normal course of duties.” She argued that

this conclusion follows from the text of § 2302(f), through which Congress

“made clear that the statutory definition of a ‘protected disclosure’ includes

disclosures made by a federal employee in the normal course of duties.” She

bolstered her argument by relying on the legislative history, which she claims

evinces Congress’s intent in part to “overturn the . . . Federal Circuit’s decision

in Willis,” a decision that, as noted, the ALJ relied on.

***

Aviles timely petitioned for review of the MSPB’s decision directly to this

Court.

II. JURISDICTION AND STANDARD OF REVIEW

As noted above, the Federal Circuit previously had exclusive jurisdiction

to hear petitions for review of MSPB decisions. See Williams v. Wynne, 533

F.3d 360, 373 n.12 (5th Cir. 2008) (citing a previous version of 5 U.S.C.

§ 7703(b)(1) (2006)). 2 In 2012, Congress extended jurisdiction to all U.S. Courts

2 Federal district courts have had jurisdiction to review so-called “mixed cases”

involving claims of discrimination and also federal whistleblower-retaliation claims, and the

Fifth Circuit has appellate jurisdiction in these cases. E.g., Williams, 533 F.3d at 373 n.12.

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of Appeals when it passed the Whistleblower Protection Enhancement Act of

2012 (WPEA), Pub. L. No. 112-199, § 108(a), 126 Stat. 1468 (codified as

amended at 5 U.S.C. § 7703(b)(1)). Now, we have jurisdiction to review a final

order or decision from the MSPB under 5 U.S.C. § 7703(b)(1)(B).

Ordinarily, we review the merits of whistleblower-retaliation claims

presented to the MSPB based solely on the administrative record “and will

uphold the Merit Systems Protection Board’s determinations unless they are

clearly arbitrary and capricious, unsupported by substantial evidence or

otherwise not in accordance with law.” Williams, 533 F.3d at 373. But this

Court has not yet had an opportunity to review a threshold jurisdictional

determination.

Since this Court has not previously regularly reviewed MSPB decisions,

we look to the Federal Circuit for guidance. The Federal Circuit reviews de

novo the question whether the MSPB had jurisdiction to adjudicate a case,

reasoning that “[w]hether jurisdiction exists is a question of law.” Waldau v.

Merit Sys. Prot. Bd., 19 F.3d 1395, 1398 (Fed. Cir. 1994). 3

However, the Federal Circuit’s approach to MSPB jurisdictional

determinations may have been called into question by the Supreme Court’s

recent decision in City of Arlington, Texas v. FCC, 133 S. Ct. 1863 (2013). The

Court explained that “the distinction between ‘jurisdictional’ and

‘nonjurisdictional’ interpretations is a mirage,” id. at 1868, and it held that

“Chevron [deference] applies to cases in which an agency adopts a construction

of a jurisdictional provision of a statute it administers,” id. at 1871. No party

addressed this issue in their appellate briefs.

Indeed, “a court decides de novo whether an agency has acted within the bounds of

3

congressionally delegated authority.” Harry T. Edwards et al., Federal Standards of Review:

Review of District Court Decisions and Agency Actions ch. XIII(A) (2013).

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In light of City of Arlington, we assume without deciding that de novo

review applies, consistent with the Federal Circuit’s practice; as explained

below, we would deny the petition under either standard.

III. LEGAL STANDARD

There is an initial dispute about the petitioner’s burden to establish

threshold jurisdiction. To establish MSPB jurisdiction over an IRA appeal, the

burden is on the petitioner, and the petitioner “must make nonfrivolous

allegations . . . with regard to the substantive jurisdictional elements

applicable to the particular type of appeal he or she has initiated.” 5 C.F.R.

§ 1201.57(b); accord Kahn v. Dep’t of Justice, 528 F.3d 1336, 1341 (Fed. Cir.

2008). Federal regulations define “nonfrivolous allegation” in this context to

mean: “[A]n assertion that, if proven, could establish the matter at issue.” 5

C.F.R. § 1201.4(s). The regulations elaborate:

An allegation generally will be considered nonfrivolous when,

under oath or penalty of perjury, an individual makes an

allegation that:

(1) Is more than conclusory;

(2) Is plausible on its face; and

(3) Is material to the legal issues in the appeal.

Id.

Intervenor the Department of the Treasury (“Treasury”) contends that

“the appellant bears the burden to establish jurisdiction by a preponderance of

the evidence,” citing 5 C.F.R. § 1201.56 (emphasis added). Petitioner Aviles

disagrees. Aviles relies on the Federal Circuit’s decision in Garcia v.

Department of Homeland Security, in which the en banc court explained:

Section 1201.56 of the regulations, placing the burden of proof on

the employee with respect to “jurisdictional issues,” is plainly not

concerned with the first issue of technical jurisdiction (the need for

a non-frivolous allegation), but rather with the second issue

(concerning the ultimate merits). It places the burden of proof on

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the employee at a merits hearing with respect to merits issues that

are also jurisdictional issues. Thus, although the regulation

characterizes the issues with which it is concerned as

“jurisdictional” in nature, the regulation is directed, in fact, to the

allocation of the burden of proof on the merits.

437 F.3d 1322, 1333–34 (Fed. Cir. 2006) (en banc) (emphasis added) (quoting

Walley v. Dep’t of Veterans Affairs, 279 F.3d 1010, 1019 (Fed Cir. 2002)).

We agree with Aviles’s interpretation of Garcia, which we follow as

persuasive, and we conclude that Aviles need not establish jurisdiction by a

preponderance of the evidence. As Garcia makes clear, section 1201.56’s

preponderance-of-the-evidence standard applies only to the merits of

“constructive adverse action cases” under 5 U.S.C. § 7512, and it does not apply

to the threshold jurisdictional determination in Whistleblower Protection Act

cases. See 437 F.3d at 1325.

We also conclude that the standard for determining whether

nonfrivolous allegations are sufficient to meet the threshold jurisdictional

requirement for an IRA appeal is analogous to that which we use for evaluating

a motion to dismiss. 4 Accordingly, we accept all well-pleaded facts as true and

view those facts in the light most favorable to the petitioner. See Whitley v.

Hanna, 726 F.3d 631, 637 (5th Cir. 2013), cert. denied, 134 S. Ct. 1935 (2014).

4 We note that this approach conflicts with the approach of the Federal Circuit: “The

standard for determining whether non-frivolous disclosures exist is analogous to that for

summary judgment.” Kahn, 528 F.3d at 1341 (emphasis added) (internal quotation marks

omitted); see also Dorrall v. Dep’t of the Army, 301 F.3d 1375, 1380 (Fed. Cir. 2002), overruled

on other grounds by Garcia, 437 F.3d 1322 (“[T]he Board may properly consider the

government’s evidence as well as the employee’s in deciding the threshold question of

jurisdiction. . . . [I]n this context, the petitioner must show the existence of a material fact

issue as to voluntariness to support Board jurisdiction.”).

But because the applicable federal regulations closely track our motion-to-dismiss

standard—not our summary judgment standard—we decline to follow the Federal Circuit’s

approach. Compare 5 C.F.R. § 1201.4(s) (providing that a nonfrivolous allegation is a non-

conclusory allegation that “[i]s plausible on its face”), with Amacker v. Renaissance Asset

Mgmt. LLC, 657 F.3d 252, 254 (5th Cir. 2011) (explaining that, to survive a motion to dismiss,

the factual allegations taken as true must “state a claim that is plausible on its face”).

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The facts taken as true must, however, “state a claim that is plausible on its

face.” Amacker v. Renaissance Asset Mgmt. LLC, 657 F.3d 252, 254 (5th Cir.

2011). “A claim has facial plausibility when the [petitioner] pleads factual

content that allows the court to draw the reasonable inference that the

[employer] is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009). An IRA complaint is insufficient “if it offers only ‘labels and

conclusions,’ or ‘a formulaic recitation of the elements of a cause of action.’” Id.

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

IV. DISCUSSION

Aviles argues (a) that Congress’s recent amendment of the

Whistleblower Protection Act expanded the scope of protected disclosures to

include disclosures of purely private wrongdoing and (b) that even if only

disclosures of government misconduct are protected, he non-frivolously alleged

that IRS officials were complicit in Exxon’s alleged tax fraud. We address each

argument in turn.

A. Reports of Purely Private Wrongdoing as Protected Disclosures

Aviles’s argument raises an initial issue of statutory interpretation of 5

U.S.C. § 2302. As amended, 5 U.S.C. § 2302(b)(8) prohibits adverse personnel

actions based on:

(A) any disclosure of information by an employee or applicant

which the employee or applicant reasonably believes evidences—

(i) any violation of any law, rule, or regulation, or

(ii) gross mismanagement, a gross waste of funds, an abuse

of authority, or a substantial and specific danger to public

health or safety . . . .

Through the WPEA, Congress added subsection 2302(f)(2), which provides: “If

a disclosure is made during the normal course of duties of an employee, the

disclosure shall not be excluded from subsection (b)(8) . . . .” § 101, 126 Stat. at

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1465–66. The dissenting Vice Chairman reasoned from this addition that, “as

a matter of plain logic,” “when the federal employee’s normal course of duties

includes regulating, monitoring, or investigating private entities, a disclosure

about alleged wrongdoing by the private entity falls squarely within the

WPEA’s coverage.”

Aviles relies on Vice Chairman Wagner’s dissent from the Board’s

decision 5 and argues that Congress extended whistleblower protection through

the WPEA to include disclosures of “wrongdoing by private entities made by

federal employees.” Specifically, Aviles points to the Senate Committee Report

for the 2012 amendment, which states that subsection 2302(f)(2) “overturns . . .

court decisions that narrowed the scope of protected disclosures,” including

Willis v. Department of Agriculture, 141 F.3d 1139 (Fed Cir. 1998), a decision

the Board relied on. S. Rep. No. 112-155, at 5 (2012). Accordingly, Aviles argues

that his disclosure that Exxon “inflated its foreign income sales and

fraudulently added supplemental tax data in order to reduce its overall tax

liability by over $500 million” was protected, and that he was “subjected to

numerous [adverse] personnel actions, including . . . ultimately removal” as a

result of his protected disclosure.

The Treasury Department counters that the “plain language of section

2302(b)(8) . . . requires that a disclosure must evidence Government

misconduct to be eligible for whistleblower protection.” Treasury interprets the

legislative history of the 2012 amendments differently from Aviles and the

dissent. Although the WPEA did seek to overturn several Federal Circuit

decisions that had narrowed the scope of protected disclosures, Treasury

argues that Congress’s decision to overturn these decisions did not silently

extend whistleblower protection to claims involving purely private conduct.

5 See supra Part I(B)(2).

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Rather, Treasury concludes that the legislative history and statutory text

reflect “Congress’s intention to protect disclosures of Government misconduct.”

The MSPB largely echoes these points, but also adds that, “because § 2302(f)(2)

is silent on the issue of whether private misconduct . . . constitutes a basis for

a protected disclosure, this Court should defer to the Board’s reasonable

interpretation of the statute” under the Chevron doctrine.

We agree with Treasury and the MSPB that Congress did not intend to

protect disclosures of purely private wrongdoing when it enacted the WPEA.

Applying traditional principles of statutory interpretation—without deciding

what deference, if any, should be afforded the Board’s unpublished 6

interpretation of the amended statute—we reject Aviles’s interpretation of the

statute to include purely private wrongdoing. 7 The text indicates that the focus

of the statute is government wrongdoing. See § 2302(b)(8) (protecting

disclosures of, inter alia, “gross mismanagement, a gross waste of funds, [or]

an abuse of authority”). Nothing in the text of the WPEA purports to extend

subsection (b)(8) to extra categories of disclosures; the language simply

clarifies that otherwise-covered disclosures are not excluded merely because

they are made during an employee’s normal duties. See § 2302(f)(2) (“If a

disclosure is made during the normal course of duties of an employee, the

disclosure shall not be excluded from subsection (b)(8) . . . .” (emphasis added)).

Aviles’s proposed interpretation is also at odds with common sense and

principles of statutory interpretation. His interpretation could turn every

enforcement disagreement between a subordinate and a supervisor at the IRS,

6 MSPB adjudications resolved by a “nonprecedential Order” “are not binding on the

Board or its administrative judges in any future appeals except when it is determined they

have a preclusive effect on parties under the doctrines of res judicata (claim preclusion),

collateral estoppel (issue preclusion), judicial estoppel, or law of the case.” 5 C.F.R.

§ 1201.117(c)(2). In contrast, “[a]n Opinion and Order is a precedential decision of the Board

and may be appropriately cited or referred to by any party.” Id. § 1201.117(c)(1).

7 We assume, without deciding, that de novo review applies.

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FBI, Department of Justice, or other federal agency into a potential protected

disclosure and an eventual whistleblower claim down the road. After all, many

federal agency employees make enforcement decisions concerning private

persons “during the normal course of [their] duties,” id., on a day-to-day basis

in dialogue with their supervisors. If Congress intended such a significant

intrusion into the settled law governing federal employment relationships, we

believe it would have spoken more clearly. This comports with principles of

statutory interpretation. See Barbee v. United States, 392 F.2d 532, 535 n.4

(5th Cir. 1968) (“A change of phraseology in a revision will not be regarded as

altering the law where it had been settled by plain language in the statutes, or

by judicial construction thereof, unless it is clear that such was the intent.”

(quoting McDonald v. Hovey, 110 U.S. 619, 629 (1884))); cf. Antonin Scalia &

Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 318–19

(2012) (“The better view is that statutes will not be interpreted as changing

the common law unless they effect the change with clarity.”).

Because we conclude that the text of the amended statute after

application of ordinary principles of statutory interpretation supports the

Board’s interpretation, we need not and do not rely on the legislative history.

See Carrieri v. Jobs.com Inc., 393 F.3d 508, 518–19 (5th Cir. 2004) (citing

United States v. Kay, 359 F.3d 738, 743 (5th Cir. 2004)). 8

Aviles’s legislative-history argument is also unavailing because it is

contrary to the text of the amendment. Aviles points to a Senate committee

report and contends that the report is evidence that the WPEA overturns the

Federal Circuit’s decision in Willis, an opinion that the administrative judge

8 Although our interpretation follows from the text applying ordinary principles of

statutory interpretation, we express no view on whether the text is “unambiguous” and “thus

leaves no room for agency discretion” within the meaning of the Supreme Court’s decision in

National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S.

967, 982 (2005).

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expressly relied on. 9 Aviles proposes that, therefore, by overturning Willis,

Congress extended protection to disclosures of purely private wrongdoing. The

disclosure in Willis did concern private wrongdoing: the petitioner complained

about his supervisors’ decision “reversing [his] determination that the [private]

farms failed to comply with USDA conservation plans,” 141 F.3d at 1141, and

the court held that his disclosures to his immediate supervisors were not

protected, id. at 1143.

But the text of the WPEA does not mention disclosures of purely private

wrongdoing; if anything, the text added by the amendment reflects Congress’s

concern that language in the Willis decision could be interpreted as

categorically excluding otherwise-protected disclosures from protection if those

disclosures are made in the ordinary course of a federal employee’s job duties.

See § 2302(f)(2). In rejecting the petitioner’s proposed blanket rule in Willis

that the WPA entitled federal employees “to assert that the required

performance of their day-to-day responsibilities” per se “constitute[s] a

protected disclosure,” the Federal Circuit suggested that disclosures in the

normal course of duties are not protected, see id. at 1144. The text added by

the WPEA provides that “a disclosure . . . made during the normal course of

duties of an employee . . . shall not be excluded from [protection under]

subsection (b)(8)” solely for that reason, § 2302(f)(2) (emphasis added), and says

nothing about private malfeasance. Thus, Aviles’s argument is unavailing

because it does not find support in the text of the amendment.

Therefore, we agree with the Board’s conclusion that allegations of

purely private wrongdoing are not protected disclosures under 5 U.S.C.

§ 2302(b)(8).

See S. Rep. No. 112-155, at 5 & n.13 (“Section 101 of S. 743 overturns . . . Willis v.

9

Department of Agriculture, [in which] the court stated that a disclosure made as part of an

employee’s normal job duties is not protected.”).

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B. Aviles’s Allegations that He Engaged in a Protected Disclosure

The remaining issue in this appeal is whether Aviles “nonfrivolously”

alleged a protected disclosure within the meaning of § 2302(b)(8). As discussed

above, allegations of purely private wrongdoing are not protected under the

WPA as amended by the WPEA. But if the disclosure includes allegations of

government complicity in the private wrongdoing, then the disclosure may be

protected. Thus, the question is whether Aviles nonfrivolously alleged that IRS

officials were complicit in Exxon’s alleged tax fraud.

The Ninth Circuit’s decision in Coons v. Secretary of the U.S. Department

of the Treasury is instructive. 383 F.3d 879 (9th Cir. 2004). There, Coons

argued he was demoted in retaliation for making protected disclosures—

namely, that undisclosed IRS agents illegally shared confidential information

with a taxpayer’s lawyer and that IRS agents knowingly manually processed

a large fraudulent refund for that taxpayer. Id. at 888–90. The Ninth Circuit

reversed the Board’s decision dismissing Coons’s whistleblower claim. Id. at

891. It held that Coons’s claim that IRS officials, “whose mission is to collect

taxes, improperly processed a large, fraudulent refund for a wealthy taxpayer

is an allegation of ‘gross mismanagement, a gross waste of funds, [or] an abuse

of authority.’” Id. (alteration in original) (quoting § 2302(b)(8)).

Aviles argues that he nonfrivolously alleged that his supervisors

“allowed or facilitated wrongful conduct by a private organization,” Exxon. In

response to the Board’s conclusion that his allegations were too “vague and

conclusory” and lacking in the requisite specificity to be deemed “nonfrivolous,”

Aviles argues that he alleged that his supervisors “ignored his disclosures of

Exxon’s alleged tax fraud” and “directed him not to divulge Exxon’s actions.”

Aviles also points to his allegation that “the [IRS management] team covered

up the fraud.” Aviles’s argument relies heavily on the Ninth Circuit’s decision

in Coons. In reply, Aviles also points to a precedential decision from the MSPB,

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Rumsey v. Department of Justice, 120 M.S.P.R. 259 (2013), and argues that the

allegations in Rumsey “are almost identical to” his, in that “the appellant in

Rumsey . . . [alleged] fraudulent submittals by the state of Wisconsin, [and]

that ‘[Justice Department] officials were covering it up.’”

The MSPB and Treasury counter that the Board correctly concluded that

Aviles’s “generalized assertions” of government involvement in Exxon’s fraud

“do not constitute a non-frivolous allegation of a protected disclosure.” They

point out that the petitioner’s allegations in Coons “were detailed and specific,

including: that a former Regional Counsel for the IRS was using his influence

to corrupt the IRS’s collection of taxes from a taxpayer,” and that Aviles’s

“vague allegations of a ‘cover up’” without more “do not rise to this level.”

Treasury adds that, “even after the administrative judge gave Mr. Aviles

multiple opportunities to explain his disclosure [that the IRS management

team helped to cover up Exxon’s alleged tax fraud] in further detail, Mr. Aviles

failed to do so.”

We agree with the Board’s decision dismissing Aviles’s appeal and deny

Aviles’s petition for review. Unlike Aviles’s vague and conclusory allegations

of a “cover up,” the allegations in the Coons case specifically implicated

particular government officials. The Ninth Circuit noted that the petitioner’s

disclosures included his “concern that [a taxpayer’s] attorney was using his

influence [as a former Regional Counsel for the IRS] to corrupt the IRS’s

collection of taxes” from that taxpayer, and that “current IRS staff were

sharing information illegally” with that taxpayer’s attorney. 383 F.3d at 889.

The petitioner in Coons also disclosed that IRS officials “improperly processed

a large, fraudulent refund for a wealthy taxpayer.” Id. at 890. In contrast, here,

Aviles made no specific allegations of wrongdoing by government officials.

Even on appeal, Aviles does not explain in his brief to this Court the necessary

“who, what, when, where, and how” of government involvement in the alleged

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No. 14-60645

cover-up of Exxon’s tax fraud. See United States ex rel. Willard v. Humana

Health Plan of Tex. Inc., 336 F.3d 375, 387–88 (5th Cir. 2003) (affirming denial

of leave to amend a complaint in part because “there is no indication in

Willard’s briefs to this court that he will be able to allege the necessary ‘who,

what, when, where, and how’ of the alleged fraud”). We also note that the ALJ

gave Aviles multiple opportunities to amend his IRA complaint and provide

additional factual content before finally dismissing his administrative appeal.

See Foman v. Davis, 371 U.S. 178, 182 (1962) (noting that “repeated failure to

cure deficiencies [in a complaint] by amendments previously allowed” may be

grounds for dismissal).

Aviles’s reliance on the Board’s precedential decision in Rumsey is

misplaced, and the distinctions between this case and Rumsey illustrate why

Aviles’s appeal was properly dismissed by the Board. Aviles takes one

statement from the Rumsey opinion—the petitioner’s allegation that “the state

of Wisconsin submitted fraudulent data . . . and agency managers were covering

it up,” 120 M.S.P.R. at 270 (emphasis added)—out of context. This allegation

alone would be insufficient to establish the Board’s jurisdiction; in Rumsey,

there was significant additional evidence of federal government wrongdoing

from congressional oversight hearings and news coverage, including that the

agency administrator had “awarded grants” for juvenile justice and

delinquency prevention to “lower-scoring organizations” despite the

administrator’s staff’s recommendations to the contrary. Id. at 264. Indeed, the

ALJ in that case denied the petition on the merits, finding that the petitioner’s

“disclosures to ABC News and Congress were not protected because . . . [that]

information . . . was already publicly known” and because those disclosures

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“occurred in the normal course of the performance of her duties” 10—not because

there were no allegations or evidence of government wrongdoing. Id. at 265,

270.

Therefore, we agree with the Board’s decision that Aviles failed to

nonfrivolously allege that his disclosures were protected, and Aviles’s petition

for review is denied.

C. Aviles’s Remaining Argument

Aviles also argues he is entitled to relief under a separate provision of

the WPA, 5 U.S.C. § 2302(b)(9), and he asks for remand to the MSPB for it to

consider this claim. Subsection 2302(b)(9) prohibits an adverse personnel

action “because of,” inter alia, “the exercise of any appeal, complaint, or

grievance right granted by any law, rule or regulation,” including for a

whistleblower action for violation of the WPA. As Treasury and the MSPB

point out, Aviles failed to exhaust this claim by first presenting it to the OSC

before filing his IRA with the MSPB. See 5 U.S.C. § 1214(a)(3). 11 Therefore,

this claim is unexhausted, and we cannot consider it.

V. CONCLUSION

For the foregoing reasons, Aviles’s petition for review is DENIED.

10 Ultimately, the Board reversed the ALJ’s initial decision in Rumsey in light of the

2012 WPEA amendments, specifically § 2302(f), concluding that the ALJ’s finding was “no

longer correct” under the amendments based on the new “during the normal course of duties”

language in § 2302(f). 120 M.S.P.R. at 270.

11 We note that the OSC right-to-appeal letter is consistent with Aviles’s actual

administrative complaint to the OSC in which he was asked to “describe [his] complaint in

detail.”

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