Kerrigan v. Merit System Protection Board

United States Court of Appeals

for the Federal Circuit

______________________

PHILIP J. KERRIGAN,

Petitioner

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent

______________________

2015-3200

______________________

Petition for review of the Merit Systems Protection

Board in No. SF-1221-14-0742-W-1.

______________________

Decided: August 17, 2016

______________________

PAUL DAVID MARGOLIS, Jenner & Block LLP, Chicago,

IL, argued for petitioner. Also represented by LISA MARIE

SCHOEDEL, JONATHON STUDER.

KATHERINE MICHELLE SMITH, Office of the General

Counsel, Merit Systems Protection Board, Washington,

DC, argued for respondent. Also represented by BRYAN G.

POLISUK.

______________________

Before PROST, Chief Judge, BRYSON and STOLL, Circuit

Judges.

2 KERRIGAN v. MSPB

PROST, Chief Judge.

Philip Kerrigan appeals the final decision of the Merit

Systems Protection Board (“Board” or “MSPB”) dismiss-

ing, for lack of jurisdiction, his claim that his workers’

compensation benefits were improperly terminated in

retaliation for protected whistleblowing activity. See

Kerrigan v. Dep’t of Labor, No. SF-1221-14-0742-W-1,

2015 WL 3622799 (M.S.P.B. June 11, 2015). While we

disagree with the Board that 5 U.S.C. § 8128(b) bars its

review of Mr. Kerrigan’s appeal, we conclude that Mr.

Kerrigan failed to make a nonfrivolous allegation that his

protected disclosure was a contributing factor in the

agency’s action, and therefore affirm.

I

From August 1985 until May 1986, Mr. Kerrigan held

a temporary appointment as a carpentry worker with the

Department of the Navy’s Public Works Center in San

Diego, California. During his appointment, he injured his

back while at work and applied for, and was granted,

workers’ compensation benefits by the Department of

Labor’s (“DOL’s”) Office of Workers Compensation

(“OWCP”). Mr. Kerrigan received these benefits without

incident for many years.

Beginning in 1993, Mr. Kerrigan began raising con-

cerns regarding the administration of his benefits. Over

the next several years, Mr. Kerrigan’s claims included a

request to be treated by his choice of physician, Dr. Web-

ber; requests for a determination of his wage-earning

capacity, a lump sum settlement, and a schedule award;

and a claim for an emotional condition.

In the ensuing years, the OWCP took a number of ac-

tions in adjudicating Mr. Kerrigan’s claims. In 1994, the

OWCP indicated it would refer Mr. Kerrigan for vocation-

al training (though it is unclear whether he was actually

referred at that time). In 1996, the OWCP denied Mr.

KERRIGAN v. MSPB 3

Kerrigan’s request to see Dr. Webber, which was affirmed

by its reviewing board within DOL, the Employees Com-

pensation Appeals Board (“ECAB”), in 1998. Following

that decision, the OWCP referred Mr. Kerrigan for an

evaluation with an orthopedic surgeon. In 2001, that

surgeon returned two reports and the opinion that Mr.

Kerrigan could return to full-time work, with restrictions.

Also in 2001—and particularly relevant here, on Decem-

ber 18, 2001—the OWCP referred Mr. Kerrigan for voca-

tional rehabilitation. Mr. Kerrigan refused to attend the

training and, on March 19, 2002, the OWCP notified Mr.

Kerrigan that his benefits were being reduced to zero

based on his refusal to participate in the training. That

decision was affirmed by ECAB in 2003.

Of these actions, Mr. Kerrigan took particular issue

with the denial of his request to see Dr. Webber. On

November 21, 2001, Mr. Kerrigan sent a letter to the

DOL’s Office of Inspector General alleging that the denial

was based on illegal actions by DOL employees—namely,

that the OWCP and ECAB persons who had denied his

request had done so based on a physician election form

that they either falsified, destroyed, or both. The Office of

Inspector General (“OIG”) elected not to investigate,

though it did forward the letter on to the OWCP. A date-

stamp indicates that OWCP received the forwarded letter

on December 18, 2001, the same day OWCP referred him

to vocational training.

Following OIG’s decision not to investigate, Mr. Ker-

rigan pursued, over the next several years, two actions in

district court. One was brought against the DOL for

illegal termination of benefits; the other was brought

against the physician who reviewed his medical records

during the administrative proceedings. Both were ulti-

mately dismissed.

In 2013, Mr. Kerrigan filed a complaint with the U.S.

Office of Special Counsel. That office chose not to investi-

4 KERRIGAN v. MSPB

gate his claims but, construing his complaint as an allega-

tion of reprisal for whistleblowing activity, referred him to

the MSPB.

In 2014, Mr. Kerrigan initiated this individual right of

action appeal before the MSPB. His initial submissions

alleged retaliatory termination of benefits following his

November 21, 2001 letter to DOL alleging document

forgery and destruction in denying his request to see Dr.

Webber. The agency filed a motion to dismiss for lack of

jurisdiction, arguing, inter alia, that Mr. Kerrigan’s

conclusory allegations failed to comprise a nonfrivolous

claim under the Whistleblower Protection Act. The

administrative judge ordered Mr. Kerrigan to make the

requisite jurisdictional showing, explaining that he must

make “a detailed factual allegation that . . . agency offi-

cials responsible for the personnel action were aware of

[his] disclosure . . . and acted within such time that a

reasonable person could find that the disclosure . . .

contributed to the action.” Kerrigan v. Dep’t of Labor, SF-

1221-14-0742-W-1, at *4 (M.S.P.B. Oct. 24, 2014). Mr.

Kerrigan responded with a number of documents and a

sworn declaration in which he repeated his allegations of

retaliatory action by the DOL. J.A. 190-94.

The administrative judge then dismissed Mr. Kerri-

gan’s appeal for lack of jurisdiction. The administrative

judge held that the Whistleblower Protection Act only

covers actions taken by an agency concerning its own

employees and, because Mr. Kerrigan was never an

employee with the DOL, jurisdiction was lacking. J.A.

238-39. Mr. Kerrigan petitioned for review, and the

Board agreed that jurisdiction was lacking, but for differ-

ent reasons. The Board held that it had no jurisdiction

because Mr. Kerrigan’s challenge was a challenge to the

termination of his benefits, and 5 U.S.C. § 8128(b) pro-

vides that benefits determinations are within the exclu-

sive jurisdiction of the DOL and are unreviewable.

Kerrigan, 2015 WL 3622799, at *547-49. The Board also

KERRIGAN v. MSPB 5

noted that, even if jurisdiction were not barred under

§ 8128(b), Mr. Kerrigan had failed to nonfrivolously allege

that his protected disclosures were a contributing factor

in the agency’s decision to terminate his benefits. Id. at

*549 n.2.

Mr. Kerrigan appealed to us. We have jurisdiction

pursuant to 28 U.S.C. § 1295(a)(9) and 5 U.S.C.

§ 7703(b)(1)(B). Whether the Board has jurisdiction over

a particular matter is a question of law that this court

reviews de novo. Herman v. Dep’t of Justice, 193 F.3d

1375, 1378 (Fed. Cir. 1999).

II

We begin with the primary rationale of the Board’s

decision—that 5 U.S.C. § 8128(b) precludes the Board

from exercising jurisdiction over Mr. Kerrigan’s appeal.

On this point, we hold that the Board erred.

Under the Federal Employees’ Compensation Act

(“FECA”), decisions from the DOL on whether to allow or

deny benefits are protected from further review by 5

U.S.C. § 8128(b). Specifically, § 8128(b) of FECA provides

that:

The action of the Secretary or his designee in al-

lowing or denying a payment under this subchap-

ter is—

(1) final and conclusive for all purposes and with

respect to all questions of law and fact; and

(2) not subject to review by another official of the

United States or by a court by mandamus or oth-

erwise.

We have previously commented on the “strong door-

closing language” of this provision. Pueschel v. United

States, 297 F.3d 1371, 1374 (Fed. Cir. 2002). But by its

plain terms, § 8128(b) applies only to actions by the

Secretary or his designee “in allowing or denying a pay-

6 KERRIGAN v. MSPB

ment.” It does not close the door on review of all decisions

that may overlap or touch on a DOL benefits determina-

tion. For example, in Minor v. Merit Systems Protection

Board, 819 F.2d 280, 281-82 (Fed. Cir. 1987), a petitioner

who had been receiving workers’ compensation benefits

was both removed by her employing agency and denied

further benefits by OWCP after it came to light that her

injury claim had been false. In her appeal to us seeking

restoration, we explained that § 8128(b)’s bar “obviously

relates only to the Labor Department’s decisions on the

making or denying of compensation awards” and does not

bar the Board from otherwise “acting within its own

separate statutory sphere” of authority. Id. Thus, “even

though much of the same facts and evidence” went into

both the benefits determination and the removal determi-

nation, the two were separate legal questions, the latter of

which was within the Board’s jurisdiction. Id. 1

The same principle is true here. Mr. Kerrigan’s com-

plaint in this case is that the DOL’s actions—referring

him to vocational training and then terminating his

benefits for failure to attend—were done in retaliation for

his letter alleging forgery and destruction of evidence in

the earlier denial of his request to see Dr. Webber. The

question of whether the DOL retaliated against Mr.

Kerrigan in reprisal for whistleblowing activity is a

different one than whether the DOL correctly terminated

his benefits for failure to attend vocational training.

Section 8128(b) only precludes the Board’s review of the

1 We cited with approval the Board’s decision in

Miller v. U.S. Postal Service, 26 M.S.P.R. 210, 213 (1995),

which likewise held that “[w]hile the issue of [an employ-

ee’s] entitlement to FECA benefits is within the exclusive

jurisdiction of the OWCP, the issue of the [employee’s]

fraudulent conduct in those proceedings is not.”

KERRIGAN v. MSPB 7

latter. While it is true that this case differs from Minor in

that the appellant here seeks review of a decision by DOL

rather than his employing agency, that distinction does

not warrant a different result. In both cases, the Board’s

jurisdiction stems from challenges that are separate and

distinct from a simple appeal of benefits denial, and thus

are not barred by § 8128(b).

III

Section 8128(b) was not the only ground upon which

the Board dismissed Mr. Kerrigan’s action, however. In a

footnote of its decision, the Board also provided an alter-

native rationale for dismissal: it held that Mr. Kerrigan

failed to nonfrivolously allege that his protected disclo-

sure was a contributing factor in the agency’s action.

Specifically, the Board concluded that Mr. Kerrigan

“failed to allege that the official who made the decision to

terminate his OWCP compensation benefits had any

knowledge of his protected disclosures or was influenced

by someone who did.” Kerrigan, 2015 WL 3622799, at

*549 n.2. On this point, we agree with the Board.

To establish Board jurisdiction over individual right of

action cases, the appellant must make “non-frivolous

allegations” that he engaged in whistleblowing activity by

making a protected disclosure, and that the protected

disclosure “was a contributing factor in the agency’s

decision to take or fail to take a personnel action.” Cahill

v. Merit Sys. Prot. Bd., 821 F.3d 1370, 1373 (Fed. Cir.

2016). The statute, 5 U.S.C. § 1221(e)(1), expressly ad-

dresses how the “contributing factor” element of the

whistleblower claim can be established. It provides that:

The employee may demonstrate that the disclo-

sure or protected activity was a contributing fac-

tor in the personnel action through circumstantial

evidence that—

8 KERRIGAN v. MSPB

(A) the official taking the personnel action knew of

the disclosure or protected activity; and

(B) the personnel action occurred within a period

of time such that a reasonable person could con-

clude that the disclosure or protected activity was

a contributing factor in the personnel action.

5 U.S.C. § 1221(e)(1).

Here, Mr. Kerrigan has certainly shown a closeness in

timing between the alleged protected disclosure and the

personnel action, as described in subsection (B). His

letter alleging illegal actions by the OWCP and ECAB

was sent to the DOL’s Office of Inspector General on

November 21, 2001, and forwarded on to the OWCP on

December 18, 2001. On that same day, December 18,

2001, the OWCP referred him to vocational training. A

few months later, on March 19, 2002, the OWCP reduced

his benefits to zero for failure to attend the training. We

agree with Mr. Kerrigan that, from a timing perspective,

the adverse personnel actions came right on the heels of

his accusatory letter.

But closeness in timing, in and of itself, is not suffi-

cient as a nonfrivolous allegation that the protected

disclosure was a contributing factor to the adverse per-

sonnel action. In addition to closeness in timing, the

statute also describes a knowledge component: “that the

official taking the personnel action knew of the disclosure

or protected activity.” 5 U.S.C. § 1221(e)(1) (emphasis

added). This knowledge factor can be determinative on

the question of the Board’s jurisdiction. See Cahill, 821

F.3d at 1376 (reversing the Board’s finding that the

contributory factor had not been sufficiently alleged when

“the only disputed issue [was] whether any of the agency

officials taking the challenged personnel actions knew of

the March 2012 disclosure”) (emphasis added). It is here,

at the knowledge component, where Mr. Kerrigan has

failed to make a nonfrivolous allegation.

KERRIGAN v. MSPB 9

Nowhere in Mr. Kerrigan’s papers does he allege that

his November 21, 2001 letter was known to the OWCP

persons who referred him to vocational training and

terminated his benefits for failure to attend. Rather, the

most Mr. Kerrigan has shown is that someone within

OWCP was aware of his letter on the same day he was

referred to vocational training. But the generalized

assertion that someone within the agency—without any

accompanying allegations as to the size, composition, or

structure of that agency—is insufficient to establish that

the specific agency official taking the personnel action

knew of the disclosure or protected activity. Cf. Cahill,

821 F.3d at 1374-75 (finding jurisdiction when appellant

alleged both knowledge and action by agency personnel

whom he identified by positions, when the record reflected

those positions were occupied by only one person).

That is not to say that, at the jurisdictional stage, an

appellant must prove knowledge by the acting official. We

have previously explained that “[a]t the jurisdictional

threshold, . . . the employee’s burden is significantly

lower” than at the merits stage. Johnston v. Merit Sys.

Prot. Bd., 518 F.3d 905, 909 (Fed. Cir. 2008). To pass the

jurisdictional hurdle, we require only that an appellant at

least have made non-frivolous allegations that the offi-

cials who took the personnel action had knowledge of the

protected disclosure. See id. at 912 n.3 (finding jurisdic-

tion based on appellant’s affidavit stating that the acting

official knew of her protected disclosure). Here, Mr.

Kerrigan has made no allegations that the specific OWCP

persons who referred him to training and terminated his

benefits knew of his November 21, 2001 letter. And we do

not accept his invitation to infer their knowledge based

10 KERRIGAN v. MSPB

only on a closeness in timing and his conclusory allegation

that their actions were done “in retaliation.” 2

The record of this case makes us particularly disin-

clined to infer knowledge from closeness in timing. Here,

the OWCP’s referral to vocational training was not a

sudden occurrence untethered in time to anything but Mr.

Kerrigan’s letter. To the contrary, the OWCP’s referral

was just the latest in a long list of many actions that it

had been taking in efforts to adjudicate Mr. Kerrigan’s

benefits claims. Most notably, the referral for training

came just a few months after an orthopedic surgeon

recommended that Mr. Kerrigan could return to full-time

work. It is therefore not, as Mr. Kerrigan contends, as if

the only basis for the agency’s referral must have been

knowledge of his letter. In these circumstances, where

2 At oral argument, Mr. Kerrigan focused for the

first time on the sworn declaration that he submitted in

response to the administrative judge’s order to make the

requisite jurisdictional showing. See J.A. 190-94. We find

this declaration both late to the table and insufficient to

satisfy the knowledge component. Although the declara-

tion includes a long list of names of OWCP personnel who,

he says, “have been notified in person or by mail regard-

ing fraud or will be shown to have perpetrated fraud

against appellant with reckless and willful disregard for

any harm that has resulted from their individual and/or

collective illegal conduct,” J.A. 191, the statement is

written in the disjunctive, asserting that the identified

people either knew of the disclosures or perpetrated fraud

against him—but not both. Further, like most of Mr.

Kerrigan’s filings in the record below, the declaration

seems focused more on his complaint about the allegedly

forged or destroyed physician election form used to deny

his request to see Dr. Webber, not the termination of

benefits that is the focus of this appeal.

KERRIGAN v. MSPB 11

there are other plausible, indeed likely, reasons for the

agency’s action, we will not infer knowledge from close-

ness in timing.

For these reasons, we conclude that Mr. Kerrigan

failed to make a nonfrivolous allegation that the OWCP

persons who referred him to vocational training and

terminated his benefits knew of his November 21, 2001

letter. We therefore affirm the Board’s dismissal for lack

of jurisdiction.

AFFIRMED