# Petition for Writ of Certiorari — Favreau v. United States, 124 S. Ct. 50 (2003) (No. 02-1466) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1398%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2003 ## Text Supreme Court, U.S. FILED Q.2146 6 MAR 2 8 2003 No. IN THE Supreme Court of the United States BERTRAND R. FAVREAU, II, ET AL., Petitioners, Vv. UNITED STATES, Respondent. ; On Petition for a Writ of Certiorari to the United States Court of Appeals for the Federal Circuit PETITION FOR A WRIT OF CERTIORARI MICHAEL A. FELDMAN SCOTT L. NELSON 14 Lincoln Street Counsel of Record Brunswick, ME 04011 BRIAN WOLFMAN (207) 729-2660 PUBLIC CITIZEN LITIGATION GROUP 1600 20th Street, N.W. Washington, D.C. 20009 (202) 588-7724 Attorneys for Petitioners March 28, 2003 QUESTIONS PRESENTED Petitioners are a class of veterans who were involuntarily separated from the armed services because they were not successful, despite good-faith efforts, in meeting applicable weight and fitness standards. The United States Court of Ap- peals for the Federal Circuit held that petitioners must refund portions of their enlistment or reenlistment bonuses to the United States under statutes providing for recoupment of bo- nuses from service members who “voluntarily ... d{o] not complete the term of enlistment for which a bonus was paid” (emphasis added). The questions presented are: 1. Is a service member who is involuntarily discharged for not meeting weight and fitness standards obligated to re- fund an enlistment or reenlistment bonus on the ground that he or she has “voluntarily” failed to “complete the term of enlistment for which a bonus was paid” within the meaning of the governing statutes? 2. May a court disregard an agency’s published regula- tions by (a) treating unpublished, internal agency memoranda as legally binding “regulations” whose terms prevail over the published regulations, and (b) granting Chevron/Mead defer- ence to an agency’s statutory construction set forth in litiga- tion affidavits that contradict the published regulations? ll RULE 14.1(b) STATEMENT The petitioners in this Court (and plaintiffs-appellants in the court of appeals) are: Bertrand R. Favreau, II; Jeffrey D. Thompson; Donna Marie McCurdy; Ryan D. Mumme; Bridgit Hallas; Scott Laberge; Thomas L. Fryer; Lee C. Mar- shall; Joseph Tingerthal; James W. Fuller; Roger F. Sablone, Jr.; Robert A. Bell; Brenda G. Vanness-Cnista; Patrick N. Turner; Charles D. Wiggins; and a class of others similarly situated. The respondent in this Court (and defendant-appellee in the court of appeals) is the United States of America. ill TABLE OF CONTENTS PRSUEUN EMRE MG © PUREINEEEY BPSD Doss ccnsesssssenevnssvesinosoessocevessnnsseesesneces i ERPs BO BEM D EE FAB EMEIITE sesseccvesscessvvssssnsnsssvssenssssesconseovens ll PE Ae RE BRE BI csnscnsccevercsvsenesavescusaveenssvenscunsesses iv as cada saninnuncrasaneesnesueseonin l a caiclaanieninanva l STATUTES AND REGULATIONS INVOLVED ................ 2 PUR EER GON BUEN Piel vecevessvssissovncesssscosesvesensnssbanenevee 3 A. Statutory and Regulatory Background.....................06+ 3 ich ciiudacnebintiniii 5 a oy IE CII, 665, ansevicsn snberassavenvenivosdsicesinsoenansane 9 REASONS FOR GRANTING THE WRIT............:::ceesee 11 I. THE OPINION BELOW CONFLICTS WITH DECISIONS OF OTHER FEDERAL COURTS THAT GIVE EFFECT TO THE PLAIN MEANING OF THE STATUTORY TERMB................ 12 Il. THE FEDERAL CIRCUIT’S DECISION TO GIVE UNPUBLISHED MEMORANDA AND LITIGATION AFFIDAVITS PRECEDENCE OVER DULY PROMULGATED AND PUB- LISHED REGULATIONS MERITS REVIEW. ............ 15 a sananenanseniia’ 20 APPENDIX: A. Opinion of the Court of Appeals..............c:cccceseeseeees la B. Opinion of the Court of Federal Claims (Ad- dendum to Opinion of the Court of Appeals) ........... 4a C. Defense Financial Management REE EE ed Oe eT 29a 1V TABLE OF AUTHORITIES Page(s) CASES AFGE v. Rumsfeld, 262 F.3d 649 (7th Cir. 2001)...........+00+ 19 Barnhart v. Walton, 535 U.S. 212 (2002)............cccccceessneeeees 18 Blassingame v. Secretary of the Navy, 866 F.2d fe ne aT NTI 16 Boddie v. Department of Navy, 827 F.2d 1578 CI SE Fed rvickrnisstacncsineieatbsneribtebinibedetainenbininnsanmnbens 16 Brown v. Gardner, 513 U.S. 115 (1994)... ecessssreeeeeees 12 Chao v. Russell P. LeFrois Builder, Inc., 291 Fe ee Ge ee: ieee ceieilatamireidaeisicoinisias 19 Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 CE nsccssnsnscasuascatsnaniaamamecateuiccipniaaelatnaia tas 10-11, 18, 19 Edelman v. Lynchburg College, 535 U.S. 106 SPIE cisicsnsisnctietniaiccioniatetetaddasn Teale ahiplarenckenaeabiaited cniataeareees 19-20 Favreau v. United States, 48 Fed. Cl. 774 RR MU NF ANT ren NTS OE ENC a OEE 7 Hamlet v. United States, 63 F.3d 1097 (1995)...........ccceeeeeees 17 Hensala v. Department of the Air Force, 148 F. UI. Zk DUS CIR BA. UE. FEI ED cicsccessnvevnecascsssercsnvnnees 14, 15 lliff v. Schlesinger, 539 F.2d 1275 (10th Cir. DFID sssinssiepiiahsspinicinediadiaaanninaacienaineien 9, 12-13 Land v. United States, 41 Fed. Cl. 695 (1998)..........cceeesseeeee 4 Landmark Legal Found. v. IRS, 267 F.3d 1132 i Rails ED sichctssiceseiessniitdsancianiieitneecbenlbinienaxtennaniains 19 Lee v. FlightSafety Services Corp., 20 F.3d 428 OE FEE Fe recs inictmnstnnaicendcakniiieniennnmamuene 18 Lopez v. FAA, 318 F.3d 242 (D.C. Cir. 2003) ..........ceeeceeees 16 A Vv Matz v. Household Intern. Tax Reduction Inv. FU, GD FO S78 CF Ge, DOT) vicseniccusctensverecieessnrcaniets 19 Morton v. Ruiz, 415 U.S. 199 (1974)... eeeseseeseseseneseesees 17 National Ass'n of Concerned Veterans v. Sec- retary of Defense, 487 F. Supp. 192 (D.D.C. RIT Wp ssnssccnitnainakonsnenthieiiaanedadeaanaiaaaaa 17 Service v. Duties, 354 U.S. B63 (1DST) s.ccccosesecsrvivrersossavsaveree 16 United States ex rel. Accardi v. Shaughnessy, S5T 5 ae Ge Fe nniminnmanen 16 United States v. Gears, 835 F. Supp. 1093 (N.D. ID. BFW) ssnkinasiensonadnicvsnsicyueniauceipienciaansla ian hianeniaaail 13 United States v. Mead Corp., 533 U.S. 218 PF Nd wiitsisschicanninaaaaneitcileuaualaidlae 11, 18, 19, 20 STATUTES AND REGULATIONS SSE... BF io viniinivcncinessoendcteidlndinamammianaaimiabidannaadls 17 FER iliee ib BAP sicsccsencsoninneenicinesonanabbiedainanaaimedaae 17 Be i tare: © GID iviseh er ssacienestnaviaitenioidepmabenenial 3, 4, 13, 14 Be OBA © 1) icicncrvicinantininaeanaananan 1 OF Witen & ENTE ED \cwnsoinnvicedaenadanianaiae 2, 3,4 FF Uiai lie: DD cscieincsninanihisistninateineiaddaiimae 2,3 BF Shan 2 nin iiiciniiiietaantpuaiateanalime aoe aee 3 OT VBA Br Mind Kniinaiaibiaes 3 Department of Defense Financial Management I TIE i passrsncscbunictcivessnandsetrienentcanen passim Pe SE TR Fe cis ccieiaiedmelanieniadndndenaeiapeien 18 LEGISLATIVE HISTORY S. Rep. No. 96-850 (1980), reprinted in 1980 SFA Acts Ol viilenibienenincielinnetnchalicnplnetoctutunaniaianinn 4 PETITION FOR A WRIT OF CERTIORARI Petitioners, representatives of a class of veterans who were involuntarily separated from the armed services because they did not succeed in meeting weight or fitness standards, respectfully petition for a writ of certiorari to review the judgment of the United States Court of Appeals for the Fed- _eral Circuit. The decision below holds that petitioners must reimburse the United States for portions of their enlistment or reenlistment bonuses on the ground that they “voluntarily” did “not complete the terms of [their] enlistment” within the meaning of applicable statutes. This Court should grant cer- tiorari to review the Federal Circuit’s judgment because: (1) It conflicts with decisions of other federal courts construing the plain statutory language, which pre- cludes recoupment unless a service member was sepa- rated voluntarily or on account of misconduct; and (2) (a) It violates fundamental norms of administrative - law by giving secret, unpublished agency memoranda precedence over an agency’s published regulations im- plementing the statutory terms; and (b) it further departs from accepted administrative law principles set: forth in this Court’s decisions by giving dispositive weight to litigation affidavits contradicting the agency’s pub- lished regulations. OPINIONS BELOW The decision of the court of appeals is published at 317 F.3d 1346 (Fed. Cir. 2002), and is reprinted in the Appendix at la. The decision of the Court of Federal Claims is pub- lished at 49 Fed. Cl. 635 (2001), and as an addendum to the court of appeals’ opinion, 317 F.3d at 1349-62; it is reprinted in the Appendix at 4a. JURISDICTION The court of appeals entered judgment on December 30, - 2002. This Court has jurisdiction under 28 U.S.C. § 1254(1). STATUTES AND REGULATIONS INVOLVED 37 U.S.C. § 308(d)(1), governing reenlistment bonuses, provides: A member who voluntarily, or because of his miscon- duct, does not complete the term of enlistment for which a bonus was paid to him under this section ... shall refund the percentage of the bonus that the unex- pired part of his additional obligated service is of the total reenlistment or extension period for which the bo- nus was paid. 37 U.S.C. § 308a(b), governing enlistment bonuses, pro- vided at relevant times: Under regulations prescribed by the Secretary of De- fense ... a person who voluntarily, or because of his misconduct, does not complete the term of enlistment for which a bonus was paid to him under this section ... shall refund that percentage of the bonus that the unex- pired part of his enlistment is of the total enlistment pe- riod for which the bonus was paid. Defense Department Financial Management Regula- tion 090503, which is set forth more fully in the Appendix at 29a, provides in pertinent part (emphasis added): Reasons for Recoupment. For purpose of recouping any unearned portions of enlistment, reenlistment, or reten- tion bonuses, the term “who voluntarily or because of misconduct” includes (but is not limited to) members separated ... (M) ... for the convenience of the govern- ment upon the application and interest of the member because of special or unusual circumstances including, but not limited to ... (6) Overweight/obesity or lack of physical fitness. STATEMENT OF THE CASE A. Statutory and Regulatory Background To encourage talented men and women to join and re- main in what are now the all-volunteer armed services of the United States, the services have long offered substantial bo- nus payments for enlistment and reenlistment. To remove any possible temptation to “take the money and run,” stat- utes authorizing such bonuses and other similar incentives (such as advanced education assistance) provide that a person who “voluntarily, or because of his misconduct, does not complete the term of enlistment” for which he or she re- ceived the bonus or other incentive must refund a proportion- ate amount to the government. 37 U.S.C. § 308(d)(1) (reenlistment bonuses); former 37 U.S.C. § 308a(b) (enlist- ment bonuses)'; see also, e.g., 10 U.S.C. § 2005(a)(3) (ad- vanced education assistance). The statutes not only protect the government, but also assure service members who accept bonus contracts for enlisting or reenlisting that they will be entitled to keep the offered inducement as long as they do not quit or misbehave. Because of the physical demands that the Nation’s de- fense often places on members of the armed forces, the serv- ices also require that soldiers, sailors, airmen, and Marines meet physical standards, including fitness and weight re- quirements. Members who are unsuccessful in meeting fit- hess or weight requirements after undergoing remedial fit- ness or weight reduction programs may, in the discretion of the services, be involuntarily separated from the armed serv- ' Section 308a was repealed in 2000 and replaced by a new provi- sion, 37 U.S.C. § 309, which contains identical language requiring re- funds by members who “voluntarily, or because of [their] misconduct, d{o] not complete the term of enlistment.” The 2000 legislation provided that the terms of § 308a would continue to govern the terms of any bonus provided thereunder for enlistments before October 1, 2000. See 37 U.S.C. § 309 note (“Effective and Applicability Provisions”). 4 ices. See, e.g., Land v. United States, 41 Fed. Cl. 695 (1998). The interaction between the services’ policy of discharging some members who fail to meet weight and fitness standards and the statutes providing for recoupment of enlistment bo- nuses is at the heart of this case. Whether a service member who has been involuntarily separated for weight or fitness reasons has “voluntarily” failed to “complete the term of enlistment” for which he or she received a bonus is the ulti- mate question posed by this case. Since the 1950s Congress has repeatedly used the for- mulation “voluntarily or because of misconduct” in describ- ing the circumstances under which bonuses or other incen- tives must be refunded to the government when a service member does not complete his or her full term of service. In 1980, Congress enacted legislation using the identical stan- dard to define when a service member who left the armed forces early would have to refund the cost of advanced edu- cation (for example, attendance at medical school) received during service. See 10 U.S.C. § 2005(a)(3). The Senate Re- port on that legislation included an explanatory memorandum from the Under Secretary of the Air Force, which cited as precedent for such a refund requirement the reenlistment bo- nus recoupment provision found in 37 U.S.C. § 308(d)(1). S.Rep. No. 96-850 at 8 (1980), reprinted in 1980 U.S.C.C.A.N. 2833, 2840. The memorandum specifically stated that it was “not the intent of this proposal to include situations where an individual is discharged ... because of academic failure not deemed willful on the part of the indi- vidual, failure to meet physical standards or hardship.” Jd. The Department of Defense implemented the enlistment bonus recoupment statutes in its Financial Management Regulations (“FMRs”’), promulgated by the Under Secretary of Defense/Comptroller and Chief Financial Officer. The relevant FMR, entitled “Reasons for Recoupment,” has been promulgated in substantially identical terms eight times since 1984, most recently last year. Each time the FMRs were reis- sued, their introduction expressly stated that they “supersede existing directives on military pay entitlement.” -The “Reasons for Recoupment” regulation (currently numbered FMR 090503) provides a laundry list of reasons for separation that are considered “voluntar[y], or because of misconduct,” including separation as a result of resignation, court martial, writ of habeas corpus, defective or fraudulent enlistment, misconduct, unsatisfactory performance, and drug or alcohol abuse. As to failure to meet weight or fitness stan- dards, the FMR provides that a separation is voluntary when it occurs “for the convenience of the government upon the application and interest of the member because of special or unusual circumstances including ... [o]verweight/obesity or lack of physical fitness.” FMR 090503(M)(6). In other words, the only situation in which the FMR provides that a weight or fitness separation will be considered “voluntary” for recoupment purposes is when the service member has asked for separation on that basis. B. This Lawsuit Despite the Defense Department’s 1980 statement to Congress that “voluntarily or because of misconduct” does not include separations based on physical standards, and its FMR providing for recoupment only when a service member applies for a weight or fitness discharge, the Department has adopted a practice of recouping bonuses from members dis- charged honorably but involuntarily for failing to meet weight and fitness standards (despite diligent good-faith ef- forts to do so). The Department has carried out this practice by, among other things, setting off bonus amounts against service members’ tax refunds and the pay due them on sepa- ? The most recent version of the FMR concerning recoupment is available on the internet at www.dod.mil/comptroller/fmr/07a/07A09.pdf. The most recent statement that the FMRs supersede all other directives can be found at www.dod.mil/comptroller/fmr/07a/07aintr2.pdf. 6 ration, requiring monthly payments, and, in some cases, em- ploying collection agencies and reporting former service members to credit bureaus. The named petitioners in this case are 15 men and women who were discharged by the armed services because they did not succeed, after remedial efforts, in meeting weight or fit- ness standards. None requested discharge, and the govern- ment has stipulated that each was involuntarily separated. All were honorably discharged, and none was found to have en- gaged in misconduct. Nor was any named petitioner found not to have made a good-faith effort to comply with weight or fitness standards. Indeed, the services’ current policy is to discharge members who do not try to lose weight for unsatis- factory performance; a discharge for weight reasons alone thus reflects a determination that the member’s effort was not unsatisfactory.’ In short, petitioners were discharged not be- cause they did not try, but because they did not succeed. All of the petitioners had received enlistment or reenlistment bonuses ranging from $1,000 to $30,000. The government had recouped portions of those amounts from each of them, and, in some cases, sought interest, costs, and penalties on the amounts claimed to be due. Certain petitioners filed this action in the United States District Court for the District of Maine on behalf of them- selves and others similarly situated, seeking to recover under the Tucker Act the amounts that were recouped from them in violation of applicable statutes and regulations. Petitioners also alleged that the recoupment breached their enlistment or reenlistment contracts. The district court certified a class but, sua sponte, transferred the case to the Court of Federal _ Claims. There, petitioners filed an amended complaint add- ing new plaintiffs and again sought class certification. > Service regulations on this point were collected in the Joint Appen- dix below at J.A. 495-96, 367-68, 371-73, 455-56. On October 25, 2000, the Court of Federal Claims certi- fied an opt-in class of service members who were or are in- voluntarily discharged solely for failure to meet weight or fitness standards and from whom the government has re- couped (or is recouping) any bonus payments. Excluded from the class were any members whose discharge was based on a substantive finding of unsatisfactory performance. Favreau v. United States, 48 Fed. Cl. 774, 780 (2000). Thus, by defini- tion, no class member was discharged for making an insuffi- cient effort to comply with weight or fitness standards, and the class consists entirely of those who did not succeed de- spite their legitimate efforts. When certification was sought, class counsel estimated the potential size of the class to be approximately 500 members. Over 2,300 discharged veterans subsequently opted in to the class, and it appears based on discovery in the case that as many as 10,000 might be eligi- ble to join if the case were permitted to proceed. The parties filed cross motions for summary judgment. Petitioners relied principally on the terms of the governing statutes and the FMR. The government took the position that even though petitioners did not complete their terms of en- listment because they were involuntarily separated, their fail- ure to complete their enlistment terms should nonetheless be considered “voluntary” because their underlying conduct — failure to meet weight and fitness standards — was in some sense “volitional” (even though the members made legiti- mate efforts to meet the standards and were not discharged for unsatisfactory effort). Thus, according to the government, petitioners’ discharges should be considered to be “voluntary involuntary” separations. The government relied on affida- vits from Defense Department officials explaining the De- partment’s practice of recouping bonuses from members dis- charged for these reasons. In addition, the government produced two unpublished, internal memoranda that it contended are “regulations” with the force of law that trump the terms of the published FMR and require recoupment from members separated on weight and fitness grounds. According to the government, the terms of the published regulation were erroneous results of an ‘administrative oversight.” Accordingly, they were to be dis- regarded to the extent they differed from the two secret memoranda and failed to authorize recoupment from service members involuntarily separated for weight or fitness rea- sons. The first of the government’s proffered memoranda, written by then-Assistant Secretary of Defense Lawrence Korb in 1983, is a directive that, in relevant part, states that “convenience of the government” is to be included among the causes of separation that give rise to recoupment. The memorandum says nothing about separation for weight or fitness reasons and thus, on its face, does not clearly contra- dict the FMR on benefit recoupment, which provides that “convenience of the government” separations (including weight and fitness separations) are grounds for recoupment when a member has applied for separation. The second memorandum produced by the government, written by then-Assistant Secretary of Defense Christopher Jehn in March 1992, states that separation for weight control failure is to be “treated similarly for benefit eligibility” (em- phasis added) to separation for drug and alcohol rehabilita- tion failure. Although drug and alcohol separations are grounds for bonus recoupment under the FMR, the Jehn memorandum addresses only benefit eligibility and says nothing about recoupment of bonuses. The FMR permitting recoupment for weight or fitness discharges only when the member has applied for discharge has been issued or reissued eight times without substantial change since the Korb memo- randum and four times since the Jehn memorandum, and each time it has expressly superseded all existing directives concerning its subject matter. ERT Rear nares orem C. The Decisions Below The Court of Federal Claims granted the government’s motion for summary judgment on June 28, 2001. The court acknowledged that both service usage and case law demon- strate that a voluntary separation is one initiated by a service member of his or her own free will. App. 18a-19a. (Indeed, each of the services has directives that define voluntary sepa- rations as those requested by service members, and involun- tary separations as those initiated by the service commander. See J.A. 394-95, 402-03, 436-37, 462-63, 764-65.) Thus, the court recognized that petitioners’ separations were “not vol- untary in any meaningful way.” App. 19a (emphasis added). The court, however, drew a distinction between the sepa- ration and the resulting failure to “complete the term of en- listment.”’ In the court’s view, the statute did not exclude the possibility that an involuntary separation could nonetheless give rise to a voluntary failure to complete the term of en- listment if “the underlying reasons prompting separation re- late to acts of volition.” App. 20a. Thus, the court concluded that the statutory language was “susceptible of both parties’ readings, and is thus ambiguous.” App. 20a. In holding that the “statutory language refers to the voluntariness of the un- derlying behavior and not the act of separation,” the court expressly disagreed with the Tenth Circuit’s reading of the bonus recoupment statutes in Jliff v. Schlesinger, 539 F.2d 1275 (10th Cir. 1976). App. 19a-20a n. 18. Turning to the agency’s construction of the statute, the court further rejected the petitioners’ argument that the FMR — that is, the agency’s published recoupment regulation — supported the view that recoupment was permissible in a weight or fitness separation only when it was the result of the service member’s own application. The court held that the Korb and Jehn memoranda are binding regulations, and it - accepted the government’s argument that the terms of the repeatedly published FMRs amounted to a scrivener’s error and could not be given effect to the extent that they differed 10 from the unpublished memoranda or reflected a “less-than- faithful rendition” of the memoranda. App. 16a. * The court acknowledged, however, that even the Korb and Jehn memoranda (which it repeatedly mischaracterized as “regulations’”’) do not clearly address whether bonus re- coupment is permissible in weight and fitness separations — because, as noted above, the Korb memorandum says nothing about weight or fitness, and the Jehn memorandum says nothing about bonuses or recoupment. As the court put it, “by themselves the regulations are insufficient to understand the agency’s interpretation.” App. 20a. ; Accordingly, the court placed its reliance on the affida- vits submitted by the government in this case that set forth the agency’s purported construction of the statutes as authorizing recoupment “if the conduct that resulted in the separation was voluntary, i.e., within the service-member’s control.” App. 10a.° Concluding that the interpretation of the statute set forth in the agency’s affidavits was entitled to def- erence under Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 * The court accepted the government’s assertion that the FMR was drafted by the Defense Finance and Accounting Service, which lacked authority to deviate from the Korb and Jehn memoranda. App. 16a. Curi- ously, the court overlooked that the FMR was promulgated under the signature of the Under Secretary of Defense/Comptroller and Chief Fi- nancial Officer. Neither the court nor the government cited anything to indicate that the Under Secretary lacked authority to promulgate the FMR. Indeed, even after the Court of Federal Claims’ decision asserting that the FMR was a “less-than-faithful rendition” of the Korb and Jehn memoranda, the Under Secretary again promulgated it in 2002 without material change, and again stated that it superseded all prior directives. The current Under Secretary, of course, is not a subordinate of Assistant Secretaries Korb and Jehn, who long ago left office, and any assertion that he lacks authority to promulgate the FMR is incredible. ° The court did not explain how a failure to satisfy weight or fitness standards despite good-faith effort was “within the service member’s control” where the service member was not discharged for unsatisfactory effort and there was no evidence of lack of effort. 11 (1984), and United States v. Mead Corp., 533 U.S. 218 (2001), the court held that the government’s recoupment of bonuses from the petitioners was lawful. Ironically, the court recognized that affidavits prepared for litigation purposes are normally not entitled to deference (App. 23a), but it held that here deference was warranted in light of the fact that the Korb and Jehn memoranda, which the affidavits purported to explain, were themselves regulations — even though it had already stated that, viewed as regulations, they were insuffi- cient to clarify the agency’s view of the statute. ° Petitioners appealed, and, on December 30, 2002, the Court of Appeals for the Federal Circuit affirmed. After briefly reciting the facts, the court of appeals’ per curiam opinion stated: “For the reasons well stated in its opinion ..., which we adopt and set out here in an attachment, the judg- ment of the Court of Federal Claims is affirmed.” App. 3a. REASONS FOR GRANTING THE WRIT The reason petitioners did not complete their terms of enlistment was that they were involuntarily discharged. To say that their failure to complete their terms was “voluntary” because the services’ decision to discharge them was related to conduct that was somehow “volitional” makes a mockery of the statutory language. It renders another key statutory term — “misconduct” — superfluous, because, under the lower courts’ reading of the statute, any member discharged for “misconduct,” which is by definition “volitional,” has also “voluntarily” failed to complete his term of enlistment. In any event, petitioners’ conduct was hardly “volitional”: ° The court also briefly alluded to language from a 1951 Senate Re- port concerning an earlier version of enlistment bonus recoupment legis- lation, but the cited language does not specifically address the issue, and the lower courts’ interpretation depends on an unwarranted inference that in using the statutory language, Congress intended to adopt a totally dif- ferent formulation proposed by the Bureau of the Budget. See App. 24a. 12 The undisputed facts are that they were not discharged be- cause they did not try to meet the services’ standards, let alone because they intended to fail, but only because their failure was not the result of a medical condition. That is a far cry from a “voluntary” failure. Finally, the reading of the statute adopted below is contrary to the one piece of legisla- tive history that directly addresses the issue and that supports the plain, common-sense reading of the statute: namely, the 1980 Senate Report, discussed above, indicating that Con- gress was told and understood that the statutory language does not extend to discharge for “failure to meet physical standards.” The lower courts’ gross misreading of an important fed- eral statute affecting thousands of service members itself merits review by this Court. Cf Brown v. Gardner, 513 U.S. 115 (1994) (reviewing Federal Circuit’s construction of vet- eran’s benefit statute and rejecting government’s interpreta- tion as “implausible”). But more is at stake here than error correction. First, the decisions below conflict with decisions of other federal courts construing the same or related statutes. Second, and more importantly, the lower courts’ decision to subordinate a clear published regulation to vague unpub- lished memoranda and litigation affidavits interpreting them is a clear departure from established principles of adminis- trative law and the ordinary course of judicial proceedings. I. THE OPINION BELOW CONFLICTS WITH DE- CISIONS OF OTHER FEDERAL COURTS THAT GIVE EFFECT TO THE PLAIN MEANING OF THE STATUTORY TERMS. - The Federal Circuit’s rejection of petitioners’ straight- forward reading of the statute conflicts with decisions of three other federal courts, including another federal court of appeals. First, in Jliff v. Schlesinger, 539 F.2d 1275, the Tenth Circuit, in a case brought by a conscientious objector claiming his resignation was not “voluntary,” rejected a reading of the recoupment statutes under which the determi- 13 nation of “voluntariness” turned on the volitional nature of the service member’s action. Instead, the //iff court — at the express urging of the government —adopted a clear and sim- ple reading of the statute: A member “voluntarily” does not complete his or her term of enlistment when he or she asks to be discharged. The courts in this case expressly rejected the Tenth Circuit’s reading of the statute. App. 19a-20a n.18. Second, in United States v. Gears, 835 F. Supp. 1093 (N.D. Ind. 1993), the district court, in an action brought by the United States under 10 U.S.C. § 2005(a) to recover edu- cational expenses from a Naval Academy midshipman dis- charged for failure to meet weight standards, rejected the government’s argument that a service member “voluntarily” failed to complete a tour of duty whenever his failure to meet weight standards was “volitional in that it was not caused by disease or physical defect.” Jd. at 1098. The court reasoned: As to volition, the court does not believe that the statu- tory term “voluntarily” can be so construed. Congress plainly intended to limit the reimbursement obligation to a class of persons, and the government’s interpreta- tion would remove any such limits: only those drummed out of the service for non-volitional — invol- untary — acts would be spared the reimbursement obli- gation. ... [T]he court believes that such a reading would cast a far wider net than is consistent with the ‘Congressional intent evident from the plain language of [the statute].’ _ Id. The government did not appeal its loss in Gears. ” The Gears court went on to say the statute required, “at the least, either an intent to produce a separation or an awareness that a chosen course of conduct will produce such a result.” Jd. at 1099. Neither stan- dard would permit recoupment against petitioners, as none of them in- tended to leave the armed services, nor was their lack of success in meeting weight or fitness requirements a “chosen course of conduct.” 14 Third, in Hensala v. Department of the Air Force, 148 F. Supp. 2d 988 (N.D. Cal. 2001), the court considered an ac- tion by a discharged Air Force officer seeking to enjoin the government’s decision to recoup funds expended on his medical education. The Air Force had discharged him for violating the “don’t ask, don’t tell” sexual orientation policy by declaring that he was a homosexual. The government contended that it was entitled to recoupment under 10 U.S.C. § 2005(a)(3) because the officer had “voluntarily” failed to complete his tour of duty. The court held that the government’s decision to seek re- coupment was lawful, but not because the officer’s declara- tion, which resulted in his discharge, was a volitional act. Rather, the court held that for the officer’s failure to complete his term of service to be voluntary, he had to have made his declaration of homosexuality “for the purpose of obtaining separation.” 148 F. Supp. 2d at 998. The court then con- cluded that the Air Force’s determination that the officer had “decided not to serve” and made his declaration in order to bring about his own discharge was supported by the record. Id. at 999. By contrasf, under the standard adopted by the Hensala court, none of the petitioners in this case could be found to have voluntarily failed to complete his or her term of enlistment, because none took action for the purpose of bringing about his or her discharge. Indeed, the class in this case excludes any service member who was determined to have made insufficient effort to meet standards and was dis- charged for substantive unsatisfactory performance; hence, the military itself has determined that petitioners did not de- liberately bring about their own separation. These divergent readings of the same or identical statu- tory language not only underscore the incorrectness of the decision below, but also show a need for direction from this Court concerning the meaning of statutes that are important to the armed services and also affect the vital interests of thousands of men and women who have served or are serving 15 our country in the military. The decisions also demonstrate that this case, unlike many cases within the Federal Circuit’s jurisdiction, is not one where the Federal Circuit effectively has the last word, rendering conflicts among the courts im- possible. Rather, in cases concerning these statutes, the Fed- eral Circuit has appellate jurisdiction only when former service members bring Tucker Act actions to recover amounts wrongfully recouped from them. The district courts and the regional courts of appeals, on the other hand, retain jurisdiction when the United States brings an action against a discharged veteran to recoup bonus payments or other mon- ies or when the former service member brings an action (as in Hensala) that prospectively challenges the government’s decision to seek recoupment. Thus, the disparate readings of the statutory language that have emerged create the possibil- ity of divergent results depending not only on where suit is brought, but also on who brings it and what relief is sought. II. THE FEDERAL CIRCUIT’S DECISION TO GIVE UNPUBLISHED MEMORANDA AND LITIGA- TION AFFIDAVITS PRECEDENCE OVER DULY PROMULGATED AND PUBLISHED REGULA- TIONS MERITS REVIEW. The Federal Circuit’s decision also merits review for an- other equally important reason: Its decision to give ambigu- ous, unpublished memoranda priority over an agency’s duly (and repeatedly) promulgated and published regulations, and then to defer to affidavits purporting to interpret or explain ~ those memoranda, is a fundamental and disquieting departure from well established principles of administrative law. A. To begin with, the result below cannot be squared with the published FMR (which expressly supersedes all other directives, a point curiously ignored by the courts), and neither the government nor the lower courts made any seri- ous effort to do so. Indeed, the construction accepted by the lower courts renders superfluous the FMR’s provision that recoupment is permissible only when a service member is 16 separated on his own application for obesity or lack of fit- ness, since the lower courts’ reading provides for recoupment for a weight of fitness discharge without regard to whether it results from the service member’s own application.® The published regulation, on its face, is thus flatly inconsistent with the agency’s proffered construction of the statute. The courts have long recognized that agencies are bound by the terms of their own regulations. See, e.g., United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260 (1954); Service v. Dulles, 354 U.S. 363 (1957); Lopez v. FAA, 318 F.3d 242 (D.C. Cir. 2003). This principle is as applicable to the De- partment of Defense and the armed services as to other agen- cies. Blassingame v. Secretary of the Navy, 866 F.2d 556 (2d Cir. 1989); Boddie v. Department of Navy, 827 F.2d 1578 (Fed. Cir. 1987). Under this well-settled principle, the terms of the repeatedly published FMR, which provide for bonus recoupment for a weight or fitness separation only when the separation results from the application of the service mem- ber, are legally binding on the agency. The lower courts in this case, and the government, side- stepped this principle by asserting that the agency’s pub- lished regulation is not controlling; rather, in their view, the governing law is contained in two unpublished memoranda that were never available to petitioners or the public before this litigation. But the idea that unpublished, internal agency documents prevail over the terms of published regulations repeatedly promulgated by the agency turns normal rules of * Indeed, the “volitional conduct” theory accepted below renders nearly all of the subparagraphs of FMR 090503(M) superfluous. Subsec- tion (M) provides for recoupment for ten specified grounds of separation “for the convenience of the government” if the service member applies for discharge. Eight of those ten grounds (which include such items as enlistment in another service, running for public office, and becoming pregnant) involve volitional conduct and thus would be “voluntary” under the lower courts’ reading of the statute regardless of whether the service member applied for discharge. 17 administrative law on their heads. Although, as the lower courts pointed out, the APA may not require that regulations governing the matters at issue here be promulgated through the notice-and-comment procedure of 5 U.S.C. § 553 (see App. 22a), they remain subject to the more basic requirement © that any regulation purporting to bind members of the public must be published, and it may not be enforced against per- sons who lack notice of it if it has not been published. 5 U.S.C. § 552(a); Morton v. Ruiz, 415 U.S. 199 (1974).? Here, the agency has done more than simply attempt to enforce an unpublished regulation in the absence of a pub- lished regulation that directly addresses a matter, as in Mor- ton and similar cases. It has repudiated its published regula- tions in favor of unpublished internal directives (directives that the published regulations expressly repealed). No deci- sions of this Court authorize such an extraordinary result. The lower courts were unable to cite any precedent holding that unpublished regulations supersede published ones, to the detriment of members of the public, when an agency is dis- satisfied with its own published rules or when it contends that its internal memoranda indicate that some agency officials may have preferred that different regulations be issued.’° Indeed, the normal remedy when an agency is unhappy with its regulations is for the agency to amend them. As the Eleventh Circuit has put it: * The publication principle of § 552(a) is fully applicable to military regulations concerning discharge of service members. See, e.g., National Ass'n of Concerned Veterans v. Secretary of Defense, 487 F. Supp. 192 (D.D.C. 1979). '° The one case cited by the lower courts, Hamlet v United States, 63 F.3d 1097 (Fed. Cir. 1995), concerns the different issue of when an af- fected person can hold an agency to rules set forth in its unpublished documents. That is a different question from whether the agency can subject individuals to rules that it has not published. Congress has spe- cifically outlawed the latter practice in 5 U.S.C. § 552(a). 18 [J}udicial rewriting of regulations is improper. A court should presume regulations mean what they say. If the executive branch wishes to reconsider them, it is free to do so. Judicial assistance is not required. Lee v. FlightSafety Services Corp., 20 F.3d 428, 433 (11th Cir. 1994). The Federal Circuit’s decision to bypass this principle by giving secret regulations priority over published ones “has so far departed from the accepted and usual course of judicial proceedings, or sanctioned such a departure by a lower court, as to call for an exercise of this Court’s supervi- sory power.” S. Ct. R. 10(a). B. The lower courts compounded their error in giving unpublished directives precedence over published regulations when, recognizing that even the unpublished “regulations” did not clearly address the issue at hand, they granted Chev- ron deference to a construction of the statutes set forth not in the supposed “regulations” themselves, but in the govern- ment’s litigation affidavits. This Court has recently empha- sized that Chevron deference is limited to formal exercises by agencies of regulatory authority delegated by Congress — typically in the form of notice-and-comment rulemaking, see United States v. Mead Corp., 533 U.S. at 229-31, or some comparable exercise of agency lawmaking power, e.g., Barnhart v. Walton, 535 U.S. 212 (2002) (agency interpreta- tion set forth repeatedly in published Social Security rulings and manuals and ultimately in a regulation). Mead’s premise is that Chevron deference is called for only when Congress has delegated to an agency the power to take action “with the effect of law” and when the agency has done so through “a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pro- nouncement of such force.” 533 U.S. at 230. In this case, the agency’s formal expression of its statu- tory interpretation — the FMR — provides no support for the agency’s position. Indeed, the regulation supports precisely the opposite reading of the statute. And even the unpublished 19 memoranda that the agency and lower courts said were the true “regulations” are, as the courts acknowledged, “insuffi- cient to understand the agency’s interpretation.” App. 20a. The sources the courts turned to — affidavits prepared for litigation— fall far short of demonstrating that “the agency interpretation claiming deference was promulgated in the ex- ercise of ... authority” delegated by Congress “to make rules carrying the force of law,” as Mead requires. 533 U.S. at 526-27. The affidavits demonstrate only the truism that the agency has a practice of recoupment (which of course is un- disputed and is the reason for this case), not that that practice stemmed from an exercise of rulemaking authority satisfying Mead. Other courts have consistently rejected the notion that materials such as those relied on by the lower courts here qualify for deference in light of Mead. See, e.g., Chao v. Rus- sell P. LeFrois Builder, Inc., 291 F.3d 219, 227 (2d Cir. 2002) (agency position set forth in litigation documents not entitled to Chevron/Mead deference); Landmark Legal Found. v. IRS, 267 F.3d 1132, 1136 (D.C. Cir. 2001) (inter- pretation set forth in agency’s litigation submissions not en- titled to Chevron/Mead deference); Matz v. Household In- tern. Tax Reduction Inv. Plan, 265 F.3d 572 (7th Cir. 2001) (agency position set forth in litigation documents with sup- port from agency handbooks and rulings not entitled to Chev- ron/Mead deference); AFGE v. Rumsfeld, 262 F.3d 649, 658 & n.10 (7th Cir. 2001) (internal Army memoranda not enti- tled to Chevron/Mead deference). That the Federal Circuit has diverged from other circuits’ post-Mead precedents regarding the types of agency pro-. nouncements entitled to deference by itself warrants this Court’s attention. Review is particularly appropriate given the current lingering uncertainty over Mead’s full reach. Compare Edelman v. Lynchburg College, 535 U.S. 106, 114 (2002) (noting Mead does not “necessarily” limit deference to notice-and-comment rulemaking), with id. at 123-24 (O’Connor, J., concurring) (procedural-regulation that is le- 20 gally binding and is published in Code of Federal Regula- tions is “sufficiently formal” to merit Mead deference). Review here is also called for because the combined ef- fect of the lower courts’ reliance on unpublished memoranda and its deference to litigation affidavits purporting to explain. those memoranda is to subject petitioners to “regulations” the terms of which were not only unknown to them but in- herently unknowable: Not only were the unpublished memo- randa that the lower courts elevated to the status of regula- tions unavailable to petitioners, but even if petitioners had stumbled upon the memoranda, they could not have sus- pected that the published regulations, which expressly super- seded prior directives, would be subordinated to the memo- randa. And even if they had by some chance anticipated that the memoranda and not the published regulations would gov- ern, they still could not have understood the agency’s inter- pretation without the affidavits that were newly created for purposes of this litigation. The lower courts’ holding thut such secret “regulations” should prevail over the terms of an agency’s duly promulgated and published regulations is a novel and dangerous distortion of administrative law princi- ples that requires review and correction by this Court. CONCLUSION The lower courts’ holding directly affects thousands of former servicemen and women who honorably served their country, engaged in no misconduct, and were discharged against their will because they did not succeed in meeting fitness or weight standards. Whether they and others like them should be required to return bonus payments offered as an inducement for their service — under a statute designed to apply only to service members who engage in misconduct or voluntarily leave the service before their enlistment expires —is an issue of substantial importance. The application of the lower courts’ novel decisional principles is particularly unfair in this case because of the 21 significant reliance interests at stake. When petitioners (some of whom already had weight problems) accepted the gov- ernment’s offer of a bonus and signed their enlistment or reenlistment contracts, they were entitled to rely on the pub- lished rule assuring them that they could keep their bonuses unless they engaged in misconduct or quit the service volun- tarily. Having lived up to their end of the bargain by making good-faith (albeit unsuccessful) efforts to meet the services’ standards, petitioners should not now be subject to govern- ment exactions based on covert “regulations” contradicting both the statute and the agency’s own rules. The petition for a writ of certiorari should be granted. Respectfully submitted, Michael A. Feldman Scott L. Nelson 14 Lincoln Street Counsel of Record Brunswick, ME 04011 Brian Wolfman (207) 729-2660 Public Citizen Litigation Group 1600 20th Street, N.W. Washington, D.C. 20009 (202) 588-1000 Attorneys for Petitioners Date: March 28, 2003 APPENDIX A UNITED STATES COURT OF APPEALS, FEDERAL CIRCUIT. Bertrand R. FAVREAU, II, Jeffrey D. Thompson, Donna Marie McCurdy, Ryan D. Mumme, Bridgit Hallas, Scott Laberge, Thomas L. Fryer, Lee C. Marshall, Joseph Tingerthal, James W. Fuller, Roger F. Sablone, Jr., Robert A. Bell, Brenda G. Vanness Crista, Patrick N. Turner, and Charles D. Wiggins, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee. No. 01-5140. Dec. 30, 2002. Michael A. Feldman, of Brunswick, Maine, argued for Plain- tiffs- Appellants. Alan J. Lo Re, Trial Attorney, Washington, DC, with him on the brief were Robert D McCallum, Jr., Assistant Attorney General; David M. Cohen, Director; and Bryant G. Snee, As- sistant Director. Of counsel on the brief was Cdr. Robert Schapler, Department of the Navy, Office of the Judge Ad- vocate General, of Washington, DC, for Defendant-Appellee. Before MAYER, Chief Judge, NEWMAN and CLEVEN- GER, Circuit Judges. PER CURIAM. This is a class action suit brought by former members of the armed forces whose enlistment or reenlistment bonuses were recouped by the United States after they were separated 2a from the armed forces for failing to comply with applicable weight control or physical fitness standards. Upon enlisting or reenlisting, each service-member received a monetary bo- nus, which served as additional compensation to be earned on a pro rata basis during the term of enlistment or reenlistment. While the facts applicable to each service-member differ slightly, military records uniformly reflect that they: (1) re- ceived dietary counseling and participated in remedial weight or fitness programs; (2) were warned that failure to meet service standards might result in discharge; and (3) failed to comply with weight or fitness standards for non-medical rea- sons. Between the time of enlistment or reenlistment and dis- charge the Defense Department issued two memoranda ad- dressing separation categories. In April of 1983, Assistant Secretary of Defense Lawrence Korb, under authority dele- gated by the Secretary of Defense, promulgated a list of sepa- ration categories that would result in recoupment. The Korb memorandum was later submitted to the Military Pay and Allowance Committee in a proposal to revise paragraph 10942 of the Department of Defense Pay Manual. On March 10, 1992, Assistant Secretary of Defense Christopher Jehn issued a memorandum creating a new separation category called “weight control failure” and directed use of this cate- gory by all of the armed forces. The Jehn memorandum stated that the “weight control failure” category was created to resolve disparity among service separation policies and provide for equitable treatment. In 1998, Favreau was separated from the Army for failure to comply with weight control standards. The Army recouped the unearned portion of his reenlistment bonus. Favreau initi- ated a civil action in the District Court for the District of Maine challenging the recoupment, and the case was trans- ferred to the United States Court of Federal Claims. Count one of the complaint alleged that the government breached enlistment or reenlistment contracts. Count two alleged that 3a the recoupment of the unearned portion of bonuses was an illegal exaction because it violated the Department of De- fense Financial Management Regulations and provisions of the Military Pay and Allowance Act, 37 U.S.C. §§ 308 and former 308a.! The court granted the government’s motion to dismiss count one of the complaint, holding that the duty to pay service-members their bonuses is not contractual. It granted the government’s motion for summary judgment as to count two, holding that the Department of Defense’s interpretation of the statutory provisions that permit recoupment when service-members fail to maintain weight control or physical fitness standards was reasonable and consistent with congres- sional intent. The court also denied Favreau’s cross-motion for summary judgment, holding that the Department of De- fense’s interpretation of the statutory provisions to permit recoupment when service-members fail weight or physical fitness standards was reasonable and that Department of De- fense Financial Management Regulations are not inconsistent with sections 308 and former 308a. The court also said the armed forces’ recoupment practice did not violate Depart- ment of Defense Financial Management Regulations. For the reasons well stated in its opinion reported at 49 Fed. Cl. 635 (2001), which we adopt and set out here in an attachment, the judgment of the Court of Federal Claims is affirmed. AFFIRMED. ' Effective October 1, 2000, 37 U.S.C. § 308a was repealed by amendments made to subsection (b) of 37 U.S.C. § 309. 4a APPENDIX B ATTACHMENT Bertrand R. FAVREAU, II., et al., Plaintiffs, v. The UNITED STATES, Defendant. No. 99-339C. United States Court of Federal Claims June 28, 2001. Michael A. Feldman, Brunswick, Me., for plaintiffs. Alan J. Lo Re, Commercial Litigation Branch, Civil Divi- sion, Department of Justice, argued for defendant. With whom on the brief were Reid Prouty, Trial Attorney, Com- mercial Litigation Branch, Civil Division, Department of Justice, Bryant G. Snee, Assistant Director, Stuart E. Schif- fer, Acting Assistant Attorney General, David M. Cohen, Di- rector, and LCDR John Hannink, Office of the Judge Advo- cate General, Department of Navy. OPINION BRUGGINK, Judge. This is a class action brought by former members of the United States Armed Forces who were separated from their respective services’ because they failed to meet weight and/or physical fitness standards. Plaintiffs do not challenge their separations but instead challenge the services’ recoup- ment of bonuses to which they became entitled at the time they agreed to enlist or re-enlist in the services. There are two causes of action. Count One alleges that the government breached plaintiffs’ enlistment or ' The term “services” refers to the Army, Navy, Air Force, and Ma- rine Corps. 5a reenlistment contracts. Count Two alleges that recoupment was an illegal exaction because it violated provisions of the Military Pay and Allowances Act which authorize the pay- ment and recoupment of bonuses? and the Department of De- fense Financial Management Regulations (“FMR”).° Pend- ing are defendant’s motion to dismiss and plaintiffs’ motion for summary judgment with respect to Count One.* Also pending are cross motions for summary judgment with re- spect to Count Two. The motions have been fully briefed and orally argued. For the reasons discussed below, we grant de- fendant’s motion to dismiss Count One and grant defendant’s motion for summary judgment with respect to Count Two. BACKGROUND Each service has the authority to determine the standards that individuals must meet to remain a member of the United States Armed Forces. See 10 U.S.C. § 1169 (1994). It is un- disputed that the representative plaintiffs failed to satisfy such requirements with respect to weight control or physical fitness. This was the underlying reason for their discharges. It is undisputed, moreover, that plaintiffs’ failures to meet _ weight or fitness standards were not caused by medical con- ditions. Nor were they separated until they had received counseling, had participated in remedial weight or physical fitness programs, and had been warmed that failure to meet standards might result in discharge. Plaintiffs did not ask to be separated, however. When a service member is separated for failing these or any other standards, a reason for the separation is assigned 237 U.S.C. §§ 308 and 308a (1994 & Supp. IV 1998). 3 DoD FMR Vol.7a, Ch.9, Special Pay: Enlistment and Reenlistment Bonus-Enlisted Members, 4] 0901-090406 (2000). * In defendant’s initial dispositive motion, it moved to dismiss plain- tiffs’ contract claim pursuant to 12(b)(1) for a lack of subject matter ju- risdiction. 6a pursuant to directives of the Secretary of Defense. DoD Di- rective 1332.14 4 E.2 (Dec. 21, 1993). This Directive sets out guidelines for the separation of service-members and estab- lishes certain grounds for discharge, although the services in their individual regulations may create additional reasons.” Directive 1332.14, Pt. 1, § P. The precise separation catego- ries assigned with respect to plaintiffs thus varied by service and depending on when they were discharged. When the un- derlying reason for separation was weight control failure or failure of physical standards, one of three separation catego- * Navy regulations, for example, provide for the following: Expiration of Service Obligation Selected Changes in Service Obligation Convenience of the government Disability Defective Enlistments and Inductions Entry Level Performance and Conduct Unsatisfactory Performance Homosexual Conduct Drug Abuse Rehabilitation Failure Alcohol Abuse Rehabilitation Failure Misconduct Separation in Lieu of Trial by Court Martial Security Unsatisfactory Participation in the Ready Reserve Weight Control Failure Secretary of the Navy Instruction (“SECNAVINST”) 1910.4B (29 May 1996). The services may alter the name somewhat or may choose to com- bine certain categories. For instance, the Air Force combines the alcohol and drug abuse rehabilitation failure under one category called “substance abuse treatment failure.” See Air Force Instruction (“AFI”) 36-3208, Ch. 5, Section F (14 October 1994). For the most part, the other services’ regulations contain substantially the same reasons for separation. See Army Reg. 635-200 (26 July 1996); AFI 36-3208 (14 Oct. 1994); Marine Corps Order (“MCO”) P1900.16E (18 Aug. 1995). es eeeeeeeenerereneennereneneemniemiiineeaiineiianiaiiiel 7a ries® were used: unsatisfactory performance,’ convenience of the government, and, after 1992, weight control failure.* ' “Unsatisfactory performance” and “convenience of the govern- ment” can be considered separation categories in that they can embrace more than one type of underlying cause. For example, in the Air Force, a member can be separated under the category “unsatisfactory perform- ance” for failing “to meet minimum fitness standards,” for failing to “maintain standards of dress and personal appearance ...,” for failing to “progress in on-the-job training ...,” or for “irresponsibility in the man- agement of personal finances.” See AFI 36-3208, Ch.5, 5.26, 26.2, 26.3, 26.4. Similarly, a member can be separated under the category “conven- ience of the government” in order to, among other things, further his or her education, because he or she is a sole surviving son or daughter, or a conscientious objector. See AFI 36-3208, Ch. 3, Section B, ¥ 3.18, J 3.12, { 3.16 (14 October 1994). ” Until March 10, 1992, the Air Force and Marine Corps separated members who failed weight standards under the category “unsatisfactory performance.” All of the services, except the Navy, currently separate members who fail fitness standards under that category as well. See Army Reg. 635-200 Ch. 13-2(f) (stating that separation proceeding for unsatis- factory performance is required for soldiers without medical conditions who fail Army Physical Fitness Test two consecutive times); Air Force Instruction 36-3208 (14 Oct. 1994) (stating that failure to meet minimum fitness standards for reasons not related to disability is a possible basis for separation under the category for unsatisfactory performance); Marine Corps Sep. and Ret’t Man. P1900.16E (18 Aug. 95) P6206 at 6-19 (inter- preting the failure of fitness tests to be “[p]erformance of assigned tasks and duties in a manner that is not contributory to wnit readiness and/or mission accomplishment...” which is one of the general criteria for an “unsatisfactory performance” separation). The Navy, because it has a combined weight and physical fitness program, separates members who fail either weight or fitness standards under the same category, “weight control failure.” * The Army and Navy are the only services to have separated mem- bers who fail weight or fitness standards under the category for “the con- venience of the government.” The Navy separated members who failed weight and fitness standards under this category until March 3, 1993, and the Army separated members who failed weight standards under this category until June 11, 1993. These services stopped using the category in response to the Jehn memo, see infra p. 11. Since the Jehn meio was issued, a service-member who fails weight standards _is separated for (Footnote continued) 8a It is also undisputed that when one of these separation categories was assigned due to underlying issues of weight control failure or lack of physical fitness, the services each recouped unearned portions of the service member’s enlist- ment or re-enlistment bonus. Hence this litigation. There are two code provisions governing recoupment, one dealing with enlistment bonuses and the other with reenlistment bonuses. They provide in pertinent part: (d)(1) A member who voluntarily, or because of his misconduct, does not complete the term of enlistment for which a bonus was paid to him under this section ... shall refund the percentage of the bonus that the unex- pired part of his additional obligated service is of the total reenlistment or extension period for which the bo- nus was paid. 37 U.S.C. § 308(d)(1)(emphasis added). (b) Under regulations prescribed by the Secretary of Defense ... a person who voluntarily, or because of his misconduct, does not complete the term of enlistment for which a bonus was paid to him under this section ... shall refund that percentage of the bonus that the unex- pired part of his enlistment is of the total enlistment pe- riod for which the bonus was paid. 37 U.S.C. § 308a(b)(emphasis added). The Secretary of Defense is granted explicit authority to implement these provisions through regulations, and has done so. Those regulations are considered below. A complete understanding of the services’ interpretation of these code sections requires examination of additional sources, however: specifically, the separation directive referenced above, memoranda, and several affidavits unique to the litigation. ~ “weight control failure.” The Army uses “failure to meet body fat stan- dards.” See Army Reg. 635-200, Ch. 18, p.69 (26 June 1996). 9a The court will assume for the moment that it can rely on these affidavits for the purpose of setting out the Secretary’s interpretation of the statutory and regulatory language. Bonuses are not offered to all personnel. Rather they are used as incentives to recruit or keep individuals with certain specialties. The representative’s enlistment “contracts” con- tain, for example, such language as the following: “I fully understand that continued entitlement to the Enlistment Bo- nus may be terminated and a »ro-rata portion of my Enlist- ment Bonus may be recouped if I am considered not techni- cally qualified in the bonus specialty ... because (a) I am no longer classified in that NEC ... for any of the following rea- sons within my control: ... loss of any other mandatory quali- fication for effective performance ... when such ... loss is voluntary....”" Def.’s Summ. J. and Mot. to Dismiss App. II at 345. Insofar as relevant here, recoupment is only possible with respect to those who “voluntarily” do not complete their term of service.’ The Department of Defense’s (DoD) inter- pretation of the term “voluntarily” was furnished by Colonel Bobby A. Little in his affidavit. Colonel Little is Director, Officer/Enlisted Personne] Management in the Office of the Secretary of Defense (OSD). He explains that the Director of Officer/Enlisted Personnel Management (OEPM) with the OSD is delegated authority for, among other things, recoup- ment practices and policies service-wide. OEPM is also re- sponsible for implementing directives of the Secretary of De- fense or the Secretary’s designees. OEPM, according to Colonel Little, has * Although the statutes provide that recoupment is also appropriate when a service member fails to complete a term because of misconduct, defendant justifies the government’s recoupment based on its interpreta- tion that the plaintiffs have failed to complete their terms voluntarily. ~ eee ne . 10a determined that the question whether an individual has failed to complete a term of enlistment “voluntarily” depends on whether the service-member was separated for engaging in conduct that is within the control of the service-member but incompatible with military service. In that regard, we have not limited recoupment to sepa- rations granted at the request of the service-member; rather, even where the military service initiates the separation, we have concluded that recoupment is ap- propriate if the conduct that resulted in the separation was voluntary, i.e., within the service-member’s con- trol. ... The [separation] codes that trigger recoupment are agreed upon by the services and my office .... DoD thus interprets the term “voluntarily” to refer to whatever the service member did or did not do to prompt separation. So long as there is counseling and an opportunity to overcome deficiencies, and so long as persons with medi- cally-diagnosed problems that interfere with weight reduction or maintaining physical fitness may not be separated for weight control failure or lack of physical fitness, the failure to meet standards is deemed volitional. The focus is thus not on the characterization of the separation itself but on the service member’s actions or inactions leading to separation. Colonel Little goes on to explain that, in order to imple- ment its interpretation of the recoupment statutes, DoD has designated certain separation categories for use when the un- derlying reason for separation is weight control failure or lack of physical fitness. These have -varied over time and by service, but they consist of the three categories used to sepa- rate plaintiffs in this case: weight control failure, unsatisfac- tory performance, and convenience of the government. The DoD has also directed that when these categories are used lla due to weight control failure or lack of physical fitness, cer- tain codes which relate to the category trigger recoupment.’? This explanation is consistent with what happened to plaintiffs here. They failed weight control or physical fitness standards; they had been afforded the opportunity to meet those standards; they did not have medical problems pre- venting compliance; they were separated under one of the three triggering separation codes; and their bonuses were re- couped. Portions of this practice can be traced directly to the sepa- ration directives and to memoranda that will be examined below. The critical connection between DoD practice and the phrase “voluntarily ... fails to complete the term of service,” however, is only drawn in writing by Col. Little’s affidavit. The underlying rationale is not captured in the regulations governing financial matters, including those dealing with re- coupment. The connection between recoupment and separation cate- gories is established in two memoranda. The first is an April 13, 1983 memo from Assistant Secretary of Defense, Law- rence Korb,'' with respect to when the services were to re- coup bonuses. In pertinent part, the Korb memo provides: '° The affidavit of Erwin J. Wybenga, Deputy Director of the De- fense Joint Military Pay System of the Defense Finance and Accounting Service (DFAS) amplifies Little’s explanation. '' The Korb memo is a regulation entitled to the force and effect of law. See Hamlet v. United States, 63 F.3d 1097, 1105 (1995) (setting out four part test to determine if agency publication is entitled to force and effect of law). Assistant Secretary of Defense Korb had the authority to issue the memorandum. Under the recoupment provisions, the Secretary of Defense is granted the authority to prescribe regulations to carry out recoupment. 37 U.S.C. §§ 308(f) and 308a(b). The Secretary of Defense has delegated this grant of authority to the Assistant Secretary of Defense. In 1984, this delegation was to the Assistant Secretary of Defense for Manpower, Reserve Affairs, and Logistics, (MRA & L) Lawrence Korb. DoD Directive 5124.1 | F.1 (July 26, 1982). Pursuant to this delegation, (Footnote continued) 12a The purpose of this memorandum is to ... standardize the reasons for which recoupment of bonuses is re- quired. Attached is a list of reasons from the Enlisted Separa- tions Directive (DoDD 1332.14) ... for which we will recoup enlisted bonuses. In order to complete the stan- dardization process, request you [sic] furnish this office a complete list of separations reasons ... used each Service. Please annotate on the Service’s list the rea- sons/does that correspond to the attached list of separa- tion reasons .... After review, these lists will be provided to the OSD Comptroller for incorporation in the DoD Pay Manual. Def’s. Suppl. Br.App. at 1. Attached to the Korb memo was a list of separation cate- gories entitled “Enlisted Bonus Recoupment Reasons.””? In- Korb was granted the authority to “issue instructions and one-time direc- tive-type memoranda ... which carry out the policies approved by the Sec- retary of Defense in assigned fields of responsibility.” DoD Directive 5124.1 | F.1 (July 26, 1982). Included in his responsibilities was the compensation of service-members. See DoD Directive 5124.1 J D.9 (July 26, 1982). '2 Gloria D. Harris, the individual responsible for implementing the laws, regulations, and policies related to the payment of personnel in all of the services, stated in her affidavit that: The “reasons” for separation set forth in the [FMR] list ... were taken from the categories of separation contained within the DoD Directive and/or Service regulations that deal with the sepa- ration of enlisted personnel. When a member’s conduct results in separation under a par- ticular category of separation contained within the separation regulations of that member’s service, that category of separation is used to make the recoupment determination. (Footnote continued) 13a cluded on the list were “Convenience of the Government” and “Unsatisfactory Performance.” Not included on the list, because it was not yet a separation category, was “Weight Control Failure.” The memo says nothing about limiting re- coupment to those service members who request separation. The reference in the Korb memo to the DoD Pay Manual was to what was later to become the FMR. Responsibility for incorporation of directives such as the Korb memo into the FMR fell to the Military Pay and Allowances Committee (“MPAC”), later renamed the Defense Finance and Ac- counting Service (“DFAS”). This organization has responsi- bility for drafting and maintaining financial regulations. In addition, at the direction of the Under Secretary of Defense Comptroller/Chief Financial Officer, it also has responsibility for executing recoupments. Although DFAS maintains the relevant recoupment regulations, according to Nelson Toye, the Deputy Chief Financial Officer for DoD, the substance of the regulations must come from directives of the Assistant Secretary of Defense for Force Management Policy, in this case, Korb. After the Korb memo DFAS amended existing recoup- ment regulations, in pertinent part, as follows: Reasons for Recoupment. For purposes of recoupment of any unearned portions of enlistment or reenlistment bonuses, the term “who voluntarily or because of mis- conduct” includes (but is not limited to) members sepa- rated for the reasons listed below: A. Transfer to Fleet Reserve, Fleet Marine Corps Re- serve, or the Army or Air Force Reserve ... with release In other words, the category of separation under which a member was separated provides the proper point of entry into paragraph 090403 when making the recoupment determination. Def’s Opp. and Reply App. at 95-96. 14a to inactive duty before expiration of the number of years’ service for which a bonus was paid. B. Marriage--female member. C. Resignation-separation by reason of acceptance of member’s resignation .... D. As a result of a writ of habeas corpus E. Reduction to permanent grade member voluntarily separated, or transferred to a Reserve Component if re- quired by law, following reduction to a lower perma- nent grade from a higher temporary grade in which the member was erroneously reenlisted. F. Disability not in the line of duty. G. Approved sentence of court-martial or conviction by a civil court. H. Misconduct. I. Homosexuality J. Defective enlistment (includes erroneous and fraudulent enlistments). K. Entry level performance and conduct. L. Unsatisfactory Performance. M. Drug and alcohol rehabilitation failure. N. As Directed by the Secretary of the Military Service concermed in individual cases. Includes ... for the con- venience of the government upon the application and interest of the member because of special or unusual circumstances including, but not limited to, the follow- ing: 4. Sole surviving family member. 6. Overweight/obesity or lack of physical fitness. 15a DoDPM 4 10942.'? This new version of the recoupment regulation was intended to “incorporate[ ] the contents of the [Korb] memorandum of 13 April 1983.” Def.’s Suppl. App. at 39. The Korb memo was followed in March 1992 by a memo from Assistant Secretary of Defense Christopher Jehn. Jehn directed the creation of a new separation category for “weight control failure.” He also directed that this category be treated the same for benefit eligibility purposes as separa- tion for “drug and alcohol abuse rehabilitation failure.” '* Pursuant to the Korb memo, the services had been directed to recoup from members separated for drug or alcohol abuse failure. The FMR provisions with respect to recoupment have not been amended in light of the Jehn memo. The preamble to the FMR provision refers to reasons for separation, and the ones listed are very similar to comparable categories of separation. In one notable respect, however, there is a difference. Subdivision N of J 090403 references separations for the “convenience of the government,” but refers to the “application and interest of the member” and lists, among other convenience separations, “over- weight/obesity or physical fitness.” § 090403(N)(6). This gives rise to plaintiffs’ argument that the services could only '’ Paragraph 10942 of the DoDPM was renumbered as q 090403 when the FMR was created. '* The Jehn memo provides, in pertinent part, as follows: To resolve the disparity among Service separation policies and to provide for more equitable treatment of our members, I am es- ' tablishing a new separation category in DoDD 1332.14, called “Weight Control Failure.” When the sole reason for separation is failure to meet weight standards and the member’s performance and conduct otherwise comport with established standards, the member will be separated under this category. This category is similar to existing categories of separation for Drug and Alcohol Abuse Rehabilitation Failure and will be treated similarly for bene- fit eligibility. 16a recoup pursuant to subdivision N and only from individuals who requested separation. During the relevant time only the Army and the Navy used the separation category “for the convenience of the government” for members who failed to meet weight or physical fitness standards. Unlike other convenience separa- tions, those regulations made no provision for members “ap- plying for” or showing an “interest in” separation when the underlying reason was weight control or physical fitness fail- ure. See Navy Personnel Manual, Article 3620200 (15 Aug. 1991); Army Reg. 635-200, Ch. 5, J 5-15 (15 Oct. 1985); Army Reg. 635-200, Ch.2, Section II, Notification Proce- dure, J 2-2 (17 Oct. 1990). Defendant calls attention to the fact that the preamble to the recoupment regulation states that the list is not intended to be exhaustive. It recites that “[T]he term ‘who voluntarily or because of misconduct’ includes (but is not limited to) members separated for the reasons listed below ....” { 090403. In response to the court’s request for supplemental brief- ing, defendant filed the Nelson Toye affidavit addressed to the apparent inconsistency between the separation categories developed in response to DoD Directive 1332.14 and the list of separation categories in J 090403 of the FMR. In his affi- davit, Nelson Toye acknowledges that the FMR may be a less-than-faithful rendition of the Korb and Jehn memos, but he emphasizes that the FMR does not have the authority to deviate from the substance of the Korb and Jehn memos. It would be beyond the purview of DFAS to write them in that way. Its function is purely that of codifier. Defendant fur- nishes the relevant delegations to illustrate the respective dif- ferences of authority between DFAS and the Assistant Sec- retaries of Defense (for Manpower, Reserve Affairs, and Lo- 17a gistics as of 1983; for Force Management and Personnel as of 1992). It is undisputed that the services have, without exception, applied the FMR in a manner consistent with the govern- ment’s explanation, i.e., they have not limited recoupment to personnel discharged for the convenience of the government, nor have they conditioned recoupment on “the application and interest of the member,” even for discharges for the con- venience of the government. Moreover, they have imposed limitations on recoupment that are consistent with DoD’s po- sition that most weight control or physical fitness failures are volitional, i.e., recoupment did not occur until an opportunity for improvement was afforded and there was no recoupment if there were medical reasons for failure. DISCUSSION I. PLAINTIFFS’ BREACH OF CONTRACT CLAIM Count One of the complaint alleges that recoupment breached plaintiffs’ enlistment and/or re-enlistment contracts. Plaintiffs base their contract claim on the following language in their enlistment and re-enlistment documents: “As a mem- ber of the Armed Forces of the United States, I will be: ... (5) Entitled to receive pay, allowances, and other benefits as provided by law and regulation.” D/D Form 4/1, C, 9(a)(5). Plaintiffs claim that recoupment constitutes a failure to pro- vide the pay, allowances, and other benefits as provided by 'S MPAC did not have the authority to “reject” Secretary Korb’s di- rections and thereby establish agency recoupment policy. See DoD Di- rective 5154.13 (Feb. 11, 1980). It was required to refer all “matters re- quiring personnel policy resolution” to the Assistant Secretary of Defense (MRA & L), who, at the time, was Lawrence Korb. Jd. He was the only individual with the authority necessary to change the agency’s recoup- ment policy. The Korb memo is in fact listed as one of the sources in the bibliography to the FMR’s pay provisions. See DoD FMR Vol. 7A, Bib- liography, B-10 (July 1996). 18a law and thus constitutes a breach of their enlistment or reenlistment contracts. The duty to pay the servicemen their bonuses is not con- tractual, however, and the mere reference to the “entitlement to pay, allowances, and other benefits” in their enlistment and/or re-enlistment contracts does not transform it into a duty which, if violated, gives rise to contractual damages. See United States v. Larionoff, 431 U.S. 864, 869, 97 S.Ct. 2150, 53 L.Ed.2d 48 (1977). It is well-established that “a soldier’s entitlement to pay is dependent upon statutory right.” See Bell v. United States, 366 U.S. 393, 401, 81 S.Ct. 1230, 6 L.Ed.2d 365. Count One, in short, fails to state a claim upon > which relief can be granted. See Wyatt v. United States, 2 F.3d 398, 402 (Fed.Cir.1993). The appropriate way to evalu- ate the merits of plaintiffs’ claim is by examining the statu- tory and regulatory provisions. — II. CROSS-MOTIONS FOR SUMMARY JUDGMENT ON COUNT TWO Does DoD’s Interpretation Violate Statutory Provisions? In Count Two plaintiffs contend that the recoupment stat- utes and regulations do not allow for recovery of their bo- nuses. Therefore, recoupment constitutes an illegal exaction, which is grounds for recovery under the Tucker Act. See 28 U.S.C. § 1491(a)(1) (1994 & Supp. V 1999); Eastport S.S. Corp. v. United States, 178 Ct.Cl. 599, 605-606, 372 F.2d 1002 (1967). Plaintiffs’ first argument is that the agency’s practice of recoupment is at odds with the clear meaning of the language of the recoupment statutes themselves. They contend that the failure of a service member to “complete the term of enlist- ment” has obvious reference to the administrative act of separation. In that context, the term “voluntarily” allegedly has a well-established meaning, namely, that the service 19a member has applied for separation.'® Under certain circum- stances not applicable here, the member can indeed request separation and it is common to refer to requested separations as voluntary and non-requested separations as involuntary. Plaintiffs also rely on the dictionary definition of volun- tary: “in a voluntary manner, of one’s own free will.” Web- ster’s Unabridged Dictionary at 2049 (1979). Pointing to the separations themselves, plaintiffs contend that they were clearly not separated “in a voluntary manner.” They were never asked if they agreed to their discharges. Plaintiffs’ definition, however, and indeed their entire approach, begs the question, “Is what voluntary?” It is true that the administrative act of separation itself was not volun- tary in any meaningful way. Indeed defendant has stipulated that it “involuntarily separated plaintiffs.” The term “sepa- ration,” however, is not used in the recoupment provisions. '” The relevant phrase is, “complete the term of enlistment.”'® '° Plaintiffs also argue that the use of “misconduct” as an alternative ground for recoupment means that the term “voluntarily” cannot involve any “conduct.” We disagree. Assuming that the actions and inactions of plaintiffs can be characterized as “conduct,” it does not follow that the alternative grounds for recoupment are inconsistent. “Conduct,” of neces- sity, is a broader concept than “misconduct,” which, in any event has been given special meaning as grounds for separation. See, e.g., Do Directive 1332.14, Pt. 1, | K.1 (a)(1)-(4) (listing the following as reasons for separation for misconduct: minor disciplinary infractions, a pattern of misconduct consisting of (a) discreditable involvement with civil or military authorities or (b) conduct prejudicial to good order and disci- pline, commission of a serious offense, or civilian conviction.). '’ This is what distinguishes the present case from those relied on by plaintiffs which deal with involuntariness in the narrow context of deter- mining whether the court has jurisdiction, which depends in tum, on whether the cessation of pay, i.e. separation, was involuntary. See, e.g., Canonica v. United States, 41 Fed.Cl. 516 (1998); West v. United States, 35 Fed.Cl. 226 (1996); McIntyre v. United States, 30 Fed.Cl. 207 (1993). '® Because we find the statutory language refers to the voluntariness of the underlying behavior and not the act of separation, we respectfully (Footnote continued) 20a The actor in the case of separation is the agency; in the case of non-completion of the term of service, it is the service member. What the government contends is that, because the underlying reasons prompting separation relate to acts of vo- lition and because these actions were known by the service members to lead to separation, the early termination of the enlistment is also voluntary.'” Plaintiffs argue that the statutory language is plain on its face. We disagree. The statutory provisions do not make it clear whether only those who request separation voluntarily come to the end of their enlistment. No part of the phrase “voluntarily ... does not complete the term of enlistment” is defined in this context in the code itself. The language, in short, is susceptible of both parties’ readings, and is thus am- biguous. The DoD is given explicit authority to adopt interpretive regulations, and it has done so. An examination of those regulations would normally be the next step in applying the statutes. As explained above, however, by themselves the regulations are insufficient to understand the agency’s inter- pretation. What has been offered by way of explanation in disagree with the court in /liff v. Schlessinger, 539 F.2d 1275 (10th Cir.1976). '? We recognize, as will be discussed in connection with whether the agency violated its own regulations, that the agency used separation cod- ing as the device to trigger recoupment. This confused the briefing, as did the government’s quixotic insistence that the court should only be con- cerned with separation categories. Fortunately for the government, neither argument is inconsistent with the agency’s interpretation of the term “voluntarily.” The critical initial link in the agency’s practice and expla- nation is that the failure of weight or physical fitness standards, rather than the separation, is seen as volitional. Only as a matter of a¢ininistra- tive shorthand do the recoupment memoranda and regulatiors then clas- sify certain separation codes as subject to recoupment, but only because the agency has already determined that the action or inaction was voli- tional and known to lead to discharge. 2la this case consists of directives relating to separation, memo- randa relating to recoupment, DoD’s financial regulations, and actual agency practice; all knit together by the affidavit of Col. Little. It is only by considering this package that one could discern the relevant unifying interpretation: DoD views a failure to meet weight and fitness standards, under most circumstances, as volitional, and separations resulting there- from mean that the service members “voluntarily” failed to coinplete their term of service. It is immaterial to this view that the service members did not request separation. - Determining whether this interpretation carries out the intent of the statute depends in part on whether the agency view is entitled to any deference. The court’s guidelines in this respect are drawn from Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In general terms, if Congress has not spoken to the question at issue, and there is an “ex- press delegation of authority to the agency to elucidate a spe- cific prov:sion of the statute by regulation,” the court will defer to the agency’s interpretation so long as it is not “arbi- trary, capricious, or manifestly contrary to the statute.” Chevron U.S.A., 467 U.S. at 843-44, 104 S.Ct. 2778. We cannot disturb the Secretary’s construction of the statute “if it reflects a plausible construction of the plain language of the statute and does not otherwise conflict with Congress’ ex- . pressed intent.” Rust v. Sullivan, 500 U.S. 173, 184, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991) (citing Chevron U.S.A., 467 U.S. at 842-43, 104 S.Ct. 2778). Although there has been an express delegation of author- ity here, the issue is clouded by the fact that the agency’s in- terpretation is not artfully expressed. Indeed, one of the plaintiffs’ arguments is that the interpretation offered in the affidavits, which admittedly is consistent with practice, is inconsistent with the FMR. The degree of deference to which less formal expressions of agency interpretation, such as administrative practice, are 22a entitled was addressed recently by the Supreme Court in United States v. Mead Corp., 121 S.Ct. 2164, 2168 (2001). The Court held that “administrative implementation of a par- ticular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was prom- ulgated in the exercise of that authority.” Jd. at 2170-71.One of the indicia of entitlement to deference is the conclusive- ness with which Congress has invested the agency with in- terpretive powers. /d. at 2172.In Mead, the Court found that thé delegation to the United States Customs Service was less than conclusive, and thus its interpretive rulings were not en- titled to the full weight of Chevron deference.” Jd. at 2173- 75. The indicia that the agency’s construction here is entitled to Chevron deference are considerably greater than in Mead. First, the delegation of interpretive regulatory authority here is explicit. Second, the Korb and Jehn memoranda are of considerably more gravitas than the approximately 10,000 annual individual letter rulings of Customs’ 46 regional of- fices. Here, the Assistant Secretary was the delegee for an- nouncing service-wide what DoD’s interpretation of the re- coupment statute would be. Korb’s memorandum instantly bound all the services to a single practice. Although neither memoranda was subject to public notice and comment, that fact does not bar the application of Chevron. Mead, at 2173; see generally 5 U.S.C. § 553(a)(2) (1994) (exceptions to the Administrative Procedure Act for matters “relating to agency management or personnel.”); cf Hamlet, 63 F.3d at 1105 2° Customs’ rulings were, however, potentially entitled to some def- erence under Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), based on the agency’s presumed special expertise. Slip op. at 15. 23a (Fed.Cir.1995) (explaining that unpublished agency regula- tions can be entitled to the force and effect of law). Moreover, the affidavits offered by defendant as evidence of agency practice are more than mere post-hoc rationaliza- tion. See Parker v. OPM, 974 F.2d 164, 166 (Fed.Cir.1992) (refusing to rely on affidavit produced for litigation as evi- dence of long-standing agency practice where there had been no official agency interpretation of the statute); Felzien v. OPM, 930 F.2d 898, 902-03 (1991) (refusing to grant defer- ence to long-standing agency practice of ignoring regula- tion’s language). The practice explained in the affidavits is consistent with the regulations and statutes governing re- coupment and the agency’s interpretation of them. Moreover, the agency’s practice of recoupment for certain types of dis- charges irrespective of “application and interest” has not varied. This is a critical factor to consider in determining whether to assign weight to the agency’s interpretation. See Smiley v. Citibank, 517 U.S. 735, 740, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996) (“To be sure, agency interpretations that are of long standing come before us with a certain credential of reasonableness, since it is rare that error would long per- sist.”); Rosete v. OPM, 48 F.3d 514, 518-19 (1995) (defer- ring to agency’s “consistent, long-standing regulatory inter- pretation of the statute so long as it is reasonable.”’). DoD’s construction is also not inconsistent with the small amount of legislative history on point. The first section of the 1951 Senate Report that accompanied the bill that amended the bonus statutes to provide for recoupment states as fol- lows:”" 2! Plaintiffs argue that the version of the reenlistment bonus statute that was amended in 1951 is “substantially different” from the current reenlistment bonus provision, 37 U.S.C. §§ 308 and 308a. We do not dis- cer any material difference. Compare Career Compensation Act of 1949, Pub.L.81-351, § 207, 63 Stat. 811 (Oct. 12, 1949), with 38 U.S.C. §§ 308 and 308a. 24a The Bureau of the Budget believes that a provision should be added to the bill which would provide for the recoupment of unearned bonus money when separation prior to completion of enlistment takes place if such separation is not due to physical disability incurred in the line of duty or otherwise occasioned by circum- stances beyond the control of the individual. See S.Rep. No. 82-935 (1951), reprinted in 1951 U.S.C.C.A.N. 2464, 2466. (emphasis added). The second section, entitled “Discussion of the Bill,” uses different lan- guage to describe the circumstances for which recoupment would be appropriate. The section states: Another provision of the bill, not heretofore contained in law, permits the recovery of any part of unearned reenlistment bonuses paid where the persons serving in such reenlistment voluntarily, or as a result of their own misconduct, do not complete their term of enlistment. This provision was gdded to the bill at the suggestion of the Bureau of the Budget. Id. at 2465 (emphasis added). The committee’s acknowledg- ment that the provision was added at the suggestion of the Bureau of the Budget suggests that the committee meant to adopt the characterization of voluntariness in the Bureau of Budget’s version, namely, that it refers to volitional behavior. In sum, the agency’s practice and its explanation of the rationale for that practice are fully consistent. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212-13, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988). DoD’s interpretation of the statutory provisions is thus entitled to substantial deference in determining the meaning of the recoupment statutes. An agency’s interpretation of its own regulations must be upheld unless it is “plainly erroneous or inconsistent with the regu- lation.” Martin v. Occupational Safety & Health Review Comm'n, 499 U.S. 144, 150-51, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). To strike down DoD’s interpretation in this cir- cumstance would require us to hold as a matter of law, either 25a that the agency had to treat failure to satisfy weight and fit- ness standards as non-volitional, or that it had to impose a requirement that the subsequent separation be at the service member’s request. Neither holding is dictated by the statu- tory language or by reason.”” The agency’s contrary determi- nations are within the range of reasonable interpretations of ambiguous code provisions.”° Did the Services Violate the Recoupment Regulation? A related but alternative argument plaintiffs make is that "the services can only recoup from service members dis- charged for failure to meet weight or fitness standards under subdivision N of ¥ 090403 of the recoupment regulations, i.e., for the convenience of the government. Moreover, be- cause this subdivision permits recoupment for service mem- bers “upon application and interest,” and because none of the plaintiffs requested their separation, plaintiffs maintain that the FMR was violated. The practice, in short, was inconsis- tent with the literal wording of the regulations, according to ” In construing an analogous code provision dealing with recoup- ment of education costs, the district court in Hensala v. Department of the Air Force, No. C00-01793 WHA, 2001 U.S. Dist. LEXIS 7398 (N.D.Cal. May 25, 2001), found that the circumstances surrounding a service mem- ber’s failure to conceal his homosexuality was conduct calculated to lead to separation. /d, at *28. The court held that there was substantial evi- dence to support the service’s decision that the member had thus “volun- tarily ... fail[ed] to complete the period of active duty ...” as required in the recoupment statute at issue, 10 U.S.C. § 2005(a)(3). Jd. United States v. Gears, 835 F.Supp. 1093, 1095 (N.D.Ind.1993), dealing with the same statute, came to a different result. That case involved a midshipman who was discharged for, among other things, non-compliance with weight standards. Although the court appears to reject the government’s broad reading of the term “voluntary,” it specifically pointed to confusion about the physical standards applicable to Gears and the absence of evidence that Gears knew that his particular weight would result in discharge where he met requirements for maximum percentage of fat. Jd. at 1098- 99. > Accord Scott v. Lehman, Slip Op. at 13-15 (D.S.C. June 23, 1987). 26a plaintiffs. This is a legitimate alternative argument. See Fel- zien, 930 F.2d at 902-03. : According to defendant, the error in the argument lies in the incorrect assumption that DoD can only recoup from members who fail weight or physical fitness standards under subdivision N. It is undisputed that service members failing weight or fitness standards could be separated for reasons other than “convenience of the government.” It was possible to discharge them for unsatisfactory performance, or, later, “weight control failure” or its equivalent. Defendant con- tends, therefore, that recoupment could occur so long as the service member was discharged for any one of the reasons listed in J 090403. We agree. With respect to discharges based on unsatisfactory per- formance, defendant’s construction is telling. Each of the listed categories in § 090403 is in the alternative. It is appar- ent that the references to “Overweight/obesity” or “lack of physical fitness” in subdivision N merely modify or are ex- amples of circumstances in which the service may have dis- charged someone for its own convenience. They cannot rea- sonably be construed to bar recoupment when the separation is characterized in some other way. As to weight control failure, which is not listed as its own separation category, defendant points out that the regulation is not limited to listed categories and that the FMR was, in any event, out of date. It had not been amended in light of the Jehn memo, which had created a separation category called weight control failure and had instructed the services to treat it as equivalent to drug rehabilitation failure for recoupment purposes. We agree with defendant. The Jehn memo is con- trolling,’* and the FMR must be read in its light. This means 4 Similar to the Korb memo, the Jehn memo is entitled to the force and effect of law. See Hamlet, 63 F.3d at 1105. Assistant Secretary Jehn was acting pursuant to authority delegated to him by the Secretary of De- fense when he issued the memorandum. See DoD Directive 5124.2 | F.1 (Footnote continued) 27a that all the categories under which plaintiffs were separated- convenience of the government, weight control failure, and unsatisfactory performance-were covered by the recoupment regulation and thus available as grounds for recoupment. Plaintiffs’ remaining argument is that, with respect only to “convenience” terminations,”> J 090403 adds a require- ment unique to recoupment, namely that the termination had to be the subject of the service member’s application and in- terest. We disagree with plaintiffs’ reading of subdivision N. Weight control failure and lack of physical fitness are among the reasons that one could be discharged for the convenience of the government. Invoking that ground for separation is not contingent upon the “application and interest” of the mem- ber. That is, however, a concept that applies to other types of “convenience of the government” separations, for example, surviving sons or daughters, early release to further educa- tion, or pregnancy or childbirth.”° As defendant points out, reading the “application and in- terest” language as applicable to plaintiffs here would be anomalous in that, during the time weight control failure was (Jan. 26, 1990). The Jehn memo appears to be substantive in that it pro- vides the services with the right to recoup for “weight control failure” without any prerequisite that the service member request separation. Moreover, the language of the Jehn memo is mandatory and does not merely advise the services to take certain action. >> These separations, insofar as they were predicated on weight con- trol or physical fitness failure, stopped after the Jehn memo. **'See Army Reg. 635-200, Ch. 5, Separation for Convenience of the Government, Section III, Surviving Sons or Daughters, | 5-4 (26 June 1996); SECNAVIST 1910.4B, Enlisted Administrative Separations, Per- sonnel Separations, Pt.1, Reasons for Separation, | C, Convenience of the Government, Section 4(a), Early release to further education (29 May 1996); AFI 36-3208, Administrative Separation of Airmen, Ch.3, Volun- tary Separation Prior to Expiration of Term of Service, Section B, Rea- sons for Voluntary Convenience of the Government (COG) Separation, 3.17, Pregnancy or Childbirth (14 Oct. 1994). 28a processed for separation under the “convenience of the gov- ernment” rubric, it was not possible for service members to apply or express their interest to initiate such a separation. The “application and interest” language, in short, merely de- scribes those circumstances where a service member can ap- ply for separation under the category “for the convenience of the government.” It was not intended to nor could it have imposed an additional element of a separation for conven- ience. CONCLUSION The applicable statutory provisions and the FMR leave something to be desired in terms of clarity. Recoupment of plaintiffs’ bonuses did not violate either, however. DoD’s interpretation of the statutory provisions to permit recoup- ment when service members failed weight or physical fitness standards was reasonable. While the FMR recoupment provi- sions are dated, and, on their face, confusing, when read in light of current practice and the binding memoranda of the Assistant Secretaries of Defense, they become coherent. The FMR is not a violation of the statutory provisions nor did agency practice violate the FMR. Accordingly, defendant’s motion to dismiss count I is granted; defendant’s motion for summary judgment as to count II is granted; and plaintiffs’ cross motion for summary judgment is denied. The Clerk is directed to enter judgment accordingly. Costs to each party. 29a APPENDIX C Defense Department Financial Management Regula- tion 090503, provides: Reasons for Recoupment. For purpose of recouping any unearned portions of enlistment, reenlistment, or reten- tion bonuses, the term “who voluntarily or because of misconduct” includes (but is not limited to) members separated for the reasons listed below: A. Transfer to Fleet Reserve, Fleet Marine Corps Re- serve, or the Army or Air Force Reserve ... with release to inactive duty before expiration of the number of years’ service for which a bonus was paid. Retirement for disability is excluded. B. Marriage - female member. C. Resignation-separation by reason of acceptance of member's resignation .... * D. As a result of a writ of habeas corpus. E. Voluntary separation, or transfer to a Reserve Com- ponent, if required by law, following reduction to a lower permanent grade from a higher temporary grade in which the member was erroneously reenlisted. F. Disability not in the line of duty. G. Approved sentence of court-martial or conviction by a civil court. H. Misconduct. I.. Defective enlistment (includes erroneous and fraudulent enlistments). J. Entry level performance and conduct. K. Unsatisfactory performance. L. Drug and alcohol rehabilitation failure. M. As directed by the Secretary of the Military De- partment concerned (or designee) in individual cases. 30a Includes voluntary separation, or transfer to a Reserve Component if required by law; and for the convenience of the government upon the application and interest of the member because of special or unusual circum- stances including, but not limited to, the following: 1. To permit attendance at a civilian school. 2. To permit enlistment in another Military Service. 3. To permit enlistment of aliens in the armed forces of their country. 4. Sole surviving family member. 5. Conscientious objection. 6. Overweight/obesity or lack of physical fitness. 7. Pregnancy. Recoupment is required only where member is voluntarily separated, not when preg- nancy causes loss of qualification in bonus skill. 8. Public office. 9. Parenthood. 10. Personality Disorder. Recoupment is required for administrative discharges. Recoupment is not required when member is medically discharged with a physical disability. EXCEPTIONS: Hardship and dependency separations are considered involuntary for the purposes of this paragraph and do not require recoupment of unearned portions of a bonus. O. Reasons established by Military Departments (rea- sons will be approved by ASD (FMP)). The decision to recoup will be made by DASD (MPP). P. See the cognizant Military Services’ procedural instructions for lists of separation reasons and the corresponding separation program designator (SPD) codes. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1398%3A1. Public record. Not legal advice.