Following petitioner's successful challenge in
Greene v.
McElroy, 360 U. S. 474, of
the revocation of his Government security clearance, he sought to
recover for loss of earnings resulting from such revocation.
Petitioner's claim was based in part upon a 1955 Department of
Defense regulation providing for monetary restitution in cases
where a "final determination" is favorable to a contractor
employee. The Department took the position that petitioner did not
qualify for monetary restitution under that regulation, but offered
to process his case under a 1960 regulation -- issued while
petitioner's claim was being processed -- under which, before
reimbursement would be allowed, an administrative determination had
to be made that petitioner "would be" currently entitled to a
security clearance. Petitioner neither required nor sought access
authorization for classified information in his current employment.
He then brought this action for restitution in the Court of Claims,
but that court refused to pass on the merits pending petitioner's
pursuit of his administrative remedies.
Held:
1. Petitioner was entitled to compensation under the 1955
Department of Defense regulation. Pp.
376 U. S.
160-162.
(a) Petitioner's rights matured under the 1955 regulation. P.
376 U. S.
160.
(b) It would be unjustifiable to give the 1960 regulation
retroactive effect, since that regulation had been issued after
petitioner's claim had been asserted. P.
376 U. S.
160.
(c) The District Court's order on remand voiding all
determinations adverse to petitioner had the effect of reinstating
petitioner's security clearance between the time of his discharge
and the District Court's expungement order, which constituted a
"final" and "favorable" determination within the meaning of the
1955 regulation. Pp.
376 U. S.
160-161.
(d) Petitioner, having established the Government's improper
denial of clearance by failure to provide fair procedures, can
recover under the 1955 regulation "in an equitable amount for any
loss of earnings during the interim resulting directly from a
suspension of clearance" without assuming the additional burden of
showing at
Page 376 U. S. 150
a later time that, if he had been afforded fair procedures, he
would have been able to demonstrate that he was entitled to access
authorization to classified information. P.
376 U. S.
161.
2. Since the right of petitioner to recover under the applicable
regulation does not require a determination of his present
eligibility, administrative remedies under the subsequent
regulation, which would require such a determination, must be
regarded as inappropriate and inadequate, and therefore need not be
exhausted. Pp.
376 U. S.
162-164.
Reversed and remanded.
MR. JUSTICE GOLDBERG delivered the opinion of the Court.
Petitioner, the prevailing party in
Greene v. McElroy,
360 U. S. 474,
comes to this Court for a second time. Prior to April 23, 1953,
petitioner was employed by a private corporation producing
mechanical and electrical parts for military agencies of the United
States. On that date, the corporation discharged him because of the
revocation of his security clearance by the Department of the Navy.
Following his challenge of this revocation, this Court held, in
1959 in
Greene v. McElroy, supra, that,
"in the absence of explicit authorization from either the
President or Congress, the respondents were not empowered to
deprive petitioner of his job in a proceeding in which he was not
afforded the safeguards of confrontation and
cross-examination."
Id., at
360 U. S. 508.
On remand, the District Court, declaring that revocation of
petitioner's security clearance was "not validly authorized,"
ordered that all rulings denying petitioner's security clearance
be
Page 376 U. S. 151
"expunged from all records of the Government of the United
States." [
Footnote 1]
In the interim between the security revocation and the District
Court order, petitioner had found it necessary to take less
remunerative nonsecurity employment. [
Footnote 2] When, after the prolonged litigation, he
obtained judicial relief in 1959, his current employment did not
require and he did not seek access authorization. He then sought
only to recover compensation for the unauthorized governmental
Page 376 U. S. 152
action, and, to that end, shortly after entry of the court
order, formally requested the Department of Defense to provide
monetary restitution for his loss of earnings. Petitioner based his
claim on a 1955 Department of Defense regulation providing that,
where there has been "a final determination . . . favorable to a
contractor employee," the employee will be reimbursed "in an
equitable amount for any loss of earnings during the interim
resulting directly from a suspension of clearance." [
Footnote 3] The Department of Defense refused
to grant restitution under this 1955 regulation, but offered to
consider petitioner's claim under a 1960 regulation [
Footnote 4]
Page 376 U. S. 153
issued after the claim had arisen and had been formally
asserted. Pursuant to the terms of the new regulation, the
Department indicated that, as a condition of monetary restitution,
it would be necessary to have an administrative determination that
he "would be" currently entitled to a security clearance.
Petitioner thereupon instituted the present action in the Court of
Claims to obtain restitution under the terms of the 1955 regulation
and the Fifth Amendment to the Constitution of the United States.
The Court of Claims refused to pass on the merits of petitioner's
claim and, applying the doctrine of exhaustion of administrative
remedies, ordered proceedings "suspended pending pursuit of
administrative remedies [made available] by the Department of
Defense." [
Footnote 5] For the
reasons stated below, we hold that petitioner is entitled to
restitution under the 1955 regulation, and that, under the
circumstances, it was error to remit petitioner to further
administrative proceedings under the 1960 regulation.
I
The facts comprising the background of the present action are
fully set forth in
Greene v. McElroy, supra, at
360 U. S.
476-491, and need only brief restatement here.
Petitioner, an aeronautical engineer, was serving as vice president
and general manager of Engineering and Research Corporation (ERCO),
a private firm producing mechanical
Page 376 U. S. 154
and electrical parts for various agencies of the United States
Armed Services. Petitioner had been employed by ERCO in 1937 and,
except for a brief leave of absence, had continued with the firm.
In connection with this employment, which involved classified work
for the Armed Forces, he had obtained security clearances.
[
Footnote 6] Indeed, before the
revocation of his security clearance, the Industrial Employment
Review Board, on January 29, 1952, had reversed the action of an
inferior board and granted petitioner clearance for secret
governmental contract work.
On April 17, 1953, however, the Secretary of the Navy notified
ERCO that petitioner's "continued access to Navy classified
security information [was] inconsistent with the best interests of
National Security." [
Footnote
7] No hearing preceded this notification. The Secretary further
requested ERCO to exclude petitioner
"from any part of your plants, factories or sites at which
classified Navy projects are being carried out, and to bar him
access to all Navy classified information."
ERCO had no choice but to comply with this request, and so, a
week later, on April 23, 1953, petitioner was discharged.
Petitioner promptly asked the Navy for reconsideration. A year
later, he was given a "hearing" in which he was denied an
opportunity to confront or cross-examine the allegedly adverse
witnesses. On the basis of this proceeding, the appropriate
administrative boards approved the Secretary's revocation of
security clearance.
Page 376 U. S. 155
Petitioner thereupon filed a complaint in the United States
District Court for the District of Columbia asking for appropriate
injunctive relief and a declaration that the revocation was
unlawful and void. The District Court denied relief,
Greene v.
Wilson, 150 F.
Supp. 958, and the Court of Appeals affirmed, 103 U.S.App.D.C.
87, 254 F.2d 944. Then, as noted above, on June 29, 1959, this
Court, reversing the decisions below, held that,
"in the absence of explicit authorization from either the
President or Congress, the respondents were not empowered to
deprive petitioner of his job in a proceeding in which he was not
afforded the safeguards of confrontation and
cross-examination."
Greene v. McElroy, supra, at
360 U. S. 508.
On remand, the District Court, on December 14, 1959, with the
consent of the Government, entered a final order declaring: (1)
"that the action of the Secretary of Defense and his subordinates
in finally revoking plaintiff's security clearance was . . . not
validly authorized," and (2) "that any or all rulings, orders, or
determinations wherein or whereby plaintiff's security clearance
was revoked are hereby annulled and expunged from all records of
the Government of the United States." [
Footnote 8]
Following issuance of this order, petitioner initiated the
administrative and legal steps immediately leading to the present
action. His current employment did not require, and he did not seek
an opportunity to obtain, current access authorization for
classified information; indeed, he plainly says that he does not
now "need or want" such authorization. His sole objective is to
obtain compensation for the governmental action held by this Court
not to have been validly authorized. On December 28, 1959, he made
a formal demand of the General Counsel of the Department of the
Navy
"for monetary restitution from the Department of the Navy and/or
the Department of
Page 376 U. S. 156
Defense pursuant to Section 26 of the Industrial Personnel
Security Review Regulation, 20 Fed.Reg. 1553."
This regulation, issued in 1955, provides as follows:
"In cases where a final determination is favorable to a
contractor employee, the department whose activity originally
forwarded the case to the Director will reimburse the contractor
employee in an equitable amount for any loss of earnings during the
interim resulting directly from a suspension of clearance.
[
Footnote 9]"
The General Counsel of the Department of the Navy acknowledged
the demand and requested that certain dates and financial data be
supplied. A statement of petitioner's legal position respecting the
applicability of the regulation was also requested. On April 20,
1960, he supplied the General Counsel of the Department of the Navy
with the requested information and statement of legal position.
[
Footnote 10]
While petitioner's claim was thus being processed, the Secretary
of Defense, on July 28, 1960, issued a new Industrial Personnel
Access Authorization Review Regulation, a regulation superseding in
pertinent part the 1955 regulation under which petitioner had
claimed compensation. [
Footnote
11] The language of the new "monetary restitution" provision
clearly indicates that the 1955 regulation had been significantly
and substantially altered. Thus, instead of simply providing, as
the earlier regulation did, that, upon "a final determination . . .
favorable to a contractor employee," the Government shall provide
compensation for the loss of earnings, the 1960 regulation,
inter alia,
Page 376 U. S. 157
(1) subjects the claimant's recovery to administrative
discretion; (2) requires that, "at a later time," the claimant
qualify to receive a security clearance equivalent to that
originally held or sought; (3) requires that the "favorable
determination" be a favorable "administrative" determination; and
(4) requires that the contrary determination had been
"unjustified."
On January 4, 1961, petitioner was advised that his claim had
been forwarded to the Director of the Office of Security Policy of
the Department of Defense for final determination. Petitioner then,
in a letter addressed to the Director, reiterated his claim and
stated that he was entitled to restitution under the 1955
regulation. After further communication, the Director advised
petitioner that the Department of Defense was prepared to consider
his case under the newly issued 1960 regulation, and
"to take such action as may be necessary to reach a final
determination as to whether it is in the national interest to grant
him an authorization for access to classified information."
On March 2, 1961, petitioner again submitted a statement of his
legal position concerning the applicability of the 1955 regulation,
and again pointed out that he had no occasion to require and,
therefore, was not seeking, current security clearance. He
expressly declined to request consideration of his case under the
1960 regulation. The Director responded by reemphasizing the
Department's
"willingness to process the question of Mr. Greene's current
eligibility for access authorization under the provisions of the
1960 Review Regulation."
Finally, on June 1, 1961, nearly a year and a half after this
Court's decision and petitioner's request for compensation, the
Deputy General Counsel of the Department of Navy advised petitioner
that,
"[i]n accordance with Department of Defense policy, it has been
determined by the Department of Defense that Mr. Greene does not
qualify for monetary restitution under the provisions"
of
Page 376 U. S. 158
the 1955 regulation. This conclusion was coupled with another
expression of the Defense Department's willingness "to undertake
the processing of his case under the July 28, 1960 Review
Regulation. . . ."
Petitioner then commenced the present action in the Court of
Claims, alleging that he was entitled to monetary restitution
"in an amount equal to the salary or pay which he would have
earned at the rate he was receiving on the date of his suspension
from employment by ERCO less his earnings from other
employment."
Petitioner based his claim on the 1955 regulation and the Just
Compensation Clause of the Fifth Amendment to the Constitution. The
Government moved
"to suspend proceedings in this case pending plaintiff's pursuit
and completion of the administrative remedy available to him in the
Department of Defense."
Petitioner responded reasserting that the "July 28, 1960 Review
Regulation has no application to [this] claim for monetary
restitution . . . "; that his current employment did not require,
and that he did not seek or desire, access authorization; and,
therefore, that he was "not bound to exhaust any remedies under the
July 28, 1960 Review Regulation before making such claim or
bringing this suit." The Commissioner of the Court of Claims
sustained the Government's position by ordering "further
proceedings . . . suspended pending pursuit of administrative
remedies [made available] by the Department of Defense." [
Footnote 12] The Court of Claims
subsequently denied petitioner's request for review, and this Court
granted certiorari, 372 U.S. 974.
II
Petitioner contends that his right to monetary restitution must
be determined under the 1955 regulation. This
Page 376 U. S. 159
regulation provides that governmental liability follows from "a
final determination . . . favorable to a contractor employee."
Petitioner concludes that this Court's decision in
Greene v.
McElroy, supra, and the District Court order constitute the
only final and favorable determination required by the 1955
regulation. He maintains that the judicial order expunging adverse
determinations reinstated in effect the security clearance of
January 1952 -- "at least for the period between petitioner's
discharge on April 23, 1953, and the expungement order of December
14, 1959." Furthermore, petitioner argues, when, in
Greene v.
McElroy, this Court held unauthorized the revocation of
security clearance, an act that deprived petitioner of his job, he
became entitled as a matter of right to recover damages resulting
from the loss of that employment.
The Government responds that the 1960, rather than the 1955,
regulation applies, and that, pursuant to the 1960 regulation,
petitioner must establish as a condition of recovery that he now
"would be" currently entitled to a security clearance.
Alternatively, [
Footnote 13]
assuming the 1955 regulation governs, the Government contends that,
before restitution is allowed, there must be
"a further showing at the administrative level that the
challenged revocation of access authorization was not only
procedurally incorrect, but substantively wrong."
Specifically, the Government states, to meet the requirements of
the 1955 regulation, petitioner
"must at least show that he was entitled to clearance during the
period for which he claims damages by reason of the denial of
clearance."
Finally, the Government argues, even if the 1955 regulation is
applicable, petitioner must exhaust the possibility
Page 376 U. S. 160
of recovery in administrative proceedings under the 1960
regulation.
Whatever petitioner's rights are, there can be no doubt they
matured and were asserted under the 1955 directive. Not until six
months after petitioner formally presented his claim to the
Department of Defense did the Secretary of Defense issue a new, and
substantially revised, regulation concerning "monetary
restitution." Thus, the Government's argument necessarily requires
that the 1960 regulation be given retroactive application. As the
Court said in
Union Pac. R. Co. v. Laramie Stock Yards
Co., 231 U. S. 190,
231 U. S.
199,
"the first rule of construction is that legislation must be
considered as addressed to the future, not to the past . . . [and]
a retrospective operation will not be given to a statute which
interferes with antecedent rights . . . unless such be 'the
unequivocal and inflexible import of the terms, and the manifest
intention of the legislature.' [
Footnote 14]"
Since regulations of the type involved in this case are to be
viewed as if they were statutes, this "first rule" of statutory
construction appropriately applies and under the circumstances, it
would be unjustifiable to give the 1960 regulation retroactive
effect.
Our interpretation of the 1955 regulation makes it clear that
petitioner has obtained the requisite final, favorable
determination. In
Greene v. McElroy, supra, this Court
held that the Government had acted without authority in denying
petitioner security clearance without providing the traditional
safeguards of confrontation and cross-examination. On remand, and
with the consent of the Government, the District Court entered the
order voiding and expunging all determinations adverse to
petitioner. As a result of the judicial action, and in the absence
of intervening administrative proceedings, the only legally
Page 376 U. S. 161
cognizable administrative determination -- for the period
between petitioner's 1953 discharge and the 1959 expungement order
-- was the January, 1952, ruling granting petitioner security
clearance. Thus, the final judicial order effectively reinstated
the last valid administrative determination, a determination which
had been substantively favorable to petitioner. By virtue of the
District Court order, therefore, petitioner must be regarded as
having obtained, for the period between the discharge and the
judicial mandate, a "final" and "favorable" determination.
Furthermore, we read the applicable regulation as equitably
designed [
Footnote 15] to
compensate employees whose security clearance has been improperly
or wrongly denied. The directive's language does not reasonably
warrant the implication that a claimant, who has sustained the
burden of demonstrating that the Government acted without authority
in revoking his clearance without fair procedures, must take on the
additional burden of showing at a later time that, if he had been
afforded fair procedures in the first instance, he would have been
able to demonstrate successfully that he was entitled to access
authorization. On the contrary, the regulation should be
interpreted to mean that, where a claimant establishes that the
Government has improperly denied clearance by its failure to
provide fair procedures, the Government is liable and petitioner is
entitled to recover "in an equitable amount for any loss of
earnings during the interim resulting directly from a suspension of
clearance." [
Footnote
16]
Page 376 U. S. 162
In a case such as the present, where the Government has acted
without authority in causing the discharge of an employee without
providing adequate procedural safeguards, we should be reluctant to
conclude that a regulation not explicitly so requiring conditions
restitution on a retrospective determination of the validity of the
substantive reasons for the Government action -- reasons which the
employee was not afforded an adequate opportunity to meet or rebut
at the time of his discharge. This principle is analogous to that
reflected in state court decisions recognizing that
"a private association's failure to afford procedural safeguards
may result in the imposition of damage liability without inquiry
into whether the association's action lacked substantive basis. . .
."
See authorities cited in
Silver v. New York Stock
Exchange, 373 U. S. 341,
373 U. S. 365,
n. 18.
Having determined that petitioner was entitled to compensation
under the 1955 regulation, we must consider whether it was proper,
as the Government contends here and the Court of Claims held, to
remit petitioner to further administrative proceedings under the
1960 regulation.
The Department of Defense, after considering petitioner's claim
for nearly a year and a half following this Court's decision in
Greene v. McElroy, supra, specifically determined that
"Mr. Greene does not qualify for monetary restitution under the
provisions" of the 1955 regulation. Petitioner's legitimate claim
thus having been presented and rejected, there can be no doubt that
he had exhausted the reasonable possibility of administrative
proceedings under the applicable regulation. The Government argues
in effect, however, that the claim could be administratively
processed, and petitioner possibly could recover under the 1960
regulation, and that, by failing to resort to proceedings under the
newly issued regulation,
Page 376 U. S. 163
petitioner thereby failed to exhaust all available
administrative remedies.
The Department of Defense had clearly declared that, in the
course of applying the 1960 regulation, it would necessarily
"process the question of Mr. Greene's current eligibility for
access authorization. . . ." As we have indicated, however,
petitioner, who had to find nonsecurity employment as a result of
the 1953 clearance revocation, does not now require and is not
seeking current access authorization. Therefore, an administrative
review of his present eligibility is wholly irrelevant to a
determination of his damages under the 1955 regulation. In view of
the substantial differences between the two regulations, and in
view of the additional factual determinations that would be
relevant under the 1960 regulation but irrelevant under the 1955
regulation, we conclude the 1960 regulation does not provide a
reasonable basis for reviewing petitioner's rights under the 1955
regulation. We do not suggest that a claimant, seeking damages
under a former regulation, need not resort to administrative
proceedings under a new regulation where the new regulation
contains essentially the same substantive requirements as its
predecessor. Since, in this case, the only available administrative
procedure entailed the burden of presenting the claim under an
inapplicable and substantially revised [
Footnote 17] regulation, that procedure must be
regarded as inappropriate and inadequate, and therefore need not be
pursued. [
Footnote 18] It
follows that petitioner, having exhausted administrative
proceedings under the applicable 1955
Page 376 U. S. 164
regulation, properly resorted to the Court of Claims which
Congress has invested with jurisdiction to entertain claims
asserted against the United States and founded upon "any regulation
of an executive department." 28 U.S.C. § 1491.
In summary, then, we hold that petitioner was entitled as a
matter of right to compensation under the 1955 regulation,
[
Footnote 19] and that, when
the Department of Defense rejected his claim under that regulation,
he was not required to proceed administratively under the newly
issued 1960 regulation. In so holding, we do not suggest that, if
petitioner were now seeking access to security-classified
information, he would be entitled to have his clearance
qualifications judged by other than current regulations. But all he
seeks are damages for the Government's unauthorized action, and to
this much, we hold, he is certainly entitled.
Accordingly, the judgment of the Court of Claims is reversed and
the case remanded to that court for a determination of the amount
of restitution due petitioner.
Reversed and remanded.
[
Footnote 1]
The text of the District Court order, dated December 14, 1959,
is as follows:
"Upon the decision of the United States Supreme Court in this
case (
Greene v. McElroy, 360 U. S. 474) and the copy of
the judgment and opinion of the Supreme Court heretofore filed with
the clerk of this Court; and"
"It appearing that counsel for the respective parties have
consented hereto, it is hereby"
"ORDERED that the action of the Secretary of Defense and his
subordinates in finally revoking plaintiff's security clearance was
and the same is hereby declared to be not validly authorized; and
it is further"
"ORDERED that any or all rulings, orders, or determinations
wherein or whereby plaintiff's security clearance was revoked are
hereby annulled and expunged from all records of the Government of
the United States."
[
Footnote 2]
In the prior litigation, this Court noted that the Court of
Appeals had concluded:
"We have no doubt that Greene has, in fact, been injured. He was
forced out of a job that paid him $18,000 per year. He has since
been reduced, so far as this record shows, to working as an
architectural draftsman at a salary of some $4,400 per year.
Further, as an aeronautical engineer of considerable experience he
says (without real contradiction) that he is effectively barred
from pursuit of many aspects of his profession, given the current
dependence of most phases of the aircraft industry on Defense
Department contracts not only for production, but for research and
development work as well. . . . Nor do we doubt that, following the
Government's action, some stigma, in greater or lesser degree, has
attached to Greene."
360 U. S. 360 U.S.
474,
360 U. S. 491,
n. 21, quoting 103 U.S.App.D.C. 87, 95-96, 254 F.2d 944,
952-953.
[
Footnote 3]
The pertinent regulation is Paragraph 26, Department of Defense
Directive 5220.6, 20 Fed.Reg. 1553, dated February 2, 1955:
"
Monetary Restitution. In cases where a final
determination is favorable to a contractor employee, the department
whose activity originally forwarded the case to the Director will
reimburse the contractor employee in an equitable amount of any
loss of earnings during the interim resulting directly from a
suspension of clearance. Such amount shall not exceed the
difference between the amount the contractor employee would have
earned at the rate he was receiving on the date of suspension and
the amount of his interim net earnings. No contractor employee
shall be compensated for any increase in his loss of earnings
caused by his voluntary action in unduly delaying the processing of
his case under this part."
[
Footnote 4]
The July 28, 1960, regulation (Department of Defense Directive
5220.6, 25 Fed.Reg. 7523), issued pursuant to an Executive Order of
February 20, 1960 (Exec.Order No. 10865, 25 Fed.Reg. 1583),
contains the following provision for "monetary restitution":
"If an applicant suffers a loss of earnings resulting directly
from a suspension, revocation, or denial of his access
authorization, and at a later time a final administrative
determination is made that the granting to him of an access
authorization at least equivalent to that which was suspended,
revoked or denied, would be clearly consistent with the national
interest and it is determined by the board making a final favorable
determination that the administrative determination which resulted
in the loss of earnings was unjustified, reimbursement of such loss
of earnings may be allowed in an amount which shall not exceed the
difference between the amount the applicant would have earned at
the rate he was receiving on the date of suspension, revocation, or
denial of his access authorization and the amount of his interim
net earnings."
[
Footnote 5]
The order declared that:
"In view of the action this day by the court in
Stephen L.
Kreznar v. The United States, No. 47-60, and
Novera
Herbert Spector v. The United States, No. 48-60, further
proceedings herein are hereby suspended pending pursuit of
administrative remedies [made available] by the Department of
Defense."
The cases cited are now pending in this Court on petition for a
writ of certiorari, No. 85, this Term.
[
Footnote 6]
See Greene v. McElroy, supra, at
360 U. S. 476,
n. 1:
"Petitioner was given a Confidential clearance by the Army on
August 9, 1949, a Top Secret clearance by the Assistant Chief of
Staff G-2, Military District of Washington on November 9, 1949, and
a Top Secret clearance by the Air Material Command on February 3,
1950."
[
Footnote 7]
At the time the Secretary acted, the administrative boards that
had reviewed petitioner's earlier clearance had been abolished.
See Greene v. McElroy, supra, at
360 U. S.
480-483.
[
Footnote 8]
The full text of the order is set forth in
note 1 supra.
[
Footnote 9]
See note 3
supra.
[
Footnote 10]
Petitioner stated that he had incurred a $49,960.41 loss of
earnings from April 23, 1953, the date of his dismissal, to
December 31, 1959.
[
Footnote 11]
The text of the new provision is set forth in
note 4 supra.
[
Footnote 12]
The text of the order is set forth in
note 5 supra.
[
Footnote 13]
Although petitioner asserts that the Government, in this Court,
in effect concedes that the 1955 regulation must govern, we
understand the Government to have framed alternative arguments,
rather than to have made such a concession.
[
Footnote 14]
See, e.g., Claridge Apartments Co. v. Commissioner,
323 U. S. 141,
323 U. S. 164;
Smead, The Rule Against Retroactive Legislation: A Basic Principle
of Jurisprudence, 20 Minn.L.Rev. 775-781 (1936).
[
Footnote 15]
The purpose of insuring "equity and justice" is reflected by the
testimony in Hearings before the Subcommittee on Department of
Defense Appropriations of the House Committee on Appropriations,
84th Cong., 1st Sess., pp. 774-781.
[
Footnote 16]
The "interim resulting" would, we believe, in this case extend
from petitioner's discharge in 1953 to issuance of the District
Court order expunging the revocation of security clearance.
[
Footnote 17]
See supra, pp.
376 U. S. 156-157.
[
Footnote 18]
See, e.g., Skinner & Eddy Corp. v. United States,
249 U. S. 557,
249 U. S.
562-563;
Smith v. Illinois Bell Tel. Co.,
270 U. S. 587,
270 U. S. 591;
Township of Hillsborough v. Cromwell, 326 U.
S. 620,
320 U. S.
625-626; 3 Davis, Administrative Law Treatise (1958), §
20.07; Jaffe, The Exhaustion of Administrative Remedies, 12
Buff.L.Rev. 327, 329-331 (1963).
[
Footnote 19]
Since we remand the cause to the Court of Claims to fix the
amount of compensation, we need not and do not pass on petitioner's
claim under the Just Compensation Clause of the Fifth
Amendment.
MR. JUSTICE HARLAN, whom MR. JUSTICE WHITE joins,
dissenting.
Once unraveled, this case presents a single simple issue, the
answer to which is, in my opinion, very clear.
Whatever the Government's position earlier, it has now conceded
that the petitioner's claim arises under and is to be settled in
accordance with the 1955 regulation. In particular, the
Government's brief states that "in light of the fact that
petitioner's claim was initially filed under the 1955 regulation,"
the Department of Defense would
Page 376 U. S. 165
not require him to show that the revocation of his clearance was
substantively unjustified when ordered. Brief, page 14.
All that is left in this case, therefore, is a question
concerning the proper construction of the 1955 regulation, which
authorizes monetary restitution only "in cases where a final
determination is favorable to a contractor employee. . . ."
Department of Defense Directive 5220.6, 20 Fed.Reg. 1553, 1559. The
Government's position is that the quoted language conditions
restitution on "a restoration of eligibility for access to
classified information." Combined with the disclaimer above, this
evidently means that the Government does intend to insist that
petitioner show his present eligibility for clearance, but not that
he show his eligibility at the time clearance was revoked. The
petitioner contends that this Court's decision in 1959,
360 U. S. 360 U.S.
474, invalidating the revocation of his clearance for procedural
defects constitutes the favorable "final determination" required
under the 1955 regulation.
It is evident that most of the Court's opinion has nothing to do
with this issue. There is no reason to consider whether the
petitioner could properly be remitted "to further administrative
proceedings under the 1960 regulation" (
ante, p.
376 U. S.
153), or whether the 1960 regulation provides "a
reasonable basis for reviewing petitioner's rights under the 1955
regulation" (
ante, p.
376 U. S.
163). Nor is it necessary to consider what the
Department of Defense would require were it applying the 1960
regulation. Finally, the propriety of requiring the petitioner to
show his acceptability for clearance in 1953 is not in issue, since
no one is seeking to impose that requirement.
On the relevant issue, both of the Court's distinct explanations
for its conclusion are unsatisfying. The first explanation is that
the order of the District Court which expunged all adverse
determinations left the petitioner's
Page 376 U. S. 166
prior clearance as "the only legally cognizable administrative
determination" (
ante, pp.
376 U. S.
160-161). Therefore, the Court concludes, the District
Court's order "must" be regarded as a "final" and "favorable"
determination. But the conclusion is hardly compelled by the
premises. Quite obviously, the order of neither this Court nor the
District Court constituted a security clearance, which one would
have thought to be the kind of final, favorable determination
contemplated by the regulation. [
Footnote 2/1] There is certainly no inevitable logic
which compels one to regard an order wiping out previously
unfavorable rulings and leaving temporarily intact an initial
favorable ruling as a final favorable determination; with at least
equal logic, the situation could be regarded as one in which there
has been no final determination.
The other explanation offered by the Court is even less
satisfactory. The fact that the petitioner is not interested in
present clearance does
not ipso facto make his present
eligibility "wholly irrelevant to a determination of his damages
under the 1955 regulation" (
ante, p.
376 U. S.
163). The question is what the 1955 regulation requires,
and the petitioner's needs and desires have little relevance to
that question, if indeed they have any relevance at all.
The nub of this case is that the 1955 regulation almost
certainly was not framed with the present situation in mind. The
difficulties of applying a regulation meant to apply to situations
involving a limited number of procedural steps to an administrative
action taken in 1953 which evoked an unfavorable judicial response
in 1959 and has led to further administrative and judicial
proceedings
Page 376 U. S. 167
still not terminated in 1964, have not unnaturally led both
sides to take positions which are not clearly justified by the
regulation. It may well be that the Department of Defense should,
and perhaps could, not reasonably apply the requirement of present
eligibility, sensible and certainly contemplated in the ordinary
situation, to this case, where the present is so far removed from
the relevant past and where current eligibility is no longer an
issue. On the other hand, it is by no means obvious that a
procedural default in the revocation of clearance automatically
entitles the petitioner to restitution. The Government's liability
depends on the infliction of actual harm, and not simply on the
commission of an error of law. [
Footnote 2/2]
The controlling point in the present posture of these
proceedings is that the petitioner has not brought himself under
the governing regulation as it is now construed by the department
charged with its application. Well accepted rules governing
judicial review of administrative decisions require that the courts
not intervene at this stage. [
Footnote
2/3]
See Myers v. Bethlehem Shipbuilding Corp.,
303 U. S. 41;
Aircraft & Diesel
Equipment Corp. v. Hirsch,
Page 376 U. S. 168
331 U. S. 752,
331 U. S.
767-768. [
Footnote 2/4]
It may be that if the petitioner followed the administrative path
still open to him, he would be found entitled to all that he
demands under the department's construction of the regulation. Or
it may be that, in the context of actual proceedings, the
department would modify its interpretation of the regulation. This
might obviate the need for an interpretation by this Court, and
would, in any event, give assurance that those most concerned and
informed about the regulation had been afforded an opportunity to
adjust the various interests involved in this case.
The Court's short-circuiting of controlling principles is
needless and unwise. I would remit the petitioner to his
administrative remedy.
[
Footnote 2/1]
As was pointed out in my opinion concurring in the 1959
decision, there was "nothing in the Court's opinion which suggests
that petitioner must be given access to classified material." 360
U.S. at
360 U. S.
510.
[
Footnote 2/2]
Silver v. New York Stock Exchange, 373 U.
S. 341, cited,
ante, p.
376 U. S. 162,
but apparently not relied on by the Court, is, of course, far
afield. That case decided that the Stock Exchange had committed
acts which were violative of the antitrust laws and which were not
insulated from illegality by the Securities Exchange Act. The
plaintiff was suing a private defendant under the antitrust laws to
recover actual damages.
[
Footnote 2/3]
Since the majority holds that the petitioner was entitled to
present his claim in the Court of Claims and that the claim is
valid, it would be inappropriate for me to consider whether, under
my view of the case, the proper course would have been direct
dismissal for want of jurisdiction; an answer to that question
would require a consideration of the petitioner's constitutional
claims, not reached by the majority.
See 28 U.S.C. §
1491.
[
Footnote 2/4]
Professor Davis states that
"probably every court requires exhaustion [of administrative
remedies] when the question presented is one within the agency's
specialization and when the administrative remedy is as likely as
the judicial remedy to provide the wanted relief."
3 Administrative Law 56-57. Those conditions are met in this
case.