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SCHWARTZ v. SECRETARY OF THE TREASURY

October 5, 1973

Charles J. SCHWARTZ, Plaintiff,
v.
SECRETARY OF the TREASURY et al., Defendants


Flannery, District Judge.


The opinion of the court was delivered by: FLANNERY

FLANNERY, District Judge.

 Plaintiff, Charles J. Schwartz, seeks a declaratory judgment and mandatory injunction against defendants, the Secretary of the Treasury, the Commissioner of Internal Revenue, and the Chairman and Commissioners of the United States Civil Service Commission, fixing, declaring and determining his right as a Veterans' Preference civil service employee of the United States to be restored to the position in the Brooklyn, New York office of the Internal Revenue Service from which he was suspended on December 9, 1964, and removed on January 8, 1965.

 Plaintiff and defendants each filed Motions for Summary Judgment, and defendants filed a Motion to Dismiss in the alternative. Both parties advised the Court that there is no genuine issue as to any material fact and submitted statements pursuant to Local Rule 9(h). The Court has considered the transcript of the administrative proceedings and the memoranda submitted in support of these motions and in opposition thereto and has concluded that there are no genuine issues of fact that require a trial on the merits, that plaintiff's Motion for Summary Judgment should be granted, and that defendants' Motion for Summary Judgment and Motion to Dismiss should be denied for the reasons set forth below.

 Charles J. Schwartz, the plaintiff in this action, entered the service of his country during the Second World War as a combat infantryman. Although seriously wounded in Normandy, he was returned to combat duty until he was honorably discharged in 1945. For a period of 15 years prior to December, 1964, plaintiff was a Veterans' Preference civil service employee of the United States employed by the Internal Revenue Service as an Internal Revenue Agent. In 1964, Albert Goldstein, an accountant-lawyer in New York City, informed the United States Attorney for the Southern District of New York that he personally had paid cash bribes to a number of Internal Revenue Agents, including plaintiff, in return for favorable audits of his clients' tax returns. On or about November 22, 1964, plaintiff was escorted from his office by two Internal Revenue Service Inspectors to the United States Attorney's Office in New York. An Assistant United States Attorney informed plaintiff that he was charged with a serious crime and he was then confronted by Goldstein, his accuser. That same day plaintiff consulted with his attorney, who was at the time involved in other litigation. Plaintiff was advised not to answer any questions until his attorney was free to accompany him. On the following day, November 23, 1964, a criminal complaint was filed against plaintiff in the Southern District of New York. Also on November 23, 1964, plaintiff was questioned by two Internal Revenue Service Inspectors in the absence of his attorney concerning his connections with Goldstein. At this interview plaintiff was advised of his Fifth Amendment right to remain silent and when asked whether he had received any money from Goldstein, plaintiff refused to answer because "[this] goes to the crux of the whole matter, the original accusation . . . and I feel . . . consultation for legal advice is necessary." Transcript of Administrative Proceedings, at 307. At all subsequent stages of the administrative proceedings plaintiff had the benefit of counsel and unequivocally affirmed his innocence.

 On December 1, 1964, plaintiff received a written Notice of Proposed Adverse Action -- a notice of both suspension and removal -- based on two charges, one involving the acceptance of a bribe, the second concerning the failure to report the offer of a bribe. *fn1" Plaintiff was suspended for a period of 30 days beginning on December 9, 1964, and removed on January 8, 1965. Plaintiff appealed his removal to the Civil Service Commission Regional Office in New York, but all action on that appeal was suspended pending disposal of the criminal charges against him. An indictment was returned against plaintiff in October, 1965, which remained pending until the government filed a nolle prosequi on June 14, 1968. In the last two months of 1968, a hearing was held on plaintiff's administrative appeal. His suspension and removal were affirmed and plaintiff again appealed, this time to the Civil Service Commission Board of Appeals and Review. On August 25, 1969, almost five years after plaintiff had received a Notice of Proposed Adverse Action, the Board sustained his removal. Being without the necessary financial means to bring an action in this Court, plaintiff appealed to his union to prosecute this action on his behalf, which it finally agreed to do two and a half years later.

 This Court has jurisdiction of this action under 28 U.S.C. § 1331 and is empowered to render a declaratory judgment herein under the provisions of 28 U.S.C. § 2201. See, e.g., Meehan v. Macy, 129 U.S.App.D.C. 217, 392 F.2d 822 (1968); Weinberg v. Macy, 124 U.S.App.D.C. 1, 360 F.2d 816 (1965); Massman v. Secretary of Housing & Urban Development, 332 F. Supp. 894 (D.D.C.1971). The Court is not impressed by the contentions of the defendants that jurisdiction is exclusively in the United States Court of Claims or that plaintiff has failed to join the proper parties, nor is the Court persuaded that plaintiff's suit is barred by laches. See Powell v. Zuckert, 125 U.S.App.D.C. 55, 366 F.2d 634 (1966).

 The Court recognizes that in employee adverse action litigation such as this, it is engaged in limited review and that its determination is based upon the agency record submitted to it. The function of the Court is to review the record and determine whether there has been procedural error, whether there is substantial evidence to support the agency action, or whether the action is in some manner otherwise arbitrary or capricious. Polcover v. Secretary of the Treasury, 155 U.S. App. D.C. 338, 477 F.2d 1223, 1226, 1227 (D.C.Cir. 1973); see, e.g., Moore v. Administrator, 155 U.S. App. D.C. 14, 475 F.2d 1283 (D.C.Cir. 1973); Adams v. Laird, 136 U.S.App.D.C. 388, 420 F.2d 230 (1969); Mendelson v. Macy, 123 U.S.App.D.C. 43, 356 F.2d 796 (1966).

 
"Finally, we consider significant the appellant's refusal to respond to the questions asked of him by the IRS Inspectors at the interview with him held on November 23, 1964. His refraining from answering questions concerning matters of official interest to competent Treasury authority and directly related to his responsibility as a Revenue Agent does not comport with the actions of a person who considers himself innocent."

 Transcript of Administrative Proceedings, at 53.

 When plaintiff appealed to the Civil Service Commission Board of Appeals and Review, the Board concluded:

 
"With regard to the merits of the case, basically, the question is one of credibility. . . .
 
. . . The Regional Office's reference to the appellant's refusal to respond to IRS official questions was not improper since it was made in connection with the issue of the appellant's credibility. It was right and reasonable for the IRS Inspectors to ask the appellant if he ever received any monies in connection with any audit made by him. Appellant's refusal to answer such questions without the presence of and consultation with counsel does raise a ...

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