The opinion of the court was delivered by: STANLEY S. HARRIS
The individually-named plaintiffs are LG employees who work on the liquidation of failed banks' assets. Plaintiff NTEU is a union that represents over 100,000 government workers. Defendants are the Chairman of the Federal Deposit Insurance Corporation (FDIC) and the Director of the Office of Personnel Management (OPM).
Plaintiffs challenge defendants' decision to designate LG employees as temporary and to exclude their positions from the competitive service. Plaintiffs allege that the OPM's regulation which delegates authority to the FDIC to except LG positions from the competitive service is contrary to law and in violation of the Administrative Procedure Act, 5 U.S.C. § 701. Specifically, plaintiffs contend that it is not impracticable to conduct a competitive examination for LG positions. (Complaint P29); see 5 C.F.R. § 213.3133. Plaintiffs also contend that "the use of this authority by the FDIC is arbitrary, capricious and contrary to law." (Complaint P30.)
Federal civil service employees, with the exception of those in the Senior Executive Service, are placed in either the "competitive service" or the "excepted service." 5 U.S.C. § 3302. Applicants for jobs within the competitive service are required to participate in a formal process which includes a competitive examination. Agencies hire employees for competitive service positions from lists of candidates with the top scores on the examination.
Because a competitive examination is not practical in every situation, Congress granted the President the authority to make "necessary exceptions" from the competitive service.
5 U.S.C. § 3302. Excepted service positions are divided into three classifications: Schedules A, B, and C. Since 1939, LG positions have been placed under Schedule A authority, which includes "positions other than those of a confidential or policy-determining character for which it is not practicable to examine." 5 C.F.R. § 6.2.
LG employees, whose positions are at issue in this case, work to liquidate the assets of failed banks all over the country. The government has consistently stated that a competitive examination is not practicable, and thus that LG positions properly belong under Schedule A. The government states three reasons: (1) there is a need to hire staff immediately after a bank fails to ensure that the process of liquidation and paying depositors is accomplished as quickly as possible; (2) LG positions are often filled by former bank employees who are most familiar with the bank and its customers; and (3) the positions are not really permanent, because once the liquidation is complete there no longer is work for the LG employees. Plaintiffs' central contention is that the LG employees have suffered an injury through their inferior job status, which includes poor benefits and no job security, because the FDIC improperly placed their positions in the excepted service.
Courts established by Congress under its Article III power are courts of limited jurisdiction. This Court's jurisdiction is limited to the resolution of real "cases or controversies." U.S. Const. art. III, § 2. The "case or controversy" requirement includes the concept of standing, which requires that a plaintiff challenging an act of government have a real and personal stake in the outcome of the litigation. The standing requirement ensures that Article III courts are not used as a forum in which to seek opinions that are merely advisory. Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975).
At an irreducible minimum, Art. III requires the party who invokes the court's authority to "show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant" . . . and that the injury "fairly can be traced to the challenged action" and "is likely to be redressed by a favorable decision." (Citations omitted).
Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 472, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982). The plaintiffs have alleged facts sufficient to meet all three of these requirements to satisfy the threshold question of standing.
(A) Individually-Named Plaintiffs
The individuals named as plaintiffs in this suit are all FDIC LG employees in the excepted service and are members of the NTEU. They claim that the allegedly illegal classification of LG positions in the excepted service has injured them in the past and continues to injure them by bestowing inferior job status upon them. The government counters plaintiffs' contention, stating that "present LG employees are the beneficiaries -- not the victims -- of the allegedly invalid excepted hiring authority they are attacking. See, e.g., Presseisen v. Swarthmore College, 442 F. Supp. 593, 625-26 (E.D. Pa. 1977), aff'd 582 F.2d 1275." (Defendants' motion to dismiss, p.28). The government's reliance on Presseisen is misplaced. In that case, the female plaintiffs alleged that the defendant employer's recruiting policy was sexually discriminatory, although the plaintiffs themselves received interviews. The Court held that "these women could not be victims of a sexually discriminatory recruitment policy since, in fact, they were interviewed." Presseisen, 442 F. Supp. at 626. In this case, the alleged injury is not plaintiffs' employment in the excepted service, but rather the denial of an opportunity to apply for a position in the competitive service with its superior job status. Therefore, the fact that plaintiffs received jobs does not negate the injury. Defendants suggest that the individual plaintiffs "benefited" from the exception because they did not have to compete for their positions. Although the allegedly illegal regulation did permit plaintiffs to be hired, it also prevented them from applying for the same position with superior benefits. Plaintiffs therefore assert adequate facts to meet the first Valley Forge standing requirement that there be injury in fact.
Plaintiffs have met the third requirement, that a favorable decision would be likely to redress the injury, as well.
Redressability does not require that every requested form of relief be attainable, but rather that the injury is likely to be alleviated if the plaintiff is successful.
The government asserts that the claim is not redressable because one form of requested relief, the conversion of all LG employees in the excepted service to the competitive service, is contrary to law. Therefore, the government has requested, pursuant to rule 12(f), that this form of relief be stricken from the plaintiffs' complaint.