United States District Court, District of Columbia
September 5, 2001
JOHN FONTANA, ET AL., PLAINTIFFS,
LOUIS CALDERA, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Sullivan, District Judge.
Plaintiffs John Fontana and Kevin Murphy filed motions for
preliminary and permanent injunction, seeking to prevent
enforcement of a decision of the Army Board for Correction of
Military Records ("ABCMR"), endorsing the Army's calculation of
their separation from service date. Defendants filed a motion
for summary judgment. After filing stipulations, the Magistrate
Judge treated the party's filings as cross-motions for summary
judgement, and found in favor of the plaintiffs. Before the
court is the Magistrate Judge's Report and Recommendation,
defendant's objections thereto, and plaintiffs' reply.
Defendants' motion for summary judgment is GRANTED;
plaintiffs' motion for preliminary injunction or summary
judgment is DENIED; plaintiff Fontana's motion for temporary
restraining order is DENIED.
Plaintiffs are lieutenant colonels currently serving on active
duty in the Army as medical doctors at Walter Reed Medical
Center ("WRMC"). They commenced their military careers at the
United States Military Academy at West Point ("West Point") in
1979, when they signed an agreement to complete an Active Duty
Service Obligation ("ADSO") in return for their undergraduate
education ("West Point Service Agreement"). After graduating in
1983, plaintiffs signed another agreement upon entering the
Uniform Services University of Health Sciences ("USUHS"),
incurring additional ADSOs, in exchange for medical training
that ultimately resulted in both obtaining medical degrees
("USUHS Service Agreement").
Though plaintiffs performed some active duty after graduating
from USUHS independent of their graduate education, they also
completed an internship, a residency,
and a fellowship, all pursuant to separate ADSO agreements with
the Army. Each of those graduate ADSO agreements provided an
anticipated separation from service date, and additional
conditions on the service of the new ADSOs incurred.*fn1
Though they signed these agreements, plaintiffs submitted
written protests regarding both the separation from service date
and the additional conditions. Plaintiffs also allege that the
Army's interpretation of their separation from service dates has
In May of 1999, plaintiffs submitted their resignations.
Though each plaintiffs commanding officer recommended approval,
the Department of Army Personnel Command refused to accept the
resignations. Plaintiffs filed applications for correction of
their personnel records with the Army Board for Correction of
Military Records in November 1999, and both applications were
denied in May and June of 2000.
Plaintiffs dispute the manner in which the Army has calculated
their ADSOs. The parties do not dispute the aggregate of ADSOs
incurred, but only when and if those ADSOs were fulfilled.
Plaintiffs contend that the West Point ADSOs were fulfilled
during their required active duty service at USUHS. Defendants
dispute this interpretation of the two service agreements and
related statutes and regulations, arguing that both preclude
concurrent service of the ADSO while plaintiffs attended USUHS.
Plaintiffs further contend that the service agreements they
signed at the inception of their internships, residencies, and
fellowships, barring the toll of ADSOs for the duration of each,
were in conflict with relevant statutes and cannot be enforced.
The defendants dispute this interpretation, and further argue
that the letters the plaintiffs sent regarding the
unenforceability of the service agreements are not relevant and
should not affect the court's holding. Plaintiffs contend they
had fulfilled their ADSOs on the date they submitted their
resignations. However, according to the Army, Lt. Fontana is not
due to be released from service until April 1, 2005, and Lt.
Murphy is not due for release until March 29, 2006.
After the case was referred to Magistrate Judge John Facciola,
pursuant to Federal Rule of Civil Procedure 72(b) and Local
Rule 72,3(a), the Magistrate Judge obtained stipulated facts from the
parties on critical issues and subsequently treated plaintiffs'
motion for preliminary injunction as a cross-motion for summary
judgment. The Magistrate Judge filed his Report and
Recommendations on May 14, 2001, defendants filed their
objections on May 29, 2001, and plaintiffs filed their reply on
June 11, 2001.
Plaintiff Fontana filed a motion for Temporary Restraining
Order on May 25, 2001, asking the court to restrain the Army
from executing a permanent change of duty station order,
removing him to Fort Bragg in North Carolina. Defendants agreed
to stay the execution of the order pending a decision by the
court on the merits of the pending issues.
A. Standard of Review
1. Magistrate Judge's Report and Recommendation Must Be
Reviewed De Novo on All Dispositive Issues Raised by the
Opposing Party in Their Objections.
Defendants argue that the Magistrate Judge's Report and
must be reviewed de novo by this Court. The district court
judge "shall make a de novo determination of those portions of
a magistrate judge's findings and recommendations to which
objection is made . . ." L.Cv.R. 72.3(c) (2001); See also Fed.
R. Civil P. 72 (2001); Aikens v. Shalala, 956 F. Supp. 14, 19
(D.C. 1997) (objections to a report and recommendation of a
magistrate judge on an SSA claim must be reviewed de novo).
Defendants raised objections to the standard of review applied
by the Magistrate Judge, as well as the Magistrate Judge's
application and interpretation of the relevant service
agreements, 10 U.S.C. § 4348, 10 U.S.C. § 2114, Army Regulation
350-100, and D.O.D. Directive 6000.2. All issues raised by the
defendants in their objections shall be reviewed de novo by
2. ABCMR's Determination is Based on Statutory and Regulatory
Interpretation to Which Considerable Deference Should be Given
Instead of the De Novo Standard of Review Applied in the
The Army Board for Correction of Military Records is composed
of civilians who evaluate service-members' claims of error or
injustice in their military records. See Dickson v. Secretary
of Defense, 68 F.3d 1396, 1399 (D.C.Cir. 1995). The ABCMR
derives its authority, as do similar boards in the other
military branches, from 10 U.S.C. § 1552(a)(1), which states:
The Secretary of a military department may correct
any military record of the Secretary's department
when the Secretary considers it necessary to correct
an error or remove an injustice . . . [S]uch
corrections shall be made by the Secretary acting
through boards of civilians of the executive part of
that military department.
10 U.S.C. § 1552(a)(1) (2000). Under the statute, the Secretary
has discretion to correct military records when he "considers it
necessary to correct an error," but is not automatically
required to correct a record when there is an error. Id.
Despite this grant of discretion, courts have held that a
decision by the ABCMR to correct or not to correct a military
record pursuant to this authority is a reviewable agency action
under the APA.*fn2
Frizelle v. Slater, 111 F.3d 172, 176
(D.C.Cir. 1997) (ABCMR decision that failed to respond to two of
plaintiff's arguments for rescission of Officer Effectiveness
Report is arbitrary capricious and contrary to law under the
APA); Dickson v. Secretary of Defense, 68 F.3d 1396, 1404
(D.C.Cir. 1995) (ABCMR decision not to grant waiver of three
year limitation on applications for review is arbitrary and
capricious under the APA); Kreis v. Secretary of Air Force,
866 F.2d 1508, 1514 (D.C.Cir. 1989).
Decisions of the ABCMR are reviewable under § 706 of the APA.
5 U.S.C. § 706(2)(A) (2000). Section 706 provides that a
reviewing court should overturn agency action it finds to be
"arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law." Id. The Supreme Court has explained
that this language does not require the same standard of review
to be applied to all types of agency decisions in all contexts.
Rather, in reviewing agency decisions under § 706, the standard
of review to be applied depends on whether the question decided
by the agency was one of fact, law, or the
application of law to facts and whether the agency was
interpreting a statute or rule. See, e.g., Christensen v.
Harris County, 529 U.S. 576, 120 S.Ct. 1655, 146 L.Ed.2d 621
(2000) (clarifying scope of Chevron); Auer v. Robbins,
519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) (articulating
standard for rule interpretation); Chevron v. Natural Res. Def.
Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)
(explaining standard for statutory interpretation). Determining
the proper standard to be applied to the ABCMR's decision by
this Court requires a close analysis of exactly what issues are
in dispute here. The issues in dispute in this case are
questions of law, not fact. Plaintiffs and defendants have
stipulated to the basic facts of this case. See Joint
Stipulation and Statement of Material Facts and Issues. The
parties disagree as to the proper interpretation of the
applicable statutes, Army regulations, and the Service
Agreements between plaintiffs and the Army. Thus, this Court
must apply the appropriate standard of review for agency
interpretations of statutes and regulations that occur in a
decision-making process such as the one employed by the ABCMR.
a. Chevron applies to the ABCMR's Statutory
The Plaintiffs challenge the ABCMR's statutory interpretation
here, arguing that the ABCMR did not correctly interpret the
applicable statutes, 10 U.S.C. § 4348 and § 2114, in determining
that plaintiffs' West Point ADSOs were not satisfied during
their time at the USUHS. Because it appears that Congress
generally delegated to the ABCMR the power to make decisions
carrying the force of law, the appropriate standard of review
for the ABCMR's statutory interpretation is the Chevron
standard. Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778 (1984);
United States v. Mead, 533 U.S. 218
, 121 S.Ct. 2164
, 2171, 150
L.Ed.2d 292 (2001).
Despite several recent cases discussing the scope of the
Chevron doctrine, the Supreme Court has not directly decided
the issue of whether Chevron deference should apply per se to
informal as well as formal adjudication.*fn3 See Mead,
533 U.S. 218, 121 S.Ct. 2164, 2179, 2183, 150 L.Ed.2d 292 (Scalia,
J., dissenting) (pointing out that majority decision does not
clarify whether Chevron applies to informal adjudication).
While Chevron itself involved a formal rule-making process
under the APA, the Supreme Court has since held that courts
should apply Chevron to agency interpretations of law that
occur during the adjudication of claims as well. See De Bartolo
Corp. v. Florida Gulf Coast Bldg. & Const. Trades Council,
485 U.S. 568, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988) (Chevron
applies to questions of law in agency adjudications as well as
rule-making). The Supreme Court in Christensen v. Harris
County made clear that Chevron applies in the context of formal
adjudication under the APA. 120 S.Ct. at 1662 (holding that
Chevron applies to statutory constructions announced in formal
adjudication and notice-and-comment rule-making). The
Christensen Court held that Chevron deference is not
warranted for "opinion letters," "policy statements, agency
manuals, and enforcement guidelines, all of which lack the force
of law . . ." 120 S.Ct. at 1662. The majority in Christensen
left open the question of whether Chevron deference applies to
an agency's interpretation of law that occurs in an informal
adjudication. Lower courts have
applied Chevron to agency statutory interpretation that occurs
in informal adjudications. See, e.g., Mountain Side Mobile
Estates P'ship v. Secretary of HUD, 56 F.3d 1243, 1247 (10th
Cir. 1995) (holding that the Chevron standard is the same
regardless of whether the agency interpretation is performed
through rulemaking or informal adjudication); City of Kansas
City, Missouri v. Dep't of Hous. and Urban Dev., 923 F.2d 188,
192 (D.C.Cir. 1991) (recognizing in dicta that Chevron applies
to agency statutory interpretation in informal adjudication);
see also Kenneth C. Davis and Richard J. Pierce, Jr.,
Administrative Law Treatise, Cumulative Supplement § 3.5 (3d
ed. 2000). In addition, this Court has held that "an agency's
interpretation of a statute is entitled to deference, even in
the informal adjudicatory setting." Modern Muzzleloading, Inc.
v. Magaw, 18 F. Supp.2d 29, 34 (D.C. 1998); see also, e.g.,
Seafarers Int'l Union v. United States, 891 F. Supp. 641, 646
(D.C. 1995) (assuming the applicability of Chevron by applying
it to informal adjudication); Atochem North America, Inc. v.
EPA, 759 F. Supp. 861, 867-68 (D.C. 1991) (same).
However, in United States v. Mead, the Supreme Court
recently clarified the applicability of the Chevron doctrine
to informal agency decision-making processes. The Mead Court
held that the applicability of Chevron turns not on a category
of decision-making process such as informal adjudication, but
rather on the extent of the authority delegated by Congress in
the statute authorizing the agency decision:
We hold that administrative implementation of a
particular 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 promulgated in
the exercise of that authority.
121 S.Ct. at 2171. According to the Mead Court, sufficient
delegation of authority will be clear where the adjudication or
rule-making occurs according to formal procedures, but in the
case of informal processes, the delegation may be shown "by some
other indication of a comparable congressional intent." 533 U.S.
at ___, 121 S.Ct. at 2171. While the Court did not elaborate
further on these other indications, the Court in Mead refused
to apply Chevron deference to a tariff classification ruling
by the United States Customs Service, when the authorizing
statute expressly provided for review of these decisions by the
Court of International Trade, the Customs Services did not treat
these rulings as binding on third parties, and other importers
were warned against assuming any right of reliance on these
decisions. 533 U.S. at ___, 121 S.Ct. at 2174.
Applying the same totality of the circumstances test to the
authorizing statute in this case, 10 U.S.C. § 1552, it is clear
that Congress intended for the ABCMR's decisions to have the
force of law. As discussed above, 10 U.S.C. § 1552(a)(1) grants
discretion to the Secretary of a military department to correct
any military record "when the Secretary considers it necessary
to correct an error or remove an injustice." § 1552(a)(1). These
corrections are to be made under procedures established by the
Secretary concerned. § 1552(a)(3). Most importantly, "[e]xcept
when procured by fraud, a correction under this section is final
and conclusive on all officers of the United States." §
1552(a)(4). Because unlike in Mead, Congress' intent here to
delegate conclusive decision-making authority to the departments
of the military is clear from Subsection (a)(4), this Court
Chevron deference to the ABCMR's statutory interpretation.
Under Chevron, in reviewing an agency interpretation of law,
a court applies a two-step analysis: first, if Congress has
directly spoken on the issue, a court must give effect to
unambiguously expressed intent of Congress; second, if statutory
gaps remain, a court must give effect to the agency's
interpretation unless it is arbitrary and capricious or
manifestly contrary to statute. Chevron, 467 U.S. at 842-43,
104 S.Ct. 2778; Nat'l Pub. Radio v. FCC, 254 F.3d 226, 228
(D.C.Cir. 2001). Thus, here, this Court must determine whether
or not the ABCMR's decision that plaintiffs' West Point ADSOs
did not toll during their USUHS medical education is contrary to
the express language of the applicable statutes. If there is no
such conflict, the Court must then decide whether the ABCMR's
interpretation is arbitrary and capricious.
In applying this second step of Chevron, an agency's
decision is arbitrary and capricious when it is contrary to law
or when the agency's process in rendering its decision was
irrational or unsupported by the record. See Wolfe v. Marsh,
835 F.2d 354, 358 (D.C.Cir. 1987); see e.g., Dickson,
68 F.3d 1396, 1403-04 (D.C.Cir. 1995) (failure to provide a rationale
for decision not to grant waiver is arbitrary and capricious);
Smith v. Dalton, 927 F. Supp. 1, 6-7 (D.C. 1996) (corrections
board decision finding an error but refusing to correct it
without explanation was arbitrary and capricious).
b. ABCMR's Interpretation of Regulations Should be Upheld
Absent Clear Conflict with Plain Text of Regulation.
In addition to the statutory question raised here, plaintiffs
challenge the Army's interpretation of the applicable
regulations. The appropriate standard of review for the ABCMR's
interpretation of the Army's regulations, as reflected in the
Service Agreements with the plaintiffs and the ABCMR's decision,
is a clear error standard. See Auer v. Robbins, 519 U.S. 452,
461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997); Gen. Elec. Co. v.
EPA, 53 F.3d 1324, 1327 (D.C.Cir. 1995). In other words, unless
the ABCMR's interpretation clearly conflicts with the plain
language of the Army regulations, this Court should defer to
In reviewing the ABCMR's interpretation of the Army's
regulations, this Court should accord even more deference to
that decision than would be required by Chevron for statutory
interpretation. See Consarc Corp. v. Treasury Dep't,
71 F.3d 909 (D.C.Cir. 1995) (agency interpretation of rule is due more
deference than agency interpretation of authorizing statute).
Reviewing courts should accord an agency's interpretation of its
own regulations a "high level of deference," and defer to that
interpretation "unless it is plainly wrong." General Carbon Co.
v. OSHRC, 860 F.2d 479, 483 (D.C.Cir. 1988); see also Auer,
519 U.S. at 461, 117 S.Ct. 905 (holding that an agency's
interpretation of a rule is "controlling unless plainly
erroneous or inconsistent with the regulation"). Under this
standard, courts must defer to an agency's interpretation as
long as it is "logically consistent with the language of the
regulation[s] and . . . serves a permissible regulatory
function." Gen. Elec., 53 F.3d at 1327 (quoting Rollins
Envtl. Serv. Inc. v. EPA, 937 F.2d 649, 652 (D.C.Cir. 1991)).
This standard of deference requires a court to defer to an
agency's interpretation of a rule even when that interpretation
diverges from what a first-time reader might conclude was the
"best" interpretation of the regulation. Gen. Elec., 53 F.3d
at 1327. Even when a plaintiff offers a
more plausible interpretation of a regulation, it is the
"agency's choice [that] receives substantial deference." Id.
(quoting Rollins, 937 F.2d at 652). Thus, if the Army's
interpretation of its regulations is a plausible interpretation
of the plain language of those regulations, then this Court will
defer to the ABCMR's decision.
Even if the ABCMR's decision was unclear with respect to the
Army's precise interpretation of statutes and regulations, and
that imprecision was only clarified in the course of papers
filed in this litigation, those litigating positions are to be
accorded deference. Recognizing the dangers of allowing post hoc
rationalizations for agency action, the D.C. Circuit has held
that even where an agency's interpretation of a regulation is
advanced for the first time in litigation, the reviewing court
should defer to that interpretation if it reflects the "agency's
fair and considered judgment on the issue." Nat'l Wildlife
Fed'n v. Browner, 127 F.3d 1126 (D.C.Cir. 1997). There is
nothing in the record that indicates that the Army's position
with respect to the interpretation of the applicable regulations
is anything other than its "considered opinion." The Army has
not offered conflicting interpretations in other cases. Id.
And as discussed below, the Army drafted service agreements with
the plaintiffs that do reflect the Army's offered interpretation
of its regulations.
c. This Court Should Review the Army's Interpretation of the
Service Agreements for Consistency with Regulations.
The status and interpretation of the two Service Agreements
between the plaintiffs and the Army are further questions of law
in dispute. The ABCMR interpreted the language of those
agreements as consistent with the then-current statutes and
regulations. As discussed above, plaintiffs dispute the Army's
interpretation of those statutes and regulations, but also
dispute the Army's interpretation of the language of the Service
The question of the enforceability of the Service Agreements
had those agreements conflicted with the Army's statutes and
regulations would be a question of law for this court to
determine de novo. As explained below, this case does not
raise such an issue because the agreements can reasonably be
interpreted as consistent with the Army's interpretation of its
Neither the Magistrate Judge, plaintiffs, nor the defendants
have employed the correct standard of review. The Magistrate
Judge held that this case was a matter of statutory
interpretation, and did not involve "questions of military
discipline," or of promotions, and therefore should be reviewed
de novo. Though plaintiffs originally advocated a remedial
arbitrary and capricious standard, they concurred with the
Magistrate Judge's Recommendations on that issue in their
response to defendants' objections. The Magistrate Judge's
ruling that the present case "involves only the interpretation
of contracts, statutes and regulations," and, therefore, is a
matter of judicial expertise, not military discretion,
accurately describes the issue in contention, but overlooks the
applicability of the Chevron doctrine. The cases the
Magistrate Judge cited in support of a de novo standard are
clearly distinguishable. Scheduled Airlines Traffic Offices,
Inc. v. Dep't of Defense, 87 F.3d 1356 (D.C.Cir. 1996)
(Department of Defense requirement that bidders on a travel
agency concession include an estimated contribution to a
"Morale" fund is subject to de novo review); Doe v.
Sullivan, 938 F.2d 1370 (D.C.Cir. 1991) (Department of Defense
interpretation of F.D.A. rule allowing waiver of informed
consent requisite to
administration of unapproved drugs is not entitled to any
deference). Both Doe and Scheduled Airlines involved
agencies interpreting statutes outside of their area of
expertise. In such instances, the rationale for Chevron
deference does not apply. In contrast, the ABCMR was
interpreting Army and Department of Defense Regulations, as well
as statutes that were designed by Congress specifically for the
In contrast to the de novo standard employed by the
Magistrate Judge and advocated by the plaintiffs, defendants
argue that an unusually deferential version of the arbitrary and
capricious standard is appropriate for ABCMR decisions involving
personnel matters. Defendants' contention that this Circuit
applies an unusually deferential version of the arbitrary &
capricious standard to decisions involving military personnel is
misguided. See Kreis v. Sec'y of the Air Force, 866 F.2d 1508,
1513-14 (D.C.Cir. 1989) (military personnel decision is
reviewable under A.P.A., but only under "unusually deferential"
application of "arbitrary or capricious standard."). In Kreis,
the Circuit Court decided what standard to apply to a reviewable
exercise of agency discretion, not an agency's interpretation of
its statutes and regulations. Defendant's invocation of the
Schaefer case on this point is similarly unpersuasive.
Schaefer v. Cheney, 725 F. Supp. 40 (D.C. 1989). This Court in
Schaefer upheld an ABCMR decision not to recalculate ADSOs
owed by medical students for Army sponsorship. In doing so, this
Court did not indicate that any greater degree of deference was
due than that traditionally recognized under the Administrative
Procedures Act; in fact, this Court did not explicitly discuss
the standard of review. Instead, this Court appeared to review
the rationality of the Army's interpretation of Army Regulation
601-112, concluding that "[t]his Court finds the Defendants'
interpretation of their 1972 regulation persuasive." Id. at
50. Thus, the usual standards applied in reviewing agency
interpretations of statutes and regulations, rather than an
unusually deferential version of the arbitrary and capricious
standard, are appropriate here.
B. Statutory Framework
The parties differ on the relevancy and interpretation of
statutes, Army regulations, and the West Point and USUHS Service
Agreements. Plaintiffs argue that the ABCMR's interpretation of
plaintiffs' remaining service obligation is inconsistent with:
(1) the plain meaning of the West Point Service Agreement and
its authorizing statute, 10 U.S.C. § 4348; (2) Army regulation
350-100 and Department of Defense Directive 6000.2; and, (3) the
plain meaning of the USUHS Service Agreement and its authorizing
statutes. Defendant disagrees and argues that the ABCMR
correctly interpreted the applicable statutes and regulations
and correctly determined that the language of the Service
Agreements was consistent with their interpretation of those
statutes and regulations.
1. The ABCMR Determination Does Not Conflict With the
Statutes Authorizing the West Point Service Agreement,
10 U.S.C. § 4348, and Describing the USUHS Attendance
Requirements, 10 U.S.C. § 2114, nor is it Arbitrary and
Plaintiffs argued, and the Magistrate Judge agreed, that the
ABCMR's determination that their West Point ADSOs were not
served while the plaintiffs were attending USUHS, conflicted
with the language of § 4348 and § 2114. Plaintiffs claim that
because they were on "active duty" while they attended USUHS,
pursuant to § 4348, their ADSOs began running immediately upon
graduation from West Point. Defendants contend that the ABCMR's
decision is not in conflict with § 4348, as plaintiffs (1) were
not on active duty in the Regular Army; and, therefore, (2)
their West Point service did not begin immediately upon
First, plaintiffs' West Point ADSO is described in
10 U.S.C. § 4348(a)(2), and mirrored in their West Point Service Agreements.
Section 4348(a) provides two ways in which the ADSO can be
fulfilled. First, Subsection (a)(2) allows fulfillment of the
West Point ADSO by five years active duty in the Regular Army:
That upon graduation from the Academy the cadet —
(A) will accept an appointment, if tendered, as a
commissioned officer of the Regular Army or the
Regular Air Force; and
(B) will serve on active duty for at least five
years immediately after such appointment.
10 U.S.C. § 4348(a)(2) (1964) (emphasis added). Subsection
(a)(3) allows for fulfillment of the West Point ADSO by six
years of service as an officer in the Reserves:
That if an appointment described in paragraph (2) is
not tendered or if the cadet is permitted to resign
. . . the cadet —
(A) will accept an appointment as a commissioned
officer . . . for service in the Army Reserve . . .
(B) will remain in that reserve component until
completion of the commissioned service obligation of
10 U.S.C. § 4348(a)(3) (1964).
In order to attend USUHS, plaintiffs were required to resign
from the Regular Army and accept positions as officers in the
Reserves. USUHS Agreement at ¶ 3 (1983) ("I will accept a
Reserve appointment as a Medical Service Corps Officer,
commissioned grade 0-1."). Plaintiffs argue that despite this
appointment to the Reserves, they still fulfilled the
requirements of Subsection (a)(2) because they were on active
duty in the Medical Corps during their USUHS training, acting in
the capacity of active duty officers, as was required by statute
under 10 U.S.C. § 2114. Defendants argue that in order to toll
the active duty requirement under § 4348(a)(2), the plaintiffs
must have been in the "Regular Army," while, in fact the
plaintiffs were serving in the Reserves.
It is apparent from the plain language of § 4348(a)(2) that
plaintiffs were required to be in the Regular Army to satisfy
the "active duty" obligation under that subsection. Not only is
the service in the "Regular Army" specified in subsection
(a)(2), but to allow "active duty" under (a)(2) to include
service in the Reserves would make Subsection (a)(3) redundant.
Further, though 10 U.S.C. § 2114(b), does provide that
"[m]edical students . . . shall serve on active duty," it does
not specify whether that active duty should be served in the
Regular Army or the Reserves. In fact, § 2114 goes on to note
that "[u]pon graduation [from medical school] they shall be
appointed in a regular component." 10 U.S.C. § 2114(b) (1980).
Had Congress intended all "active duty" service to be in the
Regular Army, the latter language would not have been necessary.
Also, plaintiffs' claim that service in the Medical Corps
while at USUHS amounted to constructive Regular Army "active
duty," is unsupported by the record. They argue that, pursuant
to their "active duty" status at USUHS they received salaries
consistent with active duty pay grade 0 1, and were subject to
military discipline within the military chain of command.
However, defendants point out that duty served at grade "0 1" is
not equal to the pay grade for officers on active duty who are
not in training, and there is no
evidence in the administrative record that the "active duty"
served by the plaintiffs involved anything outside of the
obligations any medical student in a civilian institution would
owe. In fact, during the motions hearing before the Court, the
government argued: "[the plaintiffs] didn't have any active duty
Army duties to attend to, other than their medical school
program requirements." (Tr. at 76), and the only duty they do
have "is to receive education." (Tr. at 55). The plaintiffs even
admitted that any duties they performed at USUHS would be
"purely medical duties," (Tr. at 8) and did not identify any
evidence on the record to the contrary. Thus, though the
plaintiffs were on "active duty" while at USUHS, they were in
the Reserves rather than the Regular Army, so the plaintiffs
could not have been fulfilling their West Point ADSO pursuant to
Second, plaintiffs argue that even if they were serving in the
Reserves, rather than in the Regular Army, their West Point
obligation still tolled as a "commissioned service obligation"
under §§ 4348(a)(3) and (d). Section (a)(3), quoted above,
allows for fulfillment of the West Point ADSO via service as a
"commissioned officer" in the Army Reserve.
10 U.S.C. § 4348(a)(3) (1964). The "commissioned service obligation"
described in subsection (a)(3) is later defined as "the period
beginning on the date of the officer's appointment as a
commissioned officer and ending on the sixth anniversary of such
appointment . . ." 10 U.S.C. § 4348(d) (1964).
However, in contrast to the explicit "immediately" and "upon
graduation" language in subsection (a)(2), subsection (a)(3)
merely requires that the cadet "will" accept a Reserve
appointment and remain in the component until the obligation is
fulfilled. Plaintiffs argue that because their service in the
Reserves began upon signing of their USUHS agreements, which
required resignation and appointment to the Reserve, their West
Point obligation should have been fulfilled continuously from
that point in time forward. The statute, however, does not
require that the "commissioned service obligation," an
alternative to active duty, begin immediately. The ABCMR's
interpretation of the required service in the Medical Corps
during medical school as exclusive with respect to the West
Point ADSO is not contradicted by the language of Subsection
(a)(3). The plaintiffs need not have served, according to the
statute, their West Point ADSO while in medical school. The Army
was free, under Subsection (a)(3) to promulgate regulations to
Finally, plaintiffs claim that § 2114 carefully singled out
particular circumstances in which ADSOs owed for USUHS education
could not be served, providing that "[a] period of time spent in
military intern or residency training shall not be creditable in
satisfying a commissioned service obligation imposed by this
section." 10 U.S.C. § 2114(c) (1979). Service of West Point
ADSOs during USUHS training, they argue, could have been
proscribed just as easily. This argument by negative inference,
however, is insufficient to overcome the Army's reasonable
interpretation of the statutes that do exist.
Therefore, the ABCMR interpretation, that plaintiffs' "active
duty" service while at USUHS did not fulfill their West Point
ADSOs, did not contradict the plain meaning of either § 4348 or
2. The ABCMR's Interpretation of Army Regulation 350-100 and
DOD Directive 6000.2 Deserves Deference Because It Does not
Clearly Contradict the Regulation and is Further Supported by
Army Regulation 35-3.
Plaintiffs argue that the ABCMR incorrectly applied Army
350-100, and improperly failed to exclude them from the
provisions of DOD Directive 6000.2. Defendants contend that the
ABCMR decision is not contrary to Army Regulation 350-100, nor
did plaintiffs qualify for an exemption from 6000.2, as neither
was a qualifying "health services officer" at the time they
signed their USUHS agreement.
a. Army Regulation 350-100
Defendants argue that nothing in Army Regulation 350-100
precluded the ABCMR's determination that plaintiffs' West Point
service obligation ran consecutively to their training at USUHS.
However, plaintiffs contend that A.R. 350-100 requires that West
Point service obligations run concurrently with all other
service obligations, save those incurred through army-sponsored
A.R. 350-100 provides that a West Point "ADSO is effective
from the date of entry on active duty, [and] is served
concurrently with all ADSOs except for civilian schooling." A.R.
350-100, Table 3-1, n. 1-2 (1988).*fn4 "Consecutive
obligations" are also mentioned under this section and include
only "ADSOs resulting from more than one civilian education
program." A.R. 350-100, 3-3.
Though plaintiffs correctly identified the table determining
service of West Point ADSOs, they failed to recognize the
limited scope of the consecutive service proscription. A.R.
350-100, entitled "Officer Active Duty Service Obligations,"
does not control interpretation of the relationship between
their West Point and USUHS obligations, as the regulation "does
not apply to officers serving on active duty for training . . ."
A.R. 350-100 at i.
Plaintiffs were indeed serving on active duty "for training,"
while attending USUHS. They were statutorily required to be on
"active duty" while attending USUHS, 10 U.S.C. § 2114(b) (1980),
not as regular officers, but in the Reserves. Plaintiffs' sole
responsibility during this time was medical training at USUHS.
Finally, duty served at grade "0-1" is not equal to the pay
grade for officers on active duty who are not in training.
b. Department of Defense Directive 6000.2
Defendants contend that the ABCMR correctly relied on DOD
Directive No. 6000.2, as (1) plaintiffs were engaged in a period
of "long-term health or health-related education"; and (2) the
Directive proscribes service of prior service obligations during
that period. Plaintiffs argue that the Directive explicitly
excluded them from its terms.
In pertinent part, the Directive provides:
Nothing in this Directive shall be used to change
an ADO or an active duty agreement entered into in
writing by a health services officer before the
date of the implementation of this Directive.
(3) Payback of a Prior Obligation. No portion
of a prior obligation arising out of the
expenditure of government funds for education or
training purposes may be satisfied during any
period of long-term health or health-related
(4) Payback of an ADO Incurred Under the
Provisions of this Directive.
No portion of an ADO may be satisfied: . . .
(c) Concurrently with any other ADO or with an
obligation incurred for DOD-subsidized
pre-professional (undergraduate) education or
training, or prior long-term health or
health-related education or training.
D.O.D. Directive No. 6000.2 (March 19, 1981) (emphasis added).
Defendants argue that plaintiffs, while attending USUHS were
engaged in a "period of long-term health or health-related
education," Directive at 3 § F2, 4 ¶ 4. Because they were so
engaged, "no portion of a prior obligation arising out of the
expenditure of government funds for education . . . may be
satisfied." Plaintiffs had such a prior obligation, in the form
of their West Point ADSOs, which therefore could not have been
satisfied while attending USUHS.
However, plaintiffs contend that nothing in the Directive,
including the exclusion detailed above, can be used to change an
ADSO incurred pursuant to an agreement entered into "before the
date of implementation of this Directive," by a "health services
officer." DOD at 3 ¶ F. Plaintiffs signed their West Point
agreement in 1979, three years before the Directive was
promulgated, which clearly qualifies it as an agreement entered
into before the implementation date of this Directive. However,
Health Services officers only include "those officers serving in
the Medical Corps . . . [or] in DoD programs leading to
commissioning in any of these corps." DOD Directive 6000.2 at 4
¶ 1. Plaintiffs did not join the Medical Corps until signing
their USUHS agreement in 1983. See USUHS Service Agreement at
2 (1983) (medical students "accept a Reserve appointment as a
Medical Service Corps officer"). Nor is it unreasonable that the
ABCMR did not consider plaintiffs West Point training, in
engineering and artillery, as the equal of "a program leading to
commissioning in any of these corps." DOD Directive 6000.2 at 4
¶ 1.*fn5 As plaintiffs were not health services officers when
entering into their West Point ADSO, they do not qualify for an
exclusion from the provisions of the Directive. Without such an
exclusion, the Directive requires that no prior obligations,
like plaintiffs' West Point ADSOs, may be satisfied during a
period of long-term health related education, which includes
plaintiffs' USUHS training. Therefore, the ABCMR reasonably
concluded plaintiffs' West Point ADSOs could not have been
satisfied while plaintiffs attended medical school.
c. Army Regulation 351-3
Significantly, another applicable regulation, A.R.
361-3,*fn6 entitled "Professional Education and Training
Programs of the Army Medical Department," governs "active duty
obligations (ADSO) incurred for taking part in long-term health
and healthrelated education and training programs." In an almost
perfect echo of DOD Directive 6000.2, A.R. 351-3 provides that
"no portion of a prior obligation arising out of the expenditure
of Government funds for education or training purposes may be
satisfied during any period of long-term or health-related
education or training." A.R. 351-3, § 10-1 (1988)*fn7 Nor can
"an ADO . . . be satisfied . . . [c]oncurrently with any other
ADO or with any obligation incurred for DOD subsidized
preprofessional (undergraduate) education or training . . ."
A.R. 351-3, § 10-2. Regulation 351-3 clearly supports the
ABCMR's decision that the plaintiffs' ADSOs could not have been
fulfilled during their USUHS training.
3. The Language of the West Point and USUHS Service
Agreements Is Consistent With the ABCMR's Interpretation of
the Applicable Statutes and Regulations.
Finally, the plaintiffs argue that the plain language of the
USUHS agreement does not support the ABCMR determination that
the West Point ADSOs could have been served in concert with the
plaintiffs' USUHS attendance. The defendants claim that the
language of the USUHS contract precludes such concurrent
First, had plaintiffs and the Army entered into service
agreements that contradicted the applicable statutes and
regulations, then this Court would be faced with a more
difficult question. However, contrary to plaintiffs' assertions,
the agreements signed by plaintiffs and the Army can be read
consistently with the statutory and regulatory framework
The USUHS agreement provides that the West Point ADSO:
(4) ". . . will be served consecutively with the
service obligation incurred by my participation in
the medical program of the United States University
of the Health Sciences. This obligation will be
served in addition to internship & residency training
in accordance with the policy of the military service
in which I am appointed. I acknowledge that my
remaining service obligation incurred prior to entry
into the medical program is 25 May 1988, and that
this service obligation will extend the service
obligation incurred as a result of my participation
in the medical program."
USUHS Service Agreement (1983) (emphasis added). Two phrases
speak explicitly to the relationship between the West Point
ADSO, and the ADSO incurred for USUHS attendance. First, the
agreement provides that the first obligation must be served
"consecutively with the service obligation incurred by my
participation in the medical program," and, second, the
agreement provides that the prior "service obligation will
extend the service obligation incurred" as a result of USUHS
training. Plaintiffs argued that this language means only that
the USUHS ADSO must be served after the West Point ADSO has been
completed, but not necessarily after plaintiffs completed their
medical training at USUHS.
Plaintiffs and the Magistrate Judge are correct that the
language of the Service Agreement is less than clear. However, a
close examination of that language reveals that the plaintiffs'
First, plaintiffs began serving the service obligation
incurred as a result of attending USUHS upon graduation from
medical school. It is not rational to speak of serving two ADSOs
consecutively prior to one of them becoming due. In addition,
the agreement states that the prior ADSO will "extend" the
latter ADSO. Plaintiffs' interpretation of the agreement, that
the West Point ADSO could be served while attending USUHS does
not account for the use of the word "extend." If the West Point
ADSO was fulfilled during medical school, the seven-year
obligation incurred by attending USUHS would not be extended at
all by the West Point obligation. The word extend indicates that
plaintiffs' obligation was greater than seven years after
graduation from USUHS.
Second, plaintiffs' argument assumes that the "service
obligation" referred to in both clauses of the, USUHS agreement
only refers to the seven-year "service obligation" medical
students must serve after graduating from USUHS. However, the
same contract also provides that students "will accept a Reserve
appointment as a Medical Service Corps officer," creating a
Reserve "service obligation," to be fulfilled while
attending medical school. USUHS Agreement at 2. If the agreement
was referring to this Reserve service obligation, then the
agreement would prevent plaintiffs from serving their Reserve
"service obligation . . . concurrently" with their West Point
Both these interpretations of the USUHS Service Agreement not
only reflect a reasonable interpretation of the language, but
also are consistent with Army policy. After all, as the
government has pointed out, it makes the privilege of both
undergraduate and medical education available at no cost to
students, in anticipation of a significant return on its
investment. The Army, then, gets "a bigger bang for th[eir]
buck," (Tr. at 78) when those students become Army doctors. The
government also expressed concern that "it's very difficult for
the Army to get qualified doctors . . ." (Tr. at 81). This
policy concern is entirely consistent with the power granted to
the Secretary of the Army, to condition "advanced education
assistance"*fn8 under 10 U.S.C. § 2005(a), on "such other
terms and conditions as the Secretary concerned may prescribe to
protect the interests of the United States." The legislative
history of 10 U.S.C. § 2114 indicates that Congress apparently
shared the government's concern. See H.R. Conf. Rep. No.
92-1320 at *3 (1972) (creation of the USHUS would "greatly
assist us in retaining highly qualified members of the health
professions into the military departments."); S.Rep. No. 92-827
at *4 (1972), reprinted in 1972 U.S.C.A.N.N. 3329 (citing the
"severe retention problem" of keeping physicians in the armed
forces as one of the central motivations for creation of the
USUHS). To allow servicemen like plaintiffs to subtract at least
four years of time in service obligations would divest the
government of a significant portion — at least twenty-five
percent — of that "bang" it expects back from the thousands of
dollars of free education provided to plaintiffs.
In Dickson, this Court addressed the policy justifications
for the consecutive ADSO requirement. 725 F. Supp. at 46-47.
Prior to 1974, officers who attended both West Point and
graduate medical school got the benefit of what was called the
"merger rule." Schaefer, 725 F. Supp. at 47. While graduates of
West Point incurred a five-year ADSO and graduates with
subsidized medical training incurred a seven-year ADSO, the
obligations of those who did both merged into a seven-year ADSO.
Id. In 1974, the Army did away with the merger rule, and the
ADSOs became consecutive. Id. This Court explained that this
change was the result of the Army's determination that "they
not receiving a good return on their investment by providing
individuals with four years of school at USMA, four years of
medical school, a year of internship training, and residency
training in exchange for only seven years of total service
commitment." Schaefer, 725 F. Supp. at 47 n. 5. If this Court
were to allow plaintiffs to fulfill their West Point ADSO while
attending USUHS, the policy behind rejecting the merger rule
would be undermined. Plaintiffs in effect advocate a return to
the pre 1974 system, where they would receive West Point and
medical training and incur only the medical school obligation.
However, plaintiffs also make much of the fact that the
version of the USUHS Service Agreement promulgated a year after
plaintiffs signed their service agreements seemed to recognize
the ambiguity in the old agreement and, in an effort to cure it,
12. I understand that the following provisions apply
to the discharge of my active duty obligation . . .
d. Time spent on active duty or active duty for
training while a member of the Program prior to
completion of professional degree requirements will
not be credited toward fulfillment of any active duty
USUHS Service Agreement (1984). First, the fact that the Army
clarified the language of the new agreement does not imply that
it changed the actual requirements under the agreement. Second,
the revision was part of approximately four pages added to the
agreement. Other "new" provisions included a certification that
the signer meet citizenship and age requirements, see USUHS
Service Agreement (1984) at I 1, as well as an agreement to
"complete the educational requirements," id. at ¶ 15(a), and
"meet the physical fitness, weight control and uniform wear and
appearance standards . . ." Id. Surely plaintiffs could not
argue that any of these requirements, though not explicitly
included in the 1983 version of the agreement, were not required
before the change.
For the foregoing reasons, it is hereby
ORDERED that plaintiffs' motion for preliminary injunction
or summary judgement is DENIED. It is
FURTHER ORDERED that plaintiff Fontana's motion for
temporary restraining order is DENIED. It is
FURTHER ORDERED that defendants' motion for summary judgment
IT IS SO ORDERED.