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Houseal v. McHugh

United States District Court, District Circuit

August 27, 2013

DELIA L. HOUSEAL, Plaintiff,
v.
JOHN M. McHUGH, Secretary of the Army, Defendant.

MEMORANDUM OPINION

ROSEMARY M. COLLYER UNITED STATES DISTRICT JUDGE

Under the Administrative Procedure Act, 5 U.S.C. §§ 706 et seq., Delia L. Houseal seeks judicial review of a final decision by the U.S. Army Board for Correction of Military Records, refusing to cancel her U.S. Army Reserve Officers’ Training Corps scholarship debt in the amount of $29, 857.50. The Secretary of the Army has moved to dismiss Ms. Houseal’s suit on two grounds: lack of subject matter jurisdiction and failure to state a claim. The motion will be denied.

I. FACTS

Ms. Houseal née Williams trained as a cadet in Howard University’s U.S. Army Reserve Officers’ Training Corps (ROTC) program for more than two years (September 1997 to February 2000). Compl. [Dkt. 1] ¶ 5.[1] Before matriculating to Howard, Ms. Houseal had signed a scholarship contract with the U.S. Army under its ROTC program. See Mot. to Dismiss [Dkt. 7], Ex. [Dkt. 7-3] at 16, 20-29. Acceptance of the scholarship, which covered up to $9, 000 in annual tuition and educational fees for four academic years, placed certain conditions on all ROTC candidates. Id. Among those obligations was the proviso that should a candidate “disenroll[] from the ROTC program for any reason” the Army would have the discretion to direct the ROTC candidate to repay “any amount of money, plus interest, equal to the entire amount of financial assistance paid by the United States for [her] advanced education from the commencement of [the] contractual agreement to the date of [her] disenrollment.” Id. at 26.

Ms. Houseal alleges that she was subjected to sexual harassment shortly after enrolling in the Howard ROTC program. According to Ms. Houseal, Sergeant Miller, [2] a ROTC instructor, repeatedly harassed her sexually in multiple ways, ranging from “comment[s] about [her] breasts to solicitation for sex.” Compl. ¶ 6. Ms. Houseal did not report this harassment for two years. Id. ¶ 7. After she complained, Lieutenant Colonel Ruffin[3] of the ROTC program at Georgetown University, who was assigned to investigate her case, and Lieutenant Colonel Tyrone Brown, the officer in charge of the Howard ROTC program, advised her to seek a leave of absence from ROTC while her complaint was under investigation. Compl. ¶¶ 9-10.

Though Ms. Houseal’s leave request initially was denied, Compl., Ex. A at 2, it was granted approximately four months later. Compl. ¶ 12. On February 10, 2000, Lt. Col. Brown placed her on leave and instituted a “disenrollment action” against her. Id., Ex. E [Dkt. 1-6] at 1. A disenrollment board convened on November 2, 2000, and recommended to U.S. Army Cadet Command that Ms. Houseal be disenrolled. Id., Ex. G [Dkt. 1-8] at 3. Cadet Command, however, rejected this recommendation due to “insufficient evidence to substantiate indifferent attitude or breach of contract.” Id., Ex. H [Dkt.1-9] at 1. Cadet Command instructed Howard ROTC to institute a new disenrollment action and, among other directives, to make “specific findings” concerning the following: Ms. Houseal’s “allegation that she was forced to leave the program because of sexual harassment” and her “indifferent attitude or breach of contract.” Id. at 2. A second disenrollment hearing was held on September 13, 2001, and the board again recommended disenrollment. Id., Ex. R [Dkt. 1-19] at 3.[4]

On October 22, 2002, over two and half years after she was placed on leave, the Army informed Ms. Houseal that it had officially disenrolled her from Howard ROTC. The Army cited her “indifferent attitude or lack of interest in military training as evidenced by [her] failure to enroll in required Military Science courses” and informed Ms. Houseal that she either would have to serve “active duty in an enlisted status” or repay the $29, 857.50 in scholarship funds that the Army had paid to date. Id., Ex. T [Dkt. 1-21] at 1; Sec. Mem. [Dkt. 7-1] at 3. Although the notice advised Ms. Houseal that she had fourteen days “to appeal/dispute the amount or validity of [her scholarship] debt, ” Compl., Ex. T at 2; see 10 U.S.C. § 1552(b), the Secretary states that Ms. Houseal did not do so, Sec. Mem. at 3. Rather, Ms. Houseal waited until late 2007 to submit to the U.S. Army Board for Correction of Military Records (ABCMR) an Application for Correction of Military Records challenging the Army’s repayment demand.[5]Compl. ¶ 27; Sec. Mem. at 3.

ABCMR received an advisory opinion from Cadet Command which stated that Howard ROTC had disenrolled Ms. Houseal for “breach of contract” and recommended against cancellation of her debt. Compl., Ex. V [Dkt. 1-23] at 1. Upon ABCMR’s invitation, Ms. Houseal filed a rebuttal. Compl. ¶ 29. She stated that she “did not voluntarily breach the terms and conditions of [her] contract, ” but instead “was intentionally misinformed [by] Army ROTC staff at Howard University on how to properly move forward with the program while the sexual harassment investigation was in process.” Id., Ex. X [Dkt. 1-25] at 1.

ABCMR notified Ms. Houseal of its decision in a letter dated August 6, 2008. Id., Ex. Y [Dkt. 1-26] at 1. ABCMR first noted that Ms. Houseal’s Application was late because she had not filed it within three years after disenrollment from Howard ROTC, as required by 10 U.S.C. § 1552(b). Recognizing that the law empowers ABCMR to waive the statute of limitations in the interest of justice, ABCMR “elected to conduct a substantive review of [the] case.” Id. at 2. It explained that it would excuse Ms. Houseal’s late filing in the interest of justice “only to the extent relief, if any, [were] granted.” Id. ABCMR then turned to the merits of Ms. Houseal’s Application and denied it. ABCMR found that Ms. Houseal was “not entitled to cancellation of her ROTC scholarship debt” because the Army had disenrolled her from Howard ROTC for “breach of contract” and she had failed to submit evidence that demonstrated “that the record [was] in error or unjust.” Id. at 9. Ms. Houseal argues that ABCMR’s merits analysis contained two factual errors: it “incorrectly observed that [she] was disenrolled from ROTC ‘due to refusal of a commission;’” and it failed to recognize that the results of the October 18, 2001 disenrollment hearing were unavailable for its review because that hearing “was likely never held.” Compl. ¶ 30.

Ms. Houseal filed suit on December 14, 2012. She argues that ABCMR’s rejection of her Application was “arbitrary, capricious, an abuse of discretion, and contrary to law” because ABCMR did not “consider the relevant facts and circumstances of [her] disenrollment from ROTC and resulting discharge from the Army Reserve.” Compl. ¶ 31. Specifically, Ms. Houseal contends that ABCMR’s decision contained at least one “blatant factual error, ” and “failed to explain why taking a leave of absence from the ROTC program so that her sexual harassment allegation could be investigated constituted a breach.” Id. Ms. Houseal asks this Court to declare ABCMR’s decision contrary to law or remand the matter to ABCMR for renewed consideration. Id. at 9. The Secretary moved to dismiss and Ms. Houseal opposes. See Opp’n [Dkt. 8]; Surreply [Dkt. 15-1].

II. LEGAL STANDARDS

The Secretary challenges the subject matter jurisdiction of this Court. He contends that Ms. Houseal’s debt cancellation request, although styled as a prayer for equitable relief, is actually a claim for money damages against the United States in excess of $10, 000, for which this Court lacks subject matter jurisdiction under the Tucker Act, 28 U.S.C. §§ 1346, 1491. The Secretary also argues that Ms. Houseal has failed to state a claim because she filed her military records correction request after the three-year statute of limitations expired and did not expressly ask ABCMR to waive that time bar.

A. Lack of Subject Matter Jurisdiction

The Secretary’s jurisdictional argument is made pursuant to Federal Rule of Civil Procedure 12(b)(1). That Rule requires courts reviewing a motion to dismiss to construe the complaint liberally, granting the plaintiff the benefit of all inferences that can be derived from the facts alleged. Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004). A court also may consider materials outside the pleadings to determine its jurisdiction, Settles v. U.S. Parole Comm’n, 429 F.3d 1098, 1107 (D.C. Cir. 2005), and “need not accept factual inferences drawn by plaintiffs if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiffs’ legal conclusions.” Speelman v. United States, 461 F.Supp.2d 71, 73 (D.D.C. 2006). Rule 12(b)(1) places the burden of demonstrating that subject matter jurisdiction exists on the party claiming such jurisdiction. Khadr v. United States, 529 F.3d 1112, 1115 (D.C. Cir. 2008); see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (noting that federal courts are courts of limited jurisdiction and “[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary ...


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