United States District Court, District of Columbia
RICHARD O. HENRY, Plaintiff,
SECRETARY OF THE TREASURY, et al., Defendants.
MEMORANDUM OPINION [DKTS. ## 25, 26]
Richard J. Leon United States District Judge
IRS contractor Richard O. Henry ("plaintiff or
"Henry") brings this action against the Secretary
of the Treasury, the Commissioner of the Internal Revenue
Service ("IRS"), and the IRS's Director of
Personnel Security (collectively, "defendants" or
"IRS") to challenge the IRS's decision to
revoke plaintiffs "staff-like access" to IRS
facilities and information systems. The IRS revoked
plaintiffs access on the ground that plaintiff failed to
register with the Selective Service before the age of 26 - a
fact the IRS contends renders plaintiff ineligible for
staff-like access under current IRS policy. Plaintiff asserts
that the IRS violated the Administrative Procedure Act
("APA") by revoking his staff-like access in
contravention of IRS regulations and precedent. See
Compl. [Dkt. #1], Counts I and IV of the complaint have
already been dismissed for failure to state a claim.
See 2/29/16 Mem. Op. & Order 10, 17 [Dkt. # 15].
Currently before the Court are plaintiffs Motion for Summary
Judgment [Dkt. # 26] on the remaining counts, Counts II and
III, of the complaint and the IRS's Renewed Motion to
Dismiss or, in the Alternative, Motion for Summary Judgment
[Dkt. # 25]. Upon consideration of the pleadings, the
evidentiary record, and the relevant case law, the Court
agrees with the prior Memorandum Opinion and Order issued in
this case that plaintiff's claims are justiciable and
that there is subject matter jurisdiction over the action. On
the merits, the Court concludes that the IRS is entitled to
summary judgment because the agency did not violate the APA
by revoking plaintiffs staff-like access due to his failure
to meet the Selective Service registration requirement.
Therefore, the IRS's Renewed Motion to Dismiss or, in the
Alternative, Motion for Summary Judgment [Dkt. # 25] is
DENIED in part and GRANTED in part, and plaintiffs Motion for
Summary Judgment [Dkt. # 26] is DENIED.
facts required to resolve this case are undisputed. Plaintiff
Richard O. Henry is an employee of Booz Allen Hamilton
("Booz Allen"). Pl.'s Stmt. Material Facts
("Pl.'s Stmt.") [Dkt. # 27], Ex. A, Decl. of
Richard O. Henry ("Henry Decl.") ¶ 3. From
2001 to March 2012, plaintiff worked for the IRS as a
contractor employee. Id. ¶¶ 3, 16. In that
role, he was responsible for designing, developing, and
implementing software information systems.
Id.¶3. In order to work as an IRS contractor,
plaintiff required "staff-like access" to IRS
facilities and information. Id. ¶ 4. IRS
regulations define "staff-like access" as
"[u]nescorted access to IRS owned or controlled
facilities, information systems (passwords), security items
and products (as determined by Treasury/bureau officials),
and/or sensitive but unclassified information by contractor
employees." Pl.'s Stmt., Ex. B, July 18, 2000
Internal Revenue Manual ("2000 IRM"), ch. 2, §
184.108.40.206.1.3(15), at 4.
primary sources of IRS policy and procedure govern the
employment and privileges of IRS contract employees. First,
the Treasury Security Manual sets forth minimum
"investigative requirements for contract employees"
who require "staff-like-access" to
Treasury-affiliated facilities, such as IRS facilities.
Defs.' Mot. Dismiss [Dkt. # 9], Ex. 1, Treasury Security
Manual TDP 15-71 ("TDP"), ch. 2, § 2, ¶
1. Second, and more importantly for purposes of this case,
the Internal Revenue Manual ("IRM") provides
additional details regarding when and how the IRS will
investigate contractors to determine their eligibility and
suitability for initial or continued staff-like access.
See generally Defs.' Mot. Dismiss, Ex. 3, Apr.
4, 2008 IRM ("2008 IRM"), ch. 2. Each of those
manuals is periodically updated with revised procedures and
substantive requirements. See, e.g., Id. at cover.
time plaintiff applied for staff-like access in 2001, his
application was governed by the IRM then in effect, which was
the 2000 IRM. The 2000 IRM set forth the procedures that the
IRS would use when investigating whether a contractor should
be granted staff-like access. Of pertinence here, those
investigation provisions required all contractor employees to
receive a background investigation prior to being granted
stafflike access. 2000 IRM, ch. 2, § 220.127.116.11.2.3, at 7.
The provisions also required all contractor employees to be
re-investigated every five years "from the completion
date of the most recent Background Investigation."
Id. § 18.104.22.168.3(1), at 8. The 2000 IRM made
clear, however, that the IRS reserved the right to
investigate contractors "at any time during the period
of access" to determine "whether they continue to
meet the requirements for staff-like access."
Id. § 22.214.171.124.8.1(1), at 17.
to the investigation provisions of the 2000 IRM, the IRS
investigated plaintiff to determine whether he should be
granted staff-like access. Henry Decl. ¶¶ 3-4. As
part of that investigation, plaintiff completed the "OF
306" form. Id. ¶ 5; cf.
Defs.' Mot. Dismiss, Ex. 5, Henry 2011 OF 306
("Henry OF 306"). That form asks whether the
applicant is a male born after December 31, 1959, and, if so,
whether he is registered with the Selective Service System.
See, e.g., Henry OF 306 at 1. If the applicant
admits to not having registered before the age of
26, he must explain that failure to register on the form.
Id. In his 2001 OF 306, plaintiff disclosed that he
had not registered for the Selective Service. Henry Decl.
¶6. His failure to register with the Selective Service
notwithstanding, the IRS granted plaintiff staff-like access
in 2001. Id. ¶ 8.
2006, pursuant to the mandatory re-investigation requirements
of the then-current IRM (which was the 2003 IRM), plaintiff
underwent a second background investigation. See
Pl.'s Stmt., Ex. F, Feb. 1, 2003 IRM ("2003
IRM"), ch. 2, § 126.96.36.199(1), at 7. Plaintiff again
admitted his failure to register for the Selective Service
and again was approved for staff-like access. Henry Decl.
¶¶ 10-11. In a January 2007 memorandum confirming
that approval, the IRS informed plaintiff that, pursuant to
the re-investigation provisions of the 2003 IRM then in
effect, plaintiff would "require an update background
investigation" by February 2012. Pl.'s Stmt., Ex. I,
Mem. from IRS Assoc. Dir. Personnel Sec. to Contracting
Officer's Tech. Representative (Jan. 29, 2007)
("Jan. 2007 IRS Mem.").
in 2008 and 2011, the IRS made two changes to its IRM that
are relevant to this case. First, the IRS established a new
set of criteria that contractors must meet in order to be
eligible for staff-like access. Those criteria include the
requirement that "all males born after 1959 must be
registered with Selective Service or have an exception."
Defs.' Mot. Dismiss, Ex. 2, Nov. 15, 2011 IRM
("2011IRM"), ch. 2, § 10.23.2.2(2), at 2;
see also 2008 IRM, ch. 2, § 10.23.2.2(2), at 1.
Second, the IRS changed the periodic reinvestigation
requirement. The 2008 and 2011 IRMs clarified that
contractors in "moderate risk" positions would not
be subject to a mandatory re-investigation every five years,
but instead would need only to submit "updated Federal
tax compliance checks and a FBI fingerprint check every five
years." 2011 IRM, ch. 2, § 10.23.2.14(2), at 8;
see also 2008 IRM, ch. 2, § 10.23.2.14(2), at
8. Unchanged, however, was the IRM provision noting that
"[a] 11 contractor employees shall be subject to
investigation prior to being granted stafflike access"
and "at any time during the period of access to
ascertain whether they continue to meet the requirements for
staff-like access." 2011 IRM, ch. 2, §
10.23.2.6(1), at 5; see also 2003 IRM, ch. 2, §
188.8.131.52.1(1), at 15. All three of those provisions -the
registration requirement, the tax and fingerprint procedure,
and the "at any time" investigation provision -
remained in effect at all times relevant to this case.
2011, plaintiff was informed by Booz Allen that his IRS
re-investigation was due by February 2012. See Henry
Decl. ¶ 14; Pl.'s Stmt., Ex. Q, E-mail from Mona
Peloquin, Strategy & Organization, Booz Allen, to Richard
Henry (Oct. 21, 2011). In accordance with Booz Allen's
instructions, plaintiff completed and submitted additional
background investigation paperwork at the end of 2011. Flenry
Decl. ¶ 14. Plaintiff disclosed his failure to register
with the Selective Service when completing the background
check forms, explaining that he failed to register "on
conscientious grounds." Henry OF 306 at 2. Unlike with
his previous background checks, however, plaintiffs materials
were evaluated under the contractor eligibility requirements
adopted in 2008 - including, as relevant here, the Selective
Service registration requirement.
letter dated February 2, 2012, IRS Director of Personnel
Security Donna King proposed to deny plaintiffs staff-like
access because the IRS had "determined that [he] may not
meet the eligibility requirements for being granted
access." Attach. A to Compl., Letter from Donna S. King,
Director, IRS Personnel Security, to Richard O. Henry (Feb.
2, 2012) ("Feb. 2012 IRS Letter"). Lhe letter
explained that plaintiffs "condition which raises a
concern and may be disqualifying in this case" was his
"non-registration with Selective Service."
Id. Lhe letter gave plaintiff an "opportunity
to respond in writing" and instructed plaintiff to
"include an explanation of why you are not
responded by letter one week later. See Defs.'
Mot. Dismiss, Ex. 6, Letter from Richard O. Henry, to IRS
Personnel Security Dep't (Feb. 9, 2012) ("Henry
Letter"). He explained that his failure to register
"was not a willful act of civil disobedience."
Id. Rather, he stated that "[a]t the time,
" he "did not fully realize the importance of
registering and just kept putting it off until [he] had
failed to do so before reaching the age of 26."
Id. Plaintiff acknowledged that his explanation was
"not a good excuse, " but noted that he was
"just trying to be honest here" and did not
"have any better explanation." Id.
reviewing plaintiffs response, the IRS made a final decision
to deny plaintiffs staff-like access. See Attach. B
to Compl., Letter from Donna S. King, Director, IRS Personnel
Security, to Richard O. Henry (Mar. 20, 2012) ("Mar.
2012 IRS Letter"). Plaintiff, through counsel, asked the
IRS to reconsider its decision. See Defs.' Mot.
Dismiss, Ex. 7, Letter from Rachel L.L. Rodriguez, to Donna
S. King, Director, IRS Personnel Security (Apr. 18, 2012)
("Rodriguez Letter"). Plaintiffs counsel noted that
the Selective Service registration requirement was reinstated
at a time when plaintiff was in college and changed addresses
frequently, meaning that any announcements likely "would
have failed to reach him." Id. at 6. Those
facts and others, according to plaintiffs counsel, indicated
that plaintiffs failure to register was "not willful but
declined to reverse its determination. In another letter,
this time addressed to plaintiffs counsel, the IRS explained
that, pursuant to the IRM eligibility provisions, Selective
Service registration was a requirement for staff-like access
for male contractors in plaintiffs position. Attach. C to
Compl., Letter from Donna S. King, Director, IRS Personnel
Security, to Rachel L.T. Rodriguez (May 16, 2012) ("May
2012 IRS Letter"), at 1. The letter went on to recount
the conflicting explanations plaintiff had provided for his
failure to register. Id. Specifically, in his
February 9, 2012 letter, plaintiff acknowledged that he had
knowingly put off registration until it was too late. See
Id. (citing Henry Letter). But in his 2011 background
paperwork, plaintiff attested under penalty of law that he
did not register "on conscientious grounds."
Id. (citing Henry OF 306). After recounting those
conflicting pieces of information, the letter concluded that
plaintiffs "explanation failed to show by a
preponderance of the evidence that his failure to register
was neither knowing nor willful." Id. at 2. The
IRS therefore stuck by its decision to deny plaintiff
staff-like access. Id. Without staff-like access,
plaintiff could not maintain his position as a contractor
with the IRS. A few months after his departure from IRS,
plaintiff was approved for staff-like access at the U.S.
Census Bureau. Henry Decl. ¶ 17.
brought suit to challenge the IRS's revocation of his
staff-like access. In his four-count complaint, plaintiff
alleges that the IRS's decision was unlawful under the
APA. See generally Compl. In a Memorandum Opinion
and Order issued February 29, 2016, the judge previously
assigned to this action denied the IRS's motion to
dismiss Counts II and III of plaintiffs complaint for lack of
subject matter jurisdiction, but dismissed Counts I and IV.
See 2/29/16 Mem. Op. & Order 4-10, 12-14, 17.
Currently before the Court are plaintiffs Motion for Summary
Judgment on the remaining counts, Counts II and III, of the
complaint and the IRS's Renewed Motion to Dismiss or, in
the Alternative, Motion for Summary Judgment.