CHARLES F. LETTOW, District Judge.
This wrongful termination case has a long history, stemming from a dismissal of plaintiff, former Lieutenant Commander Mary Verbeck, from her post as a nurse practitioner in the Public Health Service ("PHS") Commissioned Corps in June of 2002. For the past twelve years, Ms. Verbeck and the government have engaged in legal proceedings at the administrative level and in this court. On July 23, 2013, after two remands, the court granted Ms. Verbeck judgment on the administrative record, setting aside her termination, preparing to order her reinstatement, and remitting the case for a third time to the Secretary of Health and Human Services for the purpose of calculating back pay and allowances owed through July 2013 to Ms. Verbeck. PHS's decision on the third remand proved to be incomplete and unsatisfactory to all parties, and a fourth remand was ordered on January 15, 2014. On April 30, 2014, PHS completed its proceedings on the fourth remand, determining that through December 31, 2013, Ms. Verbeck was due $89,846.95, taking into account substantial offsets attributable to her civilian employment. Unsatisfied with the decision on remand, Ms. Verbeck invoked Rule 52.2(f) of the Rules of the Court of Federal Claims ("RCFC") to contest the agency's determination of back pay and allowances due.
Ms. Verbeck served as an officer in the United States Department of the Navy, but in November 1999, she transferred to the PHS Commissioned Corps to serve as a nurse practitioner with the rank of Lieutenant Commander. See Verbeck v. United States ("Verbeck I"), 89 Fed. Cl. 47, 51 (2009). PHS placed her at an Immigration and Naturalization Service ("INS") facility located in Queens, New York, and in October 2000, upon her request, she was transferred to the INS center in San Padro, California. See Verbeck v. United States ("Verbeck II"), 97 Fed. Cl. 443, 446 (2011). During 2000 and 2001, reports of her performance, prepared by her superior officers, reflected an overwhelmingly positive view of Ms. Verbeck's work. See Verbeck v. United States ("Verbeck III"), 111 Fed. Cl. 744, 747 (2013). In the fall of 2001, Ms. Verbeck underwent treatment for breast cancer, including two major surgeries. Id. Attendant to her treatment, she began to suffer severe depression, which was aggravated by a post-surgical infection and two incidents at work during which she felt her safety was threatened. Id. Over the next several months, after Ms. Verbeck's superiors became concerned with her fitness, Ms. Verbeck was placed on paid leave, and controversy arose between Ms. Verbeck and her superiors while physicians assessed whether she was fit for duty. Id. at 747-48. Although her personal physician and two other physicians noted her fitness for duty, PHS proceeded with terminating her commission. Id. She was discharged on June 1, 2002. Id.
After termination, Ms. Verbeck gained employment as a civilian nurse in 2003 and moved to San Diego, California, for that position. Pl.'s Mot. for Judgment on the Administrative Record ("Pl's Mot.") at 30, ECF No. 165. As part of her relocation to San Diego, she sold her condominium for a loss and incurred moving costs. Id. She has earned civilian pay as a nurse since 2003, with generally increasing income over the decade. Id. at 33.
Ms. Verbeck filed the current suit in this court after unsuccessfully pursing administrative remedies. Verbeck III, 111 Fed. Cl. at 748.
RCFC 52.1(c) governs the parties' cross-motions for judgment upon the administrative record. In adopting RCFC 52.1, the Court's Rules Committee noted that "[t]he standards and criteria governing the court's review of agency decisions vary depending upon the specific law to be applied in particular cases. [RCFC 52.1] does not address those standards or criteria." RCFC 52.1, rules committee note (2006). For these motions, Ms. Verbeck bears the burden to prove through the administrative record that the Board's decision was arbitrary and capricious, contrary to law, or unsupported by substantial evidence. Verbeck III, 111 Fed. Cl. at 749; see also Cronin v. United States, ___ F.3d ___, ___, 2014 WL 4235317, at *3 (Fed. Cir. 2014); Chambers v. United States, 417 F.3d 1218, 1227 (Fed. Cir. 2005). In accord with this standard, the court does not reweigh the evidence but considers whether the Board's conclusion is supported by substantial evidence. Heisig v. United States, 719 F.2d 1153, 1157 (Fed. Cir. 1983). As long as the Board's action comported with the procedural standards mandated by statute or regulation, considered the relevant evidence, and reached a reasonable conclusion, the court will not disturb the Board's decision. Melendez Camilo v. United States, 642 F.3d 1040, 1045 (Fed. Cir. 2011); Helferty v. United States, 113 Fed. Cl. 308, 316 (2013).
Ms. Verbeck brought her claims jurisdictionally under the Tucker Act, 28 U.S.C. § 1491(a), and substantively under the Military Pay Act, 37 U.S.C. § 204. See Verbeck I, 89 Fed. Cl. at 59-60. The Military Pay Act provides that members of the uniformed services are entitled to pay and allowances specified by law or regulation for the pay grade to which assigned. 37 U.S.C. § 204(a), (g), (h), (i). The PHS Correction Board endeavored to follow the mandate of the Military Pay Act and the statute applicable to military correction boards, 10 U.S.C. § 1552, in its determinations on the fourth remand.
As part of its decision on remand, the Board found Ms. Verbeck eligible for specialty pay totaling $26,493.76. Decision on Remand at 2-3. The Board based this amount on the specialty pay rate for Non-Physician Board Certification Pay, governed by 37 U.S.C. § 302c(d), and her Creditable Service Entry Date ("Entry Date") of November 1, 1999, the time she joined PHS. Id.; see Def.'s Cross-Motion for Judgment Upon the Administrative Record & Resp. to Pl.'s Mot. for Judgment on the Administrative Record ("Def.'s Cross-Mot.") at 9, ECF No. 166. Ms. Verbeck disagrees with the Board's calculation, asserting she is due specialty pay of $66,913.27. Pl.'s Mot. at 21-23. She contends that the Board applied the wrong specialty pay rate and used the wrong Entry Date. Id. at 22-23; see Def.'s Cross-Mot. at 9-10.
In support of her contention on the rate of specialty pay, Ms. Verbeck points to a governmental pay schedule labeled "Special Pays for Health Professional Officers," which specifies that qualifying personnel, i.e., medical and dental officers with a pay grade over "18," receive an additional $500.00 a month in specialty pay. Pl.'s Mot. at 23 (citing AR4-291).
Ms. Verbeck also argues that her Entry Date should have been adjusted to take into account her service in the Navy, which began in 1987. Pl.'s Mot. at 23.
Pl.'s Opp'n at 17 (citing Def.'s Mot., App. 1, ECF No. 166-2). The government argues that prior to November 1999, Ms. Verbeck was not entitled to specialty pay because she had not completed the requisite board certification in her specialty, being ineligible because she did not receive her post-baccalaureate degree until May 1999. Def.'s Cross-Mot. at 9. The record does not show when Ms. Verbeck became board certified, but she would not have been entitled to specialty pay prior to May 1999 when she received her post-baccalaureate degree. While Ms. Verbeck may have become board certified between May and November, she has not presented evidence to that effect. As it stands, the court cannot say the Board's determination that Ms. Verbeck's Entry Date, based upon the beginning of her employment with PHS, is not based upon substantial evidence.
The court accordingly concludes that the Board was correct in determining that Ms Verbeck is due specialty pay of $26,493.76.
The Board determined that Ms. Verbeck was entitled to $1,258.67 in medical expenses and no money for dental expenses. Decision on Remand at 4-5. The Board opined that it could only compensate Ms. Verbeck for actual health care expenses paid during the period she worked as a civilian nurse, and it found that documentary evidence of actual costs was largely missing. Id. Contrastingly, Ms. Verbeck contends that she should receive $65,021.70 for health insurance and $13,261.02 for dental insurance. Pl.'s Mot. at 10, 14. She argues that she should receive the full value of medical coverage, considered by the government to be $5,615.00 a year, that she would have received as a member of the PHS Commissioned Corps. Pl.'s Mot. at 12.
Ms. Verbeck has failed to provide any persuasive support for the proposition that she should be allowed to recover insurance costs based upon the government's valuation of health insurance offered to service members.
Ms. Verbeck calculates her personal expenditure on health insurance since her separation as amounting to $25,765.50. Pl.'s Mot. at 13-14. The government agrees that Ms. Verbeck is entitled to expenses actually paid but points out that Ms. Verbeck only provided documentation of her health insurance premiums for the first half of 2013, which in the government's view is insufficient evidence of her premiums for other years. Def.'s Cross-Mot. at 19-21. Ms. Verbeck provided documentation for health insurance premiums paid from January 1, 2013 to July 31, 2013 — which total $1,258.67. Pl.'s Mot. at 13; see also AR4-50 (Ms. Verbeck's Statement of Earnings from January 1, 2014 to July 31, 2014). For health coverage, she has contended, both now and previously before the Board, that she paid $89.00 bi-weekly, deducted from her earnings, from June 1, 2002 through December 31, 2013. Pl.'s Mot. at 13. She also provided a signed declaration stating that she paid $43.87 bi-weekly for dental insurance, Pl.'s Mot. at 14; see Decl. of Mary E. Verbeck (Jan. 3, 2014), ¶ 17, ECF No. 144, at 17, but submitted no additional documentation supporting this contention. The government argues that the Board did not err in rejecting her calculations because she did not provide additional, corroborating evidence. Def.'s Cross-Mot. at 20; see also Decision on Remand at 4-5. However, in Gearinger, testimony as to medical expenses paid was held to be sufficient evidence to warrant damages. See 412 F.2d at 866; see also Dilley v. Alexander, 627 F.2d. 407, 414 (D.C. Cir. 1980) (approving "reimbursement for all pay and allowances that [claimants] would have received but for their illegal separation, to the extent that such sums can be calculated with a reasonable degree of certainty"). The costs Ms. Verbeck claims for medical and dental insurance coverage are supported and reasonable, and she should be permitted to recover them.
The Board determined that it was not authorized to reimburse Ms. Verbeck for state income taxes paid. Decision on Remand at 7.
In these circumstances, although Ms. Verbeck would have not been subject to California state income tax had she remained with PHS, her decision to find mitigating employment in California rather than returning to Florida was the reason she was subject to income taxation in California. As a result, upon reinstatement, Ms. Verbeck may seek return of her taxes from California, but PHS has no legal obligation to reimburse her for California taxes paid.
The Board determined that if Ms. Verbeck were reinstated, she could recover $808.10 for four days of unused annual leave. Decision on Remand at 5-6. Ms. Verbeck contends that she should receive $108,666.92, accounting for leave from June 1, 2002, through December 31, 2013. Pl.'s Mot. at 24.
Ms. Verbeck seeks $47,347.46 in what she calls "lost morale, welfare, and recreation benefits," which are non-cash benefits provided by the armed services to its military personnel, and which, she argues, should be deemed "other pecuniary benefits" within the meaning of 10 U.S.C. § 1552(c). Pl.'s Mot. at 14-15.
Ms. Verbeck's claim for lost morale, welfare, and recreation benefits, as defined by Ms. Verbeck, is too speculative to be the basis for an award.
Ms. Verbeck contends that the Board erred when it did not provide a monetary award for her lost educational benefits, which would have been available to her through PHS. Pl.'s Mot. at 29. She provides no factual or legal support for this claim. The Board reasoned that she failed to present any information indicating that she used the benefits while with PHS or that she would have used the benefits if she had remained with PHS. Decision on Remand at 6. The Board's decision in this regard is upheld.
The Board offset Ms. Verbeck's back pay and allowances by her civilian income, which totaled $1,196,993.94. Decision on Remand at 9-10. Ms. Verbeck contends that the Board erred in rejecting her argument that only a quarter, rather than the whole, of her civilian income should offset the back pay and allowances. Pl.'s Mot. at 31. The core of Ms. Verbeck's argument is that she could have worked concurrently at both PHS and in civilian employment, i.e., by moonlighting, and therefore PHS should not fully offset Ms. Verbeck's civilian income since she could have had substantial civilian earnings while still working for PHS. Pl.'s Mot. at 33-34. The government supports the Board's decision, noting that while moonlighting earnings can be exempted from offset in some circumstances, Ms. Verbeck does not qualify for this exception. Def.'s Cross-Mot. at 13 (citing Groves v. United States, 30 Fed. Cl. 28, 37 (1993) ("In military pay cases, moonlighting earnings are not subject to offset if such outside income could have been received by the serviceman prior to discharge. . . . Essentially, if civilian earnings are a substitution for military pay rather than a supplementation of military pay, setoff is mandated."), rev'd on other grounds, 47 F.3d 1140 (Fed. Cir. 1995)). The Board rejected Ms. Verbeck's argument because she never worked at two jobs, either at PHS or since leaving PHS, and the demands of her workstation with PHS would not have permitted her to be employed at a part-time civilian position. Decision on Remand at 8-9. Ms. Verbeck's argument that she could have worked two positions is not based on fact. Instead, her civilian earnings are better characterized as a mitigating substitute for her military income, not a supplementation of such income.
Ms. Verbeck also contends the Board erred when it did not limit the offset by expenses incurred in her civilian work, identifying particularly moving expenses, the loss from selling her condominium to relocate to La Jolla, and parking fees for her new job. Pl.'s Mot. at 29-31. In her view, these costs were associated with, and necessary for, her new job and should be deducted from her offset. Pl.'s Opp'n at 14, 17. In support of her argument, Ms. Verbeck relies on Naekel v. Department of Transp., Fed. Aviation Admin., 850 F.2d 682 (Fed. Cir. 1988), which ruled that documented relocation expenses which would normally be reimbursed by the government when an employee transferred locations should be recognized in calculating an income offset. See Pl.'s Opp'n at 14. In Naekel, the court allowed job search expenses and relocation costs to be applied to reduce offsetting civilian earnings by an improperly terminated government employee who found employment which required him to relocate — expenses which if he were relocating as a government employee, the agency would have paid. 850 F.2d at 685-86. Notably, Ms. Verbeck's moving costs, which totaled $2,351, would to some extent have been covered by PHS under 37 U.S.C. § 477, which provides for a dislocation allowance. The Board characterized the claim for moving costs as a tort claim and failed to consider that the government would normally have compensated Ms. Verbeck for a relocation. The dislocation allowance rate depends upon the particular servicemember's pay grade and dependency status at the time of the move, 37 U.S.C. § 477(c), and may not cover the entirety of her moving costs.
For the reasons stated, Ms. Verbeck's motion for judgment on the administrative record is GRANTED IN PART and DENIED IN PART. In the same vein, the government's cross-motion on the administrative record is DENIED IN PART and GRANTED IN PART.
Ms. Verbeck's termination by the PHS Commissioned Corps is set aside and her separation on June 1, 2002 is invalidated. She shall be reinstated to duty at the appropriate rank. She is awarded $888,281.65 in base pay, $20,602.33 in cost of living allowance, $320,135.40 in basic allowance for housing, $28,301.72 in basic allowance for subsistence, $26,493.76 in specialty pay, $25,765.50 for medical expenses, $13,261.02 for dental expenses, and $808.10 in unpaid annual leave. This award is offset by her civilian earnings of $1,196,993.94, less moving costs of $2,118.10, resulting in an offset amount of $1,194,875.84. The total monetary award is thus $128,773.64, computed through December 31, 2013. The Public Health Service Commissioned Corps shall also provide Ms. Verbeck with commensurate back pay and allowances, consistent with this decision, for the period beginning January 1, 2014 and extending to the date Ms. Verbeck is reinstated to duty.
The clerk is directed to enter judgment in accord with this disposition. Ms. Verbeck is awarded her costs of suit.
It is so
89 Fed. Cl. at 60.
The administrative record of the third and fourth remand proceedings is organized into tabs, but the pages are sequentially paginated. The tabs will be ignored in citations to this record.
When she was separated from the PHS Commissioned Corps, Ms. Verbeck had an unused annual leave balance of 56 days, for which she was paid $11,313.43 in June 2002. Def.'s Cross-Mot. at 25.
