PATCO v. FLRA, 685 F.2d 547, 570 (D.C. Cir. 1982)

[Judge Edwards] [On August 3, 1981, over 11,000 air traffic controllers, employees of the Federal Aviation Administration, went on strike over significant workplace stress and salary/benefits issues.  This action caused the cancellation of of thousands of flights and prompted President Ronald Reagan to issue a statement directing the controllers (represented by the Professional Air Traffic Controllers Organization or PATCO) to return to work or face dismissal.  The White House took the position that strikes by public employees were inherently unlawful and refused to bargain. PATCO officers instructed the membership to hold fast and not return to work.

After 48 hours, all of the controllers were fired.  PATCO leaders were jailed for contempt for a time. Within a week, more than half of the scheduled flights resumed as the FAA and members of the military took over air traffic control tasks. An executive order was issued, banning rehiring of the fired controllers. Several weeks after the strike, a union decertification fight ensued when the Federal Labor Relations Authority’s (FLRA) regional director sought to revoke PATCO’s certification under the Civil Service Reform Act.  The dispute came before the FLRA in the fall.

The PATCO decertification fight drew in the White House, Congress, the FAA and leaders of public labor unions (e.g., teachers and postal worker unions). The feeling was that the future of public labor movement was at stake. At one point, there was a discussion between a public labor advocate and one of the administrative law judges charged with rendering an initial decision in the decertification case.  That discussion, among others, was at issue in the case. 

Within a year, the PATCO decertification dispute reached the D.C. Circuit, but not on the question of public employees’ right to strike.  The case involved a challenge to the numerous ex parte discussions that had taken place, including a dinner between two long time friends:  an administrative law judge on the FLRA panel in the case and an AFL-CIO council member.  At the direction of the FLRA, an administrative fact-finder was appointed to determine whether the discussions had violated the rules limiting ex part communications in the contested administrative adjudication. The report of the administrator was submitted to the court and became the basis for the court’s opinion.]

C. Applicable Legal Standards

1. The Statutory Prohibition of Ex Parte Contacts and the FLRA Rules

…Since FLRA unfair labor practice hearings are formal adjudications within the meaning of the APA, see 5 U.S.C. § 551(7) (1976), section 557(d) governs ex parte communications. Id. § 557(d).

Section 557(d) was enacted by Congress as part of the Government in the Sunshine Act. The section prohibits ex parte communications “relevant to the merits of the proceeding” between an “interested person” and an agency decisionmaker, 5 U.S.C. § 557(d)(1)(A), (B), requires the agency decisionmaker to place any prohibited communications on the public record, id. § 557(d)(1)(C), grants the agency the authority to require an infringing party “to show cause why his claim or interest should not be dismissed, denied, disregarded, or otherwise adversely affected on account of [a] violation,” § 557(d)(1)(D), and defines the time period during which the statutory prohibitions are applicable, § 557(d)(1)(E). The FLRA has adopted rules that, with minor variations, parallel the requirements of section 557(d).

Three features of the prohibition on ex parte communications in agency adjudications are particularly relevant to the contacts here at issue. First, by its terms, section 557(d) applies only to ex parte communications to or from an “interested person.” Congress did not intend, however, that the prohibition on ex parte communications would therefore have only a limited application. A House Report explained:

The term “interested person” is intended to be a wide, inclusive term covering any individual or other person with an interest in the agency proceeding that is greater than the general interest the public as a whole may have. The interest need not be monetary, nor need a person to [sic] be a party to, or intervenor in, the agency proceeding to come under this section. The term includes, but is not limited to, parties, competitors, public officials, and nonprofit or public interest organizations and associations with a special interest in the matter regulated. The term does not include a member of the public at large who makes a casual or general expression of opinion about a pending proceeding.

[…]

Second, the Government in the Sunshine Act defines an “ex parte communication” as “an oral or written communication not on the public record to which reasonable prior notice to all parties is not given, but ... not including] requests for status reports on any matter or proceeding . . .. ”

… Third, and in direct contrast to status reports, section 557(d) explicitly prohibits communications “relevant to the merits of the proceeding.” …

In sum, Congress sought to establish common-sense guidelines to govern ex parte contacts in administrative hearings, rather than rigidly defined and woodenly applied rules. The disclosure of ex parte communications serves two distinct interests. Disclosure is important in its own right to prevent the appearance of impropriety from secret communications in a proceeding that is required to be decided on the record. Disclosure is also important as an instrument of fair decisionmaking; only if a party knows the arguments presented to a decisionmaker can the party respond effectively and ensure that its position is fairly considered. . . . .

2. Remedies for Ex Parte Communications

Section 557(d) contains two possible administrative remedies for improper ex parte communications. The first is disclosure of the communication and its content. The second requires the violating party to “show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of [the] violation.” Congress did not intend, however, that an agency would … dismiss a party’s interest more than rarely. See S.Rep.No. 354, supra, at 37-39, Sunshine Act Sourcebook at 232-34. Indeed, the statutory language clearly states that a party’s interest in the proceeding may be adversely affected only “to the extent consistent with the interests of justice and the policy of the underlying statutes.” n. 30

Under the case law in this Circuit, improper ex parte communications, even when undisclosed during agency proceedings, do not necessarily void an agency decision. Rather, agency proceedings that have been blemished by ex parte communications have been held to be voidable.  In enforcing this standard, a court must consider whether, as a result of improper ex parte communications, the agency’s decisionmaking process was irrevocably tainted so as to make the ultimate judgment of the agency unfair, either to an innocent party or to the public interest that the agency was obliged to protect. In making this determination, a number of considerations may be relevant: the gravity of the ex parte communications;  whether the contacts may have influenced the agency’s ultimate decision; whether the party making the improper contacts benefited from the agency’s ultimate decision; whether the contents of the communications were unknown to opposing parties, who therefore had no opportunity to respond; and whether vacation of the agency’s decision and remand for new proceedings would serve a useful purpose. Since the principal concerns of the court are the integrity of the process and the fairness of the result, mechanical rules have little place in a judicial decision whether to vacate a voidable agency proceeding. Instead, any such decision must of necessity be an exercise of equitable discretion.

D. Analysis of the Alleged Ex Parte Communications with FLRA Members

[T]he vast majority of the reported contacts between FLRA Members and persons outside the Authority are not troubling. They relate to inquiries about the expected date of issuance of the FLRA’s opinion. . . and other communications unrelated to the merits of the case.

After extensive review of the three troubling incidents … we believe that they too provide insufficient reason to vacate the FLRA Decision . . . We conclude that at least one and possibly two of the contacts documented by the A. L. J. probably infringed the statutory prohibitions on ex parte communications. . . .  Nevertheless, we agree with A. L. J. Vittone that the ex parte contacts here at issue had no effect on the ultimate decision of the FLRA. Moreover, we conclude that . . . .to vacate and remand would be a gesture of futility.

[Discussion of ALJ Vittone’s section of the report]

. . . I have found that the telephone calls on August 13, 1981 from Secretary Lewis to Members Frazier and Applewhaite may have had some undetermined effect on their decision to limit the time for filing exceptions to the administrative law judge’s decision. Both members testified that the calls had no effect on their August 18, 1981 decision. However, the Secretary told Member Frazier that he wanted expeditious processing of the case within the FLRA’s rules and he stated his concern to Member Applewhaite that the case not be delayed. Both members described the Secretary’s call as unusual. Later that same day, August 13, the FAA filed a motion to limit the time for filing exceptions from 25 to 7 days. It is quite likely that the FAA motion was filed in accordance with the advice concerning the FLRA regulations given to Mr. Lewis by Member Applewhaite. . .. However, it should be noted that I do not believe that the Secretary’s calls had any effect on the merits of final decision in the PATCO case.

I find that the meeting between Member Applewhaite, General Counsel Gordon, and Ellen Stern on August 10, 1981 may have been a prohibited ex parte communication. It is clear that the Stern memorandum concerned the PATCO case. . .. As noted, Mr. Gordon is the FLRA General Counsel. The General Counsel is defined as a “person outside this agency” when his representative is prosecuting an unfair labor practice proceeding. . .. Even Member Applewhaite testified at that time that he expected exceptions to be filed to the judge’s decision. (Tr. 944) In view of all of the above, and even though Applewhaite and Gordon described the discussion as abstract, the discussion may have been a prohibited ex parte communication. However, the discussion was very short, general in nature, and very early in the processing of the PATCO case. Accordingly, I do not believe that it had any effect upon Member Applewhaite’s deliberations and final decision in the PATCO case.

. . . .

Mr. Shanker is closely associated with the AFL-CIO. He is president of one of the AFL-CIO’s affiliated unions and sits on the Executive Council of the AFL-CIO. The AFL-CIO was an amicus curiae party to the proceeding and participated in the oral argument before the FLRA. The AFL-CIO is clearly an interested party in the PATCO proceeding. Therefore Mr. Shank-er may also be an interested party outside the FLRA.

It is for those reasons that the Shanker-Applewhaite dinner may have been an unauthorized communication in violation of the FLRA ex parte communications regulations…. It is clear that Mr. Shanker’s message to Mr. Applewhaite was that revocation of certification was a drastic remedy out of proportion to the violation. However, as stated in my findings, I do not believe that the dinner had any effect on the final decision of the FLRA in the PATCO case. …

The most troubling part of this proceeding has been the conflict between the testimony of Members Frazier and Applewhaite with respect to the Shanker-Applewhaite dinner. On the whole, I find Mr. Shanker’s testimony regarding that dinner to be credible. There is no direct evidence that Mr. Shanker … made any promises or threats to Applewhaite. . . .I believe that Member Frazier was troubled by Member Applewhaite’s statements at the September 22 meeting and left that meeting with the impression that the events at the dinner has caused Applewhaite to change his position from revocation to suspension of PATCO’s certification.  . . . On the other hand, Member Applewhaite’s testimony, in substantial parts, was confusing, contradictory, and in some respects, incredible

. . . . . Member Applewhaite disputed many of the statements attributed to him in the FBI report. (ALJ, Ex. 1) However, . . .. both agents who interviewed Member Applewhaite testified credibly that it was an accurate reflection of the interview. Member Applewhaite testified that he never thought about reappointment until last December or January, 1982.  Yet he … raised the subject with Mr. Shanker on September 21. Further, he discussed the possibility of becoming Chairman with Senator Laxalt’s Administrative Aide on August 6, 1981 . . . Further, Member Applewhaite could not recall any of the details of his 12 minute phone call with Mr. Frazier on October 7.  Finally, Member Applewhaite testified that the FBI agents appeared to understand his situation and … praised him and told him he had courage.  Agent Knisley denied making any such statements, and it is extremely doubtful that FBI agents praise the people they are investigating.

SUMMARY

Accordingly, it is found that the possible ex parte contacts and approaches described at the hearing did not have any effect on the final decision of the members of the FLRA in the PATCO cáse.

[MacKINNON,'Circuit Judge]

(concurring).

. . . .

The number of ex parte contacts that were disclosed at the remand hearing is appalling, as are the statements by counsel that such contacts were nothing more than what is normal and usual in administrative agencies . . . In deciding such cases the government officials act in a quasi-judicial capacity and ex parte contacts that attempt to “back door” the adjudicative process, with respect to the merits or discipline, are highly improper and illegal. In this connection 18 U.S.C. § 1505 should be noted. This section of the Criminal Code provides that it is an offense if one “corruptly ... endeavors to influence, obstruct or impede the due and proper administration of the law under which [a] proceeding is being had before [an] ... agency of the United States ...” (emphasis added). . . . Shanker argues that his dinner with … Applewhaite “had no effect on the decision” and hence is of no moment. That is like the man charged with attempted murder asserting the indictment should be dismissed because his shot missed the intended victim. . . .

[Some years after the PATCO strike, the order banning the rehiring of the fired controllers was lifted.  Few controllers ever returned to their previous positions.]