DEPARTMENT OF THE NAVY, PETITIONER V. THOMAS E. EGAN

   No. 1552

   In the Supreme Court of the United States

   October Term, 1986

   Petition for a Writ of Certiorari to the United States Court of
Appeals for the Federal Circuit

   The Solicitor General, on behalf of the Department of the Navy,
petitions for a writ of certiorari to review the judgment of the
United States Court of Appeals for the Federal Circuit in this case.

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statutory provisions involved
   Statement
   Reasons for granting the petition
   Conclusion
   Appendix A
   Appendix B
   Appendix C
   Appendix D
   Appendix E
   Appendix F
   Appendix G

                            OPINIONS BELOW

   The opinion of the court of appeals (App., infra, 1a-42a) is
reported at 802 F.2d 1563.  The opinion of the Merit Systems
Protection Board (App., infra, 43a-60a) is reported at 28 M.S.P.R.
509.  The earlier decision by a presiding official of the MSPB (App.,
infra, 61a-68a) is unreported.

                             JURISDICTION

   The judgment of the court of appeals (App., infra, 69a) was entered
on October 1, 1986.  A petition for rehearing and a suggestion for
rehearing en banc were denied on November 26, 1986 (App., infra, 71a),
and December 8, 1986 (App., infra, 70a), respectively.  On February
18, 1987, the Chief Justice extended the time for filing a petition
for a writ of certiorari to and including March 26, 1987.  The
jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

                     STATUTORY PROVISIONS INVOLVED

   The pertinent statutory provisions, 5 U.S.C. 7512, 7513, 7532, and
7701, are set forth in App., infra, 72a-75a.

                          QUESTION PRESENTED

   Whether, in the course of reviewing the removal of an employee for
failure to maintain a required security clearance, the Merit Systems
Protection Board is authorized by statute to review the substance of
the underlying decision to deny or revoke the security clearance.

                               STATEMENT

   1. Respondent Thomas E. Egan was hired at the Trident Naval Refit
Facility in Bremerton, Washington, on the condition that he
subsequently receive a security clearance (App., infra, 1a-2a).  The
position for which he was hired, Laborer Leader, was "developed to
support quick turnaround repair, replenishment and systems checkout of
the TRIDENT submarine over its extended operating cycle" (C.A. App.
3).  /1/ All positions at the facility were classified as sensitive,
requiring incumbents to "qualify for and maintain eligibility for a
security clearance as a condition of employment" (id. at 35).  In
particular, the position for which respondent was hired entailed
"access to classified information regarding arrival/departure of
submarines and access to classified/restricted areas of equipment
aboard the submarines" (id. at 44).

   Following a National Agency Check, the Department of the Navy
determined to "deny/revoke" respondent's security clearance based upon
various criminal records in California and Washington reflecting
convictions for assault and for being a felon in possession of a gun,
and based upon his failure to disclose on his application for federal
employment two convictions for carrying a loaded firearm.  The Navy
also relied upon respondent's own statements that he had had drinking
problems in the past and that he had served the final twenty-eight
days of one sentence in an alcohol rehabilitation program.  App.,
infra, 2a-3a.

   Respondent answered the Navy's notice of denial of his clearance,
asserting that he had paid his debt to society for his convictions,
that he had not listed convictions older than seven years because he
did not interpret the employment form as requiring that information,
and that he believed that alcohol had not been a problem for the three
years preceding the clearance determination.  He also provided
favorable material from supervisors concerning his background and
character.  The Director of Naval Civilian Personnel Command, after
considering this response, stated that the information provided did
"not sufficiently explain, mitigate, or refute the reason(s) on which
the intended denial/revocation action is based" (App., infra, 3a).
Accordingly, the decision to revoke respondent's security clearance
was affirmed.  Because respondent was no longer eligible for the
position for which he had been hired, and because reassignment to a
nonsensitive position at the Facility was not possible, the Navy
issued a notice of proposed removal.  Id. at 3a-4a.

   2. The removal became effective on July 15, 1983.  Respondent then
sought review of his removal by the Merit Systems Protection Board
(MSPB or Board) pursuant to 5 U.S.C. 7513(d).  /2/

   a. The MSPB presiding official ruled that the Board had authority
to review the propriety of the underlying security clearance denial.
She ruled that the agency must define specific criteria used in its
security clearance decisions and show that the criteria are rationally
related to national security concerns.  Citing the Board's decision in
Schwartz v. Department of the Army, 16 M.S.P.R. 642 (1983), she stated
that the agency must show by a preponderance of evidence that the
employee's acts precipitating the denial of the security clearance
actually occurred and that it must also show "how an employee's
alleged misconduct has an actual or potentially (sic) detrimental
effect on national security interests" (App., infra, 63a).  The
presiding official held that the agency must persuade the Board that
its decision to deny or revoke a security clearance was "reasonable"
(ibid.).  Id. at 4a-5a, 62a-64a.

   The presiding official concluded that it was not possible to
determine whether the Navy's determination to deny respondent's
security clearance was reasonable because the Navy did not submit a
list of criteria used in making clearance determinations or justify
such criteria, and did not present evidence that it had
"conscientiously weighed" the circumstances surrounding respondent's
misconduct and "reasonably balanced" the misconduct against national
security interests (App., infra, 65a).

   b. The Navy petitioned the full Board for review of the presiding
official's determination.  The MSPB had before it numerous petitions
for review raising similar issues of law and treated the present case
as the lead case.  The MSPB formally invited and received briefs from
interested agencies, employee organizations, and others concerning the
proper scope of its review of security clearance determinations, the
appropriate remedy if review is available and the determination is
adverse to the agency, and whether 5 U.S.C. 7532 is the exclusive
authority for removals based upon national security concerns (49 Fed.
Reg. 48623 (1984) and 50 Fed. Reg. 2355 (1985)).

   The Board found that the statutory language giving it jurisdiction
to review adverse personnel actions does not indicate the extent of
the Board's authority to review underlying clearance determinations
and that the legislative history of the Civil Service Reform Act of
1978 (CSRA), 5 U.S.C. 1201 et seq., contains no indication of
congressional intent to permit Board review of the merits of such
determinations.  It noted that security clearance determinations are
committed by Executive Order No. 10,450, 3 C.F.R. 936 (1949-1953),
reprinted in 5 U.S.C. 7311 note (App., infra, 75a-86a), to the
discretion of executive agency heads charged with the protection of
national security information;  that the Board had, analogously,
declined to review certain military decisions and other determinations
committed to other bodies;  and that review of security clearance
determinations would "inevitably" entail "exposition of highly
sensitive materials and Board determinations on matters of national
security id. at 53a).  The Board declined to follow Hoska v.
Department of the Army, 677 F.2d 131 (D.C. Cir. 1982), on the ground
that while the court there reviewed the merits of a security clearance
revocation, it did not discuss the authority of the Board to do so and
it applied a standard of review different from that applicable to
Board review.  /3/ App., infra, 6a-7a, 46a-54a.

   The Board concluded that it "has no authority to review the
agency's stated reasons for the security clearance determination" in
the course of reviewing an otherwise reviewable adverse personnel
action resulting in whole or part from the clearance determination
(App., infra, 54a).  The Board added, "However, (we) will review the
procedures utilized by the agency to ensure that the agency afforded
the appellant procedural due process" (ibid.).  Specifically, the
Board held that where an adverse personnel action is based upon the
denial or revocation of a security clearance, the Board's review would
be limited to determining that the position required a security
clearance, that the employee did not qualify for or maintain
eligibility for that clearance, and that the agency had afforded the
employee procedural due process (which the Board held to consist, at a
minimum, of notice, a statement of reasons for a negative decision,
and an opportunity to respond) before taking adverse action (ibid.).
Applying these requirements to the present case, the Board sustained
the Navy's action denying respondent's clearance (id. at 58a-60a).
/4/

   3. Respondent appealed to the United States Court of Appeals for
the Federal Circuit.  By a divided vote, the court reversed the
Board's decision that it has no authority to review the substance of
security clearance determinations underlying removals and other
adverse personnel actions (App., infra, 1a-42a).

   a. The court of appeals agreed with the Board that 5 U.S.C. 7532 is
not the sole authority for removals based upon national security
concerns (App., infra, 11a-12a).  It held, however, that when an
agency elects to proceed with a removal without invoking and following
Section 7532, its action "carries Board review" (App., infra, 12a),
including review of the merits of the underlying agency determination
to revoke a security clearance (id. at 12a-22a).  The court stressed
that 5 U.S.C. 7701, which prescribes procedures governing Board review
of removals and other adverse personnel actions, does not expressly
exclude or preclude review of underlying security clearance
determinations.  Therefore, the court concluded, there is a "strong"
presumption in favor of such review (App., infra, 13a).  "In sum," the
court said, "the Board is required to review the agency action taken
against (respondent) with the same full process and standards and
scope of review, established by law and precedent, as any other
adverse action taken under Section 7512" (id. at 19a).

   Citing Hoska, the court stated that the fact that security
clearance determinations are "committed to the sound discretion of the
agency" (App., infra, 24a) does not make them unreviewable.  It stated
that since the Navy's regulations specify the criteria used in making
clearance determinations, the Board is capable of ensuring that those
criteria are met and that a nexus exists between the criteria and the
employee's ability to safeguard classified information (id. at
18a-19a, 24a).  The court then remanded to the Board for such review,
stating that the question of an appropriate remedy for respondent,
should the Board rule that a security clearance was improperly denied,
was not yet ripe for the court's review (id. at 22a-25a).

   b. Chief Judge Markey dissented (App., infra, 26a-42a).  He noted
that respondent had been given all the procedural protections to which
he was entitled (id. at 30a-32a) and that respondent did not contest
any of the facts upon which the Navy had based its determination but
simply disagreed with the Navy's judgment that he should not be given
a security clearance (id. at 26a-28a).  Chief Judge Markey
characterized the decision as an instruction to the MSPB to
second-guess the wisdom of security clearance determinations,
effectively transferring a discretionary decision vested in executive
agencies with responsibility to protect classified information to a
body that has neither the responsibility nor the expertise to make
such decisions (id. at 32a-33a).  He suggested that, by severely
diluting the ability of responsible agency heads to protect national
security information, the panel's decision raised separation of powers
concerns as well (id. at 37a-39a).  He also noted that the Board would
be unable to provide an appropriate remedy should it disagree with the
merits of a security clearance determination (id. at 40a-42a).

                   REASONS FOR GRANTING THE PETITION

   The MSPB ruled, after full and careful consideration, that it does
not have authority to review the substance of an agency's
determination not to issue a security clearance.  The Federal Circuit
reversed and directed the MSPB to "review the agency action * * * with
the same full process and standards and scope of review, established
by law and precedent, as any other adverse action taken under Section
7512" (App., infra, 19a);  these standards include 5 U.S.C.
7701(c)(1)(A), which provides that the MSPB may sustain the agency
action only if it is supported by a "preponderance of the evidence"
presented to the agency at a hearing.  The decision below thus
subjects every denial of a security clearance to a civilian government
employee to de novo review whenever the denial leads to a suspension,
removal, or other personnel action reviewable by the MSPB under
Section 7513(d).  The decision stands as the dispositive ruling on
this issue, because the Federal Circuit has exclusive jurisdiction
over government petitions and, except in certain discrimination cases,
over employee petitions for review of MSPB decisions (see 5 U.S.C.
7703(b) and (d)).  The decision will have an important adverse effect
on the ability of government agencies to protect the national
security, and we believe it is plainly wrong.

   1. The President of the United States has the constitutional power
and responsibility to determine whether an individual is sufficiently
trustworthy to occupy a position in the executive branch that will
give him access to sensitive national security information.  The
President has delegated this responsibility to the heads of certain
agencies whose primary functions depend upon the generation or use of
sensitive information (see Exec. Order No. 12,356, Section 4.1(a), 3
C.F.R. 174 (1983)), and he has required the heads of all executive
agencies to establish personnel security programs to protect national
security information (see Exec. Order No. 10,450, 3 C.F.R. 936
(1949-1953)).  /5/

   Under a long established standard, the grant of a security
clearance requires an affirmative act of discretion based on a high
degree of confidence on the part of the granting official.  The
general standard is that a clearance may be granted only when "clearly
consistent with the interests of the national security." See, e.g.,
Exec. Order No. 10,450, Sections 2, 7;  OPNAVINST /6/ 5510.1F, para.
16-100(1) (June 15, 1981) (C.A. App. 26);  10 C.F.R. 710.10(a)
(Department of Energy regulation);  32 C.F.R. 156.3(a) (Department of
Defense regulation);  Department of Defense Directive 5200.2-R, para.
6-100(a) (Dec. 1979).  It is possible to state both general
considerations (e.g., "loyalty, reliability, and trustworthiness" (see
OPNAVINST 5510.1F, para. 16-100(1b) (June 15, 1981) (C.A. App. 26)) on
which the decision is based and some specific facts that are pertinent
(e.g., "criminal or dishonest conduct," "deception or fraud in
applying for enlistment or appointment," "use of intoxicating
beverages to excess," other "conduct that indicates poor judgment"
(see OPNAVINST 5510.1F, para. 16-102 (June 15, 1981) (C.A. App.
28-30)), but it is often not possible to identify or quantify all of
the factors that make it impossible to reach an affirmative judgment
in a particular case.

   A clearance determination is not an attempt to judge an individual
but an attempt to predict his future behavior, to assess whether he is
likely, through disloyalty or venality or carelessness or under the
compulsion of circumstances beyond his control, to compromise
sensitive information.  The prediction may be based upon the
individual's own past or present conduct, or it may be based upon
concerns unrelated to an individual's conduct (for example, where an
individual has close relatives residing in a country that is hostile
to the United States).  These necessarily subjective judgments must be
made by those with expertise in making the necessary predictions and
-- especially because under the "clearly consistent" standard the
clearance may not be granted unless an affirmative prediction can be
made with confidence -- it is not reasonably possible for an outside,
inexpert body to review the substance of such a judgment.

   Accordingly, this Court has recognized that with respect to
employees in sensitive positions it is reasonable that the "agency
head who must bear the responsibility for the protection of classified
information committed to his custody should have the final say in
deciding whether to repose his trust in an employee who has access to
such information." Cole v. Young, 351 U.S. 536, 546 (1956) (emphasis
added).  /7/ See also Adams v. Laird, 420 F.2d 230, 239 (D.C. Cir.
1969), cert. denied, 397 U.S. 1039 (1970) (the standard to be observed
in security clearance determinations "is for the President to make in
the discharge of his executive functions");  Greene v. McElroy, 254
F.2d 944, 949 (D.C. Cir. 1958), rev'd on other grounds, 360 U.S. 474
(1959) ("wide latitude in designating persons qualified for access to
classified defense information" is a "necessary adjunct to the power
and duty to defend the security of the Nation").

   By 1978, when the Civil Service Reform Act was enacted, there had
never to our knowledge been a case in which a denial of a security
clearance to a government employee had been reviewed on the merits,
and it appeared well established that an agency's decision to deny
such a security clearance was not subject to outside substantive
review.  As the D.C. Circuit had put the matter, "in the case of a
Government employee the courts will not inquire into the merits of a
dismissal (for want of a security clearance):  they will inquire
whether required procedures have been observed, or an applicable
statute violated, but they will not -- for example -- attempt to
determine whether an employee is or is not a 'security risk,' or is
'untrustworthy.'" Greene v. McElroy, 254 F.2d at 953 (citations
omitted);  see Vitarelli v. Seaton, 253 F.2d 338, 342-343 (D.C. Cir.
1958), rev'd on other grounds, 359 U.S. 535 (1959);  /8/ see also,
e.g., Cafeteria Workers v. McElroy, 367 U.S. 886 (1961) (Navy may
summarily exclude from its base a civilian concessionaire worker
failing to meet security requirements);  United States v. Marchetti,
466 F.2d 1309, 1318 (4th Cir.), cert. denied, 409 U.S. 1063 (1972)
(declining to review secrecy classifications).  /9/

   2. The court of appeals ruled that, nevertheless, provisions of the
Civil Service Reform Act, 5 U.S.C. 7512 and 7513, which provide for
MSPB review of removals and certain other adverse personnel actions
affecting civilian employees of the government, require the MSPB to
review the denial of a security clearance on the merits whenever such
a denial is the basis for a reviewable adverse action.  The court
pointed to no specific statutory authority for such review.  Its
decision rests instead on a supposed presumption of MSPB review
arising from the failure of the Act to preclude it expressly (App.,
infra, 12a-13a).  This decision was wrong.

   The statute does not command or imply review of security clearance
determinations.  It provides for review of a removal, but it neither
provides nor suggests a presumption that all other agency decisions
become reviewable on their merits whenever they lead, immediately or
eventually, to a reviewable removal.  To the contrary, the Board,
affirmed by the Federal Circuit, has frequently treated such other
agency decisions, particularly when made by the military, as not
subject to MSPB review on the merits, even when a consequence of such
a decision is that the employee ceases to meet the qualifications for
his job and therefore becomes subject to removal.  For example, in
Zimmerman v. Department of the Army, 755 F.2d 156 (Fed. Cir. 1985), a
civilian employee of the Army had challenged her removal resulting
from her transfer out of her Army Reserve unit.  The MSPB sustained
the removal on the ground that after the transfer the employee no
longer met the job specifications, but it declined to review the
transfer on its merits.  Affirming, the court of appeals said that the
"Board does not have jurisdiction to examine military assignments and
transfers" (id. at 157).  Similarly, in Buriani v. Department of the
Air Force, 777 F.2d 674, 677 (Fed. Cir. 1985), the court held that the
Board could not examine the reasons for an Air Force Reserve officer's
failure to be promoted, even though the nonpromotion caused the
individual to be disqualified for, and therefore to be demoted from,
his Air Force civilian position.  See also Tennessee v. Dunlap, 426
U.S. 312 (1976) (affirming discharge of a National Guard employee
whose job was conditioned on enlistment in the National Guard, without
review of the allegedly arbitrary refusal of the National Guard to
reenlist the employee in order to circumvent civil service
protections).  As the Board recognized here, these decisions "manifest
a proper Board concern against treading into areas which are sensitive
by virtue of their national security implications" (App., infra, 52a).
 /10/

   The legislative history of the Civil Service Reform Act contains no
indication that Congress intended to alter the understanding that
denials of security clearances are not subject to substantive review.
To the contrary, when the Senate and House committees listed the major
changes wrought by the CSRA, they did not mention that agency security
clearance determinations were now to be subject to review.  See S.
Rep. 95-969, 95th Cong., 2d Sess. 46 (1978);  H.R. Rep. 95-1403, 95th
Cong., 2d Sess. 21-22 (1978).  In the absence of affirmative evidence
of an intent to make such a dramatic change, the presumption
(expressly suggested in the legislative history) is that the statute
codified without change the federal employee appeal rights that had
previously existed only by Executive Order.  /11/ Cf. Heckler v.
Chaney, 470 U.S. 821, 832 (1985) (traditional commitment of decision
to agency discretion prior to enactment of Administrative Procedure
Act bears on whether APA review is appropriate).

   The notion that Congress intended, without saying so expressly, to
subject security clearance determinations to outside review on the
merits, is all the more implausible because such decisions are
inherently unsuitable for outside review.  They are, as noted above,
predictive in nature and inherently discretionary, requiring an
affirmative determination by the reviewing official that he has high
confidence in the employee.  Such decisions "involve a complicated
balancing of a number of factors which are peculiarly within (the
agency's) expertise" (Heckler v. Chaney, 470 U.S. at 831).  Security
clearance determinations rest on the subjective judgment of those
experienced in making predictions concerning risks to national
security.  They are, in this respect, much like the determination
whether disclosure of particular information might compromise an
intelligence source or method.  Each decision "will often require
complex political, historical, and psychological judgments," and the
weighing of multiple factors requires the decisionmakers to "be
familiar with 'the whole picture * * * .'" CIA v. Sims, 471 U.S. 159,
176, 179 (1985) (citation omitted).  Thus, "'"(w)hat may seem trivial
to the uninformed, may appear of great moment to one who has a broad
view of the scene and may put the questioned item of information in
its proper context"'" (id. at 178 (citations omitted)).  See also
Halperin v. CIA, 629 F.2d 144, 150 (D.C. Cir. 1980) (random bits of
information "may aid in piecing together other bits of information
even when the individual piece is not of obvious importance in
itself").  Just as courts "are ill-equipped to become sufficiently
steeped in foreign intelligence matters to serve effectively in the
review of secrecy classifications in that area," United States v.
Marchetti, 466 F.2d at 1318, so too are they ill-equipped to review
the determinations of who may have access to such classified
information.  See Greene v. McElroy, 254 F.2d at 953;  Adams v. Laird,
420 F.2d at 230.  The decision, therefore, is one that is committed by
"practical necessit(y)" to agency discretion and is inappropriate for
outside review because there is, in effect, no law to apply.  Cf. CIA
v. Sims, 471 U.S. at 169;  Heckler v. Chaney, 470 U.S. at 827-832.

   Finally, the standard for MSPB review of removals, prescribed in 5
U.S.C. 7701(c)(1)(B), is so obviously inappropriate for review of the
merits of security clearance determinations that Congress cannot have
intended to require review under that section.  Section 7701(c)(1)(B)
provides that the agency's decision shall be sustained only if it is
"supported by a preponderance of the evidence." But as Congress was
well aware when it enacted that section, /12/ a security clearance may
only be granted if it is "clearly consistent with the interests of the
national security." See Exec. Order No. 10,450, Sections 2, 7.  The
agency must make an affirmative determination, and all doubts are to
be resolved against the granting of the clearance.  It simply makes no
sense to ask whether the failure to grant a clearance is supported by
a preponderance of the evidence.  /13/

   At a different point in its opinion, the court of appeals (perhaps
with some awareness of the implications of its holding) asserted that
as an appellate authority the Board could not substitute its judgment
for that of the agency.  App., infra, 24a.  But while seeking thus to
give some measure of reassurance about what it was deciding, the court
was forced to chop off the Board's head and feet to get it to fit the
bed the court had made for it:  the fact of the matter is that MSPB
review of agency adverse personnel decisions under Section 7701
involves a full evidentiary hearing and de novo review of both factual
and legal questions, and the agency is requi ed to prove the propriety
of its action by a preponderance of the evidence before the MSPB.  See
5 U.S.C. 7701(a), (c)(1)(B), and (c)(2).  /14/ The fact that this
procedure is obviously unsuited to review of the merits of security
clearance determinations proves not that the court should redesign
that procedure but that Congress could not have intended to subject
the merits of security clearance determinations to Board review.

   3. Section 7532 provides that "the head of an agency" may remove an
employee "when he determines that removal is necessary or advisable in
the interests of national security" (5 U.S.C. 7532(b) and (c)).  Such
a removal is not subject to MSPB review (see 5 U.S.C. 7512(A)).  The
court of appeals found the availability of the Section 7532 procedure
a "compelling" (App., infra, 18a) argument in favor of MSPB review of
the denial of a security clearance in any removal case where the
Section 7532 procedure is not followed.  This is a non sequitur.

   Section 7532 is a drastic remedy, not appropriate for every denial
of a security clearance, and the court of appeals expressly recognized
(App., infra, 12a) that an agency may remove an employee for cause,
for failing to obtain a required security clearance, without invoking
Section 7532.  Section 7532 requires an affirmative determination, by
the head of the agency, /15/ that the removal is in the interests of
national security;  once that determination has been made, the removal
is not subject to any outside review.  By contrast, a security
clearance may be granted only if the agency is able to make an
affirmative determination that the grant of a clearance is "clearly
consistent with the interests of national security" (compare OPNAVINST
5510.1F, para. 16-100(1a) with para. 16-100(1b) (C.A. App. 26)).  But
a removal, based on the agency's inability to make such a finding, is
subject to MSPB review that provides important protections:  it
affords the employee an outside check on whether the agency afforded
him procedural due process, including notice, a statement of reasons
for the denial, and an opportunity to respond.  /16/ The question here
is whether that outside review should also include the substance of
the underlying security clearance determination;  Section 7532 has no
bearing on that question except as it demonstrates Congress's
awareness that determinations based on national security
considerations are not appropriate for outside review.

   4. The court of appeals' decision warrants this Court's review for
three reasons.

   First, it appears to be the dispositive court of appeals
consideration of this issue.  This case was the test case on the issue
at the MSPB, and all interested agencies and other persons were
formally invited to participate in filing briefs.  Decisions of the
MSPB on review of adverse personnel actions are subject to review at
the request of the government only in the Federal Circuit (see 5
U.S.C. 7703(d)).  The same is true, with limited exceptions, for
review at the request of the employee (see 5 U.S.C. 7703(b));
obviously, no employee with a choice would be well advised to pursue
this issue in a different circuit.

   Second, national security interests are directly involved, not only
because MSPB second-guessing will lead to poorer clearance decisions
but also because, as the Board noted (App., infra, 52a-53a), the
process of MSPB review of security clearance determinations would
itself threaten the disclosure of classified information.  /17/ Even
where litigation protections for particular information can be
devised, albeit at a cost to adversarial proceedings (see, e.g.,
Molerio v. FBI, 749 F.2d 815 (D.C. Cir. 1984) (state secrets
privilege)), there remains a considerable risk that the integrity of
personnel security programs may be compromised.  For example, when an
agency must explain, in case after case, how or why certain factors
compelled the revocation or denial of a security clearance, it
inevitably will be painting a rather clear picture to hostile entities
of the factors that are of concern in security determinations, and
thus will increase their ability to penetrate our military and
intelligence agencies undetected.  Cf. CIA v. Sims, 471 U.S. at 179
("It is conceivable that the mere explanation of why information must
be withheld can convey valuable information to a foreign intelligence
agency");  Doe v. Casey, 796 F.2d 1508, 1532 (D.C. Cir. 1986)
(Buckley, J., dissenting) ("To intrude however deferentially into the
(CIA's) most sensitive personnel decisions entails the inevitable risk
of unwittingly comprising national intelligence operations through the
forced disclosure of information whose possible significance a court
is not capable of assessing"), petition for cert. pending, No.
86-1294.

   Third, the issue can be expected to arise in a large number of MSPB
proceedings, each of which is in turn subject to judicial review.  The
Department of the Navy has advised us that it alone will deny or
revoke approximately 200 civilian employee or applicant clearances
this year.  Other branches of the armed services and civilian agencies
with sensitive positions will also deny or revoke clearances.  While
only some of these denials or revocations will lead to adverse
personnel actions against employees entitled to MSPB review, see
generally 5 U.S.C. 7511, it is clear that if the decision below is
allowed to stand the potential number of occasions for MSPB review on
the merits of security clearance determinations is quite large.  /18/

                              CONCLUSION

   The petition for a writ of certiorari should be granted.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   RICHARD K. WILLARD

      Assistant Attorney General

   LOUIS R. COHEN

      Deputy Solicitor General

   ROGER CLEGG

      Assistant to the Solicitor General

   BARBARA L. HERWIG

   FREDDI LIPSTEIN

      Attorneys

   MARCH 1987

   /1/ "C.A. App." cites are to the appendix to the government's brief
in the court of appeals.

   /2/ 5 U.S.C. 7532 provides that "the head of an agency" may suspend
an employee "when he considers that action necessary in the interests
of national security" and after specified procedures may remove a
suspended employee when "he determines that removal is necessary or
advisable in the interests of national security." Removals under
Section 7532 are not subject to MSPB review (see 5 U.S.C. 7512(A)).
However, the Navy did not invoke Section 7532;  accordingly, the
removal action was subject to MSPB review as provided in 5 U.S.C.
7513.

   /3/ In Hoska, a civilian employee of the Army was terminated for
failure to maintain a security clearance necessary for his position.
The MSPB affirmed the termination.  The District of Columbia Circuit
(which had jurisdiction to review the MSPB decision because the matter
arose prior to the Federal Courts Improvement Act of 1982, 28 U.S.C.
1295(a)(9)) reversed.  Although it purported to require only "some
rational nexus between the adverse action taken and the government's
articulated reasons for the action" (677 F.2d at 137), the court was
in some instances clearly second-guessing the security clearance
determination.  See, e.g., id. at 143-144 (footnote omitted) ("(e)ven
if an incident such as this one could rationally be viewed as
involving 'immoral or notoriously disgraceful conduct,' it is not
clear from the Army's evidence that it is of a serious enough degree
-- an inquiry mandated by the Army Regulation -- to justify revocation
of petitioner's security clearance");  see also 677 F.2d at 144 n.21.
The government did not seek certiorari, in part because future appeals
from MSPB decisions would be to the Federal Circuit.

   MSPB presiding officials relied on Hoska in holding that they have
authority to second-guess security clearance determinations and to
order clearances restored.  See Skees v. Department of the Navy, No.
PHO7528410257 (M.S.P.B. June 14, 1984), slip op. 13;  Peterson v.
Department of the Navy, No. BNO7528410010 (M.S.P.B. Feb. 14, 1984),
slip op. 8;  Irving v. Department of the Navy, No. BNO7528410005
(M.S.P.B. Feb. 3, 1984), slip op. 9.  It was such decisions generated
by Hoska that led the Board to examine the scope of its review
authority in this case.

   /4/ In light of its determination of the appropriate extent of
review, the Board concluded that it would not in any event have
authority to order an agency to restore a security clearance (App.,
infra, 55a).  Where an agency failed to provide proper procedures, the
Board's remedy would be to order the employee restored to pay status
and to remand to the agency to remedy the procedural defects (id. at
56a-58a).  The Board also concluded that 5 U.S.C. 7532 is not the
exclusive statutory authority for removals based upon national
security concerns (App., infra, 55a-56a).

   /5/ Executive Order No. 10,450, promulgated in 1953, provides in
part:

         Sec. 2. The head of each department and agency of the
      Government shall be responsible for establishing and maintaining
      within his department or agency an effective program to insure
      that the employment and retention in employment of any civilian
      officer or employee within the department or agency is clearly
      consistent with the interests of the national security.

   While it sets out detailed procedures, the order nowhere refers to
judicial review of adverse determinations.  To the contrary, Section
11 of the order provided that after the effective date of the order,
"the Loyalty Review Board * * * shall not accept agency findings for
review, upon appeal or otherwise."

   /6/ "OPNAVINST" refers to "Chief of Naval Operations Instructions"
-- i.e., Navy regulations.

   /7/ In Cole, the Court ruled that the Act of August 26, 1950, as
extended to other departments and agencies by Executive Order No.
10,450, did not authorize the dismissal of an employee from a
nonsensitive position.  In the present case, there is no doubt that
the position in question is a sensitive one, to which the Executive
Order No. 10,450 standard ("clearly consistent with the interests of
the national security") is applicable.  This case does not present the
question whether it is ever appropriate for the MSPB to review an
agency's determination that a position is a sensitive one.

   /8/ The reversal in Greene was based on the absence of presidential
or congressional authorization for the procedure leading to the
dismissal.  The reversal in Vitarelli was based on procedural flaws in
the dismissal.  This Court did not contradict the court of appeals'
statements in those cases that the merits of security clearance
determinations are unreviewable.  The government has not in the
present case challenged the authority of the MSPB to review the
removal and determine, as it did, that the employee received
procedural due process in connection with the security clearance
determination.

   /9/ In several cases involving employees of defense contractors,
courts of appeals had suggested that there must be a "sufficiency of
proof of a nexus between the conduct involved and security clearance."
Gayer v. Schlesinger, 490 F.2d 740, 750 (D.C. Cir. 1973);  see Smith
v. Schlesinger, 513 F.2d 462 (D.C. Cir. 1975);  McKeand v. Laird, 490
F.2d 1262, 1264 (9th Cir. 1973) (finding "rational nexus").  However,
the decisions, to the extent they were in favor of the employees, were
based on failure to follow procedures promulgated by the Department of
Defense pursuant to Executive Order No. 10,865, 3 C.F.R. 398
(1959-1963).  Because the plaintiffs were employees of defense
contractors, no question of statutory rights to civil service review
was involved.

   The government concurred in the application of the Gayer
"sufficient proof to support a rational nexus" standard in these
cases.  We now believe that this was error:  while we agree that a
government employee is, as a general matter, entitled to (and is
afforded under Navy and other agency regulations) notice, a statement
of reasons for the denial of a clearance, and an opportunity to
respond, the Gayer standard leads, as it led the D.C. Circuit in
Hoska, see page 5 note 3, supra, to sheer second-guessing of an
agency's determination that a constellation of facts makes it
impossible to make the affirmative determination necessary to grant a
security clearance.

   /10/ The Board has also refused to question criminal convictions
and bar decertifications that underlie agency adverse actions.  See,
e.g., Crofoot v. United States Government Printing Office, 21 M.S.P.R.
248, 252 (1984), rev'd on other grounds, 761 F.2d 661 (Fed. Cir.
1985);  McGean v. NLRB, 15 M.S.P.R. 49, 53 (1983).  As the Board said
in the present case, review of the underlying action was inappropriate
because it was "committed to appropriate procedures within the
respective entities and, additionally, involve(d) determinations
wherein the Board lacks a specific grant of jurisdiction" (App.,
infra, 52a).  See also Bacon v. HUD, 757 F.2d 265, 269 (Fed. Cir.
1985) ("the Supreme Court (in United States v. Morgan, 313 U.S. 409,
421-422 (1941)) has unequivocably drawn the line against inquiry into
the mental process of an agency head").

   /11/ See S. Rep. 95-969, 95th Cong., 2d Sess. 48 (1978)
("Subsection (a) (of 5 U.S.C. 7511) provides a statutory basis for the
procedural protections and appeal rights now granted employees in the
competitive service * * * .  Protections against arbitrary or
capricious actions have become established by practice and Executive
Order -- but not by statute -- as a basic right of competitive service
employees";  "Subparagraph (1)(B) of subsection (a) reaffirms
procedural protections and appeal rights of preference eligibles in
the excepted service");  Civil Service Reform:  Hearings Before the
House Comm. on Post Office and Civil Service, 95th Cong., 2d Sess. 13
(1978) (remarks of Alan K. Campbell, Chairman, U.S. Civil Service
Commission) ("the protections (of the bill) in terms of the right to
appeal from adverse actions remain() not substantially changed from
the current system").

   /12/ Executive Order No. 10,450 predated the enactment of the CSRA,
and Congress itself adopted the standard in 1964 in expressly
providing that all employment at the National Security Agency must be
"clearly consistent with the national security." See Pub. L. No.
88-290, 78 Stat. 168 (codified at 50 U.S.C. 831).

   /13/ The fact that under 5 U.S.C. 7701(c)(1)(A) an agency may
sustain a dismissal "based on unacceptable performance" merely by
showing that the action was "supported by substantial evidence" makes
it all the more unlikely that Congress intended that the denial of a
security clearance be sustained only if "supported by a preponderance
of the evidence" in accordance with 5 U.S.C. 7701(c)(1)(B).  See also
S. Conf. Rep. 95-1272, 95th Cong., 2d Sess. 139 (1978) (5 U.S.C.
7701(c)(1)(A) provides for a "lower standard of proof * * * because of
the difficulty of proving that an employee's performance is
unacceptable").  But if security clearance determinations are
reviewable on the merits at all, "preponderance" is clearly the
prescribed standard.

   /14/ For the period just prior to the Board's decision in this
case, presiding officials of the Board believed that they had
authority to substitute their judgment in security clearance matters
for that of the agency, even to the point of ordering agencies to
grant or reinstate clearances.  See Skees v. Department of the Navy,
No. PHO7528410257 (M.S.P.B. June 14, 1984), slip op. 13;  Peterson v.
Department of the Navy, No. BNO7528410010 (M.S.P.B. Feb. 14, 1984),
slip op. 8;  Irving v. Department of the Navy, No. BNO7528410005
(M.S.P.B. Feb. 3, 1984), slip op. 9.

   The decision of the presiding official in this case is
illustrative.  The factual allegations on which the denial of
respondent's security clearance was based were evidenced by law
enforcement and judicial records and were not disputed.  Nevertheless,
the presiding official ruled, in essence, that the Navy had not
satisfied her, by a preponderance of the evidence, that the
determination that those undisputed facts warranted the denial of a
security clearance was "reasonable." App., infra, 64a-66a.  Such an
approach to the question would be appropriate only if the CSRA had,
without expressly saying so, changed both the standard for granting
security clearances and the identity of the decisionmaker.

   /15/ Navy regulations interpret Section 7532 as requiring that the
service Secretary personally make the determination to remove an
employee under that section.  OPNAVINST 5510.1G, para. 22-6(2) (Apr.
20, 1984).  The Department of the Navy advises that it alone will deny
or revoke approximately 200 civilian employee or applicant clearances
this year.

   /16/ In addition, in non-Section 7532 cases, the MSPB considers
questions relating to the removal itself, such as whether the employee
is entitled to reassignment to a nonsensitive position at the same
agency or facility.  The MSPB has no such jurisdiction in respect to a
Section 7532 removal.

   /17/ Indeed, the Court has gone so far as to say that "'public
policy forbids the maintenance of any suit in a court of justice, the
trial of which would inevitably lead to the disclosure of matters
which the law itself regards as confidential, and respecting which it
will not allow the confidence to be violated.'" Weinberger v. Catholic
Action of Hawaii/Peace Education Project, 454 U.S. 139, 146-147 (1981)
(quoting Totten v. United States, 92 U.S. 105, 107 (1875)).

   /18/ The court of appeals' decision, moreover, is damaging
precedent, and will be cited by other tribunals in analogous cases.
It has already been followed by the Foreign Service Grievance Board
(see 22 U.S.C. 4135 et seq.) in Krc v. USIA, No. G-85-012-USIA-1 (Mar.
19, 1987) (ordering employee reinstated to previous position because
agency had insufficient reason to deny him a security clearance).  It
will undoubtedly be looked to by other courts -- as the court of
appeals here looked to Hoska v. Department of the Army, supra -- and
by arbitrators as well (see 5 U.S.C. 7121(f)).

   APPENDIX