RAYMOND C. AHLBERG, ET AL., PETITIONERS V. DEPARTMENT OF HEALTH AND
HUMAN SERVICES

   No. 86-1287

   In the Supreme Court of the United States

   October Term, 1986

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Federal Circuit

   Memorandum For The Respondent In Opposition

   Petitioners contend that they were wrongfully separated from the
Community Services Administration when that agency was abolished by
statute in 1981.  The decision below is correct.  Petitioners do not
allege, nor is there, a conflict among the circuits on any of the
questions presented, and there is no conflict with any decision of
this Court.  The questions presented raise no significant legal issue,
and are substantially similar to those on which certiorari was denied
in Menoken v. Department of Health and Human Services, No. 86-93 (Oct.
14, 1986).  Accordingly, review by this Court is not warranted.

   1.a. Prior to September 30, 1981, the Community Services
Administration (CSA) was responsible for administering federal
anti-poverty program grants to community agencies.  The Omnibus Budget
Reconciliation Act of 1981 (OBRA), Pub. L. No. 97-35, 95 Stat. 357,
however, eliminated the CSA and created the Office of Community
Services (OCS), a new agency within the Department of Health and Human
Services (HHS), to administer the block-grant program created by OBRA
(Pet. App. 3a, 237a-240a).  Unlike the CSA, which had more than 900
employees, the OCS had only 165 employees to carry out its functions
(Pet. App. 4a).

   After OBRA was signed into law, the CSA notified its employees that
all positions at the agency would be abolished, that no reassignments
were available, and that all employees would be separated by September
30, 1981.  Shortly after that date, however, the United States
District Court for the District of Columbia ruled that, under the
Veterans Preference Act of 1944, 5 U.S.C. 3502-3503, HHS was required
to reassign CSA employees to the OCS insofar as the CSA's functions
were transferred to that agency.  National Council of CSA Locals v.
Schweiker, 526 F. Supp. 861 (D.D.C. 1981) (Pet. App. 420a-446a).  HHS
then offered the 165 positions that existed in the newly created OCS
to those former CSA employees with the highest retention standing
based upon preference order master lists.  HHS created these lists
because the CSA had not maintained adequate personnel records, a fact
that prevented HHS from reconstructing exact reduction-in-force
priority registers for CSA employees (Pet. App. 4a-5a, 241a-247a).

   Former CSA employees not selected under this procedure appealed to
the Merit Systems Protection Board (MSPB), claiming that they were
unlawfully separated from the CSA and that they were entitled to be
reinstated with back pay to positions with the OCS until the OCS
properly carried out its own reduction-in-force.  The MSPB agreed that
HHS had not followed correct procedures for determining which former
CSA employees should be transferred to the OCS, but it concluded that
this failure did not invalidate the entire reduction-in-force.
Rather, the MSPB held that the appropriate remedy was to allow each
former CSA employee to prove that he or she was entitled to a position
with the OCS (Pet. App. 5a-7a, 247a-253a).

   The former CSA employees appealed to the United States Court of
Appeals for the Federal Circuit, which upheld the MSPB's decision.
Certain Former CSA Employees v. Department of Health and Human
Services, 762 F.2d 978 (1985) (Pet. App. 236a-277a).  The court of
appeals agreed that HHS's use of the master retention lists was not in
literal compliance with normal reduction-in-force procedures, but it
held that HHS nonetheless had afforded the former CSA employees all of
the rights to which they were entitled under the Veterans Preference
Act (Pet. App. 264a-265a, 269a-270a).  The court concluded that any
possible errors in the reassignment process could be corrected by the
procedure that the MSPB had adopted:  that is, to afford an
opportunity on remand to each former CSA employee, including
petitioners, to show that he or she was entitled to an OCS position
that had been erroneously assigned to another former CSA employee
(Pet. App. 265a-266a).

   In the first case to reach the court of appeals following this
remand, a former CSA employee challenged the MSPB's use of the master
retention lists in deciding whether her individual claim to specific
positions had merit.  The Federal Circuit held that it had intended to
give the MSPB broad discretion in determining the relative retention
priorities of individual employees, and that the MSPB had not abused
its discretion in using the master lists in deciding that employee's
case.  This Court denied certiorari.  Menoken v. Department of Health
and Human Services, 784 F.2d 365 (Fed. Cir.), cert. denied, No. 86-93
(Oct. 14, 1986) (Pet. App. 278a-298a).

   b. In this case, as in Menoken, petitioners challenge the
disposition of individual claims by the MSPB following the remand
approved in Certain Former CSA Employees.  Petitioners are two groups
of employees separated from their positions when the CSA was abolished
(Pet. App. 8a).  The first group consists of individuals formerly
employed in the CSA offices in Boston and Seattle.  On remand, these
petitioners either failed to make any submission at all to the MSPB
(id. at 10a-11a) or failed to make a submission sufficient to show
that they were entitled to specific OCS positions that had been
assigned to other former CSA employees (id. at 12a-14a).  The court of
appeals held that, in the absence of such submissions, the MSPB had
properly upheld denial of hearings on their claims of wrongful
discharge (Pet. App. 14a-30a).  Petitioners do not challenge this
aspect of the court of appeals' decision in this Court.

   The second group of petitioners consists of individuals formerly
employed in the Atlanta and Kansas City offices of the CSA.  These
individuals did make submissions on remand to the MSPB sufficient to
entitle them to a hearing.  Following hearings on their claims,
however, the MSPB presiding officials determined that these former CSA
employees had not established that there were positions at OCS for
which they had higher retention rights than the other former CSA
employees who had been transferred to the identified positions.

   The MSPB upheld these determinations, and the court of appeals
affirmed.  Petitioners' sole contention was that the MSPB was required
to construct standard reduction-in-force registers to determine their
retention rights, and that the Board therefore had erred in using the
master retention lists in determining individual entitlement to
positions at OCS (Pet. App. 31a).  Noting that it had "specifically
rejected that contention in Menoken," the court of appeals reaffirmed
its conclusion that HHS was not required to recreate
reduction-in-force registers and that the MSPB had not inappropriately
relied on the master lists in rejecting petitioners' claims (Pet. App.
30a-34a).

   2.a. Petitioners reiterate (Pet. 6-11) the same contention that was
advanced in Certain Former CSA Employees and in Menoken -- namely,
that the separation of all CSA employees when that agency was
abolished was null and void because HHS was required to transfer all
CSA employees to the new OCS and then to conduct a reduction-in-force
in a manner consistent with applicable regulations.  The court of
appeals properly rejected this argument in light of the unusual
factual circumstances in this case:  the abolition of an entire
agency, coupled with an alteration in its function resulting in the
need for only 165 rather than 900 employees in the successor agency.
The court's decision does not, as petitioners contend (Pet. 7-9),
conflict with Vitarelli v. Seaton, 359 U.S. 535 (1959).  As the
Federal Circuit explained in Certain Former CSA Employees, "(t)he
present case is far removed from Vitarelli" (762 F.2d at 984;  Pet.
App. 263a).  There, a single employee was discharged on the ground
that he was a security risk, in violation of the agency's procedures,
and this Court held that he should be reinstated.  359 U.S. at
539-546.  Here, the sheer number of employees involved and the
inadequacy of CSA's records made the conduct of an ordinary
reduction-in-force difficult if not impossible, so that there was a
significant impediment to following the agency's prescribed separation
procedures that did not exist in Vitarelli.  For that reason, the
remedy adopted here by the MSPB -- that is, to allow each former CSA
employee to show that he or she was entitled to a position with the
OCS, rather than to invalidate the entire reduction-in-force -- was "a
reasonable method of dealing with perhaps a unique and certainly a
most unusual situation," a remedy that "fairly and appropriately
adjusted and accommodated" the respective interests of the former CSA
employees and the government (Certain Former CSA Employees, 762 F.2d
at 985;  Pet. App. 271a).  Petitioners' argument in essence is that
they and more than 700 individuals whose jobs no longer exist should
receive a back pay award from the Treasury for a five-year period
during which they did no work and during which it was impossible for
them to do any work.  The court of appeals properly rejected that
argument in Certain Former CSA Employees and in Menoken, and it
properly rejected that argument for the third time here.

   b. Petitioners' contention (Pet. 11-13) that the MSPB improperly
relied on the master retention lists in deciding their individual
claims is both fact-bound and erroneous.  To support this argument
they assert (Pet. 12) that the Federal Circuit in Certain Former CSA
Employees stated that it was possible to recreate standard
reduction-in-force registers despite the inadequacies of CSA's
personnel records.  In fact, however, the court in that case simply
held that it was possible to determine the relative retention rights
of persons not appointed to new positions at OCS (762 F.2d at 985;
Pet. App. 267a-268a).  As the court of appeals made clear in Menoken,
it did not intend to require that the determination of relative
retention rights be accomplished by reconstruction of "traditional
reduction-in-force registers" on remand (784 F.2d at 370;  Pet. App.
297a).  Rather, the court intended to give the MSPB considerable
discretion in determining the standards for resolution of individual
claims.  Petitioners here do not point to a single instance in which
use of the master lists resulted in the failure to award a position to
an individual who would have been entitled to that job if standard
reduction-in-force registers had been used.  The court of appeals
properly rejected petitioners' broad-scale attack on procedures that
represented a practical and equitable way of dealing with a highly
atypical situation.

   It is therefore respectfully submitted that the petition for a writ
of certiorari should be denied.

   CHARLES FRIED

      Solicitor General

   MAY 1987