Peterik, et al v. United States of America, et al

Filing 24

ORDER granting 11 Motion to Dismiss for Lack of Jurisdiction and adopting 20 Memorandum and Recommendation - Signed by District Judge Louise Wood Flanagan on 3/23/2017. (Baker, C.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No. 7:16-CV-41-FL

)
)
)
Plaintiffs,
)
)
)
v.
)
)
UNITED STATES OF AMERICA;
RAYMOND E. MABUS Secretary of the Navy; )
)
and DEPARTMENT OF THE NAVY,
MARINE CORPS POLICE DEPARTMENT, )
)
)
Defendants.
MATHEW S. PETERIK; MATTHEW E.
POWELL; and JOSEPH BUONI, III,

ORDER

This matter comes before the court on defendants’ motion to dismiss for lack of subject
matter jurisdiction (DE 11). Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure
72(b), United States Magistrate Judge Kimberly A. Swank issued a memorandum and
recommendation (“M&R”) (DE 20), wherein it is recommended that the court grant defendants’
motion and dismiss the case for lack of subject matter jurisdiction. Plaintiffs timely filed objections
to the M&R and defendants responded. In this posture, the issues raised are ripe for ruling. For the
reasons that follow, the court adopts the recommendation of the magistrate judge.
BACKGROUND
Plaintiffs filed complaint on March 10, 2016, asserting 1) age discrimination and
whistleblower claims on behalf of plaintiff Mathew S. Peterik (“Peterik”), on the basis of alleged
wrongful termination from his position as a police officer / accident investigator in the Marine Corps
Police Department at Camp Lejeune, North Carolina, and imposition of additional adverse

employment conditions; and 2) whistleblower claims on behalf of plaintiffs Mattew E. Powell
(“Powell”) and Joseph Buoni, III (“Buoni”), on the basis of imposition of adverse employment
conditions against them. Plaintiffs contend that they were subjected to such wrongful termination
and adverse employment conditions after they engaged in protected whistleblower activity by
reporting matters of public concern, which they summarize as follows:
A. Official reports are grossly inflated by MCPD [Marine Corps Police Department]
to obtain additional federal funding. For example, from 2014 to the present the
MCPD required its officers to expend time and resources completing written incident
reports for minor calls for service for the sole purpose of generating revenue, at great
cost and expense for taxpayers;
B. MCPD has withheld employees’ medical documentation, mishandled workers’
compensation claims, refused to pay legitimately earned overtime, doctored time
sheets to cheat employees, attempted to coerce Union officers, and used management
powers to pursue personal vendettas against employees, including but not limited to
mismanagement, manipulation and abuse of time sheets and related protocols
through falsification or forgery, giving overtime pay to supervisors who are
ineligible to receive it and awarding bonuses based upon friendship rather than merit;
C. MCPD officials use unwarranted investigations and suspensions or transfers of
employees who speak out against ongoing corruption, abuse of power, negligence
and poor management as punishment to deter those employees from speaking out;
and
D. The investigations, aforesaid, are based upon fabricated or marginal facts and
circumstances and are conducted by unqualified individuals with questionable and/or
criminal backgrounds; further, the names of the employees being investigated are
publicly displayed as further punishment against them.
(Compl. ¶ 28). As pertinent to the instant motion, plaintiffs sought administrative recourse for their
discrimination and whistleblower claims through several avenues before filing suit in this court. The
court adopts and incorporates herein as its own the summary of administrative action as set forth in
the M&R (DE 20 at 2-4), supplemented by further discussion in the analysis below.

2

Defendants filed the instant motion to dismiss on May 19, 2016, asserting that the court lacks
subject matter jurisdiction over plaintiffs’ claims because plaintiffs failed to exhaust their
administrative remedies prior to commencing the instant lawsuit. In support of their motion,
defendants attach documents outside of the pleadings, including forms and records from plaintiffs’
administrative proceedings, including appeal before the Merit Systems Protection Board (“MSPB”).
(See DE 12-1 to 12-19). In opposition to the motion, plaintiffs rely upon their own affidavits, as
well as additional records from plaintiff’s administrative proceedings, including those before the
United States Marine Corps Equal Employment Opportunity Office (“EEOO”) and the United States
Office of Special Counsel (“OSC”). (See DE 2-1 to 2-2; DE 15-1 to 15-8; DE 21-1 to 21-3).
DISCUSSION
A.

Standard of Review
The court may “designate a magistrate judge to conduct hearings . . . and to submit . . .

proposed findings of fact and recommendations for the disposition [of a motion to dismiss].” 28
U.S.C. § 636(b)(1)(B).

The parties may object to the magistrate judge’s findings and

recommendations, and the court “shall make a de novo determination of those portions of the report
or specified proposed findings or recommendations to which objection is made.” Id. § 636(b)(1).
Absent a specific and timely filed objection, the court reviews only for “clear error,” and need not
give any explanation for adopting the M&R. Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d
310, 315 (4th Cir. 2005); Camby v. Davis, 718 F.2d 198, 200 (4th Cir.1983). Upon careful review
of the record, “the court may accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1).

3

A motion to dismiss under Rule 12(b)(1) challenges the court’s subject matter jurisdiction,
and a plaintiff bears the burden of showing that subject matter jurisdiction is appropriate when
challenged by a defendant. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178 (1936);
Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). Such motion may either 1) assert the
complaint fails to state facts upon which subject matter jurisdiction may be based, or 2) attack the
existence of subject matter jurisdiction in fact, apart from the complaint. Adams, 697 F.2d at 1219.
When the defendant challenges the factual predicate of subject matter jurisdiction, as here, a court
“is to regard the pleadings’ allegations as mere evidence on the issue, and may consider evidence
outside the pleadings without converting the proceeding to one for summary judgment.” Richmond,
Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). The
nonmoving party “must set forth specific facts beyond the pleadings to show that a genuine issue
of material fact exists.” Id.
B.

Analysis
Plaintiffs raise objections regarding the magistrate judge’s statement of facts and

determination regarding plaintiffs’ lack of exhaustion of claims in this action. In doing so, plaintiffs
repeat arguments raised in their response to defendants’ motion to dismiss. Upon de novo review
of the M&R and the record in this case, the court finds that the M&R thoroughly and cogently
addresses the issues raised by defendants’ motion. Therefore, the court adopts and incorporates
herein the analysis in the M&R as its own. The court writes additionally to amplify the
determinations made in the M&R.

4

1.

Plaintiff Peterik

Defendants seek dismissal of plaintiff Peterik’s claims on the basis that he failed to exhaust
administrative remedies. “The Civil Service Reform Act of 1978 (CSRA), 5 U.S.C. § 1101 et seq.,
establishes a framework for evaluating personnel actions taken against federal employees.”
Kloeckner v. Solis, 133 S. Ct. 596, 600-01 (2012). “Actions that can be appealed to the MSPB
include, inter alia, removal from federal service, including retaliatory termination for protected
whistle-blower activity.” Bonds v. Leavitt, 629 F.3d 369, 378 (4th Cir. 2011) (citing 5 U.S.C. §
1214(a)(3); 5 U.S.C. § 7512). The CSRA also provides for “the adjudication of ‘mixed case
complaints,’ meaning complaints alleging ‘employment discrimination filed with a federal agency
based on race, color, religion, sex, national origin, age, disability, or genetic information related to
or stemming from an action that can be appealed to the’ MSPB.” Id. (quoting 29 C.F.R. §
1614.302(a)(1)).
“A federal employee bringing a mixed case . . . may first file a discrimination complaint with
the agency itself, much as an employee challenging a personnel practice not appealable to the MSPB
could do.” Kloeckner, 133 S. Ct. at 601. “If the agency decides against [him], the employee may
then either take the matter to the MSPB or bypass further administrative review by suing the agency
in district court.” Id. “Alternatively, the employee may initiate the process by bringing [his] case
directly to the MSPB, forgoing the agency’s own system for evaluating discrimination charges.” Id.
“If the MSPB upholds the personnel action (whether in the first instance or after the agency has done
so), the employee again has a choice: [he] may request additional administrative process, this time
with the EEOC, or else [he] may seek judicial review.” Id.

5

A third administrative pathway is available for employees complaining of less serious
specified agency actions in response to whistleblower activity, by pursuing a claim with the OSC,
followed by an appeal to the MSPB. See 5 U.S.C. § 1214(a)(3); see also Stella v. Mineta, 284 F.3d
135, 142 (D.C. Cir. 2002). In such instance, judicial review is available only in the Court of Appeals
for the Federal Circuit after the employee obtains a final decision from the MSPB. See 5 U.S.C.
§ 7703; Stella, 284 F.3d at 142; Hooven-Lewis v. Caldera, 249 F.3d 259, 266 (4th Cir. 2001).
With respect to all three administrative pathways, including in cases of serious employment
actions reviewable as part of a “mixed case complaint,” a plaintiff must proceed through completion
of the first chosen administrative framework prior to seeking judicial review. See Kloeckner, 133
S. Ct. at 601. The employee “may not initially file both a mixed case complaint and an appeal on
the same matter” and “whichever is filed first shall be considered an election to proceed in that
forum.” 29 C.F.R. § 1614.302(b); see Stoll v. Principi, 449 F.3d 263, 265–66 (1st Cir. 2006) (“The
lodging of either a formal appeal with the Board or a formal complaint with the agency demarcates
the point of no return.”); Economou v. Caldera, 286 F.3d 144, 149 (2d Cir.2002) (same); Leak v.
Runyon, No. 95-1392, 1996 WL 386609 *1 (4th Cir. July 11, 1996) (noting agency must notify
employee of right to “file either a mixed case complaint with the [agency’s] EEO office or a mixed
case appeal with the Merit System Protection Board (MSPB),” under 29 C.F.R. § 1614.302(b))
(emphasis added).
In this case, upon his termination, plaintiff Peterik was notified of the three above-described
options for administrative review of the decision, and that he “may choose only one method, and the
one [he chooses] first is considered [his] binding election.” (DE 12-8 at 4-8). Plaintiff Peterik

6

elected to submit first, on October 9, 2015, an appeal directly to the MSPB. (DE 12-2 at 2-4). He
then moved on November 19, 2015, to withdraw his appeal to MSPB, and the MSPB dismissed the
appeal on that basis on December 4, 2015. (DE 12-10; DE 12-11). In the meantime, plaintiff
Peterik pursued instead complaints with the OSC and EEOO, on October 27, 2015, and November
25, 2015. (DE 15-3 at 5; DE 15-1 ¶14; DE 21-1; DE 15-1 ¶35). In this manner, plaintiff Peterik did
not exhaust his elected administrative remedy by completing his MSPB appeal, nor did he seek
judicial review of the MSPB decision dismissing his appeal. Accordingly, plaintiff Peterik’s claims
in the instant case, challenging his termination and adverse employment actions following alleged
whistleblower activity, must be dismissed for failure to exhaust administrative remedies.
Plaintiff Peterik argues nonetheless that the EEOO decision satisfies the exhaustion
requirement on his discrimination claim, and the OSC decision satisfies the exhaustion requirement
on his whistleblower claim. As noted above, however, a plaintiff must proceed through completion
of the first chosen administrative framework prior to seeking judicial review. See Kloeckner, 133
S. Ct. at 601; Stoll, 449 F.3d at 255-56; 29 C.F.R. § 1614.302(b). Plaintiff’s failure to do so is fatal
to judicial review of claims. See id. Indeed, the EEOO itself dismissed plaintiff Peterik’s EEOO
complaint, without making a determination on the merits, because he had first filed then dismissed
an MSPB appeal. (See DE 15-3). Similarly, without appeal first to the MSPB, the OSC decision in
itself does not serve as exhaustion of administrative remedies. See 5 U.S.C. § 1214(a)(3). In sum,
plaintiff Peterik was required to proceed through an appeal with the MSPB in order to exhaust his
administrative remedies.

7

Plaintiff Peterik next argues that administrative remedies were futile and inadequate, as an
exception to the exhaustion requirement. Futility excuses a plaintiff from an administrative
exhaustion requirement “where the relevant administrative procedure lacks authority to provide any
relief or to take any action whatsoever in response to a complaint.” Booth v. Churner, 532 U.S. 731,
736 (2001). Similarly, exhaustion may be excused where “an administrative remedy may be
inadequate because of some doubt as to whether the agency was empowered to grant effective
relief.” McCarthy v. Madigan, 503 U.S. 140, 147 (1992). Or, “an administrative remedy may be
inadequate where the administrative body is shown to be biased or has otherwise predetermined the
issue before it.” Id. at 148.
Plaintiff Peterik has not established that any of these exhaustion exceptions apply to his
claims in this case. Plaintiff Peterik asserts, for example, that the OSC “violat[ed] administrative
procedures” by making his whistleblower complaint information public. (DE 21 at 16). This
assertion as to OSC, however, provides no basis for excusing his failure to complete his appeal with
MSPB, nor does such a procedural failure show that either agency was “biased” or “otherwise
predetermined the issue before it,” in the form of the merits of plaintiff Peterik’s claims. McCarthy,
503 U.S. at 147.
Plaintiff Peterik also asserts that “it was impossible for the plaintiffs to know, much less
understand and pursue the alleged policies in place to protect their legal rights,” (DE 21 at 16), and
that a union official gave him erroneous advice and no assistance (id. at 17-18). As an initial matter,
however, plaintiff Peterik correctly was informed upon termination in detail of his administrative
rights and obligations. (DE 12-8 at 4-8). In any event, even assuming plaintiff misunderstood his

8

administrative rights and obligations despite such information, such asserted lack of knowlege of
legal rights does not demonstrate that the MSPB was unauthorized or unable to provide all the relief
that plaintiff Peterik sought. See Booth, 532 U.S. at 736.
In sum, plaintiff Peterik has failed to demonstrate an exception to the exhaustion
requirement, and his claims thus must be dismissed for lack of subject matter jurisdiction.
2.

Plaintiffs Powell and Buoni

Defendants move to dismiss claims against plaintiffs Powell and Buoni on the basis that they
failed to exhaust administrative remedies and have not sought judicial review in any event in the
correct court. Plaintiffs Powell and Buoni filed whistleblower complaints with OSC, which closed
its investigation per letters dated January 15, 2016. (See DE 21-2, 21-3). Because plaintiffs Powell
and Buoni claimed adverse employment action less serious than termination or reduction in grade
or pay, they were required to pursue administrative remedies through OSC directly. See Kloeckner,
133 S. Ct. at 600. Upon conclusion of OSC investigation, to fully exhaust in advance of judicial
review, they were required to file an appeal to the MSPB. See 5 U.S.C. § 1214(a)(3). Judicial
review then is available only in the Court of Appeals for the Federal Circuit after the employee
obtains a final decision from the MSPB. See 5 U.S.C. § 7703.
Here the court lacks subject matter jurisdiction over whistleblower claims of plaintiffs
Powell and Buoni because they failed to exhaust administrative remedies by obtaining a final
decision on appeal to the MSPB. In any event, this court lacks jurisdiction over their claims because
judicial review is only available in the Federal Circuit. While plaintiffs Powell and Buoni assert

9

exception to the exhaustion requirement on the basis of inadequacy and futility, those arguments fail
for the same reasons as plaintiff Peterik’s arguments.
CONCLUSION
Based on the foregoing, defendants’ motion to dismiss (DE 11) is GRANTED. Plaintiffs’
claims are DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction. The clerk
is DIRECTED to close this case.
SO ORDERED, this the 23rd day of March, 2017.

________________________________
LOUISE W. FLANAGAN
United States District Judge

10