Transcript

IN THE SUPREME COURT OF THE UNITED STATES

DEPARTMENT OF THE NAVY, Petitioner, v. THOMAS E. EGAN

No. 86-1552

December 2, 1987

The above-entitled matter came on for oral argument before the Supreme Court of the United States at 12:59 p.m.

APPEARANCES:

LOUIS R. COHEN, ESQ., Department of Solicitor General, U.S. Department of Justice, Washington, D.C.; on behalf of the Petitioner.

WILLIAM J. NOLD, ESQ., Louisville, Kentucky; on behalf of the Respondent.

PROCEEDINGS

12:59 p.m.

CHIEF JUSTICE REHNQUIST: We'll hear argument now on Number 86-1552, Department of the Navy versus Egan. Mr. Cohen, you may proceed whenever you're ready.

ORAL ARGUMENT OF LOUIS R. COHEN ON BEHALF OF PETITIONER

MR. COHEN: Thank you, Mr. Chief Justice, and may it please the Court.

After stating the background of this case, I will argue that the Navy's decision not to grant someone with respondent's history a security clearance to work on repairing nuclear submarines is not and should not be subject to substantive review by the Merit Systems Protection Board.

The Board has in certain cases including this one power to review the procedures followed by the employing agency in denying a clearance but there has been no challenge to the procedures followed by the Navy in this case. The Board does not have authority to review the merits of a procedurally proper agency decision to deny a clearance.

Respondent had a job at the Trident Refit Facility in Bremerton, Washington, that entailed access to the interiors of nuclear submarines and knowledge of their arrivals and departures. The job was conditioned on his obtaining a security clearance. The security investigation disclosed a history of incidents involving firearms, alcohol and violent behavior. After giving respondent notice and an opportunity to respond, the Naval Systems Personnel Command in Washington, D.C. denied the clearance, and the Trident facility in the State of Washington removed respondent from the job for cause for failure to meet one of the job's requirements.

Respondent petitioned the Merit Systems Protection Board for a review. The Board presiding official issued an initial decision reversing the removal on the ground that the Navy failed to show, I'm quoting, "it reached a reasonable and warranted decision concerning the propriety of the revocation of appellant's security clearance."

The Board reversed its presiding official and sustained the removal. It ruled that in an appeal from a removal for lack of a required security clearance, the agency must satisfy the Board that the position in question required a clearance, that the clearance was denied or revoked, and that the agency afforded the employee procedural due process in connection with the clearance determination, which it specifically found the agency had done here.

But the Board said -- and I'm quoting again -- "it has no authority to review the agency's stated reasons for the clearance determination." We think the Board got it right.

Let me begin by disposing I hope of the argument that due process requires a hearing on the merits before the MSPB on the security clearance determination. I want to make two points. The first is that there simply is no due process question in this case. Respondent was given notice of the Navy's intent to deny his clearance, and a full statement of reasons and an opportunity to respond. His response, with the assistance of his union, did not challenge any fact in the Navy's statement, he did not ask to confront or cross examine anyone or to be heard further by the Navy.

When he sought review by the MSPB, he did not challenge the adequacy of the Navy's processes, and although the presiding official was willing to hear him on the merits of the clearance determination, he twice failed to respond to the Board's notice that a hearing would be convened at his request.

The only thing he has placed in issue in this case is the Navy's judgment, based on the results of the investigation, that a clearance should be denied.

Second and more generally, it is the employing agency that must given an employee whatever process is due in connection with the denial of a clearance. Where the employee does contend that the employing agency has not given him an adequate opportunity to be heard, the MSPB's job, is it itself said, to rule on the adequacy of the agency's process. The MSPB's decision is of course subject to review by the Federal Circuit.

But the Constitution does not require or authorize the MSPB to take upon itself the process of hearing and deciding the merits of the clearance question. Nor, we think, does the statute. And I want to turn to the question whether 5 U.S.C. 7513 gives the MSPB power to review denial of Mr. Egan's clearance on its merits.

The first thing I want to say is that the Board's answer that it can review procedures but not substance, seems to us the most plausible reading of the statutory text. Everyone agrees that Mr. Egan had a right to be removed only for cause under section 7513, and the right to appeal his removal to the MSPB.

Everyone also agrees that the MSPB has no general jurisdiction to review the denial of a security clearance as such. For example, an employee who loses a promotion or an employee who is simply transferred to a different job, or who doesn't get access to a particular part of the facility because he isn't given a security clearance has no MSPB review because there's nothing for the Board's jurisdiction to attach to.

The Board said in essence that if an agency fails to follow the proper procedures so that there has been no valid security clearance determination, then there is no cause for the removal. But if the agency has followed proper procedures, and has reached a determination denying a clearance, then nothing in the statute gives the Board the right to reverse the clearance determination, or disregard it, just because the agency has not persuaded the Board.

In addition to thinking that this is the most plausible reading of the statute, we have two --

QUESTION: Do you suggest that that reading of the statute should go right across the board to any kind of a removal or just to any adverse action?

MR. COHEN: I think it should go to any adverse action.

QUESTION: Well, does this construction apply to anything but security clearances?

MR. COHEN: I think that the question of the Board's power to review the merits of collateral determinations that lead to adverse actions is a question that the Board is in the process of working out. But in general, if someone is denied a job because, for example, he is found to be medically unfit, found to have a medical condition, I take it that the Board would review whether the existence of that medical condition is cause for removal from that job, but wouldn't review the medical determination itself on the merits.

I do think that the question of the extent to which the Board should probe underlying collateral decisions is one that may vary from case to case, depending on what the underlying decision is.

QUESTION: Didn't the Board mention its deference to disbarment proceedings and criminal convictions in its opinion?

MR. COHEN: Yes, it did. Those are, as our opponents have pointed out, decisions that will have been rendered by someone other than the employing agency. That's only partially true here. Here, two different parts of the Navy made these two different determinations.

But, yes, the Board did mention that.

QUESTION: How about removal for some kind of wrongdoing or failure to adequately perform in the employing agency?

MR. COHEN: Well, in the event of wrongdoing, the agency is required to persuade the Board by a preponderance of the evidence that the wrongdoing occurred because that is the cause for the removal.

Here, the cause for the removal is the lack of a security clearance which is a separate determination, and the question is whether that separate determination by a different part of the agency is subject to review by the preponderance standard.

QUESTION: What if an agency establishes as a qualification for a particular job, high skill level. And then it makes a separate determination that this individual who has been in the job does not have a high skill level, and another part of the agency makes that determination. Do you have any doubt that the MSPB would determine whether that judgment was true or not?

MR. COHEN: No. I think that it probably would.

QUESTION: So what is the law? You can't just be relying upon the language of the statute and say you cannot go behind the fact that there was a cause for removal, and that the cause had been determined to exist by the agency, and not look into whether it was properly determined.

MR. COHEN: I'm not just relying on the language of the statute. I think that the language of the statute creates problem that exists in a number of cases of how far you look behind the final action of the agency that is subject to MSPB review and look into the merits of collateral decisions.

I think the agency drew the right line in this case because of the nature of the decision and because of the history of these kinds of decisions.

QUESTION: Well, that's not compelled by statute. You're really just arguing that this language of the statute allows you to draw this line. It certainly doesn't compel it.

MR. COHEN: Well, my words were, it is the most plausible application of the statute to this case.

QUESTION: Because of the distinctive characteristics of what the determination was in this case.

MR. COHEN: All right, yes. It's certainly not compelled by the words of the statute.

There are two other closely related reasons for thinking that Congress did not intend to confer the power to review these decisions on the MSPB. One of them is historical. The Civil Service Commission did not review security clearance determinations by employing agencies. The MSPB generally inherited the CSC's review powers, and there's simply no evidence that Congress intended to give the MSPB larger powers in this respect.

The other, which I think explains why the Civil Service Commission did not review clearance determinations is that outside review of the merits of clearance determinations by a defense agency is functionally inappropriate. The Navy should, after affording an employee an adequate chance to be heard, have the final say about whether it trusts him on board one of its submarines.

And I want to make three points about the nature of that decision.

QUESTION: Before you get into that, as to the first point which you just went off of, you said prior to the new legislation, the Civil Service Commission hadn't reviewed it. But there are a lot of things that the Civil Service Commission didn't review, aren't there, that used to be reviewed by Court that have been given to the MSPB. You certainly can't say that everything that the MSPB now has was matter that the Civil Service Commission used to have. Some of it would never go through the Civil Service Commission, but would go directly to the Courts. Isn't that right?

MR. COHEN: I think that's right. But I also think that where that is the case, it is explicit or at least affirmatively indicated in the legislative history and that there is legislative history suggesting a presumption of continuation of the Civil Service Commission's jurisdiction without expansion except where there's other evidence.

QUESTION: There were court decisions that had made this kind of an inquiry before the Civil Service Reform Act was passed, weren't there? Hadn't the D.C. Circuit looked into denial of security clearances?

MR. COHEN: Actually, the D.C. Circuit case, the Hoska case came up after the Civil Service Reform Act was passed, and in that case, after an MSPB presiding official affirmed the agency's determination and there was no petition to the full Board, the D.C. Circuit in the Hoska case reviewed that determination and reversed it on the merits. We think that decision is wrong. And the MSPB concluded in this case that that decision is wrong.

We've said that right along.

QUESTION: You're aware of no pre-CSRA court decisions that did effectively what the MSPB was doing here?

MR. COHEN: That's right, not in the context of a government employee.

The overriding objective of a security clearance determination is to protect information and not individuals. The President's instructions to the Navy and to other defense agencies that no one is to have a job entailing access to classified information unless there has been a determination that it is clearly consistent with the interests of the national security are controlling.

The final substantive judgment should be made by the agency whose mission is the defense of the nation, and not the agency whose mission is protecting civil servants. Because in the final analysis, we would rather exclude from our nuclear submarines some individuals who will never compromise sensitive information than admit one individual who does.

In particular, denial of a security clearance may well be warranted when predicate facts are less than probable. If an investigation leaves the Navy with an irreducible suspicion that an employee has committed acts whose repetition would endanger security, common sense as well as Presidential command may require denying him a clearance. The MSPB presiding officer's statement in this case that if the underlying facts are in doubt, the Navy will be required to prove them by a preponderance of the evidence is quite wrong and very illuminating.

The statutory preponderance standard is the right standard for testing a removal based on an employee's alleged misconduct. But it is not the right standard for judging whether there is enough confidence in an individual to allow him on board a nuclear submarine. Congress did not give the MSPB any other standard, because it did not think reviewing security clearance determinations on their merits is what the MSPB would be doing.

QUESTION: Mr. Cohen, can I just ask one kind of general question.

Does your argument apply equally to a removal from a position to a person who previously obtained a security clearance but had his security clearance revoked? Is there any difference, do you think?

MR. COHEN: I don't think so.

QUESTION: Okay.

MR. COHEN: The security clearance process is not an attempt to judge an individual's past conduct, but to predict his future behavior. The question in this case is not whether Mr. Egan has done something to deserve being barred from working at Bremerton, but whether there is an unacceptable risk that he would compromise sensitive information either deliberately or inadvertently or under compulsion for some reason.

That is a judgment that can only be made by people who are expert in the aspects of human behavior that render individuals vulnerable to espionage.

Finally, the security clearance determination can only be made by people who themselves have thorough going access at least in some cases can only be made by people who themselves have thorough going access to classified information. To decide whether a particular individual should be cleared for access to work at a particular place, he may have to know something about the information to which that job would give him access. The degree of sensitivity of particular information, the nature of its usefulness to hostile entities, the identities of the hostile entities to which it may be useful may have a bearing on a particular clearance determination.

QUESTION: Of course, construing 1712 and 1713 as the Court of Appeals said wouldn't really keep the agency from insulating security cancellations from judicial review. They could proceed another way, couldn't they?

MR. COHEN: They could proceed under 5 U.S.C. 7532.

QUESTION: Right.

MR. COHEN: And the Court of Appeals based its decision here in part on the existence of that section.

QUESTION: But my question is, you'll admit the agency's interests could be protected if they proceeded under that section?

MR. COHEN: If they did proceed under that section. That section, which I do want to talk about, gives the Secretary of the Navy and other agency heads the power to summarily suspend without pay any employee when necessary in the interests of national security. And then after giving the employee the reasons, "as specifically as security considerations permit," giving him some kind of an intra agency hearing after which he may be removed and the removal is expressly excluded from any MSPB review even of process.

I think we want to say two things about that. We think it has little or no bearing on the present issue first because it's clear that an employee who does not obtain a security clearance that is a valid requirement of his job can be removed for cause, like an employee who fails to meet any other requirement without invoking 7532. Essentially, everyone involved in this case agrees on that, although our papers note that the District of Columbia Circuit later disagreed in a different case.

But the existence of 7532 has nothing to do, we think, with whether Congress has authorized MSBP review of the merits of security clearance determinations in cases where that emergency section is not invoked. 7532 does expressly provide for some kind of a hearing by the employing agency, and in non-7532 cases where the adequacy of the agency process is put at issue, I suppose 7532 might have some bearing by way of analogy on that question of employing agency process.

But it does not, it seems to me, suggest that the MSPB should in such a case take it on itself to review the merits of the agency's clearance organization.

QUESTION: Why did the agency proceed under 1712 and 13 rather than 1732 in this case, or why would it in other cases like this?

MR. COHEN: Well, they could have been invoked. This was a new hire, an employee who was put through the agency's routine security clearance process for somebody who is going to have a laborer's job on board a submarine. And when the result of that clearance process was negative, there was a removal, and the agency notified Mr. Egan that he was entitled to MSPB review. Which we think is an important right on his part.

It would have been possible, I think, but not the use for which 7532 was intended, for Mr. Egan to have been suspended without pay at the first sign that there might be a security question here, and then --

QUESTION: Or later, when there was.

MR. COHEN: Yes. And that the head of the agency, the Secretary of the Navy, would then have had to rule personally on this case. And if he had done so, there would have been no MSPB review whatever.

This is not a case in which the Navy had anything in particular that it wished to conceal, or it could have invoked 7532 and escaped MSPB review entirely. But it had no reason to invoke that procedure here.

QUESTION: What does the employee lose if the government chooses to move under 7532 rather than 7513 or whatever?

MR. COHEN: He loses his job effectively. He loses his pay immediately. And he loses the right to MSPB review of his ultimate removal, and he may lose the right to the full statement of the reasons for the denial of his security clearance that Mr. Egan got here, and the full statement of the reasons for his removal that Mr. Egan got here, and the opportunity to make a written response in two stages.

He loses that whole process. He is given after suspension and before removal in what is really quite a different process under 7532, a statement of reasons which as I said the statute says is to be as detailed as security considerations permit. And then a hearing before an agency board and then a final determination by the head of the agency.

QUESTION: But apart from that, apart from its affect on the employee, it would preserve the government's concerns, entirely? The government could protect itself as well under 7532 as it could under 7513.

MR. COHEN: It would. 7532 would certainly protect the government's concerns for secrecy in a case where it doesn't want to tell the employee or the MSPB all of the reasons for its concerns. It would not protect the government's concern to give the employee the kind of opportunity to respond and the kind of opportunity for an MSPB check on its procedures that respondent had here.

It also would involve the Secretary of the Navy in making personnel decisions about whether a laborer who is going to work in a facility where the only reason for not letting him work was because of the information with which he would come into contact --

QUESTION: Isn't there another difference, too. Isn't under 7513 at the end of the line, there's judicial review, is there not, whereas under 7532, there's not? Or am I wrong on that?

MR. COHEN: I think the Court assumed in Coal v. Young that there is no judicial review and I think that would be our position. I suspect we would get some debate.

QUESTION: On 7532.

MR. COHEN: On 7532. But that is our position.

QUESTION: So your position is there's no judicial review of the merits of the security removal under 1713?

MR. COHEN: That's right.

But the Navy's judgment that particular evidence warrants denial of a clearance is and ought to be final.

Thank you, Mr. Chief Justice. I'd like to reserve the balance of my time.

CHIEF JUSTICE REHNQUIST: Very well, Mr. Cohen. We'll hear now from you, Mr. Nold.

ORAL ARGUMENT OF WILLIAM J. NOLD ON BEHALF OF RESPONDENT

MR. NOLD: Mr. Chief Justice, may it please the Court.

In listening to the arguments presented by the Navy in this case, I've tried to come up with a way that I could possibly describe them. And I think that we start out with the same premise. We start out with the premise that this is a case that involves statutory interpretation. It's at that point that the government seems to walk away from that question.

What they seem to do in my view is to start building a cloud around the statute. They start building this cloud and they call it national security, and as their argument progresses down through their argument in their brief, the cloud gets darker and darker and darker, so that by the time we get to the end, we can't see the statute anymore. What we see is this cloud called national security.

I am not here to argue that national security is not important. I am not here to take a position in this case that would limit agencies' ability to maintain and protect national security. That's obviously something that they've been told to do by the President, and we want them to do it.

But what I want to do is to look at this statute aside and apart from this cloud for just a moment, and see what it says. Not only what the particular statute says that talks about removal for cause -- 7513 -- but also the statute that says you can remove somebody on the basis of national security. I may even take a look at the statute that says that you can remove someone because of poor performance.

Because the Civil Service Reform Act created a lot of new things that the Civil Service Commission under the old system didn't have. It created an independent board, the Merit Systems Protection Board, that was to hear these cases separate and apart from agencies.

Now, when they did that, I believe that Congress was the proper body to take a look at this cloud that's there or take a look at this problem of national security, take a look at this situation where the President has told agencies to make sure you don't compromise security, and come up with a statutory scheme that would not only protect the interest of the employee, but also protect the interest of agencies in a situation such as we have here. And I believe that they did that. And I would like to talk about these particular statutes for just a moment.

7513 is the statute that contains the language that we've heard for years: you can't remove an employee unless it's for cause that would promote the efficiency of the service.

There is another statute, Chapter 43 of the Act -- 4303, I believe, that says now under the new law that you can remove an employee for performance reasons. You don't have to show cause. You just have to show that he hasn't performed up to the level that he's expected to perform.

Now, taking those two statutes for a minute, the courts have held that an agency can terminate an employee on performance-based reasons under Chapter 7513, that is, for cause, because there might be situations where performance and cause kind of go together. But the cases have said that if you do that, you are bound by the procedures, you are bound by the burdens of proof, you are bound by all of the other rights that the employee has under 7513.

You're not bound under the precise procedural problems that are presented under performance based types of claims.

Now, let me throw into the statutory scheme, 7532. It wasn't created by the Civil Service Reform Act. It's been around for years. And what that says is, and what that recognizes is is that under some circumstances, there may be situations when agencies ought to be able to terminate somebody and not have somebody else essentially looking over their shoulder and second guessing that move.

QUESTION: It isn't just that. If the only difference between 7532 and 7513 were the absence of MSBP review, then you'd have a very strong case. But 7532 does much more than that. It allows that person to be taken out of the job and off of the payroll immediately without any prior procedures, and that can be the explanation of it, rather than what you suggest.

MR. NOLD: Justice Scalia, another explanation of it could mean that the Congress in the legislative history under 7532 recognized that there might be situations where an employee would have to be removed and taken out of the government, not because of any fault of his own whatsoever. Maybe a Russian agent moved in next door to him. Certainly, that's not his fault. But it may be in the interests of national security that he not live next door to a Russian agent. So they have the ability to remove him, even though there's no cause whatsoever from the standpoint of misconduct on his part.

QUESTION: Denial of a security clearance is no more misconduct than what you just described. What you just described would be adequate grounds for denial of a security clearance too, wouldn't it?

MR. NOLD: That's right. And in some cases, security clearances like you say are revoked or denied because of misconduct types of reasons, and sometimes not.

You asked earlier a question about what the employee loses when 7532 is invoked. There is something of a very real importance that the employee gains. Because what he gains is the right to a hearing. Under the procedures that the MSBP felt that were appropriate to review these kinds of cases, the situation could be that the person never gets the opportunity to sit down and cross examine and confront the people that say that he's done x, y and z. He's totally denied that right.

At least under 7532, he would have the opportunity' to have some form of hearing, even though that hearing would be in front of the agency.

QUESTION: Well, he is given it by the agency as the agency's regulations now exist. It's not in the CSRA, but the agency does give him a hearing. So in point of fact, there's no difference right now between what happens under 7513 and 7532.

MR. NOLD: Well, the wording's the same.

QUESTION: You're saying the agency isn't compelled to give him a hearing, it's a matter of agency grace?

MR. NOLD: No. What I'm saying is that under 7532, the statute says that he has the right to a hearing. Under 7513, the statute also says that he has a right to be heard before the Merit Systems Protection Board. And this Board is directed by the statutes to hear and adjudicate the matters that come before it.

Now, under the scheme that has been adopted by the Merit Systems Protection Board and found offensive by the Federal Circuit, there would be no hearing at all, in my view, in front of the Merit Systems Protection Board. And the reason is because there wouldn't be anything to hear.

QUESTION: Yes, but there is a hearing before the Department of the Navy.

MR. NOLD: Not under 7513.

QUESTION: It doesn't require it, but didn't they offer your client a hearing?

MR. NOLD: They did.

QUESTION: Well, and it was before the Agency which is exactly what 7532 would have given you a right to have.

MR. NOLD: No, they didn't offer him a hearing in the revocation or the denial process of the security clearance.

QUESTION: Didn't they give him a statement of reasons?

MR. NOLD: Statement of reasons.

QUESTION: An opportunity to question any of the facts that they set forth?

MR. NOLD: You get a written statement of reasons. You get an opportunity to provide a written response, and you get a decision. And you get the right to appeal one higher level within the agency. That's it. You don't get the right to be heard.

QUESTION: Even if you question the facts?

MR. NOLD: Even -- there is no provision that I'm aware of that he could command a hearing. Whether the Agency would give him one, I guess there would be some discretion of their part.

QUESTION: And here he didn't ask for one. Is that right?

MR. NOLD: He did not ask for one.

QUESTION: Under 7532 after suspension, he can get a hearing?

MR. NOLD: After suspension and prior to removal.

QUESTION: Right, he can get a hearing.

MR. NOLD: A pre-termination hearing.

The Merit Systems Protection Board again, as I've mentioned, has the mandate to hear and adjudicate the matters that come before it. And there's no question that this matter was properly before it.

Now, in addition to having the Merit Systems Protection Board hear the matter, he's entitled to judicial review to the Federal Circuit upon a decision by the Merit Systems Protection Board. And the scope of review was defined specifically in the Civil Service Reform Act. And it's very similar, I believe, to the kind of review that you would get under the Administrative Procedures Act.

It's an arbitrary and capricious standard and the courts look to see whether or not the law was followed and whether or not there was substantial evidence to support the decision.

Now, I'm trying to imagine what the court would be looking at in a case where the only questions were: does he or does he not have a clearance, was the clearance required as a part of his job, and were minimal due process standards granted. That could all be put on one page.

QUESTION: How about a case where the only requirement is that he be admitted to the bar, and they show that he's been disbarred. Do you think the Board has a right to inquire into the propriety of his disbarment?

MR. NOLD: Absolutely not. And the reason that they don't is that the Supreme Courts of our States have very elaborate rules that have considerable due process rights built into them, and there would be no way that the Merit Systems Protection Board would have any control whatsoever over that.

QUESTION: Well, when why should you treat the Navy Department's security clearance system as so totally different from the State requirements for admission and remaining in the Bar? I mean, it's a separate organization, and you don't have any claim here that your client was denied due process in the security denial, do you?

MR. NOLD: Well, I think --

QUESTION: He didn't ask for a hearing.

MR. NOLD: Let me answer the first question, first. I think the distinction that has to be drawn between a disbarment proceeding or in the military context, the questions come up when a person doesn't get a promotion in the military. The distinction there is it's a collateral source. The person that is taking away the right to practice law is totally different from the Navy in this case who's firing somebody.

QUESTION: But supposing that a particular job in the Navy calls for someone of field grade say of Lieutenant Commander, and this fellow was a Lieutenant Commander but he's reduced in rank to a lieutenant, and therefore the civilian side of the Navy says, well, you no longer have the qualification to fill this job.

Now, do you think the Merit System Protection Board can review whether or not he was properly demoted?

MR. NOLD: No, I absolutely do not.

QUESTION: Well, there are some kinds of decisions, then -- collateral, as you call them -- that the Merit System Protection Board shouldn't review?

MR. NOLD: That's true.

QUESTION: And why should the denial of a security clearance be one of them?

MR. NOLD: Because it's one and the same person that's doing the removal. It's the civilian side of the Navy that's taking away the security clearance. It's the civilian side of the Navy that's terminating him.

QUESTION: Why is that different from the fellow who's demoted from Lieutenant Commander to Lieutenant? It's the Navy doing it.

MR. NOLD: Well, because the Navy does have military on one side and civilian on the other. This security clearance --

QUESTION: The Secretary of the Navy is head of them both.

MR. NOLD: -- the security clearance is revoked by the naval civilian personnel command. There are certainly important things to be said for the military not having restraint on it.

QUESTION: All they have to do is put this security clearance call in another division of the Navy and everything would be fine. You'd have no complaints, right?

MR. NOLD: Well, it is in another division at this time. But the agency --

QUESTION: Well, why isn't that enough. It has to be in the military half of the Navy? Is there a military half and a civilian half?

MR. NOLD: Well, the interest that's being protected when you're talking about a military decision is the same interest that you want to protect to make sure that everybody in the platoon is marching in the same direction. And that's not what we have in this national security question matter.

You've got to have absolute control in the military.

QUESTION: Let me ask you something about the statutory structure here. The test for security clearance under the executive order is whether the employment of the individual in the job would be clearly consistent -- clearly consistent with the interests of the national security. Now, that's a fairly strict test.

There are two basic sections of the CSRA 43, which you mentioned earlier, which permits removal for poor job performance. And the MSPB reviews those determinations on the basis of substantial evidence?

MR. NOLD: Substantial evidence, right.

QUESTION: Right. And Congress did it that way because Congress, as I recall the legislative history, knew that it's hard to prove.

MR. NOLD: Well, the Congress wanted to give the ability to fire people.

QUESTION: That's right, and it's hard to prove inadequate performance, so they said substantial evidence will do there.

Then it has Section 75 which has a different review standard for the MSPB. There, it's preponderance of the evidence, more likely than not.

Now, if Congress did want to have these things reviewed, I find it incredible that it would want them reviewed under 75, under a preponderance standard. It is more likely than not that this was clearly consistent, clearly consistent with the interests of the national security.

That's a very strange test. If I were going to have that reviewed, I would have had it reviewed under Title 43, Chapter 43 which would be there is substantial evidence that this would not be clearly consistent with the interests of the national security.

MR. NOLD: I think it should be removed even a step further, and under Chapter 7532, because that's the same test. That talks about things where continued employment is clearly consistent with the interest of national security. It's the same test as you have with the revocation of the clearance itself. That is my point.

What the Navy has done in this case is that they've really changed the standard under 7513. They've changed the standard from one of being clearly consistent with the interest of national security to replace the standard that says you can't fire somebody unless it's for such cause as would promote the efficiency of the Service.

So by a two-step process, they have changed the standard under 7513. Because that is precisely the same standard as you have in the revocation of the security clearance.

QUESTION: Yes, but that assumes the security decision is subject to review.

MR. NOLD: Well, Justice Scalia, when he was a Judge, I believe, wrote an opinion about that in the D.C. Circuit.

QUESTION: He's still a Judge.

QUESTION: We think he still is a Judge.

QUESTION: Thanks, fellas.

MR. NOLD: They tell us we're supposed to call you justices.

And you examined that whether or not a due process interest attached to a security clearance, and I believe -- or a liberty interest attached to a security clearance -- and the holding was that it did not attach when you didn't get the clearance because of some unspecified reason.

But in this case, Mr. Egan is having his clearance taken away for very specified reasons that have been set out and that appear to me to constitute misconduct, which then is bootstrapped, if you will, over into a removal action which this Court has consistently held an employee of his status has a property right in his job, under Arnett v. Kennedy and those other cases that talk about that.

So I believe that what the decision does in the MSPB is to convert that standard from 7532 and cause it to be enforced under 7513. Clearly, Congress did not intend to do that. I think what they intended when they talked about as such cause as would promote the efficiency of the service, was to give the employee who was told that he was going to be fired and specific reasons for his termination, to give the employee the opportunity to cross examine the person or the witnesses that would testify against him, and possibly correct a situation that might be wrong.

He can't do that under the system that is advanced by the Navy in this case. And I believe that that was what was found objectionable by the Federal Circuit.

QUESTION: Mr. Nold, I'm trying to think if what Congress would have done to be sure that the MSPB would handle this thing the way that you're saying they expected it to. And the analogy that comes to my mind is that when this Court was in the same position that the MSPB is in, that is to say, before the 1976 Amendments to the Freedom of Information Act were adopted, we were asked to review, among other things, one of the exemptions to the Act is whether the information was classified in the interests of national security.

And we decided that that was not an invitation for us to go into whether the classification was correct or not. We just looked into whether it was classified or not. Now, Congress didn't like that and they therefore provided that we would look into whether it was properly classified. But without saying that, we just didn't go behind the determination that it was classified.

It seems to me that this is exactly the same kind of thing that the MSPB is confronted with.

MR. NOLD: Well, certainly under the FOIA, the courts even now give a great deal of due deference to --

QUESTION: That's because the statute was changed. But what I'm saying is that under the old statute, which reads for purposes of classification the way this legislation reads for purposes of security clearance, we thought it appropriate as a Court to say, well, it means we look to see whether it's classified, not whether the classification is proper.

You want the MSPB to look into not merely whether the fellow doesn't have a security clearance, but whether it was proper to deny him a security clearance. It's certainly not what we would have done.

MR. NOLD: I want the MSPB to look into the reasons that were advanced for the revocation of that clearance. If misconduct was involved. That's what I want. And I want him to have the ability to create a record about that. And I want him to have the ability to have judicial review of that record so that some court can later look back and say whether or not he was denied something arbitrarily or capriciously.

QUESTION: I suppose then you would rather have the Navy proceed under 1713, if it's construed as you would have it, than under 1732, because you would have no judicial review under 1732 but you would have an agency hearing.

MR. NOLD: The Navy takes the position that no judicial review would be available. I don't know that that's ever been really tested or not one way or the other. Certainly, the statute does not preclude judicial review.

QUESTION: In your mind, why do you think the Navy proceeded under 1713 rather than 1732, to avoid an agency hearing of the kind that he would get in 1732?

MR. NOLD: Well, I think the agency was thinking, well, the guy doesn't have a clearance. That's one of the qualifications for his position, and therefore that constitutes cause for removal. I don't think they did it to avoid the process.

QUESTION: You don't think they made a mistake about what 1713 means?

MR. NOLD: Well, maybe they did. But they do have the option, certainly, and they chose which way to go. Egan had no ability to make that choice. They chose to go the route 7532, which entitles him to all those procedures and the hearing that he gets.

I believe that with the questions we've covered, it pretty much covers what I wanted to say.

Thank you.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Nold.

Mr. Cohen, you have four minutes remaining.

MR. COHEN: Unless the Court has further questions, I have nothing further.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Cohen.

The case is submitted.

(Whereupon, at 1:48 p.m., the case in the above entitled matter was submitted.)