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October 28, 1948

FISCHER et al.

The opinion of the court was delivered by: GALSTON

These are counter-motions. The plaintiffs seek a preliminary injunction; and the defendants move to dismiss the complaint or for summary judgment.

The twenty-eight plaintiffs are wartime veterans who are working at the New York Navy Yard as civilian employees. They seek to be restored to positions from which they were demoted.

 It is alleged in the complaint that the defendant Haeberle, in conformity with the authority of the Honorable John L. Sullivan, Secretary of the Navy, and pursuant to various directives from the Bureau of Ships, issued orders directing a reduction in the supervisory force in the shipyard. From the defendants' affidavits it appears that due notice was given to each of the plaintiffs of his proposed demotion, which notice also set forth the reasons for such demotion. Each of the plaintiffs was thus notified that he was less well qualified than any competing employee, either veteran or non-veteran, to remain in the supervisory grade he had held. Following a review of each case by the defendant Haeberle, who affirmed the demotions, each of the plaintiffs appealed to the United States Civil Service Commission. These appeals are still pending.

 The complaint alleges that since the plaintiffs had efficiency ratings of 'good' or better at the time of the demotions, they were entitled to mandatory preference over all competing non-veterans under the Act of August 23, 1912, as amended, 37 Stat. 413, as amended by 39 Stat. 15, 5 U.S.C.A. § 648; and that since competing non-veteran employees had been retained in the various supervisory grades held by the plaintiffs before the alleged demotions, such action of the defendants was unlawful.

 The defendants, in support of their motion, assert in substance that the demotions were lawful, for they were based not upon any reduction in force, but on the conclusion that the plaintiffs' qualifications were lower than those of the non-veterans retained at the higher grades. They argue that the Veterans Preference Act of 1944 is controlling -- more specifically Sec. 14 thereof, 5 U.S.C.A. § 863 -- rather than the Act of 1912; and that under the provisions of the Act of 1944 the only mandatory preference given to veterans is the prohibition against separation or discharge (see Sec. 12, 5 U.S.C.A. § 861). Demotions, it is contended, are a valid exercise of the authority granted by Sec. 14 of the Act of 1944, 'for such cause as will promote the efficiency of the service.'

 Collaterally it is also urged that this court has no jurisdiction to enforce the provisions of the Act of 1944, as the Act does not provide for recourse to the courts; and that the sole remedy available to the plaintiffs under the Act of 1944 is an appeal to the Civil Service Commission. Furthermore, and in any event, the defendants contend that the plaintiffs may not maintain this action at present because they have not exhausted their administrative remedies. Additional objections are made that (1) this is an action in the nature of an original action for a writ of mandamus over which this court has no jurisdiction; and (2) that the complaint fails to state a cause of action since it fails to show the requisite jurisdictional amount in controversy.

 First in respect to the jurisdiction of the court: It is well established that when the United States creates rights in individuals against itself, it is under no obligation to provide a remedy through the courts. Lynch v. United States, 1934, 292 U.S. 571, 54 S. Ct. 840, 78 L. Ed. 1434. It is also the general rule that no jurisdiction exists to entertain a suit against the United States in the absence of express Congressional consent. On the other hand, the Supreme Court has held that the silence of Congress as to judicial review of orders of an administrative body is not necessarily to be construed as a denial of the power of federal courts to grant relief in the exercise of the general jurisdiction which Congress has conferred upon them. The authority for judicial review may be found in the existence of courts and the intent of Congress as deduced from statutes and precedents. Stark v. Wickard, 1944, 321 U.S. 288, 64 S. Ct. 559, 88 L. Ed. 733. There the actions of the Secretary of Agriculture under the Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, were held subject to judicial examination, although the statute was silent as to judicial review.

 There are analogous situations where claims created by statutes which prescribe no appeal to the courts have been enforced against the Government. In Miguel v. McCarl, Comptroller General et al., 1934, 291 U.S. 442, 54 S. Ct. 465, 78 L. Ed. 901, the Comptroller General was enjoined from interfering with the payment by the Government disbursing officer of claims of the plaintiff for retired military pay and allowances; and the disbursing officer was compelled to pay or cause to be paid to petitioner such retired pay and allowances as were due him. Likewise, in Dismuke v. United States, 1936, 297 U.S. 167, 56 S. Ct. 400, 80 L. Ed. 561, it was held that an administrative decision rejecting, on a pure question of law, a claim for annuity under Sec. 8(a) of the Civil Service Retirement Act of 1933, 48 Stat. 283, 305, 5 U.S.C.A. § 692d, now 5 U.S.C.A. § 736a, was reviewable by the District Court, although the Retirement Act was silent as to judicial review. The Supreme Court declared that the power of an administrative officer will not, in the absence of a plain command, be deemed to extend to the denial of a right which the statute creates (as opposed to a right the existence of which the statute authorizes the administrative officer to decide within his discretion) and to which the claimant is entitled.

 Furthermore, although the Veterans Preference Act of 1944 is silent as to judicial review of agency action, the Administrative Procedure Act of 1946 provides for such review. Act of June 11, 1946, 60 Stat. 237, as amended, 5 U.S.C.A. § 1001-1011.

 Sec. 2 of the Administrative Procedure Act defines 'agency' as meaning 'each authority (whether or not within or subject to review by another agency) of the Government of the United States other than Congress, the courts, or the governments of the possessions, Territories, or the District of Columbia.' 5 U.S.C.A. § 1001(a).

 Sec. 10 of the Act provides for judicial review of agency action, except so far as (1) statutes preclude judicial review, or (2) agency action is by law committed to agency discretion. The Veterans Preference Act of 1944 does not, by express words, preclude judicial review; nor is the question of statutory construction one of administrative discretion. Subsection (c) of Sec. 10 declares that 'Every agency action made reviewable by statute and every final agency action for which there is no other adequate remedy in any court shall be subject to judicial review. Any preliminary, procedural, or intermediate agency action or ruling not directly reviewable shall be subject to review upon the review of the final agency action * * * .' 5 U.S.C.A. § 1009(c)

 Subsection (e) of Section 10, in setting forth the scope of review, provides that the courts can ' * * * hold unlawful and set aside agency action, findings, and conclusions found to be * * * in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.' 5 U.S.C.A. § 1009(e).

 It would seem, therefore, that there is authority for this court to exercise jurisdiction in reviewing administrative action taken under the Veterans Preference Act of 1944. This view is in accord with Hilton v. Sullivan, 1948, 334 U.S. 322, 323, 768 S. Ct. 1020, for obviously in that case the court acted and apparently the right of judicial review was not raised.

 The question then arises whether such jurisdiction should be exercised in the present stage of the proceedings. If the doctrine be applicable that where an administrative remedy is provided by statute, such remedy must be exhausted before judicial intervention may ...

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