McCarthy v. Del Toro

658 F.Supp.3d 1148

Dr. John Daniel MCCARTHY, Plaintiff, v. Carlos Del TORO, Secretary of the Navy, Defendant.

Case No. 3:18-cv-1213-MMH-LLL

United States District Court, M.D. Florida, Jacksonville Division

Signed March 1, 2023

Daniel Kearney Bean, ABL Law, P.A., Jacksonville, FL, for Plaintiff.

Ronnie S. Carter, U.S. Attorney's Office, Jacksonville, FL, Jennifer Bonilla Moreno, Middle District of Florida, Jacksonville, FL, for Defendant.

ORDER

MARCIA MORALES HOWARD, United States District Judge

THIS CAUSE is before the Court on the Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. 110; Motion), filed by Defendant Carlos Del Toro, Secretary of the Navy (the Secretary), on May 10, 2022. Plaintiff Dr. John Daniel McCarthy filed a response in opposition to the Motion. See Response in Opposition to Motion to Dismiss Second Amended Complaint (Doc. 113; Response), filed May 31, 2022. With leave of the Court, the Secretary filed a reply, and McCarthy filed a sur-reply. See Defendant's Reply in Support of Motion to Dismiss Second Amended Complaint (Doc. 116; Reply), filed June 15, 2022; Plaintiff's Sur-Reply in Support of Opposition to Motion to Dismiss Second Amended Complaint (Doc. 117; Sur-Reply), filed June 30, 2022. Accordingly, this matter is ripe for review.

I. Background¹

Between 2005 and 2011, McCarthy served as an active-duty officer in the United States Navy. See Second Amended Complaint for Declaratory, Injunctive, and Mandamus Relief (Doc. 105; Second Amended Complaint) ¶ 6. Later, in 2013, McCarthy signed a contract, in which the Navy agreed to finance the cost of McCarthy's medical school education. See id. ¶ 28; Second Amended Complaint, Ex. C (Doc. 105-3; Service Agreement) at 2-4. In the Service Agreement, McCarthy promised to serve as an ensign in the Navy Reserve while he was in medical school. Second Amended Complaint ¶ 63; Service Agreement at 2. McCarthy also agreed to serve four more years as an active-duty officer after graduating from medical school (Service Obligation). Service Agreement at 4. The Service Agreement included a provision requiring McCarthy to repay the scholarship money paid by the United States for his education if he did not perform the Service Obligation because of his own misconduct. Id.

In the Service Agreement, McCarthy promised to "take and pass" parts I and II of the Comprehensive Osteopathic Medical Licensing Examination. Service Agreement at 6. The Service Agreement provided that "[a] second time failure of the examination or clinical skills examination may result in loss of scholarship eligibility." Id. McCarthy failed his clinical skills examination twice but passed it on the third attempt. See Second Amended Complaint ¶¶ 102, 112; Second Amended Complaint, Ex. ppp (Doc. 105-68; BCNR Decision) at 5-6. In response to McCarthy's failure to pass the clinical skills examination in his first two attempts, the Navy removed him from the Armed Forces Health Professions Scholarship Program (Program) and honorably discharged him from the Navy Reserve on June 2, 2017. See Second Amended Complaint ¶¶ 126-27; Second Amended Complaint, Ex. ii (Doc. 105-35). Two days later, on June 4, 2017, McCarthy graduated on time from medical school. See Second Amended Complaint ¶ 131. In July 2018, the Navy notified McCarthy that it would seek to recoup the funds that it had paid to cover his medical school expenses. See id. ¶ 140. In response to the Navy's actions, McCarthy submitted a petition to the Board for Correction of Naval Records (BCNR). See id. ¶ 169. In his September 13, 2018 petition, McCarthy asked the BCNR to find that he was wrongfully removed from the Program, was illegally discharged from the Navy, is not in debt to the Navy, and suffered numerous financial and professional injuries because of the Navy's actions. Id. ¶ 170; Second Amended Complaint, Ex. ss (Doc. 105-45).

On December 19, 2020, the BCNR issued a decision in which it recommended a resolution of McCarthy's petition to the Secretary. See generally BCNR Decision. The BCNR found that McCarthy was discharged from the Navy without the process to which he was due. Id. at 8. In addition, the BCNR concluded that the recoupment action was unjust because a valid discharge from the Navy is a prerequisite for recouping the scholarship funds. See id. at 8-9. With regard to McCarthy's removal from the Program, the full BCNR found that the Secretary had the legal authority to remove McCarthy from the Program. See id. at 9-10. However, the members of the BCNR disagreed about whether removing McCarthy from the Program was unjust. See id. at 10-11. The majority of the BCNR concluded that McCarthy's removal from the Program was unjust, but the minority found that the removal was not unjust because McCarthy failed to pass the clinical skills examination within his first two attempts. Id.

The full BCNR recommended voiding McCarthy's discharge and giving him constructive service credit as an inactive commissioned naval officer from the date of his improper discharge until the date of his reinstatement. Id. at 8, 11. The BCNR also recommended that the recoupment action be cancelled without prejudice to later reinstatement if appropriate. Id. at 11. Finally, the BCNR recommended returning McCarthy's case to the relevant command to determine whether the Navy should invoke the Service Obligation. Id. at 11-12. On February 10, 2021, the Secretary adopted the BCNR's unanimous recommendations and findings and approved the minority's conclusion that McCarthy's removal from the Program was not unjust. Id. at 13-14.

McCarthy initiated this action on October 12, 2018, by filing a Complaint (Doc. 1) for declaratory relief. On January 10, 2020, McCarthy filed an Amended Complaint for Declaratory Judgment (Doc. 51; Amended Complaint). Given the then-ongoing BCNR proceedings, the Court stayed the action on April 13, 2020. See Order (Doc. 65). After the BCNR issued its decision, the Court reopened the case on July 23, 2021. See Order (Doc. 82). McCarthy then moved for partial summary judgment. Motion for Partial Summary Judgment (Doc. 83), filed July 30, 2021. On February 23, 2022, the Court held a hearing at which, with the agreement of counsel, it denied without prejudice the motion for partial summary judgment and granted McCarthy leave to file a second amended complaint. See Clerk's Minutes (Doc. 102).

McCarthy filed his Second Amended Complaint on March 25, 2022. In his first five counts, McCarthy seeks declaratory judgments. In Count I, McCarthy asks the Court to "declare that [the Secretary] wrongfully and unlawfully dropped Dr. McCarthy from [the Program] notwithstanding Dr. McCarthy's successful graduation from medical school and completion of all requirements of the [ ] Program." Second Amended Complaint ¶ 250. In Count II, McCarthy requests that the Court "declare that [the Secretary] wrongfully and unlawfully separated Dr. McCarthy from the United States Navy without providing due process requirements." Id. ¶ 266. In Count III, McCarthy seeks a declaration that he "is entitled to application of the constructive service doctrine, providing for full back pay, allowances, automatic promotion to the grade of O-3 (which would have occurred but for the Navy's illegal discharge), and other benefits of service including active-duty credits for retirement purposes." Id. ¶ 274. In Count IV, McCarthy asks the Court to declare that the Secretary "wrongfully and unlawfully violated the Navy's own regulation regarding due process discovery rights." Id. ¶ 278. And, in Count V, McCarthy asserts that the Court should declare that the Secretary "unlawfully attempted to recoup the full cost, with interest and penalties, of the [Program] notwithstanding Dr. McCarthy's aforementioned unlawful removal from [the Program] and unlawful involuntary discharge from the Navy." Id. ¶ 286.

In Count VI, McCarthy asserts a claim under the Administrative Procedure Act (APA), 5 U.S.C. § 706, and asks the Court to "hold and declare [the Secretary's] actions unlawful and set them aside." Second Amended Complaint ¶ 290. In Count VII and Count VIII, McCarthy alleges that the Secretary has unreasonably failed "to issue a DD-214 evidencing Dr. McCarthy's correct active status credit;" "to issue sufficient notice of a 'with prejudice' revocation of the recoupment action;" and "to apply the constructive service doctrine, providing for full back pay, allowances, automatic promotion to the grade of O-3 (which would have occurred but for the Navy's illegal discharge), and other benefits of service including active-duty credits for retirement purposes." Id. ¶¶ 296-98, 307-09. Therefore, in Count VII, pursuant to the APA, McCarthy asks the Court to order the Secretary to perform these actions. Id. ¶ 302. And, in Count VIII, McCarthy makes the same request pursuant to the mandamus statute, 28 U.S.C. § 1361. Second Amended Complaint ¶ 313. In Count IX, McCarthy seeks attorney's fees under the Equal Access to Justice Act. Id. ¶¶ 315-16.

On May 10, 2022, the Secretary moved to dismiss the Second Amended Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure (Rule(s)). In the Motion, the Secretary raises several arguments in support of his request to dismiss the Second Amended Complaint. See Motion at 1, 9-10. Upon review of the parties' briefing, the Court finds that it needs to address only the Secretary's facial challenge to subject matter jurisdiction.

II. Standard of Review

Federal courts are courts of limited jurisdiction " 'empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have been entrusted to them by a jurisdictional grant authorized by Congress." Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Indeed, jurisdiction is the power of the Court to declare the...