US SUPREME COURT DECISIONS

Following petitioner's successful challenge in Greene v. McElroy, 360 U. S. 474, of the revocation of his Government security clearance, he sought to recover for loss of earnings resulting from such revocation. Petitioner's claim was based in part upon a 1955 Department of Defense regulation providing for monetary restitution in cases where a "final determination" is favorable to a contractor employee. The Department took the position that petitioner did not qualify for monetary restitution under that regulation, but offered to process his case under a 1960 regulation -- issued while petitioner's claim was being processed -- under which, before reimbursement would be allowed, an administrative determination had to be made that petitioner "would be" currently entitled to a security clearance. Petitioner neither required nor sought access authorization for classified information in his current employment. He then brought this action for restitution in the Court of Claims, but that court refused to pass on the merits pending petitioner's pursuit of his administrative remedies.

Held:

1. Petitioner was entitled to compensation under the 1955 Department of Defense regulation. Pp. 376 U. S. 160-162.

(a) Petitioner's rights matured under the 1955 regulation. P. 376 U. S. 160.

(b) It would be unjustifiable to give the 1960 regulation retroactive effect, since that regulation had been issued after petitioner's claim had been asserted. P. 376 U. S. 160.

(c) The District Court's order on remand voiding all determinations adverse to petitioner had the effect of reinstating petitioner's security clearance between the time of his discharge and the District Court's expungement order, which constituted a "final" and "favorable" determination within the meaning of the 1955 regulation. Pp. 376 U. S. 160-161.

(d) Petitioner, having established the Government's improper denial of clearance by failure to provide fair procedures, can recover under the 1955 regulation "in an equitable amount for any loss of earnings during the interim resulting directly from a suspension of clearance" without assuming the additional burden of showing at chanrobles.com-red

Page 376 U. S. 150

a later time that, if he had been afforded fair procedures, he would have been able to demonstrate that he was entitled to access authorization to classified information. P. 376 U. S. 161.

2. Since the right of petitioner to recover under the applicable regulation does not require a determination of his present eligibility, administrative remedies under the subsequent regulation, which would require such a determination, must be regarded as inappropriate and inadequate, and therefore need not be exhausted. Pp. 376 U. S. 162-164.

Reversed and remanded.