Service-Level Enlistment Standards May Exceed DoD Minimums, and State Expungements Need Not Be Honored in Federal Military Eligibility Decisions

1. Introduction

Eric D. Smith, a former Army Reserve member, sought to reenlist after his Indiana felony arson conviction was expunged. The Army denied reenlistment, treating the felony as “major misconduct” under Army recruiting regulations and declining to treat the state expungement as eliminating the conviction for federal enlistment purposes.

Smith sued Army officials in their official capacities under the Administrative Procedure Act (“APA”), contending that the denial was “arbitrary and capricious,” and he also invoked Indiana Code § 35-38-9-10(b), which restricts employment consequences for expunged convictions. The district court granted summary judgment for the Army. On appeal, Smith reframed the case as primarily a validity challenge to the Army’s regulations, arguing they exceeded statutory and Department of Defense (“DoD”) authority and unlawfully disregarded his expungement.

The Seventh Circuit affirmed, holding that the Army acted consistently with valid governing regulations, and that those regulations were consistent with federal statutes and DoD regulations establishing minimum enlistment standards.

2. Summary of the Opinion

• APA review: The court reviewed whether the reenlistment denial was arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence, or contrary to law.
• Authority to be more restrictive: DoD regulations set minimum standards; the Army may adopt more restrictive service-level standards and waiver rules consistent with delegated authority.
• Independent Reserve authority: For Army Reserve enlistment, 10 U.S.C. § 12102(b) independently authorizes the Army to prescribe “moral” qualifications.
• Expungement not controlling: The Army may treat expunged convictions as convictions for enlistment eligibility absent new evidence that would have produced a not-guilty verdict.
• Procedural challenge waived: Smith’s notice-and-comment argument was waived because it was not raised in the district court.
• Bottom line: Because the Army’s regulations were valid and straightforwardly applied to Smith’s felony arson conviction, the denial was not arbitrary or capricious.

3. Analysis

A. Precedents Cited

The panel’s reasoning is anchored in administrative-law review principles, waiver doctrine, and constitutional and statutory deference to military governance. Each cited case is used for a targeted proposition:

• Little Co. of Mary Hosp. v. Sebelius, 587 F.3d 849, 853 (7th Cir. 2009)
  Cited for the standard of review under the APA—whether the challenged action is arbitrary/capricious, an abuse of discretion, unsupported by substantial evidence, or not in accordance with law. It frames the court’s task as evaluating the legality and rationality of the Army’s decision path rather than reweighing the merits of enlistment policy.
• Woodrick v. Hunderford, 800 F.2d 1413, 1416 (5th Cir. 1986)
  Invoked for the general exhaustion principle: courts “generally” will not review internal military matters absent exhaustion of intraservice remedies. The Seventh Circuit did not enforce exhaustion here because the Army did not raise the defense—signaling that, in this posture, exhaustion is treated as non-jurisdictional and waivable.
• Bradley v. Village of University Park, 59 F.4th 887, 897 (7th Cir. 2023)
  Used to justify proceeding to the merits when a non-jurisdictional exhaustion argument is not raised by the government. This is important procedurally: it prevents the exhaustion issue from eclipsing the merits analysis and underscores that parties must timely assert such defenses.
• Gulomjonov v. Bondi, 131 F.4th 601, 609-10 (7th Cir. 2025)
  The central delegated-authority analogy. The court relied on Gulomjonov for the proposition that regulations promulgated within delegated authority may establish detailed, service-level criteria that are consistent with—yet broader than—departmental minimum standards. This directly supports the Army’s ability to go beyond DoD’s baseline waiver framework.
• Chappell v. Wallace, 462 U.S. 296, 301 (1983)
  Cited for the constitutional baseline that Congress has “plenary control” over the military framework. The opinion uses Chappell to situate the dispute within a domain where federal authority is at its apex and where uniform national rules are especially justified.
• Dickerson v. New Banner Institute, 460 U.S. 103, 119-20 (1983)
  Used to support the idea that federal law may disregard state expungements to maintain nationwide consistency. Even though Dickerson arose in a different federal statutory context, the cited principle reinforces the Army’s uniformity rationale for treating expunged convictions as convictions.
• Henry v. Hulett, 969 F.3d 769, 785 (7th Cir. 2020) (en banc)
  Cited for appellate waiver: arguments not raised below are forfeited/waived on appeal. This doctrine disposed of Smith’s notice-and-comment challenge without reaching administrative-procedure merits.
• St. Vincent Med. Grp., Inc. v. United States Dep't of Just., 71 F.4th 1073, 1076 (7th Cir. 2023)
  Cited for the “discernible path” requirement in arbitrary-and-capricious review: courts may set aside agency action if the path cannot be discerned. The panel used this to emphasize how direct the Army’s reasoning was (felony arson → “major misconduct” → categorical bar; expungement rule → no relief absent not-guilty evidence).

B. Legal Reasoning

1) The governing statutory and regulatory structure

The court began by mapping the hierarchy:

• APA review provision: 5 U.S.C. § 706(2)(A) governs the “arbitrary and capricious” challenge framework.
• Felony enlistment baseline: 10 U.S.C. § 504(a) bars enlistment for persons “convicted of a felony,” with exceptions authorized by DoD in “meritorious cases.”
• Reserve enlistment authority: 10 U.S.C. § 12102(b) authorizes each service secretary to prescribe “physical, mental, moral, professional, and age qualifications” for Reserve enlistment.
• DoD implementing regulations: 32 C.F.R. § 66.6(b)(8)(ii) generally makes applicants with significant criminal records ineligible but allows waiver requests; it expressly makes some sexual offenses non-waivable, see 32 C.F.R. § 66.6(b)(8)(iii). The court emphasized these are minimum standards.
• Army implementing regulations (AR 601-210):
  • AR 601-210 ¶ 4-7(d)(5) bars waivers for “major misconduct” convictions (felony-level offenses punishable by more than one year) during or after prior military service.
  • AR 601-210 ¶ 4-30(b)(1)(B) treats convictions as valid notwithstanding expungement unless new findings would have resulted in an original not-guilty verdict.

2) Service discretion to be stricter than DoD’s “minimum”

Smith’s key merits theory was that because § 504(a) contemplates “meritorious case” exceptions and DoD’s 32 C.F.R. § 66.6(b)(8) describes waivers and identifies only certain sexual offenses as categorically non-waivable, the Army could not create its own categorical bar (here, for “major misconduct” like arson).

The court rejected that reading. It treated DoD’s rules as a floor, not a ceiling: the “plain language” of § 66.6(b)(8) establishes “minimum” ineligibility criteria and “expressly authorizes” services to impose additional or tailored restrictions. It also pointed to 32 C.F.R. § 66.5(c), which directs the services to use the standards in § 66.6 and to establish procedures to grant waivers under § 504(a), supporting the notion that service-level elaboration is contemplated.

Critically, the court did not frame the Army’s approach as rejecting “meritorious cases” altogether; rather, it accepted that the Army may define categories for which it will not entertain waivers as part of lawful implementation of the statutory scheme—particularly where the regulations seek administrable, uniform standards.

3) Independent authority for Reserve “moral” qualifications

The opinion adds a backstop: even if there were doubt about the Army’s authority under § 504(a) alone, Smith was seeking to enlist in the Army Reserve. Congress separately authorized Reserve enlistment qualifications in § 12102(b), including “moral” qualifications. That independent grant supports service-created rules barring enlistment based on major misconduct, insulating the regulation from the particular constraints Smith argued arose under § 504(a).

4) Expungement and federal uniformity / preemption

Smith also argued that Indiana’s expungement statute (Indiana Code § 35-38-9-10(b)) required the Army to treat his expunged felony as irrelevant and that Army regulations must conform to state law. The Seventh Circuit rejected this in two moves:

• Constitutional allocation of military governance: By invoking Article I, § 8, cl. 14 and Chappell v. Wallace, the court situated enlistment regulation within an area of strong federal control.
• Federal law may disregard expungements: Citing Dickerson v. New Banner Institute, the court emphasized that federal regimes can treat state expungements as immaterial to preserve nationwide consistency. Under AR 601-210 ¶ 4-30(b)(1)(B), expungement only matters if new findings would have led to an original not-guilty verdict—something Smith did not offer.

Put simply, the court treated the expungement as altering state-law consequences, not as rewriting the historical fact of the conviction for a federal military eligibility rule that validly incorporates convictions as evidence of disqualifying misconduct.

5) Waiver of the notice-and-comment challenge

Smith’s final attack—that the Army failed to comply with notice-and-comment procedures—was not addressed on the merits because it was not raised in the district court. Under Henry v. Hulett, the argument was deemed waived.

6) Application under arbitrary-and-capricious review

Having found the regulations valid, the court’s APA analysis was brief and decisive. Under St. Vincent Med. Grp., Inc. v. United States Dep't of Just., the question is whether the agency’s reasoning path can be discerned. Here it could: Smith’s felony arson conviction qualified as “major misconduct” under ¶ 4-7(d)(5), which disqualified him from reenlistment; and his expungement did not change that under ¶ 4-30(b)(1)(B).

C. Impact

• Broader validation of service-level strictness: The opinion reinforces that DoD accession regulations can operate as minimum standards, leaving room for each service to add stricter categorical rules. Litigants challenging military accession standards will face an uphill battle where the service can point to delegated authority and a plausible consistency with DoD minima.
• Reserve qualification authority as an independent basis: By highlighting 10 U.S.C. § 12102(b), the court provides a strong alternative statutory foundation for Reserve enlistment standards, making challenges that focus narrowly on § 504(a) less effective in the Reserve context.
• State expungements have limited traction in federal eligibility regimes: The court’s reliance on uniformity and Dickerson suggests that, absent a federal directive to honor expungements, state expungement remedies may not prevent federal decisionmakers—especially in military governance—from considering the underlying conviction.
• Procedural challenges must be preserved: The waiver ruling underscores that Administrative Procedure Act procedural attacks (e.g., notice-and-comment) must be raised early and clearly in the district court.
• Exhaustion remains a lurking issue: The court noted (without deciding) that intraservice exhaustion is typically required, citing Woodrick v. Hunderford, but treated the issue as waivable under Bradley v. Village of University Park. Future defendants may be incentivized to raise exhaustion defenses to narrow judicial review.

4. Complex Concepts Simplified

• “Arbitrary and capricious” (APA): A court does not decide whether it would have made the same choice; it asks whether the agency followed the law and offered a rational, understandable explanation connected to the facts and rules.
• “Waiver” in enlistment: A waiver is discretionary permission to enlist despite disqualifying history. A rule can lawfully make some categories non-waivable if authorized by statute/regulation.
• “Minimum standards” vs. “ceiling”: A minimum standard is a floor (everyone must meet at least this). It does not prevent an agency (here, a service branch) from adopting stricter requirements when authorized.
• Expungement: Expungement often limits how a conviction may be used under state law, but federal law can still treat the conviction as relevant for federal purposes if the federal scheme so provides.
• Supremacy / federal primacy in military regulation: When federal military rules validly govern enlistment, conflicting state employment rules generally do not control federal military eligibility determinations.
• Waiver/forfeiture on appeal: Arguments not presented to the district court are typically not considered on appeal.

5. Conclusion

The Seventh Circuit affirmed the Army’s denial of reenlistment because the Army applied valid enlistment regulations in a straightforward way: felony arson constituted “major misconduct” under AR 601-210 ¶ 4-7(d)(5), and the expungement did not eliminate the conviction for federal enlistment eligibility under ¶ 4-30(b)(1)(B). The court’s core legal takeaway is that DoD accession rules operate as minimum standards and do not bar the Army—especially in the Reserve context under 10 U.S.C. § 12102(b)—from imposing stricter categorical eligibility and waiver limits, nor from declining to give dispositive effect to state expungements in order to maintain uniform national administration.