Error: Bad annotation destination United States Court of Appeals for the Federal Circuit
05-3358
ANNA MILLER,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Catherine E. Stetson, Hogan & Hartson L.L.P., of Washington, DC for petitioner.
Joan Stentiford, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for respondent. On the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; Donald E. Kinner, Assistant Director; Christian J. Moran,Trial Attorney. Of counsel on the brief was Paul N. St. Hillaire, Attorney, Office of the General Counsel, Office of Personnel Management, of Washington, DC. Of counsel was John H. Williamson, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice.
Martha B. Schneider, General Counsel; and Rosa M. Koppel, Deputy General Counsel, Office of the General Counsel, United States Merit Systems Protection Board, of Washington, DC for amicus curiae.
Appealed from: United States Merit Systems Protection Board United States Court of Appeals for the Federal Circuit
05-3358
ANNA MILLER,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
___________________________
DECIDED: June 8, 2006 ___________________________
Before SCHALL, BRYSON, and DYK, Circuit Judges.
Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge DYK.
BRYSON, Circuit Judge.
Anna Miller, a retired federal employee, petitions this court for review of a
decision of the Merit Systems Protection Board, Docket No. CH-0845-04-0285-I-1. In
the matter on appeal, the Office of Personnel Management (“OPM”) ruled that Ms. Miller
owed more than $8,000 in back premiums for coverage under the Federal Employees’
Group Life Insurance program (“FEGLI”). OPM sought to collect that sum by reducing
the amount of the retirement annuity payments that Ms. Miller received from the federal
government under the Federal Employees’ Retirement System (“FERS”). She
challenged the reduction by appealing to the Board and requesting that the Board
adjudicate her claim that she should not have been required to pay the back premiums. The Board held that it lacked jurisdiction to consider the merits of her appeal. We
affirm.
I
Ms. Miller worked as a registered nurse for the Department of Veterans Affairs in
Danville, Illinois, until January 5, 1991. She was removed from her position because
the agency determined that she was unable to perform her duties for medical reasons.
Despite the agency’s finding, OPM denied her application for disability retirement. She
appealed that denial, but her appeal was unsuccessful.
In November 2001, Ms. Miller applied for a “deferred or postponed” annuity under
FERS. OPM reviewed her application and determined that she had been eligible for
immediate retirement in January 1991 when she was terminated, because at that time
she was 63 years old and had completed 16 years of service. See 5 U.S.C. § 8412(c).
Based on its finding as to her eligibility date, OPM determined that Ms. Miller was
entitled to a retirement annuity retroactive to January 6, 1991, the day after her
employment was terminated. OPM calculated the amount of annuity benefits that had
accrued between January 6, 1991, and March 30, 2002, to be $98,823.67. On April 2,
2002, OPM sent Ms. Miller an annuity adjustment payment of $78,774.71, which
represented the accrued annuity benefits less certain deductions.
After determining that Ms. Miller was entitled to a retroactive annuity payment,
OPM sent her a letter in which it asked her to make an election for basic life insurance
coverage, choosing one of three options: 75% reduction in coverage, 50% reduction in
coverage, and no reduction in coverage. The letter advised her that there would be no
retroactive premium charge if she selected the 75% reduction option, but that the 50%
05-3358 2 reduction and no reduction options would give rise to retroactive premium charges of
$2527.33 and $8372.10, respectively. OPM stated that it was required to “start the
collection of premiums on your annuity commencing date,” which was in 1991 after the
retroactive annuity determination.
Ms. Miller selected the “no reduction” option, but she returned the form to OPM
with a letter in which she contended that she should not be charged life insurance
premiums for the period 1991 through 2002, since she had not had life insurance
coverage during that period. An exchange of letters between OPM and Ms. Miller
followed. OPM ultimately decided that Ms. Miller was required to pay the premiums for
the period 1991 to 2002 and that the retroactive premium obligation would be treated as
an overpayment of her retroactive annuity award. OPM advised Ms. Miller that it would
collect the overpayment through deductions from future annuity payments. Ms. Miller
also requested that OPM waive collection of the overpayment, but OPM refused to do
so. Ms. Miller requested reconsideration, but OPM affirmed its initial decision.
Ms. Miller appealed OPM’s decision to the Merit Systems Protection Board. She
challenged OPM’s determination that when it retroactively awarded her a retirement
annuity and she elected full life insurance coverage, it was required by 5 U.S.C.
§ 8707(b)(1) to charge her for premiums retroactive to 1991. In particular, she argued
that because she did not enjoy federal life insurance protection between 1991 and
2002, she should not have to make a retroactive payment of the premiums for insurance
coverage during that period. She also appealed from OPM’s refusal to waive recovery
of the overpayment.
05-3358 3 The administrative judge who was assigned to the case disagreed with Ms. Miller
and held that OPM had reasonably construed 5 U.S.C. § 8707(b)(1) to require it to
charge her for insurance premiums beginning as of the date from which her retroactive
annuity payments began to accrue. The administrative judge rejected Ms. Miller’s
argument that OPM’s interpretation of the statute was at odds with its regulations
governing the payment of life insurance premiums, which require that premiums be
withheld from the date that an “annuity begins.” 5 C.F.R. § 870.404(a)-(b). The
administrative judge concluded that although Ms. Miller’s annuity payments began in
2002, her actual entitlement to the annuity was retroactive to the date she was
separated from employment in 1991 and that “her annuity is deemed to have begun in
January 1991, notwithstanding the fact that the annuity payments were first tendered to
her over ten years later.” As to Ms. Miller’s request for waiver of the back premium
payments, the administrative judge held that Ms. Miller had not shown that she was
entitled, under 5 C.F.R. § 845.301, to a waiver of OPM’s right to recover the
overpayment.
With respect to Ms. Miller’s challenge to the amount of the overpayment, the
administrative judge held that the Board did not have jurisdiction to review OPM’s
determination as to that issue. The administrative judge noted that by statute, 5 U.S.C.
§ 8461(e), individuals may appeal to the Board from actions affecting their right to
retirement benefits under FERS. However, the administrative judge ruled that because
FERS is codified in chapter 84 of title 5 of the United States Code, while the FEGLI
program is codified in a different chapter—chapter 87—OPM’s rulings regarding FEGLI
benefits and coverage are not governed by the provisions of the FERS statute.
05-3358 4 On its own motion, the full Board reopened the case and held that it had no
jurisdiction over Ms. Miller’s challenge to the overpayment. Because it concluded that
the overpayment in this case “resulted from a change in the appellant’s life insurance
coverage and not from anything related to the computation of her retirement annuity,”
the Board held that it “lacks jurisdiction over issues regarding the existence and amount
of the overpayment.” With respect to the portion of the appeal in which Ms. Miller
sought a waiver of the repayment obligation, however, the Board held that it did have
jurisdiction. On that issue, the Board concluded that because Ms. Miller had received
her overpayment knowing that it was subject to OPM’s claim for an additional premium
payment, waiver of the repayment obligation was not required. Accordingly, the Board
upheld OPM’s decision in part and dismissed the appeal in part for lack of jurisdiction.
Ms. Miller seeks review by this court.
II
The jurisdiction of the Merit Systems Protection Board is confined to those
matters assigned to it by statute, rule, or regulation. See Meeker v. Merit Sys. Prot. Bd.,
319 F.3d 1368, 1374 (Fed. Cir. 2003); Schmidt v. Dep’t of the Interior, 153 F.3d 1348,
1356 (Fed. Cir. 1998); 5 U.S.C. § 7701(a). The Board has jurisdiction over appeals
arising from OPM’s administration of the Federal Employees’ Retirement System Act
(“FERSA”), 5 U.S.C. §§ 8401-79, but it does not have jurisdiction over appeals arising
from OPM’s administration of the Federal Employees’ Group Life Insurance Act
(“FEGLIA”), 5 U.S.C. §§ 8701-16. The jurisdictional provision that governs review of
disputes concerning annuity payments made under FERSA, 5 U.S.C. § 8461(e)(1),
provides that, subject to an exception not applicable here, “an administrative action or
05-3358 5 order affecting the rights or interests of an individual or of the United States under the
provisions of [FERSA] administered by [OPM] may be appealed to the Merit Systems
Protection Board under procedures prescribed by the Board.” The jurisdictional
provision that governs review of disputes concerning FEGLIA, 5 U.S.C. § 8715,
provides that “[t]he district courts of the United States have original jurisdiction,
concurrent with the United States Court of Federal Claims, of a civil action or claim
against the United States founded on [FEGLIA].” The question in this case is whether
Ms. Miller’s claim may be characterized as a challenge to an order affecting her rights
under FERSA, as she contends, or whether it should be characterized as a claim
founded on FEGLIA, as the Board held and as the Board and the United States argue in
this appeal. We conclude that the dispute is properly characterized as one founded on
FEGLIA, and that jurisdiction to review the overpayment determination lay in the district
court or the Court of Federal Claims, not in the Merit Systems Protection Board.
The dispute on the merits in this case is whether Ms. Miller should be required to
make premium payments for the period 1991 to 2002, during which she was not
receiving a retirement annuity but for which she was later awarded retroactive annuity
payments. OPM’s decision that she is required to make those premium payments was
based on a construction of 5 U.S.C. § 8707(b)—a provision outside of the FERS laws—
as Ms. Miller acknowledges. Ms. Miller’s sole quarrel with OPM is that she disagrees
with its assertion that the provisions of FEGLIA require it to deduct retroactive payments
from her retirement annuity. She supports her arguments on the merits with references
to various provisions of FEGLIA and corresponding regulations. If Ms. Miller’s proposed
construction of FEGLIA is correct, she will not have to make the back premium
05-3358 6 payments. If OPM’s construction is correct, she will. The resolution of the dispute in
this case thus depends on an interpretation of FEGLIA. Put another way, Ms. Miller’s
claim to have her annuity payments restored to their full, non-offset amount is “founded”
on FEGLIA within the meaning of FEGLIA’s review provision, 5 U.S.C. § 8715. While
the mechanism for collecting the overpayment was through a reduction in Ms. Miller’s
annuity payments, the order requiring that reduction does not “affect [her] rights or
interests” under FERS, within the meaning of the FERS review provision, 5 U.S.C.
§ 8461(e)(1). That is because the reduction in her annuity payments was merely the
mechanism for recovering funds that OPM determined Ms. Miller owed under FEGLIA;
the reduction was not based on any decision regarding a substantive right or interest
under FERS.
The Board has consistently held that, when OPM seeks to offset an employee’s
salary or retirement benefits to collect a debt, the Board does not have jurisdiction over
the merits of the underlying dispute that gave rise to the debt. See, e.g., Ramirez v.
Dep’t of the Army, 86 M.S.P.R. 211, 213 (2000); Lary v. Office of Pers. Mgmt., 65
M.S.P.R. 291, 298-99 (1994), rev’d on other grounds, King v. Merit Sys. Prot. Bd., 105
F.3d 635 (Fed. Cir. 1997); Malone v. Office of Pers. Mgmt., 52 M.S.P.R. 655, 657
(1992); Lashley v. Office of Pers. Mgmt., 45 M.S.P.R. 360, 365 (1990). In Campbell v.
Office of Personnel Management, 90 M.S.P.R. 68 (2001), a case analogous to this one,
an annuitant’s decision to change his life insurance coverage resulted in an
overpayment of his CSRS annuity, which OPM recovered by a reduction in his annuity
payments. The annuitant argued, as Ms. Miller argues here, that OPM’s retroactive
assessment of premiums “would be collecting payments for coverage [he] did not have.”
05-3358 7 Id. at 70. The Board dismissed the case for lack of jurisdiction because “the
overpayment resulted, not from anything related to the computation of the appellant’s
retirement annuity, but rather from a change in the terms of his life insurance coverage
and premiums therefor, as interpreted by OPM, an administrative action not covered by
[the CSRS statutes].” Id. at 71. Similarly here, Ms. Miller’s overpayment is due to
OPM’s assessment of her rights and responsibilities under the FEGLIA statutes, not the
FERS statutes.
Although we are not bound by these decisions of the Board, they are consistent
with our decision in Lewis v. Merit Systems Protection Board, 301 F.3d 1352 (Fed. Cir.
2002). In that case, we held that an annuitant’s challenge to OPM’s refusal to permit
him to purchase life insurance arose under FEGLIA, and was not within the Board’s
jurisdiction over appeals from decisions of OPM in administering the federal retirement
systems. The underlying decision of OPM in this case is similar to the underlying
decision in Lewis: OPM has decided that Ms. Miller is entitled to purchase full life
insurance coverage, but in order to do so she must pay the back premiums to 1991.
That decision, like the decision in Lewis, is a decision as to the scope of Ms. Miller’s
legal rights under FEGLIA, even though, as in Lewis, OPM would collect the additional
premiums, if they are ultimately determined to be due, by reducing the amount of Ms.
Miller’s annuity payments.
In contrast to the Board’s approach, Ms. Miller argues that any reduction in a
retiree’s FERS annuity payments “affect[s] . . . the rights or interests” of the annuitant
under FERSA, and that the merits of the dispute that led to the reduction are therefore
reviewable by the Board. That theory, however, would give the Board very broad
05-3358 8 authority over a wide variety of substantive claims simply because of the mechanism
used to collect the obligations stemming from those claims. We do not think that is
what Congress intended.
The approach that the Board has taken in such cases makes more sense of the
statutory scheme. The reduction in Ms. Miller’s annuity payments was merely one of
several methods OPM could have used to recover the claimed back insurance
premiums. Because recovering an overpayment by an offset against annuity payments,
as in this case, is both more efficient and often less burdensome than other means of
collection, OPM often employs such offset mechanisms to collect annuitants’ debts. It
would be curious to attribute to Congress the intention to direct review of a decision
pertaining to the underlying obligation to different forums depending solely on the
method used to collect the obligation. As the Board points out in its brief, if 5 U.S.C. §
8461(e)(1) were interpreted to give the Board jurisdiction in every case in which an
annuity payment is reduced in order to recover an asserted debt owed by the annuitant,
the Board would assume the task of deciding the merits of a variety of disputes in
different substantive areas, such as student loan obligations and tax law, that are far
afield from the Board’s expertise and are not subjects that Congress could plausibly
have intended to assign to the Board for adjudication.
The flaw in Ms. Miller’s argument that any administrative offset that reduces a
retiree’s annuity falls within the Board’s jurisdiction under section 8461(e)(1) is well
illustrated by an examination of the administrative offset provisions of the Debt
Collection Act, 31 U.S.C. § 3716. In that Act, Congress authorized federal agencies
(and even state instrumentalities under certain conditions) to collect a wide variety of
05-3358 9 claims by administrative offset. The scheme envisioned under the Act is for the
collecting agency to provide a review mechanism through which to address the
substance of the claim. If the claim is upheld, the agency may seek to collect it through
an administrative offset, including an offset against federal annuity payments. 31 C.F.R.
§ 901.3(d). In such cases, the Office of Personnel Management is responsible for
ensuring that the annuitant has had the proper due process procedures within the
claimant agency, see 31 C.F.R. § 901.3(b)(4); 5 C.F.R. § 831.1803, and the failure to
comply with those procedures can be appealed to the Board. See Ramirez, 86
M.S.P.R. at 214. But the Board has held that it does not have the authority to address
the merits of the underlying claims, which can arise from an infinite variety of obligations
that employees can incur during the course of their employment. See, e.g., Johnson v.
Office of Pers. Mgmt., 97 M.S.P.R. 193, 196-97 (2004) (no review of the merits of an
administrative offset sought by the Office of Worker Compensation Programs);
Cebzanov v. Office of Pers. Mgmt., 96 M.S.P.R. 562, 566 (2004) (no review of the
merits of an administrative offset sought by Internal Revenue Service). Moreover, the
government-wide regulations that governed Debt Collection Act offsets against
employees’ retirement funds, until the regulations were recently revised, provided that
the setoff procedures did not “authorize the OPM or the MSPB to review the merits of
the requesting agency’s determination with respect to the amount and validity of the
claim.” 4 C.F.R. § 102.4 (2000); see also 5 C.F.R. § 831.1806(d)(3)(1) (in arranging
setoffs of debts against employee retirement funds, OPM has no authority to review the
merits of the claim against the employee).1 Thus, we think it clear that under the Debt
1 When the government-wide regulations were revised and recodified at 31
05-3358 10 Collection Act Congress envisioned that the substantive claims giving rise to the
administrative offset would be adjudicated in the respective agencies, not before the
Board.
The same principle applies to the offset at issue in this case. As in the case of
setoffs authorized by the Debt Collection Act, any reduction in the amount of a former
employee’s annuity payments can in a broad sense be said to affect the former
employee’s interests under FERSA, since an employee has an “interest” in receiving an
annuity. The operation of the Debt Collection Act makes clear, however, that Congress
did not intend for the term “administrative action or order affecting the rights or interests
of an individual . . . under [FERSA]” in section 8461(e)(1) to encompass any order that
would have the effect of reducing the amount of an annuity, either on one occasion or
over a period of time. Instead, we agree with the Board that the reference to “rights or
interests” in section 8461(e)(1) limits the Board to the adjudication of substantive claims
created by FERSA. Contrary to Ms. Miller’s contention, section 8461(e)(1) does not
extend the Board’s jurisdiction to encompass review of “all attempts to recover
payments from a retiree’s annuity benefits—regardless of the reason for the recovery or
the source of the overpayment.”
Ms. Miller notes that decisions whether to invoke equitable waiver of the
government’s right to recover overpayments, see 5 U.S.C. § 8470(b) and 5 C.F.R.
§ 845.301, are always reviewable by the Board, even though the underlying obligation
C.F.R. Part 900, the provision referring to OPM and the MSPB was omitted, but the promulgating agencies’ contemporaneous comments make clear that the change was not meant to have substantive effect. See 62 Fed. Reg. 68,476, 68,482 (Dec. 31, 1997)
05-3358 11 may not be related to a right or obligation created by FERSA. See Mitchell v. Office of
Pers. Mgmt., 97 M.S.P.R. 566 (2004). She argues that it would be highly inefficient to
have questions relating to the substantive obligation reviewed in the Court of Federal
Claims or in a district court, but to have the issue of the waiver of overpayments
reviewed by the Merit Systems Protection Board, since it is possible that both claims will
arise in connection with a single overpayment dispute.
The possibility that a different regime would be more efficient does not justify our
rejection of the system of review that Congress put into place, if we are persuaded that
Congress has spoken clearly on the matter, as we are in this case. In any event, the
specific concern raised by Ms. Miller is not implicated in this case, as the Board has
already determined that OPM did not err by declining to waive the reimbursement
requirement, and Ms. Miller has not sought further review of that issue. Therefore, we
need not decide whether, in a case in which an annuitant challenges the merits of
OPM’s decision to offset her annuity to collect a debt external to her rights under the
statutes creating the annuity and also seeks review of OPM’s decision not to waive the
debt, the annuitant would have to bring those claims in two different forums or whether
the court addressing the overpayment decision could address the waiver issue as a
matter of supplemental or pendent jurisdiction. See 28 U.S.C. § 1367; Trek Leasing,
Inc. v. United States, 62 Fed. Cl. 673 (2004). If supplemental or pendent jurisdiction is
available in such cases, the burden of requiring parties to litigate the two issues in
different forums would, of course, be eliminated.
(proposed rule); 65 Fed. Reg. 70,390, 70,392 (Nov. 22, 2000) (explaining reason for change).
05-3358 12 In summary, Ms. Miller’s challenge to the merits of the government’s
overpayment claim is not within the scope of 5 U.S.C. § 8461(e)(1), but falls instead
under section 8715, which requires that her claim be brought either in a federal district
court or in the Court of Federal Claims. We therefore affirm the Board’s decision
dismissing her claim that OPM erred in assessing an overpayment against her.
Each party shall bear its own costs for this appeal.
The court wishes to express its appreciation to Catherine E. Stetson, Esq., who
undertook to represent Ms. Miller pro bono at the court’s invitation and who submitted a
brief on behalf of Ms. Miller.
05-3358 13 United States Court of Appeals for the Federal Circuit
05-3358
ANNA MILLER,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
DYK, Circuit Judge, dissenting.
I respectfully dissent from the majority’s holding that the Merit Systems
Protection Board (“MSPB”) lacks jurisdiction to determine whether the Office of
Personnel Management (“OPM”) improperly deducted amounts for life insurance from
the petitioner’s annuity payments. In my view the majority opinion rests on a
misunderstanding of the 1978 Civil Service Reform Act (“CSRA”), Pub. L. 95-454, 92
Stat. 1111 et seq., and of the limited provision for court jurisdiction over life insurance
claims enacted in 1954 and now appearing in 5 U.S.C. § 8715.
I
Before the CSRA legislation of 1978, claims for payment of federal annuities
could be brought in the Court of Claims or district courts under the Tucker Act or the
Little Tucker Act. See Lindahl v. Office of Pers. Mgmt., 470 U.S. 768, 772-73 (1984);
Dismuke v. United States, 297 U.S. 167, 172 (1936); see also 28 U.S.C. § 1346(a)(2)
(2000); 28 U.S.C. § 1491 (2000). But in 1978, as described by the Supreme Court in Lindahl, Congress placed exclusive jurisdiction in the Merit Systems Protection Board
(“MSPB”) to adjudicate annuity claims which had previously been within the jurisdiction
of the Court of Claims and the district courts. Lindhal, 470 U.S. at 773-74. Congress
“comprehensively overhauled the civil service system,” and created the OPM and the
MSPB. Lindhal, 470 U.S. at 7731; see CSRA §§ 201, 202, 92 Stat. 1118-31. The
CSRA created a specialized review process for resolving claims relating to retirement
benefits. Today this system governs claims under both the Civil Service Retirement
System (“CSRS”) and the Federal Employees Retirement System (“FERS”). The
system calls for the OPM, in the first instance, to adjudicate any claim arising under the
retirement system. See 5 U.S.C. §§ 8347(a)-(b), 8461(b)-(c) (2000). Next, OPM
decisions which affect “the rights or interests of an individual” under FERS or CSRS are
appealable to the MSPB. See 5 U.S.C. §§ 8347(d)(1), 8461(e)(1). Finally, an employee
can appeal a decision of the MSPB to this court, which has exclusive jurisdiction over
such appeals. See 5 U.S.C. § 7703(b)(1) (2000); 28 U.S.C. § 1295(a)(9) (2000);
Lindahl, 470 U.S. at 774.
The question presented here is whether the legitimacy of a government
deduction from an annuity otherwise due an employee (basically a defense to the
1 Lindhal addressed the effect of a finality provision that was first enacted in 1948, when annuity claims were still reviewable by the district courts and Court of Claims. Lindhal, 470 U.S. at 773. The current version of that provision provides that “decisions . . . [of the designated administrative agency] concerning these matters are final and conclusive and are not subject to review.” 5 U.S.C. § 8347(c) (2000). The Court held that this provision barred the review of the “factual underpinnings” of disability determinations under the CSRA but permitted review of substantial procedural issues. Lindhal, 470 U.S. at 791.
05-3358 2 annuity claim) is to be litigated before the MSPB in a proceeding claiming the annuity, or
in a suit in the Court of Federal Claims or the district courts.
While the annuity claim arises under the provisions of FERS, 5 U.S.C. §§ 8401-
79, the right to the offset was created by 5 U.S.C. § 8707(b), a provision of the Federal
Employees Group Life Insurance Act (“FEGLIA”). Thus, the employee’s request for an
unreduced amount depends both on interpretations of FERS (the amount of the annuity)
and FEGLIA (the amount of the reduction). At common law the legitimacy of an
employer’s deduction from employee compensation was litigated in a suit to recover the
compensation. The employee would sue for the unpaid compensation, and the
employer would defend on the ground that it had a no obligation to pay the full amount
because it had a right to deduct the premium. The majority rejects this approach with
respect to federal annuity claims. To the extent the majority may suggest that the
MSPB is without jurisdiction to decide cases that turn on the interpretation of statutes
(such as FEGLIA) not within its immediate grant of jurisdiction, that is plainly incorrect.
The MSPB frequently decides such cases and interprets both federal and state statutes
that are outcome determinative.2
2 Dickey v. Office of Pers. Mgmt., 419 F.3d 1336, 1339-40 (Fed. Cir. 2005) (“In determining whether a common-law marriage existed, we must apply the laws of the state where the government employee had a permanent home when he or she died . . . .”); White v. Dep’t of Justice, 328 F.3d 1361, 1368-70 (Fed. Cir. 2003) (affirming Board decision that petitioner had been convicted of “a misdemeanor crime of domestic violence” within the meaning of 18 U.S.C. § 921(a)(33), and thus was ineligible to carry a firearm under 18 U.S.C. § 922(g)(9)); Wiley v. Dep’t of Justice, 328 F.3d 1346, 1357 (Fed. Cir. 2003) (reversing Board determination that the search of petitioner’s car was reasonable within the meaning of the Fourth Amendment); O'Neill v. Dep’t of Hous. and Urban Dev., 220 F.3d 1354, 1356, 1363 (Fed. Cir. 2000) (holding that the Board erred in determining that petitioner was an “agent” within meaning of statute prohibiting federal employee from acting as agent of private party before government agency); cf. King v. Nazelrod, 43 F.3d 663, 666 (Fed. Cir. 1994) (holding
05-3358 3 Thus where, as here, a retired employee initiates a proceeding to recover an
annuity, the MSPB has jurisdiction--indeed exclusive jurisdiction--to adjudicate the claim
for an annuity, and in doing so may adjudicate a government defense that the annuity
was properly reduced by life insurance premiums.
II
Ultimately, the majority opinion appears to rest its decision on the ground that 5
U.S.C. § 8715 requires that suits contesting improper life insurance deductions be
initiated in the courts. However, there is no indication in section 8715 that that
jurisdictional provision was designed to be exclusive. The language of the statute and
its legislative history suggest that the statute was designed to allow an employee to
bring cases in the district court without regard to the dollar limit of the Little Tucker Act.
In my view it is particularly clear that section 8715 could not have been designed
to force claimants to litigate annuity claims in the Court of Federal Claims and the
district courts. Section 8715 provides that “[t]he district courts of the United States have
original jurisdiction, concurrent with the United States Court of Federal Claims, of a civil
action or claim against the United States founded on this chapter.” 5 U.S.C. § 8715
(2000). As the majority appears to recognize, “arising under” jurisdiction often depends
on the way that a plaintiff chooses to frame a complaint. Here the petitioner’s claim to
an annuity could be framed as arising under FERS or as arising under FEGLIA. If a
complaint were framed as simply a request for a withheld annuity, it would not arise
under FEGLIA, even thought the United States could defend on the ground that the
that an agency is required to prove all elements of the criminal offense with which petitioner is charged).
05-3358 4 deductions were proper under FEGLIA. See, e.g., Holmes Group, Inc. v. Vornado Air
Circulation Sys., Inc., 535 U.S. 826, 830 (2002). In other words, this is not a case in
which petitioner’s claim necessarily arises under FEGLIA. There is also nothing in the
language or history of FEGLIA that suggests that section 8715 was designed to compel
that litigation of all interpretive issues under FEGLIA be brought under that provision.
The predecessor of section 8715 was enacted in 1954 as part of FEGLIA, which
“was designed to provide low-cost group life, accidental death and dismemberment
insurance to Federal employees in sums approximating their annual salaries.” Walker
v. United States, 161 Ct. Cl. 792, 797 (1963). The purpose of the jurisdictional
provision, as described in the accompanying Senate Report, was to “extend the
jurisdiction of United States District Courts above the $10,000 limitation now in effect
[under the Tucker Act].” S. Rep. No. 83-1654 at 4-5 (1954), as reprinted in 1954 U.S.
Code Cong. & Admin. News, at 3052; see Walker, 161 Ct. Cl. at 798-99. Other than
eliminating the $10,000 limit, the provision was not designed to extend court jurisdiction
beyond what was already provided by the Tucker Act. Walker, 161 Ct. Cl. at 798-99.
The purpose of section 8715 was thus quite limited. Under FEGLIA, the United
States did not itself write policies of insurance, but rather arranged for private group
policies for United States employees. Walker, 161 Ct. Cl. at 799. Normally disputes
concerning the recovery of policy proceeds would be brought against the private
insurance company, not the United States. The evident purpose of section 8715 was to
clarify that claimants to the proceeds of life insurance policies of employees could sue
the United States in the courts if the United States failed to arrange for or permit the
purchase of insurance. There is not the slightest indication in the language or
05-3358 5 legislative history of section 8715 that the statute was designed to confer jurisdiction in
the courts to determine the rights of the annuitants to recover annuities or contest
adjustments to annuities.
The limited purpose of section 8715 is confirmed by the cases decided under this
provision. See Lewis v. Merit Sys. Protection Bd., 301 F.3d 1352, 1353 (Fed. Cir.
2002); Walker, 161 Ct. Cl. at 800; Barnes v. United States, 307 F.2d 655, 657-58 (D.C.
Cir. 1962). For example, in Barnes, the District of Columbia Circuit held that it had
jurisdiction over a suit by the widow of a retired government employee to secure funds
allegedly owed to her under a group insurance policy arranged for by the United States.
Id. at 657-58. The questions were whether the policy lapsed because the employee
failed to convert the group policy to an individual policy upon his separation from
service, and whether the government had provided adequate notice of the conversion
rights. The court affirmed the dismissal of the claim, holding that the government had
not “failed in the performance of any duty arising under the Act,” because the
employee’s superiors had notified him of his right to convert. Id. at 659. See also
Walker, 161 Ct. Cl. at 800 (dismissing a widow’s claim to insurance proceeds because
the government, which had notified employee of his right to convert, had not
“breach[ed] . . . any obligation owed by it under the life insurance act.”). More recently,
in Lewis, we held that an allegation that OPM breached a duty to permit an employee to
purchase additional life insurance must be brought in the courts under section 8715.
Lewis, 301 F.3d at 1354. None of these cases has held or suggested that annuity
claims or claims contesting annuity deductions must be brought under section 8715 in
the district courts or the Court of Federal Claims.
05-3358 6 In short, section 8715 was designed to provide court jurisdiction to determine
claimed rights to life insurance by federal employees, not compel federal employees to
litigate the propriety of particular deductions for life insurance in the Court of Federal
Claims or district courts.
III
The effect of today’s decision is to bifurcate the claims process that was created
by the 1978 legislation. If the annuity case involves an interpretation of the provisions of
FERSA, the claim must be pursued before the MSPB. If the ground for denying the
annuity rests on some other statutory provision, such as the provisions of FEGLIA at
issue here, jurisdiction lies in the district courts and the Court of Federal Claims under
the Tucker Act. In my view there is no basis for fragmenting suits for recovering annuity
payments, and such fragmentation appears to be contrary to the purpose of the CSRA
legislation which gives exclusive jurisdiction to the MSPB over annuity claims.
It is entirely counterintuitive that Congress would have wished to require
employees to litigate the propriety of deductions in the courts rather than before the
MSPB. Bringing suit in district court imposes a significantly greater burden on
employees than seeking review through the MSPB’s administrative procedures.
Today’s decision thus requires disputes involving relatively small amounts to be
resolved in the more expensive forum. Furthermore, an employee challenging both the
method by which an annuity is calculated and the merits of a FEGLIA deduction is
forced to split its claim between the courts and the MSPB. So too, it appears that the
Board exercises jurisdiction over decisions whether to waive the government’s right to
recover overpayments if the government fails to deduct the proper amount for life
05-3358 7 insurance premiums. See 5 U.S.C. § 8470(b) (2000); 5 C.F.R. § 845.301 (2005);
Mitchell v. Office of Pers. Mgmt., 97 M.S.P.R. 566, 570-71 (2004). While the majority
purports to reserve the question, Maj. Op. at 12, today’s decision would again require
bifurcation of such claims, with litigation of the deduction issue in the Court of Federal
Claims or district courts and the waiver issue in the MSPB.
Finally the majority expresses concern that because of the Debt Collection Act,
31 U.S.C. § 3716, the Board might be required to adjudicate the merits of various debt
claims by the government in cases in which the annuity was reduced because of an
offset for a government debt. But the Debt Collection Act itself provides a specific
mechanism for the determination of the merits of the debt. The statute provides that the
agency must determine whether the debt is owed, see 31 U.S.C. § 3716(a), and the
courts have assumed that the agency decision is reviewable under the APA. See DRG
Funding Corp. v. Sec’y of Hous. and Urban Dev., 76 F.3d 1212, 1214 (D.C. Cir. 1996);
cf. Lockhart v. United States, 376 F.3d 1027, 1028-29 (9th Cir. 2004), aff’d, 126 S. Ct.
699 (2005). In the present situation, Congress has provided no special procedure in
section 3716(a) or elsewhere where issues as to the propriety of premium deductions
must be adjudicated. The proper place for the determination lies in the MSPB on review
of an annuity claim.
For the foregoing reasons, I respectfully dissent.
05-3358 8