Peter H. Beer v. United States

111 Fed. Cl. 592, 2013 U.S. Claims LEXIS 654, 2013 WL 2552162
CourtUnited States Court of Federal Claims
DecidedJune 11, 2013
Docket09-37C
StatusPublished
Cited by5 cases

This text of 111 Fed. Cl. 592 (Peter H. Beer v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peter H. Beer v. United States, 111 Fed. Cl. 592, 2013 U.S. Claims LEXIS 654, 2013 WL 2552162 (uscfc 2013).

Opinion

Compensation Clause of Article III; damages; prejudgment interest; deductions; Federal Employees’ Group Life Insurance Program; tax withholdings.

OPINION

BRUGGINK, Judge.

This is an action for back pay brought pursuant to Article III of the United States Constitution. The matter is pending on remand from the United States Court of Appeals for the Federal Circuit. Beer v. United States, 696 F.3d 1174 (Fed.Cir.2012), cert. denied, — U.S. -, 133 S.Ct. 1997, 185 L.Ed.2d 866 (2013). After finding for the plaintiffs on liability, the Federal Circuit directed this court to determine, as damages, “the additional compensation to which appellants were entitled since January 13, 2003— the maximum period for which they can seek relief under the applicable statute of limitations.” Id. at 1187.

On January 18, 2013, we denied defendant’s motion to stay proceedings pending the outcome of its petition for certiorari before the Supreme Court. We then directed the parties to file simultaneous briefs as to the correct calculation of damages. On February 22, 2013, the parties filed initial briefs and filed response and reply briefs thereafter. Because there are other cases pending which raise similar issues and because those cases are not as far along procedurally, we invited and received amicus briefs. On April 22, 2013, the Supreme Court denied defendant’s petition for certiorari. United States v. Beer, — U.S. -, 133 S.Ct. 1997, 185 L.Ed.2d 866 (2013). We held oral argument as to the correct calculation of damages on May 31, 2013. For the reasons set out below, the net back pay award will be calculated without including prejudgment interest on the lost pay attributable to withheld cost of living increases in 2007 and 2010, without deduction of additional life insurance premiums, and with prejudgment interest on a pretax basis.

BACKGROUND

Plaintiffs are six federal judges 1 who make a claim for back pay under the Com *594 pensation Clause of Article III of the Constitution, which provides that “Judges ... shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.” U.S. Const, art. Ill, § 1. Because the clause “requires repayment of prohibited reductions in compensation to Article III judicial officers,” Hatter v. United States, 953 F.2d 626, 628 (Fed.Cir.1992), it constitutes a “source of substantive law that creates the right to money damages.” Fisher v. United States, 402 F.3d 1167, 1172 (Fed.Cir.2005) (en banc) (citing United States v. Mitchell, 463 U.S. 206, 216, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983)). Plaintiffs thus state a claim within the court’s Tucker Act jurisdiction. See 28 U.S.C. § 1491(a)(1) (2006) (“The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress....”).

Plaintiffs initially also sought as relief a declaration by the court that “Congress may not in the future withhold the salary adjustments promised to them-” Compl. ¶ 3 (Prayer for Relief). On May 3, 2013, plaintiffs filed a status report in which they voluntarily dismissed the complaint’s request for declaratory relief. Accordingly, the only issue remaining is back pay.

It is the law of this case that Congress improperly reduced plaintiffs’ compensation and violated the Constitution by withholding cost of living adjustments (“COLAs”) from their pay, which were assured under the Ethics Reform Act of 1989, Pub.L. No. 101-194, § 704, 103 Stat. 1716, 1769 (hereinafter “1989 Act”). The 1989 Act provides that, when General Schedule employees receive a pay increase, 2 Article III judges also receive an increase, pursuant to a precise formula. 3 See id. § 704.

In some years when General Schedule employees received adjustments to pay, Congress passed laws blocking COLAs for judges. It did so for the fiscal years of 1995, 1996, 1997, and 1999. 4 COLAs were also withheld in 2007 and 2010, although not because Congress passed blocking legislation to prevent those pay increases. Instead, Congress relied on an interpretation of an amended statute, originally passed as Pub.L. No. 97-92, § 140, 95 Stat. 1183, 1200 (1981) (hereinafter “Section 140”), which provided that appropriations to increase pay for federal judges had to “be specifically authorized by Act of Congress hereafter enacted.” This authorization requirement expired, however, in 1982. Williams v. United States, 240 F.3d 1019, 1026-27 (Fed.Cir.2001).

Congress amended Section 140 on November 28, 2001, to state that “[tjhis section shall apply to fiscal year 1981 and each fiscal year thereafter.” Pub.L. No. 107-77, § 625, 115 Stat. 748, 803. Acting on the belief that it then needed to pass specific legislation to authorize COLAs, Congress passed legislation to that effect for fiscal years 2002, 2004, 2005, 2006, and 2008. 5 Congress failed to pass legislation in 2007 and 2010 with the result that judges did not receive COLAs in those years.

Plaintiffs filed their complaint on January 16, 2009. 6 We initially dismissed on the basis *595 of Williams. Plaintiffs appealed. On October 5, 2012, the Federal Circuit overruled Williams in its en bane decision in this case. Beer, 696 F.3d at 1176-77. The Federal Circuit held that “the 1989 Act triggered the Compensation Clause’s basic expectations and protections,” because it made a “precise and definite commitment to automatic yearly-cost of living adjustments for sitting members of the judiciary.” Id. at 1177. The legislation that blocked COLAs in 1995,1996, 1997, and 1999, “broke this commitment and effected a diminution in judicial compensation.” Id. at 1185.

The court of appeals also held that “federal judges should have received the adjustments in 2007 and 2010.” Id. at 1185. Congress’s belief that it had to specifically authorize pay increases after the 2001 amendment to Section 140 was “an erroneous statutory interpretation.” Id. at 1186. The 2001 amendment only made “permanent whatever effect the provision had when originally enacted” in 1981. Id.. Although Section 140 required that, after 1981, pay increases had to be specifically authorized, the 1989 Act satisfied that requirement. Id.

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