Stuart v. Opm

• Court: Court of Appeals for the Federal Circuit
• Decided: June 13, 2025
• Docket: 24-1024
• Status: Published

Opinion

Case: 24-1024 Document: 47 Page: 1 Filed: 06/13/2025

United States Court of Appeals for the Federal Circuit ______________________

ANTHONY S. STUART, Petitioner

v.

OFFICE OF PERSONNEL MANAGEMENT, Respondent ______________________

2024-1024 ______________________

Petition for review of the Merit Systems Protection Board in No. NY-0842-17-0107-I-1. ______________________

Decided: June 13, 2025 ______________________

SHAUN RYAN YANCEY, Melville Johnson, P.C., Atlanta, GA, argued for petitioner. Also represented by JENNIFER DUKE ISAACS.

CORINNE ANNE NIOSI, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for respondent. Also represented by BRIAN M. BOYNTON, PATRICIA M. MCCARTHY, FRANKLIN E. WHITE, JR.; ROXANN SAMANTHA JOHNSON, Office of General Counsel, United States Office of Personnel Management, Washington, DC. ______________________ Case: 24-1024 Document: 47 Page: 2 Filed: 06/13/2025

Before HUGHES, BRYSON, and STARK, Circuit Judges. BRYSON, Circuit Judge. Navy veteran Anthony Stuart appeals from a decision of the Merit Systems Protection Board holding that Mr. Stuart is not entitled to credit for his periods of mili- tary service in computing his civilian retirement annuity. The Board held that Mr. Stuart’s military service could not be counted in computing his civilian pension because he was already receiving military retired pay based on a disa- bility incurred during his military service. We affirm. I Mr. Stuart served on active duty in the Navy during three periods: (1) March 25, 1974, to March 22, 1979; (2) March 18, 1981, to March 16, 1984; and (3) July 23, 1985, to April 23, 1991. J.A. 111. In 1991, the Navy placed Mr. Stuart on the Temporary Disability Retirement List based on various medical conditions. J.A. 132. The Navy subsequently informed Mr. Stuart that his disability was determined to be permanent and that he had been assigned a 60% disability rating. J.A. 57. Accordingly, as of August 1, 1994, Mr. Stuart was placed on the Permanent Disability Retirement List, at which point he became eligible to re- ceive military retired pay. Id. The Defense Finance and Accounting Service calculated the amount of Mr. Stuart’s retired pay using two methods, one based on the percent- age of his disability rating (60%), and the other based on his total years of service (13 years and 8 months). J.A. 91. Mr. Stuart received the amount calculated based on his dis- ability rating, because it yielded a greater gross pay amount. Id. After his military service, Mr. Stuart entered into fed- eral civilian service and became eligible to accrue retire- ment benefits under the Federal Employees’ Retirement System (“FERS”). He retired from his civil service position on November 28, 2015. J.A. 108. On his FERS retirement Case: 24-1024 Document: 47 Page: 3 Filed: 06/13/2025

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application form, Mr. Stuart indicated that he was not waiving his military retired pay in order to receive credit toward his FERS retirement benefits for his military ser- vice. J.A. 111. On March 23, 2016, the Office of Personnel Manage- ment (“OPM”) issued an initial decision informing Mr. Stu- art that his military service was not creditable toward his FERS annuity calculation because he was receiving mili- tary retired pay. J.A. 93. OPM explained that by statute Mr. Stuart could not receive both military retired pay and FERS credit for his military service unless his military re- tired pay was awarded for: (1) service-connected disability either incurred in combat with an enemy of the United States or caused by an instrumentality of war and incurred in the line of duty during a period of war; or (2) retirement from a reserve component of the Armed Services under chapter 1223 of title 10. Id.; see 5 U.S.C. § 8411(c)(2). OPM subsequently explained that because Mr. Stuart’s military retired pay was not awarded for any of the reasons listed as exceptions in 5 U.S.C. § 8411(c)(2), he was re- quired to waive his military retired pay if he wished to have his military service credited toward the calculation of his FERS annuity. J.A. 66. Mr. Stuart sought reconsideration, asserting that he was not required to waive his military retired pay because his military retired pay was based on his disability, not the length of his service. J.A. 88. On February 27, 2017, OPM affirmed its initial deci- sion and found that Mr. Stuart was ineligible to receive credit for his military service in the calculation of his FERS annuity. J.A. 84–85. OPM explained that Mr. Stuart’s ac- tive-duty service was an “integral part” of his military re- tired pay, whether calculated based on the percentage of his disability or the length of his service. J.A. 85. Mr. Stuart appealed OPM’s determination to the Merit Systems Protection Board. In an initial decision, the ad- ministrative judge held that Mr. Stuart must meet the Case: 24-1024 Document: 47 Page: 4 Filed: 06/13/2025

requirements of 5 U.S.C. § 8411(c)(2) to credit his military service toward his FERS annuity. J.A. 71. The adminis- trative judge found that Mr. Stuart was not entitled to such credit because it was undisputed that Mr. Stuart had not waived his military retired pay, and that he did not meet any of the exceptions to the rule against double crediting military service for both military retired pay and a civil ser- vice annuity. Id. The administrative judge also found that because Mr. Stuart was awarded retirement pay based on his period of military service, it was irrelevant whether the amount of that award was calculated based on the percent- age of his disability or the length of his service. J.A. 71– 72. The administrative judge thus concluded that Mr. Stu- art was not entitled to receive FERS credit for his military service. J.A. 72. The full Board affirmed the initial decision, modifying it only to clarify the administrative judge’s “analysis re- garding whether [Mr. Stuart’s] retired pay is based on his military service.” J.A. 6. The Board held that the admin- istrative judge erred in finding that the method used to cal- culate Mr. Stuart’s military retired pay was irrelevant, but nonetheless agreed with her ultimate finding that his re- tired pay was based on his military service. J.A. 7. While the Board acknowledged that the amount of Mr. Stuart’s retired pay was not calculated based on the length of his service, it explained that he was awarded re- tired pay for disability that “occurred during his military service.” Id. Moreover, the Board found that there was no evidence to suggest that Mr. Stuart’s military retired pay was based solely on his most recent period of service and that Mr. Stuart “does not distinguish among his periods of military service.” J.A. 8. The Board therefore found that Mr. Stuart’s retired pay “is ‘based on’ all his periods of mil- itary service.” Id. Finally, the Board declined to disturb the administrative judge’s finding that Mr. Stuart did not dispute that he does not meet any of the statutory excep- tions to the rule against double crediting military service Case: 24-1024 Document: 47 Page: 5 Filed: 06/13/2025

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for both military retired pay and a civilian retirement an- nuity. J.A. 9. II A Section 8411(c) of title 5 provides that for purposes of computing a civil service retirement annuity, a federal em- ployee “shall be allowed credit for . . . each period of mili- tary service performed after December 31, 1956, and before the separation on which title to annuity is based.” 5 U.S.C. § 8411(c)(1). In order to avoid double crediting, however, the statute provides that if the employee “is awarded re- tired pay based on any period of military service, the ser- vice of the employee . . . may not include credit for such period of military service” unless an exception applies. Id. § 8411(c)(2); see also Miller v. Off. of Pers. Mgmt., 903 F.3d 1274, 1281 (Fed. Cir. 2018) (The bar against double count- ing periods of military service “comes into play when a civil service annuitant seeks to increase his or her annuity by adding to his or her creditable civilian service military ser- vice time for which the annuitant is receiving military re- tirement pay.”). 1 The statute provides only two exceptions to the rule against crediting a period of military service for both FERS and military retirement benefits. First, a period of military service may be credited for FERS annuity when military retired pay for that period is awarded “based on a service-connected disability (i) in- curred in combat with an enemy of the United States; or (ii) caused by an instrumentality of war and incurred in line of duty during a period of war as defined by

1 Although Miller addressed the bar against double crediting of military service under the Civil Service Retire- ment System (“CSRS”), 5 U.S.C. § 8332(c)(2), that statute contains the same language as 5 U.S.C. § 8411(c)(2), which applies to benefits under FERS. Case: 24-1024 Document: 47 Page: 6 Filed: 06/13/2025

section 1101 of title 38.” Id. § 8411(c)(2)(A). Second, a pe- riod of military service may be credited toward FERS an- nuity when military retired pay for that period is awarded “under chapter 1223 of title 10,” which deals with retired pay for persons in non-regular service. Id. § 8411(c)(2)(B). As the Board found, it is clear that Mr. Stuart is receiv- ing military retired pay and that he has elected not to waive his military retired pay, a requirement for having “years of uniformed service counted with his civilian ser- vice in the calculation of a civil service annuity.” Absher v. United States, 805 F.2d 1025, 1026 (Fed. Cir. 1986). It is also clear that Mr. Stuart has not established that either exception under section 8411(c)(2) applies to him.2 Mr. Stuart argues that section 8411(c)(2) “does not ap- ply to [him] because he was not awarded military retired pay based on any period of his military service.” Appel- lant’s Opening Br. at 11. Specifically, Mr. Stuart argues

2 In his reply brief, Mr. Stuart argues that being dis- charged without a discharge certificate prevented him from asserting that he fell within one of the exceptions under section 8411(c)(2)(A), although he does not make any show- ing that his disability fell within either exception. Appel- lant’s Reply Br. at 1. The closest he comes to doing so is to contend that because he worked with hazardous materials while he was in the Navy, “[h]e was harmed greatly in serv- ing his country similar to those servicemen who were in- jured in combat or by an instrumentality of war during a period of war,” and that “he should be entitled to the excep- tion just as those servicemen are entitled to the exception.” Id. at 4. These arguments fail to raise a factual dispute about whether his disability was incurred in combat or by an instrumentality of war in the line of duty during a pe- riod of war. Nor does he suggest that he was awarded re- tirement pay for non-regular service under chapter 1223 of title 10. Case: 24-1024 Document: 47 Page: 7 Filed: 06/13/2025

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that he is “entitled to receive credit for his military service under FERS because his military disability retirement pay was not based on his years of service” but was “based on his disability percentage.” Id. at 10. We disagree with Mr. Stuart’s argument that military retired pay calculated based on the percentage of disability does not qualify as “retired pay based on any period of mil- itary service.” As an initial matter, section 8411(c)(2) clearly contemplates that military retired pay awarded “based on a service-connected disability” constitutes a type of “retired pay based on any period of military service.” Otherwise, it would make no sense for the statute to refer to retired pay based on specific service-connected disabili- ties as exceptions to the principle against double crediting a period of military service. By Mr. Stuart’s logic, it would be irrelevant whether a service-connected disability was incurred in combat or caused by an instrumentality of war in the line of duty dur- ing a period of war; double crediting would be allowed so long as the veteran’s military retired pay was calculated based on the percentage of his disability. That is not what the statute says. See Francis v. Off. of Personnel Mgmt., 985 F.2d 585, 1992 WL 379430, at *2 (Fed. Cir. 1992) (“[The appellant] would have us hold that all military disability pay is exempt from the demands of section 8332(c)(2). Doing so, however, would render super- fluous the language of section 8332(c)(2)(A)(i) and (ii) that exempts retired pay based on specific disabilities.”). The plain language of section 8411(c)(2) thus bars dou- ble crediting Mr. Stuart’s military service in computing his FERS annuity. B To buttress his argument, Mr. Stuart invokes this court’s decision in Babakitis v. Office of Personnel Manage- ment, 978 F.2d 693 (Fed. Cir. 1992), as requiring that his Case: 24-1024 Document: 47 Page: 8 Filed: 06/13/2025

military service be credited in calculating his civilian an- nuity even though he is receiving military retired pay for those periods of service. That case, however, does not sup- port his position.3 In particular, Babakitis does not stand for the proposition that a period of military service may be double credited if the amount of military retired pay was calculated based on the veteran’s percentage of disability, rather than the length of his service. Mr. Babakitis had an initial ten-year period of active- duty service in the military, followed by a period of civilian service that ended with his retirement in 1973. When he separated from the civil service in 1973, he began receiving a Civil Service Retirement Act (“CSRA”) annuity that cred- ited his ten years of military service that preceded his ci- vilian employment. Following his retirement from the civil service, Mr. Babakitis embarked on another period of ac- tive duty in the military. Subsequently, during that second period of military service, Mr. Babakitis became disabled and was awarded a military disability pension, which was calculated based on the percentage of his disability because it provided a larger amount than the calculation based on the length of his service. At issue in that case was whether Mr. Babakitis’s mil- itary disability pension nullified his “entitlement to credit

3 Mr. Stuart also argues that the Board erred “in not considering relevant language from the OPM CSRS and FERS Handbook regarding waiver of military retired pay.” Appellant’s Opening Br. at 11. The Board, however, did consider the Handbook. The Board found that Mr. Stuart’s “military service, during which he developed a disability, is not similar to those types of military service described in the Handbook.” J.A. 8–9. The Board also found that “the Handbook does not conflict with 5 U.S.C. § 8411(c), or our analysis of that statutory provision.” J.A. 9. There is no error in those findings. Case: 24-1024 Document: 47 Page: 9 Filed: 06/13/2025

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under CSRA for his [initial] ten-year period of military ser- vice.” 978 F.2d at 694. The court held that there was no impermissible double crediting of the initial ten-year pe- riod because Mr. Babakitis’s military pension was not “based on” that initial period. See id. at 696 (“The statute begins with a direction that credit shall be given for each period of military service before the annuitant separates from a civilian position. It is, thus, necessary to look first at whether Babakitis’s military pension is based on his in- itial ten years in the military.”). The court explained that “[t]he calculation of Ba- bakitis’s disability annuity was ‘based on’ (1) a disability which occurred during his final period of military service and (2) the extent of his disability, not on the total length of his military service.” Id. That statement, however, does not mean that retired pay cannot be “based on” a period of military service if its amount is calculated using the per- centage of the veteran’s disability. The court’s analysis was confined to whether Mr. Babakitis’s retired pay was “based on” his initial period of military service, and the court found no connection between that period and his mil- itary retired pay, which was only awarded after he became disabled during the later period of service. See id. at 695 (“As an initial matter it should be understood that only mil- itary service time prior to civilian employment is at is- sue.”). Because Mr. Babakitis’s military pension was not “based on” his initial period of military service, he did not run afoul of the double crediting prohibition of sec- tion 8411(c), which precludes crediting a period of service that resulted in retired military pay if the veteran is seek- ing credit for “such service” toward his civilian retirement annuity. This court’s decision in Babakitis therefore does not give Mr. Stuart the right to obtain credit for his mili- tary service toward both his military retirement pay and his FERS retirement annuity. Case: 24-1024 Document: 47 Page: 10 Filed: 06/13/2025

C Finally, Mr. Stuart asserts at one point in his brief that “[h]is military retired pay had to be based on his final pe- riod of service because the U.S. military would not have al- lowed [him] to re-enlist with a disabling medical condition.” Appellant’s Opening Br. at 22. Mr. Stuart, however, did not make any argument regarding the distinctness of his periods of service before the Board. See J.A. 8 (“[Mr. Stu- art] acknowledges on review that his military retirement was based on disabilities that he acquired while working with hazardous substances during his military service, and he does not distinguish among his periods of military ser- vice. Therefore, we find that the appellant’s retired pay is ‘based on’ all his periods of military service within the meaning of 5 U.S.C. § 8411(c)(2).”). The Board, in any event, found “no evidence to suggest that his military re- tired pay was based solely on his most recent period of ser- vice.” Id. We find no error in that finding. We therefore uphold the Board’s analysis of the statute and its application to Mr. Stuart’s case. AFFIRMED COSTS No costs.