Leighton v. Office of Personnel Management ( 2008 )

United States Court of Appeals for the Federal Circuit
2008-3144
MARK S. LEIGHTON,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Mark S. Leighton, of Chesapeake, Virginia, pro se.
David F. D’Alessandris, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, for respondent. With
him on the brief were Jeffrey S. Bucholtz, Acting Assistant Attorney General; Jeanne E.
Davidson, Director; and Kenneth M. Dintzer, Assistant Director.
Appealed from: Merit Systems Protection Board
United States Court of Appeals for the Federal Circuit
2008-3144
MARK S. LEIGHTON,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Petition for review of the Merit Systems Protection Board in DC844E070767-I-1.
__________________________
DECIDED: June 17, 2008
__________________________
Before MAYER, RADER and BRYSON, Circuit Judges.
PER CURIAM.
Mark S. Leighton appeals the final decision of the Merit Systems Protection
Board, Leighton v. Office of Pers. Mgmt., No. DC-844E-07-0767-I-1 (M.S.P.B. Jan. 24,
2008), holding that the Office of Personnel Management (“OPM”) properly computed
Leighton’s Federal Employees’ Retirement System (“FERS”) disability retirement
annuity. Because the board correctly sustained OPM’s reasonable interpretation of the
relevant statutes, we affirm.
BACKGROUND
Leighton sustained work-related injuries to his neck, spine and knees while
working with the Naval Special Warfare Training Group in Virginia Beach, Virginia. The
Social Security Administration (“SSA”) determined that Leighton had become disabled
as of November 18, 2003, and granted him monthly disability benefits. At the time, he
was also receiving compensation for lost wages from the Office of Workers’
Compensation Programs (“OWCP”).
Leighton subsequently applied for, and was granted, a FERS disability retirement
annuity. Since concurrent receipt of OWCP wage loss compensation and FERS
disability retirement benefits is generally prohibited, OPM suspended payment of
Leighton’s FERS benefits. Effective October 29, 2006, Leighton qualified to receive a
monthly OWCP “schedule award” based upon the permanent impairment of his upper
extremities. Because he was now receiving a scheduled workers’ compensation award,
rather than OWCP compensation for wage loss, he became eligible to collect his FERS
retirement disability annuity.
As of November 2006, Leighton was receiving $3,491.00 per month from his
OWCP schedule award. As of December 2006, Leighton was eligible for SSA disability
payments of $1,855.00 per month. Under 42 U.S.C. § 424(a), however, these SSA
payments were required to be offset by the OWCP schedule award, and were thus
reduced to $175.00 per month.
When OPM began paying Leighton his FERS disability annuity, it reduced the
amount of the annuity by the full amount of his SSA disability benefit, before the SSA
benefit was reduced based on Leighton’s receipt of OWCP payments. Leighton
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contacted OPM, challenging its methodology for calculating his disability retirement
benefits. In an initial decision, dated June 6, 2007, OPM denied Leighton’s request to
have his annuity recalculated. Leighton sought reconsideration, but in a final decision,
dated June 28, 2007, OPM again rejected his request for recalculation of his disability
retirement annuity.
Leighton then appealed to the board, arguing that his FERS annuity should have
been reduced by the amount of SSA benefits he actually received, rather than the gross
SSA benefits to which he was entitled before deductions for OWCP compensation. In
an initial decision, the administrative judge rejected Leighton’s argument, concluding
that the plain language of 5 U.S.C. § 8452(a)(2)(B) requires that the reduction in the
FERS disability annuity be calculated based upon the full amount of SSA benefits, prior
to reductions for OWCP compensation. On January 24, 2008, the full board denied
Leighton’s petition for review, making the administrative judge’s initial decision the final
decision of the board. Leighton then timely appealed to this court. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(9).
DISCUSSION
We conclude that the board correctly affirmed OPM’s decision to calculate
Leighton’s FERS disability retirement annuity based upon the SSA benefits to which he
was entitled before any adjustments for OWCP compensation. OPM’s methodology for
calculating FERS disability annuity payments is based upon a reasonable interpretation
of the language of the relevant statutes and serves to avoid payment of duplicate
benefits.
2008-3144 3
The computation of a FERS disability annuity is governed by 5 U.S.C. § 8452,
which, in relevant part, provides:
(2)(A) For any month in which an annuitant is entitled both to an annuity
under this subchapter as computed under paragraph (1) and to a disability
insurance benefit under section 223 of the Social Security Act, the
annuitant's annuity for such month (as so computed) shall—
....
(ii) if such month occurs other than during a period referred to in
paragraph (1)(A)(i), be reduced by 60 percent of the annuitant's assumed
disability insurance benefit for such month;
....
(a)(2)(B)(i) For purposes of this paragraph, the assumed disability
insurance benefit of an annuitant for any month shall be equal to--
(I) the amount of the disability insurance benefit to which the annuitant is
entitled under section 223 of the Social Security Act for the month in which
the annuity under this subchapter commences, or is restored, or, if no
entitlement to such disability insurance benefits exists for such month, the
first month thereafter for which the annuitant is entitled both to an annuity
under this subchapter and disability insurance benefits under section 223
of the Social Security Act . . . .
(Emphasis added).
Thus, by its express terms 5 U.S.C. § 8452 requires that the FERS disability
annuity be reduced by “60 percent of the annuitant’s assumed disability insurance
benefit” after the first year in which the annuitant is entitled to both a FERS disability
annuity and an SSA disability insurance benefit. The assumed SSA “disability benefit”
is defined as “the amount of the disability insurance benefit to which the annuitant is
entitled under section 223 of the Social Security Act.” 1 5 U.S.C. § 8452(a)(2)(B)(i)(I).
Under section 223 of the Social Security Act, Leighton is entitled to an SSA disability
benefit of $1,855.00 per month. Thus, under the plain language of the statute, OPM
1
Section 223 of the Social Security Act is codified at 42 U.S.C. § 423.
2008-3144 4
correctly used $1,855.00 as the amount of Leighton’s SSA benefit for purposes of
computing Leighton’s FERS disability retirement annuity.
Leighton argues, however, that his FERS disability annuity should be reduced by
the amount he is entitled to under section 223 of the Social Security Act, only after that
amount has been reduced by the deductions required under section 224 of the Act.
Section 224 provides for a reduction in SSA benefits if an annuitant also receives
OWCP payments. 2 Thus, although Leighton is entitled to $1,885.00 per month under
section 223, his actual payment is reduced to $175 because section 224 offsets OWCP
payments against SSA benefits.
2
Section 224 of the Social Security Act is codified at 42 U.S.C.
§ 424a. In relevant part, it provides:
If for any month prior to the month in which an individual attains the age of
65—
(1) such individual is entitled to benefits under [section 223 of the Social
Security Act, 42 U.S.C. § 423], and
(2) such individual is entitled for such month to—
(A) periodic benefits on account of his or her total or partial disability
(whether or not permanent) under a workmen's compensation law or plan
of the United States or a State, or
(B) periodic benefits on account of his or her total or partial disability
(whether or not permanent) under any other law or plan of the United
States . . . other than . . . (iv) benefits under a law or plan of the United
States based on service all or substantially all of which is employment as
defined in [42 U.S.C. § 410],
the total of his benefits under section 223 for such month . . . shall be
reduced (but not below zero) by [the formula specified in paragraphs
(a)(3)-(8)].
2008-3144 5
As the board correctly noted, the statute used to compute FERS disability
annuities refers to SSA payments as computed under section 223 of the Social Security
Act, not under section 224. See 5 U.S.C. § 8452(a)(2). OPM, therefore, reasonably
calculated the amount to be deducted from Leighton’s FERS disability annuity based
upon section 223, without considering the deductions required under section 224. Had
Congress wanted OPM to take section 224 adjustments into account when calculating
FERS disability retirement annuities, it could have stated so explicitly. See United
States v. Missouri Pac. R.R., 278 U.S. 269, 278 (1929) (“[W]here the language of an
enactment is clear and construction according to its terms does not lead to absurd or
impracticable consequences, the words employed are to be taken as the final
expression of the meaning intended.”).
Leighton’s argument on appeal is centered on the meaning of the word “entitled”
as used in section 223. While Leighton acknowledges that his FERS annuity must be
reduced by the amount of SSA payments to which he is entitled, he argues that he is
only “entitled” to $175 per month in SSA benefits because that is the amount of monthly
SSA benefits he actually receives.
Leighton’s argument is not frivolous. He is understandably chagrined that he is
deemed “entitled” to SSA payments that he does not, in fact, receive. This somewhat
anomalous result stems from the complex interplay between the FERS, SSA and
OWCP programs. OPM has reasonably interpreted the plain language of 5 U.S.C.
§ 8452 to require it to reduce Leighton’s FERS disability annuity payments by the full
amount of social security benefits to which he is entitled under section 223 of the Social
Security Act. Then, under section 224 of the Act, the SSA reduces Leighton’s SSA
2008-3144 6
benefits to account for the OWCP benefits that Leighton receives. See 42 U.S.C.
§ 424a.
OPM’s interpretation of the FERS disability annuity provision is in accord with the
plain intent of section 224, which is designed to prevent claimants from receiving
duplicate OWCP and SSA disability payments. See, e.g., Olson v. Apfel, 170 F.3d 820,
822 (8th Cir. 1999) (“The offset statute reflects Congress’s concern that recovery of
overlapping worker's compensation and social security disability benefits decreases an
injured worker's incentive to seek rehabilitation and further employment.”). Using
Leighton’s proposed interpretation, the requirement, under section 224, that OWCP
benefits be offset in part against social security benefits provided under section 223
would be effectively nullified. Under Leighton’s approach, although section 224 requires
an offset for OWCP benefits, this OWCP offset would be “restored” when the FERS
annuity was increased to reflect the reduced SSA benefits. 3
3
In its brief, the government provides a useful example of how Leighton’s
proposed approach would nullify the section 424a OWCP offset provisions:
For example, assume, first, a FERS disability annuitant was
entitled to $100 per month in SSA disability benefits, but this
amount was reduced to $10 per month, due to the concurrent
receipt of an OWCP scheduled award. Further assume that the
annuitant is entitled to a FERS annuity of $200. During the first
year of eligibility for FERS disability annuity benefits, his FERS
annuity would be reduced by $100. Thus, the annuitant would
collect a $100 FERS annuity, plus a $10 SSA disability benefit.
The annuitant’s SSA disability benefit still would be offset by $90
due to his OWCP benefit.
Pursuant to Mr. Leighton’s interpretation, the annuitant’s
FERS benefits would only be reduced by $10. The FERS annuitant
would still collect $10 from the SSA, but would regain through his
FERS annuity the entire $90 reduction in his SSA disability benefit.
Thus, under Mr. Leighton’s interpretation, the annuitant would
2008-3144 7
More than a decade ago, the board fully considered the issue presented here.
Johnston v. Office of Pers. Mgmt., 70 M.S.P.R. 109 (M.S.P.B. 1996), aff’d No. 96-3231,
1996 U.S. App. LEXIS 27395 (Fed. Cir. Oct. 22, 1996). The board concluded that the
plain language of 5 U.S.C. § 8452(a)(2)—and the legislative history surrounding its
enactment—support a reduction in the FERS disability annuity based on the SSA
disability benefit as determined under section 223 of the Social Security Act. Id. at 113-
14 (The “scant” legislative comments regarding the application of FERS disability
retirement annuity benefits to SSA benefits “tend to indicate that Congress desired to
reduce the FERS disability annuity by the full amount of the social security disability
insurance benefit to which the appellant is entitled, as computed by the SSA under 42
U.S.C. § 423.”). This SSA disability benefit must be determined before the SSA applies
any offsets for OWCP compensation in order “to avoid any duplicate payments.” Id. at
117. The board explained:
[T]he plain language of the statute requires a 100% reduction based upon
the full social security disability insurance entitlement. The Social Security
component is the largest component of FERS. It appears reasonable that
any deductions required would be from the primary component and would
be by the SSA from the full amount of the social security disability
insurance benefit. The FERS disability annuity is offset by the unreduced
social security disability insurance amount to avoid any duplicate
payments.
Id.Leighton seeks to distinguish Johnston by arguing that the SSA reduced
Johnston’s SSA disability benefit based on her receipt of OWCP compensation for wage
receive the OWCP benefit, as well as $200. Under [the
government’s] interpretation, the annuitant would properly receive
the OWCP benefit and $110, which gives meaning to [the] $90
offset required by the Social Security regulations.
2008-3144 8
loss, while his disability benefit was reduced because of an OWCP schedule award.
There is, however, nothing in the FERS disability annuity statute which would warrant
treating OWCP wage loss and schedule awards differently for purposes of computing
the SSA benefits which must be deducted from the FERS disability annuity. See 5
U.S.C. § 8452(a)(2).
OPM’s interpretation of the FERS disability annuity statute, 5 U.S.C. § 8452, is
reasonable because it comports with the plain language of the statute and serves to
avoid payment of duplicate benefits. Accordingly, the board’s decision sustaining
OPM’s determination to calculate Leighton’s FERS disability annuity payments based
upon the full amount of SSA benefits to which he was entitled under 42 U.S.C. § 423 is
correct.
AFFIRMED
2008-3144 9