Jennifer Clouse v. Office of Personnel Management ( 2023 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
JENNIFER W. CLOUSE, DOCKET NUMBER
Appellant, PH-0841-20-0146-I-2
v.
OFFICE OF PERSONNEL DATE: February 21, 2023
MANAGEMENT,
Agency,
and
GRACIELA CLOUSE,
Intervenor.
THIS FINAL ORDER IS NONPRECEDENTIAL 1
Charles P. Lamasa, Esquire, Baltimore, Maryland, for the appellant.
Jane Bancroft, Washington, D.C., for the agency.
BEFORE
Cathy A. Harris, Vice Chairman
Raymond A. Limon, Member
Tristan L. Leavitt, Member
1
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
FINAL ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed the final decision of the Office of Personnel Management (OPM) . For
the reasons discussed below, we GRANT the appellant’s petition for review and
VACATE the initial decision. We ORDER OPM to cancel its final decision
establishing a 46-month repayment schedule and to pay the appellant the
remaining benefits she is owed of the $18,789.60 underpayment that accrued
between July 1, 2016, and July 30, 2019.
BACKGROUND
¶2 The facts in this case are not disputed. On May 8, 2001, the appellant, a
former Federal employee, and her husband divorced. Clouse v. Office of
Personnel Management, MSPB Docket No. PH-0841-20-0146-I-1, Initial Appeal
File (IAF), Tab 9 at 14-17. On June 30, 2016, the appellant retired under the
Federal Employee Retirement System (FERS). 2 Id. at 18, 25. As a condition of
the divorce, the parties stipulated that “the parties’ Federal Employee Retirement
Pensions” would be split in half for all months of creditable ser vice during their
marriage. Id. at 15. By court order, the Circuit Court for Baltimore County,
Maryland directed OPM “to pay Former Spouse’s share directly to Former
Spouse.” Id. at 10 (capitalization in original).
¶3 However, OPM initially miscalculated the annuity payments to the
appellant’s former spouse, resulting in an overpayment to the former spouse and
an underpayment to the appellant. IAF, Tab 1 at 8-9. On or about May 2016, the
appellant notified OPM of the error, and OPM ultimately agreed to take action in
2019. IAF, Tab 1 at 8, Tab 9 at 7. On January 1, 2020, OPM issued a final
2
In the initial decision, the administrative judge appears to erroneously identify the
appellant’s retirement date as May 30, 2015, and refers to the Civil Service Retirement
System (CSRS) statutes and regulations as though the appellant were a CSRS annuitant.
IAF, Tab 27, Initial Decision at 2, 5, 9 & n.3. However, the appellant is a FERS
annuitant. IAF, Tab 9 at 10, 18, 25.
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decision stating that the appellant had “been underpaid $18,789.60 from July 1,
2016 to July 30, 2019” and that the appellant “will receive this amount, in 98
monthly installments of $190.00 with a final installment of $169.60.” IAF, Tab 1
at 9-10. OPM reasoned that it would refund the underpayment according to the
same schedule it used to collect its corresponding overpayment to the appellant’s
former spouse. Clouse v. Office of Personnel Management, MSPB Docket No.
PH-0841-20-0146-I-2, Appeal File (I-2 AF), Tab 24 at 4.
¶4 The appellant filed a Board appeal challenging OPM’s January 1, 2020
decision. IAF, Tab 1 at 5, 9-10. On May 8, 2021, while the appeal was pending
before the administrative judge, OPM issued an amended award letter notifying
the appellant that her “former spouse ha[d] agreed to increase [the appellant’s]
monthly reimbursement payments” and that she “will receive the remaining
balance of $14,539.60 in 45 monthly installments of $320.00 with a final
installment of $139.60.” I-2 AF, Tab 16 at 4-5.
¶5 After holding the appellant’s requested hearing, the administrative judge
issued an initial decision affirming OPM’s final decision to pay the appellant the
underpayment in 45 monthly installments and one final installment. IAF, Tab 1
at 2; I-2 AF, Tab 20, Tab 27, Initial Decision (ID) at 2, 10. In so finding, the
administrative judge declined to frame the issue as one of harmful error by OPM.
ID at 7. Instead, he found, in essence, that the Board lacks jurisdiction over the
repayment schedule because “there is no OPM rule or regulation which would
authorize OPM to pay the appellant the money she is owed in a single lump -sum
payment.” ID at 9. The administrative judge also found premature the
appellant’s argument that OPM may not refund her in full if the appellant’s
former spouse were to pass away before all the payments were made. ID at 9-10.
He suggested that if that eventually occurs, the Board might then have
jurisdiction over OPM’s refusal to pay any remaining amount due. ID at 10.
¶6 The appellant has filed a petition for review of the initial decision. Clouse
v. Office of Personnel Management, MSPB Docket No. PH-0841-20-0146-I-2,
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Petition for Review (PFR) File, Tab 1. She argues that the Board has jurisdiction
over all of the claims raised in her appeal regardless of the lack of any specific
OPM rule or regulation on underpayments because it involves OPM’s
implementation of a court order affecting her rights and interests under Federal
retirement laws. Id. at 5-7, 9-10. She asserts that because the Board has
jurisdiction over her appeal, it also has jurisdiction to rule on her affirmative
defense of harmful error. Id. at 7-9. Lastly, she argues that the administrative
judge erred in finding that the appellant’s claim that her former spouse may die
before she is fully reimbursed was premature and that waiting to adjudicate that
issue is not in the interest of justice. Id. at 11-12. The agency has submitted a
nonsubstantive response to the petition for review. PFR File, Tab 4.
DISCUSSION OF ARGUMENTS ON REVIEW
¶7 The parties here do not dispute the existence or the amount of the
appellant’s underpayment. IAF, Tab 1 at 8; I-2 AF, Tab 24 at 5. OPM also
concedes that the court order ordering apportionment of the appellant’s retirement
annuity between her and her former spouse was clear, specific, and acceptable for
processing and, therefore, OPM was responsible for implementing it, pursuant to
5 C.F.R. § 838.121. I-2 AF, Tab 24 at 5. Thus, the central issue in this appeal is
whether the Board has the authority to order OPM to adjust its payment schedule.
PFR File, Tab 1 at 5-6, 12. We find that it does.
The administrative judge erred in determining that the Board does not have
jurisdiction over the appellant’s possible entitlement to an adjustment of the
repayment schedule.
¶8 On review, the appellant challenges the administrative judge’s finding that
the Board lacks jurisdiction over the appellant’s repayment schedule. ID at 7 -9;
PFR File. Tab 1 at 5-7. The administrative judge below found that OPM’s
statutes and regulations do not provide a payment scheme for the payment of
arrearages owed to the appellant, nor specifically allow a lump sum payment of
the amount she is owed. ID at 9 & n.3. He explained that although OPM has
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regulations concerning debts owed to the Civil Service Retirement and Disability
Fund, no such regulations exist regarding underpayments owed to retirees or
annuitants from the Fund; therefore, the Board lacks jurisdiction to order OPM to
alter its current payment schedule. Id. We know of no statutory or regulatory
provision specifically addressing the authority of the Board to review an
adjustment of a repayment schedule based on a debt OPM owes to the annuitant.
Nevertheless, we disagree with the administrative judge and find that the Board
has jurisdiction over this appeal pursuant to 5 U.S.C. § 8461(e)(1).
¶9 Under 5 U.S.C. § 8461(e)(1), the Board has jurisdiction to review “an
administrative action or order affecting the rights or interests of an individual”
under FERS. 3 Eller v. Office of Personnel Management, 121 M.S.P.R. 551, ¶ 8
(2014). OPM is statutorily mandated to take such administrative actions, and
“shall pay all [FERS] benefits” from the Civil Service Retirement and Disability
Fund. 5 U.S.C. §§ 8401(6), 8461(a)-(d). Prior to retirement, FERS-covered
employees contribute to the Fund through salary deductions. 5 C.F.R.
§ 841.504(b), (h). OPM’s duties include paying the basic annuity of an eligible
retiree. 5 U.S.C. §§ 8412, 8461(a). OPM is also required to pay benefits to a
former spouse of an annuitant pursuant to a qualifying c ourt order incident to a
divorce decree. 5 U.S.C. § 8467(a)(1).
¶10 There is no dispute that the appellant was entitled to a basic FERS annuity
beginning July 1, 2016. IAF, Tab 9 at 18-21, 25. Here, OPM’s underpayment to
3
We find that the administrative judge’s reliance on the CSRS statutes and regulations,
as opposed to FERS, in analyzing the appellant’s disability retirement appeal does not
affect the outcome of the appeal, as the statutes, regulations, and case law generally are
parallel. Compare 5 U.S.C. § 8347(d) (containing the statutory provision regarding
Board jurisdiction over CSRS appeals), with 5 U.S.C. § 8461(e) (containing the similar
FERS provision); see James v. Office of Personnel Management, 72 M.S.P.R. 211, 216
n.3 (1996) (observing that the Board may rely on case law developed under the CSRS in
deciding FERS overpayment appeals because the relevant regulations generally are
parallel); Panter v. Department of the Air Force, 22 M.S.P.R. 281, 282 (1984) (finding
that an adjudicatory error that is not prejudicial to a party’s substantive rights provides
no basis for reversal of an initial decision).
6
the appellant and overpayment to her former spouse resulted from OPM’s error in
calculating the apportionment of the appellant’s retirement annuity pursuant to a
court order that was incident to their divorce decree. IAF, Tab 1 at 9-10, Tab 9
at 15. Thus, OPM’s action affected the appellant’s rights and interests under
FERS and is subject to the Board’s jurisdiction. See Miller v. Office of Personnel
Management, 99 M.S.P.R. 104, ¶¶ 8-12 (2005) (finding that a FERS annuity
overpayment that resulted, not from anything related to the computation of
an appellant’s retirement annuity, but rather from a change in her life insurance
coverage, was not an administrative action that could be appealed to the Board
under 5 U.S.C. § 8361(e)(1)), aff’d, 449 F.3d 1374 (Fed. Cir. 2006).
¶11 Moreover, the Board has held that, if an appellant is continuing to receive
CSRS or FERS annuity benefits, a reduction in that annuity to recover an
overpayment would also affect her rights and interests under the CSRS or FERS,
and the adjustment of the repayment schedule would be within the Board’ s
jurisdiction. 5 U.S.C. §§ 8347(d)(1), 8461(e)(1); see Martin v. Office of
Personnel Management, 119 M.S.P.R. 188, ¶ 9 n.4 (2013); Alexander v. Office of
Personnel Management, 114 M.S.P.R. 122, ¶¶ 9-12 (2010) (explaining that under
5 U.S.C. § 8347(d)(1), regarding the Board’s jurisdiction over CSRS matters, the
Board lacks authority to adjust a repayment schedule in the absence of a CSRS
annuity or other administrative payment); 4 5 C.F.R. § 845.206 (providing that
administrative offset may be made from lump sum or annuity payments , payments
made to the debtor by another agency, or Federal salary). Here, the appellant is
currently receiving an annuity from OPM and seeks to adjust OPM’s 46-month
payment schedule for annuity payments owed her to one lump sum payment. PFR
File, Tab 1 at 12. Therefore, her challenge to OPM’s payment schedule affecting
her annuity is within the Board’s jurisdiction.
4
Because the “rights or interests” language of 5 U.S.C. § 8347(d)(1), under CSRS, is
identical to the language in 5 U.S.C. § 8461(e)(1), under FERS, we find the reasoning
in Alexander is applicable to cases arising under FERS.
7
OPM’s final decision must be canceled, and the appellant must be restored to the
status quo ante.
¶12 OPM has conceded that the appellant was underpaid $18,789.60 in annuity
benefits to which she is entitled. IAF, Tab 1 at 9-10. Therefore, because we have
found that we have jurisdiction over the appeal and OPM has conceded its
liability, we order OPM to cancel its final decision and return the appellant to
status quo ante.
¶13 The Board’s enforcement authority includes the power to r estore an
appellant, as nearly as possible, to the status quo ante. Kerr v. National
Endowment for the Arts, 726 F.2d 730, 733 (Fed. Cir. 1984). In Kerr the U.S.
Court of Appeals for the Federal Circuit explained that “the Supreme Court long
ago stated that,” “the general rule is, that when a wrong has been done, and the
law gives a remedy, the compensation shall be equal to the injury . . . . The
injured party is to be placed, as near as may be, in the situation [she] would have
occupied if the wrong had not been committed.” Id. at 733 n.3 (quoting Wicker v.
Hoppock, 73 U.S. 94, 99 (1867)). Therefore, when the Board orders OPM’s final
decision canceled, as we do here, complete rescission of the action and a return to
status quo ante requires OPM to refund money that had previously been withheld
to the appellant if she has an interest in it under FERS . See Campbell v. Office of
Personnel Management, 123 M.S.P.R. 240, ¶¶ 2-4, 10-11 (2016) (finding that a
retirement appeal was not moot when OPM claimed that it rescinded its final
decision but failed to pay to the deceased annuitant’s beneficiaries the amount it
had previously withheld from the decedent). Thus, we order OPM to pay the
appellant the remaining benefits she is owed from the original $18,789.60
underpayment from July 1, 2016, to July 30, 2019. 5
5
Because we are ordering OPM to cancel its final decision and pay the appellant the
remaining benefits she is owed, we need not reach her remaining arguments on review
regarding OPM exercising its statutory power to enact regulations regarding repayment
of debts it owes to annuitants and alleged harmful error. We also find it unnecessary to
8
ORDER
¶14 We ORDER OPM to cancel its final decision establishing a 4 6-month
repayment schedule and pay the appellant the remaining benefits she is owed
from the $18,789.60 underpayment from July 1, 2016, to July 30, 2019. OPM
must complete this action no later than 20 days after the date of this decision.
¶15 We further ORDER OPM to tell the appellant promptly in writing when it
believes it has fully carried out the Board’s Order and of the actions it has taken
to carry out the Board’s Order. We ORDER the appellant to provide all necessary
information OPM requests to help it carry out the Board’s Order. The appellant,
if not notified, should ask the agency about its progress. See 5 C.F.R.
§ 1201.181(b).
¶16 No later than 30 days after the agency tells the appellant that it has fully
carried out the Board’s Order, the appellant may file a petition for enforcement
with the office that issued the initial decision on this appeal if the appellant
believes that OPM did not fully carry out the Board’s Order. The petition should
contain specific reasons why the appellant believes that OPM has not fully carried
out the Board’s Order, and should include the dates and results of any
communications with OPM. 5 C.F.R. § 1201.182(a).
¶17 This is the final decision of the Merit Systems Protection Board in this
appeal. 5 C.F.R. § 1201.113(c).
NOTICE TO THE APPELLANT
REGARDING YOUR RIGHT TO REQUEST
ATTORNEY FEES AND COSTS
You may be entitled to be paid by the agency for your reasonable attorney
fees and costs. To be paid, you must meet the requirements set out at Title 5 of
the United States Code (U.S.C.), sections 7701(g), 1221(g), 1214(g) or 3330c(b);
or 38 U.S.C. § 4324(c)(4). The regulations may be found at 5 C.F.R.
address the appellant’s argument that the administrative judge erred in finding that
issues tied to the future death of her former spouse were premature.
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§§ 1201.201, 1202.202, and 1201.203. If you believe you meet these
requirements, you must file a motion for attorney fees WITHIN 60 CALENDAR
DAYS OF THE DATE OF THIS DECISION. You must file your attorney fees
motion with the office that issued the initial decision on your appeal.
NOTICE OF APPEAL RIGHTS 6
You may obtain review of this final decision. 5 U.S.C. § 7703(a)(1). By
statute, the nature of your claims determines the time limit for seeking such
review and the appropriate forum with which to file. 5 U.S.C. § 7703(b).
Although we offer the following summary of available appeal rights, the Merit
Systems Protection Board does not provide legal advice on which option is most
appropriate for your situation and the rights described below do not represent a
statement of how courts will rule regarding which cases fall within their
jurisdiction. If you wish to seek review of this final decision, you should
immediately review the law applicable to your claims and car efully follow all
filing time limits and requirements. Failure to file within the applicable time
limit may result in the dismissal of your case by your chosen forum.
Please read carefully each of the three main possible choices of review
below to decide which one applies to your particular case. If you have questions
about whether a particular forum is the appropriate one to review your case, you
should contact that forum for more information.
(1) Judicial review in general. As a general rule, an appellant seeking
judicial review of a final Board order must file a petition for review with the U.S.
Court of Appeals for the Federal Circuit, which must be received by the court
within 60 calendar days of the date of issuance of this decision. 5 U.S.C.
§ 7703(b)(1)(A).
6
Since the issuance of the initial decision in this matter, the Board may have updated
the notice of review rights included in final decisions. As indicated in the noti ce, the
Board cannot advise which option is most appropriate in any matter.
10
If you submit a petition for review to the U.S. Court of Appeals for the
Federal Circuit, you must submit your petition to the court at the
following address:
U.S. Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, D.C. 20439
Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
(2) Judicial or EEOC review of cases involving a claim of
discrimination. This option applies to you only if you have claimed that you
were affected by an action that is appealable to the Board and that such action
was based, in whole or in part, on unlawful discrimination. If so, you may obtain
judicial review of this decision—including a disposition of your discrimination
claims—by filing a civil action with an appropriate U.S. district court (not the
U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you
receive this decision. 5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems
Protection Board, 582 U.S. ____ , 137 S. Ct. 1975 (2017). If you have a
representative in this case, and your representative receives this decision before
you do, then you must file with the district court no later than 30 calendar days
after your representative receives this decision. If the action involves a claim of
11
discrimination based on race, color, religion, sex, national origin, or a disabling
condition, you may be entitled to representation by a court-appointed lawyer and
to waiver of any requirement of prepayment of fees, costs, or other security. See
42 U.S.C. § 2000e-5(f) and 29 U.S.C. § 794a.
Contact information for U.S. district courts can be found at their respective
websites, which can be accessed through the link below:
http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
Alternatively, you may request review by the Equal Employment
Opportunity Commission (EEOC) of your discrimination claims only, excluding
all other issues. 5 U.S.C. § 7702(b)(1). You must file any such request with the
EEOC’s Office of Federal Operations within 30 calendar days after you receive
this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the EEOC no later than 30 calendar days after your representative receives
this decision.
If you submit a request for review to the EEOC by regular U.S. mail, the
address of the EEOC is:
Office of Federal Operations
Equal Employment Opportunity Commission
P.O. Box 77960
Washington, D.C. 20013
If you submit a request for review to the EEOC via commercial delivery or
by a method requiring a signature, it must be addressed to:
Office of Federal Operations
Equal Employment Opportunity Commission
131 M Street, N.E.
Suite 5SW12G
Washington, D.C. 20507
(3) Judicial review pursuant to the Whistleblower Protection
Enhancement Act of 2012. This option applies to you only if you have raised
claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or
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other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D).
If so, and your judicial petition for review “raises no challenge to the Board’s
disposition of allegations of a prohibited personnel practice described in section
2302(b) other than practices described in section 2302(b)(8 ), or 2302(b)(9)(A)(i),
(B), (C), or (D),” then you may file a petition for judicial review either with the
U.S. Court of Appeals for the Federal Circuit or any court of appeals of
competent jurisdiction. 7 The court of appeals must receive your petition for
review within 60 days of the date of issuance of this decision. 5 U.S.C.
§ 7703(b)(1)(B).
If you submit a petition for judicial review to the U.S. Court of Appeals for
the Federal Circuit, you must submit your petition to the court at the
following address:
U.S. Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, D.C. 20439
Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
7
The original statutory provision that provided for judicial review of certain
whistleblower claims by any court of appeals of competent jurisdiction expired on
December 27, 2017. The All Circuit Review Act, signed into law by the President on
July 7, 2018, permanently allows appellants to file petitions for judicial review of
MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals
for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.
The All Circuit Review Act is retroactive to November 26, 2017. Pub. L. No. 115-195,
132 Stat. 1510.
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http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before th e Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
Contact information for the courts of appeals can be found at their
respective websites, which can be accessed through the link below:
http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
FOR THE BOARD: /s/ for
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.