Wolfing v. United States ( 2022 )

CORRECTED ON 12.6.2022
In the United States Court of Federal Claims
FOR PUBLICATION
Nos. 18-523C & 21-1825C
(Filed: December 2, 2022)
)
BRADLEY T. WOLFING, et al., )
)
Plaintiffs, )
) Military Pay: Housing Allowances
RICHARD G. GULLEY, et al., ) under 37 U.S.C. § 403; Travel
) and Transportation Allowances
Consolidated Plaintiffs, ) under 37 U.S.C. § 474 (repealed
v. ) and recodified at 37 U.S.C. § 452)
)
UNITED STATES, )
)
Defendant. )
)
Patrick J. Hughes, Patriots Law Group of Lyons & Hughes, P.C., Suitland, MD,
for plaintiffs. Michael E. Lyons, Patriots Law Group of Lyons & Hughes, P.C.,
Suitland, MD, Of Counsel.
Douglas G. Edelschick, Senior Trial Counsel, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice, Washington, DC, for defendant,
with whom on the briefs were Brian M. Boynton, Assistant Attorney General,
and Patricia M. McCarthy, Director, Douglas K. Mickle, Assistant Director, and
Kyle S. Beckrich, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, Washington, DC. Major Alane E. Ballweg and
Christopher C. Cox, Litigation Attorneys, U.S. Army Legal Service Agency,
Fort Belvoir, VA, Of Counsel.
OPINION AND ORDER
BONILLA, Judge.
The origins of the United States Army Reserve (USAR) date back over
100 years to the passage of the 1920 amendments to the National Defense Act of
1916. See Pub. L. No. 66-242, 41 Stat. 759 (1920). Today, nearly 190,000 soldiers
serve in the USAR, residing in all 50 states and five United States territories and
deployed to 23 countries around the world. Despite providing “nearly half of the
Army’s maneuver support and a quarter of its force mobilization capacity,” the
USAR accounts for “only 6% of the total Army budget.” 1 This military pay case
addresses the statutory and regulatory issues governing the claimed entitlement
to dual housing allowances by members of the USAR during periods of mobilization
and deployment.
BACKGROUND 2
Plaintiffs are current, retired, and former members of the USAR and the
Army National Guard (ARNG) residing in various states throughout the continental
United States. 3 At some point relevant hereto, each plaintiff was called to active
duty and deployed overseas in support of contingency operations (CONOPS) and/or
for Active Duty Operational Support (ADOS) for periods exceeding 30 days.
Plaintiffs’ overseas primary duty stations (PDS) were not located near the domestic
primary residences from which they were activated. Critical to the legal issues
presented, plaintiffs’ mobilization and deployment orders did not provide for
military quarters at or near their overseas PDS, requiring plaintiffs to secure their
1 See https://www.usar.army.mil/About-Us/ (last visited Nov. 28, 2022).
2 Due to the initial voluntary remand request by the government ultimately lasting two years
(from August 2019 to August 2021), the parties’ subsequent joint request for a continued stay, and
the government’s current request for a second voluntary remand, discussed infra, this consolidated
case remains in the early stages of litigation. Indeed, the record presented is limited to: the
complaints filed in each of the now-consolidated cases; plaintiffs’ proposed amended complaint;
the remand decisions of the Army Board for Correction of Military Records (ABCMR or Board)
limited to the original Wolfing plaintiffs; and various documents attached to the parties’ briefs
addressing a series of procedural motions, defendant’s motion to dismiss, and the supplemental
briefing requested by the Court. The facts stated herein are derived from the filings to date.
3 The initial 11 plaintiffs in this consolidated case include (by rank and alphabetically): Colonel
Richard G. Gulley (USAR-retired); Colonel Bradley T. Wolfing (USAR-retired); Lieutenant Colonel
Sean Connelly (USAR); Major James B. Copas (USAR); Major Erika Erickson (USAR); Major Ryan
P. Mirabal (USAR); Major Louis T. Morelli (USAR); Major William C. Schneck (USAR); Major
Jennifer Walters (USAR); Captain Alexander R. Gardiner (USAR); and Captain Timothy J.
Kibodeaux (USAR). During oral argument conducted on November 30, 2022, by consent, the
Court sanctioned the joinder of 22 additional plaintiffs named in the second amended complaint:
Lieutenant Colonel Oscar Quintero (ARNG); Lieutenant Colonel William Wahlfeld (USAR); Major
Parker Chapman (USAR); Major Anthony Hirsch (USAR-resigned); Major Jonathan Judy (ARNG);
Major Fred Keller (USAR-retired); Major Susan Lindsey (USAR); Major Shane Maher (USAR);
Major Alexis Melendez (USAR); Major Christopher Moskoff (USAR); Major Freddy Munoz (ARNG);
Major Daniel Nichols (USAR); Major Scott Slaugh (USAR); Major Scott Wyly (USAR); Captain
Justin McGinley (USAR); Captain Matthew Silva (USAR); First Lieutenant Joseph Hoffman
(ARNG); Chief Warrant Officer 4 Nicholas Capozzi (USAR-retired); Chief Warrant Officer 3 Timothy
Brooks (USAR); Command Sergeant Major Erich Muehleisen (USAR); Sergeant First Class Carona
Brown (USAR); and Sergeant First Class Danika Woodland (USAR). See ECF 106–107. For clarity,
in summarizing the background of this case, the Court focuses on the experiences of the initial
11 plaintiffs as representative of the growing number of parties to this litigation.
2
own housing; nor did plaintiffs’ CONOPS or ADOS orders authorize the
transportation of household goods from their primary residences to their PDS at
government expense. Mobilization and deployment orders for reservists with
dependents further did not authorize the relocation of the members’ dependents to
the members’ PDS at government expense.
During their periods of deployment, each plaintiff requested two housing
allowances from the Army: a basic allowance for housing (BAH) to maintain their
primary (domestic) residence and an overseas housing allowance (OHA) to subsidize
their PDS off-base housing. Unlike active duty service members, reservists
generally return to their primary residences at the conclusion of their deployments
to resume their civilian lives and part-time military duties. For nine (of the eleven)
plaintiffs, the Army initially approved the requested dual housing allowances and
remitted monthly BAH and OHA payments.
In October 2016, the U.S. Army Garrison Wiesbaden Finance Office
identified approximately 140 USAR and National Guard members suspected of
collecting excessive or unauthorized dual housing allowances and forwarded its
findings to the Army Criminal Investigation Division (Army CID). See ECF 70 at
32–34. 4 Army CID, in turn, initiated criminal investigations of the identified
service members–including six (of the nine) plaintiffs receiving both BAH and
OHA–for alleged housing allowance fraud, theft, and/or larceny. 5 In Major Copas’
case, court-martial proceedings were commenced. At the conclusion of the
investigations, the six plaintiffs under investigation by Army CID received General
Officer Memoranda of Reprimand (GOMOR) from the Commanding General.
All nine plaintiffs receiving BAH and OHA payments were ordered to repay the
Army between $5,500 and $136,000, of which six plaintiffs were subject to wage
garnishments between $5,500 and $30,000, and an overlapping six plaintiffs
forfeited BAH on their primary residences ranging from $12,500 and $30,000. As
for the two plaintiffs who were not initially approved for dual housing allowances,
Major Walters was instructed to elect either BAH or OHA, and Major Erickson
was authorized to receive only BAH.
4 Unless otherwise noted, all ECF citations refer to Wolfing docket entries.
5The six plaintiffs investigated by Army CID were Colonel Gulley, Colonel Wolfing, Major Copas,
Major Mirabal, Captain Gardiner, and Captain Kibodeaux. Colonel Gulley was also the subject of
a U.S. European Command Inspector General (USEUCOM-IG) investigation.
3
After a subset of plaintiffs pursued relief through their respective chains
of command and administrative channels with limited success, 6 on April 9, 2018,
seven plaintiffs commenced this action by filing the Wolfing complaint. 7 Thereafter,
on September 9, 2021, two additional plaintiffs (now four) filed the related Gulley
complaint. 8 In both actions, the named plaintiffs seek to certify classes of similarly
situated USAR members. 9 In the interim, on August 29, 2019, the Court denied
defendant’s motion to dismiss the Wolfing complaint for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1) of the Rules of the United States Court of
Federal Claims (RCFC); concomitantly, the Court granted defendant’s motion for a
voluntary remand to the ABCMR. See Wolfing v. United States, 144 Fed. Cl. 516(2019) (Wolfing I).
On August 10, 2021, the ABCMR issued separate decisions granting
administrative relief to the seven Wolfing plaintiffs. Specifically, the Board found
the USAR members were authorized to receive dual housing allowances and,
consequently, directed that the members’ military records be corrected to reflect
their entitlement to: both BAH (for their primary residences) and OHA (for their
PDS off-base housing during periods of overseas deployment); the refund of any
garnishments; payment of any housing allowances forfeited; expunge of all adverse
information related to the Army’s investigations into the alleged overpayments; and
the convening of special selection boards (SSBs) for any plaintiffs non-selected
for promotion during which time adverse information (now-purged) was included in
their military personnel records. See ECF 52-1 to 52-7. On August 27, 2021, the
6 Colonel Wolfing, for example, was able to retire at his current grade and recoup his entitlement
to BAH for his primary residence; the record is silent on whether the Army sought repayment of
OHA remitted and whether Colonel Wolfing’s GOMOR was formally rescinded. Captain Kibodeaux’s
GOMOR was removed from his permanent military personnel file but not formally rescinded;
nevertheless, Captain Kibodeaux’s alleged OHA debt remained, and his garnishment continued.
The record presented is unclear as to whether any other plaintiffs received administrative relief
prior to filing this action.
7The original Wolfing plaintiffs included Colonel Wolfing, Major Copas, Major Mirabal,
Major Morelli, Major Schneck, Captain Gardiner, and Captain Kibodeaux.
8The original Gulley plaintiffs included Colonel Gulley and Major Walters. By Order dated April 12,
2022, the Court granted plaintiffs’ motion to add Lieutenant Colonel Connelly and Major Erickson.
See ECF 81.
9 Although both complaints were titled “Class Action Complaint,” the motions for class certification
were not contemporaneously filed. Compare Wolfing ECF 1 (complaint filed Apr. 9, 2018) with
Wolfing ECF 70 (motion to certify class filed Jan. 24, 2022); compare Gulley ECF 1 (complaint
filed Aug. 9, 2021) with Gulley ECF 6 (motion to certify class filed Sept. 29, 2021). At the parties’
joint request, briefing on the class certification issue was stayed pending the Court’s resolution
of the overarching statutory and regulatory issues addressed herein. See ECF 92. The Court
thereafter denied the duplicative motion (filed in Gulley) as moot and, again at the parties’ joint
request, continued the stay of the motion for class certification filed in Wolfing pending conclusion
of the remand proceedings directed in this Opinion and Order. See ECF 106.
4
Secretary of the Army formally approved the ABCMR’s recommendations. The
Army then transmitted the Wolfing plaintiffs’ corrected military records to the
Department of Defense, Defense Finance and Accounting Service (DFAS), for
evaluation, processing, and payment of backpay due. 10
On January 27, 2022, DFAS issued a memorandum concluding that, based
upon the factual records presented, none of the Wolfing plaintiffs save Major Morelli
(who had no dependents at any time relevant hereto) were entitled to the contested
secondary housing allowances. DFAS explained that under the governing statute,
37 U.S.C. § 403, all service members entitled to basic pay are entitled to one
housing allowance: either BAH or OHA, depending on the location of their primary
residence (i.e., domestic or overseas). DFAS noted that § 403 provides only the
following two exceptions to the one-housing-allowance limit.
First, § 403(d) permits the payment of a family separation housing allowance
(FSH) to all services members (active duty and reserve component alike) with
dependents who do not accompany the member to their PDS or otherwise reside
near the PDS. Known as FSH-B or FSH-O, depending on whether the deployment
is domestic or overseas, FSH is paid at the same rate as BAH or OHA for the
member’s PDS. Because the corrected military records transmitted to DFAS did not
conclusively document whether the six Wolfing plaintiffs with dependents were
in fact separated from their dependents during all or part of their overseas
deployments, DFAS found that it lacked critical information to determine whether
FSH-O was authorized.
Second, § 403(g) allows reservists without dependents to receive both BAH to
maintain their primary residence and OHA to subsidize their PDS off-base housing
during periods of overseas deployment. As the sole claimant without dependents,
DFAS concluded Major Morelli was entitled to the dual housing allowances
requested. Accordingly, in early 2022, DFAS approved, processed, and remitted
payment to Major Morelli in the aggregate amount of $19,618.71 in back pay.
See ECF 85 at 46.
10 By federal regulation governing the ABCMR:
(i) The ABCMR will furnish DFAS copies of decisions potentially affecting monetary
entitlement or benefits. The DFAS will treat such decisions as claims for payment by
or on behalf of the applicant.
(ii) The DFAS will settle claims on the basis of the corrected military record. The
DFAS will compute the amount due, if any. The DFAS may require applicants to
furnish additional information to establish their status as proper parties to the claim
and to aid in deciding amounts due. . . . The applicant’s acceptance of a settlement
fully satisfies the claim concerned.
32 C.F.R. § 581.3(h)(2)(i)–(ii) (emphasis added).
5
Pending before the Court is defendant’s motion for a second voluntary
remand to the ABCMR to determine: whether the relief awarded Major Morelli
during the initial remand constituted an appropriate exercise of discretion by
the Secretary of the Army; and whether the six Wolfing plaintiffs with dependents
are statutorily permitted to receive FSH-O for some or all of their periods of
overseas deployment (i.e., whether they and their dependents were in fact separated
during the deployment). Concomitantly, defendant seeks to have the ABCMR
assess whether the military records of the four Gulley plaintiffs and the 22 newly
joined plaintiffs–with and without dependents–should be corrected to reflect their
entitlement and award of dual housing allowances: BAH and OHA for service
members without dependents, and BAH and FSH-O for service members with
dependents. 11 In turn, plaintiffs seek to file an amended complaint to assert an
alternative theory of monetary relief for service members with dependents that
were deemed ineligible (in whole or in part) to recover OHA or the equivalent FSH-
O. Plaintiffs proffered alternative theory is based on the Travel and Transportation
Allowances (Per Diem) statute, 37 U.S.C. § 474 (2016) (repealed and recodified at
37 U.S.C. § 452 (2021)), and the implementing United States Department of
Defense (DOD) regulations.
The parties agree a second remand is warranted to address the issues
outlined above. So does the Court. In addressing reservists with dependents’
entitlement to FSH-O, the Secretary of the Army should also consider whether a
dependent residency waiver is appropriate given the general need for reservists
to return to their primary residence following their deployment. The purpose of
this Opinion and Order is to resolve the contested statutory and regulatory issues
governing reservists’ housing allowance entitlements during periods of deployment.
For the reasons set forth herein, plaintiffs’ motion to file an amended complaint
to assert an alternative theory of monetary relief (ECF 96) is GRANTED, and
defendant’s motion to remand this matter to the ABCMR (ECF 72) is GRANTED
with the instructions specified herein.
11 The Gulley plaintiffs with dependents include Colonel Gulley and Lieutenant Colonel Connelly.
Major Erickson and Major Walters did not have dependents at any time relevant hereto. The newly
joined 22 plaintiffs similarly include current and former reservists, presumably with and without
dependents.
6
ANALYSIS
I. Housing Allowance Entitlement
A. Basic Allowance for Housing12
BAH is a military allowance intended to subsidize the cost of domestic
housing for service members (active duty and reserve component alike) who do
not receive government-provided housing. The amount of the monthly stipend
generally depends on where the service member resides, their pay grade, and
whether they have dependents. 13 Title 37, United States Code, Section 403(a)
establishes a “[g]eneral entitlement” for members of the uniformed services to be
paid BAH if they are authorized to receive basic pay. 14 Although there are specified
exemptions and limitations to the housing allowance entitlement, 15 § 403(a) is
a money-mandating statute. Wolfing I, 144 Fed. Cl. at 520 (quoting 37 U.S.C.
§ 403(a)); see Deggins v. United States, 178 F.3d 1308, No. 98-5057, 1998 WL
804563, *3 (Fed. Cir. 2000) (per curiam) (table) (contrasting discretionary nature
of variable housing allowance statute, 37 U.S.C. § 403a (repealed 1998), with
entitlement under BAH statute, id. § 403(a)). OHA is the basic allowance for
housing generally applicable to service members on active duty outside the
United States. Compare 37 U.S.C. § 403(b) with id. § 403(c); see JTR Ch. 10, Part A,
¶ 10002(A) (ECF 85 at 74–75).
Generally, under the BAH/OHA entitlement structure, service members of
the same rank, dependency status, and PDS location receive housing allowances
at the same rate. As detailed infra, however, applicable laws and implementing
regulations augment the general one-housing-allowance limit, reflecting
congressional and secretarial intent to accommodate the diverse circumstances
12Throughout this Opinion and Order, the Court purposely uses “basic allowance for housing”
(spelled out) to refer generally to a military housing allowance without regard to location or rate.
The Court uses the acronym “BAH” to refer specifically to a United States-based housing allowance
as opposed to “OHA,” which refers to the basic allowance for housing typically paid to service
members deployed overseas.
13 See https://militarypay.defense.gov/pay/allowances/bah.aspx (last visited Nov. 28, 2022).
14The basic pay entitlement statutes for active duty service members, reservists, and members of
the National Guard are found at 37 U.S.C. §§ 204 & 206.
15 Statutory exceptions to the BAH general entitlement include instances where: a service member
is assigned adequate government housing, see 37 U.S.C. § 403(e)(1); a service member without
dependents initially deploys “for assignment to a unit conducting field operations,” id. § 403(f)(1);
and a service member below a certain rank without dependents “is assigned to sea duty,” id.
§ 403(f)(2). Like the general entitlement codified at § 403(a), these exceptions are similarly nuanced
and are not absolute.
7
in which the United States’ over two million service members find themselves.
For example, Congress and the Secretary of Defense have devised special housing
allowance rules for reservists and active duty service members whose deployments
prevent them from residing with their dependents. At the same time, Congress and
the Secretary have implemented strict housing allowance eligibility requirements
designed to prevent housing allowance fraud, waste, and abuse. As highlighted
herein, the regulations enacted to meet service members’ nuanced housing needs
do not always align with the rules enacted to prevent housing allowance fraud.
While the rate of a service member’s BAH or OHA entitlement is typically
based on the service member’s PDS location, federal law creates two exceptions
relevant here. First, § 403(d) provides: “If a [service] member [(active duty or
reserve component)] with dependents is assigned to duty in an area that is different
from the area in which the member’s dependents reside,” the service member’s
BAH or OHA rate shall be based “on the area in which the dependents reside or
the member’s last duty station, whichever the Secretary concerned determines to
be most equitable.” 16, 17 37 U.S.C. § 403(d)(3)(A) (emphasis added). Thus, while
the payment of BAH or OHA remains an entitlement, the military Secretaries are
vested with discretion to determine the most appropriate BAH/OHA rate where a
service member and their dependents reside separately due to the member’s active
duty deployment. 18 The Secretary of Defense elected to base the affected service
16Reservists, unlike their active duty counterparts, often do not have a “last duty station” because
they are typically deployed from their primary residence rather than from a duty station. The
Secretary of Defense accordingly determined, for housing allowance purposes, a reservist’s “last duty
station” is their primary residence (i.e., residence from which they were deployed). See ECF 85 at 41.
17Section 403(d)(3) provides the Secretary with similar discretion in situations where the service
member’s new assignment is “under the conditions of a low-cost or no-cost permanent change of
station or permanent change of assignment,” see id. § 403(d)(3)(B), or “for a period of not more than
one year for the purpose of participating in professional military education or training classes,”
see id. at § 403(d)(3)(C).
18 37 U.S.C. § 403 confers some discretionary authority in “the Secretary concerned,” see, e.g., id.§ 403(d)(3)(A), but vests general rulemaking authority under this section in the Secretary of Defense.
See id. § 403(k)(1). In this case, “the Secretary concerned” is the Secretary of the Army. See id.
§ 101(5). However, for the times relevant hereto, the Secretary of the Army deferred “[c]onditions
of entitlements and rates payable” for housing allowances to the Secretary of Defense. See Army
Regulation (AR) 37-104-4, Ch. 12, §§ 12–1 & 13–1 (2005) (superseded by AR 637–1 (July 2021)).
In turn, the Secretary of Defense promulgated the Financial Management Regulations (FMR) and
Joint Federal Travel Regulations (JFTR), which merged with the Joint Travel Regulations (JTR) in
October 2014. See https://www.travel.dod.mil/Policy-Regulations/Joint-Travel-Regulations/Archive/
(last visited Nov. 16, 2022). Since the causes of action in this case began accruing in or about
October 2016, the bulk of the regulations relevant hereto are found in the October 1, 2016 edition of
the JTR. The “Housing Allowances” chapter (Chapter 10) of the October 1, 2016 edition of the JTR
was appended to plaintiffs’ supplemental brief. See ECF 85 at 65–166.
8
members’ BAH or OHA entitlement on the location where the member’s dependents
reside. 19 See, e.g., JTR Ch. 10, Part E, Table 10E-3, Rule 4 (ECF 85 at 122).
The second exception is found in the DOD Joint Travel Regulations, which
provide:
A[ reserve component] member called/ ordered [sic] to active duty
for more than 30 days, except a member without dependents during
initial entry training, is authorized primary residence-based BAH/OHA
beginning on the first active duty day. This rate continues for the
tour duration except as noted . . . .
JTR Ch. 10, Part E, ¶ 10428(E)(1) (ECF 85 at 164) (emphasis added). 20 In turn,
the regulations state that “primary residence” as understood in “Primary Residence
of Reserve Component (RC) Member . . . ordered to active duty” is defined as the
“dwelling . . . where the RC member resides before being ordered to active duty.”
See JTR App. A, Part 1 at A1-37 (ECF 85 at 173). Accordingly, this DOD regulation
provides another means by which a service member’s BAH or OHA rate may be
based on a location other than their PDS.
B. Dual Housing Allowances
Plaintiffs claim entitlement to two housing allowances during their periods
of deployment: BAH for their primary residence (from which they were deployed)
and OHA for their overseas (non-military) housing. To assess plaintiffs’ claims, the
Court proceeds from the longstanding tenet that “[a] soldier’s entitlement to pay is
dependent upon statutory right.” Bell v. United States, 366 U.S. 393, 401 (1961).
The applicable statute in this case generally entitles a service member to one
housing allowance:
19 Even though these members’ statutory housing entitlement is not based on their PDS, they are
generally eligible to also receive a statutorily discretionary PDS-based allowance in the form of the
“family separation basic allowance for housing” (FSH), see 37 U.S.C. § 403(d)(1), discussed infra.
20However, if a reservist called to active duty training (ADT) for at least 140 days is authorized to
transport their household goods from their primary residence to their PDS at government expense,
their housing allowance will be based on the location of their PDS. See JTR Ch. 10, Part E,
¶ 10428(E)(1)(a) (ECF 85 at 164). Likewise, if a reservist called to active duty for something other
than ADT for at least 180 days is authorized to transport their household goods at government
expense, their housing allowance will be based on the location of their PDS. See id. ¶ 10428(E)(1)(c)
(ECF 85 at 164).
9
General entitlement. . . . Except as otherwise provided by law,
a member of a uniformed service who is entitled to basic pay is
entitled to a basic allowance for housing . . . . The amount of
the basic allowance for housing for a member will vary . . . .
The basic allowance for housing may be paid in advance.
37 U.S.C. § 403(a) (bold in original; italics added). Where the statute permits
dual housing allowances the language is clear. See, e.g., id. § 403(d)(4) (“A family
separation basic allowance for housing paid to a member under this subsection is
in addition to any other allowance or per diem that the member receives under this
title. A member may receive a basic allowance for housing under both paragraphs
(1) and (3).” (emphasis added)); id. § 403(g)(2) (“The member may receive both a
basic allowance for housing under paragraph (1) and under this paragraph for the
same month . . . .” (emphasis added)).
Plaintiffs’ claimed dual housing allowance entitlements must be analyzed
under different statutory and regulatory schemes depending on whether or not the
reservist had dependents during the time of their deployment. Plaintiffs without
dependents include Major Erickson, Major Morelli, and Major Walters. Plaintiffs
with dependents include Colonel Gulley, Colonel Wolfing, Lieutenant Colonel
Connelly, Major Copas, Major Mirabal, Major Schneck, Captain Gardiner, and
Captain Kibodeaux.
i. Reservists Without Dependents
As with all service members entitled to basic pay, reservists without
dependents are statutorily entitled to one BAH/OHA. Section 403(g)(1) provides:
A member of a reserve component without dependents who is called
or ordered to active duty to attend accession training, in support of a
contingency operation, or for a period of more than 30 days . . . may not
be denied a basic allowance for housing if, because of that call or order,
the member is unable to continue to occupy . . . [their] primary
residence . . . [if] owned by the member or for which the member
is responsible for rental payments.
37 U.S.C. § 403(g)(1) (emphasis added). The phrase “may not be denied” in
§ 403(g)(1) unequivocally denotes an entitlement. While the governing statute is
silent as to the rate of the housing allowance, the DOD Joint Travel Regulations
specify the entitlement is typically based on the location of the service member’s
primary residence. See JTR Ch. 10, Part E, ¶ 10428(E) (ECF 85 at 164). An
exception applies where the reservist is authorized transportation of household
goods from their primary residence to their PDS at government expense; in that
10
case, PDS rather than primary residence sets the applicable rate. See id.
¶ 10428(E)(1)(a) & (c) (ECF 85 at 164).
Section 403(g) also permits–but does not require–military Secretaries to
remit a second housing allowance to reservists without dependents so long as they
are not authorized transportation of household goods:
The Secretary concerned may provide a basic allowance for housing to
a [reserve component member without dependents] at a monthly rate
equal to the rate of [BAH] or [OHA], whichever applies to the location
at which the member is serving, for members in the same grade at that
location without dependents. The member may receive both a basic
allowance for housing under [§ 403(g)](1) and under this paragraph for
the same month, but may not receive [per diem] for lodging expenses if
a basic allowance for housing is provided under this paragraph.
37 U.S.C. § 403(g)(2) (emphasis added).
Read together, the statutory provisions indicate that a reservist without
dependents (and not authorized transportation of household goods) may receive
dual BAH/OHA: the first (mandatory) housing allowance is based on their primary
residence under § 403(g)(1); and the second (discretionary) housing allowance
is based on their PDS under § 403(g)(2). If a reservist without dependents is
authorized transportation of household goods, they are entitled to (and permitted)
only one housing allowance based on their PDS. See 37 U.S.C. § 403(a), (g)(3); JTR
Ch. 10, Part E, ¶ 10428(E)(1)(a), (c) (ECF 85 at 164). The rationale is presumably
that the movement of all personal belongings to the PDS obviates the need to
maintain a primary residence in the location from which the reservist was deployed.
Further, where, as here, the Secretary of Defense is statutorily vested with
the discretion to convert the discretionary (second) housing allowance into an
entitlement, see 37 U.S.C. § 403(k) (“The Secretary of Defense shall prescribe
regulations for the administration of this section.”), the record must document the
affirmative act establishing the entitlement. The DOD Joint Travel Regulations
do not create a second housing allowance entitlement for otherwise qualified
reservists. To the contrary, the Decision Logic Table for Reserve Component
Members explains: when a reservist is deployed on active duty away from their
primary residence (and not authorized transportation of household goods), they
will receive “primary residence-based BAH/OHA.” See JTR Ch. 10, Part E, ¶ G at
Table 10E-16, Rules 1–2, 5–6 (ECF 85 at 165). The table makes no mention of an
additional housing allowance based on PDS or otherwise. The “primary residence-
based BAH/OHA” to which the table refers is the same allowance reservists without
dependents are entitled to receive under § 403(g)(1).
11
Moreover, “NOTE 5” cited in Rule 5, referenced supra, provides:
A[ reserve component (RC)] member without dependents authorized
[permanent change of station (PCS)] allowances to an OCONUS
location, but not authorized [household goods] transportation, and
Gov’t Qtrs are not available, receives BAH/OHA based on the primary
residence rate, unless the Secretarial Process authorizes/approves the
PDS rate . . . .
JTR Ch. 10, Part E, ¶ G at Table 10E-16 n.5 (ECF 85 at 166). By reserving
the right to authorize or approve a discretionary PDS-based housing allowance
instead of a primary residence-based housing allowance, the implementing
regulation impliedly does not mandate the payment of a PDS-based (or second)
housing allowance. 21
To be clear, the DOD Joint Travel Regulations are consistent with § 403.
As demonstrated by this case, however, the statute and implementing regulations
can generate inequitable results. For example, when called to active duty and
deployed, a reservist not provided PDS government housing and not authorized
transportation of household goods is entitled to only one housing allowance despite
having to maintain two households (i.e., primary residence and PDS housing).
Meanwhile, a reservist provided PDS government housing is entitled to the same
primary residence-based allowance while living rent free at their PDS. Similarly,
a reservist authorized transportation of household goods will receive a PDS-based
housing allowance, which obviates their need to maintain the now-empty primary
residence. In other words, reservists who need to maintain two residences are
entitled to the same or even a lesser housing allowance than similarly situated
reservists who need to maintain only one. 22
21As noted supra, the Secretary of the Army, through the ABCMR, authorized and approved the
payment of both BAH and OHA to Major Morelli. The Court remains agnostic on whether the
discretionary OHA payment was proper and whether Major Erickson and Major Walters should
similarly receive a second housing allowance.
22As noted supra, military Secretaries may authorize a housing allowance based on a reservist’s
PDS rather than the location of their primary residence where a primary residence-based housing
allowance would be inequitable. See JTR Ch. 10, Part E, ¶ 10428(E)(1)(e) (ECF 85 at 164–65). This
may provide some relief, as PDS-based allowances tend to be higher than primary residence-based
housing allowances, particularly if overseas; however, this difference will rarely, if ever, account for
the cost of maintaining two residences rather than one.
12
ii. Reservists With Dependents
1. Dependents Not Residing At or Near PDS
By statute, a service member (active duty or reserve component) with
dependents “assigned to duty in an area that is different from the area in which the
member’s dependents reside . . . is entitled to [BAH or OHA], whichever applies to
the member, . . . based on the area in which the dependents reside or the member’s
last duty station, whichever the Secretary concerned determines to be most
equitable.” See 37 U.S.C. § 403(d)(3)–(d)(3)(A) (referencing 37 U.S.C. § 403(b) & (c)).
As explained supra, a reservist’s “last duty station” refers to the member’s primary
residence from which they were activated. Moreover, as codified in the governing
statute, this basic housing allowance is an “entitle[ment].” See id. § 403(d)(3).
Like § 403(g), § 403(d) also permits–but does not require–military Secretaries
to remit a second housing allowance to active duty service members and reservists
with dependents, subject to the following conditions: dependent relocation is not
authorized at government expense; “the member’s dependents do not reside at or
near the [PDS]”; and the member is not assigned government quarters. 37 U.S.C.
§ 403(d)(1)–(2). Indeed, § 403(d)(4) provides:
A family separation basic allowance for housing paid to a member
under this subsection is in addition to any other allowance or per diem
that the member receives under this title. A member may receive a
basic allowance for housing under both paragraphs (1) [i.e., FSH] and
(3) [i.e., BAH or OHA].
Id. § 403(d)(4) (referencing 37 U.S.C. § 403(d)(4)(1) & (3)) (emphasis added). In
accordance with § 403(d), discussed supra, a qualifying service member necessarily
receives BAH or OHA based on either their dependents’ location or their last duty
station (or primary residence in the case of a reservist). The discretionary FSH,
in turn, is paid at the same rate as BAH/OHA for members without dependents
at the qualifying service member’s PDS. 23 37 U.S.C. § 403(d)(1) (referencing
37 U.S.C. § 403(b) & (c)).
In promulgating the DOD Joint Travel Regulations, the Secretary of Defense
converted the discretionary FSH into an entitlement for qualifying members.
Specifically, the regulations provide:
23Military Secretaries may authorize FSH-B or FSH-O for qualifying members stationed
domestically or overseas, respectively. See JTR Ch. 10, Part A, ¶ 10002(B)(3) (ECF 85 at 75).
13
3. FSH is payable to a member, with dependents, for added housing
expenses resulting from separation from the dependents when a
member is assigned to a/an
a. OCONUS PDS on an unaccompanied/dependent restricted
tour, or
b. PDS in CONUS to which concurrent travel has been denied.
4. General conditions are:
a. Dependent transportation to the PDS is not authorized at
Gov’t expense under 37 USC §[]476;
b. Dependents do not reside in the PDS vicinity; and
c. Gov’t Qtrs are not available for assignment to the member.
JTR Ch. 10, Part E, ¶ 10414(A)(3)–(4) (ECF 85 at 143) (emphasis added). The
phrase “is payable” denotes an entitlement. See, e.g., Eastman v. United States,
33 Fed. Cl. 293, 297–98 (1995) (finding payment mandated by a Federal Travel
Regulation that provided: “travel and transportation expenses . . . are payable”)
(emphasis added; citations omitted); see also Payable (adj.), Black’s Law Dictionary
(11th ed. 2019) (defining “payable” as “([o]f a sum of money or a negotiable
instrument) that is to be paid.”) (emphasis added). This interpretation is reinforced
by the language in JTR Ch. 10, Part E, ¶ 10404(A)(2)(b), which provides: “If single-
type Gov’t Qtrs are not available for a member assigned to an OCONUS PDS, and
the dependent does not reside in the PDS vicinity, then FSH is also authorized.”
Id. (ECF 85 at 121) (emphasis added); see also JTR Ch. 10, Part E, ¶ 10404(B)
Table 10E-3, Rules 4 & 8 (ECF 85 at 122) (authorizing BAH/OHA and FSH-B/FSH-
O to eligible members); JTR App A, Part 1 at A1-4 24 (defining “AUTHORIZE(D)”
as “[t]he giving, through these regulations, of an allowance to an eligible individual
requiring no other action”).
In addition to creating an entitlement to FSH for qualifying service members,
the DOD Joint Travel Regulations clarify two issues on which § 403 is silent: (1) the
statutory BAH/OHA entitlement is to be paid to FSH-qualifying members at the
with-dependent rate for the area in which the service member’s dependents reside;
and (2) the regulatory FSH entitlement is to be paid at the without-dependent
24Not all DOD Joint Travel Regulations provisions were appended to the parties’ briefs. A complete
October 2016 edition is available at https://www.travel.dod.mil/Policy-Regulations/Joint-Travel-
Regulations/Archive/ (last visited Nov. 28, 2022).
14
BAH/OHA rate for the member’s PDS. See JTR Ch. 10, Part E, ¶ 10404(B)
Table 10E-3, Rules 4 & 8 (ECF 85 at 122).
2. Dependents Residing “At or Near” PDS
Service members whose dependents reside “at or near” their PDS are
generally barred from receiving dual BAH/OHA and FSH allowances under
both § 403 and the implementing DOD Joint Travel Regulations. See 37 U.S.C.
§ 403(d)(2)(A) (conditioning entitlement to FSH upon whether, inter alia, “the
member’s dependents do not reside at or near the [PDS] location”); JTR Ch. 10,
Part E, ¶ 10414(A)(4)(b) (ECF 85 at 143) (conditioning entitlement to FSH upon,
inter alia, whether “[d]ependents do not reside in the PDS vicinity”). The DOD
Joint Travel Regulations qualify this general prohibition by quantifying the
disqualifying dependents’ living situations and by specifying the necessary
residency requirements.
First, addressing the number of dependents which cause disqualification or
discontinuation of an otherwise qualified service member’s entitlement to FSH,
the DOD Joint Travel Regulations provide:
Dependents Reside in the Member’s PDS Vicinity. FSH-O/FSH-B is
not authorized if all of the member’s dependents reside in the PDS
vicinity. If some (but not all) of the dependents voluntarily reside near
the PDS, FSH-O/FSH-B continues. See par. 10000-C for definition of
vicinity.
JTR Ch. 10, Part E, ¶ 10414(E) (ECF 85 at 144) (underline in original; italics
added). By conditioning FSH disallowance (or discontinuance) on the requirement
that “all” dependents effectively reside with the service member (i.e., “at or near”
or “in the vicinity of” the PDS), the regulation accommodates the realities of diverse
family relationships and living arrangements. 25 The regulation further reflects
secretarial understanding that the need to maintain two residences does not
disappear when some, but not all, of a service member’s dependents reside with
them.
Second, the DOD Joint Travel Regulations establish a 90-day limit on
dependents’ visits with service members before automatically converting the visit
to formal residency for purposes of discontinuing FSH eligibility. The “Temporary
Social Visits by Dependent” provision of the governing regulation provides that a
25A service member disqualified for FSH because all of their dependents reside at or near the
PDS is still subject to the default rule under § 403(a), which entitles them to BAH/OHA at the
with-dependent rate for their PDS if they are not provided adequate government housing at the
PDS. See 37 U.S.C. § 403(a).
15
dependent effectively establishes residency “at or near the member’s PDS” for FSH
purposes if the dependent: visits the PDS intending to relocate there or otherwise
stays beyond 90 continuous days, see JTR Ch. 10, Part E, ¶ 10414(D)(1) (ECF 85 at
144); or stays at the PDS for longer than 90 continuous days regardless of intent,
see JTR Ch. 10, Part E, ¶ 10414(D)(2) (ECF 85 at 144).
Plaintiffs argue the 90-day rule is intended to prevent housing allowance
fraud by active duty service members. According to plaintiffs, the 90-day rule
prevents an active duty service member from collecting two allowances–one
for their PDS residence (where they are permanently stationed) and one for their
dependents’ purported residence (when the service member’s dependents actually
reside with the member at the PDS) and there is no military-based need for the
member to maintain two households. Considering the proffered intent of the 90-day
rule, plaintiffs submit it should not apply to the reserve component since reservists–
assuming they have not been provided government housing at the PDS and have
not been authorized transportation of household goods at government expense–
inherently need to maintain two residences: a secondary residence at the PDS to
serve while deployed and a primary residence to return to once their active duty
service is complete, regardless of whether they reside with their dependents.
This concern is addressed by the DOD Joint Travel Regulations’ third
qualification to the general requirement that FSH-eligible service members live
apart from their dependents. Using the vernacular “in the member’s PDS vicinity”
in place of the statutory language “at or near,” as referenced above, the DOD Joint
Travel Regulations define “vicinity” as follows:
When a member resides with the dependent and commutes daily
to the PDS, the dependent resides in the PDS vicinity regardless of
distance even if at a place in an adjacent country or state. A dependent
is residing in the PDS vicinity if residing in the same country, state
(when in Alaska or Hawaii), or U.S. territory or possession within
which the member’s PDS is located. However, if the member has to
maintain separate households, a dependent is not residing in the PDS
vicinity for FSH purposes if maintaining two households is authorized/
approved through the Secretarial Process. . . .
JTR Ch. 10, Part A, ¶ 10000(C) (Oct. 1, 2016) (ECF 85 at 73) (emphasis added).
Rather than select an arbitrary measure of distance and draw an imaginary
boundary around the PDS to distinguish dependents who reside “near” the PDS
from those who do not, this definition draws upon the practical realities faced by
service members and their dependents. 26 As a result, service members who need to
26During oral argument, government counsel suggested that more recent versions of the FMR
modify the above-quoted definition of vicinity. In examining the language of the December 2019
and August 2021 versions of the FMR, the Court finds no material changes in substance from the
16
maintain two households remain eligible–but are not necessarily entitled–to receive
FSH, whereas those who, for example, commute daily to their PDS from a home
they share with their dependents no matter the distance may forfeit their eligibility
to receive FSH. 27
The Court recognizes the discretionary nature of the above-highlighted
needs-based targeted exception: “[I]f the member has to maintain separate
households, a dependent is not residing in the PDS vicinity for FSH purposes
if maintaining two households is authorized/approved through the Secretarial
Process.” See JTR Ch. 10, Part A, ¶ 10000(C) (ECF 85 at 73) (emphasis added).
The affected plaintiffs concede they did not seek authorization or approval to
maintain two separate households through the Secretarial Process identified in
JTR Ch. 10, Part A, ¶ 10000(C) (ECF 85 at 73). Rightly so, plaintiffs maintain that
since they were initially paid (improperly as it turns out) BAH and OHA (rather
than BAH/OHA and FSH-O/FHS-B), they could not have known they needed to
utilize the Secretarial Process for FSH eligibility. Indeed, as of the publication of
this decision, DOD’s Military Compensation website continues to erroneously state
that service members on unaccompanied tours may receive both BAH and OHA:
If a member is serving an UNACCOMPANIED overseas tour,
the member is eligible for BAH at the “with dependents” rate,
based on the dependent’s US residence ZIP Code, plus OHA at
the “without dependents” rate, if the member is not furnished
government housing overseas.
See https://militarypay.defense.gov/pay/allowances/bah_types.aspx (last visited
Dec. 2, 2022). Through this action, plaintiffs seek retroactive and, in certain cases,
prospective secretarial authorization and approval to maintain separate households
and, consequently, retain entitlement to BAH/OHA and FSH-B/FSH-O (depending
upon their PDS and the location of their primary residence).
October 2016 JTR. Although the first and second sentences in the cited versions of the FMR are
flipped from the October 2016 JTR, all three definitions focus on the service member’s personal
(subjective) choice of commute rather than an arbitrary (objective) measure of distance. All three
definitions similarly include the discretionary needs-based exception emphasized herein.
27Addressing “Family Separation Allowance,” the Army’s Military Pay and Allowances Policy in
effect during the timeframe relevant here similarly provided:
The purpose of FSH is to pay a member for added housing expenses resulting from
enforced separation from dependents. This includes soldiers at a duty station within
50 miles of their family who are restricted to remain on base twenty-four hours a day,
seven days a week, in excess of thirty consecutive days.
AR 37-104-4 Ch. 13, § 13-2(a) (2005) (superseded by AR 637–1 (July 2021)).
17
The Court agrees with the government that plaintiffs’ requests for
secretarial authorization and approval under this provision of the DOD Joint Travel
Regulations–particularly with regard to retroactive requests–fall within the
exclusive providence of the Secretary of the Army through the ABCMR. The Court
further agrees the assessments should be made on a case-by-case basis, taking into
account: whether the service member’s dependents (one, some, or all) reside(d) at or
near the PDS; the intended purpose of any dependent visits (i.e., visit or relocation);
the duration of the cohabitation regardless of intent (i.e., more or less than
90 consecutive days); and whether the member in fact had/has to maintain separate
households. Alternatively, the Secretary may decide that a blanket waiver or
exception, in some form, should be adopted by the Army to account for the general
need for reservists with dependents to maintain two households regardless of
where their dependents reside. Either way, this issue must be resolved in the
first instance by the Army on remand.
While the Secretary must adhere to the DOD Joint Travel Regulations, as
highlighted above, the regulations vest considerable discretion in the Secretary to
authorize or approve FSH in situations where the maintenance of two households
is deemed necessary regardless of the established living arrangements between a
service member and their dependents. See JTR Ch. 10, Part A, ¶ 10000(C) (ECF 85
at 73) (quoted above). The Court leaves to the Secretary of the Army or their
designee (i.e., ABCMR) to make individualized determinations, grant a blanket
waiver or exception, or work with the DOD to amend the Joint Travel Regulations
to establish a general FSH entitlement for members of the reserve component
with dependents based upon the presumption that reservists must maintain
dual households to accommodate their hybrid military service and civilian
responsibilities. However those issues are ultimately resolved, authorization
or approval of a second housing allowance under this regulatory scheme is
discretionary and, thus, effectively nonjusticiable. 28 See Voge v. United States,
844 F.2d 776, 779 (Fed. Cir. 1988) (“Judicial deference must be ‘at its apogee’ in
matters pertaining to the military and national defense.”) (quoting Rostker v.
Goldberg, 453 U.S. 57, 70 (1981)). “[J]udges are not given the task of running the
Army.” Orloff v. Willoughby, 345 U.S. 83, 93 (1953), quoted in Voge, 844 F.2d at
779.
28 But see Antonellis v. United States, 723 F.3d 1328, 1332 (Fed. Cir. 2013) (“[A]lthough the merits
of a decision committed wholly to the discretion of the military are not subject to judicial review,
a challenge to the particular procedure followed in rendering a military decision may present a
justiciable controversy.”) (quoting Adkins v. United States, 68 F.3d 1317, 1323 (Fed.Cir.1995)).
18
II. Amended Complaint
A. Standard of Review
Under RCFC 15(a)(2), “a party may amend its pleading only with the
opposing party’s written consent or the court’s leave.” Consistent with the
governing rule’s directive that leave should be “freely give[n] when justice
so requires,” this language is “liberally construed.” See 3rd Eye Surveillance, LLC
v. United States, 140 Fed. Cl. 39, 52 (2018) (citing cases). Nevertheless, the Court
may deny a party’s request to file an amended pleading where there is evidence of
undue delay or the proffered amendment would be futile. See A&D Auto Sales, Inc.
v. United States, 748 F.3d 1142, 1158 (Fed. Cir. 2014).
“In cases in which proceedings have not concluded in the trial court, ‘mere
delay, without some showing of prejudice, bad faith, or futility [has been found to
be] insufficient to deny a motion to amend a complaint.’” California ex rel. Yee v.
United States, 145 Fed. Cl. 802, 811 (2019) (alteration in original) (quoting Alaska v.
United States, 15 Cl. Ct. 276, 280 (1988)). Here, as explained in supra note 2,
despite the age of this case, litigation remains in the early stages due in large part
to the government’s first request for a voluntary remand lasting two years.
Moreover, plaintiffs’ proposed amendment–proffering an alternative theory of
recovery–was not necessary or even reasonably contemplated until DFAS declared
that the dual housing allowance payments initially authorized and paid by the
Army and thereafter sanctioned by the ABCMR were not lawful and, thus, could not
be remitted. Plaintiffs cannot be penalized for the passage of time stemming from
the voluntary remand or the time needed to litigate these issues of first impression;
nor can the government make a credible argument of prejudice or bad faith.
Accordingly, the sole potential ground upon which to deny the requested
amendment is futility.
“A motion to amend may be deemed futile if a claim added by the amendment
would not withstand a motion to dismiss.” Shoshone Indian Tribe of the Wind River
Rsrv., Wyo. v. United States, 71 Fed. Cl. 172, 176 (2006) (citing cases); see also
Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. de C.V., 464 F.3d 1339,
1354–55 (Fed. Cir. 2006) (“When a party faces the possibility of being denied leave
to amend on the ground of futility, that party must demonstrate that its pleading
states a claim on which relief could be granted, and it must proffer sufficient facts
supporting the amended pleading that the claim could survive a dispositive pretrial
motion.”) (citing cases). To survive a motion to dismiss, plaintiffs’ proposed claim
and supporting factual allegations must at least “plausibly give rise to an
entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
19
In evaluating futility, courts generally do not engage in an exhaustive
assessment of the merits of the proffered amendment; rather, review is routinely
limited to “whether a party’s proposed amendment is facially meritless and
frivolous . . . .” St. Paul Fire & Marine Ins. Co. v. United States, 31 Fed. Cl. 151,
155 (1994), quoted in Yee, 145 Fed. Cl. at 812. Here, the complex statutory and
regulatory scheme at play in this case–combined with the critical need for legal
clarity regarding the issues to be considered on remand–nevertheless warrant
more extensive analysis of plaintiffs’ proffered alternative theory of recovery.
B. Futility Analysis: Travel and Transportation Allowances
(Per Diem) Statute
As a preliminary matter, the Court has subject matter jurisdiction over
plaintiffs’ alternative claim to monetary relief under the Travel and Transportation
Allowances (Per Diem) statute, 37 U.S.C. § 474 (2016) (repealed and recodified at
37 U.S.C. § 452). Indeed, the pre-2021 version of the statute mandates the payment
of per diem to service members, stating in relevant part:
(a) Except as provided [below] and under regulations prescribed by the
Secretaries concerned, a member of a uniformed service is entitled to
travel and transportation allowances for travel performed or to be
performed under orders . . . .
(1) upon a change of permanent station, or otherwise, or when
away from his designated post of duty regardless of the length
of time he is away from that post;
(2) upon appointment, call to active duty, enlistment, or
induction, from his home or from the place from which called or
ordered to active duty to his first station;
...
(d)(1) The travel and transportation allowances authorized for each
kind of travel may not be more than one of the following:
(2) Under regulations prescribed by the Secretaries concerned,
a member of a uniformed service entitled to travel and
transportation allowances under subsection (a) is entitled to
any of the following:
(A) A per diem allowance at a rate not to exceed that
established by the Secretaries concerned.
20
(B) Reimbursement for the actual and necessary expenses
of official travel not to exceed an amount established by
the Secretaries concerned.
(C) A combination of payments described in
subparagraphs (A) and (B).
37 U.S.C. § 474(a) & (d) (emphasis added) 29; see 28 U.S.C. § 1491(a)(1) (granting
Court of Federal Claims “jurisdiction to render judgment upon any claim against
the United States founded . . . upon . . . any Act of Congress”), cited in United States
v. Testan, 424 U.S. 392, 400–01 (1976) (Court of Federal Claims’ jurisdiction is
limited to claims arising under money-mandating federal statutes).
The futility assessment of plaintiffs’ proposed claim turns on whether
plaintiffs are plausibly among the group of service members entitled to per diem
under § 474. Since the military Secretaries are charged with administering
regulations concerning “the conditions under which travel and transportation
allowances are authorized,” 37 U.S.C. § 474(b)(1)(A), plaintiffs’ potential
entitlement to per diem is determined by the DOD Joint Travel Regulations.
Under the regulations, if plaintiffs’ activation orders are temporary duty (TDY)
orders rather than permanent change of station (PCS) orders, they are generally
entitled to the claimed per diem. See JTR Ch. 4, Part B, ¶ 4050(A)(5) (“Per diem is
applicable for all TDY and [permanent duty travel (PDT)] periods; except when an
[Actual Expense Authorization (AEA)] is authorized/approved.”) (emphasis added).
The relevant portions of plaintiffs’ activation orders directed plaintiffs to
return to their homes at the end of their deployments. See, e.g., ECF 96 at 16
(“Upon completion of this duty, unless sooner released, you will return to your home
and upon arrival be released from active duty.”). Critical to the plausibility of
plaintiffs’ proposed claim, TDY orders may command a member to return to their
last duty station, while PCS orders may not. Compare JTR App. A, Part 1 at A1-43
(defining “Temporary Duty (TDY)” as including: “Duty at one or more locations,
away from the PDS, under an order providing for further assignment, or pending
further assignment, to return to the old PDS or to proceed to a new PDS.”)
(emphasis added) with id. at A1-32 (defining “Permanent Change of Station (PCS)
as: “The assignment, detail, or transfer of an employee, member, or unit to a
different PDS under a competent travel order that does not specify the duty as
29 The current version of the per diem statute, in contrast, is permissive. See 37 U.S.C. § 452(a)
(“Except as otherwise prohibited by law, a member of the uniformed services or other authorized
traveler may be provided transportation, lodging, or meals-in-kind, or actual and necessary expenses
of travel and transportation, for, or in connection with, official travel under circumstances as
specified in regulations prescribed under section 464 of this title.”) (emphasis added).
21
temporary, provide for further assignment to a new PDS, or direct return to the
old PDS.”) (emphasis added).
Since a reservist’s home is considered their last (or old) PDS for housing
allowance purposes, see supra note 16, it is plausible that a reservist’s home is
similarly considered their last (or old) PDS for purposes of interpreting or
categorizing activation orders. Accordingly, in directing plaintiffs to return their
homes, plaintiffs’ activation orders may have effectively directed plaintiffs to their
last (or old) PDS. If this argument succeeds, plaintiffs’ orders would fit the
regulatory definition of TDY orders rather than PCS orders.
In contradistinction, the government cites the DOD Joint Travel Regulations
addressing “Special Circumstances Travel and Transportation” and, in particular,
“Reserve Component (RC) Travel,” in support of defendant’s position that valid
PCS orders may direct a reservist to “return to [their] primary residence or [Place
Entered Active Duty (PLEAD)]” without necessarily converting them to TDY orders.
See JTR Ch. 7, Part K ¶ 7355(A); e.g., id. ¶ 7355(F) (distinguishing between
TDY and PCS orders in discussing per diem and AEA payments). Although the
government’s position may ultimately prevail, at this juncture, the Court cannot
conclude that plaintiffs’ proposed alternative claim for relief is “facially meritless
and frivolous.” See St. Paul Fire & Marine Ins., 31 Fed. Cl. at 155, quoted in Yee,
145 Fed. Cl. at 812.
That TDY orders are usually limited to 180 days, see JTR Ch. 2, Part C,
¶ 2230(B)(1), is similarly not fatal to plaintiffs’ claimed entitlement to per diem as
an alternative to FSH. While plaintiffs’ activation orders provide for deployment
exceeding 180 days, JTR Ch. 2, Part C, ¶ 2230(C) provides a procedure for
authorizing extended TDY periods and, thus, extended per diem eligibility. The
Court is unaware of any regulation or statute forbidding retroactive authorization.
To the contrary, JTR Ch. 2, Part C, ¶ 2205 provides that “[a]n order . . . [m]ay be
retroactively corrected to show the original intent . . . .” Id. (citation omitted).
Moreover, plaintiffs’ allegation that their activation orders are TDY orders
entitling them to per diem coheres with statements made by DOD leaders in
seeking congressional passage of subsection (g) to 37 U.S.C. § 403. In a 2006 letter
to congressional leaders, DOD’s then-Acting General Counsel explained: “current
law and Departmental policy is such that Reservists are paid BAH based on the
location of their civilian residence and temporary duty entitlements (i.e., per diem)
at their duty location (even though they are permanently attached to the assigned
command).” See ECF 100 at 16 (italics in original). To be clear, the impetus for
the proposed statutory amendment to § 403 was to authorize the more cost-efficient
alternative of paying reservists without dependents either two BAHs or a BAH and
OHA. See id. at 15–16. Nonetheless, reservists with dependents should be afforded
22
the opportunity to address the potential merits of any analogous application or
extension of DOD’s expressed understanding and implementation.
Although it is unclear whether plaintiffs may recover under the Travel and
Transportation Allowances (Per Diem) statute and the implementing regulations,
these issues should not be decided by the Court in the first instance; rather, on
remand, the ABCMR should consider whether any of the plaintiffs’ activation orders
were effectively TDY orders entitling them to per diem as an alternative recovery
to FSH with regard to reservists with dependents or a second BAH/OHA with
regard to reservists without dependents. As highlighted by the government during
oral argument, there is already some confusion in the record involving Major
Schneck. During the first remand, the ABCMR seemingly rejected Major Schneck’s
constructive temporary change of station (TCS) status theory of recovery, stating:
“the Board determined this proposed relief is unnecessary having concurred with
the assertion that [Major Schneck] was authorized both OHA and BAH while
serving in Germany.” See ECF 52-6 at 22. Nonetheless, the ABCMR recommended
that Major Schneck receive per diem for the four-month period from May 17, 2019
through September 22, 2019, coinciding with the extension of his deployment orders
to facilitate the Army’s then-pending investigation. See ECF 52-6 at 23, 25.
III. Voluntary Remand
A. Legal Standard
“The Tucker Act gives the Court of Federal Claims the authority ‘to remand
appropriate matters to any administrative or executive body or official with such
direction as it may deem proper and just.’” Wolfing I, 144 Fed. Cl. at 521 (quoting
28 U.S.C. § 1491(a)(2)). Under RCFC 52.2, remand may be directed on motion filed
by one or more parties or sua sponte. Trace Sys. Inc. v. United States, No. 22-404,
2022 WL 2963486, at *2 (Fed. Cl. July 26, 2022) (citation omitted). Similar to a
motion to file an amended complaint, addressed supra, a request for a voluntary
remand should be denied if the Court determines it is frivolous or made in
bad faith. See id. As recently stated by this Court:
[T]he true inquiry in deciding a motion to remand is if “the agency
intends to take further action with respect to the original agency
decision on review.” Limnia, Inc. v. United States Dep’t of Energy,
857 F.3d 379, 386 (D.C. Cir. 2017). An agency need not “confess error
or impropriety in order to obtain a voluntary remand. But the agency
ordinarily does at least need to profess intention to reconsider,
re-review, or modify the original agency decision that is the subject
of the legal challenge.” Id. at 387; see also Keltner v. United States,
148 Fed. Cl. 552, 563 (2020) (“The case law thus makes clear that
where an agency requests a remand without confessing error, the
agency must express some intent to reconsider the original agency
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decision that is the subject of the legal challenge, after which the court
has discretion to grant or deny the motion.”).
Trace Sys., 2022 WL 2963486, at *2.
As found in Wolfing I, a (second) voluntary remand is appropriate to afford
the Secretary of the Army and the ABCMR an opportunity to consider in the first
instance the legal conclusions outlined in this decision regarding reservists’
entitlement and eligibility to receive housing allowances in the forms of BAH, OHA,
FSH-B, and FSH-O. See Wolfing I, 144 Fed. Cl. at 521–22. The overarching policy
decisions and implications falling within the province of the Secretaries of Defense
and the Army, and the individualized circumstances of each service member not yet
fully developed, will play a critical role in determining whether plaintiffs (and other
similarly situated service members) are entitled or otherwise eligible to receive
dual housing allowances. If such relief is warranted, the ABCMR will be poised
to simultaneously correct affected military personnel records and coordinate with
DFAS to provide the requisite monetary relief.
B. Instructions for Remand
Pursuant to RCFC 52.2(a) and (b)(1)(a), and at the request of the parties,
this military pay case is voluntarily remanded to the Secretary of the Army and
the ABCMR for a period of six months to consider whether plaintiffs are entitled
or otherwise authorized and approved to receive (retroactively and prospectively,
where applicable) housing allowances in the form of BAH, OHA, FSH-B, and
FSH-O or, in the alternative, per diem, consistent with this decision. As part of
the assessment of reservists with dependents and their entitlement and eligibility
to receive FSH, the Secretary of the Army should consider whether a dependent
residency exception or waiver is appropriate given the general need for reservists
to return to their primary residence after completing their deployment. Depending
upon how these issues are resolved, the Board should consider whether additional
corrections to plaintiffs’ military personnel records are warranted to remove
information related to internal investigations and proceedings. The Board should
also consider other relief such as the return of repayments or garnishments and
convening SSBs, as necessary.
To facilitate the ABCMR’s remand proceedings, as agreed by the parties
during oral argument, within 60 days of this decision, plaintiffs and similarly
affected reservists seeking administrative relief shall begin submitting applications
to the ABCMR specifying the relief they seek under this decision as well as the
factual basis for their claimed entitlement and eligibility. The Court leaves to the
parties to determine the exact form and substance of the applications submitted on
remand. To this end, absent good cause, plaintiffs and other service members
seeking similar relief from the Board during the pendency of the second remand,
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shall respond within 30 days to any reasonable requests by the Board for additional
information regarding their actual living arrangements as well as the residency and
whereabouts of their dependents, if any, during any period of the service member’s
deployment for which dual housing allowances are sought or accepted. At plaintiffs’
request, and by consent, leave is hereby granted for plaintiffs to file successive
amended complaints joining additional (similarly situated) plaintiffs during the
remand period to allay any statute of limitations concerns.
Concomitantly, as requested by the government during oral argument,
the ABCMR shall immediately seek an advisory opinion from the DOD Office of
Assistant Secretary of Defense for Manpower and Reserve Affairs addressing the
discretion vested in the Secretary of the Army to grant dual housing allowances
under 37 U.S.C. § 403(g) and the implementing DOD regulations. To the extent the
DOD is of the opinion the Secretary lacks such authority, or that the discretion
has evolved since the passage of § 403(g)–and, more particularly, between October
2016 and the present–the advisory opinion must include a timeline of the evolution
of the nature and scope of the discretion vested in the Secretary of the Army and the
basis for the opined evolution. Additionally, the ABCMR must also immediately
seek an advisory opinion from the Defense Human Resources Activity (DHRA) on
whether per diem is (or ever was) authorized for reserve component members while
serving on active duty under the Travel and Transportation Allowances statute,
37 U.S.C. § 474 (2016) (repealed and recodified at 37 U.S.C. § 452 (2021)), and the
implementing DOD regulations. To the extent the DHRA is of the opinion that the
authorization evolved between October 2016 and the present, the advisory opinion
must include a timeline of the evolution of the per diem authorization and the basis
for the opined evolution. As further requested by the government, the ABCMR
must also clarify whether and, if so, to what extent, the Board construed Major
Schneck’s deployment orders as placing him in TCS status, entitling him to recover
per diem.
In accordance with RCFC 52.2(b)(1)(B), the ABCMR shall complete its review
and assessment within 180 days of this decision, subject to extension as provided in
RCFC 52.2(c). Pursuant to RCFC 52.2(b)(1)(C), the Clerk will stay all proceedings
in this matter until further order of the Court. The Court will retain jurisdiction
over this case during the remand period. As required by RCFC 52.2(b)(1)(D), the
defendant shall file a status report every 90 days during the remand period
updating the Court on the progress of the remand proceedings.
In accordance with RCFC 52.2(d), within 30 days of the conclusion of the
voluntary remand proceedings before the ABCMR, the ABCMR shall send to the
Court the required copies of the final decision(s) reached by the Board. Within
30 days thereafter, pursuant to RCFC 52.2(e)(1), the parties shall file a joint status
report setting forth the parties’ position(s) regarding whether further litigation of
25
this matter is necessary. If requesting further proceedings before the Court to
resolve this case, then the parties shall include a proposed schedule going forward.
CONCLUSION
For the reasons stated above:
(1) Plaintiffs’ Second Motion for Leave to File an Amended Complaint (ECF 96)
is GRANTED.
(2) Plaintiffs’ proffered Amended Complaint (ECF 96-2) is deemed FILED
by leave of the Court.
(3) Defendant’s Motion for a Second Voluntary Remand to the ABCMR (ECF 72)
is GRANTED consistent with the instructions specified herein.
(4) Pursuant to RCFC 52.2(a), this military pay case is REMANDED to the
Secretary of the Army and the ABCMR to consider whether plaintiffs are
entitled or otherwise authorized and approved to receive housing allowances
or other subsidies consistent with this Opinion and Order as well as other
relief specified herein. During the requested remand:
a. Pursuant to RCFC 52.2(b)(1)(A):
i. Within 10 days of this Opinion and Order, the ABCMR shall
request an advisory opinion from the DOD Office of Assistant
Secretary of Defense for Manpower and Reserve Affairs
addressing the discretion vested in the Secretary of the Army
to grant dual housing allowances under 37 U.S.C. § 403(g) and
implementing DOD regulations. To the extent the DOD is of the
opinion the Secretary lacks such authority, or that the discretion
has evolved since the passage of § 403(g)–and, more particularly,
between October 2016 and the present–the advisory opinion
must include a timeline of the evolution of the nature and scope
of the discretion vested in the Secretary of the Army and the
basis for the opined evolution.
ii. Within 10 days of this Opinion and Order, the ABCMR shall
request an advisory opinion from the Defense Human Resources
Activity (DHRA) on whether per diem is (or was) authorized for
reserve component members while serving on active duty under
the Travel and Transportation Allowances statute, 37 U.S.C.
§ 474 (2016) (repealed and recodified at 37 U.S.C. § 452 (2021)),
and the implementing DOD regulations. To the extent the
DHRA is of the opinion that the authorization evolved between
26
October 2016 and the present, the advisory opinion must include
a timeline of the evolution of the per diem authorization and the
basis for the opined evolution.
iii. Within 60 days of this Opinion and Order, plaintiffs and any
similarly affected reservists seeking administrative relief shall
begin submitting applications to the ABCMR specifying the
relief they seek under the Court’s decision as well as the factual
basis for their claimed entitlement and eligibility.
iv. Absent good cause, plaintiffs and any similarly affected
reservists seeking administrative relief shall respond to
the Board’s requests for relevant information within 30 days
of such requests.
b. Pursuant to RCFC 52.2(b)(1)(B), the ABCMR shall complete its review
within 180 days.
c. Pursuant to RCFC 52.2(b)(1)(C), the Clerk is directed to STAY
all proceedings in this matter until further order of the Court. The
Court will retain jurisdiction over this case during the remand period.
d. Pursuant to RCFC 52.2(b)(1)(D), the defendant shall FILE a Status
Report every 90 days during the remand period updating the Court
on the status of the remand proceedings.
e. During the remand period, by consent, plaintiffs’ request for leave
to file successive amended complaints joining additional (similarly
situated) plaintiffs is GRANTED.
f. Pursuant to RCFC 52.2(d), within 30 days of the conclusion of the
voluntary remand proceedings before the ABCMR, the ABCMR
shall send the Court the required copies of the final decision(s) reached
by the Board.
g. Pursuant to RCFC 52.2(e)(1), the parties shall FILE a Joint Status
Report within 30 days of the filing of the ABCMR’s final decision(s) or
other action on remand setting forth the parties’ position(s) regarding
whether further litigation of this matter is necessary. If requesting
further proceedings from the Court, then the parties shall include a
proposed schedule to govern this case going forward.
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(5) The Clerk shall SERVE a copy of this Order to the Secretary of the Army and
the ABCMR:
Hon. Christine Wormuth
Secretary of the Army
Office of the Secretary of the Army
101 Army Pentagon
Washington, DC 20310-0101
and
Dennis W. Dingle
Director, Army Board for the Correction of Military Records
Army Review Board Agency
251 18th Street South – Suite 385
Arlington, VA 22202-3531
It is so ORDERED.
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