shaw bransford & roth case law update

OPM Cannot Divest Board of Jurisdiction Until It Achieves True Status Quo Ante

An annuitant collecting a survivor benefit claimed she had not been returned to status quo ante following OPM’s unilateral rescission of its final decision during her MSPB appeal, and the Board remanded the case to determine whether true status quo ante had been achieved.

A Federal Employees Retirement System (“FERS”) survivor annuitant collecting a survivor benefit was informed by the Office of Personnel Management (“OPM”) that OPM had overpaid her husband’s basic annuity by $13,361.90, and that it would collect on the inadvertent debt by withholding a portion of the survivor annuity with each payment. The annuitant requested reconsideration, but on July 14, 2015, OPM issued a final decision declining to waive the overpayment or modify the overpayment amount. The annuitant filed an appeal with the Merit Systems Protection Board, challenging OPM’s final decision, but while the appeal was pending, OPM informed the MSPB administrative judge that it had rescinded its final decision and requested that the appeal be dismissed. The administrative judge found that OPM completely rescinded its final decision and dismissed the appeal for lack of jurisdiction, since an appealable OPM final decision no longer existed. The employee petitioned the full Board for review, arguing that OPM had not fully rescinded the decision because it had not fully refunded the money it had previously withheld. On February 25, 2016, the Merit Systems Protection Board granted the annuitant’s petition for review and vacated the initial decision.

In its review of the case, the Board found that OPM may recover a debt by an administrative offset against a FERS annuity payment via 5 C.F.R. § 845.205(a) and 206(a). That authority gives OPM the ability to withhold money from a survivor annuity “to recover an overpayment of the deceased spouse’s basic annuity.” Although OPM generally waits to commence collection until the Board has acted on any appeal of that decision, the Board admitted that though 5 C.F.R. § 845.205(d)(1), OPM does have permission to commence collection prior to the Board’s action if the Government’s ability to collect the debt would be substantially prejudiced. In this matter, OPM collected $1,122.30 after its final decision and prior to its self-enacted rescission of the decision.

The Board assumed, without deciding, that OPM properly met the standard for substantial prejudice, but held that the “fact that OPM was authorized to commence collection before issuing a final decision does not mean that once the final decision was issued, OPM could rescind it without refunding the collection and thereby divest the Board of jurisdiction.”

As the Board noted, if OPM completely rescinds its final decision, the Board would lose jurisdiction. But the Board observed that a “complete rescission requires OPM to return the appellant to the status quo ante.” In other words, the injured party must be placed, as near as possible, in the position she would have been in had the OPM decision never been issued. However, this case was complicated by the fact that the $1,122.30 at issue was withheld prior to the OPM decision, but was based on the same overpayment determination underlying the now-rescinded final decision.

The Board held that complete “rescission of the decision and a return to the status quo ante requires OPM to refund that money to [the annuitant] if she has an interest in it under FERS. The Board found that the annuitant likely had an interest in all or some of her late husband’s accrued but unpaid annuity, but also found that the record did not reflect whether the annuitant’s late husband had made a designation of a beneficiary for his accrued but unpaid annuity. Therefore, the Board remanded the case to the administrative judge in order to determine whether the annuitant had an entitlement to the funds at issue, and consequently whether OPM had afforded actual status quo ante.

For the above stated reasons, the Merit Systems Protection Board vacated the initial decision and remanded the appeal for further adjudication.

Read the full case: Campbell v. Office of Personnel Management

 


This case law update was written by Conor D. Dirks, associate attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.

Posted in Case Law Update

Tags: case law update

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