Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-03158/USCOURTS-ca13-15-03158-0/pdf.json

Parties Involved:
Paula K. Lua
Petitioner
Office of Personnel Management
Respondent

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

PAULA K. LUA,

Petitioner

v.

OFFICE OF PERSONNEL MANAGEMENT

Respondent

______________________ 

2015-3158

______________________ 

Petition for review of the Merit Systems Protection 

Board in No. SF-0845-15-0244-I-1. 

______________________ 

Decided: December 9, 2015

______________________ 

PAULA K. LUA, Los Angeles, CA, pro se. 

KARA M. WESTERCAMP, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, for respondent. Also represented by BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR.,

FRANKLIN E. WHITE, JR. 

______________________ 

Before LOURIE, BRYSON, and STOLL, Circuit Judges.

Case: 15-3158 Document: 26-2 Page: 1 Filed: 12/09/2015
2 LUA v. OPM

PER CURIAM. 

Paula K. Lua (“Lua”) appeals from the final decision 

of the United States Merit Systems Protection Board (the 

“Board”) affirming a decision of the Office of Personnel 

Management (“OPM”) finding that she had been overpaid 

$19,154.83 in annuity benefits under the Federal Employees’ Retirement System (“FERS”) and that she is not 

eligible for a waiver of repayment. See Lua v. Office of 

Pers. Mgmt., No. SF-0845-15-244-I-1, 2015 WL 1888712

(M.S.P.B. April 22, 2015). Because the Board did not err 

in affirming OPM’s decision, we affirm. 

BACKGROUND

Lua worked for the United States Postal Service for 

more than eleven years. Respondent’s Appendix (“R.A.”) 

35. She was placed on leave without pay on January 27, 

2000, and was separated for disability retirement on 

September 9, 2001. R.A. 57. Her disability retirement 

application was approved in August 2004, and made 

effective starting on the day after her last day in a pay 

status; that is, January 27, 2000. R.A. 23, 33. OPM 

accordingly used her salary on January 26, 2000 to calculate her retroactive and ongoing FERS benefits. R.A. 35. 

As a result, Lua received $30,169.25, after taxes, premiums, and insurance, as retroactive benefits for the time 

between when she was taken off of pay status and when 

she was granted disability retirement, in addition to 

ongoing benefits. R.A. 39. Lua was also sent a letter in 

August 2004 indicating that she had to notify OPM if she 

received social security benefits in the future because any 

social security award would reduce her FERS disability 

benefits. R.A. 23. 

During a routine check of Social Security Administration records in April 2014, OPM discovered that Lua had 

been receiving social security benefits since October 1, 

2011. R.A. 48. Despite the August 2004 letter, Lua failed 

to inform OPM that she was receiving those benefits. As 

Case: 15-3158 Document: 26-2 Page: 2 Filed: 12/09/2015
LUA v. OPM 3

a result, OPM calculated that it had overpaid Lua

$19,154.83, and sought repayment of that amount. 

As repayment may be waived in certain circumstances, Lua sought reconsideration of OPM’s determination in 

April and May 2014. OPM denied reconsideration, but 

offered to reconstitute the collection into 188 monthly 

installments of $100.00, and a final installment of $32.08.

R.A. 61.

Lua did not accept the installment agreement, and instead appealed OPM’s reconsideration decision to the 

Board in January 2015. Her case was assigned to Administrative Judge (“AJ”) Anthony L. Ellison, who previously 

issued an initial decision in another case involving Lua. 

Lua moved that Judge Ellison be disqualified on the basis 

of bias, but that motion was denied. 

The AJ issued an initial decision finding that OPM 

had met its burden of establishing the existence and 

amount of overpayment, and that Lua knew or should 

have known that she received overpayment of benefits. 

R.A. 5–11. Specifically, the AJ found that OPM had

established that Lua was receiving both FERS and social 

security benefits from October 11, 2011 until April 2014, 

and so her FERS benefits should have been reduced. R.A. 

7–8. The AJ did not accept Lua’s argument, also raised 

here, that OPM had, in fact, underpaid her benefits from 

the beginning. R.A. 8–9.

The AJ also found that Lua was not without fault in 

the creation of the overpayment because Lua was notified 

in advance of her obligation to inform OPM if she began 

receiving social security benefits. R.A. 9–10. Although 

Lua claimed not to have received that notification, the AJ

found that she provided no evidence in support of that 

claim. R.A. 9. Moreover, although Lua testified at the 

hearing that she had not received the August 2004 letter 

containing the notification, she had nevertheless 

Case: 15-3158 Document: 26-2 Page: 3 Filed: 12/09/2015
4 LUA v. OPM

acknowledged before the hearing that she had received 

the letter. Id.

Finally, the AJ found that recovery of the overpayment would not be against equity and good conscience 

because Lua did not submit an updated financial resources questionnaire to support her financial hardship 

claim. R.A. 10–11.

Lua did not seek review by the full Board, and so the 

AJ’s initial decision became the final decision of the 

Board. 5 C.F.R. § 1201.113. Lua then timely appealed to 

this court. We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(9). 

DISCUSSION

The scope of our review in an appeal from a Board decision is limited. We can set aside the Board’s decision 

only if it was “(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained 

without procedures required by law, rule, or regulation 

having been followed; or (3) unsupported by substantial 

evidence.” 5 U.S.C. § 7703(c) (2006); see Briggs v. Merit 

Sys. Prot. Bd., 331 F.3d 1307, 1311 (Fed. Cir. 2003). 

“Substantial evidence” is “such relevant evidence as a 

reasonable mind might accept as adequate to support a 

conclusion.” Dickey v. Office of Pers. Mgmt., 419 F.3d 

1336, 1339 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. 

NLRB, 305 U.S. 197, 229 (1938)).

Lua does not appear to contest the amount that OPM 

calculated as overpayment, but instead argues that 

repayment should be waived. The government responds 

that the Board correctly determined that Lua is not 

eligible for waiver. 

Recovery of an overpayment may be waived only 

when “the individual is without fault and recovery would 

be ‘against equity and good conscience.’” King v. Office of 

Pers. Mgmt., 730 F.3d 1342, 1347 (Fed. Cir. 2013) (quotCase: 15-3158 Document: 26-2 Page: 4 Filed: 12/09/2015
LUA v. OPM 5

ing 5 U.S.C. § 8470(b)). Recovery is against equity and 

good conscience (1) when it would cause financial hardship; (2) when the recipient can show that she relinquished a right or changed position due to the payment or 

notice of payment; or (3) when repayment would be unconscionable. Id.; 5 C.F.R. § 845.303. The recipient of the 

overpayment bears the burden of establishing by substantial evidence that waiver is appropriate. King, 730 F.3d 

at 1348 (citing 5 C.F.R. § 831.1407(b)). 

We agree with the government that substantial evidence supports the Board’s finding that Lua was not 

without fault for the overpayment. The Board considered 

evidence, in the form of Lua’s testimony at the prehearing 

conference, that she had received the letter outlining her 

responsibility to report social security benefits should she 

receive them. This letter put Lua on notice that such 

reporting was necessary. Lua’s lack of action after being 

notified led directly to the overpayment; therefore, she 

was not without fault.

Lua also argues that OPM actually underpaid her 

from the beginning, because it used January 27, 2000, the 

day after her last date on paid status, to calculate her 

highest average salary, rather than September 9, 2001, 

the day after her date of separation. The government

responds that the regulations allow benefits to begin on 

either date, and that its decision to select the earlier date 

was not arbitrary or capricious because the earlier date

provided Lua with an additional twenty months of benefits. 

An annuity “commences on the day after the employee 

separates or the day after pay ceases and the employee 

meets the requirements for title to an annuity.” 5 C.F.R. 

§ 844.301 (emphasis added). Accordingly, we agree with 

the government that the regulations expressly authorize 

beginning Lua’s annuity on January 27, 2000, the day 

after her pay ceased. Moreover, the decision to commence 

Case: 15-3158 Document: 26-2 Page: 5 Filed: 12/09/2015
6 LUA v. OPM

benefits on that date was not arbitrary or capricious 

because it allowed Lua to collect twenty months of benefits to which she would not otherwise have been entitled. 

At the time, Lua appeared to recognize that commencing 

benefits on that date worked to her advantage, as she did 

not object to the situation until OPM requested repayment of overpaid benefits.

Finally, Lua argues that the AJ was biased against 

her. The government responds that Lua has provided 

insufficient evidence of bias. 

“[O]pinions formed by the judge on the basis of facts 

introduced or events occurring in the course of the current 

proceedings . . . do not constitute a basis for a bias or 

partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible.” Bieber v. Dep’t of Army, 287 F.3d 1358, 1363 (Fed. 

Cir. 2002) (emphasis added) (quoting Liteky v. United 

States, 510 U.S. 540, 555 (1994)). We agree with the 

government’s arguments. Lua does not identify any 

statements or evidence that would support a conclusion 

that the AJ displayed any kind of favoritism or antagonism, and so does not begin to approach the evidentiary 

threshold required to show a kind of favoritism or antagonism which made fair judgment impossible. The record 

in the present case establishes that the AJ applied settled 

law to the facts of Lua’s case, and that his conclusions 

based on those facts were supported by substantial evidence.

CONCLUSION

We have considered Lua’s remaining arguments, but 

find them unpersuasive. For the foregoing reasons, the 

decision of the Board is affirmed.

AFFIRMED

Case: 15-3158 Document: 26-2 Page: 6 Filed: 12/09/2015
LUA v. OPM 7

COSTS

No costs.

Case: 15-3158 Document: 26-2 Page: 7 Filed: 12/09/2015