United States Court of Appeals 

for the Federal Circuit ______________________

KAREN LI,

Petitioner

v.

DEPARTMENT OF JUSTICE,

Respondent

______________________

2019-1046

______________________

Petition for review of a decision of the Bureau of Justice 

Assistance in PSOB Claim No. 2011-016.

______________________

Decided: January 16, 2020

______________________

SUSAN POLL KLAESSY, Foley & Lardner LLP, Chicago, 

IL, argued for petitioner. Also represented by JILL 

NICHOLSON; JACK GABRIEL HAAKE, Washington, DC. 

 MEEN GEU OH, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, 

DC, argued for respondent. Also represented by JOSEPH H.

HUNT, TARA K. HOGAN, ROBERT EDWARD KIRSCHMAN, JR.; 

RAFAEL ALBERTO MADAN, MATTHEW T. SCODELLARO, Office 

of Justice Programs, Office of General Counsel, United 

States Department of Justice, Washington, DC. 

 ______________________
2

Before NEWMAN, MOORE, and CHEN, Circuit Judges.

CHEN, Circuit Judge

Karen Li brought a claim for death benefits under the 

Public Safety Officers’ Benefits Act (PSOBA) of 1976, Pub. 

L. No. 94-430 (codified as amended at 34 U.S.C. §§ 10281–

10288). Ms. Li appeals a June 28, 2018, decision by the 

Bureau of Justice Assistance (BJA) holding that she was 

not entitled to the death benefits for her fiancé, San Diego 

Sheriff’s Deputy Kenneth Collier. The BJA determined 

that Ms. Li was not a designated beneficiary under Deputy 

Collier’s life insurance policy in accordance with 34 U.S.C. 

§ 10281(a)(4)(B). Because the BJA’s decision is supported 

by substantial evidence and properly applies the statute 

and the BJA’s implementing regulation, 28 C.F.R. § 32.13, 

we affirm the BJA’s denial of benefits.

BACKGROUND

In February 2010, Sherriff’s Deputy Kenneth Collier 

was patrolling Route 52 in San Diego County, California, 

where he observed a car driving the wrong way. Deputy 

Collier pursued the driver by driving down the middle lane 

of the highway, but the middle lane suddenly ended, and 

Deputy Collier lost control of the car as he attempted to 

exit the middle lane. Deputy Collier’s car fell down the embankment on the side of the highway. After his rescue, 

Deputy Collier was flown to the hospital where he died. 

Deputy Collier was survived by his fiancée, Karen Li. 

Deputy Collier and Ms. Li started dating in 2003 and 

owned a house together. The couple planned to get married 

three months after Deputy Collier’s accident, choosing that 

date to combine the wedding celebration with Deputy Collier’s 40th birthday. Deputy Collier told Ms. Li and their 

friends on multiple occasions that he had made arrangements for Ms. Li to be taken care of if anything ever happened to him, including through a video he recorded after 

his mother died in 2008. In that video, Deputy Collier
LI v. DOJ 3

explained that: “My understanding is that the one-third interest that I have [in Deputy Collier’s mother’s] house upon 

my death or incapacitation reverts back—control back to 

[Deputy Collier’s siblings], but all other assets, savings, 

everything like that, will be separate and go to Karen.” 

J.A. 405–06.

Deputy Collier’s job benefits included workers’ compensation, retirement benefits, and life insurance. In re Li, No. 

2011-016, at 6–7 (BJA June 28, 2018). Deputy Collier designated Ms. Li as a partial dependent in his workers’ compensation program and as his beneficiary for his 

retirement benefits. Id. However, since 1997, Deputy Collier’s designation form for his life insurance designated his 

mother as the primary beneficiary and his ex-girlfriend, 

Monique Stamp, as his contingent beneficiary. Deputy Collier signed forms in 2003, 2006, and 2007 reaffirming these

beneficiary designations. While the forms in 1997–2006 

explicitly listed the beneficiary designations above the signature line (identifying Deputy Collier’s mother and Ms. 

Stamp by name on Deputy Collier’s signed forms), the 

County of San Diego (the County) changed its policy in 

2007 and stopped including this explicit listing on its form.

The life insurance policy stated that to change the beneficiary designation, “[y]ou must name or change Beneficiaries in writing. Writing includes a form signed by you 

or a verification from the Policyholder or Employer of an 

electronic or telephonic designation made by you. Your 

designation . . . [m]ust be delivered to the Policyholder or 

Employer during your lifetime.” J.A. 202–03. There is no 

evidence that Deputy Collier ever provided any such written designation change, or otherwise made any effort to 

contact the County or the insurance company to make a 

beneficiary designation change. 

At the time of Deputy Collier’s death, Deputy Collier’s 

mother had passed away, leaving Ms. Stamp as the designated beneficiary for his life insurance policy. Ms. Li
4

contested to the insurance company that she should be the 

beneficiary for Deputy Collier’s life insurance policy. The 

insurance company determined that Ms. Li had a colorable 

claim to Deputy Collier’s life insurance. But rather than 

determine whether Ms. Li had the stronger claim, the insurance company told Ms. Li that she could either settle 

the claim with Ms. Stamp or the insurance company would

file an interpleader to have a court determine who had the 

better claim. Ms. Li and Ms. Stamp arrived at a settlement 

in which Ms. Li received $560,920 and Ms. Stamp received

$25,000. The insurance company honored this settlement 

agreement. 

Ms. Li then filed for PSOB death benefits. However, 

the BJA determined that Ms. Li had failed to show she was 

the designated beneficiary of Deputy Collier’s life insurance policy. Li, No. 2011-016, at 19. In accordance with 34 

U.S.C. § 10281(a) and 28 C.F.R. § 32.13, the BJA analyzed 

whether Ms. Li was the designee of a “legal and valid” life 

insurance policy. Id. at 9–11. To make this determination, 

the BJA analyzed California insurance law, determining 

that, with three limited exceptions, the law requires strict 

compliance with the terms of the insurance policy. Id. at 

11–12. Those exceptions include (1) the insurance company waives strict compliance, (2) it is beyond the power of 

the policyholder to comply, or (3) the policyholder “pursued 

the course pointed out by the laws of the association [i.e. 

the insurance company], and has done all in his power to 

change the beneficiary” but failed to properly make the 

change. Pimentel v. Conselho Supremo de Uniao Portugueza do Estado da Cal., 57 P.2d 131, 133 (Cal. 1936). The 

BJA determined that Ms. Li failed to show any of those exceptions were met and denied Ms. Li’s claim. Li, No. 2011-

016, at 18–19.

Ms. Li now appeals. We have jurisdiction under 34 

U.S.C. § 10287.
LI v. DOJ 5

DISCUSSION

Ms. Li argues that the BJA erred by failing to properly 

apply the statute and implementing regulations, failing to 

correctly apply California law, and failing to support its decision with substantial evidence. 

The PSOBA directs the BJA to pay a death benefit to 

the proper claimant when a public safety officer is killed in 

the line of duty. 34 U.S.C. § 10281(a). The PSOBA provides a hierarchy of potential claimants for determining 

the proper claimant, eventually reaching 34 U.S.C. 

§ 10281(a)(4)(B), which dictates that “if there is no surviving spouse of the public safety officer and no surviving 

child,” the proper claimant is “the surviving individual . . . 

designated by the public safety officer to receive benefits 

under the most recently executed life insurance policy of 

the public safety officer on file at the time of death.” Id.

§ 10281(a)(4)(B). The BJA promulgated 28 C.F.R. § 32.13 

to determine when a claimant is the beneficiary of the public safety officer’s life insurance policy. In relevant part, 

the regulation provides that “[a]n individual . . . is designated as beneficiary of a life insurance policy of such officer 

as of such date, only if the designation is, as of such date, 

legal and valid (as a designation of beneficiary of a life insurance policy) and unrevoked (by such officer or by operation of law) or otherwise unterminated.” 28 C.F.R. § 32.13. 

We review the BJA’s application of its own regulations 

to determine “(1) whether there has been substantial compliance with statutory requirements and provisions of implementing regulations; (2) whether there has been any 

arbitrary or capricious action on the part of the government 

officials involved; and (3) whether substantial evidence 

supports the decision denying the claim.” Amber-Messick 

v. United States, 483 F.3d 1316, 1321 (Fed. Cir. 2007). In 

this case, we review the BJA Director’s determination that 

Ms. Li was not a designated beneficiary under Deputy Collier’s life insurance policy.
6

A

We first turn to whether the BJA correctly applied the 

statute and the implementing regulation. We review an 

agency’s interpretation of a statute under the Chevron

framework. Chevron U.S.A. Inc. v. Nat. Res. Def. Council, 

Inc., 467 U.S. 837 (1984). We first determine “whether 

Congress has directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842. If “Congress either had no 

intent on the matter, or [] Congress’s purpose and intent is 

unclear,” we consider whether the agency’s interpretation 

is based on a permissible construction of the statutory language at issue. Delverde, SrL v. United States, 202 F.3d 

1360, 1363 (Fed. Cir. 2000); see also Chevron, 467 U.S. at 

843. For the second step, “the court need not conclude that 

the agency construction was the only one it permissibly 

could have adopted to uphold the construction.” Chevron, 

467 U.S. at 843 n.11. So long as the agency’s construction 

of the term in the statute is reasonable, Chevron “requires 

a federal court to accept the agency’s construction . . . even 

if the agency’s reading differs from what the court believes 

is the best statutory interpretation.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980 

(2005).

When an officer dies without a surviving spouse or children, the statute provides a hierarchy to determine the 

proper beneficiary. Toward the bottom of this statutorilydefined hierarchy, the PSOBA allows a person “designated 

by the public safety officer to receive benefits under the 

most recently executed life insurance policy of the public 

safety officer on file at the time of death” to recover the 

benefits. 34 U.S.C. § 10281(a)(4)(B). At this step in the 

hierarchy, Congress’s intent is clear that the public safety 

officer’s life insurance designation determines the proper 

beneficiary for PSOB benefits. The BJA’s implementing 

regulation, 28 C.F.R. § 32.13, is entirely consistent with 

this intent and clarifies that an individual “is designated 

as beneficiary of a life insurance policy of such officer” if 
LI v. DOJ 7

the designation is “legal and valid (as a designation of beneficiary of a life insurance policy) and unrevoked (by such 

officer or by operation of law) or otherwise unterminated.” 

28 C.F.R. § 32.13. The BJA evaluated whether Deputy Collier’s insurance policy and designations were “legal and 

valid” under California state contract law. Li, No. 2011-

016, at 9–12. 

Ms. Li does not contest the BJA’s reliance on California 

state contract law; she instead argues that the BJA’s analysis in determining that she was not the designated beneficiary did not properly consider the totality of the 

circumstances. Specifically, Ms. Li argues the BJA should 

have found determinative Deputy Collier’s 2008 video and 

the testimony that Deputy Collier intended for Ms. Li to 

receive all of his benefits. We find Ms. Li’s approach to be 

inconsistent with the text of § 10281(a)(4)(B). Congress intended for the life insurance policy to determine the proper 

beneficiary for PSOB benefits, which required the BJA to 

analyze the beneficiary designation as set out in the insurance policy. The BJA properly followed this analysis, 

which leaves no room for Ms. Li’s proposed totality of the 

circumstances test. Ms. Li was therefore required to show 

she was the designated beneficiary under the life insurance 

policy.

B

Having determined that the BJA correctly applied

§ 10281(a)(4)(B), we next turn to whether the BJA’s decision was arbitrary and capricious and supported by substantial evidence. We determine whether a decision is 

arbitrary and capricious based on “whether the decision 

was based on a consideration of relevant factors and 

whether there has been a clear error of judgment.” In re 

Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 

416 (1971)). This includes whether the BJA misapplied 

California law when determining if the life insurance 
8

policy and beneficiary change were legal and valid. Glob. 

NAPs Cal., Inc. v. Pub. Utils. Comm’n, 624 F.3d 1225, 1231

(9th Cir. 2010). 

California law requires strict compliance with the 

terms of a life insurance policy unless any one of three exceptions is met. Pimentel, 57 P.2d at 133. Those exceptions 

are (1) the insurance company waives strict compliance, (2) 

it is beyond the power of the policyholder to comply, or (3) 

the policyholder “pursued the course pointed out by the 

laws of the association [i.e. the insurance company], and 

has done all in his power to change the beneficiary” but 

failed to properly make the change. Id. Ms. Li argues that 

the first and third exceptions apply in this case, relying 

heavily on the insurance company’s letter that Ms. Li could 

either settle her claim with Ms. Stamp or the insurance 

company would interplead the claim for the courts to determine the proper beneficiary. 

As to the first exception, California law is clear that interpleader by an insurance company, much less the threat 

of interpleader, does not constitute waiver of strict compliance. Id. at 132–33. Yet, Ms. Li points out that Saunders 

v. Stevers, 221 Cal. App. 2d 539, 540 (Cal. Dist. Ct. App. 

1963), appears to contravene Pimentel. In that case, the 

insured sent an informal letter to the insurance company 

expressing her desire to change her beneficiary designation. But the insurance company did not find this letter 

sufficient to change the prior designation and sent the insured the appropriate forms. After receiving these forms, 

the insured did not immediately complete the forms or return them to the insurance company, and she died before 

returning the forms. The California District Court of Appeals determined that the designation had been changed, 

stating that the insured’s “acts were sufficient” to change 

the beneficiary designation because she exercised her

“broad right to change beneficiary by notice in writing 

given to the company.” Saunders, 221 Cal. App. 2d at 541. 

In its decision, the court stated that “[w]here, as here, the 
LI v. DOJ 9

company makes no contest but interpleads the contesting 

beneficiaries and pays the proceeds of the policy into court, 

a liberal rule obtains and courts of equity seek to do that 

which the insured intended.” Id. at 542. 

The Saunders opinion is unclear regarding the role interpleader played in the analysis. But the Ninth Circuit in 

Manhattan Life Insurance v. Barnes determined that 

Saunders did not conflict with the governing standard in

Pimentel because Saunders merely discussed the effect of 

an interpleader in the context of the third Pimentel exception rather than the first. 462 F.2d 629, 632 (9th Cir. 1972). 

We agree with the Ninth Circuit’s reasoning. As such, the 

BJA correctly interpreted and applied California law when 

determining that the insurance company did not waive 

strict compliance.

This leaves Ms. Li’s arguments regarding the third exception. Under the third exception, a claimant must show 

that the insured “pursued the course pointed out by the [insurance company], and has done all in his power to change 

the beneficiary.” Pimentel, 57 P.2d at 133. California law 

has since interpreted this to mean that the insured must 

make “every reasonable effort under the circumstances” to 

properly change the beneficiary designation. See Manhattan Life Ins., 462 F.2d at 633; West Coast Life Ins. v. Clarke, 

24 F. Supp. 3d 933, 939–40 (C.D. Cal. 2014). We are unaware of any case that has granted the claimant a change of 

designation under this exception where the insured never

contacted (or attempted to contact) someone at the insured’s place of work or at the insurance company to indicate a desire to change the insurance policy’s designated 

beneficiary. Interpleader or a threat of interpleader may 

indeed lower the threshold for whether a particular action 

constitutes “every reasonable effort under the circumstances” to change a beneficiary designation. See Manhattan Life Ins., 462 F.2d at 633. But it was reasonable under 

the circumstances here for the BJA to find that the insured 

must first make some attempt to change the beneficiary 
10

designation, or there is nothing that can qualify as “every 

reasonable effort under the circumstances” to make that 

change. 

Substantial evidence supports the BJA’s determination 

that Deputy Collier never attempted to contact anyone at 

the insurance company or the County about changing the 

designation for his life insurance. Li, No. 2011-016, at 18 

n.57. During the proceeding, the BJA asked the County if 

“there [was] any email correspondence with Sheriff Collier 

regarding beneficiary designations?” J.A. 2072. The

County responded “No, we have no email correspondence 

on file regarding Sheriff Collier’s beneficiary designations.” 

Id. Ms. Li contends that these responses were deficient, 

and that she is therefore entitled to further discovery. But

Ms. Li has not identified any evidence or basis that suggests the County’s response was somehow deficient. It was 

therefore proper for the BJA to weigh this evidence to determine that Deputy Collier had not contacted the County 

about changing his beneficiary designation. 

Ms. Li also asserts that Deputy Collier attempted to 

change his life insurance beneficiary designation when he 

changed his retirement benefits and worker’s compensation. She argues that the testimonies of Deputy Collier’s 

family and friends show that Deputy Collier believed he 

had changed his beneficiary designation. The BJA found 

to the contrary, however, based at least in part on Deputy 

Collier’s continual ratification of the designations in his life 

insurance policy, thereby indicating his intent to not 

change the life insurance designation. Our appellate function is to review BJA findings deferentially under the substantial evidence standard. A decision is supported by 

substantial evidence when it is based on “such relevant evidence as a reasonable mind might accept as adequate to 

support a conclusion.” Consol. Edison Co. v. NLRB, 305 

U.S. 197, 229 (1938). Here, there is enough evidence for a 

reasonable mind to reach the BJA’s conclusion that Deputy 

Collier’s actions did not rise to “every reasonable effort” to 
LI v. DOJ 11

properly change his beneficiary designation. Consolo v. 

Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966); Viet I-Mei 

Frozen Foods Co. v. United States, 839 F.3d 1099, 1106 

(Fed. Cir. 2016). Because the BJA reasonably found that 

the third exception was not met, the BJA was therefore required to adhere strictly to the terms of the life insurance 

policy. 

The terms of the insurance policy state that “You must 

name or change Beneficiaries in writing. Writing includes 

a form signed by you or a verification from the Policyholder 

or Employer of an electronic or telephonic designation 

made by you. Your designation . . . [m]ust be delivered to 

the Policyholder or Employer during your lifetime.” J.A. 

202–03. The only writings of record are the 1997, 2003, 

2006, and 2007 beneficiary designations. These writings 

clearly indicate that Deputy Collier’s mother was his primary beneficiary and that Ms. Stamp was his contingent

beneficiary. See J.A. 1451. As a result, the BJA’s determination that Ms. Li was not designated as a beneficiary in 

Deputy Collier’s life insurance policy under 35 U.S.C. 

§ 10281(a) and 28 C.F.R. § 32.13 was not arbitrary or capricious and was supported by substantial evidence. 

CONCLUSION

For the foregoing reasons, the BJA’s denial of benefits 

to Ms. Li under the PSOBA is 

AFFIRMED

No costs.