UNITED STAT ES DIS TRICT COURT F OR THE DIS TRICT OF COLUM BIA

RICHARD LUBOW, et al. P laintif fs, v. Civil Action No. 10-0510 (JD B) UNITED STAT ES DEPARTMENT OF STATE , et al. Defendan ts.

MEMORAN DUM OP INION & ORDER Richard L ubow, J oseph B opp, David B ennett, F rank B eneve nto and J ames L andis, ea ch a

curr ent or re tired member of the State Department' s Bur eau of Diplomatic Security , "de ploy [ed] to Iraq [as F oreign Service Specialists] in support of State' s attempt to establish a diplomatic prese nce in Iraq, a fter the fall of Saddam Hussein' s reg ime." Pls.' Mem. in Supp. of Mot. for Summ. J . (" Pls.' Mem." ) [Docket Entry 19], at 1. W hile deploy ed, plaintiffs we re e ligible f or both basic pay

-- c ompensation for a

forty -hour wor

k wee k -- a

nd premium pay

-- ove rtime, compensatory

time off, and holiday

premium pay . See, e.g ., Administrative Record of Fr ank Be nevento ( "F BA R"), 67- 68 (Explanation of Be nefits). At issue in this action are a lleg ed sala ry 1 overpa y ments made to plaintiffs for their work in I

raq in 2004. Fe dera l law establishes the a g g reg ate amount of basic pay and pre mium pay

an employee may rec eive. Unde r 5 U.S.C. § 5547(a), a n employee' s ag greg ate of basic pa y plus premium pay

The State De partment ha s produce d the administrative re cord in seve ral volumes, 1 including se parate volumes for materials re lating to e ach pla intiff, and a sing le, g ener al volume for r emainingmateria ls. Many of the re cords in the va

rious volumes are substantively identical and ther efor e, whe re a

ppropriate , the Court has cited to only one of the volumes.for a

ny biweekly pay period c annot exceed the g reater of " the maxim um rate of basic pa y payable for GS-15 ( including a

ny applicable locality -base d compar ability pay ment)" or " the rate payable for leve l V of the Executive Schedule ." B eca use a pa rticular e mploy ee' s basic pay is consistent for e ach pa

y period, sec tion 5547(a) e stablishes a ca p on the amount of pre mium pay that an employ ee c an ea

rn. Ne verthe less, wher e an a g ency deter mines that there is a

n emer g ency

that "involves a

direc t threat to life or

proper ty ," the ag ency

may waive the biweekly

pay cap a nd instead apply

an annua l cap on c ompensation. 5 U.S.C. § 5547(b)(1). The State De partment 2 conclude d that the war

in Iraq a nd its aftermath qualified as suc h an eme rg ency . See, e.g ., Administrative Record ( "A R"), 29 ( L andis L etter Reg ardingOver pay ment) (" The ong oing response to the September 11 te rror ist attacks and the w ar in Iraq ha ve ea ch bee n deeme d to constitute such an e merg ency .") . In such circ umstances, a n employ ee' s ag greg ate pa y for a cale ndar year

cannot e x cee d the g rea

ter of " the maxim um rate of basic pa y payable f or GS-15 in eff ect at the end of suc h cale ndar year (includingany

applicable locality -base d compar ability pay ment)" or " the rate payable f or leve l V of the Executive Schedule in effe ct at the e nd of such cale ndar year ." 5 U .S.C. § 5547(b)(2). 3 Plaintiffs init ially

deploy ed to Iraq in De cembe r 2003. At that time, plaintiffs' pay cap Waiving the biwe ekly

cap pe rmits employ ees to " work more overtime hours." See 2 Def s.' Mem. in Supp. of Mot. for Summ. J . (" Def s.' Mem." ) [Docket Entry 21], at 2 n.3. Acc ordingto the Offic e of Per sonnel Manag ement, which pr omulgated re gulations 3 interpre ting se ction 5547(b), a n ag ency must use the GS-15 or Executive Schedule level V r ate "in e ffe ct on the last day

of the c alenda

r y ear " to de termine a

n employ ee' s pay

cap. 5 C.F .R. § 550.106(c) ; see a lso 69 Fed. Reg . 55,941, at 55,941 (Sept. 17, 2004) ( "Ag eog raphic move to an are a with diffe rent pa

y rate s can r aise or lowe r an e mploy ee' s ag g reg ate ba sic pay and the end-of -y ear annual c ap on pre mium pay . In turn, a c hang e in ag greg ate ba sic pay or the end-of -y ear cap c an cha

ng e re troac tively

the date on which an e mploy ee r eac hed the a nnual premium pay

cap." ). -2-was $130,305 -- the sum of the maximum rate of pay for a GS-15, $113,674, and the a pplicable locality based c ompara

bility pay ment for the D istrict of Columbia. See, e.g ., AR at 84 (June 22, 2005 L andis Boa

rd of Contrac t Appeals De cision). Plaintiffs had a D istrict of Columbia pay cap beca use, although they

wer e deployed in Iraq, the y wer e on tempora

ry duty status, which re quires the State Depa

rtment to apply

the District of Columbia pay cap. See , e.g ., AR at 340 (Jul y 28, 2008 L andis For eig n Service Grieva nce B oard D ecision). I

n J uly 2004, the State Depa

rtment established the ne w United States Embassy in Ba g hdad, and pla intiffs were transfe rre d to a perma nent duty assig nment in Iraq. See id. This transfer reduc ed plaintiffs' pay

cap to $128,200. See id. at 341. This is so beca use there are no locality

based c ompara

bility pay ments available for ove rsea s locations. See June 22, 2005 L andis Boa rd of Contrac t Appeals De cision at 84. Acc ording ly , plaintiffs' pay cap w as the $128,200 maximum available under le vel V of the Ex ecutive Sche dule, which wa s g rea ter than the $113,674 maxi mum available f or GS-15. See, e.g ., id. Be cause of this immediately -ef fec tive reduc tion in plainti ffs' annual pa y cap, the State Depa rtment advised plaintiffs in Nove mber 2004 that their " ear nings a pplicable towa

rd the 2004 premium pay

cap ha ve alr eady

or could shortly

put y ou above the cap f

or the c urre nt pay

y ear ." AR at 316 (Nov. 24, 2004 Ema il to R ichar d Lubow). The Depa rtment also indicated that "[i] f such pay ments are made e rrone ously , the Depa rtment is obligate d to seek c ollection of such overpa y ments." I d. In April 2005, the State De partment notified plaintiffs that eac h of them had been ove rpaid be cause eac h had excee ded his pay cap f or 2004. See, e .g ., AR at 29 (Apr . 27, 2005 L etter to L andis Reg arding Over pay ment). The D epar

tment theref

ore r equeste d that plaintiffs repa

y their debt, but indicate d that they had " the right to request either an interna l

-3-administrative re view or a hear ing c onducted by

a non-D epar

tment of State offic ial with respec t to the exis tence of the de bt, the amount of the de bt, or the re pay ment schedule ." I d. Eac h plaintiff ava iled himself of this opportunity . Fr ank B eneve nto sought interna l revie w, and De puty

Assistant Secreta

ry of State James Mill ete c oncluded that B eneve nto had been ove rpaid a

nd there fore owed a

valid debt. See F BA R at 25-27 (Aug . 30, 2005 Millete Dec ision). The re maining pla intiffs, Richard L ubow, J oseph B opp, David B ennett, and James L andis, soug ht ext erna l reviewby the Gene ral Servic es Administration' s Boa rd of Contrac t Appea ls. I n substantively identical dec isions, the Boar d upheld the State De partment' s deter mination that plaintiffs had bee n overpa id. See, e.g ., J une 22, 2005 L andis Boa rd of Contract Appe als Dec ision at 89. Eac h plaintiff then re quested that the State D epar tment waive his indebtedne ss pursuant to 5 U.S.C. § 5584. S ee, e .g ., AR at 34 (L andis Request for Waiver). That statute permits an ag ency to waive c ollection of er

roneous pa

y ments made to a pa

rty , wher e collec tion "would be ag ainst equity

and g ood conscie nce a

nd not in the best interest of the United States." 5 U .S.C. § 5584(a) . The De partment de clined to do so. See AR at 404 ( J an. 7, 2010 Opinion of the F oreig n Service Grieva

nce B oard) . The F oreign Service Grieva nce B oard initially

overturne d a dec ision by the State Depa

rtment denying w aiver , and re manded the r equest to the State De partment. See id. On rema

nd, the Depa

rtment once ag ain found wa iver inappr opriate, a nd the B oard uphe ld that decision. See id. Plaintiffs then broug ht this action. They challeng e, as c ontrary

to 5 U.S.C. § 5547 and the Offic e of Per sonnel Manag ement' s regulations, Deputy Assistant Secreta

ry of State Millete' s and the B oard of

Contract Appe als' s decisions that they owed a valid debt. And they

contend that the

-4-For eig n Service Grieva nce B oard a cted a

rbitrar ily and abuse d its discretion in denying the ir reque sts for a wa iver of inde btedness. B efor e the Court ar e the pa rties' cross-motions for summary judgme nt on these issues. The Court will not reac h plaintiffs' substantive challeng es. Where " an interve ning e vent may aff ect the va lidity

of the a g ency

action at issue, a

rema nd is ge nera lly

require d." Sier

ra Club v. Van Antwe rp, 560 F . Supp. 2d 21, 23 (D.D.C. 2008); ac cord Ethy l Corp. v. Browner, 989 F .2d 522, 524 (D.C. Cir. 1993); see a lso Cit izens Aga inst the Pelli ssippi P arkw ay Ex tension, Inc. v. Mineta, 375 F .3d 412, 416 (6th Cir. 2004) (it may be " an abuse of discre tion to prevent an a g ency from ac ting to cur e the ve ry leg al def ects a sserted by

plaintiffs cha lleng ing f

eder al ac tion"); c f. Fl. Power & L ight Co. v. L orian, 470 U.S. 729, 744 (1985) (" I f the re cord be fore the ag ency does not support the ag ency

action, if the a g ency

has not consider ed all re levant fa ctors, or if the revie wingcourt simply

cannot e valuate the challeng ed ag ency action on the ba sis of the rec ord befor e it, the prope r cour se, except in rar e cir cumstance s, is to remand to the ag ency for additional investigation or expl anation." ). He re, the re is just such an inter veningevent. In 2005, Congr ess passed the Emerg ency Supplemental Appropriations Act for De fense , the Global War on Te rror , and Tsunami Relief of 2005 (" Appropria

tions Act of 2005" ), Pub. L

. No. 109-13, 119 Stat. 231 (2005). In section 1008 of the A ct, Cong ress pe rmitted fede ral ag encie s to waive sec tion 5547's fe dera l pay cap f or ce rtain fe dera l employ ees dur ing c alenda r y ear 2005, up to a maxim um of $200,000. See Appr opriations Act of 2005, 119 Stat. 231, 243 (" Duringcale ndar year

2005 . . . the hea d of an Executive a g ency may waive the limit ation, up to $200,000, established in [5 U.S.C . § 5547] for total compensation, includinglimit ations on the ag g reg ate of

basic pa y and pre mium pay

payable in a c alenda

r y ear . . . .") . Pursuant to the Act,

-5-the State Depa rtment waive d the " limit ation, up to $200,000, on the ag g reg ate of basic pa y and premium pay

payable in ca lendar

y ear 2005 for e mploy ees w orkingin Iraq a nd Afghanistan." AR at 184 (Aug . 19, 2005 State Depa rtment Cable). And the Depa rtment applied this pay

cap waiver "to a ll premium pay

ear nings pa y able in ca lendar

y ear 2005, e.g . for wor

k perf ormed in pay period 25 of 2004 (pay

date January

8, 2005)." I d. at 184-85. By its plain terms, then, the State Depa rtment' s pay

cap w aiver

applied not just to work done during2005, but also to work done dur ing pa y period 25 of 2004. Y et neither the State Depa rtment nor the B oard of

Contract Appe als consider ed the e ffe ct of this waiver of plaintiffs' purported de bts. The B oard of Contract Appe als issued its decision confirmingthe debts of Richard L ubow, J oseph B opp, David B ennett, and James L andis prior to the State De partment' s waiver in August 2005. See, e.g ., J une 22, 2005 L andis Boa rd of Contrac t Appeals De cision at 84. And althoug h Deputy Assistant Secreta

ry of State Millete issued his decision af ter the State Depa rtment' s pay

cap w aiver

took effe ct, the dec ision does not discuss the pay cap w aiver

at all. Perhaps the State D epar

tment could conclude that the waive r either aff ects the f act or the amount of plaintiffs' debts. Perhaps not. B ut it is not for the Court to conduc t "a de novo inquiry

into the matter be ing r eviewe d and . . . re ach its own c onclusions based on such a n inquiry ." F l. Power & L ight Co., 470 U.S. at 744. Rather , beca use there is no evidence in the rec ord that the State Depa rtment consider ed how the 2005 pa y cap w aiver

aff ects plaintiffs' debts based on 2004 overpa y ments, "the proper

course . . . is to remand to the ag ency for a dditional investigation or explanation." I d. 4

The re cord doe s not indicate, for example, whether , notwithstanding the f act that it was 4 cover ed by

the 2005 pay

cap w aiver , the State Depa rtment included plaintiffs' pay period 25 ear nings when ca lculatingplaintiffs' 2004 overpa y ments. Nor does it show how much mone y -6-The State De partment ra ises two challeng es to plaintiffs' argument that the pay cap waiver require s the Depa

rtment to rec alculate their over pay ments. First, it contends that it cannot

rec ompute eac h plaintiff' s entire sa lary for 2004 pur suant to the waive r bec ause this would be " in direc t contrave ntion of the languag e of the 2005 Premium Pay Cap Waiver as w ell as Congr essional intent in enac ting Public L aw 109- 13." D efs.' Mem. at 25. This may be so, but it is of no moment. Even if the wa iver doe s not apply to all of plaintiffs' 2004 salary , it does apply , by its plain terms, to work perf ormed duringpay

period 25 of 2004. H ence , the State Depa rtment, at the lea st, must evaluate whe ther a nd how the wa iver a ffe cts any overpa y ments made to plaintiffs duringpay period 25. Second, the State De partment a rgues that L andis, Be nnett, Bopp, a nd Lubow ca

nnot raise the pay cap w aiver

issue with this C ourt. Plaintiffs sought e x terna l reviewof the va lidity of their debt with the B oard of

Contract Appe als, but did not seek furthe r administrative re view of that decision bef

ore the For eig n Service Grieva nce B oard. N or, ac cordingto the State Depa rtment, could they . See De fs.' Mem. at 25 (c iting 22 U.S.C. § 4139 (" A g rieva nt may not file a grieva

nce with the [Foreig n Service Grieva nce] Boa rd if the grieva

nt has forma lly

reque sted, prior to filing a g rieva nce, that the matter . . . be considere d or re solved and re lief be pr ovided under another provision of law, re gulation or Executive Orde r." )). And in the State D epar tment's vie w, bec ause those plaintiffs could not ra ise the validity of their de bt with the Fore ign Ser vice Gr ievanc e Boa rd, they "c annot cha lleng e the de termination of the pr oper pa y cap he re" as par

t of their challeng e to the F oreign Service Grieva nce B oard' s decision. Def s.' Replyin Supp. of Crossplaintiffs' rec eived in pay period 25 that wa s in ex cess of the statutory

cap. Such inf

ormation would be nec essar

y for the Court to eva luate the e ffe ct of the pa y cap w aiver

on plaintiffs' debts. -7-Mot. for Summ. J . (" Def .' s Reply ") [Docket Entry

25], at 7. But L andis, Be nnett, Bopp, a nd Lubow also sepa

rate ly challeng e the va lidity

of the B oard of Contrac t Appeals de cision in this action. And it is undisputed that the Boa rd did not consider the Depa rtment' s pay

cap w aiver

when a djudicatingthe validity of plaintiffs' debt. The pa y cap waiver was a n interveningevent that may aff ect the va lidity

of the B oard' s decision. This is sufficie nt to require a

rema nd. See Sierra

Club, 560 F. Supp. 2d at 23. As the Court indicated, 5 this does not mean that plaintiffs will preva il on their argument. But that is a de cision that this Court cannot make in the first instance. See Fl. Power & L ight Co., 470 U.S. at 744. There fore , upon consideration of the parties' cross-motions for summar y judgme nt, the parties' sever al memora

nda, and the entire r ecor d here in, and for the fore g oing r easons, it is here by ORDERED that plaintiffs' motion is GR ANTED in p art ; and it is further ORDERED that the dec isions of Deputy Assistant Secreta

ry of State Millete and the Boa rd of Contrac t Appeals that plaintiffs owe a valid debt a re REMAND ED to the State Depa rtment and the B oard of

Contract Appe als, respe ctively , for a dditional consideration in light of the De partment' s August 2005 waiver of the pre mium pay

cap, which the De partment ha s applied to ea

rning s for wor

k perf ormed in pay

period 25 of 2004. SO ORDERED

. Although quite opa que, the State Department a rguably contends in its reply

that L andis, 5 Be nnett, Bopp, a

nd Lubow simply

cannot br ing a

separ ate c halleng e to the B oard of Contract Appea ls decision in this action. See Def .' s Reply at 7. B ut to the ext ent it makes this argument, it offer s no support for it. And, in any event, c ourts may

revie w " final ag ency

action for

which there is no other ade quate r emedy ." 5 U .S.C. § 704. Here, the State D epar tment argues that the Boa rd of Contrac t Appeals de cision was a f inal ag ency

action. See D ef.' s Reply at 7-8. -8-/s/ J ohn D. B ates J OHN D. B ATES United States District J udg e

Date: August 10, 2010

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