Opinion ID: 399822
Heading Depth: 2
Heading Rank: 2

Heading: Challenges to the Substantive Validity of OPM's Action

Text: 19 Although the District Court's injunction was based on its finding of a procedural violation-a finding we hold to be erroneous-appellees offer alternative grounds for upholding the injunction. First, they contend that, apart from the procedures followed by OPM, postponement of open season was arbitrary, capricious, and an abuse of discretion. Second, they assert that their 1981 contracts guaranteed an open season in November and December 1981. We are not persuaded by either contention. 20 When the substantive validity of an agency's informal action is challenged, the role of a reviewing court is limited. In light of the facts set forth above, we find that OPM's action was neither arbitrary, capricious, nor an abuse of discretion. Assessing the situation on November 6, OPM could not with any assurance have predicted when the courts would resolve the pending litigation regarding its benefit reductions, permitting it to establish the final terms of the 1982 plans. Nor could the agency have known, when it decided to postpone open season, how much time would be required to resolve the actuarial problems that threatened to trigger withdrawal of its largest health plan carrier. In these circumstances, OPM was not required on November 6 to set a definite future date for holding open season. 21 We also reject appellees' contract claims, because we agree with the District Court that appellees have misconstrued the contract provisions. Memorandum opinion at 4 n.1, JA 39. The health carriers' contracts incorporate the health benefit plan statute and the OPM regulations generally as terms of the contract, see, e.g., JA 416 (NTEU contract). However, this inclusion is qualified by the next subsection of the contract, which implicitly incorporates subsequent amendments to OPM regulations unless they would increase the carrier's liability. JA 417. As the District Court found, appellees have not demonstrated that the interim rule amending the open season regulation would increase the liability of any appellee carrier. Thus OPM did not breach any contract by postponing the 1981 open season. 22