Court Opinion

ID: 211326
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:26:13+00
Date Added: 2024-06-11T17:28:05.940307
License: Public Domain

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
                          is not citable as precedent. It is a public record.

 United States Court of Appeals for the Federal Circuit
                                            06-3047

                                    JAY B. SILVERSTEIN,

                                                                        Petitioner,

                                                  v.

                         OFFICE OF PERSONNEL MANAGEMENT,

                                                                        Respondent.
                             ___________________________

                             DECIDED: April 10, 2006
                             ___________________________

Before LINN, DYK, and PROST, Circuit Judges.

PER CURIAM.

        Jay B. Silverstein seeks review of the decision of the Merit Systems Protection

Board    (“Board”),   upholding   the    Office    of   Personnel   Management’s      (“OPM”)

determination that Silverstein’s disability retirement annuity should have been

terminated on June 30, 2000, and that Silverstein owed OPM $18,112.00 in

overpayments. We affirm.

                                        BACKGROUND

        Disability retirement is available to certain civilian service employees. 5 U.S.C. §

8337 (2000). However, under 5 U.S.C. § 8337(d), if an annuitant receiving disability

retirement is restored to “earning capacity” before the age of 60, then the annuity

payment terminates 180 days after the end of the calendar year in which earning

capacity was restored. “Earning capacity is deemed restored if in any calendar year the

income of the annuitant from wages or self-employment or both equals at least 80
percent of the current rate of pay of the position occupied immediately before

retirement.” Id.

       On October 20, 1979, Silverstein retired from his position of Distribution Clerk

with the United States Postal Service and received a disability retirement annuity until

November 30, 2001. On August 10, 2004, OPM determined that Silverstein had been

restored to earning capacity in 1999, because Silverstein reported wage earnings of

$41,948.00 on his 1999 federal income tax forms. The rate of pay for a Distribution

Clerk in 1999 was $38,614.00. Thus, Silverstein’s wage income in 1999 exceeded “80

percent of the [ ] rate of pay of the position [he] occupied immediately before

retirement.” 5 U.S.C. § 8337(d). OPM determined that Silverstein had been ineligible to

receive the annuity from July 1, 2000 through November 30, 2001 and that he was

overpaid $18,112.00 annuity benefits during that time.

       Silverstein appealed to the Board, arguing that although he reported wage

earnings of $41,948.00, he also reported loses of $34,868.16 from self employment

expenses in 1999. Thus, Silverstein asserted that his business losses should have

been subtracted from his wage income, resulting in a total income of approximately

$7,080.00.

       In an initial decision, the Administrative Judge (“AJ”) affirmed the OPM. The full

Board denied review. This petition for review followed. We have jurisdiction pursuant to

28 U.S.C. § 1295(a)(9).

                                        DISCUSSION

       Our review of disability determinations under the Civil Service Retirement System

is limited to determining whether “there has been a substantial departure from important

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procedural rights, a misconstruction of the governing legislation, or some like error

going to the heart of the administrative process.” Lindahl v. Office of Pers. Mgmt., 470

U.S. 768, 791 (1985) (internal quotation marks omitted).

                                             I

       Silverstein argues that OPM should have subtracted his self employment

expenses from his wage earnings when determining his “earning capacity.” However,

OPM’s regulations clearly state that for the purposes of determining “earning capacity,”

“[i]ncome earned as wages is not reduced by a net loss from self-employment.” 5

C.F.R. § 831.1209(c)(2) (2004).

       We approved OPM’s approach in Balick v. Office of Personnel Management, 85

F.3d 586 (Fed. Cir. 1996).        In Balick, the petitioner received both wages and

commissions while receiving a disability annuity.     Id. at 587.   OPM determined the

petitioner’s “earning capacity” under 5 U.S.C. § 8337 by including the entire amount of

his wages without deducting business expenses incurred in generating commissions

related to petitioner’s business. Id. at 588. On appeal, this court found that “[t]here is

no explicit statutory definition of ‘income . . . from wages or self-employment’ in section

8337.” Id. at 589 (ellipses in original). Given the ambiguity, we concluded that OPM’s

interpretation of what “wages” included under 5 U.S.C. § 8337 was reasonable and

entitled to deference.

       Silverstein attempts to distinguish Balick by arguing that Balick was based on

Internal Revenue Code provisions pertaining to business expenses as opposed to

business losses. On the contrary, in Balick we held that OPM was not required to rely

on the “taxable income” figure used for federal income tax purposes when determining

06-3047                                          3
“earning capacity.” 85 F.3d at 588-89. Balick explicitly permits OPM to treat income

from wages as separate and distinct from income from self employment. Losses from

the latter cannot offset income from the former.       We see no meaningful distinction

between Balick and this case and therefore affirm the Board’s decision in this respect.

                                             II

       On appeal, Silverstein also argues that the AJ improperly permitted OPM to

submit an exhibit after the telephonic hearing, thereby denying Silverstein his right to

cross-examine OPM on the contents of this exhibit.

       Prior to the hearing, OPM submitted a letter to the AJ indicating that it had

incorrectly calculated Silverstein’s annuity overpayment as $18,112.00, when it should

have been $18,102.00. After the hearing and at the AJ’s request, OPM made a second

submission, indicating that its initial calculation of $18,112.00 had been correct all along.

While it is true that this second submission occurred after the telephonic hearing,

Silverstein was copied on the submission, and Silverstein has failed to establish that

any error in considering it was harmful. See Guise v. Dep’t of Justice, 330 F.3d 1376,

1381-82 (Fed. Cir. 2003).      Silverstein does not, for example, contend that OPM’s

recalculation was incorrect.     Therefore, we find no reason to disturb the Board’s

decision.

       For the foregoing reasons, the Board’s decision is affirmed.

       No costs.

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