Court Opinion

ID: 3066521
Source: CourtListenerOpinion
Date Created: 2015-10-15 02:04:56.169956+00
Date Added: 2024-06-11T12:05:03.341455
License: Public Domain

United States Court of Appeals for the Federal Circuit

                                04-3071

                             LINDA A. BUIE,

                                                   Petitioner,

                                   v.

                    OFFICE OF PERSONNEL MANAGEMENT,

                                                   Respondent.

      Linda A. Buie, pro se, of Kyle, Texas.

       Michael  S.  Dufault,  Trial  Attorney,  Commercial   Litigation
Branch,  Civil  Division,  United  States  Department  of  Justice,  of
Washington, DC, for respondent.  With him on the brief  were  Peter  D.
Keisler, Assistant Attorney General;  David  M.  Cohen,  Director;  and
Bryant G. Snee, Assistant Director.

Appealed from:  United States Merit Systems Protection Board

         United States Court of Appeals for the Federal Circuit

                                04-3071

                             LINDA A. BUIE,

                                                   Petitioner,

                                   v.

                    OFFICE OF PERSONNEL MANAGEMENT,

                                                   Respondent.

                       __________________________

                                             DECIDED:  October 12,
2004
                       __________________________

Before RADER, LINN, and DYK, Circuit Judges.

LINN, Circuit Judge.
      Linda A. Buie (“Buie”) appeals from a final decision of the Merit
Systems Protection Board  (“Board”),  affirming  the  decision  of  the
Office of  Personnel  Management  (“OPM”)  calculating  the  amount  of
Buie’s deposit contributions to be made under  the  provisions  of  the
Civil Service Retirement System (“CSRS”).   Buie  v.  Office  of  Pers.
Mgmt., 94  M.S.P.R.  595  (2003)  (No.  DA-0831-02-0096-I-1).   Because
Buie’s  service  was  not  “covered  service”  as  defined  by  section
203(a)(3) of the Federal Employees’ Retirement  Contribution  Temporary
Adjustment Act of 1983 (“FERCTAA”) and she  is  thus  not  eligible  to
claim the reduced deposit rate contained  in  5  U.S.C.  § 8334(c),  we
affirm.
                               BACKGROUND
      Buie was employed by the Internal Revenue  Service  (“IRS”)  from
January 20, 1969 to September 14, 1984.   Buie,  94  M.S.P.R.  at  596.
She later applied  for,  and  received,  a  refund  of  her  retirement
contributions of $13,411.96 for that period of her service.  Id.   Buie
was reemployed by the IRS from January 24, 1994 to July 19, 1994.   Id.
 From August 6, 1994 to December 24,  1994,  Buie  worked  as  a  Rural
Carrier Relief  for  the  U.S.  Postal  Service  (“USPS”).   Id.   From
December 24, 1994 to July 17, 1999, Buie  worked  for  the  USPS  as  a
Rural Carrier Associate.  Id.  Buie’s service from January 24, 1994  to
July  17,  1999  was  considered  non-contributory  service,  and  CSRS
deductions were not taken from her pay.  Id.
      Buie  later  applied  to  OPM   to   redeposit   her   retirement
contributions for her periods of service between  1969  and  1984,  and
for a further deposit for her non-deduction periods of service  between
1994  and  1999.   Id.   OPM  sent  Buie  a  bill  for   redeposit   of
contributions for  $46,341.00  ($13,411.00  redeposit  plus  $32,930.00
interest), and deposit of contributions  in  the  amount  of  $8,498.00
($6,560.00 deposit and $1,938.00 interest).  Id.  Buie  disagreed,  but
OPM determined that its calculations were correct.  Id. at 596-97.
      Buie appealed OPM’s decision.  In an initial decision, the  Board
found that  OPM  correctly  calculated  the  amount  of  redeposit  and
interest for Buie’s  service  between  1969  and  1984.   Id.  at  597.
However,  the  administrative  judge  found  that  OPM  had  improperly
calculated the amount  of  deposit  and  interest  for  Buie’s  service
between 1994 and 1999, holding that OPM had improperly  relied  on  the
basic pay rate in 5 U.S.C. § 8334(c) instead of the rate  in  5  U.S.C.
§ 8334(k).  Id.
      OPM filed a petition for review of the Board’s initial  decision.
Id.  In a final decision, the Board  reversed  the  initial  decision’s
holding regarding the deposit for Buie’s 1994 to 1999 service,  holding
that Buie did not fall  within  the  reduced  deposit  exception  of  5
U.S.C. § 8334(c).  Id. at 602.
      Buie appealed the Board’s deposit determination  to  this  court.
We have jurisdiction from an appeal of a final decision  of  the  Board
pursuant to 28 U.S.C. § 1295(a)(9).
                                ANALYSIS
                         A.  Standard of Review
      “Our scope of review in an appeal from a decision of the Board is
limited.  Specifically, we must affirm the Board’s decision  unless  we
find it to  be  arbitrary,  capricious,  an  abuse  of  discretion,  or
otherwise not in  accordance  with  law;  obtained  without  procedures
required  by  law,  rule,  or  regulation  having  been  followed;   or
unsupported by substantial evidence.”  Abell v. Dep’t of the Navy,  343
F.3d 1378, 1382-83 (Fed. Cir. 2003); 5 U.S.C. § 7703(c) (2000).
      “The petitioner bears the burden of  establishing  error  in  the
Board’s decision.”  Harris v.  Dep’t  of  Veterans  Affairs,  142  F.3d
1463, 1467 (Fed. Cir. 1998).
                       B.  The Parties’ Arguments
      The parties dispute what basic pay rate under 5 U.S.C.  § 8334(c)
applies to Buie’s deposit for her service between 1994 and 1999.   Buie
argues that she should not be subject to the deposit rate set forth  in
section 8334(c) for her non-deduction service because her  service  was
“covered service” under  the  FERCTAA  exception  in  section  8334(c).
According to Buie, to hold otherwise  would  render  section  8334(c)’s
exceptions a nullity.
      The Government, representing OPM, responds  that  Buie’s  service
was not “covered service” as defined by section 203(a)(3)  of  FERCTAA.
The Government argues that under the plain  language  of  section  203,
the Board correctly concluded  that  “covered  service”  included  only
federal employees that were made subject to  Social  Security  coverage
for the first time by section 101 of the Social Security Amendments  of
1983, Pub. L. No. 98-21, 97 Stat. 65,  67-68  (codified  at  42  U.S.C.
§ 410).   The  Government  argues  that  under  Taxera  v.  Office   of
Personnel Management,  95  M.S.P.R.  97  (2003)  (“Taxera  II”),  these
employees include members of  Congress,  congressional  employees,  the
President and Vice-President,  officers  serving  under  the  Executive
Schedule at 5 U.S.C. §§ 5312-5317, non-career Senior Executive  Service
or Senior Foreign Service employees, Article I and Article III  judges,
and all other federal employees not subject to CSRS because  they  were
subject  to  a  different  federal  employee  retirement  system.   The
Government contends that the specific  language  in  section  203(a)(3)
referring to employees who were subject to Social Security  “by  reason
of” amendments enacted by Pub. L. No. 98-21 excludes federal  employees
that were not covered by CSRS, but  were  covered  by  Social  Security
under provisions in effect prior to the enactment of Pub.  L.  No.  98-
21.  The Government argues that the legislative history  is  consistent
with this interpretation.
                            C.  The Statute
      Section 8334(c) provides:
      Each employee or Member credited with civilian service after July
      31, 1920, for which retirement deductions or  deposits  have  not
      been made, may deposit with  interest  an  amount  equal  to  the
      following  percentages  of  his  basic  pay  received  for   that
      service . . . .

5 U.S.C.  § 8334(c)  (2000).   Section  8334(c)  provides  a  table  of
“percentage of basic pay rates” for various government  positions.   It
provides a 7% basic pay rate for “Employee”  service  from  January  1,
1970 to December 31, 1998, and a 7.25% rate for  service  from  January
1, 1999 to December 31, 1999.  Id.
      However, section 8334(c) contains an exception that  provides  an
alternate contribution of the percentage of basic pay:
      Notwithstanding the preceding provisions of this  subsection  and
      any provision of section  206(b)(3)  of  the  Federal  Employees’
      Retirement  Contribution  Temporary  Adjustment   Act   of   1983
      [(“FERCTAA”)], the percentage of basic pay  required  under  this
      subsection in the case of  an  individual  described  in  section
      8402(b)(2) shall, with respect to any covered service (as defined
      by section 203(a)(3) of such Act) performed  by  such  individual
      after December 31, 1983, and before January 1, 1987, be equal  to
      1.3 percent, and, with respect  to  any  such  service  performed
      after December 31, 1986, be equal to the amount that  would  have
      been deducted from the employee’s basic pay under subsection  (k)
      of this section if the employee’s pay had been  subject  to  that
      subsection during such period.

Id. (emphases added).  This exception allows employees described  under
section 8402(b)(2) to contribute a different percentage  “with  respect
to any covered service” as defined by  section  203(a)(3)  of  FERCTAA.
Id.
      Section 203(a)(3) of FERCTAA provides a  definition  of  “covered
service”:
      the term “covered service” means service which is employment  for
      the purposes of Title II of the Social Security Act  and  chapter
      21 of the  Internal  Revenue  Code  of  1954  by  reason  of  the
      amendments made by section 101 of the Social Security  Amendments
      of 1983 (97 Stat. 67) . . . .

Federal Employees’ Retirement Contribution Temporary Adjustment Act  of
1983, Pub. L. No. 98-168, § 203(a)(3), 97 Stat.  1106,  1107  (codified
at 5 U.S.C. § 8331, note).
      Section 101(a) of the Social Security Amendments struck  out  the
existing paragraphs (5) and  (6)  defining  types  of  federal  service
excluded from the term “employment” and “insert[ed]  in  lieu  thereof”
new paragraphs (5) and (6) defining different types of federal  service
excluded from the term “employment.”   Social  Security  Amendments  of
1983, Pub. L. No. 98-21, § 101(a), 97 Stat.  65,  67  (codified  at  42
U.S.C. § 410(a)(5)-(6)); see also Knudtson v. Office  of  Pers.  Mgmt.,
59 M.S.P.R. 627, 631 (1993).
      In what has been termed “an exception to the  exception,”  United
States v. Hatter, 532 U.S. 557, 563 (2001), new paragraph (5)  provided
the following provisions:
      except that this paragraph shall not apply with respect to—
        (i) service performed as the President or  Vice  President  of
        the United States,
        (ii) service performed—
           (I) in a position placed in the  Executive  Schedule  under
           sections 5312 through 5317 of title 5, United States Code,
           (II) as a  noncareer  appointee  in  the  Senior  Executive
           Service  or  a  noncareer  member  of  the  Senior  Foreign
           Service, or
           (III) in a position to which the individual is appointed by
           the President (or his designee) or the Vice President under
           section 105(a)(1), 106(a)(1), or  107(a)(1)  or  (b)(1)  of
           title 3, United States Code, if the maximum rate  of  basic
           pay for such position is at or above the rate for  level  V
           of the Executive Schedule,
        (iii) service performed as the Chief  Justice  of  the  United
        States, an Associate Justice of the Supreme Court, a judge  of
        a United States court of appeals, a judge of a  United  States
        district court (including the district court of a  territory),
        a judge of the United States Claims  Court,  a  judge  of  the
        United States Court of International Trade,  a  judge  of  the
        United States Tax Court, a  United  States  magistrate,  or  a
        referee in bankruptcy or United States bankruptcy judge,
        (iv) service performed as  a  Member,  Delegate,  or  Resident
        Commissioner of or to the Congress, or
        (v) any other service in the legislative branch of the Federal
        Government . . . .

See  Social  Security  Amendments  of  1983,   Pub.   L.   No.   98-21,
§ 101(a)(1), 97 Stat. 65, 68 (codified at 42 U.S.C. § 410(a)(5)).
                      D.  Statutory Interpretation
      Under  section  8334(c),  “[a]n  employee’s  creditable  civilian
service after July 31, 1920, for which retirement deductions  have  not
been made, will not be included in computing the  amount  of  his  CSRS
annuity unless he makes a deposit, with interest,  for  such  service.”
Knudtson, 59 M.S.P.R. at 629 (citing 5 U.S.C. § 8334(c)  and  5  C.F.R.
§ 831.303).  Federal employees “may deposit with  interest”  an  amount
equal to a specified percentage of his or her basic  pay  received  for
that service.  5 U.S.C. § 8334(c)  (2000).   Pertinent  to  this  case,
that basic pay rate is 7% for any “Employee” service  from  January  1,
1970 to December 31, 1998, and 7.25% for service from January  1,  1999
to December 31, 1999.  Id.
      Buie argues that her service falls under the exception to section
8334(c), thus entitling her deposit to be calculated  under  the  lower
basic pay rate of 5  U.S.C.  § 8334(k)  enumerated  in  the  exception.
Under the plain language of section 8334(c), Buie is eligible to  claim
the lower basic pay rate  under  the  exception  if:   (1)  she  is  an
employee described under 5 U.S.C. § 8402(b)(2); and  (2)  the  relevant
period of her employment was “covered service” as  defined  by  section
203(a)(3) of FERCTAA.  5 U.S.C. § 8334(c) (2000); Buie, 94 M.S.P.R.  at
599; Knudtson, 59 M.S.P.R. at 630.  Neither party  disputes  that  Buie
is an employee described under 5 U.S.C. § 8402(b)(2), because Buie  had
performed five years of civilian service before January  1,  1987  that
was creditable under the CSRS.  See 5 U.S.C. § 8402(b)(2)(B) (2000).
      The  parties  principally  dispute  whether  Buie’s  service  was
“covered service” within the meaning of section 203(a)(3)  of  FERCTAA.
Under the plain language of  section  203(a)(3)  of  FERCTAA,  “covered
service” includes only federal service  that  became  “employment . . .
by reason of” the  amendments  to  the  Social  Security  Act  made  by
section 101 of the Social Security Amendments of 1983.  The “by  reason
of” language includes only categories  of  federal  service  that  were
brought within the meaning of “employment” because  of  the  amendments
in section 101 of the Social  Security  Amendments  of  1983,  and  not
because of other statutory  or  regulatory  provisions.   Knudtson,  59
M.S.P.R. at 630-31 (“We interpret [section 201(a)(3)] as covering  only
service that became ‘employment’ for the  stated  purposes  ‘by  reason
of,’ i.e., because of, the 1983 Amendments  and  not  covering  service
that was or became ‘employment’ for these  purposes  because  of  other
statutory or regulatory provisions.”).
      In a thorough analysis, the Board in Taxera II examined the  pre-
and post-1983 amendment paragraphs of  the  Social  Security  Act,  the
legislative history, and the Supreme Court precedent to  determine  the
effect of the statutory changes made  by  section  101  of  the  Social
Security Amendments of 1983.  See Taxera II,  95  M.S.P.R.  at  102-03.
In that analysis, the  Board  found  that  the  new  paragraph  (5)  of
section 210(a) of the Social Security  Act  exempted  certain  specific
categories of federal service  from  the  definition  of  “employment,”
including,  inter  alia,  the  President,  Vice-President,   non-career
Senior Executive Service, non-career Senior  Foreign  Service,  federal
judges, and certain legislative branch employees (“exempted  high-level
federal employees”).  Taxera II, 59 M.S.P.R. at 103 (quoting H.R.  Rep.
No. 98-25, at 39 (1983), reprinted in 1983 U.S.C.C.A.N. 219, 257);  see
also  Hatter,  532  U.S.  at  563  (discussing  the  class  of  federal
employees named in new paragraph (5)).
      The Supreme Court  recognized  that  the  amendments  seemed  “to
require this class of current  federal  employees  to  enter  into  the
Social Security program . . . .”  Hatter, 532 U.S. at  563  (citing  42
U.S.C. § 410(a)(5)(C)-(G)).  However,  for  these  exempted  high-level
federal  employees,  Congress  guaranteed  that  participation  in  the
Social Security system would not result in an  increase  in  deductions
from their basic pay.  See id.; see also  Taxera  II,  95  M.S.P.R.  at
103.
      Under this “exception to the exception,” section  203(a)(2)  said
that any exempted high-level federal employees  who  contributed  to  a
“covered”   retirement   program   nonetheless   could   modify   their
participation such that their  payroll  deduction  for  retirement  and
Social Security remained unchanged—a 7% deduction, at the time, and  no
more.  Hatter, 532 U.S. at 563.   The  exception  defined  a  “covered”
program to include the CSRS as well as any other program  to  which  an
employee must contribute.  Id.
      The  legislative  history  is  in  line   with   this   statutory
construction and recognizes that section 101  of  the  Social  Security
Amendments of 1983 brought these exempted high-level federal  employees
under Social Security for the first time.  The House Report explained:
      Section 101(a) of the bill provides Social Security coverage  for
      Federal employees hired on or  after  January  1,  1984  and  for
      certain current Federal employees including the  President,  Vice
      President, appointed Federal officials, Federal  judges,  members
      of Congress and legislative employees who are not covered under a
      federal retirement system.

      Section 101(a)(1) of the bill replaces paragraphs (5) and (6)  of
      section 210(a) of the Social Security Act with new paragraphs (5)
      and (6).  (The present paragraphs (5) and (6)  generally  exclude
      from  the  definition  of  Social  Security  covered   employment
      civilian service performed in the employ of the United States  or
      an instrumentality of the United States.)

                                 * * *

      The new paragraph (5) [of section 210(a) of the  Social  Security
      Act] does not  apply  to  service:   (1)  as  President  or  Vice
      President of the United States,  (2) in  a  position  established
      under sections 5312 through 5317 of title 5, United States  Code,
      as a noncareer appointee of the Senior  Executive  Service  or  a
      noncareer member of the Senior Foreign Service, or in a  position
      to which the individual is appointed by  the  President  or  Vice
      President under sections 105(a)(1), 106(a)(1),  or  107(a)(1)  or
      (b)(1) of title 3, United States Code, if  the  position's  basic
      pay is at or  above  the  rate  for  level  V  of  the  Executive
      Schedule;  (3) as a member  of  the  Supreme  Court,  [and  other
      federal  judges];   (4)  as  a  Member,  Delegate,  or   Resident
      Commissioner of or to the Congress;  or (5) as an employee of the
      legislative branch who is not covered  under  the  Civil  Service
      Retirement System as of January  1,  1984.   The  effect  of  not
      applying paragraph (5) to such service is that  such  service  is
      covered under Social Security beginning January 1, 1984.

H.R. Rep. No. 98-25, at 39 (1983) (emphasis added), reprinted  in  1983
U.S.C.C.A.N. 219, 257-58.
      Thus, the exception to new paragraph  (5)  added  by  the  Social
Security Amendments of 1983 specifically required these exempted  high-
level federal employees to participate in the Social  Security  program
while freeing them of any added financial obligation so  long  as  they
previously had participated in other contributory retirement  programs.
 See Hatter, 532 U.S. at  564;  Social  Security  Amendments  of  1983,
§ 101(a)(1), 97 Stat. 65, 67-68.  As the House Report  recognized,  the
exception to new  paragraph  (5)  brought  such  service  under  Social
Security coverage for the first time.   H.R.  Rep.  No.  98-25,  at  39
(1983), reprinted in 1983 U.S.C.C.A.N. 219, 258.  Thus, the service  of
only  these  exempted  high-level  federal  employees  became  “covered
service” “by reason of” section 101 of the Social  Security  Amendments
of 1983.
      Buie’s service was not “covered service” within  the  meaning  of
the exception to 5 U.S.C. § 8334(c).  Buie’s non-CSRS  service  between
January 24, 1994 and July 17, 1999 would have been  subject  to  Social
Security coverage under the provisions of the Social  Security  Act  in
effect before the enactment of the Social Security Amendments of  1983,
and therefore did not become “covered service”  “by  reason  of”  those
amendments.   See  5  U.S.C.  § 8334(c)  (2000);   Federal   Employees’
Retirement Contribution Temporary Adjustment Act of 1983, Pub.  L.  No.
98-168, § 203(a)(3), 97 Stat. 1106, 1107; Buie,  94  M.S.P.R.  at  602;
see also Taxera  II,  95  M.S.P.R.  at  101.   Buie  is  therefore  not
eligible for the reduced deposit rate exception in 5 U.S.C. § 8334(c).
                               CONCLUSION
      Because Buie’s service was not “covered service”  as  defined  by
section 203(a)(3) of FERCTAA, we affirm that Buie is not entitled to  a
reduced deposit rate contained in the exception to 5 U.S.C. § 8334(c).
                                AFFIRMED
                                 COSTS
      No costs.