Court Opinion

ID: 4551270
Source: CourtListenerOpinion
Date Created: 2020-07-27 16:00:31.45932+00
Date Added: 2024-06-11T13:01:44.941246
License: Public Domain

Case: 19-2376    Document: 45     Page: 1   Filed: 07/27/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                   NATALIE GREEN,
                      Petitioner

                             v.

      OFFICE OF PERSONNEL MANAGEMENT,
                    Respondent
              ______________________

                        2019-2376
                  ______________________

    Petition for review of the Merit Systems Protection
 Board in No. CH-0845-18-0576-I-1.
                 ______________________

                  Decided: July 27, 2020
                  ______________________

    NATALIE GREEN, Maywood, IL, pro se.

     SONIA MARIE ORFIELD, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, for respondent. Also represented by ETHAN P.
 DAVIS, REGINALD THOMAS BLADES, JR., ROBERT EDWARD
 KIRSCHMAN, JR.; ROXANN SAMANTHA JOHNSON, Office of
 General Counsel, United States Office of Personnel Man-
 agement, Washington, DC.
                   ______________________
Case: 19-2376    Document: 45     Page: 2    Filed: 07/27/2020

2                                              GREEN   v. OPM

 PER CURIAM.
     Natalie Green petitions for review of a Merit Systems
 Protection Board (“Board”) decision that affirmed an Office
 of Personnel Management (“OPM”) decision terminating
 Ms. Green’s disability annuity payments and finding that
 she owed the government for overpayments she received
 after the termination’s effective date. We affirm.
                              I
                              A
     In May 2003, Ms. Green retired on disability under the
 Federal Employees’ Retirement System (“FERS”) from a
 position as a Machine Operator with the U.S. Postal Ser-
 vice.
     In 2016, Ms. Green worked as a paralegal for a federal
 service contractor. She was under the age of 60 throughout
 2016. Under 5 U.S.C. § 8455(a)(2), if a person receiving a
 FERS disability annuity has his or her “earning capacity”
 restored before turning 60, payment of the annuity termi-
 nates after the end of the calendar year in which earning
 capacity was restored. See 5 C.F.R. § 844.402(a) (setting
 the termination date at June 30 following that calendar
 year). Earning capacity is deemed restored “if in any cal-
 endar year the income of the annuitant from wages or self-
 employment or both equals at least 80 percent of the cur-
 rent rate of pay of the position occupied immediately before
 retirement.” 5 U.S.C. § 8455(a)(2); see 5 C.F.R. § 844.402
 (implementing regulation).
     On January 23, 2018, OPM sent Ms. Green a letter
 stating that her 2016 earned income indicated that her
 earning capacity may have been restored, and therefore
 her disability annuity payments might be terminated
 (along with her federal employee health benefits). SApp’x
Case: 19-2376     Document: 45    Page: 3    Filed: 07/27/2020

 GREEN   v. OPM                                            3

 75–76. 1 OPM noted that the 2016 rate of basic pay for the
 position she occupied immediately before retirement was
 $58,231 (80 percent of which was $46,584). SApp’x 75.
 OPM also noted that the Social Security Administration
 had reported to OPM that Ms. Green’s earned income for
 2016 was $48,955, which exceeded that 80 percent limita-
 tion. Id. (citing 5 C.F.R. § 844.402).
     OPM sent additional correspondence to Ms. Green, in-
 cluding an April 17, 2018 letter stating that she owed
 $12,664.22 for overpayments she received, and an April 19,
 2018 letter stating that her disability annuity terminated
 effective June 30, 2017, and that her federal employee
 health benefit enrollment must also be terminated. OPM
 ultimately issued a final decision on August 16, 2018, reit-
 erating its previous conclusions that: (1) Ms. Green’s 2016
 earned income exceeded the relevant 80 percent limitation,
 thus causing her disability annuity to terminate effective
 July 1, 2017; and (2) Ms. Green owed the government
 $12,664.22 from overpayments she received while the an-
 nuity should have been terminated. 2 SApp’x 39–42.
                              B
      Ms. Green appealed OPM’s final decision to the Board.
 An administrative judge (“AJ”) issued an initial decision
 affirming OPM. The AJ noted that it was undisputed that
 (1) Ms. Green reported her 2016 income to the IRS as
 $48,955; (2) the 2016 base salary for the position she occu-
 pied immediately before retirement was $58,231; and

    1    Citations to “App’x” and “SApp’x” refer to Peti-
 tioner Ms. Green’s Appendix and Respondent OPM’s Sup-
 plemental Appendix, respectively.
     2   Although OPM’s final decision set forth the effec-
 tive date of termination as July 1, 2017 (as opposed to the
 previously communicated June 30, 2017 date), OPM’s cal-
 culation of what Ms. Green owed remained at $12,664.22.
Case: 19-2376    Document: 45      Page: 4    Filed: 07/27/2020

4                                               GREEN   v. OPM

 (3) the $48,955 she reported to the IRS exceeded 80 percent
 of that base salary, which was $46,584.80. SApp’x 6.
     Ms. Green argued that her $48,955 reported income
 should be reduced by the amount of health-and-welfare
 benefit payments she received from her employer, which
 would leave her with a 2016 earned income of $43,942.19—
 below the 80 percent limitation. 3 SApp’x 6. The AJ noted
 Ms. Green’s statement that her employer paid her a rate of
 $21.05 per hour, plus a health-and-welfare benefit rate of
 $4.02 per hour. SApp’x 7; see App’x 97. The AJ further
 observed that, while normally these health-and-welfare
 benefit payments would be reduced by the cost of any ac-
 tual benefits elected by the employee or provided by the
 employer, Ms. Green “did not elect to receive any benefit
 from [her employer] because she was receiving health and
 welfare benefits from OPM.” SApp’x 7; see App’x 97.
     In considering Ms. Green’s argument that the health-
 and-welfare benefit payments she received from her em-
 ployer should be deducted from her income for purposes of
 determining her earning capacity, the AJ initially noted
 that OPM’s relevant implementing regulation, 5 C.F.R.
 § 844.402, “does not define ‘earning capacity’ beyond stat-
 ing that it is demonstrated by an annuitant’s ability to earn
 post-retirement income in exchange for personal services
 or work product.” SApp’x 7.
     The AJ then referred to the analogous disability-annu-
 ity regulation for the Civil Service Retirement System
 (“CSRS”), which she found instructive. That CSRS regula-
 tion generally excludes “[m]edical or hospitalization health
 benefit plans” from the calculation of earning capacity, but

     3   The AJ noted that Ms. Green’s federal service con-
 tractor employer was obligated to provide this benefit or
 the cash equivalent thereof. SApp’x 6–7 (citing 41 U.S.C.
 § 6703(2)).
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 GREEN   v. OPM                                             5

 not if “the employee had the opportunity (whether exer-
 cised or not) to elect to receive the cash value . . . of the
 employer-provided amount or service.” See 5 C.F.R.
 § 831.1209(d)(3)(ii), (d)(4)(ii); see also SApp’x 7–8. The AJ
 reasoned that, under this regulation, although an em-
 ployer’s payments to a healthcare provider might not con-
 stitute income, payments made to the employee in lieu of
 healthcare coverage would. SApp’x 8. Finding that Ms.
 Green had supplied no authority for not including as in-
 come the payments she received in lieu of health-and-wel-
 fare benefits, the AJ applied similar reasoning to conclude
 that those payments should count as income for purposes
 of determining Ms. Green’s earning capacity under the
 FERS regulation. See SApp’x 9–10. Separately, the AJ de-
 termined that Ms. Green failed to show entitlement to a
 waiver from the government’s recovery of the overpay-
 ments she received and that the record did not support ad-
 justing the overpayment repayment schedule.
     The AJ’s initial decision became the Board’s final deci-
 sion. See 5 C.F.R. § 1201.113. Ms. Green timely petitioned
 for review of that decision. We have jurisdiction under
 28 U.S.C. § 1295(a)(9).
                              II
                              A
     Our review of Board decisions is limited. See 5 U.S.C.
 § 7703(c). We review a decision for whether it is “(1) arbi-
 trary, capricious, an abuse of discretion, or otherwise not
 in accordance with law; (2) obtained without procedures re-
 quired by law, rule, or regulation having been followed; or
 (3) unsupported by substantial evidence.” Id.; see also
 Grover v. Office of Pers. Mgmt., 828 F.3d 1378, 1382 (Fed.
 Cir. 2016). Substantial evidence is “such relevant evidence
 as a reasonable individual might accept as adequate to sup-
 port a conclusion.” Belanger v. Office of Pers. Mgmt., 1 F.3d
1223, 1227 (Fed. Cir. 1993).
Case: 19-2376    Document: 45     Page: 6    Filed: 07/27/2020

6                                              GREEN   v. OPM

      Ms. Green challenges the Board’s decision to include as
 income the health-and-welfare benefit payments she re-
 ceived from her employer for purposes of determining her
 earning capacity. See, e.g., Petitioner’s Informal Br. 4. We
 also construe her opening brief as challenging the Board’s
 determination that she was entitled neither to a waiver
 from the government’s recovery of overpayments, nor to an
 adjustment of the overpayment repayment schedule. See
id. at 4–5, 20. We address these issues in turn.
                              B
      The operative OPM regulation provides, in a subsec-
 tion titled “Income,” that “[e]arning capacity for the pur-
 poses of this section is demonstrated by an annuitant’s
 ability to earn post-retirement income in exchange for per-
 sonal services or a work product.” 5 C.F.R. § 844.402. OPM
 interpreted this regulation to include as income the health-
 and-welfare benefit payments Ms. Green received from her
 employer. “As a general rule, we must defer to an agency’s
 interpretations of the regulations it promulgates, as long
 as the regulation is ambiguous and the agency’s interpre-
 tation is neither plainly erroneous nor inconsistent with
 the regulation.” Gose v. U.S. Postal Serv., 451 F.3d 831,
 836 (Fed. Cir. 2006). We therefore consider whether the
 regulation is ambiguous on the particular issue here—
 whether these health-and-welfare benefit payments qual-
 ify as income for purposes of determining earning capac-
 ity—and, if it is ambiguous, whether OPM’s interpretation
 to include such payments as income is plainly erroneous or
 inconsistent with the regulation.
     The Board found that the text of 5 C.F.R. § 844.402
 does not, by itself, resolve the issue of whether these
 health-and-welfare benefit payments qualify as “income in
 exchange for personal services or work product” for pur-
 poses of determining earning capacity. See SApp’x 7–9. We
 likewise conclude that, although the regulation clarifies
 some aspects of what qualifies as income for purposes of
Case: 19-2376     Document: 45     Page: 7    Filed: 07/27/2020

 GREEN   v. OPM                                              7

 determining earning capacity, see 5 C.F.R. § 844.402(c)(1)–
 (3), the regulation’s text alone does not resolve the specific
 question of whether these health-and-welfare benefit pay-
 ments so qualify.
      Having concluded that the regulation is ambiguous on
 this point, we next consider whether OPM’s interpretation
 of the regulation to include these health-and-welfare bene-
 fit payments as income is plainly erroneous or inconsistent
 with the regulation. See Chase Bank USA, N.A. v. McCoy,
 562 U.S. 195, 207–08 (2011) (after finding the regulation
 ambiguous on the question presented, looking to the
 agency’s interpretation of its own regulation for guidance
 and deferring to that interpretation unless plainly errone-
 ous or inconsistent with the regulation). We cannot say
 that it is.
     As the Board observed, the analogous CSRS disability-
 annuity provision supports this interpretation. In that
 context, although medical benefits are generally excluded
 from earning-capacity income, they are not excluded where
 the employee has an opportunity to receive the cash value
 of those benefits. See SApp’x 7–8 (discussing 5 C.F.R.
 § 831.1209(d)(3)–(4)). Similarly, OPM notes that while it
 does not include an employee’s health insurance benefits in
 calculating “income” for purposes of determining earning
 capacity, it does do so when those benefits are converted to
 payments from the employer to the employee, as they were
 here. See Respondent’s Informal Br. 9. Ms. Green has not
 demonstrated—nor can we conclude—that treating these
 cash payments as income for purposes of determining earn-
 ing capacity is plainly erroneous or inconsistent with the
 regulation. See Gose, 451 F.3d at 837 (explaining that we
 defer to an agency’s interpretations of its own regulations
 “because the agency, as the promulgator of the regulation,
 is particularly well suited to speak to its original intent in
 adopting the regulation”).
Case: 19-2376    Document: 45      Page: 8   Filed: 07/27/2020

8                                              GREEN   v. OPM

                             C
      The Board next considered whether Ms. Green was en-
 titled to a waiver from the government’s recovery of the
 overpayments she received. 4 SApp’x10–13. The Board ob-
 served that recovery “will be waived when the annuitant is
 without fault and recovery would be against equity and
 good conscience.” SApp’x 10 (citing 5 U.S.C. § 8470(b)).
 But, as the Board correctly noted, it was Ms. Green’s bur-
 den to establish her entitlement to a waiver by substantial
 evidence. SApp’x 11 (citing 5 C.F.R. § 845.307).
     The Board found that, although Ms. Green was not at
 fault for creating the overpayment, she had “failed to pro-
 vide evidence that recovery would be against equity and
 good conscience.” SApp’x 12. The Board considered Ms.
 Green’s evidence concerning her mortgage and take-home
 pay but found no reason to find that OPM’s proposed re-
 payment schedule would constitute a financial hardship.
 SApp’x 12–13. The Board similarly found no evidence upon
 which it could assess whether Ms. Green was entitled to an
 adjustment in the repayment schedule. SApp’x 13. On re-
 view, Ms. Green has not demonstrated that the Board’s
 waiver and adjustment decisions lacked substantial evi-
 dence or were otherwise arbitrary and capricious.
                             III
      We have considered Ms. Green’s remaining arguments
 but find them unpersuasive. For the foregoing reasons, we
 affirm the Board’s decision.
                       AFFIRMED

    4    The Board found that OPM showed by preponder-
 ant evidence that Ms. Green did, in fact, receive overpay-
 ments following the date her disability annuities should
 have terminated. SApp’x 10.
Case: 19-2376     Document: 45    Page: 9     Filed: 07/27/2020

 GREEN   v. OPM                                             9

                          COSTS
    The parties shall bear their own costs.