Court Opinion

ID: 6349246
Source: CourtListenerOpinion
Date Created: 2022-06-13 17:00:21.775567+00
Date Added: 2024-06-11T09:12:10.556295
License: Public Domain

PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                _______________

                     No. 21-2140
                   _______________

JOHN DOE 1; JOHN DOE 2; JOHN DOE 3; JANE DOE 1,

                           v.

           UNITED STATES OF AMERICA,
                                  Appellant
                 _______________

     On Appeal from the United States District Court
        for the Eastern District of Pennsylvania
                (D.C. No. 2:20-cv-01947)
        District Judge: Honorable Jan E. DuBois
                    _______________

                Argued: March 22, 2022

  Before: BIBAS, MATEY, and PHIPPS, Circuit Judges

                 (Filed: June 13, 2022)
                   _______________

Bradley Hinshelwood                          [ARGUED]
UNITED STATES DEPARTMENT OF JUSTICE
950 Pennsylvania Avenue NW
Washington, DC 20530
Counsel for Appellant
Jonathan D. Lindenfeld                          [ARGUED]
FEGAN SCOTT LLC
140 Broadway, 46th Floor
New York, NY 10016
Elizabeth A. Fegan
FEGAN SCOTT LLC
150 S. Wacker Dr., Suite 2400
Chicago, IL 60606
Counsel for Appellees

                     _______________

                OPINION OF THE COURT
                    _______________

BIBAS, Circuit Judge.
    Judges cannot right every wrong nor heal every wound.
Even if the government hurts someone, the victim cannot sue
it for damages without the government’s consent. Sovereign
immunity may seem harsh. But it ensures that the federal gov-
ernment as sovereign waives immunity not through its judges,
but rather through elected officials who are empowered to
spend citizens’ tax dollars. To safeguard that division of au-
thority, we do not find that Congress waived federal sovereign
immunity unless it has spoken clearly.
    FBI employees say that Congress did that, letting them sue
for money they lost when the government made late payments
to their retirement accounts. Not so. Because the statute does
not clearly waive the federal government’s immunity for the
employees’ claims, we may not hear them.

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                       I. BACKGROUND
   When Congress does not pass a budget in time, the federal
government shuts down. Smithsonian museums close, trash
cans in national parks overflow, and lots of federal workers do
not get their paychecks.
   All those things happened at the end of 2018, when the
longest shutdown in history began. For more than a month, FBI
employees, like other federal workers, were not paid. Nor did
they get payments into their Thrift Savings Plan retirement ac-
counts.
   Once the government reopened, the employees had a right
to back pay. Sure enough, the FBI sent them their missed
paychecks and contributed to their Thrift accounts. But the
contributions did not make the employees whole. While the
government was shut down, the market had risen; “the most
popular [Thrift] funds increased over 10%.” JA 40 ¶ 10. If the
government had made its Thrift contributions on time, that
money would have bought more shares than the late payments
did.
    So the employees filed this class-action suit under the Fed-
eral Employees’ Retirement System Act of 1986 (FERSA or
the Act), which created their Thrift retirement plans. 5 U.S.C.
§§ 8401–80. They seek compensation for the investment gains
that they would have gotten if the government had made its
contributions on time.
   To understand their argument, we must dive into the Act. It
requires a federal agency to contribute an amount equal to one
percent of an employee’s salary to his retirement account.

                               3
5 U.S.C. § 8432(c)(1)(A). Plus, the employee may choose to
contribute more of his salary; if he does, the agency must match
part of that contribution. § 8432(a), (c)(2).
    Important here, the Act orders agencies to make their con-
tributions “no later than 12 days after the end of the pay
period.” § 8432(c)(1)(A); accord § 8432(c)(2)(A). But the FBI
did not make those payments for nearly a month.
    Those provisions, the employees argue, give them an en-
forceable right to timely Thrift contributions. Plus, they say
they can recover their losses by suing the government in fed-
eral court. In support, they point out that the Act lets “any par-
ticipant or beneficiary” of a Thrift plan sue in federal court “to
recover benefits.” 5 U.S.C. § 8477(e)(3)(C)(i). That provision,
they contend, waives the government’s sovereign immunity for
their claims, since this is a suit to “recover [the] benefit[ ]” of
timely Thrift contributions. Id.
    The government agrees that § 8477(e)(3)(C)(i) waives sov-
ereign immunity but disagrees about the scope of that waiver.
It moved to dismiss, arguing that this suit falls outside the
waiver. It frames this case as an effort to recover consequential
damages from the government’s late payment, arguing that
such damages are not a “benefit” within the waiver.
    The District Court agreed with the employees and refused
to dismiss. But it certified this issue for interlocutory appeal,
which we have jurisdiction to hear under 28 U.S.C. § 1292(b).
We review the District Court’s reading of the statute de novo.
United States v. Hodge, 948 F.3d 160, 162 (3d Cir. 2020).

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II. SOVEREIGN IMMUNITY BARS THE EMPLOYEES’ CLAIMS
    To unlock the courthouse door and sue the federal govern-
ment, a plaintiff needs two keys. He must have a cause of
action so he can “invoke the power of the courts” to remedy
his injury. Davis v. Passman, 442 U.S. 228, 239 (1979). And
Congress must have waived sovereign immunity for the spe-
cific remedy he seeks. Lane v. Pena, 518 U.S. 187, 197 (1996);
see, e.g., FAA v. Cooper, 566 U.S. 284, 299 (2012) (finding
that waiver for “actual damages” did not allow recovery for
emotional harm).
    Here, everyone agrees that § 8477 both provides a cause of
action and waives immunity for suits to “recover benefits”
under the Thrift Savings Plan. The only issue is whether the
employees’ suit seeks to “recover benefits.”
    It does not. The Act’s text and structure show that lost earn-
ings on late Thrift contributions are not benefits. And even if
the waiver were ambiguous, we would read it narrowly, in fa-
vor of the government.
   A. The text’s plain meaning supports the government
   Start with the Act. Three provisions are on point. The first
requires the agency to make automatic Thrift contributions
within twelve days:
       At the time prescribed by the Executive Director,
       but no later than 12 days after the end of the pay
       period …, the employing agency shall contribute
       to the Thrift Savings Fund for the benefit of [the]
       employee….

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5 U.S.C. § 8432(c)(1)(A). A second provision requires the
agency to make matching contributions within twelve days:
       [T]he employing agency … shall make a [match-
       ing] contribution to the Thrift Savings Fund for
       the benefit of [the] employee.… The employing
       agency’s contribution shall be made … no later
       than 12 days after the end of each such pay pe-
       riod.
§ 8432(c)(2)(A). And a third provision lets employees sue to
“recover benefits”:
       A civil action may be brought in the district
       courts of the United States … (C) by any partic-
       ipant or beneficiary … (i) to recover benefits of
       such participant or beneficiary under the provi-
       sions of subchapter III of this chapter, to enforce
       any right of such participant or beneficiary under
       such provisions, or to clarify any such right to
       future benefits under such provisions.
§ 8477(e)(3).
    Take § 8477(e)(3) first. This is a suit brought by plan “par-
ticipant[s].” And because the right to Thrift contributions falls
within “subchapter III,” the employees are suing “under [its]
provisions.” Thus, the only issue is whether this is a suit to “re-
cover benefits.” It is not.
   A “benefit” is “[t]hat which a person is entitled to in the
way of pecuniary assistance.” Benefit (def. 4d), Oxford English
Dictionary (2d ed. 1989). In employment, it typically includes

                                6
perks like life and health insurance, paid vacation days, and
pensions. See, e.g., 29 U.S.C. § 2611(5). Thus, here it most nat-
urally refers only to the agency’s Thrift contribution, not dam-
ages flowing from a late contribution.
    The employees ask us to include the value of timely contri-
butions as well. But that reading does not square with the text.
Both § 8432(c)(1)(A) and (c)(2)(A) use the word “benefit” to
refer to the agency’s contribution, not its timeliness. The for-
mer paragraph phrases the timing requirement as a limit on the
Executive Director’s power to set the payment time, not as a
benefit. § 8432(c)(1)(A). And the latter paragraph lists the con-
tribution requirement in the first sentence and the twelve-day
timing requirement after it in a separate sentence.
§ 8432(c)(2)(A).
    In other words, the concrete benefit due is a percentage of
salary, not the returns on that money. The verb phrase obligat-
ing the agency is “shall contribute” or “shall … ma[k]e.”
§ 8432(c)(1)(A), (c)(2)(A). The direct object of that verb
phrase, the thing to be contributed, is the “contribution,” de-
fined as a specified percentage of the employee’s salary.
§ 8432(c)(2); accord § 8432(c)(1)(A). That is how much the
agency must pay “for the benefit of [the] employee.”
§ 8432(c)(1)(A), (c)(2)(A). The twelve-day timing requirement
is not the object of the verb phrase. Rather, it is a phrase or
sentence that functions like an adverb, specifying not what the
agency must contribute but when.
    Plus, under § 8477(e)(3), the “benefit[ ]” must be the thing
that the suit “recover[s].” Put another way, the market growth
on Thrift funds would have to be a statutory “benefit.” But that

                               7
would mean that if the market falls, the employee would be
entitled to a smaller late payment than if it had been paid on
time. So in a bear market, the government could save money
by delaying its contributions. That cannot be right.
    The twelve-day limit still means something. It sets an
enforceable deadline for contributing. If the agency delays be-
yond that, employees may sue after that to force it to contrib-
ute.
   B. The statutory scheme also favors the government
    Confirming our reading of the text, the Act’s meaning
“becomes even more apparent when viewed in the broader stat-
utory context.” Babcock v. Kijakazi, 142 S. Ct. 641, 645 (2022)
(internal quotation marks omitted). Congress authorized a
remedial scheme to let employees recover some lost earnings
on Thrift contributions, so long as those are “lost earnings re-
sulting from [agency] errors (including errors of omission).” 5
U.S.C. § 8432a(a)(1). A regulation implementing that section
excludes “an act or omission caused by events that are beyond
the control of the [Thrift Investment] Board, the [Thrift] Rec-
ord Keeper, or the participant’s employing agency.” 5 C.F.R.
§ 1605.1(b)(iii). The government shutdown stemmed not from
an agency error, but from events “beyond the [agencies’] con-
trol.” Id. Congress chose not to authorize remedies for Thrift
lost earnings due to those events. We must respect that choice.
   C. We construe waivers of sovereign immunity
      narrowly
   The text, structure, and context suffice to resolve this case.
But if any ambiguity remained, we would resolve it for the

                               8
government. To waive sovereign immunity, a statute must say
so “clearly.” FAA v. Cooper, 566 U.S. at 291. “[I]f there is a
plausible interpretation of the statute that would not authorize
money damages against the Government,” we should read the
statute in “favor of immunity.” Id. at 290–91. That clear-
statement rule guards against unintentional waivers. And it en-
sures that elected officials, not judges, choose when to open the
public purse.
    The employees reply that § 8477(e)(3) does clearly waive
immunity. Any ambiguity is limited to the provisions confer-
ring the benefits and whether they create a right to timely con-
tributions. So they ask us to apply not the clear-statement rule
but a “demonstrably lower” standard, borrowed from the
Tucker Act. United States v. White Mt. Apache Tribe, 537 U.S.
465, 472 (2003). Under the Tucker Act, we ask only whether a
statute “can fairly be interpreted as mandating compensa-
tion … for the damage sustained.” Id. (internal quotation marks
omitted).
    But that Tucker Act case law does not apply here. When a
statute has its own remedies, plaintiffs “cannot rely on [the
Tucker Act’s] fair[-]interpretation test, and instead must stick
to the money[-]mandating statute’s own text.” Me. Cmty.
Health Options v. United States, 140 S. Ct. 1308, 1330 (2020)
(internal quotation marks omitted); accord United States v.
Bormes, 568 U.S. 6, 11–16 (2012). Here, the Act authorizes its
own remedy by creating a cause of action in § 8477(e)(3); the
only question is its scope. And as we have explained, the Act’s
text, its structure, and the clear-statement rule all bar suits for
lost earnings here.

                                9
                           *****
    The government’s late retirement payments meant that its
employees missed out when the markets rose. But because
Congress has not waived the government’s immunity from suit
for these losses, the employees may not sue to recover their lost
profits. So we will reverse and remand the District Court’s
order.

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