Court Opinion

ID: 4318362
Source: CourtListenerOpinion
Date Created: 2018-10-04 19:01:04.560589+00
Date Added: 2024-06-11T14:45:24.519499
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

EUGENE ZOGLIO,

               Plaintiff,
       v.
                                                     Civil Action No. 17-1594 (TJK)
STEVEN T. MNUCHIN,

               Defendant.

                                 MEMORANDUM OPINION

       In 2017, the Office of D.C. Pensions (“ODCP”), an office within the Department of

Treasury, denied Plaintiff Eugene Zoglio’s request to reestablish a decades-old disability

pension. He has brought suit against the Secretary of the Treasury (the “Secretary”) seeking

reversal of that denial. The parties have cross-moved for summary judgment. ECF Nos. 9, 11. 1

For the reasons set forth below, the Secretary’s motion will be granted and Zoglio’s motion will

be denied.

       Statutory and Regulatory Background

       As far back as 1916, Congress created retirement plans for police, firefighters, and other

employees of the District of Columbia (the “District”). See S. Rep. No. 96-237, at 2 (1979).

These plans “were funded on a ‘pay as you go’ basis,” and by the 1970s they had created a vast

“unfunded liability” for the District. D.C. Ret. Bd. v. United States, 657 F. Supp. 428, 430

(D.D.C. 1987). In 1979, Congress enacted the District of Columbia Retirement Reform Act,

Pub. L. No. 96-122, 93 Stat. 866 (1979), in the hopes of providing “adequate funding” to these

1
  In considering the instant motions, the Court has relied on all relevant parts of the record,
including: ECF No. 9-1 (“Pl.’s Br.”); ECF No. 10 (“Def.’s Br.”); ECF No. 12 (“Pl.’s Reply”);
ECF No. 14 (“Def.’s Reply”); ECF No. 15 (“JA”).
“financially strapped” programs. McNeal v. PFRRB, 488 A.2d 931, 934 (D.C. 1985).

Nonetheless, by 1997, these unfunded liabilities had increased to $4.8 billion, and associated

payments constituted 10% of the District’s annual revenue. See Balanced Budget Act of 1997,

Pub. L. No. 105-33, tit. XI, subtit. A, District of Columbia Retirement Protection Act of 1997

§ 11002(a)(2), (6), 111 Stat. 251, 715-16.

         Congress responded by passing the District of Columbia Retirement Protection Act of

1997 (“DCRPA”) (enacted as Title XI, Subtitle A of the Balanced Budget Act of 1997), which

transferred the obligation to pay for certain of these retirement programs to the federal

government. Id. § 11002(b)(2), 111 Stat. at 716.2 These programs were transferred “as in effect

on the day before” the statute’s “freeze date” of June 30, 1997. DCRPA § 11003(5), (9), 111

Stat. at 717. That is, the federal government took on the District’s liabilities that had accrued

under these programs on or before June 30, 1997, with the District continuing to be responsible

for liabilities arising from employee service rendered after that date. See id. § 11012(b), 111

Stat. at 718; Rivera v. Lew, 949 F. Supp. 2d 266, 267 (D.D.C. 2013); Federal Benefit Payments

under Certain District of Columbia Retirement Plans, 70 Fed. Reg. 60003, 60003 (Oct. 14,

2005).

         Congress vested the administration of the DCRPA in the Secretary, see DCRPA

§ 11083, 111 Stat. at 730, who delegated that authority to the ODCP, see Def.’s Br. at 1-2. In

particular, the Secretary may promulgate procedures for handling claims. DCRPA § 11022(a),

111 Stat. at 720. The relevant regulations provide for the processing of claims by a “Benefits

Administrator,” 31 C.F.R. § 29.404(a), a role apparently filled by the District of Columbia

2
 The DCRPA was subsequently amended by the District of Columbia Retirement Protection
Improvement Act of 2004, Pub L. No. 108-489, 118 Stat. 3966, which renumbered certain
sections of the DCRPA. This Opinion uses the original section numbers.

                                                  2
Retirement Board (“DCRB”) during the time period relevant to this case, see Def.’s Br. at 6. In

the event that a claim is denied, the decision must be accompanied by “adequate written notice of

such denial, setting forth the specific reasons for the denial in a manner calculated to be

understood by the average participant.” DCRPA § 11022(a)(1), 111 Stat. at 720. Applicants

may seek reconsideration before the Benefits Administrator, followed by an appeal to the

Department of the Treasury. 31 C.F.R. § 29.404(b)-(e). See generally Vincent v. Geithner, 890
F. Supp. 2d 8, 10 n.1 (D.D.C. 2012) (discussing review process).

       The DCRPA gives this Court exclusive jurisdiction and venue to review benefits

decisions. DCRPA § 11072(a)(1), 111 Stat. at 728. It also sets out a standard of review. “Any

factual determination made by the [Secretary] shall be presumed correct unless rebutted by clear

and convincing evidence.” DCRPA § 11022(b), 111 Stat. at 721. Moreover, the Secretary’s

“interpretation and construction of the benefit provisions of the [transferred retirement programs]

and [the DCRPA] shall be entitled to great deference.” Id.

       Factual and Procedural Background

       In 1958, Zoglio became an officer in the District’s Metropolitan Police Department. JA

1. In 1970, he retired with a disability annuity. JA 1-2. Zoglio subsequently attended law

school and started his own practice. JA 2. In 1984, the Police and Firefighters’ Retirement and

Relief Board (“PFRRB”) terminated Zoglio’s pension, on the ground that his earning capacity

had been restored by his “lucrative” law practice. JA 269, 279. Of particular note, the PFRRB

concluded that Zoglio’s “earning capacity” included not just the personal “income” he had

actually drawn from his firm (which was incorporated as a professional corporation), but also his

“demonstrated capacity to earn” based on the firm’s revenues. JA 280-82

       In 1991, Zoglio petitioned the PFRRB for reestablishment of his annuity. Zoglio v.

PFRRB (“Zoglio I”), 626 A.2d 904, 905 (D.C. 1993). He argued that, by virtue of having turned

                                                  3
50, he was necessarily entitled to reestablishment. Id. The District of Columbia Court of

Appeals rejected this argument, holding that District law recognized only “two corresponding

conditions upon which the annuity, once terminated, can be ‘reestablished’: recurrence of the

disability and reduction of income below the statutory percentage ceiling.” Id. The Court of

Appeals also rejected Zoglio’s theory that the disability program discriminated against him based

on his age. See id. at 907-08.

       In December 2014, Zoglio again sought reestablishment of his annuity, this time on the

ground that his earning capacity had declined to less than 80% of the position he held at his

retirement. JA 268. There followed a series of administrative decisions that both parties agree

were erroneous. See Pl.’s Br. at 6; Def.’s Br. at 6 n.7. The DCRB interpreted his request as one

for “deferred retirement benefits,” JA 267, and granted him such benefits in the amount of $631

per month, JA 261. This decision was incorrect because Zoglio had neither requested, nor was

he entitled to, deferred benefits. See Def.’s Br. at 27. The DCRB promptly reversed course and

voided the award, suggesting he instead seek relief from the PFRRB. JA 260. That suggestion

was also in error, because the PFRRB lacked jurisdiction over his case and promptly dismissed

it. JA 249, 254.

       In September 2015, Zoglio returned to the DCRB with a renewed request for

reestablishment, explaining the previous errors. JA 252-53. On October 30, 2015, DCRB

denied the request. JA 248. It reasoned, first, that he had failed to show that his “earned income

for [calendar year] 2014 was below the statutory earnings threshold.” JA 249. It noted that

Zoglio continued to maintain the “lucrative law practice” that underlay the PFRRB’s 1984

decision to terminate his benefits. Id. It also concluded that Zoglio had misled the PFRRB about

                                                 4
his income in the earlier proceedings, and that this “materially false information” had caused his

annuity to be “forfeited.” JA 249-50.

       On November 24, 2015, Zoglio appealed the denial to ODCP. JA 101-02. He argued

that the “only relevant issue” was his “2014 earned income.” JA 106. While acknowledging that

“he and his wife had adjusted gross income of $162,820” in 2014, he explained that most of this

amount (including certain retirement benefits and payments from a purchased annuity) did not

count toward his “earned income.” JA 113. He also claimed that his tax return did “not show

any income from his ‘lucrative’ law firm in 2014 because his law firm did not make a profit in

2014 and he received no salary or other earned income from the firm in 2014.” JA 114. His

wife continued to work at the firm, but her salary had been reduced from $35,000 to $25,000. Id.

He also disputed the DCRB’s conclusion that he had previously misled the PFRRB. JA 96, 114-

15.

       ODCP followed up with two requests for additional information. First, it requested

additional tax documents and a description of any “services performed in 2014 and 2015 by Mr.

Zoglio on behalf of” his firm. JA 94. Zoglio provided the tax documents, along with the

following explanation:

               Mr. Zoglio did not actively engage in the practice of law in 2014
               and 2015 for the firm he founded many years ago, Eugene M.
               Zoglio, P.A. He is almost 80 years old. As to the services
               performed by Mr. Zoglio in 2014 and 2015, they are as follows: He
               occasionally writes checks for routine bills for the firm and the
               attorneys will on occasion consult with him, for which he receives
               no salary. All legal work and fees generated by the firm are done
               by the other attorneys and paralegals. Mr. Zoglio’s wife has done
               administrative work for the firm for the past 30 years as an
               employee of the firm, for which she receives a salary of $25,000
               per year. Mr. Zoglio’s income from investments, sales of real
               estate, pensions, annuities, Social Security and rent from real
               property does not disqualify him from restoration of the disability
               pension to which he is entitled by law.

                                                 5
JA 15.

         Next, ODCP requested medical documentation showing that Zoglio “is currently

suffering from the disabling illness/injury he incurred while employed by the Metropolitan

Police Department prior to his disability retirement, and that this has caused a reduction in his

earnings capacity below the statutory threshold.” JA 11. Zoglio refused to provide this

information, which he argued was “not relevant to the legal issue to be decided regarding the

reinstatement of his annuity.” JA 9. He argued again that “[t]he only relevant issue regarding

restoration of [his] annuity is whether his earned income for 2014 fell below the 80% statutory

limitation.” Id. “Thus,” he argued, “ODCP has all the relevant information it needs to make a

decision.” Id.

         On March 24, 2017, ODCP denied Zoglio’s appeal, on two grounds. JA 1-8. It

concluded that Zoglio was required to establish that he continued to suffer from his disability,

but had refused to do so. JA 4-6. It further concluded that Zoglio had failed to establish that his

“earning capacity” had declined below the threshold required to reestablish his annuity. JA 6-8.

ODCP’s conclusion about earning capacity rested, in turn, on two independent bases. ODCP

reasoned, first, that “earned income” is not necessarily identical to “earning capacity,” which is

the relevant standard under the statute. JA 6-7. 3 In particular, it reasoned that “an annuitant who

at one point was entitled to a disability annuity under the Plan but is now capable of gainful

employment cannot draw a disability annuity by simply choosing not to work.” JA 7. It

concluded that, “[b]y all indications, Mr. Zoglio’s reduction in earned income is the result of a

3
  In its March 2017 decision, ODCP used the term “earned income” in place of the phrase
“income of the annuitant from wages or self-employment” used in D.C. Code § 5-714(a)(2). See
J.A. 6 n.3. In their briefing before the Court, the parties appear to have adopted this short-hand
as well. See, e.g., Pl.’s Br. at 9-10; Def.’s Br. at 19. For clarity, in its analysis below the Court
will likewise use “earned income” when referring to the above-mentioned phrase in the statute.

                                                  6
voluntary decision to retire.” Id. Zoglio admitted that he sometimes consulted with attorneys at

his firm, which in ODCP’s view suggested he had the ability to work. Id. And “nothing in the

documentation provided suggests Mr. Zoglio lacks such ability.” Id. As to its second basis,

ODCP also reasoned that “a reduction in ability to earn income for reasons unrelated to the

disability is not sufficient to show a lack of earning capacity.” Id. And ODCP concluded that

Zoglio had not shown that his disability had caused his decline in earning capacity. Id.

       On August 8, 2017, Zoglio filed the instant lawsuit challenging ODCP’s decision. ECF

No. 1. He primarily attacks ODCP’s legal reasoning. As in his briefing to ODCP, Zoglio argues

that “[t]he only relevant issue is whether [his] earned income ‘from wages or self-employment or

both’ for 2014 fell below the 80% earned income limit imposed by D.C. Code § 4-620(a)(2)

(1981).” Pl.’s Br. at 2. Because the tax information he submitted to ODCP established this fact,

he was entitled to reestablishment of his disability annuity. Id. He also argues that the

government has acted in “bad faith,” as evidenced by its initial mishandling of his claim. Pl.’s

Reply at 21. Further, he argues that ODCP has discriminated against him based on his age, see

Pl.’s Br. at 19-21; Pl.’s Reply at 19-20, and that he is being “singled out for special negative

treatment” merely because he previously had a successful law practice, Pl.’s Reply at 2-3.

       The Secretary argues that ODCP correctly denied Zoglio’s application. He argues that

Zoglio’s income was not adequate evidence of his “earning capacity” for the reasons set forth in

ODCP’s opinion, and that Zoglio’s annuity could not be reestablished absent evidence that he

was still disabled. Def.’s Br. at 13-25. The Secretary also urges the Court to reject Zoglio’s

arguments about bad faith and age discrimination. Id. at 26-27.

       Legal Standard

       A court must grant summary judgment “if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.

                                                  7
Rawle Civ. P. 56(a). The Secretary has argued that the standard of review in this case is provided by

the Administrative Procedure Act (“APA”), 5 U.S.C. § 551 et seq. See Def.’s Br. at 7-10. He

notes that DCRPA provides its own standard of review, but suggests, citing Rivera v. Lew, 949
F. Supp. 2d 266 (D.D.C. 2013), that there is no meaningful difference between the APA standard

and the DCRPA’s standard under the facts of this case. See Def.’s Br. at 9 & n.10. Zoglio does

not argue for a different standard of review, and so the Court will apply the APA standard to this

case.

        “[W]hen a party seeks review of agency action under the APA, the district judge sits as

an appellate tribunal.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001).

“The ‘entire case’ on review is a question of law.” Id. “Summary judgment thus serves as the

mechanism for deciding, as a matter of law, whether the agency action is supported by the

administrative record and otherwise consistent with the APA standard of review.” Alston v. Lew,

950 F. Supp. 2d 140, 143 (D.D.C. 2013).

        Analysis

        Both parties seem to agree that this case turns on an issue of statutory construction. See

Pl.’s Br. at 2; Def.’s Br. at 10-13. The relevant statute is D.C. Code § 4-620 (1981), which, as of

June 30, 1997 (the “freeze date” in the DCRPA), governed the termination and reestablishment

of disability annuities for District police and firefighters. That historical statute governs this case

because the retirement plans transferred to the Secretary were frozen in place as of June 1997.

See DCRPA § 11003(5), 111 Stat. at 717. Nonetheless, the parties appear to agree that the

current version of the statute, now found at D.C. Code § 5-714, is not materially different from

the one in effect in 1997. See Pl.’s Br. at 9; Def.’s Br. at 10 n.11. The Court will cite the current

version for the sake of convenience.

        The relevant portion of the statute provides as follows:

                                                   8
               (a)(1) If any annuitant retired under § 5-709 or § 5-710, before
               reaching the age of 50, recovers from his disability or is restored to
               an earning capacity fairly comparable to the current rate of
               compensation of the position occupied at the time of retirement,
               payment of the annuity shall cease:

                       (A) Upon reemployment in the department from which he
                       was retired;

                       (B) Forty-five days from the date of the medical
                       examination showing such recovery; [or]

                       (C) Forty-five days from the date of the determination that
                       he is so restored . . . .

                (2) Earning capacity shall be deemed restored if, in each of 2
               succeeding calendar years in the case of an annuitant who was an
               officer or member of the United States Park Police force, United
               State Secret Service Uniformed Division, or the United States
               Secret Service Division, or in any calendar year in the case of an
               annuitant who was an officer or member of the Metropolitan Police
               force or the Fire Department, the income of the annuitant from
               wages or self-employment or both shall be equal to at least 80% of
               the current rate of compensation of the position occupied
               immediately prior to retirement. Nothing in this section shall
               preclude such member from having an annuity reestablished if his
               disability recurs, or when his earning capacity is less than 80% of
               the rate of compensation of the position occupied immediately
               prior to retirement for any full year thereafter; provided, that
               whenever any member is reinstated with his respective department
               it shall be at the same grade or rank held by the member at the time
               of his retirement.

D.C. Code § 5-714(a) (emphasis added).

       Zoglio argues that he is entitled to reestablishment of his benefits under the italicized text

because his income has fallen below the statutory threshold of “80% of the rate of compensation

of the position occupied immediately prior to retirement.” Id.; see Pl.’s Br. at 7. While the

statute refers to “earning capacity,” not “earned income,” he argues that they are one and the

same. Pl.’s Br. at 7. The Secretary has offered three independent reasons for rejecting Zoglio’s

interpretation. First, the Secretary argues that, regardless of Zoglio’s “earning capacity,” he was

                                                 9
required to show that he continued to be disabled to merit reestablishment. Def.’s Br. at 13-18.

Second, the Secretary asserts that “earning capacity” does not simply mean income, but the

ability to earn income, such that someone “capable of gainful employment cannot draw a

disability annuity by simply choosing not to work.” Id. at 22. And by relying solely on evidence

of his income, Zoglio did not meet his burden of showing that his “earning capacity” had fallen

below the statutory threshold. Third, the Secretary asserts that to be cognizable under the statute,

any decline in earning capacity must be the result of the annuitant’s disability. See id. at 23-25.

       The Court will focus on the Secretary’s second theory, because if correct it offers a

sufficient basis for upholding ODCP’s decision to deny reestablishment of Zoglio’s annuity. As

explained below, the Court concludes that the Secretary reasonably interpreted the statute to

mean that Zoglio’s proffered evidence of his “earned income” was insufficient to establish a loss

of “earning capacity” in this case, since he may have made a voluntary choice to stop working.

Therefore, the Court need not address the Secretary’s first and third theories.

       As an initial matter, the Court must determine whether the Secretary’s statutory

interpretation is entitled to deference. The Court notes that this case is somewhat unusual in that

the subject matter to be interpreted is not a federal statute, but a retirement plan governed by a

District statute that has been frozen in time as of June 1997. This raises the issue of whether

District law or federal law should control what, if any, deference to be afforded the Secretary’s

interpretation. The Court concludes it need not decide the issue, because both require sufficient

deference to easily justify the Secretary’s interpretation. See Chevron, U.S.A., Inc. v. Nat. Res.

Def. Council, Inc., 467 U.S. 837, 844 (1984) (noting that, when faced with ambiguity, “a court

may not substitute its own construction of a statutory provision for a reasonable interpretation

made by the administrator of an agency”); Zoglio I, 626 A.2d at 906 (“[C]ourts should give great

                                                 10
weight to any reasonable construction of a regulatory statute adopted by the agency charged with

the enforcement of that statute.” (quoting McMullen v. PFRRB, 465 A.2d 364, 366 (D.C. 1983)

(per curiam)).

       The Court starts with the language of the statute. The statute authorizes reestablishment

“when [the annuitant’s] earning capacity is less than 80% of the rate of compensation of the

position occupied immediately prior to retirement for any full year thereafter.” D.C. Code § 5-

714(a)(2) (emphasis added). “Earning capacity” means a “person’s ability or power to earn

money, given the person’s talent, skills, training, and experience.” Earning Capacity, Black’s

Law Dictionary (10th ed. 2014). As the Secretary points out, the ability to earn money will not

always be equal to actual income. See Def.’s Br. at 19-20. That is most obviously true when

someone can work, but chooses not to. Thus, the plain language of the statute supports the

Secretary’s interpretation.

       The text also contains another indication that “earning capacity” and “income” are not

always the same. It provides that:

                 Earning capacity shall be deemed restored if, . . . in any calendar
                 year . . . , the income of the annuitant from wages or self-
                 employment or both shall be equal to at least 80% of the current
                 rate of compensation of the position occupied immediately prior to
                 retirement.

D.C. Code § 5-714(a)(2) (emphasis added). That is, for purposes of terminating a disability

annuity, an increase in income may be “deemed” sufficient to establish restoration of earning

capacity. “Deem” means “[t]o treat (something) as if (1) it were really something else, or (2) it

has qualities that it does not have.” Deem, Black’s Law Dictionary (10th ed. 2014). The fact

that under the statute income is, in some contexts, “deemed” sufficient to establish earning

capacity strongly suggests that, in other contexts, income may not be the same as earning

capacity. Cf. Dwight v. Merritt, 140 U.S. 213, 218 (1891) (noting that the “phrase ‘nothing shall

                                                 11
be deemed scrap-iron except,’ etc., clearly shows that there might be other classes or kinds of

scrap-iron known to the trade than those mentioned . . . under that clause of the statute”).

Moreover, the “shall be deemed” provision is carefully cabined: it merely states that, if an

annuitant’s income rises above a certain threshold, then his “earning capacity” is “deemed

restored” and the annuity must be terminated. The statute does not provide that an income above

the threshold is necessary to terminate benefits, leaving open the possibility of showing by other

means that earning capacity has been restored. And the “shall be deemed” language has no

application whatsoever in the context of reestablishing benefits (the issue in this case), strongly

implying that earning capacity and income differ in that context, as well.

       Prior administrative decisions of the PFRRB provide additional support for the principle

that “earned income” and “earning capacity” are not always the same. Indeed, the PFRRB

adopted this position in Zoglio’s case in 1984. There, the PFRRB considered whether Zoglio’s

annuity should be terminated because he had been “restored to an earning capacity fairly

comparable to the current rate of compensation of the position occupied at the time of

retirement.” D.C. Code § 5-714(a)(1); see JA 273. Zoglio argued that the PFRRB could

consider only his personal income, not the revenues of his law firm, in determining his “earning

capacity.” JA 286-89. The PFRRB noted that Zoglio was “the sole owner, director, officer and

shareholder” of the firm, and that a “substantial portion of the [firm’s] income . . . is generated

by and derived from [his] work product.” JA 273. It concluded that a portion of the firm’s

income could be attributed to Zoglio individually. See JA 281. The PFRRB also reasoned, “[i]n

the alternative,” that “comparable earning capacity is the ability to earn and engage in gainful

activity.” Id. (emphasis added). Thus, even if the law firm’s income was not strictly speaking

                                                 12
Zoglio’s income, it still contributed to his earning capacity because he had control over the assets

of the firm. See id. at 281-82.

       Another PFRRB decision, from 2013, further supports the Secretary’s interpretation. In

that case, the PFRRB concluded that an annuitant was “ineligible to receive disability retirement

benefits if he reduced his income for reasons unrelated to his disability.” JA 299. To be clear,

the Court is not passing on the Secretary’s theory that disability must be the reason for any

cognizable decline in earning capacity. Nonetheless, this decision bolsters the general

proposition that “earning capacity” cannot be equated with “earned income.”

       The Secretary’s interpretation also finds support in District cases interpreting other

workers’ compensation statutes. Those cases recognize the principle that “actual wage-loss is

significant as the best evidence of loss of earning capacity, but obviously some adjustment based

on what the worker is ‘able to earn’ must be made.” Dent v. D.C. Dep’t of Emp’t Servs., 158
A.3d 886, 902 (D.C. 2017) (quoting Arthur Larson, The Wage-Loss Principle in Workers'

Compensation, 6 Wm. Mitchell L. Rev. 501, 525 (1980)). In particular, lost wages may not be

good evidence of lost earning capacity when the “claimant has voluntarily limited his earnings.”

Larson, supra, at 525. For example, in Powers v. District of Columbia Department of

Employment Services, 566 A.2d 1068 (D.C. 1989), the petitioner had injured his back and

continued working on lighter duty at the same rate of pay. Id. at 1068. He then voluntarily left

for a new job with higher pay, but soon had to quit because his new duties “were too rough on

his injured back.” Id. He was unemployed for five months before he found another job, and

sought workers’ compensation benefits for that five-month period. See id. His request was

denied. Id. The District of Columbia Court of Appeals upheld that decision, reasoning in part

that his “departure from his [former] job . . . voluntarily entail[ed] a risk of wage diminution as a

                                                 13
result of subsequent events.” Id. at 1069. Thus, if income declines due to a worker’s voluntary

decision to quit, his or her “earning capacity” may remain unchanged.

       Based on all the above, the Court easily concludes that the Secretary’s interpretation of

D.C. Code § 5-714(a) was reasonable, to say the least.

       Zoglio argues that this interpretation was incorrect and that “earning capacity” always

means “earned income” under the statute. But his arguments cannot carry the day.

       First, Zoglio relies heavily on the “shall be deemed” provision in D.C. Code § 5-

714(a)(2), arguing that it “defines ‘earning capacity’ as ‘income of the annuitant from wages or

self-employment or both.’” Pl.’s Br. at 9. But as explained above, he is mistaken: this provision

in fact works against his interpretation of the statute. His interpretation is not even consistent

with a prior decision in his own case. In 1984, the PFRRB concluded that Zoglio’s “earning

capacity” had been restored even if his “relevant income” had not been. JA 281-82.

       Next, Zoglio points to language in opinions of the District of Columbia Court of Appeals

that appear to equate “earning capacity” and “earned income.” Pl.’s Br. at 10-11. And in fact,

some of this language does seem to support his position at first blush. In Roberts v. PFRRB, 412
A.2d 47 (D.C. 1980), the court held that the statute “must be construed to allow an annuitant to

petition the Board for reestablishment of annuity as soon as his gross income has fallen below

the eighty percent level for any full year.” Id. at 51 (emphasis added). In McMullen v. PFRRB,

465 A.2d 364 (D.C. 1983) (per curiam), the court held “that there is one standard for determining

restoration to earning capacity,” namely when “earned income reaches or exceeds the 80%

limitation.” Id. at 366 (emphasis added). In Ridge v. PFRRB, 511 A.2d 418 (D.C. 1986), the

court held that the petitioner “was entitled to reestablishment of his disability annuity retroactive

to . . ., the first date of the year following that in which his income fell back below the 80%

                                                 14
eligibility limit.” Id. at 429 (emphasis added). And in Zoglio I, the court concluded that an

annuity can be reestablished upon “reduction of income below the statutory percentage ceiling.”
626 A.2d at 905 (emphasis added).

       Nonetheless, the Court is persuaded by the Secretary’s argument that this language is

dictum insofar as it suggests that “earning capacity” is always the same as “earned income.”

Def.’s Br. at 21-22. “If a court in reaching a decision has not considered a particular point, then

the connection of the decision with that point is not a connection of effect and cause, but is

purely accidental, and as to that point the decision is no authority whatever.” Umana v. Swidler

& Berlin, Chartered, 669 A.2d 717, 720 (D.C. 1995) (quoting United States v. Kucik, 844 F.2d
493, 498 (7th Cir.1988)) (internal quotation marks omitted). None of the cases cited in the

previous paragraph considered an argument that earning capacity and income are always the

same. Three simply assumed that “earned income” and “earning capacity” were the same in

those cases, apparently because the parties made that assumption as well. See Zoglio I, 626 A.2d

at 905; Ridge, 511 A.2d at 420-21; Roberts, 412 A.2d at 48-50. That is hardly surprising:

income will typically be the “best evidence” of earning capacity. Dent, 158 A.3d at 902 (quoting

Larson, supra, at 525). McMullen comes somewhat closer, as it did address the meaning of

“earning capacity.” In that case, the petitioner argued that, even though his income had risen

above the statutory threshold for termination, the PFRRB had discretion not to terminate his

annuity by finding that his “earning capacity” was lower than his income. 465 A.2d at 366. The

court rejected that argument, which was obviously inconsistent with the text of the statute. See

id. Ultimately, however, McMullen merely stands for the obvious proposition that income above

the statutory threshold is sufficient to establish “earning capacity” for the purpose of terminating

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benefits. McMullen says nothing about how to interpret “earning capacity” when considering an

application to reestablish benefits.

       Zoglio also makes various policy arguments that, in his view, suggest that the Secretary’s

interpretation was unreasonable. See, e.g., Pl.’s Reply at 5-6. For example, he argues that a rule

separating “earning capacity” from “earned income” “is meaningless and incapable of practical

application.” Id. at 5. The Court disagrees. The Secretary’s approach is workable, at least in

cases where there is evidence that the applicant voluntarily chose not to work.

       Zoglio makes two final points. First, he argues that the Secretary has acted in “bad

faith.” Id. at 21. However, he does not explain how this is relevant to the statutory construction

issue before the Court. While it is certainly regrettable that the DCRB initially mishandled his

case, Zoglio has not shown that he should therefore receive benefits to which he may not be

entitled. Second, he argues that the Secretary has unlawfully discriminated against him based on

his age. Id. at 20. Here, too, it is unclear how this is relevant; Zoglio has not asserted an equal-

protection claim in his complaint. See ECF No. 1. In any event, this theory is meritless. It is

true that D.C. Code § 5-714(a)(1) provides that, once an annuitant has reached the age of 50, his

benefits can no longer be terminated. But as the Zoglio I court explained, there are several

rational bases that could plausibly support this classification, meaning that it does not run afoul

of the Equal Protection Clause. See 626 A.2d at 907-08. And in any event, the termination

provision is irrelevant to this case. Zoglio’s benefits were terminated over 30 years ago. His real

complaint is that the reestablishment clause in the statute does not make special provision for

persons who have made it to retirement age. Zoglio is not so much complaining about age

discrimination as seeking more of it.

       Thus, Zoglio’s challenge to the Secretary’s interpretation of the statute fails.

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       As noted above, Zoglio appears to base his entire challenge to the Secretary’s decision to

deny reestablishing his annuity on this question of statutory interpretation. In other words,

nowhere does he argue that the Secretary’s decision was arbitrary and capricious (or otherwise

contrary to law) even if—as the Court has found—the Secretary reasonably determined that

“earning capacity” and “earned income” have different meanings under the statute. Certainly,

his motion papers do not clearly articulate any such challenge. And that is consistent with his

position before the agency, where he put all his “earning capacity” eggs in the “earned income”

basket. In every submission to ODCP, Zoglio rested his case solely on his earned income,

without addressing the possibility that it might not fully reflect his earning capacity. JA 9, 15,

96, 113. In fact, he expressly argued that ODCP, by virtue of having received his “income

information,” had “all the relevant information it need[ed] to make a decision.” JA 9.

       Thus, the Court concludes that the Secretary acted reasonably in determining that

Zoglio’s income evidence was insufficient to demonstrate a loss of his “earning capacity.” The

record contains numerous indications that Zoglio’s income might understate his earning capacity.

First, the PFRRB had previously terminated Zoglio’s benefits based on the revenues of his law

firm, which were generated in substantial part by his own work as an attorney. JA 270-85.

Second, Zoglio’s submissions indicated that his law firm remained a going concern: attorneys at

the firm continued to generate “legal work and fees” and “on occasion consult[ed]” with him.

JA 15. His wife also earned a modest salary for “administrative work” there. Id. Based on this

unrebutted evidence, the Secretary reasonably could conclude, and did conclude, that Zoglio’s

demonstrated “earned income” was insufficient to establish “earning capacity,” because he could

well have continued working as an attorney. JA 1, 7. To be sure, Zoglio pointed out that “he

was almost 80 years old,” JA 15, and also asserted that “his law firm did not make a profit in

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2014,” JA 114. But Zoglio never argued that his advanced age had forced him to retire, or that

his law firm could not have generated profits for him had he continued to work.

       The Court notes the narrowness of its decision. It concludes that, in this case, the

Secretary reasonably found that Zoglio did not establish that a reduced “earning capacity”

warranted reestablishment of his disability annuity under D.C. Code § 5-714(a)(2). The Court

does not reach the Secretary’s two other theories about how to interpret D.C. Code § 5-714: that

an applicant for reestablishment must also show that he remains disabled, and that the applicant’s

disability must be the cause for any loss in earning capacity.

       Finally, the Court notes that its ruling does not necessarily mean that Zoglio will be

forever left without a disability annuity. It may well be that his advanced age and other facts

could support an argument that his earning capacity has declined. He simply has not made that

argument. The Secretary has represented that Zoglio “is not precluded from filing a claim in the

future should the necessary conditions arise.” Def.’s Br. at 6 n.7 (citing JA 1). The Court has no

reason to doubt that, if Zoglio re-applies for reestablishment of his annuity, the DCRB and

ODCP will fully and fairly evaluate his application.

       Conclusion

       For all of the above reasons, the Court will grant the Secretary’s motion, deny Zoglio’s

motion, and enter judgment in the Secretary’s favor, in a separate order.

                                                             /s/ Timothy J. Kelly
                                                             TIMOTHY J. KELLY
                                                             United States District Judge

Date: October 4, 2018

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