Court Opinion

ID: 9478417
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:48:40.269149+00
Date Added: 2024-06-11T17:46:25.357965
License: Public Domain

MAYER, Circuit Judge,
dissenting.
There is no doubt that the Navy misinformed Richmond. Relying on the NaVy’á erroneous advice, he worked additional hours and increased his earnings above 80 percent of the pay of a government welder, his pre-disability retirement position, thereby relinquishing eligibility for benefits under the Civil Service Retirement Act. But the Navy’s misinformation is no reason for the court today to estop the government from recognizing that Richmond was, in fact, restored to earning capacity, and was no longer eligible to receive a disability annuity. This decision contravenes the express mandate of Congress in 5 U.S.C. § 8337(d) (Supp.1988), and Supremo Court precedent.
I agree with the court that Heckler v. Community Health Services of Crawford, 467 U.S. 51, 60, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984), left open the question of when, if ever, the government can be estopped from enforcing a validly promulgated statute. But this does not mean that we write on a clean slate. In Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685 (1981), a case strikingly similar to the one we decide today, Hansen sought a retroactive award of “mother’s insurance benefits” under the Social Security Act. But for the erroneous advice and negligent behavior of a field representative of the Social Security Administration, she would have received benefits for the period in question. The field representative had failed to familiarize himself with an amendment, then in effect for a year and a half, which afforded benefits to Hansen. Moreover, the field representative failed to follow an internal agency claims manual which expressly required him to advise Hansen that she should file a written application. Had she been so advised, the representative’s error would have been obviated, and benefits would have been forthcoming.
Nevertheless, the Supreme Court held that the field representative’s “errors ‘fal[l] far short’ of conduct which would raise a serious question whether [the government] is estopped from insisting upon compliance with the valid regulation” requiring a writ*302ten application as a prerequisite to the disbursement of benefits. . Id. at 790, 101 S.Ct. at 1472 (quoting Montana v. Kennedy, 366 U.S. 308, 314, 81 S.Ct. 1336, 1340, 6 L.Ed.2d 313 (1961)).. The Court said that “ ‘the duty of all courts to observe the conditions defined by Congress for charging the public treasury,’ ” id. 450 U.S. at 788, 101 S.Ct. at 1470 (quoting Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 385, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947)), is not abnegated by the plea of an eligible applicant who has lost benefits because of the erroneous advice of a government employee. That was a more meritorious case than ours because Hansen would otherwise have been entitled to benefits, and she at least approached the administering government agency for guidance, which Richmond did not. But this was not sufficient.
Community Health Services, too, held that the government could not be estopped, in that case from recouping funds mistakenly disbursed, even though the error was a direct result of the repeated failure of an agent of the government to provide correct information, and to follow correct administrative procedures. 467 U.S. at 57, 104 S.Ct. at 2222. The Court identified respondent’s inability to demonstrate that it had detrimentally relied on the government’s misconduct as fatal to its claim. As in that case, Richmond’s “detriment” is nothing more than “the inability to [ob]tain money that [he] should never have received in the first place.” Id. at 61, 104 S.Ct. at 2224.
Both Hansen and Community Health Services observed that respondents had suffered no irreparable injury. In Hansen, “at worst, [the field representative’s] conduct did not cause respondent to take action, ... or fail to take action, ... that respondent could not correct at any time.” 450 U.S. at 789, 101 S.Ct. at 1471. And in Community Health Services, “respondent lost no rights but merely was induced to do something which could be corrected at a latér time.” 467 U.S. at 62, 104 S.Ct. at 2225. This is precisely Richmond’s situation: his disability payments were fully restored when his pay fell below the statutory earnings threshold.
Until today, we followed those Supreme Court cases. In Riggs v. Office of Personnel Management, 709 F.2d 1486, 1488 (Fed.Cir.1983), for example, we relied on Hansen and held that OPM’s erroneous ruling, and Riggs’ consequent failure to meet a statutory precondition to entitlement, did not estop the government from enforcing the precondition and denying Riggs benefits.
The cases the court believes support its departure from precedent do not. National Corn Growers Ass’n v. Baker, 840 F.2d 1547 (Fed.Cir.1988), was restricted to the resolution of a jurisdictional issue, id. at 1550, and stands for nothing more than the unstartling proposition that “[t]he law is the law at the time of its existence, whether wrong or not, and ‘practical men’ have a right to rely on it at the time they perpetrate their actions.” Id. at 1555. It says nothing about the quite different proposition advanced by the court today, that citizens are entitled to rely on what, in fact, is not the law.
In USA Petroleum Corp. v. United States, 821 F.2d 622 (Fed.Cir.1987), the company was contractually bound to accept information provided by the government. In breach of its express and implied obligations to USA Petroleum, the government knowingly “foisted upon” the company incorrect data. Id. at 627. Recognizing the extraordinary exigency created by a situation in which a company “has no legal choice” but to accept the information provided by the government and to perform accordingly, we held that “[t]he equitable defense of estoppel is available to parties contracting with the government....” Id. at 625. In contrast to this case, USA Petroleum follows the Supreme Court. Hansen acknowledges that a different analysis may be in order if “the Government had entered into written agreements which supported the claim of estoppel.” 450 U.S. at 788 n. 4, 101 S.Ct. at 1471 n. 4.
In Frantz v. Office of Personnel Management, 778 F.2d 783 (Fed.Cir.1985), equitable estoppel was neither argued nor discussed.
*303I am willing to assume, as did the Supreme Court, that violation of “some minimum standard of decency, honor, and reliability” might estop the government, 467 U.S. at 61, 104 S.Ct. at 2224, but this envisions at least some form of egregious misconduct. Ours is not that kind of case. I also agree that it is deplorable that government employees paid to guide citizens through the bureaucratic maze sometimes fail to perform their duties responsibly, assuming that here it was the Navy’s responsibility to advise on OPM’s behalf, which is not beyond question. But it is axiomatic that “those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law.” Community Health Services, 467 U.S. at 63, 104 S.Ct. at 2225.
It seems to me that this is a particularly inappropriate case for making a chasm out of the crack the Supreme Court left open in Community Health Services. In section 8337(d) Congress set out a statutory definition of “earning capacity” of general applicability, eliminating the necessity of repeated particularized investigations. Regardless of why it happened, Richmond both met the statutory test of restored earning capacity and demonstrated that he was, in fact, restored to earning capacity. Section 8337 is a generous and salutary provision. But Congress certainly did not intend that beneficiaries gerrymand their earnings to get extra money from the taxpayers. Obviously the statute is susceptible of that abuse, but the court should not encourage it by the novel device of government estoppel in a case like this.