Court Opinion

ID: 9498957
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:33:30.259127+00
Date Added: 2024-06-11T17:59:11.394527
License: Public Domain

DYK, Circuit Judge,
dissenting.
I respectfully dissent from the majority’s holding that the Merit Systems Protection Board (“MSPB”) lacks jurisdiction to determine whether the Office of Personnel Management (“OPM”) improperly deducted amounts for life insurance from the petitioner’s annuity payments. In my view the majority opinion rests on a misunderstanding of the 1978 Civil Service Reform Act (“CSRA”), Pub.L. 95-454, 92 Stat. 1111 et seq., and of the limited provision for court jurisdiction over life insurance claims enacted in 1954 and now appearing in 5 U.S.C. § 8715.
I
Before the CSRA legislation of 1978, claims for payment of federal annuities could be brought in the Court of Claims or district courts under the Tucker Act or the Little Tucker Act. See Lindahl v. Office of Pers. Mgmt., 470 U.S. 768, 772-73, 105 S.Ct. 1620, 84 L.Ed.2d 674 (1985); Dismuke v. United States, 297 U.S. 167, 172, *138256 S.Ct. 400, 80 L.Ed. 561 (1936); see also 28 U.S.C. § 1346(a)(2) (2000); 28 U.S.C. § 1491 (2000). But in 1978, as described by the Supreme Court in Lindahl, Congress placed exclusive jurisdiction in the Merit Systems Protection Board (“MSPB”) to adjudicate annuity claims which had previously been within the jurisdiction of the Court of Claims and the district courts. Lindahl, 470 U.S. at 773-74, 105 S.Ct. 1620. Congress “comprehensively overhauled the civil service system,” and created the OPM and the MSPB. Lindahl, 470 U.S. at 773, 105 S.Ct. 16201; see CSRA §§ 201, 202, 92 Stat. 1118-31. The CSRA created a specialized review process for resolving claims relating to retirement benefits. Today this system governs claims under both the Civil Service Retirement System (“CSRS”) and the Federal Employees Retirement System (“FERS”). The system calls for the OPM, in the first instance, to adjudicate any claim arising under the retirement system. See 5 U.S.C. §§ 8347(a)-(b), 8461(b)-(c) (2000). Next, OPM decisions which affect “the rights or interests of an individual” under FERS or CSRS are appealable to the MSPB. See 5 U.S.C. §§ 8347(d)(1), 8461(e)(1). Finally, an employee can appeal a decision of the MSPB to this court, which has exclusive jurisdiction over such appeals. See 5 U.S.C. § 7703(b)(1) (2000); 28 U.S.C. § 1295(a)(9) (2000); Lindahl, 470 U.S. at 774,105 S.Ct. 1620.
The question presented here is whether the legitimacy óf a government deduction from an annuity otherwise due an employee (basically a defense to the annuity claim) is to be litigated before the MSPB in a proceeding claiming the annuity, or in a suit in the Court of Federal Claims or the district courts.
While the annuity claim arises under the provisions of FERS, 5 U.S.C. §§ 8401-79, the right to the offset was created by 5 U.S.C. § 8707(b), a provision of the Federal Employees Group Life Insurance Act (“FEGLIA”). Thus, the employee’s request for an unreduced amount depends both on interpretations of FERS (the amount of the annuity) and FEGLIA (the amount of the reduction). At common law the legitimacy of an employer’s deduction from employee compensation was litigated in a suit to recover the compensation. The employee would sue for the unpaid compensation, and the employer would defend on the ground that it had a no obligation to pay the full amount because it had a right to deduct the premium. The majority rejects this approach with respect to federal annuity claims. To the extent the majority may suggest that the MSPB is without jurisdiction to decide cases that turn on the interpretation of statutes (such as FEGLIA) not within its immediate grant of jurisdiction, that is plainly incorrect. The MSPB frequently decides such cases and interprets both federal and state statutes that are outcome determinative.2
*1383Thus where, as here, a retired employee initiates a proceeding to recover an annuity, the MSPB has jurisdiction — indeed exclusive jurisdiction — to adjudicate the claim for an annuity, and in doing so may adjudicate a government defense that the annuity was properly reduced by life insurance premiums.
II
Ultimately, the majority opinion appears to rest its decision on the ground that 5 U.S.C. § 8715 requires that suits contesting improper life insurance deductions be initiated in the courts. However, there is no indication in section 8715 that that jurisdictional provision was designed to be exclusive. The language of the statute and its legislative history suggest that the statute was designed to allow an employee to bring cases in the district court without regard to the dollar limit of the Little Tucker Act.
In my view it is particularly clear that section 8715 could not have been designed to force claimants to litigate annuity claims in the Court of Federal Claims and the district courts. Section 8715 provides that “[t]he district courts of the United States have original jurisdiction, concurrent with the United States Court of Federal Claims, of a civil action or claim against the United States founded on this chapter.” 5 U.S.C. § 8715 (2000). As the majority appears to recognize, “arising under” jurisdiction often depends on the way that a plaintiff chooses to frame a complaint. Here the petitioner’s claim to an annuity could be framed as arising under FERS or as arising under FEGLIA. If a complaint were framed as simply a request for .a withheld annuity, it would not arise under FEGLIA, even thought the United States could defend on the ground that the deductions were proper under FEGLIA. See, e.g., Holmes Group, Inc. v. Vomado Air Circulation Sys., Inc., 535 U.S. 826, 830, 122 S.Ct. 1889, 153 L.Ed.2d 13 (2002). In other words, this is not a case in which petitioner’s claim necessarily arises under FEGLIA. There is also nothing in the language or history of FEGLIA that suggests that section 8715 was designed to compel that litigation of all interpretive issues under FEGLIA be brought under that provision.
The predecessor of section 8715 was enacted in 1954 as part of FEGLIA, which “was designed to provide low-cost group life, accidental death and dismemberment insurance to Federal employees in sums approximating their annual salaries.” Walker v. United States, 161 Ct.Cl. 792, 797 (1963). The purpose of the jurisdictional provision, as described in the accompanying Senate Report, was to “extend the jurisdiction of United States District Courts above the $10,000 limitation now in effect [under the Tucker Act].” S.Rep. No. 83-1654 at 4-5 (1954), as reprinted in 1954 U.S.Code Cong. & Admin. News, at 3052; see Walker, 161 Ct.Cl. at 798-99. Other than eliminating the $10,000 limit, the provision was not designed to extend court jurisdiction beyond what was already pro*1384vided by the Tucker Act. Walker, 161 Ct. Cl. at 798-99.
The purpose of section 8715 was thus quite limited. Under FEGLIA, the United States did not itself write policies of insurance, but rather arranged for private group policies for United States employees. Walker, 161 Ct.Cl. at 799. Normally disputes concerning the recovery of policy proceeds would be brought against the private insurance company, not the United States. ■ The evident purpose of section 8715 was to clarify that claimants to the proceeds of life insurance policies of employees could sue the United States in the courts if the United States failed to arrange for or permit the purchase of insurance. There is not the slightest indication in the language or legislative history of section 8715 that the statute was designed to confer jurisdiction in the courts to determine the rights of the annuitants to recover annuities or contest adjustments to annuities.
The limited purpose of section 8715 is confirmed by the cases decided under this provision. See Lewis v. Merit Sys. Protection Bd., 301 F.3d 1352, 1353 (Fed.Cir.2002); Walker, 161 Ct.Cl. at 800; Barnes v. United States, 307 F.2d 655, 657-58 (D.C.Cir.1962). For example, in Barnes, the District of Columbia Circuit held that it had jurisdiction over a suit by the widow of a retired government employee to secure funds allegedly owed to her under a group insurance policy arranged for by the United States. Id. at 657-58. The questions were whether the policy lapsed because the employee failed to convert the group policy to an individual policy upon his separation from service, and whether the government had provided adequate notice of the conversion rights. The court affirmed the dismissal of the claim, holding that the government had not “failed in the performance of any duty arising under the Act,” because the employee’s superiors had notified him of his right to convert. Id. at 659. See also Walker, 161 Ct.Cl. at 800 (dismissing a widow’s claim to insurance proceeds because the government, which had notified employee of his right to convert, had not “breach[ed] ... any obligation owed by it under the life insurance act.”). More recently, in Lewis, we held that an allegation that OPM breached a duty to permit an employee to purchase additional life insurance must be brought in the courts under section 8715. Lewis, 301 F.3d at. 1354. None of these cases has held or suggested that annuity claims or claims contesting annuity deductions must be brought under section 8715 in the district courts or the Court of Federal Claims.
In short, section 8715 was designed to provide court jurisdiction to determine claimed rights to life insurance by federal employees, not compel federal employees to litigate the propriety of particular deductions for life insurance in the Court of Federal Claims or district courts.
III
The effect of today’s decision is to bifurcate the claims process that was created by the 1978 legislation. If the annuity case involves an interpretation of the provisions of FERSA, the claim must be pursued before the MSPB. If the ground for denying the annuity rests on some other statutory provision, such as the provisions of FEGLIA at issue here, jurisdiction lies in the district courts and the Court of Federal Claims under the Tucker Act. In my view there is no basis for fragmenting suits for recovering annuity payments, and such fragmentation appears to be contrary to the purpose of the CSRA legislation which gives exclusive jurisdiction to the MSPB over annuity claims.
*1385It is entirely counterintuitive that Congress would have wished to require employees to litigate the propriety of deductions in the courts rather than before the MSPB. Bringing suit in district court imposes a significantly greater burden on employees than seeking review through the MSPB’s administrative procedures. Today’s decision thus requires disputes involving relatively small amounts to be resolved in the more expensive forum. Furthermore, an employee challenging both the method by which an annuity is calculated and the merits of a FEGLIA deduction is forced to split its claim between the courts and the MSPB. So too, it appears that the Board exercises jurisdiction over decisions whether to waive the government’s right to recover overpayments if the government fails to deduct the proper amount for life insurance premiums. See 5 U.S.C. § 8470(b) (2000); 5 C.F.R. § 845.301 (2005); Mitchell v. Office of Pers. Mgmt., 97 M.S.P.R. 566, 570-71 (2004). While the majority purports to reserve the question, Maj. Op. at 1381, today’s decision would again require bifurcation of such claims, with litigation of the deduction issue in the Court of Federal Claims or district courts and the waiver issue in the MSPB.
Finally the majority expresses concern that because of the Debt Collection Act, 31 U.S.C. § 3716, the Board might be required to adjudicate the merits of various debt claims by the government in cases in which the annuity was reduced because of an offset for a government debt. But the Debt Collection Act itself provides a specific mechanism for the determination of the merits of the debt. The statute provides that the agency must determine whether the debt is owed, see 31 U.S.C. § 3716(a), and the courts have assumed that the agency decision is reviewable under the APA. See DRG Funding Corp. v. Sec’y of Hous. and Urban Dev., 76 F.3d 1212, 1214 (D.C.Cir.1996); cf. Lockhart v. United States, 376 F.3d 1027, 1028-29 (9th Cir.2004), aff'd, — U.S. -, 126 S.Ct. 699, 163 L.Ed.2d 557 (2005). In the present situation, Congress has provided no special procedure in section 3716(a) or elsewhere where issues as to the propriety of premium deductions must be adjudicated. The proper place for the determination lies in the MSPB on review of an annuity claim.
For the foregoing reasons, I respectfully dissent.

. Lindhal addressed the effect of a finality provision that was first enacted in 1948, when annuity claims were still reviewable by the district courts and Court of Claims. Lindahl, 470 U.S. at 773, 105 S.Ct. 1620. The current version of that provision provides that "decisions ... [of the designated administrative agency] concerning these matters are final and conclusive and are not subject to review.” 5 U.S.C. § 8347(c) (2000). The Court held that this provision barred the review of the "factual underpinnings” of disability determinations under the CSRA but permitted review of substantial procedural issues. Lindahl, 470 U.S. at 791, 105 S.Ct. 1620.

. Dickey v. Office of Pers. Mgmt., 419 F.3d 1336, 1339-40 (Fed.Cir.2005) ("In determining whether a common-law marriage existed, we must apply the laws of the state where the government employee had a permanent home when he or she died ....”); White v. Dep’t of Justice, 328 F.3d 1361, 1368-70 (Fed.Cir.2003) (affirming Board decision that petitioner had been convicted of "a misdemeanor crime of domestic violence" within the mean*1383ing of 18 U.S.C. § 921(a)(33), and thus was ineligible to carry a firearm under 18 U.S.C. § 922(g)(9)); Wiley v. Dep’t of Justice, 328 F.3d 1346, 1357 (Fed.Cir.2003) (reversing Board determination that the search of petitioner's car was reasonable within the meaning of the Fourth Amendment); O’Neill v. Dep’t of Hous. and Urban Dev., 220 F.3d 1354, 1356, 1363 (Fed.Cir.2000) (holding that the Board erred in determining that petitioner was an "agent” within meaning of statute prohibiting federal employee from acting as agent of private party before government agency); cf. King v. Nazelrod, 43 F.3d 663, 666 (Fed.Cir.1994) (holding that an agency is required to prove all elements of the criminal offense with which petitioner is charged).