Boyd v. Office of Pers. Mgmt.
851 F.3d 1309 (Fed. Cir. 2017)
Authored by Kevin Sipe
Statement of Facts: On March 2, 2011, after a 25-year career with the United States Postal Service, Robin Boyd (“petitioner”) applied for immediate retirement based on disability. After applying for disability benefits under the Federal Employee Retirement System (“FERS”), petitioner received a letter from the Office of Personnel Management (“OPM”) on June 21, 2011 approving her application. The letter stated that her reward would be delayed until OPM had received confirmation that petitioner had applied for Social Security disability benefits. Any disability payments petitioner received was to offset petitioner’s FERS award, and she was instructed to not negotiate any Social Security checks until after her FERS reward had been reduced.
The Social Security Administration (“SSA”) advised petitioner on August 18, 2012 that she was entitled to monthly benefits, and petitioner provided OPM with a copy of that notice in September of that year. OPM did not immediately reduce petitioner’s FERS benefit, and petitioner negotiated her Social Security checks. On January 20, 2013, OPM notified petitioner that she had been overpaid $3,322 from August 2012 through December 2012 and would need to pay monthly installments of $92.27 to offset the overpayment. On February 6, 2013, petitioner requested a waiver of her obligation to reimburse OPM, citing financial hardship, and OPM replied on December 8, 2014, advising her of the requirements of the waiver and requesting an updated Financial Resources Questionnaire. Having not received the requested document, OPM denied her request for a waiver on January 16, 2015.
Procedural History: Petitioner appealed OPM’s decision to the Merit Systems Protection Board (“MSPB”), electing to receive all notifications of filings and orders through an e-filing system. On February 10, 2015, the administrative judge assigned to petitioner’s case ordered her to provide any additional evidence to support her appeal within 30 days. Petitioner did not file any documents and did not respond to the administrative judge’s subsequent Show Cause Order. Based on the written record, the administrative judge affirmed OPM’s denial of petitioner’s waiver because the petitioner was at least partially at fault due to her negotiation of Social Security checks.
Petitioner filed a petition for review by the full MSPB, alleging that she had not received any communications from the administrative judge because her fiancé had deleted the relevant emails by mistake. The MSPB affirmed the administrative judge’s decision, concluding that she was not entitled to a waiver. Petitioner then filed a petition for review to the Federal Circuit.
Questions Presented: (1) Whether the MSPB abused its discretion by determining that petitioner was at fault for her overpayment. (2) Whether the MSPB abused its discretion by failing to consider financial hardship evidence submitted by petitioner to OPM and the MSPB. (3) Whether the MSPB abused its discretion by finding that she had not shown good cause for failure to respond to the administrative judge’s electronic communications.
Holdings: (1) The Federal Circuit found the conclusion that petitioner was at fault for her overpayment to be legally erroneous. (2) The Federal Circuit remanded the question to the MSPB to determine if petitioner had knowledge of the overpayment. (3) The Federal Circuit found that the MSPB did not abuse its discretion in not allowing petitioner to late file an answer because petitioner did not exercise due diligence in following the case. The Federal Circuit thus vacated the Board’s decision due to its erroneous application of the overpayment recovery statute and remanded the proceeding for further consideration of Petitioner’s claim.
- Petitioner’s Fault Regarding the Overpayment
5 U.S.C. § 8346(b) provides that OPM has the authority to determine what constitutes “fault.” OPM has done so through 5 C.F.R. § 831.1401 and policy guidelines, stating that an individual is without fault in regards to overpayment “if he/she performed no act of commission or omission which resulted in the overpayment.” An individual is at fault if “he/she accepted a payment which he/she knew to be erroneous [or] should have known to be erroneous.” Policy Guidelines § I.B.3. Additionally, the regulations state that recovery can be waived under equity and good conscience if it “would cause financial hardship to the person from whom it is sought.” 5 C.F.R. § 831.1403(a)(1) (2016).
OPM has crafted an exception to the determination of fault known as the Prompt Notification Exception. Policy Guidelines § I.B.6. The exception states,
“Individuals who accept a payment in excess of the amount to which they are entitled will automatically be found, without fault, regardless of whether they knew or should have known that the payment was erroneous, if they promptly contact OPM and question the correctness of the payment. In general, an individual must contact OPM within 60 days of the receipt of the overpayment—i.e., a one-time prompt notification requirement.”
OPM ignores the Prompt Notification Exception, despite the MSPB applying the Exception in similar cases. In James v. Office of Pers. Mgmt., the MSPB found that notifying OPM of receipt of Social Security payments satisfied the “prompt notification” requirement and absolved all fault. 72 M.S.P.R. 211, 218 (1996); see also Maxwell v. Office of Pers. Mgmt., 78 M.S.P.R. 350, 361 (1998) (“OPM stipulated [that] the appellate was ‘without fault’”). Therefore, because the MSPB had applied the Prompt Notification Exception in similar circumstances, the Federal Circuit holds that it applies to petitioner.
OPM argues that even if the Prompt Notification Exception applies, it does not justify a waiver because petitioner has not shown “exceptional circumstances.” Boyd v. Office of Pers. Mgmt., 851 F.3d 1309, 1315 (Fed. Cir. 2017). OPM argues that such circumstances only apply when there are “extremely egregious errors or delay by OPM.” Policy Guidelines § I.C.4. This is known as the Set-Aside Rule. However, the Set-Aside rule does not apply to individuals who do not know or suspect they are being overpaid. Id. Because the analysis is different for unknowing individuals, the Federal Circuit found that financial hardship could still be used to waive a recovery against the petitioner.
- Petitioner’s Failure to Respond to E-Filing
Petitioner argues that her fiancé deleting the emails sent by the administrative judge constitutes “good cause.” Under 5 C.F.R. § 1201.12, “[a] judge may, for good cause shown, waive a MSPB regulation unless a statute requires application of the regulation.” The MSPB rejected petitioner’s argument due to a precedent that failure to use due diligence in monitoring a case did not constitute good cause. Rocha v. Merit Sys. Prot. Bd., 688 F.3d 1307, 1311 (Fed. Cir. 2012).
Petitioner accepted e-filing as a proper means of service, and therefore consented to receive MSPB communications exclusively via email. See 5 C.F.R. § 1201.14(e)(1) (2016) (“Registration as an e-filer constitutes consent to accept electronic service of . . . documents issued by the [MSPB].”). Additionally, petitioner is required to properly monitor her proceedings, even if the emails were mistakenly deleted. See 5 C.F.R. § 1201.14(j)(3) (“[Petitioner] is responsible for monitoring [her] case activity at the Repository at e-Appeal Online to ensure that [she] ha[d] received all case-related documents.”). Thus, the Federal Circuit found that petitioner did not have good cause for her failure to reply to the administrative judge’s orders.
Despite petitioner’s lack of good cause for failure to respond to administrative judge’s directions, the administrative judge’s decision, as sustained by the MSPB, was still based on an incomplete application of 5 U.S.C. § 8346(b) and was therefore vacated and remanded for further proceedings.