Bokony v. U.S. Dep't of Def.

BRUCE H. BOKONY andBRANDON H. BOKONY PLAINTIFFS v. UNITED STATES DEPARTMENT OF DEFENSE,Secretary of Defense, Mark T. Esper;UNITED STATES DEPARTMENT OF THE NAVY,Secretary of the Department of the Navy,Richard V. Spencer; JEFF W. HUGHES,Commander Navy Personnel Command,Rear Admiral; and DOES,United States Navy Personnel Command DEFENDANTS

No. 4:19-cv-608-DPM

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS CENTRAL DIVISION

November 30, 2020

MEMORANDUM OPINION AND ORDER

This case is about benefits for a retired veteran's disabled son. Bruce Bokony retired from the United States Navy. He earned the right to retirement pay, plus various benefits for himself and his family. Bruce and his wife have a son, Brandon, who was born prematurely. After he turned eighteen, the Social Security Administration determined that Brandon is completely disabled. He is now in his thirties. He has always lived with his parents. When Bruce retired in 2004, he received information from the Navy about all his retirement benefits. That information told Bruce, among other things, that his eligible dependents would be entitled to medical benefits, and that an unmarried adult child who couldn't support himself because of a pre-existing physical or mental disability could qualify as a dependent. Several years later, in September 2012, Bruce turned sixty, which triggered his retirement benefits. As directed in the information the Navy had sent Bruce, he and Brandon went to the Little Rock Air Force Base to get ID cards, so their benefits could start flowing. Bruce recalls being asked only one question about Brandon's self-support: where does Brandon reside? Brandon received an ID card, a DD Form 1173—United States Uniformed Services Identification and Privilege Card. By the expiration date, the card reflected "INDEF." Doc. 1 at 7. Brandon received various benefits, including health insurance, for almost five years. During that period, Bruce began drawing social security, too. Brandon became eligible for child's insurance benefits, 42 U.S.C. § 402(d), and likewise began receiving them.

Difficulties began in August 2017. The Navy—the Court will use this shorthand for all the Department of Defense defendants—notified Bruce that Brandon's financial dependency on him had to be recertified every four years. It was time for this quadrennial review. The point of this review was to confirm that Bruce was providing more than half of Brandon's support. During the next two years, there were more forms, letters, and much back-and-forth between Bruce and the Navy. The conclusion: Bruce was not providing more than half of Brandon's support. Brandon's health insurance was terminated in January 2018.Bruce turned in Brandon's ID card in March of that year. During the back-and-forth, the Navy informed Bruce that a review had determined that no proper certification of Brandon's dependency had ever been done. Doc. 1 at 14. That discovery had kicked off the recertification process and ensuing difficulties. The Navy's final decision was without prejudice to reapplication based on additional information. Doc. 39 at 4.

Bruce responded with this case, seeking restoration of Brandon's benefits. He challenges the Navy's decision that Brandon doesn't qualify as his dependent for purposes of the controlling statute, 10 U.S.C. § 1072(2)(D)(iii), and he challenges how the Navy made that decision, both as a matter of due process and administrative procedures. The Navy answered. It acknowledged this Court's subject matter jurisdiction. Doc. 23 at 1. On the merits, the Navy defended its decision, saying nothing unconstitutional or unreasonable had occurred. It also reserved the right to plead other affirmative defenses that might appear as the case developed. Doc. 23 at 12. The parties filed various motions. After filing the administrative record, the Navy moved for remand. It requested the opportunity to do two things: reconsider on the merits, with more information if Bruce wanted to submit some; and respond to Bruce's detailed arguments from various statutes and regulations. The Navy's original decision was a bit cryptic, and Bruce's arguments were complicated. So, over Bruce's objection,the Court remanded the case, retained jurisdiction, and set a deadline for the Navy's decision on remand. Doc. 48.

Bruce chose not to submit additional information on remand. The Navy responded with a memorandum for the record, which explained the administrative process, plus the facts about Bruce and Brandon, in helpful detail. The Navy has clarified that, on the current record, Brandon's monthly social security child's insurance benefits are $39.11 more than one-half of his monthly expenses. Brandon, therefore, doesn't qualify as Bruce's dependent under 10 U.S.C. § 1072(2)(D)(iii). The Navy's memorandum did not, however, address all of Bruce's contentions about the statutory scheme or regulations involved. The Court requested another round of briefs. They're pointed and illuminating. And the Navy's brief engages Bruce's legal arguments.

The Navy opens with a new point: no subject matter jurisdiction. This statute provides that a "determination of dependency by an administering Secretary under this chapter is conclusive. However, the administering Secretary may change a determination because of new evidence or for other good cause. The Secretary's determination may not be reviewed in any court or by the Comptroller General, unless there has been fraud or gross negligence." 10 U.S.C. § 1084. A court's power to act is always an open question, a matter that cannot be waived or forfeited. Gonzalez v. Thaler, 565 U.S. 134, 141 (2012). The Navy's contrary position earlier in the case therefore doesn't make any legaldifference. Administrative decisions are presumptively reviewable by a court, Block v. Community Nutrition Institute, 467 U.S. 340, 349 (1984), but Congress can eliminate jurisdiction by speaking in plain terms, Lindahl v. Office of Personnel Management, 470 U.S. 768, 778 (1985). It did so here.

The Court is unpersuaded by Bruce's argument that the statute removes jurisdiction only when the Navy determines that a child is dependent. On that reading, the statute would have little work to do—the Secretary and the parent would agree about the child's dependency, and no one would be seeking redress in court. The better reading is that the Secretary's decision—pro or con—on dependency is always open for reconsideration by the Secretary but may not be reviewed by a court absent fraud or gross negligence. Wheeler v. United States, 11 F.3d 156, 158-59 (Fed. Cir. 1993). Bruce does not allege either one. This Court, therefore, has no power to review the Navy's ultimate determination that Brandon is not Bruce's dependent. That is not the end of the case, though.

Notwithstanding a clear jurisdiction-stripping provision like 10 U.S.C. § 1084, this Court retains authority to address constitutional claims. Lindahl, 470 U.S. at 791; see also Hata v. United States, 23 F.3d 230, 233 (9th Cir. 1994). And the Bokonys plead and argue that the Navy violated the Fifth Amendment's Due Process Clause in terminating Brandon's benefits. "The essential requirements of dueprocess" are "notice and an opportunity to respond." Cleveland Board of Education v. Loudermill, 470 U.S. 532, 546 (1985). The Navy notified the Bokonys that it was reviewing Brandon's eligibility. It gave the family many opportunities to submit information and explain Brandon's expenses, his income, and how Mr. and Ms. Bokony supported their son. Many of the applicable Navy policies and manuals are publicly available. The Defense Finance and Accounting Service Instruction—which the Navy used to calculate whether Bruce provides more than half of Brandon's support—was a part of the administrative record. Apparently it was not available to the public and had not been provided to the Bokonys during the back-and-forth. On remand, however, the family had the opportunity to submit more information for reconsideration in light of this guidance document and in general. In sum, the Navy didn't violate the Bokonys' due process rights because it notified them, and gave them many opportunities to be heard, before making a final decision about Brandon's benefits.

As to the bottom line—is Brandon Bruce's dependent?—the Navy's decision is beyond the Court's reach. As to how the Navy decided—its method—the Court has subject matter jurisdiction to evaluate alleged errors of law and procedure. Judicial "review is available to determine whether there has been a substantial departure from important procedural rights, a misconstruction of the governing legislation, or some like error going to the heart of the administrativedetermination." Lindahl, 470 U.S. at 791 (quotation omitted). In this case, there's overlap between the Bokonys' constitutional claims and their other claims about legal error, arbitrariness, and unreasonableness in the administrative process. The parties argue the issues in terms of the Administrative Procedure Act. And the Court will address the Bokonys' claims about the particulars of the Navy's method of evaluating dependency in those terms.

The Bokonys' contend that the Navy acted unfairly and misconstrued the governing statute in making its decision. Brandon got what the statute described as a "permanent" ID card, 10 U.S.C. § 1060b(a), which showed "INDEF" as the expiration date, Doc. 1 at 7, and then the Navy took it away. The Navy's actions, the family argues, create an estoppel. This argument fails for two reasons. First, in general estoppel is not available against the federal government. Green v. United States Department of Labor, 775 F.2d 964, 969-70 (8th Cir. 1985). Second, the statute leaves the door ajar for reconsideration. The "administering Secretary may change a determination because of new evidence or for other good cause." 10 U.S.C. § 1084. In these words, Congress left open the possibility that those found not...