Fed. Law Enf't Officers Ass'n v. Rigas

FEDERAL LAW ENFORCEMENT OFFICERS ASSOCIATION, Plaintiff v. MICHAEL RIGAS¹, Acting Director,United States Office of Personnel Management, et al., Defendants

Civil Action No. 19-735 (CKK)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

August 20, 2020

MEMORANDUM OPINION

This case concerns the 2016 decision of Defendants, the Director of the United States Office of Personnel Management and the United State Office of Personnel Management ("OPM"), to implement a policy which resulted in the reduction of supplemental annuity payments for many retired law enforcement officers who are divorced. Plaintiff, the Federal Law Enforcement Officers Association ("FLEOA"), represents 27,000 current and retired federal law enforcement officers and challenges the 2016 supplemental annuity payment policy ("Policy") under the Administrative Procedure Act ("APA"). FLEOA asserts a total of three claims against Defendants under the APA. In Count 1, Plaintiff contends that the Policy is arbitrary and capricious; in Count 2, Plaintiff claims that Defendants failed to engage in the proper rulemaking procedures under the APA; and, in Count 3, Plaintiff alleges that Defendants acted in excess of congressional authority by making the Policy retroactive.

Presently before the Court is Defendants' Motion to Dismiss and the associated supplemental briefings. Upon consideration of the pleadings², the relevant legal authorities, and the record as a whole, the Court shall DENY Defendants' Motion to Dismiss as it relates to Count One and Count Three of Plaintiff's Complaint. The Court has jurisdiction under the APA to review the Policy for being arbitrary and capricious or for being in excess of delegated authority. However, the Court shall GRANT Defendants' Motion as it relates to Count 2 as Defendants were not required to engage in notice and comment rulemaking procedures.

I. BACKGROUND

A. Factual Background

Pursuant to the Federal Employees Retirement System ("FERS"), federal government civilian employees may receive retirement benefits, such as annuities and Social Security. Compl., ECF No. 1, ¶ 6. Federal civilian employees who reach retirement age with the required number of service years are entitled to an annuity. Id. at ¶ 7. Certain employees, such as law enforcement officers, are eligible to retire at a younger age with fewer service years. Id. at ¶ 8.These employees are entitled to a supplemental annuity payment which substitutes for Social Security until the retiree reaches the minimum age to qualify for Social Security. Id.

According to Plaintiff, supplemental annuity payments are to "be treated in the same way" as basic annuity payments. Id. at ¶ 12 (quoting 5 U.S.C. § 8421(c)). Basic annuity payments can be paid to a person other than the retiree "if and to the extent provided for in the terms of [] any court decree of divorce, annulment, or legal separation, or the terms of any court order or court-approved property settlement agreement incident to any court decree of divorce, annulment, or legal separation." Id. at ¶ 9 (quoting 5 U.S.C. § 8467(a)(1)). In interpreting court orders, Defendants "perform[] purely ministerial actions," "must honor the clear instructions of the court," and "will not supply missing provisions, interpret ambiguous language, or clarify the court's intent by researching individual State laws." Id. at ¶ 10 (quoting 5 C.F.R. § 838.101(a)(2)).

Plaintiff claims that from the implementation of FERS until 2016, Defendants did not include supplemental annuity payments in the calculation of basic annuity payments to a retiree's former spouse pursuant to a court order unless that court order expressly called for the division of the supplemental annuity payment. Id. at ¶ 13. However, in July 2016, Defendants began apportioning supplemental annuity payments to former spouses of retirees where there was a court-ordered division of basic annuity benefits, even if the court order did not expressly call for the division of supplemental annuity payments. Id. at ¶ 15. Plaintiff contends that this change was prompted by Defendants' determination that 5 U.S.C. § 8421(c) required that supplemental annuity payments be apportioned to a former spouse whenever a court order required the apportionment of basic annuity payments. Id. at ¶ 16; 5 U.S.C. § 8421(c) (requiring that supplemental annuity payments "be treated in the same way" as basic annuity payments).

Also in July 2016, Plaintiff contends that Defendants calculated the supplemental annuity payment amounts that would have been due to the affected retirees' former spouses had the Policy been in effect from the date of their retirement or the date of the court order dividing basic annuity benefits. Id. at ¶ 17. Defendants notified the affected retirees of these amounts and began deducting the amounts owed in monthly installments from the annuity payments. Id. at ¶¶ 18-19.

Based on the Policy, Plaintiff brings three APA claims. In Count 1, Plaintiff alleges that the Policy is arbitrary and capricious because federal employee retirement benefits can be paid to another person only if expressly provided and the new Policy pays supplemental annuity payments to former spouses of retirees even if there is no court order expressly providing for the apportionment of supplemental annuity payments. Id. at ¶¶ 27-32. In Count 2, Plaintiff contends that the Policy constitutes agency action taken without observance of procedures required under the APA. Id. at ¶¶ 33-39. Specifically, Plaintiff alleges that Defendants' "reinterpretation" of FERS is a legislative rule for which Defendants failed to engage in proper rulemaking such as notice-and-comment procedures. Id. In Count 3, Plaintiff contends that Defendants acted in excess of congressional authority by improperly engaging in retroactive rulemaking. Id. at ¶¶ 40-44.

B. Procedural Background

On June 18, 2019, Defendants filed a [12] Motion to Dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction. Defendants present two jurisdictional grounds for dismissing Plaintiff's Complaint. First, Defendants contend that review of Plaintiff's APA claims is precluded by the Civil Service Reform Act ("CSRA"). Second, Defendants contend that Plaintiff lacks standing to bring its claims.

Ordinarily, an APA claim is properly dismissed where Congress has provided a separate statutory scheme with remedies for a plaintiff's claims. Fornaro v. James, 416 F.3d 63, 66 (D.C. Cir. 2005). The CSRA "cover[s] the field of federal employee claims." Filebark v. U.S. Dep't of Transportation, 555 F.3d 1009, 1014 (D.C. Cir. 2009). Pursuant to the CSRA, actions affecting federal employees are first reviewed by the OPM. 5 U.S.C. § 8347(a)-(c). Next, the United States Merit Systems Protection Board ("MSPB") reviews the "administrative action or order affecting the rights or interests of" the federal employee. 5 U.S.C. § 8461(d)(1). Following review by the MSPB, judicial review is exclusive with the Federal Circuit. 5 U.S.C. § 7703(b)(1). Because the CSRA provides a comprehensive remedial scheme for disputes as to retirement benefits, Defendants argue that the CSRA precludes review of Plaintiff's APA claims.

However, there is an exception to the CSRA's preclusion of APA claims whereby a district court can conduct pre-enforcement review of OPM rulemaking. In prior briefings, both parties recognized this exception. Defs.' Mot., ECF No. 12, 10-11; Pl.'s Opp'n, ECF No. 14, 6. However, the parties' prior briefings failed to fully or adequately brief the issue as to whether or not Defendants' Policy constitutes a "rule" which could be subject to pre-enforcement rulemaking review under the APA.

In a [25] Memorandum Opinion dated November 4, 2019, the Court denied without prejudice Defendants' motion pending further briefing on this issue. Specifically, the Court requested additional briefing as to the nature of the Policy and how the Court should decide whether or not the Policy is subject to pre-enforcement rulemaking review under the APA. Plaintiff and Defendants subsequently filed supplemental briefing on this issue. Briefing on the Defendants' Motion to Dismiss is now complete.

II. LEGAL STANDARD

Defendants move to dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction. A court must dismiss a case when it lacks subject matter jurisdiction. See Fed. R. Civ. P. 12(h)(3). In doing so, the Court may "consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Coal. for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003); see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) ("[T]he district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.").

"At the motion to dismiss stage, counseled complaints, as well as pro se complaints, are to be construed with sufficient liberality to afford all possible inferences favorable to the pleader on allegations of fact." Settles v. U.S. Parole Comm'n, 429 F.3d 1098, 1106 (D.C. Cir. 2005). Despite the favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence. Am. Farm Bureau v. Envtl. Prot. Agency, 121 F. Supp. 2d 84, 90 (D.D.C. 2000).

III. DISCUSSION

The Court concludes that Defendants' Policy constitutes a non-legislative, interpretive rule. Because Defendants' Policy is a non-legislative rule, Defendants were no required to go through notice and comment rulemaking. However, because the action still constitutes an interpretive rule, review under the APA is not fully precluded by the CSRA.

A. APA Review and CSRA Preclusion

An administrative action is reviewable under the APA...