United States District Court, District of Columbia
S. CHUTKAN United States District Judge
Shar Lyn Foo alleges that the State Department and the
Foreign Service Grievance Board (“FSGB”) violated
the Administrative Procedure Act (“APA”), 5
U.S.C. § 706, when they determined that she was
ineligible to seek a waiver for the repayment of retirement
annuity overpayments. Plaintiff additionally asserts that the
regulation Defendants relied on for their determination, 22
C.F.R. § 17.7(a)(2), is invalid because it is not
authorized by, and conflicts with, the text of 22 U.S.C.
§ 4047(d). The parties have filed cross-motions for
summary judgment. (ECF Nos. 15, 18). Upon consideration of
the motions and the record, and for the reasons set forth
below, the parties' cross-motions are both GRANTED IN
PART and DENIED IN PART.
case concerns Defendants' attempt to collect on annuity
overpayments made to Plaintiff between 1997 and 2011. Shar
Lyn Foo is the daughter of Charles Foo, a former Foreign
Service officer who died in 1984. (FSGB Corrected Decision
(“FSGB Decision”) at 3 (Compl. Ex. 2)). Charles
Foo received retirement annuity payments from the State
Department's Foreign Service Retirement and Disability
System until his death in 1984, when his wife Lorna Foo began
receiving those benefits as a survivor annuitant.
(Id.). These annuity payments were deposited
directly into Lorna Foo's account at First Hawaiian Bank,
and in 1995 Plaintiff was added to this account as a
co-owner. (Id.; Compl. ¶ 32). After Lorna
Foo's death in November 1997, the State Department
continued to deposit monthly annuity payments into this bank
account until it realized its error and ceased the payments
in 2011. (FSGB Decision at 4-5; Compl. ¶ 43). Plaintiff
alleges that during the fourteen years, from 1997 to 2011,
she was unaware that the monthly deposits were survivor
annuity payments that should have ceased with her
mother's death; indeed, she was not aware of the source
or nature of the payments at all. (Compl. ¶¶
32-36). Plaintiff states that, as her mother requested, she
applied the monthly bank deposits to Lorna Foo's
condominium mortgage, and that Lorna had instructed Plaintiff
to give the condominium to Plaintiff's nephew when he
reached adulthood and the mortgage was paid. (Id.
2012, the State Department sent Plaintiff a letter informing
her that Lorna Foo's survivor annuity account had been
overpaid by $254, 343.99 and that Plaintiff was required to
repay that amount. (Id. ¶ 55; Def. Ex. 1). The
following month, Plaintiff's counsel sent a letter to the
State Department requesting a waiver of the collection under
22 C.F.R. § 17.2 because “[t]he alleged
overpayment is not the result of Shar Lyn's acts or
omissions and therefore Shar Lyn is without fault.”
(Def. Ex. 2 at 4; Compl. ¶ 56). Section 17.2(a) provides
that “[r]ecovery of an overpayment . . . may be waived
pursuant to [22 U.S.C. § 4047(d)] when the individual is
without fault and recovery would be against equity and good
conscience or administratively infeasible.” Nearly two
years later, the State Department responded to
Plaintiff's June 2012 letter and notified her that the
overpayment amount had been recalculated to $311, 703.00 and
that it could not consider her waiver request because
“[t]he Department is prohibited from waiving collection
of an overpayment to an estate under 22 C.F.R.
17.7(a)(2).” (Def. Ex. 3 at 1, 3; Compl. ¶¶
59-60). 22 C.F.R. § 17.7(a)(2) states that
“[w]aiver of an overpayment cannot be granted when . .
. [t]he overpayment was made to an estate.” Plaintiff
subsequently appealed the State Department's
determination to the FSGB in July 2014, primarily arguing
that she was eligible to seek a waiver because the annuity
payments were deposited directly into her own bank account,
not sent to an account associated with her mother's
estate. (Def. Ex. 5; Compl. ¶¶ 65-80).
FSGB issued its decision in May 2015, followed by a corrected
decision in early June 2015. (Compl. Exs. 1, 2). It found
that Plaintiff had failed to proffer substantial evidence
that the annuity payments were not made to Lorna Foo's
estate and therefore determined that Plaintiff was ineligible
for a waiver under 22 C.F.R. § 17.7(a)(2). (Id.
at 10-17). Plaintiff subsequently brought this suit
challenging the FSGB's decision.
motion for summary judgment in a suit seeking APA review, the
court must set aside any agency action that is
“arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. §
706(2). The court's review is “highly
deferential” and begins with a presumption that the
agency's actions are valid. Envtl. Def. Fund, Inc. v.
Costle, 657 F.2d 275, 283 (D.C. Cir. 1981). The court is
“not empowered to substitute its judgment for that of
the agency, ” Citizens to Pres. Overton Park, Inc.
v. Volpe, 401 U.S. 402, 416 (1971), but instead must
consider only “whether the agency acted within the
scope of its legal authority, whether the agency has
explained its decision, whether the facts on which the agency
purports to have relied have some basis in the record, and
whether the agency considered the relevant factors.”
Fulbright v. McHugh, 67 F.Supp.3d 81, 89 (D.D.C.
2014) (quoting Fund for Animals v. Babbitt, 903
F.Supp. 96, 105 (D.D.C. 1995)). The plaintiff bears the
burden of establishing the invalidity of the agency's
Ultra Vires Challenge to the State Department's Estate
Count II of her Complaint, Plaintiff alleges that the State
Department acted ultra vires and exceeded its
authority when it promulgated 22 C.F.R. § 17.7(a)(2),
which prohibits the waiver of repayment for an overpayment
made to an estate, and further that the FSGB acted ultra
vires in concluding that the estate rule was valid.
(Compl. ¶¶ 98-104). Plaintiff argues that this
estate rule is contrary to the text of the enabling statute,
22 U.S.C. § 4047(d), which provides the authority for
discretionary waivers of overpayment collections. Defendants
contend that the estate rule was lawfully promulgated as a
valid and reasonable interpretation of the statute.
parties agree that in order to evaluate Plaintiff's claim
that the estate rule is contrary to the statute, the court
must “begin [its] analysis with the first step of the
two-part framework announced in Chevron . . . and
ask whether Congress has ‘directly addressed the
precise question at issue.'” Mayo Found. for
Med. Educ. & Research v. United States, 562 U.S. 44,
52 (2011) (quoting Chevron, U.S.A., Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 843 (1984)). Under
step one of Chevron, the court first examines
“whether the intent of Congress is clear, ” and
if it is then “that is the end of the matter; for the
court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.”
Chevron, 467 U.S. at 842-43. If the statute is
“silent or ambiguous, ” then the analysis
proceeds to step two, where “the question for the court
is whether the agency's answer is based on a permissible
construction of the statute.” Id. at 843.
Chevron Step One
first step of the Chevron framework begins with an
evaluation of the statute's text using “the
traditional tools of statutory construction in order to
discern whether Congress has spoken directly to the question
at issue.” Eagle Broad. Grp., Ltd. v. FCC, 563
F.3d 543, 552 (D.C. Cir. 2009) (citing Chevron, 467
U.S. at 842-43). The court “looks to the text,
structure, and the overall statutory scheme, as well as the
problem Congress sought to solve.” Fin. Planning
Ass'n v. SEC, 482 F.3d 481, 487 (D.C. Cir. 2007).
“If this ‘search for the plain meaning of the
statute . . . yields a clear result, then Congress has
expressed its intention as to the question, and ...