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Federal Law Enforcement Officers Association v. Cabaniss

United States District Court, District of Columbia

November 4, 2019

FEDERAL LAW ENFORCEMENT OFFICERS ASSOCIATION, Plaintiff
v.
DALE CABANISS[1], Director, United States Office of Personnel Management, et al., Defendants

          MEMORANDUM OPINION

          COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE.

         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 under the Administrative Procedure Act (“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. Defendants move for dismissal on two jurisdictional grounds. First, Defendants argue that Plaintiff's APA claims are precluded by the Civil Service Reform Act (“CSRA”). Second, Defendants contend that Plaintiff lacks standing to bring its claims.

         Upon consideration of the pleadings[2], the relevant legal authorities, and the record as a whole, the Court DENIES WITHOUT PREJUDICE Defendants' motion. Prior to deciding Defendants' jurisdictional arguments, the Court first must determine whether or not Defendants' 2016 supplemental annuity payment policy constitutes a “rule” which could be subject to pre-enforcement rulemaking review under the APA. And, while the parties provided fulsome briefing as to their jurisdictional and standing arguments, the parties did not provide adequate briefing as to this specific issue.

         Specifically, the parties should provide details about the nature of the 2016 supplemental annuity payment policy, such as whether or not Defendants captured the new policy in writing in any way. The Court further requires additional briefing as to whether or not Defendants were permitted to re-interpret their obligations pursuant to the statute without engaging in a rulemaking process. The parties should explain what indicia signal whether the 2016 supplemental annuity payment policy is the type of statutory re-interpretation that does or does not require a rulemaking process. Additionally, insofar as Plaintiff contends that the 2016 supplemental annuity payment policy should be treated as a rule despite the lack of a rulemaking process, Plaintiff should cite cases in which courts have agreed to treat statutory reinterpretations as rules.

         I. 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 spurred 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 2016 supplemental annuity payment 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. Plaintiff highlights that the Inspector General for OPM determined that the 2016 supplemental annuity payment policy constituted a rule within the meaning of the APA which can only be implemented through notice-and-comment rulemaking. Id. at ¶ 24. In Count 3, Plaintiff contends that Defendants acted in excess of congressional authority by improperly engaging in retroactive rulemaking. Id. at ¶¶ 40-44.

         In their Motion to Dismiss, Defendants argue that each of Plaintiff's Counts should be dismissed because the CSRA precludes Plaintiff's claims and because Plaintiff lacks standing. As will be further explained below, prior to resolving these jurisdictional issues, the Court requires additional briefing as to the nature of the 2016 supplemental annuity payment policy and how the Court should decide whether or not the policy should be subject to pre-enforcement rulemaking review under the APA.

         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) (internal quotation marks omitted)); 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 ...


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