Office of Personnel Management v. Richmond

• Decision Date: 11 June 1990
• Docket Number: No. 88-1943,88-1943
• Citation: 110 S.Ct. 2465,496 U.S. 414,110 L.Ed.2d 387
• Parties: OFFICE OF PERSONNEL MANAGEMENT, Petitioner v. Charles RICHMOND
• Court: U.S. Supreme Court

496 U.S. 414

110 S.Ct. 2465

110 L.Ed.2d 387

OFFICE OF PERSONNEL MANAGEMENT, Petitioner

v Charles RICHMOND.

No. 88-1943.

Argued Feb. 21, 1990.

Decided June 11, 1990.

Rehearing Denied Aug. 13, 1990.

See 497 U.S. 1046, 111 S.Ct. 5.

Syllabus

Not wishing to exceed a statutory limit on earnings that would disqualify him from continuing to receive a disability annuity based on his years of civilian service with the Navy, respondent Richmond sought advice from Navy employee relations personnel and received erroneous oral and written information. When Richmond's reliance on the information caused him to earn more than permitted by the relevant statute, petitioner, the Office of Personnel Management (OPM), denied him six months of benefits. The Merit Systems Protection Board denied his petition for review, rejecting his contention that the erroneous advice given him should estop OPM and bar its finding him ineligible for benefits under the statute. The Court of Appeals reversed, ruling that the misinformation estopped the Government, and that the estoppel required payment of benefits despite the statutory provision to the contrary.

Held: Payments of money from the Federal Treasury are limited to those authorized by statute, and erroneous advice given by a Government employee to a benefits claimant cannot estop the Government from denying benefits not otherwise permitted by law. Pp. 419-434.

(a) Although dicta in some recent cases—e.g., Montana v. Kennedy, 366 U.S. 308, 314-315, 81 S.Ct. 1336, 1340-1341, 6 L.Ed.2d 313; INS v. Hibi, 414 U.S. 5, 8, 94 S.Ct. 19, 21, 38 L.Ed.2d 7 (per curiam )—have suggested, contrary to the Court's long-recognized rule, that there might be situations in which employee misconduct could give rise to estoppel against the Government, the Court has reversed, often summarily, every lower court finding of estoppel it has reviewed. The Court need not, however, address the Government's suggestion that, in order to avoid confusion in this area, the Court should adopt a flat rule that estoppel will never lie against the Government. A narrower ground of decision controls the type of suit presented in this case. Pp. 419-424.

(b) A claim for payment of money from the Public Treasury contrary to a statutory appropriation is prohibited by the Appropriations Clause of the Constitution, Art. I, § 9, cl. 7, which provides in effect that such money may be paid out only as authorized by a statute. Thus, judicial use of the equitable doctrine of estoppel cannot grant respondent a money remedy that Congress has not authorized. Recognition of equitable estoppel could render the Appropriations Clause a nullity if agents of the Executive were able, by their unauthorized oral or written statements to citizens, to obligate the Treasury contrary to the wishes of Congress. Where Congress wishes to recognize claims for estoppel, it knows how to do so, as it has done by statute in the past. Pp. 424-429.

(c) This decision is supported by the Court's estoppel precedents, which have never upheld an estoppel claim against the Government for the payment of money; by provisions of the Federal Tort Claims Act (FTCA) which authorize private suits against the Government based on its agents' torts, but exclude misrepresentation claims similar to Richmond's; and by Congress' historical and continuing practice of reserving to itself the power to address hardship claims arising from misinformation or erroneous advice given by Government officials. Although Congress has made a general appropriation of funds to pay judgments against the Government under the FTCA and other statutory authorizations for suits against the Government, none of those provisions encompass, or authorize payment for, Richmond's claim. A rule of estoppel would invite endless litigation over both real and imagined claims of misinformation, imposing an unpredictable and substantial drain on the public fisc, and might prompt the Government, in order to limit liability, to cut back and impose strict controls on the free and valuable information it now provides to the public. Pp. 429-434.

862 F.2d 294 (CA Fed.1988), reversed.

KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O'CONNOR, and SCALIA, JJ., joined. WHITE, J., filed a concurring opinion, in which BLACKMUN, J., joined, post, p. 434. STEVENS, J., filed an opinion concurring in the judgment, post, p. 435. MARSHALL, J., filed a dissenting opinion, in which BRENNAN, J., joined, post, p. 437.

Sol. Gen. Kenneth W. Starr, Washington, D.C., for petitioner.

Gill Deford, Los Angeles, Cal., for respondent.

Justice KENNEDY delivered the opinion of the Court.

This case presents the question whether erroneous oral and written advice given by a Government employee to a benefits claimant may give rise to estoppel against the Government and so entitle the claimant to a monetary payment not otherwise permitted by law. We hold that payments of money from the Federal Treasury are limited to those authorized by statute, and we reverse the contrary holding of the Court of Appeals.

I

Not wishing to exceed a statutory limit on earnings that would disqualify him from a disability annuity, respondent Charles Richmond sought advice from a federal employee and received erroneous information. As a result he earned more than permitted by the eligibility requirements of the relevant statute and lost six months of benefits. Respondent now claims that the erroneous and unauthorized advice should give rise to equitable estoppel against the Government, and that we should order payment of the benefits contrary to the statutory terms. Even on the assumption that much equity subsists in respondent's claim, we cannot agree with him or the Court of Appeals that we have authority to order the payment he seeks.

Respondent was a welder at the Navy Public Works Center in San Diego, California. He left this position in 1981 after petitioner, the Office of Personnel Management (OPM), approved his application for a disability retirement. OPM determined that respondent's impaired eyesight prevented him from performing his job and made him eligible for a disability annuity under 5 U.S.C. § 8337(a). Section 8337(a) provides this benefit for disabled federal employees who have completed five years of service. The statute directs, however, that the entitlement to disability payments will end if the retired employee is "restored to an earning capacity fairly comparable to the current rate of pay of the position occupied at the time of retirement." § 8337(d).

The statutory rules for restoration of earning capacity are central to this case. Prior to 1982, an individual was deemed restored to earning capacity, and so rendered ineligible for a disability annuity, if

"in each of 2 succeeding calendar years the income of the annuitant from wages or self-employment . . . equals at least 80 percent of the current rate of pay of the position occupied immediately before retirement." 5 U.S.C. § 8337(d) (1976 ed.) (emphasis added).

The provision was amended in 1982 by the Omnibus Budget Reconciliation Act, Pub.L. 97-253, 96 Stat. 792, to change the measuring period for restoration of earning capacity from two years to one:

"Earning capacity is deemed restored if in any calendar year the income of the annuitant from wages or self-employment or both equals at least 80 percent of the current rate of pay of the position occupied immediately before retirement." 5 U.S.C. § 8337(d) (emphasis added).

After taking disability retirement for his vision impairment, respondent undertook part-time employment as a schoolbus driver. From 1982 to 1985, respondent earned an average of $12,494 in this job, leaving him under the 80% limit for entitlement to continued annuity payments. In 1986, however, he had an opportunity to earn extra money by working overtime. Respondent asked an employee relations specialist at the Navy Public Works Center's Civilian Personnel Department for information about how much he could earn without exceeding the 80% eligibility limit. Relying upon the terms of the repealed pre-1982 statute, under which respondent could retain the annuity unless his income exceeded the 80% limit in two consecutive years, the specialist gave respondent incorrect advice. The specialist also gave respondent a copy of Attachment 4 to Federal Personnel Manual Letter 831-64, published by OPM, which also stated the former 2-year eligibility rule. The OPM form was correct when written in 1981; but when given to respondent, the form was out of date and therefore inaccurate. Respondent returned to the Navy in January 1987 and again was advised in error that eligibility would be determined under the old 2-year rule.

After receiving the erroneous information, respondent concluded that he could take on the extra work as a schoolbus driver in 1986 while still receiving full disability benefits for impaired vision so long as he kept his income for the previous and following years below the statutory level. He earned $19,936 during 1986, exceeding the statutory eligibility limit. OPM discontinued respondent's disability annuity on June 30, 1987. The annuity was restored on January 1, 1988, since respondent did not earn more than allowed by the statute in 1987. Respondent thus lost his disability payments for a 6-month period, for a total amount of $3,993.

Respondent appealed the denial of benefits to the Merit Systems Protection Board (MSPB). He argued that the erroneous advice given him by the Navy personnel should estop OPM and bar its finding him ineligible for benefits under the statute. The MSPB rejected this argument, noting that the officials who misinformed respondent were from the Navy, not OPM. The MSPB observed that, "[h]ad [respondent] directed his request for information to the OPM, presumably, he would have learned of the change in the law." The MSPB held that "OPM cannot be estopped from enforcing a...