Gorgonzola v. Dir. United States Office of Pers. Mgmt.

• Decision Date: 02 February 2023
• Docket Number: 22-1942
• Parties: AUDREY GORGONZOLA; GAIL G. HUDSON; KATHRYN DAANE; DOLORES VASSALLUZZO; MICHELLE RAE SMITH; THOMAS C. MARCIN, on behalf of themselves and other individuals similarly situated; v. DIRECTOR UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Appellant
• Court: U.S. Court of Appeals — Third Circuit

AUDREY GORGONZOLA; GAIL G. HUDSON; KATHRYN DAANE; DOLORES VASSALLUZZO; MICHELLE RAE SMITH; THOMAS C. MARCIN, on behalf of themselves and other individuals similarly situated;
v.
DIRECTOR UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Appellant

No. 22-1942

United States Court of Appeals, Third Circuit

February 2, 2023

NOT PRECEDENTIAL

Argued January 23, 2023

Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 2-10-cv-01768) District Judge: Hon. Mark R. Hornak

Stephanie R. Marcus [ARGUED]

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Charles W. Scarborough United States Department of Justice Civil Division Counsel for Appellant

Jonathan K. Cohn Maureen Davidson-Welling [ARGUED] John E. Stember Stember Cohn &Davidson-Welling Timothy P. O'Brien O'Brien Coleman &Wright Counsel for Appellees

Before: SHWARTZ, BIBAS, and FUENTES, Circuit Judges.

OPINION ^[*]

SHWARTZ, Circuit Judge.

The District Court certified a class of retired part-time nurses who worked for the Veterans Administration ("VA") and are eligible for enhanced retirement benefits. The Court issued a notice to the class using language that the class representatives and the United States Office of Personnel Management ("OPM") jointly proposed that notified the class of the benefits. The language also set forth various actions OPM represented that it would take for each class member, including reviewing the files, recalculating the benefits, and tendering payments if warranted. When the class representatives learned that OPM disavowed these representations, they filed a motion under the All Writs Act

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seeking an order directing OPM to fulfill its representations. The Court granted the motion and directed OPM to take no actions impeding the fulfillment of the promises it made in the notices. Because the District Court has jurisdiction over the case and the authority to issue the order, we will affirm in part and dismiss in part.

I

In 2002, Congress passed the Department of Veterans Affairs Health Care Programs Enhancement Act (the "Enhancement Act"), which changed the way OPM measures service time-a key factor in calculating retirement annuities for VA nurses. Gorgonzola v. Dir. U.S. OPM, 782 Fed.Appx. 207, 209 (3d Cir. 2019). After unrelated litigation, OPM agreed to apply the Enhancement Act retroactively to nurses who retired before 2002 and awarded increased benefits to nurses who submitted claims for them. Id. OPM, however, took no action concerning eligible nurses who did not submit claims. Id. Thereafter,

five retired VA nurses filed a class action lawsuit in [federal district court] against the Director of OPM on behalf of all VA nurses who had worked part time before April 7, 1986, but retired before Congress passed the Enhancement Act. They alleged that OPM, by only recalculating the annuities of those nurses who submitted . . . claim[s] violated the Equal Protection and Due Process Clauses. The nurses requested that the District Court, among other things [issue a permanent injunction, directing OPM to identify each member of the Class, recalculate her pension in accordance with the Enhancement Act, pay any benefits past due from the date of retirement, and adjust her monthly benefit going forward]....

[OPM initially stated that it could not identify and notify all nurses eligible for a recalculation because its computerized annuity roll did not contain employee-service history.] Then, as the litigation advanced, OPM claimed that it realized that there was another database that could help it identify

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nurses entitled to a recalculation....

The plaintiffs then filed [the First Amended Complaint ("FAC")], and OPM moved to dismiss for lack of jurisdiction. OPM argued mainly that the Civil Service Reform Act ("CSRA") created an exclusive remedial scheme for federal benefits claims: initial adjudication by OPM, with an appeal available to the [Merit Systems Protection Board ("MSPB")], and subsequent judicial review available only in the Court of Appeals for the Federal Circuit.

The District Court denied OPM's motion [in part], . . . conclud[ing] that it did "not have jurisdiction to order OPM to recalculate any individual's payment," as "that relief can only be sought through the CSRA." Wigton v. Berry, 949 F.Supp.2d 616, 636-37 (W.D. Pa. 2013). But it explained that it did have jurisdiction "to entertain a challenge to an undisclosed, systematic determination of OPM to fail to notify individuals of" their eligibility for certain benefits, an eligibility that OPM "unequivocally concedes" is statutorily required. Id. at 637. [Thus, the Court concluded that it had jurisdiction to grant relief in the form of notice to eligible recipients about the enhanced benefits.]

The District Court eventually certified the class, and, in April 2017, granted summary judgment for the plaintiffs on their Equal Protection claim . . . [because] OPM, with no rational basis, had treated retired nurses differently by providing some with notice of their rights [but not others. The Court also allowed discovery on the Due Process claim to proceed].... In light of those rulings, the District Court ordered [counsel for all parties to file a joint status report detailing the procedure for identifying and giving class and remedial notice to class members, and to submit an agreed-upon form of such notice. The District Court directed OPM to "withhold a portion of the gross amount of any retrospective payment(s), with the amount of such holdback to be set by further Order of Court, and . . . hold such monies in trust, pending disposition of them as may be later ordered by th[e] Court, for the payment of counsel fees and recoverable litigation costs." Gorgonzola v. McGettigan, No. 2:10-cv-01768, 2017 WL 1449789, at *14 (W.D. Pa. Apr. 21, 2017)]. . . . [T]he District Court [thereafter] issued another order directing OPM to "hold back" 30% of any retrospective payments to annuitants for a possible future attorneys' fee award [(the "Holdback Order")].

Gorgonzola, 782 Fed.Appx. at 209-11 (footnotes and emphasis omitted).

The parties then submitted multiple joint status reports over a period of two years

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that: (1) included lists of class members and (2) proposed contents of notices to them.^[1]Several of the joint status reports represented to the District Court that OPM would "issue decisions . . . to notify [recipients] of the results of OPM's file review and, if they are eligible, recalculation." JA 1012 n.3, 1081-82 n.4, 1126 n.4. The parties' proposed class notices included similar representations. Each proposed notice contained language that represented that OPM would: (1) review the recipient's file to determine if the recipient was eligible for a recalculation, (2) recalculate her benefits if warranted, (3) send the recipient the agency's decision concerning the benefits, and (4) issue any owed benefits to the recipient, subject to the Holdback Order.^[2] JA 1018, 1156 (List 1); 1088-89 (List 2); 1024, 1171 (List 3); 1126, 1132-3 (List 4). The District Court neither required nor requested these representations be included in the notices.

The District Court reviewed the proposed language and issued orders that approved, with minor changes, the parties' proposed notices and directed that they be

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sent to class members (the "Notice Orders").^[3] JA 134-40.

OPM appealed the first two Notice Orders and the Holdback Order. While the appeal was pending, OPM, contrary to the representations in the class notices, (1) informed the class representatives that it "would not voluntarily make recalculated annuity payments if there were any conditions imposed on its ability to make those payments," referring to the Holdback Order, (2) noted that it had "consistently maintained" this position, and (3) explained it was working to be "in a good position to pay recalculated annuities and benefits" following resolution of the appeal. JA 1151.

We eventually dismissed the appeal, holding (1) OPM's appeal of the Notice Orders was moot because the notices had already been sent to the class and (2) the Holdback Order was not an injunction subject to interlocutory review. Gorgonzola, 782 Fed.Appx. at 212. Thereafter, OPM told the class representatives that it had "not yet decided if it [would] begin paying Class-members," and confirmed that, at that point, no one had been paid. JA 1153. In response, the class representatives filed a motion for an All Writs Act injunction or mandamus relief, seeking an order directing OPM to issue partial payments to eligible class members, pursuant to the language included in the notices sent to the class. JA 1136-46. OPM responded by filing a motion to modify or vacate the Holdback Order. JA 1267-68.

The District Court denied OPM's motion, granted the class representatives'

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motion, and issued an order ("March 2022 Order") that required OPM to "take no actions that [would] in any manner interfere with or impede the prompt and immediate conduct and conclusion of each and every action" set forth in the court-approved notices, "including but not limited to" that OPM "will review files, determine eligibility, issue eligibility decisions, recalculate annuities for Class members whom OPM determines are eligible for recalculation, adjust annuities prospectively, and pay any retroactive benefits that OPM calculates are due, all subject to th[e] Court's Holdback Order." JA 3-4.

OPM appeals. JA 1-2.

II^[4]

A^[5]

We first examine whether the District Court has original jurisdiction over this case.^[6] We conclude it does. Although the CSRA provides OPM exclusive authority to

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adjudicate claims for benefits, its grant of exclusive jurisdiction does not cover notice claims, like those here, and thus the District Court had original jurisdiction to issue the Notice Orders. In reaching this conclusion,...