Wigton v. Berry

• Decision Date: 07 June 2013
• Docket Number: Civil Action No. 2:10–cv–01768.
• Citation: 949 F.Supp.2d 616
• Parties: Sylvia WIGTON, Audrey L. Gorgonzola, Gail G. Hudson, Gathryn Daane, Dolores Vassalluzzo, Mary Jane Thomas and Thomas C. Marcin, on behalf of themselves and other individuals similarly situated, Plaintiffs, v. John BERRY, Director of the United States Office of Personnel Management, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

949 F.Supp.2d 616

Sylvia WIGTON, Audrey L. Gorgonzola, Gail G. Hudson, Gathryn Daane, Dolores Vassalluzzo, Mary Jane Thomas and Thomas C. Marcin, on behalf of themselves and other individuals similarly situated, Plaintiffs,

v.John BERRY, Director of the United States Office of Personnel Management, Defendant.

Civil Action No. 2:10–cv–01768.

United States District Court,

W.D. Pennsylvania.

June 7, 2013.

Emily E. Town, John Stember, Jonathan K. Cohn, Maureen Davidson–Welling, William T. Payne, Stember Feinstein Doyle Payne & Kravec, LLC, Timothy P. O'Brien, Pittsburgh, PA, for Plaintiffs.

Jennifer R. Andrade, United States Attorney's Office, Pittsburgh, PA, for Defendant.

OPINION

MARK R. HORNAK, District Judge.

The question before the Court is whether it has subject matter jurisdiction to entertain a lawsuit on behalf of federal retirees who assert that the Office of Personnel Management (OPM) is deliberately refusing to properly pay them the annuities to which OPM has conceded they are statutorily entitled, or whether their grievance instead must be channeled only through an administrative review scheme created by Congress. In many ways, this question goes to the heart of this Court's judicial power under Article III and the applicable statutes.

I. BACKGROUND

The Department of Veterans Affairs (“VA”) is one of the nation's largest health care providers, and operates hospitals throughout the United States that provide medical care to veterans. See Am. Compl. ¶ 12, ECF No. 81. Like a number of other federal employees, registered nurses (“RNs”) who are employees of the VA are entitled by statute to annuity benefits upon retirement,¹see5 U.S.C. § 8333; 38 U.S.C. § 7426, Those annuities are operated by the Office of Personnel Management (“OPM”), a federal administrative agency. 5 U.S.C. § 8347.

As of the 1980s, the annuity a part-time nurse would receive was pro-rated based on the percentage of part-time work she performed over the length of her career. See Pub. L., No. 96–330. On January 23, 2002, Congress passed subsection (c) of Pub.L. No. 107–135, Title I, § 132, 115 Stat. 2454 (2002) (the Department of Veterans Affairs Health Care Programs Enhancement Act, “Enhancement Act” or “Act”), which directed that all part-time work performed by VA RNs prior to April 7, 1986, was to be credited as full-time service rather than part-time service, effectively increasing the annuity for a number of qualifying RNs.

OPM immediately began applying the Enhancement Act to RNs who retired after its effective date, that is, after January 23, 2002. Am. Compl. ¶ 6. However, the Enhancement Act did not explicitly state whether it was to be applied retroactively, that is, whether it applied to all RNs who performed part-time service prior to April 7, 1986, regardless of when they retired. OPM initially took the position that the Enhancement Act was not retroactive, and refused to apply it to RNs who had retired before January 23, 2002 and who sought recalculation of their benefits under the Act. See id.

In 2007, approximately 160 individuals whose requests for an Enhancement Act recalculation had been denied by OPM appealed to the Merit Systems Protection Board (“MSPB”). Id. ¶¶ 28–29. The MSPB consolidated those 160 appeals under the lead case of Lippman v. OPM, No. PH–0831–08–0212–1–1. Id. ¶ 31. On May 7, 2008, Administrative Judge Michael Rudisill in the Northeastern Regional Office of the MSPB issued an initial decision determining that Congress intended the Enhancement Act to be applied retroactively, i.e. to individuals who retired after April 7, 1986 and before January 23, 2002, and ordering OPM to recalculate the benefits of each of the claimants at the new Enhancement Act level, both for past and future payments. Id. ¶¶ 32–33. OPM requested reconsideration of Administrative Judge Rudisill's decision by a three-member panel of the MSPB, which reconsideration was declined. Id. ¶ 34, Ex. 1, ECF No. 81–1; see5 C.F.R. §§ 1201.113–15; 5 U.S.C. § 7701. As a result, the Lippman decision became final and binding upon the Lippman claimants (and upon OPM with regard to them) as of the end of 2008. Complying with Lippman, OPM both paid each claimant for benefits past due, and adjusted her monthly benefit rate going forward. Id. 42.

According to Plaintiff's counsel, while in the wake of Lippman, OPM initially recalculated the benefits for a number of post- Lippman claimants who requested it, id. ¶ 43, in a number of instances in 2009 OPM did not respond to individual requests to recalculate benefits,id. ¶ 50. When the MSPB denies review of an initial decision, as here, that decision is only binding on the individuals before it, and does not become precedential or bind the agency with respect to future claimants. Horner v. Burns, 783 F.2d 196, 201 (Fed.Cir.1986). Therefore, Lippman was only binding with regard to the Lippman claimants. However, significantly, around March 4 or March 9, 2009, OPM promulgated internally a determination that it would voluntarily apply the Enhancement Act to nurses who retired before January 23, 2002, effectively acquiescing in the Lippman decision. Am. Compl. ¶ 71; OPM Br. Support Mot. Dismiss ECF No. 94; id. Ex. 1, ECF No. 94–1.² Throughout this litigation, OPM has continually confirmed that that is, in fact, its position (albeit not publicized outside of the agency), and that most tellingly it believes that it is statutorily required to apply the Enhancement Act retroactively.³

At least throughout the years of 2009–10, however, OPM had determined that it would only recalculate the benefits of a qualifying nurse who specifically requested recalculation under the Enhancement Act before OPM; that is, notwithstanding its acquiescence in a global application of Lippman, an application it posits is required by law, it would not voluntarily identify and recalculate the benefits of all RNs who are otherwise eligible for such recalculation under the Enhancement Act, nor would it voluntarily notify those individuals of their ability to seek a recalculation. See Am. Compl. at ¶¶ 46–49, 72, 77, 81.

On December 30, 2010, the five original named plaintiffs in this case—Wigton, Gorgonzola, Hudson, Daane, and Vallazuso—filed suit in this Court on behalf of themselves and others similarly situated against John Berry in his official capacity as Director of OPM. Those individuals were RNs and their surviving spouses who (1) worked part-time before for the VA before April 7, 1986; (2) retired between April 7, 1986 and January 23, 2002, and to whom OPM give full-time credit for pre-April 7, 1986 part-time work when OPM calculated their VA pensions when they retired. Compl. at 1–2, ECF No. 1. They sought, inter alia, the certification of a class and a writ of mandamus from this Court compelling the OPM to identify annuitants eligible for a recalculation post- Lippman, to notify them of their rights to a recalculation, and to conduct such a recalculation. Compl. at 20–22. In between the filing of the original Complaint and the First Amended Complaint nearly a year later on December 6, 2011, however, several important events occurred.

On May 9, 2011, Plaintiffs moved to certify a class pursuant to Fed.R.Civ.P. 23, ECF No. 15. On May 11, 2011, Defendant filed a Motion to Dismiss Plaintiffs first Complaint, asserting that this Court lacked subject matter jurisdiction over the case. ECF No. 19. On December 5, 2011, Defendant's Motion to Dismiss was denied without prejudice to renew upon Plaintiff's filing a First Amended Complaint, ECF No. 79, and Plaintiff's motion for class certification was denied without prejudice to renew upon the Court's resolution of the issue of subject matter jurisdiction, ECF No. 80.

During the pendency of this litigation, OPM voluntarily recalculated the original named Plaintiffs' annuities, along with those of approximately ten (10) other retired VA nurses who were members of the putative class. Am. Compl. at 3. On June 20, 2011, Plaintiffs filed a Motion pursuant to Fed.R.Civ.P. 23(d)(1), asserting that Defendants' contacts relative to recalculation with the original named Plaintiffs and other putative class members jeopardized the class, and asking the Court to enjoin Defendant from initiating any further contact with putative class members. ECF No. 35. On November 23, 2011, the Court granted that motion and ordered OPM not to directly contact any putative class members in this case, ECF No. 75, an order which it clarified on December 16, 2011, ECF No. 87, and again on December 3, 2012, ECF No. 119, ruling that OPM may not directly contact any putative class member only with regard to the subject matter of this litigation, and may contact such members with regard to other matters as necessary. That order remains in effect presently.⁴

During the briefing of the 23(d)(1) motion, OPM for the first time described in detail its efforts to contact potential eligible annuitants under the Enhancement Act post- Lippman. See ECF No. 54, filed Aug. 13, 2011. According to OPM, at the time of its acquiescence in the Lippman decision on March 4, 2009, it believed that given a lack of computerization of its annuity and employee information systems until very recently, the only way to identify the potential annuitants who would be eligible for a recalculation was to manually review the file of each individual annuitant who retired from the VA between April 7, 1986 and January 23, 2002, a list of approximately 78,551. Decl. Edlef J. Foelster, OPM Br. Opp., Pl.'s Rule 23(d)(1) Mot. Ex. C ¶ 13, ECF No. 54–3. It appears that given the burdens accompanying that task, OPM initially did, in fact, only recalculate the annuity of an individual who specifically requested it. Id. ¶ 8.

However, sometime subsequent to March 2011, OPM became aware that its annuity computer database, known as the “Annuity Roll Processing System” or “ARPS”, id. Ex. B. ¶ 6, Decl. Amy Kathleen Benson, ECF No. 54–2, could be...