Argument Recap / Panel Activity

In December, the Federal Circuit heard oral argument in Cross v. Office of Personnel Management, an appeal from the Merit Systems Protection Board. We have been following this death benefit case because it attracted an amicus brief. On appeal, Cross asks the Federal Circuit to reverse a decision of the Merits Systems Protection Board regarding the denial of survivor benefits. In particular, the petitioner is claiming survivor benefits as a surviving former spouse when her deceased former husband failed affirmatively to re-elect her survivor benefits during the few months between their divorce and his death. Judges Moore, Schall, and Stoll heard last Wednesday’s argument. This is our argument recap.

Michelle Bercovici argued for Cross. Bercovici started by arguing there was clear intent by Mr. Cross to provide benefits to Ms. Cross in the event of his death, and contending that the narrow issue before the court is whether the Office of Personnel Management gave Mr. Cross sufficient notice that another affirmative election was necessary given the divorce. In making this argument, Bercovici highlighted that there is normally a two-year window after divorce to re-elect benefits for a former spouse.

Judge Schall inquired as to the test that should be used by the court to determine that notice was given. Bercovici argued the proper test is a requisite notice test. Judge Schall next asked why notice was not provided in this case. Bercovici, in response, made two arguments. First, she argued for creation of a new rule that notice be required after a benefit-altering event requiring re-election if OPM is to deny benefits. Second, she argued that the notice test was not met in this case by a 2012 annual letter provided by Ms. Cross to the court that was cited as notice by the MSPB. Bercovici pointed out that Mr. Cross’s 2005 election of spousal benefits was normally irrevocable. As a result, she continued, the annual notice normally did not require any re-election or affirmation of intent to provide benefits.

Judge Moore asked if the original election of spousal benefits can really be called irrevocable given that re-election is needed in this case. In response, Bercovici noted that death, divorce, and remarriage can all trigger changes to benefits that require re-election. And, she further conceded, presumably one will get two annual notices that inform the benefit grantor that he or she must re-elect benefits during the 2-year re-election period.

Judge Moore then inquired how the proposed rule requiring notice after a benefit-altering life event would work given that OPM would have to know about the event, but likely is not informed of life events and simply sends a yearly notice. Bercovici argued there was no reason for Mr. Cross or any other benefit grantor to know about the necessary re-election given that the benefit was normally irrevocable, and so, she argued, notice should be required after the benefit-altering event before OPM can later deny benefits due to not re-electing.

Bercovici then argued that the 2012 annual notice letter provided by Ms. Cross did not meet the burden of notice because OPM cannot produce or confirm that notices between 2005 and 2014 were properly sent to Mr. Cross. Also, she maintained, OPM cannot confirm the contents of any notices and simply argues the requirement of re-election upon a divorce is likely contained within these notices that were not produced.

Ioana Cristei argued for the Office of Personnel Management. Cristei conceded that Ms. Cross is the victim of bad timing, but argued there is no legal basis to grant her benefits. Judge Stoll asked about the notice from 2012 and inquired if all the annual notices are sent in December yearly by OPM. Cristei responded that this is the general, assumed practice of OPM.

Judge Moore followed up to ask how a form from one year (2012) and no additional testimony by OPM could be enough evidence to assume any notice had been provided over a multiple-year period. Cristei noted that OPM has a burden that it is more probable than not that notice was sent, and she highlighted that the Merit Systems Protection Board found the 2012 letter was enough evidence to satisfy this burden. In response, Judge Moore asked whether this really is enough evidence from the government’s perspective to assume letters were sent in 2013 and 2014. Cristei argued this 2012 letter was indeed enough to presume the later letters were also delivered and provided notice to Mr. Cross.

Judge Schall noted that OPM testimony was not provided in this case to assist the Board in establishing substantial evidence of notice. He then asked a hypothetical. Consider, he asked Cristei, that A&B are married and divorce, but A dies the next day before changes can be made for re-election. Cristei responded by arguing that B would not be eligible for anything. Cristei further contended that notice by OPM after a life event that alters benefits is not required by law and, anyway, that there is no way for OPM to know these events have occurred.

Judge Schall further asked if there is any dispute from the government that there was intent by Mr. Cross to give the benefit to Ms. Cross. Cristei agreed that there was intent in this case, and she noted that notice is the only dispute.

Judge Moore concluded Cristei’s time by highlighting how re-election seems unnecessary given that Mr. Cross was already taking a limited benefit to grant benefits for his former spouse. Moreover, she noted, it seems unfair for him to both receive limited benefits during his life before and after the divorce in addition to losing survivor benefits.

In rebuttal, Bercovici argued it cannot be taken for granted that notice was provided based on the existence of the 2012 letter. Judge Stoll noted that the single instance of the 2012 letter is strong point in Ms. Cross’s favor. As a hypothetical, he asked if notice would be satisfied if OPM testimony had been provided in this case as to delivery and contents of annual letter. Bercovici agreed that in that situation it would likely be evidence of notice, but she quickly noted it was not the situation in this case. She maintained that there is no way to know from the evidence provided if Mr. Cross received other notices, such as the 2013 or 2014 notices.

Bercovici closed by highlighting that most people get rid of older documents before later documents. Given that the 2012 document was the only document found, Bercovici claimed there is at least a question of fact about whether documents were provided in 2013 and 2014.

We will continue to monitor the case and report on any developments.