Opinions / Panel Activity

Last Monday, the Federal Circuit issued its opinion in Cross v. Office of Personnel Management, a case we have been following because it attracted an amicus brief. The case was argued before Judges Moore, Schall, and Stoll. On appeal, Cross asked the Federal Circuit to reverse a decision of the Merits Systems Protection Board regarding the denial of survivor benefits. In particular, the petitioner claimed 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. On appeal, the Federal Circuit reversed the Board’s denial of survivor benefits. This is our opinion summary.

Judge Stoll summarized the relevant background:

Doreen and Wayne Cross married on August 3, 1982. In 1998, the Crosses permanently and legally separated and signed an agreement settling assets and custody. Mr. Cross was employed with the Department of the Navy . . . and retired from federal service in 2005, seven years after his separation from Ms. Cross. On his retirement application, Mr. Cross elected to receive a reduced annuity for himself to provide the maximum allowable survivor annuity for Ms. Cross. On March 27, 2015, the Crosses finalized their divorce. At that time, Mr. Cross had received a reduced annuity for nearly ten years in order to provide for Ms. Cross in the event of his death. Less than six months later, on September 23, 2015, Mr. Cross died of lung cancer. . . .

Because she was the “former spouse of the decease[d]” and because the “divorce decree d[id] not award [Ms. Cross] a survivor annuity” upon Mr. Cross’s passing, OPM determined that Ms. Cross was not eligible to receive survivor annuity benefits, terminated her future benefits, and demanded repayment. In October 2016, Ms. Cross submitted a Request for Reconsideration, explaining that she had “never said or suggested that [Mr. Cross] and [she] were currently married” and that neither she nor Mr. Cross had been “aware of a need to manipulate [their] divorce decree in order for OPM to pay what [the Crosses] had previously agreed upon via formal elections.” Nearly two years later, in June 2018, OPM issued a final decision affirming its initial decision denying her application because the divorce decree “did not award [Ms. Cross] a survivor benefit,” . . . and because “Mr. Cross did not submit a request to make an election to provide a former spouse annuity for” Ms. Cross.

In September 2019, Ms. Cross appealed OPM’s final decision to the Merit Systems Protection Board. In March 2020, an Administrative Judge issued an initial decision affirming OPM’s denial of former spouse survivor annuities to Ms. Cross and remanding the issue of OPM’s alleged overpayment to Ms. Cross. . . . Over the next six months, due to the global pandemic, Ms. Cross requested and was granted several extensions to file a petition for review with the Board. Ms. Cross ultimately elected to allow the initial decision to become final and filed her appeal with this court on October 25, 2020.

Judge Stoll began her analysis by noting that “review in an appeal from a decision of the Board is limited by statute,” such that the Federal Circuit can set aside a ruling when the “Board’s decision . . . is not supported by substantial evidence.” Judge Stoll also laid out the underlying law regarding survivor benefits. In particular, she explained, “[a] former spouse of a deceased federal employee is entitled to a survivor annuity under two circumstances: if (1) the annuity is expressly provided for in an affirmative election or a divorce or annulment decree, court order, or court-approved settlement agreement incident to such a decree . . . or (2) ‘the statutorily required notice is ineffective; and [] the evidence shows that the employee . . . intended to provide a former spouse survivor annuity.’” Given that “[i]t is undisputed that neither the Crosses’ separation agreement nor their divorce decree expressly awards the survivor annuity benefit to Ms. Cross, Judge Stoll and the opinion focus “on the second option available to Ms. Cross.” Moreover, given that Mr. Cross’s intent to provide this benefit to Ms. Cross was not disputed, the court explained, “the dispositive question on appeal is whether OPM provided the statutorily required notice.”

Regarding the required notice, Judge Stoll noted how “OPM is ‘under a very clear and mandatory directive from Congress’ to provide annual notice of annuity election rights to all annuitants.” Judge Stoll further explained that, as in the situation here, “‘[w]hen a nonfrivolous allegation is made that OPM has not sent’ the notice as required by statute, the burden of production falls to OPM to show, by ‘more than a bare allegation,’ that notice was sent and to offer proof of its contents.” Ordinarily, Judge Stoll explained, “[t]o meet this burden, OPM . . . submits ‘a sworn affidavit . . . attesting that general notices regarding survivor elections were mailed to all annuitants every December during the pertinent time period.’”

In this case, “however, the ‘agency provided no documentary evidence’ to show that it provided the required notices annually.” Moreover, said the court, Ms. Cross provided “[t]he only evidence regarding notice in the proceedings before OPM and the Board,” and it “was a single OPM notice ‘addressed to her former spouse, from December 2012, which she said [she] located in a ‘burn pile’ after [Mr. Cross’s] death.’”

The Court did “not agree that a single notice from 2012—found and produced by Ms. Cross—suffices as substantial evidence to support the Board’s finding that the statutorily required notice was provided annually to Mr. Cross,” because the “single notice, dated 2012 and found in a ‘burn pile’ in which documents would presumably be disposed of in a first in, first out order, is not substantial evidence to prove that Mr. Cross received annual notices subsequent to 2012.”

The Court ultimately determined “that Ms. Cross is entitled to receive the former spouse survivor annuity because the Board’s finding that the mandated notice was provided to Mr. Cross is unsupported by substantial evidence and because it is undisputed that Mr. Cross intended to provide Ms. Cross with a former spouse annuity following his death.”