There is one case being argued in August at the Federal Circuit that attracted an amicus brief. The case, Director of the Office of Personnel Management v. Moulton, relates to the apportionment of federal employee retirement annuity supplements pursuant to court orders, for example as a result of divorce decrees. The Director of the Office of Personnel Management asks the court to review whether the Merit Systems Protection Board “misinterpreted 5 U.S.C. § 8421(c) by concluding that OPM cannot divide the annuity supplement at all, unless the division of the annuity supplement is expressly provided for in a court order.” This is our argument preview.
In its opening brief, the Director of OPM argued that, “[c]ontrary to the statute’s plain language requiring that an annuity supplement be divided ‘in the same way’ as a basic annuity, the board determined that OPM may only divide an annuity supplement if a court order expressly divides this benefit.” The Director asserted “[t]he only reasonable interpretation of section 8421(c) is that the basic annuity and annuity supplement are considered part of the same retirement payment and thus the annuity supplement must be divided in the same way that the basic annuity is divided.” In support of this position, the Director noted “[t]he statute does not provide for any differences in how the annuity supplement and basic annuity should be divided and instead places the section covering annuity supplements under the subchapter generally applying to the basic annuity.” The Director also argued that “the board’s interpretation fails to give meaning to the various provisions of the statutory scheme and instead renders section 8421(c) superfluous.” The Director urged the court to reverse the MPSB’s decision because “the reasonable reading of section 8421(c) is that annuity supplements are to be divided in the same way as the basic annuity, even if annuity supplements are not specifically addressed in a court order.”
In his response, Moulton argued “[n]othing about . . . [the] phrasing suggests, as OPM argues, that the basic annuity or annuity supplement are part of the same payment.” He said “[i]nstead those payments are just subject to the same rules set forth in Section 8467.” Moulton, moreover, argued “[t]he statutory context confirms the plain meaning of Section 8421(c).” In this regard, he rejected “OPM’s reliance on interpretive canons” because, for example, “[t]he canon against surplusage provides no insight into the meaning of Section 8421(c).” Next, Moulton asserted, “OPM’s interpretation would also undermine congressional intent . . . [and] would . . . eliminate protections for a retiree’s annuity supplement, which would be inconsistent with the history and purpose of that supplement.” Finally, Moulton proposed policy considerations that, he said, “support the Board’s interpretation of Section 8421(c).” He also explained that “OPM’s interpretation would have far-reaching negative effects for retirees.”
In its response, the Merit Systems Protection Board argued it “correctly found that the plain meaning of 5 U.S.C. §§ 8421(c) and 8467, read together, requires OPM to apportion a [Federal Employees’ Retirement System] annuity supplement to another person only ‘if and to the extent expressly provided for’ in a state divorce decree or similar court order.” The Merit Systems Protection Board asserted that “OPM does not meaningfully challenge the Board’s rationale and conclusion about what the words ‘be treated in the same way’ mean, but asserts that they actually mean ‘be divided in the same way’ and/or that the basic annuity and annuity supplement must be treated as a unitary entitlement for purposes of section 8467.” According to the Merit Systems Protection Board, morevoer, “OPM’s conclusory assertion is not persuasive and . . . is not the plain reading of the statutory language.” Next, it addressed the Director’s argument “that other tools of statutory construction support its interpretation of the statute and undermine the Board’s interpretation.” The Merit Systems Protection Board argued “the majority of the canons raised by OPM in fact weigh in favor of the Board’s interpretation, which gives effect to the statute as a whole, does not render any provision superfluous, and assumes that Congress acted purposefully and intentionally.” Finally, the Merit Systems Protection Board contended, the court should affirm its decision because “OPM’s interpretation is not entitled to any deference, and it has not otherwise shown that its interpretation comports with the plain language of the statute.”
In reply, the Director argued “OPM’s interpretation is entirely consistent with section 8421(c)” and “is the only reasonable interpretation because it is the only interpretation that affords meaning to section 8421(c).” The Director asserted that “section 8467, by its own terms, applies to the annuity supplement,” and, “[u]nder the board’s interpretation, then, section 8421(c) is entirely unnecessary and is superfluous.” The Director, moreover, suggested that, “if the board’s interpretation is adopted, OPM must ignore the directive of state courts regarding the apportionment of annuities absent ‘magic’ language specifically addressing the annuity supplement in the order.”
The Federal Law Enforcement Association filed an amicus brief in support of affirmance and the position of the Merit Systems Protection Board and Moulton. In the brief, it argued that, “[w]hen the Office of Personnel Management (OPM) changed the rules for allocating the Annuity Supplement between a federal employee and his or her former spouse, the Agency upended the financial lives of many retired federal law enforcement officers.” Furthermore, it asserted, “[t]he Agency enacted the change with no notice to the thousands of retirees who had relied on the longstanding allocation system, . . . deprived those individuals of any opportunity to comment on the change, . . . [a]nd applied the change retroactively, imposing an immediate and significant debt on thousands of affected individuals.” It contended “the Agency acted unlawfully and that the Merit System Protection Board (MSPB) correctly invalidated OPM’s action.”
Oral argument is scheduled to be heard on Friday, August 8 at 10:00 am in Courtroom 201. We will report on developments.