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Lancellotti v. Office of Personnel Management

March 31, 1983

ALBERT D. LANCELLOTTI, PETITIONER
v.
OFFICE OF PERSONNEL MANAGEMENT, RESPONDENT



ON PETITION FOR REVIEW OF AN ORDER OF THE MERIT SYSTEMS PROTECTION BOARD

Author: Becker

Before: GIBBONS, HIGGINBOTHAM, and BECKER, Circuit Judges

Opinion OF THE COURT

BECKER, Circuit Judge.

Petitioner, Albert D. Lancellotti, seeks review of a decision of the Merit Systems Protection Board (MSPB) affirming respondent Office of Personnel Management's (OPM's) order to terminate petitioner's disability annuity. Respondent argues that this Court lacks jurisdiction to decide the merits of the case. This contention compels us to confront the difficult interplay among several statutes that may grant appellate jurisdiction.

For the reasons that follow, we hold that, while Lancellotti's petition is not reviewable under either 5 U.S.C. § 7703 (Supp. II 1978) or 5 U.S.C. § 8347(c) (Supp. IV 1980), which are provisions of the Administrative Code, it is reviewable under a "catch-all" provision of the Judicial Code, 28 U.S.C. § 2342(6) (Supp. IV 1980). Although this latter provision was repealed by the Federal Court Improvement Act of 1982, P.L. 97-164, 96 Stat. 25, reprinted in 50 U.S.L.W. 77 (April 27, 1982), which transfers the bulk of appellate jurisdiction over MSPB cases from the Circuit Courts of Appeals to the Court of Appeals for the Federal Circuit, section 2342(6) was in effect when this petition was filed.*fn1 We thus will reach the merits, and we will deny the petition for review. While the most difficult question before us is that of reviewability, an understanding of the issues requires us first to set forth the factual background of this action.

I. Factual and Procedural Background

Petitioner retired from his position in the Department of the Navy in 1973, pursuant to provisions of the Civil Service Retirement Law that permit retirement when total medical disability prevents performance of useful and efficient service. 5 U.S.C. §§ 8331, 8337 (1976 & Supp. IV 1980). The statute provides for the termination of disability annuities upon the annuitant's recovery from his disability or upon his restoration to an earning capacity "fairly comparable to the current rate of pay of the position occupied the time of retirement." 5 U.S.C. § 8337(d) (1976).*fn2 An annuitant is deemed restored to the relevant earning capacity if his income in each of two consecutive years is at least eighty percent (80%) of the current rate of pay for the previously held position.

For 1978, petitioner reported income from wages or self-employment in the amount of $22,533.00. The rate of pay in 1978 for an individual occupying petitioner's last position (i.e., grade GS-7, step 10) was $16,920.00. Petitioner concedes that his salary in 1978 greatly exceeded 80% of the then-current salary of his former position. For 1979, petitioner reported income from wages and self-employment in the amount of $14,670.00. The salary for a grade GS-7, step 10, employee in 1979 was $18,101.00, 80% of which was $14,480.00. Thus, petitioner's income in both 1978 and 1979 exceeded 80% of the current salary for petitioner's last position. Accordingly, OPM correctly informed petitioner on January 31, 1981, that petitioner's disability annuity was being terminated effective January 1, 1981, as required by the terms of 5 U.S.C. § 8337(d).

Petitioner sought reconsideration of the initial decision pursuant to 5 C.F.R. § 831.109(e)-(f) (1981), arguing that, although he had reported income of $14,670.00 in 1979, $600.00 of that amount was "vacation pay" actually accrued in 1978. He further contended that the current salary for the position he formerly had occupied was not $18,101.00 but, rather, $19,012.50.*fn3 On March 27, 1981, OPM affirmed its initial determination that petitioner's income from wages in both 1978 and 1979 had exceeded 80% of the current pay of his former position. Addressing petitioner's vacation-pay argument, OPM held that, because the money actually had been received in 1979, it would be included as part of petitioner's total income for that year.OPM concluded by informing petitioner of his right to pursue an administrative appeal before the MSPB pursuant to 5 U.S.C. § 8347(d) (Supp. IV 1980) and 5 C.F.R. § 831.110 (1981).

By letter dated April 22, 1981, petitioner filed with the MSPB a notice of appeal from OPM's determination. In a subsequent brief, written with the assistance of counsel, petitioner based his appeal on two theories: (1) the assertion that the amount by which petitioner's 1979 income had exceeded 80% of the then-current pay for his former job -- $189.20 -- was so small that it should be ignored as de minimis; and (2) the assertion, raised in a different context before OPM, that $600 should be deducted from petitioner's reported income because it was vacation pay accrued in 1978 and not part of petitioner's 1979 wages.

The MSPB's Philadelphia Regional Office (Regional Office) affirmed OPM's decision on August 20, 1981. The Regional Office first rejected petitioner's de minimis argument, reasoning that the language of 5 U.S.C. § 8337(d) unequivocally establishes receipt of 80% of current salary as the standard for determining whether earning capacity had been restored and contains no provision requiring that this amount be "substantially" exceeded. The Regional Office also affirmed OPM's determination regarding vacation pay and advised petitioner of his right to further review pursuant to 5 C.F.R. § 1201.114-.115 (1981).

Petitioner, through counsel, filed a petition for review before the MSPB on September 19, 1981, raising the same claims that he had presented to the Regional Office. In addition, petitioner reasserted the allegation (raised before OPM) that OPM should have used $19,012.50 instead of $18,101.00 as the 1979 salary of petitioner's former position. By order and opinion of April 25, 1982, the MSPB denied the petition for review, holding (1) that petitioner had failed to prove by a preponderance of the evidence that he had not been restored to earning capacity; (2) that OPM had not erred in determining petitioner's 1979 wages to have exceeded the 80% maximum; and (3) that petitioner had failed to offer any evidence in support of his claim that a portion of his 1979 ...


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