concluding that the proceeds from a decedent’s Federal Thrift Savings Plan (“TSP”) retirement account were required to be distributed to the decedent’s father, rather than her husband, because the only “ ‘signed and witnessed writing’ ” that had been submitted listed her father as her beneficiary (quoting 5 U.S.C. § 8424(d))
How later courts described this case
- concluding that the proceeds from a decedent’s Federal Thrift Savings Plan (“TSP”) retirement account were required to be distributed to the decedent’s father, rather than her husband, because the only “ ‘signed and witnessed writing’ ” that had been submitted listed her father as her beneficiary (quoting 5 U.S.C. § 8424(d))
- finding that, where FRTIB had valid Form TSP-3 on file, FRTIB had no discretion to make distribution to surviving spouse even “where [FRTIB] is satisfied that the equities demand it”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_____________________________
)
STANLEY A. FERGUSON, )
)
Plaintiff, )
)
v. ) Civil Action No. 10-2113 (RWR)
)
GREGORY T. LONG, et al., )
)
Defendants. )
_____________________________ )
MEMORANDUM OPINION
This case stemmed from a perfect storm of missteps on both
sides, with most of them occurring in the bureaucracy responsible
for the Thrift Savings Plan (“TSP”). The result is that the
undisputed last wishes of a federal employee who relied upon the
repeated assurances of the bureaucracy that her husband would be
her beneficiary for a $287,000 TSP account will be wholly
dishonored. It is a sad result for the surviving spouse of
12 years and a blot on the record of the TSP program.
Plaintiff Stanley Ferguson filed this complaint seeking an
order directing the Federal Retirement Thrift Investment Board
(“the Board”) to provide him with the proceeds of a Thrift
Savings Plan (“TSP”) account belonging to Ferguson’s deceased
wife, Tanya Ferguson. Gregory Long, the executive director of
the Board, has moved under Federal Rules of Civil Procedure
12(b)(1) and 12(b)(6) to dismiss, or alternatively for summary
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judgment, arguing that Stanley1 is not a legal beneficiary with
standing to bring a claim for TSP benefits.2 Because the facts
are not in dispute and Stanley is not entitled to bring a claim
for his deceased wife’s TSP benefits, the complaint will be
dismissed for lack of subject matter jurisdiction.
BACKGROUND
In October 1993, Tanya, an employee of the U.S. Department
of the Treasury, participated in the TSP and properly filed with
her employer a valid designation of beneficiary form (“TSP-3
form”) designating as her beneficiaries her father, defendant
Harold Koch, and defendant Marissa Shunn.3 (Def. Long’s Mem. in
Supp. of Mot. to Dismiss (“Def.’s Mem.”), Ex. A.)4 The Board
later changed its regulations to require that TSP-3 forms be
filed directly with the Board rather than with the participants’
employers. Thus, in 1998, the Board directed Treasury and other
participating agencies to forward to the Board all TSP-3 forms
employees had previously filed. Treasury did not do so with
1
The Fergusons’ first names will be used for ease of
identification.
2
Defendant Marissa Shunn also has moved to dismiss the
complaint. Because resolution of Long’s motion disposes of the
case, Shunn’s motion need not be addressed.
3
According to the Board, at the end of business on April 1,
2011, Tanya’s TSP account balance was $287,347.82. (Def.’s Mem.
in Supp. of Mot. to Dismiss, at 4.)
4
Stanley does not dispute the facts set forth in the
Board’s motion to dismiss. (Pl.’s Opp’n at 1.)
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Tanya’s form for over 12 years. (Def.’s Mem. at 3 & n.2.) As a
consequence, the TSP annual statement that the Board sent to
Tanya erroneously declared in January of each calendar year from
and before 2007 through 2010: “You have not designated a
beneficiary. Upon your death, your TSP account will be paid[] to
your surviving spouse[.]” (Compl. ¶¶ 9-10, 12, 14.) Each annual
statement also asked: “Please review this statement for accuracy,
as the information in it is considered correct unless you notify
us.” (Id.; Pl.’s Mem. of P. & A. in Opp. to Mots. to Dis.
(“Pl.’s Mem.”), Exs. 1, 2.) Tanya apparently reported no errors.
Stanley and Tanya were married in January 1998, over four
years after she filed the TSP-3 form. (Compl. ¶ 7.) Treasury,
twelve years late, mailed a copy of Tanya’s 1993 TSP-3 form to
the Board in May 2010. (Def.’s Mem. at 3.) That triggered a
string of events. The TSP-3 form reflected Tanya’s last name
in 1993 (Koch). The last name reflected on her TSP account
in 2010, though, was her married name (Ferguson). Thus, the
Board sent Tanya a letter dated May 26, 2010 stating it had
received her TSP-3 Designation of Beneficiary form, but it could
not process the form. It explained that “[t]he participant’s
name on [the form did] not match the name on the TSP account[.]”
(Pl.’s Mem., Ex. 3.) The letter further stated that “if you do
not have a form TSP-3 on file, death benefits will be paid
according to the statutory order of precedence[,]” which,
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according to the previous TSP annual statements, would be her
surviving spouse. (Compl. ¶¶ 12-14.)
Tanya, of course, had not sent the Board any designation of
beneficiary form. She feared that someone had stolen her
identity and was trying to steal her TSP funds by sending in a
change of beneficiary form. (Pl.’s Mem., Ex. 4 at 3:11-15,
6:7-13.) Tanya promptly telephoned a participant services
representative (“PSR”) of the Board on June 2, 2010. The PSR
explained that the Board had just received Tanya’s October 1993
TSP-3 form and was notifying her why it was being rejected and
would not be processed. Tanya asked who her current beneficiary
was. The PSR erroneously declared that Tanya did not have a
beneficiary listed for her account, and confirmed that the
proceeds of her account would be paid to Stanley as her surviving
spouse if she died. In discussing the question of the most
current designation of beneficiary form, Tanya said “I did one
that just said ‘Cancel all,’ so that that would just make it be
my spouse.”5 The PSR told Tanya, erroneously, that since the
form the Board had just received would not be processed, “you
don't need to worry about that.” (Id. at 3:16-19; 4:2-13;
5:19-6:6; Compl. ¶¶ 15-16.) So, she didn’t, even though the
5
The Board asserts after conducting a thorough search, and
the plaintiff does not contest, that no record of such a
designation of beneficiary form filed by Tanya exists. (See
Joint Supp. Memorandum at 1-2.)
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Board’s May 26, 2010 letter advised her “[t]o ensure that death
benefits are paid in a timely manner and in accordance with your
current wishes, you should resubmit a corrected form TSP-3,
Designation of Beneficiary.” (Pl.’s Mem., Ex. 3.) In fact, the
Board did match the 1993 form’s other identifying information
with Tanya’s TSP account and, without notifying Tanya, did
process the 1993 form and recognize it as valid.
Tanya passed away three weeks later. (Compl. ¶ 7.) Stanley
filed a claim for Tanya’s TSP account funds. (Id. ¶ 18.)
In August 2010, the Board notified Stanley that Tanya in fact did
have a valid TSP-3 form in her file, and that the Board would
provide the proceeds of her account to Shunn and Koch, her
designated beneficiaries. (Id. ¶ 17.) Stanley protested the
denial of his claim, and the Board rejected Stanley’s protest.
(Id.. ¶¶ 18-20.)
Stanley filed this action seeking an order prohibiting the
Board from disbursing the proceeds of Tanya’s account to Shunn
and Koch, and directing the Board to pay the proceeds of the
account to Stanley.6 The Board has moved to dismiss, arguing
that the complaint failed to allege sufficiently a waiver of
6
Stanley’s complaint does not allege a statutory or common
law basis for his cause of action, but his opposition to Long’s
motion to dismiss or for summary judgment asserts that 5 U.S.C.
§ 8477(e)(3)(B)(ii) and (C) allows him to file this action as a
“beneficiary” of Tanya’s TSP. (Pl.’s Opp’n at 7-8.)
-6-
sovereign immunity because Stanley is not a designated
beneficiary. Stanley opposes.
DISCUSSION
Under Rule 12(b)(1), a defendant may move to dismiss a
complaint for lack of subject-matter jurisdiction. Fed. R. Civ.
P. 12(b)(1). “‘Before a court may address the merits of a
complaint, it must assure that it has jurisdiction to entertain
the claims.’” Sierra Club v. U.S. Environmental Protection
Agency, Civil Action No. 08-424 (RWR), 2012 WL 1008680, at *2
(D.D.C. March 27, 2012) (quoting Cornish v. Dudas, 715 F. Supp.
2d 56, 60 (D.D.C. 2010) (internal quotation omitted)). “A
plaintiff bears the burden to establish that the court has
subject matter jurisdiction over the claims in the complaint.”
Sierra Club, 2012 WL 1008680, at *2 (citing Shuler v. United
States, 531 F.3d 930, 932 (D.C. Cir. 2008). “If the plaintiff
fails to do so, the court must dismiss the action.” Sierra Club,
2012 WL 1008680, at *2 (citing Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 94 (1998) (citing Ex parte McCardle, 74 U.S.
506, 514 (1868))). “‘Because subject-matter jurisdiction focuses
on the court’s power to hear the claim, however, the court must
give the plaintiff's factual allegations closer scrutiny when
resolving a Rule 12(b)(1) motion.’” Nat’l Treasury Employees
Union v. Whipple, 636 F. Supp. 2d 63, 68 (D.D.C. 2009) (quoting
Jin v. Ministry of State Sec., 475 F. Supp. 2d 54, 60 (D.D.C.
-7-
2007)). “The court may look beyond the complaint, but ‘must
accept as true the allegations in the complaint and consider the
factual allegations of the complaint in the light most favorable
to the non-moving party.’” Whipple, 636 F. Supp. 2d at 68-69
(quoting Short v. Chertoff, 526 F. Supp. 2d 37, 41 (D.D.C.
2007)).
“‘[S]overeign immunity is jurisdictional’ and ‘[a]bsent a
waiver, . . . shields the Federal Government and its agencies
from suit.’” Cohen v. United States, 650 F.3d 717, 723
(D.C. Cir. 2011) (quoting FDIC v. Meyer, 510 U.S. 471, 475 (1994)
(citing Loeffler v. Frank, 486 U.S. 549, 554 (1988), and Federal
Housing Administration v. Burr, 309 U.S. 242, 244 (1940))). “‘It
is axiomatic that the United States may not be sued without its
consent and that the existence of consent is a prerequisite for
jurisdiction.’” Bloch v. United States Census Bureau, 754 F.
Supp. 2d 15, 17 (D.D.C. 2010) (quoting United States v. Mitchell,
463 U.S. 206, 212 (1983)).
Long argues that Stanley failed to allege a viable waiver of
sovereign immunity. According to Long, to the extent that
Stanley has alleged that the Federal Employees Retirement Systems
Act (“FERSA”) waives the Board’s sovereign immunity, that waiver
applies in limited circumstances only -- circumstances that
Stanley’s complaint fails to allege. The statute that
purportedly provides the waiver of sovereign immunity in this
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case provides, in relevant part, that a “civil action may be
brought in the district courts of the United States . . . by any
participant or beneficiary . . . to recover benefits of such
participant or beneficiary . . . , to enforce any right of such
participant or beneficiary under such provisions, or to clarify
any such right to future benefits under such provisions[.]”
5 U.S.C. § 8477(e)(3)(C). Long argues that Stanley is neither a
beneficiary nor a participant, and therefore is unable to bring
this action under that section.
The FERSA defines beneficiary as “an individual (other than
a participant) entitled to payment from the Thrift Savings Fund
under subchapter III of this chapter [5 U.S.C. §§ 8431-8440f.]”
5 U.S.C. § 8471(1). An employee or member designates a
beneficiary by having a “signed and witnessed writing” submitted
to the Board’s Office before the participant’s death. 5 U.S.C.
§ 8424(d). Under § 8424(d), benefits “shall be paid to the
individual or individuals surviving the employee or Member and
alive at the date title to the payment arises in the following
order of precedence, and the payment bars recovery by any other
individual: First, to the beneficiary or beneficiaries designated
by the employee or Member in a signed and witnessed writing[.]”
5 U.S.C. § 8424(d). If an employee or member dies “with no
designated beneficiary and is survived by a spouse, the spouse
may maintain the portion of the . . . account to which the spouse
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is entitled[.]” 5 U.S.C. § 8433(e)(2); see also 5 U.S.C.
§ 8424(d).
Here, it is undisputed that the 1993 TSP-3 form designating
Shunn and Koch as beneficiaries was properly signed, witnessed
and received by the Board before Tanya’s death.7 Stanley argues
that he too should be considered a beneficiary, because he would
be entitled to payment but for the Board’s assertions that Tanya
did not have an active designation of beneficiary form on file.
He argues that the doctrine of equitable estoppel should be
applied against the Board to preclude its decision to award the
proceeds of the account to Shunn and Koch.
“Estoppel is an equitable doctrine invoked to avoid
injustice in particular cases.” Heckler v. Cmty. Health Svces.,
467 U.S. 51, 59 (1984). “A party attempting to apply equitable
estoppel against the government must show that ‘(1) there was a
definite representation to the party claiming estoppel, (2) the
party relied on its adversary’s conduct in such a manner as to
change his position for the worse, (3) the party’s reliance was
reasonable[,] and (4) the government engaged in affirmative
misconduct.’” Keating v. FERC, 569 F.3d 427, 434 (D.C. Cir.
2009) (quoting Morris Communic’ns, Inc. v. FCC, 566 F.3d 184, 189
(D.C. Cir. 2009)). The application of equitable estoppel against
7
See Pl.’s Mem. at 11 (conceding that the 1993 TSP-3 form
is valid).
-10-
“the government must be rigid and sparing.” ATC Petroleum Inc.
v. Sanders, 860 F.2d 1104, 1111 (D.C. Cir. 1988); see also Int’l
Union v. Clark, Civil Action No. 02-1484 (GK), 2006 WL 2598046,
at *12 (D.D.C. Sept. 11, 2006) (stating that “[t]here is a clear
presumption in this Circuit against invoking the [estoppel]
doctrine against government actors in any but the most extreme
circumstances”).
The Board notes that it made no misleading communications
directly to Stanley. The annual statements indicating that Tanya
had not designated a beneficiary were sent to Tanya, not Stanley.
The telephone call containing the inaccurate information about
Tanya’s TSP-3 was between a PSR and Tanya, not Stanley. The
Board thus notes that Stanley cannot claim that he changed his
position for the worse based on any direct communication from the
Board, and that only Tanya, not he, could have changed his
putative beneficiary position one way or the other. But with
nary an apology for the bureaucracy's bungling, the Board makes
the breezy claims that Tanya’s reliance on what the Board told
her was unreasonable, and that she did not act diligently. It is
difficult to fathom how more diligently one could have responded
to a Board letter mailed on May 26 than to have called the Board
on June 2. It is even harder to imagine why a reasonable person
should have distrusted annual written declarations from the Board
throughout the twelve years of her marriage - - confirmed orally
-11-
by a Board representative - - that her spouse would receive her
account proceeds upon her death. There was nothing in those
declarations about which Tanya needed to take any diligent
action.
The difficulty here is that Stanley cites to no precedent in
which a court estopped the Board from paying TSP death benefits
to a person identified in a valid TSP-3 form as a beneficiary and
directed the Board to pay the benefits to someone else. Office
of Personnel Management v. Richmond, 496 U.S. 414, 424 (1990),
recognizes the command of the Appropriations Clause of the
Constitution that no money may be paid from the Treasury except
as authorized by Congress. It seems equally true that no money
may be paid from federal employee savings funds established by
Congress except as authorized by Congress. “[J]udicial use of
the equitable doctrine of estoppel cannot grant [plaintiff] a
money remedy that Congress has not authorized. See INS v.
Pangilinan, 486 U.S. 875, 883 (1988) (‘Courts of equity can no
more disregard statutory and constitutional requirements and
provisions than can courts of law’).” Id. at 426. Stanley has
presented no evidence that Congress has by law vested in the
Board the discretion to make distributions contrary to valid
TSP-3 forms where the Board is satisfied that the equities demand
it. Cf. Richmond, 496 U.S. at 429 (citing Congressional act
granting the HHS secretary the discretion to waive a statutory
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application deadline missed by an applicant because of
misinformation provided by an HHS employee).
Indeed, it would be most anomalous for a judicial order
to require a Government official, such as the officers
of OPM, to make an extrastatutory payment of federal
funds. It is a federal crime, punishable by fine and
imprisonment, for any Government officer or employee to
knowingly spend money in excess of that appropriated by
Congress. See 31 U.S.C. §§ 1341, 1350. If an
executive officer on his own initiative had decided
that, in fairness, [plaintiff] should receive benefits
despite the statutory bar, the official would risk
prosecution. That [plaintiff] now seeks a court order
to effect the same result serves to highlight the
weakness and novelty of his claim. The whole history
and practice with respect to claims against the United
States reveals the impossibility of an estoppel claim
for money in violation of a statute.”
Richmond, 496 U.S. at 430. Even if his estoppel claim were
possible, Stanley has presented no authority demonstrating that
the bureaucratic bungling that occurred here rises to the level
of affirmative misconduct.
CONCLUSION
Sadly for him, Stanley has not demonstrated that he has
standing as a beneficiary of Tanya’s plan who would be entitled
to bring an action against the Board under FERSA, nor has he
shown that the principles of equitable estoppel can apply in this
case to make him a beneficiary. Therefore, Stanley has not
established a waiver of sovereign immunity for the claim he
raises, and this case will be dismissed for lack of subject
matter jurisdiction. An appropriate final order accompanies this
memorandum opinion.
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SIGNED this 16th day of August, 2012.
/s/
RICHARD W. ROBERTS
United States District Judge