The opinion
In the United States Court of Federal Claims
(E-Filed: August 31, 2015)
)
ROBERT M. ATHEY, et al., )
)
Plaintiffs, )
) No. 99-2051C
v. )
)
THE UNITED STATES, ) Lump-Sum Payment for Annual
) Leave; 5 U.S.C. §§ 5551–5553;
Defendant. ) 5 C.F.R. § 550.1202;
) Back Pay Act; Interest;
) 5 U.S.C. § 5596;
GERALD K. KANDEL, et al., ) 5 C.F.R. § 550.803
)
Plaintiffs, )
)
v. ) No. 06-872C
)
THE UNITED STATES, )
)
Defendant. )
)
Ira M. Lechner, Washington, D.C., for plaintiffs in both Athey and Kandel. Steven W.
Winton, San Diego, CA, of counsel for plaintiffs in Kandel.
Hillary A. Stern, Senior Trial Counsel, with whom were Benjamin C. Mizer, Principal
Deputy Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Reginald T.
Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Washington, D.C., for defendant in Athey.
Mikki Cottet, Senior Trial Counsel, with whom were Joyce R. Branda, Acting Assistant
Attorney General, Robert E. Kirschman, Jr., Director, and Reginald T. Blades, Jr.,
Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, Washington, D.C., for defendant in Kandel.
OPINION AND ORDER
CAMPBELL-SMITH, Chief Judge
Pending before the court are two class actions, Athey v. United States, No. 99-
2051C, and Kandel v. United States, No. 06-872C, comprised of former federal civilian
employees of a variety of agencies who retired, died, or separated from federal civilian
service at different times, during the years 1993 through 1999. Upon separation, these
individuals were statutorily entitled to lump-sum payments for their accrued but unused
annual leave. 5 U.S.C. §§ 5551 et seq. (lump-sum payment statute). They allege the
government miscalculated these payments and should be liable for their correction, plus
interest and attorneys’ fees. See generally 4th Am. Comp., ECF No. 44-1, Athey;
Compl., ECF No. 1, Kandel (formerly titled, Solow v. United States). The court
consolidated the two cases for the limited purpose of addressing liability for interest
under the Back Pay Act (BPA), 5 U.S.C. § 5596, which the court now addresses in the
posture of cross-motions for partial summary judgment.
I. UNDISPUTED LAW AND FACTS
Federal employees covered by the lump-sum payment statute who separate from
federal civilian service are entitled to a lump-sum payment for their accrued and
accumulated unused annual leave. See 5 U.S.C. §§ 5551(a), 5552.1 The lump sum must
equal the pay the employee would have received had the individual worked his or her
regular and customary scheduled hours until expiration of the unused leave period. See
id. § 5551(a) (noting some limitations); see also 5 C.F.R. §§ 550.1201–07 (regulations
interpreting and implementing 5 U.S.C. §§ 5551–52).2
1
Congress has twice amended Section 5551 of title 5 since 1993. See 5 U.S.C.
§ 5551 (1991), amended by National Defense Authorization Act For Fiscal Year 1997,
Pub. L. No. 104–201, Div. A, Title XVI, § 1611(a), 110 Stat. 2738 (effective Sept. 23,
1996), amended by Federal Courts Improvement Act of 2000, Pub. L. No. 106–518, Title
III, § 310, 114 Stat. 2420 (effective Nov. 13, 2000 to present). Differences in the
versions are immaterial to this dispute. Section 5552—governing employees who elect to
receive lump sums when they leave federal civilian service for active military duty—was
adopted in 1966 and has never been amended. See Act of Sept. 6, 1966, Pub. L. No. 89–
554, 80 Stat. 489.
2
The court cites to the current version of the lump-sum payment regulations for
convenience. These regulations have been in effect, in one form or another, since 1992
when Congress vested the Office of Personnel Management (OPM) with authority to
adopt them. See Technical & Miscellaneous Civil Service Amendments Act of 1992,
Pub. L. No. 102–378, § 2(45)(A), 106 Stat. 1346 (codified at 5 U.S.C. § 5553).
Differences between the current version and earlier versions, in effect between 1993 and
2
To calculate the lump sum, the Office of Personnel Management (OPM) instructs
that the agency first determine the leave period by projecting the unused leave from the
first workday after separation and counting all subsequent workdays and holidays until
exhausted. 5 C.F.R. § 550.1204(a). The agency should then “multipl[y] the number of
hours of accumulated and accrued annual leave by the applicable hourly rate of pay,
including other applicable types of pay listed in paragraph (b) of this section.” Id.
§ 550.1205(a). In turn, paragraph (b) provides that the lump sum calculus shall include,
at a minimum, an individual’s “rate of basic pay” at separation as defined by 5 C.F.R.
§ 550.1202 and within-grade increases as defined by 5 U.S.C. §§ 5335, 5343(e)(2). See
id. § 550.1205(b)(1), (4); see also id. § 550.1205(c) (vesting agency heads with discretion
to include other types of pay as well by adopting agency-specific regulations or other
standards). Lastly, individuals are also entitled to any cost-of-living adjustments
(COLAs) and locality pay adjustments that take effect after the employee’s separation
date but before the expiration of his or her unused leave term. See id. § 550.1205(b)(2).
In that instance, “[t]he agency must adjust the lump-sum payment to reflect the increased
rate on or after the effective date of the pay adjustment.” Id.
In practice, agencies appear to have computed and paid an initial lump sum based
on the salary rate in effect on the date of separation, including any other applicable types
of pay. See Def.’s Admis. Nos. 4, 53, ECF No. 198-2, Athey (citing VA policies not in
the record); Andrus Decl. ¶ 3, ECF No. 98-3, Kandel. If a COLA or locality pay
adjustment later took effect before an individual’s unused leave period expired, the
agency’s policy was to issue a supplemental payment to cover the pay increase from the
effective date of the adjustment to expiration of the outstanding leave. See VA
Handbook 5007/30, part IV, app. B ¶ 2, ECF No. 198-6, Athey; Andrus Decl. ¶ 3, ECF
No. 98-3, Kandel.
The VA explains that its field offices manually processed both the initial and
supplemental lump sums for employees separating from the VA. Def.’s Admis. Nos. 43,
44, ECF No. 198-2, Athey. “[U]nless . . . payroll personnel within a Payroll Office or at
a VA field office affirmatively submitted a Form TT 82 that indicated that an employee
was entitled to a pay adjustment that became effective during the employee[’s] lump-sum
leave period, the employee did not receive the pay adjustment.” Def.’s Admis. No. 41,
ECF No. 198-2, Athey. This appears to have been a daunting task. The VA explains
“[t]here are over 200 Veterans Administration (VA) field offices and over 225,000 VA
employees who retired, separated, or died (from April 7, 1993 to April 14, 2002).” Def.’s
Admis. No. 1, ECF No. 198-2, Athey. Likewise, the Government Accountability Office
(GAO) explains that throughout the relevant period, “payments, such as awards, bonuses,
lump sum leave payments, and dual rate payments for accrued leave,” also known as
1999 when class members separated from their agencies, are immaterial to this opinion
unless otherwise noted.
3
supplemental lump sums, “were processed manually by GAO employees in the Human
Capital Office.” Andrus Decl. ¶ 2, ECF No. 98-3, Kandel. An initial lump-sum payment
would issue based on an individual’s rate of pay at separation; then, a second lump sum
would issue reflecting COLA and locality pay adjustments if and when appropriate.
Id. ¶ 3. The record does not contain any evidence regarding the processing of lump-sum
payments at other agencies, but the court assumes that other agencies employed, or
intended to employ, similar two-step processes.
Neither the Athey plaintiffs nor the Kandel plaintiffs challenge any agency’s
computation and payment of the initial lump sums. Rather, plaintiffs in both cases
complain about their agencies’ alleged failures to issue supplemental lump sums to
eligible individuals reflecting applicable COLAs, locality pay adjustments, and non-
overtime Sunday pay.
II. PROCEDURAL POSTURE
A. The Athey Action
The Athey class is comprised of former employees of the Department of Veteran
Affairs (VA), who were eligible for lump-sum payments for unused annual leave when
they retired, died, or separated from the VA on or after April 7, 1993. See Order App’g
Class Certification 2, ECF No. 164, Athey. The court has determined it has jurisdiction
over the Athey plaintiffs’ claims under the lump-sum payment statute, 5 U.S.C. § 5551 et
seq. Athey v. United States (Athey I), 78 Fed. Cl. 157, 159–61 (2007) (Smith, J.), recons.
denied, Order, July 24, 2009, ECF No. 98 (Smith, J.) (denying reconsideration “for the
reasons set forth in the [c]ourt’s Kandel v. United States [(Kandel I)], 85 Fed. Cl. 437
(2009) opinion”). However, their claims for supplemental lump sums reflecting certain
“additional” or “premium” pay did not survive defendant’s Rule 12(b)(6) challenge. Id.
at 161–63. This left the Athey plaintiffs with their claims for supplemental payments
reflecting (i) non-overtime Sunday pay, for the time period April 7, 1993 through
September 30, 1997, provided they regularly and customarily performed work on a
Sunday prior to their separation, which survived defendant’s motion to dismiss; and (ii)
COLAs and locality pay adjustments, which defendant never challenged in its motion to
dismiss. See id. at 162–64.
The court has also held it has jurisdiction over the Athey plaintiffs’ claim for
interest under the Back Pay Act. Athey v. United States (Athey II), 108 Fed. Cl. 617,
618–19 (2013) (Smith, J.). Further, the court determined that the Athey plaintiffs had
stated a claim for relief under the BPA because, the court reasoned, their claims
“adequately fall within the [Act’s] defined terms of ‘employee’ and ‘pay.’” Id. at 622.
Finally, the court also granted partial summary judgment to a sub-set of the Athey
class, finding that the VA violated the lump-sum payment statute to the extent it failed to
include COLAs and locality pay adjustments in supplemental lump sums for any of the
4
agency’s qualifying former General Schedule (GS) employees. Athey v. United States
(Athey III), 115 Fed. Cl. 739, 744–48 (2014) (Campbell-Smith, J.). Liability to non-GS
employees, as well as so-called “hybrid” employees, for COLAs and locality pay
adjustments remains outstanding, as does liability to the entire class for non-overtime
Sunday pay. See id. at 743, 748. The parties currently are engaged in damages
discovery.
B. The Kandel Case
The Kandel class is comprised of former employees of “all” other agencies,
excepting the VA covered in Athey; seventeen agencies who settled in earlier litigation,
Archuleta v. United States, No. 99-205C; and sixty others expressly excluded. Order
App’g Class Certification 2 & Ex. A, ECF No. 123, Kandel. The class is further limited
to those who separated on or after April 14, 1993 but before September 7, 1999. Id. at 2.
They seek supplemental lump sums reflecting COLAs and locality pay increases, non-
overtime Sunday pay, and foreign post allowances. See id. at 2–3.
To date, the court has issued numerous opinions. See Solow v. United States, 78
Fed. Cl. 86 (2007) (Smith, J.) (finding action not barred by res judicata, laches, or the
statute of limitations, which was tolled), recons. granted-in-part sub nom. Kandel v.
United States (Kandel I), 85 Fed. Cl. 437 (2009) (Smith, J.) (holding equitable tolling
was not available but that the limitations period was still subject to statutory tolling),
recons. denied by Order, May 29, 2009, ECF No. 54; see also Kandel v. United States
(Kandel II), 115 Fed. Cl. 749 (2014) (Campbell-Smith, J.) (denying plaintiffs’ motion to
amend class notices to state that BPA interest was available); Kandel v. United States
(Kandel III), 115 Fed. Cl. 752 (2014) (Campbell-Smith, J.) (denying partial summary
judgment to four named plaintiffs on lump-sum liability). Procedurally, notice to
potential class members was mailed in June 2015 and the period for opting into the class
is scheduled to close in the fall of 2015. See Order, July 13, 2015, ECF No. 197, Kandel.
C. Consolidation & Present Motions
On March 30, 2015, the court consolidated the two cases for the limited purpose of
addressing liability for interest under the Back Pay Act. Order, ECF No. 230, Athey;
Order, ECF No. 192, Kandel; see also R. Ct. Fed. Cl. (RCFC) 42(a) (consolidation
authority). Now before the court are the parties’ cross-motions for partial summary
judgment regarding whether the Back Pay Act, 5 U.S.C. § 5596, provides a basis for
prejudgment interest on the violations of the lump-sum payment statute alleged in this
case. The parties’ cross-motions, responses, replies, and other submissions on the subject
of interest are scattered across a myriad of filings in Athey, see ECF Nos. 198, 204, 205;
see also ECF Nos. 183, 186, 173, 194, 233, 237, as well as in Kandel, see ECF Nos. 98,
141, 142, 143, 149, 150, 151, 161, 163; see also ECF Nos. 129, 132, 137, 139. For ease
of reference, the court will cite to these materials by merely the generic “Pls.’ Br.” or
“Def.’s Br.”
5
III. LAW OF THE CASE
Before the court considers the merits of the cross-motions for summary judgment,
it must address a preliminary question. Plaintiffs invoke the law of the case doctrine,
arguing that the court has already resolved plaintiffs’ entitlement to Back Pay Act interest
as a matter of law and cannot revisit it now. See generally Pls.’ Br., ECF Nos. 198-1,
205, 233, 237, Athey; Pls.’ Br., ECF Nos. 129, 141-1, Kandel. They refer to Judge
Smith’s decision in Athey II, which denied defendant’s Rule 12(b)(6) motion to dismiss
the Athey plaintiffs’ BPA interest claim because, the court reasoned, plaintiffs’ claims
“adequately fall within the [BPA’s] defined terms of ‘employee’ and ‘pay’” so as to state
a claim under the Act. Athey II, 108 Fed. Cl. at 622. Plaintiffs argue that this decision
did more than merely gauge the facial plausibility of plaintiffs’ BPA claim. Pls.’ Br. 3,
ECF No. 233, Athey. They allege it created the law of the case with respect to at least
two findings—(i) plaintiffs qualified as “employee[s]” under the Act; and (ii) lump-sum
payments for annual leave qualified as “pay” under the Act. See id. at 3–6. Plaintiffs
further contend that as a result of these findings, Athey II essentially stands for the much
broader holding that defendant is in fact liable to plaintiffs for BPA interest on an
agency’s violation of the lump-sum payment statute and, therefore, there is no need for
any further briefing or decision on the subject of interest. See Pls.’ Br. 9, ECF No. 205,
Athey; Pls.’ Br. 2–4, ECF No. 129, Kandel (seeking to amend the class notice to state
“interest is due and payable” based on Athey II). Defendant responds that Athey II
cannot be the law of the case because its conclusions with respect to “employee” and
“pay” are clearly erroneous and, further, plaintiffs fail to satisfy the additional BPA
criteria that they have suffered from an “unjustified or unwarranted personnel action.”
See Def.’s Br. 3–6, ECF No. 137, Kandel; Def.’s Br. 9–10 n.4, ECF No. 149, Kandel.
A. The Law of the Case Doctrine
The “law of the case” doctrine “posits that when a court decides upon a rule of
law, that decision should continue to govern the same issues in subsequent stages in the
same case.” Arizona v. California, 460 U.S. 605, 618 (1983), supplemented by 466 U.S.
144 (1984); see also Agostini v. Felton, 521 U.S. 203, 236 (1997) (citing Messinger v.
Anderson, 225 U.S. 436, 444 (1912)). By discouraging re-litigation of decided issues,
the doctrine protects the parties’ settled expectations, promotes orderly development of a
case, fosters judicial efficiency, and discourages endless litigation. Suel v. Sec’y of
Health & Human Servs., 192 F.3d 981, 984–85 (Fed. Cir. 1999); see also Toro Co. v.
White Consol. Indus., Inc., 383 F.3d 1326, 1335 (Fed. Cir. 2004). It also fosters fairness
because “a litigant given one good bite at the apple should not have a second.” Suel, 192
F.3d at 985 (quoting Perkin–Elmer Corp. v. Computervision Corp., 732 F.2d 888, 900
(Fed. Cir. 1984)); see also Toro, 383 F.3d at 1335 (citing United States v. Turtle
Mountain Band of Chippewa Indians, 612 F.2d 517, 520 (Ct. Cl. 1979) (“No litigant
deserves an opportunity to go over the same ground twice, hoping that the passage of
time or changes in the composition of the court will provide a more favorable result the
second time.”)).
6
The doctrine only precludes reconsideration of “issues that were actually decided,
either explicitly or by necessary implication, in the earlier litigation,” Toro, 383 F.3d at
1335, and in practice, it is applied “more or less strictly depending on the circumstances
of the case,” Jamesbury Corp. v. Litton Indus. Products, Inc., 839 F.2d 1544, 1550 (Fed.
Cir. 1988), overruled on other grounds by A.C. Aukerman Co. v. R.L. Chaides Constr.
Co., 960 F.2d 1020 (Fed. Cir. 1992). “When a judgment of a trial court has been
appealed, the decision of the appellate court determines the law of the case, and the trial
court cannot depart from it on remand.” Jamesbury, 839 F.2d at 1550; see also Banks v.
United States, 741 F.3d 1268, 1276 (Fed. Cir. 2014) (“The mandate rule, encompassed by
the broader law-of-the-case doctrine, dictates that ‘an inferior court has no power or
authority to deviate from the mandate issued by an appellate court.’” (quoting Briggs v.
Pa. R. Co., 334 U.S. 304, 306 (1948))). The doctrine also applies “especially to ‘transfer
decisions of coordinate courts,’ because ‘transferee courts that feel entirely free to revisit
transfer decisions of a coordinate court threaten to send litigants into a vicious circle of
litigation.’” Taylor v. United States, 73 Fed. Cl. 532, 538 (2006) (quoting Christianson v.
Colt Indust. Operating Corp., 486 U.S. 800, 816 (1988)).
“At the trial level however, the law of the case is little more than a management
practice to permit logical progression toward judgment.” Jamesbury, 839 F.2d at 1550
(quotation marks omitted). Thus, at least in the context of interlocutory decisions, “[i]t is
well accepted that the application of the law of the case doctrine is discretionary” and
“should not be applied woodenly in a way inconsistent with substantial justice.” Hudson
v. Principi, 260 F.3d 1357, 1363–64 (Fed. Cir. 2001); accord Arizona, 460 U.S. at 618.
This discretion comports with the court’s inherent power to revise its own decisions at
any time before the entry of judgment. See Jamesbury, 839 F.2d at 1550; C.W. Over &
Sons, Inc. v. United States, 48 Fed. Cl. 342, 347 (2000); see also RCFC 54(b).
That said, while “a court has the power to revisit prior decisions of its own . . . in
any circumstance, . . . [it] should be loath[] to do so in the absence of extraordinary
circumstances.” McGuire v. United States, 707 F.3d 1351, 1365 (Fed. Cir. 2013) (Reyna,
J., concurring) (quoting Christianson, 486 U.S. at 817). “Reasons that may warrant
departure from the law of the case . . . include [1] the discovery of new and different
material evidence . . . , or [2] an intervening change of controlling legal authority, or [3]
when the prior decision is clearly incorrect and its preservation would work a manifest
injustice.” Intergraph Corp. v. Intel Corp., 253 F.3d 695, 698 (Fed. Cir. 2001) (citing
Smith Int’l, Inc. v. Hughes Tool Co., 759 F.2d 1572, 1576 (Fed. Cir. 1985)).
B. Athey II is Not Dispositive on Summary Judgment
The court first addresses plaintiffs’ argument that Athey II, which denied
defendant’s 12(b)(6) motion to dismiss, somehow ipso facto also found liability to
plaintiffs for BPA interest without the need for further argument or decision. Plaintiffs’
attempt to conflate a ruling on a motion to dismiss with one on summary judgment lacks
merit. An initial denial of a motion to dismiss does not foreclose, as the law of the case,
7
the court’s later consideration of those claims on summary judgment. See Behrens v.
Pelletier, 516 U.S. 299, 309 (1996); Gould, Inc. v. United States, 66 Fed. Cl. 253, 266
(2005) (“The ‘law of the case,’ therefore, is that these allegations survive a motion to
dismiss for failure to state a claim upon which relief can be granted. Whether the merits
of those very same claims survive summary judgment is an entirely different and
undecided matter.”).3 The law of the case does not apply because a motion to dismiss
and a motion for summary judgment require consideration of different “legally relevant
factors.” See Behrens, 516 U.S. at 309. A different factual record and a different
standard of review governs each motion. See id. Blurring the line between the motions
“would senselessly rob parties of the protection afforded by Federal Rule of Civil
Procedure 56.” Tse v. Ventana Med. Sys., Inc., 123 F. Supp.2d 213, 222 (D. Del. 2000)
(quoting McIntyre v. Philadelphia Suburban Corp., 90 F. Supp.2d 596, 603 n.5 (E.D. Pa.
2000)), aff’d, 297 F.3d 210 (3d Cir. 2002); see also C. Sanchez & Son, Inc. v. United
States, 6 F.3d 1539, 1541 n.2 (Fed. Cir. 1993) (explaining that RCFC 56 is, in pertinent
part, identical to Federal Rule of Civil Procedure 56).
The prior denial of a motion to dismiss may still prove to be an indicator of later
findings on liability, but the two rulings are not synonymous. Courts have examined the
extent to which the “legally relevant factors” referenced in Behrens overlap or differ in
prior and subsequent motions to dismiss or for summary judgment. See, e.g., Toro, 383
F.3d at 1336–37 (concluding prior claim construction was not law of the case for later
analysis of disclosure-dedication rule because disclosed but unclaimed subject matter
relevant in the later analysis was not at the crux of the court’s earlier claim construction
opinion); C.W. Over & Sons, 48 Fed. Cl. at 347 (finding law of the case was not
applicable where current motion for summary judgment relied on different grounds than
prior motion for summary judgment); Samuel T. Isaac & Assocs., Inc. v. United States, 3
Cl. Ct. 524, 527–28 (1983) (same); accord McKenzie v. Bellsouth Telecomms., Inc., 219
F.3d 508, 513 (6th Cir. 2000) (finding prior “holding on a motion to dismiss does not
establish the law of the case for purposes of summary judgment, when the complaint has
been supplemented by discovery”); Equal Rights Ctr. v. Equity Residential, 798 F.
Supp.2d 707, 721 (D. Md. 2011) (explaining that “[a] denial of a motion to dismiss
3
Numerous courts agree that a prior denial of a motion to dismiss does not preclude
a subsequent grant of summary judgment to defendant. See Stonecipher v. Valles, 759
F.3d 1134, 1148 n.9 (10th Cir. 2014), cert. denied, 135 S. Ct. 881 (2014); Maraschiello v.
City of Buffalo Police Dep’t, 709 F.3d 87, 97 (2d Cir. 2013), cert. denied, 134 S. Ct. 119
(2013); Parmelee Transp. Co. v. Keeshin, 292 F.2d 794, 797 (7th Cir. 1961); see also Fin.
Res. Network, Inc. v. Brown & Brown, Inc., 754 F. Supp.2d 128, 155 (D. Mass. 2010);
Schneyder v. Smith, 709 F. Supp. 2d 368, 384 (E.D. Pa. 2010), aff’d, 653 F.3d 313 (3d
Cir. 2011); Conopco, Inc. v. McCreadie, 826 F. Supp. 855, 867 n.5 (D.N.J. 1993), aff’d,
40 F.3d 1239 (3d Cir. 1994); Kostiuk v. Town of Riverhead, 570 F. Supp. 603, 607
(E.D.N.Y. 1983).
8
would only be dispositive of a later summary judgment motion, . . . if the factual showing
were essentially congruent with the factual allegations made in the complaint,” which
was not the case there).
Athey II held that defendant failed to carry its burden of proving that plaintiffs’
facts—assumed true for purposes of the motion—did not under law entitle defendant to
dismissal of plaintiffs’ claims. Athey II did not affirmatively state that plaintiffs are
entitled to BPA interest as a matter of law. Athey II also cannot be dispositive on
summary judgment where it only weighed two of four criteria necessary for BPA relief
because the doctrine can apply only to issues actually decided. Athey II considered only
whether plaintiffs were “employee[s]” and the lump sum was “pay,” but never addressed
whether this court was an “appropriate authority” under the facts of this case or whether
the procedural errors at issue in this case amounted to “unwarranted or unjustified
personnel action[s].” See 5 U.S.C. § 5551(a). Thus, Athey II’s BPA analysis is
incomplete for purposes of summary judgment.
C. Athey II Erred In Concluding the Lump Sum Was “Pay”
In any event, whether BPA interest is available for violations of the lump-sum
payment statute is an issue of largely first impression; thus, this court will not so
woodenly apply the law of the case doctrine to preclude a thorough review of the claim.
See Jamesbury, 839 F.2d at 1551 (stating the doctrine did not preclude revisiting a non-
appealable denial of summary judgment if “further reflection may allow a better informed
ruling in accordance with the conscience of the court”) (quoting Corporacion de
Mercadeo Agricola v. Mellon Bank Int’l, 608 F.2d 43, 48 (2d Cir. 1979)); Adams v.
United States, 48 Fed. Cl. 602, 604 (2001) (revisiting a prior interlocutory order that held
BPA interest was not available to plaintiffs who succeeded in recovering overtime pay
under the FLSA because “the issue is important and the law is unsettled”).
This is especially true where, as here, the court finds clear error in one of Athey
II’s principle findings that otherwise might have qualified for deference as law of the
case. Athey II erroneously held that the lump-sum payment for annual leave was “pay”
for purposes of the Back Pay Act. 108 Fed. Cl. at 619–20. The lump-sum payment
statute plainly and unambiguously states that the “lump-sum payment is considered pay
for taxation purposes only.” 5 U.S.C. § 5551(a) (emphasis added). Thus, by definition, it
is not “pay” for other purposes, including the Back Pay Act. See Sharp v. United States,
580 F.3d 1234, 1238 (Fed. Cir. 2009) (“[W]e must ‘give effect, if possible, to every
clause and word of a statute’ and should avoid rendering any of the statutory text
meaningless or as mere surplusage.” (quoting Duncan v. Walker, 533 U.S. 167, 174
(2001)). The plaintiffs now even concede, “the lump-sum payment is not ‘pay’ by virtue
of the specific limitation to taxation included in the lump-sum statute.” Pls.’ Br. 2, ECF
No. 139, Kandel (switching gears to argue the lump-sum payment falls, instead, within
“allowances, or differentials” as those terms are defined in the BPA); Pls.’ Br. 15–16,
ECF No. 141-1, Kandel (same).
9
Case law provides further support for this conclusion. See Erickson v. United
States & Metro. Life Ins. Co., 178 Ct. Cl. 183 (1967) (“It is expressly provided by [a
predecessor] statute that such a [lump-sum] payment is not to be regarded as salary
except for purposes of taxation;” thus, the unused leave that triggered it did not extend
the plaintiff’s retirement date); Nagle v. United States, 135 F. Supp. 424, 425 (Ct. Cl.
1955) (quoting the predecessor 1944 Act that provided, “the lump-sum payment . . . shall
not be regarded, except for purposes of taxation, as salary or compensation”).
In American Federation of Government Employees, AFL-CIO v. United States,
for example, the district court considered “whether the lump-sum payment for military
leave,” payable under 37 U.S.C. § 501(b)(1), “constitute[d] deferred compensation, or
[was] an ancillary fringe benefit afforded persons employed by the military.” 622 F.
Supp. 1109, 1115 (N.D. Ga. 1984), aff’d sub nom. Am. Fed’n of Gov’t Employees v.
United States, 780 F.2d 720 (Fed. Cir. 1986). Given the similarities between Section
501(b)(1) and the civilian equivalent at 5 U.S.C. § 5551(a), the court compared the two
statutes and concluded that they both authorized “a benefit, and not deferred
compensation, to government and military employees.” Id. First, Congress explicitly
stated that the lump-sum payment is “pay for taxation purposes only,” 5 U.S.C. §
5551(a), much like unused military leave “is not considered as service for any purpose,”
37 U.S.C. § 501(c). Id. Second, “these statutes provide that the lump-sum amount may
be paid only upon separation or discharge.” Id. (citing 5 U.S.C. § 5551(a); 37 U.S.C.
§ 501(b)(1)). Third, “[b]oth statutes provide limitations, 37 U.S.C. § 501(b)(3) (payment
for no more than sixty days); 5 U.S.C. § 5551(a) (period of leave not extended due to
post-separation holiday).” Id.
In addition, even if the lump-sum payment statute and the BPA were found to be
in conflict on this point,4 the lump-sum payment statute’s specific definition of the lump
sum would take precedence over the Back Pay Act’s more general use of the term “pay.”
“Specific terms prevail over the general in the same or another statute which otherwise
might be controlling.” Thiess v. Witt, 100 F.3d 915, 919 (Fed. Cir. 1996), exceptions
sustained in part (Jan. 2, 1997) (quoting D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S.
204, 208 (1932)); see also Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 170
(2007) (explaining in the context of competing regulations that “normally the specific
4
In Athey II, the court found that lump-sum payments fell within the BPA’s
definition of “pay” because 1981 OPM regulations interpreting “pay, allowances,
differentials” under the Back Pay Act broadly defined the phrase to mean “monetary and
employment benefits to which an employee is entitled by virtue of the performance of a
Federal function.” 108 Fed. Cl. 617, 620 (2013) (quoting Pay Administration (General);
Back Pay Regulations, 46 Fed. Reg. 58,271-02, 58,275 (Dec. 1, 1981)). Furthermore,
comments accompanying the final rule expressly excluded retirement benefits, but did
not expressly exclude lump-sum payments for annual leave. 46 Fed. Reg. 58,272.
10
governs the general”). This canon applies “without regard to priority of enactment.”
Thiess, 100 F.3d at 919 (quoting Bulova Watch Co. v. United States, 365 U.S. 753, 758
(1961)); Anchor Sav. Bank, FSB v. United States, 121 Fed. Cl. 296, 327 (2015) (quoting
Morton v. Mancari, 417 U.S. 535, 550–51 (1974)). The lump-sum payment statute has
defined the lump sum as “pay for taxation purposes only” since such payments were first
authorized by Congress in 1944. See Act of Dec. 21, 1994, ch. 632 § 1, 58 Stat. 845
(“That the lump-sum payment herein authorized shall not be regarded, except for
purposes of taxation, as salary or compensation and shall not be subject to retirement
deductions”) (codified at 5 U.S.C. Supp. III, § 61(a) (1944)); see also Act of Sept. 6,
1966, Pub. L. 89-554, 80 Stat. 488 (re-codifying the statute at 5 U.S.C. § 5551(a)). The
Back Pay Act, including its reference to the arguably ambiguous “pay, allowances, or
differentials,” was adopted later. See Erickson v. U.S. Postal Serv., 759 F.3d 1341,
1350–51, 1351 n.3 (Fed. Cir. 2014) (explaining that the original Back Pay Act of 1966,
Pub. L. No. 89-380, 80 Stat. 94, then codified at 5 U.S.C. § 652, was “enacted to
consolidate authorities for awarding back pay to employees subjected to unjustified
personnel actions” (quoting Andress v. U.S. Postal Serv., 56 M.S.P.R. 501, 507 (Mar. 10,
1993) (citing legislative history))), cert. denied, 135 S. Ct. 2919 (2015); see also Act of
Sept. 11, 1967, Pub. L. 90-83, § 1(34)(C), 81 Stat. 203 (transferring the Back Pay Act of
1966 to 5 U.S.C. § 5596). The later-adopted BPA cannot be interpreted to supersede the
earlier lump-sum payment statute because the law is clear that “repeals by implication are
not favored” absent clear congressional intent, Canadian Lumber Trade Alliance v.
United States, 517 F.3d 1319, 1343 (Fed. Cir. 2008) (quoting United States v. United
Cont’l Tuna, 425 U.S. 164, 168 (1976)), and there is no evidence of such intent here.
Thus, the lump-sum payment for annual leave is not “pay” for purposes of the
Back Pay Act, and the court cannot defer to Athey II’s contrary conclusion as the law of
the case.
D. Athey II’s Conclusion That Plaintiffs Are “Employees” Is the Law of the
Case
Under the law of the case doctrine, the court will defer to Athey II’s finding that
plaintiffs are “employee[s]” for purposes of the Back Pay Act. As Athey II explains, to
recover under the Back Pay Act, an individual must qualify as an “employee” as that term
is defined in 5 U.S.C. § 2105(a). See 108 Fed. Cl. at 620. Section 2105(a) defines an
“employee” to mean “an officer and an individual” who is (1) “appointed in the civil
service” by one of several listed officials; (2) “engaged in the performance of a Federal
function under authority of law or an Executive act;” and (3) “subject to the supervision
of [the appointing official] while engaged in the performance of the duties of his
11
position.”5 These three elements are cumulative and a person must satisfy all three to
qualify as an “employee.” Athey II, 108 Fed. Cl. at 620–21 (citing Ainslie v. United
States, 355 F.3d 1371, 1374–75 (Fed. Cir. 2004)); see also Costner v. United States, 665
F.2d 1016, 1020 (Ct. Cl. 1981). Furthermore, under OPM’s 1981 regulations—in effect
during the class periods (1993–1999)—“employee” includes current employees, but may
also include former employees under appropriate circumstances. See id. at 621; Pay
Administration (General); Back Pay Regulations, 46 Fed. Reg. 58,271-02, 58,275 (Dec.
1, 1981) (amending 5 C.F.R. § 550.803 (1981)).
In concluding that plaintiffs herein—who are all former employees—fit within the
BPA, Athey II turned to two Federal Circuit decisions for direction. In Wallace v. Office
of Personnel Management, 283 F.3d 1360, 1362–64 (Fed. Cir. 2002), a former federal
employee brought suit two years after he retired from federal service seeking interest on
miscalculated retirement benefits. The Federal Circuit denied plaintiff relief under the
BPA, reasoning that the BPA “appl[ies] only to payments made to individuals on account
of unjustified or unwarranted personnel actions that occurred while those persons were
‘employees,’ i.e., individuals engaged in the performance of a federal function. Wallace
was not such a person when he was retired.” Id. at 1362.
In contradistinction, Muniz v. United States, 972 F.2d 1304, 1311–13 (Fed. Cir.
1992), involved a former employee’s claim to correct an error in the computation of his
lump-sum payment for annual leave. The central issue before the court was whether
plaintiff’s path to relief was through the courts or instead through the grievance
procedures of his collective bargaining agreement. Neither the Back Pay Act nor section
2105’s definition of “employee” was at issue. But the case nevertheless turned on
whether plaintiff was an employee, or already retired, at the time his claim for his lump
sum arose. The Federal Circuit concluded that plaintiff’s lump-sum payment for annual
leave was due upon severance and based on rights that had accrued and vested during his
employment. Thus, he was still an “employee” at the time his claim arose and his dispute
with respect to the lump sum’s calculation was a grievable matter within his collective
bargaining agreement.
Despite the factual differences between Wallace and Muniz, Athey II reasoned
that both cases “articulate[] the same legal test.” Athey II, 108 Fed. Cl. at 622. “[B]oth
cases ask whether the employee’s claim arose during Federal employment and whether
the claim was in connection with that period of employment.” Id. Applying that test to
this case, the court concluded plaintiffs “seek back pay for a lump-sum payment, which
relates to due compensation from active Federal service.” Id. at 621. Similar to Muniz,
here plaintiffs’ claims for miscalculation of lump sums were due upon severance and are
5
This definition has remained materially unchanged since it was first adopted in
1966. See Act of 1966, Pub. L. No. 89-554, 80 Stat. 409 (codified as amended at 5
U.S.C. § 2105(a)).
12
based on rights that accrued and vested while they were still “employees” for purposes of
the Back Pay Act. Id. at 622. The court is not aware of any “clear error” or other reason
that would justify not applying this Athey II finding as the law of the case.
IV. STANDARD OF REVIEW
Summary judgment is proper if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” RCFC 56(a). When weighing
a motion for summary judgment, “[t]he evidence of the non-movant is to be believed, and
all justifiable inferences are to be drawn in [the non-movant’s] favor.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). “This standard is not changed when the
parties bring cross-motions for summary judgment, [as] each non[-]movant receiv[es] the
benefit of favorable inferences.” Chevron U.S.A. Inc. v. Mobil Producing Texas & New
Mexico, 281 F.3d 1249, 1253 (Fed. Cir. 2002) (citing Murphy Exploration & Production
Co. v. Oryx Energy Co., 101 F.3d 670, 673 (Fed. Cir. 1996)). “[O]n cross-motions for
summary judgment, [if] no genuine issues of material fact [are] in dispute, [the trial
judge’s] duty [is] to grant judgment ‘against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.’” Lima Surgical Assocs., Inc.,
Voluntary Employees’ Beneficiary Ass’n Plan Trust, Huntington Nat. Bank v. United
States, 944 F.2d 885, 888 (Fed. Cir. 1991) (citing trial court opinion quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
V. LEGAL SOURCES FOR INTEREST AWARDS
A. The No-Interest Rule Generally Precludes Interest Awards Against the
Government
“The United States, as sovereign, is immune from suit save as it consents to be
sued.” United States v. Sherwood, 312 U.S. 584, 586 (1941). “A waiver of the Federal
Government’s sovereign immunity must be unequivocally expressed in statutory text, and
will not be implied. Moreover, a waiver of the Government’s sovereign immunity will be
strictly construed, in terms of its scope, in favor of the sovereign.” Lane v. Peña, 518
U.S. 187, 192 (1996) (internal citations omitted).
Arising from this fundamental principle is the corollary “no-interest rule[,] . . . to
the effect that interest cannot be recovered in a suit against the Government in the
absence of an express waiver of sovereign immunity from an award of interest.” Library
of Congress v. Shaw, 478 U.S. 310, 311 (1986); Doyle v. United States, 931 F.2d 1546,
1550 (Fed. Cir. 1991). Thus, the waiver as to interest must be separate from the waiver
as to underlying liability. Shaw, 478 U.S. at 314; see England v. Contel Adv. Sys., Inc.,
384 F.3d 1372, 1379 (Fed. Cir. 2004) (“The no-interest rule can be waived only by
‘specific provision by contract or statute, or express consent by Congress.’” (quoting
Shaw, 478 U.S. at 317)). Codified for this court is the following: “Interest on a claim
13
against the United States shall be allowed in a judgment of the United States Court of
Federal Claims only under a contract or Act of Congress expressly providing for payment
thereof.” 28 U.S.C. § 2516(a) (2012); Shaw, 478 U.S. at 317.
“This requirement of a separate waiver reflects the historical view that interest is
an element of damages separate from damages on the substantive claim.” Shaw, 478
U.S. at 314. Its “purpose,” moreover, “is to permit the Government to occupy an
apparently favored position by protecting it from claims for interest that would prevail
against private parties.” Shaw, 478 U.S. at 315–16 (internal citations and quotations
omitted).
With regard to interest, the Supreme Court has expressly held that “[t]here can be
no consent by implication or by use of ambiguous language.” Shaw, 478 U.S. at 318
(quoting United States v. N.Y. Rayon Importing Co. (N.Y. Rayon), 329 U.S. 654, 659
(1947)); see also United States v. Thayer–West Point Hotel Co., 329 U.S. 585, 590
(1947) (stating that an interest waiver “must be affirmative, clear-cut, [and]
unambiguous”). “Nor can an intent on the part of the framers of a statute or contract to
permit the recovery of interest suffice where the intent is not translated into affirmative
statutory or contractual terms.” Shaw, 478 U.S. at 318 (quoting N.Y. Rayon, 329 U.S. at
659); see also United States v. Nordic Vill., Inc., 503 U.S. 30, 37 (1992) (“[L]egislative
history has no bearing on the ambiguity point. . . . [T]he ‘unequivocal expression’ of
elimination of sovereign immunity that we insist upon is an expression in statutory text.
If clarity does not exist there, it cannot be supplied by a committee report.”). Waivers,
therefore, are limited to their plain language. Shaw, 478 U.S. at 318 (explaining that a
court may “not enlarge the waiver ‘beyond what the language requires’” (quoting
Ruckelshaus v. Sierra Club, 463 U.S. 680, 685–86 (1983))). Ambiguities in language
must be construed in favor of the sovereign’s immunity. United States v. Williams, 514
U.S. 527, 531 (1995).
“[W]hen Congress waives sovereign immunity from interest, the waiver is
typically in the statute itself.” Adams v. United States, 48 Fed. Cl. 602, 604 (2001),
aff’d, 350 F.3d 1216 (Fed. Cir. 2003). “There is no rule, however, that prevents the
waiver from being found in a separate statute.” Id. Thus, while it is plain that the lump-
sum payment statute lacks a waiver for prejudgment interest, see 5 U.S.C. §§ 5551 et
seq., the question remains whether the Back Pay Act might provide the requisite waiver
based on the facts of this case, see 5 U.S.C. § 5596.
B. BPA Interest May Be Available if the Statutory Elements Are Met
The Federal Circuit has not expressly addressed whether the Back Pay Act waives
sovereign immunity for interest on violations of the lump-sum payment statute that
occurred between 1993 and 1999.
14
The BPA’s interest provision was added in 1987. Appropriations Act of 1987,
Pub. L. No. 100–202, § 623, 101 Stat. 1329–428 (codified as amended at 5 U.S.C.
§ 5596(b)(2)(A) (“An amount payable under paragraph (1)(A)(i) of this subsection shall
be payable with interest.”)). Prior to 1987, there was plainly no statute authorizing
interest for violations of the lump-sum payment statute. See Quillo v. United States, 2
Cl. Ct. 242, 243 (1983) (holding former civilian federal employee was not entitled to
interest on lump-sum award for 128 hours of unused annual leave accumulated during his
last tour of duty, since neither statute nor constitutional provision required award of
interest); cf. Rasmussen v. United States, 543 F.2d 134, 142 n.20 (Ct. Cl. 1976) (holding
the Back Pay Act provided a vehicle for allowing back pay for an improper reduction-in-
force but denying interest “since no statute so provide[d] in this kind of case”).
Likewise, since 2000 there has been no statute authorizing interest on
miscalculations of the lump-sum payment because in that year OPM amended its BPA
regulations to exclude from the Back Pay Act lump-sum payments for annual leave as
well as other payments due upon an employee’s separation. See DeOcampo v. Dep’t of
the Army, 551 F. App’x 1000, 1003 (Fed. Cir. 2014) (“The Back Pay Act’s implementing
regulation defines the terms ‘pay, allowances, and differentials,’ and specifically
excludes monetary benefits ‘payable to separated or retired employees based upon a
separation from service, such as retirement benefits, severance payments, and lump-sum
payments for annual leave.’” (quoting 5 C.F.R. § 550.803 (2000)).
For separations occurring in the interim years critical to this litigation (1993–
1999), however, authority is sparse and either not definitive or not controlling in this
circuit on whether a violation of the lump-sum payment statute may also be cognizable
under the Back Pay Act in effect at that time. See, e.g., Am. Fed’n of Gov’t Employees,
AFL-CIO, 622 F. Supp. at 1115 (holding that the lump-sum payment for unused military
leave due upon a service member’s separation did not qualify as pay in the context of a
challenge to the constitutionality of a statute); Jacobs v. Morgan, No. C 00-2490 JL, 2001
WL 536559, at *2 (N.D. Cal. May 2, 2001) (denying plaintiff’s claim for BPA interest on
the delayed payment of a lump sum, reasoning that the “lump sum payment was entirely
for accrued but unused annual leave, not for back pay”). Accordingly, this court turns to
analyze liability under the Back Pay Act, element by element.
VI. BPA APPLICATION TO THIS CASE
The Back Pay Act permits interest on an amount payable to “[a]n employee of an
agency who . . . is found by appropriate authority . . . to have been affected by an
unjustified or unwarranted personnel action which had resulted in the withdrawal or
reduction of all or part of the pay, allowances, or differentials of the employee.” 5 U.S.C.
§ 5596(b)(1)(A), (2)(A) (emphasis added).
15
A. “Employee”
For the reasons set forth in Athey II, 108 Fed. Cl. 620–22, and in section III.D,
supra, plaintiffs’ claims for miscalculation of their lump-sum payments for annual leave
were payable upon separation and based on rights that accrued and vested before they
separated from federal service. Therefore, plaintiffs meet the definition of “employee”
for purposes of the Back Pay Act.
B. “Appropriate Authority”
Before plaintiffs may recover under the Back Pay Act, an “appropriate authority”
must make a predicate determination that plaintiffs suffered an unjustified and
unwarranted personnel action. 5 U.S.C. § 5596(b)(1). In the Back Pay Act’s early years,
the Civil Service Commission interpreted an “appropriate authority” to include “a court
having jurisdiction” as well as other entities. Pay Administration (General), 42 Fed. Reg.
16,127, 16,128 (Mar. 25, 1977), as amended by 44 Fed. Reg. 48,954 (Aug. 21, 1979)
(codified at 5 C.F.R. § 550.803). Then in 1981, OPM revised its back pay regulations to
implement back pay amendments of the then-newly passed Civil Service Reform Act of
1978 (CSRA), Pub. L. No. 95-454, 92 Stat. 1111. See Pay Administration (General);
Back Pay Regulations, 46 Fed. Reg. 58271-02 (Dec. 1, 1981). In relevant part, OPM
modified the definition of “appropriate authority” to mean “an entity having authority in
the case at hand to correct or direct the correction of an unjustified or unwarranted
personnel action, including . . . a court.” Id. at 58275 (amending 5 C.F.R. § 550.803); see
Gavette v. Office of Pers. Mgmt., 808 F.2d 1456, 1469 (Fed. Cir. 1986) (discussing
same).
Shortly thereafter, “[t]he Supreme Court held in United States v. Fausto, 484 U.S.
439, 454 (1988), that the enactment of the CSRA operated to deprive a Tucker Act court
of jurisdiction it would otherwise have over certain actions.” Worthington v. United
States, 168 F.3d 24, 26 (Fed. Cir. 1999). But the Court of Federal Claims retains
jurisdiction to consider claims not covered by the CSRA. Id. Thus, whether this court is
an “appropriate authority” in any particular case depends on whether the alleged
personnel action at issue is one over which the CSRA has deprived this court of
jurisdiction in favor of administrative review channels. See id. at 26–27; see also Salinas
v. United States, 323 F.3d 1047, 1049 (Fed. Cir. 2003); Abramson v. United States, 42
Fed. Cl. 326, 332 (1998). The CSRA encompasses three general types of personnel
actions: (i) removals or reductions in grade for “unacceptable job performance,” Fausto,
484 U.S. at 445–46 (citing 5 U.S.C. § 4303(b)(1)); (ii) “prohibited personnel practices,
including unlawful discrimination, coercion of political activity, nepotism, and reprisal
against so-called whistleblowers,” id. at 446 (citing 5 U.S.C. § 2302); and (iii) adverse
personnel actions taken against employees for the “efficiency of the service,” i.e., for
misconduct, such as suspensions, furlough, reductions in grade or pay, or removal, id. at
446–47 (citing 5 U.S.C. §§ 7501–04, 7511–14); accord Bosco v. United States, 931 F.2d
879, 883 (Fed. Cir. 1991); King v. United States, 81 Fed. Cl. 766, 770–72 (2008).
16
In Salinas v. United States, the Federal Circuit considered “whether the Court of
Federal Claims correctly dismissed for lack of jurisdiction a government employee’s suit
seeking back pay for the period during which he had been suspended following his
indictment in a state court.” 323 F.3d at 1047. It found that plaintiff’s suspension was
covered by Chapter 75 of the CSRA. Id. at 1049. Therefore, plaintiff should have tried
to bring his first appeal to the Merit Systems Protection Board and then to the Federal
Circuit, not to the Court of Federal Claims. See id. In other cases, however, the Court of
Federal Claims and the Federal Circuit have recognized certain BPA claims in which the
court is an “appropriate authority.” See Worthington, 168 F.3d at 26–27 (holding court
was empowered to hear BPA claim arising from procedurally improper reassignment to
compressed work schedule); Alaniz v. OPM, 728 F.2d 1460, 1470 (Fed. Cir. 1984)
(holding employees subjected to reduction in COLA rates as a result of OPM’s improper
COLA methodology were entitled to recover under the BPA and remanding for a
damages computation); Dustin v. United States, 113 Fed. Cl. 366, 370 (2013) (finding
court was an appropriate authority to review agency’s failure to continue making
plaintiff’s student loan payments); Abramson, 42 Fed. Cl. at 332 (finding court could
review plaintiffs’ back overtime pay claim arising from allegation that agency’s use of
compensatory time off in lieu of overtime pay was improper under the Kiess Act).
Here, a dispute arising from the alleged procedural failure to issue supplemental
lump-sum payments for annual leave is outside any of the CSRA-covered actions.
Accordingly, this court is an “appropriate authority” under the BPA to consider plaintiffs’
BPA claim.
C. “Unjustified or Unwarranted Personnel Action”
As an “appropriate authority” in this case, the court turns to decide whether the
government’s failure to properly calculate lump-sum payments for annual leave qualifies
as an “unjustified or unwarranted personnel action” within the meaning of the Back Pay
Act. See 5 U.S.C. § 5596(b)(1). Since 1978, the Back Pay Act has defined a “personnel
action” to “include[] the omission or failure to take an action or confer a benefit.” See
Civil Service Reform Act of 1978, Pub. L. 95-454, § 702, 92 Stat. 1111, amended in
relevant part by Appropriations Act of 1987, Pub. L. No. 100-202, § 101(m) [Title VI, §
623(a)(1)], 101 Stat. 1329, amended in relevant part by Strom Thurmond Nat’l Def.
Auth. Act For FY 1999, Pub. L. No. 105-261, § 1104(a)(1), 112 Stat. 1920 (Oct. 17,
1998) (codified as amended at 5 U.S.C. § 5596(b)(5)). In turn, OPM has elaborated that
an “‘unjustified or unwarranted personnel action’ means an act of commission or an act
of omission (i.e., failure to take an action or confer a benefit) that an appropriate authority
subsequently determines, on the basis of substantive or procedural defects, to have been
unjustified or unwarranted under applicable law, . . . rule, [or] regulation.” Pay
Administration (General); Back Pay Regulations, 46 Fed. Reg. 58,271-02, 58,275–76
(Dec. 1, 1981) (codified at 5 C.F.R § 550.803). “Such actions include personnel actions
and pay actions (alone or in combination).” Id. at 58,276.
17
As the Supreme Court has explained, the BPA “was intended to grant a monetary
cause of action only to those who were subjected to a reduction in their duly appointed
emoluments or position.” United States v. Testan, 424 U.S. 392, 407 (1976). Adverse
actions commonly within the BPA involve employee hiring, promotion, demotion,
resignation, and termination. Abramson, 42 Fed. Cl. at 332 (citing Testan, 424 U.S. at
405–06). But the Federal Circuit has recognized that an “unjustified or unwarranted
personnel action” also encompasses procedural errors and failures to pay. In Romero v.
United States, the Federal Circuit held that plaintiffs were entitled to recover under the
BPA for the government’s unlawful withholding of funds for income tax purposes
pursuant to an invalid withholding agreement between the United States and the
Commonwealth of Puerto Rico. 38 F.3d 1204, 1210–12 (Fed. Cir. 1994). Similarly, in
Alaniz v. Office of Personnel Management, the Federal Circuit held that plaintiffs were
entitled to recover under the BPA for OPM’s invalid reduction in their COLAs because
OPM failed to follow the notice and comment procedures of the Administrative
Procedure Act in setting new rates. 728 F.2d at 1462, 1467–70; accord Crimaldi v.
United States, 651 F.2d 151, 153–54 (2d Cir. 1981) (noting “that ‘unwarranted personnel
action’ may result from errors of procedure, not simply those of substance,” but finding
the procedural error at issue was harmless and therefore no back pay was due).
Consistent with Federal Circuit precedent, this court has also recognized
procedural errors and failures to pay to be an “unjustified or unwarranted personnel
action.” In Adde v. United States, for example, this court concluded that a nurse posted
to an international health organization by the National Institutes of Health (NIH) was the
victim of an “unjustified personnel action” under the BPA where NIH had failed to pay
the nurse her retroactive foreign post allowances for over three years. 98 Fed. Cl. 517,
522 (2011). The court rejected defendant’s argument that the nurse was not the victim of
an adverse action but “merely the victim of delayed payment, because the government
eventually conceded its liability and agreed to pay . . . her retroactive pay allowances.”
Id. at 522. It was also irrelevant, the court found, that the government’s delay might be
attributed to a “‘number of complicating issues,’ the ‘difficult legal issue’ of retroactive
pay, ‘unique circumstances,’ and ‘an administrative nightmare.’” Id. “[T]he fact
remain[ed] that [the nurse] did not obtain post allowances required by statute until well
after she had commenced litigation and the government had denied her right to such post
allowances in its pleadings before this court.” Id.; cf. Dustin, 113 Fed. Cl. at 370 (finding
that the VA’s failure to resume repayment of plaintiff’s student loans was an “unjustified
or unwarranted personnel action”); Crowley v. United States, 57 Fed. Cl. 376, 380–82
(2003) (holding a federal investigator who established entitlement to premium locality
pay under the Federal Law Enforcement Pay Reform Act (FLEPRA) was also entitled to
BPA interest because denial of premium pay constituted an adverse action resulting in
lost pay), aff’d in part & rev’d in part on other grounds, 398 F.3d 1329 (Fed. Cir. 2005)
(holding the Court of Federal Claims had jurisdiction to determine FLERPA eligibility
but erred in holding plaintiff qualified, and further noting that the appellate court need not
reach whether BPA interest was available, as the issue had become moot); Abramson, 42
18
Fed. Cl. at 332–33 (holding that plaintiffs who received compensatory time instead of
overtime pay pursuant to an invalid regulation had effectively had their pay withheld, and
thus were victims of an “unjustified or unwarranted personnel action”).
Here, agency failure to include COLAs and locality pay adjustments in the lump
sum calculus falls within the broad definition of an “unjustified or unwarranted personnel
action” because it too reflects a procedural error and failure to pay. Moreover, to the
extent an argument might exist that the failure to include COLAs and locality pay
adjustments that took effect after an employee’s separation is akin to a failure to promote
not covered by the BPA, it is to no avail. The upward adjustments alleged in this case
were mandatory and thus would still qualify as the kind of error encompassed by the
BPA. As the District of Columbia Circuit has explained, the BPA was amended in 1978
to cover just those unlawful failures to promote involving upgrades that were mandatory.
See Brown v. Sec’y of Army, 918 F.2d 214, 219–21 (D.C. Cir. 1990). Only in those
limited circumstances “[would] the employee be treated as one already ‘duly appointed’
to the higher position, [such] that the failure to confer the benefit [would] constitute[] a
‘withdrawal or reduction’ in compensation.” Id. at 220. If the upgrade was not of the
virtually automatic kind, then no relief would be available under the BPA. Id.
Defendant nevertheless contends that the failure to properly calculate lump sums
is not the kind of adverse action contemplated by the BPA. Def.’s Br. 19, ECF No. 98,
Kandel; Def.’s Br. 5, ECF No. 137, Kandel; Def.’s Br. 13–14, ECF No. 149, Kandel;
Def.’s Br. 4–5, ECF No. 163 at 4–5, Kandel. Defendant relies on three cases. In Bell v.
United States, 23 Cl. Ct. 73, 77 (1991), plaintiffs who were involuntarily separated did
not challenge their separation but did challenge the agency’s refusal to pay severance in
accordance with the Severance Pay Act, 5 U.S.C. § 5595. The court held that plaintiffs
stated a claim under the Severance Pay Act but not under the Back Pay Act, because the
court was “not called upon to correct an adverse personnel action” and “no relief in the
nature of an injunction or declaratory relief [was] sought.” Id. Rather, “[p]laintiffs’
claims [were] analogous to ones for unpaid salary for time actually worked.” Id. The
Claims Court reasoned that the “[m]ere failure by a government agency to pay money
due is not the kind of adverse personnel action contemplated in the Back Pay Act.” Id.
So, too, in Gilbert v. Federal Deposit Ins. Corp., the district court held that the erroneous
denial of plaintiff’s severance pay did not, in and of itself, constitute an adverse perssonel
action under the BPA. 950 F. Supp. 1194, 1198–99 (D.D.C. 1997) (discussing Bell).
Lastly, in Garcia v. United States, the district court denied BPA relief to individuals who
sought to correct allege errors involving their Thrift Savings Plan contributions, holding
that the BPA was “inapplicable where . . . an employee’s claim is merely that the
government owes her money.” 996 F. Supp. 39, 40–43 (D.D.C. 1998) (citing Bell, 23 Cl.
Ct. at 73).
19
Defendant has made similar arguments in two earlier cases before the court, and in
both instances the arguments were rejected. See Adde, 98 Fed. Cl. at 522; Abramson, 42
Fed. Cl. at 331–32. As the court in Adde and in Abramson noted, defendant’s reliance on
Bell is misplaced because Bell’s primary focus was whether this court was an
“appropriate authority” not whether an “unjustified or unwarranted personnel action”
occurred. See Bell, 23 Cl. Ct. at 77. Moreover, to the extent Bell drew any conclusions
with respect to the definition of an “unjustified or unwarranted personnel action,” those
conclusions were summary and no authority is cited. See id. In contradistinction,
“[t]here is binding precedent showing that a variety of pay claims may be brought in this
court under the BPA because these claims implicate personnel actions addressed by the
statute.” Adde, 98 Fed. Cl. at 522 (citing Hall v. United States, 617 F.3d 1313, 1318
(Fed. Cir. 2010) (reversing a decision of this court dismissing a claim for “forfeited pre-
removal pay” brought under the BPA); Worthington, 168 F.3d at 25–27 (reversing a
decision of this court dismissing a claim for “compressed work schedule” back pay
brought under the BPA)).
Accordingly, the court is persuaded that the government’s failure to properly
calculate lump-sum payments for annual leave qualifies as an “unjustified or unwarranted
personnel action” within the meaning of the Back Pay.
D. “Pay, Allowances, or Differentials”
Even if plaintiffs qualify as “employee[s]” who suffered an “unjustified or
unwarranted personnel action,” they can only recover under the Back Pay Act if they also
establish that the result was a “withdrawal or reduction of all or part of [their] pay,
allowances, or differentials.” 5 U.S.C. § 5596(b)(1). There can be no dispute that
various forms of “pay,” “allowances,” “differentials,” and other “adjustments” are factors
in the calculation of an individual’s lump-sum payment for annual leave due upon
separation. See 5 U.S.C. § 5551(a) (providing the lump sum “shall equal the pay
(excluding any differential under section 5925 [based on conditions of the environment]
and any allowance under section 5928 [danger pay allowance]) the employee or
individual would have received had he remained in the service until expiration of the
[leave] period”); 5 C.F.R. § 550.1205(b) (listing the “types of pay and pay adjustments”
to be included in calculating the lump sum, such as COLAs, locality pay adjustments,
night differentials, supervisory differentials, and foreign post allowances). But there is
substantial dispute about whether the lump-sum payment itself qualifies as “pay,
allowances, or differentials” for purposes of the Back Pay Act.
The Federal Circuit has plainly held that lump-sum payments for annual leave do
not qualify as “pay, allowances, or differentials” for purposes of the Back Pay Act based
on OPM revisions to the BPA regulations that took effect in 2000. DeOcampo, 551 F.
App’x at 1003 (explaining that the BPA’s regulations amended in 2000 specifically
exclude from “pay, allowances, or differentials” all monetary benefits “payable to
separated or retired employees based upon a separation from service, such as retirement
20
benefits, severance payments, and lump-sum payments for annual leave.” (quoting 5
C.F.R. § 550.803)); cf. Miscellaneous Changes in Compensation Regulations, 64 Fed.
Reg. 69,165-01, 69,178 (Dec. 10, 1999) (amending 5 C.F.R. § 550.803).
However, the Federal Circuit has not directly considered whether the lump-sum
payment for annual leave qualified as “pay, allowances, or differentials” before those
explicit 2000 amendments took effect. The subject has come before the court only
indirectly in one case. In American Federation of Government Employees, AFL-CIO v.
United States, the district court considered “whether the lump-sum payment for military
leave,” payable under 37 U.S.C. § 501(b)(1), “constitute[d] deferred compensation, or
[was] an ancillary fringe benefit afforded persons employed by the military.” 622 F.
Supp. at 1115. Given the similarities between Section 501(b)(1) and the civilian
equivalent at 5 U.S.C. § 5551(a), the court compared the two statutes and concluded that
they both authorized “a benefit, and not deferred compensation, to government and
military employees.” Id. First, Congress explicitly stated that the lump-sum payment is
“pay for taxation purposes only,” 5 U.S.C. § 5551(a), much like unused military leave “is
not considered as service for any purpose,” 37 U.S.C. § 501(c). Id. Second, “these
statutes provide that the lump-sum amount may be paid only upon separation or
discharge” and, in that sense, both statutes are unlike salary. See id. (citing 5 U.S.C.
§ 5551(a); 37 U.S.C. § 501(b)(1)). Third, “[b]oth statutes provide limitations, 37 U.S.C.
§ 501(b)(3) (payment for no more than sixty days); 5 U.S.C. § 5551(a) (period of leave
not extended due to post-separation holiday),” and salary is not generally subject to such
limitations or potential for reduction. See id.
Likewise, the Court of Claims has had occasion to comment on lump-sum liability
in the process of determining that a plaintiff was not entitled to recover under the BPA
for lost opportunities to purchase life and disability insurance because these were not
“allowance[s]” to which he was entitled while an employee. Polos v. United States, 231
Ct. Cl. 929, 931 (Ct. Cl. 1982). In reaching this decision, the court reasoned that lost
opportunities for insurance benefits “fall[] within the general category of claims for the
monetary equivalent of annual leave, or for per diem expenses, or for interest, which have
been denied in other cases as not being lost ‘pay, allowances, or differentials’ the
employee would have earned, but for the wrongful personnel action.” Id. (emphasis
added).
Under OPM’s 1981 regulations, which governed during the class periods here at
issue (1993–1999), “pay, allowances, or differentials” were broadly defined as “monetary
and employment benefits to which an employee is entitled by statute or regulation by
virtue of the performance of a Federal function.” Pay Administration (General); Back
Pay Regulations, 46 Fed. Reg. 58,271-02, 58,275 (Dec. 1, 1981). In comments
accompanying those regulations, OPM expressly excluded retirement benefits, but made
no mention of lump-sum payments (either including them or excluding them from “pay,
allowances, or differentials”). See id. at 58,272.
21
Athey II construed this silence and potential ambiguity in favor of including lump-
sum payments within the BPA, 108 Fed. Cl. at 620, but on further reflection, the court
finds the better interpretation excludes lump sums from coverage under the BPA. Under
well-established principles of sovereign immunity, waivers of sovereign immunity cannot
be implied, and ambiguities must be construed in favor of the United States. See supra
Part V.A (citing, e.g., Lane, 518 U.S. at 192; Williams, 514 U.S. at 531; Shaw, 478 U.S.
at 318). Moreover, just as the lump sum does not qualify as “pay” under the BPA
because a more specific definition in the lump-sum payment statute controls, see supra
Part III.C, so too more specific definitions of “allowances” and “differentials” control
over the BPA’s more general definition.
The United States Code is replete with examples of authorized “allowances” and
“differentials” payable to federal civilian employees in chapters 57 and 59 of title 5, but
nowhere among these provisions is the lump-sum payment for annual leave defined to be,
or included as, an “allowance” or “differential.” Moreover, cost-of-living increases and
locality pay increases, which plaintiffs seek to include in their supplemental lump sums,
are themselves defined by statute to be “adjustments” and “comparability payments,”
respectively, not “allowances” or “differentials.” See 5 U.S.C. §§ 5303, 5304; accord 5
C.F.R. § 550.1205(b)(2) (describing cost-of-living and locality pay increases to be
included in the lump sums as “adjustments”). Moreover, by their very nature, all of these
“allowances,” “differentials,” and “adjustments” are premiums that in practice are tacked
on to increase an employee’s “rate of basic pay.” In contrast, the lump-sum payment is a
separate, distinct, and different kind of benefit.
Furthermore, the Back Pay Act itself distinguishes annual leave and the lump-sum
payment for annual leave from “pay, allowances, and differentials.” The back payment
of “pay, allowances, and differentials” is dealt with in 5 U.S.C. § 5596(b)(1)(A)(i), which
authorizes a monetary payment in “an amount equal to all or any part of the pay,
allowances, or differentials as applicable which the employee normally would have
earned or received during the period if the personnel action had not occurred.” And it is
payments due under this paragraph (b)(1)(A)(i), that “shall be payable with interest.” Id.
§ 5596(b)(2)(A). In contrast, annual leave lost as a result of an adverse personnel action
is addressed in a separate paragraph at 5 U.S.C. § 5596(b)(1)(B), which authorizes a re-
crediting or restoration of that leave to an employee’s leave account following correction
of the adverse personnel action if the individual is still employed, or a lump-sum payment
for annual leave pursuant to the lump-sum payment statute if and when they separate
from federal civilian service. No interest is authorized on payments of the lump sum.
Accordingly, the court cannot conclude that the lump-sum payment falls within
the BPA’s definition of “pay, allowances, or differentials.” Furthermore, since plaintiffs
fail to meet one of the essential criteria for relief under the Back Pay Act, their claim for
interest under the BPA must fail.
22
VII. NEITHER EQUITY, NOR INTEREST BY ANOTHER NAME, PROVIDE
ANOTHER BASIS FOR RELIEF
Plaintiffs contend that “[p]rejudgment interest is an extremely important aspect of
this case which actually was first filed in 1999 and has been pending for 14 years since
the filing of the Archuleta complaint,” a predecessor case.6 Pls.’ Br. 10, ECF No. 198-1,
Athey; see Archuleta v. United States, No. 99-205C. It might seem inequitable that BPA
interest is not available. But, “[e]very violation of a statute . . . does not give rise to a
claim in this court.” Ainslie v. United States, 55 Fed. Cl. 103, 108 (2003) (citing Testan,
424 U.S. at 401; Anderson v. Wilson, 289 U.S. 20, 27 (1933) (Cardozo, J.) (“We do not
pause to consider whether a statute differently conceived and framed would yield results
more consonant with fairness and reason. We take the statute as we find it.”)), aff’d, 355
F.3d 1371 (Fed. Cir. 2004); accord Smith v. United States, 8 Cl. Ct. 69, 74 (1985), aff’d,
823 F.2d 532 (Fed. Cir. 1987).
Moreover, equity cannot factor into whether plaintiffs can recover under the Back
Pay Act or elsewhere. “In Shaw, the Supreme Court held that Congress must expressly
waive the Government’s sovereign immunity from suits for interest payments before
claimants can recover interest or delay damages.” Doyle, 931 F.2d at 1550 (citing 478
U.S. at 319); see supra Part V.A (discussing Shaw). “[P]olicy, no matter how
compelling, is insufficient, standing alone, to waive immunity” for interest. Shaw, 478
U.S. at 320–21. Courts lack the power to award interest against the United States on the
basis of what they think is or is not sound policy.” Id. (quoting N.Y. Rayon, 329 U.S. at
663).
Furthermore, to the extent plaintiffs seek “delay” damages as opposed to interest,
Shaw also bars recovery. Doyle, 931 F.2d at 1550. “In Shaw, the Supreme Court drew
no distinction between interest and delay damages:
6
Plaintiffs also filed a notice alerting the court to a then-recent decision of the
Federal Circuit that plaintiffs have alleged “re-affirm[s] the primacy of an award of
prejudgment interest ‘because it is necessary to make [plaintiffs’] compensation
complete.’” Pls.’ Br., ECF. No. 194, Athey (quoting Gaylord v. United States, 678 F.3d
1339, 1345 (Fed. Cir. 2012). Gaylord awarded interest in a copyright infringement action
based on 28 U.S.C. § 1498(b), which waives the United States’ sovereign immunity for
copyright infringement including “reasonable and entire compensation as damages for
such infringement.” 678 F.3d at 1342, 1345. Plaintiffs’ reliance on this case is
misplaced. Neither Athey nor Kandel involve copyright infringement. Thus, 28 U.S.C.
§ 1498(b), as well as the scope of the phrase “reasonable and entire compensation”
contained in that statute, are inapposite to this case.
23
But the force of the no-interest rule cannot be avoided simply by devising a
new name for an old institution:
[T]he character or nature of ‘interest’ cannot be changed by calling it
‘damages,’ ‘loss,’ ‘earned increment,’ ‘just compensation,’ ‘discount,’
‘offset,’ or ‘penalty,’ or any other term because it is still interest and the no-
interest rule applies to it.
...
Interest and a delay factor share an identical function. They are designed to
compensate for the belated receipt of money. The no-interest rule has been
applied to prevent parties from holding the United States liable on claims
grounded on the belated receipt of funds, even when characterized as
compensation for delay.
Doyle, 931 F.2d at 1550 (quoting Shaw, 478 U.S. at 321–22).
Plaintiffs, however, are not left without a remedy. They may recover the balances
on their underpaid lump sums pursuant to the lump-sum payment statute, just not interest
as an additional measure of damages.
VIII. CONCLUSION
Accordingly, plaintiffs are not entitled to recover interest under the Back Pay Act
for miscalculation of their lump-sum payments for annual leave. Plaintiffs’ motions for
summary judgment with respect to interest under the Back Pay Act are DENIED.
Defendant’s motions for summary judgment with respect to interest under the Back Pay
Act are GRANTED.
IT IS SO ORDERED.
s/ Patricia Campbell-Smith
PATRICIA CAMPBELL-SMITH
Chief Judge
24