Opinion

Picur v. Kerry

128 F. Supp. 3d 302
2015 U.S. Dist. LEXIS 121181
2015 WL 5325709

Court: District Court, District of Columbia
Filed: Sep 11, 2015
Status: Published
Author: Jackson
On the bench: Judge Ketanji Brown Jackson
Nature of suit: Civil
Cited by: 3 cases
Authority: More cited than 48.2%

The opinion

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

)

GREGORY PICUR, )

)

Plaintiff, )

)

v. ) Civil Action No. 14-cv-1492 (KBJ)

)

JOHN KERRY, Secretary, United States )

Department of State, )

)

Defendant. )

)

MEMORANDUM OPINION

Plaintiff Gregory Picur served as a Foreign Service criminal investigator for the

Office of Inspector General of the United States Agency for International Development

(“USAID OIG”) from the 1990s until his retirement in May of 2010. The dispute in the

instant case concerns the State Department’s calculation of Picur’s retirement annuity,

which Picur alleges is incorrect. (See Compl., ECF No. 1, ¶ 14.) 1 Generally speaking,

Picur contends that the State Department wrongly based its annuity calculation on what

the agency says Picur’s salary should have been at the time of his retirement, rather

than on the compensation that Picur actually received. (See id. ¶¶ 9–14.) Picur filed an

administrative grievance contesting the agency’s calculation of his retirement annuity,

but the State Department denied his grievance (see id. ¶ 4), and on appeal of that denial,

the Foreign Service Grievance Board (“FSGB”) upheld the agency’s calculation (see id.

¶¶ 5–8), finding that the State Department had determined Picur’s retirement annuity in

The United States Department of State administers the retirement payment system in which USAID

Foreign Service officers participate. See U.S.C. § 4041.

accordance with agency policies (see, e.g., id. ¶ 35). Picur has filed the instant action

against Secretary of State John Kerry (“Defendant” or “the Secretary”), asking this

Court to review and to set aside the FSGB’s conclusion as arbitrary, capricious, and not

in accordance with law under the Administrative Procedure Act (“APA”),

5 U.S.C. §§ 701–706 (2014). (See Compl. ¶¶ 2, 47–56.)

Before this Court at present is Defendant’s motion for summary judgment. (See

Def.’s Mot. for Summ. J. (“Def.’s Mot.”), ECF No. 10, at 7–8.) 2 Defendant argues that

the FSGB’s decision should be upheld because the Board examined the relevant

evidence and provided a satisfactory explanation for its conclusion. (See Def.’s Mem.

in Supp. of Def.’s Mot. (“Def.’s Br.”), ECF No. 10, at 22–27.) But this Court finds

that, when it affirmed the State Department’s annuity calculation, the FSGB did not

consider the crucial issue of whether or not the statutory scheme that governs

calculation of Picur’s annuity permits the agency to treat the annuity computation

process as an opportunity to correct purported prior salary overpayments. In other

words, it is clear to this Court that the FSGB ignored a key aspect of the problem that it

was deciding in a manner that rendered its decision to uphold the State Department’s

annuity calculation arbitrary and capricious in violation of the APA. Consequently,

Defendant’s motion for summary judgment must be DENIED, the FSGB’s decision

must be VACATED, and the matter must be REMANDED for further consideration.

A separate order consistent with this memorandum opinion will follow.

Page numbers throughout this memorandum opinion refer to those that the Court’s electronic filing

system assigns.

I. BACKGROUND 3

A. Facts

Picur began working as a criminal investigator for USAID OIG in 1994; he was

commissioned as a Foreign Service officer in 1998. (See Mem. from Melinda Chandler,

U.S. Dep’t of State to Mark S. Johnsen, Exec. Sec’y, FSGB (Jan. 9, 2014) (“Def.’s

Suppl. FSGB Mem.”), AR at 127.) Picur served as a Foreign Service criminal

investigator with USAID OIG until his retirement in May of 2010. (See id.; see also

Pl.’s Opp’n to Def.’s Mot. (“Pl.’s Opp’n”), ECF No. 12, at 6; Def.’s Br. at 11.)

Picur’s career with USAID OIG included postings overseas—for example, Picur

states that he was stationed in Egypt in 2006 and in Pakistan from 2009 through his

retirement in 2010. (See Ltr. from Nicholas Woodfield to Linda Taglialatela, Deputy

Assistant Sec’y for HR, U.S. Dep’t of State (Mar. 2, 2012 ) (“Pl.’s Grievance”), AR at

17–18; Ltr. from Nicholas Woodfield to Mark. S. Johnsen, Exec. Sec’y, FSGB (Jan. 23,

2014 ) (“Pl.’s FSGB Rebuttal”), AR at 161; see also Pl.’s Opp’n at 6 (“From

approximately 1995 to 2010, the USAID paid Picur a salary based on the Foreign

Service pay scale because he was stationed overseas for the majority of that time.”).)

During the last ten years of his employment, Picur received an annual salary that was

comprised of both his base pay amount—i.e., the set figure that corresponds to a

Foreign Service employee’s Class and Step within the Foreign Service’s salary system,

see 22 U.S.C. §§ 3963, 3966—and also an amount known as a “special differential,”

which is an additional payment that is provided to certain Foreign Service workers and

is calculated as a percentage of that worker’s base salary payment. See 22 U.S.C.

The facts in this Memorandum Opinion are drawn from the Administrative Record, ECF No. 10-1

(“AR”), and are largely uncontested.

§ 3972(a) (authorizing the agency to pay “special differentials, in addition to

compensation otherwise authorized, to Foreign Service officers who are required

because of the nature of their assignments to perform additional work on a regular basis

in substantial excess of normal requirements”).

When Picur retired in 2010, he was eligible to receive annuity payments as a

participant in the Foreign Service Retirement and Disability System (“FSRDS”). (See

Ltr. from Linda Taglialatela, Deputy Assistant Sec’y for HR, U.S. Dep’t of State, to

Nicholas Woodfield (May 10, 2013) (“Agency Grievance Decision”), AR at 39.)

Significantly for present purposes, retirement annuities for Foreign Service criminal

investigators are calculated in accordance with the statutory requirements of the

Foreign Service Act of 1980, as amended. See 28 U.S.C. §§ 4041–4069c-1. The

starting point for computing an annuity payment under this statute is section 4046(a)(1),

which provides that

[t]he annuity of a participant shall be equal to 2 percent of his or her

average basic salary for the highest 3 consecutive years of service

multiplied by the number of years, not exceeding 35, of service credit

obtained in accordance with sections 4056 and 4057 of this title[.]

22 U.S.C. § 4046(a)(1). The statute does not define “basic salary” as that term is used

in section 4046(a)(1); however, section 4046(a)(8) makes clear that a participant’s

“basic pay” for annuity calculation purposes includes the special differential pay that

Foreign Service officers are authorized to receive. Id. § 4046(a)(8). Moreover, section

4046(a)(9) provides that, when determining the average basic salary for the highest 3

consecutive years of service—commonly referred to as the participant’s “high three”

(see Compl. ¶ 13)—“the basic salary or basic pay of any member of the [Foreign]

Service whose official duty station is outside the continental United States shall be

considered to be the salary or pay that would have been paid to the member had the

member’s official duty station been Washington, D.C., including locality-based

comparability payments[.]” 28 U.S.C. § 4046(a)(9). 4

In August of 2010—a few months after his retirement—Picur received a letter

from the State Department providing him with a “‘final’ Annuity Calculation.” (E-mail

from Greg Picur to Amber Hanbury, HR Specialist, U.S. Dep’t of State (Sept. 9, 2010),

AR at 117.) According to Picur, “the ‘high three’ amount listed in th[at] calculation

[was] substantially less than” the amount that “USAID OIG Human Resources” had told

Picur to expect. (Id.) Picur began corresponding with officials at the State Department

and USAID OIG, inquiring about the details of his high three calculation and the

reasons for the unexpected discrepancy. (See, e.g., Email from Bonnie Brown, Retiree

Activities Coordinator, Am. Foreign Serv. Ass’n, to Richard A. Crisp, Supervisory HR

Specialist, U.S. Dep’t of State (Sept. 15, 2010), AR at 114–18.) In an e-mail dated

September 10, 2010, on which Picur was copied, a Deputy Director of Human

Resources at the State Department explained that the agency had calculated Picur’s high

three average based on the salary of a “GS-15 Step 10, which is Executive Schedule

Level IV, or $155,500” pursuant a pay cap that was established in a memorandum that

USAID Inspector General Donald A. Gambatesa issued in March of 2006. (Email from

Richard A. Crisp, Supervisory HR Specialist, U.S. Dep’t of State, to Joyce Douglas, HR

Specialist, USAID OIG (Sept. 10, 2010), AR at 114–15; see also Memorandum: Law

In its Foreign Affairs Manual (“FAM”), the State Department refers to this aspect of annuity

calculation as “virtual locality pay.” See 3 FAM 6181.2 (2012) (“Virtual locality pay means effective

December 29, 2002, [FSRDS] participants . . . who are assigned abroad will be credited the

Washington, DC basic pay rate, rather than the overseas basic pay rate for the purpose of retirement

annuity calculation.”).

Enforcement Availability Pay (LEAP) or USAID OIG Commissioned Foreign Serv.

Officer Criminal Investigators (Mar. 31, 2006) (“Gambatesa memo”), AR at 8–9.) The

Gambatesa memo, which is addressed to the USAID OIG assistant inspector general for

investigations, authorizes special differential pay for USAID OIG Foreign Service

criminal investigators. (See id. at 8 (explaining that OIG “will authorize payment of

special differential to Commissioned [Foreign Service] criminal investigators at the rate

of 18 percent base pay”).) Significantly for present purposes, the memo further states

that the “OIG’s Acting Legal Counsel . . . has made the determination that special

differential is subject to a bi-weekly pay cap under the Foreign Affairs Handbook which

is similar to the one provided to General Schedule employees” and “[t]herefore, along

with granting the increase in special differential, OIG will also implement a bi-weekly

pay cap for all [Foreign Service] officers.” (Id. at 9 (emphasis supplied).) The

Gambatesa memo also expressly adopts a grandfather clause, however; it states

specifically that “[e]mployees whose total compensation is above the cap will be

allowed to maintain their current total compensation[.]” (Id.)

The State Department acknowledges that Picur’s salary was not, in fact, capped

pursuant to the Gambatesa memo at the time that it was paid to him. (See Def.’s Suppl.

FSGB Mem., AR at 131.) Nevertheless, the agency insists that the Gambatesa memo’s

salary limitations should have applied to Picur and, thus, that his special differential

pay from 2006 forward should have been subjected to the biweekly cap such that his

overall salary would not have exceeded a GS-15 Step 10 salary level. (See id.) Thus,

for the purpose of calculating Picur’s annuity, the agency took the position that Picur

actually had received more special differential pay than he was entitled to during the

last few years before his retirement—which erroneously boosted his basic pay for those

years—and to avoid perpetuating this alleged overpayment error, the agency’s human

resources officers imported the purportedly applicable special differential pay cap from

the Gambatesa memo when Picur’s high three average salary was determined. (See

Email from Richard A. Crisp, Supervisory HR Specialist, U.S. Dep’t of State, to Joyce

Douglas, HR Specialist, USAID OIG (Sept. 10, 2010), AR at 114–15.)

B. Procedural History

Picur vehemently disagreed with the State Department’s contention that his

salary in the years prior to his retirement should have been capped, and he continued to

insist that his annuity had been miscalculated in regular correspondence that he

maintained with State Department and USAID OIG officials throughout 2010 and into

2011. (See, e.g., Email from Gregory Picur to Edward Capers, Jr., Deputy Dir., Dep’t

of State, Bureau of HR (July 21, 2011), AR at 112; see also AR at 111–18 (email

correspondence).) On July 29, 2011, Picur emailed Acting USAID Inspector General

Robert Ross to explain the problem with his annuity calculation and to request Ross’s

assistance in clearing up any confusion about Picur’s compensation during the last three

years of his employment. (See Email from Gregory Picur to Robert Ross, Assistant

Inspector Gen., Mgmt., USAID (July 29, 2011), AR at 50.) On November 21, 2011,

Ross sent a letter to the State Department on Picur’s behalf, attaching a detailed chart

of Picur’s actual salary payments and specifically asking the human resources officials

who calculate annuities for the State Department “to review the employee’s salary

history and include the [entire] special differential as part of his basic pay.” (Ltr. from

Robert Ross, Assistant Inspector Gen., USAID, to Edward Capers, Jr., Deputy Dir.,

Bureau of HR, U.S. Dep’t of State (Nov. 21, 2011), AR at 53.) However, the State

Department demurred—in a letter to Ross dated December 6, 2011, the agency

expressly “reaffirm[ed its] original calculation of Mr. Picur’s annuity[.]” (Ltr. from

John K. Naland, Dir., Office of Ret., U.S. Dep’t of State, to Robert Ross, Assistant

Inspector Gen., Mgmt., USAID, AR at 145.)

Picur then filed a formal grievance with the State Department regarding the

agency’s retirement annuity calculation, which Picur submitted on March 2, 2012. (See

Pl.’s Grievance, AR at 17–19). In his grievance, Picur contested the agency’s decision

to cap the special differential payments he had received (and thus limit his overall basic

pay amount) for purposes of calculating his annuity, arguing that the agency was

required to base its high three calculation on the amount of pay that Picur actually had

received, including the full amount of the special differential. (See id. at 17–18.) The

agency denied Picur’s grievance on May 10, 2013, issuing a five-page document that

was addressed to Picur’s counsel and signed by the Deputy Assistant Secretary for

Human Resources. (See Agency Grievance Decision at 39–43.) The document asserted

that the State Department had properly calculated Picur’s “high-3 average” based on

“Picur’s salary during his last four years of service, including special differential that

he received, but only up to the bi-weekly pay cap” announced in the Gambatesa memo.

(Id. at 41.) The agency further explained that it had determined that Picur did not

qualify for the “grandfather provision” in the Gambatesa memo because “[the]

grandfather provision [was] for only those employees whose total compensation was

above the cap at the time the decision [to impose a cap] was made in 2006[,]” and

“Picur’s pay, including special differential as of March 31, 2006, was not above the

2006 bi-weekly cap[.]” (Id. at 42.)

Picur appealed the State Department’s annuity calculation decision to the FSGB

in early July of 2013. (See Ltr. from Nicholas Woodfield to Chris Wittman, Exec.

Sec’y, FSGB (July 5, 2013) (“Pl.’s FSGB Appeal”), AR at 3–6.) Picur argued that the

agency had wrongly “relied on the Gambatesa memorandum to conclude that . . .

Picur’s total compensation, including his special differential pay, should be capped to

the level payable to a GS-15, step 10” for purposes of calculating his retirement annuity

(id. at 4), and asked the FSGB to “correct his retirement annuity and provide him

remedial back pay” (id. at 3). In support of his appeal, Picur argued, inter alia, that the

State Department had not offered any legal support for its determination that he should

have been subject to the bi-weekly pay cap under the Gambatesa memorandum in the

first place, emphasizing that no such caps were actually ever implemented with respect

to his pay. (See id. at 5 n.2; see also Ltr. from Nicholas Woodfield to Chris Wittman,

Exec. Sec’y, FSGB (Nov. 5, 2013) (“Pl.’s Suppl. to FSGB Appeal”), AR at 104–06.)

Picur also pointed out that the statute that governs the annuity calculation is silent

regarding the application of any limitations on basic pay for the purpose of the

calculation. (See Pl.’s FSGB Appeal, AR at 5.)

The FSGB denied Picur’s appeal on July 1, 2014. (See Picur v. Dep’t of State,

FSGB Case No. 2013-031 (July 1, 2014) (“FSGB Decision”), AR at 190–204.) In its

decision, the Board focused on the Gambatesa memo as an expression of agency policy

regarding limitations on special differential pay (see id. at 197–204) and concluded

that, because the agency had reasonably determined that the salary limitation adopted in

the Gambatesa memo should have applied to Picur—even though it was undisputed that

no caps were ever actually enforced with respect to Picur’s pay prior to his retirement

(see id. at 194, 195, 200)—the State Department had calculated Picur’s retirement

annuity reasonably and in accordance “with existing OIG policy, and compliant with the

Gambatesa memo[.]” (Id. at 203–04.)

Picur filed the instant action seeking judicial review of the FSGB’s decision on

August 29, 2014. (See Compl.) See also 22 U.S.C. § 4140 (providing for judicial

review of FSGB decisions in federal district court under the APA standard of review).

Picur’s one-count complaint alleges that the FSGB’s denial of his administrative appeal

was “arbitrary, capricious, and an abuse of discretion” under the APA because “[t]he

FSGB did not examine all relevant evidence, provide a satisfactory explanation for its

conclusions, or show a rational connection between the facts and the choices made[.]”

(Compl. ¶¶ 50, 51). Defendant filed the pending motion for summary judgment on

January 7, 2015, asserting that the agency is entitled to judgment as a matter of law

because the FSGB considered all relevant factual evidence (see Def.’s Mot. at 22–25)

and provided satisfactory explanations for its decision (see id. at 25–27). In response,

Picur maintains that Foreign Service officers are exempt from pay caps of the type that

the Gambatesa memo purportedly imposed (see Pl.’s Opp’n at 15–16), and that, in any

event, Picur qualified for the Gambatesa memo’s grandfather provision (see id. at 7).

This Court held a motion hearing on July 7, 2015, and took Defendant’s motion

for summary judgment under advisement.

II. LEGAL STANDARD

Summary judgment is the appropriate procedural mechanism for resolving

challenges to final agency actions under the Administrative Procedure Act. See Loma

Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52 (D.D.C. 2010) (citing

Stuttering Found. of Am. v. Springer, 498 F.Supp.2d 203, 207 (D.D.C.2007)), aff’d, 408

F. App’x. 383 (D.C. Cir. 2010); see also Richards v. INS, 554 F.2d 1173, 1177 & n. 28

(D.C. Cir. 1977). In most civil cases, courts grant summary judgment in a movant’s

favor “if the movant shows that there is no genuine dispute as to any material fact and

the movant is entitled to judgment as a matter of law[,]” Fed. R. Civ. P. 56(a); see also

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); however, “because of the

limited role of a court in reviewing [an] administrative record[,]” the typical Rule 56

summary judgment standards do not apply in an APA case. Stuttering Found. of Am.,

498 F. Supp. 2d at 207. Instead, unless a particular statute provides otherwise, courts

review final agency actions (including decisions of the FSGB) using the standard of

review set forth in section 706 of the APA, which requires courts to “hold unlawful and

set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law[.]” 5 U.S.C. § 706(2)(A);

see also 22 U.S.C. § 4140 (final FSGB decisions are subject to judicial review in

federal district court pursuant to section 706 of the APA); Olsen v. Albright, 990 F.

Supp. 31, 36 (D.D.C. 1997) (same).

The APA standard of review is narrow in the sense that a court may not

“substitute its judgment for that of the agency,” but the standard is also probing insofar

as a reviewing court must ensure that the agency “examine[d] the relevant data and

articulate[d] a satisfactory explanation for its action including a rational connection

between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (internal quotation marks and citation

omitted). This assessment includes determining “whether the [agency’s] decision was

based on a consideration of the relevant factors and whether there has been a clear error

of judgment.” Id. (internal quotation marks and citation omitted). Thus, an agency

action will be deemed arbitrary and capricious within the meaning of the APA if “the

agency has relied on factors which Congress has not intended it to consider, entirely

failed to consider an important aspect of the problem, offered an explanation for its

decision that runs counter to the evidence before the agency, or is so implausible that it

could not be ascribed to a difference in view or the product of agency expertise.” Id.;