PICUR v. KERRY

Filing 19

MEMORANDUM OPINION DENYING 10 Defendant's Motion for Summary Judgment, VACATING the FSGB's decision, and REMANDING matter for further consideration. See attached document for details. Signed by Judge Ketanji Brown Jackson on 09/11/2015. (lckbj1)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

)
GREGORY PICUR,
)
)
Plaintiff,
)
)
v.
)
)
JOHN KERRY, Secretary, United States )
Department of State,
)
)
Defendant.
)
)

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

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

1

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.

2

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

2

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.

3

The facts in this Memorandum Opinion are drawn from the Administrative Record, ECF No. 10-1
(“AR”), and are largely uncontested.

3

§ 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

4

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

4

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.”).

5

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

6

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
7

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.)

8

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

9

(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
10

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

11

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.;
see also Olsen, 990 F. Supp. at 36.
III.

ANALYSIS
As explained, the FSGB upheld the State Department’s annuity calculation

because the Board concluded that the agency had reasonably determined that Picur’s
actual “high three” salary amount was erroneously inflated at the time is was paid—i.e.,
that Picur had been overpaid prior to his retirement because the special differential
portion of his basic pay should have been (but was not) capped pursuant to the
Gambatesa memo—and had rationally adjusted his annuity calculation accordingly.
(See FSGB Decision, AR at 197–204; see also id. at 202 (“Grievant cannot now claim
that he is somehow entitled to receive an annuity based on compensation he was not
entitled to receive when he was employed as a criminal investigator.”).) In reaching
this conclusion, the FSGB focused on whether Picur’s salary should have been subject
to the biweekly pay cap per the Gambatesa memo as a matter of agency policy (see id.
at 203–204) and made no mention of a significant threshold concern: that even if the
State Department was correct that Picur previously received a higher basic pay amount
than he was entitled to, the agency may nevertheless lack the statutory authority to
adjust the high three salary variable downward when calculating an annuity payment.
This Court concludes that the FSGB’s failure to evaluate the extent of the agency’s
12

statutory authority rendered its ruling upholding the annuity calculation arbitrary and
capricious for the following two reasons.
First of all, it is clear beyond cavil that Executive Branch agencies must be
statutorily authorized to act. The State Department’s authorization with respect to
annuity calculations appears in section 4046 of Title 22 of the United States Code, and
nothing in that statutory section plainly permits the agency to make the kind of
adjustment to the annuity calculation that is at issue here—the operative provision
states only 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) (emphasis added). By its
plain terms, this provision clearly indicates that Congress intended for the State
Department to base the high three average on the annuitant’s actual basic salary as a
historical fact, rather than on what the agency believes (in retrospect) the annuitant
should have been paid, and indeed, the statute does not appear to confer to the agency
any discretion whatsoever with respect to adjusting the figures that are to be plugged
into the annuity variables. Moreover, this narrow reading of the agency’s annuity
authorization is consistent with other provisions of the annuity statute—it appears that
Congress has specified only one instance in which the agency can import hypothetical
figures regarding an prior annuitant’s salary, and that situation involves permitting the
agency to replace the actual salary the annuitant received with a sum certain, see, e.g.,
22 U.S.C. § 4046(a)(9) (providing that “[f]or purposes of . . . annuity computation . . .
the basic salary or basic pay” of a participant stationed overseas “shall be considered to

13

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”);
the agency is not thereby authorized to base the annuity calculation on its own
freestanding determination about unexecuted limitations on the participant’s prior
salary, much less to make a unilateral decision that resolves a dispute about whether the
participant was previously overpaid.
Second, while Defendant is surely correct that Congress must have intended for
the “high three” salary average upon which an annuity is based to be accurate (see Mot.
Hr’g Tr., July 7, 2015, at 23:16–24:5), this observation does not lead inexorably to the
conclusion that Congress intended for the annuity calculation to be the context in which
the State Department evaluates, and resolves, alleged errors regarding prior salary
payments. There are other well-established mechanisms for adjudicating and recouping
salary overpayments (see, e.g., id. at 45:12–19 (discussing DFAS collection
procedures)), and it is certainly conceivable that the statutory scheme requires the State
Department to use such mechanisms to address the purported overpayment of an
annuitant’s prior salary and to recalculate the annuity amount only if the basic salary
has been so adjusted (i.e., there is nothing in the annuity statute that prohibits the
agency from revisiting its initial annuity determination if a corrected basic salary
determination is made pursuant such other proceedings). Put another way, the statutory
scheme that Congress has adopted to govern annuity computations is quite specific
regarding how the State Department is supposed to calculate annuities, and while
certain other adjustments are addressed, the statute neither expressly nor implicitly
authorizes the agency to adjust the “ high three” variable downward if the agency

14

discovers a problem with the salary payments that were actually previously made,
which suggests that Congress may not have intended for overpayment problems to be
considered and addressed in the annuity calculation context. Cf. United States v.
Clarke, 628 F. Supp. 2d 1, 9 (D.D.C. 2009) (finding that, where Congress has
established by statute the process for determining the validity of citizenship, the court
was without authority to invalidate a naturalization order in the context of a criminal
proceeding), aff’d sub nom. United States v. Straker, --- F.3d. --- , 2015 WL 5099548
(D.C. Cir. Sept. 1, 2015).
Whatever the appropriate statutory analysis, the administrative record in this
case makes crystal clear that the FSGB failed to consult any of the statutory provisions
that specifically prescribe how an annuity is properly calculated in this context, and it
appears to have merely assumed that the State Department has the power to decide that
an annuitant’s actual high three salary average is too high for the purpose of an annuity
calculation. Consequently, this Court concludes that the Board failed to consider an
important aspect of the problem with which it was presented, and thus its decision was
arbitrary and capricious for the purpose of the APA. See, e.g., Olsen, 990 F. Supp. at
40 (granting summary judgment for plaintiff where the FSGB “did not properly
consider the legality of the [agency’s] policies”); see also Quantum Enterm’t, Ltd. v.
U.S. Dep’t of Interior, Bureau of Indian Affairs, 597 F. Supp. 2d 146, 153 (D.D.C.
2009) (holding that where an agency’s “decision [i]s incomplete, [it] violates the
prohibition against arbitrary or capricious agency decisions” (citation omitted)).
IV.

CONCLUSION
This Court finds that, when the FSGB upheld the annuity calculation at issue

here, it ignored the distinct possibility that, regardless of the Gambatesa memo and the
15

agency’s purported policy regarding the amount of basic pay that Picur should have
received during his last few years of employment, the State Department does not have
the statutory authority to import an unexecuted salary cap, or otherwise adjust a
participant’s high three salary average, when it undertakes to calculate a participant’s
annuity. Therefore, as set forth in the accompanying order, Defendant’s motion for
summary judgment will be DENIED; the FSGB’s decision will be VACATED; and this
matter will be REMANDED to the FSGB for further proceedings consistent with this
memorandum opinion.

DATE: September 11, 2015

Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge

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