COOPER v. OFFICE OF PERSONNEL MANAGEMENT

Filing 17

MEMORANDUM AND OPINION. Signed by Judge Amy Berman Jackson on 11/30/16. (ms)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
:
:
:
Plaintiff,
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v.
:
:
UNITED STATES OFFICE OF
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PERSONNEL MANAGEMENT,
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Defendant.
:
_________________________________________ :

JON C. COOPER,

Civil Action No. 15-2052 (ABJ)

MEMORANDUM OPINION
This matter is before the Court on Defendant’s Motion for Summary Judgment [Dkt. # 11]
and Plaintiff’s Motion to Amend Complaint [Dkt. # 14]. For the reasons discussed below, the
Court will grant the former and deny the latter.
BACKGROUND
Federal employees may participate in the Federal Employees’ Group Life Insurance
Program (“FEGLI”). See Mem. of Law in Supp. of Mot. for Summ. J. [Dkt. # 11-1] (“Def.’s
Mem.”) at 3. The government of the United States “is the policyholder under a policy of life
insurance issued by a commercial company” which administers claims under FEGLI through its
Office of Federal Employees’ Group Life Insurance. Id. at 4. An employee is automatically
eligible for and covered under FEGLI unless he affirmatively waives Basic coverage. Id. at 6,
citing 5 U.S.C. § 8701(a)–(b) and 5 C.F.R. § 870.301(a). An employee may elect to cancel
coverage at any time by submitting his request in writing. See id., citing 5 C.F.R. § 807.502(a).
Ordinarily, coverage ceases upon the employee’s separation from federal service. Id. However,

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coverage may be continued under certain circumstances, and relevant to this case is the following
provision:
In the case of any employee who retires on an immediate annuity
and has been insured under this chapter throughout —
(A) the 5 years of service immediately preceding the date of
the employee’s retirement, or
(B) the full period or periods of service during which the
employee was entitled to be insured, if fewer than 5 years,
life insurance, without accidental death and dismemberment
insurance, may be continued, under conditions determined by the
Office [of Personnel Management].
5 U.S.C. § 8706(b)(1) (emphasis added).
The Office of Personnel Management (“OPM”) illustrates the application of §
8706(b)(1)(B), known as the “all opportunity” requirement, with this example from the FEGLI
Handbook:
Amy waived all FEGLI when she was first employed in 1973. She
left Federal service in 2003 and returned to service in 2011. When
she returned to service, she was automatically enrolled in Basic
insurance her very first day. She retired 11/30/12. Amy did not
meet the 5-year requirement for continuing her FEGLI coverage
(she waived it back in 1973). Her “first opportunity” to enroll was
in 1973. Since she did not have the coverage for the full period of
service it was available to her, she also didn’t meet the allopportunity requirement. Therefore, Amy was not eligible to
continue any of her FEGLI coverage into retirement.
Def.’s Mem. at 7–8 (excerpt from FEGLI Handbook). Breaks in service are not considered. See
id. at 7.
Plaintiff was an employee of the Environmental Protection Agency from May 27, 1979 to
February 4, 1983, when he left the federal service. Administrative R., Ex. to Def.’s Mem. [Dkt. #
11-3] (“AR”) at OPM 056; Compl. [Dkt. # 1] at 2. He waived FEGLI coverage twice: on May 31,

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1979 and March 12, 1981. AR at OPM 004–005. When plaintiff joined the United States Coast
Guard as a civilian employee, he selected Basic FEGLI coverage effective May 21, 2011. AR at
OPM 003; see Compl. at 1. He retired on May 31, 2014. AR at OPM 056.
Plaintiff elected Basic FEGLI life insurance coverage “as part of his retirement package
from the . . . Coast Guard, but his application was denied by OPM.” Compl. at 1. On or about
September 8, 2015, plaintiff sought reconsideration of the initial decision, but the agency denied
his request again. Final Agency Decision dated October 8, 2015, Ex. to Compl (“Final Agency
Decision”).
OPM’s Final Agency Decision referred to 5 C.F.R. § 870.701(a), which provides:
When an insured employee retires, Basic life insurance . . . continues
or is reinstated if he/she:
(1) Is entitled to retire on an immediate annuity under a
retirement system for civilian employees, including the retirement
system of a nonappropriated fund instrumentality of the Department
of Defense or the Coast Guard;
(2) Was insured for the 5 years of service immediately before
the date the annuity starts, or for the full period(s) of service during
which he/she was eligible to be insured if less than 5 years; and
(3) Has not converted to an individual policy as described in
§ 870.603. If it is determined that an individual is eligible to
continue the group coverage as an annuitant after he/she has already
converted to an individual policy, the group enrollment may be
reinstated. If the individual wants the group coverage reinstated, the
conversion policy must be voided, the group policy must be
reinstated retroactively, and the premiums already paid on the
conversion policy must be refunded to the individual.
5 C.F.R. § 870.701(a)(1)–(3) (emphasis added). As OPM explained it, the agency accounted for
both plaintiff’s Coast Guard service and his prior service with the Environmental Protection
Agency when it considered whether he had satisfied the five-year requirement:

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Since in your case, your last period of service did not total five years
of creditable coverage, your prior service had to be used to
determine your eligibility to continue your coverage of life
insurance into retirement. But because you had waived your
coverage during that entire period of service, you did not meet the
five years requirement. The fact is you elected to waive the life
insurance at every opportunity you had until your employment in
May 2011. Therefore, you only had coverage for 3 years, 0 months
and 10 days.
Final Agency Decision at 2.
Plaintiff acknowledges that, because he had not been employed with the Coast Guard for a
full five-year period immediately preceding his retirement, he is not eligible to continue FEGLI
coverage under 5 U.S.C. § 8706(b)(1)(A). See Compl. at 1. He objects to “the look back period
of 30 years,” id. at 2, and asserts that, under 5 U.S.C. § 8706(b)(1)(B), he is entitled to continued
life insurance coverage because he was both eligible and elected coverage for the full period of
service as a Coast Guard employee. See id. at 1–2. Plaintiff demands that OPM provide life
insurance coverage “as part of his OPM retirement package.” Id. at 3.
ANALYSIS
I.

Plaintiff’s Motion to Amend Complaint
Generally, the Court “should grant leave to amend a complaint ‘[i]n the absence of any

apparent or declared reason – such as undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice
to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.”’
Atchinson v. District of Columbia, 73 F.3d 418, 425–26 (D.C. Cir. 1996), quoting Foman v. Davis,
371 U.S. 178, 182 (1962). Leave to amend a complaint under Rule 15(a) “shall be freely given
when justice so requires.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996), citing Fed.
R. Civ. P. 15(a). “Where amendment would be futile, however, the Court may in its discretion

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deny such a motion.” Anderson v. Fed. Bureau of Prisons, No. 10-0413, 2011 WL 346079, at *1
(D.D.C. Feb. 3, 2011). And an amendment is considered futile “if it would not survive a motion
to dismiss or for judgment on the pleadings.” Stith v. Chadbourne & Parke, LLP, 160 F. Supp. 2d
1, 6 (D.D.C. 2001).
A. Age Discrimination Claim
Plaintiff moves to amend his complaint “to add a [claim] that the action of the OPM violates
Federal Statutes against age discrimination in that it discriminates against senior citizens.” Mot.
to Am. Compl. [Dkt. # 14] (“Pl.’s Mot.”) at 1. He points to the FEGLI Handbook example
involving “Amy,” the fictional employee who did not qualify for life insurance coverage into
retirement because she waived coverage “at her first opportunity (which was approximately 39
years before her retirement date),” and concludes that ‘“Amy’ is a senior citizen.” Id. at 5.
According to plaintiff, “the major group impacted and damaged by [the all opportunity
requirement] is senior citizens.” Id. at 6. He opines that there exists “a large group of people who
worked for the Federal Government when they were young, then took another position outside of
government for many years . . . , and then returned to government service in their later years.” Id.
“By requiring a look back period,” encompassing the group members’ entire history of federal
service, “under the OPM interpretation, it is highly unlikely that this entire group of individuals
would qualify for insurance.” Id. In effect, plaintiff asserts, OPM’s interpretation “has the effect
of denying coverage to seniors at a time they most need it.” Id.
Plaintiff does not identify the federal statute or statutes on which his proposed age
discrimination claim relies. OPM presumes that plaintiff’s claim would be brought under the Age
Discrimination in Employment Act (“ADEA”), see 29 U.S.C. § 621 et seq., and argues that an
ADEA claim would be subject to dismissal. See Def.’s Opp. to Pl.’s Mot. for Leave to Am. Compl.

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[Dkt. # 15] (“Def.’s Opp.”) at 5. A claimant may not commence a civil action under the ADEA
unless he first filed a charge with the Equal Employment Opportunity Commission “within 180
days after the alleged unlawful practice occurred,” 29 U.S.C. § 626(d)(1)(A), and nothing in the
record of this case suggests that plaintiff ever filed a charge of age discrimination with the EEOC.
Thus, OPM argues, and the Court concurs, that “[p]laintiff failed to exhaust administrative
remedies.” Def.’s Opp. at 5–6. Therefore, the Court will deny plaintiff’s motion to amend the
complaint to add an age discrimination claim on the ground that the amendment would be futile.
B. APA Claim
Plaintiff also requests leave add two claims under the Administrative Procedure Act
(“APA”). See 5 U.S.C. § 701 et seq. First, he asserts that the term “all opportunity” does not
appear as “a term or concept in the controlling legislation,” and instead deems it “a regulatory
change that has no justification,” rendering it “arbitrary and capricious.” Pl.’s Mot. at 4. Second,
plaintiff contends that, absent any “record cited by the OPM in publishing the regulation and asking
for public comments,” OPM ran afoul of the APA’s notice and comment requirement. Id.
OPM notes that any challenge under the APA “must be brought within six years of when
the right of action accrued.” Def.’s Opp. at 1 n.1. “It is not clear when plaintiff is alleging his
challenge to OPM’s interpretation of the FEGLI statute accrued,” but since “OPM’s regulation
implementing the statutory five year rule has been in place since at least 1978,” OPM argues that
plaintiff’s challenge is untimely. Id. The Court agrees. “[E]very civil action commenced against
the United States shall be barred unless the complaint is filed within six years after the right of
action first accrues,” 28 U.S.C. § 2401(a), and this provision applies to a civil action brought under
the APA. See, e.g., Harris v. FAA, 353 F.3d 1006, 1009 (D.C. Cir. 2004). Section 2401(a) is a
waiver of the federal government’s sovereign immunity, such that plaintiff’s failure to mount a

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timely challenge to the implementation of the regulation at issue deprives the Court of subject
matter jurisdiction over the claim. See, e.g., Terry v. U.S. Small Bus. Admin., 699 F. Supp. 2d 49,
54 (D.D.C. 2010) (concluding that plaintiff's claims are barred under § 2401(a) and must be
dismissed for lack of subject matter jurisdiction).
II.

Defendant’s Motion for Summary Judgment
Since the Court will not grant plaintiff leave to file an amended complaint, it must consider

the dispositive motion filed in connection with his original complaint. In this action, plaintiff
challenges OPM’s Final Agency Decision and seeks judicial review under the APA, pursuant to
which the Court “shall . . . hold unlawful and set aside agency action, findings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). “This standard of review is highly deferential to the agency.” Bean
Dredging, LLC v. United States, 773 F. Supp. 2d 63, 73 (D.D.C. 2011). An agency’s decision may
be deemed arbitrary and capricious 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.
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
“In applying that standard, the focal point for judicial review should be the administrative record
already in existence,” Camp v. Pitts, 411 U.S. 138, 142 (1973), and the Court may not “substitute
its judgment for that of the agency.” Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402,
416 (1971).
There is no dispute as to the basic facts of this case. It is apparent that plaintiff was not
eligible and covered for a full five-year period prior to his retirement from the Coast Guard in

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2014, and instead was eligible and covered only for a period of three years and ten days. In
addition, the record shows that plaintiff had been eligible for and waived coverage for the entire
period of his prior federal service with the Environmental Protection Agency. According to OPM,
plaintiff does “not meet the statutory requirements of 5 U.S.C. § 8706(b)(1) or 5 C.F.R. §
870.701(a)(1-3) for continuing FEGLI Basic coverage as an annuitant” because “he was not
insured for FEGLI Basic coverage for all periods of service during which he was eligible to be
insured” due to his waiver of coverage in 1979 and 1981. Def.’s Mem. at 10. OPM argues that
“there was only one reasonable conclusion the agency could have reached,” such that it “is in no
way arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. at
11 (emphasis omitted).
Now that OPM has “clarified [its] position based on [its] manual,” Pl.’s Resp. to Def.
Office of Personnel Management Mot. for Summ. J. [Dkt. # 13] (“Pl.’s Opp.”) at 1, plaintiff argues
that “OPM . . . completely ignores that the full period of [Coast Guard] service . . . was sufficient
to meet the requirements of the statute.” Id. at 4. “A plain reading [of the all opportunity
requirement] is that[,] if a five year period is not satisfied, then a shorter period is justified as long
as the individual has been fully covered during the current employment period.” Id. (emphasis
omitted). In other words, the provision “does not provide for any look-back period.” Id.
But plaintiff’s interpretation of the all opportunity requirement is at odds with the test. The
statutory language authorizes OPM to consider “the full period or periods of service during which
the employee was entitled to be insured,” in circumstances where the employee had been employed
“fewer than 5 years” immediately preceding his retirement. 5 U.S.C. § 8706(b)(1)(B) (emphasis
added). Nothing in this language prevents OPM from considering a prior period of federal service
in order to determine whether the employee both had been eligible for and had been covered for a

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five-year period before retirement. In other words, the look back gives retirees who re-entered
federal service late in life the opportunity to point to previous service to obtain the insurance
benefit; it does not penalize employees with prior service.
Plaintiff’s period of service with the Coast Guard was three years and ten days, i.e., less
than five years immediately preceding his retirement. OPM therefore looked at plaintiff’s prior
federal service and found that plaintiff was entitled to FEGLI coverage, but he waived it. In short,
plaintiff had not been insured “throughout . . . the full period or periods of service during which
[he] was entitled to be insured,” 5 U.S.C. § 8706(b)(1)(B) (emphasis added), and therefore plaintiff
is not eligible to continue FEGLI coverage into retirement. See Schwartz v. U.S. Office of Pers.
Mgmt., No. 12-1567, 2013 WL 5428719, at *5 (D. Md. Sept. 25, 2013) (concluding that plaintiff
who waived life insurance coverage at the first opportunity in 1968, elected life insurance at 2007
when he came back into federal service, and retired three years later “did not meet the eligibility
requirements to continue ‘Basic life insurance’ into retirement”).
CONCLUSION
The Court will deny plaintiff’s motion to amend the complaint as futile because the
proposed new claims would be subject to dismissal. With respect to the original complaint, OPM
has demonstrated that there are no genuine issues of disputed facts, and that it is entitled to
judgment as a matter of law. Therefore, the Court will grant its motion for summary judgment.
A separate order will issue.

/s/
AMY BERMAN JACKSON
United States District Judge

DATE: November 30, 2016

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