Ralph E. Price v. Leon E. Panetta, Secretary of Defense, Department of Defense, and United States.

United States Court of Appeals
for the Federal Circuit
__________________________
RALPH E. PRICE,
Plaintiff-Appellant,
v.
LEON E. PANETTA, SECRETARY OF DEFENSE,
DEPARTMENT OF DEFENSE, AND UNITED
STATES.
Defendants-Appellees.
__________________________
2011-1437
__________________________
Appeal from the United States District Court for the
Eastern District of Virginia in Case No. 10-CV-0216,
Judge Jerome B. Friedman.
___________________________
Decided: March 16, 2012
___________________________
ROBERT J. BERG , Meiselman, Denlea, Packman, Car-
ton & Eberz, P.C., of White Plains, New York, argued for
plaintiff-appellant.
REGINALD T. BLADES , JR., Assistant Director, Com-
mercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
defendants-appellees. With him on the brief were TONY

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PRICE v. PANETTA 2
WEST, Assistant Attorney General, and JEANNE E.
D AVIDSON , Director.
__________________________
Before BRYSON , D YK , and O’MALLEY, Circuit Judges.
BRYSON , Circuit Judge.
The appellant, Ralph E. Price, was a civilian employee
of the Department of Defense. After retiring in 2007, he
served as a re-employed annuitant for a fixed two-year
term that expired on January 3, 2009. Like many other
Department of Defense employees, Mr. Price was subject
to the National Security Personnel System (“NSPS”),
under which employees were eligible for performance-
based incentives in the form of bonuses and salary in-
creases. The NSPS was created by statute in 2003. See
National Defense Authorization Act for Fiscal Year 2004,
Pub. L. No. 108-136 § 1101, 117 Stat. 1392, 1621-22
(2003). It remained in effect until 2009, when it was
repealed by the National Defense Authorization Act for
Fiscal Year 2010, Pub. L. No. 111-84, § 1113(b), 123 Stat.
2190, 2498 (2009).
During the fiscal year that ended on September 30,
2008, Mr. Price received a performance rating for the
“appraisal period” ending on that date that made him
eligible for NSPS benefits. Those benefits, referred to as
a “performance payout,” could take the form of a salary
increase, a bonus, or a combination of the two. Because
Mr. Price’s two-year term ended on January 3, 2009, he
was not eligible for a salary increase, because by regula-
tion the effective date of any performance payout in the
form of a salary increase was the first day of the first pay
period beginning on or after January 1 of each year,
which in 2009 was January 4. See 5 C.F.R.
§ 9901.342(g)(6).

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PRICE v. PANETTA 3
The dispute in this case turns on the effective date of
NSPS bonus payments. The Department of Defense took
the position that the effective date of a performance
payout in the form of a bonus was the same as the effec-
tive date of a performance payout in the form of a salary
increase, i.e., the first day of the first pay period begin-
ning on or after January 1 of the year following the em-
ployee’s appraisal period. Mr. Price argued that the
effective date of a performance payout in the form of a
bonus should be either the end of the appraisal period (in
this case, September 30, 2008) or the first day of the
following year (in this case, January 1, 2009). Because he
was employed by the Department of Defense on both of
those days, he contends that he was eligible for a bonus
because he was employed on the effective date of the
bonus payments.
When the Department of Defense denied Mr. Price’s
request to be paid a bonus for the appraisal period ending
on September 30, 2008, he filed an action in the United
States District Court for the Eastern District of Virginia
on behalf of himself and a class of similarly situated
former Department of Defense employees. Proceeding
under the Little Tucker Act, 28 U.S.C. § 1346, he argued
that the Department of Defense had unlawfully denied
bonus benefits to him and to all others who had completed
an appraisal period but had resigned, retired, or trans-
ferred out of the NSPS before the designated effective
date for an increase in salary, i.e., the first day of the first
pay period of the following year.
The district court held that it had jurisdiction over the
action under the Little Tucker Act. On the merits, how-
ever, the court sustained the Defense Department’s
determination that the effective date for the payout of
bonuses under the NSPS was the same as the effective

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PRICE v. PANETTA 4
date for increases in salary, i.e., the first day of the first
pay period of the year following the appraisal period,
January 4, 2009. Because Mr. Price was not employed on
that date, the court held that he was not entitled to
payment of a bonus for the appraisal period that ended on
September 30, 2008.
I
We are met at the outset by the government’s argu-
ment that the district court lacked jurisdiction over this
action. Like the district court, we reject that argument,
and for the same reasons.
The Little Tucker Act, 28 U.S.C. § 1346(a), allows a
plaintiff to bring an action in district court if the action is
based on a claim against the United States “not exceeding
$10,000 in amount, founded either upon the Constitution,
or any Act of Congress, or any regulation of an executive
department.” The Act both creates jurisdiction in the
district court and waives sovereign immunity for an
action falling within the jurisdictional grant. It does not,
however, create a cause of action; for that, the plaintiff
must look elsewhere. Fisher v. United States, 402 F.3d
1167, 1172 (Fed. Cir. 2005) (en banc in pertinent part).
As the Supreme Court has explained, the plaintiff must
“identify a substantive source of law that establishes
specific fiduciary or other duties, and allege that the
Government has failed faithfully to perform those duties,”
after which “the court must then determine whether the
relevant source of substantive law can fairly be inter-
preted as mandating compensation for damages sus-
tained” as a result of the breach. United States v. Navajo
Nation, 537 U.S. 488, 506 (2003), quoting United States v.
Mitchell, 463 U.S. 206, 217, 219 (1983); see also United
States v. White Mountain Apache Tribe, 537 U.S. 465, 472

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PRICE v. PANETTA 5
(2003). This court has characterized that requirement as
imposing on the Tucker Act plaintiff the burden of show-
ing that the source of substantive law is a “money-
mandating” provision, i.e., it must mandate “compensa-
tion for specific instances of past injuries or labors.” Nat’l
Ctr. for Mfg. Scis. v. United States, 114 F.3d 196, 201
(Fed. Cir. 1997).
A statutory or regulatory provision that grants a gov-
ernment official or agency substantial discretion to decide
whether to expend government funds in a particular way
is not considered money-mandating and does not create a
cause of action that can be prosecuted under the Little
Tucker Act. See Barnick v. United States, 591 F.3d 1372,
1378 (Fed. Cir. 2010). However, a statute or regulation
that provides for payment of money can qualify as money-
mandating if the plaintiff’s claim is that the statute or
regulation creates a right to payment upon a showing that
the plaintiff qualifies for that payment by satisfying
designated statutory or regulatory requirements. Fisher,
402 F.3d at 1174-75; see Jan’s Helicopter Serv., Inc. v.
FAA, 525 F.3d 1299, 1307-08 (Fed. Cir. 2008); In re
United States, 463 F.3d 1328, 1334-36 (Fed. Cir. 2006).
Moreover, “[t]he substantive source of law may grant the
claimant a right to recover damages either expressly or by
implication.” Navajo Nation, 537 U.S. at 506, quoting
Mitchell, 463 U.S. at 217 n.16. Once the plaintiff has
made such a showing, all the plaintiff is required to do in
order to establish jurisdiction under the Tucker Act or the
Little Tucker Act is to make a non-frivolous assertion that
he is “within the class of plaintiffs entitled to recover
under the money-mandating source”; the court then has
jurisdiction to determine whether the plaintiff is entitled
to relief on the merits. Jan’s Helicopter Serv., 525 F.3d at
1307.

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PRICE v. PANETTA 6
Complaints by civil service employees regarding per-
sonnel actions covered by the Civil Service Reform Act are
subject to the jurisdiction of the Merit Systems Protection
Board and do not give rise to actions under the Tucker
Act or the Little Tucker Act. See United States v. Fausto,
484 U.S. 439, 449, 455 (1988); Worthington v. United
States, 168 F.3d 24, 26-27 (Fed. Cir. 1999). However, a
statute or regulation requiring an agency to pay employ-
ees certain amounts under certain circumstances is
frequently money-mandating and sufficient to give rise to
an action under the Tucker Act or Little Tucker Act for
damages. See Hall v. United States, 617 F.3d 1313, 1317-
18 (Fed. Cir. 2010) (suit for compensation for days em-
ployee was engaged in jury service); Brodowy v. United
States, 482 F.3d 1370, 1375-76 (Fed. Cir. 2007) (statute
providing for additional pay for FAA employees transfer-
ring between certain positions within the agency is a
money-mandating statute); In re United States, 463 F.3d
at 1334 (statute fixing salary of bankruptcy judges is a
money-mandating statute); Bosco v. United States, 931
F.2d 879, 882 (Fed. Cir. 1991) (“prevailing rate” wage
statute is money-mandating).
As the district court noted, the statutory scheme at is-
sue in this case contemplated that bonuses would be paid
in amounts dictated by the ratings given to NSPS em-
ployees for the pertinent appraisal period. 5 U.S.C. §
9902(b)(7)(I) (Supp. II 2008) (directing the Defense De-
partment to promulgate regulations providing for a “pay-
for-performance evaluation system to better link individ-
ual pay to performance and provide an equitable method
for appraising and compensating employees”). Those
regulations created the NSPS pay system, which estab-
lished pay structures and pay administration rules that
replaced the standard civil service pay system for covered
employees. 5 C.F.R. § 9901.301(a). With respect to the

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PRICE v. PANETTA 7
performance pay provisions of the NSPS, the regulations
provided that NSPS employees would be rated after the
close of each fiscal year, and each employee would be
assigned a specific number of “shares” based on that
rating. Those shares would then be used to determine the
amount of the employee’s performance payout. 5 C.F.R. §
9901.342. The amount of the performance payout would
be calculated by starting with the number of shares each
employee was assigned and multiplying the value of each
share by the employee’s base salary. Id. § 9901.342(g)(2).
In Mr. Price’s case, the government does not dispute
the amount that he would have been entitled to under the
regulations if he had been employed on the effective date
of the bonus payments. According to Mr. Price, that
amount, calculated according to his rating during the
2008 appraisal period and reduced to a sum certain, was
$4,777. The issue in this case is not the amount of the
bonus, but whether he was entitled to any bonus at all,
which turns not on the exercise of discretion by a govern-
ment official, but on the date that is determined to be the
effective date of the bonus payments for the appraisal
period ending on September 30, 2008.
Mr. Price’s claim is thus to a fixed amount calculated
according to the regulatory formula, and his eligibility to
be paid that sum turns on an interpretation of the govern-
ing statute and regulations. If Mr. Price is correct that he
was employed on the effective date of the bonus pay-
ments, he would have an undisputed right to the payment
of a bonus in an amount certain. An action to enforce the
payment of that amount could properly be brought under
the Little Tucker Act, as the regulation in dispute would
be money-mandating as to an employee who is deter-
mined to be eligible for a bonus in a fixed amount. See
Doe v. United States, 463 F.3d 1314, 1324-25 (Fed. Cir.

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PRICE v. PANETTA 8
2006) (where statute dictates that “once the agency makes
a determination that a particular position is entitled to
[certain type of] pay, the employee ‘shall’ receive premium
pay under the statute,” such a statute “is money-
mandating because once a condition is met, namely that
the head of an agency states that a position meets the
[listed] criteria . . . , the statute requires payment to
employees with that position”); Fisher, 402 F.3d at 1174-
75 (statute is money-mandating because when the re-
quirements of the statute are met—i.e., when the Secre-
tary determines that a service member is unfit for duty
because of a physical disability, and that disability is
permanent and stable and is not the result of the mem-
ber's intentional misconduct or willful neglect—the mem-
ber is entitled to compensation”); Doe v. United States,
100 F.3d 1576, 1582 (Fed. Cir. 1996) (finding statute to be
money-mandating when it requires “the payment of some
award to claimants who have met the statutory conditions
for recovery,” despite the “fact that the [government]
retains some discretion to determine the amount of an
award, within prescribed limits”); see generally United
States v. Testan, 424 U.S. 392, 402 (1976) (noting author-
ity allowing a Tucker Act suit for relief by a plaintiff
arguing that his position carries a statutory entitlement
to a higher level of pay).
The government’s argument that this case does not
fall within the purview of the Little Tucker Act is based in
part on its contention that Mr. Price is wrong in interpret-
ing the pertinent regulations, and that under the proper
interpretation of the governing regulations he was re-
quired to be employed on January 4, 2009, in order to be
entitled to a bonus for the performance year ending on
September 30, 2008. The government asserts that be-
cause Mr. Price was “not entitled to a bonus payout,” the
NSPS regulations were “not money-mandating with

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PRICE v. PANETTA 9
respect to Mr. Price.” Gov. Br. 18. As the district court
pointed out in responding to the same argument, how-
ever, that argument conflates jurisdiction with the merits.
If Mr. Price is correct on the merits of his regulatory
argument, he was entitled to be paid the bonus, and the
district court would have jurisdiction to issue judgment in
his favor. If Mr. Price is wrong on the merits, he is not
entitled to be paid. But that is because he would lose his
case on the merits, not because the district court would
lack jurisdiction to adjudicate the dispute. See Doe, 463
F.3d at 1324 (“The jurisdictional requirement is met if a
statute or regulation is ‘money-mandating.’ . . . However,
a party bringing suit under the Tucker Act may then lose
on the merits if he or she is not one of the persons entitled
to pay under the statute or regulation.”); see also Bro-
dowy, 482 F.3d at 1375 (“Where plaintiffs have invoked a
money-mandating statute and have made a non-frivolous
assertion that they are entitled to relief under the statute,
we have held that the Court of Federal Claims has sub-
ject-matter jurisdiction over the case.”).
II
On the merits, Mr. Price argues that he was entitled
to be paid a performance bonus even though he was not
employed on January 4, 2009, the date that the agency
identified as the effective date for performance payouts
attributable to the 2008 appraisal period. We reject his
argument and hold that the Defense Department was
entitled to adhere to its consistent practice of designating
the first day of the first pay period of the year following
the appraisal period as the effective date for the bonus
component of the performance payout.
Under the pertinent NSPS regulations, a “perform-
ance payout” is defined to mean “the total monetary value

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PRICE v. PANETTA 10
of a performance pay increase and bonus” under the
performance-based pay system. 5 C.F.R. § 9901.304. The
regulations provide that employees who are no longer
covered by the NSPS “on the effective date of the payout .
. . are not entitled to a performance-based payout.” Id. §
9901.342(g)(7). The regulations further provide that the
effective date of the salary increase component of the
performance payout “will be the first day of the first pay
period beginning on or after January 1 of each year.” Id.
§ 9901.342(g)(6). Mr. Price points out that while the
“effective date” regulation expressly refers to the effective
date of the salary increase component of the performance
payout, it does not expressly refer to the effective date of
the bonus component of the performance payout. In fact,
no regulatory provision speaks expressly to that issue.
Mr. Price argues that the court should adopt the end
of the appraisal period as the effective date of the bonus
component of the performance payout. By that time, he
contends, the employee has “earned” the bonus by the
quality of his or her work. It is unfair, Mr. Price asserts,
to deprive an employee who “earned” a bonus during the
appraisal period from receiving that bonus simply be-
cause the employee left the agency several months later.
The question, however, is not what the court might
select as the most equitable date for a bonus to vest, but
rather whether the agency’s selection of the first day of
the first pay period in the following year is a permissible
choice. As noted, there is no statutory or regulatory
provision setting the particular date on which the right to
bonus payments vests. In the absence of an express
provision as to the effective date of bonus payments, the
agency has construed its regulations to make the effective
date for bonuses the same as the effective date for salary
increases.

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PRICE v. PANETTA 11
It is well settled that an agency’s interpretation of its
own regulations is entitled to deference unless that inter-
pretation is “plainly erroneous or inconsistent with the
regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997);
Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414
(1945). That principle applies whether the regulation in
question is ambiguous or simply silent on the issue in
question. See White v. United States, 543 F.3d 1330,
1337-38 (Fed. Cir. 2008). Moreover, an agency’s interpre-
tation of its regulations is entitled to that generous degree
of deference even when that interpretation is offered in
the very litigation in which the argument in favor of
deference is made, as long as there is “no reason to sus-
pect that the interpretation does not reflect the agency’s
fair and considered judgment on the matter in question.”
Auer, 519 U.S. at 462; Reizenstein v. Shinseki, 583 F.3d
1331, 1335 (Fed. Cir. 2009); Abbott Labs. v. United States,
573 F.3d 1327, 1331 (Fed. Cir. 2009); Gose v. U.S. Postal
Serv., 451 F.3d 831, 838 (Fed. Cir. 2006) (“Legitimate
agency interpretations may be made even during the very
administrative determination that has become the subject
of review. However, the interpretation must truly be one
that had been applied by the agency, either prior to or, at
the latest, during the exercise of its administrative pow-
ers in the present matter.”).
There is no reason to believe that the Defense De-
partment’s interpretation of its NSPS regulations is
merely a “convenient litigating position” or a “post hoc
rationalization” in this case. See Chase Bank USA, N.A.
v. McCoy, 131 S. Ct. 871, 881 (2011); Bowen v. Georgetown
Univ. Hosp., 488 U.S. 204, 213 (1988). To the contrary,
the record shows that the Department of Defense has
treated the effective date of the bonus component of the
performance-based payout in the same manner since the
initiation of the NSPS program in 2004. The Departmen-

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PRICE v. PANETTA 12
tal regulations that were in effect before they were re-
vised in 2008 provided that “Performance-based payouts
shall be effective the first day of the first pay period
beginning on or after January 1 of each year.” Dep’t of
Def. Civilian Personnel Manual, DOD 1400.25-M, subch.
1930.9.4. In that form, the regulations unambiguously
provided that the “first day of the first pay period” after
the first of each year was the effective date for all per-
formance-based payouts, whether in the form of salary
increases or bonuses. Pursuant to the 2008 revisions to
the NSPS statute, see National Defense Authorization Act
for Fiscal Year 2008, Pub. L. No. 110-181, § 1106, 122
Stat. 3, 349, 356 (2007), the Defense Department reprom-
ulgated its regulations through notice-and-comment
procedures. In the course of the revisions made to the
regulations, the language of the effective date provision
was amended to its current form, which continues to
provide that employees must be employed on the effective
date of the payout to receive a performance-based payout
but defines the “effective date” only for increases in sal-
ary. 5 C.F.R. § 9901.342(g)(6) & (7).
From the regulatory record, it is clear that, despite
the omission of reference to the effective date for bonus
payments, the new regulations were intended to codify
and continue the previous practice rather than to alter it.
The new regulations largely tracked the previous version,
and the Department identified those areas in which
changes were intended. Those specified modifications did
not include any reference to altering the effective date of
bonuses by separating salary increases from bonuses for
purposes of determining the date of vesting. See Proposed
Rules, 73 Fed. Reg. 29,882, 29,890 (May 22, 2008). Dur-
ing the notice-and-comment process, a commenter sug-
gested that an NSPS employee “who earns a bonus for the
performance year but retires before the end of the calen-

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PRICE v. PANETTA 13
dar year should still be able to receive a bonus payment.”
Final Rule, 73 Fed. Reg. 56,344, 56,372 (Sept. 26, 2008).
The Department of Defense rejected that suggestion,
explaining that the regulation “clearly states that an
employee who is no longer covered by NSPS on the effec-
tive date of the payout is not entitled to a performance-
based payout.” Id. While that response did not specifi-
cally identify the effective date of the bonus component of
the payout, it rejected the underlying rationale of Mr.
Price’s argument—that an employee who is covered by the
NSPS during the appraisal period should be entitled to
the bonus earned during that period.
The administrative record thus shows that the inter-
pretation of the regulation advanced by the government
in this case is consistent with the position taken by the
Department of Defense as to the effective date issue since
the Department first promulgated regulations implement-
ing the NSPS. In short, this is a case in which “the
agency’s course of action indicates that the interpretation
of its own regulations reflects its considered views.” Long
Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 171
(2007). The Department’s interpretation, which is not
“plainly erroneous or inconsistent with the regulation,”
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512
(1994), is therefore entitled to deference. Because Mr.
Price has not pointed to any statutory or regulatory
language that is contrary to the Department’s interpreta-
tion of the regulatory rule, we agree with the district
court that the Department’s interpretation governs this
case and requires that Mr. Price’s claim be rejected.
AFFIRMED

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