Guadalupe Casarez v. Office of Personnel Management

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
GUADALUPE CASAREZ,
Petitioner
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent
______________________
2024-2125
______________________
Petition for review of the Merit Systems Protection
Board in No. SF-0845-19-0563-I-1.
______________________
Decided: April 14, 2025
______________________
G UADALUPE CASAREZ, Downey, CA, pro se.
BRENDAN D AVID J ORDAN, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, for respondent. Also represented by
BRIAN M. B OYNTON , T ARA K. HOGAN, P ATRICIA M.
MCCARTHY .
______________________
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CASAREZ v. OPM 2
Before L OURIE, CHEN, and HUGHES , Circuit Judges.
P ER CURIAM .
Guadalupe Casarez petitions for review of a final deci-
sion of the Merit Systems Protection Board (“the Board”),
which denied Casarez’s petition and upheld the United
States Office of Personnel Management’s (“OPM”) findings
regarding its entitlement to collect an overpayment of Cas-
arez’s Federal Employees’ Retirement System (“FERS”)
disability retirement annuity benefits. Casarez v. OPM,
No. SF-0845-19-0563-I-1, 2024 WL 2815347 (M.S.P.B. May
31, 2024) (“Final Decision”); Casarez v. Off. of Pers. Mgmt.,
No. SF-0845-19-0563-I-1, 2019 WL 4923761 (M.S.P.B. Oct.
1, 2019) (“Initial Decision”), R.A. 15–32.1 For the following
reasons, we affirm.
BACKGROUND
Casarez was an employee of the United States Postal
Service (“USPS”). She applied for disability retirement un-
der FERS on May 29, 2015. R.A. 49–51. Just over a year
later, on June 13, 2016, OPM notified Casarez that her ap-
plication had been approved. R.A. 133–35. OPM’s ap-
proval letter explained that “[b]ecause the FERS disability
benefit must be reduced by 100 percent of any Social Secu-
rity benefit payable for 12 months, Social Security checks
should not be negotiated until the FERS benefit has been
reduced” and that the “social security checks will be needed
to pay OPM for the reduction which should have been made
in the FERS annuity.” R.A. 134 (emphasis omitted).
OPM sent Casarez a similar letter on November 7,
2016. This letter explained that “[i]f you are overpaid
FERS disability benefits because of receipt of Social Secu-
rity disability benefits, OPM will send you a notice of the
1 “R.A.” refers to the appendix filed with Respond-
ent’s brief.
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CASAREZ v. OPM 3
amount of overpayment” and that Casarez was “legally re-
quired to repay this money to OPM.” R.A. 137. Particu-
larly relevant to here, the letter instructed that if the
United States Social Security Administration (“SSA”)
“sends you a retroactive payment, hold that award until
you receive a notice of the amount of your overpayment
from OPM, so that you have sufficient funds to repay your
duplicate payment.” Id. (emphasis added).
On March 12, 2018, almost two years after Casarez’s
FERS application was approved, Casarez received a letter
from SSA informing her that she was entitled to monthly
SSA disability benefits retroactive to August 2014.
R.A. 56. About two weeks later, on March 28th, OPM, as
it explained would happen in its earlier letters, notified
Casarez regarding her overpayment in FERS annuity ben-
efits in light of her incoming, retroactive Social Security
benefits. R.A. 124. The letter acknowledged that Casarez
was entitled to Social Security benefits effective August 1,
2014, and that such benefits would result in a FERS over-
payment by OPM. Id. Consistent with earlier letters, it
also informed Casarez that OPM was “required to reduce
your FERS disability benefit by the amount of the benefit
you are entitled to from the [SSA].” Id. The letter’s accom-
panying enclosures provided more details, specifying the
total overpayment amount to be collected ($61,531), the
first installment date (June 1, 2018), the number of install-
ments (108), and the amount per installment ($570.12 for
the first 107 installments and $528.16 for the final install-
ment). R.A. 125.
Casarez filed a timely request for reconsideration on
April 4, 2018, which challenged the existence and amount
of the overpayment, argued for waiver of overpayment rec-
ollection, and, as an alternative to waiver, requested lower
monthly repayment installments. R.A. 122. The record
contains no evidence that Casarez provided additional de-
tails or arguments to substantiate or support her reconsid-
eration request. R.A. 123. OPM then issued a series of
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CASAREZ v. OPM 4
decisions—an initial reconsideration decision rejecting
Casarez’s arguments, a recission of that decision, and fi-
nally a new reconsideration decision again finding that
OPM had overpaid Casarez $61,531 as a result of her ret-
roactive SSA benefits, and that Casarez was not entitled to
a waiver because she should have known to set aside the
retroactive SSA payment to pay OPM back. Initial Deci-
sion, R.A. 17–18; R.A. 108–11. Casarez then filed a petition
for review of OPM’s final decision with the Board, challeng-
ing the amount of overpayment and arguing for a waiver of
overpayment. R.A. 261–262. An administrative judge of
the Board affirmed OPM’s determinations in an Initial De-
cision, which the Board then affirmed with modifications
as its Final Decision. See Final Decision, at *1.
Casarez timely petitioned for review in this court, and
we have jurisdiction under 5 U.S.C. § 7703(b)(1) and
28 U.S.C. § 1295(a)(9).
D ISCUSSION
Casarez argues that the Board’s determinations were
not supported by substantial evidence. Specifically, Cas-
arez challenges the Board’s findings regarding OPM’s over-
payment calculation as well as the Board’s findings
regarding OPM’s waiver decision, including that OPM’s
collection of its overpayment is not against equity and good
conscience. If the Board’s waiver determination is upheld,
Casarez alternatively challenges the Board’s findings re-
garding OPM’s determination that she had not shown suf-
ficient evidence of financial hardship to justify a reduction
of her monthly repayment installment amounts.
Under 5 U.S.C. § 7703(c), we may only set aside an ac-
tion of the Board if it was “(1) arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with
law; (2) obtained without procedures required by law, rule,
or regulation having been followed; or (3) unsupported by
substantial evidence.” McIntosh v. Dep’t of Def., 53 F.4th
630, 638 (Fed. Cir. 2022) (citation omitted). Moreover,
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CASAREZ v. OPM 5
“[w]e review the Board’s legal decisions de novo and its
findings of fact for substantial evidence.” Id. In doing so,
we also construe Casarez’s papers, as a pro se litigant, lib-
erally. Erickson v. Pardus, 551 U.S. 89, 94, (2007) (per cu-
riam).
The computation of a FERS disability annuity is gov-
erned by 5 U.S.C. § 8452. A FERS disability annuity must
be reduced by any Social Security disability benefits a
FERS retiree receives. 5 U.S.C. § 8452(a)(2); 5 C.F.R.
§ 844.302(b)(2), (c)(2). OPM is required to prove by a pre-
ponderance of the evidence the existence and amount of a
FERS disability annuity overpayment. 5 C.F.R.
§ 845.307(a).
Casarez first argues that OPM’s calculated overpay-
ment amount is incorrect and should be reduced because
(1) the SSA benefit was reduced by workers’ compensation
benefits that she never received, and (2) OPM improperly
withheld the cost of her health insurance premiums from
her FERS annuity. Casarez Br. 2–4. The Board, in view of
SSA’s retroactive Social Security benefits, found that OPM
correctly determined that it had overpaid Casarez by
$61,531. Final Decision, at *1–3; R.A. 129 (overpayment
calculations).
The Board’s findings regarding the amount of overpay-
ment were supported by substantial evidence. As the
Board found, Casarez was entitled to $2,132 in full monthly
SSA benefits, and OPM’s calculations show that her
monthly FERS benefits were reduced by that amount dur-
ing the relevant time period. See R.A. 129 (the difference
between the FERS “Old Rate” ($3,990) and the FERS “New
Rate” ($1,858) is equal to her full SSA monthly benefit
($2,132)). While Casarez was entitled to workers’ compen-
sation during part of the relevant period, any offset of Cas-
arez’s Social Security benefits by SSA for her workers’
compensation benefits is not relevant to the FERS overpay-
ment calculation under 5 U.S.C. § 8452. See Leighton v.
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CASAREZ v. OPM 6
OPM, 529 F.3d 1071, 1073 (Fed. Cir. 2008) (per curiam)
(“We conclude that the [B]oard correctly affirmed OPM’s
decision to calculate [retiree’s] FERS disability retirement
annuity [under 5 U.S.C. § 8452] based upon the SSA bene-
fits to which he was entitled before any adjustments for
[workers’] compensation.”).
OPM was also not required to consider any deductions
for health insurance premiums for purposes of determining
Casarez’s FERS annuity overpayment amount. FERS dis-
ability annuity amounts are based on a person’s “average
pay,” 5 U.S.C. § 8452(a)(1)(A), which in turn is based on the
person’s “basic pay,” 5 U.S.C. § 8401(3). “Basic pay” is an
employee’s annual salary as fixed by applicable law or reg-
ulation for a position, and it excludes supplemental types
of pay (e.g., bonuses, allowances, and overtime pay). See
5 U.S.C. § 8331(3). As the Board further explained, OPM
applies “gross” pay rates to FERS overpayment calcula-
tions, which necessarily excludes any deductions, including
for healthcare insurance premiums paid by the retiree. Fi-
nal Decision, at *3. OPM’s FERS overpayment calculation
thus excludes both supplemental pay and any deductions,
and substantial evidence therefore supports the Board’s
findings as to the amount of OPM’s overpayment.
Casarez next challenges the Board’s no-waiver deter-
mination. Repayment of FERS overpayments may be
waived when, in OPM’s judgment, the individual “is with-
out fault and recovery would be against equity and good
conscience.” 5 U.S.C. § 8470(b); 5 C.F.R. § 845.301 et seq.;
Ret. & Ins. Serv., U.S. OPM., Policy Guidelines on the Dis-
position of Overpayments under the Civil Service
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CASAREZ v. OPM 7
Retirement System and the Federal Employees’ Retirement
System (1995)2 (“Policy Guidelines”).
While it is undisputed that Casarez was without fault,
the Board found that recovery was not against equity and
good conscience, applying the Policy Guidelines’ “Set-Aside
Rule.” Final Decision, at *4 (affirming Initial Decision at
R.A. 22–23). Under the Set-Aside Rule, “if [the] individual
suspected or knew that he or she had received an overpay-
ment (and therefore had an obligation to set aside the over-
paid funds), the individual is not eligible for a waiver under
the ‘equity and good conscience’ standard and would be en-
titled to relief only under the more exacting ‘exceptional
circumstances’ standard.” Boyd v. OPM, 851 F.3d 1309,
1313–14 (Fed. Cir. 2017). Notably, “[w]hat matters is not
what [Casarez] was ‘instructed’ to do, but whether she ad-
verted to and understood that instruction.” Id. at 1315 n.3.
That is because “[t]hose individuals [that] do not know that
the money does not belong to them . . . may act in good faith
when they fail to set aside the overpayments.” Id. at 1315;
see Policy Guidelines, § I.C.4.
The Board found that “[Casarez] was certainly aware
when she received the [SSA] retroactive payment [that] she
was required to set that payment aside to repay the
agency” based on OPM’s November 2016 and March 2018
letters, which Casarez had received before she received her
retroactive payment from SSA in June 2018. Initial Deci-
sion, R.A. 23 (affirmed by Final Decision, at *4). The Board
also found that Casarez’s alleged financial hardships did
“not describe exceptional circumstances.” Final Decision,
at *4.
2 OPM’s published policy guidelines interpreting its
regulations regarding its Civil Service and Federal Em-
ployee’s Retirement Systems.
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CASAREZ v. OPM 8
The Board’s finding that Casarez was on notice of her
repayment obligation and to set aside the Social Security
payment in June 2018 was supported by substantial evi-
dence. The record indicates that Casarez received at least
three letters from OPM that, together, effectively placed
her on notice of her set aside obligation. First, OPM’s June
2016 letter explained that “the FERS disability benefit
must be reduced by 100 percent of any Social Security ben-
efit payable for 12 months” and that “[t]he social security
checks will be needed to pay OPM for the reduction.”
R.A. 134 (emphasis omitted). Second, OPM’s November
2016 letter instructed that “[i]f SSA sends you a retroactive
payment, hold that award until you receive a notice of the
amount of your overpayment from OPM, so that you have
sufficient funds to repay your duplicate payment.” R.A.
137 (emphasis added). Third, OPM’s March 2018 letter
and its enclosures stated OPM’s overpayment amount and
explained that OPM would recover the resulting overpay-
ment by reducing her monthly FERS annuity moving for-
ward. R.A. 124–25. Although the Board relies on OPM
letters spaced years apart, substantial evidence nonethe-
less supports its finding that Casarez should have known
that she was required to set aside the incoming retroactive
Social Security payment. It was therefore reasonable for
the Board to conclude that Casarez was on notice of her set-
aside obligation and that her financial hardships do not
constitute exceptional circumstances, and thus OPM’s col-
lection of overpayment was not against equity and good
conscience.
Casarez does not argue that she did not receive those
letters or that she misunderstood any specific aspects of the
letters. She does however argue more generally that the
timing and nature of SSA’s retroactive payment paired
with OPM’s various letters spanning several years led to
uncertainty regarding her set aside obligation. Specifi-
cally, she asserts that OPM’s March 2018 letter stated that
her FERS benefits would be reduced but she had yet to
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CASAREZ v. OPM 9
actually receive any Social Security payments until months
later in June 2018. Casarez Br. 3. In other words, at the
time of receiving the March 28th letter, she argues that it
was unclear what she was to set aside since she had not
received any SSA benefits yet. She also contends that OPM
caused more confusion because, after she had requested re-
consideration in April 2018, OPM issued a series of conflict-
ing decisions. R.A. 46. On January 15, 2019, OPM issued
a final decision rejecting Casarez’s reconsideration argu-
ments. Initial Decision, R.A. 18. But then, after Casarez
appealed, the agency rescinded that decision. Id. Some
months later in June 2019, OPM issued a new reconsider-
ation decision, again rejecting Casarez’s reconsideration
request. Id.
We sympathize with Casarez’s situation. But the scope
of our review is limited. As explained above, the Board’s
finding that Casarez should have known to set aside any
Social Security payment that she received—whether in the
past or in the future—was supported by substantial evi-
dence. Accordingly, the Board’s determination that OPM’s
collection of its overpayment was not against equity and
good conscience was reasonable.
Finally, we turn to Casarez’s argument that she is en-
titled to an adjustment in the recovery schedule prescribed
by OPM. Even where an individual is ineligible for waiver
of overpayment, she may still be entitled to an adjustment
in the recovery schedule if she shows that it would cause
financial hardship to make payments at the rate scheduled
by the agency. 5 C.F.R. § 845.301. In its Final Decision,
the Board found that the record reflected that Casarez had
requested lower installments ($100 instead of $570.12) and
that she raised that issue before the administrative judge.
Final Decision, at *4; R.A. 122. But the Board reasoned
that because Casarez failed to provide her income, liquid
assets, ordinary and necessary expenses, and other circum-
stances that would explain how difficult it would be to
make such payments, she did not establish financial
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CASAREZ v. OPM 10
hardship and therefore OPM could not reduce her monthly
installment amount. Id.
The Board’s finding concerning Casarez’s request for
an adjusted monthly repayment amount is supported by
substantial evidence. Casarez requested lower install-
ments, R.A. 122, but did not provide a responsive Financial
Resources Questionnaire or any statement indicating her
financial circumstances, R.A. 123. Casarez therefore failed
to show that she needs substantially all of her current in-
come to meet her current ordinary and necessary living ex-
penses and liabilities. Without such information, OPM
was not obligated to adjust her FERS repayment amount
accordingly.
CONCLUSION
We have considered Casarez’s remaining arguments
but find them unpersuasive. For the foregoing reasons, the
Board’s final decision is affirmed.
AFFIRMED
COSTS
No costs.
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