Jay B. Silverstein v. Office of Personnel Management

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
is not citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
06-3047
JAY B. SILVERSTEIN,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
___________________________
DECIDED: April 10, 2006
___________________________
Before LINN, DYK, and PROST, Circuit Judges.
PER CURIAM.
Jay B. Silverstein seeks review of the decision of the Merit Systems Protection
Board (“Board”), upholding the Office of Personnel Management’s (“OPM”)
determination that Silverstein’s disability retirement annuity should have been
terminated on June 30, 2000, and that Silverstein owed OPM $18,112.00 in
overpayments. We affirm.
BACKGROUND
Disability retirement is available to certain civilian service employees. 5 U.S.C. §
8337 (2000). However, under 5 U.S.C. § 8337(d), if an annuitant receiving disability
retirement is restored to “earning capacity” before the age of 60, then the annuity
payment terminates 180 days after the end of the calendar year in which earning
capacity was restored. “Earning capacity is deemed restored if in any calendar year the
income of the annuitant from wages or self-employment or both equals at least 80

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percent of the current rate of pay of the position occupied immediately before
retirement.” Id.
On October 20, 1979, Silverstein retired from his position of Distribution Clerk
with the United States Postal Service and received a disability retirement annuity until
November 30, 2001. On August 10, 2004, OPM determined that Silverstein had been
restored to earning capacity in 1999, because Silverstein reported wage earnings of
$41,948.00 on his 1999 federal income tax forms. The rate of pay for a Distribution
Clerk in 1999 was $38,614.00. Thus, Silverstein’s wage income in 1999 exceeded “80
percent of the [ ] rate of pay of the position [he] occupied immediately before
retirement.” 5 U.S.C. § 8337(d). OPM determined that Silverstein had been ineligible to
receive the annuity from July 1, 2000 through November 30, 2001 and that he was
overpaid $18,112.00 annuity benefits during that time.
Silverstein appealed to the Board, arguing that although he reported wage
earnings of $41,948.00, he also reported loses of $34,868.16 from self employment
expenses in 1999. Thus, Silverstein asserted that his business losses should have
been subtracted from his wage income, resulting in a total income of approximately
$7,080.00.
In an initial decision, the Administrative Judge (“AJ”) affirmed the OPM. The full
Board denied review. This petition for review followed. We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(9).
DISCUSSION
Our review of disability determinations under the Civil Service Retirement System
is limited to determining whether “there has been a substantial departure from important
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procedural rights, a misconstruction of the governing legislation, or some like error
going to the heart of the administrative process.” Lindahl v. Office of Pers. Mgmt., 470
U.S. 768, 791 (1985) (internal quotation marks omitted).
I
Silverstein argues that OPM should have subtracted his self employment
expenses from his wage earnings when determining his “earning capacity.” However,
OPM’s regulations clearly state that for the purposes of determining “earning capacity,”
“[i]ncome earned as wages is not reduced by a net loss from self-employment.” 5
C.F.R. § 831.1209(c)(2) (2004).
We approved OPM’s approach in Balick v. Office of Personnel Management, 85
F.3d 586 (Fed. Cir. 1996). In Balick, the petitioner received both wages and
commissions while receiving a disability annuity. Id. at 587. OPM determined the
petitioner’s “earning capacity” under 5 U.S.C. § 8337 by including the entire amount of
his wages without deducting business expenses incurred in generating commissions
related to petitioner’s business. Id. at 588. On appeal, this court found that “[t]here is
no explicit statutory definition of ‘income . . . from wages or self-employment’ in section
8337.” Id. at 589 (ellipses in original). Given the ambiguity, we concluded that OPM’s
interpretation of what “wages” included under 5 U.S.C. § 8337 was reasonable and
entitled to deference.
Silverstein attempts to distinguish Balick by arguing that Balick was based on
Internal Revenue Code provisions pertaining to business expenses as opposed to
business losses. On the contrary, in Balick we held that OPM was not required to rely
on the “taxable income” figure used for federal income tax purposes when determining
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“earning capacity.” 85 F.3d at 588-89. Balick explicitly permits OPM to treat income
from wages as separate and distinct from income from self employment. Losses from
the latter cannot offset income from the former. We see no meaningful distinction
between Balick and this case and therefore affirm the Board’s decision in this respect.
II
On appeal, Silverstein also argues that the AJ improperly permitted OPM to
submit an exhibit after the telephonic hearing, thereby denying Silverstein his right to
cross-examine OPM on the contents of this exhibit.
Prior to the hearing, OPM submitted a letter to the AJ indicating that it had
incorrectly calculated Silverstein’s annuity overpayment as $18,112.00, when it should
have been $18,102.00. After the hearing and at the AJ’s request, OPM made a second
submission, indicating that its initial calculation of $18,112.00 had been correct all along.
While it is true that this second submission occurred after the telephonic hearing,
Silverstein was copied on the submission, and Silverstein has failed to establish that
any error in considering it was harmful. See Guise v. Dep’t of Justice, 330 F.3d 1376,
1381-82 (Fed. Cir. 2003). Silverstein does not, for example, contend that OPM’s
recalculation was incorrect. Therefore, we find no reason to disturb the Board’s
decision.
For the foregoing reasons, the Board’s decision is affirmed.
No costs.
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