David L. Murphy, Karen Dahlstrom v. Office of Personnel Management

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
DAVID L. MURPHY, KAREN DAHLSTROM,
Petitioners
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent
______________________
2023-2019
______________________
Petition for review of the Merit Systems Protection
Board in Nos. DA-0841-16-0522-I-1, DA-0841-16-0523-I-1,
DA-0841-16-0524-I-1.
______________________
Decided: August 1, 2024
______________________
D AVID L. MURPHY , Palm Desert, CA, pro se.
K AREN D AHLSTROM , Palm Desert, CA, pro se.
BORISLAV K USHNIR, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, for respondent. Also represented by BRIAN M.
BOYNTON, D EBORAH A NN BYNUM , P ATRICIA M. MCCARTHY .
______________________
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MURPHY v. OPM 2
Before P ROST , CLEVENGER , and CHEN, Circuit Judges.
P ER CURIAM .
Petitioners David L. Murphy and Karen Dahlstrom ap-
peal a decision of the Merit Systems Protection Board
(Board), which affirmed a decision of the Office of Person-
nel Management (OPM) to deny petitioners’ challenges to
OPM’s recovery of overpayments to petitioners’ annuity
benefits under the Federal Employees’ Retirement System
(FERS). For the reasons discussed below, we affirm.
BACKGROUND
Mr. Murphy and Ms. Dahlstrom are former federal em-
ployees that receive annuity benefits under FERS. They
are married and share a joint bank account. Due to OPM’s
error, between May 2013 and February 2014, petitioners
received nine payments of funds intended for another an-
nuitant into their joint account at Gate City Bank, totaling
$5,486.65. OPM indicated it recovered $2,800.00 from
Gate City Bank, leaving petitioners’ joint overpayment bal-
ance at $2,686.65.
Between August and November 2014, OPM adminis-
tratively offset petitioners’ annuity payments, ultimately
recovering a total of $1,343.32 from each petitioner. In
June 2016, however, OPM authorized refunds in the
amount of $1,343.32 to each of Mr. Murphy and Ms. Dahl-
strom because it had not provided petitioners with due pro-
cess prior to the 2014 administrative offsets.
Subsequently, in letters dated July 2016, OPM individu-
ally informed petitioners of its final decisions finding peti-
tioners liable for the remaining overpayment balance of
$2,686.65. In the same letters, OPM informed petitioners
that it would collect $1,343.33 from Mr. Murphy’s annuity,
and $1,343.32 from Ms. Dahlstrom’s annuity, over fourteen
monthly installments beginning in November 2016.
Petitioners appealed OPM’s final decisions to the
Board, and the administrative judge consolidated their
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MURPHY v. OPM 3
appeals for adjudication. The administrative judge issued
an initial decision affirming OPM’s final decisions, finding
that OPM established by preponderant evidence that it is-
sued to petitioners’ joint bank account an overpayment of
$5,486.65, to which petitioners were not entitled. The ad-
ministrative judge further found that petitioners failed to
prove their affirmative defense of whistleblower reprisal
and failed to establish that they were entitled to waiver of
the overpayment or adjustment of the repayment schedule.
Mr. Murphy and Ms. Dahlstrom petitioned the Board
for review of the initial decision. On March 29, 2023, the
Board affirmed the initial decision with one modification.
Petitioners appealed to this court on June 7, 2023—70 days
after the Board’s final decision.
D ISCUSSION
I.
This court has jurisdiction over final orders and final
decisions of the Board under 28 U.S.C. § 1295(a)(9). A pe-
tition for review “shall be filed within 60 days after the
Board issues notice of the final order or decision of the
Board.” 5 U.S.C. § 7703(b)(1)(A).
We must affirm the Board’s decision unless it is “(1) ar-
bitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law; (2) obtained without procedures re-
quired by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence.” 5 U.S.C.
§ 7703(c); Briggs v. Merit Sys. Prot. Bd., 331 F.3d 1307,
1311 (Fed. Cir. 2003).
II.
The government initially contended that this court
lacks jurisdiction over this case because petitioners did not
appeal until after the 60-day deadline set forth in 5 U.S.C.
§ 7703(b)(1)(A). During the pendency of this appeal, how-
ever, the Supreme Court decided Harrow v. Department of
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MURPHY v. OPM 4
Defense, 601 U.S. 480 (2024), holding that the 60-day time
limit to petition this court for review of a final Board deci-
sion is not jurisdictional. Id. at 482. Subsequently, in a
memorandum in lieu of oral argument filed out of time, the
government withdrew its argument that petitioners’ ap-
peal should be dismissed for lack of jurisdiction. Respond-
ent’s Mem. in Lieu of Oral Arg. 1–2, ECF No. 34-2. The
government thus no longer challenges this court’s jurisdic-
tion over this appeal and we likewise do not identify any
unfulfilled jurisdictional requirement.
In its untimely filed memorandum, the government ar-
gued for the first time in this case that the 60-day deadline
under section 7703(b)(1)(A), though not jurisdictional, is
still mandatory and thus not subject to equitable tolling.1
Respondent’s Mem. 2, ECF No. 34-2. For support, the gov-
ernment points to the Harrow Court’s decision to remand
to this court to determine whether equitable tolling is
available under section 7703(b)(1)(A). Id.
We find that the government forfeited this argument
by failing to raise it in its informal response brief, in which
it made only two arguments: (i) that “equitable tolling
would be unwarranted under the unique circumstances of
this appeal,” Respondent’s Informal Br. 8 (emphasis
added), and (ii) that the Board correctly decided the case
on the merits, id. at 18, 21. Nowhere in its informal re-
sponse brief did the government argue that equitable toll-
ing is unavailable generally under section 7703(b)(1)(A),
1 The government failed to make this argument in
its informal response brief, filed on March 22, 2024, despite
previously raising this same argument in its Brief for the
Respondent filed in Harrow on February 12, 2024. See
Brief for Respondent at 42–44, Harrow, 601 U.S. 480 (No.
23-21), 2024 WL 647080. We deny the government’s mo-
tion for leave to file its memorandum in lieu of oral argu-
ment out of time, ECF No. 34-1.
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MURPHY v. OPM 5
despite acknowledging that the Supreme Court might con-
clude in Harrow that the 60-day deadline is not jurisdic-
tional.
Although we have discretion to reach forfeited argu-
ments on appeal, we decline to address the government’s
late-raised legal argument. Because the Board did not err
on the merits, we affirm the Board’s decision, and thus do
not reach the government’s other argument that equitable
tolling is unavailable under the facts of this case.
III.
Petitioners contend that the Board erred in several re-
spects. We address each argument in turn.
First, petitioners argue that they were not afforded due
process because OPM recovered money from their annuity
payments without issuing a final decision letter. Petition-
ers’ Informal Br. 4. To the extent that this argument refers
to the administrative offsets OPM conducted in 2014, OPM
fully refunded those offset funds to petitioners in 2016. Af-
ter OPM issued the refunds, the administrative judge dis-
missed petitioners’ initial appeal to the Board challenging
OPM’s 2014 administrative offsets for lack of jurisdiction.
SAppx3 n.4.2 Because petitioners did not appeal that dis-
missal, id., the 2014 administrative offsets are not before
this court. To the extent that petitioners argue they were
not afforded due process with respect to the administrative
offsets OPM conducted beginning in November 2016, OPM
issued “initial final overpayment decision” letters to both
Mr. Murphy and Ms. Dahlstrom in July 2016. SAppx39–
44. Because OPM notified petitioners of its final decisions
prior to conducting those administrative offsets, we are un-
persuaded that petitioners were not afforded due process.
2 “SAppx” refers to the appendix filed with the gov-
ernment’s informal brief.
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MURPHY v. OPM 6
Second, petitioners argue that the erroneously depos-
ited funds they received were not “overpayment[s],” but ra-
ther “misdirected payment[s]” that OPM had no right to
recover. Petitioners’ Informal Br. 7. This is because, ac-
cording to petitioners, the payments were directed to an-
other annuitant, Thomas Gaulin, rather than to
Mr. Murphy or Ms. Dahlstrom. As the Board found, this
argument is unavailing because an overpayment or debt
under FERS is “a payment of benefits to an individual in
the absence of entitlement or in excess of the amount to
which an individual is properly entitled.” 5 C.F.R.
§ 845.203; see SAppx6. Because OPM proved by prepon-
derant evidence the existence and amount of the overpay-
ments, and petitioners offer no basis for finding they were
entitled to the overpayments, we agree with the Board that
the erroneously deposited funds constituted a “debt” under
FERS regardless of whether the funds were intended for
another annuitant.
Third, petitioners argue that because the overpay-
ments were caused by Gate City Bank’s error, the bank was
responsible for full repayment to OPM. Petitioners’ Infor-
mal Br. 6. In particular, petitioners note that OPM recov-
ered a partial amount of the overpayment directly from the
bank, “beg[ging] the question, if the bank is responsible for
some of it, why are they not responsible for ‘all’ of it.” Id.
As the Board noted, however, petitioners do not identify
any basis for OPM to hold the bank liable for funds that
were erroneously directed to, and deposited into the ac-
count of, the wrong annuitant.
Fourth, petitioners allege that they did not receive a
fair hearing before the administrative judge because they
were not allowed to question any witnesses, including
Kevin Martin, Acting Chief of Quality Control and Author-
ization in Operations Support, Retirement Services, at
OPM. Petitioners’ Informal Br. 4–6. Petitioners contend
that testimony by Mr. Martin “was crucial to the fact that
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MURPHY v. OPM 7
OPM and Gate City [B]ank were the responsible parties in
this case.” Id. at 4.
Because “[p]rocedural matters regarding discovery and
evidentiary issues ‘fall within the sound discretion of the
[B]oard and its officials,’” this court “will not overturn the
Board’s determinations on such issues ‘unless an abuse of
discretion is clear and is harmful.’” Rueter v. Dep’t of Com.,
63 F.4th 1357, 1371 (Fed Cir. 2023) (quoting Curtin v. Off.
of Pers. Mgmt., 846 F.2d 1373, 1378 (Fed. Cir. 1988)) (sec-
ond alteration in original). To show an abuse of discretion,
the petitioner “must prove that the error caused substan-
tial harm or prejudice to his rights which could have af-
fected the outcome of the case.” Id. (quoting Curtin, 846
F.2d at 1379).
Here, petitioners do not demonstrate that their inabil-
ity to question Mr. Martin as a witness caused substantial
harm or prejudice that could have affected the outcome of
the case. As discussed above, petitioners do not identify
any basis for OPM to hold the bank liable for the overpay-
ments, and Mr. Martin’s testimony would not provide such
basis. Nor do petitioners explain how Mr. Martin’s testi-
mony might support a position that petitioners were enti-
tled to waiver of the overpayment or an adjustment to the
repayment schedule. OPM may waive recovery of overpay-
ments “when, in the judgment of [OPM], the individual is
without fault and recovery would be against equity and
good conscience.” 5 U.S.C. § 8470(b); see also 5 C.F.R.
§ 845.301. Recovery is against equity and good conscience
when any of the following are met:
(a) It would cause financial hardship to the person
from whom it is sought;
(b) The recipient of the overpayment can show (re-
gardless of his or her financial circumstances) that
due to the notice that such payment would be made
or because of the incorrect payment he or she either
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MURPHY v. OPM 8
has relinquished a valuable right or has changed
positions for the worse; or
(c) Recovery would be unconscionable under the
circumstances.
5 C.F.R. § 845.303. Furthermore, a recipient of an over-
payment who is ineligible for waiver “is nevertheless enti-
tled to an adjustment in the recovery schedule if he or she
shows that it would cause him or her financial hardship to
make payment at the rate scheduled.” Id. § 845.301.
Petitioners do not demonstrate how Mr. Martin’s testi-
mony could support a finding of financial hardship or any
other circumstance warranting repayment waiver or ad-
justment. Accordingly, we discern no abuse of discretion in
the administrative judge’s decision not to allow petitioners
to call Mr. Martin as a witness.
Finally, petitioners contend that the Board erred in af-
firming the administrative judge’s finding that petitioners
failed to prove their affirmative defense of whistleblower
reprisal because, according to petitioners, they are pro-
tected under the Whistleblower Protection Act as former
federal employees. Under the Whistleblower Protection
Act:
[A]n employee, former employee, or applicant for
employment may, with respect to any personnel ac-
tion taken, or proposed to be taken, against such
employee, former employee, or applicant for em-
ployment, as a result of a prohibited personnel
practice described in section 2302(b)(8) or section
2302(b)(9)(A)(i), (B), (C), or (D), seek corrective ac-
tion from the Merit Systems Protection Board.
5 U.S.C. § 1221(a) (emphasis added). Sections 2302(b)(8)
and 2302(b)(9) refer to only personnel actions with respect
to or against “any employee or applicant for employment,”
but not former employees. Id. § 2302(b)(8)–(9). We have
interpreted these statutory provisions, in combination, to
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MURPHY v. OPM 9
mean that “although a former employee may file an appeal
for corrective action under the Whistleblower Protection
Act, the appeal must concern actions that occurred while
the individual was an employee or applicant for employ-
ment.” Guzman v. Off. of Pers. Mgmt., 53 F. App’x 927, 930
(Fed. Cir. 2002); see also Nasuti v. Merit Sys. Prot. Bd., 376
F. App’x 29, 34 (Fed. Cir. 2010) (“[I]t is difficult to stretch
the statutory language to cover a claim brought by a former
employee complaining of agency action taken after the ter-
mination of employment in response to a disclosure that
was also made after the termination of his employment.”).
The alleged protected disclosures here occurred in
2014, after Mr. Murphy and Ms. Dahlstrom had retired
from federal service in 2012 and 2009, respectively. The
administrative judge thus appropriately concluded that pe-
titioners are not protected by the Whistleblower Protection
Act because they cannot show that they were employees or
applicants for employment at the time of the alleged pro-
tected disclosures or alleged retaliation. We conclude that
the Board did not err in upholding this finding.
CONCLUSION
We have considered petitioners’ remaining arguments
and find them unpersuasive. For the reasons above, we
affirm the Board’s decision.
AFFIRMED
COSTS
No costs.
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