[00:00:00] Speaker 01:
Versus OPM case number 161078.

[00:00:04] Speaker 01:
Okay, Mr. Carano?

[00:00:20] Speaker 01:
Yes.

[00:00:21] Speaker 01:
You want five minutes for rebuttal?

[00:00:23] Speaker 01:
Yes, please.

[00:00:31] Speaker 06:
With me today is Ryan Strontzer of AitkenGum.

[00:00:34] Speaker 06:
Mrs. Boyd spent 25 years at the Postal Service, and she retired based on disability in 2011.

[00:00:41] Speaker 06:
Below, she was wrong in two different ways.

[00:00:44] Speaker 06:
One, the application of the waiver law, and then two, with respect to the failure to provide her greater deference because she was a retiree and the failure to provide special duty due pro se applicants.

[00:00:58] Speaker 06:
With respect to the law of waiver,

[00:01:00] Speaker 06:
As the court knows, waiver requires two elements, two prongs.

[00:01:04] Speaker 06:
One, the individual has to be without fault.

[00:01:07] Speaker 06:
And then two, that recovery would be against equity and good conscience.

[00:01:14] Speaker 06:
With respect to fault, the guidelines of the OPM, as well as the case law, is clear in this issue.

[00:01:22] Speaker 06:
If the applicant or the annuit provides notice of possible overpayment, she is not at fault.

[00:01:31] Speaker 06:
That's pretty clear in the law.

[00:01:33] Speaker 06:
The facts here in this case are that.

[00:01:36] Speaker 01:
But there's still the second crawl.

[00:01:38] Speaker 06:
Yes.

[00:01:39] Speaker 06:
But the opinion below conflates the two elements of waiver, the issue of fault and the issue of equity and good conscience.

[00:01:49] Speaker 06:
And Maxwell's case was right on point, where there was a conflation of the two points.

[00:01:54] Speaker 06:
And it was remanded to separate the two issues of the set-aside rule

[00:02:00] Speaker 06:
with the determination of fault.

[00:02:02] Speaker 02:
But if I understand, your position is that fault has nothing to do with the set-aside obligation.

[00:02:07] Speaker 02:
And the error that was committed by the board, or the AJ anyway, was that she conflated the set-aside, the noncompliance with the set-aside rule with the fault, put that under the fault category as opposed to in the equity and good conscience category.

[00:02:25] Speaker 02:
Correct.

[00:02:26] Speaker 02:
Fine.

[00:02:26] Speaker 02:
And that does seem to be what the OPM regulations, the way they sorted out.

[00:02:31] Speaker 02:
But that doesn't seem to be necessarily to make much difference if, in fact, the failure to comply with the set-aside obligation dooms the equity and good conscience prong.

[00:02:43] Speaker 02:
And here, the problem is that the board found that she failed to comply with the set-aside obligation.

[00:02:52] Speaker 02:
And then it comes down to a question of notice, right, whether she had notice of that set-aside obligation.

[00:02:59] Speaker 02:
Your argument is that, well, she never... I take it you concede that she received the letter on June 11th.

[00:03:05] Speaker 02:
Yes.

[00:03:06] Speaker 02:
But you say she didn't read the boldface portion or understand it on the back, which said that you have to have this set-aside if you get double payment, or she didn't remember it when her payment started, whatever.

[00:03:18] Speaker 06:
I'll just clarify that issue.

[00:03:20] Speaker 06:
So we were not contesting that she got the June 2000 notice.

[00:03:25] Speaker 06:
And that's the only notice she had.

[00:03:26] Speaker 02:
And that she understood that she had an obligation to report.

[00:03:29] Speaker 02:
So that was one of the contests.

[00:03:30] Speaker 06:
And she did, in fact, report eight days after she got the Social Security notice, and then one day after she got the first security payment in September of 2001.

[00:03:38] Speaker 02:
So she complied with that, no doubt.

[00:03:40] Speaker 06:
But that was the easy part of the notice.

[00:03:42] Speaker 06:
The more difficult part was, and you know, it says negotiate the checks.

[00:03:47] Speaker 06:
She's not a securities lawyer.

[00:03:48] Speaker 06:
She's a postal worker, right?

[00:03:50] Speaker 06:
So I'm not sure if that's particularly clear in itself.

[00:03:53] Speaker 06:
Second point was that that notice that you referred to is in bold.

[00:03:58] Speaker 06:
And it says, during the first 12 months of payment, set aside the checks.

[00:04:02] Speaker 06:
Well, she wasn't getting social security payments during those 12 months.

[00:04:06] Speaker 06:
She was awarded social security payments on the 12th month, which was paid on the 13th month.

[00:04:13] Speaker 06:
So her reading was of that, or the substantial evidence to support this reading,

[00:04:17] Speaker 06:
that she didn't get Social Security during 12 months.

[00:04:20] Speaker 06:
She got it post 12 months.

[00:04:22] Speaker 06:
And that's, I think, a fair reading or substantial evidence reading of that provision that you noted is on.

[00:04:28] Speaker 01:
But are you saying she didn't understand that she wasn't supposed to cash the checks, or she actually parsed the language in a more refined way to say she understood she wasn't supposed to cash the checks, but she thought that only applied to the first 12 months?

[00:04:42] Speaker 06:
I think there's substantial evidence for the latter.

[00:04:44] Speaker 02:
I didn't remember you making this argument either below or in the brief.

[00:04:49] Speaker 06:
I think this is new today.

[00:04:52] Speaker 06:
We said it was confusing technical language.

[00:04:55] Speaker 01:
That's what you said.

[00:04:56] Speaker 01:
Again, I agree.

[00:05:00] Speaker 01:
This is the first time that I'm hearing this theory.

[00:05:04] Speaker 01:
And so that wasn't presented to the board.

[00:05:07] Speaker 01:
So what can we do about that?

[00:05:09] Speaker 06:
Well, this was, I mean, what was in the record was this June 2011 letter.

[00:05:18] Speaker 06:
Because of the e-filing over what the inadvertent mistake on the e-filing, or that wasn't her actions, it was her fiance's actions, she didn't have an opportunity to be heard on knowledge, and she didn't have an opportunity on this issue.

[00:05:35] Speaker 06:
So yeah, so on the record we have here, although we think that's an error for not allowing her to open the record to have a hearing.

[00:05:44] Speaker 06:
But it was just outdated financial information.

[00:05:48] Speaker 06:
That's the second problem, yes.

[00:05:50] Speaker 06:
Yes, just the information that the OPM had, which wasn't provided the record that she could have provided if there was a hearing, was outdated, but still, it was outdated, but it was still

[00:06:03] Speaker 06:
pretty much the same as it probably is right now.

[00:06:05] Speaker 06:
There was an opportunity for the board to have it if OPM would have produced it.

[00:06:12] Speaker 01:
But we can't second guess, ultimately.

[00:06:15] Speaker 01:
I mean, their determination with respect to how much financial hardship was shown.

[00:06:20] Speaker 06:
We agree.

[00:06:21] Speaker 01:
OK.

[00:06:21] Speaker 01:
And here, it appears that whatever was missing originally, they looked at because they reduced the repayment amount even more.

[00:06:31] Speaker 05:
Right.

[00:06:32] Speaker 05:
OPM did, and they just agreed with that.

[00:06:33] Speaker 01:
OK.

[00:06:34] Speaker 01:
So I don't think that we can get to that question.

[00:06:38] Speaker 01:
And so I don't see anything that related to what she felt that she would have submitted that would change the question of whether she was on notice that she wasn't supposed to cash the checks.

[00:06:50] Speaker 06:
Not to denote the provision, but if the court would remand back to the board because of the issues of fault or the set-aside,

[00:07:00] Speaker 06:
fault and the set of slide provision, then the board would have the opportunity to take that evidence in for financial hardship.

[00:07:08] Speaker 02:
I'm wondering about, you cited the Maxwell case, but one of the things that Maxwell seems to stand for, you may disagree with the reading of it, but as I read that case, it's saying that if you receive the letter from OPM, a letter which presumably this is typical of, then that constitutes notice.

[00:07:27] Speaker 02:
You're on notice.

[00:07:29] Speaker 02:
So she's received it.

[00:07:31] Speaker 02:
that the board's view, at least, is that she's on notice.

[00:07:34] Speaker 02:
And therefore, what would there be to decide on remand since she's conceded she received it, other than your one-year theory?

[00:07:42] Speaker 06:
Well, I mean, I think that is real.

[00:07:44] Speaker 02:
Set aside the one-year theory, please.

[00:07:47] Speaker 06:
We don't read Maxwell that stringently.

[00:07:50] Speaker 06:
We think Maxwell stands to the proposition that that is a factor to consider, but it doesn't ipto facto mean that she was on notice and then therefore at fault.

[00:08:01] Speaker 01:
So when you say it doesn't, it's a fact.

[00:08:05] Speaker 01:
So what's your argument that she wasn't on those?

[00:08:07] Speaker 01:
Put aside the 12 months so that it was on the back or that they used the word negotiate or that?

[00:08:12] Speaker 06:
I think it was the context.

[00:08:16] Speaker 06:
The context was she got this notice in 2011.

[00:08:19] Speaker 06:
And if you look at what she wrote, her own words for the appeal and the petition for review, she seemed to understand

[00:08:31] Speaker 06:
And I think substantial evidence was that one, the 12-month period is a cutoff for any adjustment to the annuity.

[00:08:40] Speaker 06:
And there was another statement post-211 where it said that she may be obligated to repay any retroactive social security money.

[00:08:52] Speaker 06:
But she wasn't paid retroactive social security money.

[00:08:54] Speaker 06:
She was paid prospective social security money.

[00:08:57] Speaker 06:
So in her view, in her own words for the petition,

[00:09:00] Speaker 06:
for review as well as for appeal, she thought during that period there was no need for repayment.

[00:09:10] Speaker 01:
And so do you think that this conflating of the fault and the equity prongs somehow prevented or allowed the board to reach a conclusion with respect to equity without a full analysis of these questions?

[00:09:26] Speaker 06:
Yes.

[00:09:26] Speaker 06:
I mean, I think nowhere in the record

[00:09:30] Speaker 06:
not that the administrative judge statement of the law, nor the opinions of the board or the administrative judge discuss the notice provision exception that you're not at fault.

[00:09:46] Speaker 06:
So there's no mention of that exception to fault.

[00:09:50] Speaker 06:
As far as the applicability of the set-aside provision,

[00:09:55] Speaker 06:
we think is substantial evidence in Mrs. Boyd's favor that says the set-aside provision is not applicable.

[00:10:03] Speaker 02:
Now, you said you didn't read Maxwell the way that I suggested one could read Maxwell.

[00:10:09] Speaker 02:
But it seems to me the language is pretty clear.

[00:10:12] Speaker 02:
It says, regardless of fault, if the appellant received notice that her FERS annuity payments would be reduced for receipt of Social Security benefits,

[00:10:23] Speaker 02:
She was required to set aside that portion of the lump sum necessary to repay the overpayment.

[00:10:28] Speaker 02:
So, I mean, she received the notice that she would be required to have a reduced payment, and she was required to set aside.

[00:10:36] Speaker 02:
That seems to be what the board's saying.

[00:10:38] Speaker 02:
So I'm not sure that notice is anything more than getting the June 11th letter.

[00:10:43] Speaker 02:
As I read that, do you read it differently?

[00:10:46] Speaker 02:
Or do you think that's an incorrect statement of the legal standard?

[00:10:51] Speaker 06:
I think it's just factually distinguishable in this case.

[00:10:54] Speaker 06:
Going back to the 12-month issue, I think it's fair to read again, and it's substantial evidence to read, that 12-month being that's the cutoff of any point in time which there wouldn't be any adjustment to the FERS payment.

[00:11:09] Speaker 06:
And indeed, arguably there's a month overlap.

[00:11:13] Speaker 06:
The Social Security was awarded on the very 12th month of that period, not paid to the 13th month.

[00:11:19] Speaker 06:
I think in her view, or her understanding, was that there was no set aside to be done, but there was no need to hold those checks because she was beyond the 12 month period.

[00:11:32] Speaker 02:
Well, the 12 month period, though, if you read this language, and I'm really just looking at it for the first time in light of the argument you're making, but it looks like what it's saying is

[00:11:41] Speaker 02:
that FERS disability benefit is always going to be reduced if you receive some social security benefit.

[00:11:47] Speaker 02:
And it is reduced by 100% of the benefit payable for 12 months.

[00:11:53] Speaker 02:
So she was on notice that regardless of where she was in the timing period, that there was going to be a reduction in her FERS benefit obligation and have an obligation to repay.

[00:12:03] Speaker 06:
But if it's full stop, what you read is where it stopped.

[00:12:07] Speaker 06:
So it doesn't say what happens beyond the 12 months.

[00:12:09] Speaker 02:
Yeah, but she knew she was going to have to repay something.

[00:12:12] Speaker 06:
But only if, in this case, would that be applicable for, if you just apply that rule, for August of 2012, one month.

[00:12:23] Speaker 06:
Not five months, one month.

[00:12:25] Speaker 06:
If you just applied literally what that says.

[00:12:27] Speaker 06:
And the payment she got from Social Security was the following month and the 13th month.

[00:12:33] Speaker 06:
Again, we think the evidence supports, the stand for her is just substantial evidence.

[00:12:37] Speaker 06:
We think there's substantial evidence to support the notion that her withholding, or not, or cashing, or negotiating the check, in that circumstance, the set-aside rule should not apply, and that the court should remand for analysis on financial hardship.

[00:12:57] Speaker 02:
OK.

[00:12:58] Speaker 02:
Can I just go on for the question?

[00:12:59] Speaker 02:
I'm sorry.

[00:13:02] Speaker 02:
I'm left a little unclear as to the state of the record with respect to the first.

[00:13:06] Speaker 02:
I take it OPM lost or otherwise didn't provide the 2013 financial hardship statement, correct?

[00:13:14] Speaker 02:
Yes.

[00:13:15] Speaker 02:
The board never got it.

[00:13:16] Speaker 02:
But they also asked her in 2014, and she never responded?

[00:13:22] Speaker 06:
Starting with basically the appeal.

[00:13:25] Speaker 06:
Once the appeal was granted at the board, she signed up for e-filing.

[00:13:30] Speaker 06:
So she wasn't getting notices of the board?

[00:13:32] Speaker 02:
But this was a communication, earlier communication, from OPM asking her for an updated, as I understand it, that was a request from OPM, which she didn't respond to.

[00:13:43] Speaker 02:
Not anything to do with the board.

[00:13:45] Speaker 05:
OK, that I'd have to check.

[00:13:47] Speaker 05:
Maybe on rebuttal I can get back to that.

[00:13:49] Speaker 01:
All right, we'll give you three minutes.

[00:13:50] Speaker 05:
All right, thank you.

[00:14:02] Speaker 00:
May it please the court?

[00:14:04] Speaker 02:
Can I quickly just clarify?

[00:14:06] Speaker 02:
Yes, Your Honor.

[00:14:07] Speaker 02:
Am I wrong about that in thinking that she got a second request from OPM, not from the board, for a hardship paper, an updated hardship, and she didn't respond?

[00:14:16] Speaker 00:
You are correct about that, Your Honor.

[00:14:17] Speaker 01:
And that was not electronic?

[00:14:19] Speaker 01:
That was by mail?

[00:14:20] Speaker 00:
That's before she takes her appeal.

[00:14:23] Speaker 00:
She gets a letter that says, and this is the question that Ms.

[00:14:28] Speaker 00:
Boyd poses as to was there a missing document.

[00:14:31] Speaker 00:
The same letter that says we have, we OPM have your 2013 document is the same letter that says, but that's out of date anyway, we need a new document.

[00:14:43] Speaker 00:
And we don't get that document.

[00:14:45] Speaker 00:
That document's not submitted.

[00:14:48] Speaker 01:
You're not going to get started at all.

[00:14:50] Speaker 01:
So you concede that the fault analysis was wrong?

[00:14:55] Speaker 00:
No, Your Honor.

[00:14:56] Speaker 00:
We do not concede that the fault analysis was wrong.

[00:14:58] Speaker 01:
Well, she did provide notice.

[00:14:59] Speaker 01:
Isn't that the end of the inquiry?

[00:15:01] Speaker 00:
Well, had she raised the fault, had she raised the prompt notification exception below, then you would move into the second step, the equity question.

[00:15:10] Speaker 01:
So she's got to know the regulation better than the board or OPM?

[00:15:15] Speaker 00:
No, Your Honor.

[00:15:17] Speaker 00:
Either way and and here in her briefing miss Boyd seems to argue both sides.

[00:15:22] Speaker 00:
She at times argues I'm without fault and at other times she argues Oh prompt notification under either one.

[00:15:28] Speaker 01:
However, she's not entitled to waiver and she's not entitled to waiver because Let's start I really want to fix on this the fault analysis was wrong Right.

[00:15:42] Speaker 01:
No, how can they say she was with fault?

[00:15:45] Speaker 01:
when there is the prompt notification regulation that says, if you promptly notify, you are not at fault, period.

[00:15:54] Speaker 00:
Because that's an exception.

[00:15:56] Speaker 00:
If we were to go down that line, and we can, then you'd go into the second part of the analysis.

[00:16:03] Speaker 00:
I certainly agree with that, absolutely.

[00:16:06] Speaker 01:
This is making me nervous, because rather than conceding that there's an error, you're making it seem like this is something that the board or OPM would regularly do, which makes me think maybe we need to remand and say do this over, because it was wrong.

[00:16:21] Speaker 01:
And to say that a pro se receiver of benefits is supposed to understand the regs better than OPM or the board is a little bit troubling.

[00:16:32] Speaker 00:
Well, no, and I'm not trying to suggest that.

[00:16:34] Speaker 00:
What I'm suggesting is under either prom, he'd get to the same place.

[00:16:38] Speaker 02:
Well, but it's important, as the presiding judge has just said, it's important that we not say, oh, well, it doesn't matter whether it's under A or B. It's important that we figure out whether it is, indeed, as a starter, under A and B. And it seems to me, as I read the OPM regulations, that fault, just as Judge O'Malley has said, fault is that you

[00:17:02] Speaker 02:
took the money, you didn't notify them right away.

[00:17:05] Speaker 02:
If you notified them right away, there's an exception to the fault requirement.

[00:17:11] Speaker 02:
End of that discussion.

[00:17:12] Speaker 02:
Then you move on to the equity and good conscience, and an entirely separate section of the regulations says the set-aside rule, if you don't comply with it, it disqualifies you from getting

[00:17:25] Speaker 02:
equity and good conscience, but that's not under fault, as I understand it.

[00:17:29] Speaker 02:
You're telling us, oh yes it is, and I'm not seeing it.

[00:17:33] Speaker 02:
Where in the regulations are you finding support for saying that the set-aside, failure to do the set-aside, is part of the fault analysis as opposed to the equity and good conscience?

[00:17:45] Speaker 00:
No, I apologize.

[00:17:46] Speaker 00:
I've obviously misapprehended the question.

[00:17:48] Speaker 00:
No, very clearly, the set aside is part of the equity and good conscience.

[00:17:52] Speaker 02:
And the AJ made a mistake then in saying that she failed at the fault stage, as opposed to having said, fine, she's fine at the fault stage because of the, that she gave notice that she received this extra payment, but should have said, but moving the equity and good conscience, that's where she falls down because of the set aside.

[00:18:15] Speaker 00:
Certainly, the administrative judge could have ruled that way and would have been correct.

[00:18:19] Speaker 02:
It should have ruled that way, right?

[00:18:20] Speaker 02:
Not just could.

[00:18:22] Speaker 02:
I'm bothered by the kind of might be, could be.

[00:18:29] Speaker 02:
This is pretty clear language.

[00:18:31] Speaker 02:
And if we're wrong about this, we should know it.

[00:18:34] Speaker 02:
And if you're wrong about it, you should really know it, because this comes up a lot.

[00:18:40] Speaker 02:
So if this is a question that falls under equity and good conscience, we ought to get that straight.

[00:18:45] Speaker 02:
And it looks to me like it does.

[00:18:47] Speaker 02:
Now, can you tell us straightforwardly it does or it doesn't?

[00:18:51] Speaker 02:
It does, Your Honor, it does.

[00:18:53] Speaker 02:
OK.

[00:18:53] Speaker 02:
And the AJ made a mistake then by putting it under fault.

[00:18:56] Speaker 00:
The AJ should have gone and done the analysis under equity and good conscience, Your Honor.

[00:19:01] Speaker 00:
The problem there that that raises for Ms.

[00:19:04] Speaker 00:
Boyd is the only argument she raises, both below and now with the assistance of counsel, is financial hardship.

[00:19:11] Speaker 00:
Financial hardship expressly cannot satisfy

[00:19:15] Speaker 00:
the equity and good conscience part of the test if the first part of the test is resolved because of prompt notification.

[00:19:23] Speaker 00:
The only way to satisfy the equity and good conscience, once you've given prompt notification, is through an error of the board.

[00:19:30] Speaker 00:
And the policy guidelines expressly call out that the error is an extreme error, such as delay of more than four years.

[00:19:38] Speaker 01:
I don't even understand what you just said.

[00:19:41] Speaker 01:
I thought her argument was that under equity and good conscience, putting aside

[00:19:45] Speaker 01:
the financial hardship, there was the question of whether or not she had been notified to set aside the checks.

[00:19:55] Speaker 00:
Well, no, that would go to the fault.

[00:19:56] Speaker 00:
But the fault question is, did you know you were getting a double payment?

[00:20:01] Speaker 00:
Under equity and good conscience, with the prompt notification exception, what the prompt notification is saying is, OK, we know you realized this, but you gave us notice.

[00:20:10] Speaker 01:
I don't think you've got this.

[00:20:11] Speaker 01:
I don't think you're reading the OPM guidelines correctly.

[00:20:15] Speaker 01:
We've got essentially three different questions.

[00:20:19] Speaker 01:
One is, was she at fault?

[00:20:21] Speaker 01:
No, she's not, because she gave a prompt notification.

[00:20:24] Speaker 01:
The next is, was she notified to do the set-aside?

[00:20:30] Speaker 01:
And then the third is the financial hardship.

[00:20:35] Speaker 00:
The problem with that reading, I think it's two questions.

[00:20:38] Speaker 00:
The question is fault.

[00:20:40] Speaker 02:
Now, are you disagreeing with Judge O'Malley's reading of the regulations?

[00:20:44] Speaker 02:
Because I thought, when you and I had a colloquy, that you were agreeing with my reading of the regulations.

[00:20:49] Speaker 02:
And my reading of the regulations is exactly the same as Judge O'Malley's.

[00:20:54] Speaker 00:
I am disagreeing that once you get into this second step, this equity in good conscience, that there is reason to think about, did the person act at fault at all?

[00:21:04] Speaker 00:
Did the person know this?

[00:21:05] Speaker 00:
You've stepped beyond that because the recipient's knowledge is under the first step.

[00:21:10] Speaker 00:
The whole point of the prompt notification exception is the recipient is saying, OK, I am aware I'm getting a double payment.

[00:21:16] Speaker 00:
I'm giving you notice that I'm getting a double payment.

[00:21:19] Speaker 00:
And she did that.

[00:21:20] Speaker 00:
And she did that.

[00:21:20] Speaker 02:
So she's out on a fault category.

[00:21:22] Speaker 00:
And so there's no need to go further into what her mind is.

[00:21:25] Speaker 00:
The question is, once she's out of that, can she get waiver?

[00:21:30] Speaker 00:
And she can't, because the only way to get waiver at that point, as is stated in the Jones case, for example,

[00:21:37] Speaker 00:
And as Your Honor was pointing out previously in the Maxwell case, the only way to get waiver then is this exceptional circumstance where OPM.

[00:21:50] Speaker 02:
OK, except I understand that if OPM sits on their rights for four years or something.

[00:21:56] Speaker 02:
But are you saying that the set-aside rule applies without regard to whether she has notice of the need to comply with the set-aside rule?

[00:22:05] Speaker 00:
I'm saying the set-aside rule, the whole point of the set-aside rule is it presumes the notice.

[00:22:10] Speaker 00:
That's the whole point of her giving notification.

[00:22:13] Speaker 00:
She's saying, I know I've got this double payment.

[00:22:16] Speaker 01:
If that's the case, then the only question that the board should have been looking at, or the AJ should have been looking at, is her financial hardship.

[00:22:24] Speaker 00:
No, because once you're under the set-aside rule, financial hardship, and this is expressly written in the policy guidelines, financial hardship is not

[00:22:33] Speaker 00:
sufficient to show inequity or show the inequity.

[00:22:38] Speaker 00:
The only thing under the set-aside rule that can justify waiver are these exceptional circumstances, specifically an error by OPM, such as this delay, and there's the opening for other exceptional circumstances.

[00:22:51] Speaker 02:
So it sounds like what you're saying is that when you get to the set-aside rule,

[00:22:54] Speaker 02:
That's an absolute rule.

[00:22:56] Speaker 02:
It doesn't require knowledge, should have known, notice, or anything else on her part.

[00:23:01] Speaker 02:
Even if the letter had had nothing about set-aside in it, she'd be in exactly the same position.

[00:23:08] Speaker 02:
Is that what you're saying?

[00:23:10] Speaker 02:
Is it what you're saying, yes or no?

[00:23:13] Speaker 00:
I think yes, Your Honor.

[00:23:14] Speaker 02:
Then what's the point of even looking at fault?

[00:23:16] Speaker 02:
Well, and why do we have all these MSPB cases talking about the need for notice, like Maxwell?

[00:23:23] Speaker 02:
Maxwell, you'd say Maxwell, that language about notice is unnecessary?

[00:23:28] Speaker 00:
Well, no, because you have, because if you're going, because there are two steps.

[00:23:32] Speaker 00:
The first step is fault.

[00:23:33] Speaker 00:
What we're saying is prompt notification says you got the notice, you got our letter, the Baldwin case, which is this court's decision, says the notice that was provided is sufficient.

[00:23:44] Speaker 00:
This notice is sufficient to put the person, make the person aware and put the person at fault if they haven't set aside the money.

[00:23:50] Speaker 00:
So the only question then

[00:23:52] Speaker 00:
is, is there exceptional circumstances?

[00:23:55] Speaker 00:
Notice, at that point, no longer matters because you- So what's the point of the fault exception?

[00:24:00] Speaker 01:
That the guidelines that say you are not at fault, and you're saying, but yeah, but you're still at fault because you still didn't set it aside.

[00:24:11] Speaker 01:
It makes no sense.

[00:24:12] Speaker 00:
Because in the case that OPM then takes too long or does something otherwise inequitable, makes some error to the person who's seeking the benefit,

[00:24:22] Speaker 00:
then there would be a reason to give waiver.

[00:24:23] Speaker 00:
The whole reason this situation exists is we're trying to get these retirement benefits to awardees as quickly as possible, knowing that they may have problems financially, knowing they need money, rather than saying, oh, well, we know you're going to get a double payment down the road, so we're just not going to pay anything.

[00:24:42] Speaker 00:
And you're just on your own until the social security benefit is resolved.

[00:24:47] Speaker 00:
So instead of doing that, the retirement benefit is given immediately.

[00:24:51] Speaker 00:
with the notice that says, when you get your Social Security, we're going to have to reduce your benefit.

[00:24:59] Speaker 00:
So set it aside.

[00:25:00] Speaker 00:
Don't pay anything.

[00:25:01] Speaker 00:
Don't use that money.

[00:25:02] Speaker 00:
You're going to have to repay from the first 12 months the benefit.

[00:25:05] Speaker 00:
But doesn't that presume that they got notice of, don't set it aside?

[00:25:10] Speaker 00:
Yes.

[00:25:11] Speaker 00:
But that goes back to the fault point and the exception under prompt notification.

[00:25:16] Speaker 00:
The prompt notification point is, you get the notice.

[00:25:18] Speaker 00:
The notice says, notify us.

[00:25:20] Speaker 02:
She did.

[00:25:22] Speaker 02:
There are two questions here, and we keep complaining.

[00:25:25] Speaker 02:
The first is, did she get notice that she was getting double payment?

[00:25:30] Speaker 02:
She did.

[00:25:31] Speaker 02:
Did she inform OPM that she was getting double payment?

[00:25:35] Speaker 02:
She did.

[00:25:35] Speaker 02:
The second question is, did she violate the set-aside rule?

[00:25:41] Speaker 02:
And if I understand what you're saying is,

[00:25:44] Speaker 02:
that she didn't have to get notice of her obligations under the set-aside rule because that rule applies automatically if she got notice that she was getting double payments.

[00:25:55] Speaker 02:
Is that your position?

[00:25:58] Speaker 02:
Am I clear?

[00:25:59] Speaker 02:
Maybe that wasn't very clear.

[00:26:00] Speaker 03:
Well, I think there's a double notice in there.

[00:26:04] Speaker 03:
I'm confused by the call.

[00:26:07] Speaker 00:
The Maxwell case and I believe the Harrison case

[00:26:11] Speaker 00:
talk about the idea of under fault there's notice.

[00:26:15] Speaker 00:
And then they actually then talk about this notice question, notice of the set-aside.

[00:26:19] Speaker 02:
OK.

[00:26:19] Speaker 02:
But your argument seems to be, if I understand you, that there isn't a notice requirement for the set-aside part of it, which is to say if the second half of a letter had never been sent to her, she'd be in exactly the same position.

[00:26:31] Speaker 02:
Is that your position?

[00:26:33] Speaker 00:
No.

[00:26:34] Speaker 00:
We can presume that what the exception says is the only way to get waiver is

[00:26:41] Speaker 00:
with these exceptional circumstances.

[00:26:43] Speaker 00:
So it doesn't matter.

[00:26:44] Speaker 00:
Her argument of, oh, I didn't understand.

[00:26:46] Speaker 01:
Does fault matter at all?

[00:26:47] Speaker 01:
So the whole fault analysis should just be out the window.

[00:26:49] Speaker 00:
Well, once you do the exception, the whole point of the prompt notification exception is to say, yeah, you were at fault, but you gave prompt notice, so we're not going to worry about fault.

[00:26:57] Speaker 00:
The only question is, is there a waiver?

[00:26:59] Speaker 01:
But you would never have to worry about fault if you are right.

[00:27:02] Speaker 01:
You would never have to worry about fault because you just say you shouldn't have gotten a second payment and as long as we didn't do something like wait for four years, then you have to pay it back.

[00:27:11] Speaker 01:
So forget about fault.

[00:27:14] Speaker 03:
And take the hypo where she doesn't give notice.

[00:27:18] Speaker 03:
She gets the letter and she doesn't do anything.

[00:27:22] Speaker 03:
Literally doesn't do anything.

[00:27:24] Speaker 01:
That would be the incentive, wouldn't it?

[00:27:26] Speaker 01:
To never give notice because then you're going to be in the same boat regardless.

[00:27:32] Speaker 01:
Well, you're creating a disincentive for people to tell you what's going on.

[00:27:37] Speaker 00:
I mean, the rules are set up so that the recipient, again, there are other ways that this could be set up, but the rules are set up so the recipient informs OPM of the double period.

[00:27:45] Speaker 00:
Does fault matter?

[00:27:46] Speaker 00:
Well, it would matter, for example, if a recipient didn't receive the notice at all, period, didn't get it.

[00:27:52] Speaker 00:
The recipient would validly say, I was not at fault.

[00:27:54] Speaker 00:
I didn't understand this.

[00:27:56] Speaker 00:
I didn't know.

[00:27:56] Speaker 01:
I didn't get notice.

[00:27:57] Speaker 01:
But then the second problem, though, you say doesn't matter.

[00:28:01] Speaker 01:
They would still have the problem.

[00:28:03] Speaker 00:
No, and then if they're not at fault, then the recipient could argue financial hardship and say, I didn't know about this.

[00:28:10] Speaker 00:
I didn't understand this.

[00:28:11] Speaker 00:
I never got your notice.

[00:28:13] Speaker 01:
But we know she's not at fault.

[00:28:15] Speaker 01:
This is why I'm so confused.

[00:28:17] Speaker 00:
But she's not at fault because of the prompt notification exception.

[00:28:20] Speaker 00:
Right.

[00:28:21] Speaker 00:
That says, we understand the elements of fault are here, but you gave prompt notice, which is your statement of you know you're getting these two payments.

[00:28:29] Speaker 01:
Right.

[00:28:30] Speaker 00:
And therefore, even though you are at fault, exception will go to the second part of the test.

[00:28:36] Speaker 00:
And if there are exceptional circumstances under the second part of the test.

[00:28:40] Speaker 00:
Can she argue financial hardship at that point?

[00:28:43] Speaker 00:
She cannot.

[00:28:43] Speaker 00:
The clear language of the policy guidelines says financial hardship cannot satisfy the second part of the test if you're relying on this prompt notification exception.

[00:28:53] Speaker 02:
Well, if there is no satisfaction of the set-aside rule,

[00:28:58] Speaker 02:
Which brings us back to the question of whether the set-aside rule has a notice requirement embedded in it.

[00:29:05] Speaker 02:
And I'm still not sure I understand whether you're saying it does or it doesn't.

[00:29:10] Speaker 02:
Which is another way of asking that question is to say, if she had never gotten the bold paragraph on the back of the June 11th letter, would she be in exactly the same position?

[00:29:23] Speaker 02:
And that's a yes or no question.

[00:29:24] Speaker 02:
I really am interested in whether your answer is yes or no.

[00:29:29] Speaker 02:
She got no notice of the set-aside requirement.

[00:29:34] Speaker 00:
I think if she had gotten no notice, she would not be in the same position.

[00:29:38] Speaker 00:
But I think it's because she would not be at fault.

[00:29:42] Speaker 04:
OK.

[00:29:43] Speaker 04:
You're saying she wouldn't have gotten a letter.

[00:29:46] Speaker 02:
Why would she not be at fault at that point?

[00:29:48] Speaker 02:
Since long ago during this argument, we established that once you have

[00:29:56] Speaker 02:
You've notified them that you got the double payment.

[00:29:59] Speaker 02:
You're out of the fault category.

[00:30:01] Speaker 02:
You're into equity and good conscience.

[00:30:03] Speaker 02:
Set-aside has to do with equity and good conscience.

[00:30:06] Speaker 02:
So fault is irrelevant at that point.

[00:30:09] Speaker 02:
Now, does set-aside rule carry with it an obligation of notice of her set-aside obligation?

[00:30:22] Speaker 02:
Does she have to be notified of the set-aside obligation?

[00:30:26] Speaker 02:
Which, once again, did she have to get the second half of that June 11th letter?

[00:30:30] Speaker 00:
I think, and I'm sorry to say something I know will not be satisfactory to your honor, but I think if you get half of the letter, you have an argument of, I am not at fault.

[00:30:41] Speaker 00:
I didn't understand.

[00:30:43] Speaker 00:
I can argue my fault point.

[00:30:46] Speaker 00:
The point we are making is, when you get to, if you're going to be under the set-aside,

[00:30:51] Speaker 00:
whether you understood it or not, the only way you can get waiver is if OPM made an error that constituted exceptional circumstances.

[00:31:03] Speaker 01:
Okay, thank you.

[00:31:06] Speaker 01:
Three minutes.

[00:31:10] Speaker 06:
Just a couple of points.

[00:31:11] Speaker 06:
So on the June 21st, 2000 letter, and there's a paragraph on the appendix of 92,

[00:31:19] Speaker 06:
where it says you have to notify OPM if you're getting Social Security benefits.

[00:31:23] Speaker 06:
So Mrs. Boyd, at the very least, notified the board, OPM, pursuant to this letter, pursuant to that paragraph, putting aside the bold text that we talked about earlier.

[00:31:36] Speaker 06:
As far as Maxwell, Maxwell, as you pointed out, Judge Bryson, has this language of setting aside the checks.

[00:31:44] Speaker 06:
But Maxwell nonetheless remanded back to the board

[00:31:48] Speaker 06:
to find a determination whether or not the retiree in that case knew or should have known there is an overpayment.

[00:31:56] Speaker 06:
So Maxwell is directly on point and consistent with the facts in this case.

[00:32:00] Speaker 06:
That's why we're asking this court to remand that despite the notice, it ought to be remanded and that the board ought to review the facts of the case to see if Mrs. Boyd knew or should have known there was overpayment.

[00:32:14] Speaker 06:
And that analysis is taken to her age

[00:32:17] Speaker 06:
her physical and mental capabilities, and the information that she was provided by OPM.

[00:32:22] Speaker 06:
Going back to my opening argument on that latter part of what she was provided by OPM, we think facially it's, on these facts, confusing.

[00:32:32] Speaker 06:
And it would support unsubstantial evidence that Mrs. Boyd did not believe that she was getting overpaid because the 12-month period and because of the way it was worded throughout her dialogue with the OPM.

[00:32:46] Speaker 04:
As far as the... That second argument wasn't raised, right?

[00:32:50] Speaker 06:
About the 12-month period.

[00:32:53] Speaker 06:
Again, not as that clearly.

[00:32:55] Speaker 06:
I think we said it was technical language, infusing language.

[00:32:58] Speaker 06:
We articulated it more here, obviously.

[00:33:00] Speaker 06:
As far as the triaging the law, we understand the board to understand, first you find fault on the waiver.

[00:33:10] Speaker 06:
If the prompt notification satisfied, no fault.

[00:33:14] Speaker 06:
The law is straight on that.

[00:33:16] Speaker 06:
OPM guidelines are straight on that, that's unequivocal.

[00:33:19] Speaker 06:
And the board below makes the set-aside rule, which falls to the second prong about equity and good conscience.

[00:33:26] Speaker 06:
Under the set-aside rule, which the board also didn't do, didn't do the evaluation of Mrs. Boyd's, to consider her age, her mental or physical capabilities.

[00:33:37] Speaker 04:
Do you agree there's a distinction with the board's distinction between no notice and no fault?

[00:33:42] Speaker 06:
No notice and no fault.

[00:33:44] Speaker 06:
I don't think the board made no distinction between notice and fault.

[00:33:48] Speaker 04:
I mean, they just... Well, the argument that was made was, if there's no notice, then we can look at financial hardship.

[00:33:57] Speaker 04:
But if there's no fault, then we move over to an analysis of equity and good conscience.

[00:34:05] Speaker 06:
No.

[00:34:06] Speaker 04:
So they draw a distinction that way.

[00:34:07] Speaker 06:
Yeah, I don't think that's the law.

[00:34:09] Speaker 06:
That's not the law.

[00:34:12] Speaker 06:
I mean, the law is clear in this.

[00:34:14] Speaker 06:
You do the fault analysis.

[00:34:16] Speaker 06:
And when the retiree or the annuit provides notice, no fault.

[00:34:23] Speaker 06:
If they don't provide notice, then you go through the factors and evaluate fault.

[00:34:32] Speaker 06:
If you get past that first step of fault and no fault, when in this case there's no fault, then you go to the next prong, which is the equineconconscious.

[00:34:39] Speaker 06:
The set-aside rule is applicable there.

[00:34:42] Speaker 06:
Does financial hardship apply as an analogy?

[00:34:46] Speaker 06:
No.

[00:34:46] Speaker 06:
No.

[00:34:47] Speaker 06:
It doesn't.

[00:34:49] Speaker 06:
The set-aside rule is if this court or the court below or the court below found that the set-aside rule was applicable, exceptional circumstances could get you from under that.

[00:35:03] Speaker 06:
And if it turns out that either the set-aside rule is not applicable or there is exceptional circumstances, then you go to the financial hardship when you finish the

[00:35:12] Speaker 06:
equity or good conscious analysis.

[00:35:15] Speaker 02:
Well now, what exactly is your position with respect to the requirements of the set-aside rule regarding notice?

[00:35:24] Speaker 06:
So, we rely on this... Does she have to have notice of the set-aside rule or is it... No, and I don't think she'd need... I don't think she needed the set-aside rule per se in front of her to say, you know, the law.

[00:35:36] Speaker 06:
I think she was provided some

[00:35:40] Speaker 01:
But she needs notice of the fact that they're telling her to do something.

[00:35:43] Speaker 06:
I don't think he was asking whether she needed to know the rule.

[00:35:50] Speaker 06:
Well, Maxwell stands for the proposition that even if you have that notice, you still have to do the analysis.

[00:35:55] Speaker 06:
So Maxwell and Harrison stand for the proposition that even if you provide the notice in which Mrs. Boyd arguably was provided in this case, you still have to do the analysis based on her age, physical, mental capabilities, and what OPM told her.

[00:36:09] Speaker 06:
It isn't a conclusion, if notice, then the set of rules applies.

[00:36:13] Speaker 06:
It's if, in this case, we're following Maxwell, that is a prerequisite for then doing the next part of the analysis.

[00:36:21] Speaker 01:
OK.

[00:36:22] Speaker 01:
Thank you.

[00:36:23] Speaker 01:
Thank you.

[00:36:23] Speaker 01:
And I thank counsel and Aiken Gump for their pro bono work service for your talent and to the court.

[00:36:29] Speaker 01:
Thank you.