A federal court has denied an award of legal fees to a federal retiree who won a dispute with OPM in which he asserted he was given incorrect information about his annuity options, saying that OPM’s actions did not meet the test for requiring it to pay those costs.
Case No. 2020-1953 before the Court of Appeals for the Federal Circuit involved a retiree who sought to provide a survivor annuity for a spouse married after retirement but who was told he could not because such an annuity had been awarded to a former spouse. The former spouse later died but the retiree did not learn of it until three years afterward.
The retiree then sought to provide a survivor annuity for his current spouse but OPM denied it, saying that such a request must be made within two years of a marriage or within two years of a former spouse’s death, and that it could not waive that requirement.
On appeal to the MSPB, a hearing officer credited the testimony of the retiree and his spouse—backed by phone records—that the OPM representative they spoke with never mentioned a need to designate her for a survivor benefit within two years after their marriage. The hearing officer held that the deadline should be waived on grounds that OPM had “misadvised” him but denied his request for more than $80,000 in legal fees.
Appealing that part of the ruling to the court, the retiree argued that OPM’s actions met standards for a fees award, that they were “clearly without merit” and that OPM “knew or should have known” that it would not prevail, especially since it knew before the hearing that he and his wife would testify about the call.
The court though said that the outcome “rested on the credibility” of their testimony at the hearing and that OPM could not have known in advance how that would be judged. “As such, OPM was justified in thinking it had a meritorious position,” it said.