Alday v. Office of Personnel Management
Civil Action No. 2020-0194
| D.D.C. | Sep 21, 2021Background
- Alday was a FERS disability annuitant and enrolled in FEHB; FERS disability eligibility is lost if annual earnings reach 80% of prior pay.
- In 2016 Alday received wages, retirement contributions, and a $31,600 housing allowance; his total income exceeded the 80% threshold, making him ineligible after June 30, 2017.
- Alday mistakenly omitted the housing allowance from his self‑reported income; OPM learned of the discrepancy when matching SSA/IRS data in January 2018.
- OPM notified Alday of possible ineligibility in January 2018 and, after confirming it, retroactively terminated his FERS annuity and FEHB coverage effective June 30, 2017 (notice dated April 27, 2018).
- Consequences: cessation of annuity payments, an assessed overpayment later waived, thousands in uncovered medical bills, and loss of the statutory conversion window because notice came more than six months after the eligibility termination.
- Procedural history: OPM denied equitable relief; Alday sued in federal court claiming (1) arbitrary and capricious delay under the APA and (2) a Fifth Amendment procedural due process violation. The court denied Alday’s motion and granted OPM judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OPM's delayed notice of FEHB termination was arbitrary and capricious under the APA | Alday: OPM unreasonably delayed notifying him, depriving him of timely conversion rights | OPM: Delay resulted from Alday's misreporting; agency only learned via data match in Jan 2018 and reasonably explained the timing | Court: Not arbitrary or capricious; OPM offered a rational, record-supported explanation for the delay |
| Whether retroactive termination without timely notice violated procedural due process | Alday: He had a property interest in timely conversion and was deprived of the opportunity to convert without meaningful notice | OPM: Alday’s own failure to accurately report income caused the late discovery; due process does not require extra procedures for such mistakes | Court: No due process violation; Mathews balancing and precedent support that deprivation caused by noncompliance with procedural rules satisfies process concerns; Alday failed to identify constitutionally required alternative procedures |
Key Cases Cited
- Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (district court acts as an appellate tribunal in APA review)
- Dep't of Homeland Sec. v. Regents of the Univ. of California, 140 S. Ct. 1891 (2020) (describes narrow arbitrary‑and‑capricious standard)
- FCC v. Prometheus Radio Project, 141 S. Ct. 1150 (2021) (agency action is permissible when delay is reasonable and reasonably explained)
- Mingo Logan Coal Co. v. Env't Prot. Agency, 829 F.3d 710 (D.C. Cir. 2016) (where agency adequately explains action, court must uphold it)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (three‑factor test for procedural due process)
- Thomas v. Arn, 474 U.S. 140 (1985) (where deprivation results from an individual's failure to follow procedural rules, due process may be satisfied)
- Statewide Bonding, Inc. v. United States Dep't of Homeland Sec., 980 F.3d 109 (D.C. Cir. 2020) (plaintiff must plausibly identify what additional procedures are constitutionally required)