Federal Circuit Orders En Banc Review of Loper Bright’s Impact on OPM Regulation

Last fall, Lesko v. United States—an appeal of a decision from the Court of Federal Claims about an Office of Personnel Management (“OPM”) regulation—was argued before a panel of the U.S. Court of Appeals for the Federal Circuit.  This week, however, following a sua sponte poll of the Circuit’s full bench, the court ordered the appeal to be heard en banc, directed the parties to file new briefs, and invited amicus involvement.  The Circuit has instructed the renewed briefing to address the specific impact of the Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo overruling the forty-year-old Chevron doctrine, which required federal courts to defer to federal agencies’ views on what the law is under certain circumstances.

The issue in Lesko is whether a nurse practitioner who worked at the Indian Health Service was erroneously denied enhanced pay, and therefore overtime, for working nights, Sundays, and holidays.  In March 2023, the Court of Federal Claims answered that question in the negative because the nurse practitioner’s work outside of regular hours was not officially scheduled “in writing,” as required by an OPM regulation.  The Lesko court reached that conclusion based on the Federal Circuit’s past decision in Doe v. United States, which found that a Federal Employees Pay Act provision authorizing overtime pay only when it’s “officially ordered or approved” was ambiguous.  As a result of the ambiguity, the Doe court granted Chevron deference to an OPM regulation requiring, among other things, written authorization as a condition of receiving overtime pay.

During the pendency of Ms. Lesko’s appeal, the legal landscape has shifted.  In May 2023, the Supreme Court granted cert in Loper Bright on the question of whether to overrule or clarify the Chevron-deference doctrine.  As Ms. Lesko’s opening brief noted, given that Doe turned on Chevron deference, her appeal, which similarly “involve[d] issues of Chevron deference to agency regulations,” would likely be impacted by the eventual outcome in Loper Bright.  Of course, that was an understatement, considering the sweep of the Supreme Court’s June 2024 decision:

Chevron is overruled.  Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.  Careful  attention to the judgment of the Executive Branch may help inform that inquiry.  And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it.  But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

Unsurprisingly, Ms. Lesko brought this development to the Federal Circuit’s attention in a FRAP 28(j) letter filed in September 2024.  Oral argument was then held in October before Chief Judge Moore, Judge Chen, and Judge Stoll.  But before the panel issued its opinion the full Federal Circuit decided sua sponte to hear the case en banc—that is, with all of its judges—and requested new briefs with a second argument set for September 2025. 

The Federal Circuit has requested briefing on the following questions:  

Specifically, the Federal Circuit has requested briefing on the following questions:  

• Considering Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), how should “officially ordered or approved” in 5 U.S.C. § 5542(a) be interpreted?

• Is this a case in which “the agency is authorized to exercise a degree of discretion” such that OPM has authority to adopt its writing requirement? Loper, 603 U.S. at 394.

• Is there a statutory provision (e.g., 5 U.S.C. §§ 1104, 5548) that provides such authority?

The Court also invited amicus participation to assist in resolving those questions.

The first question appears to go to what the “best reading” of the relevant statute is.  After all, as Loper Bright teaches, “statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning” that “is fixed at the time of enactment.”  And “[i]n the business of statutory interpretation, if it is not the best, it is not permissible.”

The second and third questions concern the broader issue of whether OPM’s overtime regulation imposing a writing requirement is beyond its power.  Put another way, did Congress delegate to OPM the power to decide what requirements must be met for overtime to be “officially ordered or approved”?  For context, the Federal Circuit’s order quotes from the following passage in  Loper Bright:

In a case involving an agency . . . the statute’s meaning may well be that the agency is authorized to exercise a degree of discretion.  Congress has often enacted such statutes.  For example, some statutes “expressly delegate[ ]” to an agency the authority to give meaning to a particular statutory term.  Others empower an agency to prescribe rules to “fill up the details” of a statutory scheme or to regulate subject to the limits imposed by a term or phrase that “leaves agencies with flexibility,” such as “appropriate” or “reasonable.”

When the best reading of a statute is that it delegates discretionary authority to an agency, the role of the reviewing court . . . [is] to independently interpret the statute and effectuate the will of Congress subject to constitutional limits.  The court fulfills that role by recognizing constitutional delegations, “fix[ing] the boundaries of [the] delegated authority,” and ensuring the agency has engaged in “‘reasoned decisionmaking’” within those boundaries[.]

It will be interesting to see how the full Federal Circuit thinks through these questions and what broader implications the ultimate decision will have given OPM’s government-wide responsibilities.