OPM v. Richmond

In OPM v. Richmond (1990) 496 U.S. 414, the respondent, a welder employed by the federal government, left his job after being approved for disability retirement due to impaired eyesight. Under federal law, a disabled federal employee is entitled to an annuity only so long as his earning capacity remains below 80 percent of the rate of pay of the position occupied immediately before retirement. (5 U.S.C. 8337.) Following retirement, the respondent worked part time and had an opportunity to work overtime. He sought advice from a federal employee relations specialist, and was erroneously informed his annuity would not be jeopardized. As a result, the respondent lost disability pay for a period of six months. ( Richmond, at pp. 417-418.) The respondent contended the government should be estopped from denying benefits because of the erroneous advice of its agent. The United States Supreme Court disagreed. Relying primarily on the appropriations clause of the United States Constitution (art. I, 9, cl. 7), the federal high court concluded equitable estoppel cannot be applied against the government where to do so would result in the payment of benefits not authorized by Congress. ( Richmond, 496 U.S. at pp. 418, 426.) In Richmond, the federal high court noted its concern that a contrary ruling would violate the separation of powers by permitting executive branch employees to usurp congressional power: "Extended to its logical conclusion, operation of estoppel against the Government in the context of payment of money from the Treasury could in fact render the Appropriations Clause a nullity. If agents of the Executive were able, by their unauthorized oral or written statements to citizens, to obligate the Treasury for the payment of funds, the control over public funds that the Clause reposes in Congress in effect could be transferred to the Executive. If, for example, the President or Executive Branch officials were displeased with a new restriction on benefits imposed by Congress to ease burdens on the fisc . . . and sought to evade them, agency officials could advise citizens that the restrictions were inapplicable. Estoppel would give this advice the practical force of law, in violation of the Constitution." (Richmond, supra, 496 U.S. at p. 428.)