ESTATE OF ALBERT P. SCHULTZ, Bonnie Schultz, Representative v. John E. Potter, Postmaster General, United States Postal Service

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-4603
ESTATE OF ALBERT P. SCHULTZ,
Bonnie Schultz, Representative
Appellant
v.
JOHN E. POTTER, POSTMASTER GENERAL,
UNITED STATES POSTAL SERVICE
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2-05-cv-001169)
District Judge: Honorable Donetta W. Ambrose
Submitted under Third Circuit L.A.R. 34.1(a)
on September 9, 2009
Before: SCIRICA, Chief Judge and
RENDELL and ALDISERT, Circuit Judges
(Filed : October 20, 2009)
OPINION OF THE COURT

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ALDISERT, Circuit Judge.
The Estate of Albert P. Schultz (“Schultz”) appeals from the District Court’s
summary judgment determination of Schultz’s action to enforce a back-pay order of the
U.S. Merit Systems Protection Board (“MSPB”). After 17 years of protracted judicial and
administrative litigation, the parties have settled the merits of the underlying matter, a
disability discrimination claim by the late Mr. Schultz against the U.S. Postal Service, his
former employer. In this appeal, Schultz challenges the District Court’s computation of
the Postal Service’s back-pay (including benefits) and interest obligations under the Back
Pay Act, 5 U.S.C. § 5596, and urges that the Court erred in refusing to consider
arguments raised after Schultz’s original motion for summary judgment. We conclude
that the District Court for the Western District of Pennsylvania did not err in calculating
Schultz’s back pay award and applied the correct legal standards in making its
calculations. We do determine that the Court erred in one aspect of its interest calculation:
with respect to the Postal Service’s April 14, 2008 back-pay payment, statutory interest
should have accrued until “a date not more than 30 days before” the April 14, 2008
payment. 5 U.S.C. § 5596(b)(2)(B)(i). We further conclude that the District Court acted
within its discretion in choosing not to entertain arguments raised by Schultz more than a
year after the Court ruled on the parties’ cross-motions for summary judgment. We will
affirm in part and remand to the District Court for the limited purpose of calculating

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The District Court had jurisdiction over Schultz’s action to enforce the MSPB1
decision pursuant to 5 U.S.C. § 7703(b)(2). This Court dismissed an earlier appeal for
lack of subject matter jurisdiction. See Estate of Schultz v. Potter, 285 Fed. Appx. 886
(3d Cir. 2008). The District Court entered final judgment on September 16, 2008. Schultz
timely filed a motion to alter the judgment pursuant to Rule 59(e) of the Federal Rules of
Civil Procedure, which the District Court granted in part and denied in part on October
30, 2008. Schultz timely appealed on November 17, 2008. We have jurisdiction pursuant
to 28 U.S.C. § 1291.
We review the District Court’s grant of summary judgment de novo, using the
same standard the District Court should have applied. Union Pac. R.R. Co. v. Greentree
Transp. Trucking Co., 293 F.3d 120, 125 (3d Cir. 2002). Actions before the MSPB are
generally classified as either “pure” or “mixed.” “A pure case is when the employee
alleges harm from an improper non-discriminatory personnel decision. A mixed case, on
the other hand, is when the employee alleges such a personnel decision resulted in part
from prohibited discrimination.” Kean v. Stone, 966 F.2d 119, 121 (3d Cir. 1992).
Because Schultz alleged both an improper personnel action and discriminatory discharge,
this was a mixed case. In mixed cases, the MSPB’s decision concerning the
discrimination issue is reviewed de novo, whereas its decision concerning the civil
service issue is reviewed under a deferential standard. See 5 U.S.C. § 7703(c). We agree
with the District Court that because this case stems from Schultz’s discrimination claim, it
is subject to de novo review, although our ruling would be the same even under a
deferential review. We ordinarily review a district court’s back-pay calculations for abuse
of discretion. Durham Life Ins. Co v. Evans, 166 F.3d 139, 156 (3d Cir. 1999). But where
the question is whether the district court applied the correct legal standard in its back-pay
calculations, our review is plenary. Cf. Kean, 966 F.2d at 121. We review a district
court’s decision not to entertain new arguments not adequately raised in the parties’
summary judgment papers for abuse of discretion. Kiewit E. Co., Inc. v. L&R Constr.
Co., 44 F.3d 1194, 1204 (3d Cir. 1995).
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outstanding interest relating to the April 14, 2008 payment.1
I.
Because we write only for the parties, who are familiar with the facts, procedural
history and contentions presented, we truncate our discussion of this case’s overlong
history.

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Schultz alleged discrimination based on both physical and mental disabilities.2
The claims related to mental disabilities were rejected by the MSPB and EEOC. See
Schultz II, 78 M.S.P.R. at 164-166.
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Albert Schultz, a postal carrier hired in 1987, suffered from physical disabilities in
his wrists and hands as a consequence of a work-related injury. See Schultz v. U.S. Postal
Serv. (Schultz II), 78 M.S.P.R. 159, 161 (1998). He voluntarily took leave-without-pay
status on November 6, 1990. He also sought wage-replacement benefits under the Federal
Employees’ Compensation Act (“FECA”), 5 U.S.C. § 8101 et seq., which were granted
by the Department of Labor’s Office of Workers’ Compensation Programs (“OWCP”).
On December 4, 1991, Schultz asked to return to work and requested
accommodations for his injured hands and wrists. On February 24, 1992, the Postal
Service informed him that it was considering his request to return to work, but his request
was not granted. On November 24, 1992, the Postal Service discharged Schultz for failing
to meet attendance requirements. See Schultz v. U.S. Postal Serv. (Schultz I), 70
M.S.P.R. 633, 635 (1996). Schultz sought administrative relief from the MSPB and the
EEOC, alleging that the Postal Service’s actions constituted unlawful disability
discrimination.2
The MSPB determined that Schultz’s absence from work became a constructive
suspension in violation of the Rehabilitation Act, 29 U.S.C. § 791, on February 24, 1992,
when the Postal Service failed to accommodate his physical disability. See Schultz II, 78
M.S.P.R. at 164. The MSPB also determined that Schultz’s November 24, 1992 removal

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violated the Rehabilitation Act and ordered the Postal Service to “cancel [his] removal
and [reinstate] him effective November 24, 1992,” with the “appropriate amount” of back
pay, interest and benefits. See Schultz I, 70 M.S.P.R. at 642. Schultz was reinstated in
September 1995, although he never returned to work. He took disability retirement from
the Postal Service in November 1997, but later exercised his right to continue receiving
FECA/OWCP benefits beyond that date. The Postal Service offered him a “limited duty”
position on March 11, 1998, which he declined. Schultz died in October 2000.
The instant case arose from a petition filed by the Schultz Estate for enforcement
of the MSPB orders directing back payment for Schultz’s constructive suspension and
removal periods. On May 12, 2004, while the petition for enforcement was pending
before the MSPB, the parties entered into a settlement agreement resolving “all issues and
claims against the agency related to Albert Schultz’s employment,” with two exceptions:
(1) the proper amount of back pay due for the period after November 23, 1992 and (2) the
timeliness of Schultz’s enforcement action. (App. 166-167.) On September 13, 2004, an
Administrative Judge of the MSPB concluded that Schultz’s enforcement action was
untimely. The full Board adopted that decision as its final order on July 22, 2005. The
Schultz Estate filed this suit in the District Court on August 22, 2005, and the Postal
Service subsequently abandoned its timeliness defense. The sole dispute in the District
Court concerned the proper amount of back pay (including benefits) and interest due
Schultz for the period after his removal on November 24, 1992.

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II.
After discovery, Schultz moved for summary judgment, asking the District Court
to resolve three questions regarding the back-pay claim:
1. Is the value of fringe benefits payable, and if so, what is the monetary value
of fringe benefits payable?
2. On what date do back pay and benefits terminate?
3. If and when should workers’ compensation benefits offset back pay in the
interest computation under the Back Pay Act?
The Postal Service cross-moved for summary judgment on each point. (App. 4.)
On the issue of fringe benefits, the District Court held that the calculation of fringe
benefits must be specific to the employee and cannot be based on generalized figures. The
Court also held that the Postal Service was required to include health benefits in its
calculation of Schultz’s back pay, but was not required to include the value of
contributions to Schultz’s Thrift Savings Plan (“TSP”), as he never participated in the
TSP. On the issue of termination of back pay, the Court held that the termination date for
the calculation of back pay was June 12, 1996, the date that the MSPB ordered corrective
action. On the issue of offsets, the Court held that the Postal Service was entitled to offset
back pay by the amount of FECA/OWCP benefits received by Schultz, and that
FECA/OWPC benefits are to be offset prior to calculating back-pay interest. The Court’s
order was dated April 12, 2007 and was filed the next day. On April 14, 2008, the Postal
Service paid Schultz $103,769.81 in accordance with this order, calculating interest

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Although the District Court indicated its previous order was dated April 27, 2007,3
it appears the actual date of that order was April 12, 2007. (App. 109.)
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through April 12, 2007. (App. 1.09-1.10; App. 10-11; Appellant’s Br. 21; Appellee’s Br.
56.)
At a hearing on May 2, 2007, the District Court concluded, without opposition,
that no outstanding issues remained and ordered that the case “be marked closed.” (App.
2.) Schultz filed a notice of appeal on June 11, 2007. Oral argument was heard in this
Court, but on July 22, 2008, we dismissed the case for lack of jurisdiction and remanded
to the District Court for final disposition. See Estate of Schultz v. Potter, 285 Fed. Appx.
886 (3d Cir. 2008) (finding that the District Court had issued an “administrative close-out
order” that lacked finality).
On remand, the District Court specified that the total value of back pay due
Schultz was $99,760.65 ($47,246.69 in back pay and allowances plus $52,315.73 interest
plus $198.23 retirement deduction) and that the sum-certain value for health care benefits
was $32,196.51 (for the period of November 24, 1992 to November 1, 1995, plus interest
through the date of the previous District Court order). Accordingly, the Court held that3
the total value of back pay, benefits and interest owed to Schultz totaled $131,957.16, and
that because the Postal Service had already paid Schultz $103,769.81, the outstanding
balance was $28,187.35. On remand, Schultz also filed a “Motion for Clarification,”
which presented arguments and evidence not reflected in Schultz’s original motion for

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summary judgment or reply, and requested that the District Court consider all arguments
raised in its briefs before this Court. The District Court rejected these arguments as
untimely and entered final judgment on September 16, 2008.
Schultz timely filed a motion to alter the judgment, contending that (1) the District
Court had overlooked evidence and arguments in Schultz’s original motion for summary
judgment, (2) the parties had not agreed that no issues were outstanding and (3) Schultz
was entitled to benefits for the period of his constructive suspension from February 24,
1992 to November 23, 1992. The District Court rejected these contentions, but amended
its order to direct that “the ending date for computation of interest for payment not yet
made is not more than 30 days before the date on which payment is made.” (App. 1.04
(citing 5 U.S.C. § 5596(b)(2)(B)(i)).) The District Court issued its ruling on October 30,
2008. Schultz timely appealed on November 17, 2008.
III.
Schultz contends that the District Court erred in construing 5 U.S.C. §
5596(b)(2)(B)(i) to apply only to “payment not yet made,” and contends that the Court’s
construction prematurely ended the interest accrual period on the amount paid by the
Postal Service on April 14, 2008. Schultz argues that under 5 U.S.C. § 5596(b)(2)(B)(i),
interest on this amount should have accrued until a date “not more than 30 days before the
date on which payment [was] made.” He urges that the District Court erred in permitting
interest on the April 14, 2008 payment to accrue only through April 12, 2007, the date the

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We would have preferred if in its brief Appellant (1) had asserted its objections to4
the District Court’s interest calculation to the District Court, (2) had calculated the
amount of additional interest it now claims is due and shared that information with this
Court and (3) cited some authority to support its cursory, three-paragraph argument on
this issue. But because we remand to the District Court only on one narrow issue, we
deliberately overlook the derelictions of the Appellant in its brief.
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District Court initially ordered that amount to be paid.
We agree. The Back Pay Act directs that interest on back pay due under the Act
“shall be computed for the period beginning on the effective date of the withdrawal or
reduction involved and ending on a date not more than 30 days before the date on which
payment is made.” 5 U.S.C. § 5596(b)(2)(B)(i) (emphasis added); see also 5 C.F.R. §
550.806(b), (f). The District Court correctly amended its order to reflect this statutory
directive with regard to back-pay amounts not yet paid and should have done the same
with regard to the amount paid to Schultz on April 14, 2008. Though this case has already
overworked the judiciary, we remand to the District Court on one issue: the computation
of interest still owing on the back-pay amount paid on April 14, 2008, which accrued, as a
matter of law, “from the date of the withdrawal or reduction involved and ending on a
date not more than 30 days before” April 14, 2008. 5 U.S.C. § 5596(b)(2)(B)(i). We4
expect the active parties on remand to extend the maximum good faith effort to reach
agreement on this straightforward mathematical calculation without adding additional
burdens on the District Court.
IV.

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Schultz next contends that FECA/OWPC wage-replacement payments should have
been offset from the calculation after interest was calculated for outstanding back pay
rather than before interest was calculated. For the back-pay period between November 24,
1992 and June 12, 1996, Schultz received $77,390.89 in FECA/OWPC payments from
the Postal Service. Schultz contends that the Back Pay Act requires that interest be paid
on this $77,390.89 amount in addition to interest on the difference between that amount
and what he would have earned had he not been terminated. We disagree.
The Back Pay Act endeavors “to make workers whole who [have] suffered on
account of unfair labor practices.” Martin v. Dep’t of Air Force, 184 F.3d 1366, 1372
(Fed. Cir. 1999). To that end, the Act awards back pay and interest when “an appropriate
authority” directs the correction of an unjustified personnel action that deprived the
employee of pay. 5 C.F.R. §§ 550.805-550.806. A back-pay award restores to the
employee “an amount equal to all or any part of the pay, allowances, or differentials” he
or she would have received if the unjustified action had not occurred, offset by any (1)
“outside earnings undertaken to replace the employment” and (2) “erroneous payments
received from the government as a result of the unjustified or unwarranted personnel
action.” Id. § 550.805(e)(1)-(2); see 5 U.S.C. § 5596(b)(1)(A)(i). Interest on such an
award accrues from “the date or dates (usually one or more pay dates) on which the
employee would have received the pay, allowances, and differentials if the unjustified or
unwarranted personnel action had not occurred.” 5 C.F.R. § 550.806(a)(1). Significantly,

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Although administered by the Department of Labor, there is no collateral payment5
source under FECA and the Postal Service was the sole source of the actual payments
made.
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“outside earnings” are deducted from gross back pay before interest is calculated, while
“erroneous payments” are deducted after the calculation of interest. See id. § 550.806(c).
Schultz seeks to maximize interest on his back-pay award by characterizing
FECA/OWPC benefits as “erroneous payments.” We reject this characterization.
FECA/OWPC wage-replacement payments, a form of workers’ compensation, arise from
a separate statutory scheme – FECA – and do not fall into either the “outside earnings” or
“erroneous payments” categories of the Back Pay Act. Contrary to Schultz’s contention,5
the FECA/OWPC payments were not received by Schultz “as a result of the unjustified or
unwarranted personnel action,” but as compensation for his work-related injury.
Employees may recover under both FECA and the Rehabilitation Act, which address
different injuries: work-related injuries resulting in diminished working capacity and
discriminatory actions by employers, respectively. See Miller v. Bolger, 802 F.2d 660,
663, 665-667 (3d Cir. 1986). Accordingly, Schultz’s receipt of FECA/OWPC benefits is
hardly “erroneous.”
The Postal Service contends that FECA/OWCP benefits fall within the definition
of “pay, allowances, and differentials” Schultz had already received, and hence should be
deducted before computing interest. We agree. In assessing back pay due under the Back
Pay Act, the first step is to compute the “pay, allowances, and differentials” of which the

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To the extent that Schultz argues that he was deprived of the time value of some6
of his FECA/OWCP benefits because of delayed receipt of certain payments, the timing
of these payments is entrusted solely to the Department of Labor, 5 U.S.C. § 8128(a), and
is not subject to review by this Court. See 5 U.S.C. § 8128(b); McDougal-Saddler v.
Herman, 184 F.3d 207, 211-214 (3d Cir. 1999).
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employee was deprived due to the unwarranted personnel action. 5 U.S.C. §
5596(b)(1)(A)(i). The implementing regulations state that “[p]ay, allowances, and
differentials means pay, leave, and other monetary employment benefits to which an
employee is entitled by statute or regulation and which are payable by the employing
agency to an employee during periods of Federal employment.” 5 C.F.R. § 550.803.
FECA/OWCP wage-replacement payments are a monetary employment benefit, to which
an injured federal employee is entitled by statute, payable by the employing agency.
Accordingly, we determine that FECA/OWCP benefits qualify as “pay, allowances, and
differentials” under the Back Pay Act.
We conclude that the District Court properly computed interest after deducting the
$77,390.89 in FECA/OWCP benefits from Schultz’s gross back-pay award. It would be a
windfall to Schultz if the Postal Service were required to pay interest on monies it had
already paid him. Indeed, the Back Pay Act’s objective of remedying “unfair labor6
practices” would not be advanced by a decision awarding interest on payments already
received. See Martin, 184 F.3d at 1372.
V.
Without need for elaboration, we conclude that the District Court properly

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calculated Schultz’s fringe benefits. Additionally, the District Court acted within its
discretion to not entertain arguments and evidence not reflected in Schultz’s original
motion for summary judgment or reply, including Schultz’s attempt to extend the time
frame for calculating health benefits. We find Schultz’s remaining contentions untimely
and without merit.
******
We have considered all contentions raised by the parties and conclude that no
further discussion is necessary.
We will remand to the District Court for final computation of interest due on the
back-pay amount paid on April 14, 2008, in accordance with this opinion. We trust that
this straightforward mathematical calculation will mark the end of this interminable case.
On all other points the judgment of the District Court will be affirmed.

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