                     NOTE: This disposition is nonprecedential.


United States Court of Appeals for the Federal Circuit
                                    2009-3149


                             VENANCIO CABANAYAN,

                                                          Petitioner,

                                         v.

                    OFFICE OF PERSONNEL MANAGEMENT,

                                                          Respondent.


        Steven P. Cohn, Advocacy Center for Employment Law, of San Jose, California,
for petitioner.

       Tara K. Hogan, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for respondent. With her on
the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director,
and Reginald T. Blades, Jr., Assistant Director.

Appealed from: Merit Systems Protection Board
                      NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit
                                      2009-3149

                              VENANCIO CABANAYAN,

                                               Petitioner,

                                          v.

                     OFFICE OF PERSONNEL MANAGEMENT,

                                               Respondent.


Petition for review of the Merit Systems Protection Board in SF844E080686-I-1.

                          __________________________

                          DECIDED: March 12, 2010
                          __________________________


Before BRYSON, ARCHER, and PROST, Circuit Judges.

PROST, Circuit Judge.

      Petitioner Venancio Cabanayan (“Cabanayan”) appeals the final decision of the

Merit Systems Protection Board (“Board”) affirming the Office of Personnel

Management (“OPM”)’s denial of his application for disability retirement benefits.

Cabanayan v. Office of Pers. Mgmt., No. SF844E080686-I-1 (M.S.P.B. Dec. 23, 2008)

(“Cabanayan”).   Because the Board did not credit some of Cabanayan’s medical

evidence based on a legal standard we have since held to be erroneous, we vacate and

remand for reconsideration under the proper legal standard.

                                   BACKGROUND

      Cabanayan worked as a mail carrier for the U.S. Postal Service for more than
twenty years prior to his resignation on December 26, 2006. Cabanayan timely filed an

application for disability retirement under the Federal Employees Retirement System

(“FERS”), alleging a right shoulder injury as the basis for his disability. OPM denied

Cabanyan’s application on June 10, 2008 and, upon reconsideration, affirmed its earlier

decision on July 28, 2008.

      Cabanayan appealed OPM’s decision to the Board. In support of his appeal,

Cabanayan submitted medical records regarding his shoulder injury from April 2006

through June 2008, i.e., from before and after his December 26, 2006 resignation. At a

hearing before an administrative judge, Cabanayan presented four witnesses:

Cabanayan, his wife, Gregory Cheung, M.D. (“Dr. Cheung”), and Kevin Murray, M.D.

(“Dr. Murray”). Dr. Cheung explained that he examined Cabanayan for right shoulder

pain on five occasions, the first of which was three months after Cabanayan’s

retirement, and that his associate examined Cabanayan’s shoulder nine months before

Cabanayan’s retirement.      He testified that, in his opinion, Cabanayan was disabled

before retirement and remained disabled as of his last examination in June 2008. Dr.

Murray, an orthopedic surgeon, testified that he performed an arthroscopy and

debridement of Cabanayan’s right shoulder in June 2008, during which he found

degenerative change and fraying of the labrum, an inflamed subacromial bursa, and a

boney spur.     Dr. Murray testified that it was impossible to know whether these

conditions existed at the time of Cabanayan’s retirement, but that the conditions would,

at present, prevent him from performing the duties of a mail carrier.

      In an initial decision dated December 23, 2008, the administrative judge found

that Cabanayan was not eligible for disability retirement because he failed to establish




2009-3149                                   2
that, while working at the U.S. Postal Service, he became disabled due to a medical

condition causing deficient performance or that, absent such deficiency, his medical

condition was incompatible with either useful or efficient service. Cabanayan, slip op. at

11, 13. Cabanayan did not appeal this initial decision to the Board. The initial decision

therefore became the final decision of the Board.

      Cabanayan timely petitioned for review in this court.         We have jurisdiction

pursuant to 28 U.S.C. § 1295(a)(9).

                                      DISCUSSION

      Our review of disability retirement decisions under FERS is limited to determining

whether “there has been a substantial departure from important procedural rights, a

misconstruction of the governing legislation, or some like error ‘going to the heart of the

administrative determination.’” Lindahl v. Office of Pers. Mgmt., 470 U.S. 768, 791

(1985) (quoting Scroggins v. United States, 397 F.2d 295, 297 (Ct. Cl. 1968)); Anthony

v. Office of Pers. Mgmt., 58 F.3d 620, 622, 625-26 (Fed. Cir. 1995). We cannot review

the “factual underpinnings” of such decisions. Lindahl, 470 U.S. at 791. This limitation

prevents us from addressing challenges to “the Board’s factual determination as to

whether [a] Petitioner was disabled within the meaning of the FERS statute,” Trevan v.

Office of Pers. Mgmt., 69 F.3d 520, 523-24 (Fed. Cir. 1995), as well as assertions that

the Board wrongly weighed the evidence, Anthony, 58 F.3d at 626; see Davis v. Office

of Pers. Mgmt., 470 F.3d 1059, 1060-61 (Fed. Cir. 2006).

      Cabanayan’s main arguments are outside our limited scope of review.

Specifically, Cabanayan’s contention that he met his burden of proof with

“uncontroverted” evidence showing that he was disabled prior to retirement and that the




2009-3149                                   3
Board erred in reaching a contrary conclusion challenges the “factual underpinnings” of

the Board’s determination that he was not disabled within the meaning of the FERS

statute, which we lack authority to review. See Smith v. Office of Pers. Mgmt., 784 F.2d

397, 399-400 (Fed. Cir. 1986); see also Trevan, 69 F.3d at 523-24.           Similarly, we

cannot entertain Cabanayan’s fact-based argument that the Board improperly weighed

the evidence before it. See Davis, 470 F.3d at 1060-61; Anthony, 58 F.3d at 626.

       We now turn to Cabanayan’s argument that the Board, in discounting the

testimony and opinions of his witness, Dr. Cheung, misapplied the legal standard for

assessing medical evidence. In reviewing a disability retirement determination, we have

an obligation to assure that the Board applied the correct legal standards, Bruner v.

Office of Pers. Mgmt., 996 F.2d 290, 291 (Fed. Cir. 1993), and must address any

“critical legal errors” in the Board’s decision, Vanieken-Ryals v. Office of Pers. Mgmt.,

508 F.3d 1034, 1038 (Fed. Cir. 2007). Specifically, we have the authority “to determine

whether the Board gave no weight to evidence pursuant to a legal ‘error going to the

heart of the administrative determination’ or ‘a substantial departure from important

procedural rights.’” Reilly v. Office of Pers. Mgmt., 571 F.3d 1372, 1379 (Fed. Cir.

2009) (“Reilly II”) (quoting Scroggins, 397 F.2d 295). Cabanayan’s argument that the

Board committed legal error in failing to credit Dr. Cheung’s testimony is therefore within

our scope of review.

       In his analysis of Cabanayan’s post-retirement medical evidence, the

administrative judge cited to Reilly v. Office of Personnel Management, 108 M.S.P.R.

360 (2008) (“Reilly I”). Cabanayan, slip op. at 12 & n.6. Reilly I held that the Board will

consider a medical opinion rendered post-retirement only if the opinion is “based on pre-




2009-3149                                   4
retirement tests, observations, interviews, and medical examinations[] and address[es]

the employee’s pre-retirement condition.” Reilly II, 571 F.3d at 1380; see Reilly I, 108

M.S.P.R. at 363-65. On July 15, 2009, after the administrative judge issued his decision

denying Cabanayan’s appeal, this court vacated the Reilly I decision in Reilly II. Reilly

II, 571 F.3d at 1380-82. In Reilly II, we concluded that the Board committed legal error

in categorically rejecting medical evidence or opinions not based on pre-retirement tests

or examinations. Id.

       After citing to Reilly I, the administrative judge discounted Dr. Cheung’s opinion

that Cabanayan was disabled at the time he retired. Specifically, in the only reference

to Dr. Cheung’s testimony in the administrative judge’s analysis, the administrative

judge explained, “Dr. Cheung opined that [Cabanayan] was disabled as of December

26, 2006, but I find that Dr. Cheung’s opinion was based in significant part on Dr.

Murray’s surgical findings of a condition in 2008.” Cabanayan, slip op. at 12 & n.6. In

our view, the administrative judge did not give any weight to Dr. Cheung’s opinion solely

because it was based on a medical condition found in 2008, after Cabanayan had

retired. This reasoning is consistent with Reilly I’s standard for rejecting post-retirement

medical opinions, which we have since concluded is legally erroneous. See Reilly II,

571 F.3d at 1380. While we recognize that, as the Government contends, there may be

valid and permissible reasons for discounting Dr. Cheung’s opinion, the administrative

judge did not articulate any other reason for his failure to credit Dr. Cheung’s testimony.

Thus, we conclude that the administrative judge committed legal error by relying on

Reilly I’s improper legal standard, to which he expressly cited before addressing this

evidence. As we held in Reilly II, this legal error constitutes “a substantial departure




2009-3149                                    5
from important procedural rights and goes to the heart of the administrative

determination” and is therefore the type of error that the Supreme Court charged this

court to guard against in the disability retirement context. 571 F.3d at 1382-83 (citing

Vanieken-Ryals, 508 F.3d at 1043-44).

       Because the Board applied an erroneous legal standard in assessing

Cabanayan’s medical evidence, we vacate the Board’s decision and remand for

reconsideration under the correct legal standard. See Vanieken-Ryals, 508 F.3d at

1036. On remand, the Board should apply the standard detailed in our recent decision

in Reilly II.   Specifically, the Board must consider all competent medical evidence,

including post-retirement medical evidence, and may not reject such evidence solely

because it is based on post-retirement examinations or observations. Reilly II, 571 F.3d

at 1381-82. Of course, as we recognized in Reilly II, such post-retirement medical

evidence may be irrelevant or entitled to little weight based on the factual

circumstances, “such as where the later medical condition is attributable to some

incident that occurred after the period in question, or where there is a substantial lapse

of time and a lack of evidence connecting the prior condition to the more recent medical

evidence.” Id. at 1382. Based on this standard, the Board must, in the first instance,

consider the relevance and probative value of the proffered medical evidence.




2009-3149                                   6
