Lawsuit presses Postal Service to pay interest on decades of death benefits
By Joe Davidson,
It seems only right to Pamela McKinney.
If you owe the federal government back taxes, you have to pay interest on top of the base amount.
So, Uncle Sam also should have to pay interest when the government owes individuals money.
That gets to the nut of her case against the U.S. Postal Service. If she wins, a lot of people could be surprised with a nice check.
To simplify a long and complicated story — the Postal Service paid death benefits to Postal Service survivors. In some cases, the benefits were paid late, as much as 25 years late, according to McKinney’s complaint.
“This suit seeks payment of interest for the decades that the proper benefits were withheld,” said the document, an amended class-action complaint, filed in U.S. District Court for the District of Columbia by McKinney’s attorneys.
The Postal Service, making several legal arguments, sought unsuccessfully to have her complaint thrown out, saying her claims are outside of the court’s jurisdiction and “should be dismissed.”
McKinney doesn’t have an estimate on how much the cash-strapped Postal Service could be on the hook for if it loses the case. “It’s potentially a pretty good amount of money for these beneficiaries,” said her attorney, David U. Fierst. “If this works, they’ll get a surprise check in the mail for a significant amount of money.”
Here’s the rub: There are about 1,600 people who might be in a position similar to McKinney’s, but the Postal Service can’t find 1,140 of them. Fierst is trying to locate a sample of 50 survivors to convince the judge that enough of the larger group can be found to include in the class-action case.
A USPS filing in the case says: “The Postal Service has previously and repeatedly made reasonable efforts over an extended period of time (1987-2010) to locate all beneficiaries.”
Finding the beneficiaries is not an easy task. In some cases, the people being sought are children or grandchildren of postal workers who died 30 years ago. In an e-mail, Fierst said he’d like to hear from “beneficiaries of USPS employees who died from 7/1981 to 7/1984, and who weren’t paid the COLA (cost of living adjustment) prior to March 2008.” His e-mail address is firstname.lastname@example.org.
McKinney’s story begins 31 years ago. Her father, Lepolion McKinney, was employed by the Postal Service when he died Jan. 31, 1982. He was shot, accidentally, during a fight that broke out well before a Sunday dawn at a party in Muskegon, Mich. Police found the gun, a .357 magnum, in a pile of snow outside the house. Pamela McKinney, a former federal employee who was 19 years old at the time, said the bullet nicked her father’s jugular vein. He bled to death. Had he received prompt medical attention, “I was told he could have survived that,” she said.
More than 27 years after his death, the Postal Service surprised McKinney with a letter, sent on July 23, 2008, saying she was due an additional death benefit payment. The next month, she received a check for $2,665.80, representing “the difference in the death benefit you had received . . . and the amount you would have received if applicable cost-of-living adjustments had been part of decedent’s basic pay,” says the lawsuit, quoting a letter from USPS. On May 22, 2009, USPS sent her a second check, for $1,333.33.
“This was represented to her as reflecting the COLA on a double benefit under her father’s life insurance policy, resulting from the fact that her father’s death was accidental,” her complaint says.
The problem, the document adds, is “USPS refused to pay interest on the delayed payments. . . . Ms. McKinney is entitled to interest covering the period that USPS withheld the COLA-adjusted benefits.”
How much interest?
“I’ve been trying to figure that out,” said McKinney, now unemployed.
Whatever the amount, she said she plans to use it to pay back taxes and the “quite a bit of interest” the IRS charges on late payments.
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.