Coast Guard Vets Sue Over Pensions, Say Pushed Out of Service

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By Elizabeth Olson

Derrik Magnuson joined the Coast Guard not long out of high school, rose in the seamen’s ranks and made the maritime service a career. He won commendations but was ousted before qualifying for full retirement at 30 years of service.

The same thing happened to Tonia Tippins and George Holloway, both of whom were long-time Coast Guard food service specialists also pushed out under a personnel review program.

Magnuson and others filed a class action suit in June in the U.S. Court of Federal Claims on behalf of themselves and some 400 colleagues.

They were forced aside unlawfully in 2013 and later to make way for younger people to take the same jobs, according to the complaint filed by Kirkland & Ellis.

They say the forced departures violated congressional protections that active duty personnel couldn’t be involuntarily separated from their jobs except under a specific set of rules—and those rules weren’t followed by the service’s hierarchy.

Magnuson was chief of port services in Kodiak, Alaska, for six years before the Coast Guard decided to retire him in 2014. His case was reviewed by a career services panel and he was given notice that he would be involuntarily separated.

“I never had any disciplinary issues, ever, so when I got the review letter I was completely floored,” he told Bloomberg Law.

Congressional Decree

Magnuson and others argue in their suit that Congress decreed more than 25 years ago that veterans who have served for 20 or more years couldn’t be forced out of the service unless the Coast Guard had a reduction in personnel or a formal finding of substandard performance or dereliction of duty.

The plaintiffs said the correct process wasn’t followed and that they were wrongly severed instead of being allowed to continue serving and receive additional retirement benefits and a higher pension.

The suit comes months after a new military retirement system went into effect this year. It’s a hybrid between a traditional pension and a defined contribution-type benefit, which is like a 401k. The change will not affect the Coast Guard class that brought suit.

The service didn’t respond to a request for comment on the class action from Bloomberg Law.

The plaintiffs seek credit for service, back pay, allowances such as housing, and reinstatement to active duty. If the court rules their favor, the result could be $70 million or more in relief, said Nathan Mammen, a Kirkland partner handling the case.

Driving Trucks, Stocking Shelves

Magnuson said he was fortunate to find a new job quickly. He’s the assistant master at Kodiak Harbor.
But others in the class, who also would have had a smaller percentage of their pay counted toward their Coast Guard pension, took a hit to their expected retirement package.

Various factors determine pension totals, but those serving 30 years receive pensions of approximately 75 percent of pay.

“The people who received lower percentages are the ones who are driving trucks now, working secretarial jobs and stocking shelves in the grocery stores,” Magnuson said.

He decided to join the lawsuit “because I definitely got the short end of the stick,” he said.

“My record was sterling. If I had been able to defend myself, I would have had a say in my own fate. I was never told why exactly they chose me. The retirement papers say ‘voluntarily retired.’”

The additional time credited toward his service would have meant around 25 percent or more in retirement pay for him, he said.

Screening Panels

Magnuson and the other named plaintiffs said the Coast Guard ignored the statutory safeguards and instituted career retention screening panels to review records of enlisted members with 20 years of service or more.

The panels didn’t select service members for involuntary departures according to the requirements of substandard performance or professional dereliction, Mammen, a former military prosecutor, argued in the legal documents.

The Coast Guard didn’t eliminate jobs, so there was no reduction in personnel that would have triggered the involuntary separations, he argued.

Prior to the class action, another Coast Guard member also forced to leave filed individual legal action. Marcus R. Lippman’s situation was reviewed by a Coast Guard career screening panel and he was involuntarily separated from duty in September 2014.

He argued that the service erred by not adhering to congressional strictures. Judge Lydia Griggsby of the Federal Claims court refused the government’s effort to dismiss the suit, and he ultimately settled.

Kirkland, which has donated legal assistance to nearly 170 veterans or veterans’ organizations over the past five years, including the National Veterans Legal Services Program and Texas Veterans Outdoors, filed the case pro bono.

The case is Tippins v. United States, Fed. Cl., 1:18-cv-00923.

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