Background
The plaintiffs are seventeen current or former members of the U.S. Air Force and Space Force who became ineligible for service under Executive Order 14,183, which restricted service by transgender individuals. Each plaintiff had between fifteen and eighteen years of service and, as an exception to policy, applied for and received approval for early retirement under the Temporary Early Retirement Authority (TERA). The Air Force issued formal retirement orders for each plaintiff with effective dates in late 2025.
However, after a change in leadership at the Assistant Secretary level, the Air Force rescinded the retirement orders just weeks before they were to take effect. The new leadership disapproved the TERA exceptions and offered the servicemembers Voluntary Separation Pay instead, a substantially smaller amount than the retirement pay and benefits they were expecting. The plaintiffs sued, arguing the rescission of their retirement orders was unlawful because it violated Air Force Instruction 36-3203, which permits rescission only in limited circumstances like fraud or manifest error, none of which the Air Force alleged.
The Court’s Holding
The government moved to dismiss the claims for lack of subject-matter jurisdiction, arguing that because the plaintiffs were still on active duty when the suit was filed, they were not entitled to “presently due money damages” as required by the Tucker Act. The government reasoned that a separate statute prevents servicemembers from receiving both active-duty pay and retirement pay for the same period. Therefore, the government argued, no money was “presently due,” and the court could not hear the case.
The Court of Federal Claims denied the government’s motion. Judge Kaplan held that the government’s argument improperly conflated the jurisdictional requirements with the merits of the plaintiffs’ claims. To establish jurisdiction, a plaintiff only needs to make a non-frivolous allegation that a money-mandating statute entitles them to presently due funds. Here, the plaintiffs validly claimed that because their retirement orders were illegally rescinded, their retirement pay became due on the effective dates of those orders. Whether they were ultimately entitled to that pay, and how it might be offset by active-duty pay received, was a question for the merits, not for a jurisdictional challenge. For plaintiffs whose retirement dates had not passed when the suit was filed, the court granted leave to file a supplemental complaint to cure the technical defect.
Key Takeaways
- The U.S. Court of Federal Claims has jurisdiction to hear military pay cases where servicemembers allege their approved retirement was illegally denied, even if they remain on active duty.
- To establish jurisdiction under the Tucker Act, a plaintiff must make a non-frivolous claim for presently due money damages under a money-mandating law; they do not have to prove they will win on the merits at the jurisdictional stage.
- A potential jurisdictional defect, such as filing a lawsuit before a claim has fully ripened, can be corrected with a supplemental pleading after the key events have occurred.
Why It Matters
This ruling is a significant procedural victory for transgender servicemembers affected by Executive Order 14,183, allowing their lawsuit seeking promised retirement benefits to proceed to the merits phase. The decision prevents the government from using a potential conflict between active-duty pay and retirement pay as a jurisdictional shield to dismiss such lawsuits at the outset.
The opinion clarifies the distinction between jurisdictional pleading requirements and the ultimate merits of a claim in the Court of Federal Claims. It reaffirms that as long as a servicemember presents a valid legal theory for why retirement pay is “presently due,” the court can hear the case, even if complex calculations or offsets are required later to determine the final amount owed.