Beyond Poverty Guidelines: Knight v. OPM Establishes the “Surplus-Income” Test for In-Forma-Pauperis Eligibility

Introduction

Knight v. Office of Personnel Management (Knight v. OPM), decided by the United States Court of Appeals for the Tenth Circuit on 18 August 2025, addresses the threshold question of when a civil litigant may proceed in forma pauperis (“IFP”) under 28 U.S.C. § 1915. The plaintiff, Phyllis M. Knight—acting pro se—sued multiple federal agencies under a wide array of statutory schemes and simultaneously sought leave to proceed without pre-payment of the $402 filing fee.

The district court denied the IFP motion, reasoning that the plaintiff’s sworn financial affidavit showed a monthly surplus of roughly $430. On appeal, Ms. Knight argued that the court should have measured her eligibility against 125 % of the Federal Poverty Guidelines and, alternatively, that her claims were non-frivolous. The Tenth Circuit affirmed, articulating what this commentary dubs the “surplus-income” test: a litigant who reports disposable income sufficient to cover the filing fee cannot satisfy § 1915(a), irrespective of poverty-guideline metrics.

Summary of the Judgment

Jurisdiction: Collateral-order doctrine (Cohen v. Beneficial Industrial Loan Corp.) renders a denial of IFP immediately appealable.
Standard of Review: Abuse of discretion (Lister v. Dep’t of Treasury).
Holding: The district court did not abuse its discretion because Ms. Knight’s own affidavit reflected disposable income exceeding the filing fee; therefore, she failed to prove “financial inability.”
Key Clarification: Courts are not bound to apply Federal Poverty Guidelines or 8 C.F.R. § 106.3 in the § 1915 context; the operative inquiry is actual ability to pay.
Disposition: Affirmed; appellant’s separate IFP motion on appeal was nevertheless granted (the appellate court waived its own fees).

Analysis

Precedents Cited and Their Influence

Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949) – Established the collateral-order doctrine, permitting immediate appeal of non-final orders that conclusively decide a separate issue. Here, the denial of IFP is one such order.
Roberts v. U.S. Dist. Ct., 339 U.S. 844 (1950) – Early Supreme Court confirmation that IFP denials fall within Cohen.
Lister v. Dep’t of Treasury, 408 F.3d 1309 (10th Cir. 2005) – Supplies the two-part IFP framework (financial inability + non-frivolous claims) and the abuse-of-discretion standard. Knight relies heavily on Lister.
Howard v. U.S. Bureau of Prisons, 487 F.3d 808 (10th Cir. 2007) and Walters v. Wal-Mart Stores, 703 F.3d 1167 (10th Cir. 2013) – Reinforce liberal construction of pro se filings while refusing to assume the role of advocate.
Brewer v. City of Overland Park Police Dep’t, 24 F. App’x 977 (10th Cir. 2002) & Lay v. Oklahoma Dep’t of Corr., 746 F. App’x 777 (10th Cir. 2018) – Unpublished but persuasive; both upheld IFP denials where litigants’ finances showed adequate funds. The panel analogized these facts to Ms. Knight’s surplus.

Legal Reasoning

Statutory Text Controls. Section 1915(a) authorizes IFP status when the applicant “is unable to pay” the fees. The court interprets “unable” pragmatically: if the litigant admits a surplus that equals or exceeds the fee, she is not “unable.”
Rejection of Poverty-Guideline Formula. Ms. Knight cited 8 C.F.R. § 106.3—a regulation governing immigration benefit requests—to argue that falling below 125 % of the poverty line should compel an IFP grant. The court dismissed this argument, emphasizing that § 1915 contains no such poverty-percentage benchmark and that immigration-specific regulations do not bind Article III courts in civil-fee contexts.
Non-Frivolousness Insufficient Alone. Even assuming Ms. Knight’s remaining Administrative Procedure Act claim was non-frivolous, financial ability remains a separate, indispensable hurdle per Lister.
No Abuse of Discretion. Given an undisputed $430 monthly surplus, the district court’s decision was not arbitrary or premised on an erroneous view of the law. The panel thus affirmed.

Impact on Future Litigation

The decision crystalizes a practical, budget-based approach to IFP determinations across the Tenth Circuit and offers persuasive guidance elsewhere:

The “Surplus-Income” Test. Trial courts may deny IFP where sworn affidavits reveal disposable income sufficient to cover the one-time filing fee, irrespective of federal poverty metrics.
Uniformity & Efficiency. By rejecting external poverty-line formulas, the ruling promotes a consistent, fact-specific test and reduces ancillary litigation over guideline calculations.
Pro Se Gatekeeping. While safeguarding judicial access for the truly indigent, the opinion empowers courts to curtail fee waivers that strain dockets and subsidize litigants with adequate means.
Pleading Strategy. Litigants must now draft financial affidavits with precision; overstating income or leaving blanks (as Ms. Knight initially did) invites denial.
Split-Circuit Considerations. Some circuits informally reference the poverty guidelines. Knight may incite alignment or, conversely, a circuit split ripe for Supreme Court review.

Complex Concepts Simplified

In Forma Pauperis (IFP): Latin for “in the manner of a pauper”; allows indigent litigants to avoid upfront court costs.
Collateral-Order Doctrine: A narrow exception allowing immediate appeal of decisions that (1) conclusively decide an issue, (2) resolve important questions separate from the merits, and (3) would be effectively unreviewable after final judgment.
Abuse of Discretion Review: The appellate court asks whether the lower court’s decision was arbitrary, capricious, whimsical, or manifestly unreasonable.
Administrative Procedure Act (APA): Federal statute enabling judicial review of agency actions.
Freedom of Information Act (FOIA), Congressional Review Act, Tucker Act, False Claims Act: Various statutory frameworks implicated in Ms. Knight’s underlying lawsuit, though most were dismissed at screening.

Conclusion

Knight v. OPM brings welcome clarity to the financial prong of § 1915. By focusing on “actual surplus” rather than abstract poverty thresholds, the Tenth Circuit enshrines a common-sense, easily administrable rule: if your monthly balance sheet demonstrates enough cash to cover the filing fee, you are not entitled to proceed IFP—no matter how meager that surplus might appear relative to conventional poverty benchmarks. The opinion thereby tightens IFP gatekeeping, harmonizes district-court discretion, and underscores the importance of candor in financial affidavits. Future litigants and courts alike now have a definitive touchstone for evaluating IFP eligibility in the Tenth Circuit and, quite possibly, beyond.