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10/28/83 Jack C. Givens, On Behalf v. United States Railroad

October 28, 1983

SIMILARLY SITUATED, PETITIONER

v.

UNITED STATES RAILROAD RETIREMENT BOARD, RESPONDENT; WALTER A. WELLS, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY

SITUATED, PETITIONER

v.

UNITED STATES RAILROAD RETIREMENT BOARD, RESPONDENT; JAMES L. ROBBINS, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PETITIONER,

v.

UNITED

LORMAN, PETITIONER

v.

UNITED STATES RAILROAD RETIREMENT BOARD, RESPONDENT; CHARLES E. FORSETH, PETITIONER,

v.

UNITED STATES RAILROAD RETIREMENT BOARD, RESPONDENT



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

JACK C. GIVENS, on behalf of himself and all others

STATES RAILROAD RETIREMENT BOARD, RESPONDENT; ELMER F.

Nos. 82-2183, 82-2184, 82-2185, 82-2312, 82-2313 1983.CDC.281

Petition for Review of an Order of the Railroad Retirement Board.

APPELLATE PANEL:

Ginsburg and Scalia, Circuit Judges, and Van Pelt,* Senior District Judge, United States District Court for the District of Nebraska. Opinion for the Court filed by Senior District Judge Van Pelt.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE VAN PELT

Petitioners challenge the application of Section 3(h) (6) of the Railroad Retirement Act , 45 U.S.C. § 231b(h) (6), by the United States Railroad Retirement Board (the Board) to their individual cases. The Board's interpretation of Section 3(h) (6) resulted in the railroad retirement annuities of petitioners being reduced by the amount of spousal benefits they received under the Social Security Act . After careful analysis, we conclude that Section 3(h) (6) was properly applied and that the Board was correct in denying dual benefits to these petitioners.

Of the five petitioners, only one, Jack C. Givens, is clearly and properly before this court. In view of our disposition of the merits of his claims, we need not decide whether this court has jurisdiction to entertain the claims of the other petitioners. *fn1 Petitioner Givens raises the following issues on appeal:

1. Whether the refusal of the respondent Railroad Retirement Board to replace petitioners' Railroad Retirement benefits, reduced by the Board pursuant to 45 U.S.C. § 231b(m), violates section 3(h) of the Railroad Retirement Act, 45 U.S.C. § 231b(h).

2. Whether the refusal to replace these benefits is violative of equal protection and due process guarantees embodied in the due process clause of the Fifth Amendment.

3. Whether this case should proceed as a class action on behalf of all other men whose railroad benefits were offset by Social Security spousal benefits and not returned pursuant to 45 U.S.C. § 231b(h) (3) and (4), with petitioners Givens, Wells, and Robbins acting as class representatives. I. BACKGROUND

The Railroad Retirement Act of 1937, 49 Stat. 967, 45 U.S.C. § 228a et seq., established "a system of retirement and disability benefits for persons who pursued careers in the railroad industry." United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 168, 66 L. Ed. 2d 368, 101 S. Ct. 453 (1980). The 1937 Act allowed persons who worked for the requisite number of years in both the railroad industry and in outside employment covered by the SSA to receive benefits from both systems in excess of what they would have received had they worked exclusively within only one system. Fritz (supra) at 168 n.1.

These dual benefits put a significant strain on the financial well-being of the railroad retirement system. Congress attempted to meet this problem with the passage of the Railroad Retirement Act of 1974, 45 U.S.C. § 231 et seq., which was designed to eliminate future accruals of dual benefits. Fritz (supra) at 169. Section 3(m) of the Act, 45 U.S.C. § 231b(m),2 reduces railroad retirement benefits by the amount of benefits which the retiree receives under the SSA. Section 3(h) of the Act, 45 U.S.C. § 231b(h), preserves dual benefits for those railroad workers who were so entitled under the SSA "as in effect on December 31, 1974."

Here, we are primarily concerned with section 3(h) (3) and (4). These two subsections maintain dual benefits for those railroad workers who are entitled to spousal benefits under the SSA "as in effect on December 31, 1974." Therefore, under the new Act, a retiree's eligibility for spousal benefits depended on the application of the Social Security Act as it existed on December 31, 1974.

The problem we are addressing in this case begins with Califano v. Goldfarb, 430 U.S. 199, 51 L. Ed. 2d 270, 97 S. Ct. 1021 (1977), where the Supreme Court held that a provision of the SSA which required husbands, but not wives, to prove dependency on the insured spouse in order to receive spousal benefits, violated the Fifth Amendment. In order to meet the dictate of Goldfarb, the Board provided all railroad workers, both male and female, with spousal social security benefits. In most cases, the net effect upon a retiree's benefit package is nil because the worker's railroad retirement annuity is reduced, pursuant to section 231b(m), by an amount equal to the spousal benefit received. However, under Section 231b(h) (3) and (4), the Board does pay dual benefits to those railroad workers whose spouses were "permanently insured under the Social Security Act on December 31, 1974" and who satisfied the eligibility requirements "under the provisions of the Social Security Act as in effect on December 31, 1974." Thus, under the Board's interpretation of this language, the dependency provisions of the Social Security Act which were found to be constitutionally infirm in Goldfarb were to be used in order to determine which persons in this limited group of retirees would be eligible for dual benefits.

In Gebbie v. United States Railroad Retirement Board, 631 F.2d 512 (7th Cir. 1980), the United States Court of Appeals for the Seventh Circuit held that the Board had incorrectly interpreted Section 231b(h) (3) and (4) and that the dependency requirements found invalid in Goldfarb should not be applied as a basis for denying dual benefits. The Gebbie court declined to certify a class action and the decision immediately addressed only the claims of the three named petitioners. Id. at 516 n.9. The Board refused to apply the Gebbie decision to other railroad retirees.

Congress addressed the problems raised by Gebbie in the Omnibus Budget Reconciliation Act of 1981 , Public Law 97-35, 95 Stat. 357. Section 1118(e) (3) of OBRA added Section 3(h) (6) to the RRA, 45 U.S.C. § 231b(h) (6). Section 3(h) (6) provides: "No amount shall be payable to an individual under subdivisions (3) or (4) of this subsection unless the entitlement of such individual to such amount had been determined prior to August 13, 1981." (Emphasis supplied). The purpose and meaning of Section 3(h) (6) were explained by the Report of the Conference Committee on the OBRA which adopted Section 3(h) (6) from the Senate version of the OBRA:

The Senate amendment addressed the Gebbie issue by providing that no new windfalls would be payable in connection with annuities awarded after May, 1981, or the enactment date, to any employee based on a spouse's Social Security Act employment. The intent of the provision "unless entitlement of such individual to such amount had been determined prior [sic] the date of the enactment of this subdivision" is to cut off windfall awards in all ...


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