Gebbie v. United States Railroad Retirement Board
Opinion of the Court
The primary issue presented by these petitions for review of a decision of the Railroad Retirement Board
Three petitions have been consolidated for the purpose of our review. The three petitioners, Donald Gebbie, Marvin Stille, and John Holmes all began to receive Social Security spousal benefits after the Supreme Court’s Goldfarb decision. The Railroad Retirement benefits of each were reduced, however, by an amount corresponding to the Social Security spousal benefits. Furthermore, the Board informed each that delay in processing the reduction in Railroad Retirement benefits had resulted in the incorrect payment to the petitioners of dual benefits and that recoveries of the overpayments were necessary.
The Railroad Retirement Act of 1974 was designed to phase out the dual benefits scheme established in the predecessor Railroad Retirement Act of 1937. Under the dual benefit system established in the 1937 Act, individuals fully insured under the Railroad Retirement system and the Social Security system were entitled to benefits under both. The 1974 Act established a system to phase out this practice. Two sections of this Act set forth this phase-out plan, sections 3(m) and 3(h), 45 U.S.C. §§ 231b(m) and 231b(h). Only a brief summary of the statutory plan is necessary for an understanding of the issues: for purposes of calculating Railroad Retirement benefits, section 3(m)
Wright was a class action filed on behalf of applicants for Social Security husband’s benefits whose applications were rejected by the Secretary for not meeting the dependency requirements later declared unconstitutional in the Goldfarb line of decisions. The action sought direct review under 42 U.S.C. § 405(g) of the Secretary’s eligibility determination. The action in Wright was pending before the district court at the time Goldfarb was decided. After that decision the district court certified the class action and ordered the Secretary to pay the class members the benefits they would have received had their applications originally been granted. We affirmed the decision of the district court ordering benefits to relate back before the Goldfarb decision:
The Secretary’s decision denying an applicant benefits under 42 U.S.C. § 402(j)(l) [the retroactive relief provision of the Social Security Act quoted in the margin] solely on the basis of 42 U.S.C. § 402(c)(1)(C) [the unconstitutional dependency requirement] is no less erroneous or subject to correction in a proceeding under 42 U.S.C. § 405(g) than a decision under 42 U.S.C. § 402(c) generally. Reversal of the Secretary’s decision as to eligibility necessarily requires the award of “retroactive” relief. It is the date on which the application is filed, and not the date on which the claimant is ultimately determined to be eligible that triggers his entitlement to benefits under the Act. See, e. g., 42 U.S.C. § 402(c), (j)(l). Subject to certain exceptions that are irrelevant here, the language of [the retroactive relief] provision [42 U.S.C. § 402(j)(l)] is mandatory ... a claimant is entitled to “retroactive” benefits for a period of up to twelve months preceding his application.
Wright would appear to require us to eliminate the unconstitutional dependency provisions from the Social Security Act in determining the correctness of the Board’s determination of ineligibility. There is no dispute that the wives of the petitioners were fully insured for these Social Security benefits. Indeed, the petitioners are now receiving the Social Security benefits. The Board, however, argues that the “as in effect” language of section 3(h)(3) of the Act compels continued application of the invalid dependency requirements when the benefits in question are sought under the Railroad Retirement Act instead of the Social Security Act. We are not convinced that the effect of this language is as plain as the Board submits.
The basis for the Board’s proposed distinction between the Acts is the purpose of the Railroad Retirement Act of 1974 to restore the retirement fund to a financially sound position. See S.Rep. No. 93-1163, 93d Cong., 2d Sess. (1974) reprinted in [1974] U.S.Code Cong. & Admin.News, p. 5702. Particularly damaging to the integrity of the fund was the payment of dual benefits under both the Railroad Retirement system and Social Security. Id. at 5703-10. Congress therefore determined that the dual benefits system would have to be phased out, and provided for this in the 1974 Act.
In response to this argument, however, the petitioners emphasize that the financial difficulties prompted only a phasing out of dual benefits, and not their elimination. The Board’s argument thus cannot stand solely on the basis that it conserves funds by denying dual benefits. The fact of the statute indicates Congress’ intent that some workers continue to be entitled to these benefits. Congress decided to draw the line according to whether workers had satisfied the vesting requirements for benefits by the effective date of the Act:
“[A]n employee with “vested rights” to benefits under both the Railroad Retirement Act and the Social Security Act as of a specified date . . . would receive an additional benefit amount based on his employment prior to 1975. This amount is intended to preserve an eligible employee’s “right” to such dual benefits as had accrued prior to the effective date of the new Railroad Retirement Act.”
Id. at 5721.
The Board argues that this class of vested beneficiaries should be narrowed further in light of Congress’ intention that “a ‘windfall’ no longer ... be possible except insofar as the bill expressly preserves benefits for those beneficiaries . . . whose equities entitled them thereto.” (Emphasis added). Id. at 5710. According to the Board, the reference to “equities” limits the class of beneficiaries to those workers with “expectations” of benefits in 1974. The Board reasons that the petitioners could not have known in 1974 that the dependency provisions were unconstitutional and therefore that they never relied on the dual benefits they now seek.
The language of the Act does not make any distinction between classes of workers satisfying the work-related criteria for benefits based on their “expectation” of benefits. The Board, furthermore, has cited no legislative history that expressly makes this distinction according to expectations; rather, the Board merely asserts that
To the extent that Congress’ concern for equities reflects at all upon the otherwise clear classification of beneficiaries according to vesting, we are more inclined to think that the equities weigh in favor of workers like the petitioners who, with their wives, satisfied the service criteria for both systems and who would qualify for benefits except for the unconstitutional dependency requirement which has since been read out of the Social Security Act.
As summarized above, the Board has taken the position that the “as in effect” language sets forth the amount of the benefits, which they contend is equal to zero in this case. The petitioners agree that this language limits the amount of benefits, but add that the intended effect was to freeze the amount of Social Security component to be received by those eligible for dual benefits at 1974 levels. As the Senate Report explains, future increases in Social Security benefits would not be included in the dual benefit.
The Board applied an erroneous reading of the 1974 Act in reaching its decision. Accordingly, the decision of the Board denying petitioners’ dual benefits is reversed.
. This court has jurisdiction to review these decisions under 45 U.S.C. §§ 231g and 355(0-
. During the same month, the Supreme Court also affirmed summarily three district court decisions invalidating certain dependency provisions for Social Security husband’s benefits. Califano v. Silbowitz, 430 U.S. 924, 97 S.Ct. 1539, 51 L.Ed.2d 768 (1977), aff'g, 397 F.Supp. 862 (S.D.Fla. 1975); Califano v. Jablon, 430 U.S. 924, 97 S.Ct. 1539, 57 L.Ed.2d 768 (1977), aff’g, 399 F.Supp. 118 (D.Md. 1975); Califano v. Abbott, 430 U.S. 924, 97 S.Ct. 1540, 51 L.Ed.2d 768 (1977), aff’g, Civ. No. C-74-194 (N.D.Ohio Feb. 11, 1976).
. Section 3(m) of the Act provides:
The annuity of any individual under subsection (a) of this section for any month shall be reduced, but not below zero, by the amount of any monthly benefit payable to that individual for that month under title II of the Social Security Act.
45 U.S.C. § 231b(m).
. Marvin Stille, for example, worked in a job covered by Social Security until 1973, after his retirement from railroad service in 1966. Thus, he collected at least a portion of the dual benefits to which he claims entitlement, that is, primary Social Security benefits under section 3(h)(1).
. Section 3(h)(3) provides:
The amount of the annuity provided under subsections (a) through (d) of this section of an individual who (A) will have (i) rendered service as an employee to an employer, or as an employee representative, during the calendar year 1974, or (ii) had a current connection with the railroad industry on December 31, 1974, or at the time his annuity under section 231a(a)(l) of this title began to accrue, or (iii) completed twenty-five years of service prior to January 1, 1975, and (B) will have completed ten years of service prior to January 1, 1975, and is the wife, husband, widow, or widower of a person who will have been permanently insured under the Social Security Act on December 31, 1974, shall be increased by an amount equal to the smaller of (C) the wife’s, husband’s, widow’s, or widower’s insurance benefit to which such individual would have been entitled, upon attaining age 65 (or, if later, for January 1975), under the provisions of the Social Security Act as in effect on December 31, 1974, on the basis of such person’s wages and self-employment income derived from employment and self-employment under that Act prior to January 1, 1975, or (D) the primary insurance*514 amount to which such individual would have been entitled upon attaining age 65 (or, if later, for January 1975), under the provisions of the Social Security Act as in effect on December 31, 1974, on the basis of such individual’s wages and self-employment income derived from employment and self-employment under that Act prior to January 1, 1975, and on the basis of compensation derived from service as an employee after December 31, 1936, and prior to January 1, 1975, if such service as an employee had been included in the term “employment” as defined in that Act.
. The “retroactive relief” provision of the Social Security Act, 42 U.S.C. § 402(j)(l), in fact contains language that would seem to provide an analogous argument against applying Gold-farb to applications filed before that decision. Section 402(j)(l) provides in part:
An individual who would have been entitled to a benefit under subsections (a) to (g) or (h) of this section for any month añer August 1950 had he filed application therefor prior to the end of such month shall be entitled to such benefit for such month if he files application therefor prior to the end of the twelfth month immediately succeeding such month.
(Emphasis supplied.) See 603 F.2d at 672.
. The vesting requirements for the Social Security component of dual benefits are described as follows in the Act:
For purposes of this subchapter, a person shall be considered to be permanently insured under the Social Security Act on December 31, 1974, if he or she would be fully insured within the meaning of section 214(a) of that Act when he or she attains age 62 solely on the basis on his or her quarters of coverage under that Act acquired prior to January 1, 1975.
45 U.S.C. § 231(r).
The vesting requirements for the dual benefits provision appear in section 3(h)(3) quoted in note 5 supra.
. See id. at 5711, 5719 n.1, 5724.
. Before oral argument, the petitioners moved that this court certify this action, on appeal from the Board, as a class action because of an asserted lack of any forum for adjudication on a class-wide basis of their statutory claims. By an order dated October 17, 1979, this motion was denied. We have considered the petitioners’ arguments in favor of reconsideration of this ruling, and, although the Board has not assisted the court with briefs on this issue, we have concluded that this court is not an appropriate, forum for such an action.
Reference
- Full Case Name
- Donald P. GEBBIE Marvin A. Stille and John M. Holmes, on behalf of themselves and all others similarly situated v. UNITED STATES RAILROAD RETIREMENT BOARD
- Cited By
- 9 cases
- Status
- Published