Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-95-09537/USCOURTS-ca10-95-09537-0/pdf.json

Parties Involved:
Roth A. Gatewood
Petitioner
Railroad Retirement Board
Respondent

Document Text:

PUBLISH 

FILED· 

lloltfd State! Court or Appeali Tenth Circuit 

UNITED STATES COURT OF APPEALS JUL - 8 1996 

PATRICK FISHER 

Clerk 

TENTH CIRCUIT 

ROTH A. GATEWOOD, 

Petitioner, 

vs. No. 95-9537 

RAILROAD RETIREMENT BOARD, 

Respondent. 

APPEAL FROM THE RAILROAD RETIREMENT BOARD 

(Agency Docket No. A-509-34-5200) 

Kevin M. Fowler of Frieden, Haynes & Forbes, Topeka, Kansas (Lynn S. McCreary and 

John C. Frieden of Frieden, Haynes & Forbes, Topeka, Kansas, with him on the brief), for 

Petitioner. 

Thomas W. Sadler, Assistant General Counsel, Railroad Retirement Board (Catherine C. 

Cook, General Counsel, Stephen A. Bartholow, Deputy General Counsel, and Michael C. 

Litt, General Attorney, Railroad Retirement Board, with him on the brief), for 

Respondent. 

Before EBEL, KELLY and HENRY, Circuit Judges. 

KELLY, Circuit Judge. 

Petitioner Roth A. Gatewood appeals the decision of the Railroad Retirement 

Board ("Board"), which affirmed on reconsideration the Board's initial decision to reject 

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appellant's claim for railroad service and compensation. The Board rejected appellant's 

claim that his records be corrected to reflect his service as an employee of the Atchison, 

Topeka and Santa Fe Railway ("ATSF") for the periods January 1, 1980 through 

December 31, 1987 and August 1, 1989 through November 31, 1992. The Board denied 

Mr. Gatewood eleven years and four months of credited railroad service for these periods 

under the Railroad Retirement Act of 1974, 45 U.S.C. §§ 231-231v, dismissing his claim 

for the period January 1, 1980 through December 31, 1987 for untimely filing and 

denying his claim for the period August 1, 1989 through November 31, 1992 on the 

ground that Mr. Gatewood was an independent contractor rather than an employee. We 

affirm in part and reverse in part. 

Back~ound 

Mr. Gatewood was hired as an attorney by the ATSF law office in Topeka, Kansas 

in 1962. In 1968, Mr. Gatewood was promoted to the position of Assistant General 

Attorney of ATSF, and in 1973, he was promoted to General Attorney of ATSF. On 

January 1, 1980, the personnel of the ATSF law department in Topeka were transferred 

from the ATSF payroll to the payroll of Santa Fe Industries, Inc., the parent company of 

ATSF. Mr. Gatewood remained in the same office after this transfer, and he performed 

the same duties as an attorney on behalf of ATSF as he had performed while on the ATSF 

payroll. Later, in January 1984, Santa Fe Industries was merged into the Santa Fe 

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Southern Pacific Company, and the legal personnel in the Topeka office were again 

transferred, this time to the payroll of Santa Fe Southern Pacific. Again, Mr. Gatewood 

and the rest of the legal staff at the Topeka office continued to provide legal services to 

ATSF in the state of Kansas. In March 1988, ATSF reestablished its law department, and 

Mr. Gatewood was transferred back to the ATSF payroll where he remained until he 

retired from ATSF in July 1989. 

Following his retirement, Mr. Gatewood contracted to perform legal services for 

ATSF beginning on August 1, 1989. For the one-year term of the agreement, ATSF 

agreed to pay Mr. Gatewood $70 per hour subject to monthly billings, with a guaranteed 

minimum of 80 hours per month, for total guaranteed compensation of $67,200 for the 

contract period. The agreement stated that Mr. Gatewood would "perform these legal 

services as an independent contractor, i.e. an attorney in private practice, and not an 

employee of the Railway Company." Nevertheless, under the agreement, ATSF supplied 

Mr. Gatewood with secretarial service and reimbursed his reasonable travel expenses for 

trips away from Topeka. Moreover, while not provided under the agreement, ATSF 

supplied Mr. Gatewood with free office space during the period he worked under the 

contract. After the initial one-year contract term expired, Mr. Gatewood's arrangement 

with ATSF continued without a written extension through November 1992. 

While working under contract for ATSF from August 1, 1989 through November 

30, 1992, Mr. Gatewood operated as "of counsel" to a law firm in Wichita. Through this 

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arrangement, Mr. Gatewood was able to receive coverage under the firm's malpractice 

insurance policy, and the firm was able to create the appearance that it had an office in 

Topeka. However, throughout this period, Mr. Gatewood restricted his practice 

exclusively to matters involving the railway. He performed no services for the firm's 

other clients, he was not involved in the firm's operations, and he did not derive any 

income from the firm or share in the firm's expenses. 

On February 22, 1993, Mr. Gatewood filed a claim under the Railroad Retirement 

Act for railroad service and compensation. The Board subsequently denied Mr. 

Gatewood's claim with respect to the periods at issue in this appeal. The Board dismissed 

Mr. Gatewood's claim for credit for the months of January 1980 through December 1987 

on the ground that it was barred by the four-year statute of limitations in Section 9 of the 

Railroad Retirement Act, 45 U.S.C. § 231h. The Board denied Mr. Gatewood's claim for 

the months of August 1989 through November 1992 because it found he was an 

independent contractor and not a covered employee under the Railroad Retirement Act 

and the Railroad Unemployment Insurance Act. Subsequently, on Mr. Gatewood's 

motion for reconsideration, the Board affirmed its initial decision dismissing Mr. 

Gatewood's claims. This appeal followed. 

Discussion 

This court has jurisdiction to review decisions of the Railroad Retirement Board 

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under 45 U.S.C. § 231g. That section incorporates the standard of review under the 

Railroad Unemployment Insurance Act, which states that "[t]he findings of the Board as 

to the facts, if supported by evidence and in the absence of fraud, shall be conclusive." 45 

U.S.C. § 355(t). This court held long ago that the "judgments [of the Board] are final and 

conclusive if supported by substantial evidence and if free from arbitrary or capricious 

conduct." Utah Copper Co. v. Railroad Retirement Bd., 129 F.2d 358, 361 (lOth Cir.), 

cert. denied, 317 U.S. 687 (1942). Our view of this standard has not changed. Once we 

determine that the Board's factual findings are supported by substantial evidence and its 

decision is not based on an error of law, our task is complete. Accord Bowers v. Railroad 

Retirement Bd., 977 F.2d 1485, 1488 (D.C. Cir. 1992). 

I. 

We first address the issue of whether the Board's decision to reject Mr. 

Gatewood's claim to receive service credit for the eight years from January 1980 through 

December 1987 was based on substantial evidence and a proper interpretation of the 

applicable law. The Board claims that because Mr. Gatewood did not file his claim for 

railroad service until February 22, 1993, the four-year statute of limitations found in 

Section 9 of the Railroad Retirement Act, 45 U.S.C. § 231h, prevents Mr. Gatewood from 

compelling the Board to alter his service records for the months at issue. 

Section 9 of the Railroad Retirement Act requires employers under the Act to file 

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with the Board returns of compensation for their employees. 45 U.S.C. § 231h. The 

regulations promulgated under the Railroad Retirement Act require that employers must 

file these reports annually by the end of February of the year following that for which the 

report is made. 20 C.F.R. § 209.6(a). Covered employees may bring any errors in the 

Board's records to the attention of the Board "within four years after the day on which 

return of the compensation was required to be made;" after such time, the Board's records 

"shall be conclusive." 45 U.S.C. § 231h. After the four years expire, the Board is no 

longer required to alter its records in response to an employee complaint. Pawelczak v. 

United States, 931 F.2d 108, 110 (D.C. Cir. 1991). 

A. 

Mr. Gatewood argues primarily that the four-year statute of limitations does not 

apply in this case because 45 U.S.C. § 231h by its language only applies to restrict 

protests regarding compensation, and not to the issue of service records. See 45 U.S.C. § 

231h. We disagree. While service is not explicitly mentioned in the statute, the terms 

"service" and "compensation" are closely interrelated throughout the Railroad Retirement 

Act and the regulations promulgated thereunder. The statute defines "years of service" as 

"the number of years an individual as an employee shall have rendered service to one or 

more employers for compensation." 45 U.S.C. § 231(f)(l); see also 20 C.F.R. § 210.3(a) 

(defining a "reported month of service" as "any calendar month ... for which an 

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employee receives compensation for services performed"). Similarly, "compensation" is 

defined as "any form of money remuneration paid to an individual for services rendered 

as an employee." 45 U.S.C. § 231(h)(l). Mr. Gatewood seeks to persuade the court that 

service is defined in terms of"payment" and not "compensation," citing the definition of 

"service" found at 20 C.F.R. § 210.2. Such an interpretation ignores the statutory and 

regulatory provisions cited above which clearly demonstrate that service and 

compensation are interrelated concepts. 

Moreover, the regulations promulgated by the Board strongly suggest that contests 

regarding both service and compensation are subject to the four-year statute of limitations 

in 45 U.S.C. § 231h. While the statute only refers to "returns of compensation," it is clear 

from the regulations that the annual report provided by the employers is "an annual report 

of the creditable service and compensation of employees." 20 C.F.R. § 209.6(a) 

(emphasis added). This is obviously the same report that is discussed in 45 U.S.C. § 

231h, and we are convinced that the four-year statute of limitations applies to any 

contests regarding errors in the annual report. 

Mr. Gatewood also suggests that 20 C.F.R. § 210.7(g), which requires employers 

to retain original service records for five years after the due date of the report, "is 

certainly indicative of the Board's acknowledgment that contests relating to creditable 

railroad service are indeed not subject to the four year statute oflimitations." Aplt. Br. at 

11. What Mr. Gatewood obscures in his anaylsis is the fact that the five-year retention 

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requirement applies to both service and compensation records. 20 C.P.R. § 210.7(g). 

Thus, viewed in light of the language of the regulations, Mr. Gatewood's reasoning would 

suggest that even compensation records are not subject to the four-year limitations period, 

which we know is not the case. More importantly, the document retention policies 

required by the regulations need not correlate perfectly with the statutory limitations 

period. Cf. Pawelczak, 931 F .2d at 110 (the Board can reopen its records on its own 

initiative even after the four-year period). 

B. 

Mr. Gatewood argues in the alternative that even if§ 231h does apply to service, 

equitable principles compel the tolling of the statute. Mr. Gatewood first contends that, 

even though he is an attorney, his lack of knowledge of the provisions of the Railroad 

Retirement Act and the overall complexity of the statute warrant equitable tolling. Upon 

our review of the record, it is apparent that Mr. Gatewood was in fact aware that he had 

received no service credit under the Act and he was made aware of the procedures 

available to contest his service records. Moreover, even if Mr. Gatewood was not 

familiar with the intricacies of the Railroad Retirement Act, we are aware of no authority, 

and Mr. Gatewood has cited to none, which suggests that ignorance of the law should 

warrant equitable tolling of a statute of limitations. As the Supreme Court has stated: 

Federal courts have typically extended equitable relief only sparingly. We 

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have allowed equitable tolling in situations where the claimant has actively 

pursued his judicial remedies by filing a defective pleading during the 

statutory period, or where the complainant has been induced or tricked by 

his adversary's misconduct into allowing the filing deadline to pass. We 

have generally been much less forgiving in receiving late filings where the 

claimant failed to exercise due diligence in preserving his legal rights. 

Irwin v. Department ofVeterans Affairs, 498 U.S. 89, 96 (1990) (footnotes and citations 

omitted). 

Mr. Gatewood also asserts that the statute of limitations should be tolled because 

he faced "extraordinary circumstances" which prevented him from asserting his rights. 

Aplt. Br. at 17-18. Whether these "extraordinary circumstances" were Mr. Gatewood's 

lack of knowledge of the applicable law, as stated in his brief, or his concerns about 

asserting his claim in light of his employment situation, as reflected in the record, we are 

unpersuaded that they rise to the level required to warrant the extreme and limited remedy 

of equitable tolling. Mr. Gatewood was not misled in any way. We similarly find Mr. 

Gatewood's argument that the statute of limitations should be·tolled to effectuate the 

"humanitarian purpose" of the Railroad Retirement Act to be devoid of any merit. 

As a final point, Mr. Gatewood contends that we should order the Board to correct 

his service records beyond the limitations period because it is vested with the authority to 

do so. There is no doubt that the Board is vested with the authority to alter its records 

beyond the four-year period. However, this power in no way suggests that a failure to 

correct outdated records is an arbitrary act of discretion, as Mr. Gatewood suggests. In 

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Pawelczak, the D.C. Circuit recognized the Board's authority to reopen records beyond 

the limitations period but held: 

[T]he fact that the Board has the authority to reopen its records upon its 

own initiative does not mean that it can be required to do so. RRA section 

9 expressly protects the Board from the continuing administrative burden of 

reopening records upon employee request beyond a four-year period. 

Pawelczak, 931 F.2d at 110. We see no reason why this case warrants rejection of this 

clear rule; to order the Board to reopen Mr. Gatewood's service records would openly 

repudiate the Board's administrative authority. 

II. 

We tum next to the Board's denial of Mr. Gatewood's claim for creditable service 

from August 1989 through November 1992. The Board denied Mr. Gatewood's claim for 

service for this period because it found that he "was an independent contractor rather than 

an employee as defined by the [Railroad Retirement Act] and the [Railroad 

Unemployment Insurance Act]." Aplt. App. at 12. After reviewing the record, we find 

that the Board's determination that Mr. Gatewood was an independent contractor is not 

supported by substantial evidence, and we reverse. 

Under the Railroad Retirement Act, "employee" is defined as "any individual in 

the service of one or more employers for compensation." 45 U.S.C. § 231(b)(1)(i). The 

issue thus becomes whether Mr. Gatewood was "in the service of' ATSF. Under the Act: 

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An individual is in the service of an employer ... if--

(i)(A) he is subject to the continuing authority of the employer to supervise 

and direct the manner of rendition ofhis service, or (B) he is rendering 

professional or technical services and is integrated into the staff of the 

employer, or (C) he is rendering, on the property used in the employer's 

operations, personal services the rendition of which is integrated into the 

employer's operations; and 

(ii) he renders such service for compensation .... 

45 U.S.C. § 231(d)(l). The expansive language found in subsections (B) and (C) was 

added by amendment in 1946 for the purpose of bringing "a self-employed individual 

who was rendering service to a railroad under contract" within the definition of 

"employee" for purposes of the Act. Kelm v. Chicago. St. Paul. Minneapolis & Omaha 

Ry. Co., 206 F.2d 831, 835 (8th Cir. 1953). The legislative history of the 1946 

amendment explains how courts should determine if attorneys and other professionals are 

in fact "employees" for purposes of the Act: 

The realistic test of whether such personnel are employees is whether they are 

integrated into the employer's staff or are independent practitioners having the 

railroad as part of their clientele. The objective indicia bearing on that test would 

be whether they occupy railroad offices or maintain their own offices; whether 

they are paid a salary or are paid a fee or retainer; whether the railroad is entitled 

to make demands on them which the usual clientele of a professional man cannot 

make; whether they do only railroad work or carry on a substantial outside 

practice, etc. 

S. Rep. No. 1710, Part 2 (Supplemental Report), 79th Cong., 2d Sess. 6 (1946). 

Under this framework, it is clear from the record that Mr. Gatewood was indeed 

"in the service of' ATSF from August 1989 through November 1992. First, Mr. 

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Gatewood occupied ATSF offices during this period; in fact, he remained in the same 

office and used the same A TSF furniture, fixtures, and support staff as he had used while 

on the ATSF payroll. The record does not even suggest that Mr. Gatewood maintained 

any separate office space. Second, Mr. Gatewood's compensation arrangement with 

ATSF suggests an employer/employee relationship as well. While Mr. Gatewood was 

compensated on an hourly basis, the fact that ATSF guaranteed that he would receive a 

substantial minumum salary during the one-year term of the written agreement suggests 

that Mr. Gatewood was an employee under the Act. Third, while there is no direct 

evidence in the record of the degree of control ATSF had over the work performed by Mr. 

Gatewood, the fact that he worked exclusively for the railroad suggests, if anything, that 

he performed extensive work for ATSF as requested. Fourth, the record clearly reflects 

that Mr. Gatewood carried on no outside legal practice at all beyond his work for ATSF. 

It is evident from the record that Mr. Gatewood was acting·as an employee in the service 

of a qualified employer during the period from August 1989 through November 1992. 

The Board points to certain facts which it argues establish that Mr. Gatewood was 

not an employee as defined by the Act. Upon examination, however, the facts cited by 

the Board support no such determination. It is true that Mr. Gatewood's agreement with 

ATSF stated that he would act as an "independent contractor, i.e. an attorney in private 

practice, and not as an employee of the Railway Company." Aplt. App. at 4. However, 

merely to state that such a relationship exists does not necessarily make it so, especially in 

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light of the abundant record evidence to the contrary. The Board also points to the fact 

that Mr. Gatewood associated himself with a private law firm as "of counsel" as evidence 

that he was an employee of the law firm and not of ATSF. Once again, the record 

evidence is clear that Mr. Gatewood only associated himself with the firm as a matter of 

convenience. In practical terms, Mr. Gatewood had no working relationship with the 

firm; he derived no income from the firm, and he did no work for the firm's clients. 

During Mr. Gatewood's period of association with the firm, his working relationship with 

ATSF remained unchanged from the time when he had been directly on the ATSF 

payroll. We find that the Board's decision to deny Mr. Gatewood service for the period 

from August 1989 through November 1992 is not supported by substantial record 

evidence. 

Conclusion 

Based on the foregoing reasons, we AFFIRM the Board's decision to dismiss Mr. 

Gatewood's claim for service for the period from January 1980 through December 1987. 

We REVERSE the Board's denial ofMr. Gatewood's claim to be credited with service 

for the period from August 1989 through November 1992. 

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