1264, 2002 WL 432681, at *2 (N.D. Ill. Mar. 18, 2002) (Leinenweber,
J.). The Betts/Bell interpretation of § 623(f) suggests a different
outcome, though I find those cases distinguishable. Finally, an
immediate appeal promises to speed up the litigation because it
defines the proper scope of information, if any, that the parties
may seek in discovery. A contrary decision would be dispositive,
and would obviate the need for discovery. Although I Deny the motion
for reconsideration, I Grant the motion to amend the order to

certify an immediate appeal under 28 U.S.C. § 1292(b).

ENED ORDER:

ene Z fuhl-
Elaine E. Bucklo

United States District Judge

Dated: May 2a, 2002

13


at issue in this case. Section 623(a) (1) of the ADEA prohibits the
failure or refusal to hire any individual, termination, or other
discrimination “with respect to {the] compensation, terms,
conditions, or privileges of employment, because of such
individual’s age.” At the time Betts was decided, § 623(f) (2)
provided an exemption from § 623(a) (1), and provided that it was
not unlawful to observe the terms of a bona fide benefit plan that
was not a subterfuge to evade the purposes of the ADEA, with the
proviso that no plan could require or permit age-based involuntary
retirement. Betts, 492 U.S. at 165-66. In Betts, the Court rejected
an administrative interpretation of “not a subterfuge” that put the
burden on the employer to demonstrate a cost-based justification
for differential treatment of older employees, id. at 170-75, then
set about the more difficult task of defining “subterfuge” for the
purposes of § 623(f) (2).

Noting that the purposes of the ADEA could not be separated
from its substantive provisions, the Court held that a plan enacted
after the enactment of the ADEA “cannot be a subterfuge to evade
the ADEA’s purpose of banning arbitrary age discrimination unless
it discriminates in a manner forbidden by the substantive
provisions of the Act.” Id. at 176. Section 623(a)(1) is the
primary enforcement mechanism of the ADEA, and the Court
acknowledged that “[t]he phrase ‘compensation, terms, conditions,

or privileges of employment’ in § [623](a)(1) can be read to


in the statute. By contrast, the exception in § 623(f) related only
to fringe benefits, but left undisturbed all of the non-fringe
aspects of the employment relationship that are protected by §
623(a), the “ADEA’s primary enforcement mechanism.” Betts, 492 U.S.
at 176. Section 623(j), however, exempts employers entirely from
the protections of § 623(a). That is, if an employee is mandatorily
retired, there is nothing left of the employment relationship to
protect. Thus the second example of a subterfuge in Bell could
never apply to a claim under § 623(j). This interpretation of §
623(j) is circular and self-referential, and would render the “not
a subterfuge” requirement empty language, because any mandatory
retirement ordinance that complied with the requirements of §
623(j) would, as a matter of law, not be a subterfuge. See Welsh v.
Boy Scouts of America, 993 F.2d 1267, 1272 (7th Cir. 1993) (“[A]
court should not construe a statute in a way that makes words or
phrases meaningless, redundant, or superfluous”).

There is still the retaliation example from Betts, and a
mandatory retirement ordinance that was enacted to retaliate
against an employee who had complained of age discrimination could
be a subterfuge under that example, but if that were the only
manner in which a plaintiff could demonstrate subterfuge, then the
remedies in § 623(d) and § 623(j) would be redundant. See In re
Merchants Grain, Inc., 93 F.3d 1347, 1354 (7th Cir. 1996) (Courts

should “construe statutes in the context of the entire statutory


forbidden by § [623] (a)(1).” Id. The Court concluded by stating
that the defendant did not have a duty to prove the absence of
subterfuge; instead, the existence of subterfuge was effectively an
element of the plaintiff’s prima facie case on which it bore the
burden of proof. Id. at 181

The Seventh Circuit in Bell recited these standards and
applied them to an employee challenge to a pension benefit plan
that discontinued pension contributions for employees above the age
of 65 even if those employees continued to work. Noting the two
examples of subterfuge from Betts, the court held that the
plaintiffs had not produced any evidence that would bring them
within the purview of the examples. 975 F.2d at 429. The court
rejected “statements and anecdotal evidence that some officials at
Purdue preferred younger faculty,” stating that, even if a jury
could infer that the cut in contributions to the pension plan was
intended to weed out older employees, “the defendants cannot be
liable for their motives if their conduct has not evaded the ADEA’s
prohibitions.” Id. With respect to the second Betts example, the
court noted that the hike in fringe benefits to younger employees
did not violate the ADEA, it was the underlying wage-cut that it
camouflaged that did violate the ADEA. Id. In that regard, the
plaintiffs had “offered no evidence that the fringe benefit cut in
this case is anything more than meets the eye--an age differential

in fringe benefits which is permitted under the ADEA.” Id. Because


encompass employee benefit plans of the type covered by §
{623] (£) (2),” but it rejected this interpretation because it “would
in effect render the § [623] (f) (2) exemption nugatory with respect
to post-Act plans. Any benefit plan that by its terms mandated
discrimination against older workers would also be facially
irreconcilable with the prohibitions in § [623]{(a)(1) and,
therefore, with the purposes of the Act itself.” Id. at 177.
Thus, in order to give effect to both § 623(a)(1) and §
623(f) (2), the Court concluded that § 623(f)2) “exempt[s] the
provisions of a bona fide benefit plan from the purview of the ADEA
so long as the plan is not a method of discriminating in other,
non-fringe-benefit aspects of the employment relationship.” Id.
After considering the legislative history, the Court concluded that
“this result permits employers wide latitude in structuring
employee benefit plans, [but] it does not render the ‘not a
subterfuge’ proviso a dead letter.” Id. at 180. It gave two
examples of possible actionable subterfuges: (1) “adopt{ing] a
(fringe benefits] plan provision formulated to retaliate against
an employee” who had “participated in the filing of any age-
discrimination complaints of litigation” in violation of § 623(d),
which prohibits retaliation; and (2) “an employer’s decision to
reduce salaries for all employees while substantially increasing
benefits for younger workers,” i.e., “utilizing [the] benefits plan

as a subterfuge for age-based discrimination in wages, an activity


upon” case law interpreting § 623(f), and that the “body of law
{construing § 623(f)] should properly be consulted to give meaning
to the term ‘subterfuge’ as it appears in § [623](j)”). This case
presents the question of the logical limits of the application of
judicial interpretations of § 623(f) to § 623(j).

There is some consistency between the City’s interpretation
here and the Betts/Bell interpretation. For example, the City
argued in the reply to its original motion that construing
“subterfuge” to mean that any discharge on the basis of age is a
subterfuge to evade the purposes of the ADEA because it violates §
623(a) (1) would eviscerate the exception in § 623(j), which says
that mandatory retirement on the basis of age is legal. The Supreme
Court rejected a similar interpretation of subterfuge in the
context of § 623(f). Betts, 492 U.S. at 177. However, the Supreme
Court noted specifically that its interpretation did “not render
the ‘not a subterfuge’ proviso a dead letter.” Id. at 180.

However, the City’s interpretation, which is essentially an
extension of the Betts/Bell interpretation of § 623(f), would
render the “not a subterfuge” provision of § 623(j), if not dead,
at least moribund. An interpretation that requires a violation of
the timing requirements in § 623(j) (1) in order to find that the
challenged action is a subterfuge under § 623(j) (2) collapses the
two inquiries. This circular reading of “not a subterfuge” in §

623(j) (2) would provide no protection that is not found elsewhere


Minute Order Form (06/97)

so United States District Court, Northern District of Illinois
Name of Assigned Judge Elaine E. Bucklo Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 01 C 840 DATE 5/22/2002
CASE Drnek vs. City of Chicago
TITLE

MOTION:

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

DOCKET ENTRY:

Section 1292 (b).

(1)

{For further detail see order attached to the original minute order.]

ql) Oo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(6D) Oo Answer brief to motion due . Reply to answer brief due.

(4) im) Ruling/Hearing on __setfor_ at.

(5) oO Status hearing[held/continued to] [set for/re-set for] on set for at

(6) a Pretrial conference[held/continued to] [set for/re-set for] on setfor_ ss at_

(7) 0 Trial[set for/re-set for]on at.

(8) o [Bench/Jury trial] [Hearing] held/continued to at

(9) Q This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) O General Rule21 OOFRCP4I(a)(1) [© FRCP41(a)(2).

co) =i [Other docket entry] | Enter Memorandum Opinion and Order denying defendant’s motion to

reconsider and granting its motion to amend the order to certify an immediate appeal under 28 U.S.C.

No notices required.

Y | Notices mailed by judge’s staff.

Notified counsel by telephone,

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
doputy’s
initials

MPJ

No notices required, advised in open court.

Document

‘ ‘Number

umber of notices

we received in, {23

Datei receiy
contra Clerk's Office

5-401

doocketing Ape 4gitials

$/2212002

date mailed notice

MPs

mailing deputy initials



II. Motion to Certify an Interlocutory Appeal

The denial of a motion to dismiss is not a “final decision”
from which an immediate appeal is available under 28 U.S.C. § 1291.
Cherry v. University of Wisc. Sys. Bd. of Regents, 265 F.3d 541,
546 (7th Cir. 2001). However, § 1292(b) provides for interlocutory
appeal of certain otherwise non-appealable orders. There are four
statutory requirements: “there must be a question of law, it must
be controlling, it must be contestable, and its resolution must
promise to speed up the litigation.” Ahrenholz v. Board of Trustees
of Univ. of Tll., 219 F.3d 674, 675 (7th Cir. 2000) (emphases in
original). All four criteria must be satisfied before I may certify
an order for immediate appeal. Id.

The City asks me to certify the following question: whether
allegedly illicit motives on the part of individual legislators and
municipal officials for enacting a retirement plan that mandatorily
retires police and fire personnel at age 63 and results in their
replacement with younger workers can demonstrate subterfuge under
section 623(j) of the ADEA. So framed, this is not a controlling
question, because it is too early in the lawsuit to determine that
this is the only type of evidence of subterfuge that the plaintiffs
could discover. I ordered the plaintiffs to come forward with any
facts, consistent with Fed. Rule Civ. P. 11, to support their
allegations of subterfuge in order to determine whether this case

was distinguishable from Kopec v. City of Elmhurst, 193 F.3d 894

11


scheme and avoid rendering statutory provisions ambiguous,
extraneous, or redundant.”). The Supreme Court stated in Betts that
its examples were “not exhaustive, but suffice to illustrate the
not-insignificant protections provided to older employees by the
subterfuge proviso in the § [623](f)(2) exemption.” 492 U.S. at
180. Under a similar interpretation of § 623(j), however, the
subterfuge provision provides no protection that is not already
provided elsewhere in the ADEA, and would be rendered utterly
meaningless.

It was for this reason that I held that evidence of subjective
intent to discriminate on the basis of age was relevant to the
question of subterfuge under § 623(j). Section 623(j) only applies
if a mandatory retirement plan both meets the age requirements in
S$ (j)(1) and is not a subterfuge under § (3) (2). The City’s
interpretation based on Bell, that facial compliance with (3) (1
precludes me from looking elsewhere for evidence of subterfuge,
would eviscerate the requirement that the plan not be a subterfuge.
Therefore, I decline to apply the reasoning of Beli under § 623(f)
to this case under § 623(j). Bell does not address Pacific Gas, or
the reasons that I gave for distinguishing it and considering
potential subjective proof of subterfuge, so it is not a basis for
reconsideration of the narrow issue presented by the City in its
motion. However, I will consider separately the propriety of

certifying an interlocutory appeal under 28 U.S.C. § 1292(b).

10


there was no extrinsic proof of a violation of another substantive
provision outside the scope of the exception, the court declined to
find subterfuge even in the face of evidence of discriminatory
animus.

The City argues that the Seventh Circuit’s language and
reasoning in Bell precludes the plaintiffs in this case from
relying on evidence of discriminatory motives of individual City
officials to establish subterfuge. The City asks me to follow Bell
and hold that, because there is no evidence of a violation of the
age limits in § 623(j) (1), there can be no subterfuge. They argue
that the mandatory retirement ordinance cannot be a subterfuge as
a matter of law, regardless of evidence of intent to discriminate
on the basis of age, because § 623(}) makes discriminatory age-
based retirement for public safety officials legal. The City argues
that an extension of Betts and Bell to § 623(j) (2) means that any
intent to discriminate cannot make facially lawful actions
unlawful if those actions fall within the exception in § 623(3) (1).

Cases construing § 623(j) have by and large adopted the Betts
definition of “subterfuge” as a “scheme, plan, stratagem, or
artifice of evasion.” See, e.g., Glennon v. Village of South
Barrington, No. 00 C 1264, 2000 WL 1230494, at *3 (N.D. Ill. Aug.
25, 2000). See also Knight v. Georgia, 992 F.2d 1541, 1545-46 (lith
Cir. 1993) (holding that, because previous § 623(f) and current §

623(j) both contain term “subterfuge,” it was “appropriate to draw


promotional opportunities for younger employees. The City argued,
then and now, that I could not look beyond the face of the
ordinance to determine whether it was a subterfuge to evade the
purposes of the ADEA. I rejected the City’s reliance on Pacific Gas
Electric Co. v. State Energy Resources Conservation and Development
Commission, 461 U.S. 190 (1983), for the proposition that inquiry
into the motives of the legislators’ state of mind was never
permissible. I held that Pacific Gas was distinguishable on two
grounds: (1) that subterfuge is a factual question, whereas
preemption, the issue in Pacific Gas, is a matter of law; and (2)
that the legal standards in Pacific Gas and under the ADEA were
different, and that the “true motive” of the legislators does
matter for the purposes of § 623(j)(2) of the ADEA. See 192 PF.
Supp. 2d at 844. The City argues that I erred in distinguishing
Pacific Gas and points to Bell v. Purdue University, 975 F.2d 422
(7th Cir. 1992), which it did not cite in any of its briefs on the
underlying motion. The Seventh Circuit in Bell, when presented with
anecdotal evidence that the defendants preferred younger employees,
stated that “the defendants cannot be liable for their motives if
their conduct has not evaded the ADEA’s prohibitions.” Id. at 429.

Bell involved an application of the Supreme Court’s decision
in Public Employees Retirement System of Ohio v. Betts, 492 U.S.
158 (1989), to a challenge to a fringe benefit plan under §

623(f) (2) of the ADEA, rather than § 623(}), which is the provision


Mot. at 5. I also treat the motion as one to reconsider in light of
the City’s primary reliance on a case that it did not cite in its
underlying briefs. See Minute Order of 4/10/02.

I. Motion to Reconsider

“Motions for reconsideration serve a limited function; to
correct manifest errors of law or fact or to present newly
discovered evidence. Such motions cannot in any case be employed as
a vehicle to introduce new evidence that could have been adduced
during pendency of the [underlying] motion. . . . Nor should a
motion for reconsideration serve as the occasion to tender new
legal theories for the first time.” Rothwell Cotton Co. v.
Rosenthal & Co., 827 F.2d 246, 251 (7th Cir. 1987). Nonetheless,
“reconsideration performs a valuable function where the Court has
patently misunderstood a party, or has made a decision outside the
adversarial issues presented to the Court by the parties, or has
made an error not of reasoning but of apprehension.” Bank of
Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th
Cir. 1990).

The City challenges a very narrow part of my opinion: my
consideration of the plaintiff’s allegations of discriminatory
animus in deciding that there were questions of fact precluding
dismissal. At oral argument, the plaintiffs produced allegations
that the City’s true purpose for enacting the mandatory retirement

ordinance was to clear out older employees to make room for


IN THE UNITED STATES DISTRICT COURT

DOCKETED

FOR THE NORTHERN DISTRICT OF ILLINOIS MAY 2 4 2002

EASTERN DIVISION

DONALD DRNEK, )

Plaintiff,

v.
No. 01 C 0840

CITY OF CHICAGO, an Illinois
Municipal Corporation,

Defendant.

JAMES D. MINCH, RICHARD A.
GRAF, and RICHARD COSENTINO,
individually, and on behalf of
a class of all individuals who
are similarly situated,

Plaintiffs, No. 01 C 2586
v.

CITY OF CHICAGO, an Illinois
Municipal Corporation,

Defendant.
MEMORANDUM OPINION AND ORDER

On March 25, 2002, I granted in part and denied in part the

City’s motion to dismiss the plaintiffs’ age discrimination and due

process complaints. See Drnek v. City of Chicago, 192 F. Supp. 2d

835 (N.D. Ill. 2002). The City moves to amend that order to include

a certification of the following question for interlocutory appeal
under 28 U.S.C. § 1292(b):

whether allegedly illicit motives on the part of individual

legislators and municipal officials for enacting a retirement

plan that mandatorily retires police and fire personnel at age

63 and results in their replacement with younger workers can
demonstrate subterfuge under section 623(j) of the ADEA.

iw,


(7th Cir. 1999). See Minute Order of 3/4/02. I did not convert the
motion to one for summary judgment, requiring the plaintiffs to
come forward with all of the evidence necessary to make out a
claim.

Nonetheless, I am of the opinion that there is a controlling
legal question’: whether a plaintiff can demonstrate subterfuge
under § 623(j)(2) with any kind of evidence if there is no
violation of § 623(j) (1). This is a pure question of law because it
involves the construction of a statutory provision. See Ahrenholz,
219 F.3d at 676. It is controlling because I held that the
plaintiffs could not make out a claim under § 623(3) (1), and both
the ADEA claim and the remaining due process claims of the
firefighter plaintiffs depend on the plaintiffs’ ability to state
a claim under § 623(j)(2). See 192 F. Supp. 2d at 848. It is
contestable because, so far as I can tell, it is a question of
first impression. One other court in this district has considered
circumstantial evidence of subterfuge and found a genuine issue of
fact precluding summary judgment, but it did not discuss whether
the mandatory retirement ordinance complied with the requirements

of § 623(j) (1). See Glennon v. Village of S. Barrington, No. 00 C

1 28 U.S.C. § 1292(b) does not require that I accept the
City’s proposed question for certification. That statute provides
that “[w]hen a district judge, in making [an otherwise non-
appealable order in a civil case], shall be of the opinion that
such order involves a controlling question of law as to which there
is substantial ground for a difference of opinion . .. , [sjhe
shall so state in writing in such order.”

12