## In the 

# United States Court of Appeals

For the Seventh Circuit

____________

Nos. 06-3455 & 06-3763

W EYERHAEUSER C OMPANY , Petitioner and Intervening Respondent

,

v.

U NITED S TATES RAILROAD R ETIREMENT B OARD , Respondent,
and

B.B., K.N., G.S., et al.,

Intervening Respondents and Petitioners.

____________
Petitions for Review of an Order
of the United States Railroad Retirement Board. No. 06-26 (June 22, 2006)

____________
A RGUED J UNE 1, 2007—D ECIDED S EPTEMBER 24, 2007

____________

Before F LAUM , M ANION , and R OVNER, Circuit Judges.

M ANION , Circuit Judge. Under the Railroad Retirement Act (“RRA”), an employee who works for a railroad employer is entitled to benefits based, in part, on the employee’s years of service with that employer. The intervening respondents received their paychecks from2 Nos. 06-3455 & 06-3763

Weyerhaeuser Company ( “Weyerhaeuser), but they worked for DeQueen and Eastern Railroad (“DeQueen”), which is a subsidiary of Weyerhaeuser. Railroad carriers such as DeQueen are covered employers under the RRA. Weyerhaueser did not creditthese employees for that railroad service. The Railroad Retirement Board (“Board”)
found in favor of four of th e employees and credited them for their prior service. Weyerh aeuser does not dispute that four of the intervening respondents should be credited retroactively for four years’ service. The Board, however,
determined that the four employees were entitled to retroactive RRA service credit beyond the four years automatically allowed by st atute. The Bo ard also concluded that the other two intervening respondents were not entitled to retroactive RRA service credit. Weyerhaeuserappeals from the Board’s order granting the four employees retroactive service credit beyond four years. The four employees granted retroactive service credit intervened and appeal, claiming they were entitled to additional years of service credit, even beyond the years awarded. The twoemployees denied retroactive service credit also intervened, claiming they were also entitled to retroactive service credit. We affirm in part, reverse in part, and remand in part.

I.

This case involves the Railroad Retirement Act of 1974, 45 U.S.C. § 231 et. seq. (“RRA”). The RRA provides “asystem of annuity, pension, and death benefits for employees of designated classes of employers,” Railroad Concrete Crosstie Corp. v. Railroad Retirement Bd. , 709 F.2d 1404, 1409 (11th Cir. 1983) (internal citation omitted), similar to the Social Security Act. See Peppers v. Railroad Retirement Bd.

,Nos. 06-3455 & 06-3763 3

1 Available at http://www.rrb.gov/blaw/bcd/bcd03-40.htm (last visited Aug. 1, 2007).

2 In their briefs on appeal, the six employees were all identified solely by their initials. At oral argument, we inquired as to why, and were informed that it is the Board’s practice so as to maintain the privacy of the parties. The parties proffered noother justification. However, “[j]udicial proceedings are supposed to be open, . . . in order to enable the proceedings to be monitored by the public. The concealment of a party’s name impedes public access to the facts of the case, which include the parties’ identity.” Doe v. City of Chicago , 360 F.3d 667, 669 (7th Cir. 2004). Although “the concealm ent of a party’s name is [not] always improper[,] [t]he presumption [is] that parties’ identities are public information . . . .” Id. That presumption can be overcome “by showing that the harm to the plaintiff (normally (continued...) 728 F.2d 404 (7th Cir. 1983) (noting that because of the similarities between the RRA and the SSA, the same analysis applies on appeal). The RRA applies only to employers that provide railroad services. See 45 U.S.C. § 231(a) (2000) (defining the term “employer” under the RRA).
The Board determined that the petitioner in this appeal, Weyerhaeuser Company (“Weyerhaeuser”), is not an employer under the RRA. See Weyerhaeuser Car Shop, B.C.D., 03-40 (U.S. R.R. Ret. Bd. May 8, 2003) ( Employer Status Deter.). 1 However, a Weyerhaeuser subsidiary, DeQueen and Eastern Railroad (“DeQueen”), is a covered employer under the RRA.

The intervening respondents and petitioners, Ben Bramlett, Karen Neumeier, Gil Sharp, Deborah Ruth, Carol Honea and Larry Potts, 2 were all treated as Weyerhaeuser4 Nos. 06-3455 & 06-3763

2 (...continued) the plaintiff is the party whose identity is concealed) . . . exceeds the likely harm from concealment.” Id. In this case, the parties provided no justification for the use of pseudonyms, other than that it is the Board’s practice to do so to protect the privacy of the employees. (It is clearly not a question of protecting the employees from retaliation, as Weyerhaeuser knows theidentity of the claimants.) A mere desire for privacy, however, does not overcome the presumption that a party’s identity is public information. Accordingly, we identify the parties by their names.

3 An employee is a covered employee under the RRA, if, among other things, he is “in the se rvice of” an RRA employer. 45 U.S.C. § 231(d)(1). An employee is “in the service of” an RRA employer if “(A) he is subject to the continuing authority of the employer to supervise and direct the manner of rendition of his 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 . . . .” Id.employees for payroll purposes, although they all performed services for DeQueen. They each received checks from Weyerhaeuser and, in turn, Weyerhaeuser charged DeQueen for their salaries. Weyerhaeuser did not file RRA returns reporting compensation for Sharp, Ruth, Honea, or Potts, and only started filing RRA returns for Bramlett and
Neumeier in the mid-1980’s.
In 2002, the Board initiated an audit of Weyerhaeuser. Following the audit, the Board concluded that certain employees who were paid by Weyerhaeuser, but who performed work for DeQueen, should be considered employees of DeQueen for pu rposes of RRA coverage. 3 Specifically, in May 2003, the Board concluded the becauseNos. 06-3455 & 06-3763 5

4 Available athttp://www.rrb.gov/blaw/bcd/bcd03-40.2.htm (last visited Aug. 1, 2007).

5 Similarly, 45 U.S.C. § 231h provides: “The Board’s record of the compensation so returned shall be conclusive as to the amount of compensation paid to an employee during each period covered by the return, and the fact that the Board’s records show that no return was made of the compensation claimed to have been paid to an employee during a particular period shall be taken as conclusive that no compensation was (continued...) Weyerhaeuser employee Potts had provided a portion of his services to DeQueen and was “integrated” into DeQueen’s staff and railroad operations, he was covered by the RRA. Potts, B.C.D. 03-40.2 (U.S. R.R. Ret. Bd. May 12, 2003) (Employee Serv. Deter.)

. 4 The Board concluded
that Potts’ service should have been credited under the RRA and granted him retroactive service credit for four years, “as permitted by section 211.16.” Section 211.16 and its statutory counterpart, 45 U.S.C. § 231h, both provide
for time limits for correcting records of compensation. Section 211.16 provides:

The Board’s record of the compensation reported aspaid to an employee for a given period shall be conclusive as to amount, or if no compensation was reported for such period, then as to the employee’s having received no compensation for such period, unless the error in the amount of compensation or the failure to make return of the compensation is called to the attention of the Board within four years after the dateon which the compensation was required to be reported to the Board as provided for in § 209.6 of this chapter.

20 C.F.R. § 211.16. 5 In other words, any compensation6 Nos. 06-3455 & 06-3763

5 (...continued) paid to such employee during that period, unless the error in the amount of compensation returned in the one case, or the failure to make return of the compensation in the other case, is called to the attention of the Board within four years after the day on which return of the compensation was required to
be made.” possibly due but not paid or not credited more than four years before the Board receives notice of a deficiency is not recoverable, i.e., the non-payment is final. Because the filing deadline for service record s for each calendar year is the last day of February of the following year, when the Board issued its May 2003 decisi on as to Potts, the servicerecords for the years 1998 and earlier were deemed conclusive. Accordingly, as a result of the Board’s May 2003 decision, Potts received retroa ctive service credit for the years 1999 through 2002. Potts sought recons ideration of the Board’s decision, requesting additional retroactive service credit beyond the four -year limit based on 20 C.F.R. § 211.16(b). Section 211.16(b) provides: “The Board may correct a report of compensati on after the time limit set forth in paragraph (a) of this section where the compensation was posted or not posted as the result of fraud on the part of the employer.” Potts argued that a 1995 efficiency study prepared for Weyerhaeuser by Anacostia & Pacific Company, Inc. (“Anacostia”) showed that Weyerhaeuser fraudulently failed to file RRA service records on his behalf. In the efficiency study, Anacostia stated that DeQueen’s “practice of cont racting with [Weyerhaeuser]
for the entire mechanical wo rk force as well as certain accounting personnel is subj ect to challenge by the Railroad Retirement Board (’RRB’). In essence, the RRB position is that railroads cannot escape payment of Railroad Retirement and Unemployment Insurance Taxes byNos. 06-3455 & 06-3763 7

6 Available at http://www.rrb.gov/blaw/bcd/bcd05-21.htm (last visited Aug. 1, 2007).

7 Available at http://www.rrb.gov/blaw/bcd/bcd05-17.htm (last visited Aug. 1, 2007). contracting an integral railroad function to an affiliate under common ownership.” The Board denied Potts’ request for reconsideration, fi nding that Potts’ allegations
of fraud were “not meritorious.” SeePotts, B.C.D. 05-21 (U.S. R.R. Ret. Bd. May 17, 2005) (Employee Serv. Deter. Recon.). 6 The Board added:
[T]he Board regards the contention that fraud was committed as a very serious accusation and does not find that the failure of Weyerhaeuser to report [Potts’] service and compensation constituted fraud even though a management study stated that certain Weyerhaeuser Company em ployees worked exclusively for [DeQueen] (and another affiliated railroad).
The Board notes that the same report also stated that the employees had “apparent ly performed considerable mechanical or maintenance work for [Weyerhaeuser Company] and third parties.”

Id.
Then, in May 2005, the Board found that Sharp, Ruth,and Honea, who were all supervised by DeQueen employees and were subject to the continuing authority of DeQueen, were covered employees. Accordingly, the Board
found their service creditable under the RRA. See Weyerhaeuser Car Shop, B.C.D. 05-17 at 8 (U.S. R.R. Ret. Bd. May 4, 2005) (Employer Status/Employee Serv. Deter.). 7The Board further granted them retroactive service credit “to the extent permitted by section 9 of the Railroad Retirement Act and section 211.16 of the Board’s regula-8 Nos. 06-3455 & 06-3763

8 Available athttp://www.rrb.gov/blaw/bcd/bcd05-39.htm (last visited Aug. 1, 2007).

9 Potts had already requested re consideration and the Board had denied his request for reconsideration.” SeePotts, B.C.D. 05- 21. Thus, this was his second request for reconsideration. tions.” Id. at 8-9. That amounted to retroactive service credit for Sharp, Ruth, and Honea for the years 2001 through 2004. Sharp, Ruth, and Honea requested additional service credit beyond four ye ars, also relying on 20 C.F.R. § 211.16(b)’s fraud exception. The Board denied their request for additional service credit, concluding that “as a general rule the Board’s record of compensation and service may not be corrected after four years in the absence of fraud. A majority of the Board finds no evidence of fraud
in the record . . . .” SeeB.C.D. 05-39 (U.S. R.R. Ret. Bd. Aug. 5, 2005) (Retro. Employee Serv . Credit, Employer Status Deter.). 8

After the Board issued its decision denying Sharp, Ruth, and Honea’s request for additional service credit, theirattorney, who also represented Potts, requested reconsideration of the Board’s decisions denying all four claimants retroactive service credit beyond four years. 9 The four again argued that Weyerhaeuser had committed fraud and that they were entitled to RRA service credit beyond the four years already authorized. On June 22, 2006, the Board reversed its earlier holding as to all four employees and granted them retroactive service credit back to 1995—beyond the four-year limitset forth in section 211.16.
See Weyerhaeuser Car Shop, B.C.D. 06-26 (U.S. R.R. Ret. Bd. June 22, 2006) (Employer Status /Employee Serv. Deter. onNos. 06-3455 & 06-3763 9

10 Availableat http://www.rrb.gov/blaw/bcd/bcd06-26.asp (last visited Aug. 1, 2007). Recon.). 10 After noting its prior deci sions, in which it found no evidence that Weyerhaeuser committed fraud, the
Board cited the 1995 Anacostia report and concluded that that report “did or should have put Weyerhaeuser on
notice of the nature of the issue regarding the reporting of service performed by its employees for the affiliated
carriers and created reasonab le expectations that such
service should be creditable under the Acts.” Id. at 3. The
Board added that “neither section 9 of the RRA nor section 211.16 of the [Board’s] regulati ons should be applied to bar” the employees from receiving additional retroactive
service credit. Id. at 3-4. Accordingly, the Board ordered that Sharp, Ruth, Honea, and Potts receive retroactive service credit back to 1995, id. at 3, which in effect added six years of service credit for Sharp, Ruth, and Honea and four years for Potts. Weyerhaeuser filed a petition for review of the June 22, 2006, decision in this court. Sharp, Ruth, Honea, and Potts interven ed in this appeal, arguing that the Board erred in limiting the retroactive service credit to 1995, maintaining they are entitled to retroactive service credit for every year they worked at Weyerhaeuser.

Two other employees of Weyerhaeuser, Ben Bramlett and Karen Neumeier, also intervened in this appeal. Bramlett and Neumeier both were treated as employees subject to the RRA provisions since 1984, but they claim that they
were entitled to retroactive se rvice credit for the years from 1973 through 1984 and 1975 thro ugh 1984, respectively. In August 2005, the Board concluded that Bramlett and
Neumeier were not entitled to retroactive service credit because more than four years had passed and there was no10 Nos. 06-3455 & 06-3763

evidence in the record of employer fraud in connection
with Bramlett and Neumeier. SeeB.C.D. 05-39.
Bramlett and Neumeier soughtreconsideration of that
decision. The Board affirmed its initial determination, concluding again that there was no evidence of fraud for the period of 1973 through 1984. B.C.D. 06-26 at 4. In so ruling, the Board added that Bramlett and Neumeier are precluded from obtaining retr oactive service credit “more than twenty years after the alleged conduct” by Weyerhaeuser. B.C.D. 06-26 at 4. Bramlett and Neumeier seek to overturn the Board’s decision on appeal.

II.
This court has jurisdiction to review the final decisions of the Board pursuant to 45 U.S.C. § 355. We review theBoard’s decision to determine if it is supported by substantial evidence, which is “such re levant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales , 402 U.S. 389, 401 (1971) (internal citation omitted). Moreover, a Board decision must have a
reasonable basis in the law. Holman v. U.S. R.R. Ret. Bd. , 253 F.3d 975, 978 (7th Cir. 2001).
On appeal, Weyerhaeuser first claims that the Board’s decision to grant retroactive service credit beyond four years to Sharp, Ruth, Honea, and Potts lacks a reasonable basis in the law because the regulations allow for such retroactive service credit only in the event of fraud, and the
Board concluded that there was no evidence of fraud. We agree. As quoted above, 20 C. F.R. § 211.16 provides that theBoard’s records are conclusive unless (1) “RRA employment taxes previously had b een paid and either error correction or principles of equity require that the employeeNos. 06-3455 & 06-3763 11

received additional retroactive service credit”; or (2) “the employee’s erroneous service record is due to employer fraud.” 20 C.F.R. § 211.16. The parties agree that the first exception does not apply, thus leaving the fraud exception as the only possible way for the intervening parties to
obtain retroactive service credit beyond four years.

In this case, though, the Board found there was no
evidence of fraud. SeePotts, B.C.D. 05-21 at 3. (“[T]he Board regards the contention that fraud was committed as a very serious accusation and does not find that the failureof Weyerhaeuser to report [Potts’] service and compensation constituted fraud even though a management study stated that certain Weye rhaeuser Company employees worked exclusively for [DeQu een] (and another affiliated railroad).”); B.C.D. 05-39 at 1-2 (denying Sharp, Ruth, and Honea’s request for additional years of retroactive service credit, concluding that “as a general rule the Board’s record of compensation and service may not be corrected after four years in the absence of fraud. A majority of the Boardfinds no evidence of fraud in the record . . . .”). Significantly, on reconsideration the Board did not find that Weyerhaeuser had committed fraud. Rather, the Board concluded that the 1995 Anacostia report “did or should have put Weyerhaeuser on notice of the nature of the issueregarding the reporting of service performed by its employees for the affiliated carriers and created reasonable expectations that such servic e should be creditable under
the Acts.” See B.C.D. 06-26 at 3. The Board then added
that “neither section 9 of the RRA nor section 211.16 of the[Board’s] regulations should be applied to bar” the employees from receiving additional retroactive service
credit. Id. at 3-4.

That, however, is exactly what section 211.16 of the Board’s regulations does—bar s employees from receiving12 Nos. 06-3455 & 06-3763

additional retroactive service credit absent limited circumstances, such as employer fraud. Specifically, 20 C.F.R.§ 211.16(c) provides that “[e]xcept as provided in paragraph (b)(1) of this section, no employee may be credited . . . beyond the four ye ar period . . . unless the employee established to the satisfaction of the Board that all employment taxes . . . have been paid with respect to the compensation and service.” Because employment taxes have not been paid on behalf of the six claimants, service credit is only creditable be yond four years, as provided in paragraph (b)(1), and that section states that “[t]he Board may correct a report of compensation after [four years] where the compensationwas posted or not posted as the result of fraud on the part of the employer.” 20 C.F.R. § 211.16(b)(1).
On appeal, the Board readily ad mits that it “did not find that Weyerhaeuser Company committed fraud, as that term is commonly used, in connection with WeyerhaeuserCompany’s failure to report compensation for the individuals for whom it now concedes are or were employees of the DeQueen and Eastern Railroad.” Board’s Respondent, Cross-Respondent Brief at 12-13. The Board attempts to sidestep this concession in two main ways. First, it notes that § 211.16(b)(1) does not define “fraud,” and then the Board points out that it had previously found that the “knowing failure to report compensation and service as required under the Railroad Retirement Act, met the
standard set forth in sect ion 211.16(b) and would support the requirement of retroactive crediting of service and compensation.” Board’s Respondent, Cross-Respondent Brief at 11. Similarly, the intervening respondents point to other Board decisions granting retroactive service credit beyond four years, which were based on an employer’s knowing failure to report compensation. Intervening Respondents and Petitioners’ Brief at 15-16. From this, weNos. 06-3455 & 06-3763 13

11 Because the Board did not find that Weyerhaeuser had knowingly failed to report compensation for the intervening respondents and concedes that the Board did not find Weyerhaeuser had committed frau d as that term is commonlyused, we need not decide whether a knowing failure to report compensation would qua lify as “fraud” under 20 C.F.R. § 211.16(b)(1). Other portions of the regulations provide that “[u]nlike fraud, fault does not require a deliberate intent to
deceive ,” indicating that fraud requ ires a deliberate intent to deceive. 20 C.F.R. § 255.11(b). Additionally, the consultant’s (continued...) understand the Board and intervening respondents to be arguing that, since the regulations do not define “fraud,”
the Board has discretion to inte rpret that term to mean the “knowing failure to reportcompensation.” The problem with this argument is that the Board, in this case, did not find that Weyerhaeuser had “knowingly fa iled to report compensation.” Rather, the Board found that the Anacostia report “did or should have put Weyerhaeuser on notice of the nature of the issue regard ing the reporting of service performed by its employees fo r the affiliated carriers and created reasonable expectations that such service should be
creditable under the Acts.” See B.C.D. 06-26 at 3. Thus, rather than apply the “knowing” standard the Board seemingly puts forth for fraud on appeal, the Board applied a “did or should have had notice” standard. (And even then, the Board did not conclude that Weyerhaeuser knew or should have had notice that it was required to report compensation under the RRA—it merely concluded that the report “did or sh ould have put Weyerhaeuser on notice of the nature of the issue , . . . and created reasonable expectations that such servic e should be creditable under the Acts.”) Thus, the Board’s decision cannot stand even applying its favored definition of “fraud.” 1114 Nos. 06-3455 & 06-3763

11 (...continued) report may not prove intent or knowledge, since the report came from an independent consultant and not the Board and merely raised the issue with Weyerhaeuser; the report did not conclude that the employees were definitively subject to taxes, but rather that the practice may be “subject to challenge.” The Board also puts forth an equitable argument for sustaining its decision: It argues that because “Weyerhaeuser Company knew or should have known that the individuals should be receiving credit for service performed for DeQueen and Eastern while they were on the Weyerhaeuser Company payroll,” Board’s Respondent, Cross-Respondent Brief at 13, “it is equitable that these
individuals receive credit under these circumstances.” Id. Initially, we note that in its de cision on reconsideration, the Board never found that Weyerhaeuser “knew or should have known that the individuals should be receiving credit . . . .” Rather, as noted above, the Board found that Weyerhaeuser knew or should have known “of the issue.” Knowing that something is an issue is quite different than knowing that you are legally required to report service credit. Regardless, the regulations that the Board itself promulgated do not provide an equitable exception to the four-year bar. Rather, the onlyexception relevant to this appeal is the fraud exception. Yet on reconsideration theBoard did not address the question of fraud, instead stating that it “need not make a finding as to whether Weyerhaeuser willfully failed to report certain of its employees under the [RRA].” B.C.D. 06-26 at 3. The Board cannot ignore its own regulations merely because it finds them inequitable under the circumstances of this case. See Rhodes v. Johnson , 153 F.3d 785, 789 (7th Cir. 1998) (noting that while an agency has discre tion to reasonably interpret its regulations, this “must not be confused with the powerNos. 06-3455 & 06-3763 15

to rewrite” unambiguous regulations); Pearce v. Director, Office of Workers’ Comp. Programs , 647 F.2d 716, 726 (7th Cir. 1981) (stating that “it is well se ttled that reasonable regulations promulgated pursuant to statutory authority have the force and effect of law. . . . [a nd] an agency is bound by its own regulations”). See also Panhandle E. Pipe Line Co. v. Fed. Energy Regulatory Comm’n , 613 F.2d 1120, 1136 (D.C. Cir. 1979) (noting that “[t]he fact that a regulation as written does not provide [the agency] a quick way to reach a
desired result does not authoriz e it to ignore the regulation or label it ‘inappropriate’ ”). Therefore, there is no basis in
law for the Board’s decision on reconsideration that Sharp, Ruth, Honea, and Potts are entitled to retroactive service credit beyond four years.

Weyerhaeuser argues that up on overturning the Board’s decision on reconsideration, there is no need for remand because the Board had already concluded that there was no
evidence of fraud. The Board in its earlier decisions had
found that there was no evidence of fraud. See B.C.D. 05- 21; B.C.D. 05-39. But those decisions are not before this court. Rather, the only decision before this court is the Board’s decision on reconsideration. Although the Board’s
decision on reconsideration cannot stand because it failedto apply the fraud standard established in its own regulations, the intervening respondents had sought reconsideration of the Board’s initial decision that there was noevidence of fraud. The Board never addressed that question on reconsideration. SeeB.C.D. 06-26 at 3 (stating that the Board “need not make a finding as to whether Weyerhaeuser willfully failed to report certain of its employees under the [RRA]”). Accordingly, we must
remand this case to the Board to rule on the motion for reconsideration applying the pr oper standard, at least as to intervening respondents Sharp, Ruth, and Honea. There is16 Nos. 06-3455 & 06-3763

12 A “final determination” is de fined as “[a]nydetermination rendered by the Board at the initial or reconsideration stages.” 20 C.F.R. § 259.6. no need to remand for in tervening respondent Potts because, as discussed below, the Board violated its own regulations in reopening Potts’ case.

As set forth above, the Bo ard originally concluded in May 2003 that Potts was entitl ed to retroactive service credit for the years 1999 thro ugh 2002. Potts so ught reconsideration of that decision, ar guing that he was entitled to credit for additional years that he had worked for Weyerhaeuser. The Board deni ed Potts’ request for reconsideration in May 2005, and Potts did not appeal that decision. However, when the Board granted Sharp, Ruth, and Honea’s request for reco nsideration, the Board also “reopen[ed] the decision regarding [Potts’] request for reconsideration,” and then concluded that Potts should
receive credit back to 1995. SeeB.C.D. 06-26 at 4. The regulations, though, limit th e Board’s authority to reopen decisions relating to employee status determination. TheBoard’s regulations provide for the “Finality of determinations issued under this part,” stating:
Any determination rendered bythe Board at the initial
or reconsideration stages shall be considered a final determination and shall be binding with respect to all parties unless reversed on reconsideration or upon judicial review. A final determination may be reopened at the request of a party who was, or could have been, a party to the final determination when the party alleges that the law or the facts upon which the final determination was based . . . changed sufficiently to warrant a contrarydetermination.[ 12 ]Nos. 06-3455 & 06-3763 17

13 In making the equitable argume nt on appeal, the Board relies
on the fact that on reconsider ation, it granted Sharp, Ruth,
and Honea retroactive service credit to 1995. That decision, however, has no basis in law, see supra at 15, and the onlyway that Sharp, Ruth, or Honea will receive additional service credit is if on remand the Board reverses its previous factual finding that there was no fraud on the part of Weyerhaeuser. Conversely, if th e Board stands by its original (continued...) 20 C.F.R. § 259.6. Thus, the Board only had the power to reopen Potts’ case if “the law or the facts upon which the final determination was based . . . changed sufficiently to warrant a contrarydetermination.” Id.
On appeal, the Board does not claim that the lawchanged. Rather, the Board asserts that its decision granting Sharp, Ruth, and Honea re consideration is a “change of facts” which justifies the Board’s reopening of its decision as to Potts. Board’s Respondent, Cross-Respondent Brief at 15. Section 259.6 of the regula tions, however, only allows for the reopening of a decision if there was a change in facts “upon which the final de termination was based. . . .”
Id. But in denying Potts’ request for reconsideration, the Board did not base its decision on the fact that Sharp, Ruth,
and Honea were also denied retroactive service credit beyond four years; rather, the Board based its decision on the lack of evidence of fraud. Thus, none of the underlying facts upon which the Board’s final determination as to Potts’ request for reconsider ation changed. Therefore, section 259.6 of the regulations does not authorize the Board to reopen Potts’ case. Wh ile the Board argues that it would be inequitable to treat Potts differently than Sharp, Ruth, and Honea, 13 “[w]hen an administrative agency18 Nos. 06-3455 & 06-3763

13 (...continued) factual finding of no fraud, then there will be no disparate

treatment. promulgates rules to govern its proceedings, these rules must be scrupulously observ ed . . . for once an agency exercises its discretion and creates the procedural rules under which it desires to have its actions judged, it denies itself the right to violate these rules.” Black v. Interstate
Commerce Comm’n , 737 F.2d 643, 652 n.3 (7th Cir. 1984). We
further noted in Black, “[i]f an agency in its proceedings violates its rules and prejudice results, any action taken as a result of the proceedings cannot stand.” Id.

The Board also attempts to justify its decision to reopenPotts’ case by noting that the three-member Board reopened Potts’ case on its own in itiative and that “the Board has the discretion to reopen any case where the Boarddeems it proper to do so.” Board’s Respondent, CrossRespondent Brief at 15. In suppo rt of its position, the Boardcites 20 C.F.R. § 261.11, entitled: “Discretion of the threemember board to reopen or not to reopen a final decision.”
Potts likewise relies on sectio n 261.11 as a basis for reopening his case. That section provides:
In any case in which the three-member Board may deem proper, the Board may direct that any decision, which is otherwise subjec t to reopening under this part, shall not be reopened or direct that any decision, which is otherwise not subj ect to reopening under this part, shall be reopened.

20 C.F.R. § 261.11

While section 261.11 provides the Board with discretion to reopen cases that are not otherwise subject to reopening,Nos. 06-3455 & 06-3763 19

14 Specifically, Section 260.1(a) provides: “Claims for benefits shall be adjudicated and initia l decisions made by the Board concerning: (1) Applications for benefits under the Railroad Retirement Act; (2) The withdraw al of an application; (3) A change in an annuity beginning date; (4) The termination of an annuity; (5) The modification ofthe amount of an annuity or lump-sum benefit; (6) The reinstatement of an annuity which had been terminated or modified; (7) The existence of an erroneous payment; (8) The recovery of the amount of an erroneous payment; (9) The eligibility of an individual for a supplemental annuity or the amount of such supplemental annuity; (10) Whether representative payment shall serve the
best interests of an annuitant as a result of that individual’s incapacity to manage his a nnuity payments; and (11) Who shall be designated or continued as representative payee on behalf of an annuitant.” 20 C.F.R. § 206.1(a). that language is modified by “under this part.” “This part” is part 261. Further, 20 C.F.R. § 261.1(b) provides that “[a] final decision as that term is used in this part means any decision of the type listed in § 260.1 of this chapter . . . .” Section 260.1 provides for decisi ons by the Board on claims
for benefits under the RRA. 14Potts, however, was not seeking benefits under the RRA and the Board was not reopening a final decision of the type listed in § 260.1. Rather, the Board’s decision concerned Potts’ status as an employee under the RRA and that decision involved part

259. See 20 C.F.R. § 259. Thus, by its own terms, 20 C.F.R. § 261.11 does not apply to this case.

The Board does not cite any other statutory or regulatory provisions that would authorize it to reopen Potts’ case, and thus has forfeited any other basis for reopening the20 Nos. 06-3455 & 06-3763

15 In his brief, Potts also poin ts to 20 C.F.R. § 261.2(a) and § 261.2(b) as possible authority fo r the Board’s decision reopening his case. Section 261.2 provides for conditions for reopening “[a] final decision,” but as note d above, “final decision” for purposes of part 260 “means any decision of the type listed in § 260.1.” Because Potts’ case did not involve a type listed in § 260.1, it was not a final decision for purposes of § 261.2 and thus the grounds for reopenin g in § 261.2(a) and (b) do not apply. case. 15 Since the only regulati on applicable limits the Board’s authority to reopen cases to circumstances notpresent here, the Board acted contrary to the law in reopening Potts’ case, and that decision must be reversed. The Board may not like its regulations, but as noted above, “[w]hen an administrative agency promulgates rules to govern its proceedings, these rules must be scrupulously observed . . . for once an ag ency exercises its discretion and creates the procedural rules under which it desires to have its actions judged, it deni es itself the right to violate
these rules.” Black, 737 F.2d 643 n.3.
That brings us to Sharp, Ruth, Honea, and Potts’ claim
that the Board erred in limiting retroactive credit to 1995. While we must remand this case for the Board to apply the required fraud standard to determine whether Sharp, Ruth and Honea were entitled to retroactive credit to 1995, remand is not necessary to resolve Sharp, Ruth, Honea and Potts’ petition challenging the Board’s refusal to grant them credit for the earlier years. We review the Board’s decision
for substantial evidence. Wassenberg v. U.S. R.Ret. Bd. , 75F.3d 294, 296 (7th Cir. 1996). Given this deferential standard, we conclude that the Board did not err in concluding that Sharp, Ruth, Honea, and Potts were not entitled toNos. 06-3455 & 06-3763 21

additional years of service credit. The Anacostia Report was not issued until 1995, and itwas this report that the Board concluded put Weyerhaeuser on notice of the issue that it might need to treat so me of its employees as employees under the RRA. While we leave for remand the question of whether this report established fraud, we conclude that the Board’s decision that prior to that date there was no evidence of fraud is suppo rted by substantial evidence. Accordingly, under these circumstances, we affirm the Board’s decision to deny these four claimants service credit pre-dating the report.
Finally, Bramlett and Neumeier claim that the Board erred in denying them any retroactive credit. Both Bramlett and Neumeier were treated as employees subject to the RRA since 1984, but they claim they were entitled to
retroactive service credit for a ll of the years they worked at Weyerhaeuser, which would date back to the early 1970’s. The Board rejected their claim, concluding that it was the 1995 report that put Weyerhaeuser on notice of the RRA reporting issue and that sinc e those claimants had received service credit since the 1980’s, th ey were not entitled to any
additional retroactive service credit.

Again, our review is for substantial evidence. See Wassenberg, 75 F.3d at 296. Given this deferential standard, we conclude that the Board did not err in concluding that
Bramlett and Neumeier were not entitled to additional years of service credit. The Anacostia Report was not issued until 1995, and it was th is report that the Board concluded put Weyerhaeuser on notice of the issue that it might need to treat some ofits employees as employees under the RRA. By 1995, however, Weyerhaeuser had already been treating Bramlett and Neumeier as employees under the RRA. While Bramlett and Neumeier point to22 Nos. 06-3455 & 06-3763

16 Bramlett and Neumeier, along wi th intervening respondents Sharp, Ruth, Honea, and Potts, no te that “[i]n the event that
this Court finds evidence of intent to mislead insufficient to substantiate a finding of empl oyer fraud on the current record, then on remand for a hearing, the RRB could subpoena all individuals who have provided information in this case.” Brief of Intervening Responde nts and Petitioners at 25. They further note that they “specifically requested evidentiary hearing [s] on at least ten (10) occasions in the record [but] [t]hey never were given a hearing, . . . .” Id. at 27. It is unclear fromthese passing comments whether the six claimants were attempting to argue on appeal that the Board erred in denying their request for an evidentiary hearing. Their brief did not identify that as an issue on appeal. More significantly, the claimants did not cite any case law addressing whether this court has jurisdiction to review the Board’s decision not to hold an evidentiary hearing, an d, if so, the appropriate standard of review. By not presenting or developing this argument on appeal, the claimants have waived any challenge to the
Board’s decision not to hold an evidentiary hearing. See
Weinstein v. Schwartz , 422 F.3d 476, 477 n.1 (7th Cir. 2005) (noting that failure to develop arguments on appeal constitutes waiver). other evidence that they believe shows that Weyerhaeuser
should have treated them as RRA employees since 1973, the Board did not find that evidence indicative of fraud, and it is not our place to second-guess the Board’s factual determination. Accordingly, un der these circumstances, the Board’s decision to affirm its original decision denying
Bramlett and Neumeier additional retroactive credit is
affirmed. 16Nos. 06-3455 & 06-3763 23

III.
The Board’s regulations limitretroactive service credit to four years, absent an exce ption to the general four-year bar. The Board initially conc luded as to Sharp, Ruth, Honea, and Potts’ claims for a dditional service credit that the only exception possibly applicable in this case— employer fraud—did not apply because there was no evidence that Weyerhaeuser had committed fraud. On reconsideration, the Board granted retroactive service credit beyond the four ye ars, to 1995, without finding that Weyerhaeuser had committed fraud. This contravened the governing regulations and was thus contrary to law.Accordingly, we reverse the Board’s decision on reconsideration as to Sharp, Ruth, Honea, and Potts. We further remand this case to the Board for it to rule on Sharp, Ruth, and Honea’s motion for reconsideration applying the fraud standard mandated bythe Board’s regulations. Because the Board had already denied Potts’ motion for
reconsideration and violated it s own regulations in reopening that decision, there is no basis for a remand for Potts. As to Bramlett and Neumeier: the Board’s decision denying
them retroactive service creditis supported by substantial evidence and, accordingly, we affirm that decision. We also affirm the Board’s decision denying Sharp, Ruth, Honea and Potts retroactive credit for years pre-dating the 1995 report, as that decision was also supported by substantial evidence.24 Nos. 06-3455 & 06-3763

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_____________________________ Clerk of the United States Court of

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USCA-02-C-0072—9-24-07