Court Opinion

ID: 8590376
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:47:08.450236+00
Date Added: 2024-06-11T16:54:25.614659
License: Public Domain

MaddeN, Judge,
concurring in the result.
I think the court is right in dismissing the plaintiff’s, petition. The court’s reason for doing so does not seem to me to be valid. It construes the Act of June 28, 1946, as never having given referees in bankruptcy the right to compute their retirement benefits upon the basis of the compensation which they had actually received, if that compensation had amounted to more than ten thousand dollars- per annum. I find nothing whatever in the statute which suggests such a construction. The fact that the statute set referees’ salaries for the future at a $10,000 maximum seems to have no bearing, since the Civil Service Betirement Act, to which the 1946 Act refers for the ascertainment of retirement rights, bases retirement pay upon the average .compensation received at 'any time for five consecutive years. If the salary of a Government employee had been $7,500 per annum for more than five years, and Congress then reduced the salary of his position to $5,000 per annum, and he served for five years more at the reduced salary and then retired, it could not, I think, be argued that Congress by implication had reduced his retirement allowance to the $5,000 basis. The court’s opinion produces a fictional $10,000 salary which the plaintiff had never received over any five year period, and makes it the basis of a retirement allowance fixed, in unambiguous language, on the basis of compensation actually received.
In the hearings before the Special Committee on Bankruptcy and Eeorganization, on H. R. 33 and H. R. 3338, 79th Congress, June 25-26,1945, pages 38-39, appears a letter from the Chief of the Retirement Division of the Civil Service Commission stating that, if referees were put under the Civil Service Retirement Act it would be entirely feasible *303to compute their retirement allowances on the basis of fees' received by them for their services in former years. The' 1946 Act thus came from a Committee which had no idea that the retirement allowances of referees would be based upon a' ■ hypothetical salary of $10,000 and not upon the actual compensation received by them.
The Government, in its defense, has not made bold tó; advance the theory upon which the court has decided' the" case, ■ and I .think the Government’s estimate of its validity was accurate.'
Consideration of the validity of the Act of October 5,1949,' reducing the retirement benefits of the plaintiff and other' referees who had received average annual compensation from fees óf more than $10,000 a year for five consecutive years at some time before the 1946 Act put them on a salary basis,must, I think, be undertaken. The plaintiff says that the Act is unconstitutional as depriving the plaintiff of a vested contract right, equal in substance to a property right, and thus protected .from impairment by the Fifth Amendment.
If the Government makes a contract, it cannot ordinarily destroy the other party’s rights under the contract by mere legislation purporting to modify the contract. In the usual case, its sole escape is to expressly reassert its ancient prerogative of immunity from suit. Lynch v. United States, 292 U. S. 571. The Government urges in the instant case that the plaintiff had no contract, but only the benefit of a law, which, like most laws,- could be repealed or amended. I think this position is correct. I think the tendency to treat legislation fixing salaries or benefits as creating contracts, then treating the contracts as property protected by the Fifth Amendment, thus making the legislation unchangeable, is to be deplored.
If so much legislation is constitutional law, the constitutional coinage is depreciated. It seems to me that the most th,at can be said for the contract theory of salaries or retirement benefits is that there is a vague sort of equity in one who has left his opportunities in the outside world and-taken - Government employment at a statutory salary that the salary, should ,not be reduced unfairly and without good reason. But this' equity - comes nowhere near being a constitutional *304right, tying the hands of the legislature to prevent it from-doing what seems to it wise in future circumstances. I think that’ one who retires, or is forced by law to retire from Government service at a time when the law provides generous retirement benefits has no greater constitutional right to the continuation of those benefits than the one who accepts Government employment has to the continuation of the salary at which he entered the Government’s employ.
The Supreme Court had substantially our question in Dodge v. Board of Education, 302 U. S. 74. It held that the statutory teachers’ retirement plan there in litigation created no contract rights, and that the state could reduce benefits without being guilty of impairing the obligation of contracts. There is nothing in the Civil Service Retirement Act which suggests that the United States makes contracts with its retired civil servants which was not equally present in the Illinois statute involved in the Dodge case.
I am authorized to state that Judge Whitaker concurs in the foregoing opinion concurring in the result.