Court Opinion

ID: 9483146
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:13:02.117036+00
Date Added: 2024-06-11T17:49:27.789218
License: Public Domain

BUCKLEY, Circuit Judge,
concurring in part and dissenting in part:
I concur in the majority’s conclusion that the district court lacked jurisdiction over the class action. I dissent, however, from *1094its rejection of the Railroad Retirement Board’s denial of Tier I benefits for Mrs. Johnson. As I find 45 U.S.C. § 231e(a)(1) ambiguous and the Board’s interpretation of it permissible, I believe we are obliged to accede to the Board’s disposition of her claim. See Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). I also write separately to comment on the majority’s discussion of nonacquiescence by federal agencies in circuit court decisions.
I. BACKGROUND
A. The Railroad Retirement Act and Social Security
The Railroad Retirement Act (“RRA”), 45 U.S.C. §§ 231 et seq. (1988), is a complex statute. As it has evolved, the Act provides qualified individuals with two categories of sometimes overlapping benefits. The first, known as “Tier I,” provides benefits at least equal to those available under the social security system’s old age, survivors, and disabled insurance programs. Although there are certain differences between the two systems, Tier I benefits are generally predicated on those available under equivalent provisions of the Social Security Act (“SSA”). See, e.g., id. §§ 231b(a)(1), 231c(a)(1), and 231c(f)(1). The RRA also provides a second, “Tier II” category of benefits. These are payable in addition to the first'and are calculated on the basis of such factors as length of service and pay. See id. § 231b(b); see also id. §§ 231c(b), (g).
The change to a two-tiered system was initiated in 1951 with the adoption of major amendments to the RRA. See Pub.L. No. 82-234, § 7, 65 Stat. 683, 684-85 (1951). At the same time, Congress established a financial interchange between the railroad retirement and social security systems: The Railroad Retirement Account would thereafter transfer to the social security trust funds the amount that would have been paid into them if the railroad employees had been covered under the SSA; the trust funds, in turn, would transfer to the Railroad Retirement Account the amounts that the railroad beneficiaries would have drawn from those trust funds if they had been covered by the SSA. See id. § 22(b), 65 Stat. at 687-88 (1951) (codified as amended at 45 U.S.C. §§ 231f(c), 231n (1988)).
B. Ruling Under Review
In May 1989, the Board affirmed and adopted the Appeals Referee’s finding that Mrs. Johnson “[was] entitled to tier I as well as tier II after her youngest child attained age 16,” but that the provision governing the computation of spousal annuities required that her Tier I payments be “reduced to zero.” Decision of the Appeals Referee, Bureau of Hearings and Appeals, U.S. Railroad Retirement Board at 5 (July 12, 1988) (“Appeals Referee Decision”), reprinted in Appendix (“App.”) at 32. This finding was based on the Board’s interpretation of section 4(a)(1) of the RRA, as codified, which provides that “[t]he annuity of a spouse ... [having the care of a child under eighteen] shall be in an amount equal to the amount ... such spouse ... would have been entitled under the Social Security Act.”
It was the Board’s view that this section required it to determine whether Mrs. Johnson would have qualified for an annuity under that statute. Accordingly, the Board consulted section 202 of the SSA, as codified, which provides that a spouse’s right to an annuity is “subject to subsection (s).” 42 U.S.C. § 402(b)(1) (1988). Pri- or to 1981, subsection (s) enabled a spouse to receive social security benefits for a child under the age of eighteen, the same age specified in the RRA. See id. § 402(s)(1) (1976); 45 U.S.C. 231a(d)(1)(iii) (1976). In 1981, however, Congress amended subsection (s) to cut off child-related social security benefits at the age of sixteen. See Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, § 2205(a)(1), 95 Stat. 357, 837 (1981) (“1981 Budget Act”); see also 42 U.S.C. § 402(s)(l) (1988). As a consequence, the Board concluded that although the RRA authorized a Tier I annuity for a child up to the age of eighteen, the amount payable for one who had reached sixteen was zero. See Appeals *1095Referee Decision at 4, reprinted in App. at 31.
II. Applicability of Chevron
Chevron holds that when a provision of an agency’s organic statute is ambiguous with respect to a particular issue, a court must defer to the agency’s interpretation of the provision so long as it “is based on a permissible construction of the statute.” Chevron, 467 U.S. at 843, 104 S.Ct. at 2782. The majority and the courts in Costello v. United States R.R. Retirement Bd., 780 F.2d 1352 (8th Cir.1985), and Johnson v. United States R.R. Retirement Bd., 925 F.2d 1374 (11th Cir.1991), maintain that the Board is owed no deference because, in their view, it wandered off its own reservation when it reached its conclusion that Mrs. Johnson was not entitled to receive Tier I benefits for the care of her sixteen-year-old stepdaughter.
In the words of Costello, which are echoed in Johnson,
the Board interpreted both the Railroad Retirement Act and the Social Security Act, and considered their interrelationship. Thus, the Board was dealing with matters not totally within its area of expertise.
Costello, 780 F.2d at 1354; see also Johnson, 925 F.2d at 1378 (same). With great respect, this is equivalent to a finding that the Internal Revenue Service’s interpretation of a tax indexation provision is not owed deference because the Internal Revenue Code requires reference to the Bureau of Labor Statistics’ Cost of Living Index, as to which the IRS has no expertise. Here, the nature of the relationship between the Railroad Retirement and Social Security Acts is defined entirely by the former; the latter only determines the dollar amount that a Tier I spousal annuitant is to receive. Where one is to look in the SSA in order to identify that amount depends exclusively on how one construes section 4(a)(1) of the RRA. Once that is decided, the computation of the amount payable is a simple matter. It takes no expertise in social security law to determine what a spousal annuitant will receive under the SSA, or that section 202(s) of the SSA, as amended by the 1981 Budget Act, reads “16” rather than “18.”
In a similar vein, the majority tries to avoid the mandate of Chevron by constructing a straw man. It does so by positing a question that the Board, in interpreting an unamended RRA, saw no need to ask and therefore did not answer; namely, “whether Congress [when it amended the SSA] intended spousal annuitants under the Railroad Act, like the Social Security Act, to lose their benefits once their children turn sixteen.” Maj.Op. at 1087. The majority then seizes upon an isolated statement in the Board’s brief — “ ‘Congress ... did not need to amend the [Railroad] Act because it knew section[] 4(a)(1) [section 231c(a)(l) as codified] ... would incorporate any changes’ in the Social Security Act,” id. at 1089 (quoting Brief for Respondent at 45) — to declare that the Board’s position is premised on its understanding of Congress’s intent when it amended the SSA.
The problems with this conclusion are manifest. As in the ruling under review, see Appeals Referee Decision at 4-6, reprinted in J.A. at 31-33, the Board does in fact justify its decision on the basis of the Railroad Act alone. See Brief for Respondent at 25 (“II. TERMINATION OF MS. JOHNSON’S TIER I ANNUITY COMPONENT IS A PERMISSIBLE INTERPRETATION OF Section 4(a)(1) [45 U.S.C. § 230c(a)(1) ]”); id. at 27-31 (text of RRA supports Board’s interpretation of the RRA); id. at 31-34 (statutory structure of RRA supports same); id. at 34-41 (legislative history of RRA supports same).
Moreover, the Board’s statutory argument is in no sense premised on the statement quoted by the majority. That statement appears in a separate section of the Board’s brief, Part III, that is devoted to a rebuttal of arguments advanced in Costello and Johnson. The courts in those cases contended that as Congress had failed, when it amended the SSA, to enact a parallel age reduction in the RRA, Congress must have intended that the Tier I benefits remain payable until a child reached the *1096age of eighteen. It was in response to this contention that the Board stated: “Both courts miss the point; Congress did not need to amend the Act because it knew section 4(a)(1) ... would incorporate any changes.” Brief for Respondent at 45. Nothing in this statement suggests that the Board premised its interpretation of the RRA on its assumption that Congress was aware of the consequences of its later amendment of the SSA. As the Board noted in the preceding paragraph, “Costello and Johnson notwithstanding, ... this is clearly an interpretation of the RRA.” Id.
As the agency in fact based its case on its interpretation of section 231c(a)(l), Chevron applies. Our inquiry, then, must turn to whether that section is ambiguous; and if so, whether the Board’s construction is permissible. The provision reads, in substantial part, as follows:
The annuity of a spouse ... of an individual under section 231a(c) of this title shall be in an amount equal to the amount ... of the wife’s insurance benefit or the husband’s insurance benefit to which such spouse ... would have been entitled under the Social Security Act ... if such individual’s service as an employee after December 31, 1936, had been included in the term “employment” as defined in that Act.
45 U.S.C. § 231c(a)(l). The Costello and Johnson courts take the position that the section establishes “two distinct steps” for the determination of the amount that is to be paid a caretaker spouse under Tier I:
The threshold question is whether a claimant is entitled to an annuity. For this first question, one refers to the entitlement section of the appropriate act.... If, under either [the RRA or SSA], entitlement exists, the second step is to refer to the social security regulations to determine the amount of benefits.
Costello, 780 F.2d at 1355 (emphasis added); see also Johnson, 925 F.2d at 1377 (citing Costello). The Board has a very different view of the statute. It concludes that the amount Mrs. Johnson may be paid under the RRA is that amount to which she would have been entitled if her husband's employment had been credited under the SSA and she had applied for a benefit thereunder.
As both of these interpretations are tenable, it seems clear enough that the section is ambiguous. The majority agrees. See Maj.Op. at 1089 (“There is no evidence that Congress ‘spoke directly to the precise question at issue’ under step one.”). That being the case, we must determine whether the Board’s construction is “rational and consistent with the statute.” NLRB v. United Food & Commercial Workers Union, Local 23, AFL-CIO, 484 U.S. 112, 123, 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987). There can be no question that the language of section 231e(a)(1) is susceptible to the Board’s interpretation. The Supreme Court reminds us, however, that in construing a particular provision, a court must look to “the language and design of the statute as a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988). I believe the Board’s interpretation meets this test. It is fully consistent with the statute’s two-tiered structure and with the financial interrelationship that exists between the railroad retirement and social security systems.
When Congress restructured the RRA, it established a substantial parity between Tier I benefits and those available under the social security system’s old age, survivors, and disabled insurance programs. Moreover, it created a mechanism that results in the use of social security trust funds to pay Tier I annuities. One consequence of this arrangement is that to the extent that Tier I benefits exceed those payable under the social security system, any shortfalls must be met out of funds that are earmarked for the payment of Tier II benefits. The 1981 Budget Act changed neither the text nor the meaning of section 231c(a)(l). Under the Board’s reading of the section, the parity in benefits under the two systems is maintained, and the financial problem that would result from a disparity between Tier I and SSA spousal benefits is avoided. In sum, there was simply no reason for the Board to conclude *1097that Congress had decided, in 1981, to sever the link it had earlier forged between the two systems.
The majority and the Costello and Johnson courts nevertheless insist that if Congress had intended to reduce the RRA benefits in 1981, it would have said so explicitly. See Maj.Op. at 1089; Costello, 780 F.2d at 1355; Johnson, 925 F.2d at 1379. Given the structure of the RRA and its linkage to the SSA, I think it just as reasonable to suggest that if Congress had intended to de-link the two systems and maintain Tier I payments at the pre-1981 level, it would not only have said so, it would have provided for their funding. In the absence of any expression of a congressional intent to change the relationship between Tier I and social security spousal benefits, it is hardly surprising that the Board should apply the RRA as it was written.
The majority’s attempt to buttress its argument by reference to section 231r of the RRA is equally unavailing. As the majority notes, this section of the Act provides that any action taken by Congress to increase social security benefits or eligibility shall be “automatically applicable” to railroad retirement annuity claimants. Maj.Op. at 15. It says nothing, however, about legislation that tightens eligibility or reduces benefits. This is not surprising, as the provision was enacted in 1974 when amendments to the SSA had historically increased eligibility. See Pub.L. No. 93-445, § 101, 88 Stat. 1305, 1350 (1974); see also H.Rep. No. 1345, 93rd Cong., 2d Sess. 8-9 (1974) (discussing recent “liberalizations in eligibility requirements for social security benefits”); S.Rep. No. 1163, 93rd Cong., 2d Sess. 8-9 (1974), 1974 U.S.C.C.A.N. 5702 (same). At most, section 231r gives rise to a statutory ambiguity that, under Chevron, is for the agency to resolve. As it is, the majority engages in sheer speculation when it concludes that Congress, in enacting section 231r, intended that “an explicit authorization is necessary to reduce Railroad annuities.” Maj.Op. at 1089.
The majority claims, finally, that because the Board reversed its treatment of Tier II payments with respect to certain survivor’s annuities (it had denied them to the petitioner-survivor in Costello), it would be “hard pressed to sustain the Board’s interpretation as ‘reasonable.’ ” Maj.Op. at 1089. This claim can be dealt with summarily. This case is about a spouse’s Tier I benefits. Whatever the logic or illogic of the Board’s treatment of Tier II benefits for survivors, that issue is not before us. See Brief for Petitioner at 35 n. 13.
III. NonacquiescenCE
Although dicta, the majority’s discussion of agency nonacquiescence suggests that we may be prepared to draw some rather hard lines on the matter. While I share the majority’s exasperation with the Board’s refusal to apply the Costello ruling to claims arising within the Eighth Circuit, there are circumstances where intracircuit nonacquiescence may be justified. See Estreicher & Revesz, Nonacquiescence by Federal Administrative Agencies, 98 Yale L.J. 679, 743-53 (1989). In this instance, I can see no extenuating circumstances, especially in light of the bureaucratic obstacles a claimant must overcome before she can petition for judicial review. Nevertheless, I would not want us to leave the impression that this court will find intracir-cuit nonacquiescence unacceptable under any and every circumstance.
Nor should we suggest a rigid rule of “three strikes and out,” as the majority does in the case of intercircuit nonacquies-cence. See Maj.Op. at 1093. It is easy enough to say that when an agency is reversed on an important issue, its proper course is to appeal to Congress or the Supreme Court. Catching Congress’s ear, however, is more easily said than done; and given the huge volume of petitions for certiorari that flood the Supreme Court, it is often necessary to establish a split among the circuits before the Court will examine an issue. If an agency is confident enough of its own position, I would be reluctant to establish an arbitrary limit on *1098the intercircuit waters it would be allowed to test.