Court Opinion

ID: 6759114
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:29:51.361881+00
Date Added: 2024-06-11T16:02:32.552487
License: Public Domain

Wright, J.,
dissenting. Like the majority I have empathy for one who is attempting to provide for his or her retirement. However, this feeling *90does not override the plain fact that appellee’s service with the Federal Reserve Bank of Cleveland is most certainly not employment by an entity that is “operated by the United States government,” as that phrase is used in R.C. 145.293.
The court of appeals understood that the crucial issue is whether the federal reserve bank is operated by the United States government. However, both the court of appeals and the majority simply failed to employ basic principles of statutory interpretation that would have led to the correct result. The court of appeals indicated that it wished to apply not a “strict construction” but a “liberal construction” to the statute with an eye toward assisting the parties and obtaining substantial justice. I certainly have no quarrel with this approach. However, it is one thing to apply a liberal construction; it is quite another to ignore the plain meaning of the statute.
R.C. 145.293 provides that “[cjredit may be purchased for service rendered in another state, and service in any entity operated by the United States government.” A review of the functions of the federal reserve bank within the Federal Reserve System and of the status of its employees mandates a finding that the Federal Reserve Bank of Cleveland is not operated by. the United States government.
In Lewis v. United States (C.A. 9, 1982), 680 F. 2d 1239, and Arney v. United States (Dec. 4, 1979), D. Tenn. No. 77-3503-NA-CV, unreported, the courts held that federal reserve banks were not federal agents for purposes of the Federal Tort Claims Act, Section 1346(b), Title 28, U.S. Code. Both courts noted that Congress structured the reserve banks as corporate entities owned by commercial banks “under the supervision and control” of their own boards of directors and subject only to general supervision by the Board of Governors of the Federal Reserve System. See Sections 301 and 248(j), Title 12, U.S. Code. Both the Lewis and Arney courts thoroughly analyzed the operation and the legislative history of the Federal Reserve Act and found, among other things, that the federal government had no financial involvement in the banks, the banks were independent corporations, the banks primarily serviced private business and financial entities, and the federal government did not control the daily operation of the banks.
These courts also found that federal reserve bank employees were not subject to federal governmental control. The bank had the right to hire and fire its employees. The employees did not participate in the civil service retirement system or the federal workers’ compensation programs, they were not subject to federal travel regulations, and they did not receive governmental employees discounts. The Federal Reserve Act reflects the Congressional intent that federal reserve banks remain nongovernmental entities. Although federal reserve bank policy with respect to interest rates and the like remains under the general supervision of the federal reserve board, the banks are private entities separate and distinct from the government.
*91The drafters of the Federal Reserve Act made clear the private function of federal reserve banks:
“The Federal reserve banks * * * would be in effect cooperative institutions, carried on for the benefit of the community and of the banks themselves by the banks acting as stockholders therein. * * * The committee, however, recommends that they shall be individually organized and individually controlled, each holding the fluid funds of the region in which it is organized and each ordinarily dependent upon no other part of the country for assistance. The only factor of centralization which has been provided in the committee’s plan is found in the Federal reserve board, which is to be a strictly Government organization created for the purpose of inspecting existing banking institutions and of regulating relationships between Federal reserve banks and between them and the government itself.” H.R. Rep. No. 69, 63rd Cong., 1st Sess. (1913), 17-18.
I believe we should liberally construe statutes to promote substantial justice; however, I do not believe that we should ignore the plain meaning and the crystal clear legislative history of the Act.
Accordingly, I must respectfully dissent. I would reverse the court of appeals.
Locher and Douglas, JJ., concur in the foregoing dissenting opinion.