672 F.2d 972 (D.C. Cir. 1982), 80-2458, Pope v. Railroad Retirement Bd.

Docket Nº:80-2458, 80-2464.
Citation:672 F.2d 972
Party Name:Wilhelmina POPE, et al., Appellants, v. RAILROAD RETIREMENT BOARD, et al. Edwin THRASH, et al., Appellants, v. RAILROAD RETIREMENT BOARD, et al.
Case Date:March 12, 1982
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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672 F.2d 972 (D.C. Cir. 1982)

Wilhelmina POPE, et al., Appellants,



Edwin THRASH, et al., Appellants,



Nos. 80-2458, 80-2464.

United States Court of Appeals, District of Columbia Circuit

March 12, 1982

Argued Oct. 22, 1981.

Gill Deford, Los Angeles, Cal., with whom Burton D. Fretz and Toby S. Edelman, Washington, D. C., were on the brief for appellants. Edward C. King, Washington, D. C., also entered an appearance for appellants.

Kenneth M. Raisler, Asst. U. S. Atty., Washington, D. C., with whom Charles F. C. Ruff, U. S. Atty., Washington, D. C., at the time the briefs were filed, and Royce Lamberth, Asst. U. S. Atty., Washington, D. C., were on the brief for appellees.

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Before MacKINNON and GINSBURG, Circuit Judges, and PHILIP NICHOLS, Jr., [*] Judge, United States Court of Claims.

Opinion for the Court filed by Judge NICHOLS.

Opinion dissenting in part filed by Circuit Judge GINSBURG.


This consolidated case comes before the court on appeal from an order of the district court denying plaintiffs-appellants' motions for preliminary injunction and class certification. Appellants are annuitants who received alleged overpayments from the defendants-appellees Railroad Retirement Board (board) and who have had their monthly benefits reduced to recover these alleged overpayments. Appellants brought suit alleging that the board had denied them their statutory and constitutional rights by failing to notify them of available procedures to contest the overpayment determinations. Appellants also asserted that the available procedures were inadequate and sought an order certifying the class as a class action. Proceedings were stayed pending decision in Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). Because the board had, during the course of the present litigation, amended its regulations and now substantially complies with the notice and hearing requirements mandated by the Supreme Court in Yamasaki, the district court denied appellants' motion for class certification and preliminary injunction. The district court further held that requiring retroactive notice to the members of the proposed class would be too burdensome and, therefore, only prospective notice would be required.

We disagree. For the following reasons we reverse and remand with instructions that the proposed class, as defined by this court, be certified and defendant be required to give retroactive notice to the class.


Appellants are currently receiving annuities established and funded in accordance with the Railroad Retirement Act of 1974 (the Act) 45 U.S.C. § 231 et seq., and its predecessor, the Railroad Retirement Act of 1937, 45 U.S.C. § 228a et seq. The Act provides for payment of annuities to individuals who have satisfied work-related requirements in the railroad industry as well as to certain of their dependents and survivors. The payments are financed by contributions to a Railroad Retirement Account by both employers and employees. These benefits combine qualities of an insurance program, like the Social Security system, and of a private pension plan. See generally Hisquierdo v. Hisquierdo, 439 U.S. 572, 573-75, 99 S.Ct. 802, 804-05, 59 L.Ed.2d 1 (1979). Counsel state that the account would bear the cost of any notice procedures that may ensue in this litigation.

The board is the agency charged with administering the Act, 45 U.S.C. § 231f, and is empowered to recover any overpayments, 45 U.S.C. § 231i. Section 231i also provides that recovery of an overpayment may be waived if the payment of excess monies was not due to any fault of the individual and, in the judgment of the board, "recovery would be contrary to the purpose of (the Act) or would be against equity or good conscience."

At the time the named appellants received notice of overpayment and the board's intention to recover same, the board had no established procedures for notifying annuitants of their rights to contest the collection of these monies. Thus, the notice of overpayment merely included a statement of the amount of overpayment and gave the annuitants three options for repaying the debt-immediate repayment of the entire debt, withholding of all annuity payments until the debt was satisfied, or actuarial adjustment resulting in reduced monthly payments for the rest of the annuitant's life. Although some of the annuitants were informed of their right to request a waiver, none were informed of their

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right to appeal the board's decision on overpayment through the administrative process, 20 C.F.R. §§ 260.2, 260.3 (1977) and, ultimately, to a court of appeals, 45 U.S.C. § 231g. Indeed, at the time the annuitants were notified of the overpayment, no right existed to an oral hearing before recovery of the overpayment was commenced, so far as regulations or court decisions were concerned.

Two days before the annuitants filed suit on December 21, 1977, the Bureau of Retirement Claims (BRC) issued Policy Decision No. 13 which dealt with the subject of informing overpaid annuitants of the statutory conditions for waiver. This policy decision was fully implemented by procedures promulgated on April 5, 1978. In accordance with these procedures, future overpayment notice letters were to include a statement informing the annuitant that he/she had 30 days in which to contest the existence of an erroneous overpayment, i.e., entitlement, or to request a waiver of recovery. The notice further provided that in the event the annuitant disagreed with the board's decision, an appeal could be taken within one year from the date of the original overpayment notice letter. The procedures, but not the notice sent to the annuitants, provided that no recovery would begin until a decision was made except where the amount of the erroneous payment was small and it appeared from information available to the board that recovery by reducing the amount of one month's check would not be harmful to the annuitant.

On November 14, 1978, the board again adopted new regulations which were not fully implemented until March 19, 1979. These new regulations required that certain annuitants from whom recovery was sought were to be notified of their right to seek entitlement reconsideration and/or waiver, that recovery of the alleged overpayment would begin if the request was not made within 30 days, and that annuitants would have the opportunity for a prerecoupment hearing if they requested it. The regulations further provided that certain classes of annuitants were not to be notified. 20 C.F.R. §§ 260.1, 260.2 (1979).

On June 20, 1979, the Supreme Court issued its decision in Yamasaki, holding on statutory grounds, that a request for waiver, but not a request for reconsideration, required an oral hearing prior to the beginning of recoupment of social security overpayments. 442 U.S. at 695-97, 99 S.Ct. at 2554-55. In accordance with the Yamasaki decision, the board adopted revised regulations, effective October 15, 1979. These new regulations even went beyond the requirements of Yamasaki by providing for prerecoupment oral hearing when requests for entitlement reconsideration were made. All parties agree that these new regulations fully comply prospectively with the requirements set forth by the Supreme Court in Califano v. Yamasaki, supra, and...

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