Burns v. U.S. R.R. Retirement Bd.

Citation701 F.2d 193
Decision Date25 February 1983
Docket NumberNo. 81-2293,81-2293
Parties, 1 Soc.Sec.Rep.Ser. 227 Alberta E. BURNS, on behalf of herself and all others similarly situated, Petitioner, v. UNITED STATES RAILROAD RETIREMENT BOARD.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Petition for Review of a Decision of the United States Railroad Retirement Board.

Gil Deford, Los Angeles, Cal., for petitioner.

Thomas W. Sadler, Gen. Atty., Railroad Retirement Bd., Chicago, Ill., with whom Dale G. Zimmerman, Gen. Counsel, and Edward S. Hintzke, Asst. Gen. Counsel, Railroad Retirement Bd., Chicago, Ill., were on the brief, for respondent.

Before MacKINNON and GINSBURG, Circuit Judges, and BAZELON, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GINSBURG.

Dissenting opinion filed by Circuit Judge MacKINNON.

GINSBURG, Circuit Judge:

Petitioner, Alberta Burns, is a retiree who ranks within a special and dwindling category of social insurance recipients. She is a dual beneficiary. She receives primary benefits, on her own account, as a retired worker covered under the Social Security Act (SSA). She also receives derivative benefits as the surviving spouse of a worker covered under the Railroad Retirement Act (RRA). 1 The SSA requires the reduction of a recipient's benefits by one dollar for every two dollars of income the recipient earns in excess of a statutorily defined exempt amount. 42 U.S.C. Sec. 403(b). The RRA incorporates the SSA excess earnings provision by reference. 45 U.S.C. Sec. 231a(g)(2). 2 If the two fifty percent offset provisions, the one in the SSA and one in the RRA, are separately applied to each of the benefits a dual beneficiary receives, income earned in excess of the exempt amount 3 will yield, in total, a one hundred percent or a dollar-for-dollar offset. 4

In 1974, petitioner Burns earned $3800. The exempt amount that year was $2400. Thus, her excess earnings amounted to $1400. She reported her 1974 earnings to the Social Security Administration (Administration) and that agency deducted $744 from her social security benefits in 1976. 5 Two years later, the Railroad Retirement Board (Board) offset $700 against petitioner Burns's 1978 railroad retirement benefits to account for her excess earnings of $1400 in 1974. AR at 31-34. Burns unsuccessfully contested the Board's action through administrative channels. In re Alberta E. Burns, Railroad Retirement Act Claims Appeal Docket No. 1883. As authorized by 45 U.S.C. Secs. 231g, 355(f), she now petitions this court to review the Board's December 11, 1980, decision rejecting her claim for recovery of the $700 deducted from her 1978 benefits.

Burns sought to proceed here on behalf of a class. Our decision denying her motion for an order certifying the class and granting the Board's motion to dismiss the class element of the petition appears in a companion opinion. See Burns v. United States Railroad Retirement Board, 701 F.2d 189 (D.C.Cir.1983).

Initially, Burns challenges the Board's offset as contrary to the intent of Congress. If the Board correctly applied its governing statute, she argues alternately, the resulting dual offset is unconstitutional because it contravenes the equal protection principle. Finally, she urges that even if her statutory interpretation and constitutional arguments fail, the Board acted impermissibly in rejecting her request for waiver of the $700 recovery.

Petitioner Burns maintains principally that separate and independent excess earnings offsets by the Administration and the Board leave a dual beneficiary without any fruit from her labors; the dollar-for-dollar offset, she emphasizes, removes all incentive to earn more than the exempt amount. But the laws that entitle her to dual benefits, on their face, also exact dual offsets. Because we do not believe a court is at liberty to excise either offset or to require the Administration and Board to coordinate deductions, each taking away less than its governing statute authorizes, we cannot embrace Burns's statutory construction or constitutional arguments. Nonetheless, we disagree with the Board's disposition of this case. For the reasons stated in part III of this opinion, we reverse the determination that petitioner Burns was "at fault" in causing the Board to overpay her $700, and instruct the Board to decide on remand whether recovery of the overpayment should be waived under the RRA's "purpose of [the Act]" or "equity or good conscience" standard. See 45 U.S.C. Sec. 231i(c) (Board shall not recover overpayment to individual who is "without fault" if recovery "would be contrary to the purpose of [the Act] ... or would be against equity or good conscience").

I. THE EARNED INCOME OFFSET PROVISIONS AND THEIR APPLICATION TO DUAL BENEFICIARIES

The Social Security Act provides that "[d]eductions ... shall be made from any payment or payments under this subchapter to which an individual is entitled ... if for such month he is charged with excess earnings, under the provisions of subsection (f) of this section," 42 U.S.C. Sec. 403(b); subsection (f), in turn, states that "an individual's excess earnings for a taxable year shall be 50 per centum of his earnings for such year in excess of [the exempt amount]," 42 U.S.C. Sec. 403(f)(3). The Railroad Retirement Act, since 1954, has incorporated the SSA offset provision by reference. Social Security Amendments of 1954, Pub.L. No. 83-761, Sec. 401(d), 68 Stat. 1052, 1098. The RRA thus states that "[d]eductions ... shall be made from any payments to which a survivor is entitled ... if for such month such survivor would be charged with excess earnings under section 403(f) of Title 42 ...." 45 U.S.C. Sec. 231a(g)(2).

Petitioner Burns acknowledges the literal meaning of these texts; she recognizes that "both Acts provide for an offset." Brief for Petitioner at 18. She argues, however, that the court should reject "narrow, overly-literal interpretation which contradicts the Congressional intent and purpose underlying the enactment of these statutory provisions." Id. at 19. But a statute "as complex as the Social Security Act," Dissent at 212, reflects many legislative concerns and purposes. It oversimplifies, we believe, to ascribe a sole purpose to the statutory scheme at issue here.

The vast majority of retirees covered under the SSA or the RRA receive only one federal social insurance benefit. See supra note 1. No doubt Congress had these single benefit retirees in view in 1972 when it revised the SSA's excess earnings formula (and, by reference, the RRA's) to reduce all benefit deductions from dollar-for-dollar to one dollar for every two. Social Security Amendments of 1972, Pub.L. No. 92-603, Sec. 105(a)(3), 86 Stat. 1329, 1341; see supra note 4. The evidence is indeed "overwhelming" that Congress reduced the offset to encourage social security beneficiaries to work. See Dissent at 209-210, 213-214. However, there is no evidence that Congress envisioned but one offset for the retiree who receives two federal social insurance benefits. Rather, it appears that in 1972, the year the fifty percent formula was spread across the board, 6 as in preceding years, Congress did not advert specifically to the dual beneficiary's situation when it legislated offsets for earned income. See Dissent at 212. 7 Based on the "solicitude" Congress showed for gainfully-employed social security annuitants, cf. Dissent at 211-212, Burns urges that the work incentive purpose motivating the 1972 offset reduction should exclude an excess earnings toll greater than fifty percent for single and dual beneficiaries alike. But the provisions Congress put in place in the two statutes express the opposite. It is treacherous to brush aside the literal meaning of those provisions and, by riveting attention on work incentive, avoid forthright recognition of another concern on the mind of Congress. That concern relates to the appropriateness of allowing a retiree to collect two federal social insurance benefits. See supra note 1.

Congress initially prohibited RRA survivor annuitants from simultaneously receiving social security benefits; that restriction was repealed in 1955. 8 In 1951, the RRA was amended to eliminate dual benefits for employee annuitants; that amendment was repealed in 1954. 9 See D. Schreiber, Legislative History of the Railroad Retirement and Railroad Unemployment Insurance Systems 390-92 (1978) (detailed account of shifting legislative positions on allowance of multiple benefits under RRA). Payment of these dual benefits "threatened the railroad retirement system with bankruptcy by the year 1981," United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 169, 101 S.Ct. 453, 456, 66 L.Ed.2d 368 (1980), and "prompt[ed] Congress [in 1974] to completely revise the Railroad Retirement Act to gradually eliminate dual benefits." Dissent at 204 n. 2. See supra note 1.

In light of the ambivalence of Congress regarding allowance of dual benefits, and the legislature's ultimate rejection of them, we do not venture to guess how Congress would have responded had it been asked the question this case poses in 1955, when dual benefits were allowed to persons situated as is petitioner Burns, or in 1972, when the excess earnings offsets were reduced across the board to fifty percent. 10 We note only that it can not be said with any secure support that Congress would have replied, "Yes, individuals who receive two benefits, like individuals who receive only one, should be subject to but one offset for nonexempt earnings." 11 While we offer no speculation as to what solution the legislature would have adopted had it specifically adverted to this case, we point out that on at least two occasions, information was placed before Congress concerning the double offset contested here.

First, in a 1972 report to the House Committee on Interstate and Foreign Commerce, the Commission on...

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    • United States
    • U.S. Court of Appeals — Eighth Circuit
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