Marshall v. Delaware River and Bay Authority, Civ. A. No. 77-379.

• Citation: 471 F. Supp. 886
• Decision Date: 11 May 1979
• Docket Number: Civ. A. No. 77-379.
• Parties: Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff, v. DELAWARE RIVER AND BAY AUTHORITY, Defendant.
• Court: U.S. District Court — District of Delaware

471 F. Supp. 886

Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff, v. DELAWARE RIVER AND BAY AUTHORITY, Defendant.

Civ. A. No. 77-379.

United States District Court, D. Delaware.

May 11, 1979.

James W. Garvin, Jr., U. S. Atty., John X. Denney, Jr., Asst. U. S. Atty., Wilmington, Del., Carin Ann Clauss, Washington, D. C., Marshall H. Harris, and Joan M. Roller, U. S. Dept. of Labor, Philadelphia, Pa., Lois G. Williams and Joseph M. Woodward, U. S. Dept. of Labor, Washington, D. C., for plaintiff.

Francis S. Babiarz of Biondi & Babiarz, Wilmington, Del., for defendant.

OPINION

STAPLETON, District Judge:

The plaintiff in this age discrimination action is Ray Marshall, the Secretary of the United States Department of Labor. The defendant is the Delaware River & Bay Authority ("the Authority"), an interstate agency created by a compact between the states of Delaware and New Jersey. The complaint alleges that the defendant has been discriminating against its employees and against applicants for employment on the basis of age since the end of 1974, in violation of Section 4(a)(1) of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 623(a)(1), and Section 15 of the Fair Labor Standards Act, 29 U.S.C. § 215. The Secretary seeks a permanent injunction restraining the Authority from violating the Acts and requiring it to pay compensation to any individuals against whom it may be found to have discriminated, together with interest and costs.

The Authority has moved, pursuant to F.R.Civ.P. 12, to dismiss the complaint for failure to state a claim upon which relief may be granted and for "lack of jurisdiction" on two grounds: (1) that the Acts as applied to the Authority are an improper impairment of the Delaware-New Jersey compact that created it and (2) that the Acts cannot be applied to a governmental agency such as the Authority. It has also moved for summary judgment in its favor on the limited issue whether its mandatory retirement provisions violate Section 4(a)(1) of the ADEA, 29 U.S.C. § 623(a)(1).

I. FACTS.

The Delaware River & Bay Authority is an interstate authority established by a compact between the States of Delaware and New Jersey, which has been approved by Congress. The Authority operates a bridge crossing of the Delaware River near New Castle, Delaware, and a ferry crossing of the Delaware Bay between Cape May, New Jersey and Lewes, Delaware.

The Authority maintains a police force to patrol the bridges, their approaches and other Authority property. This force has the same legal authority as any other police in either state and has frequently made arrests and investigations for non-traffic offenses involving both felonies and misdemeanors. The Authority also employs other personnel involved in the operations and maintenance of its facilities.

The Authority maintains a pension plan for its employees. This pension plan was first initiated by the Authority in 1963. At that time, the normal retirement date for all employees was the later of age 65 or 10 years of continuous service. In 1967, the normal retirement age for police was lowered to age 60. On December 15, 1967, the ADEA became law, but by its terms, it did not apply to state agencies. Pub.L. 90-202, 81 Stat. 602. On May 18, 1971, the Authority again amended its pension plan to lower the normal retirement age to the later of age 62 or 10 years of service for non-police personnel, and the later of age 57 or 10 years of service for its police. This last change was effective as of July 1, 1971. Effective May 1, 1974, the ADEA was amended so as to apply to state agencies. Pub.L. 93-259, § 28(a)(1), (2), (3) & (4).

Under the pension plan, an employee has no discretion as to whether to continue employment beyond his normal retirement age. The benefits to which employees are entitled under the pension plan have been paid to all eligible employees in accordance with the provisions of the Group Annuity Contract issued to the Authority.

II. THE MOTION FOR SUMMARY JUDGMENT.

Section 4(a)(1) of the ADEA, 29 U.S.C. § 623(a)(1), provides that:

It shall be unlawful for an employer—

(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age. . . .

Section 631 provides:

The prohibitions in this chapter shall be limited to individuals who are at least forty years of age but less than sixty-five years of age.

As an exception to the general rule set out in Section 4(a)(1), Section 4(f)(2) provides in relevant part that:

It shall not be unlawful for an employer, employment agency, or labor organization —

(2) to observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension, or insurance plan, which is not a subterfuge to evade the purposes of this chapter. . . .

29 U.S.C. § 623(f)(2).

It is undisputed that the defendant's employee benefit plan is bona fide. The only question requiring resolution is whether or not that plan is "a subterfuge to evade the purposes" of the ADEA within the meaning of the above section.

The United States Supreme Court, in United Air Lines, Inc. v. McMann, 434 U.S. 192, 98 S.Ct. 444, 54 L.Ed.2d 402 (1978), held that a bona fide retirement plan instituted in good faith 26 years prior to passage of the ADEA cannot be a "subterfuge to evade" the Act. Accordingly, the Court held that such retirement plans are within the Section 4(f)(2) exemption from the Act.

Following issuance of the opinion in the McMann case the following language was added to the end of Section 4(f)(2) effective April 6, 1978:

and no such . . . employee benefit plan shall require or permit the involuntary retirement of any individual . . because of the age of such individual.

Pub.L. 95-256. It is undisputed that the defendant has not involuntarily retired any individuals since the effective date of that amendment.

The Authority argues that McMann, supra, controls this case and that, under McMann, it is entitled to summary judgment on the ground that its retirement plan falls within the Section 4(f)(2) exemption. The secretary, on the other hand, contends that the 1978 amendment controls this case, citing Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974). It is clear that, if the 1978 amendments apply to this case, the Authority's motion will have to be denied. It is equally clear that, if the 1978 amendments do not apply and McMann controls, the motion will have to be granted. Thus, it is necessary to determine whether the 1978 amendments are applicable to this case.

The question has been considered elsewhere, with differing results. The District of New Jersey has held that the 1978 amendments apply to pending litigation. Davis v. Boy Scouts of America, 457 F.Supp. 665 (D.N.J.1978). The Southern District of New York and the District of Maryland have come out the other way. Marshall v. Atlantic Container Line, 470 F.Supp. 71 (S.D.N.Y.1978); Marshall v. B & O Railroad Company, 461 F.Supp. 362 (D.Md.1978).

In Bradley, supra, the Court recognized "the principle that a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary." 416 U.S. at 711, 94 S.Ct. at 2016. See also Cort v. Ash, 422 U.S. 66, 77, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975); United States v. Schooner Peggy, 5 U.S. 103, 110, 1 Cranch 103, 110, 2 L.Ed. 49 (1801); Yakim v. Califano, 587 F.2d 149 (3d Cir. 1978); Cohen v. Maloney, 428 F.Supp. 1278, 1283 (D.Del.1977). Assuming without deciding that it is appropriate to apply the Bradley principle to this case,¹ I conclude that there is legislative history requiring this Court to apply the 1978 amendments prospectively only and that "manifest injustice" would result if the 1978 amendments were applied to this case.

In addition to what he views as the presumption of retroactivity mandated by Bradley, the Secretary relies primarily upon those segments of the legislative history which indicate that the amendment to Section 4(f)(2) was designed to "clarify" that section by overturning McMann and reinstating a rule reflecting what the Ninety-Fifth Congress perceived to be the original intent of the Ninetieth Congress.² I do not find those portions of the legislative history to be particularly helpful. Whatever may have been the view of the Ninety-Fifth Congress regarding the original intent behind the 1967 Act, it must have realized after the McMann decision that the ADEA and its legislative history were susceptible of the construction there placed upon them. In view of this fact, the policy decision whether to "clarify" retroactively or only for the future was clearly a debatable one and I do not believe one can infer one resolution or the other solely from the fact that a decision "to clarify" was made. Accord United States v. Richardson, 512 F.2d 105 (3d Cir. 1975).

There are, however, other parts of the legislative history of the 1978 amendments which indicate a Congressional choice in favor of prospective clarification only. Senator Williams, the floor and conference manager of the amendments, when asked a direct question about the effect of the amendments on a situation much like that before this Court, responded that they would have no effect:

I should like to ask the Senator from New Jersey (Mr. Williams) whether this bill retroactively covers a forced retirement at age 60 or 62 prior to the effective date of this bill where the individual so retired is eligible for, and actually receives, a pension under a pension plan which has been qualified with the Internal Revenue Service.

Senator Williams responded:

The bill is not retroactive. The question of mandatory retirements prior to the effective date of this bill

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