McGinty v. State

Decision Date01 August 1998
Docket NumberDocket No. 98-9060
Citation193 F.3d 64
Parties(2nd Cir. 1999) MARY McGINTY, as Administrator of the Estate of Maureen Nash, on behalf of herself and all others similarly situated, and JAMES NASH, on behalf of himself and all others similarly situated, Plaintiffs-Appellants, v. STATE OF NEW YORK, NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM, and NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Defendants-Appellees
CourtU.S. Court of Appeals — Second Circuit

Appeal from a judgment of the United States District Court for the Northern District of New York (Lawrence E. Kahn, Judge) dismissing plaintiffs' claims on the grounds of mootness and lack of standing. On appeal, plaintiffs claim primarily that the district court erred in dismissing their death benefit claims because a continuing live dispute exists between the parties as to whether full relief has been granted. We agree, principally on the ground that plaintiffs are entitled to unpaid liquidated damages. We also agree that the district court should reconsider whether plaintiffs have standing to bring the disability benefit claims because its dismissal of those claims was based in material part on the dismissal of plaintiffs' death benefit claims.

Judgment reversed as to the dismissal of plaintiffs' death benefit claims, as to the determination that plaintiffs are not entitled to liquidated damages and as to the dismissal of plaintiffs' disability benefit claims, reversed and remanded for determination of the amount of liquidated damages owed and for resolution of other outstanding death benefit issues, and vacated and remanded for reconsideration of the disability benefit claims in light of our opinion. [Copyrighted Material Omitted] JAMES T. TOWNE, JR., Kingsley and Towne, P.C., Albany, NY (Stuart Potter, Butler, Fitzgerald & Potter, New York, NY, of counsel) for Plaintiffs-Appellants.

DANIEL SMIRLOCK, Assistant Attorney General, State of New York (Dennis C. Vacco, Attorney General, Peter H. Schiff, Deputy Solicitor General, Nancy A. Spiegel, Assistant Attorney General, of counsel) for Defendants-Appellees.

Before: CABRANES and SACK, Circuit Judges, and SHADUR,* District Judge.

SHADUR, District Judge:

Mary McGinty and James Nash are respectively the Executrix of the Estate and the designated death benefit beneficiary of Maureen Nash ("Nash"), a former employee of the New York State Department of Taxation and Finance ("Department") and, as such, a former member of the New York State and Local Employees' Retirement System ("Retirement System"). Acting on behalf of themselves and all others similarly situated, they brought this action against Department, Retirement System and the State of New York ("State") itself, charging violations of the Age Discrimination in Employment Act ("ADEA," 29 U.S.C. 621-634) as amended by the Older Workers' Benefit Protection Act of 1990 ("Older Workers' Act," Pub. L. No. 101-433, 104 Stat. 978).1 Plaintiffs (the collective term that we will employ to embrace the entire putative class, not just the name plaintiffs) contend that "similarly situated" individuals include (1)approximately 1,000 people2 who, like them, received death benefits that were wrongfully reduced because of age in violation of ADEA 623(a) and also (2)many members and former members of Retirement System whose disability benefits have been and are wrongfully reduced because of age.

Defendants concede, and the district court (Lawrence E. Kahn, J.)3 found it undisputed, that the New York Retirement and Social Security Law ("New York's Retirement Law") 62(b), 448(a)(2), 507, 508(a)(2) and 606(a)(2), the statute controlling the calculation of death benefits payable to Retirement System members' beneficiaries, does not comply with ADEA. It is equally undisputed that because New York's Retirement Law had continued to make improper distinctions in benefits on the basis of age in violation of ADEA as amended by the Older Workers Act, Retirement System had knowingly violated ADEA for several years by paying the inadequate death benefits called for by New York's Retirement Law.

Nonetheless the district court found that Retirement System's ultimate administrative correction of the death benefit system in the face of inaction by the New York legislature, and Retirement System's consequent additional payments of what it viewed as the required corresponding compensatory damages to the death benefit beneficiaries, had rendered plaintiffs' claims moot (14 F.Supp. 2d at 246-51). Additionally the district court found that the name plaintiffs lacked standing to maintain a claim on behalf of Retirement System members who had suffered age discrimination with respect to disability benefits rather than death benefits (id. at 251).

Accordingly, the district court granted defendants' Fed. R. Civ. P. ("Rule") 12(b)(1) motion to dismiss the case for lack of subject matter jurisdiction, and plaintiffs now appeal. We reverse the district court's dismissal of plaintiffs' death benefit claims as moot and hold plaintiffs entitled to the claimed statutory liquidated damages, and we vacate the district court's dismissal of the disability benefit claims sought to be advanced by plaintiffs. We remand for reconsideration in light of this opinion both the unresolved issues as to the death benefit claims and the question whether the name plaintiffs lack standing to assert the disability benefit claims.


From October 16, 1992 until June 20, 1996 defendants, acting pursuant to New York's Retirement Law, admittedly violated ADEA by maintaining and implementing a death benefit system that discriminated unlawfully against New York state and municipal employees because of their age.4 Plaintiffs claim that since October 16, 1992 (and continuing through the present) defendants have also maintained and implemented a disability benefit system that violates ADEA. 5

New York's Office of the State Comptroller (the administrative head of the retirement system and trustee of the Retirement System's fund), aware that New York's Retirement Law did not comply with the Older Workers Act amendments, repeatedly attempted without success to have the state law amended by the New York legislature. In 1992 the Comptroller's Office had commissioned a report from Buck Consultants, an employee benefits consulting firm, to analyze New York's Retirement Law's death and disability benefit provisions and to recommend any necessary changes to the benefit structure to comply with the Older Workers Act. Despite the Buck Report's adverse findings as to the New York provisions' noncompliance with ADEA's requirements, despite that Report's consequent recommendations for statutory amendments to bring the New York system into compliance, and despite the support of New York's Governor for the Comptroller's efforts in that regard, the New York legislature (which was of course the ultimate authority for instituting any such state law changes) did nothing.

Ultimately the Comptroller's Office, confronted by the dilemma of New York's continued statutory noncompliance with the overriding mandate of ADEA, decided to implement the Buck Report's death benefit recommendations although the New York Retirement Law itself remained unchanged. Accordingly, Retirement System began to calculate the revised amounts in June and July 1996, and it began to make the calculated supplemental payments in stages, beginning later in 1996 and continuing on into 1997 and beyond.

Meanwhile, after Nash's death early in 1995 Retirement System had paid her named beneficiary James Nash an ordinary death benefit of $36,671.44 under the Retirement Law's ADEA-violative formula, an amount that was both (1)less than the benefit that would have been paid had Nash joined Retirement System before turning 52 and (2)less than the benefit that would have been paid had Nash died before turning 61. By an original charge filed early in 1996, and then by an April 1996 amendment to that charge that identified Retirement System as the discriminatory state agency, plaintiffs tendered to the United States Equal Employment Opportunity Commission ("EEOC") their complaints of age discrimination. In October 1996, at substantially the same time that a Retirement System benefits examiner communicated with James Nash seeking to provide him with forms to process a differential payment in conformity with the Buck Report's formulation, plaintiffs brought this action in the Northern District of New York, requesting monetary and injunctive relief, costs, attorney's fees and disbursements, and such other relief as the court deemed just and proper.

In response to plaintiffs' interrogatories, defendants admitted their original ADEA violations in the payment of death benefits for those whose benefits had been calculated under the age-discriminatory provisions of New York's Retirement Law. They also disclosed the names of Retirement System members who were discriminated against with respect to those benefits, the identity of the death beneficiaries of those members, the original death benefits paid to those beneficiaries and the adjusted amounts that defendants believe should have been paid. According to defendants' records the overall death benefits had originally been wrongfully reduced by approximately $20.8 million.

As stated earlier, it was in June 1996 (nearly four years after ADEA, as amended by the Older Workers' Act, had been extended to cover employee retirement benefit plans) that Retirement System implemented the Buck Report's recommendations of a revised method of calculating death benefits that it contends is in compliance with ADEA (though plaintiffs dispute that). When in July 1996 Retirement System began to make further payments to the beneficiaries who had been affected by the acknowledged discrimination in earlier death benefit payments, each of those added payments was in an...

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