Railway Labor Executives' Ass'n v. U.S. R.R. Retirement Bd., 84-1048

• Decision Date: 05 December 1984
• Docket Number: No. 84-1048,84-1048
• Citation: 749 F.2d 856
• Parties: RAILWAY LABOR EXECUTIVES' ASSOCIATION, Petitioner, v. UNITED STATES RAILROAD RETIREMENT BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 856

749 F.2d 856

242 U.S.App.D.C. 178

RAILWAY LABOR EXECUTIVES' ASSOCIATION, Petitioner, v. UNITED STATES RAILROAD RETIREMENT BOARD, Respondent.

No. 84-1048.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 30, 1984.

Decided Dec. 5, 1984.

Daniel Joseph, Washington, D.C., with whom David A. Holzworth, Washington, D.C., was on brief, for Government of Canada, amicus curiae, urging reversal of the decision of the Railroad Retirement Bd.

Clinton J. Miller, III, Washington, D.C., with whom William G. Mahoney, Washington, D.C., was on brief, for petitioner.

Thomas W. Sadler, General Atty., Railroad Retirement Bd., Chicago, Ill., with whom Edward S. Hintzke, Asst. Gen. Counsel, Railroad Retirement Bd., Chicago, Ill., was on brief, for respondent.

Before WILKEY, WALD and BORK, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

The Railway Labor Executives' Association ("RLEA") seeks review, pursuant to 45 U.S.C. Secs. 231g and 355(f), of a decision of the Railroad Retirement Board ("the Board") which determined that Canadian employees of United States railroads operating in Canada ceased to be covered by the Railroad Retirement Act of 1974 ("RRA"), 45 U.S.C. Secs. 231-231t, and the Railroad Unemployment Insurance Act ("RUIA"), 45 U.S.C. Secs. 351-367, as of April 10, 1978, the effective date of certain Canadian immigration regulations. The issue on review is whether the Board properly construed the Canadian Immigration Act, 1976 2d Sess., ch. 52, Sec. 10, and the 1978 regulations issued thereunder, as requiring United States railroads operating in Canada to employ, in whole or in part, Canadian citizens or residents, so as to bring such workers within the exceptions to covered service found in section 231(d)(3) of the RRA and section 351(e) of the RUIA. We find that the Board's decision lacked any coherent articulation of what types of foreign law restrictions on hiring are sufficient to satisfy the requirement language found in sections 231(d)(3) and 351(e) and consequently lacked any reasoned analysis of why these Canadian regulations come within the meaning of these two sections. We also find that the record on which the Board acted is inadequate to support its apparent conclusion concerning the actual effects of the Canadian law and regulations. We vacate the Board's decision and remand for further proceedings.

I. BACKGROUND

Together the RRA and RUIA provide a system of retirement and unemployment benefits for railroad workers. Both Acts define an employee as an individual in the service of an employer for compensation or an employee representative. 45 U.S.C. Secs. 231(b)(1), 351(d). An individual in the service of an employer is covered under the Acts whether the service is performed inside or outside the United States. 45 U.S.C. Secs. 231(d)(1), 351(e). Both Acts, however, contain the following exception to covered service:

[A]n individual not a citizen or resident of the United States shall not be deemed to be in the service of an employer when rendering service outside the United States to an employer who is required under the laws applicable in the place where the service is rendered to employ therein, in whole or in part, citizens or residents thereof.

45 U.S.C. Secs. 231(d)(3), 351(e) (emphasis added). It is this exception, contained in both Acts, that is at the heart of the controversy. The Board asserts that Canadian immigration regulations require United States railroads operating in Canada to employ Canadians. Consequently, the Canadian employees are excepted from coverage under RRA and RUIA by virtue of sections 231(d)(3) and 351(e), respectively. The RLEA asserts that the Canadian regulations in question do not require the railroads to hire Canadians, hence the exceptions to covered service do not apply.

The Canadian Immigration Act provides that any noncitizen or nonresident of Canada seeking to enter Canada for the purpose of engaging in employment must obtain an employment authorization prior to appearing at a port of entry. ¹ Immigration Act, 1976 2d Sess., ch. 52, Sec. 10. Regulations issued by the Canadian Minister of Employment and Immigration pursuant to the Immigration Act, 1976 2d Sess., ch. 52, Sec. 115(1)(j), establish the guidelines for the issuance of employment authorizations. See 112 Can.Gaz., Part II, No. 5, Secs. 18-20 (March 8, 1978). Section 20 of the regulations provides in relevant part:

(1) An immigration officer shall not issue an employment authorization to a person if,

(a) in his opinion, employment of the person in Canada will adversely affect employment opportunities for Canadian citizens or permanent residents in Canada;

....

(3) In order to form an opinion for the purposes of paragraph (1)(a), an immigration officer shall consider

(a) whether the prospective employer has made reasonable efforts to hire or train Canadian citizens or permanent residents for the employment with respect to which an employment authorization is sought;

(b) the qualifications of the applicant for the employment for which the employment authorization is sought; and

(c) whether the wages and working conditions offered are sufficient to attract and retain in employment Canadian citizens or permanent residents.

(4) For the purpose of considering the question set out in paragraphs (3)(a) and (c), an immigration officer shall consult an officer of the National Employment Service serving the area in which the person seeking an authorization wishes to engage in employment. ²

Id. at Sec. 20 (emphasis added).

On the basis of the above provisions of the Canadian Immigration Act, and regulations issued thereunder, the General Counsel of the Railroad Retirement Board issued Legal Opinion L-83-79, ³ on March 25, 1983, stating:

I am of the opinion that this statute constitutes a law requiring the employment of Canadian citizens or permanent residents "in whole or in part" for railroad operations in Canada. Consequently, for [sic] months after April 9, 1978, service in Canada by Canadian citizens and permanent residents of Canada employed by United States railroads operating in Canada is not covered under the Railroad Retirement Act and the Railroad Unemployment Insurance Act by virtue of sections 1(d)(3) of the Railroad Retirement Act and 1(e) of the Railroad Unemployment Insurance Act.

Appendix at 8. ⁴ The General Counsel further stated that this determination would apply prospectively from January 1, 1983. ⁵ On May 11, 1983, the General Counsel issued Legal Opinion L-83-79.1 making Legal Opinion L-83-79 also applicable to elected railway labor organization officials who are Canadian. ⁶

On June 3, 1983, the RLEA sought reconsideration of the Board's decision pursuant to 20 C.F.R. Sec. 259.3. In its request for reconsideration, the RLEA argued that the Canadian immigration regulations do not on their face require the hiring of Canadians or even the denial of an employment authorization to any person, but merely delineate criteria for immigration officers to use in exercising their discretion as to whether an employment authorization should be issued in a specific instance. Appendix at 13-14. The RLEA included in its request for reconsideration a memorandum of law written by a Canadian attorney, Mr. M.W. Wright, Q.C., stating that the regulations create a "preference" for hiring Canadians but do not make the hiring of Canadians "obligatory." Appendix at 20-28.

On December 12, 1983, the Deputy General Counsel issued Legal Opinion L-83-79.2 denying the RLEA's request for reconsideration but permitting the RLEA request to be considered an appeal to the three-member Board pursuant to 20 C.F.R. Sec. 259.5. Appendix at 30-35. The Board affirmed the Deputy General Counsel's decision and denied the RLEA's appeal on January 10, 1984, with one member dissenting. Appendix at 2-4.

II. DISCUSSION

The Board frames the issue in this case as: "[W]hether the Board's interpretation of the RRA and the RUIA, the statutes which it administers, as they are affected by Canadian law and regulations and Canada's application of them to United States companies, has a reasonable basis in law." Brief for Board at 10. The RLEA, on the other hand, argues that the Board's decision was based upon a determination of foreign law and as such is entitled to no deference. The RLEA asserts that the "question involved in the case at bar is a pure question of statutory and regulatory construction of Canadian law in determining the applicability of the exceptions from covered service contained in 45 U.S.C. Secs. 231(d)(3), 351(e), [thus] this court should review the matter de novo." Brief for RLEA at 7. We cannot accept the RLEA's contention that the issue in this case is solely an issue of the determination of foreign law. Clearly, what is at issue here is the interplay between the exception to coverage provisions of the RRA and RUIA and Canadian law. Although we basically accept the Board's statement of the issue in this case, that does not bring in its wake an acceptance of the Board's idea of the high level of deference to be accorded its decision.

The Board's determination of Canadian law is entitled to no deference from this court. Bamberger v. Clark, 390 F.2d 485, 488 (D.C.Cir.1968) (overturning agency's determination of German law). This is purely a question of law and the court is free to make its own independent determination of Canadian law. ⁷ In the present case, however, we are not being asked to make an isolated determination of foreign law but rather to determine whether the relevant provisions of foreign law come within the meaning of sections 231(d)(3) and 351(e). To make this latter determination, we must first know the meaning of sections 231(d)(3) and 351(e), i.e., the standard or criteria to be used in assessing and evaluating Canadian law.

It is well established that an agency's construction of its own governing statutes is entitled to...