Riva v. Com. of Mass.

• Decision Date: 08 June 1995
• Docket Number: No. 95-1066,95-1066
• Parties: 68 Fair Empl.Prac.Cas. (BNA) 688 Albert RIVA, et al., Plaintiffs, Appellants, v. COMMONWEALTH OF MASSACHUSETTS, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1003

61 F.3d 1003

68 Fair Empl.Prac.Cas. (BNA) 688

Albert RIVA, et al., Plaintiffs, Appellants, v. COMMONWEALTH OF MASSACHUSETTS, et al., Defendants, Appellees.

No. 95-1066.

United States Court of Appeals First Circuit.

Heard June 8, 1995.

Decided Aug. 4, 1995.

Raymond C. Fay, with whom Bell, Boyd & Lloyd, Harold L. Lichten, Bryan Decker and Angoff, Goldman, Manning, Pyle, Wanger & Hiatt, P.C., were on brief, for appellants.

Cathy Ventrell-Monsees and Laurie A. McCann on brief, for American Ass'n of Retired Persons, amicus curiae.

James R. Neely, Jr., Deputy Gen. Counsel, Gwendolyn Young Reams, Associate Gen. Counsel, Vincent J. Blackwood, Asst. Gen. Counsel, and Paul D. Ramshaw, Atty., on brief, for U.S. E.E.O.C., amicus curiae.

Thomas O. Bean, Asst. Atty. Gen., with whom Scott Harshbarger, Atty. Gen., was on brief, for appellees.

Before SELYA, BOUDIN, and LYNCH, Circuit Judges.

SELYA, Circuit Judge.

This case, in which three plaintiffs seek a declaration that the Massachusetts accidental disability retirement scheme violates the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634 (1988), as amended by the Older Workers Benefit Protection Act (OWBPA), Pub.L. No. 101-433, 104 Stat. 978, presents two questions for review on appeal: a question of first impression as to the operation of the OWBPA's nonretroactivity provision; and a situation-specific question concerning justiciability. The district court resolved both of these questions in the defendants' favor. It entered summary judgment against a pair of plaintiffs, determining that the OWBPA did not apply to their claims, and simultaneously dismissed the third plaintiff's claim as unripe. See Riva v. Commonwealth of Mass., 871 F.Supp. 1511, 1517-20 (D.Mass.1994). We affirm the summary judgment ruling, but reverse the dismissal of the remaining plaintiff's claim and remand for further proceedings.

I. The OWBPA

Congress enacted the ADEA in 1967 to prohibit age-based discrimination in the "terms, conditions, or privileges" of employment. 29 U.S.C. Sec. 623(a). The law originally contained an exclusion for employee benefit plans, providing that an employer could continue to "observe the terms of ... any bona fide employee benefit plan such as a retirement, pension, or insurance plan, which is not a subterfuge to evade [ADEA's] purposes." Id. Sec. 623(f)(2). The Department of Labor, and, later, the Equal Employment Opportunity Commission (EEOC), interpreted this provision to require that age-based distinctions in benefit plans be cost-justified in order to qualify for the shelter of the exclusion. See 29 C.F.R. Sec. 1625.10 (1988). When confronted with the issue, the Supreme Court expanded the safe haven. It held that, under the ADEA, an employee challenging a benefit plan must prove that "the discriminatory plan provision actually was intended to serve the purpose of discriminating in some non-fringe-benefit aspect of the employment relation." Public Employees Ret. Sys. v. Betts, 492 U.S. 158, 181, 109 S.Ct. 2854, 2868, 106 L.Ed.2d 134 (1989).

On October 16, 1990, Congress enacted the OWBPA and thus reconfigured the exclusion. The amendments placed employee benefits squarely within the protective custody of the ADEA, overturned Betts, and reinstated the earlier view that age-based distinctions in employee benefits must be cost-justified. Recognizing the potential implications of these changes for public employers, Congress stipulated that the OWBPA would not take effect as to states and their political subdivisions until two years after its passage. See OWBPA Sec. 105(c). Moreover, in grappling with the question of retroactivity, Congress decreed that the OWBPA would not apply at all to "a series of benefit payments made to an individual or the individual's representative that began prior to the effective date and that continue after the effective date pursuant to an arrangement that was in effect on the effective date...." Id. Sec. 105(e).

II. The Commonwealth's Disability Retirement Scheme

In Massachusetts, public employees who are injured on the job and cannot continue working may retire and receive accidental disability benefits. See Mass.Gen.L. ch. 32, Sec. 7 (1989). Ordinarily, the amount of an employee's benefits will equal roughly 72% of her previous wages. See id. Sec. 7(2)(a)(ii). But there is a rub: section 7(2)(b 1/2), added in 1987, affords significantly different treatment for employees who have less than ten years of creditable service and who are at least 55 years old at the time of accidental disability retirement. Under section 7(2)(b 1/2), an employee who fits this description receives her regular disability retirement benefits until she turns 65, but her benefits are then refigured to equal the amount she would have received if she retired on superannuation, i.e., if she retired based on age and years of service. ¹

III. The Plaintiffs

Albert Riva commenced his employment with the City of Boston in August of 1982. He retired in April of 1992 after experiencing a permanently disabling injury. At the time of his retirement, Riva had not yet accrued ten years of creditable service. On August 19, 1992, the Boston Retirement Board (BRB) transmitted a letter advising him that his benefits were subject to reduction under section 7(2)(b 1/2). Approximately one year later, after Riva had celebrated his sixty-fifth birthday, the Board implemented the law and reduced Riva's benefits from approximately $2,130 per month to approximately $775 per month.

Nancy Pentland was employed by the Town of Andover from February of 1981 until she retired due to a job-related disability on November 30, 1988. At the time of her retirement, she was 61 years old but had not yet accrued ten years of creditable service. As of October 31, 1992, the Andover Retirement Board (ARB) recalculated her benefits according to the superannuation guidelines, resulting in a substantial downsizing of her monthly stipend.

Robert Keenan toiled as a Boston school custodian from December of 1989 until March of 1991. At the age of 56, having less than ten years of creditable service, he retired on accidental disability and began receiving a monthly allowance effective February 20, 1993. On June 22, 1994, the BRB notified him of the prospective applicability of section 7(2)(b 1/2) to his case. Keenan was born on August 10, 1937, so his monthly benefit is not scheduled to be recalculated until the year 2002. Nonetheless, subscribing to the adage that an ounce of prevention is sometimes worth a pound of cure, he (like Riva and Pentland before him) filed a charge of discrimination with the EEOC.

It is significant that, when the OWBPA took effect, both Riva and Pentland were already receiving disability retirement benefits, but Keenan--whose retirement postdated the statute's effective date--was not.

IV. The Litigation

Riva and Pentland commenced the instant action against, inter alia, the Commonwealth of Massachusetts, the Public Employee Retirement Administration, the BRB, and the ARB (collectively, "the Commonwealth"). Their complaint sought declaratory, injunctive, and compensatory relief, alleging that the Massachusetts accidental disability retirement scheme violated the OWBPA because it arbitrarily reduced retirement benefits based on the recipient's age. ² Keenan subsequently joined the suit as an additional plaintiff.

The parties cross-moved for summary judgment on stipulated facts. The district court granted brevis disposition in the Commonwealth's favor vis-a-vis Riva and Pentland, and dismissed Keenan's claim as unripe. See Riva, 871 F.Supp. at 1517-20. The court ruled that even though Riva's and Pentland's benefits were recalculated after the effective date of the OWBPA (when they reached age 65), the smaller payments were of the same class as the original payments, were part of a single series of benefit payments that straddled the effective date, and were paid pursuant to a preexisting arrangement. See id. at 1519. Hence, section 105(e) applied, and the Massachusetts disability retirement scheme, as it affected those plaintiffs, eluded the OWBPA's grasp. See id.

Keenan's case easily vaults this hurdle. Unlike Riva and Pentland, he began receiving benefit payments only after the OWBPA had become fully effective. Thus, his claim does not fit within the confines of section 105(e). In the trial court's view, however, a different obstacle loomed. Because Keenan's benefits were not scheduled to be pared for several years, Keenan's alleged injury was both remote and contingent, and, accordingly, his claim was unripe. See id. at 1517-18. All three plaintiffs now appeal.

V. Standard of Review

A district court's resolution of a question of statutory interpretation engenders de novo review in the court of appeals. See Pritzker v. Yari, 42 F.3d 53, 65 (1st Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1959, 131 L.Ed.2d 851 (1995); United States v. Gifford, 17 F.3d 462, 472 (1st Cir.1994). This standard of review applies to the district court's application of section 105(e) to the facts stipulated in the instant case. By the same token, a trial court's determination on a paper record that the case before it lacks ripeness presents a question of law subject to plenary review. See Ernst & Young v. Depositors Economic Protection Corp., 45 F.3d 530, 534 (1st Cir.1995); Shea v. Rev-Lyn Contracting Co., 868 F.2d 515, 517 (1st Cir.1989).

VI. The Exemption

Both Riva and Pentland began receiving disability retirement benefits prior to the effective date of the OWBPA, and their benefits were reduced pursuant to section 7(2)(b 1/2) after the effective date. For the reasons that follow, we think that the payment stream is exempt from scrutiny under the federal statute. ³

We start with a prosaic precept: "In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue judicial...