Secretary of Health, Education and Welfare v. Snell

• Decision Date: 22 September 1969
• Docket Number: No. 25967.,25967.
• Citation: 416 F.2d 840
• Parties: SECRETARY OF HEALTH, EDUCATION AND WELFARE, Appellant, v. Otis C. SNELL, Jr., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

416 F.2d 840 (1969)

SECRETARY OF HEALTH, EDUCATION AND WELFARE, Appellant, v. Otis C. SNELL, Jr., Appellee.

No. 25967.

United States Court of Appeals Fifth Circuit.

September 22, 1969.

Louis C. LaCour, U. S. Atty., New Orleans, La., Edwin L. Weisl, Jr., Asst. Atty. Gen., Alan S. Rosenthal, Stephen R. Felson, Ronald R. Glanz, Attys., Dept. of Justice, Washington, D. C., for appellant.

Allen B. Pierson, Jr., Pierson & Pierson, Ponchatoula, La., for appellee.

Before COLEMAN and GODBOLD, Circuit Judges, and SCOTT, District Judge.

GODBOLD, Circuit Judge:

The Secretary of Health, Education and Welfare refused to include in the social security account of Otis C. Snell earnings he made as a school bus driver. Snell sought review in the district court, which granted summary judgment in his favor.¹ The Secretary appeals. We reverse.

In January, 1960 Snell began driving a school bus owned by Ponchatoula Elementary School, located in Tangipahoa Parish, Louisiana. He was at that time 57 years old. In 1964 he was notified that the pay he received for these services from 1960 through 1963 would not be credited to his social security account because the coverage of the Social Security Act did not extend to him in the performance of these services. He sought a hearing. The hearing examiner concluded that Snell's position as a bus driver for the Ponchatoula Elementary School was covered by the Louisiana retirement system, and, therefore, his services were not covered under § 218 of the Social Security Act, 42 U.S.C. § 418. The Appeals Council upheld the hearing examiner's decision. This action followed.

As originally enacted in 1935, § 210(b) (6) of the Act, 49 Stat. 625 now § 210 (a) (7), 42 U.S.C. § 410(a) (7), expressly excluded from social security coverage:

Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions * * *.

This exclusion was deemed necessary to avoid the constitutional difficulties which would have arisen if social security taxes were levied upon a state.

In the 1950 amendments to the Act the general exclusion of state and local employees from social security coverage was continued in now 42 U.S.C. § 410(a) (7). But Congress provided that the exclusion was not to apply to "service included under an agreement under" § 218 of the Act, 42 U.S.C. § 418. In relevant part, the section provided:

(a) (1) The Secretary of Health, Education, and Welfare shall, at the request of any State, enter into an agreement with such State for the purpose of extending the insurance system established by this subchapter to services performed by individuals as employees of such State or any political subdivision thereof. Each such agreement shall contain such provisions not inconsistent with the provisions of this section, as the State may request.

(2) Notwithstanding section 410(a) of this title, for the purposes of this subchapter the term "employment" includes any service included under an agreement entered into under this section.

While thus authorizing voluntary agreements between the Secretary and the states for the social security coverage of employees of state and local governments, Congress went on in 42 U.S.C. § 418(d) (1) to impose the important restriction which is crucial in this case:

No agreement with any State may be made applicable (either in the original agreement or by any modification thereof) to any service performed by employees as members of any coverage group in positions covered by a retirement system * * * on the date such agreement is made applicable to such coverage group * * *.

(emphasis added)

Thus, no state employee who was employed in a position covered by a state retirement system was to be made eligible for social security coverage under a federal-state agreement.

Pursuant to 42 U.S.C. § 418, the State of Louisiana entered into an agreement with the Federal Security Administrator on December 10, 1952,

to extend * * * the insurance system established by Title II of the Social Security Act as such Act has been and may from time to time be amended, to services performed by individuals as employees of the State of Louisiana and as employees of any political subdivision of the State listed in the appendix attached hereto and made a part hereof, except services expressly excluded from this agreement.

The agreement excluded "any service performed by an employee in a position which * * * is covered by a retirement system."

Two years after the agreement with Louisiana was effectuated 42 U.S.C. § 418(d) (1) was amended. The amendment authorized but did not compel the extension of social security coverage, by federal-state agreement, to individuals who occupied positions covered by a state retirement system but were personally disqualified from participation therein. By reason of his age Snell was personally disqualified from participating in the Louisiana system. For a state to take advantage of the broadened federal coverage made possible by the Amendment it was required to modify its existing agreement. 42 U.S.C. §§ 418(c) (3) (C), 418 (c) (4) (B).² Louisiana's agreement was not so modified as to include within its ambit school bus drivers in Tangipahoa Parish who were under a personal disqualification from participation in the state retirement plan. Thus, as the district court recognized, the social security coverage of Snell turned upon whether the position he occupied was one within the state retirement plan. If it was he was excluded by the terms of the 1952 agreement.

We find no error in the conclusion of the Louisiana district judge that the facts of Snell's employment, measured by the provisions of Louisiana law, made his position that of "school bus driver." But from this point on we draw conclusions different from those of the district judge. His analysis was that under the provisions of Louisiana law most of the employees who drove busses for the Ponchatoula Elementary School were "covered" by the state retirement system and were not under some personal disqualifications such as Snell was, but that as a matter of practice their supervisor did not consider their positions as school bus drivers to be covered and did...