Snell v. Secretary of Health, Education & Welfare, Civ. A. No. 16096.

• Decision Date: 01 November 1967
• Docket Number: Civ. A. No. 16096.
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: Otis C. SNELL, Jr. v. SECRETARY OF HEALTH, EDUCATION & WELFARE.

275 F. Supp. 645

Otis C. SNELL, Jr. v. SECRETARY OF HEALTH, EDUCATION & WELFARE.

Civ. A. No. 16096.

United States District Court E. D. Louisiana, New Orleans Division.

November 1, 1967.

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

Frederick W. Veters, Asst. U. S. Atty., New Orleans, La., for defendant.

HEEBE, District Judge:

Plaintiff here seeks judicial review pursuant to §§ 205(c) (8) and 205(g) of the Social Security Act, 42 U.S.C. §§ 405(c) (8), 405(g), of a final decision of the defendant denying the inclusion of certain sums in plaintiff's social security account.

Mr. Snell began driving a school bus owned by the Ponchatoula Elementary School, located in Tangipahoa Parish, Louisiana, in January of 1960 when he was 58 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. Snell sought a hearing and 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 his services were therefore not covered under § 218 of the Social Security Act, 42 U.S.C. § 418. The hearing examiner's decision was upheld by the Appeals Council and this suit was brought. We reverse.

It is helpful to trace the development of the pertinent provisions of the Social Security Act to their present status for a full understanding of the simple issue presented in this case. The Act, as originally passed in 1935, expressly excluded from coverage:

"Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions. * *." Ch. 531, § 210(b) (6), 49 Stat. 625.

This exclusion was necessary to avoid the constitutional difficulties which would have arisen if the social security taxes paid by the employer were levied upon a state. However, the 1950 amendment to the Social Security Act authorized the Federal Security Administrator (now the Secretary of Health, Education, and Welfare) to enter into voluntary agreements with the states for the purpose of including state employees in the social security system. Thus, former § 210(b) (6) of the Social Security Act, supra, now § 210(a) (7) of the Act, 42 U.S.C. § 410(a) (7), still excludes from coverage service performed by state employees, but it now provides that this exclusion does not apply to "service included under an agreement under section 418 of this title." Section 418 of Title 42 now provides in pertinent part:

"(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."

However, the scope of coverage which such voluntary agreements may afford state employees is limited by subsection (d) (1) of § 418 which provides:

"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 * * *."

Thus, in 1950 no state employee who was employed in a position covered by a state retirement system was eligible for social security coverage under a state-federal agreement.

Pursuant to the amended federal law, 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."

Section (B) of the agreement provides:

"This agreement includes all services performed by individuals as employees of the State and as employees of those political subdivisions listed in the appendix attached hereto, except:

"(1) Service, which under applicable Federal law, must not be included in an agreement between the State and the Federal Security Administrator, including —

* * * * * *

"(d) Any service performed by an employee in a position which. * * is covered by a retirement system."

In 1954, § 418(d) (1) of Title 42, supra, was amended, and while it still denies social security coverage to state employees in positions covered by a retirement system, it now provides that this

"shall not be applicable to any service performed by an employee as a member of any coverage group in a position * * * covered by a retirement system * * * if * * * such individual is ineligible to be a member of such system."

Thus, even though a state employee occupies a position covered by a state retirement system, he may now be eligible for social security coverage under a state-federal agreement if he is personally ineligible for membership in the rement system. As Snell is personally ineligible for membership in the state system due to his age when hired,¹ it would seem that he qualifies for social security coverage under this provision. However, 42 U.S.C. § 418(c) (3) (C), which was part of the 1954 amendment, provides that employees who are personally ineligible for membership in the state retirement system may still be excluded from social security coverage at the state's "request" in the state-federal agreement. In the original 1952 agreement, supra, the state excluded from social security coverage thereunder all state employees in positions covered by the state retirement system. This provision in the agreement constitutes a "request" to exclude state employees who are personally ineligible for membership in the state system, even though the agreement does not specifically mention such persons, as they are within the class of employees in positions covered by the retirement system. This exclusion is not vitiated under the 1954 federal amendment by the fact that the state-federal agreement adopts the Social Security Act "as such Act has been and may from time to time be amended," and excludes employees who are personally ineligible for the state system from social security coverage only under "applicable federal law." This is due to an additional provision in the 1954 amendment, found in 42 U.S.C. § 418(c) (4) (B), to the effect that persons who were excluded from social security coverage under state-federal agreements prior to 1954 may qualify for social security coverage only if the agreement is subsequently modified. Since the 1952 agreement has not been modified, its exclusion from social security coverage of employees personally ineligible for membership in the state retirement system is still effective under "applicable federal law." As a consequence, Snell may not avail himself of the 1954 addition to § 418(d) (1).

Thus, the issue presented for our determination is simply whether Mr. Snell performed services in a position covered by the state retirement system. If Snell's position was covered by the retirement system, the wages he earned as a school bus driver were correctly excluded from his social security account. We must necessarily look to the law of Louisiana to determine if Snell's position was covered by the Louisiana retirement system.

Before doing so, however, we must first consider plaintiff's request for a remand of this case to allow him to submit new and additional "evidence" to the Secretary. If the case is remanded, plaintiff intends to bring an action in state court against the proper Louisiana officials for a declaratory judgment determining whether or not he performed services in a position covered by the state retirement system. Should the state court hold that Snell's position was not covered by the retirement system, the plaintiff would then submit the declaratory judgment to the Secretary as additional "evidence" supporting his cause. In essence, the plaintiff is asking us to remand the case to the Secretary in order that a state court may decide the very issue which is presented for decision here; that is, whether or not Snell is in a position covered by a state retirement system. Defendant contends that we should not remand this case because such a judgment would not be binding upon it, and we could therefore resolve the issue anew. While we reject this contention,² we deny plaintiff's request for a remand because, even though the state judgment would certainly be helpful to our decision herein, it does not constitute "evidence." It is, instead, a matter of law concerning statutory interpretation that the plaintiff wishes to submit. This is an improper reason for remand. And we are unaware of, nor does the plaintiff suggest, any other procedure under the instant circumstances whereby legal issues, the determination of which is the proper function of this Court, may be deferred to a proposed state court proceeding unless it be abstention. Perhaps the chief non-discretionary obstacle to this course of action, as well as the remand suggested by plaintiff, is that plaintiff would actually be unable to obtain a declaratory judgment in state court. The only question which plaintiff desires to have determined by the proposed declaratory judgment...