Steiger v. U.S. R.R. Retirement Bd.
| Decision Date | 29 May 1985 |
| Docket Number | No. 84-7165,84-7165 |
| Citation | 761 F.2d 1428 |
| Parties | 37 Empl. Prac. Dec. P 35,287 Janet K. STEIGER, on behalf of herself and all others similarly situated, Petitioner, v. UNITED STATES RAILROAD RETIREMENT BOARD, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Ronald Sievers, Sievers, Haigh & Minsky, Long Beach, Cal., for petitioner.
Thomas Sadler, Chicago, Ill., for respondent.
On Review of a Decision of the United States Railroad Retirement Board.
Before GOODWIN, SNEED, and SKOPIL, Circuit Judges.
Janet Steiger petitions for review of the Railroad Retirement Board's (the Board) computation of her railroad spousal annuity. 1 Because of the enactment of section 1119(d)(2) of the Omnibus Budget Reconciliation Act of 1981 (Omnibus Act), Pub.L. No. 97-35, 1981 U.S.Code Cong. & Ad.News (95 Stat.) 633 (codified at 45 U.S.C. Sec. 231c(e)(5) (1982)), during the pendency of her application for benefits, the Board reduced Steiger's annuity by the amount of her social security benefits. In the absence of this enactment, the Board would have awarded dual benefits under 45 U.S.C. Sec. 231c(e)(1) (1982). Steiger contends that section 231c(e)(5) contravenes the equal protection component of the Due Process Clause of the Fifth Amendment.
Three groups of individuals are affected by the statutes at issue in this case. The first group comprises railroad employees who have also worked in nonrailroad jobs and thus are entitled to both railroad retirement benefits and social security benefits. Most, but not all, of these individuals are men. In the second group are those railroad employees whose entitlement to social security benefits stems from their spouses' work in nonrailroad jobs. Males dominate this group as well. Finally, the third group comprises spouses of railroad employees who are also eligible for social security benefits. Females constitute the vast majority of this group.
Before 1974, persons who qualified for railroad retirement benefits and social security benefits received benefits under both systems. Congress determined that these dual payments threatened the solvency of the Railroad Retirement System. United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 168-69 & n. 2, 101 S.Ct. 453, 456 & n. 2, 66 L.Ed.2d 368 (1980). 2
Congress, in response to the problem, passed the Railroad Retirement Act of 1974, Pub.L. No. 93-445, 88 Stat. 1305 (1974) (), reprinted in 1974 U.S.Code Cong. & Ad.News 1488. The 1974 Act was designed, in part, to phase out gradually the payment of dual benefits. It reduced The Act then proceeded to restore the amounts offset to all three groups of annuitants, but it limited eligibility to individuals who would have been entitled to dual benefits under the Social Security Act as in effect on December 31, 1974. Section 231b(h)(1)-(2) restored dual benefits to railroad employees whose eligibility for social security rested on their own work records. Section 231b(h)(3)-(4) similarly restored benefits to those workers whose eligibility rested on their spouses' work records. Finally, section 231c(e)(1)-(2) restored dual benefits to spouses of railroad employees who satisfied the vesting and work-related requirements.
all railroad annuities by the amount of benefits payable under the provisions of the Social Security Act. See 45 U.S.C. Sec. 231b(m) (1982) (railroad employees' annuities); id. Sec. 231c(i)(1) (1982) (railroad spouses' annuities).
All went smoothly until 1977. In that year, the Supreme Court decided Califano v. Goldfarb, 430 U.S. 199, 97 S.Ct. 1021, 51 L.Ed.2d 270 (1977). Goldfarb invalidated social security provisions requiring men, but not women, to show dependency as a condition for receiving spousal benefits. As a consequence, nondependent men began to receive spousal payments.
The Board responded by providing all railroad employees, male and female, with spousal social security benefits. For most men, however, this had no effect on their benefit packages, because the Board reduced their railroad pensions by the amount of spousal benefits received, as required by 45 U.S.C. Sec. 231b(m). The Board refused to restore dual spousal benefits to male railroaders (the males of the second affected group mentioned above) who met the vesting and work-related conditions but who could not establish dependency on their spouses. The Board reasoned that these men were not entitled to dual benefits "under the provisions of the Social Security Act as in effect on December 31, 1974," as required by sections 231b(h)(3) & (4) (emphasis added). The Board interpreted "as in effect on December 31, 1974" to rest eligibility for dual benefits on social security eligibility standards in effect before the Supreme Court's 1977 decision in Goldfarb.
The Seventh Circuit invalidated this interpretation in Gebbie v. United States Railroad Retirement Board, 631 F.2d 512 (7th Cir.1980). The court required the Board to pay dual spousal benefits to these second group male railroaders without regard to the dependency provisions that existed prior to Goldfarb. Although the Gebbie court declined to apply its holding on a class-wide basis, see 631 F.2d at 516 n. 9, the unanticipated fiscal impact of paying dual benefits to all these male railroad employees on the basis of their wives' work records without regard to dependency prompted Congress to restrict dual benefits further.
Part of the Omnibus Act addressed the problem. A new provision, 45 U.S.C. Sec. 231b(h)(6) (1982), cut off the entitlements to dual spousal benefits of all railroad employees who otherwise satisfied the requirements of section 231b(h)(3)-(4) except those whose eligibility for dual benefits "had been determined prior to August 13, 1981." Railroad employees who were eligible for dual benefits based on their own work records (the first group mentioned above) and who otherwise satisfied the conditions of the 1974 Act retained their dual benefits. A parallel provision, 45 U.S.C. Sec. 231c(e)(5) (1982), negated the eligibility of spouses of railroad employees (the third group mentioned above) for dual benefits under section 231c(e)(1)-(2) "unless the entitlement of such person[s] had been determined prior to August 13, 1981." 3 The upshot of these statutory changes is that only the first group of affected individuals retained an unqualified right to dual benefits.
Steiger is the spouse of an eligible railroad employee and is entitled to a spousal annuity under the Railroad Retirement Act. She is thus a member of the third group of affected individuals. Her entitlement dates from June 1, 1981. Steiger applied for her annuity on June 5, 1981, but due to delays in gathering necessary information from the Social Security Administration, the Board did not award Steiger's annuity until February 8, 1982.
It is not disputed that, as the law stood prior to the enactment of the Omnibus Act, Steiger was entitled to dual benefits under 45 U.S.C. Sec. 231c(e)(1). Because Steiger's eligibility was not determined until February 8, 1982--well after August 13, 1981--the Board applied section 231c(e)(5) to the calculation of her annuity. Accordingly, the Board did not employ section 231c(e)(1) to restore Steiger's dual benefits. Steiger appealed the Board's initial determination to an appeals referee and then to the Board itself. At each stage, the Board reaffirmed its decision to apply section 231c(e)(5) to Steiger's annuity. Steiger now petitions this court, challenging the constitutionality of that section.
A party seeking to sustain a provision that classifies individuals according to their gender must show an "exceedingly persuasive justification" for the classification. Heckler v. Mathews, --- U.S. ----, 104 S.Ct. 1387, 1397, 79 L.Ed.2d 646 (1984); (quoting Mississippi University for Women v. Hogan, 458 U.S. 718, 724-25, 102 S.Ct. 3331, 3336-37, 73 L.Ed.2d 1090 (1982)). To meet this burden, the party must show "at least that the classification serves important governmental objectives and that the discriminatory means employed are substantially related to the achievement of those objectives." Id.; see Craig v. Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 456, 50 L.Ed.2d 397 (1976). Steiger maintains that the Board cannot establish a satisfactory justification for eliminating future dual benefits for railroad spouses (the third group) while allowing railroad employees to retain their eligibility for dual benefits based on their own work records (the first group). And even if such a justification exists, Steiger maintains that the Board cannot show the requisite "direct, substantial relationship between objective and means...." Mississippi University for Women v. Hogan, 458 U.S. 718, 725, 102 S.Ct. 3331, 3337, 73 L.Ed.2d 1090 (1982).
On its face, however, section 231c(e)(5) is gender neutral. It denies dual spousal benefits to all "person[s] whose entitlement to such benefits was not determined by August 13, 1981." By its terms, this category comprises both men and women.
The Supreme Court formulated a two-part test to assess the validity of gender-neutral statutes that have a disparate impact on women in Personnel Administrator of Massachusetts v. Feeney, 442 U.S. 256, 99 S.Ct. 2282, 60 L.Ed.2d 870 (1979). The first question is whether the classification "is indeed neutral in the sense that it is not gender based." Id. at 274, 99 S.Ct. at 2293; accord Martin v. International Olympic Committee, 740 F.2d 670, 678 (9th Cir.1984). "If the classification itself, covert or overt, is not based upon gender, the second question is whether the adverse effect reflects invidious gender-based discrimination." Feeney, 442 U.S. at 274, 99 S.Ct. at 2293; accord Martin, 740 F.2d at 678.
Determining whether the classification is neutral entails an examination...
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