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Rhinehart v. United States

decided: March 16, 1970.


Forman, Seitz and Adams, Circuit Judges. Seitz, Circuit Judge, dissenting.

Author: Forman


FORMAN, Circuit Judge.

This is an appeal by Waldron V. Rhinehart from a decision of the Railroad Retirement Board [Board] denying his petition for a supplemental annuity under the Railroad Retirement Act, 45 U.S.C.A. § 228c(j) (1) [Act].*fn1

The appellant's normal retirement date would have been February 8, 1967, his 65th birthday. However, on February 1, 1966, his job as a wire operator in Erie, Pennsylvania was abolished by the New York Central Railroad. At that time he had three alternatives available to him in planning his future. They were: (1) accept another job in a relocated area on the Railroad, (2) resign, accept a separational allowance and apply for unemployment benefits, and (3) resign, accept a separational allowance and apply for an early retirement annuity as provided for in the Act. After ruling out alternative (1) as posing an inconvenient travel problem, he alleges that as a result of incorrect information conveyed to him by the Railroad and Union authorities concerning his eligibility for a life insurance policy, he chose alternative (3). His annuity became effective March 1, 1966.

On October 30, 1966, the following provision was added to the Act:

"An individual who is entitled to the payment of an annuity under section 228b of this title * * * and had a current connection with the railroad industry at the time such annuity began to accrue, shall be entitled to have a supplemental annuity accrue to him * * *."*fn2

Section 3(a) of Public Law 89-699 states:

"The amendment made by section 1 (enacting subsection (j) of this section) of this title shall be effective with respect to individuals whose annuities under section 2 of the Railroad Retirement Act of 1937 are first awarded on or after July 1, 1966, * * *."*fn3 (Emphasis added.)

The "first awarded" requirement in § 3(a) has only one exception which is inapplicable in the instant case.

In December 1966, two months after the enactment of the above two provisions, the appellant wrote to the Board's Division of Claims Operation requesting that the effective date of his annuity be changed from March 1, 1966 to February 1, 1967. Essentially, he asked to change from alternative (3) to alternative (2) and thereby receive his normal retirement annuity. He asked for this change because, meanwhile, he had discovered that the information given him concerning his eligibility for a life insurance policy was in error. This request was denied by the Division of Claims Operation and the appellant was informed of this decision by two letters sent to him in January and May of 1967. Appellant appealed and a referee was appointed to hear the case. The referee reversed and granted the appellant's request to change the effective date of his retirement from March 1, 1966 to February 1, 1967. The referee noted, however, that this did not thereby entitle him to the supplemental benefits. In April 1968, the Bureau of Retirement Claims denied appellant's claim for supplemental benefits. This was appealed to the Board's Appeals Council and it affirmed the Bureau's decision of July 22, 1968. Finally, on appeal to the Board it was again affirmed on September 12, 1968. It is from this decision that appellant appeals to this court.

In denying appellant's claim for supplemental benefits, the Board noted that the Act specifically provides that only those employees receiving their "first award" after July 1966, are entitled to these extra benefits. It was the Board's opinion that there was no room for interpretation concerning this prerequisite for the award of supplemental benefits. That appellant may have been misled in his initial decision was considered to be irrelevant. Since the appellant's first award was on March 1, 1966, it was held that he did not fit within the clear and explicit language of the Act. The change in his effective date of retirement as a result of the referee's decision was decided not to affect the fact that the annuity was first awarded prior to July 1966. The Board added that the Congressional history indicated that the words "first awarded" were incorporated in the Act in order that "an annuitant could not qualify for a supplemental annuity by withdrawing his application on which an award had been made before July 1966 in order to have an award made after that time."*fn4

On this appeal, it is essentially the appellant's contention that the Board's decision to construe the words "first awarded" in a narrow fashion and thereby deny to him the supplemental benefits, was without a basis in the Act or in the legislative history. He asserts that the cancellation of his 1966 award had the effect of making his 1967 award the first award, thereby bringing him within the terms of the Act. He further argues that the amendment to the Act providing for these benefits was intended for a special class of employees of which he is a part.*fn5 He adds that there is no evidence tending to show that he changed his effective date only to receive the benefits. Finally, he states that since the words "first awarded" are not defined by the Act his interpretation is as reasonable as that of the Board's. It is noteworthy, however, that the appellant cites no authority in support of any of his arguments.

Initially, a decision of the Board cannot be upset if it has warrant in the record and a reasonable basis in the law.*fn6 If this criteria is satisfied, the administrative decision must be upheld. Here, it is admitted that the appellant's first award was made prior to July 1, 1966, the initial date for awarding supplemental benefits under the Act. The question of whether his March 1966 award is the "first award" within the meaning of the Act is a matter of interpretation and we find the Board's interpretation a reasonable one. The Act is specific and it only allows one exception to the requirement that the annuity must have been granted after July 1966, and this exception is inapplicable here. Moreover, the legislative history supports ...

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