U.S. RAILROAD RETIREMENT BD. v. FRITZ
Legal provision: Equal Protection
ORAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF THE APPELLANT
Chief Justice Burger: We will hear arguments first this morning in No. 79-870, United States Railroad Retirement Board against Gerhard Fritz.
Mr. Kneedler, I think you may proceed whenever you're ready.
Mr. Kneedler: Mr. Chief Justice, and may it please the Court:
This case is before the Court on direct appeal from the United States District Court for the Southern District of Indiana.
The District Court held that Section 3(h)(1) of the Railroad Retirement Act of 1974 is unconstitutional under the equal protection component of the Fifth Amendment due process clause.
The Court rested this holding on its conclusion that Congress had no rational basis for excluding members of a certified class in this case for eligibility for the special benefit provided under that section.
The Railroad Retirement Act provides a system of retirement disability and survivor benefits for persons who pursue careers in the railroad industry, just as the Social Security Act provides these benefits for persons who pursue careers in other industries.
Indeed, this Court observed in 1963 in Eichel v. New York Central Railroad Company, quoting a lower court decision, that the Railroad Retirement Act is substantially a social security act for employees of common carriers.
Railroad retirement and social security have been separate systems since their inception in the 1930s but over the years they have been integrated in many respects.
Congress integrated the two programs even further when it thoroughly revised the Railroad Retirement Act in 1974.
Section 3(h)(1) at issue in this case is a product of these further efforts at integration.
That section limits eligibility for what Congress perceived to be a windfall accruing to certain persons who were eligible to receive both social security and railroad retirement benefits under prior law.
Because the relationship between social security and railroad retirement provides important background for addressing the issues presented in this case, I would first like to briefly describe that relationship and the origins of Section 3(h)(1).
I will then explain Appellee's constitutional challenge to Section 3(h)(1) in this case.
Railroad retirement benefits are paid out of a railroad retirement account established in the Treasury and financed by payroll taxes imposed on carriers and their employees.
In 1951 Congress instituted a financial interchange between this railroad retirement account and the social security trust fund, which was designed to place the trust fund in exactly the position it would have been in if railroad work had been covered by the Social Security Act.
Under this financial interchange, funds are transferred each year from the railroad retirement account to the trust fund in amount equal to the taxes the carriers and their employees would have paid if they'd been covered by social security.
In return funds are transferred back from the trust fund to the account in amount equal to the benefits that would have been paid to retired railroad workers, their survivors, and dependents, if railroad work had been covered by the Social Security Act.
The effect of this arrangement was to provide a type of reinsurance for the railroad retirement system.
However, it became increasingly apparent in the years following 1951 that this arrangement did not have the desired effect in the case of employees who were entitled to receive both social security and railroad retirement benefits, perhaps as a result of having split their careers between work covered by the one act and work covered by the other act.
Mr. Kneedler: You said "perhaps".
It would always be the result of that situation.
Mr. Kneedler: But... yes; yes.
Well, one exception might be where a person was working full time in the railroad industry and had moonlighted, in effect, in a social security job.
I suppose that's splitting--
Mr. Kneedler: He's splitting his career in a different way.
Mr. Kneedler: --Right.
This... the problem resulted because under the financial interchange program, whenever a retired railroad worker received social security benefits directly from the trust fund, the reinsurance payment from the trust fund to the railroad retirement account was reduced by the amount of the social security benefits.
The result was a shortfall in the income to the account necessary to pay the railroad retirement benefits.
But despite this shortfall, the individual beneficiary for whom that reduction was made remained eligible to receive his full railroad retirement annuity.
This shortfall therefore resulted in a substantial and accelerating drain on the assets in the railroad retirement account and was a substantial cause of the serious financial position of the account by the last 1960s.
Mr. Kneedler: What's the... Mr. Kneedler, under the Social Security Act standing alone, is there a vested interest in the particular pattern of payments?
Mr. Kneedler: --No, this Court held in Flemming v. Nestor that social security benefits are noncontractual and that Congress may alter or even eliminate them at any time.
Mr. Kneedler: They can be given and they can be taken away.
Mr. Kneedler: Exactly, and two terms ago, in this Court's decision in Hisquierdo v. Hisquierdo, the Court applied this same understanding to the Railroad Retirement Act.
Aside from the financial difficulties that these dual benefits created, it was also perceived by the late 1960s that the payment of dual benefits was inequitable because a person who split his career between railroad and nonrailroad work received more in combined benefits than a person would receive if he had spent his entire career in an industry covered by just one act or the other.
Mr. Kneedler: But isn't this also true of people who might spend 20 years with General Electric under social security and then go into government service and have... be part of civil service retirement?
Mr. Kneedler: Yes, it is, and the reports on the 1974 legislation do call attention to the fact that this problem of overlapping benefits does arise in several different situations and there is no deduction in the manner of this case in those other situations.
But the distinction that was perceived here, in the committee reports was that the railroad retirement system is different because it was really designed as a social security system, a parallel program, and there was a financial interchange between the two that does not occur, for instance, in the case of military retirement or federal civil service retirement.
And in addition, in those cases, in federal civil service and military, the Government stands as employer to the persons who were receiving the benefit.
Here, in this case, the Government is using its taxing and spending power, or the power to regulate interstate commerce, in collecting revenues and paying benefits in the private sector.
So these differences, I think, serve to distinguish why Congress took the first step in integrating the two programs under the Railroad Retirement Act.
Against this background Congress sought in the 1974 act to integrate the two programs further and to phase out the windfall that was perceived to result from the receipt of dual benefits.
First, Congress divided up the basic railroad retirement benefit that had been paid under prior law into two components which were discussed in this Court, by this Court, in Hisquierdo two terms ago.
The lower tier of those benefits is exactly comparable to what the person would receive under the Social Security Act.
The upper tier is smaller in amount and computed solely on the basis of railroad work.
In order to eliminate the dual benefit problem, however, Congress provided that the first tier of benefits, the one that corresponds to social security, would be reduced whenever the retired railroad worker received social security benefits directly from the trust fund.
This eliminated the windfall, it eliminated the drain on the railroad retirement account, and it also had the effect of passing through to the individual beneficiary the reduction that had been made in the reinsurance payment because of the receipt of social security benefits.
Although these changes were designed to eliminate the dual benefit problem in the future, Congress did include or carry forward in the 1974 act certain transitional provisions to preserve this windfall element for certain people who may have been eligible to receive benefits under both acts prior to 1974.
This transitional or 3(h) of the Act, the section that is at issue in this case.
Section 3(h) provides yet a third tier of benefits under the Railroad Retirement Act for certain of the persons whose first tier was reduced because they were receiving dual benefits.
Thus, in effect, the third tier adds back what was taken away under the first tier, and the effect is to isolate in a separate section and as a separate benefit that portion of the combined social security and railroad retirement benefits that Congress had perceived to be a windfall or an overlap under prior law, and the act limits the eligibility for these benefits to certain individuals who may have been eligible, who would have been eligible to receive these dual benefits under prior law.
First of all, everyone who is retired and already receiving benefits under both programs on the effective date of the act, December 31, 1974, may continue to receive benefits under both programs, including the windfall element, although this windfall element is not increased with the cost of living over time.
It's frozen from the date of retirement.
For persons who were not yet retired in 1974, however, the standards for determining eligibility for being protected under the grandfather provisions depend on whether the person was... in general, on whether the person was affiliated with the railroad industry in 1974 or whether he had left the industry and had started to pursue other work.
Employees who were still working in the railroad industry in 1974 or had what the act terms 12 out of the preceding 30 months... the two of them together I would call an affiliation with the railroad industry... those persons are eligible to receive this transitional windfall benefit if they had completed the necessary ten years of railroad retirement and the necessary amount of social security work, ordinarily 40 quarters, to complete the eligibility requirements under both acts by December 31, 1974, when Congress changed the law.
In addition to these persons who still had an affiliation with the industry, Congress also included in this category long-term employees who had 25 years of railroad service even though they may have left railroad work when the 1974 act went into effect.
Persons who had left railroad work before 1974 but did not have the 25 years of eligibility were treated differently under the act.
They could receive a windfall element only if they had satisfied the length of service requirements under both acts when they left railroad work.
And the amount they received is somewhat smaller.
It's under Section 3(h)(2) of the act.
It's smaller because the amount of the benefit is calculated on the basis of what they expected to receive when they left railroad work, as opposed to later, in 1974.
Thus, if a person left railroad work in 1966, for example, and had ten years of railroad work but had not yet work 40 quarters in social security, he would not be eligible under the act to receive any windfall or carryover benefit because it was not until later that he became qualified to receive social security benefits.
The present case, challenging the constitutionality of these qualification provisions in Section 3(h)(1) was filed in 1976.
I believe Fritz was the representative of the certified class of beneficiaries under the Act who had become eligible to retire after 1974 when the act went into effect, but before January of 1977.
That happened to be the span the court defined.
Persons who were eligible to retire but were not eligible to receive the windfall benefit because they had not either been affiliated with the railroad industry in 1974 or had not completed the necessary qualifications under both acts in whatever earlier year they may have left the railroad industry.
At least... yes, sir?
Mr. Kneedler: Are there bills pending in the Congress to remedy this situation on a generous basis?
In other words, to reextend the benefits?
Mr. Kneedler: There have been bills introduced in each of the three... I guess, the last two Congresses, and those bills have not been enacted.
Mr. Kneedler: Have they made any progress at all as far as you know?
Mr. Kneedler: They have not been reported out of committee.
Mr. Kneedler: It is true that if an employee works only under one act, that for the same number of years... as Mr. Fritz, for instance, that he would receive much less.
Mr. Kneedler: If he worked only under one act in--
Mr. Kneedler: Under one act.
This is your windfall approach?
Mr. Kneedler: --Right, right.
If he worked under one Act... in other words, the reduction or the exclusion from eligibility for the windfall element puts him in the same position as if he had worked under only one act.
Mr. Kneedler: Is there any evidence in the record about labor-management connivance in reaching this result?
Mr. Kneedler: I don't think there's any evidence of labor-management connivance in... I think a reading of the minutes of the negotiating sessions, for example, demonstrate that the parties, as is typical in negotiating something such as this... there's a certain amount of give and take, but there is no suggestion that I have found that this is motivated by some animus toward persons who had left the railroad industry.
Mr. Kneedler: Does the class include people who had already retired and were eligible for the so-called double-dipping benefits?
Mr. Kneedler: No, it doesn't, because they may receive the equivalent of the full benefits they expected to receive under prior law, so it's not increased over time.
Mr. Kneedler: But, as the result of the judgment that that exception is unconstitutional also, or not?
Mr. Kneedler: That is unclear from the judgment.
The judgment... the District Court's opinion appears to find an irrational distinction only on the basis of those people who were affiliated with the industry in '74 and those who were not.
Mr. Kneedler: So are you... well, I'll put it to you this way, are you attempting to justify a difference between that group and the other groups, or do you think that group is just out of the case?
Mr. Kneedler: No, I think... I think there are degrees... Congress was drafting a grandfather clause here, and there are degrees or--
Mr. Kneedler: Must you defend that particular group, though, that particular exception?
Mr. Kneedler: --Well, I think perhaps that exception is--
Mr. Kneedler: People who have already retired and are--
Mr. Kneedler: --I think that's perhaps the strongest--
Mr. Kneedler: --But is the issue here or not, that issue?
Mr. Kneedler: --I don't believe that issue is here, no, because the District Court perceived the inequity to be only the difference between those who qualified who were not retired but were in the railroad industry in '74.
Mr. Kneedler: Mr. Kneedler, you described as the people who were not entitled to participate in the windfall benefit, you gave an example of the person who had ten years of railroad service and less than 40 quarters of social security.
I had understood... maybe I'm wrong on this... that if a person had ten years of railroad service and 40 quarters of social security service, but no 1974 connection, he would also not receive the windfall benefit.
Mr. Kneedler: He would receive it if he had completed those 40 quarters and the ten years of railroad service in the year that he left the railroad industry.
In other words, what the act does is lock at your affiliation with the industry: did you become qualified when you were still affiliated with the industry, either in '74... for those people who were in the industry when the act was passed... or in an earlier year when they were affiliated, the last year in which they were affiliated with the industry, if they left before that time?
So, what in effect the act does is protect only those dual benefits that were earned while the person was still in the industry, not those of somebody who left and then earned the right to dual benefits by taking on social security work.
Mr. Kneedler: I see.
So that if you have a person who in 1966 had ten years of service in both industries, but one of them got the ten years social security service first and the other one got the ten years railroad retirement service first, railroad service first, one would get the dual benefit and the other would not.
Mr. Kneedler: Well, I... it doesn't matter who gets it first, if the person who was qualified under both in 1966, he would get this windfall--
Mr. Kneedler: And if 1966 marked his tenth year of non-railroad work, he would not get it, but if it marked his tenth year of railroad work he would get it?
Mr. Kneedler: --Only if... this is only true if 1966 is his last year of railroad work.
That's what you're looking at.
Mr. Kneedler: I mean... well, no.
Mr. Kneedler: So that's what--
Mr. Kneedler: In one example, the last year was 1965, say, and then--
Mr. Kneedler: --Okay.
Mr. Kneedler: --he did his tenth year of--
Mr. Kneedler: In 1966?
Mr. Kneedler: --Yes.
Mr. Kneedler: No, he would not be eligible, because he'd--
Mr. Kneedler: If he did it just the converse, railroad work, last year 1965, social security work, last year 1966, he does not get it?
Mr. Kneedler: --Right.
Mr. Kneedler: But if the other... if the '65 and '66 are transposed, he does get it?
Mr. Kneedler: That's right.
Mr. Kneedler: Then you... and you do purport to defend that distinction?
Mr. Kneedler: That's right.
Because what... essentially what Congress did was preserve the benefits that... the larger benefits under Section 3(h)(1) are for those who were still affiliated with the industry in 1974 and those who had 25 years of service.
Congress... the reports on the bill say that these people had the strongest equities and the report submissions by the Joint Committee for Labor and Management said that this... indicated that this equity was because they still had an attachment, affinity for the industry.
But Congress did not totally exclude the possibility of eligibility for people who left before 1974.
It simply dealt with them under a different section, and said they too can be eligible as long as they accrued their entitlement to dual benefits when they were still in the railroad industry.
If they left and then went out and did their social security work afterward, then they did not accrue their dual benefits while they were still in the industry.
Mr. Kneedler: If a person who had ten years of... would qualify the way I described a moment ago, in addition had a current connection in 1974, would that increase his benefit?
Increase his dual benefit?
Mr. Kneedler: He would be--
Mr. Kneedler: He wouldn't have... I see, he couldn't have retired from the railroad industry under that hypothesis because--
Mr. Kneedler: --Right; that's right.
Because he comes, because he came back in 1974.
The distinction drawn here furthers a number of the statutory purposes of the act, and since this does not, since this act does not exclude on the basis of a suspect category, or exercise of a fundamental right, it is sufficient that the category be rationally related to legitimate Government purposes.
Now, first, this Court stated in Hisquierdo two terms ago, citing the committee reports on the act in the 1930s, that the purpose of the act was to provide retirement benefits for persons who were pursuing careers in the railroad industry, and so to provide them with the opportunity to live out the closing years of their life in comfort.
Well, the line drawn under Section 3(h)(1) accomplishes this purpose because when the act was passed the persons who were pursuing their careers in the railroad industry were those who were still affiliated with it, or people who had spent 25 years in the industry by that time had pursued the major portion of their careers in the industry.
The other people who had left the industry were pursuing their careers elsewhere.
Second, in a related purpose of the act, which was also identified in Hisquierdo, was to provide an incentive for older workers to retire and thereby to open up more job opportunities for younger workers and more rapid advancement.
Section 3(h)(1) is consistent with this purpose as well, because it is only necessary to provide an incentive to retire for people who are still in the railroad industry.
For people who have left there would be no... even if the windfall benefit was an incremental incentive to retire, their retirement would not open up jobs for younger workers.
The third purpose that is served is the one that I previously mentioned and one that's furthered by any grandfather provision, and that is trying to accommodate the equities if persons who may have been affected by a change in the law.
Mr. Kneedler: --Well, does it encourage anybody to return to the railroad industry?
Mr. Kneedler: Well, the act does provide that if a person returns to the industry after 1974 and had a current connection with the industry when he retired, then he is also eligible to receive a windfall benefit.
Mr. Kneedler: So this is sort of... has a counter influence as far as opening up positions in the railroad industry?
It brings people back to it, older people back to it?
Mr. Kneedler: Well, if they came back in the industry they would be eligible for the windfall benefit which would then create an incentive for them to retire, so even if they did come back, it creates an incentive for them to retire and therefore actually furthers the purpose of the act.
Mr. Kneedler: But while they're there there's no vacancy?
Mr. Kneedler: That's right.
There is no vacancy.
Mr. Kneedler: Or a vacancy was filled?
Mr. Kneedler: That's correct.
Of course, in some of these cases the person who came back may have been someone who was laid off or had been laid off for a fair amount of time, or his former railroad employer went out of business, something of that nature.
And so, when he came back, his equities might be quite strong because the act still requires that he have completed his ten years of railroad service and his social security service before 1974.
Mr. Kneedler: What standard do you think we have... judging this case by?
Do you think you've finished your case when you say, here is what Congress was trying to accomplish?
Here's what they did, (a), (b), and this is what they were trying to accomplish by it?
Mr. Kneedler: Yes, I do.
Congress, for the reasons I've explained, clearly had substantial reasons for doing what it did, and under this Court's decision--
Mr. Kneedler: None of them included dissolvency or did all of them?
Did... was one of the purposes to make the fund solvent, or to keep it solvent?
Mr. Kneedler: --Yes, by all means, and to exclude certain people, to narrow the class of people who were going to continue to receive dual benefits.
Mr. Kneedler: Would that have been a... would that always be enough?
Mr. Kneedler: Yes, I believe that would--
Mr. Kneedler: Like, every other name in the phone book?
Mr. Kneedler: --Well, as long as Congress did it with some rational approach.
I suppose it couldn't take every other name and give it to every other name, and not to the other persons, but Congress certainly did it in an ordered fashion.
And the rational basis approach I've suggested is particularly appropriate in a case like this because the benefit we're talking about here is not one that was designed to meet an identifiable need that Congress saw on behalf of the beneficiaries, as is the case with most welfare or social security benefits, or even most benefits under the Railroad Retirement Act.
This benefit was a conceded anomaly that occurred under prior law solely by virtue of the fact that Congress decided to have two parallel social security-type programs rather than combining them into one comprehensive program.
So, this is not a situation where eliminating the benefit in the future for any category of persons can be presumed to have denied them of a benefit tailored to satisfying particular needs.
If there are no further questions--
Mr. Kneedler: I have one further question, counsel.
Supposing we've got two men who both retired age 65, on their 65th birthday.
And each of them has worked ten years in the railroad industry, and ten years in social security work, but not in the railroad industry.
And one of them for the two weeks before he retired was a railroad man and the other one for the two weeks before he retired was a non-railroad man.
One gets the double benefit and the other does not.
Explain how that's rational.
Mr. Kneedler: --Well, on the basis of your hypothetical, you said, for two weeks before?
Mr. Kneedler: Right.
Mr. Kneedler: If the person who was the two weeks--
Mr. Kneedler: They both retired in 1970, at their 65th birthday.
Mr. Kneedler: --In 1970?
Mr. Kneedler: Yes.
Mr. Kneedler: Well, in... if they retired before the effective date of the act, if they retired before 1974, they retain their full--
Mr. Kneedler: I see.
Mr. Kneedler: --They retain the windfall element.
This only affects persons who retire after the effective date of the 1974 act, people who are not yet retired.
Mr. Kneedler: I see.
And if in my example, then, one of them continues to, doesn't... actually retires later on, it depends on which industry he's in when he retires?
Mr. Kneedler: Well, no; it depends on which industry he was in in 1974.
If he was in the railroad industry in 1974, he gets the windfall element.
If he was not in the industry in 1974 but he comes back to the industry and retires from railroad work, he gets the windfall benefit.
Mr. Kneedler: Yes.
While missing the very... qualifying for social security in the first place, you have to have worked for... well, I don't know whether it's a certain number of quarters or a number of years and made a certain minimum amount of money, and I suppose there are some people who come awfully close but just don't make it.
Mr. Kneedler: That's right.
In a statute such as this any eligibility criterion involves questions of line-drawing where people on one side of it have what may appear to be almost as strong equity as those people on the other side.
The Congress has to deal in categories of persons in a vast program like this and the categories drawn here are based on reasonable grounds.
No further questions?
Chief Justice Burger: Mr. Byron.
ORAL ARGUMENT OF DANIEL P. BYRON ON BEHALF OF THE APPELLEE
Mr. Byron: Mr. Chief Justice, and may it please the Court:
The correct issue of this appeal is this: did the District Court commit error when it found that the Congress's elimination of plaintiffs' then-vested retirement benefits denied them equal protection under the law?
Based upon the undisputed record made below, the District Court, we submit, rightly concluded that the 1974 act's classification which is here involved was utterly irrational.
It is my intent here to emphasize several of the primary reasons why the classification is indeed irrational.
Number one: I want to take up the point that we make in the briefs about this being contrary, the classification being contrary to the actual purposes of the act.
Number two: I want to take up briefly the fact that they are contrary to the Railroad Study Commission's recommendations made to Congress pertinent to resolving solvency problems relevant to the act.
And number three: the fact that regardless of the above, the distinction made in the act between the pertinent vested classes here to be discussed is in and of itself irrational.
First, the classification is contrary to the actual and declared purposes of the 1974 act.
Congress expressly declared in the purposes section of the report, twice, its intent to preserve all retirement benefits which were then vested under prior law.
Indeed, the Railroad Board itself, the defendant in this cause of action, assured Congress of this during the hearings on this bill.
Mr. Kneedler: Well, Mr. Byron, how can you say that when in fact it's conceded that the legislation if read according to its meaning has the effect that you claim is unconstitutional?
Mr. Byron: I say that because the Railroad Board itself assured Congress that our class was included.
Mr. Kneedler: But the Railroad Board isn't vested with the legislative power of the United States, it's Congress.
Mr. Byron: No, but I think it is easy to understand as we go through the legislative history here why Congress thought they were including everyone, but nevertheless did not; that the plaintiff's class was actually exempted.
You're absolutely correct that Section 3(h) does exclude the plaintiffs by its operation.
However, I would think it defies logical analysis to read Section 3(h)(1) and (2) and understand who might be, who might lose their vested benefit.
In fact, the act does not speak of vesting at all, and when you look at the committee reports, they never mention divestment.
The reports mention the concept that everybody who had then, were then vested under both systems, social security and railroad retirement, was actually covered under the act.
And they make it a primary purpose of the act.
And then they go on to say... because I pick up the point that the defense has made... that this is a windfall.
And they seem to be critical of the fact that this is a so-called windfall... which, by the way it is not.
But they seem to be critical of that.
Congress put in the primary purposes section of this statute, Congress said,
"Dual beneficiaries cannot be criticized because they relied upon the law as it then existed. "
And that's exactly what our people do.
They fit squarely within the pegs of any equities that were discussed by Congress.
Mr. Kneedler: Mr. Byron, do you suggest that a statute enacted by the Congress is constitutionally vulnerable because some erroneous information was submitted to the Congress?
Mr. Byron: Mr. Justice, I've... I'm suggesting that in part based on the Delaware Tribal Systems v. Weeks, the note by Justice Stevens, I believe, in there, that while the motives of Congress, for example, is not... does not... germane to the decision here.
However, it has some relevancy as to what are the legislative objectives of the statute.
So I'm saying it has some relevancy; however, it is not a dispositive factor.
I think the concern here is the fact that this is written into the primary purposes section of the statute and they continue to pound away at the point that the Congress does not mean to criticize dual beneficiaries.
And if they really meant that, then they would not have meant to divest our rail-roaders, who were actually covered under both laws and had fully performed ten to 20 years of railroad service and were inactives and had then gone out.
But the point I wanted to make was the Railroad Board, after reviewing the final bill as it pertains to 3(h), in their written statement to Congress two of the three Railroad Board members said this, and I ask the indulgence of the Court to just give a very short quote:
"It is sufficient to state here that existing rights to such benefits will not be adversely affected by this bill. "
This was the recommendation of the Commission on Railroad Retirement and this bill so provides, and this bill does just the opposite.
That was the written testimony of Railroad Retirement Board members Neal Speirs and Wythe Quarles at the Senate hearings on this bill at page 289.
Mr. Kneedler: Well, then that turns back to what were existing benefits or vested benefits at that time, does it not?
Mr. Byron: Yes.
Vested benefits as of the date of changeover to the new act, which was December 31, 1974.
Mr. Kneedler: You're not suggesting the act doesn't, shouldn't be read as doing what the District Court said was unconstitutional?
Mr. Byron: I don't understand the question, Mr. Justice.
Mr. Kneedler: Well, you... the act did hurt your client?
Mr. Byron: Fine... yes.
Mr. Kneedler: There's no question that on its face it does.
Mr. Byron: No, Mr. Justice, what--
Mr. Kneedler: You're not suggesting construing it otherwise?
Mr. Byron: --No, and in fact, there is no question about that.
Unfortunately, when you read through 3(h)(1) and 3(h)(2) you can come to no other conclusion.
However, it is so complex that it defies logical analysis unless you have an understanding of the legislative history.
The reason why you understand this is because you see the labor-management negotiations that went on prior to the time that the bill was provided to Congress.
Mr. Kneedler: Well, nevertheless, this is what the act does.
Mr. Byron: Yes.
There is no question.
Mr. Kneedler: And it does that, and the question is whether... let's just assume there wasn't a fragment of legislative history.
I suppose you would... you still have the problem of saying that it's irrational.
Mr. Byron: Well, Mr. Justice, there is this question about the rational connection to the legitimate objectives of the statute, but the objectives if the statute were to cover our class.
Then, if the act does the contrary, it is irrational because the connection must be connected--
Mr. Kneedler: Why?
Which is irrational?
The act isn't.
Maybe the, maybe somebody's statement about what the purposes were is erroneous.
Mr. Byron: --As I understand equal protection analysis, we're looking at the legislative goals of Congress and our concern here is, what did Congress really... legislative intent, and what did Congress really intend to do here?
Mr. Kneedler: What better source is there than the statute itself for finding out what Congress wanted it to do?
Mr. Byron: The written primary purposes of the bill contained in the House and Senate reports which say contrariwise.
Mr. Kneedler: You say they would override the express declaration... the enacted legislation would?
Mr. Byron: Given the complexity of 3(h)(1) and 3(h)(2) I would submit, yes, and in further response, President Jerry Ford at the time vetoed this legislation in large part because of the failure to understand the great complexity of the act.
In fact, I might just parenthetically--
Mr. Kneedler: Whose failure to understand it?
Mr. Byron: --Pardon?
Mr. Kneedler: Whose failure to understand it?
Mr. Byron: President Ford said that it defied analysis, essentially, in his veto message to Congress.
And he with the veto was overridden by a great a margin.
In fact, it came up in the Carter-Ford debates--
Mr. Kneedler: Congress did it twice.
Mr. Byron: --Pardon?
Mr. Kneedler: Congress did what you say it really didn't intend to do twice.
Mr. Byron: Right.
Because what they--
Mr. Kneedler: Both by two-thirds vote.
Mr. Byron: --That's right, Mr. Justice.
What you have to understand is that they thought they were doing something other than what they actually did when they wrote 3(h) and 3(h)(1).
What we're saying is that... we're not saying the Railroad Board deceived, that they read the bill and its purposes to--
Mr. Kneedler: After the President says, you really don't understand what you're doing, they said, we understand perfectly what the act says, and passed it and overruled his veto.
Mr. Byron: --But, but, Mr. Justice, no one raised the question, the veto message did not say, we have a divestment problem here.
Because you could not perceive it.
The committee reports do not speak of divestment.
In fact, the committee reports suggest that the Railroad Study Commission which reported to Congress after analyzing the act for two years... reported on June 30, 1972... that everyone was to be protected, and I think, when you read through the legislative history and the primary purposes section, you would understand why Congress thought they were doing what the Railroad Study Commission told them to do, because--
Mr. Kneedler: Let me ask you... approach it another... suppose it was perfectly clear from the legislative history that Congress intended to do what the act says on its face and suppose... I suppose you would still be here arguing that it was irrational.
Mr. Byron: --Yes, because... that's right, Mr. Justice, because we are submitting without question that there is no rational distinction between the similarly situated vested classes, those with ten to 25 years of service.
Mr. Kneedler: Aren't these really the... isn't this really what you have to win on here if you're going to win?
Mr. Byron: Mr. Justice, I'll take a win on any particular point, that or any other.
But I think it is correct, that is, one of our points of analysis here to be discussed.
I want to mention, though, the Congress's other goal.
The question was put to Mr. Kneedler about the conserving of fiscal resources as being a basis, a sine qua non for actually having this statute pass muster with the Supreme Court.
That is not enough, obviously, because if it were you would be saying that every congressional cutback would avoid and be immunized from scrutiny under the equal protection clause.
And that's not what we're saying, and I don't think Mr. Kneedler is saying that either.
I think he is saying we still, you must still find rationality on this, and there is still equal protection analysis.
We are not here arguing a toothless standard.
But on this question of conservation of fiscal resources, it's very interesting because the Railroad Study Commission reported to Congress, concerned itself with the elimination of a 9 percent actuarial deficiency, and that is well and fine.
However, that was not resolved or furthered by the elimination of the plaintiff's benefits.
Instead, these benefits were confiscated so as to help fund other unrelated benefits that were liberalized.
The liberalization caused the deficiency to escalate to 12 percent, contrary to the very purpose that they were negotiating on this act.
The 3 percent increased deficiency which was created by the Joint Labor-Management Negotiating Committee was funded in part, as we point out in our briefs, by a trade-off of the plaintiffs' benefits.
And that, we submit, is contrariwise to what they were supposed to be doing to resolve the actuarial deficiency.
And the act's classification was also contrary to the Study Commission's recommendations to Congress in two ways.
Number one, the Commission strongly and repeatedly urged the retention of all vested rights to retirement benefits as of the new proposed changeover date, which would be December 31, '74.
The Commission also repeatedly stated that any liberalization of benefits must... and this is one of the few times the Commission used the word "must"... they said, must be accomplished without impairing any presently vested rights.
Further, they emphasized that liberalizations under this act can only be funded by an increase in taxes on employer-employee sufficient to pay for the liberalizations.
And that makes every sense in the world, because Congress was trying to resolve an actuarial deficiency, not create a greater one.
But the JLMC, but what happened here is, you sent the fox out to guard the chicken coop.
And the fox goes out and creates another 3 percent deficiency and the only way you can get that job done is to, in the words of the JLMC, "hit" or eliminate the plaintiff class because they're inactives and they don't have to answer to the unions anymore.
Now, the distinction here--
Mr. Kneedler: Mr. Byron, are you arguing... it seems to me you're arguing that any cutback that didn't either exclude all vested benefits or no vested benefits would have been unconstitutional?
Mr. Byron: --No, I am not.
Mr. Kneedler: But is... well, the presentation to Congress was, we're going to preserve all vested benefits, and you seem to place great emphasis on the vesting concept.
Mr. Byron: Yes, I do, because, you see, the JLMC in the colloquies they engaged in in Congress assured Congress everyone was being vested.
And secondly, the Commission recommended that.
They saw the distinction here but--
Mr. Kneedler: I understand all that, but as soon as you admit that Congress could have constitutionally cut back on some of the vested benefits, it seems to me your whole argument is beside the point, the only argument you've made thus far, is beside the point.
Mr. Byron: --Mr. Justice, it is not... the... because we're looking at what the legislative objectives in this particular reported bill and statute are.
In other words, if there's actual legislative goals and objectives of this act; and this distinction does not further but is contrary to those goals, then I submit that under equal protection analysis we must have a win on that point.
Mr. Kneedler: And that the goal you're relying on is the goal to preserve all vested benefits.
Mr. Byron: Yes, and that was the goal of Congress.
Mr. Kneedler: Any cutback on that would have been inconsistent with that goal.
Mr. Byron: Yes; now, that's just... that's one argument.
However, I think the point is here that if Congress had not considered this point, then I'd say that our point would not be well taken.
But Congress here really meant to make the dividing line between the vesteds and the non-vesteds.
And they did that because the Railroad Board told them that was what was being done and the JLMC told them that's what was being done, and they also believed they were following the Commission recommendations when in fact they were not because of the Sections 3(h) and 3(h)(1).
Mr. Kneedler: Mr. Byron, who misled Congress?
You say that the Board determined this, someone else determined something, and you determined that 135 people didn't understand that?
Mr. Byron: Yes.
Mr. Kneedler: Who misled them?
Mr. Byron: --In my opinion, the JLMC.
Mr. Kneedler: In your opinion?
In what record can you point to your opinion?
Or is this your gut reaction?
Mr. Byron: That is not my gut reaction.
It is in our brief at various points where we point out that colloquies... and let me explain.
This, you know, it's a good--
Mr. Kneedler: Well, do you take the position that Congress was misled?
Mr. Byron: --Yes, and I think that helps explain--
Mr. Kneedler: And then can't you oblige and say by whom or by what?
Mr. Byron: --And JLMC.
And I don't think the Railroad Board intentionally deceived Congress.
However, they assisted this deception by stating that our people were covered when they in fact were not and everybody went about passing a statute without the understanding that--
Mr. Kneedler: Who got them to do that?
Mr. Byron: --Well, they asked the JLMC to negotiate the statute.
Mr. Kneedler: Mr. Byron, following up on my brother Marshall's question, you've referred several times to the statement of primary purposes of the act.
Mr. Byron: --Yes.
Mr. Kneedler: Where does one find that?
I've looked in the U.S. Code and I've looked in the statutes at large.
Is it a part of the enacted legislation?
Mr. Byron: It's not.
It's in the report of the House and the report of the Senate, and it's a--
Mr. Kneedler: Oh, is it... it's not a statement of purposes contained in the legislation itself?
Mr. Byron: --No.
It's stated in the report, and it says, here in the front, first page, "Principal purpose of the bills", in the second paragraph.
Mr. Kneedler: What you're saying then is that Congress made some mistakes.
Mr. Byron: Yes, but not just made a mistake.
I'm saying, further, that Congress thought they were including our class when they actually weren't because they saw, everybody saw the dividing line here between vesteds and non-vesteds, and the problem here is that the actuarial deficiency was not resolved by our class.
The problem was that they went out and made the deficiency from 9 percent to 12 percent and then used our class as part of the trade-off to fund the other 3 percent.
But I think... I want to get this point about the real distinction here, the rational distinction between the classes, because we're only talking here about a distinction based on timing.
It's a new timing requirement, you see, that divided the vesteds, the similarly situated vesteds, between... all of us, all of the vesteds, had 10 to 25 years of railroad service and ten years of social security, thereby earning a full dual benefit.
However, and for the first time ever, Congress in 3(h)(1) and 3(h)(2) brought about this new current connection requirement and gave four different ways in which our people who were vested back on December 31, 1974, could continue to be vested under the new act.
Actually, what that is is a divesting rule, and the Government concedes that only timing of their prior railroad service is the question here involved.
And this new timing requirement, you understand, amounted to a changing of the vesting rules ex post facto, i.e., after the game was played and the benefit had been earned and acquired.
Its sole purpose as the legislative history we've put in our brief shows, the sole purpose was to "hit" and to "eliminate" the inactive railroaders who had no... that the unions, they felt, had no allegiance to anymore.
Somebody had to go, in their opinion, and that was not true, because as we've said, it was only true because they raised the deficiency to 12 percent.
Timing has nothing to do with the extent or the length of the railroaders' credited service.
It has nothing to do with the earning or the gaining of the retirement benefit.
It is non-sensical, in fact.
The timing distinction is not based on character of service, length of service, or the amount of the contributions of the employer or the employee.
A railroad retirement benefit, as the Commission noted, is earned on the basis of past service and past contributions, not present service or some so-called tenuous connection like present affinity--
Mr. Kneedler: Mr. Byron, isn't it true that in a lot of pension situations a person who retires with 20 years of service in 1974 will get a higher pension than someone who retired with 20 years of service in 1970, say, simply because there's been a decision to increase benefits; and therefore the timing of the date of retirement has a rational... provides a rational explanation for why you get a higher benefit?
Mr. Byron: --Well, I can't... I'm not familiar with the hypothetical I've never seen that--
Mr. Kneedler: But would that be irrational?
Say there's inflation and say that people amend their plan in 1974 and say that from here on people who have 25 years of service will get a greater benefit than they used to get, than the people used to get who retired two years ago?
Isn't that all that's really happened here?
Because you're just saying the railroad service is the more valuable benefit, more valuable criterion for eligibility, and that happens to come later.
Therefore, you get a higher benefit.
Mr. Byron: --No, that is incorrect, in our opinion.
That what we were saying here is that... we're talking about past earned retirement benefits, we're not talking about getting a new benefit or an additional benefit.
Mr. Kneedler: Put the vesting concept to one side.
I understand you are objecting to the vesting.
But if there have been no vesting here, would my hypothetical be any different?
Mr. Byron: Well, that might be the case if there were no vesting or no actually having earned it, but if you're talking about non-vesteds, they're in a different category and that's a different situation.
But what our concern is that these people have earned their vested retirement benefit.
It was vested under prior law at that time.
In fact, the Government, the Railroad Board, had a benefit pamphlet, the last one before the act was February, 1974.
In that benefits pamphlet, they said, if you have ten years of railroad service, you have a "permanent" right to this benefit.
Now, I submit that having this destroyed and emasculated in the way it has been is not the same, or the equivalent of a permanent right to a benefit.
They relied on the Government.
And what did they get for their reliance?
They lost this so-called windfall.
And it is not a windfall.
A windfall is an unexpected sum of money.
This was expected.
This was relied upon by these people.
It is a windfall only because the Railroad Study Commission said it's an excess dual benefit if you assume, arguendo, that both benefits were earned under social security.
But, of course, since they were not earned under social security, the hypothetical doesn't stand up and so the windfall is not there.
It's not a real windfall, it's not a gratuity that these people were being given.
It was an earned retirement benefit.
Mr. Kneedler: Can you distinguish in fundamental terms between the Railroad Retirement Act and the Social Security Act as to purpose and objective?
Mr. Byron: Yes, Mr. Justice.
Mr. Kneedler: What are the distinctions?
Mr. Byron: As the dissent--
Mr. Kneedler: They're contributory, aren't they?
Mr. Byron: --They're both contributory.
However, social security contributions were half that of the railroad retirement.
Secondly, as the dissent pointed out in Hisquierdo, the--
Mr. Kneedler: How would the amount affect the vested or non-vested aspect?
Mr. Byron: --In this way: as the Railroad Board pamphlet showed, if you have past service, plus in addition to that made the necessary contributions over those particular years of past service; then you earned your permanent right to the benefit.
So, it was a key or an element to earning the benefit.
Now, I wanted to take up the argument of the Government about what is this great rational distinction between these ten to 25-year vesteds?
Mr. Kneedler: Would you still be here if they... if the law had been changed so as to destroy all of the windfalls?
Mr. Byron: Because the act had been--
Mr. Kneedler: Suppose all vested benefits had been terminated?
Mr. Byron: --Your Honor, I'd have a different class.
Mr. Kneedler: Well, you'd have quite a different class.
Mr. Byron: And I'd have a much more difficult problem.
And I... no question about that.
Mr. Kneedler: So this reliance business, that doesn't carry the day, does it?
Mr. Byron: It... it assisted--
Mr. Kneedler: The fact of vesting in reliance, in that statement in the pamphlet?
Mr. Byron: --Yes.
That helps carry the day.
I mean, all of this taken together--
Mr. Kneedler: But it wouldn't if they'd--
Mr. Byron: --Well, no, I disagree with that.
Mr. Kneedler: --If they'd really been mean about it, it wouldn't.
Mr. Byron: No, I disagree in the sense that if I had that class to come here and present--
Mr. Kneedler: --you'd have a tough case.
Mr. Byron: --I'd certainly be arguing that.
Mr. Kneedler: But you'd have a tough case.
Mr. Byron: I'd have a tougher case than I've got right here.
The reason is because they say this current connection rule and the work-in-1974 rule is intended to favor career railroaders who have greater equities, or as they put in their reply brief, a greater stake to dual benefits.
But the protected class has no more career time than the plaintiffs' divested class and they have no greater "stake" than our railroaders.
They have, number one, no greater contributions; they have no greater length of service; and they have no greater vesting basis.
In fact, they have the same exact amount of time, ten to 25 years.
But this rule, I submit, is antithetical to a career.
It speaks of a current connection, not a career connection.
No one is calling this the career connection rule.
Nor was it ever suggested in Congress or anywhere else that it might be.
It says, for example, all you need to do is have a 1974 connection and you can, then disregard any career notion that you might have.
Of equal importance, of course, is that neither Congress nor the JLMC ever suggested such a connection between the rule and a career during all the negotiations under the act.
Now, of course, trying to make career railroaders out of 10-year men... and the question was put to Mr. Kneedler; I think it's a good question... is contrary and antithetical to the purposes of the act ever since 1937.
This is so because a major purpose of the act is to encourage elder workers.
They don't say career workers, they say older workers... to retire so as to encourage younger workers to take their place, and to do this in a declining employment industry.
It moved from 1,280,000 back in the old days to... in the 1970s... to 500-and-some thousand.
It's now in the 400,000-level.
Mr. Kneedler: All of these things certainly are persuasive that Congress acted unwisely, possibly even unfairly.
But how do we find out about the statute except by reading the statute, if the language is clear?
Mr. Byron: --We find that out by looking at the House and the Senate reports, and--
Mr. Kneedler: If the language is clear?
Mr. Byron: --The language is not clear.
You know, I understand that if you take the legislative history... if you take the legislative history, and you look at what the Railroad Study Commission said, and you understand that Congress's determination for dividing the classes was a vested basis, then it's clear that our class was to be included.
But even... but as I'm saying, assuming arguendo regardless of that fact, the point is, there is no rational distinction here because we are not arguing here over a welfare benefit, for example, or a gratuity, or an unexpected sum of money.
This is not a new benefit that's being awarded.
And I want to mention, just very briefly, the fact that historically the current connection use is negated here, because it was never used in connection with the basic retirement benefit, and it was never used as a divesting mechanism, which is what it's used here for.
It has only been used in connection with a brand new supplemental benefit or some other new benefit to be awarded.
And we wouldn't complain if that were the case.
But that is not the case here.
This is not, we're not talking about trying to get some additional benefit that we're being denied.
We're asking for a benefit that our class already had.
It was always a reward for an additional benefit, so they... historically, it has never been used in the context here.
And indeed, of course, the Railroad Study Commission never considered it and Congress never really addressed it in the hearings.
Now, we mention several other points that we feel heighten the irrationality of the statute here involved, including the reliance on benefits and the vested nature of them.
We also point out that the age and inability of our railroaders to rework their careers... because, you see, they're all of advanced age... they cannot relive their lives; they cannot recoup their loss by some other means of employment.
For our railroaders, the loss comes about at a point when it's too late for them to say, well, I guessed wrong, and I've got to go back.
They can't do it.
But, of course, there is no encouragement under this act to get them back.
In summary, let me say that to reverse the decision of the District Court in this case would be to say that the plaintiffs, whose working lives are essentially over, guessed wrong as to that most finite and once-only resource, their own working years and lives; that what they were told by Congress were the requirements for vesting, and what they were told would be their reward for staying with the industry for ten years--
Mr. Kneedler: Mr. Byron, could you give me an example so I'll understand it better of a man who could have made a different choice in the past and qualified?
Mr. Byron: --Yes.
I believe you touched on it before when you said that if you flip-flop, if you have social security first and railroad retirement second, you qualify and get the dual benefit.
However, if you did it conversely and had railroad retirement first and was encouraged, actually... because the act was trying to encourage these workers to leave, so our people followed the purpose of the statute.
They left, and now they've lost their benefit because of it.
Now, they would not vest.
Mr. Kneedler: Well, they didn't lose the railroad benefit that it vested.
Mr. Byron: Yes--
Mr. Kneedler: And they did get the social security... what did they... and they did get additional benefits by additional work in the social security program, didn't they?
Mr. Byron: --No, no.
We're talking about the same dual... in other words, we're using two people, the same, both entitled to a full dual benefit.
That means he gets, you know, a benefit because of ten to 25 years in the railroad service and another benefit because he had 40 quarters of social security.
Now, the one who did his conversely, or who was lucky enough to work one day in 1974 on the railroad--
Mr. Kneedler: I understand that.
But we're talking, you're talking about the choice, that he was kind of misled.
Mr. Byron: --Right.
Mr. Kneedler: And it is true that at the time he left railroad service he knew he was going to get a lesser benefit, or did he?
I'm trying to place--
Mr. Byron: No, no.
He did not.
Mr. Kneedler: --Is the railroad service always more--
Mr. Byron: No, and they followed... the benefits pamphlet said they had a permanent right to it.
Mr. Kneedler: --I see.
Mr. Byron: But they... so, they did not, and what they're saying is, there's an excess of--
Mr. Kneedler: What did Hisquierdo case say about that contract you've been talking about, that pamphlet?
Mr. Byron: --Well, Hisquierdo did not bring it up.
And in fact--
Mr. Kneedler: It said it wasn't contractual, didn't it?
Mr. Byron: --It said... yes, the majority said it was--
Mr. Kneedler: It was not contractual.
Mr. Byron: --noncontractual, the dicta did.
Mr. Kneedler: Well, where do you get a contract?
Mr. Byron: Well, I'm not saying... I'm not here arguing under the due process component.
I'm arguing under the equal protection component.
Mr. Kneedler: But you are arguing contract?
Mr. Byron: --Well, I'm saying it's something that can, certainly.
It's certainly something more than a gratuity or a welfare benefit, and I think... you know, I take note, Mr. Justice, that in some of your analyses under the equal protection analysis, that the kind of property that is involved here--
Mr. Kneedler: I'd be very interested--
Mr. Byron: --has some bearing.
Mr. Kneedler: --I'd be interested if you'd give me one that was a majority opinion.
Chief Justice Burger: Your time has expired.
Mr. Byron: I see my time is up.
Chief Justice Burger: Your time has expired, Mr. Byron.
Mr. Byron: Very well.
Chief Justice Burger: Do you have anything further, Mr. Kneedler?
ORAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF THE APPELLANT -- REBUTTAL
Mr. Kneedler: Just several points I wanted to make.
We submit that it is not necessary to look beyond the plain meaning of the language of the act to determine that the Appellee class was excluded, but if it were, the committee reports on page 12 of each report could not be clearer.
They both say it in identical language, '74... they would not receive a dual benefit upon retirement unless they also had fully qualified under social security by the close of the year prior to '75 in which they left railroad service.
If they had so qualified under both systems at that point, however, they would receive dual benefits.
So Congress plainly knew what it was doing.
Secondly, Appellee suggests that all, that Congress really had to take an all-or-nothing approach.
It either had to wipe out what he refers to as vested benefits, which I think are more properly referred to as an expectation of receiving benefits under prior law.
Congress had the choice of either wiping them all out of wiping none of them out, and could not take a middle course.
The Congress was faced with a serious financial problem in the railroad retirement account.
And Congress tried to accommodate the financial needs of the system against what are inevitably degrees of equity among people who may have had expectations under prior law.
The concept of reliance really has no basis here, because as was pointed out in Hisquierdo these benefits are not contractual.
Railroad retirement is a direct parallel of social security, and this Court made clear in Flemming that Congress can change those.
Anyone who was, who had enough--
Mr. Kneedler: Mr. Kneedler, I understand the legal argument based on Flemming.
Let me just be sure I understand the practical argument your opponent makes about a man not being able to live his life over again.
Is it correct that in, say, 1955, a man who had ten years of railroad service and therefore had vested rights under that service could have been motivated to retire from railroad service with the expectation that he would supplement his retirement income by earning social security benefits which Congress has now taken away from him?
That is correct, is it not?
Mr. Kneedler: --Well, I think it's... yes I think it's conceivable that persons could have done that.
Mr. Kneedler: Well, he would have been carrying out the purpose of the Railroad Retirement Act when he did it, because part of the purpose was to encourage early retirement.
Mr. Kneedler: Well, yes, but not in the... I mean, the purpose is to... is... talk about early retirement.
It suggests going on the retirement rolls.
Mr. Kneedler: Or getting out of the railroad business.
Mr. Kneedler: Well, by retiring.
I mean, that's what the Railroad Retirement Act is directed at, in this context, is retiring.
Easily... what you're referring to is--
Mr. Kneedler: Well, it would have been consistent with their purpose to go to work as, say, a milkman or a baker driver or something else, wouldn't it?
Mr. Kneedler: --That's right, but--
Mr. Kneedler: So that these people that I am discussing in my hypothetical did fulfill the purpose of retirement, whole retirement program by leaving with the understanding they would get more money under social security?
Mr. Kneedler: --Yes, it is... I mean, it's conceivable that there could be people who did that, but I think it would be a considerable leap to say that--
Mr. Kneedler: I understand.
You're not conceding that that--
Mr. Kneedler: --I concede that that would be the majority of the persons in the class.
And Congress can, I think, legislate on the basis of what it could presume to be the characteristics of the class as a whole rather than, rather than in certain individual cases.
Mr. Kneedler: --Why wouldn't that be a typical person?
Seems to me I've given you a typical example of a class member, haven't I?
Mr. Kneedler: He may have had an expectation but in terms of that being the motivating factor for his leaving the railroad industry, I think that I don't really know--
Mr. Kneedler: It's certainly not unreasonable.
I know a lot of people in the Navy, for example, who calculate their retirement benefits by different choices.
And if he knows he's earned his railroad benefit and he can increase his social security benefit, why wouldn't that be a perfectly rational, normal motivation, one we should assume he made?
You say it's legally irrelevant.
I understand that.
Mr. Kneedler: --Right.
Mr. Kneedler: Going on, why should we--
Mr. Kneedler: No, I... of course, I think that just goes back to whether he had an expectation under prior law.
Mr. Kneedler: --You are saying, well, maybe he did that it's too bad.
Congress can be rough on these people if it wants to.
Mr. Kneedler: That's right.
Mr. Kneedler: Yes.
Chief Justice Burger: Thank you, gentlemen.
The case is submitted.