Weyerhaeuser Co. v. United States Railroad Retirement Board

503 F.3d 596, 2007 U.S. App. LEXIS 22615, 2007 WL 2753305
CourtCourt of Appeals for the Seventh Circuit
DecidedSeptember 24, 2007
Docket06-3455, 06-3763
StatusPublished
Cited by6 cases

This text of 503 F.3d 596 (Weyerhaeuser Co. v. United States Railroad Retirement Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weyerhaeuser Co. v. United States Railroad Retirement Board, 503 F.3d 596, 2007 U.S. App. LEXIS 22615, 2007 WL 2753305 (7th Cir. 2007).

Opinion

MANION, Circuit Judge.

Under the Railroad Retirement Act (“RRA”), an employee who works for a railroad employer is entitled to benefits based, in part, on the employee’s years of service with that employer. The intervening respondents received their paychecks from Weyerhaeuser Company (“Weyer-haeuser”), but they worked for DeQueen and Eastern Railroad (“DeQueen”), which is a subsidiary of Weyerhaeuser. Railroad carriers such as DeQueen are covered employers under the RRA. Weyerhaeuser did not credit these employees for that railroad service. The Railroad Retirement Board (“Board”) found in favor of four of the employees and credited them for their prior service. Weyerhaeuser does not dispute that four of the intervening respondents should be credited retroactively for four years’ service. The Board, however, determined that the four employees were entitled to retroactive RRA service credit beyond the four years automatically allowed by statute. The Board also concluded that the other two intervening respondents were not entitled to retroactive RRA service credit. Weyerhaeuser appeals from the Board’s order granting the four employees retroactive service credit beyond four years. The four employees granted retroactive service credit intervened and appeal, claiming they were entitled to additional years of service credit, even beyond the years awarded. The two employees denied retroactive service credit also intervened, claiming they were also entitled to retroactive service credit. We affirm in part, reverse in part, and remand in part.

I.

This case involves the Railroad Retirement Act of 1974, 45 U.S.C. § 231 et. seq. (“RRA ”). The RRA provides “a system of annuity, pension, and death benefits for employees of designated classes of employers,” Railroad Concrete Crosstie Corp. v. Railroad Retirement Bd., 709 F.2d 1404, 1409 (11th Cir.1983) (internal citation omitted), similar to the Social Security Act. See Peppers v. Railroad Retirement Bd., 728 F.2d 404 (7th Cir.1983) (noting that because of the similarities between the RRA and the SSA, the same analysis applies on appeal). The RRA applies only to employers that provide railroad services. See 45 U.S.C. § 231(a) (2000) (defining the term “employer” under the RRA).

The Board determined that the petitioner in this appeal, Weyerhaeuser Company (“Weyerhaeuser”), is not an employer under the RRA. See Weyerhaeuser Car Shop, B.C.D., 03-40 (U.S. R.R. Ret.Bd. May 8, 2003) (Employer Status Deter.). 1 *598 However, a Weyerhaeuser subsidiary, De-Queen and Eastern Railroad (“DeQueen”), is a covered employer under the RRA.

The intervening respondents and petitioners, Ben Bramlett, Karen Neumeier, Gil Sharp, Deborah Ruth, Carol Honea and Larry Potts, 2 were all treated as Wey-erhaeuser employees for payroll purposes, although they all performed services for DeQueen. They each received checks from Weyerhaeuser and, in turn, Weyer-haeuser charged DeQueen for their salaries. Weyerhaeuser did not file RRA returns reporting compensation for Sharp, Ruth, Honea, or Potts, and only started filing RRA returns for Bramlett and Neu-meier in the mid-1980’s.

In 2002, the Board initiated an audit of Weyerhaeuser. Following the audit, the Board concluded that certain employees who were paid by Weyerhaeuser, but who performed work for DeQueen, should be considered employees of DeQueen for purposes of RRA coverage. 3 Specifically, in May 2003, the Board concluded the because Weyerhaeuser employee Potts had provided a portion of his services to De-Queen and was “integrated” into De-Queen’s staff and railroad operations, he was covered by the RRA. Potts, B.C.D. 03-40.2 (U.S. R.R. Ret.Bd. May 12, 2003) (Employee Serv. Deter.). 4 The Board concluded that Potts’ service should have been credited under the RRA and granted him retroactive service credit for four years, “as permitted by section 211.16.” Section 211.16 and its statutory counterpart, 45 U.S.C. § 231h, both provide for time limits for correcting records of compensation. Section 211.16 provides:

The Board’s record of the compensation reported as paid to an employee for a given period shall be conclusive as to amount, or if no compensation was reported for such period, then as to the employee’s having received no compensation for such period, unless the error in the amount of compensation or the failure to make return of the compensation is called to the attention of the Board within four years after the date on which the compensation was required *599 to be reported to the Board as provided for in § 209.6 of this chapter.

20 C.F.R. § 211.16. 5 In other words, any compensation possibly due but not paid or not credited more than four years before the Board receives notice of a deficiency is not recoverable, i.e., the non-payment is final. Because the filing deadline for service records for each calendar year is the last day of February of the following year, when the Board issued its May 2003 decision as to Potts, the service records for the years 1998 and earlier were deemed conclusive. Accordingly, as a result of the Board’s May 2003 decision, Potts received retroactive service credit for the years 1999 through 2002. Potts sought reconsideration of the Board’s decision, requesting additional retroactive service credit beyond the four-year limit based on 20 C.F.R. § 211.16(b). Section 211.16(b) provides: “The Board may correct a report of compensation after the time limit set forth in paragraph (a) of this section where the compensation was posted or not posted as the result of fraud on the part of the employer.” Potts argued that a 1995 efficiency study prepared for Weyerhaeuser by Anacostia & Pacific Company, Inc. (“Anacostia”) showed that Weyerhaeuser fraudulently failed to file RRA service records on his behalf. In the efficiency study, Anacostia stated that DeQueen’s “practice of contracting with [Weyerhaeuser] for the entire mechanical work force as well as certain accounting personnel is subject to challenge by the Railroad Retirement Board (‘RRB’). In essence, the RRB position is that railroads cannot escape payment of Railroad Retirement and Unemployment Insurance Taxes by contracting an integral railroad function to an affiliate under common ownership.” The Board denied Potts’ request for reconsideration, finding that Potts’ allegations of fraud were “not meritorious.” See Potts, B.C.D. 05-21 (U.S. R.R. Ret.Bd. May 17, 2005) (Employee Serv.

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Bluebook (online)
503 F.3d 596, 2007 U.S. App. LEXIS 22615, 2007 WL 2753305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weyerhaeuser-co-v-united-states-railroad-retirement-board-ca7-2007.