Stovic v. Railroad Retirement Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 14, 2016 Decided June 24, 2016

No. 14-1251

CHRIS STOVIC,

PETITIONER

v.

RAILROAD RETIREMENT BOARD AND SOCIAL SECURITY

ADMINISTRATION,

RESPONDENTS

On Petition for Review of a Decision of the Railroad

Retirement Board

Burden H. Walker, appointed by the court, argued the

cause as amicus curiae for petitioner. With him on the briefs

were Jonathan D. Hacker and Jason Zarrow.

Chris Stovic, pro se, filed the briefs for petitioner.

Debra Chesnin, General Attorney, Railroad Retirement

Board, argued the cause for respondents. With her on the

brief were Alisa B. Klein, Attorney, U.S. Department of

Justice, Robert D. Kamenshine, Attorney, and Karl T. Blank,

General Counsel, Railroad Retirement Board. Dana J.

Martin, Attorney, U.S. Department of Justice, entered an

appearance.

2

Before: HENDERSON, ROGERS, and KAVANAUGH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

KAVANAUGH, Circuit Judge: In 1995, after working in

the railroad industry for more than 30 years, Chris Stovic

retired. Upon his retirement, Stovic was entitled to retirement

benefits under the Railroad Retirement Act. For covered

railroad workers, that Act’s benefits system in essence

substitutes for the Social Security benefits program.

The distribution of retirement benefits under the Act is

overseen by the Railroad Retirement Board, a federal

government agency within the Executive Branch. In 1996,

the Board initially calculated the amount of Stovic’s

retirement benefits. Not satisfied with that calculation, Stovic

pursued a series of administrative appeals. In 1999, the Board

issued a final decision confirming its initial calculation.

Stovic did not seek judicial review of the Board’s 1999

decision within the Act’s one-year statute of limitations.

In March 2014, Stovic requested that the Board reopen its

1999 decision concerning the calculation of his retirement

benefits. Board regulations allow the Board to reopen initial

benefits determinations at any time, under certain

circumstances. In this case, the Board promptly denied

Stovic’s request to reopen.

Stovic has petitioned this Court to review the Board’s

denial of his request to reopen the 1999 benefits

determination. The Board responds first that this Court lacks

jurisdiction over Stovic’s petition for review. In particular,

3

the Board argues that the Railroad Retirement Act does not

provide for judicial review of Board decisions denying

requests to reopen initial benefits determinations. In the

alternative, the Board argues on the merits that its decision

not to reopen Stovic’s initial benefits determination was

reasonable.

We conclude that the Railroad Retirement Act grants the

Court jurisdiction to review Board decisions denying requests

to reopen initial benefits determinations. However, the

Board’s decision to deny Stovic’s request to reopen was

reasonable. Therefore, we deny Stovic’s petition for review.

I

We must first decide whether this Court possesses

jurisdiction over Stovic’s petition for review.1 The Board

argues that this Court lacks jurisdiction to review the Board’s

denial of a request to reopen an initial benefits determination.

The courts of appeals are divided on that question. We

conclude that the relevant statutory provisions provide for

judicial review of Board denials of requests to reopen.

Under the Railroad Retirement Act, courts review

decisions of the Board “in the same manner” as they would

review Board decisions under the Railroad Unemployment

Insurance Act. 45 U.S.C. § 231g. In turn, Section 5(f) of the

Railroad Unemployment Insurance Act sets forth the

following conditions on judicial review: “Any claimant, or

any railway labor organization organized in accordance with

the provisions of the Railway Labor Act [45 U.S.C. 151 et

seq.], of which claimant is a member, or any base-year

1

The Court appointed amicus curiae to present arguments in

support of petitioner’s position. Amicus has ably discharged his

responsibilities.

4

employer of the claimant, or any other party aggrieved by a

final decision under subsection (c) of this section, may, only

after all administrative remedies within the Board will have

been availed of and exhausted, obtain a review of any final

decision of the Board . . . .” Id. § 355(f) (emphases added).

The Board does not dispute that Stovic is a “claimant”

who has exhausted “all administrative remedies within the

Board.”

The key question in this case is whether Stovic is seeking

“review of any final decision of the Board.” Id. The Board

says no. But the Board’s position does not square with the

text of the statute. Section 5(f) provides for judicial review of

“any final decision of the Board.” Id. (emphasis added). The

Board’s denial of Stovic’s request to reopen is a “decision of

the Board.” And that decision is “final.” See Army Corps of

Engineers v. Hawkes Co., 136 S. Ct. 1807, 1813, slip op. at 5

(2016) (agency action “final” when it marks “the

consummation of the agency’s decisionmaking process” and

determines legal “rights or obligations”) (quoting Bennett v.

Spear, 520 U.S. 154, 177-78 (1997)). Therefore, the text of

Section 5(f) provides for this Court’s review of the Board’s

denial of Stovic’s request to reopen the Board’s 1999 benefits

determination.

The Board attempts to end-run that straightforward

interpretation of Section 5(f) by reading into the statute an

implicit limitation on the kinds of Board decisions that are

judicially reviewable. According to the Board, when

Congress wrote that any “claimant” may “obtain a review of

any final decision of the Board,” Congress meant to limit

judicial review to only final decisions made “under subsection

(c) of this section.” Here, the Board’s interpretation would

allow judicial review only of initial benefits determinations,

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not of denied requests to reopen, because Section 5(c) of the

Railroad Unemployment Insurance Act primarily

encompasses initial benefits determinations. Section 5(c)

does not encompass Board decisions denying requests to

reopen initial benefits determinations. See 45 U.S.C.

§ 355(c).

The Board offers three justifications for tacking that

implicit limitation onto the text of Section 5(f). None

warrants departure from Section 5(f)’s text.

First, the Board points out that Section 5(f) uses the term

“final decision” twice – first in setting out one of the four

categories of petitioners who may seek judicial review, and

second in defining the kinds of decisions subject to review for

all the categories of eligible petitioners. See id. § 355(f) (“any

other party aggrieved by a final decision under subsection (c)

of this section, may . . . obtain a review of any final decision

of the Board”) (emphases added). According to the Board,

because Section 5(f) limits one of the four categories of

eligible petitioners to parties “aggrieved by a final decision

under subsection (c) of this section,” the statute’s subsequent

use of the term “final decision” – which describes the kinds of

decisions that may be appealed by any eligible petitioner –

must be similarly limited.

But the Board has it backwards. It is an established

principle of statutory interpretation that, when “Congress

includes particular language in one section of a statute but

omits it in another section of the same Act, it is generally

presumed that Congress acts intentionally and purposely in

the disparate inclusion or exclusion.” Russello v. United

States, 464 U.S. 16, 23 (1983). That presumption applies

with special force in this case given that the term “final

decision” is qualified differently within the same subsection

6

of Section 5. Had Congress intended to limit judicial review

in Section 5(f) to initial benefits determinations, it could have

easily done so by employing the phrase “under subsection

(c)” when setting out the kinds of decisions subject to judicial

review. But Congress did not do so.

Moreover, Congress granted the Board the power “to

establish, by regulations or otherwise, such procedures as it

may deem necessary or proper for the determination of a right

to benefits.” 45 U.S.C. § 355(b). Yet Congress declined to

place a limit on what final Board decisions are reviewable.

That further suggests that Congress wanted courts to review

final decisions flowing from the Board-created procedures.

Second, the Board argues that Section 5(f) should be

interpreted in the same way as a separate judicial review

provision in the Social Security Act, Section 205(g). That

section of the Social Security Act provides for judicial review

of certain Social Security benefits determinations: “Any

individual, after any final decision of the Secretary made after

a hearing to which he was a party, irrespective of the amount

in controversy, may obtain a review of such decision by a

civil action commenced within sixty days . . . .” 42 U.S.C.

§ 405(g) (1976) (emphases added). Note that Section 205(g)

does not provide for judicial review of “any final decision of

the Secretary,” but only of “any final decision of the Secretary

made after a hearing to which he was a party.” As we will

explain, that text is critical to understanding why the Board’s

reliance on Section 205(g) is misplaced.

The Supreme Court has interpreted Section 205(g) to

prohibit judicial review of agency refusals to reopen initial

determinations of Social Security benefits. See Califano v.

Sanders, 430 U.S. 99, 107-08 (1977). In reaching that

conclusion, the Sanders Court emphasized the text of Section

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205(g). The Court reasoned that Section 205(g) “clearly

limits judicial review to a particular type of agency action, a

‘final decision of the Secretary made after a hearing.’” Id. at

108. Because the Social Security Act does not require a

hearing for requests to reopen, the Court held that denials of

requests to reopen were not reviewable under Section 205(g).

Id. The Court went on to note that judicial review of denials

of requests to reopen “would frustrate the congressional

purpose, plainly evidenced in § 205(g), to impose a 60-day

limitation upon judicial review of the Secretary’s final

decision on the initial claim for benefits.” Id.

Based on the similar purposes of the Social Security Act

and the Railroad Retirement Act, the Board here contends that

the Supreme Court’s decision in Sanders applies equally to

Section 5(f). As the Board points out, many courts of appeals

have agreed with the Board’s interpretation of Section 5(f)

largely because of Sanders. See Cunningham v. Railroad

Retirement Board, 392 F.3d 567, 573 (3d Cir. 2004); Harris

v. Railroad Retirement Board, 198 F.3d 139, 142 (4th Cir.

1999); Roberts v. Railroad Retirement Board, 346 F.3d 139,

141 (5th Cir. 2003); Steebe v. Railroad Retirement Board, 708

F.2d 250, 255 (7th Cir. 1983); Rivera v. Railroad Retirement

Board, 262 F.3d 1005, 1009 (9th Cir. 2001); Abbruzzese v.

Railroad Retirement Board, 63 F.3d 972, 974 (10th Cir.

1995).2

In our view, however, reliance on Sanders disregards the

critical textual difference between (i) Section 205(g) of the

Social Security Act at issue in Sanders and (ii) Section 5(f) of

2

The Second and Eighth Circuits have held that Section 5(f)

provides for judicial review of Board decisions denying requests to

reopen initial benefits determinations. See Sones v. Railroad

Retirement Board, 933 F.2d 636, 638 (8th Cir. 1991); Szostak v.

Railroad Retirement Board, 370 F.2d 253, 254-55 (2d Cir. 1966).

8

the Railroad Unemployment Insurance Act at issue here.

Section 205(g) of the Social Security Act confines judicial

review to “review of such decision[s].” 42 U.S.C. § 405(g)

(1976) (emphasis added). And the word “such” in Section

205(g) refers back to a limited category of decisions: “any

final decision of the Secretary made after a hearing.” Id. The

Sanders Court relied heavily on the qualifying language in

Section 205(g) – “made after a hearing” – in concluding that

the statute precludes judicial review of the Secretary’s denials

of requests to reopen. Sanders, 430 U.S. at 108.

By contrast, the text of Section 5(f) of the Railroad

Unemployment Insurance Act provides for judicial review of

“any final decision of the Board,” without qualification. 45

U.S.C. § 355(f) (emphasis added). As explained, a Board

decision denying a request to reopen falls easily within that

broad category. So the result reached by the Sanders Court,

which was based primarily on the text of Section 205(g), does

not apply to the differently and more broadly worded text of

Section 5(f).

None of the courts of appeals that have relied on Sanders

has noted, much less grappled with, that key textual

difference between Section 205(g) and Section 5(f). Instead,

those courts – relying on the Supreme Court’s description of

the purpose of Section 205(g) – have reasoned that allowing

for judicial review of denials of requests to reopen in this

context would similarly “frustrate the goal of ensuring finality

of [Board] decisions.” Cunningham, 392 F.3d at 574; see

also Roberts, 346 F.3d at 141.

But the Sanders Court appealed to the interest in finality

only after consulting the text of Section 205(g), and then only

in order to point out that the text was consistent with one of

the statute’s purposes. We highly doubt that the interest in

9

finality would have controlled in Sanders if the Social

Security Act had provided without qualification for judicial

review of “any final decision” of the Secretary. After all, as

the Supreme Court has repeatedly stated, “[v]ague notions of

a statute’s ‘basic purpose’ are inadequate to overcome the

words of its text regarding the specific issue under

consideration.” Montanile v. Board of Trustees of the

National Elevator Industry Health Benefit Plan, 136 S. Ct.

651, 661, slip op. at 13 (2016) (ellipsis omitted) (quoting

Mertens v. Hewitt Associates, 508 U.S. 248, 261 (1993)).

In this case, the text of Section 5(f) speaks precisely to

the issue under consideration: A claimant who has exhausted

administrative remedies may seek judicial review of “any

final decision of the Board.” 45 U.S.C. § 355(f). A denial of

a request to reopen is a final decision of the Board.

Invocations of a general interest in finality cannot overcome

the only congressional purpose of which we can be sure – the

purpose stated in the text of Section 5(f).3

In short, the result in Sanders does not control this case

for the simple reason that the statute at issue in Sanders

differs in critical respects from the statute at issue here.

Third, the Board repackages its concern about finality as

an absurdity argument. In the Board’s view, it would be

absurd if claimants like Stovic could circumvent the Railroad

Retirement Act’s one-year statute of limitations simply by

filing a request to reopen a prior benefits determination, and

then obtaining judicial review of the denied request to reopen.

The Board points to Stovic’s current appeal – initiated 15

3

In any event, judicial review of denials of requests to reopen

serves one key purpose underlying Section 5(f): improving the

accuracy of benefits determinations.

10

years after the Board’s initial benefits determination – as a

poster child of this potential for vexatious litigation.

Departure from statutory text may be warranted if

adherence to the text would lead to a truly absurd outcome.

But absurdity is a high bar. The Supreme Court has equated

an absurdity with an outcome “so bizarre,” “illogical,” or

“glaringly unjust” that “Congress could not plausibly have

intended” that outcome. Demarest v. Manspeaker, 498 U.S.

184, 191 (1991); Conroy v. Aniskoff, 507 U.S. 511, 516

(1993); Ingalls Shipbuilding, Inc. v. Director, Office of

Workers’ Compensation Programs, Department of Labor, 519

U.S. 248, 261 (1997); Mohamad v. Palestinian Authority, 132

S. Ct. 1702, 1707 (2012); see also Sturges v. Crowninshield,

17 U.S. 122, 202-03 (1819) (Marshall, C.J.) (text of statute

not disregarded unless case is “one in which the absurdity and

injustice of applying the provision to the case, would be so

monstrous, that all mankind would, without hesitation, unite

in rejecting the application”).

Here, it is not absurd – indeed, not even close to absurd –

to read Section 5(f) to allow judicial review of denied requests

to reopen. It makes sense to provide for judicial review of

potentially arbitrary and mistaken Board decisions denying

requests to reopen. Judicial review helps ensure accuracy and

fairness. Moreover, the usual presumption is in favor of

judicial review of agency action. See 5 U.S.C. § 701(a)(1);

see also Sackett v. EPA, 132 S. Ct. 1367, 1373 (2012) (APA

“creates a presumption favoring judicial review of

administrative action”) (internal quotation marks omitted).

To be sure, allowing judicial review in these kinds of

reopener cases might generate some additional litigation. But

assuming that the Board does its job when it considers

requests to reopen, that added burden seems quite

11

manageable. Indeed, the Second and Eighth Circuits have

long allowed judicial review of denied requests to reopen.

The Board has not suggested that any deluge of litigation has

occurred in those circuits. Of course, if the added litigation

turns out to be significant, Congress can always amend the

statute to make it read like Section 205(g) of the Social

Security Act – the statutory provision at issue in Sanders.

In sum, the text of Section 5(f) grants this Court

jurisdiction to review Board decisions denying requests to

reopen initial benefits determinations. When “the terms of a

statute are unambiguous, judicial inquiry is complete.”

Adams Fruit Co. v. Barrett, 494 U.S. 638, 642 (1990). So it

is here.

II

Although the Railroad Retirement Act provides for

judicial review of Board denials of requests to reopen, the

scope of this Court’s review is circumscribed. We may

overturn the Board’s denial of a request to reopen only if the

denial is “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law,” or if it is “unsupported

by substantial evidence.” 5 U.S.C. § 706(2); see also 45

U.S.C. § 355(f) (“The findings of the Board as to the facts, if

supported by evidence . . . shall be conclusive.”).

Stovic argues that the Board’s denial was arbitrary and

capricious. The arbitrary and capricious standard usually

boils down to the question of whether the agency action at

issue was “reasonable and reasonably explained.”

Communities for a Better Environment v. EPA, 748 F.3d 333,

335 (D.C. Cir. 2014). Here, we conclude that the Board

reasonably denied Stovic’s request to reopen.

12

In 2014, Stovic submitted a letter requesting that the

Board reopen its 1999 decision calculating the amount of

Stovic’s retirement benefits. Board regulations provide that a

“final decision may be reopened” at “any time” under any of

10 conditions. 20 C.F.R. § 261.2(c). Because Stovic was

asking the Board to reopen his case rather than challenging an

initial benefits determination directly, Stovic had to present

evidence establishing that one of those 10 reopener conditions

was satisfied.

Although Stovic did not clearly identify which of the 10

conditions justified reopening his case, the Board interpreted

Stovic’s letter primarily as a request to reopen pursuant to the

sixth and seventh conditions of its reopener regulation.

Condition six of the regulation provides for reopener to make

certain corrections to a decision that determined “the claimant

did not have an insured status.” Id. § 261.2(c)(6). A final

decision, for example, could be reopened to “correct an error

made in the allocation of earnings to an individual which, if

properly allocated, would have given him or her an insured

status at the time of the decision.” Id. § 261.2(c)(6)(ii).

Condition seven of the regulation provides for reopener “to

correct clerical error or an error that appears on the face of the

evidence that was considered when the determination or

decision was made.” Id. § 261.2(c)(7).

The Board reasonably concluded and explained that

reopener here was inappropriate under either condition.

Stovic did not seek to reopen a decision that he “did not have

an insured status.” Id. § 261.2(c)(6). It was therefore

reasonable for the Board to conclude that there were no errors

in the allocation of Stovic’s earnings that, if corrected, would

have given him insured status at the time of the decision. And

Stovic provided little to no explanation of how his initial

decision contained a “clerical error or an error that appears on

13

the face of the evidence.” Id. § 261.2(c)(7). Under the

circumstances here, the Board’s denial of Stovic’s request to

reopen was eminently reasonable.

***

The Railroad Retirement Act grants this Court

jurisdiction to review Board denials of requests to reopen

initial benefits determinations. But the scope of judicial

review in such cases is narrow. Here, the Board did not act

unreasonably in denying Stovic’s request to reopen. We

therefore deny Stovic’s petition for review.

So ordered.