David Babcock v. Comm'r of Soc. Sec. ( 2020 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0142p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DAVID BRYON BABCOCK, ┐
Plaintiff-Appellant, │
│
> No. 19-1687
v. │
│
│
COMMISSIONER OF SOCIAL SECURITY, │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 1:18-cv-00255—Gordon J. Quist, District Judge.
Argued: March 10, 2020
Decided and Filed: May 11, 2020
Before: COLE, Chief Judge; BOGGS and SUTTON, Circuit Judges.
_________________
COUNSEL
ARGUED: Nicholas A. Kipa, BAHRIE LAW, PLLC, Lansing, Michigan, for Appellant.
Sushma Soni, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Nicholas A. Kipa, BAHRIE LAW, PLLC, Lansing, Michigan, for
Appellant. Sushma Soni, Alisa B. Klein, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee.
_________________
OPINION
_________________
COLE, Chief Judge. This case asks us to decide whether a federal civil-service pension
based on work as a National Guard dual-status technician qualifies as “a payment based wholly
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 2
on service as a member of a uniformed service” under the Social Security Act. We agree with
the district court that it does not.
I.
Plaintiff-Appellant David Babcock joined the Michigan National Guard in 1970 as an
enlisted soldier. After serving for three-and-a-half years, Babcock went to flight school, received
his pilot license and, in 1975, became employed as a National Guard dual-status technician.
He worked in that position for over 33 years.
By statute, a National Guard dual-status technician “is a Federal civilian employee” who
“is assigned to a civilian position as a technician” while maintaining membership in the National
Guard. 10 U.S.C. § 10216(a)(1); see also 32 U.S.C. § 709(e) (providing that National Guard
dual-status technicians are employees of both the United States and either the Department of the
Army or the Department of the Air Force). These technicians are responsible for
“the organizing, administering, instructing, or training of the National Guard” or “the
maintenance and repair of supplies issued to the National Guard or the armed forces.” 32 U.S.C.
§ 709(a)(1)–(2); accord 10 U.S.C. § 10216(a)(1)(C). Babcock, for his part, served in various
roles as a test pilot and pilot instructor for the Michigan National Guard. Additionally, as is
required of all dual-status technicians, Babcock held the appropriate military grade for his
position, wore a uniform that displayed his rank and unit insignia while working, and attended
weekend drills. See 32 U.S.C. § 709(b); see also id. § 502(a) (requiring National Guard
members to complete certain drills and training). Dual-status technicians may also be required to
support operations or missions undertaken by their units. See 32 U.S.C. § 709(a)(3)(A). Indeed,
for a period between 2004 and 2005, Babcock was deployed to Iraq on active duty.
Babcock received military pay for his active-duty service in Iraq and his inactive-duty
training, including weekend drills. See generally 37 U.S.C. §§ 204(a), 206 (military pay
provisions). But otherwise, he received civil pay and participated in the Civil Service Retirement
System (“CSRS”). See generally 5 U.S.C. §§ 5301 et seq. (describing the federal civil pay
system); id. § 8332(b)(6) (providing that employment as a dual-status technician is eligible for
the CSRS). In accordance with the Social Security Act, Babcock paid Social Security taxes on
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 3
the wages for his active-duty service in Iraq and for his inactive-duty training from 1988
onwards. See 42 U.S.C. § 410(l)(1). He did not pay Social Security taxes on his wages for
inactive-duty training before 1988 or on his civil-service wages. See id.; see also id. § 410(a)(5).
Babcock retired from his position as a dual-status technician on January 31, 2009. At the
time, he was classified as a grade 13, step 10, Aircraft Flight Instructor. Upon his retirement, he
began receiving monthly CSRS payments from the Office of Personnel Management (“OPM”).
He also began receiving separate military retirement pay from the Defense Finance and
Accounting Service (“DFAS”). For several years after his retirement from his role as a
dual-status technician, Babcock flew medical-evacuation helicopters for hospitals. His income
from this private-sector employment was subject to Social Security taxes. Babcock fully retired
in 2014.
On September 30, 2014, Babcock applied for Social Security retirement benefits. On his
application, he confirmed that he was receiving monthly CSRS payments. The Social Security
Administration (“SSA”) granted Babcock’s application but reduced his benefits under the
Windfall Elimination Provision of the Social Security Act (“WEP”) because of his CSRS
pension. See 42 U.S.C. § 415(a)(7)(A). Babcock asked the SSA to reconsider its decision, citing
an exception to the WEP for payments “based wholly on service as a member of a uniformed
service.” See id. § 415(a)(7)(A)(III). Babcock argued that this uniformed-services exception
applied to his CSRS pension based on his work as a dual-status technician.
At the time, the only federal court of appeals to have addressed the applicability of the
uniformed-services exception to a dual-status technician’s CSRS pension was the Eighth Circuit.
According to the Eighth Circuit, the text of the exception imposes only the “limited” requirement
that “service be as a member of the uniformed service.” Petersen v. Astrue, 633 F.3d 633, 637
(8th Cir. 2011). The Eighth Circuit held that service as a dual-status technician meets this
requirement, and therefore, the uniformed-services exception unambiguously applies to a
pension based on service as a dual-status technician. Id. at 637–38.
In response to the Petersen decision, the SSA issued Acquiescence Ruling (“AR”)
12-1(8) to explain how it would apply the WEP and the uniformed-services exception for
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 4
claimants residing within the Eighth Circuit. See 77 Fed. Reg. 51,842 (Aug. 27, 2012). Under
AR 12-1(8), the WEP does not apply when a claimant receives a federal pension based wholly
on employment as a dual-status technician for the National Guard; the claimant resides in a state
within the Eighth Circuit; and the agency makes a benefits determination after February 3, 2011,
the date of the Petersen decision. See id. at 51,842–43. For claimants residing outside of the
Eighth Circuit, however, the WEP would continue to apply if the claimant receives a federal
pension based on employment as a dual-status technician. See id. Accordingly, because
Babcock was not a resident of the Eighth Circuit, the SSA refused to alter its initial
determination that the WEP applied to Babcock’s Social Security retirement benefits.
An administrative law judge (“ALJ”) upheld the SSA’s determination, and the Appeals Council
affirmed the ALJ’s decision.
Babcock then sought judicial review by filing suit against the Commissioner of Social
Security in the United States District Court for the Western District of Michigan. While his case
was pending before the district court, the Eleventh Circuit decided Martin v. Social Security
Administration, Commissioner, in which it rejected the Eighth Circuit’s analysis and held that the
uniformed-services exception does not apply to dual-status technicians. 903 F.3d 1154, 1168
(11th Cir. 2018) (per curiam). Focusing on the words “wholly” and “as” in the text of the
statute, the Eleventh Circuit concluded that “even if dual status technician employment is
essentially military, it is not subject to the uniformed services exception if it is not wholly
military in nature.” Id. at 1166 (emphasis in original). Finding it “difficult to conclude that a
dual status technician wholly performs that role as a member of the National Guard,” the
Eleventh Circuit decided that the Commissioner had the more persuasive reading of the statute.
See id. at 1166, 1168.
Faced with both the Petersen and Martin decisions, the district court concluded that the
Eleventh Circuit’s analysis in Martin was “more persuasive than the Petersen court’s analysis”
and was “based on the correct application of the language of the exception,” and thus, the
uniformed-services exception was inapplicable (and the WEP applied) in Babcock’s case.
Babcock v. Comm’r of Soc. Sec., 2019 WL 2205712, at *2 (W.D. Mich. May 22, 2019). The
district court also rejected Babcock’s claim that his rights to due process and equal protection
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 5
were violated because the WEP applied differently to claimants within the Eighth Circuit. Id. at
*3. The district court accordingly entered judgment in favor of the Commissioner, and this
timely appeal followed.
II.
We review the district court’s decision de novo. Valley v. Comm’r of Soc. Sec., 427 F.3d
388, 390 (6th Cir. 2005). Because our review involves interpreting a statute that the
Commissioner has authority to administer, 42 U.S.C. § 405(a), we start by asking “whether
Congress has directly spoken to the precise question at issue.” See Chevron, U.S.A., Inc. v. Nat.
Res. Def. Council, Inc., 467 U.S. 837, 842 (1984). If we can ascertain “the unambiguously
expressed intent of Congress,” the inquiry ends, and we must give effect to Congress’s
unambiguous construction of the statute. Id. at 842–43; accord Pereira v. Sessions, 138 S. Ct.
2105, 2113 (2018). Only if the statute is silent or ambiguous on the particular issue do we turn
to the question of whether to defer to the Commissioner’s interpretation of the statute. See
Chevron, 467 U.S. at 843; see also Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1629–30 (2018).
In deciding whether Congress has spoken directly to the issue at hand, we do not confine
ourselves “to examining a particular statutory provision in isolation.” FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 132 (2000). Rather, we must read the words of the
statutory provision “in their context and with a view to their place in the overall statutory
scheme.” Id. at 133 (quoting Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989)); see
also United States v. Parrett, 530 F.3d 422, 429 (6th Cir. 2008) (“Plain meaning is examined by
looking at the language and design of the statute as a whole.” (quoting United States v. Wagner,
382 F.3d 598, 607 (6th Cir. 2004))). Additionally, we are cognizant that “the meaning of one
statute may be affected by other Acts, particularly where Congress has spoken subsequently and
more specifically to the topic at hand.” Brown & Williamson, 529 U.S. at 133. Employing the
available tools of statutory interpretation, we conclude that the uniformed-services exception
does not apply to a civil-service pension based on employment as a dual-status technician.
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 6
A.
The Social Security Act provides individuals with a retirement benefit based on a
percentage of their pre-retirement income from “covered” employment—i.e., income that was
subject to Social Security taxes. See generally 42 U.S.C. § 415 (describing the calculation of
benefits). Under the Act’s progressive scheme, retirement benefits are not calculated as a flat
percentage of pre-retirement income but rather adjusted so that individuals with lower average
earnings over their working lives receive a greater percentage of their average earnings than
those with higher average earnings. See id. § 415(a)(1)(A). In other words, lower-income
workers receive a greater return on their Social Security contributions than higher-income
workers. See id.
Not all employment is covered under the Act. See id. § 410(a). For example, the Act
does not cover federal civilian employment for those hired before 1984 and participating in the
CSRS. Id. § 410(a)(5). The Act also does not cover certain types of employment in the military
over certain periods. Specifically, while “active duty” service after 1956 is covered, as is
“inactive duty training” (e.g., weekend drills) after 1987, inactive duty training between 1957
and 1987 is not covered. See id. § 410(l)(1).
Income from “noncovered” employment is exempt from Social Security taxes and not
included in calculating the amount of an individual’s Social Security benefits. See id. § 415(b).
Many noncovered positions nonetheless have a separate annuity or pension plan for workers.
See, e.g., 5 U.S.C. §§ 8331 et seq. (providing for the CSRS). Accordingly, individuals who have
been in both covered and noncovered employment may end up receiving both Social Security
retirement benefits and a separate annuity or pension. And because only income from covered
employment is used to calculate Social Security benefits, those individuals with both covered
and noncovered employment also receive a higher return on their Social Security contributions
than those with only covered employment. See 42 U.S.C. §§ 415(a)(1)(A), 415(b). In other
words, individuals with both covered and noncovered employment tend to have their Social
Security benefits calculated as if they were long-term low-wage earners, and thus benefit from
the Act’s progressive formula.
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 7
To address this windfall effect, Congress amended the Social Security Act in 1983 to add
a Windfall Elimination Provision, or WEP. Pub. L. No. 98-21, § 113(a), 97 Stat. 65 (1983); see
also H.R. Rep. No. 98-25, pt. 1, at 21–22 (1983), reprinted in 1983 U.S.C.C.A.N. 219, 239–40.
The WEP modifies the standard benefits formula for a recipient who is also entitled to
“a monthly periodic payment” that “is based in whole or in part upon his or her earnings” for
noncovered employment. 42 U.S.C. § 415(a)(7)(A); see also id. § 415(a)(7)(B) (detailing the
modified formula). In short, the WEP is targeted at those individuals who gain an unintended
advantage by receiving a separate pension or annuity based on noncovered work while
simultaneously having relatively low earnings from covered work.
B.
That brings us to the uniformed-services exception at issue here, which Congress added
in 1994. Pub. L. No. 103-296, § 308(b), 108 Stat. 1464 (1994). Under this exception,
“a payment based wholly on service as a member of a uniformed service” does not trigger
application of the WEP. 42 U.S.C. § 415(a)(7)(A)(III). The statute defines a “member of a
uniformed service” as “any person appointed, enlisted, or inducted in a component of the Army,
Navy, Air Force, Marine Corps, or Coast Guard,” including a “reserve component” such as the
National Guard. Id. § 410(m); see also 38 U.S.C. § 101(27). We understand “service” here to
refer to work.
Aside from the terms whose meaning arises from the statute, we construe statutory terms
in accordance with their plain and ordinary meaning. See, e.g., Sebelius v. Cloer, 569 U.S. 369,
376 (2013); Sunrise Coop., Inc. v. U.S. Dep’t of Agric., 891 F.3d 652, 657 (6th Cir. 2018). In
this context, the word “wholly” plainly means “to the full or entire extent” or “to the exclusion of
other things.” Martin, 903 F.3d at 1163 (quoting Wholly, WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY 2612 (1961)); accord Kientz v. Comm’r, SSA, 954 F.3d 1277, 1282
(10th Cir. 2020) (defining wholly to mean “‘entirely’ or ‘exclusively’” (quoting Wholly,
AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 1463 (1981))). Additionally, the
word “as” in this context “limit[s] the uniformed services exception only to payments for work
performed in one’s capacity or role as a member of the uniformed services.” Martin, 903 F.3d at
1164 (citing As, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY, supra, at 125); see also
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 8
Kientz, 954 F.3d at 1282 (giving the word “as” “the ordinary meaning of ‘in the role, capacity, or
function of’” (quoting As, AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE, supra,
at 76)). Thus, the uniformed-services exception does not apply simply because an individual was
a member of a uniformed service while working in noncovered employment. Rather, by its plain
text, the uniformed-services exception is cabined to payments that are based exclusively on
employment in the capacity or role of a uniformed-services member.
Babcock’s CSRS pension is not such a payment. As its name suggests, the CSRS is for
those employed “in the civilian service of the Government.” 5 U.S.C. § 8332(b). Individuals
covered under the CSRS may receive credit for periods of military service, but service in the
military by itself, without civilian employment, does not make an individual eligible to
participate in the CSRS. See id. § 8332(c), (j); see also Vidal v. Office of Pers. Mgmt., 267 F.
App’x 946, 948 (Fed. Cir. 2008) (per curiam) (“[M]ilitary service does not automatically count
towards eligibility for benefits in the civil service system.”). The only reason dual-status
technicians like Babcock may participate in the CSRS, and receive a CSRS pension, is that they
are “Federal civilian employee[s]” who are “assigned to a civilian position.” 10 U.S.C.
§ 10216(a)(1)(C); see also 5 U.S.C. § 8332(b)(6) (providing that employment as a dual-status
technician is civilian service for purposes of the CSRS); N.J. Air Nat. Guard v. FLRA, 677 F.2d
276, 279 n.2 (3d Cir. 1982) (noting that one of the primary reasons Congress created the position
of dual-status technician was so that National Guard technicians would be considered federal
civilian employees and eligible for civil-service retirement benefits). Therefore, by its very
nature, a dual-status technician’s CSRS pension is not a payment based exclusively on
employment in the capacity or role of a uniformed-services member.
The broader statutory context supports the conclusion that the uniformed-services
exception does not encompass the CSRS pension of a dual-status technician. Within the Social
Security Act, the uniformed-services exception operates as a qualification of the WEP, which
broadly applies when a claimant separately receives a pension based on earnings from
noncovered employment. See 42 U.S.C. § 415(a)(7)(A). As an exception to the general rule, the
uniformed-services exception should be construed narrowly. See Comm’r v. Clark, 489 U.S.
726, 739 (1989) (“In construing provisions . . . in which a general statement of policy is qualified
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 9
by an exception, we usually read the exception narrowly in order to preserve the primary
operation of the provision.”); accord M.L. Johnson Family Props., LLC v. Bernhardt, 924 F.3d
842, 854 (6th Cir. 2019). The uniformed-services exception should be construed narrowly with
respect to a CSRS pension in particular because the various provisions of the Social Security
Act, taken together, make plain that the WEP is meant to apply to former federal employees
receiving a CSRS pension. See 42 U.S.C. §§ 410(a)(5), 415(a)(7); see also, e.g., Ward v.
Comm’r of Soc. Sec., 211 F.3d 652, 655 (1st Cir. 2000) (“The reason behind the WEP was that
an individual who had been employed as a federal employee with pension benefits and also was
entitled to Social Security retirement benefits would receive a windfall because he [or she] would
be eligible for both Social Security and federal civil service pension payments.”). Thus, the
broader statutory context and the place of the uniformed-services exception in the overall
statutory scheme support our conclusion that the plain text of the exception does not encompass
a dual-status technician’s CSRS pension.
Finally, we note that, in addition to his CSRS pension from the OPM, Babcock receives
separate military retirement pay from the DFAS based on his work as a dual-status technician.
There is no dispute that Babcock’s military pension falls within the ambit of the uniformed-
services exception. That Babcock receives a separate military pension to which the uniformed-
services exception applies only bolsters the conclusion that his CSRS pension does not qualify
for the uniformed-services exception.
C.
Babcock resists the conclusion that his CSRS pension falls outside the scope of the
uniformed-services exception. He argues his CSRS pension is based entirely on his work as a
dual-status technician, and this work is wholly indistinguishable from military employment
because he had to maintain membership in the National Guard, hold the appropriate military
grade for his position, wear a military uniform on a daily basis, and be prepared to be deployed
on active duty. He argues, moreover, that his “status” as a civilian employee is irrelevant under
the plain language of the statute.
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 10
We do not discount the fact that the job requirements of a dual-status technician overlap
with those of other National Guard members—or that, from the perspective of the technician, the
work of a dual-status technician may be materially similar to military employment. The plain
language of the uniformed-services exception, however, instructs us to look at “a payment” and
ask whether that payment is based exclusively on employment in the capacity or role of a
member of a uniformed service. See 42 U.S.C. § 415(a)(7)(A)(III). As we have explained, a
CSRS pension must be based at least partly on some employment “in the civilian service of the
Government,” see 5 U.S.C. § 8332(b), and therefore, Babcock’s CSRS pension is not a payment
based exclusively on employment in the capacity or role of a uniformed-services member.
Additionally, though Babcock contends it is irrelevant, his designation as a “civilian”
employee of the United States, “assigned to a civilian position as a technician,” see 10 U.S.C.
§ 10216(a)(1)(C), is meaningful—and more than a mere “status”—in the context of Social
Security retirement benefits. Because Babcock was a federal civilian employee, he was subject
to the same General Schedule (“GS”) pay scale as other federal civilian employees—ultimately
retiring as a grade 13, step 10, Aircraft Flight Instructor. See generally 5 U.S.C. §§ 5331 et seq.
(describing the GS pay rates and system). As a federal civilian employee hired before 1984,
Babcock did not have Social Security taxes deducted from his GS-based civilian pay, unlike
uniformed-services members in covered employment. See 42 U.S.C. §§ 410(a)(5), 410(l)(1).
Most importantly, Babcock was eligible to participate in the CSRS, which non-technician
members of the uniformed services (without some other civilian employment) are unable to do.
See 5 U.S.C. § 8332(b)(6). These differences distinguish Babcock’s service as a dual-status
technician from that of other National Guard members and indicate that his dual-status
technician employment is not wholly “service as a member of a uniformed service” under the
uniformed-services exception. See 42 U.S.C. § 415(a)(7)(A)(III); see also Martin, 903 F.3d at
1166 (“[E]ven if dual status technician employment is essentially military, it is not subject to the
uniformed services exception if it is not wholly military in nature.” (emphasis in original)).
Babcock argues that our precedents involving the Feres doctrine establish that
employment as a dual-status technician is indeed military employment. See Feres v. United
States, 340 U.S. 135 (1950). Several of our cases applying Feres hold that the position of a
No. 19-1687 Babcock v. Comm’r of Soc. Sec. Page 11
National Guard technician is “irreducibly military in nature.” Fisher v. Peters, 249 F.3d 433,
443 (6th Cir. 2001); accord Leistiko v. Stone, 134 F.3d 817, 820–21 (6th Cir. 1998) (per curiam)
(quoting Leistiko v. Sec’y of the Army, 922 F. Supp. 66, 75 (N.D. Ohio 1996)). But the Feres
doctrine is about whether military personnel can sue their colleagues or the government for
injuries resulting from military service. See Feres, 340 U.S. at 144–46; see also Chappell v.
Wallace, 462 U.S. 296, 299 (1983) (applying Feres in the Bivens context); Fisher, 249 F.3d at
443 (extending Feres to Title VII claims). That the work of a dual-status technician is
“irreducibly military” for purposes of suing other military personnel or the government does not
resolve whether the role is wholly service as a member of a uniformed service for purposes of
calculating Social Security retirement benefits, which focuses critically on the types and sources
of a claimant’s earnings. See 42 U.S.C. §§ 410, 415. As we have described, in terms of the
types and sources of earnings, there are meaningful differences between dual-status technicians
and other members of the uniformed services. Therefore, our cases in the Feres context do not
help Babcock here or undermine our conclusion that his CSRS pension falls outside the scope of
the uniformed-services exception.
D.
Finally, we turn to Babcock’s constitutional claims. Babcock asserts that his rights to due
process and equal protection were violated because he was treated differently than a similarly
situated resident of the Eighth Circuit. But “[n]o court has ever held that the mere existence of a
circuit split on an issue of statutory interpretation violates due process or equal protection . . . .”
Habibi v. Holder, 673 F.3d 1082, 1088 (9th Cir. 2011); see also Roberts v. Holder, 745 F.3d 928,
933 (8th Cir. 2014) (“Disagreements among the courts of appeal, or between an agency and one
or more of the courts of appeal, will not by itself [sic] create an equal protection violation.”).
Babcock cannot sustain a due-process or equal-protection claim solely on the basis of a circuit
split.
III.
We hold that the uniformed-services exception does not apply to Babcock’s CSRS
pension. We accordingly affirm.