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September 19, 1991


The opinion of the court was delivered by: Curtin, District Judge.


This case, brought under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., is before the court on defendants' motion for reconsideration of the court's decision of December 7, 1988, granting partial summary judgment to plaintiffs. See Cipriano v. Board of Educ. of Sch. Dist. of North Tonawanda, 700 F. Supp. 1199 (W.D.N.Y. 1988), on remand from, 785 F.2d 51 (2d Cir. 1986).

Defendants moved to reconsider this decision. After some delay, the motion was argued on June 23, 1989. That very day, the United States Supreme Court issued its decision in Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158, 109 S.Ct. 2854, 106 L.Ed.2d 134 (1989). The Court's opinion in Betts changed the law with respect to § 4(f)(2) of the ADEA, 29 U.S.C. § 623(f)(2), the statutory defense relied on by the school board which was rejected by this court in its December, 1988, decision. Defendants now argue that this court must apply the Betts' standard retroactively to these facts. Defendants further argue that, under Betts, the court should reverse its prior decision.



The Supreme Court in its most recent term has altered the rules of retroactivity of civil decisions as they apply in this case. See James B. Beam Distilling Co. v. Georgia, ___ U.S. ___, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991). James Beam, although fractured in its ultimate conclusions, must be read to uphold at least the following principle: "it is error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so." Id. 111 S.Ct. at 2446 (Souter, J., announcing judgment of the Court). While Justice Souter is joined only by Justice Stevens in this conclusion, it is apparent that four other Justices would go as far. Justice White, concurring in the judgment because he believes that the case to be applied retroactively in James Beam could be so applied under any of several rationales, notes that there is "no precedent in civil cases applying a new rule to the parties in the case but not to others similarly situated. . . ." Id. at 2448 (White, J., concurring in the judgment). Justices Blackmun, Marshall, and Scalia would go even farther. In separate opinions by Justices Blackmun and Scalia, each joined by all three Justices, these three members of the Court would "requir[e] retroactive application of each new rule we announce." Id. at 2450 (Blackmun, J., concurring in the judgment). Thus, even if Justice White's opinion is left out of the equation, five Justices of the Court have endorsed the principle that, in civil cases, where the Court has retroactively applied a newly announced rule to the case at hand, all lower courts must do likewise. In so holding, at least five Justices agree that the balancing-test analysis of Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355-56, 30 L.Ed.2d 296 (1971), relied upon by the dissent and by the plaintiffs in this case, is inapplicable to such a case.

This rule comports with established precedent in the Second Circuit. In Welyczko v. U.S. Air, Inc., 733 F.2d 239, 241 (2d Cir.), cert. denied, 469 U.S. 1036, 105 S.Ct. 512, 83 L.Ed.2d 402 (1984), the Second Circuit explained:

  Were we asked to decide if retrospective effect
  should be given to a new rule which our court had
  pronounced, the policy factors enumerated in
  Chevron Oil

  [Co. v. Huson] would indeed be determinative. . . .
  Similarly, had the Supreme Court given no
  indication whether Del-Costello [v. International
  Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct.
  2281, 76 L.Ed.2d 476 (1983)] should apply
  retroactively, a Chevron Oil analysis would also be
  in order. But these factors are not present here. .
  . . Thus, when [the] Court itself has given
  retrospective application to a newly-adopted
  principle, "no sound reason exists for not doing so
  here." Holzsager v. Valley Hospital, 646 F.2d 792,
  797 (2d Cir. 1981). A court of appeals must defer
  to the Supreme Court's directive on this issue,
  explicit or implicit.

(Emphasis added.) This reasoning has been acknowledged repeatedly by Second Circuit courts. See Gonzalez v. Home Ins. Co., 909 F.2d 716, 723 (2d Cir. 1990); Cates v. Trans World Airlines, Inc., 561 F.2d 1064, 1073 (2d Cir. 1977); Adames v. Mitsubishi Bank, Ltd., 751 F. Supp. 1548, 1558 (E.D.N.Y. 1990); Fernandez v. Kogan, 738 F. Supp. 795, 798 (S.D.N.Y. 1990); Song v. Ives Lab., Inc., 735 F. Supp. 550, 552 & n. 3 (S.D.N Y 1990); Kofer v. Village of Pelham, 710 F. Supp. 483, 485 (S.D.N.Y. 1989). See also United States v. Fitzgerald, 545 F.2d 578, 582 (7th Cir. 1976).

Applying James Beam and Welyczko here, Betts must be given retroactive effect in this case. Not only did the Court, in Betts, apply its new standard to dismiss the case at hand, Betts, 492 U.S. at 182, 109 S.Ct. at 2868-69, but the Court subsequently remanded a court of appeals decision to be considered in light of Betts, Westinghouse Elec. Corp. v. E.E.O.C., 493 U.S. 801, 110 S.Ct. 37, 107 L.Ed.2d 7 (1989), thus indicating the Court's desire that Betts be applied retroactively.

The irony of this conclusion is that immediately after Betts, Congress set about the task of expressly repudiating its holdings. Within sixteen months, Congress amended the ADEA by passing the Older Workers Benefit Protection Act, Pub.L. No. 101-433, 104 Stat. 978 (October 16, 1990) (codified at 29 U.S.C. § 621, 623), which stated:

    The Congress finds that, as a result of the
  decision of the Supreme Court in Public Employees
  Retirement System of Ohio v. Betts, [492 U.S. 158]
  109 S.Ct. 256 [2854, 106 L.Ed.2d 134] (1989),
  legislative action is necessary to restore the
  original congressional intent in passing and
  amending the Age Discrimination in Employment Act
  of 1967 (29 U.S.C. § 621 et seq.), which was to
  prohibit discrimination against older workers in
  all employee benefits except when age-based
  reductions in employee benefit plans are justified
  by significant cost considerations.

29 U.S.C. ยง 621 (statutory note). This law, however, applies only prospectively. See 29 U.S.C. ...

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