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).
Very briefly, the facts of the case are as follows.
Plaintiffs Sarah M. Cipriano and Jeune M. Miller were teachers
in the North Tonawanda school system. They both retired in
June, 1981, at the age of sixty-five,
each having taught for more than twenty years. Both plaintiffs
were employed under a collective bargaining agreement,
effective July 1, 1980, through June 30, 1983, that offered
early retirement incentives to those teachers between the ages
of fifty-five and sixty who retired during the life of the
contract and who had more than twenty years of service in the
school system. Although plaintiffs met every other requirement
of the retirement incentive, both exceeded the age limitation
of the plan, and thus were ineligible for its benefits.
Plaintiffs sued, claiming that the plan as a whole, and as
applied to them, was discriminatory in violation of the ADEA.
This court dismissed the case on defendants' motion for summary
judgment, but was reversed, and the case was remanded by the
Second Circuit. Id. On remand, the court rejected plaintiffs'
argument that the retirement plan itself was discriminatory,
Cipriano, 700 F. Supp. at 1211, but held that the plan was
discriminatory as applied to plaintiffs. Id. The court held,
further, that defendants' discriminatory actions toward
plaintiffs were "willful" under the ADEA. Id. at 1211-12.
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.
I. MUST BETTS BE APPLIED RETROACTIVELY?
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
[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
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. § 621 (statutory note). This law, however, applies
only prospectively. See 29 U.S.C. ...