
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 95-2092                       EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,                                 Plaintiff, Appellee,                                          v.                        COMMONWEALTH OF MASSACHUSETTS, ET AL.,                               Defendants, Appellants.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Rya W. Zobel, U.S. District Judge]                                           ___________________                                 ____________________                                        Before                                Selya, Cyr and Boudin,                                   Circuit Judges.                                   ______________                                 ____________________            Pierce  O'Cray,  Assistant  Attorney General,  Government  Bureau,            ______________        with  whom Scott  Harshbarger,  Attorney General,  was  on briefs  for                   __________________        appellants.            Samuel  A.  Marcosson,  with  whom  C.  Gregory  Stewart,  General            _____________________               ____________________        Counsel, Gwendolyn Young Reams, Associate General Counsel, and Vincent                 _____________________                                 _______        J. Blackwood, Assistant General Counsel, were on brief for appellee.        ____________                                 ____________________                                    March 11, 1996                                 ____________________                 Per Curiam.   Chapter  32 of  the Massachusetts  General                 __________            Laws  establishes  the  Commonwealth's  statutory  retirement            benefit plan  for its  state  and local  employees.   Section            3(2)(f) of that chapter provides that "[n]o person who enters            or who re-enters  the service of any governmental  unit as an            employee after attaining  age sixty-five, and after  the date            when  a  system  becomes operative  therein,  shall  become a            member except  as otherwise  provided for  in this  section."            This provision generally  prevents state and local  employees            hired  after age 65 from participating in any public employee            retirement system in  Massachusetts.  Francis C.  Coolidge, a            part-time employee of  the Town of  Tewksbury who was  denied            membership in the Middlesex  County Retirement System,  filed            charges  challenging   section  3(2)(f)   before  the   Equal            Employment Opportunity Commission ("EEOC").                 In due course the EEOC itself sued  the Commonwealth and            the Middlesex County Retirement System in the district court,            claiming  that section 3(2)(f)  violates and is  preempted by            the  Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.               623(a)(1) et. seq.  Both sides moved for summary judgment;                         ________            the district  court granted  the EEOC's  motion, ruling  that            section 3(2)(f)  ran afoul  of 29  U.S.C.    623(a)(1), which            makes it illegal for an employer to "discriminate against any            individual   with   respect  to   his   compensation,  terms,            conditions,  or privileges  of  employment, because  of  such                                         -2-                                         -2-            individual's age."       The   Commonwealth    now   appeals.            Although the state statute plainly discriminates on the basis            of age  regarding  benefits of  employment, the  Commonwealth            argues  that  the  Massachusetts statute  is  shielded  by 29            U.S.C.     623(f)(2)(B)(i),  which  permits  an  employer  to            differentiate on the basis of  age "where for each benefit or            benefit  package, the actual  amount of payment  made or cost            incurred on  behalf of an older  worker is no less  than that            made or incurred on behalf of a younger worker as permissible            under  section 1625.10, title 29, Code of Federal Regulations            (as in effect June 22,  1989)."  The Commonwealth claims that            this provision effectively codifies a subsection of the cited            regulation, 29  C.F.R.   1625.10(f)(1)(iii)(A)  (1989), which            allowed  an employer  to  exclude from  a retirement  plan an            employee who begins work after normal retirement age.                   As a matter of ordinary grammar, the statutory exception            relied  on by  the  Commonwealth  does  not  protect  section            3(2)(f) because  the Commonwealth concededly  does not  incur            costs on behalf  of workers excluded from the  pension system            at least  equal to  the costs incurred  on behalf  of younger            workers.  The plain language of section 623(f)(2)(B)(i) makes            clear that it  incorporates only those elements  of the cited            regulation  that  conform to  this  equal  cost/equal benefit            principle.   The Commonwealth's  argument that  the statutory            provision   incorporates  the   regulation  wholesale,   even                                         -3-                                         -3-            portions of it--like 29 C.F.R.   16256.10(f)(1)(iii)(a)--that            are plainly inconsistent  with the  equal cost/equal  benefit            principle,  simply  cannot  be  squared  with  the  statutory            language.                 If legislative history is consulted, it too supports the            EEOC  and  not the  Commonwealth.    As  the  district  court            observed,  Congress enacted  the current  version of  section            623(f) in  response to the Supreme Court's decision in Public                                                                   ______            Employees  Retirement Sys.  v. Betts,  492  U.S. 158  (1989),            __________________________     _____            which  determined  that the  ADEA  did  not  apply to  fringe            benefits.  Congress then amended the statute to reinstate the            equal  cost/equal benefit  rule and to  ensure that  the ADEA            applied to  age-based discrimination  in benefit  plans.   S.            Rep. No. 263,  101st Cong., 2d Sess. 18  (1990), reprinted in                                                             ____________            1990  U.S.C.C.A.N. 1509,  1523.    This  Senate  report  said            explicitly that Congress  intended to incorporate only  those            portions  of  the  regulation  consistent  with  the  amended            statute.  Id.                      ___                 The Commonwealth argues that because the ADEA here would            preempt a  state statute, we  must apply a  "clear statement"            rule of interpretation,  e.g., Gregory v. Ashcroft,  501 U.S.                                     ____  _______    ________            452  (1991), and  resolve in  favor of  the Commonwealth  any            doubts  about  whether Congress  intended  to  incorporate 29            C.F.R.   1625.10(f)(1)(iii)(a).  The EEOC  plausibly responds            that  the clear  statement  rule  applies  only  in  deciding                                         -4-                                         -4-            whether  the  state  is  governed  by the  ADEA  and  not  to            questions  concerning  the  substantive  reach of  the  ADEA,            questions  whose answer affects  public and private employers            alike.   Although  this precise  question may  not have  been            decided,  we have  been  very  hesitant  in  closely  related            contexts  to extend the clear  statement rule beyond its core            application.   See Gately v. Commonwealth of Massachusetts, 2                           ___ ______    _____________________________            F.3d 1221, 1230 (1st Cir.  1993); see EEOC v. Commonwealth of                                              ___ ____    _______________            Massachusetts, 987 F.2d 64, 68-70 (1st Cir. 1993).            _____________                 In all events, the meaning of the provision in this case            is clear enough once the  technical jargon is unraveled.  The            __            statute   adopts  an   equal  cost/equal  benefit   test  for            differentiations "as permissible" under the cited regulation,            and  no one claims that the  Commonwealth's flat bar conforms            to any  equal  cost/equal  benefit test.    Thus,  whether  a               ___            particular  equal cost/equal  benefit  differential would  be            "permissible" under  the regulation does not even arise.  The            subject  matter  is complex  but complexity  is not  the same            thing as ambiguity.      Affirmed.                                     ________                                         -5-                                         -5-
