## Facts

- Federal law historically allowed certain workers with both railroad and non-railroad employment histories to receive both railroad retirement benefits and Social Security benefits, creating “windfall” dual benefits.
- Congress concluded that continued payment of windfall benefits threatened the financial stability of the railroad retirement system and enacted the Railroad Retirement Act of 1974 to restructure the system and phase out future windfall accruals while preserving some benefits for selected groups.
- The 1974 Act preserved full windfall benefits for individuals already retired and receiving dual benefits as of January 1, 1975.
- For workers not yet retired, the Act preserved or partially preserved windfall benefits based on criteria including: some railroad service in 1974; a “current connection” with the railroad industry at the end of 1974 (or at retirement); or 25 years of railroad service by the end of 1974, with other provisions allowing lesser benefits for certain workers who met additional timing-related conditions.
- Fritz and a certified class were eligible to retire shortly after the changeover date and were insured for Social Security as of December 31, 1974, but received no windfall benefits because they had left railroad employment before 1974, lacked a “current connection” at the end of 1974, and had less than 25 years of railroad service.
- The class contended that Congress irrationally distinguished among employees with more than 10 but less than 25 years of railroad service based on their connection to the industry around 1974.

## Issues

1. Whether the 1974 Act’s classifications for preserving, reducing, or eliminating windfall dual benefits violate the Fifth Amendment’s Due Process Clause (equal protection component) as arbitrary or irrational.

## Decision

- The Supreme Court reversed the district court and upheld the statute.
- The Court held that the windfall-benefit phaseout classifications were not arbitrary or irrational and satisfied rational basis review.
- The Court applied deferential review typical of social and economic legislation and sustained the law based on any reasonably conceivable set of facts that could justify the classifications, without requiring proof of actual legislative motives.

## Legal Principles

- Social and economic legislation is presumed constitutional and will be upheld if any reasonably conceivable state of facts could provide a rational basis for the classification.
- Under rational basis review, courts may sustain a statute based on conceivable justifications, and it is not constitutionally required that the hypothesized rationale reflect Congress’s actual motivations.
- Congress may phase out benefits and grandfather selected groups to address fiscal concerns and protect reliance interests, even if the resulting lines are imperfect.
- Differential treatment in benefit programs does not trigger heightened scrutiny absent a suspect classification or infringement of a fundamental right.

## Conclusion

The Court held that Congress could rationally limit and phase out railroad windfall dual benefits to protect the system’s finances and to preserve benefits for groups viewed as more closely tied to the railroad industry, and that the resulting statutory distinctions did not violate the Fifth Amendment under rational basis review.


U.S. R.R. Ret. Bd. v. Fritz, 449 U.S. 166 (1980)