9th Circuit rules on RRB overpayment liability: Musquiz v. U.S. Railroad Retirement Board

In Musquiz v. U.S. Railroad Retirement Board (9th Cir. 2024) 106 F.4th 881, the Court of Appeals for the Ninth Circuit addressed the liability of a retired railroad employee for overpayments of his annuity.

In 2012, Plaintiff applied for a reduced-age annuity based on estimated income. He did not inform Defendant when his actual income exceeded that estimate. In 2013, Defendant notified Plaintiff that it had recalculated his annuity based on his actual income. Defendant sent similar notices in 2014 and 2015. In 2016, Defendant demanded repayment for overpayments from August 2012 to December 2015. The Railroad Retirement Board (RRB) denied Plaintiff’s waiver request, affirming its decision on administrative appeal. Plaintiff filed a petition for review, which the Ninth Circuit granted.

The Ninth Circuit affirmed the RRB’s finding that Plaintiff was at fault for overpayments from August 2012 to June 2, 2013, because he should have reported his higher income. However, the court held that Plaintiff was “without fault” for overpayments after June 3, 2013, because Defendant continued to overpay him despite notifying him of the recalculation. The court found that requiring repayment for the period after June 3, 2013 could be contrary to the purpose of the Railroad Retirement Act, given Plaintiff’s age, health, and financial difficulties. The case was remanded to the RRB for further consideration.

Full opinion

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