Mayo Foundation For Medical Education And Research v. United States

131 S.Ct. 704 (2011)


The Social Security Administration (SSA) also articulated in its regulations a case-by-case approach to the corresponding student exception in the Social Security Act. The Eighth Circuit held that SSA could not categorically exclude residents from student status, given that its regulations provided for a case-by-case approach. A flood of claims asking for refunds with respect to residents was expected. The Treasury Department adopted an amended rule prescribing that an employee’s service is “incident” to his studies only when “the educational aspect of the relationship between the employer and the employee, as compared to the service aspect of the relationship, [is] predominant.” The rule categorically provides that “the services of a full-time employee”-as defined by the employer’s policies, but in any event including any employee normally scheduled to work 40 hours or more per week-“are not incident to and for the purpose of pursuing a course of study.” Mayo (P) filed suit seeking a refund of the money it had withheld and paid on its residents’ stipends asserting that its residents were exempt and the new full-time employee rule was invalid. The District Court granted P’s motion for summary judgment. The Government appealed, and the Court of Appeals reversed. The Court of Appeals concluded that “the statute is silent or ambiguous on the question whether a medical resident working for the school full-time is a ‘student’” and that the Department’s amended regulation “is a permissible interpretation of the statute.”