Noorali Savani v. Washington Safety Mgt.

Filing

Amending order/opinion filed [998814414] amending and superseding Unpublished per curiam Opinion [998813837-2]. Originating case number: 1:06-cv-02805-MBS. Copies to all parties. [11-1206]

Appeal: 11-1206

Document: 48

Date Filed: 03/20/2012

Page: 1 of 16

Filed:

March 20, 2012

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 11-1206
(1:06-cv-02805-MBS)

NOORALI SAM SAVANI,
Plaintiff - Appellant,
v.
WASHINGTON
SAFETY
MANAGEMENT
SOLUTIONS,
LLC,
f/k/a
Westinghouse Safety Management Solutions, LLC; WESTINGHOUSE
SAFETY MANAGEMENT SOLUTIONS, LLC PENSION PLAN; PAUL HARPER,
as Trustee of Westinghouse Safety Management Solutions LLC
Pension Plan; LEO SAIN, as Trustee of Westinghouse Safety
Management Solutions LLC Pension Plan; PRES RAHE, as Trustee
of Westinghouse Safety Management Solutions LLC Pension
Plan; WASHINGTON SAFETY MANAGEMENT SOLUTIONS, LLC PENSION
PLAN; WASHINGTON GROUP INTERNATIONAL, INCORPORATED; RALPH
DISIBIO, as director of Washington Safety Management
Solutions LLC; PAUL GREFENSTETTE, as Director of Washington
Safety Management Solutions LLC; ROBERT PEDDE, as Director
of Washington Safety Management Solutions LLC; AMBROSE
SCHWALLIE, as Director of Washington Safety Management
Solutions LLC; ROGER ALLEN, as Members of the Administrative
Committee of Westinghouse Safety Management Solutions LLC
Pension Plan formerly Benefits Committee of Westinghouse
Safety Management Solutions LLC Pension Plan; JULIE BROWN,
as Members of the Administrative Committee of Westinghouse
Safety Management Solutions LLC Pension Plan formerly
Benefits
Committee
of
Westinghouse
Safety
Management
Solutions LLC Pension Plan; DAVE HOLLAN, as Members of the
Administrative Committee of Westinghouse Safety Management
Solutions LLC Pension Plan formerly Benefits Committee of
Westinghouse Safety Management Solutions LLC Pension Plan;
DELOYD CAZIER, as Members of the Administrative Committee of
Westinghouse Safety Management Solutions LLC Pension Plan
formerly
Benefits
Committee
of
Westinghouse
Safety
Management Solutions LLC Pension Plan; WSMS PENSION PLAN,
f/k/a Westinghouse Savannah River Company-Bechtel Savannah
River Inc Pension Plan, f/k/a Westinghouse Safety Management

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Solutions, LLC Pension Plan, f/k/a
Management Solutions, LLC Pension Plan,

Washington

Safety

Defendants – Appellees,
and
WASHINGTON SAVANNAH RIVER COMPANY'S PENSION PLAN; WASHINGTON
SAVANNAH RIVER COMPANY, LLC, f/k/a Westinghouse Savannah
River Company LLC,
Defendants.

O R D E R

The

Court

amends

its

opinion

filed

March

20,

2012,

as

follows:
On the cover sheet, district court information section -the name of “Margaret B. Seymour, District Judge” is deleted and
is replaced by “Henry F. Floyd, District Judge.”
For the Court – By Direction

/s/ Patricia S. Connor
Clerk

2

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 11-1206

NOORALI SAM SAVANI,
Plaintiff - Appellant,
v.
WASHINGTON
SAFETY
MANAGEMENT
SOLUTIONS,
LLC,
f/k/a
Westinghouse Safety Management Solutions, LLC; WESTINGHOUSE
SAFETY MANAGEMENT SOLUTIONS, LLC PENSION PLAN; PAUL HARPER,
as Trustee of Westinghouse Safety Management Solutions LLC
Pension Plan; LEO SAIN, as Trustee of Westinghouse Safety
Management Solutions LLC Pension Plan; PRES RAHE, as Trustee
of Westinghouse Safety Management Solutions LLC Pension
Plan; WASHINGTON SAFETY MANAGEMENT SOLUTIONS, LLC PENSION
PLAN; WASHINGTON GROUP INTERNATIONAL, INCORPORATED; RALPH
DISIBIO, as director of Washington Safety Management
Solutions LLC; PAUL GREFENSTETTE, as Director of Washington
Safety Management Solutions LLC; ROBERT PEDDE, as Director
of Washington Safety Management Solutions LLC; AMBROSE
SCHWALLIE, as Director of Washington Safety Management
Solutions LLC; ROGER ALLEN, as Members of the Administrative
Committee of Westinghouse Safety Management Solutions LLC
Pension Plan formerly Benefits Committee of Westinghouse
Safety Management Solutions LLC Pension Plan; JULIE BROWN,
as Members of the Administrative Committee of Westinghouse
Safety Management Solutions LLC Pension Plan formerly
Benefits
Committee
of
Westinghouse
Safety
Management
Solutions LLC Pension Plan; DAVE HOLLAN, as Members of the
Administrative Committee of Westinghouse Safety Management
Solutions LLC Pension Plan formerly Benefits Committee of
Westinghouse Safety Management Solutions LLC Pension Plan;
DELOYD CAZIER, as Members of the Administrative Committee of
Westinghouse Safety Management Solutions LLC Pension Plan
formerly
Benefits
Committee
of
Westinghouse
Safety
Management Solutions LLC Pension Plan; WSMS PENSION PLAN,
f/k/a Westinghouse Savannah River Company-Bechtel Savannah
River Inc Pension Plan, f/k/a Westinghouse Safety Management

Appeal: 11-1206

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Date Filed: 03/20/2012

Solutions, LLC Pension Plan, f/k/a
Management Solutions, LLC Pension Plan,

Page: 4 of 16

Washington

Safety

Defendants – Appellees,
and
WASHINGTON SAVANNAH RIVER COMPANY'S PENSION PLAN; WASHINGTON
SAVANNAH RIVER COMPANY, LLC, f/k/a Westinghouse Savannah
River Company LLC,
Defendants.

Appeal from the United States District Court for the District of
South Carolina, at Aiken.
Henry F. Floyd, District Judge.
(1:06-cv-02805-MBS)

Argued:

January 26, 2012

Decided:

March 20, 2012

Before WILKINSON, GREGORY, and KEENAN, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.
Keenan wrote a dissenting opinion.

Judge

ARGUED: Stanley G. Jackson, JACKSON LAW OFFICES, PC, Augusta,
Georgia, for Appellant. H. Douglas Hinson, ALSTON & BIRD, LLP,
Atlanta, Georgia, for Appellees.
ON BRIEF: Gray T. Culbreath,
COLLINS & LACY, PC, Columbia, South Carolina; Emily Seymour
Costin, ALSTON & BIRD, LLP, Washington, D.C., for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Noorali “Sam” Savani brought this action under the Employee
Retirement

Income

Security

Act

(“ERISA”)

§ 502(a)(1)(B),

29

U.S.C. § 1132(a)(1)(B) (2006), claiming that the termination of
an

early

retirement

pension

supplement

by

Washington

Safety

Management Solutions (“WSMS”) violated ERISA’s anti-cutback and
notice
pension

provisions.
plan

supplement

in

Because

(“the
its

the

Plan”)

plain

includes

calculation

of

language
the

accrued

of

early

the

WSMS

retirement

benefits,

we

must

reverse the grant of summary judgment to WSMS and remand for
further proceedings consistent with this opinion.

I.
Savani
Company

was

(“WSRC”)

an
in

employee
1997

of

when

Westinghouse
WSMS

was

Savannah

formed.

At

River
its

inception, WSMS recruited a number of WSRC employees, including
Savani, to transfer to the newly formed company.

WSMS held

meetings at which WSRC employees were informed of the employee
benefit plans available to newly transferred employees.

From

the date of his transfer in 1997 until his retirement in 2005,
Savani participated in the Plan.
The Plan, prior to amendments, provided in relevant part:
“‘Accrued Benefit’ means, as of any date of determination, the
normal retirement Pension computed under Section 4.01(b) . . .
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less the WSRC Plan offset as described in Section 4.13, plus any
applicable

supplements

as

described

in

Section

4.12

. . . .”

The Plan further provided for early retirement benefits:

“The

early retirement Pension shall be a deferred Pension beginning
on the first day following the Member’s Normal Retirement Date
and . . . shall be equal to his Accrued Benefit.
Member

may

elect

to

receive

an

early

However, the

retirement

beginning before his Normal Retirement Date . . . .”

Pension
Finally,

the Plan described supplemental benefits:
4.12 Supplemental Benefits
(a) If a Member who:
(i) otherwise satisfies the requirements
for a Pension under this Plan; and
(ii) has at least one year of service with
WSMS; and
(iii) transferred
to
the
Plan
from
an
Affiliated
Employer
on
or
before
January 1, 1998 or transfers to the
Plan from WSRC; and
(iv) retires before his Normal Retirement
Age from active service on or after
October 1, 1998,
he shall be entitled to a monthly
supplement (which shall commence with
the first Pension payment made under
the Plan on account of such retirement
and the last payment shall be in the
month preceding the Member’s attainment
of Normal Retirement Age) equal to the
following: [omitted]
(b) If a Member who:
(i) otherwise satisfies the requirements
for a Pension under this Plan;

4

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(ii) has at least one year of service with
WSMS; and
(iii) transferred
to
the
Plan
from
an
Affiliated
Employer
on
or
before
January 1, 1998 or transfers to the
Plan from WSRC; and
(iv) either retires from active
or after October 1 1998 or
after October 1, 1998 and
prior to his death would be
or is receiving an early
Pension under the Plan,

service on
dies on or
immediately
entitled to
retirement

he shall be entitled to a $200 monthly
supplement commencing at his attainment
of Normal Retirement Age, which shall
continue after such Member’s death to
such Member’s spouse, if then living,
for such spouse’s lifetime.
On December 28, 2004, the Plan’s benefits committee 1 amended
the Plan to eliminate § 4.12(a), which granted a $700 monthly
benefit to Plan members electing to take early retirement on or
after

January

amendment

1,

because

discrimination

2005.
of

The
his

testing

favorable tax treatment.

Plan’s

concern

and

actuary
that

jeopardize

recommended

the
Plan

Plan

may

this
fail

beneficiaries’

This action was not communicated to

Plan participants or beneficiaries for nearly seven months.
Contrary to the committee’s amendment, Savani received an
“Early Retirement Benefit Calculation Estimate” in early 2005
that included both § 4.12 supplements.
1

Savani retired from WSMS

The benefits committee was vested with “all powers
necessary to discharge its duties,” including the power “[t]o
approve Plan amendments” under Article 7.01 of the Plan and the
“discretion to interpret the Plan” under Article 7.06.

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on or about April 30, 2005, believing that he would be entitled
to a $700 per month supplement until he reached age sixty-five.
On July 29, 2005, WSMS mailed letters to employees who had
retired in 2005, or were eligible to do so, and to those who had
transferred from WSRC, stating that § 4.12(a) of the Plan had
been

eliminated

monthly

and

supplement.

they

would

no

However,

longer

Savani

receive

continued

the

to

$700

receive

payments of the $700 benefit until June 8, 2006.

At that time,

Savani

that

received

incorrectly

a

received

letter
the

from
$700

WSMS

stating

monthly

benefit

for

he

had

thirteen

months and requesting reimbursement of $9,100 within twenty-two
days.
Savani originally filed a class action complaint in the
Court of Common Pleas for Aiken County, South Carolina.

After

WSMS removed the action to federal court, Savani filed a first
amended

class

four counts.

action

complaint

(“Amended

Complaint”)

alleging

The district court rightly dismissed count one of

Savani’s claim for benefits under ERISA for failure to exhaust
administrative remedies. 2

2

The district court also properly dismissed count two on
the grounds that a party may not request simultaneous relief
under both ERISA, § 502(a)(1)(B) and § 502(a)(3), Korotynska v.
Metro. Life Ins. Co., 474 F.3d 101, 107 (4th Cir. 2006), and
state law counts three (estoppel) and four (breach of fiduciary
duty) on the basis of preemption by ERISA, Griggs v. E.I. DuPont
De Nemours & Co., 237 F.3d 371, 378 (4th Cir. 2001).

6

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Savani proceeded to exhaust his administrative remedies by
appealing to the Plan’s benefits committee.
committee

denied

Savani’s

request

for

After the benefits

benefits,

the

district

court reopened the case only as to count one, which the court
had previously construed as a claim for benefits under ERISA, 29
U.S.C. § 1132(a)(1)(B).

On June 12, 2009, the parties filed

cross-motions for summary judgment.

The district court granted

summary judgment in favor of WSMS, holding that the committee
did not abuse its discretion in denying Savani’s request for
benefits and that deletion of § 4.12(a) from the Plan did not
violate

the

anti-cutback

or

notice

provisions

of

ERISA.

On

March 3, 2011, Savani timely filed this appeal.

II.
A.
This Court reviews de novo a district court’s ruling on a
motion for summary judgment.

United McGill Corp. v. Stinnett,

154 F.3d 168, 170 (4th Cir. 1998).

However, in an appeal under

ERISA, the Court must use the same standard that governed the
district

court’s

review

of

a

plan

administrator’s

decision.

Williams v. Metro. Life Ins. Co., 609 F.3d 622, 629-30 (4th Cir.
2010).

Although ERISA is silent on the standard of review for

benefit

denials

standard

challenged

applies

“unless

under
the

§ 1132(a)(1)(B),
benefit

7

plan

a

de

novo

gives

the

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Page: 10 of 16

administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan,”
in which case we review the decision for abuse of discretion.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
The Plan at issue gives broad authority to the committee,
granting
Plan.”

it

“total

and

complete

discretion

to

interpret

the

However, “even as an ERISA plan confers discretion on

its administrator to interpret the plan, the administrator is
not

free

to

alter

the

terms

of

the

plan

unambiguous terms other than as written.”

or

to

construe

Colucci v. Agfa Corp.

Severance Pay Plan, 431 F.3d 170, 176 (4th Cir. 2005), abrogated
on other grounds by Champion v. Black & Decker (U.S.), Inc., 550
F.3d 353 (4th Cir. 2008).
includes

the

authority

“An administrator’s discretion never

‘to

read

out

unambiguous

provisions’

contained in an ERISA plan, and to do so constitutes an abuse of
discretion.”

Blackshear v. Reliance Standard Life Ins. Co., 509

F.3d 634, 639 (4th Cir. 2007) (quoting Colucci, 431 F.3d at
176).
While the Plan’s grant of authority requires us to evaluate
the committee’s decision under an abuse-of-discretion standard,
we have held that the abuse-of-discretion standard under ERISA
is less deferential to administrators than the arbitrary and
capricious standard.

Evans v. Eaton Corp. Long Term Disability

Plan, 514 F.3d 315, 322 (4th Cir. 2008).
8

A reviewing court will

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Document: 48

Date Filed: 03/20/2012

reverse

or

remand

decision

if

it

an

is

not

ERISA

Page: 11 of 16

administrator’s

reasonable,

although

discretionary

not

necessarily

irrational, if it is not the result of a deliberate, principled
reasoning process supported by substantial evidence, or if it
does not reflect careful attention to the language of the plan
and ERISA itself.

Id. (citing Firestone, 489 U.S. at 109-11;

Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 341-42 (4th Cir.
2000); Bernstein v. CapitalCare, Inc., 70 F.3d 783, 788 (4th
Cir. 1995)).
B.
Savani alleges that the committee’s deletion of § 4.12(a)
from the Plan violated ERISA’s anti-cutback statute and notice
requirements and that the amended Plan’s elimination of the $700
early retirement benefit should be unenforceable against him.
In denying Savani’s request for benefits, the committee found
that the anti-cutback statute was not violated because the $700
benefit

was

ERISA.

Our

not

an

decision

“accrued
turns

benefit”
on

within

whether

the

the

$700

meaning
benefit

of
was

included in the “accrued benefit” as defined by the Plan, ERISA,
and

applicable

regulations.

Because

the

plain,

unambiguous

language of the WSMS Plan contemplates inclusion of both § 4.12
supplements

in

its

definition

of

“accrued

benefit,”

the

committee abused its discretion in denying Savani’s request for
benefits.
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ERISA’s anti-cutback statute provides that “[t]he accrued
benefit of a participant under a plan may not be decreased by an
amendment of the plan . . . .” 29 U.S.C. § 1054(g)(1) (2010).
To

determine

whether

WSMS

violated

this

determine what benefits may be accrued.
benefit”

as

“. . .

the

employee’s

provision,

we

must

ERISA defines “accrued

accrued

benefit

determined

under the plan and . . . expressed in the form of an annual
benefit commencing at normal retirement age . . . .” 26 U.S.C.
§ 411(a)(7)(A)(i)

(2010).

We

have

recognized

that

this

definition is “a signpost, directing us to look at the terms of
the plan at issue.”

Bd. of Trs. of the Sheet Metal Workers’

Nat’l Pension Fund v. Comm’r, 318 F.3d 599, 602-03 (4th Cir.
2003). 3
Under

the

Plan,

the

definition

of

“accrued

benefit”

contemplates the possibility that the $700 supplement can be
included in the total accrued benefit calculation.

3

Plan § 1.01

In Sheet Metal Workers’, we also held that the only
textual limitation imposed by ERISA on the definition of
“accrued benefit” was that it must be “expressed in the form of
an annual benefit commencing at normal retirement age.”
318
F.3d at 602.
However, we did not discuss the definition of
“accrued benefit” in the context of early retirement benefits
which, by their definition, cannot commence at normal retirement
age.
While we have held that unfunded, contingent early
retirement benefits or severance payments are not secured by
ERISA itself, see Pierce v. Security Trust Life Ins. Co., 979
F.2d 23 (4th Cir. 1992), the drafters of a retirement plan may
choose to define any benefits as accrued or vested, and thereby
trigger ERISA’s protections.

10

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defines

“accrued

Date Filed: 03/20/2012

benefit”

as

the

Page: 13 of 16

“normal

retirement

Pension

. . . less the WSRC offset . . . plus any applicable supplements
as described in § 4.12 . . . .”

Simply put, prior to the Plan’s

amendment, a beneficiary’s accrued benefit was calculated by an
equation;

the

accrued

benefit

equaled

the

retiree’s

pension,

less a defined offset, plus applicable § 4.12 supplements.
WSMS

argues

that

the

Plan’s

use

of

the

qualifier

“applicable” allowed the benefits committee to delete the $700
supplement without violating ERISA.

ERISA administrators have

discretion to interpret terms that are ambiguous in the sense
that they give rise to at least two different, but reasonable,
interpretations.

Colucci, 431 F.3d at 176.

Further, we may not

upset the benefit committee’s interpretation of the Plan unless
it was an abuse of discretion.

WSMS concedes that the term

“applicable” could reasonably be interpreted as imposing only
the eligibility factors contained in § 4.12.

Still, it contends

that

and

the

this

ambiguity

the

committee

term
was

“applicable”
given

is

discretion

ambiguous,
to

resolve

benefits
by

reasonably interpreting it as categorically excluding the $700
supplement from the accrued benefits equation.
However, ignoring the plain language of the Plan’s terms
was not within the committee’s discretion.
2004

amendment,

§ 4.12

included

exactly

Before the December
two

supplements:

the

$700 early retirement benefit described in § 4.12(a) and the
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$200

Document: 48

lifetime

explicitly

supplement

defines

supplements.”

Date Filed: 03/20/2012

Page: 14 of 16

described

“accrued

in

benefit”

§ 4.12(b).

as

The

including

Plan

“applicable

The plurality of that term, when considered in

light of the fact that only two supplements were included in
§ 4.12, mandates that each of the supplements was capable of
being “applicable” under some circumstance.

Any interpretation

to the contrary, including that of the benefits committee, is
inconsistent with the plain language of the plan.
is

no

reasonable

alternative

interpretation

“applicable,” it is not ambiguous.

Because there
of

the

term

The committee did not have

discretion to read out this unambiguous provision of the Plan,
and therefore abused its discretion in finding that the $700
supplement could never be applicable and in denying Savani’s
claim.
It

should

specific
ancillary

be

language
welfare

protected by ERISA.
the

Plan

definition

plainly
of

classification

noted
of

the

our

WSMS

benefits

holding

Pension

generally

is

incorporated

accrued

both

benefit.”
or

based

Plan.

are

on

independently
Here, however,

supplements

into

Regardless

of

ancillary,

the

Stand-alone,

not

See Pierce, 979 F.2d 23.

“accrued
as

that

welfare

or

its
their

pension

benefits, the supplements’ inclusion in the plain terms of the
Plan’s accrued benefit calculation necessarily meant that any

12

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change

Document: 48

to

the

Date Filed: 03/20/2012

amount

or

existence

Page: 15 of 16

of

a

§ 4.12

supplement

constituted a change to an “accrued benefit.”

III.
The focus of both the district court’s decision and the
appeal was the characterization of the supplements as accrued
benefits.

On that issue, we hold that the Plan’s clear terms

include the § 4.12(a) supplement in the definition of accrued
benefits.
summary

We therefore reverse the district court’s grant of
judgment

to

WSMS

and

remand

the

case

for

further

proceedings consistent with this opinion.
REVERSED AND REMANDED

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BARBARA MILANO KEENAN, Circuit Judge, dissenting:
I would affirm the judgment of the district court for the
reasons

well-articulated

in

its

Accordingly, I respectfully dissent.

14

very

thorough

opinion.