Kenneth Myers, et al v. Bricklayers and Masons Local, et al

Filing

OPINION filed : Myers having failed to support a claim under ERISA or the LMRA, we AFFIRM the judgment of the district court, decision not for publication. Danny J. Boggs, Jeffrey S. Sutton and Deborah L. Cook (AUTHORING), Circuit Judges.

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0709n.06
Case No. 14-4234

FILED

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

KENNETH L. MYERS; KIM MYERS,
Plaintiffs-Appellants,
v.
BRICKLAYERS AND MASONS LOCAL 22
PENSION PLAN; THE BOARD OF
TRUSTEES OF THE BRICKLAYERS AND
MASONS LOCAL 22 PENSION PLAN;
BRICKLAYERS AND TROWEL TRADES
INTERNATIONAL PENSION FUND; THE
BOARD
OF
TRUSTEES
OF
BRICKLAYERS AND TROWEL TRADES
INTERNATIONAL PENSION FUND,
Defendants-Appellees.

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Oct 22, 2015
DEBORAH S. HUNT, Clerk

ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF
OHIO

BEFORE: BOGGS, SUTTON, and COOK, Circuit Judges.
COOK, Circuit Judge. The Bricklayers and Trowel Trades International Pension Fund
(the Fund) and its Trustees (collectively the IPF Defendants) revoked Kenneth Myers’s disability
pension when they discovered that Myers violated an eligibility condition—working in
“noncovered masonry employment.” Myers claimed the amendment adopting the disqualifying
eligibility condition ran afoul of the Employee Retirement Income Security Act’s (ERISA) antiforfeiture provision, which protects normal retirement benefits from forfeiture, and anti-cutback

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provision, which prevents amendments that decrease accrued benefits. 29 U.S.C. §§ 1053,
1054(g). He also alleged that the IPF Defendants breached their fiduciary duties under ERISA
and the Labor Management Relations Act (LMRA). 29 U.S.C. § 1104(a)(1)(A)(i); 29 U.S.C.
§ 186(c)(5). The district court disagreed and dismissed Myers’s suit for failure to state a claim.
We AFFIRM.
I.
Beginning in April 1989, Myers worked for twenty years in the masonry trades, mostly
for employers that contributed to the Fund.

In 2009, however, a heart attack left Myers

permanently disabled. After initially awarding Myers a $515 monthly disability pension, the
Fund discovered that Myers worked in “noncovered masonry employment,” disqualifying him
from disability-pension eligibility.

The plan amendment adopting that eligibility condition

became effective June 1, 1988.
Myers and his wife Kim, a plan beneficiary by virtue of her entitlement to survivor
benefits, sued the IPF Defendants. Myers alleged that suspending payment of his disability
pension violated ERISA’s anti-forfeiture and anti-cutback provisions. He also contended that the
IPF Defendants violated their fiduciary duty under ERISA to “administer the funds entrusted to
them . . . solely in the interests of the participants,” and their fiduciary duty under the LMRA to
administer funds solely for the benefit of employees. The IPF Defendants moved to dismiss,
arguing that: (1) neither the anti-forfeiture provision nor the anti-cutback provision applied to a
welfare benefit such as the disability pension at issue; (2) the IPF Defendants’ adoption of the
amendment imposing the eligibility condition caused no breach of ERISA or the LMRA
fiduciary duties; and (3) the court lacked authority under 29 U.S.C. § 186(c)(5) to grant Myers
the relief he requested.
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The district court granted the motion to dismiss, determining that neither the antiforfeiture provision nor the anti-cutback provision applied to Myers’s disability pension.
Finding the fiduciary duty claims derivative of the other claims, the district court dismissed them
too. Finally, the district court denied Myers’s motion to vacate. Myers appeals.
We review dismissal under Rule 12(b)(6) de novo, construing the complaint in the light
most favorable to the plaintiff, Laborer’s Local 265 Pension Fund v. iShares Tr., 769 F.3d 399,
402–03 (6th Cir. 2014), to determine whether it “contain[s] sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
II.
A. The Anti-forfeiture and Anti-cutback Claims
In finding Myers’s disability pension a “disability benefit” not subject to ERISA’s antiforfeiture and anti-cutback provisions, the district court relied on McBarron v. S & T Industries,
Inc., 771 F.2d 94 (6th Cir. 1985), which held the anti-forfeiture provision inapplicable to
disability benefits. Id. at 98. ERISA’s anti-cutback provision similarly provides no protection to
disability benefits. Rombach v. Nestle USA, Inc., 211 F.3d 190, 193–94 (2d Cir. 2000) (relying
on McBarron’s reasoning to reach this conclusion); see also Anderson v. Suburban Teamsters of
N. Ill. Pension Fund Bd. of Trs., 588 F.3d 641, 651 (9th Cir. 2009). Myers insists, however, that
his disability pension is not a “disability benefit” and thus the anti-forfeiture and anti-cutback
provisions do indeed protect his pension.
Myers first argues that ERISA’s anti-cutback provision covers accrued benefits, and his
disability pension qualifies as accrued. He relies on a Treasury regulation that defines certain
types of accrued benefits as: (1) “the excess . . . of the actuarial present value of a . . . benefit
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over the actuarial present value of the accrued benefit commencing at normal retirement age”;
and (2) a “benefit . . . where the actuarial present value of the . . . benefit available to the
participant under the plan at that annuity starting date exceeds the actuarial present value of the
accrued benefit commencing at normal retirement age.” 26 C.F.R. § 1.411(d)-3(g)(6)(iv), (v).1
Myers claims that his disability pension meets these definitions. But this regulation applies only
to plans amended on or after August 12, 2005, not Myers’s pension. 26 C.F.R. § 1.411(d)3(j)(1); see also Section 411(d)(6) Protected Benefits, 70 Fed. Reg. 47109, 47109 (Aug. 12,
2005). Because the 1988 Fund amendment adopting the disqualifying condition predates the
Treasury-regulation definition that Myers cites as helpful, the regulation offers no benefit to
Myers’s position.
Second, Myers contends that ERISA’s anti-cutback provision covers optional forms of
benefit. See 29 U.S.C. § 1054(g)(2)(B). Again citing a Treasury regulation, he argues that the
Fund rendered his disability pension an “optional form of benefit” by providing him with the
option to receive his disability pension as a 50% joint-and-survivorship annuity with his wife as
beneficiary. See 26 C.F.R. § 1.411(d)-4(A-1)(b)(2)(Example 1). Even if true, however, the anticutback provision protects only those “optional form[s] of benefit . . . attributable to service
before the amendment” that reduces the benefit. 29 U.S.C. § 1054(g)(2)(B), (g)(2). Myers
attributes none of his disability-pension rights “to service before the amendment.” Because
Myers’s participation in the Fund began in April 1989, he never worked in covered employment
before the amendment became effective in June 1988.
Treasury regulations bear on this case because ERISA’s anti-cutback provision “show[s]
up in substantially identical form” in section 411(d)(6) of the Internal Revenue Code, Cent.
Laborers’ Pension Fund v. Heinz, 541 U.S. 739, 746 (2004), and the “Secretary of the Treasury
[has] the ultimate authority to interpret these overlapping anti-cutback provisions.” Id. at 746–
47.
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Third, Myers maintains that the Fund cannot enforce the disqualifying eligibility
condition against him inasmuch as he received no notice of that condition as required by ERISA,
29 U.S.C. §§ 1022(a), (b), 1024(b)(1). To the extent Myers claims that an ERISA notice
violation entitles him to relief, his complaint includes no such allegation. But even if it had,
ERISA provides only statutory damages as a remedy for ERISA notice violations. Lewandowski
v. Occidental Chem. Corp., 986 F.2d 1006, 1008–09 (6th Cir. 1993) (per curiam); 29 U.S.C.
§ 1132(c).

Additionally, Myers provides no authority suggesting that ERISA’s notice

requirements give rise to liability under the anti-forfeiture or anti-cutback provisions.
In his last effort to circumvent McBarron, Myers claims that the IPF Defendants
comingled funds used for disability pensions with funds used for retirement pensions in violation
of the LMRA. 29 U.S.C. § 186(c)(5)(C). This violation, says Myers, estops the IPF Defendants
from arguing that his disability pension is a disability benefit outside the anti-cutback provision’s
protection. Because Myers first made this estoppel argument in a reply in support of his motion
to vacate, he forfeited any argument to this effect, and we do not take it up. See Scottsdale Ins.
Co. v. Flowers, 513 F.3d 546, 553–54 (6th Cir. 2008).
Because McBarron controls, the district court correctly dismissed the anti-forfeiture and
anti-cutback claims.
B. The Breach-of-Fiduciary-Duty Claims
Myers argues that the district court erred by dismissing his claims for breach of fiduciary
duty as derivative of his anti-forfeiture and anti-cutback claims. But we need not decide if
Myers’s fiduciary-duty claim under ERISA, 29 U.S.C. § 1104(a)(1)(a)(i), derives from Myers’s
other ERISA claims because the IPF Defendants did not act as fiduciaries when amending the
Fund. See Gard v. Blankenburg, 33 F. App’x 722, 728 (6th Cir. 2002) (holding that “trustees of
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a multi-employer pension benefit plan do not act as fiduciaries under ERISA when they amend . .
. the plan.”). We may, of course, affirm dismissal on grounds other than those relied upon by the
district court, Sears v. Union Cent. Life Ins. Co., 222 F. App’x 474, 477 (6th Cir. 2007), and we
do so here on the merits of the fiduciary-duty claim.
Myers’s next claim, that by adopting the disqualifying eligibility condition the IPF
Defendants breached their fiduciary duty under the LMRA to administer trust funds “for the sole
and exclusive benefit of the employees,” fails for several reasons. 29 U.S.C. § 186(c)(5). First,
this provision “simply requir[es] a trust obligation for the specified purposes, defined and
enforced . . . under ERISA,” Local 144 Nursing Home Pension Fund v. Demisay, 508 U.S. 581,
592 (1993), section 1104(a)(1), id. at 592 n.6. And as explained above, no breach of ERISA’s
§ 1104(a)(1) fiduciary duties occurs from amending the terms of a plan. See Gard, 33 F. App’x
at 728.

Second, because Myers alleges no bribery, extortion, or misuse of union funds,

29 U.S.C. § 186 offers no relief. See Sellers v. O’Connell, 701 F.2d 575, 578 (6th Cir. 1983)
(affirming a dismissal under 29 U.S.C. § 186 when the plaintiff failed to allege bribery,
extortion, or misuse of funds). Third, Myers requests an injunction reinstating his benefits, but
Demisay forecloses that remedy. 508 U.S. at 587 (prohibiting federal courts from issuing
injunctions to remedy violations of 29 U.S.C. § 186(c)(5)).
III.
Myers having failed to support a claim under ERISA or the LMRA, we AFFIRM the
judgment of the district court.

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