ANTHONY v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS DISTRICT LODGE 1 et al
Filing
41
MEMORANDUM OPINION. Signed by Judge Amy Berman Jackson on 3/29/2019. (lcabj2)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
GARY ANTHONY,
)
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Plaintiff,
)
)
v.
)
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INTERNATIONAL ASSOCIATION OF )
MACHINISTS AND AEROSPACE
)
WORKERS DISTRICT LODGE 1, et al., )
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Defendants.
)
____________________________________)
Civil Action No. 17-1249 (ABJ)
MEMORANDUM OPINION
Plaintiff Gary Anthony brought this action against defendants District Lodge 1, a union
affiliated with the International Association of Machinists and Aerospace Workers, and the
International Association of Machinists and Aerospace Workers National Pension Fund (the
“Fund”). Compl. [Dkt. # 1] at 1–2. He alleges that defendants violated the terms of the Plan and
breached their fiduciary duties under the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq., when they failed to include him as a participant under the
Plan and denied him benefits. Id. Specifically, in Count I, plaintiff alleges that defendants violated
the terms of the Plan by denying him eligibility to participate in the Fund as directed by the
“documents and instruments governing the Plan.” Compl. ¶¶ 13–16. In Count II, he alleges that
defendants owed him a fiduciary duty under ERISA to “observe and follow the governing terms”
of the Plan, and that they breached that duty. Id. ¶¶ 17–21.
On August 24, 2017, District Lodge 1 moved to dismiss both counts pursuant to Federal
Rule of Civil Procedure 12(b)(6). It argued that plaintiff failed to allege sufficient facts to establish
that District Lodge 1 is a fiduciary under ERISA. See Def.’s Mot. to Dismiss & Supporting Mem.
of Law [Dkt. # 11] at 3–5. On November 6, 2017, the Court granted District Lodge 1’s motion to
dismiss Count II, because fiduciary status was a requirement for that count, but denied the motion
to dismiss Count 1, because fiduciary status was not a requirement for that count. Anthony v. Int’l
Ass. Of Machinists & Aerospace Workers District Lodge 1, 296 F. Supp. 3d 92, 96–98 (D.D.C.
2017). Thus, plaintiff’s ERISA claim for violation of the Plan proceeded against District Lodge
1.
On August 15, 2018, District Lodge 1 moved for summary judgment on Count I, arguing
that the Trustees of the Fund had sole discretion to make eligibility determinations, and therefore
District Lodge 1 could not have violated the Plan when plaintiff was found to be ineligible to
participate. See District Lodge 1’s Mot. for Summ. J. [Dkt. # 28] (“District Lodge 1’s Mot.”);
District Lodge 1’s Mem. of P. & A. in Supp. of its Mot. [Dkt. # 28-1] (“District Lodge 1’s Mem.”).
That same day, the Fund moved for summary judgment on Counts I and II, arguing that the
Trustees’ decision to deny eligibility to plaintiff was reasonable and therefore entitled to deference,
and that plaintiff could not pursue Count II because the remedies requested were duplicative of
Count I. See Fund’s Mot. for Summ. J. [Dkt. # 27] (“Fund’s Mot.”). Plaintiff filed a cross-motion
for summary judgment on September 28, 2018 arguing that the Fund’s decision was not based on
substantial evidence and was therefore unreasonable. Pl.’s Mem. in Supp. of Pl.’s Mot. for Summ.
J. [Dkt. # 29] (“Pl.’s Mem.”) at 6–9.
Based upon the parties’ briefs, the evidentiary record, and the relevant law, the Court will
grant the Fund’s motion for summary judgment, because the Fund’s decision to deny eligibility to
plaintiff was reasonable, and plaintiff cannot pursue duplicative remedies under § 1132(a)(3). The
Court will also grant District Lodge 1’s motion for summary judgment because the determination
to deny eligibility was solely within the Trust’s discretion.
2
BACKGROUND
I.
The Parties and Relevant Contracts
Defendant District Lodge 1 is a union affiliated with the International Association of
Machinists and Aerospace Workers (“IAM”). Pl.’s Statement of Facts in Supp. of Pl.’s Mot. [Dkt.
# 29] (“Pl.’s SOF”) ¶ 2; Fund’s Statement of Facts in Supp. of Fund’s Mot. [Dkt. # 27-1] (“Fund’s
SOF”) ¶ 11. Plaintiff was employed as an “Organizer” by District Lodge 1 from May 2004 until
January 2012, when he became a “Grand Lodge Representative,” a position he continues to hold.
Pl.’s SOF ¶ 1; Fund’s SOF ¶ 21. Defendant IAM National Pension Fund (the “Fund”) is a multiemployer defined benefit pension plan, and District Lodge 1 is a “Contributing Employer” to the
Fund. Pl.’s SOF ¶ 2; Fund’s SOF ¶ 11.
The Fund is established and maintained pursuant to its Amended and Restated Trust
Agreement (“Trust Agreement”). AR550–88 1; see also Fund’s SOF ¶ 1. The Trust Agreement
allows the Trustees to “allocate fiduciary responsibilities among the Trustees, or to committees of
the Trustees.” AR560. Pursuant to this provision, the Trustees established an Appeals Committee
which has been allocated the responsibility to “[r]eview and make decisions on all participant
appeals submitted to the Fund,” among other things. AR731–32.
The Fund is governed by a document referred to as the Plan, which details the terms and
conditions of the Fund. See AR409. An individual’s right to a benefit payable by the Fund depends
on whether the individual is a Participant, defined in the Plan as a “Covered Employee who meets
the requirements for participation in this Plan . . . .” AR602. The Plan defines “Covered
Employee” as “a person employed in Covered Employment.” AR597. “Covered Employment,”
1
Citations to the Administrative Record submitted by the Fund [Dkt. # 26], will be
abbreviated to AR. The pages cited correspond to the last three digits of the Bates Stamp on the
document.
3
in relevant part, is defined as “employment in a job classification for which employer contributions
are required to this Plan by a written agreement between the Trustees and a Contributing Lodge.”
Id.
The Plan also establishes the scope of the Trustees’ authority:
Trustees have the sole and absolute authority, in [their] discretion, to interpret this
Plan and to determine eligibility for benefits under this Plan. As part of their
discretionary powers, the Trustees shall be the sole judge of: (a) the standard of
proof required in any case; (b) the application and interpretation of this Plan; (c)
the amount of or entitlement to a pension; and (d) the crediting of Future or Past
Service.
AR707. The decisions of the Trustees “with respect to any exercise of this discretion made in
good faith shall be final and binding on the parties.” Id.
District Lodge 1 and the Trustees of the IAM National Pension Fund executed a series of
written Participation Agreements, which governed the union’s participation in the Plan. Fund’s
SOF ¶ 11; Pl.’s SOF ¶ 3. During the time plaintiff was employed as an Organizer, from 2004 to
2012, there were a number of Participation Agreements executed. 2
See AR41–43; AR47–49;
AR56–58; AR80–82; AR215–20. All of these agreements required District Lodge 1 to “provide
coverage under the National Pension Plan for all of its employees, except those employees in a
bargaining unit which has negotiated a Collective Bargaining Agreement.” See AR41; AR47;
AR56; AR80; AR215.
II.
Plaintiff’s Claim
On or about April 5, 2016, plaintiff contacted the Fund because no contributions were being
submitted on his behalf by District Lodge 1 to the Fund, and he believed that contributions should
2
Plaintiff asserts there were four agreements, see Pl.’s Mem. at 2–3, and the Fund asserts
that there were two agreements. Fund’s Mot. at 3. Since these agreements were identical, and the
parties do not dispute that fact, the exact number of agreements is irrelevant.
4
have been made. AR10. After looking into the matter, the Fund notified plaintiff on September
13, 2016 that he was not a participant in the IAM National Pension Fund or National Pension Plan.
AR174. On October 21, 2016, plaintiff requested an appeal of that determination. AR175. He
was told by the Fund’s Executive Director, Rick Tierney, that his appeal would be heard at the
Appeals Committee meeting on December 15, 2016. AR180; AR202–06.
That December, the Appeals Committee decided that it needed additional information
before it could render a decision. See AR239 (adopting a motion to defer plaintiff’s appeal pending
additional research). On December 20, 2016, the Fund notified plaintiff of its decision to defer
determination pending additional research, and informed plaintiff that it has “referred this matter
to District Lodge 1.” AR240. The purpose of the referral was to ascertain District Lodge 1’s
understanding of what job classifications it intended to cover as a Contributing Employer to the
Fund under the Participation Agreement. Id.
To that end, the Committee reached out to Anthony Armideo, the Directing Business
Representative of District Lodge 1. AR242–43. It posed four questions:
1. What job classifications did District Lodge 1 intend to contribute on behalf of as a
Contributing Employer during its time as a Contributing Employer to the Fund, in
accordance with the attached Participation Agreement?
2. What job classifications of employees at District Lodge 1 were non-collectively
bargained employees of District Lodge 1 during its time as a Contributing Employer to
the Fund?
3. Were any job classifications at District Lodge 1 not employees of District Lodge 1
during its time as a Contributing Employer to the Fund? For example, were any persons
or job classifications brought out to District Lodge 1 on lost time? Or were certain job
classifications employees of another organization, but District 1 served a pass through
for the purpose of pay?
4. Please provide any documents that assist in answering these questions, including but
not limited to meeting minutes, notes, letters or email correspondence, Lodge 1 records
including payroll records, and the like.
5
AR 242.
Armideo responded on January 6, 2017, stating that District Lodge 1 never did, and did not
then, intend to contribute to the Fund on behalf of the District Lodge 1 Organizer position.
AR258–64. In coming to this conclusion, he examined the history of the Organizer position, prior
and current Participation Agreements, past meeting minute records, and payroll audit records of
District Lodge 1. Id. All of these records were attached to his response and submitted to the
Appeals Committee for consideration. Id. at 265–312.
On January 26, 2017, the Committee met again to consider plaintiff’s appeal, and based
upon the information presented and the supporting documentation attached to Armideo’s letter,
the Committee voted to deny plaintiff’s appeal. AR316. Plaintiff was notified of the decision on
January 31, 2017. Specifically, Tierney wrote:
In support of its position, District Lodge 1 provided District Lodge meeting minutes
and various motions dating back to 1978. Those documents evidence that the
positions for which District Lodge 1 intended to contribute extended only to
Business Representatives (alternatively described as Business Agents) and the
Secretary. Those documents also reflect that the Organizer position was never
included among the class of employees for which contributions were intended to
be made – whether during, or after your tenure as the District Organizer. District
Lodge 1 also provided associated participation agreements. To the extent that the
participation agreements include language suggesting that contributions were to be
made for all employees other than those in a bargaining unit which has negotiated
other pension benefits, there are factors that militate against a strict reading of that
provision.
First, the [P]articipation Agreement is a boilerplate agreement that was not drafted
by District Lodge l. It is a form agreement that is provided to contributing
employers such as District Lodge 1. Since District Lodge 1 did not draft any of the
participation agreements, it follows that the agreements should not be construed
against it. Moreover, the documents illustrate that District Lodge 1 signed separate
Participation Agreements for the Business Representative position and the
Secretary position. Had District Lodge 1 intended for the “all employees” language
to apply to it, it would not have utilized separate participation agreements for the
business representative and the office secretary positions. One agreement for all
covered positions would have sufficed.
6
Additionally, the documents do reflect your attendance in at least some of the
Lodge meetings where the IAM National pension plan was discussed, including the
pension rate for the Business Representative position. Finally, District Lodge 1
presented two payroll audit reports dated July 10, 2007 (auditing the period of
January 2004 through December 2006) and May 23, 2014 (auditing the period of
January 2011 through December 2013). Both reports found no discrepancies for
the audit periods, including audit periods [when] you were employed as the District
Lodge 1 organizer. You have not presented any documentary evidence such as an
employment offer letter or employment agreement that commits District Lodge 1
to provide a pension through the Fund. In conclusion, none of the documentary
evidence presented specifically and explicitly indicates that the Organizer position
was intended by District Lodge 1 to be included in positions for which contributions
to the Fund were to be made.
AR317–18 (emphasis in original).
On June 26, 2017, plaintiff filed a complaint in this Court against the Fund and District
Lodge 1 asserting ERISA violations and requesting recovery of his benefits. Compl. ¶¶ 13–21.
STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The party seeking summary judgment “bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat summary
judgment, the non-moving party must “designate specific facts showing that there is a genuine
issue for trial.” Id. at 324 (internal quotation marks omitted).
The mere existence of a factual dispute is insufficient to preclude summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). A dispute is “genuine” only if a
reasonable fact-finder could find for the non-moving party; a fact is “material” only if it is capable
7
of affecting the outcome of the litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236,
1241 (D.C. Cir. 1987). In assessing a party’s motion, the court must “view the facts and draw
reasonable inferences ‘in the light most favorable to the party opposing the summary judgment
motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007) (alterations omitted), quoting United States
v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).
“The rule governing cross-motions for summary judgment . . . is that neither party waives
the right to a full trial on the merits by filing its own motion; each side concedes that no material
facts are at issue only for the purposes of its own motion.” Sherwood v. Wash. Post, 871 F.2d
1144, 1147 n.4 (D.C. Cir. 1989) (alteration in original), quoting McKenzie v. Sawyer, 684 F.2d 62,
68 n.3 (D.C. Cir. 1982). In assessing each party’s motion, “[a]ll underlying facts and inferences
are analyzed in the light most favorable to the non-moving party.” N.S. ex rel. Stein v. District of
Columbia, 709 F. Supp. 2d 57, 65 (D.D.C. 2010), citing Anderson, 477 U.S. at 247.
ANALYSIS
I.
The Court will grant the Fund’s motion for summary judgment on Count I
because its determination that plaintiff was ineligible to participate in the Fund
was reasonable and entitled to deference.
A. The appropriate standard of review for plaintiff’s eligibility determination is
the deferential standard.
As a threshold matter, the Court must determine what standard of review applies to the
Fund’s benefits determination in this case. Section 502(a)(1)(B) of ERISA provides that a
participant or beneficiary 3 of a covered plan may bring an action “to recover benefits due to him
3
While plaintiff is not technically a participant or beneficiary of the plan, he is permitted to
bring an action under this statute claiming that he should be considered a participant. The Supreme
Court held that the term “participant” is “naturally read to mean either ‘employees in, or reasonable
expected to be in, currently covered employment.’” Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 117–18 (1989).
8
under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights
to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). The Supreme Court
has held that courts should apply a de novo standard – instead of the more deferential arbitrary and
capricious or abuse of discretion standard – to a benefits determination under ERISA “unless the
plan provides to the contrary.”
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008),
citing Firestone, 489 U.S. at 115. A plan provides to the contrary when it grants its “administrator
or fiduciary discretionary authority to determine eligibility for benefits.” Id., quoting Firestone,
489 U.S. at 115 (internal quotation marks omitted). Under those circumstances, “[t]rust principles
make a deferential standard of review appropriate.” Firestone, 489 U.S. at 111; cf. Fitts v. Fed.
Nat’l Mortgage Ass’n, 236 F.3d 1, 5 (D.C. Cir. 2001) (deciding when Firestone’s exception
applies).
The Plan in this case provides:
The Trustees have the sole and absolute authority, in its discretion, to interpret this
Plan and to determine eligibility for benefits under this Plan. As part of their
discretionary powers, the Trustees shall be the sole judge of: (a) the standard of
proof required in any case; (b) the application and interpretation of this Plan; (c)
the amount of or entitlement to a pension; and (d) the crediting of Future or Past
Service.
AR707. And, under the Trust Agreement, the Trustees are empowered “[t]o establish, interpret,
and administer the Plan on behalf of the Employees and their beneficiaries” and “[t]o exercise their
discretionary authority to make all determinations concerning matters of benefit coverage and
eligibility, type, amount, and duration, including interpreting ambiguous provisions of the Plan
and Trust.” AR561; AR566.
Plaintiff does not dispute the fact that the Plan contains language giving the Trustees
absolute discretionary authority to determine eligibility to benefits under the Plan; nor does
plaintiff dispute the Trustees’ ability to delegate their responsibilities to a committee (as the
9
Trustees did in this case). 4 Thus, the Court will apply a deferential standard, 5 rather than a de novo
standard, to the Fund’s decision – as announced by the Appeals Committee – denying plaintiff’s
eligibility for pension benefits.
B. The Appeals Committee did not sub-delegate its authority to District Lodge 1
when it asked District Lodge 1 for information.
The Trust Agreement provides that the Trustees may delegate their responsibilities to a
committee:
The Trustees may allocate fiduciary responsibilities among the Trustees, or to
committees of the Trustees, and they may delegate fiduciary duties to persons other
than the Trustees and delegate Trustee responsibilities to investment managers as
provided in this Restated Trust Agreement and in accordance with the requirements
of ERISA.
AR560. Here, the authority to determine eligibility was delegated to the Appeals Committee.
On December 20, 2016, after an initial meeting where the Committee determined that it
needed more information to evaluate plaintiff’s appeal, AR239, the Committee sent a letter to
Anthony Armideo of District Lodge 1 requesting additional information to ascertain its intention
4
Rather, plaintiff seems to be making two arguments with regards to the Trustee’s authority:
First, he argues that because the Participation Agreements have clear language covering “all
employees,” the use of extrinsic evidence outside this contract was unreasonable and as such, the
determination by the Appeals Committee was arbitrary and capricious. Pl.’s Mem. at 6–9. Second,
plaintiff argues that the Appeals Committee improperly delegated its responsibility to determine
his eligibility for benefits to District Lodge 1. Id. at 7. These arguments will be addressed in more
detail below.
5
The standard to be applied in cases where a fiduciary has been given discretionary authority
has been “variously described by the [Supreme] Court as ‘arbitrary and capricious’ or ‘abuse of
discretion,’ but regardless of how it is phrased, the standard to be applied ‘is plainly
deferential.’” James v. Int’l Painters and Allied Trades Indus. Pension Plan, 710 F. Supp. 2d 16,
23 (D.D.C. 2010), quoting Wagener v. SBC Pension Benefit Plan–Non–Bargained Program, 407
F.3d 395, 402 (D.C. Cir. 2005); see also Block v. Pitney Bowes Inc., 952 F.2d 1450, 1454 (D.C.
Cir. 1992) (“The distinction, if any, between ‘arbitrary and capricious review’ and review for
‘abuse of discretion’ is subtle . . . we are satisfied, there is no need to adopt one phrase and avoid
the other.”).
10
as to who would be covered under the Participation Agreements. AR240. Plaintiff takes the
position that the request for information was an unauthorized sub-delegation of the powers
allocated to the Appeals Committee. Pl.’s Mem. at 7. The Fund maintains that it did not transfer
its authority to the union; rather, it sought the input from District Lodge 1 because it needed
additional information, and then it evaluated the information provided and came to its own final
decision. Fund’s Reply in Supp. of Mot. for Summ. J. [Dkt. # 33] (“Fund’s Reply”) at 4–5.
The Court agrees that no sub-delegation occurred. In responding to the Committee’s letter,
Armideo provided a number of documents and responses to questions posed by the Appeals
Committee. AR258–312. On January 26, 2017, the Appeals Committee convened a new meeting
at which they considered plaintiff’s appeal. AR313. According to the contemporaneous records,
at that meeting, the Fund’s Executive Director “reviewed the facts, including the material provided
to the Committee by District Lodge No. 1, with the committee. After discussion, [a] motion was
made, seconded and adopted to deny Mr. Anthony’s appeal.” AR316.
After the decision was made, the Fund’s Executive Director, Rick Tierney, advised plaintiff
that the Appeals Committee had denied his appeal and did not consider him an eligible participant
in the Fund.
AR317–19. Tierney explained that the Committee reviewed the documents
submitted by District Lodge 1, and it found that they showed that District Lodge 1 did not intend
to include Organizers as a job classification covered by the Participation Agreements. See AR317–
18. The Committee also considered the fact that plaintiff did “not present[] any documentary
evidence such as an employment offer letter or employment agreement that commits District
Lodge 1 to provide a pension through the Fund.” AR318. The Appeals Committee did not simply
adopt the District Lodge 1’s findings. Rather, the Committee reviewed the information provided
11
to it by District Lodge 1, evaluated the strength of the evidence, and determined that plaintiff was
not entitled to coverage.
The Court finds that, by merely requesting information from District Lodge 1, the
Committee did not delegate its authority to make a determination regarding plaintiff’s eligibility.
Indeed, it was prudent to request documentation and seek District Lodge 1’s input to ascertain
whether plaintiff was engaged in “Covered Employment,” because the determination of which job
classifications are covered depends on what the union intended when it executed the Participation
Agreements.
Furthermore, the record reflects that District Lodge 1 did not view the request for
information as a delegation of decisionmaking authority regarding plaintiff’s eligibility. In
submitting the information to the Fund, Armideo stated:
I hope you agree that the information that I have provided by way of written text
above, along with the accompanying attachments[,] support the position of the
District Lodge, that the District Lodge Organizer is not now and never has been
entitled to have IAMNPF contributions made by the District Lodge on their behalf.
AR263. Thus, District Lodge 1 plainly understood that the decision would be made by the Appeals
Committee.
For these reasons, the Court finds there was no unauthorized sub-delegation of the Appeals
Committee’s power to interpret the Plan.
C. It was reasonable for the Appeals Committee to examine extrinsic evidence to
determine the meaning of the Participation Agreements.
The Plan in this case defines a “Participant” as a “Covered Employee who meets the
requirements for participation in this Plan . . . .” AR602. The Plan defines “Covered Employee”
as “a person employed in Covered Employment.” AR597. And “Covered Employment,” in
relevant part, is defined as “employment in a job classification for which employer contributions
12
are required to this Plan by a written agreement between the Trustees and a Contributing Lodge.”
AR416; AR597. Because the definition of “Covered Employment” specifically references a
separate written agreement, it is necessary to look outside of the Plan to interpret its terms. US
Airways, Inc. v. McCutchen, 569 U.S. 88, 102 (2013) (“The words of a plan may speak clearly,
but they may also leave gaps. And so a court must often ‘look outside the plan’s written language’
to decide what an agreement means.”), quoting CIGNA Corp. v. Amara, 563 U.S. 421, 436 (2011).
The operative written agreements in this case are the Participation Agreements executed
by the Fund and District Lodge 1. 6
And the phrase being interpreted by the Appeals Committee
is found at paragraph 1:
The undersigned Lodge wishes to become or continue to be a Contributing Lodge
and to contribute to the I.A.M. National Pension Fund as a Contributing Employer
to provide coverage under the National Pension Plan for all its employees, except
those employees in a bargaining unit which has negotiated a Collective Bargaining
Agreement.
AR47 (emphasis added).
Plaintiff’s principal argument is that the Participation Agreements clearly state that District
Lodge 1 will provide coverage under the Plan for “all its employees, except those in a bargaining
unit which has negotiated a Collective Bargaining Agreement,” and that since he is an employee
6
The parties disagree on whether the Participation Agreements can be considered part of the
Plan. Plaintiff characterizes the Participation Agreements as plan-related documents. Pl.’s Mem.
at 6, 8 (describing the relevant provision in the Participation Agreements as a term in the Plan);
Pl.’s Reply in Supp. of Summ. J. [Dkt. # 39] (“Pl.’s Reply”) at 3. The Fund argues that it is not
interpreting the Plan when it interprets a provision of the Participation Agreement, although it
recognizes that the Participation Agreements are referenced in the Plan (under the definition of
Covered Employment). Fund’s Reply at 2–3. The Fund argues that interpretation of the
Participation Agreements informs eligibility for benefits under the Plan, and because the Trust
Agreement confers to it “the sole and absolute authority, in its discretion, . . . to determine
eligibility for benefits under this Plan,” it is entitled to deference for its interpretation of the
Participation Agreements. Fund’s Reply at 3. The Court need not decide whether the Participation
Agreements are part of the Plan – whether or not the Participation Agreements are part of the Plan,
the Committee had to interpret them to make its determination.
13
who is not in a bargaining unit, he should have been covered. Pl.’s Mem. at 6. He maintains that
because the Committee’s interpretation is contrary to the plain language of the Participation
Agreements, and the Committee used extrinsic evidence to support its interpretation, its decision
is unreasonable and the Court should not afford it any deference. Pl.’s Mem. at 7–9. The Fund
responds that the circumstances surrounding the Participation Agreements render the provision at
issue vague, and the history and prior practice of District Lodge 1 show that District Lodge 1 never
intended to provide coverage for plaintiff. Fund’s Reply at 5–7. Thus, its evaluation of the issue
was reasonable and is entitled to deference. Id.
The Court rejects the Fund’s contention that the “backdrop” of the Participation
Agreements has made the meaning of the provision unclear. Fund’s Reply at 7. Under the rules
governing the construction of contracts, it is not the surrounding circumstances that render a
provision vague; rather, “[a] contract is ambiguous when it or its provisions are reasonably or fairly
susceptible of different constructions or interpretations, or of two or more different meanings.”
Potomac Elec. Power Co. v. Mirant Corp., 251 F. Supp. 2d 144, 148–49 (D.D.C. 2003), citing
Holland v. Hannan, 456 A.2d 807, 815 (D.C. 1983). And, extrinsic evidence may be used “only
when the contract is ambiguous.” Id. at 150; see Commonwealth Commc’ns, Inc. v. NLRB, 312
F.3d 465, 468 (D.C. Cir. 2002) (holding that “[i]n the absence of ambiguity in [a] collective
bargaining agreement . . . [courts] have no cause to examine extrinsic evidence of the parties’
intent”) (internal quotation marks and citation omitted); Papago Tribal Util. Auth. v. FERC, 723
F.2d 950, 955 (D.C. Cir. 1983) (holding that “in the absence of ambiguity[,] the intent of the parties
14
to a contract must be ascertained from the language thereof”) (internal quotation marks and citation
omitted). 7 Therefore, it is necessary to look at the text of the contract.
In looking at this provision in isolation, the phrase “all employees” is quite clear. But, the
meaning of a contract is determined by looking at the entire contract, not just one provision. See
WMATA v. Mergentime Corp., 626 F.2d 959, 961 (D.C. Cir. 1980) (“[T]he Court should construe
the contract as a whole so as to give meaning to all of the express terms.”) The Participation
Agreements go on to state in paragraph 2:
The I.A.M. Lodge shall contribute to the I.A.M. National Pension Fund, National
Pension Plan for each hour/day or portion thereof for which all employees in all job
classifications covered by this Agreement are entitled to receive pay under this
agreement as follows : . . . .
AR47 (emphasis added). 8 By adding the qualifying phrase – “in all job classifications covered by
this Agreement” – the phrase “all employees” is rendered ambiguous, because it is not clear from
the terms of the contract which job classifications are covered by the Participation Agreements.
Because this term of the contract is ambiguous, it was reasonable for the Committee to ascertain
who District Lodge 1 intended to be covered by the Agreement by looking to extrinsic evidence,
such as prior contracts, meeting minutes, and audit files.
7
In reviewing the Committee’s interpretation of the Participation Agreements, the Court
may use principles of contract law. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147–48
(explaining that the remedy provided for in § 1132(a)(1)(B) is designed “to protect contractually
defined benefits” and recognizing the contract-law foundations of the law); McCutchen, 569 U.S.
at 1548–49 (using “[o]rdinary principles of contract interpretation” to construe an ERISA plan).
8
The two provisions cited by the Court are in every Participation Agreement in effect during
the time period that plaintiff is claiming he was entitled to coverage.
15
D. The Appeals Committee’s decision that plaintiff is not eligible to participate in
the Fund was the result of a deliberate, principled, reasonable process and
supported by substantial evidence.
In reviewing the Appeals Committee’s decision to deny eligibility to plaintiff under the
deferential standard, the Court must consider whether that decision was reasonable. See Block, 952
F.2d at 1454. A court cannot overturn a decision that is reasonable, “even if an alternative decision
also could have been considered reasonable.” Id. at 1452 (internal quotation marks omitted);
Mobley v. Cont’l Cas. Co., 405 F. Supp. 2d 42, 48 (D.D.C. 2005) (“[A] deferential standard of
review allows the plan administrator to reach a conclusion that may technically be incorrect so
long as it is reasonably supported by the administrative record.”). This means that the Trustees’
decision should not be overturned if it is the result of a “deliberate, principled, reasonable process
and if it is supported by substantial evidence,” that is “more than a scintilla but less than
preponderance.” Buford v. UNUM Life Ins. Co. of Am., 290 F. Supp. 2d 92, 100 (D.D.C. 2003)
(internal quotation marks omitted), citing Leonard v. Southwestern Bell Corp. Disability Income
Plan, 341 F.3d 696, 701 (8th Cir. 2003). With these principles in mind, the Court must determine
whether, “based on the record available to the administrator or fiduciary at the time the decision
was made,” the decision was reasonable and entitled to deference. Crummett v. Metro. Life Ins.
Co., No. 06–01450, 2007 WL 2071704, at *3 (D.D.C. July 16, 2007), citing Block, 952 F.2d at
1455.
The Fund asserts that it engaged in a deliberate, principled, and reasonable process that
included review of all the documentation submitted by District Lodge 1 and discussions with the
Appeals Committee. The Court agrees. The Appeals Committee considered plaintiff’s request
twice, first in December 2016 and then again in January 2017. At its first meeting, the Committee
acted in a deliberate manner when it determined that it needed additional information before it
16
could render a decision. AR239. The Committee then requested additional information from
District Lodge 1, and the union responded with over 50 pages of supporting documentation.
AR258–312.
On January 26, 2017, the Appeals Committee met for a second time to discuss the appeal,
and as noted above, the meeting minutes reflect that the Executive Director “reviewed the facts,
including the material[s] provided to the Committee by District Lodge 1, with the Committee.”
AR316. The Committee Members discussed the evidence and voted to deny plaintiff’s appeal. Id.
The decision letter details a reasoned and principled determination, based on materials in the record
and plaintiff’s failure to supply documentation that would support an alternative conclusion.
AR317–18.
In addition, the Court’s review of the underlying materials confirms that the Fund’s
decision was based on substantial evidence. First, the Fund reviewed the history of the position.
When the first Participation Agreement was executed in 1978, there was no position of “District
Lodge Organizer” (the position that plaintiff held). AR258–59. The only positions at District
Lodge 1 were the Secretary and the Business Representative. Id. At a meeting dated December
11, 1978, District Lodge 1 approved a motion that Business Representatives should be allowed to
participate in the Fund. AR258; AR268. The Secretary was already participating in the Fund
under a separate Participation Agreement. AR259. This supports the Fund’s understanding that
District Lodge 1, despite the language in the boilerplate Participation Agreement that “all
employees” would be covered, did not intend to cover all employees, because a vote to cover a
particular job classification would have been unnecessary. By virtue of this vote, all of the
employees of District Lodge 1 at that time – the Business Representative and the Secretary – were
17
covered by the Participation Agreement. But there was no vote at any subsequent meeting to cover
Organizers.
The Fund also reasoned that because District Lodge 1 did not draft the Participation
Agreements – they were form agreements provided to contributing employers – the broad language
in the Agreement could not be used against it. This is also reasonable given the fact that there is
other language in the Agreements that is inapplicable to District Lodge 1. For example, the
Participation Agreements exempts from coverage “employees in a bargaining unit which has
negotiated a Collective Bargaining Agreement,” but District Lodge 1 never had any employees in
a bargaining unit – it only had the Business Representative, Secretary, and Organizer positions.
AR261.
The record also shows the Organizer position was not consistently filled, and that no
Organizer with District Lodge 1 ever had contributions made on his behalf to the Fund. The first
District Lodge Organizer, Bill Wheeler, was hired in May of 1988. He worked at District Lodge
1 for two and a half years, and he did not have any contributions made to the fund on his behalf
during that time. AR261. District Lodge 1 did not have another Organizer until plaintiff was hired
in May 2004. AR261–62. When plaintiff left the position in 2012, District Lodge 1 hired Andy
Powell, the current District Lodge Organizer. Powell does not currently have, and never had, any
contributions made on his behalf to the Fund. AR262. In 2015, pursuant to an Apprentice
Organizer program, Brent Coleman was hired by District Lodge 1 as an Apprentice Organizer. Id.
District Lodge 1 has not made any contributions on his behalf either. Id. And District Lodge 1
informed the Fund that it was “never the practice, let alone the intent” to have Organizers be
covered under the pension plan. Id.
18
The Fund also examined District Lodge 1 meeting minutes and the various motions made
at those meetings dating back to 1978. The meeting minutes from May 1999, May 2002,
September 2004, and April 2009 show that there were motions made concerning increasing
contributions for the Business Representative or Secretary, but never for the Organizer. AR268;
AR283; AR295; AR301. Those meeting minutes support the Fund’s determination that District
Lodge 1 never contributed on behalf of the Organizers, nor did it intend to. The Fund also noted
that plaintiff attended some of the meetings where the contributions to the Fund were discussed
with respect to the Business Representative position, but the minutes reflect no discussion of his
position. AR300; AR302.
Furthermore, the Fund considered that for the Business Representative and the Secretary
positions, District Lodge 1 executed and signed separate Participation Agreements. AR266;
AR271; AR279; AR285; AR292; AR297.
Plaintiff maintains that they were all the same
agreement, and it is true that the text of all the agreements is the same. See Pl.’s Reply at 5. But
in light of the individual documents executed for the Business Representative and Secretary
positions, it was logical for the Fund to infer that if District Lodge 1 intended to cover the Business
Organizer position, it would have executed another Participation Agreement for that job
classification.
And finally, the Fund examined the payroll audit records submitted by District Lodge 1.
A third-party audit company was hired by District Lodge 1 to review “whether contributions to
the Trust Fund were being made in accord accordance with the collective bargaining agreement in
19
effect and with the Trust Agreement.” AR309. The audit company found no underpayments or
overpayments. 9 AR310–11.
The Court finds that the Appeals Committee’s conclusion that District Lodge 1 did not
intend to make contributions on behalf of Organizers is supported by the administrative record by
substantial evidence and therefore must be upheld even if plaintiff’s position would also be
reasonable. See Pettaway v. Teachers Ins. & Annuity Ass’n of Am., 699 F. Supp. 2d 185, 203
(D.D.C. 2010) (finding that defendant’s determination that plaintiff was not “totally disabled” was
reasonable even if there was evidence to the contrary, because the judgment was supported by
substantial evidence), citing Hall v. Nat’l R.R. Passenger Corp., 559 F. Supp. 2d 38, 48 (D.D.C.
2008); Mobley, 405 F. Supp. 2d at 48. The record is devoid of any evidence that would support a
contrary interpretation, such as a letter of employment to an Organizer detailing his status as a
participant in the Fund or any emails or letters assuring plaintiff or any other Organizer of coverage
under the Plan. AR318. Plaintiff argues that all the documentary evidence he needed to provide
were the Participation Agreements and his own work history. Pl.’s Mem. at 9. But, as the Court
9
The Court notes that it does not find the audit records particularly convincing. Plaintiff
argues that the Participation Agreements were not reviewed by the audit company, see AR310,
and the review was limited to “looking for a mismatch between the contribution reports and the
payroll records” so if an employee was left out of the system, like plaintiff, he was not in the “audit
universe.” Pl.’s Mem. at 8–9. The Fund in response argues that the audit company’s letter
provides that it would review the provisions of the collective bargaining agreements (“CBA”) and
compare the underlying payroll record to the Fund’s contribution records. AR309. Here, District
Lodge 1 does not have a CBA, and so the auditor would have to use the Participation Agreement
to determine whether there had been any deficiencies in contributions. Fund’s Reply at 11. The
Fund further argues that an audit would be impossible without review of the Participation
Agreements. Id. at 12. While defendant’s argument is logical, there is no support for it in the
record – the audit documents submitted do not list the Participation Agreements as a document
reviewed. Nonetheless, the Court finds that there is other evidence from which the Fund
reasonably drew its conclusion.
20
already found, the Participation Agreements were ambiguous, and it was necessary to consider
extrinsic evidence to determine which job classifications were covered.
Thus, the Appeals Committee’s denial was reasonable, and the Court will grant the Fund’s
motion for summary judgement on Count I.
II.
The Court will grant the Fund’s motion for summary judgment on Count II
because plaintiff cannot bring a cause of action for breach of fiduciary duty under
§ 1132(a)(3) simply to recover benefits.
In Count II, plaintiff asserts that the Fund breached its fiduciary duties when it violated
§ 1104(a)(1)(D), which states that “a fiduciary shall discharge his duties with respect to a plan
solely in the interest of the participants and beneficiaries and in accordance with the documents
and instruments governing the plan.” Compl. ¶ 20. Plaintiff alleges that “under the terms of the
plan and the applicable Participation Agreements, defendant IAM National Pension Fund owed a
fiduciary duty to plaintiff Anthony to observe and follow the governing terms both of the Plan as
well as the participation agreements.”
Id. ¶ 19.
Plaintiff brought this count pursuant to
§ 1132(a)(1)(B) and § 1132(a)(3). 10 Id. ¶ 21.
Section 1132(a)(1)(B) states: “A civil action may be brought by a participant or beneficiary
to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future benefits under the terms of the plan.” Section 1132(a)(3)
states: “A civil action may be brought by a participant, beneficiary, or fiduciary to (A) enjoin any
act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to
obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any
provisions of this subchapter or the terms of the plan.”
10
These provisions are also the basis of plaintiff’s first count. Compl. ¶ 16.
21
In Varity Corp. v. Howe, the Supreme Court concluded that § 1132(a)(3) is a “catchall”
provision that acts “as a safety net, offering appropriate equitable relief for injuries caused by
violations that [§ 1132] does not elsewhere adequately remedy.” 516 U.S. 489, 515 (1996). The
Court explained that “where Congress elsewhere provided adequate relief for a beneficiary’s
injury, there will likely be no need for further equitable relief.” Id.
The D.C. Circuit has not decided whether a plaintiff may simultaneously pursue a claim
for denial of benefits under § 1132(a)(1)(B) and a claim for breach of fiduciary duty under
§ 1132(a)(3). However, “[c]ourts in this Circuit have generally followed the view of the majority
of circuits that a breach of fiduciary claim under § 1132(a)(3) cannot stand when a plaintiff has an
adequate remedy for her injuries under § 1132(a)(1)(B).” Zalduondo v. Aetna Life Ins. Co., 845
F. Supp. 2d 146, 155 (D.D.C. 2012); see also Clark v. Feder, Semo & Bard, P.C., 808 F. Supp. 2d
219, 226 (D.D.C. 2011) (holding that a plaintiff “may proceed only under § 1132(a)(1)(B) or
§ 1132(a)(3), not under both provisions”); Kifafi v. Hilton Hotels Ret. Plan, 616 F. Supp. 2d 7, 39
(D.D.C. 2009) (dismissing the plaintiff’s breach of fiduciary duties claim on the grounds that “a
plan participant cannot proceed with a breach of fiduciary duty claim under [§ 1132(a)(3)] when
relief is available under other remedial sections of ERISA”).
However, a plan participant may simultaneously bring claims under § 1132(a) (1)(B) and
§ 1132(a)(3) when § 1132(a)(1)(B) does not provide an adequate and complete remedy for the
participant's injuries. See England v. Marriott Int’l, 764 F. Supp. 2d 761, 780 (D. Md. 2011)
(allowing the plaintiff to pursue claims under both section 1132(a)(1)(B) and 1132(a)(3) because
the remedy sought under section 1132(a)(3) – the reformation of the terms of the benefit awards –
was not available under section 1132(a)(1)(B)).
22
Plaintiff argues that his claim is not one for benefits, but for coverage, and so the cases
above are not applicable because they involved claims for benefits. Pl.’s Mem. at 9–10. But
plaintiff cites no case law supporting this distinction, nor does he explain how this distinction is
meaningful. Plaintiff’s complaint states that he “seeks to recover wages and benefits.” Compl.
¶ 16. Additionally, plaintiff is requesting coverage so that he can “recover benefits due to him
under the terms of his plan.” 29 U.S.C. § 1132(a)(1)(B). Thus, the Court finds this distinction is
irrelevant, and the case law above is informative.
Plaintiff also argues that there is a need for injunctive relief for breach of fiduciary duty
separate from his benefits claim: “[T]he Fund needs to be enjoined from its unlawful delegation
of plan functions to the employer, and must be enjoined to ensure that the employer makes the
restorative contributions required.” Pl.’s Mem. at 10. Determination of whether equitable relief
is appropriate depends on whether “Congress elsewhere provided adequate relief for a
beneficiary’s injury.” Varity, 516 U.S. at 515.
Here, plaintiff has an avenue for adequate relief under § 1132(a)(1)(B) to recover his
benefits, because he would have been made whole if he had prevailed on his claim in Count I. His
request for injunctive relief is simply a means to obtain the same relief, and he had full opportunity
to air his concerns related to the so-called “unlawful delegation” in connection with his legal claim
in Count I. Therefore, he cannot maintain what is essentially a duplicative action for breach of
fiduciary duty against the Fund, and the Fund’s motion for summary judgment on Count II will be
granted.
III.
The Court will grant District Lodge 1’s motion for summary judgment on Count
I.
Defendant District Lodge 1 has one claim pending against it: plaintiff claims that District
Lodge 1 failed to make contributions to the Fund on Plaintiff’s behalf contrary to the Fund’s plan
23
document, and therefore District Lodge 1 breached its fiduciary obligations to plaintiff, and its
decision denying plaintiff’s eligibility to the Plan was arbitrary and capricious pursuant to
§ 1132(a)(1)(B) and § 1132(a)(3). Compl. ¶¶ 13–16. District Lodge 1 has moved for summary
judgment on this claim, arguing that it had no authority under the plan documents to determine
eligibility to participate in the Fund, and so it cannot be held liable for an eligibility determination
made by the Fund. District Lodge 1’s Mem. at 5.
Plaintiff argues that when the Fund sought input from District Lodge 1, and District Lodge
1 provided that input, District Lodge 1 exercised control over the decision and can be held liable
for it. Pl.’s Opp. to District Lodge’s Mot. [Dkt. # 37] (“Pl.’s Opp.”) at 2. But the Court has already
found that the decision denying eligibility was made solely by the Appeals Committee – not
District Lodge 1. See Section I.B supra. As another court in this district has found, “[m]ere
influence over a fiduciary’s decisions regarding a plan is not enough to constitute discretionary
control, triggering ERISA liability.” Harris v. Koenig, 602 F. Supp. 2d 39, 65 (D.D.C. 2009),
quoting Int’l Bhd. of Painters & Allied Trades Union & Indus. Pension Fund v. Duval, 925 F.
Supp. 815, 828 (D.D.C. 1996). Because District Lodge 1 made no decision, there is no basis to
find that District Lodge 1 acted arbitrarily or capriciously. See Cyr v. Reliance Standard Life Ins.
Co., 642 F.3d 1202, 1207 (9th Cir. 2011) (finding that the entity that was responsible for denying
plaintiff’s request for increased benefits was the logical defendant for an action to recover benefits
due under the terms of the plan); Larson v. United Healthcare Ins. Co., 723 F.3d 905, 916 (7th
Cir. 2013) (finding that where the insurance company decided all eligibility questions, the insurer
was a proper defendant in a suit for benefits due under § 1132(a)(1)(B)).
Furthermore, because the Court has found that the Fund acted reasonably when it
determined that plaintiff was ineligible to participate in the Fund, District Lodge 1 was never
24
required to make payments on plaintiff’s behalf. Thus, when it did not make payments under the
Participation Agreement, District Lodge 1 did not act “contrary to the documents and instruments
governing the plan” in violation of ERISA, Compl. ¶ 15, and the claim against the union fails.
CONCLUSION
For all of these reasons, the Court will grant the Fund’s motion for summary judgment and
District Lodge 1’s motion for summary judgement, and it will deny plaintiff’s cross-motion for
summary judgment.
A separate order will issue.
SO ORDERED.
AMY BERMAN JACKSON
United States District Judge
DATE: March 29, 2019
25
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