Houston et al v. Teamsters Local 210, Affiliated Health and Insurance Fund- Vacation Fringe Benefit Fund et al
Filing
64
ORDER granting 55 Motion for Summary Judgment. IT IS HEREBY ORDERED, for the reasons set forth herein, that defendants' motion is granted. Plaintiffs other than Houston failed to exhaust administrative remedies; on the interpretive question as to Houston's claim (and alternatively the other plaintiffs' claims), the Court concludes that the plan is unambiguous and the term "within" refers to a time period after the employer ceased operations. Even assuming arguendo that the plan language is ambiguous, defendants' interpretation must control because the plan grants them discretion to determine eligibility for severance pay. SO ORDERED. Ordered by Judge Joseph F. Bianco on 6/24/2014. (Lamb, Conor)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 11-cv-2417(JFB)(ARL)
_____________________
DOUGLAS HOUSTON, ET AL.,
Plaintiffs,
VERSUS
TEAMSTERS LOCAL 210, AFFILIATED HEALTH AND INSURANCE FUND – VACATION
FRINGE BENEFIT FUND, ET AL.,
Defendants.
___________________
MEMORANDUM AND ORDER
June 24, 2014
___________________
JOSEPH F. BIANCO, District Judge:
Pro se plaintiffs bring this action to
collect severance pay, which they argue is
due to them under the terms of the defendant
ERISA-regulated fund. The plan governing
the fund states that employees must have
been terminated “within one (1) year of the
date that the Employer ceased operating its
business” in order to collect severance pay.
Plaintiffs were terminated approximately
three months before their employer ceased
operations, and argue that this qualifies them
for severance pay because three months is
“within” one year of the closing.
Defendants argue that “within one year of”
refers only to the period of time after the
employer’s closing, or alternatively, that
both interpretations are rational and
defendants’ interpretation must control
because the arbitrary and capricious
standard of review applies in this case.
Defendants also argue that every plaintiff
except Houston failed
administrative remedies.
to
exhaust
As is discussed in more detail below, the
Court agrees that the plaintiffs other than
Houston failed to exhaust administrative
remedies, and thus their claims can be
dismissed on that ground alone. On the
interpretive question, as to Houston’s claim
(and, in the alternative, as to the other
plaintiffs), the Court concludes that the term
“within one (1) year of the date that the
Employer ceased operating its business”—
especially in the context of the entire
integrated plan language—unambiguously
refers to a time period after the defendant
ceased operations, not before.
Thus,
because plaintiffs were terminated three
months prior to the employer ceasing
business operations, they are not entitled to
collect severance pay under the plan. Even
assuming arguendo that the plan language
does not unambiguously support defendants’
good after just three weeks.
(Id.)
Defendants consider the effective date of
closure to have been February 28, 2009.
(Ex. A to De Rosa Decl.) Since plaintiff
Houston was terminated on December 1,
2008, defendants denied his claim for
severance pay, because he was not an active
employee at the time his employer ceased
operations.1 (Id.)
position, at a minimum, it is ambiguous and
defendants’ interpretation must control
because the plan grants them discretion to
determine eligibility for severance pay.
Under defendants’ interpretation, which they
employed consistently to other applicants (in
addition to Houston), the denial of
Houston’s benefits was not arbitrary and
capricious. Plaintiffs have not identified any
evidence that defendants’ interpretation plan
was applied inconsistently, or that any
extenuating circumstance exists, even
though the Court granted them an additional
opportunity to do so. Therefore, the Court
grants the motion for summary judgment in
its entirety.
In
subsequent
correspondence,
defendants addressed Houston’s claim that
his termination three months before his
employer finally closed brought him
“within” one year of the closure. (Ex. B to
De Rosa Decl.) Defendants made specific
reference to the terms of the Summary Plan
Description (“SPD”) which both sides
agree2 sets forth the terms governing
severance pay:
I. BACKGROUND
A. Factual Background
Where noted, the following factual
allegations from the complaint are taken as
true for the purpose of this motion.
Additionally, the Court cites facts contained
in defendants’ Statement of Material Facts
pursuant to Local Rule 56.1, and supporting
documents referenced therein. Although
plaintiffs did not file a Rule 56.1 statement,
the Court has independently reviewed the
record to ensure that there is uncontroverted
evidence to support the paragraphs
referenced in defendants’ Rule 56.1. As
discussed below, it is clear from the parties’
submissions and a review of the record that
there is no factual dispute regarding the
circumstances
surrounding
plaintiffs’
termination, nor is there a factual dispute
regarding the relevant language of the plan.
1
The record does not contain evidence of the reasons
for the denial of the other plaintiffs’ claims, because
they did not exhaust administrative remedies. As is
discussed below, defendants have submitted evidence
that Houston was the only plaintiff to exhaust
administrative remedies by seeking re-examination of
the denial of his benefits. Plaintiffs allege that
Houston exhausted on behalf of all plaintiffs, but
plaintiffs identify no evidence in support of that
claim. The correspondence in the record is addressed
to Houston only, and nothing in the plan documents
suggests that a beneficiary can exhaust administrative
remedies on behalf of anyone else.
2
Plaintiffs attached the SPD to the complaint and
rely on its language. Whether SPDs—which convey
the contents of the Plan “in a manner calculated to be
understood by the average plan participant,” 29
U.S.C. § 1022(a)—are themselves legally
enforceable plan documents has been the subject of
some debate, with the Supreme Court recently
holding that they are not automatically enforceable.
See CIGNA Corp., et al. v. Amara, -- U.S. --, 131
S.Ct. 1866, 1877-78 (2011). Even after Amara,
however, SPDs may still be incorporated into a plan
explicitly. See Eugene S. v. Horizon Blue Cross Blue
Shield of N.J., 663 F.3d 1124, 1131 (10th Cir. 2011)
(“[A]n insurer is not entitled to deferential review
merely because it claims the SPD is integrated into
Plaintiffs contend that their employment
was terminated when their employer ceased
operations in November 2008. (Compl. ¶
III.) The employer reopened in February
2009 at reduced staffing levels, but did not
employ any of the plaintiffs, and closed for
2
B. Procedural Background
When is it Payable? Termination
Vacation Pay is payable when a
Contributing Employer goes out of
business, liquidates its assets or
moves out of the area resulting in
the permanent layoff of all its
employees . . . . Who is Eligible?
Any active employee of a
Contributing Employer who had at
least one (1) year of continuous
service
prior
to
permanent
termination of employment and
who was permanently terminated
within one (1) year of the date that
the Employer ceased operating its
business.
Plaintiffs filed the complaint in this
action on May 18, 2011. After litigating a
default-judgment motion and engaging in
discovery, defendants moved for summary
judgment on October 15, 2013.
On
November 18, 2013, plaintiffs filed a letter
opposing the motion, arguing that the
parties’ conflicting interpretations of the
SPD created a genuine issue of material fact
precluding summary judgment. Defendants
replied in further support of their motion on
December 11, 2013.
On April 8, 2014, the Court issued an
order directing defendants to serve and file
the “Notice to Pro Se Litigant Who Opposes
a Motion for Summary Judgment,” which
defendants had not previously served on
plaintiffs, but which is required by Local
Civil Rule 56.2.
The Court afforded
plaintiffs an additional opportunity to submit
an opposition to defendants’ motion after
receiving the Pro Se Notice, in light of the
fact that their first opposition, filed before
receiving the Pro Se Notice, did not include
a statement of material facts, nor did it
identify any material facts or evidence, other
than references to plan documents and dates.
(Id. (quoting SPD at 8); Def. 56.1 ¶ 1.)
Defendants’ letter to Houston asserted
that they had “consistently interpreted these
provisions to require eligible employees to
be active employees on the date the
employer ceased operating its business.”
(Id.) The letter suggests that, in addition to
employees terminated on the date of the
employer’s closure, “employees who may be
retained . . . to wind up the employer’s
affairs are also eligible to receive severance
pay,” which is consistent with defendants’
interpretation of “within” as referring only
to the time period after the employer ceases
operations. (Id.)
Defendants served plaintiffs with the Pro
Se Notice and the text of Rule 56 on April 9,
2014. On May 29, 2014, plaintiffs filed an
Affirmation in Opposition to Defendant’s
Motion, but the affirmation contains no new
factual allegations, except the allegation
(discussed infra) that plaintiff Houston
exhausted administrate remedies on behalf
of all plaintiffs.
the Plan. Rather, the insurer must demonstrate that
the SPD is part of the Plan, for example, by the SPD
clearly stating on its face that it is part of the Plan.”).
Here, neither party contends that the SPD is not an
enforceable document, and the SPD states on its face
that it contains plan terms. (See SPD at 13 (“This
Summary Plan Description includes information
concerning the circumstances may result in . . .
ineligibility . . . . [T]he foregoing terms of this Plan
Description booklet . . . detail the eligibility rules,
qualification rules, benefits, limitations and
exclusions from coverage.).) Therefore, the Court
will enforce the terms of the SPD.
II. STANDARD OF REVIEW
The standards for summary judgment are
well settled. Pursuant to Federal Rule of
Civil Procedure 56(a), a court may only
3
grant a motion for summary judgment 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 moving
party bears the burden of showing that he or
she is entitled to summary judgment.
Huminski v. Corsones, 396 F.3d 53, 69 (2d
Cir. 2005). “A party asserting that a fact
cannot be or is genuinely disputed must
support the assertion by: (A) citing to
particular parts of materials in the record,
including
depositions,
documents,
electronically stored information, affidavits
or declarations, stipulations (including those
made for purposes of the motion only),
admissions, interrogatory answers, or other
materials; or (B) showing that the materials
cited do not establish the absence or
presence of a genuine dispute, or that an
adverse party cannot produce admissible
evidence to support the fact.” Fed. R. Civ.
P. 56(c)(1). The court “is not to weigh the
evidence but is instead required to view the
evidence in the light most favorable to the
party opposing summary judgment, to draw
all reasonable inferences in favor of that
party,
and
to
eschew
credibility
assessments.” Amnesty Am. v. Town of W.
Hartford, 361 F.3d 113, 122 (2d Cir. 2004)
(quoting Weyant v. Okst, 101 F.3d 845, 854
(2d Cir. 1996)); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)
(summary judgment is unwarranted if “the
evidence is such that a reasonable jury could
return a verdict for the nonmoving party”).
Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986)). As the
Supreme Court stated in Anderson, “[i]f the
evidence is merely colorable, or is not
significantly probative, summary judgment
may be granted.” Anderson, 477 U.S. at
249-50 (citations omitted). Indeed, “the
mere existence of some alleged factual
dispute between the parties” alone will not
defeat a properly supported motion for
summary judgment. Id. at 247-48 (emphasis
in original). Thus, the nonmoving party
may not rest upon mere conclusory
allegations or denials but must set forth
“‘concrete particulars’” showing that a trial
is needed. R.G. Grp., Inc. v. Horn &
Hardart Co., 751 F.2d 69, 77 (2d Cir. 1984)
(quoting SEC v. Research Automation
Corp., 585 F.2d 31, 33 (2d Cir. 1978)).
Accordingly, it is insufficient for a party
opposing summary judgment “merely to
assert a conclusion without supplying
supporting arguments or facts.” BellSouth
Telecomms., Inc. v. W.R. Grace & Co., 77
F.3d 603, 615 (2d Cir. 1996) (quoting
Research Automation Corp., 585 F.2d at
33).
When considering a dispositive motion
made by or against a pro se litigant, the
Court is “mindful that a pro se party’s
pleadings must be ‘liberally construed’ in
favor of that party and are held to ‘less
stringent standards than formal pleadings
drafted by lawyers.’” Hughes v. Rowe, 449
U.S. 5, 9 (1980) (quoting Haines v. Kerner,
404 U.S. 519, 520 (1972)). The Second
Circuit “liberally construe[s] pleadings and
briefs submitted by pro se litigants, reading
such submissions to raise the strongest
arguments they suggest.” Bertin v. United
States, 478 F.3d 489, 491 (2d Cir. 2007)
(internal quotation marks and citations
omitted). Nonetheless, “[p]roceeding pro se
does not otherwise relieve a litigant of the
usual requirements of summary judgment,
Once the moving party has met its
burden, the opposing party “must do more
than simply show that there is some
metaphysical doubt as to the material
facts. . . . [T]he nonmoving party must come
forward with specific facts showing that
there is a genuine issue for trial.” Caldarola
v. Calabrese, 298 F.3d 156, 160 (2d Cir.
2002) (emphasis in original) (quoting
4
nonadversarial method of claims
settlement; and to minimize the
costs of claims settlement for all
concerned.
and a pro se party’s bald assertions
unsupported by evidence, are insufficient to
overcome a motion for summary judgment.”
Rodriguez v. Hahn, 209 F. Supp. 2d 344,
348 (S.D.N.Y. 2002) (internal quotation
marks and citation omitted).
Kirkendall, 707 F.3d at 179.
Because the statute does not establish a
procedure for exhausting administrative
remedies, “exhaustion in the context of
ERISA requires only those administrative
appeals provided for in the relevant plan or
policy.” Kennedy v. Empire Blue Cross &
Blue Shield, 989 F.2d 588, 594 (2d Cir.
1993). Here, the relevant plan or policy—
the SPD—instructs beneficiaries that:
III. DISCUSSION
First, the Court considers whether
plaintiffs other than Houston have exhausted
administrative remedies.
Next, the
discussion turns to the interpretive question
presented by Houston’s claim—namely,
whether he was terminated “within” one
year of his employer’s closure under the
language of the plan.
If you disagree with the reason for
denial, you may have your claim
re-examined provided your written
request is received by the Fund
Office within sixty (60) days
following the date of the original
notice of rejection . . . . After reexamination, if it is found that
denial or reimbursement is again
affirmed and you wish to question
the determination, you may, within
thirty (30) days following the
second notice of denial, forward a
written request to the Fund Office
for a hearing before an Impartial
Referee.
A. Exhaustion
Although “ERISA itself does not contain
an exhaustion requirement,” Kirkendall v.
Halliburton, Inc., 707 F.3d 173, 179 (2d Cir.
2013), the Second Circuit has long
recognized “the firmly established federal
policy favoring exhaustion of administrative
remedies in ERISA cases.” Alfarone v.
Bernie Wolff Const. Corp., 788 F.2d 76, 79
(2d Cir. 1986). The Circuit has noted
several important purposes served by
requiring exhaustion in ERISA cases:
to uphold Congress’ desire that
ERISA trustees be responsible for
their actions, not the federal courts;
to provide a sufficiently clear
record of administrative action if
litigation should ensue; to assure
that any judicial review of fiduciary
action (or inaction) is made under
the arbitrary and capricious
standard, not de novo; to help
reduce the number of frivolous
lawsuits under ERISA; to promote
the consistent treatment of claims
for benefits; to provide a
(SPD at 10-11).
Although the appeal right includes the
word “may,” such language nonetheless
imposes a duty on beneficiaries to exhaust
administrative remedies. See Greigenberger
v. Hartford Life Ins. Co., 131 Fed. App’x
756, 758 (2d Cir. 2005) (“[T]he inclusion of
the term ‘may’ in Hartford’s policy cannot
excuse Greifenberger from the duty to
exhaust administrative review before filing
suit under ERISA.”); accord Kennedy, 989
5
F.2d at 594 (“Were OPM review optional,
the usefulness of this right of OPM to bind
carriers would be diminished as a tool for
carrying out Congress’ intent to protect and
benefit FEHBP participants and their
beneficiaries.”).
B. Interpretation of the SPD
The parties appear to agree that the
central question presented by Houston’s
claim (as well as the other plaintiffs) is the
meaning of the word “within” as it appears
in the SPD. The SPD states that an
employee is eligible for benefits:
Thus, the SPD imposes a duty to exhaust
administrative remedies by requesting reexamination of the denial of benefits, and by
requesting a subsequent hearing if
necessary.
Defendants have offered
evidence that no plaintiff other than Houston
met this obligation (De Rosa Decl. ¶ 6), and
plaintiffs have only disputed that assertion
by alleging that plaintiff Houston exhausted
administrative remedies on behalf of all
plaintiffs. However, plaintiffs identified no
evidence showing that Houston did, or was
authorized to, act on their behalf. The
correspondence submitted by defendants is
addressed to Houston only and discusses
only his claim. (Id.) Moreover, the SPD
language quoted above does not suggest that
a beneficiary may exhaust administrative
remedies on another’s behalf; in fact, its
language suggests the opposite, and
plaintiffs have identified no evidence that
collective exhaustion was permissible as a
matter of practice. Therefore, defendants
have shown the absence of a genuine issue
of material fact concerning exhaustion, and
the Court grants the motion for summary
judgment on this ground with respect to all
plaintiffs except Houston.3
who had at least one (1) year of
continuous service prior to
permanent
termination
of
employment
and
who
was
permanently terminated within one
(1) year of the date that the
Employer ceased operating its
business.
(SPD at 8 (emphasis added).)
The Court agrees with defendants that
the meaning of the word “within” is
unambiguous as used in the paragraph
quoted above, especially when considered in
“the context of the entire integrated
agreement.” Gibbs v. CIGNA Corp., 440
F.3d 571, 579 (2d Cir. 2006). As a
threshold matter, when the term “within” is
followed by a designation of some period of
time, and then the word “of” followed by
some event—such as “the notice of claim
was filed within four days of the accident”
or “he was married within two years of his
20th birthday” or “the player was traded
within one week of winning the
championship”—the period of time is
commonly understood to begin on the date
of the event and is then measured moving
forward in time (not backward). In other
words, the preposition “of” makes that event
the start of the relevant period, not the end
point. In fact, courts routinely use such
phrasing in all types of contexts, always in
reference to a prospective time period. See,
e.g., Wilson v. Nw. Mutual Ins. Co., 625
F.3d 54, 60 n.1 (2d Cir. 2010) (“However,
3
There is an exception to ERISA exhaustion if a
party makes a “clear and positive showing” that
exhaustion would have been futile. Kennedy, 989
F.2d at 594. Plaintiffs have not attempted to make
any showing on this question, but even assuming they
did, their claims would fail for the same reason as
Houston’s—namely, defendants’ interpretation of
the SPD is not arbitrary or capricious.
6
employee both before the end of operations
(namely, “had at least one year of
continuous service prior to permanent
termination of employment”) and after the
end of operations (namely, “within one year
of the date that the Employer ceased
operating its business”). The purpose of
these requirements is clear—that is, to (1)
ensure that, to be eligible for severance, the
active employee had been with the company
a minimum of one year prior to being
terminated because the employer ceased
operations, and (2) ensure that, if the
employee kept working after operations
ceased, in order to wind up affairs (for up to
one year), he or she would still receive the
severance.
the cancellation at issue here could be
completed immediately and within one year
of the agreement to cancel, and therefore §
5-701(a)(1) is inapplicable.”) (emphasis
added); Ramadan v. Gonzales, 479 F.3d
646, 649 (9th Cir. 2007) (“Ramadan
conceded that she failed to file her asylum
application within one year of entry into the
United States, as is required under 8 U.S.C.
§ 1158(a)(2)(B).”) (emphasis added); In re
Pratt, 411 F.3d 561, 565 (5th Cir. 2005)
(“To establish that discharge should be
denied under § 727(a)(2)(A), a creditor must
show four elements: (1) a transfer [or
concealment] or property; (2) belonging to
the debtor; (3) within one year of the filing
of the petition; [and] (4) with intent to
hinder, delay, or defraud a creditor or officer
of the estate.” (emphasis added) (citations
and internal quotation marks omitted));
White v. Metro. Gov’t of Nashville, No.
3:11-cv-0607, 2013 WL 269042, at *5
(M.D. Tenn. Jan. 24, 2013) (“Tenn. Code
Ann. §§ 4-21-101 et seq., permits plaintiffs
to file discrimination claims either by (1)
filing an administrative complaint with the
Tennessee Human Rights Commission
(“THRC”) or (2) by filing suit directly and
then filing a complaint with the THRC
within one year of the alleged
discriminatory action.”) (emphasis added);
Myers v. Cigna Prop. & Cas. Ins. Co., 953
F. Supp. 551, 556 (S.D.N.Y. 1997) (“Myers,
therefore, must have brought suit within one
year of the date Cigna’s liability accrued.”)
(emphasis added).
To read the second requirement to mean
that the employee had to be terminated
within one year before the employer ceased
operating its business would be completely
inconsistent not only with the overall
purpose of the severance (as described in the
SPD), but also with the other plain language
in the plan provision. First, in describing
“[w]hen it is payable,” the plan language
makes clear that severance pay is designed
to compensate active employees (meeting
certain criteria) who are with the company at
the time the Company ceases business
operations, not those (like plaintiffs) who
left the company some time earlier. See
SPD at 8. (“When is it Payable?
Termination Vacation Pay is payable when a
Contributing Employer goes out of business,
liquidates its assets or moves out of the area
resulting in the permanent layoff of all its
employees.”). In fact, the section regarding
“[w]ho is eligible” confirms that it does not
apply to employees who left the business
prior to the cessation of operations because
it refers to “[a]ny active employee of a
Contributing Employer.”
Id. (emphasis
added). Thus, the term “active employee”
further demonstrates that former employees,
The unambiguous meaning of this
language is not only apparent on its face, but
is confirmed when the language is examined
in the context of the integrated plan
agreement. In particular, the provision
addresses severance pay for “active
employees” once the business ceases
operation and, in doing so, explicitly creates
a temporal requirement for the active
7
common sense.4
In sum, the Court
concludes that language at issue, especially
in the context of the integrated plan
language,
unambiguously
supports
defendant’s interpretation.
like plaintiffs, are not eligible. In addition,
the eligibility requirements use the term
“prior” to refer to the requirement of one
year of continuous service before
termination, thus suggesting that the use of a
different term—“within”—in the same
sentence for the second one-year
requirement refers to being terminated in the
one-year period after the date of the closing
of the business, rather than the one-year
period before ceasing operations. Such a
reading of the plain language of the plan, in
context, would be consistent with the clear
purpose of the severance which, as noted
above, is to compensate employees who are
with the company at the time it ceases
operations.
In any event, even assuming arguendo
that the language was ambiguous, the Court
concludes that the defendants still prevail as
a matter of law. Plaintiffs appear to contend
that, if there is an ambiguity, the Court must
construe it against defendants, the drafters.
Although courts in the Second Circuit have
applied that rule in ERISA cases, they have
done so when performing de novo review.
See Pagan v. NYNEX Pension Plan, 52 F.3d
438, 443 (2d Cir. 1995). When performing
“the highly deferential arbitrary and
capricious standard of review . . . the rule of
contra proferentum is inapplicable.” Id. at
443-44.
In contrast, plaintiff’s interpretation is
irrational not only because it contradicts the
language and purpose of the provision, but
also would lead to utterly absurd results.
For example, under plaintiff’s interpretation
of “terminated within one year” of the
cessation of operations, an employee
terminated 11 months before the company
ceased operations (and for reasons
completely unrelated to the cessation of
operations, such as misconduct) would still
be entitled to severance, while a 20-year
employee who was with the company on the
day it ceased operations and was asked to
stay on and work for one additional month
to wind up the employer’s affairs, would not
be eligible for severance. In other words,
employees who lost the job in the year prior
to the end of business operations for reasons
unrelated to the closure would be eligible for
benefits, while workers terminated precisely
because of the closure, but who worked for
some period beyond the closure, would not.
Such a tortured reading of that language
defies the integrated plan language and
Thus, the Court must determine which
standard of review governs this case. A
denial of benefits under ERISA “‘is to be
reviewed under a de novo standard unless
the benefit plan gives the administrator or
fiduciary
discretionary
authority
to
determine eligibility for benefits or to
construe the terms of the plan.’” Krauss v.
Oxford Health Plans, Inc., 517 F.3d 614,
622 (2d Cir. 2008) (quoting Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989)). “If the insurer establishes that it has
such discretion, the benefits decision is
reviewed under [an] arbitrary and capricious
4
Although pro se plaintiffs argued that “within”
referred only to the period of time before the ceasing
of operations, even if they argued that it referred to
either before or after, that interpretation would
produce the same absurd result: employees fired for
reasons unrelated to the closure would receive
severance pay simply because the closure happened
to occur less than one year after their termination.
Neither common sense nor the language of the plan
supports that interpretation.
8
defendants,5 but courts considering similar
language have held that it does. See Pagan,
52 F.3d at 441 (“[S]hall determine
conclusively for all parties all questions
arising in the administration of the . . . Plan
and any decision . . . shall not be subject to
further review.”); Zarringhalam v. United
Food & Comm. Workers Int’l Union Local
1500 Welfare Fund, 906 F. Supp. 2d 140,
156-57 (E.D.N.Y. 2012) (“[C]omplete
discretionary authority to interpret and
construe”); Suarato v. Bldg. Servs. 32BJ
Pension Fund, 554 F. Supp. 2d 399, 417
(S.D.N.Y. 2008) (“To decide, in the
Trustee’s sole discretion, all questions . . .
relating to the eligibility or rights of
Participants . . . . [and] [t]o interpret, in the
Trustees’ sole discretion, all terms . . . in the
Plan.”).
standard.” Krauss, 517 F.3d at 622; see also
Celardo v. GNY Auto. Dealers Health &
Welfare Trust, 318 F.3d 142, 145 (2d Cir.
2003) (“The Supreme Court . . . has
indicated that plans investing the
administrator with broad discretionary
authority to determine eligibility are
reviewed under the arbitrary and capricious
standard.”).
Here, the language of the SPD grants
discretionary authority to defendants. In
particular, it states that:
The
Trustees,
solely
and
exclusively, and as their best
judgment determines, shall . . .
carry out a plan and program of
benefits . . . including provisions
and definitions relating to coverage
and eligibility, and any and all
matters which the Trustees may
deem
appropriate
for
the
determination of benefits and
administration of the plan and
program herein contemplated . . .
[and] no provision herein set forth
shall be deemed nor constructed to
restrain or limit the Trustees in any
respects . . . and all of the basis and
details of such plan and program
shall . . . be those as set forth from
time to time by the Trustees as
their judgment and discretion shall
determine . . . . The Trustees shall
interpret
and
construe
the
provisions of Indenture and terms
used herein, and such construction
as adopted and announced by the
Trustees shall be deemed the
proper construction.
Accordingly, the Court will apply the
arbitrary and capricious standard of review.
Under that standard, “[w]here both the
trustees of a pension fund and a rejected
applicant offer rational, though conflicting,
interpretations of plan provisions, the
trustees’ interpretation must be allowed to
control.” Miles v. N.Y. State Teamsters
Conf. Pension & Ret. Fund Emp. Pension
5
Plaintiffs’ primary argument does not address the
distinction between de novo and arbitrary and
capricious review—plaintiffs simply argue that the
textual ambiguity creates an issue for trial. However,
because the Court concludes that arbitrary and
capricious review applies, it may “overturn a decision
to deny benefits only if it was without reason,
unsupported by substantial evidence or erroneous as a
matter of law.” Pagan, 52 F.3d at 442. Defendants
have produced evidence that their decision was
consistent with their general practice and the text of
the SPD, and plaintiffs have identified no evidence to
the contrary, even after the Court gave them a second
chance to respond to defendants’ motion.
Accordingly, the Court concludes that, even if
“within” was ambiguous, such ambiguity does not
create a genuine issue for trial because there is no
evidence to support a finding that defendants’
interpretation was arbitrary and capricious.
(SPD at 12-13 (emphasis added).)
Plaintiffs did not address whether this
language confers discretionary authority to
9
IV. CONCLUSION
Ben. Plan, 698 F.2d 593, 601 (2d Cir. 1983);
see also Zarringhalam, 906 F. Supp. 2d at
156.
For the reasons set forth above, the
Court grants summary judgment for the
defendants on all claims. The Clerk of the
Court shall enter judgment accordingly and
close the case.
Here, as discussed above, defendants
argue that “within” refers to a period of time
after the event to which it refers: they cite
the example of someone who “made several
friends within days of moving” into a new
home. (Def. Repl. at 4.) Although the
Court concludes that the language
unambiguously
supports
defendants’
position in the context of the integrated plan
language, the Court also concludes, in the
alternative,
that
the
defendants’
interpretation of “within” is, at a minimum,
rational. Plaintiffs have presented no
evidence to contest defendants’ assertion
that they consistently interpreted the SPD in
this manner, even after the Court provided
them a second chance to do so, and the SPD
language supports defendants’ interpretation
as rational. (See SPD at 8 (“Termination
Vacation Pay is payable when a
Contributing Employer goes out of
business.”).)
Therefore, even if the
language were deemed to be ambiguous,
defendants’ interpretation must control.
Under that interpretation, the denial of
Houston’s benefits (as well as that of the
other plaintiffs) was neither arbitrary nor
capricious, and there is no legal basis to
disturb defendants’ decision.
SO ORDERED.
______________________
JOSEPH F. BIANCO
United States District Judge
Dated: June 24, 2014
Central Islip, NY
***
Plaintiffs are pro se.
Defendants are
represented by Thomas Albert Thompson,
66 Main Street, Suite 802, Yonkers, NY
10701, and Roland Acevedo, Seiff, Kretz, &
Abercrombie, 444 Madison Avenue, New
York, NY 10022.
10
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