Brightman v. 1199 SEIU Health Care Employees Pension Fund et al
Filing
63
OPINION AND ORDER. For the foregoing reasons, Defendant's motion for summary judgment is GRANTED and Plaintiff's motion for summary judgment is DENIED. Plaintiff's counsel's request for fees is DENIED. The Clerk of Court is respec tfully directed to close the case. SO ORDERED. re: 53 SECOND MOTION for Summary Judgment filed by Victoria I. Brightman. 55 SECOND MOTION for Summary Judgment and In Opposition to Plaintiffs Second Motion for Summary Judgment filed by 1199 SEIU Retirement Committee, 1199 SEIU Health Care Employees Pension Fund. (Signed by Judge Lewis J. Liman on 3/2/2021) (rjm) Transmission to Orders and Judgments Clerk for processing.
Case 1:18-cv-04932-LJL Document 63 Filed 03/02/21 Page 1 of 37
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
VICTORIA I. BRIGHTMAN,
:
:
Plaintiff,
:
:
-v:
:
1199SEIU HEALTH CARE EMPLOYEES PENSION
:
FUND and 1199SEIU RETIREMENT COMMITTEE,
:
:
Defendants.
:
:
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3/2/2021
18-cv-4932 (LJL)
OPINION AND ORDER
LEWIS J. LIMAN, United States District Judge:
Victoria Brightman (“Brightman” or “Plaintiff”) moves for summary judgment for a
second time. Defendants 1199SEIU Health Care Employees Pension Fund (the “Fund” or the
“Plan”) and 1199SEIU Retirement Committee (the “Retirement Committee” or the
“Committee”) (collectively “Defendants”) have made a cross motion for summary judgment in
their favor. For the following reasons, Brightman’s motion is DENIED and Defendants’ motion
is GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
A.
Plaintiff’s Career
Brightman was employed as a physician’s assistant (“PA”) on Riker’s Island from 1993
to 2014. During this period, she was employed through several different hospitals that
contracted with New York City to provide medical services on Rikers Island. Dkt. No. 23 ¶ 1.
From 1993 to 1994, Brightman was employed by Bronx Lebanon Hospital. Id. ¶ 2. From 1993
to 1997, Brightman was employed by St. Vincent’s Medical Center. Id. ¶ 3.
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From 1998 until 2000, Brightman was employed by St. Barnabas Hospital. Dkt. No. 58 ¶
4. From 2001 to 2014, she was employed through Corizon Health (“Corizon”) after Corizon
took over the contract for the provision of health care services at Rikers Island. Id.
B.
The 1199 SEIU Health Care Employees Pension Fund
During the period of her employment with Corizon, Brightman participated in the
1199SEIU Health Care Employees Pension Fund, an employee pension benefit program
governed by the Employee Retirement Income Security Act (“ERISA”). The Fund is a multiemployer trust funded with contributions from Contributing Employers pursuant to various
collective bargaining agreements between 1199SEIU United Health Care Workers East members
and healthcare employees. Dkt. No. 59 at 3. Plaintiff’s claims concern the Fund’s calculation of
benefits and notice of suspension of benefits. The provisions of the Plan relevant here are as
follows:
1.
Calculation of Benefits
Under the Plan, pension benefits are calculated according to the following formula: onetwelfth of 1.85% of Average Final Pay (“AFP”),1 multiplied by Credited Future Service, plus
1.5% of Past Service Pay multiplied by Credited Past Service. Dkt. No. 21, Ex. Q § 5.2(b).
“‘Average Final Pay’ means for each Participant, the highest average Regular Pay during
five (5) consecutive Plan Years of employment after his Applicable Effective Date and within his
last ten (10) Plan Years of Credited Future Service.” Id. § 1.6.
“‘Regular Pay’ means for each Participant, his total pay in a Plan Year . . . during periods
for which his Contributing Employer is required to make Contributions, excluding overtime, on-
1
The parties in their briefing, as well as the Committee on remand, sometimes use the term Final
Average Pay (“FAP”) for the same concept. The Court will use “AFP,” as do the terms of the
Plan.
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call pay, commissions, bonuses and gratuities, and expense allowances.” Id. § 1.29. “For
periods for which the Fund office is unable to obtain actual pay information, Regular Pay shall
be calculated utilizing industry standards through a methodology approved by the Retirement
Committee.” Id.
“Credited Future Service . . . means, for each Participant, his total service on and after his
Applicable Effective Date, credited at the rate of one (1) month for each month for which
Contributions are required to be made to the Fund by reason of the Participant’s employment.”
Id. § 3.2(a). “Credited Past Service . . . means for each Participant his total service prior to his
Applicable Effective Date with all Contributing Employers.” Id. § 3.2(b). “‘Applicable
Effective Date’ means, for each Participant, the date a Contributing Employer became obligated
to make Contributions to the Trust Fund for members of the bargaining unit in which the
Participant was employed when he first became a Participant.” Id. § 1.2.
2.
Disqualifying Employment and Suspension of Benefits
Under the terms of the Plan, after a Participant begins receiving pension benefits, she
may continue to receive them if she becomes “actively employed,” with the following exception:
[N]o pension benefit payment shall be made or continue to be made to a Pensioner
who is actively employed in full or part-time employment for more than 40 hours
per month:
(a) in the healthcare or human service industry or a related industry
(including, but not limited to, hospitals, nursing and convalescent homes,
drugstores, laboratories, medical schools, and universities), and
(b) utilizing skills applicable to his previous employment in the healthcare
or human service or related industry, and
(c) in an Area covered by the Plan and within the meaning of “Section
202(a)(3)(B) Service” pursuant to Department of Labor Regulations 29
C.F.R. § 2530.203-3(c)(2).
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Id. § 11.7. Such employment is termed “Disqualifying Employment.” The Plan is entitled to
suspend the benefits of any Plan Participant who engages in Disqualifying Employment. Once a
Participant’s benefits have been suspended, she will receive no further benefits until she
reapplies to the Fund for her pension benefits.
If the Plan intends to suspend a Participant’s benefits for engaging in Disqualifying
Employment, the Plan is required to provide notice:
A Pensioner whose benefits are suspended as described above and a Participant
who continues to work for a Contributing Employer beyond Normal Retirement
Date shall receive (to the extent required under ERISA) a notice that includes the
information and complies with Department of Labor Regulations 29 C.F.R. §
2530.203-3(b)(4). Such notice shall be delivered by first class mail or personal
delivery not later than the end of the first calendar month during which benefit
payments are suspended.
Id. The cited regulations, in turn, state what should be included in the suspension notice:
Such notification shall contain a description of the specific reasons why benefit
payments are being suspended, a general description of the plan provisions relating
to the suspension of payments, a copy of such provisions, and a statement to the
effect that applicable Department of Labor regulations may be found in § 2530.2033 of the Code of Federal Regulations. In addition, the suspension notification shall
inform the employee of the plan’s procedure for affording a review of the
suspension of benefits.
29 C.F.R. § 2530.203-3(b)(4).
In order to regain pension benefits after a suspension, a Participant must reapply to the
Fund.
3.
Appeal Rights
The Plan grants the Plan Administrator and Trustees discretionary authority to interpret
the Plan and related Plan documents:
Notwithstanding any other provision in the Plan and to the full extent permitted
by ERISA and the Internal Revenue Code, the Plan Administrator shall have the
exclusive right, power and authority, in its sole and absolute discretion:
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To administer, apply, construe and interpret the Plan and any related Plan
documents
To decide all matters arising in connection with entitlement to benefits, the
nature, type, form, amount and duration of benefits, and the operation or
administration of the Plan; and
To make all factual determinations required to administer, apply, construe
and interpret the Plan (and all related Plan documents).
Dkt. No. 21, Ex. Q § IX.G
If a Participant’s claim is denied or the Participant believes that her pension amount is not
correct, she has the right under the Plan to appeal to the Retirement Committee. Id. § IX.B. In
order to appeal, a Participant must file a written request with the Plan Administrator no later than
60 days after receiving notice of adverse benefit determination. Id. The Plan requires that the
“decision of the Retirement Committee will be made in writing and will include an explanation
of the decision and the specific reference to any Plan provisions on which the decision is based.”
Id. The decisions of the Committee are “final, binding, and conclusive on all parties,” subject
only to the Participant’s right under ERISA to sue in federal court. Id.
C.
Plaintiff’s Disability and Pension Payments from November 2014 to October
2016
Brightman left Corizon on May 5, 2014 after becoming physically disabled. Dkt. No. 23
¶ 14. Her disability required her to use a wheelchair. Id. Due to her disability, Brightman was
unable to work at all from May 5, 2014 to May 16, 2016. Id. ¶ 15.
Around March 1, 2015, the Fund sent Brightman an “approaching 65 letter.” Dkt. No.
60-6 ¶ 6. The letter contained information for employees who continue to work beyond normal
retirement age (“NRA”). Id. It informed Plan Participants who continued to work past 65 that
they would not receive their benefits until they retired, and that the Plan would suspend the
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benefits of a Plan beneficiary who returned to work in the same field after beginning to receive
pension benefits. Id. The letter also stated: “If after you start to collect your pension and choose
to return to Covered Employment or Disqualifying Employment, you must notify the Pension
Fund with [sic] 30 days of the start date of your employment.” Id.
Brightman turned 65, thus attaining NRA, on April 1, 2015. Id. In November 2015,
Brightman applied for her pension and for disability benefits. She requested benefits
retroactively to May 2014, the date she had stopped working at Corizon. Dkt. No. 23 ¶ 17.
Under the terms of the Plan, Plaintiff’s eligibility for disability pension benefits began on the
effective date of her Social Security disability payments, which was November 2014. Dkt. No.
50 at 298. She was paid a disability pension for the period from December 2014 to April 2015,
and a retroactive NRA pension from April through December 2015. Dkt. No. 60-6 ¶ 7. The
Fund sent her another letter in December 2015 which included additional information about the
pension and repeated the admonition to contact the Fund if she resumed work. Id.
D.
Plaintiff Returns to Employment and Termination of Benefits
While collecting her pension, around May 2016 Brightman returned to work with her
same job title of Physician Assistant at the Manhattan House of Detention, through the current
healthcare provider and Contributing Employer, Physician Affiliate Group of New York
(“PAGNY”). Dkt. No. 60-6 ¶ 10. Brightman did not inform the Fund that she had returned to
work. Id.
In September 2016, after learning of Brightman’s employment with PAGNY through
PAGNY’s contribution reports and determining that her employment constituted Disqualifying
Employment under the Plan’s terms, the Fund sent her a “40 hour” warning letter, informing her
that her benefits would soon be suspended because she had resumed work. Id. at 130. Around
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September 24, 2016, the Fund sent Plaintiff a copy of the Plan and the Plan’s Summary Plan
Description (“SPD”). Id. In October 2016, the Fund sent Brightman a letter notifying her that
her benefits were suspended as of October 31, 2016, because she had continued to work. Id. at
132-33. The letter directed her to call the Retirement Center if she wished to challenge the
Fund’s determination. Id. at 133.
Plaintiff only worked intermittently for PAGNY due to physical problems resulting from
her injury. Plaintiff did not work at all from December 2017 to June 2018. Afterwards, she
worked intermittently until she was terminated in August 2019 while on medical leave under the
Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. Dkt. No. 53-1. at ¶ 10-11.
E.
Brightman’s Challenge
In February 2016, soon after beginning to receive her benefits, Brightman questioned the
Fund’s calculation of her monthly pension benefit, which was initially set at $1,861.00. She
formally appealed the calculation pursuant to the Plan’s administrative procedures in August
2016, disputing the Fund’s determination of her past and future service credits (specifically, she
argued that she should get past service credits for her St. Vincent’s employment from 1993 to
1997 and that her St. Barnabas employment should be future credited service, rather than past
service credits). Id. at 287-290. She did not dispute the Fund’s estimates of her annual pay. The
Fund upheld its determination in a letter dated April 25, 2016, which included a description of
how to appeal the denial to the Retirement Committee. Id. at 283-86.
Sometime after April 2016, Brightman retained counsel to represent her in the dispute.
Brightman’s counsel requested information from the Fund about the Industry Standard method
the Fund used to calculate base pay for years in which that information was not available for a
particular Participant. The Fund responded that its method was to take the wage rate for a year
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the Fund had a record of the Participant’s actual pay, and then to back out or add the annual
increases in the Industry/League CBA. In accordance with this method, the Fund had used the
wage rate on the lone paystub Brightman had submitted with her pension application, which was
for the year 2013. Brightman contended that the Fund should use information from Brightman’s
W-2s to establish her actual pay; the Fund responded that W-2s cannot be used to calculate
Regular Pay, because they do not separate out overtime wages, which are not included in the
calculation of Regular Pay. Dkt. No. 59 at 6.
On February 2, 2017, Plaintiff’s counsel sent a letter to the Fund, demanding that the
Fund lift the suspension of Plaintiff’s benefits, pay her benefits for the months of November
through February 2017, and continue to pay her benefits thereafter. Dkt. No. 50 at 60-62. The
letter also demanded that (1) Plaintiff be credited with service for her employment with St.
Vincent’s from 1993 to 1997; and that (2) the Fund recalculate Brightman’s AFP using
information obtained from Corizon, the Social Security Administration, and Plaintiff’s own
records.
On April 6, 2017, the Fund attempted to get Brightman’s pay information from Corizon.
Corizon returned an income verification questionnaire with Brightman’s annual wages, but it did
not make clear whether the amount included overtime wages or not. Dkt. No. 59 at 6-7.
However, because the amount Corizon reported for the year 2013 matched the amount on
Plaintiff’s 2013 paystub including overtime, the Fund suspected that the wages reported by
Corizon were also inclusive of overtime. Because it could not get any additional information
from Corizon, the Fund continued to use the Industry Standard calculation for all years of
Brightman’s employment excepting 2013. Dkt. No. 59 at 7.
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On April 19, 2017, the Fund responded to Plaintiff’s counsel. The Fund denied all of
Brightman’s demands, explaining that: (1) Plaintiff’s work with PAGNY for more than forty
hours per month disqualified her from receiving any pension benefits, starting when she was
employed with PAGNY; (2) the Fund had sent Plaintiff a suspension notice warning letter
explaining this rule on September 2, 2016, as well as a notice of suspension in October 2016; (3)
Plaintiff received disability benefits through November 2014 and, therefore, was not eligible for
Pension benefits during that period; (4) Plaintiff’s employment from 1993-1997 could not be
credited because during that time she was under the St. Vincent’s contract, and past service
credit was not awarded until St. Barnabas took over the contract, which occurred on January 1,
1998; (5) the Fund had reached out to Corizon to verify the earnings numbers that Plaintiff
provided because it wanted to ensure that these numbers did not include overtime, but also asked
that Plaintiff provide documentation for her earnings during this periods; (6) the Fund had used
Plaintiff’s weekly salary and industry standard wages to calculate her AFP; and (7) industry
standard wage had also been used to determine her wage on the applicable Effective Date
(January 1, 2001), which was then adjusted to establish her base pay for purposes of calculating
her past service pay.
On June 15, 2017, Plaintiff appealed the Fund’s decision to the Retirement Committee.
In her notice of appeal, Plaintiff repeated all of her prior demands. Plaintiff claimed that she
never received the “forty hour letter” suspending her benefits. After pointing out that the Fund
was required to maintain accurate records of a Participant’s pay pursuant to ERISA, she insisted
that the Fund, not she, should bear the responsibility of obtaining the actual number of Plaintiff’s
pay from Corizon, or else should use the base pay Plaintiff had provided. Id. at 6-7. Providing
her W-2 forms, Plaintiff claimed that her AFP should have been calculated at a higher rate.
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Michael Kaiser (“Kaiser”), the Chief Pension Officer of the Fund, responded on August
3, 2017. Dkt. No. 21, Ex. J. The letter confirmed that the Fund still found Plaintiff ineligible for
collection of benefits as of November 1, 2016. It also asserted that her AFP had been calculated
correctly based on the information available to the Fund; her time with St. Vincent’s could not be
included in the past service calculation; and her disability benefits commenced on the
appropriate date. Id. Attached to this letter were copies of the two letters the Fund claims to
have sent to Plaintiff on September 2, 2016 and October 3, 2016, informing Plaintiff that her
benefits had been suspended. Dkt. No. 23 ¶ 60.
On November 21, 2017, the Retirement Committee upheld the Fund’s use of the Industry
Standard calculation, but granted another of Brightman’s arguments (not relevant here), which
brought her monthly pension benefit to $1,945.80. The Committee also upheld the suspension of
Plaintiff’s benefits.
F.
Brightman’s Suit
After receiving the decision of the Retirement Committee, Brightman sued in federal
court, challenging four aspects of the Committee’s decision. First, she challenged the
Committee’s denial of future service credit for her work at St. Barnabas. Second, she argued that
she should be entitled to past service credit for the time she worked at St. Vincent’s. Third, she
argued that the Fund improperly suspended her benefits in October 2016. Finally, she argued
that the Fund had improperly calculated her AFP in making its determination about the benefit
she was entitled to.
The parties cross-moved for summary judgment. The Court, per Chief Judge McMahon,
granted summary judgment in favor of Defendants on the first two claims. Dkt. No. 40.
However, the Court concluded that the Fund’s decision was arbitrary and capricious with respect
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to the latter two claims. As for the benefit suspension, the Court concluded that the Retirement
Committee had failed to consider two issues: First, the Committee had not compared Plaintiff’s
job requirements at Corizon and PAGNY to see if they were similar, as the Plan provided that
suspension of benefits was appropriate only where a Participant’s new job used skills applicable
to her previous employment. Brightman had argued that her new position with PAGNY required
fewer skills than her previous position with Corizon. Second, the Committee had failed to
establish that it had given Brightman the required notice of the suspension of benefits, as the
record did not contain evidence reflecting that Brightman had received the notice and the notice
itself did not explain Plaintiff’s right to a review of the suspension of her benefits as required by
ERISA’s implementing regulations and the terms of the Plan. Dkt. No. 40 at 30. The Court
directed the Fund to determine whether Brightman’s benefits were properly suspended, and, if it
determined that they were, to consider whether Brightman was still working at least 40 hours per
month in Disqualifying Employment and whether this impacted a determination of when her
benefits should have restarted. With respect to Brightman’s AFP, the Court found that the Fund
had not made sufficient efforts to obtain actual pay information from Corizon. There was no
record that the Fund had followed up with Corizon to ascertain whether the pay information it
had received was inclusive of overtime or not, nor of any effort to get information regarding
Brightman’s regular pay after the initial inquiry. Id. at 32-33. The Fund was obligated to make
more proactive efforts to get the information from Corizon.
The Court remanded the case to the Fund for further consideration of these two issues.
G.
Proceedings on Remand
Prior to the Retirement Committee’s meeting to review her case, Brightman submitted
additional documentation to the Fund. The documentation showed that Brightman had not
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worked during 2017, and in 2018 had worked more than 40 hours only in the month of July.
Dkt. No. 53-11 at 9-10.
The Committee met on September 24, 2019 to evaluate the issues remanded by the Court.
Dkt. No. 50 at 1. The Committee “pended” the appeal in order for the Fund to respond to
inquiries raised by Brightman’s counsel in the meeting and in a letter submitted by counsel the
same day. Id. On October 15, 2019, the Fund provided Brightman’s counsel with additional
information, and offered counsel the opportunity to respond. Id. On November 20, 2019, the
Committee met again, “reviewed the entire administrative record, the suspension of Ms.
Brightman’s benefits, the amount of her ‘Final Average Pay,” and the calculations of her pension
benefits. Id.
The Committee concluded, first, that the Fund had properly suspended Brightman’s
benefits on account of her work as a PA for PAGNY at the Manhattan House of Detention. Id. at
2. It found that “for purposes of Disqualifying Employment, the relevant inquiry was whether
during her post-retirement work at PAGNY she used skills that were applicable to her preretirement employment.” Id. The Committee contacted PAGNY, which informed it that
Brightman’s duties included performing chart reviews and summaries on all transfers, a duty
which Brightman had when she was employed with Corizon, and which can only be performed
by a Physician or a PA. Id. The Committee also noted that the PA job descriptions at Manhattan
House before Brightman’s retirement and after her re-employment were “virtually identical.” Id.
The Committee did not credit Brightman’s claim that she was a mere “quality control reviewer”
despite her PA position title and salary, finding it highly improbable that a hospital would pay a
PA salary to someone performing clerical work. Id. at 2-3. Thus, the Committee concluded
once again that Brightman performed Disqualifying Employment at PAGNY.
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Second, the Committee decided to pay benefits to Brightman for the period up until June
15, 2017, the date that Brightman filed her appeal of the suspension decision. Id. at 6. It
concluded that by that date, Brightman unquestionably had notice of the appeals process, and
thus could not complain that the deficient notice in the suspension letters prejudiced her after that
date. Id.
Nonetheless, the Committee continued to maintain that the notice letters sent in
September and October 2016 were adequate. Id. at 3-4. The Committee rejected Plaintiff’s
argument that the two suspension letters and the Plan/SPD the Fund sent Brightman in
September and October 2016 did not constitute sufficient suspension notice. Id. at 4. The
Committee noted that the Fund was not required to provide all of the required elements of the
suspension notice in one single notice. According to the Committee, “the Fund sent a
combination of notices and the Plan/SPD to Ms. Brightman at the time of her re-employment that
substantially complied with the Plan and the law.” Id. The Committee additionally noted that
Brightman was already in the midst of an administrative appeal when her benefits were
suspended in October 2016, and thus was apparently already on notice about the appeals process.
Id. Brightman had never claimed that she was unaware of her appeal rights at the time of the
suspension. Id.
In response to the Court’s concern that the Fund had failed to show that it had actually
sent the suspension notices, the Committee produced records of first-class mailing of suspension
warning letter and the suspension notice. Dkt. No. 50, Ex. S. The Fund additionally provided
contemporaneous records showing that it had sent a letter to PAGNY on September 2, 2016,
requesting Brightman’s reemployment information and that PAGNY had provided the
information on September 15, 2016. Id., Ex. 12. Thus, although the Committee decided to pay
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Plaintiff retroactive benefits for the months of October 2016 through June 2017, it continued to
maintain that the original suspension was valid and that the suspension letters were compliant
with ERISA.
Next, the Committee analyzed the issue of Brightman’s AFP. After the Court ordered the
Committee to make “reasonable efforts” to obtain Brightman’s actual pay data from Corizon, the
Committee served Corizon with a subpoena. In response, Corizon provided additional pay rate
data for the years 2010-2014. Id. at 5. The Fund’s Pension Department performed additional
calculations using the pay rate information from 2010 on and using the Industry Standard
methodology for the period prior.2 Using these new figures, the Pension Department concluded
that Brightman’s five highest-paid years were 2009-2013, during which she was paid an average
of $89,111.99. Id. Based on this AFP, the Committee determined that Brightman was entitled to
monthly pension benefit of $1,896.93. This total was, in fact, lower than the total the Fund had
previously calculated based on Industry Standard numbers, which had come out to a monthly
benefit of $1,945.80 per month. Id.
In her letter to the Committee dated September 24, 2019, Brightman argued for the first
time that her five highest consecutive years of pay were 2005-2009. Id. Brightman argued that
the Committee should find she was paid $81,056.92 in 2009—the amount of gross earnings on
her W-2—and that she was paid $99,738.22 in each of the years from 2005-2008. The
Committee rejected these findings. The Committee concluded that it was impossible for
Plaintiff claims in her briefing that the Committee “compared the amounts calculated under the
Wage Calculation Method with amounts previously reported by Corizon to the Fund [and] used
the lesser of the two amounts as Brightman’s AFP.” Dkt. No. 53-11 at 13. This is a misleading
characterization of the Fund’s process. It used the actual pay data it received for Corizon for the
years it was available and used Industry Standard for years in which it was not, as stipulated by
the terms of the Plan.
2
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Brightman’s Regular Pay to have been that high without exceeding the collectively bargained
rate. Id. at 6. The Committee also noted again that W-2 earnings information cannot be used to
establish Regular Pay, because W-2s do not separate non-pensionable overtime from base pay.
Id. The Committee also noted that her position contradicted her earlier claim that she was paid
$17,533.08 in 2006. Id.
On the basis of these findings, the Committee recalculated Brightman’s benefit to
$1,896.93 per month. It directly deposited $14,049 into her bank account to pay for the months
of November 2016 through June 2017. Dkt. No. 53-11 at 14.
F.
Plaintiff’s Retirement
In December 2019, Brightman contacted the Pension Department to inform them that she
had retired. Dkt. No. 56 ¶ 14. When the Pension Department prepared her new Pension EOB,
her monthly benefit increased to $2,011.00 with the additional accrual and new years of salary
during her time with PAGNY. Id.
G.
Second Summary Judgment Motion
Brightman returned to this Court, challenging both the calculation of her AFP and the
Committee’s decision that her benefits were lawfully suspended by June 15, 2017. On February
4, 2020, the case was reassigned to the undersigned. Brightman filed her second motion for
summary judgment on June 1, 2020. Dkt. No. 53. Defendants filed a cross-motion for summary
judgment and a motion in opposition to Plaintiff’s motion for summary judgment on July 6,
2020. Dkt. No. 55. Plaintiff filed her reply on July 13, 2020, Dkt. No. 60, and Defendants filed
their reply on July 20, 2020. Dkt. No. 62.
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LEGAL STANDARD
Summary judgment is appropriate when the record shows that there is no genuine dispute
as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “An issue of fact is
‘material’ for these purposes if it ‘might affect the outcome of the suit under the governing
law,’” while “[a]n issue of fact is ‘genuine’ if ‘the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.’” Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92,
97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In
determining whether there are any genuine issues of material fact, the Court must view all facts
“in the light most favorable to the non-moving party,” Holcomb v. Iona Coll., 521 F.3d 130, 132
(2d Cir. 2008), and the movant bears the burden of demonstrating that “there is no genuine
dispute as to any material fact,” Fed. R. Civ. P. 56(a).
If the movant meets its burden, “the nonmoving party must come forward with
admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary
judgment.” Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d Cir. 2008). It may not rely
on “mere speculation or conjecture as to the true nature of the facts,” Hicks v. Baines, 593 F.3d
159, 166 (2d Cir. 2010) (citation omitted), or “on the allegations in [its] pleading, or on
conclusory statements, or on mere assertions that affidavits supporting the motion are not
credible,” Gottlieb v. Cnty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citation
omitted). Rather, to survive a summary judgment motion, the opposing party must establish a
genuine issue of fact by “citing to particular parts of materials in the record,” Fed. R. Civ. P.
56(c)(1)(A), and demonstrating more than “some metaphysical doubt as to the material
facts,” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see
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also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). If “the party opposing summary
judgment propounds a reasonable conflicting interpretation of a material disputed fact,”
summary judgment shall be denied. Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10 (2d Cir.
1983).
DISCUSSION
A.
Standard of Review
ERISA provides that a person denied benefits under an employee benefits plan may
challenge that denial in federal court. 29 U.S.C. § 1132. “Although it is a comprehensive and
reticulated statute, ERISA does not set out the appropriate standard of review for actions . . .
challenging benefit eligibility determinations.” Firestone Tire & Rubber v. Bruch, 489 U.S. 101,
108-09 (1989) (citation and quotation marks omitted). The parties dispute whether the Court
should review the Fund’s decision de novo or for an abuse of discretion. In Firestone Tire, the
Supreme Court held that a challenge to the denial of benefits under an ERISA-covered employee
benefit plan “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,” in which case an arbitrary and capricious standard applies.
Firestone, 489 U.S. at 115. Even where an arbitrary and capricious standard applies under the
benefit plan, a court “must consider whether such deference conflicts with the ‘language of the
statute, its structure, or its purpose,’ bearing in mind ‘competing congressional purposes.’” Halo
v. Yale Health Plan, 819 F.3d 42, 52 (2d Cir. 2016) (quoting Varity Corp. v. Howe, 516 U.S.
489, 497 (1996)). The Second Circuit has held that “a plan’s otherwise discretionary denial of a
claim that fails to comply with the Department of Labor’s claims-procedure regulation is not
entitled to deference.” Halo, 819 F.3d at 56. However, “when denying a claim for benefits, a
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plan’s failure to comply with the Department of Labor’s claims-procedure regulation will result
in the claim being reviewed de novo in federal court, unless the plan has otherwise established
procedures in full conformity with the regulation and can show that its failure to comply with the
claims-procedure regulation in the processing of a particular claim was inadvertent and
harmless.” Id. at 57-58.
Where the arbitrary and capricious standard applies, a court “may not overturn the
administrator’s denial of benefits unless its actions are found to be arbitrary and capricious,
meaning ‘without reason, unsupported by substantial evidence or erroneous as a matter of law.’”
McCauley v. First Unum Life Ins. Co., 551 F.3d 126, 132 (2d Cir. 2008) (quoting Pagan v.
NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995)). “Substantial evidence is ‘such evidence
that a reasonable mind might accept as adequate to support the conclusion reached by the
[administrator and] . . . requires more than a scintilla but less than a preponderance.’” Celardo v.
GNY Auto. Dealers Health & Welfare Tr., 318 F.3d 142, 146 (2d Cir. 2003) (quoting Miller v.
United Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995)). Under arbitrary and capricious
review, the “scope of review is narrow.” O’Shea v. First Manhattan Co. Thrift Plan & Tr., 55
F.3d 109, 112 (2d Cir. 1995). An administrator’s decision is arbitrary and capricious when it is
“without reason, unsupported by substantial evidence or erroneous as a matter of law.”
McCauley, 551 F.3d at 132 (quoting Pagan, 52 F.3d at 442).
There is no dispute that the Plan grants the Fund Trustees discretionary authority to
interpret the Plan and documents related to the Plan. Dkt. No. 40 at 19. Thus, the Court “will
not disturb the administrator’s ultimate conclusion unless it is ‘arbitrary and capricious.’”
Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 82 (2d Cir. 2009) (quoting Pagan, 52 F.3d at 441).
To the extent, however, that Plaintiff’s arguments require the Court to interpret ERISA and its
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implementing regulations, the Court will review the interpretation of those laws de novo. Halo
v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016).
With few exceptions, “[f]or a review under the arbitrary and capricious standard . . . a
district court’s review . . . is limited to the administrative record.” Valentine v. Aetna Life Ins.
Co., 125 F. Supp. 3d 425, 438 (E.D.N.Y. 2015). The Second Circuit has “repeatedly said that a
district court’s decision to admit evidence outside the administrative record is discretionary,” and
that this “discretion ought not be exercised in the absence of good cause.” Wedge v. Shawmut
Design & Const. Grp. Long Term Disability Ins. Plan, 23 F. Supp. 3d 320, 337 (S.D.N.Y. 2014)
(quoting Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008)). As neither
party has argued that there is good cause to review evidence beyond the administrative record,
the Court bases its holding on the record.
B.
Notice of Suspension
ERISA’s implementing regulations state that: “No payment shall be withheld by a plan
pursuant to this section unless the plan notifies the employee by personal delivery or first class
mail during the first calendar month or payroll period in which the plan withholds payments that
his benefits are suspended.” 29 C.F.R. § 2530.203-3(b)(4). The notification is required to
include “a general description of the plan provisions relating to the suspension of payments, a
copy of such provisions, and a statement to the effect that applicable Department of Labor
regulations may be found in § 2530.203-3 of the Code of Federal Regulations.” Id. Further “the
suspension notice shall inform the employee of the plan’s procedure for affording a review of the
suspension of benefits.” Id. Section 11.7 of the Plan states: “A Pensioner whose benefits are
suspended and a Participant who continues to work for a Contributing Employer beyond Normal
Retirement Date shall receive (to the extent required under ERISA) a notice that includes the
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information and complies with Department of Labor Regulations 29 C.F.R. § 2530.203-3(b)(4).
Such notice shall be delivered by first class mail or personal delivery not later than the end of the
first calendar month during which benefit payments are suspended.” Dkt. No. 21-19 § 11.7.
Brightman has maintained through this litigation that she never received the required
notice that her employment with PAGNY could lead to a suspension of her pension benefits. As
a consequence, she maintains, the suspension of her benefits should never have been effective.
On the parties’ first motion for summary judgment, the Fund pointed to two letters it sent in
September and October of 2016. The first letter warned her that she was engaging in
Disqualifying Employment and that her pension would be suspended. Dkt. No. 50-2 at 4. The
second letter informed her that the Fund had suspended her benefits, stating that since she had
decided to continue working in a health-related field, no more payments would be made to her
under the Plan until she retired. Id. at 6-7. Brightman maintained that she had never received
the letters.
On the first motion for summary judgment, the Court remanded to the Fund for further
consideration. The Court found that there were three issues that needed to be reevaluated. First,
although the Fund had put the letters on the record, it had not presented any proof that the letters
were actually sent to Plaintiff, “let alone by personal delivery or first-class mail, as required by
the Plan and by ERISA.” Dkt. No. 40 at 30. Second, Defendants’ briefing indicated that
“[a]lthough [Plaintiff] entered Disqualifying Employment as of January 1, 2016, the Fund’s [sic]
did not discover this fact until October 2016.” Id. If the Fund discovered Plaintiff’s
Disqualifying Employment in October, the Court reasoned, it would be impossible for the Fund
to have sent the warning letter in September 2016. Id. Third, the Court held that “even if the
Plan had established that the letters were actually sent, it did not comport with the requirements
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of law, in that the letters did not notify Plaintiff about her right to a review of the suspension of
her benefits, which violates both the Plan and ERISA.” Id. The Court gave the following
directions to the Fund on remand: “If the Fund determines that Plaintiff’s pension should be
suspended, it must also address the issue of when Plaintiff first received adequate notice of the
suspension. The Fund should obtain proof that the letters were actually sent to Plaintiff and
provide adequate documentation supporting its finding. Plaintiff is owed benefits up and until
the Fund can establish that it provided notification pursuant to the requirements of the Plan and
29 C.F.R. § 2530.203-3(b)(4).” Id. at 30-31.
On remand, the Fund produced records indicating that it had sent the two letters advising
Brightman about the suspension of benefits by first class mail. Dkt. No. 50 at 110-133. It also
found evidence to show that the September letter had been sent to PAGNY, also on September 2,
2016. Dkt. No. 50 at 4. The evidence contained in the administrative record addresses the
Court’s prior concerns about whether the suspension letters were sent. The Fund’s internal
records show that the Fund did mail the letters on September 2 and October 15 as it had
previously averred. The records do not reflect when the Fund learned of Brightman’s
Disqualifying Employment but does reflect that it learned of it from the PAGNY contribution
reports.
More difficult is the question whether the suspension letters were sufficient in light of the
terms of the Plan and ERISA’s implementing regulations. The Court held in its opinion
addressing the first summary judgment motion that the language of the suspension notices was
insufficient insofar as it did not notify Plaintiff of her right to a review of the suspension. In
response to this concern, the Committee pointed out (1) that the Fund sent Brightman a copy of
the Plan and its accompanying SPD, which included a description of the appeals process, in
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December 2015, and again on September 24, 2016; and (2) the fact that Brightman was evidently
on notice about the appeals process already, because she was already in the midst of an
administrative appeal at the time when her benefits were suspended. Dkt. No. 50 at 4.
As Chief Judge McMahon wrote in the first summary judgment decision, and Defendants
concede, the letters notifying Brightman of the suspension of her benefits did not strictly comply
with the language of 29 C.F.R. § 2530.503-3(b)(4). Brightman contends that the language of 29
C.F.R. § 2530.203-3(b)(4) means that the information required must all be contained within a
single notice of suspension, or the suspension is invalid. The fact that the Plan sent a copy of the
Plan/SPD with the appeals information separately three weeks later cannot, in her view, cure the
deficiency in the suspension letter.
The question is thus whether the failure of the Fund to comply strictly with the
requirements of the regulation is excused because the Fund substantially complied with the
regulation. “Substantial compliance is a doctrine that forgives technical noncompliance for
purposes of a plan administrator’s discretionary decision.” Nichols v. Prudential Ins. Co. of Am.
406 F.3d 98, 107 (2d Cir. 2006). The Second Circuit has expressly reserved the question
whether substantial compliance with ERISA’s procedural obligations will suffice. Nichols, 406
F.3d at 107 (2d Cir. 2006); see also Mohamed v. Sanofi-Aventis Pharmaceuticals, 2009 WL
4975260, at *16 n.16 (S.D.N.Y. Dec. 22, 2009) (“[I]t appears to remain an open question in the
Second Circuit whether substantial compliance with ERISA’s procedural obligations will
suffice.”). The five other circuits to have addressed the issue, however, have unanimously held
that substantial compliance with the procedural requirements of ERISA’s implementing
regulations will excuse a technical violation. See Heller v. Fortis Benefits Ins. Co., 142 F.3d
487, 493 (D.C. Cir. 1998) (holding that, although an initial letter informing the plaintiff “of the
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denial of his disability benefits did not conform to the requirements of the regulations, the
procedures, when viewed in light of the myriad communications between claimant, her counsel
and the insurer, [appear] sufficient to meet the purposes of [ERISA] in insuring that the claimant
understood the reasons for the denial of [her benefits] as well as her rights to review of the
decision.”) (quotation marks and citation omitted); Brehmer v. Inland Steel Indus. Pension Plan,
114 F.3d 656, 662 (7th Cir. 1997) (holding that substantial compliance with ERISA’s regulations
regarding notice of a benefit denial is sufficient); Ellis v. Metro. Life Ins. Co., 126 F.3d 228, 235
(4th Cir. 1997) (“[S]ubstantial compliance with the spirit of the regulation will suffice, for ‘[n]ot
all procedural defects will invalidate a plan administrator’s decision.’” (quoting Brogan v.
Holland, 105 F.3d 158, 165 (4th Cir. 1997)); Kent v. United Omaha Life Ins. Co., 96 F.3d 803,
807 (6th Cir. 1996) (“[W]hen claim communications are sufficient to fulfill the purposes of
[ERISA] the claim decision will be upheld even if a particular communication does not meet
those requirements.”); Sage v. Automation, Inc. Pension Plan & Tr., 845 F.2d 885, 895 (10th Cir.
1988) (“[n]ot every procedural defect will upset the decision of plan representatives.”).
In order to determine when an administrator who violates a technical provision of
ERISA’s regulations might nonetheless be in substantial compliance with the regulations, “the
purpose of [ERISA] and its implementing regulations . . . serves as our guide.” Donato v. Metro.
Life Ins. Co., 19 F.3d 375, 382 (7th Cir. 1994). In the closely related context of the notice
required for benefit denials under ERISA, the Ninth Circuit has held that, “what this regulation
calls for is a meaningful dialogue between ERISA plan administrators and their beneficiaries. If
benefits are denied . . . the reason for the denial must be stated in reasonably clear language, . . .
[and] if the plan administrators believe that more information is needed to make a reasoned
decision, they must ask for it.” Booton v. Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th
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Cir. 1997). The purpose of the notice requirements in the context of ERISA benefit denials is
thus to ensure that a plan beneficiary is provided with a reasoned explanation for why the plan
has denied her request for benefits, and to inform her of the options available to her to challenge
the fund’s determination.
Here, similarly, the purpose of 29 C.F.R. § 2530-503-3(b)(4) is readily apparent: to
provide the beneficiary with an explanation of why her benefits have been suspended and to
notify her of the proper procedure to follow, should she wish to appeal the suspension. It is
uncontested that the notices the Fund sent to Brightman included the required explanation of the
suspension. At issue is only the description of the appeals process.
Although the suspension notice letter did not include a description of the appeals process,
the Court concludes that the Fund was nonetheless in substantial compliance for two reasons.
First, Brightman was notified at least three times of the appeals process in separate
communications from the Fund. The process was explained in the SPD and Plan documents that
the Fund sent her several times, including in (1) the March 1, 2015 NRA suspension notice; (2)
the December 17, 2015 Pension Explanation of Benefits; and (3) the copy of the Plan/SPD the
Fund sent to Brightman on September 24, 2016. See Donato, 19 F.3d at 382 (holding that, where
a notice of denial of disability benefit did not include required material explaining the denial, but
plaintiff possessed reports upon which decision was based that “permitted a sufficiently clear
understanding of [the defendant’s] decision,” the administrator was in substantial compliance
with ERISA’s regulations). Although the suspension notice letter did not include the description
of the appeals process, the record shows that Brightman had already been repeatedly notified of
the process—a circumstance further evidenced by the fact that, prior to the suspension of her
benefits, Brightman had already appealed the way the Fund had calculated her credited service.
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Second, though the suspension letter did not describe the appeals process, it mentioned that if she
wished to challenge the Fund’s determination, she should call the Fund at a number provided in
the letter. Brightman was thus on notice that there was an appeals process and that the process
could be instigated by contacting the Fund.
The limited case law interpreting 29 C.F.R. § 2530.203-3(b)(4) similarly supports
Defendants’ position. In Dennis v. Board of Trs. of Food Emps. Labor Rels. Ass’n and United
Food and Com. Workers Union Pension Fund, 620 F. Supp. 572 (M.D. Pa. 1985), for instance, a
court confronted a suspension notice that did not include a general description of the plan
provisions relating to the suspension of benefit payments, a statement that the applicable
regulations could be found in 29 C.F.R. § 2530, or a mention of the plan’s procedure for appeal,
all of which are required by 29 C.F.R. § 2530.203-3(b)(4). Observing that plaintiffs’ counsel had
sought reconsideration of the Board’s decision, the court held that, where a violation of the
procedural rules for the provision of notice was “technical”—insofar as it had not interfered with
plaintiffs’ ability to seek review of the suspension decision—such a deficiency “[did] not warrant
reinstatement of benefits.” Id. at 576; see also, Canada v. Am. Airlines, Inc. Pilot Ret. Benefit
Program, 2010 WL 4877280, at *16 (M.D. Tenn. Aug. 10, 2010) (“Procedural violations of
ERISA do not give rise to substantive claims, at least where the plan participant is informed of
the basis for the decision, and [plaintiff] has not shown how he was prejudiced by the allegedly
deficient notice . . .”); Monks v. Keystone Powdered Metal Co., 78 F. Supp. 2d 647, 670 (E.D.
Mich. 2000) (“It is difficult to see how any of [the information required by 29 C.F.R. §
2530.203-3(b)(4)] would have better and more fully advised Plaintiff that he ran the risk of
‘forfeiting’ some of his pension benefits . . . if he continued working past the normal retirement
age of 65. Notably, [p]laintiff has not claimed that this additional information might have led
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him to reconsider his decision to work past age 65, nor that this decision was based upon any
misapprehensions that might have been corrected had he been given this additional notice.”);
Logrande v. Loc. 851 Emp. Grp. Pension Plan, 695 F. Supp. 92 (E.D.N.Y. 1988).
Similarly, here, Brightman has not—and cannot—allege that the Fund’s failure to include
the description of the appeals process in the suspension letter led her to forfeit any rights under
the Plan or that she labored under any misapprehensions about the appeals process for her
suspension. Brightman timely challenged the suspension in June of 2017 through the Fund’s
appeals process. Were she to have prevailed, she would have recovered the benefits that she lost
during the time her benefits were suspended. Thus, the lack of explanation of the appeals
process in the suspension notice letter was purely technical, as the letter satisfied the purposes of
the regulations, even if it did not satisfy them to the letter. Brightman has not shown how she
was prejudiced by the deficiencies in the notice and it does not appear on the record that she was.
Plaintiff finally argues that the Court has already decided that her benefits were
improperly suspended because of the deficiency of the notice letter in Chief Judge McMahon’s
prior summary judgment decision in this case. The Court disagrees. Chief Judge McMahon
determined that the suspension notice letter did not comply with the requirements of ERISA’s
implementing regulations. Chief Judge McMahon did not determine what the legal effect of that
fact was, and instead remanded to the Fund for further consideration of the issue when
Brightman first received adequate notice. Dkt. No. 40 at 30-31. On remand, the Fund concluded
that Brightman had adequate notice, despite the suspension letters’ failure to comply with the
letter of the regulations. The Court now concludes that although the Fund did not comply with
the letter of the regulation, it was nonetheless in substantial compliance with the regulation and
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the error was harmless. This conclusion is not in conflict with the prior summary judgment
decision.
For these reasons, summary judgment is granted in favor of Defendants on the issue
whether Brightman was properly notified of the suspension of benefits.
C.
Benefits Calculation
In order for a court to overturn a denial of benefits under the arbitrary and capricious
standard, the plaintiff must show that the administrator’s decision was “without reason,
unsupported by substantial evidence or erroneous as a matter of law.” Miller, 72 F.3d at 1072
(quoting Pagan, 52 F.3d at 442). On this renewed motion for summary judgment, Brightman
argues again that the Committee miscalculated the monthly benefit to which she was entitled. At
issue are the amounts that the Fund was using to calculate Plaintiff’s “Regular Pay,” which were
then averaged to determine her “Average Final Pay.”
Section 1.29 of the Plan defines “Regular Pay”:
“Regular Pay” means for each Participant, his total pay in a Plan Year . . . during
periods for which his Contributing Employer is required to make Contributions,
excluding overtime, on-call pay, commissions, bonuses and gratuities and expense
allowances, . . .
Dkt. No. 21, Ex. Q § 1.29 at 137 (emphasis added).
When it made its initial calculation of Plaintiff’s benefits, the Retirement Committee used
“industry standard” to determine her Regular Pay for all years except for 2013. The “industry
standard” calculation estimates Regular Pay by looking at a known payrate in a given week, and
factoring in (or out) the bargained increases in the collective bargaining agreement. “Industry
standard” is used where the Committee is unable to obtain actual information about a Plan
beneficiary’s rate of pay. See id. (“For periods for which the Fund office is unable to obtain
actual pay information, Regular Pay shall be calculated utilizing industry standards through a
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methodology approved by the Retirement Committee . . .”). When making its initial calculation,
and before this Court on the first summary judgment motion, the Committee maintained that it
had been unable to get Brightman’s Regular Pay information from Corizon; instead, Corizon had
provided the Committee with gross pay information, but had not furnished the Committee with
payroll information that divided Brightman’s pay into regular pay and overtime.
On the first summary judgment motion, the Court held that the Committee’s use of
industry standard rates was arbitrary and capricious. The Committee had not shown that it had
made reasonable efforts to obtain Plaintiff’s actual pay information from Corizon and had not
shown that it was unable to obtain it. Dkt. No. 40 at 31. The Court held that the administrative
record did not show that the Committee had contacted Corizon again to attempt to get
information on Brightman’s base pay after Corizon had submitted the salary records that did not
segregate overtime pay; nor did it contain evidence adequate to substantiate the Committee’s
contention that the information provided by Corizon did, in fact, include overtime pay. Id. at 33.
The Court also concluded that the evidence on the record did not support Defendants’ claim that
Corizon was no longer responsive to requests for documentation in the wake of losing its
contract with the New York City Department of Corrections. Id. at 34.
On remand, the Committee served a subpoena on Corizon, pursuant to which Corizon
provided Brightman’s pay information for the period from 2010 to 2014, including how much of
her pay consisted of base salary and how much consisted of overtime. Corizon informed the
Committee that it did not have pay information for Brightman for years prior to 2010. After
reviewing that information, the Committee determined that it would have to use “industry
standard” to calculate Brightman’s pay for the earlier years of her employment with Corizon.
Based upon these calculations, the Committee found that Brightman’s five highest-paid years of
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consecutive employment were 2009-2013. Based on the new numbers, her AFP for the period
came out to $89,111.91. That calculation resulted in a monthly benefit of $1,896.63 per month,
an amount modestly less than the $1,945.80 per month that the Committee had calculated based
on industry standard prior to Brightman’s first summary judgment motion.
The Committee’s determination was based upon an extensive record consisting of:
Exhibit I: Fund’s written attempts, including 8/19 subpoena duces tecum to
Corizon Health, to obtain Ms. Brightman’s Regular Pay information.
Exhibit 1: CK letter dated September 24, 2019
Exhibit 4: CK’s handwritten paystub information submitted in 2017 (actual pay
stubs never produced)
Exhibit 6: Corizon letter dated October 10, 2019
Exhibit 7: Pension Department calculations showing Final Average Pay for the
years 2005-2009
Exhibit 8: League CBA excepts with wage increases
Exhibit G: The Pension Department’s chart of calculations using the years 20102014
Exhibit D: Corizon’s payroll department reported Ms. Brightman’s total annual
wages from 2010-2014, provided in the April 2017 Income Questionnaire
Exhibits E, I, and J: Corizon’s HR Department payrate information from 20102014
Exhibit 2: The Fund’s letter dated September 17, 2019 explaining Industry
Standard
Exhibit 3: follow-up emails between CK on Fund on September 19 and 20, 2019,
answering questions about the calculations
Exhibit B: calculation breakdowns the Fund sent to Ms. Brightman’s counsel on
Nov. 20, 2017
Plan Sections 1.29, 2.4
Dkt. No. 50 at 5. The Committee also provided detailed explanations of the Industry Standard
calculations in letters to Plaintiff’s counsel dated September 17, 2019 and October 15, 2019. The
Committee also noted that Brightman had never provided any paystubs outside of her 2013
paystub; these paystubs would have allowed the Committee accurately to determine how much
of her pay was overtime and how much was regular pay. Dkt. No. 50 at 6.
The Committee’s calculation of Brightman’s AFP was based upon substantial evidence.
The record shows that the Committee made every effort to obtain actual pay information for
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Brightman, including serving subpoenas on Corizon and repeatedly asking Brightman to produce
her paystubs. The record also shows that the Committee did a thorough review of the evidence
before it, and presented detailed reports to Plaintiff’s counsel explaining in minute detail the
methodology it employed to calculate industry standard rates for years prior to 2010. After it
obtained Plaintiff’s payrate for the years 2010-2014 from Corizon, it used the 2010 payrate and
backed out the CBA wage increases to calculate Plaintiff’s rate of pay for the years 2005-2009.
Then it calculated and compared Plaintiff’s Regular Pay for every year between 2005 and 2014
and created a chart that showed each consecutive five-year scenario for total salary. Dkt. No. 50,
Ex. G.
Further, the record shows that the Committee considered the evidence that Brightman
presented to it and found it lacking. In particular, the Committee considered Brightman’s
argument, raised before it on remand for the first time, that Brightman’s highest consecutive
years of pay were 2005-2009. Dkt. No. 50 at 5-6. It looked at the evidence presented and
concluded that Brightman’s contention was impossible and in direct contradiction to other
representations Brightman had made earlier in the dispute. Because the record shows that the
Committee gave the evidence before it a “full and fair” review and that it “evaluated all the
evidence submitted” by Brightman, Suarato v. Building Servs. 32BJ Pension Fund, 554 F. Supp.
2d 399, 420 (S.D.N.Y. 2008), the Court cannot conclude that the Committee’s calculation of
Brightman’s AFP was arbitrary and capricious.
In response, Plaintiff argues that the Fund miscalculated the AFP. Her central argument
is that the Fund incorrectly assumed that the five-year period in which her average pay was
highest was the period from 2009-2013. Dkt. No. 53-11 at 20-21. Instead, she argues, she
earned the most compensation in the period from 2005-2009. In an exhibit appended to her
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brief, Brightman puts forward salary amounts for those years that she claims in her brief were
calculated according to industry standard. Id. at 21. Brightman’s figures are presented in the
table below, and contrasted with the calculations of the Fund’s pension department:
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Pension Dept’s Calculation
$87,750.00
$90,163.51
$91,502.82
$94,247.83
$74,803.66
$89,703.21
$71,839.72
$104,280.80
$104,932.56
$65,709.46
Brightman’s Calculation
$90,407.15
$92,887.66
$94,213.53
$97,091.86
$74,803.95
$89,703.21
$71,839.72
$101,731.50
$102,370.13
$58,724.08
Dkt. No. 50, Ex. 7; Dkt. No. 53, Ex. F. Based on these numbers, Plaintiff argues that her AFP
based upon the years from 2005 to 2009 should be $89,880.83, instead of the $89,111.99
calculated by the Fund, based upon her pay for the years 2009-2013.
Plaintiff’s contentions do not persuade the Court that the Fund’s calculation of
Brightman’s AFP was arbitrary and capricious. In the first place, Brightman’s alternative
calculations of her AFP were not presented to the Committee on remand, which places them
outside of the scope of the Court’s review. See Miller v. United Welfare Fund, 72 F.3d 1066,
1071 (2d Cir. 1995) (“[I]n reviewing decisions of plan fiduciaries under the arbitrary and
capricious standard, district courts may consider only the evidence that the fiduciaries
themselves considered.”). Brightman never raised the argument that her highest paid years were
2005-2009, before a letter she sent to the Committee on remand on September 24, 2019. There,
however, she asked the Committee to find that she was paid $99,738.22 in each of the years from
2005-2008; an amount that the Committee concluded was impossible, because it exceeded the
collectively bargained rate. Dkt. No. 50 at 5. Brightman additionally asked the Committee to
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find that she was paid $81,056.92 in 2009, the amount of her gross earnings on her W-2. Id. As
the Committee had previously concluded, Brightman could not rely on the earnings totals on her
W-2s alone to determine her AFP, because her W-2s did not reflect how much of her pay was
non-pensionable overtime. The Committee also noted that Brightman’s position contradicted her
claim during the pre-litigation appeal, when she represented that her “total 2006 wages as of pay
date 12/29/06 was $17.533.08.” Dkt. No. 50 at 6.
In order for the Court to conclude that the Committee’s calculation of Brightman’s AFP
was arbitrary and capricious, Brightman would have to show that the Committee overlooked or
disregarded evidence that would have supported her position. See Zuckerbrod v. Phx. Mut. Life
Ins. Co., 78 F.3d 46, 49 (2d Cir. 1996) (holding that, in evaluating whether a benefit denial was
arbitrary and capricious, a court considers “whether [the defendant’s] decision was based on a
consideration of the relevant factors and whether there has been a clear error of judgment.”).
Brightman has not done so. The Committee considered her arguments and found them to be
unpersuasive in light of the record before it. The Court cannot conclude that it was wrong to do
so; and certainly not on the basis of salary calculations that Plaintiff did not present to the
Committee and has not explained before the Court. Further, Plaintiff cannot rely on newly
offered calculations of the Industry Standard amounts, that are lacking support or explanation
and which she did not submit to the Committee for its evaluation. If Plaintiff wished to raise this
argument, she had to present it to the Committee for its evaluation; indeed, the Court’s first
remand for further consideration was precisely for this purpose. See Miller, 72 F.3d at 1071
(“This rule [i.e., the requirement that courts review only the administrative record in ERISA
benefit denial cases] is consistent with the fact that nothing ‘in the legislative history suggests
that Congress intended that federal district courts would function as substitute plan
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administrators’ and with the ERISA ‘goal of prompt resolution of claims by the fiduciary.’”)
(quoting Perry v. Simplicity Eng’g, a Div. of Lukens Gen. Indus., Inc., 900 F.2d 963, 966 (6th
Cir. 1990)).
In her reply, Brightman contends that the Court should consider the new evidence she has
presented on this summary judgment motion, because there was no opportunity to present the
evidence during the remand. In particular, she argues that calculations attached to her summary
judgment motion as Exhibit F, Dkt. No. 53, Ex. F, which purports to be her calculations of the
industry standard and to show that her highest earning years were 2005-2009, could not have
been presented to the Retirement Committee until after the Committee rendered its final
decision. But Brightman did argue before the Committee that 2005-2009 were the years where
she earned the most, albeit on the basis on different numbers than those she now relies upon.
There, she argued that she was paid $99,738.22 in each year from 2005 to 2008, but, as the
Committee concluded, she presented no evidence for this figure, and indeed, that figure was
impossible based upon the collectively bargained rate. Thus, the Committee considered her
argument about her pay from 2005-2009 and rejected it. The Court is not required to reconsider
this argument de novo simply because Brightman has presented it again with new and different
alleged salary numbers.
Furthermore, as discussed above, just as she did before the Committee on remand,
Brightman does not explain how she arrived at the figures she proposes for the Industry Standard
from 2005 to 2009. She provides no documentation of the evidence she used nor anything more
than a cursory explanation of the calculations she employed. Had Brightman provided bona fide
evidence showing that the Committee had miscalculated the Industry Standard numbers based
upon its own formulas, then perhaps the evidence could be evaluated to determine if the
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Committee had acted arbitrarily and capriciously. But Brightman has presented nothing more
than a list of slightly different numbers than those established by the Committee that she asks the
Court to assume are correct without providing any basis for that assumption. In the absence of
any rationale for accepting this evidence, the Court cannot consider it and certainly cannot
conclude that the Committee erred in its calculations, which are supported by ample
documentation and explanation.
For these reasons, Defendants’ motion for summary judgment is granted with respect to
Brightman’s claims related to the calculation of her AFP.
D.
Attorneys’ Fees
Section 502(g)(1) of ERISA provides that a “court in its discretion may allow a
reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). Because
“Congress intended the fee provisions of ERISA to encourage beneficiaries to enforce their
statutory rights,” Slupinksi v. First Unum Life Ins. Co., 554 F.3d 38, 47 (2d Cir. 2009), a court
may award attorneys’ fees even to a party that does not prevail, Miller, 72 F.3d at 1074, so long
as the “fee claimant has achieved ‘some degree of success on the merits.’” Hardt v. Reliance
Std. Life Ins. Co., 560 U.S. 242, 255 (2010) (citing Ruckelshaus v. Sierra Club, 463 U.S. 680,
694 (1983)); see also Locher v. Unum Life Ins. Co. of Am., 389 F.3d 288, 298 (2d Cir. 2004)
(“ERISA’s attorney’s fee provisions must be liberally construed to protect the statutory purpose
of vindicating retirement rights.”) (quoting Chambless v. Masters, Mates & Pilots Pension Plan,
815 F.2d 869, 872 (2d Cir. 1987)). “A claimant does not satisfy that requirement by achieving
‘trivial success on the merits’ or a ‘purely procedural victor[y],’ but does satisfy it if the court
can fairly call the outcome of the litigation some success on the merits without conducting a
‘lengthy inquir[y] into the question whether a particular party’s success was ‘substantial’ or
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occurred on a ‘central issue.’” Id. at 255 (quoting Ruckelshaus, 463 U.S. at 688 n.9). Plaintiff’s
counsel has requested a fee award, claiming that it has had some success on the merits, even if it
loses on this summary judgment motion.
Prior to the Supreme Court’s decision in Hardt, the Second Circuit employed a fivefactor test for evaluating the appropriateness of fee awards pursuant to ERISA, set forth in
Chambless, 815 F.2d at 871. The factors are:
(1) the degree of opposing parties’ culpability or bad faith; (2) ability of opposing
parties to satisfy an award of attorneys’ fees; (3) whether an award of attorneys’
fees against the opposing parties would deter other persons acting under similar
circumstances; (4) whether the parties requesting attorneys’ fees sought to benefit
all participants and beneficiaries of an ERISA plan or to resolve a significant legal
question regarding ERISA itself; and (5) the relative merits of the parties’
positions.
Hardt, 560 U.S. at 249 n.1. After the Supreme Court’s decision in Hardt, the Second Circuit has
held that a district court “may apply—but is not required to apply—the Chambless factors” when
it uses its discretion to determine a fee award. Toussaint v. JJ Weiser, 648 F.3d 108, 110 (2d Cir.
2011). “So long as a party has achieved some degree of success on the merits, a court in its
discretion may allow a reasonable attorney’s fee.” Id. (internal citations and quotation marks
omitted). “In other words, if a court chooses to consider factors other than a plaintiff’s ‘success
on the merits’ in assessing a request for attorneys’ fees, Chambless still provides the relevant
framework in this Circuit, and courts must deploy that useful framework in a manner consistent
with [the Second Circuit’s] case law.” Donachie v. Liberty Life Assurance Co. of Bos., 745 F.3d
41, 47 (2d Cir. 2014).
Though the parties have briefed the Chambless factors, the Court need not reach them,
because the Supreme Court’s decision in Hardt resolves the issue: Plaintiff, having lost on every
issue of substance in this case, has not had “success on the merits” entitling her counsel to fees.
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On her prior summary judgment motion, she lost on her claims that she should be credited for
years of service with her prior employer and that her period of past service should be credited at
the future service rate. She won a remand on the issue of the calculation of her AFP and whether
she had been properly notified of the suspension of her benefits. On remand, however, once the
Fund complied with the Court’s order and obtained Plaintiff’s payroll records by subpoena, it
was revealed that Plaintiff was, in fact, entitled to a smaller pension than the one the Fund had
calculated based upon the Industry Standard numbers.
After all, the end result of this litigation, which has continued for nearly three years, will
be a modest reduction in the amount of Brightman’s monthly pension. In such a scenario, it
would be unreasonable for the Court to reward Brightman’s counsel as having achieved “success
on the merits.” See IBEW-NECA Defined Contribution Plan v. Bank of N.Y. Mellon, 2013 WL
1189681, at *5-6 (S.D.N.Y. 2012) (finding no success on the merits and denying fees where the
litigation placed Plaintiff in a worse position than he would have been had he never brought the
case). To do so would be to reward counsel for prosecuting a case that leaves its client in a
worse position than she would have been had she never brought the case in the first place.
Plaintiff’s counsel claims that it had “some success on the merits” insofar as it achieved a
remand to the Committee for further consideration of some issues on the first summary judgment
motion. But that is precisely the type of “purely procedural victory” that the Supreme Court held
in Hardt cannot entitle a party to a fee award. Counsel’s partial victory on the first summary
judgment motion was a Pyrrhic one, as the result of the remand was a reduced pension for the
client. Having achieved a result that set back the client, rather than advanced her, counsel is not
entitled to fees.
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It is true that the Committee awarded Plaintiff pension benefits for the months of
November 2016 to June 2017, though it continued to maintain that it was not legally obligated to.
As discussed above, the Court agrees that the suspension of benefits was valid and lawful. Thus,
although Plaintiff received some benefit as the result of the argument, it cannot be considered a
“success on the merits.”
CONCLUSION
For the foregoing reasons, Defendant’s motion for summary judgment is GRANTED and
Plaintiff’s motion for summary judgment is DENIED. Plaintiff’s counsel’s request for fees is
DENIED. The Clerk of Court is respectfully directed to close the case.
SO ORDERED.
Dated: March 2, 2021
New York, New York
__________________________________
LEWIS J. LIMAN
United States District Judge
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