Knudson v. Oregon Sheet Metal Workers Master Retirement Trust et al

Filing 38

OPINION AND ORDER: Neither the Pension Trust Board of Trustees, nor the Master Trust Board of Trustees abused their discretion when they denied plaintiff his early retirement benefits. Accordingly, defendants' motions for summary judgment 15 and 28 are GRANTED and plaintiff's motion for summary judgment 22 is DENIED. This case is dismissed. Signed on 9/28/2018 by Judge Ann L. Aiken. (ck)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

EUGENE KNUDSON,

Case No. 3:17-cv-00647-AA
OPINION AND ORDER

Plaintiff,

v.
OREGON SHEET METAL WORKERS
MASTER RETIREMENT FUND TRUST,
BOARD OF TRUSTEES OF OREGON
SHEET METAL WOKERS MASTER
RETIREMENT TRUST, EMPLOYERINDUSTRIAL SHEET METAL WORKERS
LOCAL NO. 16 PENSION TRUST, and BOARD
OF TRUSTEES OF THE EMPLOYERINDUSTRIAL SHEET METAL WORKERS
LOCAL NO. 16 PENSION TRUST
Defendants.

AIKEN, District Judge:
Plaintiff Eugene Knudson appeals the denial of his applications for early retirement
benefits. Plaintiff is currently employed as a welder at the Bonneville Power Administration
("BPA"). He sought benefits accrued during his years as a sheet metal worker from two pension
plans, the Employer-Industrial Sheet Metal Workers Local No. 16 Pension Trust ("Pension

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Trust") and the Oregon Sheet Metal Workers Master Retirement Fund Trust ("Master Trust").
Each Trust is governed by the Employee Retirement Income Security Act ("ERISA")1, has a
Master Plan, and is administered by a Board of Trustees. 2

Both plans require that early

retirement beneficiaries refrain from sheet metal work. When plaintiff applied to collect his
pension, both Boards determined that his work as a welder at BPA was sheet metal work, and
that he was ineligible for early retirement benefits. Plaintiff seeks review of these decisions.
Both plans grant discretion to their respective administrators to detennine eligibility and inte1pret
ambiguities in the plans. As explained in more detail below, because neither Board abused its
discretion, plaintiffs motion for summary judgment (doc. 22) is DENIED, and defendants'
motions for summary judgment (doc. 15 and doc. 28) are GRANTED.

BACKGROUND
Plaintiff has earned two sheet metal retirement pensions. From 1999-2004, plaintiffs
employer made contributions on his behalf to the Pension Trust, and between 1995-1998 and
2005-2012, plaintiff worked for an employer who contributed on his behalf to the Master Trust.
Plaintiff has been a member of the Sheet Metal Workers' International Association Local
16 since 1995. In his current position, he is also a member of the Plumbers and Steamfitters
Local 290 Union.
Since 2012, plaintiff has worked as a welder for BPA. Plaintiffs work is "primarily
fabricating, assembling and repairing bus in BPA switchyard and substations." Pension AR 3137. According to his job description, plaintiff also "performs all types of general welding on
1

A plan pmticipant can sue in federal court to "recover benefits due to him under the
tern1s of his plan, to enforce his rights under the terms of the plan, or to clarify his right to future
benefits under the terms of the plan." 29 U.S.C. § 1132(a)(l)(B).
2
Under both plans, plaintiff would be eligible for early retirement benefits if he retired
from sheet metal work before the age of 65. At age 65, he will be eligible for a normal
retirement pension.
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shop fabrications, steel, stainless steel, aluminum and chromium structures, trucks, dozers,
cranes, booms, shovel buckets, etc." He maintains the required BPA welding ce1iifications.
Buckley Dec. at 7.
On July 23, 2016, plaintiff applied to receive early retirement benefits from the Pension
Trust. The Pension Trust is a multi-employer benefit trust fund. Employers who have collective
bargaining agreements with the Local 16 Union contribute to the fund. The Pension Plan
provides for several forms of retirement benefits, including early retirement. The Board of
Trustees is the administrator of the Pension Trust and is empowered by the Pension Plan to
"administer the Plan, construe and interpret the provisions of the Plan and Trust Agreement, and
resolve all questions arising in the administration, construction, interpretation and application of
the plan." Pension AR 156.
Plaintiffs application was first considered and denied by the Pension Trust Pension
Application Review Committee. The Review Committee determined that plaintiff did not meet
the eligibility requirements for early retirement because his work as a welder "consitut[ed]
employment for wage or profit as a sheet metal worker" which was a disqualifying factor under
the Plan. Pension AR 18. Plaintiff appealed to the Pension Trust Board of Trustees, which
affirmed the Review Committee's decision.
Also on July 23, 2016, plaintiff applied to receive early retirement benefits from the
Master Trust. Like the Pension Trust, the Master Trust is a multi-employer benefit trust fund,
the Board of Trustees is the administrator, and it is governed by a Master Plan. The Master Plan
gives the Board of Trustees "full, absolute and unlimited power and authority" to "administer
and interpret" the plan, "construe or interpret the plan ... determine benefit eligibility, credits,
accrual, or entitlement; and to exercise any discretionary powers under the Plan as necessary or

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desirable[.]" Master AR 350.

The Master Trust Pension Application Review Committee

reviewed and denied plaintiffs application for early retirement benefits. The Review Committee
determined that the plaintiff did not meet the eligibility requirements to receive early retirement
benefits because he was working as a welder and had not refrained from "any employment
anywhere for wages or profit in the sheet metal industry." Master AR 35-37.
Plaintiff appealed, and the Master Trust Board of Trustees affirmed the Review
Committee's determination that the plaintiff was not eligible for early retirement benefits
because he was still working in the industry and had not retired.
Plaintiff then filed the present suit, challenging both denials of early retirement benefits.
He asserts that the Boards abused their discretion by dete1mining that he was not retired from
sheet metal work. Both defendants have moved for summary judgment in their favor, and
plaintiff filed a cross motion for summary judgment in his favor. Due to the similar nature of the
issues the Comt has consolidated consideration of the motions in a single order and opinion.
STANDARD OF REVIEW

A district court will review a plan administrator's decision to deny benefits de nova
unless the plan expressly gives the administrator discretion to determine eligibility or construe
the plan's provisions. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989);
Anderson v. Suburban Teamsters N. Ill. Pension, 588 F.3d 641, 646 (9th Cir. 2009). If the plan
administrator has discretion, a reviewing court will apply an abuse of discretion standard. Tapley
v. Locals 302 and 612 of Intern. Union of Operating Eng'rs-Employers Construction Indus. Ref.
Plan, 728 F.3d 1134, 1139 (9th Cir. 2013). Under this standard, a comt will closely consider the
tem1s of the plan but will give deference to the administrator's interpretation if it has a rational
justification. Id. A plan administrator abuses its discretion if it "construes provisions of a plan

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in a way that clearly conflicts with the plain language of the Plan, ... renders nugatory other
provisions of the Plan, ... or lacks any rational nexus to the primary purpose of the Plan." Id.
(internal citations omitted).
All patties have filed motions for summary judgment. Summary judgment is appropriate
when there are no genuine issues of material fact before the court and the moving party is
entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In
ERISA cases, "a motion for summary judgment is merely the conduit to bring the legal question
before the comt." Nolan v. Heald Coll., 551F.3d1148, 1154 (9th Cir. 2009).
DISCUSSION

At the outset, I note that both the Pension Trust and Master Trust Boards of Trnstees are
given discretion by their respective Plans.

Accordingly, I find that an abuse of discretion

standard ofreview is appropriate in this case. See Tapley, 728 F.3d at 1139.
The Pension Trust Pension Plan gives the Pension Trust Board of Trustees "full and
exclusive authority to administer the Plan, construe and interpret the provisions of the Plan and
Trust Agreement, and resolve all questions arising in the administration, construction,
interpretation and application of the Plan." Pension AR 156. Similarly, the Master Plan gives
the Master Trust Board of Trustees "full, absolute, and unlimited power and authority" to
"administer and interpret the Plan," "determine benefit eligibility" and "exercise any
discretionary powers under the Plan as necessary or desirable[.]" Master AR 350. The Master
Retirement Trust Agreement (1997 Restatement) reiterates that authority using the same terms.
Master AR 432.

This is precisely the type of language that "unambiguously confers

discretionary authority" to a plan administrator. Nolan, 551 F.3d at 1153.
A heightened level of scrutiny is not required here, as there is no structural conflict of

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interest on either Board. Structural conflicts of interest exist when a plan's administrator acts as
both the primary funding source and the adjudicator of benefits. Metro. Life Ins. Co. v. Glenn,
554 U.S. 105, 111 (2008). If a structural conflict of interest exists, the court will consider this as
a factor in its abuse of discretion analysis. Id
Here, the Boards are made up of both employee and employer representatives. The
Pension Plan Board of Trustees consists of three union representatives and three employer
representatives. The Master Trust Board of Trustees consists of four union and four employer
representatives. When, as in this case, "[t]he Trustees have no personal economic interest in the
decision to grant or deny benefits" and "the Board of Trustees consists of both employer and
employee representatives who determine employee eligibility" no conflict of interest exists.
Anderson, 588 F.3d at 648.
I.

Pension Trust

The Pension Trust Board of Trustees did not abuse its discretion when it determined that
plaintiff was not retired, and therefore not eligible to receive early retirement benefits. To be
eligible for early retirement benefits, the Pension Trust Plan requires, among other things, that an
applicant be retired. To be "retired" under the Pension Master Plan means that the applicant
must "cease and refrain from any employment anywhere for wages or profit as a sheet metal
worker." Pension AR 160. The phrase "sheet metal worker" is not defined in the Pension Trust
Master Plan. When the Review Committee denied plaintiffs application, it notified the plaintiff
by mail that he had not retired because "employment as a welder constitutes work as a sheet
metal worker." Pension AR 18.
Plaintiff appealed and argued that his welding work was significantly different from his
prior sheet metal work. He asserted that he was not working in the sheet metal shop at BP A and

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would be disciplined if he utilized tools in that shop. On appeal, the Pension Trust Board of
Trustees disagreed with plaintiff and upheld the Review Committee's denial. In its denial letter,
the Board noted that it:
acknowledge[s] that [plaintiff is] not working in the sheet metal shop at BPA. However,
this fact is not dispositive about whether you are working as a sheet metal worker. The
key for determining whether you are working as a sheet metal worker is the nature of
your employment and whether your employment is similar to the work performed by
other sheet metal workers.
Buckley Dec. at 6-8. The Board determined that the nature of plaintiffs welding work was
similar to other sheet metal workers. The Board gave several justifications to support this
determination including the "substantial similarities" between sheet metal and welding
ce1iifications, and the similarity in skill sets and tasks performed between plaintiff and workers
represented by the Local Sheet Metal Workers union. Id
The Board's determination that plaintiffs current employment constituted sheet metal
work was not an abuse of discretion. Plaintiff cites to Tapley to suppo1i his position that the
Board abused its discretion. In Tapley, the Trustees of a pension plan applied an overly broad
interpretation of the phrase ''.job classification" to plaintiffs seeking early retirement benefits.
Tapley, 728 F.3d at 1141. The court held that the Trustees abused their discretion when they
determined that a plaintiffs employment directing traffic as a highway flagger was in the same
job classification as his previous job as a skilled mechanic. Id. This interpretation, the court
said, was overly broad and essentially rendered the term "job classification" meaningless. Id.
Unlike in Tapley, here the Board's interpretation does not conflate two distinct skill sets
like highway road flagging and skilled mechanical work. Tapley, 728 F.3d at 1141. It does not
sweep too broadly and render the phrase "sheet metal worker" meaningless.

The Board's

dete1mination that welding bus and engaging in other general welding tasks is sheet metal work

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had a rational justification and was adequately explained in the denial letters. The Board relied
upon the similarities in required ce1iifications, tasks and skill sets between plaintiffs welding
responsibilities and sheet metal work.

The Board's decision fmihers the plan's purpose to

provide benefits for workers who have fully retired from sheet metal work and not to displace
cmTent sheet metal workers. Thus, the Board did not abuse its discretion and is entitled to
Summary Judgment in its favor.
II.

}.;faster Trust

Like the Pension Trust Board, the Master Trust Board of Trustees did not abuse its
discretion when it determined that plaintiff was not retired and therefore not eligible to receive
early retirement benefits. To be eligible for early retirement benefits, the Master Trust Plan
requires, among other things, that the applicant be retired. Under the Plan, to be retired an
applicant must "refrain from any employment anywhere for wages or profit in the sheet metal
industry." Master AR 353. Similar to the Pension Trust Plan, the Master Trust Plan does not
define the plll'ase "sheet metal industry."

The Master Trust Pension Application Review

Co=ittee considered plaintiffs application and detem1ined that the plaintiff was not retired
because his welding work was employment "for wages or profit in the sheet metal industry."
Master AR 36.
Plaintiff appealed and made the same arguments that he raised during his Pension Trust
appeal. He also highlighted that his welding work fell within the purview of the Plumbers and
Pipefitters Local 290 Union. The Master Trust Board of Trustees affirmed the Committee's
denial and notified plaintiff by mail of this decision. The Board dete1mined that plaintiff had not
retired within the meaning of the plan, and that his welding work constituted "employment for
profit in the sheet metal industry." Master AR 108.

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The Board outlined the several factors upon which it based its decision. It pointed to
plaintiff's continued involvement with the Local 16 union, the fact that BP A employs other sheet
metal workers within the same geographic jurisdiction, and noted that that plaintitrs work was
"substantially similar to work that other Local 16 members [were] performing." Id
The Board's decision that plaintiff's welding work was in the sheet metal industry was
not an abuse of discretion.

In addition to Tapley, plaintiff also relies upon Eisenrich v.

Minneapolis Retail Meat Cutters & Food Handlers Pension Plan to support his position. 574
F.3d 644, 650 (8th Cir. 2009). In that case, the reviewing court determined that a pension plan
administrator abused its discretion when it determined that a plaintill's employment as a baked
goods distributor was in the same "trade or craft" as his previous employment as a meat cutter.

Id.

At issue in that case was a Department of Labor regulation that the Board of Trustees

misapplied when it denied a plaintiff early retirement benefits. Id. Here, however, there was no
regulation for the Master Trust Board of Trustees to apply. The Board was simply exercising the
discretion given to it by the Master Plan to interpret and apply an ambiguous phrase.
When the Board explained its interpretation and decision to deny plaintiff's application, it
provided several rational justifications. The Board pointed to plaintiff's continued membership
in the sheet metal workers union and noted that the skills used by the plaintiff as a welder were
substantially similar to those used by sheet metal workers. Additionally, the Board's
determination furthers the plan's purpose to provide benefits for workers who have fully retired
from the industry and who are not displacing other sheet metal workers. Thus, the Board did not
abuse its discretion and is entitled to Summary Judgment in its favor.
Ill

II I

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CONCLUSION

Neither the Pension Trust Board of Trustees, nor the Master Trust Board of Trustees
abused their discretion when they denied plaintiff his early retirement benefits. Accordingly,
defendants' motions for summary judgment (doc. 15 and doc. 28) are GRANTED and plaintiffs
motion for summary judgment (doc. 22) is DENIED. This case is dismissed.
IT IS SO ORDERED.
Dated this 28th day of September 2018.

Ann Aiken
United States District Judge

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