Yates v. UMWA 1974 Pension Plan ( 2006 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LESLIE O. YATES, 
Plaintiff-Appellee,
v.  No. 05-2224
UMWA 1974 PENSION PLAN,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Virginia, at Big Stone Gap.
Glen M. Williams, Senior District Judge.
(CA-03-00080-GMW)
Argued: September 20, 2006
Decided: December 4, 2006
Before MICHAEL, Circuit Judge, N. Carlton TILLEY, Jr., Chief
United States District Judge for the Middle District of North
Carolina, sitting by designation, and Thomas E. JOHNSTON,
United States District Judge for the Southern District of West
Virginia, sitting by designation.
Reversed and remanded by published opinion. Judge Michael wrote
the opinion, in which Judge Tilley and Judge Johnston joined.
COUNSEL
ARGUED: Kathleen Marie Dowd, UNITED MINE WORKERS OF
AMERICA, Health and Retirement Funds, Washington, D.C., for
Appellant. Jeffrey Lynn Elkins, ADKINS, ELKINS & HUNNICUTT,
2 YATES v. UMWA 1974 PENSION PLAN
P.C., Norton, Virginia, for Appellee. ON BRIEF: Glenda Sullivan
Finch, Deputy General Counsel, UNITED MINE WORKERS OF
AMERICA, Health and Retirement Funds, Washington, D.C., for
Appellant.
OPINION
MICHAEL, Circuit Judge:
The Trustees of the United Mine Workers of America (UMWA)
1974 Pension Plan (1974 Pension Plan or Plan) denied Leslie Yates
service credit on his pension for years when his employer, Erwin Sup-
ply and Hardware Company, Inc. (Erwin Supply), was not a signatory
to a collective bargaining agreement that provided for pension bene-
fits. Yates sued the Plan, and the district court awarded him a sum-
mary judgment that provided the service credit. The court arrived at
its decision by importing the imputed liability provisions for a "con-
trolled group of corporations" from the Coal Industry Retiree Health
Benefit Act of 1992 (the Coal Act), 26 U.S.C. §§ 9701-9722. The
court thus imputed to Erwin Supply the status of its sister company,
Clinchfield Coal Corporation (Clinchfield), as a signer of the 1950
National Bituminous Coal Wage Agreement (NBCWA). This
imputed signatory status for Erwin Supply, the court held, placed
Yates under the terms of the 1950 NBCWA, which provided for pen-
sion benefits and entitled Yates to service credit for the disputed
period. Because the Coal Act relates to retiree health benefits and
does not apply to pension benefits, its imputed liability provisions
cannot be used here. We therefore reverse.
I.
Yates worked in the coal fields as a truck driver for over forty
years, delivering supplies to various mining operations. He was
employed by Erwin Supply from September 1957 until early Decem-
ber 1969, with two years off for military service. Fifty-one percent of
the stock of Erwin Supply was owned by a family named Erwin and
forty-nine percent by Clinchfield until Erwin Supply was sold to the
Pittston Company (Pittston) on October 31, 1958. Erwin Supply went
YATES v. UMWA 1974 PENSION PLAN 3
out of business on December 31, 1969, and a few days earlier, on
December 16, 1969, Yates was hired by Clinchfield, a wholly-owned
subsidiary of Pittston. Yates delivered mine supplies out of a Clinch-
field warehouse until his retirement from the company on April 30,
2001.
Upon his retirement Yates applied for a pension under the UMWA
1974 Pension Plan, which was established pursuant to the 1974
NBCWA, the central collective bargaining agreement between coal
operators and the UMWA. The Plan, which is a continuation of the
benefits program established under the UMWA Welfare and Retire-
ment Fund of 1950, is funded by contributions from employer-
signatories to an NBCWA or any other agreement requiring pension
contributions. The Plan’s Director of Eligibility Services notified
Yates on June 18, 2001, that his application had been approved with
credit for 32.75 years of service, beginning April 1, 1968. Yates was
given credit for his years of service with Clinchfield, which was a sig-
natory to NBCWAs that provided for pension coverage. Yates was
denied credit for much of his time with Erwin Supply, particularly
from September 1957 through March 1968, a period when Erwin
Supply’s separate collective bargaining agreement with the UMWA
did not provide for pension contributions or benefits. Yates was given
some credit for service with Erwin Supply, beginning April 1, 1968,
when Erwin Supply became a party to the NBCWA shortly before it
closed its business.
Yates filed an internal appeal with the Plan to challenge the denial
of service credit for the bulk of his years of employment by Erwin
Supply. The Plan Trustees ultimately upheld the denial of credit.
Yates then filed an action against the 1974 Pension Plan in the U.S.
District Court for the Western District of Virginia, alleging that the
Trustees abused their discretion by denying this credit. The claim
arose under the Employee Retirement Income Security Act of 1974,
29 U.S.C. § 1132(a)(1)(B). Yates moved for summary judgment,
pointing out that Erwin Supply and Clinchfield were brother-sister
companies, both wholly owned by Pittston, and that Clinchfield and
Pittston were NBCWA signatories. He claimed that his UMWA mem-
bership and his employment by Erwin Supply, which provided an
essential mine supply function for its sister corporation, Clinchfield,
4 YATES v. UMWA 1974 PENSION PLAN
qualified his Erwin Supply service for pension coverage pursuant to
NBCWAs signed by Clinchfield and Pittston.
The district court granted Yates’s motion for summary judgment
and held that the Plan Trustees were required to allow him service
credit for the September 9, 1957, to March 31, 1968, period of his
employment with Erwin Supply. In explaining its decision, the court
recognized that Yates’s eligibility for additional service credit
depended on whether he had "worked [during the contested period]
for an employer who signed a[n] NBCWA." J.A. 354. The court also
recognized that Erwin Supply was not an NBCWA signatory during
the contested period, but the court overcame this hurdle by importing
a concept from the Coal Act, a federal statute passed to fund health
care benefits for retired coal miners. Under the Coal Act any corpora-
tion in a "parent-subsidiary controlled group" may be liable for the
health care premiums due under the Act from any NBCWA signatory
in the corporate family. The district court held that because Erwin
Supply, Clinchfield, and Pittston were all part of the same corporate
group, Clinchfield’s signatory status would be imputed to Erwin Sup-
ply. As a result, Yates’s employment by Erwin Supply would be
treated as employment by an NBCWA signatory for pension credit
purposes. The Plan appeals the award of summary judgment to Yates.
II.
A.
We review de novo the district court’s grant of summary judgment.
Lockhart v. United Mine Workers 1974 Pension Trust, 5 F.3d 74, 77
(4th Cir. 1995). That venerable statement, however, begs the question
of what standard we use in reviewing the Plan Trustees’ decision to
deny Yates certain service credit on his pension. The Plan gives the
Trustees or other "properly designated" fiduciaries the power of "full
and final determination as to all issues concerning eligibility for bene-
fits." J.A. 239. Accordingly, we review the Trustees’ decision for
abuse of discretion. Lockhart, 5 F.3d at 77.
B.
The Plan contends that the Trustees did not abuse their discretion
in denying pension credit to Yates for his time with Erwin Supply
YATES v. UMWA 1974 PENSION PLAN 5
while it was not a signatory to a collective bargaining agreement that
provided for benefits under the 1974 Plan or its predecessor. The Plan
also contends that the Coal Act, which deals with health benefits, can-
not be used to deem Erwin Supply an NBCWA signatory in order to
award Yates the extra pension credit. We agree with the Plan.
The Plan prescribes the eligibility requirements for pension bene-
fits paid by the 1974 Pension Trust. Yates seeks pension credit for his
work for Erwin Supply between September 9, 1957, and March 31,
1968. Under the terms of the Plan a participant can receive credit for
"signatory service" prior to 1978 only for work performed as an
employee "in a classified job for an Employer signatory to the bitumi-
nous coal wage agreement then in effect." J.A. 228. For purposes of
this case, the only relevant pre-1978 wage agreement would be the
1950 NBCWA (including its amended versions). Erwin Supply, how-
ever, was not a signatory to the 1950 NBCWA, except for a short
period beginning April 1, 1968. Prior to April 1968 Erwin Supply’s
employees were represented by District 50 of the UMWA, and Erwin
Supply and District 50 entered into a separate collective bargaining
agreement to cover the company’s truck drivers and warehouse
employees. The Erwin Supply-District 50 agreement did not provide
for pension benefits of any kind; in particular, it did not provide for
pensions under the 1950 Welfare and Retirement Fund, the predeces-
sor to the 1974 Plan. There is thus no contractual basis for awarding
Yates pension credit for his employment with Erwin Supply prior to
April 1, 1968.
The district court got around the contractual barrier by borrowing
rules from the Coal Act to deem Erwin Supply a signatory to the 1950
NBCWA and extend Yates’s pension coverage under the Plan. The
Coal Act, however, does not apply to pension benefits. Congress
passed the Coal Act in 1992 "to alleviate a crisis in the funding of
[retired miners’] health benefits that engulfed the coal industry in the
late 1980s." A.T. Massey Coal Co., Inc. v. Massanari, 305 F.3d 226,
228 (4th Cir. 2002). The Act merged certain UMWA health benefit
plans (or trusts) into a Combined Fund designed to provide health
benefits to retirees. 26 U.S.C. § 9702(a). The Combined Fund is
financed by annual premiums assessed against current or former "sig-
natory operators," that is, operators who signed an NBCWA requiring
contributions to the earlier health benefit plans. A.T. Massey, 305 F.3d
6 YATES v. UMWA 1974 PENSION PLAN
at 231; 26 U.S.C. §§ 9701(b)(1), (b)(3) & (c)(1). The Act also makes
certain "related person[s] to a signatory operator" liable for a signa-
tory operator’s premiums. 26 U.S.C. § 9704(a). A "related person"
includes a corporate member of the "controlled group of corporations"
that includes the signatory operator. Id. § 9701(c)(2). In turn, a "con-
trolled group of corporations" includes a "parent-subsidiary controlled
group," 26 U.S.C. § 1563(a)(1), making members of the parent-
subsidiary group "related persons" who may be liable under the Coal
Act.
The district court imported the Coal Act’s scheme for assessing lia-
bility for health care benefits into the pension context. Thus, the court
determined that Erwin Supply, Clinchfield, and Pittston’s corporate
relationship (as members of the Pittston parent-subsidiary controlled
group) was sufficient to impute signatory status to Erwin Supply on
the 1950 NBCWA, which was in fact signed by Clinchfield. Based on
this imputed signatory status for Erwin Supply, the court held that
Yates performed classified work (work in or about the mines) under
the 1950 NBCWA, making him eligible for pension credit for his
Erwin Supply employment between September 9, 1957, and March
31, 1968. The district court erred. The Coal Act has nothing to do
with pension benefits for miners. Rather, as Congress said, the Coal
Act was passed (a) "to remedy problems with the provision and fund-
ing of health care benefits with respect to the beneficiaries of mul-
tiemployer benefit plans that provide health care benefits to retirees
in the coal industry," and (b) "to provide for the continuation of a pri-
vately financed self-sufficient program for the delivery of health care
benefits to the beneficiaries of such plans." Coal Industry Retiree
Health Benefit Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776,
3037. The Coal Act’s imputed liability provisions thus relate to the
funding of health care benefits. The 1974 Pension Plan remains "a
creature solely of contract." Appellant’s Br. at 26.
Yates argues that, the Coal Act aside, the decision in Mullins v.
Mullins, 537 F. Supp. 840, 844 (W.D. Va. 1982), aff’d 701 F.2d 166(4th Cir. 1983), entitles him to receive the additional pension credit.
This is so, Yates contends, because the inquiry in Mullins, a case
dealing with pension eligibility under the 1950 NBCWA, focuses
only on whether the retiree performed classified work. This argument
is without merit. While the dispute in Mullins did center on what
YATES v. UMWA 1974 PENSION PLAN 7
counts as classified work, that opinion does not dispense with the
1974 Plan’s condition that a retiree receives pension credit only for
service with a signatory to an NBCWA or some other relevant wage
agreement. The employer in Mullins was Clinchfield, specifically rec-
ognized in that opinion as "a signatory party to all Coal Wage Agree-
ments with the United Mine Workers from 1950 through 1968." 537
F. Supp. at 843. Nothing in Mullins affects the dispositive fact in this
case: Erwin Supply was not a signatory to the 1950 NBCWA or any
other wage agreement that would entitle Yates to receive pension
credit for his work from September 9, 1957, to March 31, 1968. In
short, Yates was not contractually entitled to the additional credit.
For the foregoing reasons, we conclude that the Trustees of the
1974 Plan did not abuse their discretion in awarding Yates only 32.75
years of signatory service credit. We therefore reverse the district
court’s grant of partial summary judgment to Yates and remand for
summary judgment to be entered in favor of the UMWA 1974 Pen-
sion Plan.
REVERSED AND REMANDED