Noorali Savani v. URS Professional Solutions, LLC , 592 F. App'x 166 ( 2014 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2512
NOORALI SAM SAVANI, individually and on behalf of others
similarly situated; ROBERT P. TAYLOR, JR., individually and
on behalf of others similarly situated,
Plaintiffs - Appellees,
v.
URS PROFESSIONAL SOLUTIONS, LLC, f/k/a Westinghouse Safety
Management Solutions, LLC, f/k/a Washington Safety
Management Solutions, LLC; URS PROFESSIONAL SOLUTIONS
PENSION PLAN, f/k/a Washington Safety Management Solutions,
LLC Pension Plan, f/k/a WSMS Pension Plan; URS ENERGY &
CONSTRUCTION, INC., f/k/a Washington Group International,
Inc.; ROGER ALLEN, as Trustee and Member of the Benefits now
Administrative Committee of URS Professional Solutions
Pension Plan; JULIE TSCHIDA BROWN, as Trustee and Member of
the Benefits now Administrative Committee of URS
Professional Solutions Pension Plan; DAVE HOLLAN, as Trustee
and Member of the Benefits now Administrative Committee of
URS Professional Solutions Pension Plan; DELOYD CAZIER, as
Trustee and Member of the Benefits now Administrative
Committee of URS Professional Solutions Pension Plan,
Defendants – Appellants,
and
WASHINGTON SAVANNAH RIVER COMPANY, LLC, f/k/a Westinghouse
Savannah River Company, LLC; WESTINGHOUSE SAFETY MANAGEMENT
SOLUTIONS, LLC PENSION PLAN; PAUL HARPER, as Trustee and
Member of the Benefits now Administrative Committee of URS
Professional Solutions Pension Plan; LEO SAIN, as Trustee of
Westinghouse Safety Management Solutions, LLC Pension Plan;
PRES RAHE, as Trustee of Westinghouse Safety Management
Solutions, LLC Pension Plan; WASHINGTON SAVANNAH RIVER
COMPANY'S PENSION PLAN; RALPH DISIBIO, as director of
Washington Safety Management Solution, LLC;
PAUL GREFENSTETTE, as Director of Washington Safety
Management Solutions, LLC; ROBERT PEDDE, as Director of
Washington Safety Management Solutions, LLC;
AMBROSE SCHWALLIE, as Director of Washington Safety
Management Solutions, LLC; WSMS PENSION PLAN, f/k/a
Westinghouse Savannah River Company-Bechtel Savannah River
Inc Pension Plan, f/k/a Westinghouse Safety Management
Solutions, LLC Pension Plan, f/k/a Washington Safety
Management Solutions, LLC Pension Plan; WASHINGTON SAFETY
MANAGEMENT SOLUTIONS, LLC; WASHINGTON SAFETY MANAGEMENT
SOLUTIONS, LLC PENSION PLAN; WASHINGTON GROUP INTERNATIONAL,
INC.,
Defendants.
Appeal from the United States District Court for the District of
South Carolina, at Aiken. J. Michelle Childs, District Judge.
(1:06-cv-02805-JMC)
Argued: September 16, 2014 Decided: November 17, 2014
Before WILKINSON, GREGORY, and KEENAN, Circuit Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the
opinion, in which Judge Wilkinson and Judge Keenan joined.
ARGUED: H. Douglas Hinson, ALSTON & BIRD, LLP, Washington,
D.C., for Appellants. Stanley G. Jackson, JACKSON LAW
OFFICES, Aiken, South Carolina, for Appellees. ON BRIEF:
Emily S. Costin, ALSTON & BIRD, LLP, Washington, D.C.;
Gray T. Culbreath, GALLIVAN, WHITE & BOYD, P.A., Columbia, South
Carolina, for Appellants.
Unpublished opinions are not binding precedent in this circuit.
2
GREGORY, Circuit Judge:
Noorali “Sam” Savani filed this class action under the
Employee Retirement Income Security Act (“ERISA”),
§ 502(a)(1)(B), 29 U.S.C. § 1132 (a)(1)(B)(2006), claiming that
Washington Safety Management Solutions, LLC’s (“WSMS”) 1
termination of an early retirement pension supplement violated
ERISA’s anti-cutback provision. As we held in the first appeal
of this case, the “clear terms” of the WSMS Pension Plan (the
“Plan”) “include the [early retirement pension supplement] in
the definition of ‘accrued benefit.’” Savani v. Wash. Safety
Mgmt. Solutions, LLC (Savani I), 474 F. App’x 310, 316 (4th Cir.
Mar. 20, 2012) (per curiam) (unpublished). In this second
appeal, WSMS argues that it may lawfully eliminate that early
retirement pension benefit as to another employee,
Robert Taylor, and a similarly situated subset of the class
(defined below). We again hold that the unambiguous terms of
the Plan clearly include the pension benefit at issue within the
Plan’s definition of “accrued benefit,” and that WSMS may not
lawfully eliminate the benefit. We therefore affirm the grant
of summary judgment to the plaintiffs-appellees.
1
WSMS is now called URS Professional Solutions, LLC, and
both WSMS and the appellees’ previous employer, Westinghouse
Savannah River Company (“WSRC”), are wholly owned subsidiaries
of a company called URS Energy & Construction. For ease of
reference and consistency with this Court’s prior opinion, this
memorandum refers only to WSMS and WSRC.
3
I.
While Savani was the focus of the first appeal, Taylor and
the subclass now take center stage. Much of the relevant
background is set forth in great detail in Savani I, 474 F.
App’x at 312-14, and is repeated below to the extent necessary.
Taylor, like Savani, was an employee of the Westinghouse
Savannah River Company (“WSRC”) in 1997 when WSMS was formed.
“At its inception, WSMS recruited a number of WSRC employees,
including Savani [and Taylor], to transfer to the newly formed
company.” Id. at 312. Taylor and the other WSRC employees
“were informed of the employee benefit plans available to newly
transferred employees.” Id. Taylor was then and remains a
participant in the Plan.
Prior to a 2004 amendment, the Plan provided in relevant
part: “‘Accrued Benefit’ means, as of any date of
determination, the normal retirement Pension computed under
Section 4.01(b) . . . less the WSRC Plan offset as described in
Section 4.13, plus any applicable supplements described in
Section 4.12 . . . .” Additionally, the Plan provided that an
“early retirement Pension shall be a deferred Pension beginning
on the first day following the Member’s Normal Retirement Date
and . . . shall be equal to his Accrued Benefit. However, the
Member may elect to receive an early retirement Pension
4
beginning before his Normal Retirement Date. . . .” Finally,
the Plan described the following supplemental benefit:
4.12 Supplemental Benefits
(a) If a Member who:
(i) otherwise satisfies the requirements for a Pension
under this Plan; and
(ii) has at least one year of service with WSMS; and
(iii) transferred to the Plan from an Affiliated
Employer on or before January 1, 1998 or transfers to
the Plan from WSRC; and
(iv) retires before his Normal Retirement Age from
active service on or before October 1, 1998,
he shall be entitled to a monthly supplement (which
shall commence with the first Pension payment under
the Plan on account of such retirement and the last
payment shall be in the month preceding the Member’s
attainment of Normal Retirement Age) equal to the
following: [omitted] 2
“On December 28, 2004, the Plan’s benefits committee
amended the Plan to eliminate § 4.12(a), which granted a $700
monthly benefit to Plan members electing to take early
retirement on or after January 1, 2005.” Savani I, 474 F. App’x
at 313. Later, on January 3, 2006, the benefits committee
further amended the Plan, effective December 31, 2005 (“the 2005
Amendment”). Among other things, the 2005 Amendment included
the following provision: “Notwithstanding anything to the
2
As discussed in our first opinion, § 4.12(b) of the Plan
sets forth an additional $200 benefit payable upon reaching
Normal Retirement Age. The $200 benefit is not at issue for
purposes of the current appeal.
5
contrary in this Plan, a Member’s Accrued Benefit shall be
‘frozen’ as of December 31, 2005 and shall not increase
thereafter.” Further, it provided: “Notwithstanding anything
to the contrary in this Plan, effective December 31, 2005, no
additional Credited Service will be awarded or earned under the
Plan for any purpose. In other words, all Credited Service will
be ‘frozen’ as of December 31, 2005.” The 2005 Amendment also
“added the following sentence at the end” of § 1.13 of the Plan:
“Although the Plan is frozen as of December 31, 2005, an
Employee shall continue to earn Eligibility Service in
accordance with the terms of the Plan for purposes of
determining eligibility for certain benefits and eligibility for
a vested Pension.”
During the first appeal of this case, Savani successfully
challenged the 2004 elimination of § 4.12(a) as a violation of
ERISA’s anti-cutback provision. See id. at 316 (“[W]e hold that
the Plan’s clear terms include the § 4.12(a) supplement in the
definition of accrued benefits.”). The 2005 Amendment was not
directly at issue at that time.
Upon remand, the district court certified Savani’s case as
a class action. Savani is the lead plaintiff for the class,
which is defined to be:
Employees of Washington Safety Management Solutions,
LLC, formerly Westinghouse Safety Management
Solutions, LLC [collectively “WSMS”] who (1) are
6
members of the WSMS Plan, (2) have at least one year
of service with WSMS, and (3) transferred to the Plan
from an Affiliated Employer as defined in § 1.02 of
the Plan on or before January 1, 1998, or transferred
to the Plan from Washington Savannah River Company,
LLC, formerly, Westinghouse Savannah River Company,
LLC [collectively, “WSRC”].
During the course of the district court proceedings, WSMS
“opposed paying certain members of the above class who after
December 31, 2005 have or may have become eligible for § 4.12(a)
WSMS [Plan] benefits as related to freeze of benefits as of
December 31, 2005.” The appellees therefore moved to add Taylor
as a party and subclass representative, and the district court
granted the motion. Thus, Taylor is the lead plaintiff of the
subclass, which is defined to be:
All members of the Class defined above who, as of
December 21, 2005, either (1) did not have 15 total
years of service with WSMS or an Affiliated Employer
as defined in § 1.02 of the Plan, or (2) was not 50
years of age, or (3) did not meet the 25 years of
service and age 45 but less than 50 years of age
requirements for an Optional Retirement Pension as
defined in § 4.04 of the WSMS Plan.
On July 31, 2012, the parties filed cross motions for
summary judgment on the issue of whether the 2005 Amendment
resulted in the lawful elimination of the § 4.12(a) benefit for
Taylor and the members of the subclass. In considering the
parties’ motions, the district court observed that the 2005
Amendment permitted Plan members to continue to earn Eligibility
Service years in order to determine the members’ “eligibility
7
for certain benefits and eligibility for a vested Pension.” In
light of the unambiguous language of the 2005 Amendment, as well
as this Circuit’s prior holding that the elimination of the
§ 4.12(a) supplement violated ERISA’s anti-cutback provision,
the district court granted summary judgment in favor of Taylor
and the subclass members and held that they are entitled to
receive the supplement. WSMS subsequently filed a motion to
remand the matter to the Plan’s benefits committee, or in the
alternative, for the district court to reconsider its summary
judgment ruling. WSMS argued that the district court had “erred
by not remanding the case back to the Committee for an initial
interpretation of the language of the 2005 Amendment.” It
argued in the alternative that the district court had
misconstrued the nature of the parties’ dispute. The district
court denied the motion, reasoning that it had interpreted
unambiguous Plan language, and that remand “would be futile
because a different interpretation of this clear language would
be an abuse of the committee’s discretion.” On December 13,
2013, WSMS timely filed this appeal.
II.
On appeal, the WSMS argues that Taylor and the members of
the subclass are not eligible for the § 4.12(a) benefit because
they did not satisfy the requisite eligibility requirements for
8
the benefit prior to the effective date of the 2005 Amendment.
Alternatively, the WSMS argues that the district court erred by
failing to remand this matter to the Plan’s benefits committee.
A.
We review a court’s order granting summary judgment de
novo. United McGill Corp. v. Stinnett, 154 F.3d 168, 170 (4th
Cir. 1998). And “[i]n an appeal under ERISA, we . . . employ[]
the same standards governing the district court’s review of the
plan administrator’s decision.” Williams v. Metro. Life. Ins.
Co., 609 F.3d 622, 629 (4th Cir. 2010). Where “the plan
expressly grants the plan administrator discretionary authority
to construe the provisions, the administrator’s decision is
reviewed for abuse of discretion.” United McGill Corp., 154
F.3d at 170 (citing Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 115 (1989)). “Under this deferential standard, ‘the
administrator or fiduciary’s decision will not be disturbed if
it is reasonable, even if this court would have come to a
different conclusion independently.’” Id. (quoting Ellis v.
Metro. Life Ins. Co., 126 F.3d 228, 232 (4th Cir. 1997)). Here,
the Plan grants the benefits committee “total and complete
discretion to interpret the Plan.” But “even as an ERISA plan
confers discretion in its administrator to interpret the plan,
the administrator is not free to alter the terms of the plan or
to construe unambiguous terms other than as written.” Colucci
9
v. Agfa Corp. Severance Pay Plan, 431 F.3d 170, 176 (4th Cir.
2005), abrogated on other grounds by Champion v. Black & Decker
(U.S.), Inc., 550 F.3d 353 (4th Cir. 2008). The discretionary
authority to interpret a plan “is not implicated . . . [where]
the terms of the plan itself are clear.” Kress v. Food Emp’rs
Labor Relations Ass’n, 391 F.3d 563, 567 (4th Cir. 2010).
B.
WSMS argues that because Taylor and the members of the
subclass did not satisfy the age and service eligibility
requirements for the § 4.12(a) benefit prior to the effective
date of the 2005 Amendment, they never accrued the benefit.
Thus, the argument goes, the elimination of the benefit for
Taylor and the subclass does not constitute an unlawful cutback
of accrued benefits. This argument does not square with our
previous holding in this case that the unambiguous language of
the Plan’s definition of accrued benefit includes the § 4.12(a)
benefit. Savani I, 474 F. App’x at 315-16.
Under the law of the case doctrine, “when a court decides
upon a rule of law, that decision should continue to govern the
same issues in subsequent stages in the same case.” TFWS, Inc.
v. Franchot, 572 F.3d 186, 191 (4th Cir. 2009) (quoting United
States v. Aramony, 166 F.3d 655, 661 (4th Cir. 1991)).
Accordingly,
10
once the decision of an appellate court establishes
the law of the case, it “must be followed in all
subsequent proceedings in the same case in the trial
court or on a later appeal [] unless: (1) a
subsequent trial produces substantially different
evidence, (2) controlling authority has since made a
contrary decision of law applicable to the issue, or
(3) the prior decision was clearly erroneous and would
work manifest injustice.”
Id. (quoting Aramony, 166 F.3d at 661) (alteration in original).
Here, the parties have not presented substantially different
evidence, we are aware of no new controlling authority, and WSMS
has not argued that our prior decision was clearly erroneous.
Therefore, our analysis must be guided by our prior holding that
the $700 monthly supplement set forth in § 4.12(a) of the Plan
is an accrued benefit.
There is no dispute that an employer sponsored retirement
plan cannot eliminate an “accrued benefit” without violating
ERISA’s anti-cutback provision. 29 U.S.C. § 1054(g)(1).
Importantly, “ERISA defines ‘accrued benefit’ as ‘. . . the
employee’s accrued benefit determined under the plan and . . .
expressed in the form of an annual benefit commencing at normal
retirement age . . . .’” Savani I, 474 F. App’x at 315 (quoting
26 U.S.C. § 411(a)(7)(A)(i) (2010)). This statutory definition
of an accrued benefit is “a signpost, directing us to look at
the terms of the plan at issue.” Bd. of Trs. of the Sheet Metal
Workers’ Nat’l Pension Fund v. Comm’r, 318 F.3d 599, 602-03 (4th
Cir. 2003) (emphasis added). As we previously held, the
11
§ 4.12(a) benefit is an accrued benefit. Savani I, 474 F. App’x
at 316. Because Taylor and the members of the subclass can or
already do satisfy the requisite eligibility requirements for
the § 4.12(a) benefit, WSMS may not lawfully eliminate that
benefit as to Taylor and the subclass.
WSMS argues that Taylor and the members of the subclass had
a mere, unprotected expectation of receiving the § 4.12(a)
benefit because they did not satisfy the age and service
requirements prior to December 31, 2005. In advancing this
argument, WSMS relies heavily on the Eleventh Circuit’s ruling
in Cinotto v. Delta Air Lines, Inc., 674 F.3d 1285 (11th Cir.
2012). There, part of the Delta retirement plan definition of
“Accrued Benefit” stated:
No Participant shall have an Accrued Benefit based on
future or projected service or Earnings regardless of
the use of future dates by the Plan. Such future
dates and the result of projected service on future
Earnings on a Participant’s potential retirement
benefit are not part of the Participant’s Accrued
Benefit.
Cinotto, 674 F.3d at 1287-88. The Delta plan, like the Plan in
this case, froze pension benefits with an amendment that
provided: “Effective December 31, 2005, all benefits under the
Plan are frozen for all Participants and there shall be no
further accruals of benefits under this plan after that date.”
Id. at 1289. The amendment “also added this language to the end
of the [Delta] Plan’s definition of ‘Accrued Benefit’: ‘A
12
Participant shall not accrue any additional benefits under the
Plan after December 31, 2005.’” Id. Under the amendment, “no
additional months of service or earnings would be taken into
account in calculating either [an employee’s] retirement or
termination benefit under the [Delta] Plan.” Id. As a result
of the Delta plan language, the Eleventh Circuit held that the
plaintiff, who had not reached the age required to receive the
benefit at issue before December 31, 2005, “had at most an
expectation of a future accrual.” Id. at 1297.
Unlike the amendment to the Delta plan, the 2005 Amendment
to the Plan at issue here explicitly incorporated future service
into the calculation of an accrued benefit. Indeed, the 2005
Amendment stated that Plan members would continue to earn
Eligibility Service years “to determin[e] eligibility for
certain benefits,” including the § 4.12(a) benefit. The
unambiguous terms of the Plan provide that Eligibility Service
years determine whether a Member “otherwise satisfies the
requirements for a Pension under this Plan” such that he becomes
eligible for the § 4.12(a) $700 supplement. 3 Accordingly, the
appellants’ reliance on Cinotto -- which involved a pension plan
3
Pensions include, for example, the normal retirement
pension set forth in Plan § 4.01, the early retirement pension
set forth in Plan § 4.03, and the optional retirement pension
set forth in Plan § 4.04. Each of these pensions references
“Eligibility Service.”
13
with a materially different definition of an “accrued benefit” -
- is misplaced. See Sheet Metal Workers’ Nat’l Pension Fund v.
Comm’r, 318 F.3d at 602-03 (stating that courts “look at the
terms of the plan at issue”).
WSMS also argues that the district court should have
remanded this matter to the benefits committee because the
reference to “certain benefits” in the Plan’s definition of
“Eligibility Service” is ambiguous. Specifically, WSMS contends
that it is unclear whether the term “certain benefits”
encompasses the § 4.12(a) benefit. This argument is unavailing.
Before the 2005 Amendment, the definition of “Eligibility
Service” included a single reference to “certain benefits,” and
the 2005 Amendment added a second reference to “certain
benefits.” It is undisputed that the single, pre-2005 Amendment
reference to “certain benefits” included the § 4.12(a) benefit.
To credit WSMS’s ambiguity argument would require a finding that
the second use of the phrase means something different than the
first. There is no valid reason for the two uses of the same
term within the same definition to have different meanings.
Rather, the language of the 2005 Amendment is clear: Plan
members may continue to earn Eligibility Service years for
certain benefits, including the § 4.12(a) benefit. The benefits
committee’s discretion is not implicated given the unambiguous
language of the amendment. Kress, 391 F.2d at 567.
14
Accordingly, it was not error for the district court to decline
to remand the matter.
Somewhat relatedly, WSMS argues that “Fourth Circuit law is
clear that an ERISA plan participant is ‘required’ to exhaust
his/her administrative remedies before bringing suit.” It
contends that the original lead plaintiff, Savani, “never
challenged the meaning of ‘certain benefits’ of ‘Eligibility
Service’ in the Freeze Amendment,” and that “Taylor has never
made any claim to the” benefits committee. Therefore, WSMS
continues, because the district court’s summary judgment ruling
involved the interpretation of the Plan’s terms, the court
should have first remanded the matter to the benefits committee
for it to interpret the Plan in the first instance. We need not
decide whether any procedural error has occurred. In reaching
its decision, the district court did not engage in any novel
interpretation of the Plan’s language. Rather, the law of this
case is that the Plan’s definition of accrued benefit includes
the § 4.12(a) benefit, and as discussed above, the term “certain
benefits” unambiguously encompasses the § 4.12(a) benefit.
Thus, the benefits committee’s authority to interpret the Plan
is not implicated. See Kress, 391 F.2d at 567.
Finally, although the parties devote a substantial amount
of their briefing to whether the § 4.12(a) benefit is an “early
retirement benefit” as that term is defined in the applicable
15
regulations, we need not resolve the issue. Regardless of how
the benefit is characterized from a statutory perspective, the
fact remains -- however much WSMS might wish to deny it –- that
the specific language of the WSMS Plan incorporates the
§ 4.12(a) benefit into the definition of “accrued benefit.” And
“[w]hile we have held that unfunded, contingent early retirement
benefits or severance payments are not secured by ERISA itself,
the drafters of a retirement plan may choose to define any
benefits as accrued or vested, and thereby trigger ERISA’s
protections.” Savani I., 474 F. App’x at 314 n.3 (citing Pierce
v. Sec. Trust Life Ins. Co., 979, F.2d 23 (4th Cir. 1992)); see
id. at 316 (“Stand-alone, ancillary welfare benefits generally
are not independently protected by ERISA. Here, however, the
Plan plainly incorporated . . . [§ 4.12(a)] into its definition
of ‘accrued benefit.’” (citation omitted)). Because WSMS made
the choice to include the § 4.12(a) benefit as part of the
Plan’s accrued benefit, it is protected under the anti-cutback
provision of ERISA. The WSMS must accept the consequences of
that choice.
III.
We reaffirm our holding that the Plan’s clear terms include
the § 4.12(a) supplement in the definition of “accrued benefit.”
Taylor and the subclass members are thus entitled to receive
16
that benefit so long as they satisfy the age and service
requirements if and when they elect early retirement. For the
foregoing reasons, the judgment of the district court is
AFFIRMED.
17