William Pilger v. William Sweeney , 725 F.3d 922 ( 2013 )

United States Court of Appeals
For the Eighth Circuit
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No. 12-2698
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William Pilger; James Brown; Kerman Copeland; Craig Davey; Eugene Hall;
Michael Henderson; Lawrence Luebrecht; Donald Riley; Gary Stinson; Stanley
Stinson; Presley Stoneking; Garold Woodley; Ronald Wyrick
lllllllllllllllllllll Plaintiffs - Appellants
v.
William T. Sweeney, Administrator for the Board of Trustees of the Plumbers and
Pipefitters; Plumbers and Pipefitters National Pension Fund; Board of Trustees of
the Plumbers and Pipefitters National Pension Fund
lllllllllllllllllllll Defendants - Appellees
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Appeal from the United States District Court
for the Southern District of Iowa - Davenport
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Submitted: April 9, 2013
Filed: August 8, 2013
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Before LOKEN and GRUENDER, Circuit Judges, and PHILLIPS,1 District Judge.
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PHILLIPS, District Judge.
1
The Honorable Beth Phillips, United States District Judge for the Western
District of Missouri, sitting by designation.
Plaintiffs are 13 retired union plumbers who were members of the former Iowa
Local 212. Plaintiffs receive retirement benefits from the Plumbers and Pipefitters
National Pension Fund (“PPNPF”). Defendants are the PPNPF, the PPNPF’s Board
of Trustees, and the Board’s Administrator (collectively, “Defendants”).
In 2009, Defendants realized that, for a number of years, they had paid
Plaintiffs excess retirement benefits. Defendants reduced Plaintiffs’ monthly benefit
payments to the correct amounts, and then began to recoup the previous
overpayments through withholding. Plaintiffs filed this lawsuit to challenge
Defendants’ actions. Plaintiffs allege three counts under the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. The district court2
granted Defendants summary judgment on each count. Plaintiffs appeal. We affirm.
I.
This case arises from a labor union’s merger of three Iowa local affiliates. The
United Association of Journeymen and Apprentices of the Plumbing and Pipefitting
Industry (“United Association”) is a large international labor union, and it is affiliated
with local labor unions across the United States and Canada. United Association
operates the PPNPF. The PPNPF is a defined-benefit pension fund. More than 4,000
employers pay contributions into the PPNPF, and it provides benefits to some 42,000
retirees. The PPNPF’s Board and its Administrator manage the PPNPF.
In 1998, United Association began merging its local affiliates. As is relevant
here, it sought to merge Iowa Locals 66, 125, and 212. Plaintiffs were members of
2
The Honorable Charles R. Wolle, Senior United States District Judge for the
Southern District of Iowa.
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Local 212, and they vigorously opposed any merger. Nonetheless, in May 1998,
United Association merged both Local 212 and Local 66 into Local 125.
Prior to the merger, the three local unions each paid contributions into the
PPNPF based on the hours their members worked. Local 212 contributed at a rate of
$1.00/hour, whereas both Local 66 and Local 125 contributed at a rate of $1.75/hour.
After the merger, Defendants reviewed and modified these policies. Initially,
Defendants raised Local 212’s contribution rate to $1.05/hour and both Locals 66’s
and 125’s rate to $1.95/hour. Then, effective August 1, 1999, Defendants
standardized these rates, so that Local 212 also contributed $1.95/hour.
In addition to paying contributions into the PPNPF, Local 212 also operated
its own pension fund. Thus, the merger presented Local 212 with a choice: either
merge its fund into the PPNPF, or terminate its fund and distribute the proceeds.
Ultimately, Local 212 opted to terminate and distribute.
This decision concerned Defendants. Because Local 212 did not merge its
pension fund, Defendants feared the PPNPF had incurred additional liabilities – that
is, benefits owed to Local 212 members based on the $1.95/hour rate – without
acquiring additional assets. As a result, Defendants revised the formula for
calculating Local 212’s retirement benefits. This revision concerned the contribution
rate for its members’ “past service.”3 Defendants decided to credit their past service
at $1.05/hour, rather than at the increased rate of $1.95/hour. Thus, for Local 212,
Defendants applied the $1.95/hour rate only prospectively to future service. In
contrast, for Locals 66 and 125, Defendants applied the $1.95/hour rate both
retroactively to past service and prospectively to future service.
3
“Past service” means hours Local 212 members worked prior to August 1,
1999, when Defendants raised the contribution rate to $1.95/hour.
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Some Plaintiffs appealed Defendants’ decision under the PPNPF’s
administrative review procedure. Defendants denied these appeals on July 14, 2000.
No Plaintiff filed a lawsuit for judicial review of this denial.
Thus, Defendants’ policy was clear: the contribution rate for Local 212’s past
service was $1.05/hour. Nonetheless, Defendants incorrectly used the $1.95/hour rate
to calculate Plaintiffs’ retirement benefits. As a result, Defendants responded to
Plaintiffs’ benefit inquiries with inflated figures. Some Plaintiffs decided to retire
based on these inaccurate figures. Similarly, once Plaintiffs retired, Defendants paid
them excess monthly benefits. Each Plaintiff received between $1,232 and $69,540
in total excess benefits, and one Plaintiff received excess payments for more than
seven years.
In 2009, Defendants realized the error, notified Plaintiffs, and took corrective
action. First, Defendants reduced each Plaintiff’s monthly benefit payment to the
correct amount. Then, Defendants asked each Plaintiff to reimburse the PPNPF for
the previous overpayments. If a Plaintiff could not, Defendants would recoup the
overpayments through withholding. Ultimately, Defendants began withholding 25%
from each Plaintiff’s monthly benefit check. Plaintiffs appealed these actions under
the PPNPF’s review procedure. Defendants denied Plaintiffs’ appeals on
September 29, 2010.
Plaintiffs filed the instant lawsuit on February 15, 2011. Plaintiffs allege three
counts under ERISA. The district court granted Defendants summary judgment on
each count. The district court held that the statute of limitations barred Plaintiffs’
claims, and that each claim also failed on its merits. Plaintiffs appeal.
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II.
“Summary judgment is appropriate if there are no genuine disputes of material
fact and the moving party is entitled to judgment as a matter of law.” Hohn v. BNSF
Ry. Co., 707 F.3d 995, 1000 (8th Cir. 2013) (citing Fed. R. Civ. P. 56). “We review
de novo the district court’s grant of summary judgment and may affirm the judgment
on any basis supported by the record.” Id.Plaintiffs allege three ERISA claims. Count One is a claim to recover benefits,
under 29 U.S.C. § 1132(a)(1)(B). Count One seeks for Defendants to pay Plaintiffs
benefits based on the increased $1.95/hour contribution rate, and it challenges
Defendants’ decisions to the contrary. Plaintiffs challenge Defendants’ initial
decision, made in 1999 and 2000, to credit their past service at $1.05/hour. Plaintiffs
also challenge Defendants’ subsequent decision, made in 2009 and 2010, to correct
their benefit payments and to recoup the previous overpayments.
Plaintiffs’ first challenge is time-barred. ERISA does not contain its own
statute of limitations for a § 1132(a)(1)(B) claim, and thus it borrows the limitations
period of the most analogous state-law claim. Shaw v. McFarland Clinic, P.C.,
363 F.3d 744, 747 (8th Cir. 2004). Here, that period is Iowa’s 10-year statute of
limitations for breach of contract. See id. at 747-48, 750; Iowa Code § 614.1(5). This
period begins to run when the claim for benefits is denied. Shaw, 363 F.3d at 747
(citing Union Pac. R.R. Co. v. Beckham, 138 F.3d 325, 330 (8th Cir. 1998)).
Defendants decided to apply the $1.05/hour rate to Plaintiffs’ past service on
August 1, 1999, and Defendants denied Plaintiffs’ appeal of this decision on
July 14, 2000. Plaintiffs did not file the instant lawsuit until February 15, 2011, more
than ten years later. Therefore, this part of Count One is barred.
Plaintiffs’ second challenge also fails, but for a different reason. Plaintiffs
argue Defendants had no authority to either correct or recoup the benefit
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overpayments, because the PPNPF plan booklet did not grant them this authority.
Plaintiffs rely upon the 2002 version of the plan booklet, arguing that its terms should
govern here. This argument is unavailing. The 2002 plan booklet contains broad
language granting Defendants discretion to take remedial action on behalf of the
PPNPF. Therefore, under its terms, Defendants were entitled to both correct and
recoup the overpayments. Accordingly, this part of Count One also fails. See
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Midgett v. Wash.
Grp. Int’l Long Term Disability Plan, 561 F.3d 887, 896-97 (8th Cir. 2009).
Count Two is a claim for breach of fiduciary duty, under 29 U.S.C.
§ 1132(a)(2). Count Two alleges Defendants breached their fiduciary duties by
refusing to apply the $1.95/hour rate to Plaintiffs’ past service, by miscalculating
Plaintiffs’ benefits, and by recouping the overpayments from Plaintiffs. It seeks for
Defendants to pay benefits based on the $1.95/hour rate.
“ERISA imposes upon fiduciaries twin duties of loyalty and prudence[.]”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009) (discussing 29
U.S.C. § 1104(a)(1)). A plan participant can enforce these duties by filing a claim
under § 1132(a)(2), to recover the relief provided by 29 U.S.C. § 1109. Id. at
593.A § 1132(a)(2) plaintiff acts “in a representative capacity on behalf of the plan
as a whole,” because § 1109 is designed to “protect the entire plan[.]” Mass. Mut.
Life Ins. Co. v. Russell, 473 U.S. 134, 142 & n.9 (1985). Thus, any relief “inures to
the benefit of the plan as a whole.” Id. at 140. As a result, when a defined-benefit
pension plan is at issue, § 1132(a)(2) “does not provide a remedy for individual
injuries distinct from plan injuries[.]” LaRue v. DeWolff, Boberg & Assocs., Inc.,
552 U.S. 248, 256 (2008).4
4
In contrast, when a defined-contribution plan is at issue, a § 1132(a)(2)
plaintiff may recover individualized relief. LaRue, 552 U.S. at 255-56.
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Count Two fails under these principles. The PPNPF is a defined-benefit plan.
Thus, § 1132(a)(2) provides relief only for the benefit of the plan as a whole. Here,
Plaintiffs do not seek relief to benefit the PPNPF itself. Instead, Plaintiffs seek for
Defendants to pay them – and only them – extra retirement benefits. Doing so would
take money out of the PPNPF, for the sole benefit of Plaintiffs. Because the PPNPF
is a defined-benefit plan, Plaintiffs cannot recover this individualized relief in a
§ 1132(a)(2) claim.
Count Three is a claim for equitable estoppel, under 29 U.S.C. § 1132(a)(3)(B).
Plaintiffs allege Defendants falsely represented in writing the value of their retirement
benefits, and then erroneously paid them excess benefits for up to seven years.
Plaintiffs allege they relied upon Defendants’ calculations when making retirement,
financial, and lifestyle decisions. Plaintiffs seek to equitably estop Defendants from
reducing their monthly benefit payments to the correct amounts, and from recouping
the previous overpayments through withholding.
Count Three fails, because its § 1132(a)(3)(B) claim mirrors Count One’s
§ 1132(a)(1)(B) claim. “Where a plaintiff is provided adequate relief by the right to
bring a claim for benefits under § 1132(a)(1)(B), the plaintiff does not have a cause
of action to seek the same remedy under § 1132(a)(3)(B).” Antolik v. Saks, Inc.,
463 F.3d 796, 803 (8th Cir. 2006) (alterations and citation omitted). This rule applies
here: in both their § 1132(a)(1)(B) claim and this § 1132(a)(3)(B) claim, Plaintiffs
seek payment based on the $1.95/hour rate and return of the recouped overpayments.
Plaintiffs’ ability to seek this relief in their § 1132(a)(1)(B) claim forecloses them
from also pursuing it in this § 1132(a)(3)(B) claim. Varity Corp. v. Howe, 516 U.S.
489, 515 (1996); Conley v. Pitney Bowes, 176 F.3d 1044, 1047 (8th Cir. 1999); see
Korotynska v. Metro. Life Ins. Co., 474 F.3d 101, 106 (4th Cir. 2006) (“[T]he great
majority of circuit courts have interpreted Varity to hold that a claimant whose injury
creates a cause of action under § 1132(a)(1)(B) may not proceed with a claim under
§ 1132(a)(3).”) (citing cases).
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III.
We affirm the district court.
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