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Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 17, 2006 Decided December 5, 2006

Reissued December 11, 2006

No. 05-5496

RICHARD COLEMAN, ET AL.,

APPELLANTS

v.

PENSION BENEFIT GUARANTY CORPORATION,

A PUBLIC CORPORATION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 99cv00278)

David B. Rodes argued the cause for appellants. With him

on the briefs were John T. Tierney, III and Betsy Lehrfeld.

John A. Menke, Assistant Chief Counsel, Pension Benefit

Guaranty Corporation, argued the cause for appellee. With him

on the brief were Jeffrey B. Cohen, Chief Counsel, Israel

Goldowitz, Deputy Chief Counsel, Paula J. Connelly, Assistant

Chief Counsel, and Erika E. Barnes, Attorney. Nancy S.

Heermans, Associate Chief Counsel, entered an appearance.

Before: SENTELLE and KAVANAUGH, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

USCA Case #05-5496 Document #1008660 Filed: 12/05/2006 Page 1 of 5
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Opinion for the Court filed Per Curiam:

Per Curiam: Appellants, a certified class of former

employees of McLouth Steel Products Corporation

(“McLouth”), seek review of a grant of summary judgment in

favor of the Pension Benefit Guaranty Corporation (“PBGC”),

successor to McLouth’s terminated pension plan (the “Products

Plan”). Appellants filed suit under §§ 406, 502 and 4003(f) of

the Employee Retirement Income Security Act of 1974, 29

U.S.C. §§ 1106, 1132, 1303(f) (2000), claiming that, under the

Products Plan, they are entitled to (1) mutual consent benefits

that attach when qualifying individuals experience breaks in

continuous service and (2) shutdown benefits that attach when

a plant is permanently shutdown. The District Court rejected

appellants’ claims. Coleman v. PBGC, No. Civ. A. 99-00278

(D.D.C. Nov. 28, 2005). We affirm for the reasons stated in the

decision of the District Court.

* * *

The Retirement Equity Act of 1984 (“REA”), Pub. L. No.

98-397, 98 Stat. 1426 (codified as amended in scattered sections

of 26 U.S.C. and 29 U.S.C.) prohibits discretionary benefit

provisions in pension plans. Appellants contend that McLouth

failed to comply with Treasury Regulation 1.411(d)-4, Q&A 8,

which governs the amendment of pension plans to remove

mutual consent pension benefits (a type of discretionary

benefit). The regulation required McLouth to decide, by

November 1, 1989, to terminate the discretionary benefits and

to amend the plan, by October 31, 1995, to reflect that decision.

The regulation explicitly states that there is no requirement that

the plan sponsor memorialize or document the decision made,

and requires only that the plan be administered in accordance

with that decision. In short, it is an “operational compliance

requirement.” Treas. Reg. 1.411(d)-4, Q&A 8(c).

USCA Case #05-5496 Document #1008660 Filed: 12/05/2006 Page 2 of 5
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Appellants, who during the relevant period were members

of the United Steelworkers of America (the “Union”), contend

that, while McLouth and the Union agreed to amend the plan to

remove the discretionary benefit provisions, the amendment was

neither properly executed nor authorized. The District Court

rejected this allegation, finding that “[t]he record in this case is

clear that the Union and McLouth did ‘mutually agree’ . . . that

subsections 2.6(d) and 2.7(d), the mutual consent provisions,

would be eliminated from the Products Plan in order to comply

with the relevant Treasury regulations.” Coleman, No. Civ. A.

99-00278, slip op. at 25. We agree. The relevant parties did

agree and this mutual agreement is all that is required for

amendment under the terms of the Products Plan. Appellants’

contention that the amendment is defective because it did not

conform to what appellants argue is McLouth’s standard

practice for corporate action is without merit.

Similarly unavailing is appellants’ allegation that McLouth

did not in fact administer the plan in accordance with its

decision not to grant mutual consent benefits. The sole

“evidence” to which they point in support of their claim is an

unsworn declaration by the former recording secretary for the

Union, averring that he “recall[ed] at least one (1) employee of

McLouth Steel Products was granted and received a mutual

consent [benefit] in the early 1990’s.” Joint Appendix 591a.

While a party challenging summary judgment need only allege

facts that, if true, create a dispute concerning a material fact,

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 255

(1986), “some statements are so conclusory as to come within an

exception to that rule,” Greene v. Dalton, 164 F.3d 671, 675

(D.C. Cir. 1999). The recording secretary’s declaration is such

a statement and does not preclude a grant of summary judgment.

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* * *

Next, appellants contend that they are entitled to shutdown

benefits because the plant was permanently shut down prior to

the termination of the Products Plan. They cite the layoff of

most McLouth employees and the shutdown of production as

evidence of a permanent shutdown of the plant. The District

Court rejected this claim, as do we. Pursuant to a Memorandum

of Understanding (“MOU”), McLouth, the Union, and PBGC

agreed that PBGC would not unilaterally terminate the plan until

just before the plant was to be shut down. In exchange for

PBGC’s forbearance from terminating the plan (and allowing

plan beneficiaries to continue accruing benefits), the parties

agreed that the termination date of the Products Plan would be

one day before the plant was permanently shut down. The

principal effects of the MOU were two-fold: it ensured that

PBGC would not be liable for shutdown benefits; and it allowed

employees to continue accruing benefits until the plant was

ready to be shut down. On August 7, 1996, both McLouth and

the Union represented to PBGC that a permanent shutdown was

imminent. PBGC terminated the Products Plan on August 13,

1996, and the plant was permanently shut down the next day.

Appellants insist that, because employees were laid off

before the plan was terminated and had no expectation of

returning to work, the plant was closed permanently before

termination of the Products Plan. We disagree. As the District

Court recognized, “neither McLouth nor the Union considered

the shutdown in production to be the equivalent of a ‘permanent

shutdown’ for purposes of the Products Plan.” Coleman, No.

Civ. A. 99-00278, slip op. at 20. The District Court also

concluded that PBGC reasonably relied on the representations

of McLouth and the Union in determining when the plant was to

be permanently shut down. Id. at 19. We agree.

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Because there are no genuine issues of material fact, and

because the District Court correctly construed and applied the

agreements, Treasury Regulation, and statutory provisions at

issue in this case, summary judgment was fully justified. We

therefore affirm. 

So ordered.

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