United States Court of Appeals

Fifth Circuit



## FILED

August 21, 2003

Charles R. Fulbruge III

Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-31168

RAY WORTHY; Et Al,

Plaint iffs,

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION, Dock Loaders and

Unloaders of Freight Cars and Barges, Local 854, AFL-CIO

Plaintiff - Appellant

versus

NEW ORLEANS STEAMSHIP ASSOCIATION / INTERNATIONAL

LONGSHOREMEN’S ASSOCIATION, AFL-CIO PENSION PLAN,

including welfare, vacation, holiday funds and royalty pay;

NEW ORLEANS EMPLOYERS INTERNATIONAL LONGSHOREMEN’S

ASSOCIATION, AFL-CIO, PENSION, WELFARE, VACATION AND HOLIDAY

FUNDS, incorrectly named as “New Orleans Steamship Association

International Longshoremen’s Association;” AMERICAN FEDERATION

OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, Pension Plan

including Welfare, Vacation, Holiday Funds and Royalty Pay;

RICHARD TEISSIER, Trustee; C G MILLER, Trustee; WIN NIEMAN,

Trustee; SID HOTARD, Trustee; MAX SANDERS, Trustee; JAMES CAMPBELL,

Trustee; JAMES MCCLELAND, Trustee; LLOYD IRVIN; DWAYNE BOUDREAUX,

Trustee; MARK ELLIS, Trustee; THOMAS R DANIEL, Administrator

Defendants - Appellees

Appeal from the United States District Court

for the Eastern District of Louisiana1 Mid-Gulf Association of Stevedores, Inc. was formerly known as the New Orleans Steamship

Association.

2 Before KING, Chief Judge, HIGGINBOTHAM and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Ray Worthy (“Worthy”), president of the Dock Loaders and Unloaders of Freight Cars and

Barges, International Longshoremen’s Association, AFL-CIO (“Local 854") filed suit ag ainst the

New Orleans Steamship Association/ International Longshoremen’s Ass o ciation AFL-CIO, along

with its trustees (collectively, “New Orleans Steamship” or “Association”) which oversees the

pension, welfare, vacation, and holiday plan for Local 854 employees (the “Trust”); the Trustees of

the Trust; and, the administrator of the Trust, Thomas Daniel (“Daniel”). Local 854 alleged violations

of the Employment Retirement Income Security Act (“ERISA”), the Taft-Hartley Act, and the Labor

Management Relations Act (“LMRA”). New Orleans Steamship filed a motion for sum m ary judgment

that the district court granted. Local 854 now appeals. For the reasons that follow, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff-Appellant, Local 854 is a labor org anization located in New Orleans, Louisiana.

Defendant-Appellee, New Orleans Steam ship is an unincorporated association. New Orleans

Steamship, guided by administrator Daniel, oversees the Trust between the Mid-Gulf Association of

Stevedores, Inc. 1 and Local 854. International Longshoremen’s Association Locals 3000, 1497, 2036

and 3033 (collectively, “Unions”) are also parties to the Trust.

The Trust establishes pension, welfare, vacation, and holiday plans and is go verned by the

ERISA, 29 U.S.C. § 1001, et al

. (2000), the LMRA, 29 U.S.C. § 186(e) (2000), the law of contracts,3

and the trust code of the State of Louisiana. The Declaration of Trust which was written in 1957 and

created the Trust, provides that the employers, represented by Mid-Gulf Association of Stevedores

and the Unions would each appoint an equal number of Tr ustees to the Board of Trustees (“the

Board”). Init ially, the Trust stipulated that the p art ies would each name six Trustees and four

alternates who could substitute for one or more of the named Tr ust ees. Eventually , the Trust was

amended to reduce the number of Trustees appointed to the Board. In February 2002, the Trust was

again amended to allow the employers and the Union to each appoint five Trustees and to eliminat e

all alternative Trustee positions.

Local 854 is one of the original signatories to the Trust and, until 1989, was represented on

the Board. In 1989, however, the president of Local 854 retired from his position on the Board and

a representative of Local 3033 was placed on the Board in his place. In May 1997, Worthy, who was

president of Local 854 at the time, was appointed as one of the two alternative Trustees. In 1999, the

Union Co-Chairman of the Board wrote Daniel advising him that because Worthy did not attend any

meetings during his tenure, he was being replaced as an alternate Trustee.

In December 2001, Local 854 and Worthy, filed suit in federal district court against the Trust

that oversees the pension, welfare, vacation, holiday, and royalty pay for Local 854's employees, also

known as the New Orleans Steamship; the Trustees of the Trust; an d Daniel. In its first amended

Complaint, Local 854 alleged that New Orleans Steamship: (1) failed “to abide by one or m ore

constitutio ns and bylaws,” the Restatement of Agreement and Declaration of Trust (the “Trust

document”), including amendments, and the Summary Plan Description; (2) unlawfully denied

pensio n, welfare, vacation, holiday and other benefits, which caused the trustees to breach their

fiduciary duties to the beneficiaries of the trust; (3) deprived Worthy of his rights as a member of a2 In April 2002, Local 854 moved for injunctive and declaratory relief which reflected the claims

raised in its first Amended Complaint, requesting the district court to “specify the relationship

between Local 854 and [New Orleans Steamship] in addition to [New Orleans Steamship’s] including

Local 854 on the trustee board; change the procedure for choosing trustees; cease amend[ing] the

trust without the input and required signatures of all unions; restore Mr. Worthy’s benefits for the

time period of 1998 through 2001; and cease operating the royalty fund without the i nput and

required signatures of all the principals of the fund.”

4 labor organization; and (4) excluded Local 854 from the Board of Trustees, th us causing unequal

representation of employers and union in the administration and operati on of th e Trust, as wel l as

implement ing policies without a Local 854 repr esentative’s required signature. Local 854 also

complained that Daniel failed to obtain Worthy’s signature, in his capacity as representative of Local

854, on Amendments 12 through 15 of the Trust, thus rendering each amendment null and void and

causing the Trustees to breach their fiduciary duties; and the 1991 through 2001 Memorandum

Agreements and Royalty Authorizations to the 1972 Royalty Agreement, despite that Local 854 is

a principal to that agreement. 2

In October 2002, the district court held the final pre-trial conference on this matter. As part

of the trial prep aration order issued that same day, the court granted New Orleans Steamship’s

motion for summary jud gment with respect to all claims asserted by Local 854 and Worthy (as its

representative), and denied Local 854's motion for preliminary injunctive relief and declaratory

judgment with respect to these claims. In addition, the court took u nder advisement New Orleans

Steamship’s request for summary judgment with respect to Worthy’s individual claim for benefits.

In November 2002, the di st rict court filed written reasons in support of its October order.

With respect to all claims asserted by Local 854 and Worthy, the district court granted New Orleans

Steamship’s summary judgment motion and denied Local 854's motion for declaratory judgment and5

preliminary injunctive relief. On appeal, Local 854 challenges the district court’s order regarding its

claims that New Orleans Steamship breached its fiduciary duties under the Trust.

DISCUSSION

I.

We review the district court’s order granting summary judgment de novo employing the same

rules that were used in the district court. See Hansen v. Cont’l Ins. Co

., 940 F.2d 971, 975 (5th Cir.

1991). Summary judgment is only appropriate when there are no genuine issues of material fact and,

as a matter of law, the moving party is entitled to summary judgment. See Matsushita Elec. Indus.

Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586-87 (1986); Celotex Corp. v. Catrett , 477 U.S.

317, 322 (1986) (“Rule 56(c) mandates the entry of summary judgment ... against a party who fails

to make a showing sufficient to establish the existence of an element essential to that party’s case, and

on which that party will bear the burden of proof at trial.”).

II.

The district court found that Local 854 failed to raise a genuine issue of material fact as to

New Orleans Steamship’s alleged breach of fiducia ry dut ies under ERISA. The district court

concluded that New Orleans Steamship did not violate ERISA because t he wo rd “union” was

interpreted by New Orleans Steamship to mean a majority of the signatory unions, and thus there was

no requirement for Local 854 to be involved in decisions. Also, having evaluated trust administrator

Daniel’s interpretation of the language o f t he Trust document, the district court found his

interpretation to be “legally correct.” Local 8 54 challenges the district court’s grant of summary

judgment to New Orleans Steamship regarding its fiduciary duties. Local 854's basic contentions are

that New Orleans Steamship breached its fiduciary duties under ERISA by failing: (1) to provide6

Local 854 with a position on the Board; (2) to get signatures of approv a l by Local 854 for trust

amendments twelve through fifteen; and (3) to get signatures of approval by Local 854 as a principle

to the Royalty Escrow Account. We address each argument in turn.

First, we conclude that nothing in the Trust document guarantees Local 854 a place on the

Board. The plain language of the Trust document does not support the exten sion of a contractual

ri ght t o Local 854 that would entitle it to continuous representation on the Board. New Orleans

Steamship c o ntends that the original authors of the Declaration of Trust did not intend for each

original signatory union to have a position on the Board and that no porti on of the Trust document

or practice of the Board indicates that each original union signatory was entitled to a position on the

Board at all times. We agree. There is no language in the Trust document which indicates that Local

854 is required to maintain a position on the Board in perpetuity because it was an original signatory

to the Trust.

Moreover, the Trust document does not provide express or implied language that all of the

member Unions must participate on the Trustee Board. For example, in Local 169, Int’l Brotherhood

of Teamsters, Chauffeurs, Warehousemen & Helpers of Am. v. Teamsters Health & Welfare Fund

of Phila. & Vicinity

, the trust document at issue specifically de fined “union” to include only the

original signatory local unions, meaning that only those unions would participate in the decisions

c oncerning the appointment of trustees. 327 F. Supp. 260, 262 (E.D. Pa. 1971) (“In the O riginal

Declaration of Trust, where parties to the agreement are listed, it is pro vided that the seven local

unions entering into the agreement shall be referred to as ‘UNION’.”). In this case, however, such

an express clause in the Trust document defining the scope of “unio n ” does not exist. Instead, the

language of the Trust document supports New Orleans Steamship’s interpretation. Article 2 provides3 Article 19 provides:

This Agreement and Declaration of Trust may be amended by joint actions of the Trustees,

the Union, and the New Orleans Steamship Association representing the Employers.

4 Article 5 provides in relevant part:

The Trustees shall have the power to construe the provisions o f t he Pension, Welfare,

Vacation and Holiday Plans which shall be formulated pursuant hereto, and the terms used

7 that the Union and the Association, i.e., the settl ors are to appoint an equal number of Trustees each

year. At the time the Trust document was executed, the Union and the Association each appointed

six trustees. Local 854 was one of eleven original signatories to the Trust. Thus, the original authors

of the Trust document cannot have contemplated that each signatory member is guaranteed a position

on the Board.

Second, we conclude that because a proposed Trust amendment does not require unanimity

amongst all unions signing the Trust, Local 854's assertion that New Orleans Steamship breached its

fiduciary duties by failing to obtain approval from Local 854 for amendments twelve through fifteen

raises no genuine issues of material fact. Local 854 interprets the use of the word “union” in Article

19 of the Trust document to mean that all of the unions are required to execute an amendment to the

Declaration. 3 Trust administrator Daniel interpreted “the union” to mean a majority of the unions. The

legality of the trust administrator’s interpretation of the Trust significantly affects this issue. In the

ERISA context, when trust administrators are provided with discretion “to construe the terms of the

plan,” these interpretations are reviewed under an abuse of discretion standard. See Wilbur v. Arco

Chem. Co . 974 F.2d 631, 637 (5th Cir. 1992) (quoting Firestone Tire & Rubber Co. v. Bruch , 489

U.S. 101, 115 (1989)). In t his case, the language in the Trust document is explicit that the

administrator, who is supervised by the Board, is vested with discretionary authority to construe the

plan. 4 Id

. (“Discretionary authority cannot be implied; an administrator has no discretion to determineherein and in said Pension, Welfare, Vacation and Holiday Plans, and any constructi on

adopted by the Trustees shall be binding upon all parties hereto. The Trustees shall also have

authority to review, from time t o time, the benefits provided by said Pension, Welfare,

Vacation and Holiday Plans, and to increase or decrease such benefits to suc h extent as i n

their prudent judgment and discretion they shall deem advisable, giving due rega r d to the

financial resources of the Trust.

8 eligibilit y or interpret the plan unless the plan language expressly confers such authority on the

administrator.”).

We employ a two-part test when applying the abuse of discretion standard. First, we must

identify the legally correct interpretation of the plan. See Wilbur

, 974 F.2d at 637. If we find that the

plan administrator failed to provide a “l egally correct” interpretation, then second, we determine

whether the administrator’s decision constitutes an abuse of discretion. I d

. In answering the first

question, w e co nsider t hree factors: “(1) whether the administrator has given the plan a uniform

construction, (2) whether the interpretation is consistent with a fair reading of the plan, and (3) any

unanticipated costs resulting from different interpretations of the plan.” Id

. at 637-38. Because we

determine that the administrator’s interpretation is legally correct, we do not reach the second inquiry.

After reviewing the record and the parties ’ arguments, we are satisfied that Daniel’s

interpretation of the Trust is legally correct. Local 854 does not present evidence nor cite to specific

Trust provisions indicating that Daniels failed to give the Tru st a uniform constructi on or that hi s

interpretation is inconsistent with a fair reading of the Trust. Further vitiating Local 854's assertion

is that the provisions of the Trust indicate that agreement of the “union” should be interpreted as an

agreement of the majority of the trustees o f the local unions. For example, in Article 3, the Trust

document provides that election of the Co-Chairman from the Union and the Co-Chairman from the

Association are by “majority vote.” To transact business, Article 9 requires a “quorum” to be present9

at a meeting of the Board and that the exercise of any right or power granted to the Trustees is to

be by majority vote of those Trustees present.

As the district court adeptly analyzed, there would be great unanticipated costs to interpreting

the Trust language as Local 854 urges, i.e., requiring unanimous approval of the signatories prior to

amending the Tr ust . In sum, the process of obtaining unanimous approval would be tedious and

would create an obstacle to effective administration of the plan. Because Local 854 does not raise

a genuine issue of fact disputing the legal correctness o f Daniel’s interpretation, we conclude that

summary judgment for New Orleans Steamship is proper.

Third, we conclude that Local 854's claim that the Trust breached its fiduciary duty by not

obtaining a signature of approval by Local 854 as a Principal to the account is not justiciable. The

justiciability of this claim depends on w het her t he judiciary represents the branch of federal

government best-suited to address Local 854's particular grievance. Because this cl aim principally

arises out of an interpretation of a collective bargaining agreement, Local 854's proper remedy was

not to file an ERISA claim but to file an unfair labor practice charg e before the National Labor

Relations Board - an agency within the executive branch of the federal government. See 29 U.S.C.

§ 160 (empowering the NLRB to adjudicate claims of unfair labor practices); B oire v. Int’l

Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of Am.

, 479 F.2d 778, 783 n.4

(“[C]harges of unfair labor practices are within the jurisdiction of the NLRB

... and not within the

jurisdiction of this Court.”). Local 854's claim is not in a form amena ble to resolution through the

judicial process, but rather would be best decided by the executive branch of government.

III.10

Local 854's assertion that the district court erred when it granted summary judgment to New

Orleans Steamship on Local 854's claim against Daniel for false swearing before a notary public is

waived because it was raised for the first time in its reply brief. See Blumberg v. HCA Mgmt. Co.

,

848 F.2d 642, 646 (5th Cir. 1988) (informing that this Court has “repeatedly held that we will not

consider alleged errors raised” for the first time in a reply brief). Moreover, Local 854's assertion that

New Orleans Steamship did not operate the Trust and plans for the benefit of the beneficiaries,

permitting certain sole propri etors to contribute to the plan on behalf of themselves as employees and

receive plan assets, was not raised before the district court; and therefore, was never ruled upon in

the Final Judgment. As a general rule, this court ignores claims that are not raised formally at the trial

level. E.g.

, McLean v. Int’l Harvester Co.

, 902 F.2d 372, 374 (5th Cir. 1992). Furthermore, because

Local 854's sole propri etor argument does not involve a purely legal question or failure to consider

it would not result in a miscarriage of justice, we do not consider it on appeal. See Atlantic Mut. Ins.

Co. v. Truck Ins. Exchange

, 797 F.2d 1288, 1293 (5th Cir. 1986) (“An issue raised for the first time

on appeal generally is not considered unless it involves a purely legal question or failure to consider

it would result in a miscarriage of justice.”).

CONCLUSION

Thus, we affirm the district court’s grant of summary judgment to New Orleans Steamship

and denial of Local 854's motion for injunctive and declaratory relief regarding Local 854's claims that

New Orleans Steamship breached its fiduciary duties under ERISA.

AFFIRM.