## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 07

- 2778 R ONAL D P. O R T H an d E UF EMI A B. O RT H,P la intif fs-A pp ellees , v.
W I S CONS I N S TATE E M PL O YEES U NI ON, C OUN CIL 24, a nd G R OUP I NSURANCE P LA N W I S CONS I N S TATE E M PL O YEES U NI ON, D ef endants-A ppell ants
.
A pp eal from the United S t ates Di strictC our t fo r the E astern Di stricto f Wisc onsin
. No . 07- C- 149

—WilliamC. G riesbach, Judge

.
A RG UE D M AY 7, 2008

— D ECI DE D O CT OB ER 22, 2008

Befo re B AUER, P OSNER, an d W I L L I A MS, Circ uit Ju dg es . P OSNER, Cir cu i tJudg e . The pl ain tiffs i n thi s s uitunder bo thERI S A and th e Ta ft- H ar tl eyActc ha r g e th e defen dan ts, an e m plo yerand a wel f ar e be nefi ts pla n, with h av in g v iola te d p ro vis ion s o f an E R ISA p lan c on ta in ed in2 N o. 07

- 2778

a co l l ecti ve bar gai ni ng ag re em ent b etween the em plo yer ( Cou nc i l 2 4 o fthe W i sc o ns i n S ta te Em pl o y ee s Uni o n) a nd the uni on th at re prese nted M r. Orth. The di str i ct j ud ge gr anted sum m ar y j ud gm ent forthe pla i nti ff s a nd al so aw ar ded them thei r att or neys’ fees . The appealr eq u ire s us to co nsi der, am ong othe r thi ngs, the ci rcum sta nces i n w hi ch extr i nsi c evi dence can be used to d em on str ate the e xi ste nce o fa “l ate nt” a m bi gui ty i n a c on tract that is c lea r on its fac e an d th e req u ire m en ts for a va lid m od ific at ion of a c on tr a c t in ge n er al, an d an E R ISA p lan in parti cul ar, bysubse quent deal i ngs b etween the parti es. Thes e i s s ue s a r e t o b e r e s o l v e d in a c c o r da nc e wi th fed er al c om m on law . E .g ., Rut t e nb e rg v . U
. S. Li f eIns . Co. , 413 F.3d 652, 659 (7th Cir. 2005); M a thew s v. Se ars Pe ns i on Plan , 144 F.3d 461 , 465-66 (7th C ir. 1998). The col l ecti ve bar gai ni ng agr eem ent i n f or ce when Orth re ti re d requi re d the e m plo yerto pro vi de heal th i nsurance to curr ent a nd r eti re d em p loyees

. I fupon re ti re m ent a n em plo yee had unu se d si ck l eave, the m onet ar y v al ue o f t h a tl e a v e w o u l d b e u s e d t o p a y th e i n s u r a n c e p r e mi u ms “on the s am e ba si s a s the b en efit i s cur re ntl y pai d fo r em plo yee s. ” The r efer ence i s t o a pro vi si on i n the col l ective b argai ni ng ag re em ent that the em plo yer“wil l pay 90% o fthe tot alpre m i um wh i l e th e em plo yee pays 10% of t h e t ot al p re m iu m .” W hen he re ti re d in 1998 , Orth had m or e th an $42, 000 i n accr ued si ck leav e. Ei ght y ear s l ate r hi s f or m er em plo yerto l d him thatth e en ti re am ount had bee n or w as abo ut to be com ple tel y used up i n paym ent ofh is sh ar e o f h is h ea lth ins u ra n c e p re m iu m s . T h e r ea so n, i t turns out, i s that contr ar y t o the l anguage o fthe col l ecti veN o. 07

- 2778 3 barga ining agreem en t tha t w e qu oted , the w e lf a re be ne fi ts pl an was deduc tingno t 10 pe r ce ntb ut1 00 pe r ce nt o fth e r e t i r e d e mp l o y e e s ’ h e a l th i n s u r a n c e p r e mi u ms f ro m thei r si ck- l eave acc ounts. The defe nd ants ad m it that the l anguage o fthe agr eem ent i s c l e a r “ o n i t s f a c e ” ; tha t i s , no o ne who j us t r ead the a gr eem ent woul d thi nk the re w as any uncert ai nty about the sh ar e o fheal th insurance prem i um s that a re ti re d em plo yee would be re sp on sibl e for : 10 per cent. Bu t s om eti m es a c on tr ac t i s cl earo n i ts f ace yeti fyo u knew cert ain b ackg ro und f acts yo u w oul d rea l i ze that i t was uncl ear in i ts appli cati on t o the par ti es’ di spute. The bestexem pla r ofthe pri nci ple r em ai ns Raff l e s v. Wi ch e l haus , 2 H. & C. 9 06 , 1 59 Eng
. Re p. 37 5 ( Ex. 1 86 4)
. The pla i nti ffag re ed to se l l the defe nd ants a quanti ty of cot ton, ata speci fi ed pri ce, to be shi pp ed f ro m Bom bay to Li v e r po o l b y a sh i p c a l l e d P eerless

. N othi ng uncl earther e. Bu t ith a pp e ne d tha tthe r e we r e t wo s hi ps n a med P eerless s ai l i ngfr o m Bo m ba y to Li ve r po o l a few months a p a r t
. T h e c o t t o n w a s s h i p p e d o n th e s e c o n d P e e rless , an d the de fen dan t

— t h e p ric e o f co tt on h av in g fa llen in th e in te rim

— ar gued that i t s houl d have be en shi pp ed on the fi rs t o ne. A
. W
. B rian Si m pson, “Contr acts f orCott on to A rr i ve: The Case ofthe Tw o Shi ps Peer l ess , ” 1 1 Card ozo L. Re v. 28 7, 31 9- 21 ( 198 9). N othi ng i n the contr act i nd i c a t e d wh i c h s hi p P eerless the parti es had agr eed that the c ott on would be shi pp ed on, and the cour t r ule d th er efo r e th atthe c o nt r ac t was ho pel es sl y a m bi g uo us

— though per fectl y c l earo n i ts f ace. A t s om e point in the adm i ni str ati on o fthe col l ecti ve bar gai ni ng ag re em ent in the prese nt ca se, the pla n sta rt ed4 N o. 07

- 2778 ded ucti ng 10 0 per cent of re ti re d em plo yee s’ i nsurance pr e mi ums fr o m t he i r s i c k

- l e a v e a c c o un t s . T wo r e ti re d em plo yee s be si des Orth w ere s ubj ecte d to such dedu cti ons. They di d not co m pla i n, but on the o therhand they ha d ne ve r b ee n t o l d tha t 10 0 per ce nt r athe r th an1 0 per ce nt ofthe prem i um s were bei ng deducted and so far as ap p ears th ey ne ver d iscovered the fact on th eir ow n. Th ere i s al so ev i den ce tha t th e empl o y ee s’ uni o n kne w w ha t th e pl anwas do i ngb utdi d no t o bj ec t. And a s ubs eque nt co l l ec tiveb ar gaining agree m en t, th ou gh i na p p l i cabl e tothe Orths’ cl ai m , change d t h e e m plo yee ’ s s hare fro m 10 perce nt o fpre m i um s to a co m bi nati on o fze ro per cent of pr emi um s f o r s i ng l e co ve r ag e an d 1 00 pe r ce nto fthe di ffer en ce b etwee n th e pr emi um s f o r s i ng l e co ve r ag e an d f ami l y c o v e r a g e . Th i s c ha ng e wa s pr o po s e d b y the uni on an d f o r a l l we k no w m ade mos t empl o y ee s bet te r o ff, b ut probabl y no t the Orths. Both Orths were r ei m burse d und er th eir retirem en t p la n f or 90 perc en t of th eir he alth insu rance prem i um s; the new p ro vi si on would r ei m burse al l o f M r. Orth’ s pre m i um s but none o fhi s wife’ s. Allthi s evidenc e, ho wev eri t m i g htb ea r o n the de fen dants’ al ternati ve ar gum ent th at the contr act on wh i ch the Or ths a re suing w as m odi fi ed by subsequent deal i ngs b et w ee n th e u n ion an d th e e m p loy e r , h as n o for c e in est abl i shi ng a l ate nt am bi gui ty. I nd eed , w e ca nnot s ee how the sam e e vi dence co uld s up portboth ar gum ents. I n a c ase o fl ate nt am bi gui ty, the contr act i s s een, o nce i ts re al

- w or l d sett i ng i s underst oo d, to h av e neverbee n c lea r; i n a c ase o fm odi fi cati on, the contr act w as cl ear whe n i twa s ma d e b u twa s l a t e r c h a n g e d

. Aft e r th e e xtr i nsi c evi dence w as prese nted in the R a ffles cas e, i t wasN o. 07

- 2778 5 ap p ar en t t h at th e am b igu ity in t h e w or d “ P ee rle ss ” c ou ld not be c ured be cause the c ontr acting par ti es had not agr eed o n w h ich “ P eer l ess ” the co tto n w as to be s hi pp ed on. A fteral l the extr i nsi c ev i dence i s wei ghed and parse d i n thi s ca se , the c o nt r ac t r emai ns una m bi g uo us . The defe nd ants’ ar gum ent i s not that the c ontr act does not m ean what i t s ays but that i t i s n ot t h e contr act. That argu m en t has noth ing to d o w ith am biguity, so w e turn to the quest i on o fm odi fi cati on bysubse quent deal i ngs. An o r di na r y co nt r ac t ca n be m o di fi ed bysub se que nt deal i ngs that g i ve ri se to an infer ence that the par ti es ag re ed , eve n ifju st ta c itly , to th e m od ifica tio n (“a c q u ies c ed , ” a s the cas es say, tho ugh “ag re ed” i s cl ear er )
. E.g., Cro me e n s , Ho l l o man, S i b e r t, In cv . A B V o l vo , 34 9 F
. 3d 376, 39 5 (7 th C ir. 20 03 ); O p erating Eng ine ers Local 139 H ealth B enefit F un d v . Gu staf son C o nstru ctio n C o rp . , 25 8 F .3d 64 5, 64 9 (7 th C ir. 20 01 ); Int e r nation a l Bus i ne s s Lis t s , Inc . v. A m e r i c an Te l
. & Te l
. Co
. , 14 7 F
. 3d 63 6, 64 1 ( 7th Ci r. 1998); Edel l & As s oc i at e s , P
. C. v. La w O f f i ces of Pe t e rG. Ange l os , 26 4 F. 3d 424, 44 0 ( 4t h C ir. 20 01) ; se e Res t at e m e nt( Se co nd) of C ontracts § 202( 4) ( 1981 )
. But because E RI SA p l ans m ust be

“ mai nt a i ne d p ur s ua ntt o a wr i t t e n i ns t r ume nt, ” 2 9 U. S
. C. § 11 02 ( a) ( 1) , o nl y modi fi ca ti o ns o fs uch pl an s i n wr i ting ar e e n for c ea b le, an d so it w ou ld se em th at t h e p rin c ip le th at co nt r ac ts ca n be m o di fi ed by th e subs eque nt co nduc t o fthe pa r ti es i s i na p p li cabl e to ERI S A pl an s unle ss the c onduct i s pro ved by a wri ting. The c om m on par aphrase o fse cti on 1 102( a) ( 1) i s that “ERIS A pl ans m ust be i n w ritin g and cannot b e m odi fi ed or al l y. ” L i vi c k v. Gi l l e t t eCo
. , 5 24 F.3d 24, 31 (1st C ir. 2008);6 N o. 07

- 2778

se e, e.g ., N a ch w a lter v. C hristie, 8 0 5 F
. 2 d 9 5 6 , 9 6 0 ( 11th Ci r . 1 98 6)
. Butthe t wo c l au se s do n’ t fi t to g ethe r; the ac cur at e par aphrase i s th atb ec au se a pl anmustb e m ainta in ed p u rs u an t t o a w rit in g, it c an be m od ified on ly in w riti ng . M od ification by con d uc t is tacit, an d th e r e fore ( un l e s s e v i de nc e d b y a wr i t i ng ) un wr i t t e n, l i ke or al m od ifica tio n ; w h y s h ou ld itm a t t er th at it is n on ve rb al? T h e s ta tu to ry req u ire m en t “ th at th e p l a n b e in w rit in g is th o ug h tt o c a r r y o v e r t o th i s ‘ p r o c e d u r e f o r a me n di ng such pl an, ’ hence to m ean that pla n am endm ents m ust be i n wr i t i n g . ” J o h n H. L a n gb e i n, S u s a n J
. S t a b i l e & B r u c e A. W olk, Pe n s i on a n d Em pl oy e e B ene fi tL aw 690 (4th ed

. 2006). That w oul d ex cl ud e m odi fi cati on bysubse quent deal i ngs not confi rm ed i n w ri ti ng. The re fusalo fthi s a nd o therco urts to hol d that pr om i ssor y e s t o pp e l c a n ne v e r b e u s e d t o v a r y a n ER I S A pl an m ay see m i nconsi ste nt with re quir i ng tha t a l l m odi fi cati o ns b e i n wr i ting . Buta s we e xpl aine d i n M i l l e rv. Tayl or In s u l at i on Co ., 39 F.3d 75 5, 75 8-5 9 (7th C ir. 19 94 ), th e m ain obj ecti on “ to or alm odi fi cati ons [ ofERIS A p lan s] i s that they w oul d enabl e the pl an’ s integr i ty, an d poss ibl y i ts actuar i also und ness, to be er oded by r el ati vel y l ow-l eve l e mpl oye e s wh o i n r e s po ns e t o i nqui r i e s ab o utthe s c o pe ofco ver age advi se parti ci pants thata parti cul arm edi cal proce du re i s cove re d, eve n though the pl an i s e xpli ci t that i t i s no t co vered. Thi s co nc ern i s di m i ni sh ed when th e doctr i ne [ ofpro m i sso ryes toppe l] is used to pre vent an em p loy er from d e n y i n g t h at an em p loy ee (or a s in th is ca se a f o r m ere m pl o y ee ) i s a par ti ci p ant i n the pl an . A ssur ances that one i s a part i ci pant, as di stinct fro m ass urances co ncer ni ng the pl an’ s co verag e o fa parti cul arN o. 07

- 2778 7

m edi calpro cedure, ar e un like l y t o com e fro m l ow-l eve l em p loy ee s, an d d id n otin t h is c as e” (cit at ion s o m itt ed ). In the pr ese nt c ase , ev en m or e cl ear l y, ther e i s no danger th at d ep ar tin g fro m th e lite ra l t e r m s o f th e p lan w ou ld un d erm ine its actu a r ia l sou nd ne ss, for th e d ep artu re i s s ought i n or der t o re du ce the pl an’ s l i abi l i ty. Bu t the st atuto ryr equi re m en t th at a m odi fi cati on o fan ER I SA p l an be i n w ri ti ng i s n ot lim i ted to cas es i n w hi ch departure s m i ght depl ete the pla n’s as set s, i m port ant a s thos e ca ses ar e. S ee, e. g., Sh ields v . Loc a l 70 5, Int’l B roth erhood of Te am s t e rs Pe ns i on Plan , 18 8 F
. 3d 895, 90 3- 05 ( 7th C ir. 19 99 ) (co n c u rrin g op in ion ). In m os t o f th e re lat ive ly few cas es i n w hi ch es toppel, wh etherpro m i sso ryo r equi tabl e, ha s be ena l l o wed t o v ar y the t er m s o fthe wri tt enpl an, the c l ai m ofe st o ppelwas i ts el fb as ed o n a w ri ti ng ( f orexam ple , a w ri tte n prom ise)

— and w e hav e d ee m ed th at ele m en t e ss en tia l. Kam le r v. H/NTele com m unica t i on Se r vi ces , Inc . , 305 F. 3d 672, 679 (7th C ir. 2002); D owns v. Wo rld C o lo r P ress , 214 F.3d 802 , 805 (7th C ir. 2000); Sc hm i dtv. Sh eet M e t al Worke rs ’Nat i onal Pe ns i on Fun d, 12 8 F
. 3d 54 1, 54 6 ( 7th Ci r . 19 97 )
. The appl i ca ti o n o fthe wri ting re quir em ent t o m odi fi cati on bya subsequ ent c ours e o f dea l i ng s i s i m pl i ci t i n Sc hoon m ake rv. Em pl oye eSa vi ngs Pla n o f A m o co C o rp. & P a rticip a ting C o m pa nies , 987 F
. 2d 410, 41 3- 1 4 ( 7 th Ci r . 1 9 9 3 ) , a nd D a rda ga nis v. Gra ce C a pit a l, Inc., 88 9 F.2 d 1 23 7, 12 41 (2 d C ir. 19 89 ); cf. C ent ral State s, Southeast& Southw es t A re as Pensi on Fund v. Ger be r Truck Se rvic e, Inc. , 870 F.2d 1 148, 11 49- 50 ( 7th Ci r. 19 89) ( en banc)

. W e no w m ake i t e xpli ci t. Butwe m us t co ns ider th e be ar i ngo fthe f ac t th atthe ERI S A pl an w as cr ea te d b y a c o l l ec ti ve b ar g aini ng8 N o. 07

- 2778

c on tr ac t, se e, e.g ., M at us zak v
. Tor r i ngt on Co. , 927 F. 2d 320, 32 1, 3 23

- 24 (7th Ci r . 1 99 1) , a nd s uchc o nt r ac ts c anb e an d often a re m odi fi ed by a su b sequent no nw ri tte n agr eem en t

— whethe r e xpr es s ( an d the r efore o r al ) o r t ac i t ( an d ther ef or e e vi denced by s ubsequent d eal i ngs)

—between the unio n and the em plo yer . E .g., id

. at32 1, 32 3

- 24 (7t hC ir. 19 91 ); R ailway Labor E xecut ives Ass’ n v. Norfolk & We s t e r n Ry. , 833 F.2d 70 0, 70 5 (7 th C ir. 19 87 ); M ohrv. Me t ro E a s t Mfg
. Co ., 711 F.2d 69, 71-73 (7th Cir. 1983); A m er ican F ederati on of M usi cians, Local 2-197 v. St. Louis Sym pho ny Society, 203 F.3d 107 9, 1 0 8 0 ( 8th Cir. 2000); S a n d e rs o n v . F o r d Mo t o rCo ., 483 F.2d 102, 111-12 (5th Cir. 19 73 ); bu t c f. Pl e as an t vi e w Nurs i n g Hom e, In c . v . NLRB , 35 1 F.3d 74 7, 75 3- 54 ( 6th Ci r. 20 03)
. M ust the em plo yee s co ns en t f o r the modi fi ca ti o n t o b e effec ti ve? The r e i s no in d ica tio n th at th e t w o e m p loy ee s w h o a llow ed an ad d iti onal90 per cent oft h eir h eal th i nsurance prem i um s t o be de du c t e d kne w the y we r e b e i ngs ho r t
- c ha ng e d ( e ven i fth e u n i o n d i d , a n d a c qu i e s c e d , o fw h i c h th e r e i s s o me evid en ce, a s w e said). B ut em p loyees are not signa tory p ar tie s t o t h e c olle c tiv e b ar ga in in g a gr ee m en t, P lum bers’ P ensio n F un d, Lo ca l 13 0 v. D o m a s M ech a nic a l C o ntra cto rs, I nc ., 77 8 F .2d 12 66 , 126 9 (7 th C ir. 19 85 ); H. K
. Po r t e rC o . v. L o ca l 37, U nite d Ste el w orkers of Am er ica , 4 0 0 F
. 2 d 6 91, 694 ( 4th Ci r. 1968) , and al though they a re thi rd- party b en efic iar ies , Intern a tio na l B roth erho o d o f E lectric Wo rkers v. Hech ler, 481 U .S. 85 1, 8 6 3-6 5 (1 98 7); M o hr v . M etro E a st M f g. Co ., sup ra , 711 F.2d at72 ; A nd erson v. A T & TC o rp . , 14 7 F. 3d 467, 47 3 ( 6th Ci r. 19 98) , the ri ghts confer re d bythat st a t u s a r e n o t i d e n t i c a l t o th o s e o f e x p r e s s p a r t i e s . The pr ev ai l i nga l th o ug h n o t una ni m ou s v i ew i s th attheN o. 07

- 2778 9 sig n at or y p ar tie s c an alt er th e c on tr ac t (u n les s it provi des other w i se) even to the detr i m ent o fa thi rd- party b e ne fi c i a r y u nl e s s the l a t t er , le a r ningtha th e i s a thi r dpartybene fi ci ar y, r el i es to h i s detr i m ent o n hi s r i ghts u n d er it. Res t at e m e nt, sup ra , §§ 311( 2)

- ( 3) ; see E . A l l an Fa rn sw or th , Farnsworth on Co ntracts § 10. 8 (4th ed

. 2004). This p rinci ple i s m odi fi ed so m ew hat in the col l ecti ve bar gai ni ng co ntext. A l though, as we sai d, the c ontr act can be modi fi ed bya g r ee m en t be twe enthe uni o n a nd the em plo yerwitho ut the em plo yee s’ co nsent, the unio n has a d u ty of fair re p re se n ta tio n . Th e b re ac h of th at d u ty is i l l ustr ate d by Le wis v. Tus ca n Dairy F ar m s , Inc . , 25 F. 3d 1138 , 11 40

- 43 ( 2d Ci r. 1 994), wher e, much a s i n thi s ca se , the unio n’s ag ent c oncea l ed fro m the unio n’s m em ber s a n or al agr eem ent that he had m ade w i th the em plo yer . S ee al so Ben ne t tv. Lo ca l U ni on N o. 6 6, Gl as s , M ol de rs , Pot t e ry, Plas t i cs & Al l i e d Worke rs Int ’ l U ni on , 95 8 F
. 2d 1429 ( 7th C ir. 19 92 ); M e rk v. Je wel Fo od Stores D i vi s i on , 94 5 F
. 2d 889, 89 4 (7 th C ir. 19 91 ); Agui naga v. U nited Food& Com m e r ci al Worke rs Int ’ l U ni on , 993 F.2d 1463, 1468 -70 (10th C ir. 1993). T h e p lain t i f f s in o u r c as e d o n otalleg e a br ea c h of fair re p re se n ta tio n by th e u n ion , as t h ey are en t i t led to d o in a su i t to e nf o r ce r i g ht s unde r a c o l l ec ti ve b ar g aini ng agr eem ent, wh i ch thi s s uitin parti s. But the om i ssi on tu r ns ou t no t to matt er . The pl anfi duci ar i es a r e to the pl anpa r ti ci pan ts a nd b en efi ci ar i es a s t he uni o n i s to the w or ker s i t r epres ents; the unio n to o i s a fi du ci ar y, and i ts du ty off air r epres entat i on i s s i m plyano thernam e for “fi du ci ar y duty. ” W el f ar e pl ans no rm al l y a nd i n thi s ca se do no t cr ea te v es te d r i g ht s;the y c anb e ch an g ed wi th o ut th e c on se n t o f th e p ar tic ip an ts an d be n efic iar ie s . H ug hes10 N o. 07

- 2778 Ai r c r a f tC o . v . Ja c o b s on , 525 U .S. 43 2, 44 3 (1 99 9); C urtissWrigh t C o rp. v . S c ho o nejo ng en , 5 14 U. S
. 7 3, 7 8 ( 19 95 )
. But j ust a s in the col l ecti ve bar gai ni ng se tting, i t i s a br each offi du ci ar y duty to change the pl an w ithout noti ce t o th os e a ffec te d by th e c h an ge . Sm ith v. N ational Credi t U nio n A dm inistra tiv e B o a rd, 36 F. 3d 1077, 1081 (11th Cir. 1994 )
. I t i s a l so a s tatutor y vio l ati on; a pla n’s part i ci pants an d be n efic iar ies m u st be n ot ified in w rit in g of a ll m od ific at ion s t o t h e p lan . 29 U .S.C . § 10 24 (b )(1) ; Godwin v. Sun Li f e Ass uranc e Co. of C anad a , 980 F.2d 323 , 327 (5th C ir. 19 92 )
. W i th o ut k no wl edg e o f th ei r r i g ht s unde r the pl an, parti ci pants ca nnot m ake i nt elli gent deci si ons w i th re gar d to the purchas e o fpri vate heal th i nsura n ce t o re pla ce o r supp lem en t thei r pla n benefi ts. The se cre t sid e d ea l be tw ee n th e u n i o n an d th e e m p loy er in t h is case was a bre ach of the pl an m anage rs ’ fi du ci ar y duty to th e p lan p ar tic ip an ts an d be n efic iar ies . So it is d ou b ly unl awful

— as unw ri tte n and as secr et. Tha t co m pl etes o urdi sc us si o n o fl i ab i l i ty
. Butthe defe nd ants al so quarr elwith the aw ar d ofdam age s. They say th e j ud ge s h o uld not h ave aw ard ed the p lai nt iffs the c osto fthe prem i um s that the pl ai nti ff s had to pay i n or der t o ke ep thei r heal th i nsurance i n f or ce a fter th e p lan w ro n gfu lly em p tie d O rt h ’s s ick -lea ve ac c ou n t. It i s t r ue tha tc o ns e qu e nt i a l da mag e s c a nn o tb e r e c o v er ed in a su it u n d er E R ISA
. M assachus e t t s M ut ual Li f eIns . Co. v. R u s s e ll, 47 3 U .S. 13 4, 14 8 (1 98 5); M cD ona ld v. Household In t ’ l, Inc . , 4 25 F
. 3d 42 4, 4 29

- 30 ( 7th Ci r . 2 00 5)
. Had the O rths pa id h igher p rem ium s to anot he r health in s u r er, they could notr eco verthe differ ence between tho se pr emi um s an d the pr emi um s th e co l l ecti ve ba r g aini ngN o. 07

- 2778 11 ag re em en t req u ire d th e pla n t o p ay . Z ielinsk i v. P a bst Bre win g Co. , Inc . , 3 6 0 F
. S up p. 2 d 9 0 8 , 9 2 2

- 2 3 ( E. D. Wi s . 2 0 0 5 )
. B u ta l l th e y ar e s e e k i n gi s th e p r e mi u m r e i mb u r s e me n tt o w h i c h th e c o n t r a c te n t i t l e s th e m. T he d efen dan ts c ha l l en g e th e di st r i ctj udg e’ s awar di ng at to r ne y s’ fee s to the p la i nt i ff s. The y a r g ue tha t th e j udg e w as m is ta k ent o thi nktha t th er e ha d b ee n n o reason able basis (or, equ ivalently, as t h e Sup rem e C ou rt no te d i n Pie r cev. U nde r wood, 487 U
. S. 5 5 2 , 5 6 5-66 (1988), “s ubs ta nt i alj us ti fi ca ti o n” ) f o r the de fen dan ts ’ po si ti o n. He r m an v. Ce nt r al St at e s , So ut he as t& So ut hwe s tAr e as Pen s i on Fun d, 423 F.3d 684 , 696 (7th C ir. 2005); Pr oduc t i on & M a i n tena nc e E m plo yees’ Lo ca l 50 4 v . Ro a dm a ster C o rp . , 95 4 F.2 d 13 97, 14 04 (7t h C i r . 1 99 2); C line v . Indu strial M a inten an c eEn gi n e e r i n g & Con t r ac t i n g Co
. , 20 0 F
. 3d 1223 , 12 36 ( 9th Ci r . 2 00 0)
. The j udg e m ade n o mis ta k e. No c ar eful l aw yerco uld have tho ught thi s a cas e o fl ate nt am bi gui ty or val i d m odi fi cati on. A nd f or the defe nd ants to use thei r decepti ve conduct to w ar d the ret i re d em plo yee s a s a b as is for try in g t o d u c k liab ility w as sh ab b y. T h e o n ly q u es tio n ab le a sp ec t o f th e d ist r i c t ju d ge ’s o p in ion is h is st at ement th at th e defen dan ts wer e ac tingthrougho ut i n g o o d f ai th

. Th e de fe nd a nt s c o mpl a i n fi na l l y a b o ut the a mou nto f attorn eys’ fees aw ard ed to the p lai nt iffs

— near l y $ 41, 000. Th a ti s a l mos ta s much as the p l a i nt i ff s ’ r e med i a l a wa r d, w hi ch co nsi ste d of$3 6, 000 re sto re d to M r. Orth’ s s i ck lea ve acco unt ( $40, 000 m i nus 10 perce nt) plus $7, 200 in prem i um r ei m burse m ent. Even i fthe att orneys ’ fee aw ard had exc eed ed th e plaintiff’s rem ed ialaw ard12 N o. 07

- 2778 (w h ich it m ay h av e d on e, sin c e t h e s ick lea ve ac c ou n t is m er el y a c re d i t a gai nst insurance prem i um s no t y et charg ed), the dis propor ti on would notnece ssa ri l y m atter
. For the g ener alpri nci ple , se e C ityo f R iversid e v. R ivera , 4 7 7 U .S. 56 1, 58 0-8 1 (1 98 6); M ol narv. Boot h, 2 2 9 F
. 3 d 593, 605 (7th C ir. 2000); Tuf Raci ng Prod uc t s , Inc . v. Am e r i ca n Su z uk i M o to r C o rp . , 22 3 F
. 3d 585, 59 2 (7 th Ci r. 20 00) , and f or i ts appli cati on to E RI SA see U ni t e d Autom ob i l eWorke rs Lo ca l 25 9 S o cia l Secu rity D ept. v. M etro A uto C enter, 50 1 F
. 3d 283, 29 2-9 3, 29 6 (3d C ir. 20 07 ); Buil di ng Se r vi ceLo ca l 47Cl e ani ng Cont r ac t ors P e ns i on Plan v. G r andv i e w Race way, 46 F. 3d 1392 , 1401 ( 6th Cir. 1995). There ar e fi xed cost s o fl i ti gat i on, and theypre vent a p lain tiff fro m sc alin g d ow n h is e x p en se s p r o p o rt ion at ely to th e s ta ke s. Tuf Raci ng Prod uc t s , Inc . v. Am e r i can S uz uki M o to r C o rp ., sup ra , 22 3 F
. 3d at 592. One p u rp os e o f al l o wi nga n a war d o fa tt orney s’ fee s to a pr ev ai l i ng pla i nti ffi s t o disabl e defendants fro m i nfl i cti ng with im p un ity sm alll osses on th e pe op le w hom they w rong. Cf. Hyde v. Sm all , 1 23 F
. 3d 58 3, 5 85 ( 7th Ci r . 1 99 7)
. Acco m pl i sh

i ngtha tp ur po s e wi l l o ft e n r e qu i r e a fe e a wa r d e qu a l to o r l a r g e r tha n the da mag e s a wa r de d. A FFI RMED .

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