2010 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-21-2010

Anthony Mazza v. Sheet Metal Workers' National

Precedential or Non-Precedential: Non-Precedential

Docket No. 10-1248

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Recommended Citation

"Anthony Mazza v. Sheet Metal Workers' National" (2010). 2010 Decisions. Paper 46.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 10-1248

_____________

ANTHONY MAZZA; MAZZA SHEET METAL CO., INC. 

v.

SHEET METAL WORKERS' NATIONAL PENSION FUND,

 Appellant

On Appeal from the United States District Court

for the District of New Jersey

(Civ. No. 09-281)

District Judge: Hon. Katharine S. Hayden

Submitted Under Third Circuit LAR 34.1(a)

November 17, 2010

Before: BARRY, CHAGARES, and VANASKIE, Circuit Judges.

(Filed December 21, 2010 )

____________

OPINION

____________

CHAGARES, Circuit Judge.

Plaintiffs Anthony Mazza and Mazza Sheet Metal Company, Inc. seek a refund of 

contributions made to defendant Sheet Metal Workers‟ National Pension Fund on behalf 
2

of Anthony Mazza, as the owner-operator of Mazza Sheet Metal. Following a bench trial 

on the issue, the District Court held that, as a matter of equity, the plaintiffs were entitled

to restitution of the contributions. Because we find that § 403(c) of the Employee 

Retirement Income Security Act (“ERISA”) prohibits such restitution under the 

circumstances, we will reverse.

I.

We write solely for the benefit of the parties and will, therefore, only briefly recite 

the essential facts. In 1990, Anthony Mazza, a union sheet metal worker, started Mazza 

Sheet Metal Company and became what is known in the industry as an “owner-operator.” 

This meant that he could operate as an employer of other sheet metal workers, but remain

a union journeyman and perform sheet metal work alongside his employees. 

Mazza Sheet Metal entered into a collective bargaining agreement (the 

“Agreement”) with Sheet Metal Workers‟ International Union Local 25 (“Local 25”), 

which required Mazza Sheet Metal to make pension contributions to the Sheet Metal 

Workers‟ National Pension Fund (the “Fund”) on behalf of any union journeymen hired 

to work on Mazza Sheet Metal‟s contracts. The Agreement further required Mazza Sheet 

Metal to contribute to the Fund on behalf of Anthony Mazza for any hours of sheet metal 

work that he performed alongside his employees. If Mazza Sheet Metal‟s contributions 

to the Fund failed to account for the hours of sheet metal work performed by Anthony 

Mazza, it would no longer be eligible to hire union journeymen from Local 25.

Mazza Sheet Metal began contributing to the Fund for Anthony Mazza‟s hours, as 

well as for those of the union journeymen that he hired in 1991, in accordance with the 
3

Agreement. In July 1996, however, the Fund sent Anthony Mazza a letter advising him 

that, in order to be approved as an owner-operator plan participant and receive pension 

credits for the contributions made on his behalf, he had to file an owner-operator 

registration statement, which would have obligated him to contribute for at least 1,680 

hours of his own work per year, regardless of the hours that he actually worked. The 

Fund enclosed in this letter a refund form that Anthony Mazza could submit for return of 

his personal contributions if he chose not to register as an owner-operator. 

Because Anthony Mazza performed far fewer than 1,680 hours of sheet metal 

work in a year, he did not file the registration statement. But, because he also did not 

want to forfeit his ability to hire union journeymen, he continued to contribute to the 

Fund for the hours that he actually worked, as required by the Agreement, without 

responding to the Fund‟s communication. The Fund sent Anthony Mazza a “FINAL 

NOTICE” in November 1996, informing him that all of his personal contributions would 

be stricken within 30 days unless he filed the owner-operator registration statement. Still, 

he decided not to respond to the Fund‟s communication because he needed to remain 

eligible to hire union journeymen in order to complete his contracts and maintain his 

company‟s economic viability.

Effective January 1, 2002, the Fund changed its contribution requirements, such 

that owner-operators could participate in the Fund without filing the owner-operator 

registration statement that required them to contribute for 1,680 hours per year. Anthony 

Mazza received a notice alerting him to this change. The notice also made clear, 

however, that owner-operators still needed to file the registration statement in order to 
4

receive pension credits for hours worked before the change took effect. As such, the 

Fund enclosed a retroactive registration statement, which had to be returned within sixty 

days to prevent removal of pension credits for all hours worked prior to January 1, 2002. 

Though Anthony Mazza received and understood this communication, he continued to 

make contributions, without filing the retroactive registration statement or otherwise 

responding to the Fund. Having received no response, the Fund sent a second copy of 

both the policy change notice and the retroactive registration statement on December 16, 

2002. Again, Anthony Mazza did not respond.

The Fund sent Anthony Mazza a final letter on April 24, 2003, stating that, 

because it had received no response from Mazza Sheet Metal, the Fund‟s Trustees had 

determined that the contributions made on behalf of Anthony Mazza, prior to January 1, 

2002, were remitted in error. The letter informed Mazza Sheet Metal that it had six 

months to either request a refund of the mistaken contributions or file an executed 

retroactive registration statement, if the contributions were not in fact mistaken. The 

letter further made clear that a refund was not automatic and that a refund would no 

longer be available after the six-month period lapsed. Though he acknowledges that he

received and understood this letter, Anthony Mazza still did not respond to the Fund. 

In 2008, two years after retiring, Anthony Mazza applied for a pension based on 

the contributions Mazza Sheet Metal made on his behalf between 1991 and 2001, but the 

Fund denied his application on the basis that he had never been a participant in the Fund

during that period. Anthony Mazza then filed this action seeking a refund of his

contributions. He alleged that it was inequitable for the Fund to retain his contributions 
5

without providing him a pension in return. The District Court, rejecting the Fund‟s 

arguments that § 403(c) of ERISA prohibited it from refunding the contributions under 

the circumstances, found that the Fund had been unjustly enriched by the contributions 

and ordered restitution. 

II.

The District Court had jurisdiction over this action pursuant to 28 U.S.C. § 1331 

and 29 U.S.C. § 1132. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

“We exercise plenary review of the district court's legal conclusion[] that 

restitution was an appropriate remedy. If the district court did not err in its legal 

conclusions, our review of the district court's assessment of the equities is for abuse of 

discretion.” Luby v. Teamsters Health, Welfare, & Pension Trust Funds, 944 F.2d 1176, 

1185-86 (3d Cir. 1991).

III.

Section 403(c)(1) of ERISA establishes that the assets of a multiemployer fund 

shall never inure to the benefit of an employer; rather, the fund‟s assets must be held for 

the exclusive benefit of plan participants and their beneficiaries (the “anti-inurement and 

exclusive benefit rule”). 29 U.S.C. § 1103(c)(1). As a general matter, therefore, it is a 

violation of § 403(c)(1) to pay out to an employer, whether by way of refund or 

otherwise, contributions made to a multiemployer fund. But § 403(c)(2)(A)(ii) carves out 

a narrow exception: it does not violate the anti-inurement and exclusive benefit rule to 

refund a contribution made mistakenly by an employer, if such refund is made within six 
6

months after the plan administrator determines that the employer made the contribution in 

error. See 29 U.S.C. § 1103(c)(2)(A)(ii). 

While “[s]ection 403(c)(2)(A)(ii) makes it possible for the trustees of a fund to 

refund mistaken contributions without facing a suit from beneficiaries for violating the 

non-inurement provision of section 403(c)(1)[,]” it “neither requires such refunds to be 

made, nor provides employers a right of action against the fund if such refunds are not 

made.” Plucinski v. I.A.M. Nat‟l Pension Fund, 875 F.2d 1052, 1055 (3d Cir. 1989). In 

the context of ERISA, however, Congress has authorized the federal courts to create 

common law, where it is “„necessary to fill in interstitially or otherwise effectuate the 

statutory pattern enacted in the large by Congress.‟” Id. at 1056 (quoting Van Orman v. 

Am. Ins. Co., 680 F.2d 301, 312 (3d Cir. 1982)). In accordance with that authority, this 

Court has held that, as a matter of federal common law, there exists “an equitable cause 

of action by employers for the recovery of contributions erroneously paid to pension 

funds due to a mistake of fact or law.” Id. at 1057. This cause of action is necessary to 

fill in the interstices of § 403(c), which provides a framework for the return of mistaken 

contributions to employers, but does not provide employers with a mechanism for 

enforcing the right to a refund conferred on them by this framework. See id. “Of course, 

general equitable principles govern” and the court should, in its sound discretion, award 

restitution only when the equities favor such an order. Id. at 1057-58. 

Regardless of the equities at stake, however, “resort to federal common law 

generally is inappropriate when its application would conflict with the statutory 

provisions of ERISA. . . .” Singer v. Black & Decker Corp., 964 F.2d 1449, 1452 (4th
7

Cir. 1992). “If federal common-law restitution would contravene a [statutory or 

contractual] term of an ERISA plan, it will be permitted only if there is a „particularly 

strong affirmative indication that such a right would effectuate a statutory policy.‟”

Luby, 944 F.2d at 1186 (quoting Van Orman, 680 F.2d at 312-13). It is for this reason 

that we emphasized in Plucinski that the equitable cause of action we recognized merely

fills in the interstices of the statutory scheme enacted by Congress in § 403(c) of ERISA. 

875 F.2d at 1058. Accordingly, this equitable remedy is inherently moored in and 

bounded by the narrow exception to the anti-inurement and exclusive benefit rule set 

forth in § 403(c)(2): no restitution may be made unless the employer establishes a right 

to a refund of the amount mistakenly contributed by filing a claim within six months of 

the plan administrator‟s determination that the contribution was made in error. See also

26 C.F.R. § 1.401(a)(2)-1(b) (explaining, with reference to the parallel provision of the 

Internal Revenue Code, that a refund is deemed timely only if the employer files “a claim 

with the plan administrator within six months after the date on which the plan 

administrator determines that a mistake did occur.”).

IV.

In our analysis of this case, “[w]e begin with a fundamental premise: every claim 

for relief involving an ERISA plan must be analyzed within the framework of ERISA.” 

Hooven v. Exxon Mobil Corp., 465 F.3d 566, 573 (3d Cir. 2006). Notwithstanding this 

dictate, the District Court held that the constraints set forth in § 403(c) of ERISA did not 

govern the refund request at issue here because the applicable remedy — that created by

Plucinski — was a creature of federal common law, not a creature of statute. See 875 
8

F.2d at 1057. Applying only general common law principles of equity, the District Court

found that the Fund had been unjustly enriched when it accepted and retained employer 

contributions on behalf of Anthony Mazza with the knowledge that he would not receive 

pension credits in exchange. Because the District Court did not view the April 24, 2003, 

letter against the backdrop of § 403(c) of ERISA, it found the six-month time limit placed 

on any refund request to be arbitrary, especially in light of the fact that the lengthy delay 

in the plaintiffs‟ refund claim had caused no demonstrable prejudice to the Fund. 

Accordingly, the District Court concluded that the equities weighed in favor of the 

plaintiffs and that restitution of the employer contributions was, therefore, an appropriate 

equitable remedy.

While we agree that the remedy recognized in Plucinski is a matter of federal 

common law, it is not a free-standing common law cause of action. Rather, as discussed 

above, the equitable cause of action for recovery by an employer of erroneously paid 

pension fund contributions exists only in the interstices of § 403(c) of ERISA. Indeed, 

this Court invoked general equitable principles expressly for the purpose of 

“effectuat[ing] the statutory pattern enacted in the large by Congress.” Plucinski, 875

F.3d at 1056. Notably, Anthony Mazza does not dispute that, as owner of Mazza Sheet 

Metal, he qualified as an “employer” for purposes of § 403(c) of ERISA. And neither is 

there any dispute that the Fund is a multiemployer ERISA plan. Thus, we must conclude 

that the District Court erred in deciding this case without regard to the limits of § 403(c). 

With that in mind, we turn to the application of the equitable remedy recognized in 

Plucinski to the facts of this case. 
9

Even assuming that the equities presented by this case indeed favor the plaintiffs,

as the District Court found,1a court should not easily fashion an equitable remedy, under 

the guise of federal common law, that contravenes ERISA‟s carefully crafted statutory 

scheme. Luby, 944 F.2d at 1186 (quoting Van Orman, 680 F.2d at 312-13); see also

Ryan ex rel. Capria-Ryan, 78 F.3d 123, 126 (3d Cir. 1996) (quoting Mertens v. Hewitt 

Assocs., 508 U.S. 248, 258-60 (1993) (“As the Supreme Court has explained, „[t]he 

authority of courts to develop a „federal common law‟ under ERISA ... is not the 

authority to revise the text of the statute.‟”)). The plaintiffs admit that they did not make 

the contributions at issue here in error. Instead, they very deliberately made the 

contributions so as to comply with the Local 25 collective bargaining agreement. Under 

such circumstances, providing the plaintiffs with a refund of the contributions runs afoul 

of §403(c) of ERISA, which excuses from the requirements of the anti-inurement and 

exclusive benefit rule only a refund of those employer contributions that were made on 

the basis of a mistake of fact or law. 

 

1 Because we conclude below that the District Court erred in its legal conclusion that 

restitution was an appropriate remedy, we find it unnecessary to review the District 

Court‟s assessment of the equities for an abuse of discretion. Nonetheless, we note that it 

is not entirely clear that the equities involved in fact favor the plaintiffs. After all, the 

plaintiffs did receive a benefit from the contributions. By making the contributions on 

behalf of Anthony Mazza, Mazza Sheet Metal was able to hire the union workers that it 

needed to complete its contracts and remain in business, which inured to the benefit of its 

owner, Anthony Mazza. And courts generally recognize that restitution is inequitable 

where the payor seeks to recoup a payment, though he has obtained a benefit from that 

payment which he intends to retain. See Operating Eng‟rs Local 139 Health Benefit 

Fund v. Gustafson Constr., 258 F.3d 645, 651 (7th Cir. 2001). 
10

Moreover, even if the contributions can indeed be deemed mistaken, restitution on 

the facts of this case still falls outside the scope of § 403(c)(2)‟s narrow exception to the 

anti-inurement and exclusive benefit rule because Mazza Sheet Metal failed to file a

refund claim within six months of the plan administrator‟s determination that the 

contributions were made in error. Anthony Mazza admits that he received a letter from 

the Fund, dated April 24, 2003, which stated that the Fund‟s Trustees had determined the 

contributions made on his behalf to have been erroneous. This letter also provided a 

remedy for such error that comported precisely with the requirements of ERISA, as 

informed by the regulations associated with the parallel provision of the Internal Revenue 

Code: it granted Mazza Sheet Metal six months from the date of the notice to file a claim 

for a refund. But Anthony Mazza chose not to take advantage of this remedy because he

wanted to continue to hire union workers to fulfill Mazza Sheet Metal‟s contracts and, in 

order to remain eligible to do so, his company had to make contributions to the Fund for 

the hours of sheet metal work that he performed. The plaintiffs waited five more years to 

seek a refund of the contributions made on Anthony Mazza‟s behalf by filing this action. 

Yet, by that time, it was far too late for the Fund to refund the contributions — to have 

done so would have been a violation of § 403(c)(1)‟s anti-inurement and exclusive 

benefit rule.

In short, it appears that by ordering restitution of employer contributions that were 

not remitted in error, and for which no timely refund request was made, the District Court

ordered the Fund to do something, in the name of federal common law, that contravenes

§ 403(c) of ERISA. ERISA only leaves room for such a course of action when there 
11

exists a “particularly strong affirmative indication” that the equitable remedy ordered 

“would effectuate a statutory policy.” Luby, 944 F.2d at 1186 (quotation omitted). 

Section 403(c) places strict limits on the circumstances under which a multiemployer 

fund may refund employer contributions in order to further ERISA‟s primary purpose of 

protecting and stabilizing the assets of employee pension plans, thereby safeguarding the 

interests of plan participants and their beneficiaries. See State St. Bank & Trust Co. v. 

Denman Tire Corp., 240 F.3d 83, 89 (1st Cir. 2001) (citing 29 U.S.C. § 1104(a)(A)(i)-

(ii)). Viewed in this light, we can discern no “particularly strong affirmative indication” 

that the purposes of ERISA would be served by restitution of employer contributions 

under the circumstances presented here.

2

IV.

For these reasons, we will reverse the judgment of the District Court.

 

2

The District Court seems to have been persuaded that, because Anthony Mazza, as an 

owner-operator, was both an employer and a plan participant, restitution of the 

contributions made on his behalf would not undermine ERISA‟s primary purpose of 

protecting plan beneficiaries. But, though Anthony Mazza performed sheet metal work 

alongside his employees, he was only an employer in relation to the Fund. Indeed, he 

admits that he understood that he did not qualify as a plan participant, but that Mazza 

Sheet Metal continued to contribute to the Fund on his behalf because he wanted to 

remain eligible to hire union workers.