2013 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit

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w . v i l l a no v a . e du/thir dc ir c uit_2013/217NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

_____________ No. 12

- 4310

_____________ KAREN JENKIN S ; JACQUELINE MAYS; TERESA LATTANZE; TORY JOHNSON; JOHN VAN ALLEN, III; JOHN DOE; LINDA RUSSEL; DONNA ANDERSON; RAYMOND GUNTHER; S HARON SCHULTZ; MICHELLE QUARLES; SUSAN LOLLI; DEBRA KONTRA, Appellants.

v. UNION LABOR LIFE COMPANY; AMALGAM ATED LIFE INSURANCE COMPANY; INDUSTRIAL TECHNICAL AND PROFESSIONAL EMPLOYEES UNION; OFFICE AND PROFESSIONAL INTERNATIONAL UNION,

_______________ On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 10

- cv - 0 736 1) District Judge: Hon. Harvey Bartle, III

_______________ Submitted Under Third Circuit LAR 34.1(a)

September 10, 2013 Before: RENDELL, JORDAN and GREENAWAY, JR., Circuit Judges

.

(Filed : September 16, 2013 )

_______________ OPINION OF THE COURT

_______________2

JORDAN, Circuit Judge

. Karen Jenkin s and eleven other former employees ( collectively, the “Employees”) of The Amalgamated Life Insurance Company (“ALICO” or “Amalgamated Life” ) appeal a grant of summary judgment to ALICO by the United States District Court for the Eastern District of Pennsylvania on their claims for violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002 et seq. For the following reasons, we will affirm

. I. Background
A. Facts 1. ALICO H ires the Employees Prior to May 9, 2004, the Employees worked in the claims department of The Union Labor Life Insurance Company, Inc. (“ULLICO”) at a facility in King of Prussia, Pennsylvania , known as the Pennsylvania Service Center (“PSC”). W hile employed by ULLICO, the Employees were members of the Office and Professional Employees International Union ( the “OPEIU”), Local 153 , and the terms and conditions of their employment were governed by a collective bargaining agreement. As employees of ULLICO, they were participants in a defined benefit pension plan. On March 9, 2004, ULLICO enter ed into agreements pursuant to which it would

outs ource its claims administration services to ALICO beginning on May 10, 2004

. Under those agreements, PSC e mployees would have the opportu nity to work for3

ALICO . T he agreements did not , however, require ALICO to maintain their pension benefits , nor did they provide for the transfer to ALICO of any part of ULLICO‟s defined
benefit pension plan

. On March 11, 20 04 , ULLICO provided the PSC e mployees with letters informing them about the transition of their employment to ALICO. Thos e letters told them that ALICO‟s “offer of employment likely will include permanent changes in the salary, benefits, and other terms a nd conditions of employment that you have experienced with ULLICO.” (App. at 537.) The following week , ALICO distributed a document to the PSC e mployees containing “Questions and Answers for [ULLICO] Staff about Amalgamated Life” (the “Q&A”). (App. at 129 .) The Q&A responded to the question “[i]s there a Pension
Plan ? ” by stating that “[t]here is a 3

- year eligibility period for PSC employees to join the Amalgamated Life staff pension plan. Once you become eligible, the 3

- year wait period will be credi ted towards the 5

- year ve sting requirement.” (App. at 130 .) A t a round the same time, ALICO distributed to the PSC employees a document providing a general overview of certain employment benefits (the “General Overview”). The General Overview re fers to a 401(k) savings plan but does not mention a defined benefit pension plan. ALICO extended offers of employment to each of the Employees in letters dated April 7, 2004 , that provided that, if they accepted, they would become ALICO employees on May 10, 2004. With respect to ben efits, the letters reminded them that they had4

“ received a General Overview ” giving “ a quick summary of our benefit programs.” (App. at 8 (italics in original) (internal quotation marks omitted) .) None of the Employees asked abo ut participation in a defined benefit pension plan when they received their offers of employment. All of the Employees acc epted those offers , ULLICO terminated them on May 9, 2004, and they became AL ICO employees on May 10, 2004.
2. The Collective Barg aining Agreements Days earlier, o n May 7, 2004 , ALICO and the Industrial, Technical and Professional Employees Union ( the “ITPEU”), a union affiliated with OPEIU, signed a memorandum of understanding , stipulating that the ITPEU would be the exclusive
repre sentative for the PSC employees for the purpose of negotiating a collective bargaining agreement

. The ITPEU subsequently raised the possibility of t he new ALICO employees participating in a defined benefit pension plan , but ALICO said that it could not af ford to provide those benefit s to them . In December 2004, ALICO and the ITPEU signed an agreement (the “2004 CBA”) that would govern the terms of the PSC

e mployees‟ employment until December 31, 2006. The 2004 CBA did not contain any provision that entit led the PSC e mployees to participate in ALICO‟s defined benefit pension plan, although it did provide that they could participate in a 401(k) savings plan

. Each of the Employees received a copy of the 2004 CBA.5

In March 2007, ALICO and the ITPEU entered into a second agreement (the “2007 CBA”) that woul d govern the conditions of the PSC e mployees‟ employment from January 1, 2007 , through December 31, 2009. During the negotiation of the 2007 CBA, the ITPEU again raised the possibility of the PSC employees ‟ participation in a defined benefit pension plan, but ALICO again rejected that request, and the union settled for increased wages and enhanced severance be nefits

. As with the 2004 CBA, each of the Employees received the 200 7 CBA and could note that it d id not provide for participation in a defined benefit pension plan

. In 2009, ALICO and the ITP EU began negotiating a third agreement . In April 2010, after ITPEU members had a lready rejected one proposed agreement , ALICO proposed two alternatives, bo th of which provided that PSC employees would become participants in a defined benefit pension plan. Under one alternative, employees who me t the plan‟s vesting requirem ents would accrue benefit s beginning in June 2009, and under the other, they would rec eive higher cash compensation but would accrue benefits only
after January 2011. The PSC employees voted to accept the second proposal, and, on May 4, 2010, ALICO and the ITPEU entered int o a memorandum of understanding that fixed the terms of their conti nuing employment (the “2010 MOU”).

3. ALICO Terminates the Employees In 2007, ULLICO decided not to renew its administrative service agreements with ALICO, but it agreed to a more limited arrangement that reduced t he volume of claims6

processed at the PSC

. At that time, ALICO considered closing the PSC and moving ULLICO‟s remaining claims processing work to one of its other offices, but decided not to. However, the lease on the PSC facility was due to expire in February 2011, and, i n April 2 010, ALICO beg an to consider closing it . Over the next several months, ALICO reviewed a number of options for the PSC, ultimately deciding to consolidate it with another of the company‟s operations. On October 8, 2010, ALICO informed PSC

e mplo yees that it was closing the facility , and their employment was terminated on October 29, 2010.
B. Procedural History Following their termination , the Employees filed an eight

- count complaint agains t ULLICO, ALICO, the OPEIU, and the IT PEU , alleging that they had been imprope rly denied benefits under ALICO‟s defined benefit pension plan. The complaint stated claims for violations of ERISA, seeking relief based on theories of unjust enrichment and equitable estoppel, and for violations of the National L abor Relations Act, 29 U .S.C. §
151 et seq. , and the Labor Management Relations Act, 29 U.S.C. § 141 et seq

. Following discovery, each of the four defendants moved for summary judgment as to the claims against it. In response, the Employees stipulated to the dismissal of all claims against ULLICO, the OPEIU, and the ITPEU. The District Court granted ALICO‟s motion to dismiss some of the claims against it, leaving only the ERISA claims

.7

On October 24, 2012, the District Court granted summary judgment to ALICO on those claims as well. The Employees filed this timely appeal

. II . Discussion 1 The Employees have appealed only the District Court‟s grant of summary judgment to ALICO on their equitabl e estoppel claim. ERISA § 502(a)(3) provides that “a beneficiary may „obtain ... appropriate equitable relief ... to redress [ERISA] violations or ... to enforce any provisions of [ERISA].‟” Pell v. E.I. DuPont de Nemours & Co.,
Inc. , 539 F.3d 292, 300 (3d Cir. 2008) (alterations in original) (quo ting 29 U.S.C. § 1132(a)(3)). “A bene ficiary can make out a claim for appropriate equitable relief based on a theory of equitable estoppel.” Id. (citation and internal quotation marks omitted). But “[t] o succeed under this theory of relief, an ERISA plaintiff must establish (1) a

1 The District Court had jurisdict ion pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e), (f). We have jurisdiction pursuant to 28 U.S.C. § 1291. “We review de novo district court orders granting or denying summary judgment,” Elassaad v. Independence Air, Inc. , 613 F.3d 119, 124 (3d Ci r. 2010), “apply[ing] the same test required of the district court and view[ing] inferences to be drawn from the underlying facts in the light most favorable to the nonmoving party,” Bayer v. Monroe Cnty. Children & Youth Servs. , 577 F.3d 186, 191 (3d Cir. 2009). Summary judgment is proper when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). We “may affirm the district court on grounds different from those relied on by the district court,” In re Mushroom Transp. Co. Inc. , 382 F.3d 325, 344 (3d Cir. 2004), and “for any reason supported by the record,” Brightwell v. Lehman 637 F.3d 187, 191 (3d Cir. 2011).8

material m isrepresentation, (2) reasonable and detrimental reliance upon the representation, and (3) extraordinary circumstances.” Curcio v. John Hancock Mut. Life
Ins. Co. , 33 F.3d 226, 235 (3d Cir. 1994). Moreover, t he Employees “bear the burden of proof on each estoppel element.” Int’l Union, U.A.W. v. Skinner Engine Co. , 188 F.3d 130, 152 (3d Cir. 1999). Because we conclude that the Employees have not me t their burden with respect to either reasonable reliance or extraordinary circumstances, we confine our discussion to those two requirements.
A

. Reasonable Reliance To prevail on th eir equitable estoppel claim, “[a]s the phrase „reasonable and detrimental reliance‟ implies, ... [the Employees] must show (1) reasonableness and (2) injury.” Pell , 539 F.3d a t 301 (quoting Curcio , 33 F.3d at 237). The District Court did not address the reasonab leness of the Employees‟ alleged reliance, and concluded only that the evidence supports an inference th at at least some of them “relied to their
detriment on [ ALICO ] ‟ s misrepresentation regarding pension benefits. ” (App. at 31.) The Employees likewise focus on the element of injury , arguing that some of them would not have accepted ALICO‟s April 2004 offers of employment if they had known that they
would not be enrol led in a defined benefit pension plan . The only evidence that the
E m ployees point to in support of the reasonable ness of their alleged reliance is the Q&A and General Overview which had been provided to them

.9

W e conclude that that evidence is insufficient to meet the Employees‟ burden on
the el ement of reasonable reliance. Based on all of the documents that the Employees received, t his case is analogous to situations i n which participants know that th e plan
sponsor reserve s the right to alter or eliminate benefi ts at any time. Even if one thought that the Q&A‟s statement about eligibility for a pension plan meant that there was a defined benefit plan, as opposed to a 401(k) plan, there were several subsequent communications making it clear that no defined benefit plan participation was offered until 2010. W e have said that “a participant‟s reliance on employer representations regarding benefits may never be „reasonable‟ where the participant is in possession of a

wr itten document notifying him of the cond itional nature of such benefits.” In re Unis ys Corp. Retiree Med. Benefits ERISA Litig. , 58 F.3d 896, 908 (3d Cir. 1995). And in such

cases, we and other courts of appeals have rejected estoppel claims due to the participants‟ failure to establish reason able reliance. See id. (concluding that the reservation of rights “undercuts the reasonableness of any detrimental relian ce” by the plan participants); Gordon v. Barnes Pumps, Inc. , 999 F.2d 133, 137 (6th Cir. 1993) (concluding that ERISA plaintiffs “have not shown that they reasonably and detrimentally relied on any statements by the comp any” where they “knew or should have know n from the express terms of the ... Plan that benefits could be altered at any time”); Alday v. Container Corp. of Am

. , 9 06 F.2d 660, 66 6 (11th Cir. 1990) (dismissing10

an equitable estoppel claim where the plan documents unambiguously stated that the employer reserved the right to modify or terminate the plan). In this case, the Employees were in possession of documents that informed them not only that ALICO might not include them in its defined benefit pension plan, but that,
i n fact, it had not done so. First, b efore they received the Q&A, the letters from ULLICO regarding its decision to outsource PSC services notified them that A LICO‟s “offer of employment likely will include permanent changes in the salary, benefits, and other terms and conditions of employment that you have experienced with ULLICO.” (App. at 537.) Second, the General Overview, which was the only benefits summa ry referred to in the letters offering employment to the Employees, referred only to a 401(k) savin gs plan and did not mention a defined benefit pension plan. Third, neither the 2004 CBA nor the
2007 CBA , copies of which were distributed to the Employees, provided for a defined benefit plan

. Cf. Allied Chem. & A lkali Workers of Am., Local Uni on No. 1 v. Pitt. Plate Glass Co., Chem

. Div. , 404 U.S. 157, 159 (1971) (“Under the National Labor Relations Act, ... mandatory subjects of collective bargaining incl ude pension and insurance benefits for active employees ... .”). Moreover, nothing in the record suggests that, when ALICO off

ered future participation in a defined benefit pension plan as part of the negotiation of the 2010 MOU , any of the Employees expr essed either surprise or dismay that they were not already vested participants in it. 2 We question whether the Employees

2 In fact, the PSC employees bargained to defer their accrual of benefits under the11

could establish any reliance, let alone reasonable reliance, on reference s in the General Overview and Q&A to potential pension benefi ts in deciding to accept or continue employment at ALICO. But, assuming they did rely on those documents , that reliance was not reasonable in light of subsequent communications.
B. Extraordinary Circumstances
Ev en if the Employees had established reasona ble reliance, “a plaintiff must do more than merely make out the ordinary elements of e quitable estoppel to establish a claim

... under ERISA.” Kurz v. Phila. Elec. Co. , 96 F.3d 1544, 1553 (3d Cir. 1996) ( internal quotation marks omitted). “O ur precedent s indicate that an ERISA reporting or disclosure violation, such as the distribution of an inaccurate summary plan description, cannot provid e a basis for equitable estoppel ... in the absence of „extraordinary
circumstances. ‟ ” Gridley v. Cleveland Pneuma tic Co. , 924 F.2d 1310, 1319 (3d Cir. 1991). 3 “Extraordinary circumstances can arise where there are „affirmative acts of fraud,‟ where there is a „network of misrepresentations ... over an extended course of dealing,‟ or where particular plaintiffs are e specially vulnerable.” Pell , 539 F.3d at 303

- 04 (alterations in original) (quoting Kurz , 96 F.3d at 1553 ). We have found extraordinary
ALICO defined benefit plan by another two years in return for additional compensation.

3 The “extraordinary circumstances” requirement comes from the fact that “ERISA contains two express causes of action to remedy reporting and disclosure violations as such,” Hozier v. Midwest Fasteners, Inc. , 908 F.2d 1155, 1167 (3d Cir. 1990) (citing 29 U.S.C. § 1132(a)(4), (c)), so those violations cannot ordinarily serve as the basis for substantive relief.12

circumstances when an insurer informed a patient that certain coverage would be provided and then denied coverage, Curc io , 33 F.3d at 238, when a defendant repeatedly misrepresented the scope of coverage to a plan participant, Smith v. Hartford Ins. Grp. , 6 F.3d 131, 142 (3d Cir. 1993), and when an employer failed to make required contributions and the plan administrator a llowed an employee to pay contributions himself, Rosen v. Hotel & Rest. Emps. & Bartenders Union , 637 F.2d 592, 598 (3d Cir. 1981). Applying tho se principles, we find no support for the Employees‟ claim that extraordinary circumstances exist. Far from bei ng the victims of a “network of misrepresentations, ” the Employees were plainly put on notice by the General Overview, the 2004 CBA, the 2007 CBA , and the 2010 MOU that they had not b een granted participation in any ALICO defined benefit pension plan prior to 2010. T he only conceivably confusing document was the Q&A that ALICO distributed , which, even if read to offer the possibility that p ension benefits would include a defined benefit plan ,

was qualified by the more complete General Overview referred to in the offers of

em ployment sent to the Employees. N othing in the rec ord suggests that the Employees

– represented as they were by the ITPEU , and capable of trading pension benefits for additional compensation when given the chance

– were especially vulne rable to the alleged misrepresent ations in the Q&A

. Cf. Curcio , 33 F.3d at 238 (finding special vulnerability where hospital denied coverage to patient for substantial claim after13

representing that there was coverage); Smith , 6 F.3d at 142 (same). The Em ployees have thus failed to demonstrate extraordinary circumstances, and the ir equitable estoppel claim under ERISA must fail.
III . Conclusion For the foregoing reasons, we will affirm the judgment of the District Court.