2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-8-2001

Foley v. Local 98 Pension

Precedential or Non-Precedential:

Docket 00-2767

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Recommended Citation

"Foley v. Local 98 Pension" (2001). 2001 Decisions. Paper 259.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/259
Filed November 8, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

Nos. 00-2767 and 00-4427 

EDWARD J. FOLEY, SR. 

v. 

INTERNATIONAL BROTHERHOOD OF ELECTRICAL 

WORKERS LOCAL UNION 98 PENSION FUND; 

INTERNATIONAL BROTHERHOOD OF ELECTRICAL 

WORKERS, LOCAL 98; SCOTT ERNSBERGER; JOHN J. 

DOUGHERTY, in his capacity as a TRUSTEE and as an 

officer and BUSINESS MANAGER OF LOCAL 98; EDWARD 

NIELSON, in his capacity as a TRUSTEE and as an officer 

of LOCAL 98; JOSEPH AGRESTI, in his capacity as a 

TRUSTEE; THOMAS J. REILLY, JR., in his capacity as a 

TRUSTEE; DENNIS LINK, in his capacity as a TRUSTEE;

WILLIAM RHODES, in his capacity as a TRUSTEE; ROY 

DANTZ, in his capacity as a TRUSTEE; LARRY J. 

BRADLEY, in his capacity as a TRUSTEE; FRED J. 

COMPTON 

International Brotherhood of Electrical Workers Local 

Union 98 Pension Fund, Scott Ernsberger, John J. 

Dougherty, in his capacity as a Trustee, Edward Nielson, 

in his capacity as a Trustee, Joseph Agresti, in his 

capacity as a Trustee, Thomas J. Reilly, Jr., in his 

capacity as a Trustee, Dennis Link, in his capacity as a 

Trustee, William C. Rhodes, in his capacity as a Trustee, 

Roy Dantz, in his capacity as a Former Trustee, and

Larry Bradley, in his capacity as a Former Trustee 

(Collectively the "Defendants"), 

 Appellants in No. 00-2767 
EDWARD J. FOLEY, SR. 

v. 

INTERNATIONAL BROTHERHOOD OF ELECTRICAL 

WORKERS LOCAL UNION 98 PENSION FUND; 

INTERNATIONAL BROTHERHOOD OF ELECTRICAL 

WORKERS, LOCAL 98 OF AMERICA; SCOTT 

ERNSBERGER; JOHN J. DOUGHERTY, in his capacity as 

a TRUSTEE and as an officer and BUSINESS MANAGER 

OF LOCAL 98; EDWARD NIELSON, in his capacity as a 

TRUSTEE and as an officer of LOCAL 98; JOSEPH 

AGRESTI, in his capacity as a TRUSTEE; THOMAS J. 

REILLY, JR., in his capacity as a TRUSTEE; DENNIS 

LINK, in his capacity as a TRUSTEE; WILLIAM RHODES,

in his capacity as a TRUSTEE; ROY DANTZ, in his 

capacity as a TRUSTEE; LAWRENCE J. BRADLEY, in his 

capacity as a TRUSTEE, 

 Appellants in No. 00-4427 

and FRED COMPTON 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civ. No. 98-906) 

District Judge: Honorable Lowell A. Reed, Jr. 

Argued October 9, 2001 

Before: SCIRICA, GREENBERG, and COWEN, 

Circuit Judges 

(Filed: November 8, 2001) 

 Laurance E. Baccini (argued) 

 Linda B. Hollinshead 

 Wolf, Block, Schorr & Solis-Cohen 

 1650 Arch Street, 22nd Floor 

 Philadelphia, PA 19103-2297 

 2 
 Richard B. Sigmond 

 Sagot, Jennings & Sigmond 

 Penn Mutual Towers, 16th Floor 

 510 Walnut Street 

 Philadelphia, PA 19106-3683 

 Attorneys for Appellants 

 Daniel P. McElhatton (argued) 

 Schubert, Bellwoar, Cahill & Quinn 

 Two Penn Center, Suite 1400 

 1500 JFK Blvd. 

 Philadelphia, PA 19102-1890 

 Edward J. Foley, Jr. 

 Garagozzo, Foley & Collazzo 

 410 N. 8th Street 

 Philadelphia, PA 19123-3903 

 Attorneys for Appellee 

OPINION OF THE COURT 

GREENBERG, Circuit Judge. 

This matter comes on before this court on appeal from an 

order of the district court entering judgment in favor of 

appellee Edward J. Foley, Sr., and against the International 

Brotherhood of Electrical Workers Local Union 98 Pension 

Fund (the "Pension Fund" or the "Fund"). 1 Foley claims that 

the Pension Fund's Board of Trustees ("Trustees") 

improperly declined to grant him an exception to the 

pension Plan's service eligibility provisions that would have 

permitted him to receive a higher level of benefits than that 

_________________________________________________________________ 

1. There is some question as to which of the defendants the district court 

entered judgment against. While the court apparently intended to enter 

judgment only against the Fund, and the district court docket reflects 

this disposition, the individual defendants nevertheless have appealed. 

Inasmuch as we conclude that Foley was not entitled to a judgment 

against any of the defendants, the question is of no practical 

significance. However, as a matter of convenience, we will treat all the 

individual defendants except Fred Compton as appellants, as they in fact 

appealed. 

 3 
to which he otherwise was entitled. Following a bench trial, 

the district court concluded that the Trustees arbitrarily 

and capriciously declined to apply the exception to Foley in 

the manner they had applied it to other employees seeking 

its benefit. Thus, it entered judgment in his favor on 

August 29, 2000. Appellants assert that the district court, 

when reviewing the Trustees' decision, erred in its

application of the arbitrary and capricious standard, as 

Foley was not similarly situated to other employees to 

whom the Trustees had applied the exception. Appellants 

also appeal the district court's subsequent award of 

attorneys' fees to Foley by order of December 8, 2000. For 

the reasons set forth below, we will reverse the district 

court's judgment on the merits and, accordingly, we also 

will reverse the award of attorneys' fees. 

I. BACKGROUND 

Foley is the former President of the International 

Brotherhood of Electrical Workers Local 98 (hereinafter "the 

Union") and a former Trustee of the Union's Pension Fund. 

He worked in covered employment for Fund pension 

purposes, i.e., employment in the electrical industry, from 

1959 until his employer laid him off in 1971. Then, from 

1972 through 1980, Foley worked in his family's tire 

business, returning to employment in the electrical

industry in 1981. Following his return to the electrical 

industry, Foley was elected the Union's President and he 

served as a Trustee of the Pension Fund from 1987 through 

July 1996. In July 1996, Foley retired and sought pension 

benefits. 

Under the Plan provisions, Foley forfeited all credited 

service earned prior to his return to work in 1981 because 

of a break-in-service provision which provided, in the years 

applicable to Foley, that accrued pension credits lapsed 

when a Plan participant did not work 600 hours in covered 

employment for a consecutive two-year period. There is, 

however, an exception to the break-in-service provision, 

known as the available-for-work exception, wherein the 

Plan provides that an employee shall not forfeit credited 

service if he was continuously available for work within the 

jurisdiction of the Union and unable to obtain covered 

 4 
employment.2 Based on this exception, in 1988, shortly 

after Foley began his tenure as Trustee, the Trustees agreed 

to excuse his break-in-service pursuant to their 

understanding that work had not been available to him in 

covered employment from 1972 to 1980. 

On October 28, 1994, however, Fred Compton, a former 

Union president and Trustee, sent Laurance Baccini,

counsel to the Pension Fund, a letter stating that the 1988 

decision was incorrect because the Trustees at that time 

based their decision on fabricated information improperly 

skewed in Foley's favor. Upon receipt of Compton's letter, 

the Trustees appointed a subcommittee to investigate 

Compton's allegations. Then, in February 1995, based on 

the subcommittee's recommendations, the Trustees 

reversed the 1988 decision because they concluded that 

there was insufficient evidence to substantiate Foley's claim 

that work was unavailable and that he was available for 

covered employment in the 1972-1974 period. 

In July 1996, Foley applied for pension benefits but, 

based upon their 1995 decision, the Trustees denied his 

application insofar as it sought credits for the period 

between 1959-1971. Foley appealed but was not successful 

as the Trustees determined that he still had not presented 

sufficient information to establish his entitlement to credit 

for the disputed years of credited service. 

On February 23, 1998, Foley commenced this action 

under the Employee Retirement Income Security Act, 29 

U.S.C. S 1001, et seq. ("ERISA"), in particular 29 U.S.C. 

SS 1132(a)(1)(B) and (a)(3), which action, as subsequently 

amended, named the Fund, the Union, the Trustees, and 

various Union officers as defendants. In his complaint Foley 

_________________________________________________________________ 

2. The relevant Plan provision states: 

 Notwithstanding anything to the contrary in paragraph (a) and (b), 

 an employee shall not have forfeited any of his Credited Service 

 (past or future) or the right to any death benefit regardless of 

his 

 number of years of credited service if: 

 (1) he was continuously available for work within the jurisdiction 

of 

 the Union and was unable to obtain covered employment. 

Article I, Definitions, Section C "Break in Service" (c)(i). 

 5 
asserted that the Trustees improperly applied a more 

demanding evidentiary standard to him than to other

employees who had been granted an exception to the 

break-in-service provision notwithstanding a provision in 

the Plan that all "interpretations and decisions shall be 

applied in a uniform manner to all Employees similarly 

situated." In addition to his ERISA claims, Foley also 

asserted claims under the Labor Management Reporting 

and Disclosure Act of 1974, 29 U.S.C. S 401 et seq., 

("LMRDA"), and the Internal Revenue Code, 26 U.S.C.

SS 411 and 412. Following the parties' cross-motions for 

summary judgment, the district court dismissed all but 

Foley's ERISA claims. See Foley v. IBEW Local Union 98 

Pension Fund, 91 F. Supp. 2d 797 (E.D. Pa. 2000).3 We 

make no further reference to the dismissed claims, as Foley 

has not cross-appealed from their dismissal and has not 

asserted that we should affirm on the basis of these claims. 

After a bench trial in August 2000, the district court 

found that the Trustees arbitrarily and capriciously acted 

contrary to the terms of the Plan when they denied Foley 

credit for time during his employment in the electrical 

industry prior to his 1971 layoff. See Foley v. IBEW Local 

Union 98 Pension Fund, 112 F. Supp. 2d 411, 416-17 (E.D. 

Pa. 2000) ("Foley"). On August 29, 2000, the court entered 

judgment against appellants, and on December 8, 2000, 

entered an order granting Foley's motion for attorneys' fees. 

See Foley v. IBEW Local Union 98 Pension Fund, No. Civ. A. 

98-906, 2000 WL 1801273 (E.D. Pa. Dec. 7, 2000). 

Appellants have timely appealed from the judgment and 

order.4 

II. STANDARD OF REVIEW 

We reverse factual conclusions of the district court only 

if they are clearly erroneous, see Fed. R. Civ. P. 52(a), but 

exercise "plenary review over the trial court's choice and 

_________________________________________________________________ 

3. Foley included Compton as a defendant but the parties later dismissed 

the action against him by stipulation. He is not a party on this appeal. 

4. The district court had jurisdiction over this matter pursuant to 29 

U.S.C. S 1132(e) and 28 U.S.C. S 1331 and we have jurisdiction under 28 

U.S.C. S 1291. 

 6 
interpretation of legal precepts and its application of those 

precepts to the historical facts." Orvosh v. Program of Group 

Ins. for Salaried Employees of Volkswagen of Am., 222 F.3d 

123, 129 (3d Cir. 2000) (citation and internal quotation 

marks omitted). Where, as here, the plan administrator has 

discretion to interpret the Plan and the authority to 

determine eligibility, we review a denial of benefits under an 

"arbitrary and capricious" standard. Id. Under this 

standard: 

 a plan administrator's decision will be overturned only 

 if it is clearly not supported by the evidence in the 

 record or the administrator has failed to comply with 

 the procedures required by the plan. A court is not free 

 to substitute its own judgment for that of the 

 defendants in determining eligibility for plan benefits. 

Orvosh, 222 F.3d at 129 (internal quotations and citations 

omitted).5 Further, "the district court cannot, by couching a 

legal conclusion as a finding of fact, prevent appellate 

review of legal errors." Louis W. Epstein Family P'ship v. 

Kmart Corp., 13 F.3d 762, 766 (3d Cir. 1994) (citation and 

internal quotation marks omitted). 

III. DISCUSSION 

The Trustees denied Foley credit for the disputed years of 

service because the subcommittee's investigation 

demonstrated that work had been plentiful between 1972 

and 1974, but that Foley was unavailable for work during 

that period due to his employment in the family tire 

business. The Trustees also found that Foley failed to 

produce any evidence supporting his claim. 

Under the "arbitrary and capricious" standard of review, 

the district court was bound to affirm this decision if it was 

not contrary to the Plan's terms and was rationally related 

to a legitimate Plan purpose. See Orvosh, 222 F.3d at 129- 

31. The district court determined that although the

Trustees believed in good faith that they were treating Foley 

_________________________________________________________________ 

5. Foley unsuccessfully argued in the district court that the court should 

review the Trustees' decision on a de novo basis but he does not make 

that contention on this appeal. 

 7 
the same as any other applicant seeking the benefit of the 

break-in-service exception, they actually treated him 

differently from other employees similarly situated in that 

they arbitrarily and capriciously subjected his application 

to a more demanding evidentiary standard and a stricter 

level of scrutiny than those of other employees. See Foley, 

112 F. Supp. 2d at 416. A district court, however, may not 

substitute its judgment for that of a plan's trustees in 

determining a claimant's eligibility for benefits, and, as we 

discuss below, the record demonstrates that the Trustees 

here did not arbitrarily and capriciously treat Foley as not 

being similarly situated to other employees to whom the 

exception to the break-in-service rule had been applied. 

The record shows that during a Trustees' meeting in

1979, they determined that Foley forfeited the credits he 

earned from 1959-1971 as he had a two-year break in

service as of 1973. In 1984, when, after resuming 

employment in the electrical industry, Foley inquired as to 

the status of those credits, Compton informed him that 

they had been forfeited and that it was "too late" to save 

them. 

In 1988, six months after Foley was elected President of 

the Union, he appointed himself, Paul Gilmore, and James 

Mackin to three of the six positions on the Fund's Board of 

Trustees. Shortly thereafter, the Board of Trustees granted 

Foley credits for the years 1959-1971, reversing its prior 

forfeiture of his credits even though he had not applied 

formally for their reinstatement. Indeed, Foley did not 

present documentary evidence to support the award of 

credits at the time he was awarded the credits. Instead, 

Mackin and Gilmore spoke on Foley's behalf, and the

Trustees appear to have accepted their statements as true. 

The record shows, however, that Mackin and Gilmore did 

not have first hand knowledge of the germane facts as they 

had not been employed full time in the electrical industry 

during the 1972 to 1974 period. 

In October 1994, however, the Trustees received 

Compton's letter, "seriously question[ing]" the 1988 

decision and stating that "the [1988] pension trustees may 

have been either misled or misinformed" when they 

reinstated Foley's credits. Confronted with this formal 

 8 
written challenge, the Trustees determined that they were 

obliged to review the facts and, accordingly, created the 

subcommittee to investigate the issues Compton raised in 

his letter. 

The subcommittee rendered its report in late 1994 or 

early 1995. It found that work opportunities were"plentiful" 

from 1971 through 1974 and, according to the record

available to it, the hours electricians worked during that 

period evidenced "full employment, a few visiting brothers 

working and a decent amount of overtime." The 

subcommittee also determined that the Trustees in 1988 

primarily relied on Gilmore's statement that Foley was 

available for work but Gilmore admitted to the 

subcommittee that he knew only of Foley's availability after 

1975. The subcommittee interviewed Foley, who stated that 

he went into the family business in 1972 and periodically 

checked to see if electrical work was available. 

We recognize that the subcommittee noted that the lack 

of evidence supporting Foley's alleged availability for work 

in the electrical industry and inability to find work was not 

"unique" and that the "available for work-no work available" 

exception had been applied liberally. In fact, the 

subcommittee's report included a list showing each case in 

which the exception had been applied since 1980. 

Consequently, the subcommittee recommended that the

Trustees construe the exception more strictly than they had 

in the past and that if they did so in Foley's case, they also 

should "examine" the included list, making"appropriate 

adjustments." Id. at 254 255.6 

_________________________________________________________________ 

6. According to the list, in addition to Foley, 20 other employees applied 

for the benefit of the exception, only one unsuccessfully. Eight who were 

successful had signed the Union's "out-of-work" book signaling their 

availability for work. In three cases, the Trustees testified as to having 

first hand knowledge as to each employee's availability for work and in 

three other cases the employees had constant contact with the Union, 

and one submitted a letter detailing his work history. 

The district court found these distinctions from Foley's case "not 

meaningful or persuasive." Foley, 112 F. Supp. 2d at 414 n.2. It pointed 

out that during the period at issue, 1972-1974, a time that the Trustees 

found that work opportunities were plentiful, nine employees had been 

granted the "available for work-work not available" exception. Id. 

 9 
In February 1995, following their review of the 

subcommittee's report, the Trustees unanimously voted to 

remove the credited service from Foley's pension record but 

advised him that at any time he could submit a request for 

reconsideration attaching relevant documentation. The 

Trustees also resolved to reinvestigate all other individuals 

to whom the "available for work-no work available" 

exception had been applied. See Foley, 112 F. Supp. 2d at 

413. 

In July 1996, when Foley applied for benefits, he did not 

submit additional information supporting a credit for 

service from 1959 to 1971. Accordingly, the Trustees 

awarded Foley pension benefits taking into account his 

break in service. Foley appealed the decision, but the 

Trustees concluded that they had "insufficient evidence as 

to the unavailability of work and Mr. Foley's inability to 

obtain covered employment during the Plan years 1972, 

1973 and 1974." 

The district court found that the Trustees acted in good 

faith and believed they did not treat Foley differently than 

other employees. Foley, 112 F. Supp. 2d at 415. However, 

the court determined that the Trustees actually held Foley 

to a stricter standard "than any other individual in like 

circumstances," id., arbitrarily and capriciously violating 

their duty to interpret the Plan and apply decisions"in a 

uniform manner to all Employees similarly situated." Id. at 

416 (citation omitted). 

The district court made much of the fact that the 

Trustees appointed the subcommittee to investigate the 

circumstances under which Foley had been granted the 

exception in 1988, yet failed to form a subcommittee to 

examine "any other plan participant's pension application." 

Foley, 112 F. Supp. 2d at 415. As the district court 

_________________________________________________________________ 

However, of these nine, only two met the exception during 1973, and 

the remaining seven could not find work from 1974-1975. Most of those 

who could not find work in 1974-1975 were out-of-town workers who 

signed the out-of-work book. Of the two that met the exception in 1973, 

the Trustees had first hand knowledge of both employees' record. 

 10 
recognized, however, the allegations of impropriety that 

Compton raised in his letter "justified a review of plaintiff's 

claim to determine whether there was any impropriety." Id. 

at 414 n.2. Thus, given the allegations of impropriety in the 

Compton letter, and in light of their fiduciary duties to the 

Fund, the Trustees reasonably and appropriately appointed 

the subcommittee in Foley's case. 

The district court next took issue with the actions the 

Trustees took upon receipt of the subcommittee's report. 

See id. The court seems to have been of the view that 

because the investigation yielded "no evidence of 

wrongdoing or deceit," the Trustees were bound to grant 

Foley's application for benefits as they had with"a number 

of individuals who sought refuge under the break-in-service 

exception . . . who, like Foley, produced a minuscule 

amount of evidence." Id. The court also seemed frustrated 

with the fact that the Trustees had not conducted an 

investigation with respect to the other employees who were 

granted the benefit of the exception. Id. at 415. These cases 

differed from Foley's, however, in that these employees' 

eligibility for the exception never was challenged. Further, 

the subcommittee did not uncover any evidence suggesting 

that any of them acquired pension credits through 

improper means.7 

In essence, the court held that because Foley was 

"similarly situated" to other employees who had benefitted 

from a liberal interpretation of the available-for-work 

exception, the Trustees' failure to award him the break-in 

service credits was "arbitrary and capricious." Foley, 112 F. 

Supp. 2d at 416. The premise of the court's decision was, 

however, erroneous as Foley was not similarly situated to 

rank and file Union members who had been granted the 

benefit of the exception. Rather, he was a Trustee when he 

sought to have service credits added to his pension record, 

and he appointed the Trustees who spoke on his behalf and 

apparently voted to grant him the benefit of the exception. 

Moreover, Foley's case was the only one under the 

_________________________________________________________________ 

7. Apparently, the Trustees referred the matter to the Fund professionals 

for follow-up. Several individuals who were granted the benefit of the 

exception now are deceased. See Appellants' Br. at 34. 

 11 
available-for-work exception where issues of impropriety 

were raised, and his case was the only one in which the 

employee's entitlement to benefits under the exception was 

challenged. Furthermore, upon review of the 

subcommittee's report, the Trustees recognized that they 

did not have evidence to support the application of the 

exception to Foley. 

It is also significant that at a time that he should have 

been "continuously available for work" in order for his 

break in service to be excused, Foley was engaged in the 

family tire business and thus had an incentive not to work 

in the electrical industry. When the district court made its 

determination that the Trustees acted arbitrarily and 

capriciously, it should have recognized that this 

circumstance distinguished Foley's case from those of other 

supposedly "similarly situated" employees who were granted 

the benefit of the exception, as Foley made no showing that 

they had incentives equivalent to his to eschew employment 

in the electrical industry. In the circumstances, it cannot 

reasonably be held that the Trustees arbitrarily and 

capriciously treated Foley differently from other employees 

similarly situated, and thus the district court erred in 

reaching its result. 

We emphasize that in focusing on the fact that credit 

under the available-for-work exception had been granted 

liberally in the past rather than examining whether the 

Trustees' decision was contrary to Plan language or

whether it was rationally related to a legitimate Plan 

purpose, the district court did not properly credit

significant evidence. This evidence included the 

subcommittee's finding that work was plentiful from 1972- 

1974, the Trustees' own recollections and understanding 

regarding the availability of work during that time, 

Gilmore's admission to the subcommittee of his lack of 

knowledge of the germane facts, Foley's failure to present 

evidence, and the circumstances in which Foley was 

originally granted the exception. The court, however, should 

have relied on this evidence as it was not free to substitute 

its judgment for that of the Plan administrators. See 

Orvosh, 222 F.3d at 129. 

 12 
Moreover, the district court's holding binds the Trustees 

to a result that was a consequence of poor administrative 

practices, that the Trustees later corrected. In effect, the 

district court's decision improperly "straitjackets" the 

Trustees into granting benefits simply because of their past 

practices. See Oster v. Barco of Cal. Employees' Ret. Plan, 

869 F.2d 1215, 1219 (9th Cir. 1988) (holding that prior 

record of granting requests is insufficient to establish that 

committee denied request in arbitrary and capricious 

manner and stating "[t]o hold otherwise would impair the 

flexibility necessary for proper financial management of 

such plans, a goal of Congress in holding ERISA fiduciaries 

to the `prudent man' standard") (citation and internal 

quotation marks omitted). See also Nazay v. Miller, 949 

F.2d 1323, 1336 (3d Cir. 1991) (plan administrator's 

decision not to waive requirement "was neither arbitrary 

nor capricious and did not constitute an abuse of 

discretion" where plan administrator waived requirement on 

14 previous occasions). We are particularly troubled by the 

fact that the district court effectively read the break-inservice forfeiture provision out of the Plan, as under the 

court's conclusions it is difficult to see how it ever could be 

applied in the face of an employee's claim that he is entitled 

to the benefit of the exception.8 

The district court's opinion also is problematical for 

another quite fundamental reason. While we know that the 

break-in-service exception was excused in 20 other cases in 

which employees claimed its benefit, the district court had 

no way of knowing the number of situations in which

employees lost credits by reason of a break in employment 

during a consecutive two-year period but did not seek the 

benefit of the exception. Certainly if there were such 

employees, they were treated the same as rather than 

differently from Foley.9 But the district court did not 

consider this possibility. 

_________________________________________________________________ 

8. Foley argues that the Trustees did not raise a"straightjackets" 

argument in the district court. We are satisfied, however, that they 

sufficiently made the contention to preserve it for this appeal. 

9. The subcommittee's report said that "[g]enerally, the available for 

work-no work available exception has been applied liberally in almost all 

 13 
In summary, we conclude that in appointing a 

subcommittee to investigate the claims against Foley, the 

Trustees acted quite responsibly and consistently with their 

obligations as fiduciaries. Moreover, inasmuch as the 

Trustees' decision to deny the disputed benefits was not 

contrary to the Plan's terms and was rationally related to a 

legitimate Plan purpose, the district court erred in 

determining that the Trustees acted in an arbitrary and 

capricious manner. Furthermore, because Foley was not 

similarly situated to the other employees who were granted 

the benefit of the exception, the Trustees were not bound to 

grant him the benefit of the exception merely because they 

had applied it in other cases. Accordingly, we will reverse 

the judgment of the district court.10 

_________________________________________________________________ 

cases in which it has been invoked." The report, however, did not advise 

the Trustees of the number of cases in which the break-in-service 

forfeiture provision had been applied without the employee invoking the 

exception. Moreover, the parties' briefs do not suggest that there was any 

evidence on this point in the district court. In this regard, we point out 

that Foley had the burden of proof as he brought the action and had to 

demonstrate that the Trustees acted arbitrarily and capriciously. While 

we cannot be certain of the number of employees who did not receive the 

benefit of the break-in-service exception following an interruption of 

employment and forfeiture of credits, it may have been substantial. The 

list attached to the subcommittee's report reveals that over a period of 

about 15 years from 1980 until the subcommittee made its report, only 

21 employees sought the benefit of the exception. Yet, according to the 

district court, the Fund had more than $130,000,000"in its coffers" 

when Foley applied for fees. See Foley v. IBEW Local Union 98 Pension 

Fund, 2000 WL 1801273, at *4. A reasonable inference can be drawn 

from the size of the Fund that it must have provided for benefits for 

many employees and thus it well may be that many have lost pension 

credits by reason of breaks in service. Yet inasmuch as we only can 

speculate on this fundamental point, we do not understand how we can 

uphold the decision of the district court that the Trustees acted 

arbitrarily and capriciously. We add, however, that even without 

considering the possibility that some employees did not obtain the 

benefit of the break-in-service exception, our result would be the same 

as that we reach. 

10. The appellants contend that the district court erred in entering 

judgment against Scott Ernsberger, whom they describe as the Fund's 

"third party contract administrator," by reason of circumstances 

 14 
particular to him, and that the court also erred in calculating damages. 

In view of our result, we do not reach these issues as we are reversing 

the judgment as to all appellants, including Ernsberger on common 

grounds and directing judgment to be entered in their favor, and 

because there will not be any damages to calculate.

11. Certain of the defendants unsuccessfully sought attorneys' fees in 

the district court but inasmuch as they are not at this time seeking 

these fees we do not review the district court's order denying their 

application. 

IV. ATTORNEYS' FEES 

Finally, we come to the question of the attorneys' fees 

which ERISA permits when a participant, beneficiary or 

fiduciary succeeds on any significant issue in the litigation 

which achieves some of the benefit sought from the suit. 

See 29 U.S.C. S 1132(g)(1). In light of our conclusions, it is 

clear that Foley has not prevailed on a significant issue in 

the litigation and thus, we will therefore reverse the district 

court's award of attorney fees. See Hensley v. Northwest 

Permanente P.C. Ret. Plan & Trust, 258 F.3d 986, 1002-03 

(9th Cir. 2001).11 

V. CONCLUSION 

For the foregoing reasons, we will reverse the district 

court's judgment of August 29, 2000, and its order of 

December 8, 2000, and will remand the matter to the

district court to enter judgment for the defendants. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 15