Source: https://law.justia.com/cases/federal/appellate-courts/F2/754/473/319031/
Timestamp: 2020-03-31 11:24:14
Document Index: 622079100

Matched Legal Cases: ['§ 1001', '§ 1132', '§ 1002', '§ 1022', '§ 1024', '§ 1024', '§ 1132', '§ 1002', '§ 1132', '§ 1132', '§ 1002', '§ 1132', '§ 1022']

Anthony Saladino, Individually and on Behalf of All Otherssimilarly Situated, Plaintiff-appellant, v. I.l.g.w.u. National Retirement Fund and Theodore Bernstein,individually and in His Official Capacity Asdirector of the I.l.g.w.u. Nationalretirement Fund, Defendants-appellees, 754 F.2d 473 (2d Cir. 1985) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1985 › Anthony Saladino, Individually and on Behalf of All Otherssimilarly Situated, Plaintiff-appellant, v...
Anthony Saladino, Individually and on Behalf of All Otherssimilarly Situated, Plaintiff-appellant, v. I.l.g.w.u. National Retirement Fund and Theodore Bernstein,individually and in His Official Capacity Asdirector of the I.l.g.w.u. Nationalretirement Fund, Defendants-appellees, 754 F.2d 473 (2d Cir. 1985)
US Court of Appeals for the Second Circuit - 754 F.2d 473 (2d Cir. 1985) Argued Dec. 19, 1984. Decided Feb. 8, 1985
The plaintiff, Anthony Saladino, appeals from Judge Knapp's denial of his motion for attorney's fees. Saladino's claim for fees arose from an action he brought under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (1982) ("ERISA"), against the International Ladies' Garment Workers' Union National Retirement Fund ("Fund") and Theodore Bernstein, its director, to obtain a copy of the Fund's pension plan. After the case was settled by the Fund's agreement, inter alia, to provide a copy of the plan to Saladino, he sought attorney's fees pursuant to ERISA 29 U.S.C. § 1132(g) (1). The district court denied attorney's fees on the grounds that Saladino was not a "participant" as defined by ERISA 29 U.S.C. § 1002(7) and accordingly was not eligible for such an award. We affirm.
Saladino was a member of the I.L.G.W.U. for thirty-three years. His last employment as a union member was in 1966 at the age of 53. In October, 1981, Saladino wrote to the Fund and requested information on how to apply for a pension. In his letter he stated that he left covered employment in 1966 and that he was now 67 years old. The Fund responded, by letter dated November 5, 1981, informing plaintiff that he was not, nor would he become, eligible for pension benefits from the Fund, and provided plaintiff with a copy of a summary plan description which explained the Fund's pension eligibility requirements prepared in the manner and for the purposes prescribed by ERISA 29 U.S.C. § 1022.1 Prior to the enactment of the Employee Retirement Income Security Act, an employee for whom contributions had been made to the Fund was entitled to pension benefits only if he met a twenty-year minimum service requirement and retired after he reached the age of 65 or, after 1970, the age of 62. As of January, 1976, ERISA introduced mandatory vesting standards and provided that employees who met a ten-year service requirement were entitled to pension benefits when they reached age 62 if they had retired on or after January, 1976.
In March, 1982, Saladino, through attorneys, requested copies of the full plan as of 1979, when he reached the age of 65, and 1966, when he retired. The following month, the Fund sent Saladino a short description of the eligibility requirements as they stood in 1966, but no copy of the full plan. Saladino immediately responded with another request for copies of the plan in 1966 and 1979, mentioning that ERISA required pension plans to provide a copy of the plan to him. 29 U.S.C. § 1024(b) (4).2 None of Saladino's attorneys' correspondence provided facts to support a claim of eligibility under the terms of the summary plan description, however. In May, the Fund informed Saladino that he had no right to a copy of a plan because he was not eligible for a pension and therefore not a participant within the language of ERISA 29 U.S.C. § 1024(b) (4). The Fund stated, however, that if Saladino could provide additional facts bearing on his eligibility, it would reconsider its position.
One of the claims Saladino did not settle was that for attorney's fees under ERISA 29 U.S.C. § 1132(g) (1). His attorneys, employees of non-profit organizations providing legal services, insisted that the attorney's fees issue be omitted from the settlement agreement on ethical grounds.
In November, 1983, Saladino moved in the district court for attorney's fees. The district court denied the motion because Saladino was not a "participant" as defined in ERISA 29 U.S.C. § 1002(7) and thus did not have a right to claim attorney's fees under 29 U.S.C. § 1132(g) (1). The district court held that, to be a participant, Saladino either had to make a credible showing that he was vested or that he intended to return to covered employment. We affirm.
ERISA 29 U.S.C. § 1132(g) (1) states that " [i]n any action under this subchapter ... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party" (emphasis supplied). The term participant is of considerable importance within ERISA's statutory scheme because numerous rights under that scheme are limited to those who are included within that term. In addition to eligibility for attorney's fees under Sec. 1132(g) (1), participants must be sent plan documents at specified times and intervals, Sec. 1024(b) (1); may examine such documents at any time at specified places, Sec. 1024(b) (2); must be sent annual financial information, Sec. 1024(b) (3); must be sent on request copies of plan documents, Sec. 1024(b) (4); must be sent on request once a year information as to the participant's accrued and nonforfeitable benefits, Sec. 1025(a); and can enforce through a civil action in the federal courts ERISA rights, Sec. 1132. The term "participant" itself is defined by 29 U.S.C. § 1002(7) as "any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit...."
Agency interpretations of ERISA's provisions are consistent with this conclusion. Department of Labor regulations defining the scope of coverage of employee pension benefit plans exclude from the term participant any employee with a service break of more than a year who has acquired no vested right to a benefit until the employee has returned to covered employment for an equivalent period. 29 C.F.R. Sec. 2510.3-3(d) (3) (i) (1984). Other regulations governing the imposition of premiums on pension plans by the Pension Benefit Guaranty Corporation exclude from the definition of participant any former employee who has no retained credited service under the plan or who has incurred a break in service greater than that specified in the plan. 29 C.F.R. Sec. 2610.2(a) (2) (1984).
We note finally that our reading of the statute accords with that adopted by other circuits. Weiss v. Sheet Metal Workers Local No. 544 Pension Trust, 719 F.2d 302 (9th Cir. 1983), cert. denied, --- U.S. ----, 104 S. Ct. 2347, 80 L. Ed. 2d 821 (1984); Nugent v. Jesuit High School, 625 F.2d 1285 (5th Cir. 1980).
It is clear in the instant case that Saladino is not a participant within the meaning of ERISA. The statutorily prescribed summary plan description which was provided to him before the litigation began and which was not contradicted by the various information provided thereafter made it amply clear that Saladino is not eligible for a pension.3 Indeed, it is undisputed that he lacks any colorable claim to eligibility, a fact made apparent to him by the summary plan description in 1981.4 He is not, therefore, a participant and is not entitled to attorney's fees under 29 U.S.C. § 1132(g) (1).5
Appellant argues that a circularity is created by our definition of the term participant since only participants have a legally enforceable right to get a copy of a plan but a determination of whether one is a participant depends upon knowing the contents of the plan. Because we include within "participant" those persons with colorable claims to eligibility, the problem is more theoretical than real. For example, when Saladino first requested information from the Fund, his claim was colorable because his years of covered employment, without more, created a plausible possibility that he was eligible. The Fund responded with the summary plan description prepared pursuant to ERISA 29 U.S.C. § 1022(b), and a letter referring to that summary and explaining why he was not eligible. Thereafter, Saladino never asserted any reasons refuting the arguments advanced by the Fund for his ineligibility or asserting eligibility on some other grounds. When he brought this litigation, therefore, he had no colorable claim to pension benefits. Nor did his claim become colorable once this litigation was brought and he obtained a complete copy of the relevant plans, for they merely confirmed the information previously conveyed by the Fund.
We see no inconsistency with the statutory purpose in the resultant denial of counsel fees. The Fund did not "stonewall" Saladino or ignore his requests for information. Rather, it provided him with an accurate summary plan description which negated his claim of eligibility. The Fund might well have been better advised to have provided copies of the complete plan in return for Saladino's payment of the cost of reproduction and thereby to have avoided this litigation, which, once brought, led inevitably to the production of the full plan, whether or not Saladino was entitled to a copy under Sec. 1024(b) (4). That is not, however, a reason to tax the beneficiaries of the Fund with Saladino's legal fees, since the litigation in no way altered the earlier documented demonstration of his ineligibility for benefits and his inability to qualify as a participant within the meaning of ERISA.
(a) (1) A summary plan description of any employee benefit plan shall be furnished to participants and beneficiaries as provided in section 1024(b) of this title. The summary plan description shall include the information described in subsection (b) of this section, shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan....
Even if eligible under the 1966 plan, Saladino may have no rights under ERISA in light of the date at which he left covered employment, see Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496 (9th Cir. 1984), an issue which has not been argued and which we need not reach
Saladino argues that he has a colorable legal claim to eligibility despite his having left the industry before he reached the age of 65 because he departed involuntarily when his employer went out of business. He cites Lee v. Nesbitt, 453 F.2d 1309 (9th Cir. 1972); Knauss v. Gorman, 583 F.2d 82 (3d Cir. 1978); and Van Fossan v. International Brotherhood of Teamsters Local No. 710 Pension Fund, 649 F.2d 1243 (7th Cir. 1981), for the proposition that it is arbitrary and capricious to deny benefits for failure to meet vesting requirements where the sole reason for this is an involuntary layoff. These cases, however, involved break-in-service provisions that operated to divest an employee of benefits he had already fully qualified for otherwise. Saladino, on the other hand, failed to satisfy a condition precedent to qualifying for such benefits. More importantly, in each of the cases cited by Saladino, the uncovered period was less than five years and the applicant had to demonstrate why he was unable to obtain covered employment during this period. Saladino has come forth with no evidence to explain why he failed to obtain covered employment for thirteen years after he lost his job