Opinion ID: 2998260
Heading Depth: 2
Heading Rank: 2

Heading: The Individual Plaintiffs’ Claims

Text: Four of the plaintiffs—Mr. Helvey, Mr. Paule, Mr. Arwood and Mr. Rose, all retirees—have had their benefits terminated and seek to recover the benefits lost. We shall review the circumstances surrounding the termination of each man’s benefits in greater detail below.
If, as was the case here, the administrator of a pension fund is granted discretion in making benefit determinations, 3 ERISA provides that a pension plan “may not be amended so as to provide for a significant reduction in the rate of future benefit accrual unless . . . the plan administrator provides . . . notice.” 29 U.S.C. § 1054(h)(1). The notice must meet the following requirements: It must “be written in a manner calculated to be understood by the average plan participant and shall provide sufficient information . . . to allow applicable individuals to understand the effect of the plan amendment.” Id. § 1054(h)(2). The plaintiffs submit that the notice provided to them of the March 2002 amendments—in this case, several pages in a newsletter that was distributed by bulk mail—was not sufficient to satisfy ERISA’s requirements. Because we hold that the March 2002 amendments did not reduce participants’ benefits, let alone work “a significant reduction in the rate of future benefit accrual,” id. § 1054(h)(1), the notice requirements laid out in § 1054(h)(2) are not implicated in this case, and we need not reach this question. 14 Nos. 03-4023 & 04-1375 then a reviewing court is limited to asking whether the decision to deny benefits was arbitrary or capricious. See Fenster v. Tepfer & Spitz, Ltd., 301 F.3d 851, 856 (7th Cir. 2002). Under the arbitrary and capricious standard, we will overturn a plan administrator’s decision “only . . . if it is downright unreasonable.” Carr v. Gates Health Care Plan, 195 F.3d 292, 294 (7th Cir. 1999) (internal quotation omitted), cert. denied, 529 U.S. 1068 (2000). That is, this court will not substitute the conclusion it would have reached for the decision of the administrator, as long as “the administrator makes an informed judgment and articulates an explanation for it that is satisfactory in light of the relevant facts.” Id. This court has noted that “[r]eview under the deferential arbitrary and capricious standard is not a rubber stamp,” so that, “[e]ven under the deferential review we will not uphold a termination where there is an absence of reasoning in the record to support it.” Hackett v. Xerox Corp. Long-Term Disab. Income, 315 F.3d 771, 774-75 (7th Cir. 2003). A satisfactory explanation is one that gives “the specific reasons for the denial,” but it need not explain “the reasoning behind the reasons, . . . [that is,] the interpretive process that generated the reason for the denial.” Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir. 1996) (internal quotation omitted), cert. denied, 521 U.S. 1129 (1997). The administrator of a pension fund does not act arbitrarily and capriciously when he changes a previous decision because the facts known to the plan have changed; “[p]ut simply, a reversal based on new information is not a non-uniform interpretation.” Militello v. Cent. States, Se. & Sw. Areas Pension Fund, 360 F.3d 681, 690 (7th Cir.), cert. denied, 125 S. Ct. 106 (2004). Nos. 03-4023 & 04-1375 15
The plaintiffs challenge the denial of benefits to three 4 individuals: Mr. Helvey, Mr. Paule and Mr. Rose. Before discussing the circumstances of each individual’s denial of benefits, we briefly shall review the process by which the Pension Fund determines that an individual is engaged in prohibited reemployment. Under both the Old Pension Plan and the New Pension Plan, pensioners are required to notify the Pension Fund if they become employed in any capacity. The Pension Fund also monitors pensioners’ reemployment through its own efforts. Prior to 2002, the Pension Fund sent what it calls “standard screening cards,” R.68 at 9, to randomly selected pensioners to determine whether the pensioner was reemployed. However, beginning in 2002, the Pension Fund began sending more detailed “questionnaires,” id., to pensioners concerning reemployment. Mr. Herman, Mr. Paule and Mr. Rose all suffered a termination of their benefits based on their responses to the Pension Fund’s 2002 questionnaires.
Mr. Helvey had worked as a dockworker when he earned credit with the Pension Fund, and he became reemployed with a building supply company. Based on Mr. Helvey’s responses to a March 2002 questionnaire, the Pension Fund notified him that he was engaged in prohibited reemploy- 4 In the section of their brief concerning the individual benefit determinations, the plaintiffs also mention Mr. Arwood. However, neither party directs any arguments towards him. Therefore, we shall not discuss him. 16 Nos. 03-4023 & 04-1375 ment because he was in the same job classification in which other participants were employed by a contributing employer in the same SMA. R.68, Ex.M at 6. Ultimately, Mr. Helvey was given approval from the Pension Fund to continue to work for the company with whom he had sought reemployment, as long as he did not work with stocking, repairing, or driving; he was limited to janitorial duties. Mr. Paule worked as a driver for a plumbing supply company when he earned credit with the Pension Fund, and he later became reemployed with a plumbing company. At the plumbing company, he did “building maintenance, inventory control, lawn and garden, and custodian/janitor duties.” R.68, Ex.K at 1. Based on Mr. Paule’s responses to a February 2002 questionnaire, the Pension Fund notified him that he was engaged in prohibited reemployment because he was working “in the same industry in which Mr. Paule . . . earned any Contributory Service Credit.” Id. at 4 (alterations in original; internal quotations omitted). The plaintiffs allege that it was inconsistent for the Pension Fund to permit Mr. Helvey to continue working as a janitor, while Mr. Paule, who also did work involving custodial or janitorial duties, was deemed to be in prohibited reemployment, when the two men worked in the same SMA. The Trustees contend that the plaintiffs’ arguments obscure the key differences between the terminations of benefits for Mr. Helvey and Mr. Paule. Mr. Paule’s benefits were terminated for prohibited reemployment because he was working in the same industry in which he had worked when he earned credit with the Pension Fund; Mr. Helvey, on the other hand, had been subject to termination of benefits for working in the same job classification as other plan participants in the same SMA. Nos. 03-4023 & 04-1375 17 We must conclude that the Pension Fund has given a specific reason for its denial, and one that is supported reasonably by the evidence. See Gallo, 102 F.3d at 922.
In 2000, Mr. Rose notified the Pension Fund that he was reemployed in building maintenance. Based on this representation, the Pension Fund notified Mr. Rose that his reemployment was not prohibited. The Pension Fund also received one screening card from Mr. Rose indicating that his job was in building maintenance. However, in April 2002, Mr. Rose filled out a questionnaire providing specific details about his job duties and indicating that he was working in plant maintenance, not building maintenance. According to the information Mr. Rose provided, his job duties included “service, repair and upkeep of . . . production equipment, . . . participat[ion] in installation of all equipment . . . , . . . upkeep and maintenance of the building and the grounds, and . . . maint[enance of] inventories.” R.68, Ex.J at 2. Based on Mr. Rose’s responses to the questionnaire, the Pension Fund determined that Mr. Rose was engaged in prohibited reemployment because “plant maintenance” is a job classification in which other participants were employed by a contributing employer in the same SMA. See id. at 3 (noting that “Mr. Rose is working in the same job classification as other Participants employed by a Contributing Employer . . . in the same [SMA],” and identifying collective bargaining agreement governing those jobs). Mr. Rose contends that the difference between “plant maintenance” and “building maintenance” is ambiguous. The Trustees contend, simply as a matter of fact, that “plant maintenance” is covered by a participating employer, while 18 Nos. 03-4023 & 04-1375 “building maintenance” is not. They claim that Mr. Rose’s failure to disclose that he worked in “plant maintenance” is a misrepresentation and grounds for denial of benefit. It is within the bounds of the arbitrary and capricious standard for the Pension Fund to have changed from a determination that Mr. Rose was permissibly reemployed in “building maintenance,” to the determination that he was engaged in prohibited reemployment in “plant maintenance,” based on the more complete information provided in response to the May 2002 questionnaire. See Militello, 360 F.3d at 690. Furthermore, the fact that other participants were employed by a contributing employer in the same SMA is a specific and reasonable ground on which to base the denial of benefits. The Pension Fund need not explain the reasoning behind their reason for denying Mr. Rose’s benefits. See Gallo, 102 F.3d at 922. To the extent that the Pension Fund seeks to recoup benefits paid to Mr. Rose while he was engaged in prohibited reemployment, we note that the Pension Fund consistently has maintained its right to recover payments made based on a participant’s misrepresentation. See R.68, Ex.D at 69.