Opinion ID: 519533
Heading Depth: 1
Heading Rank: 3

Heading: Claim Confusion.

Text: 19
20 The district court categorized this suit as a hybrid section 301/fair representation suit subject to a six-month statute of limitations per DelCostello, 462 U.S. at 166, 103 S.Ct. at 2291. However, this characterization of Degan's claims cannot have been correct, for the simple reason that Degan never complained of the breach of a collectively bargained contract, the sole province of section 301 actions. See 29 U.S.C. Sec. 185. Degan's contractual claims assert only that the employer's oral promises to himself and several others similarly situated at the close of the New Orleans part facility are enforceable. He does not allege that these separate oral agreements were collectively bargained. Thus, since Degan's contractual claim was not one arising under section 301, his suit cannot be hybrid in nature. 21 Degan may, however, have adequately framed a fair representation claim against his union for having irresponsibly informed him that he would receive early retirement benefits if he took separation pay. See Acri v. International Ass'n of Machinists & Aerospace Workers, 781 F.2d 1393, 1397 (9th Cir.), cert. denied, 479 U.S. 816, 107 S.Ct. 73, 93 L.Ed.2d 29 (1986). Yet, such claims are subject to the six-month statute of limitations period set forth in section 10(b) of the NLRA. See Richardson v. United Steelworkers of Am., 864 F.2d 1162, 1167 (5th Cir.1989). 22 Degan's suit, filed in March 1986, could not have come within that limitations period; his cause of action against the union most likely arose in January 1980, when he received a letter from a union representative informing him that the union had made inquiries with respect to his eligibility for early retirement benefits and had received a negative answer which the union implicitly was willing to accept. Even assuming that Degan's cause of action against the union did not arise until February 1982, when Ford unequivocally rejected Degan's lawyer's demand letter, his complaint against the union falls well outside the section 10(b) limitations period. Hence, summary judgment remains appropriate with regard to this aspect of Degan's complaint. 23
24 The most obvious of Degan's complaints against Ford and the union alleges that he is entitled to early retirement benefits as a result of the oral assurances made to him in 1970. Degan maintains that these assurances constitute enforceable oral contracts. He protests, however, that his contractual claims to pension benefits are premised upon state-law causes of action alone, rather than federal claims under ERISA. Yet even if we heed his protestations, the district court nevertheless had subject matter jurisdiction. 25
26 As the Supreme Court recently declared in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), common-law contract and tort claims based upon laws of general application, that is, not specifically related to insurance 2 or employee severance 3 or discrimination, 4 are preempted by ERISA, rather than section 301 of the NLRA, to the extent that they relate to an employee benefit plan. Moreover, when beneficiaries bring such claims to recover benefits from a covered plan, those claims fall under ERISA's 29 U.S.C. Sec. 1132(a)(1)(B), 5 which provides an exclusive federal cause of action for the resolution of such claims. See Shaw. Thus, the Court also held that in addition to preempting the state-law claims, ERISA's preemptive and civil enforcement provisions operate to recharacterize such claims into actions arising under federal law. 27 Such recharacterization of state-law claims for benefits under covered plans is made necessary by the following corollary to the well-pleaded complaint rule: Congress may so completely pre-empt a particular area, that any civil complaint raising this select group of claims is necessarily federal in character. Id. In the past, the Court has applied this corollary to suits brought against an employer for breach of a collective bargaining agreement--suits that are preempted by section 301 of the NLRA. See Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968). These applications have given rise to what is now known as the Avco principle: 28 [T]he preemptive force of Sec. 301 is so powerful as to displace entirely any state cause of action 'for violation of contracts between an employer and a labor organization.' Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of Sec. 301. 29 Taylor, 481 U.S. at 64, 107 S.Ct. at 1546 (quoting Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 23, 103 S.Ct. 2841, 2853, 77 L.Ed.2d 420 (1983)). In Taylor, the Court concluded that the similarities in language between section 301 of the NLRA and ERISA's 29 U.S.C. Sec. 1132(f), 6 coupled with ERISA's legislative history, required application of the Avco principle to the plaintiff's state-law contract claims for benefits under an ERISA-covered plan. We do the same today. 30 Degan, however, challenges the preemptive effect of ERISA in this case on the ground that ERISA was not in effect when the promises in dispute here were made to him. He points to language in section 1144(b)(1) to the effect that ERISA's supersedure provision shall not apply with respect to any cause of action which arose, or any act or omission which occurred before January 1, 1975. Degan claims that the relevant acts or omissions that occurred in this case, namely, the oral assurances from Ford and union representatives that he would receive early-retirement benefits, occurred during the 1970 plant closing, and thus his cause of action is not preempted by ERISA and its limitations statutes. 31 We have held previously, however, that interpretations of the act or omission clause of section 1144(b)(1) are confined to acts or omissions that set in motion legal proceedings other than causes of action. Woodfork v. Marine Cooks & Stewards Union, 642 F.2d 966, 971 (5th Cir. Unit A Apr. 1981) (citing administrative and criminal proceedings as examples of proceedings other than causes of actions). Our reasons for so holding were two-fold: First, interpreting act or omission in the broad manner Degan desires, that is, as excepting from ERISA preemption any suit in which some of the facts occurred prior to 1975, would render the first clause of section 1144(b)(1) superfluous. Id. In other words, under Degan's interpretation it would not matter when the cause of action arose so long as the relevant acts or omissions occurred prior to 1975. 32 Second, we found that creating such a broad exception would conflict with Congress's goal of providing access to federal courts for litigants seeking to enforce their rights under a collectively-bargained pension plan. See id. (citing 29 U.S.C. Sec. 1132(a)(1)(B)). Degan therefore cannot include Ford's and the union's oral assurances as pre-1975 acts or omissions that would exempt his cause of action from ERISA's preemptive reach. 7 33 Thus, we are left with the question of whether Degan's cause of action arose on or after January 1, 1975. Our previous cases have fashioned a rule of interpretation for this exception as well. In Paris v. Profit Sharing Plan for Employees of Howard B. Wolf, Inc., 637 F.2d 357, 361 (5th Cir. Unit A Feb. 1981), cert. denied, 454 U.S. 836, 102 S.Ct. 140, 70 L.Ed.2d 117 (1981), we held that a cause of action does not become a presently enforceable demand until a claim is denied.... [Thus], for purposes of ERISA a cause of action does not accrue until an application is denied.However, applying even this clear-cut rule is made somewhat difficult in this case because Degan never formally submitted an application for early-retirement benefits. The document in the record that most closely resembles a denial of a claim is Ford's rejection of Degan's attorney's demand letter in 1982. Because that date falls well after the effective date of ERISA, we conclude, contrary to Degan's assertions, that ERISA governs this claim. However, it is not necessary for us to turn to an analysis of whether Degan's claim is time-barred under appropriate ERISA or state law provisions. Instead, we hold that Degan's claim, premised as it is upon oral modifications to a retirement plan, is not cognizable under ERISA. 34
35 In adjudicating disputes between labor and management with respect to the LMRA or ERISA, Congress intended that federal courts should create federal common law. See Textile Workers Union of Am. v. Lincoln Mills, 353 U.S. 448, 456-57, 77 S.Ct. 912, 917-18, 1 L.Ed.2d 972 (1957). However, this power extends only to areas which federal law preempts but does not address. See Wheeldin v. Wheeler, 373 U.S. 647, 651-52, 83 S.Ct. 1441, 1444-45, 10 L.Ed.2d 605 (1963); see also C. Wright, Law of Federal Courts Sec. 60 at 393-94 (4th ed. 1983). Degan presents us with a sympathetic, estoppel-based argument for fashioning federal common law that would prevent employers and union officials from consoling displaced employees like Degan with empty oral assurances about rights to pension benefits, especially when repudiation comes after years of expectations. The problem, however, is one for Congress and not this court to resolve, for we are bound by ERISA's emphatic preference for written agreements. 36 ERISA expressly requires that [e]very employee benefit plan shall be established and maintained pursuant to a written instrument. 29 U.S.C. Sec. 1102(a)(1). In addition, the written plans must provide a procedure for amending such plan, and for identifying the persons who have authority to amend the plan. Id. Sec. 1102(b)(3). Thus, ERISA mandates that the plan itself and any changes made to it were to be in writing. The reasons for Congress's strictures in this area are obvious: Oral agreements would undermine Congress's goal of fashioning a comprehensive system of federal law designed to strengthen and protect the interests of employees in their expected retirement benefits. See Shaw v. Delta Air Space, Inc., 463 U.S. at 90, 103 S.Ct. at 2896. (1983). 37 Applying the common-law concept of estoppel would mean presenting retirement plan administrators with claims for payment from individuals, otherwise ineligible, who were parties to oral agreements that, like the one before us, have lain unsuspected and inert for years. That prospect would threaten the stability and solvency of many plans upon which so many other employees are dependent. Hence, we join the other circuits that have held, consistently with the words of the statute, that ERISA precludes oral modifications to benefit plans and that claims of promissory estoppel are not cognizable in suits seeking to enforce rights to pension benefits. 8 38