Opinion ID: 623890
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: In interpreting the language of an ERISA-governed plan, we apply the federal common law rules of contract interpretation. Kamler v. H/N Telecomm. Servs., Inc., 305 F.3d 672, 680 (7th Cir. 2002). Our first task is to determine whether the contract at issue is ambiguous or unambiguous. Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 873 (7th Cir. 2001). “Contract language is ambiguous if it is susceptible to more than one reasonable interpretation.” Id. Where the terms of a plan document are unam- biguous, we “will not look beyond its ‘four corners’ in interpreting its meaning.” Trs. of S. Ill. Carpenters Welfare Fund v. RFMS, Inc., 401 F.3d 847, 849 (7th Cir. 2005). Contract interpretation lends itself to resolution by summary judgment because “the determination of whether a contract is ambiguous is a matter of law.” Barnett v. No. 10-3286 7 Ameren Corp., 436 F.3d 830, 833 (7th Cir. 2006). We review the district court’s grant of summary judgment de novo, construing all facts and drawing all reasonable inferences in favor of the nonmoving party. Moore v. Vital Prods., Inc., 641 F.3d 253, 256 (7th Cir. 2011). Waste Management argues that the plan documents are ambiguous because they are subject to more than one reasonable interpretation. The crux of its argument lies in the purported ambiguity of the term “prospectively,” contained in the Participation Agreement. In relevant part, the Participation Agreement states: The following agreements shall not be valid: a) an agreement that purports to retroactively eliminate or reduce the Employer’s contracted or statutory duty to contribute to the Fund(s); b) an agreement that purports to prospectively re- duce the contribution rate payable to the Pension Fund[;] or c) an agreement that purports to pro- spectively eliminate the duty to contribute to the Pension Fund during the stated term of a collective bargaining agreement that has been accepted by the Pension Fund. Although Waste Management concedes that it could not “prospectively” (or retroactively) eliminate the duty to contribute to the Fund under the terms of the Participation Agreement, it contends that the new CBA signed in 2008 did not eliminate this duty prospectively—it did so immediately. Thus, Waste Management asserts that the term “prospectively” is ambiguous because it could reasonably be interpreted to allow for immediate action. 8 No. 10-3286 Defying common sense and logic, Waste Management posits that an agreement to stop paying contributions tomorrow or even one hour in the future would be barred by the Participation Agreement, but an agreement to do so immediately would be perfectly fine. We disagree—this is not a reasonable interpretation of the Participation Agreement. Waste Management makes an equally unconvincing argument regarding “ambiguities” in the 2005 CBA. The CBA states: This Agreement shall be in full force and effective from February 1, 2005 to and including January 31, 2009, and shall continue in full force and effect from year to year thereafter unless written notice of desire to cancel or terminate the Agreement is served by either party upon the other by Certi- fied Mail at least sixty (60) days prior to the date of expiration. Waste Management asserts that the opt-out provision in the last clause could be interpreted to allow either party to the CBA to unilaterally cancel the agreement at any time during the four-year period of the CBA, so long as sixty days’ notice was provided. If the 2005 CBA allowed either party to cancel the CBA at any time, then the plan documents—which only require Waste Management to make contributions for the stated term of the CBA—necessarily also contemplate a party opting out. Therefore, Waste Management concludes, the 2005 CBA could be read to allow for the unilateral can- cellation of the CBA and the cessation of contribution payments prior to January 31, 2009. No. 10-3286 9 Waste Management’s reading of the 2005 CBA is grammatically inaccurate and unreasonable. The first clause, stating the duration of the CBA, is separated from the remainder of the language by a comma, and is then followed by an automatic renewal provision. The optout provision follows, modifying only the automatic renewal provision; the opt-out provision does not modify the first clause. Thus, the CBA unambiguously allows either party to unilaterally cancel the automatic renewal of the 2005 CBA, so long as sixty days’ notice is provided prior to the expiration of the CBA. It does not, as Waste Management asserts, allow for the unilateral cancellation of the CBA during the stated term of the CBA. As the district court aptly noted, Waste Management’s reading of the CBA “would be absurd if for no other reason than that it would allow either party to opt out of the contract at any time during the four- year term of the agreement except for the last sixty days.” Cent. States, Se. & Sw. Areas Pension Fund v. Waste Mgmt. of Mich., Inc., 737 F. Supp. 2d 952, 957 (N.D. Ill. 2010). Plainly, the terms of the relevant documents are unambiguous.2 2 Waste Management also identifies an additional ambiguity concerning the Fund’s Rehabilitation Plan, which relates to an employer withdrawing from the pension fund while the Fund is in critical status. But Waste Management did not preserve this argument for appeal, relegating it to only a footnote in its briefing to the district court. See Moriarty ex rel. Local Union No. 727 v. Svec, 429 F.3d 710, 722 (7th Cir. 2005) (“A footnote (continued...) 10 No. 10-3286 Waste Management also contends that there were latent ambiguities in the agreements that create an issue of material fact. A latent ambiguity is present when a contract appears unambiguous, but a disputed term “actually means something different from what it appears to mean on its face.” Neuma, 259 F.3d at 876. In limited circumstances, parties may present extrinsic evidence to demonstrate a latent ambiguity despite the fact that a contract appears clear on its face, id. at 87576, because the ambiguity “becomes apparent only in consideration of the surrounding circumstances,” Int’l Union v. ZF Boge Elastmetall LLC, 649 F.3d 641, 649 (7th Cir. 2011). But Waste Management does not identify any specific latent ambiguities in the language of the plan documents—ostensibly because the district court allowed for only limited discovery, and not because there are none. Accordingly, Waste Management argues that broader discovery was necessary to allow it to identify evidence of a latent ambiguity, notwithstanding the unambiguous terms of the documents. This brings us to a related point and the second issue on appeal: Waste Management’s claim that the district court abused its discretion in denying broader discovery. 2 (...continued) does not preserve an issue for review.”); To-Am Equip. Co. v. Mitsubishi Caterpillar Forklift Am., Inc., 152 F.3d 658, 663 (7th Cir. 1998) (finding that argument “buried” in a footnote in a brief to the district court did not preserve the issue for review). Thus, we will not consider it. No. 10-3286 11 “It is well-settled that district courts enjoy broad discretion in controlling discovery.” McCarthy v. Option One Mortg. Corp., 362 F.3d 1008, 1012 (7th Cir. 2004). We review the district court’s decision to deny Waste Management’s Rule 56(f) motion for an abuse of discretion. King v. Burlington N. & Santa Fe Ry. Co., 538 F.3d 814, 817 (7th Cir. 2008). We have previously noted a general reluctance to grant extensive discovery in ERISA cases, Semien v. Life Ins. Co. of N. Am., 436 F.3d 805, 813 (7th Cir. 2006) (citing Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 982 (7th Cir. 1999)), and the present case allows us to echo this sentiment. Here, discovery would be costly and produce very little relevant information when the terms of the plan documents are unambiguous. Waste Management has not offered any other rea- sonable interpretation of the unambiguous language in the plan documents, even assuming there was extrinsic evidence to support such a hypothetical alternative interpretation. “Although extrinsic evidence is admissible to show that a written contract which looks clear is actually ambiguous . . . there must be either contractual language on which to hang the label of ambiguous or some yawning void that cries out for an implied term.” ZF Boge Elastmetall, 649 F.3d at 649 (internal punctuation omitted). Such contractual language or the presence of a void is notably absent in the various documents, and Waste Management should not be entitled to expansive discovery when it has only the mere speculative allegation of a latent ambiguity. “[D]iscovery is not to be used as a fishing expedition.” 12 No. 10-3286 EEOC v. Harvey L. Walner & Assocs., 91 F.3d 963, 971 (7th Cir. 1996). Moreover, it is unclear how the issues Waste Management identified for discovery—conflicts of interest by the Trustees rendering the initial decision and the Fund’s “pattern of practice” in dealing with other employers—would help ascertain any latent ambiguity. Waste Management spent much time and effort arguing that the district court erred in holding that the Trustees’ interpretation should be reviewed under a deferential abuse of discretion standard, rather than de novo. But such an argument was largely wasted because, as previously stated, the terms of the documents are unambiguous. Thus, the standard of review is of no consequence. And as a result, any potential conflict of interest—which would be relevant to determine if there was an abuse of discretion—was largely irrelevant because the Trustee’s decision would be upheld even under a de novo standard. It is also unclear how the Fund’s “pattern of practice” in dealing with other employers—Waste Management asserts that the Fund did not enforce similar con- tractual rights with respect to other employers—would reveal latent ambiguities. Such business practice can hardly be considered novel; for a number of reasons, large companies commonly might choose to waive their contractual rights when dealing with some customers. Even if the Fund waived its contractual rights arising out of separate agreements with different employers, the Fund is still entitled to enforce its contracNo. 10-3286 13 tual rights according to the terms of its agreements with Waste Management. Extrinsic evidence of the Fund’s practice with other employers would hardly demonstrate a latent ambiguity. Thus, the district court did not abuse its discretion in denying Waste Management’s motion for broader discovery. Perhaps sensing the overall weakness of its argument, Waste Management concludes by boldly asserting that, as construed by the district court, the Participation Agreement and the other documents do not allow an em- ployer to ever withdraw from the pension fund. But this assertion is preposterous; Waste Management was only obligated to make contributions to the Fund through January 30, 2009. The parties, each sophisticated entities represented by competent legal counsel, bargained for this end date. Waste Management was free to bargain for an earlier end date or the option to withdraw earlier. But it chose not to, and instead agreed to make contributions through the stated term of the 2005 CBA. Although it scoured the plan documents looking for some plausible loophole allowing for an early withdrawal, Waste Management did so in vain.