Opinion ID: 187522
Heading Depth: 3
Heading Rank: 2

Heading: The Effect of the Omission

Text: Appellants next argue that a procedural irregularity in the adoption of an amendment cannot support a holding invalidating it. Appellants' Br. 19. In appellants' view, [c]ourts should not invalidate amendments to ERISA plans that are adopted without strict adherence to plan amendment procedures unless there is evidence of bad faith regarding the amendment procedure, active concealment of the amendment itself, or plaintiff's detrimental reliance on the plan procedures. Id. Unfortunately for appellants, that is not the law. The Supreme Court has told us that ERISA ... follows standard trust law principles in dictating only that whatever level of specificity a company ultimately chooses, in an amendment procedure or elsewhere, it is bound to that level. Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 85, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). While arguably the Curtiss-Wright statement qualifies as dicta, carefully considered language of the Supreme Court, even if technically dictum, generally must be treated as authoritative. U.S. v. Dorcely, 454 F.3d 366, 375 (D.C.Cir.2006) (quotation omitted). This is especially so here as the Supreme Court has reiterated the same teaching in Inter-Modal Rail Employees Ass'n v. Atchison, Topeka and Santa Fe Railway Co., 520 U.S. 510, 515-16, 117 S.Ct. 1513, 137 L.Ed.2d 763 (1997) (An employer may, of course, retain the unfettered right to alter its promises, but to do so it must follow the formal procedures set forth in the plan.) (discussing ERISA plans). The clear implication of the Supreme Court's language is that there must be amendment procedures in a plan, and those amendment procedures must be followed for the valid adoption of an amendment. Our sibling circuits follow this view of the law with near unanimity. In Coffin v. Bowater Inc., 501 F.3d 80, 91-92 (1st Cir.2007), the First Circuit stated that an ERISA plan amendment must be in writing; it must be executed by a party authorized to amend the plan; the language of the amendment must clearly alert the parties that the plan is being amended; and the amendment must meet any other requirements laid out for such amendments in the plan's governing documents. Similarly, in Halliburton Co. Benefits Committee v. Graves, 463 F.3d 360, 371-72 (5th Cir.2006), the Fifth Circuit opined that [i]n order to amend a welfare benefit plan governed by ERISA, the employer must provide a procedure for amending such plan, and for identifying the persons who have authority to amend the plan. ... [O]nly an amendment executed in accordance with the plan's procedures is effective. (internal citations and quotations omitted). The Third Circuit in Depenbrock v. Cigna Corp., 389 F.3d 78, 82-83 (3d Cir.2004), held that an amendment is ineffective if it is inconsistent with the governing instruments.... ERISA specifies that a valid amendment can only be made in the manner specified in the plan document. Other circuits have acted consistently. See Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 937 (9th Cir.2003) (Section 402 of ERISA requires employee benefit plans to specify both an amendment procedure and a procedure for identifying persons with authority to amend. These amendment procedures, once set forth in a benefit plan, constrain the employer from amending the plan by other means.) (citation omitted); Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 148-49 (2d Cir.1999) (looking to corporate formalities to see whether a pension plan was amended); Miller v. Coastal Corp., 978 F.2d 622, 624 (10th Cir.1992) (ERISA requires all modifications to an employee benefit plan ... to conform to the formal amendment procedures. ...); Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 58-59 (4th Cir.1992) ([A]ny modification to a plan must be implemented in conformity with the formal amendment procedures and must be in writing.); Confer v. Custom Eng'g Co., 952 F.2d 41, 43 (3d Cir. 1991) (Only a formal written amendment, executed in accordance with the Plan's own procedure for amendment, could change the [ERISA medical] Plan.); Albedyll v. Wi. Porcelain Co. Revised Ret. Plan, 947 F.2d 246, 254-55 (7th Cir.1991) (holding that an ERISA pension plan amendment was invalid because it did not comply with the plan's procedures for amendment). In the face of this otherwise unanimous array, appellants ask us to follow what they call the leading case on the proper standard for determining whether an ERISA plan amendment should be invalidated. Appellants' Br. 19. The case appellants cite is Loskill v. Barnett Banks, Inc. Severance Pay Plan, 289 F.3d 734 (11th Cir.2002). Concededly, that case appears to have reasoned that bad faith was necessary for an invalidation of an amendment adopted in disregard of the procedures required by the plan. We cannot, however, see what makes it the leading case when no other court has ever followed it. Nor will we. Indeed, even the Eleventh Circuit seems to have ignored the holding of Loskill. See Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d 1276, 1283 (11th Cir.2003) (invalidating a purported amendment to an ERISA-covered disability plan because of lack of compliance with plan amendment procedures without any discussion of bad faith, active concealment, or detrimental reliance). The Supreme Court's guidance on the necessity of amendment procedures drives us toward a conclusion that those procedures should not be ignored. Likewise, the near unanimous conclusions of our fellow circuits weighs heavily against the novel construction sought by appellants. Appellants give us no reason why we should treat the written procedures of the plan so lightly, nor can we think of any. An amendment procedure is there to be followed. It is there to give fair notice to the beneficiary under the plan. We have already upheld the district court's finding that it was not followed in this case. In short, we adopt the near unanimous view of the other circuits that a failure to follow the amendment procedures of a plan invalidates an amendment without regard to a showing of bad faith. We therefore uphold the conclusion of the district court that the effect of the failure in this case renders the amendment invalid.