Court Opinion

ID: 8963898
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:59:19.850951+00
Date Added: 2024-06-11T17:10:17.424373
License: Public Domain

KOZINSKI, Circuit Judge,
dissenting:
I cannot agree that the plan’s clear and simple language is reasonably susceptible of the interpretation offered by the defendants. Plain as day, the plan provides that the valuation date shall be on “[t]he last day of each calendar quarter and, as the Administrative Committee elects, any other day of the Plan Year.” Pan American World Airways, Inc. Employee Stock Ownership Plan (Pan Am ESOP), at 1-4, Excerpts of Record (ER) at 3 (emphasis added). This language is not in the least ambiguous: It can only be interpreted to mean that the Administrative Committee has the authority to select valuation dates in addition to the four already provided by the plan. The Administrative Committee has nevertheless taken the position that it may do away with the quarterly valuation dates altogether, and substitute a single valuation date in their stead. I can think of only one way to derive that interpretation from the quoted provision: by substituting the disjunctive “or” for the conjunctive “and.” Unlike the majority, I am unable to approve as reasonable an interpretation that requires us to perform such radical surgery on a document’s plain language.
I see two obstacles barring the majority’s conclusion, one linguistic, the other structural. As a linguistic matter, “and” and “or” are not synonyms; indeed, they are more nearly antonyms. One need only start the day with a breakfast of ham or eggs to be duly impressed by the difference. While “and” and “or” are both small words, and are occasionally seen joined with a slash, when they stand alone, they have substantially different meanings with dramatically different effects. We give our language, and our language-dependent legal system, a body blow when we hold that it is reasonable to read “or” for “and.” While I don’t foreclose the possibility of substituting the two words for each other where it is necessary to avoid a patent absurdity or correct a drafting error, see, e.g. Leff, The Leff Dictionary of Law: A Fragment, 94 yale L.J. 1855, 2021 (1985); People v. Skinner, 39 Cal.3d 765, 775-77, 217 Cal.Rptr. 685, 704 P.2d 752 (1985), I can’t agree that the substitution is permissible in ordinary circumstances.
Which leads me to my structural objection. Reading the plan’s language as written not only does not lead to an absurd result, it leads to a result far more in keeping with the plan’s organization and logic. Under the terms of the plan, the Administrative Committee is given discretion to operate and administer the plan on a day-to-day basis; to amend the plan, however, there must be action by the Board of Directors. Pan Am ESOP, at VIII-3, IX-1, ER at 3. Giving the word “and” in the quoted phrase its plain meaning is fully consistent with this scheme: It authorizes the Administrative Committee to add a valuation date if convenient in a given year. For example, the Committee might deem it useful to add a valuation date to coincide with a particular event, such as a stock split or a buyout of Pan Am’s stock by another company. Consistent with the Administrative Committee’s limited powers, the addition of such a spot valuation date would be effective only momentarily; the plan would return to quarterly valuations in future years.
Under the majority’s holding, however, the Administrative Committee may permanently do away with quarterly valuation dates. This pro tanto amendment of the plan, effective for years to come, is accomplished without approval of the Board of Directors, neatly circumventing the plan’s amendment procedures. Such a departure from the terms of a contract would be disquieting under any circumstances. It is even less acceptable when the contract is an employee benefit plan subject to the protections Congress built into ERISA, including the requirement that such plans be amended only pursuant to procedures carefully delineated in the plan itself. See, e.g., Nachwalter v. Christie, 805 F.2d 956, 960 (11th Cir.1986) (informal written agreements may not be used to modify an ERISA plan). The Administrative Committee’s proffered interpretation of the plan allows it to do precisely what the statute prohibits.
*747I can see no justification for approving an interpretation that so clearly runs against the policies of ERISA and the plan’s language and logic. The plan was drafted by sophisticated parties who then filed it with the Secretary of Labor pursuant to 29 U.S.C. § 1022(a)(2). After filing the plan, the Administrative Committee had ample time to change the valuation date by presenting an amendment to the Board of Directors. Everyone involved had a lawyer to hold his hand every step of the way. If these parties are not bound by the clear language of legal instruments designed to constrain their conduct, who is? I would reverse and instruct the district court to give plaintiffs the “and” they deserve.