Court Opinion

ID: 990377
Source: CourtListenerOpinion
Date Created: 2013-07-03 23:20:25.501671+00
Date Added: 2024-06-11T15:10:37.177256
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

VIRGINIA BEACH POLICEMEN'S
BENEVOLENT ASSOCIATION; ROBERT
MATTHISON, joint trustee of the
Centurion Health and Welfare
Benefit Plan; MICHAEL F. GELARDI,
joint trustee of the Centurion Health
and Welfare Benefit Plan,
                                        No. 95-1773
Plaintiffs-Appellants,

v.

ROBERT B. REICH, Secretary of
Labor; UNITED STATES DEPARTMENT
OF LABOR,
Defendants-Appellees.
MICHAEL F. GELARDI, in his official
capacity as a Trustee of the
Centurion Health Trust; ROBERT W.
MATHIESON, in his official capacity
as a Trustee of the Centurion Health
Trust; VIRGINIA BEACH POLICE
BENEVOLENT ASSOCIATION, Local 34,
Plaintiffs-Appellants,

v.

ANDREW J. KARPINSKI, individually
and in his official capacity as
Commissioner of Insurance for the
                                                         No. 95-2013
State of New Jersey; JACK EHNES,
individually and in his official
capacity as Commissioner of
Insurance for the State of Colorado;
LINDA S. KAISER, individually and in
her official capacity as
Commissioner of Insurance for the
Commonwealth of Pennsylvania;
EDWARD J. MUHL, individually and
in his official capacity as
Superintendent of Insurance for the
State of New York,
Defendants-Appellees.

Appeals from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Rebecca B. Smith, Raymond A. Jackson, District Judges.
(CA-93-1170-2, CA-95-244-2)

Argued: June 5, 1996

Decided: September 10, 1996

Before RUSSELL, WILKINS, and NIEMEYER, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Wyatt B. Durrette, Jr., DURRETTE, IRVIN & BRAD-
SHAW, P.C., Richmond, Virginia, for Appellants. Alexander Fernan-
dez, Michael Edmond Goldman, UNITED STATES DEPARTMENT
OF LABOR, Washington, D.C., for Appellees. ON BRIEF:
Barrett E. Pope, Arnold C. Moore, Jr., William O. Quirey, Jr., DUR-
RETTE, IRVIN & BRADSHAW, P.C., Richmond, Virginia; Michael
T. Leibig, Carla M. Siegal, ZWERDLING, PAUL, LEIBIG, KAHN,
THOMPSON & DRIESEN, P.C., Fairfax, Virginia, for Appellants.
Thomas S. Williamson, Jr., Marc I. Machiz, Leslie C. Perlman,
Karen L. Handorf, Dan Doyle, Stephen G. Smith, Anne L. Buckbo-
rough, UNITED STATES DEPARTMENT OF LABOR, Washing-
ton, D.C., for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The Virginia Beach Policemen's Benevolent Association ("PBA")
is a labor union established to support Virginia Beach police officers.
The PBA is the recognized collective bargaining representative of all
security personnel employed at Ocean Breeze Festival Park, Inc.
("Ocean Breeze"). The PBA and Ocean Breeze entered into a collec-
tive bargaining agreement on October 20, 1992. That agreement cre-
ated the Centurion Health Trust, which established the Centurion
Health & Welfare Benefit Plan (the "Centurion Plan") to provide
health benefits to PBA members.

The Centurion Plan began providing health coverage in January
1993. Since its inception, the Centurion Plan has actively solicited

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health insurance business in various states. The Centurion Plan cur-
rently covers approximately 10,000 individuals, even though only
approximately 20 of its covered individuals are PBA members
employed by Ocean Breeze.

Under § 3(40)(A)(i) of ERISA, a "multiple employer welfare
arrangement" is an employee welfare benefit plan that offers or pro-
vides welfare benefits to the employees of two or more employers. 29
U.S.C. § 1002(40)(A)(i). A multiple employer welfare arrangement is
subject to state insurance regulations unless it is established or main-
tained pursuant to an agreement that the Secretary of Labor finds to
be a collective bargaining agreement. 29 U.S.C.§§ 1002(40)(A)(i)
and 1144(b)(6).

On December 17, 1992, representatives of the Centurion Plan
requested that the Secretary of Labor issue an advisory opinion find-
ing that the Centurion Plan is established or maintained pursuant to
a collective bargaining agreement, and thus exempt from state insur-
ance regulations under ERISA § 3(40)(A)(i). The Secretary responded
that he was not prepared to make a finding under ERISA
§ 3(40)(A)(i). Subsequently, the Department of Labor decided that, in
lieu of making case-specific determinations, it would develop a regu-
lation to address whether multiple employer welfare plans are estab-
lished or maintained pursuant to collective bargaining agreements. On
November 14, 1994, the Department of Labor formally announced its
intention to publish such a regulation. 59 Fed. Reg. 57,800 (Nov. 14,
1994).

Meanwhile, state regulators have attempted to bring the Centurion
Plan into compliance with the insurance laws of the states in which
Centurion has marketed its health coverage. On April 20, 1993, the
Centurion Plan entered into a consent decree with the Commonwealth
of Virginia in which it agreed not to recruit new health plan partici-
pants until the Secretary of Labor determined whether the Centurion
Plan was established or maintained pursuant to a collective bargaining
agreement. Nevertheless, the Centurion Plan steadfastly maintains
that it is exempt from state insurance regulations because it is estab-
lished or maintained pursuant to a collective bargaining agreement.

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On December 3, 1993, the PBA and the trustees of the Centurion
Plan brought an action against the Secretary of Labor, alleging that
the Secretary violated a statutory mandate by refusing to make a
determination that the Centurion Plan was established pursuant to a
collective bargaining agreement.* The appellants sought judicial
review under the Administrative Procedures Act, 5 U.S.C. § 701, et
seq., of the Secretary of Labor's failure to make a determination. In
the alternative, they sought a writ of mandamus ordering the Secre-
tary of Labor to make a determination, or a declaratory judgment
finding--in spite of the Secretary's silence--that the Centurion Plan
is established or maintained pursuant to a collective bargaining agree-
ment.

On March 22, 1995, the district court granted summary judgment
in favor of the Secretary of Labor. Virginia Beach Policemen's
Benevolent Ass'n v. Reich, 881 F. Supp. 1059 (E.D. Va. 1995) (Smith,
J.). The district court held that the appellants could not seek judicial
review under the APA. A party seeking judicial review must show
that the agency's action (or failure to act) is a"final agency action,"
5 U.S.C. § 704, and is not committed by law to the discretion of the
agency, 5 U.S.C. § 701(a)(2). The district court concluded that the
Secretary's refusal to make an individual determination on the Centu-
rion Plan while it is developing a general regulation applying to all
such determinations did not constitute a final agency action. Virginia
Beach PBA, 881 F. Supp. at 1064-66. Furthermore, the district court
exhaustively reviewed the legislative history of ERISA § 3(40)(A)(i)
and concluded that the Secretary's determination under that section is
committed to agency discretion and therefore unreviewable. Id. at
1066-71. Regarding the alternative arguments, the district court
denied the appellants a writ of mandamus because it found that the
Secretary did not have a clear duty to make a finding under ERISA
§ 3(40)(A)(i), and it held that it lacked jurisdiction to issue a declara-
tory judgment stating that the Centurion Plan is established or main-
tained pursuant to a collective bargaining agreement.
_________________________________________________________________
*Initially, Ocean Breeze and the Centurion Plan were plaintiffs in this
lawsuit. The district court held that these parties did not have standing
under ERISA § 502(k), 29 U.S.C. § 1132(k). Ocean Breeze Festival
Park, Inc. v. Reich, 853 F. Supp. 906, 916 (E.D. Va. 1994).

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Unsuccessful in their attempt to obtain a finding that the Centurion
Plan is established or maintained pursuant to a collective bargaining
agreement, the appellants brought a second action against the Com-
missioners of Insurance for the states of New Jersey, Colorado, Penn-
sylvania, and New York. In this action, the appellants sought a
declaratory judgment that the Centurion Plan is exempt from state
regulation and a preliminary injunction preventing state insurance
commissioners from enforcing their regulations against the Centurion
Plan.

The district court dismissed this action on April 24, 1995, holding
that collateral estoppel barred the appellants' request for a declaratory
judgment on the question of whether the Centurion Plan is exempt
from state regulation. Gelardi v. Karpinski, Civil Action No.
2:95cv244 (E.D. Va. Apr. 24, 1995) (Jackson, J.). The district court
also denied the appellants' motion for a preliminary injunction.

The appellants have appealed the dismissals of both actions, which
have been consolidated in this appeal.

We have read the briefs, heard oral argument, and considered the
parties' arguments. We conclude that the district court, in both cases,
has thoroughly analyzed and correctly decided the issues. We there-
fore affirm on the reasoning of the district court.

AFFIRMED

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