Court Opinion

ID: 9000937
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:02:46.449913+00
Date Added: 2024-06-11T17:11:09.934697
License: Public Domain

WILKINSON, Circuit Judge,
concurring:
I am in agreement with the panel that the district court’s entry of summary judgment for defendants should be affirmed. I write here to emphasize my view that federal courts should be quite cautious in fashioning federal common law to govern actions brought under ERISA.
I fear it will be all too tempting for federal courts, in the cloak of federal common law, to effectively rewrite portions of this federal statute. See Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985, 992 (4th Cir.1990). The device of federal common law does not authorize federal courts to smuggle state common law principles into ERISA without regard for the statutory text. See, e.g., id. at 992; Nachwalter v. Christie, 805 F.2d 956, 959-60 (11th Cir.1986). State rights and remedies that are expressly preempted under ERISA by 29 U.S.C. § 1144 may not be resuscitated as federal common law claims without an exacting examination of whether ERISA permits such a result. ERISA’s preemption provision was designed to avoid “conflicting employer obligations and variable standards of recovery” under various states’ laws. Holland v. Burlington Indus., Inc., 772 F.2d 1140, 1147 (4th Cir.1985), aff'd mem., 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 559 (1986). While federal law is more of a single corpus than state law, these practical concerns do not magically disappear in the case of federal common law. The prospect of disuniformity remains especially disquieting for businesses with national plans and multi-state operations that can expect to be sued in many different federal forums. The mere relabelling of preempted state claims as federal common law principles would in my judgment effectively nullify 29 U.S.C. § 1144.
ERISA demands adherence to the written terms of an employee benefit plan. The statute requires that all ERISA plans be “established and maintained pursuant to a written instrument,” 29 U.S.C. § 1102(a)(1), and that the written instrument describe the formal procedures by which the plan can be amended, id. § 1102(b)(3). These two provisions are designed to give both the “plan’s participants and administrators a clear understanding of their rights and obligations,” Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1296 (5th Cir.1989), and they do not authorize oral or implied modifications to a written *1454plan. Indeed, even a written modification must be adopted in conformity with the amendment procedures set out in the plan in order to have effect. Federal common law does not provide a backdoor through which these statutory requirements may be evaded, and attempts to import state common law principles such as equitable or promissory estoppel to alter and undermine written obligations have been consistently rebuffed by the courts. See, e.g., Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1165 n. 10 (3d Cir.1990); Cefalu, 871 F.2d at 1296-97; Musto v. American Gen. Corp., 861 F.2d 897, 910 (6th Cir.1988); Straub v. Western Union Tel. Co., 851 F.2d 1262, 1265-66 (10th Cir.1988); Nachwalter, 805 F.2d at 959-61; see also Pizlo v. Bethlehem Steel Corp., 884 F.2d 116, 120 (4th Cir.1989) (rejecting claims because “they rest on an allegation that the pension plan was modified by informal and unauthorized amendment which, as a matter of law, is impermissible”).
Importation of state common law principles to alter written obligations would not only conflict with the text of the statute, it would also undermine the purposes of ERISA. ERISA is designed” to promote the interests of employees and their beneficiaries in employee benefit plans,” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983), as well as “to protect contractually defined benefits,” Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148, 105 S.Ct. 3085, 3093, 87 L.Ed.2d 96 (1985). These interests are hardly promoted if deviations from the written plan are freely allowed. Modifications to a written plan that do not conform to the formal amendment procedures threaten the actuarial soundness of the plan and thereby undercut the ability of plan participants to rely on their expected stream of benefits. See, e.g., National Cos. Health Benefit Plan v. St. Joseph’s Hosp. of Atlanta, Inc., 929 F.2d 1558, 1571 (11th Cir.1991); Cefalu, 871 F.2d at 1296. Strict adherence to a written plan also prevents a collusive agreement between an employer and a favored employee that could operate to the detriment of all other plan participants’ rights. See id. In addition, if employer obligations could be casually created outside the written plan, a substantial disincentive to offering such plans would arise since employers would be potentially exposed to massive future liabilities for which they could not confidently plan. See Moore v. Metropolitan Life Ins. Co., 856 F.2d 488, 492 (2d Cir.1988). This would undercut the public interest in encouraging employers to offer these plans. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549, 1556, 95 L.Ed.2d 39 (1987). Finally, allowing informal modifications would invite costly, litigious evidentiary disputes over what “promises” or “representations” were or were not made. While this list is by no means complete, it offers a glimpse into how use of federal common law to undermine a written plan would do serious harm to the aims of the statute.
Here the district court properly refused to use federal common law to fashion a basis for plaintiffs to recover. Black and Decker expressly stated that its previous early retirement offers were available only to a limited group of eligible employees for a limited period of time. Plaintiffs seek to find implied representations stemming from these earlier offers, as well as from an earlier plant modernization, that these benefits would be offered to them in the event of a work force reduction. However, they can point to no formal written amendment to the plan that created any such entitlement to benefits.
In a given instance, it may seem unfair to deny an employee benefits of which he or she seems deserving. We accommodate this sense of fairness by interpreting truly ambiguous plan provisions in the interests of those beneficiaries both the statute and the plan were intended to serve. It serves no interest, however, other than that of actuarial chaos, to have the courts overturning carefully crafted plan provisions in the name of federal common law. Because I believe the panel’s decision is consistent with this view, I concur in it.