Lehman v. Nelson, No. 15-35414 (9th Cir. 2017)
Annotate this CasePlaintiff filed a putative class action alleging that the Trustees breached the Pension Plan's terms, violated the Employee Retirement Income Security Act's (ERISA) sections 204 and 305, and breached their fiduciary duties by withholding $1.00 per hour from his employer contributions without providing an accrued benefit. The Ninth Circuit held that only amendment 14 was fully litigated; the district court correctly interpreted the interaction between Amendment 15, Article 5 of the Pension Plan, and the Reciprocal Agreement; ERISA section 305(e) does not apply before critical status certification; and because the panel held that the parties did not fully litigate withholdings under Amendment 24, it need not address whether the district court erred by failing to make specific findings about the alternative schedules in the Rehabilitation Plan. Accordingly, the panel affirmed in part, reversed in part, and remanded for further proceedings on the withholdings under Amendment 24. The panel vacated the award of attorneys' fees.
Court Description: Employee Retirement Income Security Act. The panel affirmed in part and reversed in part the district court’s judgment in favor of the plaintiffs in an ERISA class action concerning a pension fund. After the trustees of the IBEW Pacific Coast Pension Fund learned that it would soon enter “critical status” under the Pension Protection Act of 2006, they amended the pension plan twice, in Amendments 14 and 24, and began withholding at least $1.00 per hour from all employer contributions to improve the plan’s funding status. The named plaintiff was a “traveler” who worked in the jurisdictions of various local union pension funds, and his employers in those jurisdictions contributed to the local funds for the areas in which the work was performed. Under a reciprocal agreement among home funds, the plaintiff’s employer contributions were transferred to his home pension fund. Under Amendment 14, the Pacific Coast Fund withheld 4 LEHMAN V. NELSON $1.00 per hour that the plaintiff worked in the Fund’s jurisdiction. The district court granted summary judgment in favor of the plaintiff in part, ruling that the trustees abused their discretion as plan administrator in interpreting Amendment 14’s $1.00 withholding to apply to reciprocal transfers. The district court also certified a plaintiffs’ class. In a clarifying order, the district court ruled that its previous orders also applied to withholding under Amendment 24, and it awarded damages for withholdings under both amendments. The panel held that only Amendment 14 was fully litigated before the district court, and vacated the damages award for withholdings under Amendment 24 because the trustees did not have notice that those withholdings were at issue, nor an opportunity to respond. Affirming the damages award for withholdings under Amendment 14, the panel held that the district court correctly interpreted the interaction between Amendment 14, Article 5 of the pension plan, and the reciprocal agreement. The panel concluded that the district court erred by ruling, in the alternative, that interpretation of Amendment 14 to apply to travelers who worked in the Pacific Coast Fund’s jurisdiction on a temporary basis violated ERISA § 305. The panel remanded for further proceedings on the withholdings under Amendment 24. The panel also vacated the district court’s award of attorneys’ fees. It declined to reach the plaintiffs’ issues on cross-appeal. LEHMAN V. NELSON 5
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