Central States, Southeast & Southwest Areas Pension Fund v. Waste Management of Michigan, Inc.
674 F.3d 630
7th Cir.2012Background
- Waste Management sought early withdrawal from the Fund’s pension plan under ERISA; contract terms unambiguously prohibited withdrawal beyond the 2005 CBA term.
- A Trust Agreement granted Trustees discretion to interpret plan documents and bound the Union, Employees, and Employers to Trustees’ constructions.
- A Participation Agreement barred modifications to reduce or eliminate Waste Management’s contribution obligation and stated it controlled over the CBA where in conflict.
- A 2008 CBA purported to abrogate Waste Management’s obligation immediately, six weeks before the 2005 CBA’s expiration; the Fund contested that contributions must continue through January 31, 2009.
- Trustees ruled the Participation and Trust Agreements barred the early withdrawal; the Fund sued under ERISA §515 for unpaid contributions; district court granted summary judgment for the Fund.
- On appeal, the Seventh Circuit reviews contract interpretation de novo where terms are unambiguous and limits discovery where no latent ambiguity exists.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plan documents unambiguously prohibit withdrawal. | Fund/WB argue terms unambiguous. | Waste Mgmt argues ambiguity around 'prospectively' language. | Unambiguous; withdrawal prohibited. |
| Standard of review and discovery scope. | Discovery needed for conflicts/latent ambiguity; de novo review. | Discovery should be limited; terms unambiguous, deferential review appropriate. | Abuse-of-discretion review; limited discovery proper. |
| Existence of latent ambiguities. | Extrinsic evidence could reveal latent ambiguity. | No latent ambiguity identified; discovery unwarranted. | No latent ambiguity; no need for broader discovery. |
Key Cases Cited
- Kamler v. H/N Telecomm. Servs., Inc., 305 F.3d 672 (7th Cir. 2002) (contract interpretation under federal common law; ambiguity standard)
- Neuma, Inc. v. AMP, Inc., 259 F.3d 864 (7th Cir. 2001) (unambiguous terms; look at four corners)
- RFMS, Inc. v. Trs. of S. Ill. Carpenters Welfare Fund, 401 F.3d 847 (7th Cir. 2005) (determinant of ambiguity and summary-judgment standard)
- Barnett v. Ameren Corp., 436 F.3d 830 (7th Cir. 2006) (contract interpretation as law; summary judgment appropriate for unambiguous terms)
- McCarthy v. Option One Mortg. Corp., 362 F.3d 1008 (7th Cir. 2004) (broad discretion in discovery)