Dresel v. Pension Plan of the Pacific Northwest Laboratories, Battelle Memorial Institute
708 F. App'x 326
| 9th Cir. | 2017Background
- Peter Dresel, a former employee, applied for Early Retirement Benefits (ERB) under the Pension Plan of the Pacific Northwest Laboratories, Battelle Memorial Institute.
- At election time Dresel was 57 and had over 17 years of credited service, meeting the Plan’s age (55–64) and service (10 years) definitions for ERB.
- The Plan denied ERB on the ground that Dresel was not an "active employee" when he elected to commence benefits.
- Dresel sued under ERISA; the district court granted summary judgment for Dresel and denied the Plan’s cross-motion.
- The Plan appealed the denial; Dresel cross-appealed the standard-of-review applied by the district court.
- The Ninth Circuit affirmed, holding the Plan abused its discretion by adding an "active employee" requirement and concluding the Plan waived any alternative argument that Dresel was eligible only for Deferred Vested Benefits (DVB).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plan abused its discretion by denying ERB to Dresel | Dresel argued he met the Plan definitions (age and credited service) and was eligible for ERB despite being a former employee | Plan argued "Retirement" requires termination (active employee requirement), so Dresel was only eligible for DVB | Court held Plan abused its discretion: Plan cannot add eligibility requirements that contradict plain plan terms; Dresel qualified for ERB |
| Whether the Plan may assert a new reason on appeal (recharacterizing Retirement as termination) | Dresel argued the Plan waived any new rationale not raised administratively | Plan argued its redefinition was reasonable and relevant because Dresel could take DVB | Court held Plan waived the new rationale because it was not presented during the administrative process and ERISA regs require citation of plan provisions supporting denials |
| Proper standard of review (abuse of discretion vs. tempered skepticism) | Dresel contended the district court applied too deferential a standard | Plan argued its interpretation deserved deference | Court found any question about the degree of deference irrelevant because the denial fails even under the most deferential abuse-of-discretion standard |
| Whether remand is necessary to apply a different standard of review | Dresel cross-appealed urging remand for a less deferential review | Plan sought affirmance without remand | Court held remand unnecessary; decision affirmed because the denial is unreasonable under any standard |
Key Cases Cited
- Sznewajs v. U.S. Bancorp Amended & Restated Supplemental Benefits Plan, 572 F.3d 727 (9th Cir.) (establishes abuse-of-discretion review standard for plan interpretations)
- Salomaa v. Honda Long Term Disability Plan, 637 F.3d 958 (9th Cir.) (overruled some aspects of plan interpretation but cited for standard context)
- Lehman v. Nelson, 862 F.3d 1203 (9th Cir.) (administrator abuses discretion when interpretation conflicts with plain plan language)
- Tapley v. Locals 302 & 612 of the Int’l Union of Operating Eng’rs-Emp’rs Constr. Indus. Ret. Plan, 728 F.3d 1134 (9th Cir.) (same principle limiting administrators from adding eligibility requirements)
- Canseco v. Constr. Laborers Pension Tr., 93 F.3d 600 (9th Cir.) (trustees may not impose additional eligibility requirements that clash with plan terms)
- Harlick v. Blue Shield of Cal., 686 F.3d 699 (9th Cir.) (plan administrators may not assert new reasons for denial that were not given during administrative process)
- Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (U.S. Supreme Court) (recognizes potential conflict when administrator both pays and determines benefits; courts may apply tempered skepticism)
- Schikore v. BankAmerica Supplemental Ret. Plan, 269 F.3d 956 (9th Cir.) (no need to decide standard of review when denial fails even under deferential standard)