Furfari v. Pension Benefit Guarantee Corporation, Civil Action No. 2020-2424

Plaintiff Anthony Furfari worked for Riverside/Penn Traffic, injuring his shoulder in 2005 and leaving covered employment; he applied for a disability pension in 2009 under the Riverside Division Pension Plan.
The Pension Plan awards a disability pension for a “Total and Permanent Disability” as defined in §5.06(d), a two-part test tied to inability to perform duties "with the Employer," with the Trustees determining entitlement.
Penn Traffic filed bankruptcy on November 18, 2009, and the Pension Plan terminated (trustee: PBGC); PBGC began paying early retirement benefits but later reviewed disability eligibility.
The plan administrator previously told Furfari his pension was contingent on a Social Security (SSA) disability award; Furfari’s SSA award was effective October 26, 2010 (after the bankruptcy/termination date).
PBGC issued an initial denial (Feb. 17, 2017) and the Appeals Board affirmed (Apr. 18, 2018) because Furfari’s SSA award post‑dated plan termination; Furfari sued and moved for summary judgment.
The district court vacated the Appeals Board decision and remanded for further proceedings, denying PBGC’s cross‑motion without prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a judicially imposed issue‑exhaustion (waiver) rule barred Furfari from raising that PBGC improperly required an SSA award	Furfari: PBGC proceedings are inquisitorial; he need not have raised the SSA‑condition before Appeals Board	PBGC: Plaintiff waived the argument by not raising it administratively	Court: No issue‑exhaustion here; PBGC proceedings are inquisitorial, so judicially imposed waiver does not apply
Whether PBGC reasonably required an SSA disability award as a condition for Plan disability benefits	Furfari: Plan language §5.06(d) does not require an SSA award; Plan’s test is employer‑focused and trustees decide disability	PBGC: Prior plan administrator and PBGC reasonably relied on SSA determination; PBGC regulations permit reliance on SSA standards in some circumstances	Court: Appeals Board unreasonably imposed an extra‑textual SSA requirement contrary to the Plan and failed to explain reliance; decision arbitrary and capricious; vacated and remanded
Whether court should award benefits now or remand	Furfari: Requests award of benefits dating to April 1, 2009	PBGC: Urged affirmance of denial	Court: Does not decide entitlement; remands to PBGC for proceedings consistent with opinion; denies PBGC motion without prejudice

Sims v. Apfel, 530 U.S. 103 (2000) (framework for when judicially imposed issue‑exhaustion is appropriate)
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard requires reasoned explanation)
Deppenbrook v. PBGC, 778 F.3d 166 (D.C. Cir. 2015) (PBGC guarantees only benefits nonforfeitable as of plan termination)
Davis v. PBGC, 734 F.3d 1161 (D.C. Cir. 2013) (PBGC’s role as trustee and administrative procedures)
PBGC v. R.A. Gray & Co., 467 U.S. 717 (1984) (ERISA Title IV purpose and PBGC role)
Nachman Corp. v. PBGC, 446 U.S. 359 (1980) (ERISA protections for retirement benefits)
American Textile Mfrs. Inst. v. Donovan, 452 U.S. 490 (1981) (court cannot accept post‑hoc agency rationalizations)
Wagener v. SBC Pension Benefit Plan—Non Bargained Program, 407 F.3d 395 (D.C. Cir. 2005) (deference limits where interpretation contradicts plan language)