James Price v. Bd of Trustees of the Ind. Laborer's Pension Fund
632 F.3d 288
6th Cir.2011Background
- James Price received occupational disability benefits under a multi-employer ERISA plan; in 2004 the Board amended Section 7A.5 to cap such benefits after 2006, affecting benefits already begun prior to 2005.
- Price’s benefits were discontinued December 31, 2006, after the amendment, while he remained disabled and under early retirement age considerations.
- Price sued under 29 U.S.C. § 1132(a)(1)(B), alleging the amendment violated ERISA by terminating a vested benefit.
- The district court held that Price’s benefits vested under Yard-Man inference and ordered reinstatement and attorney’s fees for Price.
- On appeal, the Sixth Circuit vacated and remanded, concluding the district court did not apply the correct standard of review and that Yard-Man framework may be inapplicable to disability welfare benefits.
- The court held that the Board’s discretionary interpretation is reviewed under arbitrary-and-capricious standard if the Plan grants interpretive discretion, and remanded for evaluation under that standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yard-Man inference applies to occupational disability benefits | Price argues Yard-Man inference supports vesting. | Board argues Yard-Man frameworks are inapplicable to disability welfare benefits. | Yard-Man framework not applied; not controlling here. |
| Whether Plan terms vest Price's disability benefits | Benefits vest because of plan language indicating long-term payment. | No express vesting for occupational disability; vesting unclear under plan terms. | Plan terms do not expressly vest occupational disability benefits. |
| What standard of review governs Board’s benefit termination | Arbitrary standard but district erred by misapplying Yard-Man. | Review under arbitrary and capricious if Plan grants discretionary interpretation. | Arbitrary and capricious standard applies; remand for proper review. |
| Was the Board’s interpretation of the Plan reasonable | Board misread vesting and terminated a vested benefit. | Board’s interpretation reasonable under Plan terms and discretion. | Remand to assess reasonableness under the arbitrary-and-capricious standard. |
| Effect on fees given remand | Fees awarded should stand. | Fees should be revisited on remand if district court vacates judgment. | Vacate attorney’s fee award pending remand. |
Key Cases Cited
- Int’l Union, United Auto., Aerospace, & Agric. Implement Workers of Am. v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir.1983) (origin of vesting inference in welfare-benefit context)
- Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.1998) (clear-and-express statement of vesting required for unilateral benefits)
- Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir.1998) (framework for reviewing welfare-benefit vesting disputes)
- Noe v. PolyOne Corp., 520 F.3d 548 (6th Cir.2008) (intent to vest inferred from CBA language and durational clauses)
- Maurer v. Joy Techs. Inc., 212 F.3d 907 (6th Cir.2000) (inferring vesting from durational provisions in CBA)
- Feifer v. Prudential Ins. Co. of Am., 306 F.3d 1202 (2d Cir.2002) (discusses vesting in welfare plans with disability benefits)
- Gibbs ex rel. Estate of Gibbs v. CIGNA Corp., 440 F.3d 571 (2d Cir.2006) (distinguishes cases with explicit vesting language for disability)
- Noe v. PolyOne Corp., 520 F.3d 548 (6th Cir.2008) (emphasizes vesting in context of CBA and durational clauses)
- BVR Liquidating, Inc., 190 F.3d 768 (6th Cir.1999) (treatment of plan terms in vesting analysis)