James Price v. Bd. of Trs. of the Ind. Laborer's Pension Fund
707 F.3d 647
| 6th Cir. | 2013Background
- Price filed an ERISA suit after occupational disability benefits were discontinued following a 2004 Plan amendment.
- Plan Section 15.1 permits retroactive amendments by the Board to bring the Plan in line with ERISA and amendments thereto.
- Section 7A.5 previously limited Occupational Disability Benefits to a period ending at Early Retirement Age, prompting amendment in 2004.
- Price began benefits in 1990 (Total and Permanent Disability); in 2001 moved to Occupational Disability Benefits, continuing until Early Retirement Age.
- Price’s benefits were discontinued December 31, 2006; Price became eligible for early retirement in September 2012.
- District court granted Price judgment under Yard-Man and Sprague-based vesting logic; the Sixth Circuit reversed and remanded for arbitrary-and-capricious review based on the Plan’s terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board’s interpretation of the Plan was reasonable | Price argued the amendment terminated vested disability benefits in contravention of the Plan. | Board argued amendments may amend disability benefits and terminate them within the Plan’s terms. | Board's interpretation was reasonable; not arbitrary and capricious. |
| Whether welfare benefits vest under ERISA and the Plan | Price contends welfare benefits vest due to prior award. | Welfare benefits do not vest unless the Plan provides otherwise; termination may occur under Plan terms. | Welfare benefits do not vest unless the Plan says so; termination allowed under Plan terms. |
| Whether retroactive amendments to disability benefits are permissible | Retroactive amendment to strip previously awarded disability benefits was improper. | Plan language authorizes retroactive amendments to bring the Plan into compliance. | Plan amendment was not retroactive in the sense of vesting; termination upheld under proper interpretation. |
Key Cases Cited
- Int’l Union, United Auto., etc. v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir.1983) (vest/retroactivity framework for plan amendments and vesting)
- Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.1998) (en banc; vesting framework for welfare benefits)
- Haus v. Bechtel Jacobs Co., LLC, 491 F.3d 557 (6th Cir.2007) (reasonableness of plan administrator’s decision under arbitrary-and-capricious review)
- Davis v. Ky. Fin. Cos. Ret. Plan, 887 F.2d 689 (6th Cir.1989) (scope of arbitrary-and-capricious standard and plan interpretation)
- Robinson v. Sheet Metal Workers’ Nat’l Pension Fund, Plan A, 515 F.3d 93 (2d Cir.2008) (interpretation of plan terms; suitability of reasoned explanation)
- Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771 (7th Cir.2003) (vesting and interpretation of disability benefits; moving target critique)
- Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (Supreme Court 2004) (retroactivity and ERISA amendments; vesting principles)
- Huss v. IBM Medical and Dental Plan, 418 Fed.Appx. 498 (7th Cir.2011) (distinguishing Hackett; plan language at time of award governs)