Jerry Duncan v. Leonard Muzyn, 885 F.3d 422

Background

TVA funds and the seven-member TVA Retirement System (TVARS or the Plan) administers a defined-benefit pension that includes cost-of-living adjustments (COLAs).
In 2009 the Plan was underfunded; the TVARS Board adopted amendments that temporarily reduced COLAs and raised eligibility ages for COLAs.
Section 13 of the Plan requires at least 30 days’ notice of a proposed amendment to TVA and Plan members and permits TVA to "veto any such proposed amendment" within that 30-day window.
Plaintiffs (Duncan and a class) sued, alleging (1) the Board failed to provide required notice before voting on the 2009 amendments and (2) the Board improperly paid COLAs from the Excess COLA Account rather than the Accumulation Account.
The district court granted summary judgment to TVA and the Board on both claims. On appeal, the Sixth Circuit affirmed on the notice claim, and held the accounting claim must be dismissed for lack of Article III standing (vacating the merits decision and remanding to dismiss for lack of jurisdiction).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Section 13 requires notice before the Board votes to adopt an amendment	Section 13 requires the Board to give 30 days’ notice before voting (so members/TVA can respond)	Notice may be given after the Board votes; TVA then has 30 days to veto an approved amendment	Court: Section 13 is unambiguous — notice after Board approval is permitted; Board gave proper notice (affirmed)
Whether Auer deference or contra proferentem applies to Section 13	Apply contra proferentem to construe ambiguity against the drafter (Plan/Board)	TVARS/TVA urge Auer deference to the agencies’ interpretation of their rules	Court: No Auer/contra proferentem analysis needed because Section 13 is not ambiguous; no deference applied
Whether paying COLAs from the Excess COLA Account violated Plan rules (merits)	Board unlawfully debited the Excess COLA Account (100% of COLAs 2009–2013), depleting a fund intended to secure future COLAs	Board acted within its discretion; accounting did not reduce any member’s vested benefit	Court: Did not reach merits — plaintiffs lack Article III standing to pursue the accounting claim; dismiss for lack of jurisdiction (vacated merits ruling)
Whether plaintiffs have Article III standing for the accounting claim	Depletion of the Excess COLA Account is a concrete, particularized injury and increases risk of default on COLAs; trust-law principles support standing	Alleged injury is a bare procedural or accounting violation, neither concrete nor particularized; any harm is speculative and contingent on plan insolvency and TVA inaction	Court: No injury-in-fact — the claim is a bare procedural grievance and speculative; plaintiffs lack standing (dismissed)

Key Cases Cited

Duncan v. Muzyn, 833 F.3d 567 (6th Cir. 2016) (prior appeal addressing TVARS–TVA relationship and applicability of ERISA analogies)
West v. AK Steel Corp., 484 F.3d 395 (6th Cir. 2007) (definition/characteristics of defined-benefit plans)
Richmond v. Huq, 879 F.3d 178 (6th Cir. 2018) (standard of review for summary judgment)
Auer v. Robbins, 519 U.S. 452 (1997) (deference to an agency’s interpretation of its own regulation)
Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III standing: injury must be concrete and particularized)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (three constitutional standing elements)
Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999) (plan members’ rights in defined-benefit plans relate to defined benefits, not particular plan assets)
LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (2008) (misconduct affects entitlement only if it creates or enhances the risk of default by the entire plan)
Soehnlen v. Fleet Owners Ins. Fund, 844 F.3d 576 (6th Cir. 2016) (standing limits for ERISA-governed welfare plans; speculative harms insufficient)
Lee v. Verizon Commc’ns, Inc., 837 F.3d 523 (5th Cir. 2016) (no standing absent imminent risk of plan default)
David v. Alphin, 704 F.3d 327 (4th Cir. 2013) (skepticism toward trust-law standing theories in ERISA context)
Scanlan v. Eisenberg, 669 F.3d 838 (7th Cir. 2012) (discretionary trust beneficiaries may sue to protect corpus; trust-law standing)