Knowlton v. Anheuser-Busch Companies Pension Plan
849 F.3d 422
8th Cir.2017Background
- Plaintiffs were salaried participants in the Anheuser‑Busch Companies Pension Plan who worked for Busch Entertainment Corporation (BEC), a member of the plan’s “Controlled Group.”
- InBev’s 2008 transaction produced a plan-defined “Change in Control.” In 2009 Anheuser‑Busch sold BEC; plaintiffs’ employment thereafter continued with the new owner but they were no longer employed by a Controlled Group member.
- Section 19.11(f) of the plan grants an enhanced pension (five additional years of credited service and age for early retirement) to any participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control.”
- Plaintiffs claimed the 2009 sale involuntarily terminated their employment with the Controlled Group and sought enhanced benefits under 29 U.S.C. § 1132(a)(1)(B). The plan administrator denied benefits, interpreting the provision to require an actual break in employment.
- The district court adopted the Sixth Circuit’s decision in Adams, granted judgment on the pleadings for plaintiffs, and ordered the plan to provide enhanced benefits; the court did not compute individual damages. This appeal followed; plaintiffs cross‑appealed the remedy issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section 19.11(f) entitles participants to enhanced benefits when a Controlled Group member is sold and employment continues with the purchaser | Knowlton: the sale terminated plaintiffs’ employment "with the Controlled Group," so 19.11(f) applies | Anheuser‑Busch: “involuntarily terminated” requires an actual break in employment (i.e., being out of work), not merely losing Controlled Group status | Held: Section 19.11(f) is unambiguous and covers termination of employment with the Controlled Group upon sale; plaintiffs win on the merits |
| Appropriate standard of review for plan interpretation | Knowlton: plain‑language interpretation controls; de novo review of the legal question | Anheuser‑Busch: plan grants administrator discretionary authority (Section 14.11); if ambiguous, administrator’s reasonable interpretation should be upheld | Held: even under deferential review, administrator cannot contradict plain plan language; court treated the provision as unambiguous and enforced it |
| Finality of district court’s judgment and appellate jurisdiction | Knowlton: district court’s order directing application of 19.11(f) was final and appealable | Anheuser‑Busch: appealed; plaintiffs moved to dismiss for lack of final order because damages were not calculated | Held: appellate jurisdiction exists; the order resolved the substantive entitlement and was final for purposes of appeal |
| Remedy: whether the district court must calculate individual enhanced benefits now | Knowlton: requested affirmative award, pre‑ and post‑judgment interest, and ability for class members to elect; court must compute amounts or remand to do so | Anheuser‑Busch: district court may order plan to apply 19.11(f) without district court calculating individual awards | Held: reversed in part — district court must reconsider the plaintiffs’ prayer for relief and, to the extent requested and provable, calculate and award benefits (method reviewed de novo; calculations for amounts subject to clear‑error/abuse‑of‑discretion review) |
Key Cases Cited
- Adams v. Anheuser‑Busch Cos., 758 F.3d 743 (6th Cir. 2014) (interpreting identical plan language to require benefit where employment with Controlled Group ended after a sale)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (standard of review for ERISA benefit denials; de novo unless plan grants discretion)
- Admin. Comm. of the Wal‑Mart Stores, Inc. Assocs.’ Health & Welfare Plan v. Gamboa, 479 F.3d 538 (8th Cir. 2007) (an interpretation that conflicts with a plan’s plain language is an abuse of discretion)
- Admin. Comm. of the Wal‑Mart Stores, Inc. Assocs.’ Health & Welfare Plan v. Shank, 500 F.3d 834 (8th Cir. 2007) (enforce plain language of ERISA plans)
- Johnson v. Am. United Life Ins. Co., 716 F.3d 813 (4th Cir. 2013) (ERISA plan terms enforced according to their plain, ordinary meaning)
- Hunger v. AB, 12 F.3d 118 (8th Cir. 1993) (employees continuing same job after sale are nonetheless no longer employed by prior employer for plan purposes)
- Tussey v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014) (method of calculating ERISA damages reviewed de novo; numerical calculations reviewed for clear error)
- Peabody v. Davis, 636 F.3d 368 (7th Cir. 2011) (remedy for successful ERISA benefits action is to award accrued benefits)