Hunt v. Hawthorne Associates, Inc.

AND INVOLVES SOIL UP CONTAMINA-

GROUNDWATER YET DAM- HAS NOT

TION WHICH SOIL

AGED SURROUNDING GROUNDWATER?

AND/OR questions is intended

Our statement meant restrict guide

as a and is Georgia. Supreme Court of

inquiry of the in the certi- particular phrasing used Supreme not to restrict the question

fied in- problems

Court’s consideration Supreme as the and the issues

volved analysis perceives to be in its them

Court This this case.

of the record certified Supreme Court’s

latitude extends issue or issues and

restatement of the are to be

manner which the answers comprehensive whole

given, as a whether contingent parts. or even subordinate 156, 159n. 6 v. 394 F.2d Rodriquez,

Martinez Cir.1968). (5th clerk of court shall certificate, the briefs as well as

transmit court, Su and record filed addition, the Georgia.

preme Court of copies of the certificate

clerk shall transmit parties. attorneys for the

QUESTIONS CERTIFIED.

Harry HUNT, Plaintiff-Appellee, L.

Cross-Appellant,

v. ASSOCIATES,

HAWTHORNE

INC., Defendant, Retire

Eastern Air Lines Variable Benefit Pilots; Administra

ment Trust Airlines

tive Committee of Retirement Plan for

Variable Benefit

Pilots, Defendants-Appellants, Cross-

Appellees.

No. 95-2078. Appeals,

United States Court

Eleventh Circuit.

Aug. Penson, Martin,

Mary E. Albert C. Talla- hassee, FL, Defendants-Appellants, Cross-Appellees. COX,

Before Circuit TJOFLAT CLARK, Judges, Judge. Senior Circuit TJOFLAT, Judge: Circuit Harry L. is a Eastern Air Hunt retired (“Eastern”) pilot seeking Lines recover lump-sum East- retirement benefit under the Air ern Lines Variable Benefit Retirement (the “Plan”).1 Eastern, Pilots administrator, Plan’s which is debtor before Bankruptcy Court for the Southern Dis- York, pay has trict New refused amended, because the has been benefit court, bankruptcy approval lump-sum Hunt foreclose the benefit seeks. stands, As the Plan now Hunt is entitled to lump-sum receive a modified benefit: he partial receive a distribution immediate- ly payments over time subsequent as liquidated. Plan’s assets are rejected lump-sum Hunt ben- modified efit, payment options provid- as well as other Eastern; ed under the sued (“ALPA”), Air Line Pilots Association union; pilots’ Copeland, H. Charles of the Trust Administrative Com- Chairman (the “TAC”), the named mittee Plan’s fiducia- O’Connor, Jr., O’Connor, Paul ry; M. Mor- (the Jones, legal TAC’s ris & counsel firm”); Hawthorne Asso- “O’Connor law ciates, (“Hawthorne”), Inc. princi- the TAC’s advisor, pal recover his retire- investment brought ment benefit sum. Hunt Employee In- his suit under the Retirement (“ERISA”), Security come Act of 1974 Pub.L. 93-406, §§ No. 88 Stat. 1001- (1994). complaint, His framed in six counts, punitive compensatory and asked for damages, injunctive relief in the form of an Pelzer, Ronkin, requiring John H. Shari J. Ft. Laud- order defendants erdale, benefit, FL, Plaintiff-Appellee, penalties, Cross-Ap- statutory attorneys’ pellant. fees. originating

1. The document refers to the name "Plan." Plan's simplicity, the "B-PIan.” we use the For Trustee, Bankruptcy in a motion Eastern’s therefore consider interrelationship be- summary judgment, contended that East- tween the Plan bankruptcy and Eastern’s ern could not be held liable to Hunt because order evaluate Hunt’s claims for relief. properly discharged responsibilities had Later, under the Plan. when administrator A. opposing Hunt’s motion for leave to file an complaint, argued amended a “comprehensive ERISA is and reticulat Hunt’s claim benefit had ed statute” created a framework for the by bankruptcy ruling been foreclosed court private administration and maintenance of in Eastern’s case. employee plans. Corp. Nachman v. apparent attempt In an to avoid effect of Guaranty Corp., Pension 446 U.S. Benefit ruling, voluntarily dismissed East- 359, 361, 100 S.Ct. 64 L.Ed.2d 354 and, prejudice ern from with with the case (1980). The plan cornerstone an ERISA court, complaint leave of filed an amended instrument, is written which pro must Hawthorne, against three defendants — responsibilities “the vide for allocation of TAC, essentially and the Plan' —that asserted operation and administration of the in presented the same claims his initial com- plan.” 402(b)(2), § ERISA 29 U.S.C. plaint. 1102(b)(2); 402(a)(1), § § see ERISA also 29 court; by The to the ease was tried district 1102(a)(1) § (“Every employee U.S.C. benefit time, defendants before the plan shall be pur established and maintained court and were the TAC the Plan. Without instrument.”). a suant written referring ruling court’s Hunt, court held that he was The written desig instrument must entitled to his benefit and entered “administrator,” nate ERISA judgment of that for Hunt the amount 3(16)(A)(i), 1002(16)(A)(i), § § 29 U.S.C. “to judgment benefit. The the bene- stated that plan run the with accordance the ... fit was to be satisfied out of the Plan’s fund plan governing Curtiss-Wright documents.” rejected of assets. The court remain- Corp. Schoonejongen, 84-86, v. 514 U.S. ing judgment claims and entered for the (1995); 115 S.Ct. 131 L.Ed.2d 94 defendants. —Howe, Varity U.S. -, Corp. see also v. appeal. the Plan now TAC and -, 116 S.Ct. 134 L.Ed.2d 130 cross-appeals rejection court’s of his (1996) (“Essentially, plan to administer the is claim a requesting impose the court to statu- implement provisions carry and to out tory penalty on the defendants. We reverse [ERISA].”) (Thom plan imposed by duties judgment against court’s the TAC and as, instances, J., dissenting). In some Plan, judgment and affirm its on the imposes obligations specific ERISA on the statutory-penalty claim. See, plan e.g., administrator. ERISA 1021(b) 101(b), § (duty § 29 U.S.C. to file

I. plan description, changes, modifications and Labor); reports Department and that, Hunt claims and the ERISA 1025(a) 105(a), § § (duty 29 ERISA U.S.C. Plan, provisions of the he is to recov- entitled plan participants with information er his retirement benefits a sum. benefits). regarding their typical partici- Unlike scenario which a pant employee plan in an sues to The written instrument must also benefits, sought recover ERISA “provide for one or more named fiduciaries lump-sum payment while the administrator jointly severally who shall Eastern, Plan, undergoing high- operation manage to control and and ly publicized bankruptcy proceeding that ulti- plan.” administration ERISA mately company’s in the resulted demise. 1102(a)(1). 402(a)(1), § § scrutinizing pro- addition to U.S.C. The ad ERISA and ministrator, operation visions fiduciary, and we must as well named is as the plan.”5 “fiduciary” under ERISA.2 is a “defined contribution considered 414(i), According § the named fidu- to 26 U.S.C. defined Both the administrator “in ciary discharge provides their duties accor- plan “plan contribution is [that] must documents instruments dance with the account for each individual as such documents plan insofar governing solely and for benefits based amount consistent with are account, instruments participant’s contributed to the 404(a)(1)(D), [ERISA],” § ERISA income, losses, any expenses, gains and 1104(a)(1)(D), purpose “for exclusive partici- of accounts of other forfeitures their benefits to providing pants partici- be allocated to such 404(a)(1)(A), beneficiaries,” ERISA pant’s simply, account.” More the words 1104(a)(1)(A). Because both pi- an ALPA newsletter sent to Eastern fiduciary must named plan administrator lots, participant’s in a con- interest defined accordance with discharge their duties in solely con- tribution “determined instrument, provi- we examine the written beneficiary’s in a tributions made name and Plan in detail.3 sions of the subsequent performance investment requires

those contributions.” The behalf Eastern make contributions on of each B. (“Eastern participant, § 4.1 see Contribu- tions”),6 stocks, bonds, for investment in real pension plan The is a variable benefit Plan estate, and assets. other These investments in 1958 pilots that was created for Eastern (the constitute the Plan’s “Variable Fund” bargaining agree- pursuant to a collective “Fund”). (“Variable Fund”).7 §See 1.36 As par- and ALPA. The ment between Eastern result, participant’s of a the value interest comply the 1970s to ties the Plan in rewrote depends only upon in not subsequently the funds with and amended ERISA on re- contributed but also the investment 1986.4 meaning "fiduciary" a broader 1986 is as 2. The has The amendment known "Document term than at common law because 91A." under ERISA 'fiduciary' not terms of formal ERISA "defines trusteeship, terms of control but functional Plan, 5. Section 12.14 of the titled “Plan Is De- authority plan.” and over the Mertens v. Hewitt Plan," [the fined Contribution states: "Since 2071, 248, 262, 2063, Assocs., U.S. 113 S.Ct. 508 inception], Plan’s the Plan has been and contin- (1993). 161 Under ERISA 124 L.Ed.2d plan.” ues to be a defined contribution This 1002(21)(A), 3(21)(A), fiduciary § § 91C, appears in an amend- section Document any who dis- "exercise[] those includes ment the Plan will be discussed in cretionary discretionary control re- or 1.D, infra. management specting exercise[] of such or management any authority respecting or control original agreement, According 6. to the Eastern assets,” disposition of its but those who also each contribute behalf of discretionary authority discretionary "[have] compensation. equal an amount of his 11% responsibility the administration of such February signed On and ALPA Eastern plan.” Supreme Court has referred to The bargaining agreement adjusted a collective fiduciary definition of as "artificial.” ERISA's (1) ways: Eastern’s contribution level in two 5, Mertens, U.S. at 255 n. 113 S.Ct. at 2068 508 employed pilots before March Eastern’s n. 5. January contribution was set at effective 10% 1988; (2) pilots employed on or after March importance written the seminal of the Given was set Eastern’s contribution at 3%. ERISA, why puzzled we are instrument addition, participants option of had the contrib- parties passing more than a refer- made little uting up earnings "optional of their to 10% ence in their and at to the Plan documents briefs augment inter- additional contributions” to their argument. oral ("Optional § 4.2 est in Plan. See Additional ”). Contributions clarity, spe- simplicity and we For refer directly provisions citing cific of the Plan 1.36, property § "the According to the Fund is in- the relevant section or subsection. stances, In some Plan, held trust ... all which is the title of section or subsection pursuant Agreement [TAC] between the parenthetically. to Trust noted Company ... and State Bank and Trust Street purpose by original 4. The trust created for such written instrument that estab- and [TAC].” lished the Plan is known as "Document 91.” however, turn the Fund’s assets. See Borst v. would not constitute an amend- (5th ment to the Plan.8 Corp., 36 F.3d 1311 n. Chevron denied, Cir.1994), cert. 514 U.S. TAC, designates The Plan a small com- (1995). 1699, 131 L.Ed.2d 561 S.Ct. mittee that monitors management annually the Fund is calculated as of value of assets,9 fiduciary.” Plan’s as its “named Un- year. 31 of each calendar December der superviso- has TAC “overall (“Fund Value”). § 5.1 ry responsibility of the administrative func- Fund,” 2.13(b)© (“Fund § tions of the see “plan designates Eastern as Administration”), duty and “to maintain powers Eastern has “those administrator.” surveillance over the status and administra- necessary day carry day oper- out [Fund],” tion of the Plan and the see (“Adminis- 2.2(a) § ation of the Plan.” See 10.2(b) [TAC]”). (“Rights Duties and tration”). powers Those include broad It “regularly must periodically suppl[y]” and responsibility “initially all determine to ALPA about information “transactional administration, questions arising from the detail, reports, status, flow cash investment interpretation, of the Plan performance,” documentation and Fund see law, agreements applicable to all (“Information § 2.11 Accountability”), and contracts and such determination shall furnish ALPA and Plan upon persons, except binding as oth- reports “functions, actions, about the TAC’s law, provid- provided by erwise and further decisions as are ap- reasonable and Participant granted each shall be ed that 10.2(c). propriate.” Furthermore, §See the same treatment under similar condi- charged TAC is the responsibility Id. also charges tions.” The Plan selecting replacing investment advisors alia, for, responsibility assets, keep- inter trustees the Fund’s see 2.7(b) (“Trust (“Records”), Trustee”), records, Agreement ing preparing see 2.4 well giving as directions and instructions to summaries, distributing periodic Plan (“Directions trustees, § these see 2.8 (“Plan to Summary”), § sending see 2.5 to Trustee(s)”). selecting replacing Before participant each an annual statement re- trustees, however, investment advisors or the the flecting value of his investment the notify TAC must ALPA of the TAC’s Statement”). (“Annual Plan, § see 2.6 Sec- planned give course of action and ALPA an XIII, of tion 13.1 Article which is titled 2.7(b), opportunity respond, § to see thus “Modification, Suspension or Discontinu- effectively giving quasi-veto power a ALPA ance,” authority grants the uni- Eastern to Similarly, giv- over these decisions. before laterally modify, suspend, any or discontinue ing any notice or instruction to a Fund trust- Plan, provided any of feature the ee, notify give the TAC must ALPA and “adversely any action not does affect” bene- § days object. fifteen See 2.8. “already provided” fits to a un- Plan. authority, der the An exercise of this Pursuant to its sections under explicitly present controversy, 8. do the The Plan documents describe involved in the Plan had formally how the Plan be amended. The been amended to two members 14.1, ALPA, § provision by closest is states that which selected were to be and five outside any agree upon by and ALPA appointed existing Eastern must modifi- members would be the TAC necessary qualify cation for the as approval. members ALPA's TAC's outside (“Qual- pension plan § ERISA. 14.1 See members at this time included former President Plan”). clear, Ford; of The ification record makes president Citicorp, Gerald R. former of however, ap- that both Eastern and ALPA must Spencer; William I. a former chairman of the prove substantive amendment Metropolitan Company, board of Life Insurance exception pur- an Jenkins; with the amendment made George a former dean of the P. 1113(e) Code, § Bankruptcy School, suant Harvard Business Lawrence E. Fourak- 1113(e) (1994). § See note 20. er. infra compensation initially TAC 9. The consisted of two members The the outside mem- TAC ALPA, Fund, 2.2(b)(iii), by by paid § selected members bers is see where- two selected East- ern, compensation three chosen as the TAC "outside" members members ALPA, 10.1(b)(ii). By § paid ALPA and Eastern. time of events ALPA is see 2.13(d),10 lump-sum payment seeking complete would the TAC hired Hawthorne 2.7 and necessary paperwork investment advis- and inform the principal Plan’s Pilot, period relevant or/manager management employ- for the time Chief Eastern ee, Second, duties are enumerat- Hawthorne’s case. of his intention retire. agree- “investment advisor ed in a written Chief Pilot would check make sure that TAC Hawthorne. ment” between pilot age qualify met criteria to for nor- testimony of Hawthorne’s According to the early mal retirement benefits under the Dyer, chairman, Hawthorne as- G. Charles Third, if pilot age qualifi- met the Plan.13 many of TAC’s administrative sumed cations, the Chief Pilot would inform the assets, Fund involving the duties Department Pension and Insurance scheduling meetings of TAC including the Fourth, pilot’s about decision retire. quarterly statements release of Depart- the Eastern Pension and Insurance the value of the Fund’s participants about actuary, contact the ment would Plan’s Wil- essence, Hawthorne served “at assets. Mercer, Inc., liam which M. would determine pleasure of [TAC].” precise amount of benefits to which the Fifth, pilot actuary retiring was entitled. C. give would then that information to State pilot inception, an Eastern Since Plan’s Company, Bank & Trust a Plan trust- Street early could choosing normal or retirement ee, would make the distribution to in the form of elect to receive his benefits pilot. lump-sum annuity payments.11 Beginning in monthly equal present to the entire actuarial value14 re- retiring pilot also could elect to pilot’s his accrued benefit15 form a ceive in the his benefits 6.2(e)© See date.16 effective retirement payment. A (“Lump Option”). pilot Sum dissatisfied disposition application Processing for a First, steps.12 pilot pursue benefits could administrative involved five relief 2.13(d), "may directing entry According judgment, §to the TAC dele- order relied ex- to, including, clusively given gate any person, on the account in the White affi- but not limited Advisors, any portion all or davit. Investment powers, responsibilities duties and to es- [TAC’s] Office, a Fund to maintain tablish and maintain age Normal retirement under the is 60. reports prepare and to and documenta- records (“Normal Age”). 1.22 Retirement delegations make such [TAC] tion. The shall early age minimum retirement is 50. See 1.15 fees, writing and is authorized reasonable Date”). ("Early Retirement person persons pro- charges and the or costs of viding delegation This of such service.” authori- present 14. “Actuarial value” the current value is ty with ERISA. See ERISA is consistent monthly of the benefits determined current 1102(c)(3). 402(c)(3), § § annuity at the recent value of unit most valua- Value”). ("Actuarial § 1.6 tion. See Present provided participants panoply a 11. with The Plan annuity options. Retiring pilots selecting of essentially “accrued is An benefit” total 15. post-retirement annuity from could choose "annuity ac- number of units” credited annuity, joint contingent survivor annui- ("Accrued § participant. of a See Ben- count efit”). 1.2 ty, option, op- annuity life the level income annuity An unit a unit of measure tion, § option. See 6.2 the deferred ("An- representing § a 1.7 share in the Fund. See ("Available Payment”). There also was Forms of Unit”). nuity ("Disability disability option. § a 6.3 See Benefit”). essentially date” "Effective retirement means 16. early explicitly pro- date set forth the the normal retirement retirement The Plan does not ("Effective Date”). processing claims bene- date. See 1.18 cedure for for retirement Retirement day claims-processing date above The normal retirement is the first fits. The account coinciding procedure deposition and affi- month with or otherwise next follow- is taken from participant's birthday. ing ("Normal 60th See Dyer and from the 1.23 davit of Charles of Hawthorne White, Date”). early Retirement retire- P. who served as Di- affidavit Brian day of on Insurance De- ment date is the first the month which rector of the Pension and Eastern pen- partment. to retire and receive a Eastern's claims- elects Both accounts of sion, years procedure virtually provided is at old. processing identical. Af- that he least 50 are 1.15(a) Date”). trial, court, ("Early fashioning ter its Retirement district Dispute pursuant to authorizing Pension Board court’s order this amendment. ) (“Determination Disputes XI Article The record does inform us of the district disposition appeal. Plan.17 court’s After Chapter filing, Eastern’s D. Fund increasingly illiquid became due to 1980s, experienc- In the late Eastern was First, three factors. because Eastern had financial difficulties ing severe suspended eventually making ceased backdrop publicized labor highly dispute. contributions to the sole Fund’s 9, 1989, On March Eastern filed for bank- source of cash was the return on invest- its protection Chapter 11 ruptcy Second, portion ments. a substantial Code, 1101-1174, Bankruptcy §§ estate, Fund’s assets were invested in real Bankruptcy for the Southern Dis- Court depressed in value a na- due to 20, 1990, trict of New York. On March East- Third, tionwide real estate recession. signed ern and ALPA an interim letter of lump-sum option receiving benefits had 2, 1990, agreement, fixing effective March increasingly popular retiring pi- become to the Plan Eastern’s contribution fact, lots. the annual amount distributed pilots compensation.18 April at 3% of On payments steadily had risen R. bankruptcy court named Martin $52,000,000 $200,- 1986 to more than Shugrue Bankruptcy Trustee of Eastern 000,000in 1990. Trustee”). (the “Bankruptcy Bankrupt- 18, 1991, January On Eastern shut down cy compa- began liquidating Trustee certain operations, effectively its retiring approx- ny attempt reorganize in an assets East- 2,500 imately pilots employ in its at the time. ern a smaller carrier.19 day, The same O’Connor of the law O’Connor 11, 1990, September Bankruptcy On firm, TAC, which served as counsel to the 1113(e) Trustee, proceeding under section White, contacted Brian P. Director East- Code, Bankruptcy applied to the bank- Department, ern’s Pension and Insurance order, ruptcy court for an which the court and told White the TAC “recommended” entered, approving an amendment place temporary that Eastern moratorium order, re- Plan.20 Pursuant White, lump-sum payments. response, Plan to duced contribution 0% said that Eastern lacked the August compensation by pilots earned after 19, 1991, impose January a moratorium. On provided resumption itsof O’Connor confirmed the recommendation compensation contribution of 3% for such letter, ALPA, copy of which he sent also after June This amendment TAC, and Hawthorne. suspended Dispute pow- the Pension Board’s 11,1991. August object- January according ers ALPA de- effective On Bankruptcy position testimony ed to the Trustee’s action and of former President Ger- Ford, appealed unanimously R. the district court ald the TAC voted Dispute perform responsibilities 17. The Pension Board consisted of four and continued to its un- by selected two members: two were Eastern and supervision Bankruptcy the der Trustee. were selected ALPA. The Board had au- the thority disputes "[a]ll hear and determine con- 1113(e) Code, Bankruptcy 20.Section cerning application, interpretation the or admin- 1113(e), bankruptcy states the that respect istration of the Plan in individual court, hearing, may “after and a notice authorize employees participation their and their in or implement changes in the the trustee to interim ("Authority [of benefits under the Plan.” 11.2 conditions, benefits, terms, wages, or work rules Board]”). Dispute Pension provided by bargaining agreement." a collective 2, court authorize mea- employed pilots 18. For Eastern before March they "during period occur a when sures if contributing Eastern had been 10% compensation January supra bargaining agreement 1988. the collective since See continues effect,” note [such are] and measures “if essential business, or the continuation of the debtor's 19. The record indicates that the Eastern Pension irreparable damage order to avoid to the estate." Department and Insurance retained its that, stated after Eastern’s shut- temporary moratorium.21 White impose the how TAC disclose the not and of the morato- record does down the commencement moratorium. implement the planned rium, procedure processing the claims for the the same benefits under Plan remained 28, 1991, O’Connor, represen- January On (1) except changes: retiring pilot for two the their re- and Eastern and tatives of ALPA Pension Insur- would contact Eastern’s and to discuss the need attorneys,22 met spective lump- Department directly go moratorium on rather than temporary a ance place (2) Pilot; The record does not disclose payments. through Eastern’s the Chief parties meeting the discussed whether at Department would Pension and Insurance gives Eastern XIII of the Article actuary participant inform the a had whether “modify, suspend ... or discon- power the applied following the for benefits shutdown. the [of Plan].” feature tinu[e] applied If the had after the shut- down, 1, 1991, a benefit issued a bank would not issue February TAC On [TAC Action of check. “Certifícate upon Unanimous Written Con- Taken

Plan] May On the TAC mailed a letter document, the stated In this TAC sent.” videotape participants a to all Plan [Plan], it, has fiduciary “as named videotape were beneficiaries. The letter and does, to, hereby impose tempo- decided parties designed to inform these about rary upon of bene- moratorium plans of the Plan and current status its pilots who re- all shall file fits to Eastern “present light liquidity the future in the close of business quests for benefits after is, confronting issues [Plan]” 18,1991.”23 This Certificate also January —that Plan state after Eastern’s shutdown “notify [Eastern] instructed O’Connor to Eastern, bankruptcy. request as [Plan] the [TAC’s] Administrator, notify promptly Eastern Bankruptcy Trustee On June requests file pilots shall who ALPA Plan letter of modified the January of business on after close agreement.25 agreement This modified notice, 1991, that, temporary until further First, significant ways. three placed been effect [the moratorium has provided periodic-payment option for a request, TAC’s East- Pursuant TAC].” their re- enabled receive of the moratorium to all of ern mailed notice substantially equal tirement February 1991.24 In this pilots (or monthly payments that were for life made notice, pilots “[ques- Eastern advised (“Periodic expectancy). Pay- life 6.11 temporary regarding tions moratorium ments”). payments exempt These at one of [TAC]” should be addressed to the (1) ear- TAC, from 10% additional tax assessed on care of following addresses: (2) firm; TAC, ly qualified distributions retirement law care the O’Connor XV) (Article Second, plans.26 article of Hawthorne. new Ford, signed by deposition, addressed In his former President the TAC and to all pilots. TAC at the time the moratorium member of the imposed, supra "[the stated that was see note impose unani- moratorium] decision to agreement 25. This is known "Document Jenkins, Spencer, Mr. Mr. mous between Mr. Fouraker, 91B.” members, myself.” [ALPA] "periodic payment” option, par- 26. Under the 22. The does indicate whether the record ticipant pres- could elect receive actuarial represented, Bankruptcy present, or Trustee was ent value of his accrued benefit in the form of meeting. at the monthly payments periodic as described in I.R.C. 72(t)(2)(A)(iv) 72(t)(2)(A)(iv), § § 26 U.S.C. participants 23. did not affect The moratorium (1994); option, the under this benefit amount already receiving who were annuities or who had receipt. was as of date of Partic- determined the lump-sum a bene- submitted their for ipants receiving annuity who were or had 18, January fit the close of business on 1991. outstanding balance a loan from the Fund (1) eligible option. periodic- mailing were not If the 24. This consisted of two documents: this stationery; printed payment arrangement or al- was discontinued a brief cover letter on Eastern (2) years two-page the tered after it started or before a notice about moratorium within five participants to all participants was added order to enable to the describe modi- during loans from the Plan this lump-sum option take out time fied explain why and to uncertainty.27 of financial The amendment imposed: moratorium had been provided that would as admin- the TAC serve lump option The in the [Plan] has provisions; Eastern, istrator for these two been modified Document 91-C to ad- however, retained its administrative authori- reality dress the has [Plan] a ty provisions other of Plan. See high substantial amount quality illiquid of 6.11(f), Third, §§ 15.1. the Plan was amend- liquidated assets that cannot be quickly provide ed to that the value of benefits dis- suffering without a substantial discount in was to tributed from the Plan be determined quick order to achieve a sale. The [Plan] Thus, at the time distribution. value does not have sufficient cash and other participant’s lump-sum of a benefit would no liquid eligible assets to allow longer as of be determined the effective re- take their sum cash. This is 6.2(e)(i). § tirement date. See imposition what caused the of the morato- 27, 1992, July pending approval On rium January 1991. court, Bankruptcy Trustee 1,1992, On Bankruptcy October Trust- agreement a and ALPA entered into letter of joint ee and ALPA filed a motion in the 91C, again. once as Document Referred Bankruptcy Court for the Southern District proposed make two amendment would seeking approval New York amend- First, changes fundamental the Plan. provided by ment Document On 91C. No- portion Fund be into liquid divided a vember bonds) bankruptcy court (i.e., cash, stocks, marketable granted approved their motion and (i.e., estate, portion an illiquid real alterna- amendment investments, effectively ending working capital). tive Each operative the moratorium. The date participant percentage would have a 30, 91C Document amendment liquid illiquid was June por- interest in both the 1992. tions of the Fund than rather an interest in Second, as a Fund whole.

option partial was a modified II. is, pay- distribution —that an immediate cash liquid equal portion ment of each A. eligible participant’s participant account. A selecting option also would receive ex- Harry pilot Hunt worked as for Eastern payments tended over time as real estate for twenty-four years. He elected retire illiquid and other assets sold. were The 1,1991, effective March that he demands lump-sum option modified had become feasi- paid be benefit for the value of ble changes because recent favorable his interest the Plan as of that date.29 On partial the tax code distributions.28 February Eastern’s Pension and 1992, August Department applica-

On to its duties Insurance received his 10.2(c), benefits, signed by section TAC sent a letter tion for was 59.5, participant age § reached whichever was accrued benefit at the time of loan. 15.4 See later, ("Plan Loans”). participant's subsequent election an- trigger form benefit from Plan would penalty normally tax January partial 10% associated with Effective distributions distributions, premature unless the qualified pension plan from could rolled separating was older 55 or when from Eastern. over into an individual retirement account triggered, penalty (“IRA”) If the tax was would be consequences. tax without adverse See applied retroactively previously 402(c)(4) (1993). those amounts Before this withdrawn. See partial 6.11. change, participant could not roll over significant distribution into an IRA without tax 402(a)(5)(D) (1991). liability. 27.Participants periodic- who were annuitants payment recipients eligible were receive parties agree loans loan Plan. maximum that the value of Hunt’s $50,000 could be made was lesser of accrued benefit in the Fund of March 25% $352,748.74. present participant's value the actuarial 22, 1991, attorneys employed whom 5, April the first of three Hunt February 1991. On on controversy,33 in this he wrote to O’Connor Pension Administra- manager of Eastern’s Boles,30 approved request most statement Department, Ms. S.W. order to current tion payment and authorized the most financial of his account and recent to instruction Eastern’s “showing Given for the Plan assets [its] his benefits.31 statement to actuary apply 15, 1991, moratorium July through that it a and liabilities.” On January after applications submitted those attorney, wrote letter to second he another 1991, Trust 18, Bank and the State Street letter, he re- Dyer of Hawthorne. Although to Hunt. made never position “the quested a statement of TAC’s lump- eligible receive modified Hunt is to application,” copies of all amendments on his payments in accor- future benefit and sum benefits, explana- affecting the Plan his to amendment, the Document with 91C dance deny application, if to tion the TAC were his option. In addi- refused to elect he has address, name, forms neces- and the tion, periodic-pay- not select Hunt did Dispute sary file a claim with the Pension to he take out a loan option nor did ment to if the TAC decided not his Board the Plan. copy of lump sum. Hunt also sent a Fi- TAC. letter to the then-chairman of the appli- progress his with the Dissatisfied 19, 1991, attorney nally, August same letters, cation, four the first dispatched Hunt to re- on Hunt’s behalf to O’Connor through two wrote and the other three by himself copies to alleges quest these of the “amendments attorneys. He different Plan,” explanation of whether TAC to the instructions were sent letters [Plan],” right amend and a February “had the letter in Eastern’s 1991, applica- disclosing Hunt March statement number pilots. On Dyer, lump-sum benefits filed since Janu- the chairman tions wrote to Charles G. complains Hawthorne, ary 1991.34 Hunt that none of about of his inquire the status 20, 1991, through the letters were answered. March his pension.32 On money, go relationship factory I to me. If I want to borrow not disclose the 30. The record does money, De- Eastern's Pension Insurance a bank. Banks lend and retirement between partment Pension Administration Eastern's were retirement funds established us, Department. the facts we as- Given before participants. to their If the various department out the carried they apply sume that latter need cash then should members department. policies bank, and directives former money!” lend —banks lump application requested that his Hunt's 31. lawyer employed The first whom wrote Hunt his IRA at Dean Witter be rolled over into sum Reynolds, lawyer 1991. The second the letter March Inc. distribution If August July letters wrote eligible retire- an IRA or other rolled over into lawyer text above. third described days, pay- ment within brought employed law suit the instant gross income for would not be included ment prosecuted and on this it in district court year paid. which I.R.C. taxable the § appeal; lawyer firm him in his assisted with 402(a)(5), 402(a)(5) (1991). appeal. expressed extreme In this his letter. response August purport- to a 34. On Hawthorne, moratorium, dissatisfaction “request” by Congressman, Hunt sent a ed (1) among things: TAC. and the He stated Stephen Mayle Office of letter to Mr. just proposed that the "I have been informed Information, Filings, Services and Consumer extensive.” IS COM- could be THIS moratorium Exchange United States Securities and Com- (emphasis in PLETELY UNSATISFACTORY! made, alia, following inter mission. He (2) administering original) is "[Hawthorne] (1) Dyer Haw- [of "I believe Mr. statements: already place. It that is funded and in [TAC], packed thorne] is appear delays 'stalling are tactics' [Representatives, trying prevent are [ALPA] financially injure participants who were [those] by arbitrarily modifying payouts these (3) January working proposal that 18.” "The prevent agreements so the retirement changes provi- adopt will or amend the [TAC] moving to other fund retiree from his account after had ceased [Plan] [Eastern] sions of managers programs of retirement their IRA The Plan is ridiculous. was established business (2) request your expeditious assis- choice.” "I Air- long and funded before demise (4) Dyer's investigating as the offering partial tance in Mr. activities possibility of line.” "The Manager in violation completely to determine if he is payments or unsatis- Fund '[Plan] loans’

899 B. paid administrator not had his benefit because moratorium had been 21, 1992, February Hunt com- filed a On placed payment on the of bene- plaint District in the United States Court fits; against District of Florida Northern the “moratorium resulted from resolutions Eastern, ALPA, Haw- following parties: ALPA”; rendered and thorne, Copeland H. as chairman of Charles he retained counsel order to obtain his TAC, partner agent and O’Connor as and lump-sum benefit.36 complaint for the law firm. The O’Connor complaint, I Count of the titled “Failure to “shotgun” typical pleading.35 was a With Information,” alleged Provide that the defen- I, exception Count gener- of Hunt made respond days dants’ failure “to within 30 “ERISA,” failing al indicate references repeated requests written made Hunt provision of the statute served as his since March as required 29 basis for relief. 1132(c)(1)(B),” rendered defen- complaint The contained six counts or up dants “liable to Hunt an amount incorporated Each alle- causes of action. per day from the date $100 of this failure to factual, gations, mostly out in first set 1132(c)(1)(B).” respond to [section] twenty-four paragraphs complaint. Accordingly, requested “judgment Hunt essentially made paragraphs, those applicable for the penalty Defendants allegations: following damages, and ... such further relief as the appropriate court deems prejudg- and ... Plan; he was a in the interest, ment costs and reasonable attor- 5,1991, February on he mailed to the Plan neys’ fees.” (Eastern’s) administrator’s Pension and II, Rights Count titled “Action to Enforce Department a Retire- Insurance “Notice of [Plan],” alleged proper- that Hunt had Status, electing payout ment ly request submitted his for a ben- [Plan], of his benefits under the effective efit; benefit; that he was entitled and 1, early on his retirement date of March that the “Defendants have failed to 1991”; direct of said benefits and have 15, he inquired Hawthorne on March disposition failed 3, 1991, 1991, 7, May May 1991 Accordingly, claim.” asked court lump-sum pay- when his he would receive requiring to “enter an order Defendants to benefit; ment for his accrued pay Hunt his benefits and award him interest, replied paid prejudgment Hawthorne that he would be costs and reasonable 30, 1991; attorneys’ between June and June fees.” Security complaint, Exchange nothing Commission Rules re- which amounted to more lating managers request original complaint. to investment fund than rehash of the your your prompt reply findings regarding denied court his motion with leave to file an complaint matter." amended that did suffer "some the same infirmities contained in his See, e.g., City Ebrahimi v. Huntsville Bd. complaint.” attorney original Hunt's thereafter Educ., (11th 1997); F.3d Cir. 114 164 complaint, filed amended but it constituted no Trustees, Anderson v. District Bd. 77 F.3d improvement original pleading. over his Unfor- such, (11th Cir.1996). complaint 366-67 As tunately, striking rather than amended com- precision clarity record, not the model of neces plaint accepted from the it. court As sary respon result, to enable the defendants to frame a ambiguous Hunt’s claims remained pleading. sive court inconsistent, district properly the issues were not rights pleading delineated, been within its had it stricken the yielded and the trial the erroneous required repleader. on its own initiative and today. we set decision aside Ebrahimi, 165; Anderson, F.3d 114 at 77 F.3d at Church, 5; Edgewood Baptist alleged 367 v. [Haw- n. Cesnik 88 36. Hunt also that he "relied denied, (11th Cir.1996), representations F.3d n. thorne’s] [that 13 cert. he would receive U.S. -, 117 S.Ct. 136 L.Ed.2d June 15 and 1991] his between — (1997). infra, establishing As we relate the court subse terms of the Plan in his quently attorney following took such when retirement action Hunt's business activities moved [from Eastern].” the court for leave file amended he Fiduciary represented to Hunt that “Breach “Defendants III, titled Count vested, fully fully that the was part: [Plan] was pertinent Duty,” alleged in funded, paid and his benefits would be that under were fiduciaries the defendants 30,1991”; June before ERISA; “Hunt relied on the terms of the [Plan] duty not to interfere with “ALPA has a representation of Defendants and on interest”; Hunt’s determining and in his retirement date con- Hunt’s account [Plan] value “[t]he establishing financial business and his re- to since his effective tinues decrease retirement”; upon and affairs date”; tirement deny estopped to should be “Defendants “willfully wantonly and defendants process payment to payment and to refuse fiduciary by Hunt duty to their breached to Hunt.” benefit], by failing pay to [his for requests to failing respond Hunt’s Accordingly, “judgment demanded information, Hunt’s by interfering with jr jointly severally and f against Defendants benefit], by failing to and rights [his [Plan], payment of his benefits under the solely in interest discharge their duties interest, attor- plus prejudgment costs and pur- participants for exclusive neys’ fees.” providing benefits in accordance pose of VI, “Declaratory Judgment,” Count titled documents”; the [Plan] with pay to that “failure to alleged the defendants impose the moratorium the decision benefits to which he is entitled as Hunt the “arbitrary and ca- was benefits dispute forth raised [Plan] set contrary to the terms of the pricious, [was] im- (right) entitlement regarding Hunt’s law”; contrary to and and [Plan] [was] under payment of the benefits [Plan] mediate a result of Defendants’ breach of “[a]s and and [Plan] the terms ERISA” duties, fiduciary damaged Hunt has been provides that such “Chapter 86 Fla. Stat.[ ] payout his by failing to receive may be court.” rights determined resulting payment increased and the Accordingly, requested that “this court expense pend- for loans interest obtained right declaring order his enter an payment.” ing lump sum benefits under [Plan] of his Accordingly, “compensatory Hunt demanded and to ERISA [Plan] terms punitive damages Defendants and awarding proceed- to Hunt costs and entry jointly severally requested] including attorneys’ ing, reasonable fees.” him inter- awarding prejudgment an order defendants, individually, proceeding est, attorneys’ costs reasonable fees.” complaint. responded Hawthorne Benefits,” IV, “Recovery titled Count Trustee, appeared Bankruptcy who alleged damaged has been “Hunt Eastern, liabili- for filed answers denied Hunt the benefits Defendants’ failure ty the affirmative defense and included he [Plan].” to which is entitled under the complaint for relief. failed to state claim Accordingly, “judgment Hunt demanded defendants, excep- remaining jointly severally for against Defendants Copeland, moved to dismiss the com- tion of [Plan], payment of 12(b)(6) for failure plaint under Fed.R.Civ.P. interest, plus prejudgment costs and attor- relief;37 Copeland a claim moved to state for neys’ fees.” had ground on the that Hunt for dismissal V, per- process required “Estoppel,” alleged in not served him with Count titled 4(j).38 Because Hunt had part: Fed.R.Civ.P. tinent complaint party filing after the and the 37. ALPA filed alternative motions to dismiss summary required judgment. service was on whose behalf such why good cannot show cause such service 4(m), 4(j), pro- 38. Fed.R.Civ.P. now Fed.R.Civ.P. period, shall made within that the action pertinent part: vided in prej- dismissed to that defendant without upon own with no- complaint udice the court's initiative If a service of the summons and days party upon upon to such motion. not made a defendant tice within 91C, good Cope- neither Under Document “demonstrated reason Eastern would presence in lawsuit nor “Sponsor” land’s continued remain both and the “Ad- timely cause the lack of service good purposes ministrator” of the [Plan] [ERISA], upon Copeland,” Cope- the court dismissed Eastern and ALPA have been land the case.39 object told that groups one more 91C, Document file suit challeng- ques- Before the court could address ing implementation. Because Eastern’s complaint whether stated claim for tion in ministerial role is a [Plan] continu- defendants, any against relief ing estate, obligation provide and to district Bankruptcy Trustee moved the court single objections forum to consider the 6,1992, judgment August summary for 91C, [Bankruptcy] Document Trustee others, grounds, among that Eastern was hereby and ALPA jointly seek an Order a fiduciary under the Plan because its from approving this Court Document 91C purely ministerial; duties were Eastern approve under its contracts moratorium; impose lacked discretion made [Bankruptcy] Trustee other imposed and that the moratorium was at the ordinary than in the course of business. Athough TAC’s Plan con- direction. See 11 U.S.C. provision requiring tained no Eastern to ac- cept binding, the TAC’s Eastern 26, decisions 1992, Hunt, acting On through October contended that it “had no choice but to abide case, his attorney in the instant filed with the by” impose the TAC’s moratori- decision bankruptcy “Objection court an to Joint Mo- payment um on the benefits. tion Entry for Approving Order Amend- Finally, Eastern that “its sole obli- contended objection ment to The essence of his [Plan].” process in gation the retirement benefits is was that pro- movants failed to “[t]he determining eligibility, limited to here wheth- any authority vide permit which would applicant age an er meets the criteria.” amendment of the [Plan] such manner done,” argued, “Once this is Eastern has “[it] impact adversely would alter or deciding eligible no role whether to ability lump upon receive sum benefits, participant eligible what benefits an Hunt, According retirement.” section to, participant is entitled or how those bene- precluded any 13.1 of the Plan amendment (emphasis origi- fits will be distributed” “adversely that would affect the retirement nal). provided to the at the time of Aternatively, the modification.” On October motion while this objection any “no had amendment 12(b)(6) summary judgment and the Rule him, excepts exempts or that other- pending, motions to dismiss were still permits wise him to receive his sum Bankruptcy jointly Trustee and ALPA payout.” Finally, Hunt contended that the bankruptcy entry moved the court for the bankruptcy jurisdiction court lacked over the to 11 363 approv- an order administration the Plan because “East- ing the Document 91C to the amendment [Plan], according ern’s involvement supra Plan. See I.D. motion ad- Their merely representations, its own ministeri- bankruptcy following: vised the court of the al. The seeks to and escalate motion elevate July 27, On and ALPA administering Eastern’s involvement in agreement entered into letter of providing plan participants without [Plan], ap- amend the on the conditioned any participating means of in Eastern’s ad- proval agree- of this Court. Under ministration.” ment, 91C”, designated as “Document bankruptcy [Plan] would be amended to On November segregation hearing Bankruptcy of the assets of the court held a on the segments, joint ap- liquid illiquid [Plan] into Trustee’s ALPA’s motion for modify lump- proval distribution of the Document 91C amendment to [Plan], addressing objections benefits under Plan. In dismissing Copeland January 39. The district issued court its order case on Hunt, proposed claims to assert the court stated were frivolous. following: February 1, the district court On from this record It is clear pending three disposed of motions. rec- The objections are not well-founded. The first two were ALPA’s alternative mo- has been support the relief that ord does complaint for to dismiss Hunt’s failure tions treat- give equitable which does requested, summary a claim relief and for to state competing interests to inherent ment to granted both judgment. court motions. any as this situation such [Plan]. that ALPA was not adminis- It concluded always interests. competing there are the Plan that Hunt’s breach of trator of that the from this record it is clear And fiduciary duty improperly claim was assert- equitable. proposal is ed; ALPA, therefore, not have could been joint mo- granted court Hunt sought the relief held liable Trustee, Bankruptcy According tion. through I The court also re- Counts IV. appeal- objector nor Hunt neither estoppel jected Hunt’s Count claim be- V ruling. ed this complaint allege failed to that Hunt cause 4, 1992, following the bank- On December representation by on a had relied made approval 91C ruptcy court’s of the Document ALPA. provi- amendment disposed third of was Hunt’s The motion Plan, Hunt the district sion moved leave motion for to file amended com- complaint. to file an court for leave amended The that motion “be- plaint. court denied Trustee, ALPA, Haw- Bankruptcy The complaint cause ... amended Hunt ten- [the separate in opposed Hunt’s motion thorne his from motion] suffer[ed] dered with some Haw- Bankruptcy Trustee and filings.40 The origi- the same infirmities contained his of motion should be argued thorne Hunt’s complaint.” specify not nal The court did bankruptcy ground denied on original complaint; infirmities Hunt’s rejection objection to the Hunt’s court’s they were, gave the court whatever Hunt approval amendment Document 91C days twenty-two to cure them and “file a lump-sum claim for benefit.

barred his complaint.” appropriate amended represented Bankruptcy Trustee also C. a full opportunity that Hunt “had address bankruptcy court. his before the concerns 24, 1993, February Hunt filed an On the bank- Having failed in his efforts before complaint. obtaining Without leave amended court, the doctrine ruptcy he is barred under required by court as Fed.R.Civ.P. attacking judicata collaterally from dropped res case four Hunt from the original complaint: [District] 91C before in his Document defendants named Eastern, ALPA, objected pro- Copeland, to Hunt’s and O’Connor42 Court.”41 ALPA defendants, complaint replaced them two new posed ground on the He with amended responded original complaint Copeland did not to the with an an- 40. and O'Connor Defendants Practice, generally respond motion. Federal to Hunt's 3 Moore’s swer. 15.10, (3d 1997); §§ 15.11 4 Moore’s ed. Federal Trustee, According Bankruptcy to the Practice, ed.1997) (3d (discussing § 21.02[5][b] rejected ob- court heard and Hunt’s interrelationship 15 and of Rules 21 of jection approval Document 91C Procedure). Rules of ALPA and Federal Civil on November and Hunt amendment original did not Hunt’s com- O’Connor answer ruling. appeal this not contest did Hunt did not plaint; ALPAfiled alternative motions dismiss representation. summary judgment, and for and O'Connor filed Hunt, therefore, not motion to dismiss. 21, "Misjoinder Non-Join- Fed.R.Civ.P. required to file a 21 motion and obtain an Rule Parties," provides part: pertinent "Par- der of dismissing from the case. order those defendants dropped may ties added order Eastern, however, original answered Hunt's any party of its own court on motion drop complaint; consequently, Hunt could not any stage of and on such initiative at the action moving the court Eastern from without just.” plaintiff case are A has been terms as given who dismissing to Rule 21 an order complaint to file an leave amended just." are Hunt was Eastern "on free, however, terms as drop from without obtain- a defendant the case to obtain Eastern's dismissal from ing 21 order if defendant has a Rule joined the TAC and the Haw- amended complaint contained seven thorne as the defendants the case. The exceptions counts. With the minor set out in Bankruptcy subsequently Trustee learned margin, the first six counts of the amend- dropped that Hunt from the had Eastern simply complaint replicated ed allega- case, April and on from obtained prayers tions relief contained stipulation Hunt and filed with the court a original complaint. example, before, For that recited: Count I was titled “Failure Provide Infor- 41(a)(l)(ii) Pursuant to Rule of the Fed- mation”; Count II was titled “Action to En- Procedure, ... plaintiff eral Rules of Civil Rights [Plan]”; force Count III was ... here- and defendant Eastern Fiduciary Duty”; titled “Breach of Count IV stipulate agree cap- that the above “Recovery Benefits”; was titled Count V hereby tioned action shall be and dis- “Estoppel”; was titled Eastern, and Count VI was prejudice missed with as to each party to bear own costs.43 “Declaratory titled Judgment.”44 filing stipulation (finding recovery case with the court a fiduciary for breach of 41(a)(l)(ii). under Fed.R.Civ.P. As we observe duty under ERISA “in- III.B, infra, eventually above and in whole”). ures to benefit of the as a route, obtaining followed this dismissal Eastern's up original an effort to shore Count III and by entering stipulation providing into persuade the district court to accord him stand- prej- dismissal claims claim, ing fiduciary breach of Hunt al- udice. leged: effectively precluded [Plan] itself is We note that Hunt did not move the court challenging fiduciary the to Rule 21 to add the the Plan duties of these TACand defen- party being objected as added, to defendants. Neither in that these inextricably dants defendants are roles, and thus the matter is not an here. issue through the [Plan] tied to itself their activities, insured and interests administration Bankruptcy attorney 43. The Trustee’s and Hunt's [Plan]. of the has no recourse for attorney signed stipulation April the regard the actions of these fiduciaries with to 1993, April respectively. and in the [Plan]. his interest willfully wantonly and Defendants principal 44. The difference the between two duty fiduciary their breached to Hunt and to complaints seeking recovery was that instead of itself, by failing pay [Plan] the [Plan] to benefits parties from the named as defendants the Hunt, by failing respond to to to Hunt’s re- original complaint, the counts amended of the information, quests by interfering for with complaint only sought relief from the defendants monies, rights by failing to Hunt's these and complaint. named in the amended than Other discharge solely their in the duties interest of difference, "amended” the Count I was an participants purpose the for the exclusive duplicate original exact the Count Count I. II providing benefits in accordance with the following allegation, added the which was im- added). (emphasis documents [Plan] plicit allegations original in the Count II: allegation, The new Count III also added this improperly, "These defendants have without and replicated allegation followed the which the authority, attempts interfered with Hunt’s to re- "arbitrary capricious, was [was] moratorium payment through imposition ceive the aof mora- [Plan], contrary to the terms of the and [was] torium, or the modification amendment of contrary to law”: [Plan]." Alternatively, if the moratorium was im- claim, III, duty fiduciary Count the breach of posed inability pay [Plan's] because of the allegations attempt added the listed below in an lump retiring employees sum benefits to elect- to circumvent the dismissal of this claim on the option, ing that then these Defendants have ground plan participant that an individual lacks fiduciary their breached duties to the [Plan] standing fiduciary a under ERISA sue for through mismanagement and to Hunt and fail- money damages. standing That Hunt lacked as a take ure to such action to ensure that the plan participant bring fiduciary breach of adequately pay was [Plan] so as to the funded duty previously claim the TAC had been lump option sum benefit exercised Hunt. attention, brought to the district court's Finally, language the new Count III added attorney court had informed his that Hunt could prayer compensatory punitive to its for dam- benefit, bring op- the claim for his own alternative, ages: judg- "[I]n [Hunt] demands posed participants. to the benefit of all As damages knew, ment for on behalf of the in an [Plan] attorney right Hunt’s well sue fully fiduciary amount sufficient fund retirement duty belonged breach of to all plan's authorized under the group. [Plan].” See Massachu- Russell, new setts Mut. Co. v. U.S. The sole addition of note to Count IV was Ins. Life. (1985) allegation S.Ct. 87 L.Ed.2d and the the moratorium Docu- Hunt’s complaint, twenty-four funds are retained original In the interest, benefit, attorney’s presentation costs and fees.” preceded the paragraphs twenty- complaint had The amended counts. jointly moved The TAC and the paragraphs, These paragraphs. five such court the counts of the amended to dismiss counterparts origi- their compared to complaint ground stated on the that none materially in the fol- complaint, differed nal part, they repeated claim for relief.45 in the alleging original After lowing way. addressing the suffi- arguments previously 91C Document amend- complaint ciency original complaint that of Hunt’s were lump-sum benefit had affecting Hunt’s ment Bankruptcy in the Trustee’s advanced ALPA, which made been objections to ALPA’s Hunt’s motion leave case, parties in the longer were no complaint. argu- file These an amended position alleged that his changed ments the claim that Hunt included lacked TAC, regarding ad- “renders decisions fiduciary duty standing to sue breach of [Plan],” party ministration and that the moratorium and than responsible for the moratorium rather approval of Document court’s 91C Hunt, According to ALPA. East- Eastern or foreclosed claim. As amendment only ALPA “the entities which ern and were seeking per day claim statu- $100 [Plan]”; modify amend he can act to tory penalty, these defendants contended implied alleg- moratorium that the therefore penalties that such were assessable edly imposed the TAC constituted an against the administrator of the East- amendment modification unauthorized ern, from the which had been dismissed ease the Plan. prejudice. with answered Hawthorne complaint general liability. denial noted, complaint the amended added As joint disposed The district court origi- to those asserted seventh count complaint motion to dismiss amended VII, “Injunctive titled complaint. nal Count (1) following manner: the court denied Relief,” essentially that alleged the defen- (2) I; Count denied motion dismiss duty to had breached their maintain dants (3) II; motion to dismiss Count dismissed pay with which to sufficient “reserves” sought Count III to the extent that it com- alleged lump-sum It further Hunt’s benefit. Hunt, prehensive punitive for damages that standing but he had to sue the held that TAC parties prejudiced by will be other [n]o fiduciary duty for breach of on behalf the enjoining imposition the moratori- (4) Plan’s the motion participants; denied um, pay- or amendment or modification (5) IV; Count dismiss Count dismissed V beyond keeping ments made thereunder after Hunt conceded that he had no case for payment the reserves for sufficient (6) estoppel; dismissed Count VI the benefit; i.e., payments (7) ground preemption; of ERISA de- [Plan], continue under the but de- VII, nied motion to dismiss al- the Count enjoined deplet- from would be so fendants though was the court unable to discern— liquid that ing portion the fund “inartfully” from it what described as lump sum benefit could be Hunt’s total pleading Hunt stated drafted —whether paid. claim for relief. rulings, Following these the TAC and Accordingly, “demand[ed] that the [the] complaint, deny- enjoining answered the amended Court enter order ing liability, jointly then for sum- the to current benefi- moved benefits under [Plan] ciaries, mary essentially that Their motion judgment. at least to extent sufficient the VI, the 91C amendment. Count the 91C to the benefit Document merit amendment ap- claim,

provision, which court had declaratory judgment the was renewed verba- "arbitrary, capricious, proved, were unreason- tim. provisions contrary the [] able and to the claim, V, estoppel New Count the added [Plan].” represented 45. The TACand the Plan were the estopped allegation were that the defendants throughout same this case. counsel enforcing against from Hunt the moratorium presented arguments required in their statute. Because Hunt restated had moved established neither to dismiss. Hawthorne also that TAC was the motion contended, summary judgment. It Plan administrator nor that it had assumed “information-providing among things, Hunt’s claim function” of the (Counts IV) administrator, II and could not TAC be held 502(c). only brought against the and a liable under section could be entity, as the Plan adminis- person II and Counts TV. The court first found trator, possessing authority to order properly that Hunt applied lump- had for the argued payment of his benefit. Hawthorne sum benefit and that his had been and, thus, it could had no such denied because of the moratorium the TAC addition, sought. not the relief “imposed” unilaterally. had The TAC had not be Hawthorne contended could done so because it concluded that a “morato- fiduciary duty held liable for breach rium was needed to maintain the financial (Count III) appropri- because integrity of protect and to [Plan] action, plaintiff a cause of was ate for such plan participants economic interests of all injured by not the failure to Hunt his and beneficiaries.” The court then turned to lump-sum benefit. question whether TAC had the au- impose thority the moratorium for such ruling The court deferred on these motions purpose. Although Plan did express- summary morning until judgment ly give authority, the TAC such the court began. trial case In the assumed that the law common of trusts did meantime, settled with Hunt and Hawthorne determination, Having so. made that judgment in favor of agreed entry question court addressed the whether Hunt $10,000; I the sum Count proof or the TAC had the regard- burden to be other counts Hawthorne were ing the need for the moratorium: it conclud- prejudice. dismissed with The court denied ed that the TAC had the burden. pending, was motion that the TAC’s summary judg- Plan’s motion hand, ruling With this the court consid- ment, and the trial commenced. proof ered whether the TAC’s established prudent

that “its action was both and neces- sary protect plan par- the interests of all D. ticipants and their beneficiaries.” The court The case was tried to the court. Five although held that the moratorium complaint were at counts the amended justified, proof been TAC’s insuffi- per day Hunt’s claim for the issue: $100 carry day. The court cient to therefore I; statutory penalty under Count identi- gave judgment Hunt II in on Counts and TV seeking claims II cal under Counts and TV $352,748.74 of plus the sum costs. judgment lump-sum of the amount the III. findings The court’s on this Count benefit, interest, costs, prejudgment and at- ambiguous. alleged claim are Hunt had that fees; torneys’ on behalf his claim imposed [by “if the moratorium was the fiduciary duty of un- participants breach inability pay of because the TAC] [Plan’s] III; request his der Count that the TAC lump retiring employees sum benefits to the enjoined paying Plan be from bene- option, that electing then these Defendants they fits other until satisfied fiduciary their have breached duties to the his claim under Count VII. through mismanagement and to Hunt [Plan] considering by After the evidence adduced and failure to take such action to ensure that court, parties, Directing in an the the “Order adequately the funded so as to [Plan] Entry Judgment,” of held as follows: option by pay exercised words, desig- supra Count I. In The court found that Hunt.” See note 44. subject fiduciary duty nated administrators are the TAC breached its 502(c), by Hunt, by penalty imposed participants, ERISA therefore to Plan’s $100 1132(c), failing respond imposing to a the moratorium because of its ina- plan-participant’s requests bility as benefits. information plus judgment “Hunt 748.74 costs. shall no breach:

The court found mismanage- paid evidence of from the We read this [F]und.” neither [Plan] submitted argu- of assuming, for sake judgment ment language, the final entered nor — ment, fiduciary clerk, a breach of proved that he in favor disposing as Count VII could which this court duty from Hunt,47 grant court although did not —evidence having failed remedy. Hunt thus fashion injunctive requested.48 the count relief III, proof on satisfy his Count burden Following entry final judgment, in favor of the entered judgment will be appealed TAC and the Plan the district defendants.” judgment II Hunt court’s on Counts and IV. Therefore, analy- the district court’s cross-appealed judgment the court’s sis, had its fidu- TAC breached whether the I III. Count but not Count For the reasons including participants, ciary duty to the Plan follow, judgment that we reverse court’s Hunt, by imposing the moratorium turned IV, II and affirm to Count on Counts as proof. On party the burden of which had I. IV, the court held that II Counts sustain but failed to TAC had burden III. showing prudence required that Paragraph 4 of the district court’s “Order III, the imposed. On moratorium be Count Directing Judgment,” gave Entry of proof Hunt had burden court held that II, IV, judgment on Counts and VII acted that the TAC had but failed show benefit, presents several imposing the moratorium.46 imprudently in threshold that must be before issues resolved Directing En- “Order The district court’s merits of claim to we can consider the no try Judgment” makes mention of para- previously, that benefit. As stated VII). (Count dispos- After remaining count graph to “en- court directed the clerk in the amended com- ing of the other counts judgment in favor of in the [Hunt] ter number, including Counts V and VI plaint $352,748.74plus judg- amount of costs. The prior case which were dismissed paid ment shall be from the [Plan] [F]und.” trial, of court the court instructed clerk question The first threshold is whether (“paragraph paragraph of its order four 4”) legal or granted paragraph “4. relief 4 is judgment should be On how entered: IV, is, [i.e., II, granted equitable;50 does relief remaining Counts counts per- VII], money judgment an in judgment enter favor constitute the clerk shall $352,- Harry directing L. in the amount of sonam order or the TAC assume, (llth Cir.1981) (en banc), adopted "for sake of this circuit 46. How the court could argument, proved precedent fidu- binding [Hunt] breach all decisions of the former duty” deny ciary relief on Count prior and then him Circuit down Fifth handed to October dispositive question order the court’s III is does not answer. court, despite deciding 48. The district sub silen- judgment By treating the district court’s final favor, granted VII him no tio Count in Hunt's having Count VII of Hunt’s terminated briefs, parties on this their relief count. judgment complaint, we have a final amended ignored altogether; dis- Count VII like the appealable under 28 U.S.C. before us that court, they trict made no mention of Because it. adjudicated judgment all 1291 has because disposition explicit of our of Hunt’s claim for See, parties. e.g., v. Penton claims IV, Counts II Count benefits contained in 321, Co., Pompano 321-22 963 F.2d Constr. by wayside. say, VII falls That we (11th Cir.1992). amendment of his com- Hunt’s judgment on VII and vacate the court’s Count plaint, from ALPA and O’Connor which deleted judgment favor of the direct court to enter action, operated parties from to dismiss those count. TAC and the Plan on that amendment, 42. supra the suit. note See however, operate did Eastern from not dismiss judgment We final entered 49. note that the Rather, the case. Id. Eastern was dismissed quoted language the clerk verbatim. case, prejudice, from the with when Hunt stipulation dismissal and Eastern executed paragraph equita- granted 4 is Scripto, 50. If relief v. filed it with court. See Oswalt ble, Cir.1980). Inc., (5th grant jurisdiction to we have review 616 In F.2d 194-95 1292(a)(1). Prichard, supra note 47. City 661 1209 under 28 U.S.C. Bonner v. F.2d pay money Hunt a the assets A. ques- of the Plan’s Fund. The answer to this 502(a)(1)(B) Section pro ERISA because, important explain tion is as we be- may vides that civil “[a] action be brought by low, provided the relief in an action recov- participant beneficiary or ... to recover equitable, er benefits under ERISA is benefits due to him under the terms of his specifically, legal. More the relief consists of plan, rights to enforce his under the terms of directing person entity having order plan, clarify or to rights to future necessary authority under the benefit benefits under the terms of the plan.” 29 pay the benefit that 1132(a)(1)(B). face, On its this lan sought equitable he seeks. Hunt relief guage does not partici indicate whether a II complaint, asking Count of his amended pant seeking to recover retirement benefits the district court to enter “an order requir- legal equitable obtain relief. Al ing pay Defendants to Hunt his benefits.” though the “causes of action authorized IV, relief, sought In Hunt legal Count de- 502(a)(1)(B) section [of are not ERISA] ex manding “judgment against ... Defendants plicitly equitable,” denominated as see Pane jointly severally payment of his bene- (3d Corp., v. RCA 868 F.2d Cir. VII, “Injunctive fits.” In Count titled Re- 1989),52this circuit has treated actions to lief,” Hunt asked the court to “enter an order 502(a)(1)(B) recover benefits under section enjoining payment of benefits ... to current See, equitable in e.g., nature. Shannon v. beneficiaries, at least to the extent that suffi- Corp., Jack Eckerd 113 F.3d 209-10 pay cient funds are retained to (11th Cir.1997) (denying appeal of district sum benefit.” judgment ordering plan court’s administrator pay benefits to plan participant); Godfrey Nothing in language paragraph Telecomm., Inc., v. BellSouth 89 F.3d If, however, anything. orders the TAC do (11th Cir.1996) 756-57 (affirming district is, effectively we construe —that rewrite— injunction court’s issuance of ordering “an paragraph 4 so that it orders the TAC to comply [Plan with administrator] ERISA Fund,51 the benefit from the then we must benefits”). pay [participant] ... This decide whether authority the TAC has the position is with par consistent our view that not, payment; under the Plan to effect if 502(a)(1)(B) ticipants suing under section are sought. TAC cannot the relief De- jury not entitled to a In trial. Blake v. spite representations contrary, Am., Unionmutual Stock Ins. Co. we Life Eastern, administrator, obviously the Plan reasoned: so, payment could effect if ordered to do see The nature of an action under section part III.B, supra I.C and but infra 502(a)(1)(B) is for the enforcement of the voluntarily dismissed from the case plan. Although plaintiffs ERISA as- prejudice. Nor can the Plan as an they claiming money sert are dam- relief; entity provide any the Plan alone is ages, they claiming in effect are the bene- simply a written instrument executed they allegedly fits are entitled to under the Eastern and ALPA. plan. Although money ... judgment issues, turn taking demands, We now to these satisfy them would their up in order. continuing order benefits would be suf- course, Pane, original complaint, aptly captured In his the Third Circuit Eastern, position took the as Plan adminis- legal equitable distinction between relief in trator, party having was the brought the context of an action under section seeking; effect of the benefit he is 502(a)(1)(B) legal remedy of ERISA: "A naming party was his reason for Eastern as a money judgment only by result in a enforceable lump-sum defendant in his claims to recover his execution, or other conventional common law eliminating benefit. Since Eastern from his process ejectment replevin. equi- such as An defendant, complaint party amended as a remedy judgment table would result in a enforce- TAC, Eastern, position has taken the that the not personam by contempt.” 868 able F.2d at entity having authority pay- is the to effect 635-36. ment of the benefit. 908 Cir.1990) (5th 1073, (affirming traditionally re- F.2d 1074 dis- equitable This is

ficient. lief____ plaintiffs trict second court’s dismissal part complaint amended failure (11th Cir.1990). 1525, This 1526 906 F.2d as an plan name the administrator “indis- majority of circuits view accords with reject pensable party”). We therefore issue.53 We there- that considered have injunctive pay notion that an order bene- legal claim for relief Hunt’s fore hold that 502(a)(1)(B) of can fits under section ERISA (i.e., money judgment) under section plan solely an ERISA as an against issue 502(a)(1)(B) a claim. Accord- fails to state entity. IV of Hunt’s amend- ingly, Count we dismiss only equi- leaving his claim for complaint, ed B. lump- II to recover his in Count table relief We court’s next examine district sum benefit. ruling paragraph 4 that “the clerk shall equitable nature of Given judgment Harry enter in favor of L. Hunt ERISA, under we claim recovery-of-benefits II, IV, VII]” Counts that [on “[t]he personam enjoin an in order also that find judgment paid from the shall be fund.” [Plan] of benefits section ing payment under injunctive Because an order cannot issue 502(a)(1)(B) person to a must be directed itself, we assume against the Plan that we plan entity itself. While i.e., other than effectively have discretion construe — 1132(d)(1), 502(d)(1), § § ERISA 4 that it paragraph so directs the rewrite — employee plan that benefit TAC to Hunt the benefit from “[a]n does state entity,” nothing an the Fund. ... as sue or be sued court to issue permits the district ERISA Plan,55 Our review of the record and the solely against plan.54 injunctive order however, clear that the TAC has no makes Rather, of this circuit case law demon authority deny the Plan to issue or enjoining payment order strates that an partici- benefit to plan ERISA must issue from an benefits Rather, pant. powers the TAC has limited capable providing the re against party plays under the no in the Plan56 and role See, Shannon, requested. e.g., 113 F.3d applications lief process reviewing for retire- 756-57; Eastern, 209-10; Godfrey, F.3d at at 89 ment benefits. Unlike the TAC’s cf. Co., Metropolitan primarily manage- 895 limited Fisher v. Ins. is Life States, law v. Central Southeast & state contract claim and must tried before 53.See Wardle Fund, 820, jury). appeals 627 None of the courts of mentioned Pension F.2d 829 Southwest Areas above, however, (7th Cir.1980) ("We reasoning endorsed the Congress' that have conclude si these district courts. right jury issue reflects an intention lence on the pension disappointed benefits that suits denied, applicants equitable.”), 502(d)(2) cert. 449 U.S. "[a]ny money are § 54. ERISA states 1112, 922, (1981); L.Ed.2d judgment employee plan S.Ct. 66 841 see against 101 Co., Aerospace plan also v. LTV Sullivan shall be enforceable entity as an Defense 1251, (2d Cir.1996); Berry against any v. 82 F.3d 1258-59 not be enforceable shall 1003, (4th person liability against person Ciba-Geigy Corp., Cir such 761 F.2d 1007 unless 43, .985); capacity.” Corp., Steel is established in his individual 29 v. CF & I 770 F.2d Turner 1132(d)(2). denied, 1058, provision § (3d Cir.1985), U.S.C. This contem- 474 47 cert. U.S. 106 plates legal apply (1986); 800, relief and does an action Vorpahl, 776 S.Ct. L.Ed.2d In re 88 F,2d 502(a)(1)(B). 1982); to recover under section 318, (8th Cir. 321-22 Calamia v. 695 (5th 1235, Spivey, 1237 Cir. Unit A 632 F.2d 1980). suggested specified, district courts the term Some 55. Unless "Plan” in otherwise Bruch, Rubber v. 489 U.S. III written instrument in effect Firestone Tire & refers to the (1989), "approved” 80 calls these at the 109 S.Ct. 103 L.Ed.2d time Hunt's See, (i.e.. 91A). April e.g., Documents 91 and holdings v. 1991 into doubt. Hulcher United (E.D.Va. Sys., F.Supp. 885 Behavioral 1995) (holding "action to [ERISA] recover provisions We review the relevant plan subject legal are in na fiduciary benefits under discharge must here because named constitutionally "[p]laintiff ture” enti and that duties with the documents "in accordance by jury governing tled claim raised under to trial insofar as and instruments Co., 1132(a)(1)(B)”); Vaughn v. Owen Steel are and instruments consistent documents 404(a)(1)(D), (D.S.C.1994) F.Supp. (finding 250-51 ERISA [ERISA].” 1104(a)(1)(D). analogous under ERISA is section 502 claim (1995). supervision of the assets. ment and Fund’s L.Ed.2d 94 Section 2.2(a) responsibility” is re- supervisory Its “overall upon of the Plan confers Eastern stricted to the “administrative functions powers carry necessary “those to out day (“Fund 2.13(b)(i) Fund,” § Adminis- see day operation responsibil- the Plan.” Its tration”), duty to and its the Plan is limited authority “initially ities include the deter- status maintain[ing] “to surveillance over the questions arising mine all from the adminis- of the and administration Plan and tration, interpretation, application and 10.2(b) [Fund],” (“Rights §see and Duties of law, Plan all applicable agree- [TAC]”). contracts, ments and and such determination binding upon shall persons, except as I.B, addition, part In discussed in su- as provided law, otherwise and pro- further pra, must exercise limited TAC each Participant granted vided that shall be powers in a manner consistent with its obli- example, the same treatment similar gations to ALPA. For se- under condi- before lecting replacing charges and investment advisors tions.” Id. The Plan also Eastern trustees, notify for, alia, and TAC must ALPA responsibility keep- inter give planned records, of its course of action and (“Records”), ing § preparing see 2.4 opportunity respond. ALPA an See summaries, distributing periodic and Plan see 2.7(b) (“Trust Trustee”). Agreement § (“Plan § Summary”), sending 2.5 to each in- Similarly, giving any before notice participant annual statement reflecting Fund, struction to a trustee of the Plan, the value his investment see copy trust di- TAC must serve (“Annual Statement”). § 2.6 days give rection ALPA fifteen important, More based the record be- object proposed TAC’s direction. us,57 fore we find that (“Directions Eastern exercises ulti- Trustee(s)”). § See In 2.8 determining mate whether a addition, pe- “regularly must the TAC participant should riodically ALPA receive suppl[y]” information to detail, benefit. The about transactional cash flow re- record reveals status, ports, process investment documentation and plays the central role in the of re- (“Informa- performance,” Fund see 2.11 applications viewing The Plan benefits. Accountability”), tion and and furnish to responsible providing makes Eastern participants reports ALPA about and Plan benefit-application participants. forms “functions, actions, the TAC’s and decisions 12.9(a) Benefits”).58 (“Application ... appropriate,” as are reasonable and see pilot seeking lump-sum payment A must 10.2(c). complete necessary paperwork and in- employee, management form an Eastern contrast, plain language stark Pilot, Chief of his intention to retire. The gives Eastern broad discretion ad- pilot’s eligibility Pilot checks Chief ministrator to make decisions for the Plan. the Eastern then informs Pen- plan Supreme has Court stated that Department sion Insurance about a “statutory responsibility administrator has pilot’s application decision to retire.59 The run ... in accor- [under ERISA] presented then to the Eastern Pension Ad- currently operative, govern- dance with the Department, pro- which must ing plan Corp. ministration Curtiss-Wright documents.” v. Schoonejongen, authorizing signature 514 U.S. S.Ct. beneath a vide line 12, supra, part I.C 57.As stated in and note 58. Section 12.9 also states that each furnish the with such “shall Administrator procedure process- does not set forth documents, evidence, data, or information in ing account claims for retirement benefits. This support Administrator procedure claims-processing is taken necessary or shall consider desirable.” deposition Dyer the affidavit and of Charles White, Hawthorne and the affidavit of Brian who I.D, supra, 59. As after the morato- stated served as Director Eastern Pension began, retiring participant rium would con- Department. Insurance Both of East- accounts Depart- tact Eastern’s Pension and Insurance procedure virtually claims-processing ern’s are directly through go ment rather than the Chief identical. Pilot. 910 same, ap- “basically the ex- “The information is shutdown remained above

that states: appropriate cept allocation from that ... Eastern inform Mercer proved and the. payable is actuary] the benefit Plan whether a [the the Plan had application ap- shutdown, If the is hereby applied following authorized.” for benefits thus proved, By the Eastern Pension Insurance implicating the moratorium.” actuary, statement, the Plan’s Department effectively contacts this Eastern admits precise amount of ben- imposition which determines that it the moratori- ratified of retiring participant to which is enti- efits application. um In and thus denied Hunt’s actuary gives that informa- then essence, tled. actuary order Eastern’s to the Trust, Street Bank & tion to the State processing application halt of Hunt’s participant. the distribution to makes Bank and foreclosed the State Street Trust responsible establishing Eastern is him issuing a benefit check. procedure giving maintaining par- Furthermore, nothing there is in the rec- application if the ticipant written notification challenged that ord indicate Eastern (“Notification of 2.3 Denial is denied. See legality imposi- its of the moratorium after Benefits”). legal dispute If is a as there especially glaring tion. inaction Eastern’s benefit, recipient of a Eastern proper to the that XIII when one considers Article payment pending may withhold final deter- Plan, “Modification, Suspension or Dis- titled proper beneficiary. mination of continuance,” vests Eastern with the exclu- (“Beneficiary Dispute”). § 12.10 modify, authority suspend, sive or discon- support our reading facts of case this tinue feature of the Plan: Eastern, TAC, has the authority not the expects to Plan indef- Eastern continue the payment of retirement to order benefits. initely, necessarily right to but reserves the First, the record makes clear Eastern any modify, suspend or it at terminate authority its as administrator at all retained including, limiting time but without during giving times events rise to generality the foregoing, discontinuance “ap- litigation. When the contributions under the Eastern proved” Eastern’s Pension Administration modification, suspension, Plan or dis- April Department Eastern was respect entirety continuance in its with in the written instrument the Plan listed However, any any feature thereof. Plan was When the amend- administrator.60 modification, suspension, or discontinuance 25,1991, Eastern ed effective June continued retirement, adversely shall not affect the for all aspects to serve as administrator already pro- death or termination benefits exception newly any vided that time Plan for at under the periodic-payment option introduced annuitant, Participant, contingent or bene- 6.11(f) (“Pe- provision for Plan loans. See modification, ficiary as of the date of such (“Plan Payments”), riodic Article XV suspension, or discontinuance. Loans”).61 Even Plan was after the amended discontinued, event the shall be June effective action shall be taken as shall insure to the 91C, approval court’s of Document possible the all liabili- extent satisfaction of retained its administrator. Participants, annuitants, contingent ties to Second, the record demonstrates beneficiaries have accrued under Eastern, despite representations the Plan. contrary, made the decision honor (“General”) added). ultimately prevented (emphasis 13.1 Al- moratorium though issuing provision Bank and Trust from enumerates one State Street (i.e., lump-sum payment specific application to Hunt. As of this noted in subsection I.D, contributions), supra, the of Eastern’s discontinuation of director Pension Eastern’s phrases “including, Department limiting Insurance stated that but without generality process reviewing foregoing” benefit claims after the and “with time, amend- 60. At this version of the Plan the Plan consisted Document This included ment to as 9IB. 91 Document A. referred Document 91 Co., (1st Cir.1989) (cita respect to feature thereof’ would encom- 873 F.2d omitted). scenarios, pass suspension such as the tion See also Hamilton v. Air Ja Thus, maica, Ltd., (3d option. Cir.1991) lump-sum payment if 945 F.2d (“While challenge pur- Eastern wanted TAC’s ERISA was enacted se benefits, portedly imposition curity “unilateral” of the mora- in employee protects only torium, certainly gave provided the Plan Eastern the those plan____ in the authority to do so.62 ERISA mandates no minimum substantive employee content for plans, welfare benefit Eastern, TAC, It is clear that not the and therefore a court authority has no responsibility bears ultimate for the denial of draft substantive content of such Hunt, however, lump-sum benefit. omitted), (citation plans.”) quotation marks attempt an obvious to avoid the effect of the denied, rt. 503 U.S. 112 S.Ct. ce approval court’s of the Document (1992); 117 622 L.Ed.2d Nachwal cf. amendment, voluntarily 91C dismissed East Christie, (11th ter v. 805 F.2d 960 Cir. prejudice party ern with as a to this action 1986) (written employee plans gov benefit 41(a)(l)(ii) shortly to Fed.R.Civ.P. by erned by ERISA not be modified filing complaint.63 after his amended agreements). reject oral We therefore district court’s sub silentio revision of the Nevertheless, court the district ruled Plan which enabled the court to direct the 4 paragraph of its order that the TAC pay lump-sum TAC to Hunt his benefit. possessed payment to issue ruling, from the Fund. In so the district implicitly give court rewrote the Plan to C. power. Although recognize

TAC that we “principal object that the is to [ERISA] the district court’s view that Given beneficiaries,” protect plan participants the TAC denied Hunt’s benefit — -, -, Boggs, moratorium, however, v. Boggs issuing U.S. 117 we will as (1997), arguendo S.Ct. 138 L.Ed.2d 45 we sume that the TAC could order the agree with the First Circuit’s admonition State Street Bank and Trust to issue Hunt right that “courts have no to torture lan from the Fund. For the district guage attempt particular sense, theory liability to force re court’s to make contrary, straight necessarily ... To sults. the exact TAC would as acted de facto stead; language ERISA-regulated forward in an Plan administrator Eastern’s above, policy given theory insurance should be its natural discussed is inconsistent meaning.” clearly unsupported Burnham v. Guardian Ins. with the Life suggests lump- preju 62. Hunt that moratorium on Eastern's dismissal from the case with payments impermissible because operated it was adjudication dice as an on the merits in provision "any inconsistent with 13.1's brought favor of Eastern on all claims Hunt had modification, suspension, or discontinuance shall Citibank, against company. N.A. v. Data retirement, adversely not affect the death or ter- (11th Corp., Lease Fin. F.2d 1501-02 already provided mination benefits at that time 1990) ("[A] prej stipulation Cir. of dismissal with note, any Participant.” under however, Plan for We any stage judicial proceeding, udice at of a lump-sum pay- that the moratorium on normally judgment constitutes final on the ments had no effect on Hunt’s actual interest in merits which bars a later suit on the same cause Plan—i.e., annuity the total number of units action.”) (citation omitted). adjudication This benefit; rather, in his accrued the moratorium include, course, by dismissal would Hunt's only changed the manner in which Hunt and Eastern, (1) claims as the administrator and similarly situated could re- fiduciary as a under the breached its obli ceive their benefits. gation participants by to Hunt and other the Plan's status as a defined Given contribu- of, declaring, ratifying the TAC's declaration plan, participant's tion the value of interest in moratorium, (2) wrongfully performance the Plan fluctuates with the Hunt the he refused all, supra part Fund's assets. See I.B. After appeal, seeks. the TAC In this and the Plan have full name of the Plan is the "Variable Benefit argued disposition not that this of Hunt’s claims participant's Retirement Plan for Pilots”: a in- against preclusive Eastern had a effect on depends Hunt's terest in the Plan on the contri- Accordingly, claims butions made but them. we do not also on how Fund’s assets perform. consider the issue. contracts, law, Yet, assump- agreements and such de- indulge if we even record. binding upon per- shall as de termination TAC functioned tion that facto sons, administrator, except provided law.” otherwise we remain convinced language imposition comparable have held that justified the We this case facts of trigger arbi- and the concomitant denial sufficient review the moratorium Jett, capricious trary and standard. See lump-sum benefit.64 of Hunt’s (“[Plan has administrator] at 1139 F.2d evaluating adminis When provisions right interpret exclusive benefits, deny a district trator’s decision Plan, so its is conclusive and decision th[is] appropriate first determine the court must binding.”); Guy v. Iron Southeastern Work- Bruch Firestone v. of review. standard (11th Fund, 37, 877 F.2d 38-39 ers’ Welfare challenged of “a denial holds that Cir.1989) (“[Administrator power full has] 1132(a)(1)(B) un is reviewed to be Trust”). provisions construe the of [the] unless the benefit der a de novo standard Thus, capricious apply arbitrary and we fiduciary dis administrator or gives the of review TAC’s “decision” as standard eligibility authority to cretionary determine deny lump- Hunt’s de administrator to facto plan.” 489 the terms of to construe principal sum benefit. We stress that our 101, 115, 109 103 L.Ed.2d S.Ct. U.S. hypothetical is inquiry in this situation (1989). interpreted Firestone 80 We justified in imposing whether the TAC was arbitrary capricious stan and mandate an moratorium, but the TAC whether was review, inter which is often used dard of justified denying Hunt’s stan changeably with abuse discretion course, analysis lump-sum benefit. our Of dard, discretionary has if the administrator necessarily implicates the latter issue eligibility authority to make determinations former. plan. disputed terms to construe Ala., & v. Blue Cross Blue Shield Jett capricious arbitrary Under (11th Cir.1989). 1137, trig 1139 To 890 F.2d review, “to standard of the court seeks deter review, language ger this standard mine whether there was a reasonable basis conferring discretion on the administrator decision, upon based for the [administrator’s] unambiguous “express language must be as known at the facts to the administrator 10 Corp., v. design.” its Kirwan Marriott Jett, the time the decision was made.” 890 (internal (11th Cir.1994) 784, cita F.3d 789 presented at 1139. The at F.2d facts trial omitted). suffers If the tions administrator reasonably bear out that the acted in its TAC rendering from a conflict of interest impose decision as de administrator facto determination, apply should the district court payments. lump-sum the moratorium on arbitrary capricious stan heightened First, paints extremely the record bleak Firestone, 115, at 109 489 U.S. dard. See picture January for the Plan in 1991. It is 957; also Marecek v. BellSouth S.Ct. at see undisputed that on liquid the Plan was low Cir.1995). (11th Telecomm., 702, 49 F.3d 705 eighteenth assets as of month. arbitrary capricious Following Chapter standard the commencement of 9, reorganization proceeding review in this 11 on March appropriate standard of express eventually lan- contains reduced case because authority making conferring discretionary stopped contributions on behalf of its guage Moreover, upon pilots. its terms. 1986 and the administrator to construe between 2.2(a) (“Administration”), paid payments lump-sum the amount of Under section increased; enjoys authority retiring pilots dramatically to “initial- fewer administrator twenty-five pilots another ly questions arising than selected bene determine administration, applica- option lump-sum option after the became interpretation, and fit $52,000,- roughly applicable available in 1983. In tion to all nario, however, analysis, XIII of the Plan court assumed that because Article In its district gave the TAC the the common law of trusts clearly gives the administrator power impose the We need not moratorium. impose a moratorium. assumption hypothetical sce- for this make (discussion lump-sum payments; part obligations III.B was disbursed TAC’s $200,000,000 2.7(b), 2.11). to more than grew 2.8., §§ that number ALPA under January January in 1990.65 Between 2,500 approximately one of pilots 18, 1991, already $38,000,000 dis- had been who were affected Eastern’s shutdown payments.66 bursed and the moratorium. Like hundreds of liquid paucity of assets was further This pilots other Eastern who failed to submit depressed performance exacerbated applications their benefit the close of busi- holdings. real estate Plan’s substantial January ness on Hunt was unable president Spencer, Citicorp Former William advantage original lump-sum to take during period member of the TAC option was in prior effect to Eastern’s at trial question, real estate “[t]he stated shutdown. comprised a sizable fund funk, was in a unless time was some If grant the Plan administrator were to evolve, developed the real could [so estate] application, howev- hardships all of members the [Plan’s] er, arbitrarily favoring it would be Hunt over very extreme.” former Another who, Hunt, pilots all of like did not Ford, member, TAC former President stated application imposition submit their before deposition in his that the Plan not have could fiduciary the moratorium. aAs under payments retiring pi- lump-sum made to all ERISA, responsi- administrator owes subjecting real hold- lots without its estate bility “in plan to administer the accordance ings prices to a sale” at below “fire far govern- the documents and instruments Both market value. former members TAC ing plan.” 404(a)(1)(D), § ERISA agreed holding poten- a fire sale of such 1104(a)(1)(D). § plainly The Plan tially gross- assets would have valuable been is required states that administrator to ly imprudent. the va- dispute Hunt did not discharge its duties in a manner ensuring lidity testimony. of this Participant granted “each shall be Second, of the Plan clear the terms make same treatment under similar conditions.” equal that the administrator owes an fiducia- (“Administration”) (emphasis See 2.2 add- ry duty participants, including to all ed). fiduciary responsibility, this Given those annuitants and who have not elected administrator, when faced with Hunt’s bene- any option. benefit administrator re- application, fit made the reasonable decision quired all participants equally to treat at all Hunt exactly to treat like all 2.2(a) running in times the Plan. See is, pilots position deny in his to his (“[T]he —that shall those Administrator “approval” lump-sum despite its powers necessary carry day day out Pension Depart- Eastern’s Administration operation initially Plan ... and deter- Therefore, assuming arguendo ment. even questions arising mine all from adminis- TAC functioned as de adminis- tration, interpretation, and facto trator, would its we find “denial” of provided Participant Plan ... that each benefit was reasonable granted shall be under same treatment conditions.”) added). upon based the facts known it at that (emphasis similar Moreover, Accordingly, hypothetical time.67 in fiduciary, as named TAC case, heavy obligation supra bears a ALP A. the TAC’s “denial” of Hunt’s following arbitrary capricious amounts were in distributed under the standard of lump-sum payments 1990: between 1986 and imposition review the of the moratorium. We $52,091,000 $79,389,000 $107,- (1986); (1987); however, agree, district would court’s 954,000 $181,856,000 (1988); (1989); presented supporting that the assessment TAC $200,540,000 (1990). wholly at evidence trial in a manner: incoherent “[Bjecause [TAC’s was] data either incom- rate, $60,000,000 66. At this more than would plete adequately explained, or this court was lump-sum payments have been disbursed figures left wonder what the numbers January 1991 alone. really meant.” above, managed 67. As indicated we have to lo- ample justify cate information the record cross-appeal the arbi- The issue is whether pass muster under benefits of review.68 the TAC should be considered “adminis- capricious standard trary and 502(e) purposes trator” for of section previous shows that ERISA. The discussion IV. designated the Plan Eastern as Plan admin- district cross-appeals istrator, whereas the as named TAC served statutory penalty impose court’s refusal fiduciary as administrator comply alleged for its failure to on the TAC periodic-payment options.72 loan requests information.69 Un with Hunt’s however, contends, TAC functioned that the 502(c) ERISA, an administra der section thus administrator and should defacto comply with “fails or refuses to tor who failing respond to his re- held liable which such ad information request quests for information. fur required by [ERISA] ministrator is beneficiary claim v. Ernst & ... within Hunt bases his on Law participant to a nish (1st Cir.1992), Ro per Young, ... be 956 F.2d 364 days request after (11th TRW, Inc., 979 Cir. or beneficia sen v. F.2d 191 sonally participant to such liable 1992), analysis we set up day in which endorsed the ry in the amount of to $100 Law, ERISA-plan par in Law.73In failure refusal.” forth date of such 1132(c).70 failing ticipant employer his former requires the administra sued ERISA alia, with, provide requested inter information about tor to fashion; description, timely plan summary plan in a docu updated latest report, designate to each in that case annual a statement ments did not the latest employer ac After re indicating total benefits former administrator. crued, viewing question, “other documents instruments company that “acted operated.”71 See First held if the plan is established or Circuit 104(b)(4), 105(a)(1), respect plan §§ as the administrator in to dis ERISA 1025(a)(1). 1024(b)(4), plan imposition concerning of of information §§ semination benefits, may properly the district it be treated as such penalty is committed to this 502(c), purposes liability provided 29 for court’s discretion. ERISA 502(e) 1132(c). Law, 373; at see ].” 956 F.2d [section U.S.C. [Plan],” disclosing Although to receive the and a statement the number 68. Hunt is not entitled his in one full applications total value of lump-sum payment, accrued benefit filed since he remains we assume that January 1991. lump-sum option eligible to elect the modified all other sim- available under Document 91C like ilarly 502(a)(1)(A) par- empowers 70. Section of ERISA pilots Eastern shut- situated affected “[or ticipants and to sue the relief beneficiaries down and moratorium. subsection(c) provided [section 502].” for in 1132(a)(1)(A). 29 II.A, dispatched part supra, stated in Hunt As allegedly response to Eastern’s four letters 4, 1991, pilots. alternative, February all Eastern letter to argued In the the TAC that 15, 1991, Dyer of Hawthorne His March letter to request requires ERISA did not information that pension. inquired His about the status of his provide. district an administrator court, Like the requested the March letter to O’Connor ruling we maleeno on this issue. account and most current statement of his for the Plan most recent financial statement parts again supra I.D We 72. See and III.C. note July “showing 15, 1991, His [its] assets and liabilities.” merely that discussion in III.C assumes our Dyer requested a statement letter argument as for the sake of that the TAC served copies position application,” TAC's on "the his course, Of the Plan Plan administrator. neither benefits, affecting his all amendments to provides legitimate the record basis for nor appli- deny explanation if the TACwere assumption. making that address, cation, name, the forms necessary Dis- file a with the Pension claim that, circuits have for the 73. Other concluded pay his pute if TAC decided not to Board statutory penalty apply, the administrator was sent to letter also benefit. This entity designated plan so in the must be August of the TAC. His the then-chairman UOP, See Jones v. 16 F.3d 144- copies documents. requested letter O'Connor Ins., (7th Cir.1994); Sentry [Plan],” McKinsey v. 986 explanation of 45 to the "amendments (10th Cir.1993). right 404-05 to amend F.2d whether the TAC "had the (“We Rosen, past, at agree 193-94 also F.2d retains administrative authori- ty reasoning the First over all provisions with the Circuit and of the [Plan].”75 company if is administrating Consequently, we hold that responsi- Eastern retained its bility plan, then it can held liable for under the Plan to information violations, regardless provi- plan ERISA such as summaries and annual state- document.”) plan 2.5, sions of the participants. §§ Law ments to all 2.6. court further reasoned that to refrain from Second, Hunt’s claim fails because he mis- imposing liability entity simply such an on interprets simple Eastern’s instructions to all plan because it is not administrator named February in its letter. remedy Congress “would cut off the intended argues letter, in his that brief Law, to create.” F.2d at 373. Finding which was printed sent Eastern and plethora showing “a that evidence” Eastern stationery, that indicated the “TAC company provision had of in- “controlled authority designated by the Plan formation,” 372-73, id. at the First Circuit Administrator for dissemination informa- judgment for affirmed the lower court’s letter, tion regarding the This short [Plan].” statutory penalty. at 374. In reaching Id. however, “[questions that regarding stated conclusion, emphasized court two temporary moratorium should be ad- (1) particular: company, facts added); (emphasis dressed to the [TAC]” documents, according plan still exer- representation made no the TAC was cised considerable control over adminis- responsible now providing plan summar- (2) tration; plaintiffs requests that the ies, amendments, statements, annual and oth- eventually for information were answered participants.76 er such information to Fur- company employees company stationery. thermore, exception of the TAC’s Id. at 373-74. responsibilities peri- as administrator of the Although Hunt his brief that states odic-payment options, and loan the record is delegated, “Eastern had and TAC had as- showing devoid of evidence that the TAC had sumed, Administrator,” role of regarding assumed of Eastern’s duties record demonstrates this statement provision participants. information First, patently inaccurate. discussed We therefore hold that Hunt has failed to III.C, parts supra, I.D the record makes support his contention the TAC func- exception periodic- clear that with the as tioned de Plan administrator and facto options, and loan which were added properly the district court declined to 25,1991,74 effective June retained its impose penalty pursuant on the TAC authority as of the Plan administrator at all 1132(c). 502(c), § § ERISA fact, July relevant times. In 1991 letter plan sent from the TAC to V. regarding periodic-payment op- loan above, unambiguously light tions makes this fact In we clear: REVERSE the judgment “The awarding Trust Administrative Commit- of the district court [Plan’s] $352,748.74 designated plus tee is Administrator of to Hunt from as both of costs the cof- (Counts IV).77 only. provisions these new As in fers of the II [Plan] Plan’s Fund for, participate by claiming period- negotiating Hunt did not to be either the Administrator ic-payment option, provid- selecting, or loan so this issue is not an administrative services however, germane Plan, TAC, charges his claim. er.” The as fiduciary, responsibility named for se- 75. This letter was sent TAC’s lecting and other investment advisors adminis- 10.2(c) § "[t]o to ... furnish provided personnel, trative service that the TAC Participants functions, actions, reports respect to the 2.9, 2.13(c),(d). §§ obtains ALPA's consent. See decisions of the [TAC] appropriate.” are reasonable and 77.Although gave judg- court the district VII, give ment on Count it refused to him the arguments pro- 76. Hunt’s this claim reveal a sought supra misunderstanding relief he in that count. See note 48 aspects found about basic Nonetheless, accompanying example, the Plan. For he contends that text. com- pleteness, judgment "TAC out further held themselves to be the Plan we reverse the court's 916 by judges action to ly performed of the district been decision

We AFFIRM —an equitable of a is nature. See the assessment recover benefits deny Hunt court 502(c) States, al., section et penalty under v. Central statutory id. See also Wardle Cir.1980). I). (7th (Count ERISA 627 F.2d 828-30 Although squarely cases have not ad- our concurring part COX, Judge, Circuit issue, allowed actions we have dressed part. dissenting ERISA to asserting claims for benefits under the court’s I dissent plans. solely against See proceed ERISA recovery that an action opinion that holds Group Springer Associates’ v. Wal-Mart 502(a)(1)(B) can- ERISA of benefits under (11th Cir.1990); Health 908 F.2d 897 solely against an ERISA not be maintained Iron Guy v. Southeastern Workers’ Welfare join I the remainder entity. plan as an (11th Cir.1989). Fund, Deci- 37 877 F.2d and, holding opinion, because the court’s explicitly circuits have held sions from other alternative hold- I is an from which dissent only may sue their ERISA that claimants reached in the result ing, I concur Computer Corp., v. Pertec plan. See Gelardi court. Cir.1985) (“ERISA (9th 761 F.2d 1324 view, an action to my ERISA allows In only against permits suits to recover solely against brought benefits to be recover ”); entity .... and Lee v. the Plan as an appropriate entity, with plan an ERISA (2d Cir.1993) Burkhart, 991 F.2d 1009 judgment against money including a relief Gelardi). (quoting clearly states that plan. The statute plan may sue or be employee benefit “[a]n short, majority’s holding In that one entity.” subchapter as an 29 sued under seeking to recover benefits under ERISA 1132(d)(1). then de- The statute U.S.C. solely plan plan proceed cannot suing plan. See mechanics of scribes the language of ERISA and runs counter (“Service summons, subpoena, or oth- id. prior supported is not our decisions. We upon a trustee or legal process of a court er proceed against have allowed such actions to plan employee benefit of an administrator administrator, plan plan both the and the constitute service capacity in his as such shall explicitly addressing the issue who without fi- employee plan.”). And upon the benefit v. proper is the defendant. See Marecek “[a]ny money provides that nally, the statute (11th Telecomm., 49 702 Cir. BellSouth F.3d subchapter against an judgment under 1995). allowed such actions to We also have be enforceable employee shall alon e — proceed against the administrator entity----” plan as an 29 against the again explicitly addressing without the issue. 1132(d)(2). Although the form Telecomm., Godfrey v. BellSouth 89 F.3d equitable money judgment, this relief (11th Marriott, Cir.1996); v. Kirwan Spivey, 632 F.2d relief. v. See Calamia (11th Cir.1994); Jett v. Blue Cross F.3d 1980). (5th A 1236-37 Cir. Unit Alabama, & Blue Shield 890 F.2d “[sjince Calamia, explained that the court (11th Cir.1989). But whether an action Congress power to entrust enforce- has solely against the may be maintained sitting as in rights to courts ment of new administrator, plan and both the determining legal step in equity, the first administrator, presented are issues such as equitable [a nature of action by this case. the intent of is to examine benefits] claim for (citation omitted). Congress.” Id. at 1237 unclear, to be Finding congressional intent how similar actions were looked at

the court merger equity. law and

treated before doing, the court concluded id. In so of the arbi-

that —because

trary capricious has traditional- standard judgment Counts II and IV. the court’s

Counl VII as well as

Case Details

Case Name: Hunt v. Hawthorne Associates, Inc.

Court Name: Court of Appeals for the Eleventh Circuit

Date Published: Aug 5, 1997

Citation: 119 F.3d 888

Docket Number: 95-2078

Court Abbreviation: 11th Cir.