Mаrgaret A. LIPKER, Plaintiff-Appellee, v. AK STEEL CORPORATION, Defendant-Appellant.
No. 10-5298.
United States Court of Appeals, Sixth Circuit.
Decided and Filed: Oct. 31, 2012.
Rehearing and Rehearing En Banc Denied Jan. 4, 2013.
699 F.3d 923
Before: BOGGS and McKEAGUE, Circuit Judges; GOLDSMITH, District Judge.
McKEAGUE, J., delivered the opinion of the court, in which BOGGS, J., joined, and GOLDSMITH, D.J., joined in part. GOLDSMITH, D.J. (pp. 933-36), delivered a separate opinion dissenting from Section II.D of the majority‘s opinion.
McKEAGUE, Circuit Judge.
When plaintiff Margaret Lipker‘s husband died, she applied for surviving spouse benefits under the pension benefits plan administered by his former employer, AK Steel Corporation. Her application was granted, but her monthly surviving spouse allowance was considerably smaller than she had expected. Lipker filed suit to recover plan benefits in the amount she believed she was entitled to. The discrepancy between her expectation and the actual award hinges on the interpretation of plan language that both parties argue is unambiguous, yet each party interprets differently. The district court approved Lipker‘s interpretation and ordered AK Steel to award her benefits accordingly. On de novo review, we find AK Steel‘s proposed interpretation of the plan language to be truer to its plain meaning when read with reference to the law it expressly refers to. Therefore, and for the reasons more fully set forth below, the district court‘s judgment for plaintiff must be reversed.
I. BACKGROUND
Plaintiff Margaret A. Lipker is the surviving spouse of Frank P. Lipker, a thirty-nine-year employee of defendant AK Steel Corporation at its steel production facility in Ashland, Kentucky. Frank Lipker retired on January 31, 1999. When he died on September 7, 2008, he was receiving a monthly pension benefit of $1,386 under the AK Steel pension plan. Shortly thereafter, plaintiff Margaret Lipker applied for the surviving spouse benefit under the AK Steel plan. She was advised that under the terms of the Pension Agreement Plan,
AK Steel made inquiry of the Social Security Administration (“SSA“). AK Steel was initially advised by form response that plaintiff‘s monthly widow‘s benefit would be $458. This response was changed by the SSA three weeks later, stating the widow‘s benefit would be $1469, without any explanation for the change evident in the record. On the basis of this corrected amount, AK Steel calculated that 50% of Frank Lipker‘s pension benefit, $693, reduced by 50% of plaintiff‘s social security widow‘s benefit, $734.50, resulted in a negative balance, thereby triggering the $140 minimum benefit under the AK Steel Pension Agreement, § 4.3(d).
Separately, however, plaintiff had received a statement from SSA indicating her social security widow‘s benefit would be $458.50, in addition to her own “earnings record” benefit of $1,010.90, thus yielding one monthly social security benefit payment in the amount of $1,469.40. This was followed by another letter from SSA showing the widow‘s benefit amount to be $485 and plaintiff‘s retirement benefit to be $973, yielding a total monthly social security benefits payment of $1,458. On this basis, plaintiff calculated that when 50% of the $485 widow‘s benefit, $242.50, was subtracted from $693, she would be entitled to a monthly surviving spouse benefit of $450.50 under the AK Steel Plan. Plaintiff objected to AK Steel‘s calculation and asked for an explanation. She received a letter explaining AK Steel‘s calculation (as set forth above), but not explaining the discrepancy between the different widow‘s benefit amounts reported by SSA. AK Steel also sent a copy of the pertinent provisions from the Pension Agreement and directed plaintiff‘s attention to § 4.3(d):
Commencing with the first Surviving Spouse‘s Benefit payable after the surviving spouse attains the age at which widow‘s or widower‘s benefits are first provided under a law referred to in Plan § 1.24 [e.g., as relevant in this case, the
Social Security Act ], the amount of the Surviving Spouse‘s Benefit otherwise payable for any month shall be reduced by 50% of the widow‘s or widower‘s benefit to which the surviving spouse is, or upon application would be, entitled for such month based on the law in effect at the time the Surviving Spouse‘s Benefit first becomes payable (without regard to any offset or suspension imposed by such law). If the surviving spouse is not eligible for such a widow‘s or widower‘s benefit for such month, the amount of the reduction shall be equal to 50% of the amount of the widow‘s or widower‘s benefit that could have become pаyable to the surviving spouse for such month, based on the Participant‘s wages, if the surviving spouse had been eligible and had applied for such a benefit.
R. 12, Attach. 8, Pension Agreement § 4.3(d), p. 37 (bracketed note and emphasis added).
This was followed by a letter from AK Steel further explaining that the language italicized above, “without regard to any offset or suspension imposed by such law,” represented the key to understanding the discrepancy. The letter explained that the base amount of the social security widow‘s benefit is derived from a calculation beginning with the deceased husband‘s wages. The letter further explained that that amount, eventually identified by SSA to AK Steel as $1,469, without any offset for any other benefit that the widow may be entitled to under the
It was this practice, ostensibly, that led SSA to initially report plaintiff‘s widow‘s benefit to both plaintiff and AK Steel as $458. Hence, according to AK Steel, the $458 figure represented only the remainder of the entire widow‘s benefit, $1,469, after offset for, or reduction of, plaintiff‘s own old-age retirement benefit, $1,011. However, the form on which SSA was asked to disclose plaintiff‘s widow‘s benefit, consistent with the “without regard to” clause in § 4.3(d), expressly called for an amount “based on retiree‘s earnings only and irregardless of widow‘s or widower‘s earnings.” Thus, according to AK Steel, the subsequently reported figure, $1,469, represented the correct widow‘s benefit amount to insert into the § 4.3(d) formula in AK Steel‘s Pension Agreement.
Plaintiff was not satisfied with this explanation. Insisting that SSA had reported to her that her widow‘s benefit was $485 and her retirement benefit was $973, she requested review by the AK Steel Benefit Plans Administrative Committee. Plaintiff‘s appeal was denied on May 12, 2009, based on the same reading of § 4.3(d) of the Pension Agreement and the same use of the $1,469 figure supplied by the SSA in the § 4.3(d) formula.1
Plaintiff filed this action for recovery of plan benefits in the Boyd County (Kentucky) Circuit Court. Defendant AK Steel removed the action to the United States District Court for the Eastern District of Kentucky as preempted by the
II. ANALYSIS
A. Standard of Review
The parties are in agreement regarding the standard of review. This court reviews de novo the district court‘s
B. Plan Language
The relevant plan language is confined to a single provision, § 4.3(d). See p. 926, supra. In this provision, the meaning of two terms is at issue: (a) “widow‘s benefit,” and (b) “without regard to any offset imposed by law.” On its face, neither of these terms can be said to have a “plain meaning.” Yet, neither term is used in such a way as to be understood in a vacuum. Both terms are used with express reference to a law. The only law implicated under the facts of this case is the
Hence, AK Steel appropriately urges us to consult the
With the benefit of this statutory bаckground, the terms of § 4.3(d) become intelligible and unambiguous. It seems clear, consistent with AK Steel‘s position, that the “widow‘s benefit” amount to be plugged into the § 4.3(d) formula, “without regard to any offset imposed by law,” is $1,469. AK Steel‘s construction and application of § 4.3(d) thus appears to be correct.
Plaintiff‘s arguments in support of her construction of § 4.3(d) as yielding a widow‘s benefit amount of $458 in spite of the light shed by the above statutory provi-
The record is devoid of explanation for SSA‘s correction of the widow‘s benefit amount. This is unfortunate. Yet, our review, like the district court‘s, is confined to the administrative record.2 In the present record, the accuracy of the $1,469/$458/$1,011 figures is not really in controversy. These are substantially the same figures initially reported by SSA to plaintiff in September 2008. The dispute actually revolves around determining what labels apply to these figures and how the figures relate to each other under the
Second, plaintiff challenges AK Steel‘s application of the “without regard to any offset imposed by law” clause. She contends the clause does not come into play because § 402(e) of the
C. District Court‘s Analysis
Plaintiff urges the court to approve the district court‘s decision without regard to the
Commencing with the first Surviving Spouse‘s Benefit payable after the surviving spouse attains the age at which widow‘s or widоwer‘s benefits are first provided under a Public Pension, the amount of the Surviving Spouse‘s Benefit otherwise payable for any month shall be reduced by 50% of the amount of the widow‘s or widower‘s benefit to which the surviving spouse is, or upon application would be, entitled for such month based on the law in effect at the time the Surviving Spouse‘s Benefit first becomes payable (without regard to any offset or suspension imposed by such law) and based upon the benefit payable to such person as a widow or widower without regard to any benefit earned in her own right.
Id. at *4 (emphasis added). But for the italicized language, the above provision is materially identical to § 4.3(d). Unfortunately for plaintiff, the italicized language played a leading role in the Patrick court‘s reasoning.
The above provision contains two “without regard to” clauses, but the Patrick court did not parse them specifically or attempt to ascertain how they harmonize with or complement each other. As to the former clause, the Patrick court, like the district court here in Lipker, did not consult the law providing the claimants’ public pension widow‘s benefits and did not inquire whether the law imposed any offset. Instead, the court focused on the latter clause and concluded “the only reasonable interpretation is that ‘without regard to ...’ means to exclude any old age benefit earned by the widow or widower in her or his own right, prior to the deduction calculation.” Id. at *5. In other words, the court construed “without regard to” as meaning “excluding” any old-age benefit from the equation.
Viewing the latter clause in isolation, the Patrick court‘s construction is not unrеasonable. However, the latter clause succeeds a former clause, whose meaning seems to be directly contrary. As explained above, with reference to the very law referred to in this provision as well, the former “without regard to” clause, unlike the latter, does not exclude any old-age benefit from the equation, but actually serves to exclude any offset or exclusion of the old-age benefit imposed by law. In effect, then the former clause, by virtue of a double-negative, serves to include any old-age benefit in the equation. If the Patrick court had scrutinized the meaning of both clauses it would have confronted this apparent contradiction or ambiguity. Instead, the court side-stepped any dissonance between the two clauses by observing that its construction of the latter clause did not run afoul of the former because the exclusion effected by the latter was not imposed by law, but by the plan itself. Id.
What is clear about Patrick‘s reasoning is that it is premised primarily on construction of the latter clause language, language that is absent from and materially different from the language in § 4.3(d) of AK Steel‘s Pension Agreement. It follows that Patrick is factually distinguishable and has little persuasive value in evaluating AK Steel‘s determination of plaintiff‘s surviving spouse benefit under § 4.3(d). It also follows that the district court‘s exclusive reliance on Patrick as justification for awarding judgment to plaintiff and granting her relief was misplaced and erroneous.3
Finally, plaintiff contends that notwithstanding all of the above, AK Steel‘s decisiоn is wrong because its construction and application of § 4.3(d) conflicts with the terms of the governing summary plan description (“SPD“). The SPD defines the surviving spouse benefit simply as “50% of the participant‘s pension less 50% of the amount of widow‘s (or widower‘s) Social Security benefit or, if higher, a minimum benefit of $140 per month.” Thus, in relevant part, the SPD omits the “without regard to any offset imposed by law” clause found in § 4.3(d) of the Pension Agreement. This conflict, plaintiff contends, renders the clause unenforceable. The district court did not address this argument in its opinion.
Because employees rely on summary plan descriptions in making decisions about their future benefit needs, we have held that language in an SPD may control over any conflicting language in the employee benefit plan itself. See Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 850-51 (6th Cir. 2000).4 This does not mean, however, that an omission from the SPD will, by negative implication, be deemed to alter the terms of the plan itself. Sprague v. General Motors Corp., 133 F.3d 388, 401 (6th Cir. 1998). Silence in the SPD regarding a term the plan defines more explicitly does not make out a “conflict.” Id. “The reason is obvious: by definition, a summary will not include every detail of the thing it summarizes.” Id. “[W]hile a conflict exists where the summary plan description misleads or fails to state additional requirements contained in the plan document, ... there is no conflict where the plan document clarifies the summary‘s general language.” Mitzel v. Anthem Life Ins. Co., 351 Fed. Appx. 74, 80 (6th Cir. 2009) (citations omitted).
Here, application of these standards makes it clear that the asserted “conflict” between the SPD language and the terms of § 4.3(d) is really nothing more than an innocuous “omission.” The SPD refers to the “widow‘s Social Security benefit.” While the SPD does not expressly state that the widow‘s benefit referred to is “provided under a law,” as does § 4.3(d) of the Pension Agreement, the SPD‘s reference to Social Security implies the same meaning; it is not misleading. And when the
The omission of these two elements from the SPD is not misleading and the discrepancy between the language of the two provisions does not rise to the level of a “conflict.” The SPD‘s summary description is incomplete, in comparison with § 4.3(d)—as would ordinarily be expected—but is otherwise consistent with the Pension Agreement. Hence, there is no conflict between the SPD and the рlan such that the SPD definition of the surviving spouse benefit would control over the plan language. See also Sullivan v. CUNA Mut. Ins. Soc‘y, 649 F.3d 553, 557-58 (7th Cir. 2011) (citing CIGNA, 131 S. Ct. at 1876-80, and observing that “[a] participant who draws an unfounded inference from an omission from a summary plan description is not entitled to a remedy.“).5
E. Miscellaneous Arguments
The parties have presented various arguments regarding the intent underlying § 4.3(d) of the Pension Agreement. There is, however, substantially no extrinsic evidence of the parties’ intent. Nor is there any need to resort to extrinsic evidence, as § 4.3(d), construed in light of the pertinent § 402 provisions to which it refers, appears to be unambiguous, its meaning plain.6
Also unavailing is plaintiff‘s argument that AK Steel‘s construction and applica-
III. CONCLUSION
In sum, for the reasons set forth above, we hold that AK Steel‘s determination of plaintiff‘s surviving spouse benefit was and is correct and that the district court‘s judgment in favor of plaintiff Margaret Lipker must be REVERSED. The case is REMANDED to the district court for entry of judgment in favor of AK Steel.
MARK A. GOLDSMITH, District Judge, concurring in part and dissenting in part.
I agree with all but Section II.D of the majority‘s opinion. My disagreement concerns two issues. First, the majority engages in a legal analysis for a claim under
CIGNA was decided well after the district court issued its final judgment in this case. Where there has been an intervening change in law during the pendency of an appeal, this court generally must “apply the law in effеct at the time it renders its decision.” See Bradley v. Sch. Bd. of City of Richmond, 416 U.S. 696, 712, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974). Therefore, CIGNA must be followed in this case.
In CIGNA, the Supreme Court held that SPDs do not constitute plan terms for claims brought under
At the same time, however, the CIGNA Court suggested, in dicta, that relief under § 1132(a)(3)—which allows courts to grant “other appropriate equitable relief“—is available to redress injuries caused by an administrator‘s failure to provide accurate summary information. See CIGNA, 131 S. Ct. at 1878-82 (discussing whether § 1132(a)(3) provides relief to those injured by inaccurate summary language, and concluding that “[w]e doubt that Congress would have wanted to bar those employees from relief“).1
More importantly, the majority errs in summarily depriving Lipker of the opportunity to return to the district court to assert a claim for equitable relief under § 1132(a)(3). The majority does so because, in its words, “no such equitable theory is asserted in plaintiff‘s complaint, which expressly prays only for award of benefits under the ‘specific’ and ‘clear and unambiguous language’ of the plan.” Opinion at 931 n. 4.
It is true that Lipker did not expressly seek equitable relief before the district court.2 But her failure to do so is not surprising and certainly not unreasonable, as her right to do so was not apparent until May 16, 2011, the day CIGNA was decided, more than two years after this case was originally filed. Prior to CIGNA, SPD language was deemed plan language to the extent there was a conflict between the two. See, e.g., Edwards v. State Farm Mut. Auto. Ins. Co., 851 F.2d 134, 136 (6th Cir. 1988) (“This Circuit has decided that statements in a summary plan are binding and if such statements conflict with those in the plan itself, the summary shall govern.“). Further, § 1132(a)(1)(B) was utilized as the avenue for relief from injuries arising out of such conflicts. See, e.g., id.; Rhoton v. Cent. States, Se. & Sw. Areas Pension Fund, 717 F.2d 988 (6th Cir. 1983). Moreover, prior to CIGNA, there was significant uncertainty whether § 1132(a)(3) provided an avenue for relief based on such a conflict. See CIGNA, 131 S. Ct. at 1876 (noting that district court did not award equitable relief under § 1132(a)(3) because of Supreme Court cases that narrowed appliсation of that section). Only after CIGNA did it become clear that (i) § 1132(a)(1)(B) does not provide an avenue for relief from injuries stemming from conflicts between SPD language and plan language, and (ii) § 1132(a)(3) may well provide an avenue for such relief.
In situations where an intervening change-in-law during the pendency of an appeal renders an old theory untenable and a new theory viable, it is only fair to return the case to the district court for a determination, in the first instance, whether to permit the new claim to proceed. See Del Rosario v. King & Prince Seafood Corp., 432 Fed. Appx. 912, 913 (11th Cir. 2011) (affirming dismissal of claim for benefits under § 1132(a)(1)(B), but remanding “for reconsideration of the issue of whether a remedy exists under ... § 1132(a)(3), in light of the Supreme Court‘s decision in CIGNA“).
However, the majority refuses to do so here becausе “Lipker never pled below, has not argued in this appeal, and has not
The majority holds that it is not the role of the court to order sua sponte a remand for the purpose of allowing the district court to address an unasserted claim. See Opinion at 932 n. 5 (“The dissent‘s position misconceives our role.“). While I agree with the majority that courts generally should not raise issues and claims that were not raised by the parties, there are plainly extenuating circumstances here justifying a remand—namely, а significant change in the law (occurring after the district court proceedings and after the deadline for briefing on appeal) that created the possibility of a viable cause of action, previously viewed dubiously by the courts.
The power of an appellate court to remand sua sponte under circumstances that are just is well established and deeply rooted. See
There is, however, no rigid and undeviating judicially declared practice under which courts of review invariably and under all circumstances decline to consider all questions which have not previously been specifically urged. Indeed there could not be without doing violence to the statutes which give federal appellate courts the power to modify, reverse or remand decisions “as may be just under the circumstances.”
28 U.S.C. § 2106 . Exceptional cases or particular circumstances may prompt a reviewing court, where injustice might otherwise result or where public policy requires, to consider questions neither pressed nor passed upon below. The power to raise and decide question sua sponte is, however, to be exercised sparingly and with full realization of the restrictions and limitations inherent in its employment.Rather than considеr the matter sua sponte, of course, the appellate court may note the existence of the unargued, undecided question and remand the case to the lower court. This makes the
decision on the matter one reflecting the consideration of a trial court and the counsel in the case.
Id. at 462 (footnotes omitted).
Exceptional circumstances for a remand exist here where an unpled claim of questionable validity became viable on appeal because of an intervening Supreme Court decision. Given that there is no prejudice to AK Steel in ordering a remand to consider such a claim, it is well within the role of this court, as a court of justice, to see that Lipker receives a full opportunity to vindicate her rights under ERISA.
For all of these reasons, reversal of the district court should be accompanied by a remand for a determination whether Lipker can proceed on an equitable theory under § 1132(a)(3) in light of CIGNA. Because the majority opinion does not order a remand for this purpose and because of its failure to apply CIGNA properly, I must respectfully dissent from Section II.D of the majority‘s opinion.