*1 im- qualified concerning inquiries further the instant inappropriate
munity Leis, v. Summers
case. Cir.2004). the Court against militates logic
Similar Defendants- of the merits
addressing the Stated argument. judicata res
Appellees’ say Defendants-Appellees
succinctly, the Plain- judicata bars res doctrine because claim federal
tiffs-Appellants’ could action—-which court state federal Plaintiffs-Appellants
included prior the merits decided
claim—was of the instant resolution court’s district declined However, district
case. finding after argument address this to es- failed Plaintiffs-Appellants Because violation. a constitutional
tablish determination court’s affirm the
we not commit officers the defendant violation, finds Court
a constitutional merits to address
unnecessary argu- judicata res
Defendants-Appellees
ment.
IV. Conclusion reasons, Court foregoing
For the district the decision
AFFIRMS
court. Plaintiff-Appellee, HAUS, Ashton
W. LLC, CO., JACOBS
BECHTEL
Defendant-Appellant.
No. 04-6192. Appeals, Court States
United
Sixth Circuit. 31, 2006.
Argued: Oct. 21, 2007. June and Filed:
Decided *2 (1) the Health plans: benefit
employee Employees Welfare and Subcontractors LLC Company, Jacobs Compa- (“Plan I”), the Bechtel *3 Plan for Grandfathered Pension ny, LLC (3) Ja- II”), Bechtel (“Plan Employees for Plan LLC Severance Company, cobs (“Plan III”), Employees Grandfathered Baker, Day, Jones P. James ARGUED: Integration (4) Management and California, Appellant. for Francisco, San suit, IV”).1 (“Plan his In 401K Livingston, Smith, McMurry & D. Kerry court alleged Plaintiff-Appellee ON Appellee. Kentucky, for Paducah, bene- future rights to “clarify his should Baker, Stew- Craig E. P. James BRIEF: him deeming by four under the fits” Dаy, San Perkins, Jones H. art, Virginia plan pension certain receive to eligible Ker- California, Appellant. for Francisco, a limited to available only made benefits Pa- Livingston, & Smith, McMurry ry D. Bechtel classified employees group Appellee. Kentucky, for ducah, Employees.” Jacobs “Grandfathered MERRITT Before: in ultimately found The GWIN, Judges; BATCHELDER, Circuit holding Plaintiff-Appellee, of the favor Judge.* District to “Grandfathered is entitled Haus this reached The court status. Employee” of the opinion D.J., GWIN, delivered find- first only after conclusion, J., MERRITT, joined. court, in which plan adminis- Jacobs’ ing that the 567-74), BATCHELDER, delivered (pp. J. interpreting reasonably trator acted opinion. dissenting separate a to so requirements plans’ of a the status Plaintiff-Appellee deny OPINION Specifically, Employee.” “Grandfathered Judge. GWIN, District the Defendant- court held the district notwithstanding the eligible Appellant was action, Plaintiff-Appellee this ERISA determina- reasonable administrators’ (“Haus”) Defen- sued Ashton W. Plaintiff- because contrary to the tion Company, dant-Appellant, summary conflicting on relied Appellee to en- Jacobs”), seeking (“Bechtel LLC. (“SPD”). descriptions under four rights his clarify force clarify plan, or to * of this terms Gwin, under States United S. James Honorable under to rights his District of benefits the Northern future Judge for District plan; this terms Ohio, by designation. sitting participant, Secretary, or (2) by the under suit filed Plaintiff-Appellee 1. The re- appropriate fiduciary beneficiary or rele- 502(a)(1)(B), states which § title; section lief under part: vant beneficiary, or fiducia- (3) participant, by a bring civil ac- to (a) empowered Persons which practice (A) any act or enjoin ry tion subchapter or of this any provision violates brought— may A civil action (B) to obtain or plan, of the the terms beneficiary or participant (1)by a (I) address relief equitable appropriate in subsec- provided for (A) the relief any provi- (ii) to enforce violations section, (c) of this tion of the terms subchapter or the of this sions (B) due him benefits recover added.) (Emphasis plan. rights his enforce of the terms n With appeal, Defendant-Appellant Mr. job Haus left his on Lockheed Bechtel Jacobs seeks reversal of this deci- March began work with En- sion, (1) arguing that no conflict exists Corporation, tech a first-tier subcontractor summary plan descriptions Jacobs, to Bechtel April 2, 1998. Mr. plans, the Plaintiff-Appel- Haus continued to work Entech through lee is not entitled to benefits based purely July 1999, at point he transi- upon a violation of the summary plan de- tioned to another first-tier Bechtel Jacobs scription requirements disclosure subcontractor, Camp Dresser & McKee tained ERISA 1022. For the reasons Programs. Federal On July follow, we AFFIRM in part and RE- began direct employment with Bech- *4 VERSE part the decision of the district tel Jacobs.
court. Beginning with 13, a December 2000 letter sent to Bechtel Jacobs’ Human Re- I. Background sources Department, Haus repeatedly
Prior to the Spring 1998, the Plain- unsuccessfully sought to confirm his status tiff-Appellee worked for Lockheed Martin aas Grandfathered Employеe eligible for Energy Systems (“Lockheed”), which held the transition-related plans benefit created an operating contract with the United by the Defendant-Appellant. On March States of Energy perform 11, 2003, the Plaintiff-Appellee then initi- environmental management and enrich- ated the action, instant arguing that is a ment facilities work at the Paducah Gas- “Grandfathered Employee” and therefore eous Diffusion Upon Plant. the Depart- is eligible for the benefit plans. Each of ment of Energy switching operational four describe qualification their structure of the diffusion plant, Bechtel requirements for grandfathered status Jacobs took over as primary contractor somewhat differently, but parties both plant for the on April 1, part 1998. As agree that “[e]ach plan a shares common operational transition, the DOE con- requirement first ... which includes em- required tract Bechtel Jacobs to develop a ployment by LMES [Lockheed] on March plan which, transition among other things, 31,1998” and that the Plaintiff-Appellee provide would transitioned employees with satisfies requirement. that parties’ The the opportunity to participate in pension dispute therefore revolves around the plan and a health and welfare plan. plans’ requirement.2 second All four 2. Each shares a require- common first sition Eligible Subcontractor’s identified grandfathered status, ment for Plan, Staffing “H”, includes Exhibit "C" Ap- Form B employment by 31, 1998; pendix LMES on submitted pursuant require- 1, party neither disputes ments of that Mr. the DOE Contract approved satisfied and as provision. that Bechtel Company Jacobs Plans describe the LLC. second The term shall not eligibility qualification include a short term requirement or intermittent as fol- (A.R. position. 8-9, 2.22.) 1 at pg lows: Finally, Plan I "Eligible defines Subcontractor” as a 1. Health and Employees Welfare Subcontractor who employs at least one Bechtel Company Jacobs LLC and Subcontrac- Employee Grandfathered at the time the Sub- (Plan I) tors grandfathered defines a emplоy- contractor commences work under the DOE ee as an employee .[who] either [was] (A.R. 5, contract. pg 2.12.) Thus, 1 ac- subsequently employed by Bechtel Jacobs I, cording to Plan Mr. depends Haus’s status Company LLC or prior Subcontractor on whether his work with Entech and Camp 1, April 2000 for regular, work in a full-time Dressier was identified on "Staffing ” staffing plan position. It Plan, then defines “Staff- 'H', Exhibit 'C.' ing Plan Position” regular, as a po- full-time [J.A. 57-62.] Standard Legal II. worked to have an individual require sec- first- of its or one Rubber Tire & Firestone Under 1998, and subcontractors ond-tier 109 S.Ct. Bruch, 489 U.S. v.Co. Additionally, Plan 1, 2000. April (1989), denial “[A] 103 L.Ed.2d eligibility suggests language tains 1132(a)(1)(B) under challenged benefits sec- first- or awith employment requires novo a de standard under reviewed is to be specific engaged subcontractor ond-tier gives adminis the benefit unless areas. transition” “workforce authority discretionary fiduciary trator court, the to the district its brief In or to for benefits to determine (1) the De- argued Plaintiff-Appellee Here, the plan.” of the terms construe deny him decision fendant-Appellant’s Jacobs Plans found and ca- arbitrary status grandfathered fiduciary dis Defendant-Appel- administrators gave pricious sufficiently de apprise court’s a district “review We cretion. lant’s ben- relevant rights his standard regarding proper termination Defendant-Appel- response, plans. efit administra of a plan in its review apply the Plaintiff- disputed *5 Jacobs Bechtel lant Provi v. Hoover de novo.” decision tor’s (1) plan the claims, saying that Appellee’s Co., 290 F.3d Ins. Accident & dent Life determination eligibility administrator’s Cir.2002). (6th party Neither 801, 807 (2) and capricious arbitrary and was discretion give do not Plans the suggests corresponding the both Administrators. to the Plans of his Mr. Haus amply apprised summaries of Plaintiff- favor Finding in rights. discretion, we give When that al- held court district Appellee, arbitrary and deferential highly apply administrator plan Jacobs’ though Bechtel Hardy, Borda standard. capricious plans’ interpreting reasonably in acted P.C., F.3d Pollard, 138 Page, Lewis, & was Mr. Haus requirements, eligibility Cir.1998) (citation quo bеcause to benefits entitled nonetheless omitted). administra planA marks tation conflicting on relied Plaintiff-Appellee arbitrary deemed will not tor’s decision descriptions. plan summary re- the second version of provides another Pension Company LLC Jacobs 2. Bechtel i.e., status, II) an (Plan grandfathered for quirement Employees Plan Grandfathered for by employed re- subsequently of second was definition employee who a different offers Accord- status. second-tier grandfathered or for or its quirement Contractor first-tier Employee is II: a ing to Grandfathered the Contract Plan work Subcontractors for employed, after 2.) iswho Ill (A.R. pg an individual Plan 1, 4 April prior to 2000, 1, by a Com- 31, April before 1998 and Con- simply the DOE defines "Contract” Energy Con- Department U.S. pany under defini- tract, (id.), relevant no other and offers II defines Plan DE-A05-980R22700. tract [J.A. 70-71.] tions. Company LLC Jacobs as Bechtel "Company” 401 K Plan Integration 4.Management subcontractor, second-tier any or first-tier contain IV) does not (Plan The record En- U.S. mеaning within for SPD IV. The language for Plan plan actual that au- DE-ACO5-980R22700 ergy Contract eligibility as IV, indicates Plan LLC Company Jacobs by Bechtel thorized requires “[t]he employee grandfathered participate in Committee delegate or the its employed subsequently was either individual Plan, participate elects to and that or its Company LLC first-tier Employees.... eligible of its on behalf Plan work under Subcontractors second-tier for 64-65.] [J.A. 1, April 2000 prior to Contract this LLC Severance Company 3. Bechtel Jacobs III) (Plan 76.] [J.A. Employees Grandfathered for capricious long so possible as “it is only available to “grandfathered employ- offer a reasoned explanation, on based ees.” plan Each qualifica- describes the evidence, particular for a outcome.” tion requirements Davis grandfathered status v. Ky. Plan, Fin. Cos. Ret. 689, differently, party neither disputes that (6th Cir.1989) (noting that plan “[t]he “[e]ach arbi- shares a common first re- trary and capricious quirement standard is the ... least which includes employment demanding judicial review”). form LMES [Lockheed] March 1998”
nor that the Plaintiff-Appellee satisfies III. Analysis this requirement. Accordingly, the issue before the Court here revolves around the With appeal, Defendant-Appellant second requirement grandfathered sta- Bechtel Jacobs argues that the district tus. court erred in finding that the Plaintiff- Appellee respect With entitled eligibility second benefits under the prong, relevant the language benefit plans contained in each notwithstanding the somewhat, fact differs although Bechtel Jacobs’ contrary require- inter- pretation ments in Plans II-IV are eligibility extremely requirements simi- lar. Textually the plans reasonable. Specifically, require Defen- individual to dant-Appellant argues that worked for Ja- cobs or one of erred in holding that first- or the Plaintiff- second-tier Appellee subcontractors entitled to April benefits based upon 2000. Additionally, conflicting Plan I language in the contains lan- summary guage that descriptions, suggests that arguing no re- *6 quires fliсt employment exists between with first- summary plan de- second- scriptions tier plans, and the subcontractor engaged specific in Plain- tiff-Appellee “workforce is not entitled transition” areas. Neither benefits II, III, Plan purely based Plan upon a nor Plan violation IV contain of the sum- mary plan comparable language. description Nonetheless, require- disclosure ments Defendant-Appellant contained in interpreted has 1022. We each address include this basis for more restrictive second court’s eligibility decision prong. and the Defendant-Appellant’s ar- guments below. In evaluating Defendant-Ap pellant’s creative interpretation of Plans Validity A. of Defendant-Appellant’s II-IV’s eligibility criteria, the district Interpretation Eligibility Plan court clearly articulated its belief that such Requirements an interpretation strained the plain mean an matter, As initial we consider wheth- ing of plans’ Nonetheless, text. er the district court erred in grudgingly district court ultimately found that the De determining that the Defendanh-Appel- fendant-Appellant’s interpretation was lant’s interpretation of the four plans’ eligi- reasonable since extrinsic in evidence bility criteria was reasonable under the record indicated that “the narrower defini applicable arbitrary and capricious stan- tion in found Plan I was the one Bechtel dard of review. Plaintiff-Appellee Department of Energy meant to claimed entitlement to retirement benefits employ when dealing with the various sub under four Bechtel plans. Jacobs The dis- contractors.” Although the agrees Court pute here revolves around the eligibility that an ERISA administrator’s interpreta requirements under plans, which are tions are entitled to deference, substantial DE-A05- Energy Contract in- Defendant-Appellant’s that find we requires em- Plan III also requirements 980R22700.” eligibility terpretation sub- or second-tier with a first- ployment unreasonable. II-IV in Plans the Contract “work under contractor that I, requirement Plan Even 2000,” “Con- and defines April prior employment requires status grandfathered with no DOE Contract simply the tract” as subcontractor second-tier a first-or Similarly, Plan definitions. relevant is less other areas” transition “workforce specific during the employment specify, requires only does IV I’s text clear. than “Bechtel be em- either must employee period time relevant full-time regular first-tier or in a or its Company “for work LLC ployed turn is position,” under staffing plan for work Subcontractors second-tier position full-time regular, “... a defined Contract.” Subcontractor’s Eligible on an identified crite- eligibility I’s that Plan arguing ‘H’, Form B ‘C’ Plan, Exhibit Staffing Defen- plans, the all four applies ria ...”1 Appendix re- that the says dant-Appellant language, no similar contain II-IV Plans II-IV are in Plans contained quirements employee that an at most requiring adminis- and that ambiguous somewhat DOE under for work employed ambi- resolving that interpretation trator’s disputes nowhere Appellant tract deference. substantial is entitled guity the DOE contract.3 worked Corp., 26 Quantum Chemical See that “a Grand- Wulf states Plаn II Specifically, Cir.1994) (“The Lan- who is anis individual Employee fathered two subject to if it is ambiguous guage 31,1998 before after March employed, agree We interpretations.”). reasonable under U.S. by Company April Paducah, working in He was Appellant: our characteriza- disagrees 3. The dissent your honor. Kentucky correct that's po- record, stating "Bechtel's of the tion Depart- under the overall Court: Wasn't Mr. Haus’ em- along been has sition Energy? ment of not fall CDM with Entech ployment " Appellant: Yes. *7 course, But, we contract.’ 'under working as a he then Wouldn't Court: whether the issue face instead un- a subcontractor subcontractor support separate each documents for energy con- department of der overall claims the While position. tract? Plan I’s includes contract” phrase “under true, Well, but ... I think that's Appellant: criteria, eligi- stringent eligibility more Argument at Transcript of Oral [Recorded found are nowhere bility requirements 6:18.] II, III, important, Bechtel More or IV. Plans argu- portion of оral During the rebuttal Haus's contract what other explains never length, the ment, at quotes dissent which op- they not did under if operated employers omission away from Appellant backed contract umbrella Jacob’s erate statements, both saying contradictory with has Energy. Bechtel Department of regarding silent the record work performed Haus denied never work at subcontractor Bechtel's whether by Paducah, Kentucky covered site Paducah, Kentucky not controlled site Indeed, at oral contract. umbrella Jacob’s DOE; (2) Bechtel’s with the contract Appellant admitted argument work engage in non-DOE do subcontractors only one contract: however, did Coun- point, At no at that site. argue that Mr. Appellant working at the for the sel [Haus] he Wasn’t Court: blanket covered work performed not of En- facility that the same only contract, ultimately the DOE your Client ergy contracted inquiry. relevant run? that ERISA administrators entitled to contract covered the work performed. deference, substantial but find that no am- It is possible that work not covered by the biguity exists regarding re- blanket DOE contract took place at the quirements conveyed by the text in Plans Paducah, Kentucky site, but if it did the II-IV. No language any plan other than record silent on point. specific Plan mentions “workforce transi- Moreover, this issue is largely beside Indeed, tion areas.” no language in Plans point as the crux of Bechtel’s argu- II-IV even hints at such a requirement. ment has never been that Mr. Haus was Accordingly, we find that the Defendant working under either mysterious some Appellant’s application of Plan I’s strin- non-DOE contract or a but distinct uniden- gent eligibility requirements each tified DOE Rather, contract. the Defen- any text that even remotely —absent danb-Appellant argues any sup- —without supports such a conclusion—is arbitrary port in the record —that eligibility under capricious. four requires a showing that an The dissent disagrees with this determi- performed individual specific type of says nation and that the Court’s reviеw of work under the blanket DOE contract. the Defendanb-Appellant’s eligibility de- The dissent considers textually- termination this case is more searching strained interpretation valid. We disagree than is allowable under the applicable and therefore find the Defendant-Appel- standard of review. Given that the docu- lant’s interpretation of Plans II-IVs’ eligi- ments for each separate plan completely bility requirements arbitrary and capri- fail to support Bechtel’s contention that cious.
Haus’ employment with Entech and CDC did not fall under the contract, DOE B. we Conflict Summary Between only can assume that the dissent Descriptions would and Plans object to any review failing to rubber- In challenging the district court’s judg- stamp the Plan Administrator’s eligibility ment, Defendant-Appellant Bechtel Jacobs determination. We would respectfully argues that no conflict exists between the suggest that some meaningful review is relevant benefit and their corre- only allowable, required. sponding summary plan descriptiоns. Be-
The dissent particularly objects to our
cause the Defendant-Appellant’s interpre-
observation,
part
based in
upon state-
tation of Plans II-IV was arbitrary and
ments made at
argument,
oral
capricious, we need not discuss
whether
Defendant-Appellant
concedes that Mr.
conflict did in fact exist between those
performed
work under the blanket
*8
plans and their respective summary plan
contract,
DOE
identified in the plan mate-
descriptions. The accuracy of the Defen-
rials as DE-A05-980R22700. Specifically, dant-Appellant’s argument
is nonetheless
the dissent points to an exchange during
significant with respect to
Plan
because
rebuttal argument
support
to
the proposi-
this Court has previously held that where
tion that
may
Mr. Haus
performed
statements made in summary plan descrip-
work at
Paducah,
the
Kentucky site not
tions conflict with statements made in the
by
covered
the blanket DOE contract. At plans themselves, the summary plan de-
best, however, the exchangе
by
cited
the
scriptions are controlling. Edwards v.
dissent makes clear that there is no evi- State Farm Mutual Automobile Insur-
dence in the record to refute the
ance, Co.,
Plaintiff-
(6th
851 F.2d
136
Cir.1988);
Appellee’s assertion that the blanket DOE see
Helwig
also
v. Kelsey-Hayes Co., 93
93-533,
Cong.,
93rd
H.R.Rep. NO.
Edwards,
lets.”
Cir.1996).
the
U.S.Code
in 1974
Sess., reprinted
2d
employee
deny an
to
sought
Defendant
4639, 4646.
& Admin.News
Cong.
relatively
a
through
disability benefits
eligibili-
the
of
application
straightforward
Defendant-Appel
appeal,
With
plan.
actual
in the
contained
criteria
ty
Ed
that
contends
lant
directly conflicted
criteria
that
Because
con
no
because
here
inapplicable
is
wards
contained
information
eligibility
the
with
the relevant benefit
between
exists
flict
description,
summary plan
summary
corresponding
their
plans and
deny
not
could
Defendant
that
we held
Ja
Specifically,
descriptions.
plan
because
disability benefits
Plaintiff
textual conflicts
although
argues that
cobs
bind-
plan are
summary
in a
“statements
no
plans,
conflict
the four
exist between
do
with
conflict
statements
if such
ing and
its
plan and
any individual
exists between
summary shall
itself, the
plan
in the
those
description.
plan
summary
corresponding
at 136.
851 F.2d
govern.”
efficacy of
not address
need
Court
The
argument
Defendant-Appellant’s
our deci
underlying
principle
ad
II-IV,
that the
given
Plans
respect to
summary plan
Edwards,
and
sion
of those
interpretation
ministrator’s
in ERISA
contained
obligations
disclosure
case,
in this
capricious
arbitrary and
fair
ultimately
pragmatic
one
is
§
face
on its
that
note
nonetheless
we
a
distributes
employer
an
ness. When
misplaced.
appears
argument
an
such
an
summarize
to
purports
that
document
in
to
II-IV
Plans
interprets
one
WTiere
information,
lay bene
benefit
employee’s
stringent
more
I’s
clude Plan
rely on
to
be able
logically
ficiary should
De-
necessary for the
requirements —as
combing
than
rather
summary
Plaintiff-
to exclude
fendanti-Appellant
incomprehensible
nearly
often
through the
in the
participation
from
Aрpellee
—a
summary plan
Accordingly,
plan itself.
each
exists
conflict
clear
calculated
in a manner
“written
be
must
descrip
summary plan
interpreted
partici
average
understood
implicates
Moreover,
a conflict
such
tion.
accurate
sufficiently
...
pant,
addressed
concerns
same
apprise such
reasonably
comprehensive
in Edwards.
Court
their
beneficiaries
participants
requires
explicitly
§ 1022
plan.”
obligations
rights
descrip-
summary plan
craft
employers
employer
1022(a)(1).
Wfiiere
§
U.S.C.
par-
...
“reasonably apprise
so as
tions
obligations
the disclosure
satisfy
fails
rights
and beneficiaries
ticipants
such that
in section
contained
U.S.C.
plan.”
under the
obligations
summary plan
in a
contained
information
“a sum-
Moreover, although
1022(a)(1).
in conflict
description
of the
detail
every
‘include
mary need
courts
itself,
logical
it is
underlying
summarizes,’ the
thing
summary plan.
the terms
enforce
in the
items
important
include
should
comports with
Moreover,
a rule
Aegon Insurance
Coleman
summary.”
ERISA, which
underlying
intent
legislative
(W.D.Ky
F.Supp.2d
Group, 71
grossly unfair
*9
that,
“[i]t
clear
makes
Motors
v. General
1999)
Sprague
(quoting
acts
for
accountable
employee
hold
(en
Cir.1998)
F.3d
Corp., 133
benefits, if he
from
him
disqualify
Corp.,
Xerox
Layaou
banc));
also
see
acts,
ifor
these
these
knowledge of
no
Cir.2001)
(2nd
(“employ-
misleading or
in a
stated
were
conditions
as
the SPDs
rely on
entitled
book-
ees
in
manner
incomprehensible
primary
their
source of information about
respect
With
I,
to Plan we find no indi-
benefits.”)- Here,
their
the summaries for
cation that the
SPD
Plan I was includ-
Plans
seemingly
II-IV
fail to meet these
ined
appendix
in
appeal
this
or was
requirements given the sharp conflict be-
included in the record before the district
tween their language and the Defendant-
court. Because
precludes
this
from
us
Appellant’s interpretation of the Plans.
determining
whether
conflict existed be-
As
Edwards,
we noted in
where a conflict
tween Plan I’s eligibility requirements and
exists between the information containеd
summary
descriptions,
the Court va-
in a summary plan description and the
cates and remands to the district court for
itself,
the resulting ambiguity severe-
review of Plan I’s SPD to determine
ly
disadvantages
participants.
In-
whether
conflicts with that Plan.
deed, in Edwards we noted that the Defen-
dant “should have realized that
explicit
§
C. ERISA 1022
language of the summary could or would
have caused [the Plaintiff] and similarly
Finally,
the Defendanb-Appellant
situated unsophisticated lay employees to
argues that this Court should reverse the
rely upon
employer’s]
[the
inadvertant [sic] district court’s holding that a violation of
misrepresentation
to their detriment.”
ERISA 1022’s
obligations
disclosure
can
Edwards,
Although the instant case differs some- reject argument first because the dis what from Edwards in that the language trict court simply never articulated such a contained in Plans respec- II-IV rule. To the contrary, the tive district court similar, summaries are the conflict expliсitly relied on Edwards as between the the basis Plans as interpreted and their decision, for its although it did corresponding note that presents summaries the ambiguity same dangers between the described respective above. Just inas Edwards, Plans made the injury to the Defendant-Appellant Plaintiff- should Appellee have realized even lay grievous.” “more beneficiaries such The am Mr. Haus rely biguity would on the language the four plans’ respective tained the plan summaries definitions distributed term grandfathered em by Bechtel Moreover, Jacobs. ployee undoubtedly Ed- did create confusion wards Mr. Haus did indeed rely on the Plaintiff-Appellee and lay summary plan descriptions to his beneficiaries, deter- but did not serve as the basis ment both in agreeing to terminate his for the district court’s decision. Addition employment with Lockheed on ally, argument is also without force as 1998, and in failing to investigate whether to Plans in light II-IV of this Court’s his employment with a Bechtel Jacobs’ holding that the plan administrator’s inter subcontractor qualify would him for bene- pretation of arbitrary fits under respective plans. such, As capricious. such, As again reject we even if the administrator’s interpretation Defendant-Appellant’s argument. with respect to Plans II-IV had not been arbitrary and capricious, the Plaintiff-Ap- IV. Conclusion
pellee likely would prevailed based upon the conflict between those plans as For the foregoing reasons, this Court interpreted and their respective summary in part AFFIRMS REVERSES plan descriptions. part the decision of the district court. *10 “transition implement a and develop to tel BATCHELDER, Circuit M. ALICE incumbent work- LMES’s by which plan” dissenting. Judge, or Bechtel to be transferred would force I view the because separately I write subcontractors, April effective first-tier its does, majority differently than record to entitled were employees 1, These 1998. law, I con- to the due adherence and with (i.e., benefits of accumulated continuation in error was the district clude pension, certain under “grandfathering”) Acсord- reversal. warrants error and that severance, k plans. or 401 healthcare, dissent. respectfully must I ingly, meant status” “grandfathered This began employees transitioned these when I. (i.e., employers their new with employment Haus 1998, Ashton 31, W. March Until subcontractors, first-tier or Bechtel Sys- Energy Martin Lockheed for worked (1) CDM): these tran- Entech and as Padu- (LMES), operated tems participate would employees sitioned Plant Diffusion Gaseous (Kentucky) cah or a than rather plans, transition with contract a under employer; new offered 1998, the 1, (DOE). April On Energy with LMES time service accumulated Bechtel and expired contract LMES-DOE transition those toward credited be would as LMES replaced LLC Company to accu- continue (3) they would and plans; Environmen- under contractor primary transition under the benefits mulate DE-AC05- No. Contract Management tal discontinuation no had been if there i.e., 12/18/97), “the (U.S. DOE 980R22700 (i.e., they would LMES with employment excerpts in to the According contract.” at zero accumulating benefits start not spe- describes record, contract plan). into new forced Bechtel services environmental cific of its at several to DOE provide admission, Haus would Mr. volun- own By his Gaseous Paducah facilities, including the 31, on LMES from resigned tarily Plant. Diffusion with position preferred 1998, take a therefore, part of not was, Entech, began work 1998, Haus Mr. April On two During his Bechtel, program. transition subcontractor a first-tier with 1,1998 to (April CDM years at Entech therefore, not transferred on not work did 2000), Haus Mr. July his coworkers payroll, as not part and was projects for one first-tier former-LMES worked Mr. been. therefore, he program, anoth- transition (Entech then Corp.) and contractor the transi- participate McKee) sought to gain- before never & (Camp Dresser er time towards accumulate on plans, Bechtel tion with employment ing direct to be classified asserted, plans, re- those has July 2000. Mr. employee. grandfathered very outset LMES and from peatedly to Bechtel: email in an did Haus, stated Entech Mr. dispute (i.e., work any former-LMES I on perform not transition for 4/1/98. eligible projects) environmental tier subcon- st particular for BJC worked then and, although CDM un- contract I do not BJC. this DOE for tractor, and now former-LMES certain perform credit receive not assume I can why derstand actually work prior Haus did LMES projects, spent time himself. now projects subsequent time 4/1/98 ask- I am not by BJC. employed LMES, spent from over took When work- while earned credit time ing Bech- required contract Bechtel-DOE *11 ing with subcontractors, tier 1st I am sued court, federal district pur- only asking for years employed %. suant to § 502(a)(1)(B), 29 U.S.C. (and LMES and now the 6 months 1132(a)(1)(B). § In his complaint, he counting) spent with BJC. urged the court to declare him a “grandfa- added). thered (emphasis employee” in some unspecified This undermines the “de- supposition fined plan,” benefit based Mr. Haus was the definition working of “grandfathered under the employee” contract while employed by En- contained in CDM, tech Bechtel’s employee handbook, or that Bechtel could not he quоted prove in his complaint that Mr. Haus was and appended not working un- thereto. contract, der that, Mr. basically Haus as an claimed unsophisti- that: (1) lay cated employee, Bechtel’s decision deny might he grandfa- him mistak- enly thered assumed status was arbitrary capricious, he was working under (2) plan(s) contract. Mr. Bechtel’s Haus was did not neither unso- sufficient- ly phisticated, apprise confused, him of rights. nor his nor misled into thinking he was working under the con- Ultimately, district court denied the tract. While others have suggested other- former, agreed with the latter. wise, Mr. Haus knew all along that his reaching decision, the district court ac- employment with Entech and CDM did not knowledged that each plan expressly count as work under the contract. More- granted the administrator over, Bechtel has insisted consistently and the discretion to determine eligibility and continuously very since the beginning of construe the plan’s terms, which meant the dispute that Mr. Haus’ employment that the court was bound to very limit- with Entech and CDM did not fall under ed standard review: whether the contract. administrator’s decision was arbitrary or July On began direct capricious. Based on review, the dis- employment Bechtel, (circa and later trict court concluded that the administra- 13, 2000), December sought for the first tor’s decision was not arbitrary or capri- time to be classified as a grandfathered However, cious. rather than “respect employee under the “employee benefit such decisions” as it promised, plans” arising from the LMES-to-Bechtel district court continued on and ruled that transition. There four separate plans, Mr. Haus was in fact entitled to be instat- and as a practical matter, Mr. Haus was ed into all four plans as a “grandfa- actually seeking grandfathered status as to thered employee” on the theory that only plan, one pension plan. As evi- Bechtel had violated a certain ERISA re- denced the correspondence in the rec- porting provision. The district court con- ord, Mr. really just wanted his time cluded: (i.e., with LMES pre-Entech CDM) [I]t is abundantly clear that Bechtel has be aggregated with his then-accumulating violated requirement ERISA’s that plan Bechtel, time at and all of it applied to- descriptions be “sufficiently accurate ward his pension total benefits under a and comprehensive to reasonably ap- pension plan. Bechtel disagreed with his prise participants and beneficiaries of claim to grandfathered status and ex- rights and obligations.” 29 U.S.C. plained to him that the DOE contract also 1022(a)(1). In this case the harm to prevented his attaining status. Mr. Haus is all the grevious more [sic] In an effort to overrule this decision because the conflict just is not administrator, Mr. Haus summary plan and plan itself, *12 plan’s the construe and mine offered plans among various court Furthermore, district the terms. consciously or has Bechtel Bechtel.... was decision the administrator’s found that de- conflicting plan unconsciously issued made Having capricious. arbitrary or not of “Grandfa- definitions and scriptions not аt was decision, the this some fits Employees.” thered toas review so further in engage liberty to such not all. definitions, but of those ais This alone outcome. a different obtain rely on cannot circumstances, Bechtel this reverse, for and to basis sufficient deny to in order it created ambiguity the ma- the disagree I must reason same is, most under to him a benefit analysis. jority’s clearly issued, entitled. they the into inquiry the renewed majority dis- The in the prevailed Mr. Haus Although (despite decision administrator’s plan the differ- is appeal theory on court, his trict of error any claim the absence theory, and court’s the district from ent the district found appeal), on regard deci- the affirming theory in majority’s the incor- to be factual determination all court’s I believe from both. is different sion administra- that the rect, concluded af- I would error, while three capricious. arbitrary and was tor’s decision that the finding court’s the district firm however, majority the analysis, In its arbitrary not decision administrator’s “rea- the administrator’s identified plainly as rest the vacate would capricious, the that which was explanation,” soned role. prescribed court’s the beyond a narrow applied administrator plan II. plan, transition of the interpretation DOE, and the by Bechtel intended ad- plan grants If sup- explanation that noted even eli- to determine the discretion ministrator that hold I would record. by the ported terms, then plan’s construe gibility that is all is explanation” a “reasoned reviewing limited is reviewing court deci- that a a claim necessary to overcome to ensure decision administrator’s Davis, See capricious. arbitrary or sion capricious. arbitrary nor neither it was decline also I would at 693. F.2d 887 Bruch, 489 v. Rubber Co. Tire & Firestone interject and refuse any further proceed 948, 108 L.Ed.2d 115, 101, 109 S.Ct. U.S. See this case. into preferences my own decision (1989). administrator’s planA 80 at 911. Ford, F.3d 233 Henry capricious arbitrary deemed not be will a rea- in- unabashedly to offer possible “it is long majority, so evidence, the admin- views, deeming on based explanation, own terjects soned its Ky. Davis “unreasonable” outcome.” interpretation particular istrator’s (6th Plan, interpreta- F.2d 887 preferred Ret. own Fin. Cos. its imposing law, we interpreta- Cir.1989). established majority’s Under tion. Central view or own our incorrect— interject conclusory simply may not tion —and disputes administra “nowhere place of Bechtel preference statement Sys. v. Health contract.” Ford Henry under worked See tor’s. Cir.2000) 907, position 911 Shalala, contrary, On v. State Ass’n employment Mr. Haus’ Vehicle (citing Motor been that along has Mfrs. Co., “under 463 U.S. fall Ins. Auto. CDM Mut. Farm Entech (1983)). explains: 77 L.Ed.2d S.Ct. contract.” underlying language Given granted Each contract, it was reasonable DOE deter- discretion administrator Bechtel Jacobs to interpret “work tems, Lockheed Martin Utility Ser- the Contract” as meaning transition vices, or Lockheed Martin Energy scope i.e., work formerly self- work — LM) Research (collectively, performed by LMES transitioned to SI, 1998;.... (in Bechtel Jacobs and then most in- *13 (B) The (1) individual was either: subsе- stances) to its subcontractors. That is quently employed by the Contractor the work that was shifting from one or its 1st- or 2nd-tier Subcontrac- employer to another aas result of the tors work under the Contract for DOE Contract it transition and was the prior 1, April 2000;.... incumbent workers performing that Appellee’s 19, Br. at quoting the Bechtel work who subject were the of the work- “Your Employee Handbook,” (emphasis force provisions transition in the Con- Appellee). The “Contract” is, course, of tract. the DOE-Bechtel Environmental Manage- In assessing the reasonableness of ment Contract. Purporting rely on this Bechtel Jacobs interpretation, it is sig- employee handbook description, Mr. Haus nificant that the agreed DOE with that argued: interpretation. above, As noted when primary The characteristics that quali- Mr. Haus appealed DOE, to the fied Haus for “grandfathered” status DOE responded that Mr. Haus did not (1) were that he was employed with satisfy the requirements for grandfa- 31, Lockheed on March 1998, and he employee thered status because “neither employed was by a Bechtel first-tier or Entech, Inc. nor CDM were first or second-tier subcontractor 1, before April second-tier work force transition subcon- 2000. tractors.” Appellee’s Br. at (emphasis original).
Appellant’s Br. at quoting a DOE let- ter Haus, dated By March omitting 2003. As the “under the Contract” explained previously, requirement, even Mr. Haus he deems himself entitled conceded that his grandfathered work at Entech and merely status because he CDM not was “under the employed Contract.” at the time in question by a company that was
On also Bechtel appeal, subcon- Mr. Haus has not argued tractor. To give this some he perspective, worked “under the Contract.” In- note that he could stead, make the he same argu- contends that the Bechtel Em- ment if he had left ployee LMES to Handbook become the is the SPD for all of night security guard at CDM’s (i.e., benefit Boston Mr. Haus in- headquarters or for an sists that the Entech office in individual SPDs for each of Europe. argument The would be individual if fine are not the actual not for the SPDs, “under the Contract” but language. rather the Employee Handbook is). quoted He the “Grandfathered Em- As above, stated quotes Haus ployees” provision repeatedly brief, in his employee entire provision handbook in his at point one quoting full, it in but else- brief, and even includes the “under the where just quoting the pertinent parts: phrase Contract” in his emphasized por- Grandfathered Employees shall tions, mean doing after so he retreats back
individuals who meet both of the follow- to his version, excised arguing: ing conditions: Haus was a Lockheed employee on (A) The individual was ... an employee 1998, and Haus was also Lockheed Martin Energy Sys-
of thereafter employed by Bechtel’s first- De- than do work you 1, 2000. April before tier subcontractors Energy? partment believed Consequently, do.... “grandfathered” Does Attorney: definition met the de- summary plan employee Yes, that site. Court: handbook. employee in the scriptiоn ... the record part Its not Attorney: structure 10. Br. at Appellee’s know. ... I don’t I don’t ... I don’t that, rather volumes speaks argument being that’s Well, question Court: “un- doing work he was arguing than only one is, if there’s here asked his crafts Contract,” Mr. der Energy, tract argument around theory entire subcontractors you how can actually to have him necessary *14 any- doing Jacobs Bechtel working Accord- the Contract.” “under work done subcontracted than work thing other nec- was that theory, Haus’ ing to Mr. con- Energy of Department the under em- “a Lockheed that he was essary question, the Now, I asked tract? ... also on ployee doing work subs those of some “are first-tier Bechtel’s employed thereafter Energy con- of Department under 1, 2000.” April before subcontractors isn’t that work doing also tract asserts majority 3, the Footnote In its con- Energy of Department under [i.e., Appellant argument that, oral “at you answered thought I tract,” which one only was [there] admitted Bechtel] the affirmative. in- misstatement of type This contract.” “yes.” is answer think the I Attorney: sup- In opinion. majority entire fects materials, mean, you if read I majority proposition, of port said. exactly what’s thafis ap- in the early from exchange quotes work words, is there So, in other Court: Bechtel’s which during argument, pellate Ja- site, by Bechtel on, at this going ex- attempts to attorney obviously harried subcontractors, that cobs, these with “Well, I think answering position, his plain of Department by the covered NOT Transcript Recorded true, but....” that’s Energy Contract? majority 6:40. at Argument Oral Yes. Attorney: had if been it this proposition asserts by? it covered admitted, contract What Court: unequivocally succinctly and demon- passage quoted even there guess I Attorney: while fact, most ... not. was it those with has strates tracts that argument mean, you appellate if subcontractors, time eventually question, to this read, you.... directed if (far more thor- following culminated “lasagna” what was Under Court: argument: during rebuttal exchange ough) being done? work only you said you thought So, I Court: me, your honor? Excuse Attorney: Department with one contract contract what Court: Under than more you Did Energy? being done? work “lasagna” Department contract one separate it was I believe Attorney: tier to this some gave you Energy contract had other you then contractor one Entech. En- Department contracts Depart- Well, about what Court: Is to others? gave you ergy were you work wasn’t ... ment Did contract? one than more there doing for of Energy- pated that the plan administrator’s deci- this, this umbrella contract? sion would be upheld unless it was found Attorney: Ah ... to be arbitrary or capricious, and court of Court: law You would proceed weren’t doing it free stan- you? dard. were
Attorney: No ... Thus, the majority, in pursuing its de Recorded Transcript of Oral Argument at sired outcome, construes the record much 31:54-33:48. point, At that the Court in- differently do, than I which of itself would terrupted and took the discussion anoth- require me to write separately. More im er direction. The obvious conclusion of however, portantly, even if the majority’s the above exchange, however, is that interpretation Bech- were in correct, fact the ma tel appellate Jacob’s attorney did not con- jority prescribed exceeds its role impos cede at argument oral that there only “was ing its preferences own on the plan admin contract,” one and certainly did not fail to istrator in this circumstance. The plan “dispute[] that Haus worked under the provided administrator a reasoned expla DOE contract.” nation for his interpretation, and there right Even this is wrong point, beside the decision is not *15 fore— —his arbitrary as the very capricious. most that the The district majority can court agreed (other offer is and no one than appellate majori the counsel ty) has equivocal was challenged on the this But, factual matter. determina this is tion not on appeal. fact, evidence. In This aspect there of is the no decision evidence in the should be affirmed. record—admissible or otherwise—to support contention; this there is no Rule 36 admission, no interrogatory answer, no III. stipulation, no deposition testimony, no tri- By plain terms, 29 § U.S.C. 1022 al testimony ... nothing ... not by even (titled “Summary plan description”) ap- Haus, Mr. who does not himself contend plies only to summary plan descriptions: that he doing was work under the contract A summary plan (as description any has em- been amply herein). demonstrated ployee benefit plan shall
And, be furnished to is the point: true Bechtel’s fail- participants and beneficiaries as provid- ure to “explain what other contract Haus’s ed in [ ] this title. The summary employers plan operated under” is irrelevant. description shall include the Inexplicably, information majority the to fails credit described in this section, [] shall the most rudimentary concept of our ad- written in a manner calculated versarial to be system: it is the plaintiff who by understood the average plan partici- bears the burden proof. Mr. Haus is pant, and shall be рlaintiff sufficiently the accurate case, therefore, and Mr. and comprehensive to reasonably Haus ap- was obliged carry to the burden of prise such participants and proof as beneficiaries to the controlling contract. Of of their rights and obligations course, under the since Mr. Haus never argued that plan. he was working “under the Contract,” it
would have been extraordinary for him to 29 1022(a). § U.S.C. This provides statute produced evidence that he was. It is support no for the (mis)applieation of it to only the majority that ever made such an full plan documents, or for a comparison allegation. On the hand, Bechtel, and contrast of (as independent plans relying on law, established clearly antici- by done the court). district finding inconsisten- upon menu, etc.—and summary plan the and plan the full If Nothing ambiguous. plan the deemed cy, consistent, then (SPD) are description ac- such supports statute cited in the plan either language plain tion. v. Inc. Int’l Wendy’s may govern. SPD Cir.1996). (6th 1010, 1013 Karsko, violation, court F.3d district a finding In summary plan ain I However, “statements conflict exclaimed, “[t]he conflict statements not if such ambiguity and binding creates Plan II-IV summary itself, the plan in the definitions internal among Farm, State unambiguous Edwards govern.” shall is consistent plans—each Co., Howev- Ins. other.” Auto. Mut. with each itself—but rule sense not Cir.1988). is, common This does conflict, er, this employees to ERISA, fairness ensure § Under intended 1022. U.S.C. violate summary plan: rely entity. reasonably legal distinct who is each distribute 1132(d). publish § effect 502(d), of no “It 29 U.S.C. is designed sim that, booklet summary proposition authority for no find com a voluminous then explain plan, one than more plify has company if a any proclaim among then definitions document plex adopt uniform it must governed will be asser- court’s district inconsistencies them. all of Id. Mr. plan.” harm “the tion—that ... conflict because [grievous] more case, the present In Bech- offered various among the any SPD inconsistency between no found conclusion erroneous, as is tel”—is fact, record plan. associated and its in all participate is entitled the actual contain even *16 is which he (including those plans the only its IV”), contained (“Plan but 401k “fits covered), because not admittedly district for the way nowas SPD, there so all,” and definitions, not those some type criti- the any conflict to find court issued, they plans the most “is, under 136. Simi- at Edwards, F.2d in cized revers- is this I believe clearly entitled.” the SPD contain not record the larly, not should court error, district and the ible full (“Plan I”), only the plan health for the issue. this reached even a have way for no there again, so plan, Edwards-type an issue to find this reach reviewing court to chooses majority The the plans, two expands doing the so As for in conflict. and well, is con- frankly, “each in (“statements stated court Edwards, district itself,” and if such unambiguous binding and are summary plan sistent a differently. plan conclude in to no basis find conflict statements to cover govern”) summary shall itself, the no am- found court, having fabricated) con- case, (or SPD, perceived any plan between biguity intеrpreted “Plans flicts ensure to designed a statute took this, summaries.” corresponding mislead- not “summary booklets” this court rule: a new creates majority among ambiguity to find it and used ing, a find plan actual review i.e., not need things, independent intentionally four controls; if SPD determine conflict Under plans. independent four adminis- whether only consider it need com- have could approach, an in- have (or appears interpreted trator docu- corporate any pared inter- said could be terpreted, poli- a plan, reimbursement travel ment —a way a plan full preted) lunch uniforms, cafeteria company cy on different from way the court pres- law, and created decision that will cause ently interpreting the SPD. In the ab- confusion and harm in cases, future I must stract, this is an unprincipled unjustifi- respectfully dissent. explosion able of this court’s power into the realm of plan It review. would
also seem to overrule practical rule in
Wendy’s, 94 F.3d at that either the plan
full or the SPD govern may absent a
direct conflict. Under the majority’s rule,
this court can henceforth interpret SPD any way likes, and if that interpretation conflicts with the plan administrator’s deci- ZOMBA ENTERPRISES, INC.; Zomba (i.e., sion “plan as interpreted”), Songs, Inc., Plaintiffs-Appellees, court can impose its preferred own inter- pretation, purportedly based on Edwards. This is de novo review—I fail to see how it PANORAMA RECORDS, INC., could be anything thus, less—and it is an Defendant-Appellant. entirely new rule of ERISA plan review. Moreover, this appears rule to be unjusti- Nos. 06-5013, 06-5266. fied and unwarranted in this specific case, as there is no evidence suggest that the United States Court of Appeals, administrator was interpreting the plans Sixth Circuit. rather than the just SPDs. It is as likely, if Argued: more likely, 2007. administra- tor was interpreting SPDs, although Decided and Filed: June 2007. the distinction is probably artificial, that, as the district court expressly recog- nized, exhibit no conflict between (at and SPD least for Plans II and
III, the two plans for which both
SPD are record). included in the
Finally, the majority makes the inexpli-
cable and unsupportable assertion —essen-
tial to its desired outcome—that “[t]he am-
biguity between plans’ the four respective definitions of the grandfathered term em-
ployee undoubtedly did create confusion
for the Plaintiff-Appellee and lay beneficiaries, but did not serve as the basis the district court’s decision.” On the
contrary, the contradiction among the four
plans was assuredly the basis for the dis-
trict decision, court’s as any reading of the opinion court’s makes evident.
IV.
Because I believe that the majority has
miscast facts, ignored the controlling