Johannssen v. Dist. No. 1-Pac. Coast, Meba Pension
| Decision Date | 20 May 2002 |
| Docket Number | No. 01-1986.,No. 01-1608.,No. 01-2041.,01-1608.,01-1986.,01-2041. |
| Parties | Howard E. JOHANNSSEN; Marvin E. Long; Donna Fisher, Plaintiffs-Appellees, v. DISTRICT NO. 1— PACIFIC COAST DISTRICT, MEBA PENSION PLAN, Defendant-Appellant. Howard E. Johannssen; Marvin E. Long; Donna Fisher, Plaintiffs-Appellees, v. District No. 1— Pacific Coast District, MEBA Pension Plan, Defendant-Appellant. Howard E. Johannssen; Marvin E. Long; Donna Fisher, Plaintiffs-Appellants, v. District No. 1— Pacific Coast District, MEBA Pension Plan, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: Christine Ann Williams, Gordon, Feinblatt, Rothman, Hoffberger & Hollander, L.L.C., Baltimore, Maryland, for Appellant. Cyril Vincent Smith, Zuckerman Spaeder, L.L.P., Baltimore, Maryland, for Appellees.
ON BRIEF: Deborah S. Richardson, Zuckerman Spaeder, L.L.P., Baltimore, Maryland; Carole J. Yanofsky, Zuckerman Spaeder, L.L.P., Washington, D.C., for Appellees.
Before WILLIAMS and TRAXLER, Circuit Judges, and HALL, Senior Circuit Judge of the United States Court of Appeals for the Ninth Circuit, sitting by designation.
Affirmed in part and remanded in part by published opinion. Senior Judge CYNTHIA HOLCOMB HALL wrote the opinion, in which Judge WILLIAMS and Judge TRAXLER joined.
This appeal concerns pension benefits claimed by three union employees who claim eligibility for past service credits pursuant to a controversial 1992 amendment to a union staff pension plan. The claims were denied by the plan administrator who refused to recognize the validity of the amendment on the ground that it was adopted by an improper body. The employees filed suit under 29 U.S.C. § 1132(a)(1)(B) and were granted an interlocutory judgment declaring that the 1992 amendment was valid after a three day bench trial. Upon remand, a second plan administrator granted each of the employees less past service credits than they claimed, and they filed an amended complaint seeking the difference. The district court then granted the employees' motion for summary judgment in a published opinion including findings of fact and conclusions of law as to the validity of the amendment, and awarded the employees all of the past service credit they claimed. The pension plan timely appeals the validity of the amendment, the awards granted under it, and the award of attorneys' fees. The employees cross-appeal on the calculation of attorneys' fees. We affirm as to most issues but remand for recalculation of attorneys' fees and interest on the lump sum distributions awarded to the plaintiffs.
The much litigated facts serving as background to this case have been the subject of numerous decisions, including two opinions by the district court below. See Johannssen v. District No. 1 — Pacific Coast Dist., 1997 WL 580827 (D.Md.1987) ("Johannssen I."); Johannssen v. District No. 1 — Pacific Coast Dist., 136 F.Supp.2d 480 (D.Md.2001) ("Johannssen II."); United States v. DeFries, 129 F.3d 1293 (D.C.Cir.1997). Because much of the story has been adequately described elsewhere, we limit ourselves to a summary description.
Plaintiffs-Appellees Howard E. Johannssen, Marvin E. Long, and Donna C. Fisher (collectively the "Plaintiffs"), are three former employees of District No. 1 — MEBA/NMU ("MEBA/NMU"), a union formed by the merger of District No. 1 — Pacific Coast District, MEBA ("PCD"), and the National Maritime Union ("NMU"). The two founding unions represented licensed merchant mariners and unlicenced seamen, respectively. In order to maintain this division of bargaining units, MEBA/NMU was structured with two divisions — the Licensed Division and the Unlicensed Division — whose membership corresponded to the old PCD and NMU. Today, MEBA/NMU is no longer in existence and the Licensed Division has once again become PCD. For simplicity of exposition, the organization representing licensed merchant mariners will be called PCD throughout the opinion except as necessary to note instances in which its one-time status as a division of MEBA/NMU is particularly relevant.
Nominally, the Defendant-Appellant is the District No. 1 — Pacific Coast District, Marine Engineers Beneficial Association Pension Plan (the "Plan"), though it is alleged that the Plan represents the interests of the current leadership of PCD in important respects. The Plan provides pension benefits to employees who are part of the union staff. Johannssen, Long, and Fisher claim 52 years past service credit under the terms governing the Plan for years worked before they became employees of MEBA/NMU.
From April 1968 until March 1977, Johannssen worked for the Federal Aviation Administration ("FAA") in New York. While at the FAA, Johannssen became involved in union organizing, and in 1974 began efforts to form a new union on behalf of PCD and the Professional Air Traffic Controllers Organization ("PATCO"). In 1977, Johannssen resigned from the FAA and was elected president of the newly formed Professional Airways System Specialists ("PASS"), a union that was sponsored by PCD and PATCO, and that became an affiliate of PCD in 1982. Before moving from the FAA, Johannssen was repeatedly promised by senior PCD officials that he would be awarded pension credit for his time at the FAA and PASS (which had no pension plan) as an inducement to become a full-time union organizer. To pay for costs of relocation associated with his move to the union, Johannssen thereafter withdrew his employee contributions to the federal pension plan maintained by the FAA, forfeiting the employer contributions to that plan. Between the time he left the FAA in 1977 and 1989, Johannssen accrued no pension benefits as a member of PASS. In May 1989 he became a member of the Plan and continued to be so until he terminated his employment in 1994.
Long's history is similar to Johannssen's. From 1967 to 1977 he worked as an air traffic controller at the FAA. In 1977 he resigned to work full time as an organizer for PATCO. Like Johannssen, he was promised pension credit from PCD for his years at the FAA and "cashed out" his contributions to the FAA plan. From January 1977 through December 1983, he worked at PATCO organizing unions for the benefit and under the sponsorship of PCD. While Long was at PATCO, he was a participant in the Plan and accrued approximately four years of service. However, PATCO went on strike and was eventually bankrupted in 1984, causing Long to lose the service credit he had accrued because he was not yet vested in the Plan. From 1983 to 1991, Long was employed by PASS and did not participate in the Plan. He was again promised by PCD officials that he would receive pension credit in the Plan. In 1991 he resumed participation in the Plan.
From 1971 to 1980, Fisher was employed by Boeing and its subsidiaries. From 1973 to 1980, she was also an officer of the Florida Association of Professional Employees ("FAPE"), a subordinate body of PCD. During this period she did not participate in a pension plan. From 1980 to at least the time of trial, Fisher has been an employee of PCD or MEBA/NMU, and has participated in the Plan. After beginning her employment with PCD and an affiliated union called the Federation of Public Employees ("FOPE"), Fisher sought pension credit for eight years of prior service at FAPE. In response, her supervisor told her that she would receive a salary increase only half as large as other employees at FOPE and that this would be offered to PCD as a way of paying part of the cost of her past service credits. Fisher has since worked under that arrangement.
The Plan is a defined benefit pension plan created on January 1, 1972 for the benefit of employees of PCD, through a contract between it and the John Hancock Mutual Life Insurance Company ("John Hancock"). The Plan is governed by Group Annuity Contract No. 1623 (the "Plan Document") issued by John Hancock. The Plan Document contains several provisions relevant to amendment of the Plan. At all relevant times, Article I, Section 20 provided in part: "The Employer shall have the right to amend the Plan in any respect, at any time by an instrument in writing, duly executed by the Employer...." Plaintiffs' Summ. J. Mot. Ex. 12 at I-25.0. In October 1992, when the amendment at issue was adopted, the "Employer" was defined as "the District No. 1 MEBA/NMU and its affiliated organizations listed below." Plaintiffs' Summ. J. Mot. Ex. 12 at I-1.0. Thereafter followed a list of eight associated organizations. A different provision, Article III, Section 8, provided that the "Contract," which is a synonym for the Plan Document, "may be modified at any time by written agreement between the John Hancock and the Contract Holder." Plaintiffs' Summ. J. Mot. Ex. 12 at III-3.0. It then described conditions under which John Hancock could alter the Plan Document. The term "Contract Holder" was not defined in the Plan Document. However, a copy of the contract dated February 27, 1974 included a cover page identifying PCD as the Contract Holder at that time.
From 1986 to 1996, the plan administrator was Lucille Hart. Hart reported to the president of the PCD, and for a period after the merger with NMU to the president of MEBA/NMU. At the time of the dispute, Hart was once again reporting to the leadership of the former PCD.1 Hart was responsible for all benefits decisions and appeals. Her powers were defined in part by Article I, Section 15 of the Plan Document which stated "Except as herein otherwise expressly provided, the Plan Administrators shall have the exclusive right to interpret the Plan and decide any matters arising thereunder in connection with the administration of the Plan." Plaintiffs' Summ. J. Mot. Ex. 12 at I-24.0
In 1987 PCD and NMU combined pursuant to a merger...
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