Danti v. Lewis

• Decision Date: 20 November 1962
• Docket Number: No. 16351.,16351.
• Citation: 312 F.2d 345,114 US App. DC 105
• Parties: Rose DANTI, Administratrix of the Estate of Andrew Danti, Appellant, v. John L. LEWIS et al., Trustees, United Mine Workers of America Welfare and Retirement Fund of 1950, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

114 US App. DC 105, 312 F.2d 345 (1962)

Rose DANTI, Administratrix of the Estate of Andrew Danti, Appellant, v. John L. LEWIS et al., Trustees, United Mine Workers of America Welfare and Retirement Fund of 1950, Appellees.

No. 16351.

United States Court of Appeals District of Columbia Circuit.

Argued May 23, 1962.

Decided November 20, 1962.

Petition for Rehearing Denied December 19, 1962.

Mr. James C. Gregg, Washington, D. C., for appellant. Mr. Hugh Lynch, Jr., Washington, D. C., also entered an appearance for appellant.

Mr. Edward L. Carey, Washington, D. C., with whom Messrs. Val. J. Mitch and Charles L. Widman, Washington, D. C., were on the brief, for appellees.

Before BAZELON, Chief Judge, and WILBUR K. MILLER and BURGER, Circuit Judges.

Petition for Rehearing En Banc Denied En Banc December 19, 1962.

WILBUR K. MILLER, Circuit Judge.

This appeal involves a coal miner's eligibility for a pension from the United Mine Workers of America Welfare and Retirement Fund of 1950. It also presents preliminary questions as to the nature and scope of the judicial review to which a rejected applicant is entitled when he asks a court to examine a decision as to eligibility made by those who administer the Fund.

The Fund was created by the National Bituminous Coal Wage Agreement of 1950 pursuant to a section of the Labor Management Relations Act of 1947¹ which authorizes coal operators to establish welfare funds

"(c) * * * for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents): Provided, That (A) such payments are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees, their families and dependents, for medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing, or unemployment benefits or life insurance, disability and sickness insurance, or accident insurance; (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer * *."

The Wage Agreement provided for a board of three trustees to administer the Fund, prescribed their duties in a somewhat general way, and with respect to the determination of applicants' eligibility said:

"* * * Subject to the stated purposes of this Fund, the Trustees shall have full authority, within the terms and provisions of the `Labor-Management Relations Act, 1947,\' and other applicable law, with respect to questions of coverage and eligibility, priorities among classes of benefits, amounts of benefits, methods of providing or arranging for provisions for benefits, investment of trust funds, and all other related matters."

In September, 1952, Andrew Danti, who had been a member of the United Mine Workers of America for 31 years, filed with the Trustees of the Fund an application for a pension at the rate of $100 per month beginning with October, 1952.

The application, prepared on a form furnished by the Trustees, stated he was 60 years old and had worked in the coal industry continuously from July, 1916, until June, 1946, when he retired because of "Failing Health — Heart Condition." It included a list of eight companies for which he had worked during that period. There was embodied in the application a certificate of Danti's local union that he had been a member since December, 1925, that the facts stated in the application were true and correct to the best of its knowledge and belief, and that Danti "was employed in the Coal Industry for a period of at least one year immediately preceding the date of his retirement." Also a part of the application was the union's District Secretary's certificate that Danti was a member in good standing, that the facts stated in the application were true to the best of his knowledge and belief, and "that proof as to service of applicant has been obtained * * *."

The Trustees did not act until February 26, 1953; then they denied the application for the recited reason that

"Applicant has not established proof of twenty (20) years\' classified service in the Bituminous Coal Industry within the twenty-five (25) year period immediately preceding the date of his application."

An attempt to obtain a favorable result on reconsideration was denied May 29, 1957. In July 1958, Danti brought this suit against the Trustees in the United States District Court for the District of Columbia alleging he was a beneficiary of the Fund and that

"3. Immediately prior to, and on the date of May 29, 1946, the plaintiff was regularly employed in a classified job for an operator signatory to the National Bituminous Coal Wage Agreement, i. e., the Commercial Coal Company, Twin Rocks, Pennsylvania, and he was performing the duties of a `loader\', and the plaintiff had further approximately 30 years of classified service in the coal industry immediately preceding said date."

Thus he averred that he was one of the employees for whose benefit the statute permits the establishment of welfare funds. He also alleged he had reached the age of 60 years when he applied for a pension, that he was entitled thereto under the rules and regulations promulgated by the Trustees, but they had failed and refused to pay him. He demanded judgment for $7,000, the amount then accrued.

The Trustees' answer denied that Danti was a beneficiary of the trust entitled to a pension, and expressly denied the allegations quoted above. In the pretrial proceedings these issues were not changed, but it was there agreed

(a) that, at the time Danti's application was received by the Trustees in October, 1952, eligibility for a pension was governed by their Resolution 10, which was summarized as providing that an applicant must have been 60 years of age or over at the time of application; must have had 20 years of service in the coal industry; must have been employed in the coal industry for one year immediately preceding retirement; and must have retired subsequent to May 28, 1946.²

(b) that on February 26, 1953, when the Trustees denied Danti's application, eligibility for a pension was governed by their Resolution 30, which was summarized as providing that an applicant must have been 60 years of age or over; must have had 20 years of service in the coal industry within the 25 years immediately preceding his application; must have retired following a period of regular employment in the coal industry; and must have retired after May 28, 1946.

The administrative record before the District Court consisted of Danti's application, including the supporting certificates, filed in the fall of 1952, and the Trustees' denial of February 26, 1953. But the court did not confine its review to a consideration whether the administrative record supported the decision, but received evidence aliunde, tried the case de novo, and filed findings of fact and conclusions of law.

The trial judge found that Danti's last day of actual work in the coal industry was March 1, 1946, but that thereafter he made unsuccessful efforts to find employment therein. He also found that the Trustees' Resolution 10 provided that an applicant for a pension must have "Retired by permanently ceasing work in the Bituminous Coal Industry after May 28, 1946." He further found that the Trustees denied Danti's application for a pension, and had defended the action, "on the basis that Plaintiff did not meet the aforesaid requirements of eligibility for a pension."

Having so found, the trial judge reached conclusions of law, the first four of which are pertinent for present purposes:

"1. Judicial review of the decisions of the Trustees of this Trust is limited to insuring that the Trust is administered within the terms of the trust indenture and that beneficiaries are protected from arbitrary and capricious actions.

"2. The Trustees of this Trust have complete discretion to establish eligibility requirements for a pension and to interpret the same.

"3. Plaintiff failed to meet the requirements of eligibility for a pension as contained in Resolution 10 as interpreted by the Defendant Trustees.

"4. There is no evidence that the Defendant Trustees have acted in bad faith, arbitrarily or capriciously."

On the basis of these findings and conclusions, Danti's complaint was dismissed with prejudice. He appealed, but subsequently died and Rose Danti, his administratrix, has been substituted as appellant.

Although Danti sought only a money judgment, he was really attacking the Trustees' denial of his claim. We think it reasonable, therefore, to construe the action, as the Trustees do in their brief, as one "for judicial review of a decision of the Trustees of February 26, 1953, rejecting Plaintiff's application for a pension, thus denying him status as a beneficiary of this Trust."

It is conceded by the Trustees that their decision as to eligibility is subject to judicial review to determine "whether the Trustees have acted arbitrarily, capriciously or in bad faith; that is, is the decision of the Trustees supported by substantial evidence or have they made an erroneous decision on a question of law."³

On the administrative record before it, the District Court should have found the Trustees' decision arbitrary and capricious because it was based on Danti's failure to prove something he was not required to prove by Resolution 10, which the parties agree was the regulation governing eligibility at the time his application was filed. That Resolution required that the applicant must have "Completed twenty (20) years service in the Coal Industry in the United States * * *." The application met the requirement of Resolution 10 as to years of service by giving a detailed statement of the companies by which he had...