700 F.3d 743 (4th Cir. 2012), 12-1108, United States Foodservice, Inc. v. Truck Drivers & Helpers Local Union No. 355 Health & Welfare Fund

Docket Nº:12-1108.
Citation:700 F.3d 743
Opinion Judge:WILKINSON, Circuit Judge:
Party Name:U.S. FOODSERVICE, INC., Plaintiff-Appellee, v. TRUCK DRIVERS & HELPERS LOCAL UNION NO. 355 HEALTH & WELFARE FUND, Defendant-Appellant, and Truck Drivers & Helpers Local 355 Retirement Pension Plan; Trustees of the Truck Drivers & Helpers Local Union No. 355 Retirement Pension Plan; Trustees of the Truck Drivers & Helpers Local Union No. 355 Health,
Attorney:Paul Douglas Starr, Abato, Rubenstein & Abato, PA, Baltimore, Maryland, for Appellant. Stefan Jan Marculewicz, Littler Mendelson PC, Washington, D.C., for Appellee. Corey S. Bott, Meghan Horn, Abato, Rubenstein & Abato, PA, Baltimore, Maryland, for Appellant. Steven E. Kaplan, Littler Mendelson P...
Judge Panel:Before WILKINSON, KEENAN, and DIAZ, Circuit Judges. Judge WILKINSON wrote the opinion, in which Judge KEENAN and Judge DIAZ joined.
Case Date:November 30, 2012
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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700 F.3d 743 (4th Cir. 2012)

U.S. FOODSERVICE, INC., Plaintiff-Appellee,

v.

TRUCK DRIVERS & HELPERS LOCAL UNION NO. 355 HEALTH & WELFARE FUND, Defendant-Appellant,

and

Truck Drivers & Helpers Local 355 Retirement Pension Plan; Trustees of the Truck Drivers & Helpers Local Union No. 355 Retirement Pension Plan; Trustees of the Truck Drivers & Helpers Local Union No. 355 Health, Welfare Fund; Benefits Administration Corporation, Inc., Defendants.

No. 12-1108.

United States Court of Appeals, Fourth Circuit.

November 30, 2012

Argued: Oct. 23, 2012.

Page 744

ARGUED:

Paul Douglas Starr, Abato, Rubenstein & Abato, PA, Baltimore, Maryland, for Appellant.

Stefan Jan Marculewicz, Littler Mendelson PC, Washington, D.C., for Appellee.

ON BRIEF:

Corey S. Bott, Meghan Horn, Abato, Rubenstein & Abato, PA, Baltimore, Maryland, for Appellant.

Steven E. Kaplan, Littler Mendelson PC, Washington, D.C., for Appellee.

Page 745

Before WILKINSON, KEENAN, and DIAZ, Circuit Judges.

Reversed and remanded by published opinion.

Judge WILKINSON wrote the opinion, in which Judge KEENAN and Judge DIAZ joined.

OPINION

WILKINSON, Circuit Judge:

The Employee Retirement Income Security Act (" ERISA" ), 29 U.S.C. § 1001 et seq., provides that assets of an ERISA plan " shall never inure to the benefit of any employer and shall be held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan." 29 U.S.C. § 1103(c)(1). As an exception to this general rule, the statute permits the return of an employer's plan contribution that was the result of " a mistake of fact or law," but only " after the plan administrator determines that the contribution was made by such a mistake." Id. § 1103(c)(2)(A)(ii). Here, the district court ordered return of certain allegedly mistaken employer contributions even though the plan administrator determined that the contributions were not made by mistake. Because we find that the administrator's decision was not an abuse of discretion, we must reverse the judgment of the district court and remand for further proceedings consistent with this decision.

I.

A.

Teamsters Local Union No. 355 (" Local 355" ) is a labor organization representing workers in various industries in parts of Maryland, Delaware, and Virginia. Local 355 is currently party to collective bargaining agreements (" CBAs" ) with approximately seventy-five employers, including appellee U.S. Foodservice (" USF" ). Pursuant to its CBA with Local 355, USF makes contributions on behalf of its employees to appellant Truck Drivers and Helpers Local Union No. 355 Health and Welfare Fund (the " Health Fund" ), an ERISA multiemployer welfare benefit plan. Since 1957, USF or its predecessor companies have been party to various CBAs with Local 355. Each CBA has required USF to contribute a certain amount to the Health Fund based on the number of hours worked by USF employees.

The Health Fund was established in 1957 and is governed by a board of trustees pursuant to a trust agreement. Local 355 has also established an associated pension fund (the " Pension Fund" ). As permitted by ERISA, the trustees of both funds have designated a third-party administrator, Benefits Administration Corporation (" BAC" ), to oversee their day-to-day operations. BAC serves at the pleasure of the trustees, who are ultimately responsible for any decisions made on behalf of the Funds. Section 9.5 of the Health Fund's trust agreement contemplates the possibility of mistaken employer contributions and provides BAC and the trustees with the following directive: " In no event shall any Employer, directly or indirectly, receive any refund on contributions made by them to the Trust (except in case of a mistake, to the extent permitted by law)."

At issue in this appeal are contributions made pursuant to Article 20, Section 3 of USF's CBA with Local 355, which states:

The Company, as of [date], agrees to pay into the Fund, [amount] for each straight time hour or fraction thereof paid to each employee covered by this Agreement or by subsequent collective bargaining Agreements between the

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parties hereto up to but not in excess of fifty (50) straight time hours in any one (1) work week in the case of each employee.

Similar language has appeared in every CBA between USF and Local 355 since the two parties entered into their first CBA in 1957. Only the effective date and dollar amount to be paid have changed. It is undisputed that from at least 1988 through early 2008, USF consistently paid the specified contribution amount for each hour worked up to fifty hours per week per employee, even though each employee's forty-first through fiftieth hours were generally paid at an overtime rate.

In March 2008, following the replacement of a long-time payroll clerk, USF discovered that it may have been contributing more to the Funds than was required by the governing CBA. USF subsequently completed an internal audit and concluded that it had mistakenly contributed too much to both the Health Fund and the Pension Fund for the period from January 2006 through March 2008. As relevant to this appeal, USF determined that it had made contributions to the Health Fund for hours paid at the overtime rate even though USF believed the governing CBA only required contributions for hours paid at the straight-time rate. USF halted the allegedly mistaken contributions in March 2008 and has not resumed those contributions to date.

On September 26, 2008, USF notified the Funds of the alleged overpayments and requested a refund of...

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