Alcantara v. Bakery & Confectionery Union & Indus. Int'l Pension Fund Pension Plan

Decision Date01 May 2014
Docket NumberNos. 12–4834–cv, 12–4839–cv, 12–4851–cv, 12–4861–cv, 12–4912–cv.,s. 12–4834–cv, 12–4839–cv, 12–4851–cv, 12–4861–cv, 12–4912–cv.
PartiesRafael ALCANTARA, Individually, and On Behalf Of All Others Similarly Situated, Alonso Gomez, Individually, and On Behalf Of All Others Similarly Situated, Celestino Juarez, Individually, and On Behalf Of All Others Similarly Situated, Vasilichia Babu, Individually, and On Behalf Of All Others Similarly Situated, Angel De La Cruz, Individually, and On Behalf Of All Others Similarly Situated, Khim Chand, Individually, and On Behalf Of All Others Similarly Situated, Tesfaye Ghebremedhin, Individually, and On Behalf Of All Others Similarly Situated, Rathin Dutta Gupta, Individually, and On Behalf Of All Others Similarly Situated, Luis Mejia, Individually, and On Behalf Of All Others Similarly Situated, Antonio Merolla, Individually, and On Behalf Of All Others Similarly Situated, Rolando Montano, Individually, and On Behalf Of All Others Similarly Situated, Russell Neubert, Individually, and On Behalf Of All Others Similarly Situated, Tagliareni Salvatore, Individually, and On Behalf Of All Others Similarly Situated, Musovic Smail, Individually, and On Behalf Of All Others Similarly Situated, Juan F. Torres, Individually, and On Behalf Of All Others Similarly Situated, Kenneth Kern, Melvin Menard, Garrett Schol, Guy Stalter, Almond Reid, Michael D'Antonio, Phillip Rogers, Donald Scrogham, Brian K. Fowler, Sr., Joseph Altamore, Individually, and on Behalf of All Others Similarly Situated, Leslie Durham, Randall Farmer, Rodney Simpson, James Thomas, James Smith, Steven Shankles, Mattie Davis, Joyce Slaton, Rickey Medley, Kathy Benefield, Timothy Wright, M.D., Rodney Foster, Sandra Brandon, Eddie Wright, Tommy Womack, Roger Wooten, Rickey Wilborn, Gary Whitmore, Walter Watson, Danny White, Terry Wagner, Daniel Thurman, Ricky Teat, Beecher Tanner, Jr., Michael Slaton, Tommy Sibert, Donna Smith, Chris Smith, Gary Sarratt, Charles Rogers, William Richey, Guy Rice, Phyllis Craze, Gary Medley, Randall Moore, Mark Money, Michael Norris, Tony Nelson, Donald Jones, David Lawman, Toney Ivey, Robert Jones, Larry Ingle, Billy Holkem, Herbert Head, Pamula Harper, Rodney Brothers, Dennis Brandon, Connie Burgess, Ruth Bailey, Jimmy Ammons, Kenneth Bearden, Nickey Gorham, Ralph Flynn, James Ferguson, Walter Esloon, Glenda Dupree, Roger Davis, Alan Dalton, James Crawford, Douglas Combs, Melissa Cisco, Billy Cook, Charles Coker, Billy Cathey, Kenneth Burt, Daniel Carter, Edward Bearden, Sheila Hammond, Salvador Martinez, Randall Garrison, Leslie Caddick, Joseph Barela, Sheila Juarez, Roger Gonzalez, Phillip G. Scott, individually and as representative on behalf of a class of similarly situated persons, Terry Wayne Finch, Terry Moore, Ronald Blackwell, Plaintiffs–Appellees, John Steven Chambers, Kevin Waters, Plaintiffs, v. BAKERY AND CONFECTIONERY UNION AND INDUSTRY INTERNATIONAL PENSION FUND PENSION PLAN, Bakery and Confectionery Union and Industry International Pension Fund Board of Trustees, as Plan Administrator, John Does 3–10, as Trustees of the Bakery and Confectionery Union and Industry International Pension Fund, Frank Hurt, Steven V. Bertelli, David B. Durkee, Anthony Johnson, Art Montminy, Robert Oakley, Randy D. Roark, Joseph Thibodeau, Richard B. Cook, Dan Craig, Thomas G. Kirchner, Jon McPherson, Lou Minella, John Wagner, John Doe No. 1, John Doe No. 2, as Trustees of the Bakery and Confectionery Union and Industry International Pension Fund, The Bakery and Confectionery Union and Industry International Pension Fund, John Beck, Plan Manager, Bakery and Confectionery Union and Industry International Pension Fund Board of Trustees, Bakery and Confectionery Union and Industry International Pension Fund, Defendants–Appellants.
CourtU.S. Court of Appeals — Second Circuit

OPINION TEXT STARTS HERE

Julia Penny Clark (Jeremiah A. Collins, Osvaldo Vazquez, on the brief), Bredhoff & Kaiser PLLC, Washington, DC, for Bakery and Confectionery Union and Industry International Pension Fund Pension Plan, Bakery and Confectionery Union and Industry International Pension Fund Board of Trustees, as Plan Administrator, John Does 3–10, as Trustees of the Bakery and Confectionery Union and Industry International Pension Fund, Frank Hurt, Steven V. Bertelli, David B. Durkee, Anthony Johnson, Art Montminy, Robert Oakley, Randy D. Roark, Joseph Thibodeau, Richard B. Cook, Dan Craig, Thomas G. Kirchner, Jon McPherson, Lou Minella, John Wagner, John Doe No. 1, John Doe No. 2, as Trustees of the Bakery and Confectionery Union and Industry International Pension Fund, The Bakery and Confectionery Union and Industry International Pension Fund, John Beck, Plant Manager, Bakery and Confectionery Union and Industry International Pension Fund Board of Trustees, Bakery and Confectionery Union and Industry International Pension Fund.

Benjamin Gould (Lynn L. Sarko, Derek W. Loeser, David S. Preminger, Erin M. Riley, Alison S. Gaffney, on the brief), Keller Rohrback LLP, Seattle, WA, Chrisopher A. Seeger, Diogenes P. Kekatos, Seeger Weiss LLP, New York, NY, William D. Frumkin, Elizabeth E. Hunter, Frumkin & Hunter LLP, White Plains, NY, for Alcantara Plaintiffs.

Thomas O. Sinclair (M. Clayborn Williams, on the brief), Sinclair Williams LLC, Birmingham, AL, for Phillip G. Scott and Terry Wayne Finch.

David P. Martin, The Martin Law Group, LLC, Tuscaloosa, AL, Robert Brett Adair, Adair Law Firm, LLC, Birmingham, AL, for Blackwell, Martinez, and Moore Plaintiffs.

Before: KEARSE, JACOBS, and B.D. PARKER, Circuit Judges.

BARRINGTON D. PARKER, Circuit Judge:

In this appeal from a judgment of the United States District Court for the Southern District of New York (Vincent L. Briccetti, Judge ) we consider whether the anti-cutback rule in § 204(g) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1054(g), precludes plan amendments that reduce retirement-type subsidies for plan participants who have ceased employment without satisfying the preamendment conditions for the subsidy, but who could later satisfy the preamendment conditions without returning to work. We hold that the rule protects such benefits and, accordingly, we affirm the judgment of the district court.

I. BACKGROUND

The relevant facts are uncontested. DefendantsAppellants are the Bakery and Confectionery Union and Industry International Pension Fund Pension Plan (the Plan), a multiemployer defined-benefit pension plan, and its Board of Trustees. The PlaintiffsAppellees are participants in the Plan. The plaintiffs' former employers are parties to collective bargaining agreements with local unions of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

The Plan provides for a range of benefits. The standard benefit, payable at age 65—the “normal retirement age” under the Plan—was labeled Plan A. Participants could elect to receive their Plan A pension benefits as early as age 55, but at an actuarially reduced level that reflected the earlier (and longer) expected stream of payments. Certain employers elected to offer additional subsidized early retirement benefits that were not actuarially reduced. Two of these plans, Plan G (the “Golden 80 Plan”), and Plan C (the “Golden 90 Plan”), are at issue here. Under those Plans, a participant who had completed at least ten years of service with a participating employer, and whose combination of his age and years of service totaled 80 or 90 years, respectively, could retire and receive full pension benefits.

Prior to July 2010, the Plan allowed a participant to “age into” Golden 80 or 90 benefits. This meant that a participant who had achieved the ten-year minimum service requirement, but who had left covered employment before achieving the requisite 80– or 90–year age-plus-years-of-service level, would still become eligible for Golden 80 or 90 benefits as soon as his age-plus-years-of-service reached the required 80– or 90–year requirement.

In July 2010, the Trustees amended the Plan to eliminate the option to “age into” benefits and to require that a participant be employed at the time he qualified for Golden 80 or 90 benefits. The amendment did not affect those participants who had already aged into Golden 80 or 90 benefits. The amendment affected only those participants who had completed the ten-year minimum service requirement, but who had not yet reached the requisite age-plus-years-of-service level and were no longer working for an employer participating in the Golden 80 or 90 Plans. The brunt of this change, according to plaintiffs, fell on former employees who were laid off due to either plant closings or reductions in force and subsequently were unable to find work in the industry.

Participants who lost their opportunity to qualify for Golden 80 or 90 benefits as a result of the amendment filed various suits alleging that the plan amendment violated § 204(g), ERISA's anti-cutback rule, which prohibits plan amendments that reduce or eliminate certain pension benefits. In response, the Plan contended that the rule protected only those Golden 80 and 90 Plan participants who remained in covered employment at the time they achieved the required age-plus-years-of-service level.

The cases were consolidated and the parties cross-moved for judgment on the pleadings. The district court held that the amendment violated the anti-cutback rule. In re Bakery & Confectionery Union & Indus. Int'l Pension Fund Pension Plan, 865 F.Supp.2d 469, 474–75 (S.D.N.Y.2012). Judge Briccetti reasoned that [e]ligibility for plaintiffs is based on a sum of their respective ages and lengths of service. Because they can continue to age into pension benefits even after they have separated from their respective employers, Section 204(g) applies. And because plaintiffs may, post-amendment, satisfy the pre-amendment requirements to obtaining a Plan C or Plan G pension, the anticutback rule bars the amendment.” Id. at...

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