Dime Coal Co., Inc. v. Combs

Decision Date11 August 1986
Docket NumberNo. 85-7758,85-7758
Citation796 F.2d 394
Parties, 7 Employee Benefits Ca 2068 DIME COAL COMPANY, INC., Plaintiff-Appellee, v. Harrison COMBS, John J. O'Connell, and Paul R. Dean, as Trustees of the United Mine Workers of America Health and Retirement Funds, Defendants-Appellants.
CourtU.S. Court of Appeals — Eleventh Circuit

Patrick K. Nakamura, Birmingham, Ala., for defendants-appellants.

William F. Hanrahan, Catherine H. Mitchell, Gerald E. Cole, Jr., United Mine Workers of America Health and Retirement Funds, Washington, D.C., for Harrison Combs.

Susan B. Mitchell, Sirote, Permutt, Friend, Friedman, Held & Apolinsky, Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before HILL, Circuit Judge, HENDERSON *, Senior Circuit Judge, and LYNNE **, Senior District Judge.

HILL, Circuit Judge:

In this case we address the question whether there exists in section 403(c)(2)(A)(ii) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1103(c)(2)(A)(ii) (1982), which authorizes the trustees of a multiemployer employee welfare or pension benefit plan to refund mistaken overpayments by an employer within six months after the discovery by the plan administrator of the mistake, an implied private right of action in favor of employers to recover mistaken contributions that are being wrongfully withheld by the plan's trustees. The district court found such a private right of action to exist. We reverse.

FACTS

Appellants are trustees of a set of multiemployer employee benefit trust plans that we will refer to collectively as the United Mine Workers of America Health and Retirement Funds ("the Funds"). 1 Pursuant to wage agreements appellee Dime Coal Company, Inc. ("Dime Coal") signed with the United Mine Workers of America ("UMWA") in 1978 and 1981, Dime Coal made employer contributions to the Funds based on the tons of coal produced or purchased and on the hours worked that Dime Coal reported to the Funds. The contributions were made for the purpose of providing pension, health and other non-pension benefits for retired miners and their eligible dependents and for certain laid-off miners.

An audit of Dime Coal's books was conducted by the Funds in October 1982, covering the periods December 28, 1978 through March 26, 1981 and June 7, 1981 through June 30, 1982. The audit revealed that Dime owed the Funds $723.61 and $968.97 respectively for hours worked and tons purchased, but had overpaid for tons produced by $79,624.31. The trustees refunded $61,700.04 of the overpayment pursuant to section 403(c)(2)(A)(ii) of ERISA, 29 U.S.C. Sec. 1103(c)(2)(A)(ii) (1982), which authorizes employee benefit plan trustees to return mistaken employer contributions within six months of discovering that they were made by mistake. Because approximately $16,000 of the overpayments represented payments made prior to the enactment date of the statutory provision authorizing the refund of mistaken contributions, however, the trustees took the position that they were not statutorily authorized to return the mistaken overpayments and that for them to do so would violate their statutory obligation to ensure that the assets of the Funds are used "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. Sec. 1103(c)(1) (1982).

After the trustees declined Dime Coal's request for a refund of the disputed overpayments Dime Coal instituted suit in federal district court, claiming that under the statutory refund provision it was entitled to a refund of the overpayments made and

to interest thereon. The district court found that it had jurisdiction over the action pursuant to section 502 of ERISA, 29 U.S.C. Sec. 1132 (1982), and 28 U.S.C. Sec. 1331 (1982) and ordered the trustees to return to Dime Coal the disputed overpayments. Applying state law, the court also ordered the trustees to pay prejudgment interest on the refund at a rate of six percent per annum from the date Dime Coal made its demand by letter for a refund. This appeal followed.

DISCUSSION
I

The trustees argue as a threshold matter that the district court erred in finding that it had subject matter jurisdiction over this action. We agree with appellants that ERISA's grant of exclusive jurisdiction in the federal district courts over actions brought under Title I of ERISA "by the Secretary [of Labor] or by a participant, beneficiary, or fiduciary," 29 U.S.C. Sec. 1132(e)(1) (1982), clearly does not constitute a congressional grant of federal jurisdiction over an action brought under ERISA by an employer who is not also a participant or fiduciary, nor should such a jurisdictional grant be implied. See Tuvia Convalescent Center, Inc. v. National Union of Hospital & Health Care Employees, 717 F.2d 726, 729-30 (2d Cir.1983); Pressroom Unions-Printers League Income Security Fund v. Continental Assurance Co., 700 F.2d 889, 892 (2d Cir.), cert. denied, 464 U.S. 845, 104 S.Ct. 148, 78 L.Ed.2d 138 (1983). Contra, Award Service, Inc. v. Northern California Retail Clerks Unions & Food Employers Joint Pension Fund, 763 F.2d 1066, 1068 (9th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 850, 88 L.Ed.2d 890 (1986); Fentron Industries, Inc. v. National Shopmen Pension Fund, 674 F.2d 1300, 1305 (9th Cir.1982).

Just as clearly, however, this case fell within the federal question jurisdiction of the district court. Dime Coal alleged in its complaint that it was entitled to a refund of the mistaken overpayments under a provision of federal law. The test of federal jurisdiction, where such a claim is raised, is not whether the cause of action alleged was one "on which [the complainant] could actually recover." Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946). Rather the test is whether "the cause of action alleged is so patently without merit as to justify ... the court's dismissal for want of jurisdiction." Hagans v. Lavine, 415 U.S. 528, 542-43, 94 S.Ct. 1372, 1381-82, 39 L.Ed.2d 577 (1974) (quoting Bell v. Hood, 327 U.S. at 683, 66 S.Ct. at 776. See also Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 94 S.Ct. 772, 39 L.Ed.2d 73 (1974) (test is whether right claimed is "so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy"). We have previously stated that "[w]here the defendant's challenge to the court's jurisdiction is also a challenge to the existence of a federal cause of action, the proper course of action ... is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff's case." Williamson v. Tucker, 645 F.2d 404, 415 (5th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981). See also Simanonok v. Simanonok, 787 F.2d 1517, 1519-20 (11th Cir.1986). This is such a case.

II

Turning to the question of whether a federal cause of action in favor of a contributing employer for the return of mistaken contributions to a multiemployer employee benefit plan exists, appellants argue that the applicable federal statutes neither expressly nor by reasonable implication vest in a contributing employer the right to bring suit to require the trustees of a multiemployer plan to return contributions that were mistakenly made. For this reason, the trustees argue, the district court erred in failing to dismiss Dime Coal's complaint for failure to state a claim upon which relief could be granted. We agree.

Section 502(a) of ERISA expressly provides that certain enumerated individuals may bring civil suits to enforce obligations arising under ERISA or under employee benefit plans. See 29 U.S.C. Sec. 1132(a) (1982). 2 Participants, beneficiaries, fiduciaries, and the Secretary of Labor are authorized to file a wide variety of civil suits to obtain enforcement or clarification of obligations arising under ERISA or under an employee benefit plan, but section 502(a) does not authorize contributing employers to bring any kind of civil suit at all.

Dime Coal maintains, however, that a federal remedy in favor of an employer to recover contributions mistakenly made to a multiemployer plan should be implied in the ERISA provision that authorizes trustees to return employer contributions that are discovered to have been made by mistake. The refund provision at issue in this case modifies section 403(c)(1) of ERISA, which provides that the assets of employee benefit plans be held in trust, and that "the assets of a 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. Sec. 1103(c)(1) (1982). Section 403(c)(2)(A)(ii) sets forth a narrowly drawn exception to the mandate of section 403(c)(1):

In the case of a contribution ... (ii) made by an employer to a multiemployer plan by mistake of fact or law ..., paragraph (1) shall not prohibit the return of such contribution or payment to the employer within six months after the plan administrator determines that the contribution was made by such a mistake.

29 U.S.C. Sec. 1103(c)(2)(A)(ii) (1982). 3 Dime Coal invites us to imply in this provision a civil right of action in a contributing employer to require the trustees of a plan to return overpayments whose refund is authorized by the statute.

Applying the four factor test of Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), 4 the Ninth Circuit has determined First, the 1980 amendment to section 403(c)(2)(A), which added subparagraph (ii) concerning payments made by an employer by mistake of fact or law, was clearly designed for the benefit of employers ... Second, a congressional intent to...

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