Phillips v. Bebber, GLI-A
| Decision Date | 25 October 1990 |
| Docket Number | 89-2189,GLI-U,GLI-A,Nos. 89-2184,s. 89-2184 |
| Citation | 914 F.2d 31 |
| Parties | 12 Employee Benefits Ca 2297 William David PHILLIPS; William E. McKinney; J.C. Simpson; Lawrence F. Lovato; Harold Atkins, Individually and as representatives of a class of plaintiffs similarly situated, Plaintiffs-Appellees, v. Herbert R. BEBBER; Edward W. Erkel; B.B. Scarborough; Walker Kellog; John Litzler; Lawrence Wagner, as trustees of the Trailways Lines, Inc.--Trailways, Inc. Joint Council, A.T.U. Retirement and Disability Plan, and Walker Kellog, John Litzler, Lawrence Wagner, William Ginn, James D. Wood and William Dize, Jr., as trustees of the Trailways Lines, Inc.--Trailways, Inc. Joint Council, U.T.U. Retirement and Disability Plan, Defendants-Appellants, Pension Benefit Guaranty Corp., Amicus Curiae, and Greyhound Lines, Inc.; Jerry M. Hatalla; Jim Cushing Murray; Rafael Rivera; Edward Strait; Robert M. Tucker; Smith Williamson; Kevin Bolton; J. Michael Doyle; P. Anthony Lannie; Judy Collins; L.L. Petrie; Robert Tancos, as trustees ofT.U. Mirror Image Trailways Lines, Inc.--Trailways, Inc. Joint Council A.T.U. Retirement and Disability Plan andT.U. Mirror Image Trailways Lines, Inc.--United Transportation Union and Disability Plan; Ernest L. Jones, Defendants. William David PHILLIPS; William E. McKinney; J.C. Simpson; Lawrence F. Lovato; Harold Atkins, Individually and as representatives of a class of plaintiffs similarly situated, Plaintiffs-Appellees, v. GREYHOUND LINES, INC., Defendant-Appellant, Pension Benefit Guaranty Corp., Amicus Curiae, and Herbert R. Bebber; Edward W. Erkel; B.B. Scarborough; Walker Kellog; John Litzler, Lawrence Wagner, as trustees of the Trailways Lines, Inc.--Trailways, Inc. Joint Council, A.T.U. Retirement and Disability Plan, and Walker Kellog, John Litzler, Lawrence Wanger, William Ginn, James D. Wood and William Dize, Jr., as trustees of the Trailways Lines, Inc.--Trailways, Inc. Joint Council, U.T.U. Retirement and Disability Plan; Jerry M. Hatalla; Jim Cushing Murray; Rafael Rivera; Edward Strait; Robert M. Tucker; S |
| Court | U.S. Court of Appeals — Fourth Circuit |
Richard Witte Alexander, Johnson & Gibbs, Austin, Tex., argued (James M. Shoemaker, Jr., Wyche, Burgess, Freeman & Parham, Greenville, S.C., on brief), for appellants.
Kenton Hambrick, Pension Benefit Guar. Corp., argued (Carol Connor Flowe, Gen. Counsel, Jeanne K. Beck, Deputy Gen. Counsel, Israel Goldowitz, Asst. Gen. Counsel, and Gennice D. Brickhouse, Pension Benefit Guar. Corp., on brief), Washington, D.C., for amicus curiae.
J. Kendall Few, argued (James R. Gilreath, Barney O. Smith, Jr. and B. Joel Stoudenmire, on brief), Greenville, S.C., for appellees.
Before RUSSELL and SPROUSE, Circuit Judges, and DUPREE, Senior United States District Judge for the Eastern District of North Carolina, sitting by designation.
This case presents one important issue: whether strict compliance with the terms and procedures set forth in Title IV of ERISA, 29 U.S.C. Secs. 1301 et seq., is a prerequisite to the termination of an employee retirement and disability benefit plan. Because we find that strict compliance is mandated by the statute, the cause is hereby remanded to the district court with instructions to terminate the plans that are the subject of this litigation in accordance with ERISA.
The salient facts are undisputed. In July of 1987, Trailways Lines, Inc. ceased operations. At that time, Trailways sold the bulk of its assets to Greyhound, and all employees were terminated. Upon termination, all of the Trailways employees were offered jobs by Greyhound and substantially all accepted. At the time Trailways ceased doing business, its employees were the beneficiaries of two retirement plans, the ATU Retirement and Disability Plan and the UTU Retirement and Disability Plan. These separate plans, containing identical provisions, were adopted for the two unions representing Trailways employees.
In November of 1987, the trustees of the UTU plan convened and adopted a resolution terminating that plan. The resolution provided in pertinent part:
Pursuant to Section 8.1 of the Plan, this Plan shall terminate in the event of the dissolution, merger, consolidation or reorganization of the TRAILWAYS LINES, INC. (hereinafter referred to as the "COMPANY"). The COMPANY ceased active conduct of its business on approximately July 14, 1987, and is currently under involuntary reorganization.
IT IS THEREFORE RESOLVED that following the adoption of any necessary Plan amendments, the Plan shall be terminated at the earliest date permitted by law, subject only to compliance with all statutory or regulatory requirements for defined pension plan termination.
It is further resolved that all participants who were employed by the Company when it ceased active conduct of its business (on or about July 14, 1987) shall become fully vested in their accrued benefits to the extent funded.
IT IS FURTHER RESOLVED that the appropriate agents of the Trustees shall be, and hereby are, authorized, empowered and directed to prepare an amendment reflecting the termination of the Plan and to take other further action as may be necessary or appropriate to effectuate the termination of the Plan and to carry out the purposes and intent of these Resolutions.
(Emphasis added.)
In August of 1988, William Phillips, representing a subclass of plaintiffs who, after being terminated by Trailways, did not go to work for Greyhound, commenced this action seeking complete termination of the ATU plan and the UTU plan. Phillips sought a judicial determination that the plans had in fact been dissolved and that the participants were entitled to a distribution of the assets. Greyhound filed an Answer and Counterclaim alleging that Trailways had not dissolved, merged,...
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