Jamail, Inc. v. Carpenters Dist. Council of Houston Pension & Welfare Trusts

• Decision Date: 27 February 1992
• Docket Number: No. 91-2084,91-2084
• Citation: 954 F.2d 299
• Parties: , 14 Employee Benefits Cas. 2629 JAMAIL, INC., Plaintiff-Appellee, Cross-Appellant, v. The CARPENTERS DISTRICT COUNCIL OF HOUSTON PENSION & WELFARE TRUSTS, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 299

954 F.2d 299

60 USLW 2576, 14 Employee Benefits Cas. 2629

JAMAIL, INC., Plaintiff-Appellee, Cross-Appellant, v. The CARPENTERS DISTRICT COUNCIL OF HOUSTON PENSION & WELFARE TRUSTS, Defendant-Appellant, Cross-Appellee.

No. 91-2084.

United States Court of Appeals Fifth Circuit.

Feb. 27, 1992.

Rehearing Denied March 25, 1992.

Richard J. Davis, Jr., Pappy & Davis, Los Angeles, Cal., Douglas M. Selwyn, Pope, Shoemake, Selwyn, Aguren & Kerr, Houston, Tex., for defendant-appellant cross-appellee.

L.G. Clinton, Jr., Phyllis A. Finger, Houston, Tex., for plaintiff-appellee cross-appellant.

Appeals from the United States District Court for the Southern District of Texas.

Before WILLIAMS, DUHE, and EMILIO M. GARZA, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Jamail, Inc. brought suit for restitution of $51,434.68 in erroneously-paid contributions to multiemployer trust funds managed by the Houston District Council of Carpenters Pension Plan and The Houston District Council of Carpenters Health and Welfare Trust ("Trust Funds"). After two hearings and the filing of Agreed Stipulations of Facts, the district court recognized a federal common law right of restitution pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 88 Stat. 829, as amended 29 U.S.C. § 1001, et seq. (1988). The court granted summary judgment in favor of Jamail and ordered the Trust Funds to return 80% of the overpayment. The remaining 20% of the overpayment was granted to the Trust Funds to cover administrative fees. 752 F.Supp. 741.

The Trust Funds appeal the granting of the summary judgment in favor of Jamail, and Jamail appeals the 20% offset in favor of the Trust Funds. We affirm the judgment of restitution in favor of Jamail. We reverse, however, the 20% offset and render an offset of $600.00.

I. FACTS

The Agreed Stipulation of Facts enunciates the central facts pertinent to the case. The Trust Funds are employee benefit plans within the meaning of Section 3 of ERISA. Jamail is a general contractor in Texas who entered into four collective bargaining agreements with the Trust Funds between 1984 and 1986. Jamail agreed to make contributions to the Trust Funds on behalf of its employees.

On October 8, 1986, the Trust Funds requested that Jamail submit its payroll records of four jobs covering the period of January 1984 through December 1986 for an audit. The Trust Funds strive to audit every contributing employer once every four years. The parties exchanged correspondence in an attempt to clarify the procedures to be followed in the audit, and Jamail eventually agreed to the audit on November 7, 1986. Jamail, however, did not make its records available to the auditors until February 27, 1987.

Prior to the audit of Jamail, the Trustees of the Trust Funds adopted a policy regarding the refund of contributions mistakenly made by employers. The policy is stated in the minutes of the regularly scheduled meeting of the Trustees held on February 11, 1987. The Trustees determined that refunds are to be limited to only those contributions mistakenly paid in the six month period prior to the date the Trustees are notified of the claim. The Trustees adopted the policy retroactively, and Jamail was given no notice of the policy.

The auditors discovered Jamail made excess contributions in the amount of $51,434.68. Jamail's employees worked at numerous job sites, and they were rotated among the job sites. The audit revealed that Jamail had erroneously contributed to the Trust Funds for hours worked on jobs not covered by the collective bargaining agreements. The Trustees informed Jamail of its overpayment by letter dated June 8, 1987, and Jamail requested a refund of the full amount on November 10, 1987. Pursuant to the refund policy, however, the Trust Funds offered to refund only $1,146.00. This amount represented Jamail's overpayments for the last six months of 1986 less $600.00 as an administrative audit fee.

Jamail brought suit for a refund under two alternate theories: (1) a statutory right to recovery of mistakenly paid contributions under ERISA; or (2) a federal common law claim for restitution. The district court granted Jamail's summary judgment for recovery under the federal common law of restitution but offset the judgment by an administrative fee of 20%. It is this judgment from which the parties now appeal.

II. DISCUSSION

If Jamail was to bring suit for recovery of its mistakenly paid contributions, it initially had three options: (1) a state law claim; (2) a private right of action under ERISA; or (3) a federal common law cause of action. The state law claim and private right of action under ERISA were unavailing; Jamail's only recourse was a federal common law cause of action.

The enactment of ERISA preempted state law in employee benefit plan regulation. In Section 1144(a), the statute itself expressly provides for preempting state law. ¹ Moreover, the caselaw, without exception, has confirmed ERISA's preemption of state law. See, e.g., FMC Corp. v. Holliday, --- U.S. ----, 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990); Pitts by and through Pitts v. American Security Life Ins. Co., 931 F.2d 351, 355 (5th Cir.1991); Morales v. Pan American Life Ins. Co., 914 F.2d 83 86 (5th Cir.1990); Hayden v. Texas-U.S. Chemical Co., 681 F.2d 1053, 1057 (5th Cir.1982). Thus, there can be no recompense under state law.

Similarly, Jamail was unable to maintain a private cause of action under ERISA. In a previous opinion, this Court stated in dicta: "While we tend to agree that ERISA does not provide a private right of action to an employer seeking to recover mistakenly overpaid contributions, we do not feel the need to address an issue which has already split the Circuits." South Central United Food & Commercial Workers Union v. C & G Markets, Inc., 836 F.2d 221, 224 (5th Cir.), cert. denied, 486 U.S. 1056, 108 S.Ct. 2823, 100 L.Ed.2d 924 (1988). Now that we are faced with a case openly confronting the issue, we address it more directly.

Civil enforcement of ERISA is governed by 29 U.S.C. § 1132, which provides that a civil action may be brought only by a participant, ² a beneficiary, ³ a fiduciary, ⁴ or the Secretary. ⁵ Employers are conspicuously absent from the list of those entitled to bring a civil action. "Where Congress has defined the parties who may bring a civil action founded on ERISA, we are loathe to ignore the legislature's specificity. Moreover, our previous decisions have hewed to a literal construction of § 1132(a)." Hermann Hospital v. Meba Medical & Benefits Plan, 845 F.2d 1286, 1288-89 (5th Cir.1988). We conclude that Jamail, therefore, had no right of action under Section 1132.

Jamail asserts that even if it did not have a right of action under Section 1132, it did have a right of action under Section 1103. This section provides:

In the case of a contribution ... if such contribution or payment is made by an employer to a multiemployer plan by a mistake of fact or law ... paragraph (1) shall not prohibit the return of such contribution or payment to the employer within 6 months after the plan administrator determines that the contribution was made by such a mistake.

29 U.S.C. § 1103(c)(2)(A)(ii) (emphasis added). Jamail, thus, argues that Section 1103 provides an employer with a right of action for mistakenly paid contributions. This argument is unavailing.

The legislative history of Section 1103 does not indicate that Congress intended to create a right to such contributions. Whitworth Bros. Storage Co. v. Central States, Southeast and Southwest Areas Pension Fund, 794 F.2d 221, 230-31 (6th Cir.), cert. denied, 479 U.S. 1007, 107 S.Ct. 645, 93 L.Ed.2d 701 (1986). The language of Section 1103 is permissive, simply allowing, but not mandating, pension funds to return contributions. In fact, Section 403(c)(2)(A)(ii) was enacted to allow trustees of a fund to refund mistaken contributions without facing a suit by beneficiaries for violating the non-inurement provision of Section 403(c)(1). Plucinski v. I.A.M. National Pension Fund, 875 F.2d 1052, 1055 (3rd Cir.1989). In light of both the permissiveness of Section 1103 and the specificity of Section 1132, it would be improper to imply a right of action under Section 1103.

Thus, we hold, as a number of our colleagues in other Circuits have, ⁶ that employers do not have a private right of action under ERISA. Jamail's only remaining possible opportunity for recompense is through a federal common law action of restitution.

The application of federal common law to a statute is not an example of the judiciary rewriting legislation. "To the contrary, the inevitable incompleteness presented by all legislation means that interstitial federal lawmaking is a basic responsibility of the federal courts." United States v. Little Lake Misere Land Co., Inc., 412 U.S. 580, 594, 93 S.Ct. 2389, 2397, 37 L.Ed.2d 187 (1973). Whenever Congress enacts complex and comprehensive legislation, such as ERISA, minor gaps in the legislation are unavoidable. Congress cannot be expected to perceive in advance all the ramifications of its legislation. It is the judiciary's role, therefore, to fill in these gaps.

Examples of the application of federal common law to sweeping legislation can be found throughout the case law: Trans World Airlines, Inc. v. Independent Federation of Flight Attendants, 489 U.S. 426, 109 S.Ct. 1225, 1230, 103 L.Ed.2d 456 (1989) (applying federal common law with respect to reinstatement rights of strikers under the Railway Labor Act); International Brotherhood of Electrical Workers, AFL-CIO v. Hechler, 481 U.S. 851, 855, 107 S.Ct. 2161, 2165, 95 L.Ed.2d 791 (1987) (citing an earlier opinion for the proposition that Congress intended the federal courts to develop a body of common law for the enforcement of collective bargaining agreements pursuant to the Labor Management Relations Act); Pennzoil Co. v. F.E.R.C., 645 F.2d 360, 387 (5th Cir.19...