Bosiger v. U.S. Airways

Decision Date14 December 2007
Docket NumberNo. 06-2085.,06-2085.
Citation510 F.3d 442
PartiesEdwin Perrow BOSIGER, Jr., Plaintiff-Appellant, v. US AIRWAYS, Incorporated; US Airways Group, Incorporated; Allegheny Airlines, Incorporated; Piedmont Airlines; Midatlantic Airways, Incorporated; US Airways Leasing And Sales, Incorporated; Material Services Company, Incorporated; PSA Airlines, Incorporated; Airways Assurance, Ltd; The Plan Inaccurately Titled Non-qualified Top Retirement Plan, Defendants-Appellees, and Tom G. Davis, Party in Interest.
CourtU.S. Court of Appeals — Fourth Circuit

ARGUED: Sara Pikofsky, Thelen, Reid, Brown, Raysman & Steiner, L.L.P., Washington, D.C., for Appellant. Christopher Alan Weals, Morgan, Lewis & Bockius, L.L.P., Washington, D.C., for Appellees. ON BRIEF: Sherwin S. Kaplan, Byron L. Pickard, Thelen, Reid, Brown, Raysman & Steiner, L.L.P., Washington, D.C., for Appellant. Bridgit M. DePietto, Morgan, Lewis & Bockius, L.L.P., Washington, D.C., for Appellees.

Before WILKINSON and MOTZ, Circuit Judges, and Louise W. FLANAGAN, Chief United States District Judge for the Eastern District of North Carolina, sitting by designation.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge MOTZ and Judge FLANAGAN joined.


WILKINSON, Circuit Judge:

In August 2002, U.S. Airways filed for bankruptcy. In order to secure the financing necessary to emerge from bankruptcy, U.S. Airways was forced to terminate the pension plans it administered for its active and retired pilots. A bankruptcy court approved this termination, and this court eventually held that a claim to reverse the termination was equitably moot. In September 2004, U.S. Airways again filed for bankruptcy. A year later, U.S. Airways emerged from this second bankruptcy with a second plan of reorganization.

Six months after U.S. Airways's emergence from its second bankruptcy, Edwin Perrow Bosiger, Jr., brought suit in federal district court contending that U.S. Airways had improperly terminated his pension during its first bankruptcy. The district court dismissed Bosiger's claim, holding that it was barred because Bosiger failed to file a proof of claim during U.S. Airways's second bankruptcy. After careful consideration, we agree with the district court and affirm its decision. It is simply too late in the day for Bosiger to challenge the termination of his pension: unwinding U.S. Airways's second bankruptcy at this stage would not only unduly lengthen the airline's restructuring, but it would also upset the legitimate interests of those creditors who relied on U.S. Airways's reorganization plan.


In the mid-1990s, U.S. Airways Group, Inc. ("US Airways"), and the Air Line Pilots Association ("ALPA"), an international union representing U.S. Airways's active pilots, reached an agreement on retirement benefits. This agreement called for retired pilots to receive, on a monthly basis, a share of their final salary adjusted for the length of their tenure with U.S. Airways.

In order to provide these monthly benefits, U.S. Airways established a pension plan referred to as the Non-Qualified Top Hat Retirement Plan ("Non-Qualified Plan"). The Non-Qualified Plan supplemented the pre-existing Retirement Income Plan for Pilots of U.S. Airways ("Pilots Defined Benefit Plan"). The Pilots Defined Benefit Plan was a tax-qualified pension plan capped by the Internal Revenue Code, such that it alone could not provide the total retirement benefits promised to U.S. Airways's pilots under the agreement with ALPA.

The Non-Qualified Plan, on the other hand, paid retirement benefits above and beyond those payable by the Pilots Defined Benefit Plan. Although never memorialized in a written contract, the Non-Qualified Plan was maintained pursuant to the original collective bargaining agreement and subsequent letters of agreement between U.S. Airways and ALPA. These letters recognized that the Non-Qualified Plan was necessary "to pay benefits which cannot be paid from the [Pilots Defined Benefit Plan] due to [limitations imposed by the] Internal Revenue Code."

On August 11, 2002, U.S. Airways filed for Chapter 11 bankruptcy.1 In order to continue its operations during its reorganization and successfully emerge from Chapter 11, U.S. Airways needed almost $1.75 billion in financing. US Airways was able to assemble a syndicate of lenders willing to provide this amount, but the lenders were only willing to extend the credit if U.S. Airways was able to meet certain financial targets.

A major threat to U.S. Airways's ability to access the loans was an escalating pension funding problem, particularly with respect to its pilots, who accounted for a substantial portion of U.S. Airways's outstanding pension obligations. At the same time passenger revenues had dropped precipitously in the wake of the September 11th terrorist attacks, lower interest rates and a poor stock market had greatly decreased the performance of U.S. Airways's defined benefit pension plans, increasing the airline's projected contribution to the plans. This left U.S. Airways with insufficient cash flow to both meet its pension obligations and achieve the financial targets necessary to access the required funding. After exploring various potential solutions to this problem, U.S. Airways determined that, so long as its pilot pension plans were in place, it would be unable to secure the financing it needed to emerge from Chapter 11.

US Airways thus sought to restructure its pilot pension obligations, with its ultimate goal being the termination of the two existing pension plans (Pilots Defined Benefit Plan and Non-Qualified Plan) and their replacement with a defined contribution plan. To do so, U.S. Airways petitioned the bankruptcy court to allow a "distress termination" of its Pilots Defined Benefit Plan under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1341(c)(2)(B)(ii)(IV) (2000). US Airways did not specifically request the "distress termination" of the Non-Qualified Plan because it was under the belief that the Non-Qualified Plan was a "top hat" plan, terminable simply pursuant to an express agreement between U.S. Airways and ALPA approved by the bankruptcy court.

In March 2003, the bankruptcy court ruled that U.S. Airways satisfied ERISA's standards for distress termination. The court therefore allowed U.S. Airways to terminate the Pilots Defined Benefit Plan, subject to a determination that the proposed termination did not violate the collective bargaining agreement with ALPA. U.S. Airways and ALPA subsequently issued Letter of Agreement #85, which approved the termination of both pilot pension plans. The letter stated that the Pilots Defined Benefit Plan "will be terminated . . . and merged into" a new defined contribution plan available only to active and non-retired pilots, while "the [Non-Qualified Plan] will be terminated, and payments will permanently cease, effective March 31, 2003."

In light of this letter, the bankruptcy court authorized U.S. Airways's "distress termination." At about the same time, the bankruptcy court also approved U.S. Airways's reorganization plan, one part of which stated that all retirement plans sponsored by U.S. Airways "will continue in effect except, to the extent terminated in accordance with applicable law, the Retirement Income Plan for Pilots of U.S. Airways, Inc. and related (non-qualified) Top Hat Plan." Finally, on March 31, 2003, U.S. Airways emerged from bankruptcy, stopped paying benefits on the old Pilots Defined Benefit and Non-Qualified Plans, and started contributing to the new defined contribution plan for non-retired pilots. At this point, retired pilots began to receive benefits from the Pension Benefit Guaranty Corporation, which had guaranteed the Pilots Defined Benefit Plan.

As U.S. Airways emerged from bankruptcy, U.S. Airways's retired pilots appealed the district court's distress termination decision, seeking to have their old pension benefits restored. But since the retired pilots had neglected to have the termination and reorganization orders stayed, and since the orders had been implemented and relied on by third parties, the district court held that the suit was equitably moot. This court affirmed on the same grounds in In re U.S. Airways Group, Inc., 369 F.3d 806, 807 (4th Cir.2004).

In September 2004, U.S. Airways again filed for bankruptcy. A year later, in September 2005, U.S. Airways emerged from its second bankruptcy with a new plan of reorganization.


Petitioner Edwin Perrow Bosiger, Jr., is a retired U.S. Airways pilot who, before U.S. Airways's first bankruptcy, had received benefits from both the Pilots Defined Benefit Plan and the Non-Qualified Plan. During U.S. Airways's second bankruptcy, U.S. Airways notified Bosiger by letter of (1) the Chapter 11 filing date and the bar date for filing general unsecured claims and (2) entry of the order confirming the second Plan of Reorganization, the effective date of the Plan of Reorganization, and the bar date for filing certain administrative and rejection damage claims. Though provided with these two notices, Bosiger did not file a claim during the second bankruptcy.

Bosiger instead chose to bring suit against U.S. Airways six months later, filing a complaint in the United States District Court for the Eastern District of Virginia on March 27, 2006. Bosiger argued that U.S. Airways had improperly terminated the Non-Qualified Plan during its first bankruptcy because the Non-Qualified Plan was a "top hat" plan in name only, and therefore not terminable merely through express agreement between U.S. Airways and ALPA. Bosiger therefore contended that he was still entitled to his benefits under the Non-Qualified Plan.

US Airways responded by filing a Rule 12(b)(6) motion, alleging that Bosiger's complaint failed to state a claim for various reasons. Most relevant to this appeal, U.S. Airways argued that,...

To continue reading

Request your trial
826 cases
  • Wright v. Carroll Cnty. Bd. of Educ.
    • United States
    • U.S. District Court — District of Maryland
    • August 26, 2013
    ...(2011). Moreover, a court "is not to consider matters outside the pleadings or resolve factual disputes . . . ." Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007). However, the court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 ......
  • In re Boyd
    • United States
    • U.S. Bankruptcy Court — District of South Carolina
    • July 17, 2020
    ...2015). A general denial does not constitute the strong evidence needed to overcome the presumption of receipt. Bosiger v. US Airways , 510 F.3d 442 (4th Cir. 2007). In Bosiger , the Fourth Circuit observed that if it was to hold that a general denial of receiving notice by mail was sufficie......
  • Washington v. Balt. Police Dep't
    • United States
    • U.S. District Court — District of Maryland
    • May 6, 2020
    ...expressly incorporated therein." Clatterbuck v. City of Charlottesville , 708 F.3d 549, 557 (4th Cir. 2013) ; see Bosiger v. U.S. Airways , 510 F.3d 442, 450 (4th Cir. 2007). However, a court may properly consider documents incorporated into the complaint or attached to the motion to dismis......
  • Whye v. Concentra Health Servs., Inc.
    • United States
    • U.S. District Court — District of Maryland
    • September 24, 2013 resolving a motion under Rule 12(b)(6), a court "is not to consider matters outside the pleadings . . . ." Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007). But, under Fed. R. Civ. P. 12(d), a district court has "complete discretion to determine whether or not to accept t......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT