Eisenrich v. Minneapolis Retail Meat Cutters

• Decision Date: 31 July 2009
• Docket Number: No. 08-2230.,08-2230.
• Citation: 574 F.3d 644
• Parties: Thomas EISENRICH, Appellee, v. MINNEAPOLIS RETAIL MEAT CUTTERS AND FOOD HANDLERS PENSION PLAN, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

574 F.3d 644

Thomas EISENRICH, Appellee, v. MINNEAPOLIS RETAIL MEAT CUTTERS AND FOOD HANDLERS PENSION PLAN, Appellant.

No. 08-2230.

United States Court of Appeals, Eighth Circuit.

Submitted: December 12, 2008.

Filed: July 31, 2009.

Carl S. Wosmek, argued, Amy Lu Court and Amamnda R. Cefalu, on the brief, Minneapolis, MN, for appellant.

Robert J. Hajek, argued, Donald Lawrence Beauclaire, on the brief, Minneapolis, MN, for appellee.

Before COLLOTON and SHEPHERD, Circuit Judges, and GOLDBERG,^* Judge.

COLLOTON, Circuit Judge.

After retiring from his job as a meat cutter, Thomas Eisenrich began receiving monthly benefits from the Minneapolis Retail Meat Cutters and Food Handlers Pension Plan ("Plan"). When Eisenrich later began to work as an independent distributor for a baked goods company, however, the Plan stopped paying his monthly benefits, asserting that his new employment made him ineligible. Eisenrich brought suit against the Plan under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., alleging that his benefits were wrongfully suspended. The district court granted summary judgment for Eisenrich and awarded him attorneys' fees. The Plan appeals. We affirm the grant of summary judgment but reverse the award of attorneys' fees.

I.

The Minneapolis Retail Meat Cutters and Food Handlers Pension Plan is a pension fund created by agreement between Minneapolis-area employers in the retail food and meat industry and the Amalgamated Meat Cutters and Butcher Workmen of North America, District Local 653. As part of the agreement, the employers are required to contribute to the pension fund on behalf of their employees represented by the union. When these employees retire, they become eligible to receive from the fund a monthly pension benefit.

Like most employee pension funds, the Plan is subject to the requirements of ERISA. Under ERISA, pension plans must provide that "an employee's right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age." 29 U.S.C. § 1053(a). Consistent with this requirement, however, multiemployer plans may condition benefits on an employee's promise not to engage in certain kinds of employment after retirement. If a retiree returns to work "in the same industry, in the same trade or craft, and the same geographic area covered by the plan," ERISA allows the retiree's benefits to be suspended for as long as he remains in that employment. Id. § 1053(a)(3)(B)(ii). Incorporating these terms, the Plan provides that a retiree's "monthly benefit will be suspended for any month for which he was paid for at least 64 hours in Disqualifying Employment" —namely, employment in "an industry ... covered by the Plan," in "the geographic area covered by the Plan," and in "a trade or craft in which [he] worked under the Plan at any time."

As a meat cutter for thirty years, Eisenrich was a member of the union and a participant in the Plan. After he retired in 2001, Eisenrich began receiving pension benefits of approximately $1600 per month. The Plan suspended his monthly benefits in March 2002, after he accepted a position supervising the meat department at a Target store. According to the Plan, Eisenrich's job in the meat department was disqualifying, because it was in the same industry, in the same trade or craft, and in the same geographic area as his previous job as a meat cutter. In May 2004, Eisenrich informed the Plan that he had left his position at Target and that he intended to begin work as an independent distributor, or "sales development associate," for Pepperidge Farm, a baked goods company. The Plan resumed monthly benefit payments the next month.

In 2005, the Plan asked all retirees who were receiving monthly benefits to complete a form describing any employment in which they were then engaged. Eisenrich submitted an affidavit confirming that he was working an average of 160 hours per month as a distributor for Pepperidge Farm, delivering and merchandising the company's products. Concerned that Eisenrich was engaged in disqualifying employment, the Plan researched Eisenrich's position on Pepperidge Farm's website, where it verified that "sales development associates" were involved in merchandising the company's products. The Plan also hired a private investigator to document Eisenrich's work activities. After conducting over eighty-three hours of surveillance, the investigator reported observing Eisenrich deliver boxes of Pepperidge Farm baked goods to retail stores in the geographic area covered by the Plan.

Based on Eisenrich's affidavit, Pepperidge Farm's website, and the private investigator's report, the Plan concluded that Eisenrich was working in the same industry, in the same trade or craft, and in the same geographic area as when he was a meat cutter. In January 2006, the Plan informed Eisenrich that it was suspending his benefits, retroactive to July 1, 2005, the date he submitted his affidavit. Eisenrich appealed to the Plan's Board of Trustees, which upheld the decision to suspend his benefits. When Eisenrich requested arbitration, the Board concluded that he had no right to arbitration under the terms of the Plan.

Eisenrich brought suit against the Plan under section 502(a)(1)(B) of ERISA, which allows actions by a plan participant or beneficiary "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Eisenrich sought an order compelling arbitration, claiming that the Plan wrongfully denied his right to appeal the Board's decision to an arbitrator. In the alternative, Eisenrich sought reinstatement of his monthly benefits and recovery of benefits wrongfully suspended. He alleged that he was not engaged in disqualifying employment, and that even if he was, the Plan was equitably estopped from suspending his benefits because it resumed payments after learning of his Pepperidge Farm distributorship in May 2004.

The district court dismissed Eisenrich's arbitration claim, concluding that the terms of the Plan afforded him no right to arbitration. Proceeding to the merits of the Plan's decision to suspend Eisenrich's benefits, the district court determined that Eisenrich's job as an independent distributor for Pepperidge Farm was not in the same "trade or craft" as his previous job as a meat cutter. Eisenrich v. Minneapolis Retail Meat Cutters & Food Handlers Pension Plan, 544 F.Supp.2d 848, 858 (D.Minn.2008). The court sua sponte granted summary judgment for Eisenrich on the ground that he was not engaged in disqualifying employment, and dismissed his equitable estoppel claim as moot. Id. Finding, among other things, that the Plan's decision to suspend Eisenrich's benefits "patently lacked merit," the court exercised its discretion under ERISA to award Eisenrich $25,800 in attorneys' fees.

II.

The Plan argues that the district court erred in granting summary judgment for Eisenrich. We review the district court's decision de novo, and we will affirm the grant of summary judgment if, viewing the evidence in the light most favorable to the Plan, there is no genuine issue of material fact and Eisenrich is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); West v. Local 710, Int'l Bhd. of Teamsters Pension Plan, 528 F.3d 1082, 1085 (8th Cir.2008).

The question before us is whether the Plan wrongfully suspended Eisenrich's monthly pension benefits. The Plan's trust agreement gives the Plan's trustees "full and exclusive authority to determine all questions of coverage and eligibility," as well as "full power to construe" the terms and provisions of the agreement and "the bylaws and regulations issued thereunder." Accordingly, we review the Plan's decision to suspend Eisenrich's benefits for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). We will not disturb the Plan's decision so long as it is based on a reasonable interpretation of the Plan's terms and is supported by substantial evidence in the record before the Plan's administrators. King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 999 (8th Cir.2005) (en banc).

Under the Plan, a participant's benefits may be suspended in any month he works at least sixty-four hours in "an industry ... covered by the Plan," in "the geographic area covered by the Plan," and in "a trade or craft in which the Participant worked under the Plan at any time." Eisenrich does not dispute that as an independent distributor for Pepperidge Farm, he works more than sixty-four hours per month in "an industry ... covered by the Plan" and in "the geographic area covered by the Plan." Nor does he dispute that he was previously employed under the Plan in the "trade or craft" of meat cutting. Whether the Plan abused its discretion in suspending Eisenrich's benefits thus turns on whether his current employment as an independent distributor is in the same "trade or craft" as his previous employment as a meat cutter.

The Plan maintains that its decision to suspend Eisenrich's benefits rests on a reasonable interpretation of the Plan's language. According to the Plan, a "trade or craft" refers to the skills typically performed by current employees within a certain occupation. On this view, the "trade or craft in which [Eisenrich] worked under the Plan" refers to the skills generally used by meat cutters today, not the skills actually used by Eisenrich himself. Based on the description of "meat cutter" in the union's collective bargaining agreement, the Plan contends that present-day meat cutters are involved in stocking shelves, rotating products in displays, and ordering new products—activities in which they use merchandising and other retail skills. The Plan asserts that independent distributors, like Eisenrich, use those same...