Fleck v. Spannaus
| Decision Date | 19 March 1976 |
| Docket Number | No. 3-75 Civ. 178.,3-75 Civ. 178. |
| Citation | 412 F. Supp. 366 |
| Parties | Walter J. FLECK et al., Plaintiffs, v. Warren SPANNAUS et al., Defendants. |
| Court | U.S. District Court — District of Minnesota |
John R. Kenefick, Briggs & Morgan, St. Paul, Minn., together with Maurice J. McCarthy, Ettelson, O'Hagan, Ehrich & Frankel, Chicago, Ill., for plaintiffs.
Warren Spannaus, Atty. Gen., State of Minnesota by James P. Gerlach, Richard S. Slowes, and Kathryn Rush, Sp. Asst. Attys. Gen., St. Paul, Minn., for defendants.
Plaintiffs have commenced the above-entitled action challenging the validity and enforceability of the Minnesota Private Pension Protection Act, Minn.Stat. § 181B.01 et seq. (1974) (hereinafter the "Minnesota Pension Act"). The matter is presently before the court on motions by plaintiffs and defendants.
Plaintiffs Walter J. Fleck and Edyth A. Hamler are citizens and residents of Illinois who are salaried employees of the corporate plaintiff, Allied Structural Steel Company. Plaintiff E. A. Richert is a citizen and resident of Illinois who is presently acting as Fiduciary of the Allied Structural Steel Company Salaried Employees' Pension Plan. Allied Structural Steel Company (hereinafter "Allied") is a Delaware corporation with its principal place of business in Indiana.
The individual defendants are various state officials whose duties include enforcing the Minnesota Pension Act. Warren Spannaus is the Attorney General; E. I. Malone is the Commissioner of Labor and Industry; and Phyllis Speilman is the Administrator of the Pension Protection Division of the Department of Labor and Industry. Also named as a defendant is the Allied Structural Steel Company Salaried Employees' Pension Plan (hereinafter "Pension Plan").
Allied is in the business of fabricating and erecting structural steel, both for intrastate and interstate commerce. In August of 1963, Allied instituted a pension plan for the benefit of its salaried employees. Under the provisions of the pension plan, a salaried employee is entitled to full vesting of his pension for early retirement purposes if: (1) he has worked fifteen continuous years and has attained the age of 60; or (2) after he has attained the age of 55 and has worked 20 continuous years, or a lesser number of continuous years of service, which when added to his age equals the sum of 75; or (3) before reaching age 55, he has at least 25 or more years of continuous service such that the sum of his age and continuous years of service equal 80.
For many years Allied has maintained a division office within Minnesota. The Minnesota office is engaged in the erection of steel structures, such as bridges, in 30 states as well as Minnesota. Allied has begun to phase out its division office and on July 31, 1974 it discharged 11 of its 30 salaried employees in Minnesota. At the time the complaint in the present action was filed, 17 salaried employees in Minnesota still remained employed by Allied and were subject to its pension plan.
On April 10, 1974 the Minnesota Pension Act was enacted into law providing for vested pension benefits for employees after 10 years of service with enforcement provisions directly against the employer. See White Motor Corp. v. Malone, 412 F.Supp. 372 (D.Minn.1976). Pursuant to the provisions of the Minnesota Pension Act the defendant officials have sought to assess a funding charge against plaintiff Allied to provide benefits for the Minnesota employees whose employment has been terminated.
Plaintiffs are challenging the Pension Act on three grounds contending: (1) it is preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (hereinafter, "ERISA"); (2) it became null and void by its own terms when ERISA was enacted; and (3) it is in violation of numerous provisions of the United States Constitution.
Plaintiffs have moved the court for a preliminary injunction, summary judgment and the convening of a three-judge court all on the above-stated grounds. Defendants have requested the court to abstain in order to permit the state law here being challenged to be construed by the state court.
Since the plaintiffs are seeking injunctive relief against state officials, the court's power to grant a preliminary injunction or summary judgment becomes intertwined with the consideration of convening a three-judge court. Under Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974), the court must first examine the claims which it can dispose of as a single judge, before considering the necessity of convening a three-judge court. Accordingly the court will first examine the plaintiffs' statutory claims and then consider its request for a three-judge court.
A challenge to a state statute based on preemption usually involves an examination of both the federal and state statutes to determine whether they are in conflict. Perez v. Campbell, 402 U.S. 637, 644, 91 S.Ct. 1704, 1708, 29 L.Ed.2d 233, 239 (1971). This task is simplified where the challenge to the state law is based on ERISA which contains a specific provision on preemption. 29 U.S.C. § 1144 provides:
Not only has Congress specifically indicated when ERISA would preempt state laws, but it also permitted states to pursue causes of action which arose prior to the date that ERISA became preemptive. The facts giving rise to the State's cause of action occurred prior to January 1, 1975 and plaintiffs brought the present action in December, 1974 to prevent defendants from attempting to enforce the Pension Act. Based on the preemption provision, the court concludes that Minnesota's attempt to enforce its Pension Act has not been preempted by ERISA. Nor is the court persuaded that the retroactivity of some of ERISA's provisions would require a finding of preemption under the existing facts. Accordingly, plaintiffs' motion for preliminary injunction and summary judgment on the grounds of preemption will be denied.
MINNESOTA PENSION ACT'S NULL AND VOID PROVISION
Plaintiffs contend that with the enactment of ERISA on September 2, 1974 the Minnesota Pension Act became null and void. Defendants deny that the null and void provision would necessarily take effect at that time and contend that in any event a federal court should abstain from construing the provision until a state court has had an opportunity to construe it.
The clause sought to be construed is a state enactment and does not present a federal question. It is purely a question of state law. If a state court construes the provision so as to determine that the Minnesota Pension Act became null and void on September 2, 1974, it could eliminate the necessity of ruling on the constitutional questions surrounding the Pension Act.1
Where a state statute is susceptible to a clarifying construction that would alter or eliminate the constitutional question, abstention is justified. Lake Carriers' Ass'n. v. MacMullan, 406 U.S. 498, 510, 92 S.Ct. 1749, 1757, 32 L.Ed.2d 257, 268 (1972); Zwickler v. Koota, 389 U.S. 241, 249, 88 S.Ct. 391, 396, 19 L.Ed.2d 444, 450 (1967).
However, abstention by a single judge, where a three-judge court is also being sought, could prevent the constitutional issues from being presented to a three-judge court in plaintiffs attempt to enjoin the actions of the defendants. The effect would be for a single judge to deny relief which only a three-judge court could properly deny.
Where the plaintiffs have requested a three-judge court, the single judge's inquiry is limited to applying the jurisdictional criteria. Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 715, 82 S.Ct. 1294, 1296, 8 L.Ed.2d 794, 796 (1962).
Bagget v. Bullitt, 377 U.S. 360, 375, 84 S.Ct. 1316, 1324, 12 L.Ed.2d 377, 387 (1964).
Under such circumstances, the decision of whether or not to abstain should be made by the three-judge court, not by the single judge. See Nielsen, Judge, Three-Judge Courts: A Comprehensive Study, 66 F.R.D. 495, 503 (1975); But see Cooper v. Meskill, 376 F.Supp. 731 (D.Conn.1974).
Plaintiffs' request for a three-judge court herein is broader in scope than the request in Chicago, Duluth & Georgian Bay Transit Co. v. Nims, 252 F.2d 317 (6th Cir. 1958), cited by defendants. There, plaintiffs specifically conditioned their request for a three-judge court upon a prior finding of applicability of the challenged statute. The single judge abstained from construing the...
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White Motor Corp. v. Malone, 3-75 Civ. 162.
...1372, 39 L.Ed.2d 577 (1974). The scope and the basis of relief sought is significant for it differs with the relief sought in Fleck et al. v. Spannaus et al., (File No. 3-75 Civ. 178) 412 F.Supp. 366 (D.Minn.1976), also issued today. The court expended considerable effort in attempting to p......
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Fleck v. Spannaus
...Protection Act, Minn.Stat. § 181B.01 et seq. (1974) (hereinafter the Pension Act). The relevant facts are set forth in Fleck v. Spannaus, 412 F.Supp. 366 (D.Minn.1976). In that decision, Judge Alsop held that the Pension Act was not preempted by the Employee Retirement Security Act of 1974,......
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Bell v. Employee Sec. Ben. Ass'n
...Motor Corp. v. Malone, 412 F.Supp. 372, 380 n. 6 (D.Minn.), rev'd on other grounds 545 F.2d 599 (8th Cir. 1976); Fleck v. Spannaus, 412 F.Supp. 366, 368 (D.Minn.1976); Note, Insurance Regulation — Employee Benefit Plans, 28 Ark.L.Rev. 515, 520 Our conclusion is bolstered by the recent state......
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Fleck v. Spannaus
...Act, Minn. Stat. § 181B.01 et seq. (1974) (hereinafter the Pension Act). The relevant facts are set forth in Fleck et al. v. Spannaus et al., 412 F.Supp. 366 (D.Minn.1976), where the court, sitting as a single judge, denied certain aspects of plaintiffs' motions and requested the convening ......