Harju v. Olson, Civil No. 08-1329 (JRT/RLE).
| Decision Date | 29 March 2010 |
| Docket Number | Civil No. 08-1329 (JRT/RLE). |
| Citation | 709 F.Supp.2d 699 |
| Parties | Brent K. HARJU, Lance L. Tveiten, and Norman D. Voorhees, on behalf of themselves and all others similarly situated, and Iron Workers Local Union No. 512, Plaintiffs,v.Craig OLSON, Jeff Daveau, Elizabeth Adatte, Mark Hubbard, John Riihiluoma, and Mike Gerber, as members of the Board of Trustees of the Duluth Building Trades Welfare Fund; and Duluth Building Trades Welfare Fund, Defendants. |
| Court | U.S. District Court — District of Minnesota |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Steven L. Severson and Deborah A. Ellingboe, Faegre & Benson LLP, Minneapolis, MN, for plaintiffs.
William A. Cumming, Hessian & McKasy, PA, Minneapolis, MN, for named trustee defendants.
John H. Bray, Kanuit & Bray, Ltd., Hermantown, MN, for defendant Duluth Building Trades Welfare Fund.
Plaintiffs Brent K. Harju, Lance L. Tveiten, and Norman D. Voorhees (collectively, the “Individual Plaintiffs”), on behalf of themselves and all others similarly situated, and Iron Workers Local Union No. 512 (“Local 512”), brought this putative class action against six named members of the Board of Trustees of the Duluth Building Trades Welfare Fund (the “Named Trustees”), and against the Duluth Building Trades Welfare Fund (the “Duluth Fund” or “Fund”) alleging breach of fiduciary duty and refusal to produce documents, and seeking a declaration of right to benefits. (Class Action Compl., Docket No. 1.) Local 512 and the Individual Plaintiffs (collectively, “plaintiffs”) contend that the Duluth Fund and the Named Trustees (collectively, “defendants”) improperly determined that a benefits plan participant's “banked hours” are reduced to zero if the participant's union leaves the Fund, and also improperly refused to produce requested documents relating to that determination. The parties filed cross-motions for summary judgment, and plaintiffs filed a motion for class certification. (Docket Nos. 28, 31, 39, 44.) For the reasons stated below, the Court grants in part and denies in part the motions for summary judgment, and grants plaintiffs' motion for class certification.
Local 512 is an affiliate of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO, and consists of over 1300 journeymen members and 350 apprentices working in Minnesota, North Dakota, and parts of Wisconsin. (
The Duluth Fund is an employee welfare benefit plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. § 1002(1). ( Id. ¶ 7.) A trust sponsors and maintains the Duluth Fund, and the Named Trustees are six of the eight members of the Board of Trustees, which is the body responsible for administering the trust. ( Id. ¶¶ 9-14; see also Named Trustees Answers to Pls.' Combined Disc. at 2, Ellingboe Aff., Ex. A, Docket No. 36.) The Duluth Fund is a multiemployer plan, or “Taft-Hartley” plan, maintained pursuant to a collective bargaining agreement. See ERISA § 3(37)(A), 29 U.S.C. § 1002(37)(A). Members of several labor unions, including Local 512, participate in the Fund. ( Approximately 621 Local 512 members, including the Individual Plaintiffs, participate in the Duluth Fund. Other Local 512 members participate in the Twin City Iron Workers Health and Welfare Fund, which is not a party to this suit. (
The dispute centers on the practice of “banking hours.” Employers make contributions to the Fund on behalf of each participating employee, and the employee receives coverage if he or she has worked a minimum number of hours in a particular month. ( Currently, for example, participants must work a minimum of 135 hours per month to maintain eligibility for benefits. ( Id.) The employer's contribution is based on the number of hours the employee works in a particular month. ( Id. at 14-15.) If an employee works fewer than the minimum number of required credit hours, the employer still makes contributions based on the hours worked, but the employee is not automatically eligible for benefits for the relevant month. ( Id. at 14.) If, however, the employee works more than the minimum number of hours, the employer makes contributions for all of those hours. ( Id. at 14-15.) The additional hours are “banked,” and the employee may draw down the banked hours if the employee does not satisfy the minimum hours requirement in a subsequent month. ( Id. at 15.) The Duluth Fund maintains records of banked hours in the participant's “Individual Record System.” ( Id.) Approximately 405 of the 621 Local 512 members who participate in the Duluth Fund have banked hours. (Flesher Aff. ¶ 5, Docket No. 37.) Local 512 members have a total of 261,060.53 banked hours-an average of 4.76 months of coverage for each participant who has banked hours. ( Id.) The parties dispute what should happen to those hours if Local 512 elects to withdraw from the Fund.
Several documents govern the Duluth Fund. The Duluth Fund was established pursuant to a Trust Agreement, and the most recent Trust Agreement governing the Fund is dated January 8, 1987. (Trust Agreement, Claim Letter, Ex. C, Class Action Compl., Ex. 1, Docket No. 1.) The Duluth Fund has promulgated several Summary Plan Descriptions, or SPDs, including one effective January 1, 1997 (“1997 SPD”), a revised SPD effective January 1, 2003 (“2003 SPD”), and an SPD that was revised during this litigation and went into effect in 2009 (“2009 SPD”). The Duluth Fund apparently also promulgated several Summary of Material Modification notices announcing interim changes to the SPDs. ( See, e.g., Claim Letter, Ex. G, Docket No. 1.)
The Trust Agreement authorizes the Board of Trustees “to amend, repeal, add to or take away any right of payment retroactively or otherwise,” but lists several “Limitation[s] of Authority of Trustees.” (Trust Agreement §§ 10.1-10.2.) In particular, Section 10.2(d) of the Trust Agreement states that “[t]he Trustees shall have no authority to adopt amendments which ... retroactively deprive anyone of his vested rights or benefits.” ( Id. § 10.2(d).)
The Trust Agreement also has a provision governing partial termination of the Fund in the event that an employer decides to withdraw from the Fund. Section 11.2 states:
In the event some of the Employers discontinue making contributions to the Fund, the Employees and Participants who were employed by such Employers, such Employers and the Unions representing such Participants and Employees shall have no right, title or interest in any portion of the assets of the Trust, except that otherwise eligible Employees and Participants may continue to receive benefits from the Fund under such terms and conditions as the Trustees may require or as may be required by this Agreement.
( Id. Art. 11.2.)
The 1997 SPD allowed participants to draw down their banked hours after their union or employer left the Fund. The 1997 SPD has a paragraph titled “Non-Portability of Hours.” It states:
If a participating Union [ ] or a group covered by a collective bargaining agreement ceases to participate in the Fund, all assets and banked hours credited to those members on the date of withdrawal shall remain as assets of this Fund credited to the individual Plan participant. Under no circumstances shall a Plan participant who is a member of the withdrawing group be entitled to transfer any hours to another Fund or any assets represented by such hours.
(1997 SPD at 13, Docket No. 1 (emphases added).) Effective May 1, 1998, Laborers Local No. 1091 withdrew from the fund, and in a letter dated April 24, 1998, the Fund Trustees quoted the “Non-Portability of Hours” paragraph and stated that “participants with hour banks will continue to be covered under the Duluth ... Fund until such time that they do not have enough hours to cover another month's worth of coverage.” (Hanson Letter at 2, Claim Letter, Ex. F, Docket No. 1.)
In a letter dated December 2001, the Duluth Fund provided participants with a “Summary of Material Modification” to the 1997 SPD. (Claim Letter, Ex. G, Docket No. 1.) The letter announces three material modifications that would go into effect on January 1, 2002.1 ( Id.) One of those modifications imposed a forward-looking cap on the number of banked hours in a participant's Individual Record System:
The 2003 SPD retained the “Non-Portability of Hours” paragraph from the 1997 SPD, as quoted above, but added a “Reduced to Zero” provision regarding banked hours. The provision states:
To continue reading
Request your trial
-
Coriale v. Xerox Corp..
...to its employees to do so.” Id. ¶ 38; see Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 77 (2d Cir.1996); Harju v. Olson, 709 F.Supp.2d 699, 729 (D.Minn.2010). Whether that ever occurred is one of the primary issues in this case. Plaintiffs claim that going as far back as Joseph Wi......
-
Parkridge Med. Ctr., Inc. v. CPC Logistics Inc. Grp. Benefit Plan
...denying the claim, such treatment is sufficient to waive whatever procedural deficiencies may have occurred. See Harju v. Olson, 709 F. Supp. 2d 699, 715-16 (D. Minn. 2010) (holding an organization had standing to request documents and bring administrative claims in part because the denial ......
-
In re Zurn Pex Plumbing Prods. Liab. Litig.
...a "common nucleus of operative facts." U. S. Fid. & Guar. Co. v. Lord, 585 F.2d 860, 872 (8th Cir. 1978); see also Harju v. Olson, 709 F. Supp. 2d 699, 735 (D. Minn. 2010) ("Factual variations in the individual claims will not normally preclude class certification if the claim . . . gives r......
-
Agstar Financial Serv. v. Rock Creek Dairy Leasing LLC
... ... Defendant in this matter pursuant to Federal Rule of Civil Procedure 24(a)(2) to assert a priority interest in certain ... ...