Holmes v. Pension Plan of Bethlehenm Steel Corp., 99-1619
| Decision Date | 11 April 2000 |
| Docket Number | No. 99-1619 and 99-1620,No. 99-1619,99-1619,99-1619 and 99-1620 |
| Parties | Page 125 213 F.3d 125 (3rd Cir. 2000) ARNOLD HOLMES; LAWRENCE HOLLYFIELD, Fiduciary to the Estate of Collins Hollyfield v. PENSION PLAN OF BETHLEHEM STEEL CORPORATION AND SUBSIDIARY COMPANIES; EMPLOYEE BENEFITS ADMINISTRATION COMMITTEE OF BETHLEHEM STEEL CORPORATION; MICHAEL P. DOPERA; JOHN/JANE DOES 1-10 Arnold Holmes and Lawrence Hollyfield, Fiduciary to the Estates of original named plaintiff Collins Hollyfield, individually and on behalf of all members of the proposed class and subclasses, Appellants at Page 126 ARNOLD HOLMES; LAWRENCE HOLLYFIELD, Fiduciary of the Estate of Collins Hollyfield v. PENSION PLAN OF BETHLEHEM STEEL CORPORATION AND SUBSIDIARY COMPANIES; EMPLOYEE BENEFITS ADMINISTRATION COMMITTEE OF BETHLEHEM STEEL CORPORATION; MICHAEL P. DOPERA; JOHN/JANE DOES 1-10 The Pension Plan of Bethlehem Steel Corporation and Subsidiary Companies, the Employee Benefits Administration Committee of Bethlehem Steel Corporation and Michael P. Dopera, Appellants at 99-1620 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT |
| Court | U.S. Court of Appeals — Third Circuit |
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. No. 98-cv-01241) District Judge: Honorable Franklin S. Van Antwerpen
[Copyrighted Material Omitted]
Attorneys for Appellants: Alan M. Sandals, Esq. (argued) Howard I. Langer, Esq. Sandals, Langer & Taylor 1650 Market Street One Liberty Place, 50th Floor Philadelphia, PA 19103
Attorney for Appellees: G. Stewart Webb, Jr., Esq. (argued) Venable, Baetjer & Howard 2 Hopkins Plaza 1800 Mercantile Bank & Trust Building Baltimore, MD 21201
BEFORE: NYGAARD, ALITO, and GIBSON,* Circuit Judges.
Appellants, Arnold Holmes and Lawrence Hollyfield, filed a civil action against Appellees pursuant to SS 404 and 502(a) of the Employment Retirement Income Security Act. 29 U.S.C. SS 1104 & 1132(a). The District Court had jurisdiction over the action pursuant to 29 U.S.C. S 1132(e)(1). We have jurisdiction to review the District Court's final order pursuant to 28 U.S.C. S 1291.
Appellants, plaintiffs below, successfully prosecuted their claim to interest on pension benefits they received after a decade and a half of delay. Nevertheless, Appellants challenge two equitable limitations the District Court placed on the interest it awarded. They also challenge the District Court's refusal to certify two classes of plaintiffs they proposed for class action purposes. Finally, they challenge the District Court's ruling that a legal memorandum they sought to discover was protected by the doctrine of work product immunity. We will affirm in part, and reverse in part.
Appellees, defendants below, cross appeal, ostensibly raising an issue as to whether the District Court erred by concluding that Appellants were entitled to any interest at all, regardless of the limitations it imposed. Rather than directly challenging the District Court's decision, however, they limit their argument to a critique of our decision, which the District Court correctly found controlling, in Fotta v. Trustees of the United Mine Workers of Am. Health & Retirement Fund, 165 F.3d 209 (3d Cir. 1998) (). We hold that the argument is not properly presented in this appeal, and decline to entertain it.
Appellants, as well as the members of the plaintiff classes they seek to certify, are participants in, or beneficiaries of, the Pension Plan of Bethlehem Steel Corporation and its Subsidiary Companies (hereafter referred to as "the Plan"). Prior to a 1977 amendment, the Plan required that benefits due under the Plan be offset (i.e., reduced) by the amount of any pension benefits the relevant participant received from any source other than the Plan itself. In July 1977, the Plan was amended so that the offset requirement applied only to non-plan pension benefits "attributable to employment with an Employing Company." See Bethlehem 1977 Salaried Pension Plan S 3.8 (J.A. at 128-29). In other words, after the 1977 amendment, non-Plan pension benefits received from sources falling outside the definition of an Employing Company are not deducted from benefits received from the Plan itself.
The Plan defines an "Employing Company" to mean Bethlehem Steel, any Bethlehem Subsidiary that has adopted the Plan, and "any corporation which, prior to July 31, 1966, was merged into or consolidated with any such subsidiary company or with" Bethlehem Steel. See Bethlehem Steel 1977 Salaried Pension Plan at 2 (J.A. at 120). Additionally, the Plan provides that benefits received from sources falling within the definition of an Employing Company are offset only to the extent they were earned during a period in which the participant was being "credited with continuous service for the purpose of calculating the amount of any regular pension under[the] Plan." Id. at 19-20 (J.A. at 128-29).
Appellants Holmes and Hollyfield both worked for Bethlehem Steel subsidiaries prior to their respective retirements, and both participated in the Plan. After retiring in 1977, Hollyfield applied for pension benefits from both the Plan, and from the United Mine Workers of America Retirement Fund. Unlike the Plan, the UMWA Fund is not employer specific. Rather, it is a multi-employer plan providing benefits to all workers represented by the UMWA. Like the Plan, however, it is funded entirely by employer contributions, including contributions from Bethlehem Steel and its subsidiaries.
Following his retirement, the Plan awarded Hollyfield $214.13 in monthly pension benefits, effective December 1, 1977. Nearly a year later, in November 1978, his application for UMWA benefits was granted in the amount of $250 per month, retroactive to September 1, 1977. Thereafter, the Plan notified Hollyfield that his Plan benefits would be reduced by the full amount of his UMWA benefits. Thus, because his UMWA benefits were greater than this Plan benefits, Hollyfield's Plan benefits were eliminated altogether. Additionally, because his UMWA benefits award was retroactive, the Plan also required Hollyfield to repay all Plan benefits he had previously received. Hollyfield complied, paying the Plan $2,449.56 in previously received benefits. The Plan did not request, and Hollyfield did not pay, interest on the repaid benefits.
Appellant Holmes retired in 1980 and, like Hollyfield, applied for pension benefits from both the Plan and from the UMWA Fund. The Plan awarded him a monthly benefit of $1,224.36, effective February 1, 1981. In October 1981, the UMWA Fund awarded Holmes a monthly benefit of $290.00, retroactive to November 1980. As it did with Hollyfield, the Plan determined that all of Holmes' UMWA benefits should be offset against his Plan benefits. And, again, it required Holmes to repay all offset amounts already received. Thereafter, Holmes repaid the Plan $2,825.00, reflecting principal only and no interest.
In 1994, Hollyfield's son contacted Plan administrators regarding his father's Plan benefits. In a subsequent investigation, the Plan determined that none of Hollyfield's UMWA benefits were earned during a period in which he was being credited with continuous service for purposes of calculating his Plan benefits. In other words, the Plan concluded that none of Hollyfield's UMWA pension should have been offset against his Plan benefits during the 17year period since he had retired. Consequently, the Plan paid Hollyfield a lump sum of $47,553 in past-due benefits. That sum represented past-due principal only, and did not include any interest payments for the period of delay.
A similar series of events in 1997 led to Holmes' collection of $24,514 in past-due Plan benefits. In contrast to Hollyfield's case, however, the Plan determined that Holmes earned 65% of his UMWA benefits at the same time he was being credited with continuous service for purposes of calculating his benefits under the Plan. Therefore, his lump-sum payment amounted to only 35% of the Plan benefits that had been offset in the sixteen years since his retirement, not the 100% that Hollyfield had recovered.
Shortly after Holmes received his past-due benefits, his attorney placed a call to the Plan's offices. In a conversation with an assistant to the Plan's administrator, the attorney claimed that Holmes was entitled to interest on his past due benefits as well as the principal. In response, a Plan attorney prepared a memorandum analyzing the legal issues surrounding Holmes' interest claim. The memorandum was circulated to other Plan attorneys, as well as to its administrator. Thereafter, the administrator informed Holmes' attorney that nothing in the Plan provided for interest payments on delayed benefits, and that the administrator had determined such a payment would not be appropriate. See Letter from Dopera to Thornton of 07/22/1997 (J.A. at 185). Holmes then appealed the denial of his interest claim to the Plan's Employee Benefits Administration Committee. The Committee affirmed. See Letter from Dopera to Thornton of 10/10/1997 (J.A. at 191).
In March 1998, Holmes and Hollyfield filed a civil complaint against the Plan and its administrators. In Count One of the complaint, both Holmes and Hollyfield sought interest on their delayed benefits, as well as disgorgement of any additional profits the Plan may have earned on those benefits during the period of delay. Holmes also challenged the continuing 65% offset of his UMWA benefits against his Plan benefits, arguing that the UMWA benefits were not received from an "Employing Company." See App. at 20. Count Two alleged violations of the fiduciary duty to disclose accurate information. See id. at 21.
The complaint also sought certification of two proposed classes of Plan participants and...
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