Kwak v. Joyce
| Decision Date | 28 March 1988 |
| Docket Number | No. 87 C 5279.,87 C 5279. |
| Citation | 683 F. Supp. 1546 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | Dorothy KWAK, and all others similarly situated, Plaintiff, v. William D. JOYCE, John D. Kelahan, Frank Wsol, Robert J. Baker, John J. Barranco, Michael B. Murphy, and International Brotherhood of Teamsters Union Local No. 710 Pension Fund, Defendants. |
Lawrence Walner, Sheldon Klein, Chicago, Ill., for plaintiff.
Marvin Gittler, Stephen J. Feinberg, Leonard J. Elberts, Asher Pavalon Gittler and Greenfield, Chicago, Ill., for defendants.
The issue before us is the appropriate statutes of limitations for certain private causes of action arising under § 404 of the Employee Retirement Income Security Act ("ERISA § 404"), 29 U.S.C. § 1104 (1980), and § 302 of the Labor Management Relations Act ("LMRA § 302"), 29 U.S.C. § 186 (1984). The defendants move for summary judgment on the grounds that plaintiff Dorothy Kwak failed to timely file her § 404 and § 302 claims. For the reasons stated herein, we grant defendants' motion for summary judgment.
The following facts are undisputed for purposes of this motion. Kwak was a participant in and beneficiary of defendant International Brotherhood of Teamsters Union Local No. 710 Pension Fund ("Pension Fund"), a benefit fund subject to the provisions of ERISA § 404 and LMRA § 302. The individual defendants are trustees of the fund. Before termination from her employment in a position covered by the Pension Fund, Kwak had amassed twenty-three years of credit with the Pension Fund and was accordingly entitled to benefits under the Regular Pension, payable at age sixty, but not under the Special Regular Pension, payable at age fifty. Section 4.051 of the Pension Plan allows participants to make self-payments to accumulate an additional two years of credit under the Regular Pension but not the Special Regular Pension. Kwak sought to make self-payments towards the Special Regular Pension in order to amass the twenty-five years of credit necessary to enjoy the Special Regular Pension benefits at fifty. The defendants denied her request in a letter from a Local 710 Special Committee dated October 6, 1983.
On June 11, 1987, Kwak filed this class action on behalf of herself and all who are within two years of Special Regular Pension eligibility and, but for the limitations imposed by § 4.051, are able to self-pay to the Fund. In Count I, Kwak alleges that § 4.051 is a "structural defect" in the Pension Plan and charges defendants with arbitrarily and capriciously establishing pension plan rules in violation of LMRA § 302(c)(5). In Count II, Kwak charges that by implementing § 4.051 defendants violated their ERISA § 404 fiduciary duties to the Plan's participants and beneficiaries. Defendants contend in their motion for summary judgment that both counts are subject to the three-year statute of limitations set forth in ERISA § 413, 29 U.S.C. § 1113 (1974), and, accordingly, time barred. We agree.
The language "under this part" refers to the ERISA provisions of Part 4, Subchapter I, Subtitle B. Edwards v. Wilkes-Barre Pub. Co. Pension Trust, 757 F.2d 52, 55 (2d Cir.), cert. denied, 474 U.S. 843, 106 S.Ct. 130, 88 L.Ed.2d 107 (1985). ERISA § 404 is within Part 4 and accordingly subject to the § 413 statute of limitations.
Despite the unambiguity of this provision, Kwak seeks to apply the five-year Illinois statute of limitations for "actions on unwritten contracts, expressed or implied ... and all civil actions not otherwise provided for." Ill.Rev.Stat. ch. 110, ¶ 13-205 (1982). To support her contention, Kwak cites a number of cases in which courts applied analogous state statutes of limitations to certain ERISA actions. E.g., Miles v. New York State Teamsters Conference, Etc., 698 F.2d 593 (2d Cir.), cert. denied, 464 U.S. 829, 104 S.Ct. 105, 78 L.Ed.2d 108 (1983); Salyers v. Allied Corp., 642 F.Supp. 442 (E.D.Ky.1986); Ferguson v. Greyhound Retirement & Disability Trust, 613 F.Supp. 323 (W.D.Pa. 1985); Nolan v. Aetna Life Ins. Co., 588 F.Supp. 1375 (E.D.Mich.1984). In each of these cases, the plaintiff's action arose under § 502 of ERISA, 29 U.S.C. § 1132 (1986), for which ERISA provides no express statute of limitations. Not one of the cases holds or suggests that ERISA § 404 actions are subject to a statute of limitations other than the provisions of § 413. There is no basis in reason or precedent for singling out § 404 actions as an exception to the clear reach of § 413, and we accordingly apply § 413 in determining whether Count II of Kwak's complaint is time-barred.
The parties do not dispute that Kwak had notice of the charged violation of defendants' ERISA § 404 duties at least as early as October 1983 when she received the decision letter of the Special Committee. Kwak does not allege in her complaint or set forth in her response to defendants' motion for summary judgment any facts supporting a claim of fraud or concealment. Count II is therefore subject to the three-year statute of limitations of § 413(a)(2)(B) and accordingly should have been filed by October of 1986. Kwak did not file this action until June of 1987. Count II is time-barred, and we grant defendants' motion for summary judgment as to Count II.
Unlike ERISA, the Labor Management Relations Act is silent as to the statute of limitations applicable to that portion of Kwak's complaint arising under the Act. Congress did not provide a time limitation for LMRA § 302 actions. Accordingly, we must determine the appropriate federal or state limitations period to apply. Jenkins v. Local 705 International Brotherhood of Teamsters Pension Plan, 713 F.2d 247 (7th Cir.1983). Generally, we borrow the most appropriate state statute. Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 158, 103 S.Ct. 2281, 2287, 76 L.Ed.2d 476 (1983). If, however, the state statute is "an unsatisfactory vehicle for the enforcement of federal law and it would be inappropriate to conclude that Congress would choose to adopt state rules at odds with the purpose or operation of federal substantive law," we apply a statute of limitations from a related federal statute that balances similar interests. Id., 462 U.S. at 161, 103 S.Ct. at 2289.
Kwak argues that the five-year Illinois statute of limitations for "actions on unwritten contracts, expressed or implied ... and all civil actions not otherwise provided for," Ill.Rev.Stat. ch. 110, ¶ 13-205 (1982), is the appropriate state statute. The defendants respond that Kwak's LMRA § 302 claim is sufficiently similar to her ERISA § 404 claim of Count II that the § 413 limitations period should bar the former as well. Mindful that resort to state law remains the norm for determining an applicable limitations period, Merk v. Jewel Food Stores, 641 F.Supp. 1024, 1035 (N.D. Ill.1986), we nevertheless find that the federal interests at stake in ERISA § 404 claims and in LMRA § 302 claims such as Kwak's are sufficiently similar to warrant identical treatment for statute of limitations purposes. We accordingly apply the § 413 limitations period to Kwak's § 302 claim.
LMRA § 302 represents Congress' attempt to prevent corruption by labor and management at the expense of union members and employees. J.P. Stevens & Co. v. NLRB, 623 F.2d 322 (4th Cir.1980), cert. denied, 449 U.S. 1077, 101 S.Ct. 856, 66 L.Ed.2d 800 (1981). More specifically, like ERISA § 404, Congress sought to protect the interests of participants in employee benefits plans such as the Pension Fund. Valle v. Joint Plumbing Industry Bd., 623 F.2d 196 (2d Cir.1980). In an action arising under either LMRA § 302 or ERISA § 404, the plaintiff seeks to enforce the pension plan trustees' duty to act solely in the interests of the plan's participants. Harm v. Bay Area Pipe Trades Pension Plan Trust Fund, 701 F.2d 1301, 1305 (9th Cir. 1983); Dudo v. Schaffer, 551 F.Supp. 1330, 1336-38 (E.D.Pa.1982), aff'd, 720 F.2d 661 (3d Cir.1983). This congruence of fiduciary duties applies when as here the basis of the LMRA § 302 claim is a challenge to rules established by the trustees that affect personal claims for benefits and balance the interests of present claimants against future claimants. Struble v. New Jersey Brewery Employees' Welfare Trust Fund, 732 F.2d 325, 333 (3d Cir.1984); Pierce v. NECA-IBEW Welfare Trust Fund, 620 F.2d 589 (6th Cir.), cert. denied, 449 U.S. 1015, 101 S.Ct. 574, 66 L.Ed.2d 474 (1980).1
The parties have not cited, and our research has not revealed, any cases in which the court expressly held that as between ERISA § 413 and a longer state statute of limitations, the latter should apply to a LMRA § 302 claim charging a violation of a pension plan trustee's fiduciary duty. In Haynes v. O'Connell, 599 F.Supp. 59 (E.D. Tenn.1984), the court applied a six-year contract action statute of limitations to a § 302 claim rather...
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