Maggard v. O'Connell
| Decision Date | 29 March 1929 |
| Docket Number | No. 81-1501,81-1501 |
| Citation | 217 U.S.App.D.C. 62,671 F.2d 568 |
| Parties | , 93 Lab.Cas. P 13,233 Hester MAGGARD, Individually and as Administratrix of the Estate of Edmond Curtis Maggard, Appellant, v. John J. O'CONNELL, et al., Appellees. . Argued 25 Nov. 1981. Decided 12 Feb. 1982. David J. Frantz, Washington, D.C., for appellant. William F. Hanrahan, Washington, D.C., with whom E. Calvin Golumbic and Jeanne K. Beck, Washington, D.C., were on the brief, for appellee. Before WILKEY and GINSBURG, Circuit Judges, and McGOWAN, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge WILKEY. WILKEY, Circuit Judge: Appellant Hester Maggard applied for retirement benefits allegedly due her late husband from the United Mine Workers of America Health and Retirement Funds. The application was denied by the appellees, trustees of the Funds. Appellant filed suit in federal district court pursuant to § 302(c) of the Labor-Management Relations Act of 1947 1 and § 502(e)(1) of the Employee Retirement Income Security Act of 1974, 2 alleging that the denial had been arbitrary and capricious. The district court granted summary judgment for appellees, and this appeal followed. We find the district court's review of the trustees' action inadequate, and so reverse and remand. I. BACKGROUND Appellant's husband, born in 1908 in Jonancy, Kentucky, worked in the coal industry throughout his life. He began at an early age and retired in 1958, by which time he was totally disabled by pneumoconiosis, a mine-related disease, and arteriosclerotic heart disease. Maggard died in January 1980 as a result of bronchiopneumonia, with pneumoconiosis as a contributing cause of death. Appellees are members of the Board of Trustees of the United Mine Workers of America 1950 Trust, the legal successor to the United Mine Workers of America Welfare and Retirement Fund of 1950. 3 On 17 March 1966 Maggard applied for retirement benefits from the latter. There followed a series of denials and reapplications of which this appeal is the latest installment. The pro |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
David J. Frantz, Washington, D.C., for appellant.
William F. Hanrahan, Washington, D.C., with whom E. Calvin Golumbic and Jeanne K. Beck, Washington, D.C., were on the brief, for appellee.
Before WILKEY and GINSBURG, Circuit Judges, and McGOWAN, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge WILKEY.
Appellant Hester Maggard applied for retirement benefits allegedly due her late husband from the United Mine Workers of America Health and Retirement Funds. The application was denied by the appellees, trustees of the Funds. Appellant filed suit in federal district court pursuant to § 302(c) of the Labor-Management Relations Act of 1947 1 and § 502(e)(1) of the Employee Retirement Income Security Act of 1974, 2 alleging that the denial had been arbitrary and capricious. The district court granted summary judgment for appellees, and this appeal followed. We find the district court's review of the trustees' action inadequate, and so reverse and remand.
Appellant's husband, born in 1908 in Jonancy, Kentucky, worked in the coal industry throughout his life. He began at an early age and retired in 1958, by which time he was totally disabled by pneumoconiosis, a mine-related disease, and arteriosclerotic heart disease. Maggard died in January 1980 as a result of bronchiopneumonia, with pneumoconiosis as a contributing cause of death.
Appellees are members of the Board of Trustees of the United Mine Workers of America 1950 Trust, the legal successor to the United Mine Workers of America Welfare and Retirement Fund of 1950. 3 On 17 March 1966 Maggard applied for retirement benefits from the latter. There followed a series of denials and reapplications of which this appeal is the latest installment. The procedural details of most of these applications and denials are of no moment here, though it is worth noting that the reasons given by the trustees for their disallowance were not always consistent.
On 15 May 1980, four months after his death, the denial of benefits was sustained by appellees on the grounds that Maggard had established proof of only 121/4 years of classified service, including 41/4 years of signatory service after 28 May 1946. 4 Thus, even if credited with an additional 4 years of service for his occupational disability, 5 he would still fall short of the 20-year eligibility requirement. His widow then sued.
The case before us is best analyzed by first exploring the applicable principles involved: specifically, the award requirements which must be met for the trustees to grant retirement benefits, and the appropriate standard for judicial review of the trustees' determination. Second, we shall apply these principles to the instant litigation.
According to the terms of the settlement in Blankenship v. United Mine Workers of America Welfare and Retirement Fund of 1950, 6 a miner who, prior to that decision, would have been ineligible for a pension 7 would nonetheless qualify if he met either of the two tests adopted by Blankenship. Under Blankenship Test One a miner like Maggard is eligible if he can show, inter alia, that he had completed at least 20 years of classified service at any time, including at least 5 years of signatory service after 28 May 1946. 8 Under Blankenship Test Two a miner who does not meet the requirements of Test One is still eligible for a pension if he completed 20 years of classified service prior to 1953, including any signatory service at all after 28 May 1946, and was physically unable to satisfy the "20-out-of-30" requirement because of a permanent mine-related disability. 9 It is Blankenship Test Two which appellant invokes in this action. 10
Another principle with some bearing on the case at hand was involved, and broadened, in Maggard v. Huge. 11 It provides a maximum of 4 years' additional credit to miners who demonstrate by a preponderance of the evidence that they contracted an occupational disease which "was the direct and proximate cause of applicant's inability to work in the coal industry for a period of time of ascertainable duration." 12 As we will discuss later, 13 it may or may not be necessary for appellant to invoke Maggard v. Huge.
It is established that decisions of the trustees on pension eligibility are to be sustained by courts if they are not arbitrary or capricious, and if the trustees' factual judgments are supported by substantial evidence in the record as a whole. 14 Still, " 'the deference owed to an expert tribunal cannot be allowed to slip into a judicial inertia ...,' " 15 and judicial intervention is required "if the court becomes aware, especially from a combination of danger signals, that the (tribunal) has not really taken a 'hard look' at the salient problems, and has not genuinely engaged in reasoned decision-making." 16 Similarly, "(m)ore exacting scrutiny will be particularly useful when for some reason the presumption of (tribunal) regularity ... is rebutted," 17 as, for example, "where the (tribunal) has demonstrated undue bias towards particular private interests, (or) ... has had a history of 'ad hoc and inconsistent judgments' on a particular question ...." 18
Because of the rather unique circumstances before us, we find that, although the appropriate standard for judicial review remains limited to determining whether the trustees' decision was based on substantial evidence and was neither arbitrary nor capricious, it is also incumbent upon the court to make this admittedly limited review with greater care than it might ordinarily. As we pointed out in Natural Resources Defense Council, Inc. v. SEC, 19 "the concept of 'arbitrary and capricious' review defies generalized application" and must be contextually tailored. The same principle applies to the "substantial evidence" standard. A reviewing court may also be more or less likely to give the fact-finder the benefit of the doubt depending on the circumstances.
In the case before us today, we think it would be quite dangerous "to slip into a judicial inertia" given the "combination of danger signals" rebutting "the presumption of agency regularity." There have been a number of cases already holding the Funds' regulations and findings to be arbitrary and capricious. 20 It should also be noted that what is being reviewed here is not the findings of an agency but rather the decision of private trustees based on evidence collected by a hearing officer employed by a private trust. A reviewing court should keep in mind that those close to the trust indeed have a duty to preserve the corpus of that trust and, accordingly, are naturally disinclined to make awards from it. It is also to be surmised that these individuals have no tenure, less job security, and are generally less well-insulated from outside pressures than those government employees whose decisions are more commonly reviewed under the "arbitrary and capricious" or "substantial evidence" standards.
None of this is intended to disparage the performance of the trustees and their hearing officers. As we just stated, they might be remiss in their duties were they to be too generous with the funds entrusted to them. However, judicial review of their denial must be undertaken with similarly stern hand and flinty eye. Preservation of the corpus of the trust is the duty of the trustees, but not at the expense of the intended beneficiaries.
As we discussed above, 21 appellant in this action claims that her husband met the requirements of Blankenship Test Two: that he (1) completed 20 years of classified service prior to 1953, (2) had at least some signatory service after 28 May 1946, and (3) was physically unable to satisfy the "20-out-of-30" requirement because of a permanent mine-related disability. Appellees have not challenged-in their brief or at oral argument-that Maggard met the latter two requirements, and counsel for appellant conceded at oral argument that, with respect to the first requirement, nothing in the post-1937 period was disputed. Thus, the crux of this case is how many years' credit is due Maggard for the 1921-37 period, for the entirety of which he claims employment.
Mrs. Maggard needs to show that her husband had 20 years' total credit of lifetime service under Blankenship Test Two. He was awarded 71/4 years in the post-1937 period, which means she needs credit for an additional 123/4 years for the 1921-37 period. If Maggard v. Huge applies, 22 then she would need 4 years' less credit than that, or 83/4 years. The trustees have already given Maggard credit for 51/2 years in this period, so what the dispute finally reduces to is whether appellant is entitled to an additional 71/4 years-or 31/4 years if Huge applies-from 1921 to 1937. Specifically, the years appellant has claimed, but appellees have denied, are 1921-24, 1928-29, and 1930-34.
In reviewing the appellees' decision to withhold benefits and granting their motion for summary judgment, the district court concluded that "the hearing officer deemed much of (appellant's) testimonial evidence incredible" and, since the court was "not empowered to conduct a review de novo," it "must adopt the hearing officer's evaluation of the testimony ...." 23 The court concluded that "it was neither arbitrary nor capricious to deny Plaintiff Pension benefits." 24
We believe that the district court made a generally accurate statement of the standard for judicial review here, 25 but the record before us causes us to doubt that the district court met even this...
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