Millsap v. McDonnell Douglas Corp., No. 03-5124.

Decision Date21 May 2004
Docket NumberNo. 03-5124.
Citation368 F.3d 1246
PartiesJames R. MILLSAP; Jose Ramon; Cathy Kirby; Lawrence Wilson; Wanda Hunter; Rita Owens; Bob Kephart; Jim Cooper; Howard Bowlin; and Ray Peterson, for themselves and all others similarly situated, Plaintiffs-Appellees, v. McDONNELL DOUGLAS CORPORATION, Defendant-Appellant. United States Secretary of Labor; American Association of Retired People; United States Chamber of Commerce, Amici Curiae.
CourtU.S. Court of Appeals — Tenth Circuit

Paul W. Mollica of Meites, Mulder, Burger & Mollica, Chicago, IL (Thomas R. Meites, Michael M. Mulder, and Josie Raimond of Meites, Mulder, Burger & Mollica, Chicago, IL; Joseph R. Farris, Paula J. Quillan, and Jody R. Nathan of Feldman, Franden, Woodard, Farris & Boudreaux, Tulsa, OK; Bill Brumley of Brumley & Bishop, Tulsa, OK; and Christopher G. Mackaronis of Bell, Boyd & Lloyd, Washington D.C., with him on the briefs) for Plaintiffs-Appellees.

Thomas E. Wack of Bryan Cave, LLP, St. Louis, MO (Daniel S. Hoffman and Sean Connelly of Hoffman, Reilly, Pozner & Williamson LLP, Denver, CO; John W. Walbran of McDonnell-Douglas Corporation, St. Louis, MO, with him on the brief) for Defendant-Appellant.

Robin Springberg Parry of the United States Department of Labor, Washington D.C. (Howard M. Radzely, Acting Solicitor of Labor, Timothy D. Hauser, Associate Solicitor, Elizabeth Hopkins, and Mark E. Papadopoulos of the United States Department of Labor, Washington D.C., on the brief) for amicus curiae United States Secretary of Labor in support of Plaintiffs-Appellees.

Mary Ellen Signorille and Melvin R. Radowitz, Washington D.C., for amicus curiae American Association of Retired People in support of Plaintiffs-Appellees.

William J. Kilberg, Mark A. Perry, and Joseph B. Maher, of Gibson, Dunn & Crutcher LLP, Washington D.C.; Stephen A. Bokat and Ellen Dunham Bryant of the National Chamber Litigation Center, Washington D.C., for amicus curiae United States Chamber of Commerce in support of Defendant-Appellant.

Before LUCERO, BALDOCK, and TYMKOVICH, Circuit Judges.*

BALDOCK, Circuit Judge.

Section 510 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (ERISA), proscribes interference with a participant's rights under a qualified benefit plan. Section 502(a)(3) of ERISA provides the plan participant with his exclusive remedies for a § 510 violation. Under § 502(a)(3), the participant may bring a civil action to (1) enjoin any act or practice which violates any provision of Title I of ERISA or the terms of the plan, or (2) obtain other appropriate equitable relief to redress such violations or enforce any provisions of Title I of ERISA or the terms of the plan. 29 U.S.C. § 1132(a)(3). We granted Defendant McDonnell Douglas Corporation's petition for interlocutory appeal in this class action to decide a controlling issue of law involving § 502(a)(3). See 28 U.S.C. § 1292(b); Fed. R.App. P. 5(a). The parties stipulated to and the district court certified the following issue for review:

[W]hether, in this ERISA § 510 case and as a result of Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), backpay (and, as a result, any other damages based upon backpay) are available as "appropriate equitable relief" to the class members pursuant to ERISA § 502(a)(3).

The district court answered yes and denied Defendant's motion seeking to preclude backpay as a potential remedy for the class. Reviewing the district court's resolution of the question of law de novo, we answer no and reverse.

I.

The facts are undisputed. Defendant manufactured and assembled military aircraft at a plant in Tulsa, Oklahoma. Defendant's employees at the plant participated in pension and/or health care plans qualified under ERISA. Defendant announced the closing of the Tulsa plant in December 1993. Defendant subsequently laid off all employees at the Tulsa plant. The Plaintiff class consists of 1,074 of those employees. Plaintiffs filed this action in 1994 alleging Defendant violated § 510 of ERISA. Section 510 provides in relevant part: "It shall be unlawful for any person to discharge ... or discriminate against a participant or beneficiary ... for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan [or Title I of ERISA.]" 29 U.S.C. § 1140. According to the complaint, Defendant closed the Tulsa plant to prevent Plaintiffs from attaining eligibility for benefits under their pension and health care plans. Plaintiffs requested damages, an order requiring Defendant to make restitution to their benefit plans, and any other equitable or remedial relief.1

The district court bifurcated the case into liability and remedial phases. The case proceeded to trial on the issue of Defendant's liability under ERISA § 510. After a ten day bench trial, the district court concluded Defendant violated § 510. The court entered a thorough published order pursuant to Fed.R.Civ.P. 52(a) reciting its findings and conclusions. Millsap v. McDonnell-Douglas Corp., 162 F.Supp.2d 1262 (N.D.Okla.2001). We need not repeat all those findings and conclusions here.2 For purposes of this appeal the district court's conclusion Defendant violated § 510 in closing the Tulsa plant is undisputed.

In the remedial phase, Plaintiffs argued Defendant's violation of § 510 entitled the class to lost benefits, backpay, and reinstatement (or front pay in lieu of reinstatement), among other things. Defendant disagreed and filed motions to preclude an award of reinstatement, front pay, and backpay under ERISA. The district court denied Defendant's motion on the availability of backpay, but granted Defendant's motion to preclude reinstatement and front pay. Millsap v. McDonnell Douglas Corp., No. 94-CV-633-H, 2002 WL 31386076 (N.D.Okla. Sept.25, 2002) (unpublished disposition). The court reasoned the circumstances of this case made reinstatement impossible and front pay inappropriate because the court could not conclude that but for Defendant's discriminatory conduct the Tulsa plant would still be open. The district court held, however, Plaintiffs could recover backpay because the award constituted "equitable relief" under ERISA § 502(a)(3). The court reasoned backpay constituted "equitable restitution" or alternatively could be awarded because Plaintiffs sought backpay in conjunction with lost pension benefits, lost vacation pay, lost insurance, and reinstatement or front pay.

The parties subsequently entered into a "Stipulation of Settlement." The settlement compensates Plaintiffs in the amount of $36 million for their lost pension and health care benefits. The settlement stipulation requires judicial resolution of the availability of backpay under ERISA § 502(a)(3). The district court approved the settlement, see Fed.R.Civ.P. 23(e), and certified the controlling question of law for appeal. See 28 U.S.C. § 1292(b). We granted the parties permission to appeal on the narrow issue certified.3

II.

ERISA regulates employee pension and welfare benefit plans. See 29 U.S.C. §§ 1002(1)-(2), 1003(a); Pilot Life Ins. Co v. Dedeaux, 481 U.S. 41, 44, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Congress designed ERISA "to promote the interests of employees and their beneficiaries in employee benefit plans." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (internal quotations and citation omitted). ERISA's "complex and detailed" statutory scheme "resolved innumerable disputes between powerful competing interests — not all in favor of potential plaintiffs." Mertens v. Hewitt Assoc., 508 U.S. 248, 262, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). Federal courts interpreting ERISA must take into account those competing interests, "such as Congress' desire to offer employees enhanced protection for their benefits, on the one hand, and, on the other, its desire not to create a system that is so complex that administrative costs, or litigation expenses, unduly discourage employers from offering welfare benefit plans in the first place." Varity Corp. v. Howe, 516 U.S. 489, 497, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996); see also Lockheed Corp. v. Spink, 517 U.S. 882, 887, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996) (explaining ERISA does not require employers to establish employee benefit plans or a certain level of benefits under a plan).

ERISA's civil enforcement scheme, 29 U.S.C. § 1132, consists of several carefully integrated provisions. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985). The Court explained:

Under the civil enforcement provisions of § 502(a), a plan participant or beneficiary may sue to recover benefits due under the plan, to enforce the participant's rights under the plan, or to clarify rights to future benefits. Relief may take the form of accrued benefits due, a declaratory judgment on entitlement to benefits, or an injunction against a plan administrator's improper refusal to pay benefits.

Pilot Life, 481 U.S. at 53, 107 S.Ct. 1549. "Congress intended § 502(a) to be the exclusive remedy for rights guaranteed under ERISA, including those provided by § 510[.]" Ingersoll-Rand, 498 U.S. at 144; see also Zimmerman v. Sloss Equip., Inc., 72 F.3d 822, 828 (10th Cir.1995).

The Supreme Court has repeatedly emphasized that Congress' deliberate care in comprehensively drafting ERISA's enforcement scheme "provide[s] strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly." Russell, 473 U.S. at 146, 105 S.Ct. 3085; see also Great-West, 534 U.S. at 209, 122 S.Ct. 708; Mertens, 508 U.S. at 254, 113 S.Ct. 2063; Harris Trust and Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 247, 120 S.Ct. 2180, 147 L.Ed.2d 187 (2000); Pilot Life, 481 U.S. at 54, 107 S.Ct. 1549. The Court has been equally consistent in its reluctance to tamper...

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