Miranda v. Audia
| Decision Date | 19 July 1982 |
| Docket Number | No. 81-5006,81-5006 |
| Citation | 681 F.2d 1124 |
| Parties | 110 L.R.R.M. (BNA) 3199, 95 Lab.Cas. P 13,752, 3 Employee Benefits Ca 1847 Juan MIRANDA, et al., Plaintiffs-Appellants, v. R. A. AUDIA, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Neal S. Dudovitz, National Senior Citizens, Los Angeles, Cal., for plaintiffs-appellants.
George DeRoy, Hochman, Salkin & DeRoy, Beverly Hills, Cal., Reeve J. Jacques, McInnis, Fitzgerald, Rees & Sharkey, San Diego, Cal., for defendants-appellees.
Appeal from the United States District Court for the Southern District of California.
Before SKOPIL and SCHROEDER, Circuit Judges, and EAST, * District Judge.
Plaintiffs-appellants filed this class action in 1975 challenging the San Diego County Laborers Pension Trust Fund's 15-year minimum service vesting rule. The defendants are the trust fund and its trustees. Plaintiffs, construction laborers, claimed that the Fund's pension eligibility rule, requiring at least 15 years covered employment in the industry in order to earn a vested right to a pension at retirement age, violated § 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5). 1 The district court held a full trial, and based upon its detailed findings of fact, concluded that the rule was not arbitrary or capricious. The court then denied plaintiffs' motion under Fed.R.Civ.P. 59 to alter or vacate its decision based upon the recent Ninth Circuit decision in Ponce v. Construction Laborers Pension Trust, 628 F.2d 537 (9th Cir. 1980). We affirm.
The San Diego County Laborers Pension Trust Fund (Fund) was established in 1963 pursuant to a collective bargaining agreement between Local 89 of the Laborers International Union of North America and San Diego area contractors. The Fund is administered by a board of trustees comprised of equal numbers of employer and union representatives. Payments to the fund are made by employers for each hour worked by a union employee; hourly contribution rates are adjusted periodically through the collective bargaining process. Conditions for pension eligibility and the levels of pension benefits are determined solely by the trustees.
The decisions of those empowered with the administration of employee trust funds will be sustained unless arbitrary or capricious or contrary to law. Smith v. CMTA-IAM Pension Trust, 654 F.2d 650, 654 (9th Cir. 1981); Sailer v. Retirement Fund Trust, 599 F.2d 913, 914 (9th Cir. 1979); Tomlin v. Board of Trustees, 586 F.2d 148, 149 (9th Cir. 1978); Giler v. Board of Trustees, 509 F.2d 848, 849 (9th Cir. 1975) (per curiam) (as amended). Federal court review of trust fund plans derives from 29 U.S.C. § 302(e), and is limited to consideration of "structural deficiencies." Turner v. Local 302, International Brotherhood of Teamsters, 604 F.2d 1219, 1227 (9th Cir. 1979). Section 302(e) jurisdiction "does not extend to day-to-day fiduciary administration of welfare and pension funds." Wilson v. Board of Trustees, 564 F.2d 1299, 1300 (9th Cir. 1977). The sole issue in this case is therefore whether the 15-year vesting requirement operates in a manner that is arbitrary or capricious or contrary to law so as to amount to a structural deficiency.
Plaintiffs do not dispute that the trustees enjoy broad discretion in selecting eligibility requirements. This broad discretion gives the court a limited scope of review. Souza v. Trustees of Western Conference of Teamsters Pension Trust, 663 F.2d 942, 946 (9th Cir. 1981); Music v. Western Conference of Teamsters Pension Trust Fund, 660 F.2d 400, 402 (9th Cir. 1981). Plaintiffs argue that the trustees abused their discretion in this case because an unusually high percentage of employees are excluded from pension benefits. Over 96% of the employees for whom contributions have been made never receive a pension. According to a Senate report relied upon by plaintiffs' expert, the average exclusion rate for pension plans containing a service requirement of eleven years or more is 92%.
Plaintiffs also contend that the pension benefits paid to employees who meet the service requirement are unreasonably high, and that lower benefits should be received by a greater number of retirees. Plaintiffs advocate a 10-year service requirement that would result in pension eligibility for plaintiffs.
The district court concluded that the trustees adequately explained the reasons for the 15-year vesting requirement and the 96% exclusion rate. The principal findings of the district court concerned the unusual work patterns of construction laborers covered by the Fund. The level of terminations from covered employment is higher among construction laborers than in other industries or in other job classifications within the construction industry. The high level of terminations results from a number of factors, including high disability rates, the cyclical availability of construction work, the close relationship of the condition of the industry to the general economic condition of the country, and the movement of construction laborers to more skilled positions.
The court further found that the average age of employees qualifying for benefits had steadily decreased. In addition, trustees of the Fund have adopted a number of rules since the establishment of the trust which, the district court found, relaxed eligibility conditions. These included:
1. Lowering from 65 to 62 the age at which benefits could be obtained with 15 years of service;
2. Removing retirement age requirements completely for employees with 25 years service;
3. Relaxing standards for curing a "break in service";
4. Establishing national reciprocity agreements under which credited service with one local could be transferred to another.
The district court also considered the plaintiffs' argument that the plan's high benefit level, in addition to its high exclusion rate, required the district court to find in their favor. The district court, however, reviewed evidence which included the benefit levels of other plans and the relationship between the increasing benefits and the rising hourly contributions.
Finally, the district court found that reducing the length of the...
To continue reading
Request your trial
-
Brown v. Retirement Committee of Briggs & Stratton Retirement Plan
...a supporting brief and an affidavit. The defendants therefore did not violate the district's local rules.2 The court in Miranda v. Audia, 681 F.2d 1124 (9th Cir.1982), described the "structural defect" test in this way:Federal court review of trust fund plans derives from 29 U.S.C. Sec. 302......
-
Phillips v. Alaska Hotel and Restaurant Employees Pension Fund, s. 89-35735
...Cir.1982). We review de novo these ultimate conclusions. Underlying findings of fact are reviewed for clear error. See Miranda v. Audia, 681 F.2d 1124, 1127 (9th Cir.1982), cert. denied, 464 U.S. 813, 104 S.Ct. 67, 78 L.Ed.2d 82 B. Application of § 302(c)(5) A pension plan is structurally d......
-
Hurn v. Retirement Fund Trust of Plumbing, Heating and Piping Industry of Southern California
...312 F.2d 345 (D.C.Cir.1962)); see, e.g., Elser v. I.A.M. National Pension Fund, 684 F.2d 648, 654 (9th Cir.1982); Miranda v. Audia, 681 F.2d 1124, 1125 (9th Cir.1982); Brug v. Pension Plan, 669 F.2d 570, 573-74 (9th Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 135, 74 L.Ed.2d 116 (1982). U......
-
Harm v. Bay Area Pipe Trades Pension Plan Trust Fund
...that exclude employees from receiving benefits for reasons which are arbitrary and capricious violate section 404. 4 Miranda v. Audia, 681 F.2d 1124, 1125 (9th Cir.1982); Fentron Industries v. National Shopmen Pension Fund, 674 F.2d 1300, 1307 (9th Cir.1982); Brug v. Pension Plan, 669 F.2d ......