Stewart v. TRUSTEES, MASTERS, MATES & PILOTS PEN.
| Decision Date | 04 February 1977 |
| Docket Number | No. C-73-1494 WHO.,C-73-1494 WHO. |
| Citation | 432 F. Supp. 742 |
| Court | U.S. District Court — Northern District of California |
| Parties | Alfred J. STEWART, Plaintiff, v. TRUSTEES, MASTERS, MATES & PILOTS PENSION PLAN, et al., Defendants. |
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Graham & James, San Francisco, Cal., for plaintiff.
Gladstein, Leonard, Patsey & Anderson, San Francisco, Cal., for all defendants but Pacific Maritime.
Richard Ernst, Dennis T. Daniels, San Francisco, Cal., for Pacific Maritime.
This is an action brought under Sections 301 and 302 of the Labor Management Relations Act of 1947, as amended (29 U.S.C. §§ 185 and 186), for certain pension plan benefits the defendant, Trustees of the Masters, Mates & Pilots Pension Plan (Trustees), are allegedly denying plaintiff. Plaintiff, a Licensed Deck Officer who is covered by the Masters, Mates & Pilots Pension Plan (the Plan), alleges that the Trustees are violating the Plan's Rules and Regulations by limiting his accrued pension credits to 20 years, rather than 25 or more years allowed under certain amendments to the Rules and Regulations, thereby making him ineligible for a larger pension when he retires.
The case is before the Court on cross motions for summary judgment upon a record consisting of a stipulation of facts, a stipulation with respect to the testimony of Stephen P. Maher, the Administrator of the Plan, and documents admitted into evidence as exhibits.
For the reasons hereinafter set forth, the Court grants defendant's motion for summary judgment, and denies plaintiff's motion for summary judgment.
Plaintiff started to go to sea as a licensed deck officer in 1942. In 1955, the Trustees established the Masters, Mates and Pilots Pension Plan pursuant to 29 U.S.C. § 186. Plaintiff was covered by this Plan until he voluntarily left covered employment for personal reasons in July of 1960. In 1962, while still engaged in uncovered employment, plaintiff was severely injured. He was classified in 1963 as permanently not fit for sea duty. He therefore applied for and received a monthly disability pension for more than four years until 1968 when he was reclassified as fit for duty. The monthly benefits he received were computed on the basis of the 17½ years plaintiff had spent in covered employment prior to July of 1960 pursuant to the Article II schedule of the Regulations.
In 1968, the Trustees allowed plaintiff to return to sea and be reinstated under Article II pursuant to Section 14(a) of Article II. Contrary to the terms of Section 14(a), plaintiff was told he would be allowed to accrue up to 20 years' pension credits — the maximum allowed under Article II — pursuant to a Resolution adopted by the Trustees on August 25, 1966, designed to meet the American deck officer shortage during the Vietnam crisis. On the same date, the Article II-A schedule was added to the Regulations by the Trustees which allowed members' employees to accrue credited service up to 25 years. Article II-A became effective in 1968 before plaintiff was reinstated.
The Rules and Regulations have since been amended to allow accrual up to 30 years, and a further increase is currently under consideration. Plaintiff reached Article II's 20-year limit in 1970, Article II-A's 25-year limit in 1975, and is still sailing. The Trustees have fully heard plaintiff's claims on two occasions, and on both determined that upon retirement plaintiff's pension will be computed on the basis of Article II's 20-year limit.
Plaintiff claims that the Trustees have breached the trust agreement by determining that he is not entitled to accrue credited service under Article II-A and other amendments to the Rules and Regulations promulgated after his return to service in 1968. He next claims that by excluding him from the operation of Article II-A the Trustees acted arbitrarily and capriciously in formulating and adopting the Vietnam Crisis Resolution and in deciding his individual case.
The Trustees deny plaintiff's claims and argue, first, that the controversy is not ripe for adjudication, since plaintiff has not yet re-applied for retirement benefits, and that plaintiff's claim under 29 U.S.C. § 186 that the Trustees acted arbitrarily and capriciously in adopting the Vietnam Crisis Resolution and in hearing his claims, is not properly before the Court, since plaintiff failed to raise the issue in his complaint. They next argue that plaintiff was afforded a full and fair opportunity to air his claims pursuant to the trust agreement, and as such their determination with respect to his claims is final and binding on the Court. Finally, they argue that their adoption of the Resolution and determination of plaintiff's claims were the result of their good faith efforts to serve all the members of their bargaining group, and as such should not be set aside.
The Trustees claim that the case is not ripe for adjudication because plaintiff is still working, has not reapplied for a pension, and no decision on such an application has been made. They argue that plaintiff, now age 55, may die without retiring, the Plan may be changed before he retires, or plaintiff may change his type of employment, such that the issues before the Court are hypothetical or abstract. In support, the Trustees rely on Lugo v. Employees Retirement Fund of Illumination Products Industry, 529 F.2d 251 (2d Cir. 1976), which held that the court should not determine a challenge by a 53-year-old union member to a rule making 60 the minimum age for application for union retirement fund benefits. The case is inapposite. Here, plaintiff accrued sufficient service time to apply for benefits under either Article II or II-A, and the Trustees have taken a firm position that he may only accrue pension benefits up to 20 years. Thus, the disagreement between plaintiff and the Trustees has "taken on fixed and final shape so that a court can see what legal issues it is deciding, what effect its decision will have on the adversaries, and some useful purpose to be achieved in deciding them." Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237, 244, 73 S.Ct. 236, 240, 97 L.Ed. 291 (1952); Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937).
The Trustees next claim that the Court is without jurisdiction over plaintiff's Section 186 claim that the Trustees acted arbitrarily and capriciously in formulating and adopting the Vietnam Crisis Resolution and in deciding plaintiff's individual case. In support, they claim that plaintiff failed to plead Section 186 jurisdiction, complained only that the contract between his employer and the labor organization has been violated, and that plaintiff did not mention Section 186 in his trial brief and proposed findings and conclusions.
However, in its August 2, 1976, brief, plaintiff cited cases construing Section 186, the parties have stipulated that the Plan is a Section 186 Trust, and evidence has been admitted relating to whether the Trustees' action with respect to plaintiff was arbitrary and capricious. Moreover, in chambers and in their proposed joint pretrial statement, the Trustees acknowledged that the issue was present in the case. In light of the liberal approach afforded under the Federal Rules of Civil Procedure notice pleading — specifically Rule 15(b) allowing amendments to the pleadings to conform to the evidence — the Trustees' objection to this Court's jurisdiction over the Section 186 claim is without merit. Furthermore, the Trustees can hardly be said to have been surprised or prejudiced by plaintiff's reference to Section 186 by name at this stage in the proceedings.
The Court, therefore, finds that plaintiff's claims under both Sections 185 and 186 of Title 29 are ripe for adjudication and are properly before the Court.
Where, as here, a beneficiary under a pension trust created under Section 302 of the Labor Management Relations Act brings an action challenging an eligibility rule of the trust or an interpretation thereunder, a court should interfere with the trustees' broad discretion in settling eligibility rules only when the rule is unreasonable or its enforcement arbitrary. Giler v. Board of Trustees of Sheet Metal Workers Pension Plan, 509 F.2d 848 (9th Cir. 1974). The standard of review under both Sections 185 and 186 is thus limited to whether the Trustees acted arbitrarily and capriciously, in bad faith, or beyond the scope of their authority as defined by the Plan in refusing to allow plaintiff to accrue pension credits beyond 20 years. Alvares v. Erickson, 514 F.2d 156 (9th Cir. 1975); Sheeder v. Eastern Express, Inc., 375 F.Supp. 655 (W.D.Pa.1974); Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953).
Under Section 185, if there has been a hearing on the merits before a grievance committee provided for under a collective bargaining agreement, the committee's dismissal on the merits is final and binding and cannot be overturned unless it is dishonest, capricious, beyond the committee's authority under the bargaining agreement, or clearly unreasonable. Sheeder v. Eastern Express, Inc., supra; Giler v. Board of Trustees of Sheet Metal Workers Pension Plan, supra.
Here, the Trust Agreement provides that the Trustees shall have "full authority to determine all questions of nature, amount, and duration of benefits to be paid under the Plan," to "promulgate and establish rules and regulations for the administration and operation thereof," to "formulate and establish conditions of eligibility for pensions and past and future service," and that "any construction and interpretation by the Trustees shall be binding upon all parties and persons concerned." Amendment Number 41 to Article V of the Plan provides for the grievance procedure, and Exhibits 5 through 17...
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