Virginia Beach Policemen's Benev. Ass'n v. Reich

• Decision Date: 10 September 1996
• Docket Number: Nos. 95-1773,95-2013,s. 95-1773
• Citation: 1996 WL 511426,96 F.3d 1440
• Parties: 20 Employee Benefits Cas. 1836 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. VIRGINIA BEACH POLICEMEN'S BENEVOLENT ASSOCIATION; Robert Matthison, joint trustee of the Centurion Health and Welfare Benefit Plan; Michael F. Gelardi, joint trustee of the Centurion Health and Welfare Benefit Plan, Plaintiffs-Appellants, v. Robert B. REICH, Secretary of Labor; United States Department of Labor, Defendants-Appellees. Michael F. GELARDI, in his official capacity as a Trustee of the Centurion Health Trust; Robert W. Mathieson, in his official capacity as a Trustee of the Centurion Health Trust; Virginia Beach Police Benevolent Association, Local 34, Plaintiffs-Appellants, v. Andrew J. KARPINSKI, individually and in his official capacity as Commissioner of Insurance for the State of New Jersey; Jack Ehnes, individually and in his official capacity as Commissioner of Insurance for the State of Colorado; Linda S. Kaiser, individually and in her official capacity as Commissioner of Insurance for the Commonwealth of Pennsylvania; Edward J. Muhl, individually and in his official capacity as Superintendent of Insurance for the State of New York, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1440

96 F.3d 1440

20 Employee Benefits Cas. 1836

NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.

VIRGINIA BEACH POLICEMEN'S BENEVOLENT ASSOCIATION; Robert

Matthison, joint trustee of the Centurion Health and Welfare

Benefit Plan; Michael F. Gelardi, joint trustee of the

Centurion Health and Welfare Benefit Plan, Plaintiffs-Appellants, v. Robert B. REICH, Secretary of Labor; United States

Department of Labor, Defendants-Appellees.

Michael F. GELARDI, in his official capacity as a Trustee of

the Centurion Health Trust; Robert W. Mathieson, in his

official capacity as a Trustee of the Centurion Health

Trust; Virginia Beach Police Benevolent Association, Local

34, Plaintiffs-Appellants,

v.

Andrew J. KARPINSKI, individually and in his official

capacity as Commissioner of Insurance for the State of New

Jersey; Jack Ehnes, individually and in his official

capacity as Commissioner of Insurance for the State of

Colorado; Linda S. Kaiser, individually and in her official

capacity as Commissioner of Insurance for the Commonwealth

of Pennsylvania; Edward J. Muhl, individually and in his

official capacity as Superintendent of Insurance for the

State of New York, Defendants-Appellees.

Nos. 95-1773, 95-2013.

United States Court of Appeals, Fourth Circuit.

Argued June 5, 1996.

Decided Sept. 10, 1996.

ARGUED: Wyatt B. Durrette, Jr., DURRETTE, IRVIN & BRADSHAW, P.C., Richmond, Virginia, for Appellants. Alexander Fernandez, Michael Edmond Goldman, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Appellees. ON BRIEF: Barrett E. Pope, Arnold C. Moore, Jr., William O. Quirey, Jr., DURRETTE, IRVIN & BRADSHAW, P.C., Richmond, Virginia; Michael T. Leibig, Carla M. Siegal, ZWERDLING, PAUL, LEIBIG, KAHN, THOMPSON & DRIESEN, P.C., Fairfax, Virginia, for Appellants. Thomas S. Williamson, Jr., Marc I. Machiz, Leslie C. Perlman, Karen L. Handorf, Dan Doyle, Stephen G. Smith, Anne L. Buckborough, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Appellees.

E.D.Va.

AFFIRMED.

OPINION

Before RUSSELL, WILKINS, and NIEMEYER, Circuit Judges.

PER CURIAM:

The Virginia Beach Policemen's Benevolent Association ("PBA") is a labor union established to support Virginia Beach police officers. The PBA is the recognized collective bargaining representative of all security personnel employed at Ocean Breeze Festival Park, Inc. ("Ocean Breeze"). The PBA and Ocean Breeze entered into a collective bargaining agreement on October 20, 1992. That agreement created the Centurion Health Trust, which established the Centurion Health & Welfare Benefit Plan (the "Centurion Plan") to provide health benefits to PBA members.

The Centurion Plan began providing health coverage in January 1993. Since its inception, the Centurion Plan has actively solicited health insurance business in various states. The Centurion Plan currently covers approximately 10,000 individuals, even though only approximately 20 of its covered individuals are PBA members employed by Ocean Breeze.

Under § 3(40)(A)(i) of ERISA, a "multiple employer welfare arrangement" is an employee welfare benefit plan that offers or provides welfare benefits to the employees of two or more employers. 29 U.S.C. § 1002(40)(A)(i). A multiple employer welfare arrangement is subject to state insurance regulations unless it is established or maintained pursuant to an agreement that the Secretary of Labor finds to be a collective bargaining agreement. 29 U.S.C. §§ 1002(40)(A)(i) and 1144(b)(6).

On December 17, 1992, representatives of the Centurion Plan requested that the Secretary of Labor issue an advisory opinion finding that the Centurion Plan is established or maintained pursuant to a collective bargaining agreement, and thus exempt from state insurance regulations under ERISA § 3(40)(A)(i). The Secretary responded that he was not prepared to make a finding under ERISA § 3(40)(A)(i). Subsequently, the Department of Labor decided that, in lieu of making case-specific determinations, it would develop a regulation to address whether multiple employer welfare plans are established or maintained pursuant to collective bargaining agreements. On November 14, 1994, the Department of Labor formally announced its intention to publish such a regulation. 59 Fed.Reg. 57,800 (Nov. 14, 1994).

Meanwhile, state regulators have attempted to bring the Centurion Plan into compliance with the insurance laws of the states in which Centurion has marketed its health coverage. On April 20, 1993, the Centurion Plan entered into a consent decree with the Commonwealth of Virginia in which it agreed not to recruit new health plan...