Vorpahl, In re, 82-2087
| Citation | 695 F.2d 318 |
| Decision Date | 17 December 1982 |
| Docket Number | No. 82-2087,82-2087 |
| Parties | 3 Employee Benefits Ca 2597 In re Lucian G. VORPAHL, H.T. Bartelme, John R. Pelinka, Charles P. McClure, Delores Johnson, Everett A. Olsen, Wells L. Wescott, Roy E. McGee, Joseph B. Raba, Russell E. Ritzler, Robert Packowski, Cadwalder I. Larson, Simon S. Siefert, Carol B. Christ, William H. Graham, Leonard A. Rabe, Irving W. Twito, J.E. Culpepper, Robert H. May, Lawrence E. Wallace, Glenn E. Hubbard, Donald G. King, James C. Peterson, Therese K. Schaefer, LaDonna J. Slowik, Gerald M. Soller, Robert H. Huber and Eugene M. Austin, on their own behalf and on behalf of all other persons similarly situated, Petitioners. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Stephen Beatty, Hessian, McKasy & Soderberg, Minneapolis, Minn., for appellant.
Robert Brunig, O'Connor & Hannan, Minneapolis, Minn., for appellee.
Before LAY, Chief Judge, JOHN R. GIBSON and FAGG, Circuit Judges.
Petitioners seek a writ of mandamus ordering the district court 1 to vacate its order striking the demand for jury trial filed in this action seeking present and future pension benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001-1144 (1976). Because we conclude that petitioners are not statutorily or constitutionally entitled to a jury trial, we deny the writ.
Petitioners are present or former employees of Union Oil Company of California (Union Oil) or its subsidiaries. They brought an action for current and future benefits against the Retirement Plan for Employees of Union Oil Company of California and Participating Companies (Union Retirement Plan), Union Oil, and United California Bank, and demanded a jury trial. Their complaint alleged that the Union Retirement Plan was created for the benefit of employees of Union Oil and its subsidiaries and that respondents failed to give credit to the employees for their service with W.H. Barber Company, Northwestern Oil Company, Pure Oil Company, and a fourth unknown corporation. Barber and Northwestern had been acquired by Pure, and Pure, Barber, and Northwestern had been subsequently acquired by Union Oil. The complaint alleged that under ERISA the Union Retirement Plan is required to calculate pension benefits in a manner which credits all employees with their full period of employment with Barber, Northwestern, Pure, the unknown corporation, and Union Oil. Finally, the complaint alleged that respondents' denial to do so violated provisions of the Union Retirement Plan and ERISA, and was in breach of the fiduciary duties owed by defendants to plaintiffs and members of plaintiffs' class.
Petitioners sought declaratory relief that the Union Retirement Plan and Union Oil had violated provisions of the Union Retirement Plan and ERISA by denying petitioners present and future benefits; a permanent injunction to restrain the Union Retirement Plan and Union Oil from further unlawful action; an award of all retirement benefits unlawfully withheld; and an award of attorney fees.
Following the district court's order striking the demand for a jury trial, petitioners applied to this court for a writ of mandamus directing the district court to vacate its order and to proceed with a jury trial. Petitioners primarily contend that they are entitled to a jury trial under section 502 of ERISA, 29 U.S.C. Sec. 1132 (1976), or under the seventh amendment to the United States Constitution.
The remedy of mandamus in determining the right to a jury trial is firmly settled. See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 480, 82 S.Ct. 894, 901, 8 L.Ed.2d 44 (1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 511, 79 S.Ct. 948, 957, 3 L.Ed.2d 988 (1959). See generally 9 C. Wright & A. Miller, Federal Practice and Procedure Sec. 2322, at 104-05 (1971).
The question of the right to a jury trial in an action seeking present or future benefits has not yet been determined by this court. 2 In making that determination here, we consider an initial question concerning the proper characterization of petitioners' claim. Petitioners contend that their action is essentially one of breach of contract and, as such, is a legal claim for which they are entitled to a jury. We disagree. Petitioners' complaint, and similarly their first amended complaint, states no claim based on breach of contract but simply claims that the denial of benefits "is in violation of the provisions of the Union Retirement Plan, Public Law 93-406, (E.R.I.S.A.), and is in breach of the fiduciary duties owed by defendants"; the claim of breach of contract is added only in the petition for writ of mandamus. 3 Moreover, both petitioners' complaint and amended complaint base their jurisdiction claim on 29 U.S.C. Sec. 1132 (1976), which provides for a civil action to enforce rights under ERISA, and on 28 U.S.C. Sec. 1337 (1976), which confers jurisdiction on federal courts over actions arising under federal statutes regulating commerce or protecting trade. There is no claim of jurisdiction under the federal diversity statute as would be required in a breach of contract action.
Petitioners also contend that because the pension plan was not the product of collective bargaining and is simply an adhesion contract, the laws relating to trusts should not apply. The short answer to petitioners' contention is that pension plans authorized under ERISA, of which the Union Retirement Plan is one, must be established as trusts; trustees are to be named in the trust instrument, or appointed by a person who is a named fiduciary, and, with certain exceptions, are to be given exclusive authority and discretion to manage and control the trust assets. 29 U.S.C. Sec. 1103(a) (1976). 4 In addition, this court has previously made no distinction between pension plans that are collectively bargained and those that are not, in reviewing trustees' decisions under a pension plan. Compare Quinn v. Burlington Northern Inc. Pension Plan, 664 F.2d 675, 676-77 (8th Cir.1981) (), cert. denied, --- U.S. ----, 102 S.Ct. 1976, 72 L.Ed.2d 444 (1982) with Bueneman v. Central States, Southeast & Southwest Areas Pension Fund, 572 F.2d 1208, 1209 (8th Cir.1978) (). Rather, this court has uniformly reviewed trustees' decisions under the arbitrary, capricious, or abuse of discretion standard. See, e.g., Quinn v. Burlington Northern Inc. Pension Plan, supra, 664 F.2d at 678; Morgan v. Mullins, 643 F.2d 1320, 1321 (8th Cir.1981); Bueneman v. Central States, Southeast & Southwest Areas Pension Fund, supra, 572 F.2d at 1209. We see no reason to depart from this uniform treatment in this case.
Having disposed of these initial contentions, we turn to the question of whether petitioners are entitled to a jury trial under ERISA Sec. 502, 29 U.S.C. Sec. 1132 (1976). Section 502 provides in pertinent part:
(a) Persons empowered to bring a civil action
A civil action may be brought--
(1) by a participant or beneficiary--
....
(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;
....
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan; ....
The ERISA statute does not explicitly address the right to a jury trial. Two circuit courts that have considered the question have concluded there is no such right. Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir.1980); Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d 820, 830 (7th Cir.1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981). Another circuit court has adopted, without opinion, the opposite position. Pollock v. Castrovinci, 476 F.Supp. 606, 608-09 (S.D.N.Y.1979), aff'd without opinion, 622 F.2d 575 (2d Cir.1980); Stamps v. Michigan Teamsters Joint Council No. 43, 431 F.Supp. 745 (E.D.Mich.1977), is a much cited case standing for the same proposition.
We conclude that Wardle and Calamia more carefully and adequately analyze the question presented, and agree that no jury trial is required in cases under this section.
In the absence of any clear congressional intent in section 502, the Wardle court reasoned:
Congress' silence on the jury right issue reflects an intention that suits for pension benefits by disappointed applicants are equitable. Such suits under the law of trusts have existed for quite a while in state courts and have been entertained in federal courts under their diversity jurisdiction. These suits have been considered equitable in character.... This conclusion has been based primarily on the law of trusts, which provides a beneficiary with a legal remedy only with respect to money the trustee is under a duty to pay unconditionally and immediately to the beneficiary. Restatement (Second) of Trusts Secs. 197-198 (1959). Thus the most reasonable interpretation is that Congress intended to provide general federal jurisdiction over these equitable suits that had traditionally been brought in state courts. [Wardle v. Central States, Southeast & Southwest Areas Pension Fund, supra, 627 F.2d at 829 (citations and footnote omitted).]
Wardle found further support for this interpretation in other considerations. In particular, the court observed that federal courts have interpreted the scope of review in actions under section 502(a)(1)(B) to be identical to the limited review in earlier actions for pension benefits, namely, the arbitrary and capricious standard. The court further observed that such a limited scope of review "bespeaks a legislative scheme granting...
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