Woodfork v. Marine Cooks & Stewards Union

• Decision Date: 17 April 1981
• Docket Number: No. 78-1324,78-1324
• Citation: 642 F.2d 966
• Parties: 107 L.R.R.M. (BNA) 2693, 91 Lab.Cas. P 12,714, 2 Employee Benefits Ca 1278 John WOODFORK, Plaintiff-Appellant, v. MARINE COOKS & STEWARDS UNION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 966

642 F.2d 966

107 L.R.R.M. (BNA) 2693, 91 Lab.Cas. P 12,714,

2 Employee Benefits Ca 1278

John WOODFORK, Plaintiff-Appellant, v. MARINE COOKS & STEWARDS UNION et al., Defendants-Appellees.

No. 78-1324.

United States Court of Appeals Fifth Circuit.

April 17, 1981.

Robert O. Homes, Jr., Metairie, La., for plaintiff-appellant.

Dodd, Barker, Boudreaux, Lamy & Gardner, C. Paul Barker, New Orleans, La., Ernst & Daniels, Richard Ernst, San Francisco, Cal., for defendants-appellees.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before TJOFLAT, RUBIN and TATE, Circuit Judges.

TJOFLAT, Circuit Judge:

In this federal diversity case we must decide whether federal law, under either the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1381 (1976), or § 301 or § 302 of the Taft-Hartley Act, 29 U.S.C. §§ 185 and 186 (1976), preempts a merchant seaman's state-law claim that he is entitled to pension benefits. The district court determined that ERISA preempted the claim and accordingly dismissed the case. We think the district court misconstrued ERISA's preemption provision in making that determination and therefore reverse and remand the case for further proceedings.

I The Facts

In 1964, John Woodfork, a member of the Seafarers' International Union and a participant in its pension plan, The Pacific District Pension Fund (the Pension Plan), was involved in an altercation aboard ship. Disciplinary proceedings were initiated against Woodfork and resulted in reduction of his union seniority status to zero. With zero seniority, Woodfork was unable to secure work with employers signatory to the Pension Plan. Since credit toward a pension was based on work for such employers, Woodfork's participation in the Pension Plan effectively ended with his loss of seniority.

At the time of his seniority reduction, Woodfork had accumulated 16 years of credit toward his pension. Had Woodfork been 65 years of age and "retired" from marine employment, this amount of pension credit would have entitled him to a "reduced pension" under the terms of the Pension Plan then in effect. Woodfork, however, was only 57 years of age and thus did not qualify for reduced pension benefits in 1964.

The minimum age for pension eligibility was lowered to age 62 in 1965; in 1969, after Woodfork attained that age, he went to his union office to inquire about applying for a pension. Representatives of the union advised him that he was ineligible for pension benefits because he had not accumulated 90 days of pension credit "during the 24-month period immediately preceding his application for his pension," as required by the terms of the Pension Plan. Record, Exhibits Volume, D-1, at 10. Apparently relying on this advice, Woodfork neither submitted a pension application nor initiated any other sort of direct contact with the Pension Plan office.

In 1974, after ERISA was enacted, Woodfork hired an attorney to investigate his pension eligibility. The attorney sent a letter to the union on December 27, 1974, requesting various information he felt was needed to determine "what rights, if any, Mr. Woodfork has to obtain a pension, or the alternative (sic), to obtain a refund of whatever monies were deposited in the pension fund by either himself (sic) or any of his employers." Record, Exhibits Volume, D-23. The attorney sent a second letter, dated February 6, 1975, which stated that it should be treated as an application for pension benefits. Id. at D-24. The Pension Plan began processing the February letter as an application, but before it reached a final decision, Woodfork filed this lawsuit alleging entitlement to pension benefits. Shortly thereafter, the Pension Plan notified Woodfork that it had found him ineligible for benefits.

II The Complaint and the Proceedings in the District Court

Woodfork's complaint alleged that the Pension Plan refused to pay him benefits to which he was entitled; jurisdiction was premised on the civil enforcement provision of ERISA, 29 U.S.C. § 1132 (1976), and on sections 301 and 302 of the Taft-Hartley Act, 29 U.S.C. §§ 185 and 186 (1976). The action was filed in the Eastern District of Louisiana, where Woodfork lived.

The officers of the Pension Plan were located in San Francisco, and the plan administrator and the plan trustees also resided in California. ¹ Defendants moved under the venue provisions of ERISA and the Taft-Hartley Act to transfer venue to the Northern District of California. ² To avoid the possibility that his suit would have to be prosecuted in California, ³ Woodfork amended his complaint to substitute a state claim of pension entitlement for the federal claims. In the amended complaint, jurisdiction was premised on diversity. Since in a diversity case venue lies in any district in which the plaintiff resides, the defendants were compelled to withdraw their challenge to venue, and the case proceeded to trial.

A pretrial stipulation set forth several contested legal issues, which, for purposes of this appeal, may be reduced to the following question: whether the amended complaint, relying exclusively on California law, stated a claim on which relief could be granted. According to defendants, the complaint did not state such a claim because: (1) state law was preempted by ERISA, and by sections 301 and 302 of the Taft-Hartley Act; and (2) assuming that state law was not preempted, Woodfork had no right under California law to receive benefits in contravention of the specific and unambiguous terms of the pension plan.

The case came to trial before the court and, after post-trial briefing, the district court dismissed the cause. The reason for the dismissal was explained as follows:

(T)he 1974 Employee Retirement Income Security Act (ERISA) preempted the field and superseded state law. The 1974 Act is applicable to all causes of actions (sic) arising after its effective date, January 1, 1975. Since application for benefits and the denial of them occurred subsequent to the effective date of the statute, and since Plaintiff alleged only a state law claim and state law was inapplicable, the claim (is) dismissed.

Record, Vol. I at 124 (citations omitted).

Plaintiff moved for reconsideration, or alternatively, to amend the complaint to restore the ERISA and Taft-Hartley claims. The court denied the motion and plaintiff brought this appeal.

Woodfork's basis for this appeal is that ERISA did not supersede his state law claim because that claim was covered by two statutory exceptions to ERISA's preemption provision. If we find, however, that ERISA does preempt the state law claim, Woodfork asks that we instruct the district court to grant his motion to amend the complaint to restore his federal claims.

In asking us to affirm, defendants urge that the district court correctly determined that ERISA preempted the state law claim. Alternatively, defendants contend that the district court's decision should be sustained because (1) sections 301 and 302 of the Taft-Hartley Act preempt the state law claim; and (2) even if applicable, no theory of California law supports Woodfork's position that he is entitled to a pension.

III ERISA Preemption

The Employee Retirement Income Security Act was enacted on September 2, 1974; the effective date of the provisions of the Act relevant to this appeal is January 1, 1975. One of the purposes of ERISA is "to protect ... the interests of participants in employee benefit plans ... by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies ... and ready access to the Federal courts." 29 U.S.C. § 1001(b) (1976). ERISA's drafters felt that this purpose would best be served by creating a comprehensive federal scheme of pension plan regulation that preempted all state regulation. The need for preemption was explained by Senator Harrison A. Williams, one of the principal authors of ERISA, as follows:

It should be stressed that with the narrow exceptions specified in the bill, the substantive and enforcement provisions ... are intended to preempt the field for Federal regulations, thus eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans.

(1974) U.S.Code Cong. & Adm.News 4639, 5188.

The substantive provision of ERISA accomplishing preemption of state law is 29 U.S.C. § 1144 (1976), which reads as follows:

(a) Except as provided in subsection (b) of this section, the provisions of this subchapter ... shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan .... This section shall take effect on January 1, 1975.

(b)(1) This section shall not apply with respect to any cause of action which arose, or any act or omission which occurred, before January 1, 1975.

Under section 1144, then, the question whether ERISA preempts California common law turns on whether subsection (b)(1) applies to Woodfork's claim. Subsection (b)(1) removes from the supercession requirement (a) causes of action which arose before January 1, 1975 (the "cause-of-action exception") and (b) acts or omissions which occurred before January 1, 1975 (the "act-or-omission exception"). Woodfork presents a two-fold argument that ERISA has no application in his case: (1) his cause of action arose before January 1, 1975; and, alternatively, (2) that his cause of action is based in part on an act or omission that occurred prior to that date.

We agree with Woodfork to this extent: we think there is an unresolved question of fact, and of law, whether his cause of action accrued before January 1, 1975, and we therefore remand to the district court to determine when the cause of action arose. We disagree, however, with Woodfork's second contention; we hold instead that a cause of action arising after January 1, 1975, is an ERISA claim even though it may...