WestRock RKT Company v. Pace Industry Union - Management Pension Fund , 856 F.3d 1320 ( 2017 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-16443
________________________
D.C. Docket No. 1:15-cv-03505-CC
WESTROCK RKT COMPANY,
Plaintiff - Appellant,
versus
PACE INDUSTRY UNION- MANAGEMENT PENSION FUND,
BOARD OF TRUSTEES OF THE PACE INDUSTRY UNION-
MANAGMENT PENSION FUND,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(May 16, 2017)
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Before WILSON and ANDERSON, Circuit Judges, and ROTHSTEIN,∗ District
Judge.
WILSON, Circuit Judge:
WestRock, an employer contributing to the Pace Industry Union-
Management Pension Fund (Fund), is challenging an action taken by the Fund’s
Board of Trustees (Board). WestRock alleges it has a cause of action to challenge
the Board’s action under two sections of the Employee Retirement Income
Security Act (ERISA). The district court ruled that WestRock does not have a
valid cause of action. We affirm that ruling.
I. BACKGROUND
The Fund is a multiemployer pension plan, see 29 U.S.C. § 1002(37)
(defining multiemployer plan), administered by the Board. Half of the Board’s
members are appointed by participating employers, and the other half are
appointed by the sponsoring labor union. See 29 U.S.C. § 186(c)(5)(B) (stating
that employers must be “equally represented in the administration” of a pension
fund). The Board is the Fund’s sponsor, meaning it is tasked with administering
the Fund. See 29 U.S.C. § 1002(16)(B) (defining plan sponsor). WestRock is an
employer that has been a long-time contributor to the Fund. The Fund is in
∗
Honorable Barbara Jacobs Rothstein, United States District Judge for the District of Columbia,
sitting by designation.
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“critical status,”1 which means it is in dire financial condition. Because of its
“critical status,” special funding rules required the Board to adopt a rehabilitation
plan for the Fund. A rehabilitation plan consists of actions, such as reductions in
plan expenditures, reductions in future benefit accruals, and increases in
contribution rates, designed to improve the Fund’s financial outlook. See 29
U.S.C. § 1085(e)(3)(A).
The Board adopted a rehabilitation plan in 2010. Two years later, the Board
amended the Fund’s rehabilitation plan (Amendment) to include a provision
requiring an employer that withdraws from the Fund to pay a portion of the Fund’s
accumulated funding deficiency.2 WestRock brought a declaratory judgment
action against the Fund, seeking a declaration that the Amendment violates ERISA.
WestRock argued it could bring the cause of action under 29 U.S.C.
§§ 1132(a)(10) or 1451(a). The Fund argued that the Amendment was valid and
that those two sections of ERISA do not provide WestRock with a cause of action
for declaratory relief. The district court agreed with the Fund that ERISA provides
no cause of action and granted the Fund’s motion to dismiss the complaint.
1
As defined by 29 U.S.C. § 1085(b)(2).
2
Under 29 U.S.C. § 1084(a), a fund’s accumulated funding deficiency is the amount by
which the accumulated charges to the plan’s “funding standard account” exceed the accumulated
credits to that account at the end of a plan year.
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II. STANDARD OF REVIEW
We review questions of statutory interpretation and the district court’s
dismissal of a complaint pursuant to Rule 12(b)(6) de novo. See McNutt ex rel.
United States v. Haleyville Med. Supplies, Inc., 423 F.3d 1256, 1259 (11th Cir.
2005).
III. DISCUSSION
This case is one of first impression and turns on statutory interpretation.
ERISA “sets forth those parties who may bring civil actions under ERISA and
specifies the types of actions each of those parties may pursue.” Gulf Life Ins. v.
Arnold, 809 F.2d 1520, 1524 (11th Cir. 1987). Thus, “civil actions under ERISA
are limited only to those parties and actions Congress specifically enumerated.”
Id. WestRock believes that it has a valid cause of action under 29 U.S.C.
§§ 1132(a)(10) or 1451(a). With respect to the former section, WestRock argues
that § 1132(a)(10) gives it a broad cause of action to raise procedural and
substantive challenges to the Board’s action when adopting or updating the
rehabilitation plan, while the Board argues that § 1132(a)(10) is a narrow cause of
action that only permits a suit when the Board has not followed specific statutorily
required procedures. With respect to the latter section, WestRock asserts that
§ 1451(a), which allows employers to sue over any act under Subtitle E, provides a
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cause of action because the Amendment, according to WestRock, was an act under
Subtitle E. The Board disagrees. We begin with § 1132.
A. 29 U.S.C. § 1132(a)(10)
Under the original § 1132—titled “civil enforcement”—there was no cause
of action for an employer. See Pub. L. No. 93–406, 88 Stat. 829 (1974). Section
1132 authorized various causes of action primarily for participants in or
beneficiaries of a pension plan. For much of ERISA’s history, § 1132(a) did “not
authorize contributing employers to bring any kind of civil suit at all.” See Dime
Coal Co., Inc. v. Combs, 796 F.2d 394, 397 (11th Cir. 1986). Congress limited
employers’ rights because ERISA was enacted to protect employees’ retirement
income. See Aetna Health Inc. v. Davila, 542 U.S. 200, 208, 124 S. Ct. 2488, 2495
(2004) (Thomas, J.) (“Congress enacted ERISA to protect the interests of
participants in employee benefit plans and their beneficiaries . . . .” (internal
quotation marks omitted)).
However, in 2006, Congress passed the Pension Protection Act (PPA),
which amended § 1132 and provided employers a cause of action. Pub. L. No.
109–280, 120 Stat. 780 (2006). The PPA amended ERISA to create special
funding rules for funds that were at risk of not being able to meet their distribution
commitments. See 29 U.S.C. § 1085 (laying out rules for plans that are in
“endangered” or “critical” status). One of those rules was that a plan in “critical
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status” had to adopt a rehabilitation plan, which forces the plan sponsor,
employers, and employees to take action to improve the financial outlook of the
fund. 29 U.S.C. § 1085(e). As part of the PPA, Congress amended § 1132 to
include a cause of action for employers in certain scenarios related to these special
funding rules—that amendment created § 1132(a)(10).
This brings us to the first issue on appeal—whether WestRock has a cause of
action under Subsection B of § 1132(a)(10) to challenge the Amendment to the
rehabilitation plan. Subsection B states that a civil action may be brought by an
employer:
[I]f the plan sponsor—
....
(B) fails to update or comply with the terms of the
funding improvement or rehabilitation plan in
accordance with the requirements of [Section
1085] . . .
29 U.S.C. § 1132(a)(10) (emphasis added). 3 The role the above emphasized
phrase—“in accordance with the requirements of [§ 1085]”—plays in Subsection
B is at the heart of this first issue. The emphasized phrase refers to 29 U.S.C.
§ 1085. As mentioned earlier, § 1085 lays out the rules for plans in critical or
endangered status. It is a massive section detailing, among other things, how to
3
WestRock has no cause of action under Subsection A. The provision at issue in this
case is an amendment to a rehabilitation plan, and Subsection A is relevant only when no
rehabilitation plan has been adopted.
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determine if the fund is in critical status or endangered status (§ 1085(b)); the
process for adopting and updating a funding improvement plan for funds in
endangered status (§ 1085(c)); and the process for adopting and updating a
rehabilitation plan for funds in critical status (§ 1085(e)).
WestRock places a lot of importance on the phrase “in accordance.”
WestRock, in light of the “in accordance” language, contends that § 1132(a)(10)
“provides employers with a cause of action to compel critical status
[multiemployer pension] plan sponsors to follow the correct procedure for
adopting rehabilitation plan contribution requirements under [§ 1085], and to
ensure that any updates are in accordance with the requirements of [§ 1085].”
Under this view, an employer can challenge both the substance and procedure of
an amendment under Subsection B. WestRock’s challenge “is based on both the
invalid substance of the Amendment and the faulty procedure through which the
Amendment attempts to impose additional contribution requirements.”
The Board embraces a narrower interpretation of § 1132(a)(10). Under the
Board’s interpretation, Subsection B only permits an employer to bring an action
when the Board fails to update in accordance with the procedural requirements of
§ 1085—specifically, the requirements that the rehabilitation plan must be updated
annually and that the update must be filed with the plan’s annual report. However,
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the “in accordance” language, the Board asserts, does not give an employer the
right to challenge the substance of a provision in a rehabilitation plan.
Ultimately, we do not need to resolve this dispute over what § 1132
authorizes because WestRock failed to allege properly that the Amendment
violates § 1085 in any manner, procedurally or in substance.
WestRock claims that the Amendment violates § 1085 because
(1) “contribution rate schedules must be provided to the bargaining parties” and
(2) “critical status [multiemployer plans] with valid rehabilitation plans may not
unilaterally impose on employers contribution requirements necessary to avoid an
[accumulated funding deficiency].” However, the Amendment does not violate
§ 1085. The procedure WestRock cites to for contribution rate schedules is
inapplicable here; that procedure arises out of § 1085(e)(3)(A)(i), but only
§ 1085(e)(3)(A)(ii) is implicated here. Further, there is no explicit restriction
saying the Board cannot charge withdrawing employers for their share of the
accumulated funding deficiency.
First, WestRock ignores the procedural difference between
§ 1085(e)(3)(A)(i) and (ii). Subsections (i) and (ii) lay out two alternative versions
of rehabilitation plans. See 29 U.S.C. § 1085(e)(3)(A) (separating the two
subsections with an “or”). Section 1085(e)(3)(A)(i) states a rehabilitation plan
“may include reductions in plan expenditures (including plan mergers and
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consolidations), reductions in future benefit accruals or increases in contributions,
if agreed to by the bargaining parties, or any combination of such actions.”
(emphasis added). WestRock believes that the Amendment violated this section by
requiring “additional contributions without subjecting those increases to
negotiation between the bargaining parties.” However, the Amendment was
adopted pursuant to the plan sponsor’s authority to adopt “reasonable measures” as
part of a rehabilitation plan under § 1085(e)(3)(A)(ii). See 29 U.S.C.
§ 1085(e)(3)(A)(ii). The “if agreed to by the bargaining parties” language is not
included in (ii). See Shotz v. City of Plantation, 344 F.3d 1161, 1168 (11th Cir.
2003) (“Where Congress includes particular language in one section of a statute
but omits it in another section of the same Act, it is generally presumed that
Congress acts intentionally and purposely in the disparate inclusion or exclusion.”
(internal quotation marks omitted)). Section 1085(e)(3)(A)(ii) does place
restrictions on a plan sponsors’ ability to adopt reasonable measures. 4 However,
WestRock does not allege that the Board failed to meet any of these requirements.
And WestRock does not cite to anything else in the statute that suggests an
employer has a role to play when the plan sponsor enacts reasonable measures
under § 1085(e)(3)(A)(ii). See Useden v. Acker, 947 F.2d 1563, 1582 (11th Cir.
4
See 29 U.S.C. § 1085(e)(3)(A) (“[I]f clause (ii) applies, [the plan] shall set forth the
alternatives considered, explain why the plan is not reasonably expected to emerge from critical
status by the end of the rehabilitation period, and specify when, if ever, the plan is expected to
emerge from critical status in accordance with the rehabilitation plan.”)
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1991) (“We cannot infer that Congress’s silence is accidental in an area where
Congress has already said so much out loud.”).
In regard to WestRock’s second argument, WestRock has not cited to any
portion of ERISA that explicitly states that a plan sponsor cannot put in place a
system for charging withdrawing employers for their share of the accumulated
funding deficiency. WestRock argues that the Amendment violates § 1082. This
argument is not persuasive. First § 1082 is not § 1085. Second, the Amendment
does not violate § 1082. Normally, when a fund is facing an accumulated funding
deficiency, employers face an automatic payment to compensate for the deficiency.
See 29 U.S.C. § 1082. Section 1082 relieves employers from that payment when a
rehabilitation plan is adopted. 29 U.S.C. § 1082(b)(3). WestRock reads § 1082 as
broadly prohibiting any sort of charge related to an accumulated funding
deficiency for funds in “critical status.” We believe that is an incorrect reading of
§ 1082. Section 1082 relieves an employer from an automatic payment; it does not
go so far as to prohibit a charge based on accumulated funding deficiencies in all
scenarios. See CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1226 (11th
Cir. 2001) (“Where Congress knows how to say something but chooses not to, its
silence is controlling.” (internal quotation marks omitted)). We refuse to read into
§ 1082 such a broad preemption that Congress did not explicitly create. See
Useden, 947 F.2d at 1581 (“ERISA is a comprehensive and reticulated statute
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bearing the marks of circumspect drafters; courts should proceed with
commensurate circumspection . . . .” (internal quotation marks omitted)).
WestRock has not properly alleged that the Amendment violates § 1085 in a
manner sufficient to bring a cause of action under Subsection B of § 1132(a)(10).
B. 29 U.S.C. § 1451(a)
Next we turn to WestRock’s argument that it has a cause of action under 29
U.S.C. § 1451(a). Section 1451(a) authorizes an employer to bring an action when
it “is adversely affected by the act or omission of any party under [Subtitle
E] . . . .” 29 U.S.C. § 1451(a)(1). Subtitle E is titled “Special Provisions for
Multiemployer Plans” and has six parts, one of which governs employer
withdrawals.5 The subsection governing employer withdrawals lays out how to
calculate “withdrawal liability”—the amount a withdrawing employer is charged
for its share of the unfunded vested benefits. See 29 U.S.C. §§ 1381–1405
(governing the calculations for “withdrawal liability”). Unfunded vested benefits
are different than an accumulated funding deficiency, which is what the
Amendment deals with.6
5
The other five parts govern merger or transfer of plan assets or liabilities, insolvent
plans, financial assistance, benefits after termination, and enforcement.
6
“[T]he accumulated funding deficiency of a multiemployer plan for any plan year is
the amount, determined as of the end of the plan year, equal to the excess (if any) of the total
charges to the funding standard account of the plan for all plan years (beginning with the first
plan year for which this part applies to the plan) over the total credits to such account for such
years.” 29 U.S.C.§ 1084(a) (emphasis added). “[T]he term ‘unfunded vested benefits’ means
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WestRock claims that, because Subtitle E governs “withdrawal liability,” it
governs any and all liability that a plan may impose on a withdrawing employer.
Therefore, because the Amendment imposes an additional liability on WestRock if
it withdraws, § 1451(a) provides it with a cause of action to challenge the
Amendment. The Board argues that the Amendment was not an act under Subtitle
E and there is nothing in ERISA supporting WestRock’s contention otherwise.
The text of §1451(a) does not support WestRock’s reading. The text
authorizes an employer to bring an action when it “is adversely affected by the act
or omission of any party under [Subtitle E] . . . .” 29 U.S.C. § 1451(a)(1). In other
words, the employer must be challenging an act or omission under Subtitle E in
order to maintain a cause of action under §1451(a). Here, the Board adopted the
Amendment pursuant to its authority under § 1085(e)(3)(A)(ii), which is under
Subtitle B, not Subtitle E. WestRock counters that “Subtitle E governs any and all
liability that may be imposed on employers upon withdrawal,” and, thus, the
Amendment is an act arising under Subtitle E because it “attempts to impose
additional liability upon an employer’s withdrawal.”
However, WestRock’s own arguments undercut its contention that the
Amendment is an act under Subtitle E. WestRock’s argument is that the
with respect to a plan, an amount equal to—(A) the value of nonforfeitable benefits under the
plan, less (B) the value of the assets of the plan.” 29 U.S.C. § 1393(c) (emphasis added).
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Amendment violates Subtitle E because “the liability established by the
Amendment is not authorized by [29 U.S.C. §§ 1381–1405].” 7 Its argument
distilled is that the Amendment is an act under Subtitle E satisfying § 1451(a), yet
we should strike down the Amendment because it is not authorized by Subtitle E.
It is hard to comprehend how something can simultaneously be an act under a
subtitle and not an act under a subtitle.
Beyond that seeming contradiction, WestRock is attempting to make an
implied preemption argument. It is asking us to recognize that Congress intended
to completely occupy the field regarding payments exacted from withdrawing
employers by spelling out how to calculate a withdrawing employer’s share of the
unfunded vested benefits. Stated another way, no other charges can be levied
against a withdrawing employer because Congress specified how to divvy up a
withdrawing employer’s share of the unfunded vested benefits. Our response to
WestRock’s request is simple—no. As stated earlier, our approach to interpreting
ERISA is measured and restrained. See Gulf Life, 809 F.2d at 1524. (“[C]ivil
actions under ERISA are limited only to those parties and actions Congress
specifically enumerated . . . .” (emphasis added)). There is nothing in the text that
indicates Congress intended for “withdrawal liability” to be the only payments a
withdrawing employer would ever face, and because of the comprehensive nature
7
Sections 1381–1405 are the sections in Subtitle E governing “withdrawal liability.”
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of ERISA, we read the absence of such language as intentional. See Northwest
Airlines, Inc. v. Transport Workers, 451 U.S. 77, 97, 101 S. Ct. 1571, 1583–84
(1981) (“The presumption that a remedy was deliberately omitted from a statute is
strongest when Congress has enacted a comprehensive legislative scheme
including an integrated system of procedures for enforcement.”). Recognizing
such a broad preemption limiting a plan sponsor’s abilities is not explicit in the
text, and we refuse to recognize one implicitly. Transamerica Mortgage Advisors,
Inc. v. Lewis, 444 U.S. 11, 19, 100 S. Ct. 242, 247 (1979) (“[W]here a statute
expressly provides a particular remedy or remedies, a court must be chary of
reading others into it.”).
IV. CONCLUSION
We affirm the district court’s ruling. WestRock has not pleaded the requisite
injuries to satisfy bringing a cause of action under 29 U.S.C. §§ 1132(a)(10) or
1451(a).
AFFIRMED.
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