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WestRock RKT Co. v. Pace Industry Union- Management Pension Fund

United States Court of Appeals, Eleventh Circuit

May 16, 2017

WESTROCK RKT COMPANY, Plaintiff - Appellant,
v.
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 D.C. Docket No. 1:15-cv-03505-CC

          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 "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.

         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 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 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 ...


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