Appeal from the United States District Court for the District of New Jersey.
Seitz, Chief Judge, Garth and Becker, Circuit Judges.
Plaintiffs appeal the portion of the district court's order granting summary judgment in favor of the defendants on two of the four counts in the plaintiffs' amended complaint.The district court certified that portion of the order as final under Rule 54(b), and we therefore have jurisdiction under 28 U.S.C. § 1291. Defendants cross-appeal the remaining portion of the district court's order denying their summary judgment motions on the remaining two counts and certifying four "controlling questions of law" under 28 U.S.C. § 1292(b). We permitted an appeal from that portion of the order.
The plaintiffs in this action are seven former employees of P. Ballantine & Sons, Inc., a brewery that went bankrupt in 1972. For the purposes of Count I of their amended complaint, the plaintiffs are also the representatives of a class of retired persons who were formerly covered by the New Jersey Brewery Employees' Welfare Trust Fund Agreement (hereafter "the Agreement") and who received hospitalization, medical, and life insurance benefits thereunder.
The defendants fall into three categories. In the first category are four firms (hereafter referred to as "the Employer") that were obligated under the Agreement to fund certain welfare benefits for their employees.These Employers are Anheuser-Busch, Inc., Pabst Brewing Co., Universal Grain Co. of New Jersey, and Farmers Feed Co.*fn1 In the second category is the New Jersey Brewery Employees' Welfare Trust Fund (hereafter referred to as "the Trust Fund"). The third category comprises eight of the trustees of the Trust Fund. These trustees were designated by the Employers, and we will therefore refer to them collectively as the Employer Trustees.
In 1955 the Employers and the Brewery Workers Joint Local Executive Board of New Jersey and certain of its local unions (hereafter "the Union") agreed to create the Trust Fund to finance the purchase of health, life, and disability insurance policies as a fringe benefit for the Employers' workers. Originally the Agreement provided only for coverage of active employees, but the parties amended it in 1956 to include retirees.
The Agreement itself did not create any specific obligation to finance insurance benefits. Instead, it provided that each Employer would contribute the amount set forth in its then-current collective bargaining agreement with the Union, so that the amount of each Employer's contributions could change with successive bargaining agreements. The Agreement provided that if a new bargaining agreement required no contributions, the Employer would cease to be a participant in the Trust Fund and the Employer's workers would no longer be entitled to benefits.
The Agreement provided that the Employers and Union would appoint their own Trustees, and that these Trustees would be required to vote in Employer and Union blocks on matters concerning the Trust Fund. The Trustees had various powers, including the power to interpret the terms of the Agreement; to formulate a "Welfare Plan" establishing the level of employee and retiree benefits; to release, compromise, or settle claims for or against the Trust Fund; and to initiate collection actions against delinquent Employers. The Agreement provided that the Trust Fund would terminate at the end of twenty-one years or upon the withdrawal of all Employers. In either event, the Trustees at the time of termination were to apply the assets of the Trust Fund to pay all of the Fund's obligations and distribute any remaining amounts "in such manner as will, in [the Trustees'] opinion, best effectuate the purposes of the said Trust. . . ."
The collective bargaining agreements covering the period from 1973 through 1976 were the last to require Employer contributions to the Trust Fund. With the exception of Anheuser-Busch's contract, theses bargaining agreements stated that the Employers would contribute $93.77 per month to the Trust Fund for each employee. This amount was calculated on the basis of the Trust Fund's obligation to active employees and retirees.The Anheuser-Busch bargaining agreement did not specify a particular level of contributions, but Anheuser-Busch does not contest the district court's conclusion that it was also obligated to contribute $93.77.
Soon after the signing of these last bargaining agreements, it became apparent that the $93.77 would buy more employee and retiree benefits than were promised in the then-current Welfare Plan. A dispute ensued over the Employers' obligations to the Trust Fund. The Union Trustees argued that the Employers were required to pay the amount specified in the bargaining agreements for each employee, and that the surplus should be used to increase the level of benefits in the Welfare Plan. The Employer Trustees maintained that the Employers were simply required to fund a certain level of benefits and were therefore entitled to a reduction in the level of required monthly contributions and a refund of the excess previously paid (which the Employer Trustees suggested should be applied against outstanding and future Employer obligations to the Trust Fund).
This dispute became serious in 1975, when Blue Cross/Blue Shield returned to the Trust Fund over $475,000 in excess premiums paid during the 1973-74 fiscal year. The Trustees, voting in Employer and Union blocks, deadlocked on the proper use of this refund. By common consent, the Trustees submitted the dispute to an Umpire, who decided in favor of the Employers. Following that decision, counsel for the Trust Fund requested an opinion from the Department of Labor on whether the application of the refund against outstanding and future Employer obligations would violate ERISA. The Department responded that the issue was too complex for issuance of an opinion letter at that time. The Trustees therefore agreed to reduce the Employers' obligations and credit them with the surplus. Later the Trust Fund received a second refund amounting to more than $35,000, and it was handled in a similar fashion.
In 1976 the Employers negotiated new bargaining agreements that did not require contributions to the Trust Fund. The Trustees therefore terminated the Fund and notified the retirees that all benefits under the Fund would cease as of July 1, 1976. The plaintiffs filed this action on May 11, 1977.
The plaintiffs' original complaint named only the Employers and the Trust Fund as defendants and asserted only one cause of action, described below as Count I of the amended complaint. In 1979 the district court certified the plaintiffs as class representatives for the purposes of this claim.
The plaintiffs amended their complaint in 1980 to include the Employer Trustees as defendants and to assert three additional causes of action against various of the defendants. The amended complaint stated generally that the district court had jurisdiction by virtue of sections 301 and 302 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. §§ 185, 186 (1976 & Supp. II 1978), and sections 401 through 406, 409, and 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1101-06, 1109, 1132 (1976 & Supp. IV 1980).
At the direction of the district court, the parties filed motions for summary judgment on all counts. On the basis of affidavits and other supporting materials but without an evidentiary hearing, the district court granted summary judgment for the defendants on Counts I and IV and denied all motions for summary judgment on Counts II and III. The district court certified the rulings on Counts I and IV as final under Rule 54(b), and the plaintiffs filed a timely notice of appeal from that portion of the district court's order. The district court also certified four questions ...