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MCCOY v. BOARD OF TRUSTEES OF THE LABORERS' INTERNATIONAL UNION
February 26, 2002
WILLIE J. MCCOY, PLAINTIFF,
BOARD OF TRUSTEES OF THE LABORERS' INTERNATIONAL UNION, LOCAL NO. 222 PENSION PLAN; LABORERS' INTERNATIONAL UNION, LOCAL NO. 222 PENSION PLAN; LABORERS' INTERNATIONAL UNION, LOCAL NO. 222; EDWARD HARRIS; OLIVER G. GLASS; NEW JERSEY BUILDING LABORERS STATEWIDE PENSION FUND; X, Y, Z CORPORATIONS (1-10); A, B, C PLAN SPONSORS OR ADMINISTRATORS (1-10), DEFENDANTS.
The opinion of the court was delivered by: Stephen M. Orlofsky, United States District Judge
A good actor, it is often said, must have good timing. If this case is
any indication, the Defendants, a Pension Benefit Plan and its Trustees,
are bad actors. By raising the Plaintiff's alleged failure to exhaust
his administrative remedies under the Plan for the first time in their
Cross-Motion for Summary Judgment, the Defendants force me to determine
whether or not exhaustion is a non-waivable jurisdictional requirement
under ERISA. Since I find that it is not, I am also obliged to consider
under what circumstances a Plaintiff may be prejudiced by a Plan's undue
delay in raising an exhaustion defense.
Nor is that the only timing issue in this case. Invoking a provision
that had been superseded eleven months before the Plaintiff filed his
claim for benefits, the Trustees denied the Plaintiff benefits to which
he believed he was due under the Plan. Although this Court is bound to
respect the judgments of such trustees, who after all are presumptively
expert within their field, that deference has its limits. In this case,
the Trustees inexplicably disregarded a text that was clear both
semantically and in a larger policy context. Thus, I will order the
Defendants to make good the obligations they owe to the Plaintiff under
their Plan. Finally, finding that the Trustees appear to have simply
lost track of the time in which they must revise certain Plan materials,
I shall also compel the Defendants to discharge their statutory
obligation to provide full disclosure to all of their beneficiaries.
Therefore, for the reasons set forth in more detail below, I will grant
in part and deny in part the Plaintiff's Motion for Summary Judgment. I
will also grant in part and deny in part the Defendants' Cross-Motion for
Summary Judgment, principally because the Plaintiff's claims for breach
of fiduciary duty are largely already encompassed or effectively mooted
by the other relief I grant him.
FACTS AND PROCEDURAL HISTORY
The Defendants, Laborers' International Union, Local No. 222 Pension
Plan ("the Local Plan" or "the Plan"), and New Jersey Building Laborers
Statewide Pension Fund ("the State Plan") are employee benefit plans
organized under the Employee Retirement Income Security Act,
29 U.S.C. § 1001-1461 (2000) ("ERISA"). Until its merger into the
State Plan in 2001, the Local Plan was administered by the Defendant,
Board of Trustees of the Laborers' International Union, Local No. 222
Pension Plan ("the Trustees"). Defendants Edward Harris and Oliver G.
Glass were individual members of the Board of Trustees. Obviously, most
participants in the Local Plan were members of the Defendant Union, the
Laborers' International Union, Local No. 222 ("the Union").
Willie McCoy ("McCoy") has been a member of the Union and a participant
in the various Plans since 1981. McCoy's principal work during this time
has been as a laborer in the construction trade. In January of 1995,
McCoy suffered a back injury that, he claims, left him unable to perform
his duties as a laborer. McCoy continued to attempt to work periodically
over the next three years, although he never worked more than 100 hours
in any given year.
McCoy filed an application for disability retirement benefits under the
Local Plan on December 18, 1998. Id. Exh. O. Under a provision of the
Plan then in effect, applicants could demonstrate disability by proof
that they had been awarded a disability benefit by the Social Security
Administration. Id. Exh. G § 4.3(a)(3). If the applicant was
otherwise qualified, his Disability Retirement Benefit would "begin as of
the first day that he is eligible to receive a disability benefit under
the Social Security Act." Id. § 4.3(a). In McCoy's case that date
would have been July of 1995, as determined by the Social Security
Administration. Id. Exh. N.
Although McCoy's application for Disability Retirement Benefits was
approved, the Plan determined that he would receive benefits beginning
January 1, 1999, rather than retroactive to July, 1995. Id. Exh. O.
McCoy's benefits were set at $1,093.36 per month. Id.
Benefits under the plan are largely dependent on the amount of "Credit
Years" an employee has accumulated. Employees get credit for a full year
of service for any calendar year in which they work 1,000 or more hours.
Employees who work a smaller amount of hours receive proportionately less
credit, although below a certain threshold no credit at all is given.
McCoy had a total of 13 years and eight months of "Credit Years" at the
time of his disability. Id. The year in which credit was accumulated is
relevant under the plan for participants who became "eligible" for
benefits prior to 1997. For example, beneficiaries who became eligible
during 1995 receive each month a total benefit of $60 times the number of
pre-1986 credit years, plus $75 times the number of post-1986 credit
years. The Plan calculated McCoy's benefit as if he became eligible in
1997, and accordingly awarded him a flat $80 times his total credit
years. Id. The Plan notified McCoy of its determinations by letter
dated March 4, 1998. Defs.' Br. Exh. D.
In March of 1998, McCoy wrote to the Plan Administrator seeking
additional information on how his benefits were calculated, as well as a
variety of general information about the Plan, such as the identity of
its Trustees and its procedures for receiving legal process. Hildebrand
Decl. Exh. Q. McCoy also spoke in person with the Plan Administrator,
telling her that he was dissatisfied with the Plan's determination. Id.
Exh. Y at 73. On April 13, 1998, the Plan Administrator wrote to McCoy to
inform him that the Plan would treat his letter as a request to appeal
its decision. Id. Exh. R. McCoy responded in writing two days later by
asking that the Plan provide an explanation for why it had denied him the
benefits he had requested. Id. Exh. S. There is no evidence in the
summary judgment record that he received any explanation prior to April
At a May 12, 1999 meeting, the Trustees voted unanimously to deny
McCoy's appeal. Defs.' Br. Exh. H. The summary judgment record does not
indicate whether or not McCoy was advised of this decision. McCoy,
however, was invited to attend a subsequent meeting of the Trustees on
November 18, 1999, where he was permitted to present his case. Id. Exh.
I. The Trustees referred McCoy's claim to their counsel for a
At some point between January and April of 2000, McCoy learned that his
appeal had been denied. See id. Exh. M. On or about April 17, 2000,
counsel for the Plan sent a letter to McCoy confirming in writing that
McCoy's appeal had been denied. Id. The denial letter explained:
The basis for the denial was that the plan of benefits
provides for the payment of a disability pension the
month following the date the application is completed
and filed if that is later than six months following
the date of disability. Your application for
disability pension benefits was filed with the Pension
Fund in December of 1998. You were found disabled by
the Social Security Administration as of 1995. As a
result, you were placed in payment status the month
following the date of your application, which was
January of 1999. Accordingly, since your application
was processed in accordance with the plan of
benefits, your claim appeal has been denied by the
Id. The denial letter did not refer to the amended language of the Plan
§ 4.3(a). The letter also made no mention of McCoy's options ...
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