The opinion of the court was delivered by: CARTER
In this action, Arthur M. Chambless ("plaintiff"), a veteran seaman, and his wife, Mildred H. Chambless, allege, inter alia, that his pension benefits have been improperly forfeited, that the trustees of his pension plan violated their fiduciary duties, and that his former union and former employers violated the antitrust laws by conspiring to deter him from working on vessels owned by competing shipping companies and represented by a rival union. Chambless and his wife seek restitution of the allegedly forfeited pension benefits, treble antitrust damages, and a clarification of their pension rights.
Chambless, a licensed deck officer, began sailing as a member of the International Organization of Masters, Mates & Pilots ("MM&P") on October 27, 1944. Chambless Aff. para. 2; Maher Aff. para. 4. Often serving as chief mate, Chambless continued working on vessels represented by the MM&P until December, 1976, when he submitted his first application to the MM&P Pension Plan ("the pension plan" or "the plan"). Complaint para. 2; Chambless Aff. paras. 16-17; Maher Aff. para. 5.
The plan is a multi-employer pension plan that was established by an Agreement and Declaration of Trust dated August 1, 1955, in order to provide pension benefits to licensed deck officers working for companies that have collective bargaining agreements with the MM&P. Maher Aff. paras. 2-3. The plan is funded solely by employer contributions and is administered by an equal number of employer and union designated trustees. Id. P 2.
Chambless withdrew this pension application, however, because his "love for the sea" continued to beckon. Complaint para. 18; Exh. 4 to Maher Aff. He maintains that he submitted his initial pension application only after what he terms illicit union pressures compelled him to consider retiring. Complaint para. 17.
First, Chambless alleges that the MM&P maintains a policy of strongly encouraging -- Chambless would say strong-arming -- its older, more experienced members to retire so that the union can replace them with "new young blood" and thereby obtain more union dues. Id. P 15; Chambless Aff. paras. 6-7. He maintains that the union wrongfully assigned senior positions to officers more junior than he, failed to pursue his grievances on these matters, and, beginning in 1976, offered him less prestigious, lower paying work as a first, second, or even third mate. Chambless Aff. paras. 4-6, 10-11. Chambless asserts that being assigned to work as a third mate was of "great humiliation for a licensed deck officer of my years of experience" and says that such assignments caused him to consider retiring. Id. P 11.
Second, Chambless maintains that the union sought to usher him into retirement because he "knew too much" about, inter alia, favoritism and discrimination in work assignments and grievance processing, self-dealing by union officials with local funds, improper recordkeeping, and efforts to harass and intimidate certain employees into retiring. Complaint para. 14. Both the union and the plan deny Chambless' allegations about favoritism, discrimination, intimidation, and pressures placed on older members. Answer of MM&P paras. 14-16; Answer of Pension Plan paras. 15-16.
In early 1977, disgruntled with the low-level, low-paying assignments that the MM&P hiring hall had given him, Chambless took a two-week assignment as master on an oil-drilling rig that did not have a contract with the MM&P. Chambless Aff. para. 12. He said that he did this only after he had asked a union agent at the hiring hall whether it would be all right for him to take such a job and only after the union agent told him that the union would have no objection. Id.; Complaint P 21. When Chambless returned to shore after his fortnight on the rig, he was informed that because he had worked on a non-MM&P rig, he was no longer in good standing with the union. This was so, Chambless maintains, even though many other union members who worked on non-MM&P vessels were not so tarred. Chambless Aff. para. 13.
Disgruntled, Chambless then, to use his words, "retired from employment under the MM&P contract and filed [his second] application for pension benefits." Id. P 14. At about the same time, Chambless accepted employment as a master on the Mount Explorer, an ocean-going vessel that was operated by a company that had a collective bargaining agreement with a rival union, the Marine Engineers Beneficial Association ("MEBA"). Id. P 15. The two unions representing licensed deck officers -- MM&P and MEBA -- have been in intense competition for at least two decades, see MM&P v. NLRB (Westchester Marine Shipping Co.), 539 F.2d 554, 556-57 (5th Cir. 1976), cert. denied, 434 U.S. 828, 98 S. Ct. 106, 54 L. Ed. 2d 86 (1977), and the Mount Explorer on which Chambless sailed has been the focus of a picketing dispute and unfair labor practice lawsuit between the two labor organizations. See MM&P v. NLRB (Cove Tankers Corp.), 188 U.S. App. D.C. 15, 575 F.2d 896 (D.C. Cir. 1978).
Chambless submitted his second pension application on or about April 2, 1977. Chambless Aff. para. 14; Maher Aff. para. 6; Exh. 5 to Maher Aff. Six days later, Stephen P. Maher, the administrator of the plan, wrote Chambless, as he had done after Chambless had submitted his first application, to acknowledge receipt of Chambless' application and to advise him of the plan's definition of retirement.
Maher Aff. paras. 5-6; Exh. 6 to Maher Aff. On June 30, 1977, a plan employee wrote Chambless to inform him that the trustees would consider his application, and that his monthly benefits would be approximately $920 on a percentage basis and $570 on a flat basis.
Exh. 8 to Complaint.
On July 19, 1977, Maher wrote Chambless to inquire whether Chambless had, as was rumored, taken a job on a non-MM&P vessel. Exh. 9 to Maher Aff. In November, 1977, the plan received a letter from Chambless acknowledging that he had taken such employment beginning April 4, 1977. Exh. 8 to Maher Aff.
At their November 30, 1977 meeting, the pension trustees considered Chambless' application, Maher Aff. para. 13, and on January 26, 1978, Maher wrote to Chambless to inform him that the plan's trustees had concluded that because he had not retired under the plan's definition of retirement, he was not eligible for a pension at the time. Exh. C to Complaint. Furthermore, Maher informed Chambless that the plan would not pay him any pension until he reached the age of 65, which the plan defines as "normal retirement age."
Id. ; Article I, Section 13 of the plan regulations. Chambless will not turn 65 until December 7, 1986. Complaint para. 10. In a January 28, 1980 letter, Maher advised Chambless that the monthly pension benefits he is to receive upon turning 65 will likely be $470. Exh. C to Complaint.
In deciding that Chambless would not receive pension benefits until he turns 65, the trustees acted pursuant to Article II-A, Section 15(a)
and Amendments 46 and 47 to the plan regulations. The amendments were passed on August 26, 1976, and were encoded in Article II-A, Section 15(b) and Article II-A, Section 20.
Article II-A, Section 15(b) states in pertinent part:
If a Pensioner works in covered employment forbidden by this Section,
1. He shall not be entitled to pension benefits for any month of such employment and for six additional months, provided that the additional six month period shall not extend beyond his Normal Retirement Age, as defined in Article I, Section 13; provided further, however, that if such employment is in the capacity of a Licensed Deck Officer on a U.S. flag ocean-going vessel employed by a company which is not a participant in the MM&P Pension Plan or the MM&P/PMA Pension Plan . . ., then the Pensioner shall not be entitled to pension benefits for any month of such employment nor for any months prior to such Pensioner reaching his Normal Retirement Age, as defined in Article I, Section 13.
Echoing the above quoted provision, Article II-A Section 20 states in pertinent part:
In the event a Participant subsequent to his accrual of credit for 10 years of vesting service and prior to his retirement, is employed in the capacity of a Licensed Deck Officer on a U.S. flag ocean-going vessel employed by a company which is not a Participant in the MM&P Pension Plan or the MM&P/PMA Pension Plan . . ., such Participant shall not be entitled to any pension benefits prior to his reaching his Normal Retirement Age, as defined in Article I, Section 13.
Chambless appealed the trustees' rejection of his application and appeared with counsel at the December 5, 1979 trustees' meeting. Maher. Aff. para. 10. On March 5, 1980, the trustees again voted to deny Chambless' pension benefits until he turns 65. Id.
On June 24, 1980, Chambless brought this suit against the pension plan, Stephen Maher, the plan administrator, the MM&P, the plan's employer and union trustees,
the Maritime Services Committee and the American Maritime Association, employer organizations that do collective bargaining for shipping companies, and six shipping companies that formerly employed Chambless, have contracts with the MM&P and contribute to the MM&P plan: Amerada Hess Corporation, Amoco Shipping Company, Central Gulf Lines, Inc., National Transport Corporation, Wabash Transport, Inc., and Waterman Steamship Corporation.
Chambless has alleged several wide-ranging claims against these defendants, although it is often unclear which claims are directed against which defendants. The legal theories behind his claims are often obfuscated and occasionally overlapping, but the basic claim, and it appears in several different guises, is that the union and plan discriminated against him and caused his pension benefits to be suspended and forfeited because he went to work on a vessel operated by a competing company and represented by a rival union.
In his first cause of action, Chambless asserts that the defendants violated the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA" or "the Act"), by suspending payment of his vested pension after he went to work on a non-MM&P vessel.
Complaint para. 28. In a related, if somewhat overlapping claim, he asserts that even if a plan has the right to suspend pension payments when a retiree returns to work, it does not have the right to continue suspending those benefits after the plan participant goes back into retirement. In addition, Chambless says that the plan regulations are causing a forfeiture of his benefits by reducing them from an estimated $920 a month beginning at age 55 to an estimated $470 a month beginning at age 65. Chambless Aff. para. 25. The plan contends, however, that its regulations do not provide for any illegal forfeiture and that its trustees acted within the letter of the law in suspending Chambless' benefits until he turns age 65. Maher Aff. para. 11.
Chambless also contends that Amendments 46 and 47, by discriminating against plan participants who work on non-MM&P vessels, are "punitive in purpose and effect" and "arbitrary and capricious" and therefore violate the trustees' fiduciary duties. Complaint paras. 28, 29, 33. He also argues that the age that the plan selected for normal retirement age is a "sham" that was chosen to make it easier for the plan and union to discriminate against disfavored members. Id. P 28(a). Chambless accuses the defendants of further violating their fiduciary duties by passing regulations that allegedly are not for the sole benefit of plan participants and their beneficiaries, by failing to provide a full and fair review of his pension application, and by failing to provide him with certain information that he had requested. In a related claim, Chambless' fifth cause of action charges -- evidently alluding to language in the plan documents which states that the trustees must act solely in the interest of the plan participants -- that the defendants breached his contractual rights in violation of 29 U.S.C. § 185.
Id. P 42.
In addition, Chambless maintains that at no time before he took employment on a non-MM&P vessel did the plan or union notify him of the import of newly enacted Amendments 46 and 47 for participants who take non-MM&P employment. Complaint para. 29; Chambless Aff. paras. 29-31, Exh. 10 to Maher Aff.
The plan responds that all MM&P members were notified of the new rules through The Master, Mate & Pilot, the union newspaper, and that Chambless was specifically notified by letter. Maher Aff. para. 7; Exh. 8 to Maher Aff.
In his second cause of action, Chambless charges that defendants combined and conspired in restraint of trade by "interfer[ing] with the right of licensed deck officers to engage in their trade or profession."
Id. P 35. He sees Amendments 46 and 47 as the chief instruments of these efforts. The plan and union deny that the purpose of the disputed amendments was to restrain trade. Answer of MM&P para. 32; Answer of Pension Plan para. 32. Defendants say that the plan's regulations have always required that benefits be suspended when plan participants work in "prohibited" employment and argue that Amendments 46 and 47 aim to "preserve and enhance the corpus of the MM&P plan." Lowen Aff. para. 7.
Chambless' third cause of action alleges that defendants, because of the assurances they allegedly gave him about accepting employment on non-MM&P vessels "are estopped from denying" him benefits.
Id. P 38. In his fourth cause of action, Chambless asserts that the MM&P has breached its duty of fair representation by discriminating against senior seamen like himself and by failing to pursue several of his grievances.
Id. P 40. Defendants deny both the estoppel claim, Answer of Pension Plan para. 38, and the duty of fair representation claim. Answer of MM&P para. 40.
Plaintiff prays for the payment of his pension benefits retroactive to May 1, 1977, damages of $100 per day for the defendants' failure to furnish him with certain pension information, treble antitrust damages for alleged lost earnings and pension benefits, and a declaration that the defendants' acts are unlawful and null and void under the antitrust laws. Chambless also seeks punitive damages, costs, and attorneys' fees.
The pension plan, the plan trustees and Maher, the plan administrator, and MM&P move for summary judgment on the grounds that 1) the actions taken by the plan trustees are in accordance with the plan regulations and such regulations comply with ERISA and are not arbitrary or capricious or effectuated in bad faith; 2) plaintiff's claims for a declaration of the amount of benefits Chambless will receive at age 65 and a declaration of his wife's rights are not ripe for adjudication; 3) the plan cannot be estopped from acting on the basis of statements allegedly made by employees of the union; 4) the plan's regulations are exempt from antitrust scrutiny by virtue of the non-statutory labor exemption; 5) Chambless has not alleged that he has suffered any antitrust injury, and 6) Chambless received or had access to all the documents that ERISA requires the plan to supply.
The shipping companies and employers' associations have also moved for summary judgment, asserting that they are not fiduciaries of the plan and cannot be held liable as such and that ERISA requires the plan administrator, not them, to supply certain information. As for the antitrust claims, they argue that they are protected by the non-statutory labor exemption and that plaintiff has suffered no antitrust injury.
Chambless has cross-moved to strike the affidavits of Maher, the plan administrator, and of Robert J. Lowen, the International President of the MM&P. Chambless asserts that the affidavits should be stricken because they contain assertions and legal conclusions about which the affiants allegedly have no personal knowledge.
Ripeness of ERISA Claims -- Defendants contend that Chambless' ERISA claims should be dismissed for lack of ripeness because Chambless has not alleged that he plans to retire in the immediate future and because he is merely seeking a declaratory judgment regarding what amount he will receive at age 65. Defendants maintain that even if the court were to conclude that there is a dispute over an issue of material fact regarding whether the plan has the right to continue suspending Chambless' benefits should he retire before age 65, that issue would not be ripe on the ground that there is no likelihood that Chambless will soon retire.
Similarly, defendants argue that Mrs. Chambless' claim is not ripe because she is seeking merely a declaration of her rights to survivor benefits should her husband die before age 65 -- an eventuality that they assert is hypothetical and remote. In short, they contend that neither Chambless nor his wife suffers any present harm from the plan's regulations. Lastly, they argue that certain events may occur before Chambless turns 65 -- changes in federal statutes or regulations or changes in the plan regulations or the trustees' interpretation of those regulations -- and that these events may significantly alter the inquiry or render it moot.
Chambless responds that this suit does not seek a declaratory judgment, but instead seeks an order overturning certain plan regulations and awarding him benefits at once. He contends that the plan trustees acted arbitrarily and capriciously in suspending his benefits, that the classifications in the regulations are illegal, and that the "normal retirement age" that the trustees selected, i.e., age 65, is a "sham."
In their ripeness arguments, both sides have distorted what Chambless' often unclear complaint says. What is clear, however, is that Chambless and his wife seek a declaration or clarification of their rights, assert that they suffer present harm due to the suspension of Chambless' retirement benefits, and seek damages under ERISA for the defendants' alleged past wrongs.
The jurisdictional section of ERISA states:
A civil action may be brought --
(1) by a participant or beneficiary --
(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provision of this subchapter or the terms of the plan . . . .
29 U.S.C. § 1132(a) (emphasis added).
Here, the Chamblesses seek not only a clarification of their rights to future benefits but also to "enjoin" a "practice" that allegedly "violates" ERISA. 29 U.S.C. § 1132(a)(3).
The Seventh Circuit addressed many of the ripeness questions raised here in an ERISA case brought by a class of pension plan participants, none of whom had reached the age of 65 or had yet applied for a pension, for a declaration or clarification of their rights after the plan had raised the normal retirement age from 57 to 65. In words that might have been written for the case at bar, the Seventh Circuit stated:
We reject the trustees' contention that this is a "battle of hypotheticals, a classic example of the difficulty of deciding a case concerning a complex technical subject without the benefit of specific facts." . . . [Plaintiff] seeks a determination of the nature and scope of the Plan participants' rights to future benefits. Section 1132 provides that a civil action may be brought "by a participant to clarify his rights to future benefits under the terms of the plan . . . ." 29 U.S.C. § 1132. This action is precisely the type of action contemplated by the statute.
Janowski v. International Brotherhood of Teamsters, 673 F.2d 931, 935 (7th Cir. 1982) (emphasis added), vacated on other grounds and remanded for reconsideration of attorneys' fees, 51 U.S.L.W. 3937 (June 28, 1983).
Chambless' suit to find out whether the plan has the right to suspend his benefits when he took non-MM&P employment and whether he has a right to obtain benefits before age 65 should he retire before that age "is precisely the type of action contemplated by the statute." Id. The same is true regarding Mrs. Chambless' effort to obtain a clarification of what her rights are should her husband die before the age of 65.
In arguing that the claims of Chambless and his wife are not ripe, defendants rely on two pre-ERISA cases. In Lugo v. Employees Retirement Fund, 529 F.2d 251 (2d Cir.), cert. denied, 429 U.S. 826, 50 L. Ed. 2d 88, 97 S. Ct. 81 (1976), plaintiff challenged a pension plan rule that denied benefits to participants who did not work a total of 90 months during the ten years before they applied for a pension. Lugo was 53 at the time he brought suit, and under the pension plan rules could not receive benefits until he turned 60. The court concluded that Lugo's lawsuit was not ripe since Lugo had to wait seven years before becoming eligible for a pension, because it was very possible that he would accumulate 90 months of work in his last ten years, and because he did not allege "present objective harm" or the "threat of specific future harm" as a result of the challenged rule. Id. at 258, quoting Lecci v. Cahn, 493 F.2d 826, 829 (2d Cir. 1974). The court wrote, however, that had Lugo attacked the validity of the rule requiring that participants be at least age 60 to obtain benefits and had he asserted that he was thus presently entitled to a pension, he would have stated a ripe claim. Id. at 257-58.
The instant case is distinguishable from Lugo on several grounds. First, whereas Lugo did not attack the age 60 rule and assert that he deserved a pension at the present time, id., Chambless attacks the age 65 normal retirement age of the MM&P plan as illegal, a sham, and an improper bar to his receiving benefits at the present time. Second, the Lugo court deemed it wise to hold off adjudicating on the merits because ERISA was soon to take effect and "the impact of ERISA prior to the time Lugo reaches age 60 will undoubtedly be considerable." Id. at 259. That reason for not addressing the merits is absent here. Third, while Lugo brought his case under § 302(c)(5) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 186(c)(5), Chambless has brought his case under ERISA, which in its language allowing plan participants and beneficiaries to sue for a clarification of their rights has liberalized ripeness requirements. See Janowski, supra, 673 F.2d at 935.
Defendants also rely on Stewart v. MM&P Pension Plan, 608 F.2d 776 (9th Cir. 1979), which, like Lugo, was brought under the LMRA, rather than ERISA. Stewart challenged a plan regulation that did not give additional years of pension credit to plan participants who, after having accumulated 20 years of pension credit and after having retired, went back to work. His lawsuit was a declaratory judgment action. Id. at 782. Stating that the plaintiff was not "in fact subjected to or imminently threatened with substantial injury," id, at 783, and that the plaintiff "did not aver that he wanted to retire or would retire," id. at 784, the court held that Stewart's action was not ripe.
The instant case is distinguishable from Stewart in several ways. Stewart was not brought under ERISA and therefore ERISA's more generous ripeness criteria regarding the clarification of rights were not in effect. Second, while the plaintiff in Stewart did not aver that he was suffering present harm, Chambless has alleged that because his pension has been suspended he is suffering present harm from the rules that he is challenging.
For the above reasons, the ERISA claims brought by Chambless and his wife are ripe for adjudication.
The Validity of Amendments 46 and 47 under Section 203 and the Federal Regulations -- Amendments 46 and 47 provide that a plan participant who leaves retirement and goes to work on an MM&P vessel is to have his pension benefits suspended for the time he is working plus six additional months after he ends his re-employment. These amendments also provide that participants who leave retirement to work on non-MM&P boats are to have their pension benefits suspended until they reach normal retirement age -- which is 65 under the plan -- even if they re-retire well before age 65. (Indeed, under these amendments, any participant with more than ten years' experience who goes to work on a non-MM&P boat is not to receive any benefits until he turns 65.) ERISA requires that participants receive their pension benefits once they reach normal retirement age, so long as they do not continue working in the same industry, trade, and geographical area. 29 U.S.C. § 1053(a)(3)(B)(ii).
Although the gravamen of Chambless' claims here is not pellucid, he appears to claim that the plan's refusal to pay him benefits until he reaches age 65, pursuant to Amendments 46 and 47, is a suspension proscribed by section 203(a) of ERISA, 29 U.S.C. § 1053(a), and by the regulations that the Department of Labor ("DOL") has issued under ERISA. Chambless argues that under section 203(a) and 29 C.F.R. § 2530.203-3(b)(2) (1982),
a plan may suspend a retiree's benefits only during the period he is re-employed and then only if the re-employment is in the same industry, trade and geographical area. Chambless maintains that the plan's suspension of his benefits is illegal, first, on the ground that he is not working in the same geographical area and, second, on the ground that should he re-retire before turning 65, the suspension would continue beyond the period of his re-employment.
The plan counters, however, that section 203(a) of ERISA, 29 U.S.C. § 1053(a), "does not restrict in any way" the suspension of a plan participant's benefits before he reaches normal retirement age and that because Chambless has not reached ...