Plaintiff's tenure with the jewelry department obviously fulfills the minimum age and service requirements of § 1052(a) in that she was over 21 and had completed one year of service when AM&A established its plan. As a participant in the plan, plaintiff was owed a duty by its administrator to provide her with a copy of the AM&A Pension Plan Summary Plan Description, which would have alerted her to the fact that her participation in the plan was dependent upon Tegler's acceptance on behalf of the department. By defendant's own admission, this was never done, thus depriving plaintiff of notice regarding her rights under the terms of the plan.
The decision of the Second Circuit in Laniok illustrates the extent of an eligible employee's rights with regards to an employer funded pension plan. Unlike the plaintiff in Laniok, plaintiff here was not given the option of "knowingly and voluntarily" waiving her right to participate in the plan. AM&A's decision to allow Tegler to accept or reject plan participation on behalf of employees of the jewelry department negated any options which those employees were entitled to under ERISA. Thus, the facts presented clearly show that plaintiff was denied her right to participate in the plan as a result of AM&A's policies regarding lease department employees.
Under § 1052(a), Tegler's decision to adopt or reject the plan on behalf of the jewelry department employees is irrelevant to affect their status as participants. AM&A and the AM&A Pension Plan do not legally possess the discretion, as plan administrators and fiduciaries, to condition participant status on the decision of the department head alone.
Plaintiff's argument that Regulation § 1.410(b) - 4 conclusively demonstrates that the AM&A Pension Plan contains a discriminatory classification is incomplete on its face. Plaintiff fails to supply the necessary data for making such a determination under § 1.410(b) - 4. Strictly speaking, even a convincing demonstration that defendants' system was a discriminatory classification under § 410(b) would only show that this was not a qualified tax plan.
However, this Court cannot ignore the authority of guidelines and regulations developed by the Treasury Department in interpreting provisions of ERISA. It is apparent from cases like Crouch that these regulations are not to be implemented only for the narrow purpose of determining tax qualification. They are useful for extracting subtler shades of meaning necessary to paint a more detailed portrait of an individual's substantive rights under ERISA.
For these reasons, it is evident that the plaintiff has demonstrated that she is entitled to pension benefits under ERISA.
IV. Standard of Review of Committee Determination
This Court has the authority to review the decision of the AM&A Pension Plan Committee (the "Committee") under a de novo standard where no discretionary authority has been delegated to the administrator or fiduciary under the plan. Firestone Tire & Rubber Co. v. Bruch, 109 S. Ct. at 953. Where discretionary authority has been allocated, the court is limited to scrutinizing the decision for evidence of abuse of that discretion.
However, the court must utilize a de novo review in situations where, as here, the determination made turns on a question of law. A district court may not decide whether a fiduciary's decision is arbitrary and capricious unless it first determines "what the 'legally' correct interpretation of the plan should be." Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir. 1982). In Weil v. Retirement Plan Admin. Comm. of the Terson Co., 913 F.2d 1045, 1049 (2d Cir. 1990), aff'd in part and rev'd on other grounds, 933 F.2d 106 (2d Cir. 1991), the court examined a question involving the ability of plan fiduciaries to interpret plan provisions denying eligibility, in light of conflicting IRC sections. They ruled that "here, it is undisputed that the Plan gave the Committee discretionary authority to determine eligibility for benefits and to interpret the Plan. . . . Nonetheless, the Committee's decision to deny benefits to plaintiffs was unique in that it turned on a question of law. . . . When an eligibility determination by plan administrators turns on a question of law, courts have not hesitated to apply a de novo standard of review." Weil, 913 F.2d at 1049, (citing Sage v. Automation, Inc. Pension Plan and Trust, 845 F.2d 885, 890 (10th Cir. 1988)); See also, Bruch v. Firestone Tire and Rubber Co., 828 F.2d 134, 148-49 (3rd Cir. 1987) aff'd in part and rev'd in part on other grounds, 489 U.S. 101, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989).
As shown above, the committee's decision in the present case is based on a provision of the plan which is erroneous on a question of law. For that reason, this Court is empowered to conduct a de novo review of the plan itself to excise the offending article, and thus, has done so.
V. Plaintiff's Motion for Attorney's Fees and Costs
Under 29 U.S.C. § 1132(g)(1), a district court is given the discretionary authority to award attorney's fees to either party when the situation calls for it. The test for when such an award is warranted is laid out in Ford v. New York Central Teamsters Pension Fund, 506 F. Supp. 180, 183 (W.D.N.Y. 1980), aff'd, 642 F.2d 664 (2d Cir. 1981).
While it appears plausible under the test enunciated in Ford to award attorney's fees in this case, I nevertheless decline to do so. Such an award is less appropriate where, as here, the losing party has presented a meritorious, albeit unsuccessful, argument in support of its position. For similar reasons, I conclude that an award of court costs also is not warranted in this instance.
It is the conclusion of this Court that plaintiff has presented evidence sufficient to warrant a finding that she was an employee of the defendant AM&A department store and participant in the pension plan, and thus, is entitled to benefits under 29 USC § 1132(e).
IT HEREBY IS ORDERED, that defendants' motion for summary judgment is DENIED.
FURTHER, that plaintiff's cross motion for summary judgment is GRANTED.
FURTHER, that plaintiff's motion for attorney's fees and court costs is denied.
FINALLY, that the parties shall appear before this Court on Wednesday, December 2, 1992 at 9:00 a.m. in Part IV, Mahoney State Office Building, 65 Court Street, Buffalo, New York for a status conference on the issue of benefit amount.
Dated: November 11, 1992
Buffalo, New York
WILLIAM M. SKRETNY
United States District Judge