ERISA-Eighth Circuit Rules That Plaintiffs’ Claims Under ERISA To Prevent The Plan From Decreasing and Recouping Excess Benefit Payments Fail

In Pilger v. Sweeney, No. 12-2698 (8th Cir. 2013), the plaintiffs are 13 retired union plumbers who were members of the former Iowa Local 212 (the Plaintiffs”). The Plaintiffs receive retirement benefits from the Plumbers and Pipefitters National Pension Fund (“PPNPF”). The defendants are the PPNPF, the PPNPF’s Board of Trustees, and the Board’s Administrator (collectively, the “Defendants”).

In 2009, the Defendants realized that, for a number of years, they had paid the Plaintiffs excess retirement benefits. The Defendants reduced the Plaintiffs’ monthly benefit payments to the correct amounts, and then began to recoup the previous overpayments through withholding. The Plaintiffs filed this lawsuit under ERISA to challenge the Defendants’ actions. The district court granted the Defendants summary judgment. The Plaintiffs appeal.

In analyzing the case, the Eighth Circuit Court of Appeals (the “Court”) said that the Plaintiffs allege several ERISA claims. The first claim seeks to recover benefits, under 29 U.S.C. § 1132(a)(1)(B), based on higher contribution rates than the Defendants were using. The Court ruled that this claim is time-barred. ERISA does not contain its own statute of limitations for a § 1132(a)(1)(B) claim, and thus it borrows the limitations period of the most analogous state-law claim. In this case, that period is Iowa’s 10-year statute of limitations for breach of contract. Here, the Defendants denied the Plaintiffs’ appeal of the decision underlying the claim on July 14, 2000, and the Plaintiffs did not file the instant lawsuit until February 15, 2011, more than ten years later. Thus, the time-bar.

Next, the Court said that the Plaintiffs’ second claim also fails, but for a different reason. The Plaintiffs argue that the Defendants had no authority to either correct or recoup the benefit overpayments, because the PPNPF plan booklet did not grant them this authority. However, the Court found that a 2002 plan booklet contains broad language granting the Defendants discretion to take remedial action on behalf of the PPNPF. Therefore, the Court ruled that under the plan’s terms, the Defendants were entitled to both correct and recoup the overpayments. Thus, the claim failure.

The Court then continued by saying that the Plaintiffs’ next claim is for breach of fiduciary duty, under 29 U.S.C. § 1132(a)(2), on the grounds that the Defendants failed to apply to correct hour rate to determine past service, miscalculating Plaintiffs’ benefits, and then recouped the overpayments from Plaintiffs. However, the Court found that this is a claim for individual benefits, not benefits that will be paid to the plan as a whole, and such a clam may not be made under § 1132(a)(2). As such, the Court ruled that this claim fails.

The Court said that the Plaintiffs’ final claim is for equitable estoppel, under 29 U.S.C. § 1132(a)(3)(B), on the grounds that the Defendants miscalculated and erroneously paid them excess benefits for up to seven years. The Court ruled that this claim fails because it mirrors the Plaintiffs’§ 1132(a)(1)(B) claim, and therefore the Plaintiffs may not bring a claim for the same remedy under § 1132(a)(3)(B).

Based on the above, since all of the Plaintiffs’ claims fail, the Court affirmed the district court’s grant of summary judgment to the Defendants.