ERISA-Eleventh Circuit Holds That The Plaintiff Challenging An Amendment To A Rehabilitation Plan Does Not Have A Valid Cause of Action Under Sections 1132(a)(10) or 1451(a) of ERISA

In WestRock RKT Company v. Pace Industry Union-Management Pension Fund, No. 16-16443 (11th Cir. 2017), WestRock is an employer which contributes to the Pace Industry Union-Management Pension Fund (the “Fund”), a multiemployer pension plan.  It is challenging an action taken by the Fund’s Board of Trustees, namely, an amendment the Board made to the Funds “rehabilitation plan” to include a provision requiring an employer that withdraws from the Fund to pay a portion of the Fund’s accumulated funding deficiency (the “Amendment”).  WestRock alleges it has a cause of action to challenge the Amendment under two sections of ERISA: section 1132(a)(10) (allowing an employer to sue to require the trustees to comply  with or update the rehabilitation plan in the manner required by section 1085 of ERISA (which applies when a multiemployer pension plan is in certain poor financial status)) and section 1451(a) (allowing an employer, who is adversely affected by the act or omission of any party,to bring an action for appropriate legal or equitable relief in connection with a multiemployer plan). The district court ruled that WestRock does not have a valid cause of action under ERISA.

Upon reviewing the case, the Eleventh Circuit Court of Appeals (the “Court”) affirmed the district court’s ruling.  As to section 1132(a)(10), the Court said that WestRock failed to allege properly that the Amendment violates section 1085 in any manner, procedurally or in substance. so the challenge to the Amendment under section 1132(a)(10) fails. As to the section 1451(a), the Court said that, to bring a challenge under that section, the employer must be challenging an act or omission under a certain part of ERISA (Subtitle E).  Here, the Board adopted the Amendment pursuant to its authority under section 1085(e)(3)(A)(ii), which is under Subtitle B, not Subtitle E. Since WestRock is not contesting the right type of act or omission, its challenge under section 1451(a) likewise fails.

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