In Dowling v. Pension Plan for Salaried Employees of Union Pac. Corp. & Affiliates, No. 16-1977 (3rd Cir. 2017), former Union Pacific employee, John Dowling (“Dowling”), is covered by a 277-page retirement plan composed of introductory material, 19 articles of content, and various appendices—none of which explicitly address Dowling’s precise situation. When Dowling retired, the plan administrator interpreted the plan to provide Dowling with a lower monthly payment than he expected. Dowling challenged the administrator’s decision as contradicting the plan’s plain language, but the district court found the plan ambiguous and the administrator’s interpretation reasonable.
Dowling appealed under ERISA 502(a)(1)(B)( seeking a declaratory judgment stating his rights and liabilities). The dispute now centers on three issues: the text of the plan, the court’s standard of review, and whether a conflict of interest alters the outcome. Upon reviewing the case, the Third Circuit Court of Appeals (the “Court”) determined that, because the plan’s terminology, silence, and structure render it ambiguous, the plan accords the plan administrator discretion to interpret ambiguous plan terms, and the mere existence of a conflict of interest is alone insufficient to raise skepticism of the plan administrator’s decision. Accordingly, the Court decided that it will grant deference to the plan administrator’s decision as to benefit payments amounts, and the Court affirmed the district court’s judgement.