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GOMEZ v. LEWIS

November 18, 1968

Floyd Gomez, Plaintiff
v.
John L. Lewis , Josephine Roche and Henry Schmidt, Trustees of the United Mine Workers of America Welfare and Retirement Fund, Defendants


Dumbauld, District Judge.


The opinion of the court was delivered by: DUMBAULD

 The revenues thus generated were to be used for paying pensions to retired and disabled coal miners. Certain aspects and features of the trust fund created for this purpose were described in Lewis v. Benedict Coal Co., 361 U.S. 459, 465, 4 L. Ed. 2d 442, 80 S. Ct. 489 (1960); and Myhalyk v. Lewis, 398 Pa. 395, 402-403, 158 A.2d 305, 88 A.L.R.2d 486 (1960). The fund was legalized by Section 302(c)(5) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5) as an exception to the general prohibition in 29 U.S.C. § 186(a) against payment of money by an employer to employees. That prohibition was directed against labor union racketeering. Arroyo v. United States, 359 U.S. 419, 425-426, 3 L. Ed. 2d 915, 79 S. Ct. 864 (1959).

 29 U.S.C. § 186(c)(5) requires that the payment be to a trust fund, under a written agreement providing for impartial administration, and that the fund be used "for the sole and exclusive benefit of employees [of the employers paying into the fund] and their families and dependents."

 Plaintiff in the case at bar seeks to require the trustees of the fund to award him a pension. In a similar claim this Court held in Pavlovscak v. Lewis, et al., 190 F. Supp. 205, 209 (W.D. Pa. 1960), aff'd 295 F.2d 39 (C.A. 3, 1961), that the question for judicial determination in this type of case is whether the denial of pension was arbitrary and capricious or constituted abuse of discretion on the part of the trustees.

 It is admitted by stipulation (Par. 7) and not contested by plaintiff that the trustees of the fund "are granted broad discretionary powers with regard to the administration of the Trust Fund and with respect to questions of coverage and eligibility for Trust Fund benefits and all such related matters, including the discretionary power to adopt regulations for the extension of Trust Fund benefits, the power to change those regulations from time to time, and the power to interpret the regulations so adopted to determine who meets them and who does not."

 This Court in Powell v. Lewis, Civil No. 18279, C.C.H. Labor Cases, Par. 16,866, so held. Judge Willson there upheld the reasonableness of eligibility requirements there involved, including the requirement of regular employment in a classified job (i.e. one covered by the industry's collective bargaining agreement) in the coal industry immediately preceding May 29, 1946, when the first trust came into existence.

 This requirement, among others, precludes plaintiff from being eligible for a pension in the case at bar. It is stipulated that between September 1944 and October 1957 he was a partner in Dorg Mining Company, and thus an employer rather than an employee on May 29, 1946.

 Plaintiff was similarly ineligible by reason of failure to meet the requirement of twenty years of classified service within the thirty years immediately preceding the application for pension.

 Plaintiff's application was filed on April 25, 1963. The thirty year period would thus begin April 25, 1933. Defendants gave plaintiff credit for the years 1934-44, one-fourth of 1957, and 1958-62. He retired from the coal industry on June 9, 1962. He was given credit for 16 1/4 of the necessary 20 years. Plaintiff did not claim any credit prior to March 6, 1934. Apparently he was not connected with the coal industry in 1933, and in any event that year would not have changed the result. However, plaintiff claimed service for the three years 1944-46 with the Harkleroad Mines as a miner loader. He was not given credit for 1945 and 1946. But these years also would not have sufficed to meet the twenty year minimum.

 In defining what shall constitute a year of service, Resolution No. 56, Par. I, B, 1 (stipulation Par. 8) contains a provision reading as follows:

 
"* * * provided further that he was not a participant in nor in any way connected with, the operation or management of a coal mine or coal operation, and was not the recipient of income, revenue, emolument, proceeds, gift or return from the operation or management of a coal mine or coal operation either directly or indirectly."

 It may well be that this proviso is too broad, if it is advanced merely for the sake of conformity with the statute and not as an exercise of prudential discretion by the trustees, and that a person who is duly qualified as an employee of an employer paying into the fund should not be disqualified merely because he owns a share of stock in a large coal company traded in on the stock exchange. However, this would not benefit plaintiff, as he claims no industry employment for the excluded years other than as a tipple man for the Dorg Mining Company, of which he was admittedly a partner during those years. Therefore he did not meet the eligibility requirements in force at the time of his application, which requirements were reasonable in so far as they applied to plaintiff.

 Plaintiff's chief contention is that when the above quoted proviso regarding time spent as an operator or in management was adopted on April 11, 1960, and publicized by a letter dated June 28, 1960, and went into effect on July 1, 1960, plaintiff, who was then over the prescribed retirement age of 60 (having been born on March 14, 1898) and who allegedly would have been acceptable under the regulations in force prior to July 1, 1960, should have ...


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