decided: January 13, 1982.
UNITED STATES STEEL CORPORATION, PLAINTIFF-APPELLANT
COMMONWEALTH OF PENNSYLVANIA HUMAN RELATIONS COMMISSION; ITS EXECUTIVE DIRECTOR HOMER C. FLOYD; REBECCA HORNER AND MARCIA BALL DEE, DEFENDANTS-APPELLEES
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 80-0534)
Before Seitz, Chief Judge, Garth, Circuit Judge, and Pollak,*fn* District Judge.
Opinion OF THE COURT
In October of 1974, Rebecca Horner, of Pittsburgh, filed a complaint with the Pennsylvania Human Relations Commission (PHRC), charging that her employer, United States Steel Corporation, "has discriminated against herself and other similarly situated females" in contravention of the applicable state anti-discrimination statute. Appendix at 8. The gravamen of the complaint was that United States Steel's employee benefit plans, in allocating hospitalization and disability benefits, did not treat pregnancy on a parity with other, non-gender-bound, "temporary physical disabilities." Ibid. In 1975, PHRC's federal counterpart, the Equal Employment Opportunity Commission (EEOC), filed suit against United States Steel in the Western District of Pennsylvania, charging that the differential treatment accorded pregnancy violated Title VII of the 1964 Civil Rights Act. In view of the pendency of the federal litigation, PHRC stayed its hand. But in 1976 the Supreme Court decided, in Gilbert v. General Electric, 429 U.S. 125, 97 S. Ct. 401, 50 L. Ed. 2d 343, that a benefit plan giving short shrift to pregnancy did not contravene Title VII as it then stood.*fn1 So, in 1977, EEOC dropped its suit against United States Steel. Whereupon PHRC resumed consideration of Mrs. Horner's complaint, which was supplemented in 1978 by a similar complaint filed by another United States Steel employee, Marcia Ball Dee.
Pursuant to its investigation, PHRC addressed interrogatories to United States Steel.*fn2 The interrogatories sought information, commencing in October of 1971, about (a) temporary disability benefits paid out to any of the company's Pennsylvania employees, and (b) Pennsylvania employee pregnancies for which temporary disability benefits were not paid. United States Steel resisted assembling and turning over the massive data*fn3 requested by PHRC. One of the grounds for resistance appears to have been United States Steel's view that the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq.-under whose aegis the United States Steel benefit plans are administered-preempts the field, precluding inquiry by a state agency such as PHRC.*fn4
On April 8, 1980, PHRC transformed its interrogatories into a subpoena duces tecum, returnable May 12, 1980. On April 22, 1980-three weeks before the subpoena's return date-United States Steel instituted this law suit in the Western District of Pennsylvania. The defendants were PHRC and its Executive Director Homer C. Floyd, plus the two complainants, Mrs. Horner and Mrs. Dee. Announcing that "(t)he field of employee benefit plans ... has been preempted by the federal labor policy ... and particularly by ERISA,"*fn5 the complaint sought (1) a declaration that PHRC's "interrogatories and ... subpoena be null and void," and (2) an injunction barring all of the defendants from further pursuit of the Horner and Dee charges. Appendix at 5, 6-7.
The jurisdictional bases chiefly asserted were two: First, United States Steel relied upon section 502 of ERISA, which confers "exclusive jurisdiction" on district courts to entertain civil actions "by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan," 29 U.S.C. § 1132(a) & (e)(1). Second, United States Steel relied on 28 U.S.C. § 1337, supplemented by 28 U.S.C. § 2201, contending that the case was, within the meaning of 28 U.S.C. § 1337, one "arising under" an act regulating commerce-namely, ERISA-and, further, that declaratory relief was authorized by 28 U.S.C. § 2201.*fn6
The district court granted defendants' motion to dismiss: First, the court held that, as an "employer," United States Steel was not, within the meaning of section 502 of ERISA, a "participant, beneficiary, or fiduciary" of an employee benefit plan, and hence lacked standing to invoke the jurisdiction conferred by section 502. Second, the district court held that United States Steel's claim of federal preemption did not "arise under" ERISA, within the meaning of 28 U.S.C. § 1337, but was rather a potential federal defense to PHRC's state inquiry and the PHRC subpoena which was ancillary thereto.
United States Steel has appealed from the order of dismissal.
We first address the district court's determination that United States Steel lacked standing to sue under section 502 of ERISA. As noted, that section confers standing on "a participant, beneficiary, or fiduciary" of an employee benefit plan. United States Steel contended below-as it contends here-that it is a "fiduciary" with respect to the employee benefit plans embracing the insurance and disability provisions challenged by Mrs. Horner and Mrs. Dee. ERISA defines a "fiduciary" as, inter alia, one who "... exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets ... or ... has any discretionary authority or discretionary responsibility in the administration of such plan." 29 U.S.C. § 1002(21)(A). The district court did not find that United States Steel is not a "fiduciary" with respect to its employee benefit plans. Indeed, on the record before the district court, it seems improbable that such a finding could have been made, since the uncontroverted affidavit of L. A. Valli, Vice-President-Employee Benefits, established that United States Steel (a) has sole authority to determine and alter the terms of its employee health insurance plan, and (b) has that authority plus full authority to administer its salary continuance plan for employees suffering disability.*fn7 What the district court did find was that United States Steel's "complaint makes no allegation of fiduciary status," and that whereas "its supporting brief makes the purely conclusory statement that "United States Steel is entitled to bring this action because of its status as "fiduciary" under ERISA,' " in that same brief "plaintiff accurately identifies itself "Under the terms of ERISA, United States Steel is an "employer." " "*fn8 United States Steel Corp. v. Pennsylvania Human Relations Comm'n, 25 Fair Empl. Prac. Cas. (BNA) 479, 26 Empl. Prac. Dec. (CCH) P31, 993, No. 80-534 (W.D.Pa. March 19, 1981) (Mem.Op.) at 4; Appendix at 46. The district court then reasoned: "Given ERISA's functionally distinct definition of employer and fiduciary, it is most unlikely that Congress considered them to be one and the same." Id. at 5; Appendix at 47.
We disagree. ERISA is a major and very elaborate legislative enterprise intended to secure employee entitlements of immense economic value. We think that, if Congress had intended to debar an "employer" from assuming the powers-and, more important, the manifold burdens and potential liabilities-of a "fiduciary" with respect to an employee benefit plan, that intention would have been explicitly and unambiguously embodied in the statute. ERISA nowhere so declares. To the contrary, to the extent that the statute speaks to the matter at all, it contemplates that there will be situations in which an "employer" will elect to serve as a "fiduciary" for its employee benefit plan. Telling evidence to this effect is to be found in the very next paragraph of ERISA following the definition of "fiduciary": that next paragraph excludes from fiduciary status an investment company, or the investment adviser or principal underwriter thereof, where assets of an employee benefit plan are invested in securities of such investment company, if the investment company is registered under the Investment Company Act of 1940; but the exemption from fiduciary status is limited by a significant proviso-namely, that it does not apply "insofar as such investment company or its investment adviser or principal underwriter acts in connection with an employee benefit plan covering employees of the investment company, the investment adviser, or its principal underwriter." 29 U.S.C. § 1002(21)(B). Cf. 29 U.S.C. § 1108(b)(4).
The legislative presupposition that, not infrequently, the same entity would be both "employer" and "fiduciary" carried forward into the Secretary of Labor's interpretative regulations. See 29 C.F.R. §§ 2509.75-5, FR-3 and 2509.75-8, D-4. And the decided cases conform to this construction of ERISA. See General Motors Corp. v. Townsend, 468 F. Supp. 466 (E.D.Mich.1976);*fn9 Senco of Florida, Inc. v. Clark, 473 F. Supp. 902 (M.D.Fla.1979).*fn10 In short, an ERISA "employer" can be, and often is, an ERISA "fiduciary."
Appellees do not contend that ERISA should be read in a different sense. Rather, in their brief in support of the decision below, appellees characterize that decision as one based on United States Steel's artless pleading: "The district court properly dismissed the complaint herein for lack of jurisdiction under ERISA because U.S. Steel did not allege and did not show that the complaint was filed by it in its capacity as a fiduciary." (Brief of Appellees at 10-11). It is true that United States Steel's complaint is not a model of clarity. Although, as noted above, the complaint invokes ERISA as a basis for jurisdiction and recites that "(t)he field of employee benefit plans ... has been preempted ... by (inter alia ) ERISA,"*fn11 the complaint does not set forth facts from which one could reasonably infer United States Steel's fiduciary status with respect to its employee benefit plans. However, as also noted above, facts probative of that fiduciary status are set forth in the Valli affidavit filed by United States Steel in support of its opposition to the motion to dismiss.*fn12 And that affidavit was not controverted by PHRC and its co-defendants in the district court.*fn13 Thus, when the district court ruled on the motion to dismiss, United States Steel had not only asserted "its status as "fiduciary' under ERISA,"*fn14 but had presented uncontradicted factual support for that assertion. On that state of the record, the district court erred in describing United States Steel's claim of fiduciary status as "purely conclusory"*fn15 -and therefore erred in granting the motion to dismiss.
Our decision is a narrow one: United States Steel has standing to sue under 29 U.S.C. § 1132(a)(3) as a "fiduciary," notwithstanding that it is also an "employer." Having determined that the district court has jurisdiction pursuant to 29 U.S.C. § 1132, we find it unnecessary to consider whether the district court was right in deciding that it had no "arising under" jurisdiction pursuant to 28 U.S.C. § 1337. Cf. Wong v. Bacon, 445 F. Supp. 1177, 1182-83 (N.D.Cal.1977); General Motors Corp. v. UAW, 2 E.B.C. 1229, 23 FEP Cases 1769 (E.D.Mich. No. 9-72156, Oct. 2, 1980).
Appellees contend that, even if the district court has jurisdiction, it should abstain in deference to the already pending PHRC proceedings-proceedings in which, appellees contend, United States Steel's federal claims can be fully protected. But the appropriateness of abstention is not a question to be determined, in the first instance, by this court; the question is one which ought initially to be addressed to the district court, and hence it will be open on remand. Also open on remand is the question whether, assuming arguendo the validity of United States Steel's claim of preemption, that claim is nonetheless unavailing with respect to Mrs. Horner's grievance for the reason that her complaint against United States Steel was filed with PHRC on October 11, 1974, more than two months before January 1, 1975, the date on which ERISA's preemption provision took effect. 29 U.S.C. § 1144(b)(1).
The judgment below is reversed and the cause remanded for further proceedings consistent with this opinion.